Unit 2 — Exam Guide

1. Introduction

The Industrial Disputes Act, 1947 is the principal legislation for investigation and settlement of industrial disputes in India. The definition of ‘industrial dispute’ is the foundation upon which the entire Act operates.

2. Definition — Section 2(k)

Section 2(k) defines Industrial Dispute as any dispute or difference between:

• Employers and employers, or
• Employers and workmen, or
• Workmen and workmen
• which is connected with the employment or non-employment or the terms of employment or the conditions of labour of any person.

3. Five Essential Requisites

(i) There Must Be a Real Dispute

• A mere demand without any dispute is not enough
• There must be a genuine controversy or disagreement
• Bombay Union of Journalists v. The Hindu — A demand becomes a dispute only when the employer refuses or fails to accept it

(ii) Between the Right Parties

• The dispute must be between employers and workmen, or between either group
• Dispute by or against a non-workman does not qualify
• The parties must have a direct employment relationship

(iii) Connected with Employment Matters

• Must relate to employment, non-employment, terms of employment, or conditions of labour
• Personal disputes or disputes unconnected with employment are excluded
• Covers: wages, hours, leave, dismissal, working conditions, etc.

(iv) Disputant Must Be a Workman

• The person raising the dispute must fall within the definition of workman under S.2(s)
• Managerial and administrative persons cannot raise industrial disputes

(v) Must Arise in an Industry

• The dispute must arise in an industry as defined under S.2(j)
• Bangalore Water Supply v. Rajappa (1978) — The Supreme Court gave a wide interpretation to ‘industry’ covering all systematic activities involving employer-employee cooperation

4. Section 2A — Individual Disputes

Section 2A (added by amendment) provides that where an individual workman is dismissed, discharged, retrenched, or terminated, such dispute shall be deemed to be an industrial dispute even if no other workman or union supports it.

• This removed the earlier requirement that the dispute must be espoused by a group of workmen
• Protects individual workers from unjust termination
• The individual workman can directly approach the Labour Court

1. Introduction

The Industrial Disputes Act, 1947 establishes a hierarchy of authorities for investigation and settlement of industrial disputes. These range from advisory bodies to adjudicatory tribunals.

2. Works Committee — Section 3

• Constituted in establishments with 100 or more workmen
• Equal number of representatives from employers and workmen
• Purpose: promote measures for good relations
• Advisory body only — decisions not binding
• Deals with day-to-day grievances, not major disputes

3. Conciliation Officer — Section 4

• Appointed by the appropriate government
• Duty: mediate and promote settlement of disputes
• Must submit report within 14 days (strike/lockout in public utility: 2 months)
• Can enter premises, inspect, question
• If settlement reached → binding agreement; if not → failure report

4. Board of Conciliation — Section 5

• Consists of a chairman (independent) + 2 or 4 members (equal representation)
• Report within 2 months
• Investigates the dispute and recommends settlement
• Recommendations not binding

5. Court of Inquiry — Section 6

• Consists of independent persons appointed by the government
• Purpose: inquiry only — not settlement
• Report within 6 months
• Report is NOT binding but carries moral weight
• Published in the Official Gazette

6. Labour Court — Section 7

• Presided by a person who is/was a High Court judge or has 7+ years judicial experience
• Deals with matters in the Second Schedule:
• Propriety of discharge/dismissal, legality of strikes/lockouts, standing orders, withdrawal of concessions

7. Industrial Tribunal — Section 7A

• Deals with matters in Second + Third Schedule
• Third Schedule matters: wages, hours, bonus, retrenchment, rationalisation, closure
• Wider jurisdiction than Labour Court
• Same qualifications as Labour Court presiding officer

8. National Tribunal — Section 7B

• For disputes of national importance or involving multiple states
• Constituted by the Central Government
• Same qualifications but of higher standing

9. Voluntary Arbitration — Section 10A

• Both parties voluntarily agree to refer dispute to an arbitrator
• Written agreement specifying the arbitrator(s) and subject matter
• Agreement published in the Official Gazette
• Arbitrator gives an award which is binding on both parties
• Award published within 30 days
• No appeal against arbitration award (except on limited grounds)
• Preferred method as it is quicker and parties choose their own arbitrator

1. Definition — Section 2(s)

Section 2(s) defines Workman as any person (including an apprentice) employed in any industry to do:

• Manual work
• Unskilled work
• Skilled work
• Technical work
• Operational work
• Clerical work
• Supervisory work
• for hire or reward, whether the terms of employment are express or implied

2. Exclusions

The following are NOT workmen:

• Persons subject to Air Force Act, Army Act, or Navy Act
• Persons employed in the police service or prison service
• Persons employed mainly in a managerial capacity
• Persons employed mainly in an administrative capacity
• Persons employed in a supervisory capacity drawing wages exceeding Rs. 10,000 per month

3. Key Principles

• The word ‘mainly’ is very important — if a person does both managerial and non-managerial work, the predominant nature of duties determines status
• Test is the nature of duties, NOT the designation
• Even a person called ‘Manager’ can be a workman if duties are mainly clerical
• Burden of proof is on the person claiming to be a workman

4. Who IS a Workman (Examples)

• Driver, Watchman, Peon, Sweeper, Cook
• Clerk, Typist, Stenographer
• Machine operator, Technician
• Apprentice, Trainee doing actual work

5. Who is NOT a Workman (Examples)

• Company Secretary (managerial)
• Bank Branch Manager (administrative)
• Partner in a firm (not an employee)
• Independent contractor (no employment relationship)

6. Important Case Laws

LIC v. D.J. Bahadur (1981) — The Supreme Court held that LIC Development Officers are NOT workmen as their duties are mainly managerial in nature (recruiting agents, supervising business).

Bangalore Water Supply v. A. Rajappa (1978) — Gave a broad interpretation to ‘industry’, which expanded the scope of who can be a workman.

S.K. Verma v. Mahesh Chandra (1983) — Even a person employed in a supervisory capacity is a workman if wages do not exceed the prescribed limit.

Burmah Shell v. Their Workmen — The nature of work, not designation, determines whether a person is a workman.

1. Definition — Section 2(b)

Section 2(b) defines Award as an interim or final determination of any industrial dispute or of any question relating thereto by any Labour Court, Industrial Tribunal, or National Tribunal. It includes an arbitration award made under S.10A.

2. Types of Awards

• Interim Award: Temporary order during pendency of proceedings
• Final Award: Concludes the dispute
• Arbitration Award: Given by a voluntary arbitrator under S.10A

3. Publication — Section 17

• Every award must be sent to the appropriate government by the Tribunal
• Government shall publish the award in the Official Gazette within 30 days of receipt
• Publication gives the award legal force
• Award becomes enforceable after publication

4. Enforcement — Section 17A

• Award becomes enforceable 30 days after publication in the Gazette
• Government may modify or reject the award on limited grounds
• If not modified/rejected within 30 days, it becomes binding automatically

5. Period of Operation — Section 19(3)

• An award shall remain in operation for a period of 1 year from the date it becomes enforceable
• Government may extend the period by notification
• Either party can terminate the award by giving 2 months’ notice in writing
• Even after termination, it continues until a new settlement/award replaces it

6. Wages During Pendency — Section 17B

Section 17B provides that where in any case a Labour Court/Tribunal has ordered reinstatement and the employer appeals, the employer shall pay the workman full wages last drawn during the pendency of the appeal.

7. Penalty for Non-Compliance — Section 29

• Breach of award: imprisonment up to 6 months or fine up to Rs. 1,000 or both
• Applies to any person who commits a breach of any term of an award

8. Recovery — Section 33C

• Money due under an award can be recovered through the Labour Court
• Recovered as arrears of land revenue
• Application can be made by the workman or any person authorised