Dehrm516 Industrial Relation and Labour Laws

Industrial Relation and Labour Laws
DEHRM516
Edited by:
Dr. Mridula Mishra
Edited By
Dr. Mridula Mishra
Title: INDUSTRIAL RELATION AND LABOUR LAWS
Author’s Name: Dr. Shikha Goyal
Published By : Lovely Professional University
Publisher Address: Lovely Professional University, Jalandhar Delhi GT road, Phagwara - 144411
Printer Detail: Lovely Professional University
Edition Detail: (I)
ISBN: 978-81-19334-34-6
Copyrights@ Lovely Professional University

Content
Unit 1: Introduction to Industrial Relations 1

Dr. Shikha Goyal, Lovely Professional University
Unit 2: Industrial Relations in India 14
Unit 3: Trade Unions 24
Unit 4: The Trade Union Movement 38
Unit 5: Trade Union Rivalry and Recognition 51
Unit 6: Size and Finance of Indian Trade Unions 64
Unit 7: Collective Bargaining 74
Unit 8: Grievances 84
Unit 9: Discipline 99
Unit 10: Worker Participation in Management 115
Jaskiran Kaur, Lovely Professional University
Unit 11: Industrial Disputes 125
Unit 12: The Industrial Disputes Act, 1947 138
Unit 13: Industrial Employment (Standing Orders) Act, 1946 157
Unit 14: Wage Legislation 171
Unit 15: Factories Act, 1948 183
Unit 16: Trade Unions Act,1926 203
Unit 17: The Mines Act,1952 215
Unit 18: ILO 228
Unit 19: International Industrial Relations 239
Unit 20: Emerging Trends in Industrial Relations 248
Notes
Dr. Shikha Goyal, Lovely Professional University Unit 01: Introduction to Industrial Relations
Unit 01: Introduction to Industrial Relations

CONTENTS
Objectives
Introduction
1.1 Concept of Industrial Relation
1.2 Objectives of Industrial Relation
1.3 Evolution of Industrial Relation
1.4 Scope of Industrial Relation
1.5 Model of Industrial Relations
1.6 Approaches to Industrial Relations
Summary
Keywords
Self Assessment
Answers for Self Assessment
Review Questions
Further Readings
Objectives
After studying this chapter, you will be able to:
 Understand the historical overview of industrial relations in India.

 Learn about evolution of Industrial Relations in India.
 Know the objectives of Industrial Relations in India.
 Learn about the Dunlop Model of Industrial Relations.
 Learn about the IILS Model of Industrial Relations.
 Learn about the Craig’s Model of Industrial Relations.
 Learn the need of different approaches to Industrial relation.
 Learn about the different approaches of Industrial Relations.
Introduction
Industrial relations deal with the relationship between labor and management and their
organization. The concept of industrial relations is very broad and includes in its fold all the
relationships in modern industrial society which arise out of employee-employer relationships and
the role of the state in these relations. Industrial relations are multi-dimensional in nature and are
influenced by the various factors. India has witnessed the growth of this field of study through three
major phases namely the pre-independence period, the post-independence period, and the post
globalization era.
1.1 Concept of Industrial Relation

Industrial relation means the relation between an employee and an employer in the course of running
an industry and may project itself to spheres which may project itself to spheres which may
transgress to the areas of quality control, marketing, price fixation and disposition of profits among
others.
LOVELY PROFESSIONAL UNIVERSITY 1

Notes
Industrial Relation and Labor Laws
In simple terms,
Industrial Relations comprise of two terms:
1. Industry: It refers to any productive activity in which an individual or a group of individuals are
engaged.
2. Relations: It means the relationships that exist within the industry between the employer and
his workmen.
Definition of Industrial Relation

According to ILO, “Industrial Relations deal with either the relationship between the state and
employers and workers organizations or the relation between the occupational organizations
themselves”.
According to Dale Yoder, “Industrial Relation is a relationship between management and
employees or among employees and their organization that characterizes and grows out of
employment”
1.2 Objectives of Industrial Relation

It is difficult to precisely lay down the objectives of industrial relations. However, various authors on
the subject attempted to highlight the main objectives of industrial relations.
1. Improving the economic condition of workers in the existing state of industrial management and
political government.
2. Control by the state over industries to regulate production and industrial relations.
3. Socialization or nationalization of industries by making the state itself the employer; and
4. Vesting the proprietorship of the industries in the workers.
The objectives of industrial relations require examinations of following key features:
i. Employer to individual employee relationships:

This relates to management’s policies and practices that ultimately affect the productivity and well-
being of their employees as individuals.
ii. Management relations with trade union or group of workers:

It covers rights and practices, regulated by law or legal machinery. It relates to:
a. Collective agreements
b. Settlement of industrial disputes
c. Management’s rights
d. Formation and recognition of unions as representative body of workers
iii. Industrial peace and productivity:

One of the most important objectives of industrial relations is to maintain industrial peace and
harmony and, thereby, increase productivity. It depends on the quality of union-management
relations at workplaces.
1.3 Evolution of Industrial Relation

IR plays a major role in building and maintaining industrial peace and democracy. India has
witnessed the growth of this field of study through three major phases namely the pre-independence
period, the post-independence period and the post globalization era. Different environmental factors
have had varied impact on the evolution of IR during these phases in India. The evolution of IR
during these phases in India is discussed below:
A. Pre-Independence Phase of Industrial Relation:

Pre-independent India was characterized by absence of any major laws that could govern the labor
and management relationship. The labor was hired as per requirement by the employer and was
2 LOVELY PROFESSIONAL UNIVERSITY

Notes
asked to leave when the need ceased to exist. There were no rules to govern the hiring and firing of
the workers. The employer had all the power and the workers did not enjoy any form of advantages
and faculties at the hands of the owner/ employer. Various leaders did emerge during this phase,
however, still much headway was not seen in the development of better industrial relations. Even till
the end of the First World War, no major trade union had evolved. The Employers and Workmen
(Disputes) Act,1880) was the only act prevailing to settle wage related disputes of the workers. But
the end of the world war saw immense unrest in the industry. It led to violent protests by the workers
and lockouts by the employers in retaliation and that is when the government enacted the Trade
Disputes Act, 1929. This was done to ensure speedy settlement of work-related disputes. But even
this act was not being followed by the state or central governments. The industrial unrest continued
as a result of which the Bombay Industrial Relations Act was passed in 1938. The main feature of this
act was that it had an Industrial Court which was permanent machinery for the settlement of
industrial disputes. By the end of World War II, India experienced grave problems such as
unemployment, high population, scarcity etc. which needed to be taken care of.
B. Post-Independence Period:
Pre-independent India was characterized by absence of any major laws that could govern the labor
and management relationship. The labor was hired as per requirement by the employer and was
asked to leave when the need ceased to exist. There were no rules to govern the hiring and firing of
the workers. The employer had all the power and the workers did not enjoy any form of advantages
and faculties at the hands of the owner/ employer. Various leaders did emerge during this phase,
however, still much headway was not seen in the development of better industrial relations. Even till
the end of the First World War, no major trade union had evolved. The Employers and Workmen
(Disputes) Act, 1880) was the only act prevailing to settle wage related disputes of the workers. But
the end of the world war saw immense unrest in the industry. It led to violent protests by the workers
and lockouts by the employers in retaliation and that is when the government enacted the Trade
Disputes Act, 1929. This was done to ensure speedy settlement of work-related disputes. But even
this act was not being followed by the state or central governments. The industrial unrest continued
as a result of which the Bombay Industrial Relations Act was passed in 1938. The main feature of this
act was that it had an Industrial Court which was permanent machinery for the settlement of
industrial disputes. By the end of World War II, India experienced grave problems such as
unemployment, high population, scarcity etc. which needed to be taken care of.
C. Industrial Relation in the post globalization era:

Under the Economic Policy of 1991, globalization made its way into India. Globalization made it
easier for businesses to be conducted across national boundaries leading to organizations that are
much more diverse and widely located. These organizations are purely driven by the spirit of
competition and global survival. As India witnessed globalization, many foreign investors entered
and set up ventures across different sectors such as information technology, hospitality, automobiles,
pharmaceuticals, etc. As the Indian economy opened up to the outside world, the labor management
relations are now heavily influenced by the international bodies such as international labor
organization, International Monetary Fund, World Bank, World trade Organization to name a few.
1.4 Scope of Industrial Relation

There are two important aspects of such relationship:
1. Relations between individual workers and manager(s) called personnel relations
2. Collective relations between labor unions and management called labor relations or labor
management relations. The pattern of labor management relations is shaped by state intervention.
Think upon
What was the condition and problems faced by Indian Labors?
Answer: Poor Wages, Poor Working Condition, Absence of Job Security, Long Working Hours,
Absence of Welfare Activities, Employee’s Strike, Low productivity, and Absence of Skilled
Labor.
Did you know?

How was the attitude of colonial government toward industrial relation during Pre-independence
phase?

Notes
Answer: Passive regulator

WHY???
Because it could provide sum of protective and regulative legal framework for industrial relations.
1.5 Model of Industrial Relations

There are three models of Industrial Relations which can be discussed:
1. Dunlop Model of Industrial Relation

2. Craig’s Model of Industrial Relation
3. IILS Model of Industrial Relation
I. Dunlop's System Model

One of the significant theories of Industrial Relations was put forth by John Dunlop in 1958.Dunlop
contended that Industrial Relation system was a subsystem of the wider society that existed to resolve
economic conflict.
Elements of Industrial Relations

IR system comprises of for elements:
1. Actors
2. Contexts
3. A body of employment rules
4. A binding ideology
1. Actors:
The actors were identified as employers and their organizations, employees, and any representative
body of workers, such as trade unions, and the government and public agencies.
The actors in the system are,
(i) A hierarchy of managers and their representatives,
(ii) A hierarchy of workers and their organizations, and
(iii) Specialized governmental agencies. (Specialized private agencies created by first two actors)
concerned with workers, enterprises, and their relationships.
The first two are directly related to each other in that the managers have responsibilities at varying
levels to issue instructions (to manage), and the workers at each corresponding level have the duty
to follow such instructions (to work).The specialized government agencies as actors may have
functions in some industrial relations systems so broad and decisive as to override the hierarchies of
managers and workers on almost all matters.
2. Contexts:
These three actors maintain relationships with one another within an environment made up of three
tightly inter woven contexts. The main contexts that shaped the conduct of industrial relations were
technology, market and budgetary constraints, and the distribution of power within the wider
society. These features of the environment of an industrial relations system are determined by the
larger society and its other subsystems. These contexts are decisive in shaping the rules established
by the actors in industrial relations systems.
Significant aspects of the environment are

i. Technological features of work situation-
The technological features of the workplace have very far-reaching consequences for an industrial
relations system, influencing the form of management and employee organization, the problems
posed for supervision, many of the features of the required labor force, and potentialities of public
relations.

Notes
ii. Market and Economic Context-

The product market or budget is a decisive factor in shaping the rules established by industrial
relations systems. The market or budgetary context also indirectly influences the technology and
other characteristics of workplace. An industrial relations system created and administered by its
actors is adaptive to its market and budgetary constraints.
iii. Political Context-

The relative distribution of power among the actors in the larger society tends to a degree to be
reflected within the industrial relations systems; their prestige, position and access to the ultimate’s
of authority within the larger society shapes and constrains an industrial –relations systems, the
relative bargaining powers among the actors, or their controls over the processes of interaction or
rule setting.
The distribution of power in the large society does not directly determine the interaction of the actors
in the industrial relations system; rather, it is a context which helps to structure the industrial
relations system itself.
3. Rules:
Within these constraints, the actors develop substantive and procedural rules by unilateral action, by
joint regulation, or by tripartite action involving the state.
Types
1. Substantive Rules: concerned with terms and conditions of employment and rights and obligations
of workers. (social security and welfare schemes, rules of discipline, physical working conditions…)
2. Procedural Rules: concerned with the procedures and manner in which substantive rules are
framed and established.
3. Rules relating to their administration and enforcement.
4. Ideology:
A body of ideas which defines the role of each actor and the perception that each actor holds towards
the place and function of others in the system. The whole system is bound together by shared
understandings and beliefs, including acceptance of the main elements of the IR system itself.
Main focus of Dunlop Model

The model focuses on institutionalization of conflict and establishment of orderly industrial relations.
This model is to describe national system of industrial relations.
Limitations
1.The actors in industrial relations are not only management, workers, and governments. With
liberalization and growing environmental concerns, consumers and community have also come to
play a critical role in industrial relations processes and outcomes.
2. Dunlop talks about roles of actors, not people. In industrial relations, relationships are established
primarily by and between people. Therefore, behavioral aspects like human motivations and
preferences cannot be ignored.
3. The System Model by Dunlop has described as national system of industrial relations where as the
sources of power and rules are situated within national framework. Whereas after globalization, large
numbers of Multinational Corporations (MNCs) are taking place in which decision- making is no
longer tide to borders of national system,
4. Dunlop did not design this framework for international industrial relations whereas, in
globalization, free flow of capital, labor, technology and trade/ market are taking place.
II. IILS Model

The International Institute of Labor Studies developed this model while functioning closely with ILO.
Elements/Dimensions
There are four elements in this model:
1. Parties

Notes
2. Environment
3. Process
4. Rules
i. Parties:
Parties in industrial relations comprise the following – the state, workers’ organizations or trade
unions and managerial hierarchies. The model has furnished the details in respect to the status and
basic features of each party.
ii. Environment:
Environment in the model refers to the conditions under which industrial establishments operate. It
may be economic, political, social or cultural in nature. The model has specified the details in each
area and the manner in which they influence the role of the parties and the nature of rules framed.
iii. Processes:
Processes involved in rule-making include the following – negotiation, collaboration and resolution
of conflict.
1. Negotiation: In negotiation, the workers and employers jointly deliberate over the establishment
of rules. In this process, workers are generally represented by unions.
2. Collaboration: Collaboration involves joint determination of issues of common interest. This
process serves as a method to prevent industrial disputes from arising.
3. Resolution of Conflict: In the process of resolution of conflict, the contentious issues are resolved,
and the terms are usually recorded in the form of agreement or settlement.
4. Rules:
Rules in industrial relations relate mainly to the terms and conditions of employment. The model
mentions three types of authorities involved in making them. These authorities are monopolistic,
dualistic and pluralistic.
I. Monopolistic:
Under the monopolistic type of authority, rules are unilaterally laid down by the employer.
II. Dualistic:
Under the dualistic type of authority, the power of making rules vests jointly in the employer and
the trade union, or in the employer and the state or in the trade union and the state.
III. Pluralistic:
Under the pluralistic type of authority, the representatives of the employer, workers and the state
establish rules based on mutual discussions and consensus.
In simple terms,
1. Environment - condition under which industries or industrial establishments operate. Example:
social, cultural, political etc.
2. Parties- state, workers’ organizations or trade unions, and employers or managerial hierarchies.
3. Process- negotiation, collaboration, and resolution of conflict.
i. In negotiation, the workers and employers make joint effort to make rules.
ii. Collaboration involves joint determination of issues of mutual interest in a spirit of cooperation.
iii. Resolution is decision of issues of contention between the parties in the form of award or
settlement.
4. Rules- formed by different authorities concerning terms and condition of employment.
Criticism
i. This model doesn’t clearly explain the impact of multi-unionism and union rivalries.

Notes
ii. This model doesn’t present convincing assessment of the condition in small-sized undertaking and
unorganized sector
iii. Classification of environment is broad. This model doesn’t explain impact of a particular factor
operating under variable condition.
iv. This model doesn’t clearly explain the impact of extraordinary situation like war, economic crisis,
political instability, downsizing etc. on the formation of rules.
v. This model is silent about behavioral aspect of individual.
III. Craigs Model /Industrial Relations System Model
a) Natural systems interact with their environments in a dynamic fashion—through feedback

loops. There are five subsystems that interact in this model.
1. Legal, which includes common law, statutory law, and collective bargaining law
2. Economic, which includes the key elements product/service markets, labor markets, money
markets, and technology
3. Ecological, which includes the physical environment, climate, and natural resources that
influence actors and the industrial relations system
4. Political, which concerns Canada’s form of democracy and its action to create and amend
legislation relative to employment issues
5. Socio cultural, which are societal values and beliefs that affect the actors
b) Actors and Internal Inputs

When the actors of the system are influenced by the external inputs, they provide inputs to the
systems in regard to their values, goals, strategies, and power, which guide their actions.
c) Conversion Mechanisms
Actors use processes called conversion mechanisms to convert those internal and external inputs
into outputs of the system.
Conversion methods include the following:
 Collective bargaining
 Day-to-day relations
 Conflict resolution mechanisms, such as grievances procedures
 Third-party dispute resolution interventions
 Joint committees

Notes
 Committees that handle broader issues

 Strikes and lockouts
d) Outputs or Results
The outputs, or results of the conversion methods, include the following:
 Employer outcomes, such as the rights and responsibilities of management in the

employment relationship
 Labor outcomes, which are equity issues of ways to instill fairness in the workplace
 Worker perceptions, including the work climate, morale, and union satisfaction
 Conflict, which are strikes and lockouts (which are also conversion mechanisms)
1.6 Approaches to Industrial Relations

Before understanding about the different approaches to Industrial relation, let us discuss about the
need of understanding these approaches.
The reason behind the same is Industrial relations can be viewed from different angles.
Example
“Industrial conflicts are the results of several socio-economic, psychological and political factors.”
Different views:
 Economist: An economist tries to interpret industrial conflict in terms of impersonal markets

forces and laws of supply demand.
 Politician: To a politician, industrial conflict is a war of different ideologies – perhaps a class-
war.
 Psychologist: To a psychologist, industrial conflict means the conflicting interests, aspirations,
goals, motives and perceptions of different groups of individuals, operating within and reacting
to a given socio-economic and political environment.
Did you know?

What do you believe any of the angle gives a perfect view of Industrial Relations?
Answer: No
Because
 These views add to intellectual dimension in Industrial Relation context.

 It is an eclectic system composed of group of people and organizations working with varying
viewpoints.
Different approaches to Industrial Relations:

The different types of industrial relations are as under:
1. Psychological approach to Industrial relations
2. Sociological approach to Industrial Relations
3. Human relations approach to Industrial Relations
4. Socio-ethical approach to Industrial relations
5. Gandhian approach to Industrial Relations
I. Psychological approach:
The psychologist is of the view that the problem of industrial relations is deeply rooted in the
perception and the attitude of focal participants. The problems of IR have their origin in the

Notes
perceptions of the management, unions and the workers. The influence of individuals perception on
his behavior has been studied by Mason Harie. He studied the behavior of two different groups,
namely, “Union leaders” and the “The Executives” through a test.
What has been done in a test?

A photograph open ordinary middle aged person served as input, which both the groups were
expected to rate.
What is the output of the test?

Both the groups rated that photograph in different manner.
1. Union leaders referred the person in the photograph as manager
2. The group of executives saw Union Leader in the photograph
Conclusion after the test

1. The general impression about a person is radically different when he is seen as a representative of
management from that of the person as a representative of labor.
2. The management and labor see each other as less dependable.
3. The management and labor see each other as deficient in thinking regarding emotional
characteristics and interpersonal relations.
Think upon
What is the reason behind the variance in perception of parties?
In simple terms,
The conflicts between labor and management occur because every group negatively perceives the
behavior of the other i.e. even the honest intention of the other party so looked at with suspicion. The
problem is further aggravated by various factors like the income, level of education, communication,
values, beliefs, customs, goals of persons and groups, prestige, power, status, recognition, security
etc are host factors both economic and non-economic which influence perceptions unions and
management towards each other.
II. Sociological Approach to Industrial Relations:

The industry is a social world in miniature and the workshop is in reality a community made up of
various individuals and groups with different personalities, educational background, emotions and
a host of other personal factors like attitude and behavior.
Think upon
Which kind of problems will emerge due to differences in individual attitudes and behavior?
Answer: problems of conflict and competition among the members of an industrial society
If we will just think upon the problems of industrial relations then what will come in our mind in
terms of its reasons?
Might be wages, employment conditions, labor welfare and many more but sociological aspects of
these problems are more important than any other problem. Sociological factors like value system ,
customs common norms commerce symbols, attitude and perception of both labor and management
affect the industrial relations in different ways.
III. Human relations approach:

Do you agree that handling human resource is the most tricky and delicate as compared to the other
resources?
Yes, because these are not inanimate or passive .They are composed of pulsating human beings
having their own emotions, perception attitude personality etc .These characteristics make them
complex individuals and when they interact with each other , their complexity further multiplies.
Does problem in industrial relations arise out of attention which is created because of the employer’s
pressures and workers reactions?
Answer would be yes. But we need to think about the solutions of such tensions.

Notes
Probable solutions could be management need to realize the efforts which are required to set the right
situations. These tensions cannot be removed unless the management learns about the basic needs of
human being and how they can be motivated to work effectively.
IV. Socio-ethical approach:

This approach to industrial relations is not much widely accepted. This approach holds that the
industrial nations besides having a sociological base do have some ethical ramifications.
How good industrial relations can be maintained?

Good Industrial relations can only be maintained when both labor and management realize their
moral responsibility through Mutual Corporation and greater understanding of each other’s
problems.
IV. Gandhian approach:

The Gandhian approach to industrial relations was proposed by the father of our nation, Mahatma
Gandhi or Mohandas Karam chand Gandhi, who was also a well-known labor leader.
Features
1. Gandhi Ji was not against strikes; instead, he gave the following conditions to carry out a favorable
strike:
 The workers or labors can go on a strike only if there is a specific grievance.

 There should be complete non-violence while carrying out strikes.
 The ones who are not involved in the strikes should not be tormented.
2. Though Gandhi Ji was not against carrying out strikes, he believed that it should be the last option
to which the labor should resort to, after the failure of all the constitutional and peaceful ways of
resolving conflicts and negotiating with the employer.
3. The Gandhian approach illustrated that nature had provided us with human capabilities and
different kinds of property.
Thus, such nature’s gift belongs to the whole society and cannot be considered as of personal
possession by anyone.
4. The objective of this theory is to adopt non-violent ways to bring in economic parity and material
enhancement in a capitalist society.
5. Gandhi Ji perceived that every organization is a joint venture, and the labor should be treated as
associates or co-partners with the shareholders. Moreover, the workers should have proper
knowledge of all the business transactions as it is their right.
6. He focused on increasing the production and believed that the gains should be shared with the
employees because of whom it has been possible.
7. He also emphasized that the industrial disputes and conflicts between the parties should be
resolved healthily through interactions, arbitration and bilateral negotiations.
Summary
The term “industrial relations” refers to the complexity of human relationships, which emerge in
work situations.
The subject of industrial relations deals with certain regulated and institutionalized relationships in
industry.
The employment relationship in any work situation provides the setting for industrial relations.
With this objective, the workers as a group form trade union, the employers form their own
associations, and the state provides institutions for the regulation of relations.
The field of industrial relations has a multi-disciplinary base.

Notes
Keywords
Industrial Relations, Human Relations, Dunlop , Gandhian, Pre and Post-independence.
Self Assessment
1. During which century Industrial Relations started in India?
A. 18th century
B. 19th Century
C. 20th Century
D. 17th Century
2. Which cannot be considered as the problem faced by Indian Labors?

A. Poor wages
B. Long working Hours
C. High Productivity
D. Absence of Job Security
3. Independent India got an opportunity to restructure the industrial relations system during
post-independence.
A. True
B. False
4. What is a reason behind having colonial model of industrial relations in practice during pre-
independence phase of IR?
A. Social tension
B. Conflict
C. Continue industrial unrest
D. All of the above
5. The Trade unions and the Industrial Disputes (Amendment) Bill, 1988 proved as a
legislative disaster.
A. True
B. False
6. Which is included as model of Industrial Relations?

A. Dunlop’s model
B. Craig’s Model
C. IILS Model
D. All of the above
7. The rules which are concerned with terms and conditions of employment and rights and
obligations of workers is known as Substantive rules.
A. True

Notes
B. False
8. Which is not an element of IILS model of industrial relations?

A. Rules
B. Processes
C. Energy
D. Parties
9. Under which type of authority, rules are unilaterally laid down by the employer?
A. Monopolistic
B. Dualistic
C. Pluralistic
D. None of the above
10. How many subsystems exist under Craigs Model of Industrial Relation?
A. Four
B. Five
C. Three
D. Six
11. Industrial conflicts are the results of several socio-economic, psychological and political
factors.
A. True
B. False
12. There is a single angle to give a perfect view of industrial relations.

A. True
B. False
13. Who has studied the influence of individuals perception on his behaviour?
A. Dunlop
B. Craig
C. Mason Harie
D. Gandhi Ji
14. Which is not an approach to Industrial Relations?

A. Human Relations
B. System
C. Socio-ethical
D. Sociological
15. Which approach states that Strikes should be the last resort or option for resolving conflicts?

Notes
A. Human Relations
B. Gandhian
C. Socio-ethical
D. Sociological

1. B 2. C 3. A 4. D 5. A
6. D 7. A 8. C 9. A 10. B
11. A 12. B 13. C 14. B 15. B
Review Questions
1. What is Industrial Relation?
2. Discuss the Dunlop’s approach to Industrial Relations.
3. What are the objectives of Industrial Relations?
4. Explain the evolution of Industrial Relations in India.
5. What are the different approaches to Industrial Relations? Explain in detail.
6. Describe the IILS model of Industrial Relations.
Further Readings
 Clegg, H.A., The System of Industrial Relations in Great Britain.
 Dunlop, J.T., Industrial Relations Systems.
 Flanders, A., Industrial Relations: What is Wrong with the System.
 Kirkaldy, H.S., The Spirit of Industrial Relations.
 Margerison, C.J., What do we mean by industrial relations? A behavioral approach,
British Journal of Industrial Relations, Vol. 7, No. 2, 1969.
 Salamon, Michael, Industrial Relations Theory and Practice (3rd ed.), Prentice
Hall,1998

Notes
Dr. Shikha Goyal, Lovely Professional University Unit 02: Industrial Relations in India
Unit 02: Industrial Relations in India

CONTENTS
Objectives
Introduction
2.1 Stages of Development of Industrial Relation
2.2 Actors of Industrial Relations
2.3 Government and Industrial relations
2.4 Management and Industrial Relations
2.5 Role of three actors in Industrial Relation System
Summary
Keywords
Self Assessment
Review Questions
Further Readings
Objectives
 To understand the development stages of Industrial Relations in India.

 To learn about the role of Employee in Industrial Relations.
 To learn about the role of Employer in Industrial Relations.
 To learn about the role of Management in Industrial Relations.
Introduction
The problem of industrial or labor management did not arise when business organizations were
small. These developed only when elaborate organizational structures came into being during the
late 19th century, when gigantic industrial empires of financial tycoons came into existence, followed
by the technology of mass production in the early 20th century.
Labor management became an important subject of study only when large aggregations of people
came to work together under one roof in an organization. In order to understand the issues and
problems associated with industrial relations, it is desirable to study its various evolutionary phases.
2.1 Stages of Development of Industrial Relation

Let us discuss the various stages through which the industrial relations system progress can be seen.
These are as under:
1. Agrarian Economy Stage

2. Handicrafts Stage
3. Cottage or Putting-out Stage
4. Factory or Industrial Capitalism Stage

Notes
1. Agrarian Economy Stage

This stage developed during the Middle Ages and brought about the change in the views on
property. In tribal society, property was common and collective asset of the group but now it was
identified as a personal asset of the landlord.
What happened after this?

There arose a class of propertied individuals along with a class of property less workers. The
employees were treated as slaves. The employee- employer relationship was that of the master-
servant/slave type.
Are people getting wages for their work or service they are providing to the owner
during this stage?
No, because slaves were required to do all types of manual and other specialized work for their
master and in return were paid no wages but food of the coarsest type, old clothes and a small place
to live.
Features
 Slaves had to live under the absolute authority of their master till death overpowered him.
 The levels or strata of supervision were few.
 The government did not wield any power over the employment relationship.
 The political organizations that developed from alliances and conquests supported the
authority of the owners.
2. Handicrafts Stage
Think upon the reasons behind the development of handicraft system.
Handicraft system developed because of the growth of towns and cities, increase in trade and
commerce and a decline in the power of feudal Lords.
Features
 There exists an innovation in the careers of workers in which they move from the rank of
workers to those of employers.
 The workers own factors of production, worked with their own tools and with the help of the
members of their family in their own homes and perform the hand tasks.
 They sold their products directly to the customers common there being no middleman.
 Separate Craftsman existed for separate works.
 Specialization of work was found like shoemaking, carpentry, cloth weaving etc.
Think upon
Is there any regulating authority in this stage?
Yes, the cottage workers of the master Craftsman developed a new institution known as Crafts
Guilds. These regulate economic and employment conditions of the members, regulate the quality of
materials and workmanship set prices and determine wages.
Many of these guilds also provided various fraternal benefits like death, disability and
unemployment benefits to their members. They were akin to modern crafts union.
3. Cottage or putting - out stage

With the development of economic system and that of the steam and power some individuals became
employees in the new industrial units. This resulted in both technological changes and the expansion
of markets and trade. Master- Craftsman or travelling traders undertook to buy raw materials and
supply these as well as finances to the Craftsman or who worked in their workshops. They also hired
the Craftsman to process the raw materials and collected and sold the finished goods. This is known
as cottage or putting out stage.
Features

Notes
 The Craftsman worked with the members of their family in their own home and was paid on a
piece- work basis for the work.
 They delivered their products to the financiers who supplied them with necessary finance.
4. Factory or the industrial capitalism stage

With the passage of time and gaining of experience, the trader capitalist realized that economies in
production can be achieved from newly performed machines, so instead of “framing out” production
to numerous small cottage workers, he himself installed machinery, provided power tools and
equipment and offered employment in newly built workshops or factories. The cottage workers
became factory hands. In these factories, a large number of people worked under the same roof. This
made it possible to supervise them more closely.
The cottage workers became factory hands in this stage. A large number of people worked under the
same roof in this stage. This made it possible to supervise them more closely. The factory system
came to stand on a sound footing and human labor was replaced by machines. This gave rise to a
system which is known as industrial revolution. Under this system, women and child labor were
employed often for long hours because machine production simplified operations and reduced skill
requirements. With increased production, developed technology and science, decision-making
become a more specialized task and the relation between the workers and employers became more
and more impersonal.
Workers were brought together under one roof. Strict discipline was maintained during the process
of production by the employers. Workers were economically dependent on the employer for their
livelihood. The quality and quantity of the product was guaranteed. The employer owned all the
physical means of production. The employer also owned goods which were produced. The law of
supply and demand determines the price of labor and decide the level of wages in this stage. The
human element in the productive process disappeared as the employer had no personal ties with the
workers. The maximization of profit was the sole factor which dominated the factory system.
2.2 Actors of Industrial Relations

There are three major participants or actors of Industrial Relations:
1. Workers and their Organizations
2. The Management
3. The Government
The role of the workers and their trade unions is the supply of the skills necessary to produce goods
and services while the role of the employers is the provision of the raw materials including human
resources and finance for the production of goods and services. The role of the government and its
agencies is the provision of an enabling environment to produce goods and services. Each of these
actors performs its functions with the expectation of certain rewards for their services.
Let us discuss each participant one by one.
I. Employees and their Associations:

In an Industrial Relation system, employees may be grouped into 2 categories:
1. Those who have been defined as Workers/Workmen under The Industrial Disputes Act, 1947 and
2. Those that are not covered by this Act.
Does worker plays a crucial role in Industrial Relation?

Yes, in terms of:
1. Improve their conditions of employment.
2. Voice any grievances
3. Exchange views and ideas with management.
4. Share in decision-making.

Notes
What are employees characteristics that determine the extent of Employees role in
Industrial Relations?
There are few characteristics which reflect the extent of employee’s role in Industrial Relations. Some
are as under:
 Commitment to the Organization

 Level of education
 Social background
 Attitude towards Management and Organization
 Commitment to the Work
How do Workers play their role?

Workers form into their associations called “Trade Unions” to get their problems solved.
Role of Trade Unions in Industrial Relations

1. The trade unions work for workers economic interest through collective bargaining by bringing
the pressure on the management through economic and political strategies.
2. To secure improved terms and conditions of employment for their members, and the maximum
degree of security to enjoy these terms and conditions.
3. To increase the bargaining advantages of the individual workers vis-à-vis the individual employer
by joint or collective action for the individual action.
4. To obtain improved status for the worker in his work.
5. To increase the extent to which unions can exercise democratic control over decisions that affect
their interests by power sharing at the national, corporate, and plant levels?
6. To increase the extent to which unions can exercise democratic control over decisions that affect
their interests by power sharing at the national, corporate and plant levels?
Did you know?
Do trade unions have any role and responsibility towards Organization?

Answer is yes
 Trade unions have responsibility to see that the organization do not suffer on account of their
direct actions such as strikes, even for trivial reasons.
 They must be able to understand and appreciate the problems of managements and must adopt
a policy of ‘give and take’ while bargaining with the managements.
2.3 Government and Industrial relations

Does industrial relations processes get influenced by government?
Yes, Through the government’s construction, passing and implementation of relevant industrial
relations law, policies and regulations. The degree of government intervention is determined by the
stage of Economic Development.
Role of Government in Industrial Relations

1. The Government has enacted procedural as well as substantive laws to regulate industrial relations
in India.
2. The Government can directly or indirectly be involved in the industrial relations processes when
boundaries are overstepped, or negotiations go awry.

Notes
3. The government is involved in settling an industrial relations dispute in court or adjusting or

amending a policy which has proven itself flawed, outdated or newly irrelevant following the
outcome of a certain case or set of negotiations.
2.4 Management and Industrial Relations

Another party to Industrial Relations is Employer. In the corporate form of organization,
management represents owners/employers.
Ponder upon
How management tends to see employee or industrial relations?
In terms of following activities:

1. Creating and maintaining employee motivation.
2. Obtaining commitment from the workforce.
3. Establishing mutually beneficial channels of communication throughout the organization.
4. Achieving high level of efficiency.
5. Negotiating terms and conditions of employment with employees’ representatives.
6. Sharing decision making with employees.
7. Engaging in a power structure with trade unions.
8. Engaging in a power structure with trade unions.
What are the different factors which are important in context to management?
1. Attitude of management towards the employees and their unions.
2. The extent to which the management has designed the procedures for handling grievances, claims
and demands of the employees.
3. The extent to which the management wants to exercise absolute authority to enforce decisions
affecting the interests of the employees.
4. The extent of the effectiveness of management in dealing with the problems and disputes related
to IR.
5. Managements must delegate authority to their employees commensurate with responsibility.
6. There must be a well-planned communication system in the organization to pass on information
and to get feedback from the employees.
Is there any kind of associations in which management can become a part?

Yes, Employers’ Associations
What are the major functions of the employers’ associations in context of

Industrial Relations?
Answer: To
 Represent employers in collective bargaining at the National or Industry level.
 Develop machinery for the avoidance of disputes.
 Provide information on employee relations.
 Advise member organizations on the issues related to IR.

Notes
2.5 Role of three actors in Industrial Relation System

1. Management-
The management assumes any of the following roles in different contexts:
a. The Exploitative Authoritarian system –

This style of management was introduced in India by the colonial elite who set up modern industries
during the nineteenth century. To these colonial elite, labor was nothing more than a commodity.
Labor was exploited ruthlessly; wages paid barely provided subsistence with no job security and no
welfare amenities.
b. Benevolent Authoritarianism-
The aforesaid style of management gave place to what may be called benevolent authoritarianism.
The typical Indian business magnate finds this style of management congenial to his way of thinking.
This style has survived until today and it believes in labor welfare. But this style does not concede to
the labor’s privilege of having a say in their own affairs.
c. Consultative Style-
This is formally the prevailing management style in the public limited companies, in foreign concerns
operating in India and in the public-sector enterprises.
d. Participative Style-
Under this style labor is no longer a commodity or a child or an adult employee but is a friend and
ally and a partner in the joint endeavor to improve the inactive efficiency of the enterprise. This style
of management is not yet well developed in India.
2. Workers’ Unions
The workers' unions assume the following roles in different socio-economic systems.
a. Sectional Bargainers
This is the most widely accepted role of the trade unions. They represent the interests of the workers
and bargain with the management.
b. Class Bargainers
In some countries, e.g., France, where national bargaining takes place covering all industrial
occupations, trade unions and their federations play this role. In France, farmers have their own
nation-wide union, so do the civil servants. The national bargaining takes place from time to time, to
determine the share of each class in the GNP. In India, we have now only the beginning of this process
in respect of few industries, e.g., steel, jute, engineering, etc.
c. Ascent of the State

This is the role of the trade unions in socialist countries like the USSR. Here the trade union is
identified with the state apparatus and has well defined role in ensuring the fulfillment of target of
production at the enterprise level. This type of identification with the state machinery is not to be
found outside the socialist world. In democratic countries, at times, these unions represent the
philosophy of the ruling parties. In India, major unions have political affiliations.
d. Partners in Social Control

This type is exemplified in the system of co-determination in West Germany Under this system the
representatives of the workers sit on the Boards of management and participate in all kinds of
decision making. There is a beginning of this in India.
e. Enemy of the System

In all democratic countries, there are unions which subscribe to the Marxist theory of class war. Trade
unions are not merely a form of economic system but are designed to bring about a wholesale change
in the existing economic system. Unions would encourage excessive consumption, aspirations of

Notes
workers (i.e., higher and higher wages) to bring about a state of labor unrest, contributing to the
disintegration of the social order.
3. The Government
The third actor is the Government. The Government may assume any of the following roles.
a. Laissez-faire Philosophy
Under this system the Government follows a laissez-faire attitude to labor management alone to
settle a dispute. In a society where labor was economically weak and did not have a strong
organization of their own, meant that the Government was on the side of employers. During the 19th
century, governments almost everywhere followed this attitude but with the end of laissez-faire this
attitude has become outdated.
b. Paternalism
Owing to the revolutionary ideas of man like Ruskin, Owen and others in UK and agitation by social
reformers in UK and India, Government assumed a paternalistic attitude towards labor. A series of
protective laws were enacted regulating working conditions, payment of wages and gave them
certain benefits in case of industrial injuries.
c. Tripartism
Even before India attained independence tripartite form of consultation existed before making any
policy decision.
d. Voluntarism
Voluntary arbitration is officially encouraged but has not taken root in India. The Government
involved a series of codes to regulate labor management relations on a voluntary basis. As a result,
came the Code of Discipline, the Code of Conduct and the Code of Efficiency and Welfare.
e. Interventionism
Along with tripartism and voluntarism, Government intervened in labor disputes through the
process of conciliation and adjudication. Industrial strife leads to loss of production which the
Government can hardly afford to ignore and so it came forward with its legislative machinery to
prevent industrial disputes.
Summary
Traditionally, industrial relations were the concern of three principal actors: workers and their
unions, managers/employers, and the government. In the present scenario, there has been an advent
of new players and new dynamics in the industrial relations system. Over the years, a number of
changes have taken place in the industrial relations scenario. Not only have the players changed (the
inclusion of consumers and community), techniques, technology and power structures have been re-
examined and altered time and again. In a general way, conventional notions about industrial
relations as relations between management and unions will undergo substantial changes. The
changing nature of work, changing profiles of employees, and the ascendancy of managerial power
through technology and market-oriented policies of the State means that trade unions have to search
for a new form and structure for maintain voice and representation. The basic philosophy of
industrial relations may not change with changes in industrial strategies, but the underlying
strategies and tactics of the social partners will.
Keywords
Industrial Relations, Industrial Relation System, Actors in Industrial Relation, Stages in Industrial
Relations
Self Assessment
1. How many stages exist in development of Industrial Relations?

Notes
A. Three
B. Four
C. Five
D. Six
2. People getting wages for their work or service they are providing to the owner during
Agrarian stage of development of IR.
A. True
B. False
3. What can be a reason for the development of handicraft system of IR?

A. Of the growth of towns and cities
B. Increase in trade and commerce and
C. A decline in the power of feudal Lords
D. All of the above
4. Which stage of Industrial Relations development gave rise to a system which is known as
Industrial Revolution?
A. Agrarian Economy Stage
B. Handicrafts Stage
C. Cottage or Putting-out Stage
D. Factory or Industrial Capitalism Stage
5. The human element in the productive process disappeared as the employer had no personal
ties with the workers during industrial capitalism stage.
A. True
B. False
6. In which stage of development of Industrial Relations, workers work in their own homes
and work with the help of their family members?
A. Handicrafts Stage
B. Factory Stage
C. Cottage or Putting-out Stage
7. Who is not an actor of Industrial Relation?

A. The Management
B. The government
C. Workers
8. Workers can play an important role in maintaining good industrial relations in terms of
raising voice against any grievances.

Notes
A. True
B. False
9. Both commitments towards the work and towards the organization is a strong characteristic
of an employee which determines the role of employee in Industrial Relations.
A. True
B. False
10. Trade unions do not have any role and responsibility towards organization.
A. True
B. False
11. What can determine the role of government in Industrial Relations?

A. Enact procedural as well as substantive laws
B. Amending a policy
C. Settling industrial dispute in court
D. All of the above
12. Management cannot become a part of employers’ associations in context of Industrial

Relations.
A. True
B. False
13. Which is not a major function of the employers’ associations in context of Industrial
Relations?
A. Represent employers in collective bargaining
B. Develop machinery for the avoidance of disputes.
C. Advice member organizations on the issues related to IR.
14. Management should negotiate on terms and conditions of employment with employees’
representatives in context of maintaining good industrial relations.
A. True
B. False
15. Who is a regulating authority in handicrafts stage?

A. Craftsmen
B. Crafts Guilds
C. Craft person
D. All of the above

Notes

1. B 2. B 3. D 4. D 5. B
6. A 7. D 8. A 9. A 10. B
11. D 12. B 13. D 14. A 15. B
Review Questions
1. What are the different stages in Industrial relation system?
2. Describe the role of Government in Industrial relation System.
3. What is the role of and actor: Employee in Industrial Relation System?
4. Does employer also need to have a significant role in industrial relation system? Share your
views.
5. Discuss the features of Agrarian stage of Industrial Relations.
Further Readings
Hall,1998

Notes
Dr. Shikha Goyal, Lovely Professional University Unit 03: Trade Unions
Unit 03: Trade Unions

CONTENTS
Objectives
Introduction
3.1 Meaning of Trade Union
3.2 Theoretical Foundation of Trade Unions
3.3 Legal Framework of Trade Unions
3.4 Structure of Trade Unions
3.5 Trade Union as an Organization Structure
Summary
Keywords
Self Assessment
Review Questions
Further Readings
Objectives
 Understand the concept of trade union.

 Learn about the features of trade unions.
 Learn about the functions of trade unions.
 Understand the principles to regulate the functions of trade unions.
 Learn about the theoretical framework of Trade Unions.
 Learn about the legal framework of Trade Unions.
 Learn about the structure of trade unions
 Learn about the management or types of trade unions.
 Learn Trade union as an Organization Structure.
Introduction
Trade union is an outcome of the factory system. It is based on labor philosophy— ‘united we stand,
divided we fall.’ Industrial revolution in India has changed the traditional outlook in the labor
management relationship. With the introduction of the modern factory system, personal relationship
between employer and employee disappeared and gave rise to many social and economic evils which
made it imperative on the part of the workers to devise an effective means to contact employers and
to bargain with them. Formation of trade unions has provided an ideal solution.
3.1 Meaning of Trade Union

Trade union is a continuous association of wage earners for the purpose of maintaining and
improving the conditions of their working lives.
Definition of Trade Union

As per Trade Union Act,1926, “ A trade union is any combination, whether temporary or permanent,
formed primarily for the regulating the relations between workmen and employers, or between

Notes
workmen and workmen, between employers and employers, or for imposing restrictive conditions
on the conduct of any trade or business, and includes and federation of two or more trade unions.”
Features of Trade Unions

The features or characteristics of trade unions can be discussed as under:
1. The trade union is an association either of employers or employees or of independent workers.
Like:
a. Employers’ Association
b. General labour unions
c. Friendly Societies
2. Labor unions are relatively permanent association of workers and are not temporary or casual.
3. A trade union is an association of workers who are engaged in securing economic benefits for its
members.
4. Trade unions change their methods and their working to adjust themselves to changing
circumstances.
5. The origin and growth of trade unions have been influenced by a number of ideologies like Socio-
Economic and even political movements.
Functions of Trade Unions

To discuss the functions of trade unions, we need to divide it into two parts:
a. Militant or Protection Function

b. Fraternal, Ministrant or Positive Function
1. MILITANT FUNCTIONS
Aim at securing better conditions of work and employment for members through militant activities
such as strikes, gherao, etc. if there is a failure of collective bargaining.
2. FRATERNAL FUNCTIONS
Provide benefits to their members and support to them during strikes/lockouts or during periods of
temporary unemployment by giving them financial support out of the funds raised with their
contributions.
General functions in India

There are few general functions of trade unions which can be discussed as under:
1. To achieve higher wages and better working and living conditions for the members.
2. To acquire control over running of the industry by workers.
3. To generate self-confidence among the workers.
4. To encourage sincerity and discipline among workers.
5. To minimize the helplessness of the individual workers by making them stand-up unitedly and
increasing their resistance power through collective bargaining; protecting the members against the
victimization and injustice by employers.
6. To raise the status of the workers as partners in industry and citizens of society by demanding an
increasing share for them in the management of industrial enterprises.
7. To take up welfare measures for improving the morale of workers.
Principles to regulate trade union functions

The different five principles to regulate trade union functions which are as under:
1. The Doctrine of Vested Interest

2. The Doctrine of Supply and Demand
3. The Doctrine of Living Wage
4. The Doctrine of Partnership

Notes
1. The Doctrine of Vested Interest-

According to this, “wages and other conditions of employment hitherto enjoyed by any section of
workmen and ought to under no circumstances be interfered with for the worse.”
2. The Doctrine of Supply and Demand-

This doctrine relies on the method of collective bargaining and implies that because of collective
action on the part of laborers, trade unions are able to attain their objectives.
3. The Doctrine of Living Wage-

This doctrine empowers the workers to maintain their right to demand living wage.
4. The Doctrine of Partnership-

This doctrine implies that every worker has a right to work, rest and leisure, maintenance in old age,
sickness and disability and equal pay for equal work.
3.2 Theoretical Foundation of Trade Unions

The theoretical foundation of trade unions can be discussed with the help of 7 approaches. These
approaches are as under:
1. Social-Psychological Approach
2. Scarcity Consciousness Approach of Selig Perlman
3. Sociological approach of Frank Tannenbaum
4. Kerr and Associates’ General approach to Trade Unionism
5. Webbs Non-revolutionary or Industrial Democracy Approach
6. Classless Society Approach of Karl Marx
7. Gandhiji’s Approach
1. Social-Psychological Approach-
This approach has been given by Robert F. Hoxie. According to him, “trade unions grew out of the
socio-psychological environment of the workers and not purely because of economic reasons.”
According to him, Unionism affects not only production, but also:
1. Established Rights
2. Ethical Standards
3. Distribution
4. Law and Order in the matter of legal theory
5. Exercise general pawer over social welfare
As per his observation
 Workers, who are economically and socially associated and not too divergent in temperament
and training, will tend to develop a common interpretation of the social situation and a common
solution of the problem of living.
 This may come about gradually and spontaneously, or it may be an apparently sudden outcome
of some crisis in the lives of men concerned.
What is the interpretation of the Observation?

Unionism is not so much an outward organization as a like-minded group. It is the result of group
psychology which grows out of its environmental conditions and the temperamental characteristics
of its members. The differences in Group psychology cause different types of unions to appear.
Classification of trade unionism: Robert Hoxie

As per Robert Hoxie, trade unions can be classified as under:

Notes
1. Business unionism
2. Friendly or Uplift Unionism
3. Revolutionary unionism
4. Predatory unionism
1. Business Unionism:
This union is also known as Bread-and-Butter unionism. It lays stress on:
1. Immediate goals
2. Improvement in wages, hours and working conditions
 It is giving little attention on :Political and Social Action
2. Friendly or Uplift Unionism:
 It is idealistic in nature.
 It aspires chiefly to elevate the moral, intellectual and social life of the workers.
 It advocates idealistic plans for social regeneration and law-abiding.
 These unions prefer to rely on the weapons of political action, mutual insurance programmes,
and profit-sharing.
3. Revolutionary Unionism:
 This unionism is: Class-conscious rather than trade-conscious”.

 It rejects private ownership of productive resources and the wage system.
 Its weapons are either political action or direct action in the form of violence and general strikes.
4. Predatory Unionism:
 This union does not subscribe to any ideology.

 It can adopt any method like business, friendly or revolutionary which will deliver the goods.
2. Sociological approach –
It has been Given by Frank Tannenbaum. His theory of trade unionism came into light in his
philosophy of labor in 1921.
As per his observation
1. Workers are engaging in an unconscious rebellion against the automisation of industrial society.
2. Machine degraded the worker and made him insecure and so the trade union movement aims
at control over the machine so as to overcome insecurity.
3. Trade union is not merely an economic organization, it is also a social and ethical system, and
its ends are moral and not economic.
According to Frank Tannenbaum, the original organizer of the trade union movement is the shop,
the factory, the mine and the industry the agitator or the labor leader merely announces the already
existing fact.
What is Frank Tannenbaum viewpoint?

“Unions do not use their power to create a socialistic or a communistic state”
Because unions could not afford to create a socialistic or a communistic state because every activity
of the management affects the well-being of the workers.
Think upon
What is the main reason for the success of the trade unions as per this theory?
Answer: Tannenbaum’s theory believes:

Notes
 Trade unionism gives back to the worker his society where he can live with security, justice
freedom and faith.
 This stresses the fact that union gives the worker a value system and fellowship that he can
share with others who are like him.
3. Scarcity Consciousness Approach:

This approach to trade union has been given by Selig Perlman.
According to his observation,

Three factors are basic in any labor situation:
1. Resistance power of capitalism

2. Degree of Dominance over the labor movement by the intellectuals’ mentality which regularly
underestimates it
3. Degree of Maturity of a trade union “mentality”.
Did you know?

Why unionism developed according to this theory?
Reason: Because of workers’ scarcity consciousness, which arose in the minds of the workers due to
the fact that their economic position could not improve beyond that which was barely sufficient to
cover the minimum essentials of an ordinary standard of living.
Perlman rejected the idea of class consciousness as an explanation for the origin of the trade union
movement but substituted it with what he called job consciousness.
4. Kerr and Associates’ General Approach to Trade Unionism:

According to them,
1. “Worker protest is inherent in industrialization”
2. Organized form of protest is in the nature of labor organization.
Just think
On what factors role of labor organizations depend?
Answer: Industrialization process, Industrializing elite and specific culture and nature of a country.
Different types of leadership of industrialization process

There are five ideal types of leadership of industrialization process. These are as under:
1. Dynastic Elite Leadership
2. Middle Class Elite
3. Revolutionary Intellectual Elite
4. Colonial Administrator Elite
5. Nationalist Elite
a. Dynastic Elite Leadership:

Under the dynastic elite leadership, the unions undertake social functions at the plant level and
indulge in political activity challenging the employers. Leadership is provided by the intellectuals
with a political bent of mind. Unions are ideologically class conscious and revolutionary
b. Middle class elite:

Under the middle-class elite, the union undertakes the regulation of management at the local and
industry level as well as that independent political activity which does not challenge the employers.
Unions are led by the workers and ideologically reformist.
c. Revolutionary intellectual elite:

Notes
The unions’ main function is to act as an instrument of the party to educate and lead workers and to
stimulate production and the political activity. Ideologically unions are the followers of the ruling
elite.
d. Colonial administrator elite:

Under this unions function as a part of the independence and nationalist movement. Ideologically
such unions are anti colonial and fight for independence
e. Nationalist elite:
Under this, unions work for the conflicting objectives of economic development and protection of
workers. Ideologically the unions are nationalist.
5. Webbs Non-revolutionary Approach:

This approach given by Sydney and Beatrice Webb.
Thought process related to trade unions:

Trade unions as “institutions for overcoming managerial dictatorship, to strengthen individual
laborers and to give them some voice in the determination of the conditions under which they have
to work.”
According to his observation,
 Trade unionism is not an instrument for the revolutionary overthrow of the capitalist order but
on the contrary is a means of equalising the bargaining power of labour and capital.
 Thus, encouraging the adoption of common rules which are practical and humane.
In simple terms,
 According to Webb, trade unionism is an extension of democracy from political sphere to

industrial sphere.
 Webb agreed with Marx that trade unionism is a class struggle and modern capitalist state is a
transitional phase which will lead to democratic socialism.
 He considered collective bargaining as the process which strengthens labor.
6. Classless Society Approach by Karl Marx

In Marx’s view trade unions represent a prime instrument of class struggle between proletarian
workers and capitalist businessman. According to him, the origin of trade unionism lies in the growth
of industrial capitalism.
His belief
 Trade unions did not properly represent the workers.

 The unions have unnecessary and useful tasks to perform in protecting wages and working
conditions but should not limit themselves to these narrow economic goals.
 The intellectuals must lead the struggle of the working class not only for better terms for the
sale of labour power, but also for the abolition of the social system which compels the property
less class to sell itself to the rich.
7. Gandhi ji’s Approach:

This philosophy is based upon the “sarvodaya “principles of truth nonviolence and trusteeship in
which class harmony prevails. Mahatma Gandhi considers trade union as essentially reformist
organizations and economic institutions which must be organized on the basis of the assumption that
capital and labor are not antagonistic but are supplementary to each other.
3.3 Legal Framework of Trade Unions

There is much legislation which governs the functioning of trade unions in India. Trade Unions play
a very crucial role in maintaining Industrial Relations. These unions are also backed by prominent
legislations.

Notes
There are 3 major laws that govern the functioning of trade unions in India.
1. Constitution of India
2. The Trade Unions Act, 1926
3. The Industrial Disputes Act, 1947
1. The Constitution of India-

The essence of unionism and bargaining is laid down in Article 19(1) of the Constitution of India
which provides to all its citizens the fundamental right of freedom of speech.Clause (c) of Article
19(1) includes the right to form associations or unions.
2. The Trade Unions Act, 1926-

The Trade Unions Act, 1926 (the “TU Act”) regulates the constitution and governance of trade unions.
Section 2(h):
The term trade unions under to mean any combination which is formed for the purpose of regulating
the relations between
1. workmen and employers

2. workmen and workmen
3. employers and employers or
4. For imposing restrictive conditions on the conduct of any business or trade.
3. The Industrial Disputes Act,1947-

The Industrial Disputes Act, 1947 (the “ID Act”) essentially provides mechanisms for settlement of
disputes of workmen and employers and other such related activities. Though the ID Act does not
specifically provide the rights, trade unions play a significant role in resolving industrial disputes;
hence they are inherently vested with inherent rights in these matters.
3.4 Structure of Trade Unions

In India, the structure of trade union consists of three levels: plant/shop or local, the state and the
centre. It is from the central level that the ideology of the important central federations of labor in
India percolates down to the state and local levels. Every national or central federation of labor in
India has state branches, state committees or state councils, from where its organization works down
to the local level.
How ideology of federations of labor in India percolates at various levels?

It is generally from the central level that the ideology of the important central federations of labour
in India percolates down to the state and local levels.
Affiliation of trade unions in India

There are two types of organizations to which the trade unions in India are affiliated: i. National
Federations, and ii. The Federations of Unions
Here a brief discussion of this trade union form is given:
1. National Federations:
The National Federations have all the trade unions in a given industry as their affiliated members.
Every trade union, irrespective of the industry to which it belongs, can join a general national
federation. Such federations are the apex of trade union policies a national character. The central
union organizations are national federations of labor based on different political ideologies. Because
of their political leanings, the affiliated trade unions in the field of labor relations follow either a
militant policy or a policy of cooperation with the employers and the government, or a policy of
continuous strife and litigation. The trade union leadership to these national organizations is
generally provided by the politicians. Such leaders are found leading a dozen or more unions in a
particular state. The national/central federations are empowered to decide the question of
jurisdiction of the various local and national unions.

Notes
A majority of these federations allow their affiliates to bargain independently with their respective
employers. The federations only act as coordinating authorities for different unions under their
control. They also select delegates to represent workmen in international conferences organized by
the International Labor Organization or the International Confederation of Free Trade Unions. The
all-India federation of trade unions has a regular structure.
Think upon
Who provide the leadership to these national organizations?
Answer: The trade union leadership to these national organizations is generally provided by the
politicians.
2. Federations of Unions:
These are combinations of various unions for the purpose of gaining strength and solidarity. They
can resort to concerted action, when the need for such action arises, without losing their individuality.
Such federations may be local, regional, state, national and international. There are a few
organizations which are local in character, such as the Bharatiya Kamgar Sena, the Labor Progressive
Federation, Chennai, the National Front of Indian Trade Unions and the coordinating Committee of
Free Trade Unions
Types of Trade Unions

Classification of Trade Unions is under 2 heads:
1. The purpose for which unions are formed.

2. The variation in the composition of their membership.
1. Unions classification on the basis of Purpose
I. Reformist Unions:
These unions are those which aim at the preservation of the capitalist society, the maintenance of the
usual employer-employee relationship and elimination of competitive system of production.
Features-
 They neither seek comprehensive change nor wish to destroy the existing social, economic or
political structure of the State.
 They desire only to modify these in accordance with what their members consider to be current
modes in the society.

Notes
a. Business unionism:
It is that form of Labor Corporation in which employees enter the successful business relationships
with employers. Business unions are those that are maintained primarily to represent workers in
collective bargaining with their employers. They have generally been craft conscious rather than class
conscious. They are distinctively reformist who tries to bring economic advantages to their members
including increased wages and improved working conditions.
These unions use peaceful means to attain these ends and depend primarily upon collective
bargaining for the purpose. These unions favor voluntary arbitration deprecate strikes and avoid
political action but when they serve their interests they use the weapon of strike and resort to political
action also.
b. Friendly or uplift unionism:

This is idealistic in nature and aspires to elevate the moral intellectual and social life of workers. It is
not craft conscious but interest conscious of the workers. It is conservative and law abiding
unemployed the method of collective bargaining but emphasizes the need of mutual insurance and
“drifts easily into political action, advocacy of cooperative enterprises profit sharing and other
idealistic plans.”
I. Revolutionary Unions
These unions aim at destroying the present structure completely and replacing it with new and
different institutions according to the ideals that are regarded as preferable.
Features
 These unions generally seeks to destroy capitalist industry, to Abolish the vet system and
private property, to put an end to a society based primarily upon competition and individual
rights and to substitute some other system, generally socialist and communist.
 It is extremely class conscious rather than trade conscious.
a) Anarchist Unions:
Those unions which try to destroy the existing economic system by revolutionary means are known
as anarchist unions.
b) Political unions:
Those unions which gain power through political action, the enactment of laws, eliminating the
power of capital and capitalists, redistributing wealth and giving effective power to workers.
c) Predatory and Guerrilla Unions:

Predatory: Does not subscribe to any ideology.
Guerrilla: Does not believe in cooperation with employers.
d) Dependent Union:
This type of union is dependent wholly or partly on the other unions or the employees.
1. On the basis of membership structure

There are 4 types of unions on the basis of membership structure:
a. craft union
b. staff union
c. industrial union
d. general union
a. Craft Union- It is an organization of workers employed in a particular craft or trade or in

a single or 2 or 3 related trades /crafts /occupations. The craft unions are mostly found
amongst non-manual employees and professional workers.

Notes
Example: The Ahmedabad weavers union, The Kanpur Suti mill mazdoor Sabha
and Indian pilots Guild.
Features
 their members are generally graft conscious rather than class conscious
 they derive their strength from the strategic position of their workers
 Such unions are horizontal in character for the enrol workers engaged in one or a single
group of processes.
b. Staff Union- It is an organization or rather a form of organization based on the sense of

common status in common need for help. It implies commonality of outlook and
presupposes some solidarity between workers of different trades.
c. Industrial union- It is in organization of workers which links all Craftsman and skilled
workers in anyone industry regardless of the differences in craft, skill, grade, position or
gender. The common bond is the industry in which the workers are employed .it is
organized upon an industry wise rather than a graph twice basis .The membership is large
;and it makes workers class conscious and increases the feeling of solidarity among them
.These organizations are vertical in character because they enroll all types of workers who
are engaged in preparing raw materials for consumption.
d. General union- It is that organization which covers various industries and laborer’s
having different types of skills the objective of these unions are all-embracing in character.
These unions have numerical superiority, because they are open to all classes of workers;
and this is the source of their strength.
3.5 Trade Union as an Organization Structure

Different levels of organizational structure of trade unions are:
1. Conventions/sessions
2. General council (President, VP, Secretary-General, etc.)
3. Provincial bodies (at state level chairman, secretariats)
4. Local bodies (affiliated unions)
1. National Conventions/Sessions:
 National convention/conferences are hold at periodic intervals, say annually or bi-annually.

 This is the highest policy-making body.
 This is presided over by the president of the union attended by the delegates such as chairmen
of state units, representatives of specialized services, legal experts and delegates from
international bodies and special invitees.
 Office bearers are also elected by this conference.
2. General Council:
 General council consists of president, vice-president, secretary and other office bearers.
 It carries out policy decisions taken by convention.
 Various standing committees are set up on rendering study, analysis and recommendations on
various aspects like legislative measure, Research and publications, international services etc.
3. Provincial Bodies:
 State units are headed by chairman of state/regional areas.

 State units also liaise with National Headquarters; keep a close watch of faithful implementation
of labor legislation and practices.

Notes
 It assists/influence state government to pass labor friendly legislation and

executive/administration actions
 It is also responsible for membership of various unions representing workers in industrial
undertakings (units) and/or representing trade and industrial units affiliated to the central
trade union.
 These state units get themselves attached to State/Provincial/HQ/Regional unions/Units.
4. Local Bodies:
Headquarters (HQ) unions are responsible for welfare of its members and membership drive.As
bargaining agents, they are involved in collective bargaining with Central Government/ and or State
government and assist passing legislative measures.
Summary
 Trade union is a continuous association of wage earners for the purpose of maintaining and
improving the conditions of their working lives.
 Functions of trade union can be divided into Militant or Protection Function and Fraternal,
Ministrant or Positive Function
 There are five principles to regulate trade union functions.
 The theoretical foundation of trade unions has been discussed with the help of seven
approaches.
Keywords
Trade union, Conventions, Federations of Unions, Revolutionary Unions and Reformist Unions.
Self Assessment
1. Which can be included as function of trade union?
A. Militant function
B. Fraternal function
C. Protection function
D. All of the above
2. What is a principle to regulate trade union functions?

A. The Doctrine of Living Wage
B. The Doctrine of Vested Interest
C. The Doctrine of Partnership
D. All of the above
3. Protection function of trade union aim at securing better conditions of work and
employment for members through militant activities such as strikes, gherao, etc. if there is
a failure of collective bargaining.
A. True
B. False
4. Which unionism also known as bread-and-butter unionism?

Notes
A. Business Unionism
B. Friendly Unionism
C. Revolutionary Unionism
D. Predatory Unionism
5. Which approach of trade union has been given by Frank Tannenbaum?

A. Gandhiji’s approach
B. Sociological approach
C. Socio-Psychological approach
D. Scarcity Consciousness approach
6. Webb’s non-revolutionary approach has been given by Selig Perlman.

A. True
B. False
7. There are 3 major laws that govern the functioning of trade unions in India.
A. True
B. False
8. Which law regulates the constitution and governance of trade unions?

A. The Constitution of India
B. The Trade Unions Act, 1926
C. The Industrial Disputes Act, 1947
9. Which law provides mechanisms for settlement of disputes of workmen and employers?
A. The Constitution of India
B. The Trade Unions Act,1926
C. The Industrial Disputes Act, 1947
10. How many levels exist in the structure of trade unions?

A. Three
B. Four
C. Five
D. Two
11. National federations do not allow their affiliates to bargain independently with their
respective employers.
A. True
B. False

Notes
12. Which is not a sub type of trade union under revolutionary union?
A. Political
B. Predatory
C. Friendly
D. Guerilla
13. Which is the highest policy making body under the organizational structure of trade
unions?
A. General council
B. Conventions/sessions
C. Provincial bodies
D. Local bodies
14. Which level under the organization structure of trade union carries out policy decisions
taken by convention?
A. General council
D. Local bodies
15. Which level under the organization structure of trade union are responsible for welfare of
its members and membership drive?
A. General council
D. Local bodies

1. D 2. D 3. A 4. A 5. B
6. B 7. A 8. B 9. C 10. A
11. B 12. C 13. B 14. A 15. D
Review Questions
1. What do you mean by Trade Union? What are the functions of trade union in India?
2. Discuss the theoretical foundation of trade unions.
3. Explain the different levels of organization structure of Trade union.
4. What are the different types of trade unions?
5. Discuss the Social-Psychological Approach of trade union.

Notes
Further Readings
Hall,1998

Notes
Dr. Shikha Goyal, Lovely Professional University Unit 04: The Trade Union Movement
Unit 04: The Trade Union Movement

CONTENTS
Objectives
Introduction
4.1 Beginning of Labor Movement
4.2 Six Periods of Trade Union Movement in India
4.3 Consultation and Cooperation Bodies
4.4 Measures to Strengthen Trade Union
Summary
Keywords
Self Assessment
Review Questions
Further Readings
Objectives
 Learn about the development of Trade Union Movement in India

 Learn about trade union cooperation and consultative machinery.
 Learn about the measures to strengthen trade union movement in India
Introduction
The history of trade unions goes back to the 19th century. A survey of the development of trade
unions in India shows that most of the unions are affiliated with either of the four central trade union
federations, viz., the Indian National Trade Union Congress, All India Trade Union Congress, Hind
Mazdoor Sabha and United Trade Union Congress. Besides these, some trade unions are affiliated
with seven other trade union federations, viz., Bhartiya Mazdoor Sangh, Hind Mazdoor Panchayat,
Centre of Indian Trade Union, National Federation of Independent Trade Unions, National Labor
Organization, Trade Union Coordination Committee and United Trade Union Congress (Lenin
Sarani). These trade union organizations have been patronized by different political parties in the
country. Further, a survey of trade unions in India reveals that over the years, the trade union
movement has undergone significant development. Both workers and non-workers have been
involved. The beginnings of the movement were the outcome of the efforts made by certain social
reformers and labor leaders.
4.1 Beginning of Labor Movement

The beginning of the Labor movement in the modest sense started after the outbreak of World War I
in the country. Economic, Political and Social conditions influenced the growth of trade unions
movement in India.
The early year’s of movement were generally led by philanthropists and social reformers, who
organized workers and protected them against inhuman working conditions. The early years of the
labor movement were often full of difficulties. Strike committees arose calling themselves trade
unions and demanded the privileges of trade unions without any means of discharging the
responsibilities thereof. The position of trade unions has considerably improved since then. The
number of trade unions has gone up and its membership and funds have increased.

Notes
The step-by-step movement of Labor Union in India can be seen from the below listed levels.
 The First Strike

 The First Factories Act
 The First Worker’s Organization in India
 Madras Labor Union
 Textile Labor Association
 Formation of AITUC
 Formation of NTUF
1. The First Strike:

The origin of the movement can be traced to sporadic labor unrest dating back to 1877 when the
workers at the Empress Mills at Nagpur struck following a wage cut. In 1884, 5000 Bombay textile
workers submitted a petition demanding
I. regular payment of wages

II. A weekly holiday
III. amid the recess of 30 minutes
Approximately 25 strikes happened between 1882 and 1890.All these strikes were poorly organized
and short-lived lead it towards failure. The oppression of employers was so severe that workers
preferred to quit their jobs rather than go on strike.
In the last, Condition of workers was improved but to promote the interests of British Industry rather
than Indian factory-made goods.
2. The First Factories Act:

In 1875, the first Committee appointed to inquire into the conditions of factory work favored legal
restriction in the form of factory laws. The first Factories Act was adopted in 1881.The Factory
Commission was appointed in 1885.There was another Factories Act in 1891, and a Royal
Commission was appointed in 1892.Restrictions on hours of work and on the employment of women
were the chief gains of these investigations and legislation.
3. The First Workers’ Organization in India:

Narayan Lokhande, father of India’s modern trade union movement, formed Bombay Mill hands’
Association in 1890.It was the First Workers’ Organization in India. Organizations, which may more
properly be called Trade Unions, came into existence at the turn of the century. The first systematic
attempt to form a trade union on permanent basis was done in 1906 in the Postal Offices at Bombay
and Calcutta.
4. Madras Labor Union:

It was found in 1918.It was primarily an Association of textile workers in the European owned
Buckingham and Carnatic mills, It also included workers in many other trades.
Major grievances handled by Union-

1. Harsh treatment meted out to Indian labour by the British supervisors.
2. Unduly short mid-day recess.
What steps taken to handle grievances?
 The union managed to obtain in extension of the recess from 30 to 40 minutes.

 It also opened a cheap green shop and library for its members and started some welfare
activities.
 There was no legislation at this time to protect the trade unions.
 N.M Joshi introduced a bill for the rights of trade union and then the TradeUnionsAct of 1926
was enacted.

Notes
 Many strong unions were organised specially in Port Trust, Dockstaff,Bank employees ,
Customs, Income tax,Ministerial staff, etc.
1. Textile Labor Association:

Anusuyaben Sarabhai had begun doing social work among male workers in Ahmedabad, an activity
which was eventually to lead to the founding of famous Mazdoor Mahajan Textile Labour
Association in 1920. Mahatma Gandhi declared that the textile labor association was his laboratory
for experimenting with his ideas on industrial relations and a model labor union.
2. Formation of AITUC:
The year 1920 witnessed the formation of All India Trade Union Congress. AITUC owes virtually to
the activities of the International Labor Organization (ILO).
Reason of existence of AITUC

The AITUC Came into existence with the principal reason to decide the labor representative for ILOs
first annual conference. The AITUC claimed 64 affiliated unions with a membership of 1,40,854 In
1920.Lala Lajpat Rai, the President of the Indian National Congress, became the first President of
AITUC.
3. Formation of NTUF:
NTUF stands for National Trade Union Federation. The moderates, who were deeply opposed to the
affiliation of the AITUC with the League against Imperialism and the Pan-Pacific Secretariat, walked
out of the federation. And eventually formed the National Trade Union Federation.
What happened to AITUC due to split?

The splintering away of the NTUF had cost the AITUC 30 affiliated unions with close on a hundred
thousand members.
Why NTUF merged with AITUC again?

By 1940, NTUF had dissolved itself completely and merged with AITUC because it was agreed that
the AITUC would not affiliate itself with any international organization.
4.2 Six Periods of Trade Union Movement in India

The development during the span of about 145 years may be considered broadly under the following
six periods: (i) pre-1918, (ii) 1918–24, (iii) 1925–34, (iv) 1935–38, (v) 1939–46 and (vi) 1947 and
thereafter.
1. The Pre-1918 Period:

The earliest sign of labor agitation in India was a movement in Bengal in 1860 led by Dinbandhu
Mitra, a dramatist and social reformer of Bengal, followed by some journalists to protest against the
hardships of the cultivators and also the plantation workers. The government thereupon appointed
an Indigo Commission. The report of the Commission reflects upon the grossest cruelties perpetrated
by foreign planters with the aid and under the protection of laws framed by the British Government
especially for this purpose. Thereafter, the system of indigo cultivation was abolished due to the
discovery of the synthetic process.
In 1875 in Bombay Sarobji Shapuri made a protest against the poor working conditions of workers at
that time. The deplorable conditions of workers were brought to the notice of the Secretary of State
for India. The first Factory Commission was, therefore, appointed in 1875 and as a result the Factories
Act, 1881 was enacted. This Act was, however, inadequate to meet the evil of child labor. Moreover,
no provision was made to regulate the working conditions of women workers. This gave rise to great
disappointment among workers. Thereupon another Factory Commission was appointed in 1884. In
the same year, N.M. Lokhande organized a conference of the Bombay factory workers and drew up
a memorandum signed by 5,300 workers demanding a complete day of rest on Sunday, half-an-hour
recess, working hours between 6.30 a.m. to sunset, the payment of wages not later than 15th of the
month, and compensation for injuries. In 1889, in Bombay, workers of spinning and weaving mills
demanded Sunday as a holiday, regularity in the payment of wages and adequate compensation in
case of accident.

Notes
In spite of these agitations no material change could be brought about and, therefore, another
representation was made to the government in 1890. The stand of 1884 was also reiterated and this
time the petition was signed by 17,000 workers. The same year, the Bombay Mill Hands Association,
the first labor association was organized with Mr Lokhande as its President. It started a labor journal
(Dinbandhu) in order to propagate effective views of their own. In the very same year, the Bombay
Mill Hands Association placed its demand before the Factory Labor Commission (1890), with
Bangalee, the great philanthropist as a member. The Commission gave due consideration to the
demands of labor.
Several labor associations were formed after 1890. For instance, the Amalgamated Society of Railway
Servants in India and Burma was formed in April 1897 and registered under the Indian Companies
Act, the Printers Union, Calcutta, was formed in 1905, the Bombay Postal Union was formed in 1907
and the Kamgar Hityardhak Sabha and Service League was formed in 1910.
The post-1890 period was also important for the reason that several strikes occurred during this
period. Instances may be quoted of two strikes which occurred in Bombay in 1894. The first big strike
of mill operatives of Ahmedabad took place in the first week of February 1895. The Ahmedabad Mill
Owners Association decided to substitute a fortnightly wage system for a weekly one which was in
force ever since 1896. This forced over 8,000 weavers to leave work. However, the strike was
unsuccessful.
There were also strikes in the jute industries in Calcutta in 1896. In 1897, after the plague epidemic,
the mill workers in Bombay went on strike for payment of daily wages instead of monthly payment
of wages.
In 1903, the employees of the press and machine section of the Madras Government went on strike
for overtime work without payment. The strike went on for six months and after great hardship and
starvation, the workers returned to work. Two years later in 1905, the workers of the Government of
India Press, Calcutta, launched a strike over the question of (i) non-payment for Sunday and gazette
holidays; (ii) imposition of irregular fines; (iii) low rate of overtime pay; and (iv) the refusal of the
authorities to grant leave on medical grounds. The strike continued for over a month. The workers
returned on the fulfillment of certain demands. In December 1907, the workers of the Eastern Railway
Workshop at Samastipur went on strike on the issue of increment of wages. They went back to work
after six days when they were granted extra allowance owing to famine conditions prevailing at that
time in that region. In the same year, the Bombay Postal Union and Indian Telegraph Association
called a strike. In 1908, workers of the textile operatives in Bombay struck work in sympathy with
Bal Gangadhar Tilak who was imprisoned for sedition. The workers in Bombay went on strike in
1910 demanding reduction in working hours. As a result of this agitation, the Government of India
set up a Commission to enquire into the desirability of reducing the working hours. On the basis of
the recommendation, the working hours were reduced to 12 hours a day. Similar strikes continued
from year to year particularly in Bengal and Bombay, demanding an increase in wages.
2. The 1918–1924 Period:

The period 1918–1924 can perhaps be best described as the era of the formation of modern trade
unionism. This period witnessed the formation of a large number of trade unions. Important among
these were the Madras Labor Union, Ahmedabad Textile Labor Association, Indian Seamen’s Union,
Calcutta Clerks’s Union and the All India Postal and RMS Association. One of the significant features
of this period was that the All India Trade Union Congress was started in 1920.
The growth of trade unions was accompanied by a large number of strikes. The deteriorating
economic conditions of workers resulted in strikes. The wages of workers were increased but it could
not keep pace with the soaring prices of commodities. Further, there was a shortage of labor in some
of the industries due to the epidemic of influenza.
3. The 1925–1934 Period:

This period witnessed a split in the AITUC into leftist and rightist factions. Later in 1929, a wing of
the AITUC, the All-India Trade Union Federation was formed. The main cause for the Communist
influence was the economic hardship of the workers.
The period 1925–1934 saw a remarkable decrease in the intensity of industrial conflict. At least two
factors were responsible for it. First, the Trade Disputes Act was passed in 1929 prohibiting strikes
and lockouts. Second, the failure of strikes and lockouts resulted in industrial strife.
Another significant feature of this period was the passing of the Trade Unions Act, 1926 and the
Trade Disputes Act, 1929. The former Act provides for the registration of trade unions and affords

Notes
legal protection to intervene in trade disputes. The latter Act provided for an ad hoc Conciliation
Board and Court of Enquiry for the settlement of trade disputes. The Act, as already observed,
prohibited strikes and lockouts in public utility services and general strikes affecting community as
a whole.
4. The 1935–1938 Period:

During this period, unity was forced in trade unions. This led to the revival of trade union activity.
In 1935, the All-India Red Trade Union Congress merged itself with AITUC. Again, in 1938 an
agreement was arrived at between the All-India National Trade Union Federation and AITUC and
consequently NTUC affiliated itself with AITUC.
Several factors led to this revival of trade unionism. First, the change in the political set-up in the
country was responsible for the change. It is significant that the Congress Party which formed its
government in 1937 in several provinces tried to strengthen the trade union movement and to
improve the conditions of labor. Second, the working class also awakened to its rights and wanted
to have better terms and conditions of service. Third, management also changed its attitude towards
trade unions.
In 1938 came the most important state enactment, viz., the Bombay Industrial Disputes Act. The
significant features of this Act were: (a) compulsory recognition of unions by the employer, (b) giving
the right to workers to get their case represented either through a representative union or where no
representative union in the industry/ centre/unit existed through elected representatives of workers
or through the Government Labor Officer, (c) certification of Standing Orders which would define
with sufficient precision the conditions of employment and make them known to workmen, (d) the
setting up an Industrial Court, with original as well us appellate jurisdiction to which parties could
go for arbitration in case their attempts to settle matters between themselves or through conciliation
did not bear fruit, and (e) prohibition of strikes and lockouts under certain conditions. The scope of
the Act was limited to certain industries in the province.
5. The 1939–1946 Period:

World War II, like World War I, brought chaos in industrial relations. Several reasons may be
accounted for the industrial unrest and increased trade union activity. First, the rise in prices far more
than the increase in wages. Second, there was a split in the AITUC due to the nationalist movement.
Third, the post-World War II era witnessed retrenchment and, therefore, the problem of
unemployment. During this period, the membership of registered trade unions increased from 667
in 1939–40 to 1087 in 1945– 46. Further, the number of women workers in the registered trade unions
increased from 18,612 in 1939–40 to 38,570 in 1945–46. Moreover, the period witnessed a large number
of strikes.
During the emergency, the Defence of India Rules, 1942 remained in force. Rule 81 A of the Rules
empowered the government, (i) to require employers to observe such terms and conditions of
employment in their establishments as may be specified; (ii) to refer any dispute to conciliation or
adjudication; (iii) to enforce the decisions of the adjudicators; and (iv) to make general or special
order to prohibit strikes or lockouts in connection with any trade dispute unless reasonable notice
had been given. These provisions thus permitted the government to use coercive processes for the
settlement of trade disputes and to place further restrictions on the right to use instruments of
economic coercion.
In 1946, another enactment of great significance in labor relations, namely, the Industrial
Employment (Standing Orders) Act, 1946 was passed with a view to bring uniformity in the condition
of employment of workmen in industrial establishment and thereby to minimize industrial conflict.
The Act makes it compulsory for employers engaging 100 or more workmen ‘to define with sufficient
precision the conditions of employment’ and to make those conditions known to the workmen.
Another important enactment at the state level was the Bombay Industrial Relations Act, 1946. The
Act makes elaborate provisions for the recognition of trade unions and rights thereof.
6. Post 1947:
With the advent of Independence, the trade union movement in India got diversified on political
considerations. The labor leaders associated with the Congress Party formed the Indian National
Trade Union Congress (INTUC) in 1947. The aim of the INTUC is ‘to establish an order of society
which is free from hindrances in the way of an all-round development of its individual members,
which fosters the growth of human personality in all its aspects and goes to the utmost limit in

Notes
progressively eliminating social, political or economic activity and organization of society and the
anti-social concentration of power in any form.’
In 1948, the Socialist Party formed an organization, the Hind Mazdoor Sabha. The aims and objectives
of the Sabha were to:
(i) promote the economic, political, social and cultural interest of the Indian working class,
(ii) (ii) guide and coordinate the activities of affiliated organizations and assist them in their
work.
(iii) watch, safeguard and promote the interests, rights and privileges of workers in all
matters relating to their employment;
(iv) promote the formation of federation of unions from the same industry or occupation.
(v) secure and maintain for the workers freedom of association, freedom of speech,
freedom of assembly, freedom of press, right of work or maintenance; right of social
security and right to strike.
(vi) organize and promote the establishment of a democratic socialist society in India.
(vii) promote the formation of cooperative societies and to foster workers’ education.
(viii) cooperate with other organizations in the country and outside having similar aims and
objectives.
4.3 Consultation and Cooperation Bodies

The government, employers and the trade unions have established a number of tripartite and
bipartite bodies of consultation and cooperation at different levels.

Notes
Different Levels
I. Non-statutory (Permanent)
The non-statutory bodies are operating at 4 levels:
1. Central Level
2. State Level
3. Industry Level
4. Plant Level
a) Central level-
At Central Level, there are few bodies working, named as:
i. Indian Labour Conference

ii. Standing Labour Conference
iii. Central Implementation and Evaluation Committee
iv. Central Board for Worker’s Association
v. Special Tripartite Committee
vi. Committee on Conventions
i. Indian Labor Conference:

The Indian Labor Conference (ILC) is the apex level tripartite consultative committee in the Ministry
of Labor & Employment to advise the Government on the issues concerning working class of the
country. The first meeting of the Indian Labor Conference (then called Tripartite National Labor
Conference) was held in 1942 and so far a total of 46 Sessions have been held.
Significance:
Indian Labor Conference discusses and deliberates on significant issues aimed at improving the
welfare of the workers. Notable contributions have been emanated by this forum including the
Minimum wage fixing methodology and standing orders for employment.
ii. Standing Labor Committee:

The Standing Committees are those which are elected by the House or nominated by the Chairman
every year or from time to time and are permanent in nature.

Notes
iii. Central Implementation and Evaluation Committee:

This is setup to ensure proper implementation of labor awards, agreements and Code of Discipline.
It consists of 4 representatives each of central employers· and workers organizations with union labor
minister as chairman.
iv. Central Board for Workers Education:

The Central Board for Workers Education (CBWE) is an autonomous body under the Ministry of
Labor & Employment, Government of India. It is registered under the Societies Registration Act,
1860.The Scheme of Workers Education aims at achieving the objectives of creating and increasing
awareness and educating the workforce for their effective participation in the socio-economic
development of the country.
v. Special Tripartite Committee:

A tripartite Committee Viz., "The Committee on Fair Wage" was set up in 1948 to provide guidelines
for wage structures in the country. The report of this Committee was a major landmark in the history
of formulation of wage policy in India. Its recommendations set out the key concepts of the 'living
wage', "minimum wages" and "fair wage" besides setting out guidelines for wage fixation.
vi. Committee on Conventions:

Committee on Conventions is a three-man tripartite committee set up in 1954. The object was to
examine the ILO conventions and recommendations which have not so far been ratified by India. To
make suggestions with regard to a phased and speedy implementation of ILO standards. The
Committee's role is to provide an impartial and technical evaluation of the state of application of
international labor standards.
b) State Level
i. State Labour Advisory Boards

ii. Standing Labour Committee
iii. Industrial Relations Committees in some States.
i. State Labor Advisory Boards:

The State Government may constitute a board to be called the State Advisory Contract-Labor Board
(hereinafter referred to as the State Board) to advise the State Government on such matters arising
out of the administration of this Act as may be referred to it and to carry out other functions assigned
to it under this Act.
State Board shall consist of:

(a) A Chairman to be appointed by the State Government;
(b) The Labor Commissioner, ex officio, or in his absence any other officer nominated by the State.
Government in that behalf;
(c) such numbers, not exceeding eleven but not less than nine, as the State Government may nominate
to represent that Government, the industry, the contractors, the workmen and any other interests
which, in the opinion of the State Government, ought to be represented on the State Board.
ii. Standing Labor Committee:

The Standing Labor Committee (SLC), a tripartite body is a pre-cursor to the Indian Labor Conference
(ILC). As a matter of practice, and to maintain continuous dialogue with social partners, meetings of
these apex bodies are convened once in a year to discuss the topical issues concerning labor.
iii. Industrial Relations Committees in some States:

Industrial Committees are tripartite bodies where the number of workers representatives are equal
to the employers' representatives. These were set up to discuss various specific problems special to
the industries covered by them and suggest ways to overcome them. These committees provide a
forum for the discussion of proposals for legislation and other matters connected with the labor
policy and administration before they brought before the legislature.

Notes
4.4 Measures to Strengthen Trade Union

The different measures to strengthen trade union are as under:
 Internal Leadership
 Free from political influence
 Education and Training to workers
 Sufficient Finance
 Welfare activities for workers
 United Labour front
 Change in Employer’s view
 Formation of a Labor Party
 Membership fees
1. Internal Leadership-
This is the need of the hour. These unions should be run by internal leaders only. The outsiders and
more particularly politicians should not be allowed. Their internal labor leadership must be
developed. They must be educated and trained in labor leadership techniques and labor welfare
activities.
2. Free from political influence-

Workers and trade unions must be kept away from political influence. According to Kith, the famous
trade union leader of USA, “Trade unions should be kept a wary from politics and inception of trade
union should be done on the basis of specific industries. Constructive co-operation of all classes can
direct properly the trade union movement.” Though labor will be at liberty to participate in the
politics, but politicians should not use them to serve their purposes.
3. Education and Training to workers-

The obstacles in the development of trade unions lie in the illiteracy and ignorance of the workers
should be provided education so that they can understand their own interest and extend their
cooperation. Education will bring new awakening in them and they will not only think of their
interest but of the industry as well Training for the organization of trade unions can also be given to
them.
4. Sufficient Finance-
Worker’s financial status is not good. They cannot contribute much to the unions. Hence their
financial status may be improved. In this respect national workers policy Minimum Wages Act
should be obeyed.
5. Welfare activities for workers-

Along with efforts to improve the financial status, the trade unions may effectively start activities
such as the provision of day schools for children, creches at workplace, and night schools for adults,
reading rooms, libraries, co-operative stores, gymnasium, etc.
It is gratifying that various labor organizations like the Textile Labor Association, Ahmedabad; the
Hindustan Mazdoor Sewak Sangh and the INTUC have been doing some works in this direction.
These efforts help make workers loyal to their unions.
6. United Labor Front-

Unions must put a joint front. Splinter groups multiple unions dissipate their energies, dilute their
power and reduce their effectiveness. Trade unions should form a sort of labor party and all the trade
unions in the country should be affiliated to it. It gives adequate strength to the trade unions both
industry and Parliament.
7. Change in Employer’s view-

Generally, employers oppose trade unions. This attitude should be changed. They should think labor
are cooperative and so they should be educated as such. By this worker will cooperate with them and
their expectations will be fulfilled.
8. Formation of a Labor Party-

Notes
Trade unions should form a labor party and trade union in the country should be affiliated to it will
provide adequate strength to the trade unions both in the industry and parliament.
9. Membership fees-
In order to make members updated Trade unions must organize continuous training and
developmental programmes. Future needs smart and responsive Trade Unions, if they have to
survive and thrive.
Summary
 The beginning of the Labor movement in the modest sense started after the outbreak of World
War I in the country.
 The origin of the movement can be traced to sporadic labor unrest dating back to 1877 when the
workers at the Empress mills at Nagpur struck following a wage cut.
 The government, employers and the trade unions have established a number of tripartite and
bipartite bodies of consultation and cooperation at different levels.
 The development during the span of about 145 years may be considered broadly under the six
periods.
 There are various measures to strengthen the trade union movement in India.
Keywords
Labor union, AITUC, Strike, tripartite bodies, consultation, and co-operation.
Self Assessment
1. What influences the growth of trade union movement in India?
A. Economic conditions
B. Social conditions
C. Political conditions
D. All of the above
2. In which year the first factories act was adopted?

A. 1885
B. 1881
C. 1888
D. 1883
3. Who introduced a bill for the rights of trade union?

A. N.M Joshi
B. Narayan Lokhande
C. Lala Lajpat Rai
4. NTUF stands for ___________

A. National trade Union Federation
B. Nation Trade Union Federation

Notes
C. National Trade Union Forum

5. Who became the first president of AITUC?

A. N.M Joshi
B. Narayan Lokhande
C. Lala Lajpat Rai
6. Who have established several tripartite and bipartite bodies of consultation and cooperation
at different levels?
A. The government
B. Employers
C. Trade unions
D. All of the above
7. The non-statutory consultation and co-operation bodies are operating at ________levels.

A. Central level
B. State level
C. Plant level
D. All of the above
8. Which is the apex level tripartite consultative committee in the Ministry of Labour &
Employment to advise the Government on the issues concerning working class of the
country?
A. Standing Labor Conference
B. Central Implementation and Evaluation Committee
C. Indian Labour Conference
D. Central Board for Worker’s Association
9. Which body recommended the key concepts of the 'living wage', "minimum wages" and
"fair wage"besides setting out guidelines for wage fixation?
A. Central Implementation and Evaluation Committee
B. Central Board for Worker’s Association
C. Special Tripartite Committee
D. Committee on Conventions
10. Trade Union Cooperation and Consultation Machinery are needed to strengthen the
Industrial Policy and Trade Union Policy.
A. True
B. False

Notes
11. Workers and trade unions are not required to be kept away from the political influence to
strengthen trade union.
A. True
B. False
12. In order to improve the worker’s financial status which act should be obeyed?
A. Minimum Wages Act
B. Factories Act
C. Standing Orders Act
D. Industrial Disputes Act
13. What can be included under the list of providing welfare activities for workers?
A. Creches at workplace
B. Night schools for adults
C. Libraries
D. All of the above
14. Membership fees cannot be considered as the factor which can increase the strength of trade
union movement in India.
A. True
B. False
15. Internal labor leadership is going to be a great help to strengthen the trade union movement
in India.
A. True
B. False

1. D 2. B 3. A 4. A 5. C
6. D 7. D 8. C 9. C 10. A
11. B 12. A 13. D 14. B 15. A
Review Questions
1. What are the different measures to strengthen the trade union movement in India?
2. Discuss the consultation and cooperation bodies of trade union at different levels.
3. What are the six periods of trade union movement in India?
4. Elaborate the step-by-step movement of labor union in India.
5. Discuss the story behind AITUC and NTUF formation.

Notes
Further Readings
 Salamon, Michael, Industrial Relations Theory and Practice (3rd ed.), Prentice Hall,
1998

Notes
Dr. Shikha Goyal, Lovely Professional University Unit 05: Trade Union Rivalry and Recognition
Unit 05: Trade Union Rivalry and Recognition

CONTENTS
Objectives
Introduction
5.1 What is Code of Conduct?
5.2 Union-rivalry
5.3 Meaning of Recognition of Trade Union
Summary
Keywords
Self Assessment
Review Questions
Further Readings
Objectives
 Learn about the meaning of Code of Conduct.

 Learn about the principles of Code of Conduct.
 Learn how code of conduct works.
 Learn about trade union rivalry
 Analyse the case for understanding inter-union rivalry.
 Learn about the recognition of trade unions in India
 Understand about the recognition of majority unions.
 Problems in recognition of unions.
 To understand the rights of minority and majority trade unions.
Introduction
For positive contribution to Industrial Relations, it is expected that a trade union should have due
recognition as a collective bargaining agent, with well-defined rights and obligations. But neither the
Trade Unions Act, 1926 nor the Industrial Disputes Act, 1947 has provided for the compulsory
recognition of a trade union and determination of a bargaining agent. And so far, there is no Central
Legislation in this regard. This article examines all the vital aspects and problems relating to
recognition of trade unions and refers to various suggestions made from different quarters for
evolving a satisfactory procedure for determining the representative character of a union.
5.1 What is Code of Conduct?

A code of conduct is a set of rules outlining the social norms and rules and responsibilities of, or
proper practices for, an individual, party, or organization. Related concepts include ethical, honour,
moral codes and religious laws.
Objectives of Code of Conduct

The major objectives of code of conduct are as under:

Notes
 To ensure that employers and employees recognize each other’s rights and obligations.
 To avoid work stoppage.
 To facilitate the free growth of trade unions.
 To maintain discipline in industry.
Principles of Code of Conduct

There are some principles of code of conduct which need to be followed in general way in every
organization. Let us discuss these:
1. Every employee in industry or unit shall have the freedom and right to join a union of his choice.
No coercion shall be exercised in this matter.
2. There shall be no dual membership of unions.
3. There shall be regular and democratic elections of executive bodies.
4. There shall be no violence, coercion, intimidation, or personal vilification in inter – union
dealings.
5. All Central unions shall combat the formation or continuance of company unions.
How code of conduct will be helpful?

A quality code of conduct can go a long way in improving a company’s success. Companies that view
a code merely as a way to communicate legal rules miss much of the value that a code can provide.
A well-developed code can help a company to:
1. Prevent legal and regulatory violations:

This is the first objective that most companies attach to a code of conduct. When violations do occur,
a code can help to detect them and mitigate their effects.
2. Foster greater employee loyalty and retention.

When employees feel included and engaged in the company‘s culture and success, they feel more
committed.
3. Encourage greater customer loyalty and retention.

When customers learn about and then experience in practice a company‘s high standards of conduct,
customers are more likely to show their appreciation.
4. Build stronger relationships with suppliers and other business partners.

As with employees, the more that they understand what the company expects of them – and what
they can expect from the company – the stronger the alliance.
5. Strengthen trust and respect of other stakeholders.

Strengthen trust and respect of other stakeholders, such as local communities, regulators, NGOs,
even from competitors. As codes become publicly available publications, more outside stakeholders
are reviewing them and setting their expectations of the company partly based on its code. The more
that a company lives up to the expectations that it has established, the greater goodwill it engenders.
Working of Code of Conduct: How Code of Conduct works?

To better understand the working pattern of code of conduct, proper steps need to be followed. The
steps are:
1. Articulates leadership’s expectations.

Simply establishing these expectations regarding what leadership expects is worthwhile. It provides
clarity and transparency so that staff does not have to guess at leadership‘s expectations.
2. Establishes leadership’s commitment.

Much has been addressed regarding the importance of ―tone at the top; regarding expectations of
responsible conduct, this tone rises in importance.
3. Provides staff with a roadmap and tools for their daily work.

Notes
With clarity regarding leadership ‘s expectations that an employee can easily and regularly reference,
staff can act with consistency. Employees can turn to the code for guidance on questions or concerns.
Help employees to make good decisions when they face ambiguous situations.
4. Provides staff with comfort and confidence.

A code can provide staff with comfort that the company will support them when they act according
to the code and confidence that the decisions they make when they are in line with the code.
5. Encourages staff to serve the company’s aspirations.

A good code can encourage employees to strive to achieve the company‘s mission, vision and values
in a constructive way.
What are the considerations for a successful code of conduct program?

There are few considerations for a successful code of conduct program. We will discuss each one by
one.
1. Leadership commitment to the program

Without senior leadership‘s commitment, any code initiative is unlikely to truly engage employees
and demonstrate to them the ―tone at the top that is so critical to any business initiative – especially
one focused on doing the right thing.
2. Ethics and compliance processes

Leadership‘s commitment means so much more when the organization can point to procedures and
processes that support a code standards and expectations. Otherwise, employees are right to wonder
about how leadership expects to achieve adherence to the company‘s standards and address
concerns.
3. Company culture
A company culture focused around an enduring mission or vision and supported by lasting values
sets the best foundation for a proper focus on long-term value and success. These core foundations
help a code rise about a narrow focus only on the law to other commitments, promises and
aspirations that the company seeks to achieve.
4. Understanding of risk
With the hundreds of issues that a code could possibly address, a more targeted risk identification
and assessment effort helps to focus the code‘s contents to those issues that are most important to the
company‘s operations and that will provide it with a higher chance of success.
5. Coordination with policies

A company‘s policies often provide the detail underlying its expectations. Policies also can provide
the initial framework for a new code of conduct and serve as additional resources to support a code‘s
standards. Where policies exist, they provide important context for a code development or revision
effort.
5.2 Union-rivalry
The state of rivalry between two groups of the same union is said to be union rivalry. The inter-union
rivalry exists because of multiplicity of unions.
Outcomes of union rivalry

The outcomes of union rivalry are:
 Weakens the power of collective bargaining.

 Reduces the effectiveness of workers in securing their legitimate rights.
Case: The Paradip Port Trust

The Paradip Port enjoys the distinction as one of the deepest ports in the east coast of India with an
available draft of 42 feet. Its vast hinterland covers Orissa, south Bihar and east Madhya Pradesh —
a belt which abounds in metals and minerals.

Notes
Five registered unions were functioning at the end of 1977.
PPWU (Paradip Port Workers Union): Most representative union

Recognized by the management for purposes of negotiation and settling the terms and conditions of
employment of workers.
Story behind origin of PPWU

When the construction was in progress, the port workers initially, in the absence of a union were
subjected to numerous hardships and serious exploitation. They were treated as cogs in the machine
without showing any concern for human factor. The wages prevailing was inadequate even to
maintain their families on hand to mouth. Their working conditions were miserable, and the
treatment meted out to them was much to be desired. Workers, being illiterate and unorganized,
were not in a position to represent their problems effectively, much less to settle them through
negotiation and bargaining. There was no job security and workers who were victims of accidents
received no compensation. While this was the state of affairs that characterized work-life of workers
in the early years, a particular incident that took place in 1964 provided an additional prop for
workers to form a union.
Incident
In July 1964, a big cyclonic storm rocked the Paradip port. In the nature's fury, five of the workers
working at the breakwaters, were seriously injured and one died on the spot. Despite the accident
being a major one, the management did not take notice of it and allowed the dead body to remain
under the stones of breakwaters. The injured, aided by some of their fellow workers, joined the
Cuttack General Hospital and narrated their tale of woes and sorrows to Nishamani Khuntia (the
present President of PPWU) who was at that time M.L.A. of that area.
He was requested to take up the issue with the management and help them in the hour of sorrow.
The news of the accident spread with lightning speed and the search for the missing worker was
made by some of the employees. The body lying under stones, was taken out and identified by the
deceased worker's relatives and co-workers.
But surprisingly the management denied having engaged such a worker. At that time the workers
realized that unless they unite themselves by forming a trade union, they would be in the throes of
serious exploitation.
Outcome
The first union "Work charged Employees' Union" came into existence in 1964 with the unstinted
efforts of Nishamani Khuntia, K. Ch. Swain and a few workers. The union after facing some
difficulties got itself registered (Regd. No. 428) under the Trade Unions Act on August 14, 1964.
Was this union effective?

Notes
No, though the union had a flying start with an initial membership of about 60, it could not make
rapid strides till 1966, partly because of its narrow scope (confined to work-charged employees only)
and partly because of its poor organizational ability and lack of good leadership.
What decision has been taken to increase effectiveness?

In order to make the union broad-based and representative of all categories of port workers, the
union changed its name as "Paradip Port Workers' Union" on July 30, 1966. Soon its membership had
increased to 800 and Nishamani Khuntia was elected as its President. With his association and the
fresh label, the union turned a new leaf in its history.
Within less than six months, the management conferred recognition status on April 11, 1967. The
union had grown in strength over the years in spite of the emergence of rival unions. Its membership
also had increased steadily up to 1973 except for the year 1967. In the year 1974, however, there was
a decline in the membership.
Start of Inter-union rivalry

The PPWU which was functioning smoothly with Nishamani Khuntia as its unrivalled leader till
1974, suddenly faced rough weather and became the seat of intra-union rivalry.
Why?
A group of workers4 in the union were evidently dissatisfied with the leadership of Khuntia. They
felt that their problems failed to receive adequate attention.
Consequently, they approached Devendra Satpathy, who appeared on the scene and started
placating a section of workers with the ultimate aim of securing control over the Port Workers' Union.
Though Satpathy was a Congress leader in his own right, being a Member of Parliament at that time,
he was less known in labour circles and comparatively a new figure to trade union work.
It was stated that Satpathy entered the field because a group of workers requested him to take the
reins of the union. His supporters also maintained that the leadership of Khuntia was ineffective and
many problems of workers remained unsolved.
After a few months of preparatory work marked by frequent visits, processions, public meetings and
labour addresses, towards the end of 1975, Satpathy could gain the support of a section of PPWU.
His supporters convened a delegates' meeting on November 14, 1975 to elect new office-bearers of
the union.
The Khuntia group abstained from the meeting and Satpathy was elected as the President of the
union. Satpathy's group claimed that the new office-bearers headed by Satpathy were elected on the
basis of two-thirds majority of the delegates' votes. The delegates of the union were elected in the
ratio of 1:8 of the union membership.
Conflict is visible
Two sets of office bearers came to function simultaneously, and each group claimed that it was the
bona fide group of office-bearers of the union. Both the factions vied with each other to control the
union office and the official records.
Problems due to conflict

This factionalism had encouraged some measures of indiscipline in workers' ranks and even led to
intimidation, assaults and violence. The whole matter was intriguing even to the office of the Labour
Commissioner to which two separate sets of annual returns were submitted by the rival factions.
These developments have not only hampered the usual functioning of the union but also created a
climate of confusion and uncertainty about the future of the union. Even the normal routine work of
the union, for instance, collection of subscriptions, ventilating workers' grievances, etc., could not be
continued.
What is the main genesis of inter-union rivalry in this case?

Political Reasons
On the surface: It appears that the dissatisfaction of a section of members with the leadership of
Khuntia gave rise to factionalism.
Real fact: It is the political differences between Nandini Satpathy and Nishamani Khuntia that were
responsible for the trouble.

Notes
5.3 Meaning of Recognition of Trade Union

Acceptance of one single union by the employers, workers and the Government which could be the
mouthpiece of the workers, to take decisions on behalf of the workers and bargain with the
management on all important issues affecting management and labor.
What do you think?

How can trade union play an impactful role in maintaining good industrial relations?
Answer
A trade union may be stable and strong but until it is given recognition — legally or voluntarily— it
will hardly have any impact.
History of recognition of trade union

The history of recognition of trade union can be discussed under the following heads:
• Appointment of the Royal Commission
• Legislative Action on the Royal Commission’s Recommendation
• International Labour Organization Convention
• Plans and Recognition of Trade Unions
• First National Commission on Labor
• Industrial Relations Bill, 1978
• The Hospital and other Institutions (Settlement of Disputes) Bill, 1982
The brief description of each stage is as under:
1. Appointment of the Royal Commission

Problems relating to recognition of trade unions attracted the attention of the Royal Commission on
Labor in 1929. It made a comprehensive survey of almost all the problems relating to labour
(including recognition of trade unions) and recommended that the “Government should take the
lead, in case of its industrial employees, in making recognition of union easy and in encouraging
them to secure recognition.’
2. Legislative Action on the Royal Commission’s Recommendation

Legislative attempt was, however, not made until 1943 for compulsory recognition of trade unions
by employers when the Indian Trade Unions (Amendment) Bill, 1943, was placed before the Central
Legislative Assembly.
The bill was opposed by the management and, therefore, it could not be passed. The bill was revised
in the light of discussion made in the assembly and a new bill, namely, the Indian Trade
Unions(Amendment)Bill, was introduced three years later in 1946 in the Central Legislative
Assembly.
This bill was referred to the Select Committee which suggested certain amendments. The bill was
passed in November 1947 and received the assent of the Governor General on 20 December 1947. But
the Trade Unions(Amendment)Act was never brought into force.
3. International Labour Organization Convention

At an international level, the concern felt by the International Labour Organization for evolving an
international instrument for recognition of trade unions resulted in ILO Convention No. 87 on
‘Freedom of Association and Protection of the Right to Organize in 1948 and ConventionNo.98
concerning the right to organize and bargain collectively in 1949.
4. Plans and Recognition of Trade Unions

Immediately after India became a sovereign democratic republic, the Trade Unions Bill,1950,
concerning the recognition of trade unions through planning was accepted and a Planning
Commission was constituted.
5. First National Commission on Labour

Notes
Another landmark in the recognition of trade unions was reached with the appointment of the
National Commission on Labor in 1966. The Commission recommended, inter alia, for statutory
recognition of trade unions but no concrete legislative action was taken till 1978.
6. Industrial Relations Bill, 1978

In 1978, the Industrial Relations Bill, inter alia, incorporated the provisions for recognition of trade
unions. But the bill which was introduced in Lok Sabha in August 1978, lapsed after the dissolution
of the sixth Lok Sabha on 30August 1978.
7. The Hospital and other Institutions (Settlement of Disputes) Bill, 1982

The bill provides for the recognition of trade unions of workmen. A trade union will not be
considered for recognition with respect to an establishment for the purposes of legislation unless it
is registered under the Trade Unions Act and each of its office-bearers is a workman in such
establishment or any other establishment.
In order to be entitled for recognition, such a trade union must have the support of the majority of
workmen in the establishment. The representatives of workmen on the Grievance Settlement
Committee, Local Consultative Council and Consultative Council would be nominees of recognized
trade unions.
Is the right to grant recognition to trade unions a fundamental right within the meaning
of Article 19 (1) (c) of the Constitution?
No, because the right to form an association does not carry with it the concomitant right that the
association should be recognized by the employers.
Laws related to Recognition of Trade Unions

There are laws related to recognition of trade unions:
1. Trade Unions (Amendment) Act, 1947

2. The Trade Unions Bill, 1950
3. State legislation
1. Trade unions (Amendment) Act, 1947:

In India, it has been observed earlier, that there is no Central enactment governing recognition of
trade unions. The Trade Unions (Amendment) Act, 1947, however, provided for recognition of
unions,
(i) by agreements, and
(ii) by order of the Court
2. The Trade Unions Bill, 1950:

In 1950 the Trade Unions Bill, 1950 was introduced in the Parliament. The Bill also provided for
recognition of trade union where application for recognition was made by more than one union. The
trade union having the largest membership gets preference over others.
The recognized unions are given rights such as collecting subscriptions, holding meetings on
employer’s premises and of collective bargaining. The Labor Court is empowered under the Bill to
order for recognition of unions.
3. State Legislation:
In some states there are legislations on the recognition of trade unions. These legislations are:
1. Maharashtra
2. Madhya Pradesh
3. C.P. and Berar
Maharashtra:
The Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practice Act, 1972,
provides for the recognition of trade union for facilitating collective bargaining for certain

Notes
undertakings and confers certain rights and obligations upon recognized trade unions and also
confers certain powers on unrecognized trade unions.
Madhya Pradesh:
The Madhya Pradesh Industrial Relations Act, 1960, provides that a union for the purpose of
recognition shall have not less than 25 per cent of the total number of employees employed in the
industry in such local area.
C.P. and Berar:

The C.P. and Berar Act, 1947 lays down the following conditions for recognition of unions:
i. The membership of union is open to all employees irrespective of caste, creed or color;
ii. The union has for the whole of the period of six months preceding the date of application,
membership of not less than between 15 and 20 per cent as the State Government may
prescribe for that local area, of the employees in the industry in that area;
iii. The constitution of the union shall be such as may be provided under this Act.
Did You Know?

Is right of collective bargaining provided to all trade unions?
No,
The right of collective bargaining is not provided for all trade unions that exists but is provided for
those trade unions which are recognized.
Example:
In Kalindi and Others v. Tata Locomotive and Engineering Co. Ltd. the Supreme Court held that
there is no right to representation as such unless the company, by its standing orders, recognizes such
right. The decision was reiterated in Bharat Petroleum Corporation Ltd. v. Maharashtra General.
Kamgar Union & Ors.
Advantage of recognized Trade Union

1.The executive of the trade union is entitled to negotiate with employer regarding employment, non-
employment, terms of employment or conditions of labour of any person or of all, if any dispute arsis
between the executive and the employer on these issues it must be reffered to then registar whose
decision is final.
2. The executive of the recognized trade union is entitled to display the notices of the trade union in
the premises where the employees are employed, and the employer must make necessary
arrangements
3. To collect some payable by the members to the union on the premises where wages are being paid.
4. To appear behalf of any employee or employees in any domestic or departmental enquiry
5. The recognized union alone is given the right to appoint its nominee to represent its workman in
the works commission under the industrial dispute act 1947
6. A Trade Union being the sole bargaining agent or a principal bargaining agent.
Recognition as a majority Union

A union can claim to be recognized as a majority union in an establishment if:
1. It has been functioning for a period of one year after registration under the Trade Unions
Act.
• The requirement need not be fulfilled if it is the only union functioning in the establishment.
• In case of branches of a union recognized under the Code as a representative union for the
industry, the qualifying period of one year is not to be insisted upon for granting recognition

Notes
to the branch union at the unit level provided it satisfies the prescribed membership
qualification and is operating in the same local industry as the representative union.
2. It considers that it commands a majority of membership-in any case not less than 15%- of
the workers of that establishment.
3. It has not been found responsible for a breach of the Code within one year immediately
before claiming recognition.
4. The existing recognized union, if any, the establishment has completed a period of two years
after recognition under the Code.
Problems in recognition of trade union

Recognition is one of the basic issues of industrial relation between employer and employee as the
employer has no obligation to give recognition to any union, in the earlier times the attitude of the
employer towards trade union has been hostile.
2 major problems in union recognition

1. All registered union in India seem to have been enjoying industrial relation rights either de facto
or de jure though they happen to be craft, caste or category-based union.
2. Politicization of trade union is one of the basic reason mainly in CTUO that one party supports
secret ballot system and other support check off system due to which there is repeated coalition
management in several states have refused to recognize a trade union mainly on five grounds:
(i) most of the office bearers of the union were outsiders,
(ii) and sometimes, those disapproved by management, particularly politicians and ex-employees.
(iii)the union consisted of only minimum number of employees.
(iv)there were many rival unions in existence; and
(v)the trade union was not registered under the Trade Unions Act,1926
Meaning of Minority Unionism

These are also known as members-only unionism. It is a model for trade unions in which local unions
represent and organize workers who voluntarily join (and pay dues) rather than the entire workforce
of a place of employment.
Feature:
In such a model, a union election is not held by the entire workforce to determine whether a majority
wishes for the workforce to be represented by a local branch of a national union, but a union can
nonetheless exist to support members who pay dues.
Advantages:
1. Members-only unionism allows members and organizers to operate under the radar of
management, especially in regions rife with anti-union sentiment.
2. It also allows for other activist and organizing models to be tried by a minority local union.
Disadvantages:
1. A disadvantage of this model is that businesses may not recognize a minority union as a
collective bargaining agent for employees who are members.
2. Strikes and pickets are likely not possible for minority unions, meaning that answers to
grievances filed by members rely entirely upon the discretion and timing of management.
Did You Know?

Do recognized majority unions and unrecognized minority unions can be treated on the same footing
in law?

Notes
No, if an employer recognizes a particular union as representing the majority of its work force such
recognition confers certain special rights on the recognized union which right is not available to an
unrecognized union.
Does unrecognized union have no right at all in law?

No, due to multiple trade unions coming into existence in the industry, provisions have been made
in the Rules conceding certain rights to non-recognized unions.
Example:
 Non-recognized unions may not have the right to participate in the process of collective
bargaining with the management/employer over issues concerning the workmen in general,
 They have the right to meet and discuss with the employer or any person appointed by him on
issues relating to grievances of any individual member regarding his service conditions and
 To appear on behalf of their members in any domestic or department enquiry held by the
employer or before the conciliation officer or labor Court or industrial tribunal.
Case: Bharat Forge Limited vs Maharashtra General Kamgar on 14 June, 2010

The Petitioner is a company incorporated under the Companies Act, 1956, having one of its factories
at Mundhwa, Pune. It is engaged in the activity of manufacture of forgings and employs about 800
permanent workmen on its rolls in the said factory.
The said workmen are stated to be members of Bharat Forge Sangh, which is the union duly
recognized in respect of the petitioner company's aforesaid factory (hereinafter referred to as "the
recognized union"), under the provisions of the Maharashtra Recognition of Trade Unions &
Prevention of Unfair Labor Practices Act, 1971.
Respondent No.1- Maharashtra General Kamgar

Mahasangh is a Trade Union which is an unrecognized union (hereinafter referred as Respondent
No.1-union) which represents contract labor workmen, who are engaged in petitioner undertaking
through various contractors under the provisions of the Contract Labor (Regulation and Abolition)
Act, 1970.
Learned Senior Counsel Mr. Rele then referred to Section 36(1) of the I. D. Act, the proviso of which
lays down that where there is a recognized union for any undertaking, no workman in such
undertaking shall be entitled to be represented in any such proceeding not being a proceeding in
which the legality or propriety of an order of dismissal, discharge, removal, retrenchment,
termination of service, or suspension of an employee is under consideration, except by such
recognized union.
He contended that since the recognized union in the petitioner company was Bharat Forge Kamgar
Sangh, that union alone has exclusive right to represent workmen in an industrial dispute under the
Act.
Thus, in the submission of the Learned Senior Counsel, the respondent No.1 union which is an
unrecognized union, had no locus to raise any demand and respondent Nos. 2 and 3 ought not to
have entertained the demand and made a reference.
The Learned Senior Counsel, therefore, urged that the impugned order of reference is required to be
set aside. Mr. Rele also placed reliance on the following decisions of the Hon'ble Supreme Court –
1. Rashtriya Chemicals & Fertilizers Ltd. & Anr. v/s General Employees' Association and Ors.
(2007) 5 SCC 273;
2. Steel Authority of India Limited v/s Union of India and Ors., (2006) 12 SCC 233;
3. Nedungadi Bank Ltd. v/s K. P. Madhavankutty & Ors., 2000 I CLR 671 and
4. National Engineering Industries Ltd. v/s State of Rajasthan & Ors., 2000 I CLR 389.
At the time of making a reference, the appropriate Government is not required to look into the issue
as to who is to ultimately represent the workmen in the adjudication before the Industrial

Notes
Adjudicator. In each case, though the dispute may have been raised by an unrecognized union for
reference, at the time of adjudication before the Industrial Adjudicator, the possibility that the
recognized union may be persuaded to espouse the cause of the workmen owing allegiance to an
unrecognized union cannot be ruled out.
Summary
A code of conduct is a set of rules outlining the social norms and rules and responsibilities of, or
proper practices for, an individual, party, or organization. Related concepts include ethical, honor,
moral codes and religious laws.
Acceptance of one single union by the employers, workers and the Government which could be the
mouthpiece of the workers, to take decisions on behalf of the workers and bargain with the
management on all important issues affecting management and labor.
The state of rivalry between two groups of the same union is said to be union rivalry. The inter-union
rivalry exists because of multiplicity of unions.
Minority unionism is a model for trade unions in which local unions represent and organize workers
who voluntarily join (and pay dues) rather than the entire workforce of a place of employment.
Keywords
Trade Union, Code of Conduct, Union Rivalry, Minority Union, Recognition of Trade Union,
Registration of Trade Union.
Self Assessment
1. Which is not an objective of code of conduct?
A. To avoid work stoppage.
B. To maintain discipline in industry.
C. To cease the free growth of trade unions
D. To ensure that employers and employees recognize each other’s rights and obligations.
2. A well-developed code can help a company to prevent legal and regulatory violations.
A. True
B. False
3. Which is not a consideration for a successful code of conduct program?

A. Ethics and compliance processes
B. Company Culture
C. Lack of co-ordination with policies
D. Understanding of risk
4. Multiplicity of unions is not the reason of inter-union rivalry?

A. True
B. False
5. Reducing the effectiveness of workers in securing their legitimate rights is the outcome of
union rivalry.

Notes
A. True
B. False
6. The state of rivalry between two groups of the same union is said to be union rivalry.
A. True
B. False
7. Which law is not related to Recognition of Trade Unions?

A. Trade Unions (Amendment) Act, 1947
B. The Trade Unions Bill, 1950
C. State legislation
8. While discussing the history of recognition of trade union, The Hospital and other
Institutions (Settlement of Disputes) Bill, 1982 shall be discussed.
A. True
B. False
9. “Government should take the lead, in case of its industrial employees, in making
recognition of union easy and in encouraging them to secure recognition.’ This is a
recommendation of which commission related to recognition of trade union.
A. Legislative Action on the Royal Commission’s Recommendation
B. Appointment of the Royal Commission
C. First National Commission on Labour
D. International Labour Organization Convention
10. Right of collective bargaining is provided to all trade unions.

A. True
B. False
11. A union can claim to be recognized as a majority union in an establishment if it has been
functioning for a period of how many years after registration under the Trade Unions Act.
A. Three
B. Four
C. One
D. Five
12. Politicization of trade union cannot be considered as a problem in union recognition.

A. True
B. False
13. What cannot be included as disadvantage of Minority Unionism?

A. Strikes and pickets are likely not possible for minority unions

Notes
B. Businesses may not recognize a minority union as a collective bargaining agent for
employees.
C. Answers to grievances filed by members rely entirely upon the discretion and timing of
management.
14. Unrecognized union has no right at all in law.

A. True
B. False
15. Due to multiple trade unions coming into existence in the industry, provisions have been
made in the Rules conceding certain rights to non-recognized unions.
A. True
B. False

1. C 2. B 3. C 4. B 5. A
6. A 7. D 8. A 9. B 10. B
11. C 12. B 13. D 14. B 15. A
Review Questions
1. What is union rivalry? How it affects union’s strength?
2. What do you mean by registration of Trade Unions? What are the advantages of registration?
3. Give suggestions to minimize Trade Union Rivalry.
4. Discuss the laws related to recognition of Trade Union in India.
5. What are the considerations for a successful code of conduct program?
Further Readings
 I.S. Ghosh, Trade Unionism in the Underdeveloped Countries.
 V.V. Giri, Labor Problems in India.
 Pigou A.C., Economics of Welfare.
 Mamoria C.B., Dynamics of Industrial Relation in India.

Notes
Unit 06: Size and Finance of Indian Trade Unions

CONTENTS
Objectives
Introduction
6.1 Membership in India
6.2 Funds of Trade Union
Summary
Keywords
Self Assessment
Review Questions
Further Readings
Objectives
After this lecture, you will be able to:
 learn about the factors responsible for small size unions.

 learn about the consequences of small size unions.
 understand the different funds of trade union.
 learn about the challenges faced by trade union in terms of financing.
 learn the ways of solving financial crunch of trade unions.
Introduction
Are trade unions experiencing difficulties in retention of quality membership in particular?
The answer is yes, there has been substantial erosion in membership of unions.
6.1 Membership in India

Indian trade union is deeply fragmented along many lines.
1. At one level, the movement is divided along political lines with each political party having
its own trade union wing.
2. At another level, the movement is conditioned because of the growth of enterprise level
unions.
What is the impact of changes in the business scenario in industrial sector on unionization?
The answer is Unionization increases.
Reasons for Eroding Base of Unions at the Enterprise Level

Let us discuss the answers from leaders of companies:
 Souring relations between union and management

 Colgate workers’ union;
causing fear to join union
Colgate Palmolive
 Alienation of workers from unions

Notes
 Politicization of unions
 Trade union leaders are not serious about future of

 Bhartiya kamgar sena,
workers.
Crompton greaves
 Workers are not interested in unions
 Mixing political ideology with union ideology
 No change in the mindset of unions according to market

 Sharmik utkarsha Sabha,
realities
Asian paints
 Lack of communication between union and workers
 Non-cooperation amongst actors of Industrial Relations.
 Disunity amongst unions

 Association of chemical
 Self-centered unions
workers, Cadbury
 Less awareness amongst workers about benefits of
unions
 Anti-labor policies of Government

 Voltas employees' union,
 Relocation of manufacturing operation to far-off places
Voltas
 Outsourcing non-core activities
What are the reasons for declining influence of trade unions?
 The volatile market, increasing competition and emerging business compulsions have diluted
the needs of unions.
 Direct dialogue between employees and management has further weakened the position of
unions.
 Relocation of manufacturing operations to non-unionized sites and outsourcing of non-core
activities has marginalized unions to a great extent. Union seem helpless to evolve suitable
counter strategies to ward off side effects of restructuring.
 The profile vis-à-vis aspirations of new generation of workforce have changed drastically and
there exists a mismatch between agenda of unions and expectations of new workers.
 The existing union leadership seems neither interested in the future of workers nor
development of quality inside leadership.
 Non-adherence to the democratic values within a union, resulting in growing alienation of the
rank and file.
 Changing attitude of government in granting permission to closure and or retrenchment has
adversely impacted on union development.
What can be the reasons behind reduction in membership or of small size unions?
Factors
(Responsible For Small Size of Unions)
1. The requirement of the Trade Union Act 1926 is that any seven workers may form a union
and get it registered. This give rise to a large number of small unions.
2. Unionization in India started mainly with the big employers and gradually it spread to small
units. This process is still continuing. Thus, the number of unions and union membership
are increasing, but the average membership is declining.

Notes
3. The trade union generally exists in a factory or the unit of employment. In India, every
factory does not have a trade union.
Whenever the employees in a particular factory are organized a new union comes into
existence.
4. Rivalry among the leaders and the Central organizations resulted in multiplicity of trade
unions, thereby reducing the average number of membership.
If rival unions could be stopped from being evolved, the average size of unions could
definitely go up.
Words of Leaders
What are the best strategies adopted by leaders?
1. Profit-center Mind Set and Performance based Work Culture-

Unions have now started understanding and accepting the importance of business realities like
profitability and productivity to be seen as a part of package deal with the management. Unions,
accordingly, have started supporting performance-based rewards.
2. Decent Work and Work Life Balance

In the era of multi-tasking vis-a-vis increasing workload, unions have started projecting aspects like
flexible work schedule and work-life balance. The quality of work life and decent treatment to
employees are being reworked at workplaces.
3. Adopting Familial Approach in Order to get Good Deals

The changing posture of union and management has also helped in evolving a familial approach
both by management and workers. The good results of such arrangements are being reflected in the
behavior as well as work of employees.
4. One Union in One Company

Notes
Unions, after weakening their power due to multiplicity, are now developing an arrangement that
supports not only "one union in one company" formula but also independence from any outside
leadership. Unions are now actively working to develop and support inside leadership.
What are the consequences of small size unions?
 Increase in the number of small unions is not a healthy development.

 Small unions cannot face the challenge of employers for long because of the weak bargaining
power.
 They are short of funds and are helpless to engage the services of experts in times of emergency.
 Moreover, they cannot undertake the mutual benefit schemes.
 Small unions aggravate their helplessness in collective bargaining and fail in pressurizing the
Government and the employers in pursuit of meeting workers’ demands.
 They depend thoroughly on the political parties or on such outside personalities who happen
to command political influence on the employers and the Government machinery.
6.2 Funds of Trade Union

A registered trade union is entitled to maintain two kinds of funds.
1. General Fund and
2. Political Fund
Is there any condition on the Trade Union to spend/utilize the fund?
The Trade Unions Act, 1926 imposes certain conditions on the Trade Unions to spend/utilize the
funds only for some specific purposes as stated under Section 15 (General Fund) and Section 16
(Political Fund) of the act.
Are there any Sections in the Trade union act which create and regulate these funds?
Section 15 and Section 16
1. GENERAL FUND:
According to Section 15 of the Act
• A registered trade union can create a general fund.
• Members of the registered trade union have to contribute to the general fund.
• The fund can be spent for the purposes as specifically stated in the Section 15 of the act.
Purposes for which the General Fund can be Utilized:
1. The payment of salaries, allowances and expenses to office bearers of the trade union.
2. The payment of expenses for the administration of the trade union including an audit of
accounts of the general fund.
3. The expenses in connection with prosecutionor defense undertaken for the purpose of securing
or protecting any rights of the trade union.
4. The conduct of trade disputes on behalf of the union or any member.
2. POLITICAL FUND:
Origin
In 1946, based on the ideology that development of a group need involvement or support of political
party directly or indirectly, concept of trade election and collection of political fund started.
 Aim for use of this fund for political agenda like election expenses, campaigning and strengthen
TU
Political fund deposition was made compulsory for all TU members to get related benefits.

Notes
Aim regarding Political Fund
 Under section 16(1) trade union for the purpose of spending on political cause must create a
separate political fund. Contributions to such political funds should be collected separately.
 In Trade Union Amendment 2019, deposition of political fund was made voluntary under
section 16 clause 3
 Reason To release pressure in labors politic. Moreover, politics is a matter of interest, and it
need not be compelled to all labors for participation.
Procedure for contribution in political fund- Notice Check-in Check-out process:
1. Notice:
TU issue/publish application or notice for call for deposition of political fund.
2. Check in:
Interested Trade union members having capacity to pay, fill check-in form and monthly amount
on the name of political fund will be deducted from their salary account.
3. Filled Check
in form remains valid for 6 months, after which members need to fill new check-in form and
enroll again for political fund.
4. Check-out application:
After lapse of check-in form, those members who wish to discontinue this deposition may fill
check-out applications.
5. Time span for check-in
form is only 6 months, the reason being financial situation of labor may change and may want
to opt out of such deposition
According to Section 16
 The trade union must create a separate political fund for the purpose of spending it for political
cause.
 Contributions to such political funds should be collected separately.
 Contribution to the political fund cannot be compelled or made as compulsory or condition to
admit a person as member of the trade union.
 However, the control and management of the political fund can be vested exclusively to those
members who contributed to the political fund.
Purpose of Political Fund
Section 16(2) specifically states the purposes for which the political fund may be utilized.
1. The payment of any expenses incurred by a candidate or prospective candidate for election
as a member of any legislative body or any local authority. The expenses includes the
expenses incurred before, during and after the election in connecting with such candidature;
2. Conducting any meeting or distribution of any literature or documents in support of such
candidate or prospective candidate;
3. Maintenance of any person who is a member of any legislative body or local authority.
4. Registration of electors or the selection of a candidate for any legislative body or local
authority.
5. Conducting of political meetings or distribution of political literature and documents to the
members of the trade union or to the general public.
Why trade unions require financial resources?

Notes
• To function effectively trade unions require sufficient financial resources.

• A variety of programs, events and functions have to be organized by the unions for
rendering the services expected of them or for fulfilling their goals.
• Unions must strengthen their financial position to organize such events and programs.
Is there any financial crunch faced by trade unions?

Yes, Trade unions have to struggle hard to balance their income and expenditure.
Source and Expenditure
SOURCE EXPENDITURE
Primary source is the Salaries to office staff, allowances to office bearers, annual
membership subscription. meeting/convention expenses, rents, printing, stationery and
many more.
Main Challenges of Finance

1. The workers are apathetic towards trade unions and do not want to contribute a part of their
hard-earned money.
2. Members, instead of making regular payments to the union, make ad-hoc payments if a
dispute arises, which shows “a lack of commitment to the union”.
3. Under conditions of multiplicity of unions, a union is increasing its membership figures
usually keeps the subscription rate unduly low and does not collect even that subscription
regularly.
Ways of Improving Finance
1. National Commission on Labour recommended that minimum subscription should be raised.

2. Introduction of the “Check-off” system: Under this an employer undertakes, on the basis of
collective agreement, to deduct union dues from the worker’s pay and transfer the same to the
union.
3. Eliminate trade union rivalry by strictly adhering to the principle of “One union in one
Industry”.
Summary
 The volatile market, increasing competition and emerging business compulsions have diluted
the needs of unions.
 Direct dialogue between employees and management has further weakened the position of
unions.
 Relocation of manufacturing operations to non-unionized sites and outsourcing of non-core
 The profile vis-à-vis aspirations of new generation of workforce have changed drastically and
there exists a mismatch between agenda of unions and expectations of new workers.
 The existing union leadership seems neither interested in the future of workers nor
 Non-adherence to the democratic values within a union, resulting in growing alienation of the
rank and file.
 Changing attitude of government in granting permission to closure and or retrenchment has
adversely impacted on union development.

Notes
Keywords
Trade Union - an organization for people who all do the same type of work. Trade unions try to get
better pay and working conditions for their members
General Fund - General fund refers to revenues accruing to the state from taxes, fees, interest
earnings, and other sources which can be used for the general operation of state government.
Political Fund - political fund may be utilized with an aim to promote civic and political interests of
its members.
Self Assessment
1. Are trade unions experiencing difficulties in retention of quality membership in particular?
A. Yes
B. No
C. Maybe
D. Sometimes
2. What is the average membership per union in India as compared to other countries?
A. The average membership per union in India is less than 800, as compared with the U.K
(17,600) the USA (9,500).
B. The average membership per union in India is less than 700, as compared with the U.K
(17,600) the USA (9,500).
C. The average membership per union in India is less than 600, as compared with the U.K
(17,600) the USA (9,500).
D. The average membership per union in India is less than 500, as compared with the U.K
(17,600) the USA (9,500).
3. Indian trade union is deeply fragmented along _______ lines.

A. Zero
B. One
C. Two
D. Many
4. At one level, the movement is divided along _______ lines with each political party having
its own trade union wing.
A. Economical
B. Political
C. Technological
D. Ecological
5. What is the impact of changes in the business scenario in industrial sector on unionization?
A. Unionization decreases
B. Unionization inflates
C. Unionization increases
D. Unionization has no effect
6. What are the reasons for declining influence of trade unions?

Notes
A. The volatile market, increasing competition and emerging business compulsions have not
diluted the needs of unions.
B. Direct dialogue between employees and management has further strengthened the position
of unions.
C. Relocation of manufacturing operations to non-unionized sites and outsourcing of non-core
D. The profile vis-à-vis aspirations of new generation of workforce have remained consistent
and there exists a mismatch between agenda of unions and expectations of new workers.
7. The existing union leadership seems ______ interested in the future of workers _____
A. And, or
B. Neither, nor
C. Either, or
8. Non-adherence to the democratic values within a union, resulting in growing alienation of

the_________.
A. rank and file
B. rank
C. file
9. The requirement of the Trade Union Act _____ is that any seven workers may form a union
and get it registered. This give rise to a large number of small unions.
A. 1934
B. 1926
C. 1946
D. 1987
10. Unions have started supporting performance-based rewards.

A. True
B. False
C. Depends
11. Is there any condition on the Trade Union to spend/utilize the fund?
A. True
B. False
C. Depends
12. Are there any Sections in the Trade union act which create and regulate these funds?
A. Section 16 and Section 17
B. Section 15 and Section 20

Notes
C. Section 15 and Section 19

D. Section 15 and Section 16
13. _________ specifically states the purposes for which the political fund may be utilized.
A. Section 16(3)
B. Section 16(1)
C. Section 16(2)
D. Section 16(4)
14. Why trade unions require financial resources?

A. To function effectively trade unions require sufficient financial resources.
B. A variety of programs, events and functions have to be organized by the unions for
rendering the services expected of them or for fulfilling their goals.
C. All of the above
15. Is there any financial crunch faced by trade unions?

A. True
B. False
C. Depends

1. A 2. A 3. D 4. B 5. C
6. C 7. B 8. A 9. B 10. A
11. A 12. D 13. C 14. C 15. A
Review Questions
1. A registered trade union is entitled to maintain two kinds of funds. General Fund and Political
Fund. Explain both in detail.
2. Is there any condition on the Trade Union to spend/utilize the fund? Elaborate.
3. Enumerate the purposes for which the General Fund can be utilized?
4. Enumerate the purposes for which the Political Fund can be utilized?
5. Why trade unions require financial resources?
6. What are the Main Challenges of Finance and ways to improve the same?
7. What are the reasons for Eroding Base of Unions at the Enterprise Level?
8. What can be the reasons behind reduction in membership or of small size unions?
9. What are the best strategies adopted by leaders?
Further Readings

Notes


Notes
Dr. Shikha Goyal, Lovely Professional University Unit 07: Collective Bargaining
Unit 07: Collective Bargaining

CONTENTS
Objectives
Introduction
7.1 Meaning of Collective Bargaining
7.2 Pre-requisites for Collective Bargaining
Summary
Keywords
Self Assessment
Review Questions
Further Readings
Objectives
 Learn about the concept of collective bargaining.

 Understand the significance of collective bargaining.
 Become aware about the types of collective bargaining.
 Understand the process of collective bargaining.
 Learn about the Pre-requisites for Collective Bargaining.
 Learn about challenges involved in Collective Bargaining.
 Learn about Legal framework in Collective Bargaining.
Introduction
The prime objective of the industrial relations is to regulate the power of managements and organized
labor and to provide a mechanism is reconciled thereto. It presupposes equal status before law of
labor and management and acts as countervailing force to reduce the inherent in equality in the
collective power of the two parties. In the world of industry and commerce a process has been
evolving in the past century for the regulation between management and workers of terms and
conditions of service and the establishment of peaceful, orderly relations at the place of work through
mutual settlement of differences and cooperation of all those engaged in the enterprise. The process
is known as Collective Bargaining.
7.1 Meaning of Collective Bargaining

It is that arrangement whereby, the wages components of remuneration and conditions of
employment of workmen are settled through a bargain between the employer and the workmen
collectively whether, represented through their union or by some of them on behalf of all of them.
In simple terms, ccollective bargaining means bargaining between an employer or group of
employers and a bona fide Labour Union.
Definition by Encyclopedia Britannica

Collective Bargaining is a negotiation between an employer or group of employers and a group of
working people to reach an agreement on working conditions.

Notes
Did You Know?

From where the concept of collective bargaining has emerged?
Answer
The concept of collective bargaining is the offshoot of Trade Union activity. With the
emergence of unions in the country, the collective bargaining became a rule and the
employer found necessary and convenient to deal with the representatives of workers.
So, with the growth of unionism and consciousness of the work class, the trade agreements
on the collective basis have become a rule rather than exception.
Characteristics of Collective Bargaining

1. It is a group action as opposed to individual action and is initiated through the
representatives of workers:
On the management side are its delegates at the bargaining table and on the side of the
workers is their trade union, which may represent the local plant, the city membership or
nationwide membership.
2. It is flexible and mobile, and not fixed or static:

It has fluidity and scope for compromise, for a mutual give and take before the final agreement
is reached or the final settlement is arrived at. The parties normally ask for more or offer less
than they ultimately accept or give.
3. It is a two-party process:
It is a mutual give and take rather than a take it or leave it method of arriving at the settlement
of a dispute. Both parties are involved in it. In this connection, Clark Kerr observes Collective
bargaining can work only with the acceptance by labour and management of their appropriate
responsibilities. It can succeed only when both labour and management want it to succeed. It
can flourish only in an atmosphere which is free from animosity and reprisal. There must be
a mutual eagerness to develop the collective bargaining procedure and there must be attitudes
which will result in harmony and progress.
4. It is a continuous process:
It provides a mechanism for continuing and organized relationships between the
management and trade unions. The heart of collective bargaining is the process for a
continuing joint consideration and adjustment of plant problems. It does not end with
negotiation, but as Glen Gardiner puts it, “it begins and ends with the writing of a contract.
Actually, it is only the beginning of collective bargaining.
5. It is dynamic and not static:

In the past, it used to be emotional, turbulent and sentimental but now it is scientific, factual
and systematic. Its coverage and style have changed.
6. It is industrial democracy at work:

Industrial democracy is the government of labour with the consent of the governed the
workers. Collective bargaining is not a mere signing of an agreement granting seniority,
vacations, and wage increases. It is not a mere sitting around a table, discussing grievances.
Basically, it is democratic, and it is a joint formulation of company policy on all matters which
directly affect the workers in a plant. It is self-government in action. It is the projection of a
management policy which gives the workers the right to be heard. It is the establishment of
factory law based on common interest.
7. Collective bargaining is not a competitive process, but it is essentially a

complementary process:
Each party needs something that the other party has, namely, labour can make a greater
productive effort and management has the capacity to pay for that effort and to organize and
guide it for achieving its objectives.

Notes
8. It is an art, an advanced form of human relations:

To substantiate this, one need only witness the bluffing, the oratory, dramatics and coyness
mixed in an inexplicable fashion which may characterize a bargaining session.
Types of Collective Bargaining

There are majorly five types of collective bargaining:
1. Distributive Bargaining
2. Integrative Bargaining
3. Productivity Bargaining
4. Composite Bargaining
5. Concessionary Bargaining
1. Distributive Bargaining:
In this type of negotiation process, one party benefits at the expense of others. It discusses
redistribution of profit sharing to increase wages, bonuses, or financial benefits.
2. Integrative Bargaining:
In this type of bargaining, the agreement is reached so that both the participating sides tend to
benefit – a win-win situation. In other words, both parties consider each other’s needs and
concerns.
3. Productivity Bargaining:
In this type of bargaining, the negotiations revolve around productivity and pay. The two
parties agree to certain changes that promise to boost productivity in exchange for higher
wages.
4. Composite Bargaining:
This type of negotiation emphasizes various factors not directly related to pay but rather
focused on employee welfare and job security. It ensures the long-term relationship between
employer and employee that is mutually beneficial.
5. Concessionary Bargaining:
In this type of bargaining, the union sacrifices some benefits to bail out the employer during the
stressed economic situation, which benefits the employees in the long run.
Significance of Collective Bargaining

The importance of collective bargaining can be ascertained from the point of view of – management,
trade union, and government.
1.Management:
The primary objective of the management is to make maximum utilization of the workforce
and earn higher profits. It can only be achieved if the workforce co-operates, where collective
bargaining comes into play.
2.Trade Union:
Each labour at the individual level has poor bargaining power against the management.
Hence, the working class united to form a powerful union and protect their interests through
collective bargaining.
3.Government:
Typically, collective bargaining keeps the Government at bay, and they are not required to
employ force to resolve disputes.

Notes
Let us discuss in general as well.

1. Increase the economic strength of unions and management.
2. Establish uniform conditions of employment with a view to avoid industrial disputes and
maintaining stable peace in the industry.
3. Secure a prompt and fair redressal of grievances
4. Avoid interruptions in work which follow strikes, go slow tactics and similar coercive
activities.
5. Lay down fair rates of wages and norms of working conditions.
6. Achieve an efficient operation of the plant.
7. Promote the stability and prosperity of the industry.
8. It provides a method for the regulation of the conditions of employment of those who are
directly concerned about them.
9. It provides a solution to the problem of sickness in the industry and ensure old age pension
benefits and other fringe benefits.
Process of Collective Bargaining

There are few steps in collective bargaining. Let us discuss these steps one by one:
1. Preparation:
At the very first step, both the representatives of each party prepare the negotiations to be carried
out during the meeting. Each member should be well versed with the issues to be raised at the
meeting and should have adequate knowledge of the labour laws. The management should be
well prepared with the proposals of change required in the employment terms and be ready
with the statistical figures to justify its stand. On the other hand, the union must gather adequate
information regarding the financial position of the business along with its ability to pay and
prepare a detailed report on the issues and the desires of the workers.
2. Discuss:

Notes
Here, both the parties decide the ground rules that will guide the negotiations and the prime
negotiator is from the management team who will lead the discussion. Also, the issues for which
the meeting is held, are identified at this stage. The issues could be related to the wages,
supplementary economic benefits (pension plans, health insurance, paid holidays, etc.),
Institutional issues (rights and duties, ESOP plan), Administrative issues (health and safety,
technological changes, job security, working conditions).
3. Propose:
At this stage, the chief negotiator begins the conversation with an opening statement and then
both the parties put forth their initial demands. This session can be called as a brainstorming,
where each party gives their opinion that leads to arguments and counter arguments.
4. Bargain:
The negotiation begins at this stage, where each party tries to win over the other. The negotiation
can go for days until a final agreement is reached. Sometimes, both the parties reach an amicable
solution soon, but at times to settle down the dispute the third party intervenes into the
negotiation in the form of arbitration or adjudication.
5. Settlement:
This is the final stage of the collective bargaining process, where both the parties agree on a
common solution to the problem discussed so far. Hence, a mutual agreement is formed
between the employee and the employer which is to be signed by each party to give the
decision a universal acceptance.
7.2 Pre-requisites for Collective Bargaining

There are some pre-requisites for collective bargaining:
1. Existence of a strong representative trade union in the industry that believes in
constitutional means for settling the disputes.
2. Existence of a strong and enlightened management which may integrate the different
parties, i.e., employees, owners, consumers and society or Government.
3. Agreement on basic objectives of the organization between the employer and the employees
and on mutual rights and liabilities.
4. Existence of a fact finding approach and willingness to use new methods and roles for the
solution of industrial problems. The negotiation should be based on facts and figures and
both the parties should adopt constructive approach.
5. Proper records for the problem should be maintained.
6. Collective bargaining should be best at plant level. If there are more than one plant of the
firm, the local management should be delegated proper authority to negotiate with the local
trade union.
7. In order that collective bargaining functions properly, unfair labor practices must be
avoided by both the parties.
8. The contract must include arbitration clause in case there is a dispute. The institution of
collective bargaining represents a fair and democratic attempt at resolving mutual disputes.
Wherever it becomes the normal mode of settling outstanding issues, industrial unrest with
all its unpleasant consequences is minimized.
Challenges
1. Multiple Unions:

Notes
There is a problem of the multiplicity of unions in the past of the industrial establishments.
No union enjoys the support of most workers in the plant. Moreover, rivalry among the trade
unions does not allow to create the proper atmosphere for collective bargaining.
2. Non-recognition:
There is a lack of definite procedure to determine which union is to be recognized to serve as
a bargaining agent on behalf of the workers.
3. Political Domination:
There has been a very close association between the trade unions and political parties. As a
result, the trade union movement has not encouraged collective bargaining but has learned
towards postictal orientations.
4. Weak Trade Union Movement:

The trade union movement still covers only a small portion of the total industrial
employment. Besides, the unions are too weak to bargain collectively on account of their small
membership, poor financial resources, multiplicity, inter-union and intra union rivalry,
politicization, poor leadership, and absence of suitable legislative provisions for recognizing
them as bargaining agents.
5. Excessive Dependence on Adjudication:

A large number of organizations and trade unions like to use the devices of compulsory
adjudication for the settlement of their industrial disputes.
6. Reduction in the Area of Collective Bargaining:

The area of collective bargaining has gradually receded in recent years due to the emergence
of several new institutions and modes such as wage boards, statutory fixation of minimum
wages and payment of bonus, regulation of fines and deductions, working hours, overtime
payment, holidayed, welfare and social security measures.
7. Little Government Support:

The government has shown little interest in ion collective bargaining because:
 It does not have confidence in the bargaining strength of our trade unions,
 It has fear of stickers and lockouts,
 It has fear of the communists gaining in strength.
8. Interference by Political Leaders:

More often, industrial disputes are sought to be settled by inviting the political leaders to mediate
and help the parties agree. The inhibits the growth of collective bargaining.
Legal framework
The IDA oversees the rights of employers and employees in the investigation and settlement of
industrial disputes, which includes trade unions. It allows for collective bargaining through
discussion and mediation, or, if that fails, voluntary arbitration or compulsory adjudication with
trade union involvement. A settlement reached through collective bargaining is legally binding.
According to the IDA, there are two types of settlements recognised:
1.Those agreed via conciliation processes before the authority, which bind members of the signatory
union as well as non-members and all current and future management workers.
2. This settlement is one achieved outside of conciliation but signed independently by the parties to
the agreement - such agreements bind just the parties to the agreement.
Even after all the indirect provisions for collective bargaining are there, the workers or the trade
union still faces backlash.
There are some legal boundaries which causes this. Some are:

Notes
1. There is no ratification of ILO Convention, C-98 and C-87.

2. There is a very limited scope collective bargaining under the ambit of Trade Union Act and
Industrial Dispute Act. Both statutes are silent on the recognition of trade unions, which has serious
implications for workers' rights.
3. One of the major backlashes is that the right to strike is a legal right controlled by the Industrial
Dispute Act of 1947, rather than a fundamental right. Strikes or lockouts can be prohibited under
Section 10K of Industrial Disputes Act.
4. Section 22 of the IDA states that there must be at least 6 weeks' notice before a strike in public
utility services.
5. Strikes are prohibited during the pendency of conciliation, arbitration, and judicial processes under
Section 23 of the IDA.
6. The CRPC does not apply to trade union activity, although it does in the case of illegal strikes.
Case Laws Related to Collective Bargaining

MRF United Workers Union V State of Tamil Nadu, 2009
Two criteria should be utilized to assess if an organization has the competence to be the sole signatory
to collective agreements: representativeness and independence.
a. The decision of whether organisations fit these requirements should be carried out by a
body that provides every assurance of objectivity and independence.
b. As a result, it was argued on their behalf that it was an international standard that the trade
union serving as the sole collective bargaining agent must be representative and
independent.
Summary
Collective bargaining may take place at various levels, for instance, plant, locality, employer, area or
region, company, industry and national levels.
Even at a particular level, a number of situations may be envisaged. For example, at the plant or
establishment level, collective bargaining may take place between the employer, on the one side and
one or more industrial unions or one or more craft unions or one or more general unions separately
or in combination, on the other.
At the industry level there may be various units of bargaining, for example, one or more employers
or a company corporation or one or more employers' associations on the one side, and one or more
trade unions established at the industry, region, plant or national level, on the other.
The term 'bargaining unit' refers to the parties, that is, employers and workers/trade unions
represented in negotiations, and to whom the resulting collective agreement applies.
The 'level of bargaining' is a broad term denoting the nature of ownership of undertakings, the
geographical area, the industry, the jurisdictions of employers and trade union, or the layer where
collective bargaining takes place.
Keywords
Collective Bargaining, Legal Framework, Distributive, Integrative, Bargain, Negotiation.
Self Assessment
1. The prerequisite of Collective Bargaining includes willingness to adopt a 'give and take'
approach.
A. True
B. b. False

Notes
2. Integrative bargaining is a process where both parties can win.

A. True
B. b. False
3. Collective bargaining is not a process of bargaining between employees and employer.

A. True
B. b. False
4. Collective bargaining can be carried on individually.

A. True
B. False
5. From where the concept of collective bargaining has emerged?
A. Conflict
B. Dispute
C. Offshoot of Trade union activity
6. Collective bargaining is an individual action instead of group action.
A. True
B. False
7. Collective bargaining has a scope for compromise and has fluidity.
A. True
B. False
8. Collective Bargaining is democratic, and it is a joint formulation of company policy on all

matters which directly affect the workers.
A. True
B. False
9. Which is not a type of collective bargaining?
A. Non-composite Bargaining
B. Distributive Bargaining
C. Integrative Bargaining
D. Productivity Bargaining
10. In which type of bargaining, the union sacrifices some benefits to bail out the employer during
the stressed economic situation, which benefits the employees in the long run?
A. Composite Bargaining

Notes
B. Concessionary Bargaining
C. Integrative Bargaining
D. Productivity Bargaining
11. The significance of collective bargaining can be seen from the point of view of :
A. Government
B. Management
C. Trade Union
D. All of the above
12. Which cannot be considered as a pre-requisite for collective bargaining?
A. Existence of a strong representative trade union in the industry

B. Existence of a strong and enlightened management
C. No need of proper records maintenance.
D. Agreement on basic objectives of the organization between the employer and the employees
and on mutual rights and liabilities.
13. Lack of definite procedure to determine which union is to be recognized to serve as a

bargaining agent on behalf of the workers is one of the challenges in collective bargaining.
A. True
B. False
14. Strikes are prohibited during the pendency of conciliation, arbitration, and judicial processes
under which section of IDA?
A. Section 24
B. Section 25
C. Section 23
D. Section 22
15. The IDA oversees the rights of employers and employees in the investigation and settlement
of industrial disputes, which includes trade unions.
A. True
B. False

l. A 2. A 3. B 4. B 5. C
6. B 7. A 8. A 9. A 10. B
11. D 12. C 13. A 14. C 15. A

Notes
Review Questions
Q1. Discuss the concept of collective bargaining with relevant example.
Q2. Critically examine the pre-requisites of collective bargaining.
Q3. Analyze the importance of Collective Bargaining with reference to “Employees” and
“Employer”.
Q4. Narrate the role of collective bargaining in India with preview of industrial relations.
Q5. What are the challenges of Collective Bargaining?
Q6. Explain the process of Collective Bargaining with specific examples.
Further Readings

Notes
Dr. Shikha Goyal, Lovely Professional University Unit 08: Grievances
Unit 08: Grievances

CONTENTS
Objectives
Introduction
8.1 Grievance
8.2 Why there is a need for a grievance handling procedure?
8.3 Grievance Handling Procedure
8.4 Model Grievance Procedure
8.5 Grievance Redressal Machinery
Summary
Keywords
Self Assessment
Review Questions
Further Readings
Objectives
After this unit, would be able to
• understand the concept of Grievance.
• learn about the nature of grievance.
• identify the causes of grievance.
• grievance procedure
• managing Employee Grievance
• learn about the grievance redressal machinery
• learn about the setting of grievance settlement authorities.
• learn about the authorities under the Act for settlement of disputes.
Introduction
Are Dissatisfaction, Complaint and Grievance same?
1. Dissatisfaction is anything that disturbs an employee, whether the unrest is expressed in
words.
2. Complaint is a spoken or written dissatisfaction brought to the attention of the supervisor or
the shop steward.
3. Grievance is a complaint that has been formally presented to a management representative or
to a union official.

Notes
Industrial Relations and Labour Laws

8.1 Grievance
What do you mean by grievance?
• Grievance means any type of dissatisfaction or discontentment arising out of factors related
to an employee’s job which he thinks is unfair.
• A grievance is a sign of an employee’s discontentment with his job or his relationship with
his colleagues.
• Grievances generally arise out of the day-to-day working relations in an organization.
• According to Dale Yoder, "Grievance is a written complaint filed by an employee claiming
unfair treatment".
• According to Keith Davis, "Grievance is any real or imagined feeling of personal injustice
which an employee has, concerning his employment relationship".
Features of Grievance
1. A grievance refers to any form of discontent or dissatisfaction with any aspect of the
organization.
2. The dissatisfaction must arise out of employment and not due to personal or family
problems.
3. The discontent can arise out of real or imaginary reasons. When employees feel that injustice
has been done to them, they have a grievance. The reason for such a feeling may be valid or
invalid, legitimate or irrational, justifiable or ridiculous.
4. The discontent may be voiced or unvoiced, but it must find expression in some form.
5. However, discontent per se is not a grievance. Initially, the employee may complain orally
or in writing.
6. If this is not looked into promptly, the employee feels a sense of lack of justice.
7. The discontent grows and takes the shape of a grievance.
8. Broadly speaking, thus, a grievance is traceable to be perceived as non-fulfillment of one’s
expectations from the organization
Types of Grievances
There are mainly three types of grievances:
1. Factual
2. Imaginary
3. Disguised
1. Factual Grievance:
• The relationship between employer and employee is based on the organization's

employment contract.
• It is the employment contract that specifies the norms that define the limits of an employee's
expectation from the organization to meet his requirements and expectations.
• When these expectations are not met by the organization, the employee gets disappointed
with his job.
• This type of disappointment is known as a factual grievance.
• These grievances are due to faulty implementation of organizational policies.
• For example, a salary hike is promised to employees after one year but not given.

Notes
Unit 08: Grievances

2. Imaginary Grievance:
• Imaginary grievance arises when an employee is dissatisfied due to his wrong perception,
negative attitude, and incorrect information.
• This wrong perception can have a long-term impact on the organization.
• It may develop a negative image of the organization in front of its employees which may
decrease their work efficiency.
• Therefore, this type of grievance should be dealt with immediately.
3. Disguised Grievance:
• When an employee is not aware of the reasons for his dissatisfaction, then he has a disguised
grievance.
• Generally, employees' psychological needs like the need for appreciation, friendliness,
authority, success, etc, are not met.
• For example, an employee who is dissatisfied with the work conditions of the company may
desire some appreciation and praise from his co-workers.
• Hence, the disguised grievances must also be given due consideration because if they are
neglected, they can have harmful consequences.
What can be the factors that arise grievances in any organization?

1. Violation of management’s responsibility such as poor working conditions.
2. Violation of company’s rules and regulations.
3. Violation of labor laws.
4. Violation of natural rules of justice such as unfair treatment in promotion, etc.
What can be the probable outcomes of grievances in any organization?

• Low morale,
• Unhappiness,
• Frustration and
• Discontent in the employees
which ultimately
 affects the concentration,
 efficiency and
 productivity of the employees.
Causes of Grievance
The main causes of grievances are:
I. Management Practices:
Grievances can arise from the following management practices:

1. Management Style
The autocratic style of management at one end and participative style at the other may
cause grievance among the workforce in an organization.
Example:

Notes

• The workforce composed of extremely qualified people may not appreciate an
autocratic style as in the present scenario, participative style is more appreciated.
• Thus, the style and practices would need to be adapted according to the current
situation.
2. Social Distance
• The relationship between the workers and the manager is characterised by social
distance.
• This is because there may be class differences and cultural orientations between
management and workers.
• Managers view the workers as someone who is on a much lower social scale.
• In such circumstances, the grievance system would not work effectively as the
workers are hesitant with their grievances.
3. Implementation of Personnel Policies

• If the personnel policies do not serve the purpose for which they are formed, it may
be a reason for grievance.
• There may be several contradictions in personnel policies that may lead to
grievances, e.g., matters related to employee remuneration, seniority, overtime,
assignment of personnel to shifts, etc.
4. Communication Gap
• Lack of communication between the employees and management can also cause
grievance.
• Matters that concern the employees or group of employees should be informed to
them.
5. Supervisory Practices
• Faulty supervisory style, such as lack of consistent application of personnel
policies, biasness in applying rules and decisions, etc. can create pressure on
employees and could lead to grievances.
• For example, setting-up up challenging individual or group tasks without
consulting the staff members can build pressure and cause grievance.
II. Grievances Resulting from Personal Maladjustment:

• Employee Attitude - It has been observed that employees having a negative attitude
complain frequently and are careless, casual and inconsiderate of others. They provoke
others to join them and give rise to unnecessary grievances.
• Health Problems - Employees suffering from health issues like depression, mental tension
may find an outlet by airing their grievances. When a person is already tensed due to ill
health, minor concerns take the form of grievances.
• Impractical Expectations - In any organization, employees having high esteem often
develop overconfidence and are over-ambitious. These traits are the main causes of
grievances.
III. Working Conditions

Employees may be distressed due to the following reasons:
I. Rigid production standards.

Notes
Unit 08: Grievances

II. Mismatch of the skills of the worker and the requirement of the job.
III. Lack of adequate tools, machines and types of equipment to successfully
complete a given task.
IV. Changes in work-hours or techniques.
V. Poor rapport with the supervisors.
VI. Bad conditions of the workplace like sanitation facilities, etc., and
unavailability of drinking water, damaged workstations, inadequate.
VII. Poor disciplinary system (too much or too less discipline, both are equally
harmful).
8.2 Why there is a need for a grievance handling procedure?

Reasons for Having Formal Procedure
1. It gives reassurance to the employees that they have a mechanism available that they can
rely upon in case they experience any grievance.
2. The grievance handling procedure is a mechanism through which the organization can
come to know about the problems and issues faced by the employees. It further helps to
identify the problems and lacunas in the policies and practices of the organization, which is
of utmost importance for fine-tuning these policies.
3. A formal grievance handling procedure helps the employee to bring out their hidden
feelings, problems and perceptions in the open. Once they are expressed before the
grievance mechanism, they can be handled and resolved rather than letting them simmer in
the minds of employees
4. A formal grievance handling mechanism keeps a check on the supervisor, his attitude and
behavior towards his subordinates. This is because the supervisor will be aware that if he
does not manage the subordinates appropriately, they may refer the matter to the grievance
redressal mechanism.
5. A grievance handling procedure helps the employees to sort out their problems through a
well-established mechanism than through infighting amongst themselves.
8.3 Grievance Handling Procedure
Discovery of Grievances
Define and Understand the grievances
Gather information
Analyse the information
Redressal of grievance
Follow up
1. Discovery of Grievances

Notes

It is utmost important that the management tries to identify the employee grievances and issues
of discontentment.
Not all grievances will be openly expressed in the organization.
The management needs to use different ways to identify the unexpressed and latent grievances
amongst employees as well.
This can be done by observing the behaviour of the employees with their supervisors, peers and
subordinates.
The organization can put suggestion box/ complaint boxes where employees can write down
their problems if any.
Open discussion forums with employees on a regular basis also help identify the grievances.
The organization may also conduct employee surveys where the employees can express their
concerns.
2. Define and Understand the Grievances

Once these grievances are identified, the management needs to understand and define them
correctly.
Further action can only be taken appropriately, if these problems are well understood and
defined in the right perspective.
3. Gather Information
The next step is to gather information such as facts, opinions and data, about the grievance from
all the parties concerned.
This is important because it will help us reach the real cause of the grievance and thus redress it
more appropriately.
It will also be helpful in differentiating between real and imaginary grievances.
4. Analyse the Information

Once the information is obtained, the next step is to analyze the information and use it to make
the right decision to redress the grievance.
5. Redressal of Grievance
It is utmost important that the decision should be taken as quickly as possible for the immediate
redressal of the grievance.
Speedy redressal helps build trust amongst the employees towards the organization and its
grievance redressal mechanism.
6. Follow up
Even thought the grievance has been redressed, the management needs to check repeatedly that
the decision has been implemented and also to ensure that the grievance has finally been
resolved through the decision taken.
8.4 Model Grievance Procedure

The National Commission on Labor has suggested a model grievance procedure which has six steps
each limited by a time frame.
The aggrieved employee can refer his grievance from one stage to the other, if dissatisfied, after the
time limit at each stage exhausts.

Notes
Unit 08: Grievances
1. The employee experiencing the grievance will first approach the foreman for grievance
redressal.
2. If the foreman is unable to resolve the grievance, the employee can refer his complaint to
the departmental representative/ supervisor who has 48 hours to redress the employee’s
grievance to his satisfaction
3. If the employee still feels aggrieved, he can move his grievance to the next level that is the
Head of the department. At this level, the grievance needs to be resolved within 3 days to
the satisfaction of the employee.
4. If the employee is still not satisfied with the decision, he can report to the grievance
committee which has representatives of the employees as well as the employer.
5. This committee has to reach a unanimous decision on the grievance, only then can it be
implemented. In the absence of a unanimous decision, the suggestions/decision of this
committee has to be communicated to the Chief Manager/ chief executive within 7 days
from the day the grievance was referred to it.
6. The manager has to take a final decision within 3 days and communicate to the aggrieved
employee. If the employee is still not satisfied, he can appeal against the decision for
voluntary arbitration within a week’s time of the manager’s decision being communicated
to him
Case Study: Grievance Investigation

1. Matilda – employee and complainant
2. Sheila – colleague of Matilda
3. Gertrude – manager of Matilda and Sheila
4. John – another manager in the firm
Background to the Company:
The company is a major construction organization Relevant Policies and procedures are in place but
not effectively being utilized.
The Allegation:
• Matilda (the employee) complains that Sheila (a colleague) is trying to get her to leave the
organization so that Sheila’s friend can be employed in Matilda’s job.
• Matilda alleged that Sheila has been making her life difficult at work and she has
experienced bullying and harassment.

Notes

• Matilda says that Sheila complains about anything that Matilda does and constantly tells
her to leave the organization because no one wants her there.
• Matilda alleges that Sheila deliberately does not pass on crucial information about day-to-
day work, which then creates the impression that Matilda is underperforming in her role.
• Matilda also alleges that Sheila is very friendly with their manager, Gertrude. She alleges
that they often socialize outside of work.
• Matilda has raised concerns about her treatment from Sheila on many occasions with
Gertrude, who had simply told her to deal with the matter herself.
• Matilda says she is stressed out and alleges that things came to a head when Sheila had
spent the whole day picking on Matilda, making her cry.
• Sheila finds her in the toilets there and tells her that she should realise she is not wanted in
the team and should leave.
• Matilda cannot afford to be without a job and does not see why she should be forced out of
her job.
• Matilda goes home and decides that she is too upset to go to work the following day. She
rings another manager, John, to say that she is frightened to go to work because she would
be picked on.
• John says he is aware of what has been alleged and thought it had been dealt with by
Gertrude months ago.
• He advises her that she should not go to work and the he would speak to Gertrude.
• Matilda does as she has been instructed, but returns to work after a few days, of instructed.
• Gertrude calls her into the office to ask why she was not at work and why she had not rung
the office to speak to her and tell her that she would not be in.
• Matilda is told that because she has not complied with the sickness reporting requirements,
she will not be paid for her time off.
• Matilda explained that she rang John, who was aware of what had happened and had
advised her not to go to work.
• Gertrude laughs and tells Matilda and that the office had bets on whether she would be in
work the day after she had been crying and that because of her failure to attend, Gertrude
had won £50.
• Matilda tells Gertrude that she is going to raise a grievance because she does not think the
way she has been treated is right.
• She says she will write to senior management about the way she has been treated.
• Gertrude tells Matilda that she cannot register a grievance and that she should just knuckle
down and get on with things for the sake of the team.
• Gertrude says that Matilda is the problem, not anyone else.
• John was not going to do anything to help either, because they had discussed it and senior
management wouldn’t want to deal with someone at her low level in the organization.
• Matilda is vey upset and decides that enough is enough. She writes to the CEO to ask for
help and formally registers a grievance against Sheila and Gertrude.
Summary:
• The manager has been complained about
• An employee has been complained about
• An independent manager has done nothing to resolve the issue
An Initial Risk Assessment Reveals the Problem Areas
• Work-related stress
• Breach of duty of care for health, safety and well-being of Matilda
• Bullying and harassment claim

Notes
Unit 08: Grievances

• If proven, the case has the potential to have media interest and a significant cost implication
for the organization.
• Bearing all this in mind, the CEO appoints a manager to oversee the case and calls in an
independent investigator.
1. Investigation by Jay Webb

• Meeting key players and establishing facts:
• Once assigned to the case, Jay meets with each of the employees to investigate the facts and
to identify possible solutions.
• The case was further complicated by Matilda going off sick with work-related stress.
• However, contact was made with Matilda, and she agrees to attend an investigation meeting
provided that it was not in her current work location.
• With Matilda’s agreement, the interview was held at her home with her representative
present.
2. Report writing and suggestions for progress

• Upon discussion with all relevant parties, it was decided that the allegations raised by
Matilda were sufficient to arrange a separate disciplinary investigation involving Gertrude
and Sheila.
• Both were told that they faced disciplinary action in line with the firm’s disciplinary policy
and procedures.
3. Feedback for John

John did ask Gertrude to deal with the situation after Matilda contacted him, but after the
facts of the case were established, he was given coaching by Jay on how to deal with a
grievance where the complainant is not your direct employee.
4. Support for Matilda

Matilda was given counselling and the option of being re-deployed to another team or back
to her old job. She decided to stay in her job.
5. Step 5
The firm was advised and encouraged by Jay to undertake team-building exercises to
strengthen the sense of workplace cohesion.
8.5 Grievance Redressal Machinery

I. Setting up of Grievance Redressal Machinery
• Every industrial establishment employing twenty or more workmen shall have
one or more Grievance Redressal Committee for the resolution of disputes arising
out of individual grievances.
• The Grievance Redressal Committee shall consist of equal number of members
from the employer and the workmen.
• The chairperson of the Grievance Redressal Committee shall be selected from the
employer and from among the workmen alternatively on rotation basis every year.
• The total number of members of the Grievance Redressal Committee shall not
exceed more than six:
o Provided that there shall be, as far as practicable, one-woman member if
the Grievance Redressal Committee has two members and in case the
number of members are more than two, the number of women members
may be increased proportionately.

Notes
• The Grievance Redressal Committee may complete its proceedings within thirty
days on receipt of a written application by or on behalf of the aggrieved party.
• The workman who is aggrieved of the decision of the Grievance Redressal
Committee may prefer an appeal to the employer against the decision of Grievance
Redressal Committee and the employer shall, within one month from the date of
receipt of such appeal, dispose off the same and send a copy of his decision to the
workman concerned.
• Nothing contained in this section shall apply to the workmen for whom there is an
established Grievance Redressal Mechanism in the establishment.
II. Setting up of Grievance Settlement Authorities
• The employer in relation to every industrial establishment in which fifty or more
workmen are employed or have been employed on any day in the preceding
twelve months, shall provide for, in accordance with the rules made in that behalf
under this Act, a Grievance Settlement Authority for the settlement of industrial
disputes connected with an individual workman employed in the establishment.
• Where an industrial dispute connected with an individual workman arises in an
establishment referred to in sub- section (1), a workman or any trade union of
workmen of which such workman is a member, refer, in such manner as may be
prescribed such dispute to the Grievance Settlement Authority provided for by the
employer under that sub- section for settlement.
• The Grievance Settlement Authority referred to in sub- section (1) shall follow such
procedure and complete its proceedings within such period as may be prescribed.
• No reference shall be made under Chapter III with respect to any dispute referred
to in this section unless such dispute has been referred to the Grievance Settlement
Authority concerned, and the decision of the Grievance Settlement Authority is not
acceptable to any of the parties to the dispute.
Authorities under the Act for settlement of disputes

There are various authorities to set up as a part of dispute settlement machinery, which are mainly
divided into three stages –
1. Conciliation,
2. Arbitration and
3. Adjudication.
Works Committee
• Section 3 of the ID act provides for setting up of such committees mainly in factories with
100 or more workers.
• The formation of the committee is bi-partite with equal representation from employers and
employees.
• Worker representatives should be elected departmentally from various groups and
categories of workmen in consultation with the registered trade unions.
• The main objectives of such committees are to secure and promote healthy relations between
the employer and workmen, have a say in matters of common interest and to cool down any
material difference arising from such matters.
Grievance Redressal Committee

Notes
Unit 08: Grievances

• As per amended provisions of the ID Act in 2010 and Section 9C, it is mandatory for every
industrial establishment to have such a committee internally for resolution of disputes.
• Total members of such a committee to be restricted at six (with an equal number of members
from the employer and workmen) while the position of the chairperson to be rotated
alternatively on yearly basis between the committee members.
• Any proceedings to be completed by the committee within a month.
• Workman aggrieved by the decision of the committee can appeal to the employer, who upon
receiving such a complaint need to dispose of it within a month from its receipt and send
the copy of his decision to the workman.
• However, it is important to note that the provisions of this section do not affect the right of
a workmen to raise an industrial dispute as per the act.
Conciliation Officer
• He is basically a mediator appointed by the appropriate government, i.e. either central or
state, usually an officer of the rank of assistant labor commissioner in every district.
• They call both parties to the dispute to a table to discuss and come to a common consensus
to resolve the issue. The aim is to come to an amicable “settlement” of dispute.
Duties of conciliation officer

• To investigate and settle the dispute in a fair and amicable way without delay
• Prepare a memorandum of settlement with signs from both the parties and send it to the
government along with his report.
Board of Conciliation
• Any matter not resolved at the above stage can be referred to the board. It includes an
independent chairman (mostly a conciliation officer), two to four members representing
both the disputed parties in equal numbers.
• Upon failure to solve the dispute, the appropriate government may refer the matter for
adjudication.
• Duties of the board are similar to the conciliation officer. Board requires to submit its report
to the government maximum within two months from the date the matter refer to them.
Arbitrator
• Although the ID act does not define arbitrator, but it includes umpires.
• There is a separate act called “The Arbitration Act, 1940” in India.
• An arbitrator is an independent person appointed by both parties to dispute, usually well
in advance for amicable settlement of disputes.
• The award is recognised as per the act and binding on both the parties.
• Appointing an arbitrator is a voluntary act and not binding to the parties as per Section 10A
of the ID act. Arbitrators are required to submit a signed copy of the arbitration award to
the government post their investigation.
Court of Inquiry
• Not in every case court orders an enquiry, unless it feels it necessary to do so. In exceptional
cases, if there is an enquiry, then a report of enquiry (usually held by the senior judge of
court) to be submitted within a period of six months from the date of enquiry.

Notes
Labour Court (LC)

• Matters mentioned in Schedule II of the ID act are generally notified to the labor courts by
the government.
• Labor courts are run by the presiding officer equivalent to the senior level district judge.
• Matters such as strikes & lay-off, dismissal or discharge of workmen, validating standing
orders etc. are referred and heard by the labor court.
• “Award” given by the labor court is final and binding to the parties of the dispute.
Industrial Tribunal
• Even though industrial tribunals have more power as compared to labor courts.
• Schedule II and Schedule III are the subject matters of industrial tribunals. Its presiding
officer is equivalent to a high court judge.
• Subject matters of industrial tribunals are retrenchment, any closure of the establishment,
profit sharing, wage-related matters including those related to PF & gratuity etc.
National Tribunal
• Even though matters heard at the National tribunal are of the same subjects as those of
labour courts and industrial tribunals, they are being adjudicated at the national tribunal
when the impact of the matter is on a large number of population as well as matters
impacting more than one state.
• The judge of a national tribunal is a “presiding officer” equivalent to a Chief Justice of High
Court judge.
Summary
• Grievance is Dissatisfaction is anything that disturbs an employee, whether the unrest is
expressed in words.
• According to Keith Davis, "Grievance is any real or imagined feeling of personal injustice which
an employee has, concerning his employment relationship".
• The grievance handling procedure is a mechanism through which the organization can come to
know about the problems and issues faced by the employees. It further helps to identify the
problems and lacunas in the policies and practices of the organization, which is of utmost
importance for fine-tuning these policies.
• Every industrial establishment employing twenty or more workmen shall have one or more
Grievance Redressal Committee for the resolution of disputes arising out of individual
grievances.
Keywords
• Labour Court - A labor court (or labour court or industrial tribunal) is a governmental judiciary
body which rules on labor or employment-related matters and disputes.
• National Tribunal - It is a specialized body equipped with the necessary expertise to handle
environmental disputes involving multi-disciplinary issues.
• Industrial Tribunal - The Industrial Tribunal is a juridical Tribunal made up of a Chairman and
two members (one representing Workers' interests and the other Employers' interests) drawn

Notes
Unit 08: Grievances
up from separate panels in the case of an Industrial Dispute whilst of a chairman alone in the
case of alleged unfair dismissal.
• Arbitrator - An arbitrator is an independent, impartial third party that works to settle a dispute
between two opposing sides, often by making a decision that they both agree to. This process is
called arbitration.
Self Assessment
1. Every industrial establishment employing _______ workmen shall have one or more
Grievance Redressal Committee for the resolution of disputes arising out of individual
grievances.
A. twenty or more
B. thirty or more
C. forty or more
D. fifty or more
2. The Grievance Redressal Committee shall consist of _______ number of members from the
employer and the workmen.
A. Equal
B. More
C. Less
3. The chairperson of the Grievance Redressal Committee shall be selected from the employer
and from among the workmen alternatively on rotation basis ____ year.
A. Twice a
B. Every
C. Thrice a
4. The total number of members of the Grievance Redressal Committee shall not exceed more
than _______.
A. Three
B. Four
C. Five
D. Six
5. The Grievance Redressal Committee may complete its proceedings within __ days on receipt
of a written application by or on behalf of the aggrieved party.
A. 20
B. 40
C. 30
D. 50
6. The workman who is aggrieved of the decision of the Grievance Redressal Committee may
prefer an appeal to the employer against the decision of Grievance Redressal Committee and

Notes
the employer shall, within __ month from the date of receipt of such appeal, dispose off the
same and send a copy of his decision to the workman concerned.
A. Two
B. One
C. Three
D. Four
7. The employer in relation to every industrial establishment in which ______ workmen are
employed or have been employed on any day in the preceding twelve months, shall provide
for, in accordance with the rules made in that behalf under this Act, a Grievance Settlement
Authority for the settlement of industrial disputes connected with an individual workman
employed in the establishment.
A. Twenty or more
B. Thirty or more
C. Forty or more
D. fifty or more
8. Total members of such a committee to be restricted at ____ (with an equal number of members
from the employer and workmen) while the position of the chairperson to be rotated
alternatively on yearly basis between the committee members.
A. Two
B. One
C. Three
D. Six
9. Any proceedings of Grievance Redressal Committee to be completed by the committee within

a month.
A. Week
B. Month
C. Quarter
D. Year
10. Conciliation Officer is basically a mediator appointed by the appropriate government, i.e.
either central or state, usually an officer of the rank of assistant labor commissioner in every
district.
A. True
B. False
11. Duties of the board are similar to the conciliation officer.

A. True
B. False
12. An arbitrator is an independent person appointed by both parties to dispute, usually well in
advance for amicable settlement of disputes.
A. Conciliator
B. Arbitrator
C. Both of the above

Notes
Unit 08: Grievances
13. Schedule __ and Schedule __ are the subject matters of industrial tribunals. Its presiding
officer is equivalent to a high court judge.
A. I, II
B. I, III
C. II,III
14. There are mainly five types of grievances.

A. True
B. False
15. When an employee is not aware of the reasons for his dissatisfaction, then he has a __________
grievance.
A. Disguised
B. Factual
C. Imaginary

l. A 2. A 3. B 4. D 5. C
6. B 7. D 8. D 9. B 10. A
11. A 12. B 13. C 14. B 15. A
Review Questions
1) Are Dissatisfaction, Complaint and Grievance same?
2) What do you understand by grievance? Enlist its features.
3) What can be the factors that arise grievances in any organization?
4) What can be the probable outcomes of grievances in any organization?
5) In detail discuss Grievance Redressal Machinery.
Further Readings

Notes
Dr. Shikha Goyal, Lovely Professional University Unit 09: Discipline
Unit 09: Discipline

CONTENTS
Objectives
Introduction
9.1 Meaning of Discipline
9.2 Aspects of Discipline
9.3 Principles for Maintenance of Discipline
9.4 Types of Employee Discipline
9.5 What are the Common Issues Related to Employee Discipline?
9.6 Disciplinary Procedure
9.7 Indiscipline
9.8 Causes of Indiscipline
9.9 Disciplinary Action levels
9.10 Domestic Enquiry: Meaning
Summary
Keywords
Self Assessment
Review Questions
Further Readings
Objectives
• Learn about the concept of discipline.

• Learn about the types of discipline.
• Learn about the significance of discipline.
• Learn how to manage discipline in organization.
• Understand the causes of indiscipline.
• Understand the types of indiscipline.
• Understand the disciplinary action levels.
• Learn about the concept of Domestic Enquiry
Introduction
In any organization, when employees from different regions, culture and age group start working
together then they make a team. Out of them, some employees comes under the category of
disciplined employees who believe in compliance of organizational policies, rules and regulations.
On the other hand, there are few employees who have some behavioural issues related to discipline
in an organization. They are the indiscipline creators and employer have to tackle such employees.
In legal terms, policies have been framed to control indiscipline in any organization.

Notes
International Relation and Labour Law
9.1 Meaning of Discipline

Discipline is working, co-operating, and behaving in a normal and orderly way, as any responsible
person would expect an employee to do.
According to Weber’s Dictionary:

1. It is the training that corrects, moulds, strengthens, or perfects individual behavior.
2. It is control gained by enforcing obedience.
3. It is punishment or chastisement.
According to Bremblett:
• Discipline does not mean a strict and technical observance of rigid rules and regulations.
• It simply means working, co-operating and behaving in a normal and orderly way, as any
responsible person would expect an employee to do.
In simple terms, discipline is employee self-control which prompts him to willingly cooperate with
the organizational standards, rules, objectives, etc.
9.2 Aspects of Discipline

There are two aspects of discipline:
1. Positive Discipline
2. Negative Discipline
1.Positive Discipline:
• Employees believe in and support discipline and adhere to the rules, regulations, and
desired standards of behavior.
• Discipline takes the form of positive support and reinforcement for approved actions.
• Its aim is to help the individual in moulding his behavior and developing him in a corrective
and supportive manner.
• It is called positive approach or constructive discipline or self-discipline.
Positive discipline takes place whenever the organizational climate is marked by aspects such as
i. payment of adequate remuneration and incentives.
ii. Appropriate avenues for career advancement.
iii. Appreciation of poor performance and reinforcement of approved personnel behaviour or
exercise self-control.
2.Negative Discipline:
• Employees sometimes do not believe in and support discipline.
• They do not adhere to rules, regulations, and desired standard of behaviour.
• Disciplinary programme forces and constraint the employees to obey orders and function
in accordance with set rules and regulations through warnings, penalties, and other forms
of punishment.
• This approach to discipline is called negative approach, corrective approach, or punitive
approach.
• This approach is also called autocratic approach as the subordinates are given no role in
formulating the rules and they are not told why they are punished.
• Negative or enforced discipline connotes that personnel are forced to observe rules and
regulations on account of fear or reprimand, fine, demotion or transfer.
• But these are helpful in extracting just minimum standard of work from the employees since
they work on account of fear they've got.

Notes
Unit 09: Discipline
• In fact, punishment, penalties, emotions and transfers provide or establish a climate which
demotivate its employees.
Objectives of Discipline
The objectives of discipline are:
1. To obtain a willing acceptance of the rules and regulations or procedures of an organization
so that organizational goals may be attained.
2. To develop among the employee a spirit of tolerance and a desire to make adjustments.
3. To increase the working efficiency or morale of the employees so that their productivity is
stepped up and the cost of production brought down and the quality of production im-
proved.
4. To give direction or responsibility.
5. To create an atmosphere of respect for the human personality or human relations.
9.3 Principles for Maintenance of Discipline

The principles of discipline are as under:
1. All the rules should be formed in cooperation or collaboration with the representatives of
employees.
2. All the rules should be appraised at frequent or regular intervals to ensure that they are and
continue to be, appropriate, sensible and useful.
3. Rules should be uniformly enforced if they are to be effective. They must be applied without
exception.
4. Penalties for any violation of any rule should be clearly stated in advance.
5. Extreme caution should be exercised to ensure that infringements are not encouraged.
6. If violations of a particular rule are fairly frequent; the circumstances surrounding them
should be carefully investigated and studied in order to discover the cause or causes of such
violation.
7. Define or precise provisions for appeal or review of all disciplinary actions should be
expressly mentioned in the employee’s handbook.
Significance of Employee Discipline

• Orderly behavior is necessary for achieving the organization’s objective.
• In the absence of discipline, no enterprise would prosper.
Did you Know?

How can you define whether a discipline is good or bad?
Answer:
• Discipline is said to be good when employees follow willingly the instructions of
their supervisors and the various rules of the company.
• Discipline is bad when employees either follow rules and regulations
unwillingly or actually disobey them.
From the Point of View of an Individual:

(i) Discipline provides self-safety to an individual.

Notes
(ii) It enhances an individual’s progress.

(iii) An individual needs it for his own satisfaction
From the Point of View of a Work Group:

(i) Discipline ensures better teamwork and cohesive.
(ii) A disciplined atmosphere is the key to the progress of the group.
(iii) Discipline ensures higher productivity.
(iv) Discipline enhances morale and motivation of employees.
From the Point of View of an Organization:

(i) Discipline ensures higher productivity and quality.
(ii) Discipline helps an organization in attaining maximum profit.
(iii) It is essential better all-round benefits.
(iv) It helps in keeping a check on wastage and costs.
(v) It helps in developing a sense of belonging.
9.4 Types of Employee Discipline

There are mainly 5 types of Employee Discipline.
• Positive Discipline,
• Negative Discipline,
• Self-Discipline and Control,
• Progressive Discipline and
• The Red-Hot Stove Rule
1. Positive Discipline:
Positive discipline in a business is an atmosphere of mutual trust and common purpose in which all
employees understand the company rules as well as the objectives and do everything possible to
support them.
Discipline takes the form of positive support and reinforcement for approved actions and its aim is
to help the individual in moulding his behavior and developing him in a corrective and supportive
manner. Once the standards and rules are known by all employees, discipline can be enforced
equitably and fairly.
Guidelines for establishing a climate of positive discipline.

i. There must be rules and standards, which are communicated clearly and administered fairly.
ii. Rules and standards must be reasonable and should be communicated so that they are known and
understood by all employees. An employee manual can help with communicating rules.
iii. While a rule or a standard is in force, employees are expected to adhere to it.
iv. Even though rules exist, people should know that if a personal problem or a unique situation
makes the rule exceptionally harsh, the rule may be modified, or an exception be granted.
v. There should no favorites and privileges be granted only when they can also be granted to other
employees in similar circumstances.
vi. Employees must be aware that they can and should voice dissatisfaction with any rules or
standards they consider unreasonable as well as with working conditions they feel hazardous,
discomforting or burdensome.
vii. Employees should understand the consequences of breaking a rule without permission.
viii. Employees should be consulted when rules are set.

Notes
Unit 09: Discipline
2. Negative Discipline:
Negative discipline is interpreted as a sort of check or restraint on the freedom of a person. Discipline
is used to refer to the act of imposing penalties for wrong behaviour. If employees fail to observe
rules, they are punished. The fear of punishment puts the employee back on track.
3. Self-Discipline and Control:

Behavioural scientists view discipline as self-control to meet organizational objectives. Megginson
clarified the term thus- “By self-discipline we mean the training that corrects moulds and strengthens.
It refers to one’s efforts at self-control for the purpose of adjusting oneself to certain needs and
demands.
This form of discipline is raised on two psychological principles:
• First, punishment seldom produces the desired results. Often, it produces undesirable
results.
• Second, a self-respecting person tends to be a better worker than one who is not”.
4. Progressive Discipline:
The concept of progressive discipline states that penalties must be appropriate to the violation.
If inappropriate behavior is minor in nature and has not previously occurred, an oral warning
may be sufficient. If the violation requires a written warning, it must be done according to a
procedure. After written warnings, if the conduct of the employee is still not along desired lines,
serious punitive steps could be initiated.
5. The Red-Hot Stove Rule:

Without the continual support of the subordinates, no manager can get things done. But
disciplinary action against a delinquent employee is painful and generates resentment on his
part. Hence, a question arises as to how to impose discipline without generating resentment?
This is possible through what Douglas McGregor called the “Red Hot Stove Rule”, which draws
an analogy between touching a hot stove and undergoing discipline.
Consequences of disciplinary action:

Disciplinary action should have the following consequences:
(i) Burns Immediately:
If disciplinary action is to be taken, it must occur immediately so the individual will understand the
reason for it. With the passage of time, people have the tendency to convince themselves that they
are not at fault.
(ii) Provides Warning:

It is very important to provide advance warning that punishment will follow unacceptable
behaviour. As you move closer to hot stove, you are warned by its heat that you will be burned if
you touch it.
(iii) Gives Consistent Punishment:

Disciplinary action should also be consistent in that everyone who performs the same act will be
punished accordingly. As with a hot stove, each person who touches it is burned the same way.
(iv) Burns Impersonally:

Disciplinary action should be impersonal. There are no favourites when this approach is followed.
What is the major outcome of having discipline in organization?

Employee discipline enables a positive and healthy work environment and ensures smooth
functioning of the organization.
Who is responsible for ensuring employee discipline?

The primary responsibilities of HR to evolve relevant disciplinary policies and ensure their
adherence.

Notes
9.5 What are the Common Issues Related to Employee Discipline?

The common issues related to employee discipline are:
I. Compliance issues:
1. Providing wrong information or hiding factual personal data during recruitment

2. Non-compliance with the terms of employment contract, for example an employee takes up
additional job while still working in your organization.
3. Violation of company policies, rules & regulations.
4. Non-adherence to workplace safety instructions
5. Indulgence in theft and fraud in the company
6. Absconding without resignation
7. False medical, travel and expense claims
II. Behavioral issues:

1. Exhibiting misconduct towards manager, leadership and co-workers
2. Reporting late to work or team meetings
3. Frequent leave without intimation and approvals
4. Indulging in political activities and anti-social activities
5. Not completing work assignments on time or repeatedly not meeting goals
6. Refusal to attend training programs
7. Not marking attendance
8. Wasting time on social media and other web-sites that are not related to work
9. Bullying other colleagues
9.6 Disciplinary Procedure

Before starting the process of discipline, it is essential to hold a preliminary inquiry to know if a prima
facie case of indiscipline and misconduct exist.
After this, the following steps should be followed:
1. Issue of charge sheet
2. Consideration of Explanation
3. Suspension pending Enquiry
4. Holding of Enquiry
5. Order of punishment
I. Issue of Charge Sheet:

Once the prima facie case of misconduct is established, the management should proceed to issue a
charge sheet to the employee. Charge sheet is merely a notice of the charge and provides the
employee an opportunity to explain his conduct.
Therefore, charge sheet is generally known as a show cause notice. In the charge sheet, each charge
should be clearly specified. There should be a separate charge for each allegation and charge should
not relate to any matter, which has already been decided upon.
II. Consideration of Explanation:

Notes
Unit 09: Discipline
On getting the answer for the charge sheet served, the explanation furnished should be considered
and if it is satisfactory, no disciplinary action needs to be taken. On the contrary when the
management is not satisfied with the employee’s explanation, it can proceed with full-fledged
enquiry.
III. Suspension pending Enquiry:

Passing of suspension order is of an administrative nature and suspension is not a punishment. Its
purpose is to only forbid the delinquent to work in the office and it is in the exclusive domain of the
employer to revoke the suspension order. In case the charge is grave that is serious, a suspension
order may be served on the employee along with the charge sheet.
According to the Industrial Employment (Standing Order) Act, 1946:

The suspended worker is to be paid a subsistence allowance equal to one-half of his wages for the
first ninety days of suspension and three-fourths of wages for the remaining period of suspension if
the delay in the completion of disciplinary proceedings is not due to the worker’s conduct.
When can court to interfere in the order of suspension of an employee?

The scope of interference by the Court with the order of suspension has been examined
by the Court in a large number of cases.
• wherein it has been observed that even if a criminal trial or enquiry takes a long-time,
• it is ordinarily not open to the court to interfere in case of suspension as it is in the exclusive
domain of the competent authority who can always review its order of suspension being an
inherent power conferred upon them by the provisions of Article 21 of the General Clauses
Act, 1897
• and while exercising such a power, the authority can consider the case of an employee for
revoking the suspension order, if satisfied that the criminal case pending would be
concluded after an unusual delay for no fault of the employee concerned.
IV. Holding of Enquiry:

An enquiry officer should be appointed to hold the enquiry and a notice to this effect should be given
to the concerned worker. Principle of natural justice must be followed. The worker should not be
denied the chance of explaining himself. The enquiry officer should give sufficient notice to the
worker so that he may prepare to represent his case and make submission in his defence.
The enquiry officer should proceed in a proper manner and examine witnesses. Fair opportunity
should be given to the worker to cross-examine the management witnesses.
Principle of Natural Justice

• Tell the person what he has done.
• Hear Him
• Give Him a Chance to defend himself.
• On the conclusion of the enquiry, the enquiry officer should record his findings and the
reasons thereof.
• He should refrain from recommending punishment and leave it to the decision of the
appropriate authority.
V. Order of Punishment:
Disciplinary action can be taken when the misconduct of the employee is proved. While deciding
the nature of disciplinary action, the employee’s previous record, precedents, effects of the action on
other employees, etc, have to be considered.
When the employee feels that the enquiry conducted was not proper and the action taken unjustified,
he must be given a chance to make appeal.

Notes
9.7 Indiscipline
Indiscipline means disorderliness, insubordination and not following the rules and regulations of an
organization.
Types of Indiscipline:
1. Direct Types of Indiscipline in the Workplace
2. Indirect Types of Indiscipline in the Workplace
3. Unwitting Indiscipline in the Workplace
4. Approved Indiscipline in the Workplace
1. Direct Types of Indiscipline in the Workplace:

Indiscipline in the workplace can be direct and noticeable, causing discomfort to managers and
co-workers because of its sometimes confrontational or aggressive nature.
Example
• Employees may make loud, disparaging remarks about supervisors, or saunter into work
half an hour late.
• Using profane language, behaving unprofessionally with customers or blatantly defying
orders from employers.
Impact of Direct Types of Indiscipline

• These behaviors set a bad example to other workers, undermine the authority of supervisors
and create a sometimes-scary work environment.
• Don’t be drawn into confrontations with aggressive employees; document behaviors and
then dismiss these problematic workers if appropriate.
• Chances are, you don’t want them around.
2. Indirect Types of Indiscipline in the Workplace:

Indiscipline in the workplace can also be more indirect and less noticeable but still problematic.
Example:
• Working sluggishly to avoid taking on new assignments,
• Encouraging coworker misconduct with laughter, or
• Agreeing with constructive criticism but then not applying suggestions to work quality or
productivity.
• Indirect discipline can be tricky in that it’s harder to pinpoint and managers may be
reluctant to intervene for seemingly small problems.
• These can grow into bigger problems, however. Managers can avoid ungrounded
accusations by first asking employees to explain behaviors.
3. Unwitting Indiscipline in the Workplace:

Workplace indiscipline can also be unwitting in that employees don’t know or haven’t been
informed of expectations and professional standards.
Example:
Employees routinely take personal calls or update social networking accounts on company time
because other workers appear to be doing the same thing.
• Unless your company handbook prohibits such activities, it may not be clear to workers that
you view this as misconduct.

Notes
Unit 09: Discipline
• Provide employees with detailed handbooks outlining discipline expectations, including

consequences for infractions.
• Employee training and workshops can also emphasize expectations.
4. Approved Indiscipline in the Workplace:

Another type of workplace indiscipline includes unwanted activities and behaviours that aren’t
commented upon by managers or supervisors, sending mixed messages to employees about
expectations.
For Example:
The company handbook clearly states that profane language and discriminatory comments are
prohibited in the workplace.
But managers may look the other way or even participate in conversations grounded in foul
language, letting employees know that this type of misconduct is acceptable in the workplace despite
stated company rules.
9.8 Causes of Indiscipline

The important causes of indiscipline are analyzed under three heads:
1. Organizational Factors
2. Individual Factors
3. Environmental Factors.
I. Organizational Factors:
• Where the organization, while hiring the employees, fail to assess the traits of individuals
like attitude, obedience, tolerance and inquisitiveness, it may end up hiring employees who
challenge any decision made by the management. This may breed indiscipline.
• Lack of code of conduct for employees has potential to disorient them thereby sowing seeds
of indiscipline.
• Where an employee hired for a job for which he has neither aptitude nor attitude, he is sure
to develop ill-feelings. He may find the job uninteresting and do everything to evade
responsibility.
• Ineffective leadership characterized by authoritarianism and incompetency, and distrustful
relations with employees fuel indiscipline among the employees.
• Indiscriminate use of penal provisions triggers reactionary group indiscipline.
• Favoritism and nepotism practiced by supervisors vitiate discipline.
• Divisive policies pursued by management and instituting unofficial spy network spoils the
work atmosphere thereby engendering indiscipline.
• Biased performance evaluation on considerations of caste, creed, colour, gender, religion
and region promotes ill-feeling and a sense of injustice among employees which culminate
in indiscipline.
• Absence of grievance redressal mechanism frustrates employees thereby breeding
indiscipline among them.
II. Individual Factors:

Individuals with non-conformist values tend to engage in indiscipline behavior. Every individual
perceives reward and punishment differently and react to it accordingly. When the reward is not
commensurate with his expectation, he may feel frustrated and indulge in indiscipline.

Notes
Individuals differ in work ethics. Those with high ethical values tend to be committed and involved
in the jobs while those with low ethical values show alienation to their jobs and exhibit negative
behavior.
III.Environmental Factors:
Since an organization is also one of the members of the society, discipline observed by the society
manifests in organizations. Indiscipline prevailing in family, educational institutions, political
system, religious institutions, breakdown of social control mechanism, etc., casts its ugly shadow
on the organizational climate.
9.9 Disciplinary Action levels

There are various disciplinary actions as per level of indiscipline and generally they follow a typical
sequence of steps as per seriousness – verbal warning, written warning, suspension, and dismissal.
1. Written verbal warning:

The mildest form of discipline is the written verbal warning. It is a temporary record of a reprimand
which is then placed in the manager’s file of the employee. This warning remains in the hands of the
manager.
It is not forwarded to the personnel department for inclusion in the employee’s personnel file. The
written verbal reprimand is best achieved if completed in a private and informal environment. The
manager should begin by clearly informing the em-ployee of the rule that has been violated and the
problem that this infraction has caused.
If the written verbal warning is effective, further disciplinary action can be avoided. If the employee
fails to improve, the managers need to consider more severe action.
2. Written warning:
The second step in the progressive discipline process is the written warning. In effect, it is the first
formal stage of the disciplinary procedure. This is so because the written warning becomes part of
the employee’s official personnel file.
This is achieved by not only giving the warning to the employee but sending a copy to the personnel
department to be inserted in the employee’s permanent record.
3. Suspension:
A suspension or lay-off would be the next disciplinary step, usually taken if the prior steps have been
implemented without the desired outcome. If the infraction is of a serious nature, suspension is
ordered without any prior verbal or written warning.
A suspension may be for one day or several weeks; disciplinary lay offs in excess of a month are rare.
A short lay-off, without pay, is potentially a rude awakening to problem-employees. It may convince
them that management is serious and force them into accepting responsibility for following the
organisation’s rules.
4. Demotion:
If suspension has not been effective and management wants to avoid dismissing the problem-
employee, demotion may be an alternative. Demotion is a disciplinary action whereby an individual
is sent back to a lower position in the company.
However, it tends to demoralize not only the employee but the co-workers (peers) as well. Moreover,
it is not a temporary action. It is a constant punishment to the demoted employee and hence has
broad motivational implication.
5. Paycut:
Another alternative, also rarely applied in practice, is cutting the problem-employee’s pay. The pay
cut usually has a demoralizing effect on the employee and is suggested as a rational action by
management if the only other alternative is dismissal.
6. Dismissal:

Notes
Unit 09: Discipline
Management’s ultimate disciplinary punishment is dismissing the problem employee. Dismissal

should be used only for the most serious offences. Yet it may be the only feasible alternative when an
employee’s behaviour is so bad as to seriously interfere with a departments or the whole
organisation’s operation.
9.10 Domestic Enquiry: Meaning

Domestic enquiry is conducted for offences against the establishment for misconduct punishable
under the Standing Orders/Companies' Rules and Regulations, etc., applicable to the establishment
where the worker is employed.
Domestic enquiry is conducted in terms of what is called `Natural Justice". The enquiry officer while
examining the evidence and pronouncing on the guilt is not supposed to award penalty which is left
to a superior officer who is the employer or the appointing authority.
Domestic enquiry is not a legal requirement under the Industrial Disputes Act or other substantive
laws such as the Factories Act, Mines Act, etc. but has been provided under the standing orders to
the framed under the Industrial Employment (Standing Orders) Act.
Dismissal or any major notice against an employee without holding a fair and just domestic enquiry
amounts to violation of principles of natural justice and is frowned upon by the Labor
Courts/Industrial Tribunals; so much so, dismissal without holding regular enquiry is deemed an
illegality.
Principles of Domestic Enquiry

The principles of domestic enquiry are as under:
1. Rule of Natural Justice must be observed.
2. The delinquent is entitled to a just hearing.
3. He can call for his own evidence.
4. Cross-examine any witness called by the prosecution.
5. Where rules are laid down, the procedure of such rules must be followed.
6. Disclose to the employee concerned, the documents of records and offer him an opportunity to
deal with it.
7. Do not examine any witness in the absence of the employee.
8. The enquiry officer is at liberty to disallow any evidence after recording the reasons in writing.
Process of Domestic Enquiry

There are mainly four steps in the process of domestic enquiry.
1. Preliminary Enquiry
2. Framing of Charges
3. Services of Charge-sheet
4. Reply to the Charge-sheet.
1. Preliminary Enquiry:
After a report about the misconduct committed by the delinquent\workman is received by the
employer, he is required to decide whether a prima facie case exists for a formal enquiry.
For this purpose, he may hold a preliminary enquiry of an informal nature. Such an enquiry is purely
informal and does not call for the observance of any specific rules of natural justice and can be held
ex-parte i.e., the workman need not be questioned or otherwise asked to take part in it.
Statements taken in the preliminary enquiry cannot be used as evidence in the formal inquiry. In fact
the preliminary enquiry is intended only for the disciplinary authority to satisfy himself whether

Notes
departmental action is called for or not. Hence, there may not be any formal report about the
preliminary enquiry and no reference is to be made to it in the subsequent enquiry.
2. Framing of Charges:
This is easily the most important and perhaps, the most crucial stage in the entire proceedings,
because the success of any disciplinary case depends primarily on the soundness of the charges. The
charges are, in turn, based on imputations so that if the imputations or allegations are based on solid
evidence, the chances of successful conclusion of the domestic enquiry are gratefully enhanced.
The chargesheet should contain the following, in clear, simple and cogent language.
1. The alleged facts and circumstances (with date, time, place and words, if relevant) in specific terms
with surrounding accentuating factors (if any alleged), which if proved would constitute
"misconduct".
2. Previous record (punishment including) if relevant to the facts and circumstances alleged or if they
aggravate or accentuate the charge or if the same is going to be considered by punishing authority at
the time of considering punishment (previous record for period beyond certain time becomes
meaningless if there is specific provision in standing orders or in the circumstances of the case).
3. Charges levelled against in specific terms (to be quoted from the Standing Orders, if applicable,
otherwise in language borrowed from industrial law), of which the charge sheeted workman would
be guilty, if the facts and circumstances alleged against him be proved.
4. Proposed punishment that may ensure if guilt be established.
3. Services of Charge-sheet:
Once chargesheet is prepared, it is required to be served on the workman concerned and proof of its
service obtained. If the workman is present, service may be affected by personal service, obtaining
acknowledgment of its receipt either on a copy of the chargesheet or in a dak book or on a separate
piece of paper.
At the time of service of chargesheet it is advisable (necessary) to have at least two witnesses, so that
in case of refusal to accept chargesheet, the fact is recorded by the person serving the chargesheet
and signature of witnesses obtained.
4.Reply to the Charge-sheet:

After the chargesheet is received by the workman he may:
i) ask for further details or for inspection of documents referred to in chargesheet
ii) accept the accusations, plead guilty of the -charges and tender apologies iii) may ask for time to
submit explanation
iv) may explain away the accusation and deny the charges
v) may not submit any explanation
Summary
 Discipline simply means working, co-operating, and behaving in a normal and orderly way, as
any responsible person would expect an employee to do.
 Domestic enquiry is conducted for offences against the establishment for misconduct
punishable under the Standing Orders/Companies' Rules and Regulations, etc., applicable to
the establishment where the worker is employed.
 There are various disciplinary actions as per level of indiscipline and generally they follow a
typical sequence of steps as per seriousness – verbal warning, written warning, suspension, and
dismissal.
 Indiscipline means disorderliness, insubordination and not following the rules and regulations
of an organization.

Notes
Unit 09: Discipline
Keywords
 Discipline
 Domestic Enquiry
 Disciplinary Action
 Indiscipline
Self Assessment
Q1. Which cannot be considered discipline from the point of view of an individual?
A. Discipline provides self-safety to an individual.

B. Discipline enhances an individuas Progress.
C. An individual needs it for his own satisfaction.
D. Discipline does not ensure higher productivity.
Q2. How many types of employee discipline exist?
A. Four
B. Five
C. Six
D. Seven
Q3. Which type of discipline is used to refer to the act of imposing penalties for wrong behavior?
A. Positive Discipline
B. Self-Discipline
C. Negative Discipline
D. Progressive Discipline
Q4. Which type of discipline refers to one’s efforts at self-control for the purpose of adjusting
oneself to certain needs and demands?
A. Positive Discipline
B. Self-Discipline
C. Negative Discipline
D. Progressive Discipline
Q5. ________________ discipline connotes that personnel are forced to observe rules and
regulations on account of fear or reprimand , fine, demotion or transfer.
A. Negative Discipline
B. Positive Discipline
C. Self-discipline
Q6. Which cannot be included under behavioral issues related to employee discipline?
A. Frequent leave without intimation and approvals

B. Indulging in political activities and anti-social activities

Notes
C. Exhibiting misconduct towards manager, leadership and co-workers

D. Providing wrong information or hiding factual personal data during recruitment
Q7. Which cannot be included under compliance issues related to employee discipline?
A. Violation of company policies, rules & regulations

B. Absconding without resignation
C. Non-adherence to workplace safety instructions
D. Reporting late to work or team meetings
Q8. Is it necessary to hold a preliminary inquiry before starting the process of discipline to know
if a prima facie case of indiscipline and misconduct exist?
A. True
B. b. False
Q9. How many steps are in holding disciplinary procedure?
A. Five
B. Four
C. Six
D. Seven
Q10. Which is generally known as show cause notice under disciplinary procedure?
A. Charge sheet
B. Order of punishment
C. Holding of enquiry
D. Suspension
Q11. Which cannot be included as a type of indiscipline?
A. Direct Types of Indiscipline in the Workplace

B. Indirect Types of Indiscipline in the Workplace
C. Unwitting Indiscipline in the Workplace
D. Disapproved Indiscipline in the Workplace
Q12. “Employees may make loud, disparaging remarks about supervisors, or saunter into work
half an hour late.” This is ____________ type of indiscipline.
A. Direct Types Of Indiscipline In The Workplace

B. Indirect Types Of Indiscipline In The Workplace
C. Unwitting Indiscipline In The Workplace
D. Disapproved Indiscipline In The Workplace
Q13. “Encouraging coworker misconduct with laughter.” This is ____________ type of

indiscipline.


Notes
Unit 09: Discipline

Q14. “Employees routinely take personal calls or update social networking accounts on company
time because other workers appear to be doing the same thing” is an example of ____________
indiscipline.

Q15. The causes of indiscipline can be analyzed under which heads?
A. Organizational Factors
B. Individual Factors
C. Environmental Factors.
D. All of the above

l. D 2. B 3. C 4. B 5. A
6. D 7. D 8. A 9. A 10. A
11. D 12. A 13. B 14. C 15. D
Review Questions
Q1. What do you mean by domestic enquiry? What are the principles of domestic enquiry?
Q2. What are the different causes of indiscipline?
Q3. What are the different levels of disciplinary action levels?
Q4. What are the different steps of disciplinary procedure?
Q5. What do you mean by discipline? What are the common issues related to employee discipline?
Further Readings
1. I.S. Ghosh, Trade Unionism in the Underdeveloped Countries.
2. V.V. Giri, Labor Problems in India.
3. Pigou A.C., Economics of Welfare.
4. Mamoria C.B., Dynamics of Industrial Relation in India.

Notes

Notes
Jaskiran Kaur, Lovely Professional University Unit 10: Worker Participation in Management
Unit 10: Worker Participation in Management

CONTENTS
Objectives
Introduction
10.1 Concept of Worker Participation
10.2 Forms of Workers’ Participation
10.3 Importance of Worker’s Participation
10.4 Levels of Participation
10.5 Workers’ Participation in Management Before Independence
Summary
Keywords
Self Assessment
Review Questions
Further Readings
Objectives
After this unit, you will be able to
• understand the concept of Workers’ Participation in Management.
• learn about the need of Workers’ Participation in Management.
• learn about the objectives of Workers’ Participation in Management.
• learn about the Worker’s participation in Management in India.
• learn about the role of government in Worker’s Participation in Management.
• learn about the forms of Workers’ Participation in Management.
• learn about the levels of Workers’ Participation in Management.
Introduction
Worker participation is a mental and emotional involvement of a person in a group situation which
encourages him to contribute to goals and share responsibilities with them.
Why should an employer encourage Workers’ participation in management?
To build his employees into a team which works towards the realization of a common objective.
10.1 Concept of Worker Participation

 The participation enhances employees’ ability to influence, decision making at different tiers
of the organizational hierarchy with concomitant assumption of responsibility.
 The participation has to be at different levels of management :
i.at the shop level

Notes
ii.at the department level and

iii.at the board level
 The participation incorporates the willing acceptance of responsibilities by the body of
workers . As they become a party to decision making , they have to commit themselves to
the implementation of the decisions made.
 The participation is conducted through the mechanism of forums and practices which
provide for the association of workers’ representatives.
 The broad goal of participation is to change basically the organizational aspect of production
and transfer the management function entirely to the workers so that, they can experience
“auto management” structure.
Do you agree?
“ Employees are no longer servants but are equal partners with their employers in their efforts to
attain the goals of the enterprise.”
Need for worker’s participation

1. The increased use of technology in industry has necessitated the growing corporation of
workers because of the complex operations of production
2. The changed view that employees are no longer servants but are equal partners with their
employers in their efforts to attain the goals of the enterprise
3. The growth of trade unions which safeguard the interests of workers and protect them
against possible exploitation by their employers.
4. The growing interest of the government in the development of industries and the welfare
of workers
5. The need for increased and uninterrupted production which can be achieved only when
there is a contented labour class .
Objectives of Workers’ participation in Management

• An Instrument for improving the efficiency of enterprises and establishing harmonious
industrial relations.
• A device for developing social education for the purpose of promoting solidarity among the
working community and for tapping latent human resources.
• A means for attaining industrial peace and harmony which lead to higher productivity and
increased production.
• A humanitarian act, giving the worker an acceptable status within the working community
and a sense of purpose in his activity.
• An ideological point of view to develop self-management in industry.
10.2 Forms of Workers’ Participation

1. Collective Bargaining:
 Collective bargaining is done periodically or on a continuing basis between
management and workers’ representatives on issues over which the interests of both
parties are competitive, such as wage rates, bonus rates, working hours and number of
holidays.
 The agreements arrived at are normally binding on both parties.

Notes
 The system of collective bargaining depends on the principle of balance of power,

managements and the unions representing the workers are regarded as two separate
power blocks that jointly negotiate the varied terms of employment with each other.
2. Works Committees:
 Under the Industrial Disputes Act 1947, every establishment employing 100 or more
workers is required to constitute a works committee.
 Such a committee consists of equal number of representatives of employer and workers.
 The main purpose of works committees is to provide measures for securing and
preserving amity and good relations between the employer and employees.
3. Joint Management Councils:

 These are joint bodies consisting of the representatives of management and employees.
 The functions of JMCs may range from decision-making on some issues to simply
advising the management as consultative bodies.
 The decisions of these councils are advisory in nature through employers often
implement the unanimous decisions of them.
 Working conditions, accident, prevention, indiscipline, absenteeism, training are the
important matters before joint management councils.
4. Board Level:
 The basic function of the board is to ensure the growth of enterprise capital.
 If there is workers representative in the board, the capital formation and growth will
be of secondary importance to him.
 His pre-occupation will be one of the negotiating workers special interest with the other
members of the board.
 In India in Port Trust, Dock labour Boards etc, have workers representatives.
 His pre-occupation will be one of the negotiating workers special interest with the other
members of the board.
 In India in Port Trust, Dock labour Boards etc, have workers representatives.
 The effectiveness of workers representatives at the Board depends upon his ability to
participate in decision-making and his knowledge of the company affairs.
5. Workers’ Ownership in Enterprise

 This method refers to complete control of management by workers through an elected
Board and Workers’ Council.
 This system prevails in Yugoslavia.
 In this system two different sets of persons perform two district managerial and
operative functions.
 Though workers have the option of influencing the decisions taken at the top level, yet,
in actual practice, the Board and the top management team assume independent role
in taking major policy decisions for the enterprises.
6. Suggestions Scheme:
 Under this method, workers’ are invited and encouraged to offer suggestions for
improving the working of the enterprise.

Notes
 A suggestion box is installed in the organization.

 Workers can write their suggestions and put into the box.
 Periodically all the suggestions and put into the box.
 Periodically all the suggestions are scrutined by the suggestion committee and good
suggestions are accepted for implementation and suitable rewards are given to the
concerned workers.
10.3 Importance of Worker’s Participation

 It will facilitate better understanding and mutual trust between employer and workers.
 Through participation, workers learn the problems of the industry and they can better
understand their role. Participation results into better employee satisfaction and motivation.
 It helps to reduce industrial disputes and promotes peace in industry.
 People in general express resistance to change. It is due to fear of economic and social loss.
But workers’ participation in management is a good to convince people about the need for
change and get their acceptance for change.
 Participation of workers in management helps to promote industrial democracy, which is
necessary for political democracy.
 Participation in decision making helps the workers to think and take initiative. Worker's talent
and ability can be identified. Worker’s urge for self-expression is satisfied.
10.4 Levels of Participation

1. Informative Participation:
This refers to the management’s sharing of information with the workers on matters related to
workers such as balance sheet, production, and the financial health of the company.
2. Consultative participation:
In this type of participation, workers can give their views on the matters related to them, but
acceptance or non-acceptance of their opinion depends on the employers. Here, the role of the
employee is limited to giving opinion only.
3. Associative participation:
This is an improved form of consultative participation. Here, it is considered that this is the moral
duty of the employer to acknowledge and accept and implement the unanimous decisions of
employees.
4. Administrative participation:
In this type of participation, the decision is already taken and implemented by the worker. Here
the degree of sharing power and responsibility by the worker is more as compared to other levels
of participation.
5. Decisive Participation:
Here decisions on matters like production, employee welfare, etc. are taken by the worker and
management jointly after a discussion.
10.5 Workers’ Participation in Management Before Independence

The workers’ participation in management is not a novel and imported idea from outside.

Notes
It can be dated as far back as 1920 when Mahatma Gandhi suggested participation of workers in
management on the ground that workers contributed labor and brains while shareholders
contributed money to the enterprise and that both should, therefore, share in its property.
He said that there should be a perfect relationship of friendship and cooperation among them.
For the unions, he said that the aim should be to raise the morale and intellectual height of labour
and, thus, by sheer merit, make labour master of the means of production instead of the slave that it
is.
In 1920, the workers and the employers in Ahmedabad Textile Industry agreed to settle their disputes
through joint discussions and consultations.
Therefore, the Ahmedabad Agreement may be regarded as a milestone in the history of joint
consultation i.e., participative management in India.
Following this, some works committees were also set up in the Government Printing Presses and
Railways.
During the same period, such committees were also set up in the Tata Iron and Steel Company,
Jamshedpur.
Since then, there is no looking back in this direction.
While supporting the need for works committees, the Royal Commission on Labor suggested that to
promote industrial harmony and to avoid misunderstanding and settle disputes, not only works
committees be set up, but strong trade unions are developed, and labour officers are appointed.
Along with the works committee, the Commission also suggested the establishment of a joint machin-
ery to deal with the more general questions, and also to act as an advisory appellate body in respect
of disputes which were confined to a single establishment.
These recommendations of the Commission bore fruits with the provision of formal statutory
machinery under the Bombay Industrial Relations Act, 1946 and the Industrial Disputes Act, 1947.
In fact, the first major step in the direction of workers’ participation in management in India was the
enactment of the Industrial Disputes Act, 1947 with the dual purpose of prevention and settlement
of industrial disputes.
The Industrial Policy Resolution, 1948 advocated WPM by suggesting that labor should be in all
matters concerning industrial production.
Article 43 A of the Constitution of India has provided for WPM in these words:
“The State shall take steps, by suitable legislation, or in any other way, to secure the participation of
workers in the management of undertakings, establishments or other organisations engaged in an
industry”.
The First Five-Year Plan and the successive plans emphasised the need for workers’ participation in
management.
For example, the Second Five-Year Plan’ stressed the need for WPM in the following words:
“It is necessary in this context that the worker should be made to feel that in his own way he is helping
build a progressive state. The creation of industrial democracy, therefore, is a prerequisite for the
establishment of a socialist society”.
The Government of India set up a ‘Study Group on Workers’ Participation in Management’, in 1956,
consisting of representatives of the government, employers, and workers to examine the system of
WPM in the UK, Sweden, France, Belgium, West Germany and Yugoslavia and make
recommendations for the Indian case.
The Group submitted its report in May 1957 with the following recommendations:
1. WPM schemes should be introduced in selected undertakings on a voluntary basis.
2. A sub-committee consisting of representatives of workers, employers and government should be
set up for considering the WPM in India.
• The above recommendations, among other things, were accepted by 15th Indian Labour
Conference held in July 1957.

Notes
• The Conference appointed a 12-member sub-committee to look into further details of the
scheme.
• The recommendations made by the sub-committee were discussed in a “Seminar on Labour-
Management Co-operation” held in New Delhi on January 31 and February 1, 1958.
• It drew up a “Draft Model Agreement” between labour and management for the
establishment of the Joint Management Councils (JMCs) which would have three sets of
functions:
1. To fulfill its functions as an advisory

body.
2. To receive information on certain
matters.
3. To fulfill administrative
responsibilities.
• Besides, the Seminar on Labour Management Co-operation also took the size of the
Councils, its office bearers, term of office, etc.
• Thus, the Joint Management Councils (JMCs) were set up in 1958.
Role of Government of India

Following the recommendations of the Administrative Reforms Commission, the Government of
India accepted the inclusion of the representatives of workers on the Board of Directors of public
sector undertakings.
• Following this, the Nationalised Banks (Management and Miscellaneous Provisions)
Scheme 1970 also provided for the appointment of worker director to their Board.
• One director was from among employees (who are workmen) and another from among
officers for tenure of 3 years.
• Thus up to July 1975, there had been three forms of workers’ participation in management
introduced in India: Works Committees, Joint Management Councils and Workers-
Directors (public sector) on Boards of Directors.
• Under the Government of India’s 20-Point Economic Programmes, a new scheme of shops
and plant councils was introduced in 1975 after the emergency was declared in June 1975.
• In the following year 1976, the Government of India amended the constitution to
incorporate workers’ participation in management as one of the Directive Principles of State
Policy.
Summary
 Worker participation is a mental and emotional involvement of a person in a group situation
which encourages him to contribute to goals and share responsibilities with them.
 The participation enhances employees’ ability to influence, decision making at different tiers
of the organizational hierarchy with concomitant assumption of responsibility.

Notes
 The broad goal of participation is to change basically the organizational aspect of production
and transfer the management function entirely to the workers so that, they can experience
 Collective bargaining is done periodically or on a continuing basis between management and
workers’ representatives on issues over which the interests of both parties are competitive,
such as wage rates, bonus rates, working hours and number of holidays.
 WPM can be dated as far back as 1920 when Mahatma Gandhi suggested participation of
workers in management on the ground that workers contributed labor and brains while
shareholders contributed money to the enterprise and that both should, therefore, share in its
property.
 It will facilitate better understanding and mutual trust between employer and workers.
Keywords
 Informative Participation: This refers to the management’s sharing of information with the
workers on matters related to workers such as balance sheet, production, and the financial
health of the company.
 Consultative participation: In this type of participation, workers can give their views on the
matters related to them, but acceptance or non-acceptance of their opinion depends on the
employers. Here, the role of the employee is limited to giving opinion only.
 Associative participation: This is an improved form of consultative participation. Here, it is
considered that this is the moral duty of the employer to acknowledge and accept and
implement the unanimous decisions of employees.
 Administrative participation: In this type of participation, the decision is already taken and
implemented by the worker. Here the degree of sharing power and responsibility by the worker
is more as compared to other levels of participation.
 Decisive Participation: Here decisions on matters like production, employee welfare, etc. are
taken by the worker and management jointly after a discussion.
Self Assessment
1. The participation has to be at different levels of management :
A. at the shop level
B. at the department level and
C. at the board level
D. All of the above
2. The participation enhances employees’ ability to influence, decision making at different tiers
of the organizational hierarchy with concomitant assumption of ______________.
A. Authority
B. Responsibility
3. Worker participation is a __________ involvement of a person in a group situation which

encourages him to contribute to goals and share responsibilities with them.

Notes
A. Mental
B. Emotional
4. The broad goal of participation is to change basically the organizational aspect of production
and transfer the management function entirely to the _______ so that, they can experience
A. Workers
B. Employer
5. Participation results into ______ employee satisfaction and motivation.

A. Reduced
B. Better
C. Consistent
6. ___________ participation refers to the management’s sharing of information with the

workers on matters related to workers such as balance sheet, production, and the financial
health of the company.
A. Informative
B. Consultative
C. Associative
D. Administrative
7. ___________ participation refers to when workers can give their views on the matters related
to them, but acceptance or non-acceptance of their opinion depends on the employers. Here,
the role of the employee is limited to giving opinion only.
A. Informative
B. Consultative
C. Associative
D. Administrative
8. _________ participation is an improved form of consultative participation. Here, it is

considered that this is the moral duty of the employer to acknowledge and accept and
implement the unanimous decisions of employees.
A. Informative
B. Consultative
C. Associative
D. Administrative
9. __________ participation refers to when the decision is already taken and implemented by the
worker. Here the degree of sharing power and responsibility by the worker is more as
compared to other levels of participation.

Notes
A. Informative
B. Consultative
C. Associative
D. Administrative
10. In _________ participation, decisions on matters like production, employee welfare, etc. are
taken by the worker and management jointly after a discussion.
A. Decisive
B. Informative
C. Consultative
D. Associative
11. Article ____ of the Constitution of India has provided for WPM in these words:
“The State shall take steps, by suitable legislation, or in any other way, to secure the participation
of workers in the management of undertakings, establishments or other organisations
engaged in an industry”.
A. 43A
B. 44A
C. 45B
D. 43B
12. In ______, the workers and the employers in Ahmedabad Textile Industry agreed to settle
their disputes through joint discussions and consultations.
A. 1920
B. 1958
C. 1947
D. 1956
13. Joint Management Councils (JMCs) were set up in 1958.
A. 1920
B. 1958
C. 1947
D. 1956
14. Under the Industrial Disputes Act 1947, every establishment employing 100 or more workers
is required to constitute a works committee.
A. 1920
B. 1958
C. 1947
D. 1956
15. The Government of India set up a ‘Study Group on Workers’ Participation in Management’,
in 1956.
A. 1920
B. 1958

Notes
C. 1947
D. 1956

l. D 2. B 3. C 4. A 5. B
6. A 7. B 8. C 9. D 10. A
11. A 12. A 13. B 14. C 15. D
Review Questions
1) What is the need for worker’s participation?
2) Enlist the different objectives of worker’s participation.
3) What are the different forms of workers’ participation?
4) What is the importance of worker’s participation?
5) What are the various levels of worker participation?
Further Readings

Notes
Dr. Shikha Goyal, Lovely Professional University Unit 11: Industrial Disputes
Unit 11: Industrial Disputes

CONTENTS
Objectives
Introduction
11.1 Meaning of Industrial Dispute
11.2 Preventive Machineries Used for Handling Industrial Disputes in India
11.3 Grievance Settlement Authority
Summary
Keywords
Self Assessment
Review Questions
Further Readings
Objectives
• Understand the concept of Industrial Dispute

• Understand the different types of Industrial Dispute
• Understand the causes of Industrial dispute
• Learn about the impact of industrial dispute
• Learn about the preventive measures of managing industrial disputes.
• Understand the settlement of industrial disputes in India.
Introduction
Industrialization in a country has always contributed to employment, contribution to national
income, per capita income, exports, and economic development on one side and industrial disputes
on the other. It has always been the case of mixed blessing. The conflict of interest between
management and labor is what leads to industrial disputes.
The management has a goal of profit maximization and on the other hand the workers expect rise in
income, security of job, protection of their skills, improvement in their status and in the working
conditions. Those who control the factors of production require strict administration, closer
supervision, and maintenance of strict discipline and implementation of rules, code of conduct and
code of discipline.
Whereas the workers demand a share in capital, voice in management, freedom of expression,
participation in management and dignity of employees. So the people that control the factors of
production and people that produce always have different or conflicting interest which gives birth
to industrial disputes.
11.1 Meaning of Industrial Dispute

Industrial dispute is any dispute or difference between employees and employees, or between
employers and employers, which relates to the employment or non-employment, or the terms of
employment or with the conditions of work of any person.

Notes
Types of Industrial Dispute

There are mainly three types of industrial dispute. These are as under:
1. Perceived Conflict:
Perceived conflict is one which people perceive that conflicting conditions exist in the work-
organization. The perceived conflict may be true or otherwise. But there is a potential ground
for perceived conflict to turn into real conflict.
2. Latent Conflict:
Latent conflict is one which does not emerge in open. Although parties to the conflict realise the
fact of conflict for various reasons, they do not show it openly. Such a conflict is termed as latent
conflict.
3. Manifest Conflict:
Manifest conflict is one which is not only recognition of conflict, but also expressing it explicitly
or openly. This is a stage of open conflict.
Causes of Industrial Dispute

Causes of industrial disputes can be broadly classified into two categories: economic and non-
economic causes.
1.Economic Causes:
The economic causes will include issues relating to compensation like wages, bonus, allowances, and
conditions for work, working hours, leave and holidays without pay, unjust layoffs and
retrenchments.
2.Non-Economic Causes/Managerial Causes:

• The non-economic factors will include victimization of workers, ill treatment by staff
members, sympathetic strikes, political factors, indiscipline etc.
• The Industrial Disputes Act, 1947 governs rules for the settlement of disputes between the
management of industrial establishments and workmen.
Categories of causes:
There are mainly two categories of causes of Industrial Disputes.
1.Economic Causes
2.Managerial Causes
I. Economic Causes:
1.Wages-
 The demand for wage increase is the prime-most cause of the industrial disputes.
 A large number of strikes are being organized to raise a voice against the rise in prices and
cost of living.
2. Dearness Allowance and Bonus-

 Increase in cost of living was the main cause of the demand of dearness allowance by the
workers to equate their wages with the rise in prices.
 Bonus also plays an important role as a cause of industrial dispute.
3.Working Condition and Working Hours-
 The working conditions in Indian industries are not hygienic.

 There is not ample provision of water, heating, lighting, safety etc. Working hours are also
greater.

Notes
 The demand of palatable working conditions and shorter hours of work are also responsible
for labor disputes.
4.Modernization and Automation of Plant and Machinery-

• The attempt at modernization and introduction of automatic machinery to replace labor has
been the major cause of disputes in India.
• Workers go on strike, off and on, to resist rationalization and automation.
5.High Industrial Profits-

• Whenever the prices of the commodities went up and the industrialists earned huge profits.
• In order to get share in the prosperity of the industry, it naturally led to the resentment on
their part.
• The increased profits also led to the demands of higher wages and bonus.
• Now in the changing world, concept of labor has changed considerably.
• They think themselves as a partner of the industry and demand their share in the profits.
6. Demand for Other Facilities-

Demand for other facilities for meeting out their basic needs such as medical, education, housing,
etc., encourage the workers to resort to direct action because such facilities were denied by the
employers.
II. Managerial Causes:

These causes include autocratic managerial attitude and defective labor policies etc.
1. Denial of Recognition to Trade Unions-

Failure on the part of the employer to recognize the trade unions or to recognize the rival union for
representation, insult of trade union leaders by the employers are some of the examples of autocratic
managerial attitude worth mentioning as the causes of industrial disputes.
2. Defective Recruitment Policies-

• The recruitment practices in Indian industries are defective.
• Recruitment is generally made by the contractors who exploit the workers and suppress
their individuality.
• The defective promotion, demotion, transfer and placement policies encourage
dissatisfaction among workers.
3. Irregular Lay-Off and Retrenchment-

• Lay-off and retrenchment are reasons to be mentioned for encouraging industrial disputes.
• Indian employers follow the policy of ‘Hire and Fire’.
• As a matter of practice, workers are not made permanent for a long time to deprive them of
their legitimate rights.
4. Defiance of Agreements and Codes-

The employers regularly defy the provisions of collective bargaining agreements and code of conduct
and code of discipline with a view to harass or exploit the employees and just encourage strife.
5. Defective Leadership-
• Inefficient leadership is also one of the causes of disputes.
• Leadership from the management and from the workers is quite incompetent to induce the
workers to get them worked.
• The employers’ representatives are not delegated sufficient authority to negotiate with the
workers.

Notes
• Defective management leadership ignored the labor problems and inefficient labor
leadership could not coordinate the efforts of their fellow members, so disputes arise.
Impact of Industrial Disputes

1.Disturbance of Industrial Peace:
• Tense industrial relations resulting in disputes lead to a fall in the normal tempo of work in
the factory.
• Plant capacity utilization falls below the optimum level, costs go up, absenteeism and labor
turnover increase.
• Industrial Discipline breaks down and production suffers both quantitatively as well as
qualitatively.
2. Resistance to change:
• To be successful in business, innovations are a must.
• Innovations involve changes which can be introduced with the co-operation of employees
only.
• In an environment of poor industrial relations, employees lose faith in the management, and
therefore, they not only indulge in non-cooperation with the management, but also resist all
changes necessary for the survival and growth of the enterprise.
3.Frustration among employees:

• Employees work in a particular organization for the satisfaction of their physical, social, and
egoistic needs.
• In an environment with uncomfortable industrial relations, they find it difficult to satisfy
their needs, particularly social and psychological needs.
• This obviously leads to frustration and alienation among them.
Did you know?

Is it possible to prevent the industrial dispute?
Answer: Yes
Disputes can be prevented if there is equitable arrangement and adjustment between the
management and workers.
11.2 Preventive Machineries Used for Handling Industrial Disputes in

India
The preventive machinery has been set up with a view to creating harmonious relations between
labour and management so that disputes do not arise. But if preventive machinery fails, then the
industrial dispute settlement machinery should be activated by the Government because non-
settlement of disputes will prove to be very costly to the workers, management and the society as a
whole.
Major preventive machinery for handling industrial disputes

I. Worker’s Participation in Management
II. Collective Bargaining
III. Grievance Procedure
IV. Tripartite Bodies
V. Code of Discipline

Notes
VI. Standing Orders
I. Worker’s Participation in Management:

Workers’ participation in management is an essential ingredient of Industrial democracy. The
concept of workers’ participation in management is based on Human Relations approach to
Management which brought about a new set of values to labour and management.
Workers’ participation in management implies mental and emotional involvement of workers in the
management of Enterprise. It is considered as a mechanism where workers have a say in the decision.
Philosophy underlying workers’ participation

1. Democratic participation in decision-making.
2. Maximum employer-employee collaboration.
3. Minimum state intervention.
4. Realization of a greater measure of social justice.
5. Greater industrial efficiency; and
6. Higher level of organizational health and effectiveness.
Schemes of workers’ participation

• Works committee,
• Joint management council (JMC),
• Shop council and Joint council.
II. Collective Bargaining:

“Collective Bargaining” is the process of negotiating terms of employment and other conditions
of work between the representatives of management and organized labour.
Labor Contract-
• When it is free of intimidation and coercion and is conducted in good faith, collective
bargaining culminates in a workable contract i.e., labor contract.
• A labor contract is a collective agreement between the representatives of labor and
management for the sale of labor services at designated wage rates, hours of work, and other
terms of employment and conditions of work for a stated period of time.
• The contract usually calls for joint enforcement and administration of the agreement.
• Responsible labor leaders and employers are increasingly settling their differences around
the conference table rather than through industrial warfare.
• The process of bargaining the settlement of disputes is often facilitated through outside
assistance in the form of conciliation, mediation, or arbitration.
Bargaining Strategies Needed for Resolving Industrial Dispute-

The four bargaining strategies needed for resolving industrial dispute are as follows:
1. Distributive Bargaining
2. Integrative Bargaining
3. Attitudinal Bargaining
4. Intra-organizational Bargaining.

Notes
1. Distributive Bargaining:
Distributive bargaining, perhaps the most common form of bargaining, takes place when labor
and management are in disagree over the issues in the proposed contract, such as wages, bonus,
benefits, work rules, and so on. It involves haggling over the distribution of surplus.
2. Integrative Bargaining:
The purpose of integrative bargaining is to create a cooperative negotiating relationship that benefits
both parties. In such bargaining, both labour and management win or gain or at least neither party
loses. The issues of bargaining involved in such strategy may be such as better job evaluation process,
better training programmes, better working conditions, etc.
3. Attitudinal Structuring:
Such a bargaining involves shaping and reshaping of attitudes to positive and cooperative. Examples
of attitudinal structuring and shaping may be from hostile to friendly, from non-cooperative to
cooperative, from un-trust to trust, and so on.
4. Intra-organizational Bargaining:
In practice, there are different groups in an organization by department-wise and level - wise. At
times, different groups may perceive the outcomes of collective bargaining process differently.
While personnel manager may support increase in wages, the finance manager may oppose the same
on the ground that it will disturb the company’s financial position. Given such situation, intra-
organizational consensus is required for the smooth acceptance of the agreements arrived at
collective bargaining.
III. Grievance Procedure:

A grievance procedure specifies the steps involved, the persons to be associated at each step and the
method of their selection, the manner in which grievances are to be placed, the extent of authority
vested at each level, the sanction behind decisions and the rights and obligations of the parties.
Why to establish grievance procedure?

1. It does away with the uncertainty involved in locating the authority or person to be
approached for the redressal of the grievance.
2. Both the workers and the management are relieved of the tension and worry, which might
otherwise, would have resulted from haphazard handling of grievances.
3. A grievance procedure also contains elements of fairness and objectivity.
4. The procedure ensures uniformity in the handling of grievances.
5. Grievance procedure also minimizes the time and effort in the processing of grievances.
IV. Tripartite Bodies:

The purpose of tripartite consultative machinery is to bring the parties together for mutual
settlement of differences in a spirit of cooperation and goodwill. These committees have been
constituted to suggest ways and means to prevent disputes.
It includes Indian Labour Conference, Standing Labour Committee, Industrial Committees and
Tripartite Committee on International Labour Organization Conventions.
Purpose of Tripartite Body

Notes
a. Bring the aggravated parties together for mutual settlement of differences and encourage a
spirit of cooperation and goodwill.
b. Promote uniformity in labor laws and legislation.
c. Discuss all matters of All India importance as between employers and employees.
d. Determine a plan for settlement for all disputes.
V. Code of Discipline:
According to the Code of Discipline, both employees and employers voluntarily agree to maintain
and create an atmosphere of mutual trust and co-operation in the industry.
The code of Discipline provides for that:

1. Strikes and lockouts cannot be declared without prior notice.
2. No party should take any direct action without consulting the other.
3. The existing machinery for the settlement of disputes should be followed.
VI. Standing Orders:

‘Standing Orders’ refers to the rules and regulations which govern the conditions of employment of
workers. These standing orders are binding on the employer and the employees.
Recognizing the need for the standardised conditions of employment in factories to develop
industrial peace in the country, the Industrial Employment (Standing Orders) Act was passed in 1946.
This Act provides for the framing of standing orders in all industrial undertakings employing 100 or
more workers. Once the Standing Orders are certified, it is binding on the employees and the
employers to abide by these Orders.
The Standing Orders regulate the conditions of employment from the stage of entry in the
organization of the stage of exits from the organization.
Did you know?

What are the legal conditions to have grievance settlement authority for the settlement of
industrial disputes?
11.3 Grievance Settlement Authority

According to Section 9C of Industrial Dispute Act, 1982:
1. The employer in relation to every industrial establishment in which fifty or more workmen
are employed or have been employed on any day in the proceeding twelve months, shall
provide for, in accordance with the rules made in that behalf under the Act, a Grievance
Settlement Authority for the settlement of industrial dispute connected with an individual
workman employed the establishment.
2. Where an industrial dispute connected with an individual work man arises in an
establishment referred to in sub-section (1), workman or any trade union of workman of
which such workman is a member, refer, in such manner as may be prescribed such dispute
to the Grievance Settlement Authority provided for by the employer under that sub-section
for settlement.
Settlement of Industrial Disputes

Notes
1. Works committees
2. Conciliation officers
3. Boards of conciliation
4. Court of enquiry
5. Labor courts
6. Industrial Tribunals
7. National Tribunal
8. Arbitration.
1. Works committees:
Under the Industrial Disputes Act 1947, works committees exist in industrial establishments in
which one hundred or more workmen are employed during the previous year. It is the duty of
the works Committee to promote measures for securing and preserving amity and good
relations between the employers and workers.
Objectives of works committees

1. Remove the causes of friction in the day-to-day work situation.
2. Foster amity and harmonious relationship between the parties.
3. Create an atmosphere for voluntary settlement of disputes and frictions.
2. Conciliation Authorities:
One of the authorities under the Act is the conciliation officer. The law provides for the appointment
of Conciliation Officer by the Government to conciliate between the parties to the industrial dispute.
Under section 4 the appropriate Government is empowered to appoint conciliation officers for
promoting settlement of industrial disputes. The Conciliation Officer is given the powers of a civil
court, whereby he is authorized to call the witness.
On receiving information about a dispute, the conciliation officer should give formal intimation in
writing to the parties concerned of his intention to commence conciliation proceedings from a
specified date.
The conciliation officer is required to submit his report to the appropriate government along with the
copy of the settlement arrived at in relation to the dispute or in case conciliation has failed, he has to
send a detailed report giving out the reasons for failure of conciliation.
The report in either case must be submitted within 14 days of the commencement of conciliation
proceedings or earlier.
3. Boards of Conciliation:
In case Conciliation Officer fails to resolve the differences between the parties, the government has
the discretion to appoint a Board of Conciliation. The Board is tripartite and ad hoc body. It consists
of a chairman and two or four other members.
Duties of the board

A Board to which a dispute is referred must investigate the dispute and all matters affecting the
merits and the right settlement thereof and do all things for the purpose of inducing the parties to
come to a fair and amicable settlement of the dispute without delay.
If settlement is arrived,
• The Board should send a report to the appropriate Government together with a
memorandum of the settlement signed by the parties to the dispute.

Notes
If no settlement is reached,
• The Board must send a full report together with its recommendation for the determination
of the dispute.
4. Court of Enquiry:
• Court of Inquiry may be constituted is “for enquiring into any matter appearing to be
connected with or relevant to an industrial dispute”.
• The court of enquiry is required to submit its report within a period of six months from the
commencement of enquiry. This report is subsequently published by the government within
30 days of its receipt.
5. Labor Courts:
The appropriate government may, by notification in the official gazette constitute one or more labor
courts for adjudication of Industrial disputes relating to any matters specified in the second schedule
of Industrial Disputes Act.
They are:
• Dismissal or discharge or grant of relief to workmen wrongfully dismissed.
• Illegality or otherwise of a strike or lockout.
• Withdrawal of any customary concession or privileges.
• Where an Industrial dispute has been referred to a labor court for adjudication, it shall hold
its proceedings expeditiously and shall, within the period specified in the order referring
such a dispute, submit its report to the appropriate government.
Deal with matters like:

 The propriety or legality of an order passed by an employer under the standing orders.
 The application and interpretation of standing orders passed.
 Discharge or dismissal of workmen including reinstatement, grant of relief to workers who
are wrongfully dismissed.
 Withdrawal of any customary concession of privilege

 Illegality or otherwise of a strike or lockout, and all other matters not specified in the third
schedule.
6. Industrial Tribunals:
The appropriate government may, by notification in the official gazette, constitute one or more
Industrial Tribunals for the adjudication of Industrial disputes relating to the following matters:
• Wages
• Compensatory and other allowances
• Hours of work and rest intervals
• Leave with wages and holidays
• Bonus, profit-sharing, PF etc.
• Rules of discipline
• Retrenchment of workmen
• Working shifts other than in accordance with standing order

Notes
7. National Tribunal:
A National tribunal is constituted by the Central government for Industrial Disputes involving
question of national importance. The Central Government may appoint two assessors to assist
the national tribunal. The award of the tribunal is to be submitted to the Central Government
which has the power to modify or reject it if it considers it necessary in public interest.
8. Arbitration:
The employer and employees may agree to settle the dispute by appointing an independent and
impartial person called Arbitrator. Arbitration provides justice at minimum cost.
Arbitration is a process in which a neutral third party listens to the disputing parties, gathers
information about the dispute, and then takes a decision which is binding on both the parties.
Types of Arbitration-
1. Voluntary Arbitration: In voluntary arbitration the arbitrator is appointed by both the
parties through mutual consent and the arbitrator acts only when the dispute is referred to
him.
2. Compulsory Arbitration: Implies that the parties are required to refer the dispute to the
arbitrator whether they like him or not. Usually, when the parties fail to arrive at a
settlement voluntarily, or when there is some other strong reason, the appropriate
government can force the parties to refer the dispute to an arbitrator.
Summary
• Industrial dispute is any dispute or difference between employees and employees, or between
employers and employers, which relates to the employment or non-employment, or the terms
of employment or with the conditions of work of any person.
• There are mainly two categories of causes of Industrial Disputes: 1. Economic Causes and 2.
Managerial Causes
• Arbitration is a process in which a neutral third-party listens to the disputing parties, gathers
information about the dispute, and then takes a decision which is binding on both the parties.
• ‘Standing Orders’ refers to the rules and regulations which govern the conditions of
employment of workers. These standing orders are binding on the employer and the
employees.
• A grievance procedure specifies the steps involved, the persons to be associated at each step
and the method of their selection, the manner in which grievances are to be placed, the extent
of authority vested at each level, the sanction behind decisions and the rights and obligations
of the parties.
• Causes of industrial disputes can be broadly classified into two categories: economic and non-
economic causes.
Keywords
 Grievance procedure
 Industrial Disputes
 Arbitration
 Board of Conciliation
 Tripartite Body
 Worker’s participation.

Notes
Self Assessment
Q1. ____________ is one which is not only recognition of conflict, but also expressing it explicitly
or openly.
A. Manifest Conflict
B. Latent Conflict
C. Perceived Conflict
D. All of the above
Q2. Which is an economic cause of industrial disputes?
A. Victimization of workers
B. Ill treatment by staff members
C. Indiscipline
D. Issues related to compensation
Q3. Is inefficient leadership one of the causes of disputes?
A. True
B. b. False
Q4. Which can be included as an impact of industrial disputes?
A. Disturbance of Industrial Peace

B. Resistance to change
C. Frustration among employees
D. All of the above
Q5. Is the attempt at modernization and introduction of automatic machinery to replace labor has
been the major cause of disputes in India?
A. True
B. b. False
Q6. The prevention of disputes is not an option or not possible.
A. True
B. b. False
Q7. How many preventive machinery for handling industrial disputes exist?
A. Four
B. Five
C. Six
D. Seven
Q8. What included under the schemes of worker’s participation concept?
A. Works committee

Notes
B. Joint management council (JMC)

C. Shop council and Joint council
D. All of the above
Q9. ______________ is the process of negotiating terms of employment and other conditions of
work between the representatives of management and organized labor.
A. Collective Bargaining
B. Tripartite Bodies
C. Code of Discipline
D. Standing Orders
Q10. __________ refers to the rules and regulations which govern the conditions of employment
of workers.
A. Collective Bargaining
B. Tripartite Bodies
C. Code of Discipline
D. Standing Orders
Q11.Which section of Industrial Disputes Act deals with grievance handling procedure?
A. Section 9 (c)
B. Section 10 (a)
C. Section 11(b)
D. Section 12 (c)
Q12. Under the Industrial Disputes Act 1947, works committees exist in industrial establishments
in which ________________workmen are employed during the previous year.
A. one hundred or more

B. two hundred or more
C. Two hundred fifty and more
Q13. Which is not an objective of works committees?
A. Remove the causes of friction in the day-to-day work situation.

B. Foster amity and harmonious relationship between the parties.
C. Create an atmosphere for voluntary settlement of disputes and frictions.
Q14. In case Conciliation Officer fails to resolve the differences between the parties, the
government has the discretion to appoint a ____________.
A. Board of Directors
B. Board of Conciliation
C. Work Committees
D. Labour Courts

Notes
Q15. ___________ is a process in which a neutral third party listens to the disputing parties,
gathers information about the dispute, and then takes a decision which is binding on both the
parties.
A. Conciliation
B. Arbitration
C. Adjudication
D. Mediation

l. A 2. D 3. A 4. D 5. A
6. B 7. C 8. D 9. A 10. D
11. A 12. A 13. D 14. B 15. B
Review Questions
Q1. Discuss grievance settlement procedure in detail.
Q2. What do you mean by Industrial Dispute? What are the different types of industrial disputes?
Q3. Explain the preventive machinery for settling industrial disputes in India.
Q4. What are the different causes of Industrial Disputes?
Q5. Discuss the impact of Industrial Dispute in India.
Further Readings

Notes
Jaskiran Kaur, Lovely Professional University Unit 12: The Industrial Disputes Act, 1947
Unit 12: The Industrial Disputes Act, 1947

CONTENTS
Objectives
Introduction
12.1 Industrial Disputes Act, 1947
12.2 Powers and Duties
12.3 Strikes and Lockouts
12.4 Provisions Related To Retrenchment And Closure
12.5 Unfair Labour Practices
Summary
Keywords
Self Assessment
Review Questions
Further Readings
Objectives
After this unit, you will be able to:
• aware about the authorities under Industrial Disputes Act, 1947.
• become aware about the Powers and Duties of Authorities under Industrial Dispute Act.
• difference between Strikes and Lockout.
• understand the different provisions of Strikes and Lock-out.
• understand the provisions related to retrenchment in Industrial Disputes Act.
• understand the provisions related to closure in Industrial Disputes Act.
• understand the unfair labour practices on the part of employers.
• understand the unfair labour practices on the part of employees.
Introduction
An Act to make provision for the investigation and settlement of industrial disputes, and for certain
other purposes. WHEREAS it is expedient to make provision for the investigation and settlement of
industrial disputes, and for certain other purposes hereinafter appearing.
The Industrial Disputes Act, 1947 extended to the whole of India and regulated Indian labour law so
far as that concerns trade unions as well as Individual workman employed in any Industry within
the territory of Indian mainland. Enacted on 11 March 1947 and It came into force 1 April 1947. It was
replaced by the Industrial Relations Code, 2020.
12.1 Industrial Disputes Act, 1947

An Act to make provision for the investigation and settlement of industrial disputes, and for certain
other purposes.

Notes
WHEREAS it is expedient to make provision for the investigation and settlement of industrial
disputes, and for certain other purposes.
Authorities under the Act:
1.Works Committee
2. Conciliation Officers
3.Boards of Conciliation
4.Courts of Inquiry
5.Labor Courts
6.Tribunals
7. National tribunals
1. Works Committee
 In the case of any industrial establishment in which one hundred or more workmen
are employed or have been employed on any day in the preceding twelve months,
the appropriate government may by general or special order require the employer
to constitute in the prescribed manner a Works Committee.
 Works Committee consisting of representatives of employers and workmen
engaged in the establishment, so however that the number of representatives of
workmen on the Committee shall not be less than the number of representatives of
the employer.
 The representatives of the workmen shall be chosen in the prescribed manner from
among the workmen engaged in the establishment and in consultation with their
trade union, if any, registered under the Indian Trade Unions Act, 1926 (16 of 1926).
 It shall be the duty of the Works Committee to promote measures for securing and
preserving amity and good relations between the employer and workmen and, to
that end, to comment upon matters of their common interest or concern and
endeavor to compose any material difference of opinion in respect of such matters.
2. Conciliation Officers
 The appropriate. government may, by notification in the Official Gazette, appoint

such number of persons, as it thinks fit to be conciliation officers, charged with the
duty of mediating in and promoting the settlement of industrial disputes.
 A conciliation officer may be appointed for a specified area or for specified
industries in a specified area or for one or more.
 Specified industries and either permanently or for a limited period.

Notes
3. Boards of Conciliation
 The appropriate government may as occasion arises by notification in the Official Gazette
constitute a Board of Conciliation for promoting the settlement of an industrial dispute.
 A Board shall consist of a Chairman and two or four other members, as the appropriate
government thinks fit.
 The Chairman shall be an independent person and the other members shall be persons
appointed in equal numbers to represent the parties to the dispute and any person appointed
to represent a party shall be appointed on the recommendation of that party:
 PROVIDED that, if any party fails to make a recommendation as aforesaid within the
prescribed time, the appropriate government shall appoint such persons as it thinks fit to
represent that party.
 A Board, having the prescribed quorum, may act notwithstanding the absence of the
Chairman or any of its members or any vacancy in its number
 PROVIDED that, if the appropriate government notifies the Board that the services of the
Chairman or of any other member have ceased to be available, the Board shall not act until a
new Chairman or member, as the case may be, has been appointed.
4. Courts of Inquiry
 The appropriate government may, as occasion arises by notification in the Official Gazette,
constitute a Court of Inquiry for inquiring into any matter appearing to be connected with or
relevant to an industrial dispute.
 A court may consist of one independent person or of such number of independent persons as
the appropriate government may think fit and where a court consists of two or more members,
one of them shall be appointed as the Chairman.
 A court, having the prescribed quorum, may act not withstanding the absence of the
Chairman or any of its members or any vacancy in its number:
 PROVIDED that, if the appropriate government notifies the court that the services of the
Chairman have ceased to be available, the court shall not act until a new Chairman has been
appointed.
5. Labor Courts
 The appropriate government may, by notification in the Official Gazette, constitute one or
more Labor Courts for the adjudication of industrial disputes relating to any matter specified
in the Second Schedule and for performing such other functions as may be assigned to them
under this Act.
 A Labor Court shall consist of one person only to be appointed by the appropriate
government.
 A person shall not be, qualified for appointment as the presiding officer of a Labor Court ,
unless-
 (a) he is, or has been, a judge of a High Court; or
 (b) he has, for a period of not less than three years, been a District Judge or an Additional
District Judge; or
 (c) he has held any judicial office in India for not less than seven years; or
 (d) he has been the presiding officer of a Labor Court constituted under any Provincial Act or
State Act for not less than five years.
6. Tribunals

Notes
 The appropriate government may, by notification in the Official Gazette, constitute one or
more Industrial Tribunals for the adjudication of industrial disputes relating to any matter,
whether specified in the Second Schedule or the Third Schedule
 A Tribunal shall consist of one person only to be appointed by the appropriate government.
 The appropriate government may, if it so thinks fit, appoint two persons as assessors to advise
the Tribunal in the proceeding before it.
 A person shall not be qualified for appointment as the presiding officer of a Tribunal unless-
(a) he is, or has been, a Judge of a High Court; or
(b) he has, for a period of not less than three-years, been a District judge or an Additional
District Judge
7. National tribunals
 The Central Government may, by notification in the Official Gazette, constitute one or more
National Industrial Tribunals for the adjudication of industrial disputes which, in the opinion
of the Central Government, involve questions of national importance or are of such a nature
that industrial establishments situated in more than one State are likely to be interested in, or
affected by, such disputes.
 A National Tribunal shall consist of one person only to be appointed by the Central
Government.
 A person shall not be qualified for appointment as the presiding officer of a National Tribunal
unless he is, or has been, a Judge of a High Court.
 The Central Government may, if it so thinks fit, appoint two persons as assessors to advise
the National Tribunal in the proceeding before it.
12.2 Powers and Duties

Who are the different authorities in Industrial Disputes Act?
Conciliation Officer
Board of Conciliation
Labour Court
Industrial Tribunal
National Tribunal
Power of Authorities

Notes
1. A conciliation officer or a member of a Board, or Court or the presiding officer of a Labor

Court, Tribunal or National Tribunal may for the purpose of inquiry into any existing or
apprehended industrial dispute, after giving reasonable notice, enter the premises occupied
by any establishment to which the dispute relates.
2. Every Board, Labor Court, Tribunal and National Tribunal shall have the same powers as are
vested in a Civil Court under the Code of Civil Procedure, 1908 (5 of 1908), when trying a suit,
in respect of the different matters.
Different matters are:
a) enforcing the attendance of any person and examining him on oath;

b) compelling the production of documents and material objects;
c) issuing commissions for the examination of witnesses;
d) in respect of such other matters as may be prescribed.
Every inquiry or investigation by a Board, Court, [Labor Court, Tribunal or National Tribunal], shall
be deemed to be a judicial proceeding within the meaning of sections 193 and 228 of the Indian Penal
Code (45 of 1860).
3. A conciliation officer may enforce the attendance of any person for the purpose of examination
of such person
• A conciliation officer may inspect any document which he has ground for considering to be
relevant to the industrial dispute or to be necessary for the purpose of verifying the
implementation of any award or carrying out any other duty imposed on him under this
Act.
• The conciliation officer shall have the same powers as are vested in a Civil Court under the
Code of Civil Procedure, 1908 (5 of 1908),in respect of enforcing the attendance of any person
and examining him or of compelling the production of documents.
4. A Court, Labor Court, Tribunal or National Tribunal may, if it so thinks fit, appoint one or
more persons having special knowledge of the matter under consideration as assessor or
assessors to advise it in the proceeding before it.
5. Subject to any rules made under this Act, the costs of, and incidental to, any proceeding before
a Labor Court, Tribunal or National Tribunal shall be in the discretion of that Labor Court,
Tribunal or National Tribunal and the Labor Court, Tribunal or National Tribunal, as the case
may be, shall have full power to determine by and to whom and to what extent and subject to
what conditions, if any, such costs are to be paid, and to give all necessary directions for the
purposes aforesaid and such costs may, on application made to the appropriate Government
by the person entitled, be recovered by that Government in the same manner as an arrear of
land revenue.]
6. Every award made, order issued, or settlement arrived at by or before Labor Court or Tribunal
or National Tribunal shall be executed in accordance with the procedure laid down for
execution of orders and decree of a Civil Court under order 21 of the Code of Civil Procedure,
1908.
7. Where an industrial dispute relating to the discharge or dismissal of a workman has been
referred to a Labor Court, Tribunal or National Tribunal for adjudication and, in the course of
the adjudication proceedings, the Labor Court, Tribunal or National Tribunal, as the case may
be, is satisfied that the order of discharge or dismissal was not justified, it may, by its award,
set aside the order of discharge or dismissal and direct reinstatement of the workman on such
terms and conditions, if any, as it thinks fit, or give such other relief to the workman including

Notes
the award of any lesser punishment in lieu of discharge or dismissal as the circumstances of
the case may require:
• Provided that in any proceeding under this section the Labor Court, Tribunal or National
Tribunal, as the case may be, shall rely only on the materials on record and shall not take
any fresh evidence in relation to the matter.
1. Duties of conciliation officers

o Where any industrial dispute exists or is apprehended, the conciliation officer may, or
where the dispute relates to a public utility service and a notice under section 22 has
been given, shall hold conciliation proceedings in the prescribed manner.
o The conciliation officer shall, for the purpose of bringing about a settlement of the
dispute, without delay, investigate the dispute and all matters affecting the merits and
the right settlement thereof and may do all such things as he thinks fit for the purpose
of inducing the parties to come to a fair and amicable settlement of the dispute.
o If a settlement of the dispute or of any of the matters in dispute is arrived at in the
course of the conciliation proceedings the conciliation officer shall send a report thereof
to the appropriate Government [or an officer authorized in this behalf by the
appropriate Government] together with a memorandum of the settlement signed by
the parties to the dispute.
o If no such settlement is arrived at, the conciliation officer shall, as soon as practicable
after the close of the investigation, send to the appropriate Government a full report
setting forth the steps taken by him for ascertaining the facts and circumstances
relating to the dispute and for bringing about a settlement thereof, together with a full
statement of such facts and circumstances, and the reasons on account of which, in his
opinion, a settlement could not be arrived at.
o If, on a consideration of the report referred to in sub-section (4), the appropriate
Government is satisfied that there is a case for reference to a Board, [Labor Court,
Tribunal or National Tribunal], it may make such reference. Where the appropriate
Government does not make such a reference it shall record and communicate to the
parties concerned its reasons therefor.
o A report under this section shall be submitted within fourteen days of the
commencement of the conciliation proceedings or within such shorter period as may
be fixed by the appropriate Government:
Provided that,[subject to the approval of the conciliation officer,] the time for the
submission of the report may be extended by such period as may be agreed upon in
writing by all the parties to the dispute.
2. Duties of Board
o Where a dispute has been referred to a Board under this Act, it shall be the duty of the Board
to endeavours to bring about a settlement of the same and for this purpose the Board shall,
in such manner as it thinks fit and without delay, investigate the dispute and all matters
affecting the merits and the right settlement thereof and may do all such things as it thinks
fit for the purpose of inducing the parties to come to a fair and amicable settlement of the
dispute.
o If a settlement of the dispute or of any of the matters in dispute is arrived at in the course of
the conciliation proceedings, the Board shall send a report thereof to the appropriate

Notes
Government together with a memorandum of the settlement signed by the parties to the
dispute.
o If no such settlement is arrived at, the Board shall, as soon as practicable after the close of
the investigation, send to the appropriate Government a full report setting forth the
proceedings and steps taken by the Board for ascertaining the facts and circumstances
relating to the dispute and for bringing about a settlement thereof, together with a full
statement of such facts and circumstances, its findings thereon, the reasons on account of
which, in its opinion, a settlement could not be arrived at and its recommendations for the
determination of the dispute.
o If, on the receipt of a report under sub-section (3) in respect of a dispute relating to a public
utility service, the appropriate Government does not make a reference to a [Labor Court,
Tribunal or National Tribunal] under section 10, it shall record and communicate to the
parties concerned its reasons therefor.
o The Board shall submit its report under this section within two months of the date 4 [on
which the dispute was referred to it] or within such shorter period as may be fixed by the
appropriate Government:
o Provided that the appropriate Government may from time to time extend the time
for the submission of the report by such further periods not exceeding two months
in the aggregate:
o Provided further that the time for the submission of the report may be extended
by such period as may be agreed on in writing by all the parties to the dispute.
3. Duties of Courts
o A Court shall inquire into the matters referred to it and report thereon to the
appropriate Government ordinarily within a period of six months from the
commencement of its inquiry.
4. Duties of Labor Courts, Tribunals and National Tribunals
o Where an industrial dispute has been referred to a Labor Court, Tribunal or
National Tribunal for adjudication, it shall hold its proceedings expeditiously and
shall, [within the period specified in the order referring such industrial dispute or
the further period extended under the second proviso to sub-section (2A) of section
10], submit its award to the appropriate Government.
12.3 Strikes and Lockouts

Section 2(g) of Industrial Dispute Act defines strike :
“Strike means a cessation of work by a body of persons employed in any Industry acting in
combination, or a concerted refusal, or a refusal under a common understanding, of any number of
persons who are or have been so employed to continue to work or to accept employment.”
Section 2(I) of the Industrial Disputes Act, 1947 define Lock-out:
“lock-out” means the temporary closing of a place of employment, or the suspension of work, or the
refusal by an employer to continue to employ any number of persons employed by him
Strike vs Lockout
• Strike is a democratic weapon used by workmen to ventilate their grievances and safeguard
their interest.
• Lockouts are democratic weapons used by employers to ventilate their grievances and
safeguard their interest.
• The strike is a weapon available to employees for enforcing their individual demands
• The lockout is a weapon available to the employer to persuade workmen by the coercive
process to accept his point of view.

Notes
Provisions related to strikes and lockouts

1) Provisions for Prohibition of strikes and lock-outs
2) General prohibition of strikes and Lockouts
3) Illegal strikes and lock-outs
4) Prohibition of financial aid to illegal strikes and lock-out
1. Provisions for Prohibition of strikes and lock-outs

(1) No person employed in a public utility service shall go on strike in breach of contract—
(a) without giving to the employer notice of strike, as hereinafter provided, within six
weeks before striking; or
(b) within fourteen days of giving such notice; or
(c) before the expiry of the date of strike specified in any such notice as aforesaid; or
(d) during the pendency of any conciliation proceedings before a conciliation officer and
seven days after the conclusion of such proceedings.
(2) No employer carrying on any public utility service shall lock-out any of his workmen—
a) without giving them notice of lock-out as hereinafter provided, within six weeks before
locking out; or
b) within fourteen days of giving such notice; or
c) before the expiry the date of lock-out specified in any such notice as aforesaid; or
d) during the pendency of any conciliation proceedings before a conciliation officer and
seven days after the conclusion of such proceedings.
(3) The notice of lock-out or strike under this section shall not be necessary where there is already in
existence a strike or, as the case may be, lock-out in the public utility service, but the employer shall
send intimation of such lock-out or strike on the day on which it is declared, to such authority as may
be specified by the appropriate Government either generally or for a particular area or for a particular
class of public utility services.
(4) The notice of strike referred to in sub-section(1) shall be given by such number of persons to such
person or persons and in such manner as may be prescribed.
(5) The notice of lock-out referred to in sub-section (2) shall be given in such manner as may be
prescribed.
(6) If on any day an employer receives from any persons employed by him any such notices as are
referred to in sub-section (1) or gives to any persons employed by him any such notices as are referred
to in sub-section (2), he shall within five days thereof report to the appropriate Government or to
such authority as that Government may prescribe the number of such notices received or given on
that day.
2. General prohibition of strikes and Lockouts

No workman who is employed in any industrial establishment shall go on strike in breach of contract
and no employer of any such workman shall declare a lock-out—
a. during the pendency of conciliation proceedings before a Board and seven days after the
conclusion of such proceedings;
b. during the pendency of proceedings before 1 [a Labor Court, Tribunal or National Tribunal]
and two months after the conclusion of such proceedings.

Notes
c. during any period in which a settlement or award is in operation, in respect of any of the
matters covered by the settlement or award.
3. Illegal strikes and lock-outs

(1) A strike or a lock-out shall be illegal if—
(i) it is commenced or declared in contravention of section 22 or section 23; or
(ii) it is continued in contravention of an order made under sub-section (3) of section 10 1 [or
sub-section (4A) of section 10A].
(2) Where a strike or lock-out in pursuance of an industrial dispute has already commenced and
is in existence at the time of the reference of the dispute to a Board, an arbitrator, a Labor Court,
Tribunal or National Tribunal,
• the continuance of such strike or lock-out shall not be deemed to be illegal, provided that
such strike or lock-out was not at its commencement in contravention of the provisions of
this Act or the continuance thereof was not prohibited under sub-section (3) of section 10 or
sub-section (4A) of section 10A.
• (3) A lock-out declared in consequence of an illegal strike or a strike declared in consequence
of an illegal lock-out shall not be deemed to be illegal.
4. Prohibition of financial aid to illegal strikes and lock-out

No person shall knowingly expend or apply any money in direct furtherance of support of any illegal
strike or lock-out.
12.4 Provisions Related To Retrenchment And Closure

There are 2 chapters in Industrial Disputes Act, 1947 i.e. Chapter VA and Chapter VB which describes
the provisions related to Retrenchment and Layoff.
CHAPTER VA
Application of sections 25C to 25E
(1) Sections 25C to 25E inclusive 125[shall not apply to Industrial Establishments to which Chapter
VB applies, or]-
a) to industrial establishments in which less than fifty workmen on an average per working
day have been employed in the preceding calendar month; or
b) to industrial establishments which are of a seasonal character or in which work is performed
only intermittently.
(2) If a question arises whether an industrial establishment is of a seasonal character or whether
work is performed therein only intermittently, the decision of the appropriate government thereon
shall be final.
Conditions precedent to retrenchment of workmen
No workman employed in any industry who has been in continuous service for not less than one
year under an employer shall be retrenched by that employer until-
a) the workman has been given one month’s notice in writing indicating the reasons for
retrenchment and the period of notice has expired, or the workman has been paid in lieu of
such notice, wages for the period of the notice;
b) the workman has been paid, at the time of retrenchment, compensation which shall be
equivalent to fifteen days’ average pay [for every completed year of continuous service] or
any part thereof in excess of six months; and

Notes
c) notice in the prescribed manner is served on the appropriate government [for such authority
as may be specified by the appropriate government. by notification in the Official Gazette].
Procedure for retrenchment

• Where any workman in an industrial establishment who is a citizen of India, is to be
retrenched and
• he belongs to a particular category of workmen in that establishment,
• in the absence of any agreement between the employer and the workman in
………………………..this behalf,
• the employer shall ordinarily retrench the workman who was the last person to be
employed in that category,
• unless for reasons to be recorded the employer retrenches any other workman.
Re-employment of retrenched workmen

• Where any workmen are retrenched, and the employer proposes to take into his employ
any persons, he shall, in such manner as may be prescribed, give an opportunity…
• …[to the retrenched workmen who are citizens of India to offer themselves for re-
employment, and such retrenched workmen] who offer themselves for re-employment shall
have preference over other persons.
CHATPER VB
Application of Chapter V-B
1. The provisions shall apply to an industrial establishment (not being an establishment of a seasonal
character or in which work is performed only intermittently) in which not less than one hundred
workmen were employed on an average per working day for the preceding twelve months.
2. If a question arises whether an industrial establishment is of a seasonal character or whether work
is performed therein only intermittently, the decision of the appropriate Government thereon shall
be final.
Conditions precedent to retrenchment of workmen
(1) No workman employed in any industrial establishment to which this Chapter applies , who has
been in continuous service for not less than one year under an employer shall be retrenched by that
employer until, …
a) the workman has been given three months’ notice in writing indicating the reasons for
retrenchment and the period of notice has expired, or the workman has been paid in lieu of
such notice, wages for the period of the notice; and
b) the prior permission of the appropriate government or such authority as may be specified
by that government by notification in the Official Gazette (hereafter in this section referred
to as the specified authority) has been obtained on an application made in this behalf.
(2) An application for permission under sub-section (1) shall be made by the employer in the
prescribed manner stating clearly the reasons for the intended retrenchment and a copy of such
application shall also be served simultaneously on the workmen concerned in the prescribed manner.
(3) Where an application for permission under sub-section(l) has been made, the appropriate
government or the specified authority, after making such enquiry as it thinks fit and after giving a
reasonable opportunity of being heard to the employer, the workmen concerned and the persons
interested in such retrenchment, may, having regard to the genuineness and adequacy of the reasons
stated by the employer, the interests of the workmen and all other relevant factors, by order and for
reasons to be recorded in writing, grant or refuse to grant such permission and a copy of such order
shall be communicated to the employer and the workmen.

Notes
(4) Where an application for permission has been made under sub-section (l) and the appropriate
government or the specified authority does not communicate the order granting or refusing to grant
permission to the employer within a period of sixty days from the date on which such application is
made, the permission applied for shall be deemed to have been granted on the expiration of the said
period of sixty days.
(5) An order of the appropriate government or the specified authority granting or refusing to grant
permission shall, subject to the provisions of sub-section (6), be final and binding on all the parties
concerned and shall remain in force for one year from the date of such order.
(6) The appropriate government or the specified authority may, either on its own motion or on the
application made by the employer or any workman, review its order granting or refusing to grant
permission under sub-section (3) or refer the matter or, as the case may be, cause it to be referred to
a Tribunal for adjudication: PROVIDED that where a reference has been made to a Tribunal under
this sub-section, it shall pass an award within a period of thirty days from the date of such reference.
(7) Where no application for permission under sub-section (1) is made, or where the permission for
any retrenchment has been refused, such retrenchment shall be deemed to be illegal from the date on
which the notice of retrenchment was given to the workman and the workman shall be entitled to all
the benefits under any law for the time being in force as if no notice had been given to him.
(8) Notwithstanding anything contained in the foregoing provisions of this section, the appropriate
government may, if it is satisfied that owing to such exceptional circumstances as accident in the
establishment or death of the employer or the like it is necessary so to do, by order, direct that the
provisions of sub-section (1) shall not apply in relation to such establishment for such period as may
be specified in the order.
(9) Where permission for retrenchment has been granted under sub-section (3) or where permission
for retrenchment is deemed to be granted under sub-section (4) every workman who is employed in
that establishment immediately before the date of application for permission under this section shall
be entitled to receive, at the time of retrenchment, compensation which shall be equivalent to fifteen
days' average pay for every completed year of continuous service or any part thereof in excess of six
months.
CLOSURE
Procedure for closing down an undertaking
(1) An employer who intends to close down an undertaking of an industrial establishment to

which this Chapter applies shall, in the prescribed manner, apply, for prior permission at
least ninety days before the date on which the intended closure is to become effective, to
the appropriate government, stating clearly the reasons for the intended closure of the
undertaking and a copy of such application shall also be served simultaneously on the
representatives of the workmen in the prescribed manner: PROVIDED that nothing in this
sub-section shall apply to an undertaking set up for the construction of buildings, bridges,
roads, canals, dams or for other construction work.
(2) Where an application for permission has been made under sub-section(l),the appropriate
government, after making such enquiry as it thinks fit and after giving a reasonable
opportunity of being heard to the employer, the workmen and the persons interested in
such closure may, having regards to the, genuineness and adequacy of the reasons stated
by the employer, the interests of the general public and all other relevant factors, by order.
and for reasons to be recorded in writing, grant or refuse to grant such permission and a
copy of such order shall be communicated to the employer and the workmen.
(3) Where an application has been made under sub-section (1) and the appropriate
government does not communicate the order granting or refusing to grant permission to
the employer within a period of sixty days from the date on which such application is
made, the permission applied for shall be deemed to have been granted on the expiration
of the said period of sixty days.

Notes
(4) An order of the appropriate government granting or refusing to grant permission shall,
subject to the provisions of sub-section (5), be final and binding on all the parties and shall
remain in force for one year from the date of such order.
(5) The appropriate government may, either on its own motion or on the application made by
the employer or any workman, review its order granting or refusing to grant permission
under sub-section (2) or refer the matter to a Tribunal for adjudication: PROVIDED that
where a reference has been made to a Tribunal under this sub-section , it shall pass an
award within a period of thirty days from the date of such reference.
(6) Where no application for permission under sub-section (l) is made within the period
specified therein, or where the permission for closure has been refused, the closure of the
undertaking shall be deemed to be illegal from the date of closure and the workmen shall
be entitled to all the benefits under any law for the time being in force as if the undertaking
had not been closed down.
(7) Notwithstanding anything contained in the foregoing provisions of this section, the
appropriate government may, if it is satisfied that owing to such exceptional
circumstances as accident in the undertaking or death of the employer or the like it is
necessary so to do, by order, direct that the provisions of sub-section (1) shall not apply in
relation to such undertaking for such period as may be specified in the order.
(8) Where an undertaking is permitted to be closed down under sub-section (2) or where
permission for closure is deemed to be granted under sub-section (3), every workman who
is employed in that undertaking immediately before the date of application for permission
under this section, shall be entitled to receive compensation which shall be equivalent to
fifteen days’ average pay for every completed year of continuous service or any part
thereof in excess of six months.]
Special provision as to restarting of undertakings closed down before commencement of the
Industrial Disputes (Amendment) Act, 1976
If the appropriate government is of opinion in respect of any undertaking of an industrial
establishment to which this Chapter applies and which closed down before the commencement of
the Industrial Disputes (Amendment) Act, 1976 (32 of 1976),-
a) that such undertaking was closed down otherwise than on account of unavoidable
circumstances beyond the control of the employer;
b) that there are possibilities of restarting the undertaking;
c) that is necessary for the rehabilitation of the workmen employed in such undertaking before
its closure or for the maintenance of supplies and services essential to the life of the
community to restart the undertaking or both; and…
d) that the restarting of the undertaking will not result in hardship to the employer in relation
to the undertaking, it may, after giving an opportunity to such employer and workmen,
direct by order published in the Official Gazette, that the undertaking shall be restarted
within such time (not being less than one month from the date of the order ) as may be
specified in the order.
12.5 Unfair Labour Practices

Industrial Dispute Act 1947 (amended in 1982) specifies what are unfair labor practices on the part
of employers and on the part of employees.
The fifth schedule of the act consist of list of unfair labor practices on the part of employers and trade
unions of employers and unfair labor practices on the part of workmen and trade unions of workmen.

Notes
• Every employer and workmen are entitled to join a trade union and participate in its lawful
activities.
• Anyone who engages in any prohibited conduct is said to have committed an unfair labor
practice.
Section 25-T: Prohibition of unfair labor practice:- No employer or workman or a trade union,
whether registered under the Trade Unions Act, 1926, or not, shall commit any unfair labor practice.
Section 25-U: Penalty for committing unfair labor practices:- Any person who commits any unfair
labor practice shall be punishable with imprisonment for a term which may extend to six months or
with a fine which may extend to one thousand rupees or with both.
Unfair labor practices on the part of employers and trade unions of employers
1. To interfere with, restrain from, or coerce, workmen in the exercise of their rights to organize,
form, join, or assist a Trade Union or to engage in concerted activities for collective bargaining or
other mutual aid or protection, that is to say:
a. Threatening workmen with discharge or dismissal, if they join a trade union;

b. Threatening a lock-out or closure, if a trade union is organized;
c. Granting wage increases to workmen at crucial periods of the union organizations,
undermines the efforts of the trade union at the organization.
2. To dominate, interfere with or contribute support, financial, or otherwise, to any trade union, that
is to say:
• An employer taking an active interest in organizing a trade union of his workmen; and
• An employer showing partiality or granting favor to one of several trade unions attempting
to organize his workmen or to its members where such a trade union is not a recognized
trade union.
3. To establish employer-sponsored trade unions of workmen
4. To encourage or discourage membership in any trade union by discriminating against any
workman, that is to say:
a. Discharging or punishing a workman, because he urged other workmen to join or organize a
trade union;
b. Discharging or dismissing a workman for taking part in the strike (not being a strike which is
deemed to be an illegal strike under this act);
c. Changing seniority rating of workmen because of trade union activities;
5. To discharge or dismiss workmen
a. By way of victimization;
b. Not in good faith, but the colorable exercise of the employer's rights;
c. By falsely implicating a workman in a criminal case on false evidence or concocted evidence;
d. For patently false reasons;
e. On untrue or trumped-up allegations of absence without leave;
f. In utter disregard of the principles of natural justice in the conduct of a domestic inquiry or
with undue haste;
g. For misconduct of a minor technical character, without having any regard to the nature of the
particular misconduct or the record or service of the workman, thereby leading to
disproportionate punishment.
6. To abolish the work of a regular nature being done by workmen, and to give such work to
contractors as a measure of breaking a strike.
7. To transfer a workman mala fide from one place to another, under the guise of following
management policy.

Notes
8. To insist upon individual workmen, who are on a legal strike to sign a good conduct bond, as a
precondition to allowing them to resume work.
9. To show favoritism or partiality to one set of workers regardless of merit.
10.To employ workmen as "badlis", casuals or temporaries, and to continue them as such for years,
with the object of depriving them of the status and privileges of permanent workmen.
11. To discharge or discriminate against any workman for filing charges or testifying against an
employer in any inquiry or proceeding relating to any industrial dispute.
12. To recruit workmen during a strike that is not illegal.
13. Failure to implement award, settlement, or agreement.
14. To indulge in acts of force or violence.
15. To refuse to bargain collectively, in good faith with the recognized trade unions.
16. Proposing or continuing a lock-out deemed to be illegal under this Act.
Unfair labor practices on the part of workmen and trade unions of workmen
1. To advise or actively support or instigate any strike deemed to be illegal under this Act.
2. For a recognized union to refuse to bargain collectively in good faith with the employer.
3. To indulge in coercive activities against the certification of a bargaining representative.
4. To coerce workmen in the exercise of their right to self-organization or to join a trade union
or refrain from, joining any trade union, that is to say:
a. For a trade union or its members to picket in such a manner that non-striking workmen are
physically debarred from entering the workplaces;
b. To indulge in acts of force or violence or to hold out threats of intimidation in connection with
a strike against non-striking workmen or managerial staff.
5. To stage, encourage, or instigate such forms of coercive actions as willful, "go-slow", squatting on
the work premises after working hours, or "gherao" of any of the members of the managerial or
other staff.
6. To stage demonstrations at the residence of the employers or the managerial staff members.
7. To incite or indulge in willful damage to employer's property connected with the industry.
8. To indulge in acts of force or violence or to hold out threats of intimidation against any workman
to prevent him from attending work.
Case Study 01:

• In Devendra Kumar C. Solanki v. State of Gujarat and Others, Gujarat High
Court has held that the work done by the concerned workmen was the same as
that of permanent workmen and they also worked for a similar number of
hours.
• But, the discrepancy in payment of wages between permanent and non-
permanent workmen is alarming, same to be construed as unfair labor practices
as defined under section 2(ra) of the Act.
Case Study 02:

• In Eveready Flash Light Company v. Labour Court Bareilly, the company
appointed a workman on a daily rate basis on 18th January 1958 after trying
him for four days.

Notes
• On 12th April 1958, he was appointed on probation for 6 months which could
be further extended by the company at its discretion.
• He was elected as a member of the working committee of the union on
September 9, 1958.
• On 10th September, the management served him with a notice of warning that
despite repeated warnings he had shown no improvement in his work.
• The warning was repeated on 11th October. On 21st November 1958, his
services were terminated.
• The union raised an industrial dispute and the Labor Court found no
justification for putting the workman on probation after he had been tried and
that the condition of putting him on probation as communicated by letter of
12th April was just to delay making him a permanent employee.
The company preferred a petition in the Allahabad High Court. It was held that:
o A condition of employment which is designed to invest the employer with arbitrary power to
keep the workmen at his mercy as regards his chance of being made permanent and to
eventually lead to depriving him of such chance would amount to unfair labor practice.
o It was further observed that it is not necessary that there must be numerous transactions
before the employer could be branded guilty of unfair labor practice and that he could be held
guilty of such practice in respect of one contract of employment only.
Summary
 Industrial Disputes Act, 1947 - An Act to make provision for the investigation and settlement
of industrial disputes, and for certain other purposes.
 Conciliation Officer - The Conciliation Officer makes efforts to resolve the dispute through
settlement between the workmen and the management. The duties of Conciliation Officers
have been laid down under Section 12 of the Industrial Disputes Act
 Board of Conciliation - The appropriate Government may as occasion arises by notification
in the Official Gazette constitute a Board of Conciliation for promoting the settlement of an
industrial dispute. (2) A Board shall consist of a chairman and two or four other members, as
the appropriate Government thinks fit.
 Labour Court - The Labour Court is not a court of law. It operates as an industrial relations
tribunal, hearing both sides in a case and then issuing a Recommendation (or
Determination/Decision/Order, depending on the type of case) setting out its opinion on the
dispute and the terms on which it should be settled.
 Industrial Tribunal - The Industrial Tribunal is a juridical Tribunal made up of a chairman
and two members (one representing Workers' interests and the other Employers' interests)
drawn up from separate panels in the case of an Industrial Dispute whilst of a chairman alone
in the case of alleged unfair dismissal.
 National Tribunal - National Tribunal means the tribunal of RSL National established to hear
and determine appeals from State Branch Tribunal and other disciplinary matters in
accordance with the National Constitution.
Keywords
Industrial Disputes Act, 1947 - An Act to make provision for the investigation and settlement of
industrial disputes, and for certain other purposes.

Notes
Conciliation Officer - The Conciliation Officer makes efforts to resolve the dispute through
settlement between the workmen and the management. The duties of Conciliation Officers have been
laid down under Section 12 of the Industrial Disputes Act
Board of Conciliation - The appropriate Government may as occasion arises by notification in the
Official Gazette constitute a Board of Conciliation for promoting the settlement of an industrial
dispute. (2) A Board shall consist of a chairman and two or four other members, as the appropriate
Government thinks fit.
Labour Court - The Labour Court is not a court of law. It operates as an industrial relations tribunal,
hearing both sides in a case and then issuing a Recommendation (or Determination/Decision/Order,
depending on the type of case) setting out its opinion on the dispute and the terms on which it should
be settled.
Industrial Tribunal - The Industrial Tribunal is a juridical Tribunal made up of a Chairman and two
members (one representing Workers' interests and the other Employers' interests) drawn up from
separate panels in the case of an Industrial Dispute whilst of a chairman alone in the case of alleged
unfair dismissal.
National Tribunal - National Tribunal means the tribunal of RSL National established to hear and
determine appeals from State Branch Tribunal and other disciplinary matters in accordance with the
National Constitution.
Self Assessment
1. In which year did the act come into operation?
A. 1947
B. 1949
C. 1953
D. 1963
2. To which settlement machinery can the central government refer the disputes under rule 81 -
A?
A. Conciliation
B. Arbitration
C. Adjudicator
D. Supreme Court
3. Before the industrial disputes act was implemented in the year 1947, which act took care of the
industrial disputes?
A. Trade Disputes Act, 1929

B. Royal Commission on Labour, 1934
C. Labour Management Relations Act, 1947
4. Choose the correct option that correctly states out the defect in the Trade Disputes Act, 1929.
A. Restraints imposed on the rights of strike

B. To render the proceedings unstatutable under the Act for the settlement of an industrial
dispute
C. Solution to industrial unrest
D. All of the above

Notes
5. The bill passing rule 81A has made two new institutions for the prevention and settlement of
industrial disputes, i.e. Work Committees and _______
A. Industrial Tribunal
B. Commission on Labour
C. Arbitration
D. Adjudication
6. The industrial peace is secured through voluntary _______ and compulsory ________
A. Compromise and Arbitration

B. Adjudication and Arbitration
C. Work Committee and Industrial Tribunal
D. Negotiation and Adjudication
7. Choose the correct objective of the Industrial Disputes Act.
A. To prevent illegal strikes

B. To promote measures for securing and preserving good relations between the employers and
the employees
C. To provide relief to workmen in matters of lay - offs, retrenchment, wrongful dismissals
D. All of the above
8. State true or false

i. Industrial disputes act can be described as the milestone in the historical development of
industrial law in India.
A. True
B. False
9. The act was first amended in the year ______
A. 1929
B. 1946
C. 1947
D. 1949
10. Power has been given to _______________ to require Works Committee to be constituted in
every industrial establishment employing 100 workmen or more.
A. Appropriate Government
B. State Government
C. High Court
D. Board of Conciliation
11. When did the Industrial Disputes Act,, come into force?
A. 01 April 1949
B. 01 March 1948

Notes
C. 01 May 1947
D. 01 April 1947
12. Which section of the Industrial Disputes Act, 1947 deals with the finality of orders
constituting Boards, etc?
A. Section 12 of the Industrial Disputes Act, 1947

B. Section 9 of the Industrial Disputes Act, 1947
C. Section 14 of the Industrial Disputes Act, 1947
D. None of these
13. Which section of the Industrial Disputes Act, 1947 deals with “Labour Courts”_ ?

D. Section 8 of the Industrial Disputes Act, 1947
14. Section 28 of the Industrial Disputes Act, 1947 deals with_______?
A. Power to make rules.

B. Penalty for giving financial aid to illegal strikes and lock-outs.
C. Delegation of powers.
D. Courts of Inquiry
15. Illegal strikes and lock-outs., is provided in section____ of the Industrial Disputes Act, 1947

D. Section 28 of the Industrial Disputes Act, 1947
l. A 2. C 3. A 4. B 5. A
6. D 7. D 8. A 9. D 10. A
11. D 12. B 13. A 14. B 15. C
Review Questions
1. Are you aware about the authorities under Industrial Disputes Act, 1947. Enlist them.
2. What is the difference between Strikes and Lockout?
3. Enumerate the different provisions of Strikes and Lock-out.
4. Enumerate the provisions related to retrenchment in Industrial Disputes Act.
5. Enlist the provisions related to closure in Industrial Disputes Act.

Notes
6. What do you understand by the unfair labour practices on the part of employers.
7. What do you understand by the unfair labour practices on the part of employees.
Further Readings

Notes
Unit 13: Industrial Employment (Standing Orders) Act, 1946


CONTENTS
Objectives
Introduction
13.1 Industrial Employment (Standing Orders) Act, 1946
13.2 Industrial Relations Code, 2020
13.3 Scope & Applicability
Summary
Keywords
Self Assessment
Review Questions
Further Readings
Objectives
• Understand the context of The Industrial Employment (Standing Orders) Act, 1946.
• Get an awareness about Industrial Relations Code 2020
Introduction
A contract of employment is a category of contract used in labor law to attribute right and
responsibilities between parties to a bargain. On the one end stands an "employee" who is "employed"
by an "employer". It has arisen out of the old master-servant law, used before the 20th century.
The terms and conditions of an Employment contract signify the working style and culture of an
organization. While employing a person in your organization or commercial set up, you need to
define the relationship in a fair and unambiguous manner. Our Employment contract helps you
protect the interests of the organization while being fair to the employee.
13.1 Industrial Employment (Standing Orders) Act, 1946

An Act require employers in industrial establishments formally to define Conditions of employment
under them:
Whereas it is expedient to require employers in industrial establishments to define with sufficient
precision the conditions of employment under them and to make the said conditions known to
workmen employed by them.
It is hereby enacted as follow:
1. Short title, Extent and Application:

(1) This act may be called the Industrial Employment (Standing Orders) Act, 1946.
(2) It extends to the whole of India.
(3) It applies to every industrial establishment wherein one hundred or more workmen are employed,
or were employed on any day of the preceding twelve months:

Notes
Provided that the appropriate Government may, after giving not less than two months' notice of its
intention so to do, by notification in the Official Gazette, apply the provisions of this Act to any
industrial establishment employing such number of number of persons less than one hundred as
may be specified in the notification.
(4) Nothing in this Act shall apply to:
(i) Any industry to which the provisions of Chapter VII of the Bombay Industrial Relations Act, 1946,
apply; or
(ii) Any industrial establishment to which the provisions of the Madhya Pradesh Industrial
Employment (Standing Orders) Act, 1961 apply:
Provided that notwithstanding anything contained in the Madhya Pradesh Industrial Employment
(Standing Orders) Act, 1961, the provisions of this Act shall apply to all industrial establishments
under the control of the Central Government.
History of the Act:

The Act has been amended by the Indian Independence (Adaptation of Central Acts and Ordinances
) Order, 1943; The A.O. 1950; Act 3 of 1951; Act 36 of 1956; Act 16 of 1961; Act 39 of 1963; 51 of 1970
and 18 of 1982.
Object of the Act:

That the object of the Act is to have uniform Standing Orders providing for the matters enumerated
in the Schedule to the Act, that it was not intended that there should be different conditions of service
for those who are employed before and those employed after the Standing Orders came into force
and finally, once the Standing Orders come into the force, they bind all those presently in the
employment of the concerned establishment as well as those who are appointed thereafter. Agra
Electric Supply Co. Ltd. v. Aladdin, (1969) 2 SCC 598; U.P. Electric Supply Co. Ltd. v. Their Workman,
(1972) 2 SEC 54.
2. Interpretation:
In this Act, unless there is anything repugnant in the subject or context:
(a)"appellate authority" means an authority appointed by the appropriate Government by

notification in the Official Gazette to exercise in such area as may be specified in the notification the
functions of an appellate authority under this Act:
[Provided that in relation to an appeal pending before an Industrial Court or other authority
immediately before the commencement of the Industrial Employment (Standing Orders)
Amendment Act, 1963, that Court or authority shall be deemed to be the appellate authority]
b) "appropriate Government" means in respect of industrial establishments under the control of

the Central Government or a [Railway administration] or in a major Port, mine or oil field, the Central
Government, and in all other in all other cases the State Government]
[Provided that where question arises as to whether any industrial establishment is under the control
of the Central industrial establishment is under the control of the Central Government that
Government may, either on a reference made to it by the employer or the workman or a trade union
or other representative body of the workmen, or on its own motion and after giving the parties an
opportunity of being heard, decide the question and such decision shall be final and binding on the
parties]
(c) "Certifying Officer" means a Labour Commissioner or a Regional Labour Notes

Commissioner, and includes any other officer appointed by the appropriate Government, by
notification in the Official Gazette, to perform all or any of the functions of a Certifying Officer under
this Act:
(d) "employer" means the owner of an industrial establishment to which this Act for the time being
applies, and includes:

Notes
(i) In a factory, any person named under [clause (f) of sub-section (1) of Section 7 of the Factories Act,
1948], as manager of the factory;
(ii) In any industrial establishment under the control of any department of any Government in India,
the authority appointed by such Government in this behalf, or where no authority is so appointed,
the head of the department;
(iii) In any other industrial establishment, any person responsible to the owner for the supervision
and control of the industrial establishment;
(e) "industrial establishment" means

(i) An industrial establishment as defined in clause (ii) of Section 2 of the Payment of Wages Act,
1936, or
(ii) A factory as defined in clause (m) of Section 2 of the Factories Act, 1948, or
(iii) A railway as defined in clause (4) of Section 2 of the Indian Railway Act, 1890, or
(iv) The establishment of a person who, for the purpose of fulfilling a contract with the owner of any
industrial establishment, employs workmen;
(f) "Prescribed' means prescribed by rules made by the appropriate Government under this Act;
(g) "Standing orders" means rules relating to matters set out in the Schedule;
(h) "Trade union" means a trade union for the time being registered under the Indian Trade Union
Act, 1926;
(i) "wages" and "workman" have the meanings respectively assigned to them in clauses (rr) and
(s) of Section 2 of the Industrial Disputes Act, 1947 (14 of 1947).
3. Submission of draft standing orders

(1) Within six months from the date on which this Act becomes applicable to an industrial
establishment, the employer shall submit to the Certifying Officer five copies of the draft standing
orders proposed by him for adoption in this industrial establishment.
(2) Provision shall be made in such draft for every matter set out in the Schedule which may be
applicable to the industrial establishment, and where Model standing orders have been prescribed
shall be, so far as is practicable, in conformity with such model.
(3) The draft standing orders submitting under this section shall be accompanied by a statement
giving prescribed particulars of the workmen employed in the industrial establishment including the
name of the trade union, if any, to which they belong
(4) Subject to such conditions as may be prescribed, a group of employers in similar industrial
establishments may submit a joint draft of standing orders under this section.
4. Conditions for certification of standing orders

Standing orders shall be certifiable under this Act if–
(a) Provision is made therein for every matter set out in the Schedule, which is applicable to the
industrial establishment, and
(b) The standing orders are otherwise in conformity with the provisions of this Act;
and it [shall be the function] of the Certifying Officer or appellate authority to adjudicate upon the
fairness or reasonableness of the provisions of any standing orders.
5. Certification of standing orders:

(1) On receipt of the draft under Section3, the Certifying Officer shall forward a copy thereof to the
trade union, if any, of the workmen, or where there is no such trade union, if any, of the workmen or
where there is no trade union, to the workmen in such manner as may be prescribed, together with

Notes
a notice in the prescribed form requiring objections, if any, which the workmen may desire to make
to the draft standing orders to be submitted to him within fifteen days from the receipt of the notice.
(2) After giving the employer and the trade union or such other representatives of the workmen as
may be prescribed an opportunity of being heard, the Certifying Officer shall decide whether or not
any modification of or addition to the draft submitted by the employer is necessary to render the
draft standing orders certifiable under this Act and shall make an order in writing accordingly.
(3) The Certifying Officer shall thereupon certify the draft standing orders, after making any
modifications there in which his order under sub-section (2) may require and shall within seven days
thereafter send copies of the certified standing orders authenticated in the prescribed manner and of
his order under sub-section (2) to the employer and to the trade union or other prescribed
representatives of the workmen.
6. Appeals
1) [Any employer, workmen, trade union or other prescribed representatives of the workmen]
aggrieved by the order of the Certifying Officer under sub-section (2) of Section 5 may, within [thirty
days] from the date on which copies are sent under subsection (3) of that section, appeal to the
appellate authority, and the appellate authority, whose decision shall be final, shall by order in
writing confirm the standing orders either in the form certified by the Certifying Officer or after
amending the said standing orders by making such modifications thereof or additions there to as it
thinks necessary to render the standing orders certifiable under this Act.
(2) The appellate authority shall, within seven days of its order under sub-section (1) send copies
thereof to the Certifying Officer, to the employer and to the trade union or other prescribed
representatives of the workmen, accompanied, unless it has confirmed without amendment the
standing orders as certified by the Certifying Officer, by copies of the standing orders a certified by
it and authenticated in the prescribed manner.
7. Date of operation of standing orders

Standing orders shall, unless an appeal is preferred under Section 6, come into operation on the
expiry of thirty days from the date on which authenticated copies thereof are sent under sub-section
(3) of Section 5, or where an appeal as aforesaid is preferred, on the expiry of seven days from the
date on which copies of the order of the appellate authority are sent under sub-section (2) of Section
6.
8. Register of standing orders

A copy of all standing orders as finally certified under this Act Notes shall be filed by the Certifying
Officer in a register in the prescribed form maintained for the purpose, and the Certifying Officer
shall furnish a copy there of to any person applying there for on payment of the prescribed fee.
9. Posting of standing orders

The text of the standing orders as finally certified under this Act shall be prominently posted by the
employer in English and in the language understood by the majority of his workmen on special
boards to be maintained for the purpose at or near the entrance through which the majority of the
workmen enter the industrial establishment and in all departments thereof where the workmen are
employed.
10. Duration and modification of standing orders

(1) Standing orders finally certified under this Act shall not, except on agreement between the
employer and the workmen [or a trade union or other representative body of the workmen] be liable
to modification until the expiry of six months from the date on which the standing orders or the last
modifications thereof came into operation.

Notes
(2) Subject to the provisions of sub-section (1), an employer or workman [or a trade union or other
representative body of the workmen] may apply to the Certifying Officer to have the standing orders
modified, and such application shall be accompanied by five copies of the modifications proposed to
be made, and where such modifications are proposed to be made by agreement between the
employer and the workmen 19 [or a trade union or other representative body of the workmen], a
certified copy of that agreement shall be filed along with the application.
(3) The foregoing provisions of this Act shall apply in respect of an application under sub-section (2)
as they apply to the certification of the first standing orders.
(4) Nothing contained in sub-section (2) shall apply to an industrial establishment in respect of which
the appropriate Government is the Government of the State of Gujarat or the Government of the State
of Maharashtra.
10A. Payment of subsistence allowance

(1) Where any workman is suspended by the employer pending investigation or inquiry into
complaints or charges of misconduct against him, the employer shall pay to such workman
subsistence allowance–
(i) At the rate of fifty per cent of the wages which workman was entitled to immediately preceding
the date of such suspension, for the first ninety days of suspension; and
(ii) At the rate of seventy-five per cent of such wages for the remaining period of suspension if the
delay in the completion of disciplinary proceedings against such workman is not directly attributable
to the conduct of such workman.
(2) If any dispute arises regarding the subsistence allowance payable to a workman under sub-
section (1), the workman or the employer concerned may refer the dispute to the Labor Court,
constituted under the Industrial Disputes Act, 1947 (14 of 1947), within the local limits of whose
jurisdiction the industrial establishment wherein such workman is employed is situate and the Labor
Court to which the dispute is so referred shall, after giving the parties an opportunity of being heard,
decide the dispute and such decision shall be final and binding on the parties.
(3) Notwithstanding anything contained in the foregoing provisions of this section, where provisions
relating to payment of subsistence allowance under any other law for the time being in force in any
State are more beneficial than the provisions of this section, the provisions of such other law shall be
applicable to the payment of subsistence allowance in that State.
11. Certifying officers and appellate authorities to have powers of Civil Court
(1) Every Certifying Officer and appellate authority shall have all the powers of a Civil Court for the
purposes of receiving evidence, administering oaths, enforcing the attendance of witnesses, and
compelling the discovery and production of documents, and shall be deemed to be a Civil Court
within the meaning of [Sections 345 and 346 of the Code of Criminal Procedure, 1973 (2 of 1974)]
(2) Clerical or arithmetical mistakes in any order passed by a Certifying officer or appellate authority,
or errors arising therein from any accidental slip or omission may, at any time, be corrected by that
Officer or authority or the successor in office of such officer or authority, as the case may be.
12. Oral evidence in contradiction of standing orders not admissible

No oral evidence having the effect of adding to or otherwise varying or contradicting standing orders
finally certified under this Act shall be admitted in any Court.
12A. Temporary application of model standing orders

(1) Notwithstanding anything contained in Sections 1 to12, for the period commencing on the date
on which this Act becomes applicable to an industrial establishment and ending with the date on
which the standing orders as finally certified under this Act come into operation under Section 7 in
that establishment, the prescribed model standing orders shall be deemed to be adopted in that

Notes
establishment, and the provisions of Section 9, sub-section (2) of Section 13 and Section 13-A shall
apply to such model standing orders as they apply to the standing orders so certified.
(2) Nothing contained in sub-section (1) shall apply to an industrial establishment in respect of which
the appropriate Government is the Government of the State of Gujarat or the Government of the State
of Maharashtra.
Section 12-A.–Where there are two categories of workmen, one in respect of the daily rated workmen
and the other in respect of the monthly rated workmen, if there are certified standing orders in respect
of the daily rated workers only, the prescribed model standing orders should be deemed to have
been adopted for those who are employed on the monthly basis until such categories have their own
certified standing orders.
13. Penalties and Procedure

(1) An employer who fails to submit draft standing orders as required by Section 3 or who modifies
his standing orders otherwise than in accordance with Section 10, shall be punishable with fine which
may extend to five thousand rupees, and in the case of a continuing offence with a further fine which
may extend to two hundred rupees for every day after the first during which the offence continues.
(2) An employer who does any act in contravention of the standing orders finally certified under this
Act for his industrial establishment shall be punishable with fine which may extend to one hundred
rupees, and in the case of a continuing offence with a further fine which may extend to twenty-five
rupees for every day after the first during which the offence continues.
(3) No prosecution for an offence punishable under this section shall be instituted except with the
previous sanction of the appropriate Government.
(4) No Court inferior to that of [a Metropolitan or Judicial Magistrate of the second class] shall try
any offence under this section.
13A. Interpretation, etc., of standing orders

If any question arises as to the application or interpretation of a standing order certified under this
Act, any Employer or workman [or a trade union or other representative body of the workmen] may
refer the question to any one of the Labour Courts constituted under the Industrial Disputes Act,
1947, and specified for the disposal of such proceeding by the appropriate Government by
notification in the Official Gazette, and the Labour Court to which the question is so referred shall,
after giving the parties an opportunity of being heard, decide the question and such decision shall be
final and binding on the parties.
13B. Act not to apply to certain industrial establishments.

Nothing in this Act shall apply to an industrial establishment in so far as the workmen employed
therein are persons to whom the Fundamental and Supplementary Rules, Civil Services
(Classification, Control and Appeal) Rules, Civil Services (Temporary Service) Rules, Revised Leave
Rules, Civil Service Regulations, Civilians in Defense Service (Classification, Control and Appeal)
Rules or the Indian Railway Establishment Code or any other rules or regulations than may be
notified in this behalf by the appropriate Government in the Official Gazette, apply.
14. Power of exempt

The appropriate Government may by notification in the Official Gazette exempt, conditionally or
unconditionally any industrial establishment or class of industrial establishments from all or any of
the provisions of this Act.
14A. Delegation of powers

The appropriate Government may by notification in the Official Gazette, direct that any power
exercisable by it under this Act or any rules made thereunder shall, in relation to such matters and
subject to such conditions, if any, as may be specified in the direction, be exercisable also–

Notes
(a) where the appropriate Government is the Central Government, by such officer or authority
subordinate to the Central Government or by the State Government, or by such officer or authority
subordinate to the State Government, as may be specified in the notification;
(b) where the appropriate Government is a State Government, by such officer or authority
subordinate to the State Government, as may be specified in the notification.
15. Power to make rules

(1) The appropriate Government may after previous publication, by notification in the Official
Gazette, make rules to carry out the purposes of this Act.
(2) In particular and without prejudice to the generality of the foregoing power, such rules may:
(a) prescribe additional matters to be included in the Schedule, and the procedure to be followed in
modifying standing orders certified under this Act in accordance with any such addition;
(b) set out model standing orders for the purposes of this Act;
(c) prescribe the procedure of Certifying Officers and appellate authorities;
(d) prescribe the fee which may be charged for copies of standing orders entered in the register of
standing orders;
(e) provide for any other matter which is to be or may be prescribed;
Provided that before any rules are made under clause (a) representatives of both employers and
workmen shall be consulted by the appropriate Government.
(3) Every rule made by the Central Government under this section shall be laid as soon as may be
after it is made, before each House of Parliament while it is in session for a total period of thirty days
which may be comprised in one session or [in two or more successive sessions, and if, before the
expiry of the session immediately following the session or the successive sessions aforesaid] both
Houses agree in making any modification in the rule or both Houses agree that the rule should not
be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case
may be ; so however that any such modification or annulment shall be without prejudice to the
validity of anything previously done under that rule.
13.2 Industrial Relations Code, 2020

The Industrial Relations Code, 2020 provides a broader framework to protect the rights of workers
to make unions, to reduce the friction between the employers, and workers and to provide
regulations for settlement of industrial disputes.
The Code is prepared after amalgamating, simplifying and repealing following 3 central labor acts:
i. The Trade Unions Act, 1926
ii. The Industrial Employment (Standing Orders) Act, 1946
iii. The Industrial Disputes Act, 1947
13.3 Scope & Applicability

The Code is designed to consolidate & amend the laws regarding Trade Unions, conditions of
employment in Industrial establishment or undertaking, and sleek settlement of industrial disputes.
The code regulates the subsequent areas:
• Registration of Trade Union

• Cancellation of Trade Union
• Alteration of Name of Trade Union
• Formation of Work Committee
• Incorporation of a Registered Trade Union

Notes
• Recognition of Negotiating Union

• Preparation of Standing Order
• Register of Standing Order
• Constitution of Industrial Tribunal
• Illegal Strikes and Lock-outs
• Procedure for Retrenchment and Re-employment of Retrenched Worker
• Compensation to Workers in case of Transfer of Establishment
• Prohibition of Lay-off
• Closure of an Industrial Establishment
Objective
• The Code designated to safeguard the rights of employers and employees by providing easy
labor reforms and to facilitate ease of Doing Business.
• The object of the Code is to realize industrial peace and harmony as the ultimate pursuit in
resolving industrial disputes and to advance the progress of industry by bringing about the
existence of harmony and cordial relationship between the employers and workers.
Key Definitions
1. Industry means any systematic activity carried on by co-operation between an employer and
for the production, supply or distribution of goods or services with a view to satisfy human
wants or wishes, whether or not:
I. any capital has been invested for the purpose of carrying on such activity.
II. such activity is carried on with a motive to make any gain or profit, but does not include:
III. institutions owned or managed by organizations wholly or substantially engaged in any
charitable, social or philanthropic service
IV. any activity of the appropriate Government relatable to the sovereign functions of the appropriate
Government including all the activities carried on by the departments of the Central Government
dealing with defense research, atomic energy and space any domestic service.
V. any other activity as may be notified by the Central Government.
2. Employer means a person who employs, whether directly or through any person, or on his behalf
or on behalf of any person, one or more employee or worker in his establishment and where the
establishment is carried on by any department of the Central Government or the State Government,
the authority specified by the head of the department in this behalf or where no authority is so
specified, the head of the department, and in relation to an establishment carried on by a local
authority, the chief executive of that authority, and includes:
I. in relation to an establishment which is a factory, the occupier of the factory,
II. where a person has been named as a manager of the factory
III. in relation to any other establishment, the person who, or the authority which has ultimate control
over the affairs or the establishment and where the said affairs are entrusted to a manager or
managing director, such manager or managing director; contractor and legal representative of a
deceased employer.
3. Employee means any person other than an apprentice engaged under Apprentices Act, 1961
employed by an industrial establishment to do any skilled, semi-skilled or unskilled, manual,
operational, supervisory, managerial, administrative, technical or clerical work for hire or reward,
whether the terms of employment be express or implied, and also includes a person declared to be
an employee by the appropriate Government, but does not include any member of the Armed Forces
of the Union.

Notes
4. Worker means any person except an apprentice employed in any industry to do any manual,
unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the
terms of employment be express or implied and includes working journalists, and includes any such
person who has been, dismissed, discharged or retrenched or otherwise terminated in connection
with or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to
that dispute, but does not include any such person:
I. who is subject to the Air Force Act, 1950, or the Army Act, 1950, or the Navy Act, 1957
II. who is employed in the police service or as an officer or other employee of a prison; or
III. who is employed mainly in a managerial or administrative capacity
IV. who is employed in a supervisory capacity drawing wage of exceeding eighteen thousand rupees
(INR 18,000) per month or an amount as may be notified by the Central Government from time to
time.
5. Trade Union means any combination, whether temporary or permanent, formed primarily for
the purpose of regulating the relations between workers and employers or between workers and
workers, or between employers and employers, or for imposing restrictive conditions on the conduct
of any trade or business, and includes any federation of two or more Trade Unions.
6. Retrenchment means termination by the employer of the service of a worker for any reason
whatsoever, otherwise than as a punishment inflicted by way of disciplinary action but does not
include: I. voluntary retirement of the worker II. retirement of the worker on reaching the age of
superannuation III. termination of the service of the worker as a result of the non-renewal of the
contract of employment between the employer.
7. Standing orders means orders relating to matters set out in the First Schedule.
Registration Of Trade Union

Any seven or more members of a trade union by subscribing to their names, apply for registration to
the Authority according to Rules of the Trade Union.
At least ten percent of the workers or 100 workers, whichever is less, must be the members of the
Trade Union on the date of making an application for registration.
Registered Trade Union shall continue to have at least ten percent of the workers or one hundred
workers, whichever is less.
If the name of the Trade Union proposed to be registered is identical with an existing registered Trade
Union, alteration of the name is required as asked by the Registrar of Trade Union.
Registered Trade Union shall be a body incorporate by the registered name, having a common seal
and perpetual succession with the power to hold property.
Constitution of Work Committee

Industrial Establishment having or employed 100 or more workers during a period of 12 months,
may be required to constitute a Work Committee to promote protective measures for securing and
preserving sensible relations between the employer and workers.
Recognition of Negotiating Trade Union

• For a Registered trade union, there shall be a negotiating union or council to negotiate with the
employer of the Industrial Establishment.
• If only one Trade Union of workers registered in an industrial establishment then the employer of
such industrial establishment shall recognize such Trade Union as the sole negotiating union of the
workers.
• If more than one Trade Union of registered workers in an Industrial Establishment then at least
fifty-one percent or more of workers on the muster roll of that Industrial Establishment will be
recognized as the sole negotiating union by the employer.

Notes
Grievance Redressal Committee

Industrial Establishment having 20 or more workers shall constitute one or more Grievance Redressal
Committees with the maximum 10 members for resolution of disputes arising out of individual
grievances.
Standing Orders
Industrial Establishment having or employed 300 or more workers on any day of during the period
of 12 months, must prepare the standing orders on the following matters:
• Classification of workers
• Manner of intimating to workers for hours of work holidays, pay-days and wage rates
• Shift Working
• Attendance
• Conditions and procedure of leave and holidays
• Requirement to enter premises by certain gates, and liability to search.
Strikes and Lock-Outs

Every person employed in an Industrial Establishment is prohibited for strikes and lock-out, in
breach of contract:
• without giving 60 days advance notice of strikes and lock-out to the employer
• within fourteen days of giving such notice; or
• before the expiry of the date of strikes and lock-out specified in any such notice; or
• during the pendency of any conciliation proceedings before a conciliation officer and seven days
after the conclusion of such proceedings; or
• during the pendency of arbitration proceedings before an arbitrator & 60 days after conclusion of
such proceedings
Change in the Conditions of Service

The employer is required to send a notice of change in the conditions of service in the following
matters, to the workers being affected:
• wages, compensatory and other allowances
• contribution paid, or payable, by the employer to any provident fund or pension fund or for the
benefit of workers under any law for the time being in force
• hours of work and rest intervals
• leave with wages and holidays
• starting, alteration, or ending of shift operating otherwise than in accordance with standing orders
• classification by grades
• withdrawal of any customary concession or privilege or modification in usage
• introduction of recent provisions for discipline, or alteration of existing rules, except in so far as
they are provided in standing orders
• rationalization, standardization, or improvement of plant or technique that is likely to lead to
retrenchment of workers any increase or reduction in the no of persons employed or to be employed
in any occupation or process or department or shift, not occasioned by circumstances over which the
employer has no control.

Notes
Retrenchment
• Provides procedures for the retrenchment of workers and the re-employment of the
retrenched worker.
• For the retrenchment, the employer must either give three months’ notice or pay the
retrenched worker in lieu of the notice period.
• Where any worker is retrenched and the employer proposes to take into his employment any
person within one year of such retrenchment, an opportunity will be given to the retrenched
workers who are citizens of India to offer themselves for re-employment.
Lay-Off
Lay-off is the inability of an employer from giving employment to a worker due to multiple factors
such as shortage of coal, power, or breakdown of machinery. Non-seasonal industrial establishment
(i.e. mines, factories, and plantations) with 50 to 300 workers is required to:
• pay 50% of basic wages and dearness allowance to a worker who has been laid off
• give one month’s notice or wages for the notice period to the retrenched worker.
• non-seasonal industrial establishments with at least 300 workers is required to take prior approval
from central or state government before lay-off, retrenchment or closure
• prior approval before lay-off, retrenchment or closure is required by the non-seasonal Industrial
Establishments with at least 300 workers, from central or state government.
Closure
• Employer intending closure of an Industrial Establishment is required to serve 60 days advance
notice to the Government.
• Provision for compensation in case of Closure to those workers who are in a continuous period of
service not less than one year.
Exemptions
The Code provides that the central or state government may exempt any new establishment or a class
of new establishment from all or any provisions of the Code in the public interest.
Summary
 The terms and conditions of an Employment contract signify the working style and culture of
an organization.
 The Industrial Relations Code, 2020 provides a broader framework to protect the rights of
workers to make unions, to reduce the friction between the employers, and workers and to
provide regulations for settlement of industrial disputes.
 Industrial Employment (Standing Orders) Act, 1946 extends to the whole of India It applies to
every industrial establishment wherein one hundred or more workmen are employed or were
employed on any day of the preceding twelve months.
Keywords
• Industrial Relations

Notes
• Layoff, Retrenchment
• Closure
• Standing Orders
• Trade Union
Self Assessment
Q1. Is the Industrial Employment (Standing Orders) Act, 1946 extends to whole of India?
A. True
B. False
Q2. The Industrial Employment (Standing Orders) Act, 1946 applies to every industrial
establishment wherein ______________ workmen are employed.
A. 250 or more workmen

B. 100 or more workmen
C. 150 or more workmen
D. 200 or more workmen
Q3. Within six months from the date on which The Industrial Employment (Standing Orders)
Act, 1946 becomes applicable to an industrial establishment, the employer shall submit to the
Certifying Officer _____ copies of the draft standing orders proposed by him for adoption in
his industrial establishment.
A. Four
B. Six
C. Five
D. Seven
Q4. The text of the standing orders as finally certified under this Act shall be prominently posted
by the employer in English language only.
A. True
B. False
Q5. A copy of all standing orders as finally certified under this Act shall be filed by the Certifying
Officer in a register in the prescribed form maintained for the purpose.
A. True
B. False
Q6. The Industrial Relations Code-2020 has been passed by Lok Sabha on __________________
A. September 19, 2020

B. September 22, 2020
C. September 29, 2020
D. September 28, 2020
Q7. The Industrial Relations Code-2020 has been passed by Rajya Sabha on __________________

Notes
A. September 19, 2020

B. September 22, 2020
C. September 23, 2020
D. September 28, 2020
Q8. The Industrial Relations Code-2020 has increased the threshold for standing order from 100
to _______ workers.
A. 200
B. 300
C. 400
D. 500
Q9. The Industrial Relations Code-2020 is prepared after amalgamating, simplifying and
repealing how many acts?
A. Four
B. Five
C. Two
D. Three
Q10. For a Registered trade union, there shall be a negotiating union or council to negotiate with
the employer of the Industrial Establishment.
A. True
B. False
Q11. Standing orders will be prepared on which matter as per The Industrial Relations Code-
2020?
A. Classification of workers
B. Shift Working
C. Attendance
D. All of the above
Q12. The employer is required to send a notice of change in the conditions of service in the
following matters, to the workers being affected _______________
A. wages, compensatory and other allowances

B. contribution paid, or payable, by the employer to any provident fund or pension fund
C. hours of work and rest intervals
D. All of the above
Q13. On receipt of the draft under Section 3, the ................................ shall forward a copy thereof
to the trade union.
A. Appropriate Government
B. Certifying Officer
C. Appellate Authority
D. Employer

Notes
Q14. _________________ means termination by the employer of the service of a worker for any
reason.
A. Retrenchment
B. Closure
C. Layoff
Q15. The Industrial Relations Code, 2020 provides a broader framework to:
A. protect the rights of workers to make unions.

B. reduce the friction between the employers.
C. provide regulations for settlement of industrial disputes
D. All of the above

l. A 2. B 3. C 4. B 5. A
6. B 7. C 8. B 9. D 10. A
11. D 12. D 13. A 14. A 15. D
Review Questions
Q1. State the facts about Industrial Employment (Standing Orders) Act, 1946 with relevant situations.
Q2. Discuss the scope & applicability of Industrial Relations Code 2020.
Q3. What are the different conditions of Certification of Standing Orders. Discuss the Certification of
Standing Orders.
Q4. Discuss the scope & applicability of 13.1 Industrial Employment (Standing Orders) Act, 1946
Further Readings

Notes
Jaskiran Kaur, Lovely Professional University Unit 14: Wage Legislation
Unit 14: Wage Legislation

CONTENTS
Objectives
Introduction
14.1 Introduction to Equal Remuneration Act, 1976
14.2 Wage Board
14.3 Code on Wages, 2019
Summary
Keywords
Self Assessment
Review Questions
Further Readings
Objectives
• understand about the different sections under Equal Remuneration Act, 1976.
• understand the meaning of Wage Board.
• become aware about the composition of wage boards
• learn about the objectives of Wage Boards
• become aware about the criticisms of Wage Boards.
• become aware about the different sections of the Code on Wages, 2019.
Introduction
Equal pay for equal work is the concept of labour rights that individuals in the same workplace be
given equal pay. It is most commonly used in the context of sexual discrimination, in relation to the
gender pay gap. Equal pay relates to the full range of payments and benefits, including basic pay,
non-salary payments, bonuses and allowances. Some countries have moved faster than others in
addressing equal pay.
In 1976, the Equal Remuneration Act was passed with the aim of providing equal remuneration to
men and women workers and to prevent discrimination on the basis of gender in all matters relating
to employment and employment opportunities. This legislation not only provides women with a
right to demand equal pay, but any inequality with respect to recruitment processes, job training,
promotions, and transfers within the organization can also be challenged under this Act.
14.1 Introduction to Equal Remuneration Act, 1976

Applicability
Applicable to whole of India.
Overriding Effect

Notes
The provisions of this Act shall have effect notwithstanding anything inconsistent therewith
contained in any other law or in the terms of any award, agreement, or contract of service, whether
made before or after the commencement of this Act, or in any instrument having effect under any
law for the time being in force.
Equal Remuneration
 Duty of employer to pay equal remuneration to men and women workers for same work or
work of a similar nature.
 No employer shall pay to any worker, employed by him in an establishment or employment,
remuneration, whether payable in cash or in kind, at rates less favorable than those at which
remuneration is paid by him to the workers of the opposite sex in such establishment or
employment for performing the same work or work of a similar nature.
 No employer shall, for the purpose of complying with the provisions of sub-section (1), reduce
the rate of remuneration of any worker.
 Where, in an establishment or employment, the rates of remuneration payable before the
commencement of this Act for men and women workers for the same work or work of a similar
nature are different only on the ground of sex, then the higher (in cases where there are only
two rates), or, as the case may be, the highest (in cases where there are more than two rates), of
such rates shall be the rate at which remuneration shall be payable, on and from such
commencement, to such men and women workers.
No Discrimination
 No discrimination to be made while recruiting men and women workers.

 Provided that nothing in this sub-section shall be deemed to entitle a worker to the revision
of the rate of remuneration payable to him or her with reference to the service rendered by
him or her before the commencement of this Act.
 On and from the commencement of this Act, no employer shall, while making recruitment
for the same work or work of a similar nature, [or in any condition of service subsequent to
recruitment such as promotions, training or transfer,] make any discrimination against
women except where the employment of women in such work is prohibited or restricted by
or under any law for the time being in force.
 Provided that the provisions of this section shall not affect any priority or reservation for
Scheduled Castes or Scheduled Tribes, ex-servicemen, retrenched employees or any other
class or category of persons in the matter of recruitment to the posts in an establishment or
employment.
Advisory Committee
• For the purpose of providing increasing employment opportunities for women, the
appropriate Government shall constitute one or more Advisory Committees to advise it
with regard to the extent to which women may be employed in such establishments or
employments as the Central Government may, by notification, specify in this behalf.
• Every Advisory Committee shall consist of not less than ten persons, to be nominated by
the appropriate Government, of which one-half shall be women.
• In tendering its advice, the Advisory Committee shall have regard to the number of women
employed in the concerned establishment or employment, the nature of work, hours of
work, suitability of women for employment, as the case may be, the need for providing
increasing employment opportunities for women, including part-time employment, and
such other relevant factors as the Committee may think fit.
• The Advisory Committee shall regulate its own procedure.
• The appropriate Government may, after considering the advice tendered to it by the
Advisory Committee and after giving to the persons concerned in the establishment or

Notes
employment an opportunity to make representations, issue such directions in respect of

employment of women workers, as the appropriate Government may think fit.
Maintaining Registers
• On and from the commencement of this Act, every employer shall maintain such registers
and other documents in relation to the workers employed by him as may be prescribed.
Inspectors
• The appropriate Government may, by notification, appoint such persons as it may think fit
to be Inspectors for the purpose of making an investigation as to whether the provisions of
this Act, or the rules made thereunder, are being complied with by employers, and may
define the local limits within which an Inspector may make such investigation.
• Every Inspector shall be deemed to be a public servant within the meaning of section 21 of
the Indian Penal Code (45 of 1860).
An Inspector may, at any place within the local limits of his jurisdiction,--
(a) enter, at any reasonable time, with such assistance as he thinks fit, any building, factory,
premises or vessel;
(b) require any employer to produce any register, muster-roll or other documents relating to
the employment of workers, and examine such documents;
(c) take, on the spot or otherwise, the evidence of any person for the purpose of ascertaining
whether the provisions of this Act are being, or have been, complied with;
(d) examine the employer, his agent or servant or any other person found in charge of the
establishment or any premises connected therewith or any person whom the Inspector has
reasonable cause to believe to be, or to have been a worker in the establishment;
(e) make copies, or take extracts from, any register or other document maintained in relation to
the establishment under this Act.
Any person required by an Inspector to produce any register or other document or to give any
information shall comply with such requisition.
Penalties
If after the commencement of this Act, any employer, being required by or under the Act, so to do-
(a) omits or fails to maintain any register or other document in relation to workers employed
by him, or
(b) omits or fails to produce any register, muster-roll or other document relating to the
employment of workers, or
(c) omits or refuses to give any evidence or prevents his agent, servant, or any other person in
charge of the establishment, or any worker, from giving evidence, or
(d) omits or refuses to give any information, he shall be punishable [with simple imprisonment
for a term which may extend to one month or with fine which may extend to ten thousand
rupees or with both].
If, after the commencement of this Act, any employer-
(a) makes any recruitment in contravention of the provisions of this Act, or

(b) makes any payment of remuneration at unequal rates to men and women workers, for the
same work or work of a similar nature, or
(c) makes any discrimination between men and women workers in contravention of the
provisions of this Act, or
(d) omits or fails to carry out any direction made by the appropriate Government under sub-
section (5) of section 6.
He shall be punishable

Notes
• with fine which shall not be less than ten thousand rupees, but which may extend
to twenty thousand rupees or
• with imprisonment for a term which shall be not less than three months but which
may extend to one year or
• with both for the first offence, and with imprisonment which may extend to two
years for the second and subsequent offences
• If any person being required so to do, omits or refuses to produce to an Inspector any
register or other document or to give any information, he shall be punishable with fine
which may extend to five hundred rupees.
Cognizance and Trial of Offences

• No court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the first class
shall try any offence punishable under this Act.
• No court shall take cognizance of an offence punishable under this Act except upon-
(a) its own knowledge or upon a complaint made by the appropriate Government or an officer
authorized by it in this behalf, or
(b) a complaint made by the person aggrieved by the offence or by any recognised welfare
institution or organization.
Power to Make Rules

• The Central Government may, by notification, make rules for carrying out the provisions of
this Act.
• In particular, and without prejudice to the generality of the foregoing power, such rules may
provide for all or any of the following matters, namely:--
(a) the manner in which complaint or claim referred to in sub-section (1) of section 7 shall be
made;
(b) registers and other documents which an employer is required under section 8 to maintain
in relation to the workers employed by him;
(c) any other matter which is required to be, or may be, prescribed.
Every rule made by the Central Government under this Act shall be laid, as soon as may be after it is
made, before each House of Parliament, while it is in session, for a total period of thirty days which
may be comprised in one session or in two or more successive sessions, and if, before the expiry of
the session immediately following the session or the successive sessions aforesaid, both Houses agree
in making any modification in the rule or both Houses agree that the rule should not be made, the
rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so,
however, that any such modification or annulment shall be without prejudice to the validity of
anything previously done under that rule.
Give Directions
• The Central Government may give directions to a State Government as to the carrying into
execution of this Act in the State.
Certain Special Cases

Nothing in this Act shall apply--
a) to cases affecting the terms and conditions of a woman's employment in complying with
the requirements of any law giving special treatment to women, or
b) to any special treatment accorded to women in connection with--
i. the birth or expected birth of a child, or
ii. the terms and conditions relating to retirement, marriage or death or to
any provision made in connection with the retirement, marriage or death.
Power to make declaration

Notes
Where the appropriate Government is, on a consideration of all the circumstances of the case,
satisfied that the differences in regard to the remuneration, or a particular species of remuneration,
of men and women workers in any establishment or employment is based on a factor other than sex,
it may, by notification, make a declaration to that effect, and any act of the employer attributable to
such a difference shall not be deemed to be a contravention of any provision of this Act.
If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by
notification, make any order, not inconsistent with the provisions of this Act, which appears to it to
be necessary for the purpose of removing the difficulty:
Provided that every such order shall, as soon as may be after it is made, be laid before each House of
Parliament.
Repeal and saving

• The Equal Remuneration Ordinance, 1975 (12 of 1975) is hereby repealed.
• Not withstanding such repeal, anything done or any action taken under the Ordinance so
repealed (including any notification, nomination, appointment, order or direction made
thereunder) shall be deemed to have been done or taken under the corresponding
provisions of this Act as if this Act were in force when such thing was done or action was
taken.
14.2 Wage Board

 Wage board is a tripartite body with representatives of management, and workmen,
presided over by an independent person nominated by the Government.
 The board is required to fix wages in accordance with the principles of wage fixation.
 The Wage Boards help to resolve the disputes in a democratic manner by bringing the
parties together, without compulsion on either side.
 It may, however, be pointed out that a Wage Board can only make recommendations, as
there is no legal sanction behind it.
 But for all practical purposes, a Board’s recommendations are regarded as awards, and if
unanimous, are made binding on the parties.
When was the first wage board set up?
The first wage board was set up in 1957 in the Cotton Textile Industry.
Composition of Wage Boards

Tripartite, i.e., it comprises of the representatives from industry, trade unions and the Government.
A wage board is a non-statutory body comprising of equal number of representatives of the
employers and the employees or their trade unions who are appointed by the Government and it is
chaired by a serving or retired judge who is a Government nominee.
Objectives of Wage Board

1. To align the wage settlements with the social and economic policies of the Government.
2. To represent consumers/public the interests.
3. To standardize wage structure throughout the industry concerned.
4. To provide better climate for industrial relations.
5. To work out wage structure based on the principles of fair wages as formulated by the
Committee on Fair Wages.
6. To work out a system of payment by results.
7. To evolve a wage structure based on the requirements of social justice.
8. To evolve a wage structure based on the need for adjusting wage differentials in a manner
to provide incentives to workers for advancing their skill.
Working of Wage Boards

Notes
1. The first step is to prepare a comprehensive questionnaire designed to collect information

on the prevailing wage rates and skill differentials, means of assessing an industry paying
capacity and workloads, prospects for industry in the immediate future, and regional
variations in the prices of widely consumed consumer goods.
The questionnaire is sent out to labour unions, employers associations, interested
individuals, academic organizations and government agencies.
2. The second step is to give a public hearing at which leaders of labor unions and employers
associations, not represented on the board, as well as others interested in the industry in
question are given a verbal or oral bearing on issues dealing with wages, working conditions
and other items.
3. The third step is to convene secret sessions at which members of the board make proposals
and counter – proposals regarding the items covered under the terms of reference. In the
case of failure to reach a unanimous decision on issues, each party has the right to veto the
others decision.
Criticism of Wage Board

1. The recommendations of the Boards have no legal sanction so that the parties are not bound
to accept them.
2. Very often the recommendations of the Boards are results of compromise decisions and
cannot therefore become consistent long range wage policy.
3. When the Government has to legislate for giving effect to the recommendations of a Board,
as it happened in the case of the Textile Board award, the element of compulsion is brought
back, and that militates against the very spirit of such boards.
4. Since the members of the Boards are not always the true representatives of the employers
and workers, individual units are led to doubt the bona fides of the members.
5. The Boards often make recommendations on all-India basis, with the result that at times the
special problems relating to any particular region may be ignored.
6. The time lag between the making of the recommendations and their implementation is
generally very great.
14.3 Code on Wages, 2019

Prohibition of Discrimination on Grounds of Gender
1. There shall be no discrimination in an establishment or any unit thereof among employees
on the ground of gender in matters relating to wages by the same employer, in respect of
the same work or work of a similar nature done by any employee.
2. No employer shall, --
I. for the purposes of complying with the provisions of sub-section (1), reduce the rate of
wages of any employee; and
II. make any discrimination on the ground of sex while recruiting any employee for the same
work or work of similar nature and in the conditions of employment, except where the
employment of women in such work is prohibited or restricted by or under any law for the
time being in force.
The decision as to Disputes With Regard to Same or Similar Nature of Work.
• Where there is any dispute as to whether a work is of the same or similar nature for the
purposes of section 3, the dispute shall be decided by such authority as may be notified by
the appropriate Government.
Payment of Minimum Rate of Wages.
 No employer shall pay to any employee wages less than the minimum rate of wages notified
by the appropriate Government.

Notes
Fixation of Minimum Wages

1. Subject to the provisions of section 9, the appropriate Government shall fix the minimum
rate of wages payable to employees in accordance with the provisions of section 8.
2. For the purposes of subsection (1), the appropriate Government shall fix a minimum rate of
wages--
a) for time work; or
b) for piece work.
3. Where employees are employed on piece work, for the purpose of subsection (1), the
appropriate Government shall fix a minimum rate of wages for securing such employees a
minimum rate of wages on a time work basis.
4. The minimum rate of wages on a time work basis may be fixed in accordance with any one
or more of the following wage periods, namely:--
a) by the hour; or
b) by the day; or
c) by the month.
5. Where the rates of wages are fixed by the hour, day, or month, the manner of calculating
the wages shall be such, as may be prescribed.
6. For the purpose of fixation of the minimum rate of wages under this section, the appropriate
Government,-
a) shall primarily take into account the skill of workers required for working under the
categories of unskilled, skilled, semi-skilled and highly-skilled or geographical area or
both; and
b) may, in addition to such minimum rate of wages for a certain category of workers, take
into account their arduousness of work like temperature or humidity normally difficult
to bear, hazardous occupations or processes or underground work as may be
prescribed by that Government; and
c) The norms of such fixation of the minimum rate of wages shall be such as may be
prescribed.
7. The number of minimum rates of wages referred to in subsection (6) may, as far as possible,
be kept at a minimum by the appropriate Government.
Components of Minimum Wages

1. Any minimum rate of wages fixed or revised by the appropriate Government under section
8 may consist of—
a) a basic rate of wages and an allowance at a rate to be adjusted, at such intervals and in such
manner as the appropriate Government may direct, to accord as nearly as practicable with
the variation in the cost-of-living index number applicable to such workers (hereinafter
referred to as "cost of living allowance");
b) a basic rate of wages with or without the cost-of-living allowance, and the cash value of the
concessions in respect of supplies of essential commodities at concession rates, where so
authorized; or
c) an all-inclusive rate allowing for the basic rate, the cost-of-living allowance and the cash
value of the concessions, if any.
2. The cost-of-living allowance and the cash value of the concessions in respect of supplies of
essential commodities at concession rate shall be computed by such authority, as the
appropriate Government may by notification, appoint, at such intervals and in accordance

Notes
with such directions as may be specified or given by the appropriate Government from time
to time.
Procedure for Fixing and Revising Minimum Wages

1. In fixing minimum rates of wages for the first time or in revising minimum rates of wages
under this Code, the appropriate Government shall either—
a) appoint as many committees as it considers necessary to hold enquiries and recommend in
respect of such fixation or revision, as the case may be; or
b) by notification publish its proposals for the information of persons likely to be affected
thereby and specify a date not less than two months from the date of the notification on
which the proposals shall be taken into consideration.
2. Every committee appointed by the appropriate Government under clause (a) of sub-section
(1) shall consist of persons--
a) representing employers;
b) representing employees which shall be equal in number of the members specified in clause
(a); and
c) independent persons, not exceeding one-third of the total members of the committee.
3. After considering the recommendation of the committee appointed under clause (a) of sub-
section (1) or,
 as the case may be, all representations received by it before the date specified in the
notification under clause (b) of that sub-section,
 the appropriate Government shall by notification fix, or
 as the case may be, revise the minimum rates of wages and
 unless such notification otherwise provides, it shall come into force on the expiry of
three months from the date of its issue:
 Provided that where the appropriate Government proposes to revise the minimum
rates of wages in the manner specified in clause (b) of sub-section (1), it shall also
consult the concerned Advisory Board constituted under section 42.
Power of Central Government to Fix Floor Wage

1. The Central Government shall fix floor wage taking into account minimum living standards
of a worker in such manner as may be prescribed:
Provided that different floor wages may be fixed for different geographical areas.
2. The minimum rates of wages fixed by the appropriate Government under section 6 shall not
be less than the floor wage
and
if the minimum rates of wages fixed by the appropriate Government earlier are more than
the floor wage,
then,
the appropriate Government shall not reduce such minimum rates of wages fixed by it
earlier.
3. The Central Government may, before fixing the floor wage under sub-section (1), obtain the
advice of the Central Advisory Board constituted under sub-section (1) of section 42 and
consult State Governments in such manner as may be prescribed.
Wages of Employee Who Works for Less Than Normal Working Day
• If an employee whose minimum rate of wages has been fixed under this Code by the day
works on any day on which he was employed for a period of less than the requisite number
of hours constituting a normal working day, he shall, save as otherwise hereinafter

Notes
provided, be entitled to receive wages in respect of work done on that day, as if he had
worked for a full normal working day:
Provided that he shall not be entitled to receive wages for a full normal working day-
I. in any case where his failure to work is caused by his unwillingness to work and not by the
omission of the employer to provide him with work; and
II. in such other cases and circumstances, as may be prescribed.
Summary
 It is the duty of employer to pay equal remuneration to men and women workers for same
work or work of a similar nature.
 No employer shall pay to any worker, employed by him in an establishment or employment,
remuneration, whether payable in cash or in kind, at rates less favorable than those at which
 No discrimination to be made while recruiting men and women workers.
Keywords
 Remuneration - Remuneration is the pay or other financial compensation provided in
exchange for an employee's services performed.
 Wage - A wage is payment made by an employer to an employee for work done in a specific
period of time.
 Cognizance - to take notice of and consider something, especially when judging
 Trial - the formal examination before a competent tribunal of the matter in issue in a civil or
criminal cause in order to determine such issue.
 Floor wage - A floor wage is a minimum wage established by law. It functions as a benchmark
for wages to ensure that the wages do not fall below the set limit.
 Minimum wage - As per International Labour Organisation (ILO), minimum wages have been
defined as the minimum remuneration that an employer is required to pay wage earners for
the work performed during a given period. It cannot be less than the floor wage established
by the law. It varies across different categories of workers.
Self Assessment
1. Duty of employer to pay _______ remuneration to men and women workers for same work
or work of a similar nature.
A. equal
B. unequal
C. different
D. comparative
2. No employer shall pay to any worker, employed by him in an establishment or employment,

remuneration, whether payable in cash or in kind, at rates ________ than those at which

Notes
A. less favorable
B. more favorable
C. none of these
D. all of these
3. ________ discrimination to be made while recruiting men and women workers.

A. some
B. No
C. none of these
D. all of these
4. Every Advisory Committee (Equal Compensation Act, 1976) shall consist of not less than ___
persons, to be nominated by the appropriate Government, of which one-half shall be women.
A. Eight
B. Seven
C. Six
D. Ten
5. Every Inspector (Equal Compensation Act, 1976) shall be deemed to be a public servant within
the meaning of section ___ of the Indian Penal Code (45 of 1860).
A. 20
B. 21
C. 22
D. 23
6. The Central Government may give directions to a ___________ as to the carrying into
execution of this Act(Equal Compensation Act, 1976) in the State.
A. State Government
B. Central Government
C. none of these
D. all of these
7. Wage board is a _______ body with representatives of management, and workmen, presided
over by an independent person nominated by the Government.
A. Tripartite
B. Bipartite
C. none of these
D. all of these
8. The Wage board is required to fix wages in accordance with the principles of wage fixation.
A. True
B. False

Notes
9. The Wage Boards help to resolve the disputes in a ________ manner by bringing the parties
together, without compulsion on either side.
A. autocratic
B. bureaucratic
C. democratic
D. none of these
10. No employer shall pay to any employee wages less than the minimum rate of wages notified
by the appropriate Government.
A. True
B. False
11. For the purposes of subsection (1), the appropriate Government shall fix a minimum rate of
wages--
i. for time work; or
ii. for piece work.
A. i
B. ii
C. i and ii
D. none of these
12. For the purpose of fixation of the minimum rate of wages under this section, the appropriate
Government,-
i. shall primarily take into account the skill of workers required for working under the
categories of unskilled, skilled, semi-skilled and highly-skilled or geographical area or both;
and
ii. may, in addition to such minimum rate of wages for a certain category of workers, take into
account their arduousness of work like temperature or humidity normally difficult to bear,
hazardous occupations or processes or underground work as may be prescribed by that
Government; and
iii. The norms of such fixation of the minimum rate of wages shall be such as may be prescribed.
A. i
B. ii
C. i and ii
D. i, ii, and iii
13. Remuneration is the pay or other financial compensation provided in exchange for an
employee's services performed.
A. True
B. False
14. A wage is payment made by an employer to an employee for work done in a specific period
of time.

Notes
A. True
B. False
15. As per ______, minimum wages have been defined as the minimum remuneration that an
employer is required to pay wage earners for the work performed during a given period. It
cannot be less than the floor wage established by the law. It varies across different categories
of workers.
A. WTO
B. ILO
C. IMF
D. none of these

l. A 2. A 3. B 4. D 5. B
6. A 7. A 8. A 9. C 10. A
11. C 12. D 13. A 14. A 15. B
Review Questions
1. What do you understand about the different sections under Equal Remuneration Act, 1976?
2. What do you understand by Wage Board?
3. Elaborate composition of wage boards.
4. What do you about the objectives of Wage Boards?
5. What are the different sections of the Code on Wages, 2019?
Further Readings

Notes
Jaskiran Kaur, Lovely Professional University Unit 15: Factories Act, 1948
Unit 15: Factories Act, 1948

CONTENTS
Objectives
Introduction
15.1 Factories Act, 1948
15.2 Health Provisions, Factories Act 1948
15.3 Safety Measures under Factories Act
Summary
Keywords
Self Assessment
Review Questions
Further Readings
Objectives
 get awareness about different provisions of Factories Act,1948.

 bring awareness about registration process of factories.
 know about the powers of inspectors as per Factories Act,1948.
 understand the health provisions under Factories Act, 1948.
 understand the different provisions of Safety Measures under Factories Act.
 get awareness about different sections of Welfare under the Factories Act, 1948.
 understand the provisions related to Hazardous Process under Factories Act, 1948.
Introduction
Do all the factories need to be registered as per the regulations of Factories Act, 1948?
 Factory Registration in our country is regulated by the provisions of the Factories Act 1948.
 Factories Act regulates the working condition in factories and deals with various problems
concerning the health, safety, efficiency, and well being of the persons at workplaces.
15.1 Factories Act, 1948

Definition of Factory as per Factories Act, 1948
Under the Factories Act, “factory” means any premises:
1. Where ten or more than ten workers are working or were working on any day of the
preceding twelve months, and in any part of which a manufacturing power is being carried
on with the aid of power, or is ordinarily so carried on, or
2. Where twenty or more than twenty workers are working or were working on any day of the
preceding twelve months, and in any part of which a manufacturing process is being carried
on without the aid of power or is ordinarily so carried on.

Notes
Objectives of Factories Act

The main objectives of the Indian Factories Act, 1948are to regulate the working conditions in
factories, to regulate health, safety welfare, and annual leave and enact special provision in respect
of young persons, women and children who work in the factories.
1. Working Hours:
• According to the provision of working hours of adults, no adult worker shall be required or
allowed to work in a factory for more than 48 hours in a week.
• There should be a weekly holiday.
2. Health:
 For protecting the health of workers, the Act lays down that every factory shall be kept clean
and all necessary precautions shall be taken in this regard.
 The factories should have proper drainage system, adequate lighting, ventilation,
temperature etc.
 Adequate arrangements for drinking water should be made.
 Sufficient latrine and urinals should be provided at convenient places.
 These should be easily accessible to workers and must be kept cleaned.
3. Safety:
 In order to provide safety to the workers, the Act provides that the machinery should be
fenced, no young person shall work at any dangerous machine, in confined spaces, there
should be provision for manholes of adequate size so that in case of emergency the workers
can escape.
4. Welfare
 For the welfare of the workers, the Act provides that in every factory adequate and suitable
facilities for washing should be provided and maintained for the use of workers.
 Facilities for storing and drying clothing, facilities for sitting, first-aid appliances, shelters,
rest rooms and lunchrooms, crèches, should be there.
5. Penalties:-
 The provisions of The Factories Act, 1948, or any rules made under the Act, or any order
given in writing under the Act is violated, it is treated as an offence.
 The following penalties can be imposed:-
a) Imprisonment for a term which may extend to one year;
b) Fine which may extend to one lakh rupees; or
c) Both fine and imprisonment.
Which section of Factories act governs the Registration of factories?

Section 6 of the Factories Act governs the registration of factories and establishments.
1. Rules for Submission

 The state government may make rules for the submission of plans or description of factories.
 The organization requires previous permission from the state government or Chief
inspector for the construction or extension of any factory.
 But the addition or replacement of existing machinery does not come into extension if does
not reduce the safe working space and is also not hazardous to the safety and health of the
employees.
2. Nature of Plans and Fees Payable

Notes
 The plans and specifications need to be submitted for acquiring these permissions (Permit
applications).
 It prescribes the nature and specifications of such plans, and from whom it shall be certified.
 It also prescribes the fees payable for registration/ licensing/ renewal of licenses.
3. Renewal of Licenses
 The Act requires the notice period to be given before granting or renewal of licenses.
 Section 7 of Factories act 1948 explains the provisions relating to this.
 As per this section, the occupier of the factory premises needs to serve a written notice to
the related authorities 15 days prior to occupying the premises.
Procedure of Registering a Factory in India

1. An applicant has to apply with duly filled in Form No-2, a set of prescribed documents and
fees prescribed in the proper head of Account in the shape of Treasury Chalan in the office
of Director of Factories & Boilers, of his state.
2. Upon receiving the application, the same is scrutinized by the concerned officer.
3. Post scrutiny, if the documents are found correct, it is processed for approval by the
competent Authority.
4. In case shortcomings are observed then, the applicant is asked to submit the corrected
application in a time-bound manner.
5. Once authorities receive the corrected from the applicant, the application is processed in file
to get approval from the Competent Authority.
6. After approval is given, a registration certificate and a license duly signed by the Competent
Authority are sent by post to the applicant with a covering letter.
Documents Required for Factory Registration

1. Form No-2 or Combined application form for establishment of industries in form 1AA.
2. Construction completion report from management as per the approved plan.
3. Requisite Fee in shape of treasury Chalan in proper Head of Account as per fee structure
notified in from time to time.
4. Resolution of Director/partners nominating one to act as occupier under section 2(n) of
Factories Act.
5. Original copy of Stability Certificate issued by a recognized competent person.
6. Safety & Health Policy for 2(CB) and MAH category factories and other factories are
employing 50 or more workers.
Inspectors
1) The State Government may, by notification in the Official Gazette, appoint such persons as
possessing the prescribed qualification to be Inspectors for the purposes of this Act and may
assign to them such local limits as it may think fit.
2) The State Government may, by notification in the Official Gazette, appoint any person to be
a Chief Inspector who shall, in addition to powers conferred on Chief Inspector under this
Act, exercise the powers of an Inspector throughout the State.
(A) The State Government may, by notification in the Official Gazette, appoint as many
Additional Chief Inspectors, Joint Chief Inspectors and Deputy Chief Inspectors and as

Notes
many other officers as it thinks fit to assist the Chief Inspector and to exercise such of
the powers of the Chief Inspector as may be specified in such notification.
(B) Every additional Chief Inspector, Joint Chief Inspector, Deputy Chief Inspector and
every other officer appointment under sub-section (2A) shall, in addition to the powers
of a Chief Inspector specified in the notification by which he is appointed, exercise the
power of an Inspector throughout the State.
3) No person shall be appointed under sub-section (1), sub-section (2), sub-section (2A) or sub-
section (5), or having been so appointed, shall continue to hold office, who is or becomes
directly or indirectly interested in a factory or in any process or business carried on therein
or in any patent or machinery connected therewith.
4) Every District Magistrate shall be an Inspector for his district.
5) The State Government may also, by notification as aforesaid, appoint such public officers as
it thinks fit to be additional Inspectors for all or any of the purposes of this Act, within such
local limits as it may assign to them respectively.
6) In any area where there are more Inspectors than one the State Government may, by
notification as aforesaid, declare the powers which such Inspectors shall respectively
exercise and the Inspector to whom the prescribed notices are to be sent.
7) Every Chief Inspector, Additional Chief Inspector, Joint Chief Inspector, Deputy Chief
Inspector, Inspector and every other officer appointed under this section, shall be deemed
to be a public servant within the meaning of the Indian Penal Code (XLV of 1860), and shall
be officially subordinate to such authority as the State Government may specify in this
behalf.
Power of Inspectors
Subject to any rules made in this behalf, an Inspector may, within the local limits for which he is
appointed,-
a) enter with such assistants, being persons in the service of the Government, or any local or
other public authority or with an expert, as he thinks fit, any place which is used, or which
he has reason to believe, is used as a factory;
b) make examination of the premises, plant, machinery, article or substance;
c) inquire into any accident or dangerous occurrence, whether resulting in bodily injury,
disability or not, and take on the spot or otherwise statements of any person which he may
consider necessary for such inquiry.
d) require the production of any prescribed register or any other document relating to the
factory.
e) seize, or take copies of, any register, record or other document or any portion thereof, as he
may consider necessary in respect of any offence under this Act, which he has reason to
believe, has been committed;
f) direct the occupier that any premises or any part thereof, or anything lying therein, shall be
left undisturbed (whether generally or in particular respects) for so long as is necessary for
the purpose of any examination under clause (b).
g) take measurements and photographs and make such recordings as he considers necessary
for the purpose of any examination under clause (b), taking with him any necessary
instrument or equipment.
h) in case of any article of substance found in any premises, being an article or substance which
appears to him as having caused or is likely to cause danger to the health or safety of the
workers, direct it to be dismantled or subject it to any process or test (but not so as to damage
or destroy it unless the same is, in the circumstances necessary, for carrying out the purposes
of this Act),

Notes
i) and take possession of any such article or substance or a part thereof and detain it for so
long as is necessary for such examination; exercise such other powers as may be prescribed.
15.2 Health Provisions, Factories Act 1948

• In Factories Act, there are different section which has given details about provisions related
to health concerns.
• These are Section-11 to Section-18.
• Section 11: Cleanliness in every factory
• Section 12: Disposal of effluents and wastes
• Section 13: Ventilation and Temperature
• Section 14: Dust and Fume
• Section 15: Artificial Humidification
• Section 16: Overcrowding
• Section 17: Lighting
• Section 18: Drinking Water
I. Section-11: Cleanliness
Under Section 11, every factory need to keep itself clean and free from effluvia arising from any drain,
privy or other nuisance, and in particular-
1. Accumulation of dirt and refuse should be removed daily by any effective method from the
floors of workrooms and from staircases and passages and disposed of in a suitable and
efficient manner.
2. In case the floor is subject to become wet during the working time, then they should take
proper drainage process or steps.
3. Clean the worker’s floor every week with proper disinfectant or any other effective method
of cleaning.
4. Paint or repaint walls, ceilings, and staircases of the factory once in every 5 years.
5. Repaint the walls once in every 3 years in case of washable water paints.
6. Paint and varnish all doors and window-frames and other wooden or metallic framework
and shutters at least once in a period of 5 years.
II. Section-12: Disposal of Effluents and Wastes
Under this section following things should be considered:
a) It is necessary for the factories to arrange proper and effective waste treatment and its
disposal.
b) The State Government may make rules prescribing the arrangements for the disposal and
treatment of waste and effluents.
III. Section 13: Ventilation and Temperature
1. Effective and suitable provisions should be made in every factory for securing and
maintaining in every workroom proper ventilation by circulation of fresh air. It also
involves providing an adequate temperature at the workplace. For this, they should select
the material of the walls accordingly.
2. The State Government may prescribe a standard of adequate ventilation and reasonable
temperature for any factory or class or description of factories.
3. Lastly, if it appears to the Chief Inspector that excessively high temperature in any factory
can be reduced by the adoption of suitable measures, he can order them to use such a
method.
III. Section 14: Dust and Fume

Notes
1. If dust and fume release in the manufacturing process of a factory, then they should take
effective measures to prevent its inhalation and accumulation in the workplace. For this,
they should use proper exhaust appliances in the workplace.
2. In any factory, no stationary internal combustion engine shall be operated unless the
exhaust is conducted into the open air.
IV. Artificial Humidification
1. In respect of all factories in which the humidity of the air artificially increases, the State
Government may make rules,-
a) Prescribing standards of humidification;
b) Regulating the methods used for artificially increasing the humidity of the air;
c) Directing tests for determining the humidity of the air for correct carrying out and
recording.
d) Prescribing methods for securing adequate ventilation and cooling of the air in the
workrooms.
2. In any factory in which the humidity of the air artificially increases, they should purify the
water (drinking water) before the supply.
VI. Section 16: Overcrowding
1. No room in any factory shall be overcrowded to an extent injurious ID the health of the
workers employed therein.
2. A factory built after the commencement of this Act at least 14.2 cubic meters of space for
every worker employed therein, and for the purposes of this subsection, no account shall be
taken of any space which is more than 4.2 meters above the level of the floor of the room.
3. If the Chief Inspector by order in writing, may or may not post a notice specifying the
maximum number of workers who may be employed in the room.
VII. Section 17: Lighting
1. In every part of a factory where workers are working or passing there shall be provided and
maintained sufficient and suitable lighting, natural or artificial or both.
2. In every factory all glazed windows and skylights used for the lighting of the workrooms
shall be kept clean or both the inner and outer surfaces and, so far as compliance with the
provisions of any rules made under sub-section (3) of Section 13 will allow, free from
obstruction.
3. In every factory effective provision shall, so far as is practicable, be made for the prevention
of:
a) glare, either directly from a source of light or by reflection from a smooth or polished
surface;
b) the formation of shadows to such an extent as to cause eye-strain or the risk of accident to
any worker.
4. The State Government may prescribe standards of sufficient and suitable lighting factories
or for any class or description of factories or for any manufacturing process.
VIII. Drinking Water
This section states that in every factory, there should be proper arrangements for a sufficient supply
of wholesome drinking water and shall be legibly marked as “drinking water”.
IX. Latrines and Urinals
1. In every factory:
a) sufficient latrine and urinal accommodation of prescribed types shall be provided
conveniently situated and accessible to workers at all times while they are at the factory;
b) separate enclosed accommodation shall be provided for male and female workers;

Notes
c) such accommodation shall be adequately lighted and ventilated, and no latrine or urinal
shall, unless specially exempted in writing by the Chief Inspector, communicate with any
workroom except through an intervening open space or ventilated passage;
d) all such accommodation shall be maintained in a clean and sanitary condition at all times;
e) sweepers shall be employed whose primary duty it would be to keep clean latrines, urinals
and washing places
2. In every factory wherein more than two hundred and fifty workers are ordinarily employed:
a) all latrine and urinal accommodation shall be of prescribed sanitary types;
b) the floors add internal walls, up to a height of ninety centimeters of the latrines and urinals
and the sanitary blocks shall be laid in glazed tiles or otherwise finished to provide a smooth
polished impervious surface:
c) without prejudice to the provisions of Clauses d) and e) of subsection (1), the floors, portions
of the walls and blocks so laid or finished, and the sanitary pans of latrines and urinals shall
be thoroughly washed and cleaned at least once in every seven days with suitable
detergents or disinfectants or with both
3. The State Government may prescribe the number of latrines and urinals to be provided in
any factory in proportion to the numbers of male and female workers ordinarily employed
therein, and provide for such further matters in respect of sanitation in factories, including
the obligation of workers in this regard, as it considers necessary in the interest of the health
of the workers employed therein.
X. Spittoons
1. In every factory there shall be provided a sufficient number of spittoons in convenient places
and they shall be maintained in a clean and hygienic condition.
2. The State Government may make rules prescribing the type and the number of spittoons to
be provided and their location in any factory and provided for such further matters relating
to their maintenance in a clean and hygienic condition
3. No person shall spit within the premises of a factory except in the spittoons provided for
the purpose and a notice containing this provision and the penalty for its violation shall be
prominently displayed at suitable places in the premises.
4. Whoever spits in contravention of sub-section (3) shall be punishable with fine not
exceeding five rupees.
15.3 Safety Measures under Factories Act

Section-21 : Fencing the Machinery
This section states that the factory should fence the following machinery or substantial construction
and maintain them in the right position:
a) every moving part of a prime-mover and every flywheel, whether the prime-mover or
flywheel is in the engine-house or not.
b) the headrace and tailrace of every water-wheel and water turbine.
c) Any part of a stock bar projects beyond a lathe’s headstock.
d) Every part of an electric generator, a motor or a rotary converter.
e) every part of transmission machinery.
f) every dangerous part of any other machinery.
Section 22: Work on or Near Machinery in Motion

Notes
a) Firstly, whenever machinery is in motion and it becomes necessary to do the inspection,

lubrication, repairs, etc., the factory should appoint a specially trained expert man, wearing
tight-fitting clothes to do the job.
Moreover, the such worker shall not handle a belt at a moving pulley unless:
1. The belt is not more than fifteen centimetres in width
2. The belt, including the joint and the pulley rim, is in good repair
3. There is a reasonable clearance between the pulley and any fixed plant or structure
4. the pulley is normally for the purpose of the drive
b) Secondly, the factory owners should not allow any woman or young person to clean,
lubricate or adjust any part of a prime-mover or of any transmission machinery while prime-
mover or transmission machinery is in motion.
Section 23: Employment on Dangerous Machines

• This section states that the factory owners or managers cannot allow any worker to work
any machine without instructing him/her about the dangerous outcomes and the relevant
precautions.
• Moreover, before the appointment, the manager has to see that the worker has relevant skills
and knowledge to work on the machinery.
Section 24: Devices for Cutting off Power

This section states:
a) In every factory, there should be suitable devices for cutting off power in emergencies from
running machinery in all the workrooms. In the case of factories which do not belong to this
Act have to just do the arrangements in the workroom in which electricity is used to
generate power.
b) The factory should provide and maintain suitable striking gear or other efficient mechanical
appliances to move driving belts.
c) Driving belts when not in use shall not be allowed to rest.
Section 25: Self-Acting Machinery

This section states that no factory should allow any traversing part of a self-acting machine in any
factory to run within a distance of forty-five centimeters from any fixed structure which is not part
of the machine.
Section 26: Casing of New Machinery

In all machinery driven by power and installed in any factory after the commencement of this Act,-
a) every set screw, bolt or key on any revolving shaft, spindle, or wheel shall be so sunk,
encased or otherwise effectively guarded as to prevent danger;
b) all spur, worm and other toothed or friction gearing which does not require frequent
adjustment while in motion shall be completely encased, unless it is so situated as to be as
safe as it would be if it were completely encased.
Section 27: Prohibition of Employment of Women and Children Near Cotton-Openers

This section states that the factory should not employ any woman or child in any part of a factory for
pressing cotton in which a cotton-opener is at work.

Notes
Section-28 : Hoist and lifts

According to section 28 of the said Act, Hoist, and lifts in a factory shall be maintained in a good
mechanical condition and must be examined by a Competent Person at least once in every six months.
Section 29: Lifting machines, chains, ropes and lifting tackles

• Lifting machines, chains, rope and lifting tackles are used in factories for raising or lowering
persons or good or materials.
• According to Section 29 of the Factories Act, they must be examined at least once in every
12 months by a confident person.
Section 30: Revolving Machinery

• In every factory in which the process of grinding is carried on there shall be permanently
affixed to or placed ear each machine in using a notice indicating the maximum safe
working peripheral speed of every grindstone or abrasive wheel, the speed of the shaft or
spindle upon which the wheel is mounted, and the diameter of the pulley upon such shaft
or spindle necessary to secure such safe working peripheral speed.
• The speeds indicated in notices under sub-section (1) shall not be exceeded.
• The effective measure shall be taken in every factory to ensure that the safe working
peripheral speed of every revolving vessel, cage, basket, flywheel pulley, disc or similar
appliance driven by power is not exceeded.
Section 31: Pressure Plant

• If in any factory, any plant or machinery or any part thereof is operated at a pressure above
atmospheric pressure, effective measures shall be taken to ensure that the safe working
pressure of such plant or machinery or part is not exceeded.
• State Government may make rules providing for the examination and testing plant or
machinery such as referred in sub-section (1).
Section 32: Floors, Stairs and Means of Access

According to Section 32 Floors, stairs and means of Access must be of sound construction and shall
be free from obstructions, causing persons to slip.
Section 33: Pits, Sumps, Opening in Floors, etc

• In every factory every fixed vessel, sump, tank, pit or opening in the ground or in a floor
which, by reason of its depth, situation, construction or contents, is or may be a source of
danger, shall be either securely covered or securely fenced.
• The State Government may, by order in writing, exempt, subject to such conditions as may
be prescribed, any factory or class or description of factories in respect of any vessel, sump,
tank, pit or opening from compliance with the provisions of this section.
Section 34: Excessive Weights

• No person shall be employed in any factory to lift, carry or move any load so heavy as to be
likely to cause him an injury.
• The State Government may make rules prescribing the maximum weights which may be
lifted, carried or moved by adult men, adult women, adolescents and children employed in
factories or in any class or description of factories or in carrying on in any specified process.
Section 35: Protection of Eyes

Notes
In respect of any such manufacturing process carried on in any factory as may be prescribed, being
a process, which involves -
a) risk of injury to the eyes from particles or fragments thrown off in the course of the process,
or
b) risk to the eyes by reason of exposure to excessive light, the State Government may by rules
require that effective screens or suitable goggles shall be provided for the protection of
persons employed on, or in the immediate vicinity of, the process.
Section 36: Precautions Against Dangerous Fumes, Gases etc.

1) No person shall be required or allowed to enter any chamber, tank, vat, pit, pipe, flue or
other confined space in any factory in which any gas, fume, vapour or dust is likely to be
present to such an extent as to involve risk to persons being overcome thereby unless it is
provided with a manhole of adequate size or other effective means of egress.
a) a certificate in writing has been given by a competent person, based on a test carried out by
himself that space is reasonably free from dangerous gas, fume, vapour or dust: or
b) such person is wearing suitable breathing apparatus and a belt securely attached to a rope
the free end of which is held by a person outside the confined space.
2) No person shall be required or allowed to enter any confined space as is referred to in sub-
section (1), until all practicable measures have been taken to remove any gas, fume, vapour
or dust, which may be present so as to bring its level within the permissible limits and to
prevent any ingress of such gas, fume, vapour or dust and unless -
15.4 Sections of Welfare under the Factories Act, 1948

The welfare provisions of the Factories Act have been discussed from Section 42-Section 50.
Section 42: Washing Facilities
Section 43: Facilities for Storing and Drying Clothing
Section 44: Facilities for Sitting
Section 45: First-aid appliances
Section 46: Canteens
Section 47: Shelters, Rest Rooms and Lunch Rooms
Section 48: Creche
Section 49: Welfare Officers
Section 42: Washing Facilities
In every factory-
a) adequate and suitable facilities for washing shall be provided and maintained for the use of
the workers therein;
b) separate and adequately screened facilities shall be provided for the use of male and female
workers;
c) such facilities shall be conveniently accessible and shall be kept clean.
Section 43: Facilities for Storing and Drying Clothing

The State Government may, in respect of any factory or class or description of factories, make rules
requiring the provision therein of suitable places for keeping clothing not worn during working
hours and for the drying of wet clothing.

Notes
Section 44: Facilities for Sitting

1. In every factory suitable arrangements for sitting shall be provided and maintained for all
workers obliged to work in a standing position, in order that they may take advantage of
any opportunities for rest which may occur in the course of their work.
2. If, in, the opinion of the Chief Inspector, the workers in any factory engaged in a particular
manufacturing process or working in a particular room are able to do their work efficiently
in a sitting position, he may, by order in writing, require the occupier of the factory to
provide before a specified date such seating arrangements as may be practicable for all
workers so engaged or working.
3. The State Government may, by notification in the Official Gazette, declare that the
provisions of the sub-section shall not apply to any specified factory or class or description
of factories or to any specified manufacturing process.
Section 45: First-aid Appliances

1. There shall in every factory be provided and maintained so as to be readily accessible during
all working hours first-aid boxes or cupboards equipped with the prescribed contents, and
the number of such boxes or cupboards to be provided and maintained shall not be less than
one for every one hundred and fifty workers ordinarily employed at any one time in the
factory.
2. Nothing except the prescribed contents shall be kept in a first-aid box or cupboard.
3. Each first-aid box or cupboard shall be kept in the charge of a separate responsible person
who holds a certificate in first-aid treatment recognised by the State Government and who
shall always be readily available during the working hours of the factory.
4. In every factory wherein more than five hundred workers are ordinarily employed there
shall be provided and maintained an ambulance room of the prescribed size, containing the
prescribed equipment and in the charge of such medical and nursing staff as may be
prescribed and those facilities shall always be made readily available during the working
hours of the factory.
Section 46: Canteens

1. The State Government may make rules requiring that in any specified factory wherein more
than two hundred and fifty workers are ordinarily employed, a canteen or canteens shall be
provided and maintained by the occupier for the use of the workers.
2. Without prejudice to the generality of the foregoing power, such rules may provide for–
a) the date by which such canteen shall be provided;
b) the standards in respect of construction, accommodation, furniture and other equipment of
the canteen;
c) the foodstuffs to be served therein and the charges which may be made, therefore;
d) the constitution of a managing committee for the canteen and representation of the workers
in the management of the canteen;
e) the delegation to the Chief Inspector, subject to such conditions as may be prescribed, of the
power to make rules under clause (c).
Section 47: Shelters, Rest Rooms and Lunchrooms

1. In every factory wherein more than one hundred and fifty workers are ordinarily employed,
adequate and suitable shelters or rest rooms and a suitable lunchroom, with provision for
drinking water, where workers can eat meals brought by them, shall be provided and
maintained for the use of the workers:
2. Provided that any canteen maintained in accordance with the provisions of section 46 shall
be regarded as part of the requirements of this subsection:

Notes
3. Provided further that where a lunchroom exists no worker shall eat any food in the work
room.
4. The shelters or rest rooms or lunchrooms to be provided under sub-section (1) shall be
sufficiently lighted and ventilated and shall be maintained in a cool and clean condition.
Section 48: Creche

1. In every factory wherein more than fifty women workers are ordinarily employed there
shall be provided and maintained a suitable room or rooms for the use of children under
the age of six years of such women.
2. Such rooms shall provide adequate accommodation, shall be adequately lighted and
ventilated, shall be maintained in a clean and sanitary condition and shall be under the
charge of women trained in the care of children and infants.
3. The State Government may make rules–
(a) prescribing the location and the standards in respect of construction, accommodation,
furniture and other equipment of rooms to be provided under this section;
(b) requiring the provision in factories to which this section applies of additional facilities for
the care of children belonging to women workers, including the suitable provision of
facilities for washing and changing their clothing;
(c) requiring the provision in any factory of free milk or refreshment or both for such children;
(d) requiring that facilities shall be given in any factory for the mothers of such children to feed
them at the necessary intervals.
Section 49: Welfare Officers

• In every factory wherein five hundred or more workers are ordinarily employed the
occupier shall employ in the factory the such number of welfare officers as may be
prescribed.
• The major role of the welfare officer is to facilitate and observe the welfare measures for the
employees in the organization.
Welfare Facilities Outside Factory Premises

In addition to providing welfare facilities in the factory premises, workers are also provided certain
benefits and facilities outside the factory. These include:
1. maternity benefits;
2. gratuity, pension and provident fund benefits;
3. medical benefits;
4. educational facilities;
5. housing facilities;
6. recreational facilities including sports and cultural activities;
7. library and reading rooms;
8. holiday home and leave travel facilities;
9. consumers’ cooperative stores and fair price shops;
10. vocational training; and
11. transportation facilities to and from the place of work.
15.5 Hazardous Process under Factories Act, 1948

Notes
It means any process or activity in relation to an industry where, unless special care is taken, raw
materials used therein or the intermediate or finished products, by-products, wastes or effluents
thereof would-
a) cause material impairment to the health of the person
b) result in pollution or the general environment
Provisions Relating to Hazardous Processes

• 41A. Constitution of Site Appraisal Committee.
• 41B. Compulsory disclosure of information by the occupier.
• 41C. Specific responsibility of the occupier in relation to hazardous processes.
• 41D. Power of Central Government to appoint Inquiry Committee.
• 41E. Emergency standards.
• 41F. Permissible limits of exposure of chemical and toxic substances.
• 41G. Workers’ participation in safety management.
• 41H. Right of workers to warn about imminent danger.
Section 41A: Constitution of Site Appraisal Committees.

1) The State Government may, for purposes of advising it to consider applications for grant of
permission for the initial location of a factory involving a hazardous process or for the
expansion of any such factory, appoint a Site Appraisal Committee.
This committee will include:
a) the Chief Inspector of the State
b) a representative of the Central Board for the Prevention and Control of Water
Pollution
c) a representative of the Department of Environment in the State
d) a representative of the Meteorological Department of the Government of India
e) an expert in the field of occupational health
f) a representative of the Town Planning Department of the State Government
2) Site Appraisal Committee shall examine an application for the establishment of a factory
involving hazardous processes and make its recommendation to the State Government
within a period of ninety days of the receipt of such applications in the prescribed form.
3) Where any process relates to a factory owned or controlled by the Central Government or
to a corporation or a company owned or controlled by the Central Government, the State
Government shall co-opt in the Site Appraisal Committee a representative nominated by
the Central Government as a member of that Committee.
4) Site Appraisal Committee shall have the power to call for any information from the person
making an application for the establishment or expansion of a factory involving a hazardous
process.
5) Where the State Government has granted approval to an application for the establishment
or expansion of a factory involving a hazardous process, it shall not be necessary for an
applicant to obtain further approval from the Central Board or the State Board established
under the Water (Prevention and Control of Pollution) Act, 1974 (6 of 1974) and the Air
(Prevention and Control of Pollution) A Act 1981 (14 of 1981).
Section 41B: Compulsory Disclosure of Information by the Occupier.

Notes
1. The occupier of every factory involving a hazardous process shall disclose in the manner
prescribed all information regarding dangers:
Including health hazards and the measures to overcome such hazards arising from the exposure to
or handling of the materials or substances in the
i. manufacture,
ii. transportation,
iii. storage and other processes,
to the workers employed in the factory, the Chief Inspector, the local authority within whose
jurisdiction the factory is situated and the general public in the vicinity.
2. The occupier shall, at the time of registering the factory involving a hazardous process lay
down a detailed policy with respect to the health and safety of the workers employed
therein.
And intimate such policy to the Chief Inspector and the local authority and, thereafter, at
such intervals as may be prescribed, inform the Chief Inspector and the local authority of
any change made in the said policy.
3. The information furnished under sub-section (1) shall include accurate information as to the
quantity, specifications and other characteristics of wastes and the manner of their disposal.
4. Every occupier shall, with the approval of the Chief Inspector, draw up an on-site
emergency plan and detailed disaster control measures for his factory.
And make known to the workers employed therein and to the general public living in the
vicinity of the factory the safety measures required to be taken in the event of an accident
taking place.
5. Every occupier of a factory shall,
a) if such factory engaged in a hazardous process on the commencement of the Factories
(Amendment) Act, 1987, within a period of thirty days of such commencement; and
b) if such factory proposes to engage in a hazardous process at any time after such
commencement, within a period of thirty days before the commencement of such process,
inform the Chief Inspector of the nature and details of the process in such form and in such
manner as may be prescribed.
6. Where any occupier of a factory contravenes the provisions of sub-section (5), the licence
issued under section 6 to such factory shall, notwithstanding any penalty to which the
occupier or factory shall be subjected to under the provisions of this Act, be liable for
cancellation.
7. The occupier of a factory involving a hazardous process shall, with the previous approval
of the Chief Inspector, lay down measures for the:
i. handling,
ii. usage,
iii. transportation and
iv. storage of hazardous substances inside the factory premises
v. And publicize them in the manner prescribed among the workers and the general public
living in the vicinity.
Section 41C: Specific Responsibility of the Occupier in Relation to Hazardous Processes

Every occupier of a factory involving any hazardous process shall:
a) maintain accurate and up-to-date health records or, as the case may be, medical records, of
the workers in the factory who are exposed to any chemical, toxic or other harmful substances
which are

Notes
i. manufactured,
ii. stored,
iii. handled or
iv. transported
and
such records shall be accessible to the workers subject to such conditions as may be prescribed;
b. appoint persons who possess qualifications and experience in handling hazardous substances
and are competent to supervise such handling within the factory.
And appoint persons to provide at the working place all the necessary facilities for protecting the
workers in the manner prescribed:
Provided that where any question arises as to the qualifications and experience of a person so
appointed, the decision of the Chief Inspector shall be final;
c) provide for medical examination of every worker:
(i) before such worker is assigned to a job involving the handling of, or working with, a
hazardous substance, and
(ii) while continuing in such job, and after he has ceased to work in such job, at intervals not
exceeding twelve months, in such manner as may be prescribed.
Section 41D: Power of Central Government to Appoint an Inquiry Committee

a) This section states that the Central Government in some extraordinary situations may
appoint an Inquiry Committee for a factory manufacturing hazardous material.
b) They inquire into the standards of health and safety observed in the factory. They do so to
find out the causes of any failure or neglect in the adoption of all measures or standards.
c) Moreover, the committee should consist of a Chairman and two other members. The Central
Government determines the tenure of the members. Also, the recommendations of the
Committee shall be advisory in nature.
Section 41E: Emergency Standards

1. Where the Central Government is satisfied that no standards of safety have been prescribed
in respect of a hazardous process or class of hazardous processes, or where the standards
so prescribed are inadequate, it may direct the Director-General of Factory Advice Service
and Labor Institutes or any institution specialised in matters relating to standards of safety
in hazardous processes, to lay down emergency standards for enforcement of suitable
standards in respect of such hazardous processes.
2. The emergency standards laid down under the sub-section shall until they are incorporated
in the rules made under this be enforceable and have the same effect as if they had been
incorporated in the rules made under this Act.
Section 41F: Permissible Limits of Exposure of Chemical and Toxic Sub-stances

1. The maximum permissible threshold limits of exposure to chemical and toxic substances in
manufacturing processes (whether hazardous or otherwise) in any factory shall be of the
value indicated in the Second Schedule.
2. The Central Government may, at any time, for the purpose of giving effect to any scientific
proof obtained from specialised institutions or experts in the field, by notification in the
Official Gazette, make suitable changes in the said Schedule.
Section 41G: Workers’ Participation in Safety Management

Notes
1. The occupier shall, in every factory where a hazardous process takes place, or where
hazardous substances are used or handled, set up a Safety Committee consisting of the equal
number of representatives of workers and management to promote cooperation between
the workers and the management in maintaining proper safety and health at work and to
review periodically the measures taken in that behalf:
2. Provided that the State Government may, by order in writing and for reasons to be recorded,
exempt the occupier of any factory or class of factories from setting up such Committee.
3. The composition of the Safety Committee, the tenure of office of its members and their rights
and duties shall be such as may be prescribed.
Section 41H: Right of Workers to Warn About Imminent Danger

1. Where the workers employed in any factory engaged in a hazardous process have a
reasonable apprehension that there is a likelihood of imminent danger to their lives or health
due to any accident,
i. they may bring the same to the notice of the occupier, agent, manager or any other person
who is in charge of the factory.
ii. or the process concerned directly or through their representatives in the Safety Committee
and simultaneously bring the same to the notice of the Inspector.
2. It shall be the duty of such occupier, agent, manager or the person in charge of the factory
or process to take immediate remedial action if he is satisfied with the existence of such
imminent danger and send a report forthwith of the action taken to the nearest Inspector.
3. If the occupier, agent, manager or the person in charge referred to in subsection (2) is not
satisfied with the existence of any imminent danger as apprehended by the workers, he
shall, nevertheless, refer the matter forthwith to the nearest Inspector whose decision on the
question of the existence of such imminent danger shall be final.
Summary
 The Factories Act of 1948 was enacted to protect the welfare of workers in a factory by
regulating employment conditions, working conditions, the working environment, and other
welfare requirements of specific industries.
 The Factories Act lays out guidelines and safety measures for using machinery, and with its
strict compliance, it also provides owners with instructions.
 When factory workers were taken advantage of and exploited by paying them low wages, the
Factories Act was passed.
 The primary goal of the Factories Act is to safeguard employees in a factory from industrial
and occupational risks. This Act gives the owner or occupier of a factory a particular
responsibility to secure and protect employees from employment in conditions harmful to
their health and safety in order to safeguard workers. It is stated in the Act that the purpose
of the Factories Act is to amend and consolidate the legal framework governing factory
labour.
Keywords
 Effluents - Effluent is wastewater from sewers or industrial outfalls that flows directly into
surface waters either untreated or after being treated at a facility.
 Ventilation – Ventilation is the intentional introduction of outdoor air into a space. Ventilation
is mainly used to control indoor air quality by diluting and displacing indoor pollutants.

Notes
 Factory - “factory” means any premises including the precincts thereof—

whereon ten or more workers are working, or were working on any day of the preceding
twelve months, and in any part of which a manufacturing process is being carried on with the
aid of power, or is ordinarily so carried on.
 Cleanliness - the quality or state of being clean : the practice of keeping oneself or one's
surroundings clean.
Self Assessment
1. In which year did factories act come into force?
A. 23rd September, 1948

B. 1st April, 1949
C. 4th April, 1949
D. 12th September, 1948
2. How many days in advance does the occupier of a factory premises gives notice of occupancy
to the chief inspector?
A. 15 days
B. 20 days
C. 10 days
D. 25 days
3. What are the general duties of an Occupier?

A. Maintenance of a plant and system of work in factory are safe, without risks to health.
B. Ensure safety and absence of risks to health in, use, handling, storage and transport of articles
and substances.
C. Specifying the area
D. Defining the local mean time ordinarily deserved therein.
A. D
B. C
C. Only A & B
D. All of the above
4. Which provisions regarding health are mentioned in the sections 11 to 20 in factories act?
A. Cleanliness
B. Dust and fumes
C. Ventilation and temperature
D. Disposal of wastes
A. Only B & C
B. Only A & D
C. None of the above
D. All of the above

Notes
5. As per the factories act, after how many years should the factory premises be painted and
refurbished?
A. 5 years
B. 2 years
C. 10 years
D. Annually
6. As per section 2 in factories act, who will be called as an adult?
A. A person who has completed 21 years of age

B. A person who is less than 19 years of age
C. A person who has completed 24 years of age
D. A person who has completed 18 years of age
7. Section 2(g) under the act defines _______
A. Factory
B. Manufacturing process
C. Worker
D. Occupants
8. Match the following

1. Approval, licensing and registration of factories ----a.) Section 18
2. Arrangements for drinking water ------------ b.) Section 35
3. Maintenance of buildings ------------------- c.) Section 6
4. Protection of eyes ------------------------- d.) Section 40A
A. 1 - c, 2 - a, 3 - d, 4 - b
B. 1 - b, 2 - a, 3 - d, 4 - c
C. 1 - c, 2 - d, 3 - a, 4 - b
D. 1 - a, 2 - c, 3 - d, 4 – b
9. If there are ____ numbers of employees, then the employer has to provide a canteen.
A. 250
B. 510
C. 320
D. 100
10. Which of the following diseases is not mentioned in the section 89 of factories act?
A. Anthrax
B. Asbestosis
C. Phosphorus
D. Pneumonia
11. Who is an Adolescent as per Factories Act, 1948?

Notes
A. Who has completed 17 years of age?

B. who is less than 18 years
C. who has completed 15 years but less than 18 years.
D. None of these
12. Which one of the following is not Welfare provision under Factories Act, 1948
A. Canteen
B. Crèches
C. Alcoholic Beverage
D. Drinking Water.
13. First Aid Boxes is to be provided for ______ of persons
A. 125
B. 135
C. 150
D. 160
14. Safety Officers are to be appointed if Organization is engaging______ or more employees.
A. 1000
B. 2000
C. 500
D. 750
15. Canteen is to be provided if engaging Employees more than______ persons.
A. 250
B. 230
C. 300
D. 275

l. B 2. A 3. C 4. D 5. A
6. D 7. B 8. A 9. A 10. D
11. C 12. C 13. C 14. A 15. A
Review Questions
1. What do you understand about the different sections under Equal Remuneration Act, 1976?
2. What do you understand by Wage Board?
3. Elaborate composition of wage boards.
4. What do you about the objectives of Wage Boards?
5. What are the different sections of the Code on Wages, 2019?

Notes
Further Readings
4. Mamoria C.B., Dynamics of Industrial Relation in India

Notes
Jaskiran Kaur, Lovely Professional University Unit 16: Trade Unions Act, 1926
Unit 16: Trade Unions Act,1926

CONTENTS
Objective
Introduction
16.1 Trade Union
16.2 Rights and Liabilities of Registered Trade Unions
16.3 Change and Amalgamation of Trade Union
Summary
Keywords
Self Assessment
Review Questions
Further Readings
Objective
After this chapter, you will be able to:
• understand the meaning of trade union,
• become aware about the sections related to registration of trade unions.
• become aware about the rights and liabilities of Trade Union.
• understand about the Change and Amalgamation of Trade Union.
Introduction
Trade Unions in India are registered and file annual returns under the Trade Union Act (1926).
Statistics on Trade Unions are collected annually by the Labour Bureau of the Ministry of Labour,
Government of India. As per the latest data, released for 2012, there were 16,154 trade unions which
had a combined membership of 9.18 million (based on returns from 15 States – out of a total of 28
States and 9 Union Territories). The Trade Union movement in India is largely divided along political
lines and follows a pre-Independence pattern of overlapping interactions between political parties
and unions. The net result of this type of system is debated as it has both advantages and
disadvantages. According to the data submitted by various trade unions to the Ministry of Labour
and Employment as part of a survey, INTUC with a combined membership of 33.3 million, has
emerged as the largest trade union in India as of 2013.
The firm or industry level trade unions are often affiliated to larger Federations. The largest
Federations in the country represent labour at the National level and are known as Central Trade
Union Organisations (CTUO). As of 2002, when the last Trade Union verification was carried out,
there are 12 CTUOs recognised by the Ministry of Labour.
16.1 Trade Union

“Trade Union” means any combination, whether temporary or permanent, formed primarily for the
purpose of regulating the relations between workmen and employers or between workmen and
workmen, or between employers and employers, or for imposing restrictive conditions on the
conduct of any trade or business, and includes any federation of two or more Trade Unions:

Notes
Provided That this Act Shall not Affect—

i. any agreement between partners as to their own business;
ii. any agreement between an employer and those employed by him as to such employment;
or
iii. any agreement in consideration of the sale of the goodwill of a business or of instruction in
any profession, trade or handicraft.
Did you Know?

Which chapter of the Trade Unions Act, 1926 deals with the provisions of the registration of the trade
unions?
Chapter II of the Trade Unions Act, 1926 deals with the provisions of the registration of the trade
unions.
Section 3: Appointment of Registrars

1. According to section 3 of the Act, the appropriate government shall appoint a person to be
the Registrar of Trade Unions for each state.
2. The appropriate Government may appoint as many Additional and Deputy Registrars of
Trade Unions as it thinks fit for the purpose of exercising and discharging, under the
superintendence and direction of the Registrar and Such powers and functions of the
Registrar under this Act as it may, by order, specify and define the local limits within which
any such Additional or Deputy Registrar shall exercise and discharge the powers and
functions so specified.
3. Subject to the provisions of any order under sub-section (2), where an Additional or Deputy
Registrar exercises and discharges the powers and functions of a Registrar in an area within
which the registered office of a Trade Union is situated, the Additional or Deputy Registrar
shall be deemed to be the Registrar in relation to the Trade Union for the purposes of this
Act.
Section 4: Mode of Registration

1. Any seven or more members of a Trade Union may, by subscribing their names to the rules
of the Trade Union and by otherwise complying with the provisions of this Act with respect
to registration, apply for registration of the Trade Union under this Act.
2. Where an application has been made under sub-section (1) for the registration of a Trade
Union, such application shall not be deemed to have become invalid merely by reason of
the fact that, at any time after the date of the application, but before the registration of the
Trade Union, some of the applicants, but not exceeding half of the total number of persons
who made the application, have ceased to be members of the Trade Union or have given
notice in writing to the Registrar dissociating themselves from the application.
Section 5: Application for Registration

Every application for registration of a Trade Union shall be made to the Registrar, and shall be
accompanied by a copy of the rules of the Trade Union and a statement of the following particulars,
namely: -
a. the names, occupations and addresses of the members making the application;
b. the name of the Trade Union and the address of its head office; and
c. the titles, names, ages, addresses and occupations of the office-bearers of the Trade Union.
Where a Trade Union has been in existence for more than one year before the making of an
application for its registration, there shall be delivered to the Registrar, together with the application,

Notes
Unit 16: Trade Unions Act, 1926
a general statement of the assets and liabilities of the Trade Union prepared in such form and
containing such particulars as may be prescribed.
Section 6: Provisions to be Contained in the Rules of a Trade Union
A Trade Union shall not be entitled to registration under this Act, unless the executive thereof is
constituted in accordance with the provisions of this Act, and the rules thereof provide for the
following matters, namely: -
a. the name of the Trade Union;
b. the whole of the objects for which the Trade Union has been established;
c. the whole of the purposes for which the general funds of the Trade Union shall be
applicable, all of which purposes shall be purposes to which such funds are lawfully
applicable under this Act;
d. the maintenance of a list of the members of the Trade Union and adequate facilities for the
inspection thereof by the office-bearers and members of the Trade Union;
e. the admission of ordinary members who shall be persons actually engaged or employed in
an industry with which the Trade Union is connected, and also the admission of the number
of honorary or temporary members as office-bearers required under section 22 to form the
executive of the Trade Union;
f. the payment of a subscription by members of the Trade Union which shall be not less than
twenty-five paise per month per member;
g. the conditions under which any member shall be entitled to any benefit assured by the rules
and under which any fine or forfeiture may be imposed on the members;
h. the manner in which the rules shall be amended, varied or rescinded;
i. the manner in which the members of the executive and the other office-bearers of the Trade
Union shall be appointed and removed;
j. the safe custody of the funds of the Trade Union, an annual audit, in such manner as may
be prescribed, of the accounts thereof, and adequate facilities for the inspection of the
account books by the office-bearers and members of the Trade Union; and
k. the manner in which the Trade Union may be dissolved.
Section 7: Power to Call for Further Particulars and to Require Alteration of Name.
1. The Registrar may call for further information for the purpose of satisfying himself that any
application complies with the provisions of section 5, or that the Trade Union is entitled to
registration under section 6, and may refuse to register the Trade Union until such
information is supplied.
2. If the name under which a Trade Union is proposed to be registered is identical with that
by which any other existing Trade Union has been registered or, in the opinion of the
Registrar, so nearly resembles such name as to be likely to deceive the public or the members
of either Trade Union, the Registrar shall require the persons applying for registration to
alter the name of the Trade Union stated in the application, and shall refuse to register the
Union until such alteration has been made.
Section 8: Registration
• The Registrar, on being satisfied that the Trade Union has complied with all the
requirements of this Act in regard to registration, shall register the Trade Union by entering
in a register, to be maintained in such form as may be prescribed, the particulars relating to
the Trade Union contained in the statement accompanying the application for registration.
Section 9: Certificate of Registration

Notes
The Registrar, on registering a Trade Union under section 8, shall issue a certificate of registration in
the prescribed form which shall be conclusive evidence that the Trade Union has been duly registered
under this Act.
Section 10: Cancellation of Registration.

A certificate of registration of a Trade Union may be withdrawn or cancelled by the Registrar –
a. on the application of the Trade Union to be verified in such manner as may be prescribed,
or
b. if the Registrar is satisfied that the certificate has been obtained by fraud or mistake, or that
the Trade Union has ceased to exist or has willfully and after notice from the Registrar
contravened any provision of this Act or allowed any rule to continue in force which is
inconsistent with any such provision, or has rescinded any rule providing for any matter
provision for which is required by section 6:
Provided that not less than two months' previous notice in writing specifying the ground
on which it is proposed to withdraw or cancel the certificate shall be given by the Registrar
to the Trade Union before the certificate is withdrawn or cancelled otherwise than on the
application of the Trade Union.
Section 11: Appeal

1. Any person aggrieved by any refusal of the Registrar to register a Trade Union or by the
withdrawal or cancellation of a certificate of registration may, within such period as may be
prescribed, appeal, -
a. where the head office of the Trade Union is situated within the limits of a Presidency-town,
to the High Court, or
b. where the head office is situated in any other area, to such Court, not inferior to the Court
of an additional or assistant Judge of a principal Civil Court of original jurisdiction, as the
appropriate Government may appoint in this behalf for that area.
2. The appellate Court may dismiss the appeal, or pass an order directing the Registrar to
register the Union and to issue a certificate of registration under the provisions of section 9
or setting aside the order for withdrawal or cancellation of the certificate, as the case may
be, and the Registrar shall comply with such order.
3. For the purpose of an appeal under sub-section (1) an appellate Court shall, so far as may
be, follow the same procedure and have the same powers as it follows and has when trying
a suit under the Code of Civil Procedure, 1908 (5 of 1908), and may direct by whom the
whole or any part of the costs of the appeal shall be paid, and such costs shall be recovered
as if they had been awarded in a suit under the said Code.
4. 4. In the event of the dismissal of an appeal by any Court appointed under clause (b) of sub-
section (1), the person aggrieved shall have a right of appeal to the High Court, and the High
Court shall, for the purpose of such appeal, have all the powers of an appellate Court under
sub-sections (2) and (3), and the provisions of those sub-sections shall apply accordingly.
Section 12: Registered Office

• All communications and notices to a registered Trade Union may be addressed to its
registered office.
• Notice of any change in the address of the head office shall be given within fourteen days
of such change to the Registrar in writing, and the changed address shall be recorded in the
register referred to in section 8.
Section 13: Incorporation of Registered Trade Unions

Notes
Every registered Trade Union shall be a body corporate by the name under which it is registered,
and shall have perpetual succession and a common seal with power to acquire and hold both
movable and immovable property and to contract, and shall by the said name sue and be sued.
Section 14: Certain Acts not to Apply to Registered Trade Unions
The following Acts, namely: -
a. The Societies Registration Act, 1860 (21 of 1860),
b. The Co-operative Societies Act, 1912 (2 of 1912),
c. The Companies Act, 1956 (1 of 1956);
shall not apply to any registered Trade Union, and the registration of any such Trade Union under
any such Act shall be void.
16.2 Rights and Liabilities of Registered Trade Unions

• When a trade union gets registered, it receives certain rights and privileges. The rights so
guaranteed for registered trade unions are provided under chapter III of the Trade Union
Act.
• Along with the rights that are provided for the registered trade union, there are certain
duties entrusted upon the trade union as well.
Rights are as under:

1. Right as a legal person to the trade union (section 12)
2. Right to manage funds of the trade union (section 15)
3. Right to be protected against civil proceedings (section 16)
4. Right to be protected against Criminal Proceedings (section 17)
5. 5.Right of privilege to make agreements in restraint of Trade (section 18)
6. 6.Right in inspection of the books of trade union (section 19)
7. 7. Right of a minor to the membership of the trade union (section 20)
I. Right as a legal person to the trade union

By the virtue of section 12 of the IR Code, the trade union is granted the right granted as a legal
person which in turn makes the trade union entitled to certain attributes which are:
a. Making it a body corporate by the name under which it is so registered.

b. Makes it capable of perpetual succession
c. It acquires a common seal
d. It becomes capable of holding and acquiring movable and immovable property
e. Empowering it to enter into contracts
f. It can sue and be sued in its registered name
II. Objects on which general funds may be spent (Section-15)

The general funds of a registered Trade Union shall not be spent on any other objects than the
following, namely: -
a) the payment of salaries, allowances and expenses to office-bearers of the Trade Union.
b) the payment of expenses for the administration of the Trade Union, including audit of the
accounts of the general funds of the Trade Union.

Notes
c) the prosecution or defence of any legal proceeding to which the Trade Union or any member
thereof is a party, when such prosecution or defence is undertaken for the purpose of securing
or protecting any rights of the Trade Union as such or any rights arising out of the relations
of any member with his employer or with a person whom the member employs.
d) the conduct of trade disputes on behalf of the Trade Union or any member thereof.
e) the compensation of members for loss arising out of trade disputes.
f) allowances to members or their dependants on account of death, old age, sickness, accidents
or unemployment of such members.
g) the issue of, or the undertaking of liability under, policies of assurance on the lives of
members, or under policies insuring members against sickness, accident or unemployment.
h) the provision of educational, social or religious benefits for members (including the payment
of the expenses of funeral or religious ceremonies for deceased members) or for the
dependants of members;
i) the upkeep of a periodical published mainly for the purpose of discussing questions affecting
employers or workmen as such;
j) the payment, in furtherance of any of the objects on which the general funds of the Trade
Union may be spent, of contributions to any cause intended to benefit workmen in general,
provided that the expenditure in respect of such contributions in any financial year shall not
at any time during that year be in excess of one-fourth of the combined total of the gross
income which has up to that time accrued to the general funds of the Trade Union during that
year and of the balance at the credit of those funds at the commencement of that year; and
k) subject to any conditions contained in the notification, any other object notified by the
appropriate Government in the official Gazette.
III. Constitution of a separate fund for political purposes (Section-16)
1) A registered Trade Union may constitute a separate fund, from contributions separately
levied for or made to that fund, from which payments may be made, for the promotion of the
civic and political interests of its members, in furtherance of any of the objects specified in
sub-section (2).
2) The objects referred to in Sub-section (1) are: -
a) the payment of any expenses incurred, either directly or indirectly, by a candidate or
prospective candidate for election as a member of any legislative body constituted under
the Constitution or of any local authority, before, during, or after the election in connection
with his candidature or election; or
b) the holding of any meeting or the distribution of any literature or documents in support
of any such candidate or prospective candidate; or
c) the maintenance of any person who is a member of any legislative body constituted under
the Constitution or of any local authority; or
d) the registration of electors or the election of a candidate for any legislative body
constituted under the Constitution or for any local authority; or
e) the holding of political meetings of any kind, or the distribution of political literature or
political documents of any kind.
3. No member shall be compelled to contribute to the fund constituted under sub-section (1) and a
member who does not contribute to the said fund shall not be excluded from any benefits of the Trade
Union,

Notes
or placed in any respect either directly or indirectly under any disability or at any disadvantage as
compared with other members of the Trade Union (except in relation to the control or management
of the said fund) by reason of his not contributing to the said fund and
contribution to the said fund shall not be made a condition for admission to the Trade Union.
IV. Criminal conspiracy in trade disputes (Section 17)

No office-bearer or member of a registered Trade Union shall be liable to punishment under sub-
section (2) of section 120B Indian Penal Code (45 of 1860), in respect of any agreement made between
the members for the purpose of furthering any such object of the Trade Union as is specified in section
15, unless the agreement is an agreement to commit an offence.
V. Immunity from civil suit in certain cases

1. No suit or other legal proceeding shall be maintainable in any Civil Court against any
i. registered Trade Union or
ii. any office-bearer
iii. or member
thereof in respect of any act done in contemplation or furtherance of a trade dispute to which
a member of the Trade Union is a party on the ground
• only that such act induces some other person to break a contract of employment, or that it
is in interference with the trade, business or employment of some other person or with the
right of some other person to dispose of his capital or of his labour as he wills.
2. A registered Trade Union shall not be liable in any suit or other legal proceeding in any Civil
Court in respect of any tortious act done in contemplation or furtherance of a trade dispute
by an agent of the Trade Union if it is proved that such person acted without the knowledge
of, or contrary to express instructions given by, the executive of the Trade Union.
VI. Enforceability of agreements (Section 19)

Notwithstanding anything contained in any other law for the time being in force, an agreement
between the members of a registered Trade Union shall not be void or voidable merely by reason of
the fact that any of the objects of the agreement are in restraint of trade:
Provided that nothing in this section shall enable any Civil Court to entertain any legal proceeding
instituted for the express purpose of enforcing or recovering damages for the breach of any
agreement concerning the conditions on which any members of a Trade Union shall or shall not sell
their goods, transact business, work, employ or be employed.
VII. Right to inspect books of Trade Union (Section 20)

The account books of a registered Trade Union and the list of members thereof shall be open to
inspection by an office-bearer or member of the Trade Union at such times as may be provided for in
the rules of the Trade Union.
VIII. Rights of minors to membership of Trade Unions (Section 21)

Any person who has attained the age of fifteen years may be a member of a registered Trade Union
subject to any rules of the Trade Union to the contrary, and may, subject as aforesaid, enjoy all the
rights of a member and execute all instruments and give all acquittances necessary to be executed or
given under the rules.

Notes
16.3 Change and Amalgamation of Trade Union

Section 23: Change of Name
Any registered Trade Union may, with the consent of not less than two-thirds of the total number of
its members and subject to the provisions of section 25, change its name.
Section 24: Amalgamation of Trade Unions
Any two or more registered Trade Unions may become amalgamated together as one Trade Union
i. with or without dissolution or
ii. division of the funds of such Trade Unions or
iii. either or any of them,
Provided that the votes of at least one-half of the members of each or every such Trade Union entitled
to vote are recorded, and that at least sixty per cent of the votes recorded are in favor of the proposal.
Section 25: Notice of change of name or amalgamation
1. Notice in writing of every change of name signed, by the Secretary and by seven members
of the Trade Union changing its name.
Notice in writing of every amalgamation, signed by the Secretary and by seven members of
each and every Trade Union which is a party the reto.
And it shall be sent to the Registrar, and where the head office of the amalgamated Trade
Union is situated in a different State, to the Registrar of such State.
2. If the proposed name is identical with that by which any other existing Trade Union has
been registered or,
• In the opinion of the Registrar, so nearly resembles such name as to be likely to deceive the
public or the members of either Trade Union,
• The Registrar shall refuse to register the change of name.
3. Save as provided in sub-section (2), the Registrar shall, if he is satisfied that the provisions
of this Act in respect of change of name have been complied with, register the change of
name in the register referred to in section 8, and the change of name shall have effect from
the date of such registration.
4. The Registrar of the State in which the head office of the amalgamated Trade Union is
situated shall, if he is satisfied that the provisions of this Act in respect of amalgamation
have been complied with and that the Trade Union formed thereby is entitled to registration
under section 6, register the Trade Union in the manner provided in section 8, and the
amalgamation shall have effect from the date of such registration.
Section 26: Effects of change of name and of amalgamation
• The change in the name of a registered Trade Union shall not affect any rights or obligations
of the Trade Union
• Or render defective any legal proceeding by or against the Trade Union,
• and any legal proceeding which might have been continued or commenced by or against it
by its former name may be continued or commenced by or against it by its new name.
• An amalgamation of two or more registered Trade Unions shall not prejudice any right of
any of such Trade Unions or any right of a creditor of any of them.
Section 27: Dissolution
1. When a registered Trade Union is dissolved, notice of the dissolution signed by seven
members and by the Secretary of the Trade Union shall, within fourteen days of the
dissolution, he sent to the Registrar, and shall be registered by him if he is satisfied that the
dissolution has been effected in accordance with the rules of the Trade Union and the
dissolution shall have effect from the date of such registration.

Notes
2. Where the dissolution of a registered Trade Union has been registered and the rules of the
Trade Union do not provide for the distribution of funds of the Trade Union on dissolution,
the Registrar shall divide the funds amongst the members in such manner as may be
prescribed.
Summary
 The Trade Union Act of 1926 is welfare legislation that has been enacted to protect workers in
the organised and unorganised sectors from inhuman treatment and provide protection of
their human rights.
 As such, the legislation contains provisions for registration, regulation, benefits, and
protection for trade unions.
 Therefore, the workers benefit.
 Trade unions are important organs for the democratic development of any country as they
represent the needs and demands of the workers through collective bargaining.
 Collective bargaining is an important aspect of the employer-employee relationship.
 However, collective bargaining is not provided to all the trade unions but is only provided to
those trade unions that are recognised.
 Therefore, the demand for mandatory recognition of trade unions, which has not been
provided under the Trade Union Act 1926, has been raised time and again by the workers.
 Today, the growth of the media has resulted in the empowerment of trade unions, and they
have turned into influential pressure groups not only in industrial sectors but also in
agricultural and other allied sectors.
Keywords
“Appropriate Government” - In this Act, "the appropriate Government" means, in relation to Trade
Unions whose objects are not confined to one State, the Central Government, and in relation to other
Trade Unions, the State Government, and] unless there is anything repugnant in the subject or
context,--
(a) "executive" means the body, by whatever name called, to which the management of the affairs of
a Trade Union is entrusted;
(b) " [office-bearer]", in the case of a Trade Union, includes any member of the executive thereof, but
does not include an auditor;
(c) "prescribed" means prescribed by regulations made under this Act;
(d) "registered office" means that office of a Trade Union which is registered under this Act as the
head office thereof;
(e) "registered Trade Union" means a Trade Union registered under this Act;
(f) "Registrar" means--
(i) a Registrar of Trade Unions appointed by the appropriate Government under section 3, and
includes any Additional or Deputy Registrar of Trade Unions; and
(ii) in relation to any Trade Union, the Registrar appointed for the State in which the head or
registered office, as the case may be, of the Trade Union is situated;]
(g) "trade dispute" means any dispute between employers and workmen or between workmen and
workmen, or between employers and employers which is connected with the employment or non-
employment, or the terms of employment or the conditions of labour, of any person, and "workmen"
means all persons employed in trade or industry whether or not in the employment of the employer
with whom the trade dispute arises; and

Notes
(h) "Trade Union" means any combination, whether temporary or permanent, formed primarily for
the purpose of regulating the relations between workmen and employers or between workmen and
workmen, or between employers and employers, or for imposing restrictive conditions on the
conduct of any trade or business, and includes any federation of two or more Trade Unions:
Provided that this Act shall not affect--
(i) any agreement between partners as to their own business;
(ii) any agreement between an employer and those employed by him as to such employment; or
(iii) any agreement in consideration of the sale of the goodwill of a business or of instruction in any
profession, trade or handicraft.
Self Assessment
1. Rules regarding Appointment of Registrars are contained under _____ section
A. 3
B. 4
C. 5
D. 6
2. Rules regarding mode of registration are contained under _____ section.
A. 3
B. 4
C. 5
D. 6
3. Rules regarding application for registration are contained under _____ section.
A. 3
B. 4
C. 5
D. 6
4. Rules regarding Provisions to be Contained in the Rules of a Trade Union are contained under
_____ section.
A. 3
B. 4
C. 5
D. 6
5. Rules regarding Power to Call for Further Particulars and to Require Alteration of Name are
contained under _____ section.
A. 7
B. 8
C. 9
D. 10
6. Rules regarding Registration are contained under _____ section.

Notes
A. 7
B. 8
C. 9
D. 10
7. Rules regarding Certificate of Registration are contained under _____ section.
A. 7
B. 8
C. 9
D. 10
8. Rules regarding Cancellation of Registration. are contained under _____ section.
A. 7
B. 8
C. 9
D. 10
9. Rules regarding Appeal are contained under _____ section.
A. 11
B. 12
C. 13
D. 14
10. Rules regarding Registered Office are contained under _____ section.
A. 11
B. 12
C. 13
D. 14
11. Rules regarding Incorporation of Registered Trade Unions are contained under _____ section.
A. 11
B. 12
C. 13
D. 14
12. Rules regarding Certain Acts not to Apply to Registered Trade Unions are contained under
_____ section.
A. 11
B. 12
C. 13
D. 14
13. Rules regarding Change of Name are contained under _____ section.

Notes
A. 23
B. 24
C. 25
D. 26
14. Rules regarding Amalgamation of Trade Unions are contained under _____ section.
A. 23
B. 24
C. 25
D. 26
15. Rules regarding Effects of change of name and of amalgamation are contained under _____
section.
A. 23
B. 24
C. 25
D. 26

l. A 2. B 3. C 4. D 5. A
6. B 7. C 8. D 9. A 10. B
11. C 12. D 13. A 14. B 15. D
Review Questions
1. What do you understand by trade union?
2. Enlist the sections related to registration of trade unions?
3. Discuss the rights and liabilities of Trade Union.
4. Highlight your understanding about the Change and Amalgamation of Trade Union?
Further Readings

Notes
Dr. Shikha Goyal, Lovely Professional University Unit 17: The Mines Act, 1952
Unit 17: The Mines Act,1952

CONTENTS
Objectives
Introduction
17.1 Development of Mining Legislation
17.2 Scope & Coverage
17.3 Mining
17.4 Administration of the Act
17.5 Enforcement of the Act
17.6 Certifying Surgeons
17.7 Health and Safety
17.8 Hours and Limitation of Employment
17.9 Leave With Wages
Summary
Keywords
Self Assessment
Review Questions
Further Readings
Objectives
 appreciate the legislative background

 explain the scope and coverage of the Act
 develop an understanding about the administration and enforcement of the Act
 explain the provisions as to health and safety
 describe the provision for working hours, holidays and leave.
Introduction
Mining is an ancient activity in India, but is fair to say that mining, primarily coal mining, as a large-
scale industrial activity, was first introduced in the country in the early 19th. century. Although mines
appeared sometimes before the first cotton mills came into existence, they were not subjected to
labour legislation until 1895. We may conveniently divide the history of mining legislation into three
major periods: the early, pre-1920 period, the period between 1920 and 1947, and the post-
Independence period.
17.1 Development of Mining Legislation

1. The Pre-1920 Period:
The first Act was the Indian Mines Act, 1901, introduced in 1889. It was amended in 1910 and 1914.

Notes
2. 1920-47:
During This period legislation included the Indian Mines Act, 1923, the Indian Mines Acts of 1925,
1927, 1928, 1935, 1937, 1940, 1945 and 1946.
3. The Post-Independence Period:

The post-Independence period reflects a great expansion of industrial activity and is of interest in
industrial labor that marked the War and the post-War period, as well as an increased acceptance of
socialist policies and the welfare State. The Mines Act, 1952 (The Act was amended in 1959 and 1983)
covered
 all borings, bore holes and oil wells;

 all shafts, in or adjacent to and belonging to a mine;
 all levels and inclined planes in the course of being driven;
 all open cast workings.
 conveyors or serial ropeways provided for the bringing into or removal from a mine or
minerals or other articles or for the removal of refuse therefrom;
 all audits, level, planes, machinery, works, railways, tramways and sidings, in or adjacent to
and belonging to a mine;
 all workshops and stores situated within the precincts of a mine and under the same
management and used solely for purposes connected with that mine or a number of mines
under the same management;
 all power stations for supplying electricity solely meant for working the mine or a number of
mine under the same management;
 any premises exclusively occupied by the owner of the mine for being used for depositing
refuse from a mine or in which any operation connected with refuse is carried on; and
 any premises on which any process ancillary to the getting, dressing or preparation for the
sale of minerals or of coke is carried on. These provisions, however, do not apply to any mine
a) in which excavation is being made for prospecting purposes only, and b) engaged in the
extraction of Kankar, Murrum, laterine boulder, gravel, shingle, ordinary sand, clay, building
stone, road-metal, earth, fuller" earth and lime stone, under certain conditions.
In order to give effect to the aforesaid recommendation of the National Commission of Labor the
Mines Act was amended in 1983. The amended Act prohibited the employment or persons below 18
years of age. Further Section 9-A provides for entitlement for an alternative employment to a worker
found medically unfit, which is directly ascribable to his employment, and for payment of disability
allowance as well as lump sum amount when he desires to leave the employment. Moreover, while
under Section 52(1)(a) a person employed below ground would be entitled to annual leave with
wages at the rate of one day for every 15 days of work performed by him, Section 52(10), grants
proportionate leave or wages in lieu of leave.
The other amendments mainly related to:
i) the removal of certain practical difficulties experienced in its enforcement; ii) provision for
additional safety regulations; iii) closer association of workers with safety measures; iv) provisions
for minimum penalty and v) increase in levy of the cess for effective administration.
17.2 Scope & Coverage

The Act extends to whole of India. It applies to every "mine" which means:
any excavation where any operation for the purpose of searching for or obtaining minerals has been
or is being carried on, and includes-

Notes
Unit 17: The Mines Act, 1952
 all borings, bore holes, oil wells and accessory crude conditioning plants, including the pipe
conveying mineral oil within the oilfields.
 all shafts, in or adjacent to and belonging to a mine, whether in the course of being sunk or
not.
 all levels and inclined planes in the course of being driven.
 all open cast workings.
 all conveyors or aerial ropeways provided for the bringing into or removal from a mine of
minerals or other articles or for the removal of refuse therefrom.
 all admits, levels, planes, machinery; works, railways, tramways, and sidings in to adjacent to
and belonging to a mine.
 all protective works being carried out in or adjacent to a mine.
 viii)all workshops and stores situated within the precincts of a mine and under the same
management and used primarily for the purposes connected with that mine or a number of
mines under the same management.
 all power stations, transformer substations, converter stations, rectifier stations and
accumulator storage stations for supplying electricity solely or mainly for the purpose of
working the mine or a number of mines under the same management.
 any premises for the time being used for depositing sand or other material for use in a mine
or for depositing refuse from a mine or in which any operations in connection with such sand
, refuse or other material is being carried on , being premises exclusively occupied by the
owner of the mine:
 any premises in or adjacent to and belonging to a mine on which any process ancillary to the
getting, dressing or preparation for sale of minerals or of coke is being carried on_
The aforesaid definition of mine is very wide. It includes every kind of operation. [Tarkeshwar a Dar
Doss Dey, (1979) 3 SCC 106.] It also includes a quarry. [Rani Umeshwari v Member Board of Revenue,
(1967) 1 SCA 413.]
However, "Mine" does not include office of a mine even though situated at the surface of the mine
itself. [Serajuddin a Workmen, Air 1966 SC 921: (1962) 1 LLJ 450.1
Mineral
Under the Act "mineral" means all substances which can be obtained from the earth by mining,
digging; drilling, dredging, hydraulicing, quarrying or by any other operation and includes mineral
oils, which in turn include natural gas and petroleum.
Open Cast Working

"Open cast working" means a quarry, that is to say, an excavation where any operation for the
purpose of searching for or obtaining minerals has been or is being carried on, not being a shaft or
an excavation, which extends below superjacent ground.
Non-applicability of the Act

The Act is not applicable to:
a) any mine or part thereof in which excavation is being made for prospecting purposes only and not
for the purpose of obtaining minerals for use or sale:
b) any mine engaged in the extraction of kankar, murrum, laterite boulder, gravel, shingle, ordinary
sand (excluding moulding sand, glass sand and other mineral sands), ordinary clay (excluding
kaolin, china clay, white clay or fire clay), building stone, slate, road metal, earth, fullers earth, marl
chalk and limestone.

Notes
Coverage
A person is said to be "employed" in a mine who works as the manager or who works under
appointment by the owner, agent or manager of the mine or with the knowledge of the manager,
whether for wages or not-
 in any mining operation (including the concomitant operations of handling and transport of
minerals up to the point of dispatch and of gathering sand and transport thereof to the mine);
 in operations or services relating to the development of the mine including construction of
plant therein but excluding construction of buildings, roads, wells, and any building work not
directly connected with any existing or future mining operations.
 in operating, servicing, maintaining, or repairing any part of any machinery used in or . about
the mine.
 in operating, within the premises of the urine, of loading for dispatch of minerals.
 in any office of the rune.
 in any welfare, health, sanitary or conservancy services required to be provided under this
Act, or watch and ward, within the premises of the mine excluding residential area, or
 in any kind of work, whatsoever which is preparatory of incidental to, or connected with,
mining operations.
17.3 Mining
Notice to be given of mining operations: Section 16 imposes an obligation upon the own, agent
or manager of a mine that he shall, before the commencement of any mining operation notice give to
the Chief Inspector, the Controller, Indian Bureau of Mine and the district magistrate of the district
in which the mine is situated. The notice should be in writing in prescribed form containing
prescribed particulars relating to the mine. Such notice shall be so given at least one month before
the commencement of any mining operation.
Managers: Every mine shall be under a sole manager having the prescribed qualifications and the
owner or agent of every mine shall appoint a person having such qualifications to be the manager.
The owner or agent may also appoint himself as manager if he possesses the prescribed qualification.
The manager shall be responsible for the overall management, control, supervision and direction of
the mine and all such instructions when given by the owner or agent shall be confirmed in writing
forthwith.
Duties and responsibilities of owners, agents and managers
1) The owner and agent of every mine shall each be responsible for making financial and other
provision and for taking such other steps as may be necessary for complains with the provisions
of this Act and the regulations, rules, byelaws and others made thereunder.
2) The responsibility in respect of matters provided for in the rules made -under clauses (d), (e)
and (p) of Section 58 shall be exclusively carried out by the owner and agent of the mine and by
such person (other than the manager) whom the owner or agent may appoint for securing
compliance with the aforesaid provisions.
3) If the carrying out of any instructions given under Sub-section (2) or given otherwise than
through the manager under Sub-section (3) of Section 17, results in the contravention of the
provisions of this Act or of the regulations, rules, byelaws or orders made thereunder, every
person giving such instructions shall also liable for the contravention of the provisions
concerned.

Notes
4) Subject to the provisions of Sub-section (1), (2) and (3), the owner, agent and manager of every
mine shall each be responsible to see that all operations carried on in connection with the mine
are conducted in accordance with the provisions of this Act and of the regulations, rules, bye-
laws and orders made thereunder.
 In the event of any contravention by any person whosoever of any of the provisions of this
Act or of the regulations, rules, bye-laws or orders made thereunder except those which
specifically require any person to do any act or thing or prohibit any person from doing as
actor thing, besides the person who contravenes, each of the following person shall also be
deemed to be- guilty of such contravention unless he proves that he had used due diligence
of secure compliance with the provisions and had taken reasonable means to prevent such
contravention :-
 the official or officials appointed to perform duties of supervision in respect of the
provisions contravened;
 the manager of the mine;
 the owner and agent of the mine;
 the person appointed, if any, to carry out the responsibility under Sub- section (2):
Provided that any of the persons aforesaid may not be proceeded against if it appears on inquiry and
investigation, that he is not prima facie liable .However; R shall not be a defence in any proceedings
brought against the owner or agent of the mine under this section that the manager and other officials
have been appointed in accordance with the provisions of this Act or that a person to carry the
responsibility under Sub- section (2) has been appointed.
17.4 Administration of the Act

1. Constitution
1)The Central Government is required to constitute a committee consisting of-

a) a person in the service of the Government, not being the Chief Inspector or an Inspector,
appointed by the Central Government to act as Chairman.
b) the Chief Inspector of Mines.
c) two persons to represent the interests of miners appointed by the Central Government.
d) two persons to represent the interests of owners of mines appointed by the Central
Government.
e) two qualified raining engineers not directly employed in the mining industry,
appointed by the Central Government.
2. Functions of the Committee

The Committee constituted shall-
a) consider proposals for making rules and regulations under this Act and make appropriate
recommendations to the Central Government.
b) enquire into such accidents or other matters as may be referred to it by the Central
Government from time to time and make reports thereon; and
c) hear and decide such appeals or objections against notices or orders under this Act or the
regulations, rules or bye-laws thereunder; as are required to be referred to it by this Act or as
may be prescribed.
3. Powers of the Committee

Notes
1) A Committee constituted under Section 12 may exercise such of the powers of an Inspector
under this Act as it thinks necessary or expedient to exercise for the purposes of discharging
its functions under this Act.
2) A Committee constituted under Section 12 shall, for the purposes of discharging its functions,
have the same powers as are vested in a court under the Code of Civil Procedure, 1908 when
trying a suit in respect of the following matters, namely; -
a) discovery and inspection;
b) enforcing the attendance of any person and examining him on oath;
c) compelling the production of documents; and
d) such other matters as may be prescribed.
4. Recovery of Expenses
The Central Government may direct that the expenses of any inquiry conducted by a Committee
constituted under Section 12 shall be born in whole or in part by the owner or agent of the mine
concerned.
17.5 Enforcement of the Act

Inspectors
1. Appointment of Chief Inspector and Inspectors:
The Central Government is empowered to appoint such a person as possesses the prescribed
qualifications to be Chief Inspector of Mines for all the territories to which this Act extends and such
persons as possess the prescribed qualification to be Inspector of Mine subordinate to the Chief
Inspector. But no person shall be appointed to be Chief Inspector or an Inspector, or having been
appointed shall continue to hold such office, who is or becomes directly or indirectly interested in
any mine or mining rights in India.
The district magistrate may also exercise the powers and perform the duties of an Inspector subject
to the general or special orders of the Central Government.
2. Functions of Inspectors
i. The Chief Inspector is empowered after seeking the approval of the Central
Government to authorize any Inspector named or any class of Inspectors specified in
the order to exercise such of the powers of the Chief Inspector under this Act (other
than those relating to appeals) as he may specify.
ii. The Chief Inspector may, be order in writing, prohibit, or restrict the exercise by any Inspector
named or any class of Inspector specified in the order of any power conferred on Inspectors under
this Act.
3. Powers of Inspectors of Mines

The Chief Inspector and any Inspector is empowered to;
a) make such examination and inquiry as he thinks fit in order to ascertain whether the provisions of
this Act and of the regulations, rules and bye-laws and of any orders made thereunder are observed
in the case of any mine;
b) with such assistants, if any, as he thinks fit, enter, inspect and examine any mine or any part thereof
at any time by day or night. However, the power conferred by this clause shall not be exercised in
such a manner as unreasonably to impede or obstruct the working of the mine;
c) examine into, and make inquiry respecting, the state and condition of any nine or any part thereof,
the ventilation of the mine, the sufficiency of the bye-laws. for time being in force relating to the mine,

Notes
and all matters and things connected with or relating to the health, safety and welfare of the person
employed in- the mine, and take whether on the precincts of the mine or elsewhere, statements of
any person which he may consider necessary for carrying out purposes of this Act;
d) exercise such other powers as may be prescribed by regulations made by the Central Government
in this behalf.
4. Facilities to be provided for occupational health survey

i. The Chief Inspector or an Inspector or other officer authorized by him in writing in this behalf may,
at any time during the normal working hours of the mine or at any time by day or night as may be
necessary, undertake safety- and occupational health survey in a mine after giving notice in writing
to the manager of the mine; and the owner, agent or manager of the mine shall afford all necessary
facilities (including facilities for the examination and testing of plant and machinery, for the collection
of samples and other data pertaining to the survey and for the transport and examination of any
person employed in the. mine chosen for the survey) to such Inspector or officer.
ii. Every person employed in a mine who is chosen for examination in any safety and occupational
health survey under sub-section (1) shall present himself for such examination and at such place as
may be necessary and shall furnish all information regarding his work and health in connection with
the said survey.
iii. The time spent by any person employed in a mine who is chosen for examination in the safety
and occupational health survey, shall be counted towards his working time, so however that any
overtime shall be paid at the ordinary rate of wages.
iv. Any person who, on examination under Sub-section (2), is found medically unfit to discharge the
duty which he was discharging in a mine immediately before such presentation shall be entitled to
undergo medical treatment at the cost of the owner, agent and manager with fall wages during the
period of such treatment.
v. If, after the medical treatment, the person referred to in Sub-section (4) is declared medically unfit
to discharge the duty which he was discharging in a mine immediately before presenting himself for
the said examination and such unfitness is directly ascribable to Ids employment in the mine before
such presentation, the owner, agent and manager shall provide such person with an alternative
employment in the mine for which he is medically fit:
vi. The rates under the provisos to Sub-section (5) shall be determined having regard to the monthly
wages of the employees, the nature of disabilities and other related factors.
Secrecy of information obtained:
All the copies of and extracts from, registers or other records, appertaining to any mine and all other
information acquired by the Chief. Inspector or an Inspector or by any one assisting him, he the
course of the inspection [or survey] of any mine under this Act or acquired by any person authorized
under Section 8 or Section 9- A in the exercise of his duties thereunder; shall be regarded as
confidential and shall not be disclosed to any person or authority unless the Chief Inspector or the
Inspector considers disclosure necessary to ensure the health, safety or welfare of any person
employed in the mine or in any other mine adjacent thereto.
17.6 Certifying Surgeons

1). The Central Government may appoint qualified medical practitioners to be certifying surgeons
for the purpose of this Act within such local limits or for such mine or class or description of mines
as it may assign to them respectively.'
2). A certifying surgeon may, with the approval of the Central Government, authorize any qualified
medical practitioner to exercise all or any of his powers under this Act for such period as the
certifying surgeon may specify, and references to a certifying surgeon shall be deemed to include
references to any qualified medical practitioner when so authorized.
3).No. person shall be appointed to be, or authorized to exercise the powers of, a certifying surgeon,
or, having been so appointed or authorized, continue to exercise such powers, who is or becomes the
owner, agent or manager of a mine, or is or becomes directly or indirectly interested therein, or in

Notes
any process or business carried on therein or in any patent or machinery connected therewith, or is
otherwise in the employment of the mine.
4). The certifying surgeon is required to carry out such duties as may be prescribed in connection
with-
a) the examination of persons engaged in a mine in such dangerous occupations or processes as may
be prescribed;
b)the exercise of such medical supervision as may be prescribed for any mine or class or description
of mines where-
 cases of illness have occurred which it is reasonable to believe are due to the nature of any
process carried on or other, conditions of work prevailing in the mine.
17.7 Health and Safety

1.Drinking Water
In every mine effective arrangement shall be made $o provide and maintain at suitable points
conveniently situated a sufficient. supply of cool and wholesome drinking water for all persons
employed therein.
All such points shall be legibly marked "DRINKING WATER' in a. language understood by a
majority of the persons employed in the mine and no such point shall be situated within six meters
of any washing place, urinal or latrine, unless a shorter distance is approved in writing by the Chief
Inspector.
2.Conservancy
There shall be provided, separately for males and females in every mine, a sufficient number of
latrines and urinals of prescribed types so situated as to be convenient and accessible to persons
employed in the mine at all times.
3.Medical appliances
1).In every mine there shall be provided and maintained -so as to be readily accessible during all
working hours such number of first-aid boxes or cupboards equipped with such contents as may be
prescribed.
2).Nothing except the prescribed contents shall be kept in a first-aid box or cupboard or room.
3).Every first-aid box or cupboard shall be kept in the charge of a responsible person who is trained
in such first-aid treatment as may be prescribed and who shall always be readily available during the
working hours of the nine.
4).In every mine there shall be made so as to be readily available such arrangements as may be
prescribed and who shall always be readily available during the working hours of the mine.
5).In every mine wherein more than one hundred and fifty persons are employed, there shall be
provided and maintained a first-aid room of such size with such equipment and in the charge of such
medical and nursing staff as may be prescribed.
4. Notice to be given of accidents

Whenever there occurs in or about a mine-
a) an accident causing loss of life or serious bodily injury, or
b) an explosion, ignition, spontaneous heating, outbreak of fire or irruption or inrush of water or
other liquid matter, or
c) an influx of inflammable or noxious gases, or
d) a breakage of ropes, chains or other gear by which persons or materials are lowered or raised in a
shaft or an incline, or
e) an over winding of cages or, other means of conveyance in any shaft while persons or materials
are being lowered or raised, or

Notes
f) a premature collapse of any part of the workings, or

g) any other accident which maybe prescribed,
the owner, agent or manager of the mine shall give notice of the occurrence to such authority in such
form and within such time as may be prescribed, and he shall simultaneously post one copy of the
notice on a special notice board in the prescribed manner at a place where it may be inspected by
trade union officials, and shall ensure that the notice is kept on the board for not less than fourteen
days from the date of such posting.
5. Power of Government to appoint court of inquiry in cases of accidents

When any accident of the nature referred to in any of the clauses of sub- section (1) of Section 23
occurs in or about a mine, the Central Government may, if it is of opinion that a formal inquiry into
the causes of and circumstances attending the accident ought to be held, appoint a competent person
to hold such. inquiry and may also appoint one or more persons possessing legal or special
knowledge to act as assessor or assessors in holding the inquiry.
6. Notice of certain diseases

Where any person employed in a mine contracts any disease notified by Central Government in the
021cial Gazan as a disease connected with mining operations, the owner, agent or manager of the
mine, as the case may be, shall send notice thereof to the Chief Inspector and to such other authorities,
in such form and within such time as may be prescribed.
7. Power to direct investigation of causes of disease
The Central Government may, if it considers it expedient to do so, appoint a competent person to
inquire into and report to it on may case where a disease notified under sub-section (1) of Section 25
has been or is suspected to have been contracted in a mine, and may also appoint one or more persons
possessing legal or special knAle4pe to act as assessors in such inquiry.
17.8 Hours and Limitation of Employment

1. Hours of work above ground
No adult employed above ground in a mine shall be required or allowed to work for more than forty-
eight hours in any week or for more than nine hours in any day.
2. Hours of work below ground

No adult employed. below ground in a mine shall be allowed to work for more than forty-eight hours
in any week or for more than eight hours in any day.
3. Extra wages for overtime

Where in a mine a person works above ground for more than nine hours in any day, or works below
ground for more than eight hours in any day, or works for more than forty-eight hours in any week
whether above ground or below ground, he shall in respect of such overtime work be entitled to
wages at the rate of twice his ordinary rate of wages, the period of overtime work being calculated
on a daily basis or weekly basis, whichever is more favorable to him.
4. Prohibition of employment of certain persons

No person shall be required or allowed to work in a mine if he has already been working in any other
mine within the preceding twelve hours.
5. Limitation of daily hours of work including overtime work

Save in respect of cases falling within clause (a) and clause (e) of Section 39, no person employed in
a mine-shall be required or allowed to work in the mine for more than ten hours in any day inclusive
of overtime.
6. Employment of persons below eighteen years of age

No person below eighteen years of age shall be allowed to work. in any mine or part thereof.
However apprentices and other trainees, not below sixteen years of age, may be allowed to work,

Notes
under proper supervision, in amine or part thereof by the manager with prior approval of the Chief
Inspector or an Inspector shall be obtained before they are allowed to work.
7. Prohibition of the presence of persons below eighteen years of age in a mine

No person below eighteen years of age shall be allowed to be present in any part of a mine above
ground where any operation connected with or incidental to any mining operation is being carried
on.
8. Employment of women
1)No woman shall, notwithstanding anything contained, in any other law, be employed.
(a) in any part of a mine which is below ground.
(b) in any mine above ground except between the hours of 6 a.m. and 7 p.m.
2)Every woman employed in a mine above ground shall be allowed an interval of not less than eleven
hours between the termination of employment on, any one day and the commencement of the next
period of employment.
17.9 Leave With Wages

i) Annual leave with wages
1)Every person employed in a mine who has completed a calendar years’ service therein shall be
allowed during the subsequent calendar year, leave with wages, calculated-
a) in the case of a person employed below ground, at the rate of one day for every fifteen days
of work performed by him, and
b) in any other case, at the rate of one day for every twenty days of work performed by him,
ii) Payment in advance in certain cases

Any person employed in a mine who has been allowed leave for not less than four days, shall, before
his leave begins, be paid the wages due for the period of the leave allowed.
iii) Mode of recovery of unpaid wages

Any sum required to be paid by the owner, agent or manager of a mine under this Chapter but not
paid by him shall be recoverable as delayed wages under the provision of the Payment of Wages Act,
1936.
Summary
 “Mine" means any excavation where any operation for the purpose of searching for or
obtaining minerals has been or is being carried on.
 In every mine where more than one hundred and fifty persons are employed, a maintained
first-aid room of such size with such equipment and in the charge of such medical and
nursing staff as may be prescribed.
 For every mine wherein 500 or more persons are ordinarily employed, the owner, agent or
manager shall designate three suitably qualified employees of the mine in consultation with
the registered trade union in the mine.
Keywords
 Mining
 Mineral

Notes
 Inspectors
 Certifying Surgeons
 Health and Safety
Self Assessment
Q1. Which chapter of The Mines Act, 1952 describes different provisions of Health and Safety?
A. Chapter 5
B. Chapter 6
C. Chapter 7
D. Chapter 4
Q2. Which section describes the Drinking Water provisions under Mines Act?
A. Section 15
B. Section 17
C. Section 19
D. Section 21
Q3. In every mine where more than ________________ persons are employed, a maintained first-
aid room of appropriate size with all equipment and in the charge of such medical and nursing
staff as may be prescribed.
A. 170
B. 150
C. 200
D. 180
Q4. The reports submitted by a committee need to be published.
A. True
B. False
Q5. Which section under Mines Act describes power of Government to appoint a court of inquiry
in cases of accidents?
A. Section 24
B. Section 25
C. Section 26
D. Section 27
Q6. The definition of Mines include:
A. all levels and inclined planes in the course of being driven;

B. all open cast workings;
C. all protective works being carried out in or adjacent to a mine
D. All of the above

Notes
Q7. Powers of Inspectors when causes of danger not expressly provided against exist or when
employment of persons is dangerous is included in which section?
A. Section 23
B. Section 22
C. Section 24
D. Section 25
Q8. If the owner, agent or manager of the mine objects to a notice sent by the Chief Inspector or
an order made by the Chief Inspector he may, within twenty days after the receipt of the notice
containing the requisition or of the order or after the date of the decision on appeal. Is this
statement true?
A. True
B. False
Q9. For every mine wherein __________ persons are ordinarily employed, the owner, agent or
manager shall designate three suitably qualified employees of the mine in consultation with
the registered trade union in the mine.
A. 500 or more
B. 520 or more
C. 300 or more
Q10. No person shall act as a workmen's inspector of a mine unless he possesses an Over men's
or Foreman's Certificate granted. Is it correct?
A. True
B. False
Q11.For becoming Workmen’s inspector, how many years of experience in mines shall be
required?
A. Four
B. Five
C. Six
D. Two
Q12. An official of the mine shall accompany the workmen's inspector during his inspection.
A. True
B. False
Q13. Which cannot be included as the duty of workmen’s inspector?
A. to inspect all shafrs, inclines, roads, workplaces and the equipment threat including the
equipment for conveyance and transport of workers
B. to accompany the Inspector in the course of complete inspection of the mine

Notes
C. The workmen's inspector shall record a full report of the matters ascertained because of his
inspection in an interleaved paged and bound register kept for the purpose at the mine in
Form U.
Q14. Which section under Mines act describes Safety Committee?
A. Section 29-T
B. Section 29-U
C. Section 29-V
D. Section 29-B
Q15. The owner, agent or manager shall, within a period of _______ from the date of receipt of
the recommendations of the safety committee, shall indicate to the Secretary to the safety
committee, the action taken to implement the recommendation.
A. 20 days
B. 15 days
C. 25 days
D. 30 days

l. A 2. C 3. B 4. A 5. A
6. D 7. B 8. A 9. A 10. A
11. B 12. A 13. D 14. A 15. B
Review Questions
Q1. What are the functions of the Committee?
Q2. What are the duties of Certifying Surgeons?
Q3. How are Inspectors appointed? What are their powers?
Q4. What are the provisions regarding working hours for adult?
Q5. What are the provisions for annual leave with wages?
Further Readings

Notes
Jaskiran Kaur, Lovely Professional University Unit 18: ILO
Unit 18: ILO

CONTENTS
Objective
Introduction
18.1 International Labour Organization
18.2 Conventions and Recommendations
18.3 India & ILO
Summary
Keywords
Self Assessment
Review Questions
Further Readings
Objective
 become aware about the basic of International Labour Organization.

 get awareness about the structure of International Labour Organization.
 learn about the functions of International Labour Organization.
 get awareness about Conventions and Recommendations of International Labour
Conference.
 learn how India & ILO are inter-related,
 get awareness about three organs of ILO.
Introduction
The International Labour Organization (ILO) is a United Nations agency whose mandate is to
advance social and economic justice by setting international labour standards. Founded in October
1919 under the League of Nations, it is the first and oldest specialised agency of the UN. The ILO has
187 member states: 186 out of 193 UN member states plus the Cook Islands. It is headquartered in
Geneva, Switzerland, with around 40 field offices around the world, and employs some 3,381 staff
across 107 nations, of whom 1,698 work in technical cooperation programmes and projects.
The ILO's standards are aimed at ensuring accessible, productive, and sustainable work worldwide
in conditions of freedom, equity, security and dignity. They are set forth in 189 conventions and
treaties, of which eight are classified as fundamental according to the 1998 Declaration on
Fundamental Principles and Rights at Work; together they protect freedom of association and the
effective recognition of the right to collective bargaining, the elimination of forced or compulsory
labour, the abolition of child labour, and the elimination of discrimination in respect of employment
and occupation. The ILO is a major contributor to international labour law.
18.1 International Labour Organization

The only tripartite U.N. agency, since 1919 the ILO brings together governments, employers and
workers of 187 member States, to set labor standards, develop policies and devise programme
promoting decent work for all women and men.

Notes
ILO through its conventions & recommendations has undertaken the task of creating international
minimum standards of labor which constitutes the international labor code.
Coverage Wide Range of Subjects
ILO cover a wide range of subjects including-

wages, hours of work, annual holidays with pay, minimum age of employment, medical
examination, maternity protection, industrial health, safety & welfare, social security, freedom of
association, right to organize & bargain collectively, employment of seamen & employment
Aims of ILO
1. To remove the hardships and privations of the toiling masses all over the world and to
ensure economic justice for them;
2. To improve their living and working conditions, as a vital step towards the establishment
of universal and lasting peace, based on social justice.
Structure of ILO
• The ILO is a tripartite organization, consisting of representatives of the governments,
employers and workers of member-countries in the ratio of 2:1:1.
• It has helped in the formation of the organisations of employers and of workers in different
countries.
• The first national trade union organization – the AITUC – in our country was formed within
one year of the setting up of the ILO, so that the representative of the Indian workers might
attend the International Labor Conferences.
Principal Organs of the ILO

1. The International Labour Conference
2. The Governing Body
3. The International Labour Office
1. International Labour Conference

• The conference is held once a year.
• Each member- country is represented by four delegates - two representing the Government,
one representing the employers and one representing the workers.
• The main task of the Conference is to set up minimum international, social and labor
norms/standards in the form of conventions or recommendations.
• A convention is binding on the member-state which ratifies it, while a recommendation is
intended as a guideline.
• Member states must place before their national Parliaments all conventions ratified by the
Conference for acceptance or rejection within 18 months of their adoption.
2. Governing Body
• The Governing Body is the chief executive body of the organization and meets four times a
year.
• This body is also tripartite in character, with a membership of 40-the representatives of
governments are 20 and 10 each representing employers and workers.
• The Governing Body is responsible for effective programming of the work of the ILO.
• Members of the Governing Body are elected by the corresponding groups in the International
Labor Conference, except that 10 of the government representatives are appointed by

Notes
Unit 18: ILO
countries that do not participate in the election of the other government representatives since
these 10 countries are entitled to permanent seats as "states of chief industrial importance."
• The Governing Body coordinates and in many ways shapes the work of the organization.
• It draws up the agenda for each session of the International Labour Conference; while the
conference is empowered to change this agenda, it rarely does.
• The Governing Body appoints the Director-General of the International Labour Office.
• It examines the proposed budget submitted to it each year by the Director-General and
approves it for adoption by the conference.
• The Governing Body also is responsible for convening the scores of other conference and
committee meetings held under ILO auspices every year in various parts of the world and
decides what action ought to be taken on their resolutions and reports.
3. International Labour Office

• This office is responsible for the day-to-day activities of the organization and has branches in
9 countries, including India.
• The ILO has 3 Regional Advisory committees - the Asian Advisory Committee, the African
Advisory Committee and the Inter-American Advisory Committee.
• The International Institute of Labor studies were established in 1960 as a centre for advanced
studies in the social and labour fields.
• The work of ILO may be divided into three parts:
1. Legislative:
Arising out of the conventions and recommendations adopted by the International Labour
Conference.
2. Operational:
These activities pertain to technical assistance, including vocational training programmes,
provided and undertaken by the ILO in various parts of the world.
3. General
The work of industrial committees, regional conferences, other committees and
commissions and the publications of the ILO.
Functions of ILO
The ILO plays an important role in the formulation of policies which are focused on solving labor
issues.
The ILO also has Other Functions
1. It adopts international labour standards. They are adopted in the form of conventions. It
also controls the implementation of its conventions.
2. It aids the member states in resolving their social and labor problems.
3. It advocates and works for the protection of Human rights.
4. It is responsible for the research and publication of information regarding social and labor
issues.
5. The Trade Unions play a pivotal role in developing policies at the ILO, thus the Bureau for
Workers’ Activities at the secretariat is dedicated to strengthening independent and
democratic trade unions so they can better defend workers’ rights and interests.
The ILO also Assumes a Supervisory Role:
It monitors the implementation of ILO conventions ratified by member states.
1. The implementation is done through the Committee of Experts, the International Labor
Conference’s Tripartite Committee and the member-states.

Notes
2. Member states are obligated to send reports on the development of the implementation of
the conventions they have approved.
Registration of complaints:
1. The ILO registers complaints against entities that are violating international rules.
2. The ILO, however, does not impose any sanctions on the governments.
3. Complaints can also be filed against member states for not complying with ILO conventions
that have been ratified.
International Labour Standards
• The ILO is also responsible for setting International Labor Standards.
• The international labor conventions which are set by the ILO are ratified by the member
states.
• These are mostly non-binding in nature.
• But once a member state accepts conventions, it becomes legally binding.
• The conventions are often used to bring national laws in alignment with international
standards.
ILO Global Commission on the Future of Work:
The formation of an ILO Global Commission on the Future of Work marks the second stage in the
ILO Future of Work Initiative.
1. The Commission outlines a vision for a human-centerd agenda that is based on investing in
people’s capabilities, institutions of work and decent and sustainable work.
2. It also describes the challenges caused by new technology, climate change and demography
and appeals for a collective global response to the disturbances being caused in the world
of work.
18.2 Conventions and Recommendations

• One of the principal functions of the International Labor Organization is to secure
international minimum social and labor standards.
• These standards are embodied in resolutions in the form of Conventions and
Recommendations, adopted by the International Labor Conference by at least 2/3rds of the
delegates present at the conference and voting.
• The conference decides whether these resolutions will take the form of a Convention or a
Recommendation.
• Thus, Conventions or Recommendations are instruments for creating and establishing
international minimum social and labor standards.
What do you mean by Conventions & Recommendations?
1. Conventions:
i. Conventions (or Protocols), are legally binding international treaties that may be ratified by
member states.
ii. Convention lays down the basic principles to be implemented by ratifying countries.
2. Recommendations:
i. Recommendations, which serve as non-binding guidelines.
ii. A related Recommendation supplements the Convention by providing more detailed
guidelines on how it could be applied.
iii. Recommendations can also be autonomous, i.e. not linked to a Convention.
Fundamental Conventions

Notes
Unit 18: ILO
The ILO Governing Body had initially identified eight “Fundamental” Conventions, covering
subjects that were considered to be fundamental principles and rights at work:
1. Freedom of association and the effective recognition of the right to collective bargaining;
2. The elimination of all forms of forced or compulsory labor;
3. The effective abolition of child labour; and
4. the elimination of discrimination in respect of employment and occupation.
Adoption of New Resolution
 At the 110th Session of the International Labor Conference in June 2022, the ILC adopted a
Resolution on the inclusion of a safe and healthy working environment in the ILO’s
framework of fundamental principles and rights at work
• As a result, The ILO Declaration on Fundamental Principles and Rights at Work, 1998, has
been amended to this effect and The Occupational Safety and Health Convention, 1981 (No.
155) and the Promotional Framework for Occupational Safety and Health Convention, 2006
(No. 187) are now considered as fundamental Conventions within the meaning of the 1998
Declaration, as amended in 2022.
I. Fundamental Conventions
• Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87)
• Right to Organise and Collective Bargaining Convention, 1949 (No. 98)
• Forced Labour Convention, 1930 (No. 29) (and its 2014 Protocol)
• Abolition of Forced Labour Convention, 1957 (No. 105)
• Minimum Age Convention, 1973 (No. 138)
• Worst Forms of Child Labour Convention, 1999 (No. 182)
• Equal Remuneration Convention, 1951 (No. 100)
• Discrimination (Employment and Occupation) Convention, 1958 (No. 111)
• Occupational Safety and Health Convention, 1981 (No. 155)
• Promotional Framework for Occupational Safety and Health Convention, 2006 (No. 187)
II. Governance (Priority) Conventions

The ILO Governing Body has also designated another four Conventions as governance (or priority)
instruments, thereby encouraging member States to ratify them because of their importance for the
functioning of the international labor standards system.
Four Governance Conventions are:
• Labour Inspection Convention, 1947 (No. 81)
• Employment Policy Convention, 1964 (No. 122)
• Labour Inspection (Agriculture) Convention, 1969 (No. 129)
• Tripartite Consultation (International Labour Standards) Convention, 1976 (No. 144)
18.3 India & ILO

• India is a founder member of the International Labor Organization, which came into existence
in 1919.
• At present the ILO has 187 Members.
• A unique feature of the ILO is its tripartite character.

Notes
• The membership of the ILO ensures the growth of tripartite system in the Member countries.
• At every level in the Organization, Governments are associated with the two other social
partners, namely the workers and employers
• All the three groups are represented on almost all the deliberative organs of the ILO and share
responsibility in conducting its work.
The Three Organs of the ILO are:

1. International Labor Conferences: - General Assembly of the ILO – Meets every year in the
month of June.
2. Governing Body: - Executive Council of the ILO- Meets three times in a year in the months of
March, June and November.
3. International Labor Office: - A permanent secretariat.
1. International Labor Conference

1. Except for the interruption caused by the Second World War, the International Labor
Conference (ILC) has continued, since its first session in 1919 to meet at least once a year.
2. The Conference, assisted by the Governing Body, adopts biennial programme and budget,
adopts International Labor Standards in the form of Conventions and Recommendations and
provides a forum for discussing social, economic and labor related issues.
3. India has regularly and actively participated in the Conference through its tripartite
delegations.
The Conference has so far had 4 Indian Presidents
1. Sir. Atul Chatterjee (1927),
2. Shri Jagjivan Ram, Minister for Labour (1950),
3. Dr. Nagendra Singh, President, International Court of Justice (1970) and
4. Shri Ravindra Verma, Minister of Labour and Parliamentary Affairs (1979).
The Conference has so far had 4 Indian Presidents

There have also been 8 Indian Vice Presidents of the International Labor Conference, 2 from the
Government group, 3 from the Employers and 3 from the Workers’ Group.
Indians have chaired the important Committees of the Conferences like Committee on Application
of Standards, Selection Committee and Resolutions Committee.
2. Governing Body
• The Governing Body of the ILO is the executive wing of the Organization.
• It is also tripartite in character.
• Since 1922 India has been holding a non-elective seat on the Governing Body as one of the 10
countries of chief industrial importance.
• Indian employers and workers’ representatives have been elected as Members of the
Governing Body from time to time.
Four Indians have so far been Elected Chairmen of the Governing Body.
• Sir Atul Chatterjee (1932-33),
• Shri Shamal Dharee Lall, Secretary, Ministry of Labor (1948-49),
• Shri S.T. Merani, Joint Secretary, Ministry of Labor (1961-62) and
• Shri B.G. Deshmukh, Secretary, Ministry of Labor (1984-85).

Notes
Unit 18: ILO
Earlier, the Governing Body of ILO functioned Through its Various Committees.
India was a member of all six committees of the Governing Body.
(i) Programme, Planning & Administrative;
(ii) Freedom of Association;
(iii) Legal Issues and International Labor Standards;
(iv) Employment & Social Policy;
(v) Technical Cooperation and
(vi) Sectoral and Technical Meetings and Related issues.
Now the Governing Body of ILO functions through its various Sections and India takes part in all the
proceedings of the Sections during the sessions of the Governing Body.
• Institutional Section (INS);
• Policy Development Section(POL);
• Legal Issues and International Labor Standards Section (LILS);
• Programme, Financial and Administrative Section(PFA);
• High-level Section(HL); and
• Working Party on the Functioning of the Governing Body and the International Labour
Conference (WP/GBC)
3. The International Labour Office

• The International Labor Office, Geneva provides the Secretariat for all Conferences and other
meetings and is responsible for the day-to-day implementation of decisions taken by the
Conference, Governing Body etc.
• Indians have held positions of importance in the International Labor Office.
4. International Labour Standards-ILO Conventions

• The principal means of action in the ILO is the setting up the International Labor Standards
in the form of Conventions and Recommendations.
• Conventions are international treaties and are instruments, which create legally binding
obligations on the countries that ratify them.
• Recommendations are non-binding and set out guidelines orienting national policies and
actions.
The Approach of India with Regard to International Labor Standards has Always been Positive.
 The ILO instruments have provided guidelines and a useful framework for the evolution of
legislative and administrative measures for the protection and advancement of the interest of
labor.
 To that extent the influence of ILO Conventions as a standard of reference for labor legislation
and practices in India, rather than as a legally binding norm, has been significant.
 Ratification of a Convention imposes legally binding obligations on the country concerned
and, therefore, India has been careful in ratifying Conventions.
 It has always been the practice in India that we ratify a Convention when we are fully satisfied
that our laws and practices are in conformity with the relevant ILO Convention.

Notes
Core Conventions of ILO Ratified by India

• Forced Labor Convention (No. 29)
• Abolition of Forced Labor Convention (No.105)
• Equal Remuneration Convention (No.100)
• Discrimination (Employment Occupation) Convention (No.111)
• Minimum Age Convention (No.138)
• Worst forms of Child Labor Convention (No.182)
• Freedom of Association and Protection of Right to Organized Convention (No.87)
• Right to Organize and Collective Bargaining Convention (No.98)
• C155 - Occupational Safety and Health Convention, 1981 (No. 155)
• C187 - Promotional Framework for Occupational Safety and Health Convention, 2006 (No.
187)
Chairmanship of the Governing Body of the ILO

• Shri Apurva Chandra, Secretary (Labor and Employment) was elected as the Chairperson of
the Governing Body of the International Labor Organization (ILO) for the period October
2020- June 2021.
• The Chairperson of the Governing Body of ILO is a position of international repute.
Summary
 The ILO was established as an agency for the League of Nations following World War I.
 It was established by the Treaty of Versailles in 1919.
 Its founders had made great strides in social thought and action before the establishment of
the organization itself.
 It became the first specialised agency of the United Nations (UN) in the year 1946.
 The ILO has played a significant role in promoting labour and human rights. It had held a
significant position during the Great Depression (1930s) for ensuring labour rights.
 It played a key role in the decolonization process and in the victory over apartheid in South
Africa.
 The organization got the Nobel Peace Prize in 1969, for its efforts to improve peace amongst
the classes, and for promoting justice and fair work for the workers.
 The ILO works to promote social justice at the workplace, as it believes that social justice is
the key to lasting peace. It also promotes employment generation and the concept of decent
work, while adhering to international labour and human rights.
 The ILO formulates policies and programmes which are aimed at serving the needs of the
working men and women. The policies ensure that all workers have an equal opportunity, get
respected for their work, and get paid decent wages.
Keywords
 International Labour Organisation: The International Labour Organization (ILO) is a United
Nations agency whose mandate is to advance social and economic justice by
setting international labour standards.

Notes
Unit 18: ILO
 Governing Body: The Governing Body is the executive body of the International Labour
Organization.
 International Labour Office: It is the permanent secretariat of the International Labour
Organization.
Self Assessment
1. The International Labor Organization was originally established as autonomous part of League
of Nations in?
A. 1918
B. 1919
C. 1917
D. 1920
2. The ILO was brought into formal relationship with the UN in_________?
A. 1946
B. 1945
C. 1944
D. 1947
3. The ILO is composed of how many member nations?
A. 167
B. 170
C. 185
D. 165
4. ILO sets standards for which of the following?
A. Disabled workers
B. Human rights
C. Elimination of forced labour
D. All of them
5. The ILO governing body is composed of how many members?
A. 25
B. 22
C. 56
D. 20
6. Why is ILO different from other UN Organizations?
A. Representative of employees and government official take part.

B. Representative of employers, employees and government official take part in work.
C. UNO officials and employees work together.
D. None of them.

Notes
7. ILO headquarters are established in _________?
A. Washington
B. Paris
C. London
D. Geneva
8. ___________is the current director-general of ILO since 1999?
A. Miguel Angel Moratinos

B. Jose Manuel Barroso
C. Robert Schuman
D. Juan Somavia
9. International Labor Organization is agency of
A. IBRD
B. UN Security Council
C. International Fund for Agricultural Development
D. United Nations
10. Headquarter of 'International Labor Organization' is located in
A. Geneva
B. Rome
C. France
D. Tokyo
11. United Nations agency which deals with labor standards, social protection, and working
opportunities is
A. International Corporation of Law

B. International Law Organization
C. International Workforce Recruiters
D. International Labor Organization
12. International Labor Organization received Nobel Peace Prize, in
A. 1965
B. 1969
C. 1966
D. 1962
13. International Labor Organization was formulated in
A. 1915
B. 1917
C. 1919

Notes
Unit 18: ILO
D. 1918
14. India is one of the _________ members of International Labour Organization.
15. The principal function of the ILO is to take care of the interests of the workers by means of
setting up the international labour standards in the form of Conventions and
Recommendations.
A. True
B. False

l. B 2. A 3. C 4. D 5. C
6. B 7. D 8. D 9. D 10. A
11. D 12. B 13. C 14. Founding 15. A
Review Questions
1. What do you understand by International Labour Organization.
2. Describe the structure of International Labour Organization.
3. Enumerate the functions of International Labour Organization.
4. Give details about Conventions and Recommendations of International Labour Conference.
5. Discuss the relation of India and ILO.
6. What are the three organs of ILO.
Further Readings

Notes
Jaskiran Kaur, Lovely Professional University Unit 19: International Industrial Relations
Unit 19: International Industrial Relations

CONTENTS
Objectives
Introduction
19.1 International Industrial Relations
19.2 Responses of Trade Unions
Summary
Keywords
Self Assessment
Review Questions
Further Readings
Objectives
 learn about International Industrial relations,

 get awareness about key issues in International Industrial Relations.
 learn about the responses of Trade Union to Multinational.
 learn about the responses of Trade Union to Regional Integration.
 learn about the responses of Trade Union to Social Dumping.
Introduction
International Industrial Relations (IIR) handles the complicated associations between employers
employing foreign nationals, employees of various nationalities, home and host country governing
bodies and trade unions of the organizations functioning in different nations around the world in
addition to their national & international federations.
Globalization and international trade has put stress on organizations to standardize practices and
policies. Globalization’s influences on Human Resource Management come through the opening and
penetration of economic systems to outside forces. This is certainly a two-way procedure, with both
local organizations and multinational corporations embrace one another’s HRM practice.
19.1 International Industrial Relations

International industrial relations deals with the complex relationships among employers employing
foreign national, employees of different nationalities, home and host country governments and trade
unions of the organizations operating in various countries and their national & international
federations.
Globalization and international trade has put stress on organizations to standardize practices and
policies.
Globalization’s influences on Human Resource Management come through the opening and
penetration of economic systems to outside forces.

Notes
This is certainly a two-way procedure, with both local organizations and multinational corporations
embrace one another’s HRM practice.
Key Issues in International Industrial Relations (IIR)
Issue 1: Who should handle Labour Relations – Headquarter or the subsidiary in the concerned
country.
Issue 2: Trade Union Tactics
Issue 3: Political
Issue 4: Social and Identity
Issue 5: Power and knowledge
Let’s discuss each one of them one by one
Issue 1: Who should handle Labour Relations – Headquarter or the subsidiary in the concerned
country.
Who should handle Labor Relations – Headquarter or the subsidiary in the concerned country?
The national dissimilarities in economics, political, and legal systems create diverse labor-relations
system across countries, MNCs HQs typically delegate the control over labor relations to their foreign
subsidiaries.
What is the impact of participation of MNC headquarters in host-country labor relations?
The participation of the MNC headquarters in host-country labor relations is impacted by 4 key
elements:
1. In case there is a high level of inter-subsidiary production integration, the labor relations
function is centralized and is coordinated by the head quarter.
2. The nationality of ownership of the subsidiary has an influence on who should take care of
employee relations.
3. Furthermore, subsidiary character has a bearing on who should deal with employee
relations.
4. Finally, where a subsidiary is dependent more on its parent company for resources, you will
see a greater corporate involvement in labour relations.
Issue 2: Trade Union Tactics
Trade Unions make use of a number of tactics to deal with international business:
1. The most common one is ‘strike’:
A strike is a concerted and temporary suspension of work, intended to put pressure. Unions
should be cautions prior to resorting to a strike in international scenario because the
bargaining power of a union could possibly be threatened or weakened by the financial
resources of an MNC.
This is specially evident where a multinational firm uses transnational sourcing and cross
subsidization of its products or parts across different international locations.
2. Form International Trade Secretariats (ITSs):

There are Fifteen ITSs who help the exchange of information. Main objective of ITSs is to
accomplish transactional bargaining with the MNCs.
3. Lobbing for limited National Legislations –
Trade unions have for several years lobbied for restrictive national legislation in the U.S.
and Europe.
Trade unions pursue restrictive national legislation to avoid the export of jobs via
multinational investment policies.
4. Intervention from the Global Body like ILO, UNCTAD, EU, OECD:
ILO has issued guidelines which cover disclosure of information, competition, financing,
employment, industrial relations, taxation, science and technology.

Notes
Issue 3: Political
There is little doubt that national industrial relations (IR) systems continue to be greatly
different.
There are 3 faces of industrial relations which the international union movement encounters
in the international environment, specifically social democracy, neo-liberal and
authoritarian.
The dissimilarities in national industrial relations systems are also mirrored in the structure,
power and status of individual actors in the system.
For Example
• Trade unions maintain a comparatively strong position within the Scandinavian IR model
while their role is a lot more limited in the US context.
• The international labor movement is usually prohibited direct access to robust
intergovernmental establishments like the WTO.
• So, they have to depend on national government to represent their interests to these
institutions. Significantly, the interests of government might not always be directly in-line
with the union movement.
Issue 4: Social and Identity
• A key problem with the international labour movement and specifically international
collective bargaining is the absence of identity that individual workers have with their
international associates.
• They see these peak associations to be a lot more conservative than activists at the local level.
• Associated with this point, there is a common lack of solidarity between actors at a national
level.
• There are endemic cultural, social and language differences among individuals in different
countries resulting in lowering the degree of a shared identity between workers on an
international level.
Issue 5: Power and Knowledge
 While labor’s power continues to be local in scope, capital has grown to become more global
in nature and decisions effecting workers are increasingly being made at a supra-national
level.
 The locus of Multinationals decision making stretches beyond national borders and key
facts are seldom transparent or accessible to trade unions.
 Additionally, the well-rehearsed point that multinational organizations can counter the
strength of local unions by threatening to move manufacturing to another place so that they
can outmanoeuvre trade unions or following threats of industrial action is significant.
19.2 Responses of Trade Unions

I. Response of Trade Unions to Multinationals
Seeing the growth of multinationals as a threat to the bargaining power of labor because of the
considerable power and influence of large multinational firms.
Multinationals are not uniformly anti-union, but their potential lobbying power and flexibility across
national borders creates difficulties for employees and trade unions to develop countervailing power.
There are several ways in which multinationals have an impact upon trade union and employee
interests.
The response of trade unions to multinationals has been threefold:
1. Form international trade secretariats (ITSs)

Notes
2. Lobby for restrictive national legislation, and

3. Try to achieve regulation of multinationals by international organizations.
1. International trade secretariats (ITSs)
• There are 15 ITSs, which function as loose confederations to provide worldwide links for
the national unions in a particular trade or industry (e.g., metals, transport and chemicals).
• The secretariats have mainly operated to facilitate the exchange of information.
Long Term Goals: The long term goal of ITSs is to achieve transnational bargaining through a similar
program, involving:
Research and Information
Calling company conferences
Establishing company councils
Company-wide union-management discussions
Co-ordinated bargaining
Limited Success of ITSs

Reasons of limited success:
1. Generally good wages and working conditions offered by multinationals.
2. Strong resistance from multinational firm management.
3. Conflicts within the labour movement.
4. Differing laws and customs in the industrial relations field.
2. Lobby for Restrictive National Legislation

Trade unions have lobbied for restrictive national legislation in the USA and Europe for preventing
the export of jobs by the multinational to other locations.
3. Try to achieve regulation of multinationals by international organizations.
Attempts are made by trade unions to exert influence over multinationals via international
organizations such as:
i. Organization for Economic Cooperation and Development (OECD)
ii. International Labour Organization (ILO)
iii. United Nations Conference on Trade and Development (UNCTAD)
The International Labour Organization has identified a number of workplace-related principles that
should be respected by all nations:

Notes
Freedom of Association
The right to organize and collectively bargain
Abolition of forced Labour
Non-discrimination in employment
II. Responses of Trade Union to Regional Integration

Regional Integration refers to agreements among countries in a geographic region to reduce and
ultimately remove tariff and non-tariff barriers to the free flow of goods, services and factors of
production between each other.
Political Union
Economic Union
Common Union
Customs Union
Free Trade Area
a. Free Trade Area

All barriers to the trade of goods and services among member countries are removed.
b. Customs Union
Eliminates trade barriers between member countries and adopts a common external trade
policy.
c. Common Market
Has no barriers to trade between member countries, includes a common external trade
policy, and allows factors of production to move freely between members.
d. Economic Union
• Involves free flow of products and factors of production between member countries and
adoption of a common external trade policy.

Notes
• It also requires common currency, harmonization of members’ tax rates and a common
monetary & fiscal policy.
e. Political union
• Moving toward economic union, raises questions of how to coordinate bureaucracy
accountable to the citizens of member nations.
• Political union in which a central political apparatus coordinates the economic, social, and
foreign policy of the member states is the answer.
III. Responses of Trade Union to Social Dumping
Social dumping is a practice of employers to use cheap labour than is usually available at their site
of production or sale.
Industrial relations issues involved in social dumping
• The movement of work from one region to another, and its effect on employment levels.
• The need for trade union solidarity to prevent workers in one region from accepting pay
cuts to attract investment, at the expense of workers in another region.
Summary
 The increasing global demand for flexible labour has led to changes in the manner in which
the human resources are mobilized in the workplace, working practices and wages, mobility
of the workforce, and the set of skills expected from individual labour.
 However, this process naturally challenges institutionally and statutorily regulated industrial
relation systems in many countries.
 The global economic integration and interdependence have made the industrial relations
susceptible to international competition and changes, which previously used to be confined
within the national rules and regulations.
 In this context, the industrial relations system has to undergo critical changes, especially in
the case of the power and legitimacy of trade unions.
 The critical issue here is to find the balance between the government regulations regarding
industrial relations and the global trend of labour market deregulation while remaining
competitive.
 The organization got the Nobel Peace Prize in 1969, for its efforts to improve peace amongst
the classes, and for promoting justice and fair work for the workers.
Keywords
 Industrial Relations - refers to all types of relations between employers and workers, be they
at national, regional or company level; and to all dealings with social and economic issues,
such as wage setting, working time and working conditions.
 Free Trade Area - A free-trade area is the region encompassing a trade bloc whose member
countries have signed a free trade agreement.
 Customs Union – A customs union is generally defined as a type of trade bloc which is
composed of a free trade area with a common external tariff.
 Common Market - A Common Market is an agreement between two or more countries
removing all trade barriers between themselves, establishing common tariff and non-tariff
barriers for importers, and also allowing for the free movement of labour, capital and
services between themselves.

Notes
Self Assessment
1. International industrial relations deals with the complex relationships among
employers employing foreign national
A. True
B. False
2. All barriers to the trade of goods and services among member countries are removed
in _________.
A. Free Trade Area
B. Customs Union
C. Common Market
D. Economic Union
3. __________ Eliminates trade barriers between member countries and adopts a common
external trade policy.
A. Free Trade Area
B. Customs Union
C. Common Market
D. Economic Union
4. ___________ Has no barriers to trade between member countries, includes a common

external trade policy, and allows factors of production to move freely between
members.
A. Free Trade Area
B. Customs Union
C. Common Market
D. Economic Union
5. _________ Involves free flow of products and factors of production between member
countries and adoption of a common external trade policy.
A. Free Trade Area

B. Customs Union
C. Common Market
D. Economic Union
6. Social dumping is a practice of __________ to use cheap labour than is usually available
at their site of production or sale.
A. Employee
B. Employer
C. Public
D. Government
7. Regional Integration refers to agreements among countries in a geographic region to

reduce and ultimately remove tariff and non-tariff barriers to the free flow of goods,
services and factors of production between each other.

Notes
A. True
B. False
8. There are ______ ITSs who help the exchange of information.

A. 12
B. 13
C. 14
D. 15
9. Which of the following is NOT Reason of limited success of ITSs:

A. Generally good wages and working conditions offered by multinationals.
B. Low resistance from multinational firm management.
C. Conflicts within the labour movement.
D. Differing laws and customs in the industrial relations field.
10. NAFTA is an example of _______.

A. Free Trade Area
B. Customs Union
C. Common Market
D. Economic Union
11. What is an International Business?

A. Trade between countries
B. Trade between regions
C. Trade between states
D. Trade between provinces
12. International Industrial Relations (IIR) handles the complicated associations between
employers employing foreign nationals, employees of various nationalities, home and
host country governing bodies and trade unions of the organizations functioning in
different nations around the world in addition to their national & international
federations.
A. True
B. False
13. Abolition of _____ Labour principle should be respected by all nations:

A. Forced
B. Unforced
C. Wilful
D. Competent
14. Trade unions have lobbied for restrictive national legislation in the USA and Europe
for preventing the export of jobs by the multinational to other locations.
A. True

Notes
B. False
15. In Political union, central political apparatus coordinates the economic, social, and
foreign policy of the member states.
A. True
B. False

l. A 2. A 3. B 4. C 5. D
6. B 7. A 8. D 9. B 10. A
11. A 12. A 13. A 14. A 15. A
Review Questions
1. What do you understand by International Industrial relations?
2. Elaborate key issues in International Industrial Relations.
3. Explain the responses of Trade Union to Multinational.
4. Explain the responses of Trade Union to Regional Integration.
5. Explain the responses of Trade Union to Social Dumping.
Further Readings

Notes
Unit 20: Emerging Trends in Industrial Relations


CONTENTS
Objectives
Introduction
20.1 Labour Laws
20.2 Migration of Workforce and Industrial Relations
20.3 The Code on Social Security, 2020
20.4 Occupational Safety, Health and Working Conditions Code 2020
Summary
Keywords
Self Assessment
Review Questions
Further Readings
Objectives
 Understand the labour laws implications for MNC

 Become aware about the Occupational Safety, Health and Working Conditions Code 2020.
 Get awareness about significant changes in 2020 bills as compared to 2019 bills.
 Get insight to Migration of Workforce and industrial Relations.
Introduction
Recent trends in industrial relations have the potential to be life-changing, both for employees and
for businesses. As baby boomers retire, up-and-coming managers and new hires want and expect
something different from their work than what previous generations experienced. Instead of reacting
reluctantly and slowly to the changing workforce, employers who vigorously embrace the changes
and promote them to employees will reap the benefits these trends can bring to company culture and
bottom-line profits.
20.1 Labour Laws

 The earliest labor laws in India were framed in the late 1940s to safeguard the interest of
workers across various sectors and industries.
 With the evolution of industries and their working environment, the laws were reformed in
tandem to generate more employment and ease the environment for conducting business.
 For the past 18-20 years, the reformation of the multiple labor laws into a unified set of codes
had only been a matter of discussion basis the reports submitted by the National
Commission of Labor.
Factors responsible for reforms in Labour Laws

Social equity, social security, and ease of doing business are policy objectives driving these reforms.

Notes
Reformation of Laws
• 29 laws reformed and being clubbed into 4 key codes is indeed a revolutionary step in
India’s journey of labor laws, and perhaps a progressive step for India Inc.
• Labor laws are one of the most complex and hotly debated issues in India.
• A labor surplus economy, such as India, should be protective of its workers but laws solely
guided by this principle makes it difficult for businesses to operate.
• This hinders expansion of the business causing limited employment opportunities,
effectively making both parties, i.e., employer and employee worse off.
• In India, labor is a subject of the concurrent list and hence has both central and state
governed laws.
• The earlier labor laws were archaic and in need of serious update that the new labor
legislation by Centre has provided.
1.Based on the size of firms
• As most of the earlier central labor laws were based on the size of firms, they created a
perverse incentive structure wherein firms preferred to remain small.
For instance, the Industrial Disputes Act (IDA), 1947 (Chapter VB)
 Mandated firms with more than 100 employees to get permission from the Government
before retrenchment of employees, while firms with less than 100 employees were exempted
from the need to get this permission.
 Given the transaction costs inherent in complying with such regulations, naturally a large
majority of firms preferred to stay below the threshold of 100 employees.
For Example: The Factories Act

• Similarly, firms avoided coming under the Factories Act by keeping their number of
workers below 20 (10 without power).
• Economic Survey 2018-19 mentions that dwarfs (i.e., firms that are both small and older than
10 years), dominate the Indian economy, holding back job creation and productivity.
• While dwarfs account for half of all the firms in organized manufacturing by number, their
share in employment is only 14.1 percent and slightly less than 8 percent in Net Value
Added.
• Small size of firms means that the firms cannot take advantage from economies of scale,
which is key to competitive markets such as export ..
2. Segmentation of labour market
• Another outcome of such threshold was the segmentation of labor market between formal
and informal.
• Because producers tend to own small sized firms, a large part of workforce remained
outside the formal employment system.
• It is pertinent to note that the basic purpose of labor regulation is to provide social security
to employees, however in the earlier regime most labor laws protected workers in the
minority formal sector having relatively stronger bargaining power while leaving out
workers in the informal sector.
• Moreover, gig and platform workers were not covered under any of the earlier labour laws.
Changes and Impact

• The four Labor Codes provide greater autonomy to the employers.
1.

Notes
• The threshold for firm size applicable under most acts has been revised up which will
encourage firms to grow bigger.
• For instance, the threshold for requiring prior government approval for retrenchment and
layoffs has been increased from 100 to 300 workers.
2.
• Definitions like that of a factory has been revised upward to 20 workers (from 10) for
premises where the manufacturing process is carried out using power, and 40 workers (from
20) for premises where it is carried out without using power.
3.
• For contract workers, Code will apply to establishments or contractors employing 50 or
more workers (on any day in the last one year), up from 20 in the previous regime.
4.
• The new labor laws also include the gig economy and platform workers along with
aggregators such as ride sharing services, food and grocery delivery services, content &
media services, and e-marketplaces.
5.
• The scope of Employees Provident Fund Organization (EPFO) has also been widened and
now all institutions which have 20 or more workers will be covered.
20.2 Migration of Workforce and Industrial Relations

Migrant workers contribute to growth and development in their countries of destination, while
countries of origin greatly benefit from their remittances and the skills acquired during their
migration experience. Yet, the migration process implies complex challenges in terms of governance,
migrant workers' protection, migration and development linkages, and international cooperation.
The ILO works to forge policies to maximize the benefits of labour migration for all those involved.
A migrant worker is a person who migrates within a home country or outside it to pursue work.
Migrant workers usually do not have the intention to stay permanently in the country or region in
which they work.
In Ghana, a migrant hawker carries colorful textiles on his head for sale

Notes
Migrant workers who work outside their home country are also called foreign workers. They may
also be called expatriates or guest workers, especially when they have been sent for or invited to
work in the host country before leaving the home country.
The International Labour Organization estimated in 2019 that there were 169 million international
migrants worldwide.[1] Some countries have millions of migrant workers. Some migrant workers
are undocumented immigrants or slaves.
20.3 The Code on Social Security, 2020

The entire code on social security, 2020 can be viewed from website –
https://www.indiacode.nic.in/handle/123456789/16823?view_type=search&sam_handle=1234567
89/1362
It has a total of 164 sections which are listed in the following series:
Section 1. Short title extent, commencement and application.
Section 2. Definitions.
Section 3. Registration and cancellation of an establishment.
Section 4. Constitution of Board of Trustees of Employees’ Provident Fund.
Section 5. Constitution of Employees’ State Insurance Corporation.
Section 6. National Social Security Board and State Unorganised Workers’ Board.
Section 7. Constitution of State Building Workers’ Welfare Boards.
Section 8. Disqualification and removal of a member of any Social Security Organisation.
Section 9. Procedure for transaction of business of Social Security Organisation, etc.
Section 10. Executive Heads of Central Board and Corporation.
Section 11. Supersession of Corporation, Central Board, National Social Security Board or State
Unorganised Workers’ Board or the Building Workers’ Welfare Board.
Section 12. State Board, Regional Boards, local committees, etc.
Section 13. Entrustment of additional functions to Social Security Organisations.
Section 14. Appointment of officers of Central Board.
Section 15. Schemes.
Section 16. Funds.
Section 17. Contribution in respect of employees and contractors.
Section 18. Fund to be recognised under Act 43 of 1961.
Section 19. Priority of payment of contributions over other debts.
Section 20. Chapter not to apply to certain establishments.
Section 21. Authorising certain employers to maintain provident fund accounts.
Section 22. Transfer of accounts.
Section 23. Appeal to Tribunal.
Section 24. Principal Officers and other staff.
Section 25. Employees’ State Insurance Fund.
Section 26. Purposes for which Employees’ State Insurance Fund may be expended.
Section 27. Holding of property, etc.
Section 28. All employees to be insured.
Section 29. Contributions.

Notes
Section 30. Administrative expenses.

Section 31. Provisions as to payment of contributions by employer, etc.
Section 32. Benefits.
Section 33. Corporation’s power to promote measures for health, etc., of Insured Persons.
Section 34. Presumption as to accident arising in course of employment.
Section 35. Accidents happening while acting in breach of law, etc.
Section 36. Occupational disease.
Section 37. References to medical board.
Section 38. Dependants’ benefit.
Section 39. Medical benefit.
Section 40. Provision of medical treatment by State Government or by Corporation.
Section 41. General provisions as to benefits.
Section 42. Corporation’s rights when an employer fails to register, etc.
Section 43. Liability of owner or occupier of factories, etc, for excessive sickness benefit.
Section 44. Scheme for other beneficiaries.
Section 45. Scheme for unorganised workers, gig workers and platform workers.
Section 46. Exemption of factories or other establishments belonging to Government or any local
authority.
Section 47. Contributions, etc., due to corporation to have priority over other debts.
Section 48. Constitution of Employees Insurance Court.
Section 49. Matters to be decided by Employees Insurance court.
Section 50. Powers of Employees Insurance court.
Section 51. Proceedings of Employees Insurance courts.
Section 52. Appeal to High Court.
Section 53. Payment of gratuity.
Section 54. Continuous service.
Section 55. Nomination.
Section 56. Determination of amount of gratuity.
Section 57. Compulsory Insurance.
Section 58. Competent authority.
Section 59. Employment of, or work by, women prohibited during certain period.
Section 60. Right to payment of maternity benefit.
Section 61. Continuance of payment of maternity benefit in certain cases.
Section 62. Notice of claim for maternity benefit and payment thereof.
Section 63. Payment of maternity benefit in case of death of a woman.
Section 64. Payment of medical bonus.
Section 65. Leave for miscarriage, etc.
Section 66. Nursing breaks.
Section 67. Creche facility.
Section 68. Dismissal for absence during pregnancy.
Section 69. No deduction of wages in certain cases.

Notes
Section 70. Forfeiture of maternity benefit.

Section 71. Duties of employer.
Section 72. Power of Inspector-cum-facilitator to direct payments to be made.
Section 73. Reports of fatal accidents and serious bodily injuries.
Section 74. Employer’s liability for compensation.
Section 75. Compensation in case of death of or injury in plantation.
Section 76. Amount of compensation.
Section 77. Compensation to be paid when due and damages for default.
Section 78. Method of calculating monthly wages for purposes of compensation.
Section 79. Review.
Section 80. Commutation of half-monthly payments.
Section 81. Distribution of compensation.
Section 82. Notice and claim.
Section 83. Special provisions relating to accidents occurring outside Indian Territory.
Section 84. Medical examination.
Section 85. Contracting.
Section 86. Remedies of employer against stranger.
Section 87. Insolvency of employer.
Section 88. Power to require from employers statements regarding fatal accidents.
Section 89. Registration of agreements.
Section 90. Reference to competent authority.
Section 91. Appointment of competent authority.
Section 92. Venue of proceedings and transfer.
Section 93. Form of application.
Section 94. Power of competent authority to require further deposit in cases of fatal accident.
Section 95. Powers and procedure of competent authority.
Section 96. Appearance of parties.
Section 97. Method of recording evidence.
Section 98. Power to submit cases.
Section 99. Appeal against order of competent authority.
Section 100. Levy and collection of cess.
Section 101. Interest payable on delay in payment of cess.
Section 102. Power to exempt from cess.
Section 103. Self-assessment of cess.
Section 104. Penalty for non-payment of cess within the specified time.
Section 105. Appeal to appellate authority.
Section 106. Registration of building workers as beneficiaries.
Section 107. Cessation as a beneficiary.
Section 108. Building and other construction worker’s welfare Fund and its applications.
Section 109. Framing of schemes for unorganised workers.

Notes
Section 110. Funding of state government schemes.

Section 111. Record keeping.
Section 112. Helpline, facilitation centre, etc., for unorganised workers, gig workers and platform
workers.
Section 113. Registration of unorganised workers, gig workers and platform workers.
Section 114. Schemes for gig workers and platform workers.
Section 115. Accounts.
Section 116. Audit.
Section 117. Budget estimates.
Section 118. Annual report.
Section 119. Valuation of assets and liabilities.
Section 120. Holding of property, etc., by social security organisation.
Section 121. Writing off of losses.
Section 122. Appointment of Inspector-cum-Facilitators and their powers.
Section 123. Maintenance of records, registers, returns, etc.
Section 124. Employer not to reduce wages, etc.
Section 125. Assessment and determination of dues from employer.
Section 126. Appeal against order of Authorised officer relating to chapter IV.
Section 127. Interest on amount due.
Section 128. Power to recover damages.
Section 129. Recovery of amount due.
Section 130. Validity of certificate and amendment thereof.
Section 131. Other modes of recovery.
Section 132. Application of certain provisions of Income-tax act.
Section 133. Penalty for failure to pay contributions, etc.
Section 134. Enhanced punishment in certain cases after previous conviction.
Section 135. Offences by companies.
Section 136. Cognizance of offences.
Section 137. Prior opportunity before prosecution.
Section 138. Compounding of offences.
Section 139. Reporting of vacancies to career centres.
Section 140. Exclusions from application of this chapter.
Section 141. Social Security Fund.
Section 142. Application of Aadhaar.
Section 143. Power to exempt establishment.
Section 144. Power to defer or reduce.
Section 145. Liability in case of transfer of establishment.
Section 146. Members, officers and staff to be public servants.
Section 147. Protection of action taken in good faith.
Section 148. Misuse of benefits.

Notes
Section 149. Power of central Government to give directions to state government and social security
organizations.
Section 150. Power to frame schemes.
Section 151. Protection against attachment, etc.
Section 152. Power to amend schedule.
Section 153. Transitional provisions.
Section 154. Power of appropriate Government to make rules.
Section 155. Power of central Government to make rules.
Section 156. Power of state Government to make rules.
Section 157. Power of corporation to make regulations.
Section 158. Prior publication of rules, regulations, etc.
Section 159. Rules to give effect to arrangements with other countries for the transfer of money paid
as compensation.
Section 160. Laying of rules, regulations and schemes, etc.
Section 161. Effect of laws and agreements inconsistent with this code.
Section 162. Delegation of powers.
Section 163. Power to remove difficulties.
Section 164. Repeal and savings.
20.4 Occupational Safety, Health and Working Conditions Code 2020

Evolution: Occupational Safety & Health
• The first Factory Act ever passed by the British Parliament was called "The Factory Health
and Morals Act, 1802”, highlighting the need for Workers’ Safety.
• The first Indian Factories Act, was enacted in 1881.
The Occupational Safety, Health and Working Conditions Code, 2020
Background
• Labor falls under the Concurrent List of the Constitution.
• Therefore, both Parliament and state legislatures can make laws regulating labor.
• The central government has stated that there are over 100 state and 40 central laws
regulating various aspects of labor such as resolution of industrial disputes, working
conditions, social security and wages.
• The Second National Commission on Labour (2002) found existing legislation to be
complex, with archaic provisions and inconsistent definitions.
• To improve ease of compliance and ensure uniformity in labor laws, it recommended the
consolidation of central labor laws into broader groups such as:

Notes
• (i) industrial relations, (ii) wages, (iii) social security, (iv) safety, and (v) welfare and working
conditions.
Significant changes in 2020 bills as compared to 2019 bills
PART A: Comparison of key provisions of the 2019 Bills and 2020 Bills
• 1 Common Changes across the 2020 Labour Codes
• 2 Code on Industrial Relations, 2020
• 3 Code on Social Security, 2020
• 4 Code on Occupational Safety, Health and Working Conditions, 2020
I. Exemption:
• The 2019 Bill permitted the appropriate government to exempt any establishment or class
of establishment from any provisions of the Code.
• The 2020 Bill empowers the state government to exempt any new factory from the
provisions of the Code in order to create more economic activity and employment.
II. Threshold for coverage of establishments:

1. Factory:
• The 2019 Bill defined a factory as any premises where manufacturing process is carried out
and it employs more than:
(i) 10 workers, if the process is carried out using power, or

(ii) 20 workers, if it is carried out without using power.
• This was same as the Factories Act, 1948, which is being subsumed by the Bill.
• The 2020 Code increases the threshold to:
(i) 20 workers for premises where the manufacturing process is carried out using power,
and
(ii) 40 workers for premises where it is carried out without using power.
• The 2019 Bill excluded mines from the definition of a factory.
• The 2020 Bill removes this provision.
2. Establishments engaged in hazardous activity:
• The 2019 Bill defines an establishment as a place where any business, trade, or occupation
is carried out with 10 or more workers.
• The 2020 Bill includes all establishments where any hazardous activity is carried out
regardless of the number of workers.
3. Contract workers:
• The 2019 Bill applied to establishments or contractors employing 20 or more contract
workers (on any day in the last one year).
• It also allowed the appropriate government to notify a lower threshold for this purpose.
• The 2020 Bill replaces this provision.
• It specifies that the Code will apply to establishments or contractors employing 50 or more
workers (on any day in the last one year).
4.Prohibits Contract Workers:
The 2019 Bill empowered the government to prohibit employment of contract labor in some cases
including where:
(i) the work is of a perennial nature, or
(ii) the work performed by contract workers is necessary for the business carried out by the
establishment, or

Notes
(iii) the same work is carried out by regular workmen in the establishment.
The 2020 Bill instead prohibits contract labor in core activities, except where:
(i) the normal functioning of the establishment is such that the activity is ordinarily done
through contractor,
(ii) the activities are such that they do not require full time workers for the major portion of the
day, or
(iii) there is a sudden increase in the volume work in the core activity which needs to be
completed in a specified time.
5.Core activity or Non-Core activity:
(i) The appropriate government will decide whether an activity of the establishment is a
core activity or not. However, the Bill defines a list of non-core activities where the
prohibition would not apply.
This includes a list of 11 works including:
(i) sanitation workers,
(ii) security services, and
(iii) any activity of intermittent nature even if that constitutes a core activity of an
establishment.
6. The Bill allows the appropriate government to exempt contractors from the provisions of the Bill
in case of an emergency, subject to such conditions as may be notified.
7. The 2019 Bill provided that it will not be applicable to the offices of the central and state
governments.
The 2020 Bill clarifies that the Code will apply to contract labour engaged through a contractor in the
offices of the central and state governments (where the respective government is the principal
employer).
8. Building or other construction work:
• Under the 2019 Bill, construction works employing 10 or more workers were considered as
building or other construction works.
• The 2020 Bill removes this condition.
III. Work hours and employment conditions

1. Daily work hour limit:
• The 2019 Bill allowed the appropriate government to notify the maximum daily work hours
for workers.
• The 2020 Bill fixes the maximum limit at eight hours per day.
2. Employment of women:
• The 2019 Bill allowed the appropriate government to prohibit employment of women for
undertaking dangerous operations.
• The 2020 Bill provides that women will be entitled to be employed in all establishments for
all types of work under the Bill. It also provides that in case they are required to work in
hazardous or dangerous operations, the government may require the employer to provide
adequate safeguards prior to their employment.
IV. Inter-state migrant workers and unorganized workers

1. Definition
The 2019 Bill defined inter-state migrant worker as a person who: (i) has been recruited by an
employer or contractor for working in another state, and (ii) draws wages within the maximum
amount notified by the central government.
The 2020 Bill adds that any person who moves on his own to another state and obtains employment
there will also be considered an inter-state migrant worker.

Notes
The 2020 Bill also specifies that only those persons will be considered as inter-state migrants who
are earning a maximum of Rs 18,000 per month, or such higher amount which the central government
may notify.
2. Benefits for inter-state migrant workers:
The 2020 Bill provides for certain benefits for inter-state migrant workers.
These include:
(i) option to avail the benefits of the public distribution system either in the native state or the
state of employment,
(ii) availability of benefits available under the building and other construction cess fund in the
state of employment, and
(iii) insurance and provident fund benefits available to other workers in the same establishment.
3. Displacement allowance:
• The 2019 Bill required contractors to pay a displacement allowance to inter-state migrant
workers at the time of their recruitment, which was equivalent to 50% of the monthly wages.
• The 2020 Bill removes this provision.
4. Database for inter-state migrant workers:
• The 2020 Bill requires the central and state governments to maintain or record the details of
inter-state migrant workers in a portal.
• An inter-state migrant worker can register himself on the portal on the basis of self-
declaration and Aadhaar.
5. Social Security Fund:
• The 2020 Bill provides for the establishment of a Social Security Fund for the welfare of
unorganized workers.
• The amount collected from certain penalties under the Code (including the amount collected
through compounding) will be credited to the Fund.
• The government may prescribe other sources as well for transferring money to the Fund.
PART B: Issues to consider

1 Some common issues across the three Labor Bills
2 Key Issues in the Industrial Relations Code, 2020
3 Key Issues in the Code on Social Security, 2020
4 Key Issues in the Code on Occupational Safety, Health and Working Conditions, 2020
1. Rationale for some special provisions unclear

 The 2020 Bill replaces 13 laws regulating health, safety and working conditions of workers.
 The National Commission on Labor (2002) recommended consolidation and simplification
of these laws.
 Further, the Statement of Objects and Reasons of the Bill states that it seeks to simplify and
amalgamate the provisions of the 13 Acts.
 While the Bill consolidates existing Acts, it falls short of simplifying their provisions.
For Example
• The Bill contains general provisions which apply to all establishments.
• These include provisions on registration, filing of returns, and duties of employers.
• However, it also includes additional provisions that apply to specific type of workers such
as those in factories and mines, or as audio-visual workers, journalists, sales promotion
employees, contract labor and construction workers.

Notes
Adding
• It may be argued that special provisions on health and safety are required for certain
categories of hazard-prone establishments such as factories and mines.
• It may be necessary to allow only licensed establishments to operate factories and mines.
• Similarly, special provisions may be required for specific categories of vulnerable workers
such as contract labor and migrant workers.
• However, the rationale for mandating special provisions for other workers is not clear.
For Example
• The Bill requires that any person suffering from deafness or giddiness may not be employed
in construction activity which involve a risk of accident.
• The question is why such a general safety requirement is not provided for all workers.
• Similarly, the Bill provides for registration of employment contracts for audio-visual
workers, raising the question of why there is a special treatment for this category.
Summary
 The earliest labor laws in India were framed in the late 1940s to safeguard the interest of workers
across various sectors and industries.
 With the evolution of industries and their working environment, the laws were reformed in
tandem to generate more employment and ease the environment for conducting business.
 For the past 18-20 years, the reformation of the multiple labor laws into a unified set of codes
had only been a matter of discussion basis the reports submitted by the National Commission
of Labor.
Keywords
 Migration - to move into or come to live in a region or community especially as part of a large-
scale and continuing movement of population compare out-migrate.
 Industrial Relations - Industrial relations or employment relations is the multidisciplinary
academic field that studies the employment relationship; that is, the complex interrelations
between employers and employees, labor/trade unions, employer organizations, and the state.
 Security - Work security is about working conditions that are safe and promote workers well-
being.
 Labour Laws - Labour laws are those that mediate the relationship between workers, employing
entities, trade unions, and the government. Collective labour law relates to the tripartite
relationship between employee, employer, and union. Individual labour law concerns
employees' rights at work also through the contract for work.
Self Assessment
1. Information regarding Continuance of payment of maternity benefit in certain cases is
contained in ____ section.
A. 61
B. 62
C. 63
D. 64

Notes
2. Information regarding Notice of claim for maternity benefit and payment thereof is contained
in ____ section.
A. 61
B. 62
C. 63
D. 64
3. Information regarding Payment of maternity benefit in case of death of a woman is contained

in ____ section.
A. 61
B. 62
C. 63
D. 64
4. Information regarding Payment of medical bonus is contained in ____ section.
A. 61
B. 62
C. 63
D. 64
5. Information regarding Leave for miscarriage, etc is contained in ____ section.
A. 65
B. 66
C. 67
D. 68
6. Information regarding Nursing breaks is contained in ____ section.
A. 65
B. 66
C. 67
D. 68
7. Information regarding Creche facility is contained in ____ section.
A. 65
B. 66
C. 67
D. 68
8. Information regarding Dismissal for absence during pregnancy is contained in ____ section.
A. 65
B. 66
C. 67
D. 68

Notes
9. Information regarding No deduction of wages in certain cases is contained in ____ section.
A. 69
B. 70
C. 71
D. 72
10. Information regarding Forfeiture of maternity benefit is contained in ____ section.
A. 69
B. 70
C. 71
D. 72
11. Information regarding Duties of employer is contained in ____ section.
A. 69
B. 70
C. 71
D. 72
12. Information regarding Power of Inspector-cum-facilitator to direct payments to be made is

contained in ____ section.
A. 69
B. 70
C. 71
D. 72
13. Information regarding Reports of fatal accidents and serious bodily injuries is contained in
____ section.
A. 73
B. 74
C. 75
D. 76
14. Information regarding Employer’s liability for compensation is contained in ____ section.
A. 73
B. 74
C. 75
D. 76
15. Information regarding Compensation in case of death of or injury in plantation is contained

in ____ section.
A. 73
B. 74
C. 75
D. 76

Notes

l. A 2. B 3. C 4. D 5. A
6. B 7. C 8. D 9. A 10. B
11. C 12. D 13. A 14. B 15. C
Review Questions
1. What do you understand by labour laws implications for MNC?
2. What do you know about Occupational Safety, Health and Working Conditions Code 2020?
3. Describe significant changes in 2020 bills as compared to 2019 bills.
4. Discuss Migration of Workforce and industrial Relations.
Further Readings
4. Mamoria C.B., Dynamics of Industrial Relation in India

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Industrial Relation and Labour Laws

Author’s Name: Dr. Shikha Goyal

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Unit 1: Introduction to Industrial Relations 1

Unit 01: Introduction to Industrial Relations

 Understand the historical overview of industrial relations in India.

1.1 Concept of Industrial Relation

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Definition of Industrial Relation

1.2 Objectives of Industrial Relation

i. Employer to individual employee relationships:

ii. Management relations with trade union or group of workers:

iii. Industrial peace and productivity:

1.3 Evolution of Industrial Relation

A. Pre-Independence Phase of Industrial Relation:

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C. Industrial Relation in the post globalization era:

1.4 Scope of Industrial Relation

Did you know?

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Answer: Passive regulator

1.5 Model of Industrial Relations

1. Dunlop Model of Industrial Relation

I. Dunlop's System Model

Elements of Industrial Relations

Significant aspects of the environment are

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ii. Market and Economic Context-

iii. Political Context-

Main focus of Dunlop Model

II. IILS Model

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III. Craigs Model /Industrial Relations System Model

a) Natural systems interact with their environments in a dynamic fashion—through feedback

b) Actors and Internal Inputs

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 Committees that handle broader issues

 Employer outcomes, such as the rights and responsibilities of management in the

1.6 Approaches to Industrial Relations

 Economist: An economist tries to interpret industrial conflict in terms of impersonal markets

Did you know?

 These views add to intellectual dimension in Industrial Relation context.

Different approaches to Industrial Relations:

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What has been done in a test?

What is the output of the test?

Conclusion after the test

II. Sociological Approach to Industrial Relations:

III. Human relations approach:

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IV. Socio-ethical approach:

How good industrial relations can be maintained?

IV. Gandhian approach:

 The workers or labors can go on a strike only if there is a specific grievance.

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2. Which cannot be considered as the problem faced by Indian Labors?