Module - 2

Industrial Disputes Act of 1947

Introduction
• Industrial Disputes Act, 1947 is the Act that regulates the labour laws as it
concerns all the workmen or all the people employed on the Indian mainland. It
came into force on 1 April 1947.
• The capitalists or the employer and the workers always had a difference of
opinion and thus, it leads to lots of conflicts among and within both of these
groups. So, these issues lead to enactment of this Act.
• According to Sec. 2 of the Industrial Dispute Act, 1947, “Industrial dispute
means any dispute or difference between employers and employers or between
employers and workmen or between workmen and workmen, which is
connected with the employment or non-employment or the terms of
employment or with the conditions of labour of any person”.

Objectives of the Industrial Disputes Act

• The act was drafted to make provision for the investigation and settlement of
industrial disputes and to secure industrial peace and harmony by providing
mechanisms and procedures for the investigation and settlement of industrial
disputes by conciliation, arbitration and adjudication which is provided under
the statute.
• The Industrial Dispute Act also lays down:
1. The provision for payment of compensation to the workman on account
of closure or layoff or retrenchment.
2. The procedure for prior permission of the appropriate Government for
laying off or retrenching the workers or closing down industrial
establishments
3. The actions to be taken against unfair labour practices on the part of an
employer, a trade union or workers.
Authorities under the Act
The Act establishes several authorities to facilitate the resolution of industrial
disputes.
1. Conciliation - Conciliation is a voluntary process aimed at resolving industrial
disputes through negotiations facilitated by a neutral third party known as a
conciliation officer. The Act empowers the appropriate government to appoint
conciliation officers who are responsible for mediating between the parties
involved in an industrial dispute and facilitating a mutually acceptable
 settlement. The conciliation officer convenes meetings, listens to the grievances
and demands of both parties, and tries to find common ground for resolution.
2. Arbitration - Arbitration is a method of resolving disputes through an
impartial arbitrator or panel of arbitrators. The appropriate government
appoints one or more arbitrators, depending on the nature and complexity of
the dispute. The arbitrator conduct hearings where both parties present their
arguments, evidence, and witnesses. The arbitrator(s) examine the evidence,
consider the legal provisions, and issue an award based on their findings.
3. Adjudication - Adjudication refers to the resolution of industrial disputes
through judicial proceedings before labour courts, industrial tribunals, or
national tribunals. The Act establishes various adjudicatory bodies with specific
jurisdiction to adjudicate industrial disputes based on factors such as the nature
of the dispute, the industry involved, and the location. After considering the
evidence and legal provisions, the adjudicatory body issues an award. The
award is binding on the parties and is enforceable as if it were a decree of a
civil court.
Strike And Lock-Out Under Industrial Dispute Act 1947
Strike is a very powerful weapon used by trade unions and other labor associations to
get their demands accepted. 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.
Strike:-
According to Industrial Disputes Act 1947, "a strike is "a cessation of work by a body
of persons employed in an industry acting in combination; or a concerted refusal of
any number of persons who are or have been so employed to continue to work or to
accept employment; or a refusal under a common understanding of any number of
such persons to continue to work or to accept employment".
Causes of strikes:
Strikes can occur because of the following reasons:
• Dissatisfaction with company policy
• Salary and incentive problems
• Increment not up to the mark
• Wrongful discharge or dismissal of workmen
• Withdrawal of any concession or privilege
• Hours of work and rest intervals
• Leaves with wages and holidays
• Bonus, profit sharing, Provident fund and gratuity
Lock out :-
According to [section 2(1)] of Industrial Disputes Act 1947, 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. It is a
weapon of the employer while strike is a weapon in the hands of workers. Just as the
strike is a weapon in the hands of the workers for enforcing their demands, lockout is
a weapon available to the employer to make their employees come to their way and
accept the management's terms and conditions.
The Reasons Behind the Lockouts
• Disputes or clashes in between workers and the management.
• Unrest disputes or clashes in between workers and workers.
• Illegal strikes, regular strikes or continuous strikes by workers may lead to
lockout of factory or industry.
• External environmental disturbance due to unstable governments may lead to
lockouts of factories or industries.
• Continuous or accumulated financial losses of factory or industry may lead to
opt lockout by the management.
• Maybe lockout if any company involves in any fraudulent or illegal activities.
• Failure in maintaining proper industrial relations, industrial peace, and
harmony.
• Lockout of the factory is regarded as a major issue which affects both
management of the factory and their employees. Management should always
monitor employee's behaviour and relationship between employees and
relationship in between management and employees to avoid disputes which
leads to lockouts.
Penalty for illegal strikes and lock-outs.
• Any workman who commences continues or otherwise acts in furtherance of, a
strike which is illegal under this Act, shall be punishable with imprisonment for
a term which may extend to one month, or with fine which may extend to fifty
rupees, or with both.

• Any employer who commences continues, or otherwise acts in furtherance of a

lock-out which is illegal under this Act, shall be punishable with imprisonment
for a term which may extend to one month, or with fine which may extend to
one thousand rupees, or with both.
Strikes Prevalence in India
Case Study - The Toyota Problem
• In January 2006, Toyota Kirloskar Motor Private Limited (TKM) faced a labor
dispute at its manufacturing plant in Bidadi, India. The Toyota Kirloskar Motor
Employees Union (Employee Union) went on strike, demanding the
 reinstatement of dismissed employees and improved working conditions. TKM
responded by declaring a lockout, claiming that the strike was illegal and
accusing the workers of violence and destruction.
• The Employee Union argued that the dismissed employees were targeted for
their union activities and cited inhumane working conditions. Attempts to
resolve the dispute through a meeting with the Labor Commissioner failed.
• After a period of lockout, TKM lifted the lockout but required workers to sign a
good conduct undertaking. The Employee Union withdrew the strike but
refused to sign the undertaking.
• This case study reflects a growing trend of trade union activism resulting in
violence and business losses.

The Industrial Employment (Standing Orders) Act, 1946

The Industrial Employment Standing Orders Act, 1946 is an act of the Parliament of
India that provides a framework for regulating conditions of employment in certain
industries. It was enacted as a part of the post-independence labour reform efforts.
A standing order is a rule made by an employer establishing a system or method of
working or regulating any aspect of employment in an industrial establishment. The
standards ensure that employees have access to safe working conditions, social
security benefits, education facilities etc.
Objective of Standing Order Act
1. The first objective states that the act is to provide regular standing orders for
factories, workers and the main professional or working relationship.
2. The second aim is to ensure that all employees recognize their employment
terms and conditions they are expected to follow or adhere to.
3. The third objective states that it also supports the promotion of industrial peace
and harmony by supporting fair industrial practices.
4. The main objective of the Industrial Employment Standing Orders Act is to ensure
that there is no exploitation of workers by their employers or vice versa.
Applicability
The Act applies to industrial establishments employing 100 or more workers.
However, the appropriate government (central or state) has the power to extend the
provisions of the Act to establishments employing less than 100 workers.
Features
• The Industrial Employment Standing Orders Act, 1946 regulates working
hours, holidays, wages and other conditions of service for workers employed in
industrial establishments.
 • It applies to all factories, mines and other establishments where 20 or more
workmen are employed or were employed on any day of the preceding twelve
months
• It also provides for a provision of maternity relief and medical relief, and
insurance cover against accidents for all the industrial workers covered by the
Act.
• The Industrial Employment Standing Orders Act, 1946 sought to ensure that all
employees receive benefits such as:
1. A minimum wage for every hour worked
2. Payment of bonus at certain intervals during the year
3. Provision of paid leaves
4. Provision of free conveyance to and from the workplace

Why is the Industrial Employment Standing Orders Act, 1946, vital for the
workers?
• The employment of workers in any industrial establishment should be regulated
by a uniform standard applicable to all establishments throughout the country
• There should be effective machinery for enforcing the observance of this
standard
• Wherever possible, disputes between employers and employees should be
settled by conciliation or arbitration
• The law applies to all factories, mines, oilfields and other industrial
establishments employing 20 or more workers on any day in any one year or
working 26 or more days in any one year
Case Study –
1. Hindustan Lever v Workmen, (1974)

The issue related to the ‘transfer of workmen’ was highlighted by concurring that, the
Manager is vested with the discretion of transfer of workmen amongst different
departments of the same company, so far as the terms of the contract of employment
are not affected. Further, if the transfer is found to be valid, the onus of proving it to
be invalid lies on the workmen in dispute.
2. Management of Continental Construction Ltd. v Workmen of Continental
Construction, (2003)
In the case, the employer’s right to terminate the service of a probationer was
recognised by declaring that, if a person is an employee on probation, it is an inherent
power of the employer to terminate during/ at the end of the probationary period,
provided, that even while acting in accordance with the CSO, the employer’s action be
fair and consistent with the principles of natural justice.
 Labour Laws In India
• Labour law also known as employment law is the body of laws, administrative
rulings, and precedents which address the legal rights of, and restrictions on,
working people and their organizations.

• Generally, labour law covers:

1. Industrial relations – certification of unions, labour-management
relations, collective bargaining and unfair labour practices
2. Workplace health and safety
3. Employment standards, including general holidays, annual leave,
working hours, unfair dismissals, minimum wage, layoff procedures and
severance pay.

• The laws related to labor and employment in India are often referred to as
industrial laws. These laws have a historical connection to the period of British
colonial rule. The labor legislations enacted by the British were primarily
aimed at safeguarding the interests of British employers

• Factories Act 1883 - The British government considered their own economic
interests when shaping these early laws. One such law was the Factories Act.
British textile manufacturers faced tough competition from Indian textile goods
in the export market.

• To make Indian labor more expensive, the Factories Act was introduced in
1883 due to pressure from textile magnates in Manchester and Lancashire. This
law introduced regulations such as an eight-hour workday, the prohibition of
child labor, restrictions on women working at night, and the introduction of
overtime wages for work exceeding eight hours.

• Trade Dispute Act, 1929 - The earliest Indian statute to regulate the
relationship between employer and his workmen was the Trade Dispute Act,
1929 (Act 7 of 1929). Provisions were made in this Act for restraining the
rights of strike and lock out but no machinery was provided to take care of
disputes.

• The Industrial Employment Standing Orders Act, 1946

• Industrial Disputes Act, 1947

 • The Minimum Wages Act 1948 - requires companies to pay the minimum
wage set by the government alongside limiting working weeks to 40 hours (9
hours a day including an hour of break). The Act provides for the fixation of
minimum wages by both the central and state governments. The minimum
wages can be fixed based on various factors, such as the skill level required, the
nature of work, and the prevailing economic conditions.

• Maternity Benefit Act 1961 - The Maternity Benefit Act, 1961 is an important
legislation in India that aims to protect the rights and interests of women
employees during pregnancy and childbirth. The Act provides for maternity
benefits and regulates the employment conditions of women before and after
childbirth. A woman is entitled to a maximum of 26 weeks of maternity leave,
of which up to eight weeks can be taken before the expected date of
delivery. During the period of maternity leave, women employees are entitled
to receive maternity benefit, which is paid at the rate of the average daily wage
for the duration of their absence.

Module – 3
Trade Unions
A trade union or labor union, often simply referred to as a union, is an organization
of workers whose purpose is to maintain or improve the conditions of
their employment, such as attaining better wages and benefits,
improving working conditions, improving safety standards, establishing complaint
procedures, developing rules governing status of employees (rules governing
promotions, just-cause conditions for termination) and protecting and increasing
the bargaining power of workers.
Most trade unions are independent of any employer. However, trade unions try to
develop close working relationships with employers. This can sometimes take the
form of a partnership agreement between the employer and the trade union which
identifies their common interests and objectives.
Objectives
• negotiate agreements with employers on pay and conditions
• discuss major changes to the workplace such as large scale redundancy
• discuss members' concerns with employers
• accompany members in disciplinary and grievance meetings
• provide members with legal and financial advice
• provide education facilities and certain consumer benefits such as discounted
insurance
Functions/Role And Prevalence Of Trade Union
1. Collective Bargaining - Trade unions negotiate with employers on behalf of
workers to determine wages, working conditions, and other employment terms. They
aim to secure better pay, benefits, job security, and improved working conditions for
their members.
2. Representation and Advocacy - Trade unions represent and advocate for the rights
and interests of workers in discussions with employers, government bodies, and other
relevant stakeholders. They strive to ensure that workers’ concerns and viewpoints are
taken into account in decision-making processes.
3. Legal Support - Trade unions provide legal assistance and support to workers
facing issues such as unfair treatment, discrimination, wrongful termination, or any
violation of labor laws. They may offer advice, guidance, and representation in legal
proceedings, aiming to protect workers’ rights.
4. Workplace Health and Safety - Trade unions actively promote and enforce
workplace health and safety regulations. They work to ensure that employers provide
a safe and healthy working environment for employees, address occupational hazards,
and take appropriate measures to prevent accidents and injuries.
5. Unity and Solidarity - Trade unions foster unity and solidarity among workers,
encouraging them to join together and act collectively to address common concerns
and challenges. By promoting a sense of solidarity, unions can enhance the bargaining
power of workers and exert influence on employment practices.
6. Political Engagement - Trade unions engage in political activities to advocate for
workers’ rights and interests at the governmental level. They may lobby for the
introduction or amendment of labor laws, participate in policy-making processes, and
support political candidates who prioritize workers’ issues.
7. Education and Awareness - Trade unions educate their members about labor
rights, employment laws, and regulations, helping them understand their entitlements
and responsibilities. By raising awareness, unions empower workers to assert their
rights and make informed decisions about their employment.
8. Conflict Resolution - Trade unions play a role in resolving workplace conflicts and
disputes between workers and employers. They may offer mediation services,
grievance procedures, or arbitration processes to facilitate resolution and maintain
harmonious labor relations.
Challenges/Problem Faced By Trade Unions In India
1. Leadership - Trade unions in India are often led by politically influenced
individuals with little to no experience in physical work, which hampers their
ability to relate to workers' issues and run the unions honestly.
 2. Financial Troubles - Trade unions struggle with low subscription rates,
irregular contributions, and balancing expenses for staff salaries, office bearers,
and operational costs.
3. Small Size of Union - Despite the increase in the number of unions,
membership is declining, with many unions having small memberships,
making it challenging to have an impact or generate funds for activities.
4. Multiplicity of Unions - Rapid formation of multiple unions leads to political
interference, fights for recognition, and frequent changes in leadership,
weakening the effectiveness of collective bargaining.
5. Intra Union Rivalry - Multiplicity of unions results in rivalry, hindering the
unity of workers and providing leverage to employers to exploit divisions
among unions for their benefit.
6. Politicization - Political influence on unions often leads to fragmentation,
ideological splits, and neglect of primary goals, further exacerbating intra-
union conflicts.
7. Illiteracy - Illiteracy among workers makes them susceptible to manipulation
by outside leaders, undermining the unity and effectiveness of trade unions.
8. Apathy of Workers and Role of Management - Workers' apathy towards
union activities, coupled with management's opposition, hinders effective
representation and resolution of workers' issues.

Past

• The trade unions genesis stemmed from the necessity of the time, protecting
and securing the interest, presenting the collective demands, grievances of the
industrial worker, from the second half of the nineteenth century, with
establishment of industries.
• Poor working conditions, undue long working hours were the concerns for the
workers.
• Although the Unions formed in the second half of the 19th century, they had
limitations in effectively functioning as trade unions, they nevertheless were
effective social unions, presenting the demands collectively, with an orientation
to reform the ills.
• Development of such trade unions was closely in sync with the development of
the Industry in India.
• In India, the first trade union came up in Bombay, after the establishment of
textile mills in the 1850s.
• Trade unions came up in Calcutta in 1854, with the establishment of Jute Mills.
• Sohrabji Shapuri Bengali and C.P. Mazumdar were the leaders and early
pioneers of the labour unions uprising.
• The first factory Commission set up in 1879 studied the problems of industrial
workers.
 • First trade union under the leadership of Narayan Meghji Lokhande -‘Bombay
Millhands Association’, founded in 1884, without any funds, office bearers.
• In 1891, The Indian factory Act was passed
• Some other Trade unions are Ahmedabad Weavers (1895), Jute Mills, Calcutta
(1896), Bombay Mill workers (1897) Union.
Present
• There is now a legal status for the trade unions in India, rather than being ad-
hoc or strike committees. Now they have succeeded in establishing themselves
as a permanent part of modern civilization. With the support of Central Union
Federations, the unions have established their core values and ideologies while
also giving their members a feeling of purpose.

• The prominence of unions in the labour movement has grown significantly in

recent years. All labour-related issues are now brought to their attention by the
government and businesses alike. Labour unions are also involved in
formulating policies and ideologies at the state and national levels.

• Due to their high prominence, Labour unions are now in a position to influence
public policy and labour laws.

• There has been a steady decline in both union membership and influence of
trade unions in India. There are several reasons for such a decline:
1. There are some employers who are keeping their businesses union-free.
Some are active in their opposition and lookout for legal strategies to
combat unions. Also there are employers who put workers on their
management team by establishing profit-sharing plans to reward
employees.
2. The new additions to the labour force particularly women and white-
collar employees have less loyalty to trade unions.
3. Industrial and manufacturing jobs, long the bastion of union
membership, have declined in recent years. Indian workers are now
more highly educated than ever before and have tended to move towards
white collar jobs not traditionally associated with union membership.
Trade Union Act 1926
The Act was formulated in 1926 called- ‘Indian Trade Union Act’ and enforced from
1st June 1927. The Indian Trade Union Act 1926 was passed to provide for the
registration of trade unions with a view to render lawful association of workers. The
act also defined law relating to registered trade unions and provided certain privileges
and protection to the registered trade unions.
Provision of the Trade-Union Act, 1926:
1. Definition (S-2)
2. Registration of the Trade Union (S-3 to 12)
3. Duties and liabilities of registered Union (S-13 to 16)
4. Rights and liabilities of Register Trade Union (S-17 to 21)
5. Amalgamation and dissolution of Trade Union (S-24 to 27)
6. Submission of return (S-28)
7. Power to make regulate (S-29 to 30)
8. Penalties and Fines (S-31 to 33)

• Registration of Trade Unions - Trade unions are required to register under

this Act to attain legal recognition and enjoy certain privileges and protections.
The registration process involves submitting an application to the appropriate
government authority, along with a copy of the union's constitution and a
statement of its membership.

• Conditions for Registration - To be eligible for registration, a trade union

must fulfill certain conditions, including having a minimum of seven members
who are workers engaged in the same trade, occupation, or industry. The
union's constitution must also comply with the provisions of the Act.

• Rights and Liabilities of Registered Trade Unions - Once registered, a trade

union gains certain rights and privileges, such as the right to sue and be sued in
its own name, the right to own property, and the capacity to enter into
contracts. However, registered unions are also subject to certain liabilities, such
as being held accountable for any illegal actions committed by their office-
bearers or members during trade disputes.

• Prohibition of Certain Acts by Trade Unions - The Act prohibits trade unions
from engaging in certain activities, such as promoting violence, intimidation, or
coercion, or engaging in activities not directly related to the interests of
workers or employers.

• Amalgamation and Dissolution - The Act provides provisions for the

amalgamation of trade unions with the consent of their respective members and
for the dissolution of trade unions under certain circumstances, such as failure
to comply with the Act's provisions.
• Penalties - The Act outlines penalties for various offenses, such as making
false statements in the registration process, obstructing the lawful activities of
registered trade unions, or acting as an officer of an unregistered trade union.