I.

WHETHER THE INDUSTRIAL TRIBUNAL HAS JURISDICTION OVER THE PRESENT

DISPUTE OR NOT?
It is humbly submitted that the Industrial Tribunal has jurisdiction over the present dispute under Sec. 10(1)
(d) of The Industrial Disputes Act, 1947.
In Bangalore Water Supply & Sewerage Board, etc. v. R. Rajappa & ors.1, Hon’ble Supreme Court laid
down a triple test:-(i) Systematic and organized activity, (ii) With the cooperation between Employers and
employees and (iii) For the production and distribution of good and services whether or not capital has been
invested for this activity. If these tests are satisfied prima facie, there is an “industry”. Also, to fall within the
definition of ‘industry’, the government activity must at least be analogous to trade and business and there
must be an element of economic venture in the activity.2
In the present case, HMT Company is a public company which deals with trade and business of
manufacturing and selling iron pipes and poles and qualifies to be called as industry.
An individual dispute becomes an industrial dispute if it is taken up by a union of workmen of the
establishment or substantial manner of workmen who have a direct and substantial interest in the case. 3
Following conditions must exist for an Industrial Dispute: Industry; Relationship of Workmen and
Employer; Connected with non-employment of terms of employment; Related to a workman or any other
person in whom group has a direct and substantial interest; Disputes related to termination of services.
If a dispute is not settled by direct negotiation, conciliation, or voluntary arbitration the Government at its
discretion may refer it to Labour Court, Industrial Tribunal or National tribunal.
In the instant case, the Management and Assistant Labour Commissioner and the General Secretary of the
Union had talks of negotiation and conciliation which has failed as the Management sanctioned the bonus at
the rate of 4 per cent for the year 2014-15, to which workers raised a dispute, which took the form of
demonstrations and later lead to the closure of the company.

In cases where the cause of action arose at the time when the business was being still carried on, it does not
cease to be an ‘industrial dispute’ merely because the subsequently the industry is closed. A reference is not
necessarily bad because at the time when it was made, the industry no longer existed. The power of the State
to make a reference is to be determined with reference not to the date on which it is made but with reference
to the date on which the right, which is the subject matter of the dispute, arises and the machinery provided
under the Act would be available for working out the right which accrued prior to the dissolution of the
business.4
The management’s power to direct its own internal administration and discipline is limited, and when a
dispute arises, the Industrial Tribunals have been given the power to see whether the termination of service
of workman is justified and to give appropriate relief.5

1
1978 SCR (3) 207
2
State of Punjab v. Diljit Singh and anr., 1986-68 FJR 310 Pun. & Har.
3
Workmen v. Shri Ganga Vilas Motors Ltd., 1967 LLJ 12(SC)
4
Pipraich Sugar Mills Ltd. v. Pip
raich Sugar Mills Mazdoor Union, [1957] 1 LLJ 235(SC)
5
Indian Iron and Steel Company Ltd. v. Their Workmen, (1958) 1 LLJ 269
Government can refer a dispute to the Labour Court at ‘any time’.6 Industrial disputes should be referred to soon
after conciliation proceedings fail.7 Complaint by the trade union alleging lock-out pertaining to actual closure of a
branch will not be maintainable.8 A reference for adjudication for payment of wages on presumption lock-out will
not be sustainable.9 A dispute, pertaining to closure and retrenchment, for adjudication can be referred for
adjudication.10 Government must refer the dispute to decide validity of establishment’s closure. 11 Courts are
empowered to lift the veil to peep as to whether the closure of establishment is genuine or not.

The right to close down the undertaking is not an absolute right. It can be restricted and regulated in public
interest. It is for the Government or the Industrial Tribunal in a given case, to probe into all the
circumstances to arrive at a conclusion. 12 If the discharge or dismissal of a workman is a colourable exercise
of the power to discharge or dismiss a workman in accordance with the standing orders or is a result of the
victimisation or unfair trade practice, the Industrial Tribunal will intervene by refusing to grant ‘permission’
or ‘approval’.13

II. WHETHER THE BONUS PAID BY THE COMPANY WAS AS PER PAYMENT OF BONUS
ACT, 1965 OR NOT?
It is humbly submitted before this Hon’ble Tribunal that the company did not grant the bonus to its
employees according to the provisions of the Payment of Bonus Act,1965.

a. BONUS GIVEN TO EMPLOYEES LESS THAN THE MINIMUM PRESCRIBED

Every employee shall be entitled to be paid by his employer in an accounting year, bonus, in accordance
with the provisions of Payment of Bonus Act,1965.14 This Hon’ble tribunal have in past awarded bonus to
season workers15, factory workers16, part-time workers17, probationer18 and even every employee19 to be
entitled to bonus. Section 10 of Payment of Bonus Act creates a statutory right in the employee and imposes
a statutory liability upon the employer, covered by the Act to pay the minimum bonus i.e. 8.33% irrespective
of allocable surplus20 or even when there is loss 21.In the instant case, the company was granting bonus at 4%
which is not in accordance with S.10 of the Act. Hence, it is submitted that the workmen should be granted
with at least minimum bonus.

6
Union of India v. Sri Ram Misra, 2009 LLR 277 (All HC).
7
Manager (Now Regional Director) Reserve Bank of India v. Gopinath Sharma, (2006) 6 SCC 221.
8
Industrial Worker’s Union v. Allied Publishers Ltd., (1997) 76 FLR 315
9
Shri Moolchand Kharati Ram Hospital Karamchari Union v. Labour Commissioner, 1994 LLR 241 (Del HC).
10
Hotel Meru Palace Karamchari Sangathan v. State of Rajasthan, 2008 LLR 558 (SN) (Raj HC).
11
Shaw Wallace and CompanyL Ltd. Glue and Acid Plant Employees Union v. State of Tamil Nadu, 2008 LLR 495
12
Laxmi Starch Ltd. v. Kundara Factory Workers Union, 1994 (2) LLJ 760.
13
Punjab National Bank v. A.I.P.N.B. Employer’s Federation, AIR 1960 SC 1; Chartered Bank, Bombay v. Chartered Bank
Employees Union, [1960] 3 SCR 441; Gujarat Steel Tubes Ltd. v. G.S.T. Mazdoor Sabha, (1980) 1 LLJ 137(SC); Buckingham and
Carnatic Co. Ltd V. Workers of the Company, (1951) 2 LLJ 314.
14
Section 8, The Payment of Bonus Act, 1965
15
J.K. Ginning & Pressing Fctory v. P.O., 2nd Labour Court, (1991) 62 FLR 207.
16
Kale Khan Mohd. Hanif v. Jhansi Bidi Mazdoor Union, 1980 Lab IC 1973.
17
Arun Mills Ltd. v. Dr. Chandra Parshad C. Trivedi, (1976) 32 FLR 323.
18
Bank of Madura Ltd. v. Bank of Madura Employees Union, 1970 Lab IC 1215.
19
Mahabir Tiles Work V. Union of India, AIR 1968 Ker 143.
20
AIR 1979 AP, 182 1979 Lab IC(NOC) 87,56FJR 89
21
Kumoan Motors union v.State of U.P.,1969 Lab IC899; Sardar Daljit Singh 1979 Lab IC 913( ALL)
 b. CLAIM FOR MINIMUM BONUS IS MAINTAINABLE UNDER SECTION 33-C (2) OF I.D.
ACT, 1947

It is pertinent to note that the Payment of Bonus Act, 1965 is not a self-contained code in so far as the
enforcement of right and liabilities created by that Act. Section 22 of the Act creates a legal fiction by
deeming certain disputes as industrial dispute under two circumstances 22. The disputes between an employer
and his employees with respect to the bonus payable under the Act 23. The dispute with respect to the
application of the Act to an establishment in public sector. The first category of dispute will be deemed to be
an industrial dispute. Moreover, the Bonus Act intended to provide a machinery for settlement of dispute
with respect to bonus and achieved that purpose through Section 22 and 39 of the Act. It is unnecessary to
consider the nature of disputes that can be referred for adjudication under Section 22 or to which Section 39
of the Bonus Act applies. Whether the Bonus dispute is an industrial dispute or not, the dispute, if any under
the Act can be adjudicated and be settled under Industrial Disputes Act, 1947. 24 The minimum bonus
payable under the Act is a claim enforceable under Section 33-C (2) of I.D. Act. 25 Moreover, Section 22 of
the Payment of Bonus Act does not exclude filing of an application under Section 33-C(2) of LD. Act for the
Payment of bonus.26

It is also worthwhile to note here that provision of Section 10 of the Payment of Bonus Act making
minimum bonus payable whether there are profits in relevant accounting year or not are not violative of
Article 14 or and Article 19(1)(g) of Constitution of India.27

BONUS DEMAND OF WORKMEN IS RATIONAL AND IN ACCORDANCE WITH LAW

Payment of Bonus Act is a beneficial legislation and authorities are bound to follow the law as laid down.
The employees have asked for 20% bonus for the accounting year 2014-15 which is in accordance with
Section 11 of The Payment of Bonus Act, 1965 which creates a statutory obligation upon the employer that
if the amount of allocable surplus exceeds the amount of minimum bonus at the rate of 8.33%, payable to
the employees then employer shall in lieu of such minimum bonus be bound to pay every employee in
respect of accounting year bonus which shall be an amount in proportion to the salary to accounting year it
may be any per cent subject to a maximum of 20% of such wages. When the entire allocable surplus is
available for payment of bonus of the employees then the division of the allocable surplus shall be made
proportionately to the salary or wage earned by the employees during the accounting year. 28 In the instant
case, the company is prosperous as evident from the fact that it was granting bonus at 33% for five years
from 2007-2012. Hence, the demand of workmen can’t be held to be irrational.

III. WHETHER THE WORKMEN HAS COMMITTED ILLEGAL ACTIVITIES OR NOT?

22
Bala Subhramanya Rajaram v. B.C. Patel, AIR 1958 SC 578, 1958 SCR 1504 (1958) 1 LLJ 773.
23
G. Venkalara Manppa v. Kotappa 1989 Lab IC 958 (1988) II LLN 445, 57 FLR 467.
24
Pappu & anr. v. Raja Tile & Match Works (1989) 1 LLJ 14, (Ker).
25
Anand Oil Industries v. Labour Court, Hyderabad AIR 1979 AP 182.
26
Bawa Singh v. State of Punjab, (1974) Lab IC 425.
27
AIR 1967 SC 691, 1969 (1) LLJ 809.
28
(1976) 2 LLJ 289.
It is humbly submitted before the Hon’ble Tribunal that there was no commission of illegal activities on the
part of workmen. As held by the Supreme Court in catena of cases 29that it is the infallible right of the Trade
Union to conduct demonstrations to air their grievances and demands against their employer, a right which
emanates from the fundamental right under Article 19(1)(a) and 19(1)(b).

As per the facts it is nowhere mention in the notice that any violent or arbitrary activity occurred and
moreover the workers were not equipped with arms. The workers were peacefully conducting a protest at the
exit gate of the company and were in favour of redressal measure in form of dialogue or mediation so that
the dispute could be resolved
In the case of Crompton Greaves Ltd V. Workmen30, it was held that in order to entitle the workmen to
wages, the protest to be legal and justified. Moreover, in case of P K Rangarajan v State of Tamil Nadu31, it
was reiterated by Hon’ble Supreme Court that when the demand is just and legal the workers have every
right to peaceful protest and it is their fundamental right. The SC observed that peaceful protest in order to
air their grievances and to see their voice are heard in the relevant quarters is the right of the people.
In Gujarat Steel Tubes V Its Mazdoor Sabha32, Hon’ble SC observed that peaceful protest in order to
contemplate their legal demands is the distinguishable feature of the country governed by rule of law. One
cherished and valuable aspect of labour community in India is a tradition to express grievances through
direct action or peaceful protest. Organised non-violent protest marches were a key weapon in the struggle
of Independence and the right to peaceful protest is now a fundamental right in the constitution. It is humbly
submitted that protest is a weapon that empowers the disempowered to fight in oppressive cases when no
constructive option is left. It is a weapon of last resort taken out of exasperation and here in this case
workers were demanding from around months yet their demands were continuously ignored by the
employers. As per International labour organisation Article 9, states that ‘Public employees shall have
political and civil rights which are necessary for the normal freedom of association for labourers to work in a
suitable environment.

In the case of B.R Singh v Union of India 33, Justice Ahmadi opined ‘The trade unions with a bulk of
labourers are able to bargain more effectively with the management than an individual workman the rule to
adopt peaceful protest with sufficient membership is justified to get it redressed. It was reiterated that
striking work is integral to process of wage bargaining in an industrial economy and post Keynesian
economics demonstrated long ago in the analysis of real wage determination. A worker has no other means
of defending his real wage other than seeking an increased money wage. Hence in the present case the
peaceful protest at the exit of the company was justified for redressal of their legal demands.

29
Kameshwar Prasad & Ors. v. State of Bihar & Anr., 1962 AIR 1166; Railway Board, New Delhi & Anr. v. Niranjan Singh, 1969 AIR
966; Association of State Road Transport Undertaking v. Association of State Road Transport Undertaking Employees Union &
Ors., 1986 LLN 915; Wander Ltd. & Anr. v. Antox India P. Ltd., 1990 (Supp.) SCC.
30
AIR 1978 SC 1489
31
2003 6 SCR 84
32
1980 AIR 1896
33
1989 SCR Supl. (1) 257
IMMUNITY PROVIDED UNDER TRADE UNIONS ACT, 1926

Demonstration of a Trade Union to convey its grievances to its employer is an unimpeachable right 34 so long
as it performs the demonstration peacefully and in an orderly behaviour. Violence and assault and the
disorderly behaviour by the employees is not permitted in the guise of its exercise of right.
If the demonstration is peaceful and does not create any law and order problem, restriction imposed on
demonstration is illegal.

IV. WHETHER IT WAS A LOCKOUT OR A CLOSSURE AS PER THE NOTICE ISSUED BY

THE COMPANY?
It is humbly submitted that vide notice issued on 3 rd October,2015 the company has issued a lockout 35 in
guise of closure since there is absence of any evidence that the business of the Company was going to be
wound up or the Company was going to be dissolved. The declaration of a lock-out had been made only
because a portion of many workmen had assembled at the Administrative building of the Company and
demanded bonus at a higher rate during their off time. Further the Standing Orders of the Company made
ample provision for taking disciplinary action for misconduct of the workmen. It was, therefore, improper on
the part of the Management, to remove operatives of the company; even when most of them were admittedly
not present at the scene of occurrence. The lock-out is the corresponding weapon in the armoury of the
employer. If an employer shuts down his place of business as a means of reprisal or as an instrument of
coercion or, as a mode of exerting pressure on the employees or when his act may be called an act of
belligerency there would be a lock-out. 36
The aforesaid judgement emphasises the possibility of closure being mala fide and a disguise for lock-out.
The argument might have had some force had it been before the “catch-all" definition of retrenchment was
incorporated in the I.D. Act, 1947.
It might have continued to have some force after the Supreme Court curtailed the meaning of the statutory
definition of retrenchment in Barsi Light Railway Com. case37but it loses much of its weight in the face of
Sections 25F, 25FF and 25FFF. Managements, particularly employers of substantial number of workmen in
an old and established concern, can hardly act light-heartedly or merely with a motive of malice. The
economic implications of these provisions are tremendous. Moreover, they render closure or transfer
ineffective as an instrument of economic coercion. The only lacuna in the law is that although on closure a
workman is entitled to compensation, he is not, as in the case of retrenchment, entitled to re-employment on
re-opening.

The view of the Labour Appellate Tribunal that lock-out involves an element of “malice or ill-will” is
unacceptable. The lock-out is an instrument of economic coercion and so long as the management is acting
with a view of achieve this objective by putting economic pressure on its workmen it can hardly be said that
34
Patel Oil Mills v. Relaxo Rubber & Allied Industries Employees Union, 1999 LLR 13.
35

36
Shri Ramachandran Spg. Mills v. State of Madras, AIR (1956) Mad. 2411.
37
K.N. Joglekar And Ors. vs Barsi Light Railway Co. Ltd. , AIR 1955 Bom 294
 38
they are activated by “malice” or “ill-will.”
The other question was whether the abrupt stoppage of work was aimed “at persuading” by a coercive
process the employees to see the employer’s “point of view” and accept their “demand”. The Court held that
even though no demand as such was ever made by the employers against the workmen it would be idle to
expect the employers to make express demands every time. In its view, it would be enough if any such
demand can even by implied from the course of conduct. The Court accordingly held that such suspension of
work at satisfied the test laid down in Kairbetta’s case39 and amounted to a “lock-out".

The objective of section 25-O of I.D. Act is to provide for a procedure regulating the closure of industrial
establishments and the restrictions are meant to deter reckless, unfair, unjust and mala fide. 40 It also protects
interest of the workers for compensation.41 Before closing down an ‘industrial establishment’, it is
imperative on the part of the employer to obtain permission under section 25-O of the I.D. Act 42 and is
must.43

It was illegal in as much as the same was resorted to without giving 60 days’ notice as required under
Section under Sec. 25 FFA of the act. The language of the Section 25 FFA is clearly mandatory. Thus, a
closure effected in fact, without compliance with the requirements of section 25 FFA must be held to be
devoid of legal effect, invalid and illegal.44 Closure of an establishment employing above 100 workmen without
permission will be illegal.45While seeking permission to close an industrial establishment, it should be proved
that it has become impossible to run. 46
Closure implies closing of industrial activity as a consequence of which workmen are rendered jobless. The closure
cannot be said to be always permanent and irrevocable. Change of circumstances may encourage an
employer to revive the industrial activity which was really intended to be closed. When unfair labour
practice is alleged by the workmen on ground of resorting to lock-out, the true test for the industrial court
would be to determine whether, keeping in view all the relevant circumstances at the time of closure, the
closure was a device or pretence to terminate services of workmen or whether It was bona tide and for
reasons beyond the control of the employer. General Labour Union v. BM Chavan, (1985).} SCC 312.

In G. Govinda Rajulu v. The A.P. State Construction Corporation Ltd., and anr. 47, Supreme Court held that
the employees whose services were terminated due to the closure of the Andhra Pradesh State Construction
Corporation Ltd., should be continued in service on the same terms and conditions either in the Government

38
Prabho Pandey v. J.K. Jute Mills Co. Ltd., (1956) 1 LLJ 588 (LAT)
39
Kairbetta Estate v. Rajmanickam, (1960) 2 LLJ 275 (SC)
40
Navnath Kanha Naik v. United Breweries Ltd., 2009 LLR 220 (SN) (Bom. HC)
41
Valliappa Textiles and Allied Companies Workers Union v. State of Karnataka, 2006 LLR 558 (Karn HC).
42
Oswal Agro Furnane Ltd. v. Oswal Agro Furnane Workers Union, (2005) 3 SCC 224.
43
Orissa Textile & Steel Ltd. v. State of Orissa, (222) 2 SCC 578
44
M.G.K. Union v. Glass Containers Pvt. Ltd. (1983) 1 LLJ 326; Walfort Transport Ltd. v. State of West Bengal, 1978 (2) LLJ 110.
45
Engineering Products (India) Ltd. v. Dandapani Maharana, 1999 LLR 35(Pat HC).
46
Voltas Employees Union, Mumbai v. Voltas Ltd., Bombay, 2003 LLR 259.
47
(1988) 1 Lab LJ 328 (SC)
departments or in the Government Corporations.
In Hindalco Industries Ltd. v. UOI and ors. 48, it was held that even though the closure of an undertaking was
not a planned and voluntary closure by the company section 25 of the Act would be applicable. It was also
pointed out that even if an undertaking is closed for reasons beyond its control section 25 will be applicable
and the conditions imposed in the order of the Government granting permission for the closure were valid
and binding on the appellant company. Further the plea of appellant that closure being due to unavoidable
circumstances, it was liable to pay compensation only under 25FFF of the Act was also rejected because
about 211 employees had been retrenched and as such section 25- O was only relevant provision.
The Supreme Court in many cases, held that the peaceful demonstrators should not be subjected to extreme
penalty of dismissal as it would lead to mass dismissal of workers. However, the Court at the same time
ruled that in the process of distinguishing the case the context in which judgements were given should
always be kept in mind. The Supreme Court has consistently held that the order of dismissal of
demonstrators by the management in violation of Section 33 is illegal. In such situation, they are entitled to
reinstatement.49

48

49
Punjab National Bank v. Their Workmen, (1959) 2 LLJ 666 (SC); Shalimar Works Ltd. v. Workmen, AIR 1959 SC 1217.