Industrial Relations and Labour Laws, 6th - S.C. Srivastava (1).pdf

INDUSTRIAL RELATIONS AND LABOUR LAWS

Suresh C Srivastava

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ISBN: 978-93-259-5540-0 Vikas® is the registered trademark of Vikas Publishing House Pvt Ltd First Published in 1982 Sixth Edition: 2012 Copyright © S C Srivastava, 2012 All rights reserved. No part of this publication which is material protected by this copyright notice may be reproduced or transmitted or utilized or stored in any form or by any means now known or hereinafter invented, electronic, digital or mechanical, including photocopying, scanning, recording or by any information storage or retrieval system, without prior written permission from the publisher. Information contained in this book has been published by VIKAS® Publishing House Pvt Ltd and has been obtained by its Authors from sources believed to be reliable and are correct to the best of their knowledge. However , the Publisher and its Authors shall in no event be liable for any errors, omissions or damages arising out of use of this information and specifcally disclaim any implied warranties or merchantability or fitness for any particular use. Disputes if any are subject to Delhi Jurisdiction only.

This book is dedicated to the memory of my Grand Uncle and Grandfather, Late Mr Jai Mangal Prasad Late Dr Mata Prasad My Parents, Late Mrs and Dr S R Varma My respected teacher, Late Professor Anandjee whose blessings inspire me This book is also dedicated to my wife, Late Mrs Vinodini Kumari

PREFACE TO THE SIXTH EDITION Labour law seeks to regulate relations between an employer or a class of employers and their workmen. The reach of this law is so wide that it touches the lives of millions of men and women who constitute the labour force. However, it is unfortunate that barring a few statutes such as the Minimum Wages Act, 1948 and the recently enacted Unorganized Workers Social Security Act, 2008, most labour laws are, in effect, not applicable to unorganized labour which constitutes about 93 per cent of the entire labour force. Further, most labour legislation is more than 6 decades old. It is felt that our labour laws are over-protective, overreactive, fragmented, outdated and irrelevant and have created hurdles in achieving economic targets, particularly given the global competition and economic recession. The emergence of globalization, liberalization and privatization has further brought new challenges. There is therefore, mounting pressure to reform labour laws. In view of this, the First and Second National Commissions on Labour and the National Labour Law Association made a series of recommendations to remove the irritants and stumbling blocks but barring some legislative amendments in recent years, no major reforms have been undertaken to give legislative shape to the recommendations of the Commissions. Since the fifth edition of this book was brought out, much water has flown under the bridge in the area of labour laws and industrial relations. In the legislative sphere, the most notable development was the amendment in the Industrial Disputes Act, 1947 in 2010. The Amended Act has (i) expanded the definition of ‘appropriate government’ under Section 2(a); (ii) raised the wage ceiling of a supervisor from ₹1,600 to ₹10,000 per month under Section 2(s); (iii) provided direct access to the workman to labour court/tribunal in cases of disputes arising out of Section 2A; (iv) expanded the scope of qualifications of presiding officers of labour courts or tribunals under Sections 7 and 7A; (v) provided for grievance redressal machinery in every industrial establishment employing 20 or more workmen for the resolution of disputes arising out of individual grievances; (vi) empowered the labour court/tribunal to execute awards/settlements/orders. Apart from the above, a survey of judgements delivered by the Supreme

Court and high courts reveals that there has been a marked shift in the approach of the Indian judiciary in the area of discipline and disciplinary procedure. Further, new norms have been evolved to determine whether a person is a workman. Moreover, post 2005, the Supreme Court has generally held that relief by way of reinstatement with back wages is not automatic even if termination of an employee is found to be illegal or in contravention of the prescribed procedure and in such cases, compensation in lieu of reinstatement may be appropriate. However, in two cases reported in 2010, the Supreme Court felt that the approach of the courts must be compatible with the constitutional philosophy of which the Directive Principles of State Policy constitute an integral part and justice due to the workman should not be denied by entertaining spurious and untenable grounds put forward by the employer (public or private). Whatever may be the justification for the aforesaid line of approach, the law has become uncertain on this issue. Further, the requirement of notice for strike/lock-out in public utility services under Section 22 received a new interpretation in 2008, which appears to be contrary to the legislative scheme and has added to uncertainty on this subject. Moreover, in 2006 the Supreme Court has held that daily/casual/temporary/contract workers employed in public employment could not claim regularization but in 2010–2011, it laid down that this principle did not apply in labour disputes. In fact courts even refused to apply this principle where the plea that the affected worker was not employed in public employment through the proper selection procedure, was not taken before the tribunal. In view of the above, a need was felt to bring out the sixth edition of this book. This edition has not only been extensively revised and updated to cater to the needs of labour lawyers, managers, public administrators and labour tribunals, but has also widened the scope and dimensions of the book. Thus, Chapter 1 now includes judicial legislation on labour law, review of labour laws and labour reforms along with a look at the International Labour Organization and its influence on Indian labour laws. Chapter 2 (a new chapter) provides an overview of industrial relations. Chapter 3 includes a new section on regulation of daily/casual/contract/temporary workers. Chapter 4 now includes the objectives, composition and functioning of employers’ organizations. Chapter 15 includes a new section on current approaches of the Supreme Court on interpretation of Section 2(s). Chapter 21 which is now titled ‘Management of Discipline’ also includes the procedure for conducting a domestic inquiry and precautions to be taken by disciplinary authority in awarding punishment. The book has been divided into five parts. Part I provides the contextual and constitutional framework of labour law. Part II briefly sketches the trade union movement and employers’ organizations and also examines the laws

relating to trade unions, collective bargaining, unfair labour practices and victimization. Part III deals with regulation of industrial disputes including the arena of interaction and participants. It also provides the framework of persuasive, coercive and voluntary processes for settlement of industrial disputes and governmental power under the Industrial Disputes Act. This part examines the laws relating to instruments of economic coercion, which has brought within its fold strikes, picketing, gherao and lockouts. It also examines the laws regulating management of discipline and the management’s prerogative during pendency of proceedings and change in conditions of service. Moreover, it examines laws relating to lay-off, retrenchment, transfer and closure. Part IV deals with standing orders in the light of statutory provisions and judicial decisions. Part V seeks to delineate the functioning of workers’ participation in management. It is hoped that the book will receive appreciation from lawyers, managers, officials of the labour department, labour judiciary and students. At the end, I wish to place on record my gratitude for the support and encouragement received from my daughters Reena, Rachna and Simmi and sons-in-law Manoj Khare and Sumit Sahay. I cherish the love and affection received from my granddaughters Eesha, Somya, Shivika and Sanvi. I also wish to express my sincere thanks to M/s Vikas Publishing House, New Delhi for their keen interest and skilled editorial inputs for the publication of the present edition of the book.

Suresh C Srivastava

CONTENTS PREFACE LIST OF Cases PART I INDUSTRIAL RELATIONS AND LABOUR LAWS

CHAPTER 1 Introduction to Labour Law Approach to Labour Law Basis of Labour Law Social Justice and Labour Law Public Interest Litigation for Enforcement of Labour Laws International Labour Organization and its Influence on Indian Labour Laws Review of Labour Law by the First National Commission on Labour Review of Labour Law by the Second National Commission on Labour Approaches of Indian Judiciary and Judicial Legislation on Industrial Relations Labour Reforms: Review of Labour Law CHAPTER 2 Industrial Relations: An Overview The Contextual Framework Dimensions of the Problems of Industrial Relations Industrial Unrest and Work-Stoppages Unemployment and Underemployment as Barriers to Improving Industrial Relations Other Difficulties in Healthy Growth of Industrial Relations through Labour Law Policy Scope and Concept of Industrial Relations Industrial Relations vis-a-vis Human Relations Management

Objectives of Industrial Relations Role of the State in Industrial Relations Changing Dimensions of Industrial Relations in India Impact of Globalization and the WTO Regime on Industrial Relations Five-year Plans and Industrial Relations CHAPTER 3 Constitutional Framework on Industrial Relations Constitutional Perspective Constitutional Amendments on Right to Free and Compulsory Education Contribution of Indian Judiciary in Evolution of Industrial Jurisprudence Through Constitutional Interpretation Sexual Harassment of Women at Workplace and the Constitution Constitutional Validity of Service Contracts and Standing Orders Regulation of Daily Wager/Casual Workers or Contract Labour/Temporary Workers in Public Employment PART II TRADE UNIONS AND LAW

CHAPTER 4

Trade Unions of Workers and Employers’ Organizations: A Contextual and Historical Analysis Need to Form Trade Unions Right to Form Trade Unions History of the Trade Union Movement in India Existing Strength of Central Trade Unions Current Issues Closed Shop/Union Shop Employers’ Organizations

CHAPTER 5

Judicial Delineation of Statutory Definition of Trade Union and Trade Dispute The Definition Members of Trade Unions Trade or Industry Objectives of Trade Unions

Trade Dispute CHAPTER 6 Registration of Trade Unions Legal Status of Registered Trade Unions Compulsory Versus Voluntary Registration Appointment of the Registrar Mode of Registration Powers of the Registrar No Power of the Registrar to Verify Membership of Trade Unions Power to Conduct Election No Power to Hold Inquiry No Power to Decide Rival Claims No Power to Decide Regarding Admission of Membership Duties of the Registrar Certificate of Registration: A Conclusive Evidence Minimum Requirement for Membership of a Trade Union Cancellation and Deregistration of A registered Trade Union Appeal The Result of Deregistration Re-registration Registered Office Change of Name, Structure and Dissolution Submission of Returns Penalties and Procedure CHAPTER 7 Members, Office Holders and Outsiders in Trade Unions Some Disturbing Aspects of Outsiders in the Union Rights of Minors to Membership of Trade Unions Outsiders in the Union Executive and the Law Disqualification of Office-Bearers Ceiling on Holding Offices in Trade Unions Tenure of Elected-Bearers/Members of Executive

Rights And Duties of Office-Bearers and Members Transfer of Office-Bearers of Trade Union Inter-Union and Intra-Union Rivalries CHAPTER 8 Trade Union Finances and Funds Factual Review Membership Subscription: Law’s Response General Fund: Purposes for Which it May be Spent Political Fund: Nature and Effect of Non-Contribution CHAPTER 9 Privileges of Registered Trade Unions Immunity from Criminal Conspiracy Immunity From Civil Actions Enforceability of Agreements Termination at the Instance of Union CHAPTER 10 Recognition of Trade Unions The Need For Recognition of Trade Unions Recognition of Trade Unions In Retrospect Law and Practice Relating to Recognition of Trade Unions CHAPTER 11 Collective Bargaining The Perspective ILO Principles on the Right to Collective Bargaining Concept and Meaning of Collective Bargaining Prerequisites for Collective Bargaining Advantages and Disadvantages of Collective Bargaining Collective Bargaining in India CHAPTER 12 Unfair Labour Practices and Victimizations Unfair Labour Practices on the Part of Employers under the Trade Unions (Amendment) Act, 1947 Unfair Labour Practices on The Part of Trade Unions under the Trade Unions (Amendment) Act, 1947 Judicial Delineation of ‘Unfair Labour Practice’

Code of Discipline in Industry Response of The [First] National Commission on Labour Unfair Labour Practices on the Part of Employers and Trade Unions of Employers under The Industrial Disputes (Amendment) Act, 1982 Unfair Labour Practices on the Part of Workmen and Trade Unions of Workmen under The Industrial Disputes (Amendment) Act, 1982 Proof of Unfair Labour Practice Victimization Scope of Interference by Industrial Tribunal PART III INDUSTRIAL DISPUTES ACT, 1947

CHAPTER 13 Industrial Disputes Act: A Contextual Framework Object of the Act Scheme of the Act Industrial Disputes (Amendment) Act 1982 and 1984 Trade Unions and The Industrial Disputes (Amendment) Bill, 1988 Industrial Disputes (Amendment) Act, 2010 Scope of the Act Interpretation of Industrial Relations Law No Jurisdiction of Civil Court in Industrial Dispute CHAPTER 14 Concept and Scope of Individual and Industrial Disputes Industrial Dispute Individual Dispute Legislative Response : Insertion of Section 2A No Time Limit Prescribed Recommendation of The [Second] National Commission on Labour Remedy to Individual Workman under Section 2A Prior to 2010 Amendment Amendment of Section 2A by the Industrial Disputes (Amendment) Act, 2010 CHAPTER 15 Arena of Interaction and Participants in Industrial Disputes

Industry Bangalore Water Supply and Sewerage Board Case Response of the (First) National Commission on Labour Parliament’s Disapproval of Judicial Response Current Confusion Re-examination of the Decision in Bangalore Case CHAPTER 16 Workmen Definition Tests for Determination of Supervisory Capacity Specific Cases Current Approach of the Supreme Court on the Interpretation of Section 2(S) Recommendations of the (Second) National Commission on Labour Employer CHAPTER 17 Settlement of Industrial Disputes Works Committee Grievance Settlement Authorities Court of Inquiry Voluntary Arbitration Processes Involved in Reference of Dispute to Voluntary Labour Arbitrator Adjudication Award Non-Statutory Machinery and its Working CHAPTER 18 Powers of the Appropriate Government Government’s Power of Reference Power of the Government to Withdraw and Transfer Certain Proceedings Government’s Power to Refer any Question for Interpretation of the Award Power to Make Rules Delegation of Power Power to Amend Schedules

Power of the Government to Exempt CHAPTER 19 Instruments of Economic Coercion Strike Picketing Gherao Bandh Lockout Right to Strike Right to Lockout Regulation of Strikes and Lockouts Illegal Strikes and Lockouts Sanctions and Criminal Proceedings Justification of Strike and Lockout Dismissal Of Strikers Wages For Strike and Lockout Period CHAPTER 20 Lay-off, Retrenchment, Transfer and Closure Lay-Off Retrenchment Transfer and Closure of the Undertaking: Prevention and Regulation CHAPTER 21 Management of Discipline and Disciplinary Procedure Regulation of Management’s Prerogative of Disciplinary Action: The Context Meaning and Scope of Misconduct Nature and Concept of Dismissal and Discharge Discharge Simpliciter or Dismissal in Disguise: Courts’ Power to Lift the Veil Domestic Inquiry Right to be Defended by a Lawyer in Domestic Inquiry Right of Representation in Disciplinary Proceedings through Co-employees Applicability of the Evidence Act

Domestic Inquiry Pending Criminal Proceedings Can Departmental Proceedings be Continued against the Delinquent in Case of his Acquittal by Criminal Court Effect of Delay in Conduct of Inquiry Power to Conduct Inquiry Afresh Non-Supply of Inquiry Report Domestic Inquiry Found Defective—Date of its Effect Power of Labour Courts, Tribunals and National Tribunals to Give Appropriate Relief in Case of Discharge or Dismissal of Workman Discriminatory Treatment Relief to Wrongfully Dismissed Workmen CHAPTER 22 Management’s Prerogative During the Pendency of Proceedings and Notice of Change Section – I Legislative Development and the Present Legislation Object of Section 33 Requirements under Section 33 Scope of Inquiry under Section 33 Alteration in the Conditions of Service Misconduct not Connected with Pending Dispute: Section 33(2)(B) Protection of Union Official under Section 33 Section 33-A: The Remedy to an Aggrieved Workman Section – II Change In Conditions of Services: Notice of Change PART IV STANDING ORDERS

CHAPTER 23 Contextual Frame-Work of the Industrial Employment (Standing Orders) Act, 1946 Constitutional Validity of Automatic Termination of Service under Standing Orders

CHAPTER 24 Scope and Coverage of the Industrial Employment (Standing Orders) Act, 1946

Coverage of the Act Workers Covered Employer under the Act CHAPTER 25 Concept and Nature of Standing Orders The Concept of Standing Orders II. Nature of the Standing Orders CHAPTER 26 Certification Process—Its Operation and Binding Effect Submission of Draft Standing Orders by Employers Conditions for Certification of Standing Orders Procedure for Certification of Standing Orders Certifying Officers: Their Appointment, Jurisdiction, Powers and Duties Appeals Against Certification Date of Operation of Standing Orders or Amendments Binding Nature and Effect of Certified Standing Orders Posting of Standing Orders CHAPTER 27 Modification and Temporary Application of Model Standing Orders Modification of Standing Orders Temporary Application of Model Standing Orders CHAPTER 28 Interpretation and Enforcement of Standing Orders Interpretation of Standing Orders Penalties and Procedure Remedies for Enforcement of Rights and Liabilities Created under the IESOA Inspection Machinery CHAPTER 29 Role of Government under the IESOA Concept of the ‘Appropriate Government’ Delegation of Power Power of the Government to Make Rules Time-Limit for Completion of Domestic Inquiry

Payment of Subsistence Allowance PART V WORKERS’ PARTICIPATION IN MANAGEMENT

CHAPTER 30 Workers’ Participation in Management Introduction Constitutional Commitment Concept and Scope Statutory and Non-Statutory Schemes Making Workers Shareholders Representation of Workers on Board of Directors Workers’ Participation in Winding up Operation Workers’ Right to Run Sick Industries Participation of Workers in the Management Bill, 1990 Steps Taken During 1996–97 An Evaluation

LIST OF CASES A A C C Rajanka Lime Stone Quarries Mazdoor Union v. Registrar of Trade Unions, AIR 1958 Pat. 475, 92 A C Mukerjee v. Union of India, (1972) 2 LLJ 1978 (Calcutta), 132 A G Kher v. Atlas Copco (India) Ltd, (1992) 1LLJ 423, 127 A G Mazdoor Sangh v. Indian Air Gases Ltd, (1977) 2 LLJ 503 (Allahabad), 687 A L Kalra v. Project & Equipment Corporation of India, 1984 LIC 961 (SC), 581 A L P Hindustan Zinc Ltd v. H Z Workers’ Union, (1988) Lab. IC 1361, 295 A M Sainalabdeen Musaliar v. District Collector, (1994) Lab. IC 57, 321 A P Electrical Equipment Corporation v. Its Staff Union (1986) Lab. IC 1851, 438, 454 A Rodrick v. K C Thapar, (1963) 1 LLJ 248 (SC), 563 A Sundarambal v. Government of Goa, Daman and Diu, (1988) 4 SCC 42: 2012 LLR 26, 214, 267 A V Nachane v. Union of India AIR 1982 SC 1126: (1982) 25CF 1246 (1982) 1 SCC 205, 497 Abdul Khalil St. Bharu v. Commission of Labour, Nagpur, 1997 Lab. IC 122 (Bom), 202 Abdul Rahiman Haji v. Abdul Rahiman 1980 Lab. IC 910, 389 Abdul Salem v. State of Tamil Nadu, (1973) 43 FJR 180 (Madras), 375 Abdul Wahab Shaikh Lai Bhai v. G E Patankar, (1980) Lab. IC 623 (Bombay), 230 Addl. Chancellor, Farmers Service Cooperative Bank v. Labour Court, (1996) LLR 654 (Kerala), 313, 314, 598 Administrator, Union Territory of Dadra and Nagar Haveli v. Gulabhia M Lad, 2010 (125) FLR 880 (SC), 582 Aeron Steel Rolling Mills v. State of Punjab, (1959) 1 LLJ 73 (Punjab), 392 Aftab-e-jadid, Urdu Daily Newspapers v. Bhopal Shramjivi Patrakar Sangh, (1985) 1 LLJ 272, 301 Agra Electric Supply Co. v. Aladin, (1969) 2 LLJ 540 544 (SC): AIR 1970 SC 5 13, 340, 665, 692 Agriculture Produce Market Committee v. Ashok Harikuni, AIR 2000 SC 3116: (2000) 2 LLJ 1382, 211 Ahmedabad Mfg. & Calico Ptg. Co. v. Ramtahel, AIR 1972 SC 1598, 351 Ahmedabad Pvt. Primary Teachers Association v. Administrative officer, (2004) 1 SCC 755, 262 Ahmedabad Textile Industry Research Association v. State of Bombay and Others, AIR 1978 SC 548, 591, 215 Ahmedabad Textile Industry Research Association v. State of Bombay, (1960) 2 LLJ 720

(SC), 125, 215, 216 Air Corporation Employees’ Union v. D V Vyas, (1962) 1 LLJ 31 (Bombay), 302 Air Gases Mazdoor Sangh v. Indian Air Gases Ltd, (1977) 2 LLJ 503, 505 (Allahabad), 688 Air India Cabin Crew Association v. Union of India, (2012) 1 SCC 619, 257 Air India Corporation Bombay v. V A Rehellow, (1972) 1 LLJ 501, 627, 652 Air India Statutory Corporation v. United Labour Union, (1997) 9 SCC 377, 368 Ajanta Industries v. Central Board of Direct Taxes, AIR 1976 SC 437, 389 Ajit Kumar Nag v. General Manager (PJ) Indian Oil Corporation Ltd, (2005) 7 SCC 764, 587 Akhil Raj Rajya Hand Pump Mistries Sangthan v. State of Rajasthan, (1994) Lab. IC 345, 230 Akhil Ranjan Das Gupta v. State of Assam, (1965) 2 LLJ 614, 680 Alexandra Jute Mills Ltd v. Their Workmen, (1950) ILLJ 1261, 158, 186 Alien Macgregor Smith Forge v. First Industrial Tribunal, (1963) 1 LLJ 556 (Calcutta), 213 Aligarh Muslim University v. Mansoor Ali Khan JT 2000 (7) SC 529: 2000) 5 SCC 65, 51, 611 All India Bank Employees Association v. National Industrial Tribunal, (1961) I LLJ 375: AIR 1962 SC 171, 57, 132, 423, 431 All India Bombay Tyres International Employees’ Federation v. C B Dinagre (1993) Lab. IC 817, 281 All India Radio v. Santosh Kumar and Another, (2003) LLR 9, 238 All India Reserve Bank Employees’ Association v. Reserve Bank of India, AIR 1966 SC 305: (1965) 2 LIJ 178, 189, 190, 250 Allahabad District Cooperative Bank Ltd v. Vidhya Varidh Mishra, (2004) 6 SCC 482, 587 Allen Berry & Co. Ltd v. Their Workmen, (1951) 1 LLJ 228 (LAT), 327 Alloy Steel Project Company v. Their Workmen, (1971) 1 LLJ (SC), 483 Alumina Mazdoor Sangh v. Ratna Construction Co. and Others (2003) LLR 382, 506 Amal Kumar Parial v. Union of India, (1989) ATC 679, 581 Amalendu Gupta v. LIC, (1982) 2 LLJ 332 (Calcutta), 424, 470 Amar Jyoti School v. Govt. of NCT, (2009) 122 FLR 354, 261 Amar Singh v. State of Rajasthan, AIR 1955 SC 504, 348 Ambabai Manjunath Amin v. P L Majumdar, (1987) 1 LLJ 36 (Bombay), 336 Ambica Mills Ltd v. Second Labour Court, (1967) 2 LLJ 800 (Gujarat), 338 Ambika Jute Mills v. Their Workers, (1954) 1 LLJ 835 (IT), 459, 460 Ambika Singh v. U P State Sugar Corpn. Ltd (1991) I LLN 490, 498 Ameteep Machine Tools v. Labour Court, (1980) 2 LLJ 453 (SC), 319 Amulya Ratan Mukkerjee v. Deputy Chief Mechanical Engineer, Eastern Railways, AIR 1961 Cal 40, 572 Anakapalla Cooperative Agricultural & Industrial Society v. Its Workmen (1962) 2 LLJ 621 (SC, 253, 270, 538 Anameinuger Development Corporation Ltd v. Second Industrial Tribunal, (1986) Lab. IC 1741, 253 Anand Bazar Patrika (Pvt.) Ltd v. Its Workmen, (1969) 2 LLJ 670 (SC), 250 Anand Bihar v. Rajasthan State Road Transport Corporation, Jaipur (1991) Lab. IC 494, 503

Ananda Bazar Patrika v. Their Employees, 1963 2 LLJ 429, 165 Anandam v. Tamil Nadu Electricity Board, 1997 LLR 247, 590 Anando Chandra Swam v. State of Orissa, (1973) 1 LLJ 508 (Orissa), 229 Ananthanarayanan v. S R, (1956) 1 LLJ 29 (Madras), 572 Andhra Pradesh Electrical Equipment Corporation, Hyderabad v. Andhra Pradesh Electrical Equipment Corporation Staff Union 1986 Lab. IC 1851 (AP), 423 Andhra Scientific Co. Ltd v. A Sheshagiri Rao, AIR (1967) SC 408: 1959) 2 LLJ 551, 349, 563, 638 Anil Bapurao Kanase v. Krishnq Sahkari Sakkar Karkhana Ltd (1998) I LLJ 343, 502 Anil Giluker v. Bilaspur—Raipur Gramin Bank, 2011 LLR 1121 (SC), 573, 582 Anil Kumar Chakraborty v. Saraswatipur Tea Co. Ltd, (1982) 2 SCC 328; 1982 SCC (L&S) 249; AIR 1982 SC 1062, 628 Anil Sood v. S K Sarvaria, (1997) LLR. 386, 342 Ankulaiah v. DG, P&T, SLJ (1986) CAT 407, 580 Annamalai Timber Trust Ltd (1950) LLJ 994 (IT), 473, 535 Anoop Sharma v. Executive Engineer Public Health Division, Panipat 2010 (4) SCALE 203, 53, 505, 508, 523 Antony v. Kumaran, (1979) 1 LLJ 606, 545 AP SRTC v. Raghuda Siva Sankar Prasad, (2007) 1 SCC 222; (2007) 1 SCC (L&S) 151; AIR 2007 SC 152, 628 Apparel Export Promotion Council v. A K Chopra, JT 1999 (1) SC 61: (1999) 1 SCC 759, 47 APSWL Co-operative Society Ltd v. Labour Court, 1987 Lab. LC 642 at 649 (SC), 41 Arun Mathur v. Labour Court 1993 1 C.L.R. 467, 497 Aruna Mills Company Ltd v. Textile Labour Association, (1951) 1LLJ 647, 486 Ashok Kumar Sharma v. Oberoi Flight Services (2010) 1 SCC 142, 633 Ashok Leyland Ltd v. State of Tamil Nadu, (2004) 3 SCC 1, 339 Ashok Leyland Ltd, Madras v. Presiding Officer, Second Additional Labour Court, Madras 2003 LLR 784, 699 Ashok Textile Pvt. Ltd v. Their Employees, 461, 469 Assam Chah Karmachari Sanagha v. Dimakuchi Tea Estate, AIR (1958) SC 353, 186 Assam Oil Co. Ltd v. Its Workmen, (1960) 1 LLJ 587, 560, 561, 563, 591 Associated Cement Co. Ltd v. Cement Staff Union 2010 LLR 162, 16, 660 Associated Cement Co. Ltd v. T C Srivastava (1984) 2 LLJ 105, 702 Associated Cement Co. Ltd v. Their Workmen, (1952) 2 LLJ 255 (IT): AIR 1970 SC 177, 196, 460, 461, 483 Associated Cement v. P D Vyas, AIR (1960) SC 665, 685 Associated Electrical Industries (India) Private Ltd v. The Workmen, (1961) 2 LLJ 123 (SC), 392 Association Cement Co. Ltd, v. Their Workmen, (1953) 2 LLJ 369, 328 Association of Engineering Workers v. Dockyard Labours, (1992) 1 Lab. IC 214, 97, 520 Athani Municipality v. Labour Court, AIR 1969 SC 1335, 335 Atherton West & Co. Ltd v. Suti Mill Mazdoor Union, AIR 1953 SC 241, 638 Atlas Cycle Industries Ltd v. State of Punjab, (1962) 1 LLJ 536 (Punjab), 394 Atlas Cycle Industries v. P V Thukral (1971) Lab. IC203, 205 (Punjab and Haryana), 201 Authority of India19 and Ajay Hasia v. Khalid Muzib Sehravardi, (1981) 1 SCC 722, 369

Automative Manufacturing Ltd v. Member, Industrial Court 1993 Lab. IC 534, 710 Automobile Products of India Ltd v. Rukmaji Bala. AIR (1955) SC 258, 637, 655 Avon Services (Production Agencies) Pvt. Ltd v. Industrial Tribunal, (1979) 1 LLJ 1 (SC), 376, 388, 384, 543 Avtar Singh Anand v. Krishna, (1969) 2 LLJ 524 (Delhi), 545

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Fraser and Ross v. District Labour Officer, (1966) 2 LLJ 682 (Madras), 213

G G B Pant University of Agricultrue & Technology v. State of U.P. (2000) SCC, 268 G C Kanungo v. State of Orissa, AIR 1995 SC 1655, 341 G C Sharma Sons v. R K Baveja, (1972) 2 LLJ 475 (Delhi), 229 G M Security Paper Mills v. R S Sharma, (1986) Lab. IC 667, 670 (SC), 294 G Mathu Krishnan v. New Horizon Sugar Mills Pvt. Ltd, (1980) Lab. IC 475, 388 G R S M (W) Co. Ltd v. District Collector 1982 Lab. IC 367, 424 G S Dhara Singh v. E K Thomas, AIR 1988 SC 1829, 115 G S Ramaswamy v. The Inspector General of Police, Mysore AIR 1966 SC 175, 533 G T Lad v. Chemicals and Fibres India Ltd, (1979) 1 LLJ 260, 643 Gammon India Ltd v. Niranjan Dass (1984) 4 SCC 509: 1984 SCC (L&S) 144, 505 Gandharba Bhagi v. Steel Authority of’India, (1987) Lab. IC 1226 (Orissa), 377 Gandhinagar Motor Transport Society v. Bombay State, AIR 1954 Bombay 202, 349 Ganga Kisan Sahkari Chini Mills Ltd Jaivir Singh, 2007 LLR 260, 514 Ganges Jute Manufacturing Company Ltd v. Their Employees, (1950) LLJ 10, 415 Gauri Shankar Chatterjee v. Taxmaco Ltd, (2002) Lab IC 2467, 381 General Labour Union (Red Flag) v. B V Charvan, (1985) 1 LLJ 82, 420 General Manager (Operations), State Bank of India v. State Bank of India Staff Union (1998) LLR 402, 658 General Manager (P), Punjab and Sind Bank v. Daya Singh 2010 LLR 1029, 617 General Manager (USD), Bengal Nagpur Cotton Mills v. Bharat Lai, 2011 (10) SCALE 478, 247 General Manager Telecom v. A Sriniwasa & Others, 1998 (78) FLR 143 (SC), 234 General Manager, B S N L v. Mahesh Chand, 2008 LLR 435, 514 General Manager, Haryana Roadways, v. Rudhan Singh (2005) LLR 849, 510 General Manager, Telecom v. S Srinivasa Rao, AIR 1998 SCC 657, 235 General Secretary, M.P.K.M. Panchayat (HMS) v. Western Coalfield Ltd, (1999) I LLJ 772, 502 General Secretary, Rourkela Shramik Sangh v. Rourkela Mazdoor Subha, 1991 Lab. IC 1270 (SC), 358 Ghaziabad Development Authoirty & Anr. v. Ashok Kumar (2008) 4 SSC 261, 525 Glaxo Lab (India) Ltd v. PO, Labour Court, AIR 1984 SC 505, 581 Goa Sampling Employees’ Association v. G S Company of India P. Ltd, 1985 Lab. IC 666, 366 Goenka Mica Syndicate v. Mohd. Yasin, (1954) 1 LLJ 507 (IT), 28 Gokul Chand Dwarka Das Morarka v. King., 75 I.A. 30, 458 Goodlass Wall Co. v. Amir Ahmad Bakoor Khan, (1954) 2 LLJ 573; (1956) 1 LLJ 468 (LAT), 406 Gopalji Jha Shastri v. State of Bihar, (1983) 2 LLJ 22 (SC), 228 Gorden Woodroff Leather Manufacturing Co. Ltd Workers’ Union v. Their Management, (1949) LLJ 45 (IT), 328 Government of India, Second Five-Year Plan (1956) 49, 353

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H H B Khaitan v. State of Maharashtra.187 (1987) Lab. IC 836 (Bom), 455 H D Singh v. R B I 1985 Lab. IC 1733 (SC), 511 H M T Karmika Sangh v. Labour Commissioner, (1985) Lab IC 633, 89 H P Minerals and Industrial Development Corporation Employees Union v. State of H P (1996) 7 SCC 139, 497 H R Adyanthaya v. Sandoz (India) Ltd, (1994) 4 SCC 164, 249, 257, 260, H S Rajashekara v. State Bank of Mysore, (2012) 1 SCC 285, 510, 515 Hall & Anderson Ltd v. S K Neogi, (1954) 1 LLJ 628 (Calcutta), 321 Hanuman Jute Mills v. Their Workmen, (1953) 2 LLJ 684 (LAT), 460 Harendranath Bose v. Second Industrial Tribunal, (1958) 2 LLJ, 1987, 362 Hari Nagar Cane Farm v. State of Bihar, AIR 1978 SC 548, 211 Hari Prasad Shivshankar Shukla v. Divalkar (A D), AIR 1957 SC 121, 490 Hari Shankar Jain v. Executive Engineer Rural Electricity Division, (1977) 2 LLJ 429 (Allahabad), 671, 674 Hari Singh v. I.T. cum-L.C. Rohtak, (1993) II LLN 244, 497 Hari Vishnu Kamath v. Ahmad Ishaq, AIR 1955 SC 223, 351 Hariba v. K S R T Corporation, (1983) 2 LLJ 76 (Karnataka), 228 Harihar Bahinipati v. State of Orissa, (1965) 1 LLJ 501 (Orissa), 217 Harijinder Singh v. Punjab State Warehousing Corpn, (2010)3 SCC 192. para 19, 6, 13, 53, 523, 530 Harinarayan Srivastava v. United Commercial Bank, 1997 LLR 497 (SC), 583

Hariprasad Shivashankar Shukla v. AD Divalkar AIR 1957 SC 121, 495, 504 Harish Chandra v. The Colli, AIR 1957 SC 444, 352 Harjinder Singh v. State of Haryana, (1992) (1) PLR 186 (P & H), 230 Harjinder Singh v. State of Punjab (2010) 3 SSC 192, 532, 534 Harmohinder Singh v. Kharga Canteen, Ambala Cantt 2001 LLR 849 (SC): (1997) 2 LLN 1007 (SC), 51, 660 Haryana Financial Corp. v. Kailash Chandra Ahuja JT 2008 (8) SC 70, 593 Haryana State Co-op. Supply Marketing Federation v Sanjay (2009) LLR 1014: (2009) 14 SCC 43, 511 Haryana State Electricity Development Corporation Ltd v. Mamni (2006) 9 SCC 434, 632 Haryana State F C C W Stores Ltd v. Ram Niwas (2002) Lab IC 2624, 499 Haryana Urban Development Authority v. Devi Dayal, 2002 Lab. IC 1090, 230 Haryana Urban Development Authority v. Om Pal (2007) 5 SCC 742, 511 Haryana Woollen Development Corporation v. PO I.T cum LC, (1993) 2 LLJ 318, 230 Hathi Singh Mfg Co. Ltd v. Union of India (1960) 3 SCR 528, 541, 547 Heavy Engineering Mazdoor Union v. State of Bihar, (1969) 2 LLJ 549, 365, 367 Herbert Sons Ltd v. Workman, (1977) Lab IC 162 (SC), 295 Highway Group of Estates v. Industrial Tribunal, (1978) 2 LLJ 251 (IT), 460, 470 Himachal Pradesh State Electricity Board v. Laxmi Devi, 2011 LLR 52 (H.P.), 261 Himmat Lal v. State of M.P., AIR 1954 SC 1403, 350 Hind Construction and Engineering Co. Lt (1965) 1 LLJ 462, 624 Hind Construction and Engineering Co. Ltd v. Their Workmen, AIR 1965 SC 917: (1965) 1 LLJ 462, 166, 648 Hindustan Aeronautics Ltd v. Hindustan Aero Canteen K Sangh, (2003) 1 LLJ 494 (SC), 381 Hindustan Aeronautics Ltd v. Workmen1, (1975) 4 SCC 679, 367 Hindustan Antibiotics v. Workmen AIR 1967 SC 948, 340 Hindustan Construction Co. Ltd v. All India Hindustan Construction Workers Union, (1974) 2 LLJ 212 (Kerala), 302 National Project Construction Corporation Ltd v. Their Workmen, 1970 Lab. IC 907 (Patna), 302 Hindustan Construction Co. v. All India Hindustan Construction Workers Union, (1974) 2 LLJ 212 (Kerala), 350 Hindustan General Electric Corporation Ltd v. Bishwanath Prasad (1971) 2 LLJ 340, 647 Hindustan Lever Ltd v. Ram Mohan Ray, (1973) 4 SCC 141, 658 Hindustan Lever Ltd v. The Management (1984) 2 LLJ 388, 316 Hindustan Levers Ltd v. B N Dongre, (1995) Lab IC. 113(SC), 349 Hindustan Ltd v. Chief Commissioner, (1957) 2 LLJ 466, 197 Hindustan Motors Ltd v. Tapan Kumar Bhattacharya (2002) 6 SCC 41, 269 Hindustan Paper Corpn. v. Purnendu Chkrobarty 1997 2 LLN 1007 (SC), 667 Hindustan Paper Corporation v. Purnendu Chakrobarty, (2001) LLR 155 (SC), 51 Hindustan Steel Ltd v. Presiding Officer, Labour Court, AIR 1977 SC 31, 495 Hindustan Steel Ltd v. State of Orissa, AIR 1973 SC 31, 494 Hindustan Steel v. A K Roy (1970) 1 LLJ 228, 632 Hindustan Steel Works Construction Ltd v. Hindustan Steel Works Construction Ltd Employees Union, 2005 LLR 1025, 660

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J J F B & P Works (P) Ltd v. B Sharma, (1977) 1 LLJ 306 (Patna), 333

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V V A Chedda v. Bambai Mazdoor Union, (1973) Lab. IC 697 (Bombay), 288 V Ganesan v. State of India285 (1981) 1 LLJ 64, 470 V K Sharma v. Govt. of NCT, 2008 LLR 521, 257 V K Verma v. Hindustan Machine Tools Ltd, (1999) LLR 370 (P & H), 650 V Ramachandran v. Indian Bank (1979) 1 LLJ 122, 470 V S Kamath v. State of Karnataka, 1988 (2) SLJ 241, 573 V Veerarajan v. Government of Tamil Nadu, AIR 1987 SC 494, 391 Valsad Jilla Sahkor Bank Ltd v. D K Patil, 1991 Lab. IC 655, 671 Varada Rao v. State of Karnataka, (1986)11 CLR 277 (SC), 108 Varadraja Motor Services v. Its Workmen, (1953) 1 LLJ 226, 629 Vasudeo Ambre v. State of Maharashtra, (1988) Lab. IC 554 (Bombay), 228 Ved Prakash Gupta v. M/s Delton Cable India Ltd 1982 Lab IC 1790(SC), 613 Veerappa v. Raman, AIR (1952) SC 192, 350 Veerarajan v. Government of Tamil Nadu, AIR 1987 SC 695, 377 Veerarnani v. Madurai District Cooperative Supply and Marketing Society Ltd., (1983) 2 LLJ 88 (Madras), 265

Vegoils Pvt. Ltd v. Workmen, (1972) 2 LLJ 567 (SC), 246 Vellanikara and Thuttil Rubber Estate v. Its Employees (1959), 113, 459, 467 Venkatramana v. State of Mysore, AIR 1965 SC 255 at 262, 352 Vermula Thimmappa v. Addl. Distt. Magistrate, AIR 1955 NUC Andhra Pradesh 4458, 389 Viakuntam Estate v. Arbitrator, (1968) 1 LLJ 79 (Madras), 303 Vijaya Bank v. Shyamal Kumar Lodh 2010 (6) SCALE 300, 337, 711 Vimal Kishore Malhotra v. State of Uttar Pradesh, AIR 1956 Alld. 56, 409 Vimal Kumar Jain v. Labour Court, Knapur, AIR (1988) SC 384, 268 Virendra Bhandari v. Rajasthan State Road Corporation (2002) 9 SCC 104, 382 Viriji Bhai Laxman Bhai v. New Commercial Mfg. Co., (1958) ICR Bombay, 1153, 461, 468 Virudhachalam P v. Mgmt of Lotus Mills, (1998) 1 LLJ 389 (SC): AIR 1998 SC 554, 292 Visalakshmi Mills Ltd v. Labour Court, (1962) 2 LLJ 93, 197 Vishaka v. Union of India, 1997 LLR 991 (SC), 45 Vishakapatnam Dock Labour Board v. Stevedores’ Association, Vishakapatnam, (1970) 1 LLJ 46 (SC), 229 Vishveswaraya Iron and Steel Ltd v. M Chandrappa, (1994 (84) FJR 46) (Kant), 344 Vishwamitra Press, 1954 2 LLJ 53 (Adj), 629 Viveka Nand Sethi v. Chairman J & K Bank Ltd, 2005 LLR 641, 348 Viveka Nanda Sethi v. Chairman, J&K Bank, 2005 LLR 641 (SC), 611

W Warayam Singh v. Amar Nath, AIR 1954 SC 2 1, 351 Warning Coop. Agriculture Services Society Ltd v. State of Punjab and Others, (1987) Lab & IC 359 (P&H), 342 UPSRTC Kanpur v. State of UP. & Ors.(1996) (1) LLJ 31, 342 Wenger & Co. Ltd v. Their Workmen, (1963) 2 LLJ 403 (SC), 329, 330 West Bengal State Electricity Board v. Desh Bandhu Ghosh, (1985) 3 SCC 116, 48 Western India Automobile Association Ltd v. Industrial Tribunal, (1949) LLJ 245 (FC), 78, 183, 269 Western India Match Co. Ltd v. Western India Match Co. Workers Union, (1970) 2 LLJ 256 (SC), 384, 385 Western India Match Co. v. Western India Match Co. Workers Union, AIR 1970 SC 1205: AIR 1973 SC 2650, 198, 257, 384, 679, 687 William Fredric De Pennmg v. Therd Industrial Tribunal, AIR 1959 Cal 749, 230 Workers of Industry Colliery v. Industry Colliery, (1953) 1 LLJ 190, 194 (SC), 327 Working Journalists of the Hindu v. The Hindu (1961) 1 LLJ 288 (SC), 119, 421 Workman of Oswal Weaving Factory v. State of Punjab, (1967) 1 LLJ 557 (Punjab), 375 Workman v. Dharam Pal Prem Chand, (1965) 1 LLJ 668 (SC), 119 Workmen Employed under IT Shramik Sena v. M/S Raptakos Brett & Co. Ltd, 2008 LLR 520 (SC), 344, 346 Workmen of American Express International Banking Corporation v. Management of the American Express International Banking Corporation 1986 Lab. IC 98, 511 Workmen of Balmadies Estate v. Management, Balmadies Estate 2008 LLR 231, 585 Workmen of Buckingham & Carnatic Mills v. State of Tamil Nadu, (1982) 2 LLJ 90, 283, 578

Workmen of Dahingeapur Tea Estate, AIR 1958 SC 1026, 188 Workmen of Dalmia Cement (Bharat) Ltd v. State of Madras, (1969) 1 LLJ 499 (Madras), 376 Workmen of Dewan Tea Estate v. Their Management, AIR 1964 SC 1458, 476, 678 Workmen of Dharampal Prem Chand v. M/s Dharampal Prem Chand, AIR 1966 SC 182, 193, 196 Workmen of Dikmakuchi Tea Estate v. Management of Dimakuchi Tea Estate, (1959) 1 LLJ 500 (SC), 180, 189, 190 Workmen of Dimakuchi Tea Estate v. Dimakuchi Tea Estate (1958) 1 LLJ 500 (SC), 263, 421 Workmen of Edward Keventers (P) Ltd v. Delhi Administration, ILR (1969) Delhi 767, 453 Workmen of Firestone Tyre and Rubber Co. v. Management (1973) 3 SCR 587, 648 Workmen of Firestone Tyre and Rubber Company of India (P) Ltd. v. Firestone Tyre and Rubber Company of India (P) Ltd, (1973) 1 LLJ 278; AIR 1973 SC 1273, 596 Workmen of Hindustan Lever Ltd v. Hindustan Lever Ltd, (1984) 4 SCC 392 (SC), 181 Workmen of Hindustan Lever Ltd v. Hindustan Lever Ltd, (1999) 1 LLJ 449, 263, 347 Workmen of Indian Express Ltd v. Management of Indian Express Ltd, (1970) 2 LLJ 132 (SC): (1984) 4 SCC 392 (SC), 181, 194, 196 Workmen of Industry Colliery v. Industry Colliery, (1953) 1 LLJ 190 (SC), 286 Workmen of J and P Coats (India) Pvt. Ltd v. State of Kerala, (1977) 2, LLJ 534 (Kerala), 375 Workmen of M/s Baikuntha Nath Debasthan Trust v. State of West Bengal, (1990) 2 Lab. IC 1586, 229 Workmen of M/s Williamson Magor and Co. Ltd, v. M/s Williamson, Magor and Co., Ltd, (1982) 1 LLJ 33, (SC), 164 Workmen of Macforline and Co. v. Fifth I T, (1964) 2 LLJ 556 (Calcutta), 253 Workmen of Meenakshi Mills Ltd v. Meenakshi Mills (1992) 2 LLJ 295, 519 Workmen of Motipur Sugar Factory Private Ltd v. Motipur Sugar Private Ltd, (1965) 2 LLJ 162, 169, 561 Workmen of New Eqerton Woollen Mills v. State of Punjab, (1967) 2 LLJ 686 (Haryana and Punjab), 392 Workmen of Rohtak General Transport Co. v. Rohtak General Transport Co., (1962) 1 LLJ 654 (SC), 119 Workmen of Sri Ranga Vilas Motors (P) Ltd v. Sri Ranga Vilas Motor (P) Ltd (1970) 2 LLJ 177, 365 Workmen of Straw Board Manufacturing Co. Ltd v. M/s Straw Board Manufacturing Co. Ltd, AIR (1974) SC 1132, 542 Workmen of Subong Tea Estate v. Management of Subong Tea Estate, (1964) 1 LLJ 333 (SC), 516, 523, 537 Workmen of Sudder Office v. Management, (1971) 2 LLJ 620 (SC), 568, 569, 570 Workmen of Sudder Workshop of Jorhaut Tea Co. v. Management, (1980) Lab. 1C 742 (SC), 529 Workmen of Sur Iron & Steel Co. v. Sur Iron & Steel Co., (1971) 1 LLJ 570 (SC), 658 Workmen of Syndicate Bank v. Government of India (1985) 1 LLJ 93 at 94 (SC), 377 Workmen of the Food Corporation of India v. M/s Food Corporation of India, (1965) 2 LLJ

4 (SC), 243 Workmen of Williamson Magor & Co. Ltd v. Williamson Magor & Co. Ltd, (1982) 1 LLJ 33 (SC), 312 Workmen v. Balmadies Estates (2008) 1 SCC 115 Workmen v. Firestone Tyre and Rubber Co. (1976) I LJ 493 (SC), 474, 477 Workmen v. Greaves Cotton Ltd, (1971) 2 LLJ 479 (SC), 190 Workmen v. M/s Dharampal Prem Chand, AIR 1966 SC 182, 196 Workmen v. Management of Indian Standard Institution, (1976) 1 LLJ 33 (SC), 216 Workmen v. Rohtak General Transport Company, 1962 1 LLJ 634 (SC), 196

X X R B Kaimal v. Director of Postal Services op. cit. Bhaskaran v. SDO, (1982) 2 LLJ 248 (SC), 227

Y Yad Ram v. B N Singh, (1974) 2 LLJ 306 (Delhi), 333 Yadeshwar Kumar v. M S Bennet Coleman, 2007 LLC 1138, 257 Yasin v. Town Area Committee, (1952) SCR 572, 348

Z Zaverbhai v. State of Bombay, AIR 1954 SC 752, 41

PART I INDUSTRIAL RELATIONS AND LABOUR LAWS

CHAPTER

1 Introduction to Labour Law Over the years, labour laws have undergone change with regard to their object and scope. Early labour legislations were enacted to safeguard the interest of employers. They were governed by the doctrine of laissez faire. Modern labour legislation, on the other hand, aims to protect workers against exploitation by employers. The advent of doctrine of welfare state is based on the notion of progressive social philosophy which has rendered the old doctrine of laissez faire obsolete. The theory of ‘hire and fire’ as well as the theory of ‘supply and demand’ which found free scope under the old doctrine of laissez faire no longer hold good.

I. APPROACH TO LABOUR LAW Labour law seeks to regulate the relations between an employer or a class of employers and their employees. The reach of this law is so wide that it touches the lives of far more people. Indeed, it covers millions of working men and women as compared to any other branch of law. It is this aspect which makes it most fascinating of all branches of law and, therefore, the study of this subject is of enormous dimension and of ever changing facets. There has been a remarkable change in the approach to labour law and industrial relations since World War II. Philadelphia Charter adopted in 1944 provided that ‘labour is not a commodity’ and that ‘poverty anywhere is a danger to prosperity everywhere’. W Friedmann and others who have tried to analyse the essential characteristics of legal development in this branch of law

consider it to be a ‘social duty’ on the part of employer as the main bedrock on which this law is built. This is exemplified by the very approach of law makers to the construction of a wage packet of the working men and women, wage fixation and condition of service. The Indian Constitution lays down broad guidelines to be followed by the state. The Supreme Court in D N Banerji v. P R Mukherjee1, stated that the law as developed after the Second World War, particularly in a welfare state, has reversed the theories of Sir Henry Maine and now society progresses form contract to status and has witnessed considerable legislation laying down conditions of service and also ensuring payment of minimum wages by laws.

II. BASIS OF LABOUR LAW Otto Kahn-Freund in his book Labour and the Law makes the following propositions: (i)

The system of collective bargaining rests on a balance of the collective forces of management and organized labour. The contribution which the courts have made to the orderly development of collective labour relations has been infinistesimal. (ii) Collective bargaining is a process by which the terms of employment and conditions of service are determined by agreement between management and the union. In effect, ‘It is a business deal (which) determines the price of labour services and terms and conditions of labour's employment.’ (iii) The law governing labour relations is one of the central branches of law according to which a very large majority of people earn their living. Nonetheless, law is a secondary force in human relations, especially in labour relations. (iv) Law is a technique for regulation of social power. This is as true of labour law as it is for other aspects of any legal system. Labour law also seeks to lay down minimum standard of employment. It lays down norms by which basic conditions of labour are fulfilled such as maximum working hours, minimum safety conditions, minimum provisions for holidays and leave, protection for women and children from arduous labour, prohibition of children below certain age from employment, provisions for minimum standards of separation benefits and certain provision for old age.

III. SOCIAL JUSTICE AND LABOUR LAW The development of industrial law during the last decade and several decisions of the Supreme Court while dealing with industrial relations have emphasized the relevance, validity and significance of the doctrine of social justice. The concept of social justice is not narrow or one-sided or pedantic. Its sweep is comprehensive. It is founded on the basic ideal of socio-economic equality and its aim is to assist the removal of socio-economic disparities. Nevertheless, in dealing with industrial relations, it does not adopt a doctrinaire approach and refuses to yield blindly to abstract notions, but adopts a realistic and pragmatic approach. It therefore, endeavours to resolve the competing claims of employees by finding a solution which is just, fair and reasonable to both parties with the object of establishing harmonious relations between labour and management.2

A. Concept of Social Justice It is difficult to precisely define the meaning of social justice. It is a vague term. Indeed, in Muir Mills Case3, Justice Bhagwati felt that social justice is a very vague and indeterminate expression and that no clear cut definition can be laid down which may cover all situations. He, however, observed that ‘without embarking upon a discussion as to the exact connotation of the expression ‘Social Justice’, we may only observe that the concept of social justice does not emanate from the fanciful notions of any adjudicator, but must be founded on a more solid foundation.’

B. Social Justice and the Constitution of India The Constitution of India in the Preamble resolved to secure to all its citizens : Justice—social, economic and political. Therefore, the concept of social justice is not foreign to legal order. Social justice is the primary objective of the state as envisaged in our Constitution. Social justice is one of the aspirations of the Indian Constitution. In order to secure to all citizens social justice, the Indian Constitution guarantees several fundamental rights.

C. Application of Concept of Social Justice in Industrial Adjudication The application of the concept of social justice in the adjudication of industrial disputes is now well settled. However, there is a word of caution. Its application

may vary according to the individual presiding officer's view, which may be fanciful. Thus in Punjab National Bank v. Ram Kanwar4, the Supreme Court observed that social justice does not mean that reason and fairness must always yield to convenience of a party. The Court held that such one-sided or partial view is next of kin to caprice or humour. Social justice need not always be in favour of workers—there may be cases, whereby their own conduct or on account of clear or unambigous provisions in a statute, they may not be entitled to relief. In such cases, grant of relief would not be just or fair. The Supreme Court has applied the principles of social justice while upholding the workman’s right to equal pay for equal work, reinstatement in service in case of wrongful discharge or dismissal, payment of wages to temporary or daily rated employees at the rate payable to permanent employees and regularization and confirmation of casual and daily wages employees. The Court has also elevated the right to work, right to equal pay for equal work and right to get minimum wages as fundamental rights. These pronouncements of the Court are directed to secure the goal of social justice which has now attained the status of basic feature of industrial adjudication. A survey of decided cases reveals that courts have generally applied the doctrine of social justice in interpreting labour laws. However, there has been a conflict of opinion in the high courts and even in the Supreme Court on the question of application of the concept of social justice. In Central India Spinning and Weaving and Manufacturing Co case5, Justice Modholkar speaking for the Bombay High Court held that the concept of social justice ought not to be imported in interpreting the Industrial Disputes Act or other similar Acts. The same learned judge speaking for Supreme Court in Rai Sahab Ram Kanwar's Case6 held that tribunal has no jurisdiction to decide on the basis of its own concept of social justice. However, Justice Gajendragadkjar in J K Cotton & Spinning and Weawing Mills Case7 rejected the argument that the concept of social justice is irrelevant. He added that ‘the concept of social justice has now become such an integral part of industrial law that no one can suggest that industrial adjudication can or should ignore the claims of social justice in dealing with industrial disputes.’ He observed: The concept of social justice is not narrow, or one-sided, or pedantic, and not confined to industrial adjudication alone. Its sweep is comprehensive. It is founded on the basic ideal of socio-economic equality and its aim is to assist the removal of socio-economic disparities and inequalities; nevertheless, in

dealing with industrial matters, it does not adopt a doctrinaire approach and refuses to yield blindly to abstract notions, but adopts a realistic and pragmatic approach. It, therefore, endeavours to resolve the competiting claim of employers and employees by finding a solution which is just and fair to both parties with the object of establishing harmony between capital and labour, and good relationship. The ultimate object of industrial adjudication is to help the growth and progress of national economy, and it is with that ultimate object in view that industrial disputes are settled by industrial adjudication on principles of fair play and justice. In Harijinder Singh v. Punjab State Warehousing Corpn8, the Supreme Court has elaborately discussed the concept of social justice and its application. The Court observed: The preamble and various articles contained in Part IV of the Constitution promote social justice so that life of every individual becomes meaningful and he is able to live with human dignity. The concept of social justice engrafted in the Constitution consists of diverse principles essentially for the orderly growth and development of the personality of every citizen. Social justice is thus an integral part of justice in the generic sense. Justice is the genus, of which social justice is one species. Social justice is a dynamic device to mitigate the sufferings of the poor, weak, dalits, tribals and deprived sections of society and to elevate them to the level of equality to live a life with dignity of person. In other words, the aim of social justice is to attain substantial degree of social, economic and political equality, which is the legitimate expectation of every section of society. In a developing society like ours which is full of unbridgeable and ever-widening gaps of inequality in status and of opportunity, law is a catalyst to reach the ladder of justice. The philosophy of welfare state and social justice is amply reflected in large number of judgments of this Court, various high courts, national and state industrial tribunals involving interpretation of the provisions of the Industrial Disputes Act, Indian Factories Act, Payment of Wages Act, Minimum Wages Act, Payment of Bonus Act, Workmen's

Compensation Act, the Employees Insurance Act, the Employees Provident Fund and Miscellaneous Provisions Act and the Shops and Commercial Establishments Act enacted by different states. In Ramon Services (P) Ltd v. Subhash Kapoor,9 Justice R P Sethi, observed: ‘after independence, the concept of social justice has become a part of our legal system. This concepts gives meaning and significance to the democratic ways of life and of making the life dynamic. The concept of welfare State would remain in oblivion unless social justice is dispensed. Dispensation of social justice and achieving the goals set forth in the Constitution are not possible without the active, concerted and dynamic efforts made by the persons concerned with the justice dispensation system.’ In LIC of India v. Consumer Education and Research Centre,10 Justice K Ramaswamy observed that social justice is a device to ensure life to be meaningful and liveable with human dignity. The State is obliged to provide to workmen facilities to reach minimum standard of health, economic security and civilized living. The principle laid down by this law requires courts to ensure that a workman who has not been found guilty cannot be deprived of what he is entitled to get. Obviously, when a workman has been illegally deprived of his device then that is misconduct on the part of the employer and employer cannot possibly be permitted to deprive a person of what is due to him.

IV. PUBLIC INTEREST LITIGATION FOR ENFORCEMENT OF LABOUR LAWS The Supreme Court in S P Gupta v. Union of India, popularly known as the Transfer of Judges case11 formulated the doctrine of public interest litigation in the following words: Where a legal wrong or a legal injury is caused to a person or to a determinate class of persons by reason of violation of any constitutional or legal right or any burden is imposed in contravention of any constitutional or legal provision without authority of law or any such legal wrong or legal injury or illegal burden is threatened and such person or determinate class of persons is by reason of poverty, helplessness or disability or economically disadvantaged position, unable to approach the

court for relief, any member of the public can maintain an application for an appropriate direction or writ or order. The Court found the view that public interest litigations unnecessarily clog the dockets of the court and add to the already staggering arrears of cases pending for years and should be discouraged, to be a totally perverse one smacking of an elitist and status quo approach. On the contrary, the Court found that the doors of courts were open for vindicating the right of the rich and wellto-do, for the landlord and the gentry, for the wealthy and the affluent and held that those who have decried public interest litigation did not seem to realize that courts were not meant only for the business magnet and the industrial tycoon, but they existed also for the poor and the downtrodden. The Court accordingly treated the letter written to a judge to be a writ petition.

V. INTERNATIONAL LABOUR ORGANIZATION AND ITS INFLUENCE ON INDIAN LABOUR LAWS The International Labour Organization (ILO) has played a key role in promoting international labour standards. It was set up in 1919 under the Treaty of Versailles. India is a founder member of ILO. There are certain fundamental principles of the ILO that were laid down at the time of its inception. These principles are known as the Charter of Freedom of Labour. The main principles of ILO are as follows: • Labour is not a commodity. • Freedom of expression and of association are essential to sustained progress. • Poverty anywhere constitutes danger to prosperity everywhere. • The war against want requires to be carried on with unrelenting vigour within each nation and by continuance and concerted international effort in which the representatives of workers and employers, enjoying equal status with those of the governments, join with them in free discussion and democratic decision with a view to promotion of common welfare. The aforesaid principles were modified at the 26th session of ILO held in Philadelphia in 1944. It also adopted a Declaration that concerns with the aims and purposes of the organization. This Declaration is known as the Philadelphia

Charter. By 2008, ILO had adopted 190 conventions and 198 recommendations. India had ratified 42 of the 190 conventions and one protocol. The Constitution of India and labour legislation uphold all the fundamental principles envisaged in the 8 core international labour standards. It ratified 4 of the 8 core conventions of ILO. With regard to the others, India seeks to proceed with progressive implementation of the concerned standards and leave the formal ratification for consideration at a later stage when it becomes practicable. The ILO has influenced labour legislation in India. Most labour legislation has been enacted in conformity with ILO conventions. Today, the ILO stands as one of the specialized agencies of the United Nations with longer history than any of its sister organizations.

A Structure and Activities The ILO is a tripartite organization consisting of representatives of governments, employers and workers of the member-countries. There is parity of representation as between government and non-government groups and also between employers’ and workers’ groups. The structure of the organization has helped in welding together employers and workers in various countries (including India) into independent organizations. In our country, for a long time now the representatives of employers and workers have secured, through their respective constituencies, elective posts on the Governing Body of the ILO. The ILO operates through its (i) Governing Body; (ii) International Labour Office; and (iii) the International Labour Conference, which meets once a year to review the international labour scene.

B. Making of International Labour Standard The annual conference sets normative standards on important matters such as regulation of hours of work and weekly rest in industry, equal remuneration for equal work, abolition of forced labour, discrimination in employment, protection of workmen against sickness, disease and work-injury, regulation of minimum wages, prohibition of night work for women and young persons, recognition of the principle of freedom of association, organization of vocational and technical education, and many areas concerning labour management relations. The standards are evolved after a full debate in the Conference. Usually the standards are accepted after discussions in the Conference over two successive years. Agreed standards on a specified subject are then converted into an international

instrument, a ‘Convention’ or a ‘Recommendation’, each having a different degree of compulsion. A ‘Convention’ is binding on the member-state which ratifies it; a ‘Recommendation’ is intended as a guideline for national action.12

C. ILO Declaration on Fundamental Principles and Rights at Work The ILO declaration on Fundamental Principles and Rights at Work, adopted by the International Labour Conference in June 1998, declares inter alia that all member states, whether they have ratified the relevant conventions or not, have an obligation to respect, promote and realize the principles concerning the fundamental rights which are the subject of those conventions, namely: (a) freedom of association and the effective recognition of the right to collective bargaining; (b) elimination of all forms of forced or compulsory labour; (c) effective abolition of child labour; and elimination of discrimination in respect of employment and occupation.13 The primary goal of the ILO today is to promote opportunities for women and men to obtain decent and productive work in conditions of freedom, equity, security and human dignity. The goal is not just the creation of jobs but the creation of jobs of acceptable quality.14 The Government of India has ratified Convention 122 on Employment and Social Policy in 1998. Article 1 of the Convention lays down: 1. With a view to stimulating economic growth and development, raising levels of living, meeting manpower requirements, and overcoming unemployment and under employment, each member shall declare and pursue, as a major goal, an active policy designed to promote full, productive and freely chosen employment. 2. The said policy shall aim at ensuring that: (a) There is work for all who are available for and seeking work; (b) Such work is as productive as possible; (c) There is freedom of choice of employment and fullest possible opportunity for each worker to qualify for, and to use skill and the endowments in a job for which he is well suited, irrespective of race, colour, sex, religion, political opinion, national extraction or social origin. (d)

The said policy shall take due account of the state and the level of economic development and mutual relationships between employment objectives and other economic and social objectives, and shall be pursued by methods that are appropriate to national conditions and practices.15 The aforesaid convention was ratified by India at a time when unemployment levels were high. One, therefore, has to presume that the government is now committed to pursue an active policy designed to promote full, productive and freely chosen employment.16 From the commitments of the Government of India, it can be deduced that the following rights of workers have been recognized as inalienable and must, therefore, accrue to every worker under any system of labour laws and labour policy. These are: (a) Right to work of one's choice (b) Right against discrimination (c) Prohibition of child labour (d) Just and humane conditions of work (e) Right to social security (f) Protection of wages including right to guaranteed wages (g) Right to redressal of grievances (h) Right to organize and form trade unions and right to collective bargaining (i) Right to participation in management

VI. REVIEW OF LABOUR LAW BY THE FIRST NATIONAL COMMISSION ON LABOUR An important development in the arena of labour law and policy was setting up of the (first) National Commission on Labour in December, 1966 by the Government of India. The Commission was asked to undertake a comprehensive review of labour law. The Commission investigated the problems relating to labour and formulated a policy for the future. In the sphere of industrial relations, the Commission made the following recommendations:17 (i) Any sudden change replacing adjudication by a system of collective bargaining is neither called for nor practicable. The process has to be gradual. A beginning has to be made in the move towards collective

bargaining by declaring that it will acquire primacy in the procedure for settling industrial disputes. Conditions have to be created for promotion of collective bargaining. The most important among them is statutory recognition of a representative union as the sole bargaining agent. The place which strikes/lock-outs should have in the overall scheme of industrial relations needs to be defined; collective bargaining cannot exist without the right to strike/lockout. (ii) With the growth of collective bargaining and the general acceptance of recognition of representative unions and improved management attitudes, the ground will be cleared, at least to some extent, for wider acceptance of voluntary arbitration. (iii) It would be desirable to make recognition compulsory under a central law in all undertakings employing 100 or more workers or where the capital invested is above a stipulated size. A trade union seeking recognition as a bargaining agent from an individual employer should have a membership of at least 30 per cent of workers in the establishment. The minimum membership should be 25 per cent if recognition is sought for an industry in a local area. The proposed National/State Industrial Relations Commission will have the power to decide the representative character of a union, either by examination of membership records, or if it considers necessary, by holding an election by secret ballot open to all employees. (iv) The present arrangement for appointing ad hoc industrial tribunals should be discontinued. An Industrial Relations Commission (IRC) on a permanent basis should be set up at the centre and one in each state for settling ‘interest’ disputes. The IRC will be an authority independent of the executive. The main functions of the National/States IRCs will be (a) adjudication in industrial disputes; (b) conciliation; and (c) certification of unions as representative unions. (v) In essential industries/services, when collective bargaining fails and when the parties to the dispute do not agree to arbitration, the IRC shall adjudicate upon the dispute and its award shall be final and binding. It is unfortunate that most of the above recommendations have not been implemented.

VII. REVIEW OF LABOUR LAW BY THE SECOND NATIONAL COMMISSION ON LABOUR

The poor conditions of unorganized labour and the defective labour laws continued to engage public attention. On 11 January 1999, the Government of India announced its decision to set up the second National Commission on Labour to make suggestions to rationalize laws for workers in the organized sector and recommend an ‘umbrella’ law to protect labour in unorganized employments. The Commission was asked to take into account the emerging economic environment involving rapid technological changes, requiring response in terms of change in methods, timing and conditions of work, in industry, trade and services, globalization of economy, besides desirability to bring the existing laws in tune with further labour market needs and demands.18 While making a study, the Commission was also required to examine the minimum level of labour protection and welfare measures and the basic institutional framework for ensuring the same in the manner which is most conducive to a flexible labour market and adjustments necessary for furthering technological changes and economic growth. The (second) National Commission on Labour, which submitted its report to the Government of India on 29 June 2002, has made wide ranging recommendations on various facets of labour, viz., review of laws, social security, women and child labour, skill development, labour administration, unorganized sector, etc. Some of the significant recommendations are as under: (i) Existing set of labour laws should be broadly grouped into four or five sets of laws pertaining to: (i) industrial relations; (ii) wages; (iii) social security; (iv) safety; and (v) welfare and working conditions. The Commission is of the view that the coverage as well as the definition of the term ‘worker’ should be the same in all groups of laws, subject to the stipulation that social security benefits must be available to all employees including administrative, managerial, supervisory and others excluded from the category of workmen and those not treated as workmen. (ii) There is no need for different definitions of the term ‘appropriate government’. There must be a single definition of the term, applicable to all labour laws. The Central Government should be the ‘appropriate government’ in respect of Central Government establishments, railways, posts, telecommunications, major ports, light-houses, Food Corporation of India, Central Warehousing Corporation, banks (other than cooperative banks), insurance and financial institutions, mines, stock exchanges, shipping, security, printing presses, air transport industry, petroleum industry, atomic energy, space, broadcasting and television, defence establishments, cantonment boards, central social security institutions and

institutions such as those belonging to CSIR, ICAR, ICMR, NCERT and in respect of industrial disputes between the contractor and the contract labour engaged in these enterprises/establishments. In respect of all others, the concerned state government/union territory administrations should be the appropriate government. In case of dispute, the matter will be determined by the proposed National Labour Relations Commission. (iii) Central laws relating to the subject of labour relations are currently the Industrial Disputes Act, 1947, the Trade Unions Act, 1926 and the Industrial Employment (Standing Orders) Act, 1946. Mention must also be made of the Sales Promotion Employees (Conditions of Service) Act, 1976 and other specific acts governing industrial relations in particular trades or employments. There are state level legislations too on the subject. The provisions of all these laws be judiciously consolidated into a single law called the Labour Management Relation law or the law on Labour Management Relations. (iv) One of the most important steps that one needs to take in rationalizing and simplifying the existing labour laws is in the area of simple common definitions of terms that are in constant use; such terms include ‘worker’, ‘wages’ and ‘establishment’. By making the law applicable to an establishment employing 20 or more workers, irrespective of the nature of the activity in which the establishment is engaged, we have avoided the need to define ‘industry’. After examining all aspects of the question, we have come to the conclusion that persons engaged in domestic service are better covered under the proposed type of umbrella legislation, particularly in regard to wages, hours of work, working conditions, safety and social security. (v) In the case of socially essential services like water supply, medical services, sanitation, electricity and transport, when there is a dispute between employers and employees in an enterprise, and when the dispute is not settled through mutual negotiations, there may be a strike ballot as in other enterprises, and if the strike ballot shows that 51 per cent of workers are in favour of a strike, it should be taken that the strike has taken place, and the dispute must forthwith be referred to compulsory arbitration (by arbitrators from the panel of the Labour Relations Commission [LRC], or arbitrators agreed to by both sides).

VIII. APPROACHES OF INDIAN JUDICIARY AND

JUDICIAL LEGISLATION ON INDUSTRIAL RELATIONS A. Current Approaches of Indian Judiciary A survey of decided cases of the Supreme Court and high courts reveals a marked shift in their approaches to deal with labour issues. While prior to the 21st Century and more particularly between 1970 and 1990, the interests of workers were given prime consideration in dealing with labour cases; after 1990 and to be more specific, at the beginning of the 21st Century, the change in economic policy and globalization have influenced the decision makers. This shift in the approach of Indian judiciary may be seen in the judgments in the area of discipline and disciplinary procedure, voluntary and compulsory retirement, service contract and standing orders, compliance of natural justice, bandhs, demonstrations, retrenchment and on management’s prerogative during the pendency of proceedings before a labour tribunal. The courts evolved new norms to determine whether a person is a workman or not, and they have even exploded the judicial myth on the interpretation of the word ‘industry’ and workman. The Supreme Court felt that this was necessary in order to strike a balance between the earlier approach in the realm of industrial relations wherein only the interests of the workmen were focused on, and the current emphasis on ensuring fast industrial growth in the country. In several decisions, the Court noticed how discipline at the workplace/industrial undertaking received a setback. In view of the change in the economic policy of the country, the Court felt that it might not now be proper to allow employees to break discipline with impunity because we are governed by the rule of law. All action therefore, must be taken in accordance with the law. The aforesaid line of approach received a jolt in two decisions reported in 2010–2011. The Court19 noticed that ‘there had been a visible shift in the courts’ approach in dealing with cases involving the interpretation of social welfare legislations. According to the Court, globalization and liberalization are the raison d'être of the judicial process, and an impression has been created that the constitutional courts are no longer sympathetic towards the plight of industrial and unorganized workers. It was felt that in large number of cases, relief has been denied to the employees falling in the category of workmen, who are illegally retrenched from service by creating by-lanes and side-lanes in the jurisprudence developed by this Court in three decades. It added that the plea

raised by the public employer in such cases is that the initial employment/engagement of the workman/employee was contrary to some or the other statute or that reinstatement of the workman will put unbearable burden on the financial health of the establishment. It was also felt that the courts have readily accepted such plea unmindful of the accountability of the wrong doer and indirectly punished the tiny beneficiary of the wrong ignoring the fact that he may have continued in the employment for years together and that micro wages earned by him may be the only source of his livelihood.’ It was further felt that if a man is deprived of his livelihood, he is deprived of all his fundamental and constitutional rights and for him the goal of social and economic justice, equality of status and of opportunity, the freedoms enshrined in the Constitution remain illusory. Therefore, the approach of the courts must be compatible with the constitutional philosophy of which the directive principles of State policy constitute an integral part and justice due to the workman should not be denied by entertaining the specious and untenable grounds put forward by the employer—public or private.20 In 2011, the Supreme Court also deprecated the new technique of subterfuge adopted by some employers in recent years in order to deny the right of workmen under various labour statutes by showing that the concerned workmen are not their employees but are the employees/workmen of a contractor, or that they are merely daily wagers or short term or casual employees when in fact, they are doing the work of regular employees.21 The Court therefore, disapproved and even condemned such practices. It felt that globalization/liberalization cannot be at the cost of exploitation of workers22.

B. Judicial Legislation on Industrial Relations The Indian judiciary has made significant contribution in not only evolving new industrial jurisprudence but has also brought the following judicial legislations in the process of interpretation. 1. Regulation of management’s power to dismiss workers by laying down various norms 2. Termination of service after giving 3 months’ notice or wages in lieu thereof without assigning any reason—illegal 3. Automatic termination of service for absence for specific period under standing orders without following the principles of natural justice—not proper 4. Wages for the period of strike/lock-out under certain circumstances

Widened scope of retrenchment

6. 7.

Evolved triple test for determining the scope of industry Sexual harassment of women at work place by laying down law and procedure Representative union—to be determined by secret ballot (Food Corporation of India case) Absorption of contract labour—when contract is sham Closure of industries due to (i) Environmental pollution and (ii) Hazardous nature Justified and unjustified strikes and lock-outs Denial of minimum wages to be forced labour Child labour—abolition and social security scheme Bonded labour—rehabilitation, identification, abolition–enforcement Workers' participation in management (i) Winding up and (ii) Running sick industry Profit sharing–bonus — linked with productivity Rules of natural justice to be followed in domestic inquiry Enforcing code of discipline

8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18.

IX. LABOUR REFORMS: REVIEW OF LABOUR LAW Labour law, which seeks to regulate the relations between employers and their workmen, does not address several problems. Even though labour laws have been amended during the last few years, but it cannot be denied that they have become obsolete. Indeed, they suffer from various defects and shortcomings.

Thus, most labour legislations are not applicable to unorganized labour, which constitutes about 93 per cent of the labour force. Further, most labour legislation is more than five decades old. It is felt that our labour laws are overprotective, over reactive, fragmented, outdated and irrelevant and as such have created hurdles in achieving the target of fair labour practices. The emergence of globalization, liberalization and privatization has brought new challenges. There is therefore, mounting pressure to reform labour laws. In view of this, the second National Commission on Labour had, in its report, made some headway in removing the irritants and stumbling blocks. However, it is unfortunate that no positive steps have so far been taken to give legislative shape to the recommendations of the Commission. It is often contended by employers that labour laws place unreasonable restrictions on them to hire workmen and terminate their services and inhibit them in meeting global competition. They also claim that this deters them from opening of new businesses and discourages employment intensity. On the other hand, workers' organizations have opposed the dilution of job security provisions in the law since they feel that it would encourage exploitation of workers and deterioration in the quality of employment. Whatever may be the justification of managements and trade unions, there is a need to re-look at the existing provisions in view of the interests of workers and also the recent developments. The key areas of labour law reforms are as under: 1. Multiplicity of labour laws and the need for fewer labour legislations if not a single labour code There are about 165 legislations—both central and state to deal with labour. These are the most voluminous in the world. More laws mean less implementation if the inspection and enforcement machinery is limited. The first National Commission on Labour and National Labour Law Association favoured single labour code and even prepared a draft labour code. The second National Commission on Labour grouped the entire labour law into four or five categories. Be that as it may, it is better to have fewer labour laws, if not a single labour code and better enforcement. 2. Law relating to multiple definitions of same/similar terms under labour legislation to be eliminated (i) The Industrial Disputes Act, 1947 defines ‘workman’, the Factories Act defines ‘worker’ and the Employees' State Insurance Act, 1948 defines ‘employee’ in different ways. This creates confusion. In

order to bring uniformity, the term ‘worker’ should be uniformly adopted and defined as suggested by the second National Commission on Labour in all labour legislation. (ii) The expression ‘appropriate government’ has been differently defined in various labour legislations. In order to reduce conflict and bring uniformity, there should be a single definition. The 2010 amendment in the IDA has however, provided a guideline. (iii) The term ‘wage’ has been defined differently under the Minimum Wages Act, 1948, Payment of Wages Act, 1936, Payment of Gratuity Act, 1972 and the Industrial Disputes Act, 1947. A need has therefore, been felt to provide a single definition. Law relating to arena of interaction—vague The definition of ‘industry’ under the Industrial Disputes Act, 1947 and ‘establishment’ under the Industrial Employment (Standing Orders) Act, 1946, despite the judicial interpretation, is still unsettled and needs to be simplified. Law relating to salary limit—obsolete The salary limit provided under various labour legislations has become obsolete. Thus, the wage limit under the Payment of Wages Act, 1936 has now been fixed at ₹6,500 per month. Likewise, the 2010 amendment in the Industrial Disputes Act fixes the wage limit for workers doing supervisory work at ₹10,000 per month. On the contrary, there is no wage limit for persons doing technical/skilled work. Thus, even persons like a pilot drawing several lakhs per month would be a workman under the Industrial Disputes Act, but a supervisor drawing ₹10,000 or more per month would not be a workman. This is an area which requires review. Number of persons employed The minimum number of persons prescribed under various labour legislations including social security and minimum standard legislations need to be reviewed. Simplify and rationalize labour The substantive law and procedures prescribed under various labour legislations should be simplified and rationalized. Laws regulating strikes and lockouts These need to be reviewed as under: (i)

Minimum period of notice must be prescribed for strikes/lockouts

in non-public utility services. (ii) Secret ballot method for resorting to strikes may be considered. (iii) Penalties prescribed for illegal strikes/lockouts should be deterrent in nature. (iv) Just like go-slow, stay-in-strike should be treated as a serious misconduct. Notice of change under Section 9A of the Industrial Disputes Act, 1947 This needs to be reviewed, particularly where the employers expands the business or increases the strength of labour. (i)

Notice of Change—Mere Display of Notice not Sufficient In Management of Salem District Co-operative Milk Producers' Union Ltd v. Industrial Tribunal,23 the Madras High Court held that mere display of the notice on the notice board will not be sufficient. The notice must be in terms of the provisions of the Industrial Disputes Act and the Tamil Nadu Industrial Disputes Rules which, inter alia, stipulate that it must be exhibited in Tamil. (ii) Recovery of Payments towards Inadmissible Allowances and Incentives In Jossie v. Flag Officer Commanding-in-Chief,24 the Kerala High Court held that recovery of payment made towards inadmissible allowance made by mistake is not violation of Section 9A of Industrial Disputes Act, 1947. (iii) Transfer of Employees In Associated Cement Co. Ltd v. Cement Staff Union,25 the Bombay High Court held that transfer of an employee being an incident of service, there is no question of the order of transfer not being in violation of Section 9A of the Industrial Disputes Act, 1947. 9. Government's permission for retrenchment, lay-off and closure of enterprises The crucial issue is (i) whether the management employing 100 workers or more should seek prior approval of the appropriate government before lay-off, retrenchment or closure, and (ii) whether the existing limit of 100 workers should be raised to 300. 10. Problems of enforcement and compliance of labour laws The existing labour legislation does not fully address the problems of

enforcement. This is more evident in the unorganized sector. Quite apart from this, the enforcement process has failed to meet the intent of legislature. The penal provisions, particularly in case of illegal strikes/lockouts have remained only on paper. It is felt that it is better not to have a law which is respected more in breach than in its observance. It is further felt that so long as the cost of violation is less or negligible than the cost of compliance, the provisions of labour laws would remain on paper. 11. Recognition of trade unions A crucial issue in labour laws relates to recognition os trade unions. This is so because there is no provision in any central labour legislation for the recognition of trade unions by the employer. The basic issue is about the mode of determining the bargaining agent. The Federation of Trade Unions is divided over the issue of whether verification or secret ballot method should be adopted. No doubt, several legislative attempts have been made but till date, (except in some states) there is no central legislation to deal with recognition of trade unions. 12. National minimum wage The first National Commission on Labour recommended that national wage is not necessary because of wide variations due to socio-economic and demographic conditions not only in various states but also at the regional and district levels within the states. However, there is a need to examine whether there should be a national minimum wage for all scheduled employment. 13. Other areas for reform (i) Social security for unorganized workers, particularly health, maternity benefits, disablement benefits and old age benefits even after the enactment of the Unorganized Worker’s Social Security Act, 2008. (ii) Contract labour (iii) Inter-state migrant workmen (iv) Child labour (v) Minimum standards of employment for all workers (vi) Application and extension of Equal Remuneration Act, 1976

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

AIR 1953 SC 58. See J K Cotton Spining & Weaving Mills v. Labour Appellate Tribunal, AIR 1964 SC 737. AIR 1995 SC 170. (1957) ILLJ 542. Central India Spg. Wvg & Mfg Co. Ltd v. Industrial Court, (1959) ILLJ 468. (1963) 2 LLJ 65. AIR 1964 SC 737. (2010) 3 SCC 192. para 19. (2000) 1 SCC 118. (1995) 5 SCC 482. AIR 1982 SC 149. See Govt. of India, Report of the First National Commission on Labour (1968), 473. Govt. of India, Report of the Second National Commission on Labour (2002), 35. Ibid. Govt. of India, Report of the Second National Commission on Labour (2002), 35. Ibid. Govt. of India, Report of the Second National Commission on Labour (2002), 35. See Hindustan Times, January 12, 1999, New Delhi. Harjinder Singh v. Punjab State Warehousing Corporation, (2010) 3 SCC 192. Ibid. Bhilwara Dugdh Utpadak Sahkari S Ltd v. Vinod Kumar Sharma, 2011 LLR 1079 (SC). Ibid. 2010 LLR 435. 2011 LLR 1168. 2010 LLR 162.

CHAPTER

2 Industrial Relations: An Overview I. THE CONTEXTUAL FRAMEWORK Industrial relations is a dynamic socio-economic process. It is a ‘designation of a whole field of relationships that exist because of the necessary collaboration of men and women in the employment processes of industry’.1 It is not the cause but an effect of social, political and economic forces.2 It has two faces like a coin—cooperation and conflict.3 The relationship, to use Hegal’s expression, undergoes change from thesis to antithesis and then to synthesis. Thus, the relationship starting with cooperation soon changes into conflict and after its resolution, again changes into cooperation.4 This changing process becomes a continuous feature in an industrial system. The relationship between labour and management is based on mutual adjustment of interests and goals.5 It depends upon economic, social and psychological satisfaction of the parties. Higher the satisfaction, healthier the relationship. In practice it is, however, found that labour and capital constantly strive to maximize their pretended values by applying resources to institutions. In this effort they are influenced by and are influencing others. Both of them try to augment their respective income and improve their power position. The major issues involved in the industrial relations process are terms of employment such as wages, dearness allowances, bonus, fringe benefits, working conditions, leave, working hours, health, safety and welfare, nonemployment, job security, personnel issues such as discipline, promotional opportunities and recognition of trade unions. However, in view of sharply

divided and vociferously pressed rival claims, the objectives of labour and management are not amenable to easy reconciliation. This is all the more so because the resources are limited. Be that as it may, the means adopted to achieve the objectives which vary from simple negotiation to economic warfare adversely affect the community's interest in maintaining an uninterrupted and high level of production. Further, in a country like India where labour is neither adequately nor properly organized, unqualified acceptance of the doctrine of ‘free enterprise’, particularly between labour and management, strengthens the bargaining position of the already powerful management. It is apparent that the State, with its ever-increasing emphasis on welfare aspect of a governmental activity, cannot remain a silent and helpless spectator in the economic warfare. The legislative task of balancing the conflicting interest in the arena of labour-management relations proves to be an extremely difficult one, in view of mutually conflicting interests of labour and management. The substantive issues of industrial relations are of perennial nature and thus, there can never be a ‘solution for all times to come.’6 There can only be broad norms and guidelines as criteria in dealing with issues of industrial relations.7 The law plays an important role in shaping the structure of industrial relations.8 It represents the foundation from which the present system and procedure flows to deal with the problems of industrial relations.9

II. DIMENSIONS OF THE PROBLEMS OF INDUSTRIAL RELATIONS India is primarily an agricultural country. As per the Census of India, 2001, the total employment in both organized and unorganized sector in the country was of the order of 40.22 crore. Out of this, about 2.65 crore were in the organized sector and the balance 37.57 crore in the unorganized sector.10 Out of 37.57 crore workers in the unorganized sector, 23.7 crore workers were employed in agriculture sector, 1.7 crore in construction, 4.1 crore in manufacturing activities and 3.7 crore each in trade and transport, communication and services. The workers in the unorganized sector fall in various categories but a large number of them are home-based workers engaged in occupations like beedi rolling, agarbatti making, pappad making, tailoring, zari and embroidery work. However, the largest chunk of unorganized labour, namely, 60 per cent being agricultural workers and cultivators including small and marginal farmers, who are badly in need of legal/social protection, have been left out. Be that as it may,

the importance of industry cannot be minimized. Said J L Nehru: The alternative (to industrialization) is to remain backward, underdeveloped, poverty-stricken and a weak country. We cannot even retain our freedom without industrial growth.11 According to a survey conducted by the National Sample Survey Organization in the year 2004–2005, out of 45.9 crore which constitute the total labour force, 43.3 crore persons are engaged in unorganized labour which constitutes 93 per cent of work force. They are denied job security, social security and other benefits. Most of the labour force, particularly in the unorganized sector, is unskilled, underemployed, self-employed, casual and unprotected. Rural development is essential for upgrading the living conditions of the overwhelming majority of people and providing minimal economic sustenance to the poverty-stricken sections of the community. But, industrial development is necessary for affluence and for bringing the benefit of scientific and technological progress to all sections of the community. Out of the total of 40.22 crore in terms of 2001 census and 45.9 crore in terms of estimate of National Sample Survey 2004–2005, 12.7 crore were cultivators, 10.6 crore were agricultural labourers, 1.6 crore were in household industries and 15.1 crore were other workers. Most labour legislation is not applicable to them. However, an important recent initiative taken by the Ministry of Labour and Employment to safeguard the interest of unorganized workers has been the enactment of the Unorganized Workers’ Social Security Act, 2008. The Act provides for constitution of National Social Security Board which will recommend formulation of social security schemes for unorganized workers from time to time. Accordingly, the National Board was constituted in 2009 which recommended that the social security schemes viz; Swavalamban Yojna, Rashtriya Swasthya Bima Yojana (RSBY) providing for health insurance, Janashree Bima Yojana (JBY) providing death and disability cover and Indira Gandhi National Old Age Pension Scheme (IGNOAPS) providing for old age pension which may be extended to building and other construction workers, MNREGA workers, Asha workers, Anganwadi workers and helpers, porters/coolies/gangmen and casual and daily wagers.

III. INDUSTRIAL UNREST AND WORK-STOPPAGES The importance of sustained industrial production underlines the need of

avoiding work-stoppages and loss of production. The economics of workstoppages may be recapitulated. Between 1921 and 2010, India lost about 8.62 million12 man-days in work-stoppages caused by industrial disputes between workmen and employers. The alarming magnitude of the statistical data is even more awe-inspiring considering that in the 2001 census, 402.3 million workers were at a standstill for about 5 days. If one were to add the secondary and tertiary effects of work stoppages, the figures would be gigantic. Thus, it is said that India loses the highest number of man-days and has the highest rate of absenteeism. Period-wise details given in Table 2.1 below: Table 2.1: Number of Workers and Man-days Lost

Source. The estimate is based on data given in Appendix II of V B Kaushik, Indian Trade Unions: A Survey, (1966) p. 322, for the period 1921–46, Table XXV of Indian Labour Year Book, 1950–51, for the period 1947–50, Table 10.1 of the Indian Labour Statistics, for the period 1951–60, Indian Labour Statistics, 1976, p. 277, for the period 1960–89, Handbook of Labour Statistics of 1992 and Annual Report 1998–99, 2004–05 of the Ministry of Labour, Govt. of India (1999) 27, Indian Labour Year Book, 2007 (2009) Indian Labour Journal (March, 2011) p. 933, Labour Law Reporter, p. 357.

IV. UNEMPLOYMENT AND UNDEREMPLOYMENT AS BARRIERS TO IMPROVING INDUSTRIAL RELATIONS Unemployment and underemployment are the most important economic evils in a welfare state. India is no exception. In India, one-sixth of the total population of the country is either unemployed or chronically underemployed. As per the Government of India report,13 upto the end of June, 2009, 1.07 lakh pensons had

been placed on employment exchange. The total number of jobseekers by June, 2009 were about 2 lakh.14 These are the phenomena of Indian industries that have affected to a considerable extent the standard of living and have also created disparity in the working class. They have hampered the growth of the labour movement and trade unions. Political parties may take advantage of the unemployed millions and divert them from the search for gainful employment towards unproductive political actions. Further, underutilization of human resources in the agricultural sector is likely to divert agriculturist section of jobseekers to industrial sectors. Unemployment poses a serious threat to development programmes. Government planners should be sensitive to the present problem of unemployment. Labour law can be modelled or remodelled to implement law, policies and programmes to provide relief to unemployed.

V. OTHER DIFFICULTIES IN HEALTHY GROWTH OF INDUSTRIAL RELATIONS THROUGH LABOUR LAW POLICY 1.

Low wages: Discontent amongst industrial workers revolves round the question of wages. Low wages figure prominently both in industrial and agricultural sectors. 2. Ignorance and illiteracy: Another malady of Indian workers is illiteracy. Out of 2.81 million workers employed in tea plantations, mines, jute, cotton textiles, iron, and steel, 2.08 million15 workers are illiterate. The workers do not fully realize the social and economic implications of the modern industrial system and evils arising therefrom and, therefore, are less likely to insist on reforms. Lack of education among industrial workers has also given rise to the evolution of outside leadership. Access to regular employment is mainly limited to better educated workforce. Only 4 per cent of illiterate workforce has access to regular employment. In contrast, approximately 40 per cent of them are casual labourers. Only 9 per cent workers with primary education have access to regular employment while an overwhelming 35 per cent of them are casual labourers.16 The table below tabulates the percentage distribution of workers with different levels of education by employment status in 2004–05. Table 2.2: Education Levels of Workers

Source: Unit level data of NSSO, Employment & Unemployment Survey, 2004–05

Similarly, workers with higher educational achievements are likely to get higher wages as compared to those who are less educated. Again, as in case of access to regular employment, wages increase significantly only after certain thresholds of educational status (say secondary level) are reached both in rural as well as urban areas. In rural and urban areas, there is not much difference in wages of illiterates and of those up to primary level of education. Even middle level of education brings marginal difference in daily earnings. Wages increase significantly only after minimum secondary level of education.17 3. Heterogeneity: Another characteristic of Indian labour is its heterogeneity. India is ‘a vast country where customs and traditions differ considerably from one part to another. There are distinctions based on caste, creed and religion and provincial jealousy (where residents of one state look down upon residents of another state). In spite of the provisions in the Constitution that there would be no distinction on the basis of caste, creed, etc., there is no denying that these vices are widely prevalent.18 The effect of this is that workers do not unite for better conditions inter se and for reform. 4. Absenteeism: Absenteeism has been a cause of great concern in most of the organizations in India. There is no hard and fast rule to deal with this problem. Industry-wise and state-wise, absenteeism rate, i.e., percentage of man-days lost due to absence to the number of man-days scheduled to work were 10.01 and 8.96 respectively during 2004.19 However, it is certain that it requires a great deal of expertise to effectively bring down the cases of absenteeism. Disciplining is, of course, the last resort to curb and control absenteeism but now with advancement of behavioural science, some psychological

methods have also proved to be very useful which is known as human relations approach. Women workers: Employment of women in industrial establishments is common in almost all countries—developed and developing. India is no exception. Special provisions of labour law exist to deal with the special problems of women workers employed in factories, mines, plantations and other industrial establishments. Women constitute a significant part of the work force in India. According to 2001 census, the total number of women in the country was 494.82 million out of the total population of 1,025.25 million. This means women accounted for 48.26 per cent of the total population. Employment of women in the organized sector (both public and private as on 31 March 2006 was 5.12 million which constituted 19 per cent of the total organized sector employment in the country).20 According to 2001 census, out of 127.73 million cultivators, only 41.89 million constituted female cultivators. Out of the agricultural labourers of 106.77 million in the same year, women agricultural labourers constituted 49.44 million. In case of agricultural labourers, there is parity between men and women.21 Table 2.3: Demographic Profile of Indian Workman

Source: Govt. of India, Indian Labour Year Book 2007 (2009) p 10

The employment of women workers in modern industrial system has given rise to several problems. First, a set of major social evils involved in the employment of women is widespread disorganization of family life. The lack of domestic care of the development of a child’s personality may continue even in his adult life. The increasing number of juvenile delinquents, stillborn children, abortions, morbidity of women, abnormal pregnancies and premature births are clear reflections of employment of women.22 ‘Second, the economic problem involved in industrial employment of women is in no way less significant. The inadequacy of family income and the desire to supplement the meagre family income23 compels women workers to work in industry. But employment in such an establishment does not provide them adequate wages. They are generally placed either in lower jobs or in traditional jobs which carry lower salaries and are not generally given higher posts. Third, ‘equal pay for equal work’ for both men and women has not been fully implemented and despite legislation, there is disparity of pay between men and women. Fourth, the employment of women in industry creates a variety of other problems such as hours of work (particularly during night), overtime, health, safety, welfare and maternity leave. Fifth, the legal protection afforded to women workers is also inadequate and involves problems of inadequate inspecting staff. Sixth, working women face the problem of sexual harassment for which norms have been laid down by the Supreme Court for prevention and regulation.24 6. Child labour: Another major problem of industrial relations is that of child labour. It is a common and serious problem for the country. It ultimately affects the personality and creativity of children. Data regarding the extent of employment of child labour are inadequate. According to the 2001 census, the estimated figure of working children was 12.6 million.25 This figure rose to 17.02 million according to the estimates of the 43rd National Sample Survey conducted in 1987–88. However, the incidence of child labour in India has declined from around 5 per cent in 1993–94 is

approximately 3 per cent in 2004–05.26 The evil of employment of children in agricultural and industrial sectors in India is a product of economic, social and, among others, inadequate legislative measures. Social evils involved in the employment of children are widespread illiteracy resulting in lack of development of child’s personality which may continue even in his adult life and negligence and indifference of the society towards the question of child labour.27 There is also lack of proper appreciation on the part of parents as to how continuance of child education would benefit his employment prospects and improve the standard of living.28 The economic problems involved in the employment of children are in no way less significant. Poverty resulting in inadequate family income and the desire to supplement it compels children to work. Indeed, the parents of low income groups like artisans cannot afford to educate their wards even if education is free. For them, an uneducated child is an asset; desire to be educated becomes a double liability because of: (a) loss of earning if the child does not work; and (b) expenditure on education, howsoever, small.29 Thus, the economic evils have not only deprived children at work from education but also led to high infant mortality, morbidity and malnutrition, particularly in weaker sections of the society in urban areas. The indifference of legislators to provide adequate legislation to regulate employment of children has failed to minimize the growth of child labour. The socio-legal problems involved in the employment of children in agriculture and industries are: (a) is it feasible to abolish child labour particularly of those: (i) who are orphans, destitutes, neglected, and abandoned children; (ii) children who have to work for livelihood; (iii) children belonging to migrant families; and (iv) handicapped children? If not, what should be done mediately and immediately (b) Should child labour be banned in hazardous employment? If so, what are the alternatives? (c) What should be the minimum age for different kinds of employment? (d) What should be the duration of their work including rest interval? Is it desirable to adjust the working hours in such a manner as to provide for schooling of children? (e) What privileges should be afforded to them in matters of leave and holidays? (f) What protection should be afforded to them in matters of health, safety and welfare? The legislature has met the first problem by providing certain minimum standards of age, physical fitness30 and sometimes educational attainments. The second problem has also been dealt with by the legislature by prohibiting

employment in certain establishments or part of establishments.31 The third problem has been met by prohibiting employment of women and children in certain dangerous work.32 The rest of the problems have been met by the legislature by imposing various restrictions on the conditions of work such as limited hours of work, provisions for holidays, rest intervals, leave, health, safety and welfare amenities. India has been following a proactive policy in the matter of tackling the problem of child labour by undertaking constitutional, statutory and developmental measures that are required for its elimination. The recently enacted Right of Children to Free and Compulsory Education Act, which came into effect from 1 April, 2011 is a major initiative taken by the government in this direction. Steps have been initiated to realign National Child Labour Policy with the provisions of the Right to Education Act. Under the National Child Labour Policy, 100 National Child Labour Projects (NCLPs) are in operation for rehabilitation of about 2.11 lakh working children. A major activity undertaken under the NCLP is the establishment of special schools to provide non-formal education,33 vocational training, supplementary nutrition, stipend, health care, etc., to children withdrawn from employment. So far, 1.87 lakh children from special schools of NCLPs have been mainstreamed into formal education system. The target is to eliminate child labour in a sequential manner, beginning with its elimination from hazardous occupations through a determined move towards its complete elimination from other occupations. Besides, a large number of NGOs are working for elimination of child labour under the grant-inaid scheme.34 Apart from continuing the existing 100 NCLPs during the Tenth Plan, government has approved setting up of additional 150 NCLPs in child labour endemic districts during the 10th Plan. The expanded scheme in additional 50 districts has already been launched in January, 2004 and states have been asked to set up NCLPs in these identified 50 districts. In the remaining 100 districts, the scheme would be launched after additional 100 districts are identified on the basis of the 2001 census report which is in process. Government has also launched the INDOUS (INDUS) Child Labour Project on 16 February 2004 during the visit of Mr Arnold Levine, Deputy Undersecretary, US Department of Labour and Mr Kari Tapiola, Executive Director, International Labour Organization to India.35

VI. SCOPE AND CONCEPT OF INDUSTRIAL

RELATIONS Industrial relations deal with the relationship between labour 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 exchanges and also the role of the state in these relations. Explaining the concept of industrial relations, R A Lester observed: It involves attempt to workable solutions between conflicting objectives and values—between incentive and economic security, between discipline and industrial democracy, between authority and freedom and between bargaining and cooperation. According to the Encyclopedia Britannica, ‘the concept of industrial relations has been extended to denote the relations of the state with employers, workers and their organizations’. The International Labour Organization (ILO), while dealing with industrial relations, states that they deal with either the relationship between the State and employers and workers’ organization or between the occupational organizations themselves. The significance of industrial relations is aptly described by the (First) National Commission on Labour (1969) as follows: A quest for industrial harmony is indispensable when a country plans to make economic progress. Economic progress is bound up with industrial harmony for the simple reason that industrial harmony leads to more cooperation between employers and employees which results in more productivity and thereby contributes to all-round prosperity of the country. Healthy industrial relations on which industrial harmony depends cannot, therefore, be regarded as a matter in which employers and employees are concerned. It is of vital significance for the community as a whole. The scope of industrial relations varies from time to time and place to place. According to Professor Richardson, the scope of industrial relations includes: ‘How people get on together at their work, what difficulties arise between them, how their relations including wages and working conditions are regulated, and what organizations are set up for the protection of different interests.’

VII. INDUSTRIAL RELATIONS VIS-A-VIS HUMAN RELATIONS MANAGEMENT Industrial relations are basically a problem of human relations, and are influenced, if not conditioned, by all the complex circumstances that affect the latter. While the apparent causes of good or bad labour management relations may not be difficult to classify, the real causes underlying outward and visible signs, over which there is seldom any unanimity, have their roots in historical, political, socio-economic factors and depend upon attitudes of workers and employers. Many times, work-stoppages which can be apparently ascribed to some simple demand, namely, economic or personnel, are found, on a deeper examination, to have complex roots in the social and cultural attitudes of the worker involved. At times, though strikes take place because of certain economic demands, harmonious relations are not necessarily restored even after the monetary benefits demanded are granted to workers. On the contrary, it is also possible that even without the apparent demand being satisfied or conceded, good relations are restored once the deeper cause, be it political, social or economic is properly tackled. A change in the leadership in the workers' union or a change in the management may radically alter the basic relationship between the management and the workers. As such, a particular state of industrial relations cannot be viewed in isolation from the political, social and economic characteristics obtaining therein nor the remedies to correct certain situations developed without giving due consideration to such factors.36

VIII. OBJECTIVES OF INDUSTRIAL RELATIONS 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. Nair and Nair citing Kirkaldy (1947), state that there are four objectives for industrial relations: (i) To improve economic conditions of workers; (ii) For state control on industries for regulating production and promoting harmonious industrial relations; (iii) For socialization or rationalization of industries by making state itself a major employer;

(iv)

For vesting of the proprietary interest of the workers in the industries in which they are employed. 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. With a view to optimizing the interests of the employer and those of employees, necessary steps need be taken which may cover wages and salary administration, career prospects inclusive of planning and promotion, retirement and medical benefits, discipline and redressal of grievances, training and development, counselling, workers’ compensation and other related issues such as insurance. (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 Another focus of labour management relations are health, safety and welfare of workers. (iii) Industrial peace and productivity: One of the most important object of industrial relations is to maintain industrial peace and harmony and, thereby, increase productivity. It depends on the quality of unionmanagement relations at workplaces.

IX. ROLE OF THE STATE IN INDUSTRIAL RELATIONS In the sphere of industrial relations, the state cannot remain a silent spectator. It has to play a persuasive and sometimes coercive role in regulating industrial relations in so far as they concern collective bargaining and the consequent direct action which either party may resort to for the realization of its claims. The state's anxiety about work stoppages arises because of two factors: (i) the impact on the community by way of inconveniences inflicted by interruption in

supply of essential goods/services; and (ii) social cost to the parties themselves in the form of loss of wages/production. It has, therefore, a special interest in the methods chosen by the parties for regulation of their mutual relations. For instance, adoption of collective bargaining will require well-organized unions and employers’ associations. The state, when it moves towards this goal, takes upon itself the task of formulating rules for maintenance of discipline, social justice, labour welfare and peace and harmony. It may intervene through conciliation process or compulsory adjudications. In the process, it will have to define permissible area of intervention. As a corollary to its role in maintaining peace, the state has provided for conciliation and adjudication machinery to settle industrial disputes under the Industrial Disputes Act, 1947. This can be best performed either by creating conditions in which adjudication would succeed in preference to strife or by compelling the parties to accept direct intervention of the state in public interest. In either case, better results are achieved where the existence of the third party is not overtly felt. Quite apart from the above roles played by the state, there are others which have a special significance in our context. The first is that of the state as an employer, which has two aspects, i.e., direct employment of labour by the state and employment in industrial corporations constituted by the state. Handling of industrial relations in the case of its own employees, to whom all legislation framed for industry is applicable, falls in this category. This function of the state as an employer has been there over a very long period; it has been there even prior to Independence. To this was added another when, as a matter of policy, it was decided to operate a mixed economy wherein industries were to be run by both private entrepreneurs and the state. The role of the state in these matters has been watched with great interest in recent years. The policy statements in this regard show that as an employer, the state binds itself to the rules which it frames for private employers. Where standards of good employment are disparate, the state seeks to set standards with a view to influencing employers in the private sector. While this is the policy, in practice, it so happens that there is a fair amount of interaction between what the employers do for their employees in the two sectors. And this interaction is influenced by the new consciousness among the workers and ease of communication within the working class.

X. CHANGING DIMENSIONS OF INDUSTRIAL

RELATIONS IN INDIA Globalization, liberalization and privatization have brought new market imperatives. The traditional industrialization system is under unprecedented pressure because it is unable to meet this situation. It is felt that a market determined industrial relations may meet the challenges of the market. Some of the key features are given below: (i)

(ii)

(iii) (iv) (v) (vi)

(vii)

(viii)

The institution of trade union is becoming weaker. Employers, despite the provisions of unfair labour practice under the Industrial Disputes Act, 1947, are discouraging the formation of unions and promoting nonunionism. In IT, SEZ and several private industries, there are hardly any trade unions. The institution of collective bargaining is being decentralized and replaced by unit bargaining, individual bargaining, commercial bargaining and collaborative bargaining. Disinvestment/privatization and VRS are almost accepted facts of industrial relations. Changing pattern of compensation/rewards management—fixed/assured time rate wages are replaced by variable/performance-based wages. Social security and employment guarantee schemes are being provided for unorganized/agricultural workers. Pro-labour attitude of government is being diluted. This is evident from the shift in government’s attitude of non-interference and liberally granting permission to lay-off, retrench or close the undertaking under Chapter V-B. The establishment of ‘special economic zones’ is another area which shows the attitude of the government towards emerging business scenario. The attitude of judiciary is also changing. The recent judgements of the Supreme Court on contract labour, discipline and disciplinary action, absenteeism and strikes show that it looks at the problem from the viewpoint of economic reforms and global competition.

XI. IMPACT OF GLOBALIZATION AND THE WTO REGIME ON INDUSTRIAL RELATIONS

The first casualty of globalization is the number of workers employed. Due to global competition, most industries want to reduce costs and be competitive. They have introduced plans like Voluntary Retirement Scheme (VRS) as well as retrenchment and closures both in the organized and the unorganized sectors. For instance, nationalized banks have introduced VRS for their staff and so far, about 99,000 workers have opted for retirement under this scheme. Some employers are offering lower wages to the workforce as a condition for the reopening of closed industries. Faced with the problems of unemployment, workmen are frequently accepting such offers. Under the WTO regime, labour economic policies seem to be resulting in the closure or disappearance of many Indian companies, especially, those engaged in consumer goods. The attitude of the government, particularly of the Central Government, towards workers and employers seems to have undergone a change. Now, permissions for closure or retrenchment are more easily granted. The closure of industrial units and cases of bankruptcy are normal features in developing countries all over the world (including India). With their limited resources, they are unable to provide alternative employment opportunities. Industrial sickness and its resultant consequences have to be handled carefully to see that its adverse impacts falls least on workers and on society. The major issue that emerges is how the industrial units which are sick or closed under liquidation, or due to world wide economic crisis need to be dealt with in India, particularly the displaced workers and locked assets of these units.

XII. FIVE-YEAR PLANS AND INDUSTRIAL RELATIONS Immediately after India became a Sovereign Democratic Republic, the concept of planned economic development through planning was accepted and the Planning Commission was set up in March 1950. The advent of the era of planning brought in its wake a set of new problems as well as popular expectation.37 Eleven plans have been completed and the eleventh is continuing. The 11 successive plans laid down certain basic concepts and principles

regarding: (i) workers' right of association and organization (ii) the machinery and procedure for settlement of disputes and (iii) the implementation of awards and agreements. The plans have had two distinctive objectives in regard to industrial relations: (i) the avoidance of industrial disputes and creation of machinery for settlement of industrial disputes and (ii) the creation of necessary atmosphere for the development of labour management co-operation and harmonious relations through the adoption of suitable institutional frame-work.38 The First Five-Year Plan (1951–52—1955–56) paid considerable attention to labour problems including strikes and lockouts, as well as popular expectation of the working class. The Plan recognized workers’ right to strike and observed: In an economy organized on the basis of competition, private monopoly or private profits, the workers' right to have recourse to peaceful direct action for the defence of their rights and the improvement of their conditions cannot be denied and should not be curtailed unduly.39 But, in any emergency and in the case of services essential to the safety and well-being of the community, recourse to a strike or lockout may be suspended or withheld on the condition that in all such cases, provision is made for just settlement of the parties' claim.40 Reiterating the aforesaid line of thinking, the planners observed: Experience of many years have demonstrated that in majority of labour struggles, owing to ignorance and mistakes of the workers and their organizational and bargaining weaknesses, they have failed to gain their ends irrespective of the merits of the disputes.41 While accepting the wisdom of holding the balance fairly between capital and labour, the planners conceded that the employer usually possesses superior strength which may become a source of injustice and oppression unless he is imbibed with high sense of fairness and uses his advantage with scrupulous regard to the rights and interests of others. It, accordingly, pleaded for intervention to strike the balance: The community has, therefore, to intervene for redressing the balance in favour of the weaker party to assure just treatment for all concerned. Legal provisions relating to trade unions and

industrial disputes have to be framed and interpreted in relation of these objectives.42 The Second Five-Year Plan envisaged a marked shift in industrial relations policy consequent on the acceptance of the socialistic pattern of society and the goal of planning. The plan stated that greater stress should be laid on the creation of industrial democracy in which a worker should realize that he is a part and parcel of the industrial apparatus that is to usher in socialistic pattern of society. The planners emphasized mutual negotiations as an effective mode of settling industrial disputes. Among the other recommendations in the plan were demarcation of functions between works committee and increased association of labour unions with management and provision for recognition of trade unions. Keeping in mind the desirability of having one union to one industry, the plan also suggested that the number of outsiders who could serve as union officebearers be further restricted. Thus, the plan pleaded for maintenance of industrial peace by preventing strikes and lockouts. The Third Five-Year Plan did not suggest any major change in policy. It placed emphasis on collective bargaining and on mutual agreements for industrial relations as well as workers' well-being. It also emphasized the economic and social aspects of industrial peace and elaborated the concept that workers and management were partners in a joint endeavour to achieve common ends. The voluntary arrangement agreed to in Second Plan was strengthened by the Industrial Truce Resolution, 1962. The Fourth Five-Year Plan also stressed on the need for more effective implementation of labour administration for better enforcement of labour laws. The Fifth Five-Year Plan highlighted that inadequacies of management and bad industrial relations are among the most important factors for delay and inefficiency in implementation of projects and for under-utilization of capacity. It accordingly pleaded: It is imperative to bring about a marked improvement in the operational efficiency of the public sector as also of the private sector. Important suggestions given in the Fifth Plan are as follows: Some unification of the trade union movement is necessary even for smooth functioning of modern capitalist society, let alone for building a socialist society. Only through this way can industrial relations be put on an orderly basis, through collective

bargaining and other devices. Among the other suggestions of the Fifth Five-Year Plan were professionalization of management and active association of the working class. The Sixth Five-Year Plan did not introduce any major change in the industrial relations policy. However, there are two aspects which received the planners’ attention. First, it stressed the need for simplification of procedure for settlement of industrial disputes in order to ensure ‘quick justice’ to workers and a feeling of certainty among employers. Second, it emphasized the need for increasing the number of existing labour courts and tribunals for speedy settlement of industrial disputes. However, the nature and design of the new machinery has not been spelt out. Realizing the importance of the system of industrial relations machinery, the Sixth Plan pleaded that the industrial relations machinery should be strengthened both in Centre and states for anticipating labour problems and taking preventive measure to avert work-stoppages.43 The Seventh Five-Year Plan laid considerable emphasis on measures designed to improve labour management relations without which the realization of developmental objectives of the plan would be difficult. Viewed from this perspective, increases in industrial production and productivity are attainable only in an atmosphere free from industrial conflicts of any kind.44 For this discipline and motivation for work, harmonious industrial relations, participation of workers and healthy working climate are sine quo non. The plan highlighted the need for creating harmonious industrial relations by adopting several measures such as: (i) there should be proper management of industrial relations; (ii) there should be identification of responsibilities of the unions and the employers; and (iii) inter-union and intra-union rivalries should be avoided. Further, the plan suggested that some policy for tackling industrial sickness in future has to be evolved while protecting the interest of labour. Moreover, the plan laid emphasis on upgradation of technology, modernization of equipment, better utilization of assets and promotion of efficiency.45 The Eighth Five-Year Plan paid considerable attention to the working conditions, welfare and social security measures and enforcement of labour laws for unorganized labour, women and child labour. The plan stated that emphasis should be laid ‘on skill formation and development, strengthening and modernization of employment, service, promotion of industrial and mines safety, workers' education, promotion of self-employment, enforcement of labour laws, promotion of a healthy industrial relations situation and encouragement of workers' participation in management.’46 The Ninth Five-Year Plan stressed on the need to create conditions for

improvement of labour productivity and provisions for social security to supplement the operation of the labour market. The resources would be directed through plan programmes towards skill formation and development, exchange of information on job opportunities, monitoring of working conditions, creation of industrial harmony through an infrastructure for healthy industrial relations and insurance against disease and unemployment for the workers and their families. The plan envisages that the trade unions will contribute to promoting changes in the work culture. The plan also stated that action will be taken to: (a) identify the laws which are no longer needed and repeal them; (b) identify the laws which are in harmony with the concept of economic liberalization and need no change; (c) amend the laws which require change; and (d) revise the rules, regulations, orders and notifications. Further under the plan, efforts would be made to extend the coverage of the National Social Assistance Programme comprising old age pension, maternity benefit and family benefit for girl child, casual and selfemployed workers and informal sector both in rural and urban areas.47 In the Tenth Five Year plan (2002–2007), the salient feature of the labour department was to ensure payment of minimum wages to the workers engaged in agricultural and unorganized sectors. The labour department also proposed to play a major role in improving industrial peace and harmony among the working class and to maintain harmonious relation between the employer and the employee. The working condition and safety of the workers engaged in the organized sector of the economy is looked after by the Directorate of Factories. The changing scenario of globalization involves greater emphasis on strengthening of conciliation and adjudication machinery to cope with the increasing numbers of industrial disputes. The conciliation machinery of the department is conscious of its challenging role in resolving labour disputes. Some of the measures taken by the department are as under: (1) Effective enforcement of the Minimum Wages Act, Contract Labour (Regulation and Abolition) Act, Child Labour (Regulation and Prohibition) Act and Equal Remuneration Act which were specially designed to protect unorganized workers and women; (2) Rehabilitation of migrant, orphan and homeless labour and child labour in core carpet zones; (3) Identification and rehabilitation of bonded labour; (4) Setting up of a Centre for Productivity and Industrial Management in UP; (5) Setting up of legal cells at regional offices at Allahabad, Lucknow and

Ghaziabad; (6) Creating awareness amongst the workers and involving them in fruitful occupation; (7) Greater emphasis on safer working conditions of industrial workers and strengthening of Boiler Directorate; (8) Creation of labour court and industrial tribunal; (9) Establishment of Fast Track Court and (10) Labour statistics, training and establishment of data bank. The Eleventh Five Year Plan (2007–2012), emphasized the need to supplement employment generating sector such as medium and small industries and services by targeted livelihood support programmes aimed at increasing production and income of the poor in several low-income occupations. The plan laid emphasis on generating adequate number of productive employment opportunities. The planners asserted that rapid growth focussed on labour-intensive industries and small and medium enterprises will create employment opportunities in manufacturing and service sector. The ability to create jobs will be enhanced by greater labour flexibility which may require some change in labour. While they conceded that ‘hire and fire’ approach may not be desirable but felt that there is a need to create greater flexibility. While dealing with skill development, the Eleventh Plan reiterated that specific programme for development of skills at all levels will form part of the plan. While dealing with welfare provisions, the plan stated that while in the short run, access to basic facilities such as health, education, clean drinking water, etc., would be provided but in the long run, stress would be laid on the welfare of workers. The planners emphasized that the broad vision of the Eleventh Plan would be rapid growth that reduces poverty and creates employment opportunities, recognition of women's agency, good governances, access to essential services in health and education specially for poor; equality of opportunities, empowerment through education, skill development, employment opportunities under the Mahatma Gandhi National Rural Employment Guarantee Act and environment sustainability.

Approaches to the Twelfth Five-Year Plan (2012–2017) As the country moves to adopt the 12th Five-Year Plan, macro-economic balance with environmental sustainability, water and energy management along with

urbanization among others, are the key challenges before the government. The approach paper suggests that the main focus will be on inclusive growth. The Plan is expected to encourage agriculture, education, health and social welfare. It is also expected to create employment through developing India's manufacturing sector.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Dale Younder, Personnel Management and Industrial Relations (Englewood Cliffs, New Jersey: Prentice Hall Inc., 1965). R C Goyal, ‘Determinants of Industrial Relations’, Indian Journal of Labour Economics, XII, 78. Id. at 91. Ibid. Ibid. See Report of the Study Group on Industrial Relations (Western Region), National Commission on Labour (1969). 26. Ibid. O P Thakkar, ‘Determinants of Industrial Relations’, Indian Journal of Labour Economics, XII 102. See supra note 6 at 34. Government of India, Ministry of Labour Annual Report 2007 (2009) 2. Report of the All Indian Congress Committee at Avadi (January, 1955). See Government of India, Indian Labour Journal (2010) 808. Government of India, Ministry of Labour & Employment, Annual Report 2009–2010 (2010) 221. Ibid. Ashok Mehta, Dynamics of the Labour Movement, Presidential Address delivered at IX Annual Conference of the Indian Society of Labour Economics (Varanasi, 1965). Government of India, Ministry of Labour & Employment, Annual Report to the People on Employment (2010) 19. Ibid. Mathur and Mathur, Trade Union Movement of India (1962), 82. Government of India, Ministry of Labour Year Book 2007 (2009). Government of India, Indian Labour Year Book, 2008 (2010) 2. Government of India, Indian Labour Year Book, 2007 (2009) 10. Mathur and Mathur, Op cit. 72. Ibid. See chapter 3 section IV infra.

25 Government of India, Ministry of Labour, Indian Labour Year Book 2007 (2009) 4. 26 Government of India, Ministry of Labour & Employment, Annual Report to the People on

Employment (2010) 21. 27 See Child Labour in India (Ed. M K Pandia), 1979, 54. 28 Child Labour in India (Ed. M K Pandia) 1979, 54. 29 See Government of India, Report of the National Commission on Labour, 1969, 386. 30 Child Labour (Regulation and Abolition) Act, 1986. 31 See for instance the Factories Act, 1948, Mines Act, 1952, Plantation Workers Act, 1951. 32 Ibid. 33 Govt. of India, Ministry of Labour, Annual Report 2003–2004, (2004) 3. 34 Ibid. 35 Govt. of India, Ministry of Labour, Annual Report 2003–2004, (2004) 3. 36 Government of India, Report of the First Study Group of Industrial Relations in Eastern

India, National Commission on Labour (1968). 37 Government of India, Report of the Committee on Labour Welfare, (1969), 15. 38 Government of India, Report of the Study Group on Industrial Relations (Northern

Region), (1968), 15. 39 Government of India, First Five-Year Plan 1951, 570, 572–573. 40 Ibid. 41 First Five-Year Plan (1951). 42 Ibid. 43 B R Patil, ‘Labour Relations—A Need Based System’, Economic Times, September 26,

1981, 5. 44 Government of India, Annual Report 1985–86 (1986), 8. 45 Government of India, Seventh Five-Year Plan 1985–90, (Vol. 20) (1985), 119. 46 Government of India, Eighth Five-Year Plan 1992–97, (Vol. 27) (1992), 154. 47 Government of India, Ninth Five-Year Plan 1997–2002, (Vol. 2), 390, 392 and 397.

CHAPTER

3 Constitutional Framework on Industrial Relations I. CONSTITUTIONAL PERSPECTIVE A. The Preamble The people of India resolved on 26 November, 19491, to constitute their country into a Sovereign, Socialist, Secular Democratic2 Republic and to secure to all its citizens : Justice; social, economic and political; Liberty of thought, expression, belief, faith and worship; Equality of status and opportunity and to promote among them all; Fraternity assuring the dignity of the individual and the unity and integrity of the Nation.

B. Directive Principles of State Policy The Preamble has been amplified and elaborated in the Constitution, particularly in ‘Directive Principles of State Policy’. The State has been directed to promote the welfare of the people by securing and protecting as effectively as it may, a social order in which justice, social, economic and political shall inform all institutions of national life.3 Further, the state has been directed to secure, inter alia, (a) adequate means of livelihood;4 (b) proper distribution of ownership and

control of the material resources of the community so that it may subserve the common need;5 (c) prevention of the concentration of wealth and means of production; (d) equal pay for equal work for men and women;6 (e) the health and strength of workers;7 (f) right to work, to education and to public assistance in cases of undeserved want;8 (g) just and humane conditions of work and for maternity relief;9 (h) living wage and decent standard of life of labourers;10 (i) participation of workers in the management of undertakings or industrial establishments by suitable legislation or otherwise11 and (j) higher level of nutrition and standard of living and improving public health.12 These provisions spell out the socio-economic objectives of the national policy to be realized by legislation. These are the directives13 to the legislature and executive organs of the State which are committed to make, interpret and enforce law.

C. Constitutional Guarantee The labour policy is, however, not unqualified. It is subject to various limitations. The Indian Constitution imposes an express limitation on it. Labour legislation, therefore, should not be inconsistent with or in derogation of the fundamental rights. It is to the extent of such inconsistency void.14 Further, the rights are enforceable by the courts under Articles 32 and 22615 and cannot be denied in case of violation of fundamental rights.16 Fundamental rights are enumerated in Part III of the Constitution. The whole object of Part III is to provide protection for the freedom and rights mentioned therein against arbitrary action by the State.17 Of particular relevance is Article 14 which provides that ‘the State shall not deny to any person equality before the law or equal protection of the laws within the territory of India’.18 In addition to this, Article 16 guarantees equality of opportunity in matters of public employment. Further Article 19, inter alia, guarantees ‘the right to freedom of speech and expression,’19 to assemble peacefully and without arms;20 to form associations or unions,21 to acquire, hold and dispose of property22 and to practise any profession, or to carry on any occupations, trade or business.23These constitutional guarantees are of great practical significance in the area of labour management relations. Equal protection constitutes a limitation on the legislative power to select or decide which business or industry must achieve minimial standards. The right to carry on trade, profession or business limits the burden which the legislation may place on business in the interest of workers. The freedom of speech,

assembly, association and unionization protect workers in their efforts to achieve their objectives through self organizing, picketing or striking. Article 21 provides protection of life and personal liberty. It provides that no person shall be deprived of his life or personal liberty except according to procedure established by law. Article 23 prohibits traffic in human beings and forced labour. It says (i) Traffic in human beings and begar and other similar forms of forced labour are prohibited and any contravention of this provision shall be an offence punishable in accordance with law. Life, in Article 21, has been interpreted by the Supreme Court as including livelihood and the Court has held in several cases that any employment below minimum wage levels is impremissible as it amounts to forced labour as understood in Article 23. Holding a person in bondage is a constitutional crime. Article 24 places a ban on employment below the age of 14 in any factory, mine or in any other hazardous employment. A survey of decided cases reveals that the vires of the Industrial Disputes Act, 1947 has been challenged time and again on the ground of infringement of fundamental rights guaranteed under Articles 14 and 19 before the high courts and the Supreme Court. In Niemla Textile Finishing Mills Ltd v. Industrial Tribunal, Punjab24, the Supreme Court observed that neither the Industrial Disputes Act nor any provision thereof is void as infringing the fundamental rights guaranteed by Article 14 or 19. Thus, it has now been settled that the provisions of Industrial Disputes Act are not violative of the fundamental rights guaranteed under the Constitution.

D. Distribution of Law-making Power Distribution of power imposes another limitation on the overriding labour policy. It will be observed that the power to make laws for the whole or any part of the territory of India25 is vested in the Parliament.26 This power extends only to such subjects of legislations as are enumerated in Union List27 and Concurrent List28 of the Seventh Schedule of the Constitution. Further, the Parliament has been empowered to make laws on any of the matters of the State List under the following conditions. First, if the Council of States declares by resolution supported by not less than two-third of the members present and voting that it is necessary or expedient in the national interest that the Parliament should make laws in respect to any matter enumerated in the State List specified in the resolution, it shall be lawful for the Parliament to make laws on such matters. The resolution will remain in force for the period of one year unless relaxed.29Second, the Parliament is empowered to legislate on any matter

enumerated in the State List while proclamation of emergency is in operation.30 Third, the Parliament is empowered to legislate for two or more states by their consent. Such a legislation shall apply to such states and any other state by which it is adopted afterwards by resolution passed in this behalf by each of the houses of state legislature.31 The Parliament has also been given power to legislate on such matters as are not enumerated in the Seventh Schedule.32 Quite apart from this, fundamental rights33 and freedom of inter-state trade and commerce34 impose express limitation on the legislative power. The power to make laws for the whole or any part of the state is vested in the state legislature, which may make laws on such subjects as are enumerated in the State List35 and Concurrent List of the Seventh Schedule of the Constitution. But, where laws made by the state legislature on matters enumerated in the Concurrent List are inconsistent with a central act on the same matter, the state laws will be inoperative to the extent of inconsistency.36 There is, however, one exception to it, namely, if a law made by the state legislature is inconsistent with the Union law, state law will prevail over the Union law, if the same has been referred for the consideration of the President and it has received his assent.37 State legislations too are subject to limitations like those imposed by fundamental rights and freedom of inter-state trade and commerce. The main topics directly affecting labour relations are included in each of the following lists: Union List: List I Item 13: Participation in international conferences, associations and other bodies and implementation of decisions made there at Item 55: Regulation of labour and safety in mines and oilfields Item 61: Industrial disputes concerning union employees Item 94: Inquiries, surveys and statistics for the purposes of any of the matters in the list Concurrent List: List III Item 20: Economic and social planning Item 22: Trade unions; industrial and labour disputes Item 23: Social security and social insurance; employment and unemployment Item 24: Welfare of labour including conditions of work, provident

fund, employers’ liability, workmen’s compensation, invalid and old age pensions and maternity benefits Item 25: Vocational and technical training of labour Item 36: Factories Item 37: Boilers Item 45: Inquiries and statistics for the purposes of any of the matters specified in List II or List III State List: List II Item 9: Relief for disabled and unemployable In addition to the aforesaid items, there are several other items. A perusal of the items mentioned in the lists of the Seventh Schedule reveals that the Parliament has been vested with wide powers in labour matters. However, it ’may sometimes happen that in the course of making a law, one may incidentally touch upon subject assigned to the other. This incidental encroachment, however, is not considered bad, for the reason that the entries in the lists have to be widely construed and some amount of overlapping could not altogether be avoided. If the legislation is in pith and substance on a matter assigned to one legislative body, an incidental encroachment into the territory of the other could be considered permissible. Pith and substance and incidental encroachment are the doctrines evolved by courts to ensure that the federal machinery could function without serious friction.’38 There ‘is however, no provision in the Constitution which lays down that a Bill which has been assented to by the President would be ineffective as an Act if there was no compelling necessity for the Governor to reserve it for the assent of the President. There might be a genuine doubt about the applicability of any of the provisions of the Constitution which required the assent of the President to be given to it in order that it might be effective as an Act. If the Governor in exercise of his discretion decided to reserve the Bill for consideration of the President to avoid any future complication, that could not be put forward as a proof of the existence of repugnancy between the Parliamentary enactment and the Bill which had been reserved for the assent of the President.’39 The Supreme Court in a catena of cases40 laid down the following tests for repugnancy: (i) whether there is direct conflict between the two propositions? (ii) whether Parliament intended to lay down an exhaustive code in respect of the subject matter replacing the Act of the State Legislature?, and

(iii) whether the law made by the Parliament and the law made by the state legislature occupy the same field?41

II. CONSTITUTIONAL AMENDMENTS ON RIGHT TO FREE AND COMPULSORY EDUCATION With a view to making right to free and compulsory education a fundamental right, the Constitution (Eighty-third Amendment) Bill, 1997 was introduced in Parliament to insert a new article, namely, Article 21A conferring on all children in the age group of 6 to 14 years the right to free and compulsory education. The said bill was scrutinized by the Parliamentary Standing Committee on Human Resource Development and the subject was also dealt with in its 165th Report by the Law Commission of India. After taking into consideration the report of the Law Commission of India and the recommendations of the Standing Committee of Parliament, the following amendments have been made in the Constitution of India through Constitution (Eighty-sixth Amendment) Act, 2002 which received the assent of the President on 21 December 2002. The amended act inserted new Article 21A: Right of Education in the Constitution which reads as under: The State shall provide free and compulsory education to all children of the age of six to fourteen years in such manner as the State may, by law, determine. It also substituted Article 45 which provides: The State shall endeavour to provide early childhood care and education for all children until they complete the age of six years. Quite apart from the above constitutional right, the Right of Children to Free and Compulsory Education Act, 2009, which came into force with effect from 1 April 2011, provides that every child in the age group of 6 to 14 years will be provided free and compulsory education.

III. CONTRIBUTION OF INDIAN JUDICIARY IN EVOLUTION OF INDUSTRIAL JURISPRUDENCE THROUGH CONSTITUTIONAL INTERPRETATION

Indian judiciary has played significant role in the evolution of industrial jurisprudence. It has not only made a distinct contribution to laws relating to industrial relations, social security and minimum standards of employment but has innovated new methods and devised new strategies for the purpose of providing access to justice to weaker sections of society who are denied their basic rights and to whom freedom and liberty have no meaning. Indeed, the court assumed the role of protectionist of the weaker by becoming the court for the poor and struggling masses of the country. Further, the courts at times played a role of legislators where law is silent or vague. Indeed, a number of legislation and legislative amendments have been made in response to the call by the judiciary. A creative role played by Indian judiciary for weaker sections of society is best depicted in People’s Union for Democratic Rights v. Union of India42. In an epoch making judgement, the Supreme Court has not only made a distinct contribution to labour law but has displayed the creative role to protect the interests of weaker sections of society. Further, the Court has given a new dimension to several areas such as minimum wages, employment of children, enforcement of labour laws and public interest litigation. The Court has also enlarged the contours of fundamental right to equality, life and liberty, prohibition of traffic in human beings and forced labour and prohibition of employment of child labour provided in the Constitution. The case arose out of the denial of minimum wages to workmen engaged in various Asiad projects and non-enforcement of the Minimum Wages Act, 1948, Equal Remuneration Act, 1976, Employment of Children Act, 1938, Contract Labour (Regulation and Abolition), Act, 1970 and the Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979. However, the Court’s attention was drawn not by the aggrieved workers but by a public-spirited organization by means of a letter addressed to Justice Bhagwati of the Supreme Court. The letter was based on a report made by three social scientists after personal investigation and study. For the purpose of analysis, the Court’s decision may be considered under the following heads:

Area of Conflict The court was directly called upon to decide, inter alia, the following main issues: (i) Is a writ petition under Article 32 of the Constitution maintainable for

mere violation of labour laws and not for breaches of any fundamental right? (ii) What is the true scope and meaning of the expression ‘traffic in human beings and begar and other similar forms of forced labour’ in Article 23 of the constitution? (iii) Whether there was any violation of the Equal Remuneration Act, 1976, the Contract Labour (Regulation and Abolition) Act, 1970, the Minimum Wages Act, 1948 and the Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act 1979 ? The Supreme Court through Justice Bhagwati answered all the aforesaid questions in the affirmative.

Maintainability of the Writ Petition for Violation of Labour Legislation under Article 32 As regards the first and third issues, the Court accepted the contention that the writ petition under Article 32 of the Constitution could not be maintained unless there was a violation of fundamental rights. Consequently, it examined whether there was any violation of fundamental rights in this petition and observed: The complaint of violation of Article 24 based on the averment that children below the age of 14 years are employed in the construction work of the Asiad projects is clearly a complaint of violation of a fundamental right. So also when the petitioners allege non-observance of the provisions of the Equal Remuneration Act, 1976, it is in effect and substance a complaint of breach of the principle of equality before the law enshrined in Article 14…. Then there is the complaint of nonobservance of provisions of the Contract Labour (Regulation and Abolition) Act, 1970 and the Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979 and this is also in our opinion a complaint relating to violation of Article 21.43 Now, the rights and benefits conferred on the workmen employed by a contractor under the provisions of the Contract Labour (Regulation and Abolition) Act, 1970 and the Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979 are clearly intended to ensure basic human

dignity to the workmen and if the workmen are deprived of any of these rights and benefits to which they are entitled under the provisions of these two pieces of social welfare legislation, that would clearly be a violation of Article 21 of the Constitution of India. The Delhi Administration and Delhi Development Authority which, as principal employers, are made statutorily responsible for securing such rights and benefits to the workmen. That leaves for consideration the complaint in regard to non-payment of minimum wages to the workmen under the Minimum Wages Act, 1948. We are of the view that this complaint is also one relating to breach of a fundamental right… it is the fundamental right enshrined in Article 23 which is violated by non-payment of the minimum wages to the workmen.44

Prohibition of Traffic in Human Beings and Forced Labour As regards the second issue, the court pointed out that Article 23 was ‘designed to protect the individual not only against the State but also against any other person indulging in any such practice.’ It imposes prohibition on traffic in human beings and begar and other similar forms of forced labour. Explaining the scope of the expression ‘traffic in human beings and begar and other similar form of forced labour’ the court observed: What Article 23 prohibits is ‘forced labour’ that is labour or service which a person is forced to provide and ‘force’ which would make such labour or service ‘forced labour’ may arise in several ways. It may be physical force which may compel a person to provide labour or service to another or it may be force exerted through a legal provision such as a provision for imprisonment or fine in case the employee fails to provide labour or service or it may even be compulsion arising from hunger and poverty, want and destitution… The word ‘force’ must, therefore, be construed to include not only physical or legal force but also force arising from the compulsion of economic circumstances which leaves no choice or alternatives to a person in want and compels him to provide labour or service even though the remuneration received for it is less than the minimum wage.

The court added: [W]here a person provides labour or service to another for remuneration which is less than the minimum wage, the labour or service provided by him clearly falls within the scope and ambit of the words ‘forced labour’ under Art. 23. Such a person would be entitled to come to the Court for enforcement of his fundamental right under Art. 23 by asking the Court to direct payment of the minimum wage to him so that the labour or service provided by him ceases to be ‘forced labour’ and the breach of Art. 23 is remedied.45

Enforcement of Fundamental Rights Before we proceed to discuss the third issue, it is necessary to examine the approach of the courts towards the enforcement of fundamental rights. The Supreme Court observed that there are certain fundamental rights conferred by the Constitution which are enforceable against the whole world and they are to be found, inter alia in Articles 17, 23 and 24.46 Whenever a fundamental right in Articles 17, 20 or 24 which is enforceable against private individuals is violated, it is the constitutional obligation of the State to take necessary steps for the purpose of interdicting such violation and ensuring observance of the fundamental right by the private individual who is transgressing the same. Of course, the person whose fundamental right is violated can always approach the court for its enforcement but that cannot absolve the State from its constitutional obligation to see that there is no violation of the fundamental right of such person, particularly when he belongs to the weaker sections of community and is unable to wage a legal battle against a strong and powerful opponent who is exploiting him.

Violation of Labour Law As to the third issue, the Court pointed out that admittedly there were certain violations committed by the contractors and for those violations, prosecution was launched against them but remarked that no violation of any of the labour laws should be allowed to go unpunished. The Union of India also conceded that ₹1 per worker per day was deducted by the jamadars from the wages payable to the workers with the result that the workers did not get the minimum wage of ₹9.25 per day but stated that proceedings have been taken for the purpose of recovering the amount of shortfall in the minimum wage from the contractors. In

view of this, the Court directed that whenever any construction work is being carried out either departmentally or through contractors, the government or any other governmental authority including a public sector corporation which is carrying out such work, must take great care to see that the provisions of the labour laws are strictly observed and they should not wait for any complaint to be received from the workmen in regard to non-observance of any such provisions before proceeding to take action against the erring officers or contractors. Instead, they should institute an effective system of periodic inspections coupled with occasional surprise checks by the higher officers in order to ensure that there are no violations of the provisions of labour laws and the workmen are not denied the rights and benefits to which they are entitled and where such violations are found, immediate action should be taken against defaulting officers or contractors. However, it is unfortunate that these directives only remain on paper and do not appear to have been followed in the Commonwealth Games.

IV. SEXUAL HARASSMENT OF WOMEN AT WORKPLACE AND THE CONSTITUTION The three-judge bench of the Supreme Court in an epoch-making judgement in Vishaka v. Union of India47 made a significant contribution by evolving the code against sexual harassment. While emphasizing the need to have guidelines, the Supreme Court observed: The primary responsibility for ensuring such safety and dignity through suitable legislation, and the creation of a mechanism for its enforcement is of the legislature and the executive. When, however, instances of sexual harassment resulting in violation of fundamental rights of women workers under Articles 14, 19 and 21 are brought before us for redress under Article 32, an effective redressal requires that some guidelines should be laid down for the protection of these rights to fill the legislative vacuum.

Guidelines and Norms The Supreme Court laid down the following guidelines and norms to be strictly observed at all work places for the preservation and enforcement of the right to

gender equality of working women. These directions according to the Court would be binding and enforceable in law until suitable legislation is enacted to occupy the field. However, these guidelines will not prejudice any rights available under the Protection of Human Rights Act, 1993. 1. Duty of the Employer or Other Responsible Persons in Workplaces and Other Institutions: It shall now be the duty of the employer or other responsible persons in workplaces or other institutions to take necessary steps to prevent the commission of acts of sexual harassment, deter the commission of acts of sexual harassment and provide the procedure for (i) resolution (ii) settlement and (iii) prosecution of acts of sexual harassment. 2. Preventive Steps: All employers or persons incharge of workplace, whether in public or private sector, should take appropriate steps to prevent sexual harassment. They are further required to take the following steps: (i) Express prohibition of sexual harassment as defined above at the workplace should be notified, published and circulated in appropriate ways; (ii) The rules/regulations of the government and public sector bodies relating to conduct and discipline should include rules/regulations prohibiting sexual harassment and provide for appropriate penalties in such rules against the offender; (iii) As regards private employers, steps should be taken to include the aforesaid prohibitions in the Standing Orders under the Industrial Employment (Standing Orders) Act, 1946; and (iv) Appropriate work conditions should be provided in respect of work, leisure, health and hygiene to further ensure that there is no hostile environment towards women at workplaces and no woman employee should have reasonable grounds to believe that she is disadvantaged in connection with her employment. 3. Disciplinary Action: When the conduct of the accused amounts to misconduct in employment under the relevant service rules, the employer should initiate disciplinary action in accordance with the rules. 4. Complaint Mechanism: Employer is required to create an appropriate complaint mechanism in his organization for redressal of the complaint made by the victim whether or not the conduct of the accused constitutes an offence under law or a breach of service. Such complaint mechanism should ensure time-bound disposal of all complaints. 5. Complaint Committee

(a) Design of Complaint Mechanism: The complaint mechanism should be adequate to provide assistance where it is necessary to have a complaint committee, a special counsellor or other support service (including maintenance of confidentiality). (b) Composition of Complaint Committee: The composition of complaint committee shall be as under: (i) (ii)

It shall be headed by a woman; Not less than half of the members of the committee should be women; (iii) The committee should involve a third party, either an NGO or another body familiar with the issues of sexual harassment, in order to prevent the possibility of any undue pressures or influence from senior levels. (c) Annual Report: The complaint committee of the concerned government department shall prepare an annual report of its activities during the previous year. Such a report should also state complaints and action taken by them. The committee shall forward a copy thereof to the head of the organization concerned who shall forward the same to the government department concerned with its comments. (d) Compliance Report: The employer and the person incharge is also required to report: (i) On compliance with the aforesaid guidelines; (ii) Compliance on the reports of the complaint committee; (iii) Such report must be sent to the concerned government department. 6. Workers’ Initiative: In order to prevent and control sexual harassment at workplace, employers should be allowed to raise these issues: (i) at workers’ meeting; and (ii) in other appropriate forums. The issues of sexual harassment should be affirmatively discussed in employer-employee meetings. 7. Awareness: In order to create awareness about the right of female employees in regard to sexual harassment, the employer should take the following steps: (i) prominently notify the guidelines in a suitable manner; and (ii) enact appropriate legislation on the subject that should be suitably notified and displayed. 8. Third Party Harassment: Where sexual harassment occurs as a result of an act or omission by: (i) any third party or (ii) outsider, the employer and persons

incharge are required to take necessary and reasonable steps to assist the affected person—(a) in terms of support and (b) take preventive action. 9. Steps to be Taken by the Government: The Central and state governments are required to: (i) (ii)

take suitable measures (including legislation) ensure that the guidelines are observed by the employers in private sector Two years later, in Apparel Export Promotion Council v. A K Chopra48, the Supreme Court was invited to decide the following issues: 1. Does an action of the superior against a female employee which is against moral sanctions and does not withstand the test of decency and modesty, not amount to sexual harassment? 2. Is physical contact with the female employee an essential ingredient of such a charge? 3. Does the allegation that the superior ‘tried to molest’ a female employee at the ‘place of work’ not constitute an act unbecoming of good conduct and behaviour expected from the superior? As regards the first issue the Supreme Court ruled that ‘each incident of sexual harassment at the place of work results in violation of the fundamental right to gender equality and the right to life and liberty—the two most precious fundamental rights guaranteed by the Constitution of India’. The Supreme Court answered the second issue in negative and held that it was erroneous to hold that since the respondent had not ‘actually molested’ Miss X and that he had only ‘tried to molest’ her and had ‘not managed’ to make physical contact with her, the punishment of removal from service was not justified. On the third issue the Supreme Court held that the act of the respondent was unbecoming of good conduct and behaviour expected from a superior officer and amounted to sexual harassment. The Court ruled that: (i) sexual harassment covers any action or gesture which, whether directly or by implication, aims at or has the tendency to outrage the modesty of a female employee; (ii) for an offending action to be outrageous, actual molestation or touch by the offender is not necessary; (iii) objectionable overtures with sexual overtones are enough; and (iv) physical contact is not necessary.

V. CONSTITUTIONAL VALIDITY OF SERVICE CONTRACTS AND STANDING ORDERS The law of employer-employee relationship is governed primarily by service rules and regulations, standing orders or contract of employment. The service rules and regulations empower the employer to terminate the service of an employee by giving 3 months’ notice on either side or by making payment in lieu of notice, without assigning any reason and without providing any hearing opportunity to the employee before passing the order of termination of service. Standing orders of a company certified under the Industrial Employment (Standing Orders) Act, 1946 also contain a clause stipulating abandonment of service by a workman on remaining absent for 7/8 consecutive days. Further, such clause is also contained in the model standing orders of a company.

Validity of Service Rules and Regulations The validity of service rules and regulations has been challenged in a catena of cases before the Supreme Court. The courts have held such rules and regulations were arbitrary, discriminatory and inconsistent with public policy. Likewise, the provisions of automatic termination of services in the standing orders have been held to be violative of principles of natural justice. Some other courts have even held that such termination of service amounted to ‘retrenchment’ under the Industrial Disputes Act, 1947. The Supreme Court in West Bengal State Electricity Board v. Desh Bandhu Ghosh49 held that any provision in the regulation enabling the management to terminate the services of a permanent employee by giving 3 months’ notice or pay in lieu thereof, would be held as violative of Article 14 of the Constitution. Such a regulation was held to be capable of vicious discrimination and was also held to be naked ‘hire and fire’ rule. Again in O P Bhandari v. Indian Tourism Development Corporation 50 Ltd , the Supreme Court held that Rule 31 (v) of the Indian Tourism Development Corporation (Conduct, Discipline and Appeal) Rules, 1978, which provided that the service of a permanent employee could be terminated by giving him 90 days’ notice or pay in lieu thereof, would be violative of Articles 14 and 16 of the Constitution. The aforesaid view was reiterated in Central Inland Water Transport Corporation Ltd v. Brojo Nath Ganguly.51 Here, the Supreme Court has

displayed creative role to protect the interest of employees. Here, Rule 9(1) of the Central Inland Water Transport Corporation Ltd Service Discipline and Appeal Rules, 1979 provided that service of a permanent employee could be terminated by giving ‘3 months’ notice in writing on either side’. The Court while dealing with the validity of Rule 9 ruled: (i) Rule 9 was arbitrary and discriminatory and, therefore, violative of Article 14 of the Constitution. (ii) The rule was inconsistent with public policy and consequently invalid under Section 23 of the Contract Act, 1872. (iii) The termination of service of a permanent employee in terms of Rule 9 is both arbitrary and unreasonable, ignores Audi Alterem Partem Rule and is violative of Article 14 of the Constitution. The whole case law was reviewed by the Constitution bench in Delhi Transport Corporation v. DTC Majdoor Congress52 and except the then Chief Justice, Sabya Sachi Mukharji, who dissented, the other four judges reiterated the earlier view. They affirmed the decision in Central Inland Water Transport Corporation Ltd’s case. The Court, by a majority held that the service rules and regulations which empowered the authority to terminate the services of permanent employees by issuing notice or terminating their service by making payment in lieu of notice, without assigning any reason and without providing any hearing opportunity to the employees before passing the impugned order was arbitrary, uncanalized, unrestricted and violative of the principles of natural justice as also Article 14 of the Constitution. The Court (in its majority judgement) ruled that (i) Regulation 9 (b) of the Delhi Road Transport Authority (Conditions of Appointment and Service) Regulations, 1952 suffered from the vice of arbitrariness as there was no guidance in the Regulations or in the Act as to when or in which cases and circumstances, this power of giving notice or pay in lieu of notice can be exercised. (ii) Regulation 9 (b) was void under Section 23 of the Contract Act as being opposed to public policy. In K C Sharma v. Delhi Stock Exchange53, Delhi Stock Exchange (management) terminated the services of the general manager, an employee after giving 3 months’ notice as per the terms of the appointment. The employee challenged the order of termination of service in a writ petition before the Delhi High Court. The Delhi High Court held that the termination of services of the employee (appellant) was illegal and mala fide. It, therefore, directed reinstatement with continuity in service. Thereupon the respondent, Delhi Stock Exchange challenged this order in the division bench of the High Court. The division bench held that (i) Delhi Stock Exchange was a ‘State’ within the

meaning of Article 12 of the Constitution (ii) Appellant was a permanent employee and therefore his termination as per clause (4) of the letter of appointment was ultra vires (iii) On one hand, the appellant had made serious allegations on the member directors of the Stock Exchange including president, vice-president and other senior members, while on the other, there were serious allegation against him of using his office for unauthorizedly making correspondence with authorities. Such allegations and counter-allegations are of serious nature and there was bad blood between the parties. In view of this, the division bench held that it would not be advisable to direct reinstatement irrespective of the fact that loss of confidence had not been pleaded or proved. The Court, therefore, directed the appellant be paid ₹1.2 lakh as compensation in lieu of reinstatement. Thereupon, the appellant filed an appeal before the Supreme Court. The Supreme Court held that: (i) the termination of service of the appellant under clause of letter of appointment was illegal and the removal was both malafide and unjustified (ii) the totality of the circumstances of the case render it improper and unjust to direct the relief of reinstatement with full back wages. It, however, raised the compensation from ₹1.2 lakh to ₹1.5 lakh. It is submitted that the court has opened the scope of granting compensation in lieu of reinstatement even where the plea of loss of confidence is not pleaded. Be that as it may, it causes loss to the stock market. In such a situation, the court could have fixed the accountability when there were allegations against high officials.

Validity of Certified Standing Orders We now turn to examine whether stipulation in the certified standing orders for automatic termination of services for overstaying the leave would be bad. In D K Yadav v. J M A Industries Ltd54, the Supreme Court has laid down that where the rule provided that the service of an employee who overstays the leave would be treated to have been automatically terminated, it would be bad as violative of Articles 14, 16 and 21 of the Constitution. It further held that if any action was taken on the basis of such a rule without giving any opportunity of hearing to the employee, it would be wholly unjust, arbitrary and unfair. The Court emphasized that principles of natural justice would have to be read into the provision relating to automatic termination of services. In Uptron India Ltd55 case, the Supreme Court was also invited to consider whether Clause 17 (g) of the certified standing orders providing that ‘the services of a workman are liable to automatic termination if he overstays on leave without permission for more than 7 days was bad and violative of the

principles of natural justice. The Court answered the question in the affirmative and observed: We are of the positive opinion that any clause in the certified standing orders providing for automatic termination of service of a permanent employee, not directly related to ‘production’ in a factory or industrial establishment, would be bad if it does not purport to provide an opportunity of hearing to the employee whose services are treated to have come to an end automatically. However, earlier in Hindustan Paper Corpn. v. Purnendu Chakrobarty, the Supreme Court has held that an employee absenting from duty without prior sanction for about 6 months by sending applications for leave on medical ground but not supporting with medical certificates will be deemed to have lost the lien on the job when he has failed to avail the opportunity in replying in half-hearted way and not reporting for duty. The pendulum swung in other direction in some of the later cases. In Syndicate Bank v. General Secretary, Syndicate Bank Staff Association56, the Supreme Court also ruled that: (i) Where an employee is absent beyond the prescribed period, for which leave of any kind cannot be granted, he should be treated to have resigned and he ceases to be in service. In such a case, there is no need to hold an inquiry or to give any notice, as it would amount to useless formalities. (ii) Undue reliance on the principle of natural justice leads to miscarriage of justice. (iii) The principles of natural justice and duty to act in a just, fair and reasonable manner have to be read in certified standing order/statutory rules. The employee had unauthorizedly absented himself from work for a period exceeding the period of prescribed limit. He was sent a notice by registered post calling him to report for duty, failing which he would have been deemed to have retired. The notice came with the endorsement ‘refusal to accept’. The Supreme Court held that as the employee refused to accept the notice, service of notice upon him was complete and in such a case, removal from service without holding inquiry was fully justified. In Aligarh Muslim University v. Mansoor Ali Khan,57 the Supreme

Court considered a large number of its earlier judgements and held that, where an employee is unauthorizedly absent for which leave of any kind cannot be granted, only one conclusion is possible and holding inquiry may not be necessary. The Court also held that mere violation of principles of natural justice does not entitle one to any relief unless the affected party satisfies the Court that non-observance thereof has prejudiced his cause. In Punjab and Sind Bank v. Sakattar Singh58, it has been held that the termination of a bank employee absenting for 190 days without holding an inquiry will not be violative of principles of natural justice. Earlier, in Hindustan Paper Corporation v. Purnendu Chakrobarty59, the Supreme Court held that where an employee absented from duty without prior sanction for about 6 months by sending applications for leave on medical ground but not supporting them with medical certificates, it would be deemed that the employee had lost the lien on the job, particularly when he had failed to avail the opportunity in replying in half-hearted way and not reporting for duty. We now turn to examine the decisions where it has been held that compliance of natural justice is not necessary. Thus in Harmohinder Singh v. Kharga Canteen, Ambala Cantt60, it was held that the principles of natural justice are not applicable where the termination takes place on the expiry of the contract of service. In Uptron India Ltd v. Shammi Bhan61, the Supreme Court also held that the principle of natural justice is not applicable where the termination takes place on the expiry of the contract. Likewise compliance of principles of natural justice is not necessary where the services of employees are terminated who procured appointment on the basis of forged documents. In Umesh Kumar Singh v. State of Bihar and62 the Supreme Court held that if a person gets appointment on the basis of forged and fabricated letter of appointment, then services of such person can be terminated without initiating any full fledged departmental proceedings and the same will not amount to violation of principles of natural justice. The Court also held that when appointment is made illegally, irregularly and in violation of Article 16 of the Constitution of India, then such appointment can be terminated without initiating full-fledged departmental proceeding. Such termination of services will not amount to violation of principles of natural justice.

Application of Labour Laws to Minority Educational Institutions.

CMCH Employees Union v. CM Cottage, Vellore Association63 raises an important issue, namely, whether Sections 9-A, 10, 11-A, 12 and 33 of the Industrial Disputes Act, 1947 were applicable to educational institutions established and administered by minorities and protected by Article 30 (1)64 of the Constitution. The Supreme Court answered the question in affirmative and observed: If a dispute is raised by an employee against the management of a minority educational institutions such dispute will have necessarily to be resolved by providing appropriate machinery for that purpose. Laws are now passed by all the civilized countries providing for such a machinery. The Act with which we are concerned in this case is an Act which has been brought into force for resolving such industrial disputes. Sections 10, 11A, 12 and 33 of the Act cannot, therefore, be construed as interfering with the right guaranteed under Article 30(1) of the Constitution. Similarly, Section 9A of the Act, which requires the management to issue a notice in accordance with the said provision in order to make changes in the conditions of service which may include changes in the hours of work, leave rules, introduction of new rules of discipline, etc., cannot be considered as violative of the right guaranteed under Article 30(1) of the Constitution.

VII REGULATION OF DAILY WAGER/CASUAL WORKERS OR CONTRACT LABOUR/TEMPORARY WORKERS IN PUBLIC EMPLOYMENT In Secretary, State of Karnataka v. Umadevi65 a Constitution bench of the Supreme Court ruled: Those who are working on daily wages formed a class by themselves, they cannot claim that they are discriminated as against those who have been regularly recruited on the basis of the relevant rules. No right can be founded on an employment on daily wages to claim that such employee should be treated on a par with a regularly recruited candidate, and made permanent in employment, even assuming that the principle could be invoked for claiming equal wages for equal work. There is no fundamental right in those who have been employed on

daily wages or temporarily or on contractual basis, to claim that they have a right to be absorbed in service. As has been held by this Court, they cannot be said to be holder of a post, since, a regular appointment could be made only by making appointments consistent with the requirements of Articles 14 and 16 of the Constitution. The right to be treated equally with the other employees employed on daily wages, cannot be extended to a claim for equal treatment with those who were regularly employed. That would be treating unequals as equals. It cannot also be relied on to claim a right to be absorbed in service even though they have never been selected in terms of the relevant recruitment rules. The aforesaid view was reiterated in State of Karnataka v. Ganapathi Chaya Nayak66, Union of India and Another v. Kartick Chandra Mondal, Satya Prakash and Others v. State of Bihar67 and Rameshwar Dayal v. Indian Railway Construction Company Limited68. In Union of India v. Vartak Labour Union69, the court reiterated its earlier view but recommended: Where members of the respondent union have been employed in terms of the regulations and have been consistently engaged in service for the past 30 to 40 years, of course with short breaks, we feel, the Union of India would consider enacting an appropriate regulation/scheme for absorption and regularization of the services of the causal workers engaged by the BRO for execution of its on-going projects.

Non-application of Umadevi’s principle In some of the recent cases70, the Supreme Court has held that the aforesaid principle would not be applicable even in public employment unless the management takes a stand before the labour court in its objections that the post on which the workman was working was not sanctioned or that his engagement was contrary to statutory rules or that he was employed elsewhere or that there was no vacancy. In the absence of any pleadings, evidence of findings on any of these aspects, principles laid down in Umadevi would not apply. Thus, the aforesaid plea must be taken before the labour court even if the workers are actually working in public employment.

Non-application of Umadevi in cases under Sections 11A and 25F of IDA In Krishna Singh v. Executive Engineer, Haryana State Agricultural

Marketing Board71 the Supreme Court pointed out that the decision of this Court in Secretary, State of Karnataka v. Umadevi72 relates to regularization in public employment and has no relevance to an award for reinstatement of a discharged workman passed by the labour court under Section 11A of the Industrial Disputes Act without any direction for regularization of his services. Again, in Anoop Sharma v. Executive Engineer, Public Health Division, Panipat73, the Supreme Court deprecated the tendency of the high courts to apply Umadevi and other cases while dealing with the validity of the award of labour courts by the management. The Court held that none of these decisions have any application to the interpretation of Section 25F/25N of the IDA and employer's obligation to comply with the conditions enumerated in these sections.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

16 17 18 19 20 21

Inserted by the Constitution (42nd Amendment) Act 1976, Section 2. The Preamble of the Indian Constitution. Article 38. Article 39 (a). Article 39 (b). Article 39 (d). Article 39 (c). Article 41. Article 42. Article 43. Article 43A (42nd Amendment Act), 1976. Article 47. See Part IV of the Constitution. Article 13. Article 32 guarantees the right to move the Supreme Court for appropriate relief by writs. In addition to this, Article 226 empowers the High Courts to issue appropriate writs for enforcement of the provisions of Part III of the Constitution. State of Bombay v. United Motors, (1953) SCJ 373. Ibid. State of West Bengal v. Sobodh Gopal, AIR 1964 SC 587. Article 19 (1) (a). Article 19 (1) (b). Article 19 (1) (c).

22 Article 19 (1) (f). 23 Article 19 (1) (g). 24 (1957) 1 LLJ 460 (SC). 25 Article 245 (2). 26 Article 245 (1). 27 Union List contains 97 items of legislation, e.g., Defence, Foreign Affairs, Railways,

28 29 30 31 32 33 34 35 36 37 38 39 40

41 42 43

44 45 46 47 48 49 50 51 52

Airways, Post and Telegraph, Currency Coinage and Legal Tender, Trade and Commerce with other countries, Banking, Insurance, Income tax, Duties of Customs including Export Duty. Concurrent List contains 47 items of legislation. Article 249. Article 250. Article 252. Article 249. Part III of the Constitution. Part XIII of the Constitution. State List contains 66 items of legislation. Article 254 (1). Article 254 (2). APSWL Co-operative Society Ltd v. Labour Court, 1987 Lab. LC 642 at 649 (SC). Ibid. Zaverbhai v. State of Bombay, AIR 1954 SC 752, Tike Ramji v. State of UP, AIR (1956) SC 676. Deep Chand v. State of UP, AIR 1959 SC 648, Karunandh v. Union of India, AIR 1979 SC 878 and Hoechst Pharmaceuticals v. State of Bihar, AIR 1983 SC 1019. 1987 Lab. LC 642. (1982) 2 LLJ 454. See Hussainera Khatoona v. State of Bihar, (1978) I SCC 238; Sunil Batra v. Delhi Administration, (1978) 4 SCC 494: See also AIR 1980 SC 1979; Khatri v. State of Bihar, (1981) I SCC 635; S P Gupta v. Union of India, AIR 1982 SC 149. (1982) 2 LLJ 454. (1982) 2 LLJ 454 at 464–65. Id. at 470–71. 1997 LLR 991 (SC). JT 1999 (1) SC 61: (1999) 1 SCC 759. (1985) 3 SCC 116. (1986) 4 SCC 337. (1986) 2 LLJ 171. (1985) 3 SCC 116.

53 2005 LLR 417 (SC). 54 AIR 1987 SC 2408. 55 Uptron India Ltd. v. Shammi Bhan, AIR 1991 SC 101. 56 (1993) 3 SCC 259. 57 (2000) 5 SCC 65. 58 JT 2000 (7) SC 529. 59 (2001) LLR 155 (SC). 60 (1997) 2 LLN 1007 (SC). 61 (2000) LLR (SC) 849. 62 (1998) 6 SCC 538. 63 (2001) LLR 585. 64 1988 Lab. IC 225. 65 2006 (109) FLR 826 (SC). 66 (2010) 3 SCC 115. 67 2010 (125) FLR 517 (SC). 68 2011 (128) FLR 60 (SC). 69 2011 (129) FLR 500 (SC). 70 Harjinder Singh v. Punjab State Warehousing Corporation, (2010) 3 SCC 192, Ramesh

Kumar v. State of Haryana, (2010) 2 SCC 543. 71 Krishna Singh v. Executive Engineer, Haryana State Agricultural Marketing Board,

Rohtak, 2010 (2) SCALE 848. See also Anoop Sharma v. Executive Engineer, PHD, 2010 (4) SCALE 203. 72 2006 (109) FLR 826 (SC). 73 2010 (4) SCALE 203.

PART II TRADE UNIONS AND LAW

CHAPTER

4 Trade Unions of Workers and Employers’ Organizations: A Contextual and Historical Analysis I. NEED TO FORM TRADE UNIONS Trade union is an outcome of the factory system. It is based on labour philosophy—‘united we stand, divided we fall.’ Industrial revolution in India has changed the traditional outlook in the labour management relationship. With the introduction of the modern factory system, personal relationship between employer and employee disappeared and has given 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.

II. RIGHT TO FORM TRADE UNIONS Article 19(1)(c) of the Indian Constitution guarantees that all citizens shall have a right to form associations or unions. This right includes not only the right to form trade unions but also the right to continue as members of the trade unions1. It also includes the right to refuse to be a member of an association, the right to not be compelled to join an association and the right to not be compelled to

withdraw from an association.2 However, this right is not absolute. Clause 4 of Article 19 empowers the State to make any law in the interest of the sovereignty and integrity of India or public order or ‘morality’ and place reasonable restrictions on the exercise of the above right.

III. HISTORY OF THE TRADE UNION MOVEMENT IN INDIA The labour movement in India is over 15 decades old, and it may be traced from 1860s.3 Early years of the movement were generally led by philanthropists and social reformers, who organized workers and protected them against inhuman working conditions. The early years of labour movement were often full of difficulties. Strike committees emerged which called themselves trade unions and demanded the privileges of trade unions without any means of discharging responsibilities thereof.4 The position of trade unions has considerably improved since then. The number of trade unions have gone up and their membership and funds have increased. The development during the span of about 151 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 since. The principal purpose of this section is to trace the origin and development of trade union movement in India. In this process, an effort will be made to state the characteristics of labour movement and the factors which were responsible for the growth of trade union movement during the specified period.

A. Pre-1918 Period The earliest sign of labour 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 reflected upon the gross cruelties perpetrated by foreign planters with the aid and under the protection of laws framed by the British Government specially for this purpose.5 Thereafter, the system of indigo cultivation was abolished due to discovery of synthetic process. In 18756 Sarobji Shapuri in Bombay protested against poor working conditions of workers at that time.7 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 labour. 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, Mr N M Lokhande organized the conference of 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.8 In 1889, in Bombay, workers of spinning and weaving mills demanded Sunday as holiday, regularity in the payment of wages and adequate compensation in case of accident.9 Inspite of these agitations, no material change could be brought and, therefore, another representation was made to the government in 1890. The stand of 1884 was also reiterated and the petition this time was signed by 17,000 workers. The same year, the Bombay Mill Hands Association, the first labour association was organized10 with Mr Lokhande as its President. It started a labour journal (Dinbandhu) in order to propagate effective views of their own. In the very same year, Bombay Mill Hands Association placed its demand before the Factory Labour Commission (1890), with Mr Bangalee, the great philanthropist as a member. The Commission gave due consideration to the demands of labour. Several labour 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,11 the Printers Union, Calcutta was formed in 1905, the Bombay Postal Union was formed in 1907, the Kamgar Hityardhak Sabha and Service League were formed in 1910. The post-1890 period was also important for the reason that several strikes occurred during this period. Instances, may be cited of two strikes which occurred in Bombay in 1894. The first big strike of mill operators of Ahmedabad occurred 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.12 There were also strikes in jute industries in Calcutta in 1896.13 In 1897, after a plague epidemic, the mill workers in Bombay went on strike for payment of daily wages instead of monthly payment of wages.14 In 1903, the employees of press and machine section of Madras

Government went on strike against overtime work without payment. The strike prolonged for six months and after great hardship and starvation, 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 gazetted holidays; (ii) imposition of irregular fines; (iii) low rate of overtime pay; and (iv) the refusal of authorities to grant leave on medical certificate.15 The strike continued for over a month. The workers returned on fulfilment of certain demands. In December 1907, the workers of 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 the region. In the same year, the Bombay Postal Union and Indian Telegraph Association called a strike. In 1908, workers of textile operators in Bombay struck work in sympathy with Shri 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. Certain broad features of the labour movement during the period of 1860– 1917 may be briefly noted: First, the movement was led by philanthropists and social reformers and not by workers. Second, there was no trade unions in the modern sense. According to the report on the working of the Factories Act at Bombay, in 1892, the Bombay Mill Hands Association was not to be classified as a genuine trade union. The following excerpts of the report are pertinent: The Bombay Mill Hands have no organized trade unions. It should be explained that although Mr N M Lokhande, who served on the last Factory Commission, described himself as President of the Bombay Mill Hands Association, that Association has no existence as an organized body, having no roll of membership, no funds and no rules. I understand that Mr Lakhonde simply acts as volunteer adviser to any mill hand who may come to him.16 But, the trade unions existed as early as 1897. For instance, the

Amalgamated Society of Railway Servants of India and Burma and other unions were formed in April 1897. Third, the associations mainly relied on petitions, memoranda and other constitutional means for placing their demands which were mainly confined to factory legislation, e.g., hours of work, health, wages for overstay, leave, holidays and such other matters. Fourth, the early movement was confined to revolt against conditions of child labour and women workers employed in various industries. Fifth, there was absence of strike as a means of getting grievances redressed. The association of workers worked with the cooperation of management and government officials and some of them considered it their duty ‘to avoid strikes upon the part of its members by every possible and lawful means’17 Sixth, strike during this period was considered to be a problem of law and order, instances are not lacking where police acted upon strikers by using force and framed false charges against them.18

B. 1918–1924 The period 1918–1924 can perhaps be best described as the era of formation of modern trade unionism. This period witnessed the formation of a large number of trade unions. Important among these were Madras Labour Union, Ahmedabad Textile Labour Association, Indian Seamen’s Union, Calcutta Clerks’s Union and All India Postal and RMS Association. One of the significant features of this period was that the All India Trade Union Congress was formed 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 labour in some industries due to influenza epidemic.19 Several factors were responsible for formation and growth of trade unions: First, the economic conditions of workers played an important role in the formation of trade unions. The demand for Indian goods increased enormously for two reasons: (i) The shortage of shipping facilities led to restricted imports of several commodities for which India was dependent on foreign countries; (ii) There was great demand for Indian goods from allies and neutral countries. For these reasons the prices of Indian commodities, viz., salt, cotton, cloth, kerosene, rose high. Naturally, the cost of living steadily increased. The employer earned

huge profits. The wages of workers were increased but not in pace with the soaring prices of commodities. This resulted in further deterioration of conditions of workers. Further, there was shortage of labour in some industrial centres due to epidemic of influenza.20 These reasons led to the formation of trade unions to improve their bargaining positions. Second, the political conditions prevailing in the country also helped the growth of the labour movement. The struggle for independence started during this period and political leaders asserted that organized labour would be an asset to the cause. The labour unions were also in need of some help. The political leaders took lead and helped in the growth of trade unions. Third, the workers’ revolution in Russia which established the first workers’ State in the world had its own influence on the growth of trade union movement. Fourth, was the worldwide unrest in the post-war period. The war awakened in the minds of industrial workers. Fifth, was the setting up of the International Labour Organization in 1919 of which India was the founder member. The constitution of ILO required one representative from the governments of member states. The government, without consulting the unions, appointed Shri N M Joshi as its representative. This propelled the workers to organize. As a result, AITUC was formed in 1920. This gave an opportunity to send members for ILO conferences and also brought a change in government attitude while dealing with labour problems.

C. 1925–1934 This period witnessed a split in AITUC into leftist and rightist wings. Later in 1929, a wing of AITUC, namely, the All India Trade Union Federation was formed. The main cause behind Communist influence was the economic hardship of workers. This period also showed 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 registration of trade unions and affords legal protection to intervene in trade disputes. The latter Act provided for ad hoc conciliation board and court of inquiry for 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.

D. 1935–1938 During this period, unity was forged among trade unions. This led to a revival of trade union activity. In 1935, the All India Red Trade Union Congress merged itself with the AITUC. Again, in 1938, an agreement was arrived at between All India National Trade Union Federation and AITUC and consequently, NTUC affiliated itself with AITUC.21 Several factors led to this revival of trade unionism. First, the change in political set up in the country was responsible for the change. It is significant that Congress Party which formed its government in 1937 in several provinces tried to strengthen the trade union movement and to improve the conditions of labour. Second, the working class was also awakened to their rights and they, therefore, wanted to have better terms and conditions of service. Third, management also changed its attitude towards trade unions. The year 1938 saw the most important state enactment, viz., the Bombay Industrial Disputes Act, 1938. The significant features of the 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 labour 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 of 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.’22 The scope of the Act was limited to certain industries in the province.

E. 1939–1946 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 outpaced the increase in wages. Second, there was a split in AITUC due to nationalist movement. Third, the post-World War II period 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 orders 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 labour 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 establishments and thereby to minimize industrial conflicts.23 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 workmen.24 Another important enactment at state level was the Bombay Industrial Relations Act, 1946. The Act made elaborate provisions for the recognition of trade unions and rights thereof.

F. 1947 and Since With Independence, the trade union movement in India got diversified on political considerations. The labour leaders associated with the National Congress Party formed the Indian National Trade Union Congress in 1947. The aim of the INTUC was ‘to establish an order of society which is free from hinderances 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 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 known as Hind Mazdoor Sabha. The aims and objects of the Sabha were to: (i) promote the economic, political, social and cultural interest of the Indian working class; (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’.25 A year later in 1949, another organization, namely, the United Trade Union Congress was formed. The aims and objects of the United Trade Union Congress as given in its constitution were: (i) establishment of socialist society in India; (ii) establishment of a workers and peasants state in India; (iii) nationalization and socialization of the means of production; (iv) safeguarding and promoting the interests, rights and privileges of the workers in all matters, social, cultural, economic and political; (v) securing and maintaining for the workers’ freedom of speech, freedom of press, freedom of association, freedom of assembly, right to strike, right to work or maintenance and the right to social security; and (vi) bringing about unity in the trade union movement.26 The same year also witnessed the passing of the Industrial Disputes Act, 1947 and the Trade Unions (Amendment) Act, 1947. The former Act introduced the adjudication system on an all India level. It prohibits strikes and lockouts without giving 14 days’ prior notice and during the pendency of conciliation proceeding before a conciliation officer in public utility services. In public and non-public utility services, it prohibits strikes and lockouts during the pendency of proceedings before board of conciliation, labour court, tribunal, national tribunal and arbitration (when a notice is given under Section 10-A of the Act). The Act further prohibits strikes and lockouts during the operation of settlement or award in respect of any matter covered under settlement or award. The latter Act brought several changes of great significance. It provided for recognition of trade unions and penalties for unfair labour practices by employers and unions. But the Act has not yet been enforced. Again in 1950, the Trade Unions’ Bill was introduced in the Parliament providing for registration and recognition of trade unions and penalties for certain unfair labour practices. On dissolution of the Parliament, the bill lapsed and has since not been brought forward by government before the Parliament. Political involvement continued even after 1950. In addition to four major all India organizations discussed above, three unattached unions dominated by

one or the other political parties were formed. For instance on 23 July 1954, a federation namely, Bharatiya Mazdoor Sangh (BMS) was formed in Bhopal by Jan Sangh Party, presently known as Bhartiya Janta Party. The main object of BMS is to check the increasing influence of the Communist unions in the industry and cooperate with non-Communist unions in their just cause. A year later, Hind Mazdoor Panchayat, a new trade union organization by Sanyukt Socialist Party and Indian Federation of Independent Trade Unions which have no affiliation with any political party, were formed. The period also saw amendments in the Trade Unions Act in 1960. The amended Act brought four new provisions: (i) minimum membership subscription was incorporated; (ii) the registrar of trade unions was empowered to inspect account books, register, certificate of registration and other documents connected with the return submitted by them under the Trade Unions Act; (iii) government was empowered to appoint additional and deputy registrar with such powers and functions as it deemed fit; (iv) fate of the application for registration where applicants (not exceeding half of them) ceased to be members or disassociated themselves from the application was statutorily decided. Some independent trade unions met at Patna on 21 March 1964 and decided to form the All India Independent Trade Union Congress, but this effort to unite the unaffiliated unions did not continue for a longer period and met an early death. The Act was once again amended in 1964. It made two changes: (i) it disqualified persons convicted by the court of an offence involving moral turpitude from becoming office-bearers or members of the executive of a registered trade union; and (ii) it required for submission of annual returns by registered trade unions on a calendar year basis. 1970 witnessed another split at the national level in the AITUC. The decision of Communist group, which decided not to remain within the AITUC resulted in the formation of a separate organization, namely, Centre of Indian Trade Union by the Marxist Communists. A further split took place in 1970–72. During the period, there was a split in the United Trade Union Congress and another organization namely, the United Trade Union Congress Lenin Sarani was formed.

G. The Unity Move In 1972, a new experiment was made when three central trade union organizations, namely, the HMS, the INTUC and the AITUC, in the meeting held on 21 May 1972 at New Delhi agreed to establish a National Council of

Central Trade Unions for the purpose of promoting understanding, cooperation and coordination in the activities of the central trade unions, to defend the interests of the working class and the trade union movement, and help towards the development of the national economy on a democratic, self-reliant and nonmonopoly basis, to overcome trade union rivalry and bring about trade union unity for common objectives and action. However, this organization could not survive for a longer period and met an early death. The year also witnessed the emergence of the Trade Union SEWA by leading workers in Ahmedabad. Ms Ela Bhatt has been instrumental for the same. In September 1977, an All India Convention of Central Organization of Trade Unions including CITU, BMS, HMS, HMP and the TUCC was called which demanded time-bound programmes ensuring reduction in wage disparity, national wage and price policy and need-based wages for industrial and agricultural workers. In 1981, once again unity was shown by the trade unions in the protest against the promulgation of the Essential Services Maintenance Ordinance, 1981 and also the Bill in that regard in the Parliament. A year later in 1982, the Trade Unions (Amendment) Bill, was introduced in Lok Sabha. The Bill proposed to make the following amendments in the Act, namely: (i) To reduce multiplicity of unions, it proposed to change the existing provision of enabling any seven workmen to form a trade union by providing for a minimum qualifying membership of 10 per cent of workmen (subject to a minimum of ten) employed in the establishment or industry where the trade union is proposed to function or 100 workmen, whichever is less, for the registration of trade unions; (ii) There is at present no machinery or procedure for resolution of trade union disputes arising from inter-union and intra-union rivalries. It proposed to define the expression ‘trade union dispute’ and to make provision for resolving such disputes through voluntary arbitration, or by empowering the appropriate government and the parties to the dispute to refer it to the registrar of trade unions for adjudication; (iii) The Act does not lay down any time-limit for registration of trade unions. It proposed to provide for a period of 60 days for the registration of trade unions by the registrar after all the formalities have been completed by trade unions. It also proposed to provide that a trade union whose certificate of registration has been cancelled would be eligible for reregistration only after the expiry of a period of 6 months from the date of cancellation of registration, subject to certain conditions being fulfilled by

the trade union; (iv) Under the existing provisions of the Act, 50 per cent of the office bearers in the executive of a registered trade union shall be persons actually engaged or employed in an industry with which the trade union is connected. It proposed to enhance this limit to 75 per cent so as to promote development of internal leadership; (v) It proposed to empower the registrar of trade unions to verify the membership of registered unions and connected matters and report the matter to the state and Central Governments; (vi) Penalties specified in the Act for the contravention of its provisions were proposed to be enhanced.27 In order to reduce multiplicity in trade union, strengthening their bargaining power and to provide check-off facilities to trade union, the Bill seeks to provide that in relation to a trade union of workmen engaged or employed in an establishment or in a class of industry in a local area and where the number of such workmen are more than 100, the minimum membership for the registration of such trade union shall be 10 per cent of such workmen. Such unions shall be eligible for registration only if they meet this minimum test of strength. From this it follows that the setting up of bargaining councils (which will be able to negotiate on all matters of interest to workmen with employers) will to some degree bring confidence and strength. The limitations placed upon the leadership of trade unions by restricting the number of non-workmen as office-bearers of a trade union to two and the provision that a person can become an office-bearer or a member of an executive of not more than seven registered trade unions will go a long way in developing internal leadership in trade unions. The Bill also provides for the constitution of a bargaining council for a three year term to negotiate and settle industrial disputes with the employer. The check-off system would be normally adopted for verification of the strength of trade unions in an industrial establishment, though the Bill provides for the holding of a secret ballot in certain exceptional circumstances.28 While the unit-level bargaining council will be set up by the employers, the appropriate government will be empowered to set up such councils at industry level. All the registered trade unions will be represented on the bargaining councils in proportion to their relative strength, but any union with a strength of not less than 40 per cent of the total membership of the workmen in an industrial establishment will be recognized as the ‘principal agent’. If there is no trade union having members among the workmen employed in an industrial establishment, a workmen’s council will be set up in such a manner as may be

prescribed. The Central Government will also be empowered to constitute such bargaining councils at the national level. However, the aforesaid Bill lapsed. Six years later, the Trade Unions and the Industrial Disputes (Amendment) Bill, 1988 was introduced in the Rajya Sabha on 13 May 1988 but it has not yet received the colour of an Act. The Government of India had in 1997, approved certain amendments to the Trade Unions Act, 1926. The objective of these amendments is to ensure organized growth of trade unions and reduce multiplicity of trade unions. The Trade Union Amendment Bill, 1997 was to be introduced in the Rajya Sabha in the winter session of the Parliament in the year 1997, but due to various reasons, it was not introduced.29 During 1999, a consensus emerged among the leading trade union federations like the BMS, AITUC, CITU and INTUC on protection to domestic industry, strengthening the public sector units by way of revival and induction of professionals in the management and amendment of labour laws and inclusion of rural and unorganized labour in the social safety net.30 The year 2001 witnessed several amendments of much relevance, in the Trade Unions Act, 1926. However, this amendment came into force w.e.f. 9 January 2002. During 2009, the Workmen’s Compensation Act, 192 was amended on the recommendation of the (Second) National Commission on Labour. Another development in this year was the enactment of the Unorganized Workers’ Social Security Act, 2008 which came into force with effect from 16 May 2009. A year later, the Employees’ State Insurance Act, 1948 was amended by the Employees’ State Insurance (Amendment) Act, 2010. Moreover, the Payment of Gratuity Act, 1972 was amended by the Payment of Gratuity (Amendment) Act, 2010 and the Plantation Labour Act, 1951 by the Plantation Labour (Amendment) Act, 2010. Another major legislative development was the amendment in the Industrial Disputes Act, 1947 by the Industrial Disputes (Amendment) Act, 2010 which came into force with effect from 19 August 2010. During 2009, a consensus emerged among major central trade unions including BMS, INTUC, AITUC, HMS, CITU, AIUTUC, TUCC, AICCTU and UTUC which had organized the National Convention of Workers in Delhi on 14 September 2009 and decided to launch joint action programme on price rise, labour law violations, job losses, creation of National Social Security Fund for Unorganized Workers and against disinvestment of profit-making PSUs. The National Convention was followed by All India Protest Day on 28 October 2009.

The trade unions also met the Prime Minister on 17 September 2009 and urged upon him to address the above main concerns of the working people effectively. As a follow up, central trade unions staged massive dharna before Parliament on 16 December 2009 as a protest against government inaction to control price rise, check labour law violations, non-creation of National Fund for Unorganized Workers Social Security, loss of jobs in the name of recession and disinvestment of profit-making public sector undertakings. Similar joint dharnas have been staged all over the country in state capitals and industrial centres. The trade unions being dissatisfied with the attitude of the government in not taking any appropriate steps to meet the five demands, the workers went on Satyagraha/Jail bharo on 4 March 2010 all over the country, for the aforesaid demands. On 28 February 2012, a national strike was called by 11 central trade union organizations (including AITUC, BMS, CITU, HMS, INTUC, AITUC, TUCI and NLO) supported by about 5,000 other smaller trade unions for their 10-point charter of demand which included rising unemployment, labour right violations, mass contractualization, price rise particularly of essential commodities, universalization of social security, etc. It was not only successful in bringing together the much-divided trade union movement but was also able to convey its seriousness over the issues facing the working class.

H. A Broad Survey 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 Labour 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 labour leaders. ‘The early … trade union movement (was) often full of difficulties. Strike committees called themselves trade unions and demanded the privileges of trade unions, without any means of discharging the responsibilities thereof.’31 The position has considerably changed since then.

The number of unions has gone up and membership and funds of trade unions have increased.

IV. EXISTING STRENGTH OF CENTRAL TRADE UNIONS As per the report of the Ministry of Labour, Government of India, the strength of central trade unions as per the verification of membership of trade unions as on 31 December 2002 was as follows: (i) BMS (ii) INTUC (iii) AITUC (iv) HMS (v) CITU (vi) UTUCLS (vii) UTUC (viii) AICCTU (ix) TUCC (x) SEWA (xi) LPF (xii) NIFTU CDHN

– – – – – – – – – – – –

6215797 3954012 3442239 33384.91 2678473 13,73268 606935 639962 732760 688140 6115 06 569599

Source: Govt. of India; Ministry of Labour and Employment, Order No L–52025/20/2003–1R (IMP–1) dated 11.1.2008

V. CURRENT ISSUES The (Second) National Commission on Labour in its report of 2002 gave the following account on the development of trade union movement. (i) The trade union movement in India has now come to be characterized by multiplicity of unions, fragmentation, politicization, and a reaction that shows a desire to stay away from politically-oriented central federation of trade unions and struggles for cooperation and joint action. (ii) One sees an increase in the number of registered unions in the years

(iii)

(iv)

(v)

(vi)

(vii)

from 1983 to 1994. But one also sees a reduction in the average membership per union and in the number of unions submitting returns. There are other unions that have founded into bodies relating to certain industries or employment, but have kept out of the main central trade union federations. This includes National Alliance of Construction Workers, National Fish Workers’ Federation, National Alliance of Street Vendors, etc. We must also make specific mention of the emergence of the trade union—SEWA group of organization. It did not confine itself to the traditional method of presenting demands and resorting to industrial action in pursuit of them. It took up the work of organizing the women workers who were engaged in unorganized sector of employment, combining other constructive activities like marketing, the provision of micro-credit, banking, training and representing the views and interests of workers. There is yet another development on the trade union scene which relates to the increasing tendency on the part of trade unions to get together in ad hoc struggle committees to launch struggles, or to support a struggle that one of them has launched. Another new feature is the readiness and the determination of central trade unions to escalate the objective to matters of government policy like, disinvestment, privatization, etc. Instances of such action were witnessed in the strike on BALCO privatization, the Rajasthan agitation by the government servants and the strikes by electricity workers in U P, government employees in Kerala, and so on. A grave threat to the authentic trade union movement seems to be emerging from the underworld. There are also reports of some cases where such unions have succeeded through other means. Many questions arise. The primary question perhaps is: what are the methods or abnormal methods that these new ‘leaders’ employ, and how can the authentic trade unions, the management and industry as a whole be protected from the inroads and tactics of these interlopers from the underworld. The use of terror in any form will only nullify democratic rights by creating an atmosphere in which people are forced to act or not to act merely to protect their skin. It has therefore, become necessary to protect the workers as well as managements from such forces.

(viii)

There are trade union leaders who ask for abolition of contract labour but ultimately relent if the contract assignment is given to them or their benami agents. This makes a mockery of the trade union movement and brings down the trade union leaders in the esteem of employees.

(ix)

Another practice that undermines respect is that of permitting permanent workers to get their jobs done through proxy workers or letting others work in their place, and taking a cut form the wages of their proxies. Similar is the effect of so-called unions that take up the grievances of workers and charge a commission on the monetary gains they may secure. There is also a tendency to convert unions into closed shops.

(x)

VI. CLOSED SHOP/UNION SHOP The trade unions get greater strength and security if they have a contract over the supply of labour at pre-entry or at least post-entry level in the industry. In order to appreciate the feasibility of adopting such a system in India, it is necessary to examine the concept of closed shop and union shop. Lord Denning defines ‘closed shop’ as: A factory or workshop or firm in which all the workmen are members of trade union; it is closed to everyone except the members. Any newcomer who comes to work must join the union. If the newcomer refuses to do so, the union members will insist on his dismissal. They tell the employer, sack him or we will go on strike. The employer gives in. He dismisses the man, or the man gives in and joins the union.32 The First National Commission on Labour explains ‘closed shop’ as an agreement with the employer or at least his acquiesce to recruit only trade union members. On the other hand ‘union shop’ is one ‘by which new entrants to employment, if they are not union members, they must join the union within a specified period.’33 Unlike the industrially advanced countries like USA or UK, closed shop or union shop has not gained momentum in India. The committee appointed by the Government of Bihar in 1956 strongly opposed the system of closed shop on

the ground that ‘the right of the citizens to seek and get employment is one of the fundamental rights guaranteed under the Constitution and any interference with that right in the shape of prior membership of a trade union would impose an unreasonable restriction on the right to work.’ The same line of approach was adopted by the First National Commission on Labour. According to the Commission, closed shop is neither practicable nor desirable. Indeed it is against the fundamental right of association guaranteed under Article 19 (1) (c) of the Constitution.34

VII. EMPLOYERS’ ORGANIZATIONS A. Need to Form Employers’ Organizations We have seen in previous section that a workers’ get together for joint action through a trade union, meets the employer on equal terms. Like-wise, employers organize themselves in furtherance of common objectives of evolving common attitudes to labour or approaches to national policies, as also for standardization of wages and other conditions of employment in an industry within a local area35. The following are the main objectives: (i) to promote collective bargaining at different levels; (ii) to develop healthy and stable industrial relations; (iii) to bring a unified employers’ viewpoint on various issues of industrial relations; and (iv) to represent employers’ organization in the meetings of ILC and SLC boards in conformity with tripartite approach to labour matters.36

B. Origin and Growth The origin, growth and development of employers’ organizations have three distinct phases :(i) the period prior to 1930; (ii) the period between 1931 to 1946; and (iii) the post-Independence period. Each phase reveals its own structural and functional characteristics; in each period the organizations had to undergo changes because of contemporary economic, social and political developments. These changes have been more rapid in some than in others. The periods referred to also coincided with important developments in the labour field, and these have had a great impact on the pattern and development of employers' organization as also on their functioning37.

1. Pre-1930 period: This period was characterized mainly by the formation of associations of merchants in the form of chambers of commerce. During the latter half of the last century, industrial associations also came into being with the aim of protecting the commercial interest of their members and securing concessions from the government. Regional associations at important centres of industrial activity developed, but again with a different focus for action. The Bombay Mill-Owners Association, the Bengal Mill-Owners' Association, the Ahmedabad Mill-Owners' Association are instances in point38. 2. 1931–1946: Organizing chambers of commerce and industrial associations for dealing with a variety of problems connected with industry was the rule prior to 1930. Some of these chambers dealt with labour matters too.39 The All-India Organization of Industrial Employers (AIOIE)40 and the Employers' Federation of India (EFI) came into existence in 1933 to comprehend and deal with problems of industrial labour in a concerted manner. The All-India Manufacturers’ Organization (AIMO) was formed in 1941. The setting up of these organizations was again, as in the case of workers unions, in response to the need then felt for representation on international conferences and legislative bodies.41 3. Post-Independence period—The period since Independence witnessed the growth of planning, expansion of industrial activity, extension of the democratic apparatus, passing of several labour laws and a growing trade union movement, all of which acted as a spur for the strengthening and expansion of employers’ organizations. Experience of working together convinced employers of the advantage of united action. Employers' organizations grew in strength mainly to meet the requirements of individual employers for advice on labour matters. In some cases, they built up their strength to match that of organized labour; in others, it was the other way round. At present, employers’ organizations are organized at three levels namely: (a) employers operating through their local organizations or otherwise; (b) industrial associations which cut across state boundaries; and (c) federations which comprise representatives both of industries and centres. Of the three, the local organizations which operate mainly through the chambers of commerce cover all industries in an area; their activities in the labour field are comparatively less extensive. This period witnessed significant developments and several employers’ organizations and federations were set up. However, multiplicity of organizations at the national level has not been a problem with employers' interest at tripartite forums. This has, for all practical purposes, been effectively

secured by the main employers' organizations coming together under the CIE. But the AIMO is outside the CIE. The First National Commission on Labour felt that it will be desirable that CIE brings this organization also within its fold. Some organizations at the industry level and the Employers' Federation of India at the national level, originally registered under the Companies Act, are now registered under the Trade Unions Act, 1926, while many are still outside its purview.

C Role and Functions of Employers’ Organizations The main role and functions of an employers’ organization is to protect and promote the interest of its members. The membership of employers’ organizations is basically composed of corporations/employers. All enterprises have to meet the test of economic viability. For a proper appraisal of the role and functions of an organization, this aspect cannot be ignored. Thus, its activities are designed and directed in such a manner that their members stand to gain. Also the organizations have to work on a broader plane; labour problems are only a part of their overall responsibilities. Economic, commercial and fiscal matters and policies are equally or even more important for them. The organizations represent their members’ view in formulation of government's policies, rules and regulations and in giving advice to members on the interpretations and extent of applicability of agreements arrived at various bipartite and tripartite bodies and on Acts and regulations which come into force. Labour departments/advisory services, which have come in vogue in many employers' organizations to advise and assist members have been the direct consequence of the recognition of these functions.42 Employers’ organizations find it necessary to have legislative support for realization of their objectives. The pursuit of their activities leads to their involvement in politics or to their developing lobbies without directly aligning themselves with any political party. There is evidence on record to show that individual employers and not the employers' organizations have used these avenues to the extent necessary although providing finances to political parties or sponsoring candidates are not unknown to the organizations or industrial associations—national or local. Political activity by employers' associations may be as inimical to peace in industry as that by workers' associations, particularly when we are envisaging employers’ organizations to include both public and private sector units. This should be eschewed. It is thus, that they will be able to establish rapport between the two sectors and work exclusively in the interest of industry rather than in the sectional interests of one or the other form of

ownership.43 The pursuit of economic gains by employers’ organizations does not mean that they should not recognize social responsibilities. With planned economic development and increasing democratization of the institutional framework of society, there is active consultation by the state with all organizations, including those of employers, for formulation, inter alia, of economic, educational, social and labour policies. Employers’ organizations are, therefore, expected to take a stand consistent with the social and economic objectives of the community/country as a whole and be active in promoting policies and measures that are not contrary to the general interest of the community. Along with their gains, they should keep in view the needs of the developing economy, the requirements of planned growth, importance of maintenance of peace in industry and the desirability of an equitable distribution of national wealth. There can, however, be differences as in the case of trade unions, as to the priority between the interest of the community and the employers.44

D. Employers’ Federations 1. Employers’ Federation of India: The principal objects for which the EFI has been established are embodied in its constitution. These are : (i) to promote and protect the legitimate interests of employers engaged in industry, trade and commerce; (ii) to maintain harmonious relations between management and labour and to initiate and support all well-considered schemes that would increase productivity and at the same time, give labour a fair share of the increased return; (iii) to collect and disseminate information affecting employers and to advise members on their employer–employee relations and other ancillary problems. These objects lie within the field of ‘industrial relations’. Although consideration of broad economic problems is not altogether excluded, the EFI does not generally comment on commercial questions of customs, taxation and the like which lie in the sphere of the Associated Chambers of Commerce and Industry.45 2. The All India Organization of Employers : The objects of the AIOE inter alia include: (i) To take all steps which may be necessary for promoting, supporting or

opposing legislative and other measures affecting or likely to affect directly or indirectly, industries in general, or particular industries; (ii) To nominate delegates and advisors, etc., to represent the employers at the International Labour Conference, United Nations Organization, International Chamber of Commerce and other conferences and committees affecting the interests of trade, commerce and industries, whether as employers or otherwise; (iii) To promote and support all well-considered schemes for the general uplift of labour and to take all possible steps to establish harmonious relations between capital and labour".46 3. The All India Manufacturers’ Organization: The objectives of the AIMO are : (i) To help in bringing about rapid industrialization of the country through sound and progressive economic policies; (ii) To help in increasing the aggregate wealth of India; (iii) To raise the standard of living of the people of India by utilizing to the fullest possible extent all the available national resources and talent in the country; and (iv) To play a positive role in relieving the pressure of population on land. The industrial relations functions of the AIMO are similar to those of the EFI and AIOE. All these federations function through their regional offices. 4. Council of Indian Employers: The Council of Indian Employers founded in 1956 is responsible for choosing delegates to represent Indian employers in international conferences/committees. It is this Council which is a member of the International Organization of Employers at Brussels in place of the AIOE and the EFI. The period since Independence is thus particularly important because of the joint approach by employers to deal with labour problems, informally in the first half and somewhat more formally in the second. Building up of adequate specialized advisory services in labour matters and training of management and personnel officers at various levels have been the result of this joint approach, although a beginning in this direction had been made earlier by individual industrial associations.47 5. Federation of Indian Chambers of Commerce and Industry (FICCI): FICCI was established in 1927. It is the largest and oldest apex business organization in India with a nationwide membership of over 1,500 corporates and 500 chambers of commerce. Its activities are representative, legislative and promotional. The Federation is represented in various advisory committees appointed by the

government. It also provides training programmes and organizes seminars and conferences. It works with the government on policy issues and on enhancing efficiency, competitiveness and expanding opportunities for industry. 6. The Associated Chamber of Commerce and Industry of India (ASSOCHAM): The membership of ASSOCHAM is confined to local chambers of commerce. It provides advisory service on labour matters. It has been given representation on many consultative bodies set up by the government. 7. Standing Conference of Public Enterprises (SCOPE): It is one of the three constituents of the Council of Indian Employers and is a member of the International Organization of Employers. It represents employers at various tripartite forums and committees. It has representations on the boards of Central Provident Fund, the Employees' State Insurance Board, National Apprentices Board, National Workers’ Education Board, National Productivity Council and many other committees/boards. It also represents employers at ILO conferences. The main tasks of SCOPE are both internal and external to the public sector. Internally, it endeavours to assist the public sector in such ways so as to improve its performance. Externally it seeks to provide required information and assist the public sector to improve its performance and advise the community and the government in order to help public sector in its role.

1 2 3

Coimbatore Periyar Districts Dravida, Panjalal Thozhilalar Munnetra Sangam v. National Textile Corporation Limited, 2011 LLR 1076 (HC Madras). See All India Bank Employees‘ Association v. National Industrial Tribunal, AIR 1962 SC 171: Damyanti v. Union of India, AIR 1971 SC 966. N M Joshi, The Trade Union Movement in India (1927), 8 and R F Rustomji, The Law of Industrial Disputes in India (Law Publishing House, 1961), XCIV: (contd.) Most of the writers on the subject trace the history of labour movement in India since 1875 or even later. See for instance, S D Punekar, Trade Unionism in India, Ahmad Mukhtar, Trade Unionism and Labour Disputes in India, Longmans Green and Co. Ltd (1935); Shiva Rao, State in Relation to Labour in India. Chapter VI; R K Das. The Labour Movement in India, Berlin de Gruyter (1923) 65; A S Mathur; and J S Mathur; Trade Union Movement in India, Allahabad, Chaitanya Publishing House, (1962) 12, 14; V V Giri, Labour Problems in Indian Industry, Bombay, Asia Publishing House (1959), 1; C A Myres, Industrial Relations in India, Bombay, Asia Publishing House (1958) 100; C B Kumar. The Development of Industrial Relations in India, Bombay, Orient Longman, (1961), 87; N F Duftry, Industrial Relations in India, Bombay, Allied Publishers Private Ltd, (1964); T N Bhagoliwal, Economics of Labour and Social Welfare, Agra, Sahitya Bhawan (1966), Chapter VI; Indian Law Institute, Labour Law and Labour Relations,

5 6 7 8

9 10

11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Rev S C Srivastava, New Delhi, (2007). The period between 1875–1917 has been described as the social welfare period of early trade union movement by Dr S D Punekar. Dr R K Das has divided the period of 1875– 1917 into two sections. The first period between 1875–1891, according to him, was devoted mainly to the regulation of women and child labour in Indian factories. In the second period (1891–1917), very little was done except placing memoranda before commissions and committees. R F Rustomji, op. cit., XCLIV. The deplorable condition of workers were brought to the notice of the Secretary of State for India and the first Factory Commission was set up in 1875. V V Giri, Labour Problems in Indian Industry, Bombay, Asia Publishing House, (1959), 1. R K Das, The Labour Movement in India, Berline de Gruyer (1923) 9; Ahmad Mukhtar, Trade Unionism and Labour Disputes in India, Bombay, Longmans Green and Co. Ltd, (1935), 11; C B Kumar, op. cit., 87. Ahmad Mukhtar, op. cit. 11. The Bombay Mill Hands Association cannot, however, be classified as a genuine trade union. The workers did not have any effective organization of their own. The Bombay Mill Hands Association has no existence as an organized body, having no roll of membership, no funds and no rules. (See Report on the Working of Factories Act in Bombay, 1892). Ahmad Mukhtar, op. cit., 13. Annual Provincial Factory Report for Bombay for the year 1895, 5–6. G Ramanujam, Story of Indian Labour. Gopal Ghosh, Indian Trade Union Movement. Ahmad Mukhtar, op. cit., 4. Report on the Working of Factories Act at Bombay, (1892), 15. S D Punekar, op. cit., 59. See AITUC Report of the First Session held at Bombay, (1920), 12. Shiv Rao, op. cit. Shiv Rao, The Industrial Workers in India, 19. For instance see National Federation of AITUC. See Government of India, Report of the National Commission on Labour, New Delhi. (1969), 319. S S Rly Co. v. Workers Union, AIR 1969 SC 513. Preamble of the Industrial Employment (Standing Orders) Act, 1946. Constitution of the Hind Mazdoor Sabha. Constitution of UTUC. See ‘Statement of Objects and Reasons’ appended to the Bill. Ibid.

29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47

Government of India, Ministry of Labour, Annual Report 1997–98. 31. See Economic Times, New Delhi, February 14, 1999. See the Report of the Bombay Industrial Disputes Committee, 1922. Lord Denning, The Closing Chapter (1983), 197. Government of India, Report of the (First) National Commission on Labour (1969), 293. Government of India, Report of the (First) National Commission on Labour (1969) 298. N H Tata ‘Why Employers’ Organization? In Pursuit of Industrial Harmony—An Employer‘s perspective’, Bombay, National Institute of Labour Management (1975) 122. Ibid Ibid. Ibid. The role played by employers’ organization has been described in the Report of the Royal Commission on Labour. 316–17. This organization has since changed its name. It is now called All India Organization of Employers. Ibid. See Govt of India, Report of the [First] National Labour Commission (1969) 299. Ibid. Ibid. Supra note 41. Ibid. Ibid.

CHAPTER

5 Judicial Delineation of Statutory Definition of Trade Union and Trade Dispute I. THE DEFINITION Until 1926, no legislative attempt was made in India to delineate the contours of the expression ’trade union‘ or any of its synonyms. In 1926, Section 2(h) of the Trade Unions Act, 1926, inter alia, defines a ’Trade Union‘ to mean: 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. The dimensions of the aforesaid definition determine the permissible area of trade union activities. An analysis of the above definition reveals that a trade union: (i) must be a combination; (ii) such a combination should be either temporary or permanent; and (iii) should include any federation of two or more trade unions. Further, the definition recognizes that the objectives under its constitution are one or more of the following: (a) to regulate the relations: (i) between workmen and employers; (ii) among workmen; or (iii) among

employers; (b) to impose restrictive conditions on the conduct of any trade or business. But it shall not affect: (i) an agreement between parties as to their own business; (ii) agreement as to employment; (iii) agreement in consideration of sale of the goodwill of a business or profession, trade or handicraft.1 A delineation of the nature of trade unions requires description of: (1) the person who can become member of a trade union; (2) the place in relation to which trade unions are formed; and (3) the objectives of trade union. Let us now examine each of them.

II. MEMBERS OF TRADE UNIONS The Trade Unions Act, 1926, does not specifically provide persons who may be a member of a trade union2. However, the regulations framed under the Trade Unions Act, 19263 make it clear that the trade union may either be formed by workmen or employers. Section 2(h) of the Act and other provisions also confirm this view. It is therefore, necessary to delineate the contours of the expression ‘workmen’ and ‘employers’.

A. Workmen In the traditional sense4, trade union is used to denote the union of workmen. Further, the workmen constitute the major part of a trade union. It is, therefore, necessary to ascertain its meaning. The term ’workmen’ has not been independently defined in the Trade Unions Act. But in the definition of the term ’trade dispute’ in Section 2(g), the definition of the term ’workmen‘ is found which says: All persons employed in the trade or industry whether or not in the employment of the employer with whom the trade disputes arise. Broadly speaking, workmen must be: (a) persons; (b) employed; (c) in any trade or industry; (d) to do work. The definition of the term ’workmen‘ however raises various problems: First, whether the persons other than those who are employed to do any skilled or unskilled, manual, supervisory, technical or clerical work may be covered within the meaning of the word ’workmen‘? Second, whether the ’workmen‘ may be persons: (a) who are subjected to Army, Air Force or Navy Act; or (b) who are employed in the police service or as officers or other employees of a

prison; or (c) who are employed mainly in a managerial or administrative capacity or exercise functions mainly of managerial ’nature’? Third, whether the gratuitous workers may indulge in trade unions? Fourth, whether there should be a contract of employment between ’employers‘ and ’workmen‘? Fifth, whether there is any age restriction for becoming a member of a trade union? Sixth, whether badli workers are workmen? Seventh, can the dismissed, discharged or retrenched worker become member of a trade union? Let us turn to examine these issues. As to the first, it is significant to note that the term ’workmen‘ as defined in the Trade Unions Act, 1926 has a wide coverage and is not merely confined to only those persons who are employed to do any manual, skilled, unskilled, supervisory, technical, operational or clerical work. In other words, all persons employed to do any kind of work may be covered within the definition of ’workmen‘ provided they are employed in any trade or industry. The second problem may conveniently be divided in two categories. The employees of the first category, namely: (i) those who are subject to the Army, Air Force and Navy Act or (ii) those who are employed in the police service or as officers or other employees of a prison are not covered within the meaning of the term ’workmen‘ because they are not employed in the trade or industry. The employees of the second category, namely: (i) those who are employed mainly in the managerial or administrative capacity; or (ii) those who are employed in the supervisory capacity exercising functions mainly of managerial nature may conveniently be brought within the preview of ’workmen‘ provided they are employed in any ’trade‘ or ’industry‘. As to the third problem, it may be said that the definition of ’workmen‘ covers even gratuitous workers. It may, therefore, be possible for them under the Trade Unions Act, 1926 to be members of a trade union. The fourth problem requires careful scrutiny. According to the definition, it is not necessary that there should be a contract of employment between the ’employer’‘ and ’workmen‘. Indeed, the courts emphasize that an ’employee‘ does not cease to be an ’employee‘ merely because he is employed through intermediaries. Section 21 A (1) (i) of the Trade Unions Act, 1926 sheds sufficient light on the fifth problem. It, inter alia, provides that a person who has attained the age of 15 years, may be a member of registered trade unions unless the rules of trade unions provide otherwise. But a person who has not attained the age of 18 years can neither be an office-bearer of any such trade union nor can he be chosen a member of the executive of the unions.5

Formation of Trade Union by Badli Workers As to the sixth problem, the Andhra Pradesh High Court in Panyam Cement Employees Union v. Commr. of Labour6 held that badli workmen are ’workmen‘ and, therefore, if management disapproves of a trade union of badli workers or discourages badli workers to join a trade union or denies voting right to badli workers, the same would amount to unfair labour practice. The last problem requires due consideration. The definition unlike the Industrial Disputes Act, 1947, does not specifically include the dismissed, discharged or retrenched workers in its fold. Indeed, the use of the expression ’employed in the trade or industry‘ occurring in Section 2(g) of the Act and the expression ’union of workers engaged in industry occurring in Form A of the Central Trade Unions Regulation, 1938, make it highly doubtful whether the dismissed, discharged or retrenched workmen may be covered in the definition of ’workmen‘. It has been observed7 that the definition brings under the term ’trade union‘ not only combination of workmen, but also combination of employers such as employers‘ federation (or union of employers) or a combination of employers in any industry, imposing restrictions on the members in respect of prices to be charged from the customers, since one of the principal objects of the latter is to regulate the relations between employers. The Trade Unions Act, 1926, therefore, applies to employers‘ federation as it does to unions of workmen. It is, therefore, essential to know its coverage. The Trade Unions Act, 1926, does not define the term ’employer‘. However, Section 2(g) of the Industrial Disputes Act, 1947, defines an ’employer‘ to mean: (i) in relation to an industry carried on by or under the authority of any department of the Central Government or a state government, the authority prescribed in this behalf, or where no authority is prescribed, the head of the department; (ii) in relation to an industry carried on by or on behalf of a local authority, the chief executive officer of that authority. In Western India Automobile Association Ltd v. Industrial Tribunal,8 the Federal Court held that statutory definition is not exhaustive. Observed Justice Mahajan: In relation to (industries carried on by government or local authorities only) a definition has been given of the term ’employer‘ … No attempt, however, was made to define the term ’employer‘ generally or in relation to other persons carrying on industries or running undertakings. The proposition

has since been not challenged though, paradoxically, the provisions of the Industrial Disputes Act, 1947, have never been invoked to the industrial disputes arising in ’an industry carried on by or under the authority of any department of the Central or a State Government.‘ An ’employer‘ does not cease to be an ’employer‘ merely because instead of employing workmen himself, he authorizes his agent or servant to employ them.9 However, in view of the provisions of Section 18 of the Industrial Disputes Act, 1947, the coverage of the expression ’employer‘ has been extended to include his heirs, successors and assignees.

Formation of a Trade Union by Supervisors and Managers Can the supervisory officers and managers form a trade union under the Trade Unions Act? This question arose in Government Tool Room and Training Centre’s Supervisors and Officers Association v. Assistant Labour Commissioner.10 In order to deal with the issue, the court referred to the provisions of Section 2(g) of the Trade Unions Act which defines trade dispute to mean 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. It also referred to the provisions of Section 2(h) of the Trade Unions Act which defines ’trade union‘ to mean any combination, whether temporary or permanent, formed primarily for the purpose of regulating the relations between the 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. While interpreting the scope of the aforesaid two definitions, the Karnataka High Court observed that the word ’workmen‘ under the Trade Unions Act includes all persons employed in a trade or industry. It is not a restricted definition as in any other enactment of labour laws. When the Act itself provides for wider definition and for a wider meaning, the court cannot narrow it down by its decision. That would be against the very object of the Trade Unions Act itself. The court added that it is a well-settled principle of law that two conditions are necessary for interpreting an earlier enactment in the

light of the provisions of a later Act. They are: (i) the two Acts of the legislature must be in, pari materia, that is to say that they form a system or code of legislature; and (ii) the provisions in the earlier Act are ambiguous.

III. TRADE OR INDUSTRY After having discussed as to who may become the members of a trade union, it is necessary to determine the area in which the trade unions operate. The arena of interaction of trade union is ’trade or industry‘. The Trade Unions Act, 1926, however, does not spell out either the term ’trade‘ or ’industry‘. A question, therefore, arises whether the Trade Unions Act, 1926 is in pari materia with the Industrial Disputes Act, 1947. The Madras High Court11 has answered it in negative12 because in its view, a comprehensive meaning of the term ’industry‘ was considered by the legislature in regard to the Industrial Disputes Act. On the other hand, the Andhra Pradesh13 and Karnataka14 High Courts have taken the view that two enactments are in pari materia and that the expression ’trade or industry‘ in Section 2(g) of the Trade Unions Act carries the same meaning as the word ’industry‘ in Section 2 (j) of the Industrial Disputes Act. There is, however, no decision of the Supreme Court on this point. Section 2 (j) of the Industrial Disputes Act, 1947, however, defines the term, ’Industry‘ to mean: any business, trade, undertaking, manufacture or calling of employers and includes any calling services, employment, handicraft, or industrial occupation or avocation of workmen. The words used in the above definition are of very ’wide import‘. It will be observed that the word ’industry‘ is wide enough to include ’trade‘ in its ambit. It will be further noticed that the definition is in two parts. The first part defines ’industry‘ with reference to employers and the other part defines it with reference to workers. The words occurring in the definition are vague and have given rise to several disputes. Courts and tribunals have, therefore, been called upon to interpret and apply the key expression on innumerable occasions. An analysis of judicial response relating to the Trade Unions Act, 1926, reveals that the several organizations such as Employees‘ State Insurance Corporation,15 Provident Fund Organization,16 Fire Brigade Service,17 Devasthanam,18 CMT Institute19 have been held to be trade or industry under Section 2(j) of the Industrial Disputes Act, 1947 and the Trade Unions Act, 1926.

On the other hand, persons employed in the following are not employed in ’industry‘, e. g., Raj Bhawan,20 educational institutions run by Ramakrishna Mission,21 Pasteur Institute of Southern India and the Council of Scientific and Industrial Research,22 sovereign or legal functions23 of the state and a temple managed by trustee of a Devaswom governed by the Hindu Religious and Charitable Endowment Act, 1951.24

IV. OBJECTIVES OF TRADE UNIONS The Trade Unions Act, 1926 prescribes the primary objectives of a trade union. The objectives are one or more of the following: (a) to regulate the relations: (i) between employers; (ii) among workmen; or (iii) between employers and workmen. (b) to impose restrictive conditions on the conduct of any trade or business. The objectives for which the trade union is formed must comply with the aforesaid primary objects. In other words, the primary objects of trade unions determine whether the union is a trade union under the Act. The statutory provisions ’for only primary objectives in the Act, however, suggests that there may be some objectives other than the primary objectives of trade unions. These objectives may be broadly categorized as follows: (i) economic objectives; (ii) political objectives; and (iii) social and welfare objectives. This view is fortified by the provisions of section 15 of the Act.

V. TRADE DISPUTE ‘Trade dispute’ is defined in Section 2(g) of the Trade Unions Act, 1926 to mean: 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: Reading the definitions of ’trade union‘ and ’trade dispute‘ it is evident that any dispute, inter alia, between the employer and workmen

connected with the employment or non-employment, terms of employment or conditions of labour of any person would be a trade dispute and the term ’workman‘ includes all persons employed in the trade or industry. Any dispute between badli workers and the management is also a trade dispute. It is for this reason that when there was a settlement between the Mazdoor Union and Panyam Cement Co. in June, 2000, both the parties agreed on certain terms regarding assured employment to badli workers. In that view of the matter, badli workers cannot be excluded from participating in the election to recognize the majority trade union. Any other interpretation would lead to badli workers to lurch in helpless state of suspended animation.25

1 2 3 4

5 6 7 8 9 10 11 12

13 14 15

See proviso to Section 2(h) of the Trade Unions Act, 1926. Out of 402.3 million workers in terms of 2001 census, only 8.93 million were members of reporting registered trade unions during 2006. See for instance, Entry 4 of Form A; Application for registration of trade union prescribed under the Central Trade Unions Regulations, 1938. According to Sydney and Beatrice Webb in History of Trade Unions, ’a Trade Union is a continuous association of wage earners for the purpose of maintaining the conditions of their lives.‘ See Section 21 A. (2004) 1 LLJ 915. Radkhakishan Jaikishan Ginning and Pressing Factory v Jimnadas Nursery Ginning and Pressing Co. Ltd, AIR 1940 Nagpur, 228. Western India Automobile Association Ltd v. Industrial Tribunal, (1949) LLJ 245 (FC). Purushottam Pottery Works, (1958) 2 LLJ 523 (IT); Bombay Dock Labour Board and the Stevedores, (1953) 2 LLJ 200 (IT). (2002) Lab. IC 103. Rangaswami v. Registrar of Trade Unions, AIR 1962 Madras 231. ’I am very doubtful whether at all it could be said that the Industrial Disputes Act and the Trade Unions Act form as it were, a system or code of legislation so that either could be read together as pari materia, that is, as forming one system and interpreting one in the another. See supra note 11. T T Devasthanam v. Commissioner of Labour, (1979) 1 LLJ 448. C M T Institute v. Assistant Labour Commissioner, (1979) 1 LLJ 192. Registrar of Trade Unions v. Mihir Kumar Gooha, AIR 1963, Cal 56. In this case a question arose whether employees of Employees‘ State Insurance Corporation could form

18 19

a ’trade union‘ under the Trade Unions Act. The Registrar on an application made by the employees for registration first registered it but later cancelled its registration. Against the latter order of cancellation, an appeal was filed before the appellate court. The court set aside the order of the registrar cancelling the certificate of registration. Against this decision they preferred a Letters Patent Appeal before the division bench of the Calcutta High Court. The Division Bench, upholding the order of the single judge, observed: In my opinion, this test may well be applied to the expression industry as also ’trade‘ or ’business‘ as used in the Trade Unions Act. In this Act also, profit motive is not essential and providing of amenities or services to the community or a substantial portion of it would be sufficient to satisfy the test. The fact that such services are to be rendered by a statutory corporation makes no difference. The fact that a large number of employees are employed by an employer, to render services for particular class of persons in an organized manner is quite sufficient to bring the corporation within the mischief of the Act. The employees of such a corporation are, ’workmen‘ as defined in Section 2 (g) of the Trade Unions Act and are entitled to form a trade union and get it registered. The Court added the learned judge below had come to the right conclusion and rightly set aside the order of cancellation passed by the registrar of trade unions. Registrar of Trade Unions v. M Mariswami, (1973) 2 LLJ 256. In this case, the employees of the Provident Fund Organization made an application to the registrar of trade unions for the registration of its trade union called the Mysore State Provident Fund Employees Union under the Trade Unions Act, 1926. The registrar of trade unions first issued a certificate of registration but later, after issuing a show cause notice, withdrew its registration certificate. On appeal, the district court allowed the appeal and set aside the order of the registrar. In a revision petition against the order of the district court, the High Court observed: … As the activity of the Provident Fund Organization is ’industry‘, the members of the union, who are its employees have to be regarded as workmen. As the union was formed primarily for the purpose of regulating the relations between the workmen and its employer, it is a trade union as defined in Section 2(h) of the Act. Registrar of Trade Unions v. Fire Service Workers Union (1963) 1 LLJ 167. In this case, the employees of the Fire Brigade Services formed a union and applied for its registration to the registrar of trade unions. The registrar first registered the union but later cancelled the certificate of registration after giving the notice. Against this order, the union filed an appeal to the High Court. The High Court held that employees employed in Fire Brigade Services were employed in ’trade or industry‘ and were entitled to be registered under the Trade Unions Act, 1926. T T Devasthanam v. Commissioner of Labour, (1979) 1 LLJ 192. The Karnataka High Court in C M T Institute v. Assistant Labour Commissioner, (1979) 1 LLJ 192 applied and extended the definition of ’industry‘ under the Industrial Disputes Act, 1947 in interpreting the word ’trade or industry‘ occurring in section 2(g) of the Trade Unions Act, 1926. The Court also pointed out that there was no difference between the meaning of the word ’industry‘ as defined in section 2(j) of the Industrial Disputes Act and the word ’trade or industry‘ as used under section 2(g) of the Trade Unions Act. The Court also held that the word ’trade or industry‘, even without elaborate definition of

22 23 24 25

the word ’industry‘ under the Industrial Disputes Act, was sufficiently wide enough to bring the Society of Central Machine Tool Institute within the definition of ’trade or industry‘ notwithstanding the fact that it had no profit motive. Rangaswami v. Registrar of Trade Unions, AIR 1962 Madras 231. In this case it was held that persons employed in Raj Bhawan for domestic and other duties could not form trade union on the ground that workers were not employed in trade or industry carried on by the employer. The services rendered by them were purely of a personal nature. A union of such workers was not, therefore, entitled for registration under the Trade Unions Act, 1926. N Karappann v. Additional Registrar of Trade Unions, (1976). Lab. IC 1388, 1389–90. But in Bangalore Water Supply and Sewerage Board v. A Rajappa, AIR 1976 SC 548, the Supreme Court held that Research Institute, irrespective of profit motive, was an ’industry‘. Ibid. Bangalore Water Supply and Sewerage Board v. Rajappa, AIR 1978 SC 548. Cherinjumpatty Tharipuratty v. State of Kerala, (2005) 1 LLJ 32. Panyan Cement Employees Union v. Commissioner of Labour, Hyderabad, (2004) 1 LLJ 915.

CHAPTER

6 Registration of Trade Unions The Trade Unions Act, 1926, was enacted with a view to encourage the formation of permanent and stable trade unions and to protect their members from certain civil and criminal liabilities. The registration of a trade union is, however, not conclusive proof of its existence.1 The Societies Registration Act, 19602, Co-operative Societies Act, 19123 and the Companies Act, 19564 do not apply to trade unions and registration thereof under any of these Acts is void ab initio.5

I. LEGAL STATUS OF REGISTERED TRADE UNIONS Every registered trade union is a body corporate by the name under which it is registered and ‘shall have perpetual succession and a common seal6 with a power to sue and to be sued.’7 It is, however, not a statutory body. It is not created by statute or incorporated in accordance with the provisions of a statute. In other words, a registered trade union is neither an instrumentality nor an agency of the state discharging public functions or public duties.8 A registered trade union is an entity distinct from the members of which the trade union is composed. It has a power to contract and to hold property—both moveable and immovable and to sue and be sued by the name in which it is registered. It can institute a suit in forma pauperis within the meaning of Order XXXIII Rule 1 of the Civil Procedure Code.9 However, by mere registration of a trade union under the Trade Unions Act, the trade union does not become an authority under Article 12 of the Constitution of India. It continues to remain just a private body

and all disputes relating to election of such a private body cannot be canvassed or challenged in a writ petition.10

II. COMPULSORY VERSUS VOLUNTARY REGISTRATION Under the Act, the registration of trade union is not compulsory but is merely voluntary. The question of voluntary registration is, however, debatable. Two conflicting views are discernible: (i) Compulsory registration would prove burdensome and expensive. It is felt that the present legal position should continue. The provisions of the Trade Union Act, 1926 itself affords legal status and protection to trade union members which will encourage trade unions to get themselves registered; (ii) The registration of trade unions should be made compulsory because all the unions shall be governed by the provisions of the Act and the rules framed thereunder in a similar manner. This view was also shared by the National Commission of Labour. The Commission is of the view that the registration of trade unions should be made compulsory ‘because it will bring the application of same standards of obligation to all unions’.11 The second view seems to be better. It will not only bring the application of uniform standards and obligation to all unions, but would prevent ‘fraud, embezzlement or deception practised upon members by unscrupulous persons.’ Further, it will result in qualitative improvement of their organization and functioning. Moreover, it will strengthen the trade union movement. This should however, be done in stages. To begin with, it would be better if registration of trade unions is made compulsory for the purposes of their recognition.

III. APPOINTMENT OF THE REGISTRAR Section 3 empowers the appropriate government12 to appoint a person to be the Registrar13 of Trade Unions. The appropriate government is also empowered to appoint as many additional and deputy registrars of trade unions as they think fit. Such persons will function under the superintendence and direction of the Registrar. He exercises such powers and functions of Registrar with local limit as may be specified. Where, however, additional or deputy registrar exercises the powers and functions of Registrar in the area within which a registered office of the trade union is situated, he shall be deemed to be Registrar.

IV. MODE OF REGISTRATION A. Who may Apply: Minimum Membership of Trade Unions 1. Legislative Response: Under section 4(1): Any seven or more members of a trade union may by subscribing their names to the rules of 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. Provided that no trade union of workmen shall be registered unless at least 10 per cent or 100 of the workmen, whichever is less, engaged or employed in the establishment or industry with which it is connected are the members of such trade union on the date of making application for registration: Provided further that no trade union of workmen shall be registered unless it has on the date of making application not less than seven persons as its members, who are workmen engaged or employed in the establishment or industry with which it is connected.14 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.15 The Supreme Court in Tirumala Tirupati Devasthanam v. Commissioner of Labour16 held that any group of employees may be registered as a trade union under the Act for the purpose of regulating the relations between them and their employer or between themselves. The Court added: It would be apparent from this definition that any group of employees which comes together primarily for the purpose of regulating the relations between them and their employer or between them and other workmen may be registered as a trade union under the Act. It cannot be disputed that the relationship between the appellant and the workmen in question is that of employer and employee. The registration of the association of the said workmen as a trade union under the Act has nothing to do with whether the said wings of the appellant are an ‘industry’

or not. We are, therefore, of the view that the High Court went into the said issue, although the same has not arisen before it. Since the findings recorded by the High Court on the said issue, are not germane to the question that falls for consideration before us, we express no opinion on the same and leave the question open. Earlier in Registrar of Trade Unions in Mysore v. M Mariswamy17, the employees of the Provident Fund Organization got themselves registered under the Trade Unions Act, 1926. This registration was subsequently withdrawn by the department resulting in litigation which ultimately reached the Karnataka High Court. It was held by the court that from the definition of the expression ‘trade union’, it could be a combination either of workmen or of employees or of both, provided it is formed primarily for one of the purposes mentioned in clause (h) of Section 2 of the Act. It is, therefore, possible to have a trade union consisting only of employers. The emphasis in Section 2(h) is on the purpose for which the union is formed and not so much on the persons who constitute the union. The court accordingly directed the registrar to register the petitioner who fulfils all other legal requirements in terms of the Trade Unions Act, 1926. It is submitted that under the Trade Unions Act, 1926, both employers and workers can get themselves registered. Indeed both Section 2(g) and 2(h) refer to the employer. One may wish to add that the attention of the court was not drawn to this aspect. 2. Registration of Trade Unions in Unorganized Sector: The (Second) National Commission on Labour has recommended that trade unions of workers in the unorganized sector should be registered even where there is no employer– employee relationship or such relationship is not clear.

B. Whom to Apply? Section 5 requires that every application for registration must be sent to the Registrar of Trade Unions.

C. Form for the Application Section 5 requires that every application for registration made to the Registrar must be in Form ‘A’. Further, every application must be accompanied with a statement of the following particulars, namely: (a) the names, occupations and addresses of the members making the application. However, in the case of a trade union of workmen, the names, occupations, and addresses of the place of

work of the members of the trade union making the application.18 (b) the name of the trade union and the address of its head offices and (c) the title, names, ages, addresses and occupations of the office bearers of the trade union. Moreover, every application must be accompanied by a copy of rules. Such rules must comply with the items mentioned under Section 6 of the Act. Furthermore, the trade union of more than one year standing applying for registration is required to submit a general statement of its assets and liabilities in the prescribed manner to the Registrar.19 Moreover, a trade union (which had previously been registered by the registrar in any state) applying for registration is required to submit with its application a copy of certificate of registration granted to it and copies of entries to it to the Registrar of Trade Unions for the state.20

D. Rules of a Trade Union Section 6 provides that no union can be registered unless its constitution provides for the following items, namely: (a) the name of the trade union; (b) the objects for which the trade union has been established; (c) the whole of the purposes for which the general funds of a 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 a trade or 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; (ee) the payment of a minimum subscription by members of the trade union which shall not be less than: (i) one rupee per annum for rural workers; (ii) three rupees per annum for workers in other unorganized sectors; and (iii) twelve rupees per annum for workers in any other case. (f) 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; (g) the manner in which the rules shall be amended, varied or rescinded; (h) the manner in which the members of the executive and the other officebearers of the trade union shall be appointed and removed; (hh) the duration of period being not more than three years, for which the members of the executive and other office-bearers of the trade union shall be elected; (i) the safe custody of the funds of the trade union, and annual audit, in such a 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 (j) the manner in which the trade union may be dissolved.

a. Nature and Scope of Rules The existence of the aforesaid matters in the rules is a condition-precedent for the registration of the union. But, the fact that section 6 provides that no union can be registered unless its rule provides for these matters does not necessarily mean that rules relating to matters contained in section 6 acquire a statutory force. They have only contractual force.21 Thus, the rules framed by trade unions under section 6 of the Trade Unions Act, 1926 are rules meant for internal administration and, therefore, cannot create any statutory obligation upon the labour commissioner. It is like bye-laws of a cooperative society or rules framed by a society for securing registration under the Societies Registration Act, 1860.

b. Amendment in Rules of the Trade Union when not Valid In B S V Hemantha Rao v. Deputy Registrar, Trade Union22, the Hyderabad Allwyn Workers’ Union amended its rules appointing its president to act as election officer and empowering him to nominate all office-bearers, whereas this power is vested with the general body of the trade union. Even though such amendments were registered by the Registrar of Trade Union, the Court held the amendments were contrary to the letter and spirit of the trade union and such a procedure allowing the president to nominate office bearers amounts to allowing a person to act as a judge in his own cause. Accordingly, it was held invalid.

c. Scope of Section 6(e) In Bokajan Cement Corpn. Employees' Union v. Cement Corpn. of India

Ltd23, a question arose whether on ceasing to be an employee, one would lose his right to continue as a member of the trade union. A single judge of the Guwahati High Court answered the question in negative. But a division bench of the High Court reversed the findings of the single judge on appeal. It was held that the right to continue as a member of the trade union continues only so long as an employee is actually employed. Thereupon, the union filed an appeal before the Supreme Court. The Court held that Section 6(e) only provides for admission of membership of those who are actually engaged or employed in industry as ordinary members so as to entitle a trade union to seek registration under the Act and not for automatic cessation of membership. It does not provide that on cessation of employment, an employee would cease to be a member.

V. POWERS OF THE REGISTRAR Section 7 empowers the Registrar of Trade Unions to make further enquiries on receipt of an application for registration to satisfy himself that the application complies with the provisions of Section 5 or that the trade union is entitled for registration under Section 6.24 Such enquiries can be made only from the application and not from any other source.25 Further, the Registrar may require the trade union to change its name if the name of the trade union is identical or resembling with any other existing trade union.26 However, he has no power to declare the election of the office-bearer of a trade union unconstitutional. Further, whenever there is a dispute between the groups of office-bearers, each claiming itself to be a valid executive, such dispute is very much falling within the jurisdiction of the competent court of law, and the Registrar of Trade Unions has no power or jurisdiction to decide the issue.27 But where the petitioner himself called for an inquiry with regard to the election of new office-bearers of a union and submits to the jurisdiction of Registrar of Trade Unions, he is stopped from challenging the jurisdiction of the Registrar if the result of the inquiry happened to be against him.28

VI. NO POWER OF THE REGISTRAR TO VERIFY MEMBERSHIP OF TRADE UNIONS Under the Trade Unions Act 1926, the Registrar has no power to verify

membership of registered trade unions. However, Section 28A of the Trade Unions (Amendment) Bill, 1982, empowers the Registrar to verify the membership of registered trade unions and matters connected therewith and, for this purpose, Registrar shall follow such procedure as may be prescribed by regulation.

VII. POWER TO CONDUCT ELECTION The Registrar of Trade Unions is the authority charged with the duty of administration of the provisions of the Act. The Registrar is empowered under Section 28 to ascertain who are the elected office-bearers in order to register their names. However, in making such inquiry, the Registrar does not perform any quasi-judicial functions; but only administrative functions. He has no authority to ask any party to lead evidence and to give opportunity to the other party to cross-examine any witness. Under this concept of a limited administrative inquiry, the dispute as raised by the rival parties cannot be set at rest.29 In Ranipet Greaves Employees’ Union v. Commissioner of Labour30, the union requested the labour commissioner to conduct the election of the union as per settlement arrived at under section 12 (3) of the Industrial Disputes Act. The labour commissioner rejected such a request. On a writ petition the Madras High Court held that the labour commissioner committed an error in rejecting such a request. It accordingly directed the labour commissioner to conduct the union election to elect the representative body which could get recognition from the management and the right to negotiate with it. Earlier in H M T Karmika Sangh v. Labour Commissioner31, the Court held that if a trade union makes a request to appoint an officer of labour department as returning officer, as he considers that it is expedient to do so, he could do so and there is nothing in the Act or rules which prevents him from doing so. However, the order of the High Court in designation to the general manager to hold election of the trade union was wrong. Instead, the Court ordered that the election should be held under the supervision of the Registrar of Trade Union or his nominee.32 In IFFCO Phulpur Karmchari Sangh v. Registrar, Trade Union Kanpur,33 the Allahabad High Court held that Section 28 (3) of the Trade Unions Act, 1926 read with Regulation 17A does not contemplate holding of any elaborate inquiry such as one required in judicial or quasi-judicial

proceedings. All that the Registrar is required to do is to hold a summary inquiry for satisfying himself before making any change in the register regarding office bearers whether the elections have been held in accordance with the rules of the trade union. In K V Sridharan and Others v. S Sundermoorthy34, the Madras High Court held that all disputes relating to holding of election of such incorporated bodies, which are nothing but private bodies, cannot be challenged before the writ court. If there are disputes between the parties over such election, those disputes can be challenged, if so advised, before the appropriate civil court. Since the writ petition itself is not maintainable, this Court held that no order can be passed in the writ petition on the dispute relating to the election of such trade union. It may be noted that these private bodies are not enforcing any statutory direction by filing such writ petitions inasmuch in the State of Tamil Nadu, there is no law relating to grant of recognition to a trade union, nor is there any law relating to holding of election of such trade unions. These matters are covered by general law and as such, the disputes in this regard should be settled by civil court.

VIII. NO POWER TO HOLD INQUIRY In IFFCO Phulpur Karmchari Sangh v. Registrar, Trade Union Kanpur,35 the Allahabad High Court held that Section 28 (3) of the Trade Unions Act, 1926 read with Regulation 17A does not contemplate holding of any elaborate inquiry such as one required in judicial or quasi-judicial proceedings. All that the Registrar is required to do is to hold a summary inquiry for satisfying himself before making any change in the register regarding office bearers whether the elections have been held in accordance with the rules of the trade union.

IX. NO POWER TO DECIDE RIVAL CLAIMS In Rattan Kumar Dey v. Union of India36, the Guwahati High Court held that under Section 28 of the Trade Unions Act, 1926, the Registrar of Trade Unions has no power or authority to decide a dispute between the rival office-bearers of the union. However, Registrar of Trade Unions under Section 28(4) has the power to make inquiries and give his own conclusion in regard to maintenance of the office-bearers of the union.

In Ram Das Tigga v. State of Jharkhand37, the Jharkhand High Court held that the Registrar of Trade Union cannot resolve the dispute pertaining to election of rival office-bearers of union. Such dispute can only be decided by civil court of competent jurisdiction. In Kovai Periyar Maavatta Dravida Panchalai Thozhilalar Munnetra Sangam, Coimbatore v. Commissioner of Labour (Registrar of Trade Unions), Chennai38, the Madras High Court held that Section 28 of the Trade Unions Act does not confer any quasi-judicial power to decide the dispute between the rival claimants and even if any decision is taken, such a decision does not have any binding force and the dispute between the rival claimants in a union can be decided by a civil court. In Roadways Mazdoor Sabha, UP v. State of UP39, the Allahabad High Court held that the Registrar has got only limited power to make the necessary entry in his records. Under Section 28 of the Trade Unions Act, he can record the changes in the office bearers made by the trade union during the year to which general statements were filed. Thus, he has no power to adjudicate as to which one of the rival claims is correct.

X. NO POWER TO DECIDE REGARDING ADMISSION OF MEMBERSHIP In Borosil Glass Works Ltd Employees Union v. D D Bombode,40 the Supreme Court interpreted Section 28 (1-A) of the Trade Unions Act. In this case, certain workers made a joint application for membership of the appellant union which is a registered and recognized trade union. However, no action was taken because the application was not in accordance with the procedure laid down by the appellant union thereon. The employees were asked by the union to apply individually in the prescribed form and make payment of requisite fee and membership subscription. Aggrieved by this, employees filed a complaint before the Registrar of Trade Unions. Thereupon, the Registrar of Trade Unions under Section 10(b) of the Trade Unions Act issued a notice to the appellant union threatening to cancel its registration pursuant to a complaint filed by these employees under Section 28(1-A). The union then represented its case before the Registrar. The Registrar of Trade Unions found that the complainants were not members of the appellant union for six months prior to the date of the application which was a necessary condition under Section 28(1-A). Therefore, no certificate under that section could be granted to them, permitting them to

refer the dispute to the industrial tribunal. Aggreived by the decision of the Registrar, these employees filed a writ petition in the Bombay High Court seeking direction to the Registrar of Trade Unions to issue a consent certificate. The High Court ruled that even a person who has applied to become a member is covered by Section 28(1-A) of the Trade Unions Act and accordingly, directed the Registrar of Trade Unions to issue a consent certificate to these employees to enable them to refer the dispute to the industrial tribunal. This order of the High Court was challenged by the union before the Supreme Court under Article 136 of the Constitution. The Supreme Court found the interpretation given by the High Court to Section 28(1-A) of the Act to be too wide. According to the court, the said provision is to be interpreted to ensure that internal disputes in trade unions get decided expeditiously but it can be only invoked by a person who has been a member of such registered trade union for a period of not less than six months. The court observed that words ‘where there is a dispute on whether or not any person is an office-bearer or a member of a registered trade union’ have to be read along with the words ‘any member of such registered trade union for a period of less than six months’. A person whose application for membership has not been considered or allowed would not have been a member for six months. The Court held that the dispute between persons who are not members and the union would not be covered by Section 28(1-A). Indeed, a dispute between a person who is not yet a member and a union would not be an internal dispute of the union. The Court added that under Section 28(1-A), the jurisdiction of the civil court is barred only in respect of the matters which have been referred to an industrial court under Section 28(1-A). But, if a dispute does not fall under Section 28(1-A), then that dispute can be taken to civil court. Further, in a case like the present one where the dispute is whether a person should or should not be admitted, is not a dispute falling under Section 28(1-A) and, therefore, it is open to such person to approach a civil court for resolution thereof. However, if the law permits, they may also raise an industrial dispute before the industrial court in this behalf. The Court, accordingly, set aside the judgement of the High Court.

XI. DUTIES OF THE REGISTRAR Section 8 lays down the duties of the Registrar in matters of registration of trade union. It provides that as soon as the Registrar is satisfied that the trade union

has complied with all the requirements of this Act in regard to registration, he 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. This shows that where the definitions under Section 2(g) and 2(h) are themselves inapplicable to the so called union, the Registrar has every power to refuse the registrations.41 Section 8 raises several questions: (i) whether it is obligatory upon the Registrar to register a trade union within a reasonable time where it has complied with all the requirements of the Act? (ii) what is the scope of inquiry under this section? (iii) whether Section 8 contravenes the fundamental right under Article 19(1) (c) of the Constitution? (iv) whether the Registrar can refuse to register more than one union in one plant/industry? Let us turn to examine these questions.

A. Time-Limit for Registration The Trade Unions Act does not prescribe any time-limit for the grant or refusal of registration. It only imposes a statutory duty upon the Registrar to register a trade union if he is satisfied that the requirements of the statute have been complied with. The absence of any provision regarding the time-limit for grant or refusal raises a question whether the court can interfere in regard to the time taken by the Registrar in granting or refusing registration of trade union. The decision in ACC Rajanka Lime Stone Quarries Mazdoor Union v. Registrar of Trade Unions, Government of Bihar42 has a direct bearing on this question. In this case the union sent an application on 31 July 1957 for registration to the Registrar of Trade Unions in the prescribed manner together with the constitution and rules of the said union which was received by the latter on 3 August 1957. But no action was apparently taken under Sections 7 and 8 on the application for over 3 months. The union sent many reminders but they remained unreplied. Under the circumstances, the union filed a writ petition before the Patna High Court, praying that the Registrar of Trade Unions be directed to perform his statutory duty of registering or refusing to register the trade union under the Act. The High Court of Patna held that Section 8 imposes the statutory duty upon the Registrar to register a trade union on being satisfied that it had complied with the requirements of the Act. The court accordingly held that there was a case for issuance of writ in the nature of mandamus under Article 226 of the Constitution. The court directed the Registrar of Trade Unions to perform the statutory duty imposed upon him under Sections 7 and 8 and to deal with the application of the trade union according to law at an early date. It is submitted that time limit should be prescribed for the grant or refusal

of registration by the Registrar. The National Commission on Labour has suggested 30 days excluding the time which the union takes in answering queries from the Registrar. This view is likely to give some scope to the Registrar to make vexatious inquiries simply to gain time. Indeed, Section 23 of the Industrial Relations Bill, 2978 prescribed 60 days’ time from the date of the receipt of the application by the Registrar either in granting or refusing to grant registration to trade union and communicating the order to the applicant. Where, however, the Registrar refuses to grant registration to a trade union, he is under an obligation to state reasons for refusing to grant registration. The Trade Unions (Amendment) Bill, 1982 has provided for insertion of the words ‘within a period of 60 days from the date of such compliance’ after the words ‘Register the Trade Unions’ in Section 8 of the Trade Union Act, 1926.

B. Scope of Inquiry Under Section 8 The second problem also requires careful scrutiny. Three pronouncements of Indian judiciary in regard to the scope of inquiry of Section 8 deserve to be mentioned. Inland Steam Navigation Workers’ Union43 decided an important point, namely, the scope of inquiry with reference to the application for registration of trade unions. In this case, an application made by the Inland Steam Navigation Worker’s Union for its registration was rejected by the Registrar of Trade Unions on the ground that the union was for all practical purposes the same union which has been registered and, therefore, be declared unlawful under Section 16 of the Criminal Law (Amendment) Act, 1908. Against this finding, the appeal was preferred before the Calcutta High Court under Section 11 of the Trade Unions Act, 1926. Chief Justice Derbyshire, in the course of the judgement observed: In my view, the Registrar in taking up that attitude is wrong. The functions of the Registrar are laid down in Section 8…The new union may or may not be a continuation of the other union or its successor. Whether the new union is or is not the same as the old union, depends on evidence. He added: In my view, the duties of the Registrar were to examine the application and to look at the objects for which the union was formed. If those objects were objects set out in the Act, and if

those objects did not go outside the objects prescribed in the Act and if all the requirements of the Act, and the regulations made thereunder had been complied with, it was his duty, in my view, to register the union.44 R K Workmen’s Union v. Registrar of Trade Unions,45 raised an important problem as to whether the Registrar of Trade Union is under an obligation to hear the then-existing unions in the field before making the order under Section 8. The High Court of Calcutta answered the question in negative and observed: Once, therefore, the Registrar is satisfied that the requirements of the statute have been complied with, it is obligatory upon him to enter in a register the applicant-union and he has no obligation to hear the existing unions in the field before making the order under Section 8. The Court added: In fact, the statute does not deal with the matter of registration from the standpoint of any existing union at all. It is significant to note that though Section 11 (1) provides a statutory appeal from an order of refusal to register a union, there is no provision for an appeal or other remedy against an order granting registration. The aforesaid decisions suggest that the only duty of the Registrar is to examine the application for registration with reference to the provisions of Sections 2(h), 4 to 7 and 15.46 If the Registrar is satisfied that statutory requirements have been complied, he is bound to register the trade union within a reasonable time. He is under no obligation to hear the existing trade unions before making the registration under Section 8. ONGC Workmen’s Association v. State of West Bengal47 delineated the nature and scope of inquiry under Section 8. The Calcutta High Court held that any order passed under Section 8 by the Registrar must be administrative in nature. The Court also held that the Registrar is not deemed to be a quasi-judicial authority to decide any disputed question of fact or law. He has no authority to ask for any of the parties to lead evidence and to give opportunity to the other party to cross examine any witness. Thus, the scope of inquiry under Section 8 is very limited.

C. Constitutional Problems in Section 8 Kesoram Rangan Workmen’s Union v. Registrar of Trade Union48 is an important case on this problem. The Registrar of Trade Unions failed to offer any opportunity to an existing trade union while registering a new union under Section 8. The question arose whether Section 8 imposed any unreasonable restriction on the fundamental right by not offering a right of hearing to an existing union. The question was answered in negative by the Calcutta High Court. In the course of judgement, the Court observed that the freedom guaranteed under Article 19 (1) (c) of the Constitution belongs to all workmen, so that every workman has the freedom to form a union of his own choice and to refuse to become a member of any union which he does not like.49 The Court, therefore, concluded that ‘no union can claim a monopoly or a right to complain if some other union is brought into existence by other workmen’.

D. Registration of One Union in One Industry It has been seen elsewhere that the Trade Unions Act, 1926, provides that as soon as the Registrar is satisfied that the trade union has complied with all the requirements in regard to registration, he shall register the trade union. From this it is clear that the Act does not empower the Registrar to refuse registration of trade union in cases where one or more unions are already in existence in the plant/industry. A question, therefore, arises, whether it is in the interest of trade unions to empower the Registrar to refuse to register a trade union on the above ground. Two views are discernible: (i) The Registrar of Trade Unions should be empowered to refuse to register more than one union in one plant or industry. The reason in that the multiplicity of unions leads to rivalry among trade unions. This view, is however, open to several objections. First, this may run contrary to Article 19(1)(c) of the Constitution. Second, the problem of multiplicity of trade unions may be resolved to a great extent by providing recognition to a representative union. (ii) The Registrar of Trade Unions should not be given the power to refuse to register more than one union because the refusal may infringe Article 19(1)(c) of the Constitution. The other reason is that recognition of the majority union will, to a great extent, meet this problem. The second view seems to be a better one.

XII. CERTIFICATE OF REGISTRATION: A CONCLUSIVE EVIDENCE The certificate of registration issued by Registrar shall be in the prescribed form, i.e., in Form C of Schedule III and is conclusive evidence to show that the trade union has been duly registered under the Act.50 This finality is only for the purposes of the Act and cannot in any way affect the powers of the High Court under Article 226 of the Constitution as the provisions of the statute are always subjected to the jurisdiction of the Constitution.51

XIII. MINIMUM REQUIREMENT FOR MEMBERSHIP OF A TRADE UNION Section 9-A provides that a registered trade union of workmen shall, at all times, continue to have not less than 10 per cent or 100 of the workmen, whichever is less, subject to a minimum of seven, engaged or employed in an establishment or industry with which it is connected, as its members.52

XIV. CANCELLATION AND DEREGISTRATION OF A REGISTERED TRADE UNION A. Grounds for Cancellation of Registration The registration of a trade union may be cancelled by the Registrar on any one of the following grounds: (i) that the certificate under Section 9 had been obtained by fraud or mistake; (ii) that the trade union had ceased to exist; (iii) that the trade union had ‘wilfully’ contravened any provision of the Act even after notice from the Registrar53; (iv) that a trade union allowed any rule to continue in force which was inconsistent with any provisions of the Act; (v) that the trade union had rescinded any rule providing for any material provision which was required by Section 6; (vi) if the Registrar is satisfied that a registered trade union of workmen ceases to have the requisite number of members. However, 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.54 The grounds for cancellation of registration are open to several objections: First, the term ‘wilful’ is vague. In practice, it is found that trade unions do not submit their annual return. The section, however, requires that the default has to be ‘wilful’. To establish a wilful default to the satisfaction of a court is difficult. In view of this, the (First) National Commission on Labour recommended that where the union failed to submit the annual return, its registration should be cancelled irrespective of whether the default is ‘wilful’ or otherwise. This recommendation should be implemented. Second, it is doubtful whether the materially defective return should be treated as ‘return’ under Section 10. In view of the prevailing ambiguity, the National Commission on Labour suggested that ‘materially defective return’ should amount to a default and the union should be under an obligation to rectify mistakes within the prescribed period failing which the Registrar should be deemed not to have received the return.55 The Registrar is not competent to cancel the registration of a trade union, without, in the first instance, giving to the trade union concerned two months’ previous notice in writing, specifying the grounds on which he proposes to withdraw or cancel the certificate and giving an opportunity to the trade unions to show cause against proposed action.56 However, unlike Section 26(3) of the Industrial Relations Bill, 1978, there is no provision that ‘while cancelling the certificate of registration of a trade union, the Registrar shall record the reasons of doing so and communicate the same in writing to the trade union concerned.’ Once the Registrar cancels or withdraws the registration of a trade union, he has no power to quash that order. Further, he has no power to review it. Moreover, he has no power to withdraw it because of subsequent events.57

B. Powers of the High Court in Respect of Cancellation of Registration The Bombay High Court held that the High Court may exercise its powers under Article 226 of the Constitution where the cancellation of the registration of the trade union had been effected improperly.58 Again, the Gujarat High Court quashed the orders of Registrar where no show cause notice was given before cancellation of registration as required under Section 10(b).59

C. Powers of the Registrar in Respect of Deregistration The Registrar is empowered to cancel or withdraw certificate of registration on

the application of the trade union. He is required to: (i) give an opportunity to trade unions except in case of applications of the concerned trade union; (ii) satisfy himself that any one of the grounds of cancellation of registration of such trade union exists; and (iii) make such order which he deems necessary. The power of cancellation of registration of trade unions also confers an in-built power to withdraw the order of cancellation. Thus, the Registrar is also empowered to withdraw the order of cancellation on realization of mistake and on such order, the cancellation becomes non-est.60

XV. APPEAL The Act61 confers right of appeal on persons aggrieved against an order of the Registrar (i) refusing to register a trade union; or (ii) withdrawing the certificate issued after registration; or (iii) cancelling the certificate of registration. The Act does not, however, define the word ‘person’. In the absence of any definition, Section 3 (42) of the General Clauses Act may be taken into account for the purposes of the definition of the term. Thus, the ‘person’ includes a legal person like a trade union.62 In an appeal by a trade union, whose certificate of registration is cancelled, no other trade union has a right to be impleaded as a party.63

A. Appellate Forum The appeal may be filed (a) where the head office of the trade union is situated within the limits of a presidency town to the High Court; (aa) where the head office is situated in an area falling within the jurisdiction of a labour court or an industrial tribunal, to that court or tribunal, as the case may be; 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 the area. The expression ‘High Court’ in Clause (a) above refers to the original side of the High Court and not to the appellate side. Further, the expression ‘Presidency Town’ in Clause (a) refers to the towns where the High Court has original civil jurisdiction. And Section 3(44) of the General Clauses Act (Act X of 1897) defines ‘Presidency Town’ to mean the total limits for the time being or the ordinary original civil jurisdiction of the High Court of Judicature at Calcutta, Madras or Bombay as the case may be.64 In cases where high courts

are situated outside the presidency town, the high courts have no jurisdiction to entertain appeals under Section 11 (1) (b). In regard to such areas, any court not inferior to the court of an additional/assistant judge of the principal civil court of original jurisdiction, as the appropriate government may appoint in this behalf for that area, shall have jurisdictions.65

B. Powers of The Appellate Court66 The appellate court may either: (i) dismiss the appeal; or (ii) pass an order directing the Registrar to register trade unions and to issue a certificate of registration under Section 9; or (iii) set aside the order for withdrawal or cancellation of the certificate as the case may be. The Registrar is under an obligation to comply with such orders of the appellate authority.

C. Procedure to be Adopted by the Appellate Court67 The appellate court shall, as far as practicable, follow the same procedure and have the same powers in respect of the appeal as vested in the civil court while trying a suit under the Code of Civil Procedure, 1908. Further, it may also determine from whom the whole or any part of the costs of appeal shall be recovered. Such costs shall be recovered as if they had been awarded in a civil suit under the code.

D. Second Appeal The Act68 also confers a right of second appeal on persons whose appeals under Section 11(1) (b) have been dismissed. Such an appeal shall be filed in the high court, and the high court for the purposes of such an appeal has all the powers of the appellate court. However, no second appeal shall lie where the high court hears an appeal under Section 11(1) (a).

E. Time for Making an Appeal The appeal under Section 11 must be filed within such time as may be prescribed under the rules for the purpose.

XVI. THE RESULT OF DEREGISTRATION A trade union whose certificate of registration has been withdrawn or cancelled,

loses its status as a legal entity under the Act. Upon the cancellation of certificate of registration, the trade union and its members cease to enjoy the privileges of a registered trade union.

XVII. RE-REGISTRATION There is no provision in the Act for re-registration of a trade union whose registration has been cancelled. The National Commission on Labour, therefore, recommended that the Trade Union Act should provide that any application for re-registration from a union, (the registration of which has been cancelled) should not be entertained within six months of the date of cancellation of registrations.69 Perhaps in view of this recommendation, the Industrial Relations Bill, 197870 and the Trade Unions (Amendment) Bill, 198271 have provided for re-registration of a trade union.

XVIII. REGISTERED OFFICE Section 2(a) defines ‘registered office’ to mean the ‘office of a trade union which is registered under the Act as the head office thereof.’ And, Section 12 requires that all communications and notices to a registered trade union may be addressed to its registered office. Further, notice of any change in the address of the head office shall be given within 14 days of such change to the Registrar in writing, and the changed address shall be recorded in the register referred to in Section 8.

XIX. CHANGE OF NAME, STRUCTURE AND DISSOLUTION A. Change of Name A registered trade union with the consent of not less than two-third of the total number of the members may change its name.72 Notice of the change of name signed by seven members and the secretary of the trade union changing its name must be sent to the Registrar.73 The Registrar, before approving the change of name, has to ascertain that the new name is not identical with that of any existing

trade union known to him, or so nearly resembling such name as to deceive the public or member.74 If otherwise, he shall refuse to register the change of name. On the contrary, if he is satisfied that the provisions of the Act have been complied with in respect of changing the name, he shall register the change of name in the register maintained for this purpose.75 The change in the name of registered trade union neither affects its rights nor obligations nor does it render defective any legal proceedings by or against the trade union and any legal proceedings which might have commenced or continued by its new name.76

B. Amalgamation of Trade Unions Any two or more registered trade unions may become amalgamated together as one trade union with or without dissolution or division of funds of such trade unions. This can be done only if: (i) 50 per cent of the members of each and every trade union entitled to vote record their votes; (ii) the votes in favour of amalgamation is not less than 60 per cent,77 (iii) notice in writing of amalgamation signed by seven members and the secretary of each and every registered trade union (which is party to amalgamation) accompanied by such statement as may be prescribed, is sent to the Registrar of Trade Unions.78 If the aforesaid requirements are fulfilled, the Registrar after satisfying himself that the provisions of the Act in respect of amalgamation have been complied with and that the trade union formed thereby is entitled to registration, he shall register the trade union in the prescribed manner.79 The amalgamation shall be effective from the date of such registration. The amalgamation shall not prejudice any right of such trade unions who are parties to it or any right of a creditor or any of them.80

C. Dissolution of Trade Unions When a registered trade union is dissolved, notice of the dissolution signed by the secretary and seven members must be sent within 14 days of dissolution to the Registrar of Trade Unions.81 The notice must be in the prescribed form. The Registrar after satisfying himself that the dissolution has been effected in accordance with the provisions of the Act makes the entry in the register maintained by him.82 Where the rules of trade union contain no provision for the distribution of funds on dissolution, the Registrar shall divide the funds in proportion to the amounts contributed by the members by way of subscription during their memberships.83

XX. SUBMISSION OF RETURNS Registered trade unions are required under Section 28: (1) to submit annual returns in the prescribed form to the Registrar along with an audited statement of income and expenditure during each year of all receipts and expenditure during the year ending on the 31 st day of December, next preceding such prescribed date; and of the assets and liabilities of trade union existing on 31st December84 (2) The general statement should be accompanied by the statements, (i) showing any change of office bearers made during the year to which general statement refers; and (ii) a copy of rules of the trade union corrected upto the date of despatch thereof to the Registrar85 (3) Every alteration made in the rules of trade union shall be sent within 15 days of the alterations.86 (4) The Registrar or any other duly authorized officer is empowered to inspect and require production of the certificate of registration, account books, registers and other documents relating to trade unions for examining the returns submitted by them.87 A statement of change of office-bearers under Section 28(2) has to accompany a general statement as required under Section 28(1). Even if general statement cannot be prepared under Section 28(1), statement under Section 28(2) can still be re-prepared.88

XXI. PENALTIES AND PROCEDURE A. Failure to Submit Return In case of failure to submit returns or statements required under Section 28: (i) every office-bearer; (ii) other persons bound by the rules of the trade union to give or send the same; or (iii) if there is no such office-bearer or person, every member of the executive of the trade union shall be punishable with fine not exceeding ₹5. But if the contravention is continued after conviction, a further fine not exceeding ₹5 for each week during which the default was made shall be imposed.89 However, the aggregate fine shall not exceed ₹50.90 The Act provides more deterrent punishment with a fine which may extend upto ₹500 upon persons wilfully making, or causing to be made any false entry in, or any omission from the general statement required by Section 28, or in or from any copy of rules or of alterations of rules or document sent to the Registrar under that section.91

B. Penalties for Supplying False Information Regarding Trade Unions Quite apart from penalties mentioned earlier, if any person with intent to deceive or with like intent gives: (i) to any member of a registered trade union; or (ii) to any prospective member of such union, any document purporting to be a copy of rules of a trade union or any alteration of such rules which he knows or has reason to believe that it is not a correct copy, or (iii) gives a copy of any rules of any unregistered trade union to any person on the pretence that such rules are the rules of a registered trade union shall be punishable with a fine which may extend to ₹200.92

C. Cognizance of the Offence Only a presidency magistrate or magistrate of the first class can try any offence mentioned in Sections 31 and 32 of the Act93. Similarly, no court shall take cognizance of any offence unless: (i) a complaint has been made by the Registrar; or (ii) with his previous sanction by any person; or (iii) in the case of any offence under Section 32 by the person to whom such copy has been given;94 (iv) the complaint is made within six months of the date on which the offence is alleged to have been committed.

Kandan Textile Ltd v. Industrial Tribunal, AIR 1951 Mad. 661. XXI of 1860. 3 11 of 1912. 4 1 of 1956. 5 Section 14. 6 Section 13. 7 Radhakishan Jaikishan Ginning and Pressing Factory v. Jamnadas Nursery Ginning and Pressing Company Ltd, AIR 1940 Nagpur 228. 8 Chemosyn Pvt. Ltd v. Kerala Medical and Sales Representative’s Association 1988 Lab. IC 115. 9 East Indian Coal Co. Ltd v. East Indian Coal Co. Ltd Workers' Union, AIR. 1961 Pat 51. 10 K V Sridharan v. S Sundarmoorthy, 2009 LLR414. 11 Govt. of India, Report of the National Commission on Labour (1969) 295. 12 Under Section 2 of the Trade Unions Act, 1926, the Central Government is the appropriate 2

14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29

30 31 32 33 34 35 36 37 38

government in relation to trade unions whose objects are not confined to one state. The state government is the appropriate government in relation to other trade unions. However, in practice, the Act is implemented by the state government. The powers of the Central Government were delegated to the state governments. Section 2(f) defines ‘Registrar’ to mean: (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. Section 4(1). Section 4(2). (1995) Supp (3) SCC 653. (1974) Lab IC 695. Ins. by Act No. 31 of 2001 w.e.f. 9-1-2002. Trade Unions Act, 1926, Section 5(2). Central Trade Union Regulation, 1938, Rule 7. Tirlok Nath v. All India Postal Workers Union, AIR 1957 All. 234. (1988) 1 LLJ 83 (AP). (2004) 1 LLJ 197. Trade Unions Act, 1926, Section 7. Kondalnao v. Registrar of Trade Unions, (1952) 1 LLJ. Notes of cases, 15. Trade Unions Act, 1926, Section 7(2). Ratan Kumar Dey v. Union of India, (1991) 2 LLN 506 (Gau.) (DB). R Tanji v. Registrar of Trade Unions, Bihar, AIR 1962 Pat. 338. North Eastern Railway Employees’ Union v. Registrar of Trade Unions, 1975 Lab. IC 860 (Allahabad); Mukund Ram Tanti v. Registrar of Trade Unions AIR 1962 Pat. 338, ONGC Workmen’s Association v. State of West Bengal, 1988 Lab. IC 555 (Calcutta). (2004) 2 LLJ 622. (1985) Lab IC 633. North Eastern Railway Employees’ Union v. Addl. District Judge, (1989) Lab IC 44 (SC). See also, Indian Explosive Workers Union v. State of Bihar (1992) 1 LLJ 578. 1991 Lab. IC 531. 2009 LLR 414. 1991 Lab. IC 531. 1991 (2) LLN 506; See also North-Eastern Railway Employees’ Union, Gorakhpur v. The Registrar of Trade Unions, U P, Kanpur 1975 Lab. IC 860. (2004) LLR 936. (2004) 1 LLJ 6. Similar view has been expressed in R Murugesan v. Union Territory of Pondicherry, (1976) 1 LLJ 435 (Mad.). Fateh Singh v. Rashtriya Mill Mazdoor Sangh,

39 40 41 42 43 44 45 46 47 48

49 50 51 52

53 54

56 57 58 59 60

1994 I LLJ 294 (Raj.), and Bokaro Steel Workers Union and Another v. State of Bihar, 2000 I LLJ 117 (Pat). (2011)1LLJ 239. (2001) 1 SCC 350. Tamil Nadu Union v. Registrar of Trade Unions, AIR 1962 Mad. 234. ACC Rajanka Lime Stone Quarries Mazdoor Union v. Registrar of Trade Unions, AIR 1958 Pat. 475. AIR 1963 Cal 57. R K Workmen's Union v. Registrar of Trade Unions, (1968) 1 LLJ 335 (Calcutta). (1968) I LLJ 335 at 337. This duty is, of course, subject to the powers of Registrar laid down in Section 7. ONGC Workmen’s Association v. State of West Bengal, (1988) Lab. IC 555 at 560. Kesoram Rangan Workmen’s Union v. Registrar of Trade Unions, (1968) 1 LLJ 335, 337. See also Survapal v. Uttar Pradesh Government, AIR 1951 Allahabad 674–698; and O K Ghosh v. E X Joseph, (1962) 2 LLJ 615. Kesoram Rangan Workmen’s Union v. Registrar of Trade Unions, (1968) 1 LLJ 335 (Calcutta). Section 9. Inserted by Act No. 31 of 2001 w.e.f. 9-1-2002. Cancellation of registration is illegal on basis of reply by one of disputed members and no finding as to wilful disobedience of Section 10. [See Ceramic Workers Progressive Union v. Addl. Registrar, (1994) Lab. IC NOC 66.] New Section 9A inserted by Act No. 31 or 2001 w.e.f. 9-1-2002. The Trade Union (Amendment) Bill, 1982, provides for insertion of new clause (c) after the proviso to Section 10, namely: if the Registrar is satisfied that the Trade Union has called for, or participated in, any illegal strike. Explanation— For the purposes of this section, ‘illegal strike’ has the meaning assigned to it in Section 24 of the Industrial Disputes Act, 1947. See also Government of India, Report of the National Commission on Labour (1969) 296. Section 10; See also Mysore Iron and Steel Works v. Commissioner of Labour and Registrar of Trade Unions, (1972) Lab. IC 799. See also Tata Electric Companies Officer Guild v. Registrar of Trade Unions, (1993) Lab. IC 1849. Tamil Nadu Government Press Workers Sangam v. First Trade Union Addl. Registrar (Deputy Commissioner of Labour I), (2004) 1 LLJ 274. Mukund Iron Steel Works Ltd v. V V Deshpande, (1986) Lab. IC 1612 (Bombay). Ibid. Gujarat Rajya Kamdar Sabha v. Registrar under the Trade Unions Act, (1999) LLR 285 Association of Engineering Workers v. Dockyard Labours, (1992) 1 Lab. IC 214. Section 11.

61 62 63 64 65 66 67 68 69

71 72 73 74 75 76 77 78 79 80 81 82 83 84 85

Mysore Iron and Steel Works Labourers' Association v. Commissioner of Labour and Registrar Trade Unions, (1972) Lab. IC 779 KSEB v. KSEB Trade Union, (1987) 2 LLN 560. Tamil Nadu Non-gazetted Government Officers Union, Madras v. Registrar of Trade Unions, Madras, AIR 1959 Madras 55. Tamil Nadu Non-gazetted Government Officers Union, Madras v. Registrar of Trade Unions, Madras, AIR (1959) Madras 55. Section 11(2). Section 11(3). Section 11(4). Govt. of India, Report of the National Commission on Labour, (1969) 297. Section 28 of the Industrial Relations Bill, 1978, (since lapsed owing to the dissolution of the Lok Sabha), provided the following for re-registration of trade union: A trade union whose certificate of registration has been cancelled may apply for reregistration after the expiry of a period of six months from the date of the last cancellation of the certificate of registration. The Trade Union (Amendment) Bill, 1982, provides for insertion of new Section 11A in the Act to read as follows: A trade union whose certificate of registration has been cancelled may apply for reregistration to the Registrar after the expiry of a period of six months from the date of such cancellation: Provided that where such cancellation is on the ground that such trade union has failed to comply with any of the requirements provided by or under this Act, it shall not be reregistered until it has complied with such requirement. Section 23. Ibid. Section 25(1). Section 25(2). Section 25(3). Section 26. Section 24. Section 25(1). Section 25(3). Section 26. Section 27(1). Mysore Iron and Steel Works v. Commissioner of Labour and Registrar of Trade Unions, (1972) Lab. IC 799. Section 27(2). Sub-section (1). Sub-section (2).

86 87 88 89 90 91 92 93 94

Sub-section (3). Sub-section (4). Sagdish Bharti v. Union of India, 1969 Lab. IC 205 (Allahabad). Section 31(1). Provision to Section 31(1). Section 31(2). Section 32. Section 31(1). Section 32(2).

CHAPTER

7 Members, Office Holders and Outsiders in Trade Unions I. SOME DISTURBING ASPECTS OF OUTSIDERS IN THE UNION One of the significant features of Indian trade union movement is outside leadership. The early trade union movement was led by philanthropists and social reformers. Said the Royal Commission on Labour in India: At present, the union depends for their leaders mainly on social workers, lawyers and other professionals and public men. A few of these have interested themselves in the movement in order to secure private and personal ends. The majority, however, are motivated by an earnest desire to assist labour.1 Since independence, many of them have identified themselves completely with labour some others have engaged entirely in political activities; still others continue to work both in political and labour fields. Several factors have been responsible for outside interference in the executive of trade unions. First, the majority of workers are illiterate. Second, fear of victimization and of being summarily dismissed by management were further responsible for outside interference in the trade union movement. Third, the financial weakness of trade unions and absence of full-time trade union workers have given the opportunity to outsiders to interfere in trade unions’

administration and in their executive.

II. RIGHTS OF MINORS TO MEMBERSHIP OF TRADE UNIONS Section 21 provides that any person who has attained the age of 15 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.

III. OUTSIDERS IN THE UNION EXECUTIVE AND THE LAW Section 22 of the Trade Unions Act, 1926, provides: Proportion of office-bearers to be connected with the industry: (1) Not less than one half of the total number of the office-bearers of every registered trade union in an unorganized sector shall be persons actually engaged or employed in an industry with which the trade union is connected: (1) Provided that the appropriate government may, by special or general order, declare that the provision of this Section shall not apply to any trade union or class of trade unions specified in the order. Explanation: For the purposes of this section, ‘unorganized sector’ means any sector which the appropriate government may, by notification in the official gazette declare. (2) Save as otherwise provided in sub-section (1), all office-bearers of a registered trade union, except not more than one-third of the total number of the office-bearers or five, whichever is less, shall be persons actually engaged or employed in the establishment or industry with which the trade union is connected. Explanation: For the purpose of this sub-section, an employee who has retired or has been retrenched shall not be construed as an outsider for the purpose of holding an office in a trade union. (3) No member of the council of ministers or a person holding an office of profit (not being an engagement or employment in an establishment or

industry with which the trade union is connected), in the Union or a state, shall be a member of the executive or other office-bearer of a registered trade union. The aforesaid provisions which permit non-employees to be an officebearer of a registered trade union raises various problems: (a) What is meant by the ‘outsider’? (i) Whether an ex-worker or a worker whose services had been terminated by the employer may be treated as an outsider? (ii) Whether a full-time employee of a trade union should be treated as an outsider? (b) Whether there should be a legal ban on non-employees holding positions in the executive of the union? Does it affect Article 19 of the Constitution? (c) Whether the present limit of non-employees in the executive of a trade union be curtailed? (iii) Whether union leaders should be debarred from holding offices in more than a specified number of unions? Let us discuss these questions.

A. Concept of Outsider The explanation of sub-section 2 of Section 22 provides that for the purposes of this subsection, an employee who has retired or has been retrenched shall not be construed as outsider for the purpose of holding an office in a trade union. The Supreme Court in Bokajan Cement Corporation Employees' Union v. Cement Corporation of India Ltd2 held that an employee would not cease to be a member of a trade union on termination of his employment because there is no provision in the Act or the constitution of trade union providing for automatic cessation of employment. A question therefore arises whether an employee whose services are terminated or who has retired would be an outsider. The question can only be answered in affirmative because it is not desirable to permit dismissed workers in the executive of a trade union.

B. Entry of Outsiders in the Executive of Trade Unions As the law stands today, there is no bar to having outsiders such as lawyers, politicians, social workers etc., in the executive of trade unions. Conflicting views have, however, been expressed in regard to the question of banning outsiders in the executive of trade unions. Managements do not favour outside entry in the executives of trade unions. Workers, on the contrary, are of the view that devoted leaders, even if they are outsiders, should be permitted to be office-

bearers of trade unions. They are of the view that management or any outside agency should not interfere in their affairs. If they decide to allow outsiders in the trade union's executive, they should be permitted to do so. However, subsection 3 of Section 22 debars (i) a member of the council of ministers or (ii) a person holding an office of profit, other than those engaged or employed in an establishment or industry with which the trade union is connected, in the Union or state to be a member of the executive or office-bearer of a registered trade union. (iii) From the above it appears that a member of the Parliament or state legislature or ex-member of the council of ministers may become a member or executive or other office-bearer of a registered trade union.

C. Number of Outsiders in the Executive of Trade Unions The Trade Unions Act now places the limit of 50 per cent in case of unorganized sector. However, all office-bearers of a registered trade union except not more than one-third of the total number of office-bearers or 5, whichever is less shall be persons actually engaged or employed in the establishment or industry with which the trade union is connected.

IV. DISQUALIFICATION OF OFFICE-BEARERS The following persons are not eligible to be appointed as office-bearers or members of the executive of a registered trade union if (i) he has not attained the age of 18 years; (ii) he has been convicted by a court in India of any offence involving moral turpitude and sentenced to imprisonment, unless a period of five years has elapsed since his release.3 Section 21A(2) gives retrospective effect to the application of the aforesaid clause. It provides that any member of the executive or other office-bearer of a registered trade union who, before the commencement of the (Indian) Trade Unions (Amendment) Act, 1964 has been convicted of any offence involving moral turpitude and sentenced to imprisonment shall on the date of such commencement cease to be a member or office-bearer unless a period of five years has elapsed since his release before that date.

In R Murugesan v. Union Territory of Pondicherry,4 the Madras High Court held that where a dispute arises as to who are validly and legally elected office-bearers of a trade union, the Registrar is under an obligation to decide the question so that he can record the name in his register. For this purpose, the scope of enquiry is limited. Otherwise, the registrar will be in an enviable position of having to record two sets of office bearers of the same trade unions without having any power to decide as to which of them will be recognized for the purpose of administration of the Act.5

V. CEILING ON HOLDING OFFICES IN TRADE UNIONS Another problem of great practical significance is whether union leaders should be debarred from holding office in more than a specified number of unions. The first National Commission on Labour is of the view that there should not be any legal ban on leaders from holding the executive post of more than one union. The view is, however, open to criticism. In order to attract only devoted and hard-working leaders in trade unions, it is necessary to place some limit on the union leaders from holding office of more than a specified number of unions. It is significant to note that Section 33 (iii) of the Industrial Relations Bill, 1978, provided that a person shall be disqualified for being chosen an office-bearer of a registered trade union if he is already office-bearer of not less than four trade unions. This will ensure the entry of only devoted and interested persons in the trade union’s executive. Be that as it may, the (Second) National Commission on Labour in its report to the Government of India submitted on 29 June 2002, inter alia recommended that a ceiling on the total number of trade unions of which an 'outsider' can be a member of executive bodies is needed.

VI. TENURE OF ELECTED OFFICEBEARERS/MEMBERS OF EXECUTIVE Section 6(hh) of the Trade Unions Act 1926 provides that the members of the executive and other office-bearers of a trade union shall be elected for a period of not more than 3 years.

VII. RIGHTS AND DUTIES OF OFFICE-BEARERS AND MEMBERS An office-bearer or member shall be entitled to inspect: (i) the account-books; and (ii) list of members6 at such time as may be provided for in the rules of the trade union. Further, a member not under 15 has a right to execute all instruments and give all acquittance necessary to be executed or given under the rules.7 The scope of the legal rights and privileges was delineated in Secretary of Tamil Nadu Electricity Board Accounts Subordinate Union v. Tamil Nadu Electricity Board.8 In this case, two workmen of the Tamil Nadu Electricity Board were allowed to do the full-time union work. However, the board refused to extend this facility after about 4 years. On a dispute being raised, the government referred it to the labour court for adjudication. The labour court held that this was a mere concession granted to the office-bearers of the union and was not a part of service condition. Aggrieved by this order, the trade unions preferred a writ petition before the Madras High Court. Three issues were raised, namely: (i) Whether the workman had a legal right to do trade union activity without attending to office duties? (ii) Whether the withdrawal of permission to do trade union work on full-time basis would affect the service conditions? and (iii) Whether it is a privilege within the meaning of Item 8 of Schedule IV of the Act? The court answered all the issues in the negative and observed: It is true that trade unionism (has been) recognized all over the world but that does not mean that an office-bearer or any trade union can claim, as a right, to do trade union activities during office hours. In a poor country like India, tax payers pay money not for the purpose of encouraging trade unionism, but in the fond and reverend hope that every person who is entrusted with the task of doing service will do his service. Whether he actually does service or not, there can be a fond expectation of the same. To allow one to claim as of right to do trade union activity without attending to office duties, would in my opinion be an anachronism since it will amount to fleecing the tax payer in order to encourage trade union activities. That is not the purpose for which the workman was appointed by the Electricity Board. The Court further stated: [We] are totally unable to appreciate the argument of the

petitioner that merely because the recognition of trade union is a part of the service condition, it must necessarily follow that a right to represent or espouse the cause of workmen during office hours is a necessary concomitant. If this kind of trade unionism is allowed to flourish in our country, I could say ‘Woe to our country and poor tax payers.’ For my part, not that one should be against trade unionism, which is welcome because it is that which brings about solidarity among workers, the crucial question is, can a right be claimed to active trade unionism during office hours? The answer should be an emphatic ‘no’. Again in Indian Bank Employees Union v. Indian Bank9, it was held that a trade union worker cannot enjoy the luxury of getting salary and not doing the assigned work. In other words, the indulgence of trade union activity cannot be at the cost of the work for which they are paid their emoluments by the employer. In Burn & Co. v. Their workmen10, the Court held that the office-bearers are not immune from punishment for remaining absent from their duty. Likewise, office-bearers of a trade union are not immune from disciplinary action.11 Moreover, office-bearers of a trade union cannot claim immunity from transfer.12 Again, in Usha Breco Mazdoor Sangh v. M/s Usha Breco Ltd13, it was held : 1. Whereas the management cannot resort to victimization and unfair labour practice so as to get rid of the union leaders, the union leaders in turn are bound to maintain discipline; 2. A union leader does not enjoy immunity from being proceeded against in a case of misconduct. 3. Assault and intimidation are penal offences. A workman indulging in commission of a criminal offence should not be spared only because he happens to be a union leader. It is submitted that the Court, while recognizing the need of a healthy trade union, cautioned that it should not be at the cost of the tax payer. This appears to be a very healthy approach and would bring discipline in the industry.

VIII. TRANSFER OF OFFICE-BEARERS OF TRADE UNION

It has now been held in a series of cases of the Supreme Court and high courts that : (i) The power of the employer to transfer its employees (including the officebearers of trade union is a general conditions of service of the employee and that such transfers are to be effected for administration convenience of the board and the court does not sit in appeal nor calls for details of administrative exigencies); (ii) The employee under transfer cannot claim any immunity from transfer merely by reason of his being office bearer of the trade union; (iii) The fact that the office bearer of the trade union organized protests and agitations is not a ground from which intention to victimize the petitioner (office bearer of trade union) can be inferred. (iv) Only in cases where the order of transfer is found to be mala fide or colourable exercise of power, would the order become illegal; (v) Transferring an employee because he is troublesome/trouble-maker would be in the interest of administration and such transfers cannot be characterized as punishment.14 In Singapore Airlines Ltd v. Mr Rodrigntin15, the plaintiff joined the Singapore Airlines Ltd as clerk at Mumbai on 5 January 1987. As per item 6 of the appointment letter, the airlines was empowered to transfer the plaintiff at any time at any SAL station all over India at its discretion. However, according to the plaintiff, the airlines had not transferred any employees from Mumbai to elsewhere. The plaintiff was carrying on trade union activities for more than 10 years and he was also elected as president of the union. According to the plaintiff, as the defendant wanted to prohibit him from participating in trade union activities and charter of demands made by the union, the airlines transferred the plaintiff to Jalandhar. The airlines issued transfer order on 9 July 2007 and asked him to join within 15 days. According to the plaintiff, the transfer was mala fide and not in accordance with model standing orders. According to the airlines, it transferred the plaintiff because it wanted to concentrate on its business at Jalandhar and since the plaintiff was experienced in marketing for over 10 years; it decided to transfer him from Mumbai to Jalandhar. Upholding the validity of the order of transfer, the Bombay High Court ruled: 1. Merely that the employee is president of the union, the transfer would not be mala fide. 2. Transfer cannot be stalled merely because he is an office-bearer of the

union; 3.

Had there been mala fide intention of the management, transfer of the employee who has been an active worker of the union for the last 10 years would have been made earlier also; 4. It is an individual dispute and not an industrial dispute. The union has not passed any resolution supporting the case of the employee. It did not espouse or take up or support his case. Hence, civil court has no jurisdiction; 5. Inconvenience to the employee is not relevant to stay the transfer; 6. In matter of transfer, employee who has been served with the transfer order must first report to the place where he is transferred and, thereafter make a representation or file legal proceedings; The Court, accordingly, set aside the order of the trial Judge that the transfer was mala fide and not in accordance with terms of contract.

IX. INTER-UNION AND INTRA-UNION RIVALRIES Since independence, inter-union and intra-union rivalries, primarily based on political considerations, leading to disputes between rival sets of office-bearers of trade unions, have become sharper. However, except non-statutory Code of Discipline evolved in 1958 which has failed to achieve the desired result, there is at present no legal machinery or procedure for resolution of inter-union disputes in the Trade Unions Act. To fill this gap, the Trade Unions (Amendment) Bill, 1982, provides for such machinery. Section 2(i) of the Bill defines ‘trade union dispute’ to mean any dispute: (a) between one trade union and another; or (b) between one or more members or office-bearers of a trade union and the trade union (whether also with any of the other members or office-bearers of the trade union or not) relating to its registration, administration or management of its affairs, including the appointment of the members of the executive or other office-bearers of the trade union, the validity of any such appointment, the area of operation of the trade union, verification of membership and any other matter arising out of the rules of the trade union, but excluding matters involving determination of issues as to the title to, or ownership of, any building or other property or any funds.

And, Section 28B permits the parties to a trade union dispute to refer such dispute for arbitration. Such arbitration agreement must be in the prescribed form and signed by the parties in the manner prescribed by regulation. Further, Section 28C empowers the Registrar to follow such procedure as he thinks fit in adjudging the disputes referred to him. The procedure that may be followed by the Registrar will be subject to such regulation as may be made in this regard. Any person aggrieved by the award of the Registrar in a reference may appeal to the court within such period as may be prescribed by regulation. The Bill also permits the parties to trade union disputes to apply jointly or separately in the manner prescribed by regulation for adjudication of disputes to the Registrar.

1 2 3

4 5 6 7 8 9 10 11 12 13 14

Government of India, Report of the Royal Commission in India (1931) 328. 2004 1 LLJ 197. Section 21A(i) of the Trade Unions (Amendment) Bill, 1982 provides for insertion of a new clause viz., ‘(iii) he has been convicted of any offence under the Industrial Disputes Act, 1947.’ (1976) 2 LLJ 435. Sanjeeva Reddi v. Registrar of Trade Unions, (1969) 1 LLJ 11 and Mukund Ram Tanti v. Registrar of Trade Unions, (1963) 1 LLJ 60. Section 20. Section 21. (1984) 2 LLJ. 478. (1994) 2 LLJ 497. (1959) I LLJ 458. (1991) LLR 456. TNEB Engineers Sangam v. Tamil Nadu Electricity Board, (1996) LLR 942 (Mad). 2008 LLR 619. Varada Rao v. State of Karnataka, (1986)11 CLR 277 (SC); N K Singh v. Union of India, (1995) 1 LLJ 854 (SC); TNEB Engineering Sangram v. Tamilnadu Electricity Board, AIR 1966 SC 1685. (2004) ILLJ 197 (SC).

CHAPTER

8 Trade Union Finances and Funds I. FACTUAL REVIEW The weakness of a trade union is also determined by its financial status. It is, therefore necessary to know the income and expenditure of workers’ and employers’ unions from 1996 to 2005. Table 8.1: Income and Expenditure of Registered Workers’ and Employers’ Trade Unions Submitting Returns for the Years 1991 to 2005

Source: Government of India, Ministry of Labour, Indian Labour Year Book, 2007 (2009), 90.

From Table 8.1, it is evident that during 2005, income as well expenditure of workers’ unions, as compared to previous years, have witnessed considerable increase. In case of employers’ unions, both income and expenditure of unions submitting returns registered a decrease during the period under reference. But the average income of trade unions is inadequate looking at the size of the unions. Several factors accounted for low average income of trade unions: First, the strength of union members is inadequate due to small size of unions and irregularity in payment of membership subscription. Second, workers are apathetic towards trade unions and do not want to give their hard-earned money. Third, unions are also interested in boosting up their membership figures and, therefore, do not insist on regular payment.1 Fourth, lack of full-time trade

union staff may be responsible for irregularity in collection of membership subscription.

II. MEMBERSHIP SUBSCRIPTION: LAW’S RESPONSE A. Rate of Subscription of Union Members Section 6 (ee) of the Trade Unions Act, 1926, provides that the payment of minimum subscription by members shall not be less than: (i) one rupee per annum for rural workers; (ii) three rupees per annum for workers in other unorganized sectors; and (iii) twelve rupees per annum for workers in other cases. The aforesaid clause provides minimum membership fee. The basic difficulty of trade unions is about the realization of monthly subscription from its members. The subscription is not regularly paid and accumulation of ‘arrears pertaining to several years are not uncommon’. Equally common is the practice of collecting subscription from those who want to avail themselves of the privileges of being a trade union member.2 These irregularities can be eradicated by providing a machinery for regular realization of dues. Further, the aforesaid rate of subscription is inadequate and creates a hurdle in effective functioning of unions.

B. Right of Members to Subscribe The members of trade unions are members under Section 6(e) of the Trade Unions Act, 1926. The payment of subscription by members to the trade union has been made compulsory under Section 6(ee) of the Act. The trade unions cannot refuse to receive subscription from its members.3 The same has been declared as a right of members.4

C. Realization of Union Subscription and Check-off In India, the Trade Unions Act, 1926 does not provide for check-off facilities. The check-off system is a system under which the employer regularly deducts membership subscription from the wages of employees and hands over the amount to the union. This system is in vogue in USA and UK and is enforced through a clause in the collective bargaining agreement and is made legally permissible.5 Obviously, the collection is made by the union concerned from the

members. This is a lacuna in the law. To fill this gap, the (First) National Commission on Labour recommended that the right to demand check-off facilities should vest with the union and if such a demand is made by a recognized union, it should be made incumbent on the management to accept it. In this direction, an attempt was made by the Trade Unions (Amendment) Bill, 1969. The Bill empowered the employer to deduct the subscriptions from the pay of employees for handing over the same to the appropriate union.

D. Deduction of Subscription Under Payment of Wages Act, 1936 Section 7(2)(kkk) of the Payment of Wages Act, 1936 permits deduction of subscriptions from willing members of the trade union and employer is bound to deduct and remit the same into the account of the trade union. Thus, Section 7(2) (kkk) provides: 7. Deductions which may be made from wages. (2) Deductions from the wages of an employed person shall be made only in accordance with the provisions of this Act, and may be of the following kinds only, namely, (kkk) deductions made with the written authorization of the employed person, for payment of fees payable by him for membership of any trade union registered under the Trade Unions Act, 1926 (16 of 1926). Thus, there is a statutory duty/obligation on the part of the employer to deduct subscription payable by the members of registered trade unions, who have given consent/authorization in writing. Refusal by the employer to deduct and remit the amount to the account of the registered trade union is a statutory violation and the same amounts to defeating the object of forming trade unions.6

E Check-off: Judicial Response Judicial policy to strengthen the hands of trade unions by allowing union subscription to be deducted by employer is evident from the judgement in Balmer Lawrie Workers’ Union v. Balmer Lawrie & Co. Ltd.7 The Supreme Court examined the validity of a clause of settlement between employer and a representative union which authorized the employer to deduct 15 per cent of gross arrears payable to workmen towards union fund. Upholding the validity of the clause, the Court observed:8 It is well known that no deduction could be made from the

wages and salary payable to a workman governed by the Payment of Wages Act unless authorized by that Act. A settlement arrived at on consent of parties can be however, permitted as it is the outcome of understanding between the parties even though such deduction may not be authorized or legally permissible under the Payment of Wages Act …. Such deductions can neither be said to be compulsory exaction nor tax. Therefore such a provision of deduction at a certain rate as agreed between the parties for payment to the union, the same being with the consent and as part of overall settlement would neither be improper nor impermissible nor illegal. The Court therefore, rejected the contention that by permitting deductions towards union fund of one union, the management discriminated between union and union, and between members of the union and non-members and thereby violated Article 14 of the Constitution. The division bench of the Madras High Court in State Bank Staff Union v. State Bank of India9 held that the plea of the recognized trade union that it should alone be given the check-off facility cannot be accepted because: (i) check-off facility granted to the recognized trade union under the code of discipline was not statutory in character; (ii) There was nothing in the code to indicate that such a facility must be given only to the recognized trade unions. The aforesaid view as reiterated in Coimbatore Periyar District Dravida Panjalal Thozhilalar Muneetra Sangam v. National Textile Corporation Ltd.10 In this case, the Madras High Court held that management was not justified in refusing to deduct and remit subscriptions to the account of the registered trade unions, a practice which has been in vogue for the past 25 years, merely on the ground that the said trade unions were not recognized unions for the purposes of negotiations. In Rashtriya Colliery Mazdoor v South Eastern Coalfields Ltd.11, the Madhya Pradesh High Court upheld the order of withdrawal of check-off facility to the petitioner on the ground that it is not affiliated to one of the recognized central trade union organizations which are in turn recognized under the Code of Discipline as being the representative union under industrial relations prevalent in the SECL. The Court also held that it is a policy matter of the petitioner and since a policy decision is taken and code of conduct has been evolved by the process of joint consultative machinery, the same is beyond the scope of judicial review.

III. GENERAL FUND: PURPOSES FOR WHICH IT MAY BE SPENT Section 15 of the Trade Unions Act, 1926, lays down the purposes for which general fund of a registered trade union can be utilized 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 general funds of the trade union; (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 to members for loss arising out of trade disputes; (f) the 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 expenses of funeral or religious ceremonies for deceased member) 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, for 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 upto 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.

Refund of Subscription In G S Dhara Singh v. E K Thomas12, the Supreme Court held that any amount received from or on behalf of members by trade union, is liable to be refunded to the members on resignation from the trade union.

IV. POLITICAL FUND As mentioned earlier, trade unions have political affiliation and they are often compelled to plunge in political sphere in order to show their strength. Law, therefore, cannot keep itself away from realities. It is in view of this that Section 16 of the Act permits a registered trade union to raise a separate political fund for its members in furtherance of the objectives mentioned in Section 16 (2), namely; (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 for any local authority; or (d) the registration of electors or the selection 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. Of these, clause (c) requires further examination. This clause which confers a right upon a trade union to spend as much as it likes for the maintenance of the member has been criticized13 on the ground that: (i) it violates the fundamental right to equality as guaranteed by the Indian Constitution (ii) it results in improper influence on the members thereby

interfering with the freedom of speech amounting to breach of privilege (iii) it encourages the growth of puppet legislators who can get double maintenance (iv) such a provision has great potential for corrupting our parliamentary system and (v) a new line of lobbying pattern emerges.14

Nature and Effect of Non-contribution Contribution to the political funds of the trade union is merely voluntary and not compulsory. Thus, no member who does not contribute to the fund shall be under any disability or disadvantage except in respect of management and control of such funds. Further, a non-contributory member cannot be excluded from the benefits of the trade union. Moreover, no condition can be imposed for the admission to membership of the union.15 While dealing with the provisions of separate political fund, the [second] National Commission on Labour in its report felt that it may be allowed to continue and appropriately included it in the proposed integrated law. However, care must be taken to ensure that the general funds of trade unions are not used for political purposes.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

S C Pant, Indian Labour Problem (1964), p 101. Ibid. Coimbatore Periyar Districts Dravida, Panjalal Thozhilalar Munnetra Sangam v. National Textile Corporation Limited, 2011 LLR 1076 (HC Madras). M T Chandrasennan v. N Sukumaran, AIR 1974 SC 1789. See Government of India, Paper of the National Commission on Labour, (1969), 294. See infra note 10. (1985) Lab. IC 242. Id. at 253 (emphasis added). 1991 Lab. IC 197. (2011) 4 LLJ 857. 2009 Lab IC 2836. AIR 1988 SC 1829. See Shashi K Sharma, Maintenance Clause as per Section 45 16(2) (c) of the Trade Unions Act, 1926, 22 JILJ 282 (1980). Ibid. Section 16(3).

CHAPTER

9 Privileges of Registered Trade Unions Let us turn to consider the immunity afforded to the members and office-bearers of registered trade unions from civil and criminal conspiracies and restraint of trade under the Trade Unions Act. Until 1926, unions or workers indulging in strike and causing financial loss to management were liable for illegal conspiracies. For instance, in Buckingham and Carnatic Mills, the unions were held liable for illegal conspiracies and employers were awarded damages.

I. IMMUNITY FROM CRIMINAL CONSPIRACY A. Only a Fraction of Labour Force Protected Section 17 of the Trade Unions Act, 1926, (hereinafter referred to as TUA) seeks to insulate trade union activity from liability for criminal conspiracy: No office-bearer or member of a registered trade union shall be liable for punishment under sub-section (2) of Section 120 B of the Indian Penal Code 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. The immunity is, however, available only: (i) to office-bearers and members of registered trade unions; (ii) for agreement between the members;

(iii) such agreement that may further any such trade union object as is specified in Section 15 of the Act; and (iv) such agreements is not to commit an offence. The first of these limitations confines the protection to a only members and office-bearers of a trade union. Table 9.1 tabulates the position of registered trade unions. Table 9.1: Number of Registered Unions (Workers’ and Employers’) and Membership of Unions Submitting Returns for the Years 1991 to 2006

Source: Government of India, Indian Labour Year Book. 2008 (2010) 85.

B. Immunity Jeopardizes Community’s Interests As to the second limitation, the most significant provision is Section 15 which relates to the conduct of trade disputes on behalf of the trade union or any

member thereof. The key expression ‘trade dispute’ is defined in Section 2 (g) of the Act to mean: any dispute between employers and workmen or between workmen and workmen or between employers and employers which is connected with employment or non-employment, or the terms of employment or the conditions of labour, of any person. The words used in this definition differ from the definition of ‘industrial dispute’ in the Industrial Disputes Act, 1947 (hereinafter referred to as IDA) in two minor respects (i) whereas the Trade Unions Act uses the word ‘trade’ or ‘industry’, the Industrial Disputes Act uses the legislatively defined word ‘industry’; and (ii) the definition of ‘trade dispute’ omits the words ‘or difference’ which occur in the definition of ‘industrial dispute.’ We believe that despite these differences, the definition of ‘trade dispute’ as such, is pari materia with the definition of ‘industrial dispute’ and generally the controlling judicial decisions1 while interpreting the latter definition also delineate the contours of the former definition. An effective difference between the respective coverages of the definition of ‘trade dispute’ and ‘industrial dispute’ arises because of the definition of ‘workmen’ in the TUA. The aforesaid Section 2(g) of TUA further states that ‘workmen’ means: all persons employed in trade or industry whether or not in the employment of the employer with whom the trade dispute arises (emphasis added). It will be noticed that on the one hand, the italicized words in the aforesaid definition did not occur in the corresponding definition of ‘workman’ in the IDA. On the other hand, a whole series of qualifying words used in the definition of ‘workman’ in the IDA are conspicuous by their absence from the corresponding definition in the TUA. Under Section 2(s) of IDA: workman means any person (including 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 for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched 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 Army Act, 1950, or the Air Force Act, 1950 or the Navy Act, 1957; or (ii) who is employed in the police service or as an officer or employee of a prison; or (iii) who is employed mainly in a managerial or administrative capacity; or (iv) who, being employed in a supervisory capacity, draws wages exceeding one thousand and six hundred rupees per mensem or exercises, either by the nature of duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature. The Trade Unions Act, 1926 has the potential2 to cover a much larger number of persons than the Industrial Disputes Act, 1947. Thus, Section 17 of the TUA grants immunity from liability for criminal conspiracy to persons in whose industrial dispute the government cannot intervene, whether by way of conciliation or adjudication, and in the absence of the possibility of such intervention, the provisions of the IDA regulating the use of instruments of economic coercion do not apply.

C. Nature of the Immunity The last of the limitations on the scope of the immunity granted by Section 17 of the TUA raises an issue relating to the very nature of the immunity. Section 120A of the Indian Penal Code (hereinafter referred to as IPC) defines criminal conspiracy to mean: (i) an agreement between two or more persons to commit an offence, i.e., in, general,3 an act which is punishable under IPC or any other law for the time being in force; and (ii) an overt act done in pursuance of an agreement between two or more persons to do an illegal act or to do a legal act by illegal means. The IPC defines the word ‘illegal’ to include, inter alia: … everything which is prohibited by law, or which furnishes ground for a civil action.4 Since workman’s use of instruments of economic coercion in an industrial dispute involves breach of contract and injury to the property right of the employer, both the acts are actionable, and amount to an illegal act within the meaning of Section 120A read with Section 43 of the IPC. But under Section 17, breach of contract and injury to employer’s

property cease to be actionable and, therefore, do not amount to criminal conspiracy as defined in Section 120-A read with Section 43 of the IPC. A question therefore, arises as to what is the criminal liability in respect of which Section 17 of the TUA grants immunity. In considering the matter, it is relevant to note that Section 17 does not grant charter of liberty to commit an offence, which is punishable with death, life imprisonment or rigorous imprisonment for a term of two years or more.5 In fact, the last words of the Section 17 of the TUA indicate that it does not insulate agreement to commit any offence whatsoever. Perhaps the immunity is confined to an agreement between two or more persons to do, or cause to be done, acts which are prohibited by law but which neither amount to an offence nor furnish grounds for civil action. Breach of contract does give rise to a civil cause of action. Therefore, under Section 43 of the IPC, an agreement to commit breach of contract through withdrawal of labour as an instrument of economic coercion in an industrial dispute is a criminal conspiracy. Further, so long as any law declares withdrawal of labour in breach of contract to be an offence, if a member of the consenting party takes any step to encourage, abet, instigate, persuade, incite or in any manner act in furtherance of the objective, criminal conspiracy would have been committed. Finally, since criminal conspiracy is a substantive offence punishable under Section 120B of the Indian Penal Code, it is doubtful if Section 17 grants immunity at all. The word ‘illegal’ is applicable to everything which is an offence or which is prohibited by law, or which furnishes ground for a civil action, and a person is said to be ‘legally’ bound to do, whatever it is illegal in him to omit. Reading Section 18 of the Trade Unions Act with Section 43 of the Indian Penal Code, it would appear that withdrawal of labour as an instrument of economic coercion in an industrial dispute in breach of contract is not illegal. Accordingly, an agreement between two or more workmen, members of a registered trade union to withdraw labour as an instrument of economic coercion in an industrial dispute is not an agreement ‘to do or cause to be done an illegal act’ and amounts to a criminal conspiracy within the meaning of Section 120-A of the IPC. Accordingly, withdrawal of labour in breach of contract does not give rise to a cause of action in civil courts.

D. Judicial Response The Calcutta High Court in Jay Engineering Works Ltd v. Staff6 while interpreting the provisions of Section 17 observed: No protection is available to members of a trade union for any

agreement to commit an offence … When a group of workers, large or small, combine to do an act for the purpose of one common aim or object, it must be held that there is an agreement among the workers to do the act and if the act committed is an offence, it must similarly be held that there is an agreement to commit an offence.

II. IMMUNITY FROM CIVIL ACTIONS Section 18 of the Trade Unions Act, 1926, grants immunity to registered trade unions from civil suits.7 (i) No suit or other legal proceeding shall be maintainable in any civil court against any registered trade union or any office-bearer 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 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 his labour as he wills. (ii) A registered trade union shall not be liable in any suit or other legal proceeding in any civil court in respect of any tortuous 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 unions. The above section does not afford immunity to the members or officebearers of a trade union for an act of deliberate trespass.8 The immunity also cannot be availed of by them for unlawful or tortuous act.9 Further, such immunity is denied if they indulge in an illegal strike or gherao. Moreover, the immunities enjoyed by the union do not impose any public duty on the part of the union.’10 The section, however, raises various problems.11 First, like immunity from criminal conspiracy, immunity from civil action is also confined to members of the registered trade unions. We have already seen that such protection was limited to 10.6 per cent of the labour force in 2005. Second, it does not afford adequate protection from civil liabilities. For, it

is arguable whether it gives protection and, if so, to what extent in excess of the aforementioned Section 17 of the Trade Unions Act. A suit or proceeding may not be maintainable for a number of reasons. Does it necessarily follow that the conduct does not ‘furnish ground for civil action’ within the meaning of Section 43 of the Indian Penal Code? Third, the expression ‘in contemplation or furtherance of a trade dispute to which a member of the trade union is a party’ is obviously narrower than the ambit of protection under the said Section 17. Fourth, Section 18 helped in maintenance of union funds, howsoever meagre. The real significance is in rejecting the application of the common law doctrines of restraint of trade and criminal conspiracy in so far as they encroach on the field of labour management relations. Together with Section 17, it provides a great impetus for, and facilitates the active participation of ‘outside leaders’ in the trade union movement. In Rohtas Industries Staff Union v. State of Bihar12, certain workmen went on an illegal and unjustified strike at the instance of the union. A question arose whether the employers had any right of civil action for damages against the strikers. The arbitrator held that the workers who participated in an illegal and unjustified strike, were jointly and severally liable to pay damages. On a writ petition, the Patna High Court quashed the award of the arbitrator and held that employers had no right of civil action for damages against the employees participating in an illegal strike within the meaning of Section 24 of the Industrial Disputes Act, 1947. From this decision, it is evident that Section 18 grants civil immunity in case of strike by the members of the trade union. On appeal, the Supreme Court affirmed the judgement of the High Court on the ground that the claim for compensation and the award thereof in arbitration proceedings were invalid and such compensation for loss of business was not a dispute or difference between the employers and the workmen which was connected with the employment or non-employment or terms of employment or with the condition of labour of any person. The Supreme Court did not decide the question as to whether the Patna High Court was right in relying on Section 18 of the Act to rebuff the claim for compensation because the Supreme Court did not wish to rest its judgement on that ground. In Jay Engineering Works v. Staff13, the full bench of the Calcutta High Court was invited to consider the question whether the protection under Sections 17 and 18 of the Trade Unions Act can be availed of where workers resort to gherao. Chief Justice Sinha explaining the scope and ambit of protection observed:

The net result of the decision set out above is that Sections 17 and 18 of the Indian Trade Unions Act grant certain exemption to members of a trade union but there is no exemption against either an agreement to commit an offence or intimidation, molestation or violence, where they amount to an offence. Members of a trade union may resort to a peaceful strike, that is to say, cessation of work with the common object of enforcing their claims. Such strikes must be peaceful and not violent and there is no exemption where an offence is committed. Therefore, a concerted movement by workmen by gathering together either outside the industrial establishment or inside, within the working hours is permissible when it is peaceful and does not violate the provisions of law. But when such a gathering is unlawful or commits an offence then the exemption is lost. Thus, where it resorts to unlawful confinement of persons or criminal trespass or where it becomes violent and indulges in criminal force or criminal assault or mischief to person or property or molestation or intimidation, the exemption can no longer be claimed. The Calcutta High Court once again in Reserve Bank of India v. Ashis14 held that in order to secure immunity from civil liability under Section 18, inducement or procurement in breach of employment in furtherance of trade dispute must be by lawful means and not by means which would be illegal or wrong under any other provisions of the law. The Madras High Court in Sri Ram Vilas Service Ltd v. Simpson Group Company Union15 held that it was not within the purview of the High Court to prevent or interfere with the legitimate rights of the labour to pursue their agitation by means of a strike so long as it did not indulge in unlawful and tortuous acts. In Federation of Western India Cine Employees v. Filmalaya Pvt. Ltd16, a question arose whether an injunction can be issued restraining the trade union, its members or agents from acting upon the direction issued by the union, namely, not to report at the studio? The Bombay High Court answered it in the negative because such act was protected by Section 18 of the Trade Unions Act, 1926. In this case, there was a dispute between Filmalaya Pvt. Ltd, a private limited company and the workers (represented through federation of affiliated unions) regarding employment, non-employment, status of 19 employees and alleged illegal termination of services of certain workers. The federation of the concerned affiliated union issued a letter on 3 May 1980 addressed to various

bodies and associations of cine artists, technicians and workers requiring them to issue instructions directing their members not to report for shooting work at the studio of Filmalaya Pvt. Ltd. The net effect of that letter was that the business of the company came to a standstill. The company, therefore, filed a suit against the employees mainly for an injunction restraining them from acting upon the directive of the federation. The civil court came to the conclusion that there was no trade dispute pending between the parties and hence, Section 18 had no application to the fact. It also issued a notice of motion in absolute in terms of prayer. The High Court observed that the directions amount to intimidation or coercion and, therefore, are not protected by Section 18. The court added that the act in contemplation or in furtherance of trade dispute, which induces breach of contract of other employees causes interference with the trade, business or employment of some other person, fell within the ambit and scope of Section 18. However, the inducement or interference must be by lawful means. In other words, Section 18 does not give protection to trade union from acts of violence.17 The court accordingly held that the union was entitled to carry out its legitimate trade union activities peacefully and, therefore, slogans or demonstrations per se could not be termed as unlawful and hence, a blanket injunction could not be granted in that behalf. The court however, cautioned that this was not to say that the trade union was also protected from its violent activities; activities which were normally termed as violent could not be regarded as trade union activities of a union. In Usha Breco Mazdoor Sangh v. Management of M/s Usha Breco 18 Ltd. , the Supreme Court ruled: (i) A workman indulging in commission of a criminal offence should not be spared only because he happens to be a union leader; (ii) A union leader does not enjoy immunity from being proceeded with in case of misconduct. Again, in Indian Bank v. Federation of Indian Bank Employees’ Union19, the Indian Bank sought an interim injunction against the employees’ unions restraining them from holding meetings, demonstrations, etc., within a radius of 50 metres of the central office or any of the branches of the bank. A question arose whether the bank was entitled to an interim injunction against its own employees? The Madras High Court held that an interim injunction would virtually prevent the exercise of statutory rights conferred on unions to hold demonstrations and meetings within the scope of the Trade Unions Act and, therefore, no injunction could be issued. The court, however, added that if any act is committed resulting in unlawful activities, and constitutes cognizable

offences under the Indian Penal Code, or other special enactments like the Banking Regulations Act, 1949, etc., the immunity available under the Trade Unions Act, 1926, would not be available. In Ahmedabad Textile Research Association v. ATlRA Employees 20 Union , a division bench of the Gujarat High Court held that it is not within the purview of the civil court to prevent or interfere with the legitimate rights of the workmen to pursue their demands by means of strike or agitation or other lawful activities so long as they do not indulge in acts unlawful, tortuous and violent. The court further held that any agitation by the workmen must be peaceful and not violent. Any concerned movement by workmen to achieve their objectives is certainly permissible even inside the industrial establishment. In Orchid Employees Union v. Orchid Chemicals & Pharmaceuticals 21 Ltd , the Supreme Court held that although the trade union and its members were restrained to assemble within 100 meters of the boundary of the factory premises of the respondent company and raise slogans or obstruct the ingress and egress of the vehicles carrying raw materials and finished products, staff bus and other vehicles into factory premises, and obstruct the loyal workers, foreign customers and other visitors from entering into the respondent company and getting out of the same till the disposal of the suit or the conciliation proceedings, whichever is earlier. It was, however, observed that the above interim injunctions will not in any way interfere with the present appellants' rights to strike or peaceful picketing. Under the Trade Unions Act, 1926, the members of the union are certainly not permitted to involve themselves in violent activities. In such circumstances, giving police protection to factory by this court in exercising its jurisdiction under Article 226 of the Constitution of India is not unknown22. In Mining and Allied Machinery Corporation Ltd, (by its law officer and constituted attorney N X Mandal) v. Superintendent of Police, St. Thomas Mount, Madras,23 it was held that a negative approach of lawful agitation by the working class cannot be justified by resorting to law and order problem in the industrial sector, which is as follows: Strikes, lock-outs, satyagrahas and demonstrations are nothing new in our country. Promotion of social justice over the past few decades was to a considerable extent, due to militant and agitational approach of the workmen and not, to any appreciable degree, due to condescension by the management. It is but true that in the process of securing to the workmen more amenities and privileges and better condition of service, the industrial

tribunals, labour courts, and the courts of this country have played a vital role. A negative approach to lawful agitation by the working class to secure higher wages and better living conditions cannot be justified by resort to the plea of maintaining law and order in the industrial sector. The jurisdiction of this court in granting a writ of mandamus by directing the police to give protection to the management to carry on lawful trade was again reiterated by the division bench of Kerala High Court in Midland Rubber & Produce Co. Ltd, Cochin v. Superintendent of Police, Pathanamthitta and Others,24 wherein Justic A R Lakshmanan, while presiding over the bench, held as follows : …Just as the workers are entitled to protection of their legal rights by courts of law, the employers are also equally entitled to protection of their fundamental right to carry on their lawful trade or business. In our opinion, it is not open to the respondents—unions to take the law in their own hands and obstruct the permanent workers of the appellant from discharging their duties or prevent the appellant from doing the rain guarding work. Sufficient safeguards are provided under the Industrial Disputes Act to prevent exploitation of workers by employers. It is strange to find that one set of workers claimed the right to get employment on the basis of some practice and preventing the employer from engaging labour of their choice. If the claim of the labour is allowed, then a day will come when a citizen of this country has to seek his employment in his own village, taluk or district. Such a claim would run counter to the rights guaranteed under the Constitution of India. therefore the right now claimed by the respondents on the basis of some practice cannot be countenanced at all. The court added that Section 18(1) of the Trade Unions Act, 1926 certainly prohibits the employer from breaking the contract of employment and gives immunity to an office bearer in respect of the act done by him. When the employer attempts to divide the striking workers, which is not lawful, it is certainly open to the union and its members to approach the inspector of factories or raise an industrial dispute by treating the same as unfair labour practice, and the immunity granted under section 18(1) of the Act cannot mean to say that the union must be permitted to achieve its object by resorting to the

methods which are not permitted in law. In M/s Avtec Limited, Power Products Division Poonapally, Hosur v. Superintendent of Police, Krishnagiri District,25 the Madras High Court held that even thought Section 18 prohibits the employers from giving immunity to office bearer in respect of the act done by him but when there is violation of any law by the employer, it is open to the office-bearer of the union to approach the appropriate authority under the Factories Act, 1948 or to initiate proceedings for unfair labour practice. The court clarified that the immunity under Section 18(1) of the Trade Unions Act cannot mean that the union must be permitted to achieve its object by resorting to methods which are not permitted by law. The Court also held that even if it is presumed that the strike resorted to by members of the union is valid in law, it does not mean that the union and its members can indulge in any violent activity. If there is any breach of contract by the employer, the appropriate provisions are available to be invoked under Industrial Disputes Act but not to increase pressure on employer by violent means.

III. ENFORCEABILITY OF AGREEMENTS Section 19 grants protection to the agreement (between the members of a registered trade union) whose objects are in restraint of trade26 notwithstanding anything contained in any other law for the time being in force declaring such agreement to be void or voidable. However, this provision shall not enable any civil court to ‘entertain any legal proceedings instituted for the express purpose of enforcing or recovering damages for the breach of any agreement concerning the conditions on which any member of trade union shall or shall not’ (i) sell their goods; (ii) transact business; (iii) work; (iv) employ; or (v) be employed. The Act, however, like a ‘closed shop’ agreement, does not provide for enforceability of an agreement between the management and workers trade union.27 The net effect of the section is to validate agreement which is invalid being in restraint of trade under Section 27 read with Sections 23 and 24 of the Contract Act, 1872.

IV. TERMINATION AT THE INSTANCE OF UNION A trade union or a large number of employees cannot dictate to the employer to

dispense with the services of an employee if they do not like or approve the presence of certain workman in the factory. Thus, in A G Kher v. Atlas Copco (India) Ltd28, the management terminated the services of an employee because the union and majority of workmen did not like the shape of her nose or the colour of her hair and insisted that her services be terminated. The management defended the order of termination on the ground that the other workmen and the union had boycotted her and situation had gone to such a stage that the work of the factory was likely to be affected. While rejecting the plea of the management, the Bombay High Court held that (i) the contention is anamolous because the employer has no grievance against the petitioner and still the employee has been cast off to the wolves. (ii) there cannot be any justification for the order of dismissal of an employee merely because the other employees did not like the shape of the nose of the employee or the colour of her hair, (iii) the employee cannot be removed from service by stroke of pen because a large number of other employees do not approve of the presence of the employee in the factory premises, (iv) if such grounds are allowed for termination of services of an employee, it will open a floodgate of abuse and it would amount to closedshop policy.29

2 3

4 5

Newspapers Ltd v. Industrial Tribunal, (1995) 2 LLJ 1 (SC); Working Journalists of the Hindu v. The Hindu, (1961) 2 LLJ 188 (SC); Indian Cable Co. Ltd v. Its Workmen, (1962) 1 LLJ 409 (SC); Workmen of Rohtak General Transport Co. v. Rohtak General Transport Co., (1962) 1 LLJ 654 (SC): Workman v. Dharam Pal Prem Chand, (1965) 1 LLJ 668 (SC). Actually, because of the requirement of registration, the effective difference may be less. Section 40 of IPC defines the word ‘offence’ to mean ‘except in the chapters and sections mentioned in clauses 2 and 3 of this section the word’ offence ‘denotes a thing made punishable by this Code’. In Chapter IV, Chapter V-A and in the following sections namely, Sections 64, 65, 66, 67, 71, 109, 110, 112, 114, 115, 116, 117, 187, 194, 195, 203, 211, 213, 214, 221, 222, 223, 224, 225, 327, 328, 329, 330, 331, 347, 348, 388, 389, and 445, the word ‘offence’ denotes a thing punishable under this Code, or under any special or local law as hereinafter defined. And in Sections 141, 176, 177, 201, 202, 212, 216, and 441, the word ‘offence’ has the same meaning when the thing punishable under the special or local law is punishable under such law with imprisonment for a term of six months or upwards, whether with or without fine. Section 43. Section 17 does not refer to clause (1) of Section 120B of the Indian Penal Code.

AIR 1968 Cal. 407. Since Section 18 of the Trade Unions Act, 1926 is based upon English law, it is useful to note the developments in the United Kingdom. Until 1906, wilful interference with the business of employer, e. g., strikes causing financial loss to management was actionable in England and until 1926 in India. In Quinn v. Leathern [1901]. A.C. 495 unions were held liable for illegal conspiracies. Dissatisfaction in England with Taff Value Co. v. Amalgamated Society of Railway Servants [1901]. A.C. 406, decision led to the enactment of the Trade Disputes Act, 1906, which gave legislative disapproval to judicial decision, [see Bertram F Willcox and Others (Ed.). Labour Law and Labour Relation, Indian Law Institute, 43. (1967)] Section 3 of the English Trade Disputes Act, 1906 exempted trade unions from the liability in tort for an act done by a person in contemplation or furtherance of a trade dispute if: (i) it induces a breach of contract of employment; or (ii) it interferes with the trade, business or employment or right to dispose of his capital or his labour as he wills. The scope of immunity afforded in Section 3 was delineated by the House of Lords in Rookes v. Barnard, All E.R. 1964 367. In this case a worker (who resigned from membership of the union) was dismissed by the corporation in consequence of a threat by fellow workers (union members) to strike in breach of a no-strike clause in their service agreement. He brought an action for damages against union officials for tort of intimation. The Court awarded him damages of £7,500. Justice Sach, held that the threat to strike in breach of the agreement was an unlawful act constituting intimidation, and actionable as tort as it had harmed the plaintiff. The Court accordingly held that the defendants were not protected under Section 3. The Court of Appeal revised the findings and held that although the tort of intimidation existed, it did not cover the case of threat to breach of contract. The House of Lords reversed the findings of the Court of Appeal and held that a threat by persons that contracts of employment would he be broken unless the employer conceded their demands was a threat to do something unlawful and constituted the tort of intimidation. Consequently, the person concerned when sued for damages for civil conspiracy could not rely on the protection afforded by the 1906 Act. This decision was nullified by the Trade Disputes Act, 1965. ‘Then followed the decisions in J T Stratford & Sons Ltd, v. Lindley [1965] A.C. 269; Emerald Construction Co. Ltd v. Lowthian & Others [1966] IWLR. 691. Torquay Hotel Co. Ltd v. Cousins & Others [1969] 2 Ch. 106 and Ford Motor Co. Ltd v. Amalgamated Union of Engineering and Foundary Workers [1969] 2 All. ER 481 which did not totally free the industrial relations from the operation of law efforts and the Trade Disputes Act of 1906 was found to be inadequate. Parliament passed the Industrial Relations Act, 1971 to alleviate the position of labour to some extent. This Act was repealed by the Trade Unions and Labour Relations Act, 1974 which was amended in 1976.’ [See E S Vankataramiah. ‘A Brief History of the Liability of a Participant in a Strike in England,’ 23 JILI (1981), 331. 8 Dalmia Cement Ltd v. Naraindas Anandjee Bechar, AIR 1939 Sind 256. 9 Shri Ram Vilas Service Ltd v. Simpson and Group Companies Workers Union, (1979) 2 LLJ 284 (Madras). 10 See Chemosyn Pvt. Ltd v. Kerala Medical and Representatives Association, (1988) Lab. IC 115. 7

11 12 13 14 15 16 17

18 19 20 21 22 23 24 25 26

27 28 29

Anandjee, ‘Impact of Labour Laws on Trade Union Movement,’ a paper read at the All India Labour Economic Conference. Rohtas Industries Staff Union v. State of Bihar, AIR 1963 Patna 170; On appeal AIR 1979 SC 425. Joy Engineering Works v. Staff, AIR 1968 Cal. 407. Reserve Bank of India v. Ashis, 73 CWN 388, (1969). Sri Ram Vilas Service Ltd v. Simpson & Group Company Union, (1979) 2 LLJ 284 (Madras). (1981) 1 LLJ 123. See Jay Engineering Works v. Stage of West Bengal, AIR 1963 Cal. 407; Railway Board, New Delhi v. Niranjan Singh, (1969) 2 LLJ 743; M P Collieries Workers Federation v. United Colliers, (1972) Madh. Pr LJ 79; Sri Rama Vilas Service Ltd v. Simpson & Group Companies Workers Union, (1979) 2 LLJ 284. 2008 LLR 619. (1982) 1 LLJ 123. (1993) Guj. LH 783. 2008 LLR 519. K C P Ltd v. Inspector of Police, Tiruvottiyur, 1993 ILLJ 365. (1987) 2. LLN 294. (1999) 1. LLJ 385. 2009 LLR 62. Section 27 of Indian Contract Act dealing with agreement in restrain of trade reads: Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void. Exception 1: One who sells the goodwill of a business may agree with the buyer to refrain from carrying on a similar business, within specified local limits, so long as the buyer, or any person deriving title to the goodwill from him, carries on a like business therein; provided that such limits appear to the Court reasonable, regard being had to the nature of the business. Tulsidas Paul v. Second Labour Court, AIR 1963 Calcutta 624. (1992) 1 LLJ 423. For details see chapter 4 Section VI closed shop/union shop.

CHAPTER

10 Recognition of Trade Unions I. THE NEED FOR RECOGNITION OF TRADE UNIONS Recognition of trade unions is the backbone of collective bargaining. It has been debated time and again. But, in spite of the government’s stated policy to encourage trade unions, there is no enforced central legislation on the subject. There are, however, voluntary codes of discipline and legislation in some states. In the absence of any central legislation, management in several states (except where legislation on recognition is in force) have refused to recognize trade unions mainly on five grounds: (i) most of the office-bearers of the union were outsiders,1 (ii) the trade union keeps outsiders disapproved by management — particularly politicians and ex-employees,2 (iii) the union consists of only small number of employees, (iv) there were many rival unions in existence, (v) the trade union was not registered under the Trade Unions Act, 1926.3 However, none of these objections are maintainable because to accept the same would amount to interference in the functioning of the trade unions. Be that as it may, the refusal by employers to recognize or bargain with unions has been a major obstacle to the healthy growth of trade unions and collective bargaining.4

II. RECOGNITION OF TRADE UNIONS IN RETROSPECT

The recognition of trade unions is said to have originated in relation to the government with its servants. Prior to 1933, government servants were prohibited from submitting collective memorials and petitions. When conceded, this right was granted only to combinations which conformed to certain rules. Unions which conformed to these rules were ordinarily granted ‘formal recognition’ and were allowed to conduct negotiation with government on behalf of their members.

A. Appointment of the Royal Commission Problems relating to recognition of trade unions attracted the attention of the Royal Commission on Labour 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.’

B. 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. Subsequently in 1950, Trade Unions Bill also incorporated provisions for recognition of trade unions. The bill was moved in the legislature but it could not be made into an Act.

C. 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 Convention No. 98 concerning

the right to organize and bargain collectively in 1949. The former states: Workers and employers, without distinction whatsoever, shall have the right to establish and, subject only to the rules of the organization concerned, to join organization of their own choosing without previous authorization. The convention empowers the workers' organization to frame their constitution, to elect representatives and among others to organize their activities. To establish and join federations, Article 8 of the Convention requires that workers and employers and their respective organizations, like all other, shall respect the law of the land. The law of the land shall not be such as to impair nor shall it be so applied as to impair, the guarantees provided for in the constitution. The latter confers protection to workers against acts of anti-union discrimination in respect of their employment. The protection is, directed in respect to acts calculated to: (a) make the employment of a worker subject to the condition that he shall not join a union or shall relinquish trade union membership; and (b) cause the dismissal of, or otherwise prejudice a worker by reason of union membership or because of his participation in union activities outside working hours.

D. 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 In the evolution of labour policy during the plan, recognition of trade union has been accorded due importance by the planners. Thus, the Second Five-Year Plan (1956–61) paid considerable attention to the problems of recognition of trade unions. In view of the fact that ‘recognition has strengthened the trade union movement in some states‘ the plan recommended that ‘some statutory provisions for securing recognition should be made, where such recognition does not exist at present. In doing so, the importance of one union for one industry in a local area requires to be kept in view’. The Third Five Year Plan (1961–66) envisaged a marked shift in the policy of recognition of trade unions. It was stated in the plan that ‘the basis for recognition of unions, adopted as a part of the Code of Discipline will pave the way for the growth of strong and healthy trade unionism in the country. A union can claim recognition if it has a continuing membership of at least 15 per cent of the workers in the establishment over a period of 6 months and will

be entitled to be recognized as a representative union for an industry or a local area, if it has membership of at least 25 per cent of workers. Where there are several unions in an industry or establishment, the union with the largest membership will be recognized. Once a union has been recognized, there should be no change in its position for a period of 2 years, if it has been adhering to the Code of Discipline.’

E. First National Commission on Labour Another landmark in the recognition of trade unions was reached with the appointment of the National Commission on Labour in 1966. The Commission recommended, inter alia, for statutory recognition of trade unions but no concrete legislative action was taken till 1978.

F. 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 30 August 1978.

G. 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. To sum up, the existing arrangement for the recognition of trade unions reveals that no legislative step at central level has been effectively introduced and enforced for recognition of trade unions. The voluntary arrangement for recognition of trade unions as we shall presently see, has failed to deliver the goods for want of adequate implementation machinery.

III. LAW AND PRACTICE RELATING TO RECOGNITION OF TRADE UNIONS A. Constitution and Recognition of 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? This has been answered in negative6 because the right to form an association does not carry with it the concomitant right7 that the association should be recognized by the employers. Hence, neither withdrawal of recondition8 of the union nor the discontinuance of recognition9 infringes on the fundamental rights guaranteed under Article 19(1) (c) of the Constitution.

B. Legislative Measures In some industrially advanced countries such as the United States of America, Canada, Columbia and Bahrain, collective bargaining and voluntary arbitration have developed considerably and statutory provisions have been made for determining the representative character of trade unions.

1. Trade Unions Act, 1926 The Trade Unions Act does not make any provision for recognition of such a union. Any recognition of union, even if it is a union relating to the employees of the Central Government, is governed by some departmental circulars. Those circulars are administrative in nature and not statutory. Therefore, those circulars also cannot be enforced in a writ petition.10

2. 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 on satisfying the conditions laid down in relevant sections of the act. But the Act, as stated earlier, has not been enforced. a. Machinery for Determination of Representative Unions: Section 28E of the Trade Unions (Amendment) Act, 1947, empowers the labour court to grant recognition where a registered trade union having applied for recognition to an employer fails to obtain the same within a period of 3

months. Conditions for Recognition. Section 25D provides that a trade union shall not be entitled for recognition by order of a labour court under Section 25E unless it fulfils the following conditions, namely: (a) that all its ordinary members are workmen employed in the same industry or in industries closely allied to or connected with another; (b) that it is representative of all the workmen employed by the employer in that industry or those industries; (c) that its rules do not provide for the exclusion from membership of any class of workmen referred to in clause (b); (d) that its rules provide for the procedure for declaring a strike; (e) that its rules provide that a meeting of its executive shall be held at least once in every 6 months; (f) that it is a registered trade union and that it has complied with all provisions of this Act.

The aforesaid provisions of the Act raise various problems: (i) Can an employer voluntarily recognize a union which is not registered under the Act and which is in fact a majority union? (ii) Can an employer be compelled to recognize more than one union? Notwithstanding the relative importance of these questions and rather unsatisfactory answer that we get from the statute, the significance of Trade Unions (Amendment) Act, 1947, must not be overlooked. But, even this could not be put into force. c. Rights of Recognized Trade Unions: The recognized trade unions have been conferred the right to negotiate with employers in respect of matters connected with employment, non-employment, the terms of employment or the conditions of labour of all or any of its members, and the employer is under an obligation to receive and send replies to letters sent by the executive and grant interviews to them regarding such matters. d. Withdrawal of Recognition of Trade Unions: Under Section 28G of the Trade Unions (Amendment) Act, 1947, the Registrar or the employer is entitled to apply to the labour court in writing for the withdrawal of recognition on any one of the following grounds: (a) that the executive or the members of the trade union have committed any unfair practice set out in Section 28 J within 3 months prior to the date of the application;

(b) that the trade union has failed to submit any return referred to in Section 281; (c) that the trade union has ceased to be representative of the workmen referred to in Clause (b) of Section 28 D. On receipt of the application, the labour court is required to serve a show cause notice in the prescribed manner on the trade union as to why its recognition should not be withdrawn. If the court is satisfied that trade union did not satisfy conditions for the grant of recognition, it shall make an order declaring the withdrawal of recognition. The aforesaid provisions raise a question as to whether recognition of trade union can be withdrawn on the ground that recognized trade union has lost its status as a representative union. e. Re-recognition of Trade Unions: Section 28H of the Trade Unions (Amendment) Act, 1947, permits the registered trade union whose recognition is withdrawn under subsection (3) of Section 28G to make an application for re-recognition after 6 months from the date of withdrawal of recognition.

3. The Trade Unions Bill, 1950 In 1950, the Trade Unions Bill, 1950 was introduced in the Parliament. The bill was primarily a consolidating measure, but there were some new provisions which were added namely: (a) A trade union of civil servants shall not be entitled to recognition by the appropriate government if it does not consist wholly of civil servants or if such union is affiliated to a federation of trade unions to which a trade union consisting of members other than civil servants is affiliated. (b) A trade union shall not be entitled to recognition by an employer in relation to any hospital or educational institution by order of a labour court if it does not consist wholly of employees of any hospital or educational institutions, as the case may be. (c) A trade union consisting partly of supervisor and partly of other employees, or partly of watch and ward staff and partly of other employees shall not be entitled to recognition by an employer by order of a labour court. The bill also provided for recognition of trade unions 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 labour court is empowered under the bill to order for recognition of unions. The bill could not, however, be brought in the form of the Act because of opposition by several quarters. The bill lapsed on the dissolution of the legislature.

4. State Legislation In some states, there are legislations on the recognition of trade unions. These legislations may be briefly discussed: (a) Maharashtra: The Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practice Act, 1972, provides for the recognition of trade unions for facilitating collective bargaining for certain undertakings and confers certain rights and obligations upon recognized trade unions and also confers certain powers on unrecognized trade unions.11 The Act is applicable in every undertaking employing 50 or more employees on any day of the preceding 12 months.12 The application of the Act can be extended by the state government even in undertakings employing less than 50 employees.13 In order to be registered as recognized trade union (i) the trade union must have a total membership of 30 per cent in the said undertaking; (ii) it must be in existence for the last 6 months; and (iii) it must make an application in the prescribed form to the industrial court.14 When such an application is made and is found to be in order, a notice shall be issued and after considering the objections and holding enquiries, if any, the union would be recognized and a certificate would be issued. On the contrary, if a counter claim is put forward by any other union and it is found that union has the largest number of employees employed in the undertaking, and if that other union also fulfils the requirements which the applicant-union also fulfils for being recognized, then the industrial court is empowered to grant recognition and issue a certificate not to the applicant union but to the other union which has the largest number of employees employed in the undertaking.15 (b) 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 colour;

(ii) The union has for the whole of the period of 6 months next 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 employed in the industry in that area; (iii) The constitution of the union shall be such as may be provided under this Act. (c) 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. Tribunal’s Response The attempt of the union to bring the question of its recognition by management within the purview of ‘industrial dispute’ proved futile. The industrial tribunal has consistently rejected the union’s claim for its recognition by the management on the grounds that: (i) the refusal to recognize the union was not an ‘industrial dispute’ within the meaning of the Industrial Disputes Act, 1947,16 (ii) the specific remedy was provided in the Trade Unions (Amendment) Act, 1947, (unenforced); and (iii) the tribunal cannot take the task which the labour courts are required to perform.17

D. Non-statutory Code of Discipline in Industry To fill the lacuna in the Central Law, the 16th Session of the Indian Labour Conference provides for the recognition of trade unions. It lays down the following criteria for their recognition: 1. Where there is more than one union, a union claiming recognition should have been functioning for at least one year after registration. Where there is only one union, this condition would not apply; 2. The membership of the union should cover at least 15 per cent of the workers in the establishment concerned. Membership would be counted only of those who had paid their subscription for at least 3 months during the period of 6 months immediately preceding the reckoning; 3. A union may claim to be recognized as a representative union for an industry in a local area if it has a membership of at least 25 per cent of the workers of that industry in that area;

4. 5.

When a union has been recognized, there should be no change in its position for a period of 2 years;

Where there are several unions in an industry or establishment, the one with the largest membership should be recognized. 6. A representative union for an industry in an area should have the right to represent the workers in all the establishments in the industry, but if a union of workers in a particular establishment has membership of 50 per cent or more of the workers of that establishment, it should have the right to deal with matters of purely local interest such as, for instance, the handling of grievances pertaining to its own members. All other workers who are not members of that union might either operate through the representative union for industry or seek redress directly. 7. In the case of trade union federations which are not affiliated to any of the four central organizations of labour, the question of recognition would have to be dealt with separately. 8. Only unions which observed the Code of Discipline would be entitled to recognition. The code, however, has not been effectively implemented and it is respected more in its breach than in its observance. The failure of enforcement machinery of the code is revealed by the fact that during 1960–70,10,402 cases of breach of Code of Discipline were reported. In addition to this, there are numerous unreported cases as well. The Central Implementation and Evaluation Division has done much work in this regard. The division secured recognition to 24 unions during 1968–70.18 Faced with the problem of infringement of the Code of Discipline, the committee took certain decisions: (1) When a union is recommended for recognition by the implementation machinery after proper verification of its membership, the employer should recognize it within a month. If he fails to do so, he should be considered responsible for infringement of the Code of Discipline and action should be taken against him by the central organization concerned; (2) A union which is not affiliated to any of the four central organizations of workers should wait for a period of one year after it has accepted the Code of Discipline before its claim for recognition can be considered; (3) When the breach of the code by a union has been established by the appropriate implementation machinery, it would be open to the employer concerned to derecognize the union.

However, the question of recognition of the union by the employer raises various doubts: (i) whether the gap in law will be filled by the provisions of the code? (ii) whether the provisions of the code particularly regarding the recognitions of the union can effectively be implemented? (iii) whether the provisions of code have also been adopted by such organizations and unions which are not affiliated to central federation? The division bench of the Madras High Court in Tamil Nadu Electricity Board v. Tamil Nadu Electricity Board Accounts and Executive Staff Union19 gave a helping hand in strengthening provisions for recognition of trade union under the voluntary Code of Discipline. In this case, the name of the petitioner was changed from Tamil Nadu Electricity Subordinates Union to Tamil Nadu Electricity Board Accounts and Executive Staff Union. Originally, the membership was open to all workmen who were engaged in clerical, accounting and other work. The coverage was extended to employees covered under Section 2 (i) of the Industrial Employment (Standing Orders) Act, 1946. This change was communicated to the management with a request to accord recognition to the changed name of the trade union but the management withdrew recognition without giving a notice on the ground that the recognition granted to it was for clerical workmen and not to workmen covered by Section 2 (i). Aggrieved by this order, the union preferred a writ petition in the Madras High Court; single judge of the High Court allowed the petition. It was submitted by the management that the writ petition was not maintainable because recognition was not granted under any statute. Rejecting the contention, Chief Justice Ismail, observed: [T]he Code of Discipline in industry does contemplate recognition and that it was only under that Code that recognition was applied for and granted. It is not disputed that the grant of recognition confers a status on a body like the respondent union to represent the workers in a particular category with reference to their service conditions, with the management; in other words, it becomes a bargaining agent on behalf of the group of workers with reference to which it was recognized. Withdrawal of that status or recognition will certainly bring about adverse consequences on a body like the respondent union, and with reference to such adverse consequences, even an order of withdrawal like the one made by the appellant if it is illegal or is in violation of principles of natural justice, certainly a body like the respondent union can approach this court under Art. 226 of

the Constitution. Therefore we reject the contention of the learned counsel for the appellant that the writ petition was not maintainable. It is thus evident that courts may interfere under Article 226 of the Constitution even where the recognition granted by the employer under the nonstatutory Code of Discipline is withdrawn on flimsy grounds or erroneous basis or in violation of the principles of natural justice. Do principles of natural justice apply in the de-recognition of a trade union recognized under the Code of Discipline by the management? This issue was raised in Secretary, Meters Staff Association v. Union Electrical Industries Ltd.20 Here, the staff association was recognized by a government company wholly owned and controlled by the government under the Code of Discipline. After some time, the recognition enjoyed by the association was withdrawn. Thereupon, the association filed a writ petition before the Kerala High Court. The questions arose: (i) whether the discretion exercised by the management to derecognize the association could be interfered with under Article 226? and (ii) whether the management is bound to apply the principles of natural justice in derecognizing a union? While dealing with these questions, the court observed: Recognition certainly confers a status on the union to represent the workers and as a bargaining agent, unions have come to enjoy various facilities by virtue of such status. De-recognition involves deprivation of such status, right and facilities. It certainly involves serious adverse consequences. No doubt the decision to derecognize a particular union can be regarded as an administrative decision or order. Nevertheless, since it involves serious adverse consequences to the union and the employees organized under the union, their right to hearing before the decision is taken has certainly to be recognized, as part of the principle of fair play in action. If the decision is taken without giving a hearing to the union, it has to be regarded as violative of principles of natural justice and must be treated as void.21 In the absence of any statutory recognition of trade unions, the question has arisen whether a civil suit is maintainable on an action by a trade union under the voluntary Code of Discipline? This issue was answered in the negative in T C C Thozhilali Union v. TCC Ltd.22 In this case, the management and workers represented by six unions arrived at a settlement over the then existing differences and drew up a memorandum of settlement. The settlement inter alia,

provided that the management recognized all the six unions as the collective bargaining agents of the workmen. The settlement was operative for 4 years and was to be governed by the Code of Discipline. When the period of 4 years was about to expire, the company refused to allow the plaintiffs union to enter into a ‘Long Term Settlement’. The union then filed a civil suit praying that the management be restrained from entering into any settlement or agreement with other unions. The trial court dismissed the suit. The lower appellate court, on appeal by the union upheld the findings of the court below. The union thereupon filed a second appeal before the Kerala High Court which observed: The position, therefore, is—(i) ‘recognition dispute’ is an industrial dispute; (ii) recognition is a matter of volition on the part of the employer; (iii) a trade union has neither common law right nor statutory right which enables and entitles it to compel an employer to give recognition to it as the bargaining agent of its members; and (iv) since it has no such common law right, a ‘recognition disputed’, cannot be said to be one emanating from, and emerging out of, any right under the general common law; and, therefore (v) principle No. 2, stated by the Supreme Court in the Premier Automobiles case is not attracted to a ‘recognition dispute’, no matter that a trade union has no such right under any statute either. The court held that the lower courts rightly held that the suit brought by the union in respect of the ‘recognition dispute’ could not be entertained by a civil court.

E. Claim of Trade Union for Recognition Based on Circulars —Not Maintainable In K V Sridharan v. S Sundaramoorthy23, the division bench of the Madras High Court held that the Trade Unions Act, 1926 does not make any provision for recognition of a union based on circular. Any recognition of union, if it is a union relating to the employees of the Central Government, is governed by some departmental circulars. These circulars are administrative in nature and not statutory. Therefore, these circulars cannot be enforced in a writ petition. The aforesaid view was reiterated in Port and Dock Labour Union affiliated to Bharatiya Mazdoor Sangh v. Union of India24. In this case, the petitioner-trade union sought a declaration by Chennai Port Trust that it was a

recognized trade union entitled to statutory benefits under a circular issued by the government. The Madras High Court rejected the claim and held that in the absence of any law relating to trade union recognition in the state of Tamil Nadu, the claims of the union can be based only upon the circulars and various communications issued by the ministry. In fact, as per the communication issued by the registry, pending finalization of policy by the ministry, the first seven unions alone have to be recognized and as rightly held by the Port Trust, those seven unions even as per the check-off verification conducted during 2010, are having more membership than the petitioner union.

F. Secret Ballot Method for Determining the Representation Character of Trade Union In Food Corporation of India Staff Union v. Foods Corporation of India25, the Food Corporation of India (FCI) and the union representing the workmen agreed to follow the secret ballot method for determining the representative character of the trade union. They approached the Supreme Court to lay down as to how the method of secret ballot should be tailored to yield the correct result. Keeping in view the importance of the matter, the Court issued notice to all the major all India trade union organizations on this aspect. Pursuant to this notice, some trade union organizations appeared and were heard by the Court. The Supreme Court, after perusing various documents and records, directed that the following norms and procedure shall be followed for assessing the representative character of the trade unions by the secret ballot system: (i)

(ii)

(iii) (iv)

As agreed to by the parties, the relative strength of all the eligible unions by way of secret ballot be determined under the overall supervision of the Chief Labour Commissioner (Central) (CLC). The CLC will notify the returning officer who shall conduct the election with the assistance of the FCI. The returning officer shall be an officer of the Ministry of Labour, Government of India. The CLC shall fix the month of election while the actual date/dates of election shall be fixed by the returning officer. The returning officer shall require the FCI to furnish sufficient number of copies of the lists of all the employees/workers (Categories III and IV) governed by the FCI (Staff) Regulations, 1971 borne on the rolls of the FCI as on the date indicated by the CLC. The list shall be prepared in the proforma prescribed by the CLC. The said list shall constitute the voters list.

(v)

(vi)

(vii)

(viii)

(ix)

(x)

The FCI shall display the voters list on the notice board and other conspicuous places and shall also supply copies thereof to each of the unions for raising objections, if any. The unions will file the objection to the returning officer within the stipulated period and the decision of the returning officer shall be final. The FCI shall make necessary arrangement to: (a) give wide publicity to the date/dates of election by informing the unions and by affixing notices on the notice boards and also at other conspicuous places for the information of all the workers; (b) print requisite number of ballot papers in the proforma prescribed by the CLC incorporating therein the names of all the participating unions in an alphabetical order after different symbols of respective unions; (c) the ballot papers would be prepared in the proforma prescribed by the CLC in Hindi/English and the regional language concerned; (d) set up requisite number of polling stations and booths near the premises where the workers normally work; and (e) provide ballot boxes with requisite stationary, boards, sealing wax, etc. The returning officer shall nominate a presiding officer for each of the polling stations/booths with requisite number of polling assistants to conduct the election in an impartial manner. The presiding officers and the polling assistants may be selected by the returning officer from amongst the officers of the FCI. The election schedule indicating the nominators, scrutiny of nomination papers, withdrawal of nomination, polling, counting of votes and the declaration of results shall be prepared and notified by the returning officer in consultation with the FCI. The election schedule shall be notified by the returning officer well in advance and at least one month's time shall be allowed to the contesting unions for canvassing before the date of filing the nominations. To be eligible for participating in the election, the unions must have valid registration under the Trade Unions Act, 1926 for one year with an existing valid registration on the first day of filing of nomination. The presiding officer shall allow only one representative to be present

(xi)

(xii)

(xiii)

(xiv)

(xv)

(xvi)

at each polling station/booth as observer. At the time of polling, the polling assistant will first score out the name of the employee/workman who comes for voting, from the master copy of the voters list and advice him thereafter to procure the secret ballot paper from the presiding officer. The presiding officer will hand over the ballot paper to the workman/employee concerned after affixing his signatures thereon. The signatures of the workman/employee casting the vote shall also be obtained on the counterfoil of the ballot paper. He will ensure that the ballot paper is put inside the box in his presence after the voter is allowed to mark on the symbol of the candidate with the inked rubber stamp in camera. No employee/workman shall be allowed to cast his vote unless he produces his valid identity card before the presiding officer concerned. In the event of non-production of identity card due to any reason, the voter may bring in an authorization letter from his controlling officer certifying that the voter is the bona fide employee of the FCI. After the close of the polling, the presiding officer shall furnish detailed ballot paper account in the proform prescribed by the CLC indicating total ballot papers received, ballot papers used, unused ballot papers available, etc., to the returning officer. After the close of the polling, the ballot boxes will be opened and counted by the returning officer or his representative in the presence of the representatives of each of the unions. All votes which are marked more than once, spoiled, cancelled or damaged, etc., will not be taken into account. The contesting unions through their representatives present at the counting place may be allowed to file applications for re-counting of votes to the returning officer. The request would be considered by the returning officer and in a given case, if he is satisfied that there is reason to do so, he may permit re-counting. However, no application for re-counting shall be entertained after the results of the poll are declared. The result of voting shall be compiled on the basis of valid votes polled in favour of each union in the proforma prescribed by the CLC and signatures obtained thereon from the representatives of all the unions concerned as a proof of counting having been done in their presence.

(xvii)

(xviii)

(xix)

After declaring the result on the basis of the votes polled in favour of each union by the returning officer, he will send a report of his findings to the CLC. The union/unions obtaining the highest number of votes in the process of election shall be given recognition by the FCI for a period of 5 years from the date of the conferment of the recognition. It would be open to the contesting unions to object to the result of the election or any illegality or material irregularity which might have been committed during the election. Before the returning officer such objection can only be raised after the election is over. The objection shall be heard by the CLC and disposed of within 30 days of the filing of the same. The decision of the CLC shall be final, subject to challenge before a competent court, if permitted under law.

The Court also held that it would be open to the CLC to deal with any situation not covered by the procedure detailed above. He may do so in consultation with the returning officer and the FCI. The Court accordingly directed the CLC and the FCI to hold election in accordance with the procedure prescribed by this order on the date specified therein.

G. Method of Recognizing a Trade Union In M R P Workers Union v. Govt of Tamil Nadu26, it was held in the absence of specific statutory provisions in the Trade Unions Act, 1926 for recognition of trade union as representative body of workmen in the industry, the same would be determined by state government and labour commissioner. On receipt of such an application, the concerned labour commissioner will issue notice to the two unions, within 2 weeks from the date of receipt of the application, calling upon them to submit their membership registers and the necessary supportive documents under the Code of Discipline within 2 weeks from the date of receipt of the notice by them. The notice will call upon them to produce their records as per the Code of Discipline during the period of 6 months prior to the date of notice. The labour commissioner shall thereafter proceed to decide as to which union is the representative union of the workmen: The Court observed that we cannot permit the management to say that: The union which shows larger membership at the end of the exercise will not be recognized by the management. Recognition is for the purpose of representing the causes of the workmen in

various forum before the management and various authorities under the labour law. It is not a determination available for the sole satisfaction of the management. It is a factual determination and the determination leads to a status. The union which establishes larger membership at the end of the aforesaid exercise, shall be recognized as the representative union. In Petrolium Employee's Union v. Chief Labour Commissioner27, the Court ruled that once a trade union has given its consent for verification of membership by secret ballot, it is estopped from challenging the same in a writ petition.

H. Rights of Unrecognized Unions The management is obliged to hear a trade union registered though not recognized and resolve its dispute as far as possible without resorting to conciliation or adjudication processes. Though the management is not obliged to recognize a trade union but at the same time, it cannot refuse to hear grievances voiced by it in respect of service conditions or its members. There is no provision in the Industrial Disputes Act or Trade Unions Act prohibiting the management from negotiating, discussing or entering into settlement with an unrecognized union. It is only in case where the demands of unrecognized union are already seized of by the recognized union, such demand would not be maintainable. Direction can be given to management falling under Article 12 of the Constitution.28 The Supreme Court, in Chairman, State Bank of India v. All Orissa State Bank Officers Association29 delineated the rights of recognized and unrecognized trade unions, while interpreting the provision of Rule 24 of the verification of membership and recognition of Trade Union Rules, 1974 framed by the state of Orissa which is as follows: 22(a) Rights of Unrecognized Union—to meet and discuss with the employer or any person appointed by him in that behalf the grievances of any individual member relating to his service conditions. 22(b) To appear on behalf of its members employed in the establishment in any domestic or departmental enquiry held by the employer and before the conciliation officer/labour court/industrial tribunal or arbitrator.

While interpreting the aforesaid clause, the Court held that an unrecognized trade union unlike ‘recognized trade union’ has (i) no right to participate in the discussions/negotiations regarding general issues affecting all workmen/employees; and (ii) settlement, if any, arrived at as a result of such discussion/negotiations is not binding on all workmen/employees. But it has (i) the right to meet and discuss with the management/employer about the grievances of any individual member relating to his service conditions; and (ii) to represent an individual member in domestic inquiry or departmental inquiry and proceedings before the conciliation officer and adjudicator. The Court gave two reasons in support of its conclusion: (i) the right of the citizens of this country to form an association or union is recognized under Article 19(1) (c) of the Constitution; (ii) for the sake of industrial peace and proper administration of the industry, it is necessary for the management to seek cooperation of the entire work force. The Court added that the very fact that certain rights are vested in a nonrecognized union shows that the Trade Unions Act, 1926 and the rules framed thereunder acknowledge the existence of a non-recognized union. Such a union is not a superfluous entity and it has relevance in specific matters relating to administration of the establishment. Thus, the management/employer cannot outrightly refuse to have any discussion with a non-recognized union in matters relating to service conditions of individual members and other matters incidental thereto.

I. Response of the First National Commission on Labour (a) Scheme for recognition: The First National Commission on Labour has recommended compulsory recognition of trade unions by the employers under the central legislation in industrial undertakings employing 100 or more workers or where the capital invested is above the stipulated size. In order to claim recognition by the individual employer, the union must have the total membership of 30 per cent of the plant or establishment. The industry-wise union in local area may, however, be recognized if the minimum membership is 25 per cent. The commission has recommended that where recognition is sought by more than one union, the larger union should be recognized. But the commission was in favour of recognition of industry-wise union over plant or unit union. The commission’s recommendations are open to several objections: First, recognition of either industry-wise union or unit-wise union may lead to industrial unrest and rivalry. Second, the two alternative choices given to Industrial

Relations Commission may also lead to confusion and thus, no uniform method may be followed. It may, in effect, affect industrial peace and harmony. (b) Mode of determination of representative character. The National Commission on Labour has suggested alternative methods, namely, ‘verification’ and ‘ballot’. It suggested that the proposed Industrial Relations Commission should be empowered to decide the representative character of union either by examination of membership or holding an election through secret ballot of all employees. The alternative choice given by the National Commission may also lead to confusion and thus no uniform method may be followed. It may, in effect, also affect industrial peace and harmony. Out of the two methods, the secret ballot method is a democratic method and is more acceptable for a welfare society like ours. (c) Machinery for determination of representative character: The National Commission recommended that the Industrial Relations Commission at centre and states (as proposed by the commission) should be empowered to issue certificates to unions as representatives for collective bargaining. (d) Right of recognized trade unions: The National Commission on Labour recommended that the recognized trade unions should be given certain rights and privileges such as: (i) right of sole representation; (ii) entering into collective agreement on terms of employment and conditions of service; (iii) collection of membership subscription within the premises of the undertaking, the right to check-off; (iv) holding discussion with departmental representatives of its workers–members within factory premises; (v) inspecting by prior agreement the place of work of any of its members; and (vi) nominating its representatives on works/grievance committees and other bipartite committees. As regards the rights of unrecognized trade unions, the commission suggested that they should enjoy the right to represent individual grievances relating to termination of service and other conditions of service. The proposed rights of recognized trade unions suggested by the National Commission on Labour has been subject of criticism by AITUC and other organizations. According to them, the proposed rights are inadequate. They suggested that more rights should be conferred upon the recognized trade unions.

J. Trade Unions and Industrial Disputes (Amendment) Bill, 1988.

The bill seeks to provide for the constitution of a bargaining council to negotiate and settle industrial disputes with the employer. Thus, under Chapter II-D, every employer is required to establish a bargaining council for the industrial establishment for which he is the employer consisting of representatives of all the trade unions having membership among the workmen employed in the establishment, not being trade unions fenced on the basis of craft or occupation; each trade union being called a bargaining agent. Where there are more than one trade unions having members among the workmen employed in an industrial establishment, the representation of all such trade unions on the bargaining council shall be in proportion to the number of the members in that establishment as determined under the Trade Unions Act, 1926. The trade union with the highest membership of workmen employed in that establishment and having in no case, less than 40 per cent of the total membership among the workmen shall be known as the principal bargaining agent. Where there is only one trade union having members among the workmen employed in an industrial establishment, that trade union shall be the bargaining council for that establishment and such bargaining council shall also act as the sole bargaining agent. The chairman of the bargaining council shall be a person chosen by the principal or sole bargaining agent from amongst its representatives. However, if there is no trade union having membership of at least 40 per cent of the total membership of the trade unions of workmen in an industrial establishment, the one with the highest membership among the workmen employed in the establishment shall have the right to nominate one of its representatives as the chairman of the bargaining council. If there is no trade union having members among the workmen employed in an industrial establishment, a workmen’s council shall be established by the employer in the prescribed manner and such workmen’s council shall be the bargaining council for that establishment. The state government is empowered to establish a bargaining council in a class of industry in a local area in respect of which it is the appropriate government on the basis of the relative strength of the trade unions of workmen concerned as determined under the provisions of the Trade Unions Act, 1926, in such manner as may be prescribed. Similarly the Central Government may establish a bargaining council in respect of an industrial undertaking or a class of industry in respect of which it is

the appropriate government on the basis of the relative strength of the trade unions of workmen concerned as determined under the provisions of the State Trade Unions Act in the prescribed manner. The Central Government is also empowered to set up, in consultation with the state government concerned, a council at the national level to be called the National Bargaining Council in respect of a class of industry or a group of central public sector undertakings in relations to which the appropriate government is the state government. The National Bargaining Council shall comprise representatives of the Central Government, the state government concerned, employers or trade unions of employers and trade unions of workmen, being represented in proportion to their relative strength of membership as determined under the provisions of the Trade Unions Act, 1926. Every bargaining council establishment under Section 9, other than a national bargaining council establishment shall be registered with the labour court in such manner as may be prescribed. The term of office of bargaining council registered under this chapter shall be 3 years. A registered bargaining council shall, subject to the provisions of this Act be entitled: (a) to raise industrial disputes with the employer or employers; (b) to settle industrial disputes with the employer or employers; (c) to sign on behalf of the workmen the documents settling industrial disputes; (d) to represent the workmen in any industrial dispute; and (e) to exercise such other powers as may be prescribed. Where a labour court finds a bargaining agent guilty of indulging in all or any of the unfair labour practices listed at item No. 1 (illegal strike), item No. 5 (in so far as it relates to go slow) and item No. 8 (violence) of Part II of the Fifth Schedule, it may disqualify such bargaining agent to function for such period as may be determined by it.

K. Response of the Second National Commission on Labour The (Second) National Commission on Labour which submitted its report to the Government of India on 29 June 2002 has recommend that the negotiating agent should be selected for recognition on the basis of the check off system. A union with 66 per cent membership be entitled to be accepted as the single negotiating agent, and if no union has 66 per cent support, then unions that have the support

of more than 25 per cent should be given proportionate representation on the negotiating college. The commission also suggested that recognition once granted, should be valid for a period of 4 years, to be coterminus with the period of settlement. The individual workers’ authorization for check off should also be coterminus with the tenure of recognition of the negotiating agent or college.

L. An Appraisal A central law on recognition of trade union is the need of the hour. It should provide for the compulsory recognition of trade unions. It is necessary in the interest of both trade unions and employers. It will also facilitate the settlement of disputes and will make such settlements more enduring. It will also, in effect, prevent the number of disputes which arise from inter-union rivalry. Indeed, it will impose a legal obligation upon the disinterested and adamant employers to recognize a representative trade union for the purposes of collective bargaining. This will also bring into application uniform standards for all trade unions seeking recognition.

1 2 3 4 5 6

8 9 10 11 12 13 14

Paramount Films India Ltd v. Their Workmen, (1950) LLJ 690. Report of the Royal Commission on Labour, (1931) 325. Id. at 326. Suresh C Srivastava, 'Trade Unionism in India", Review of Contemporary Law, Brussels and Paris, (1970), 83. Govt. of India, Report of the Committee on Labour Welfare (1969), 15. A C Mukerjee v. Union of India, (1972) 2 LLJ 1978 (Calcutta); M A David v. KSE Board, (1973) 2 LLJ 466, (Kerala) 1973; Tamil Nadu Electricity Board Accounts Executive Staff Union v. Tamil Nadu Electricity Board, Madras, (1980) 2 LLJ 246. All India Bank Employees Association v. National Industrial Tribunal, (1961) I LLJ 375; Raghubir Dayal Jai Prakash v. Union of India, AIR 1962 SC 363; DAV College Jullunder v. State of Punjab, AIR 1971 SC 1737. M A David v. KSE Board, op. cit., supra note 6. Tamil Nadu Electricity Board, op. cit., supra note 6. K V Sridharan v. S Sundamoorthy, 2009 LLR 414. See the Preamble of the Act. Section 10(1). Proviso to Section 10(1). Section 11.

15 Pfizer Employees' Union v. Mazdoor Congress, (1980) 1 LLJ 65 (Bombay). 16 Premier Automobiles Ltd. v. K S Wadke, (1975) 2 LLJ, 445; TCC Thozhilali Union v.

17 18 19 20 21 22 23 24 25 26 27 28 29

TCC Ltd, (1982) 1 LLJ 425; Premier Construction Co. Ltd v. Their Workmen, (1949) ICR 708, Beedi Factory v. Their Employees, (1950) LIJ 207; Nellimarla Jute Mills Co. Ltd v. Their Staff, (1950) LLJ 394. Ibid. Government of India, Annual Report of the Ministry of Labour and Employment of Relevant Years. 1981 Lab. IC 1138. (1984) 2 LLJ 446. Id. at 449. TCC Thozhilali Union v. TCC Ltd, (1982) 1LLJ 425 at 428–29. (2009) 3 MLJ 1320. (2012) 1 LLJ 650. 1995 Supp (1) SCC 678 (SC). (2009) 4 LLJ 685. 2010 LLR 214. See Indian Airlines Ltd case, 1997 FLR 489. 2000 Lab. I.C. 2153.

CHAPTER

11 Collective Bargaining I. THE PERSPECTIVE In the era of laissez faire, employers enjoyed unfettered right to hire and fire. They had vastly superior bargaining power and were in a position to dominate over workmen in every conceivable way. They naturally preferred to settle terms and conditions of employment of workmen and abhored statutory regulation thereof unless, of course, it was to their advantage. However, this tendency brought to the surface the potentialities of collective bargaining. The only way to improve the situation was to do away with the domination of any one class over another. The emergence of legal recognition of united power is based upon the strong bargaining power of management as against weak and unorganized workmen. Collective bargaining ‘is the foundation of this movement and it is in the interest of labour that statutory recognition has been accorded to trade unions, and their capacity to represent workmen, who are members of such bodies. But, of course, there are limits to this doctrine, for otherwise, it may become tyranny, stifling the freedom of an individual worker. It is not the law that every workmen must necessarily be a member of the trade union, and that outside its fold, he cannot exercise any volition or choice in matters affecting his welfare… The representative powers of organization of labour, with regard to enactments, such as the Industrial Disputes Act, will have to be interpreted in the light of the individual freedoms guaranteed in the Constitution and not as though such freedoms did not independently exist, as far as organized labour is concerned.’1

The system of collective bargaining as a method of settlement of industrial disputes has been adopted in industrially advanced countries like the United States of America and United Kingdom and has also recently been adopted in some Asian and African countries. India, which has adopted compulsory adjudication system, has also accepted in principle the system of collective bargaining but has hardly taken any steps, legislative or otherwise, to apply it in practice.

II. ILO PRINCIPLES ON THE RIGHT TO COLLECTIVE BARGAINING The standards and principles emerging from the ILOs conventions, recommendations and other instruments on the right to collective bargaining, and the principles set forth by the Committee and the Freedom of Association may be summarized as follows : a. The right to collective bargaining is a fundamental right endorsed by the members of the ILO in joining the organization, under which they have an obligation to respect, to promote and to realize, in good faith (ILO Declaration on Fundamental Principles and Rights at Work and its Follow-up) the right to collective bargaining. b. Collective bargaining is a right of employers and their organizations, on the one hand, and organizations of workers, on the other hand (first-level trade unions, federations and confederations); only in the absence of these latter organizations, may representatives of the workers concerned conclude collective agreements. c. The right to collective bargaining should be recognized throughout the private and public sectors and it is only the armed forces, the police and public servants engaged in the administration of the state who may be excluded from the exercise thereof (Convention No. 98).

III. CONCEPT AND MEANING OF COLLECTIVE BARGAINING The expression ‘collective bargaining’ was coined by Sydney and Beatrice.2 This was widely accepted in the United States of America.

The meaning of the expression ‘collective bargaining’ has been the subject matter of controversy and it is defined in a variety of ways. Harbison defines ‘collective bargaining’ as: a process of accommodation between two institutions which have both common and conflicting interests.3 In 1960, in the manual published by the International Labour Office, ‘collective bargaining’ has been defined as: negotiations about working conditions and terms of employment between an employer, a group of employers or one or more employers' organization on the one hand, and one or more representative workers organizations on the other, with a view to reaching agreement.4 Golden, however, treats collective bargaining: as a measure to distribute equitably the benefits derived from industry among all the participants including the employees, the unions, the management, the customers, the suppliers and the public.5 The aforesaid definitions of collective bargaining indicate that there is no unanimity among the authors regarding the meaning of collective bargaining. Be that as it may, collective bargaining is a process by which the terms of employment and conditions of service are determined by agreement between management and the union. In effect, ‘it is a business deal (which) determines the price of labour services and the terms and conditions of labour's employment.’6 The Supreme Court in Karnal Leather Karmachari Sangathan v. Liberty Footwear Co.7 defines collective bargaining as: A technique by which disputes as to conditions of employment are resolved amicably, by agreement, rather than by coercion. The dispute is settled peacefully and voluntarily, although reluctantly, between labour and management. An analysis of ‘collective bargaining’ requires the description of: (i) parties to collective bargaining; (ii) subject-matter of collective bargaining; and (iii) objects of collective bargaining. Let us discuss them.

A. Parties to Collective Bargaining Collective bargaining involves two parties, namely, management represented

either alone or through employers' association or federation of employers on the one hand and workers represented either through a union or workers' federation, on the other hand. The latter, where provisions exist under law are known as bargaining agents. These two parties are directly involved in the process of collective bargaining. It has, however been debated time and again that a representative of the public should also be included to represent the interests of public at the bargaining table, but has not yet been used much.8

B. Subject Matter of Collective Bargaining The International Labour Organization has divided the subject matter of collective bargaining into two categories: (i)

Those which set out standards of employment which are directly applicable to relations between an individual employer and worker; (ii) Those which regulate the relations between the parties to the agreement themselves and have no bearing on individual relations between employers and workers. The first category includes subjects like wages, working hours (including overtime), holidays with pay and period of notice for termination of contract. The second category, according to ILO, includes eight items viz., (i) provisions for enforcement of collective bargaining; (ii) methods of settling individual dispute; (iii) collective disputes including grievance procedure and reference to conciliation and arbitration; (iv) recognition of a union as bargaining agent for the workers; (v) giving of preference in recruitment to union members seeking employment; (vi) duration of the agreement; (vii) undertaking not to resort to strike or lockout during the period; and (viii) procedures for negotiation of new agreements.9

C. Objectives of Collective Bargaining The International Confederation of Free Trade Union called collective bargaining ‘A Workers’s Bill of Rights’. It enumerated the following objects of the union in collective bargaining: 1. to establish and build union recognition as an authority in the work place; 2. to raise workers' standard of living and win a better share in company's profits; 3. to express in practical terms the workers' desire to be treated with due respect and to achieve democratic participation in decisions affecting

their working conditions; 4.

to establish orderly practices for sharing in these decisions and to settle disputes which may arise in day-to-day life of the company; 5. to achieve broad general objectives such as defending and promoting the workers' interests throughout the country.10 The ILO also states that: In collective bargaining, the object is to reach agreement on wages and other conditions of employment about which the parties begin with divergent viewpoints but try to reach a compromise. When a bargain is reached, the terms of the agreement are put into effect.11 Thus, it is evident that the prime object of collective bargaining is to resolve the differences between the parties in respect of employment, nonemployment, terms of employment and conditions of service of the members of the union.

D. Duration of Collective Bargaining The duration of collective bargaining agreements vary from agreement to agreement. There is a general tendency on the part of the union to have the contract of short duration, but management on the other hand prefers agreements of long duration: In the United States, many of the contracts are for a period of one to three or more years, with options to renew. In the United Kingdom, ‘open end’ contracts which can be renegotiated on notice at any time, are the rule. In the Scandinavian countries, one-year contracts with renewal clauses are usual.12

IV. PREREQUISITES FOR COLLECTIVE BARGAINING A. Freedom of Association In order to achieve collective bargaining, it is essential to ensure that the denial of such freedom negates collective bargaining. In this respect, it is significant to note that the International Labour Organization adopted the ‘Convention No. 87 concerning freedom of association and protection of the right to organize’ which

seeks to provide for freedom of association. India has, however, not formally ratified this convention perhaps due to administrative and constitutional problems. However, Article 19(1) (c) of the Constitution of India guarantees ‘the right to form associations or unions’. Earlier the Trade Unions Act, 1926 impliedly concedes the freedom of association by conferring certain rights, duties and immunities upon members of registered trade unions. However, there is a need to ratify the ILO Convention.

B. Strong and Stable Trade Unions For the success of collective bargaining, it is also essential that there should be strong, independent, democratic and well organized trade unions. Unorganized labour is the hurdle in its success. In India, however, the unions are generally weak. Rivalry on the basis of caste, creed, religion is another characteristic of Indian trade unions which comes in the way of successful collective bargaining. Further, division on the basis of political ideologies further retards the growth of trade unions. Moreover, most of the workers are illiterate. Lastly, the financial position of trade unions is weak and some of them are even unable to maintain a proper office.

C. Recognition of Trade Unions Recognition of trade unions as bargaining agents is the backbone of collective bargaining. We have already discussed the problems relating to recognition of trade unions in the previous chapter.

D. Willingness to Give and Take The mutual trust and appreciation of the viewpoints of the management and union is also essential. Said the ILO: The fact of entering into negotiations implies that the differences between two parties can be adjusted by compromise and concession in the expectation that agreement can be reached. Obviously, if one or both sides merely make demands when they meet, there can be no negotiation or agreement.13

E. Absence of Unfair Labour Practices or Victimizations Statutory provisions for unfair labour practice or victimization are another prerequisite of collective bargaining. We will discuss in Chapter 12 unfair labour

practices and victimizations.

V. ADVANTAGES AND DISADVANTAGES OF COLLECTIVE BARGAINING A. Advantages of Collective Bargaining Collective bargaining has been preferred over compulsory adjudication system for several reasons; (i) it is a system based on bipartite agreements and as such is superior to any arrangement involving third party intervention in matters which essentially concern employers and workers;14 (ii) it is a quick and efficient method of settlement of industrial disputes and avoids delay and unnecessary litigation;15 (iii) it is a democratic method of settlement of industrial disputes.16

B. Disadvantages of Collective Bargaining According to Willcox, it has two vital defects: One of these defects is that there are situations in which a serious strike and a prolonged strike simply cannot be tolerated.17 The second great flaw in collective bargaining as a solver of labour disputes is the lack of representation of the public interest at the bargaining table. Whether prices can be raised without affecting the ability to sell goods or services, unions and companies are in a position to agree on wage increase that will cause higher prices; then the consumer must shoulder the full burden of their agreement.18

VI. COLLECTIVE BARGAINING IN INDIA Collective bargaining as a method of settlement of industrial disputes is comparatively a recent development. However, it has been debated ever since the days of the Royal Commission of Labour. The planners paid considerable attention to the adoption of the system of collective bargaining to solve labour disputes in India.

A. Plans and Collective Bargaining

The First Five-Year Plan recognized the workers' right of association, organization and collective bargaining as a fundamental basis of peaceful industrial relations. It added that, ‘collective bargaining can derive reality only from the organized strength of workers and a genuine desire on the part of the employer to cooperate with their representatives.’ It pointed out that the endeavour of the state had been to encourage collective bargaining and mutual settlement of industrial disputes in order to minimize governmental intervention in labour management relations. The Second Five-Year Plan, 1956 recognized the need for mutual settlement for resolution of industrial disputes: For the development of an undertaking or an industry, industrial peace is indispensable. Obviously, this can best be achieved by the parties themselves. Labour legislation… can only provide a suitable frame-work in which employers and workers can function. The best solution to the common problems, however, can be found by mutual agreement.19 Another step in building strong unions is to recognize them as representative unions under certain conditions. The Third Five-Year Plan encouraged voluntary arbitration and pleaded for its adoption in place of compulsory adjudication: Ways will be found for increasing the application of the principle of voluntary arbitration… The same protection should be extended to proceedings in this case as is now applicable to compulsory adjudication… Employers should show much greater readiness to submit disputes to arbitration than they have done hitherto. This has to be the normal practice in preference to a recourse to adjudication as an important obligation adopted by the parties under the Code. The Fourth Five-Year Plan stressed that ‘greater emphasis should be placed on collective bargaining and on strengthening the trade union movement for securing better labour-management relations, supported by recourse in large measures to voluntary arbitration.’20

B. Response of the [First] National Commission on Labour The National Commission on Labour which was appointed by the Government

of India in 1966 made comprehensive investigation of almost all the problems relating to labour. It also made a series of recommendations to promote collective bargaining. Important among them are: We have to evolve satisfactory arrangements for union recognition by statute as also to create conditions in which such arrangements have a chance to succeed. Apart from this, we have to indicate the place which strike/lockout will have in the scheme we propose. Collective bargaining cannot exist without the right to strike/lockout.21 Earlier it observed: Collective bargaining as it has developed in the West may not be quite suitable for India, it cannot appropriately co-exist with the concept of a planned economy where certain specified production targets have to be fulfilled. Though we are not convinced that collective bargaining is antithetical to consumer interests even in a sheltered market, we envisage that in a democratic system, pressure on government to intervene or not to intervene in a dispute may be powerful. It may hardly be able to resist such pressures and the best way to meet them will be to evolve a regulatory procedure in which the State can be seen in the public eye to absolve itself of possible charges of political intervention. The requirements of national policy make it imperative that state regulation will have to co-exist with collective bargaining. At the same time, there are dangers in maintaining status quo. There is a case for shift in emphasis and this shift will have to be in the direction of an increasing greater scope for, and reliance on, collective bargaining. But, any sudden change replacing adjudication by a system of collective bargaining would neither be called for nor practicable. The process has to be gradual. A beginning has to be made in the move towards collective bargaining by declaring that it will acquire primacy in the procedure for settling industrial disputes.

C. Factors Affecting Successful Collective Bargaining in India Labour laws have effected the formation of trade unions in two ways. First, it

has weakened the protest movement. Second, it has failed to give adequate protection to the members of a union for their trade union activities. History of trade union movement in different countries of the world shows that economic dependence on industrial employment, oppressive conditions of work in industrial undertakings, economic exploitation of workers and impersonal handling of their personal problems have generally built up the protest movement and the urge to form unions to combat the management's superior powers. However, in India, minimum standard statutes like Factories Act, 1948, Mines Act, 1952, Minimum Wages Act, 1948, Payment of Wages Act, 1936, Payment of Bonus Act, 1965 and Social Security Statutes like Employees' State Insurance Act, 1948, Workmen's Compensations Act, 1923, Employees' Provident Fund and Miscellaneous Provisions Act, 1952, and Payment of Gratuity Act, 1972, which are not only far in advance of the level dictated by the strength of workers but also of those dictated by the significant protest movement. Moreover, institutions such as a works committees and adjudication system, have in general, tended to minimize the value of trade unions. Further, the institution of standing orders, the procedure for their certification and the provisions regarding the adjudication, disputes relating to their interpretation and application mitigate against the necessity of forming trade unions. Members of trade unions need as much protection from the common law doctrines of criminal conspiracy and restraint of trade as from employers' wrath. However, it has to be noted that the Trade Unions (Amendment) Act, 1947, which prohibited certain forms of unfair practices on the part of management, have not yet been enforced. Even the protections granted against common law doctrine of criminal conspiracy, civil conspiracy and restraint of trade under Sections 17, 18 and 19 of the Trade Unions Act are hardly sufficient. If the expression ‘unless the agreement is an agreement to commit an offence’ renders Section 17 almost meaningless. The expression ‘on the ground only’ severely curtails the benevolent aspect of Section 18. Further, law relating to labour management relations and adjudication system prevalent in our country reveals that the labour law had not been to a great extent responsive to the bargaining power of Indian workers. Thus, the Industrial Disputes Act, 1947, restricts the striking power of Indian workers. It regulates the use of instruments of economic coercion. Of course, Article 19 (1) (c) of the Constitution guarantees ‘the right to form associations or unions’ but after the Supreme Court decision in All India Bank Employees case22 that the

Article merely guarantees the ‘right to form associations or unions’ and, in particular does not guarantee the right to strike, the usefulness of the Article is extremely limited. Moreover, Section 7 of the Criminal Law (Amendment) Act, 1932, renders it impossible for the workers to indulge in several kinds of labour activities. It, adversely affects the workmen's right to picket. It prohibits obstruction of access and intimidation of persons or employees or loitering at places of residence or business with the intent of deterring others from entering or approaching or dealing at such place. The Bombay High Court in Damodar Ganesh v. State23 has, however, held that Section 7 prohibits even peaceful picketing. It has, therefore, severely affected the bargaining power of trade unions. Moreover, the surplus labour market (which exists in India) affects the bargaining power of Indian labour. It will be observed that ‘the backlog of unemployed which stood at 3 million at the commencement of the First Five Year Plan, was estimated to be above 10 million in 1968. This is in spite of 31 million jobs created during the first three plans which is almost equivalent to the size of the entire economically active population of a number of countries like West Germany, United Kingdom, and Pakistan.’24 In addition, about 18 to 19 million job opportunities were created during the Fourth Five-Year Plan.25 They further estimated that even if the entire plan projects were successfully implemented, over 4 million would represent the backlog at the end of the Fourth Five-Year Plan.26 Further, the absence of any statutory provisions at central level for the recognition of a representative trade union by an employer also affects the bargaining power of trade unions. Again, the right of unions has jeopardized the striking power of unions. Moreover, the government's unfettered discretion in referring a dispute for adjudication and for issuing of prohibitory order under Section 10 of Industrial Disputes Act has adversely affected the labour's interests. Labour laws have also not given any special status to a trade union. Section 36 of the Industrial Disputes Act, 1947, enables a worker, if he so desires, to be represented by a union, but it does not enable a union to represent its members. Indeed, apart from the general law of agency, a union cannot bind by its decision, its own member, far less the non-union member in the establishment.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

25 26

Tamil Nadu Electricity Workers Federation v. Madras Electricity Board, AIR 1965 Mad. 111. Sydney and Beatrice, Industrial Democracy, (1897). F H Harbison, Goals and Strategy in Collective Bargaining, (Harper and Bros, 1951). International Labour Office, Collective Bargaining (A Worker’s Education Manual), Geneva (1960), 3. C S Golden, Causes of Industrial Peace under Collective Bargaining, USA, the National Planning Association, 1949. James J Healy (Ed.), Creative Collective Bargaining, Prentice Hall, 1965, 9. 1990 Lab IC 301 (SC). Bartram F Willlcox, ‘A Sketch of the Federal Law of Labour in the United States’ Aligarh Law Journal, (1965) 39. Id. at 46. Referred in Mary Sur, Collective Bargaining (1965), 4. International Labour Office, Collective Bargaining (A Workers' Education Manual), Geneva (1960), 5. Mary Sur, supra note 10, 34. ILO Collective Bargaining, A Worker's Education Manual, Geneva, (1960) 128. Government of India, Report of the National Commission on Labour (1969), 325. Bartram F Willcox and other (Ed.) Labour Law and Labour Relations: Cases and Materials (1967), 29. Ibid., Bartram F Willcox : op. cit. Ibid., Id at 37. Government of India, Second Five-Year Plan (1956), 574. Government of India, Fourth Five-Year Plan: A Draft Outline (1966), 387. Government of India, Report of the National Commission on Labour (1969), 327. (1962) SCR 17 1. Damodar Ganesh v. State, (1961) 2 LLJ 385. The statement was made by Shri Jaisukh Lal Hathi, Union Minister of Labour and Employment and Rehabilitation in a broadcast on ‘employment’ dated 17 January, 1968. See Northern India Patrikla, dated 19 January, 1968. Government of India, Fourth Five-Year Plan: A Draft Outline, 108. Ibid.

CHAPTER

12 Unfair Labour Practices and Victimizations I. UNFAIR LABOUR PRACTICES ON THE PART OF EMPLOYERS UNDER THE TRADE UNIONS (AMENDMENT) ACT, 1947 The expression ‘unfair labour practices’ has not been exhaustively defined in any of the enforced legislative enactments in India. However, Section 28 (k) of the Trade Unions (Amendment) Act, 1947 enumerated the following to be an unfair labour practice on the part of the employer: (a) to interfere with, restrain, or coerce his workmen in the exercise of their rights to organize, form, join or assist a trade union and to engage in concerted activities for the purpose of mutual aid or protection; (b) to interfere with the formation or administration of any trade union or to contribute financial or other support to it; (c) to discharge, or otherwise discriminate against any officer of a recognized trade union because of his being such officer; (d) to discharge, or otherwise discriminate against any workman because he has made allegations or given evidence in any inquiry or proceeding relating to any matter such as is referred to in sub-section (i) of Section 28 F;

(e) to fail to comply with the provisions of Section 28 F.

II. UNFAIR LABOUR PRACTICES ON THE PART OF TRADE UNIONS UNDER THE TRADE UNIONS (AMENDMENT) ACT, 1947 Section 28 J of the Trade Unions (Amendment) Act, 1947, (which is unenforced) dealt with unfair labour practices by trade unions: (a) for a majority of the members of the trade union to take part in an irregular strike; (b) for the executive of the trade union to advise or actively support or instigate an irregular strike; (c) for an officer of the trade union not to submit any return required by or under this Act containing false statements.

III. JUDICIAL DELINEATION OF ‘UNFAIR LABOUR PRACTICE’ In the absence of any enforced statutory definition, the courts have tried to fill this gap. The judicial interpretation of the expression ‘unfair labour practice’ has given rise to two main views, viz., the narrow and the extensive.

A. Narrow View Some of the early adjudicators confined the expression ‘unfair labour practice’ to trade union activity. In other words, ‘no trade union activity, no unfair labour practice.’ This view was evidently supported by the provisions of Section 28 K of the Trade Unions (Amendment) Act, 1947. However, later decision makers refused to accept the narrow interpretation on at least two grounds. First, if unfair labour practice is confined merely to trade union activities, then the worker who is not the member of any union and as such, having no trade union activities will not be entitled to any relief under the Industrial Disputes Act, 1947 when he is discharged. The result will be that either the employer would try to engage non-union men or that non-union men will be forced indirectly to join a union. This will be in the words of the tribunal, an interference with the natural

rights of workmen. Second, the narrow interpretation limits the scope of tribunal's jurisdiction to intervene only in cases where the management has dismissed or discharged workmen for trade union activities.

B. Extensive View A few of the earlier decisions and later decisions generally emphasize extensive view. For instance, Shri A G Gupta in Alexandra Jute Mills Ltd v. Their Workmen1 illustrated unfair labour practice: any order made in bad faith with an ulterior motive arbitrarily or with harshness is an instance of unfair labour practice. There are other illustrations, e.g., hasty action of company without giving the employee any notice or holding an inquiry provided that the refusal by an employer to permit his workmen to engage in trade union activities during their hours of work shall not be deemed to be unfair practice on his part. And Section 32A of the Trade Unions (Amendment) Act, 1947 prescribed the penalty for committing unfair labour practices. Thus it provides that ‘(1) any employer who commits any unfair practice set out in Section 28 K shall be punishable with fine which may extend to ₹1,000. (2) Where a criminal court imposes a fine, or confirms in appeal, revision or otherwise a sentence of fine imposed on an employer for committing an unfair labour practice set out in clause (c) or clause (d) of Section 28 K, it may when passing judgement, order the whole or any part of the fine to be applied in the payment to any person as compensation for lessor injury caused by the unfair practice.’

IV. CODE OF DISCIPLINE IN INDUSTRY The Code of Discipline, 1958 contains a list of unfair labour practices to be avoided by unions and management: (1) Management agrees… not to support or encourage any unfair labour practice such as: (a) interference with the rights of employees to enrol or continue as union members; (b) discrimination, restraint or coercion against any employee because of recognized activity of trade unions; and (c) victimization of any employee and abuse of authority in any form.

(2) Unions agree to discourage unfair labour practices such as: (a) (b) (c) (d) (e)

negligence of duty; careless operation; damages to property; interference with or disturbance to normal work; and insubordination.

V. RESPONSE OF THE [FIRST] NATIONAL COMMISSION ON LABOUR The [First] National Commission on Labour has also recommended that the law should enumerate various unfair labour practices on the part of employers and on the part of workers‘ unions; and provide for suitable penalties for committing such practices. Complaints relating to unfair labour practices will be dealt with by the labour courts. They shall have the power to impose suitable punishments/penalties which may extend to de-recognition in case of unions and heavy fine in case of an employer found guilty of such practices.2

VI. UNFAIR LABOUR PRACTICES ON THE PART OF EMPLOYERS AND TRADE UNIONS OF EMPLOYERS UNDER THE INDUSTRIAL DISPUTES (AMENDMENT) ACT, 1982 Section 2 (ra) read with the Fifth Schedule of Industrial Disputes (Amendment) Act, 1982 defines and enumerates unfair labour practices on the part of employers to mean: 1. To interfere with, restrain from, or coerce, workmen in the exercise of their right to organize, form, join or assist a trade union or to engage in concerted activities for the purposes of collective bargaining or mutual aid or protection, that is to say: (a) threatening workmen with discharge or dismissal, if they join a trade union; (b) threatening a lockout or closure, if a union is organized;

3. 4.

(c) granting wage increase to workmen at crucial periods of trade union organization, with a view to undermining the efforts of the trade union organization. To dominate, interfere with or contribute support, financial or otherwise, to any trade union, that is to say: (a) an employer taking an active interest in organizing a trade union of his workmen; and (b) an employer showing partiality or granting favour 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. To establish employer-sponsored trade unions of workmen. 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 any 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; (d) refusing to promote workmen to higher posts on account of their trade union activities; (e) giving unmerited promotions to certain workmen with a view to creating discord amongst other workmen, or to undermine the strength of their trade union; (f) discharging office-bearers or active members of the trade union on account of their trade union activities. To discharge or dismiss workmen (a) by way of victimization; (b) not in good faith but in the colourable exercise of the employer's rights; (c) by falsely implicating a workman in a criminal case on false evidence or on concocted evidence; (d) for patently false reasons;

(e) on untrue or trumped up allegations of absence without leave:

6. 7. 8. 9. 10.

11.

12. 13. 14. 15. 16.

(f) in utter disregard of the principles of natural justice in the conduct of domestic inquiry or with undue haste; (g) for misconduct of a minor or technical character, without having any regard to the nature of the particular misconduct or the past record or service of the workman, thereby leading to a disproportionate punishment. To abolish the work of a regular nature being done by workmen, and to give such work to contractors as a measure for breaking a strike. To transfer a workman mala fide from the one place to another, under the guise of following management policy. To insist upon individual workmen, who are on a legal strike, to sign a good conduct bond, as a pre-condition to allowing them to resume work. To show favouritism or partiality to one set of workers regardless of merit. 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. 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. To recruit workmen during a strike which is not an illegal strike. Failure to implement award, settlement or agreement. To indulge in acts of force or violence. To refuse to bargain collectively, in good faith with the recognized trade unions. Proposing or continuing a lockout deemed to be illegal under this Act.

And Section 25 T of the Act prohibits employers (whether registered under the Trade Unions Act, 1926 or not) to commit any of the aforesaid unfair labour practices. Violation of the provision is punishable with imprisonment for a term which may extend to 6 months or with fine which may extend to ₹1,000 or with both. A perusal of item 7 of the Fifth Schedule read with Section 25 T of the Act reveals that there is a statutory prohibition engrafted in the Industrial Disputes Act prohibiting transfer of a workman mala fide from one place to

another under the guise of management policy. Thus, a valued right has been created by the statute in favour of the workman from being subjected to by his employer to transfers mala fide under the guise of following the management policy. This is a right which has been created by the Industrial Disputes Act in favour of the workmen restricting the unfettered right of the management in the matter of effecting transfers of his employees. The obligation not to transfer a workman mala fide from one place to another under the guise of management policy was not recognized under common law. That right it now created by the statute.3 The remedy has been provided in Section 10 of the Act. There are several conditions which are to be satisfied for invoking the remedy provided under Section 10 of the Act. When the statute prescribes a remedy and also prescribes the conditions for availing of that remedy, if the conditions for invoking the remedy cannot be complied with, it does not mean that the statute has not provided the remedy.4 Thus, the right as well as the remedy have been provided by the Industrial Disputes Act in the matter of transfer by the management. In such a case, the jurisdiction of the civil court is by necessary implication barred.5 From the above, it is clear that (i) management is not expected to interfere with the rights of the workmen to organize themselves into a trade union. (ii) The management is also not supposed to dominate, interfere with or support, financial or otherwise, to any trade union. (iii) The management is not expected to establish employer-sponsored trade unions of workmen, and it is also not supposed to encourage or discourage membership to any union by taking the various steps which are mentioned above, clearly speaks of a recognized trade union. (iv) To refuse to bargain collectively even in good faith with a recognized trade union is an unfair labour practice.6 Discouragement of Badli workmen to join a trade union—an unfair labour practice. In Panyam Cement Employees Union affiliated to INTUC, Kurnool District v. Commissioner of Labour, Hyderabad7, the High Court of Andhra Pradesh held that a reading of clause 4 of Part 1 of the Fifth Schedule reveals that any action on the part of the employer/workmen to discourage a workman from participating in a trade union activity is unfair labour practice. Badli workmen are workmen and, therefore, if any employer disapproves of a ‘trade union of badli workers’ or discourages badli workers to join a trade union or denies voting right to badli workers, the same would amount to unfair labour practice. Temporary appointment for successive fixed tenure with artificial breaks—an unfair labour practice. The Supreme Court in Regional Manager,

SBI v. Raja Ram8 ruled that when an employee is appointed temporarily for successive fixed tenures with artificial breaks in between so as to deny the employee the right to claim permanent appointment, such action would be an unfair labour practice within the meaning of the phrase in Section 2(ra) of the Act. Section 2(ra) says that unfair labour practice means any of the practices specified in the Fifth Schedule the Act. The Fifth Schedule to the Act contains a list of unfair labour practices which have been classified under two heads, namely: (I) on the part of the employer and trade unions of employers; and (II) on the part of the workmen and trade unions of workmen. The principle that we have referred to earlier finds place in Item 10 of Part I under which: ‘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,’ is an unfair labour practice. In other words, before an action can be termed as an unfair labour practice, it would be necessary for the labour court to come to the conclusion that the badlis, casuals and temporary workmen had been continued for years as badlis, casuals or temporary workmen, with the object of depriving them of the status and privileges of permanent workmen. To this has been added the judicial gloss that artificial breaks in the service of such workmen would not allow the employer to avoid a charge of unfair labour practice. However, it is the continuity of service of workmen over a period of years which is frowned upon. Besides, it needs to be emphasized that for the practice to amount to unfair labour practice, it must be found that the workmen had been retained on a casual or temporary basis with the object of depriving the workmen of the status and privileges of a permanent workman. The aforesaid view was reiterated in Krishna Lal v. General Manager, Haryana Roadways, Rohtak9. The Punjab and Haryana High Court held that where the services of a workman are terminated before the expiry of 240 days in order to give artificial break for a few days and after some time, he is again reemployed, it amounts to unfair labour practice under Section 2(ra) of the Industrial Disputes Act, 1947. Contravention of Model Standing Orders — an unfair labour practice. In R P Sawant v. Bajaj Auto Ltd.10, the Bombay High Court held that the contravention of the Model Standing Order is an unfair labour practice within

meaning of item 9 of Schedule IV in respect of which industrial court was competent to grant relief to the complainants.

VII. UNFAIR LABOUR PRACTICES ON THE PART OF WORKMEN AND TRADE UNIONS OF WORKMEN UNDER THE INDUSTRIAL DISPUTES (AMENDMENT) ACT, 1982 Section 2 (va) read with the Fifth Schedule of the Amendment Act also enumerates the following unfair labour practices on the part of workmen and their trade unions: 1. To advice or actively support or instigate any strike deemed to be illegal under this Act. 2. To advice 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 nonstriking workmen are physically debarred from entering the work places; (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 against managerial staff. 3. For a recognized union to refuse to bargain collectively in good faith with the employer. 4. To indulge in coercive activities against certification of a bargaining representative. 5. To stage, encourage or instigate such forms of coercive actions as wilful ‘go slow’, squatting on the work premises after working hours or ‘gherao’ of any of the members of the management or other staff. 6. To stage demonstrations at the residences of the employers or the managerial staff members. 7. To incite or indulge in wilful 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 with a view to prevent him from

attending work. The commission of aforesaid unfair labour practices are prohibited under Section 25 T and whosoever commits any such unfair labour practice is punishable under Section 25 U of the Industrial Disputes (Amendment) Act, 1982 with imprisonment which may extend to 6 months or with fine which may extend to ₹1,000 or with both.

Proof of Unfair Labour Practice The charge of unfair labour practice should be specifically levelled so that the employer is able to meet it. It should also be proven by clear evidence. It is undoubtedly correct that sometimes, the facts may speak for themselves and it may be possible to infer that the employer was acting unfairly but there should be some evidence which should indicate an improper motive so as to enable the court to arrive at a finding of unfair labour practice.11

VIII. VICTIMIZATION Victimization and unfair labour practice are ‘like twins who cling together’. According to some, unfair labour practice can stand by itself, but victimization must always keep company with unfair labour practice. For instance, where the employer interferes with employees' right to self organization or with the formation of any labour organization, or where the employer bangs the door on any settlement by negotiation, there may be unfair labour practice. In such cases, no punishment need be inflicted on any employee. It cannot be said that there is any victimization. Thus, separate existence of unfair labour practice is conceivable. ‘In other words, the dividing line between victimization and unfair labour practice is very thin and what is unfair labour practice may also be a victimization and vice versa.’12 Like unfair labour practice, the word ‘victimization’ has not been defined either in the Trade Unions Act, 1926 or in the Industrial Disputes Act, 1947. The Supreme Court in Bharat Bank Ltd v. Employees of Bharat Bank Ltd13, has, however, defined the word ‘victimization’ to mean: a certain person has become a victim, in other words, that he has been unjustly dealt with. The aforesaid meaning was followed in Bharat Iron Works v.

Bhagubhai Balubhai Patel14, wherein the Supreme Court observed that a person is victimized, if he is subjected to persecution, prosecution or punishment for no real fault or guilt of his own, in the manner, as it were a sacrificial victim. The Supreme Court said that victimization may partake various types. For example, pressurizing an employee to leave the union or union activities, treating an employee unequally or in an obviously discriminatory manner for the sole reason of his connection with union or his particular union activity; inflicting a grossly monstrous punishment which no rational person would impose upon an employee and the like. The Supreme Court in Workmen of M/s Williamson Magor and Co. Ltd v. M/s Williamson Magor and Co. Ltd,15 accepted the normal meaning of ‘victimization’, namely, being the victim of unfair and arbitrary action, and held that there was ‘victimization of the superseded workmen. The tendency of the Court to safeguard the interest of workmen, is also evident from the observation of the Court, that whenever, the word ‘victimization’ can be interpreted in two different ways, the interpretation which is in favour of the labour should be accepted as they are the poorer section of the people compared to that of management.16 Justice Dhawan in L H Sugar Factories & Oil Mills (P) Ltd,17 expressed the view that what are unfair labour practices or victimizations is a question of fact to be decided by the tribunal upon the circumstance of each case. However, from the mere fact that the concerned workmen were office-bearers of the union, it cannot be inferred that the company was actuated by any improper motive to victimize them when the charge of misconduct was proved against them.18 Ludig Teller has enumerated and given seven instances where the employees may be held guilty of unfair labour practice. These are, for instance, sit down strikes, to compel members to join the union, strikes in violation of collective bargaining agreement, strike during ‘cooling-off’, obstruction of lawful works, the commission of misdemeanours in connection with labour disputes, unlawful picketing, etc. In RBS Jain Rubber Mills19, the tribunal listed the following as outward manifestation to be taken into account for victimization or unfair labour practice: 1. Discrimination between workers 2. Singling out union leaders or members 3. Anti-union statement made at the time of discharge or shortly prior thereto 4. Relative significance of the alleged infraction 5. Whether others ever committed the same infraction without similarly

being punished to the extent of discharge 6.

7. 8. 9.

Failure without explanation to introduce specific evidence in support of a general accusation or reason for discharge or to call witnesses who have personal knowledge of the basis of denial Failure of the employer to hold an investigation Failure to afford an employee the opportunity to defend himself Uneven application of the company’s rule

A. Proof of Victimization Victimization ‘is a serious charge by an employee against an employer, and, therefore, it must be properly and adequately pleaded, giving all particulars upon which the charge is based, to enable the employer to fully meet them. The charge must not be vague or indefinite, being as it is an amalgamation of facts as inferences and attitudes. The fact that there is a union espousing the cause of the employees in legitimate trade union activity and an employee is a member or active office-bearer thereof, is per se no crucial instance.’20

B. Burden of Proof The onus of establishing a plea of victimization will be upon the person pleading it. Since a charge of victimization is a serious matter reflecting to a degree, upon the subjective attitude of the employer evidenced by acts and conduct, these have to be established by safe and sure evidence. Mere allegations, vague suggestions and insinuations are not enough. All particulars of the charge brought out, if believed, must be weighed by the tribunal and a conclusion should be reached on a totality of the evidence produced.21 Again, victimization must be directly connected with the activities of the concerned employee inevitably leading to the penal action without the necessary proof of a valid charge against him… A proved misconduct is antithesis of victimization as understood in industrial relations.22

IX. SCOPE OF INTERFERENCE BY INDUSTRIAL TRIBUNAL It was established in Indian Iron and Steel Co. v. Their Workmen23 that

industrial tribunal can interfere, inter alia, in management’s order when there is victimization or unfair labour practice. Again, in Ananda Bazar Patrika v. Their Employees24, the Supreme Court dealt with the extent of jurisdiction of a labour court or an industrial tribunal and observed as follows: If on the one hand, in terminating the services of the employee, the management has acted maliciously or vindictively or has been actuated by a desire to punish the employee for his trade union activities, the tribunal would be entitled to give adequate protection to the employees by ordering his reinstatement, or directing in his favour the payment of compensation. But if the inquiry has been proper and the conduct of the management in dismissing the employee is not mala fade, then the tribunal cannot interfere with the conclusions of the inquiry officer, or with the orders passed by the management after accepting the said conclusions. In Bengal Bhatdee Coal Co. v. Singh25, the Supreme Court ruled: [T]here is no doubt that though in a case of proved misconduct, normally the imposition of a penalty may be within the discretion of management, there may be cases where the punishment of dismissal for the misconduct proved may be so unconscionable or so grossly out of proportion to the nature of offence that the tribunal may be able to draw an inference of victimization merely from the punishment inflicted. The Supreme Court in Hind Construction and Engineering Co. Ltd v. Their Workmen26 has put the position of law as follows: It is now settled law that the tribunal is not to examine the finding or the quantum of punishment because the whole of the dispute is not really open before the tribunal as it is ordinarily before a court of appeal. The tribunal's powers have been stated by this court in a large number of cases and it has been ruled that the tribunal can only interfere if the conduct of the employer shows lack of bona fides or victimization of employee or employees or unfair labour practices. The tribunal may, in a strong case, interfere with a basic error on a point of fact or a perverse finding, but it cannot substitute its own appraisal of the evidence for that of the officer conducting the domestic inquiry though it may interfere where the principles of natural justice or fair play have not been followed or where the inquiry is so

perverted in its procedure as to amount to no inquiry at all. In respect of punishment it has been ruled that the award of punishment for misconduct under the Standing Orders, if any, is a matter for the management to decide and if there is any justification for the punishment imposed, the tribunal should not interfere. The tribunal is not required to consider the propriety or adequacy of the punishment or whether it is excessive or too severe. But where the punishment and the past record are such, as no reasonable employer would ever impose in like circumstances, the tribunal may treat the imposition of such punishment as itself showing victimization or unfair labour practice.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

Alexandra Jute Mills Ltd v. Their Workmen, (1950) I LLJ 1261. Government of India, Report of the National Commission on Labour (1969) 336. Kerala Rubber and Reclaims Ltd v. P A Sunny, (1989) Lab. IC 964 at 967 (Kerala). Id. at 968. Id. at 969. MRF United Workers Union Rep. by its General Secretary v. Government of Tamil Nadu, 2010 LLR 165 (HC Madras). (2004) I LLJ 915. (2005) I LLJ 12 at 14–15. 2011 LLR 359. 2001 LLR 935. Gurdaspur Central Co-operative Bank Ltd v. Labour Court, (1999) Lab. IC 192. Everyday Flash Light Co. v. Labour Court, (1962) 2 LLJ 204 (Allahabad). Bharat Bank Ltd v. Employees of Bharat Bank Ltd (1950) LLJ 921. Bharat Iron Works v. Bhagubhai Balubhai Patel AIR 1976 SC 98. Workmen of M/s Williamson Magor and Co. Ltd, v. M/s Williamson, Magor and Co., Ltd, (1982) 1 LLJ 33 (SC). Id. at 38. LH Sugar Factories & Oil Mills (P) Ltd v. State of UP, (1961) 1 LLJ 686. Brown Co. Ltd v. Their Workmen, (1959) 1 LLJ 450. RBS Jain Rubber Mills‘ (1968) 1 LLJ vii (Journal Section). Bharat Iron Works v. Bhagubhai, AIR 1976 SC 98. Id. at 102.

22 Ibid. 23 Indian Iron and Steel Co. v. Their Workmen, AIR 1958 SC 130. 24 Ananda Bazar Patrika v. Their Employees, 1963 2 LLJ 429. 25 Bengal Bhatdee Coal Co. v. Singh, (1962–63) 24 FJR 406. 26 Hind Construction and Engineering Co. Ltd v. Their Workmen, AIR 1965 SC 917:

(1965) 1 LLJ 462.

PART III INDUSTRIAL DISPUTES ACT, 1947

CHAPTER

13 Industrial Disputes Act: A Contextual Framework One of the most striking trends is the progressively increasing government intervention in labour management relations. The Employers’ and Workmen’s Disputes Act, 1860, provided for speedy and summary disposal by magistrates of disputes concerning wages of workmen employed in railways, canals and other public works. Like some of the earlier regulations of the East India Company, it was concerned with specific industries and with only those disputes that gave rise to a cause of action in civil courts. The government had no active role to play. Provisions making breach of contract a criminal offence undoubtedly affected the workers' right to strike but the statute did not directly seek to regulate the use of instruments of economic coercion. The Trade Disputes Act, 1929, provided for the constitution of two ad hoc bodies, viz., the Court of Inquiry and the Board of Conciliation to inquire into and promote the resolution of ‘trade disputes’. The expression ‘trade dispute’ meant ‘any dispute or difference between employers and workmen or between workmen and workmen, which is connected with the employment or with the conditions of labour of any person’ and was neither confined to disputes in any particular trade or industry, nor to justifiable causes. Further, the statute regulated strikes and lockouts by declaring them illegal if their object was ‘other than the furtherance of a trade dispute within the trade or industry in which the participants were engaged; or if they were designed or calculated to inflict severe, general or prolonged hardship upon the community and thereby to compel the government to take or abstain from taking any particular course of action’ or if they were undertaken in the public utility services without giving prescribed notices. Under

the Act, the government could, therefore, intervene in labour management relations for the first time and use persuasive processes for the settlement of ‘trade disputes.’ The restrictions on the right to strike and lockout, particularly, the uncertainty inherent in the phrase ‘severe, general or prolonged hardship upon the community,’ were, of course, detrimental to the free use of instruments of economic coercion. Rule 81 A of the Defence of India Rules, 1942, empowered the government to (1) require employers to observe such terms and conditions of employment in their establishments as may be specified (2) refer any dispute for conciliation or adjudication (3) enforce the decisions of the adjudicators and (4) 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. The Industrial Disputes Act, 1947, put the wartime emergency provisions in a permanent peacetime legislation.

I. OBJECT OF THE ACT The object of the Industrial Disputes Act, 1947 was contained in the statement of Objects and Reasons: Experience of the working of Trade Disputes Act, 1929, has revealed that its main defect is that while restraints have been imposed on the rights of strikes and lockouts in public utility services, no provisions have been made to render the settlement of an industrial dispute, either by reference to a board of conciliation or to a court conclusive and binding on the parties to the dispute. This defect was overcome during the war by empowering under Rule 81A of the Defence of India Rules, the Central Government to refer industrial disputes to adjudicators and to enforce their awards. Rule 81A which was to lapse on the 1st of October, 1946 is being kept in force by the Emergency Powers (Continuance) Ordinance, 1946, for a further period of six months and as industrial unrest, in checking which this Rule has proved useful, is gaining momentum due to stress of postwar industrial readjustment, the need of permanent legislation in replacement of this rule is self-evident. This bill embodies the essential principles of Rule 81A, which have proved generally

acceptable to both employers and workmen retaining in tact for the most part, the provisions of the Trade Disputes Act, 1929. However, adjudication proceedings under the Industrial Disputes Act, 1947, (hereinafter referred to IDA) are not confined to ‘public utility services’ or to such employment as ‘is essential for securing the defence of British India, the public safety, the maintenance of public order, the efficient prosecution of war, or for maintaining supplies or services necessary to the life of the community’ but may be invoked in any ‘industrial dispute.’ Further, though the obnoxious provisions of Section 16 of the Trade Disputes Act, 1929, has been omitted, Section 23 of the IDA prohibits strikes and lockout ‘(a) during the pendency of conciliation proceedings before a board and 7 days after the conclusion of such proceedings (b) during the pendency of any adjudication proceedings and (c) during any period in which a settlement or award is in operation, in respect of any matter covered by the settlement or award.’ Where a strike or lockout has commenced before reference of the dispute to a board of conciliation or adjudicating body, the government may prohibit the continuance of such strike or lockout. The amendments further widened the scope of governmental intervention. The Supreme Court in Dimakuchi Tea Estate Karmchari Sangh v. Dimakuchi Tea Estate,1 summed up the principal objects of the Act as follows: (i) promotion of measures for securing and preserving amity and good relations between the employers and workmen; (ii) investigation and settlement of industrial disputes, between employers and employers, employers and workmen or workmen and workmen, with a right of representation by registered trade union or a federation of trade unions or an association of employers or a federation of association of employers; (iii) prevention of illegal strikes and lockouts; (iv) relief to workmen in the matter of layoff and retrenchment; and (v) collective bargaining. In Life Insurance Corporation of India v. D J Bahadur2, Justice V R Krishna Iyer speaking for the Supreme Court has observed that ‘the Industrial Disputes Act is a benign measure which seeks to pre-empt industrial tensions, provide the mechanics of dispute resolution and set up the necessary infrastructure so that the energies of partners in production may not be dissipated in counter-productive battles and assurance of industrial justice may create a climate of goodwill.’

The Supreme Court in Rajasthan State Road Transport Corporation3 observed that the object of the Industrial Disputes Act, as its preamble indicates, is to make provision for the investigation and settlement of industrial disputes which means adjudication of such disputes also. The Act envisages collective bargaining, contracts between union representing the workmen and the management, a matter which is outside the realm of the common law or the Indian law of contact. The Act also provided for the constitution of various committees and conferred extensive powers on different kinds of authorities in the matter of settlement of adjudication of industrial disputes. It also provide remedies under Sections 10, 12, 18, 19 and 31(2), 33(1)(a), 33C(1) and 33C(2).

II. SCHEME OF THE ACT The long title shows that the object of the Act is ‘to make provision for investigation and settlement of industrial disputes and for certain other purposes.’ The preamble states the same object and Section 2 of the Act which contains the definitions states that unless there is anything repugnant in the subject or context, certain expressions will have certain meanings. Chapter II refers to the authorities set up under the Act, such as, works committees, conciliation officers, boards of conciliation, courts of enquiry and industrial tribunals. The primary duty of a works committee is to promote measures for securing and preserving amity and good relations between employers and workmen and to that end, to comment upon their common interest or concern and endeavour to compose any material difference of opinion in respect of such matters. Conciliation officers are charged with the duties of mediating in, and promoting the settlement of industrial disputes. A board of conciliation may also be constituted for the same purpose, namely, for promoting the settlement of an industrial dispute. A court of enquiry may be appointed for inquiring into any matter which appears to be connected with or relevant to an industrial dispute. Section 7 empowers the appropriate government to constitute one or more tribunals for the adjudication of industrial disputes in accordance with the provisions of the Act. Chapter III contains provisions relating to the reference of industrial disputes to the board of conciliation, court of inquiry or labour court, tribunal or national tribunal. Under Section 10 (1) (c), where an appropriate government is of the opinion that any industrial dispute exists or is apprehended, it may, at any time, by order in writing, refer the dispute or any matter appearing to be connected with or relevant to the dispute to a tribunal for adjudication.

Chapter IV of the Act deals with procedure, powers and duties of the authorities set up under the Act. Where an industrial dispute has been referred to a tribunal for adjudication, Section 15 requires that the tribunal shall hold its proceedings expeditiously and shall, as soon as practicable on the conclusion thereof, submit its award to the appropriate government. Section 17 lays down, inter alia, that the award of a tribunal shall, within a period of one month from the date of its receipt by the appropriate government, be published in such manner as it thinks fit. Section 17A lays down that the award of a tribunal shall become enforceable on the expiry of 30 days from the date of its publication. Section 17 also contains certain other provisions which empower the appropriate government to modify or reject the award. Section 18 relates to awards. Section 19 lays down the period of operation of settlements and awards and states, inter alia, that an award shall, subject to the provisions of the section, remain in operation for a period of one year. Chapter V of the Act deals with strikes and lockouts. Chapter VA and VB deal with layoff, retrenchment, closure and transfer. Chapter VI prescribes penalties and Chapter VII deals with miscellaneous matters. It is important to note that though in the definition of ‘lockout’ under Section 2(l) and ‘strike’ under Section 2(q) and further in Section 22, the expression ‘any person’ has been used; in Section 22 (2) and Section 23 which also deal with ‘lockout’ and ‘strike’, the word ‘workman’ has been used. Section 33 provides that during the pendency of any conciliation proceedings or any proceedings before a tribunal, the conditions of service, etc., shall not be changed. Section 33A, however, uses the word ‘employee’ but read with Section 33, the word ‘employee’ must mean a workman. Section 36 deals with representation of parties. Sub-section (3) of Section 36 states that no party to a dispute shall be entitled to be represented by a legal practitioner in any conciliation proceedings under the Act or in any proceedings before a court. Sub-section (4) states that in any proceedings before a tribunal, a party to a dispute may be represented by a legal practitioner with the consent of the parties to the proceeding and with the leave of the tribunal. The analysis of the aforesaid provisions shows that the Industrial Disputes Act enables the State to compel the parties to resort to industrial arbitration and for that purpose, different forums have been set up for the resolution of such disputes. The Act is intended to be a self-contained one and it seeks to achieve social justice on the basis of collective bargaining. The scheme of the Act shows that it attains a settlement of all industrial disputes arising between labour and management by peaceful methods through the machinery of conciliation and

arbitration and if necessary, by approaching the tribunal constituted under the Act.

III. INDUSTRIAL DISPUTES (AMENDMENT) ACT 1982 AND 1984 The Industrial Disputes Act, 1947 has undergone several amendments since 1947. Thus, the Industrial Disputes (Amendment) Act, 1982 made the following amendments: (i) (ii)

Amended the definition of ‘appropriate government’ Amended the definition of industry and thereby curtailed the scope of ‘industry’ as laid down by the Supreme Court in Bangalore Water Supply & Sewerage Board v. A Rajappa (iii) Inserted new clause (cc) defining ‘closure’ (iv) Inserted new clauses, namely, Section 2 (ka) and 2(kka) (defining ‘industrial establishment or undertaking’ and ‘Khadi’ respectively (v) Inserted new Sections 2 (qq), 2 (ra) and 2 (rb) defining ‘trade union’, ‘unfair labour practice’ and ‘village industries’. Further, Fifth Schedule was added enumerating unfair labour practice (vi) Inserted Chapter VC dealing with prohibition of unfair labour practice and penalty thereof (vii) Inserted Chapter II B which provides for grievance settlement authorities and reference of certain individual disputes to such authorities (viii) Extended the special provisions relating to layoff, retrenchment and closure in establishments employing not less than 100 workmen. It also inserted procedure for closing an undertaking and penalty for violation therefor. Two years later, the Industrial Disputes (Amendment) Act, 1984, was introduced which inter alia, seeks to make the following amendments in the Act. (i) It excludes from the definition of ‘retrenchment’ as contained in the Act ‘termination of the service of a workman as a result of the non-renewal of the contract of employment on its expiry and on the termination of such contract in accordance with the provisions thereof’. (ii) Following the decision of the Supreme Court in the Excel Wear case (AIR 1979 SC 25), some high courts declared invalid the special

provisions relating to layoff and retrenchment contained in the Act which applied to establishments employing 300 or more workmen. It redrafted these provisions on the same lines as in the amended provision relating to closure, which was inserted by the Industrial Disputes (Amendment) Act, 1982, (46 of 1982), after taking into consideration the observations of the Supreme Court in the said case.

IV. TRADE UNIONS AND THE INDUSTRIAL DISPUTES (AMENDMENT) BILL, 1988 Four years later, the aforesaid Bill sought to undertake comprehensive amendments to the Trade Unions Act, 1926 and the Industrial Disputes Act, 1947 with the intention of promoting healthy industrial relations, effective bargaining councils at unit, industry or national levels and, finally, expeditious settlement of industrial disputes through a system of industrial relations commissions (with labour courts working under them) from whose decisions appeals would lie only to the Supreme Court. The Bill proposed to set up IRCs both at the Centre and in the states. These will comprise both judicial and nonjudicial members, the latter being drawn from among persons having eminence in the fields of industry, labour or management. The IRCs will be high-powered tribunals under Article 323B of the Constitution and appeals against their orders or awards will be only to the Supreme Court. These commissions will have jurisdiction in respect of adjudication and will hear appeals against the order of the labour courts including those relating to registration of bargaining councils. It is not, however, proposed to entrust them with conciliation functions which have been traditionally performed by the appropriate government. The Bill makes a specific provision for bipartite negotiations. The Bill also lays stress on the need to exhaust all modes of settlement like bipartite discussions, conciliation, voluntary arbitration, etc., before resort to direct action. Even for the last resort, i.e., strike or lockout, the conditions prescribed must be met, by either party contemplating it, with corresponding penalties for resorting to such extreme steps in contravention of the law. In order to provide quick relief and cut down delays, it is proposed to provide that a workman or a trade union of which he is a member, can refer an individual dispute directly to a labour court.

V. INDUSTRIAL DISPUTES (AMENDMENT) ACT, 2010 The statement of Objects and Reasons appended to the Bill seeks to lay down the following objectives and salient features of the amendment: 1. The Industrial Disputes Act, 1947 had been amended from time to time in the light of experience gained in its actual working, case laws and industrial relations policy of the government. 2. At present the workman, whose services have been discharged, dismissed, retrenched, or otherwise terminated under Section 2A of the Act, is unable to approach the labour court or tribunal in the absence of a reference of industrial dispute by the appropriate government to the labour court or tribunal. This causes delay and untold suffering to the workmen. The Industrial Disputes (Amendment) Act, 1982 provided for an in-house Grievance Settlement Authority for the settlement of industrial disputes connected with an individual workman employed in the industrial establishment, but it does not permit the workman to approach labour court or tribunal until such dispute has been decided by the grievance settlement authority. The labour courts and tribunals have no power under the Act to enforce the awards published by the appropriate government. 3. In view of the above, it is considered necessary to provide for workman a direct access to labour court or tribunal in case disputes arising due to discharge, dismissal, retrenchment or termination of service of workman. It is also proposed to establish a grievance redressal machinery as an inhouse mechanism in an industrial establishment with 20 or more workmen without affecting the right of workman to raise an industrial dispute on the same matter under the provisions of the Act. 4. Accordingly, the Industrial Disputes (Amendment) Bill, 2009, inter alia, seeks to provide for: (i) amendment of the term ‘appropriate government’ defined under section 2(a) of the Act to amplify the existing definition; (ii) enhancement of wage ceiling of a workman from ₹1,600 per month to ₹10,000 per month under Section 2(s) of the Act; (iii) direct access for the workman to the labour court or tribunal in case of disputes arising out of Section 2A of the Act; (iv) expanding the scope of qualifications of presiding officers of

(v)

(vi)

labour court or tribunals under Sections 7 and 7A of the Act; establishment of grievance redressal machinery in every industrial establishment employing 20 or more workmen for the resolution of disputes arising out of individual grievances; empowering the labour court or tribunal to execute the awards, orders or settlements arrived at by labour court or tribunal.

VI. SCOPE OF THE ACT The Act extends to the whole of India, the original Act came into force on the first day of April, 1947.

VII. INTERPRETATION OF INDUSTRIAL RELATIONS LAW The Supreme Court in Bharat Singh v. Management of New Delhi Tuberculosis Centre, New Delhi4 held that in interpretation of the welfare statutes: ‘the courts have steered clear of the rigid stand of looking into the words of the section alone but have attempted to make the object of the enactment effective and to render its benefits to the persons in whose favour it is made’. Again, in Smt. Dhanalakshmi v. Reserve Bank of India5, the division bench of the Karnataka High Court observed: Liberal and not strict rule of construction is required to be followed while dealing with welfare statutes. Semantic luxuries should not be permitted to be misplaced in the interpretation of bread and butter statutes. As consistently held by the courts, welfare statutes must, of necessity, receive a broad interpretation. It should not be lost sight of so that the welfare statutes in a welfare state are enacted with the object of promoting general welfare, which should not be dipped in the ocean of wrangles of technicalities.

VIII. NO JURISDICTION OF CIVIL COURT IN INDUSTRIAL DISPUTE

Premier Automobiles Limited v. Kamalakar Shantaram Wadke6 is a leading authority on jurisdiction of civil courts in industrial disputes. The three-judge bench of the Supreme Court held that (i) If the dispute is not an industrial dispute, nor does it relate to enforcement of any other right under the Act, the remedy lies only in the civil court. (ii) If the dispute is an industrial dispute arising out of a right or liability under the general or common law and not under the IDA, 1947, the jurisdiction of the civil court is alternative, leaving it to the election of the suitor concerned to choose his remedy for the relief which is competent to be granted in a particular remedy. (iii) If the industrial dispute relates to the enforcement of a right or an obligation created under the industrial Disputes Act, then the only remedy available to the suitor tis to get an adjudication under the Industrial Disputes act. (iv) If the right which is sought to be enforced is a right created under the Industrial Disputes Act, such as Chapter VA, then the remedy for its enforcement is either Section 33C or raising of an industrial dispute as the case may be. Cases of industrial disputes, by and large, are invariably bound to be covered by principle (iii) stated above. Again a three-judge bench of the Supreme Court in Rajasthan State Road Transport Corporation v. Krishna Kant7 held that: (i) ‘Where the dispute arises from general law of contract, i.e., where reliefs are claimed on the basis of the general law of contract, a suit filed in civil court cannot be said to be not maintainable, even though such a dispute may also constitute an ‘industrial dispute’ within the meaning of Section 2(k) or Section 2A of the Industrial Disputes Act, 1947. (ii) Where, however, the dispute involves recognition, observance or enforcement of any of the rights or obligations created by the Industrial Disputes Act, the only remedy is to approach the forums created by the said Act. (iii) Similarly, where the dispute involves the recognition, observance or enforcement of rights and obligations created by enactment, like Industrial Employment (Standing Orders) Act, 1946—which can be called "sister enactments" to Industrial Disputes Act and which do not provide a forum for resolution of such disputes, the only remedy shall be to approach the forums created by the Industrial Disputes Act provided they constitute industrial disputes within the meaning of Section 2(k) and Section 2A of Industrial Disputes Act or where such enactment says that such dispute shall be either treated as an industrial dispute or says that it shall be adjudicated by any of the forums created by the Industrial Disputes Act. Otherwise, recourse to civil court is open.

In Rajasthan State Road Transport Corporation v. Zakir Hussain8, the Supreme Court held that the employees of the corporation were not civil servants and they were not entitled to protection of Article 311(2) of the Constitution. While dealing with the question of jurisdiction of civil courts in matters of industrial disputes, the Court applied the principles enunciated in Rajasthan State Road Transport Corporation v. Krishna Kant (supra) and held that the respondent ought to have approached the remedies provided under the IDA and civil court has no jurisdiction to entertain and try the suit. A three-judge bench of the Supreme Court in Rajasthan SRTC v. Khadarmal9 again considered the question regarding jurisdiction of the civil court in the matter of termination of service of a probationer following its earlier judgements in Rajasthan SRTC v. Zakir Hussain (supra) and Rajasthan SRTC v. Krishna Kant (supra), held that as the civil court had no jurisdiction, the decrees which were passed have no force of law. It appears that in Rajasthan SRTC v. Bal Mukund Bairwa10, a two-judge bench of the Supreme Court noticed some conflict in the decisions in Krishna Kant and Khadarmal and accordingly, referred the matter to a larger bench. A three-judge bench of the Supreme Court in Rajasthan State Road Transport Corporation v. Bal Mukund Bairwa11 revisited the issue with regard to jurisdiction of the civil court to entertain suits questioning the orders of termination and held that if an employee intends to enforce his constitutional rights or a right under a statutory regulation, the civil court will have necessary jurisdiction to try a suit. If however, he claims his right and corresponding obligations only in terms of the provisions of the Industrial Disputes Act or the sister laws so called, the civil court will have none. The Court also held that it would not be correct to contend that only because the employee concerned is also a workman under the Industrial Disputes Act, 1947, or the conditions of his service are otherwise governed by the standing orders certified under the Industrial Employment (Standing Orders) Act, 1946, ipso facto the civil court will have no jurisdiction. The aforesaid matter was again considered by the Supreme Court in Rajasthan SRTC v. Mohar Singh12. The Court held that if the infringement of the standing orders or other provisions of the Industrial Disputes Act are alleged, the civil court’s jurisdiction may be held to be barred but if the suit is based on the violation of principles of common law or constitutional provisions or on other grounds, the civil court’s jurisdiction may not be held to be barred. If no right is claimed under a special statute in terms whereof the jurisdiction of the civil court is barred, the civil court will have jurisdiction.

In RSRTC v Deen Dayal Sharma13, the respondent who had hardly served for 3 months as a conductor was dismissed by the Rajasthan State Road Transport Corporation for not issuing tickets to six passengers. He then filed a civil suit. The trial judge dismissed the petition. The first and second appeals filed against the said order were also dismissed. The respondent then filed an appeal before the Supreme Court. He asserted that the departmental inquiry as contemplated under the standing orders ought to have been held before issuing the order of dismissal and in absence thereof such order was liable to be quashed. However, the Supreme Court held that such right, if available, could have been enforced by the respondent only by raising an industrial dispute and not in a civil suit. In such circumstances, it held that civil court had no jurisdiction to entertain and try the suit filed by the respondent.

1 2 3 4 5 6 7 8 9 10 11 12 13

AIR 1958 SC 358. AIR 1980 SC 2181. 2005 LLR 1044. 1986 Lab. IC 850 : AIR 1986 SC 842. 1999 Lab. IC 286 (Karnataka). (1976) 1 SCC 496. (1995) 5 SCC 75: 1995 LLR 481 (SC). (2005) 7 SCC 447. (2006) 1 SCC 59. (2007) 14 SCC 41. (2009) 4 SCC 299. (2008) 5 SCC 542. (2010) 5 SCALE 1.

CHAPTER

14 Concept and Scope of Individual and Industrial Disputes I. INDUSTRIAL DISPUTE Section 2 (k) of the Industrial Disputes Act, 1947, defines ‘industrial dispute’1 to mean: 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 nonemployment or the terms of employment or with the conditions of labour, of any person. The dimensions of the aforesaid definition determine the permissible area of both community intervention in industrial relations as well as labour activity. Stated broadly, the definition of ‘industrial dispute’ contains two limitations. (i) The adjective ‘industrial’ relates to the disputes of an industry as defined in the Act, and (ii) it expressly states that not all sorts of dispute and differences but only those which bear upon the relationship of employers and workmen regarding employment, non-employment, terms of employment and conditions of labour are contemplated.2 Broadly speaking, the definition of ‘industrial dispute’ may be analysed under four heads: (i) Factum of industrial dispute;

(ii) Parties to the dispute; (iii) Subject matter of the dispute;3 and (iv) Origin of the dispute.

A. Factum of Industrial Dispute The existence of a dispute or difference is the key to the expression ‘industrial dispute’. The expression ‘dispute or difference’ connotes a real and substantial difference having some element of persistency and continuity till resolved, and likely, if not adjusted, to endanger the industrial peace of the undertaking or the community.4 When the parties are at variance, and the dispute or difference is connected with the employment, or non-employment or the terms of employment or with the conditions of labour, there comes into existence an industrial dispute.5 But there is divergence of opinion among the courts on the issue whether a mere demand to the appropriate government or to the conciliation officer without a dispute being raised by the workmen with the employer regarding such demand can become an industrial dispute. The Supreme Court in Sindhu Resettlement Corporation Ltd v. Industrial Tribunal6 answered it in negative. Observed Justice Bhagwati: If no dispute at all was raised by the (workmen) with the management, any request sent by them to the government would only be a demand by them and not an industrial dispute between them and their employer. An industrial dispute, as defined, must be a dispute between employers and employers, employers and workmen and workmen and workmen. A mere demand to a government, without a dispute being raised by the workmen with their employer, cannot become an industrial dispute.7 The aforesaid view does not appear to be in conformity with the earlier decision of the Supreme Court in Bombay Union of Journalists v. The Hindu8 wherein it was held that industrial dispute must be in existence or apprehended on the date of reference. The net effect of the principle is that even if the demand was not made earlier before the management and rejected by them and is raised at the time of reference or during conciliation proceedings, the dispute may be an ‘industrial dispute’. The aforesaid view in the Hindu (Supra) appears to have been followed in Shambhu Nath Goel v. Bank of Baroda.9 An employee of the Bank of Baroda was dismissed from service after an inquiry in which the employee

appeared and claimed reinstatement. Further, when the union approached the conciliation officer, the management resisted the claim for reinstatement. Thereafter, the employee preferred an appeal to the competent authority. Before the tribunal, the management raised the preliminary objection that the employee had not made a demand. The tribunal accepted the claim of the management and held that the reference was incompetent. Thereafter, the employee preferred an appeal before the Supreme Court. The question arose whether the government’s reference was proper and in accordance with the provisions of the Act. The Court observed: … to read into the definition the requirement of written demand for bringing into existence an industrial dispute would be tantamount to rewriting the section. The Court added: Undoubtedly, it is for the government to be satisfied about the existence of the dispute and the government does appear to be satisfied. However, it would be open to the party impugning the reference that there was no material before the government, and it would be open to the tribunal to examine the question, but that does not mean that it can sit in appeal over the decision of the government. In Workmen of Hindustan Lever Ltd v. Hindustan Lever Ltd,10 the Government of Maharashtra referred a dispute between Hindustan Lever Ltd and its workmen for adjudication to the industrial tribunal, Maharashtra. A preliminary objection was raised by the employers that reference was incompetent because the dispute raised by workmen and referred by the government to the industrial tribunal was not an ‘industrial dispute’ because if the demand as raised is conceded, it would be tantamount to allowing the workmen to decide the strength of the work force required in various grades and it is well-settled that determining and deciding the strength of work force required in an industry is a management function. The industrial tribunal held that the dispute was not an ‘industrial dispute’. On appeal, the Supreme Court set aside the award and remitted the matter for disposing of the reference on merits and observed: The expression ‘industrial dispute’ has been so widely defined as not to leave anything out of its comprehension and purview involving the area of conflict that may develop between the

employer and the workmen and in respect of which a compulsory adjudication may not be available. This is recognized to be the width and comprehension of the expression. Be that as it may, the full bench of the Himachal Pradesh High Court in M/s Village Papers Pvt. Ltd v. State of Himachal Pradesh11 has summarized the views expressed by the Supreme Court and high courts on the aforesaid subject as follows: 1. A mere demand made to the government cannot become an industrial dispute without it being raised by the workmen with their employer. 2. If such a demand is made to the government, it can be forwarded to the management and if rejected, becomes an industrial dispute. 3. Though it is apparent that for a dispute to exist, there must be a demand by the workmen or the employer. This demand need not be in writing, unless the matter pertains to a public utility service, in view of the provisions of Section 22 of the Industrial Disputes Act, 1947. 4. The demand need not be sent directly to the employer nor it is essential for it to be made expressly. It can be even implied or constructive, e.g., by way of filing an appeal or refusal of an opportunity to work when demanded by the workmen. A demand can be made through the conciliation officer, who can forward it to the management and seek its reaction. If the reaction is in negative and not forthcoming and the parties remain at loggerheads, a dispute exists and a reference can be made. 5. Whether a dispute exists has to be decided in each case and is dependent on the facts and circumstances of that case. The crucial time for this examination is the date of making the reference; material which comes into existence after the reference has been made is not relevant. 6. Only that dispute which exists or is apprehended can be referred. If there is a different kind of demand made before the management and the reference pertains to some other demand, then the reference is incompetent, e.g., reference pertains to reinstatement whereas the demand pertains to retrenchment compensation. 7. The jurisdiction of the labour court/industrial tribunal is limited to the points specifically referred and matters incidental thereto. Since the scope of its jurisdiction and power is circumscribed by the order of reference, it is not permissible for it to go beyond the terms of reference. 8. Thus, if a reference is made without any demand having been made on the

employer either expressly or impliedly, there is no occasion for the employer to point out the nature of the dispute so as to facilitate the government for making an appropriate reference of the dispute.

B. Parties to the Industrial Dispute In order to fall within the definition of an ‘industrial dispute’, the dispute must be between: (i) employers, or (ii) employers and workmen, or (iii) workmen and workmen. Besides interpreting the key words, namely ‘employer’ and ‘workman’, which are statutorily defined and will be discussed in another section, tribunals and courts have indulged in judicial legislation. Trade unions as such are not mentioned in the definition of ‘industrial dispute’ because they act on behalf of the workmen and, therefore, when a trade union raises a dispute, the workmen are deemed to be parties to the dispute.12 However, the parties to the industrial dispute do not include disputes (i) between government and an industrial establishment or (ii) between workmen and nonworkmen.13 The words ‘employers and employers’ which did not occur in the Trade Disputes Act, 1929, were inserted in the Industrial Disputes Act, 1947, in order to give the definition of ‘industrial dispute’ a wide coverage. The disputes between employers and employers may arise in respect of wage matters in an area where labour is scarce or disputes of similar character. The words ‘workmen and workmen’ occur in Section 2 (k) to include the disputes between them either directly or through their trade unions. Such a dispute may be demarcation dispute, inter-union dispute, etc. Inter-union dispute has, however, not been held to be an ‘industrial dispute’.14 The aforesaid three expressions, namely, between employers and employers or between employers and workmen, or between workmen and workmen read with Section 13 (2) of the General Clauses Act, 1897 lead us to make the following categorizations: (i) Where both parties include more than one person: employers and employers, employers and workmen, workmen and workmen. (ii) Where only one of the parties includes more than one person: employer and employers, employer and workman, employers and workman, workmen and workman. (iii) Where both the parties are in singular: employer and employer, employer and workman, workman and workman.

(iv)

Where both the parties as in category (i) include more than one person, the dispute would be a collective dispute. Further, where one of the parties include more than one person, it may be categorized as ‘collective dispute’. However, doubts have been expressed whether the dispute between ‘employers and workman’ would be a ‘collective dispute’. Moreover, where both the parties as in category (ii) above are composed of single individuals, the case falls into the category of ‘individual dispute’.

C. Subject Matter of Industrial Dispute In order to be an ‘industrial dispute’, the dispute must be: …connected with the employment or non-employment or the terms of employment or with the conditions of labour, of any person. In practice, however, it is exceedingly difficult to draw a line between various expressions used to indicate the subject-matter of industrial dispute. Generally speaking, the expressions used in Section 2(k) are of wide amplitude and have been put in juxtaposition to make the definition thoroughly comprehensive.15 Thus, the phrase ‘conditions of labour’ is wide enough to include ‘terms of employment’ as well as matters connected with unemployment. Similarly, the expression ‘terms of employment’ includes certain matters relating to ‘employment or non-employment’. It is however, doubtful if the legislature intended any water-tight compartmentalization. The words ‘in connection with’ widen the scope of ‘industrial disputes’ and do not restrict it by any means. The legislature used these phrases in the definition of ‘industrial dispute’ so that all aspects of labour problems may be resolved through the industrial relations machinery provided under the Industrial Disputes Act, 1947. Any attempt to draw a rigid line would limit, or at least create an impression of limiting the scope of ‘industrial dispute’ which, it must be emphasized, deals not only with the disputes between employers and workmen but also between ‘employers and employers’ and between ‘workmen and workmen’. However, since every expression used by the legislature indicates certain meaning and idea, it is necessary to examine them. ‘Employment’ brings in the contract of service between the employer and the employed.16 The concept of employment involves three ingredients: (i) employer, (ii) employee and (iii) the contract of employment. The employer is one who employs, i.e., one who engages the services of other persons. The employee is one who works on hire basis. The employment is the contract of

service between the employer whereunder the employee agrees to serve the employer, subject to his control or supervisions. ‘Unemployment’ is the opposite of ‘employment’ and would mean that disputes of workmen which arise out of service with their employers are within the ambit of the definition. It is the positive or negative act of the employer that leads to employment or unemployment. It may relate to an existing fact of unemployment or a contemplated unemployment. Four illustrations were cited by the Federal Court in Western Indian Automobiles Association v. Industrial Tribunal17 in support of the aforesaid explanations. Of them, two are in respect of ‘employment and two are in respect of unemployment.’ A dispute is as to ‘employment’ or connected with or arising out of employment if: (i) An employer has already employed a person and a trade union says ‘please do not employ him’. (ii) An employer gives notice to a union saying that he wishes to employ two particular persons. The union says ‘no’. A matter raises a dispute as to unemployment or contemplated unemployment if: (i) An employer may dismiss a man, or decline to employ him. (ii) An employer contemplates turning out those who are already in his employment. The failure to employ or the refusal to employ are actions on the part of employer which would be covered by the expression ‘employment or unemployment’. Accordingly, the expression ‘unemployment’ is sufficiently elastic to include all cases of (i) termination of service either voluntary or by act of parties (as employer or workmen). The instances of this kind are dismissal,18 discharge, retrenchment19, compulsory retirement,20 etc. It also includes temporary unemployment, e.g., suspension, layoff, compulsory leave, lockout, strike, etc. Further, it would include within its scope the words arising out of unemployment, e.g., reinstatement,21 re-employment, compensation and back wages for wrongful termination of service. The expression ‘terms of employment’ and ‘conditions of labour’ indicate the kind of conflict between those engaged in industry on the opposite but cooperative sides.22 These words connote dispute to be the share in which the receipts in a commercial venture shall be divided. The expression ‘terms of employment’ generally covers basic wages, dearness allowance and other allowances, wages on promotion, wages on demotion, wages on transfer out of town, wages for over-time work, wages for work on holiday, payment of wages, recovery of wages, bonus, retiral benefits,

e.g., pension, provident fund, gratuity, pension, etc. The expression ‘conditions of labour’ is much wider in scope and refers to the conditions of service under which they work and the amenities provided or to be provided to them. This expression may include hours of work, holidays, leave, health, safety and welfare of labour. Quite apart from those matters which have been said to be covered in the subject-matter of industrial dispute, an analysis of decided cases reveals that following matters have also been included in the definitions: (i) alteration of conditions of service of employees23 (ii) demand for modification of standing orders24 (iii) disputes regarding contract labour25 (iv) dispute on lockout in disguise of closure26 (v) dispute of workmen whose cases are left unsettled27 (vi) transfer of workman from one place to another28. In Workmen of Hindustan Levers Ltd v. Hindustan Levers Ltd29, a question arose whether a demand for confirmation in the promoted post would be a dispute connected with the terms of employment or the conditions of labour within the meaning of Section 2 (k). The Supreme Court answered the question in the affirmative and observed: In respect of the classification, a dispute can conceivably arise between the employer and the workman because failure of the employer to carry out the statutory obligation would enable the workman to question his action which will bring into existence a dispute. It would become an industrial dispute because it would be connected with the conditions of employment. It becomes a condition of employment because necessary conditions of service have to be statutorily prescribed, one such being classification of the workmen was to confirm employees employed in an acting capacity in a grade, it would unquestionably be an industrial dispute. However, dispute between two unions regarding membership of the union is not an ‘industrial dispute.’30 In Cipla Limited v. Maharashtra General Kamgar Union,31 the Supreme Court held that, if the employees are working under a contract covered by the Contract Labour (Regulation and Abolition) Act, then the labour court or the industrial tribunals have no jurisdiction to decide the question of abolition of contract labour as it falls within the province of an appropriate government to abolish the same. But if the workmen claim that they have been directly employed by the company but the contract itself is a camouflage and, therefore,

needs to be adjudicated, is a matter which can be adjudicated by the appropriate industrial tribunal or labour court under the Industrial Disputes Act, 1947.

D. Origin of Industrial Dispute The scope of the expression ‘any person’ occurring in the last part of the definition of ‘industrial dispute’ has been a subject matter of controversy. The question has arisen in several cases before the high courts and also before the Supreme Court as to what exactly is the scope of the expression ‘any person’ as contemplated in Section 2 (k). If construed literally, it may mean and include both natural as well as artificial persons. On the contrary, if interpreted narrowly, the expression ‘of any person’ may be equated with ‘workman’. How and where to draw a line is not easy to answer. An analysis of the decided cases of tribunals and courts reveals that prior to the Supreme Court decision in Dimakuchi Tea Estate (supra), there was no unanimity of opinion with regards to the scope of the expression ‘any person’. Three views were discernible. (i) The first view emphasized the literal meaning and held that employment or non-employment or terms of employment or conditions of labour of any person whether that person is a workman or not and whether that person was a sweeper in a director’s bungalow could form the subject matter of industrial dispute.32 According to them, if ‘the intention of the Legislature was to restrict the scope of the expression of industrial dispute as a dispute between employers and workmen relating to the terms of employment of workmen alone, there was no need to use the wider expression of ‘any person’.33 (ii) The second view equated the word ‘person’ with that of ‘workman’. According to the supporters of this line of view, unless the ‘person’ was a ‘workman’ within the meaning of Section 2(s) of the Industrial Disputes Act, 1947, a dispute concerning him could not be an ‘industrial dispute’ under Section 2(k).34 (iii) The third view adopted a middle course, namely that ‘concerned person’ need not necessarily be a ‘workman’ within the meaning of the Act; it was enough if the present workmen of the employer were interested in such a person and the employer had the capacity to grant the requested demand. The supporters of this view emphasized that merely because such a dispute would become an ‘industrial dispute’, it did not follow that the demand would be accepted. The construction of the word ‘any person’ came up for consideration before the Supreme Court in Assam Chah Karamchari Sangha v. Dimakuchi

Tea Estate.35 There, Mr Banerjee was appointed by the tea estate as an assistant medical officer, on three months’ probation. After 3 months, his services were terminated by the management after paying him one month’s salary in lieu of notice. The legality of the termination of service was questioned and the cause of the assistant medical officer was espoused by the workers’ union of tea estate. The government of Assam referred the dispute to the industrial tribunal about his reinstatement. The management raised a preliminary objection that the assistant medical officer was not a ‘workman’ and hence the industrial tribunal had no jurisdiction to adjudicate the question of reinstatement. The tribunal upheld the management’s plea. On appeal before the Supreme Court, a question arose whether the workmen of the tea estate can raise an industrial dispute regarding the termination of service of an assistant medical officer (who was not a workman of the Tea Estate. Justice S K Das, who wrote the majority judgement for the Court, while explaining the expression ‘any person’ in the definition clause held that it cannot mean anybody and everybody in this world. The expression according to his Lordship means: … a person in whose employment, or non-employment, or terms of employment or conditions of labour the workmen as a class have a direct or substantial interest with whom they have under the scheme of the Act, a community of interest. Our reason for so holding is not merely that the Act makes a distinction between workmen and non-workmen, but because a dispute to be a real dispute must be one in which the parties to the dispute have a direct or substantial interest. Can it be said that workmen as a class are directly or substantially interested in the employment, non-employment, terms of employment or conditions of labour of persons who belong to the supervisory staff and are, under the provisions of the Act, non-workmen and for whose representation the Act makes no particular provision? We venture to think that the answer must be in the negative. He further pointed out that though a dispute concerning a person who is not a ‘workman’ may be an ‘industrial dispute’ within the meaning of Section 2(k), having regard to the scheme, object and the provisions of the Industrial Disputes Act, 1947 the expression ‘any person’ in the definition clause must be read subject to two crucial limitations and qualification, namely: (i) the dispute must be a real dispute between the parties to the dispute (as indicated in the first two parts of the definition clause) so as to be capable of

settlement or adjudication by one party to the dispute giving necessary relief to the other, and (ii) the persons regarding whom the dispute is raised must be one in whose employment, non-employment, terms of employment or conditions of labour (as the case may be) the parties to the dispute have direct or substantial interest. He then observed: In the absence of such interest, the dispute cannot be said to be a real dispute between the parties. Where the workmen raise a dispute as against their employer, the person regarding whose employment, non-employment, terms of employment or conditions of labour the dispute is raised need not be the ‘workmen’ but workmen as a class have a direct or substantial interest. The Court in its majority judgement accordingly held that the medical officer was not a ‘workman’ because he could not be held to have any community of interest with the other members of the union to justify the industrial dispute being raised with regard to his unemployment. The aforesaid majority view was reaffirmed by the larger bench of the Supreme Court in Workmen of Dahingeapar Tea Estate v. Dahingeapar Tea Estate36 and was reiterated in Kays Construction Co. Ltd v. Its Workmen.37 In the former case, a tea estate was sold as a going concern and the purchaser continued to employ the labour and some other members of the staff of the vendor. Under the agreement of sale, an option was given to the purchaser to continue to employ the members of the staff. It also made the vendor liable for the claims made by the members of the staff not retained in service by the purchaser. The claims of the members of the staff not retained in service by the vendee tea estate was raised by the workmen of the vendee tea estate. A question arose whether the dispute raised by such workmen regarding the employment of rest of the staff was an ‘industrial dispute.’ Justice S K Das (who wrote the majority view in Dimakuchi Tea Estate supra) delivering the judgement for the Court applied the test laid down in Dimakuchi case and held that such a dispute was an ‘industrial dispute’. In the latter case, the business of M/s Kays Construction Co. was taken over by a private company called M/s Kays Construction Co. (Pvt) Ltd. The successor company had the proprietor, his wife and manager of the vendor company as its directors. The transferee employer refused to employ certain workmen of the transferrer employer. The workmen of the transferee employer raised a dispute regarding the erstwhile co-employees of

the transferrer employer. It was held that a dispute which validly gave rise to a reference under the Industrial Disputes Act need not necessarily be a dispute directly between an employer and his workmen. The Court further held that the definition of the expression ‘industrial dispute’ was wide enough to cover a dispute raised by the workmen in regard to the non-employment of others who may not be the workmen at the material time. The application and interpretation of ‘any person’ again came up for consideration of the Supreme Court in Standard Vacuum Refining Co. of India Ltd v. Their Workmen.38 In this case, regular workmen of the company raised an industrial dispute relating to contract labour. The dispute was that the workers of the contractor (who in effect were doing the work of the company) unlike regular workmen of the company, were getting low wages and were not provided any security of tenure. The regular workmen who raised their dispute, therefore, wanted that the contract system should be abolished and the contractors be considered as workmen of the company. Following Dimakuchi Tea Estate (supra), the Supreme Court held that the dispute was an ‘industrial dispute’ because: (i) the regular workmen of the company had a community of interest with the contractor’s workers (who were, in effect, working for the same employer), (ii) the workmen had substantial interest in the subject-matter of the dispute of contractor’s workers in the sense that the class to which they belong (namely workmen) was substantially affected thereby and (iii) the company could give relief in the matter. Again in Bombay Union of Journalists v. The Hindu39, the cause of a working journalist was taken up by a trade union of his profession, but not by other journalists under the employment of that particular branch office of the Hindu, in which he was employed. The Supreme Court, while determining the scope of ‘any person’ demonstrated how the test of ‘direct and substantial control’ could be applied. Justice Shah observed: The principle that the persons who seek to support the cause of a workman must themselves be directly and substantially interested in the dispute in our view applied to this class of cases also; persons who are not employees of the same employer cannot be regarded as so interested that by their support they may convert an individual dispute into an industrial dispute. This application of the test only confirms the fears expressed by Justice Sarkar of the Supreme Court in his dissenting judgement in Dimakuchi Tea Estate case.40 Adverting later to the fact that the Act is dealing with a new

concept, that of relations between employer and employee or between capital and labour—he sounded a warning to bear in mind that the concept is undergoing a ‘fast change’ from day-to-day. He observed: The numerous and radical amendments made in the Act since it came on the statute book not so long ago, testify to the fastchanging nature of the concept. Bearing all these things in mind, I find it almost impossible to define adequately or with any usefulness an interest which will serve the purposes of the Act. I feel that an attempt to do so will introduce a rigidity which will work harm and no good. Nor does it, to my mind, in any manner help to define such interest by calling it direct and substantial. He added: It is enough to assume that as normal men, workmen would not raise a dispute or threaten industrial peace on account of it unless they are interested in it … It is not a condition of an industrial dispute that workmen must be interested in it and no question of interest falls for decision by a court if it can be called upon to decide whether a dispute is an industrial dispute or not. In All India Reserve Bank Employees’ Association v. Reserve Bank of India41 the Court coined a new phrase ‘vitally interested’ to determine the scope of ‘any person’ in Section 2(k). In this case, a question arose whether the ‘workmen’ belonging to class III (who drew less than ₹500 per month) of the Reserve Bank of India were entitled to raise the dispute in respect of Class II employees who were doing supervisory nature of duties and drawing more than ₹500 per month and were excluded from the ambit of ‘workmen’. The Supreme Court, after referring to the first excerpt (cited earlier by the author) in Diniakuchi Tea Estate supra, added: It may, however, be said that if the dispute regarding employment, non-employment, terms of employment or conditions of labour of non-workmen in which workmen are themselves vitally interested, the workmen may be able to raise an industrial dispute. Workmen can, for example, raise a dispute that a class of employees not within the definition of workmen should be recruited by promotion from workmen. The workmen can also raise a dispute about the terms of the their own

employment though incidentally the terms of employment of those who are not workmen is involved. But workmen cannot take up a dispute in respect of a class of employees who are not workmen and (in whom workmen) have no direct interest of their own. What direct interest suffices, is a question of fact but it must be a real and positive interest and not fanciful or remote. The Court also rejected the management’s contention that the tribunal had no jurisdiction to adjudicate in respect of the dispute between it and those of its employees who fell within the purview of ‘workmen’. Observed Justice Hidayatullah: It follows, therefore, that the national tribunal was in error is not considering the claims of Class II employees whether at the instance of members drawing less than ₹500 as wages or at the instance of those lower down in the scale of wages in excess of ₹500 per month at any stage were not within the jurisdiction of tribunal or that government could not make a reference in such a contingency. The aforesaid issue once again came up for consideration in Workmen v. Greaves Cotton Ltd42 in which it was held : It would, therefore, appear that the consistent view of this court is that non-workmen as well as workmen can raise a dispute in respect of matter affecting their employment, conditions of service, etc., where they have a community of interest, provided they are direct and not remote. It is submitted that the aforesaid observation does not correctly reflect the law stated in earlier decisions of the Supreme Court. In none of the aforesaid decisions of the Supreme Court, is it stated that non-workmen can raise a dispute in respect of matters affecting their employment, unemployment, terms of employment or conditions of labour where they have community of interest. Greaves Cotton Ltd, poses a question as to what would happen if none at all or all the ‘workmen’ have become non-workmen either during the pendency or at the time or adjudication. Does the dispute survive? The Court answered it in negative. Observed Justice Jagamohan Reddy: … if there are no workmen of the category with respect to whom the dispute has been referred, the tribunal cannot be called upon

to prescribe a wage structure for non-existing workmen, nor does it have the jurisdiction to do so.43 We are inclined to agree with the aforesaid view. It may, however, be added that the ‘direct or substantial interest’ test to limit the horizons of the expression ‘any person’, has not been uniformly applied. While the workman has been said to be substantially interested in the subject matter of contractor’s employees44, he is not held to be so interested in case of ‘doctors’45 or ‘supervisors’46 who were not ‘workmen’ but employees of the same employer. Again the ‘workmen of the transferee company are said to have a direct or substantial interest in the dispute of unemployment by the transferee employer of the erstwhile co-employees of the transferor employer.47 Quite apart from this, the application of the aforesaid test is not in conformity with the statement that ‘persons who are not employees of the same employer cannot be regarded as so interested, that by their support they may convert an individual dispute into an industrial dispute’.48 In Bongaigaon Refinery & Petrochemicals Ltd v. Samijuddin Ahmed,49 a question arose whether a person who had been issued an offer of appointment which was withdrawn before he could join on knowing that he had suppressed material facts and who raised a dispute about his non-employment could fall within the meaning of ‘any person’ under Section 2(k) of the Industrial Disputes Act. The Court answered the question in negative and held that the reference of the dispute under Section 10 of the Act was wholly unwarranted and uncalled for. The present case did not satisfy the test laid down in Dimakuchi Tea Estate so as to warrant the validity of the reference being upheld. It rejected the contention of the respondent that his case fell within the meaning of ‘any person’ even if he was not a ‘workman’ stricto sensu and held that ‘any person’ cannot be read without limitation. In a case where employer-employee relationship never existed and can never possibly exist cannot be the subject matter of dispute between employer and workmen. Accordingly, the Court set aside the judgement of the division bench of the High Court and restored the judgement of the single judge of the High Court.

II. INDIVIDUAL DISPUTE A. Judicial Legislation Is a dispute between an individual workman and his employer an ‘industrial

dispute’ under Section 2 (k) of IDA? This question has evoked considerable conflict of opinion. Prior to the Supreme Court decision in Central Provinces Transport Services v. Raghunath Gopal Patwardhan50 disclosed three different views as to the meaning of the expression ‘industrial dispute’. They are (i) a dispute between an employer and single workman cannot be an ‘industrial dispute’51 (ii) it can be an industrial dispute52 and (iii) it cannot per se be an industrial dispute but may become one if taken up by a trade union or a number of workmen.53 In Central Provinces Transport Services Ltd v. Raghunath Gopal Patwardhan54, though the question which directly arose, was whether a dismissed worker was an employee within the meaning of Section 2 (10) of the Central Provinces and Brar Industrial Disputes Settlement Act, 1947, the Supreme Court considered the scope of ‘industrial dispute’ as defined in Section 2(k) of the Industrial Disputes Act. The Court, after referring to the divergent opinions expressed by tribunals and courts as to its applicability in the case of a dispute between employer and a single workman, observed: The preponderance of judicial opinions is clearly in favour of the last of the three views stated above, and there is considerable reason behind it. Notwithstanding that the language of Section (2) (k) is wide enough to cover a dispute between an employer and single employee, the scheme of the Industrial Disputes Act does appear to contemplate that the machinery provided therein should be set in motion, to settle only disputes which involve the rights of workmen as a class and that a dispute touching the individual rights of a workman was not intended to be the subject of an adjudication under the Act, when the same has not been taken up by the union or a number of workmen. Although the question did not arise directly, the Supreme Court in D N Banerjee v. P R Mukherjee55 discussed the scope of ‘industrial dispute’ (in the context of individual dispute) and observed that the words: Convey the meaning to the ordinary mind that the dispute must be such as would affect large groups of workmen and employers ranged on opposite sides… But at the same time, having regard to the modern conditions of society where capital and labour have organized themselves into groups for the purpose of fighting their disputes and settling them on the basis of the

theory that union is strength, and collective bargaining has come to stay, a single employee’s case might develop into an industrial dispute, when as often happens, it is taken up by the trade union of which he is a member and there is concerted demand by the employees for redress. The aforesaid issue figured directly in Newspapers Ltd v. State Industrial Tribunal56. In this case, Tajammal Hussain, a linotypist was dismissed by the Newspapers Ltd on the ground of incompetence. His case was neither taken up by the union of workers of the establishment nor by any union of allied or similar trade. His case was, however, taken up by the U P Working Journalists Union, with which the employee had no concern. The government referred the dispute to the industrial tribunal for adjudication. The tribunal ordered reinstatement. The appellate tribunal and the High Court, successively affirmed. Thereupon, the management preferred an appeal to the Supreme Court. Justice Kapoor who delivered the judgement for the Court made the following significant observation: The case of respondent No. 3 was not taken up by union of the workers of the appellant company nor by any of unions of workmen employed in similar or allied trades but the U P Journalists Union, Lucknow, with which respondent No. 3 had no connection, took the matter to the Conciliation Board, Allahabad. The Court accordingly held that Tajammal Hussain could not be termed as workmen (in the plural) nor could U P Working Journalists Union be called ‘his union’ nor is there any indication that the individual dispute had been transformed into ‘industrial dispute’. Bombay Union of Journalists v. The Hindu,57 however, has tried to further curtail the scope of ‘industrial dispute.’ In this case, the dispute of the workman was taken up by the Bombay Union of Journalists of which union the workman was a member. The Bombay Union of Journalists was a union not of employees of one establishment but of employees of the entire industry of journalism in Bombay. None of the employees of the Hindu were its members. The industrial tribunal, on these facts, held that the dispute was merely an ‘individual dispute’ and not an ‘industrial dispute’. The Supreme Court affirmed the decision. Justice Shah who delivered the judgement for the Court observed: The dispute, in the present case, is prima facie an ‘individual

dispute.’ In order that it may become an industrial dispute, it had to be established that it had been taken up by the union of the employees of the ‘The Hindu’ Bombay or by an appreciable number of employees of the ‘The Hindu’ Bombay. Justice Shah rationalized his decision on the basis of an earlier decision of the Supreme Court and observed: In Workmen of Dimakuchi Tea Estate v. The Management of Dimakuchi Tea Estate, this Court held by a majority that the two tests of an industrial dispute as defined by Section 2(k) of the Industrial Disputes Act, 1947, must, therefore be: (1) the dispute must be a real dispute capable of being settled by relief given by one party to the other, and, (2) the person in respect of whom the dispute is raised must be one in whose employment, non-employment, terms of employment, or conditions of labour (as the case may be), the parties to the dispute have a direct or substantial interest and this must depend on facts and circumstances of each particular case. In that case, certain employees sought to raise a dispute about a person who was not a workman. In the present case, members of the union who were not workmen of the employer against whom the dispute was sought to be raised, seek by supporting the dispute to convert what is prima facie an individual dispute into an industrial dispute. The principle that the persons who seek to support the cause of the workmen must themselves be directly and substantially interested in the dispute, in our view, applies to this class of cases also: persons who are not employees of the same employer cannot be regarded as so interested, that by their support they may convert an individual dispute into an industrial dispute. The mere support to his cause by the Bombay Union of Journalists cannot, therefore, assist the claim of Salivateeswaran so as to convert it into an industrial dispute. The aforesaid requirements resulted in curtailing the growth of industrywide unions and runs counter to the decision in Newspaper Ltd supra. However, the Supreme Court in Workmen of Dharampal Prem Chand v. M/s Dharampal Prem Chand58 relaxed the requirement that only the union of the employees of the same employer against whom demands are made, can raise an industrial dispute59. Thus the Court, by distinguishing process impliedly overruled the

decision in Bombay Union of Journalists v. The Hindu supra. The firm dismissed its 18 workmen. The Mercantile Employees Association (which was the employees’ union) of which the dismissed workmen were members took up the cause of these dismissed workmen. A contention was raised that besides the 18 dismissed workmen, no other workman of the employer was the member of the said association and as such the association was not authorized to raise an industrial dispute. Rejecting the contention, the Supreme Court observed: … It is conceivable that the workmen of an establishment have no union of their own, and some or all of them join the union of another establishment belonging to the same industry. In such a case, if such a union takes up the cause of the workmen working in an establishment which has no union of its own, it would be unreasonable to hold that the dispute does not become an industrial dispute because the union which sponsored it is not the union exclusively of the workmen working in the establishment concerned… In some cases, the union of workmen working in the one industry may be competent to raise a dispute about the wrongful dismissal of an employee engaged in an establishment belonging to the same industry where workmen in such an establishment have no union of their own and an appreciable number of such workmen had joined such other union before their dismissal. Earlier, the Court observed: It is well known that in dealing with industrial disputes, industrial adjudication is generally reluctant to lay down any hard and fast rule or adopt any test of general or universal application. The approach of industrial adjudication in dealing with industrial disputes had necessarily to be pragmatic, and the tests which it applied and the considerations on which it relied would vary from case to case and would not admit any rigid or inflexible formula… The object of trade union movement is to encourage the formation of larger and bigger unions on healthy and proper trade union lines, and this object would be frustrated if industrial adjudication were to adopt the rigid rule that before any dispute about wrongful dismissal can be validly referred under Section 10 (1) of the Act, it should receive the support of the union consisting exclusively of the workmen working in the

establishment concerned. The question again came up for consideration in Workmen of Indian Express Ltd v. Management of Indian Express Ltd.60 In this case, a question arose whether the cause of two workmen in a particular establishment in an industry could be sponsored by Delhi Union of Working Journalists, which was not a union of workmen of the establishment but a union in similar or allied trade. Dealing with the contention, the Supreme Court observed: … where the workmen of an establishment have no union of their own and some or all of them have joined a union of another establishment belonging to the same industry, if such a union takes up the cause of the workmen working in an establishment which has no union of its own, the dispute would become an industrial one if such a union can claim a representative character in a way that its support would make the dispute an industrial dispute. Another principle laid down by the Supreme Court in M/s Western India Match Co. Ltd v. Western India Match Company Workers’ Union61 is that the parties to the reference being the employer and his employees, the test must necessarily be whether the dispute referred to adjudication is one in which the workman and substantial section of those who have a direct and substantial interest even though such a dispute relates to a single workman. The Supreme Court held that an ‘individual dispute’ may be converted into an industrial dispute by the workmen espousing it on the ground that they have community of interest and are directly or substantially interested in the employment, nonemployment or conditions of work of the concerned workmen. In J H Yadav v. M/S Forbes Gokak62, the appellant who was employed by the respondent, claimed promotion as a clerk. When this was not granted, the appellant raised an industrial dispute. The tribunal held that in view of the evidence given by the general secretary and the documents produced, it was clear that the appellant's cause had been espoused by the union which was one of the unions of the respondent employer. On the merits, the tribunal accepted the appellant's contentions that employees who were junior to him have been promoted as clerks. The award of the industrial tribunal was challenged by the respondent by way of a writ petition. A single judge dismissed the writ petition. The respondent being aggrieved, filed a writ appeal before the High Court. The High Court, while construing Section 2(k) of the Industrial Disputes Act, 1947, came to the conclusion that (i) an individual dispute is not an industrial dispute

unless it directly and substantially affects the interest of other workmen, (ii) an individual dispute should be taken up by a union which has representative character or by a substantial number of employees before it can be converted into an industrial dispute neither of which had happened in the present case, (iii) there was nothing on record to show that the appellant was a member of the union or that the dispute has been espoused by the union by passing any resolution in that regard. On appeal, the Supreme Court held that in the present case, it was not questioned that the appellant was a member of the Gokak Mills Staff Union. Nor was any issue raised that the union was not of the respondent establishment. The objection as noted in the issues framed by the industrial tribunal was that the union was not the majority union. The Court in view of its earlier decision in Dharam Pal's case, held that the objection was rightly rejected by the tribunal and wrongly accepted by the High Court. The aforesaid decisions indicate that individual dispute per se is not ‘industrial dispute’ unless it is espoused by: (i) trade union or (ii) appreciable number of workmen. It is, therefore, necessary to examine the aforesaid requirement in details. 1. Requirement of Appreciable Number: It has been seen that courts insist that in order to convert an individual dispute into ‘industrial dispute’, the dispute must be espoused by ‘appreciable number’ either of the entire labour force in the establishment or at least in a particular section thereof to which the dispute relates. But courts at the same time have admitted that the expression ‘appreciable number’ does not necessarily mean majority of workmen in the establishment or, indeed, even in the section in which the aggrieved workman was employed. But then, they have also declined to categorically delineate the limits of that illusive requirement. Thus, the task of defining the expression has been left for case to case determination. Thus in Workmen v. M/s Dharampal Prem Chand63, out of 45 employees, 18 were dismissed. There was no union of workmen. It was held that they could raise a dispute by themselves. In Workmen of Indian Express Newspaper v. Management64, 31 out of the total 68 working journalists of the union in the establishment espousing the cause met the requirement of ‘appreciable number’. It was also held that even if the number of working journalists was taken to be 131, the representation of 25 per cent could be an ‘appreciable number’. Similarly, in Workmen v. Rohtak General Transport Company65, five out of 22 workmen sponsoring the union were held to be ‘appreciable number’. But, in State of Punjab v. Gondhara Transport (P) Ltd66, espousal of dispute by five out of 60 workmen of the establishment was held not

to be an ‘appreciable number.’ From these decisions, it is evident that there is no uniformity as to what amounts to ‘appreciable number’. 2. Requirement of Dispute Being Sponsored by Trade Unions: Notwithstanding the decision in Bombay Union of Journalists v. The Hindu67 the Supreme Court has held that in order to convert an individual dispute into ‘industrial dispute’, it must be taken up by a union of workers of the establishment and where there is no such union, it may be sponsored by any of the unions of workmen employed in similar or allied trades.68 The union of the plant may even be a minority union.69 Further, the sponsoring union need not be a registered or a recognized trade union.70 The aforesaid principle was laid down in Newspapers Ltd v. U P State Industrial Tribunal71 and State of Bombay v. Kripa Shankar Jaiswal.72 In the former case, the cause of certain retrenched workmen was espoused by an unregistered body known as Leader Press Karamchari Sangh. The government referred the dispute to the industrial tribunal for adjudication. The tribunal directed the employer to reinstate the said workmen. On dismissal of the writ petition, the management filed an appeal wherein it was contended before the Supreme Court that the association which sponsored the cause of the concerned workmen was an unregistered body and, therefore, the reference was invalid. Rejecting the contention Justice Gajendragadkar, speaking for the Court held, that ‘it is not necessary that a registered body should sponsor a workman’s case to make it an industrial dispute. Once it is shown that a body of workmen, either acting through their union or otherwise, had sponsored a workman’s case, it becomes an industrial dispute.’ In the latter case, the respondent was prosecuted under Section 29 for not carrying out the terms of settlement arrived at, between him and Mankatha Distillery Panchayta Union. The defence was that the union was neither a registered nor a recognized union. The Patna High Court held that lack of registration or recognition of trade union incapacitated the union from raising an industrial dispute, and consequently there could not be a valid settlement arrived at in the course of conciliation proceedings. The respondent was accordingly acquitted. The Supreme Court, however, took the contrary view: It would be an erroneous view if it were said that for a dispute to constitute an industrial dispute, it is a requisite condition that it should be sponsored by a recognized union or that all the workmen of an industrial establishment should be parties to it. A dispute becomes an industrial dispute even where it is sponsored

by a union which is not registered as in the instant case or where the dispute raised is by some of the workmen because in either case, the matter falls within Section 18 (3) (a) and 18 (d) of the Act. The aforesaid view was reaffirmed in Pradip Lamp Works v. Its Workmen.73 From the aforesaid decision, it is evident that the sponsoring union may be (i) unregistered (ii) unrecognized or (iii) minority. This view is valid because Trade Unions Act, 1926 does not provide either for compulsory registration of trade union or for recognition of trade union. This view would require consideration when the provisions for compulsory recognition of trade union would be incorporated under the Trade Unions Act. There is yet another issue, namely, whether formal authorization of a trade union to sponsor the cause of aggrieved workmen is necessary. The high courts are divided on the issue whether the burden of proof lies upon the union to prove that it had the authority to represent the cause of individual workmen so as to convert an individual dispute into an industrial dispute. The Madras74, Andhra Pradesh75, Mysore76, Calcutta77, Madras78, Patna, Kerala and Bombay High Courts have taken the view that when a dispute of a workman or workmen is espoused by a union and its authority is challenged by the employer, it must be proved by the union concerned, by appropriate resolution being passed by the general body of the union or otherwise that it had the authority to take up the cause of aggrieved workmen.79 On the other hand, the Punjab High Court took the opposite view, namely, there must be a presumption that when the union takes up the cause of the aggrieved workmen, it has the support of the members of the union and then it is for the company to prove that facts are otherwise and that the members of the union are not behind it in the action. The Supreme Court in Bombay Union of Journalists v. The Hindu80 seems to be inclined to affirm the former view of majority of the high courts when it said that ‘apart from the statement that 225 members of the union requested its secretary to take up the cause of Salivateeswaran, there was nothing to show that the union as such had passed any resolution or authorized its secretary to take up Salivateeswaran’s cause and to raise an industrial dispute thereon’. It is submitted that the Punjab High Court’s view seems to be more convincing. To this it may be added that the Court may well look into the constitution of the union to ascertain whether the president/secretary had the authority to do what they have done.

It has also been held that the registration of trade union concerned under the Trade Unions Act is not conclusive proof of its real existence or the authority to represent the workmen on reference before the tribunal. Furthermore, negotiations by some officials of the union with the workmen for conciliation by executing certain documents on behalf of the workmen prior to the reference are no conclusive proof of the authority of the union to represent the cause of aggrieved workmen.81 3. Effect of Subsequent Withdrawal of Support by Workmen: It has now been settled through the Supreme Court decision82 that subsequent withdrawal of support by the workmen of a cause previously espoused by them would not take away the jurisdiction of an industrial tribunal. Likewise, if the dispute was in its inception an individual dispute and continued to be such till the date of reference by the government, it would not be converted into an industrial dispute by support subsequent to the reference even if workmen are interested in the dispute. This principle is also applicable in subsequent withdrawal of the case by a union. Thus, it has been held that the dispute with regard to the dismissal does not cease to be an industrial dispute after the union ceased to sponsor his case because if there was an industrial dispute at the time of reference, it would not cease to be one merely because the claim of some of the dismissed employees was settled by mutual agreement.83 4. Form of Espousal: The Supreme Court in J H Yadav v. M/S Forbes 84 Gokak held that as far as espousal is concerned, there is no particular form prescribed to effect such espousal. But there is no doubt that the union must normally express itself in the form of a resolution which should be proved if it is in issue. However, proof of support by the union may also be available aliunde. It would depend upon the facts of each case. 5. Time for the Espousal of the Dispute: In Western India Match Co. v. Workers’ Union85, the Supreme Court held that the test is whether the dispute referred to adjudication is one in which the workmen or a substantial section of them have a direct and substantial interest even though it relates to a single workman. Such an interest on the part of workman must exist on the date of reference and not necessarily on the date on which the cause occurs, as otherwise an individual dispute cannot become an industrial dispute. 6. Institution of Legal Proceedings by Legal Heir of Deceased Workman: In Smt. Anjilamma v. Labour Court86, the Andhra Pradesh High Court held that the legal heirs of deceased workmen have locus standi to pursue a dispute against dismissal of deceased workmen either by continuing the

pending proceedings or by instituting fresh proceedings. 7. Industrial Dispute Survives even after Death of Workman: The Supreme Court in Rameshwar Manjihi v. Sangramgarh Colliery87 held that industrial dispute survives even after the death of workmen and the maxim actio personalis moritur cum persona does not apply. Accordingly, the proceedings before the tribunal may be continued by the legal heir/representative of the deceased workmen. 8. An Appraisal: A survey of the aforesaid decisions indicates that the following tests have been applied by the Court in determining as to when an individual dispute would be converted into an ‘industrial dispute’. (a) If the cause of aggrieved workmen is taken up by appreciable number of workmen or the union of workmen (either registered or not or whether recognized or unrecognized or whether majority or minority union) or in the absence of any union of workmen by union of similar or allied trade and there is a concerted demand by the workmen for redress. (b) If the workmen espousing it have a community of interest and are directly or substantially interested in the employment, non-employment, terms of employment or conditions of labour of the concerned workman/workmen. (c) If such an interest on the part of workman or substantial number of workmen exists on the date of reference and need not necessarily exist on the date on which the cause occurs. (d) A dispute would not cease to be an ‘industrial dispute’ on subsequent support or withdrawal of a cause of individual dispute previously espoused by a workmen or union. The net effect of the aforesaid decisions is that an individual worker, unsupported by ‘appreciable number’ of workmen or the union, has no remedy under the Industrial Disputes Act, 1947, particularly when no dispute is pending before authorities under the Industrial Disputes Act, 1947.

III. LEGISLATIVE RESPONSE : INSERTION OF SECTION 2A In the preceding section, it has been seen that before the introduction of Section 2A as a result of judicial legislation, an individual workman who was discharged, dismissed, retrenched or whose service was otherwise terminated or

who had been transferred, suspended or was subject to any other punishment, had no remedy under the Industrial Disputes Act, unless his case was sponsored by his fellow workmen or by a trade union. In such a situation, he had been left with no alternative but to approach the civil court and involve himself in lengthy and expensive civil remedy. Section 2A of the Industrial Disputes (Amendment) Act, 1965 attempts to mitigate some of the hardships caused as a result of judicial pronouncements.88 Section 2A came into force on 1 December 1965. Section 2A provides: where an employer discharges, dismisses, retrenches or otherwise terminates the services of an individual workman, any dispute or difference between an individual workman and his employer connected with, or arising out of such discharge, dismissal, retrenchment or termination shall be deemed to be an ‘‘industrial dispute’ notwithstanding that no other workman nor any union of workmen is a party to the dispute. The net effect of Section 2A is that by legislative action, such a dispute is deemed to be an industrial dispute even where it is not espoused by a trade union or appreciable number of workmen.89 Thus, the result of insertion of Section 2A was that, what was not an ‘industrial dispute’ as per the interpretation of the Supreme Court, would be deemed to be an ‘industrial dispute’. But there is a difference between an individual dispute which is deemed to be an industrial dispute under Section 2A of the Industrial Disputes Act, 1947 on one hand and an industrial dispute espoused by the union in terms of Section 2(1) of the said 1947 Act. An individual dispute which is deemed to be an industrial dispute under Section 2A concerns discharge, dismissal, retrenchment or termination whereas an industrial dispute under Section 2(k) covers a wider field. It includes even the question of status. This aspect is relevant for the purposes of deciding this case90. In Radhey Shyam v. State of Haryana91, it has been held after considering various judgments of the Supreme Court that Section 2A contemplates nothing more than to declare an individual dispute to be an industrial dispute. It does not amend the definition of industrial dispute set out in Section 2(k) of the Industrial Disputes Act, 1947. Section 2A does not cover every type of dispute between an individual workman and his employer. Section 2A enables the individual worker to raise an industrial dispute, notwithstanding that no other workmen or union is a party to the dispute. It applies only to disputes relating to discharge, dismissal, retrenchment or termination of service of an individual workman. It does not cover other kinds of disputes such as bonus, wages, leave facilities, etc.92 and does not apply in case of dispute arising from the transfer or promotion or the

refusal or failure to promote the employee or any punishment (excluding dismissal, discharge, retrenchment or other termination of service) imposed on such employee or dispute or difference as to money due to such employee from the employer or as to any amount at which a benefit, which is capable of being computed in terms of money, is to be computed. Thus, in cases not covered by Section 2A, the principle laid down by the Supreme Court as to when individual dispute becomes ‘industrial dispute’ is still applicable and thereby causes hardship to the individual workman. This is not a very happy situation. It is, therefore, necessary that the scope of the application of Section 2A should be enlarged so as to include certain other causes stated above within its purview. It may be relevant to note that Section 2 (15) of the Industrial Relations Bill, 1978, which defines ‘individual dispute’, has widened the coverage of ‘individual dispute’, by bringing within its ambit additional causes of dispute relating to transfer, promotion and computation of money due. However, the Bill, we have stated elsewhere, lapsed after the dissolution of the Parliament. The aforesaid section raised four important issues: (i) What is the significance of the word ‘deemed’ in Section 2A? (ii) What is the significance of the expression ‘connected with or arising out of’ in Section 2A? (iii) Is Section 2A a constitutionally valid provision? (iv) Can a retrospective effect be given to Section 2A? These questions have been the subject matter of judicial controversy. 1. Significance of the Word ‘Deemed’: It has now been established through the Supreme Court decision in Chemicals and Fibres of India Ltd v. D S Bhoir93 and Rustom and Hornsby (P) Ltd v. T B Kadam that ‘Section 2A is, in effect, a definition section. It provides, in effect that what would not be an industrial dispute’ as defined in Section 2(k) and as interpreted by the Supreme Court as to what would be deemed to be an ‘industrial dispute’ in certain specified cases. The Court further said that the definition could as well have made part of clause (k) of Section 2 instead of being put as a separate section. 2. Scope of the Expression ‘Connected with, or Arising out of Discharge, Dismissal, Retrenchment or Termination’: Section 2A is not limited to bare discharge dismissal, retrenchment or termination of the service of an individual workman but any dispute or difference between the workmen and his employer ‘connected with’ or arising out of discharge, dismissal, retrenchment or termination will be deemed to be an industrial dispute,94 A thing is said to arise out of another when there is close nexus between the two and one thing flows out of another as a consequence.95

In J N K Pradhan v. Industrial Tribunal, the Court was called upon to decide whether the claim for gratuity was connected with or arose out of discharge, dismissal, retrenchment or termination of service. The Court, however, observed that whether he would be entitled for gratuity under the Orissa Shops and Commercial Establishment Act is not for us to decide at this stage. This is a matter for the tribunal to determine on examining the merits of the dispute. 3. Constitutionality of Section 2A: After the insertion of Section 2A in the Industrial Disputes Act, 1947, through 1965 Amendment, the management challenged the constitutional validity of the section. They argued that (i) the Parliament had no power to convert an ‘individual dispute’ into an ‘industrial dispute’, (ii) the 1965 Amendment by which Section 2A was inserted was repugnant to the legislative scheme of the IDA and (iii) Section 2A should be struck down as it was violative of Article 14 of the Constitution. While Delhi,96 Punjab and Haryana,97 Madras98 and Mysore High Courts99 upheld the constitutionality of Section 2A, Calcutta High Court100 declared the provision to be ultra vires the Constitution. The obiter of the Supreme Court101 decision, however, indicates that it upheld the validity of Section 2A. Let us now turn to examine the judicial approach to this issue. 4. No Retrospective Effect: The Supreme Court in Rustom and Hornsby (P) Ltd v. T B Kadam102 held that Section 2A provides in effect that what would not be an industrial dispute as defined in Section 2(k) as interpreted by this Court could be deemed to be an industrial dispute in certain circumstances. There is, therefore, no question of giving retrospective effect to that section in making the reference which resulted in the award under consideration. When the section uses words where any employer discharges, dismisses, retrenches or otherwise terminates the services of an individual workman, it does not deal with the question as to when that was done. The Court therefore ruled that if ‘there was an industrial dispute or an industrial dispute was apprehended, even though the facts giving rise to that dispute might have arisen before the reference was made, the reference would still be valid.’

IV. NO TIME LIMIT PRESCRIBED In Abdul Khalil St. Bharu v. Commission of Labour, Nagpur,103 a workman was dismissed after a departmental inquiry on 5 February 1986. The first and

second appeals dated 19 December 86 and 9 January 1988 respectively were dismissed. An application was made under Section 2A on 29 August 1989. It was communicated to the applicant that as the application was made after two and a half years, hence closed on 16 October 1988. A writ petition was filed in 1990 in the High Court of Bombay. The Court held that (i) there is no time limit prescribed under Section 2A or section 12, (ii) the application cannot be said to be stale or grossly belated, (iii) closing of the proceedings cannot be sustained and (iv) conciliation officer is duty bound under Section 12 to proceed for the purpose of bringing settlement and if his efforts fail, then he is required to submit failure report.

V. RECOMMENDATION OF THE [SECOND] NATIONAL COMMISSION ON LABOUR The [Second] National Commission on Labour has recommended that all matters pertaining to individual workers, be it termination of employment or transfer or any other matter be determined by recourse to the grievance redressal committee, conciliation and arbitration/adjudication by the labour court. Section 2A of the Industrial Disputes Act, 1947 may be amended. Individual disputes may be taken up by the affected workers themselves or by TU’s and the collective disputes by the negotiating agent or an authorized representative of the negotiating college for resolution. A union which does not have at least 10 per cent members amongst the employees in an establishment should have no locus standi in that establishment. A union which has at least 10 per cent members amongst the employees in a unit should only have the right to represent individual workers in various matters such as conciliation, arbitration or adjudication and a provision in this regard may be made in Section 36 of the Industrial Disputes Act. The appropriate government may also approach the Labour Relations Commission on any individual or collective dispute in any establishment. All disputes, claims or complaints under the law on labour relations should be raised within one year of the occurrence of the cause of action.

VI. REMEDY TO INDIVIDUAL WORKMAN UNDER SECTION 2A PRIOR TO 2010 AMENDMENT

As observed in previous editions of this book and even in the first edition (1984), even assuming that the scope of Section 2A (prior to 2010) is adequate, it did not confer any right on the individual workman to raise disputes connected with discharge, dismissal, retrenchment or otherwise termination of service. The Act, however, conferred such rights upon the appropriate government alone and in the exercise of this discretion, the appropriate government may or may not refer such a dispute for adjudication. This power was likely to be abused. In view of this, it was felt that aggrieved individual workman as in case of Section 33A should be allowed to move directly to the labour court, tribunal or national tribunal. Our view is fortified by the view expressed by the Supreme Court which emphasized the need to amend Section 2A making it possible for an individual workman to seek redress in an appropriate forum regarding illegal termination of service which may take the form of dismissal, discharge, retrenchment, etc., or modification of punishment imposed in domestic inquiry. An amendment of the Central Act introducing such provisions will make the law simpler and will also reduce the delay in adjudication of industrial disputes104. This, along with the recommendations of the Second National Commission on Labour, led to the amendment of Section 2A in 2010.

VII. AMENDMENT OF SECTION 2A BY THE INDUSTRIAL DISPUTES (AMENDMENT) ACT, 2010 The Industrial Disputes (Amendment) Act, 2010105 has inserted new clauses (2) and (3) in Section 2A which are as follows: ‘(2) Notwithstanding anything contained in section 10, any such workman as is specified in sub-section (1) may make an application direct to the labour court or tribunal for adjudication of the dispute referred to therein after the expiry of 45 days from the date he has made the application to the conciliation officer of the appropriate government for conciliation of the dispute, and in receipt of such application the labour court or tribunal shall have powers and jurisdiction to adjudicate upon the dispute, as if it were a dispute referred to it by the appropriate government in accordance with the provisions of this Act and all the provisions of this Act shall apply in relation to such adjudication as they apply in relation to an industrial dispute referred to it by the appropriate

government. (3) The application referred to in sub-section (2) shall be made to the labour court or tribunal before the expiry of 3 years from the date of discharge, dismissal, retrenchment or otherwise termination of service as specified in sub-section (1).’ An analysis of the aforesaid amended provision reveals that a workman aggrieved by the order of dismissal, discharge, retrenchment or otherwise termination of service may directly make an application to the labour court or tribunal for adjudication of the dispute and the aforesaid labour court/tribunal is empowered to adjudicate such dispute as it were referred to it by the appropriate government. But, the two conditions must be satisfied before such application can be entertained: (i) Such application must be made after the expiry of 45 days from the date the aggrieved workman made the application to the conciliation officer of the appropriate government for conciliation of the dispute (ii) Such application must be made before the expiry of 3 years from the date of discharge, dismissal, retrenchment or otherwise termination of service.

The definition of ‘industrial dispute’ is taken from an (English) Act 1906 (6 Edw VII C47) and slightly modified. The definition ran: any dispute between employers 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. The definition only adds to the list of disputes ‘one between employers’. [See Madras Gymkhana Club Employees' Union v. Gymkhana Club, (1967) 2 LLJ 720, 729 (SC)]. Prior to 1947 the Trade Dispute Act, 1929, used the expression ‘trade dispute’. Section 2(j) of the Trade Dispute Act, 1929 defined ‘trade dispute’ to mean: any dispute or difference between employers and workmen and 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, which was borrowed from Section 8 of the (English) Industrial Courts Act, 1919. The scope of Section 2 (j) attracted the attention of the Royal Commission of Labour. The Commission suggested widening the coverage of the definition. The Trade Disputes (Amendment) Act, 1938, accordingly amended the definition of ‘trade dispute’ under the Trade Disputes Act, 1929 to include disputes between employers and employees, and at the same time provided for the omission of the following words ‘occurring between an employer and any of his workmen’ from Section 3 of the Trade Disputes Act, 1929.

The amended definition of ‘trade dispute’ was incorporated in the Industrial Disputes Act, 1947. 2 3 4 5 6 7

Madras Gymkhana Club Employees' Union v. Gymkhana Club, op. cit. 720–28. Workmen of Dikmakuchi Tea Estate v. Management of Dimakuchi Tea Estate, (1959) 1 LLJ 500 (SC). Sambhu Nath Goyal v. Bank of Baroda, (1978) 2 SCC. 353. (1978) 2 SCC. 353. Sindhu Resettlement Corporation Ltd v. Industrial Tribunal, (1968) LLJ 834. Id. at 839. The aforesaid view was followed in Fedders Lloyd Corporation (Pvt.) Ltd v. Lieutenant Governor, (1970) Lab. IC 421. In this case, Justice Deshpande speaking for the division bench of the Delhi High Court observed: a demand by the workmen must be raised first on the management and rejected by them before industrial dispute can be said to arise and exist and that the making of such a demand to the conciliation officer and its communication by him to the management, who rejected the demand is not sufficient to constitute an industrial dispute.

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Bombay Union of Journalists v. The Hindu. AIR 1963 SC 318: In T K Padamanabha Menon v. P V Kora, (1968) Lab. IC, 1134, the Kerala High Court held that no specific demand by the workmen was necessary to bring into existence an ‘industrial dispute’. Shambhu Nath Goyal v. Bank of Baroda, (1978) 2 SCC 353. (1984) 4 SCC 392 (SC). (1993) Lab. IC 99 at 102–03. Bangalore W C and Mills Co. v. Their Workmen, (1968) 1 LLJ 514 at 518. Madras Gymkhana Club Employees Union v. Madras Gymkhana Club, (1967) 2 LLJ 720. Conway v. Wade, (1909) AC 506, 517. There is no decided case in India on this subject. Western India Automobiles Association v. Industrial Tribunal, (1949) LLJ 245 (FC). Shankar Balaji Waje v. State of Maharashtra, (1961) 1 LLJ 119 (SC). Western Indian Automobiles Association v. Industrial Tribunal, (1949) LLJ 245. Ibid. See also Sindhu Resettlement Corporation Ltd v. LT., (1965) 2 LLJ 270 (Gujarat). M/s Altherton West and Co. Ltd v. Jute Mill Mazdoor Union, AIR 1953 SC 24. F L Corporation (P) Ltd v. Union of India, AIR 1970 Delhi, 60, 66. Bilash Chander v. Balmer Lawrie and Co. Ltd, AIR 1953 Calcutta 613. Indian Paper Pulb Co. Ltd v. Their Workmen, AIR 1949 FC 148; See also Madras Gymkhana Club, (1967) 2 LLJ 720. Cooperative Central Bank Ltd v. Addl LT, AIR 1970 SC 245. Shahadara (Delhi) Saharanpur Light Rly. Co. v. S S Railway Workers, AIR 1960 SC 945.

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33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51

Standard Vacuum Refining Co. of India Ltd v. Workmen, AIR 1960 SC 945. Express Newspapers (P) Ltd v. Workmen, AIR 1963 SC 569. Bata Shoe Co. v. D N Ganguly, AIR 1961 SC 1158. Kerala Rubber and Reclaims Ltd v. P A Sunny, (1989) Lab. IC 964 (Kerala). 1984 Lab. IC 1573 (SC). Tamil Nadu National Engineering Employees Union v: T I Cycles of India Ltd, (1994) Lab. IC NOC 21. (2001) 3 SCC 101. Kanpur Woolen Mills v. Kanpur Mazdoor Congress, (1950) LLJ 61. 1. (IC); Alexandra Jute Mills Ltd v. Their Workmen, (1950) LLJ 1262; (IT), Lister Antiseptic and Dressing Co. Ltd v. Their Employees, (1951) 2 LLJ 791 (IT); Delhi Administration v. Edward Keventer Ltd, (1978) 2 LLJ 209. Kanpur Woolen Mills, v. Kanpur Mazdoor Congress, (1950) LLJ 611. United Commercial Bank Ltd v. Kedar Nath Gupta, (1952) 1 LLJ 782; Mahahoob Sahi Kalbarga Mills Co. Ltd v. Their Employees, (1959) 2 LLJ 196. Assam Chah Karmachari Sanagha v. Dimakuchi Tea Estate, AIR (1958) SC 353. Workmen of Dahingeapur Tea Estate, AIR 1958 SC 1026. Kays Construction Co. Ltd v. Its Workmen, AIR 1959 SC 208. Standard Vacuum Refining Co. of India Ltd v. Their Workmen, AIR 1960 SC 948; Bombay Union of Journalists v. The Hindu, (1994) 2 LLJ 600. Bombay Union of Journalists v. The Hindu, AIR 1963 SC 318. Workmen of Dimakuchi Tea Estate v. Management of Dimakuchi Tea Estate, (1959) ILLJ 500. All India Reserve Bank Employees' Association v. Reserve Bank of India, AIR 1966 SC 305. Workmen v. Greaves Cotton Ltd, (1971) 2 LLJ 479 (SC). Workmen v. Greaves Cotton Ltd, (1970) 2 LLJ 479 at 490. Standard Vacuum Refining Co. v. Their Workmen, AIR 1960 SC 948. Workmen of Dimakuchi Tea Estate v. Management of Dimakuchi Tea Estate, (1959) 1 LLJ 500. All India Reserve Bank Employees’ Association v. Reserve Bank of India, AIR 1966 SC 305 at 308. Workmen of Dimakuchi Tea Estate, (1959) 1 LJJ 500; Kays Construction Co. (P) Ltd v. Its Workmen, AIR 1959 SC 208. Bombay Union of Journalists v. The Hindu, AIR 1963 SC 318. (2001) 9 SCC 557. Central Provinces Transport Services v. Raghunath Gopal Patwardhan, (1957) 1 LLJ 27 (SC). Kandan Textiles Ltd v. Industrial Tribunal, 875; United Commercial Bank Ltd v.

53 54 55 56 57 58 59

60 61 62 63 64 65 66 67 68

69 70

Commissioner of Labour, (1951) 1 LIJ 1 (SC). Swadeshi Cotton Mills Co. v. Ramzani, (1953) 1 LLJ 277 (LAT); Newspapers Ltd v. State Industrial Tribunal, (1954) 2 LLJ 263 (Allahabad), reversed in appeal, (1957) 2 LLJ 1 (SC). New India Assurance Co. Ltd v. Central Government Industrial Tribunal, (1954) 2 LLJ 21 (Patna); J Chowdhary v. M N Banerjee, 56 CWN 256 (1951). Central Provinces Transport Services Ltd v. Raghunath Gopal Patwardhan, (1957) 1 LLJ 27. D N Banerjee v. P R Mukhejee, (1953) 1 LLJ 195 (SC). Newspapers Ltd. v. State Industrial Tribunal, (1957) 2 LLJ 1 (SC). Bombay Union of Journalists v. The Hindu, AIR 1963 SC 318. Workmen of Dharampal Prem Chand v. M/s Dharmpal Prem Chand, AIR 1966 SC 182. Commenting on the principles laid down in Bombay Union of Journalists v. The Hindu, AIR 1963 SC 318, the Supreme Court in M/S Dharampal Prem Chand, op. cit. observed: In our opinion, the observation (made in The Hindu)... should not be read as laying down any hard and fast rule in the matter. Take for instance, the case of an employer who employs 20 workmen, and assume that these workmen have not formed any union. If the employer illegally dismisses all the workmen employed by him, it cannot be suggested that the dispute raised by employees would not become an industrial dispute because there was no union to support them and the dismissed employees themselves cannot convert their individual dispute, op. cit., 182–86. Workmen of Indian Express Ltd v. Management of Indian Express Ltd, (1970) 2 LLJ 132 (SC). M/s Western India Match Co. Ltd v. Western India Match Company Workers' Union, (1970) 2 LLJ 256 (SC). 2005 LLR 314. Workmen v. M/s Dharampal Prem Chand, AIR 1966 SC 182. Workmen of Indian Express Newspaper v. Management, 1970 2 LLJ 132, 137. Workmen v. Rohtak General Transport Company, 1962 1 LLJ 634 (SC). State of Punjab v. Gondhara Transport Co., AIR 1975 SC 53 1. Bombay Union of Journalists v. The Hindu, AIR, 1963 SC 318. See also Deepak Puri v. Fifth Industrial Tribunal, 1986 Lab. IC. Newspapers Ltd v. State Industrial Tribunal, AIR 1960, SC 1328; Workmen of Dharampal Prem Chand v. M/s Dharampal Prem Chand, AIR 1966 SC 182; Workmen of Indian Express Newspaper v. Management (1970) 2 LLJ 132. Associated Cement Co. v. Workmen, AIR 1970 SC 177; Pradip Lamp Works v. Workmen, (1970) 1 LLJ 507 (SC). Newspapers Ltd v. U P State Industrial Tribunal, AIR 1960 SC 1328; State of Bombay v. Kripa Shankar Jaiswal, AIR 1961 SC 304; Pradip Lamp Works v. Its Workmen, (1970) 1 LLJ 507. Newspapers Ltd v. U P State Industrial Tribunal AIR 1960 SC 1328.

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75 76 77 78 79 80 81 82 83 84 85 86 87 88

89 90 91 92 93 94 95 96 97

State of Bombay v. Kripa Shankar Jaiswal, AIR 1961 SC 304. Pradip Lamp Works v. Its Workmen, (1970) 1 LLJ 507. Kandan Textiles Ltd v. Industrial Tribunal, 875; Sri Ram Vilas Service Ltd v. State of Madras (1956) 1 LLJ, 198; Murgan Transport v. Its Workers, (1960) 1 LLJ 349; Murugalli Estate v. Industrial Tribunal, (1964) 2 LLJ 164. Shri Kripa Printing Press v. Labour Court, (1960) 1 LLJ 53. P M Murugappa Mudaliar Rathina Mudaliar & Sons v. Raji Mudaliar, (1965) 1 LLJ 489. Deepok Industrial Ltd v. State of West Bengal, (1975) 1 LLJ 293 at 294-98. Visalakshmi Mills Ltd v. Labour Court, (1962) 2 LLJ 93. Hindustan Ltd v. Chief Commissioner, (1957) 2 LLJ 466. Bombay Union of Journalists v. The Hindu, AIR 1963 SC 318. Deepak Industrial Ltd v. State of West Bengal, (1975) 1 LLJ 293 at 294–98. Bombay Union of Journalists v. The Hindu, AIR 1963 SC 318. Binny Ltd. v. Workmen, AIR 1972 SC 1975. (2005) LLR 314. Western India Match Co. v. Workers Union, (1970) 2 LLJ 256 (SC). (1995) Lab. IC 2784 (AP). AIR 1994 SC 1176. In the Statement of Objects and Reasons of the Bill which resulted in the enactment of Section 2A it was stated: In construing the scope of industrial dispute, courts have taken the view that a dispute between an employer and individual workman cannot per se be an industrial dispute but it may become one if it is taken up by a union or a number of workmen making a common cause with the aggrieved individual workman. In view of this, cases of individual dismissals and discharges cannot be taken up for conciliation or arbitration or referred to adjudication under the Industrial Disputes Act, unless they are sponsored by union or a number of workmen. It is now proposed to make the machinery under the Act available in such cases. Rustaom and Hornsby (P) Ltd v. T B Kadam, (1975) 2 LLJ 352 at 355 (SC). Bharat Heavy Electricals Ltd v. Anil and others, 2007 LLR 201. (1998) 2 LLJ 1217. 2007 LLR 201. Chemicals and Fibres of India Ltd. v. D S Bhoir, (1975) 2LLJ 168 (SC). J N L Pradhan v. Industrial Tribunal, (1977) 1 LLJ 36 (Orissa). Machinnon Machenzie and Co. v. L M Lassk, (1970) 1 LLJ 16 (SC). Toshniwal Brothers (Pvt.) Ltd v. Labour Court, (1969) FJR 19 352. Fedders Lloyd Corporation (P) Ltd v. Lt Governor, Delhi, (1970). Lab. IC 421 (Delhi). Atlas Cycle Industries v. P V Thukral (1971) Lab. IC203, 205 (Punjab and Haryana).

98 99 100 101 102 103 104 105

T V S Iyengar and Sons (P) Ltd v. State of Madras, (1970) Lab. IC 203 (Madras). P Janardhana Shetty v. Union of India, (1970) 2 LLJ 738 (Mysore). Jute and Jute Goods Buffer Stock Association v. Second Industrial Tribunal, Matter No. 654 of 1970 decided by the Calcutta High Court on 28 July, 1971. Rustom and Hornsby (P) Ltd v. T B Kadam, (1975) 2 LLJ 352. Rustom and Hornsby (P) Ltd v. T B Kadam, (1975) 2 LLJ 352. 1997 Lab. IC 122 (Bom); see also M/s John and Mani Agencies v. Labour Court Madras, (1991) Lab. IC 306 (Madras). Krishna Distt Cooperative Marketing Society Ltd v. N V Purnachandra Rao, (1987) Lab. IC 1651 (SC). It came into force with effect from 19 August 2010.

CHAPTER

15 Arena of Interaction and Participants in Industrial Disputes I. INDUSTRY Section 2 (j) of the Industrial Disputes Act, 1947 defines ‘industry’ to mean: any business, trade, undertaking, manufacture or calling of employers. It also specifically states that the expression ‘industry’ includes: any calling, service, employment, handicraft, or industrial occupation or avocation of workmen. The aforesaid words are of wide import and transgress the popular meaning of the word.1

A. Municipalities and Municipal Corporations The Supreme Court was called upon to interpret the word ‘industry’ for the first time in D N Banerji v. P R Mukherjee2 (hereinafter referred to as Budge Budge Municipality case). A head clerk and a sanitary inspector of the Budge Budge Municipality were dismissed on certain charges by the municipality. The dispute relating to the validity of dismissal was referred by state of West Bengal to the industrial tribunal for adjudication, which directed the reinstatement of those persons. Against this order, the municipality filed a writ petition under Articles 226 and 227 of the Constitution before the Calcutta High Court, but the petition was dismissed. Aggrieved by this order, the municipality filed an appeal before the Supreme Court. Two questions were raised before the Court: (i) that there

being no industrial dispute, the reference to the tribunal was bad, and (ii) that the Industrial Disputes Act was not applicable to the municipality as it was not an industry. While dealing with these questions, Justice Chandersekhara Aiyar observed: It is obvious that the limited concept of what an industry meant in early times must now yield place to enormously wider concept so as to take in various and varied forms of industry, though the word ‘undertaking’ in the definition of ‘industry’ is wedged in between business and trade on the one hand and manufacture on the other and though therefore it might mean only a business or trade, still it must be remembered that if there were so, there was no need to use the word separately from business or trade. The wider import is attracted even more clearly when we look at the latter part of the definition which refers to ‘calling, service, employment, or industrial occupation or avocation of workmen’. Undertaking in the first part of the definition and industrial occupation or avocation in the second part obviously mean much more than what is ordinarily understood by trade or business. The definition was apparently intended to include within its scope what might not strictly be called a trade or business venture. The Court in the course of its judgement referred to the following observations made by Justice Isaecs and Justice Rich, in Federated Municipal and Shire Council Employees’ Union of Australia v. Lord Mayor, Alderman, Councillors and Citizens of the Melbourne Corporation:3 Industrial disputes occur when, in relation to operations in which capital and labour are contributed in cooperation for the satisfaction of human wants and desires, those engaged in cooperation dispute as to the basis to be observed, by the parties engaged, respecting either in share of the product or any other terms and conditions of their cooperation. The Supreme Court accordingly dismissed the appeal filed by the municipality. The aforesaid decision was followed in Baroda Borough Municipality v. Its Workmen.4 The employees working in the electricity department of the municipality demanded, inter alia, bonus which was refused by the

management. On reference of the dispute by the appropriate government, the tribunal held that employees were not entitled to bonus because the municipality was not a profit-oriented concern. On appeal, the labour appellate tribunal reversed the decision of the tribunal on the ground that the municipality was an ‘industry’. Aggrieved by this finding, the municipality filed an appeal to the Supreme Court. The Court following the decision in D N Banerjee v. P R Mukherjee affirmed the findings of labour appellate tribunal and held that the undertaking was an ‘industry’ and that could be regarded as analogous to the carrying on of a trade or business. This was followed by Corporation of City of Nagpur v. Its Employees5 in which the Supreme Court emphasized the inclusive character of the definition of ‘industry’. It drew a distinction between (a) regal and (b) municipal function of the corporation, the latter being ‘analogous to business or trade’. In this case, a dispute arose between the corporation and its employees regarding wage scale, etc. The government of Madhya Pradesh referred the dispute under Section 39 of the C.P. and Brar Industrial Disputes Settlement Act, 1947 to the state industrial court. The corporation questioned the jurisdiction of the industrial court, inter alia, on the ground that the corporation was not an industry but the tribunal overruled the objection and held that the corporation was an ‘industry’ and that the further question whether any department of the corporation was industry or not, would be decided on evidence. The corporation, after unsuccessfully moving the Bombay High Court on a writ petition under Article 226, appealed to the Supreme Court. The Supreme Court was called upon to decide whether and to what extent various activities carried on by the corporation of the city of Nagpur were ‘industry’ within the meaning of Section 2 (4) of Central Province and Brar Industrial Disputes Settlement Act, 1947.6 The Court summed up its conclusions in the following words: (1) The definition of ‘industry’ in the Act is very comprehensive. It is in two parts: one part defines it from the standpoint of the employer and the other from the standpoint of the employee. If an activity falls under either part of the definition, it will be an industry within the meaning of the Act. (2) The history of industrial disputes and legislation recognizes the basic concept that the activity shall be an organized one and not that which pertains to private or personal employment. (3) The regal functions described as primary and inalienable functions of State though statutorily delegated to a corporation are necessarily excluded from the purview of the definition.

Such regal functions shall be confined to legislative power, administration of law and judicial power. (4) If a service rendered by an individual or a private person would be an industry, it would equally be an industry in the hands of a corporation. (5) If a service rendered by a corporation is an industry, the employees in the departments connected with that service whether financial, administrative or executive, would be entitled to the benefits of the Act. (6) If a department of a municipality discharges many functions, some pertaining to industry as defined in the Act and other non-industrial activities, the predominant functions of the department shall be the criterion for the purposes of the Act. The Court also ruled that neither investment of capital nor profit motive was sine qua non for determining whether an activity was an ‘industry’ or not. The Court accordingly held that several departments of a municipal corporation, namely: (i) tax department, (ii) fire brigade department, (iii) public conveyance department, (iv) lighting department, (v) water works department, (vi) city engineering department, (vii) enforcement (encroachment) department, (viii) sewerage department, (ix) public gardens department, (x) public works department, (xi) assessment department, (xii) estate department, (xiii) education department, (xiv) printing press department, (xv) building department and (xvi) general administration department were not discharging sovereign or regal function and were, therefore, included within the definition of industry. The Court, however, held that departments pertaining to (i) assessment and levy of house tax, (ii) assessment and levy of octroi, (iii) removal of encroachment and pulling down of dilapidated houses, (iv) maintenance of cattle ponds and (v) prevention and control of food adulteration were outside the purview of Section 2 (4). The decision in this case and also in D N Banerjee v. P R Mukherjee (supra) found the approval of the seven-judges bench of the Supreme Court in Bangalore Water Supply and Sewerage Board v. Rajappa7. This view was reaffirmed in Samishta Dube v. City Board, Etawah,8 (I). The Court held that the general administration department was an ‘industry’. Even though it is well established in a catena of cases decided by the Supreme Court that municipality is an industry under 2(j) of the Industrial Disputes Act, 1947, yet an attempt was made in Parmanand v. Nagar Palika, Dehradun9 to reopen the position and re-examine the decisions of the Supreme Court in view of inclusion of municipalities in the Constitution. It was urged that

municipality should not be held to be an industry under Section 2(j) of the Industrial Disputes Act, 1947 after (i) it became creature of the Constitution (ii) it has been elevated to the status of State and (iii) it is carrying on certain governmental functions. The Court rejected the contention by holding that inclusion of municipalities in the Constitution by itself would not dilute the effect of its decision in Corpn. of the City of Nagpur v. Employees and Bangalore Water Supply and Sewerage Board v. A Rajappa wherein the Supreme Court held that municipality is an industry under the Industrial Disputes Act.

B. Hospitals and Pharmacies We now come to State of Bombay v. Hospital Mazdoor Sabha10 which constitutes a landmark in labour law. In this case, the Supreme Court not only declined to adopt the expression ‘analogous to carrying out of a trade or business’, but coined a new expression ‘systematically’ organized in a business or trade like manner. In this case, J J Group of Hospitals run by the State of Bombay retrenched two of its ward servants. Against this order, the aggrieved workers moved the Bombay High Court for the issuance of writ of mandamus directing their reinstatement. The management, i.e., the State of Bombay contended that the hospital being not an ‘industry’, the Industrial Disputes Act, 1947 was not applicable. The Bombay High Court held that the hospital was an ‘industry’. Aggrieved by this finding, the State of Bombay filed an appeal before the Supreme Court. One of the main issues before the Supreme Court was whether in running the hospitals, the State was carrying on an activity of an ‘industry’. The Court answered it in the affirmative and observed: We have yet to decide which are the attributes whose presence makes an activity an undertaking within Section (j), on the ground that it is analogous to trade or business. It is difficult to state these possible attributes definitely or exhaustively as a working principle but it may be stated that an activity systematically or habitually undertaken for the production or distribution of goods or for the rendering of material services to the community at large or a part of such community with the help of employees is an undertaking. Such an activity generally involves the cooperation of the employer and the employees and its object is the satisfaction of material human needs. It must be organized or arranged in manner in which trade or business is generally organized or arranged. It must not be casual nor must

it be for oneself nor for pleasure. Thus, the manner in which the activity in question is organized or arranged, the condition of the cooperation between employer and the employee necessary for its success and its object to render material service to the community can be regarded as some of the features which are distinctive of activities to which Section 2 (j) applies. Judged by this test, there would be no difficulty in holding that the State is carrying on an undertaking when it runs the group of hospitals in question. However, a larger bench of the Supreme Court in Management of Safdarjang Hospital v. Kuldip Singh Sethi11 disapproved of the aforesaid decision, by holding that a hospital which was run and administered by the government was a part of its sovereign functions and it was outside the scope of ‘industry’ and thereby unduly curtailed the scope of the term ‘industry’. In this case, three appeals were heard together. In the first appeal, a dispute arose between the management of Safdarjang Hospital—a government owned and run hospital and its employees for the computation of amount of salary due to workers consequent upon change in the grade. Thereupon, the employees made an application to the labour court under Section 33 C (2) of the Industrial Disputes Act for the recovery of money due from the employer. The labour court directed the hospital to pay the money due to them. It is against this finding of the labour court that an appeal was filed. In the second appeal, a dispute arose between the Tuberculosis Association of India (a research and training institution) and its employees relating to pay scales and other facilities of the employees. The government referred the dispute to the tribunal. The tribunal held that ‘neither the research carried out nor the training imparted nor the existence of Tuberculosis Association of India with which the hospital is affiliated, makes any difference and the hospital is an industry within the meaning of the Act.’ Against this order, the appeal was filed to the Supreme Court. In the third appeal, the management of Kurji Holy Family Hospital, Patna (a wholly charitable hospital maintaining some paid beds) took disciplinary action against two of its employees. The dispute was referred by the state of Bihar to the labour court under Section 10 of the Act. The management raised the preliminary objection that they were not engaged in ‘industry’ and consequently, labour court had no jurisdiction. Against this, a writ petition was filed to the Patna High Court which held that it was an ‘industry’. It was against this decision that an appeal was filed to the Supreme Court.

The common question involved in all the three appeals was whether the activities carried on by these hospitals were ‘industry’? The Court formulated the following test to determine whether or not an activity is an ‘industry’: (i) It is not necessary to view the definition in two parts. The definition read as a whole denotes a collective enterprise in which employers and employees are associated. It does not exist either by the employers alone or by employees alone. It exists only when there is a relationship between employers and employees, the former engaged in business, trade, undertaking, manufacture or calling of employers and the latter engaged in any calling, service, employment, handicraft, or industrial occupation or avocation. (ii) The word ‘industry’ (in the definition of ‘workmen’) must take its colour from the definition of industry and discloses that a workman is to be regarded as one employed in an ‘industry’ if he is following one of the vocations mentioned in conjunction with his employers. (iii) In the collocation of the terms and their definitions, these terms have a definite economic content of a particular type and on the authorities of this Court have been uniformly accepted as excluding professions and are only concerned with the production, distribution and consumption of wealth and the production and availability of material services. Industry has thus been accepted to mean only trade, business, manufacture, or undertaking analogous to trade or business for the production of material goods or wealth and material services. (iv) Material services are not services which depend wholly or largely upon the contribution of professional knowledge, skill or dexterity for the production of result. Such services are services no doubt but not material services. Material services involve an activity carried on through cooperation between employers and employees to provide the community with the use of something such as electric power, water, transportation, mail delivery and the emphasis is upon the productivity of a service organized as an industry and commercially valuable. It is the commercial character of the activity and the production of something of benefit to particular individuals rendered by all services which is described as the production of material services. In the light of aforesaid test, the court concluded that the Hospital Mazdoor Sabha wrongly held: (i) that ‘the second part of the definition contained an extension of the first part by including other items of industry’ (ii) that economic activity was not an essential part of the concept of industry (iii)

that an economic activity could not exist without the presence of capital or profit-making or both (iv) that the test namely, ‘can such activity be carried on by private individuals or group of individuals’ applied to the facts of the case. The aforesaid principle was reiterated in Management of Hospital, Orissa v. Their Workmen.12 In this case, a dispute arose regarding the conditions of service of employees employed in hospitals, sanatorium and infectious wards owned and run by the government. The government of Orissa made three references to the tribunal for adjudication. The tribunal in all three cases held that the activities of the hospitals, sanatorium and infectious wards were ‘industry’. Against this finding, the management of the hospitals preferred an appeal before the Supreme Court. The question arose whether the aforesaid activities run by the government were ‘industry’. The Supreme Court, following the decision in Safdarjang Hospital case held that the aforesaid activities were not ‘industry’ because it was being run as a part of the functions of the government and were being run as a department. It further held that the ‘mere fact that payment was accepted in respect of some beds… could not… (lead) to the inference that the hospitals (were) run as a business in a commercial way. Primarily, the hospitals (were) meant as free service by the government to the patient, without any profit motive.’ The principle enunciated in Safdarjang Hospital supra was once again followed and applied by the Supreme Court in Dhanrajgiri Hospital v. Workmen.13 The hospital run by a charitable trust was engaged in imparting training in general nursing and midwifery. There were good number of trainees in general nursing and midwifery. There were also good number of trainee beds in the hospital meant for their practical training. The hospital was not distinct or separate from training nurses. The patients were charged according to their financial conditions and there was no regular charge fixed for a patient. On these facts, the Supreme Court held that the hospital was not engaged in any ‘industry’ under the IDA. The law laid down in the aforesaid decision is no longer applicable in view of the Supreme Court decision in Bangalore Water Supply and Sewerage Board case wherein the Court overruled these decisions and rehabilitated Hospital Mazdoor Sabha case.

C. Agricultural Operation In Hari Nagar Cane Farm v. State of Bihar,14 a question arose whether the agricultural operation carried on by the two companies constituted an ‘industry’. Both the companies were not only involved in agricultural operation, but were

also registered under the Indian Companies Act. While the former was formed to produce sugarcane, wheat, paddy and other articles for sale, the latter was involved in the production of sugar for its own consumption. On a dispute having arisen between the workers and companies, the state of Bihar made a reference to the industrial tribunal. The companies questioned the jurisdiction of state of Bihar to make a reference in a writ petition under Article 226 of the Constitution before the Patna High Court on the ground that the agricultural operation carried on by them did not constitute an ‘industry’. The High Court dismissed the petition and held that the activity carried on by them was an ‘industry’ and therefore, the reference was valid. It is against this order of the High Court that the companies filed an appeal to the Supreme Court. The Court on the facts held that ‘when a company if formed for the purpose of carrying on an agricultural operation, it was carrying on trade or business’ under Section 2(j). The Court, however, declined to decide the larger issue as to whether all agricultural operations connected with it were included in ‘industry’. In Bangalore Water Supply and Sewerage Board v. Rajappa15, the sevenjudges bench of the Supreme Court appears to have re-affirmed the principles laid down in Hari Nagar Cane Sugar Farm case. From the Bangalore decision it is evident that the Supreme Court is inclined to treat organized agricultural operation with the cooperation of capital and labour for the production and distribution of goods and services calculated to satisfy human wants and wishes to be an ‘industry’. But, the small and unorganized agricultural operations have been excluded from the purview of the Industrial Disputes Act, 1947.

D. Agriculture Produce Market Committee In Agriculture Produce Market Committee v. Ashok Harikuni,16 the Supreme Court was called upon to determine whether the Agriculture Produce Market Committee was exercising sovereign function in order to exclude it from the purview of ‘industry’ under the Industrial Disputes Act, 1947. The Court observed that even if a statute confers on any statutory body, any function which could be construed to be ‘sovereign’ in nature that, would not mean every other function under the same statue to be also sovereign. The Court should examine the statute to sever one from other by comprehensively examining various provisions of that statute. In interpreting any statute to find if it is ‘industry’ or not, the Court has to find its pith and substance. The Industrial Disputes Act, 1947 is enacted to maintain harmony between employer and employee which brings peace and amity in its functioning. This peace and amity should be the objective in the functioning of all enterprises. This is to the benefit of both the

employer and employee. Misuse of rights and obligations by either or stretching it beyond permissible limits have to be dealt with within the framework of the law but endeavour should not be, in all circumstances, to exclude any enterprise from its ambit. That is why courts have been defining ‘industry’ in the widest permissible limits and ‘sovereign’ functioning within its limited orbit. It has been held that the Agriculture Produce Market Committee is trading in agriculture produce and is an ‘industry’ under the Industrial Disputes Act.

E. Professional Activities Are the professional activities like solicitors’ firms, architects’ offices, medical polyclinics and surgeries, firms of chartered accountants, etc., industries under Section 2 (j)? This question formed the subject matter of controversy. In National Union of Commercial Employees v. M R Mehar17, certain employees, namely, clerks, typists, stenographers, accountants and menial servants of a solicitor firm M/s Peeira Fazalbhoy and Co. demanded bonus. The management rejected the demand. Thereupon the state of Bombay referred the dispute to the industrial tribunal for adjudication. The management successfully questioned the jurisdiction of the tribunal on the ground that the firm was not an ‘industry’. Thereupon, the employees, after unsuccessfully moving the High Court for the issuance of appropriate writ under Articles 226 and 227 of the Constitution, appealed to the Supreme Court. The question arose whether the solicitor firm was carrying on as ‘industry’? The Court held that the firm was only a ’liberal profession’ like that of attorney and was not an ‘industry’ because (i) there was no ‘direct or immediate’ cooperation, between solicitor and his employees to the professional service which the solicitor rendered to his client and (ii) services rendered by a person involved in a liberal profession required special or peculiar intellectual and educational equipment18 and were not ‘material’. The aforesaid principle was extended and applied in relation to employees employed in a bar association canteen in Bar Association Canteen v. Chief Commissioner, Delhi.19 In this case, the association ran a canteen on no profit, no loss basis, for the benefit of its members and their guests. A dispute arose between the management of the bar association and the employees employed in the canteen regarding terms of employment. On reference, the tribunal held that the activity was covered under ‘industry’. Against this finding, a writ petition was preferred in the Punjab High Court. The High Court held that the activity of the members of the bar association in rendering advice to the client and appearing for them in cases were not ‘industry’. Extending it a little further, the Court added that if the bar association employed workmen for supplying

drinking water or assisting the members in taking out books from the bookracks, the dispute between such workmen and the bar association was not an industrial dispute20. Extending it again, the Court added that the activity in serving the food or snacks to the guest was merely incidental and was, therefore, not an ‘industry’.21 The aforesaid decision was overruled in Bangalore Water Supply and Sewerage Board case. The Court disapproved the view because in its view, a solicitor’s firm or a lawyer’s firm becomes successful not merely by the talent of a single lawyer but by the cooperative operations of several specialists, juniors and seniors. Likewise, the ancillary services of competent stenographers, paralegal supportive services are equally important, the same test is applied to other professions. The conclusion is inevitable that in the success of the institution, every professional unit has an institutional goodwill and reputation, it comes not merely from the professional or specialist but from all those whose excellence in their respective parts makes for the total proficiency.

F. Chartered Accountant’s Firm The high courts were divided on the issue whether a chartered accountant’s firm was carrying on an ‘industry’. The Calcutta High Court in Rabindranath Sen v. First Industrial Tribunal22 and Alien Macgregor Smith Forge v. First Industrial Tribunal23 held that chartered accountant’s firm auditing and making representation in courts in taxation and secretarial work with the assistance of subordinate staff was an ‘industry’ because (i) there was cooperation of labour and capital in the auditing work and (ii) it was organized in a business–like manner. But in Ram Krishna Ayyar Vaidyanathan v. Fifth Industrial Tribunal24, the Calcutta High Court distinguished Rabindranath Sen and held that the chartered accountant’s firm was not an ‘industry’ because there was (i) liberal profession, (ii) no essential cooperation between the firm and audit clerks and (iii) no commodity produced by the firm. The High Courts of Bombay,25 Kerala26 and Madras27 also held that a chartered accountant’s firm was not engaged in ‘industry’ because (i) it was a learned or liberal profession, (ii) there was no capital investment and (iii) there was no direct or essential cooperation.

G. Educational Institutions We now turn to examine whether an educational institution is an ‘industry’. In order to examine this issue, it would be relevant to note that education is a mission and vocation, rather than a profession or business.28

Corporation of City of Nagpur v. Its Employees29 is our starting point. In this case, the Supreme Court held that the educational institutions run by municipality/corporation was a service rendered by the department and so the subordinate menial employees of the department came under the definition of ‘workman’ and were entitled to the benefits of the Act. However, the pendulum swung back in curtailing the scope and coverage of ‘industry’ in University of Delhi v. Ram Nath30 where the University was plying buses for the convenience of female students attending one of its constituent colleges since 1948. They had decided in 1961 to discontinue the amenity from the next academic session, as it resulted in losses. In pursuance of this decision, they terminated the service of two bus drivers on payment of one month’s salary in advance in lieu of notice. The drivers demanded retrenchment compensation alleging that they were workmen. The university declined. Thereupon, they filed an application to the labour court under Section 33C(2) for recovery of the compensation. The university raised a preliminary objection that the labour court had no jurisdiction because the university was not an ‘industry’. The labour court overruled the objection and directed the university to pay the compensation. Against this award of the labour court, the university filed an appeal to the Supreme Court. The Supreme Court held that the drivers employed by the university were not employed in ‘industry’ because: (i) predominant function of the university was to impart education; (ii) teachers were not workmen and (iii) others (persons other than teachers) were insignificant in number and did minor and insignificant work. The seven-judges bench of the Supreme Court in Bangalore Water Supply v. Rajappa overruled this decision and reaffirmed the decision in Corporation of Nagpur case that educational institution was industry. Justice Krishna Iyer laid down the following test to determine whether an activity is an ‘industry’. The test is not the predominant number of employees entitled to enjoy the benefits of the Act. The true test is the predominant nature of the activity. In the case of the university or an educational institution, the nature of the activity, is, ex hypothesis, education which is a service to the community. Ergo, the university is an industry. His Lordship added: … there are a number of other activities of the university administration, demonstrably industrial which are severable although ancillary to the main cultural enterprise. For instance, a university may have a large printing press as a separate but

considerable establishment. It may have a large fleet of transport buses with an army of running staff. It may have a tremendous administrative strength of officers and clerical cadres. It may have karamcharis of various hues. And observed: It would be strange, indeed, if a university has 50 transport buses, with drivers, conductors, cleaners and workshop technicians. How are they to be denied the benefits of the Act, especially when their work is separable from academic teaching merely because the buses are owned by the same corporate personality? In A Sundarambal v. Government of Goa, Daman and Diu31, the Supreme Court held that educational institutions are covered by the definition of ‘industry’ under the Industrial Disputes Act, 1947.

H. Clubs Are clubs industries? This question formed the subject matter of judicial interpretation in a number of decided cases. Madras Gymkhana Club Employees’ Union v. Gymkhana Club32 is a leading case on this. The Madras Gymkhana Club—a members’ club, was engaged on a vast scale in multifarious activities and for facilities of accommodation, catering, sale of alcoholic and non-alcoholic beverages, games, etc., and the club organized parties at which guests were freely entertained and the club had established arrangements with other clubs. It had a membership of 1,200 with almost 800 active members. It employed 194 employees. The club owned both movable and immovable properties with several of its wage bills falling in between ₹1 and 2 lakh. A dispute arose between the management of Madras Gymkhana Club and its workmen regarding the payment of bonus for the year 1962. The government referred the dispute to the industrial tribunal for adjudication. The tribunal held that Madras Gymkhana Club was not an industry and was, therefore, not liable to pay bonus to its workmen. Against this order, the aggrieved workmen filed an appeal before the Supreme Court. On these facts a question arose for determination before the Supreme Court—whether a club was an ‘industry’. The Court limited the scope of ‘industry in four different ways: (i) the Court held that the cardinal test was to find out whether there was an industry according to the denotation of the words in the first part of the definition. The second part of the

definition did not enlarge the meaning of the expression ‘industry’ in the sense that standing alone, it could not define ‘industry’, (ii) although the Court observed that the second part of the definition of industry gave no extended connotation, yet the manner in which it interpreted the second part limited the meaning of the first part, because according to the Court, unless the parts of the definition were independently fulfilled, there could not be an ‘industry’, (iii) the emphasis on the production and distribution of material goods, i.e., ‘wealth’ indicated that the Court was giving an economic content to the first part of the definition of ‘industry’ and (iv) the Court defined the word ‘undertaking’ as ‘any business or any work or project which one engages in or attempts as an enterprise analogous to business or trade’ and which results, ‘in material goods or material services’. In Bangalore Water Supply and Sewerage Board case, the Supreme Court overruled the aforesaid decision. The Court disapproved of the reasoning of Madras Gymkhana that it was not an ‘industry’ because the club belonged to members only. The aforesaid view was followed in Cricket Club of India v. Bombay Labour Union.33 The club was incorporated with a view to encouraging and promoting various games and sports and to conduct sports and matches, particularly of cricket. It carried on various activities of the club like recreation and entertainment, catering to members and their guests and sometimes to spectators. Among other facilities, the club provided for residence. The club also made investments in immovable property. It had a membership of 4,800 and employed 397 persons. On these facts a question arose whether the activities carried on by the club were ‘industry’. The Court observed that (i) it was a members’34 club without any shareholders and was of the nature of a selfservicing institution organized by the club for its members and it was wrong to equate it with the activity of a hotel, (ii) the opening of club stall to general public to buy snacks, etc., on few occasions in a year could not be held to be an ‘undertaking of the nature of business or trade’, (iii) income from the rent of the building did not accrue with aid and cooperation of employees, (iv) club’s income from the stadium was not of the nature of ‘industry’. It, accordingly, held that club was not an ‘industry’ under Section 2(j). This decision was overruled in Bangalore Water Supply and Sewerage Board (Supra).

I. Commercial Institutions In Ahmedabad Textile Industry Research Association v. State of Bombay and Others35, the Supreme Court adopted the working principle formulated in Hospital Mazdoor Sabha supra. Here the question arose whether an association

for research maintained by the textile industry and employing technical or other staff fell within the definition of ‘industry’. In this case, the association was founded with the object of establishing a textile research institute for carrying on research and other scientific work in connection with textile trade and industry, and other trades and industries allied therewith or necessary thereto. The research was conducted with a view to finding greater efficiency, rationalization and reduction of costs, research into conditions of work, time and motion studies, fatigue and rest pauses, standardization of methods or work, condition of factories and diseases and accidents arising out of employment in textile mills. The Court analysed the activity of the research association and found that the undertaking as a whole is in the nature of business or trade organized with the object of discovering ways and means by which the member mills may obtain large profits in connection with their industries.36 The Court accordingly held that the nature of activity carried on by the research association fell within the definition of the word ‘industry’. In Federation of Indian Chamber of Commerce and Industry v. Their Workmen37, the federation carried on systematic activity to assist its members and other businessmen and industrialists and even non-members as for instance, in giving them the right to subscribe to their bulletin; in taking up their cases involving their business and in obtaining concession and facilities for them from the government and to provide for arbitration in respect of disputes arising in the course of trade, industry or transport. On these facts the question arose whether the federation was engaged in an industry. Speaking for the Supreme Court, Justice Jagmohan Reddy observed: In our view, the linchpin of the definition of industry is to ascertain the systematic activity which the organization is discharging namely, whether it partakes the nature of a business or trade or is an undertaking or manufacture or calling of employers. If it is that and there is cooperation of the employer and the employees resulting in the production of the material services, it is an industry notwithstanding that its objects are charitable or that it does not make profits or even where profits are made, they are not distributed among the members.38 The Court accordingly held that the activities carried on by the federation where business activities and material services were rendered to businessmen, traders and industrialists who were members of the federation. The aforesaid view was reiterated in Workmen v. Management of ISI.39

The institution prepared and published (whether new or revised) Indian standards in different subjects and sold them. The institution also acted as a sole selling agent for sale of overseas standards on commission basis and derived a large income. Further, the institution carried on the activity of certification of ‘standard mark’. The institution had several laboratories and also a library. For the aforesaid purpose, the management employed considerable number of workmen. These workmen made certain demands which resulted in industrial dispute which was referred to the industrial tribunal for adjudication. The management questioned the jurisdiction of tribunal on the ground that the workmen were not employed in an ‘industry’. The objection was upheld by the tribunal. Thereupon, the workmen filed an appeal to the Supreme Court. Justice Bhagwati (with whom Justice Goswami agreed), who wrote the majority judgement for the Court, held that the Indian Standard Institution was an ‘industry’. His Lordship gave the following reasons in support of his conclusion: (i) The activities of the institution are carried on in a systematic manner and are organized or arranged in a manner in which trade or business is ordinarily organized or arranged. The institution derives large income from its activities. (ii) The object of the activities of the institution is to render material services to a part of the community, namely, manufacturers, distributors and consumers. (iii) There is also cooperation between the management of the institution and the employees who associate together for rendering these material services. But, Justice Alagiriswami in his dissenting opinion held that undertaking run in public interest of the country as a whole without profit motive and engaged in activities in the form of social service or intended to benefit the general public was not an ‘industry’.

J. Private or Domestic Servants In Corporation of the City of Nagpur v. Its Employees40, the Supreme Court held that domestic or personal service rendered by servants was outside the ambit of the Industrial Disputes Act because they were not employed in the ‘industry’ which on its part was based on the principle that there was no ‘organized activity’. In State of Bombay v. Hospital Mazdoor Sabha41, the Supreme Court excluded domestic services from the scope of ‘industry’ on the ground that there was no systematic and habitually undertaken activity in which employers and employees cooperate to produce material goods or material

services which is organized or arranged in business or trade like manner. But, in Madras Gymkhana Club Employees’ Union v. Madras Gymkhana Club42, the Supreme Court excluded domestic services from the scope of ‘industry’ on the ground that the work done by them was not in pursuit of ‘trade, business, undertaking, manufacture or calling of employers’.

K. Religious Institutions The high courts are divided on the issue whether certain departments of religious institutions were carrying on the ‘industry’. While the High Court in Travancore Devaswom Board v. State of Kerala43 held that Maramat department of the Devaswom Board constituted under Travancore Cochin High Religious Institutions Act, 1950 was carrying on an ‘industry’ under Section 2(j) because: (i) construction of buildings for various purposes was undertaken, (ii) there was cooperation between labour and capital and (iii) the work had been undertaken by private persons. The Orissa High Court in Harihar Bahinipati v. State of Orissa44 held that maintenance of law and order in Shri Jagannath Temple, Puri was outside the ambit of ‘industry’ because there was (i) no cooperation of capital and labour, (ii) no material service was rendered, (iii) primary function was spiritual and not secular, and (iv) no material human needs were met. But the Punjab and Haryana High Court in Shiromani Gurudwara Prabandhak Committee, Patiala v. Presiding Officer, Labour Court, Patiala45 held that Gurudwara Prabandhak Committee distributing Karah-prasad was opening up free kitchen, i.e., langar would not come within the purview of ‘industry’. Neither is it a commercial organization nor is it running any business, but discharging purely religious functions. In Cheirinjumpatty Thampuratty v. State of Kerala46, the Kerala High Court held that Devaswom (temple) governed by the Religious and Charitable Endowments Act, 1951 was not an ‘industry’ under Section 2(j) of the Act. Earlier, in Pappammal Annachatrum v. Labour Court47’, a division bench of the Madras High Court ruled that the activity of providing assistance in the form of boarding and lodging to students in educational institutions which constituted the main activity of the endowment was not covered by ‘industry’ under Section 2(j) because it was serving the cause of education. In Indravadan N Adhvaryu v. Laxminarayan Dev Trust through Chief Executive Kothari48, the Gujarat High Court held that the trust of a temple which is not involved in any business or undertaking or manufacturing activity would not fall within the definition of ‘industry’.

L. Charitable Institutions In Bombay Pinjrapole v. The Workmen49, the Supreme Court was called upon to decide as to whether the Bombay Pinjrapole was an ‘industry’. In this case, Pinjrapole was originally stated as a charitable institution solely devoted to the welfare of the sick and disabled animals. Subsequently, the institution had substantially altered its complexion and a dairy farm was set up. The ‘value of milk supplied to the sick and infirm cattle’ was negligible as compared to that sold in the market, both in terms of persons employed and also in terms of money. A dispute arose between the Bombay Pinjrapole and its workmen over the question of revision of wage scale and other service conditions. On reference, the tribunal held that activities of the Pinjrapole constituted an ‘industry’. The Pinjrapole, after unsuccessfully moving to the Bombay High Court, filed an appeal to the Supreme Court. The Supreme Court also held that the Pinjrapole was running an ‘industry’ and the ‘mere fact, that the Pinjrapole never purchase … cows and stud bulls except once makes no difference to the question as to whether their activity of maintaining cows and bulls could only be considered as investment. In Bangalore Water Supply and Sewerage Board case50, the Supreme Court approved the holding in the case not because Pinjrapoles had commercial motives, but despite compassionate objectives, they share business-like operations. Justice Krishna Iyer classified enterprise into three categories: The first is one where the enterprise, like any other, yields profits but they are siphoned off for altruistic objects. The second is one where the institution makes no profit but hires the services of employees as in other like businesses but the goods and services which are the output, are made available at low or no cost, to the indigent needy who are priced out of the market. The third is where the establishment is oriented on a humane mission fulfilled by men who work, not because they are paid wages, but because they share the passion for the cause and derive job satisfaction from their contribution. The first and second are industries, the third not.

M. Cooperative Societies Cooperative Societies ordinarily cannot fall outside Section 2(j). After all, the society, a legal person, is the employer. The members and/or others are employees and the activity partakes of the nature of trade. Merely because

cooperative enterprises deserve state encouragement, the definition can not be distorted. Even if the society is run by the members only, the entity (save where they are few and self serving) is an ‘industry’ because the member-workers are paid wages and there can be dispute about rates and different scales of wages among the different categories, i. e., workers and workers or between workers and employer. These societies—credit societies, marketing cooperatives, producers or consumers’ societies of apex societies are industries.51

N. National/State Highways In Bangalore Water Supply Board’s case, the Supreme Court held that the establishment, construction and maintenance of national and state highways is an essential governmental function. It is in no way even remotely analogous to trade or business and therefore, cannot fall within the ambit of ‘industry’. But in Executive Engineer, National Highways v. Industrial Tribunal, Bhubaneshwar,52 a division bench of High Court of Orissa held that ‘National highways division of the works department of government is an industry within Section 2(j) of Industrial Disputes Act, 1947, as toll taxes are collected over the bridges constructed by the highways division. In other words, the functions of the national highways division of the works department of government are nonsovereign in nature, therefore it is an ‘industry.’

O. Zila Sainik Board The division bench of the Punjab and Haryana High Court in State of Punjab v. Kidar Nath53 rejected the argument that the zila sainik board is not an ‘industry’ because it neither undertakes any commercial activity akin to trade or business nor any profit is earned by it. The Court accordingly held that zila sainik board was an ‘industry’.

P. Apartment Owners’ Housing Society In Management of Som Vihar Apartment Owners Housing Maintenance Society Ltd v. Workmen C/o Indian Engg. & General Management54, a dispute arose between the owners’ of the apartments and its employees engaged to maintain cleanliness and other services in the apartments regarding dearness allowance, house rent allowance, conveyance allowance and uniforms. The government of Delhi referred the dispute to the industrial tribunal for adjudication. The question to be decided was whether owners’ housing maintenance society is an ‘industry’ within the meaning of Section 2(j) of the ID

Act? The court held that society was an ‘industry’. Aggrieved by this order, the society filed an appeal before the Supreme Court. The Court following its earlier decision in Bangalore Water Supply and Sewerage Board, answered the question in negative. The Court held that the society constituted for the purpose of its members could not be treated as ‘industry’. The aforesaid view was reiterated in Md. Manjur v. Shyam Kunj Occupants’ Society.55

Q. Dock Labour Board In Vishakapatnam Dock Labour Board v. Stevedores’ Association, Vishakapatnam56, a question arose whether the Vishakapatnam Dock Labour Board—a statutory board, was an ‘industry’ under Section 2 (j) of the Industrial Disputes Act, 1947? Applying the test laid down in Madras Gymkhana Club Union v. Gymkhana Club57, the Supreme Court held that the board functioning under the Dock Workers (Regulation of Employment) Act, 1948, and the scheme framed thereunder was not carrying of ‘industry’ so as to attract the provisions of the Industrial Disputes Act, 1947.

R. An Appraisal Thus, it is evident that judicial response in the aforesaid cases reveals conflicting view. In the Budge Budge Municipality,58 Hospital Mazdoor Sabha,59 Corporation of City of Nagpur60, Ahmedabad Textile Industry Research Association61 and even in Fazalbhoys62 case, the Supreme Court specifically held63 that the second part of the definition was added to the area covered by the first part of the definition. But, in Madras Gymkhana Club64, the Supreme Court rendered the second part superfluous,65 whereas in Safdarjang Hospital case, the Supreme Court used the second part actually limiting the scope of even the first part.’66 Again the word ‘undertaking’ has received conflicting interpretations. In Budge Badge Municipality case, the Supreme Court declined to imbue it with the characteristics of business, trade or manufacture.67 But with a view to avoid a formulation in terms wider than that was strictly necessary for the disposal of case, the Court itself concluded that activities ‘analogous to the carrying out of a trade or business’, as the situation in that case was within the ambit of the expression ‘undertaking’.68 In Hospital Mazdoor Sabha, the Supreme Court not only declined to adopt the rule of construction noscitur a sociis69 but even in

formulation of working principle. It refrained from using the expression ‘analogous to the carrying out of a trade or business’ but coined the phrase ‘organized or arranged’.70 Nevertheless, in Madras Gymkhana Club case, the Supreme Court read the aforesaid observations and expression ‘undertakings’ so that the employer’s activity must not only be analogous to carrying out a ‘trade or business’ but must also be organized as business or trade is ordinarily organized.

S. Bangalore Water Supply and Sewerage Board Case: 1. An Epoch-making Judgement These conflicting opinions of the Supreme Court during the last 25 years left the coverage of the expression ‘industry’ more uncertain and vague. This state of affairs led to the constitution of seven members bench71 of Supreme Court in Bangalore Water Supply and Sewerage Board v. Rajappa72 to enter into a detailed examination of earlier decisions with a view to find out a rationale basis for determining whether activities like clubs, educational institutions, research institutes, cooperatives, charitable projects and other ventures including domestic servants and governmental functions fall within or outside the scope of the statutory expression ‘industry’. The majority opinion not only answered it in affirmative but exploded the judicial myth. The Court, while restoring its ruling in Budge Budge Municipality Corporation of City of Nagpur and Hospital Mazdoor Sabha (supra), overruled its decisions in Safdarjang Hospital, National Union of Commercial Employees, Delhi University, Gymkhana Club and Dhanarajgiri Hospital (supra) cases. However, in a partially dissenting opinion, Justices Jaswant Singh and Tulzapurkar (though they agreed in the conclusion) were not in favour of giving such a wide coverage to the term ‘industry’. Indeed, both majority and minority decisions expressed the view that the matter should be clarified by the legislature by a suitable amendment. For the purposes of analysis, the majority judgement may conveniently be considered under three headings, viz., areas of conflict, interpretation of ‘industry’, and formulation of tests for determining the scope of the term ‘industry’. 1. Area of Conflict. The Supreme Court itself itemized the area of conflict namely: (i) (a) Are establishments run without profit–motive, industries? (b) Are charitable institutions industries?

(c)

Do undertakings governed by a no-profit-no-loss rule, statutorily or otherwise fastened, fall within the definition in Section 2 (j)? (d) Do clubs or other organizations (like the YMCA), whose general emphasis is not on profit-making but fellowship and self-service fit into the definitional circle? (e) To go to the core of the matter, is it an inalienable ingredient of ‘industry’ that it should be plied with a commercial object? (ii) (a) Should cooperation between employer and employee be direct in so far as it related to the basic service or essential manufacture which is the output of the undertaking? (b) Could a lawyer’s chamber or chartered accountant’s office, a doctor’s clinic or other liberal professions, occupations or calling be designated an industry? (c) Would a university or college or school or research institute be called an industry? (iii) (a) Is the inclusive part of the definition in Section 2 (j) relevant to the determination of an industry? If so, what impact does it make on the categories? (b) Do domestic services—who slave without respite become ‘industries’ by this extended sense? (iv) Are governmental functions, stricto sensu, industrial and if not, what is the extent of the immunity of instrumentalities of government? (v) What rational criterion exists for a cutback on the dynamic potential and semantic sweep of the definition, implicit in the industrial law of a progressive society geared to greater industrialization and consequent concern for regulating relations and investigating disputes between employers and employees as industrial processes and relations become more complex and sophisticated and workmen become more rightconscious? (vi) As the provision now stands, it is scientific to define ‘industry’ based on the nature—the dominant nature of the activity, i.e., on the terms of the work, remuneration and conditions of service which bond the two wings together into an employer-employee complex?73 Did these issues figure in the judgement? 2. Interpretation of the Word ‘Industry’. In order to answer these issues, Justice Krishna Iyer considered the word ‘industry’ in the light of historical perspective, objects and reasons, international thoughts, popular undertaking, contextual connotation and suggestive subject-matters, dictionary meaning and

social perspective in Part IV of the Constitution. In this perspective, Justice Krishna Iyer interpreted the word ‘undertaking’ as follows: The expression ‘undertaking’ cannot be torn off the words whose company it keeps. If birds of a feather flock together and nositur a sociis is commonsense guide to construction, ‘undertaking’, must be read down to confirm to the restrictive characteristic shared by the society of words before and after. Nobody will torture ‘undertaking’ in Section 2(j) to mean meditation or Mushaira which are spiritual and aesthetic undertakings. Wide meanings must fall in line and discordance must be excluded from a sound system.74 The aforesaid principle was also applied in interpreting the expressions ‘service’, ‘calling’ and the ‘like’. Further, the word ‘trade’, according to Justice Iyer, embraced ‘functions of local authorities and even profession’. The term ‘manufacture’ received the attention of Chief Justice Beg who explained it to mean: … a process of manufacture in which the employers may be engaged. He, however, pointed out that the term ‘employer’ necessarily postulated employees, without whom there could be no employer. Chief Justice Beg also emphasized the inclusive character of second part of the definition which: Makes the concept more nebulous as it obviously extends the definition to any calling, service, employment, handicraft or industrial occupation or avocation of workmen. The aforesaid interpretation given by Chief Justice Beg is in conformity with the legislative intent of Section 2 (j) of the Industrial Disputes Act. 3. Formulation of Test. Justice Krishna Iyer, after review of Supreme Court decisions, laid down the following tests for determining the scope of the term ‘industry’: (a) Where (i) systematic activity, (ii) organized by cooperation between employer and employee (the direct and substantial element is chimerical), (iii) for the production and/or distribution of goods and services calculated to satisfy human wants and wishes (not spiritual or religious but inclusive of material things or services geared to celestial bliss, e.g., making on a large scale prasad or food), prima facie, there is an ‘industry’ in that enterprise. (b) Absence of profit motive or gainful objective is irrelevant, be the venture

in public, joint, private or other sector. (c) The true focus is functional and the decisive test is the nature of the activity with special emphasis on employer-employee relations. (d) If the organization is a trade or business, it does not cease to be one because of philanthropy animating the undertaking although Section 2(j) uses the words of the widest amplitude in its two limbs, their meaning cannot be magnified to overreach itself. Nevertheless, Justice Krishna Iyer pointed out that although Section 2(j) used words of widest amplitude in its two limbs, their meaning could not be magnified to overreach itself and observed: Undertaking must suffer a contextual and associational shrinkage as explained in Banerji (supra) and in this judgement, so also, service, calling and the like. This yields the inference that all organized activities possessing the triple elements in 3 (a) (supra), although not trade or business, may still be ‘industry’ provided the nature of the activity, viz., the employeremployees basis bears resemblance to what we find in trade or business. This takes into the fold ‘industry’, undertaking, calling and services ventures ‘analogous to the carrying on the business’. All features, other than the methodology of carrying on the activities, viz., in organizing the cooperation between employer and employees, may be dissimilar. It does not matter, if on the employment terms there is analogy.75 However, where a complex group of activities were involved, he adopted the ‘dominant nature test’ enunciated in Corporation of City of Nagpur and explained: Where a complex of activities, some of which qualify for exemption, others not, involves employees of the total undertaking, some of whom are not ‘workmen’ as in the University of Delhi case (supra) or some departments are not productive of goods and services if isolated, even then, the predominant nature of the services in the integrated nature of the departments as explained in the Corporation of Nagpur (supra), will be the true test. The whole undertaking will be ‘industry’ although those who are not ‘workmen’ by definition may not benefit by the status.

Applying the aforesaid tests in specific cases, the Court held that activities such as clubs,76 educational institutions,77 research institutes, charitable institutions,78 cooperative societies79, hospitals and local bodies80 and kindred ventures (which fulfilled the triple test laid down in this case) fell within the purview of ‘industry’. A wide amplitude has been given to the term ‘industry’ in six different ways: First, The Court held that a single lawyer, a rural medical practitioner or urban doctor with an assistant and/or menial servant were not running an industry because there was nothing like organized labour in such employment. The image of industry or even quasi-industry was one of plurality of workmen, not an isolated or single assistant or attendant. The category was more or less like personal avocation for livelihood taking some paid or part-time work from another. Second, he held that charitable institutions (where the establishment was oriented and a human mission fulfilled by men who worked not because they were paid wages, but because they shared the passion for the cause and derived job satisfaction from their contribution), were not industries. Third, he held that self-serving members’ clubs were not industry because in such a club, the dynamic aspect was self-service. He accordingly held that in such an institution, a part-time sweeper or scavenger or multi-purpose attendant would not be considered to be employed in any industry because this marginal element would not transform a little association into an ‘industry’. Fourth, he held that restricted category of cooperatives, even gurukulas and little research laboratories were not industry if no employee were hired without destroying the non-employee character of the unit. Fifth, he excluded regal and sovereign functions (described as ‘the primary and alienable function of a constitutional government’) from the purview of industry. Sixth, he also excluded constitutional and competently enacted legislative provisions from the ambit of ‘industry’. Accordingly, he held that petty handicraftsmen, domestic servants, cobblers, cycle repairers, butchers, bakers, candle-stick makers, the single lawyer, rural medical practitioner, urban doctor, rural engineer with or without a little assistance or menial servants, self-service members’ club and charitable institutions oriented on human mission were outside the purview of ‘industry’. We are in basic agreement with the aforesaid line of approach. However, the exclusion of certain categories of employers from the ambit of the expression ‘industry’ needs consideration. First, Justice Krishna Iyer has excluded ‘a single lawyer, a rural medical practitioner, urban doctor and a rural engineer with a little assistance or menial

servant’ from the purview of the word ‘industry’ on the ground that: … there is nothing like organized labour in such employment. The image of industry or even quasi-industry is one of a plurality of workmen, not an isolated or single little assistant or attendant. The latter category is more or less like personal avocation for livelihood taking some paid or part-time work from another. The whole purpose of the Industrial Disputes Act is to focus on resolution of industrial disputes and regulation of industrial relations and not to meddle with every little carpenter in a village or blacksmith in a town who sits with his son or assistant to work for the customers who trek in. The ordinal spectacle of a cobbler and his assistant or a cycle repairer with a helper, we come across in the pavements of cities and towns, repels the idea of industry and industrial disputes.81 It is difficult to agree with this line of reasoning. It will be appreciated that a solicitor, a doctor or an engineer may himself carry on his entire professional work; or he may, with other experts in the same profession, organize a firm or nursing home to carry on the work in an institutionalized manner. While we cannot distinguish in law relating to labour management relations a solicitors’ firm, or nursing home from a single solicitor, engineer or doctor conducting his work with the aid of personnel employed by him, there is vital difference between these cases and the case of a single solicitor, doctor, engineer, etc. conducting his entire professional work himself.82 It is respectfully submitted that unless a person employs another or is employed by another, the question of his being an ‘employer’ or a ‘workman’ within the meaning of the Industrial Disputes Act, 1947 does not arise. Since a solicitor, doctor, engineer and the like acting individually and rendering all service by himself is neither an employer nor workman, he cannot be a participant in an ‘industrial dispute’. On the other hand, a single solicitor, doctor or engineer employing personnel to assist him in his work is as much an ‘employer’ as a firm/nursing home employing such personnel and if the employed personnel are ‘workmen’ within the meaning of the IDA, an ‘industrial dispute’ between them and their employer may well arise. Second, Justice Krishna Iyer, like Justice Subba Rao,83 also excluded small professional, handicraftsman, butcher, baker, candle-stick maker and domestic servant from the purview of the definition of ‘industry’ on the ground

that ‘there was nothing like organized activity in such employment.’ It is submitted that the grounds did not emanate from the words used in the definition of industry though the interpretation did limit the amplitude of the words used therein. Section 2(s) of the IDA defines ‘workman’ to mean inter alia, ‘any person employed in any industry’. Obviously, the expression ‘industry’ in this section is used in the same sense as in Section 2(j) because if a person is employed in an activity which is not ‘industry’, he cannot be a workman. However, it cannot be said that domestic servants are not engaged in ‘any calling, service, employment, handicraft, industrial occupation or avocation’. They cannot, therefore, be excluded on the ground of absence of industry. Here, we would like to emphasize that merely because the activity is held to be an ‘industry’, the IDA does not become applicable. There must also be disputes between employers and employers, workmen and workmen or workmen and employers. Further, barring cases falling under Chapters V-A and V-B, there must also be, an ‘industry dispute’. It is these requirements which ensure that the IDA deals with disputants who are ‘employers’ and ‘workmen’. It is significant to note that Chief Justice Beg who concurred with Justice Krishna Iyer in case under review, expressly held that: … the second part, relating to workman, must necessarily indicate something, which … may include an ‘industry’ consisting of individual handicraft or workmen only.84 The aforesaid observation cuts the line of thinking followed by Justice Krishna Iyer. Third, the exclusion of ‘regal or sovereign functions of the State’ leaves much to be desired. We on our part, find it difficult to accept the decision as correctly interpreting the legislative intent. Our difficulty primarily arises from the definition of ‘workman’. Omitting words and expressions that are not germane to the present discussion, Section 2 (s) of IDA reads: Workman means any person… employed in any industry… but does not include any such person: (i) who is subject to Army Act, 1950, or the Air Force Act, 1950 or the Navy (Discipline) Act 1934, or (ii) who is employed in police service or as an officer or other employee of a prison… If the expression ‘industry’ did not include ‘regal or sovereign functions of State’, strictly understood or ‘government function’, why did the legislature write exclusory clauses (i) and (ii). The argument that it did so ex abundanti

cantela is self-defeating because the question then will arise as to why make an exception in regard only to some and not in regard to all persons engaged in ‘regal or sovereign functions of State’? After all army, air force, navy, police and prison do not exhaust the category of ‘regal and sovereign functions of State’. On the other hand, if ‘regal and sovereign functions of the State’ are included within the definition of ‘industry’, the exclusory provisions make sense. Fourth, the Court has also excluded ‘stray wage earning employees’ or marginally employed on regular basis for hire, scavengers, servants, auditors or accountants employed on wages in charitable institutions (which were oriented on a human mission fulfilled by men who work not because they are paid wages but because they share the passion for the cause and derive job satisfaction from their contribution) from the purview of ‘industry’ because: (i) … the substantive nature of the work, as distinguished from trivial terms, is rendered by voluntary wagesless sishyas. (ii) in the crucial, substantial and substantive aspect of institutional life, the nature of the relations between the participants is non-industrial … (iii) We must look at the predominant character of office institution and the nature of the relations resulting in the production of goods and services.85 Are these relevant factors? Are the problems of labour management relations resolved because the substantive nature of work is rendered by voluntary wagesless sishyas? Are the economic needs of the excluded categories of employees satisfied by the fact that substantive nature of work is rendered by voluntary wageless sishyas. These and other problems involved hereunder would be discussed under three heads. (I) In the law relating to labour management relations, we are essentially concerned with the relationship between the employer and the employees: in particular, we are not concerned with the relationship of the employer with the outside world. Further, an employee is vitally concerned with his own employment, non-employment, terms of employment or conditions of service and his interest is not affected by the nature of service which the employer renders to the outside world (whether such services be spiritual, pious, philanthropic or even professional or because the substantive nature of work is rendered by voluntary wageless sishyas). Under the circumstances, it is difficult to ignore the factual existence of employer-employee relationship even on the ground that substantive nature of work is rendered by voluntary wageless sishyas. (II) The decision brought back the ruling in Delhi University case where it was held that the employment of subordinate staff who came within the

expression ‘workmen’ did not affect the issue as they not only comprise ‘very minor and insignificant number of persons’ but also, played, ‘such a minor, subordinate and insignificant part’ that it would be unreasonable to allow this work to lend its industrial colour to the principal activity of the university which is imparting education. It suffices to mention that the Supreme Court in the case under review overruled Delhi University case. (III) It appears that Justice Krishna Iyer who had earlier at one place held that: The test is not the predominant number of employees entitled to enjoy the benefit of the Act. In fact, the Court applied that test of ‘predominant number’ while excluding these categories of workers. He, however, asserted that the test which he was applying was predominant character of the institution. The fact that majority of persons engaged in the aforesaid charitable institution are wageless sishyas, we submit, is no ground for denying the protection of the IDA to those, even stray wageearning employees who are otherwise covered by the provisions of IDA.

T. Application of the Bangalore Water Supply Case The net effect of the decision of the Bangalore Water Supply & Sewerage Board (supra) was that several activities/establishments such as research and development organizations,86 public utility services such as post and telegraph,87 telephones88, charitable and social organizations, Tirumala Tirupati Devesthanam,89 Bihar Relief Committee of a humanitarian,90 Government Security Paper Mills,91 Hindustani Dawakhana,92 public service commissions,93 construction and maintenance of national and state highways,94 N.E.S. Block, Coir Board (a statutory body) community development (establishment of the government), Southern Railway, Kerala State Civil Supplies Corporation Ltd, Trichur, municipal council and Kerala State Electricity Board,95 Christian Medical College Hospital attached to the Christian Medical College,96 Bihar Khadi Gramodyog Sangh,97 Provident Fund Organization,98 Indian Institute of Petroleum,99 basic training institutes,100 Corporation of Cochin,101 Karnataka State Road Corporation,102 trade unions103 (carrying on activities other than trade unionism), Indian Navy Sailors’ Home Department104 (to provide facilities like loading, cafeteria, indoor games, reading rooms, etc., to the sailors and their guests not provided by navy establishments due to lack of space and exigencies

of service), Kamla Retreat105 (a place of rest and relaxation), public health engineering department of the state of Bihar106, Doordarshan,107 irrigation department,108 forest department109, societies promoting health and training of women in family planning programme of the state government110, labour indentor carrying the business of recruiting labour,111 a cooperative milk society,112 a hair cutting saloon,113 the Marmat section of Travancore Devaswom Board engaged in the construction of buildings connected with dairy farms, schools, hostels, cottage industries and workshops and shops,114 the activities of Grain Dealers’ Association whose principal activity was to transport goods from the government godowns to respective ration shops of its members,115 a milk supply scheme, a government undertaking supplying milk to city of Jaipur under animal husbandry department,116 the activities of the Khadi Gramodyog Sangh,117 the activities of the survey and investigation division of the irrigation department of the govt.,118 the Chambal Hydel Irrigation Project,119 the Salandi Irrigation Project;120 the Tea Board constituted under the Tea Act, 1953,121 the Bihar Relief Committee which undertook minor irrigation schemes in the state of Bihar with all ancillary systematic operations,122 a shop governed by the provisions of the U.P. Shops & Establishments Act,123 the construction work of the Tenughat Dam carried on by the government of Bihar,124 the Balemala Dam Project which has the ultimate object of generating electrical power to run different business and industries,125 the telephone126 and telegraph,127 Hindustan Dwakhana128, Security Paper Mills Hoshangabad129, services like supply of water, electricity, lift, sanitation, made available to tenants by company,130 National Remote Sensing Agency having a systematic activity or organization with cooperation between it and its employees,131 the Baikunth Nath Debasthan Mandir Trust,132 Sahkari Bhumi Vikas Bank,133 U P Scheduled Caste Finance and Development Corporation,134 barrage division under irrigation department of state governments,135 Railways,136 a society formed for the purpose of protection, care and treatment of old, infirm and injured cows, calves, bulls etc. and also engaged in activities of selling milk, etc.,137 professional activities of architects,138 Punjab State Tubewell Corporation,139 Indian Red Cross Society, Haryana state branch,140 Kurukshetra University and persons employed therein as carpenters,141 Industrial Development Centre for Tools and Dyes, Jagadhri providing technical guidance, testing and certification facilities apart from providing services and facilities such as heart treatment, anodizing, etc., charge money for the use of various

machines on hourly basis,142 Central Research Institute for Yoga143, lac manufacturing factory run by the department of forest,144 irrigation department of the government of the state145, periodic maintenance, repair of hand pumps installed by Panchayat Samitis146 Haryana Woollen Development Corporation147 and rural engineering services148 were held to be ‘industry’ under Section 2 (j). On the other hand, activities/establishments such as octroi department of municipality,149 Central Institute of Fisheries150, works department of government,151 judicial department152 drought relief work by the government153, retail cloth shop run by two partners with the assistance of one salesman,154 firm or trademarks agents;155 trust of a temple156 a building let out on rent by a palace administration board managing the estate of royal family for the benefit of the junior members of the family,157 the activities of the Farashkhana and Baggikhanna including Kapatdwara, horse breeding and riding section of the city palace of were held not be ‘industry’ under Section 2 (j).

U. Response of the [First] National Commission on Labour The scope of the word ‘industry’ also continues to engage public attention. In 1966, the Government of India appointed the National Commission on Labour, inter alia, to report on changes in the existing labour legislation. After a very thorough investigation of the industrial law, the Commission submitted its recommendation, in 1969. In respect to the definition of ‘industry’, the Commission recommended that: In our view, there appears to be no valid ground for narrowing the scope of the definition of ‘industry’ as it stands today. In fact, there is a case for enlarging its scope so as to cover teaching or educational institutions or institutes, universities, professional firms and offices etc., whose employees are at present denied the protection of the provisions of the Industrial Disputes Act. In saying so, we are not unmindful of the fact that the problem of industrial relationship pertaining to the administration of teaching institutions and universities presents several distinctive features and they will have to be carefully considered before such institutions are brought within the purview of the definition of ‘industry’. The autonomy of the universities is a very important concept which is respected in all

democratic countries. Besides, the salaries of teachers employed by the university or colleges affiliated to it are, in some cases, determined not be the university or the colleges on the one hand and the teachers on the other, but the University Grants Commission and state governments and the Union Government also come into the picture. The staff employed by educational institutions broadly consists of two categories, viz., administrative and teaching; and the problems of these two categories of staff may not always be the same or identical. That is why we would suggest that the extension of the scope of the definition of ‘industry’ should be made by stages in a phased manner over a reasonable period, depending upon the administrative arrangements to meet the requirements of the law and upon the consideration of a number of other relevant factors. Continuing it said: Besides, it is necessary to emphasize that if the scope of the concept of ‘industry’ has to be expanded to cover teaching institutions and universities, it may become necessary to provide for a different set-up to deal with the problems or disputes which may arise in such institutions. As we have just pointed out, these institutions have certain special distinctive characteristics, and even if employees working in them are, in future, included within the definition of ‘workmen’, care will have to be taken to see that a special procedure, self-contained in character, is provided for dealing with grievances or industrial disputes raised by the employees and a special machinery set up in this behalf. But these are matters of detail and we do not propose to deal with them.158 The Commission recommended that government should consider whether in respect of such hospitals and non-profit making philanthropic institutions which devote themselves to humanitarian work, a special procedure could not be devised to avoid hardship to the community and at the same time, give satisfaction to the workers engaged therein.

V. Parliament’s Disapproval of Judicial Response The Parliament through the Industrial Disputes (Amendment) Act, 1982,

disapproved of the widening of the coverage of the term ‘industry’ by the Supreme Court in Bangalore Water Supply and Sewerage Board v. Rajappa (supra), by excluding a number of activities such as hospitals, educational institutes, scientific and research institutions, charitable, social and philanthropic organizations and institutions performing sovereign functions. Thus, Section 2 (j) of Industrial Disputes (Amendment) Act, 1982, defines the term ‘industry’ to mean: Any systematic activity carried on by cooperation between an employer and his workmen (whether such workmen are employed by such employer directly or by or through any agency, including a contractor) for the production, supply or distribution of goods or services with a view to satisfying human wants or wishes (not being wants or wishes which are merely spiritual or religious in nature), whether or not — (i)

any capital has been invested for the purpose of carrying on such activity or (ii) such activity is carried on with a motive to make any gain or profit, and includes – (a) any activity of the dock labour board established under Section 5-A of the Dock Workers (Regulation of Employment) Act, 1948 (9 of 1948); (b) any activity relating to the promotion of sales or business or both carried on by an establishment But does not include — (a) any agricultural operation except where such agricultural operation is carried on in an integrated manner with any other activity (being any such activity as is referred to in the foregoing provisions of this clause) and such other activity is the predominant one. Explanation—For the purposes of this sub-clause, ‘agricultural operation’ does not include any activity carried on in a plantation as defined in clause (f) of Section 2 of the Plantations Labour Act, 1951, or (b) hospitals or dispensaries, or (c) educational, scientific, research or training institutions, or (d) institutions owned or managed by organizations wholly or

substantially engaged in any charitable, social or philanthropic service, or (e) khadi or village industries, or (f) and activity of the government relatable to the sovereign functions of the government, all the activities carried on by the department of the Central Government … activities … dealing with defence research, atomic energy and space, or (g) any domestic service, or (h) any activity, being a profession practised by an individual or body of individuals, if the number of persons employed by an individual or body of individuals in relation to such profession is less than ten, or (i) any activity, being an activity carried on by a cooperative society or a club or any other like body of individuals, if the number of persons employed by the cooperative society, club or other like body of individuals in relation to such activity is less than ten. However, almost 30 years have elapsed since the aforesaid amendment came on the statute book, but it has not been enforced till the date. This has led the Supreme Court to observe that ‘we have not been able to gather as to why even 6 years after the amendment has been brought to the definition of industry in Section 2(j) of the Act, the same has not been brought into force. The Court on more than one occasion, has indicated that the position should be clarified by an appropriate amendment and when keeping in view the opinion of this Court, the law was sought to be amended, it is appropriate that the same should be brought into force as such or with such further alteration as may be considered necessary and the legislative view of the matter is made known and the confusion in the field is cleared up.’159

Issuance of Writ of Mandamus for giving effect to Amendment in ID Act Can a High Court issue a writ of mandamus to enforce clause (c) of the Industrial Disputes (Amendment) Act, 1982 which excludes, inter alia ‘charitable trust’ from the definition of ‘industry’? This issue was raised in Union of India v. Shree Gajanan Maharaj Sansthan.160 The Supreme Court answered the question in negative. The Court had earlier directed the Union of

India to examine and decide within six months as to when it would be feasible to give effect to sub-section (2) of Section 1 of the Industrial Disputes (Amendment) Act, 1982. In response, the Central Government filed an affidavit stating the various steps taken by it which are as follows: (i) (ii)

(iii)

(iv)

(v)

(vi)

(vii)

(viii)

(ix)

The Industrial Disputes (Amendment) Bill, 1982 was introduced to amend the definition of the term ‘industry’. The government also introduced the Hospitals and Other Institutions (Settlement of Disputes) Bill and Education Institution (Settlement of Disputes) Bill in the Rajya Sabha. The former bill was enacted but the latter bill was not pursued because of opposition to various provisions. As a consequence, the amended definition of the term 'industry' could not be brought into effect in the absence of alternative grievance machinery for employees in hospitals, educational institutions, etc., who would have been denied the protection of the Industrial Disputes Act, 1947. Another attempt was made by introducing, the Hospitals and other Institutions (Redressal of Grievances of Employees) Bill but it lapsed with the dissolution of the Lok Sabha in 1989. The bipartite committee for new industrial relations law under the chairmanship of G Ramanujam was set up by the government for formulation of comprehensive industrial relations law but the committee member were not unanimous on the definition of the term 'industry'. A proposal for modification of the definition of the term ‘industry’ was placed in the standing labour committee. Thereafter, the issue was referred to the new Bipartite committee to formulate a comprehensive Industrial Relations Bill. It was wound up as no consensus emerged. The Ministry of Labour prepared a proposal to amend the Industrial Disputes Act, 1947 including definition of ‘industry’ and the proposal was sent to committee of secretaries. In the meeting of Committee of Secretaries (COS) on 15 February 1999, it was agreed that an inter-ministerial group would be set up by the Ministry of Labour of finalize the proposals. Accordingly, an interministerial group was set up with the representatives of 13 ministries/department. Meetings of the inter-ministerial group with the representatives of all the 13 ministries/department were held on 14 May 1999 and 11 January 2001 to consider the amendment proposals. Meetings of COS under the chairmanship of the cabinet secretary were

held on 15 February 1999, 3 November 1999, and 21 January 2000 to consider the amendment proposals. (x) The proposal was revised/recast on the basis of recommendations made by the group and inter-ministerial committee of secretaries. (xi) Group of ministers was constituted under the chairmanship of Dy. Chairman, Planning Commission to suggest the amendment proposals. The group consisted of ministers of nine ministries. (xii) The group of ministers had met on 11 April 2000, 12 May 2000 and 27 May 2000. (xiii) The proposal to amend the Industrial Disputes Act was again revised on the basis of recommendations of group ministers. (xiv) After finalizing the proposals, it was sent to Ministry of Law, Justice and Company Affairs for the opinion of department of legal affairs which has concurred with the proposals and a draft bill is being drafted by the legislative department, Ministry of Law, Government of India. The Supreme Court, in view of the above, held that it would not be feasible for government to set out any definite day as to when they can take action as indicated by the High Court and therefore, the order made by the High Court cannot be given effect. The court added that though there has been a sense of urgency on the part of the government in this regard, it has not been able to take a decision under the circumstances set forth by then in which writ of mandamus has been issued to the government to take action and to indicate as to when it would be feasible to appoint a date for bringing into force the amending Act. In other respects, the order made by the High Court was maintained by the Supreme Court.

W. Current Confusion Irrigation Department – If Industry While in Des Raj v. State of Punjab161, the Supreme Court held that irrigation department was an ‘industry’ under Section 2 (j), a two-judge bench of the Supreme Court in Executive Engineer, State of Karnataka v. K Soonasetty162 following the decisions in Union of India v. Jai Narain Singh163 and State of H P v. Suresh Kumar Varma164 held it to be not an ‘industry’. The Court ruled: The function of public welfare of the State is a sovereign function. It is the constitutional mandate under the Directive Principles, that the government should bring about welfare State

by all executive and legislative actions. Under these circumstances, the State is not an ‘industry’ under the Industrial Disputes Act. The Allahabad High Court in State of Uttar Pradesh v. Industrial Tribunal IV, Agra & Another165 following the decision of the Supreme Court in General Manager Telecom v. A Sriniwasa166 held that irrigation department of the state is not an industry. But the Patna High Court in State of Bihar v. Gajadhar Singh167 held that the department of irrigation is an ‘industry’ under Section 2(j) of the Industrial Disputes Act, 1947.

Postal and Telecom Departments – If Industry In Sub Divisional Inspector of Post Vaikam v. Theyyam Joseph168, a question arose whether the establishment of the Sub-divisional Inspector of Post was an 'industry' under the Industrial Disputes Act, 1947. A two-judge bench of the Supreme Court answered the question in negative and held that the functions of the postal department are part of the sovereign functions of the State and it is, therefore, not an industry within the definition of Section 2(j) of the Industrial Disputes Act, 1947. Incidentally, this decision was rendered without any reference to the seven judge bench decision in Bangalore Water Supply case. Again in Bombay Telephone Canteen Employees Association, Prabhadevi Telephone Exchange v. Union of India169, the Supreme Court held that workmen employed in the departmental canteen of Telephone Nigam Limited holding civil posts were not workmen within the meaning of the Industrial Disputes Act. In General Manager, Telecom v. S Srinivasa Rao170, the question whether postal and telecom department was an ‘industry’ was placed specifically before the bench of three judges was whether the telecom department of the Union of India was an ‘industry’. A three judge bench of the Supreme Court answered the question in affirmative and observed: With respect, we are unable to subscribe to this view for the obvious reason that it is in direct conflict with the seven judge bench decision in Bangalore Water Supply case (supra) by which we are bound. It is needless to add that it is not permissible for us, or for that matter any bench of lesser strength, to take a view contrary to that in Bangalore Water Supply case (supra) or to bypass that decision so long as it holds

the field. Moreover, that decision was rendered long back, nearly two decades earlier and we find no reason to think otherwise. Judicial discipline requires us to follow the decision in Bangalore Water Supply case (supra) and Bombay Telephone Canteen Employees’ Association case (supra) cannot be treated as laying down the correct law. In Senior Superintendent of Post Office, Postal Department, Ludhiana v. Baljit Singh171, the Punjab and Haryana High Court held that postal department is an ‘industry’ under Section 2(j) of IDA.

National Remote Sensing Agency In National Remote Sensing Agency v. Additional Tribunal-cum-Additional Labour Court, Hyderabad172, the Andhra Pradesh High Court held that the National Remote Sensing Agency which carries on systematic activity in cooperation with employees for production and distribution of material services meant to satisfy human wants and wishes does not discharge any sovereign functions and is therefore, an industry under Section 2(j) of the Industrial Disputes Act. The court also held that absence of profit motive is not a decisive factor.

Research Laboratory – If Industry In Physical Research Laboratory v. K G Sharma,173 a question arose whether Physical Research Laboratory hereinafter referred to as PRL, is an ‘industry’ within the meaning of Section 2(j) of the Industrial Disputes Act. The facts of the case were that the respondent was appointed by PRL. He was transferred to photography documentation services on a post which was non-technical and administrative. On 31 December 1978 on attaining the age of 58 years, he was retired from service with effect from 1 January 1979. Aggrieved by his retirement at the age of 58 years and not at 60, he filed a writ petition in the High Court of Gujarat but it was withdrawn. He then filed a complaint before the labour commissioner who, on the basis thereof, made a reference to the labour court, Ahmedabad. The labour court held that PRL is carrying on, in an organized and systematic manner, the activity of research in its laboratory by active cooperation between itself and its employees and the discoveries and inventions made would be eligible for sale, hence PRL is an industry. It accordingly held that the respondent was entitled to continue in service up to the age of 60 years. As the respondent had already completed the age of 60 years by

then, no order of reinstatement was passed but only back wages for those two years were ordered to be paid. This decision was upheld by the High Court. Thereupon, the appellant filed an appeal by special leave before the Supreme Court. It was urged on behalf of the appellants that PRL being a purely research institute of the Central Government, engaged in carrying out fundamental research regarding the origin and evolution of the universe and the atmosphere of the earth is not an ‘industry’ as defined by Section 2 (j). Further, it carried on research function and not a commercial venture, hence it is not an industry. Accepting the contention, the Supreme Court observed: The question whether PRL is an ‘industry’ under the I D Act will have to be decided by applying the principles laid down in Bangalore Water Supply case but, at the same time, it has to be kept in mind that these principles were formulated as this Court found the definition of the word ‘industry’ vague and rather clumsy, vaporous and tall-and-dwarf. Therefore, while interpreting the words ‘undertaking’, ‘calling’ and ‘service’ which are of much wider import, the principle of noscitur a sociis was applied and it was held that they would be ‘industry’ only if they are found to be analogous to trade or business. Furthermore, an activity undertaken by the government cannot be regarded as ‘industry’ if it is done in discharge of its sovereign functions. One more aspect to be kept in mind is that the aforesaid principles are not exhaustive either as regards what can be said to be sovereign functions or as regards the other aspects dealt with by the Court. The Court added: PRL is an institution under the Government of India’s department of space. It is engaged in pure research in space science. The purpose of the research is to acquire knowledge about the formation and evolution of the universe but the knowledge thus acquired is not intended for sale. The material on record further discloses that PRL is conducting research not for the benefit or use of others. Though the results of the research work done by it are occasionally published, they have never been sold. There is no material to show that the knowledge so acquired by PRL is marketable or has any commercial value. It has not been pointed out how the

knowledge acquired by PRL or the results of the research occasionally published by it will be useful to persons other than those engaged in such type of study. The material discloses that the object with which the research activity is undertaken by PRL is to obtain knowledge for the benefit of the department of space. Its object is not to render services to others nor in fact it does so except in an indirect manner. Neither from the nature of its organization nor from the nature and character of the activity carried on by it, can it be said to be an ‘undertaking’ analogous to business or trade. It is not engaged in a commercial or industrial activity and it cannot be described as an economic venture or a commercial enterprise as it is not its object to produce and distribute services which would satisfy wants and needs of the consumer community. It is more an institution discharging governmental functions and a domestic enterprise than a commercial one. PRL is not an industry even though it is carrying on the activity of research in a systematic manner with the help of its employees as it lacks that element which would make it an organization carrying on an activity which can be said to be analogous to the carrying on of a trade or business because it is not producing and distributing services which are intended or meant for satisfying human wants and needs, as ordinarily understood.

Forest Department – If industry The bench of three judges in Chief Conservator of Forests v. Jagannath Maruti Kondhare174 held that ‘Social Forestry Department’ is covered by the definition of ‘industry’ whereas the two-judge bench of the Supreme Court in State of Gujarat v. Pratamsingh Narsingh Parmar,175 the question for consideration was whether the forest department in the state of Gujarat where the respondent was appointed as a clerk could be held to be an ‘industry’ under the Act so that an order of termination in contravention of Section 25F of the Act would get vitiated. The Supreme Court held that the forest department to which the respondent had been recruited could not be held to be ‘industry’ within the meaning of Section 2(j) of the Act and as such, the compliance with Section 25F of the Act did not arise. However, in Range Forest Officer v. Galabhai Kalabhai Damor176, the Gujarat High Court held the activities of the forest department engaged in processing of sandalwood at Tiruppattur Sandalwood Depot cannot be said to be in discharge of sovereign function of the state. It is nothing but a commercial activity intended to regulate and control the movement

of sandalwood to augment the income of the state and therefore, an ‘industry’ under Section 2(j) of IDA.

Zoological Park The Allahabad High Court in State of Uttar Pradesh v. Jai Pal Singh & Another177 held that Kanpur Zoological Park is an ‘industry’ under Section 2(j) of the ID Act.

Radio and Doordarshan – If Industry In All India Radio v. Santosh Kumar and Another,178 the question arose whether All India Radio and Doordarshan Kendras are industries within Section 2(j) of the Industrial Disputes Act, 1947. The contention of the appellant was that All India Radio and Doordarshan Kendra discharge sovereign functions of the State and they are not industries within the meaning of Section 2 (j) of the ID Act. The Supreme Court dismissed the appeal and held: The functions which are carried on by All India Radio and Doordarshan Kendra cannot be said to be confined to sovereign functions as they carry on commercial activity for profit by setting commercial advertisements telecast or broadcast through their various kendras and stations by charging fees…. Consequently, it must be held that the appellant All India Radio as well as Doordarshan are industries within the meaning of Section 2(j) of the Act and the said definition is operative being applicable at present and as existing on the statute book as on date. Joint Legal Remembrance and Director Litigation, Law Department – if Industry In State of Rajasthan v. Ganeshi Lal179 a question, inter alia, arose whether the law department is an ‘industry’ under the Industrial Disputes Act, 1947. The labour court answered the question in affirmative. The single judge of the High Court approved the decision of the labour court. On appeal in the Supreme Court, it was argued by the State that by no stretch of imagination the law department of the state could be considered to be an 'industry'. It was also submitted that the question whether government departments can be treated as an 'industry' was under consideration of the larger bench of the Supreme Court. The Court held that the labour court and the High Court had not even indicated

as to how the law department is an ‘industry’. It had merely stated that in some cases, irrigation department and public departments have been held to be covered by the definition of ‘industry’. However, this line of view cannot be applied to the law department of the government.

X. Re-examination of the Decision in Bangalore Case In Coir Board Ernakulam v. Indira Devi P S,180 the two-judge bench of the Supreme Court was called upon to examine whether the appellant, Coir Board, is an industry under the Industrial Disputes Act, 1947. In this case, Coir Board set up under the Coir Industry Act, 1953 discharged certain temporary clerks and typists. The discharged employees claimed that their services could only be terminated in accordance with the provisions of the Industrial Disputes Act, 1947. The Kerala High Court held that the Coir Board is an ‘industry’ under the Industrial Disputes Act, 1947. On appeal, the Supreme Court observed: Looking to the uncertainty prevailing in this area and in the light of the experience of the last two decades in applying the test laid down in the case of Bangalore Water Supply and Sewerage Board (supra), it is necessary that the decision in Bangalore Water Supply and Sewerage Board’s case (supra) be reexamined. The experience of the last two decades does not appear to be entirely happy. Instead of leading to industrial peace and welfare of the community (which was the avowed purpose of artificially extending the definition of industry), the application of the Industrial Disputes Act to organizations which were, quite possibly, not intended to be so covered by the machinery set up under the Industrial Disputes Act, might have done more damage than good, not merely to the organizations but also to employees by the curtailment of employment opportunities. Undoubtedly, it is of paramount importance that a proper law is framed to promote the welfare of labour employed in industries. It is equally important that the welfare of labour employed in other kinds of organizations is also promoted and protected. But the kind of measures which may be required for the latter may be different and may have to be tailored to suit the nature of such organizations, their infrastructure and their financial capacity as also the needs of their employees. The elimination of profit motive or a desire to generate income as the

purpose of industrial activity has led to a large number of philanthropic and charitable activities being affected by the Industrial Disputes Act. In a number of cases, where the organization is run by voluntary social workers, they are unable to cope with the requirements of Industrial Disputes Act. This has led to cessation of many welfare activities previously undertaken by such organizations which has deprived the general community of considerable benefit and the employees their livelihood. There are many activities which are undertaken not with a view to secure any monetary returns—whether one labels it as livelihood, income or profit but for other more generous or different motives. Such activities would not normally be labelled as industrial activities but for the wide interpretation given judicially to the term industry in the Industrial Disputes Act. For example, a number of voluntary organizations run workshops in order that the poor and more particularly poor or destitute women may earn some income. Voluntary welfare organizations organize activities like preparation of spices, masalas, pickles so that they secure small orders from industries for poor women. A small number of persons were employed to assist in the activities. The income earned by these activities was distributed to the women who were given such work. Other voluntary organizations organized tailoring or embroidery classes or similar activities for poor women and provided an outlet for the sale of the work produced by them. These persons would otherwise have found it impossible to secure a market for their products. Such organizations are not organized like industries and they do not have the means or manpower to run them as industries. A large number of such voluntary welfare schemes have had to be abandoned because of the wide interpretation given to the term ‘industry’. Apart from above activities, there may be other activities also which are undertaken in the spirit of community service, such as charitable hospitals where free medical services and free medicines may be provided. Such activities may be sustained by free services given by professional men and women and by donations. Sometimes, such activities may be sustained by using the profits in the paid section of that activity for providing free services in the free section. Doctors who work in these hospitals may work for no returns or sometimes, for very nominal fees. Fortunately, philanthropic instinct is far from extinct. Can such philanthropic organizations be called industries? The definition needs reexamination so that while the workers in an industry have the benefit of industrial legislation, the community as such is not deprived of philanthropic and other vital services which contribute so much to its well-being. Educational services and the work done by teachers in educational institutions, research organizations, professional activities, or recreational activities, amateur sports, promotion of arts—fine arts and performing arts, promoting crafts and special

skills, all these and many other similar activities also require to be considered in this context. In fact, in 1982, the legislature itself decided to amend the definition of industry under the Industrial Disputes Act, 1947 by enacting the Amending Act 46 of 1982 and curtailing the coverage of ‘industry’. Unfortunately, despite the legislative mandate, the definition has not been notified by the executive as having come into force. Since the difficulty has arisen because of the judicial interpretation given to the definition of industry in the Industrial Disputes Act, there is no reason why the matter should not be judicially re-examined. In the present case, the function of the Coir Board is to promote coir industry, open markets for it and provide facilities to make the coir industry’s products more marketable. It is not set up to run any industry itself. Looking to the predominant purpose for which it is set up, we would not call it an industry. However, if one were to apply the tests laid down by Bangalore Water Supply and Sewerage Board’s case (supra), it is an organization where there are employers and employees. The organization does some useful work for the benefit of others. Therefore, it will have to be called an industry under the Industrial Disputes Act. We do not think that such a sweeping test was contemplated by the Industrial Disputes Act, nor do we think that every organization which does useful service and employs people can be labelled as industry. We, therefore, direct that the matter be placed before the Hon’ble Chief Justice of India to consider whether a larger bench should be constituted to re-consider the decision of this Court in Bangalore Water Supply and Sewerage Board (supra). The three-judge bench presided over by the Chief Justice in Coir Board Ernakulam, Kerala State v. Indira Devi P S and others181 ruled that the judgement delivered by seven learned judges of this Court in Bangalore Water Supply case does not require any reconsideration on a reference being made by a two-judge bench of this Court, which is bound by the judgement of the larger bench. A Constitution bench of five judges of the Supreme Court was constituted in State of U.P. v. Jai Bir Singh182 on a reference made by a bench of three judges in State of U.P. v. Jai Bir to give findings in an apparent conflict between the decisions of two benches of this Court in Chief Conservator of Forests v. Jagannath Maruti Kondhare of three judges and State of Gujarat v. Pratamsingh Narsinh Parmar of two judges. The bench in its judgement dated 8 May 2005 observed that in construing the definition clause and determining its ambit, one has not to lose sight of the fact that in activities like hospitals and

education, concepts like right of the workers to go on 'strike' or the employer's right to 'close down' and 'layoff' are not contemplated because these are services in which the motto is 'service to the community'. If the patients or students are to be left to the mercy of the employer and employees exercising their rights at will, the very purpose of the service/activity would be frustrated. Hence, it is not necessary to say anything more and leave it to the larger bench to give such meaning and effect to the definition clause in the present context with the experience of all these years and keeping in view the amended definition of 'industry' kept dormant for 23 long years. The cases were, therefore, placed before the Chief Justice of India for constituting a suitable larger bench for reconsideration of the judgement of Bangalore Water Supply & Sewerage Boards.

1 2 3

4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

This was recognized in Corporation of City of Nagpur v. Its Employees, (1960) 1 LLJ 523 (SC) and State of Bombay v. Hospital Mazdoor Sabha, (1960) LLJ 251 (SC). D N Banerji v. P R Mukherjee, (1953) 1 LLJ 195. Federated Municipal and Shire Council Employees' Union of Australia v. Lord Mayor, Alderman, Councillors and Citizens of the Melbourne Corporation, 26 CLR, 5008, 554555. Baroda Borough Municipality v. Its Workmen, AIR 1957 SC 110. Corporation of City of Nagpur v. Its Employees, (1960) 1 LLJ 523. The judgement was delivered by the same bench which decided Hospital Mazdoor Sabha case. The definition in this Act was similar to the definition of ‘industry’ under Section 2 (j). AIR 1978 SC 54. 1991(1) SCALE 655. (2003) 9 SCC 290. State of Bombay v. Hospital Mazdoor Sabha, (1960) 1 LLJ 251 (SC). Management of Safdarjang Hospital v. Kuldip Singh Seth, AIR 1970 SC 1407. Management of Hospital, Orissa v. Their Workmen, (1971) Lab. IC 835 (SC). Dhanrajgiri Hospital v. Workmen, (1975) 2 LLJ 409 (SC). AIR 1978 SC 548. AIR 1978 SC 548. AIR 2000 SC 3116: (2000) 2 LLJ 1382. National Union of Commercial Employees v. M R Mehar, AIR 1962 SC 1080. Id. at 1085. Bar Association Canteen v. Chief Commissioner, Delhi, (1967) 2 LLJ 227 (Delhi).

20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39

40 41 42 43 44 45 46 47 48 49 50

Id. at 230. Id. at 231. Rabindranath Sen v. First Industrial Tribunal, (1963) 1 LLJ 567 (Calcutta). Alien Macgregor Smith Forge v. First Industrial Tribunal, (1963) 1 LLJ 556 (Calcutta). Ram Krishna Ayyar Vaidyanathan v. Fifth Industrial Tribunal, (1968) LLJ 597 (Calcutta). N E Merchant v. Bombay Municipal Corporation, (1968) 1 LLJ (Bombay). T K Menon v. District Labour Officer, (1966) 2 LLJ 613 (Kerala). Fraser and Ross v. District Labour Officer, (1966) 2 LLJ 682 (Madras). Bangalore Water Supply v. Rajappa, AIR 1978 SC 548, 584. Corporation of City of Nagpur v. Its Employees, (1960) 1 LLJ 523. University of Delhi v. Ram Nath, AIR 1963 SC 1873. (1988) 4 SCC 42. Madras Gymkhana Club Employees' Union v. Gymkhana Club, (1967) 2 LLJ 720 (SC). Cricket Club of India v. Bombay Labour Union, (1966) 1 LLJ 775 (SC). AIR 1978 SC 548, 591. Ahmedabad Textile Industry Research Association v. State of Bombay, (1960) 2 LLJ 720 (SC). Ahmedabad Textile Industry Research Association v. State of Bombay, (1960) 2 LLJ 720 at 724. Federation of Indian Chamber of Commerce and Industry v. Their Workmen, (1971) 2 LLJ 630 (SC). Id. at 631. Workmen v. Management of Indian Standard Institution, (1976) 1 LLJ 33 (SC). This decision has been overruled by the Supreme Court in its subsequent judgement in the Bangalore Water Supply case. Corporation of the City of Nagpur v. Its Employees, AIR 1960 SC 523, 535. State of Bombay v. Hospital Mazdoor Sabha, (1960) 1 LLJ 251 (SC). Madras Gymkhana Club Employees’ Union v. Madras Gymkhana Club, (1967) 2 LLJ 720. Travancore Devaswom Board v. State of Kerala, (1963) 2 LLJ 218 (Kerala). Harihar Bahinipati v. State of Orissa, (1965) 1 LLJ 501 (Orissa). (2004) LLR 60. (2005) 1 LLJ 32. Pappammal Annachatrum v. Labour Court, (1964) 1 LLJ 493 (Madras). (2011) LLR 262. Bombay Pinjrapole v. The Workmen, (1971) 2 LLJ 393 (SC). AIR 1978 SC 548.

51 52 53 54 55 56 57 58 59 60 61 62 63

64 65

Ibid. (1995) 1 LLJ 470. (1999) 1 LLJ 234. (2002) Lab. IC 2468. (2004) LLR 853. Vishakapatnam Dock Labour Board v. Stevedores’ Association, Vishakapatnam, (1970) 1 LLJ 46 (SC). Madras Gymkhana Club Union v. Madras Gymkhana Club, (1967) 2 LLJ 720, 728. Budge Budge Municipality, (1953) 1 LLJ 195 (SC). Hospital Mazdoor Sabha, (1960) 1 LLJ 25 1. Corporation of City of Nagpur, (1960) 1 LLJ 523. Ahmedabad Textile Industry Research Association, (1960) 2 LLJ 720 (SC). National Union of Commercial Employees v. M R Mehar, AIR 1962 SC. 1080. Section 2(j) does not define ‘industry’ in the usual manner by prescribing what it means: the first clause of the definition gives the statutory meaning of ‘industry’ and the second clause deliberately refers to several other items of industry and brings them in the definition in an inclusive way. It is obvious that the words used in the inclusive definition denote extension and cannot be treated as restricted in any sense. See Hospital Mazdoor Sabha case. Madras Gymkhana Club case (1967) 2 LLJ 720. ‘… What must he established is the existence of an industry viewed from the angle of what the employer is doing and if the definition from the angle of the employer’s occupation is satisfied, all who render service and fall within the definition of workman come within the fold of industry irrespective of what they do.’ Madras Gymkhana Club, (1967) 2 LLJ 720, 727–28. Safdarjang Hospital, AIR 1970 SC 1407 at 1411. There must, therefore, be an enterprise in which the employers follow their avocations as detailed in the definition and employ workmen who follow one of the avocations detailed for workmen. Though the word undertaking in the definition of ‘industry’ is wedged in between business and trade on the one hand and manufacture on the other and though therefore, it might mean only a business, trade or undertaking, still it must be remembered, that if that were so, there was no need to use the word separately from business or trade. Budge Budge Municipality, (1953) 1 LLJ 195. ‘The undertaking or the service will still remain within the ambit of what we understand by an industry though it is carried on with the aid of taxation and no immediate materials gain by way of profit is envisaged.’ Budge Budge Municipality (1953) 1 LLJ 195 at 200. ‘It must be borne in mind that noscitur a sociis is merely a rule of construction and it cannot prevail in cases where it is clear that the words have been deliberately used to make the scope of the aforesaid word correspondingly wider’. Hospital Mazdoor Sabha, (1960) 1 LLJ 251. Hospital Mazdoor Sabha, op. cit., 259.

72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88

89 90 91 92 93 94 95 96

The bench consisted of Chief Justice Beg and Justices Krishna Iyer, Chandrachud, Bhagwati, Jaswant Singh, Tuizapurkar and Desai. Justice Krishna Iyer wrote the main judgement of the Court on behalf of himself, Justice Bhagwati and Justice Desai. Chief Justice Beg, Chandrachud J, (as he then was) wrote a separate but concurring judgement. However, Justice Jaswant Singh and Justice Tulzapurkar wrote dissenting opinion. It is significant to note that none of the judges except Justice Bhagwati, who gave a judgement in Indian Standard Institution, (1976) 2 SCR 138 has participated in the decision of delineating the scope of the term industry. Bangalore Water Supply and Sewerage Board v. Rajappa, AIR 1978 SC 548. Bangalore Water Supply and Sewerage Board v. Rajappa, AIR 1978 SC 548. Ibid. Bangalore Water Supply and Sewerage Board v. Rajappa, AIR 1978 SC 548. Like Gymkhana Club, Cosmopolitan Club, Cricket Club of India and National Sports Club of India. University, college, school. Pinjrapole, Gandhi Ashram. Credit Societies, marketing cooperatives, producers or consumer societies or apex societies. Municipalities. AIR 1978 SC 548. Similar argument was made by Mr Chari in Fazalbhoy's case. Bangalore Water Supply v. Rajappa, AIR 1978 SC 548. Ibid. Bangalore Water Supply v. Rajappa op. cit. C M T Institute v. Assistant Labour Commissioner, (1979) 1 LLJ 192 (Karnataka). K R. B. Kaimal v. Director of Postal Services (1979) 1 LLJ 176 (Kerala). Tapan Kumar v. General Manager Calcutta Telephones, (1980) Lab. IC 508 (Cal.) and X R B Kaimal v. Director of Postal Services op. cit. Bhaskaran v. SDO, (1982) 2 LLJ 248 (SC). T T Devasthanam v. Commer. of Labour, (1979) 1 LLJ 448. Bihar Relief Committee v. State of Bihar, (1979) 2 LLJ 53 (Pat). Security Paper Mills v. Hati Shankar Namdeo, (1980) 2 LLJ 61 (M.P.). SC Workers’ Union v. Management of Ayurvedic A Unani Tibbia College Board, (1980) Lab. IC 892 (Del.). Najeema Beevi v. Public Service Commission, (1983) 1 LLJ 433 (Ker.). State of Punjab v. Kuldip Singh, (1983) 1 LLJ 309 (Punj. & Haryana). Kmaymmal v. State of Kerala, (1983) 1 LLJ 267. Christian Medical College, Vellore Association v. Govt, of India, (1983) 2 LLJ 372 (Madras).

97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126

Gopalji Jha Shastri v. State of Bihar, (1983) 2 LLJ 22 (SC). PF Employees ’ Union v. Addl. Industrial Tribunal, (1983) 2 LLJ 108 (Kerala). Indian Institute of Petroleum v. State of U.P., (1985) Lab IC 198 (Allahabad). B Jateshwar Sharma v. Director of Education, (1985) Lab. IC 414 (Gujarat). Corporation of Cochin v. Jalaja, (1984) 1 LLJ 526 (Kerala). Hariba v. K S R T Corporation, (1983) 2 LLJ 76 (Karnataka). Vasudeo Ambre v. State of Maharashtra, (1988) Lab. IC 554 (Bombay). Indian Navy Sailors’ Home v. Bombay Gymkhana Club Caterers and Allied Employees‘ Union; (1986) Lab. IC 11 18. Cotton & Woollen Textile Workers’ Union v. Industrial Tribunal, (1982) Lab. IC 1329 (SC). Dinesh Sharma v. State of Bihar, (1983) BLJR 207 (Patna). Doordarshan Karmachari Congress v Union of India, (1988) 2 LLJ 83 (Allahabad). Des Raj v. State of Punjab, AlR 1988 SC 1182. Raj Mukari v. State of Himachal Pradesh, (1989) Lab. IC 841 (Himachal Pradesh). Mahila Samiti v. State of MP, (1989) Lab. IC 891 (Madhya Pradesh). K C Das v. State of West Bengal, (1960) 2 LLJ 505 (Calcutta). Cooperative Milk Societies’ Union Ltd., v. State of West Bengal, (1958)2 LLJ 61 (Calcutta). Central Hair Cutting Saloon v. Harishikesh Pramanik, (1956) 1 LLJ 596 (LAT). Travancore Devaswom Board v. State of Kerala, (1963) 2 LLJ 218 (Kerala). V A Chedda v. Bambai Mazdoor Union, (1973) Lab. IC 697 (Bombay). Jaipur Milk Supply Scheme v. Labour Court, Jaipur, (1976) Lab, IC 863 (Raj.). Management of Bihar Khadi Gramodyog Sangh v. State of Bihar, (1977) Lab. IC 466 (Patna). State of Rajasthan v. Industrial Tribunal, Rajasthan, (1970) (Raj.) LW 137 (Raj.) followed in Mahesh Chandra Sharma v. State of Rajasthan, (1974) Raj. LW 338 (Raj.). Madhya Pradesh Irrigation Karamchari Sangh v. State of Madhya Pradesh, (1972) 1 LLJ 374 (MP) (D.B.). Chief Engineer Irrigation, Orissa v. Harihar Patra, (1977), Lab. IC 1033 (Orissa). Tea Board v. First Industrial Tribunal, West Bengal, (1978). Lab. IC (NOC) 179 (Calcutta). Bihar Relief Committee v. State of Bihar, (1979) Lab. IC 445 (Patna). J N Singh & Co. Pvt. Ltd. v. S N Sexena,(1916) Lab. IC 840 (Allahabad). Management of Radio Foundation Engineering Ltd., v. State of Bihar, (1970) Lab. IC 1119 (Patna). Anando Chandra Swam v. State of Orissa, (1973) 1 LLJ 508 (Orissa). Tapan Kumar Jana v. Central Manager, Calcutta Telephones, (1981) Lab IC (NOC) 68 (Calcutta).

127 Kunjan Bhaskaran v. Sub-Divisional Officer, Telegraphs Changanassery, (1983) Lab.

IC 135 (Kerala). 128 Shops and Commercial Workers’ Union v. Management of Ayurvedic and Unani Tibbia 129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154

College Board, Delhi, (1980) Lab. IC 892 (Delhi). Security Paper Milts v. Hati Shankar Namdeo, (1980) 2 LLJ 61 (63) (M.P). Karnami Properties Ltd. v. State of West Bengal, (1990) 2 Lab. IC 1677 (SC). R Sreenivasa Rao v. Labour Court, Hyderabad, (1990) 1 Lab. IC 175 (Andhra Pradesh). Workmen of M/s Baikuntha Nath Debasthan Trust v. State of West Bengal, (1990) 2 Lab. IC 1586. Prabhudayal v. Alwar SekJiari Bhumi Vikas Bank, (1990) Lab. IC 944 (Rajasthan). Nathaniel Nasib v. U P. Scheduled Caste Finance & Development Corporation Ltd., (1989) 2 Lab. IC 2276 (Allahabad). Executive Engineer, Anandpur Barrage Division v. President, Work Charged & N M R Employees Union Salinla, (1989) Lab. IC NOC 130 (Orissa). Basant Lal v. Div. Mechanical Engineers (G.W.) Rly Kathiar, (1977) (3) LLJ 154 (Patna). The Bombay Pinjrapole Bhuleswar v. The Workmen, AIR (1971) SC 2422. G C Sharma Sons v. R K Baveja, (1972) 2 LLJ 475 (Delhi). Rajesh Garg v. The Management of the Punjab State Tubewell Corporation, (1984). SLJ (P & H) 693. Indian Red Cross Society Haryana State v. The Additional Labour Court, Chandigarh. (1992) (1) PLR 121 (P & H). Sumer Chand v. The Presiding Officer, Labour Court, Ambata, (1990) (1) SLJ 91. Harjinder Singh v. State of Haryana, (1992) (1) PLR 186 (P & H). Suresh Kumar v. Union of India, (1990) Lab. IC NOC 75 (Delhi). Binoy Kumar v. State of Bihar, (1983) Lab IC 1884 (Patna) (F.B.). Des Raj v. State of Punjab, AIR l988 SC 1182, 1997 LLR 889. Akhil Raj Rajya Hand Pump Mistries Sangthan v. State of Rajasthan, (1994) Lab. IC 345. Haryana Woollen Development Corporation v. PO I.T cum LC, (1993) 2 LLJ 318. State of U P v. Presiding Officer, Labour Court, (1997) LLR 558 (H.C. Alld.). Abdul Wahab Shaikh Lai Bhai v. G E Patankar, (1980) Lab. IC 623 (Bombay). P Jost v. Director Central Institute of Fisheries, (1986) Lab. IC 1564, (Kerala). Executive Engineer, Rational Highway Division v. R.P.F. Commissioner, (1988) Lab. IC 690 (Orissa). Govindbhai Kanabhat Mari v. N K Desai, (1988) Lab IC 505 (Gujarat). J J Shrimali v. District Development Office, Jila Panchayat, (1989) Lab. IC 689 (Gujarat). P M Murugappa Mudaliar, Rathina Mudaliar & Sons v. P Raju Mudaliar, (1965) 1 LLJ

155 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182

489 (Mys.). See also the decision of division bench of the Delhi High Court in Om Prakash Jhumman Lai v. Labour Court, (1970) 1 LLJ 43 (Delhi). The view taken in this case that activity where one man is employed is ‘industry’ is incorrect because it loses sight of ‘organized labour force’ and ‘collectiveness’ of labour in the law of industrial disputes. William Fredric De Pennmg v. Therd Industrial Tribunal, AIR 1959 Cal 749. Indravadan N Adhvaryu v. Laxminarayan Dev Trust through Chief Executive Kothari, (2011) LLR 262. Palace Administration Board v. State of Kerala, (1960) 1 LLJ 178. The Government of India, Report of the National Commission on Labour, (1969) 482. Des Raj v. State of Punjab, 1988 Lab. IC 1713; see also State of UP v. Presiding Officer, Labour Court, (1997) LLR 528. (2002) LLR 711. (1988) Lab IC 1713. (1997) LLR 889. (1995) Supp 4672. JT 1996 (2) 455. (2002) LLR 609. 1998 (78) FLR 143 (SC). (2012) 1 LLJ 75. (1996) 8 SSC 489. (1997) 6 SSC 723. AIR 1998 SCC 657. 2012 (1) SLR 199. (2003) LLR 108. (1997) 4 SCC 257 (SC). (1996) 2 SSC 293. (2001) 8 SSC 713. (2011) II CLR 528 (HC Gujarat). (2002) LLR 444. (2003) LLR 9. (2008) 2 SCC 533. (1998) 78 FLR 845 (SC). (1999) 1 LLJ 319. (2005) 5 SSC 1.

CHAPTER

16 Workmen Section 2 (s) of the Industrial Disputes Act, 1947, defines ‘workman’ to mean: Any person (including 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 for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched 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) (ii) (iii) (iv)

who is subject to the Air Force Act, 1950, or the Army Act, 1950, or the Navy Act, 1957; or who is employed in the police service or as an officer or other employee of a prison; or who is employed mainly in a managerial or administrative capacity; or who, being employed in a supervisory capacity, draws wages exceeding ten thousand rupees per mensem or exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions mainly of a managerial nature.1

Broadly speaking, the definition requires that ‘workman’ must be: (a) person, (b) employed, (c) in any industry, (d) to do the specified type of work, (e) for hire or reward, but excludes certain specified categories of persons. The scope of the aforesaid expression has been the subject-matter of judicial interpretation in a series of decided cases. Let us turn to examine the scope of the aforesaid expressions.

A. Person The use of the word ‘person’ in the definition of ‘workman’ indicates the difference between the coverage of the expression ‘persons’’ employed in any ‘industry’ and ‘workmen’. Further, the words ‘including an apprentice’ extends the coverage of the ‘person employed in any industry’. Moreover, to the extent to which the expression ‘workman’ includes: any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment led to that dispute… is wider than the expression ‘person employed in any industry’.

B. Employed The word ‘employed’, however, is susceptible to two meanings: (a) in a broader sense, it is a synonym of ‘engaged’ or ‘occupied’, and (b) in a restricted sense, it involves the connotation of the master–servant relationship. A question, therefore, arises as to which of these two meanings provides the key to the interpretation of the phrase ‘person employed in any industry’. The Supreme Court in Dharangadhra Chemicals Works Ltd v. State of Saurashtra2 has, however, interpreted the term ‘workman’ in a restricted sense. In this case, the company is a lessee of the salt works and held licence for the manufacture of salt on the land. The salt is manufactured from rain water which soaks down the surface and becomes impregnated with saline matter. The entire area was divided into small plots called pattas. Each agarias (who were a class of professional labourers) were allotted a patta which was renewed from year to year. The company paid each agarias ₹400 to meet his initial expenses. The agarias levelled the land and enclosed the sink well in them. The brine was then brought to the surface and collected in reservoirs and crystals were prepared. If

the salt crystals were found of a prescribed quality, the company made payment to agarias. The salt which was not of prescribed quality was rejected. The agarias were neither allowed to remove nor sell the salt rejected by the company. The company employed a salt superintendent to supervise and control all stages of the manufacture of salt. The salt manufactured by the company was used partly for production of chemicals and the rest was sold. The agarias worked themselves, along with members of their families and were free to engage extra labourers on their own account. No hours of work were prescribed. Neither muster rolls were maintained, nor working hours were controlled by the masters. There were no rules as regards leave or holidays. Agarias were free to go out of the factory after making arrangement for the manufacture of salt. When monsoon began, the agarias returned to their villages to take up agricultural work. In 1950, an industrial dispute arose between the company and the agarias over the conditions of service which was referred to by the appropriate government to the industrial tribunal for adjudication. The company contended that agarias were not ‘workmen’. The company, after unsuccessfully appealing to the labour appellate tribunal and moving the High Court of Saurashtra for a writ under Article 226, appealed to the Supreme Court. A question arose whether the agarias working in the salt works of the company were workmen within the definition of Section 2(s). Justice Bhagwati, speaking for the Court observed: The essential condition of a person being a workmen within the terms of this definition is that he should be employed to do the work in that industry, that there should be, in other words, an employment of his by the employer and that there should be the relationship between the employer and him as between employer and employee or master and servant. Unless a person is thus employed, there can be no question of his being a workman within the definition of the term as contained in the Act.3 Assuming that the definition of workman requires master-servant relationship, a question arises as to how to ascertain the existence of that relationship. In Dharangadhra Chemical Works Ltd case, the Supreme Court ruled: The principle according to which the relationship… between employer and employee or master and servant has to be determined is well settled. The test which is uniformly applied in order to determine the relationship is the existence of a right

of control in respect of the manner in which the work is to be done.4 The Court then drew a distinction between ‘contract of service’ and ‘contract for service’: In the one case the master can order or require what is to be done while in the other case, he cannot only order or require what is to be done but how it shall be done.5 The Court after considering several English cases and certain observations in Halsbury’s Laws of England observed: The principle which emerges from above is that the prima facie test for the determination of the relationship between master and servant is the existence of the right in the master to supervise and control the work done by the servant not only in the matter of directing what work the servant is to do but also the manner in which he shall do his work.6 Again, in Workmen of the Food Corporation of India v. M/s Food Corporation of India,7 the Supreme Court, construed the word ‘employed’ used in Section 2(s) of the Industrial Disputes Act, 1947 and held : The expression employed has at least two known connotations but as used in the definition, the context would indicate ‘that it is used in the sense of a relationship brought about by express or implied contract of service in which the employee renders service for which he is engaged by the employer and latter agrees to pay him in cash or kind as agreed between them or statutorily prescribed.’ It discloses a relationship of command and obedience. The above requirement of a ‘workman’ being employed as a servant, restricts the coverage of the definition of ‘workman’ and excludes not only independent contractors but also dependent entrepreneurs.8 Thus, the decision renders millions of dependent entrepreneurs legal orphans. The aforesaid test was invoked and applied in Chintaman Rao v. State of Madhya Pradesh9 for determining whether a person is a ‘worker’ under the Factories Act, 1948. In this case, a bidi factory entered into a contract with certain persons known as sattedars for the supply of bidis. The sattedars were

supplied tobacco and in some cases bidi leaves also. The sattedars were neither bound to work in the factory nor to prepare bidis themselves, but could get them prepared by others. The sattedars in their turn collected bidis prepared by the coolies and took them to the factory where they were stored and checked by ‘workers’ of the factory and such lots as were rejected were taken back by sattedars to be re-made. The management then made the payment to sattedars and not to ‘workers’ because they were neither employed by the management (directly or indirectly) nor did they work in the factory. This principle was reiterated and re-affirmed by the Supreme Court in State of Kerala v. V M Patel.10 The Court also emphasized that a right to control or supervise is one of the tests for determining the relationship of master and servant. The Supreme Court in Bridhichand Sharma v. First Civil Judge,11 relaxed the qualitative and quantitative contents of the ‘direction and control’ test laid down in Dharangadhra Chemical Works, Ltd.12 In this case Bridhichand Sharma, the appellant, was the manager of the bidi factory. The respondents worked in the factory. They were, however, at liberty to come and go at their convenience anytime during the working hours in the factory subject to the condition that if they came after midday, they were not given any work on that day and consequently they lost their wages of that day. The payments to them were made on piece rate basis. According to the standing orders of the company, a worker who remained absent for eight days (without leave) could be removed. The payment of wages was made to them on piece rate basis according to the amount of work done, and the bidis which did not come up to a proper standard were rejected. It was in these circumstances that the Court held that the employees were ‘workers’ under the Factories Act, 1948 and were not independent contractors. Shankar Balaji Waje v. State of Maharashtra13 distinguished Bridichand Sharma v. First Civil Judge, Nagpur14 on the facts and applied the criteria laid down in Chintaman Rao v. State of Madhya Pradesh15 for ascertaining whether respondent Pandurang was a ‘worker’ or an independent contractor. The appellant was the owner and occupier of the bidi factory. The respondent Pandurang rolled bidis in the factory for a number of days in 1957. After the respondent worked for 70 days, the appellant terminated his services without paying him any wages for 4 days and earned leave as required under Section 79 (ii) of the Factories Act, 1948. On these facts, a question arose whether the respondent was a worker or an independent contractor. Justice Raghubar Dayal, while pronouncing the majority view, observed: There was no contract of service between the appellant and

Pandurang. What can be said at the most is that whenever Pandurang went to work, the appellant agreed to supply him tobacco for rolling bidis and that Pandurang agreed to roll bidis on being paid at a certain rate for the bidis turned out. The appellant exercised no control and supervision over Pandurang.16 Justice Subba Rao, however, took a contrary view. According to him, the question raised in this appeal is directly covered by the judgement of this court in Bridhichand Sharma v. First Civil Judge, Nagpur17. We now revert to the cases falling under Section 2(s) of the Industrial Disputes Act, 1947. D C Dewan Mohideen Sahib & Sons v. United Bidi Workers Union18 has met the hardship caused by Dharangadhra Chemical Works by emphasizing that the principal employer does not cease to be so merely because he employs workmen through intermediaries. It was found that contractors took leaves and tobaccos from the management and employed workers for manufacturing bidis. After bidis were prepared, the contractors delivered them to the management. The workers took leaves to their homes and cut them there but they rolled the bidis and filled them with tobacco only in ‘contractors’ factories’. Neither any attendance register was maintained nor were there any prescribed working hours. Sometimes, they informed the contractors and sometimes they did not, if they remained absent. No action was taken against workers absenting themselves without leave. The payment was made to them on piece-rate basis according to the amount of work done19. The Court held that the so-called contractor was merely an employee or an agent of the (management)… and as such employed as workers to roll bidis on behalf of the management.20 Be that as it may, there has been a consistent demand of working class to abolish the system of contract labour. In Standard Vacuum Refining Co. of India Ltd v. Their Workmen21, the Supreme Court was again confronted with this problem. In this case, contract labour was engaged in the cleaning and maintenance work at the refinery. The work done by contract labour was not only of perennial nature to be done everyday but the same type of work was done in other similar industries by regular workmen. A dispute arose between the employer and contractor's employees. The government referred the dispute to the tribunal. The management questioned the jurisdiction of the tribunal to adjudicate upon the dispute between employer and contractor’s employees. The tribunal overruled the objection and held that it had jurisdiction to decide such disputes. The tribunal also accepted the claim of contractor’s employees and directed abolition

of contract labour. On appeal, the Supreme Court ruled that the industrial tribunal should rest its decision not merely on theoretical or abstract objections to contract labour but also on the terms and condition on which contract labour is employed and the grievance made by the employees in respect thereof. The Supreme Court accordingly confirmed the findings of the tribunal abolishing contract labour. The Court also held that the dispute in the instant case was an industrial disputes, because (a) the management had a community of interest with the contractor’s employees; (b) they had a substantial interest in the subject-matter of the dispute in the sense that the class to which they belonged, namely, workmen was substantially affected thereby; and (c) the management could grant relief to the contractor’s employees. The aforesaid view was re-affirmed22 in a number of decided cases. The Supreme Court in Punjab National Bank v. Ghulam Dastagir23 exploded the myth of the direction and control test laid down in Dharangdhara Chemicals Ltd v. State of Saurashtra24 and Shivanandan Sharma v. Punjab National Bank25 case applied in bidi cases decided by the Supreme Court. In bidi cases, there was a common practice of using deceptive devices and the so-called independent contractors were really agents of the management posing as independent contractors for the purposes of circumventing the Factories Act, 1948 and like statutes which compel management to meet certain economic and social obligations towards the workers. In the instant case, the area manager of the bank was allowed certain allowance to engage a driver. The salary of the driver was paid by the area manager out of the allowances paid to him. However, the jeep (which the driver had to drive), its petrol and oil requirements and maintenance fell within the financial responsibility of the bank. The area manager terminated the services of the driver. The driver challenged the justifiability of the termination of his services. He raised a dispute with the bank. The government referred the dispute to the industrial tribunal for adjudication. The tribunal held that (i) the driver was employed by the bank and (ii) his termination of services was not justified and was therefore, entitled for reinstatement. Aggrieved by the order, the bank filed an appeal with the Supreme Court. The Supreme Court conceded that the proposition laid down in Shivanandan Sharma is an exception26 but added that direction and control are the telling factors27 to decide as to whether the driver in the present case was the employee of the bank’. This test, according to the Court, did not ‘exclude other factors also … and … the questions in each case are determined on its own circumstances and decision in other cases is rather illustrative than determinate’.28 The Court, however, held that the driver was not

a ‘workman’ because (i) there was no nexus between the bank and the driver and (ii) there was no direction and control of the bank over the driver. In Hussainbhai v. Alath Factory,29 the Supreme Court has tried to mitigate the hardship caused by the decision in Dharangadhra Chemical Works by extending the coverage of ‘worker’ to include ‘dependent entrepreneur’. Justice Krishna Iyer laid down the following tests for determining the scope of the term ‘worker’: Where a worker or group of workers labour to produce goods or services and these goods or services are for the business of another, that other is, in fact, the employer. He has economic control over the workers’ subsistence, skill and continued employment. It be, for any reason, chokes-off, the worker is, virtually, laid-off. The presence of intermediate contractors with whom alone the workers have immediate or direct relationship ex-contractu is of no consequence when, on lifting the veil or looking at the conspectus of factors governing employment, we discern the naked truth though draped in different perfect paper arrangement that the real employer is the management, not the immediate contractor.30 The aforesaid decision would provide relief to millions of persons who had been excluded from the purview of ‘workmen’. It is submitted that the word ‘employed’, as used in the Industrial Disputes Act, 1947, by itself, signifies ‘engaged’ and that wherever necessary, the legislature has limited the scope of the word by using appropriate qualifying expression. Be that as it may, this line of thinking was referred to by the Constitution bench of the Supreme Court in Steel Authority of India Ltd v. National Union Water Front Workers31. The Supreme Court in Shining Tailors v. Industrial Tribunal32 observed that ‘supervision and control test was more suited to an agricultural society prior to Industrial Revolution and during the last few decades, the emphasis in the field has shifted and no longer rests exclusively or strongly on the question of control.’ In Ram Singh v. Union Territory, Chandigarh33, the Supreme Court held that though ‘control’ is one of the important tests in determining employeremployee relationship but it is not the sole test. All other relevant factors and circumstances are also required to be considered including the terms and conditions of contract. The court also emphasized the importance of an

integrated approach in such matters. The court held that whether a particular relationship between employer–employees is genuine or a smoke screen or a camouflage through the mode of a contractor is essentially a question of fact to be determined on the basis of (i) features of the relationship, (ii) the written terms of the employment, if any, and (iii) the actual nature of employment and these questions could be raised and proved only before an industrial adjudicator. In General Manager (USD), Bengal Nagpur Cotton Mills v. Bharat 34 Lai , the Supreme Court, while dealing with the question whether the contract labourers are the direct employees of the principal employer laid down two tests, namely (i) whether the principal employer pays the salary instead of the contractor; and (ii) whether the principal employer controls and supervises the work of the employee. Dealing with the onus, the Court added: It is for the employee to aver and prove that he was paid salary directly by the principal employer and not the contractor. The first respondent did not discharge this onus. Even in regard to the second test, the employee did not establish that he was working under the direct control and supervision of the principal employer. The industrial court misconstrued the meaning of the terms ‘control and supervision’ and held that as the officers of the appellant were giving some instructions to the first respondent working as a guard, he was deemed to be working under the control and supervision of the appellant. The Court also reiterated its earlier decision in International Airport Authority of India v. International Air Cargo Workers’ Union35 wherein while explaining the expression ‘control and supervision’ in the context of contract labour, the Supreme Court observed: If the contract is for supply of labour, necessarily, the labour supplied by the contractor will work under the directions, supervision and control of the principal employer but that would not make the worker a direct employee of the principal employer, if the salary is paid by the contractor, if the right to regulate employment is with the contractor, and the ultimate supervision and control lies with the contractor. The principal employer only controls and directs the work to be done by a contract labour, when such labour is assigned/allotted/sent to him. But it is the contractor as employer, who chooses whether the worker is to be assigned/allotted to the principal employer or

used otherwise. In view of the above, the Court held that the industrial court ought to have held that the first respondent was not the direct employee of the appellant. The Court accordingly set aside the order of the labour court, the industrial court and the High Court. In Devinder Singh v. Municipal Council36, the Supreme Court held that the source of employment, the method of recruitment, the terms and conditions of employment/contract of service, the quantum of wages/pay and the mode of payment are not at all relevant for deciding whether or not a person is a workman within the meaning of Section 2(s) of the Act.

C. Nature of Work In order to be a ‘workman’, a person must be employed in an industry to do any (i) skilled and unskilled manual work; (ii) supervisory work; (iii) technical work; and (iv) clerical work. Those who though ‘employed in a industry’ are not engaged in the aforesaid types of work are beyond the scope of ‘workman’. Essentially, the emphasis is on the nature of work done by an employee, the degree of his responsibility,37 the nature of industry and the organizational set up of a particular unit.38 However, merely because any one of the aforesaid types of work done by a person is incidental to and not the main duty which a person is doing and if the main duty is not covered in any one of the four specified nature of the work, such a person would not be a ‘workman.’39 1. Manual Work. Manual work under Section 2(s) refers to work done by physical effort as distinguished from mental or intellectual effort.40 The work may be done with hands or with any other part of the body.41 Accordingly durban,42 jamadar of watch and ward staff43 and handling of the pieces of cloth, measuring them and cutting into pieces according to the requirement of customer,44 have been held to be persons doing ‘manual work’ under Section 2(s). On the contrary work of an artiste45, chemical analyst in an advertising concern, chemist46 mainly carrying out chemical analysis in a sugar mill, doctor and his compounder47 and others incharge of watch and ward and fire fighting department48 of a sugar mill (whose primary duty was to supervise the duty of watchmen and jamadars and to look after the security of the factory) have not been held to be persons doing ‘manual work’ under Section 2(s). 2. Skilled or unskilled. The scope of the expression ‘any skilled or

unskilled manual, supervisory, technical or clerical work’ has been the subjectmatter of controversy. In S K Verma v. Mahesh Chandra49, a dispute arose whether a development officer of a corporation is a ‘workman’. The Central Government referred a dispute regarding the dismissal of a development officer of the Life Insurance Corporation of India, New Delhi to the industrial tribunal-cum-labour court for adjudication. The tribunal held that the development officer was not a ‘workman’ and therefore, the reference was incompetent. On dismissal of the writ petition, the petitioner appealed to the Supreme Court. The Court examined the scope of the expression ‘any skilled or unskilled workman’ and held that the term ‘workmen’ takes into account the entire labour force excepting managerial work. The Court then examined the nature of the duty of the development officer and came to the conclusion that he was not engaged in any administrative or managerial work. The Court accordingly held that the development officer was a ‘workman’ under the Act. Resolution of conflicting views. After the amendment of the definition of ‘workman’, a Constitution bench of the Supreme Court in H R Adyanthaya v. Sandoz (India) Ltd50 applied the rule of ejusdem generis to give a narrow meaning to the wide words in the amended definition of 'workman' under the ID Act. Accordingly, the Court excluded 'sales representatives' from the definition of 'workman' by holding that the words 'skilled', 'unskilled' and 'manual' had to be read ejusdem generis. A Constitution bench of the Supreme Court in H R Adyanthaya51 after noticing all the earlier judgements the Supreme Court observed as under: We thus have three-judge bench decisions which have taken the view that a person to be qualified to be a workman must be doing the work which falls in any of the four categories, viz., manual, clerical, supervisory or technical and two-judge bench decisions which have by referring to one or the other of the said three decisions have reiterated the said law. As against this, we have three-judge bench decisions which have without referring to the decisions in May & Baker [AIR 1967 SC 618], WIMCO [AIR 1964 SC 472] and Burmah-Shell cases (1971) 2 SCR 758, have taken the other view which was expressly negatived, viz., if a person does not fall within the four exceptions to the said definition, he is a workman within the meaning of the Industrial Disputes Act. These decisions are also based on the facts found in those cases. They have, therefore, to be confined to those

facts. Hence, the position in law as it obtains today is that a person to be a workman under the Industrial Disputes Act must be employed to do the work of any of the categories, viz., manual, unskilled, skilled, technical, operational, clerical or supervisory. It is not enough that he is not covered by either of the four exceptions to the definition. We reiterate the said interpretation. 3. Supervisory Capacity. The essence of supervisory nature of work under Section 2(s) is the supervision by one person over others.52 The term ‘supervisor’ means any individual having authority of the employer to hire, transfer, suspend, lay-off, recall, promote, discharge, assign or discipline other employees, or responsibility to direct them or to adjudge their grievances, or to recommend such action in connection with the foregoing. The exercise of such authority is not of a routine or clerical nature, but requires the use of independent judgement. The person exercising supervisory work is required to control men and not machines. His duty is to see how the employees will be engaged in different works of production and that the supervisor himself must have technical expertise, otherwise he may not be in a position to exercise proper supervision of the workmen handling sophisticated plants and machineries. However, if the main work done by persons employed in an industry is of manual, technical or clerical nature, the mere fact that some supervisory duties are also carried out incidentally or as a small fraction of the work done by him will not convert his employment into one of supervisory capacity.53 Conversely, if a person mainly doing supervisory work, but incidentally or for a fraction of the time also does some clerical work, it would have to be held that he is employed in the supervisory capacity.54 In All India Reserve Bank Employees’ Association v. Reserve Bank of 55 India , the Court was called upon to decide whether the work done by an employee engaged in checking and distributing the work, detecting the faults, reporting for penalty and making arrangements for filling up vacancies is supervisory in nature. The Court answered the question in the affirmative, and observed that the question is ultimately a question of fact, or at best of mixed fact and law and would primarily depend upon the nature of the industry, the type of work in which he is engaged, the organizational set up of the particular unit and the like. The Court, while construing the word ‘supervise’ observed that the word supervise and its derivatives are not of precise import and most often construed in the light of the context, for unless controlled, they cover simple oversight and direction as manual work coupled with the power of inspection

and superintendence of manual work of others. In Anand Bazar Patrika v. Its Workmen56, the principal work that the employee concerned was doing was of maintaining and writing cash book and of preparing various returns. Being the senior-most clerk, he was made incharge of provident fund section and three clerks who were working in the same section were put under him. He was required to allocate work between them, to permit them to leave during office hours and to recommend their leave applications. The Supreme Court held that the duties of the senior clerk incharge were not of a supervisory nature because the few minor duties cannot convert his office into that of a ‘supervisor’. In Burmah Shell Co. v. Burmah Shell Management Staff Association57, 20 workmen (including checkers, general workmen, packers and chemical mixers) were working under a foreman (chemical). The foreman allotted the work to workmen under him, signed gate passes and other material vouchers, recommended promotions of men who had been working under him, selected persons for acting in a higher capacity, insured maximum utilization of manpower and was responsible for blending of chemicals. On these facts the Supreme Court observed: In determining the nature of employment … (of any person) and in holding that he is employed to do supervisory work, we have taken into account not only the work of supervision which he carries on in ensuring that… workmen employed under him are properly doing the work … but also the fact that the workmen function under his control and direction. The Court accordingly held that the duties of a foreman were of ‘supervisory’ nature and the manual work done by him personally was only incidental. In Mayank Desai v. Sayaji Iron and Engineering Co. Ltd58, a person was appointed as design and development engineer. He was required to check certain drawings prepared by the draftsman but not to approve such drawings. He had no authority to appoint a person, to sanction leave of anybody or take disciplinary action against any person. No one was reporting to him. On these facts, the Gujarat High Court held that he was not acting in a supervisory capacity under Section 2(s)(iv) of the IDA.

Tests for Determination of Supervisory Capacity The Bombay High Court in Union Carbide (India) Ltd v. D Samuel and

others59 summarized the tests laid down by the Supreme Court in various decisions as follows : 1. 2.

Designation is not material but what is important is the nature of work; Find out the dominant purpose of employment and not any additional duties the employee may be performing; 3. Can he bind the company/employer to some kind of decisions on behalf of the company/employer; 4. Has the employee the power to direct or oversee the work of his subordinates; 5. Does he have the power to sanction leave or recommend it; and 6. Does he have he the power to appoint, terminate or take disciplinary action against workmen. The Supreme Court in National Engineering Industries Ltd v. Shri Kishan Bhageria60 noted the distinction between the expression 'supervisory', ‘managerial’ and ‘administrative’. The Court also noted that these terms or expressions cannot be put in a water-tight compartment. However, the Court observed that one must always look into the main work and that must be found out from the main duties. A supervisor is one who could bind the company to take some kind of decision on behalf of the company. One who was reporting merely as to the affairs of the company and making assessment for the purpose of reporting was not a supervisor. The Court, therefore, will have to bear in mind these tests while examining as to what is the main work of an employee. 4. Technical Work. The word ‘technical’ was inserted in Section 2(s) by amending Act 36 of 1956. Broadly speaking, a work which depends upon the special training or scientific or technical knowledge of a person, constitutes technical work. In Marugalli Estate v. Industrial Tribunal, Madras,61 a person was employed as a medical officer for the plantation estate on a monthly salary exceeding ₹500. His duties were: (i) management and running of a central hospital staff; (ii) supervision of work of the hospital staff: (iii) supervision of dispensaries; (iv) inspection of lines and quarters; (v) malaria control work; and (vi) supervision of creches. On these facts, the Court concluded that the main function for which he was appointed may not occupy as much time as the medical attendance on patients. All these show that it is a technical employment for a particular purpose, because of particular qualifications and should not be lost sight of in determining the character of employment.62 The Court also laid

down a test to determine whether the work done by any person is technical or supervisory: The test to be applied to my mind, to cases of technical employment such as in this case, should be the purpose for which the employment is made, irrespective of whether the performance of the duties may or may not occupy the entire time of the employee. That is because the employment is made on the basis of the particular level of professional efficiency and technical qualifications. If an employee is found suitable for supervisory work, because of those reasons, it cannot be said that the functions are mainly those of a medical attendant, as on account of his professional qualification, he happened to be engaged in that capacity as well.63 The Court, therefore, opined that the employee concerned was not at all entrusted with supervisory work. The advancement of science and technology and the era of automation pose new problems for lawyers, judges and legislators. Thus, in Titaghur Paper Mills Co. Ltd v. First Industrial Tribunal64, the Calcutta High Court was, inter alia, confronted with the issue whether persons with technical expertise could be said to be ‘workmen’ within the meaning of Section 2(s). The Court observed: That in the matter of production and running sophisticated machines, persons having technical expertise are often required to guide the labourers as to how the machine will be run and how the technical process of production will be carried out. Such technicians render their technical expertise along with other workers. In such circumstances, it cannot be said that simply because they did not run the machines themselves but stood by and guided ordinary workmen in the matter of running the machine and/or carrying out the phases of production, they were purely administrators and/or supervisors and their only job is to supervise the men and not the machine and/or technical works of production.65 5. Clerical Work. In general connotation, ‘a clerk is one employed as writer, copyist, account keeper or correspondent in the office’.66 Clerical work ‘implies a stereotyped work, without power of control or dignity or creativeness.’67

In D P Maheshwari v. Delhi Administration68, a question arose whether an employee discharging the duties of clerical nature was a workman. The labour court found that D P Maheshwari was discharging work of clerical nature. The single judge and division bench of the Delhi High Court reversed the findings of the labour court. On appeal, the Supreme Court held the fact that Maheswari was not discharging supervisory function but he was discharging duties of clerical nature. It accordingly set aside the decision of single judge and division bench of the High Court and restored the orders of the labour court. In Anameinuger Development Corporation Ltd v. Second Industrial Tribunal,69 the management employed the appellant as a typist-cum-clerk. Thereafter, he was appointed an officer to make purchases, attend to sales tax authorities and transport. On these facts, a question arose whether he was a ‘workman’ under Section 2(s) of the Act. The division bench of the Calcutta High Court answered the question in the affirmative and observed that mere designation would not govern the nature of the work. The Court also held that he was receiving low emoluments and was not an officer, therefore, he fell within the category of ‘workman’ under Section 2(s) of the Act. In Prakash v. M/s Delton Cables India (P) Ltd70, the appellant was employed as a chargeman security to look after the security of the factory and its property. He was also required to depute watchmen working under him to work at the factory gate or to send them to watch in or around the factory and to make entries about the visitors in the register and about materials entering or going out of the premises of the factory in the concerned register. The appellant had no power to appoint or dismiss any workman or even order an inquiry against any workman. On these facts, the Supreme Court held that the substantial duty of the appellant was only of a security inspector at the gate of the factory premises. The Court also held that his nature of duty was neither managerial nor supervisory in nature within the exclusory clause of Section 2(s). A survey of decided cases reveals that a clerk of audit department71, manager of hotel (required to write ledgers, file correspondence and enter cash book, etc.)72, senior clerk of a bank73 and accountant of a bank signing salary bills of the staff74 are workmen under Section 2(s). 6. Multifarious Duties. In practice, quite a large number of employees are employed in industries to do work of more than one of the kinds mentioned in the definition. In such cases, it would be necessary to determine under which classification he will fall for the purpose of finding out whether he does or does not go out of the definition of ‘workman’ under the exceptions. In Burmah Shell Oil Storage and Distribution Company India Limited

v. Burmah Shell Management Staff Association75, the Supreme Court held that where an employee is doing multifarious duties, the main work which he is required to do should be held to be the work done by him to find out whether he is a workman or not. The Supreme Court in National Engineering Industries v. Shri Krishna Bhageria76 was seized of the question of whether an internal auditor working in the company was a workman or not. After considering his main duties and the work, it was held that he was not doing any kind of supervisory work. It was also held that since the employee had no independent right or authority to take decisions and his decision did not bind the company and, therefore, he was a workman and not a supervisor. In S K Maini v. M/s Carona Sahu Company Ltd77, the Supreme Court laid down the following principles for determination of the question as to whether a particular employee falls within the definition of ‘workman’ under Section 2(s): Whether or not an employee is a workman under Section 2(s) of the Industrial Disputes Act is required to be determined with reference to his principal nature of duties and functions. Such question is required to be determined with reference to the facts and circumstances of the case and materials on record and it is not possible to lay down any strait-jacket formula which can decide the dispute as to the real nature of duties and functions being performed by an employee in all cases. When an employee is employed to do the types of work enumerated in the definition of workman under Section 2(s), there is hardly any difficulty in treating him as a workman under the appropriate classification, but in the complexity of industrial or commercial organization, quite a large number of employees are often required to do more than one kind of work. In such cases, it becomes necessary to determine under which classification the employee shall fall for the purpose of deciding whether he comes within the definition of workman or goes out of it. The designation of the employee is not of much importance and what is important is the nature of duties being performed by the employee. The determinative factor is the main duties of the concerned employee and not some work incidentally done. In other words, that is in substance, the work which an employee does or what in substance he is employed to do. Viewed from

this angle, if the employee is mainly doing supervisory work but incidentally or for a fraction of time also does some manual or clerical work, the employee should be held to be doing supervisory works. Conversely, if the main work is of manual, clerical or of technical nature, the mere fact that some supervisory or other work is also done by the employee incidentally or only a small fraction of working time is devoted to some supervisory works, the employee will come within the purview of ‘workman’ as defined under Section 2(s) of the Industrial Disputes Act, 1947. The position that emerges from the aforesaid discussion is that in determining the question whether a person employed by the employer is workman under Section 2(s) of the Industrial Disputes Act or not, the Court has principally to see main or substantial work for which the employee has been employed and engaged to do. Neither the designation of the employee is decisive nor any incidental work that may be done or required to be done by such employee shall get him outside the purview of workman, if the principal job and the nature of employment of such employee is manual, technical or clerical. In hierarchy of employees, some sort of supervision by the employee over the employees of the lower ladder without any control may not by itself be sufficient to bring that employee in the category of supervisory, yet if the principal job of that employee is to oversee the work of employees who are in the lower ladder of the hierarchy and he had some sort of independent discretion and judgement, obviously such an employee would fall within the category of supervisor. Each case would depend on the nature of the duties predominantly or primarily performed by such employee and whether such function was supervisory or not would have to be decided on facts keeping in mind correct principles. Where the employee possesses the power of assigning duties and distribution of work, such authority of employee may be indicative of his being supervisor doing supervision. In a broad sense, supervisor is one who has authority over others: someone who superintends and directs others. An employee who, in the interest of the employer has responsibility to directly control the work done by other workers and if the work is not done correctly, to guide them to do it correctly in accordance with norms shall certainly be a supervisor. A supervisory work may be distinguished from managerial and administrative work and, so also a supervisor from manager and administrator. Supervisor’s predominant function is to see that work is done by workers under him in accordance with the norms laid down by the management; he has no power to take disciplinary action.

D. Hire and Reward The expression ‘for hire or reward’ which is frequently used to denote contractual relationship78 has been used in Section 2(s). Only those persons are ‘workmen’ who are employed for ‘hire or reward’. The expression ‘hire and reward’ is wider than ‘wages’. Legislature was, however, alive of this situation and, therefore, preferred to adopt the former expression rather than the latter to include those who are not technically getting ‘wages’. There is, however, a difference between ‘hire and reward’. While the former refers to payment or receipt of compensation, as distinguished from a gratuitous or non-remunerative service79, the latter implies something given in return for good or evil done or received and does not necessarily mean money or a thing in itself of pecuniary value. In Management of Indian Bank, Madras v. The Presiding Officer, Industrial Tribunal Madras,80 the Madras High Court held that the commission providing for payment to a tiny deposit agent under the agreement will be ‘hire or reward’ within the meaning of Section 2(s) of the Industrial Disputes Act, 1947. In Devinder Kaur (Smt) v. Child Welfare Council, Punjab81, the Punjab and Haryana High Court held that a person working for honorarium as a Balsevika in Child Welfare Council is not a workmen under the Industrial Disputes Act, 1947.

E. Persons Excluded The exclusory clause in the definition of ‘workman’, namely: (i) (ii)

who is subject to the Army, Air Force and Navy Acts, or who is employed in the police service or as officer or other employee of a prison, or (iii) who is employed mainly in a managerial or administrative capacity; or (iv) who being employed in a supervisory capacity, draws wages exceeding ten thousand rupees per mensem or exercises either by the nature of the duties attached to the office or by reason of the power vested in him, functions mainly of a managerial nature, curtails the scope of the term ‘workmen.’ The aforesaid clauses indicate that if they did not occur in the definition, a good number of persons employed in navy, military, air force, police or prison would have been regarded as ‘manual’ workers and hence ‘workmen’. The

legislature was obviously alive of this problem and, therefore, excluded such persons. But, even the aforesaid clauses are inadequate and incomplete as unlike Section 2 (9) (b) of the Industrial Relations Bill, 1978, it does not include any person: who is employed … (as) an officer or member of the Railway Protection Force constituted under Section 3 of the Railway Protection Force Act, 1957 or the Border Security Force constituted under Section 4 of the Border Security Force Act, 1968 or the Central Industrial Security Force constituted under Section 3 of the Central industrial Security Force Act, 1968.82 The Bill also specifically excluded any person: who is employed or engaged as a seaman as defined in clause (42) of Section 3 of the Merchant Shipping Act, 1958 …83 But, due to the change in the government, the aforesaid recommendation could not find place in the statute book. 1. Person Employed Mainly in Managerial and Administrative Capacity. Section 2(s) (iii) excludes the aforesaid category. The aforesaid phrase which has not been defined in the Industrial Disputes Act appears to indicate that there may be plurality of person in this category of any industry.84 However, it is not necessary that such persons should have the power of making appointments. Nor is it essential that before a person can fall in the aforesaid category, he should have the power to dismiss any employee. Further, the mere fact that a person is designated as ‘managerial’ or ‘administrative’ personnel is not conclusive proof of his being so, but has to be established by the actual nature of work done by him. In order to bring a person in the aforesaid category, it is necessary that he must have workmen, persons or officers subordinate to him whose work he is required to supervise. He should take decisions and also assume responsibility for ensuring that the matters entrusted to be charged are efficiently conducted and an ascertainable area or section of work is assigned to him.85 In Air India Cabin Crew Association v. Union of India86, the Supreme Court held that once an employee is placed in the executive cadre, he ceases to be a workman and also ceases to be governed by a settlement arrived at between the management and the workmen through the trade union concerned. 2. Supervisory Capacity Drawing Wages Exceeding Rupees Ten Thousand Per Mensem. The salary limit is associated with the person in the

supervisory capacity. But managerial or administrative personnel are excluded, irrespective of their salary. Further, no such limit applies in case of manual, clerical or technical personnel. Thus, Section 2(s) (iv) excludes those person employed in a supervisory capacity who draw wages exceeding ₹10,000 per month.87 In M/s Bharat Heavy Electricals Ltd, Haridwar v. State,88 the Uttranchal High Court held that assistant foreman employed in Bharat Heavy Electricals Ltd, an undertaking of Government of India who was performing duties of supervisory nature, cannot be treated as ‘workman’. However, an incidental performance of supervisory duties will not impress his employment with the character of supervisory capacity. The mere designation as supervisor is not decisive.89 A similar view was taken by this Court in Western India Match Co. Ltd v. Workmen90 and Burmah Shell Oil Storage & Distribution Co. of India Ltd v. Burmah Shell Management Staff Assn.91 A division bench of this Court, however, without noticing the aforementioned binding precedent, in S K Verma v. Mahesh Chandra92 held that the duties and obligations of a development officer of Life Insurance Corporation of India being neither managerial nor supervisory in nature, he must be held to be a workman. Correctness of S K Verma (supra) came up for consideration before a Constitution bench of this Court in H R Adyanthaya93 case. Referring to this Court's earlier decisions in May and Baker (supra), Western India Match Co. and Burmah Shell Oil Storage, it was observed that as in S K Verma (supra) the binding precedents were not noticed and furthermore, in view of the fact that no finding was given by the Court as to whether the development officer was doing clerical or technical work and admittedly not doing any manual work, the same had been rendered per incuriam. The Constitution bench summarized the legal position that arose from the statutory provisions and from the decisions rendered by this Court, stating: Till 29-8-1956, the definition of workman under the ID Act was confined to skilled and unskilled, manual or clerical work and did not include the categories of persons who were employed to do 'supervisory' and 'technical' work. The said categories came to be included in the definition w.e.f. 29-8-1956 by virtue of the Amending Act 36 of 1956. It is, further for the first time that by virtue of the Amending Act 46 of 1982, the categories of worker

employed to do ‘operational’ work came to be included in the definition. What is more, it is by virtue of this amendment that for the first time, those doing non-manual, unskilled and skilled work also came to be included in the definition with the result that persons doing skilled and unskilled work, whether manual or otherwise, qualified to become workmen under the ID Act. Considering the decisions in May & Baker (supra), Western India Match Co. (supra), Burmah Shell Oil Storage (supra) as also S K Verma (supra) and other decisions following the same, this Court in H R Adyanthaya (supra) observed: However, the decisions in the later cases, viz., S K Verma ((1983) 3 SCR 799), Delton Cable, ((1984) 3 SCR 169), and Ciba Geigy, ((1985 Supp (1) SCR 282) cases did not notice the earlier decisions in May & Baker ((1964) 3 SCR 560), and Burmah Shell ((1971) 2 SCR 758) cases and the very same contention, viz., if a person did not fall within any of the categories of manual, clerical, supervisory or technical, he would qualify to be workman merely because he is not covered by either of the four exceptions to the definition, was canvassed and though negatived in earlier decisions, was accepted. Further, in those cases the development officer of the LIC, the security inspector at the gate of the factory and the stenographer-cumaccountant respectively, were held to be workmen on the facts of those cases. It is the decision of this Court in A Sundarambal case ((1988) 4 SCC 42) which pointed out that the law laid down in May & Baker case ((1961) 2 LLJ 940) was still good and was not in terms disowned. A three-judge bench of the Supreme Court in Mukesh K Tripathi v. Senior Divisional Manager, LIC94 while dealing with the above cases held: (i) That Constitution bench though noticed the distinct cleavage of opinion in two lines of cases but held: … these decisions are also based on the facts found in those cases. They have, therefore, to be confined to those facts. Hence, the position in law as it obtains today is that a person to be a workman under the ID Act must be employed to do the work of any of the categories, viz., manual, unskilled, skilled, technical,

operational, clerical or supervisory. It is not enough that he is not covered by either of the four exceptions to the definition. We reiterate the said interpretation. (ii)

The said reasonings are, therefore, supplemental to the ones recorded earlier, viz.: (i) They were rendered per incuriam; and (ii) May & Baker (supra) is still a good law. (iii) Once the ratio of May & Baker (supra) and other decisions following the same had been reiterated, despite observations made to the effect that S K Verma (supra) and other decisions following the same were rendered on the facts of that case, we are of the opinion that this Court had approved the reasonings of May & Baker (supra) and subsequent decisions in preference to S K Verma (supra). (iv) The Constitution bench, further, took notice of the subsequent amendment in the definition of ‘workman’ and held that even the legislature impliedly did not accept the said interpretation of this Court in S K Verma (supra) and other decisions. (v) It may be true, that S K Verma (supra) has not been expressly overruled in H R Adyanthaya (supra) but once the said decision has been held to have been rendered per incuriam, it cannot be said to have laid down a good law. This Court is bound by the decision of the Constitution bench. In P B Sivasankaran v. Presiding Officers, First Additional Labour Court95, a question arose whether the petitioner who worked as supervisor in charge of a shift, having power to grant leave, recommend confirmation of regularization and issue memos against the subordinate workers, was a workman. On the facts of the case, the Madras High Court held that he was not a ‘workman’ under Section 2(s) of the Act.

F. Specific Cases 1. Sales/Medical Representative: If Workman In May & Baker India Ltd v. Their Workman,96 the pharmaceutical concern employed the petitioner as a representative for canvassing and procuring orders. However, he was also required to do some clerical or manual work which was incidental to his main work. On these facts, the Supreme Court held that he was not a ‘workman’ under Section 2 (s) of the Act. The Supreme Court added that if the nature of duties is manual or clerical, then the person must be held to be a workman. On the other hand, if the manual or clerical work is only a small part

of the duties of the person concerned and is incidental to the main work which is not manual or clerical, then such a person would not be a workman. In T P Srivastava v. M/s National Tabacco Co. of India97, the Supreme Court was called upon to decide a question whether a person looking after sales promotion is a ‘workman’ under the Industrial Disputes Act, 1947. In this case, the appellant was employed to do canvassing and promoting sales for the company. His duties among others included suggesting ways and means to improve sales, study the type of status of the public to whom the product has to reach and study the market conditions. He was also required to suggest about the publicity in markets and melas, advertisements, including the need for posters, holders and cinema slides. On these facts the Supreme Court held that persons looking after sales promotion were not workmen under the Industrial Disputes Act. In H R Adyanthaya v. Sandoz (India) Ltd98, a question arose whether a medical representative was a 'workman' under Section 2(s). The Supreme Court answered the question in negative and observed ‘… the word skilled has to be construed ejusdem generis and thus construed would mean skilled work, whether manual or non-manual which is of a general or other types of work mentioned in the definition clause 2(s). The work of promotion of sales of products or services of the establishments is distinct from the independent type of work covered by Section 2(s). Therefore, medical representatives are not workmen.’ In Sharad Kumar v. Government of NCT of Delhi99, the Supreme Court was called upon to decide whether the area sales executive was a ‘workman’ under Section 2(s) of the ID Act. While holding that he was not a ‘workman’, the Court laid down the following tests for guidance: (a) In order to fall under the purview of the expression ‘workman’ as defined under Section 2(s) of the Act, the person has to discharge any one of the types of the works enumerated in the first portion of Section 2(s). (b) If the person does not come within the first portion of Section 2(s), then it is not necessary to consider the further question whether he comes within any classes of workmen excluded under the latter part of the section. (c) Whether the person concerned comes within the first part of Section 2(s) depends upon the nature of duties assigned to him and/or discharged by him. (d) The duties of the employee may be spelt out (i) in the service rules or (ii) service regulations or (iii) standing orders or (iv) the appointment order; or

(v) in any other material in which the duties are assigned to him. (e) When the employee is assigned to a particular type of duty and has been discharging the same till date of dispute then there may not be any difficulty in coming to a conclusion whether he is a workman within the meaning of Section 2(s). If on the other hand, the nature of duties discharged by the employee is multifarious, then the further question that may arise for consideration is which of them is his principal duty and which are the ancillary duties performed by him. (f) Designation of the employee is not of much importance and certainly not conclusive in the matter as to whether or not he is a workman under Section 2(s) of the Act.

2. Part-time Employees: If Workman In Div. Manager, New India Assurance Co. Ltd v. A Sankaralingam100, the Supreme Court held that part-time worker will be a workman. This is so because Section 2(s) of the Industrial Disputes Act, 1947 which defines the term ‘workman’ does not make any distinction between a full-time and part-time employee. When the attention of the Court was drawn in this case to the Uttranchal Forest Hospital Trust v. Dinesh Kumar101 wherein the Court had observed that part-time workers do not fit into the scheme of law relating to retrenchments and are not entitled to the benefits of Section 25-F of the Industrial Disputes Act, 1947, the Supreme Court said that it was merely an obiter in regard to the status of part-time employee where the main issue before the Court was whether workman in fact had put in 240 days of service which could have entitled him to the benefit of Section 25-F. The question again came up for consideration before the Supreme Court in New India Assurance Co. v. Vipin Behari Lal Srivastava102. The Court held that a part-time worker is covered under Section 2(s) and is entitled to the benefit of continuous service under Section 25-B and cannot be retrenched without complying with the mandatory provisions of Section 25-F of the Act. In Devinder Singh v. Municipal Council103, the Supreme Court held that the definition of workman also does not make any distinction between full-time and part-time employees or persons appointed on contract basis. There is nothing in the plain language of Section 2(s) from which it can be inferred that only a person employed on regular basis or a person employed for doing whole-time job is a workman and the one employed on temporary, part-time or contract basis on fixed wages or as a casual employee or for doing duty for fixed hours is

not a workman.

3. Creative Artists In Bharat Bhawan Trust v. Bharat Bhawan Artists’ Association104, the Court was, inter alia, called upon to consider whether the respondents, who were artists are ‘workmen’. In this case, Bharat Bhawan Trust was established under the Bharat Bhawan Nyas Adhiniyam, 1982 for promotion of art and preservation of artistic talent. It is a national centre of excellence in creative arts. The trust entered into various agreements with creative artists for production of drama and theatre management. The said artists apprehending termination of their services raised a dispute. The appropriate government referred the dispute to labour court for adjudication. The labour court held that the trust was an ‘industry’ and artists were ‘workmen’. On appeal, the Supreme Court held that it was doubtful if the trust can be held to be an ‘industry’. It also held that artists were not ‘workmen’.

4. Teacher: If Workman In Miss A Sundarmbal v. Govt of Goa, Daman & Diu105, a question arose whether a teacher employed in a school falls within the definition of ‘workman’ under Section 2(s) of the Act. The Supreme Court answered the question in the negative and observed: We are of the view that the teachers employed by educational institutions whether the said institutions are imparting primary, secondary, graduate or post-graduate education, cannot be called ‘workman’ within the meaning of Section 2(s) of the Act. Imparting of education which is the main function of teachers cannot be considered as skilled or unskilled manual work or supervisory work or clerical work. Imparting of education is in the nature of a mission or noble vocation. A teacher educates children, he moulds their character, builds up their personality and makes them fit to become responsible citizens. Children grow under the care of teachers. The clerical work, if any, they do is only incidental to their principal work of teaching. The Court added: We may at this stage observe that teachers as a class cannot be denied the benefits of social justice. We are aware of the several methods adopted by unscrupulous management to exploit them

by imposing on them unjust conditions of service. In order to do justice to them, it is necessary to provide for an appropriate machinery so that teachers may secure what is rightly due to them. The Court directed that ‘if no such Act is in force in Goa, it is time that the state of Goa takes necessary steps to bring into force an appropriate legislation providing for adjudication of disputes between teachers and managements of educational institutions. The Court hoped that the lacuna in the legislative area will be filled soon. The aforesaid view was reiterated in Ahmedabad Pvt. Primary Teachers Association v. Administrative officer.106

5. Doctor-If a Workman Is a doctor who has been performing duties of technical nature a workman irrespective of the fact whether the hospital is charitable or not, under the Industrial Disputes Act? In Surendra Kumar v. Union of India107, the petitioner was employed as assistant medical officer Class II to treat patients who were employees of the railways and their families. He was also required to meet the administrative requirement where he was in charge of the hospital of a wealth unit. The staff was also under his administrative control. On these facts, the division bench of Allahabad High Court held that the duties of the doctor were technical and not supervisory. The Court accordingly held that the doctor was a ‘workman’ under Section 2(s) of the Industrial Disputes Act, 1947. However, the division bench of the Kerala High Court in Mar Basellos Medical Mission Hospital v. Dr Joseph Babu108 held that a senior doctor engaged in diagnosis and treatment of patients was not a workman under the IDA. The court gave the following reasons. (i)

A post-graduate doctor was engaged at a fairly high salary for treatment of patients as a senior doctor in the department of medicine. (ii) His work is essentially to diagnose diseases of patients and treat the same. (iii) A senior doctor is always assisted by a team of junior doctors, medical attendants, nurses, etc., and it is the duty of the senior doctor to ensure examination of the patient by way of x-ray, blood test, etc., and that the treatment suggested by him is carried out strictly in accordance with his instructions. (iv) No one can doubt that any subordinate employee disobeying the doctor's instructions will do so expect at the risk of disciplinary action.

Thus, he was engaged in supervisory and technical work, even if a doctor's work is only technical in nature. In M M Wadia Charitable Hospital v. (Dr) Umakant Ramchandra Warerkar109, the Bombay High Court held that a doctor, though employed and rendering professional services will not be a 'workman' under the Act. The Supreme Court in Workmen of Dimakuchi Tea Estate v. Dimakuchi Tea Estate110 while construing Section 2 (s) (as it existed prior to 1956 amendment) held that the duties performed by a medical practitioner were of a technical nature.

6. Apprentice: If Workman Does an apprentice ipso facto become a ‘workman’ merely because Section 2(s) specifically includes ‘apprentice’’ within its fold? The Supreme Court in Workmen of Hindustan Lever Ltd v. Hindustan Lever Ltd111 held that if the employer takes the kind of work mentioned in Section 2 (s) from the apprentice, the dispute between them would be settled under the Industrial Disputes Act, 1947. But if the apprentices do not perform such work, the Industrial Disputes Act will not apply to them. In Mukesh K Tripathi v. Senior Divisional Manager, L I C and Ors112, the Supreme Court while dealing with the case of apprentice observed that the definition of ‘workmen’ as contained in Section 2(s) of the Industrial Disputes Act, 1947 includes an apprentice, but a ‘workman’ defined under the Industrial Disputes Act, 1947 must conform to the requirements laid down therein meaning thereby, inter alia, that he must be working in one or the other capacities mentioned therein and not otherwise. The Court added: (i)

(ii)

A ‘workman’ within the meaning of Section 2(s) of the Industrial Disputes Act, 1947 must not only establish that he is not covered by the provisions of the Apprenticeship Act but must further establish that he is employed in the establishment for the purpose of doing any work contemplated in the definition. Even in a case where a period of apprenticeship is extended, a further written contract carrying out such intention need not be executed. But in a case where a person is allowed to continue without extending the period of apprenticeship either expressly or by necessary implication and regular work is taken from him, he may become a workman. A person who claims himself to be an apprentice has certain rights and obligations under the statute. In case any person raises a contention that his status has been changed

from apprentice to a workman, he must plead and prove the requisite facts. In absence of any pleading or proof that either by novation of the contract or by reason of the conduct of the parties, such a change has been brought about, an apprentice cannot be held to be a workman. In Dhampur Sugar Mills Ltd v. Bhola Singh113, the Supreme Court held that an apprentice or trainee appointed in terms of the Apprentices Act, 1961 is not a workman.

7. Trainees In Trambak Rubber Industries Ltd v. Nasik Workers’ Union114, a question arose whether the ‘trainees’ where the entire production activity in the company was carried out with none other than the trainees were workmen under Section 2(s) of Industrial Disputes Act, 1947. The Supreme Court answered the question in the affirmative. In this case, the company which employed only trainees to run the production activity were not allowed to resume work on and from 14 August 1989 unless they gave an undertaking on the employer’s term. The employer terminated their services with effect from 15 November 1989. The industrial court held that they were trainees because (i) neither the complainant union nor the management had placed on record the appointment letters that would have been issued when the persons concerned were recruited in 1988; (ii) merely because the trainees were employed for performing regular nature of work would not by itself make them workmen; (iii) a trainee is not equivalent to a ‘workman’ unless there is sufficient evidence of existence of employeremployee relationship. On a writ petition the High Court held that the persons concerned whose engagement was terminated were not trainees but they were ‘workmen’ and therefore, their services could not have been terminated without following the due procedure. On a special leave, the Supreme Court observed: According to the industrial court, the fact that the ‘trainees’ were employed for performing the regular nature of work would not by itself make them workmen. The question then is, would it lead to an inference that they were trainees? The answer must be clearly in the negative. …It is pertinent to note the statement of the management’s witness that in June-July 1989, the company did not have any permanent workmen and all the person employed were trainees. It would be impossible to believe that the entire production activity was being carried on with none other than the so-called trainees. If there were trainees, there

should have been trainers too. The management evidently came forward with a false plea dubbing the employees/workmen as trainees so as to resort to summary termination and deny the legitimate benefits. Can a trainee who has undergone 3 years‘ training claim status mentioning him to be confirmed? This question was raised in Shri Vijay Kumar v. Presiding Judge, Labour Court115. Dealing with this question, the Himachal Pradesh High Court held that where the petitioner was only a trainee, never became workman and was never offered employment after completion of training, the mere fact that a wage slip mentioned that petitioner has been confirmed will not make him a confirmed employee. In order to become workman, there should be a separate order confirming him on successful completion of training.

8. Probationer: If Workman In Hutchiah v. Karnataka State Road Transport Corporation116, a question arose whether a person appointed on probation for doing work for the industry and receiving salary therefor was a ‘workman’. This issue was answered in the affirmative by the Karnataka High Court.117 The Court observed: The definition of the word ‘workman’ given in Section 2(s) of the Act without causing the least violence to the language used, is susceptible of only meaning that every person employed in an industry irrespective of his status—temporary, permanent or probationary, would be a workman. Only such persons employed in an industry who fall within the excepted categories specified in clauses (i) to (iv) of that provision would not be workmen for the purpose of the Act. It is not the case of the corporation that a probationer falls within any of the excepted categories. The Court 'accordingly' held that exclusion of probationary from the purview of Section 2(s) would do violence to the language of the provision.

9. Domestic Servant – Not Workman In Management of Som Vihar Apartment Owners Housing Maintenance Society Ltd v. Workmen C/o Indian Engg. & General Management118, the Supreme Court ruled that service rendered by a domestic servant is purely a

personal or domestic matter and, therefore, falls outside the purview of ‘workman’ under the Industrial Disputes Act. The Court referred to its earlier decision in Bangalore Water Supply & Sewerage Board119 and observed that it is not an authority for the proposition that domestic servants are also to be treated to be workmen even when they carry out work in respect of one or many masters. The Court observed that the whole purpose of the ID Act is to focus on resolution of industrial disputes and the regulation will not meddle with every little carpenter or a blacksmith, a cobbler or a cycle repairer who comes outside the ambit of industry and rendered service to the members of a society, which is constituted only for the benefit of those members; employees engaged by it for rendering such services cannot be said to be ‘workmen’ under Section 2(s) of the ID Act. The aforesaid view was reiterated in Md. Manjur & Ors v. Syam Kunj Occupants’ Society & Others.120

10. Legal Representative of Deceased Workman: If Workman Does the definition of ‘workman’ include heir or the legal representative of deceased workman? This issue figured in Veerarnani v. Madurai District Cooperative Supply and Marketing Society Ltd.121 The Madras High Court, however, answered it in negative because the definition of ‘workmen does not include the heir or the legal representative of a deceased workman.’

11. Gardener The Supreme Court in M/s Bharat Heavy Electricals Ltd v. State of Uttar Pradesh122 was called upon to determine whether gardeners engaged through contracts for upkeeping parks inside factory premises and residential colonies were workmen under the Industrial Disputes Act, 1947 read with Uttar Pradesh Industrial Disputes Act, 1947. In this case, the respondents were engaged as gardeners (malis) to sweep, clean, maintain and look after the lawns and parks inside the factory premises and the campus of the residential colony of M/s Bharat Heavy Electricals Ltd through the agency of the respondent. Their services were terminated on 1 December 1988. They raised industrial dispute before the labour court. The company took the plea that they were never employed by it and it was not liable to pay any amount of compensation or to reinstate them in service. The labour court directed their re-employment and payment of compensation. Aggrieved by the award, the appellant filled writ

petition before the High Court. The High Court dismissed the petition. Aggrieved by this finding, the company filed an appeal before the Supreme Court. While dealing with the status of gardeners, the Supreme Court ruled that where workman-labour is engaged to produce goods or services and these goods or services are for the business of another, the other is employer. The Court also held that the work of the respondent workmen is not totally disassociated for the appellant to say that they were not employees of the appellant. The Court held that the definition of ‘employer’ given in Section 2(i) (iv) of the Act is an inclusive definition. If the respondents-workmen as a matter of fact were employed with the appellant to work in their premises and which fact is found established after removing the mask or facade of make-believe employment under the contractor, the appellant cannot escape its liability. The Court also drew attention to a vital fact that the appellant did not produce the records alleging that they were not available and this led to adverse inference against it. A perusal of the aforesaid judgement reveals that the Court distinguished this case with the decision given by the Constitution bench of this Court in Steel Authority of India Ltd & Ors. v. National Union Waterfront Workers123. Be that as it may, the judgement does not meet the requirement of global competition which is the main demand of the employer.

12. Piece-Rated Workers In Shining Tailors v. Industrial Tribunal124, the Supreme Court held that tailors working on piece rate basis in a big tailoring establishment were workmen of the owner of the establishment. The Court cautioned that every piece-rated workman is not an independent contractor and that piece-rated payment meaning thereby payment correlated to production is a well-recognized mode of payment to industrial workmen.

13. Legal Assistant/Legal Advisor: If Workman In Management of Sonepat Cooperative Sugar Mills Ltd v. Ajit Singh125, the respondent was appointed to the post of ‘legal assistant’, the qualification for which was a degree in law with a practising licence. The nature of his duties was to prepare written statements and notices, recording equity proceedings, giving opinions to the management, drafting, filing the pleadings and representing the appellant in all types of cases. He was also conducting departmental enquiries against workmen in the establishment. He was placed on probation and his post

was dispensed with, following which he was terminated. He raised an industrial dispute. The question before the labour court was ‘Whether the applicant was a workman’; labour court held he was a workman, which was upheld by High Court. Management preferred an appeal to the Supreme Court. Following its earlier decisions in A Sundarambal v. Govt of Goa, Daman & Diu126, and H R Adyanthaya v. Sandoz (India) Ltd,127 and rejecting S K Verma v. Mehesh Chandra (supra), this Court held: Thus, a person who performs one or the other jobs mentioned in the aforementioned provisions only would come within the purview of the definition of workman. The job of a clerk ordinarily implies stereotyped work without power of control or dignity or initiative or creativeness. The question as to whether the employee has been performing clerical work or not is required to be determined upon arriving at a finding as regards the dominant nature thereof. With a view to give effect to the expression to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work, the job of the employee concerned must fall within one or the other category thereof. It would not be correct to contend that merely because the employee had not been performing any managerial or supervisory duties, ipso facto he would be a workman …The respondent had not been performing any stereotyped job. His job involved creativity. He not only used to render legal opinion on a subject but also used to draft pleadings on behalf of the appellant as also represent it before various courts/authorities. He would also discharge quasi-judicial functions as an inquiry officer in departmental enquiries against workmen. Such a job, in our considered opinion, would not make him a workman. In Sonipat Central Cooperative Bank Ltd v. Presiding Officer, Industrial Tribunal-cum-Labour Court128, the Punjab and Haryana High Court held that an advocate/legal advisor cannot come under the definition of ‘workman’.

14. Appraiser: If Workman In Puri Urban Cooperative Bank v. Madhusudan Sahu129, the Supreme Court held that the appraiser engaged by a bank to appraise quality, purity and value of ornaments offered for pledging to bank was not a ‘workman’ because there was

no master and servant relationship between the employer and the appraiser.

15. Research Fellow: If Workman Delhi High Court in Jamia Hamdard v. K S Durrany130 held that a research fellow of Jamia Hamdard, a deemed university, doing his own research during the tenure of fellowship, guiding research and helping the administration of the department’s quarterly was not a ‘workman’ under Section 2(s) of the Industrial Disputes Act, 1947, because his functions were purely academic.

16. Driver: If Workman In Mahajan Borewell Company v. Rajaram Bhat131, the Karnataka High Court held that a geologist provided with a driver to drive his vehicle and a helper to assist him in transportation of instruments was not exercising supervisory, administrative or managerial function. Hence he was held to be a ‘workman’.

17. Other Cases Persons employed as carpenters with Kurukshetra University, Kurukshetra,132 a conductor in Road Transport Corporation,133 employees employed to do skilled, manual, clerical or technical work, irrespective of their salary,134 temporary employees of municipal corporation completing 240 days of service,135 clerk who is miscalled the branch manager of a central cooperative bank,136 employees of the cafetaria to provide food service to the residents of the hostel and others in the G B Pant University of Agriculture and Technology137, drivers of UP Scheduled Caste Finance and Development Corporation Ltd, getting salary less than ₹500/- per month as it then was,138 have been held to be workmen within the meaning of Section 2(s). Pujaris of temples,139 persons supervising work of maintenance in the capacity of maintenance engineers having power to grant leave140, an appraiser engaged by a bank to appraise quality, purity, value of ornaments offered for pledging to bank,141 and daily rated lower division clerks in the Famine Relief Section142 have been held not to be workmen under Section 2(s).

G. Current Approach of the Supreme Court on the Interpretation of Section 2(s) In Devinder Singh v. Municipal Council, Sanaur143, the Supreme Court ruled:

The source of employment, the method of recruitment, the terms and conditions of employment/contract of service, the quantum of wages/pay and the mode of payment are not at all relevant for deciding whether or not a person is a workman within the meaning of Section 2(s) of the Act. 2. The definition of workman also does not make any distinction between full-time and part-time employees or a person appointed on contract basis. There is nothing in the plain language of Section 2(s) from which it can be inferred that only a person employed on regular basis or a person employed for doing whole-time job is a workman and the one employed on temporary, part-time or contract basis on fixed wages or as a casual employee or for doing duty for fixed hours in not a workman. 3. Whenever an employer challenges the maintainability of industrial dispute on the ground that the employee is not a workman within the meaning of Section 2(s) of the Act, what the labour court/industrial tribunal is required to consider is whether the person is employed in an industry for hire of reward for doing manual, unskilled skilled, operational, technical or clerical work in an industry. Once the test of employment for hire or reward for doing the specified type of work is satisfied, the employee would fall within the definition of ‘workman’. From the above, it appears that the definition does not exclude persons employed on (i) temporary basis, (ii) part-time, (iii) contract basis on fixed wages, (iv) casual employees or (v) for doing duty for fixed hours. The Court has also brushed aside various tests laid down by it in its earlier decisions.

H. Recommendations of the [Second] National Commission on Labour The [Second] National Commission on Labour has recommend that government may lay down a list of such highly paid jobs which are presently deemed to be employing workmen as being outside the purview of the laws relating to workmen and included in the proposed law for the protection of non-workmen. Another alternative is that the government fix a cut-off limit of remuneration which is substantially high, in the present context, such as ₹25,000/- p.m. beyond which employees will not be treated as ordinary ‘workmen’. The Commission has also recommended that supervisors would be kept out of definition of ‘workers’ and would be clubbed alongwith managerial and administrative employees.

I. Employer Section 2(g) of the Act defines an ‘employer’ to mean: (i) in relation to an industry carried on by or under the authority of any department of the Central Government or a state government, the authority prescribed in this behalf, or where no authority is prescribed, the head of the department; (ii) in relation to an industry carried on by or on behalf of a local authority, the chief executive officer of that authority. In Western India Automobile Association v. I. T.144, the federal court held the statutory definition to be neither exhaustive nor inclusive. Observed Justice Mahajan: In relation to (industries carried on by government and local authorities) a definition has been given of the term ‘employer’… No attempt, however, was made to define the term ‘employer’ generally or in relation to other persons carrying on industries or running undertakings.145 The proposition has since not been challenged though, paradoxically, the provisions of the Act have never been invoked to resolve industrial disputes arising in ‘an industry carried on by or under the authority of any department of the Central or a state government’. An ‘employer’ does not cease to be an ‘employer’ merely because, instead of employing workmen himself, he authorizes his agents or servants to employ them.146 Further, in view of the provisions of Section 18, judicial pronouncements have extended the coverage of expression ‘employer’ to include his heirs, successors and assignees. However, only those who are currently employees of the transferee-employer can be lawful participants in an ‘industrial dispute’ and raise a dispute concerning such erstwhile employees of the transferor-employer as have not been employed by the transferee employer.147 The erstwhile employees of the transferor-employer cannot, unless they are employed by the transferee-employer, themselves raise an industrial dispute with the transferee-employer.148 This is so because of the requirement of master and servant relationship between the disputants.

1 2

Section 2(s) (vi) of the Industrial Disputes (Amendment) Act, 2010 has raised the wage limit to ₹10,000. AIR 1957 SC 264.

3 4 5 6 7 8

9 10 11 12 13 14 15 16 17 18 19 20 21 22

23 24 25 26 27 28 29 30 31 32

Dharangadhra Chemical Works Ltd v. State of Saurashtra, AIR 1957 SC 264 at 267. Ibid. Ibid. Id. at 268. (1965) 2 LLJ 4 (SC). i.e., persons who though have no independent calling of their own work for the enterprise of another and depend for their income on the hire or reward which they get in respect of their employment, e. g., handloom weavers, cigar rollers, match box framers, steel trunk makers, goldsmiths and brass workers, etc. Chintaman Rao v. State of Madhya Pradesh, (1958) 2 LLJ 252 (SC). State of Kerala v. V M Patel, (1961) 1 LLJ 744 (SC). Bridhichand Sharma v. First Civil Judge, (1961) 2 LLJ 86 (SC). Dharangadhra Chemical Works Ltd. case, AIR 1957 SC 264. Shankar Balaji Waje v. State of Maharashta, 1962 1 LLJ 119 (SC). (1961) 2 LLJ 86 (SC). (1958) 2 LLJ 252 (SC). (1962) 1 LLJ 119 at 123. (1961) 2 LLJ 86 at 126. D C Dewan Mohideen Sahib & Sons v. United Bidi Worker's Union, (1964) 2 LLJ 633. (SC). Id. at 638. Ibid. Standard Vacuum Refining Co. of India Ltd v. Its Workmen, (1980) 2 LLJ 233 (SC). See Shibu Metal Works v. Their Workmen, (1966) 1 LLJ 717 (SC); National Iron & Steel Co. Ltd v. State of W. Bengal, (1967) 2 LLJ 23 (SC); Vegoils Pvt. Ltd v. Workmen, (1972) 2 LLJ 567 (SC). The Parliament gave its approval by adopting the Contract Labour (Regulation and Abolition) Act, 1970 to ‘regulate the employment of contract labour in certain establishments and provide for its abolition in certain circumstances and matters connected therewith.’ Punjab National Bank v. Ghulam Dastagir, (1978) 2 SCR 358. Dharangdhara Chemicals Ltd v. State of Saurashtra, op. cit. 262. Shivanandan Sharma v. Punjab National Bank, op. cit. Shivandandan Sharma v. Punjab National Bank, op. cit. Ibid. Shivandan Sharma v. Punjab National Bank, op. cit. Ibid. Hussainbhai v. Alath Factory, (1978) 2 LLJ 397 (SC). Ibid. 2001 LLR 961 (SC). 1983 Lab. IC 1509.

33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66

(2004) 1 SCC 126. 2011 (10) SCALE 478. (2009) 13 SCC 374. 2011 Lab. IC 2799. See Chintaman Martand Salvekar v. Phalton Sugar Works Ltd, (1954) 1 LLJ 499 (L.A.T.); Janardhan Mills Ltd v. Certain Workman, (1953) 1 LLJ 344. Raymond v. Ford Motors Co. Ltd, (1951) 1 LLJ 167. Lakshmi Devi Sugar Mills v. State of UP, (1955) 2 LLJ 250 (Allahabad). See Jute Mills, West Bengal v. Their Workmen, (1952) 1 LLJ 264 (IT); See also Cawnpore Tannery Ltd v. Their Workmen, (1955) 2 LLJ 259. An armless person working with legs or chest would be doing manual work. See supra note 40. B L C Ltd v. Ram Bahadur Jamadar, (1957) 1 LLJ 422 (LAT). Bharat Kala Kendra v. R K Baweja, (1980) 2 LLJ 236 (Delhi). See S A Phenany v. J Walter Thompson Co., (Eastern) Ltd Bombay, 9 FIR 324 (LAT). See Chintaman Martand Salvekar v. Phalton Sugar Works Ltd, op. cit., 499. See Lakshmi Devi Sugar Mills Ltd v. State of Uttar Pradesh, (1995) 2 LLJ 250. See Cawnpore Tannery Ltd v. Their Workmen, (1954) 2 LLJ 459 and Jaswant Sugar Mills Ltd v. Shri D Smith, (1954) 2 LLJ 337. (1983) 2 LLJ 429. (1994) 4 SCC 164. Ibid. Blue Star Ltd v. N R Sharma, (1975) 2 LLJ 300 (Delhi). Anand Bazar Patrika (Pvt.) Ltd v. Its Workmen, (1969) 2 LLJ 670 (SC). Ibid. All India Reserve Bank Employees' Association v. Reserve Bank of India (1965) 2 LIJ 178. Ananda Bazar Patrika v. Its Workman, op. cit. Burmah Shell Co. v. Burmah Shell Management Staff Association, AIR 1971 SC 922. (2011) II CLR 485. (1999) LLR 21 (Bom.). (1988) (56) FLR 148 (SC). Murugalli Estate v. Industrial Tribunal, (1964) 2 LLJ 164 (Madras). Id. at 168. Marugalli Estate, Hardypet, v. Industrial Tribunal Madras, op. cit. (1982) 2 LLJ 288. Id. at 297–98. Workmen of Macforline and Co. v. Fifth I T, (1964) 2 LLJ 556. (Calcutta).

67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85

86 87

88 89 90 91 92 93 94 95 96 97 98 99 100

Id. at 588. (1981) 1 LLJ 267; On appeal 1983 Lab. IC 1629 (SC). (1986) Lab. IC 1741. (1984) Lab IC 658. Lloyds Bank Ltd. v. P L Gupta, AIR 1967 SC 428. Indian Iron and Steel Co. Ltd v. Workmen, AIR 1958 SC 130, 137. Madan Gopal v. R S Bhatia, AIR 1975 SC 1898. Punjab Cooperative Bank v. R S Bhatia, AIR 1975 SC 1526. (1970) 2 LLJ 590 (SC). (1988) I LLJ 363 (SC). (1994) (68) FLR 1101 (SC). Corpus Juris, Vol. 40, 402. (1991) Lab. IC 557 (H C Madras). Section 2(9). 2011 LLR 357. Section 2(9) (d). Section 2(9) (d). Standard Vacuum Oil Co. v. Labour Commissioner, AIR 1960 Madras 288 at 291. The press superintendent who has been discharging the functions of managerial supervisory nature not a workman. See Yadeshwar Kumar v. M S Bennet Coleman, 2007 LLC 1138. See also V K Sharma v. Govt. of NCT, 2008 LLR 521. (2012) 1 SCC 619. The Industrial Disputes (Amendments) Bill, 2009 has raised the wage limit to ₹10,000. But still it is being debated whether the supervisor should be considered to be a ‘workman’. 2004 LLR 1078. J Philips v. Labour Court. (1993) Lab. IC 1455. (1964) 3 SCR 56. (1970) 3 SCR 378. S K Verma v. Mahesh Chandra, (1983) 3 SCR 799. H R Adyanthaya v. Sandoz (India) Ltd. (1994) 5 SCC 737. (2004) 8 SCC 387. 2012 LLR 30 (Mad.). AIR 1976 SC 678. (1991) Lab. IC 2371 (SC). (1995) 1 LLJ 303 (SC); See also M/s Pfizer Ltd v. State of UP, 2010 LLR 586. (2002) 2 LLJ 275. (2008) 10 SCC 698.

101 (2008) 1 SCC 542. 102 (2008) 3 SCC 446; See also Kan Singh v. Distt. Ayurved Officer, 2012 LLR 325 (Patna)

and Himachal Pradesh State Electricity Board v. Laxmi Devi, 2011 LLR 52 (H.P.). 103 2011 Lab. IC 2799. 104 (2001) 7 SCC 630. 105 (1989) 1 LLJ 62 (SC); See also Amar Jyoti School v. Govt. of NCT. (2009) 122 FLR 354. 106 (2004) 1 SCC 755. 107 1986 Lab. IC 1516 (Alld.) 108 2010 LLR 376. 109 (1997) 2 LLJ 549. 110 Workmen of Dimakuchi Tea Estate v. Dimakuchi Tea Estate, (1958) 1 LLJ 500. 111 (1999) 1 LLJ 449. 112 (2004) 1 LLR 993. 113 (2005) LLR 320. 114 (2003) 6 SCC 416. 115 (1983) 1 LLJ 30. 116 Id. at 37. 117 (2000) lab. IC 2468. 118 (2000) Lab. IC 2468. 119 (2002) (9) SCC 652. 120 (2004) LLR 863. 121 (1983) 2 LLJ 88 (Madras). 122 (2003) LLR 817. 123 JT (2001) (7) SC 268. 124 AIR 1984 SC 268. 125 (2005) LLR 309. 126 2012 LLR 26. 127 AIR 1994 SC 2608. 128 2012 LLR 26. 129 1993 Lab. IC 1462. 130 (1992) 1 LLJ 874 (Delhi). 131 (1998) LLR 363 (Karnataka). 132 2002 Lab. IC 2249. 133 R Mallesham v. The Additional Industrial Tribunal, Malakpet, Hyderabad, (1990) Lab.

IC NOC 158 (Andh. Prad.). 134 Iqbal Hussain Qureshi v. Asstt. Labour Commissioner, (1990) Lab. IC NOC 131 (MP). 135 Mam Chand v. State of Haryana. (1989) Lab. IC NOC 42 (P & H).

136 Nirmal Singh v. The State of Punjab, (1984), SLJ (P & H) 674. 137 G B Pant University of Agriculture & Technology v. State of U.P. (2000) SCC. 138 Nathaniel Masih v. UP Scheduled Caste Finance & Development Corporation Ltd,

(1989) 2 Lab. IC 2276 (All). 139 Kesavo Bhat v. Sree Ram Ambulam Trust, (1990) Lab. IC NOC 104 (Kerala). 140 Vimal Kumar Jain v. Labour Court, Knapur, AIR (1988) SC 384. 141 Management of Puri Urban Cooperative Bank v. Madhusnhan Sahu, (1992) Lab. IC

1462 (SC). 142 State of Rajasthan v. Babu Khan, (1994) Lab. IC 181 (Rajasthan). 143 2011 LLR 785 (SC). 144 Western India Automobile Association v. Industrial Tribunal, Bombay, (1949) LLJ 245 145 146 147 148

(FC). Id. at 245, 248. Purushottam Pottery Works, Dharangdhara, (1958) 2 LLJ 523 (IT); Bombay Dock Labour Board v. Stevedore Workers, (1954) 2 LLJ 200 (IT). Dahingeapara Tea Estate v. Their Workmen, (1956) 1 LLJ 187 (LAT) Kays Construction Co. (P) Ltd v. Its Workmen, (1958) 2 LLJ 660 (SC). Anakapalla Cooperative Agricultural & Industrial Society v. Its Workmen (1962) 2 LLJ 621 (SC).

CHAPTER

17 Settlement of Industrial Disputes Labour management relations involve dynamic socio-economic process. Both parties, namely, labour and management, constantly, strive to maximize their preferred values by applying resources to institutions. In their efforts, they are influenced by and are influencing others. The objectives of labour and management are not amenable to easy reconciliation. For instance, labour and management are interested in augmenting their respective incomes and improving their power position. Since, however, the resources are limited, interest of one party conflicts with the other. Further, the means adopted to achieve the objective which vary from simple negotiation to economic warfare adversely affect the community’s interests in maintaining an uninterrupted and high level of production. Moreover, in a country like ours where labour is neither adequately nor properly organized, unqualified acceptance of the doctrine of ‘free enterprise’, particularly between labour and management strengthens the bargaining position of already powerful management. In order, therefore, to protect the interest of the community as well as that of labour and management, legislature has found it necessary to intervene in labour management relations. Thus, the Industrial Disputes Act, 1947 provides for the constitution of various authorities to preserve industrial harmony. At the lowest level is the works committee. The various machineries for investigation and settlement of industrial disputes under the Act are (i) conciliation (ii) court of inquiry (iii) adjudication and (iv) voluntary arbitration. Quite apart from the aforesaid statutory machineries, several nonstatutory machineries such as code of discipline, joint management council,

tripartite machinery and joint consultative machinery play an important role in the process of preventing and settling industrial disputes.

I. WORKS COMMITTEE The institution of works committee was introduced in 1947 under the Industrial Disputes Act 1947, to promote measures for securing and preserving amity and good relations between employers and workmen.1 It was meant to create a sense of partnership or comradeship between employers and workmen.2 It is concerned with problems arising in day-to-day working of the establishment and to ascertain grievances of the workmen.3

A. Constitution of Works Committee Industrial Disputes (Central) Rules The Industrial Disputes Act, 1947 empowers the appropriate government to require an employer having 100 or more workmen to constitute a works committee. Such a committee shall consist of representatives of employers and workmen engaged in the establishment. However, the number of representatives of the workmen shall not be less than the number of representatives of the employer. The Industrial Disputes (Central) Rules, 1957, Rule 39 contemplates that the number of representatives of the workmen shall not be less than the number of representatives of the employer and further that the total number of members shall not exceed 20. Rule 40 contemplates that the representatives of the employer shall be nominated by the employer and shall, as far as possible, be officials in direct touch with or associated with the working of the establishment. Rule 41 envisages that the employer shall ask the registered trade union of the workmen in the concerned establishment to inform the employer in writing as to how many of the workmen are members of that union and how their membership is distributed among the sections, shops or departments of the establishment. In other words, the employer is required to ask the registered trade union to supply him the nominal roll of members of the trade union. The election held without consultation with the trade union is liable to be set aside.4 Rule 42 provides that on receipt of the said information from the registered trade union, the employer shall provide for the election of representatives of the workmen on the works

committee in two groups: (i) those to be elected by the workmen who are members of the registered trade union and (ii) those to be elected by the workmen who are not members of the registered union. It is further provided that the number of two groups should bear same proportion to each other as the union members in the establishment bear to the non-members. The first proviso to this rule contemplates that where more than half the workmen are members of the union or any one of the unions, the above kind of division in two groups shall not be made. This shows that where in an industrial establishment the majority of workers are members of a registered trade union, the distribution of the elected representatives as provided in Rule 42 in two groups will not be necessary5. In other words, in that situation, the representatives of the workmen will be elected in a single group without any kind of division. It is not provided that if the union has majority of the workers as its members, then nomination of the representatives of the workmen may be done by the employer in consultation with the trade union. Thus, there cannot be any nomination of representatives of workmen on the works committee. The scheme of these rules for constitution of works committee has been fully explained in Union of India v. M T S S D Workers Union,6 as follows: (a) Where there is a registered trade union having more than 50 per cent membership of the workers in that establishment, the total number of members of the works committee will be elected without distribution of any constituencies, (b) if in an industry no trade union registered under Trade Unions Act represents more than 50 per cent of the members, then only the election will be held in two constituencies, one from the members of the registered trade union or unions and the other from nonmembers of the trade unions and it is only in this contingency, it is further provided that if the employer thinks proper, (he) may further subdivide the constituency into department, section or shed. In B Chinna Rao v. Naval Civilian Employees Union7, Andhra Pradesh High Court was invited to interpret Rule 41 of the Industrial Disputes (Central) Rules, 1957 which reads as under: Rule 41: Consultation with trade unions: (i) Where any workmen of an establishment are members of a registered trade union; the employer shall ask the union to inform him in writing (a) how many workmen are

members of the union, and (b) how their membership is distributed among the sections, shops or departments of the establishment. (ii) Where an employer has reason to believe that the information furnished to him under sub-rule (i) by any trade union is false, he may, after informing the union, refer the matter to the assistant labour commissioner (central) concerned for his decision; and the assistant labour commissioner, after hearing the parties shall decide the matter and his decision shall be final. While interpreting the aforesaid provisions, the Court held that reference to the commissioner has to be made when the employer has ‘reason to believe that the information furnished to him by the trade union is false’. False doubt expressed by the employer need not necessarily entail a reference. If a mere perusal of the list furnished by a trade union enables an employer to form a definite opinion, he can certainly act accordingly. Since the reference to the commissioner would have the effect of postponing the election, recourse must be had only when it is otherwise necessary and mandatory.

B. Functions of Works Committee The main function of the works committee is ‘to promote measures for securing and preserving amity and good relations between the employers and workmen and, to that end, to comment upon matters of their common interest or concern and endeavour to compose any material difference of opinion in respect of such matters.’8 Thus, the works committees are normally concerned with problems of day-to-day working of the concern. They are ‘not intended to supplant or supersede the union for the purpose of collective bargaining. They are also not entitled to consider real or substantial changes in the conditions of service. Their task is only to reduce friction that might arise between the workmen and the management in the day-to-day working. The decision of works committee is neither agreement nor compromise nor arbitrament. Further, it is neither binding on the parties nor enforceable under the Industrial Disputes Act. It is true that according to the Supreme Court the ‘comments’ of the works committee are not to be taken lightly but it is obvious that the observation has relevance only where a third party gets involved in the claim adjustment process. As between the disputants, these comments, have only added persuasive value. But, by no stretch of imagination can it be said that the duties and functions of the works

committee include the decision on such an important matter as an alteration in conditions of service.’9

C. Operation and Assessment We shall now turn to discuss the functioning of the works committee and assess its working. A survey of the functioning of the works committee reveals that during 1997, 869 works committees were actually formed in the central sphere establishment involving 8,16,924 workers out of the 1,131 works committees to be formed involving 11,79,577 workers.10 Be that as it may, the works committees on the whole failed to deliver the goods. Several factors are responsible for the same. First, in the absence of strong industry-wise labour organization, the politically-oriented trade unions consider works committees to be just another rival. The elaborate provisions for securing representation of registered trade unions for proportional representation of union and non-union workmen and the possibility of further splitting of electoral constituencies into groups, sections, departments or shops not only accentuates the problem of rivalry but also weakens the strength of workmen in such committees. Second, notwithstanding the parity between workmen’s and employers’ representatives, the fact that the chairman of the committee is nominated by the employer from amongst his own representatives, has often helped the management to maintain an upper hand in the proceedings. Unwelcome items on the agenda are promptly declared to be out of order on one ground or the other. Absence of statutory provisions defining jurisdiction of these committees only helps the recalcitrant employer. Lastly, although tribunals and courts feel that ‘agreed solution between the works committee and the management are always entitled to great weight and should not be readily disturbed’, the fact remains that there is no machinery to enforce the decisions of these committees. Indeed, there is nothing to prevent by-passing of works committee. Perhaps it will be incorrect to say that most of the disputes that come up for adjudication have never been discussed in the works committee. Confronted with this situation, particularly in the absence of statutory provisions, the tribunals and courts have invariably held that nondiscussion is no bar to reference by the government.

D. Remedial Measures The [First] National Commission on Labour suggested the following measures for the successful functioning of a works committee:

(a) A more responsive attitude on the part of management (b) Adequate support from unions (c) Proper appreciation of the scope and functions of the works committee (d) Whole-hearted implementation of the recommendations of the works committee (e) Proper coordination of the functions of the multiple bipartite institutions at the plant level now in vogue The Commission also added: It is the creation of an atmosphere of trust on both sides. Unions should feel that management is not sidetracking the effective union through a works committee. Management should equally realize that some of their known prerogatives are meant to be parted with. Basic to the success of such unit level committees is union recognition.11 It is submitted that for the success of a works committee, the following steps should be taken: (i) Trade unions should change their attitude towards the works committee. The unions should feel that management is not sidetracking the effective union through a works committee, (ii) The management should also realize that some of their known prerogatives are meant to be parted with, (iii) Recognition of trade unions should be made compulsory and the provisions therefore should be incorporated in the Trade Unions Act, 1926.

II. GRIEVANCE SETTLEMENT AUTHORITIES Experience shows that in the day-to-day running of business, disputes between the employer and workmen are resolved by administrative process referred to as grievance procedure.12 The Indian Labour Conference has also adopted a similar concept of a grievance in its following recommendations:13 Complaints, affecting one or more individual workers in respect of their wage payments, overtime, leave, transfer, promotion, seniority, work assignment, working conditions and interpretation of service agreement, dismissal and discharges would constitute grievance. Where the points of dispute are of general applicability or of considerable magnitude, they will fall

outside the scope of grievance procedure. The aforesaid concept has also been adopted in the guiding principles for a grievance procedure appended to the Model Grievance Procedure in India.14 Further, Clause 15 of the Model Standing Orders in Schedule I of the Industrial Employment (Standing Orders) Central Rules, 1946, specifies that ‘all complaints arising out of employment including those relating to unfair treatment or wrongful exaction on the part of the employer or his agent, shall be submitted to the manager or the other person specified in this behalf with the right to appeal to the employers.’ Moreover, the state governments have framed rules under the Factories Act, 1948 requiring a welfare officer to ensure settlement of grievances. The Voluntary Code of Discipline adopted by the Sixteenth Session of the Indian Labour Conference in 1958 also provides that: (a) the management and unions will establish, upon a mutually agreed basis, a grievance procedure which will ensure a speedy and full investigation leading to settlement, and (b) they will abide by the various stages in the grievance procedures.15 However, there is no legislation in force which provides for a well-defined and adequate procedure for redressal of day-to-day grievances in an industrial establishment. In order to meet the shortcoming, the Industrial Disputes (Amendment) Act, 1982, provides for setting up of grievance settlement authorities and reference of certain individual disputes to such authorities. Section 9C of the amended Act provided: (1) The employer in relation to every industrial establishment in which 50 or more workmen are employed or have been employed on any day in the preceding 12 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. (2) 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. (3) 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. (4) 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. However, the aforesaid provisions of the Industrial Disputes (Amendment) Act, 1982, have not been enforced, presumably because the Hospitals and Other Institutions (Settlement of Disputes) Bill, 1982, has not so far been passed. Further, no rules were framed under the unenforced Section 9C. The (Second) National Commission on Labour in 2002 has recommended that a grievance redressal committee for organizations employing 20 or more workers be constituted. But no legislative or administrative action was taken till 2010.

Grievance Redressal Machinery In 2010, the Industrial Disputes (Amendment) Act, 201016 inserted new chapter IIB on grievance redressal machinery. Section 9C of the Amendment Act provides as follows : (1) Every industrial establishment employing 20 or more workmen shall have one or more grievance redressal committees for the resolution of disputes arising out of individual grievances. (2) The grievance redressal committee shall consist of equal number of members from the employer and the workmen. (3) The chairperson of the grievance redressal committee shall be selected from the employer and from among the workmen alternatively on rotation basis every year. (4) The total number of members of the grievance redressal committee shall not exceed six: 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. (5) Notwithstanding anything contained in this section, the setting up of grievance redressal committee shall not affect the right of the workman to raise industrial dispute on the same matter under the provisions of this Act. (6) The grievance redressal committee may complete its

proceedings within 30 days on receipt of a written application by or on behalf of the aggrieved party. (7) 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 of the same and send a copy of his decision to the workman concerned. (8) Nothing contained in this section shall apply to the workmen for whom there is an established grievance redressal mechanism in the establishment concerned.

III. CONCILIATION A. General Conciliation is a persuasive process of settling industrial disputes. It is a process by which a third party persuades disputants to come to an equitable adjustment of claims. The third party, however, is not himself a decision maker: he is merely a person who helps the disputants through persuasion to amicably adjust their claims. The ultimate decision is of the disputants themselves. For this purpose, the Industrial Disputes Act, 1947, provides for the appointment of conciliation officers and constitution of board of conciliation by the appropriate government for promoting settlement of industrial disputes. For the successful functioning of the conciliation machinery, the Act confers wide powers and imposes certain duties upon them. Conciliation as a mode of settling industrial disputes has shown remarkable success in many industrialized countries. It is said that it has proved to be a great success in Sweden.17 In India, it has generally been reported that conciliation machinery has played an important role in resolving industrial disputes. Statistics no doubt, supports this claim. During 2008-2009, the Central Industrial Relations Machinery (CIRM) intervened in 397 threatened strikes and its conciliatory effort succeeded in averting 362 strikes which represent a success rate of 95.5 per cent. In the year, the number of disputes received by CIRM were 8,586, number of disputes in which formal conciliation was successful were 1,377 and number of disputes in which conciliation proceeding ended in failure were

1,798. The statistics of the working of the conciliation machinery reveal that the conciliation machinery at central level is extremely high in many states. It has, however, made no remarkable success in several states. Several factors may be accounted for the same. First, failure of conciliation proceeding may lead to the reference to adjudicating authorities under the Industrial Disputes Act, 1947.18 Second, lack of proper personnel, inadequate training and low status enjoyed by conciliation officers and frequent transfers of conciliation officers result in the failure of conciliation.19 Third, undue emphasis on legal and formal requirements also leads to the failure of conciliation. Fourth, considerable delay in conclusion of conciliation proceedings also makes the conciliation machinery ineffective. Fifth, failure of conciliation machinery has been attributed to lack of adequate powers of conciliation authorities.

B. Conciliation Authorities 1. Constitution of Conciliation Authorities (a) Appointment of Conciliation Officer. Under Section 4, the appropriate government is empowered to appoint conciliation officers for promoting settlement of industrial disputes. These officers are appointed for a specified area or for specified industries in a specified area or for one or more specified industries,20 either permanently or for a limited period. (b) Constitution of Board of Conciliation. Where dispute is of complicated nature and requires special handling, the appropriate government is empowered to constitute a board of conciliation. The boards are preferred to conciliation officers. However, in actual practice it is found that boards are rarely constituted. Under Section 10(1) (a), the appropriate government is empowered to refer the existing or apprehended dispute to a board. The board is constituted on an ad hoc basis. It consists of an independent person as chairman and one or two nominees respectively of employers and workmen as members.21 The chairman must be an independent person. A quorum is also provided for conducting the proceedings.

2. Qualifications and Experiences Unlike the adjudicating authorities, the Act does not prescribe any qualification and/or experience for conciliation officer or member of a board of conciliation.

A report of the study committee of the [First] National Commission on Labour, however, reveals that one of the causes of failure of conciliation machinery is lack of proper personnel in handling the dispute. The conciliation officer is sometimes criticized on the ground of his being unaware about industrial life and not having received the requisite training. It is, therefore, suggested that the Act should prescribe qualification and experience for conciliation officer which may include proper and adequate training and knowledge of handling labour problems.

3. Filling of Vacancies The proviso to Section 5(4) requires that where the services of the chairman or any other member have ceased to be available, the board shall not function until the appointment of chairman or member, as the case may be, is made. Section 8 deals with the manner in which the vacancy in the office of chairman or other members of a board will be filled.

4. Jurisdiction Conciliation officers are appointed by the Central and state governments for industries which fall within their respective jurisdiction.

5. Powers of Conciliation Authorities (a) Powers of Conciliation Officer. The Act empowers conciliation officer to conciliate and mediate between the parties. He is deemed to be a public servant within the meaning of Section 21 of the Indian Penal Code.22 He is empowered to enforce the attendance of any person for the purpose of examination of such person or call for and inspect the documents which he considers (i) to be relevant to the industrial dispute or (ii) to be necessary for the purpose of verifying the implementation of any award or carrying out any other duty imposed on him under the Act. For this purpose, he enjoys the same powers as are vested in the civil court under the Code of Civil Procedure, 1908.23 The conciliation officer is also empowered for the purposes of inquiry into any existing or apprehended industrial dispute to enter the premises occupied by any establishment to which the dispute relates after giving reasonable notice.24 Failure to give any such notice does not, however, affect the legality of conciliation proceedings.25 (b) Powers of the Board of Conciliation. The board of conciliation acts in a

judicial capacity and enjoys more powers than conciliation officers. Under the Act, every board of conciliation enjoys the same powers as are vested in a civil court under the Code of Civil Procedure, 1908, when trying a suit. It can enforce the attendance of any person and examine him on oath, compel the production of documents and material objects, issue commission for examination of witnesses, make discovery and inspection, grant adjournment and receive evidence taken on affidavit.26 Every inquiry by a board is deemed to be judicial proceeding within the meaning of Sections 193 and 228 of the Indian Penal Code27 and Sections 345, 346 and 348 of the Code of Criminal Procedure, 1973.28 The proceedings are normally held in public but the board may at any stage direct that any witness be examined or proceedings be held in camera.29 The board is empowered, subject to the rules in this behalf, to follow such procedure as it may think fit.30 The rules provide for the place and time of hearing of the industrial dispute by adjudication or arbitration authorities as the case may be,31 administration of oath by adjudication or arbitration authorities,32 citation or description of the parties in certain cases,33 the issuance of notices to the parties,34 the circumstances when the board can proceed ex-parte35 and correction of clerical mistakes or errors arising from accidental slip or omission in any award.36 The board also has to keep certain matters confidential in the award.37 The board can accept, admit or call for evidence at any stage of the proceedings before it in such manner as it thinks fit.38 The representatives of the parties have the right of examination, cross-examination and addressing the board when any evidence has been called.39 The witnesses who appear before a board are entitled for expenses in the same way as witnesses in the civil court.40

6. Duties of Conciliation Authorities Duties of Conciliation Officers. The Industrial Disputes Act provides for the appointment of conciliation officer, ‘charged with the duty of mediating in and promoting the settlement of industrial disputes.’41 Where an 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, he shall hold conciliation proceeding in the prescribed manner. He may do all such things which he thinks fit for the purpose of inducing the parties to come to a fair and amicable settlement of the disputes.’42 Further, Section 12 (2) directs the conciliation officer to investigate ‘without delay’ the dispute and all matters

affecting merits and right settlement thereof.43 If the settlement is arrived at, the conciliation officer shall send a report together with memorandum of settlement signed by the parties to the dispute, to the appropriate government or an officer authorized on his behalf.44 If no settlement is arrived at, the conciliation officer is required to send a report to the appropriate government containing (i) a full report setting forth the steps taken by him for ascertaining the facts and circumstances of the dispute and for bringing about a settlement thereof, (ii) a full statement of facts and circumstances leading to the dispute, and (iii) the reasons why a settlement could not be arrived at.45 It is a mandatory duty on the part of the conciliation officer to submit the failure report. His omission to do so is culpable, if not motivated.46 Be that as it may, it is for the appropriate government to consider whether on the basis of the failure report and other relevant materials, it should refer the dispute for adjudication or not. If on a consideration of the report, the appropriate government is satisfied that there is a case for reference to board or adjudicating authority, it may make a reference. Where it does not make a reference, it shall record and communicate to the parties concerned its reasons therefor.47 Sub-section 6 of Section 12 provides that the report ‘shall be submitted’ either within 14 days of the commencement of the conciliation proceedings or earlier if required by the appropriate government, or later if all the parties to the dispute agree in writing. The Industrial Disputes Act 1947, draws a distinction between public utility services and non-public utility services. Thus, while in a public utility service, the conciliation officer is bound to hold conciliation, he is not bound to do so in a non-public utility service.48 The powers of the conciliation officer are not adjudicatory but are intended to promote a settlement of dispute. However, a special responsibility has been vested in conciliation officer to see that the settlement arrived at is fair and reasonable and he should then give his concurrence. This is so because the settlement arrived at in the course of conciliation proceedings is binding not only on all parties to the industrial dispute but all other parties summoned to appear in the proceedings and where a party is an employer, his heirs, successors or assignees in respect of the establishment to which the dispute relates; and where a party is composed of workmen, all persons who were employed in the establishment or part of the establishment, as the case may be to which the dispute relates on the date of the dispute and all persons who subsequently become employed in that establishment or part. Section 12, however, raises several important issues: (i) What will be the effect of the failure of a conciliation officer to submit the

(ii)

report within 14 days of the commencement of the conciliation proceedings? Two views are discernible. One view is that the conciliation officer becomes functus officio on the expiry of 14 days from the commencement of conciliation proceedings and thereby invalidates the conciliation proceedings. The other view is that failure to submit the report within 14 days of the commencement of the conciliation proceedings does not affect the legality of the proceedings. The latter view found the approval of the Supreme Court in the State of Bihar v. Kripa Shankar Jaiswal.49 In this case, the conciliation officer had not sent his report to the appropriate government within 14 days of the commencement of the conciliation proceedings. A question arose whether failure to submit the report by the conciliation officer within the prescribed period will affect the legality of the conciliation proceedings. The Supreme Court answered the question in negative. The Court observed that the failure of the conciliation officer to submit his report after the prescribed period does not affect the legality of the proceedings. However, contravention of Section 12 (6) may amount to a breach of duty on the part of the conciliation officer. This decision is, however open to several objections. First, protracted conciliation proceedings tend to be fruitless. Second, since under Section 22 of the Industrial Disputes Act a strike or lockout cannot be declared during the pendency of any conciliation proceedings… and 7 days after (its) conclusion and, on the other hand in order to make the strike or lockout legal it must take place within 6 weeks of the date of notice, the time limit must be certain. Third, management too is debarred by Section 33 from exercising certain of its prerogatives during conciliation proceedings and since this means deprivation of a right, the canons of statutory interpretation suggest that the period of deprivation should be definite and tailored to meet the needs of the situation. Fourth, for industrial peace and harmony, it is essential that the dispute must be settled at an early date. Under the circumstances, it is suggested that the Supreme Court may reconsider its view in the light of the aforesaid reasoning. Whether a conciliation officer has jurisdiction to initiate conciliation proceedings at a place where the management’s establishment is not situated? This issue was raised in M/s. Juggat Pharma (P) Ltd v. Deputy Commissioner of Labour, Madras.50 In this case, the management’s establishment was situated at Bangalore. The company employed certain workmen therein as sales representatives at Madras to look after its

business. The management later terminated their services. On these facts, a question arose whether the conciliation officer at Madras had jurisdiction under Section 12 over the management whose establishment was situated at Bangalore and the sales representatives appointed by them were looking after their work at Madras. The answer to the question depends upon whether a dispute existed or was apprehended between the management and the workmen in Madras. The Court observed that Section 2 (k), which defines an industrial dispute, is not controlled by the location of the management’s establishment in Bangalore or the absence of such establishment in Madras. The fact that the management had no establishment or branch office in Madras did not alter the fact that termination of the workmen’s service was in connection with their employment in Madras. The Court accordingly held that it was open to the conciliation officer to initiate conciliation proceedings under Section 12(1). (iii) Is a notice necessary for a settlement to be in the course of conciliation proceedings? This question was raised in Delhi Cloth & General Mills Co. Ltd v. Union of India.51 In this case, the conciliation officer neither initiated any proceeding for conciliation nor issued any notice for holding the conciliation proceedings. He also made no attempt to induce the parties for reaching a settlement de hors conciliation proceedings. The Delhi High Court held that there was no settlement in the course of conciliation proceedings. (iv) Whether a conciliation officer could go into the merit of the dispute and decide various points in issue one way or the other? The Kerala High Court52 answered the question in the negative and observed that a conciliation officer was not competent to decide the various points at issue between the opposing parties. All that he could do was to persuade the parties to come to a fair and amicable settlement. Although wide powers are conferred upon a conciliation officer to use his resourcefulness to persuade the parties but he has no power to decide anything at all. After having commenced the conciliation proceedings under Section 12, the conciliation officer exceeded his power and acted beyond his jurisdiction by passing the order. The Court highlighted the duties of a conciliation officer: The provision in sub-section (4) of Section 12 of the Act relating to the sending to the government a full report as contemplated thereunder is mandatory in nature. Having failed to bring about

or arrive at a settlement of the dispute, it was the bounden duty of the conciliation officer …. to send to the appropriate government a full report as mandatorily enjoined under Section 12(4) of the Act 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. Thereafter, by virtue of the provisions in Section 12(5), it is for the appropriate government to consider whether it should make a reference or refuse to make a reference. The Court accordingly held that by disposing of the conciliation proceedings on the close of the investigation, the conciliation officer not only failed to perform the statutory function vested in him under Section 12 (4) but also exceeded his power under Section 12 (1). (v) Whether a writ of mandamus can be issued to the conciliation officer, on whose intervention a settlement was arrived at between the management and workmen, directing him to take all measures to see that settlements are implemented or to prohibit the management from laying-off the staff? The Court53 answered the question in the negative and observed that the labour commissioner, while acting under Section 12 as conciliation officer, was not empowered to adjudicate an industrial dispute. All that he could do was to try to persuade the parties to come to a fair and amicable settlement. In other words, his duties were only administrative and incidental to industrial adjudication. There was nothing either in the Act or in the rules empowering the labour commissioner to implement the settlement arrived at between the parties under Section 12 (3). If any of the parties to the settlement were aggrieved by the non-implementation of the terms of settlement by the other party, then the remedy would be to move the government for sanction to prosecute the party in breach of settlement under Section 29. The scope of Section 12 was raised in Manoharan Nair v. State of Kerala54 where the Central Government rejected the demand of the trade unions regarding minimum wages and dearness allowance. Consequently, the workmen went on strike but later it was called off. The negotiations commenced on the Central Government’s counter-proposal but the trade unions rejected the proposal. The regional joint labour commissioner’s efforts to convene another conference also failed. The additional labour commissioner, however, succeeded

in persuading three of these unions to accept the Central Government’s proposal and a settlement was arrived at to this effect, which was countersigned by the additional labour commissioner. The validity of this settlement was challenged on two main grounds: The conciliation officer erred in holding that the trade unions, who were parties to the settlement, represented the majority of the workmen in the establishment and (ii) the jurisdiction of the conciliation officer to resolve that dispute, which related to the matters mentioned in clause 6 did not bind the workmen in other matters. As to the first contention, the Kerala High Court, following the Supreme Court decision in Ramnagar Cane & Sugar Co. v. Jatin Chakravarthy,55 negatived it by holding that a settlement made with the minority would bind all the workmen of the establishment when it was countersigned by the conciliation officer unless, a collusive settlement, designed to defeat certain kinds of claims, is arrived at with those who could not speak for even a small section of the interested workmen. As to the second contention, the Court held that no manner was prescribed for raising an industrial dispute (whether existing at the commencement or cropping up during the pendency of proceedings). It accordingly, rejected the contention that the conciliation officer was incompetent to countersign the final settlement. If the conciliation officer fails to effect a settlement, the appropriate government may, after considering the report of the conciliation officer, refer the dispute to a board or adjudicating authorities and, in particular, not to a court of inquiry. The power is discretionary. But, if the appropriate government decides not to refer the matter, it must record the reasons there of, and communicate the same to the parties concerned. It follows that conciliation officer‘s report is considered by the appropriate government. But unlike the board of conciliation, the conciliation officer is not required to make recommendation for the determination of dispute under the Act. It is suggested that the conciliation will prove to be more effective if the conciliation officer is also be required to make a recommendation to the appropriate government whether or not the matter is fit for adjudication. It is also suggested that the recommendation of a conciliation officer should be given due consideration by the appropriate government. (vi) Can conciliation proceedings pertaining to industrial disputes be initiated and continued by legal heirs even after death of the workman? This question was answered in the affirmative by the division bench of the Karnataka High Court in Dhanalakshmi v. Reserve Bank of India, Bombay.56 The Court held that despite the death of the workman, the

(vii)

point sought to be settled by legal heirs remains an ‘industrial dispute’ for the purpose of adjudication under the Industrial Dispute Act, 1947. Can the registrar of a cooperative society nullify a settlement pertaining to wages made before the conciliation officer between cooperative societies and their employees ? This question was answered in the negative by the Madras High Court in S Jina Chandran v Registrar of Cooperative Societies, Madras.57

7. Duties of Board of Conciliation 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.58 If a settlement is arrived at, the board should send a report to the appropriate government together with a memorandum of the settlement signed by the parties to the dispute.59 If no settlement is reached, the board must send a full report together with its recommendation for the determination of the dispute.60 In case of failure of settlement by a board, the ‘appropriate government’ may refer the dispute to a labour court, tribunal or national tribunal. The government is, however, not bound to make a reference. But where the government does not make a reference in a public utility service after receiving a report from a board, it must record and communicate to the parties concerned its reasons for not doing so.61 A board is required to submit its report within two months of the date on which the dispute was referred to it or within such shorter period as may be fixed by the appropriate government. The time limit for the submission of a report can be extended by the appropriate government or by agreement in writing by all the parties to the dispute.62

8. Conciliation Proceedings The study of conciliation proceedings requires examination of: (i) when and how conciliation machinery is set in motion? and (ii) what is the duration of conciliation proceedings? These questions are of great practical significance. It is important because the management is prohibited from exercising its prerogative during the pendency of conciliation proceedings before a conciliation officer and board of conciliation in respect of an industrial dispute.

Further, workmen and employers in public utility services are prohibited from declaring strike or lockout as the case may be during the pendency of any conciliation proceedings before a conciliation officer. In non-public utility services, management and workmen are prohibited to declare lockout or strike during the pendency of conciliation proceeding before a board of conciliation and 7 days thereafter. Let us now turn to examine when a conciliation machinery is set in motion and what is the duration of conciliation proceedings before the conciliation officer and board of conciliation. (i) Cognizance (a) By Conciliation Officer. In case of public utility services, where a notice of strike or lockout has been given under Section 22, it is mandatory for the conciliation officer to intervene under the Act.63 But in non-public utility services, where an industrial dispute exists or is apprehended, conciliation officer my exercise his discretion to conciliate or not.64 In practice, it has been found that the optional provision is acquiring compulsory status in non-public utility services also.65 The conciliation officer may take note of an existing or apprehended dispute either suo motu or when approached by either of the parties. His power under the Act is essentially confined to investigation and mediation of industrial dispute. (b) By Board of Conciliation. The board assumes jurisdiction over the existing or apprehended dispute when it is referred to it by the appropriate government. (ii)

Pendency of conciliation proceeding before a conciliation officer The opening clause of Sections 22 (1) (d), 22 (2) (d) and 33, namely, ‘during the pendency of any conciliation proceeding before a conciliation officer’ prescribes the period of prohibition of strikes and lockouts in public utility services as well as on the exercise of management’s prerogative. These critical words, however, have to be read with other provisions of the Act and the rules framed thereunder. (a) The commencement of proceedings. Sub-section (1) of Section 20 provides that in public utility services, the starting point of the prohibition is the date on which the conciliation officer receives a notice of strike or lockout under Section 22. (b) The termination of proceedings. Sub-section (2) of Section 20

provides the other terminus of the period of prohibition: A conciliation proceeding shall be deemed to have concluded— (a) where a settlement is arrived at, when a memorandum of the settlement is signed by the parties to the disputes; (b) where no settlement is arrived at, when the report of the conciliation officer is received by the appropriate government or when the report of the board is published under Section 17, as the case may be; or (c) where reference is made to a court, labour court, tribunal or national tribunal under Section 10 during the pendency of conciliation proceedings. Of these, clause (b) alone which has given some ground for anxiety, need detain us. The Supreme Court, however, in Industry Colliery66 while construing the word ‘received’ in Section 20(2) (b) interpreted it to mean ‘when the report is actually received by the appropriate government’ and imposes criminal liability where the employer or the workmen could not possibly know that he was doing an illegal act by declaring a strike or lockout illegal and put prohibition on the use of instruments of economic coercion by the parties which can hardly be justified on the ground of maintaining harmonious labour management relations to facilitate settlement of disputes. The facts are as follows: On 13 October 1949, the workmen gave a notice to the management under Section 22(1) of a one day strike to take place on 6 November 1949. The regional labour commissioner (central) held conciliation proceedings on 22 October 1949. The workmen declined to participate in the conciliation proceedings. On the same day, the regional labour commissioner sent the failure report to the chief labour commissioner stating that no settlement was arrived at in the conciliation proceedings and that he ‘was not in favour of recommending a reference of the dispute to the industrial tribunal’ for adjudication. The failure report of the chief labour commissioner, Delhi was, however, received by the Ministry of Labour only on 19 November 1949. In the meanwhile, the workmen went on a one day strike as per their notice on 7 November 1949. The question arose whether the strike was illegal. This question depended on whether the strike occurred ‘during the conclusion of such proceedings’. The Supreme Court pointed out that under Section 24 (1), a strike was illegal if it commenced or was declared during pendency of a conciliation proceedings …. and 7 days after the conclusion of such proceedings’ which is prohibited under clause (1) of Section 22 (1) and the proceeding is deemed to

have concluded’ where no settlement is arrived at, when the report of the conciliation officer is received by the appropriate government.’ The Court dealt with the word ‘received’ occurring under Section 20(2) (b) as follows: ‘… while the word ‘send’ is used in Section 12 (4) and the word ‘submitted’ in Section 12 (6), the word used in Section 20 (2) (b) is ‘received’. That word obviously implies the actual receipt of the report. To say that the conciliation proceedings shall be deemed to have concluded when the report should, in the ordinary course of business, have been received by the appropriate government would introduce an element of uncertainty, for the provisions of Section 22 (1) (d) clearly contemplate that the appropriate government should have a clear 7 days’ time after the conclusion of the conciliation proceedings to make up its mind as to the further steps it should take. It is, therefore, necessary that the beginning of the seven days’ time should be fixed so that there would be certainty as to when the seven days’ time would expire. It is, therefore, provided in Section 20 (2) (b) that the proceedings shall be deemed to have concluded, where no settlement is arrived at, when the report is actually received by the appropriate governments.’ (iii)

Pendency of proceedings before a board of conciliation (a) The commencement of proceedings. The proceeding is deemed to have commenced on the date of the order referring the dispute to the board.67 The effect of this provision can be interpreted only with reference to the provisions of Section 5 and Rule 6 of the Industrial Disputes (Central) Rules, 1957. These provisions do not provide sufficient safeguards to the workmen or the employer. What if the employer declares a lockout or the workmen declare a strike between the date of notice under Rule 6 and the date of order referring the dispute to the board of conciliation? (b) The termination of proceedings. Under sub-section (2) of Section 20, conciliation proceedings shall be deemed to have concluded— (i) where a settlement is arrived at, when a memorandum of the settlement is signed by the parties to the dispute (ii) where no settlement is arrived at, …. when the report of the board is published under Section 17 (iii) when a reference is made to a labour court, tribunal or national

tribunal under Section 10

9. Settlement in Conciliation After having discussed the proceedings in conciliation, it is necessary to examine the settlement in conciliation. The settlement in conciliation requires consideration of several aspects such as concept and nature of settlement, form of settlement, publication of settlement, period of operation of settlement, persons on whom settlement is binding and enforceability of settlement. (a) Concept of settlement. Section 2 (p) defines ‘settlement’ to mean: a settlement arrived at in the course of conciliation proceeding and includes a written agreement between the employer and the workmen arrived at otherwise than in the course of conciliation proceeding, where such agreement has been signed by the parties thereto in such manner as may be prescribed and a copy thereof has been sent to an officer authorized in this behalf by the appropriate government and the conciliation officer. An analysis of the aforesaid definition reveals that there are two modes of settlement of industrial disputes: (i) settlement arrived at in the course of conciliation proceedings, i.e., one which is arrived at with the assistance and concurrence of the conciliation officer, who is duty-bound to promote a settlement and to do everything to induce the parties to come to a fair and amicable settlement of the dispute,68 and (ii) a written agreement between employer and workmen arrived at otherwise than in the course of conciliation proceedings.69 It also appears from the above definition that ‘unless an agreement arrived at between the parties is a settlement in its grammatical or ordinary signification, such an arrangement although arrived at in a conciliation proceedings70 will not be a settlement within the meaning of Section 2 (p).’ Further, the expression ‘in the course of conciliation proceedings’ refers to the duration when the conciliation proceedings are pending.71 Moreover, for the validity of this kind of settlement ‘it is essential that the parties thereto should have subscribed to it in the prescribed manner and a copy thereof should have been sent to an officer authorized in this behalf by the appropriate government and the conciliation officer.’72 (b) Nature of settlement. The nature of proceedings before the conciliation officer is not judicial or quasi-judicial but administrative.73 Let us examine the requirements therefor. (i)

Settlement must be ‘in writing’. The Industrial Disputes Act, 1947,

requires the settlement arrived at in the course of conciliation proceedings by the conciliation officer and board of conciliation74 to be ‘in writing’. The purpose is to minimize area of disputes over the contents thereof and to have permanent record in matters affecting labour management relations. (ii) Settlement must be signed by the parties. The Industrial Disputes Act 1947, requires the ‘settlement arrived at in the course of conciliation proceedings by the conciliation officer75 or by the board76 to be signed by the parties to the dispute. Thus, clause (2) of Rule 58 of the Industrial Disputes (Central) Rules provides: The settlement shall be signed by (a) in the case of employer, by the employer himself, or by his authorized agent, or when the employer is an incorporated company or other body corporate, by the agent, manager or other principal officer of the corporation; (b) in case of workmen, by an officer of a trade union of the workmen or by five representatives of the workmen duly authorized in this behalf at a meeting of the workmen held for the purpose. The aforesaid provision raises several problems. First, what if the parties do not sign it? Second, what is the position of an individual workman who is not a member of any union whatsoever and his erstwhile co-workers are not prepared to help him? Third, what is the position of an individual workman who is made a scapegoat by his own union? As to the first, it is significant to note that Sections 12 (3) and 13 (3) make it obligatory upon the conciliation officer and the board of conciliation to submit the report with a ‘memorandum of the settlement signed by the parties to the dispute’. The second and third problems are not easy to answer. It would be observed that Rule 59(2) (b) does not at all recognize an individual workman. This is all the more so in view of the fact that his erstwhile co-workers are not prepared to help him. Under the circumstances, he will be helpless, and will be bound by the settlement arrived at by the union. This view is fortified by the provisions of Section 18. (c) Settlement must be in the prescribed form. Should the settlement be one document signed by both the parties, or can it be gathered from documents which have been separately signed by the parties, e. g., correspondence? Clause (i) of Rule 58 which provides that ‘a settlement arrived at in the

course of conciliation proceedings or otherwise, shall be in form 4’ suggests that the written agreement must be embodied in one document. (d) Publication of the settlement by board of conciliation. Section 17 (1) which deals with the publication of award by the appropriate government, provides: Every report of a board… together with any minute of dissent recorded therewith …. shall, within a period of thirty days from the date of its receipt by the appropriate government, be published in such manner as the appropriate government thinks fit. The aforesaid provision raises several issues: the key question is whether the aforesaid provision is mandatory or directory? Second, what will be the effect of withholding the publication of the report? Third, whether the publication of the report after the expiry of statutory period of 30 days will make the settlement invalid or unenforceable? Fourth, whether the report will be taken to have been published on the date of the government’s notification or the date on which such notification appeared in the gazette? (e) Settlement must be fair, just and bonafide. The apex Court in K C P Ltd. v. The Presiding Officer,77 held that a court or tribunal must satisfy itself that a settlement was not ex facie unfair, unjust or mala fide. (f) Period of operation of settlement. (i) Commencement. Sub-section (1) of Section 19 provides: A settlement shall come into operation on such date as is agreed upon by the parties to the dispute and if no date is agreed upon, on the date on which the memorandum of settlement is signed by the parties to the dispute. Thus, the settlement shall come into operation on the date agreed upon by the parties or, if none, the date on which the memorandum of settlement is signed by them. (ii) Termination. Sub-section (2) of Section 19 provides for other terminus of the settlement. Such settlement shall be binding for such period as is agreed upon by the parties, and if no such period is agreed upon, for a period of six months from the date on which the memorandum of settlement is signed by the parties to the dispute, and shall

continue to be binding on the parties after the expiry of the period aforesaid, until the expiry of two months from the date on which a notice in writing of an intention to terminate the settlement is given by one of the parties to the other party or parties to the settlement. The object of the provision under sub-sections 1 and 2 of Section 19 is to ensure that once a settlement is arrived at, there prevails peace, accord and cordiality between the parties during the period agreed upon and if the settlement does not require to be altered for some reason or the other, the same climate prevails by extension of the settlement by operation of law. Section 19 is not dead and freezing (in) all manner… There is an option given to either party to terminate the settlement by a written intimation after the expiry of two months from the date of such notice. This is in accord with the policy of settlement of industrial disputes which is the principal object underlying the provisions of the Act.78 Section 19 (2) has given rise to a controversy whether a settlement made for a specified period expires by efflux of the said period. Answering the question, the Supreme Court in Shukla Manseta Industries Pvt. Ltd v. The Workmen79 observed: To avoid uncertainty and speculation, Section 19 prescribes a terminus ad quo and a terminus ad quem. If in a settlement there is no time limit agreed upon between the parties, the period of operation is a space of six months from the date of signing the settlement and will also last until the expiry of two months from the date of receipt of the notice of termination of settlement. If the period is fixed, it commences from the date as specified in the settlement and will theoretically end as agreed upon but shall continue to operate under the law until the expiry of the requisite period of two months by a clear written notice.80 Jaypore Sugar Company Ltd v. Their Employees81 decided the other issue, namely, when a settlement would terminate if no period was agreed upon? Here, settlement was reached between the management and workers in the course of conciliation proceedings. It stated that the workers’ union gave an undertaking that there ‘shall be no strike till the end of the next crushing season.’ No period was, however, agreed upon for such settlement and no notice was given to terminate such settlement. The labour appellate tribunal observed:

Under Section 19 (2) of the Industrial Disputes Act, this will be binding for a period of six months and also shall continue to be binding for a further period of two months after notice to terminate it. In this case, we find that no such notice to terminate this settlement was given by either party and the settlement is still in force.82 The Supreme Court in South Indian Bank Ltd v. Chako83 held that binding ‘nature of award’ and ‘operation of award’ are two different expressions. The notice under Section 19 (2) must be given by a party representing the majority of persons bound by the settlement.84 Further, such a notice can be inferred from correspondence between the parties. In Cochin State Power Light Corporation Ltd v. Its Workmen85, the employer and the employees arrived at a settlement on 25 November 1954, which was to remain in force upto 30 September 1959. The employer contended that the settlement was never terminated by notice in writing, so it continued to be in force when the reference was made. Hence, the tribunal had no jurisdiction to adjudicate the dispute. The workmen had presented a charter of demands on 14 October 1959 in which there was a reference to the settlement and it was stated therein that the union had on 18 October 1959 resolved to terminate the existing settlement. It was contended that this did not put an end to the settlement as required by Section 19 (2) of the Act because there was no reference to the termination of settlement by the charter. While rejecting the contention, Justice Wanchoo observed: There is, however, no form prescribed for terminating settlement under Section 19 (2) of the Act and all that has to be seen is whether the provisions of Section 19 (2) are complied with in substance and a notice is given as required thereunder.86 The Court rejected the employer’s contention and held that as there was a reference under the charter of demands to a resolution in which specific statement that the settlement was being terminated thereby was made, it was sufficient notice as required under Section 19 (2) of the Act. The above view was approved by the Supreme Court in Indian Link Chain Manufacturers Ltd v. Their Workmen.87 But at the same time, the Court warned: It is true that though a written notice can be spelled out of the correspondence, there must be some certainty regarding the date

or which such a written notice can be construed to have been given because a settlement notwithstanding such notice continues to be in force for a period of two months from that date.88 The lacuna in the law on this point is that unlike the provisions for termination of operation of award under Section 19 (3), the Act does not expressly provide for termination of the operation of a settlement. It is, therefore, suggested that the Parliament should make an express provision in the Act for the termination of operation of settlement. In Management of Karnataka State Road Transport Corporation v. KSRTC Staff and Workers Federation89, a settlement was arrived at between the Karnataka State Road Transport Corporation (KSRTC) and union federation of KSRTC emerging as sole bargaining agent on 28 July 1988. The payroll check-off facility was made available to the union as per the settlement. The settlement was to last till recognition of federation or until both parties terminate it by mutual consent. On 10 May 1993, a memorandum of understanding was reached subject to the approval of board of directors and state government. On 21 September 1999, the Karnataka State Road Transport Corporation by notification withdrew the responsibility of collection of donation or monthly subscription called payroll check-off facility. On these facts, a question arose whether (i) there was sufficient notice and (ii) the settlement was legally terminated. The Supreme Court answered the question in the negative and held that the government orders and consequential notification withdrawing payroll check-off facility was illegal and ultra-vires of Section 19 (1) of the ID Act. The agreement of 1988 continued to be binding on parties and KSRTC could not act unilaterally. (g) Persons on whom settlement is binding. The Industrial Disputes Act, 1947 draws a distinction between a settlement arrived at by agreement between the parties and settlement arrived at in the course of conciliation proceedings. Whereas the first category of settlement ‘shall be binding only on the parties to the agreement’90, the second one is binding not only on ‘all parties to the industrial dispute’ but also on: (a) all other parties summoned to appear in the proceedings as parties to the dispute unless the board, arbitrator, labour court, tribunal or national tribunal as the case may be, records the opinion that they were so summoned without proper clause; (b) where a party referred to in clause (a) or clause (b) is an employer,

his heirs, successors or assignees in respect of the establishment to which the dispute relates; (c) where a party referred to in clause (a) or clause (b) is composed of workmen, all persons who were employed in the establishment or part of the establishment, as the case may be, to which the dispute relates on the date of the dispute and all persons who subsequently become employed in that establishment or part.91 It is evident from above that the settlement arrived at in the course of conciliation proceedings shall be binding on all categories of persons mentioned above. In extending the operation of such a settlement beyond the parties thereto, Section 18 (3) of the Industrial Disputes Act makes a departure from the ordinary law of contract which leads towards collective bargaining.92 The object of this section is to promote industrial peace and harmony between the parties. It is with this object that wide coverage has been given to Section 18 (3) and this can possibly be done when settlement would bind all the parties. In Virudhachalam P v. Mgmt of Lotus Mills93, the Supreme Court ruled that once a written settlement is arrived at during the conciliation proceedings, such settlement under Section 12 (3) has a binding effect not only on the signatories to the settlement but also on all parties to the industrial dispute which would cover the entire body of workmen, not only existing workmen but also future workmen. Such a settlement has the same legal effect as an award of labour court, tribunal or national tribunal or an arbitration award. They all stand on par. It is easy to visualize that settlement contemplated by Section 12(3) necessarily means a written settlement which would be based on a written agreement where signatories to such settlement sign the agreement. Therefore, settlement under Section 12(3) during conciliation proceedings and all other settlements contemplated by Section 2(p) outside conciliation proceedings must be based on written agreements. Written agreements would become settlements contemplated by Section 2(p) read with Section 12(3) of the Act when arrived at during conciliation proceedings or even outside conciliation proceedings. Thus, written agreements would become settlements after relevant procedural provisions for arriving at such settlements are followed. Thus, all settlements necessarily are based on written agreements between the parties. The scope of Section 18 (3) (d) has been the subject-matter of judicial interpretation in a series of cases decided by the high courts and the Supreme Court. The debatable issue has been whether settlement with one or more concerned union in a conciliation proceeding would bind all other workmen of unions of establishment who were not made parties to the settlement. This issue

was raised in Ramnagar Cane and Sugar Co. Ltd v. Jatin Chakravarty.94 In this case, Ramnagar Cane and Sugar Co. Ltd, a public utility concern, carried on the business of manufacturing sugar. The management employed 545 permanent and 703 seasonal workers (excluding casual labourers). Majority of these workmen belonged to the Ramnagar Cane Sugar Co. Employees’ Union (hereinafter referred to as the workers’ union). On 9 December 1953, the workers’ union submitted a charter of demands to the management. On 20 January 1954, a similar charter of demands was also submitted by the employees’ union to the management. On the same day, the workers’ union gave a strike notice to the management. On 1 February 1954, the conciliation officer started conciliation proceedings which were attended by the employees’ union and the management. Workers’ union, apparently did not attend the meeting even though a notice was served upon the said union. On 2 February 1954, the management suggested to the conciliation officer to discuss the disputed matter with the representatives of two unions separately. The workers’ union objected to this suggestion and informed the conciliation officer that it assumed that the conciliation has failed. Consequently, on 2 February 1954, the conciliation officer sent his report about the failure of conciliation with workers’ union. On 25 February 1954, the management and employees’ union, arrived at a settlement, which was recorded in a form of memorandum of settlement signed by them. Meanwhile on 13 February 1954, the workers’ union went on strike which was alleged to be in contravention of the provisions of the Industrial Disputes Act. Accordingly, the members of the workers’ union were prosecuted. Here, we are concerned with a limited issue, namely, whether workers belonging to the worker's union were bound by the settlement arrived at between the workers-members of employees’ union and the management. Answering the question in the affirmative, Justice Gajendragadkar observed: In order to bind the workmen it is not necessary to show that the said workmen belong to the union which was a party to the dispute before conciliator….. [Thus] if a conciliation proceeding is pending between one union and the employer and it relates to matters concerning all the employees of the employer, the pendency of the said conciliation proceeding would be a bar against all the employees of the employer employed in a public utility service to go on a strike during the pendency of the proceeding under Section 22 (1) (d). In our opinion, this construction would be consistent with the specific provisions as to the effect of conciliation settlements prescribed by Section 18

(3) (d) and is harmonious with the general policy of the Act; otherwise, it would unnecessarily disturb industrial peace, if one union employed in a public utility service is allowed to go on strike even though demands common to the members of the said union as well as the rest of the workmen are being considered in conciliation proceedings between the said employer and his other employees represented by another union. The Court accordingly held that the settlement arrived at between the management and the employees’ union in the course of conciliation proceedings on 25 February 1954 was binding not only upon the members of the said employees’ union but on all the four categories of persons bound by such settlement as are specified in sub-section (3) of Section 18 including workmen employed by the management at that time. The aforesaid view was reiterated in Tata Chemical Ltd v. Workmen.95 In G M Security Paper Mills v. R S Sharma96, the Supreme Court once again laid down the scope and objective of Section 18 (3) of the Act in the following words: Even though a conciliation officer is not competent to adjudicate upon the dispute between the management and its workmen, he is expected to assist them to arrive at a fair and just settlement. He has to play the role of an advisor and friend of both the parties and should see that neither party takes undue advantage of the situation. Any settlement arrived at should be a just and fair one. It is on account of this special feature of the settlement, sub-section (3) of Section 18 of the Industrial Disputes Act, 1947 provides that a settlement arrived at in the course of conciliation proceeding under that Act shall be binding on (i) all parties to the industrial dispute (ii) where a party referred to in clause (i) is an employer, his heirs, successors or assignees in respect of the establishment to which the dispute relates and (iii) where a party referred to in clause (i) is comprised of workmen, all persons who were employed in the establishment or part of the establishment as the case may be to which the dispute relates on the date of the dispute and all persons who subsequently become employed in that establishment or part. Law thus attaches importance and sanctity to a settlement arrived at in the course of a conciliation proceeding since it carries a

presumption that it is just and fair and makes it binding on all the parties as well as the other workmen in the establishment or the part of it to which it relates as stated above. But in the case of a settlement not arrived at in the course of the conciliation proceeding, it has to be in writing and signed by the parties in the prescribed manner and a copy thereof should be sent to the officer authorized by the appropriate government in this behalf and to the conciliation officer. Such a settlement arrived at by agreement between the employer and workmen otherwise than in the course of conciliation proceeding is binding only on the parties to the agreement as provided in Section 18 (1) of the Industrial Disputes Act, 1947. Such a settlement is not binding on the other workmen who are not parties to the settlement. From the above, it is evident that a settlement arrived at in the course of conciliation proceeding shall be valid and binding on all the present and future employees of the establishment but not to past or retired workmen.97 It is not necessary that if there are several unions in the establishment, all the unions must be represented. It is enough if one of such unions enters into a settlement with the management in the course of conciliation proceedings.98 The decision is, however, open to criticism. Assume that there are 4,000 workers employed in an establishment. Out of these 4,000 workers, 2,000 workers belong to Union A, 1,800 workers belong to Union B and 200 workers belong to a Union C (management sponsored union). Assume further that in an industrial dispute between labour and management, Union C arrived at a settlement with the management in the course of conciliation proceedings. According to the Supreme Court, the settlement entered into between the management and Union C representing 200 workers shall be binding on the other two unions representing 3,800 workers. Is it desirable in the interest of industrial peace and harmony that such a settlement should bind all the workmen? It is highly doubtful if the fate of 3,800 workers should be allowed to be determined by a management-sponsored union having only 200 workmen as its members. In Praga Tools Ltd v. Praga Tools Mazdoor Sabha99, the Court extended the aforesaid principle in cases where the conciliation officer arrived at a settlement between the workmen and management after the submission of the failure report. In this case, the issue was whether a settlement brought about after the submission of failure report by the conciliation officer binds all workmen including the workmen of the union which was not represented in a conciliation

proceedings. The High Court answered the question in the affirmative and held that such a settlement was binding on all the workmen including the workmen of a union who did not join the conciliation proceedings. Be that as it may, the aforesaid view encouraged the minority union. This has invited the attention of the Supreme Court in Herbert Sons Ltd v. Workman,100 wherein the court ruled that a settlement arrived at with a majority union precludes a minority union from raising dispute on the same subject-matter thereby making such settlement binding even on members of the minority unions. However, if there is a dispute that the settlement is not bona fide in nature or that it has been arrived at on account of fraud, misrepresentation or concealment of facts or even corruption and other inducements, it can be the subject-matter of an industrial dispute which an appropriate government may refer for adjudication after examining the allegation prima facie. The appropriate government must satisfy itself prima facie whether the allegation needs to be adjudicated, more so when there is a settlement which is reached with the help of the conciliation officer in which case, there is a basic assumption that the settlement must be fair and reasonable. A settlement which is sought to be assailed has to be scanned and scrutinized. In National Engineering Industries v. State of Rajasthan101, showing its concern about the above issue, the Supreme Court observed that every trade union registered under the Trade Unions Act, 1926 having a few members, if allowed to raise industrial disputes for reference, will defeat the very purpose of a settlement. That is why it is only a representative union which has been given the right to raise an industrial dispute. Under the Voluntary Code of Discipline and also under various state laws there can be, at a given point of time, only one representative union. Under the Rajasthan Act, a representative union means a union for the time being registered as a representative union under the said Act. Although, representative union is not defined in the Act but in common parlance, it means the union which has been registered as the majority union and thus entitled to represent all the workers and thereby precluding the minority union from raising an industrial dispute on the same subject-matter. Further, it is the representative union which alone can give notice under Section 19(2) of the ID Act terminating the settlement. Any notice given by a union which does not represent the majority of the persons bound by the settlement or which is not a representative union is illegal. The Court further held that merely because a settlement in the course of conciliation proceedings was arrived at between the majority union and the management on a holiday, it cannot render such a settlement invalid. There is no bar in having conciliation proceedings under the Act on a holiday. To arrive at a settlement, a holiday atmosphere is more relaxed

and more congenial. It may be noted that the Second National Commission on Labour has recommended that a union, which does not have at least 10 per cent membership amongst the employees in an establishment, should have no locus standi in that establishment. The Supreme Court in I T C Ltd. Workers’ Welfare Association v. Management of I T C Ltd102 decided five important issues connected with the settlement arrived at in the course of concilation proceedings namely, (i) Is it open to the industrial tribunal to ignore the settlement? (ii) What is the effect of a settlement arrived at in the course of conciliation proceedings? (iii) What presumption can be drawn if a settlement is arrived at in the conciliation proceedings? (iv) What weight should be attached to a settlement arrived at in the course of conciliation proceedings? and (v) Can the validity of the settlement arrived at in the course of conciliation proceeding be tested on the touchstone of Article 14 of the Constitution? As to the first issue, the Supreme Court held that the industrial adjudicator has to keep in the forefront of his mind the settlement reached under Section 18(3) of the Act. Once it is found that the terms of the settlement operate in respect of the dispute raised before it, it is not open to the industrial tribunal to ignore the settlement or even belittle its effect by applying its mind independent of the settlement unless the settlement is found to be contrary to the mandatory provisions of the Act or unless there is non-conformity with the norms by which the settlement could be subjected to limited judicial scrutiny. Regarding the second issue, the Court held that a settlement arrived at in the course of conciliation proceedings with a recognized majority union has extended application as it will be binding on all workmen of the establishment, even those who belong to the minority union which had objected to the same. To this extent, it departs from the ordinary law of contract. The object obviously is to uphold the sanctity of settlements reached with the active assistance of the conciliation officer and to discourage an individual employee or a minority union from scuttling the settlement. Coming to the third issue, the Court observed that the settlement arrived at in the course of conciliation proceedings carries a presumption that it is just and fair. An unjust, unfair or mala fide settlement militates against the spirit and basic postulates of the agreement reached as a result of conciliation and, therefore, such settlement will not be given effect to while deciding an industrial dispute. Of course, the issue has to be examined keeping in view the presumption that is attached to the settlement under Section 12(3). As to the fourth issue, the Court said that a settlement which is a product

of collective bargaining is to be given due weight and consideration, more so when a settlement is arrived at in the course of conciliation proceeding. The settlement can only be ignored in exceptional circumstances, viz., if it is demonstrably unjust, unfair or the result of mala fides such as corrupt motives on the part of those who were instrumental in effecting the settlement. Keeping that apart, the settlement has to be judged as a whole, taking an overall view. As regards the last issue, the Court held that there may be some facets which apply in common to determine the crucial issue whether the settlement on the whole is just and fair but that is not to say that the settlement is liable to be tested on the touchstone of Article 14 of the Constitution.

IV. COURT OF INQUIRY A. Constitution A procedure similar to the constitution of a board of conciliation is provided for bringing into existence a court of inquiry as well. While a board of conciliation may be constituted for promoting the settlement of an industrial dispute; the purpose for which a court of inquiry may be constituted is ‘for enquiring into any matter appearing to be connected with or relevant to an industrial dispute.’103 The idea of a court of inquiry is borrowed from the British Industrial Courts Act, 1919. This Act enables the minister on his own motion and irrespective of the consent of the parties to a dispute, to set up a court of inquiry to enquire into the report on the causes and circumstances of any trade dispute, together with such recommendations as the court may make for the resolution of the dispute. Perhaps because of the extended field of operation of the court of inquiry, the legislature thought it fit to allow the parties to use instruments of economic coercion during pendency of proceeding before it.

B. Jurisdiction of the Court of Inquiry The Act empowers the appropriate government to constitute a court of inquiry to inquire into any matter appearing to be connected with or relevant to an industrial dispute.104 The court of inquiry consists of one or more independent persons at the discretion of the appropriate government. Where a court consists of two or more members, one of them shall be appointed as a chairman.105 The court having the prescribed quorum, may act notwithstanding the absence of the chairman or any of its members or any vacancy in its number. However, if the

appropriate government notifies that the services of the chairman have ceased to be available, the court shall not act until a new chairman has been appointed.106 Court can inquire into matters ‘connected with or relevant to an industrial dispute’ but not into the industrial dispute.

C. Duties of the Court It is the duty of the court of inquiry to inquire into matters referred to it and submit its report to the appropriate government, ordinarily within 6 months from the commencement of its inquiry.107 This period is, however, not mandatory and the report even after the said period would not be invalid.

D. Publication of the Report The Act requires that the report of appropriate government shall be published within 30 days of its receipt.

V. VOLUNTARY ARBITRATION Voluntary arbitration is one of the effective modes of settlement of an industrial dispute; it supplements collective bargaining. When negotiation fails, arbitration may prove to be a satisfactory and most enlightened method or resolving an industrial dispute. It provides ‘a new focus for set-up animosities.’ It has been found that in ‘many arbitration cases, in which the parties start out by being angry at each other, they end up being less so. The winning party is satisfied, and the losing party is likely to feel aggrieved, not at the other party, but at the arbitrator.’108 Further, informal arbitration offers an opportunity to dissipate hard feelings which the industrial dispute may have aroused.109 It is important because it is (i) expected to take into consideration the realities of the situation; (ii) expected to meet the aspiration of the parties: (iii) based on voluntarism; (iv) does not compromise the fundamental position of the parties and (v) expected to promote mutual trust.110 However, it is unfortunate that despite government’s stated policy to encourage collective bargaining and voluntary arbitration, India adopted only compulsory adjudication system ever since independence and did not give legal sanctity to voluntary arbitration till 1956. The severe criticism111 of conciliation and adjudication led to the introduction of Section 10 A relating to voluntary arbitration through the Industrial Disputes (Amendment) Act, 1956. The 1956 Amendment to some

extent has tried to give legal force to voluntary arbitration but still it stands on a lower footing than adjudication as it permits the parties to adopt recourse to arbitration prior to reference to adjudication. Further, 1956-Amendment also did not place an arbitrator on the same footing as that of adjudicators. The 1964 Amendment did try to bridge the gap but still the disparity lies in several respects.

VI. PROCESSES INVOLVED IN REFERENCE OF DISPUTE TO VOLUNTARY LABOUR ARBITRATOR A. Choice of Dispute Settlement Section 1

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