MODULE 2: INDUSTRIAL DISPUTES

Objective of the Industrial Dispute Act, 1947.

• To make provision for investigation and settlement of industrial disputes and for certain other purposes.

• To maintain industrial peace and harmony by providing mechanisms for the resolution of conflicts between employers and

employees.

• Legal framework for settling disagreements.

• Definition and scope of industrial disputes.

• Processes established for conciliation and arbitration.

Industry

• Section 2 (j) Industrial Dispute Act, 1947

• Section 2 (p) of the Industrial Relations Code, 2020.

• Before the 1982 Amendment, section 2 (j) of the Industrial Dispute Act 1947 defined industry as, ‘any business, trade,
undertaking, manufacture or calling of employers and includes any calling, service, employment, handicraft or industrial
occupation or avocation of workmen.

• This definition received very different interpretations at different times by the SC-wide interpretation in the Hospital
Mazdoor Sabha Case, the narrow interpretation in the Safdarjung Hospital Case, and widest in Bangalore Water Supply.

Essentials of Industry Definition

• The definition of industry under 2(j) can be divided into two parts:

• 1st part: it means any business, trade, undertaking, manufacture, calling of employers • 2nd part: it provides that it includes any

calling, service, employment, handicraft or industrial occupation or avocation of workmen.

o Undertaking: anything undertaken , any business, work or project which one engages in or attempts, an enterprise’.

o Trade: any business carried with the view to profit whether manual or mercantile as distinguished from liberal arts or learned
professions and from agriculture.

o Business: wider term, anything which is an occupation as distinguished from a pleasure

o Calling of Employees: one’s usual occupation , vocation , business or trade’.

• Words used in the definition are of wide import.

• All these words are qualified by the phrase ‘carried on with the cooperation of employer and employee’ to make it an

industry.
• While other terms qualify the phrase quite conveniently, most trouble arise in case of an ‘undertaking’.

o A general understanding reached for the interpretation of undertaking is that it includes nonprofit undertakings as well in
case there are no private undertakings. --- in case of any work this would apply so far as the work can be regarded as analogous
to the carrying on of a trade or business.

Analogous to Trade or Business:

1. State of Bombay v. Hospital Mazdoor Sabha

Held:

• It stated that analogous to trade, the activity is systematically or habitually undertaken for the production or distribution
of goods for rendering material services to the community at large or part of such community, with the help of employees- but
does not require profit motive or investment.

• Such an activity generally requires the cooperation of employer and employees. Its object is satisfaction of human needs.

• Must be organized or arranged in manner of trade or business and must not be casual. • Does not necessarily to be run by

private individuals.

• Hence, by this test a hospital which is run by government is an industry, however, domestic, personal, or casual services

are not included.

• Satisfies test of ‘analogous to trade or business’

2. Safdarjung Hospital Delhi v. Kuldip Singh,

• In this case SC held that all three institutions namely, Safdarjung Hospital, Tuberculosis Hospital and Kurji Family Hospital

were not industries.

• In the first case the court said that place of treatment of patients, runs as department of govt is not industry.

• In the second case the court said that it was wholly charitable and not industry also it was institute of research and training

and was held to be not industry. • In the third case the court said that it was all the above factors plus not for profit. • Argued

that Professional Skill requires intellectual skill coupled with manual skill in the production or sale of commodities or in an
arrangement for their production or sale of commodities.

• Hence, overruled Hospital Mazdoor Sabha case.

3. Bangalore Water Supply and Sewerage Board v. A.S. Rajappa

• 7 judge-bench of SC considered the scope of industry, overruled Safdarjung and rehabilitated Hospital Mazdoor.
• This case expanded the definition of "industry" to encompass nearly all establishments engaging in systematic activities
involving employer-employee cooperation, aimed at producing and distributing goods and services to satisfy human needs and
desires, while excluding some sovereign functions. This broad definition includes traditional commercial businesses, as well as
charitable organizations, educational institutions, cooperatives, and similar enterprises that engage in economic activities with
employer-employee interactions.

Held:

• Laid down the TRIPLE TEST.

o Continuous and Systematic Organized Activity: Facilitated by cooperation between the employer and employees
(workmen).

o Organized by cooperation b/w employer and employees: The employer-employee interaction is key to this definition,
irrespective of the nature of the activity or its profit motive.

o For the production of good and services calculated to satisfy the human wants and wishes: only then – there is prima
facie industry.

• Function/ Decisive test based on nature of Activity: DOMINANT NATURE TEST: o Where a complex of activities where
some qualify as exemptions and others are not and involve employees on the total undertaking, some of whom are not workmen
like (teachers in the University of Delhi Case), then the predominant nature of the services and integrated nature of the
department will be the true test. Hence, the whole undertaking shall be industry, though such workmen shall not benefit here.
o This test examines organizations with diverse activities, determining whether some fall under 'industry' per Section 2(j) of
the Industrial Disputes Act, 1947. If a department's primary function qualifies as 'industry,' it is deemed an industry.
Government sovereign functions are exempt, but government departments performing industrial activities may be classified as
industries (severability). Despite government authority, daily operations are often managed by private entities. o Sovereign
functions will be exempted, but not the ones which are welfare functions or economic adventures undertaken by the
government or statutory bodies. o Even in departments discharging sovereign functions if there are units which are industry
and can be severed substantially, will be industry under 2(j).

• DECISIVE PRINCIPLES FOR IDENTIFYING ‘INDUSTRY’ u/ THE ID ACT o Where (i) systematic activity, (ii)
organized by co-operation between employer and employees, (iii) for the production and/or distribution of goods and services
calculated to satisfy human wants and wishes prima facie, there is an ‘industry’ in that enterprise. o Industry does not include
spiritual or religious services geared to celestial bliss like making large scale parasad.

o Absence of profit motive or gainful objective is irrelevant be the venture in the public joint, private or other sector.

o If the organisation is a trade or business, it does not cease to be one because of philanthropy animating the undertaking.

o True test is functional and decisive test with special emphasis on employer-employee relationship.

o If organization is trade or business, it does not cease to be one because of it being an undertaking –however the word
undertaking must suffer a contextual and associational shrinkage.

o This means that all organized activity possessing the triple elements, although not trade or business may still be industry
provided employer employee basis bears resemblance to what we find in trade or business.

As a consequence:

o All professions, clubs, educational institutions, co-operatives, research institutions, charitable projects and other kindred
adventures when they fulfill the triple test cannot be exempted from the scope of industry under section 2(j).

• If in pious or charitable missions, such as lawyers in free legal aid or doctors serving in spare hours, working at the bidding of
holiness, free at nominal cost, nor engaged for remuneration will not satisfy the master-servant test or ‘engaged for cooperation
between employer and employee’, so not industry. Even If he hires some manual or technical help. (Dominant nature test).

4. Physical Research Laboratory v. K.G. Sharma

Facts:

• K.G. Sharma was appointed as a Scientific Glass Blower by the Physical Research Laboratory (PRL) in 1948.

• Sharma was made to retire at the age of 58.

• Challenging his retirement as he expected to retire at 60, a complaint was filed with the Labour Commissioner, leading to a

reference to the Labour Court in Ahmedabad. • PRL claimed its research was not aimed at commercialization or satisfying
human wants and needs directly, but for educational and knowledge acquisition purposes.

Issue:

• Whether the activities performed by the Physical Research Laboratory can be classified as an 'industry' under Section 2(j) of
the Industrial Disputes Act.

Held:

• The Court examined PRL's work and found it systematic and involving employer-employee cooperation but not aligned with
typical trade or business activities.

• The Court distinguished between commercial undertakings and institutions like PRL engaged in non-commercial
activities despite structured and cooperative work.

• The court’s interpretation of BWS into this case was completely wrong – they went into the motive behind the research
institution – the court held that it couldn’t be an industry as the information was not intended for sale.

o The court in BWS clearly stated that the motive is irrelevant – the fact that it could contribute or has the potential to
contribute to the industries and the wealth of the nation meant that – Research institutions fall within the definition of

“industry”. • However, this court held –

o The research institute was engaged in pure research – published very few papers. o The knowledge acquired was never
intended for sale but to just acquire knowledge about the universe.

o There is no production, supply or distribution of material goods and services. o No material acquired was of any commercial
value.

o The research was only for the department of space.

o Not analogous to business or trade as it is not producing goods or services. o Thus, the research institute is not an
“industry”.

• Poor interpretation of BWS

5. General Manager Telecom v. A Srinivasa Rao

Issue:

• Whether the Telecom Department of the Union of India qualifies as an ‘industry’ under Section 2(j) of the Industrial Disputes
Act, 1947.

Held:

• The dominant nature test allowed commercial activities, not involved in sovereign functions, to be classified as 'industry'.

• The correct application of the Bangalore Water Supply case clarified that the Telecom Department, being commercial in
nature and not engaged in sovereign functions, fits the definition of an industry under Section 2(j) of the Industrial Disputes
Act.

• The amendment to the definition of “industry” in 1982 was brought up – however, the court laid down that until it is notified –
the BWS definition of "industry” would be followed.

• Following the Bangalore Water Supply “dominant nature test” –

o Where a complex of activities, some of which could be exempted, others not, the whole undertaking would still be an
“industry” although those who are not “workmen” will not benefit from the Act.

o Strictly sovereign functions qualify for exemption, not the welfare activities or economic activities undertaken by govt or
statutory bodies.

o Even in depts discharging sovereign functions, if there are units which are industries and they are substantially severable,
then they can be considered.

o Constitution and legislature can remove from the purview of the Act, those activities which are within the scope.

•The SC concluded that the Telecom Department of the Union of India is considered an 'industry' within the meaning of
Section 2(j) of the ID Act.

6. All India Radio v. Santosh Kumar

FACTS:

• The respondent employees worked at All India Radio or Doordarshan Kendras. • They challenged their termination orders or
non-regularization of services, leading to authorities under the Act setting aside the termination orders and granting
regularization with consequential benefits.

ISSUE:

• Whether All India Radio and Doordarshan, engaged in broadcasting activities, can be defined as 'industries' under the Act,
especially considering their performance of commercial activities for profit, such as broadcasting advertisements and serials for
fees. Held:

• The Supreme Court ruled that All India Radio and Doordarshan are indeed 'Industries' under the Act's definition.
• The court affirms BWS case and General Manager Telecom case

• The court brings in the “DOMINANT NATURE TEST” – AIR and Doordarshan are “economic adventures” – they publish
advertisements everyday – it could also be performed by a private entity – thus, it is not a SOVEREIGN FUNCTION

7. Coir Board, Ernakulam and Cochin v. Indira Devi

Facts:

• Coir Board, established under the Coir Industry Act, 1953, aimed at developing the Coir Industry and promoting exports.

• Involved in various activities like collecting statistics, research, setting quality standards, licensing, and marketing through
showrooms and sales depots.

• Temporary clerks and typists employed by the Coir Board were discharged, claiming their terminations should adhere to the
Industrial Disputes Act, 1947.

Issue:

• Whether the Coir Board falls under the ambit of 'industry' as per the definition in Section 2(j) of the Industrial Disputes Act,
1947.

Held:

• Reference made to cases like BWS case, which broadly interpreted "industry" to include organized activities involving

employers and employees in producing goods or services. • The Supreme Court concluded that based on the Coir Board's
primary objective of aiding the coir industry, it shouldn't be considered an 'industry'.

• Critique of the BWS case –

o The elimination of profit motive as a relevant factor has hurt many philanthropic and charitable institutions

o Charitable hospitals and small philanthropic institutions are shutting down o The welfare of the community has been
compromised

o 1982 amendment of “industry” (This has not come into force) – The Statement of Object and Reasons of the amendment
clearly state that the BWS case has given a wide interpretation of “industry” that needs to be changed to not include research
institutes, hospitals and philanthropic institutions – however, as it was not notified – the BWS case had to be followed.

• The predominant purpose of the Board was promoting the Coir industry – which is not usually considered an industry

• However, as the BWS case stated that any institution that satisfies the triple test = analogous to a trade or business =

“industry” = Coir Board is an “industry” • Justice Sujata calls for re-examination of the BWS CASE – this reference was
dismissed.

8. Agricultural Produce Market Committee v. Ashok Harikuni

Facts:
• The Agricultural Produce Market Committee – was established through a state statute – passed by the Karnataka Legislative

assembly.

• Object of Petitioner to regulate the marketing of agricultural produce for the benefit of agriculturist.

• Committee has no power to appoint or regularise 🡪 can only create temporary posts 🡪 no intention to make any profit and the
whole object is to only regulate the agriculture interest of public at large.

Appellant’s Contended: Committee was not an industry

• They were performing sovereign functions

• They also had members who were civil servants or government servants • The state act had a provision that the ID Act would

not apply

• There is no profit motive

Held:

• Services under statutory bodies is not excluded 🡪 if desire to exclude, it must be express in nature.

• Sovereign functions can also include welfare activities of the state which come within the purview of industry. Not all
functions of the government are sovereign functions – affirmed BWS case – they can be divided into two categories –
inalienable and welfare – the distinction is that welfare functions are those that can be performed by private parties too.

• Distinction b/w sovereign and non-sovereign functions depends on the nature of the power and the manner of its exercise.
One of the tests for nature of work could be if the State is answerable for such action in courts of law.

• Court then looks into the statement and objects of the said Act.

• Many functionaries are creatures of the statute but does not mean status of performing inalienable functions of the state can be

conferred.

• Correct test to apply is the dominant purpose test.

o The mere fact that some of the appellants are government servants is of no consequence – the “dominant nature test”
established in BWS clearly states that even if certain departments or workers do not fall under the definition of “industry”
– as long as the predominant nature of activities are analogous to that of a trade or business (this requires satisfying the
triple test)– it would be an “industry”

• Most of the functions can be taken up by private body, so it cannot be sovereign in nature.

9. State of UP v. Jai Bir Singh

Issue:
• Whether the Social Forestry Dept of State, a welfare scheme undertaken for the improvement of the environment would be an

‘industry?’

Held:

• The definition of 'sovereign functions' was debated, emphasizing that welfare activities under the Directive Principles of State

Policy should be considered sovereign functions. • Courts look into the need for legislature to step in and clear the confusion on

the definition of ‘industry.’

• Aim of the statute is to regulate and harmonise the relationships b/w employers and employees for maintaining industrial

peace and social harmony 🡪 interpretation must be done keeping in view the interests of the employer who has put in the

capital and expertise 🡪 the intention is to prevent both the employers and the employees from taking a dominant position 🡪
worker-oriented statutes would be one-sided

• An over expansive interpretation of the term industry might be a deterrent to private enterprises in India where public

employment opportunities are scarce.

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• Whether employees employed in such welfare activities of the Govt require protection apart from the constitutional rights

conferred on them, may be a subject of separate legislation. • The Supreme Court suggested a re-examination of the judicial

interpretation of the definition of 'industry' to ensure it aligns with contemporary industrial landscapes and societal needs.

• The Court emphasized the need for a legal structure responsive to changing societal structures while maintaining the foresight

of the law.

WORKMEN

• Definition of workman u/s 2(s), ID

1. Dharagadhra Chemical Work Ltd v State of Saurashtra

Facts: Chemical company 🡪 outsource the manufacturing of salt required by P for certain chemicals’ manufacturing and

remaining salt sold to outsiders 🡪 this manufacturing done by agarias on a seasonal basis 🡪 they do it with their families or
employee extra labour.

Issue:

Whether the agarias working in the salt works at Kuda in the Rann of Kutch are workmen or independent contractors?

Held:

• The Supreme Court applied the established principle of the Control and Supervision Test for determining an employment

relationship is the existence of the right in the employer to supervise and control the work performed by the employee, not
just in terms of what work is to be done but also the manner it is carried out.
• Nature and extent of control imp to establish employer-employee relationship. • Holds that essential ingredient for workmen is

that he must be employed by an employer creating a ‘master-servant’ relationship. The test to determine this relationship is

an existence of a right of control in respect of the manner in which the work is to be done. • Test to check Control and

Supervision:

o Master’s power of selection of his servants.

o Payment of wages and remuneration.

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o Master’s right to control the method of work.

o Master’s right to suspend and dismiss servant.

• Nature and extent of control varies from industry to industry.

• Court looks into two contentions for the appellants:

o Piece work – rate of fees basis the output. So technically, they are not in charge of the work hours or how much work is to
be employed.

▪ This is irrelevant in considering whether the individual is a workman. o Agarias employ their own labour and pay for it.

▪ Again irrelevant, because how he does this work is not required to understand whether they are workmen.

▪ What is important to determine if the person is a workmen or an independent contractor is whether he has agreed to work
personally or not. If he has, then he is a workman and the fact that he takes assistanve from other persons does not affect his
status.

• Agarias are professional labourers. They give all the output to the chemical company and the company pays for it; you are a
workmen.

2. Diwan Mohideen Sahib v Industrial Tribunal, Madras – 1966- SC Facts:

• Bidi Company (Proprietors) - Contractor- Workers

• Proprietors hand over/ sale of raw materials to the Contractors 🡪 this is handed over to the workers to roll the bidis in the

factories 🡪 delivery by the contractor of the manufactured bidis to the Bidi company 🡪 contactors paid the workers for their
labour at piece rates.

• (Note: P fixed the rates of the raw materials when given to the contractors who after supplying the manufactured bidis,
received the price for the same and gave a part of it to the workers as wages for labour, rest as commission kept by the
contractors.)

• No attendance register maintained by the contractors 🡪 no fixed hours mandated 🡪 not bound to come for work every day.
• The appellants had reduced the wages of these workers who were rolling the bidi leaves. • The proprietors supplied the leaves

and tobacco 🡪 send it to the individual contractors 🡪 the workers would roll.

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Issue: Whether there is an industrial relation between the workers and the proprietors? Appellant’s contentions:

• The workers were working for the individual contractors and did not work for the company. • Sale of the raw materials to the

individual contractors and sale of finished products back to us.

• Absolved of liability as the individual contractors’ liability were the workmen.

Respondent’s contentions:

• Independent agreement b/w the individual contractors and the proprietors o Return the raw materials if the beedis were not

rolled.

o Finished products were not controlled by the individual contractors but could be only sold by the proprietors.

Tribunal’s holding:

• No sale or resale of leaves and tobacco by and b/w P and the contractors since the manufactured bidis could only be given to

P 🡪 all prices fixed by P.

• Appellants claimed no control over the bidi workers but were the suppliers of raw materials, specifications and was under
their control.

• No particular duties discharged by the contractors. They were not independent contractors but mere employees functioning
as managers of the various factories, their remuneration dependent on the work that turned out. You are trying to avoid the
statutory obligations.

• The arrangement is within the ambit of the IDA and the individual contractors are only managers.

• No real independence or autonomy, and therefore, the workers are workmen under the definition.

Single bench reversed the Tribunal’s finding 🡪 HC reversed it again.

Supreme Court:

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• Prima facie test 🡪 the existence of right and you control the manner in which the activity of production is to be done 🡪
nature and extent of the control that you employ is going to differ from industry to industry.

• Contractors were in reality performing the role of intermediaries or agents for the appellants, with the bidi workers essentially
functioning as employees of appellants. • The superficial labels of "contractor" and "independent" were unable to obscure the

underlying employment dynamics dictated by the appellants, leading to the rejection of the appellants' attempt to categorize the
workers as anything but their employees. (like lifting corporate veil).

3. HusaainBhai v Alath Factory Employees Union

Facts:

• P is a factory owner who manufactures ropes 🡪 workmen engaged by contactors who in turn executed agreements with P. 🡪
labourers were doing essential work but not paid fair wages.

Issue:

• Whether the contract labourers are entitled to same wages and working conditions as direct employees.

Held:

• Work done by workers formed an integral part of the industry.

• When workers are hired for doing business for another enterprise, this other enterprise in the employer.

• The intermediate contractors in direct relationship is of no consequence when lifting the veil.

• Raw material supplied by the management, factory premises belonged to the management, finished products also taken by the

management.

• True test in the absence of the direct relationship b/w employee and employer is if the goods and service produced by worker

is going in the possession of the enterprise alone. • Enterprise is the true employer and the veil donned by the ICs and other

third parties must be removed to make sure that the workers get the benefit of the IDA.

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4. SK Verma v Mahesh Chandra

Facts:

• Dismissal from service of SK Mishra from LIC because they said he was not a workman under the IDA.

Issue: Whether development officials in LIC, India are workmen?

Held:

• The words ‘any skilled or unskilled manual, supervisory, technical or clerical work’ are not intended to limit or narrow

the amplitude of the defn.

• It is to include the labour force and exclude the managerial force 🡪 pragmatic approach required.

• One must look into the nature of duties carried on by the development officers, their pay scale, etc and draw the conclusion.
• DOs are full time employees 🡪 no authority --. No major supervisory or disciplinary work 🡪 no administrative control.

Therefore, they are workmen.

5. Miss A Sundarambal v. Govt of Goa – 1988

(Look at the primary duty of the employee to see if they are workmen or not) • An educational institution is an industry but

teachers cannot be called workmen

Facts: wrongful termination of teacher 🡪 goes to court under IDA.

Issue: Whether the teacher employed in a school falls within the definition of “workmen” as per S. 2(s), IDA?

Held:

• While an educational institution was an industry it was possible that some of the employees in that industry might not be
workmen as per the Bangalore Water Supply & Sewerage Board, etc. v. R. Rajappa & others.

• 2(k)- industry dispute r/w 2(j)- industry r/w 2(s)- workmen

• For a person to be a workman u/s 2(s), the following conditions are important: o He should be a person employed in an

industry for hire or reward.

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o He should be engaged in skilled or unskilled manual, supervisory, technical, or clerical work.

o He should not fall within the exemption clauses. (Mentioned in Section 2(s)) • Teacher is not a workman.

o Imparting education – noble vocation. Cannot call it skilled, manual or supervisory work. Designation of employee is not of
value but the nature of their duties is important (May & Baker India ltd. v. their Workmen)

o Even if teachers do some clerical/ administrative work, they are still not considered workmen because these are ancillary to
their main job of teaching.

• Still, principles of natural justice upheld, and teacher given 40k.

• Directing the legislature of Goa to make laws for the same.

6. HR Adhyantaya v. Sandoz (1994)

• 7 judge bench affirmed A Sunderambal.

Facts: P was medical representative 🡪 services were terminated by Company🡪 labour court considered him workman u/ IDA

🡪 company filed appeal where he was held not workman 🡪 later appealed to SC

Issue: Whether a medical representative is a workman?

Contentions by the workmen: They perform duties in the nature of skilled and technical. Held:
• Referred to May and Baker case and Burmah Shell case that person whose main activity is promoting sales is not workman.

• Amended version does bring in supervisory and technical work into the ambit of workmen. However, it has not been

enforced.

• Cannot be held to workmen because cannot be viewed as skilled or technical 🡪 had to be construed ejusdem generis

(like) 🡪 if work by sales rep cannot come within purview of workmen, then even medical reps not under purview.

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7. Workmen of Nilgiri Coop Mkt Society b State of TN

Facts:

• The Mkt society consists of both the farmers and the vegetable merchants. Purpose was to ensure that the small farmers do not

get exploited by the vegetable merchants. • Main jobs carried out in the said premises:

• Unloading the gunny bags containing potatoes from the lorries

• Unpacking the gunny bags and keeping the potatoes in lots inside the godown. • Grading the potatoes into different sorts.

• Weighing auctioned potatoes and packing them into gunny bags brought by the merchants. • Stitching the gunny bags and

loading them into lorries hired by merchants. • (Note: people are doing this work for the people, not employed by the society,

some farmers

do it themselves, whereas some hire extra labour which is paid by them itself, if can’t pay, the society will give them money on
credit)

• Farmers are at liberty to engage their own men for doing this work, some of them do it themselves, no obligation on the

farmer to sell it on the yard.

• Society does not maintain attendance or wage register.

• Third party contractors has the discretion to engage men and no working hours are fixed for them, since the work is

seasonal, they are free to take up any other job.

Issue: Whether these workers are ‘workmen’ as per the defn?

Contentions of the union: Failed to apply the ‘organization test’ in the light of the decisions of this court 🡪 Supervision and

control by society was not on its own behalf but on behalf of its members 🡪Work carried out in the Society premises 🡪 wages
paid by the Society

Contentions of the society:

• Service society- provide platform for sale of produce

• Absence of master-servant relationship.

• Members are both the growers and merchants 🡪 the porters and graders are hired by them independently.

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Held:

• Supervision and control test is not enough as it is different from business to business. • 8 factors to determine employer-

employee:

o Who is the appointing authority (no appointment order from the society) o who is the paymaster (payment made by
merchant or the farmer but not directly by the society)

o Dismissal authority.

o how long the alternate service lasts.

o extent of control and supervision

o nature of job: professional or skilled.

o nature of establishment.

o Right to reject.

• Integration test (for difficult cases) – whether the person was fully integrated into the employer’s concern or remained
apart from and independent of it- this in itself is not a sufficient test.

• “Mutuality of obligations” as a possible factor – whether the course of dealings between the parties demonstrates sufficient
such mutuality for there to be an overall employment relationship.

• Court looks into the objects of the society by stating that if the union claims it’s a trading society, the burden of proof is upon

them to prove the same.

• It’s a service society – with the object of protecting the growers from being exploited at the hands of the traders- no master-

servant relationship or complete control • Court also acknowledged that the dominant role regarding appointment, payment

of wages, supervision, etc, are performed by the third-party contractors and not the society.

8. SK Maini v M/s Carona Sahu Company Ltd.

Facts:

• P was a shop manager 🡪 was terminated 🡪 wrongful termination 🡪 Contention that it should be dismissed as the P was not a

workman because he discharges managerial and administrative functions 🡪 Labour Court held that it was a clerical job, no
domestic inquiry was properly conducted against him and therefore allowed the petition.

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• Appeal before HC 🡪 reversed the LC findings and held that the role was supervisory, administrative and managerial, also
held that objection to enquiry officer appointed never raised by P, therefore could not be a ground that court held to be reason
for allowing the petition.

Petitioner’s contention:

• P’s designation is not the basis to determine but rather the nature of duties 🡪 had no authority to appoint or dismiss the

employees or make any independent decisions 🡪 no authority to take disciplinary action.

Respondent’s contention:

• Although designation cannot be determining factor, it does give a clue about the nature of duties.

• Not necessary that a manager must have the powers to dismiss or suspend employees • Had the power to open, close and run

the said shop 🡪 nobody else in the shop could do any action without P’s approval.

Held:

• The functions of the appellant appear to be administrative and managerial. • He was required to do some clerical work but

majorly discharging administrative duties and managerial work.

• In complicated industrial or commercial organizations, employees have to do more than one kind of work.

• Determinative factor is the main purpose for which they are employed 🡪 if employee predominantly does supervisory work
and incidentally does clerical work, then cannot be deemed workman.

• P had power to make temporary appointments 🡪 upheld HC ruling.

9. Heavy Engineering Corporation v Presiding Officer, Labour Court Issue: Is a doctor working in a hospital a workman

u/s 2(s), IDA?

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Held:

• Relied on Surendra Kumar Shukla v. UOI: here the medical officer had duties to meet other admin requirements and also

responsible for establishment and administration. • He had a male nurse, sweeper, junior doctor, etc under him and was

supervising them. • Court looks into whether the doctor was appointed in a ‘supervisory’ capacity – when the doctor discharges

the duties of attending to the patient and supervises the work of the persons subordinate to him, the only possible conclusion
which can be arrived at is that the respondent cannot be workmen.

10. Workmen of the Canteen of Coates of India Ltd v. Coates of India Ltd.

Facts: workmen employed in a canteen which is run in the premises of the respondent company.
Issue: Are these workmen of the company or the independent contractor of the canteen? Held:

• Court identified determining factors to check workman:

o Master-servant relationship

o When a person is performing various functions which overlap in their characteristics, the nature of main function for which
the claimant is employed should be considered. o Work is either manual, skilled, unskilled, technical, operational , clerical or
supervisory in nature, the ,mere fact that it does not fall into exceptions would not render a person to be workman

o designation, source of employment/contract of service, quantum of wages/pay and mode of payment should not be
considered while determining whether a person can be termed as a workman.

• Contention of the worker is that the Factories Act had a provision wherein an obligation to have canteen 🡪 cannot be a

determinative factor to claims that the employees are workmen. • Undisputed fact that all the relevant factors indicate that the

workmen were employed only by the contractor and not the company.

20

• SC agreed with the view expressed by the HC which has opined that canteen employees were neither directly appointed by
the company nor the company had any supervisory control over them and hence, they could not be treated as workmen
employed by the respondent company.

• Any concern 🡪 the worker would first go to the independent contractor 🡪 therefore not workmen within IDA.

Collective Bargaining

Article 2, Convention 154 of the International Labour Organization ("ILO")[4]:

• “Collective bargaining” extends to all negotiations which take place between an employer, a group of employers or one or
more employers' organisations, on the one hand, and one or more workers' organisations, on the other, for

• determining working conditions and terms of employment; and/or • regulating relations between employers and workers;

and/or

• regulating relations between employers or their organisations and workers or workers' organisations."

• In the case of Ram Prasad Vishwakarma v. The Chairman, Industrial Tribunal the Supreme Court emphasized the
importance of collective bargaining in the settlement of industrial disputes along with the principle of fair hearing of the
parties to the dispute. "It is now well-settled that a dispute between an individual workman and an employer cannot be an
industrial dispute as defined in section 2(k) of the Industrial Disputes Act unless it is taken up by a Union of the workmen
or by a considerable number of workmen.

21

INDUSTRIAL DISPUTE

Section 2(k) – Industrial Dispute

• There should be a factum of dispute not merely a difference of opinion. • The term “industrial dispute” conveys the meaning

that the dispute must be such that would affect large groups of workmen as a class who are working in an industrial
establishment.

• The disputes can be raised by workmen themselves or their union or federation on their behalf. (Section 36)

• The dispute may be in relation to any workman or workmen or any other person in whom they are interested as a body.

• This is based on the fact that workmen have right of collective bargaining. • Thus, there should be community of interest

in the dispute.

Individual Dispute

• An individual dispute originates from a single employee’s grievance. To be classified as an industrial dispute, it must be

raised by a registered trade union. • Individual disputes can transform into collective industrial disputes when they

incorporate the interests of the broader community or when they receive support from workers themselves or their union or

federation acting on their behalf. • Alternatively, for an individual dispute to be considered an industrial dispute, it must

meet the conditions in Section 2A.

• According to Section 2A, if an employer terminates the services of an employee due to a dispute or differences between the

worker and their employer, even if no other worker or union of workers is involved, the resulting dispute is classified as an
industrial dispute.

22

1. Workmen v. Dharampal Premchand (Saughandi)

Facts: business as perfumers and tobacconists in DD 🡪dismissed service of 18/45 employees 🡪 dismissed employees joined
Mercantile Employees’ Association (a registered TU) which took up his cause.

Issue: Whether dispute is an industrial dispute u/ S. 2(k)

Held:

• It would be necessary to require that a dispute raised by a dismissed employee cannot become an industrial dispute, unless it

is supported either by his Union or, in the absence of a Union, by several workmen.

o w/o such limitation, there may be frivolous and unreasonable claims by disgruntled dismissed employees.

• Section 36: says that Union for raising an individual dispute must be of same industry. o Generally, TU in same

establishment.

o But if the 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 has
sponsored it is not the union exclusively of the workmen working in the establishment concerned.
• Object of TU movement to form more TU to enforce worker’s rights. o If a rigid rule that before any dispute about wrongful
dismissal can be validly referred under s. 10(1) of the Act, it should receive the support of the union consisting exclusively of
the workmen working in the establishment concerned, the objective would be frustrated.

• The dispute can be brought by the TU for the 18 employees.

2. MCD v. Female Workers (Muster Roll)

Facts:

• Female workers on muster role in MCD 🡪 raised demand for maternity leave 🡪 it was made available only to regular female

workers 🡪 denied to muster roll workers on

23

grounds of non-regularised service 🡪 case taken up by the Delhi Municipal Workers Union.

• Nature of duties and responsibilities of these employees same as regular employees. They have to do heavy work in

construction and were made to work during pregnancy and postpartum.

Issue: Whether female workers on muster rolls be given maternity benefits? Held:

• Discussed constitutional provisions:

o As per Art 14: the labour belonging to any sector is equal before the law. o u/ Art 39 men and women have equal right to
livelihood.

o Art 42 says that just and humane conditions of work and maternity relive is necessary.

o Art 43 speaks about living wage for workers to ensure a decent standard of living. • Women employees cannot be compelled

to work during advance stages of pregnancy as it is detrimental to her health.

• No provisions in the Act that confers maternity benefits only to regular employees. • It is for this reason that it is provided in

the Act that she would be entitled to maternity leave for certain periods prior to and after delivery.

3. Workmen of Dimakuchi Tea Estate v. DTE

Facts:

• The case involves the termination of Dr. Banerjee, an assistant medical officer at Dimakuchi Tea Estate, appointed on
probation, who was found incompetent and terminated.

• The appellants, workmen of the Dimakuchi Tea Estate, contended the dispute over Dr. Banerjee’s termination should be
considered an industrial dispute under Section 2(k) of the Industrial Disputes Act, 1947.

24

• The appellants argued that the expression "any person" in Section 2(k) of the Act is broad and should include disputes
concerning any individual's employment or non employment, regardless of whether the individual is classified as a workman. •

The definition of ‘workman’ under Section 2(s) of the Act was crucial to the case.

Issue:

• Whether a dispute regarding a person who is not a workman falls within the scope of the definition of an industrial dispute
under Section 2(k) of the Industrial Disputes Act, 1947.

Analysis:

• The Court noted that for a dispute to be considered an industrial dispute under Section 2(k), it must be real, substantial, and

involve either workmen or employers in the context of employment or non-employment or terms of employment or conditions
of labour.

• The term “any person” in Section 2(k) cannot be interpreted broadly to include any individual; it must be read in the context

of the Act and its focus on workmen. • The Court emphasized that an industrial dispute must concern the employment or terms

of employment of a workman and that workmen must have a direct or substantial interest in the dispute.

• For an individual dispute to be considered industrial dispute:

o Backed by Trade Union

o Backed by Appreciable number of workmen

• This case: Workmen = must have substantial interest and their contract should look similar to the individual.

Held:

• The Court held that the term "dispute" in Section 2(k) implies that those raising the dispute must be interested in it, meaning

the person concerned must be a workman. • Dr. Banerjee, being part of the medical staff and not a workman, was not covered

by the definition of an industrial dispute under Section 2(k).

• The Court ruled that the termination of Dr. Banerjee did not constitute an industrial dispute as the appellants did not have a

direct or substantial interest in his employment.

25

• Even if Dr. Banerjee had been in the same trade union, his termination, being within the terms of probationary employment,
did not qualify as an industrial dispute under Section 2(k).

Difference between Workmen defn in TU Act and ID Act

26

MODULE 3: TRADE UNIONISM

What are Trade Unions?

• TU are organizations formed by workers in related fields to protect their collective interests. • Unions negotiate with

employers on behalf of members over issues like pay, work hours, job safety, and working conditions.
• They ensure fair treatment of employees through collective bargaining and play a key role in labour law and workers' rights

movements.

• Trade unions also engage in political activities and community service. • They aim to influence policies affecting their

members and the broader working class.

History:

• Trade Union movement began in India after the end of First World War. After a decade following the end of First World War
the pressing need for the coordination of the activities of the individual unions was recognised.

• Economic, social and political conditions influenced the growth of the trade union movement in India.

• Thus, the All India Trade Union Congress was formed in 1920 on a National Basis, the Central Labour Board, Bombay and

the Bengal

• Trades Union Federation was formed in 1922.

• Trade Unions are a natural outcome of the modern factory system.

• India’s Labour Movement

o N.M. Lokhande, a manufacturing worker, organized a significant labour convention in Bombay in 1884.

o The Second Factory Commission received a memorandum highlighting poor working conditions, but no action was taken.

o On April 21, 1890, 10,000 workers gathered in Bombay for a mass protest, following 24 strikes in Bombay and Madras
between 1882 and 1890.

o As a result, textile mill proprietors decided to give their staff a weekly day off. o N.M. Lokhande established the Bombay
Mill Hands Association in 1890, India's first trade union.

o During the earlier period of industrial development, the Factories Act 1881 was passed due to the recommendations of the
Bombay Factory Commission, 1875.

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o There were limitations in the act, and under the leadership of N.M Lokhande, workers of the Bombay Textile Industry
demanded a reduction in working hours, weekly rest days, mid-day recess and compensation for injuries.

• Right to form Association: Art 19 (1) (c) Constitution

o Art 19 (1) c guarantees the freedom to form association.

o Art 19 (4) imposes reasonable restrictions in the interest of public order or morality or sovereignty and integrity of India.

o This right only extends to the formation of an association or union and the steps that can be taken by such a union will be
tested under Art 19 (4).

o Is there a right to strike?

o Art 19 (1) b guarantees the right to assemble peacefully and without arms. o Art 19 (3) allows the state to make any law
imposing reasonable restriction on the right in the interest of public order.

o Right to form Association ≠ guarantee TU

o This right only deals w formation of association

o Recognition of TU has certain conditions that need to be met.

1. Rangaswami v. Registrar of Trade Unions

Facts:

• Employees formed the Madras Raj Bhavan Workers' Union to secure better service conditions and facilitate collective
bargaining.

• Seven employees applied to the Registrar of Trade Unions for registration under the Trade Unions Act of 1926.

• The Registrar rejected the application, stating that the members must be connected with a trade, industry, or employer's
business for registration.

• The TU argued that the term "workman" under the Act should include those employed in an industry, adopting the definition
from the Industrial Disputes Act.

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• Employees at Raj Bhavan, providing systematic services to the Governor's household and guests, should be considered
employed in an undertaking by the employer.

Issue:

• Whether the Madras Raj Bhavan Workers' Union was entitled to registration under the Trade Unions Act.

Held:

• The Industrial Disputes Act aims for industrial peace and interprets "industry" comprehensively. However, the Trade Unions
Act focuses on lawful organization of labour for collective bargaining, allowing participation in political activities.

• Services rendered by the employees were personal and indirect to the employer. Occasional sales of items were part of regular
government property administration.

• The union of such workers did not fall within the Act's scope for registration.

2. The Tamil Nadu Non-Gazetted Government Officers’ Union, Madras v. The Registrar of Trade Unions

Facts:

• Tamil Nadu Non-Gazetted Government Officers' Union, recognized by the government, applied for registration under the
Trade Unions Act.

• Registrar of Trade Unions denied the application, stating it did not qualify as a Trade Union under the Act.

Issue:
• Whether non-gazetted government officers can form trade unions.

Held:

• Registrar has the power to decline registration if the union does not meet Act requirements.

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• Definition of "workmen" in the Act implies an exclusive description, rendering any arguments on manual vs. brain labour
invalid.

• Recent case-law recognizes governmental activities as "industry" and employees as "workers," subject to exceptions.

• Test for a trade union is its object, not its personnel. Persons not considered "workmen" in an "industry" cannot form a trade
union.

• Civil servants hold positions at the discretion of the Union or State, making collective bargaining incompatible with their
employment nature.

• Allowing civil servants to engage in collective bargaining would create contradictions with constitutional protections.

3. Central Machine Tools Institute v. Assistant Labour Commissioner Facts:

• Central Machine Tools Institute (CMTI) in Bangalore challenged the registration of their employees' association as a trade
union.

• CMTI argued that it is a research organization without a profit motive, suggesting its employees might not qualify as
"workmen" under the Trade Unions Act.

Issue:

• Whether CMTI's nature as a research organization exempts its employees from being classified as "workmen," thus
invalidating the registration of their association as a trade union.

Held:

• Court examined CMTI's activities, ranging from manufacturing prototypes to consultancy, challenging its research-centric
identity.

30

• Despite being a non-profit entity, CMTI engaged in revenue-generating activities akin to commercial industries, making it
eligible under the Industrial Disputes Act (IDA).

• Both IDA and Trade Unions Act aim to settle industrial disputes and promote collective bargaining, indicating a single
legislative scheme.

• CMTI, considered an "industry" under the IDA, qualifies as a trade or industry under the Trade Unions Act.

• The provisions of both acts are complementary and part of a single legislative scheme to ensure effective enforcement of
workers' benefits.

• Workmen can secure benefits under the IDA through organized trade unions, emphasizing the importance of collective
bargaining for workers.

4. Tirumala Tirupati Devasthanam v. Commissioner of Labour

Facts:

• Tirumala Tirupati Devasthanams (TTD) manages the Tirumala Venkateswara Temple, offering various services to pilgrims.

• TTD argued against registration, claiming its religious and charitable nature exempts its employees from being considered
"workmen" under the Trade Unions Act.

• The conditions of service are governed by Statutory Rules approved by the State Government, suggesting the Trade Unions
Act doesn't apply.

• TTD contends that it is primarily a religious entity, not engaged in industrial or commercial activities, thus its employees don't
qualify as "workmen."

• They argue that the Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Act makes the Trade
Unions Act inapplicable to religious and charitable institutions' employees.

• Respondent argues that the Trade Unions Act applies, and TTD employees are considered workmen under its provisions.

31

• They assert that TTD, besides being a religious institution, also engages in trade, business, or industry, qualifying its
employees under the Trade Unions Act.

• Registration implies an acknowledgment of TTD's commercial activities and its employees as workmen under the Act.

Held:

• Previous rulings acknowledge that religious institutions may have departments engaging in industrial activities, though
primarily spiritual in purpose.

• TTD's operation of services like pilgrim transport extends beyond spiritual service, involving commercial elements.

• TTD's operation of services and employment practices align with industrial activities, making it subject to the Trade Unions
Act.

• The systematic nature of ancillary services provided by TTD supports its classification as an "industry" under the Industrial
Disputes Act.

• Thus, registration of TTD employees' union under the Trade Unions Act is deemed valid.

5. Lohia Machines Limited v. Registrar, Trade Unions

Facts:
• M/s. LML Limited challenged the registration of LML Mazdoor Ekta Sangathan by the Registrar of Trade Unions, arguing it
did not fulfil legal requirements for registration.

• The petitioner union, argued that the new union's members, including office bearers, were not engaged or employed in the
establishment as required by law, with most members being laid-off workers. They also alleged the new union was disrupting
the restoration of normalcy.

• The respondent union argued that the petitioner had no locus standi to challenge the registration and that multiple unions
could legally exist within the same establishment.

32

Held:

• The court noted that the registration of a trade union depends on meeting legal requirements, not on objections from existing
unions or the employer. The petitioner union, despite its long-standing presence and benefits provided, was not directly
aggrieved under the strict sense of the law.

• The court also observed that, under amended provisions of the Trade Unions Act, 1926, registration of a trade union requires
at least 10% or one hundred employees, whichever is less, currently engaged or employed in the establishment. The majority
of the new union's members being laid-off did not satisfy these requirements.

• The court concluded that the registration of LML Mazdoor Ekta Sangathan was not in accordance with the Act, as nearly all
its members were laid-off employees, and the bond of master and servant was temporarily severed.

• Thus, the registration of the new union was found to be invalid under the amended provisions of the Trade Unions Act.

6. Bokajan Cement Corpn. Employees’ Union v Cement Corpn. of India Ltd. Facts:

• The Bokajan Cement Corporation Employees’ Union is a union representing workers at the Cement Corporation of India Ltd.

• The Cement Corporation of India Ltd. (CCI) argued that workers lose their union membership once they stop being employed

by the company.

• CCI based their argument on Section 6 of the Trade Union Act, 1926, and the union's constitution, which stated that only

current workers could be union members.

• The union's constitution specified that membership was open to workers directly or indirectly employed by CCI, provided
they accepted the union's rules and paid the membership fee.

33

• The case revolved around whether the cessation of employment automatically ended an individual's union membership.

Held:

• The Supreme Court analysed the Trade Union Act, 1926, and found no explicit provision that membership automatically
ceases with employment termination.

• The Act requires union rules to allow for the admission of members actively engaged or employed in the relevant industry but
does not mandate automatic cessation upon job termination.

• The Court ruled that the Trade Union Act and the union's constitution should be interpreted to support the union and its

members' interests.

• The Court emphasized that the right to union membership is a significant right and should not be revoked without clear

guidelines from the Act or the union's constitution.

• The Supreme Court set aside the High Court's judgment, reinstating the single judge's decision that an employee does not
lose the right to continue as a union member upon cessation of employment.

7. G.S. Dhara Singh v. E.K. Thomas

Facts

• The management deducted 10 paise out of every rupee earned by workers towards a gratuity fund and transferred it to the
trade union on behalf of the workers.

• Additionally, the management paid another 10 paise per rupee of workers' wages to the trade union for an accident benefit

fund.

• G.S. Dhara Singh, the President and Treasurer of the union, mishandled these funds and failed to provide an account to the

union members.

• This led 85 workers, including respondents E.K. Thomas and K.K. Surendran, to resign from the union and form a separate

union.

34

• The issue was whether these workers, after resigning from the trade union, were entitled to ask for an account and
claim a refund of amounts received by the trade union from management on their behalf.

Held

• The Supreme Court highlighted that the contributions towards the gratuity and accident benefit funds were made for the
specific benefit of the workers, and these funds did not automatically become part of the general funds of the trade union.

• The Court emphasized the need for transparency and accountability in managing specific welfare funds within trade unions,
ruling that the funds should retain their designated purpose unless explicitly stated otherwise.

• The judgment clarified that without a specific scheme or agreement indicating the merger of these contributions into
general union funds, they remained separate and intended for their original purpose.
• The ruling distinguished this case from Balmer Lawrie Workers' Union v. Balmer Lawrie & Co. Ltd., setting a precedent that
without explicit consent, funds collected for specific benefits do not become union property.

• The Supreme Court dismissed the petition, affirming that workers are entitled to refunds of their contributions to
specific funds upon resigning from the union, thus reinforcing labour rights and union responsibilities in managing welfare
funds.

8. ACC Rajanka Limestone Quarries Mazdoor Union v. Registrar of Trade Unions Facts

• The A.C.C. Rajanka Limestone Quarries Mazdoor Union was formed by workers employed in the limestone quarries of the
Associated Cement Company Limited.

• The union sent an application for registration to the Registrar of Trade Unions, Government of Bihar.

35

• Despite reminders, the Registrar took no action to register the union (over 2 months). Issue

• Whether the Registrar of Trade Unions failed to perform his statutory duty under the Trade Unions Act, 1926, by delaying the
registration of the Union.

Held

• The court noted that Section 7 of the Trade Unions Act grants the Registrar the power to request further information to
ensure compliance with Section 5 or to determine the union's entitlement to registration under Section 6, allowing the Registrar
to refuse registration until such information is provided.

• Section 8 imposes a statutory duty on the Registrar to register the trade union upon being satisfied that all requirements
of the Act have been met.

• The court held that the Registrar failed to perform his statutory duty as there was no action taken under Section 7 to call
for further particulars and no action to register the union as required by Section 8.

9. Unit Prasad Singh v. State of Jharkhand

Facts

• The appellant was elected as General Secretary of the Union in October 2000. • A second election (alleged illegal practices),
lacked proper notification as required by the Union's rules, and no actual election took place.

• The appellant wrote to the Registrar of Trade Unions, requesting that the election be declared illegal.

• The Registrar declared the election invalid and ordered a fresh election. Issue

• What is the extent of the power and jurisdiction of the Registrar of Trade Unions to adjudicate disputes between rival
parties?
36

Held

• In the case of O.N.G.C. Workmen's Association v. The State of West Bengal, the scope of the Registrar's power and
jurisdiction was discussed.

• The Registrar has the authority to ascertain elected office bearers and register their names under Sections 8 and 28 of the
Trade Unions Act. However, the scope of inquiry is limited, and any decision must be administrative (procedural), not
quasi-judicial.

• The Registrar of Trade Unions does not have the jurisdiction to determine disputes regarding the legitimacy of elected office
bearers of a trade union.

• The Trade Unions Act, 1926, does not provide for adjudication of such disputes by the Registrar or any designated authority.

• Disputes regarding elected office bearers should be resolved through a civil suit in a court of competent jurisdiction.

10. Tata Workers Union v. State of Jharkhand

Facts:

• The Tata Workers Union, a Registered Trade Union, filed a writ application challenging an order by the Labour
Commissioner-cum-Registrar, Trade Unions, Department of Labour, Employment and Training, Jharkhand, regarding the
supervision of the Union election.

• MLA and member of the Executive Committee, intervened, stating that the election would be supervised by the Registrar.

• Notices were issued to submit grievances/suggestions during the election process, and the Registrar advised settling internal
disputes within the Union.

• The Registrar confirmed the Union's actions in a meeting, but a member filed a writ petition seeking Court direction to
supervise the election.

• Despite no evidence of malpractice during the election, disputes led to the Registrar staying the election, prompting the
petitioner to file another writ petition.

37

Held:

• The Court determined that the Registrar cannot intervene in holding the election of office bearers of a registered Trade
Union.

• The competent authority was given the liberty to hold elections without government interference.

• During the pendency of the writ petition, the Registrar directed the petitioners to bring all records related to the election.

• Counsel for the parties agreed to hold the election under the supervision of the Deputy Commissioner and the Superintendent
of Police for transparency and control.
11. Balmer Lawrie Workers Union, Bombay v. Balmer Lawrie and Company Ltd.

Facts:

• Two unions of workmen employed in R1 company – One of them is recognised and registered as a TU and the other is not

(Petitioner in said case)

• A settlement arrived at between R1 and R2 stated in Clause 17 that 15% of the arrear’s payable would be collected from the

workmen as contribution to the union fund. • However, as per P this amount payable would be for the benefit of the R2 alone

and therefore, filed WP contending that without the consent of the unrecognised TU members, a compulsory exaction was
being imposed on them.

• WP filed in the Bom HC challenging the constitutional validity of section 20(2) r/w Schedule I of the Maharashtra
Recognition of TU and Prevention of Unfair Labour Practices Act, 1971

P’s Contentions:

• S. 20(2)(b) if interpreted to allow such compulsory exaction without the consent of P’s members would force and compel the
workmen against their will to join the union which has acquired the status of recognised union.

38

• Violated fundamental right to form association within Art. 19(1)(c) and right to freedom of speech and expression as per Art

19(1)(a).

• Also, contentions that differences between recognised and unrecognised TUs would be violative of Art 14.

Held:

• Delved into the history and scheme of the 1971 Act while referring to the Bombay Industrial Relations Act 1946 which was
similar to IDA, 1947 but was governing only certain kinds of industrial relations. 1971 Act was brought in to bring both the
legislation at par.

• Requirements as per section 11, 1971 Act state that 30% of the workmen must be members of the TU must be members for

preceding 6 months.

• Political party affiliations- trade unions competing and making untenable demands recognised TU was developed as a concept
of sole bargaining agent in the larger interest of industrial peace and harmony – largest representation gets recognised.
(Standing Labour Committee, 29th Session, July 1970)

• Remedied the gap by Section 2-A, which allows that workman who is dismissed, discharged or removed from service or
whose service is otherwise terminated can have a dispute which would be an industrial dispute.

• Non-recognised TU are still registered TU and have some rights as per S.22. Therefore, the exclusion is partial and the
embargo on representation as per Clause 20(2)(b) is in larger public interest.
• Consent was not there but the benefits of the settlement are being accrued by all workmen and not the members alone, so this
is a permissible deduction because it is through consent of the parties even if deductions not permissible as per the Payment of
Wages Act.

12. MRF United Workers Union v. Govt. of Tamil Nadu

Facts:

• MRF Limited's Arakonam factory in Tamil Nadu faced issues concerning labour law compliance, particularly regarding
transparency in piece-rate wages.

39

• Attempts by workers to form an independent trade union were consistently hindered by management, which established its
own union and deducted subscription fees from workers' wages.

• In 2003, the workers successfully formed the MRF United Workers' Union and sought recognition from management as the
sole bargaining agent in February 2004.

Held:

• The Madras High Court stressed the importance of workers having a truly representative and independent collective
bargaining agent, essential for industrial peace and workers' welfare.

• Referring to the Industrial Disputes Act, 1947, the court inferred that it envisions a representative and independent collective

bargaining agent for workers. • It mandated that management must recognize and negotiate in good faith with such a
union, rejecting management's stance to decide workers' representatives and negotiate solely with them.

• The court asserted that such a stance by management would interfere with workers' rights to unionize for collective bargaining
purposes.

• Consequently, the court affirmed that the Act mandates the recognition of a genuinely representative and independent
collective bargaining agent, emphasizing the necessity of fair negotiations between management and workers' unions.

40

Rights, Liabilities and Immunities – Trade Unionism

Trade Unions Act:

S. 15. Objects on which general funds may be spent.

S. 16. Constitution of a separate fund for political purposes.

S. 17. Criminal conspiracy in trade disputes.

S. 18. Immunity from civil suit in certain cases.

S. 19. Enforceability of agreements.

S. 20. Right to inspect books of Trade Union.

S. 21. Rights of minors to membership of Trade Unions.

Immunities Against Criminal Conspiracy

• Before the passing of the Trade Union Act, 1926 the workmen could not organize and participate in strikes for improvement of

their conditions of service.

• Section 17 lays down that – No office-bearer or member of a registered trade union shall be liable 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 effect of this section is that an agreement by two or more members of a registered Trade Union to do or cause to be done
any act in furtherance of a trade dispute shall not be punishable as a conspiracy unless such act if committed by an
individual constitutes an offence. Thus, commission of other criminal offence under IPC would not attract the

immunities u/s 17.

o S. 120A of IPC. Definition of criminal conspiracy: When two or more persons agree to do, or cause to be done, (1) an illegal
act, or (2) an act which is not illegal by illegal means, such an agreement is designated a criminal conspiracy.

o S. 120B of IPC prescribes for the punishment.

• Conspiracy, at common law, had its origin primarily as a civil wrong, but was lately made punishable as a criminal wrong.

• Conspiracy was originally used to explain the acts of agreement of those who combined to carry on legal proceedings in a

vexatious or improper way.

41

• If two or more persons agree together to do something contrary to law, or wrongful and harmful towards another person, or do
a legal act by illegal means, the persons who so agree commit the crime of conspiracy.

13. R.S. Ruikar v. Emperor

Facts

• R.S. Ruikar led a strike against Empress Mills for not adhering to previous settlement terms. • Initial support for the strike was

weak, prompting Ruikar to organize picketing at mill gates • Ruikar was charged under Section 7 of the Criminal Law
(Amendment) Act, 1932, for his speech and actions related to picketing.

Held

• The Trade Unions Act of 1926 protects unions from certain legal liabilities but does not confer immunity from all criminal
offenses.

• Peaceful picketing is permissible as part of the right to strike, but molestation and violence are not allowed (S. 7 of Criminal
Law Act).

• The Trade Unions Act, 1926, does not provide immunity from criminal offenses committed during a strike.

• The Court held that while trade unions have the right to strike and certain legal protections, they are not immune from all/
any criminal prosecution for offenses like molestation committed during a strike.
• Any agreement to commit an offence, would under section 17 of the Trade Union Act make them liable for criminal
conspiracy.

Nature of Immunity

• The workmen need to resort to collective action against the employer. • These collective actions may take the form of strike

or anything alike at his shop or factory with a view to get the employer to listen or negotiate with the workmen. • In common

law, such an action can be actionable as ‘Conspiracy’ under IPC, therefore Section 17 give protection to the workmen against

criminal conspiracies. • In furtherance of the Trade Dispute the workmen are taken out of the scope of S. 120 B of IPC.

42

• Breach of contract does give rise to a civil cause of action, therefore under section 43 of the Indian Penal Code 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. Both of this are actionable under 120A read with section 43 of the IPC.

• But section 17 of the TU act covers immunity against this allowing such withdrawal in breach of contract.

• This immunity allows workmen to materialise the right to strike.

Essentials/Elements of Immunity

• Only Workmen + Office Bearers + Registered Trade Union

• Advancement of the Objective of the TU = Collective bargaining

• In the furtherance of Agreement + Trade Dispute 🡪 S. 2(k)

• To apply S. 17 of the TU Act – Extent of conspiracy to be measured for the grant of immunity (R.S. Ruikar v. Emperor).

S. 17 does not provide immunity against:

• When punishment = death, life imprisonment or rigorous imprisonment for a term of two years or more.

• S. 17 (bare reading): does not insulate agreement to commit any offence whatsoever. • IMMUNITY is confined to 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 ground for civil action.

Section 18 of TU Act: Immunity from civil suit in certain cases

• The above section does not afford immunity to the members or office bearers of a trade union for an act of deliberate
trespass. Dalmia Cement Ltd. v. Narender Anandji, it was held that a registered Trade Union or their office bearer are liable in
civil action in tort for an act of deliberate trespass.

• The immunity also cannot be availed of by them for unlawful or tortious act. Further such immunity is denied if they indulge
in an gherao.
43

Section 19:

• 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.

14. Quinn v. Leatham

Facts:

• Leatham, a butcher, employed several unionized workers. They were not part of the Belfast Butchers’ Association (BBA).

• Quinn and other union officials demanded Leatham discharge all non-union employees. • Leatham refused, leading union
officials to threaten a strike and persuade Leatham's unionized employees to stop working for him.

• This resulted in significant economic losses for Leatham's business.

Issue:

• Whether the union officials' actions constituted tortious interference with Leatham's business.

Held:

• The Court held that Quinn's actions to wrongfully and maliciously induce Leathem’s employees and customers to cease their
engagement with him were actionable upon proof of damage.

• While lawful assembly is allowed, if the sole purpose is to cause harm to another, it becomes unlawful.

• Any intentional violation of someone’s legal rights without justification is actionable in tort.

• The decision was significant in UK labor law, establishing limits on the actions unions could take against employers.

44

15. Rohtas Industries v. Union

Facts:

• A dispute arose between the management of Rohtas Industries and the union over enhanced wages and bonuses, leading to a
strike.

• The strike ended and the dispute was referred to arbitration to decide on two claims: a) wages during the strike, and b)

compensation for the management's losses due to the strike. • Arbitrators ruled the strike illegal and ordered the workers to pay
compensation to the management. The High Court reversed this decision, leading to an appeal to the Supreme Court.

Issue:

• Whether the arbitrators' award granting compensation to the company for losses due to an illegal strike is valid in law.

Held:

• The Supreme Court found that compensation for loss of business is not a dispute connected with employment, non-
employment, terms of employment, or labor conditions as defined under 'industrial dispute' in the Industrial Disputes Act.

• The Court emphasized that English common law principles, which the arbitrators relied on, are not appropriate for the Indian
context and that Indian jurisprudence must evolve with its own values and conditions.

• The Court highlighted the importance of the constitutional rights of workers to form associations and strike for grievance
redressal, noting that strikes are generally intended to advance workers' interests rather than damage the industry.

• The Court concluded that the arbitrators' award of compensation for losses due to the illegal strike was contrary to law and
invalid.

• The Court stated that the remedy for illegal strikes must be confined to the provisions of the Industrial Disputes Act and
cannot be claimed outside of it.

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16. Jay Engineering Works v. State of West Bengal

Facts:

• Jay Engineering Works, a company manufacturing sewing machines and fans, employed approximately 365 workmen.

• Retrenched employees, along with others, blockaded the company's premises, obstructing passage and wrongfully confining

personnel inside until police intervention. • Retrenched workers and others gheraoed the manager and officers multiple times,
during which company property was tampered with, walls spoiled, and insulting slogans shouted.

Held:

• Agreements to commit an illegal act or use illegal means for a legal act do not qualify for exemption under Section 120A if
the act is to commit an offence.

• The Court held that Sections 17 and 18 provide exemptions but not for agreements to commit offences or acts involving

intimidation, molestation, or violence. • Members of a trade union may lawfully engage in peaceful strikes to enforce their
claims, but these must not involve violence or any form of criminal activity.

• The exemptions are lost if the gathering is unlawful or commits an offence, such as wrongful confinement, criminal trespass,
or violence.

• Consequently, the actions of the retrenched employees in this case, involving wrongful confinement and property damage,
were not protected by the exemptions provided in the Trade Unions Act.
 46

17. Vidyasagar Institute of Mental Health v. Hospital Employees Union

Facts:

• TU informed the hospital of some demands. The Employers only agreed to some of the demands.

• Notice of strike was sent. The TU also threatened to use coercive methods. Held:

• TU does not have the right to disrupt the functioning of the hospital and cause inconvenience to patients, visitors, and other
members.

• Trade Unions or workers have no right to hold demonstrations at the residence of the employer; peaceful demonstrations are

allowed 200 meters from the premises. • Demonstrations at the residence of the employer are prohibited under the Industrial
Disputes Act (IDA) and amount to unfair labour practice.

• The threat of a strike given by the defendant in this case is illegal.

18. Bharat Kumar v. State of Kerala

Facts:

• Petitioners Bharat Kumar K. Palicha and others approached the Kerala High Court. • They sought a declaration that the
practice of calling and enforcing bandhs (general strikes) is unconstitutional and illegal.

• Their argument was that bandhs violate fundamental rights guaranteed under Articles 19 and 21 of the Indian Constitution.

• Bandhs deter citizens from pursuing their occupations, accessing education, and obtaining medical services.

• The petition also highlighted that bandhs are often accompanied by violence or threats thereof, further rendering them illegal.

Issue:

• Whether the practice of calling for and enforcing a bandh is unconstitutional and violates the fundamental rights of citizens
under Articles 19 and 21 of the Constitution of India. Held:
• The Kerala High Court distinguished between peaceful protests, protected under Article 19(1)(a) and (b), and bandhs, which

coercively halt all public and private activities.

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• Bandhs infringe upon fundamental rights, including the right to move freely, practice any profession, and live without fear

of harm.

• A bandh is an expectation that all activities come to a standstill for some time (for economic or political). It is different from
general strike or harthal as both private and public activities are stopped in a bundh.

• A bandh compares to gherao and states that the citizens are not physically prevented but by holding out a threat of

consequence on failure to obey 🡪 holds it to be a violation of the FR.

• State can in the interest of public order reasonably restrict FRs 🡪 no legislative definition of bandh or any by-laws to regulate

it 🡪 therefore court can step in to protect the rights. • Nothing stands in the way of political parties calling for a general strike

or harthal unaccompanied by express or implied threat of violence to enforce it 🡪 it is not possible to hold bandhs not

violative.

• The court dismissed the argument that calling for a bandh is a fundamental right of political parties, asserting that one group's

rights cannot impinge upon others'.

• No political party or organization has the right to paralyze industry and commerce state wide or nationally.

• Preventing citizens not in agreement from exercising their fundamental rights or performing their duties is unreasonable.

• Calling for bandhs is therefore deemed unconstitutional.

19. Communist Party of India v. Bharat Kumar

Facts:

• The issue centred around the distinction between a "Bandh" and a general strike or "Hartal." • The High Court had previously
made a clear distinction regarding the impact of a "Bandh" on the fundamental rights of citizens.

Issue:

• The main issue was whether it is considered a fundamental right to hold a Bandh, Hartal, or similar protests.

Held:

• The Court acknowledged that fundamental rights are enforceable not only against the "State" but also against private citizens.

48
• It upheld the High Court's distinction between a "Bandh" and a general strike or "Hartal," emphasizing the effect on the
fundamental rights of other citizens.

• The court emphasized that fundamental rights of the entire population should not be compromised for the claims of individual
or specific group rights.

• Consequently, it was established that there is no entitlement to declare or enforce a "Bandh" that disrupts the exercise of
fundamental freedoms of other citizens and harms the nation in various ways.

20. Kameshwar Prasad v. State of Bihar

Facts:

• Kameshwar Prasad and other government employees contested Rule 4A of the Bihar Government Servants' Conduct Rules,
1956, which barred government servants from engaging in any form of strike.

• They argued that this rule infringed upon their fundamental right under Article 19(1)(c) of the Constitution, which guarantees
citizens the right "to form associations or unions."

Issue:

• Whether the rule prohibiting government employees from participating in any form of strike, was constitutionally valid.

Held:

• While the right to form associations or unions was guaranteed under Article 19(1)(c), it was subject to reasonable restrictions
in the interests of public order or morality, as specified in Article 19(4).

• Upon entering government service, individuals consented to reasonable conditions framed to ensure the proper functioning of
the administrative machinery and maintain discipline within the service.

• The rule was deemed violative of the appellants' rights under Article 19(1)(a) & (b) and was struck down. To analyse whether
it is a reasonable restriction, the court analyses whether there is a proximate and reasonable nexus between the nature of speech
prohibited

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and public order 🡪 does not fall since it bans ALL kinds of demonstrations, even the peaceful ones.

• However, the Court clarified that the rule prohibiting a strike could not be invalidated. • The Court emphasized that there is no
fundamental right to resort to a strike.

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MODULE 4: STATE PRESCRIPTION OF STANDARDS

INDUSTRIAL DISPUTES ACT, 1947

Lay-Off

Section 2(kkk)
• Failure, inability, refusal of employer to give employment

• Temporary in nature

• Because of shortage of raw materials

• Employer cannot keep up same production levels

• It is severable

• Determined by production, not profits

• When work is done in 2 shifts, if not work in 1st shift can be considered lay-off, may work in 2nd shift.

• Conditions for Lay Off:

o Part of muster roll

o Showed up for work on time

o Received no work for 2 hours

o Workman not retrenched

o Failure, inability, refusal of employer to give employment

Section 25C: Right of Workmen Laid Off for Compensation

• Workmen entitled to 50% basic wage and Dearness Allowance (DA) during lay-off (not for weekly holiday)

• Must be read W/ Section 25E

• Conditions to right:

o Not a badli or casual worker

o Name on muster roll

o Completed not less than 1 year of Continuous Service

• Threshold Period: 45 days

o Over 45 days, lay off becomes retrenchment

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o Compensation only given for 45 days

Retrenchment

Section 2(oo)

• -ve definition

• Tells us what is not retrenchment

• Every termination can be retrenchment

• Statutory right of employer

• Does not include: (these are considered dismissal of service)

o Voluntary retirement

o Retirement on age or health

o Non-renewal of employment contract

Chapter VA: Deals w/ Lay off and Retrenchment:

Section 25A: Application of 25C to 25E

• Layoff applicable only to some industries

• Not applicable to:

o Industries in Chapter VB

o Establishments w/ less than 50 workmen per day

o Industry of seasonal character

▪ Seasonal character decided by appropriate government

Section 25B: Continuous Service

• Condition to satisfy lay off in Sec. 2(kkk)

• Determined by including:

o Continuous period of work

o Leaves

o Discontinued work because of strikes or lockout

• If conditions not satisfied for working for 1 year, calculation made in last 12 months for:

o Mining (underground) industry 🡪 190 days

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o Other industry 🡪 240 days

• If conditions not satisfied for working for 1 year, calculation made in last 6 months for: o Mining (underground) industry 🡪

95 days

o Other industry 🡪 120 days

• For (2), number of days worked incl. days on which he has been laid off or has earned leave with full wage, has been absent
due to temporary disablement due to accident at employment or female on maternity leave.
Section 25C: Right of Workmen Laid Off for Compensation

Section 25D: Statutory Duty of Employer to maintain muster rolls and make valid entries Section 25E: Conditions when

Workmen not Eligible for Compensation

• Not entitled when:

o Refuses alternate establishment in same city

o Not showing up for work

o Strike in another department of same industry has affected department • Right based concept: if worker cause of slowing

down production, not eligible to claim compensation

NOTE: LABOUR LAW IS NOT A PROTECTIONIST LAW ANYMORE. IT IS A COOPERATIVE LAW UPHOLDING
RIGHTS OF EMPLOYER AND EMPLOYEE

Section 25F: Conditions Precedent to retrenchment of Workmen

• Worker working for over a year, cannot be retrenched unless:

o Been given one month notice in writing

o Been paid compensation which shall be equivalent to fifteen days’ average pay for every completed year of continuous
service

o Notice also sent to appropriate government

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Section 25J: If a workman is entitled to benefits more favourable to him than those provided under the Industrial Disputes Act,
he shall continue to be entitled to the more favourable benefits.

Section 25K: Retrenchment and Lay off for industries where workmen are NOT LESS THAN 100 employed on average per
working day for preceding 12 months

Chapter VB

Section 25M: Prohibition of LAY OFF for industries where workmen are not less than 100.

SECTION 25N: Conditions precedent to retrenchment of workmen for industries where workmen are not less than 100.

Section 25Q: Penalty for Lay off and Retrenchment.

• When employer contravenes Section 25M or 25N, punishable by jail or fine or both. NOTE:

• For industrial establishment with workmen not less than 50, lay-off and retrenchment conditions are under Chapter VA
meaning 25A to 25F. (retrenchment and lay off will be seen under these provisions)

• For industrial establishments where the workmen are not less than 100. Chapter VB applies meaning Section 25K to 25Q
applies for retrenchment and layoff and not 25F or 25C or 25E.
• The difference is based on a number of workmen.

• And most important difference is in the notice and permission related provisions.

Strike

• Section 2(q)

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• Means:

o Cessation of work

o Acting in a concerted refusal

Lock-Out

• Section 2(I)

• Means temporary closing of industry or suspension of work or refusal of employer to continue to employ workers.

Chapter V: Strikes and Lock Out

• Section 22: Prohibition of Strikes and Lockouts

• Section 23: General Prohibition of Strikes and Lockouts

• Section 24: Illegal Strikes & Lockouts

• Section 25: Prohibition of Financial aid to illegal strikes and lock outs

Closure

• Section 2(cc): Permanent Closing Down

• Section 25O: Procedure for Closing Down an Undertaking

• Section 25R: Penalty for Closure

Unfair Labour Practices:

• Section 2(ra): Specified in 5th Schedule.

• READ 5TH SCHEDULE FULL

• Section 25T: Prohibition of Unfair Labour Practices

• Section 25U: Penalty for Unfair Labour Practices

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1. Workmen of Dewan Tea Estates v. Their Management

Facts:
• Workmen laid off for 45 days.

• Workmen contended:

o Layoff unjustified.

o Full wages to be paid.

• Management contended:

o Long depression period due to poor finances.

o Layoff beyond control.

o Compensation only entitled as per Section 25C.

o Lay off as per Standing Order, Rule 8 requirement met.

o Lay off allowed. No wages only compensation due.

o Stoppage of supply may bring back financial health.

• Referred to Industrial Tribunal.

Issue: Whether layoff is justified u/ Rule 8 of Standing which has been certified by Standing Order Act.

Tribunal Held:

• Layoff Justified

• Appealed to SC

SC:

• When the laying off of the workmen is referred to in s. 25C, it is the laying off as defined by s. 2(kkk), and so, workmen who
can claim the benefit of s. 25C must be workmen who are laid off and laid off for reasons contemplated by s. 2(kkk); that is all
that s. 25C means.

• If any case is not covered by the Standing Orders, it will necessarily be governed by the provisions of the Act, and fulfil

conditions under Section 2(kkk)

• Therefore, we do not think that the Tribunal was right in holding that s. 25C recognises the inherent right of the employer to

declare lay off for reasons which he may regard as • sufficient or satisfactory in that behalf.

• No such common law right can be spelt out from the provisions of Sec. 25C.

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• Stoppage of supply means supply of raw materials and not money.

o Less money cannot allow stoppage of supply.

• Wages to be paid off as layoff is unjustified.

o Whenever layoff is unjustified, full wages to be paid and in some cases also re instatement.

2. Workmen of Firestone Tyre and Rubber Co. v. Firestone Tyre and Rubber Co. Facts:

• Strike in BOM office 🡪 shortage in supply in DEL.

• 17/30 workmen in DEL office laid off due to reduction in production. o No wages paid.

• IT held that workmen not entitled to compensation.

Issue: Is the layoff justified

Held:

• Chapter VA does not apply. The chapter gives the authority to lay off. • First check number of workmen.

• Less than 50, thus not applicable.

• Not within purview of Chapter VA.

• Employer had no authority to lay off as no standing orders were also there. • When coming under Chapter VA, 50% wages to

be paid u/ Section 25C. • If Ch. VA not applied, it will be considered a suspension.

o Wages paid akin to suspension.

NOTE: Apply Ch. VA and VB first, check authority otherwise, then check standing order, otherwise principle akin to
suspension will apply using Firestone Case

3. Associated Cement Companies v. Their Workmen

57

Facts:

• Company had cement factory and limestone quarry.

o Both had individual TU.

• Strike in quarry, factory workers laid off.

• Compensation demanded u/ Sec. 25C.

• Management argued: same industry, no compensation available u/ Section 25E. • IT held different establishment, entitled to

compensation u/ S. 25E.

• Matter appealed.

Issue: If Factory and Quarry are same industry, and if workmen of Cement factory is entitled to compensation for layoff

Held:
• Tribunal was wrong.

• Both constitute same establishment within Sec. 25E.

o Quarry worker worked under control and supervision of factory manager. • Established Test for Determining Same

Establishment:

1. Unity of Ownership

2. Management and Control of branches

3. Geographical proximity of 2 parts of establishment

4. Unity of employment and conditions of service

5. Functional internality and interdependency

6. General Unity of purpose

7. Same finances

• Even if some factors met, will be same establishment.

• The court noted that in the present case the relation between the quarry and cement factory showed that the quarry was a part
and parcel of the cement factory and is a department thereof.

• Therefore, workers not entitled to compensation.

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4. Papnasam Labour Union v. Madura Coats

• Questions constitutionality of Section 25M

Held:

• Upheld constitutional validity of Section 25M.

• Basic objective of Section to avoid hardships faced by workmen due to unhealthy layoff. • For the purpose of avoiding illegal

or unhealthy lay-offs and industrial peace, such a provision was held not to be unconstitutional and arbitrary in nature.

• Further, the Apex Court specified that there is no requirement of taking prior approval in extreme cases, as mentioned under

Sub-Section (3).

5. Kairbetta Estate v. Rajamacikam

Facts:

• RK Iyer, Manager 🡪 Assaulted by workers that resulted in injury.

• Staff threatened by workers and lower division staff denied going to work due to threat. • Company’s lower division closed for

a while.

• Respondents filed a complaint in the Labour Court under Section 33A as they contended work was stopped w/o prior notice.
• Workers claimed compensation also.

• IT: respondents correct, it is a layoff.

• Appealed to SC

Held:

• Made distinction between lockout and layoff.

• Said present case was lock out and not layoff and stoppage were initiated by management due to labour dispute.

• Lockout is a tool available to the employer to force his demands against the employee. • Workmen aggressive and out of

control, lockout not illegal and allowed. • Held the lockout was only temporary, no compensation available.

Court made distinguishment between Layoff and Lockout

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• Why is it caused?

o Layoff takes place for one or more reasons specified in definition.

o Lockout is caused by employer involving closing place of work, suspending or refusing work by an employer to compel
employees to accept certain terms.

• Essence of a lockout is antithesis of a strike.

• Layoff occurs in continuing business whereas lockout is closure of business. NOTE: in exam make distinction between facts

and reasoning and choose most applicable

6. Rohtas Industries v. Union

• Will also come in TU module.

Facts:

• Strike due to inter-union rivalry.

• MoU signed w/ employer to end strike.

• Employer asked for compensation for loss caused due to strike.

• While workers asked for wages during strike.

• Went to arbitration and held strike illegal, awarded management compensation from workers.

• HC turned over order.

• Appealed to SC.

Issue: Can workmen give compensation for loss?

Held:

• Immunity given to striking workmen, even for illegal strikes.

• Section 22 & 23: cannot ask for compensation, these sections do not confer rights to employers against workmen.

• Even if strike is illegal, cannot ask for compensation (Civil action for damages). • Workmen immunity even in illegal strikes.

7. State of Bihar v. Deodhar Jha

Facts:

60

• Patna Electric Service 🡪 PSU

• TU made demands that were referred to adjudication.

• During pendency of suit, one employee was suspended on grounds of wilful disobedience. • Management locked out the

employees that went on strike afterwards. • Union demanded wages as strike was based on illegal lockout and restoration of

jobs w/ retrospective effect.

• Company argued strike was in contravention of Sections 22(1)(b), 23(b), and 24. Held:

• The suspension of workers was done with a view to terminate their employment and the suspension cannot constitute a

lockout u/ Sec. 2(1)

• The HC said that the threat to go on strike is not always illegal as going on strike in not always illegal.

8. Ramnagar Cane and Sugar Company v. Jatin Chakravorty

Facts:

• Different types of workmen employed.

o 545 permanent workers.

o 703 seasonal.

o Other casual labourers.

• 2 unions:

o Employees Union

o Workers Union (minority)

• WU had demands that were backed by EU.

• Co. said they will negotiate with both Tus separately, WU objected.

• EU was negotiating w/ company as conciliation failed w/ WU.

• During conciliation, the conciliation officer sent a report, WU thought conciliation is over and started a strike.

o Co. argued strike is illegal as conciliation proceedings were underway.

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• No sign if rivalry between both Unions and negotiations were done by only one union, hence only EU has right to strike.

• Company said Strike by WU will therefore be illegal.

• IT: said respondents were not wrong to strike, strike was legal.

• Appealed to HC and then SC.

Issue: Whether strike was illegal?

SC Held:

• Industrial Dispute can be raised only when it is sponsored by a body of workmen acting through a union or otherwise.

• Settlement arrived in a conciliation between company and TU is binding u/ Sec 18(3). It is binding on people of rival TU as
they are all workmen on same establishment. Workmen are not severed based on different TU.

• TU are reflective of a collective demand and benefit to one extends to the other. • Using collective bargaining, if one TU is

negotiating, the rival TU cannot strike. • Since there was a pendency of conciliation the strike is illegal u/ Section 24.

9. B.R. Singh v. UOI

Facts:

• Workers without any oblique motive resorted to strike to press long outstanding demands for revision of wages, regularization
and housing facilities shortly before the scheduled visit of the President.

• Management worried and terminated the services of a large number of workmen and denied reinstatement.

Held:

• Court ordered reinstatement of employees. Said cannot dismiss employees without an inquiry and quashed termination.

• Also held that right to strike is not a fundamental absolute right. This is because restriction are places as per Sections 23, 22,

10.
62

• Only right to form associations or unions is a fundamental right / Art 19(1)(c). • Voicing demands and grievances are also a

labour right.

• Therefore, Trade Unions with sufficient membership strength are able to bargain more effectively with managements.

• Such rights are an important weapon in the armory of the workers.

10. PC Roy v. Raycom

Facts:

• Poor financial status of company 🡪 economic emergency

• Employer delayed payment of wages during strike, even after payment, strike continued. • Wages were in arrears for 6

months.

• Notice for strike sent on 11th January for unpaid wages, arrears cleared on 4th Feb. o April-May wages were delayed.

• Workmen served notice of strike on 28 th June and commenced on 29th. • Dues cleared on August 11th. Workers did not call of

strike.

• Work resumed only on 3rd September.

• Claimed wages from June 29th to 3rd September.

• Company only wanted to pay till August 11th.

Issues:

• Till when is wages to be paid?

• Can strike begin a day after notice?

Held:

• Illegality of Strike?

o Notice for strike for PSU u/ S.22, no time frame for private enterprise. o Section 23 applies.

o Illegality depends on violence of strike for private company 🡪 no violence in this case.

• Wages to be paid.

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o Held that employer is obligated to pay for work done regardless of employer’s financial situation.

o Must pay wages till Aug 11th.

• When can strike begin?

o Section 23 states no person can strike during pendency of conciliation proceedings and 7 days after conclusion of
proceedings.

o Strike cannot be held during conciliation.

• Wages paid on Aug 11th, but work resumed in September, 🡪 strike ends when reason to strike ends. Strike post Aug 11 th is

illegal.

11. Gujarat Steel Tubes v. Mazdoor Sabha

• Explains “Public Emergency” in the application of labour law.

Facts:

• During lockdown: Govt of Gujarat issued notification under Section 5 of the Factories Act to exempt all factories registered
under the act from various provisions relating to weekly hours, daily hours, intervals for rest etc, for the adult workers.

• Aim was to provide exemptions for industrial and commercial activities. • State said lockdown caused severe slowdown in

economic activities. Emergency provisions required to protect the existence and integrity of Gujarat.

• It constituted a public emergency u/ Section 5 of Factories Act

Issue: Whether COVID Lockdown is a public emergency?

Held:

• Public emergency is not a subjective factor at the state’s discretion, it must be an objective fact.

• 3 prong test to qualify as public emergency:

o Grave emergency only.

o Security of India or its territory must be threatened.

o Cause of threat to be war, external aggression or internal disturbances

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• This must be read as strictly as possible bec. Wide state powers curtail freedoms of individuals. Court gave public emergency

a high threshold.

• Actions that are permitted to meet the emergency need to meet the twin tests of necessity and proportionality (which means
that the actions taken must be appropriate to the task it is trying to achieve).

• For Section 5 the SC held that power conferred under the section can be exercised only in cases of grave emergency of the

kind that threatens the security and no other circumstances. • In COVID, the mass migration and economic slowdown did not

threaten the security or constitute as an internal disturbance.

• COVID was held not to be a public emergency and the Court provided a much-needed check on way the Government can
declare public emergency.

12. Vidyasagar Institute of Mental Health v. Hospital Employees Union Facts:

• TU made demands, some of them were fulfilled while others weren’t, to maintain a healthy atmosphere. TU still sent notice

for strike.

• Hospital said that strikes affect working and disruptive strike can have effect on lives of patients.

• TU was restrained by a Court order to hold demonstrations in any way that obstructs the ingress and egress of any member of

management.

• TU argued: strike is a right and as demands were not met, they cannot be stopped from demonstrations and agreed to hold
peaceful ones.

• TU held demonstration at residence of employer.

Held:

• For industries like Hospitals

o Cannot disrupt activities as it will have detrimental effect on public health. o Only peaceful demonstrations are allowed.

o Strike cannot cause nuisance to employer to patients.

o Court has devised a method to calculate distance for such protests within which strike will be illegal.

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o Strike can be held to be at 200m from the boundary of the premises. • TU had no right to protest at employer’s residence.

o It is specifically prohibited in the act and amounts to unfair labour practice as per Schedule V Entry 6.

o Such demonstrations take form of assault.

13. TK Rangarajan v. Govt of Tamil Nadu

Facts:

• Tamil Nadu Government terminated over 2 lakh striking employees and arrested them. • Employees filed a writ petition under

Article 226 in the High Court of Madras; single bench issued an interim order suspending dismissals until further inquiry.

• State government appealed the interim order; division bench set aside the single bench's order and directed employees to the

administrative tribunal first, citing L Chandra Kumar vs. Union of India.

• Poor conditions of arrested employees were revealed; court ordered their release on bail. • Writ petitions were filed in the

Supreme Court under Articles 32 and 226 challenging the High Court's order.
Held:

• Government employees do not have a statutory or fundamental right to strike as no law grants such a right.

• Tamil Nadu Essential Services Maintenance Act prohibits strikes by government employees.

• Strikes by government employees are unjustified on unreasonable grounds and affect society.

• Employees should use alternative methods for grievances and refer to the Administrative Tribunal first; High Court

intervention is a last resort.

• Appeals and writ petitions were disposed of, affirming that government employees lack the right to strike under the Industrial
Dispute Act, 1947, and Tamil Nadu Essential Services Maintenance Act.

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14. Essorpe Mills v. PO Labour Court

Facts:

• Respondent workmen in a public utility service went on illegal strike on 18.11.1990 and were suspended.

• Union served a notice on 14.3.1991 stating a strike would commence on or after 24.3.1991, with a copy to the Conciliation
Officer.

• Workmen were dismissed for misconduct after a disciplinary enquiry. • Workmen challenged their dismissal, claiming it

occurred during pending proceedings and was thus illegal.

Issues:

• Whether notice dates 14.3.1991 could be considered a valid notice under Section 22? • Whether valid conciliation proceedings

were pending under Section 20 of the Act? Held:

• Different stages under Section 22 of the Industrial Disputes Act require 6 weeks advance notice and 14 days for the employer

to consider the notice.

• Workmen cannot strike before the date specified in the notice.

• The notice given on 14.3.1991 did not comply with Section 22 as the period between the notice and strike date was less than
the mandatory period.

• Without valid notice, the employer is deemed unaware of the proceedings, and conciliation proceedings must meet legal
requirements.

15. Hariprasad Shivshankar Shukla v. AD Divelkar

Facts:
• On November 11, 1953, the Railway Company notified workmen that due to the Government of India's decision to take over

the railway, all workmen's services would terminate on December 31, 1953.

• The notice stated the Government intended to re-employ staff willing to serve under new terms to be notified later; 77% were
re-employed on the same pay scale, 23% on lower scales.

• 24 former employees declined government service.

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• Respondent filed 61 applications for retrenchment compensation for the 24 workmen under Section 25F of the Industrial

Dispute Act.

Held:

• The word "retrenchment" in Section 2(oo) and "retrenched" in Section 25F of the Industrial Dispute Act, 1947, mean the
discharge of surplus labor or staff by the employer for any reason other than disciplinary action.

• Termination of services on bona fide closure of an industry or change of ownership/management does not constitute
retrenchment.

• Referring to Pupraich Sugar Mills Ltd. v. Pipraich Sugar Mills Mazdoor Union and Burn & Co. Calcutta v. Their Employees,
the court observed that the Act's provisions consider an existing, continuing industry and only exclude certain termination
categories from the definition.

• "Retrenchment" does not include the discharge of workmen due to a bona fide closure of an industry.

• The legislature's intention in Section 25F was to simplify and standardize retrenchment compensation based on the length of

service of retrenched workmen.

• There is no retrenchment unless surplus labor is discharged in a continuing industry for reasons other than disciplinary action.

• The court concluded that the termination of services due to bona fide closure or change of ownership does not amount to

retrenchment under Section 2(oo) or Section 25F of the Act. • The appellants were not bound to pay any compensation under

Section 25F(b) of the Act in this context.

16. Punjab Land Development Officer v. Presiding Officer

Facts:

• On November 11, 1953, the Railway Company notified workmen of the termination of their services effective December 31,
1953, due to the Government of India's decision to take over the railway.

• The notice indicated that the Government intended to re-employ staff willing to serve under new terms; 77% of staff were re-

employed on the same pay scale, and 23% on lower scales.

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• 24 former employees declined government service, and the Respondent filed 61 applications for retrenchment compensation
under Section 25F of the Industrial Dispute Act.

Issues:

• Determination of the scope of the meaning of "retrenchment" under Section 2(oo) of the Industrial Dispute Act, 1947.

• Workmen's contention: "Retrenchment" means termination of service for any reason whatsoever other than those expressly
excluded by Section 2(oo).

• Employers' contention: "Retrenchment" means termination of service only by way of surplus labour for any reason

whatsoever.

Held:

• The definition of "retrenchment" in Section 2(oo) means termination by the employer of the service of a workman for any
reason whatsoever other than as a punishment inflicted by way of disciplinary action, and those expressly excluded by the
definition.

• This is a wider literal interpretation, distinguishing from a narrow, natural, and contextual interpretation where termination

would mean discharge of surplus labour. • The definition uses the word "means," indicating a hard and fast definition with no

other meaning assignable to the expression put down in the definition.

• The court concluded that termination due to bona fide closure or change of ownership does not amount to retrenchment under

Section 2(oo) or Section 25F of the Act. • The appellants were not obligated to pay compensation under Section 25F(b) in the

context of termination due to the bona fide closure of the industry or change of ownership.

17. Uptron India Ltd. v. Shammi Bhan & Anr.

Facts:

• Shammi Bhan was appointed as an Operator and, after training, was confirmed as a permanent employee.

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• Took maternity leave from 7.11.1984 to 29.01.1985, and then remained absent from 30.01.1985 to 12.04.1985.

• Petitioner informed her that her services were automatically terminated per clause 17(g) of the Certified Standing Orders.

• She raised an industrial dispute, and the State government referred the case to the Industrial Tribunal.

• The Tribunal held that her termination amounted to "retrenchment" under Section 2(oo) of the Industrial Dispute Act. Due to

non-compliance with legal requirements, it deemed the termination invalid, granting her reinstatement and 50% back wages
from the date of termination until reinstatement.

• The petitioner challenged the award in the Allahabad High Court, which upheld the Tribunal’s findings.

Issues:

• Whether the termination of services due to overstaying leave without permission constitutes "retrenchment" under Section

2(oo) of the Industrial Dispute Act. • Whether clause 17(g) of the Certified Standing Orders provided for automatic termination

due to absence.

Held:

• Mr. Manoj, counsel for the petitioner, argued that the absence of a specific provision in clause 17(g) for automatic termination

due to overstaying leave rendered the Tribunal's and High Court's decisions incorrect.

• He contended that termination due to continued absence does not amount to "retrenchment" as defined in Section 2(oo) of the

Industrial Dispute Act.

• The Industrial Tribunal and the High Court found that the termination did indeed constitute "retrenchment" due to the broad

interpretation of Section 2(oo).

• The courts concluded that the termination was invalid, affirming the Tribunal's decision to reinstate the respondent with 50%

back wages.

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18. Anand Bihari v. RSRTC & Ors.

Facts:

• In this case the Bus driver was terminated on grounds of defective sub-normal eyesight. Issue: Whether this is retrenchment or

not?

Held:

• Ill health in Section 2(oo) to be construed relatively.

• The ill-health must have a bearing on the work done and interferes with orderly functioning. • Even if illness does not affect

general health or capacity but affects one limb or organ and that affected the functioning, it is still an illness

• Termination here was due to subnormal eyesight covered under Section 2(oo)(c) and would not amount to retrenchment.

• Termination is not per se illegal if it does not follow procedure u. Section 25F.

19. Manju Saxena v. UOI

Facts:
• Appellant appointed as Lady Confidential Secretary, later promoted to Senior Confidential Secretary in respondent bank.

• Senior Confidential Secretary post became redundant; alternative positions offered with same pay scale and severance

package, but appellant rejected both offers. • Bank dismissed her on 1st October 2005, paying compensation of six months

instead of notice as per employment contract (Rs. 8,17,071).

• Appellant raised industrial dispute on 3rd October 2005 before Regional Labour Commissioner, seeking increment in

severance package.

• Conciliation proceedings failed to reach a settlement.

• Respondent challenged CGIT's order via writ petition in High Court, which referred the matter back to CGIT to determine if
appellant is considered a workman under the Industrial Dispute Act.

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Held:

• The petitioner voluntarily abandoned her services despite being offered alternative positions and a severance package, thus
not constituting "continuous services" under Section 25F of the Industrial Dispute Act.

• Referring to Hathisingh Manufacturing Ltd. v. Union of India, the bench outlined conditions for retrenchment under Section
25F, emphasizing the importance of continuous service as an essential condition.

20. Orissa Textiles & Steel Ltd. v. State of Orissa

• Held that restriction imposed under Section 25 O for closing are reasonable. • It was also held that merely because the

restrictions are genuine and adequate cannot mean that permission to close must necessarily granted.

• There can be cases where the interest of the public would require that no closure takes place. Undoubtedly where reasons are
genuine and adequate the interest of the public must be of compelling or overriding nature.

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MODULE 5: (EQUAL REMUNERATION AND PAYMENT OF WAGES) THE EQUAL REMUNERATION

ACT, 1976

• Section 2(h): Definition for “Same Work or Work of a Similar Nature” • Section 4: Duty of employer to pay equal

remuneration to men and women workers for same work or work of a similar nature

• Section 5: No discrimination to be made while recruiting men and women workers THE MINIMUM WAGES ACT, 1948
Section 2(h): Definition for “Wages”

Section 3: Fixing of Minimum Rates of Wages

• Piece Rate Pay: workers paid by unit performed. E.g. paid for number of good produced, irrespective of time spent at work.

Frequently used in industries where work is repetitive in nature and has high control over the results, like: plucking fruits,
producing garments or kilometres driven

• Time Rate Pay: Wages paid based on time spent on job, irrespective of amount of work done.

• Guaranteed Time Rate: Wages paid on the basis of time spent on the job irrespective of amount of work done

Section 4: Minimum Rate of Wages

Section 5: Procedure for Fixing and Revising Minimum Wages

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1. People’s Union for Democratic Rights v. UOI

Facts:

• India hosted Asian Games, GoI had to do many construction projects • Engaged contractors as Principal Employers for

execution for projects o Contractors entered into contract w/ Jamadars to be their workmen from different parts of India

• Men paid Rs. 9.25/day and women at Rs. 9/day and children below 14 years were employed. Rs. 1 was deducted from their
salary as commission

• Workmen not given equal wages, and forced to work at feverish places beyond working hours

• Children were dying of malnutrition

• Terrible working conditions were brought to light by a fact finding team of PUDR

Petitioner’s Argument:

• Women not given equal wages contrary to Equal Remuneration Act • Workers not entitled to minimum wages as Rs. 1 was

deducted as commission • Art 24 was violated and Section 3(3) of Employment of Children Act was violated as kids below 14

were employed

• Alleged violation of various provisions of Contract Labour Act which resulted in deprivation and exploitation of workers

Respondents Arguments:

• Not admissible as Art 32, no violations of FR but merely labour laws • Respondents are mis-joined and should be deleted as

violation is caused by private paties not state

• Denied allegation and said when an issue was brought to them against the contractors, they would take appropriate action by

way of prosecution
Issues:

• Whether petitioner organisation is entitled to maintain the petition on behalf of labourers?

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• Whether this petition is maintainable against Union of India, Delhi Administration and Delhi Development Authority when in

actual the offending parties are private contractors? • Whether this petition is maintainable as there is no breach of fundamental

rights of labourers but of ordinary rights under labour laws?

• Whether the Court can pass directions under Article 32 against private contractors?

Held:

• Petitioners had locus standi to bring petition as it was on behalf of poor labourers and was made in good faith. It helps the

poor labourers approach the court to whom legal injury has been caused.

• Workmen were employed by contractors, but GoI had entrusted the Asiad Project to Contractors and cannot escape their
obligation of observance of various labour laws. As the Principal Employer, the authority must provide amenities and
allowances to workmen. Employment to children has violated Art 24 and is enforceable against everyone.

• There is a violation of FR u/ Art 24 due to employment of children and violation of labour law amounts to violation of FR.
Therefore, it was held that non-observance of labour laws by respondents have resulted into violation of FR’s of labourers.

2. Randhir Singh v. UOI

Facts:

• He was a driver constable in Delhi Police Force

• WP filed u/ Art 32.

• Challenged disparity in pay scales scales between drivers in different departments of the government, despite performing

similar duties.

• The pay scale for non-matriculate drivers in the Delhi Police Force was Rs. 210-270, while matriculate drivers received Rs.

225-308.

• In comparison, drivers in the Railway Protection Force had a pay scale of Rs. 260-400 and drivers in non-secretariat offices in

Delhi received Rs. 260-6-326-EB-8-350.

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Issues:

• Whether the principle of “equal pay for equal work” is applicable to the case of drivers in the Delhi Police Force who were

paid lower to drivers in other departments

Petitioner’s Arguments:
• Equal Work, Equal Pay: The petitioner argued that drivers in the Delhi Police Force performed the same functions and

duties as drivers in other departments of the government. • Violation of Constitutional Rights: The disparity in pay scales was

claimed to violate the right to equality under Article 14 and the right to equal opportunity in matters of employment under
Article 16 of the Constitution.

• Directive Principles of State Policy: The petitioner contended that the principle of equal pay for equal work is enshrined in

Article 39(d) of the Constitution as a DPSP

Respondent’s Arguments:

• Different Departments, Different Pay: The respondent, the Union of India, argued that drivers in the Delhi Police Force and
drivers in other departments belonged to different departments with different recruitment criteria and job responsibilities.

• Executive Prerogative: It was argued that the determination of pay scales is a matter for the executive government.

Held:

• Doctrine of “equal pay for equal work” is not an absolute doctrine but one of substance. • Applicable when employees perform

identical or substantially similar work, irrespective of their employment in different departments

• Doctrine of “equal pay for equal work” is deducible from Art 14 and 16 and is a DPSP • Different pay would be justified

based on the classification, such as different qualifications, experience, responsibilities, etc.

3. Mackinnon Mackenzie v. Audrey D’Costa

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Facts:

• The respondent female employee charged her employer with discrimination under the Equal Remuneration Act

• She claimed that she was paid less as a stenographer than male stenographers performing the same work or work of a similar

nature.

Held:

• SC upheld lower court decision supporting respondent’s claims.

• Rejected claim that work of female stenographers were different than men because of a different place of work and level of

confidentiality.

• Rejected claim that the difference in pay was justified under the terms of a settlement between the employer and the
respondent's union.

• Noted that an employer could not deliberately create conditions of work only with the object of driving away women from a
particular type of work that they can otherwise perform with the object of paying them less.
• Union settlements must yield to the provisions of the Equal Remuneration Act.

4. State of A.P v. G. Sreenivasana Rao

Issue:

• Whether payment of less salary to a senior than his junior in the same cadre having the same pay scale is violative of the

principle of ‘equal pay for equal work’

Held:

• Doctrine of ‘equal pay for equal work’ does not mean that all the members of the cadre must receive the same pay packet
irrespective of their seniority, source of recruitment, educational qualifications and various other incidents of service.

• Single-running pay scale is provided for a post in a cadre, the constitutional mandate of equal pay for equal work is satisfied.

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• Ordinarily grant of higher pay to junior would ex-facie be arbitrary but if there are ‘justifiable grounds’ or ‘intelligible
differentia’ then the seniors cannot invoke the equality doctrine.

o Differentia can be on grounds of persons given pay protection, when transferee from another cadre is joined, when senior is
stepped at efficiency bar getting a higher score. Must be based on intelligible differentia and have rational nexus with the object
sought to be achieved and does not violate the mandate of equal pay for equal work.

5. Workmen v. Management of Reptokas Brett

Facts:

• Respondent manufacturers pharma and diabetic specialty products

• Has 3 units: 2 in BOM, 1 in Madras

• Madras factory provides a dearness allowance to workmen, based on cost of living index and basic wage

• DA accepted as basic constituent by company and its workmen. Became basic feature of wage structure and remained

operative in the company for 30 years.

• In the year 1983, a dispute arose between the company and its workmen. The matter was referred to the industrial Tribunal.

Issues:

• whether the Company is entitled to restructure the DA scheme by abolishing the slab system and substituting the same by the
scheme (prejudicial to the workmen) on the ground that the slab system has resulted in over-neutralisation thereby landing the
workmen in the high wage island.

Tribunal: Abolished existing slab system DA and directed DA to be linked to only cost of living index

HC:
• Company and Workmen filed separate WP to Madras HC. Further filed a joint memorandum in 1988 before HC, agreed not

to pursue different WP except on the issue of DA restructuring

• Upheld Tribunals findings, dismissed WPs

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SC:

• Wage structure divided into 3 categories:

o Minimum wage (bare subsistence, poverty line level)

o Fair wage (little above)

o Living wage (comfort level)

• There exists well established norms which broadly distinguish one pay structure from another

• Fair Wages Committee defined “living wage” as “it should enable the male earner to provide for himself and his family not
merely the bare essentials of food, clothing and shelter but a measure of frugal comfort including education for the children,
protection against ill-health, requirements of essential social needs, and a measure of insurance against the more important
misfortunes including old age.”

• Committee view regarding “minimum wage” was “the minimum wage must provide not merely for the bare sustenance
of life but for the preservation of the efficiency of the worker. For this purpose, the minimum wage must also provide for
some measure of education, medical requirements and amenities.”

• Employees are entitled to minimum wage at all times and u/ all circumstances • Employer who cannot pay minimum wage

does not have the right to employ labour and no justification to run the industry

• Living wage has been promised to workers u/ the Socialist Structure of the Constitution • DPSPs also encourage the state to

work for higher wages:

o Art 43: the state shall endeavour to secure, by suitable legislation or economic organization or in any other way, to all
workers, agricultural, industrial or otherwise, work, a living wage, conditions of work ensuring a decent standard of life, and
full enjoyment of leisure and social and cultural opportunities in particular"

o Art 39 reinforces the same

• Company could prove that the DA it pays is higher in comparison to the other similar industries in the region.

• The court said that Mr Nariman reminded us of the limits on supreme court’s jurisdiction under Article 136 of the
Constitution of India and relying upon Shaw Wallace & Co. Ltd. v. Workmen and Statesman Ltd. v. Their Workmen
contended that so long as there is “some basis, some material to validate the award” the “jurisdiction under Article 136

stands repelled”.

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• The apex court finally held that the tribunal was not justified in abolishing the slab system of DA which was operating in the

Company for almost thirty years.

• The Court stated that the Fair Wages Committee understood the term minimum wage is the lowest wage in the scale below

which the efficiency of the worker was likely to be impaired. • Fair wages by comparison were more generous and represented

a wage which lay between the minimum wage and the living wage. The concept of ‘minimum wage’ is no longer the same as it
was in 1936. Even 1957 is way behind.

• A worker's wage is no longer a contract between an employer and an employee. It has the force of collective bargaining under

the labour laws. Each category of the wage structure has to be tested at the anvil of social justice which is the live-fibre of our
society today.

6. Bijay Cotton Mills v. Their Workmen

Facts:

• Workmen asked employer to fix wages that were paid below the level of bare subsistence wage

• Tribunal fixed the wage as per industry-cum-region bases as per other parts of India and a place nearest to the appellant
company

• Appellate tribunal slightly increased wages. Said in the absence of satisfactory evidence on the record, the notification issued
under the Minimum Wages Act affords the best and safest guide.

Held:

• Upheld appellate tribunal change in wages

• Lack of sufficient evidence and so the appellate tribunal could not be said to have committed any error of law in preferring to
rely on the statutory notification rather than on the other unsatisfactory evidence produced in the case.

7. Standard Vacuum refining Co. of India v. Their Workmen

Held:

• Wages are divided into 3 broad categories:

1. Minimum Wage 2. Fair Wage 3. Living Wage