General Introduction INDUSTRIAL JURISPRUDENCE During the twentieth century a new branch of juris at f prudence known as Industrial Jurisprudence has developed in our country Industral jurisprudence, lopment of mainly post-independence period although its birth may be traced back to the industrial revolution. Before independence it existed in a rudimentary form in our : MO ee Renifentiyine bs country. The growth of industrial jurisprudence can Sean snoliced not only from increase in labour and industrial a a also from a large number of industrial law matters decided by e Supreme Court and High Courts. It affects directly a considerable population of our country consisting of industrialists, workmen and their families. Those who are affected indirectly constitute a still larger bulk of the country’s population. This branch of law modified the traditional law relating to master and servant and had cut down the old theory of Iaissez faire based upon the ‘freedom of contract’ in the larger interest of the society because that theory was found wanting for the development of harmonious and amicable relations between the employers and employees. Individual contracts have been in many respects substituted by a standard form of statutory contract through legislation and judicial interpretation. The traditional right of an employer to hire and fire his workmen at his will has been subjected to many restraints. Industrial Tribunals can by their award make a contract which is binding on both the parties creating new right and imposing new obligations arising out of the award. There is no question of the employer agreeing to the new contract, it is binding even though it is unacceptable to him. The creation of new obligations is not by the parties themselves. Either or both of them may be opposed to it, nevertheless it binds them. Thus, the idea of some authority making a contract for the workmen and employer is a strange and novel idea and is foreign to the basic principle of the law of contract.’ Similarly there is change in the concept of master and servant. One who invests capital is no more a master and one who puts in labour is no more a servant. They are employer and employees, the former may hire the latter but he can no more fire them at his will. The interest of the employees is in many respects protected by legislation. Both are now parties in an enterprise, without one yielding to the higher status of another but as co-sharer in the partnership. Even the right of labour participation in the management has been given legislative recognition to the utter despair of the capitalist. Most of the benefits claimed by a workman are not part of his bargain with the employer when. the latter employed him or are not due to them on account of any contract but of ———————— industrial arbitration may involve the extension of an existing agreement or the making of a new one, or in general the creation of new obligations, or modification of old ..." Ludwig Teller, Labour Disputes and Collective Bargaining, Vol. I. p. 536.Labour and Industrial Laws 2 "status". The industrial society all over the world has been movin present century from contract to status’ and this politico-socio-economic juristic status.” What were the factors that lead to this departure from the the law of contract, and the law of Master and Servant ? Industrialisation : India, as in other countries, brought with it some new socio-economic Problem; Those who control the industry have a natural tendency of multiplying ee wealth and if this tendency is not checked the rich grows on richer and the a becomes poorer day by day. The gap between the rich and the Poor ultimately grows on to this extent that it develops into two distinct classes in any industria} society, a few of whom are ‘Haves’ and others are ‘Have-nots’. This economic disparity leads to a struggle between ‘Haves’ and ‘Have-nots’, the latter exploited. Although this situation continues for some time and it had continued to be so in our country too, but gradually the workmen realised that they could put a better fight if they get united. This realisation was closely followed bya period of industrial unrest leading to strikes and lock-outs. In conditions s disturbed the world has witnessed the horrors of the two world wars resulting in spiral rise in the cost of living. With the rise in the cost of living there has been consistent demand from labour for increase in wages. rocratic have also grown simultaneously with the growth of indus country. These democratic ideas have pleaded for and have also helped awakening and consciousness for greater power amongst the worl of the struggle between workers, demanding for better and profit of the industry and the employers’ hesitation | a certain limit, have grown the recognition of certain | considered to be fundamental in almost all developed The basic principles are : - (1) The right of workmen to combine and form a (2) The right of workmen to bargain collectively for their conditions of service. (3) The realisation that economic struggle is inevitable natural that labour would agitate for better conditions. (4) A shift from the doctrine of "Iaissez faire" to a "welfare state” (5) Tripartite consultations ie, solution of the industrial or labour disputes through the participation of workers, employers and Government. go (6) The State can no more be a neutral onlooker bi protector of the social good. (7) Minimum standards must be guaranteed through The concept of industrial jurisprudence in our count after independence. Until independence the government and the benevolent labour legislation only aimed the conditions of labour and it could hardly be said to be a deal to the working class.’ The birth of industrial jurisprudence in i durin; Status 2 a Old theories of 4 “1. According to Sir Henry Maine ‘the human society has hitherto contract’. . Mahesh Chandra, Industrial Jurisprudence (1976), p. 40. st - Mahesh Chandra, Industrial Jurisprudence te es ao enGeneral Introduction 3 be ascribed to the Constitution of India’ which made more articulate and clear the industrial relations philosophy of the Republic of India. This philosophy has afforded the broad and clear guidelines for the development of our industrial jurisprudence and has thus taken India one step forward in her quest for jindustrial harmony.’ The Parliament and the Supreme Court have helped in ||shaping industrial jurisprudence, the former through legislation and the latter as \interpreter of the labour laws. . Industrial jurisprudence is of great importance to all developed or developing countries of the world because it is concerned with the study of Problems relating to human relations arising out of a large scale development of factory system which has emerged in consequence of industrial revolution. Proper regulation of employer-employee relationship is a condition precedent for planned, progressive and purposeful development of any society. As an instrument of social policy in the present day body-politic the role of industrial jurisprudence has still gained importance.’ Industrial workers and their families are directly concerned with it. ~ In spite of its widening scope it cannot be forgotten that its application is limited in certain respects. For example, there are still a vast majority of the people who in their relationship are still governed by the ordinary law of contract based on Iaissez faire doctrine. Industrial jurisprudence is a developing concept. It derives its main strength from social justice which is dynamic and changing. The concept of social justice itself changes with the social, economic and political changes in society. Therefore, it has yet to take its final shape. Industrial jurisprudence cannot, with all its high ideals, displace general jurisprudence just as no amount of social justice can abrogate altogether the concept of legal justice. Even while dispensing social justice the Courts, tribunals and arbitrators, whoever it may be, cannot ignore the law. Therefore, it would be correct to say that industrial jurisprudence is a species of the same genus jurisprudence‘ and industrial jurisprudence in relation to industrial society stands in the same way just as general jurisprudence in relation to the total society.° Labour Policy in India After independence it was largely felt that the labour policy must emphasise upon self-reliance on the part of the workers. Since independence till 1954, the period when V.V. Giri was the Labour Minister, all official pronouncements emphasised that labour should become self-reliant. An equally forceful view had been to prefer reliance upon the Government. This cross-current of approach to the labour policy gave place to a new approach known as "Tripartism". Thus ‘Tripartism’ became the central theme in the so-called "Nanda-period” that began in 1957. During this period the Government paid reliance on three party approach, namely the trade union representing the 1. In this connection the Preamble to the Constitution and Part II and Part IV of the Constitution dealing with Fundamental Rights and the Directive Principles of State Policy respectively need special mention. 2. Report of the National Commission on Labour, (1969), p. 56. 3." Industrial jurisprudence is the comer stone of the fabric of the enti race’. Mahesh Chandra, Industrial Jurisprudence, (1976), p. 49. wig ar a £ Ibid., p. 5. . Samant, Industrial Jurisprudence, p. 4.4 Labour and Industrial Laws workers, the employers, and the Government. In this kind of a representatives do not decide anything but their role is mainly a eran the meet together, discuss the points in dispute and strive to reach a ea They if they agree they make recommendations. Out of the three, the rok Government is more important. Annual Labour Conferences and the a of the standing Labour Committees served as the chief instrument of sicinatiett ane conferences advocated, amongst many things; workers’ participa = management, workers’ education, works committees, and minimum ie in legislations. At the sixteenth conference held in 1958 a momentous advanceme : was made by adopting a Code of Discipline in industry. The Code pledged ae parties to avoid strikes and lock-outs without notice, and to eschew unilaterg) actions, and to rely on settlement of disputes by discussion by volunta arbitration or by adopting to such measures as the law may provide. It alsy pledged them to avoid coercion and victimisation, to avoid partial strikes ang lock-outs, and to follow grievance procedure. « Tripartism is an approach which lays stress on the identity of interests between labour and capital ie., they are the partners in the maintenance of production and the building up of the national economy. The labour policy has proceeded on a realisation that the community as a whole, as well as individual employers are under an obligation to protect the welfare of workers and to secure to them their due share in the gains of economic development.’ This led to enacting of the Payment of Bonus Act, 1965 which aimed at providing for the payment of bonus on the basis of profits or on the basis of production or productivity.” ij fgrtien be The main postulates of labour policy may be summed up as follows? (1) Recognition of the State as the custodian of the interests of the community, as the catalyst of "change" and welfare | pro (2) Recognition of the right of workers to peaceful direct < is denied to them. . (3) Encouragement to mutual settlement, collective b voluntary arbitration. _ (4) Intervention by the State in favour of the weaker party to ensure fair treatment to all concerned. (5) Primacy to Danes of ner Peres ine aes 3 ving partnershij tween. employer emplo: ip) Eee oe to promote the sencmatiag of the economic needs of the community in the best possible manner, (7) Ensuring fair wage standards and provisions of social security. (8) Co-operation for augmenting ‘production’ and cI ‘productivity’. * (9) Adequate enforcement of legislation. (10) Enhancing the status of the worker in industry. (11) Tripartite consultation. 1. See Fourth Five Year Plan—Draft Outline (1966), p. 386. 2. In view of amendment of the Act in Dec. 1977 payment of bonus is mere | production or productivity. (See section 10 of the Bonus Act). 3. Report of the National Commission on Labour, 1969, pp. 29, 30.General Introduction 5 Industrial Revolution of India Industrialisation in India as in any other country implies the growth of a factory system with employers and wage earners in varying circumstances and with varying characteristics, yet having some common features and it is the common features that are of interest.’ As a consequence of the introduction of factory system production became concentrated in a few selected places, resulting in the increase of labour ‘population at all such places. The village workers migrated to the industrial towns because of the difficulty of finding adequate livelihood in their native place. This resulted in disappearance of the popular village handicreft system because they could not compete with machine made goods. The goods produced on a mass scale with the help of machines in the industries were cheaper than the goods produced by handicraft method. But the development of industry in India brought with it a great evil inasmuch as it changed the status of a craftsman into wage-earner. Therefore, the craftsmen had to migrate from village to industrial cities in search of employment in: factories. Evils of Industrialisation The factory system had some inherent evils to which the factory workers were exposed in the beginning. These may be divided into two heads, namely, economic and social. Economic Evils (1) The artisan who in the handicraft system had the psychological satisfaction of producing the goods himself became in the factory system only a tender of the machine. He had to produce the goods with the help of tools and raw materials supplied by his employer and in the workshop of the employer. In the factory system of production only a part of goods were produced by a certain category of workers. Different categories of workers produced different parts of the same goods. Thus, the goods came in the final shape by the composite labour of many categories of workers. The workman in this system, did not get full psychological satisfaction of manufacturing a product by himself and this indirectly arrested his mental development and creative talents. (2) The wages paid to factory workers were quite inadequate to meet their barest needs in the new environment which was different from their rural life. (3) The employment of factory workers was not secure in the beginning. They had to suffer occasionally from periodic unemployment and under-employment as a consequence of over-production or trade cycles. A worker could be discharged by his employer at any time without assigning any reasons eee Social Evils (1) The factories were sick not only of economic evils but also of social evils. Overcrowded cities with insanitary slums, and acute housing, shortage because of large scale migration of village population to industrial towns had its natural effect on health, morality and social life of workers. (2) Work in factories was very hazardous and strenuous with long hours 1. Indian Law Institute : Labour Law and Labour Relations, p. 6. 2. VV. Giri, Labour Problems in Indian Industry, p. 115.6 Labour and Industrial Laws duty, no rest, and no facility for recreation. Machines w factory owner who had little regard for the safety and eee ee of by (3) Workers were exposed to serious accidents because mache ee properly screened. Accidents were considered as normal risk i pes employment in a factory and the worker who was unfortunate ae io accident lost his employment and had no right to compensation. oy (4) The wages paid to the workers were very low. W: source of their income. The workers found it extreinell dicate Beh wages so earned by them. Therefore, they had to find out ways and ae te supplement their earnings. Consequently the wives and children of wore started seeking employment. The factory owners exploited this situation = employed them in large numbers at extremely low wages without any re; a to their physical conditions. a The workers found it difficult to adjust with these conditions. These eviy of industrialisation and the lack of adjustment and harmonious relationship between the employer and the labours created problems in the industry, which we call labour problems. Labour Problems Labour problems constituted a serious menace to the society, and needed solution, if not to eradicate then at least to mitigate them in the very beginning. Employers paid their sole attention to the maintenance of machines and the improvement of the technical know how to the utter neglect of the human hands employed to man the machines because they were readily available and could be easily replaced.’ Workers were illiterate and poor and therefore unconscious of their rights. The socio-economic status of the workers was far below the status of their employer. As such they could not exercise their free will in negotiating with the employer for employment. The employer taking advantage of the poor condition of the workers dictated their own terms and conditions with regard to wages, hours of work, leave, etc. The workers were left with no choice but to accept such terms because service was the sole means of earning their livelihood. : Neither the Government nor the law courts took special notice of these problems because they laid too much emphasis on the policy of the d freedom of contract. Thus, with the lapse of time the d the society became so much adversely led to take some action to remedy non-interference an situation turned out to be so worse an affected that the Government was compe! these problems. Ultimately some p! Social Service League an hilanthropic agencies like Servants of India Society, d some industrial social workers raised their voice against these problems. They were successful in mobilising the public opinion in support of their view point. Workers also started to form their own organisation to fight against exploitation at the hands of industrialists. In the beginning the effort of the workers was not very successful because of their weak bargaining power and lack of resources on which they could rely for their livelihood in the absence of wages. Some employers also realised the seriousness of the problem and the. Paes ee 1. V.V. Giri, Labour Problems in Indian Industry, p. 115.General Introduction 7 necessity of mitigating these evils for they affected the production of the industry, they felt that investment on labour welfare was a policy worth pursuing because a contended worker would produce better yields and would increase the efficiency. The Government too later on realised the gravity of the problem and could not remain a spectator for the workers constituted a large section of the society. Moreover, the government had to intervene to settle the disputes in the interest of national economy and the welfare of the society at large.' If some key industry is thrown out of gear, the whole system is paralysed. Frequent break downs of even a part of the economic system tend to impoverish the community. The prevention of industrial strife thus assumes an important role in national policy and the State, therefore, cannot afford to remain indifferent to the problems leading to industrial conflict. After independence the national government paid much atterition to the improvement of the conditions of labour in industry, for the prosperity of a country depends upon the development and growth of industry. No industry can flourish unless there is industrial peace and co-operation.” Industrial peace is possible only with the co-operation of labour and capital. To ensure better co-operation the wage earner who is a partner in the production should be allowed to have his due share of the profit for increased production. Therefore, we have to shape our economic policy in such a manner as to give labourer his due status by offering him reasonable working conditions and due share in production. That means social justice and social security has to be restored to the labourer. Our Constitution guarantees social justice to the people of India. Social justice means achievement of socio-economic objectives. Labour legislation is one of the most progressive and dynamic instruments for achieving socio-economic progress. "There is no other branch of law which embraces such a wide and effective role in social engineering and social action. It is here that the industrial law distinguishes itself from other branches of law and awaits the development of wholly different jurisprudence to explain and expound it"? Industrial Peace and Industrial Harmony “Industrial Peace" and "Industrial Harmony” may have the same meaning but the concept of industrial peace is somewhat negative and restrictive. It emphasises absence of strife and struggle. The concept of industrial harmony is Positive and comprehensive and it postulates the existence of understanding, co-operation and a sense of partnership between the employers and employees. A quest for industrial harmony is indispensable for economic progress of the country. Economic progress is bound ‘up with both industrial harmony and industrial peace. Industrial harmony leads to more co-operation between employees and em} ployers which results in more productivity. It is founded on healthy industrial relations. Healthy industrial relations cannot, therefore, be regarded as a matter in which only the employers and employees are concerned; it is of vital significance to the community as a whole. Therefore, industrial -V. Giri, Labour Problems in Indian Industry, p. 119. 2. GM. Kothari, A Study of Industrial Law, p. 38. 3. Ibid., p. 39.8 Labour and Industrial Laws harmony involves the co-operation of employees and the community at large Industrial Relations An industry is a social world in miniture2 Industries help in producti and provide employment to the people of society. Different categories of hues elements are involved in an industry. The relations of these groups pies constitute the subject matter of industrial law. Industrial relations play a via part in the establishment and maintenance of industrial democracy. Th economic activity is the central field of industrial relations. The economic eye of any nation affects the industrial relations, which in turn affects the social order. A man has to struggle with his environment for earning his bread ang satisfaction of his material wants. Industrial revolutions are nothing more than the struggle of men for their material satisfaction. The industrial revolutions create an imbalance in the society as they prejudicially affect the rights and interests of those sections who work in such industries but do not control it. It results in inequitable distribution of wealth because means of production are controlled by the dominant section of the society, who exploit the labour to their own maximum benefit. It is because of these far reaching consequences of the imbalance and disorder in industrial relations and because of the fact that it affects such a large and varied complex of group relationship that it was soon realised that the very existence of the State as protector of the community and as arbitrator of conflicting interests may be jeopardised if it was not to intervene in industrial matters to maintain social morality which was necessary for a healthy social order.* Economic progress is also bound up with industrial peace. Industrial relations are, therefore, not a matter between employers and employees alone, but a vital concern of the community which may be expressed in measures for the protection of its larger interest.* State intervention is also justified to prevent exploitation of the weaker section of the society by the stronger section. Industry owners are not the only party to be blamed for the industrial disorder, but the State whose duty it is to establish a just social order is equally to be blamed. Social justice requires that the State for its own existence owes an obligation to the community to bridge the gap between the two classes and evolve a healthy social order. It is from this fountain of social justice that the necessity of legal regulation of industrial relations has flown. The scope of governmental legal regulation of the industrial relations depends upon the socio-economic objective that State seeks to attain and these would be reflected in the socio-economic planning and national labour policy.® It is further conditioned by the degree of the existing social imbalance which needs social re-adjustment and the conceived picture of ideals which feed the programme of social justice in the given socio-economic situation.’ We in our country are mainly embarking upon industrial and technological advancement. But mere technological advance will widen the social imbalance. Advancement of . Peace in industry has a great significance as a force for world peace if we consider wider implication of the question. See First Five Year Plan, p. 572. G.M. Kothari, A Study of Industrial Law, p. 1. . Ibid., pp. 2-3. . First Five Year Plan, p. 572. GM. Kothari, A Study of Industrial Law, p. 3. WAODdGeneral Introduction 9 knowledge of social science is necessary for reshaping social relationship. Therefore, the State must endeavour to promote studies and researches in sciences which will help in reshaping social relationship in accordance with the principles of social justice and socio-economic objectives. Principles of Labour Legislation Labour legislation in any country should be based on the principles of social justice, social equity, international uniformity and national economy. Social justice —Social justice implies two things. First equitable distribution of profits and other benefits of industry between industry owner and workers. Secondly, providing protection to the workers against harmful effects to their health, safety and morality. In the beginning, the position of a worker was that of a daily wage-earner, which means he was paid only for the days he actually worked. A workman was expected to accept all the hazards connected with his work as incidental to his employment. Until the passing of Workmen’s Compensation Act, 1923 no compensation was paid in case of an accident taking place in the course of employment. But the Workmen's Compensation Act, 1923 guarantees to workmen compensation for any injury caused by an accident arising out of and in the course of employment. The Minimum Wages Act, the Factories Act and the Payment of Wages Act are a few other legislations based on the principle of social justice. These legislations fix the hours of work, make provision for payment of over-time, leave rules, safety, health and welfare of labour in industry. Labour welfare in our country has a special significance for our Constitution provides for the promotion of welfare of people, for humane conditions of work and securing to all workers full employment of leisure and social and cultural opportunities.’ The word ‘social justice’ is neither defined in any of the labour legislations nor does it occur in any of them except the Industrial Disputes Act, 1947.7 The concept of social justice, according to Bhagwati, J., does not emanate from the fanciful notions of any particular adjudication but must be founded on a more solid foundation. In the opinion of Justice Gajendragadkar : "The concept of social and economic justice is a living concept of revolutionary import, it gives sustenance to the rule of law and meaning and significance to the idea of welfare State".* The Indian Constitution enshrines the concept of social justice as one of the objectives of the State. Article 38 of the Constitution provides that "the State shall strive to promote the welfare of the people by securing and protecting as effectively as it may, social order in which justice, social, economic and political, shall inform all the institutions of the national life’. Article 39 ordains that it shall be the duty of the State to apply certain principles of social justice in making laws. Social justice is justice according to social interest. So far as the application of the doctrine of social justice in the sphere of adjudication is concerned, it is subordinate to the fundamental rights and law contained in the Constitution. Secondly, it is also subservient to the statutory Industrial law. Thirdly, social 1. V.V. Giri, Industrial Relations. 2. When the Industrial Disputes Act, 1947 was amended in 1956, Section 17-A(1) uses the words ‘social justice’. 3. Muir Mills Ltd. v. Suti Mill Mazdoor Union, (1955) 1 LLJ 1 (SC). - State of Mysore v. Workers of Gold Mines, AIR 1958 SC 923.10 Labour and Industrial Laws justice cannot be done in disregard of law laid down by the Supreme Court, Social justice does not mean doing everything for the welfare of labour to the utter disregard of the employer. The balance of social justice leans neither Side! The labour policy of a country should, in the national interest, prevail over the rival economic policies in cases of conflicts.” "Social justice" is designed to undo the injustice of unequal birth ang opportunity, to make it possible that wealth should be distributed as equally as possible and to provide that men shall have the material things of life should be guaranteed to each man. President Roosevelt has rightly said that "there are some whose adverse circumstances made them unable to obtain the mere necessities of existence without the aid of others. To these less fortunate men and women, afd must be given by government not as a measure of charity but as social duty". This duty is to be performed by the society through the State, Social justice, therefore, is dealing equitably and fairly not between individuak but between classes of society; the rich and the poor. The concept of social justice has become an integral part of industrial law, It is founded on the basic idea of socio-economic equality and its aim is to assist the removal of socio-economic disparities and inequalities. The Constitution of India has also affirmed social and economic justice to all its citizens. Although a number of legislation have been passed with that end in view but still some more important measures need to be taken. Provisions relating to fundamental rights and directive principles of State policy provide sufficient guarantee against exploitation. Social justice has thus been made object of State policy and governmental action. Social justice though not defined in our Constitution, means attainment of the socio-economic objectives by removing existing evils and enacting new legislation to achieve these objectives. The concept of social justice is not narrow or limited to a particular branch of legislation or adjudication although it is more prominent and conspicuous in industrial legislation and adjudication. Its sweep is comprehensive and is founded on the basic ideal of socio-economic equality and it aims at assistin; the removal of socio-economic disparities and inequalities of birth and status and endeavours to resolve the competing claims especially between employers and workers by finding a just, fair and equitable solution to their human relation’s problem so that peace, harmony and co-operation of the highest order prevails amongst them which may further the growth and progress of nations? Social justice is different from legal justice. The difference is not of objective but aim at dispensing justice. The difference is due to two reasons : (i) Social justice aims at doing justice between classes of society, and not between indvidual, (ii) the method which it adopts is unorthodox compared to the methods of municipal law. Justice dispensed according to the law of Master and Servant, based upon the principle of absolute freedom of contract and the doctrine of Iaissez faire, is legal justice. Social justice is something more than mere justice, it is a philosophy super-imposed upon the legal systems. Social equity.—Any legislation which is based on social justice prescribes Punjab National Bank Ltd. v. P.N.B. Employees Federation, AIR 1960 SC 160, . G.L. Kothari, Labour Law and Practice in India, p. 15. . Mahesh Chandra, Industrial Jurisprudence (1976), p. 47. - Industrial Labour in India, p. IX., V.B. Singh Ed., 1963, Quoted in Labour Law and Labour Relations ILI p. 9. RENEGeneral Introduction 11 a definite standard for adoption in future. Such standard is fixed after taking into account the past and present circumstances. Once a standard is.so fixed by legislation it remains in force until it is changed or modified by another legislation passed in conformity with the legislative procedure. No discretion is given to change such law to the authority administering such law. However, where it is felt that the law should be flexible and should be changed as the circumstances and conditions change, the law empowers the Government to make such changes. This is generally done by giving the Government rule making power under the provisions of the Act. When power under the Act is given to the Government the rules may be modified to suit the changed conditions. Such legislation is said to be based on social equity. Social Security The mutual conflict between the employer and the employees over the question of adequacy of their respective shares in social produce, constitutes the crux of the labour problem, of which collective bargaining and industrial conflict are the two most important aspects. As industrialisation advances the worker is increasingly alienated from his previous socio-cultural world and thus faces various insecurities with regard to income and employment in addition to the natural ones (i.e., sickness, maternity and old age) for which the new order does not have structural provision. This is how the problem of social security arises and revolution has meant urbanisation. In ancient times if a person was unable to work on a particular day, he was cared for by the village community or by the members of his family. But now urbanisation has so deeply uprooted these values that in times of sickness, unemployment, old age and other similar contingencies a worker has nothing to fall back upon. In modern times social security is influencing both social and economic policy. Social security is the security that the State furnishes against the risks which an individual of small means cannot, today, stand up to by himself even in private combination with his fellows." The quest for social security and freedom from want and distress has been the consistent urge of man through the ages. This urge has assumed several forms according to the needs of the people and their level of social consciousness, the advancement of technology and the peace of economic development. "Social security envisages that the members of a community shall be protected by collective action against social risks causing undue hardship and privation to individuals whose private resources can seldom be adequate to meet them. It covers through an appropriate organisation, certain risks to which a person is exposed".’ "These risks are such that an individual of small means cannot effectively provide for them by his own ability or foresight alone or even in private combination with his colleagues”. _ The concept of social security is based on ideals of human dignity and social justice. The underlying idea behind social security measures is that a citizen who has contributed or is likely to contribute to his country’s welfare 1. V.V. Giri, Labour Problems in Indian Industry, p. 247. 2. Report of the National Commission on Labour, 1969, p. 162. 3. Report of the National Commission on Labour, 1969, p. 162. 4. LL.O., Approaches to Social Security, 1942, p. 80, quoted i Report National Commission on Labour (1969), p. id. oki i nn ad2 Labour and Industrial Laws should be given protection against certain hazards.’ Social security means a guarantee provided by the sj appropriate agencies, against certain tisks to which ey cement oes its may be exposed. Social assistance scheme provides benefit for persons ¢ os means granted as of right in amount sufficient to meet a minimum st of small need and financed from taxation, and social insurance scheme provid, fandard of for persons of small earnings granted as of right in amounts which Gane contributory effort of the insured with subsidies from the employer ae State? Jerenaittg Social security measures are significant from two view points : First, the constitute an important step towards the goal of a welfare State. Secondl ‘ the enable workers to become more efficient and thus reduce wastage aitsins Go industrial disputes. Lack of social security impedes production and eee formation of a stable and efficient labour force. Therefore, social securit measures are not a burden but a wise investment which yields good dividends? According to the report of the National Commission on labour "social security has become a fact of life and these measures have introduced an element of stability and protection in the midst of the stresses and strains of modem life. It is a major aspect of public policy today and the extent of its prevalence is a measure of the progress made by a country towards the idea of a welfare State. It is an incentive for development, substituting as it does hope for fear in the process improving the efficiency of the working force". Freedom from want and security against economic fear is the minimum that has to be secured to its people in the country. Its importance has been expressed by the Universal Declaration of Human Rights in the following words : "Every one as a member of the society has the right to social security and is entitled to realisation through national efforts and international co-operation and in accordance with the organisation and resources of each state of economic, social and cultural rights indispensable for his dignity and the free development of his personality’.* "Every one has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services and the right to security in the event of unemployment, sickness, disability, widowhood, old age, or other lack of livelihood, or circumstances beyond. his control.’ The role of International Labour Organisation in certain standards of social insurance has been significant. The Social Security (Minimum Standards) Convention adopted in 1952 embodies universally accepted basic principles and common standards of social security. The application of these principles has guarded developments of this field throughout the world. pa TIL.O., Approaches to Social Security, 1942, p. 80, quoted in Report of the National Commission on Labour (1969), p. 162. Approaches to Social Security, I.L.O. Montreal, pp. 80-81. V.V. Giri, Labour Problems in Indian Industry, p. 248. Art. 22 of the Universal Declaration of Human Rights. ‘Art. 25 of the Universal Declaration of Human Rights. Report of the National Commission on Labour, (1969), p. 162. auayeNGeneral Introduction 13 In our country, a number of social security legislations have been enacted from time to time. The earliest of such legislation is the Workmen’s Compensation Act which ensures payment of compensation in case of a personal injury caused by an accident arising out of and in the course of employment. Maternity Benefit Acts have also been passed by the Parliament and also in different States. In U.P. it was passed in 1962. This Act primarily provides for maternity leave to woman workers. The Employees’ Provident Fund and Family Pension Fund and Deposit-Linked Insurance Fund Act, 1952 provides for retirement benefits. The Industrial Disputes Act ensures tetrenchment and lay-off benefits. The most important of all legislations is the Employees’ State Insurance Act, 1948 which provides for medical, sickness, dependant, disablement and maternity benefits. Growth of Labour Legislation in India Labour legislation in India grew with the growth of industry. In the eighteenth century India was not only a great agricultural country but a great manufacturing country too. Asian and European markets were mainly fed by the looms supplied by India. But the British Government in India as a matter of policy discouraged Indian manufacturers in order to encourage the rising manufacturers of England. Their policy was to make India subservient to the industries of Great Britain and to make Indian people grow only raw materials.’ The British oppression in India continued for a considerable time which led to the growth of Indian nationalism and to a vigorous renaissance. Nationalism has an obvious economic aspect which in our country was reflected in the urge for economic reforms and for industrialisation® In the twentieth century the national movement took a new turn and there was a common demand for the Indian goods. A non-co-operation movement which is known as swadeshi movement was started which urged upon the people to use goods made in India and to boycott foreign goods. The non-co-operation movement synchronised with periods of economic crisis gave impetus to industrialisation. Not only that, growth of Indian private sector owes much to these popular movements. No doubt, the Indian Economists, drew their inspiration from British classical Economists but they outgrew those ideas. Like British Economists, Indian Economists not only advocated that the trade and commerce should be free but they laid emphasis on the free trade of local goods. An attempt was made to put forward a theory of economic development and planning suited to conditions of our country. After thirties planning was accepted by the national movement as its economic ideology. Thus, planned industrialisation became our main goal. In India, the plantation industry in Assam was the first to attract legislative control. The method of recruitment of workers in this industry was full of hardships. Workers were employed through professional recruiters. Workers were not allowed by the planters to leave the tea gardens. A number of Acts were passed from 1863 onwards to regulate the recruitments. These legislations protected more the interests of the employers than safeguarding the interest of the workers. The Factories Act was passed in 1881 and the Mines Act in 1901. 1. R, Dutt, Economic History of India Under Early British Rule VIILX, (1 2. Indian Law Institute, Labour Law and Labour Relations, p. §. 3. Indian Law Institute, Labour Law and Labour Relations, at p. 6.Labour and Industrial Laws 14 i f such Acts as were passed to protect the int Bute aes SS eee Compensation Act, 1923. Some other ee of helvon er iesalitiina are : the Employees’ State Insurance Act, 194g ih Sa rae Provident Funds Act, 1952! and the Maternity Benefit Act, 1961 ee also made to regulate the labour management telations, Sons 4 ae are : the Industrial Disputes Act, 1947, the Trade Unions Act, 1926 and the Industrial Employment (Standing Orders) Act, 1946. Labour legislation, ensuring labour welfare and minimum standards were also enacted. Some of them are : the Factories Act, 1948, the Minimum Wages Act, 1948, the Payment of Wages Act, 1936 and the Payment of Bonus Act, 1965. In India, a number of labour legislations have been enacted to Promote the condition of the labour keeping in view the development of industry and national economy. But for industrial regeneration it is Mecessary that partners of the industry must cure their respective defects. Since indepen both legislation and public opinion have done a lot to better the condition of the workers but unfortunately the employers have not responded very appreciably, It is high time that the employers must realise that it is their Privilege as citizen of a democratic country to relinquish their acquisitive tendencies of the past and set a new ideal for the future of the country. At the same time it is the duty of the workers and their organisations to improve the work-effeciency and help in securing better production resulting in greater profits and Prosperity of the industry to be ultimately shared by the management, workers and the community at large. The employers should concede to workers a representative voice in the control of the industrial system. "Workers are the dominant partners in the industrial undertakings and without their co-operation and good work, discipline, integrity and character, the industry will not be able to produce effective results or profits. However efficient the machine touch in any industry may be, if the human element refuses to co-operate, the industry will fail to run. Therefore, the profit of the industry must be shared between employers, workers and the community; the workers having a dominant share, being the producers of wealth". The Government and the factory owners must fully understand the labour psychology and a change in their outlook and attitude is desired to secure the industrial peace. Nothing should be done under threat or coercion but on a clear understanding that whatever is good and is due to the labour must be given. Industry owners should treat the workers as co-partners. Similarly, "workers in the country must understand fully that if they desire to secure their due place in the industrial economy of the country they must think more in terms of responsibilities and duties and not interpret independence for impertinence and liberty for licence. Sabotage and violence of all kinds and bitterness in thought, word and deed must be eschewed. Then alone a Socialist Democracy is possible in this country and industrial relations of a higher order can be maintained for the benefit of the country and the community”? 1. This Act, as enacted in 1952, made provision for Provident Fund only but now this Act — provides for family pension funds and deposit linked insurance fund also. 2. V.V. Giri, Industrial Relations, p. 27. 3. V.V. Giri, Industrial Relations, p. 28.General Introduction 5 f Industrial Adjudication Social and economic justice is ulti i i ease oe is ultimate ideal of industrial adjudication’ and directives pring Ese: ae Ps of social welfare, common good and the functlonscaeaniteel eee enshrined in the Constitution.? The essential ae : i ij ication is to assist the State by helping a solution of industrial disputes. Therefore, it has broadly to go by th ial fe policy followed by the State. ee ee ee ere The twin objectives of any industrial adjudicati i i economic justice. The foie implies raoaueaed igeease ace! a goodwill in industry so as to establish harmony between labour a cal ital Industrial harmony helps in boosting production which would help in real economic progress of the community and strengthen national economy. The latter implies that restoration of industrial peace and goodwill should be on a fair and just basis.* Injustice, social or economic, is bound to result in exploitation of labour, inequality of incomes, concentration of wealth in a few hands capitalism and class conflict. _ Democratic socialism is the cherished goal of our nation. The acceptance of socialism necessarily adopts a social planning which will subserve the interest of society as against individuals or vested classes. All national institutions must have their base on the tenets of socialism. Social philosophy of the age must also be considered. The concept of welfare State has thrown the doctrine of laissez faire in background. The theory of ‘hire and fire’ as well as the theory of ‘supply and demand’, which were allowed free scope under the doctrine of laissez faire, are no longer in practice now. In settling industrial issues the question of propriety and impropriety, fairness and unfairness are taken into account. "As the social conscience of the general community becomes more alive, and active, as the welfare policy of the State takes a more dynamic form, as the national economy progress from stage to stage and as under the growing strength of trade union movement collective ial issues cease to be purely arithmetical bargaining enters the field, industri: problems. Consideration of the financial position of the employer and the state and the requirements of a workman living of national economy have their say, ; an : in a civilised and progressive society also come to be recognised. It is in this sense, and no doubt to a limited extent, that the social philosophy of the age the decision of industrial disputes’. supplies the background for : Industrial adjudication must also promote and assist the national economy. Therefore, it becomes necessary that no award should run counter to the labour olicy in a planned economy. With that end in view formulation of a rational Jabour policy becomes most important. A national labour policy must aim at achieving maximum economic welfare, which requires that (i) the national income shall be maximised, (ii) it shall be divided equally among all the members of the economy,’ and (iii) it shall be stable in the sense of being free Oe ~ Crown Aluminium Works v. Their Workmen, AIR 1958 SC 30. State of Mysore Vv. Workers of Gold Mines, AIR 1958 SC 923. State of Bombay v. Hospital Mazdoor Sabha, AIR 1960 SC 610. eam Aluminium Works v. Their Workmen, AIR 1958 SC 30. ur Demands and their Adjudication, Vol. 1 (1972), p. 132. Kothari G.M. Labo 1 the ‘There is some controversy about this view, although the correctness of this view does not affect the validity of the objective. eas poet16 Labour and Industrial Laws ® from violent fluctuations. The foll adjudication : Nishi (1) Public interest.—Since industrial adjudication aims at pn social and economic justice and social and economic justice rests on eae . interest of society as a whole, therefore, industrial adjudication muse te sub-serve the public interest. However, Public interest is not defineg t aleg industrial law. Public interest are claims or demands or desires involved 5 ‘ in a politically organised society asserted in title of that organisation! in lig (2) Industrial harmony and goodwill—Whatever be the 5 economy, stress in invariably laid on increased Productivity, where: Of the hopes of increased national wealth. Interest lowing are some of the guiding Principles of ing Peace is not merely a negati ative but also a positive concept. adjudication, therefore, must bear this conside: x Indus, | ration in solving industrial issues! For industrial peace, acceptance of trade unionism is neces: advocated even of acceptance of labour organisations as part system of representative government in the sphere of industrial relations. (3) Development of industrial justice—Lasting peace in any industry is possible only when an attempt is made to eliminate the real causes of conflict, Therefore, restoration of peace with justice is necessary. Both social and economic justice are essential for obtaining whole hearted co-operation of labour in the task of production. For labour 0-0] gains is necessary. | The principle of equali eration equitable distribution of the ty should also be taken into consideration. Social justice requires equal work and equal pay for men and women and equality of opportunity, etc. Equality in economic order is said to be an indispensable part of social justice because it is equality in economic life that sets the process of Social inequality, political weakness and evolution of community with superior and inferior classes.‘ Justice requires acceptance of the Principle of equality. Justice also lies in adjustment of rival claims in a fair and just manner. In the case of industrial adjudication the claims for the employer based on the freedom of contract have to be adjusted with the claims of industrial employees for social justice. The task of making a reasonable adjustment, is not Es easy, and so, in reaching conclusions in such a matter it is essential not to oo more than is necessary. If industrial adjudication purports to lay down ba general principles it is likely to make its approach in future cases inflexible ts that must always be avoided.’ In State of Mysore v. Workers of Gold Mines* od Supreme Court also observed that : "In its attempt to do social justice indus! “1. Rosese Pound, Outlines of Lectures on Jurisprudence, p. 49. . - Kothari, G.M., Labour Demands And Their Adjudication (1972), p. 136. a Mill Mazdoor Sabha v. Swastik Textiles Ltd. (1965) 11 BIR 236 (fT). z - Kothari, G.M., Labour Demands and Their Adjudication (1972), p. 140. 2 Ibid. ; AIR 1958 SC 923. aAuPenrGeneral Introduction 7 tion has to adjust rival claims of the employer and his workmen in a just manner and this object can best be achieved by dealing with each circumstances". Tribunal has before it a matter which requires expert assistance in collecting and assessing the appropriate material as to technical matters, the Tribunal, should avail itself of such assistance. The ultimate decision would, no doubt, rest with the Tribunal, but since the decision has to be based on proper material, the Tribunal must not deny to itself opportunity of expert assistance in obtaining and assessing the appropriate material." (5) Socio-economic effects.—While it is true that the industrial tribunals that they should have are not social or economic legislatures, it does not mean no concern with the social and economic effects of the awards.’ If any decision is made without taking into consideration its socio-economic effects it may have upon industry or community, it may lose much of its validity. (6) Reference to facts and circumstances of each case.—In industrial adjudication laying down of inflexible general rules must be avoided. The more proper approach is to bear in mind all the relevant factss which govern the case and the decision of a question must depend upon the evaluation of all such factors. (7) Tribunals to act in a judicial manner—The Tribunals must act in a judicial manner. It must ensure that all material evidence is brought to its notice and every opportunity is given to test that evidence by effective cross-examination. It must also consider the evidence produced before it objectively and must reach its final conclusions in a judicial manner.* (8) Expediency is no consideration.—It is very often impossible to arrive at just settlement of a dispute which satisfies either all or even one of the parties to the dispute. In the true award making there is no place to expediencey or opportunities, disputes must be determined regardless of any dissatisfaction that may occur to an unsuccessful party.° (9) Acceptability of decisions—It is the duty of an arbitrator or adjudicator to make an award which may be acceptable to both the parties to be workable. He must aim at a possible compromise. He has also to keep in mind that a decision is useless if it cannot be enforced and that the power and ability of the respective parties to administer a decision successfully is an integral part of the decision. However, if acceptable decision cannot be secured, the arbitrator or adjudicator owes a duty to give his award. To sum up it may be said that in dealing with industrial dispute, the tribunals should not be unduly influenced by academic questions of law. They should as far as possible, deal with the merits of each case according to its facts and circumstances.° adjudica' fair and problem as it arises on its own facts and (4) Expert assistance.—Whenever a ~ National Tron & Steel Co. Ltd. v. Their Workmen, AIR 1963 SC 325 + Queen v. Kely & Or. Ex pare, Ausra Ry. Union, 953) 89 CLR 472. Anakapall ative Agri jal Soci 1 dna o-operative Agricultural and Industrial Society v. Its Workmen, AIR 1963 SC }. Associated Cement Companies Lid. v. Their Workmen, . Industrial Conciliation and Arbitration, Orwell De R, "hetaeetd ee Kays Construction Co. (Pu) v. Its Workmen, AIR 1959 SC 208° °° eye ausLabour and Industrial Laws. t 18 (10) Natural Justice—It was held in State of Uttaranchal and Sunil Kumar Singh Negi, that right to reason is an indisputable Part judicial system, that is reasons at least sufficient to indicate an applicatior, mind to the matter before Court must be given. Another rationale is that of affected party can know why the decision has gone against him. One of the statutory requirements of natural justice is spelling out reasons for the made. The absence of reasons in rendering the order by the High Court, the order unsustainable. Disciplinary proceedings.—In UCO Bank and others v. Sushil Kumar Sahg’2 irregularities were committed by respondent employee while working at branch office of UCO Bank. Later respondent was transferred to Head Office under jurisdiction of Deputy Manager. Disciplinary proceedings were initiated by Assistant General Manager. The question was whether power was conferred on A.GM. to act as disciplinary authority. In this case appellant Bank is circular dated 11 August, 2004 for speedy and expeditious disposal o disciplinary cases. It was held that A.G.M. is justified in initiating disciplinary proceedings which is in accordance with the decision dated August 3, 2004 as well as the circular dated August 11, 2004. The note dated August 3, 2004 which © was approved by C.M.D. in exercise of the powers conferred on him under / Regulation 5(1) is statutory in nature. Regulation 5 specifically empowers the Managing Director or the Executive Director or any other authority empowered - by either of them by general or special order may institute or direct disciplinary authority to institute the disciplinary proceedings. Further note 2 to the schedule also stipulates that the powers of the specified authorities may be exercised by any other authority nominated by the Executive C/CMD which is equal in rank or higher than the authority specified therein. The reasons for entrusting the task of initiating disciplinary proceedings on the disciplinary authority of the erstwhile place of posting is that the new disciplinary authority might not be aware of the nature and extent of irregularities allegedly committed by the employee in his earlier place of posting since the relevant records, documents etc. are kept in the old place of posting. The Bank in its wisdom felt that such a course will expedite disposal of the that such a cours will expedite disposal of the disciplinary cases within the stipulated time frame. This court is not expected to sit in judgment over wisdom of the Bank in taking such a decision which is to expedite the disciplinary Proceedings. 5 Consequently the A.G.M. who had the disciplinary control over respondent while he was working at the Branch Office has got jurisdicti conduct an enquiry with regard to the irregularities committed by respondent while he was working as the Senior Manager at the Branch Office the Bank from November 15, 2001 to August 13, 2005 a It was therefore held that the High Court has taken narrow view interpreting Regulation 1976, the note dated August 3, 2004, circular dai August 11, 2004 read! with Regulation 5(1). Omitting to note its purpose object, that is speedy and expeditious disposal of cases with tegard to. disciplinary proceedings against erring officials, the High Court has comm an error in quashing the note as well as the circular. Another Of a sous Orde; Makes een Oe ie 1. 2008 II LLY 874 (6G, 2. 2012 IV LLI $93 (Sc,General Introduction 19 In facts and circumstances of the case the Supreme Court was of the view that the Division Bench of the High Court has committed error in quashing proceedings initiated by the AGM. (Disciplinary Authority) and the punishment imposed. Thus the appeal was allowed. cay ¥