Labour Disputes & Settlement

Industrial Disputes Act 1947

Industrial Disputes Act, 1947 is the Act that regulates the labour laws as it concerns all the
workmen or all the people employed on the Indian mainland. It came into force on 1 April
1947. The capitalists or the employer and the workers always had a difference of opinion and
thus, it leads to lots of conflicts among and within both of these groups. So, these issues were
brought to the attention of the government and so they decided to pass this Act. This Act was
formed with the main objective of bringing peace and harmony to industrial disputes between
parties and solving their issues in a peaceful manner.

Objectives of the Industrial Disputes Act, 1947

The act was drafted to make provision for the investigation and settlement of industrial disputes
and to secure industrial peace and harmony by providing mechanism and procedure for the
investigation and settlement of industrial disputes by conciliation, arbitration and adjudication
which is provided under the statute.

This Act was passed was with a key objective of “Maintenance of Peaceful work culture in the
Industry in India” which are mentioned under the Statement of Objects & Reasons of the statute.

The Act also lays down:

1. The provision for payment of compensation to the workman on account of closure or lay
off or retrenchment.

2. The procedure for prior permission of appropriate Government for laying off or
retrenching the workers or closing down industrial establishments

3. The actions to be taken against unfair labour practices on part of an employer or a trade
union or workers.

Main features of the Act

This Act furnishes us with specific guidelines and guidelines in regards to the works committee
for both the businesses and all the workmen to advance measures for good working relations and
comprehension among the workmen and the businesses later on, and to end that, it additionally
vows to resolve any material difference in views of opinion in regard to such issues.

Strikes & Lockouts

A strike is a legitimate and sometime unavoidable weapon in the hands of labour, it is
equally important that indiscriminate and hasty use of this weapon should not be encouraged.
 It will not be right for labour to think that any kind of demand for a ‘strike’ can be
commenced with impunity without exhausting the reasonable avenues for peaceful
achievement of the objects. There may be cases where the demand is of such an urgent and
serious nature that it would not be reasonable to expect the labour to wait after asking the
government to make a reference. In such cases the strike, even before such a request has been
made, may very well be justified.

A strike in its ordinary meaning refers to a concerted refusal to work on the part of person
who are accustomed to work in a particular vocational area - in Industrial Disputes 1947
define word. Section 2(q) Chapter - V deals with the strike and lockout. The word 'strike'
owes its origin to old English Word 'Strican-to go' away, since in this form of industrial
protest workers go away from their work it is called 'Strike'. The term strike is almost two
hundred years old.

Essentials Of Strike

1. Cesssation of Work
2. By workers employed in the industry
3. Acting in combination
4. Common understanding
5. Aim of Strike
6. Strike is not a fundamental right
7. Temporary suppression of work

Kinds of Strike
GENERAL STRIKE It is one where the workmen join together for common cause and stay
away from work. Collective action on the part of the workmen for securing improvement on
matters like basic pay, bonus, leave, etc. is the primary object behind such strike. Token strike,
hartals and bandhs are various kinds of general strike.

STAY IN, SIT DOWN, TOOL DOWN AND PEN-DOWN STRIKES In these
cases, the workmen report to their duties, occupy the premises but do not work. The employer is
thus prevented from employing other labour to carry on his business.

STAY IN STRIKE: where dismissed workmen were staying in premises and refused to
leave them.

Sit Down Strike: Factory workers staying inside the premises and refusing to work.

Tool Down Strike: Factory workers who refuse to work with their tools.
Pen Down Strike: The SC court held that refusal under common understanding to continue
to work is a strike and if in pursuance of such common understanding the employees entered the
premises of the Bank and refused to take their pens in their hands that would no doubt be a
strike.

GO-SLOW STRIKE In this, the workmen come to their work and work also but with a
slow speed in order to lower down the production and thereby cause loss to the employer. It is
NOT a strike within the meaning of strike under Sec 2(q) but is serious misconduct.

SYMPATHETIC STRIKE It is resorted to in sympathy of other striking workmen to extend

moral support to them. When the workers in concert absent themselves out of sympathy to some
cause wholly unrelated to their employment or even in regard to condition of employment of
other workers in service under other management . Such a strike is unjustifiable invasion on the
right of employers & is therefore unlawful.

Hunger Strike In Hunger Strike a group of workmen resort to fasting on or near the place of
work or the residence of the employer with a view to coerce the employer to accept their
demands.
 LOCK OUT
Lock-out is the counter-part of strikes. While a ‘strike’ is an organised or concerted withdrawal
of the supply of labour, ‘lock-out’ is withholding demand for it. Lock-out is the weapon
available to the employer to shut-down the place of work till the workers agree toresume work
on the conditions laid down by the employer. Lockout is antithesis of strike.

Section 2(l) of The Industrial Disputes Act, 1947 defines lock-out as “the temporary closing of a
place of employment, or the suspension of work, or the refusal by an employer to continue to
employ any number of persons employed by him”. In lockout, just like a strike, there is no
severance of relationship of employer & employee. The relationship continues but suspended
temporarily & revives afterwards when the settlement is arrived at.

This definition consists of the following three components of a lockout:

1. Temporary closing of a place of employment; or

2. Suspension of work, or

3. Refusal to continue to employ any number of persons employed by the employer.

When a lockout takes place, the workers are asked by the management to stay away from work,
and therefore, they are not obliged to attend work.
 Collective Bargaining
A basic aim of collective bargaining is to facilitate the peaceful accommodation of
conflicting interest. This accommodation normally comes about' through a process described
as ‘give and take’. Being a democratic method, its effectiveness is containing industrial
disputes and ensuring lasting industrial peace. The best way to solve an industrial dispute is
through collective bargaining. The collective bargaining as dispute settlement process helps
to create an atmosphere of harmony and co-operation. Collective bargaining has been
emerging as a remarkable method of resolution of industrial conflicts in India over the last
five decades.

Provisions of Industrial Disputes Act. 1947

The intention of the legislature in enacting the Industrial Dispute Act, 1947, is to encourage
investigation and settlement of Industrial Disputes amicably so that production may not
suffer and employer and employees, both, may have peace. Firstly, the Act encourages
settlement of industrial disputes inter se. The employer and the employees sit face-to-face
and settle their disputes without any reference to an outside agency - as far as possible,
Secondly, the disputes are referred to adjudication. Thus, there is two-tier machinery for
settling industrial disputes.
Industrial Dispute Meaning
• The term “Industrial Dispute” is ‘a key concept of literally central importance” in the area
of Labour Laws which regulate the most delicate labour-management relations. A cordial
relationship between employer and employees could exist only when ‘Collective
Bargaining’ blooms. On the contrary, if the same fails “Industrial Disputes” germinate.

• Section 2(k) of the Act defines ‘industrial dispute’ as follows:“ ‘industrial dispute’ means
any dispute or difference between employers and employers, or between employers and
workmen, or between workmen and workmen, which is connected with the employment
or non employment or the terms of employment or with the conditions of labour, of any
person”.
 The Payment of Wages Act, 1936
The Payment of Wages Act, 1936 was passed to regulate the payment of wages to certain classes
of persons employed in industry. It is essentially meant for the benefit of the industrial
employees not getting very high salaries and the provisions of the Act were enacted to safeguard
their interest. It also provides against irregularities in payment of wages and unauthorized
deductions there form by the employers. Further, it ensures payment of wages in a particular
form and at regular intervals without unauthorized deductions.

Objective of the act

The primary goals of the Act are-

 To guarantee consistent and fast wage payments,

 To prevent wage employees from being exploited by eliminating arbitrary penalties and
wage deductions, and

 It outlines the obligations of businesses to pay wages; fix wage periods; compensation
schedules and methods; allowable deductions; and other related issues.

 To ensure that the wages shall be paid in the current currency

APPLICABILITY OF THE ACT

It applies in the first instance to the payment of wages to persons employed in any factory, to
persons employed (otherwise than in a factory) upon any railway by a railway administration or,
either directly or through a subcontractor, by a person fulfilling a contract with a railway
administration, and to persons employed in an industrial or other establishment specified.

Fixation of wage-periods

Every person responsible for the payment of wages under section 3 shall fix periods in respect
of which such wages shall be payable. No wage-period shall exceed one month. That means
wage can be paid on daily, weekly, fortnightly (for every 15 days) and monthly only. Wage
period for payment of wages to employees by employer should not exceed 30days i.e. one
month according to this act. But wages cannot be paid for quarterly, half yearly or once in a
year.

Time Of Payment Of Wages. [Section 5]

• In railway factory or industrial or other establishment, if there are less than 1000
employees, wages of employees should be paid before the expiry of the 7th day after
the last day of the wage period. (ex:- wages should be paid on starting of present month
within 7 days i.e. before 7th date if wage is paid on 1st in previous month )
 • In other railway factory or industrial or other establishment, if there are more than 1000
employees, wages of employees should be paid before the expiry of the 10th day
after the last day of the wage period. (ex:- wages should be paid on starting of present
month within 10 days

i.e. before 10th date if wage is paid on 1st in previous month )

• For employees of port area, mines, wharf or jetty, wages of employees should be paid
before

the expiry of the 7h day after the last day of the wage period.

Authorised deductions
The following kinds of deductions are permitted under the Act:

1. Fines (Sec. 8):

2. Deductions for Absence from Duty (Sec. 9)

3. Deductions for Damage of Loss (Sec. 10)

4. Deductions for Accommodation and Service (Sec. 11)

5. Deductions for Recovery of Advance (Sec. 12)

6. Deductions for Recovery of Loans (Sec. 12-A)

7. Deductions for Payments to Co-operative Societies and Insurance Schemes (Sec. 13)

8. Other Deductions

Conclusion
The act has established various rules and regulations for the betterment and effective operation of
the industry. The legislation allows workers to work freely without fear of being hampered by
pay or salary delays. The code has paved the road for employees to work with dignity, and the
necessary mechanisms have been established. The act’s provisions aid in the development of
trust between the employer and the employee, allowing for optimum production to be attained
through employee motivation. The notion of wage payment and deductions under the code is
critical to the industry’s operating and producing intended output and ensuring that the benefit is
supplied to the employee.
 INDUSTRIAL EMPLOYMENT(STANDING ORDERS)Act ,1946
The aim and object of the Central Government was to introduce uniform Standing Orders and
provide equal conditions of service to the workmen employed in industrial establishment
before or after the Standing Orders came into force. After the enforcement of the Standing
Orders, the conditions laid down therein, will be binding on all those presently in the
employment of the concerned establishment and appointed thereafter.

The employers shall have to define precisely the conditions of employment and to make
these conditions known to the workmen employed in their industries. It provides uniformity
of terms and conditions in respect of all workmen employed in the industry and belong to the
same category. All these conditions will be reduced to writing and to get them implemented
compulsorily with a view to avoid any unnecessary industrial unrest.

Important Features of the Act

The important features of the Act are

(a) Employers is bound to frame standing orders and to have them certified

(b) Standing orders should relate to matters specified in Schedule attached to the Act.

(c) The certifying officer is required to certify standing orders.In this process he can add or
modify the draft standing orders.

(d) The employers of similar industrial establishments can submit joint draft standing orders
for their certification to the Certifying Officer.

(e) Model Standing orders may be framed by the Government.

(f) The Act is applicable to an industrial establishment wherein one hundred or more
workmen are employed or were employed on any day of the preceding twelve months.

(g) Failure to submit draft standing orders leads to punishment for the employer.

(h) Power of granting exemption to any industrial establishment from the application of this
Act lies with appropriate Government.

CONCEPT OF STANDING ORDERS

The Industrial Employment Act, 1946 defines the meaning of ‘Standing Orders’ in
SECTION 2 (g). These are the rules which relate to the matters explained in the Schedule.

The Schedule attached to the Act includes the following matters-

1.Classification of workmen,e.g whether permanent,temporary, apprentice,probationers,or
badlis.

2. Manner of intimating to workmen periods and hours of work ,holidays ,pay days and wage
rates.

3. Shift Working.

4. Attendance and Late coming

5. Conditions of procedure in applying for and the authority which may grant leave and
holidays

6. Requirement to enter premises by certain gates and liability to search.

7. Closing and reopening of sections of the industrial establishment and temporary

stoppages of work and the rights and liabilities of the employer and workmen arising
therefrom.

8. Termination of employment and the notice thereof to be given by employerand

workmen.

9. Suspension or dismissal for misconduct ,and acts or omissions which constitute

misconduct.

10. Means of redress for workmen against unfair treatment or wrongful extraction by the
employer or his agents or servant.

11.Any other matter which may be prescribed