Class –LL.B (HONS.) ISEM.

Subject – Labour Laws

Unit – I
General Introduction

INDUSTRIAL LAW
Industrial Jurisprudence –
During the twentieth century a new branch of jurisprudence known as Industrial Jurisprudence has
developed in our country. Industrial jurisprudence is a development 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 country. The growth of industrial jurisprudence can significantly
be noticed not only from increase in labour and industrial legislation but also from a large number of
industrial law matters decided by the Supreme Court and High Courts. If affects directly 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 laissez 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 contract 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 unaccepted 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 “status”. The industrial society
all over the world has been moving during the present century from contract to status and the status is
a politico-socio-economic juristic status.
What were the factors that lead to this departure from the old theories of the law of contract, and the
law of Master and servant? Industrialization in India, as in other countries, brought with it some new
socio-economic problems. Those who control the industry have a natural tendency of multiplying their
wealth and if this tendency is not checked the rich grows on richer and the poor becomes poorer day
by day.
Democratic ideas have also grown simultaneously with the growth of industrial in our country. These
democratic ideas have pleaded for and have also helped in mass awakening and consciousness for
greater power amongst the working class. Out of ht struggle between workers, demanding for better
share in the production and profit of the industry and the employers’ hesitation to part with it beyond
a certain limit, have grown the recognition of certain principles which are considered to be
fundamental in almost all developed countries of the world.

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 Class –LL.B (HONS.) ISEM. Subject – Labour Laws

The basic principles are

The right of workmen to combine and form associations or unions.

The right of workmen to bargain collectively for the betterment of their

considerations of service.

The realization that economic struggle is inevitable because it is but

natural that labour would agitate for better conditions.
A shift from the doctrine of “Laissez faire” to a “welfare state”.

Tripartite consultations i.e., solution of the industrial or labour disputes

through the participation of workers, employers and the Government.

The State can no more be a neutral onlooker but must interference as

the protector of the social good.
Minimum standards must be guaranteed through State legislation.

The concept if industrial jurisprudence in our country developed only after independence. Until
independence the change in attitude of the government and the benevolent labour legislation only
aimed amelioration of the conditions of labour and it could hardly be said to be a deal in social justice
to the working class. The birth of industrial jurisprudence in our country may 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 guideline for the development if
our industrial jurisprudence and has thus taken India one step forward in her quest for industrial
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.

Labour Policy in India

After independence it was largely felt that the labour policy must emphasis 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 emphasized that labour should become self-reliant. An equally forceful
view had been to prefer reliance upon the Government. This cross-current of approach of 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

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Class –LL.B (HONS.) ISEM. Subject – Labour Laws

reliance on three party approaches, namely the trade union representing the workers, the employers,
and the Government. In this kind of approach the representatives do not decide anything but their-role
is mainly advisory. They meet together, discuss the points in dispute and strive to reach a consensus
and if they agree they make recommendations. Out of the three, the role of the Government is more
important Annual Labour Conferences and the permanent standing Labour Committees served as the
chief instrument of Tripartism. These conferences advocated, amongst many things; workers
participation in management, workers education works, committees, and minimum wage legislations.
At the sixteenth conference held in 1958 a momentous advancement was made by adopting a Code of
Discipline in industry. The code pledged the parties to avoid strikes and lock-outs without notice, and
to eschew unilateral actions, and to rely on settlement of disputes by discussion by voluntary
arbitration or by adapting to such measures as the law may provide. It also pledged them to avoid
coercion and victimization, to avoid partial strikes and lock-outs, and to follow grievance procedure.
Tripartism is an approach which lays stress on the identity of interests between labours and capital
i.e., they are partners in the maintenance of production and the building up of the national economy.
The labour policy has proceeded on a realization 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.

The main postulates of

labour policy may be
summed up as follows –
The right of workmen to combine and form associations or unions.

Recognition of the State as the custodian of the interest of the community, as the
catalyst of “change” and welfare programmes.

Recognitions of the right of workers to peaceful direct action if justice is denied to

them.

Encouragement to mutual settlement, collective bargaining and voluntary

arbitration.

Intervention by the State in favour of the weaker party to ensure fair treatment to all
concerned.

Primacy to maintenance of industrial peace.

Evolving partnership between the employer and employees in a constructive

endeavour to promote the satisfaction of the economic needs of the community in
the best possible manner.
Ensuring fair wage standards and provisions of social security.

Co-operation for augmenting ‘production’ and increasing ‘productivity’.

Adequate enforcement of legislation.

Enhancing the status of the worker in industry.

Tripartite consultation.
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Class –LL.B (HONS.) ISEM. Subject – Labour Laws

Industrial Revolution of India

Industrialization 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 consequences of the
introduction of factory system production became concentrated in a few selected places, resulting in
the increase of labour towns because of the difficulty of finding adequate livelihood in their native
place. This resulted in disappearance of the popular village handicraft system because they could not
complete 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 INDUSTRIALIZATION

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 supplies 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 discharges by his employer at any
time without assigning any reasons there for.

Social Evils

The factories were sick not only 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.

Work in factories was very hazardous and strenuous with long hours duty, no rest, and no facility
for recreation. Machines were taken care of by the factory owner who had little regard for the
safety and welfare of the workers.

Workers were exposed to serious accidents because machines were not properly screened.
Accidents were considered as normal risk incidental to employment in a factory and the worker
who was unfortunate victim of an accident lost his employment and had no right to compensation.

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Class –LL.B (HONS.) ISEM. Subject – Labour Laws

The wages paid to the worker were very low. Wages were the only source of their income. The
workers found it extremely difficult to live with the wages so earned by them. Therefore, they had
to find out ways and means to supplement their earnings. Consequently the wives and children of
workmen started seeking employment. The factory owners exploited this situation and employed
them in large numbers at extremely low wages without any regard to their physical conditions.

The workers found it difficult to adjust with these conditions. These evils of industrialization and the
lack of adjustment and harmonious relationship between the employer and the labour 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 knowhow 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 worker 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 door condition of the workers dictated their own terms and conditions with regards
to wages, hours of work, leave, etc. The workers were left with no choice but to accept such terms
because services was the sole means of earning their livelihood.
Neither the government not the law courts took special notice of these problems because they laid too
much emphasis on the policy of the non-interference and freedom of contract. Thus, with the lapse of
time the situation turned out to be so worse and ht society became so much adversely affected that the
government was compelled to take some action to remedy these problems.
Ultimately some philanthropic agencies like Servants of India Society, Social Service League and some
industrial social workers raised their voice against these problems. They were successful in mobilizing
the public opinion in support of their view point. Workers also started to form their own organization
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 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 realized 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 he 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 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 attention to the improvement of the
conditions of labour in industry, for the prosperity of a country depends upon the development and

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Class –LL.B (HONS.) ISEM. Subject – Labour Laws

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 restores to the labourer. Our
Constitution guarantees social-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.”

Collective Bargaining

 Employer & employee with different interest must work together, if they want to achieve their
respective goals.
 Good relations between employerand employee are essential for the success of industry, in
order to maintain good industrial relations, it is necessary that industrial disputes are settled
quickly and amicably. One of the efficient means of resolving industrial disputes and deciding
employment conditions is collective bargaining
 The phrase collective bargaining is said to have been coined by Sydney and Beatrise Webb of
Great Britain which is said to be the home of C.B. This idea emerges as a result of industrial
conflict.
 According to encyclopedia of social senses – C.B is a process of discussion and negotiation
between two parties. The resulting Bargain is an understanding as to the terms & conditions
under which a continuing service is to be performed.
 C.B is made up of two words – Collective + Bargaining. Here the meaning of collective means
both employers & employee act as a group rather than as individuals or you can say that it is a
group action through its representatives and bargaining means – the method of reaching an
agreement by negotiations which involves proposal and counter proposal, offer & counter
offer or give and take between the parties. So, C.B. is a bi-partite and dynamic process.

Objective of C.B.: -
 To maintain cordial relation between employer/ employee
 To protect the interest of workers through collective action
 To insure the participation of Trade union in industry
 To avoid the need for Government intervention as C.B. is a voluntary process.
 To promote industrial democracy

Characteristics of C.B.:-
 It is a group action as opposed to individual action.
 It is flexible and notice and not fixed or static.
 It is bi-parties process.
 It is a continuous process
 C.B. is the technique that has been adopted by T.V. &Mgt to reconcile the conflicting
interest
 C.B. prays a significant role in improving labour-mgt relations and insuring ind. Harmony.

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Class –LL.B (HONS.) ISEM. Subject – Labour Laws

 C.B. is a process of negotiation to determine the terms and conditions of employment.

 The process of C.B. is a democratic and peaceful process.
 The C.B. is a direct bi-partite negotiation to be conducted in an atmosphere of amity &
goodwill.
 The successful C.B. always ends with an agreement between the parties and usually C.B.
agreements are long term agreements to ensure industrial peace.
 C.B. agreements always emerge as a package deal in an atmosphere of mutual give & take.
 C.B. facilitates better implementation of decisions taken, because of involvement of both
the parties. ;

Forms of C.B.:-
 Single plans-bargaining – Prevails in United States & India – negotiation with T.V.
 Multiple Plans-bargaining – C.B. agreements can be grouped under following categories –
 Working conditions, labour welfare, Mgt matter (Safe) organizational matters –

Condition essential for successful C.B.

 A favorable political climate
 Presence of strong T.U.
 Recognition of T.U. by the mgt or law.
 Willingness to gives & takes.
 In an atmosphere of amity & good will.
 Right attitude
 Continuous dialogues
 Availability of data
 Negotiation/ Settlement
Identification of problems
Preparing dialogue & ready for settlement –

IR Overview highlighting Labor Management Relations, Legal Framework & Constitutional

Provisions, ILO Conventions
Contents -

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Class –LL.B (HONS.) ISEM. Subject – Labour Laws

Industrial Relations

Labor Management Relations

Parties Involved in Labor Management Relations

Features of Labor Management

Objectives of Labor Management

Legal Framework & Constitutional Provisions

Articles 39, 41, 42 and 43

ILO Conventions

Industrial Relations
Labor Management Relations

The field of labor relations looks at the relationship between management and groups of workers
represented by a union are more harmonious and cooperative than confliction. It creates an
environment conducive to economic efficiency,motivation, productivity, development of the
employee and generates employee loyalty and mutual trust.

Parties Involved in Labor Management Relations

Employers

Courts and
Employees
Tribunals

Relations

Employers
Government
Association

Trade
Unions

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Class –LL.B (HONS.) ISEM. Subject – Labour Laws

Legal Framework & Constitutional Provisions

• Labor is in the concurrent list of the Constitution on which both the Centre as well as the States
have the power to make laws.
• Article 254 has been enacted to clarify the position.
• Normally, as laid down in Clause (1), in case of any repugnancy between the Union and the State
legislation, the legislation of the Union shall prevail.
• Articles 39, 41, 42 and 43 have a special relevance in the field of industrial legislation and
adjudication.

Articles 39, 41, 42 and 43

• Article 39: Equal pay for both men and women.
• Article 41: Secures the right to work, to education and to public assistance in cases of
unemployment, old age, sickness and disablement, and in other cases of undeserved want.
• Article 42: Secures just and humane conditions of work and for maternity relief.
• Article 43: Ensures a decent standard of life and full enjoyment of leisure and social and cultural
opportunities to all workers.

ILO Conventions
The ILO set-up in 1919 is the international labor organization which adopted a series of Conventions and
Recommendations covering

Hours of work
Employment of women, children and young persons
Weekly rest, holidays, leave with wages
Night work
Industrial safety, health, hygiene
Labor inspection
Social security
Labor-management relations
Freedom of association

Wage fixation
Productivity

Out of 183 Conventions adopted by ILO, India has ratified 39 Conventions.

ILO and India have common aims, common goals and common destiny, as both of them are committed to
world peace, freedom and social justice.
Both are striving for the socio-economic betterment of the poverty stricken and under-privileged people

**************************

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Class –LL.B (HONS.) ISEM. Subject – Labour Laws

INDUSTRIAL RELATION

The concept of industrial relation is very simple. It is a relationship in any industry between workers
and their employer. We can call it broadly labour management or employer employee relations. The
phrase industrial relation contemplates maintenance of relations in industry. Such relations can be
cordial and harmonious. They can be strained also due to constant strife. Every effort is made to
ensure co-operation and not conflict between these two important partners in the working of any
undertaking in any industry. The industrial establishment can have a small manpower or very big as
well. Industry can belong to a private employer, co- operative society, partnership firm, corporate
bodies like private public sectors. It may be run by central/ state Government. They are normally
known as central/ state Govt. public sector undertakings. Ownership is immaterial it is of a diverse
nature but management factor is always common. No enterprise runs without exercising proper
control by the management over the persons employed. Thus, it is now clear to us that employer
employee relations or industrial relations exists in every industrial unit.
Now after understanding the conceptual position of industrial relations we have to find out how they
can be maintained in a manner which will contribute to an uninterrupted production or rendering of
service. The first and foremost is mutual co-operation and understanding. This is secured by giving a
fair deal to the workers. This is possible by providing proper wages and other fringe benefits as far as
possible. The employer in return expect maintenance of discipline on shop floor and due obedience.
The other part is to regulate industrial relations by a legal frame work. Ours is a socialistic democratic
republic where welfare of labour is of paramount importance. Central/ state legislatures have enacted
varies labour laws and it is obligatory on the part of management to abide by such a frame work.
These laws pertains to condition of service of workers, payment of wages to them etc. it is not unusual
for workers to demand more and more wages, facilities etc. Involving financial burden which
employer resists and deny because of financial constraint and because they make an inroad into their
share of profit. Non settlement of the demands made by the workers gives rise to unrest which
ruptures industrial relations. Causing disruptions due to stoppage of work, strike, lock out etc. The
interest of the general public and national economy get affected. Law therefore provides a machinery
for settlement of disputes the industrial dispute Act, 1947 is the first law on the subject in this field. It
is applicable throughout India in all the states. Labour being on the concurrence list of the constitution
of India, some of the states have made their own laws in this field and with the assent of the president
of India, they all are applicable in those states to the exclusion of the central I.D. Act. In this context a
mention can be made of such laws known as Industrial relation law, in place of industrial dispute
prevailing in the state of Gujrat, Maharashtra and Madhya Pradesh. The object is common namely to
provide a machinery for the settlement of disputes through modality of
agreement/settlement/awards, which are legally enforceable. In dispute resolving mechanism, an
individual worker is always helpless but united force of labours together add strength to the collective
bargaining.

Constitution of India
Labour Laws
Court Judgments
International Labour Organization (ILO) Standards
Purpose- Social Justice Origin-Labour Law, Sources
• Constitution of the ILO ( Based on Declaration of Philadelphia (1944)-Preamble
• Whereas universal and lasting peace can be established only if it is based upon social justice;
• Implications of Sustainable Development:

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Class –LL.B (HONS.) ISEM. Subject – Labour Laws

• And whereas conditions of labour exist involving such injustice hardship and privation to large
numbers of people as to produce unrest so great that the peace and harmony of the world are
imperiled; and an improvement of those conditions is urgently required; as, for example, by
the regulation of the hours of work including the establishment of a maximum working day
and week, the regulation of the labour supply, the prevention of unemployment, the provision
of an adequate living wage, the protection of the worker against sickness, disease and injury
arising out of his employment the protection of children, young persons and women, provision
for old age and injury, protection of the interests of workers when employed in countries other
than their own, recognition of the principle of equal remuneration for work of equal value,
recognition of the principle of freedom of association, the organization of vocational and
technical education and other measures; Globalization
• Whereas also the failure of any nation to adopt humane conditions of labour is an obstacle in
the way of other nations which desire to improve the conditions in their own countries;
• The High Contracting Parties, moved by sentiments of justice and humanity as well as by the
desire to secure the permanent peace of the world, and with a view to attaining the objectives
set forth in this Preamble, agree to the following Constitution of the International Labour
Organization:

Social Justice

 Equal treatment to everyone

 State assistance to the weak
 Reducing pockets of extreme poverty
 Eliminating exploitation
 Role of the State

Commitment to social justice confers a very heavy responsibility on the state for upliftment of
the weak

CONSTITUTION OF INDIA
 Preamble
 Fundamental Rights
 Directive principles
 PREAMBLE
 Socialist Democratic Republic;
 Justice ,social, economic and political;
 Liberty of thought, expression, belief, faith and worship;
 Equality of status and opportunity;
 Fraternity, assuring the dignity of the individual

FUNDAMENTAL RIGHTS
 Equality before the law. Art. 14- State shall not deny to any person equality before the
law or the equal protection of the laws.
 Prohibition of discrimination on grounds of religion, race, caste, sex or place of birth or
any of them ( S 15)

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Class –LL.B (HONS.) ISEM. Subject – Labour Laws

 Equality of opportunity in matters of public employment- no citizen shall, on grounds

only of religion, race, caste, sex, descent, and place of birth, residence or any of them, be
discriminated against in respect of any employment under the State. (Art 16)
 Right to freedom of speech and expression and to form associations or unions. (Art. 19-
1-c);
 Right to practice any profession, trade or business
 Prohibition of traffic in human beings,begar and other similar forms of 33forced labour
(Art. 23);
 Prohibition of employment of children, below 14 yrs., in any factory, mine or other
hazardous employment (ART.24).

DIRCTIVE PRINCIPLES OF STATE POLICY

 Right to adequate means of livelihood, prevention of concentration of wealth, equal pay
for equal work for both men and women, prevention of abuse of health and strength of
workers and the tender age of children, etc. (Art. 39);
 Right to work, to education and to public assistance in cases of unemployment, old age,
sickness and disablement (Art. 41)

Meaning of Directive Principles

 These principles are directives of the Constitution to the state.
 The state has to take these principles into consideration while making regulations and
in the course of governance
 Directive principles of state policy cannot be enforced through courts, unlike
Fundamental Rights. They are not justiciable.
 Provision for just and humane conditions of work and maternity relief (Art. 42);
 Living wage for workers(Art.43);
 Participation of workers in management of industries(Art.43A w.e.f. 3.1.97)

Freedom
 Speech and expression
 To assemble peaceably and without arms
 To form association or unions
 To move freely throughout India
 To reside and settle in any part of India
 To practice any profession, occupation, trade or business.

Reasonable Restrictions
 In the interest of public order, decency and morality
 Power of Parliament to modify fundamental rights in their application to forces
 Restriction on rights while ‘martial law’ is in force in any area.

IR Overview highlighting Labor Management Relations, Legal Framework & Constitutional

Provisions, ILO Conventions
Industrial Relations
 Labour Management Relations
 Parties Involved in Labor Management Relations
 Features of Labor Management
 Objectives of Labor Management
 Legal Framework & Constitutional Provisions
 Articles 39, 41, 42 and 43

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Class –LL.B (HONS.) ISEM. Subject – Labour Laws

 ILO Conventions.
 Industrial Relations.

Labour Management Relations

The field of labour relations looks at the relationship between management and groups of workers
represented by a union are more harmonious and cooperative than confliction. It creates an
environment conducive to economic efficiency, motivation, productivity, development of the employee
and generates employee loyalty and mutual trust.

Parties Involved in Labour Management Relations

 Employees
 Employers
 Government
 Employers Association
 Trade Unions
 Courts and Tribunals

Legal Framework & Constitutional Provisions

 Labour is in the concurrent list of the Constitution on which both the Centre as well as the
States have the power to make laws.
 Article 254 has been enacted to clarify the position.
 Normally, as laid down in Clause (1), in case of any repugnancy between the Union and the
State legislation, the legislation of the Union shall prevail.
 Articles 39, 41, 42 and 43 have a special relevance in the field of industrial legislation and
adjudication.

Articles 39, 41, 42 and 43

 Article 39: Equal pay for both men and women.
 Article 41: Secures the right to work, to education and to public assistance in cases of
unemployment, old age, sickness and disablement, and in other cases of undeserved want.
 Article 42: Secures just and humane conditions of work and for maternity relief.
 Article 43: Ensures a decent standard of life and full enjoyment of leisure and social and
cultural opportunities to all workers.
ILO Conventions
 The ILO set-up in 1919 is the international labour organization which adopted a series of
Conventions and Recommendations covering
 Hours of work
 Employment of women, children and young persons
 Weekly rest, holidays, leave with wages
 Night work
 Industrial safety, health, hygiene
 Labor inspection
 Social security
 Labor-management relations
 Freedom of association
 Wage fixation
 Productivity
 Out of 183 Conventions adopted by ILO, India has ratified 39 Conventions.
 ILO and India have common aims, common goals and common destiny, as both of them are
committed to world peace, freedom and social justice.

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Class –LL.B (HONS.) ISEM. Subject – Labour Laws

 Both are striving for the socio-economic betterment of the poverty stricken and under-
privileged people

INDUSTRIAL DISPUTE ACT, 1947

INDUSTRIAL DISPUTE ACT, 1947

• Introduction (scope, coverage & object).
• Important definitions.
• Authority under the act.
• Notice of change (section 9-A).
• Reference of disputes (section 10).
• Strike and lock-out (provisions related to both).
• Lay-off/ retrenchment (Definition, comp.)

Industrial Dispute Act, 1947

• Introduction:-The act was enacted to secure industrial peace and harmony by providing
machinery and procedure for the settlement of industrial dispute by negotiations instead of
trial of strength through strikes and lock-outs.
• This legislation is calculated to ensure social justice to both employers and employees and
there by promote industrial progress.
• The act provides for payments for payment of compensation on a/c of retrenchment, lay-off
and closure.

The object, scope and extent of the Act

• The main objects of the Acts are- To secure industrial peace by preventing and settling
industrial disputes between two wheels of the industry called the employer and the workmen.
• To maintain good relations between the employer and workmen by preserving amity and
cordial relations by way of collective bargaining through an internal works committee.
• To ameliorate the condition of workmen in industry and for redressal of grievances a statutory
machinery is been set up externally by way of conciliation and adjudication by labour court.
The Act extends to the whole of India and it applies to all industries.

It also lays down procedure for prior permission of the appropriate govt.for laying off or retrenching
the workers or closing down an industrial establishment in which not less than 100 workmen were
employed on an average per day for the preceding 12 months.
This act is a benign measure which seeks to pre-empt industrial tensions, provide the mechanism of
dispute resolution and setup the necessary infrastructure so that the energies of partners in
production may not be dissipated in counterproductive battles and assurance of industrial peace&
justice may create a congenial climate.

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Class –LL.B (HONS.) ISEM. Subject – Labour Laws

Important definitions
Importadefinitions Important
 Closer:-sec.2 (cc) permanent closing downdefinitions
of a place of employment or part thereof.
 Conciliation officer:-sec.2 (d) Appointment u/s 4 of the act to mediate in and promoting the
settlement of industrial dispute.
 Lock out:-sec.2 (l) means the (temporary closing down of a place of employment) or the
suspension of work or discontinuation to employ number of persons employed by him.
 Average pay {section2 (aaa) It means the average of the wages payable to a workman---
1. In the case of monthly paid workman, in the 3 complete calendar months,
2. In the case of weekly paid workman, the 4 complete weeks, and
3. In the case of a daily paid workman, in the 12 full working days.
In all the above given cases the period of time given must precede the date on which the average pay
becomes payable to the workman, provided he had worked during this period as the case may be.

Procedure for settlement of Industrial Disputes and

Authorities under the Act

• Sec.3 works committee

• Sec. 4 conciliation officers
• Sec. 5 Board of conciliation
• Sec. 6 court of inquiry
• Sec.7 Labour courts
• Sec. 7-A Tribunals
• Sec. 7-B National Tribunals

Works committee
• Any industrial establishment wherein 100 or more workmen are employed or were employed
on any day during the preceding 12 months, may be required by the appropriate government
to constitute a works committee comprising of equal number of representatives of labour and
management.
• The main functions of the works committee are to preserve amity and establish cordial
relations between workers and employers and to resolve differences of opinion in matters of
common interest through negotiations. ( section 3 )

Conciliation officers
• TheAppropriate Government may, by notification in the official Gazette, appoint such number
of persons as thinks fit, to be conciliation officers, charged with the duty of mediating in and
promoting the settlement of industrial disputes
• A conciliation officer may be appointed for a specified area or for specified industries in a
specified area or one or more specified industries and either permanently or for a limited
period. (Section 4).

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Class –LL.B (HONS.) ISEM. Subject – Labour Laws

Board of conciliation
• The appropriate Government may as occasion arises by notification in the official Gazette
constitute a Board of Conciliation for promoting the settlement of an industrial dispute.
• A Board shall consist of a chairman and two or four members, as the appropriate Government
thinks fit.
• The chairman shall be an independent person and the other members shall be persons appointed
in equal numbers to represent the parties to the dispute and any person appointed to represent a
party shall be appointed on the recommendation of that party.
• A board, having the prescribed quorum, may act notwithstanding the absence of the chairman or
any of its members or any vacancy in its number. (Section 5)

Court of inquiry
• The appropriate Government may as occasion arises by notification in the official Gazette,
constitute a court of inquiry for inquiring into any matter appearing to be connected with or
relevant to an industrial dispute.
• A court may consist of one independent person or of such number of independent persons as
the appropriate Government may think fit and where a court consists of two or more
members, one of them shall be appointed as the chairman.
• A board, having the prescribed quorum, may act notwithstanding the absence of the chairman
or any of its members or any vacancy in its number. (Section 6).
Labour courts
• The appropriate Government may, by notification in the official Gazette, constitute one or
more Labour courts for the adjudication of industrial disputes relating to ant matter specified
in the second schedule and for performing such other functions as may be assigned to them
under this Act.
• A Labour court shall consist of one person only to be appointed by the appropriate
Government.
(Section 7).

Tribunals
• The appropriate Government may, by notification in the official Gazette, constitute one or
more Industrial Tribunals for the adjudication of industrial disputes relating to any matter
specified in the second schedule or third schedule and for performing such other functions as
may be assigned to them under this Act.
An Industrial Tribunal shall consist of one person only to be appointed by the appropriate
Government. The appropriate Government may, if it so thinks fit, appoint two persons as assessors to
advise the Tribunal in the proceeding before it. (Section 7-A).

National Tribunals
• The central Government may, by notification in the official Gazette, constitute one or more
National Industrial tribunals for adjudication of industrial disputes which, in the opinion of the
central Government, involve questions of national importance or are of such a nature that
industrial establishment situated in more than one state are likely to be interested in, or
affected by, such disputes.
• A National Tribunal shall consist of one person to be appointed by the central Government.

Conciliation proceedings
• If the employer and the workmen fail to achieve a settlement through negotiation, the
conciliation officer may intervene as a mediator, Endeavour to concile the differences of
opinion and help the labour and management in achieving a successful settlement.

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Class –LL.B (HONS.) ISEM. Subject – Labour Laws

Intervention by the conciliation officer is mandatory in case an industrial dispute has arisen in
a public utility service and a notice of strike or lockout (u/s 22) has been served.
• The conciliation officer shall send a report of proceedings to the government, as to whether a
settlement has been achieved or not, within the prescribed time and in the prescribed
manner.(section 11)

Voluntary Arbitration
• Where any industrial dispute exists or is apprehended and the employer and the workmen
agree to refer the dispute to arbitration, they may, at any time before the dispute has been
referred under section 10, to a Labour court or Tribunal or National Tribunal, refer the dispute
to any person or persons of their choice, by means of a written arbitration agreement. Such
reference may include the presiding officer of a labour court, Tribunal or National Tribunal
also.
• Where an arbitration agreement provides for a reference of the dispute to an even number of
arbitrators, the agreement shall provide for the appointment of another person as umpire who
shall enter upon the reference, if the arbitrators are equally divided in their opinion, and the
award of the umpire shall prevail and shall be deemed to be the arbitration award for the
purpose of this Act.
• A copy of the arbitration agreement, signed by representatives of both the parties
representing majority of each party, should be forwarded to the government and the
conciliation officer. The arbitrator or arbitrators shall investigate the dispute and submit the
arbitration award to the government. The same shall be published in the official Gazette within
one month from the date of the receipt of such copy. (section 10 A )
• An award under section 10-A is not only invulnerable but more sensitively susceptible to the
writ being a quasi-statutory bod’s decision. Such an award be upset if an apparent error of law
stains its face.
“Rohtas Industries v/s Its Union AIR, 1976 S.C. 430.

Reference of Disputes for Adjudication

• If a dispute is not settled by negotiations or conciliation, and the parties do not agree to refer
the dispute to arbitration, the government may on its own discretion or on an application by
the parties to the dispute, separately or jointly, refer the dispute to the Labour Court or
Industrial Tribunal for adjudication. If a dispute involves a question of national importance or
is likely to affect interest of more than one state, the Central Government shall refer the
dispute to the National Tribunal (Section 10 )
• An order of reference shall specify the period within which the award is to be submitted to the
Government.
• The Government may also prohibit continuance of any strike or lock-out in connection with a
dispute which has been referred for adjudication to a Labour Court or tribunal.
Procedure and powers of Labour Court and Tribunal
• A Labour Court or Tribunal shall confine its adjudication only to the points specified in the
order of reference and shall follow such procedure as it may think fit. They shall have the same
powers as that of any civil court with regard to examination of witnesses, evidence ,
compelling the production of documents and material objects, issuing commissions for the
examination of witnesses and in respect of other matters as may be prescribed etc.[ section
11(3) ]
• Every inquiry or investigation by a Board, Court, Labour court, Tribunal or National Tribunal,
shall be deemed to be a judicial proceedings within the meaning of Sections 193 and 228 of
the IPC. All Authorities under the act shall be deemed to be public servants within the meaning
of Section 21 of the IPC.

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Class –LL.B (HONS.) ISEM. Subject – Labour Laws

• All the Adjudicating Courts may impose cost on the parties subject to the rules made in this
behalf and to the discretion of the court dealing the matter.
• Where an industrial dispute relating to the discharge or dismissal of workman has been
referred to a L.C., Tribunal or National Tribunal for adjudication and, in the course of
adjudication proceedings, the court is of the opinion and satisfied that the order of the
discharge or dismissal was not justified, it may, by its award, set aside the order of discharge or
dismissal and direct reinstatement of the workman on such terms and condition, if any, as it
thinks fit, or give such other relief to the workman including the award of lesser punishment,
in lieu of discharge or dismissal as the circumstances of the case may require.
• The award of labour court or tribunal shall be in writing and signed by its presiding officer,
and shall be submitted to the government.(Section 15 and 16)
• The award shall then be published by the government and shall come into force, generally,
after 30 days from the date of its publication ( Section 17 and 17-A )
• The award of the labour court or tribunal shall be final and not appealable. However, a writ
petition before the high court and thereafter an appeal before the supreme court can be filed

Duties of conciliation officers (Section 12)

 Where an industrial dispute exists or apprehended, the conciliation officer may, or where the
dispute relates to a public utility service and a notice under section 22 has been given, shall
hold conciliation proceedings in the prescribed manner.
 The Conciliation officer shall for the purpose of bringing about a settlement of the dispute,
without delay, investigate the dispute and all matters affecting the merits and the right and do
all possible affords to persuade the parties to come to a fair and amicable settlement of the
dispute.
 If a settlement of the dispute or any of the matters in dispute is arrived at in the course of
conciliation proceedings he shall send a report to the appropriate Government together with a
memorandum of the settlement signed by the parties to the dispute.
 If no settlement is arrived at, the conciliation officer shall, as soon as practicable after the close
of the investigation, send a complete report to the appropriate Government, stating the all
efforts made by him to bring a settlement in the given circumstances and the reasons on
account of which, in his opinion, a settlement could not be arrived at.
 If, on a consideration of the report forwarded by the conciliation officer the appropriate
Government is satisfied that there is a case for reference to a Board, Labour Court, Tribunal or
National Tribunal, it may make such reference. Where it does not make any reference it shall
record and communicate to the parties concerned its reasons thereof.
 A report under this section shall be submitted within 14 days the commencement of the
conciliation proceedings or within such shorter period as may be fixed by the appropriate
Govt.

Duties of Board (Section 13)

 Duties of the Board are same as conciliation officer.
 The Board shall submit its report under this section within 2 months of the date, on which the
dispute was referred to it or within such shorter period as may be fixed by the appropriate
Government.

Duties of courts (Section 14)

 A court shall inquire into the matters referred to it and report thereon to the appropriate
Government ordinarily within a period of 6 months from the commencement of its inquiry.

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Class –LL.B (HONS.) ISEM. Subject – Labour Laws

Duties of Labour Courts, Tribunals and National Tribunals (Section 15)

 Where an industrial dispute has been refereed to anyone of these authorities for adjudication,
it shall hold its proceedings expeditiously and shall submit its report within the time fixed in
the order of reference or any extended time frame to the appropriate Government.

Form of report or Award (Section 16)

 The report of the Board or court shall be in writing and shall be signed by all the members of
the Board or court, as the case may be.
 The Award of the Labour Court, Tribunal or National Tribunal shall be in writing and shall be
signed by its presiding officer.

Publication of reports and awards (Section 17)

 Every report of a Board or court together with any minute of dissent recorded therewith, every
arbitration award and every award of the Adjudicating authorities shall, within a period of 30
days from the date of its receipt by the appropriate Government, be published in such manner
as think fit by the Government.
 Subject to the provisions of Section 17-A, the award published under section 17(1) shall not be
called in question by any court in any manner whatsoever.

Section 17-A Commenceme3nt of the award

 An award (including an arbitration award) shall become enforceable on the expiry of 30 days
from the date of its publication under Section 17.

Section 17-B- Payments of full wages last drawn to workman pending proceedings in higher
courts.

Section 18-Persons on whom settlement and awards are binding

 A settlement arrived at by agreement between the employer and workman otherwise than in
the course of conciliation proceedings shall be binding on the parties to the agreement.
 Subject to the provisions of sub- section (3), -An arbitration award which has become
enforceable shall be binding on the parties to the agreement who referred the dispute to
arbitration.
 A settlement arrived at in the course of conciliation proceedings under this act or an
arbitration award in a case where a notification under sub- section (3-A) of Section 10-A
or an award of Adjudicating Authorities which has become enforceable shall be binding
on-
 All parties to the industrial dispute and all other parties summoned to appear in the
proceedings as parties to the dispute (employer his heirs, successors etc. and all other
workmen in respect of the establishment in which the dispute relates.
 Section 18 (3) of the Act depart from the ordinary law of contract and give effect to the
principle of collective bargaining.

Section 19- Period of operation of settlement and awards

 A settlement shall come into operation on such date as is agreed upon by the parties to the
dispute, and if no date is agreed upon, on the date on which the memorandum of the
settlement is signed by the parties to the dispute.
 Such settlement shall be binding for such period as is agreed by the parties, and if no
such period is agreed upon, for a period of 6 month and further for a period of 2 months
after the expiry of the notice period which is mandatory for cancelling the settlement.

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Class –LL.B (HONS.) ISEM. Subject – Labour Laws

 A award shall, subject to the provisions of this section, remain in operation for a period of 1
year from the date on which the award becomes enforceable under Section 17-A. The
appropriate Government may reduce the period and fix such period as it think fit, Govt. may
also extend it for a further period of 1 year and it may do it up to 3 years and not beyond that.

Section 20- Commencement and conclusion of proceedings

 A conciliation proceeding shall be deemed to have commenced on the date on which a notice of
strike or lock-out under section 22 is received by the conciliation officer or on the date of the
order referring the dispute to a Board, as the case may be.
 A conciliation proceeding shall be deemed to have concluded-
 Where a settlement is arrived at, when a memorandum of the settlement is signed by the
parties to the dispute.
 Where no settlement is arrived at or report of the Board is published under section 17, as the
case may be.
 When a reference is made to adjudicating authorities under section 10 by the appropriate
Government.
 When the award becomes enforceable under section 17-A.

NOTICE OF CHANGE
• SECTION 9-A– No employer, who proposes to effect any change in the conditions of service
applicable to any workman in respect of any matter specified in the Forth Schedule, shall effect
such change,--
• (a) without giving to the workmen likely to be affected by such change a notice in the
prescribed manner of the nature of the change proposed to be affected, or
• (b) Within 21 days of giving such notice.
• However, no such notice shall be required if the change is to be effected in pursuance of any
settlement, award or decision of the Appellate Tribunal constituted under the act, or if the
workmen are governed by some civil service rules or the Indian Railway establishment code
etc.

Strike and lock-outs

Strikes and Lock-Outs (Sections-22 to 25)

• Strike means suspension or cessation of work by a group of employees whereas; lock-out is
temporary shutting down or closing the place of business by the employer.
• Strike and lockout are two coercive measures resorted to by the employees and employers,
respectively, for compelling the employers or employees to accept their demands or conditions
of service.
• Sections 22-25 aim at restricting the right to strike or lock-out which is to be exercised under
certain conditions only and after peaceful measures have been exhausted.

A strike or lockout is prohibited in any establishment, in the following cases:-

(a) During the pendency of conciliation proceedings before a board and 7 days after the
conclusion of such proceedings,
(b) During the pendency of arbitration proceedings or proceedings before a labour court, Tribunal
or National Tribunal, and 2 months after the conclusion of such proceedings,
(c) During the period in which settlement or award is in operation.

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Class –LL.B (HONS.) ISEM. Subject – Labour Laws

Strike {sec 2(q)} --

It means – a cessation of work by a body of persons employed in any industry acting in combination,
or a concerted refusal of any number of persons ( who have been so employed) to continue to work or
to accept employment, or refusal under a common understanding of any number of such persons to
continue to work or accept employment.
Strike is the best tool in the toolbox of the workmen which they use to pressurize to the employer to
succumb to their demands.

Restriction on Strike/lock-out in Public utility services

• Notice-The employees or the employers shall give a notice of strikes or lockouts respectively,
to the other party. The strike or lockout shall commence from the date specified in the notice,
which shall in no case, be earlier than 14 days and later than 6 weeks.
• The employer shall intimate the government in the prescribed manner, within 5 days of
receiving any notice of strike or giving any notice of lockout.
• The employees or the employers shall not go on a strike or declare lockout, during the
pendency of any conciliation proceedings and 7 days after the conclusion of such proceedings.
(Section 22)
• The notice of strike or lock-out under this section shall not be necessary where there is already
in existence a strike or lock-out as the case may be in the public utility service, employer must
send aintimation of such strike or lock-out on the day on which it is declared, to such authority
as may be prescribed by the appropriate Government.

Section 23- General prohibition of strike and lock-outs

 No workman who is employed in any industrial establishment shall go on strike in breach of
contract and no employer of any such workman shall declare a lock-out----
 During the pendency of conciliation proceedings before a board and 7 days after the
conclusion of such proceedings,
 During the pendency of Adjudicating proceedings before Labour Court, Tribunal or National
Tribunal and 2 months after the conclusion of such proceedings,
 During the pendency of the arbitration proceedings before an arbitrator and 2 months after
the conclusion of such proceedings , where a notification has been issued under sub-section (3-
A) of section 10-A,
 During any period in which a settlement or award is in operation, in respect of any of the
matters covered by the settlement or award.

Illegal Strikes and Lock-Outs

• Any strike or lockout commence or declared or continued in contravention of any of the

restrictions laid down or any prohibitory order of the government under section 10 or 10-A,
shall be illegal (section 24). No person should knowingly finance any illegal strike or lockout.
• The workmen are entitled to wages for the period of strike/lockout, if it is legal and as well as
justified. If the strike is illegal, workmen are not entitled to wages but are liable to punishment
by way of discharge or dismissal.

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Class –LL.B (HONS.) ISEM. Subject – Labour Laws

Lay-off{sec 2(kkk) } lay-off means the failure, refusal or inability of an employer to give employment
to a workman- whose name is borne on the muster rolls of his industrial est. and-who has not been
retrenched. The failure, refusal or inability to give employment may be due to -
1. Shortage of coal, power or raw materials, or
2. The accumulation of stocks, or
3. The break- down of machinery, or
4. Natural calamity or for any other connected reasons.

Difference B/W lock-out and lay-off

Lock-out is resorted to by employer to pressurize the employees to accept his demands, whereas the
lay-off is given for trade reasons beyond the control of the employer. Lock-out is due to an industrial
dispute and continues during the period of dispute, whereas lay-off is not connected with a dispute
with the workmen.

Difference between lock-out and closer

In the case of lock-out it is only the place of business which is closed and not the business itself. While
in the case of closer of the place of business not only the place of business but the business itself is
closed. Lock-out is the weapon of coercion in the hands of the employer, whereas closer is generally
for trade reasons. In closer the relation between employer and employee comes to an end, whereas in
the case of lock-out no such things takes place but relation between the two is suspended for the
particular time period of dispute between both of them. A lock-out is caused by the apprehension of
an Ind. Dispute whereas a closer need not be in consequence of an industrial dispute.

Retrenchment {sec 2(oo)} -- It means ‘to end, conclude or cease’. In the terms of the I.D. Act, 1947 it
means--- Retrenchment is the termination by the employer of the service of a workman for any reason
whatsoever, otherwise than as punishment inflicted by way of disciplinary action.
It affects only some of the workmen.
In retrenchment the services of the workmen are terminated on account of surplus labour.

The formula of last come first go is applied in the case of retrenchment.

Retrenchment compensation payable to a workman on account of retrenchment shall be equivalent to
15 days average pay for every completed year of continues service or any part thereof in excess of 6
months.
Retrenchment however does not include---
VRS, superannuation, termination of the employment as a result of non-renewal of the contract of
employment on its expiry, or on the ground of continued ill-health.

LAY-OFF AND RETRENCHMENT

(CHAPTERS V-A AND V-B, SECS. 25-A TO 25-S)

• The provisions as to ‘lay-off” and “retrenchment” are contained in :--

• (a) chapter V-A (Secs. 25-A to 25-J) and
• (b) chapter V-B (Secs. 25-K to 25-S)
• The provisions as to lay-off and retrenchment of workmen as embodied in secs. 25 –C to 25-E
shall apply only to industrial establishment in which 50 or more workmen on an average per
working day have been employed in the preceding calendar month .

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Class –LL.B (HONS.) ISEM. Subject – Labour Laws

• These provisions shall not apply to industrial establishment---

a. To which chapter V-B applies, or
b. In which less than 50 workmen on an average per working day have been employed in the
preceding calendar month; or
c. Which are of a seasonal character or in which work is performed only intermittently {sec25-
A (1)}

LAY-OFF
An employee is said to have been laid off on any day, If the employer fails, refuses or unable to provide
him employment on that day on account of reasons beyond his control, such as shortage of raw
materials, coal, power or accumulation of stock, break down of machinery or natural calamity or for
any such other reason. (Section 2kkk).
In case of lay-off factories, mines and plantation establishments employing 100 or more workers on an
average per working day in the preceding 12 months, the employer cannot lay-off any workman
without prior approval of the government, except when such lay-off is due to shortage of power or
natural calamity, and in case of mines due to fire, flood, excess of inflammable gas or explosion.
Permission can be obtained by submitting an application in the prescribed manner, stating the reasons
for the intended lay-off. A copy of the application should be served on the workmen also. In case of
mines, the application should be made within 30 days from the date of commencement of lay-off, for
permission to continue lay-off. (Sec.25 M)

Lay-off compensation
• The right of a workman to lay-off compensation is designed to relive the hardship caused by
unemployment due to no fault of the workman. It is based on humane public policy. The
employer of any Factory, mine or plantation establishment, employing 50 or more workmen
on an average per working day, is required to pay compensation to the workmen being laid-off.
The compensation shall be payable @ 50% of basic wages and dearness allowance for all days
of lay-off.(except weekly holidays)

Condition for entitlement to compensation :-- A worker (other than badli or casual worker) who is
on the muster rolls of the establishment and who has been in continues service under an employer for
at least one year, shall be entitled to compensation on being laid-off. (Sec. 25 –C)

A worker is said to have been in continues service:-

1. For a period, if he has been in uninterrupted service, including service interrupted by

sickness, authorized leave, accident. Strike (legal), lock-out on cessation of work not6 due
to employee’s fault,
2. For one year, if he has actually worked for at least 240 days (190 days in case of
mine)during the preceding 12 months,
3. For six months, if he has actually worked for at least 190 days (95 days in case of mine)
during the preceding 12 months. (Section 25-B)

A laid-off worker is, however, not entitled to any compensation:--

(a) If he refuses to accept to an alternative employment in the same establishment or in any other
establishment of the same employer situate within 5 miles, and such alternative employment does not
involve any loss of pay or require any special skill,

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Class –LL.B (HONS.) ISEM. Subject – Labour Laws

(b) If he fails to present himself for work at the establishment, at the appointed time during normal
working hours at least once in a day,
(c) If such lay-off is due to a strike or go slow on the part of the workmen in another part of the
establishment.

• The employer of any factory, mine or plantation establishment, employing 50 or more

workmen on an average per working day, is required to pay compensation to the workmen
being laid off. The compensation shall be payable @ of 50 % of basic wages and dearness
allowance, for all days of lay-off except weekly holidays. (Section.25-C ) .

Retrenchment

Retrenchment means termination by the employer, of the service of a workman for any reason what so
ever, but excludes:-
a) Dismissal inflicted by way of disciplinary action,
b) Voluntary retirement of the workman,
c) Retirement on reaching the age of superannuation,
d) Termination as a result of non-renewal of contract of employment, and
e) Termination due to continued ill-health of the workman

In case of factories, mines and plantation establishments employing 100 or more workers on an
average per working day in the preceding 12 months, the employee cannot retrench any workman
without obtaining prior approval of the government, by submitting an application in the prescribed
manner, stating the reasons for the intended retrenchment. A copy of the application should be served
on the workman also. (Sec 25)N)

If any worker is retrenched without obtaining the permission or the permission for the retrenched has
been refused, then such retrenched shall be deemed to be illegal and the workman shall be entitled to
all the benefits under law from the date of such retrenchment, as if no notice had been given to him.

Notice Pay – The employer of every factory, mine or plantation establishment, employing 50 or more
workers on an average, is required to serve 1 months’ notice of his intension to retrench the workman,
in the prescribed form to every workman who has been in continues service for at least 1 year & who
is being so retrenched. A copy of the notice is to be sent to the government or prescribed authority
also.

Compensation –
Employer is liable to pay compensation to each workman who is been retrenched which shall be equal
to 15 days average pay for every completed year of continues service or any part thereof in excess of 6
months [sec. 25 (F)]

Example – Mr. X was retrenched on 5th Jan., 2013. He drew wages of Rs.10, 000 p.m. during the period
October to December 2012. He completed 26th year of his continues service on 10th march 2012

Solution: Average Pay =Total wages for the Months Oct., Nov., & Dec. 2012 ÷ 3 = Rs. 10,000
15 days average pay = Rs. 5,000-
No. of completed years of continues service or part thereof in excess of 6 months = 27 years

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Class –LL.B (HONS.) ISEM. Subject – Labour Laws

Retrenchment Compensation = 27 × 5000 =1, 35,000

The formula of last come first go is being adopted before giving retrenchment Sec. 25 G

Closure of an Undertaking–
Closure means the permanent closing down of a place of employment or part thereof. An employer
who intends to close down an undertaking, wherein 50 or more workman are employed or were
employed during the preceding 12 months, has to serve a notice on the government, at least 60 days
before the date of the intended closure, stating reasons for the same.(sec. 25(FFA)
In case an undertaking employing 10 0or more workers on an average in the preceding 12 months, has
to obtain prior approval of the government, at least 90 days before the date of the intended closure,
stating in the application, the reasons for the same. (Sec. 25 (O))
However, undertakings engaged in the construction of buildings, bridges, roads, canals, dams, etc. are
not required to serve the notice or obtain the approval of the government, as required in other cases.
Note: Every employee who has been in continuous service for at least 1 year, shall be served notice
and paid compensation same as paid in the case of retrenchment.

Obligations of the
employers

Obligations of Employers
The obligations of the employers under the provisions of the act are as follows:---
(1) Not to make any change in the service conditions of the workmen, without giving a notice as
prescribed under section 9A.
(2) To constitute works committee and to ensure that it works properly.
(3) To assist the conciliation officer/ board and the arbitrator in reconciling any disputes.
(4) To implement all agreements, settlements and awards.
(5) to maintain a muster-rolls of the workmen employed in the establishment, even at the time when
workmen have been laid off, and to ensure that the names of the workmen who present themselves for
work at the appointed hours, are entered therein, section 25-D.
(6) Not to declare, support or finance an illegal lock-out, in the establishment.
(7)Not to lay-off or retrench any workman or close down an undertaking, without obtaining prior
approval of the government if so required.
(8) To pay lay-off, retrenchment and closure compensation, and compensation to workmen for illegal
lock-out, as prescribed under the provisions of the Act.
(9) Not to indulge in unfair labour practices.

Obligations of Employees
Obligations of Employees
• The workmen of an establishment are obliged:---
(1) To assist and co-operate with the conciliation officer/ Board, arbitrator and other authorities, in
resolving any industrial dispute.
(2) Not to participate in, support or finance an illegal strike.
(3) To abide by all agreements, settlements and awards.
(4) Not to indulge in unfair labour practice.

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Class –LL.B (HONS.) ISEM. Subject – Labour Laws

Rights of Employers
• The important rights of the employers are:--
(1) Right to retrench or lay-off workers declare lock-out and close down an undertaking, in
accordance with the provisions of the act.
(2) Right to appeal against the awards of the labour court or industrial Tribunal, before the High
court.

Rights of Employees
• The important rights of the employees are :--
(1) Right to be informed by means of a notice, before any change is made in the service conditions, or
before lock-out, lay-off, retrenchment or closure of the undertaking.
(2) Right to receive compensation for lay-off, retrenchment or closure, in accordance with the
provisions of the Act.
(3) Right to recover any legal dues under an agreement, settlement, award or under any provisions of
the Act, through the government, section 33 C (2).
(4) Right to be represented by an officer of a registered trade union or any other workman, in relation
to any industrial dispute, section 36.
(5) Right to appeal against an award of the labour court or industrial tribunal.

Factories Act, 1948

Introduction:-
The Factories Act, 1948, is divided into several chapters comprising of a total 141 sections and
supplemented by three schedules. The First Factories Act in India was passed in 1881.It was designed
primarily to protect children and to provide for some health and safety measures. It wasfollowed by
new Acts in 1891, 1911, 1922 and 1934. Since then, it has been amended from time to time. In view of
the large and growing industrial activities in the country a radical overhauling of the law relating to
factories was necessary. Hence the Factories Act 1948 was passedby the central Government. The
factories (amendment) Act, 1987 have brought in some drastic changes in the factories Act, 1948 and
has given it a new complexion. It provides safeguards against use and handling of hazardous
substances and procedures for setting up hazardous industries were laid down.
The act has been promulgated, primarily to provide safety measures and to promote the health and
welfare of workers employed in factories. Overall main objective of the factories Act are:--
1. To regulate working conditions in factories, and
2. To ensure that basic minimum requirements for the safety, health and welfare of the factory
workers are provided.
3. Besides, the Act envisages regulating the working hours, leave, holidays, overtime,
employment of children, women and young persons, etc.

Scope and coverage

The factories Act, 1948 came into force on the 1st day of April, 1949 and extends to the whole of India
and unless otherwise provided, it is applicable to all factories including Government factories.(Section
116).
A “Factory” as per section 2 (m) of the Act, means ‘any premises including the precincts thereof-
(i) wherein 10 or more workers are employed are were employed on any day of the preceding 12
months and a manufacturing process is carried on with the aid of power, or (ii) wherein 20 or more

26
Class –LL.B (HONS.) ISEM. Subject – Labour Laws

workers are employed on any day of the preceding 12 months and a manufacturing process is carried
on without the aid of the power’.
Thus, factory is a premises where a manufacturing process need not end in a substance being
manufactured but it essentially involves transformation, so that the article becomes commercially
known as another and different from that at which it begain its existence.
Factory, however, does not include a mine covered under the mines Act, 1952, a mobile unit of the
armed forces, a railway shed or a hotel, restaurant or eating place.
The state governments are empowered to make the rules for ensuring the administration of the
provisions of the Act in their respective states. (Section 76).
The Act covers all workers directly or through or by any agency including a contractor, with or
without the knowledge of the principal employer, whether for wages or not, in any manufacture
process or any kind of work incidental or connected thereto. There must be nexus between the
employment of the worker concerned and the manufacturing process.

Administrative set up

The state Government is the chief administrative authority that ensures enforcement of the Factories
Act, in its state through the inspectorate. The inspectorate is headed by a chief inspector who is
assisted by such additional chief inspectors, deputy, joint inspectors, inspectors and other officers, as
may be appointed by the state Government. The state Government also appoints doctors or surgeons
for certifying children’s and adolescents as fit for work in factories. On the direction of the central
Government the state Government has powers to---
1. apply all or any of the provisions of the Act to any factory employing less than the required
workers,
2. exempt any factory or public institution from any or all of the provisions of the act, except
section 67, for not more than 3 months at a time;
3. Make rule for enforcement of the Act, registration and licensing of factories and collection of
license fee.

Obligations of the employers

Chapter I (Approval, Registration and licensing of the Factory)

1. Compulsory Approval (section6) -- Prior approval of the State Government by the occupier of
the factory for the purpose of any construction or extension of any factory.
2. Registration/ license and notice by occupier (section 6&7) --- The occupier of the factory is
also require to get the factory registered for obtaining a license for operating it and send a
notice of occupation to the chief inspector of factories, at least 15 days before he begins to
occupy the factory. The application for the registration and notice of occupation shall be
submitted in triplicate in the prescribed form along with the proof of payment of the
prescribed fees and such other information as may be required by the licensing authority.
3. The application cum notice generally contains the name and situation of the factory, name and
address of the owner, occupier and manager of the factory; address to which communication
relating to the factory may be sent; nature of the manufacturing process; total rated horse
power installed; number of workers likely to be employed in the factory, etc. All
establishments which come within the scope of the Act for the first time are required to send
the notice within 30 days from the date of Act becomes applicable to them. Besides, factories
which carry on manufacturing process for less than 180 working days during the year are
required to send such notice at least 30 days before resuming work. If the CIF is satisfied about

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Class –LL.B (HONS.) ISEM. Subject – Labour Laws

the particulars submitted in the application, the license for operating factory shall be granted
which shall be valid up to next 31st December. It is subject to renewal every year in the
prescribed form at least 30 days before its expiry, along with the prescribed fees which is same
as for grant for license

4. Notice of change of manager: -- whenever a new manager is appointed, the occupier must
intimate the inspector and the chief inspector in the prescribed form, within 7 days from the
date he takes over the charge.

Chapter-II (Inspecting staff-Appointment of Inspectors, their powers and appointment of

certifying surgeons- Section 8,9and 10)

Section 8 of the Act provides for the appointment of the Chief-Inspector, Additional chief Inspectors,
Joint Chief Inspectors, Deputy Chief Inspectors, and Inspectors. According to this section, the state
Government may, by notification in the official Gazette, appoint any person to be a Chief Inspector to
exercise the powers conferred on him by the Factories Act. It may assign to the Inspectors such local
limits as it may think fit.
All such Inspectors and officers appointed by the state Government under section 8 of the act is
deemed to be a public servant within the meaning of the Indian penal code, 1860.

Section 9 of the Act prescribe the powers of the Inspectors. As per this an Inspector may, within the
local limits for which he is appointed---
 He can enter into the premises of any Factory along with assistants who are in the service of
the Government or any or other public authority or with an expert,
 He can make examination of the premises, plant, machinery, article or substance,
 He can inquire into any accident or dangerous occurrence (whether resulting in bodily injury,
disability or not) and can record statement of any person on the spot or otherwise,
 He can demand the production of any prescribed register or any other document relating to
the factory,
 If he is of opinion which he has reason to believe, that any offence has been committed under
the Act, he can take copies of any register, record or other document and also seize them,
 He is empowered to direct the occupier that any premises or any part thereof or anything lying
therein shall not be disturbed for the purpose of examination,
 He can also take photographs, recording and measurements of anything which he consider
appropriate for the purpose of examination and inquiry,
 He can order fo0r the medical examination of the young person working in a factory, (Sec.75)
 He can take sample of any substance used or intended to be used, in a factory for the purpose
of finding out if the substance is injurious to the health of the workers (Sec.91).

According to section 10 of the state Government may appoint qualified medical practitioners to be
certifying surgeons for specified local limits or factories.

The certifying surgeon shall carry out such duties as may be prescribed in connection with—
 The examination and certification of young persons,
 The examination of persons engaged in factories in dangerous occupations or processes, and
 The exercising of such medical supervision as may be prescribed for any factory where- it is
likelihood that occupational disease may occur to the workers due to any substance or of any
manufacturing process, or young persons are likely to be engaged and are likely to be effected
by it.

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Class –LL.B (HONS.) ISEM. Subject – Labour Laws

To provide Health Measures

Chapter-III
5. The occupier of factory is obliged to undertake following measures for good health and
physical fitness of workers—( section 11 to 20 of the act )
(a) Cleanliness and disposal of waste and effluents—The occupier is required to
keep the factory premises clean and free from waste and effluvia. He shall make
arrangement for sweeping and removing dirt and refuse daily, cleaning with
disinfectant, effective treatment and disposal of wastes and effluents and
maintaining proper drainage. All inside wall, partitions, staircases and roofs shall
be white washed once in 14 months, or painted once in 3 years with washable
paint or once in 5 years with non-washable paint. Besides, all doors, windows
frames, other wooden or metallic framework and shutters should be painted at
least once in 5 years. The dates of white washing, painting or varnishing etc.
should be recorded in the prescribed register. (Section 11&12)
(b) Ventilation, Temperature and Humidity: -- The factory premises should be
adequately ventilated by circulation of fresh air and comfortable temperature
should be maintained in every work room. Besides, artificially increased humidity
should be controlled by use of purified water. 9Section 13)
(c) Prevent Dust and Fumes: - Accumulation and inhalation of dust and fumes
injuries to health of workers should be prevented by use of exhaust fans and other
safeguards.(Section 14). Artificial humidification –Section 15.
(d) Avoid overcrowding: -- The work place should not be over crowded by workers
and minimum space of 14.2 c.mtrs, per worker in a new factory and 9.9 c. mtrs. Per
worker in an existing factory should be prepared.(Section 16)
(e) Lighting and drinking water :-- Sufficient and suitable natural and artificial lights,
wholesome drinking water at suitable points and cool water in factories employing
250 or more workers during hot season, should also be provided.(Section 17 &18)
(f) Wash rooms and spittoons: -- Every factory should provide adequately lighted
and ventilated wash rooms and urinals for male and female workers separately,
and spittoons at suitable locations. All wash rooms and spittoons should be kept
washed and cleaned with detergents and disinfectants.(Section 19 & 20)

To undertake safety measures

Chapter-IV
5. :-- Every factory must take appropriate safety measures as provided under the Act, or the rules
framed there under, viz,;--(section 21 to 41 )
(a) Fencing of all dangerous and moving parts of the machinery while in motion or use, providing
sufficient space for workers to operate self-acting machines. Young persons are not supposed to work
on any dangerous machine without adequate training and supervision. Besides, no woman or child is
to be employed in any part of a factory for pressing cotton in which is a cotton opener is at work. No
person shall be employed to lift, carry or move excessive loads.
(b) Keeping floors, stairs, steps, etc, free from obstructions and slippery substances and provided with
substantial handrails, covering of all dangerous pits, sumps, opening in floors etc.
(c) Taking necessary precautions and providing screens or goggles for protection of eyes, precautions
to prevent exposure to dangerous fumes, gases or dust and measures to prevent accumulation of such
gases, fumes and dust.

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Class –LL.B (HONS.) ISEM. Subject – Labour Laws

(d) Inspection or examination of all transmission machinery must be conducted by a trained adult
worker and their names to be entered in a register kept for the same purpose.
(e) Providing safe means of escape in case of fire, necessary firefighting equipment and training
workers about use of such equipment.
(f) Appointing safety officers in factories employing 1000 or more workers, or where workers are
exposed to risks of bodily injury poisoning or disease or any other hazard to health.
(g) The inspectors are empowered to inspect any factory building, plant or machinery and ensure that
these are maintained in safe conditions and are not detrimental to the health of workers.

Welfare amenities
Chapter-V
6. (section 42 to 50 ) :-- Every factory shall provide adequate and suitable facilities for
(a) Washing and drying of wet clothes and storing of clothes not worn during working
hours;(Section 42,43)
(b) Sitting arrangements for employees who are requires to work in standing position
for long duration;(Section 44)
(c) First- Aid boxes or cupboards equipped with the prescribed contents ( at least one
box for every 150 workers ) shall be maintained under the charge of a person
certified for the same and readily available during working hours in the
factory;(Section 45)
(d) Ambulance room (when ordinarily 500 or more workers are employed in the
factory). The ambulance room shall be of the prescribed size, having equipment’s
and medical and nursing staff, which shall be available during working hours ;(
Section 45(4)).
(e) A canteen (when ordinarily 250 or more workers are employed in the factory). The
canteen shall be suitably located and sufficiently lighted and ventilated. It shall be
of the prescribed size, equipped with necessary furniture, utensils, etc. and
operated on non-profit basis.(Section 46)
(f) Rest-rooms/shelters and lunch rooms with provision for drinking water (when
ordinarily 150 or more workers are employed in the factory). The rest rooms and
lunch rooms should be sufficiently lighted and ventilated, suitably furnished and
kept in a clean condition.(Section 47)
(g) Crèches (when 30 or more women workers are employed in the factory) which
should be sufficiently ventilated and adequately furnished and equipped. Provision
for a washroom and supply of milk and refreshment for children, shall also be
ensured. Besides, if in a factory ordinarily 500 or more workers are employed, the
employer shall appoint such welfare officers as may be prescribed.The state
Government may prescribe the duties, qualifications and conditions of service of
welfare officers (Section 48& 49).
(h) The state Government is empowered to make rules as regards to all these welfare
provisions.

Working Hours, Holidays and overtime

Chapter-VI--
7. Working Hours, Holidays and overtime:--
(a) Restriction on employment of children and adolescent---- No child below the
age of 14 is to be employed in any factory (sec.67). Besides, a child between 14 th

30
Class –LL.B (HONS.) ISEM. Subject – Labour Laws

and 15ty year of age or an adolescent (below 18 years) is not to be employed

unless he is certified to be fit for work in a factory by a certifying surgeon. This
certificate is valid for a period of one year and it should be kept in safe custody with
factory manager and the child or adolescent has to carry with him while at work a
token giving reference to such certificate (sec.68 & 69).
(b) No dual Employment--- No worker whether adult or child, is to be employed on
any day on which he has already worked in any other factory (sec.60 & 71(4).
(c) Working Hours --- The working hours for an adult worker or an adolescent
certified to work as an adult, should not exceed 48 hours in a week and 9 hours in a
day, while for a child the working hours should not exceed 4-1/2 hours in a
day(sec. 51, 54 and 70 (1A). women workers, female and male adolescent below 17
years, should not be engaged in any work between 7 p.m. and 6 a.m.(sec.66 &
70(1A). Further, no child is to be engaged in any work during the night or between
10 p.m. and 6 a.m. (sec. 71 (1).
(d) Rest intervals and spread over—every worker is to be allowed at least half-an-
hour rest interval after a maximum working of 5 hours at a stretch. The total hours
of work and rest are to be spread over not more than 10-1/2 hours in a day for
adult and not more than 5 hours/ one shift in a day for children (sec. 55, 56 & 71
(2).
(e) Weekly Holidays-- Every worker has to be allowed one holiday in a week, on any
day so that it does not result in more than 10 days continuous work without a
holiday. Whenever a worker is required to work on a weekly holiday he is to be
allowed a compensatory holiday for each holiday so lost within the same month or
within two months immediately following that month (section 52, 53 and 71 (3). A
record of compensatory holidays shall be maintained in the prescribed attendance
register.
(f) Overtime --a worker working for more than 9 hours any day or for more than 48
hours in a week, shall be entitled to wages in respect of such overtime work at
twice the ordinary rate of wages Sec.59 ). A register of overtime muster roll is also
to be maintained in the prescribed form.
(g) Notice of period of work. (Section 61)- A notice of period of work for adult
workers shall be displayed and correctly maintained in every factory. It shall show
clearly for every day the periods during which adult workers may be required to
work. The notice shall be in English and in a language understood by the majority
of the workers in the factory. It shall be displayed at some conspicuous and
convenient place at or near the main entrance to the factory and shall be
maintained in a clean and legible condition (Section 108(2) )
(h) Registers of workers.
(i) Leave with wages--- Secs.78 to 84 (Chapter VIII) provide for the grant of a certain
period of leave with wages to workmen. According to section 78 of the Act, the
provisions relating to annual leave with wages as contained in chapter VIII from
secs.78 to 84 of the Act shall not prejudice any rights of workers under any law,
award or agreement (including settlement) or contract of service. When all these
things provides for a longer period of leave with wages than under the provisions
of secs.78 to 82, the worker shall be entitled to such annual- Leave of 1 day for
every 20 days of work performed by him during the previous calendar year, if
he/she is an adult and leave of 1 day for every 15 days of work performed by him
during the previous calendar year, if he/she is a child. All leave are allowable with
wages and shall be exclusive of all holidays whether occurring during or at either
end of the period of leave.

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Class –LL.B (HONS.) ISEM. Subject – Labour Laws

For computing the period of 240 days, the days of lay-off, maternity leave to a
female worker not exceeding 12 weeks, and the leave earned in the previous year
shall be included in this period of 240 days, but he/she shall not earn leave for
these days.

Leave not availed of during the year, can be carried forward up to 30 days in case
of an adult and up to 40 days in case of a child. However, refused leave can be
carried forward to next year without any limit. Leave not availed cannot be used
for giving notice of discharge/dismissal.
A worker may apply in writing to the manager of the factory, except in caseof
illness, at least 15 days before the date on which he wishes to avail any or all of the
leave allowable to him. In case of public utility service the application shall be
likewise be made at least 30 days before the date on which the worker wishes his
leave to begin. But the number of times the leave may be taken during any year
shall not exceed 3 time.

A worker who has been allowed leave for more than 4 days in case of an adult and
more than 5 days in case of a child, are entitled to advance payment of wages of the
leave allowed.

All the workers and their nominee are entitled to wages in lieu of leave in situation
like discharge, dismissal, quitting employment, dies while in service. Where the
worker is discharged or dismissed or quits employment, he shall be paid wages
before the expiry of the second working day from the date of such discharge,
dismissal or quitting, and where the worker is superannuated or dies while in
service, he shall be paid wages before the expiry of the 2 months from the date of
such superannuation and to his nominee in case of his death. The manager of the
factory is required to maintain leave register.
8. Display notices, Maintain registers and submit Returns
9. Notice of Accidents, Dangerous occurrences and Diseases

Penalties and Procedure

10. Penalties and Procedure: -- Section 92 to 106 (chapter X) provide for certain offences and
procedural matters. These penalties serve as a deterrent for the commission of offences.
General penalty for offences U/S 92 of the Act—If in any Factory there is any contravention
of any of the provision of the Act or of any rules made there under, the occupier and manager
of the factory shall each be guilty of an offence and punishable with jail for a term up to 2 years
or with fine up to Rs. One lakh or with both. If the contravention is continued after conviction,
they shall be punishable with a further fine which may extend to Rs. 1ooo/ for each day on
which the contravention is so continued.
In case of contravention of any of the provisions of chapter IV (dealing with safety) or under
section 87(dealing with dangerous operations) or any role made there under, has resulted in
an accident causing death or serious bodily injury, the fine shall not be less than Rs. 25
thousands in case of an accident causing death and Rs. 5 thousand in the case of an accident
causing serious bodily injury. (Proviso to sec.92).
Enhanced penalty after conviction, if the same person is found guilty of the same offence, he
shall be punishable on a subsequent conviction with jail for a term which may extendto 3 years

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Class –LL.B (HONS.) ISEM. Subject – Labour Laws

or with fine which shall not be less than Rs. Ten thousand but which may extend to Rs. Two
lakh or both.

TRADE UNION ACT,1926

Introduction
“United we stand, divided we fall “is a common in the field of working class which is required to deal
with the Employer for securing their demands. It is a matter of simple knowledge that the Employer is
generally more powerful as compared to the wage earning workers. The workers fulfill their
deficiency by forming themselves into an organization. It is this organization which makes them
strong.
Trade union is a voluntary organization, there can be no compulsion from any source, even by law.
The TU Act, 1926 is a procedural law.
The TU, Act, 1926 is one of the old enactments in the field of labour laws, but it is a conservation piece
of legislation inasmuch as it deals only with the registration of the trade union and the legal status of a
registered trade union. Registration makes it a corporate person and confers a legal status.

The Growth of the trade unions:- The setting up of large-scale industrial units involving widespread
use of machinery, changes in working and living environment of workers, concentration of industries
in large towns, and the exploitative tendencies of the employers brought the workers togather to
maintain and improve their bargaining power against the employers. The consequence was trade
unions which have now come to symbolize—
 Workers right to organise,
 Their right to press their demands collectively and to go on strike if their demands are not
accepted.
The establishment in 1919 of the International Labour Organisation had its influence on the growth of
unions in India. While some unions chose to operate independently and confine their activities to an
industrial Centre or unit, others felt the need for coordination of their activities at the national level.
The formation in 1920 of the All India federation, namely All India Trade Congress, was the result of
these urges. The passing of the Trade Unions Act, 1926 gave formal recognition to the workers right to
organise.

History of Trade union law in India

• Trade union and their activities were not considered lawful in the beginning anywhere in the
world. This was so in India also. Until 1926, there was no law in India for registration and
protection of trade unions.
• In the year 1920, when a suit was filed against the officials of the Madras Textile labour
union by Binny& company, the High court of Madras, following the common in England,
granted an injunction restraining the union officials from influencing the workmen to break
their contracts with employers by striking. It was than they felt that some legislative
protection of trade union was necessary. Mr. N.M. Joshi, than General Secretary of All India
Trade union congress, successfully moved a resolution in the central legislative Assembly
seeking introduction of some law by the government for protection of Trade unions. But this
Act was enforced only from 1st June 1927.

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Class –LL.B (HONS.) ISEM. Subject – Labour Laws

Object of the Act

• The object of passing this act was to make necessary provisions in regard to the registration of
trade unions and to define the law relating to registered trade unions. The act was passed to
regulate:--
• (1) Conditions governing the registration of trade unions,
• (2) Obligations imposed upon a registered trade unions , and
• (3)Rights and liabilities of registered trade unions.

Scope and coverage

• The Act applies to registered trade unions. It extends to the whole of India including the state
of J&K.
• Section 14 of the act provides that the following acts shall not apply to the registered trade
unions—
• (a) The societies registration act, 1860,
• (b) The cooperative societies act, 1912,
• (c) The companies Act, 1956.

Meaning of Trade union

• In common terms, trade union means an association of workers in a particular trade or
industry.
• As ordinarily understood, trade union means a combination formed for the purpose of
regulating relations between workmen and employer. The definition of a trade union given in
the T.U. Act 1926, however, includes a combination formed for the purpose of regulating the
relations not only between employer and workmen but also between workmen and workmen
or Employers and Employers or for imposing restrictive conditions on the conduct of any trade
or business and includes a federation of two or more trade unions. (section 2(h) )

Registration of Trade union

• At least 7 members of the Trade union have to make an application in the prescribed form,
with prescribed fees, to the registrar of the trade unions where the H.O. of the union is located,
for its registration. The application must be accompanied by a copy of rules of the trade union,
normally known as its “constitution”, and should give particular about its name, address, its
members and its office bearers. (Section 4&5)The certificate of registration will be conclusive
evidence that the trade union has been duly registered under the Act. Section 9.
• As per amendment made to the act, it is now necessary that a regd. Trade union shall at all
times continues to have not less than 10% or 100 of the workmen, whichever is less, subject to
a minimum 7, engaged or employed in an establishment or industries with which it is
connected, as its members, Section 9-A.
• As per section 14 of the act there is a bar of registration under other law.
• The registrar may call for further information for the purpose of satisfying himself that an
application for registration complies with the provisions of section 5, or that the trade union is
entitled to registration under section 6. He may refuse to register the trade union until such
information is supplied.
• The registrar may also ask the person making application for registration to change the name
so proposed of the trade union if in his opinion, is identical or so nearly resembles with
existing trade union as likely to deceive the public or the members of either trade union. He
shall not register the trade union unless such alteration in the name has been made. (Section
7).

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Class –LL.B (HONS.) ISEM. Subject – Labour Laws

• The registrar, on being satisfied that the trade union has complied with all the requirement of
this Act in regard to registration, shall register the trade union by entering in a register, to be
maintained in such form as may be prescribed. (Section 8).
• The registrar, on registering a trade union under section 8, shall issue a certificate of
registration in the prescribed form and such certificate shall be the conclusive evidence that
the trade union has been duly registered under the Act. (Section 9).
• All communications and notices to a registered trade union may be addressed to its registered
office. Notice of change in the address of the head office shall be given within 14 days of such
change to the registrar in writing, and the changed address shall be recorded in the register
maintained by the registrar under section 8. (Section 12)

Cancellation of Registration and appeal

• The RTU can withdraw or cancel a certification of a trade union if – the trade union applies for
the cancellation or the registrar is satisfied that the certificate was obtained by fraud or
mistake, or trade union has ceased to exist, or the trade union has willfully contravened any
provisions of the act, in all such situations RTU may after giving 2 months’ notice and hearing
to the union. (Section 10).
• In cases of obtaining the registration by fraud or mistake and where the trade union has ceases
to exist, the registrar has to give to the trade union not less than 2 months previous notice in
writing specifying the ground on which it is proposed to withdraw or cancel the certificate of
registration. No such notice is required in case if the application has been moved by the trade
union for the cancellation of the certificate of registration.
• If the registration of a trade union is refused or if a certificate of registration is withdrawn or
cancelled, any person aggrieved or the trade union may appeal to the court within the
prescribed period. (Section 11)

Provisions to be made in the rules: - A trade union is entitled to registration if its executive is
constituted in accordance with the provisions of the Act and its rules provide for the following
matters:-
• As per section 6 of the act the following things must be included in the rules of a trade
unions:-
• The name of the trade union,
• The whole of its objects,
• The whole of the purposes for which the general funds of the trade union shall be applicable
under section 15,
• The maintenance of a list of the members of the trade union and adequate facilities for its
inspection thereof by the office-bearers and members of the trade union,
• admission of ordinary members actually engaged in industry, admission of honorary
members,
• The payment of subscription by the members of the trade union which shall be not less the
prescribed fee,
• The conditions under which any members shall be entitled to any benefits assured by the rules
and conditions under which fines may be imposed on the members,
• The manner in which its constitution can be amended or rescinded, appointment and removal
of office bearers, safe custody of funds, annual audit of accounts and the manner in which the
union can be dissolved.

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Class –LL.B (HONS.) ISEM. Subject – Labour Laws

Utilization of funds
• Utilization of funds can be made only for payment of salaries and allowances to the office
bearers, payment of expenses on administration of the union, prosecution or defense of any
legal proceedings, conduct of any trade disputes, allowances to members or their dependents
on account of death, old age, sickness, accident or unemployment, provisions of education,
social or religious benefits for members, periodical publications etc. (section 15).
• A separate political fund can also be constituted, as per section 16 of the act. The office bearer
be above the age of 18 years and he should not be a convict for any offence involving moral
turpitude during the period of last 5 years, (section 21-A)

Advantage of registration or legal status of a trade union

• Although it is not legally necessary for a trade union to be registered, registration does bring
with it certain advantages. Some of the advantages gained by registration as given in sections
13,17, 18 and 19 of the act are as follows :--
• It becomes a body corporate by the name under which it is registered andbecomes a legal
entity distinct from the members of which it is composed.
• It has perpetual succession and a common seal.
• It can acquire and hold moveable and immovable property and can enter into a contracts.
• It can sue and be sued by its own name.
• Its office bearers or members cannot be prosecuted for criminal conspiracy for following its
legitimate objects. It enjoys immunity from civil suits in respect of acts of a trade union.
• Any agreement between its members is not void or voidable even if its objects are in restraint
of trade.

Members of a registered trade union (Section 21)Any person who has attained the age of 15 years
may be a member of a registered trade union. This is subject to any rules of the trade union to the
contrary. Subject to the rules of the trade union such member may enjoy all the rights of a member,
but he cannot be an office-bearer of the trade union until he attains the age of 18 years (Section 21-
A(1) (i)).

Dissolution of Trade Union

• A registered trade union can be dissolved in accordance with the rules of the union. A notice of
dissolution signed by any seven members and the secretary of the union should be sent to the
Registrar within 14 days of the dissolution.
• On being satisfied, the Registrar shall register the notice and the union shall stand dissolved
from that date.
• The funds of the union shall be divided by the Registrar amongst its members in the manner
prescribed under the rules of the union or as laid down by the Government.(Section 27).
Amalgamation of Trade Unions
• Any registered trade union may amalgamate with any other unions, provided that at least 50
% of the members of each such union record their votes and at least 60 % of votes so recorded
are in favor of amalgamation. (Section 24).
• A notice of amalgamation signed by the secretary and at least seven members of each
amalgamating union, should be sent to the registrar, and the amalgamation shall be in
operation after the registrar registers the notice. (Section 25).

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Class –LL.B (HONS.) ISEM. Subject – Labour Laws

Obligations of Registered Trade Unions

• Utilization of funds can be made only for payment of salaries and allowances to the office
bearers, payment of expenses on administration of the union, prosecution or defense of any
legal proceedings, conduct of any trade disputes, allowances to members or their dependents
on account of death, old age, sickness, accident or unemployment, provisions of education,
social or religious benefits for members, periodical publications etc. (section 15).
• A separate political fund can also be constituted, as per section 16 of the act.
• The office bearer be above the age of 18 years and he should not be a convict for any offence
involving moral turpitude during the period of last 5 years, (section 21-A)
• Every registered trade union has to submit its audited statement of accounts in the prescribed
form to the registrar intimating changes in its rule, office bearers, and amalgamation etc.
failure to do so entails cancellation of registration. The regulations made under the Act also
require that the changes made about in the name of the union, office bearers, rules of the union
are to be intimated to the registrar for making entry in his official records.(Section 28).
• The account books and membership register of the trade union should be kept open for
inspection by any of its members or office bearers (Section 20).
• A copy of every alteration made in the rules of the union should be sent to the registrar within
15 days of making the alteration(Section 28(3).
• A trade union has a right to appeal againsed an order of the Registrar either refusing or
cancelling registration, to the Industrial Tribunal/ High Court within the prescribed time
(Section 11).

Submission of annual returns

• Every registered trade union has to submit its audited statement of accounts in the prescribed
form to the registrar intimating changes in its rule, office bearers, and amalgamation etc.
failure to do so entails cancellation of registration. The regulations made under the Act also
require that the changes made about in the name of the union, office bearers, rules of the union
are to be intimated to the registrar for making entry in his official records.

Problems of trade unions

• Multiplicity of unions, paucity of funds, want of membership and instability due to intra-union
rivalry, lack of understanding and leadership among its office bearers to promote interest of
members through collective bargaining while dealing with the Employer or Government
officials/ court requiring to adopt negotiation and representation. Lastly its affiliation with
central organizations like--- INTUC / AITUC / CITU / BMS /HMS etc. having political leaning
affect solidarity, collective bargaining, industrial peace.

The Payment of Wages Act, 1936

Introduction: In a country where even living wages are not paid to workers, the need to protect
wages earned by them can hardly be over- emphasized. Before the payment of wages Act, 1936 was
passed, evil of withholding wages; delays in paying wages and making unreasonable deductions out of
wages were quite prevalent.
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 industrial employees not
getting very high salaries and the provisions of the Act were enacted to safeguard their interest. It also

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