industrial dispute machinery

Effectiveness of

ID Machinery in India

Flow of the Presentation

• Note on Industrial Disputes Act , 1947• Machinery to settle disputes

• Central Industrial Relations Machinery

• International Perspective

• Legal Cases and Disputes under IDA

• Drawbacks, Improvements and Recommendations

Industrial Disputes Act 1947

• Object of the Act– To promote peace and good relations in Industry– To investigate and settle disputes

• Between employers and workers• Between workers• Between employers

– To prevent illegal strikes and lockouts– To give relief to workers in case of lay-off and

retrenchment– To promote collective bargaining

Important terms in ID law (1/3)

• Industry– Who can form the trade unions?

• In the case of the Central Machine Tools Institute, Bangalore (1978), it was held that employees of any establishment falling with in the meaning of the term ‘Industry’ under the ID act is presumed to be ‘trade and industry’ under the trade unions act, are entitled to form a trade union

– Definition as per section 2(j)“ any business, trade, undertakings, manufacture or calling by

employers and includes any calling or service, employment, handicraft or industrial occupation or avocation of workmen”


• Workman– Who can raise an industrial dispute?• A worker

– Apprentices are also workmen– Members of armed forces, civil personnel including in police or

prison services and managerial and supervisory personnel earning more than Rs 1600 p.m. are not considered as workmen

– Definition“ a worker is any person employed in industry to do

manual, clerical or technical work. His work may be skilled or unskilled. He may work for a remuneration or reward. His terms of employment may be either clearly stated or merely implied. ”


• Industrial Dispute– What is an industrial dispute?

• Any dispute is an industrial dispute if– It is between employer and employee/worker and worker/ or

employer and employer– It is connected with the employment/non employment/terms of

employment or conditions of employment of any person

– An industrial dispute may be individual or collective dispute• An individual dispute becomes an industrial dispute in case of

– Termination (whether dismissal, discharge or retrenchment)– It is taken up by a union or by a significant number of workers who

have direct interest in the dispute

Does the law work to strengthen Trade Unionism?

• No– The law encourages dependence on a third party, especially the

Government– The law is so complex that only trained professionals like

lawyers can interpret it– The government retains a great deal of power under the act. It

has the right to decide whether a dispute should go before a court

– The law stresses on individual more than collective rights

Machinery for settling Disputes

• The Act provides four procedures for preventing, investigating and settling disputes1. Works committee2. Conciliation3. Adjudication4. Voluntary adjudication and voluntary arbitration

1. Works Committee

• Expected to prevent disputes

• Handles issues related to amenities (canteen, drinking water,

rest rooms), recreation, medical services, health and safety

• Do not have the power to enforce decisions

2. Conciliation (1/2)

• Third party, usually a government officer (not a judicial

officer), mediates in dispute

• Either labour or management can seek his intervention. He

may intervene on his own in the case of public utilities

• The officer does not have the power to make a final order. He

can only persuade the parties to settle the differences

2. Conciliation (2/2)

• Conciliation ends when a settlement is

signed/failure report is submitted/ or the

dispute is referred for adjudication

• No lawyer is allowed in conciliation

3. Adjudication (1/4)

• This a judicial process where the dispute is sent to a

labour court or industrial tribunal for decision which

is binding unless set aside or modified by a higher

court

• Being a higher court, a tribunal can consider any

issue coming within the power of a labour court


• A labour court is competent to consider disputes over the following issues1. Interpretation and application of standing orders2. Discharge and dismissal of workers and grant of

relief to them3. Withdrawal of customary privileges4. The legality of strikes and lockouts5. Other matters not coming with in the sphere of

industrial tribunals


• Industrial tribunals are concerned over the following issues1. Wages and allowances2. Hours of work and rest intervals3. Leave and holidays4. Bonus, provident fund and gratuity5. Changes in shift hours not mentioned in standing orders6. Grades7. Rules of discipline8. Rationalization9. Retrenchment and closure


• National tribunal – to adjudicate disputes which involve industries in

more than one state– A dispute which the government considers to be

of national importance• A party dissatisfied by the award can file a writ

in the high court (Const. Art 226) or go to the supreme court (Const. Art 136)

4. Voluntary adjudication/arbitration

• The parties can together request the government to refer their dispute for adjudication

• The parties to the dispute can also refer their dispute voluntarily for arbitration

• An arbitrator’s award is binding and final which cannot be appealed against

• Voluntary arbitration is extremely rare in India

Amendments in Industrial Disputes Act (1947)

• Amplification of the definition of the Appropriate GovernmentIt is further clarified that “Central Government would be appropriate government for any company in which more than 51 percent of the paid up share is held by the Central Government, or any corporation, established by or under any law laid by the Parliament”

• Enhancement of wage ceiling in the definition of workers:The wage ceiling limit in the definition of workmen under Section 2(s) (iv) of ID Act 1947 has been enhanced from Rs. 1600 per month to Rs. 10000 per month.

•Industrial Tribunals will be connected to disputes relating to

Termination/Dismissal/Retrenchment/Discharge

In cases of retrenchment, discharge, dismissal or termination of services, the

workman can directly apply to Labour Courts/Tribunals after expiry of 45

days (within 3 years) from the date he has made the application

for reinstatement to the conciliation officer.

•A new chapter will be substituted for Chapter IIB titled as Grievance

Redressal Machinery

•Eligibility of qualification of Presiding Officers

•Changes in salaries and other terms and conditions of Presiding Officer

Strikes and LockoutsDefinition : Section 2(q) of the ID act defines the strike as a cessation of work

by a body of persons acting in combination or a refusal under a common understanding to work.

General prohibitions:Workers cannot strike under the following conditions1. When conciliation is continuing and for 7 days after it has ended2. When adjudication or arbitration is continuing and for 2 months after it

has ended 3. In public utilities a 14 day notices is requiredLegality of strikes:Three questions have to be answered to decide whether a strike is justified4. Is it motivated by demands unconnected with the grievances of workers5. Is it unnecessarily prolonged6. Has there violence by workers? Have they tried to cause harm or

damage?

Lockout

The ID act describes the lockout as temporary closure of the place of

employment, or suspension of work, or refusal by the employer to

employ persons employed by him

Some of the aspects of lockouts which are needed to be noted

1. A lockout is legal if it results from an illegal strike

2. The relationship of employer and employee continues to exits during

the period of lockout

Other Labour Laws (to be read along with Industrial Disputes Act)

• The Industrial Disputes Act, 1947 and Rules made there under.• The Industrial Employment (Standing Orders) Act, 1946 and Rules made thereunder.• The Contract Labour (Regulations & Abolition) Act, 1970 and Rules made thereunder.• Payment of Wages Act, 1936 in relation to Railways, Mines, and Air Transport Services and (in

the major Ports as Authorized by respective State Government) and Central Rules made In respect of above industries.

• The Minimum Wages Act, 1948 and Minimum Wages (Central Rules), 1950.• The Payment of Bonus Act, 1965 and Rules made thereunder.• Chapter VI A of the Indian Railways Act, 1989 (Hours of Employment Regulations).• The Child Labour (P&R) Act, 1986 and Rules made thereunder.• The Payment of Gratuity Act, 1972 and Rules made thereunder.• The Equal Remuneration Act, 1976 and the Rules made thereunder.• The Maternity Benefits Act, 1961 (in Circus Industry only).• The Inter-State Migrant Workmen (Regulation of Employment and Conduit ons of Service)

Act, 1979 and the Rules made thereunder.• Labour Laws (Exemption from furnishing Returns and maintaining registers by certain

Establishments) Act, 1988.• Building and other Construction Workers' (Regulation of Employment and Conditions of

Service) Act, 1996.

Central Industrial Relations Machinery (CIRM)

• The Organization of the Chief Labour Commissioner (C)) known as Central

Industrial Relations Machinery was set up in April, 1945

• It was then charged mainly with duties of prevention and settlement of

industrial disputes, enforcement of labour laws and to promote welfare of

workers in the undertakings falling within the sphere of the Central

Government

Organizational Structure of CIRM

• CIRM is headed by the Chief Labour Commissioner (Central)[ CLC (C) ]

• At the headquarters, CIRM has a complement of 25 officers who perform line

and staff functions.

• In the field, the machinery has a complement of 253 officers and their

establishments are spread over different parts of the country with zonal,

regional and unit level formations

Objectives of the CLC(C)’s Organization

• Promotion of peaceful and harmonious Industrial Relations in the Central

Sphere through prevention & settlement of I.Ds. in the Industries for

which Central Govt. is the appropriate Govt.

• Verification of the Trade Union's Membership.

• Enforcement of labour laws in central sphere.

Specific Functions of CIRM

• Prevention and settlement of industrial disputes;

• Enforcement of Labour Laws;

• Verification of membership of Trade Unions;

• Enforcement of Awards and Settlements;

• Conduct of inquiries into the breaches of Code of Discipline;

• Promotion of Works Committees and Workers' Participation in Management;

• Collection of statistical information;

International Perspective: Points of Comparison

• Technically, a Industrial dispute is a disagreement over a particular issue or group of issues in which there is conflict between workers and employers, or it can be a grievance expressed by workers and employers

Design of Dispute Resolution Mechanisms• The modes of dispute resolution that are practised in all these countries

are dialogue and negotiation (with grievance handling in some countries), conciliation and mediation, arbitration and court adjudication

Hypothetical Model: Modes of Dispute Resolution

Core Labour Standards

• ILO specified legal rights in the form of human, social and economic rights, there emerged another special classification called Fundamental Principles and Rights at Work, also known as core labour standards

• There are eight such core standards, two each on organizational rights, forced labour, non-discrimination and child labour

• Convention No. 87 on freedom of association and protection of the right to organize

• Convention No. 98 on the right to organize and collective bargaining• Convention No. 29 on prison labour • Convention No. 105 on forced labour• Convention No. 100 on equal remuneration • Convention No. 111 on discrimination in employment and occupation• Convention No. 138 on the minimum age for admission to employment • Convention No. 182 on elimination of the worst forms of child labour

• The following table shows the ratification status of these Conventions, including the year they were ratified, among the nine countries

C 87 C 98 C 29 C 105 C 100 C 111 C 138 C 182

Australia Yes (1973)

Yes (1973)

Yes(1960)

Yes (1960)

Yes (1974)

Yes (1973)

No No

China No No No No Yes (1990)

Yes (2006)

Yes (1999)

Yes (2002)

India No No Yes (1954)

Yes (2000)

Yes (1958)

Yes (1960)

No No

Japan Yes (1965)

Yes (1953)

Yes (1932)

No Yes (1967)

No Yes (2000)

Yes (2001)

Republic of Korea

No No No No Yes (1997)

Yes (1998)

Yes (1999)

Yes (2001)

Malaysia No Yes (1961)

Yes (1957)

Den. (1990)

Yes (1997)

No Yes (1997)

Yes (2000)

Philippines

Yes (1953)

Yes (1953)

Yes (2005)

Yes (1960)

Yes (1953)

Yes (1960)

Yes (1998)

Yes (2000)

Thailand No No Yes (1969)

Yes (1969)

Yes (1999)

No Yes (2004)

Yes (2001)

Viet Nam No No Yes (2007)

No Yes (1997)

Yes (1997)

Yes (2003)

Yes (2000)

• In India, according to the Industrial Disputes Act (1947), industrial dispute means any disagreement or difference between employers and employers, between employers and workers, or between workers and workers, which is connected with the employment or non-employment or the terms of employment or with the conditions of labour, of any person.

• In Japan, according to the Labour Relations Law (1946 and 1988), a labour dispute means a disagreement over claims regarding labour relations, arising between the parties concerned with labour relations.

• In China, according to the Regulations on the Settlement of Labour Disputes in Enterprises (1993), labour disputes pertain to all those arising out of dismissal, discharge or a lay-off of workers and employees and the resignation of workers and employees; those concerning implementation of relevant state policies on wages, insurance, welfare, training and labour protection.

• South Korea : Trade Union and Labour Relations Adjustment Act (1997)

• Malaysia : Industrial Relations Act (1967)

Strikes and lockouts in selected countries 1995–2006

Legal Cases

Bharat Bhawan Trust Vs. Bharat Bhawan Artists Association

• Artists filed a case accusing trust violates ID act

• Trust argued that it can not be considered as an Industry

• Court ruled in favor of the trust observing “The work they do is creative art-

Can by no stretch of imagination be termed as workman”

Recent Cases

G.M. Ongc, Shilchar vs Ongc Contractual Workers Union on 16 May, 2008

• The Union raised a dispute demanding the regularization of the services of its

members. This demand was resisted by the ONGC and on the failure of conciliation

proceedings, the State Government made a reference to the Industrial Tribunal.

• Tribunal awarded “their services be regularized in a phased manner with pay and

other allowances”

• ONGC appealed before High Court which restored the award given by tribunal .

Illegal Strike of Jet Airways’ Pilots

• Mass sick leave by the Jet Airways pilots

• Supreme Court judgments do recognise mass leave as being a concerted

action of absenteeism, which amounts to a strike

• Under the Industrial Disputes Act (IDA), any strike without giving notice

while conciliation proceedings are on is illegal and hence prohibited.

• A union also cannot legally go on strike within seven days of the conclusion

of conciliation proceedings.

• Mumbai High Court holds that the strike called by Jet Airways pilots is illegal

Recent Relevance

• Lockout of Manesar Plant of Maruti Suzuki

• The New Trade Union Initiative (NTUI) condemned government actions

and demanded Haryana Labour department to

1. Immediately declare the lockout at the Maruti Suzuki India Ltd.‘s

Manesar Plant to be illegal under the Industrial Disputes Act, 1947

2.Initiate prosecution proceedings against management of Maruti

Suzuki India Ltd. for indulging in unfair labour practices under Section 25

(t) and (u) of the Industrial Disputes Act, 1947

INFORMATION REGARDING STRIKES AND LOCKOUTS INDUSTRIAL DISPUTES ACT, 1947

Year No. of STRIKES LOCKOUTS No. of No. of ManDays

Strikes Strikes Workers Lost in

Lock-outs Affected Strikes

No. of Man No. of No. of Man (COL.2+5) (COL.3+6) Lock-outs

Workers Days Lock outs

Workers Days

Lost Lost

1 2 3 4 5 6 7 8 9 101990 181 28,462 4,38,939 27 4,456 3,16,000 208 32,918 7,54,939

1991 146 32,845 3,54,143 21 6,493 2,97,202 167 39,338 6,51,345

1992 134 19,778 2,15,114 26 9,767 2,26,594 160 29,545 4,41,708

1993 138 20,959 3,67,119 15 3,269 3,45,465 153 24,228 7,12,584

1994 106 27,022 3,69,323 8 1,734 2,85,066 114 28,756 6,54,389

1995 99 35,922 3,33,178 16 4,889 4,77,281 115 40,811 8,10,459

1996 129 1,20,310 15,20,598 17 6,083 3,12,354 146 1,26,393 18,32,952

1997 126 27,318 5,75,253 24 11,162 4,93,227 150 38,480 10,68,480

1998 112 22,747 4,05,870 18 6,237 2,30,108 130 28,984 6,35,978

1999 101 13,800 2,12,252 11 4,474 1,33,046 112 18,574 3,45,298

2000 62 12,678 1,31,373 9 3,952 86,390 71 16,630 2,17,763

2001 45 13,014 1,90,185 8 1,231 33,947 53 14,245 2,24,132

2002 42 8,123 58,633 8 1,671 28,197 50 9,794 86,830

2003 34 5,874 40,534 8 2,104 81,564 42 7,978 1,22,098

2004 29 2,970 38,005 7 3,195 1,04,171 36 6,165 1,42,176

2005 23 7,280 96,668 5 292 22,163 28 7,572 1,18,831

2006 16 4,703 64,095 4 3,302 39,406 20 8,005 1,03,501

2007 (P) 23 5,237 67,621 1 72 19,830 24 5,309 87,451

Selected State-wise Number of Case Under Industrial Disputes Act, 1947 Pending in Central Government Industrial Tribunal-Labour

Courts in India (As on 30th June, 2004)

Name of Central Government Industrial Tribunal Cum-Labour Courts

Pendency

Cases Application

Mumbai No. 1 $ 441 76Mumbai No. 2 699 366

Nagpur 500 NilDhanbad No. 1 2226 390Dhanbad No. 2 1103 93

Jabalpur 1555 650Kanpur 694 483

New Delhi No. 1 566 180New Delhi No. 2 545 131

Asansol 454 89Kolkata $ 199 129

Chandigarh No. 1 2254 308Chandigarh No. 2* Nil Nil

Jaipur 200 61Lucknow 396 41

Bangalore 527 157Ernakulam* Nil Nil

Chennai 582 20Hyderabad 641 1206

Bhubaneswar 408 104Guwahati* Nil Nil

Ahmedabad* 1377 1191

CASES OF REFERENCE UNDER SECTION - 10 (1)

OF THE INDUSTRIAL DISPUTES ACT, 1947

Year

Pending at the Received

Total

Total Pending

beginning during Disposed off at the end

of the year the year of the year

1 2 3 4 10 111990 1,932 15,934 17,866 15,736 2,1301991 2,130 15,413 17,543 15,137 2,4061992 2,406 15,675 18,081 15,694 2,3871993 2,387 15,286 17,673 14,558 3,1151994 3,115 12,975 16,090 13,041 3,0491995 3,049 13,582 16,631 14,575 2,0561996 2,056 12,926 14,982 12,277 2,7051997 2,705 14,129 16,834 14,386 2,4481998 2,448 16,141 18,589 15,947 2,6421999 2,642 14,506 17,148 14,357 2,7912000 2,791 14,985 17,776 15,120 2,6562001 2,656 12,048 14,704 12,844 1,8602002 1,860 10,689 12,549 10,315 2,2342003 2,234 9,628 11,862 10,381 1,4812004 1,481 9,274 10,755 8,982 1,7732005 1,773 8,717 10,490 9,180 1,3102006 1,310 7,051 8,361 7,256 1,1052007 1,165 6,777 7,882 6,439 1,343

2008 (June) 1,343 2,999 4,342 3,515 827

19901991

19921993

19941995

19961997

19981999

20002001

20022003

20042005

20062007

2008 (June)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Total Legal cases pending at the end of the year

Pending at the end of the year

Since number of cases filed in a year under IDA are decreasing and cases disposed off by the court are increasing, total pending cases are on decline.

Reforms Sought in ID Act

• Need to review the industrial disputes resolution system due to adoption

of economic liberalisation policy

• The government should be careful about being too rigid about labour laws

as this might hamper the growth requirements and act as a constraint.

• It also has to ensure that the compensations made available to the labour

are just and equitable.

• Speedy implementation of the second National Labour Commission’s

recommendations.

Measures to Increase Effectiveness

• Stronger works committee through continuous dialogue between

employers and employees to prevent disputes

• Encourage voluntary arbitration rather than dispute resolution through

adjudication

• Limited political influence

• More focus on collective rights than individual

• Introduction of permanent grievance machinery

Major Problems

• (Based on The Indian Industrial Relations System: Trying to

understand the dynamics of a globalizing economy Dr. Elisabeth Hill,

University of Sydney, Sage Publications, 2009)

• Core: The main architecture of IR in India dates back to before

independence and is mostly unchanged. It is highly centralized, and

the state remains the main mediator between capital and labour.

• Massive unorganized workforce, demographic and gender issues, the

structure of India’s labour market itself give rise to core problems.

Excessive State Intervention

• The government decides what is and what is not a dispute,

has full discretionary powers over how the dispute can be

solved, and the dispute can’t go to court until the government

deems it illegal. (Individual grievances are another matter)

• The National Commission for Labour suggested creating an

Industrial Relations Commission (IRC) to recognize unions,

manage dispute resolution and settlement processes as far

back as 1969, to no avail.

Union Recognition Issues

• Neither the 1947 Industrial Disputes Act nor the 1926 Trade Unions Act have any provisions for the clear recognition of a union as the collective bargaining agent on behalf of the workers.

• At present, unions remain strongly tied to political parties, and this politicization means that disputes are settled on a political basis rather than via collective bargaining and negotiation.

Loophole Abuse

• Employers are concerned about employment security vs flexibility and

global competitiveness

• Legal contract labour license hard to get, too many bureaucratic

regulations

• All manner of loopholes – subcontracting key processes via

intermediates, making employees work unregistered, fake designations,

as well as more forceful methods such as lock-outs to deny employees

their legal status

• Nothing in the existing Industrial Dispute process can take care of a

dispute that is quashed even before it has begun

Historic Causes of present ID scenario

• The establishment of five-year plans and a more socialistic

approach meant that the state took on the role of a mediator

between capital and labour.

• Events worsened by political and economic issues in the 1970s.

• During the 1975-77 emergency, the Industrial Disputes Act was

amended so that employers employing over 300 people had to

seek government permission before retrenching workers.

• Unions in successful industries now focused on collective

bargaining, while those in struggling ones had to resort to the

centralized system based on universal rights, creating a

fragmented labour movement and bargaining, differences in

wages and work conditions between public and private

sectors.

• (Bombay textile mill strike, 1982)

• 1982- companies requiring 100 people or more needed

government permission to lay off/retrench workers –

employment security, but no bargaining agent/ state level IR

tribunals.

THANK YOU

industrial dispute machinery

Documents