Notes - Labour Law

TU – Trade Union; CB- Collective Bargaining; ULP- Unfair Labour Prac; ER- Employer; EE-
Employee; IR- Industrial Relations

 S. 2(ra), ID Act - "unfair labour practice" means any of the practices specified in the Fifth
Schedule
o On part of employer
 1. Employer interferes with right of workmen to form or join a TU
 2. Employer threatens workmen with discharge or dismissal if they
participate in any TU Activity
 3. Employer threatens workmen with closure or lock out if workmen
participate in any TU Activity
 4. Employer threatens workmen with unauthorised deduction of wages if
workmen participate in any TU Activity
 5. Employer tries to form any employers sponsored union
 6. Employer victimises the employee, in any manner
o On part of employees if they
1. Participate in any illegal strike or instigate other workmen to participate or
abate other workmen to participate in illegal strike
2. For recognised union, if it refuses to participate actively in CB process –
ULP- on part of employees union as they are agents of bargaining
3. If union is engaged in any such stage demonstrations wherein they try to
defame employer or other managerial staff
 How to prove ULP
o Act of ULP
o Evidence produced will prove existence of ULP
o In absence of evidence, there may be certain circumstances in which an inference
may be drawn
o List u/ Sch 5 to determine whether ULP or not
 Examples
o if workman undergoing probation engages in misconduct and employer fires him-
not ULP as there was misconduct.
o If workmen participate in a legal strike and indulge in picketing – amounts to ULP
as picketing is an offence and hence no immunity
o Employer provides artificial breaks during fixed term employment of employee to
prevent him from getting benefits- amounts to ULP
 Imp points
o Victimisation is a vague term. Examples-
 ER discriminates against workmen
 ER singles out union leaders/members
 ER makes anti union statements
  ER fails to follow PNJ during disp proceedings etc
 First National Commission on Labour
o Till 1966, there was no mechanism to penalise ULP. 1st commn gave
recommendations.

Industrial Disputes Act 1947

 History
o Prior to 1947 Act, there were mechanisms for settlement of disputes but they
had some shortcomings
o The Employers And Workmens Disputes Act 1860
 Speedy and summary disposal of disputes by Magistrates.
 Disputes concerning wages of workmen employed in railways,
canals and other public works.
 The act was concerned with specific industries and with only those
disputes that give rise to a cause of action in civil courts.
o Trade Disputes Act (TDA) 1920
 Courts of inquiry and conciliation boards recognised (earlier was
referred to magistrates)
 it forbade strikes in public utlity services.
 It also made strike illegal if object was
 Other than that of trade/dispute
 To inflict hardship on community
 To coerce a govt decision
 No provision for settling industrial disputes.
o TDA 1929
 Repealed TDA 1920
 This started age of state intervention for dispute settlement
 Special prov regarding strikes in public utility services and general
strikes
 The main purpose of the Act was to provide a conciliation machinery,
so as to bring about a peaceful settlement of industrial disputes.
 This act was amended in the year 1938
 the amendment authorizing the central and provincial governments to
appoint conciliation officers for mediating in or promoting the
settlement of industrial disputes
o Defence of India Rules
 During WW2
 Establised Tribunal
 Rule 81(A) gave powers to the appropriate governments to
 intervene in industrial disputes,
 appoint industrial tribunals and
 to enforce the award of the tribunal on both the sides.
o National Commn of Labour
 “this rule was intended to provide speedy remedies for industrial
disputes, by referring them compulsorily to conciliation or
adjudication, by making the awards legally binding on the parties, and
by prohibiting strikes or lockouts during the pendency of conciliation
 or adjudication proceedings and for two months thereafter. This rule
put a blanket ban on strikes which did not arise out of genuine trade
disputes.”
 The rule was promulgated under the stress of the emergency caused by
the war, it proved to be an important step forward in the development
of the industrial law in the country
o Industrial Employment (Standing orders) Act 1946
 Object was to regulate IR regarding terms and condn of work
o IDA 1947
 The Industrial Disputes Bill was introduced in the central legislative
assembly, on 8 October 1946.
 The bill embodied the essential principles of r 81 (A) of the Defence
of India rules as well a certain provisions of the Trade Disputes
Act 1929, concerning the investigation and settlement of industrial
disputes.
 The bill was passed by the assembly in March 1947
 It became a law with effect from 1 April 1947.
 Incorporated rule 81 A of Def of India rules + 1929 act provisions
 Main object of ID Act
o To provide a machinery and forum for the investigation of
industrial disputes and for the settlement thereof and for the purpose
analogous and incidental thereto.
o To ensure social justice to both the employers and the employees
o To advance the progress of industry by bringing about harmony and
a cordial relationship between the parties.
o To protect workmen against victimization by the employer and
o To ensure a termination of industrial disputes in a peaceful
manner.
 LIC v DJ Bahadur
o “the Industrial Disputes Act is a benign measure of dispute-
resolution and set up the necessary infrastructure so that the
energies of partners in production may not be dissipated in
counter-productive battles and assurance of industrial justice
may create a climate of goodwill.”
o Held- Need of a mechanism to settle dispute- will contribute for
progress of society
o Workmen of Dimakuchi v Mgt of Dimakuchi Tea Estate
o Held- Act aims at i. maintaining unity and good relations at
work place; ii. Provides mechanism for investigation of dispute.
iii. Prevent illegal strikes. iv. Encourages CB

Definition of Industry u/s 2(j)

o Industry means
 Business, trade, undertaking, manufacturing, or calling of employers and
includes
 Any calling, service, employment, handicraft, or industrial occupation or
avocation of workmen
o Bangalore Water Supply and Sewerage Board v. A. Rajappa (1978) 2SCC 213
  New definition of Industry inserted in 1982- not come into force.
 Triple Test:
1. Systematic Activity
2. Organized by co-operation between employer and employee
3. For the production and/or distribution of goods and services
calculated to satisfy human wants and wishes .

A. Municipalities and Municipal Corporations- Whether municipality and

municipal corp are industries or not?

 D.N.Banerji v. P.R.Mukherjee, (1953) 1 LLJ 195

 Baroda Borough Municipality v. Its Workmen, AIR 1957 SC 110
 Corporation of City of Nagpur v. Its Employees (1960)
 Permanand v Nagar Palika Dehradun
 Bangalore water supply case.

o DN Banerji v PR Mukherjee
 A head clerk and sanitary inspector of Budge Municipality were dismissed
by municipality on certain charges. Validity of dismissal referred to
Industrial Tribunal by state of WB.
 Held- Tribunal directed reinstatement.
 Against order of tribunal, municipality filed a writ u/A 226 and 227 before
Cal HC. But this was dismissed. Appeal to SC
 Corporation contended that they weren’t carrying functions of industries
but functions of a municipality under a statute. No jurisdiction of industrial
tribunal
 Issues
 Reference to IT was incorrect as there was no ID
 ID act was not applicable as it wasn’t an industry
 Held
 There is nothing however to prevent a statute from giving the word
"industry" and the words "industrial dispute" a wider and more
comprehensive import in order to meet the requirements of rapid
industrial progress
 It is obvious that the limited concept of what an industry meant in
early times must now yield place to enormously wider concept so as
to take in various and varied forms of industry.
 ‘Undertaking’ in the first part of the definition and industrial
occupation or avocation in the second part obviously mean much
more than what is ordinarily understood by trade or business.
 The definition was apparently intended to include within its scope
what might not strictly be called a trade or business venture.
 Municipal activity could not be truly regarded as a ‘business or
trade’ it would fall within the scope of the expression ‘undertaking’.
 The only ground on which one could say that what would amount to
the carrying on of an industry if it is done by a private person ceases
 to be so if the same work is carried on by a local body like a
Municipality is that in the latter there is nothing like the investment
of any capital or the existence of a profit earning motive as there
generally is in a business. But neither the investment of capital nor
the existence of a profit earning motive is sine qua non or necessary
element in the modern conception of industry.
 The very idea underlying the entrustment of such duties or functions
to local bodies is not to take them out of the sphere of industry but to
secure the substitution of public authorities in the place of private
employers and to eliminate the motive of profit-making as far as
possible.
 The undertaking or the service will still remain within the ambit of
what we understand by an industry though it is carried on with the
aid of taxation, and no immediate material gain by way of profit is
envisaged.
 We are forced to the conclusion that the definitions in our Act
include also disputes that might arise between municipalities and
their employees in branches of work that can be said to be analogous
to the carrying out of a trade or business.
o Baroda Borough Municipality (BBM) v Workmen
 Employees of municipality worked in electricity dept and asked for bonus.
This created a dispute. It was referred to tribunal
 Tribunal held- employees not entitled for bonus as it was not a profit
oriented concern. Appeal made
 Banerjee case cited
 SC - Relying on D.N.Banerjee case, the court reiterated that branches of
work that can be regarded as analogous to carrying of a trade or
business, would fall within the meaning of an industry.
 It is now finally settled by the decision of this Court in D. N. Banerji v. P.
R. Mukherjee that a municipal undertaking of the nature we have under
consideration here is an 'industry' within the meaning of the definition of
that word in s. 2(j) of the Industrial Disputes Act, 1947, and that the
expression 'industrial dispute' in that Act includes disputes between
municipalities and their employees in branches of work that can be
regarded as analogous to the carrying on of a trade or business.

o These principles were followed till 1960, but then same issue propped up
o Corporation of City of Nagpur (CCN) v Employees
 Facts- There was a dispute between corpn and employees regarding the
wage scale. It was referred to industrial court. This was objected-
corporation isn’t an industry
 Issue- whether corp of city of Nagpur is an industry
 SC- made a distinction between regal and municipal function of
corporation. Regal functions are not analogous to trade/business. Rest are
analogous.
 The following five characteristics are stated to be the conditions implicit in
the definition:
1. the activity must concern the production or distribution of goods or
services;
2. it must be to serve others but not to oneself;
 3. it must involve co-operative effort between employer and employee,
between capital and labour;
4. it must be done as a commercial transaction; and
5. it must not be in exercise of purely governmental functions.
 The court summed up its conclusion in the following words:-
 The definition of industry in the Act is very comprehensive. It is in two
parts; one part defines it from the stand point of the employer and the other
from the stand point of he employee. If an activity falls under either part of
the definition, it will be an industry within the meaning of the Act.
 The history of industrial disputes and the legislation recognizes the basic
concept that the activity shall be an organized one and not that which
pertains to private or personal employment.
 The regal functions described as primary and inalienable functions of State
though statutorily delegated to a Corporation are necessarily excluded from
the purview of the definition.
 Such regal functions shall be confined to legislative power, administration
of law and judicial power.
 If a department of a Municipality discharges many functions, some
pertaining to industry as defined in the Act and other non-industrial
activities, the predominant functions of the department shall be the
criterion for the purposes of the Act.
 The court also ruled that neither investment of capital nor profit motive
was sine qua non for determining whether an activity was an “industry” or
not.
 The doctrine noscuntur a sociis cannot be invoked in cases where the
intention of the Legislature is clear and free of ambiguity.
 The words "analogous to the carrying out of a trade or business"
emphasize more the nature of the organized activity implicit in a trade or
business than to equate the other activities with trade or business.
 If a service rendered by an individual or a private person would be an
industry, it would equally be an industry in the hands of a Corporation.
 If a service rendered by a Corporation is an Industry, the employees in the
departments connected with that service whether financial, administrative
or executive would be entitled to the benefits of the Act.

o Summary
 If the work of municipality is given to pvt industry or people, it is an
industry
 If protections are available to pvt individuals, the same should be available
to muncip.
 The court further said that the following dept of a municipal corp are
industries:
 Tax, fire, public conveyance, light dept, water-works, PWD,
Education, building, gen admin
 Not an industry:
 Assessment of levy of house rates
 Removal of encroachment
 Prevention and control of food alteration
o Permanand v Nagar Palika Dehradun
  Although SC had estb in prior cases that MC are industries, another
attempt was made by SC and issue re-examined in light of consti
provisions as the SC was of the view that inclusion of municip in the consti
should clearly remove the muncip from the purview of the word ‘industry’
u/s 2j of IDA since they have been elevated to the status of state, and hence
must be excluded
 SC rejected this contention by holding that inclusion of municipality in the
constitution by itself would not dilute the effect of its decision in the
corporation of city of Nagpur v its employees and although the
municipality performs certain govt functions, then also it is an industry

B. Whether hospitals and pharmacies are industries or not?

o CASE 1 - State of Bombay v JJ Hospital Mazdoor Sabha 1956

 Facts- JJ group of hospitals run by state of Bombay has retrenched two of
its ward servants. Against this order of retrenchment, the aggrieved
workers moved the bom hc for issuance of writ of mandamus directing
their reinstatement. The management (state of bom) contended that
hospital is not an industry so IDA won’t be applicable.
 Bom HC held that hospital was an industry. Aggrieved, state appeal to SC
 Imp legal points-
 "undertaking" means "anything undertaken"; any business, work or
project which one engages in or attempts, an enterprise”
 “trade” in its primary meaning, is "exchange of goods for goods or
goods for money", and in its secondary meaning it is "any business
carried on with a view to profit whether manual or mercantile, as
distinguished from the liberal arts or learned professions and from
agriculture”
 "business" is a wider term not synonymous with trade and means
practically "anything which is an occupation as distinguished from a
pleasure”
 Prima facie, if the definition has deliberately used words of such
wide import, it would be necessary to read those words in their wide
denotation; and so read, Hospitals cannot be excluded from the
definition.
 SC
 Held- yes, it is an industry.
 Rule of Construction noscuntura sociis
o Appellant’s Contention- In construing the definition, we must
adopt the rule of construction noscuntur a sociis.
o Supreme Court rejected the contention and held -It must be
borne in mind that noscuntur a sociis is merely a rule of
construction and it cannot prevail in cases where it is clear
that the wider words have been deliberately use in order to
make the scope of the defined word correspondingly wider.
o It is clear, however, that though s. 2(j) uses words of very
wide denotation, a line would have to be drawn in a fair and
just manner so as to exclude some callings, services or
undertakings. If all the words used are given their widest
 meaning, all services and all callings would come within the
purview of the definition; even service rendered by a servant
purely in a personal or domestic matter or even in a casual
way would fall within the definition.
o It is not and cannot be suggested that in its wide sweep the
word "service" is intended to include service howsoever
rendered in whatsoever capacity and for whatsoever reason
 Which are the attributes, the presence of which makes an activity an
undertaking within s. 2(j), on the ground that it is analogous to trade
or business?
o Declined to adopt the test estb in other cases- “ if activities
are analogous to t&bus, it is an industry”. This cant be
applied in every case
o It is difficult to state these possible attributes definitely or
exhaustively;
o as a working principle it may be stated that an activity
systematically or habitually undertaken for the production or
distribution of goods or for the rendering of material services
to the community at large or a part of such community with
the help of employees is an undertaking.
o Such an activity generally involves the co-operation of the
employer and the employees; and its object is the satisfaction
of material human needs. It must be organised or arranged in
a manner in which trade or business is generally organised or
arranged.
o It must not be casual nor must it be for oneself nor for
pleasure.
o By running hospitals, state of bom was rendering services to
community at large or part of community with help of
employees and so it would fall under category of undertaking
which will bring it under purview of 2j
 Is quid pro quo necessary for bringing an activity under s. 2(j) ?
o Supreme Court held that the question as to whether any
activity in question is an undertaking under s. 2(j) the
doctrine of quid pro quo can have no application.
 Therefore, we are satisfied that the High Court was right in coming
to the conclusion that the conduct and running of the group of
Hospitals by the appellant amounted to an undertaking under s. 2(j)
and the relevant provisions of the Act were applicable.

o CASE 2- Management of Safdarjung Hospital v Kuldeep Singh Sethi 1970

 Larger bench of SC in case disproved the Hospital Mazdoor Sabha case
 Ruling in the Hospital Mazdoor Sabha case has now been considerably
shaken by the pronouncement in the Madras Gymkhana Club.
 Facts
 3 appeals heard together. Govt managed the hospital. Dispute arose
bw mgt and employees over computation of amount of salary and
change in grade of employees. It was referred to Labour Court u/s 33
of IDA.
 Labour Court
 Directed that money be paid to employees by hospital
 First Appeal
 Safdarjung Hospital is not embarked on an economic activity which
can be said to be analogous to trade or business.
 There is no evidence that it is more than a place where persons can
get treated.
 This is a part of the functions of Government and the Hospital is run
as a Department of Government.
 Thus, it cannot be called an industry.
 Second appeal to Industrial Tribunal
 The Tuberculosis hospital is wholly charitable and is a research
institute. The dominant purpose of the Hospital is research and
training, but as research and training cannot be given without beds in
a hospital, the hospital is run.
 Treatment is thus a part of research and training.
 Thus it cannot be described as industry.
 Third Appeal to Supreme Court
 The objects of the Kurji Holy Family Hospital are entirely charitable.
It carries on work of training research and treatment. Its income is
mostly from donations and distribution of surplus as profit is
prohibited.
 It is, therefore, clear that it is not an industry as laid down in the Act.
 State of Bihar referred this dispute to Labour Court u/s 10 of IDA
 Management raised prelim objection that they are not engaged in any
work connected with industry and labour court has no jurisd
 Writ filed in Patna HC
 Held- it is an industry based on Mazdoor Sabha Case.
 Appeal to SC
 Issue- Whether activities carried by the 3 hospitals (Tuberculosis-
voluntary org; Kurji- charitable; Safdarjung- govt hospital) were an
industry irrespective of whether description can be covered under
industry
 Held- court didn’t find it necessary to refer to earlier cases from
which it was deduced that all activities analogous to trade and
business can be said to be industry
 Overruled Mazdoor Sabha case
 It held that before work engaged in can be described as an industry, it
must bear the true and definite character of trade, business, or
manufac or calling or must be capable of being called as an
undertaking, resulting in material goods or material services
 1. Safdarjung Hospital- was not engaged in an economic activity that
is analogous to trade and business. Thus it is a part of sovereign
function of the state- govt dept. Thus not industry (Corp of city of
Nagpur case followed)
 2. Tuberculosis Association – not an indep institution but a part of
Tuberculosis Assn of india and is wholly charitable in nature.
Engaged in research and training apart from providing treatment.
Thus not industry
  3. Kurji – is a charitable institution and carries on work of training
and research and treatement. Income is mainly from donations and
distribution of surplus as profit is prohibited and no economic
activity. Hence not an industry
 Test developed by SC in this case
o In all earlier cases, def was read in 2 separate parts- from
view of employer and employee separately. This is incorrect-
needs to be read as a whole. Industry cannot exist w/o
relationship b/w employer- employee. Collective enterprise
imp.
o Particular type of activities in which a unit is engaged will be
actual test to determine whether it falls under def of industry
or not

o CASE 3- Kerala Ayurveda Samajam and Nursing Home Shoranur v Its Workmen
and Ors
 Whether Ayurvedic insti is an industry
 Held- relied on earlier decisions. Ayurvedic institution is an industry as
 It engages employees in its diff depts.
 Ayurvedic medicines prep factory was registerd as factory under
Factories Act 1948
 Ayurvedic inst is rendering services by way of treatment and fee was
charged
 It was an organised activity and undertaken in a manner in which
trade or industry is carried on

C. Professional Estb – Professional activities

 Case 1- National Union of Commercial Employees (NUCE) v. Meher, (1962)

 Facts- Employees raised certain demand of bonus. Referred to Bombay
Industrial Tribunal. Firm raised an objection that profession was not industry
u/s S.2(j) of ID Act and so the dispute was not industrial dispute. No jurisd of
IT. Industrial Tribunal awarded that it had no jurisd to decide dispute as it was
not an industrial dispute.
 Appeal to HC. HC granted cert of appeal to go to SC.
 Issue- Are the professional activities like solicitors firm, architects office,
medical polyclinics and surgeries, firm of chartered accountants etc.
industries?
 SC
 A new test was added: that the association of capital and labour
must be direct and essential.
 Systematic and organsied activity- laid down procedure of
solicitors firm. It starts with drafting procedure where experts are
apptd, research, clerical staff and admin staff.
 However, the services of a solicitor were regarded as those of an
individual, depending upon his personal qualifications and ability,
to which the employees did not contribute. Employees only
performed ancialliary activity
  The contribution of the employees in the case of a solicitor’s firm
had no direct or essential nexus with the advice or services
rendered by the solicitor.
 Reason:- the doctrine of direct co-operation and the special features
of liberal professions.
 Held- solicitors firm not an industry
 Case 2 - Bar Assn Canteen v Chief Commr Delhi
 Assn ran a canteen on no P&L basis. It was made to provide benefit to
members of Bar Assn and guests
 Dispute arose b/w mgt of bar assn and employees of canteen regarding
terms of employment. It was referred to IT.
 Tribunal held- Bar assn was an industry. Writ to HC
 HC – Activities of bar assn while rendering services to people and
appearing in court isn’t an industry. If bar assn hires people to provide
certain facilities like drinking facility, food, books etc cant be said to be an
industry. If any dispute arises, it is not an ID under IDA.
 Hence bar assn isn’t an industry. Work by workmen in canteen is
incidental work

D. Chartered Accountants Firm

 Divided views:
 Case 1 - Rabindranath Sen v First Industrial Tribunal
 Cal HC- Is an industry
 Case 2- Alien Macgregor Smith Forge v FIT
 Held- audit, taxation, matters and other sectarial work undertaken by CA
firm with help of subordinate staff can be covered under the defn of
industry
 There is direct coop b/w employer and employee- labour and capital
 Thus, it is an industry
 Case 3- Ram Kishore Ayyar (RKA) Vaidyanathan v Fifth Industrial Tribunal
 Same observations of Meher Case by Cal Hc
 1. because of nature of activities of CA firm, liberal nature. Keeps it away.
 2. No direct coop b/w firm and other subordinate staff employed by firm
 3. No commodity produced by the firm
 CA firm not an industry

E. Educational Institutes

 University of Delhi v. Ramnath (1963) 2 LLJ 335 (SC)

 This was not first case on educational inst. In Corp of City of Nagpur case,
held that if MC runs various dept for rendering services, then it can be covered
under def of industry. The dept can be for education. Same q in ramnath case.
 Facts
 Uni of Delhi started bus facility in 1948 to provide transport
facility to females. Certain drivers and other employees were
employed.
 In 1961, the service was running in loss and uni decided to
discontinue it and terminated services of 2 of bus drivers and give 1
 month salary in lieu of service. Drivers demanded retrenchment
compensation from uni mgt, which was denied.
 Dispute referred to Labour court u/s 33(cc) of IDA. Labour court
overruled objection on jurisd and directed uni to pay compensation.
Against this award of labour court, the uni filed an appeal before
SC
 Whether the bus drivers employed by the Delhi University were workmen, and
this question, in its turn, depended upon the jurisdictional question viz:
whether the education activity of the Delhi University would be an industry or
not?
 SC
 Deviated from Nagpur
 Narrowing down the concept of ‘service’, the court held that
educational institutions would not fall within the meaning of an
“industry”, because their aim was education and the teachers
profession was not to be equated to that of industrial workers.
 The SC held that the drivers employed by the University were not
employed in industry because:
1. predominant function of the University was to impart education;
2. teachers were not workmen; and
3. others ( persons other than teachers) were insignificant in number
and did minor and insignificant work.

F. Clubs

 Madras Gymkhana Club Employees Union v. Gymkhana Club, (1967) 2 LLJ 720
 Facts
 A members club engaged in various works- catering, acco,
entertainment etc services to guests and members. 127 employees
in club. Also had connections with other clubs. There was a dispute
which arose b/w mgt of club and employees. Referred to Industrial
Tribunal
 The main question was: Whether the activities of the Madras Gymkhana Club
which was a members club, fell within the definition of an ‘industry’?
 Ind Tribunal- held not industry. Appeal to SC
 SC
 Not industry. The court reviewed all the earlier cases and made its
own comments on them.
 The claim was based on the contention that the club was organized as
an industry , as it was organized on a vast scale, with multifarious
activities; that facilitates of accommodation, catering, sale of alcoholic
and non-alcoholic beverages, games, etc. were provided; that the club
was running parties at which guests were frequently entertained; and
that the club had established reciprocal arrangements with other clubs,
for its members.
 It is not of any consequence that there is no profit motive because that
is considered immaterial.
 It is also true that the affairs of the club are organized in the way
business is organized, and that there is production of material and other
 services and in a limited way production of material goods mainly in
the catering department.
 But these circumstances are not truly representative in the case of the
club because the services are to the members themselves for their own
pleasure and amusement and the material goods are for their
consumption.
 ...before the work engaged in can be described as an industry, it must
bear the definite character of 'trade' or 'business' or 'manufacture' or
'calling' or must be capable of being described as an undertaking
resulting in material goods or material services.
 Industry refers services to community at large

G. Associations

 Ahmedabad Textile Industry’s Research Association (ATIRA) v. State of

Bombay, (1960) (SC)
 Whether an association for research, maintained by the textile industry and
employing technical and other staff, was an industry?
 SC
 Applying the tests laid down in Hospital Mazdoor Sabha, the court
held that the activity of the association was an ‘industry’ because
a. it provides material services to a part of the community,
b. it was carried on with the help of employees,
c. it was organized in a manner similar to that in a trade or business
and
d. there was co-operation between the employers and the employees.
 SC made observation on research and other scientific work undertaken
are in connection with textile industry. Research actually contributes
to better prodn of textile industry. Increases the efficient and helps
reduction of cost and standardization of methods in industry.
 Regarding private and domestic servants
o court referred to corp of Nagpur case
o state of bom b mazdoor sabha
o madras gymkhana case
 In all these cases, SC held that domestic servants can’t be brought
under purview of industry – not analogous to trade and business-
elements of trade/business are missing- organised, systematic,
habitual.

H. Religious Institutions

 Case 1- Travancore Devaswom v State of Kerala

 If a particular dept is carrying on the activities related to trade/business
then it can be said to be an industry engaged in construction of building,
estb, of edu insti etc are connected with trade/ business. There is also a
coop b/w labour and capital and so can be covered u/s S 2(j)
 Case 2 – Harihar Bahni Pati v State of Orissa
 Maintenance of law and order in Jagannath Temple Puri was outside the
purview of word ‘industry’ as
  No coop b/w labour and capital
 No material services rendered
 The primary function was spiritual
 Case 3- Prabardhak Committee was engaged in preparing Prasad and religious
activities- not of commercial nature but of religious nature

I. Charitable Institutions

 Case 1 – Bombay Pinjapole v Its Worksman

 Whether Bombay Pinjrapole is an industry
 Facts- Inst was working to provide service to sick and poor. It started only
as welfare activities. Later on extended their business and entered into
dairy business and dairy farm was made and commercial activity started.
Dispute arose b/w mgt and workmen over q of revision of wages and terms
of employment
 Tribunal held Pinrapole is industry.
 Appeal to Bom HC- unsuccessful
 SC
 Pinjrapole is industry
 It doesn’t make any difference that pinjrapole is engaged in
welfare activity. Where proper care and mntce of animals is taking
place, it is basically a purpose of investment
 There is a commercial activity undertaken on grounds of pinjrapole

J. Sewage Board

 Case- Bangalore Water Supply and Sewerage Board vs.

A. Rajappa and Ors.
 Issue - Whether Sewage board is covered under def of industry
 All previous cases examined. The leading case on the point, which perhaps
may be treated as the mariner's compass for judicial navigation .
 Facts
 Some employees fined by board because of misconduct committeed by
employees. Various sums recovered. EE challenged action of board on
ground that PNJ violated. Appeal to Labour court to recover amount
u/s 33(c).
 Board raised prelim objection in Labour court –board is a statutory
body performing its regal functions as it is engaged in providing
amenities to community through the board and so its outside purview
of ID act – S. 2(j) – regal functions are performed and employees are
not workmen. Labour court has no jurisdiction
 Objection overruled. Board filed writ in HC- dimissed. Held Board is
industry
 SC – larger bench. SC has to determine the 1. Area of conflict within
that period 2. Intrp of word ‘industry’ 3 formulation of test to
determine what falls u/s 2 (j)
 1 Area of conflict
  Whether estb working w/o profit motive under def of
industry. Same for charitable inst or activities
performed by club
 whether coop b/w EE and ER direct and immediate
control
 whether domestic services/pvt services can be under def
of industry
 whether govt functions/ regal functions are outside
purview of word industry
 interpretation of word industry
 An industry is a continuity, is an organized activity, is a
purposeful pursuit-not any isolated adventure, desultory
excursion or casual, fleeting engagement motivelessly
undertaken. Such is the common feature of a trade,
business, calling, manufacture-mechanical or
handicraft-based- service, employment, industrial
occupation or avocation.
 an 'industry' cannot exist without co-operative
endeavour between employer and employee.
 An industry is not a futility but geared to utilities in
which the community has concern.
 Triple Test:
1. Systematic Activity
2. Organized by co-operation between employer and
employee
3. For the production and/or distribution of goods and
services calculated to satisfy human wants and wishes .
 We hold these triple ingredients to be unexceptionable. All
organized activity possessing the triple elements, although not
trade or business, may still be 'industry' (provided the nature of the
activity, viz. the employer-employee basis, bears resemblance to
what we find in trade or business. This takes into the fold of
'industry' undertakings, callings and services adventure
'analogous' to the carrying on of trade or business'.
 Profit Motive
o IRRELEVANT, regardless of whether in public, pvt, or
joint venture.
o True focus is functional and depends on EE and ER
relationship
 over-ruled
o Safdarjung, Solicitors' case,
o Gymkhana,
o Kuldeep Sethi
o Delhi University, and
 Hospital Mazdoor Sabha is hereby rehabilitated.
 I. 'Industry', as defined in Section 2(j)
 (a) Where (i) systematic activity, (ii) organized by co-operation
between employer and employee, (the direct and substantial
element is commerical)(iii) for the production and/or distribution of
goods and services calculated to satisfy human wants and wishes.
  (b) Absence of profit motive or gainful objective is irrelevant, be
the venture in the public, joint private or other sector.
 (c) The true focus is functional and the decisive test is the nature of
the activity with special emphasis on the employer-employee
relations.
 (d) If the organization is a trade or business it does not cease to be
one because of philanthropy purposes.

 (i) professions, (ii) Clubs (iii) educational institutions (iv) co-

operatives, (v) research institutes (vi) charitable projects and (vii)
other kindred adventures, if they fulfill the triple tests, cannot be
exempted from the scope of Section 2(j).

The dominant nature test :

 (a) Where a complex of activities, some of which qualify for exemption, others not,
involves employees on the total undertaking, some of whom are not 'workmen' as in
the University or some departments are not productive of goods and services if
isolated, even then, the predominant nature of the services and the integrated nature of
the departments will be true test. The whole undertaking will be 'industry' although
those who are not 'workmen' by definition may not benefit by the status.
 (b)Sovereign functions, strictly understood, alone qualify for exemption, not the
welfare activities or economic adventures undertaken by government or statutory
bodies.
 Eg irrigation dept of gov
 (c) Even in departments discharging sovereign functions, if there are units which are
industries and they are substantially severable, then they can be considered to come
within Section 2(j)
 There has been conflicting views. Some HC held that irrigation dept people
can be covered under the def of industry. Others held no.

K. Postal and Telegram Dept

 Divergance of views. But after Bangalore test, the dept of P&T can be convered under
def of industry as it can be privatised
 Case 1 –National Remote Sensing Agency v. Additional Tribunal – cum –
Additional Labour Court, Hyderabad. (2003) LLR 108
 Agency was carrying systematic activity with coop from employer and
employee. The work was related to production and distribution of goods
and services rendering
 It was instrument of state agency- autonomous body and not under CG
undertaking or concern. Industrial activities by NRSA was not under
authority CG
 Nothing to show relationship of principal agent between Central
Government and petitioner
 Organization Nor is it a specified controlled industry - Its own General
Body and Managing Committee to manage its affairs
 It does not require any specific authority of Government of India to carry
on its day-to-day activities.
 Yes, it is industry u/s 2j ( not performing any sovereign function)
 L. Forest Dept

 State of Gujarat v. Pratamsingh Narsingh Parmar, (2001) 8 SCC 713

 Certain officials of forest dept against whom discp action. They alleged
violation of service rules and PNJ
 The two judge bench of the Supreme Court held that the forest deparment
could not be held to be “industry” as
 Directly under CG
 Involved in welfare activities

M. Radio and Doordarshan

 All India Radio v. Santosh Kumar and another, (2003)

 Appellant’s contention: All India Radio and Doordarshan Kendra
discharge sovereign functions of the State and they are not industries
within the meaning of Section 2(j).
 The Supreme Court dismissed the appeal and held: “The functions which
are carried on by All India Radio and Doordarshan Kendra cannot be said
to be confined to sovereign functions as they carry on commercial activity
for profit by setting commercial advertisements telecast or broadcast
through their various Kendras and Stations by charging fees.”

N. Re-examination of the decision in Bangalore Case

 Coir Board Ernakulam v. Indira Devi P.S (1998)

 The two judge bench of the Supreme Court directed that the matter be
placed before the Hon’ble CJI to consider whether a larger Bench should
be constituted to re-consider the decision of this court in Bangalore Water
Supply Case.
 The three judge Bench presided over by the CJI ruled that the judgement
delivered by seven Judges in Bangalore Water spply case does not require
any reconsideration.

 During these disputes, the 1st NC on Labour was reviewing Labour Laws-
recommended need to re-examine def of industry u/s 2j. Reco ignored. 2 nd LC in 1999
(report in 2002) emphasised need to re-examine again.

Industry’ to be replaced by ‘Establishment’-NCL-II

 The Second National Commission on labour has recommended that the proposed
Labour Management Relations Act should be made applicable to all establishments
employing 20 or more workers, irrespective of the nature of the activity in which the
establishments engaged.
 The commission felt that, in view of this recommendation, there was no need to
define the term ‘industry’.
 The commission recommended that the term ‘establishment’ may be defined as ‘a
place or places where some activity is carried on with the help and co-operation of
workers.’(para 6.39,p39)

Industrial Disputes (Amendment) Act, 1982

  "industry" means any systematic activity carried on by co-operation between an
employer and his workmen
 (whether such workmen are employed by such employer directly or by or through any
agency, including a contractor) for the production, supply or distribution of goods or
services with a view to satisfy human wants
 or wishes (not being wants or wishes which are merely spiritual or religious in
nature), whether or not,--

whether or not,--
 (i) any capital has been invested for the purpose of carrying on such activity; or
 (ii) such activity is carried on with a motive to make any gain or profit,

and includes--
 (a) any activity of the Dock Labour Board established under section 5A of the Dock
Workers (Regulation of Employment) Act, 1948 (9 of 1948);
 (b) any activity relating to the promotion of sales or business or both carried on by an
establishment.

but does not include—

 any agricultural operation
 hospitals or dispensaries;
 educational, scientific, research or training institutions;
 institutions owned or managed by organisations wholly or substantially engaged in
any charitable, social or philanthropic service; or
 khadi or village industries
 any activity of the Government relatable to the sovereign functions of the Government
 any domestic service; or
 any activity, being a profession practised by an individual or body or individuals, if
the number of persons employed by the individual or body of individuals in relation to
such profession is less than ten;
 any activity, being an activity carried on by a co-operative society or a club

The only criteria is

1. triple test
2. dominant nature test
I D Act-Definition of “WORKMAN” u/s 2(s)

Definition of ‘Workman’ under Section 2 (s)

 1. Workman means a person employed in an industry
 2. To do any
o Manual
o unskilled
o Skilled
o Technical
o Operational
o Clerical , or
o Supervisory work,
o for hire or reward.

Meaning of ‘employed’

 Susceptible to two meanings:

 In a broader sense, it is a synonym of “engaged” or “occupied”; and
 In a restricted sense, it involves the connotation of the master servant relationship.
 Which of these two meanings provide the key to the interpretation of the phrase
person employed in any industry.

Shivanandan Sharma v. Punjab National Bank Ltd (1955) 1 LLJ 688 (SC)
 Supreme Court for the first time held that ‘supervision and control’ was the crucial
test for determining whether a person is an ‘employee’ or ‘independent contractor’.
Thus IC not workmen.

Dharangadhra Chemicals Work Ltd. V. State of Saurashtra, AIR 1957 SC 264

Facts of the case

 In this case the company is a lessee of the salt works and held license for the
manufacture of salt on the land.
 The salt is manufactured from rain water which soaks down the surface and becoming
impregnated with saline matter.
 The entire area was divided into small plots called pattas.
 Each agarias (who were a class of professional labourers) were allotted a patta which
was renewed from year to year.
 The company paid each each agarias rupees four hundred to meet his initial expenses.
 If the salt crystals were fond of a prescribed quality the company made payment to
agarias.
 The salt which was not of prescribed quality was rejected.
 The agarias were neither allowed to remove nor sell the salt rejected by the company.
 The company employed a Salt Superintendent to supervise and control at all stages of
the manufacture of salt.
  The agarias worked themselves, along with members of their family and were free to
engage extra labourers on their own account.
 No hours of work were prescribed.
 Neither muster rolls were maintained, nor were working hours controlled by the
masters.
 There were no rules as regards leave or holidays and agarias were free to go out of the
factory after making arrangement for the manufacture of salt.
 When monsoon began the agarias returned to their villages to take up agriculture
work.
 In 1950 an industrial dispute arose between the Company and agarias over the
conditions of service which was referred to by the appropriate Government to the
Industrial Tribunal for adjudication.
 The company contended that agarias were not workmen.
 The tribunal held that agarias are workmen.

Supreme Court
 Justice Bhagwati, speaking for the court, observed:
 The essential condition of a person being a workmen within the terms of definition is
that
 he should be employed to do the work in that industry,
 that there should be an employment of his by the employer and
 that there should be the relationship between the employer and him as between
employer and employee or master and servant.
 Unless a person is thus employed there can be no question of his being a workman
within the definition of the term as contained in the Act.

 How to determinte the relationship of employer and employee or master and servant?
 The test which is uniformly applied in order to determine the relationship is the
existence of a right of control is respect of the manner in which the work is to be
done.
 Contract of service.

Chintamani Rao v. State of MP (1958) 2 LLJ 252

 Facts
 A bidi factory entered into a contract with several contractors for the supply of
bidis. These contractors supplied tobacco and in some cases bidi leaves were
also provided to them. These contractors were neither bound to work in
factory nor were bound to prepare bidis themselves but could get it prepared
by others
 The contractors in turn collected the bidis prep by the workmen and took them
to the factory where they were stored and supervised there. If they were not of
the quality prescribed, they were rejected by factory. Contractors used to
collect rejected goods and gave it back to workers to be remade
 Mgt made payment to contractors and not workers. Workers raised a dispute
against factory for non payment of wages
 Whether these workers are covered u/s 2s of IDA
 SC
  The control and supervision test laid down in Dharangadhara case was
reaffirmed by the Supreme Court in this case.
 SC held that ‘worker’ was a person employed by the management and that
there must be a contract of service and a relationship of master and servant
between them.
 Thus not workmen.
 Impact of judgment
 dependant entrepreneurs, indep contractors were simply out of coverage of the
act as they are not controlled by contractor.
 EG- in case of indep contractor, a master enters into a contract of employment
to perform a task. There is assignment of task but the contractor is free to use
any method to compete the work/task
 Eg- dependant entreprn- cobblers, handloom weavers. They are dependant as
they need someone for marketing, devliering, and for giving raw materials.
But outside purview of act
 New trend started and court deviated from ‘control and supervision’ test as the Rao
case restricted the def and limited the scope.

V.P.Gopala Rao v. Public Prosecutor, (1970)2LLJ 59 (SC)

 Court said: It is a question of fact in each case whether the relationship of master and
servant exists between the management and the workman and there is no abstract a
priori test of the work control required for establishing the contract of service.
 In recent years, the ‘control’ test has not been treated as an exclusive test.

Standard Vacuum Refining Co. of India Ltd. V. Their Workmen, (1980) 2 LLJ 233 (SC)

 The contract labour was engaged in the cleaning and maintenance work at the
refinery. The contractual workmen demanded abolition of indep contract as 1. Same
work by other permanent workers in this and other units and to 2. Avail security
benefits. A dispute arose between the employer and contractors employees as
management denied it.
 Referred to Industrial Tribunal. Mgt questioned jurisdiction of trib but trib overruled
objection and accepted claim of contractor employees to abolish contractual labour
 On appeal, the Supreme Court held that the dispute in the instant case was an
industrial disputes, because:
 (a) the management had a community of interest with the contractor
employees;
 (b) they had a substantial interest in the subject matter of the dispute in the
sense that the class to which they belonged, namely, workmen was
substantially affected thereby; and
 (c) the management could grant relief to the contractor’s employees.
 Industrial dispute can only be raised by workmen. They are workmen as mgt
had community of interest with contractors employees although there was no
control or supervision
 The mgt can grant relief to employees. Any dispute in which mgt can grant
relief to workmen is an industrial dispute

Hussainbhai v Alath Factory - page 47, pratiti

  Held
1. Where workers.. INCOMPLETE
2. Presence of immediate contractor doesn’t make any difference
3. If livelihood depends on employer, then management is liable and the person
qualifies as contractor

Shining Tailors v. Industrial Tribunal (1983)

 Supreme Court observed that “supervision and control test was more suited to an
agricultural society prior to industrial revolution and during the last few decades, the
emphasis in the field has shifted and no longer rests exclusively or strongly on the
question of control”.

Devender Singh v Municipal Council

 Criteria to determine workmen laid down: Method of recruitment, mode of payment,

T&C of employment are not relevant factors to decide whether a person is ‘workman’
or not.
a. Mode of recruitment- whether he is price rated worker, contractual worker,
directly apptd etc doesn’t matter. Whether paid daily, monthly, etc doesn’t
matter

Apprentice

Not defined in the act.

 In s 2(s) , an ‘apprentice’ specifically been included in the definition.
 The Apprentices Act, 1961- Section 2(aa) defines the term ‘apprentice’ to mean ‘a
person who is undergoing ‘apprenticeship’ training in a designated trade in pursuance
of a contract of apprenticeship’ .
 Section 18: Apprentices are trainees and not workers –Save as otherwise provided in
this Act,
 (a) every ‘apprentice’ undertaking apprenticeship training in a designated trade in an
establishment shall be a trainee and not a worker; and
 (b) the provisions of any law with respect to labour shall not apply to or in relation to
such apprentice.
 In 1961, disputes b/w apprentice and employer is resolved as per act only. But if a
person is trainee not covered under 1961 act, then it can be said to be an ID and
trainee can be considered as a ‘workmen’

Nature of Work

 In order to be a “workman” a person must be employed in an industry to do any

 manual,
 unskilled,
 skilled,
 technical,
 operational,
 clerical or
  supervisory work
 for hire or reward.

Manual Work

 Work done by physical effort as distinguished from mental or intellectual effort.

 The emphasis is on nature of work.
 And the degree of responsibility.
 The nature of the industry and the organizational set –up.
 Example- Ward Staff, Tailor, Labourer,
 Chemical analyst, chemist mainly carrying out chemical analysis, doctor and his
compounder not held to be doing manual work. Just working as supervisor.

Unskilled Work

 Thin line b/w skilled and unskilled

 Bata India Ltd. V. B.H. Nathani, 1978 Lab IC 386 (Guj) (DB)
 The nature of work of a salesman in a shoe shop was of ‘unskilled labour’.
The fact that he tried to impress upon the customers that the shoes
manufactured by the company were durable, was not his principle duty.
 Other instances of unskilled work: Loaders and unloaders of materials and
goods in an industial establishement; The work of peons, daftries and
sweepers
 Strict approach.

 S.K Verma v. Mahesh Chandra (1983)2 LLJ 429.

 Facts- Dispute arose b/w Development Officer of LIC and mgt. The dispute
was referred by Central Gov to Industrial Tribunal. Dispute was regarding
dismissal of DO. Held that DO not workman.
 Appeal to HC- dismissed .
 Appeal to SC
 Development Officer is a workmen.
 Considering the nature of duty, and since he was not engaged in any
administrative or managerial work.
 S. 2(s) of Act excludes from definition the following:
 (i) who is subject to the Air Force Act, 1950 or the Army Act, 1950
(46 of 1950), or the Navy Act, 1957
 or (ii) who is employed in the police service or as an officer or other
employee of a prison; or
 (iii) who is employed mainly in a managerial or administrative
capacity; or
 (iv) who, being employed in a supervisory capacity, draws wages
exceeding one thousand six hundred rupees per mensem or exercises,
either by the nature of the duties attached to the office or by reason of
the powers vested in him, functions mainly of a managerial nature.

The conflict was removed in following case:

 H R Adyanthaya v. Sandoz (India) Ltd. (1994)4 SCC 164.

  Applied the rule of ejusdem generis to give a narrow meaning to the wide words in
the definition of workman.
 Skilled, unskilled and manual had to be read ejusdem generis.
 Thus, to be adjudged as workman, person must be doing any work in following 4
categories IRRESPECTIVE OF WORK BEING SKILLED OR UNSKILLED.
 Manual
 Clerical
 Supervisory
 Technical
 If not covered in exceptions, then he will be a workman.

Supervisory Work

 A person enganged to do supervisory work unless he falls within the exception of cl

(iv) shall fall within the definition.
 The word ‘supervision’ means to oversee, to look after and includes authority to
hire,transfer, discharge, initiate disp proceedings, redress greiv et
 Supervision done by an employee in a higher position over the employees in the lower
position.
 Nature of duties and functions assigned to him determines that a person doing
supervisory work or not
 If a person earns more than 10k p.m, then isn’t a workman
 Illustrations:
 The work of the employee as head of a department having power of control,
supervision and direction over his department for the purpose of recruitment,
promotion .
 The work of labour officer in a jute mill involving exercise of initiative , tact and
independence.
 Traffic Inspector
 The job of an assistant engineer working as shift engineer having control over
workmen working under him.
 The work of a gate sergeant in charge of the watch and ward staff of a tannery
whose main duty was to look after the property of the factory by supervising his
own men.
 Development officers

All India Reserve Bank v RBI Employees Association

 Issue was to decide whether work done by an employee engaged in the work of
checking and distributing the work detecting the faults, reporting for penalty, and
making arrangements for filling vacant positions are supervisory in nature
 Held- yes. Had all powers from hiring to arranging etc
 Q ultimately is that of fact and depends on nature of work in which he is engaged,
nature of industry , and nature of organisation. Eg – site engineer works in a set up
where supervision is required. He cant work independently

Anand Bazaar Patrika v Its Workmen

  The principal work of employees was to maintain and write cash book and to prepare
various returns. In same establishment, there was a senior most clerk who was in
charge of Provident Fund. He was also given 3 junior clerks for his assistance. The
senior most clerk had to allot work to these junior clerks and also was responsible for
granting leaves and regulating working condn of 3 junior clerks.
 A dispute arose b/w senior most clerk and mgt.
 Issue- whether the senior most clerk was workman performing supervisory work
 Held- not workman performing supervisory work. He was assigned additional duty
due to his seniority. The primary duty decided the nature of work which was to do
clerical work

Union Carbide India Ltd v D Samuel and Ors

Bom HC laid down tests to determine whether a person is doing supervisory work or not

1. Designation is not important. Nature of work is more important

2. Dominant work performed is to be considered, not additional duties
3. Nature of duties considered – whether person has power to take decision on part of co.
Eg if binding, then supervisor.
4. Power to terminate services or take discp action against a person
5. Whether there are certain workmen under him whose work he oversees
6. If a person drawing salary of more than rs 10,000, he is not a workman

National Engineering Industries v Srikrishnan Bhageria

 Issue – Diff bw supervisory, managerial, and admin work

 SC Held- No straight jacket formula to determine who is person doing supervisory,
managerial or admin work
 It is only by nature of work and duties performed which will determine

Technical Work

 Inserted by the Amending Act of 1956.

 Technical work depends upon the special mental training or scientific or technical
knowledge of a person.
 Maru Galli Estate v Industrial Tribunal Madras
 Facts- A person was employed as a medical officer for plantation estate and
his monthly salary was exceeding 500 pm. His duties were management and
runnin of central hospital, supervision of work of hospital staff, and
dispensaries, inspection of quarters, and was also engaged in Malaria Control
Work
 Held – main function for which he was appointed may not occupy as much
time as the medical attendants on patients. All facts show that it is technical
employment for a particular purpose and so the work done by the person can
either be said to be supervisory or technical

Clerical Nature

 Accountant
 Cashier
  Assistant Manager of Bank
 Depot superintendent and an assistant depot superintendant employed by an oil
distributing company
 Godown keeper
 Proof readers
 Secretary engaged to stenographical , clerical or secretarial work of a confidential
nature.
 Time-keeper whose duty was only to check arrivals and departures

Prakash v M/s Delton Cables India Pvt Ltd

 Facts- A person was employed as chargement security to look after security of factory
and ppt. He was also required to depute certain other watchmen working under him.
He supervised them and recoded their entry and exit. All materials entering and
exiting factory – maintained record. But didn’t have power to dismiss any workmen
or order any enquiry.
 Issue- supervisory or clerical?
 Held- supervisory. Clerical work was additionally given. Dominant duty is considered
.

Hire and Reward

 Hire and reward is wider than wages

 Wages means only person who gets some money
 Hired/ reward expands scope and makes all people hired/reward or workmen. Also
covers contractual employees under hired.
 Definition of workman is widest in this law compared to all labour laws

Sales and Medical Representatives

1. The sales and promotion employees (condn of service) act governs t&c of
employment and so are kept out of IDA
2. Duties performed by them do not come under terms of S.2s
3. If a person doesn’t do activities under S. 2s he isn’t a workmen and outside purview
of act.

Part-time Employees

Devender singh v MC, Sanavar

 Only criteria is nature of work.

 Mode of recruitment , tenure, payment etc doesn’t matter

Creative Artists

Bharat Bhawan Trust v. Bharat Bhawan Artists’ Association (2001) 7 SCC 630.

 Whether creative artists emploued by Bharat Bhavan Trust are employee?

  The trust isn’t an industry, hence not workmen. If Bharat Bhawan Trust be called as
Industry then they are workmen otherwise not.

Teacher

 Miss A Sundarambal v. Govt Of Goa, Daman and Diu(1989) 1 LLJ 62(SC)

 Held – teacher not workmen. Teachers engaged in primary, secondary or higher

ed are not covered u/s 2(s) as while imparting ed, teachers are not said to be
performing skilled, unskilled, technical work etc
 Further held that teachers cant be excluded u/s 2(s). Time has come to bring a
significant amendment in IDA or any law to protect teachers

 Ahmedabad Pvt. Primary Teachers Association v. Administrative Officer. (2004) 1

SCC 755.
 Same view as above

Doctor

 Highly qualified Doctors having MBBS/MD degrees and nature of work and high
salary that they draw is sufficient to keep them away from def of workmen

Apprentice

If apprentice is employed in an industry and doing work specified in s. 2s, then he is a

workman. Just because he is apprentice, he isn’t workmen. Nature of work decides it.

Probation Officer ; Part time workers, trainees,

 Devender Singh v Municipal Council –Test used from this case

 If industry work is such that people are initially appointed as probation officer for
training, then he can be covered under def of workmen
 In certain industries, whole work is taken over by trainees in initial years
 They are workmen

Legal Representatives/ Heir of Deceased Workmen-

 No, they are not employed, so they cant raise dispute

In cases where a person gets a high salary but is given work laid down udner S. 2s or if
a person has a high designation (eg manager) but is paid less and does work u/s S. 2s,
can he be considered as workman?
 2nd labour commission recommended that
o its high time that govt should enlist highly paid jobs wherein if a person is
employed and receives high remuneration, he is outside purview of word
‘workman’
o Salarial limit of Rs 25000 should be kept as criteria. People having less thant
25000 and doing work mentioned in S. 2s will be workman
 Industrial Dispute – S. 2 (k) of IDA

 Definition of Industrial Dispute u/s 2(k)

 Similar to Trade Disputes Act
 “Industrial dispute” means
 any dispute or difference(factum of Industrial dispute)
 between
 employers and employers, or
 between employers and workmen, or
 between workmen and workmen,
 which is connected with the
 employment or non-employment or the terms of employment or with the
conditions of labour,
 of any person.
 Also covers disputes of every day lives between employer and employee – This is not
under Trade Disputes Act. Industry is also wider term than trade and business given in
TU Act
 This definition includes all the aspects of a dispute. It, not only includes the
disagreement between employees and employers, but also emphasizes the difference
of opinion between worker and worker.
 Merely demand made to employer isn’t a dispute. The demand must be rejected by
employer for it to be a dispute
 The demand made directly to gov in gov estb doesn’t amount to dispute. Should be
made to employer in a gov estb. Gov isn’t an auth to refer dispute
 If a unit is under CG or SG then then the authority prescribed by gov will be referred.
If no authority is described, then HOD is the employer and dispute is referred
 Mechanism to settle disputes under IDA
o Formal
o Informal
 Informal
o S. 3 of the act deals with composition of Works Committee. It is constituted to
prevent disputes.
o 3(1) provides that appropriate gov may, by order, require the employer to
make one or more works committee in every such industrial estb where 100 or
more workers are working. Statutory obligation of employer to continue it if
100 or more workers
o Work committee works before a dispute arises and prevents differences.
Consists of equal representatives of employer and workmen.
o Employer and workmen themselves select the respresentatives to works
committee
 How it works?
o Any difference is first referred to works committee. Remains an internal
matter- no one intervenes.
o Parties to difference are called and negotiations take place. WC tries to
understand where actually the problem lies
o WC provides only recommendations- not binding on parties
 o There is less popularity of WC among workmen because
 1 workmen don’t have faith and trust in WC as one of the parties is
employer
 2 Unions don’t support WC
 3 Reccos of WC are not appreciated/followed fully as theyre not
binding
 S. 9(c) – Grievance Redressal Committee
o GRC added via amendment in 2010 as 1. Workmen didn’t have faith in WC. 2
to address personal grievances, as IDA only addressed group disputes
o Every employer has to constitute 1 or more GRC in every estb where 20 more
workmen are working
o Max 6 members in GRC- equal rep of EE and ER
o One member- chairman- on rotation basis from both EE and ER. So 1 year EE
and next year ER
o One woman also mandatorily to be on GRC
o GRC has to complete proceedings within 30 days of receipt of app
o Eg- GRC active in Gujarat
 S. 4- Conciliation Officer
o Act hasn’t laid down any qualification or experience – any person can be an
officer
o Appropriate gov by notification in gazette appoint co in as many numbers as it
deems fit
o They have to persuade parties to settle disputes amicably – promote peace
o They can be apptd for specified areas and specific industries
o Can be apptd for permanent or temporary period
o Their work is to mediate and promote industrial peace
o Limitation:
 A person not well versed with industry can also be an officer and may
take extra time to settle disputes
 Surveys show that many issues remain unsolved even after officer
apptd
 Officer is used as a medium for CB
 S. 5- Board of Conciliation
o Board having 1 or more conciliation officers
o It is temporary body constituted by appropriate gov on any occasion that arises
when there is need to constitute board
o Board is to promote settlement of ID
o Composition – s. 5(2)
 Shall consist of chairman, 2 or 4 other members as appropriate
 Chairman shall be independent, while other members shall be persons
apptd in equal numbers to represent the parties to dispute and any such
person who is apptd to represent a party shall be on recommendation of
that party
 BOC is preferred over the conciliation officer as per surveys as the
representative of parties are there
 It is on the basis of mutual agreement b/w parties- “in future, if ID
arises, it will be referred to BOC”
 S. 6- Court of inquiry
 o It is an authority to hold inquiry in any ID. If dispute is of a nature where there
is a need to inquire, court of inquiry comes into picture
o Every dispute wont be referred to COI only when disputes are of such nature
that an inq is needed, it will be referred to COI
o Composition – Appropriate gov may as occasion arises by notif in official gaz
constitute a court of inq for purpose of inq into any matter appearing to be
connected with or relevnt to ID
o Number-as approp gov deems fir. If more than 1, chairman apptd

Adjudicating Authority
 Final stage to determine a dispute.
 It is final and binding on parties

A. S. 7 - Labour Court
o 1 or more- as approp gov decides
o purpose is to adjudicate ID
o From here, gov intervenes as appropriate
o Govt determines whether dispute is to be referred to labour court or industrial
tribunal
o Jurisdiction of labour court
 Sch 2 is to be referred
 It deals with Standing order – disputes relating to validity of standing
order
 Interpretation is also included
 Matters related to strike and lock-out
 Entitlements of workmen and employer has withdrawn
 Related to discharge or retrenchment

B. S. 7A- Industrial Tribunal

o Approp gov can constitute 1 or more IT by notif in official gazette
o Jurisd –
o If there are more than 100 workmen employed in an estb, then matters
laid down in sch 2 will have jurisd . Thus LC has juris over all matters
in sch 2 but if workmen exceeds 100 in number, jurisd shifts to IT
o Juris over sch 3 also, which deals with terms and condn of
service/employment eg. Wage, compulsory holidays, overtime
payment, bonus, gratuity

C. National Tribunal – S. 7B
o CG can constitute 1 or more NT by notif in official gazette
o Nature of estb is such that it is situated in 1 or more state and dispute is likely
to affect estb situtated in 1 or more state- then NT has jurid

Other important prov of act

o Notice of change
o Suppose ID is going to b/w ER and workmen, and it is referred to appropriate
authorities, and ER makes any change that affects working condns or any
 change that affects working conditions or the case in dispute during pendency,
then it affects the pending legal proceedings
o u/s 9A- no such change can be made in the service condn while a dispute is
pending
o Any such change has to be notified within 21 days of the change via notice to
employees
o Sch 4 of IDA
o Condn of service for which notice is to be given if any change is there
o S. 10 –Powers of appropriate gov to refer dispute to appropriate authorities – BOC,
IT, LC, NT
o Can refer to LC u/ SCh 2
o Can refer to IT – Sch 2 if exceeds 100 workmen and for Sch 3
o Disputes of national imp
o Strike notice has been given to the employer. The gov may also refer disputes
to BOC (cant go on strike before giving notice or before date speicified in
notice)
o If not only empowers app gov to refer the dispute but also to decide the app
auth to decide the dispute
o Gov can refer only when dispute is
 In existence
 Is apprehended
o Dispute can be referred by gov at any time; not mandatory for gov to wait for
conclusion of proceedings
o In case of public utility services, gov can suo motu refer the dispute to the
industrial tribunal or national tribunal
o Gov doesn’t wait for application. In other cases, gov may either on receipt of
joint app or separate app by parties may refer dispute to app authorities
o S. 10(5)- The CG is empowered (in other cases, it is approp gov) – if CG is of
the opinion that dispute is of national importance and dispute may affect the
industrial estb situated in more than 1 state, then CG may refer the dispute to
the National Tribunal
o Reference is to be made by approp gov only. If reference is made by
inappropriate gov, then ti is incompetent and can be challenged by parties
o The appropriate gov is decided by the gov who has ‘control’ over the industry
o S. 10(5) – Empowers approp gov to add new parties to the dispute (later also)
at any stage
o S. 10(1) – The language of S. 10(1) nowhere provides that any hierarchy is to
be followed for referring to appropriate authorities. Gov decides as per subject
matter of the case.
o Also, the approp gov is not empowered to enlarge subject matter of dispute
has to limit the case to the subject matter that parties have submitted
o Thus. S. 10 gives unlimited power to gov to ensure expeditious settlement of
disputes
o Imp points
o The gov must be approp gov
o Dispute must be in existence or apprehended
o While referring the dispute, the gov only exercises admin power
o Reference can be made anytime
 o Issues
o 1- whether reference once made can be cancelled, withdrawn, or suspended? If
parties want, then they can submit an app for withdrawal, suspension, or
cancellation. S. 10 is silent on this matter
o 2- S.10 provides that reference can be made anytime. Is it not mandatory for
gov to wait for conclusion of conciliation proceedings before making ref?
Held- it is not mandatory as act says that ref can be made anytime. Also
conciliation proceedings are not binding on parties. Parallel proceedigns can
continue
o 3- S.10 says that gov has discretionary power to refer disputes (exists or is
apprehended). Suppose gov has not referred the dispute to these auth at first
instance. Then does it bar the gov from making futher (subsequent) reference?
Whether failure to refer at earlier occasion debars gov from making subseq
ref? Held – no, gov has discretionary power to refer at any point of time
o 4- Govt power to prohibit the continuance of any strike or lockout which is
maybe in existence- s. 10(3) on date of reference. Held- govt has all the
powers to prohibit the strike and lock out as the dispute is being referred to an
appropriate authority

INSTRUMENTS OF ECONOMIC COERCION

o Definition of Strike-Section 2(q)

 “Strike” means a cessation of work by a body of persons employed in any
industry acting in combination, or
 a concerted refusal, or
 a refusal, under a common understanding of any number of persons
 who are or have been so employed
 to continue to work or to accept employment;
o Mere stoppage of work isn’t a strike
o Definition of lock-out –Section 2(l)
 “lock-out” means the
 temporary closing of a place of employment, or
 suspension of work, or
 the refusal by an employer to continue to employ any number of persons
employed by him;
o lockout is antithesis of strike
 Section 23 contain general prohibition of strike and lock-out.
 Section 22 are limited in their scope. They apply to strikes and lock-outs in public
utility services.

o General Labour Union (Red Flag) v Chavan

o Imposing and continuing a lockout/strike for a long period is an ULP
o Employer should stop lock out. There should not be continuance as employee
believes he will be employed in same unit again. ER should end lockout or
terminate EE so he can find someother employment
o EE should stop strike when his dds are met or being negotiated
o Differences? (randomly mentioned in notes without any differences stated
o IDA doesn’t provide that these weapons shouldn’t be used, but it aims to protect
parties and aim is to peacefully settle disputes
Procedure for Strike/Lockout

 Section 22. Prohibition of strikes and lockouts.

S. 22(1) – procedure for strikes : No person employed in a public utility service shall
go on strike, in breach of contract-
(a) without giving to the employer notice of strike, as hereinafter provided, within six
weeks before striking; or
(b) within fourteen days of giving such notice; or
(c) before the expiry of the date of strike specified in any such notice as aforesaid; or
(d) during the pendency of any conciliation proceedings before a conciliation officer
and seven days after the conclusion of such proceedings.

o 6 weeks is a general condn but 14 days is a mandatory time gap to be provided where
ER can utilise the 14 days to reach settlement or make alternative arrangement
o Essentials of notice
o Date of strike. W/o date of strike, notice valid for 6 weeks
o After 6 weeks, fresh notice given if strike not conducted within 6 weeks
o Date of strike should not be before 14 days of time expiry from date of
issuance of notice to employer

S. 22(2) – Procedure for lock out: No employer carrying on any public utility service
shall lock-out any of his workmen-
(a) Without giving them notice of lock-out as hereinafter provided, within six weeks
before locking-out; or
(b) Within fourteen days of giving such notice; or
(c) Before the expiry of the date of lock-out specified in any such notice as aforesaid;
or
(d) During the pendency of any conciliation proceedings before a conciliation officer
and seven days after the conclusion of such proceedings.

o One difference is that 22(2) is general and doesn’t talk about public utlity services
unlike 22(1)

22 (3) The notice of lock-out or strike under this section shall not be necessary where
there is already in existence a strike or ,as the case may be, lock-out in the public
utility, but the employer shall send intimation of such lock-out or strike on the day on
which it is declared, to such authority as may be specified by the appropriate
Government either generally or for a particular area or for a particular class of
public utility services.

22 (4) The notice of strike referred to in sub-section (1) shall be given by such
number of person or persons and in such manner as may be prescribed.

22 (5) The notice of lock-out referred to in sub-section (2) shall be given in such
manner as my be prescribed.

Illegal Strikes and Lockouts-Section 24

  Section 24.
(1) A strike or a lock-out shall be illegal if-
(i) it is commenced or declared in contravention of section 22 or section 23;
or
(ii) it is continued in contravention of an order made under sub-section (3) of
section 10 or sub-section (4A) of section 10A.
(2) Where a strike or lock-out in pursuance of an industrial dispute has already
commenced and is in existence at the time of the reference of the dispute to a Board,
an arbitrator, a Labour Court, Tribunal or National Tribunal, the continuance of
such strike or lock-out shall not be deemed to be illegal, provided that such strike or
lock-out was not at its commencement in contravention of the provisions of this Act
or the continuance thereof was not prohibited under sub-section (3) of section 10 or
sub-section (4A) of section 10A.
(3) A lock-out declared in consequence of an illegal strike or a strike declared in
consequence of an illegal lock-out shall not be deemed to be illegal.

 Strikes may be:

o Legal and justified
o Illegal and unjustified
 Strike legal u/s 22(1) and 22(2)
 Illegal under S. 24
 Justified – when dds are made in line with their rights and as per T&C of employment
condn
 Unjustified –when demand is not made in line with their rights and as per T&C of
employment condn
 Strike maybe illegal but justified, then what is the status of the strike?
o If it is a legal strike, workers will be paid wages for the days they conduct
strike. For illegal strike, no wages will be paid. Further, workers maybe
punished for participating, instigating, or providing financial assistance to
illegal strike. Penalty is Rs 500 per worker

Section 23-General Prohibition of strikes 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-
o (a) During the pendency of conciliation proceedings before a Board and
seven days after the conclusion of such proceedings;
o (b) During the pendency of proceedings before a Labour Court ,Tribunal
or National Tribunal and two months, after the conclusion of such
proceedings;
o (bb) During the pendency of arbitration proceedings before an arbitrator and
two months after the conclusion of such proceedings, where a notification has
been issued under sub-section (3A) of section 10A; or
o (c) 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.

RANDOM QUESTIONS

 Penalties under act

 o not coming for exam
 Whether closing down of an estb amounts to lockout?
o No, as there is no economic coercion. It is matter of policy of co.
 Whether discp action taken against employees amounts to lockout?
o No. There are standing orders and action is taken accordingly. Thus
disciplinary action is not a part of lockout.
 Whether suspension of work due to security reason amounts to lockout?
o If ER refuses to employ/provide benefits or refuses to provide work, it is
considered lockout
o HC has different views as lockout is temporary suspension or refusal to
employ certain number of workmen- it depends on facts of case. In certain
case, ER can refuse EE to work which MAY amount to lockout
o If it is exercised as economic coercion, it falls under S. 2(k)
o There should be temporary suspension of work.
o Permanent suspension is not lockout
 Whether discharge/dismissal amounts to lockout?
o No, if dismissal happens under standing order and not as economic coercion
o Eg- If 4 EEs were instigating others to participate in strike, ER can dismiss 4
EEs- not lockout
o But if there is mass dismissal for participating in strike, it is lockout.
 If ER refuses to employ a single workman as he participated in strike, is it
lockout?
o This is not lockout as lockout is against certain number of employees
 Whether closure is lockout?
o No. Closure is permanent closedown while lockout is always temporary. Both
different.

STRIKE

1. Whether strike is a FR?

o No. Art 19(1)(c) declares that citizens have right to form unions/associations.
But these rights are not absolute. Reasonable restriction exists. Q came before
SC in following case:
o All India Bank Employees Association v. National Industrial Tribunal, 1962
SC
 Facts- Certain bank employess went on strike and claimed protn under
19.1.c
 Held- Even a very liberal interpretation of sub-clause(c) of clause (1) of
Article 19 cannot lead to the conclusion that the trade unions have
guaranteed right to strike, either as part of collective bargaining or
otherwise.
 The right to strike or the right to declare lock-out may be controlled or
restricted by appropriate industrial legislation, and the validity of such
legislation cannot be tested on criteria laid down in clause (4) of Article
19.
 SC observed that the right to strike “though not raised to the high pedestal
of a fundamental right….it is recognized as a mode of redressal for
resolving the grievances of workers.
  But the right to strike is not absolute under our industrial jurisprudence and
restrictions have been placed on it. These are to be found in Sections 10(3),
10A(4A), 22 and 23 of the IDA, 1947.”
o GR & M Works Ltd v District Collector
 Kerala HC summarised legal position of workers right to go on strike
 Though indian consti doesn’t provide right to strike as FR, it is open for
citizens to go on strike or to withhold labour only when demands are
justified and means adopted for strike are peaceful.
 In any democratic state, right to resort to strike can be exercised for
Redressal of grievance
 Object should be to have peaceful settlemtn of dispute and not to disturb
industrial relations
2. Whether courts or police can interfere in right of workers to strike?
o C Kannan v Superintendent of Police
o Kerala HC decided on the Q- If workers participate in an agitation against
employer, whether management can seek police protection?
o Facts- Mgt sought police protection where workers were peacefully
agitating against employees
o Held- If workers are indulged in peaceful agitation, then it is their right to
strike and court/police cant interfere
o If there is imminent danger to life/ppt of ER, then only court/police can
interfere
3. Right to demonstrate
o Kameshwar v. State of Bihar AIR 1962 C 1166
o Rule 4-A of the Bihar Government Servants’ Conduct Rules, 1956
provided that ‘no government Servant can participate in any demonstration
or resort to any form of strike in connection with any matter pertaining to
his conditions of service.’
o The validity of this rule was challenged on behalf of the State Government
Servants on the ground it interferes with the rights guaranteed under sub-
clauses (a), (b) and (c) of clause 1 of Article 19.
o A demonstration is a visible manifestation of the feelings or sentiments of
an individual or a group & is thus a communication of one’s ideas to others
& is in affect a form of speech or expression, because speech need not be
vocal since signs made by a dumb person would also be a form of speech
& expression.
o The court declared the rule bad as it banned every type of demonstration
howsoever innocent , and did not confine itself to those form of
demonstrations only which might lead to a breach of public tranquility or
would fall under the other limiting criteria specified in Article 19(2).
o Strike- The rule was not held bad in so far as it prohibited a strike, for there
was no fundamental right to strike.(All India Banks Employees’
Association v. National Industrial Tribunal AIR 1962 SC 171)
4. Right to strike of Govt Employees
o T.K.Rangranjan v. Government of Tamil Nadu & Others (2003)
Facts
o Government employees (including teachers of the Government-aided school
and colleges) went on an indefinite strike. Their demands relating to pension
benefits that had been curtailed on grounds of a resource crunch.
o The Government of TN first invoked the TN Essential Services Maintenanace
Act (TESMA), 2002 and then promulgated the Ordinance empowering the
Government the power of summary dismissal en masse, without giving the
employees an opportunity to be heard. Accordingly, the Government of TN
summarily dismissed about 1.70 lakh Government employees (including
teachers) for participating in a strike.
o The employees were also prevented to resume their duties.
o Apart from this , 2211 employees and their leaders were also arrested against
whom FIRs have been registered who had “incited” the strike or “indulged in
violence” .
o Government employees field a writ petition under Article 226 of the
Constitution in the Madras High Court.

o Single Judge HC- The single Judge of the High Court by an interim order
directed, inter alia, the State of TN
o To keep in the suspension and dismissal order issued to the striking
Government employees until further orders and
o To permit the employees to resume the duties forthwith in view of their
undertaking to withdraw the strike and resume duty.
o Division Bench of the High Court
o set aside the interim order.
o without exhausting the alternative remedy of approaching the
Administrative Tribunal, writ petitions were not maintainable.
o directed the State Government employees to approach the State
Administrative Tribunal and not the Court.
o those who were arrested and lodged in jails be released on bail.
o Supreme Court –5 ISSUES:
o 1- On powers of the High Court to exercise its extraordinary jurisdiction. Was
their any justifiable reason for the DB of the HC not to entertain the petition
on the ground the petitioner did not avail the alternative remedy provided
under the Constitution and the statute?
o SC set aside the order of the DB and observed: “It is to be reiterated
that under Article 226 of the Constitution, the HC is empowered to
exercise its extraordinary jurisdiction to meet unprecedented
extraordinary situation having no parallel. It is equally true that
extraordinary powers are required to be sparingly used. The facts of the
present case reveal that this was most extraordinary case, which called
for interference by the HC, as the State Government had dismissed
about two lacs employees for going on strike.”
o No Admin tribunal was functioning at that time in the state, so no
alternate remedy available
o 2- No fundamental right to strike. SC ruled that there was not fundamental
right to strike as it had been well settled in a series of cases decided by it.
o 3- Whether the Government Servants have right under any statute to resort to
strike? No. There was no statutory provision, which empowers the employees
to go on strike. On the other hand, there was prohibition to go on strike under
Rule 22 of the Tamil Nadu Government Servants Conduct Rules, 1973 and
under Rule 4A of the Central Civil Services (Conduct) Rules, 1955.
 o 4- Whether there is any moral or equitable justification to go on strike? No.
The court observed that the government employees cannot claim that they can
hold the society to ransom by going on strike. Even if there is injustice to
some extent in their case, they have to resort to the machinery provided under
different statutory provisions for redressal of their grievances;
o 5- Consti validity of TESPA, Service Rules, and Ordinance
o Referring 19(1)(a), (b), (c) – court reached to conclusion that
employees have right to form association and union, but looking at
safety, security, and public interest, the rights can be restricted. If any
protest disturbs peace/security of industry, the rules against it are valid
– even IDA doesn’t permit absolute right to strike
o Hence Supreme Court:-
o Diveded people into those:
 1. who participated in strike – should be reinstated with
undertaking that they wont indulge in any such act in future
 2. Who engaged in violent activities- govt to proceed u/
disciplinary rules against all those who had been 1. arrested or
2. against whom FIR filed
o For wages, it depends on policy of unit. If strike was illegal and
unjustified, wages may be deducted. The Government of TN would
pass an appropriate order for regularizing the services of reinstated
employees for the period for which they remained absent and this
would not be treated as a break in service.

LAYOFF AND RETRENCHMENT

o Lay off
o Layoff is prerogative of employer.
o It is discontinuation of work and is temporary in nature.
o S. 2 kkk defines it- ‘to discontinue work or activity or to dismiss or discharge
temporarily’.
o It can also be defined as inability of employer or refusal by employer to
employ certain workmen due to non-availability of raw material or excessive
prodn or power failure or any natural calamity or exhaustion of minerals
o Lay off and lock out – common features
o Both are the acts of the employer.
o Both involves subsisting employer-workman relationship- relationship doesn’t
come to an end.
o Both are temporary in nature
o Both are in continuing business
o Discontinuation of employment—suspension of service
o Lay off and lock out – differences
o In lay off, employer faces technical problem but in lock out, there is nuisance
on part of employee and so an employer is temporarily suspended as a part of
discp action
o Lay off is against 1 or many. Lockout is always against large number.
o EXTRA:
 o A lock-out is resorted deliberately by the employer as a coercive measure and
usually involves a temporary closure of the place of business.
o A lay-of occurs in a continuing business and does require compensation.
o A legal lock out does not entail payment of compensation.
o In lay-off statute makes it obligatory on the part of the employer to pay
compensation in accordance with the provisions of the IDA, 1947.
o In lock-out, it is discretionary with the tribunal to grant wages for the period of
lock-out depending upon the situations.
o Procedure for lay off
o S. 25 M – layoff, when it is allowed and when it is prohibited etc
1. Workmen (other than badly or casual workmen) whose name is there on
muster roll of employer will be laid off only with permission of app gov. Thus,
If ER wants to lay off employees whose name is on muster roll, permission
from SG/CG is req If you have casual/ badli workmen then they can be laid
off w/o permission from CG/SG
2. In app of employer, he has to state the reason for his intention behind laying
off the EEs clearly. Copy of app is also to be provided to concerned workmen
who will be affected. App must be in prescribed manner
3. Where workmen of an industrial estb being mine have been laid off for reason
of fire/flood/excess of inflammable gases or explosion, the employer in
relation to such estb shall within a period of commencement of lay off apply to
the app authority for getting permission to continue lay off
4. Govt will provide opp of being heard to EE and it will actually look at
reasonableness and justificiation behind lay off. It will look at int of workmen.
Gov may grant permission or refuse. If gov refuses, then reason for refusal
will also be stated. Copy of such order shall be communicated to ER and EE.
If gov has not communicated within 60 days, then permission shall have
deemed to be granted.
5. If lay off even continues after refusal from gov then that is illegal lay off
6. If lay off is illegal then workers are entitled for wages and benefits
7. If there are 100 or more workmen these prov will be applicable
o PAGE 48 onwards (second half) – 7.10.19

Lay-off and Retrenchment

 Common features
 Both are measure of economy.
 Both are declared by the employer.
 Statutory compensation must be paid.
 Differences
 Retrecnhment is a permanent measure to remove surplus staff.
 In lay-off employer-workmen relationship subsists,
 In Retrenchment, the relationship is terminated.
 Lay-off is temporary. Retrenchment is permanent measure.
Lay-off and Closure

 Common features
 Both are measures of economy.
 Adopted by the employer.
 Both require statutory compensation.
 Differences
 Lay-off is temporary while closure is permanent.
 In lay-off employer-workmen relationship subsists,
 In closure employer-workmen relationship is terminated.