JUDICIAL INTERPRETATION OF ANY PERSON IN INDUSTRIAL DISPUTES

Meaning of industrial jurisprudence, trade union freedoms- judicial responses, role of Supreme Court under Article 136 of Indian Constitution, problems of strike in Indian industry, and wage structure decisions of judiciary and its responsiveness in settling the industrial disputes has discussed in this chapter.

1. Introduction:
The role of management and trade unions in settlement of industrial disputes is very important and dynamic concept specially in India where the relations between capital and labour is very critical in view of poverty, illiteracy, and the ignorance of the majority of the workers in organized industry and also in unorganized sectors. Therefore always many conflicts between these two parties arise frequently posing a great threat to the industrial peace and production is affected and ultimately the progress of the society gets crippled at this juncture, is set rite the machine of industry for the progress of the nation, it is the responsibility or obligation of the judiciary to interfere and settle the disputes.

The role of the judiciary is very significant in providing social justice to the workers by the eminent judges. Justice Krishna Iyer in the case of Indian Express News Papers Pvt. Ltd., Vs Indian Express News Papers Employees Union1 said that industrial jurisprudence is not static, rigid or textually cold but dynamic, burgeoning and warm with life. It answers in emphatic negative to the biblical interrogation. The Industrial Tribunal of India in the areas unoccupied by precise block letter law, go by the constitutional mandate of social justice in the claims of the little people. It can be pointed out here that in every state certain ideas or values will be followed and they can be achieved through various laws. These values are very important to the society because through these values the state desires to mould the society. In India these values are fundamental Principles which are projected in the Constitution. The Constitution of India embodies the noble and grand vision of liberty, equality, and fraternity and also promise to secure social, economic and political justice. The Constitution of India desires to attain these goals through the legislation and judiciary. In this manner the Constitution has served as basis for jurisprudence The same is true in the case of industrialjurisprudence, therefore it is said that India Constitutional law is the touch stone to the development of industrial jurisprudence in India. The industrial jurisprudence in India is value oriented and seeks to attain a very just and social order. The Industrial Dispute Act, 1947 is a peace of welfare legislation desired in achieving social as well as economic

1978, I LLJ II (SC), pp.12 13.

justicewhich is the aim of industrial jurisprudence2. In the early periods of Industrial Revolution, Laissez Faire continued to rule for fight some time. Under the system of Laissez faire the activities of Government are very limited to collection of revenues and maintenance of peace and order and defense against external threats or aggression. This type of Government laid to many social problems including anarchy in industrial relations and exploitation of labour giving rise to many serious social tensions. But after some time the Industrial workers had self conscious and started understanding or realizing their importance for the industry to organize themselves into unions and also started representing their grievances to the authorities concern including the employers.

1.2 Objective:
This paper aims to critique some of the legal principles under which industrial disputes are resolved in India. The contents of the paper are divided into two parts. The first part, which is largely descriptive, begins by listing some aspects of the Industrial Disputes Act, 1947. This legislation operates by judicially intervening in the contract of employment in the event of a substantial dispute between employers and employees and aims to ensure an equitable outcome to the dispute. The role of trade unions in India is briefly discussed in this context, and the section concludes by posing some questions regarding the efficacy of the Industrial Disputes Act. The second part of the paper attempts to discern the impact of the law on the process of reaching agreements by placing the discussion around the positive and normative consequences of the law. The discussion in this paper is confined to the class of issues where labour and their employers can gain by co-operating but run into a tussle over the precise apportioning of gain, compelling the analysis to be organised around the Nash solution to the bargaining problem.

After a brief narration of the normative content of the Nash bargaining solution, it is shown that the constraints imposed by Indian labour law in the quest for justice, encourage outcomes which signify normative effects of a dubious nature. It is also pointed out that the institutional constraints created by the Industrial Disputes Act, act not only to encourage inefficient outcomes, but can also have the additional effect of stalling agreements. Finally it is suggested that instead of intervening judicially, it might be preferable to give workers rights that improve their bargaining position and enable them to directly interact with their employers. The Industrial Disputes Act 1947, among other things, provides the basis for settling disputes that may arise between employers and employees. A typical list of disputes that are covered by the Act include discharge or dismissal of workers, interpretation of standing orders, wages, bonus, conditions of work, rationalization, lay-offs and retrenchments3. According to the Act if concerned parties are unable to resolve a dispute, they have several options open to them. One possibility is to set up a so called Works Committee consisting of workers and employers
2 3

G.M.Kothari,Labour& Practice, vol. I, 1980, p. A 3. The Industrial Disputes Act 1947 Section 2(k). Also the second and third schedules of the Industrial Disputes Act.

which tries to sort out the dispute.4 However since the recommendations of such committees do not have any legal standing, this route of resolving disputes is very rare. The more common option is to initiate a process called conciliation, which involves the active participation of the government. The government steps into the picture, if one of the disputing parties asks for it and the government considers the demand valid or alternatively if a dispute appears to be persistent in the perception of the government. Initially, a conciliation officer from the labour department5 or a board of conciliation appointed by the government if the dispute is particularly complex, is required to try working out a settlement. A settlement, though binding on all parties, does not have the same status as a court order. As a consequence it is widely believed that conciliation is viewed as just a stage before adjudication. If a settlement is not worked out, a failure report is tabled by the conciliation officer or board. At this point, parties to a dispute can ask for an arbitrator to resolve the conflict, but this is again not very common as the award of the arbitrator does not have legal standing. Instead, proceedings then move to the final stage called adjudication, upon a reference being made by the government. The Industrial Disputes Act gives the government the power to appoint labour courts and tribunals to adjudicate disputes. There are three kinds of courts - labour courts, industrial tribunals and national tribunals. Labour courts deal with relatively minor matters and concerns that affect less than 100 workmen, while disputes of greater import are looked after by industrial tribunals. These bodies consist of a person who is or has been a judge of a High Court or has been a district or additional district judge for a period not less than three years. The judgments and awards of labour courts and tribunals are final and not subject to regular appeal. If some party to a dispute is not satisfied with the judgement or award, they can move for special leave appeal to the Supreme Court under Article 136 of the Constitution of India or seek writ jurisdictions of the relevant High Court under Articles 226 and 227 of the Constitution of India. Broadly speaking, these steps can be taken only on the grounds that the judgement or award of the labour court/tribunal is inconsistent or faulty on a substantial point of the law.

2. The Industrial Disputes Act and the Contract of Employment

2.1 Judicial Intervention in the Contract of Employment under the Industrial Disputes Act As a point of departure into the many implications of the Industrial Disputes Act, it might be useful for a moment to look at the background behind the legislation of the Act. Around the time of the Indian independence, legislators faced the choice between orienting the labour law towards a system where collective bargaining between unions and employers would be encouraged, or developing a legal system that would emphasise judicial intervention in the resolution of labour conflicts. Protagonists favouring the latter approach won, on the grounds that this approach would better serve the cause of social justice. It was felt that social justice would be best administered by a labour judiciary because it would keep in mind the power position and
4 5

Id Section 3 Id Section 4

susceptibilities of workers.6 The country already had a legislation on hand - the Defence of India Rule 81-A, that provided the basic structure of the Industrial Disputes Act. The British Government had enacted the Defence of India Rule 81-A to ensure that industrial disputes did not disrupt the war effort. Among its provisions was the facility of referring industrial disputes to adjudicators, and thus with a few minor changes the Defense of India Rule 81-A became the Industrial Disputes Act of 1947.
To get a sense of the role that the labour courts and tribunals were envisioned to play in the task of ensuring social justice, it is instructive to look at some of the early judgements of the Supreme Court of India. In fact before the Supreme Court was set up, a judgement of the Federal Court - Western India Automobile Association v The Industrial Tribunal Bombay and others, provided the basic parameters that have come to define Indian Labour Law 7. The issue raised in this case was whether an industrial tribunal can direct the employer to re-instate a worker. The judgement said that while a civil court could not re-instate an employee, an industrial tribunal most definitely could do so. It was pointed out that the object of adjudication was to substitute for strikes and lock-outs by doing justice to the workers claim, and that this could not be done if the focus was going to be on the enforcement of contractual agreements. Instead it was felt that the law was so structured that industrial tribunals adopted a different approach to the problem. The tribunals were in effect creating new rights since they are empowered to modify or change existing contracts and thus existing contracts could be overwritten. A ratification of this judgement was made in one of the early Supreme Court judgements - Bharat Bank Ltd v their employees8. To quote

"It is its [Tribunals] duty to adjudicate on a serious dispute between employers and employees as affecting their right of freedom of contract and it can impose liabilities of a pecuniary nature and disobedience of its award is made punishable. The powers exercisable by a tribunal of the nature were considered in a judgement of the Federal Court of India in Western India Automobile Association v Industrial Tribunal Bombay, and it was observed that such a tribunal can do what no court can, namely add to alter the terms or conditions of the contract of service. The tribunal having been entrusted with the duty of adjudicating a dispute of a particular character, it is for this reason that it is armed with the extraordinary powers."9 Another passage from the same judgement says"In settling the disputes between the employers and workmen, the function of the tribunal is not confined to administration of justice in accordance with law. It can confer rights and privileges on either party which it considers reasonable and proper, though they may not be within the terms of the existing agreement. It has not merely to interpret or give effect to the contractual rights and obligations of the parties. It can create new rights and obligations between them which it considers essential for keeping industrial peace."
6
7

V.D Kennedy(1966) Unions, Employers and Government Bombay, Manaktalas Western India Automobile AssociationVs Industrial Tribunal 1949 I L.L.J 245 8 1950 II L.L.J. 921 9 Id

This, then is the definitive thematic of Indian labour law any labour contract/agreement can be overridden and redefined on the basis of notions held by the labour courts as to what is just, fair and expedient.

2.2 The Contract of Employment under Common Law and Collective Bargaining

This kind of intervention is quite in contrast to the Common Law perception of the contract of employment, which is rooted in the general law of contracts. Common Law sees the contract of employment as a legally binding agreement between "master and servant" or to state it in more contemporary language between employer and employee. The employer derives a benefit from the employee working under his directions, and the employee in turn is compensated with wages. One of the corner stones of the Common Law of contracts, is that contracting parties are free to lay down their own terms and that there can be no intervention by anyone not party to the contract. As any standard legal text points out, contracts can be rescinded only under circumstances where it can be shown that the contract involved fraud, duress, mistake or misrepresentation. Thus, the law of contracts does not typically concern itself with the adequacy of consideration, leaving the contracting parties to make their own bargain, howsoever inequitable. As industrializing societies have sought greater equality in society, one institutional response has been to progressively substitute collective for individual bargaining10. Specifically, as regards labour and industrial relations, collective bargaining of some sort has more or less displaced the master and servant relationship as the rubric around which employers and workers interact. Apart from this, the modern welfare state compels the inclusion of statutory terms along with the terms agreed on by parties. Typically such terms include the provision of safe working conditions, reasonable work hours and the payment of minimum wages. Though collective bargains of a sort have come to dominate many of the interactions between employers and employees all over the world, there is a good deal of variation as to both the extent to which the law regulates collective bargaining and the manner in which the law intervenes with the collective bargaining process. An exhaustive description of the relationship between the legal system and collective bargaining in various parts of the world cannot be seriously attempted here, but it is important to mention a couple of broad features present in diverse legal systems, so as to provide a working comparison with the Indian law. Two common features of labour law in most Common Law countries (also many Civil Law countries) are of particular relevance. One, a number of legal systems require by statute that the contracts of employment include certain standardised terms regarding minimum wages, working hours and safe working conditions. Second, the process of collective bargaining which has replaced the individual bargain, involves trade unions as legal representatives of the worker and the agreements worked out between unions and employers have a legal standing. In other wordstrade unions typically negotiate terms of employment on behalf of individual
10

See the chapter titled "The Changing Function of Contract" in Wolfgang Friedmann(1972) Law in a Changing Society Middlesex Penguin Books 119-160

workers and these terms are usually enforceable by the courts.

2.3 Trade Unions

In India the relationship between employers and employees cannot in general be described as being confined to a direct bargain between the employer and the trade union. The problem stems from the legal framework within which Indian trade unions operate, coupled with the presence of the State and the Judiciary as additional actors. According to the Trade Unions Act of 1926, any seven adults can gather and register themselves as a trade union. As a consequence, independent of the size of membership, all registered trade unions enjoy the same legal rights, powers and privileges. Very broadly these rights include conferring on every trade union the status of a corporate body which can hold property, contract and litigate. In addition to this trade unions can call for a strike and, if they do so, they are exempt from criminal liability. However, the Trade Unions Act does not set up any rules that oblige employers to recognize a particular union as being representative of the workers interests. Court decisions have made it very clear that obligatory recognition of a particular trade union as a bargaining agent is not supported by any law11. At the same time Section 36 of the Industrial Disputes Act states "A workman who is a party to a dispute shall be entitled to be represented in any proceeding under this Act by (a) Any member of the executive or other office bearer of a registered trade union of which he is a member; (b) Any member of the executive or other office bearer of a federation of trade unions to which the trade union mentioned in clause (a) is affiliated; (c) Where the worker is not a member of any trade union, by any member of the executive or other office bearer of any trade union connected with or by any other workman employed in the industry in which the worker is employed and authorized in such manner as may be prescribed."
Therefore, it is the volition of the employer to decide who is a representative bargaining agent; but if a "dispute" arises even the smallest union can bring up the grievances of its members before the labour department of the local government for conciliation. As a consequence, multiple unions can exist, each winning the support of a fraction of the labour force employed in the concern, and the employer is obliged to deal with all of them12. Under this legal framework, the relationship between an union and an employer cannot be characterized by the usual understanding of the term - collective bargaining. Both the sides are not confined to a framework where a direct confrontation decides what each side will give and receive, because each side can always initiate or threaten to

11

See for example T.C.C Thozhilali Union v T.C.C 1982 I L.L.J 425. In this judgement it is explicitly stated Recognition by an employer of a trade union as a representative of its members and as their bargaining agent is a matter of volition on the part of the employer. 12 E.A. Ramaswamy and Uma Ramaswamy(1981) Industry and Labour: An Introduction Delhi Oxford University Press 86-94

initiate the conciliation - adjudication process.

It is very interesting to mention here that the Supreme Court of India has emphatically propounded the very ideas of social justice in the form of general interest of the community in its historical judgment of State of Bihar Vs Kameshwar13 which are given below: with the onward march of civilization, our notions as to be scope of general interest of the community are fast changing and widening with the result that our old and narrower notions as to the sanctity of the private interest of the individual can no longer stem the forward following tide of time and must necessarily give way to the broader notions of general interest of the community. This modern trend social and political philosophy well reflected and given expression in our constitution.

In the post-independence period India adopted the philosophy of social and economic justice and the planned production target by introducing scheme of mixed economy to avoid loss of production causedby the recurring industrial strife. Therefore the Government of India adopted strike or lockout ban policy to maintain peace in industry with quasi democratic measures which assured workers association in non essential matters.,The Government of India introduced a system of compulsory conciliation and adjudication machinery to achieve the objectives of maintaining industrial peace, productivity and social justice because of the workers who were very weak and incapable to bargain with the employer and settle the dispute. With a view to relax the legislative grip and to promote industrial democracy the judiciary has made new dimensions in maintaining the industrial relations. It is interesting to mention the Judgement of the Supreme Court in the case of J.K. Iron & Steel company Ltd. Vs Iron & Steel Mazdoor Union14 Mr. Justice Vivien Bose speaking from the Supreme Court laid down that the decision of the Tribunal must be based on established principles and not import any notion of so called justice or compulsion to safe guard the interest of the workman. In the same case Mr. Bose said that one sided benefit to the workman should not be given by evolving the notion of socioeconomic justice. The Supreme Court of India during the periods of 1950s decided industrial dispute generally within the ambit of the strict law and adhering to the literal interpretation of the provisions of labour legislation and contractual obligations. Justice Bhagavati, an eminent judge of Supreme Court in an exceptional situation evolved the notion of social justice who remarked that the ultimate object of industrial adjudication is true to help the growth and progress of the national economy to promote industrial peace15. With the effort of Chief Justice

13 14

AIR, 1952 SC 252. 1956 I LLJ 227 (SC). 15 Nirmala Textile Finishing Mills Ltd., Vs Second Industrial Tribunal, Punjab, 1957 SCR, 335.

GajendraGhadkar evolved law in response to the needs of the society. Therefore the judgment of the highest Tribunal reveals that the Judges of the Supreme Court have spoken different times with different voices. Some of the judges in delivering the judgment on labour matters have established new principles of industrial jurisprudence through judicial legislation to safe guard the emerging trade union freedoms, thus protecting the interest of the socially and economically weaker sections of the society.16 Justice Hidayatullah observed in the case of Rastriya Mill MazdoorSangh Vs Apollo Mills Ltd.,17 that the social justice is not based on contractual relations and is not to be enforced on the principles of contractof service, and it is something outside these principles and is invoked to do justice without a contract to back it. The Supreme Court of India played a very important role specially in protecting the interest of poor working class by ignoring the strict contractual laws and provided social justice to them.

Dr. P.B. GajendraGhadkar introduced the very important philosophy that the concept of industrial peace is positive and postulates the existence of the understanding, cooperation and sense of partnership between the employers and employees. The state should try to avoid strikes and strifes in the industrial world to maintain cordial and harmonious relationship between labour and management.

Justice GajendraGhadkar made his sincere efforts to uplift the deprived and downtrodden people within the parameters of the law. In the case of Standard Vacuum Refining Company Vs Its Workmen18 with a view to clarify the transformation era of notions and conception of labour, the advent doctrine of welfare state confined and routed deeply in the nations progressive philosophy which have rendered the traditions concept of laissez faire absolute. And where the social consciousness of the generalcommunity becomes more alive and active, the welfare policy of the state takes a more dynamic forum, the national economic progress stage to stage and under the growing strength of trade union, collective bargaining and industrial democracy enter the field. The labour problem ceases to be purely arithmetical and physical satisfaction.

It is also to be pointed out that industrial adjudication and also necessarily to be aware of the current economic thought around in the case of J.K. Cotton Spinning and Weaving Mills Company Ltd., Vs Labour Appellate Tribunal19 It was held that the ultimate object of industrial adjudication is to help the growth and progress of national economy.

There are some judges who created history in delivering justice to the working class. One of such persons is
16 17

Ganga Sahai Sharma Trade Union Freedoms in India, 1990, p 192. AIR, 1960, SC, 819. 18 1961 I LLJ 22 SC. 19 1963 II LLJ 444.

justice V.R. Krishna Iyer who made revolutionary and progressive philosophy. To him the principle s of scientific management tend to value technical efficiency about human factors may not hold goods in managing human beings who have emphatically demonstrated in recent years that they cannot be treated as cogs in the wheel of machinery. They would like to have a responsible and respectable place in society and also in the industry where they work for about a 100 years.

Social justice is justice according to social interests subordinate to fundamental rights. In the case of Board of Trustees, Port of Bombay Vs Dilip Kumar20 Justice Bhagavathi said that justice must not only be done must seem to be done is not a requirement for courts alone, it applies with equal vigour, and rigour to all those who must responsible for fair play in action. The above discussion it is clear about the role played by the judiciary in providing justice and also for the maintenance of good labour management relations. There is no doubt that justice alone can maintain relations between the employees and employers and by which a nation can achieve productivity and industrial peace.

As described earlier, the conciliation - adjudication process involves government participation at many of the crucial stages of dispute resolution. The process of conciliation initially put in the hands of the labour department, may later end up involving the labour minister or even a higher executive functionary. Also, as noted earlier, if conciliation is not successful, the next stage involves the government as well. It is entirely the discretion of the government as to whether the dispute is referred for adjudication or not. Such involvement of the government at various steps of dispute resolution causes large - scale political interference in the process. In fact almost all union activity in India is controlled by prominent political parties and the independent union movement is quite weak21. Political parties see industrial workers as a source of votes and therefore actively patronise unions. Unions supported by the ruling party can look forward to favourable treatment of disputes raised by them. A study based on a sample of dispute cases shows that unions affiliated to the ruling party were favoured by referring demands raised by them for adjudication, while reference of demands raised by rival unions was willfully prevented22. In a similar manner the government can engineer the progress of a dispute in favour of an employer who has political patronage.
Adjudication, as conceived by the Industrial Disputes Act, was to have been procedurally more flexible than civil suit resolution. However, in practice labour courts and tribunals have come to follow very strict civil procedures in the sense that court procedure and the evidence delivered follow the dictates of the Civil Procedure Code 1908 and the Evidence Act I 1872. It appears that disputes get settled on the basis of legal norms and procedures rather than on

20 21

1983 Lab. IC 419 SC. E.A. Ramaswamy and Uma Ramaswamy Id 22 Debi S. Saini(1993) "Reference Power of State in Industrial Disputes Adjudication: A Study with Reference to Industrial Disputes in Faridabad" 35 (Part II) 4 Journal of the Indian Law Institute 233-252

the inherent matter of the case23. Thus unions have to be represented by individuals who are conversant with legal procedures, particularly so in a situation where employers are represented by advocates. It has been observed that these legal and political considerations have given rise to the phenomenon of "outsider union leaders" who man key positions in trade unions. These individuals, who are not workers, position themselves as having the requisite skill to see disputes through administrative, political and legal hurdles. Such outsider union leaders may not have the interest of workers as their central objective and have been documented as being susceptible to working out underhand deals with employers that ultimately result in weaker unions 24.Of course the exact orientation of such leaders would vary from case to case, but the point to note is that the relationship between workers and employers is not at all direct. Instead the relationship is mediated by a number of exogenous elements that include outsider union leaders, politicians, judges and administrators.

3. The Problem with Adjudication

Legal scholars have pointed out many problems with adjudication as it has come to be practised. Some of these problems are endemic to the Indian legal system such as long term delays and the fact that there are too few judges and courts in relation to the number of cases. Current estimates indicate that there are over three lakh cases pending disposal with labour courts and tribunals. Once a case is initiated it can take up to ten years for the judgement to be passed25. However there are other specific problems with adjudication that have also been highlighted. As has been mentioned earlier, the judges appointed to the labour judiciary are transferred from the civil judiciary. It has been noted that labour courts and tribunals emphasise formal civil court procedure rather than working with a more flexible inquisitorial method which is more likely to bring out the essential issues in a dispute. Furthermore, since the judges are transferred to labour courts and tribunals from civil courts, they are poorly informed about the issues at stake in labour disputes. The Industrial Disputes Act does allow for experts to assist labour tribunals and courts but this option is reported to almost never being exercised. Instead, the judge acts as a passive individual, while parties to the dispute present their case in the adversarial manner used in civil courts. Studies based on a sample of cases

brought forth for adjudication indicate that in the proceedings before labour courts, management is represented by management consultants or lawyers, while workers rely on the outsider union leaders mentioned earlier, to represent them26. If the proceedings are of an adversarial nature, the representatives of the management are in a better position to present their case than the workers representatives. If, this study and other similar works are taken to be representative of the ground realities, it is ironical that a legal system that jettisoned Common Law doctrines for being iniquitous, ends up generating iniquitous outcomes because the legal system persists in using
23

D.A. Desai(1994) "Industrial Adjudication and Social Justice in India" in Debi S. Saini (ed) Labour Judiciary, Adjudication and Industrial Justice New Delhi, Oxford & IBH Publishing Co. 24 Debi S. Saini(1995) "Leaders or Pleaders: Dynamics of Brief- Case Trade Unionism Under Existing Legal Framework" 37 1 Journal of the Indian Law Institute 73-91 25 UpendraBaxi(1994) "Industrial Justice Dispensation: The Dynamics of Delay" in Debi S. Saini (ed.) Labour Judiciary, Adjudication and Industrial Justice New Delhi, Oxford & IBH Publishing Co. 26 Debi S. Saini(1994) "Tribunal Procedure and Approach in Industrial-Disputes Adjudication: Industrial Justice on Reverse-Value Hypothesis" in Debi S. Saini (ed.) Labour Judiciary, Adjudication and Industrial Justice New Delhi, Oxford & IBH Publishing Co.

Common Law procedure and is unable to innovate on procedure.

If one were to locate a schematic, within which to position the adjudication process, one could reflexively categorise the adjudication process as an exercise in arbitration. The term arbitration27 as commonly understood by economists refers to a process where a third party makes an efficient decision regarding the terms of a contract, which could not or have not been specified properly by the contracting parties. A popular Industrial Organisation text maintains that the most basic requirement for meaningful arbitration is that the arbitrator must make fair, independent and informed decisions28.From the brief description above, interpreting adjudication as arbitration would be a bit of a misnomer because it is not at all clear that the system is geared towards making decisions that are necessarily informed. The contracts specified by adjudication are most likely not fair - at least not in the sense that fairnessin an arbitrated settlement would be customarily viewed and are unlikely to be economically efficient as well. To analyse the labour adjudication process, it is necessary to search for a framework that is able to incorporate the institutional idiosyncrasies of Indian labour law.

If it is accepted as a premise that there is an intrinsic inequity in the freely drawn up contract of employment and that some intervention is needed to raise the bargaining power of labour, then the central issue that comes up is the appropriate form of intervention. Should rights of workers be gained prescient to the act of forming a contract or should the State allocate rights as it sees fit? Is it preferable that the State guarantee certain rights while other rights are gained contractually? In seeking to answer such questions, given the admixture of normative and positive considerations that are thrown up, it becomes but essential to evaluate the Indian labour legislation, in a manner which is at once cognisant of the concerns of justice and the sense that one is dealing with rational agents who are involved in economic interaction with each other. This is a fairly formidable task because apart from the difficulties of conjoining notions of justice with those of economics, thus far the precursory step of identifying the positive consequences of the current system of legislation, remain inadequately explored. As the brief description of some of the key labour laws and institutions has shown, conflict resolution is a complex affair - it could possibly be a simple bargaining problem, but the presence of the Industrial Disputes Act, which cannot be ignored by the parties, can cause employer-employee interaction to become something far more intricate than a simple bargain.

4. Role of supreme court under article 136 of Indian constitution

The Article 136 of the Indian Constitution provides that the Supreme Court may, in its discretion, grant special leave to appeal from any Judgment, Decree, Determination, Sentence, or Order many causes or matter passed or made by any court or Tribunal. There has been a long controversy in the judicial circle about the use
27

The term as it is being used here, should not to be confused with the definition of arbitration as it is set out in the Industrial Disputes Act. 28 Jean Tirole(1988) The Theory of Industrial Organisation Cambridge The MIT Press 29-30

of this power. The question is whether the Supreme Court jurisdiction to entertain an application for leave to appeal against the award of a Tribunal was raised for the first time in the case of Bharat Bank Ltd., Vs The Employees of Bharath Bank29 Chief Justice Kania was of the opinion that the wording of the Article 136 were wide enough to give jurisdiction to the court to entertain such an application although having regard to the nature of the functions of the Tribunals, the court would reluctant to entertain such an application. Justice Fazal Ali was also of the opinion that since the Tribunal had all the trappings of the court and performed some kind of judicial functions its decisions were appealable to the Supreme Court. Justice Mahajan said that mere circumstances that a remedy in the nature of writ of certiorari was opened to the petitioners did not necessary laid to the conclusion that the power of this court under Article 136 of the Indian Constitution was circumscribed by that circumstance. Whatever judicial review was permissible in one form or other, the highest court in the land could exercise its special power and circumvent ordinary procedure by granting special leave. In the case of Bengal Chemical and Pharmaceutical Works Ltd., Vs Employees30. The Supreme Court laid down a principle that it could exercise its discretionary jurisdiction only in cases where awards were made in violations of the principles of natural justice, causing substantial and grave injustice to the parties or which raised an important principles of industrial law requiring adjudication and final decisions of the courts or which disclosed such other exceptional or special circumstances which merited the consideration of the court. In subsequent cases on the basis of, the observations denied interference with the conclusions as to be reasonableness and fairness by authorities empowered under the industrial dispute Act to arrive at such conclusions. In other words the employers had been prevented from canvassing such a question because the matter of fairness and reasonableness was left by the legislature for decisions with authorities constituted under the Act31. Even in cases where the Governments power of reference under Section 10 of the Industrial Dispute Act, 1947 was questioned, the Supreme Court of India did not think it right to interfere with decisions taken by the Government under that provisions through making reference to the Government is required to indicate the nature of the dispute, was of the view that Government acting under Section 10 of the Industrial Disputes Act was doing an administrative Act and the fact that it had to form an opinion has to the factual existence of the dispute as a preliminary step to discharge its functions, did not make it the less administrative in character and the court could not canvas the order closely as it was a judicial or quasi Judicial Act. Further it is to be stated that the court could not quash the proceedings merely because, in its opinion the Government had no material to
29 30

1950 II LLJ 921. 1959 I LLJ 413. 31 RohtakHissar District Electric Supply Company Ltd., Vs State of U.P., 1966 II LLJ 330.

come to that conclusion. In the case of State of Madras Vs C. Parthasarathi32it was said that rather the Government have power in the interest of industrial production to set the machinery of settlement in motion without pausing to enquire what the specific points of the disputes were.

5. Right to strike : The Constitution, Courts and Adjudication

In India it is known fact that the strikes are frequently resorted by the workers and the trade unions because of various reasons such as lack of proper trade union consciousness and lack of legal awareness about the consequences of strikes. The trade unions leaders emotionally declare strikes against the employers using different types of methods. The causes of the strikes are many such as non payment of proper wages, stringent working conditions, failure of collective bargaining system and other methods of settlement of industrial disputes, involvement of political parties, dominating attitude of the management, failures in providing labour welfare and the social security. The right to strike has also been recognized in all democratic societies. Reasonable restrain use of this right is also recognized. Similarly the employers also have the freedom to use the weapon of lock out in case workers fail to follow the rules of contract of employment. The degree of freedom granted for its exercise varies according to the social, economic and political variants in the system for safe guarding the public interest, the resort to strike or lock out and in some cases the duration of either subject to rules and regulations or voluntarily agreed to by the parties or statutorily imposed this has been criterion underline the earlier legislation for regulating industrial relations in the country33. The strikes and lock outs are useful and powerful weapons in the armoury of workmen and employers and are available when a dispute are struggle arises between them. Threats of their use even more than their actually use, influence the course of the contest. The threat is often explicit much more often tacit but not for that reason less effective34. Trade unions and employers will have to use very skillfully these weapons strike and lock out by way of threatening or actual may help one party to force the other to accept the demands, or atleast to concede something to them. But reckless use of this weapon creates the risk of unnecessary stoppages. The stoppages hurt both parties badly create worse tensions and frictions and violations of law and order and above all, from the public point of view they retard the Nations Economic Development. A strike could be defined as a
32 33

1953 I LLJ 174. Report of the National Commission on Labour, 1969, p 327. 34 Indian Law Institute Labour Law and Labour Relations, 1987, p 361.

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. In English law, there is no comprehensive legal definition of strike or industrial action. Perhaps the closet we come to is Lord Dennings attempt in Court of Appeal in 1975, when he said that a concerted stoppage of work by men done with a view of improving their wages or conditions, or giving vent to a grievance or making a protest about something or other, or supporting or sympathizing with other workmen in such an endeavour. Strikes are, in other words, weapons in the hand of the workers and their organizations to promote and protect their economic, occupational and social interests in the broad sense of the term. With the constitution coming into force there was an attempt made to bring in the theory of a concomitant right, as was inferred in RomeshThapars case35 to infer the right to strike within the confines of Article 19(1) (c) of the Indian Constitution. In the case of All India Bank Employees Association Vs. National Industrial Tribunal and others36 held as follows : The right guaranteed by Art 19(1)(c) of the Constitution of India does not carry with it concomitant right that unions formed for the protection of the interests of labour shall achieve their object such that any interference to such achievement by any law would be unconstitutional unless it could be justified under Article 19(4) of the Indian Constitution as being in the interest of public order or morality. The right under Article 19(1)(c) extends only to the formation of an association or union concerned or as regards the steps which the union might take to achieve its object, they are subject to such laws and such laws cannot be tested under Article 19(4) of Indian Constitution37. In another case B.R. Singh Vs. Union of India38, justice Ahmadi was of the view that the right to strike cannot be equated to that of a fundamental one. Strike in a given situation is only a form of demonstration. There are different modes of demonstrations, eg. Go-slow, sit in, work to rule, absenteeism, etc and work. Strike is one such mode of demonstration by the workers for their rights. The right to demonstrate and therefore the right to strike is an important weapon in the armoury of the workers. The right has been recognized by almost all democratic countries. Though not raised to the high pedestal of a fundamental right, it is recognized as a mode of redress for resolving the grievances of the workers. But the right to strike is not absolute under our industrial jurisprudence and restrictions have been placed under it.
35 36

1950, SCR, 404. (1962) 3, SCR, 269. 37 Mayuri Patel; Trade Union Law in India, Labour Industrial Cases Journal, 2008, p. 343. 38 1989 (4), SCC, 710.

5.1 Wage Structure Decision of the Judiciary

The concept of 'Minimum wage' was first evolved by International LabourOrganisation in 1928 with reference to remuneration of workers in those Industries where the level of wages was substantially low and the labour was vulnerable to exploitation, being not well organized and having less effective bargaining power. As per the recommendations of Royal Commission on Labour in India, a draft bill was considered by the Indian Labour Conference in 1945, introduced in Indian Legislative Assembly in 1946 which was followed by the adoption of Minimum Wages Act, 1948. The Act was enacted to secure the welfare of the workers in a competitive market for a minimum limit of wages in certain employments39. Wages means all remuneration capable of being expressed in terms of money, which would if the terms of contract of employment, express or implied were fulfilled, be payable to a person employed in respect of employment or of work done in such employment. The Minimum Wages Act, 1948 provides for fixation and enforcement of minimum wages in respect of scheduled employees to prevent sweating or exploitation of labour through payment of low wages. The object of the set is to ensure a minimum subsistence wage for workers. The Minimum wage, as the name itself implies, represents the level below which wages can not be allowed to drop. It is prescribed in order to check : a)The evil of sweating; and b)For the benefit of workers who are not in a position to bargain with their employer.40

In Randhir Singh v. Union of India case41 the Supreme Court observed as it is true that the principle of 'equal pay for equal work' is not expressly declared by out of the Constitution to be a fundamental right. But it certainly is a constitutional goal. Article 39(d) of the Constitution proclaims 'equal pay for equal work for both men and women' as a Directive Principle of State Policy. 'Equal pay for equal work for both men and women' means equal pay for equal work for everyone and as between the sexes. Directive Principles, as has been pointed out in some of the judgments of this Courthave to be read into the fundamental rights as a matter of interpretation. Article 14 of the Constitution enjoins the State not to deny any person equality before the law or the equal protection of the laws and Article 16 declares that there shal1 be equality of opportunity for all citizens in matters relating to employment or appointment to any office and the State. These equality clauses of the Constitution must mean something to everyone. To the vast majority of the people the equality clauses of the Constitution would mean nothing if they are unconcerned with the work they do and
39 40

Preamble of the Minimum Wages Act, 1948 All India Reserve Bank Employees Association V. Reserve Bank of India, AIR 1966 SC 306. 41 (1982) 1 SCC 618: 1982-I-L.L.J-344

the pay they get. To them the equality clauses will have some substance if equal work means equal pay construing Articles 14 and 16 of the Constitution in the light of the Preamble and Article 39(d), it is of the view that the principle 'equal pay for equal work' is deducible for those articles and may be properly applied to cases of unequal scales of pay based on no classification or irrational classification though those drawing the different scales of pay do identical work under the same employer."

6.Conclusion:
The statement that emerges is that - Indian labour law provides workers and their employers with idiosyncraticrights that encourage non co-operative outcomes, where otherwise with a more conventional rights entitlement, co-operative outcomes are more likely to prevail.Much of the substantive content of contract law such as the doctrines that cover breach of contract can be seen from this perspective - as essential safeguards against defection. By analogy, to the extent agents working under the shadow of Indian labourlaw look out and see unfavourable outcomes, they are bound to reject the initiation of many co-operative ventures. Put another way, by offering detrimental ex-post resolutions, the Industrial Disputes Act ends up affecting the ex-ante behaviour of agents, resulting in a substantial loss to the sum of co-operative undertakings that could have been secured. In the final analysis of things, the mode of intervention with the division problem does not resolve the problem of inequity between workers and employers because employers often have better resources and networks to take on the adjudication process. Apart from the obvious advantages gained by employers on account of possessing superior resources, yet another source of inequity is the endemically slow processing of cases by the judicial machinery. Such delays can and often do work to the detriment of workers and to the advantage of employers.Correspondingly, the status quo of workers as a group can be influenced by a host of circumstances that can raise their well-being, say, by increasing productive employment opportunities, by encouraging norms that work in favour of collective bargaining and by legally ensuring good working conditions for all workers. It is the writing point of this paper to suggest that future discourse on Indian labour law be re-oriented in this direction.