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6. Legal Framework
Of
Industrial Relations
Professor Debi S. Saini
(debisaini@mdi.ac.in)
Management Development Institute, Gurgaon
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Legal Framework of IR
Issues discussed in the presentation are:
Main laws affecting IR: IDAIESOATUA
IDA: Objectives, features, definitions
IR machinery: Conciliation, adjudication, Arbitration
IInd andIIIrd Schedules under the IDA
Standing Orders Act: Applicability & Features
TUA: Features, Rights & Obligations of union
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Background
&
Salient Features of IDA
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Principal Laws Affecting IR
Basically 3 laws affect IR:
1. The ID Act 1947
Lays down framework for ID resolution
2. The Industrial Employment (Standing Orders) Act, 1946
Promotes uniformity in employment. conditions
3. Trade Unions Act 1926
Registration of TUs & protection for CB
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The IDA: Structure & Background
Principal IR law: Applies to whole of India
IDA contains: 40 sections + 5 Schedules
Creates bodies: conciliatory/adjudicatory/administrative
Rules: ID (Central) Rules, 1947
80 Rules + Various formats provided
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Main Features of the ID Act 1947
1. Provides framework of CB for non-mgrl. WM
Defines ID (S. 2k); workman as non-mgrl. (S. 2s)
Prohibits parties to indulge in ULPs (Sch. V)
2. Provides a consultative/arb./adj. IR model
Consult: WC; CO; BOC; Court of Inquiry (Ss. 36)
Voluntary arbitration of indl. disputes(S. 10-A)
Adj. machinery: LCITNT (one-member bodies)
Though both conciliators/adjudicators need training
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Main Features of the ID Act 1947 contd
3. Provides re-instatement by LC/IT (S. 11-A/17-B)
4. Provides two sets of lab. adm: Cent./State (S. 2a)
5. Ensures Govt.s major control in IR/indl. peace
6. Notice for changing the service conditions (Ss. 9-A/33)
7. Regulates strikes/lockouts (for indl. Peace)
8 Restricts lawyers in concil. & adjudi. (S. 36)
Main Definitions
in the IDA:
Workman, and
Industrial Dispute
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Who is a Workman under IDA [Sec. 2 (s)]
Any person (including apprentice)
employed in industry
to do any of the following work:
Manual/unskilled/skilled/tech./operational/clerical/supervisory
for hire or reward (with express or implied terms)
But does not include:
One who is subject to Army Act/Air Force Act/Navy Act
Employed in police/prison service
Employed mainly in managerial/administrative capacity
Employed as supervisor but draws salary of Rs. 10000+
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Who is a Workman under IDA [Sec. 2 (s)] contd
Person employed:
Contract of & for employment (Case: Dharagdhra Chemical Works)
Supervision & control
Former is an employee/WM; but latter is an independent contractor
Employer can require what/how; contractor only what is to be done
Designation not of great importance
Nature of duty is the essence
Mainly clerical & incidentally supervisory is clerical work & vice versa
Piece-rate can also involve masterservant relationship
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Workman contd.
Employed mainly in mgrl./administrative capacity
(Standard Vacuum Oil Co. v. Commissioner of Labour)
Held:
If an individual hasofficers subordinate to him
whose work he isrequired to oversee,
if he hasto take decisions
and also isresponsible for ensuring that
matters entrusted to him areefficiently conducted,
& anascertainable section of work isassigned to him,
an inference of a position of mgt. wouldbejustifiable
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What is an Industrial dispute? (S. 2 k.)
Any dispute or difference
between : employers & employers
employers & WM
WM & WM
which is connected with
employment, non-employment,
terms of employment, or conditions of labour
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Industrial dispute contd
Existence of dispute is central: demand+ rejection
Who can espouse the dispute:
Substantial no. of WM themselves or a union (even minority)
About 20% WM held as substantial
Community of interest is important (Rationale: CB promotion)
Individual dispute per se is not ID unless espoused as collective
Except termination disputes (Sec 2A)
Who can be Any person
--can even be a non-workman, if community of interest
Authorities Under
the IDA
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Authorities under the IDA
I. Preventive/Conciliatory Mechanism
1. Works Committee (Section 3)
To be constituted in industries with 100 or + WM
to promote measures for amity and good relations
& to that end comment on matters of common interest
Role as agreed by ILC:
Conditions of workSafetyWelfare fundRecreation
Adjusting of festival holidaysThrift & savings--Education
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Authorities under the IDA contd
2. Conciliation Officer (S. 4)
Can be appointed for an area or industry
Duty: Promoting the settlement of indl. disputes
3. Board of Conciliation: Constitution & Duty (S. 5)
Chairman + 2 or 4 members
Members represent both parties equally
Appointed by govt. onrecommendation of parties
Duty: Promoting settlement
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Authorities under the IDA contd
4. Court of Inquiry (S. 6)
To enquire into any matter connected or relevant to an ID
When appointed: App. Govt. appoints it as occasion arises
May consist of one independent person or more as specified
where 2 or more persons mentioned one to act as chairperson
Rationale: legitimacy to genuineness of claim
Also: in U.K.: Court of inquiry USA: Fact finding boards
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Authorities under the IDA contd
II. Adjudicatory Mechanism
5. Labour Court (LC) (Section 7)
App. Govt. may constitute one or more labour court/s
Done for adjudicating ID of any matter in 2nd Schedule
Or for performing such other functions, as specified
Constitution: Shall consist of One person only
Qualifications:
HC Judge/ADJ 3 yrs./Jud. Off. 7 yrs.
Or P.O. of LC under a State Act 5 yrs.
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Authorities under the IDA contd
6. Tribunal (Sec 7-A) (Also called Indl. tribunal or IT)
App. Govt. may constitute one or more IT
Done for adjudicating any matter in Schs. II/ III
Constitution: Shall consist of One person only
Qualification: HC Judge/ADJ for 3 years
App. Govt. can appoint 2 assessors to assist IT
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Authorities under the IDA contd
7. National Tribunal (Sec 7-B)
Cent. Govt. may constituteone or more NT
Done for adjudicating IDs, which involve
Qs. of national importance
or WM in more than one state arelikely to be affected
Constitution: Shall consist of one person only
Qualification: High Court Judge
C. Govt. may appoint two assessors to assist
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After section 9B of the principal Act, for Chapter IIB, the
following Chapter shall be substituted, namely:
CHAPTER IIB
Grievance Redressal Machinery: Setting up of Grievance Redressal Machinery
9C. (1) Every indl. establishment with 20 or + workmen to have one or +
Grievance Redressal Committee for the resolving individual grievances.
(2) It shall consist of equal no. of members from the employer & workmen.
(3) Chairperson: From employer & WM alternatively on rotation every yr.
(4) Total no. of members of this Committee shall not exceed 6
Provided: one woman member if has 2 members; and if more than it will
increase proportionately.
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After sec. 9B of the principal Act, for Chapter IIB, the
following Chapter shall be substituted, namely: Contd
(5) Shall not affect WMs right to raise ID on same matter under IDA
(6) May complete proceedings: in 30 days on receipt of a written application.
(7) The workman may prefer an appeal to the employer
--Who will decide within within 1 month of receipt
--And send a copy of his decision to the workman
Amendment of section11
(8) Thissec. not to apply to workmenfor whomthereisanestablishedGrievanceRedressal Mechanismintheestablishment concerned..
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Major Schedules
in the
IDA
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THE SECOND SCHEDULE
1. Propriety/legality of an order passed under SOs
2. Application & interpretation of standard orders (SOs)
3. Discharge/dismissal of WM including re-instatement
4. Withdrawal of any customary concession/privilege
5. Illegality of a strike or lockout
6. All matters other than those specified in 3rd Schedule
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THE THIRD SCHEDULE
1. Wages, including period & mode of payment
2. Compensatory & other allowances
3. Hours of work and rest intervals
4. Leave with wages & holidays
5. Bonus, profit sharing, PF & Gratuity
6. Shift working other than as per standing orders
7. Classification by grades
8. Rules of disciplines
9. Rationalisation
10. Retrenchment of WM & closure of establishment
11. Any other matter that may be prescribed
Trade Unions Act 1926
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T U Act 1926: Components
The Act consists of 33 sections: Deals with these:
Regis.Rights/liab.RegulationsPenalties/procedures
Extends to whole India: Provides registration/immunities
Act amended in 1948 to provide for recognition
But never notified by Government
Act amended in 2001: Checks multiplicity
Administered by appropriate government
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Salient Features of TU Act 1926
1. Provides who can register a T.U.:
Any 7 or more WM employed in industry/ trade can
Later added: At least 10% or 100 whichever is less
2. Registrar of TUs: in each stateprocedure for regis. Appeal
3. Min. subscription: Rs. 1/ 3/ 12 p.a. (Rural/Unorganized/org. sectors)
4. Envisages general/political funds of a TU: Politicization
5. Outsiders permitted as TU members
6. Rights of TUs: Immunities to TU/members (Criminal/civil)
7. Obligation of TUs envisaged: Also to file returns
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Trade Union under TUA: Definition
2 (h) Trade Union means
any combination, whether temporary or permanent,
formed primarily for the purpose of
regulating the relations between
workmen and employers,
or between workmen and workmen,
or between employers and employers,
or for imposing restrictive conditions on
the conduct of any trade or business,
and includes
any federation of 2 or more TUs:
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Industrial Employment
(Standing Orders)
Act, 1946
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IE (SO) Act: Preliminary & Objectives
The Act seeks to regulate:
Classification of WMDischarge/dismissalShifts
Disciplinary actionAttendanceHolidays provides terms & condns
Preamble:
to define with sufficient precision
the conditions of employment
and to make the said conditions known to WM
What are St. Orders: Rulesrelate to matters in the schedule
Major features:
precision of working conditionsmake the condns. known
give WM a voice in themuniformity of conditions
regulation of: recruitment, leave, shift, discharge, dismissal
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IE (SO) Act: Salient features
1. Application:
Every est. with 100 or +WM; App. Govt. can extend: estab. 50 or +WM
Cent. Government has extended to estab. employing 50 or +
2. Clarify to WM: empl. conds. relating to matters in schedule
3. Meaning of certain major terms:
Wages/WM, same as in IDA
App. Govt. same except controlled industry
4. Cert. Off. can modify/add to SOs & adjudicate
Fairness, reasonableness
5. App. Govt. empowered to frame: Rules, model SOs
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IE (SO) Act: Salient features contd
6. Appellate Auth. provided for to hear/decide appeal
7. Provides for subsistance allowancesuspension
8. Provides for temporary application of SOs
9. Penalties providedFines only; no imprisonment
10. Model St. orders framed by Central Govt.
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