IN T R O D U C T IO N

T h is case b o o k on L A B O U R LA W A N D L A B O U R R E L A T IO N S
is intended to place in th e hands o f stu d en ts o f trad e u n io n s and indus­
trial d isp u te s law, the leading ju d g m en ts, m ainly o f the Suprem e C ourt,
and w here th ere a re significant cases decided, the decisions o f the H igh
C ourts in In d ia , to g eth er with the relev an t sta tu to ry provisions. I t is a
follow -up o f the ,1968 .edition o f th e book on L A B O U R L A W A N D
L A B O U R R E L A T IO N S published by th e In d ian Law Institute.

Previously, it was intended to retain th e basic fram ew ork o f the

1968 b o o k , w ith som e changes w hich m ight be necessary in view o f the
subsequent d evelopm ent o f law in this field. On closer exam ination,
how ever, it was found th at m ere tin k e rin g w ith the previous editio n will
n o t do. T here h a d been to o m an y far reaching changes in, partly,
statu te law, b u t m ainly judge m ade law , to naake it possible for the above
short c u t being a d o p te d . Old decisions had becom e obsolete and new
decisions p ro n o u n ced . -\ som ew hat different approach from the previous
edition was also c o n tem p lated . I t w as, th erefo re, decided th a t a com ­
pletely new book b e w ritten .

W hile doing so, the editors have how ever tak en advantage o f the
earlier ed itio n , by including in the p resen t edition, som e o f the cases and
m aterials in the first edition, which have not becom e obsolete, and may
conveniently fit in to th e p a tte rn o f th is book.

T h e m eUiodology adopted is th a t im p o rtan t topics in the 'trade

unions an d in d u strial disputes law, have been sub-divided into p arts. Each
p a rt has an in tro d u c tio n giving b rie f resum e o f the law as it has deve­
loped o n th e subject. T h ereafter, th e facts o f each case and the relevant
statu to ry provisions a re repro d u ced . T h e law as laid down by courts has
been rep ro d u ced , as fa r as possible, in (he language o f th e judges. For
selection o f th e relevant p ortions o f th e judgm ents, care has been taken
so th a t ( 1) th ere is n o repetition; an d ( 2 ) im p o rta n t portions of th e judg­
ments a re com pletely reproduced, b u t w ith o u t m aking the volum e too
bulky. A lm ost every case laying dow n a principle and deserving atten­
( ii) LABOUR LAW AND LABOUR RELATIONS

tio n has been covered. So th is b o o k will be o f help n o t only for th e

students and academ icians, for w hom the 1968 edition w as prim arily
m eant but also lawyers, judges, em ployers and trade un io n s. As such it
will satisfy a loug-felt need.

In this introduction, it is Intended to m ake a h istorical and an alyti­

cal survey o f th e lavs' on the subject, as it has developed in In d ia , and to
highlight some o f the im portant issues in eniployer-em ployee relationship
which have been dealt with ia this book.

As far as trade union law is concerned, it is now an accepted p rin ci­

ple th at trad e unions have an im p o rta n t role to fulfil in the m odern
industrial state. They ."ire the in stru m en talities through w hich em ployees
seek to g et a fair share of the fru its o f th eir lab o u r. In the initial stages,
in B ritain which was the first country to have a n industrial revolution,
com binations o f w orkm en againsi th e ir cru d e ex ploitation by the ow ners
o f indu stry were outlaw ed by th e n otorious C om biaation A cts. U nder
the com m on law in E ngland tra d e unions were viewed as civil and crim i­
nal conspiracies to harm th e em ployer and his business and subjected to
co urt actio n to th w art their developm ent. They also feel fo u l of the law
regarding re stra in t o f trade. H ow ever, in th e la te r p art o f th e I9 th and
early p art o f th e 20 th century, the law in B rita in , through sta tu to ry pro»
vision, rem oved these restrictions, thus accepting collective bargaining
and strikes and lock outs as legitim ate m odes fo r settlem ent of trade
disputes betw een the em ployers an d their lab o u r. The high w ater m ark
in th e protection o f trade u nion w orking in B ritain was the T rad e Dis­
putes A ct o f 1906. The protection given to trad e unions by the B ritish
Act o f 1906* as above, was how evcrj n o t exten d ed to India. Thus, in­
junctio n was g ranted against th e strike o rganised by B .P . W adia ia
the tex tile industry in M adras in 1918, as set out in P art I o f this book.

But for th e fact th at tra d e unions in B ritain had already got pro­
tection u n d er legislation referred to above, and there was a sym pathetic
labour G overnm ent in B ritain, and also the influence o f the In te rn a tio n a l
L abour O rganisation (ILO) and th e stan d ard s set by it, th e struggle for
basic tta d s u n io n rights could w ell have been m uch m ore pro lo n g ed and
difficult in Ind ia than w hat it was. As it is, w ith o ut too m uch delay, the
T rade U nions A ct of 1926 was passed providing for registration of trade
unions This A ct gave basic pro tectio n to registered trad e unions in
pursuit o f their legitim ate objectives as laid down under the A ct It was
patterned on th e (British) T rade D isputes Act, 1906 A close com parison
of th e provisions of the tw o Acts and the debates in the Legislative
 iM'kODUCTlON (lii)

Assembly o f In d ia regarding the T ra d e U n io n s Bill, would sliow th a t the

p ro tec tio n in ten d ed to be granted to the trad e unions in In d ia fell m uch
short o f i^rotection granted by th e B ritish A ct. T hrough process of
ju d icial in te rp re ta tio n , however, th e Howse o f L ords in E ngland in Rookes
V. Barnard (1964, 2 W eekly L.R . 269-H ouse o f Lords-1964 (1) All E.R .
367) cu t dow n the am plitude o f p ro tectio n provided by the B ritish Act.
As against this, the Suprem e C ourt in India, in the Rohtas IndtcspJes c&SQ
(1976 I.L L .J., 274) affirming the ju d g em en t o f th e H igh 'C o u rt of P atna
and o th e r ju d g m en ts referred to in p a it I, gave a liberal in te rp re ta tio n in
favour o f trad e unions to the provisions o f the T rade U nions A ct o f 1926.
This only show s th e rad ical role th a t th e courts in In d ia h av e played,
p articu larly in recent years in dealing w ith em ployer and em ployee dis­
putes. T h e Suprem e C ourt in re c e n t years has been a true friend of
labour. H aving regard to the cases digested in this volume, th ere is no
scope for th in k in g th a t the judiciary in In d ia have shown any b ias against
labour an d tra d e unions, and partiality to th e em ployers, as has been the
criticism w ith regard to attitude o f the courts in B ritain with regard to
trade u nions in th a t country. As a m atter o f fact, where possible, the
Supiem e C o u rt has endeavoured to broadpn the p ro tectio n given to tia d e
unions a n d th e ir activities.

T he law to regulate trade or in d u strial disputes in In d ia, however,

took lo n g e r tim e to develop. T he m ain reason was th at neither th e trade
unions, initially, n o r the G overnm ent o f India w ere in favour o f too
much governm ental interference in tra d e disputes. T he G overnnient with
its laissez fa ire approach was o f the view th a t industrial disputes had to
be settled between th e em ployers and the trad e u nions or lab o u r, bilate­
rally, an d the g o v ern m en t’s only jo b was to m a in tain Jaw and order. The
trade unions, having regard to the fact th a t the governm ent was being
run by th e im p& m l fo reign power, an d being apprehensive th a t, gene­
rally speaking, governm ent w ould lean o n the side of the em ployer, were
n o t in favour o f giving active role to the governm ent in trade disputes.
They w ere also again st bringing the courts in th e process, having regard
to the experience of the B ritish trad e unions w hich was that the courts in
th a t country w ere strongly biased in fav o u r o f th e em ployers an d against
the trad e unions. T h is th in k in g of B ritish trade unions influenced also
the trad e u n io n leaders in India who w ere in favour of voliintary, and
n o t com pulsory, arb itratio n and w ere zealous of protecting the right o f
the w orkm en to go on strike and resented any restrain ts on such rights.

As it turned out, however, that w hat was in th e in terest o f th e trad?

 (iv ) LABOUR LAW AND LABOUR RELATIONS

unions in B ritain, was n o t found to be in the interest o f g ro w th o f trade

unions and collective barg ain in g in India. T h e Indian trad e unions were
not so well organised or elTective th a t they could th ro u g h pressure of
industrial actio n , like sfrikes etc., get p ro p er conditions o f service, job
security or pro tectio n o f the in terests o f the w orkers. T h e longest strike--'
in the Textile Industry, early in 1920s, resulted in failure because o f the
inability of labour to carry on the strike till such tim e as the em ployer
relented, and cam e to a settlem en t w ith th em on the q u estion of bonus.
Strikes and industrial action by the w orkm en generally resu lte d in failure,
leading to large scale victim ization of the leaders o f the strik es and o th irs
who had join ed the strike. The g overnm ent also faced ditFiculty in
handling strikes, particularly in th e R ailw ays, w ithout having some
statutory pow er to lim it and contain such strikes. M o reo v er, because
the trad e u n io n m ovem ent h a d a strong link w ith national m ovem ent for
independence ajid the fear th a t trad e union leaders who h a d strong links
with th e said m ovem ent m ight even call for a general strik e , the govern­
m ent felt it necessary to pass some legislation, giving pow er to'it to in te r­
vene effectively in trad e disputes and to p u t restrictions on strikes and
lock-outs. T he result was th e T rad e D isputes Act o f 1929. This Act
provided for a m inim um period o f 14 days n o tice before a strike or lock­
o u t in public utility services could take place. T h e A ct also p u t restric­
tions o n general strikes on th e p a tte rn o f the (British) T ra d e D isputes
and T rade U nions Act o f 1927 passed by th e B ritish P a rlia m e n t after the
general strike o f British w orkers in 1926. I t also m ade provision for
reference o f tra d e disputes to conciliation b oards and c o u rts o f enquiry.
T h e A ct, how ever, was a n o n -sta rte r because of th e opposition of the
trad e unions to the Act, and the reluctance o f th e governm ent
to intervene in tra d e disputes unless it was absolutely necessary to
d o so. The predom inant thinking was fo r a laissez fa ir e approach,
and this got reflected in n on-intervention of th e governm ent in trade dis­
putes except in cases when strikes resulted in serious disruption of
n o rm a l life, o r of sm ooth g o vernm ental functioning.

T he b rief p erio d of p o p u lar governm ent in th e states (th en called p ro ­

vinces) in 1937 promised well fo r m ore active ro le of governm ent in trade
disputes, and necessary leg;slation was on th e anvil in m ost CongresS'Tun
states, Bom bay having already taken th e initiative in pushing through in
th e Bombay Legislative Assembly, th e Bom bay Industrial D isputes A ct of
1938. H ow ever, in the m eantim e, the p o p u la r m inistries in the states
(then called provinces) resigned on the issue o f G overnm ent o f In d ia ’s
declaration o f w ar on G erm any w ithout consulting the In d ian n atio n al
 iN tR O D U C ilO H (v )

leaders. T h u s, any progress to w ard s active and constructive govern­

m ental in te rv e n tio n in trad e disputes received a set back,

D u rin g th e w ar, how ever, the B ritish G o v e rn m e at could ill-afTordJto

allow d isputes betw een labour and capital to d isru p t the sm ooth fu n ctio n ­
ing o f in d u stry w hich had not only to keep up b u t also increase pro d u c­
tion and supplies in aid o f the w ar effort. T he outcorr»e was the
D efence o f In d ia R u le 81-A which enabled the governm ent to put far
reaching restrictio n s on strikes and lock-oiifs, and for sim ultaneously
referring in d u strial di putes to adjud icato rs ap p o in ted ad h o ; for each
such in d u strial d isp u te . The aw ards g iv ^ 'l ty th e adjudicators played an
im p o rtan t role in Ihe developm ent o f industrial jurisprudence in th e
country. They laid th e fo undation for the subsequent developm ent of
law on th e subject by adjudicating au th o rities set up under the In d u strial
D isputes Act^ 1947. -™

T he D efence o f In d ia R ule 81-A was only a stop-gap arrangem ent

to m eet th e special co n d itio n s prevailing during the period o f w ar. On
the cessation o f the w ar in 1945, it had to be replaced by perm anent
m achinery for reg u latin g trad e o f in d u strial disputes. This was provided
by the In d u stria l D isputes Act o f 1947, which replaced the T rad e D is­
putes A ct o f 1929 and D efence o f In d ia R u le 81-A,

T he In d u strial D isp u tes A ct, 1947, was steered in the ihen legisla­
tive assem bly by Jagjivan R am who w as the congress representative
in the in terim g overnm ent o f V iceroy’s executive council from Septem ber
1946 to 1 5 th A ugust, 1947, and thereafter the lab o u r m inister in the first
cabinet o f free In d ia. I t showed a com plete reversal o f th in k in g in
Congress circlcs with reg ard to dealing with trad e disputes. The Congress,
while in opposivion, advocated voluntary a rb itra tio n . I t was against any
com pulsion by the g o v e rn m e ff for enToTcemenTor~awards o f arbi rators.
Hov?ever, th e re was am ple experience to show th a t while an approach of
non-interference in tra d e disputes m ight be good fo r trade unions in
B ritain w hich w ere well organised, a. d had the m uscle to hold o u t against
the em ployers to ensure a fair deal to lab o u r, such an approach in India
did n o t ensu re to the b en efit of trad e u nions in In dia which w ere poorly
oVganised, and could n o t hold o u t again st th e econom ic m ight of the
em ployers, specially w hen th e re was a large pool o f unem ployed labour
who could be recru ited to fill in the places o f the w orkers who m ight go
on strik e, at th e call o f the; trad e u nion leaders, 'i h a t is why the Congress
wing o f th e tra d e unions m ovem ent led by the In d ian N atio n al T rade
U nions C ongress (IN T U C ), spearheaded th e cam paign for com pulsory
(v i) LA.BOUR LAW AND LABOUR RELATIONS

adjudication_ o ( j n d u s tm ^ d is jp u ^ if such disputes are n o t settled

bilaterally thi'ougb negotiations or to llectiv e bargaining. T he G o v ern ­
m ent of India, now in In d ian hands, was also veiy m uch concerned due
to the exceptional period o f in d u slrialjiin rest after the end o f first w orld
w ar. It is in this baclfground th a t th e In d u strial D isputes A ct o f 1947
was passed. T his Act w ith some am endm ents m ade fro m tim e to tim e
continues to govern the law relatin g to in d u strial relatio n s in India.
Alm ost sim ultaneously with this A ct, th e Ind u strial E m ploym ent Standing
O rders A ct, 1946 was passed. T his A ct deals w ith the conditions o f ser­
vice including rules o f discipline which govern the lig h ts and obligations
o f em ployers and w orkm en in establishm ents governed by the A ct.

B rief review may now be m ade o f the salient features o f the Indus­
tria l D isputes A ct, 1947.

Scope of the Industrial Disputes Act, 1947

The scope o f the Ind u strial D isputes A ct is dciilt w ith in p a rt III of

this book. The crucial definitions in this connection are industry, w ork­
m an, and industrial dispute.

Till th e judgm ent in “Bangalore W ater Supply ami Sewerage Board v.

A, Rajappa” (A IR 1978, S.C . 548) as K rish n a Iyer J., w ho w rote the
leading ju d g m en t has n o ted , the in te rp re ta tio n o f the definition
shows a zig-zag course (see p a rt IIl-p p . U L S lJo 1 2 1). This case
shows the anxiety of the Suprem e C o u rt to ensure fair conditions
of service and also security o f service to a large num ber o f
categories o f employees w hich w ould otherw ise be excluded from the
scope of p ro tectio n under th e In d u stria l D isp u tes A ct, w ithout providing
to them an alternative forum to get re lie f against unfair tre atm en t by the
employer. The lack of legislative sensitivity in the field provoked the
Suprem e C ourt to give w ider scope to the definition o f ‘in dustry’ than
was in the mind o f the legislators in 1947 when the A ct was passed. It
is only after the Judgm ent o f the Suprem e C o u rt in the Bangalore Water
Supply case that the g overnm ent to o k up the m atter seriously, firstly in
1978 by the introduction o f a Bill und er the short lived Ja n ta rule, and in
1982 by am ending the definition o f ’industry’ to exclude certain activities
like educational, scientific, research, and training institutions, and h o spi­
tals and dispensaries from the scope o f the Industrial D isputes Act. B ut
this was proposed to be d one sim ultaneously w ith th e intro d u ctio n o f
H ospitals and Educational Institu tio n s Bill of 1982 which provided an
alternative forum for resolving disputes betw een w orkm en and employers
 INTRODUCTION (v ii)

in such u n d ertak in g s. H ow ever, trad e u nions were not satisfied w ith the
alternative m achinery provided u nder th e H ospitals and E ducational
In stitutio n s Bill. T h a t is why th e said Bill has n o t yet been passed by
P arliam ent. T h erefore, the Bangalore W ater Supply case has becom e the
basis for deciding w hat is an “ in d u stry ” u n d e r th e Indu strial D isputes
Act. It is n o t nccessary in this co n n ectio n to elab o ra te, as the w orking
principle h a s b een so system atically set o u t in the sum m ing up by the
Suprem e C o u rt given a t page 160 of th e book under the heading “ w ork­
ing p rin c ip le ” .

T he next crucial definition in th e m atter o f coverage by the Act,

is the definition o f w o rk m an u nder Section 2 (s) o f the In dustrial
D isputes A ct, 1947. T h e im p o rta n t th in g to notice is th a t while under
the T rade U n io n s Act, the definition o f w orkm an is very wide so as to
include all em ployees em ployed in an in d u stry , the definition o f ‘w ork­
m an’ in th e In d u stria l D isputes A ct is very m uch narrow er in its
coverage. In th e original definition o f ‘w o rk m an’ under the Industrial
D isputes A ct, th e coverage was even n a rro w e r th an after the am endm ent
o f the d efinition by th e A m en d m en t A ct o f 1956. O nly persons
em ployed in the in d u stry to do any skilled o r unskilled, m anual or
clerical w o rk fo r hire or rew ard w ere included in the definition o f
‘w orkm an’. All o th e r categories of em ployees stood excluded from the
scope of th e definition o f ‘w orkm an’. By th e A m endm ent A ct o f 1956,
supervisory personnel draw ing w ages upto Rs. 500/ per m onth were
bro u g h t w ith in th e scope of th e d efinition o f ‘w orkm an’. F u rth e r, em p­
loyees doing technical w ork were also b ro u g h t w ithin the scope o f the
definition o f ‘w o rk m an ’, regardless of th e salary or wages, they m ight be
entitled to. Even w ith the am en d m en t m ad e in 1956, and the subsequent
am endm ents m ade in 1982, substitu tin g 1600 for 500 rupees p er m ensem
as cut off p o in t fo r supervisory personnel, the definiiion still rem ains
considerably n arro w er than th a t in the T ra d e U nions A c t o f 1926. An
attem p t w as m ade on b ehalf of th e w orker 1q th e Burmah Shell case,
n 9 7 0 (2) L .L .J ., 590) (see page 170), to w iden th e scope of the definition
o f ‘w o rk m an ’ so as to include all categories o f em ployees, o th er than
those specifically excluded from th e definition. (T he definition is repro­
duced a t p ag e 166 o f th e book). The Suprem e C ourt rejected the argu­
m ent on b eh alf o f the em ployees’ association th a t the definition is all
com prehensive an d all persons em ployed in an industry are covered by
th e definition except the excluded categories. In the subsequent case of
th e Suprem e C o u rt decided in 1983 in S K. Verma v- Mahesh Chander
(1983 (2) L .L J . 429) (digested a t page 193), there is a substantial depar­
tu re from th e above ap p ro ach , T he C o u rt observed th at the words used
( v iii) LABOUR LAW AND LABOUR RELATIONS

in the definitioa are not intended to lim it or narrow the am plitude of

the definition o f ‘worknican’; on the otlier hand they in d icate and em pha­
size the broad sweep o f the definition which is designed to cover all
m anner of persons em ployed in the industry, irrespective of w hether they
are engaged in skilled w ork or u n jk illed w ork, supervisory w ork, techni*
cal w ork or clerical w ork. Q uite obviously, the C o u rt observed, the
broad intention is to take in the entire lab o u r force an d exclude the
m anagerial force.

It is notew orty th a t in this case no reference has been m ade

to the judgm ent of .s/je//as discussed above. B oth the judgm ents
therefore, hold the field, creating q u ite a good d e a l o f difficulty o f
in terpretatio n . Sa.iner o r Liter, the Suprem e C o u rt will have to
decide which of the judgm ents correctly lays dow n the law.

A nother very im p o rtan t w ord in th e definition o f ‘w orkm an’ is

the w ord ‘em ployed’. T his definitioQ w as analysed in Shiv Nandan
Sharma v. Punjab N ational B ank L td . (1955, 1, L .L J ., 688 ), d ealt with
a t page 174, but more elaborately in th e Dharangadhara C hem ical case,
(A IR 1957, S.C., 264> (page 179). The C ourt to o k the view th a t the
essential condition o f a p erson being a ‘w orkm an’ u n d e r the A ct is th a t
there should be a relatio n sh ip o f em ployer and em ployee or naaster and
servant between him and th e ow ner o f th e establishm ent. U nless a peison
is thus em ployed, there could n o t be any question of his being a ‘w ork­
m an’ w ithin the definition o f the te rm as d e 6.aed in th e A ct. T he C ourt,
in this connection drew a d istinction betw een a co n tract for services and
contract of service,and q uoted in this connection the following w ords
from an English judgm ent:

“ In one case, th e m aster can o rd er o r require w hat is to be done,

while in the other case, he can, n o t only o rder o r require w hat is
to be done , but how it shall be d one” , {per H ilbery J , in Collins
v. Hertfordshire County Council, 1947 K..B. 598 a t 615).

A fter reviewing the other cases, the C o u rt stated th a t the prim a facie
test for holding that th ere is relationship of m aster and servant, is the
existence of a right in th e m aster to supervise and control the w ork
done by th e servant, not only in th e m a tte r of directing w hat w ork the
servant is to do but also th e m anner in w nich he shall do his w ork. In
some cases, however, this test could n o t be applied and it was accepted
th at there is no one test of universal applicability which can be applied
to determ i”.? w hether there is a m aster-servant or em ployer-em ployee
 INTRODUCTION (ix )

relation sh ip . Each case has to be decided by tak in g into co n sid eratio n all
th e rele v a n t fa c ts.
T h e ia te rp re ta tio n w ith regard to th e w ord ‘em ployed’ also cam e
up for c o n sid e ra tio n b efore the Suprem e C o u rt in Silver Jubilee Tailoring
/iTozwe case, d e a lt w ith at page 187. T his case shows th a t the trend
un d o u b ted ly is to b ro a d e n th e scope o f th e d efinition. In th e case of
Hussain B h a i Calicut v, A la th F actory Thozhilali Union, Calicut and Others
(A IR 1978 S.C . 1411), d e a lt w ith a t page 191, how ever, th e Suprem e
C ourt has gone m uch fu rth e r than all previous cases in w idening the
scope o f th e d efiaitio n . T hus, w hen the C o u rt says th a t “ w here a
w orker o r g ro u p o f w orkers la b o u r to p ro d u ce goods or services
and these goods o r services a re fo r the business o f a n o th e r /’
it w ould b rin g w ithin the scope o f th e definition all persons
w o rk in g on th e estab lish m en t even th o u g h engaged by th e con­
tracto r cov ered by th e defiaition o f ‘c o n tra c to r’, under the C ontract
L abour (R e g u la tio n and A bolition) A ct, 1970. These w ords in the
judgm ent, how ever, have to be read in the context o f the facts o f th at
case. W h a t th e C o u rt seems to have been anxious a b o u t was th a t
legalistic devises w hich conceal the realities o f th e em ployer-em ployee
relationship, should n o t be allowed to be used to defeat th e right o f the
em ployees for a fair d eal, based ori A rticles 38, 39, 42, 43 and 43-A o f th e
C onstitution. T h a t the learned judge was n o t in ten ding to d ep art from th e
supervision a n d c o n tro l an d o th er tests relevant to the em ployer
em ployee re la tio n sh ip , is anaply evident from th e judgm ent w ritten by
the sam e judge alm ost a t the sam e lim e, betw een the Employers in jRela-
tion to Punjab N atio n a l B m k v. G h u h ’n D astagir, 1978 (I) L .L J ., page
312.
A n o th er definition which is im p o rta n t fo r the p u rp o se of defining
the scope o f th e A ct is th e definition o f “ in d u strial dispute” as contained
in Section 2 (/c) o f th e A ct rep ro d u ced at page 200. T he m ost im p o rtan t
issue w hich aro se in connection with th e above d efinition was as to whe­
th er an in d iv id u al d isp u te between a w orkm an and his em ployer is
covcred by th e definition, This controversy was settled by the Suprem e
C o u rt in its judgm ent in Newspapers Ltd, case (A IR 1957 S.C. 5 3 2 =
1957 (2) L .L J ., I). A fter analysing th e schem e o f the Act, the Suprem e
C o u rt cam e to the conclusion th a t a purely individual dispute
w ould n o t be a n in d u strial dispute u n d er the A ct. I t held th a t only
collective disp u tes are in d u stria l disputes. B ut a dispute regarding an
individual w hen tak en u p by a union of th e w orkm en o r by a substantial
n um ber o f w orkm en in th e sam e establishm ent w ould be covered by the
definition, becau se it would then be a collective dispute. The
reports of cases dealt w ith by th e Suprem e C o u rt and the H igh C ourts
(x ) tABOUR LAW AND LABOUR RELATIONS

before the am endm ent A ct of 1965 show that the conrtoversy w hether a
particu lar dispute is a a in d u strial d isp u te or a p urely individual dispute
to o k a great deal o f tim e o f in d u strial trib u n als. T his controversy no
longer haunts industrial adjudication because o f th e In dustrial D isputes
A m endm ent A ct o f 1965, which inserted Section 2-A in the A ct, and
provided th at any dispute reg ard in g th e term in atio n o f service o f an
individual w orkm an w ould be deem ed to be a n in d u stria l dispute, n o t­
w ithstanding th a t no o th er w orkm an n o r any union o f w orkm en is a
party to the dispute (page 201 ).

T he o th e r controversy arose o u t o f the use o f th e w ords “ any

person ” in Section 2-K o f the A ct, instead o f the v^ord “ w ork­
m an” . I t was urged before th e Suprem e C ourt in the case o f W orkmen
o f Dimakuchi Tea Estate v. M anagem ent o fD im akuchi Tea Estate (1958 (i)
L .L J ., 500), dealt w ith a t page 217, th a t in view o f the w ords “any
person” the dispute with reg ard to a non-w orkm an also w ould be an
industrial dispute, T he Suprem e C o u rt refused to accept this argum ent.
Even the argum ent th a t a dispute w ith regard to a non -w o rk m an could
be justified on the basis o f solidarity o f labour m ovem ent o r general
welfare of lab o u r was not accepted, and it was held th a t these considera­
tions would n o t provide a nexus for converting the dispute reg ard in g such
peison in to an industrial dispute, unless th e w orkm en have a d irect and
substantial interest in such dispute. T h u s even th o u g h th e non-w orkm an
m ay be a m em ber o f the sam e tra d e u n io n , th a t w ould n o t convert an
individual dispute in to an industrial d isp u te. In a m in o rity judgm ent by
Sarkar J., the above view was dissented fro m . T he learn ed judge was o f
the view th a t to give such a restricted sco p e to th e w ords “any p erso n ”
m ight even defeat the object of th e Act. T h e only in terest the workman
can possibly have in a dispute o f an o th er person is solidarity o f labour.
T herefore, th e learned judge argued, if th e w orkm en are n o t allowed to
raise a dispute und er the A c t ab o u t the dism issal o f a person, they may
re s o rt to strik e to force the em ployer ’n o t to give effect to the dismissal
and th at could destroy in d u strial peace and thereby defeat the object o f
the Act.

T he m atter cam e up again before th e Suprem e C o u rt in the Reserve

Bank case. T h e Suprem e C o u rt elaborated the m a tte r by saying th at if
the w orkm en, say, have a n interest in a p articular grade, in th at they
m ay dem and th a t all p rom otions in th a t grade should b e m ade from
am ongst w orkm en, then th a t would be an industrial d isp u te fo r the
reason th a t although the grade concerned m ay be a gr d e applicable to
non-w orkm en, still the w orkm en would have a direct and substantial
 INTRODUCTION (xi)

in terest in th a t d isp u te. In th a t case, th e d em an d is m ade by the w ork­

m en for th e ad v an cem en t o f th e ir own in te re st, and n o t fo r the advance­
m ent of any p erson w ho falls o u tsid e th e definition o f ‘w orkm an’.

It would b e seen from th e above survey, th at lately there has been

a ten d en cy in th e Suprem e C o u rt to b ro a d e n the scope of th e In d ustrial
D isputes A ct, so as to bring in m ore und ertak in g s and m ore employees
w ithin th e scope o f th e Act.

Authorities under the ludustrial D isputes Act, 1947.

T he In d u stria l D isputes A c t o f 1947, provides a com prehensive

m achinery for reg u latin g in d u strial disputes betw een em ployers an d their
w orkm en. The fu n ctio n o f the various au th o rities set up u n der th e A ct
may b e briefly described.

(a) Works Committees

T h e first a u th o rity set up u n d er the A ct are works com m ittees

which are req u ired to be set u p in in d u strial establishm ents em ploying
100 w orkm en o r m ore. T he p ersonnel o f these works com m ittees
consists o f equal representatives o f em ployers and w orkm en. The re ­
presentatives of th e w orkm en a re to be chosen in the m anner prescribed
u n der the Act, T he duty o f the w orks com m ittee is to pro m o te
m easures fo r securing or preserving am ity and good relations betw een
the em ployers a n d w orkm en, and to th a t end, to com m ent upon m atters
of th e ir com m on in terest or concern and en deavour to com pose any
m a teria l difference of opinion in such m atters. IrLESlLffi-of the book,
their fu n ctio n h a s been described. In th e case of North B rook Jute
Company v. Their W orkmen (1961 (1) L .L J ., page 580), (page 224 o f this
bo o k ), the a tte m p t of th e em ployer to substitute w orks com m ittee for
collective b arg ain in g w ith the u nion o f th e w orkm en did n o t succeed.
The C o u rt m ade it clear th a t the w orks com m ittees are not intended to
su p p lan t or supersede th e unions for th e purpose o f collective bargaining.
T hey a re n o t auth o rised to consider real o r substantial changes in the
conditio n s o f service. T heir task is only to sm ooth away frictions
th a t m ig h t arise b etw een th e w orkm en and the m anagem ent in day to
day w o rk in g . H a d the Suprem e C o u rt ta k e n a contrary view, and
conceded au th o rity to th e w orks com m ittees to bargain w ith regard to
conditio n s o f service o f the w orkm en, collective bargaining w ould have
received a m ajor se t back. It is well know n th a t th e w orks com m ittees,
being co n stitu ted , from the side o f th e w orkm en, by persons actually
(x ii) LABOUR LAW AND LABOUR RELATIONS

em ployed in the industry, over whom th e em ployer has a g reat deal of

control, w hether by punishm ent or rew ard, ca n n o t be as in d ep en d en t
as the unions which are allow ed to have office bearers from outside the
establishm ent, and who are n o t dependent on the em ployer o f the u n d e r­
tak in g w hether in the m atter o f continued em ploym ent o r in the m a tter
o f prom otion. T he North B rook Jute Company case can therefore be
considered to be a landm ark judgm ent in favour o f trad e unions and
th e ir im p o rtan t role in regulating em ployer-em ployee relations.

It may be w orth noting here th at after the judgm ent o f the Suprem e
C ourt in North Brook Jute Company case, th e w orks com m ittees have
n o t played an im p o rtan t ro le in regulating industrial re la tio n s. The
N ational L abour C om m ission has m ad e recom m endations to m ake
the works com m ittees m ore effective (see page 226). B ut these recom ­
m endations have not yet been im plem ented.

(b) Conciliation Officers and Conciliation Boards

T he n ex t authority s e t u p fo r se ttin g industrial disputes are

conciliation officers. It is th e duty o f the conciliation officers to m ediate
in and prom ote th e settlem ent o f in d u strial disputes. T h eir duties are
defined in Section 12 of the A ct. G enerally speaking, th e conciliation
officers intervene in an in d u strial d isp u te w here parties have failed to
reach a t a settlem en t by process o f collective bargaining. W here they
succeed in bringing about a settlem ent, they are enjoined to reduce the
settlem ent to w riting in the form o f a m em orandum o f settlem ent. Such
a settlem ent is binding not only on th e p a rtie s to the d isp u te, but, so
far as em ployers are concerned, th eir successors or assigns in respect of
th e establishm ent to which th e dispute relates. In so far as the workm en
are concerned, all persons w ho are em ployed in the establishm ent or p art
o f the establishm ent, as the case may be, to w hich the dispute relates, on
th e d ate of th e d isp u te and all persons who subsequently becom e em ploy­
ed in th a t establishm ent or p a rt th ereo f are also bound by the settle­
m ent. The b o ard s o f conciliation also play a sim ilar role. The m ain
difference is th a t conciliation boards have to be set up by th e a p p ro ­
p riate G overnm ent consisting o f equal rep resen tativ es o f em ployers and
w orkm en, w ith an independent m em ber as the chairm an. F o r a concilia­
tio n b o ard to acquire ju risdiction, it is incum bent th a t a reference
should be m ade to it by th e ap p ro p riate G overnm ent.

I t has been noted a t pages 228 to 231 o f this b o o k th a t while

conciliation has worked well in m any in d u strial countries, this has n o t
te e n so in India. O ne of the reasons for the ff^ilure o f the conciliation
 iNTRODUCTION (x iii)

m achinery to play a m ajor role in the settlem en t o f in d u strial disputes,

un d o u b ted ly , is the fact th a t c o n ciliatio n is generally considered to be a
steppin g sto n e to a referen ce for a d ju d ic a tio n . T he com pulsion on the
p arties to settle is n o t m uch, considering th at even if conciliation p ro ­
ceedings fail, it w ould n o t lead to a strik e or lo ck -o u t because th e m atter
will be re fe rre d for ad ju d icatio n . A n o th er reason fo r conciliation n o t
playing such an im p o rta n t role in in d u stria l d isputes in In d ia is the
absence o f p ro p e r qualified and experienced conciliation officers, who
have th e necessary experience and ta c t to w in th e confidence o f b o th
the p arties, narro w dow n th e area o f conflict, an d bring about a settle­
m ent. Very often, th e conciliation officers eith er lack the necessary
expertise o r d etach m en t so th a t they can play a constructive role in
bringing a b o u t settlem en ts. It m ay fairly be stated th a t by and large the
co n ciliatio n m ach in ary set u p u n d er the A ct has failed to live up to the
expectations. As a m a tte r o f fact, m any settlem ents which a re shown
to have b een arrived at in conciliation proceedings have, in actu al fact,
been arriv ed a t b ilaterally betw een th e em ployer and the trad e unions
through a process o f collective bargaining. A fter such settlem ent is
arrived at betw een th e p arties, the settlem ent is nom inally show n as a
settlem en t arriv ed at in conciliation proceedings, because the parties a re
anxious th a t th e settlem en t has th e w ider binding force which a settle­
m ent arrived a t in co n ciliatio n pro ceed in g s has u n d er Section 18 of the
Act.

(c) Court o f Enquiry

Y et a n o th e r a u th o rity provided fo r u n d e r th e In d u stria l D isputes

A ct is th e c o u rt o f enqu iry which th e a p p ro p ria te G overnm ent m ay cons­
titu te fo r in q u irin g in to any m atter ap p earin g to be connected with or
relevant to an in d u stria l dispute. In som e system s, particularly in B ritain,
courts o f enq u iry have played an im p o rta n t ro le in bringing a b o u t settle­
m ents by in q u irin g in to m atters connected with in d u strial disputes and
enlighten in g p ublic o p in io n and giving an im p artial finding on th e points
o f difference betw een th e parties. T hey have, th erefore, paved the way
for settlem en t betw een the parties on th e issues w hich they have investi­
gated. In In d ia, how ever, these enquiry com m ittees have seldom been
set up an d have n o t p lay ed any significant ro le in settling industrial dis­
putes.
(x iv ) LABOUR LAW AND LABOU.l RELATIONS

(d) Arbitration

A p art from th e aforesaid a u th o rities, th e parties them selves can

refer an in d u strial dispute for a rb itra tio n under Section 10-A o f tlie
Industrial D isputes Act, If th e p a rtie s d o agree to refer the d isp u te for
arb itratio n , aw ard of the parties is bin d in g on th e parties to the indus­
trial dispute. B ut in the event the persons m aking the re feren ce re p re ­
sent the m ajority o f each party, the aw ard o f the a rb itra to r w ould be
binding n o t only on the parties to th e dispute b u t w ould have wider
coverage as provided for settlem ents in conciliation proceedings and
awards by ad judicators under S ection 18 (3) o f the Act.

A t various labour conferences and otherw ise, ex h o rtatio n s have

been m ade to the p arties to resolve d isp u tes th ro u gh a pro cess o f a rb i­
tration. It cannot be said, how ever, th a t till date the a ib itra tio n has
played any im p o rta n t role in settlin g industrial disputes.

(e) Adjudicating Machines-y

W e come now to the linchpin o f the system o f regulation o f in dus­

trial disputes, nam ely th e adjudication system . P rio r to the am endm ent o f
th e Indu strial D isputes Act, 1947, by the In d u strial D isputes A m endm ent
and M iscellaneous Provisions A ct o f 1956, the sole adju d icato ry function
was vested in the industrial trib u n als set u p under the In dustrial D isputes
A ct. By an A ct o f 1950, la b o u r ap p ellate tribunals w ere set up to hear
appeals from th e aw ards o f in d u strial trib u n als. D uring th e period o f 7
years w hen the appellate tribunals were in existence, they played a very
im p o rta n t role in bringing a b o u t uuiform ity in the law o f industrial
adjudication, an d la id down prin cip les w hich have been th e foundation
of the law of in d u strial disputes as know n today. O n m o st im p o rtan t
issues like security o f service, bonus, wages and other conditions o f ser­
vice, the judgm ents o f the la b o u r ap p ellate trib u n al were accepted by the
Suprem e C o u rt as laying down the correct principles fo r ad ju d ic atio n o f
industrial disputes. However, th e trade unions in th eir anxiety, for
speedy settlem ent o f industrial disputes, p u t pressure on the G overnm ent
for the abolition of the labour app ellate trib u n als which was done by the
Industrial D isputes A m endm ent and M iscellaneous Provisions A ct o f
1956.

A t the sam e tim e, as appeals to the lab o u r appellate tribunals were

abolished, substantial changes w ere made in th e Industrial D isputes A ct,
 iN'fRODTJCrioM (x v )

in so far as a d ju d ic a tin g a u th o ritie s w ere concerned. In place o f the

in d u strial trib u n a ls, th e follow ing 3 au th o rities w ere provided fo r to a d ­
ju d icate in d u stria l disputes;

1. L a b o u r C o u rts,

2. In d u s tria l T rib u n a ls, and

3. N a tio n a l In d u strial T ribunals.

T h e la b o u r c o u rts generally deal w ith in dividual disputes or dispu­

tes w hich d o n o t have a large financial im p a c t o n th e industry or disputes
w hich do n o t affect m o re th a n one h u n d re d w orkm en, w hile industrial
tribunals d eal w ith m a tte rs o f fu n d a m e n ta l im p o rtance to an undertaking
like wages, allow aoccs, hours o f w ork, classification o f grades, etc. T he
natio n al in d u stria l trib u n a ls ad ju d icate in d u strial disputes which involve
questions o f n a tio n a l im p o rta n c e or are o f such a n a tu ie th a t industrial
establishm ents situ a te d in m o re than one State are likely to be interested
or affected by such disputes.

T h e aw ard s o f th e above au th o rities are final, T here is no regular

appeal a g a in st th e abo v e aw ards. T h e only way they can be challenged is
by m oving th e H ig h C o u rt u n d er A rticles 226 an d 227 or invoking the
extraord in ary ju risd ic tio n o f th e Suprem e C o u rt u n der A rticle 136 o f the
C o nstitu tio n o f In d ia .

Reference under SectionjlO

F o r any ad ju d icatio n w ith regard to m erits o f ah in d u strial dispute,

it is a c o n d itio n p recedent th a t the referen ce o f such an industrial dispute
should be m a d e by th e ap p ro p riate G o vernm ent. T he appropriate
G o v ern m en t w hen referrin g an in d u strial dispute is exercising adm inistra­
tive pow er a n d n o t ju d ic ia l or quasi-judicial pow er. This principle was
established b y th e S u p rem e C ourt in S ta te o f M adras v. C.F. Sarathy
dea lt w ith in th is b o o k a t page 262,

Q uestion has o ften arisen in th e co u rts as to the extent o f discretion

vested in th e g o v ern m en t to refer or n o t to refer an in d u strial dispute for
adjudicatio n . W here a dispute is referred, th ere is a little scope for
controversy. T h e em ployer can n o t challenge the reference unless he
proves th a t w h a t is referred to is n o t a n ' in d u strial dispute a t all. T he
expediency o f m aking a reference is en tirely for the ap p ro p riate G overn­
(x v i) LABOUR LAW AND LABOUR RELATIONS

m ent to decide. The sufQciency o f m aterial on th e b asis o f which the

govenim ent conies to a conclusion as to w hether o r n o t to refer an
industrial dispute is again n o t a m a tte r which can be challenged by
the em ployer in a court o f law (see S a ra ih y case above). H ow ever, in
cases w here an industrial dispute has gone through conciliation, w hether
the governm ent can refuse to m ake a reference for ad ju d ica tio n o r n ot,
has often been a m atter o f controversy. In State o f B om bay v. K.P.
Krishnan, dealt with at page 267, the principle was established th a t the
governm ent can refuse to m ak e a reference only on germ ane grounds
and not on irrelevant considerations.

In Bom bay Union o f Journalists v. The State o f Bom bay (1964 (6 )

S.C .R . 22), th e Suprem e C ourt conceded to th e governm ent’s
pow er to refuse a reference if on a p rim a fa c ie co n sid eratio n , the
governm ent considers th a t the dispute should not be refe rred for ad ju d i­
cation. H ow ever, in recent jud g m en ts o f the Suprem e C ourt, the dis­
cretion of the ap propriate G overn m en t h as been considerably circum ­
scribed. It has been em phasised th a t the governm ent in deciding n o t to
m ake a reference cannot arro g ate to itself the powers w hich are vested in
the adjudication authorities who alone are c o m p eten t to decide the
m erits o f th e dispute. It is only in cases w here the d isp u te is frivolous
or vexatious th a t the governm ent can refuse to m ake a reference.

T hus, it can fairly be stated th a t once a m atter has been taken up

in conciliation, and conciliation proceedings fail, the general rule is that
the rights o f th e parties will ultim ately be adjudicated by th e adjudicating
au th o rities set u p und er th e A ct, as o utlined above.

I t has also been held th a t once a reference has been m ade, it c an ­

n o t be w ithdraw n. In this connection, th e case o f S ta te o f Bihar v. D .N .
GanguU (A IR 1958 S.C. 1 0 1 8 \ m ay be re fe rred .

A nother im p o rtan t principle established by the S uprem e C ourt in

the case o f W estern India M atch Company L td . v. W estern India M atch
Company W orkers’ Union (1970 2 L .L .J. 2 5 6 = A IR 1970 S.C., 1205),
d ealt w ith a t page 280. is th a t, even a fte r refusing to m ake a reference',
th e governm ent can reconsider the m atter an d refer the m a tte r for ad ju ­
dication. Such subsequent reference m ight cause inconvenience to the
em ployer, because the em ployer in the m eantim e might have acted on the
belief th a t th ere would be no proceedings by way o f ad ju d ic atio n o f the
dispute betw een him and his w orkm en. Such a consideration w ould be
 INTRObudTIOl^ ( x v ii)

a relevant co n sid e ra tio n for th e governm erit to decide w hether th e p rev i­

ous decision sh o u ld be re o p e n e d B u t, th a t does D o t m ean th a t the govern­
m ent, by refu sin g to re fe r a d ispute, has den u d ed itse lf o f th e p ow er to
m ake a referen ce. T h is p rin cip le was again em phasised by th e Supreroe
C o u rt in A w n Services Production Agencies (P ) L td . v. Industrial Tribunal,
Haryana 1979 1 L .L J . 1, dealt w ith at p ag e 285 o f this bo o k . T h e Sup­
rem e C o u rt fu rth e r w ent on to hold th a t it is not absolutely necessary th a t
there oug h t to be som e fresh m aterial b efo re th e governm ent for reco n si­
d eratio n o f its earlier decision. T he governm ent m ay reconsider its deci­
sion on a c c o u n t o f som e new facts b ro u g h t to its no tice or for any o th er
relevant co n sid e ra tio n . Such o th e r relev an t co n sideration m ay include
the th re a t to in d u strial d ispute w ith o u t any a ttem p t at resolving it.
A reference w ould at le a st bring the p a rtie s to th e ta lk in g table.

It w ould be seen, therefore, th a t th e S uprem e C o u rt has leaned

m ore an d m o re in favour of th e m a tte r being decided by industrial adjudi­
cation as th a t alo n e w ould ensure in d u strial peace. R estrictions have been
p u t on th e g o v ern m en t’s pow er to refuse to refer a dispute, in which case,
the governm ent has to give p roper reasons for refu sal. But, in so far as
th e pow er to m ak e a referen ce is co ncerned, it is left intact.

Functions and P rinciples of Industrial A djadlcatioo

U n d o u b ted ly , one o f th e m ost im p o rta n t decisions w ith regard to

industrial ad ju d icatio n is the ju d g m e n t o f th e F ed eral C o u rt in Western
India Autom obile Association v. Tfie Industrial T ribunal B om bay & O thers
1949 I L L J . 245. The case cam e up b efo re the F ederal C ourt o n the
issue w h eth er th e in d u stria l trib u n a ls set u p u n d er th e A ct can d irec t the
em ployer to re in sta te a w o rk m an . U nder the o rd in ary civil law , the rule,
as enshrined in Section 14 of th e Specific R e lie f A ct which has replaced
Section 21 o f th e A ct as it existed before th e A m en dtnentiA ct c f 1963, and
also various p ro n u n cem en ts of th e co u rts, th e general principle o f civil
law, is th a t a c o n tra c t o f p ersonal service c a n n o t be specifically enforced.
T he civil c o u rt c a n n o t rein state an em ployee. I t can aw ard only dam ages
if the disch arg e is w rong.

T he F e d e ra l C o u rt, while dealing w ith this argum ent, w ent into

th e fundam en tal issue as to w hether in ad ju d icatin g an industrial dispute,
the tribunal is enforcing th e executing rig h ts of th e p arties, or it is exer­
cising a m uch w ider ju risd ic tio n —th a t is o f resolving the d isp u te betw een
th e em ployer an d his w orkm en on prin cip les o f equity and justice.
( x v iii) L A B ouk La w a Hd l a b o u r r e l a t io n s

F ederal C o u rt decided firmly for th e w ider ju risd ic tio n . Tiie object o f

the industrial adjudication being to su b stitute industrial actio n like strikes
and lock-outs, by doing justice to the w o rk ers’ claim , th e C o u rt h eld , th e
object would n o t be achieved if only th e c o n tra c tu a l relatio n s betw een th e
parties are enforced. Ind u strial ad ju d icatio n w ould have, therefo re, to
adopt a com pletely different app ro ach . In d u stria l a d ju d ic a tio n can create
new rights and aw ard reliefs which no civil co urt co u ld , o r w ould d o .
It can m odify contracts a n d substitu te for it a new c o n tra c t. In d u stria l
adjudication could do w hat a civil c o u rt ca n n o t d o , co m p el th e em ployer
to continue in em ploym ent a person w hom he does n o t w an t to re ta in in
service, an d direct his rein statem en t. I t could n o t be effective in safe­
guarding w orkm en’s rig h t to organise unless it could p ro v id e security o f
service to trad e union officers. T h a t can only be done if the trib u n al
can reinstate a w orkm an who m ay have been dism issed o r otherw ise
term inated from service because o f his trad e union activities. Sim ilarly,
if a dispute regarding conditions o f service could not be settled bilaterally,
the tribunal could examine th e conditions o f service o f th e w orkm en and
revise them in th eir favour. In doing so, it substitutes itse lf fo r collective
bargaining.

The above approach raised a m uch la rg e r issue as to w hat a trib u ­

nal exactly does. T he ap p ro ach ’o f th e trib u n als is th is ; th a t th e A ct
having given th e tribunal th e very im p o rta n t function o f m aintaining
industrial peace, it conferred ju risd ictio n on it to decide disputes relating
to wages an d o th er conditions o f service an d security o f service o f the
em ployees. B ut the A ct did n o t spell o u t th e principles on w hich these
issues were to be decided. T herefore, the trib u nals evolved th eir own
principles for settling such disputes. T hus vn respect of w ages, m inim um
wages have in any event to be paid'irrespective of the em ployer’s capacity
to pay. B u t anything over and above m inim um wage w ould require
balancing of several factors, including th e industry’s capacity to pay.
Sim ilarly, in th e m atter of bonus, th e Full Bench o f the la b o u r appellate
trib u n al laid dow n th at bonus is lab o u r’s share o f the pro fit w hich is
earned due to th e jo in t co ntribution of cap ital and lab o u r. T hus, work­
men have th e rig h t to get bonus if there is available surplus o f profits.

Is the Act Ultra Vires the Constitution o f India ?

G radually, these principles becam e a p a rt o f the law of the lan d .

T his, it was contended in Niem la T extile M ills Ltd. v. S ta te o f Punjab
(A IR 1957 SC 329.) am ounts to u su rp atio n o f legislative fu n c tio n by
 I n t r o d u c t io n (x ix )

tribunals. T h u s, it w as u n co n stitu tio n al and ultra vires.

The ab ove a tta c k o n th e co n stitu tio n al v alidity o f th e A ct was

repelled by th e Suprem e C o u rt. It held th a t m erely because the tribunals
lay dow n p rin cip les o n w hich eraployer-em ployee disputes are to be deci­
ded, does n o t m e a n th a t trib u n a ls are exercising legislative pow er. In
adjudicating in d u stria l disputes, inevitably, th e tribunals have to in terfere
w ith co n tractu al relatio n s betw een the p arties. T hey have to evolve p rin ­
ciples for d o in g ju stice to th e w orkers’ claim s co n sisten t with the
growth of in d u stry . T hese principles have been laid dow n in th e in terest
o f industrial p eace. T his d oes n o t m ean t th a t the trib u n a ls are perform ing
legislative fu n ctio n . T he a ttack on th e c o n stitu tio n al validity o f the
A ct was, therefore, r e p e lle d .

Special Leave Jurisdiction o f the Supreme Court

A n o th er la n d m a rk d ecisio n of th e Suprem e C o u rt in the jSeld of

industrial a d ju d ic a tio n is its ju d g m en t in Bharat B ank L td . v. Their
Em ployees (1950 L .L .J. 921), d e a lt with at page 290 o f this book.

T he q u estio n arose b efore th e S uprem e C o u rt w hether u n d er A rticle

136, the S uprem e C o u rt h as ju risd ictio n to e n te rtain an appeal by special
leave against th e aw ard o f th e in d u stial trib u n al. T he m inority view was
expressed by M u k h e rje a , J ., w ho was o f th e view th a t the trib u n a l’s
function is an extended fo rm o f process o f collective bargaining and is
m ore akin to ad m in istra tiv e ra th e r th a n ju d icial functions. T herefore,
no special leave to apeal c a a be g ranted again st an aw ard o f the tribunal.
B ut by m ajo rity , the C o u rt held th at th e fu n ctio ns and duties of in d u s­
trial tribunal a re very m uch lik e those o f a body discharging judicial
functions, a lth o u g h they a re n o t courts. T h e rules fram ed by the tr ib u ­
nal require evidence to be tak en and w itnesses to be exam ined, cross
exam ined an d re-ex am in ed . W hile recognising th a t th e powers o f th e
industrial trib u n a l are different from those o f an ordinary civil court, th e
C o u rt held th a t it is essentially w orking as a ju d iciallb o d y .

The above observations m ade by K an ia, C .J., are fu rth e r elaborated

by M ahajan, J ., w ho e m p h a s iz ^ th a t th e w hole p ro ced u re adopted by
th e A ct and th e ru le s are m odelled on th e Code o f Civil Procedure. T here­
fore, th e H o n ’ble Judge held th at the in d u strial trib u n al has alj th e
necessary a ttrib u te s o f a c o u rt o f Justice. I t has no o th e r function ex­
cept th at o f ad ju d ic a tin g o n a dispute. I t is n o d o u b t tru e th a t in d u s tria l,
( kk) laso Vr La w an d labour r b l a I ’jo n S

tribunals have much w ider ju risd ictio n th a n a civil c o u rt. B ut pow ers o f
such a n a tu re do not affect th e q u estio n th a t they are exercising judicial
powers. They might rightly be d escribed as quasi-judicial bodies,
because they are out of hierarchy o f th e ordin ary ju d icia l system . B ut
th a t does not detract from the principle th a t th e trib u n a ls have to dis­
charge functions w hich are basically ju d icial in th e ir n atu re . As such
the Suprem e C ourt held th a t it h ad ju risd ictio n to g ra n t special leave to
appeal against th e aw ards o f in d u strial trib u n als.

It is because o f the ju d g m en t in the Bharat B ank case th a t the

Suprem e C ourt has played such an im p o rtan t ro le in the field of
industrial adjudication. H ad th e decision o f th e Suprem e C o u rt in the
Bharat B ank case been different, th e course o f industrial adjudication
could.have been entirely different.

Strikes and Lock-outs

Strikes and lockouts a re d ealt w ith in p a rt V, p p . 361 to 418.

O ne o f the main objects of the In d u strial D isputes A ct is to provide

a m achinery fo r settlem ent o f in d u strial disputes w ithout the parties
having to reso rt to in d u strial actio n like strikes and lock-outs. „With th a t
end in view, Sections 22, 23 and 24 o f the In d u strial D isputes Act, have
placed far-reaching restrictio n s o n strik es an d lock-outs.

Before dealing w ith th e aforesaid sections, it is necessary to notice

the definitions of strikes a n d lock-outs. T he definition o f strike is given in
Section 2 (q) o f the A ct, an d is as fo llo w s:

“ Strike” m eans a cessation o f w ork by a body o f persons em ­

ployed in any industry acting in com bination, or a concerted
refusal, or a refusal u nder a com m on understanding, o f any
num ber of persons who are or have been so em ployed to conti­
nue to work or to accept em ploym ent.

T he above definition is fairly clear and does n o t po se any problem s

o f interpretation. H ow ever, it is necessary to note the ju d g m en t o f the
Suprem e C ourt in Punjab N ational B ank L td . v. A ll India Punjab N atio­
nal Bank Employees Federation, 1959 II L.L. J. 666 , d e a lt w ith in this b o o k
a t page 364. The question was w hether a pen-dow n strike is covered
by the definition o f Section 2(q). This question was answ ered by th e
Suprem e C ourt in the aflirm ative and rightly so. O n a literal and gram ­
m atical construction o f the definition, it would be difficult to exclude a
pen-dow n strike from th e am b it o f th e definition.
 INTRODUCTION (x x i)

T h e d efin itio n o f lo c k -o tit is, h ow ever, n o t so sa tisfa cto ry . T h e defi­

n itio n given in S ection 2(1) is as follows:

“ L o c k -o u t” m ean s th e (te m p o ra ry closing o f a place o f em-

plo y m etit) o r th e suspension o f w o rk , o r th e refusal by an
em ployer to c o n tin u e to em ploy any n u m b e r o f persons
em ployed by h im .

I f a literal c o n stru c tio n is given to the above definition, every tem porary
closing o f a p lace o f e m p lo y m en t o r su spension o f w ork w ould be lock­
out. T hus, even th e in a b ility o f th e em ployer to p rovide w ork to the
em ployees due to accu m u latio n o f stocks o r failure o f pow er or
shortage o f raw m a te ria l, w ould be lo ck -o u t. T aking the la tte r p a rt o f
th e definition, nam ely refu sal by an em ployer to co n tin u e to em ploy any
nu m b er o f p e rso n s em ployed by him , it would m ean th a t even if a
num ber o f p e rso n s are su sp en d ed , p e n d in g disciplinary inquiry or ser­
vices o f a n u m b e r o f w o rk m en te rm in a te d , th a t w ould am o u n t to lo ck ­
o u t. Such a literal effect to the definition w as, th e re fo re , n o t given by
th e Suprem e C o u rt. A lo c k -o u t acco rd in g to the S uprem e C ourt, is a n ti­
thesis o f a strik e . Ju st as a strik e is a w eap o n av ailable to the em ployees
fo r enforcing th e ir dem ands, a lo ck o u t is a w eapon available to the em-
loyer to p ersu ad e by a p eacefu l p ro cess th e em ployees to see his p o in t of
view and to acc e p t his dem ands. [See M anagem ent o f K airbetta Tea
E state Kotagiri P .O . v. R ajam anickam (A IR 1960 S.C . 893).]

T aking now th e su b stan tiv e restrictio n s placed on strikes and

lock-outs, it is to be n o ticed th a t Section 23 o f the A ct provides for gene­
ral proh ib itio n o f strik es an d lock-outs in in d u stry irrespective o f w hether
the industry is a public utility service or otherw ise. O ne im p o rtan t p o int
to notice w ith reg ard to th e provisions o f Section 23 is the far-reaching
restrictions on strikes a n d lock-outs placed u n d er Section 23(b) o f the
A ct. U n d er th is sub-section o ff Section 23, any strike or lock-out du rin g
th e pendency o f proceedings before a la b o u r co u rt, trib u n a l, o r national
trib u n al, an d tw o m onths after the com p letio n o f such proceedings, is
illegal.

T he legislative ju stificatio n fo r this is th a t the proceedings before

the labour c o u rt, trib u n al o r n a tio n a l trib u n a l should be com pleted in a
peaceful atm o sp h ere w ith o u t reso rt to strik es or lock-outs during the pen­
dency o f such proceedings. This restrictio n could be held justified, if, as
was expected, th®>proceedings b efo re a lab o u r co urt, tribunal o r n a tio ­
nal trib u n al a re com pleted w ithin a reasonably sh o rt period. B ut, as has
( x x ii) LABOUR LAW AND LABOUR RELATIONS

been the experience, m any industrial disputes linger on before ad ju d ica­

ting authorities for a num ber of a years, som etim es for m ore th an a
decade before they are decid ed . In view o f this experience, the restric­
tions placed ‘on strikes and lockouts do not ap p e a r to pass the te st o f rea­
sonableness. T ake a dispute with regard to bonus, fo r say, 1975-76. If the
dispute, a fte r collective b argaining an d co n ciliation, during which there
is no settlem ent, is re fe rred fo r ad ju d icatio n in 1977 and is still pending
adjudication before th e trib u n a l, say in 1980, an d the w orkm en raise a
dispute regarding wage Structure in 1980, an d th ere is no settlem en t nor
the dispute referred for ad ju d icatio n , why should the w orkm en be n o t
allowed to go on strike ? T he restrictio n s seem to be wholly unjustified.
This anom aly in the A ct is n o ted by K rish n a Iyer, J., in Gujarat Steel
Tubes case and com m ented u p o n a t page 378 o f this book. As has
been well p u t by the learned judge, it looks stran g e as to how the restric­
tions on strikes on m atters to tally unconnected w ith the dispute pending
could be held to be a justified restrictio n . T h e said restriction can
appropriately be challenged as unreasonable by the em ployers and
w orkm en.

W ith regard to the public utility services, the restrictio n s are con­
tained in Section 22 o f the A ct, and prim a fa c ie , a p p e a r to b e justified.
The m ain restriction which ap p ears from a b are re a d in g of Section 22
o f th e Act, is th a t before resorting to strikes o r lockouts, em ployers and
w orkm en should give 14 days n o tice o f such strik e or lock-out. Such
restriction is certainly justified because any strik e in a public utility
service is bound to lead to dislocation o f com m unity life. It is only fit
and p ro p er that th e w orkm en should n o t go on a hasty strike in a public
utility service as it causes serious dislocation o f norm al life o f the
com m unity.

H owever, the restrictio n s are m uch w ider th a n would be apparent

on a cursory reading o f Section 22. Sections 2 2 (l)(d ) and 21(2)(d)
provide th a t any strike during th e pendency o f conciliation proceedings
before a conciliation officer and 7 days after the conclusion o f such
proceedings is illegal. R eference to Section 20 o f the A ct w ould show
th at a conciliation proceeding shall be deem ed to have com m enced on
the date on which a notice o f strike o r lock-out u n d er Section 22 is
received by th e conciliation officer. These conciliation proceedings
conclude only w hen—

I- a settlfiment is arrived a t betw een th e parties;

 INTRODUCTION ( x x i ii )

2. w here n o se ttle m e n t is arriv ed a t, w hen the re p o rt o f the

c o n ciliatio n officer is received by the a p p ro p ria te G overnm ent;

3. w hen a referen ce is m ade to a la b o u r c o u rt, trib u n al o r

n a tio n a l trib u n a l u n d er Section 10 o f the Act.

A lth o u g h u n d er sub-section ( 6 ) o f Section 12 o f the A ct, the re p o rt

o f the co n ciliatio n officer should be given w ithin 14 days, such co n c ilia ­
tion pro ceed in g s in fact keep p ending fo r m uch longer period. It is th e
ju d icial v erd ict o f th e S u p rem e C o u rt th a t th e co n ciliatio n proceedings
do n o t com e to an end o n the expiry o f 14 days from th e ir date o f c o m '
m encem en t. They co n tin u e to be p en d in g till a failure re p o rt is given by
th e co n ciliatio n officer and received by th e a p p ro p ria te G o v ern m en t.
In a c tu a l ex p erien ce, several m onths m ay elapse betw een the tim e the
co n ciliatio n p roceedings sta rt and th e conciliation proceedings com e to
an end. D u rin g such p erio d , re so rt ca n n o t be h a d to strikes an d lock'O uts.
F u rth e r, the restrictio n s o n strikes an d lo ck -o u ts continue till 7 days after
th e conclusion o f co n c ilia tio n p ro ceed in g s. D u rin g this perio d of 7 days
if a reference is m ade to a lab o u r co u rt, trib u n a l or n atio n al tribunal, then
again th e re can be no strike because o f th e provisions o f Section 23 of
th e A ct, as alread y noticed ab o v e.

T h e above d iscussion w ould show th a t in fact th e re can be no legal

strike in a p u b lic utility in d u stry , unless th e governm ent perm its such a
strik e or lock-out. I t is d o u b tfu l if such d rastic restrictions on strikes
and lock-outs in p ublic utility services are justified.

O ne im p o rta n t issue th a t arises is regarding sanctions against strikes

an d lo ck -o u ts in co n trav en tio n o f law. T h e ^nsw er is easv w ith regard
to lock-outs. U n d e r S ection 26 o f the A ct, an y em ployer who commeces,
continues o r otherw ise acts in fu rth e ra n c e o f a lock-out, w hich is illegal
u n der th e A ct, shall be p u nishable w ith im p riso n m ent which may extend
to one m o n th or w ith fine w hich m ay extend to one thousand rupees,
or w ith b o th . U u n d er S ection 34 o f th e A ct, w here a person co m ­
m ittin g an offence und er th e A c t is a com pany o r o th e r body co rp o rate
o r an asso ciatio n o f persons (w hether in co rp o rated o r not), every
d ire c to r, m an ag er, secretary, agent, or o th e r ofQcer o r person concerned
w ith the m an ag em en t th ereo f, shall, unless h e proves th at the offence
was com m itted w ith o u t his know ldege o r consent, be deem ed to be guiJty
o f such offence. F ro m a perusal o f th e sta tu to ry provisions, it seems to
be clear th a t th e re a re effective sanctions again st an em ployer who m ay
re so rt to a lo ck -o u t which is illegal. M o st em ployers w ould be unwilling
 ( x x iv ) LABOUR LA.W AND LABOUR RELATIONS

to take th e risk of im prisonm ent by launching a n illegal lo ck -o u t. It is

tru e th a t u n d er Section 34 of the A ct, crim inal p ro ceedings a g ain st the
em ployer can only be launched by o r u n d e r th e au th o rity o f the ap pro­
p riate governm ent. T h ere should be n o difficulty in getting such p r o ­
ceedings launched by th e governm ent o r au th o rised by the governm ent.
It the governm ent w ithholds the sanction unreasonably, it can be com ­
pelled to give such san ctio n . A lthough the restrictions o n strikes are
the sam e as the restrictions o n lo ck-outs, it is o pen to serious d o u b t as to
w hether the penalties provided fo r u n d er the A ct are effective in curbing
illegal strikes. It is tru e th a t th e w orkm en who re so rt to an illegal strike,
are punishable under Section 26 w ith im prisonm ent a n d fine, in a sim ilar
m anner as em ployers. But, is it practicable to im plem ent the law
against illegal strikers? If, say, th ere is a strike in a textile u n it em ploy­
ing 10,000 workers, is th e launching o f crim inal proceedings ag ainst such
10,000 w orkm en practically possible? In the event the w orkm en are
found guilty, is it possible to im prison them all? W ould it n o t pose a
serious problem to th e governm ent if such largescale arrests are made?
T he answ er would certainly be in th e negative. It is n o t practically
possible to p u t such a large num ber of w orkm en beh in d th e bars fo r
resorting to an illegal strike. F u rth er, by p u ttin g such a large num ber o f
workm en in jail, the problem o f d islocation o f p ro d u ctio n is n o t solved,
it is aggravated.

O ne possible answ er to the above problem w ould be th at the

governm ent may not tak e action against all the striking w orkm en. It
may take action against only those persons who in stigate such illegal
strike. O f course, the penalty for instigation o f an illegal strike is far
m ore strict than the penalty fo r ju st p articip atio n in an illegal strike.
U nder Section 27 of th e A ct, persons w ho in stigate o r incite the illegal
strike, are punishable w ith im p riso n m en t for a term w hich m ay extend to
6 m onths or with fine which may extend to one th o usand ru pees or with
both. Suppose, it is decided to launch prosecution against the instiga­
to rs o f the strike and punish th em by im prisonm ent, as provided under
Section 27 o f th e Act, does this im prisonm ent provide any solution? In
th e context o f th e c u rre n t com m unity attitude, p articu larly on p a rt of
the w orkm en, if a trad e union leader is punished by im prisonm ent for
instigating an illegal strike, he im m ediately becom es a m a rty r to the
cause o f the workm en. The im prisonm ent o f the trad e union leader
itself becom es a cause fo r the prolongation of the strike till such tim e as
th e trad e union leader is released. Experience o f th e recent textile strike
in Bombay which continued for as m ay as i 3 m o n th s, shows th a t
crim inal proceedings against th e leaders of an illegal strike, do n o t
 INTRODUCTION (x x v )

provide an y effective san ctio n again st reso rt to illegal strikes.

T h e re are, h ow ever, o th e r san ctio n s against w orkm en w ho reso rt

to illegal strik e. R eferen ce to p art V dealing w ith strikes and lock-outs,
would show th a t one issue which o ften arises for decision in th e case o f
strikes is th e claim o f th e w orkm en for p a y m en t o f wages d u rin g the
strike p erio d . In th is connection, it is to be n o ted th a t few tra d e unions
in India h av e b u ilt u p sufficient fu n d s to su stain th e w o rk ers du rin g th e
period o f strik e , by p ay m en t o f som e am o u n t to them d u ring th e period
o f the strik e so as to m ak e it possible fo r them to escape the rig o u rs o f
starvatio n d u rin g the strike period. Strikes are sustained m ainly by
prom ise by th e trad e u n io n leaders th a t w ages for th e strike period w ould
be paid to th e m after th e strik e is over. T he question w hether wages for
the perio d o f strik e should be paid, has o ften com e up fo r adjudication
before in d u stria l trib u n a ls and u ltim ately th e Suprem e C ourt. T he
ra tio of ju d g m en ts o f th e Suprem e C o u rt o n the issue is this. I f th e
strike is illegal, it is e x -fa d e unjustified. T h u s, th ere is no justification
w hatsoever fo r p ay m en t o f wages d uring th e p eriod o f the strike. In
the even t th a t th e strik e is legal, th e strik e m ay still n o t be justified as
em phasized by th e S uprem e C ourt in M anagem ent o f Chandra M a la i
E state, E rnakulam v. Its W orkm en (A IR 1960 S.C . 902), d e a lt w ith a t
page 387 o f this bo o k . T he Suprem e C o u rt w hile recognizing th a t
strike is a legitim ate a n d som etim es u n av o id ab le w eapon in the h an d s o f
the la b o u r, em phasized th a t it is equally im p o rtan t to rem em ber th a t
indiscrim in ate an d hasty use o f this w eapon should n o t be encouraged.
It has been decided in a n u m b er o f ju d g m en ts o f th e Suprem e C o u rt th a t
where th e re is a hasty re s o rt to strik e on th e p a rt o f the w orkm en, th e
w orkm en w ould n o t be en titled to w ages fo r th e period of the strik e . I t
has fu rth e r been d ecid ed by th e courts th a t if d u rin g th e period o f the
strike, w orkm en re s o rt to violence, they would on th a t acco u n t only
disentitle them selves fo r paym ent o f wages durin g th e strik e period.

A n o th e r effective sanction against illegal strikes is th e liability o f

those w ho instigate such strikes to disciplinary action which may include
dism issal. I t was em phasised by th e Suprem e C o u rt in India General
N avigation & Railw ay Co. Ltd. v. Their W orkm en (1970 I L .L .J. 13) a n d
again in Gujarat S te e l Tubes L td . v- Gujarat S teel Tubes M azdoor Sabha
(A IR 1980 S.C . 1896), th a t those w orkm en who in stigate o r in cite an
illegal strik e, a re lia b le to discip lin ary actio n which may include
dism issal. T h e tra d e u n io n leaders w ho are em ployed in the industry
concerned, generally do not w ant to tak e th e risk o f inciting an illegal
strike, fo r w hich they m ight lose th e ir jobs. Such sanction how ever, is
( x x v i) LABOUR LAW AND LABOUR RELATIONS

n o t available against outsiders who are allow ed u n d er the T rad e U nions

A c t to be the officers o f th e trad e union. A g ain st such outsiders, th ere
is no effective way o f stopping th em from in stig ating illegal strikes,

I t may be w orthw ile for th e cen tral legislature to co n sider w hether

there should be a m achinery p ro v id ed for to eifectively deal w ith illegal
strikes by making provisions fo r issuing injunctions against such illegal
strikes as has been provided u n d er th e M a h a ra sh tra T rad e U nions and
U nfair Labour Practices Act.

Lay off, Retrenchment, Closure and Transfer

Lay off, retren ch m en t, closure and tran sfer are im p o rta n t subjects
on which there have been a num ber o f judicial p ro n o u n cem en ts and have
b een dealt with in p a rt VL
B

T ill the am endm ent A ct o f 1953, in d u strial tribunals, through

aw ards m ade by th em from tim e to tim e, h a d g ra n te d relief to w orkm en
against tem porary unem ploym ent caused by lay off, and perm anent un­
em ploym ent due to retren ch m en t, closure or tra n sfe r o f a n undertaking.
I t was felt by th e legislature th a t the law on the subject should be
codified. T h at is why th e am endm ent A ct was passed in 1953, m odifying
the law on th e su b ject.

As far as lay off is concerned, the definition is given at page 419.

Lay off differs from lo c k -o u t W hile lock-out is resorted to deliberately
by the em ployer as a coercive m easure, and usually involves tem porary
closure o f the place of business, and does n o t entail paym ent o f com pen­
sation or wages, unless th e lock-out is illegal a n d /o r unjustified, a lay off
on the contrary, occurs in a continuing business th ro u g h no fa u lt o f th e
w orkm en nor of th e em ployer. In cases o f lay off in undertakings which
em ploy 50 w orkm en or m ore, lay off com pensation is provided for at
h a lf basic wages a n d dearness allowance. F u rth e r, under Section 25-M
o f the Industrial D isputes A m endm ent Act, 1984, perm ission is req u ired
from the ap propriate G overn m en t before resorting to lay off in establish­
m ents em ploying 100 w orkm en o r m ore.

A s com pared to lay off, retren ch m en t involves term ination o f ser­

vice of the w orkm en. Such retrenchm ent can be m ade only a fte r com ­
pliance with the provisions o f Section 25-F o f th e Indu strial D isputes A ct,
in the event th a t th e w orkm en has com pleted o n e y ea r’s service. A t the
tim e of retrenchm ent, com pliance is also required with th e principle o f
 INIRODUCTION ( x x v i i)

re tre n c h m e n t of ‘la st com e, first go’ in co rp o rated in Section 25-G o f the

A ct. D e p a rtu re from this rule w ith o u t valid reasons, ren d e rs re tre n c h ­
m ent invalid.

T h e p o p u la r definition o f le tre n c h m e n t im plies term in atio n o f

service o f surplus staff’. H ow ever, th e d efin itio n o f retre n c h m en t as
reprodu ced at page 423, defines re tre n c h m en t as term in atio n o f service by
the em ployer for any reaso n w hatsoever o th erw ise th an as pu n ish m en t
inflicted by way o f disciplinary action. Only the categories as m entioned
in clauses (a), (/i)and (c) are excluded, from th e definition, a p a rt from
term inatio n as p unishm ent by way o f disciplinary actio n . In
H ari Prasad Shiv Shanker Shu/da v. A .D . D ivelkar (A.IR 1957 S.C.
121), d e a lt with a t page <442, th e S uprem e C o u rt while in te rp re tin g the
definition observed “ retre n c h m en t m eans discharge of surplus w orkm en in
an existing o r continuing b usiness” . T hese w ords were understood by the
H igh C o u rts, and even in som e ju d g m en ts o f the Suprem e C o u rt, to im ply
th a t th e Suprem e C o u rt h ad read c e rta in w ords in the definition o f
retrench m en t w hich did n o t otherw ise exist to h arm o n ise th e defi,nition
w ith th e schem e o f (he A ct n am ely , discharge o f surplus lab o u r. H ow ­
ever, in S ta te S a n k o f India v. N . Sundara M oney (A IR 1976 S.C.
1111 ), th e Suprem e C o u rt, sp eak in g th ro u g h K rish n a Iyer, J., gave the
literal m eaning to th e w ords “ for any reason w hatsoever” . T he result
was th a t every te rm in a tio n , o th e r th a n term in atio n specifically excluded
from th e definition spells re tre n c h m en t. In the case a i H industan Steel
Lim ited V. State o f Orissa (1977 (1) L .L .J. 1) d ealt with a t page 448,
it was urged by the em ployer th a t the ru le laid dow n is Sundara
M oney was co n trary to the ju d g m e n t in H ari Prasad Shukla. The
Suprem e C o u rt, how ever, restricted th e dictum in Shukla to exclude
term in atio n o f service o f all w orkm en by the em ployer when th e business
itself ceases to exist.

In Hindustan Steel's case, there was actually discharge o f surplus

labour although a t th e end of the c o n tract p erio d . So, it was urged in
the case o f v. S ta te B a n k o f P atiala (1982 (I) L L J, page
72), th a t th e definition o f retrenchm ent m u st be confined to cases o f sur­
plus staff. T he C o u rt h eld through the ju d g m en t o f C hinnappa R eddy,
J., th a t “ for any reaso n w hatsoever” should be interpreted to m ean,
w hat it plainly says, th a t it m ust co n n o te every term in atio n o f service of
a w orkm an by an a c t o f the em ployer, save in cases w here such term ina­
tion is h e ld to be specifically excluded. This view has been reaffirmed
by the Suprem e C o u rt in Surender Kum ar Verma v, Central Government
Industrial Tribunal-Cum'l^abour Court (A^R 1981 S.C. 422) ^ealt
(x x v iii) tABOXJR L/t® AND LABOUR RELATIONS

with at page 453 and Delhi Cloth and General M ills Lid. v. Sliamblm
Nath Mukherjee (page 456).

la none of these judgm ents, however, the effect o f the above in te r­

pretation vis-a-vis Sections 25-G and 25-H h as been dealt with. N o r has it
been decided, how such a broad in terp retatio n o f the definition o f retren ­
chment is adopted, how this w ould harm onise w ith the requirem ent th a t
retrenchm ent can be effected only with the previous perm ission o f the
appropriate G overnm ent. In th e application for perm ission, various
details are required which are relevant only if the proposed term ination
is due to surplus labour. I t will have to be decided by the C ourt, sooner
or later, as to w hat is the im pact o f the above interpretation on th e
reasonableness o f the provisions o f Sections 25-G and 25-H and the provi­
sions of C hapter V-B of the Industrial D isputes Act.

I t has been held by a caten a of judgm ents th a t com pliance w ith

25-F o f the Industrial Disputes A ct is a condition precedent fo r retrench­
m ent. If these conditions precedent are not com plied w ith, then tlie
retrenchm ent itself is void and the em ployer would be liable to pay to
the workmen full wages till he issues a fresh o rd e r after com plying with
the provisions of Section 25-F (see pages 446, 448, 449, 453). H ow ever,
in the case of a closure of an undertaking, w here the etnployet is required
to pay the same compensation as in the case o f retrenchm ent, non-com pli­
ance with th e provisions of Section 25F FF does not render the closure
invalid, as decided in H athi Singh M anufacturing Company v, Union o f
India (AIR 1960 S.C. page 923), d e a lt with at page 489.

It may well be asked whether the approach ia the in te rp re ta tio n o f

Sections 25-F and 25-FFF is really in h arm ony with the scheme o f the
Industrial D isputes A ct which tries to do social justice to the claim s o f
labour without castitig too much burden on the industry. The approach o f
industrial adjudication, it has been emphasised in a num ber o f judgm ents
o f the Supreme C o u rt, o u g h t n o t to be legalistic. T he approach should
be pragm atic and calculated to establish industrial peace and provide
adequate sanctions so that the parties comply w ith the law. It m ay well be
asked whether it is consistent with this approach th a t merely becausc o f
difference in phraseology in the provisions of Section 25-F as contrasted
w ith th e provisions of Section 25-FFF should lead to the result th a t if there
is the slightest contravention of Section 25-F o f the Industrial Disputes
Act, this would invalidate the retrenchm ent, how ever justified it otherwise
may be. While non-compliance with the provisions o f Section 2 5 'F F F of
the Act should be not considered to be a serious m atter even though such
 in t r o d u c t io n ( x x ix )

n on-com pliance with law will cause th e sam e h ardship to th e w orkm en

as in the case o f retrenchm ent. I t is sub m itted th a t the Suprem e C o u rt
should consider w h eth er the rigidity o f in te rp re ta tio n m erely on the basis
o f th e w ords o f the statu te is really consistent w ith the purpose o f th e
In d u strial D isp u tes A ct, an d ad o p t an approach which is pragm atic
ra th e r th an legalistic.

R eg ard in g th e restrictions placed on resorting to lay off and re tren c h ­

m en t in u n d ertak in g s em ploying 100 w orkm en or m ore, the provisions as
originally in co rp o rated did n o t provide fo r ad equate safeguards against
arb itrary refusal o f th e G o v ern m en t to g ra n t permission to lay off or re ­
tre n c h w orkm en. This was one o f th e reasons why the provisions o f the A ct
in regard to closure were declared ultra vires by the Suprem e C ourt in th e
E xcel W ear case. (E xcel Wear Union o f IncHa, 1979 S.C. 25), S u b seq u en ­
tly, th e A ct has been am ended. I t is open to debate as to w hether inspite
of th e safeguards provided against a rb itrary refu sal to g ran t perm ission to
lay o(f o r re tre n c h w orkm en, still th e provisions with regard to perm ission
to close dow n an u n dertaking, w ould be justified if tested o n the anvil o f
the em p lo y er’s rig h t to close his business ju s t as he has a rig h t to start his
bu sin ess.

Regulation of M anagem ent’s P rero g ativ e during Pendency of Proceedings

nnder Sections 33 & 33-A

P a rt VII d eals w ith cases w here it is intended to dism iss, discharge

o r otherw ise p unish w orkm en, to change th e ir conditions o f service
during th e pendency of proceedings in conciliation o r adju d icatio n . As
held by th e Suprem e C o u rt, these provisions have been in serted in the
A ct so th a t p roceedings before th e various authorities are ca rried on in
an atm o sp h e re o f industrial p eace and th a t the em ployer does n o t
victim ize his w orkm en during th e pendency o f ad ju d icatio n pro ceed in g s.
As originally en acted , perm ission to discharge w orkm en or to change the
conditions o f service o f th e w orkm en was re q u ire d in every case. This
was so even if th e d ischarge or chan g e o f conditions o f service h a d no
connection w hatsoever w ith th e m a tte r p en d in g . By the am en d m en t
A ct o f 1956, S ectio n 33 was substantially am en d ed . T he section as
now existing, deals w ith th e follow ing th ree contingencies:

1. W ith m atters where th e m isco n d u ct in connection with the

dispute o r change in co n d itio n s o f scrvice, is also connected
w ith th e d isp u te pending. In eith er case, perm ission is
(x x x ) LABOUR LAW AND LABOUR RBLATIONS

required before dismissal or disch arg e I'or any m isconduct or

cliange in conditions o f service is m ade to the prejudice o f
workm en.

2. In the case o f p ro tected w orkm en, the perm ission is req u ired in
any event, w hether the discharge/dism issal or punishm ent is
connected with the dispute p en d in g or not. Perm ission is also re ­
quired in cases .where the discharge of the p rotected w orkm en is
not fo r any m isconduct. These w orkm en are officers of the tra d e
union who have been recognised as protected w orkm en in
accordance w ith the procedure la id dow n under the A ct.

3 , In cases where the m isconduct is n o t connected w ith the

dispute pending ad ju d icatio n , the em ployer is allowed to te rm i­
nate th e services o f th e w orkm en, b u t he m ust tender o n e
m onth’s wages and ask for approval o f the tribunal sim u lta ­
neously with the order o f discharge. As decided by the Suprem e
C ourt in Straw Board case, (19(52 ( I ) L .L .J. 420) the ac tio n o f
the em ployer in term inating th e services o f th e w orkm en
for m isconduct n o t connected w ith th e d isp u te is provisional.
I f the action is n o t approved, th e re would be no term ination
o f service in the eye of law.

N o approval is req u ired in case the change in conditions of service

is for a m atter n o t connected w ith the disp u te. But, in such case, th e
change should be in accordance w ith the term s o f the standing orders,
or, if there are no standing orders, in accordance with the contractual
relations betw een the parties.

As to w hat is the effect o f non-com pliance with Section 33 o f the

Industrial Disputes A ct was decided by the Suprem e C o u rt in the ease
of Automobile Products o f India (1955 (1) ' L.L..T. 346), w hich was
approved by th e Suprem e C ourt as late as in 1978, in the case o f Punjab
Beverages (1978 (2) L .L .J. 1).

This is an ap p ro ach w hich is different fro m th e approach in inter­

preting Section 23-F o f th e In d ustrial D isputes A ct. U n d er Section 25-F
of the Act, non-com pliance w ith th e section m akes th e retrenchnaent
itself invalid and ultra vires. T he difference is explained by reason of
the fact that Section 33-A w hile providing for its im m ediate rem edy in
cases o f non-com pliance w ith Section 33 of th e A ct, requires th at the
 INTRODUCTION ( x x x i)

ad ju d icatin g a u th o rity concerned should decide th e m a tte r as if it is an

industrial d isp u te referred for ad ju d icatio n to the trib u n al.

T here is a m aterial difference in th e scope o f the trib u n a l’s ju risd ic­

tio n un d er Section 33 o f th e A ct as com p ared to Section 33-A o f the
A ct. In ap p licatio n under Section 33, only a / n 'm a / a c / e case has to be
m ade o u t fo r perm ission or a p p ro v al, as th e case m ay b e . In the case
o f Section 33-A , how ever, once it is p ro v ed th a t the em ployer has
com m itted co n trav en tio n o f Section 33 o f th e A ct, th e adjudicating
auth o rity h as to decide th e m a tte r as if it is an industrial dispute referred
to it for ad ju d icatio n . This im plies th a t th e w orkm en do n o t have to
w ait for a referen ce u n d er Section 10 of the A ct, fo r getting th e ir
dispute ad ju d ic a te d once it is show n th a t th e re has been a co n trav en tio n
o f Section 33 o f the A ct.

I t follow s fro m th e above discussion th a t in deciding an applica­

tion u n d er S ection 33 o f th e A ct, th e trib u n al has only a lim ited
discretion. It h as only to see w hether th ere is a prim a f a d e case. O nce
a prim a fa c ie case has been established, it h as n o o p tio n b u t to g ra n t
perm ission or appro v al, as th e case m ay be. I t ca n n o t even im pose
conditions for g ra n t o f perm ission o r approval. F u rth e r, because th e
trib u n al's ju risd ictio n under Section 33 is lim ited, this leaves th e door
open for adjudication o f th e in d u strial dispute if a reference is m ade to
the trib u n al u n d e r Section 10 o f the Industrial D isputes A ct, 1947.

I t is su b m itted th a t the pro v isio n s o f Sections 33 and 33-A require

a new look by th e legislature. It results in unnecessary d u p licatio n o f
proceedings. T he m atter is first decided u n d er Section 33 o f th e In d u ­
strial D isp u tes A ct. T h a t may itse lf tak e a considerable a m o u n t o f
tim e. A fter approval o r perm ission is gran ted , the w orkm en have to
approach th e ap p ro p riate G o v ern m en t for a reference. T h e reference,
itself, m ay tak e m o re tim e. It is suggested th a t th ere is a serio u s case
for giving larg er ju risd ictio n to the trib u n al in application u n der Section
33 o f th e A ct. As a m atter o f fact, w ith th e rec en t app ro ach o f the
Suprem e C o u rt to cu ttin g dow n the extent o f the governm ent’s discretion
in referrin g disputes fo r ad ju d icatio n u n d er Section 10 o f the A ct, it
m ay be advisable to vest th e trib u n al w ith com plete jurisd ictio n to decide
the m a tte r finally w hen an applicatio n is m ade under Section 33 o f the
A ct. W h eth er th e m a tte r is b rought by way o f application by th e em ployer
or by a n ap p licatio n by the w orkm an becau se o f c o n tra v en tio n o f
Section 33, th e trib u n als should a p p ro ach th e m atter with th e view th»,t
 (x x x ii) LABOUR LAW AND LABOOr RELATIONS

they should decide the justification fo r th e actio n o f the em ployer. C o n t­

ravention of Section 33 of the A c tsh o u ld , it is sb u m itted , be not sufficient
to give im m ediate relief to th e w orkm en b y way o f re in state m en t. T h a t
however, should still be an im p o rta n t co n sid eration in deciding on the
validity o f the action o f th e em ployer. I f th e action is otherw ise
bonafide, th e trib u n al may well give som e relief to th e w orkm en by way
o f additional com pensation, ra th e r th an h o ld th a t the actio n o f th e
em ployer is void, o r to ig n o re the c o n tra v e a tio a . T he m atter, it is
subm itted should be ap p ro a c h e d by th e trib u n a l in a prag m atic m an n er,
rew arding or punishing th e p arties co n cern ed on the facts and circ u m ­
stances o f each case. This would be m ore in consonance w ith the
approach which the C o u rt sh o u ld have in cases o f ad ju d icatio n o f in d u s­
trial disputes. T oo m uch o f legalistic consid erations sh o u ld be avoided.
I t is substantia] justice w hich is required in case o f in d u strial adjd u icatio n .
Technicalities o r legalities sh o u ld be avoided a t all costs if in d u stria l
adjudication is to achieve its p rim ary objective—th a t is o f establishing
industrial peace w ith social ju stice, but w ith o u t penalising th e em ployer
fo r his bonafide m istakes.

Section 33-C of the Act

O ne o f the im p o rta n t featu ers re la tin g to in d u strial ad ju d icatio n

in Ind ia, is the fa c t th a t b efore an industrial d isp u te can be adjudicated
by the industrial trib u n a l, th e re should be a reference m ade to it u n d e r
Section 10 of th e In d u strial D isputes A ct. O ne im p o rta n t exception to
the ru le is where th e re is a co n trav en tio n o f Section 33 of th e A ct. In
such a case, an ap p licatio n u n d er S ectio n 33-A can be m ade to th e
tribun al or lab o u r court, directly by the w o rk m an . In 'an app licatio n under
Section 33A, the tribunal w ill have the sam e jurisd ictio n to deal with
the industrial d isp u te as in a regular referen ce u n d e r Section 10 o f th e
A ct. This issue h a s already b een discussed above.

Y et, an o th er exception to th e rule is w here th a t is sought to be

done is n o t to invoke th e ju risd ictio n o f the trib u n a l fo r creation o f new
rights o r to enforce n o n -co n tractu al or n o n -statu to ry claim s b u t to
execute existing rig h ts. T hus, if th e re is a lre a d y an aw ard on a m atter,
and the dispute is restricted to rig h ts flow ing out o f th e aw ard, a p p ro ­
p riate G overnm ent m ay be m oved for im p lem en tation o f benefits under
th e aw ard und er S ection 33-C (1) o f the In d u stria l D isputes A ct, w here
th e am o u n t is an ascertained a m o u n t and does n o t req u ire any conjpu-
 INTRODUCTION ( x x x iil)

ta tio n , an d th e la b o u r co u rt u u d e r S ection 33-C(2) o f th e A ct, w here the

ex istin g rig h t is estab lish ed b u t th e a m o u t has to be d eterm in ed . S im ilar
is the case w ith reg ard to settlem en ts o r dues u n der C h a p ter V-A o f the
In d u stria l D isp u tes A ct re la tin g to c o m p en satio n in case o f lay off,
re tre n c h m e n t, tra n sfe r o f an u n d e rta k in g o r closure o f a n establishm ent
o r other s ta tu to ry o r co n tra c tu a l claim s.

A lth o u g h th e language o f S ection 33C ap p ears to b e clear enough,

still th e re h as b een q u ite a controversy as to th e exact scope o f Section
33-C(2) o f th e A ct. T h a t contro v ersy w as -determ ined by the
S uprem e C o u rt in th e case o f Central B a n k o f India v. R a ja Gopalan
A IR 1964 SC 743 (p. 548). T h a t is why th e case receives com prehensive
co n sid eratio n in this volum e u n d e r p a rt V III h e reto .

A fter this ju d g m e n t o f th e Suprem e C o u rt, it ap p ea rs to b e settled

th a t in so far as existing rig h ts a re co n cern ed , wide ju risd ictio n is vested
in th e la b o u r c o u rt to en force th em . T h e la b o u r co urt u n der Section
33-C{2) o f th e A ct can go in to all in c id e n ta l questions. W hen such a
d isp u te is raised, th e la b o u r c o u rt is w ithin its ju risd ictio n to decide such
a d isp u te if th a t d e te rm in a tio n is re q u ire d to be m ade. W h a t th e la b o u r
c o u rt can n o t, how ever, do is to d e te rm in e a d isp u te w hich relates n o t
to execution o f existing rights b u t c re a tio n o f new rig h ts, o r m atters
w hich req u ire a d ju d ic a tio n in a referen ce u n d e r S ection 10 o f th e A ct.
Som e o f the illu stra tio n s in th is resp ect a re given in the ju d g m e n t itself
and m ay usefully be perused.

H ow ever, even a fte r the ju d g m e n t in th e Central B ank case, th e re

has been still controversy in the m a tte r. O n e controversy w h ich has been
d e a lt w ith in th e ju d g m e n t in P aym ent o f W ages Inspector y . Suraj M a i
(p. 551) is th e ju risd ic tio n of th e la b o u r c o u rt, u n d e r S ection 33-C(2) o f
the A ct, c o m p a re d to Section 15 o f th e P ay m en t o f W ages A ct- T h e
controv ersy was settled by th e S uprem e C o u rt by h o lding th a t the
ju risd ic tio n of th e P ay m en t o f W ages A u th o rity u n d er S ection 15 is
m uch m o re lim ited th a n th a t o f the la b o u r c o u rt u n d er S ection 33-0(2)
o f th e In d u stria l D isputes Act.

I n th e case o f VoJtas L im ite d (p. 556), th e con tro v ersy was w ith
reg a rd to in te rp re ta tio n o f an aw ard . T h e m a n ag em en t c o n te n d e d th a t
there was a ceiling o f R s. 350— fixed u n d e r th e schem e o f d ea rn e ss allow ­
ance laid dow n u n d e r th e aw ard , a n d th e re fo re , th e woikm ein w ould
n o t be e n title d to dearness allow ance b e y o n d R s. 350/-. T h e lab o u r
co u rt accep ted th e m anag em en t’s co n ten tio n b u t th e H ig h C o u rt held
(x x x iv ) LABOUR LAW AND L a BOOR RELATIONS

that the lab o u r court had exceeded its ju risd ic tio n in doing so. T h e
Suprem e C ourt held th a t th e H ig h C ourt was w rong and a.ffivn-it;d th e
power of the labour court to decidc the q u a stio a , w hether there was a
ceiling in the existing scheme.

Again, in th e case of , Bahadur Bansilal Ahirchand M ills (p. 558),

the C ourt held th a t paym ent o f lay-off co m p en satio n could be claim ed
under Section 33-C(2) o f th i Act, even w hen the em ployer contends th a t
there was no lay-off but closure. Tlie lab o u r c o u rt’s jurisd ictio n could
not be ousted by a mere plaa denying th e w orkm en’s claim to the com ­
putation o f the benefit in term s o f money. T he labour c o u rt had to go
into the question and to d eterm ine whetlier o n the facts, it h ad ju risd ic ­
tion to make the com putatioQ . It could not, how ever, give itse lf
jurisdiction by a wrong decision o n the jurisd ictio nal plea.

Again, in Firestone case (p. 560) and in Central Inland W ater ease
(p. 561), this wider jurisdiction was em phasised. The C o u rt, how ever,
struck a contrary note in Uttar Pradesh Electric Supply Company v. Sliukla
K K . and Another, A IR 1970 SC 237 (p. 553). In this case, th e dispute
was whether the company had retreuched the w orkm en o r the w orkm en
had voluntarily abandoned th e com pany’s service. T he C o u rt to o k th e
view th at here the dispute was v^hether the w orkm en have been re tre n ­
ched. The com putation of the am o u n t was only subsidiary or incidental.
In such a case, the labour co u rt will have no au th o rity to trespass upon
the powers o f the tribunal w ith which it is statu to rily invested.

Y et, another issue w ith reg ard to S ection 33-C of th e A ct is

illustrated by the judgm ent in Punjab Cooperative B ank, A IR 1975 SC
1898 (p. 359). This claim of the w orkm en u n d er Section 33-C(2) o f the
Act was filed on 10th July, 1968 an d related to the period 1954 to 1961.
I t was the case o f th e m anagem ent that the claim was barred by lim ita­
tio n under Section 33-C (l) of th e In d u strial D isp u tes A ct, under which
alone th a t claim could be m ade. T hus, th e claim was n o t m aintainable
under Section 33-C(2) of the A ct, This co n ten tion o f th e m anagem ent
was rejected.

F rom the aforesaid discussion, it would ap p ea r th at there are still

grey underm ined areas with regard to the exact ju risd ictio n of the labour
court under Section 33C(2) o f the Act. I t is u nderstandable th a t the
workm en prefer to make th eir claim s und er S ection 33-C(2) of the
Act. This avoids the necessity o f having , a reference m ade under
Section 10 of the Act. F u rth er, even stale claim s can be m ade
 INTRODUCTION (x x x v )

u n d er S ection 33-C(2) o f th e A ct, alth o u g h they m ay n o t be e n te r­

tain e d for reference under S ectio n 10 o f th e A ct. T hey also p refer to
m ake a claim u n d e r S ectio n 33-C (2), ra th e r th a n u n d e r Section 33C(1),
fo r, lim ita tio n o f o n e year ap p lies to claim s u n d er S ectio n 33C (1). No
such lim ita tio n applies u n d er Section 33-C(2).

I t is subm itted th a t it is high tim e th a t the legislature p u t the co n ­

troversy to re st. I t does a p p e a r o dd th a t th e re is no lim itatio n w h a t­
soever fo r m ak in g claim s u n d e r S ection 33C(2) o f the A ct. T h e claim s
som etim es re la te to very old p erio d s. If su ch a claim is m ade by large
n u m b er o f w orkm en, based o n alleged existing rights w hich w ere never
asserted som etim es fo r decades, it puts the em ployer in a every difficult
po sitio n . T h e first p ro b lem for him is to tra c e th e reco rd s w ith reg ard
to th e p a st service o f the eraployeesi If such records ca n n o t b e traced,
generally speak in g , a n inference is d raw n a g a in st th e m anagem ent.
Som etim es, ag ain p arties have u n d e rsto o d a certain aw'ard or settlem en t
t o m e a n so m eth in g fo r which th e benefits have already been gran ted .
B ut, so m etim es, erro rs of u n d erstan d in g d o tak e place and th e issue m ay
be ra k e d u p b y th e w orkm en a t an y tim e. In such a case, to burden th e
em ployer w ith indefin ite past liability, does n o t ap p ear to be ju stified . It
is su b m itted th a t w hether it is a claim u n d e r S ection 33C(1) o r u n d e r
S ection 33C (2), a lim itatio n o f 3 years as in civil litig atio n , may be
im posed. If th is is done, th e la b o u r c o u rt should be given th e w ider
ju risd ic tio n o f determ in in g n o t only as to w hat is the a m o u n t due to
them b u t also the q u estio n as to th e existence o f th e rig h t itself. T h e
controversy w ith reg ard to w h a t is in c id e n ta l, an d w hat is n o t in cid en tal
o ften leads to d elay in deciding th e m erits o f the co n tro v ersy . In th e
o p in io n o f th e w rite r, it is h ig h tim e th a t fine d istin ctio n s o f law w hich
m ay d elig h t th e law yers’ com m unity sh o u ld b e avoided in a field w here
th e q u e stio n is o f giving speedy rem edy to th e w o rk m en ’s claim s a n d
grievances.

Security o f Service fo r the In d u strial W orker

P a rt IX d eals w ith T e rm in a tio n o f Service a n d D om estic E nquiry,

w hile P a rt X deals w ith U n fair L ab o u r P ractices an d V ictim isation. As
the tw o o fte n o v e rla p , it is b e tte r to co n sid e r th e m to g eth er.

P rio r to 1947, th e In d ian w orker h a d n o security o f seiv ic e. H is

rights an d duties w ere d e te rm in e d by th e law o f m aster and servant.
U n d e r th is law. th e em ployer can te rm in a te th e services o f a n em ployee
(x x x v i) LABOUR LAW AND LABOUR RELATIONS

by giving him notice as provided under his c o n tra c t o f scrvice/om ploy-

m ent. In the event, th ere vi^as no specilic te rm in th e co n tract o f service,
providing for term in atio n o f service by n o tic e , th e services o f the e m ­
ployee could be term inated by giving reaso n ab le notice. Even th o se w ho
were called p erm an en t em ployees, also had n o security of service. T h eir
services were also liable to be term in ated by due no tice (H a lsb u ry ’s
Law o f England, vol, 26 3rd ed.).

The Indusfrial D isputes A c t 1947, com pletely, changed the lavi- in

the m atter. T h e classic ju d g m e n t on the sub ject is th a t o f the F ed eral
C ourt in the case of W estern India Autom obile Association v. h u lm tria l
Tribunal, Bombay & Others, (1949 (1) L L J. 245), already deal! w ith
also in another p o rtio n o f this in tro d u ctio n . In this ju d g m e n t, it w as
laid down th at th e tribunals in dealing w ith in d u strial disputes, a re n o t
bound by the ordin ary law of m aster and servant an d can give relief
which no court o f law can give an d order re in sta tem e n t to an em ployee,
if necessary in th e interest o f industrial peace an d to avoid victim ization.

In the m a tte r of dism issal o f w orkm en fo r m isconduct, th e F u ll

B ench of th e Labour A ppellate T rib u n al in th e case o f Buckingham Sc Car­
natic. M ills, laid down th e lim its o f th e trib u n a l’s ju risd ictio n to in terfere
w ith the actio n o f th e m anag em en t (p. 566). T he L abour A ppellate
T ribunal em phasised th at it is fo r the m an ag em ent to d irect its in te rn al
adm inistration, an d to enforce discipline am ong its p ersonnel. M oreover,
social justice requires th a t an em ployee should be p ro te c te d against vin­
dictive or capricious action o n th e p a rt o f th e m anagem ent. H aving
regard to the tw ofold objectives as above, th e L a b o u r A p p ella te T ribunal
laid down the follow ing circum stances in w hich th e trib u n al w ould in te r­
fere w ith th e m anagem ent’s action dism issing w orkm en.

(1) W here there is a w ant o f b o m fide; o r

( 2 ) it is a case o f victim ization or u n fa ir lab o u r p ractice, o r viola­

tio n o f the principles o f n a tu ra l justice, or

(3) there is a basic erro r o f fact, or

(4) there h as been a perverse finding o n the m aterial.

These principles laid dow n by the L a b o u r A ppellate T rib u n al were

adopted by the Suprem e C o u rt as laying dow n th e correct law in th e case
o f Indian Iron and Steel Company v. Their W orkm en (p. 575).
 INTRODUCTION (x x x v ii)

On th e basis o f the above principles, the p ro tectio n given to em ­

ployee’s security o f scrv/ce was n o t considered to be ad e q u a te . T here
w as a pressure o n th e governm ent to am end the Act so as to give m ore
pro tectio n to th e security o f service o f the w orkm en. T he result was
Section 11-A o f th e Indu strial D isputes A ct, 1947 whicJi applies to all
references m ade to th e trib u n al after 15th D ecem ber, 1971. The p ro ­
visions of S ection l l 'A of tbe A ct were in terp reted by th e Suprem e C ourt
in th e case o f th e W orkmen o f M is. Firestone Tyre Rubber Co. o f India
(Pvt.) L im ited y . The M anagem ent and Others, 1971(1) L L J. 278. T he
Suprem e C o u rt held in this case th a t the lim its placed on the ju risd ictio n
o f the trib u n a l by th e Indian fron & Steel Company case w ould n o t apply
to any reference m ade after 15th D ecem ber, 1971, It is now within th e
discretion o f th e trib u n al to sit in appeal over the findings o f the enquiry
olBcer o r the m anagem ent in a dom estic enquiry. In ad dition to this,
the trib u n al w ould also be com petent to interfere with the punishm ent
im posed on the w orker by th e m anagem ent if m isconduct by the w orker
is prov ed . F u rth e r, the Suprem e C ourt held th a t even after the enactm ent
of Section l l - A o f the In d u strial D isputes A ct, th e em ployer is entitled
to prove th e m isconduct o f th e worfcraan b efore the tribunal even though
the m anagem ent has held no enquiry, or the enquiry held by the m anage­
m ent is defective. In such a case, th e w hole m a tte r is a t large before th e
trib u n a l w ho w ould com e to its own conclusion as to w hether the m is­
conduct is proved against the w orkm an and if such m isconduct is proved,
w hether the p unishm ent im posed on the w orkm an was com m ensurate w ith
his m isconduct, a n d if found excessive, to substitute the sam e by a lighter
pu n ish m en t.

W h at are th e requirem ents o f a valid enquiry, has been elaborated

by the Suprem e C o u rt in several judgm ents. S horty stated , these are
th at th e w orkm an should be given p ro p er o p p o rtu n ity by way o f a
charge-sheet setting fo rth clearly th e allegations m ad e to g eth er w ith th e
relevant referen ce to th e standing ord ers o r service regulations applicable
to the w orkm an. A fte r receipt o f th e reply to the charge-sheet, in the
event th a t the charges arc denied by th e w orkm an, a w ritten dom estic
inquiry is required to be held. I n such inquiry, th e w orkm an is to be
given an o p p o rtu n ity o f cross exam ining th e w itnesses in su p p o rt o f the
charges and to give evidence in defence. T he p rocedure follow ed in the
enquiry, m ay n o t be as iu a civil co u rt bccause th e provisions o f the Civil
P roced u re C ode o r the Evidence Act, are n o t a ttrac ted in these inquiries.
These inquries a re to be p eru sed by the C o u rt, on the basis th a t the
persons conducting these inquiries are generally laym en. H ow ever, w hat
(x x x v iii) LABOUR LAW AND LABOUR RELATIONS

is required is th a t a fair h earing should be "given to the w orkm an. W hat

is a fair hearing, has to be decided on the facts and circum stances o f
each case. T he im p o rtan t p o in t being th a t no prejudice should be
caused to the w orkm an in puttin g u p his defence. In th is co n n ec tio n ,
reference may be m ade to the judgm ents re fe rred to in this volume.

Simple Termination

There m ay be cases w here no m isconduct is alleged against a w ork­

m an, but his services are term inated in exercise o f the contractual pow ers.
The appointm ent letters and service rules and also the standing orders,
often provide for term ination by a certain period o f notice or wages in
lieu of notice, w ithout alleging any m isconduct against the w orkm an.
B ut, for th at reason alone, the order of th e em ployer w ould n o t be up­
held. This is because th e em ployer can no longer claim a right to hire
an d lire as he pleases. If th at were accepted, this w ould com pletely
negative security o f service which has been secured to in d u strial em ­
ployees through industrial adjudication (see U.B. D u tt's case, page 576).
If, therefore, an em ployer w ants to avoid an in quiry, b u t still w ants to
get rid of the employee for m isconduct, his action would a m o u n t to
colourable exercise of the pow er granted u n d e r the c o n tra c t service ru les
or standing orders and would be liable to be set aside, on th at ground.
If no enquiry is held in th e m atter, th e only way the em ployer can av oid
reinstatem ent is to produce the necessary relev an t evidence justifying his
action before th e tribunal.

M any an action on the p art o f the em ployer is set aside on the

ground that the said action is the result o f unfair labour practice or
victim isation.

U nfair lab o u r practices a re now defined u n d er Section 2(ra) o f the

Industrial D isputes A m endm ent Act, 1982. T he list o f such unfair
labour practices, is given at th e beginning o f P art X . T here is a consi-
del able overlap between u n fair lab o u r p ractices and victim isation. W hat
is victimisation was considered by the Suprem e C o u rt in the case o f
M fs, Williamson M agor and Company L im ited, 1982(1) L L J. %'i. T he
argum ent advanced on th e p a rt o f the em ployer was th a t victim isation
had acquired a special m eaning in in d u strial disputes and connotes a
person who becomes the victim o f th e em ployer’s w rath by reason
of his trade union activities, and th at the w ord could n o t relate to a
person who was merely unjustly dism issed. T his iivterpretatiod was n o t
 INTRODUCTION (x x x ix )

accepted by th e Suprem e C o u rt w hich h eld th a t the w ord ‘victim isation’

should be given its norm al m eaning w'hich is th a t the w orkm an has been
th e victim of u n fair an d arb itra ry action. A w ord o f cau tio n was, how ­
ever, sounded by the Suprem e C o u rt, in th e case of Bharat Iron W orks
V. Bhagubhai, A IR 1976 SC 98 (P a rt X)- It was held th a t victim isa­
tio n is a serio u s charge by a n em ployee ag ain st an em ployer, an d th e re­
fore, it m ust be p roperly a n d adequately pleaded, giving all p articu la rs on
vi^hich th e charge is based, to enab le th e em ployer to fully m eet them .
T h e onus o f establishing a plea o f victim isation will be upon th e person
p lead in g it. Since th e charge o f victim isation is a serious m atter, reflec­
tin g to a g reat degree upon th e subjective attitu d e o f th e em ployer, evi­
denced by acts and conduct, these have to be established through
evidence. M ere allegations, vague suggestions and in sin u atio n s are n o t
enough. All p articu lars o f th e charge b ro u g h t out, m ust be w eighed by
the tribunal an d a conclusion th ereto should be reached on a to tality of
the evidence produced in su p p o rt o f the charge.

T h ere m ay be cases w here, alth o u g h no m isconduct has been

com m itted by a w o rk m an , still it m ay b e necessary to term inate his
services in th e o v erall in terest of th e industry. In th e case o f Air-India
Corporation v. V .A . Rebellow, A IR 1972 B.C. 1343, th e rig h t of th e
em ployer to te rm in a te an em ployee’s service on the ground o f loss o f
confidence was u pheld (p. 670). Relying u p o n this ju d g m en t, m any an
em p lo y er th o u g h t th a t the sh o rt-cu t o f sim ple te rm in a tio n may be
ad o p te d to g et rid of an in convenient em ployee. T h a t is w hy the
S uprem e C o u rt h ad to sound a n o te o f c a u tio n in th e case o f L . M ichael
& Another' v. Johnson Pumps India L im ited , A .I.R , 1975 S.C . 661 (p. 598).
In this ju d g m en t, the Suprem e C o u rt em phasised th a t security o f service
o f a n em ployee ca n n o t be nullified by th e sh o rt-cu t o f term in atio n fo r
loss of confidence. T he em ployer is obliged to prove to the satisfaction o f
the trib u n al th a t th e em ployee was h o ld in g a sen sitive po sitio n , and th a t
there w as sufiRcient m aterial to w arran t loss o f confidence. In th e recen t
ju d g m e n t of th e Suprem e C o u rt in Chandu L a i v. Pan Am erican W orld
Airw ays Inc., A .I.R . 11985 S.C. 1128, th e C o u rt has tak en th e view
th a t term in a tio n o f service for loss o f confidence is stigm atic, a n d m ust
be preced ed by an enquiry. I t is d o u b tfu l on th e basis o f these ju d g ­
m ents w hether loss o f confidence is a ground available to th e m a n a g e ­
m ent to term in ate the services o f a w o rk m a n . H ow ever, w here th ere is
bona fid e term in atio n o f service, re lie f o f rein statem en t w ould n o t be
granted as decided in M /s. Francis Klein & Co. (P) L td . v, Their W ork­
(xxxx) LABOUR LAW AND LABOUR RELATIONS

men, 1971 (2) L .L .J. 615 (p. 601) and also in Chandu L a i’s case.

W ith regard to simple term ination o f service, or discharge;

simpliciter, the pow er of the em ployer, p articu larly in the case of
em ployees o f ‘S tate’ u nder A rticIc 12 of th e C onstitution, recent ju d g ­
ments in Hindustan Steel Lim ited v. W orkm en o f Hindustan Steel L im ited
1985 (I) L .L J, 267, West B engal State E lectricity Board and Others v.
ShriDesb Bandhu Ghosh & Others, 1985 (1) L .L .J. 373, and Central Inland
Water Transport Corporation L im ited & Another, v. Brojo N ath Ganguly
and Others 1986 (2) L .L J . 171, show th a t such sim ple term ination oil
the basis o f contractual or statutory ternj is ultra vires. T his thinking is
likely to percolate dow n in deciding industrial disputes.

An em ployee’s service m ay also stand te rm in a ted due to abandon­

ment of service by the w orker. The Suprem e C o u rt in the case o f
Buckingham and Carnatic Co. L im ited v. Venkatiah, A .I.R . 19u4 S.C.
1272, held th a t w here th e stan d in g orders provide for autom atic term i­
nation of service o f an em ployee who has overstayed his leave, there
would be severance of relatio n sh ip o f em ployer and em ployee. H ow ­
ever, where there is no such provision in th e standing orders fo r
autom atic term ination o f service, the inference regarding ab andonm ent
o f service would n o t be easily draw n. T here has to be satisfactory
evidence th at the w orkm an has actually abandoned service. In the case
o f National Engineering Industries Lim ited, v. H anuman, A .L R . 1968 S.C.
33, th e autom atic loss o f lien was also re-affirm ed where the standing
orders provide fo r it. R ecent tren d of judgm ents o f the Suprem e C ourt
is to curtail th e scope o f autom atic term ination o f service as evident by
its judgm ents in the follow ing cases;

1. Delhi Cloth & General M ills Ltd., V. Shambu Nath M ukherjee

1978 (I) L.L .J. 1.

2. L . Robert D 'Sauza v. The Executive Engineer, Southern Railwav

and Another, 1982 (1) L .L .J. 331.

3. S. Govindaraju v. K .S.R .T .C . and A n o th e r ,m 6 (2) L .L .J, 351.

As far as relief in the case o f w rongful dism issal is concerned, the

norm al rule is reinstatem ent. If the em ployer w ants th a t such a relief
should not be granted, it is for the em ployer to plead and prove sufficient