Osmania University LLB Semester Exam Notes Labour Law I Ver 3

Labour law notes
Semester 3
T Muralidharan
Labour Law 1 Semester exam notes 1

Objectives of labour law
• To improve industrial relations and minimize industrial disputes

• Protect from Exploitation
• To regulate Trade unions
• Get fair wages
• Resolve conflicts
• Ensure health and safety
• Maintain equal opportunity in employment

Constitution and labour law
• Art 14 equality before Law • Art 4 1 right to education and right to work
• Art 16 Equality of opportunity • Art 42 Right to just and humane conditions at
work and maternity benefits
• Art 19 (1) Right to form Association/union
• Art 43 living wage for workers
• Art 21 Right to livelihood and right to life
• Art 47 Duty of state to raise level of nutrition
• Art 23 Prohibits Human trafficking and and standard of living and public health
forced labour
• Art 14 Prohibition of child labour below
14 years
• Art 39(d) Equal pay for Equal Work

Classification of labour laws
• Protective labour legislations to improve • Regulative Legislations to regulate
working conditions and laying down minimum
wage standards in work, safety. Employment of employer employee relations and
children and women and manner of wage provide mechanisms for dispute
payment resolutions, regulate worker Union
1. Factories Act 1948 relationships :
2. Mines Act 1952
3. Plantation Act 1951
4. Payment of Wages Act 1936
5. Minimum wages Act 1948 1. Trade Unions Act 1926
6. Child labour (prohibition and Regulation ) 2. Industrial Disputes Act 1947
Act 1896
7. Contract labour (Regulation and Abolition
3. Industrial Employment
Act 1970 ( standing Orders ) Act 1946

Classification of labour laws
• Social security legislations to • Welfare legislations to promote

provide social security benefits during general welfare of workers and improve
contingencies of life and social security their living conditions
• Workmen compensation Act 1923 • Mine s Labour welfare Fund Act 1946
• Employees State Insurance Act 1948 • Beedi workers Welfare fund Act 1976
• Employee Provident Fund and
miscellaneous provisions Act 1952
• Maternity Benefits Act 1961
• Payment of Gratuity Act 1972

Trade unions Act 1926

Q1 Trade Union – Meaning and definition
• Trade Union Act (TUA) 1926 • Excludes partner agreements

• Sec 2 (h) :meaning • Excludes private employer and
• Meaning : Any combination either employee agreements
temporarily or permanent – formed • A registered trade union of workmen
primarily for Regulating relationship shall at all times continue to have not
between
• employer and employer
less than 10% or 100 of the
• Employer and employee
workmen, whichever is less, subject
• Employee and employee to a minimum of 7 persons engaged
or employed in the establishment or
• Improving conditions of conduct of
industry with which it is connected,
trade or business
as its members.
• Includes federation of two or more TUs

Q2 A trade union of an industry consists of 10 workmen of
its own industry and 30 workmen of other industries.
Whether it is entitled for registration under the Trade
Union Act 1926?
• As per sec 2 of TU Act , registration of • A registered trade union of workmen shall
a TU is possible if the following at all times continue to have not less than
conditions are met: 10% or 100 of the workmen, whichever is
less, subject to a minimum of 7 persons
• Any combination either temporarily or engaged or employed in the establishment
permanent – formed primarily for or industry with which it is connected, as
Regulating relationship between its members.
• employer and employer • As per above 30 workmen from other
• Employer and employee industry is not relevant if it is not
• Employee and employee connected .
• Improving conditions of conduct of • 10 workmen should constitute 10% of the
trade or business workmen or the workmen strength of the
unit should not be more than 100
• Includes federation of two or more Tus
Q3 For the purpose of registering trade union seven
members signed the application. Subsequently three
members withdrawn their consent and informed the
registrar of Trade Unions before registering. The registrar
refused to register the union. Decide
• As per sec 2 of TU Act , registration of • A registered trade union of workmen
a TU is possible if the following shall at all times continue to have not
conditions are met: less than 10% or 100 of the workmen,
• Any combination either temporarily or whichever is less, subject to
permanent – formed primarily for a minimum of 7 persons engaged or
Regulating relationship between employed in the establishment or
• employer and employer industry with which it is connected,
• Employer and employee as its members.
• Employee and employee • As per above 7 workmen are required
• Improving conditions of conduct of as minimum from other industry
trade or business • Since the number is less than 7
• Includes federation of two or more TUs registrar is justified

Registration procedure chapter II Sec 3 to 14
• Not compulsory • Info required includes :

• only under TUA and NOT under • Objects
societies Registration Act or • End use of funds
Companies Act • Procedure for Member admission , exec
• Civil servants union cannot be committee appointment, member list
registered under TUA because it is maintenance
sovereign and NOT business or trade • Name and address
• Registered TU is a body corporate – • On being satisfied with all the
can sue, can be sued, can hold requirements, the registrar shall register
the trade union and issue a certificate of
property, legal entity, perpetual registration, which shall be conclusive
succession evidence of its registration.

Q4 Privileges and immunities of a Registered TU
civil sec 18
• Immunity from civil, tort,, agreements in restraint of
trade, breach of employment contract
• Immunity from Tort 18(2) – civil
• Members and office bearers wrong other than contracts,
• Conditions : quasi contracts, breach of trusts
• For furtherance of trade dispute
• Lawful means and Not prohibited by law
and other EQUITABLE obligation
• Peaceful gathering within office hours allowed like trespass private nuisance
• Gherao, intimidation, wrongful confinement not
allowed
• TU not liable for unauthorized
• Immunity from agreement sin restraint of trade : or without knowledge of exec
• Exception to sec 27 of Indian contracts act committee TORTOUS Acts by
1872 on restraint of trade agreement
• Art 19(1) (g) freedom of trade guaranteed agents
exception is a TU Agreement between
members on restraint of trade

Q5 What are the Immunities from criminal liability for
registered TU sec 17?
• Immune from criminal Conspiracy • Sec 17 provides immunity from

registered TUs this
• Sec 120 A of IPC prohibits criminal
conspiracy of an illegal act or a
legal act through illegal means
• Encouraging workmen to break
their employment contract is
illegal act. Office bearers agreeing
to persuade others to break the
contract is a conspiracy.

Q 6 What are the Rights and duties of a registered TU
• Rights: • Duties and liabilities :

• Member Admission rights : not absolute, • Inform registrar of change of address, alteration in
rules and other registration data
subject to reasonable restrictions
• Spend funds as per approved end use
acceptable as per TU act
• Set up a political fund
• Representation: on collective issues and
• Minimum no of the committee– 50% for
with authorization of individual issues unorganized , 33% or 5 which ever is less for
• Contracting organized - must be in house members
• Property ownership • Annual statements to registrar – receipts and
payments, assets and liabilities, change of office
• Right to sue bearers , latest amended rules
• Inspect accounts ofn TU ( cannot carry • Elect office bearers as per law – major, criminal
copies) conviction (5 year gap required after conviction) ,
no office of profit in state or union is not permitted
• amalgamate

Minor as a member of TU
• Sec 21
• Admit a person over 15 years
• All rights as an adult member including voting
• Cannot contest till 18

Q7 Amalgamation of a TU
• Merger of two or More Tus into one • Effective date of amalgamation to be date of
• Sec 24 provides, sec 25 lays down the certificate of amalgamation by registrar
procedure and sec 26 effects of • Sec 26 – effects of amalgamation – name
amalgamation changes and all rights and obligations are
• Sec 24 – amalgamation permitted with or passed onto the new entity
with out dissolution , with or with out division
of funds
• 50% of members of Tus involved must vote of
which 60% must affirm the amalgamation
• Notice to be served on respective registrars of
the states involved.

Q8 Law relating to Dissolution of a TU
• Registrar if satisfied that the dissolution is as

• Sec 27 provides for dissolution of a registered per the rules of the TU, will register he fact of
TU the dissolution.
• The TU rules must provide for Dissolution • Effective date of dissolution to be date of
registration by registrar
• Registered TU can be dissolved any time
• Notice signed by secretary and 7 members to
be served on respective registrars of the
states involved with in 14 days

Q 9 Law relating to Recognition of TU
Recognition is different from Registration Rights of Recognized TU

• No legal provision • Sole rep of workers
• Discretion of employer • raise issues and sign agreements
• Labour Ministry has proposed an amendment • membership fees
by Trade Union Amendment bill 2018 and has
invited comments. But a bill is yet to be • negotiate with employer
passed.
• nominate employee reps
• TU ( amendment ) Act 1947, TU bill 1950 with
recognition clauses – lapsed, not • TCCT union vs TCCT Lts 1982 : Kerala HC :
implemented Employer cannot be sued for recognition even
by registered TU
• Bombay Industrial Relations Act 1946 , MP
and Rajasthan state Acts provide for
compulsory recognitions. Other states and
central govt yet to make recognition
compulsory Labour Law 1 Semester exam notes 17
Collective bargaining
• Negotiation between employer and employee • Agreement under sec 18 of IDA 1947
or TU enforceable
• On employment terms • Advantages : obligation on both parties to
• Two way process comply, creates a code on conduct with
restraint for industrial peace
• UK preferred except when the dispute may
• Disadvantages : can lead to wage hikes , and
imperil society
big improvement in employment conditions
• USA – separate authority to regulate unfair with out proportionate productivity increases
labour practices and political interference
• Japan – guaranteed under constitution

Industrial Disputes Act (IDA) 1947

Industrial Disputes Act IDA 1947
Purpose • Applies only to defined

• to promote cordial relations and industrial peace • Employer
• investigation and settlement of dispute between • Workmen
Employer& employee, employer & employer and
employee & employee
• Industries
• Prevent illegal strikes and lock outs • Industrial disputes
• Relief to workmen for lay off and retrenchment • Award
• Encourage collective bargaining 80 sections, 12 chapters , 5 schedules
Definition of Authority is in sec 2(a) Sch 1: public utility industries
• Central – run under authority of central govt, railway, Sch 2 : labour court matters
controlled industry as specified, Corporation under
central statutes, UTI, banking and insurance company, Sch 3 : industrial tribunal matters
mines and oil fields, ports etc Sch 5 : unfair trade practices list
• State : residual

Q 8. Definition of Award sec 2(b)
• Award sec 2(b) : • 90 days for authority to reject/modify
• interim or final award subject to placing before
legislature or parliament and
• Like a court judgement signed by
enforceable after 15 days of placing
a presiding officer before legislature
• Determination of any question
• By labour court, industrial tribunal
or National industrial tribunal or
by arbitrators
• Award to be published by the
state/central authority with in 30
days of receipt of award

Q 8 (contd) Awards and settlements
• Binding on : • Duration of operation of award: one year ,
• Bi-partite Settlement award : Binding on extendable to three years, one year at a time
parties to agreement by the govt
• Arbitration award : Binding on parties to • Duration of operation of settlement : from

arbitration date specified or date of signing TILL date
specified or 6 months
• Conciliation and labour court and tribunal
awards : Binding on parties , employees
present and future, heirs and assignees of
employer

Definitions – employer as per sec
2(g) of IDA ,1947
• Western India Automobiles Associations Industrial Tribunal SC 1949
• Undertakings carried on directly or through an agent by govt or local
authority
• Private undertakings
• All those who fall under this section of IDA

Q 9 Definition – industry sec 2(j) –
Triple test
• Bangalore Water Supply • Excludes spiritual or religious services
Sewerage Board Vs Rajappa A • Profit motive is NOT relevant
SC 1978 • All sectors – public, private , joint –
• Test 1 : Systematic activity included
• Test 2 : Cooperation between • Nature of activity with special
emphasis on Employer Employee
employer and employee relations -test 1 and 2 – are
• Test 3 : production or important
distribution of Goods and • Professions, clubs, educational
services to satisfy human wants institutions, research institutes,
an wishes charitable projects included

Q 10 Is an educational institution an
Industrial undertaking?
• Before the Bangalore Water • The Triple Test was proposed in
Supply Sewerage Board vs A the Bangalore water supply and
Rajappa case, SC had declared in sewerage Board vs Rajappa case
the negative . 1978 . Application of this test
• Case : Univ of Delhi vs Ramnath resulted in the university being
SC 1963 on the ground that declared as an industrial activity
education is a mission or
vocation but not a business

Q11. A teacher in an educational institution had a dispute
with the management. Examine whether this dispute
falls under the Industrial Disputes Act 1947, in the light of
section 2(J) of the I.D. Act
• Before the Bangalore Water Supply • Yes . Dispute falls under the
Sewerage Board vs A Rajappa case, SC definition of industry under sec
had declared in the negative . 2(j)
• Case : Univ of Delhi vs Ramnath SC
1963 on the ground that education is a
mission or vocation but not a business
• The Triple Test was proposed in the
Bangalore water supply and sewerage
Board vs Rajappa case 1978 .
Application of this test resulted in the
university being declared as an
industrial activity

Q12 and 13 . Definitions – workmen
• Any person • Exclusions:
• Includes apprentices
• Manual, unskilled, skilled , technical, operational, • Independent contractor
, clerical, supervisory
• Armed Forces
• Express or implied terms of employment
• Having a grievance of dismissal, discharge or • Police , prison service
retrenchment in connection with a dispute under
IDA • Managerial or administrative
• Employed for the activity or connected with that work
activity
• Master servant relationship – supervise and • Supervisory work with wages
control by master DCW vs state of Saurashtra SC exceeding 6500 Rs per mensem
1956
• IN AN INDUSTRY defined under sec 2(j)

Q 14 Workers of an hospital raised an industrial
dispute regarding the regularization of the
services of a doctor. Can they do so?
• Question : is hospital an industry under sec • Is doctor a workman under IDA?
2(j)? • M. M. wadia charitable hospital vs.
• The Triple Test Was proposed in the umakant ramchandra warekar (Dr.), 1997
Bangalore water supply and sewerage (2) LLJ (bom), it was held that it was
Board vs Rajappa case 1978 . Application of never the object of I D Act that highly
this test resulted in the hospitals being qualified doctors or esteemed surgeons
declared as an industrial activity would be entitled to claim the protection
• Test 1 : Systematic activity of this welfare legislation. In the case of
• Test 2 : Cooperation between employer medical men rendering only professional
and employee service to various institutions and no
• Test 3 : production or distribution of Goods relationship is created between the
and services to satisfy human wants an parties which entitled them to claim the
wishes status of a workman.

Definitions – wages sec 2 (rr) ,
public Utility (PU) sec 2 (n)
• All remuneration convertible to • Why PU ? Special treatment
monetary terms specified for obligatory conciliation,
• Includes: DA, value of compulsory adjudication subject to
accommodation, supply of utilities, exceptions, provisions of strike and
medical, concessional food grains lock out more stringent
or articles, travelling concessions, • Schedule 1 : 21 industries specified
commissions paid to agents, free including transport by land or
food and tiffin supply water, ports, banking, hospitals and
• Excludes : bonus, night shift dispensaries, coal, cotton textiles,
allowances, employer contributions mining, defense services, etc
to PF, Pension fund and gratuity
Q15.Industrial Labour dispute sec
2(k) IDA
Three elements
• Who ?: Labour dispute mean a difference between an employer and
workmen or between workmen and workmen or between employer
and employer
• Who ? : workman or any person workmen are interested
• Why? : connected with employment or non-employment, or terms of
employment or conditions of labour or Representation of persons who
will negotiate
• Case laws : workmen of HLL vs HLL SC 1984 : demand for confirmation
of employees is an INDUSTRIAL DISPUTE ID
Q16. The workmen of a factory raised a dispute regarding termination of service of Assistant
Medical Officer who was not a workman of the factory. Whether such dispute was an industrial
dispute? Decide
Three elements of any industrial dispute are :

• Who ?: Labour dispute mean a difference between an employer and
workmen or between workmen and workmen or between employer
and employer . Yes. This is met in this case
• Who ? : workman or any person workmen are interested. Yes. In this
case doctor is “any person workmen are interested”
• Why? : connected with employment or non-employment, or terms of
employment or conditions of labour or Representation of persons
who will negotiate . Yes this is about termination of employment

Q17 When INDIVIDUAL DISPUTE MAY BE
CONVERTED INTO AN INDUSTRIAL DISPUTE
sec 2(k) and sec 2A of Act wef 1/12/65
An individual dispute may be converted into an industrial dispute when-
• (1) it is espoused by trade union – Registered or Unregistered but must be connected with the employer or
the industry - employee need NOT be a member of the TU or
• (2) it is espoused by an appreciable number of workmen.
• (3) common cause with many workmen
• (4) individual dispute , not espoused by other workmen or union can also be an ID if concerns with
employee discharges, dismissals, retrenchment, or termination as per SEC 2A
• So as per the first condition to make an individual dispute into an industrial dispute it must be taken up by a
union of workers of the establishment and where there is no such union it may be espoused by any of the
union of workmen employed in similar trades. As far as the second condition is concerned if an individual
dispute of a workman is espoused by an appreciable number of workmen of the same establishment, then it
is converted into an industrial dispute.
• Case law : Newspaper Ltd vs state industrial UP and Ors SC 1957 : single workman can raise an ID if supported
• Dispute raised by a dismissed employee is not an ID unless espoused by TU or group of workmen
• Case law : Bombay Union of Journalists vs Hindu Madras – only 10 employees in Mumbai – 7 administrative
staff and 3 journalisrs of which 2 were members of Bombay JU. SC held that appreciable number was not in
the union an dhnec Bombay Union of journalist cannot
Labour Law represent
1 Semester exam notesthe two journalists. 32
Strikes sec 2(q)
Classification of strikes : Essentials are :
What: Cession of work,
General
About What : About relevant items ( employment,
Stay –In non-employment or terms of employment )
Go slow ( sympathetic, By whom : by a group of persons, employed in the
industry or undertaking as per IDA ,
hunger, work to rule) How : acting in concert
Where : in the industry as per IDA,
How long : does not matter. Even a few hours is a strike.
Case law : State of Bihar vs Deodas Jha Patna HC 1958
Relationship of employer and employee continues even
in an illegal strike Express Newspapers Vs Micheal
Mark SC 1962

Q25 Lock outs sec 2(l) and closure
Lock out vs Lay off : • Lock out Essentials are :
• Closure is permanent closing while lock • What: Temporary closure of
outs are temporary
workplace, or suspension of work or
• ID is the cause of lock outs while Closure refusal to allow a set of employees to
may be due to many reasons including
economic viability
work
• Purpose of lock out is to get workers back • Where : in an industry as per IDA
to work while in closure the purpose is get • About What : About relevant items
workers off the work ( employment, non-employment or
Lock out vs Lay off terms of employment )
• Lock out is due to ID or to put pressure on • By whom : by Employer
workmen but lay off is duw to trade reasons
• Why : motivated by coersion
Q23 Prohibition of Strikes and lock outs in
Public Utility Services (PUS) sec 22 (1) and (2)
• No one employed in a PUS can • No PUS can declare a lock out
go on strike in breach of contract 1. Lock out will take place with
1. Strike will take place with in 6 in 6 weeks notice ( exception
weeks notice ( exception – if – if a strike is in progress)
lock out is in progress) 2. After 14 days or notice period
2. After 14 days or notice period specified which ever is higher
specified which ever is higher 3. During pendency of
3. During pendency of conciliation plus 7 days
conciliation plus 7 days
State of Bihar vs Deodhar Jha SC 1958 on duration of strike Crompton Greaves vs The
workmen SC 1978 strike has to be legal and justified to claim wages 35
Q 23 : Without serving notice the workers of Public
Utility Service (PUS) went on strike, is the action of
the workers is valid? Decide the case on legality of the
strike?
• No one employed in a PUS can • State of Bihar vs Deodhar Jha SC
go on strike in breach of contract 1958 it is held that duration of
1. Strike will take place with in 6 time has nothing to do with the
weeks notice ( exception – if meaning of strike as given under
lock out is in progress) the Act
2. After 14 days or notice period
specified which ever is higher
3. During pendency of
conciliation plus 7 days

General prohibition of strikes sec 23
• Applies to all undertakings • Illegal strike and lock outs sec 24
including PUS • Commenced in contravention of
• Strike or lock out is prohibited sec 22 for PUS and Sec 23 for all
undertakings
during pendency of dispute • Continued despite order of Govt
resolution proceedings in under sec 10(3) (government
• Conciliation order prohibiting of continuance
• Labour court post reference for conciliation or
• Tribunal arbitration ) or sub sec 4A of 10A
• During the operational period of of IDA ( government order
settlement or award prohibiting continuance )

Q 22 Right to strike is a legal right –
not a constitutional right
• Right to Strike, a Legal Right and Not a Constitutional • In All Indian Bank Employees association v I.T. [7], the Apex
Right court held that, “Even by broad interpretation of Article
19(1)(c), it cannot be held that trade unions have a
• Strike is an extreme form of collective bargaining by guaranteed right to an effective collective bargaining or
which employees collectively secede to work to impose fundamental right to strike
pressure on the management until their demands are
• Trade Union Act, 1926, legalized limited right to carry on
considered by them. Thus, right to strike is a potent
strike by registered trade unions in furtherance of the trade
weapon for the labor class to safeguard their interests disputes. Industrial Disputes Act, 1947, recognized the right
and to have their grievances redressed to strike as a mode of legitimate weapon of the workers by
• There is a guaranteed fundament alright to form imposing reasonable restrictions to ventilate their grievances.
associations or union sunder Article 19 (1) (c). This is Thus, in India, the right to strike though not raised to the
subject to reasonable restrictions in the interest of status of fundamental right, has still been granted statutory
public order, morality, sovereignty, integrity of India recognition as a legal right of social importance to the
under Clause(4) of Article 19. This right carries within working class to resolve industrial conflicts
itself various scope including all sorts of associations like • Though the right to strike is not expressly recognized as a
political parties, clubs, trade unions, etc. But this legal right under Industrial Disputes Act, 1947, strikes not
fundamental right to form trade unions should not lead resorted to in contravention of the provisions of Section 22
to the conclusion that they have a guaranteed right to and 23 of the said Act are considered as legal as enunciated
collective bargaining or to strike [6]. by Section 24 of the said Act.

Punishment and penalty for illegal
strikes and lock outs
• Sec 26 : strikes and lock outs – • Sec 30 A – closure without
starting, continuing or furthering notice
the cause – 1 month prison plus • Sec 31 - other offences
fin eor both
• Sec 27 – instigation
• Sec 28 – financial aid
• Sec 29 – breach of settlement
• Sec 30 – confidential info
disclosure

Some workers of an industry, while joining the duty
entered into an agreement with the employer that they
would not go on strike any time. What is the validity of
this agreement?
• Sec 2 (ra) refers to schedule V

• Schedule V refers to Unfair Trade
practices
• Part 1, Sl no (8) of schedule V :
• To insist upon individual workmen,
who are on a legal strike to sign a
good conduct bond, as a precondition
to allowing them to resume work is
an UTP and hence agreement is not
legal and not binding
Termination of employment of any
employee
•The termination of the employment contract may take • The ID Act provides for 3 types of termination:
place in two ways:
• Retrenchment: Under retrenchment, the employer has
•1. Either by the employee by way of resignation, or wide powers to terminate the employment of its
•2. By the employer by way of discharge or dismissal. employees for any reasons other than voluntary
•Dismissal by the Employer against the Employee : retirement, retirement upon reaching the age of
Dismissal is a punitive action taken by the employer superannuation, termination due to non-renewal of
against the employee whereas discharge takes place when contract or termination due to ill-health.
the employee is let go off by the employer due to
• Lay-off: Under lay-off, the employer is temporarily unable
inefficiency, redundancy, breach of employment contract,
to assign work to the employees on account of shortage
etc.
of raw materials, the breakdown of machinery, etc.
•Although both blue-collar employees and white-collar
employees can be dismissed and discharged, the • Closure: In case of a closure, the employer is on the verge
termination of the former is governed majorly by the of closing down his establishment and thus has to
industrial disputes act and that of the latter is governed by terminate the employment of the workmen who work
the employment contract. there.
•Termination of employment : In case of a blue-collared • The above-stated grounds are governed by the
employee, termination of employment has to take place government to a great extent and these grounds It
only on the grounds that are provided for in the ID Act. cannot be changed or modified by contracting out of itI

Q18 Lay off and retrenchment
• Lay off :
• failure or inability on the part of employer
• to provide employment to a workmen on the master rolls and not
retrenched
• when he turns for work at the specified timing
• Due to factors beyond employer control like 6 factors - shortage of
coal/power/raw material , excess inventory, breakdown of machinery
, natural calamity

Right to Compensation for lay off sec 25 C
• Establishment should have 50 or • Half wages and half of DA

more workers in the last calendar
month , on a daily average
• Max upto 45 days of full wage in
an year
• Should not be of seasonal character
• Beyond 45 days employer can
• Claimant is a Workmen
resort to retrenchment
• Not be a badly or casual worker
• Lay off should be for the right
• Should be in the master rolls
reasons and not for malafide
• Not retrenched reassons
• Completed one year of continuous
service under the same employer
Q19 Retrenchment
• Termination of employment by employer for any • Sec 25(G) process of selecting excess
reason other than disciplinary action. labour - application of “ lst in frist out” rule
• Removal of surplus labour applies if – five conditions for claiming this
• Excludes voluntary retirement, retirement , non- rule – workmen as per sec 2(s), industry as
renewal of contract, termination on ill-health per sc 2(j), belong to a particular category
• Right of retrenchment compensation and of workmen, no agreement with employer
preference at the time of re employment contrary to “last in first out “ , Indian citizen
• Retrenchment of employees who have • Sec 25 (N) – 1976 amendment for
competed one year of service is possible only if : organizations in excess of 100 workers
• One month notice or pay in lieu of notice • 3 months notice or pay in lieu
• 15 days wages per year of service up to a • Prior permission of govt
ceiling of 6 months as retrenchment
compensation • Notice tom workmen
• Inform the government • Govt hearing of workmen

Q33 Unfair Trade Practices UTP sec 25
T and penalties for UTP under 25 U
• Sec 2 (ra) defines UTP • UTP for workmen includes
• Schedule V lists UTP Added 1982 instigate illegal strike, coerce or
• UTP covers employers, unions registered or threaten non supporting workers
not and workmen during strike , stage
• 6 month prison , fine or both demonstrations at homes of
• UTP of employers includes 16 sets of actions : managers , acts of force or
restraint or interreference in workmen violence, , willful damage to
forming a TU, support or show partiality to any property – 8 sets of actions
TU, dismiss unfairly , to shift work to a
contractor to break the union, transferring listed
workmen with malafide , insist on good
conduct bond during legal strike , favoritism to
some workmen, to deprive privileges of
permanent workmen, acts of violence etc.

Q20 An employee was appointed on probation in a factory. The
probation was extended subsequently. His services was
terminated during the extended probation period without showing
grounds. Examine and explain the legality of the termination of
the services
• Since the basic idea behind keeping an employee on • The Supreme Court of India in the
probation is to give the employer an opportunity to evaluate
the employee's performance before confirming the matter of Chaitanya Prakash and
appointment, there is not even the need for an employer to
wait for the employee to complete his or her probation
Anr. Vs. H. Omkaraappa
period, before termination, if the employer is dissatisfied with [(2010)2SCC623] observed that the
the performance. It is also settled law that the employer is not
under an obligation to establish or prove the unsatisfactory termination order referring to the
performance of a probationer through an enquiry prior to
terminating his or her services. Nevertheless, it is important
unsatisfactory services of the
for employers to be aware of the legal issues surrounding probationer cannot be said to be
termination of an employee on probation.
stigmatic and there is no need to
• The termination is valid so long as it is done by a non-
stigmatic order. In this regard, it is noteworthy that the Indian follow the principles of natural
courts have consistently held that the termination of a
probationary employee is to be done by a non-stigmatic order
justice while terminating the
and principle of natural justice need not be followed while services of a probationer
passing such order. Reviewing the case law will also assist us in
understanding how the courts have interpreted 'stigmatic' and
'non-stigmatic' orders.

Q21 Explain the law relating to reference to industrial disputes to the
authorities for its settlement
• Under Sec 10 (or under sec 10 A in • Labour court reference only for

case of mutual consent) of matters in schedule 2 or
the Industrial Disputes Act 1947, the schedule 3 items for less than
appropriate Government enjoys
discretionary power to refer 100 workmen
an industrial dispute • Specially constituted Industrial
The law prescribes provisions tribunal only for matters in
for reference of five options of schedule 2 and schedule 3
a dispute to a board of settlement sec
5 , court for inquiry sec 6 , labour • Specially constituted National
court sec 7 , industrial tribunal sec 7A tribunal for units in multi states
or National tribunal sec 7B
• Awards are binding
Q26 Explain the various methods available to
prevention and settlement of Industrial Dispute
Four methods Collective bargaining
1. Collective bargaining • Process – bi partite – for settlement of wages
2. Conciliation and conditions of employment are settled –
preferred option
3. Voluntary arbitration
• Agreements enforceable under sec 18 of IDA
4. Compulsory Adjudication
• Wage , bonus , productivity and output
Seven Machinery for settlement norms are negotiated
1. Works committee sec 3(1)
• Political interference is common
2. Board of Conciliation sec 4 and 5
3. Court of enquiry sec 6 • During negotiations both parties follow a
4. Labour court sec 7 code of conduct
5. Industrial tribunal sec 7 (A) • In the end , pressure builds up for a
6. National tribunal sec 7 ( B) settlement
7. Arbitration sec 10 A

Q26 Methods of settlement of Industrial
Disputes ID after collective bargaining fails

Q26 Works committee sec 3 (1) and
Conciliation 4 , 5
Conciliation officer sec 4
Works committee
•Appointed by govton permanent or temporary basis
•Industrial undertakings with more than •Public servant under section 21 IPC
100 workmen . •Bridge and mediator
•Quasi-judicial powers of a civil court
•Employer shall have a WC with equal •Can enter any premises for resolving issues with notice
representatives •Investigate and induce parties to a settlement
•Workmen representatives will be as •Case : state of Bombay vs KP Krishnan 1960
•Orders are not binding
per prescribed procedure •Extension of collective bargaining
•To promote measures for securing •Cannot enforce attendance of parties
•Since not a judicial authority , writ of centori cannot be
amity and good relations , take steps to issued
resolve day to day issues. •OUTCOME Within 14 days of commencement of
conciliation proceedings report of success or failure should
•Decisions of WC are Not binding and be sent to govt. with memorandum of settlement or a
only recommendatory report on reasons for failure

Q28 Board of conciliation sec 5 and
court of Inquiry sec 6
• Board of ConciIliation • Court of Inquiry sec 6
• Appointed by govt
• Extension of conciliation officers work
• Govt appointed
• Chairman plus 2/4 members with equal representation • One or more
• Duty to investigate and induce parties to settle independent persons
• Judicial capacity
• Orders recommendatory and not binding
• Fact finding body
• Send a report with memorandum of settlement or • 6 months report
report with failure reasons to govt
• Not met with remarkable success due to lack of • Recommendatory report
adequate personnel, improper training . Low status of
conciliation officers , frequent transfers of officers etc
• No legal bar on strike or
• Bar on workmen or employer to declare a strike or lock lock out during
out proceeding
Q 32 Voluntary arbitration
• Sec 10 A confers powers on • Award is a binding decision
parties to enter into a arbitration • Agreement to be in prescribed
agreement. form and name the arbitrators
• Arbitration is a process of
settlement of a dispute outside
the court
• Arbitrator is a mediator
appointed by both parties with
whom they have faith, to
suggest an amiable solution

Q29 , Q30 Compulsory Adjudication Labour courts
• 3 kinds of courts • Schedule 2 matters are :

• Labour court sec 7 , Industrial Tribunal sec 7A, 1. Orders passed by employer under
National Industrial Tribunal sec 7B standing orders
Labour court proceedings : 2. Interpretation of standing orders
• Proceedings begin by govt reference under sec
3. Discharge, dismissal including
10 or mutual consent under sec 10 A
reinstatement, grant of relief to workmen
• Enforceable award
4. Withdrawal of customary concession
• Once referred, cannot be taken back by parties
• Only matters in schedule 2
5. Illegality of strike or lock out
• Judge of high court or judge/additional District 6. Matters OTHER THAN in the schedule 3
judge with over 3 years experience, judicial 7. any other function assigned under IDA
officer with 7 years experience including schedule 3 items of less 100
• Same powers of a civil court employee units

Q31 Industrial Tribunals and
National Industrial Tribunals
Industrial Tribunals • Third schedule 11 items:
• Govt to constitute for Each case or limited time 1. Wages
• Covers second and third schedule items 2. Hours of work
• HC judge or district judge qualifications for presiding 3. Leave with wages
officer less than 65 years
4. Compensatory and other allowances
National Industrial Tribunal 5. Compensatory and other allowances
• Disputes of national importance 6. Bonus, profit sharing
• Units with multi state operations
7. Shift working
• Judge of HC only allowed less than 65 years
8. Classification by grades
• Govt to constitute for Each case or limited time
9. Discipline rationalization
Duties of Tribunals sec 15 10. Retrenchment and closure
Hold adjudication proceedings expeditiously 11. Any other matter referred by govt under sec 10
(1) (d)

Q29 Powers of courts sec 30 to sec
37
• Declare as an Unfair Trade Practice • Binding orders sec 35
UTP and direct cease and desist of
UTP and declare compensation
and derecognize unions indulging
in UTP
• Pass interim order, review interim
order, pass final order
• Seek evidence , attendance ,
examine witnesses
• Ex- parte orders –pass and review

Industrial Employment
(Standing Orders) Act
1946
Objectives of the Law…
• To have uniform standing orders in respect to workers, factories, and
working relationship
• To ensure that the terms and conditions of the employment are known to
the employee and thus to minimise exploitation of the workers
• To promote industrial peace and harmony by promoting fair industrial
practices
• The modern law of industrial employment requires that the terms of
employment, conditions of service and rules of discipline should not only be
written and known to the employees concerned but they should also be
reasonable, fair and uniform. (Labour Investigation Committee Report
(Main Report), 1946, 109)
Nature of the standing orders
An analysis of the decided cases relating to the nature of standing order
reveals that different shades of opinion have emerged on the subject
namely, it is:
(i) Statutory in nature,
(ii) A special kind of contract,
(iii) An ‘award’, and
(iv) A form of delegated legislation
A. Statutory in Character
In Tata Chemicals Ltd vs Kailash C Adhvaryar (1965), a question directly

arose before the Gujarat High Court whether a contract can override the
terms of the standing orders.
In Workmen of Dewan Tea Estate vs Their management AIR 1964 SC. In

this case, a question arose whether any provision of the Act could have
overridden the provisions of the standing orders. The Court held that the
standing orders could only be overridden by specific provisions of the
Act, which may have been introduced after the standing order was
certified
B. Special Kind of Contract
• The other view is that standing orders are a special kind of contract
• This view was expressed in Buckingham and Carnatic Co. vs Venkatayaga AIR
1964 SC. It was observed in this case that the certified standing orders represent
the relevant terms and conditions of service in a statutory form and they are
binding on the parties at least as much, if not more, as private contract
embodying similar terms and conditions of service
• C Standing Orders: If ‘Award’ It is sometimes said that the nature of standing
orders is like an ‘award’. This is argued on the basis of the provisions of Section 4
(b) which says that ‘It shall be the function of the certifying officer…. to adjudicate
upon the fairness and reasonableness of the provisions of any standing orders’
and also on the basis of judicial decision [Indian Air Gases Mazdoor Sangh vs
Indian Air Gases Ltd, (1977) 2 LLJ 503, 505. (Allahabad)] which rules that the
function of the certifying officer is quasi-judicial. However, standing orders
cannot be an ‘award’ under Section 2(b) of the Industrial Disputes Act, 1947
D. Standing Orders: If Form of
Delegated Legislation
• Sometimes, it is also argued that standing orders under IESOA is a
delegated legislation. It is argued on the basis of the provision that
standing orders should contain every matter set out in the Schedule
and it should as far as is practicable, conform to the Model Standing
Orders.
• In RSRTC vs Deen Dayal Sharma 2010, the Supreme Court held that
standing orders are not in the nature of delegated/ subordinate
legislation
Content of the Schedule
• Rules relating to working in a factory, which are mentioned in the schedule to the Act
[Section 2(g)].
• The matters referred to in the Schedule are:
• Classification of workmen, e.g., whether permanent, temporary, apprentices, probationers, or badlis
• Manner of intimating to workmen periods and hours of work, holidays, pay-days and wage rates Shift
working
• Shift working
• Attendance and late coming
• Conditions of procedure in applying for, and the authority which may grant leave and holidays
• Requirements to enter premises by certain gates and liability to search
• Closing and re-opening of sections of the industrial establishment, and temporary stoppages of work
and the rights and liabilities of the employer and workmen arising therefrom
• Termination of employment, and the notice thereof to be given by employer and workmen. (U P
Electricity Supply Co. vs TN Chatterjee AIR 1972 SC 1201)
Content of the Schedule (Contd….)
• Suspension or dismissal for misconduct, and acts or omissions which constitute
misconduct. (New Victoriya Mills vs Labour Court AIR 1970 Orissa 126
• Means of redress for workmen against unfair treatment or wrongful exactions by
the employer or his agents or servants
• Any other matter which may be prescribed. (Rohtak & Hissar District Electric
Supply Co. Ltd vs State of UP, AIR 1966 SC 1471 – 1477)
• Matters not Covered by the Schedule Whether it is permissible for the employers
to frame standing orders in respect of the matters not provided in the Schedule
of the Act?
• UP Electric Supply Co. Ltd vs TN Chatterjee (1972) 2 LLJ 9
• Rohatak and Hissar Electricity Supply Co vs UP AIR 1966 SC 1471
Industrial Establishments Covered
• The Act applies to every industrial establishment wherein 100 or
more workmen are employed or were employed on any day of the
preceding 12 months
• Several states have extended the application of the Act to
establishments employing 50 or more persons
• The (Second) National Commission on Labour has recommended that
establishments employing 20 or more workers should have standing
orders or regulations
Industrial Establishments Covered
• Whether the fall in the number of workmen below 100 at any time
would make the Act inapplicable?
• Balakrishna Pillai vs Anant Engineering Works Pvt Ltd (1975) 2 LLJ 391
I. The provision of Section 1 (3) related to initial application of the Act
as the condition precedent viz., the number of workmen
II. The Act is a beneficial social legislation enacted for the purpose of
defining with certainty the terms of contract of employment and
thus guaranteeing the workmen their conditions of services
III. An interpretation which promotes the objects and purposes of the
Act will have to be preferred to one which will only defeat the same
Establishments Excluded
• Sec 1(4) example: the Bombay Industrial Relation Act, 1946, the
Madhya Pradesh Industrial Employment (Standing Order) Act, 1961
• Section 13-B (the Fundamental and Supplementary Rules, Civil
Services (Classification, Control and Appeal) Rules, Civil Services
(Temporary Service) Rules, Revised Leave Rules, etc)
• Section 14: Governments Power to Exempt
Coverage…Definitions
• The Act is applicable to all industrial • Who is a certifying officer?
establishments’ employing 100 or more
workmen [Section 1(3)] • A labour commissioner or a
• Who is a workman? regional labour commissioner
• Workman’ has meaning assigned to it under and includes other officer
section 2(s) of Industrial Disputes Act.
[section 2(i)]. Thus, workman’ includes
appointed to perform the
skilled, unskilled, manual or clerical work. functions of a certifying officer.
• However, workman’ does not include (sec.2(c ))
employees engaged in managerial or
administrative capacity or supervisory
capacity. Workman’ does not include
workers subject to Army Act, Navy Act or Air
Force Act or to police or prison services
Procedure for certification of
standing orders….
• Every employer covered under the Act has to • Standing order should be displayed in
prepare Standing Orders’, covering the matters English and local language on special
required in the Standing Orders. Five copies of
these should be sent to Certifying Officer for
notice boards at or near entrance of the
approval. [section 3(1)]. Certifying Officer establishment. [section 9].
means Labour Commissioner and any officer Modifications of standing Order shall be
appointed by government to be Certifying done by following similar procedure
Officer [section 2 (c)] [section 10]
• The Certifying Officer will inform the Union • Standing orders certified and their
and workmen and hear their objections. After
that, he will certify the Standing Orders’ for the authenticated copies are sent to
industrial establishment. [section 5]. Till employer and workers and on the expiry
standing orders are certified, Model standing of 30 days, they will be applicable. If an
Order’ prepared by government will appeal has been made – then after 7
automatically apply. [section 12A] days of the orders the standing orders
(as modified) will be applicable
Standing Orders to be most
important…
• Once the Standing Orders’ are certified, they supersede any term and condition
of employment, contained int the appointment letter. If there is inconsistency
between standing Order’ and Appointment Letter’, the provisions of Standing
Order’ prevail – Eicher Good earth Ltd. V. R K Soni – (1993) XXIV LLR 524 = 1993
LLR 524 (Raj HC) * Printers House vs State of Haryana 1982 II LLN 327
• Standing orders are binding on employer and employee. These are statutorily
imposed conditions of service. However, they are not statutory provisions
themselves (meaning that the standing Orders’ even when approved, do not
become law’ in the sense in which Rules and Notifications issued under
delegated legislation become after they are published as prescribed) –
Rajasthan SRTC vs Krishna Kant – AIR 1995 SC 1715
Misconduct as per Standing
Orders…
• A workman can be punished only if the act committed by him is a
misconduct’ as defined under the Standing Orders. The Model
Standing Orders’ contain such acts like insubordination,
disobedience, fraud, dishonesty, damage to employer’s property,
taking bribe, habitual absence or habitual late attendance, riotous
behaviour, habitual neglect of work, strike in contravention of rules
etc. The Certified Standing Orders’ may cover other acts as
misconduct
Protected Workmen under IDA
•
Explanation.--For the purposes of this sub- • Rights of Protected Workmen`
section, a "protected workman", in relation to an • Section 33 (3) of Industrial Disputes Act, 1947, provides that
during the pendency of any conciliation procedure before a
establishment, means a workman who, being a conciliation officer or a Board or of any proceeding before an
member of the executive or other office bearer] arbitrator or a Labour Court or Tribunal or National Tribunal in
of a registered trade union connected with the respect of an industrial dispute, the employer should not
establishment, is recognised as such in initiate any action against any protected workman concerned
in such dispute-
accordance with rules made in this behalf.
• (a) by altering, to the prejudice of such protected workman,
• RulRule 61(2) makes it obligatory on the part of the conditions of service applicable to him immediately
employer to recognise such number of workers before the commencement of such proceedings; or
as provided u/s 33 (4) of the Industrial Disputes • (b) by discharging or punishing, whether by dismissal or
Act, 1947, as ‘protected’ for a period of 12 otherwise, such protected workman, save with the express
permission in writing of the authority before which the
months, within fifteen days of receipt of the proceeding is pending.
proposal from the union. • If any employer wants to take action against a protected
• protected workmen shall be one per cent of the workman during the pendency of a conciliation proceeding,
total number of workmen employed therein before the Conciliation Officer, Board, Arbitrators, Labour
Court, Tribunal or National Tribunal, he should get express
subject to a minimum number of five protected permission from the conciliation Officer, Labour Court or
workmen and a maximum number of one Tribunal, as the case may be, by applying in form J.
hundred protected workmen.
Protected Workmen facing misconduct
proceedings
• The Kerala High Court in an • However, management is entitled to decline
recognition as protected workmen to a person
interesting dispute wherein nominated by the union, if any disciplinary
proceeding is pending against such workman. Union
a Workman who was certainly cannot exercise their power under Rule
61(1) to give immunity to an employee against whom
already facing Disciplinary disciplinary proceedings initiated by the management
Action and was facing are pending, by nominating his name for recognition
as protected workman.”
some proceedings for • Therefore, according the new interpretation, an office
misconduct was nominated bearer of the Union facing disciplinary proceedings
is not entitled to be nominated by the Union for
by the Union for recognition as protected workman and the
management is absolutely within their powers to
recognizing as a 'Protected decline recognition to such an office-bearer under
sub-rule (2) of Rule 61.
Workman’.
Labour Law Law

Labour 1 Semester
1 Semesterexam
examnotes
notes 72 72
Management rights of action during
pendency of proceedings

Subsistence Allowance to the
Worker…
• Where a workman is suspended by employer pending investigation or
enquiry into complaints or charges of misconduct against him, the
workman shall be paid subsistence allowance equal to 50% of wages
for first 90 days of suspension and 75% of wages for remaining period
till completion of disciplinary proceedings. [section 10A(1)]. Wages
has same meaning as under section 2(rr) of Industrial Disputes Act
[section 2(i)]
There is an agreement between the employer and
workmen of an industrial establishment that there
shall not be prescribed standing orders for the
establishment. Is such agreement valid?
• It is mandatory for every
employer covered under the
Industrial Employment (Standing
Orders) Act has to get standing
orders certified by submitting
five draft copies of the standing
orders to the certifying officer
• Hence agreement is invalid

The retrenchment compensation was only paid to the
regular employers. Can you let me know whether
part time workers are entitled to it ?
• A closer analysis of the definition of 'workman' • Accordingly, the award of the Industrial
and 'continuous service' under the Disputes Act Tribunal was quashed and reinstatement
would reveal that there is no mention of the
number of working hours per day as a qualifying
of the workman with full back wages was
criterion to fall under either of the respective ordered leaving the matter of
definitions. regularization of service to be considered
• Perhaps one of the most important judicial by the employer in accordance with law.
precedent leading to a determining decision on This judgment was further confirmed in
this point is the case of Divisional Manager, New appeal by the Division Bench of the High
India Assurance Co. Ltd. v. A. Sankaralinga; AIR Court. Subsequently, the Hon'ble
2009 SC 309. In the said case the Madras High Supreme Court of India upheld the
Court relied on the definitions of 'workman' and
'continuous service' under Section 2(s) and judgment of Madras High Court and
Section 25B of the Act respectively to hold that concluded that a workman working even
these two definitions were not restricted in on a part time basis would be entitled to
applicability to only full time employees as the the benefit of Section 25-F of the Dispute
all embracing tenor of the definition took within Act.
its ambit part time employees as well.

D. Conformity with the Model
Standing Orders
• Where model standing orders have been prescribed, that draft
submitted by the employers must be in conformity with the model
standing orders provided under Section 15 (2) (b) ‘as far as it is
practicable
• Conformity cannot be equated with identity (substance)
Constitutional Validity of Automatic
Termination of Service under
Standing Orders
• In D K Yadav vs J M A Industries Ltd (1993), the Supreme Court held
that the principles of natural justice are mandates of Articles 14 and
21. In view of this, the Court rules that the principles of natural
justice must be read wherever the standing orders provide for
automatic termination of service for absence without leave
• In Sudhir Chandra Sarkar vs TISCO (1997) too, it was held that
certified standing orders would be subject to the test of arbitrariness
under Article 14 of the Constitution
Domestic enquiry as per IESOA
• Domestic enquiry steps as the
Industrial Establishment
(Standing Orders) Act and Rules,
1946
• Principles of natural justice has
to be followed
• If suspended during enquiry,
subsistence allowance has to be
paid as pe the law

Scope of Section 10-A (1) – right to
subsistence allowance
• Bibhu Deb Roy vs JM Savery 1993
• The grievance of the plaintiff was that he was under suspension
although there was no provision in the local staff manual of the
company for subsistence allowance permissible under Section10-A
• The Gauhati High Court held that (i) The payment of subsistence
allowance follows from suspension and an employee cannot be
deprived of this right; an (ii) For ends of justice, the principles laid
down under Section 10-A of the Industrial Employment (Standing
Orders)Act, 1946 should be followed in quantifying the payment of
the amount of subsistence allowance per month
Scope of Section 10-A (1)
• May & Baker Limited vs Kishore Jain Kishan Dass Icchaporie 1991
• The workman was charge sheeted for certain misconduct and was
suspended from service
• Certified standing orders – Model standing orders, as amended under
the Bombay Industrial Employment (Standing Orders) Rules, 1959
• MSO is not comes in “not provisions ‘under any other”
Remedies for Enforcement of Rights
and Liabilities created under the
IESOA
Civil Remedy under the IESOA
• Remedy for Enforcement of Rights and Liabilities Created under the
Industrial Disputes Act, 1947 [sec.791) of IDA, Schedule II, Sec 10]
• Under the Civil Procedure Code: Rajasthan SRTC vs Mohar Singh (2008);
RSRTC vs Deen Dayal Sharma (2010)]
Time-Limit for Completion of Domestic Inquiry
• There is no provision in the IESOA fixing a time-limit for completion of
disciplinary proceeding by the employer
• However, Section 75(1) of Industrial Relation Bill, 1978 for the first time
provided regarding this
Powers of the Labour Court under
Section 13A
• Does Section 13-A of the IESOA provide a remedy for the enforcement of
rights and liabilities created by the standing orders certified under the Act?
• The Gujarat High Court has held that ‘there are no words in Section ‘13-A
which empower the labour obligations created under the standing orders.
[(2009) 2 SCC 50]
• The Rajasthan [Mahalaxmi Mills Co. Ltd vs Labour Court, (1965)] and
Bombay High Court [Chipping and Painting Employers’ Association vs AT
Zambre, AIR 1969 Bombay 274] answered it in affirmative,
• The Calcutta’ High Court [S.K.Mukherjee vs Calcutta Electric Supply Co. Ltd
(1969)] took a contrary view
Power of High courts over Labour
Courts
Ashok Leyland Ltd, Madras vs Presiding Officer, Second Additional Labour Court, Madras
2003
• The management dismissed a workman, who was a checker int the store of the company for
fraudulently acknowledging delivery of challans without actually receiving the articles
amounting to Rs.1,15,500/-after holding an inquiry
• Similar charges were also levelled against the receipt clerk but he was not found guilty int the
inquiry hence no action was taken against him
• The workman raised an industrial dispute. The labour court directed reinstatement of the
employee without back wages but with continuity of service
• Aggrieved by the same, the management filed a writ petition in the high court and the
employee also filed a petition
• The Court, accordingly, set aside the order of the labour court and sustained the order of
dismissal passed by management
Employee rights on termination of
service by dismissal
Right to receive a severance pay Right to sue in case of illegal or unlawful termination
• A severance pay is a payment received by the employee as a result of the • An Employee can plead illegal termination in the following
termination of his employment contract with the employer. This includes
the payment of the following:
cases
• Salary in lieu of notice when notice is not given; • Violation of the state’s anti-discriminatory laws.
• The salary for days worked which remain unpaid; • Violation of employment or labour laws in India.
• Encashment of unused paid leave; • If termination is viewed as a form of sexual harassment.
• Payment of gratuity to an employee who has worked for more than five • If termination is understood as a retaliation against the earlier
years as provided for in the Gratuity Act, 1972;
act of the employee against the employer. For example, an
• Payment of 50% of the employee’s wages for up to 45 days where an employee had filed a complaint in the past against the employer.
employee employed for more than 1 year is laid off;
• Payment of compensation amounting to 15 days average pay for every Consequence of case filed :
year of continuous service;
In case of a suit filed against termination of employment, the
• Payment of bonus for those employees who worked for at least 30 days in courts generally award monetary compensation and rarely
a financial year and earned up to Rs. 10,000 under the Payment of Bonus
Act of 1965; interfere with the actual decision of the employer by reinstating
the employee. However, reinstatement of employee happens
• Any other payment agreed to be paid on termination under the company
policy. most commonly in case of blue-collar employees whereby the
employer violates the express provisions of the labour laws.
• The above-stated payment is more or less strictly applicable to a blue-collar
employee and may differ for a white-collar employee depending upon his
company’s policy.

Q On the ground of stealing some property of the employer
by the workman and as the stolen property was recovered by
the police from the house of the workman and was convicted
in the court, and he was dismissed from undertaking. His
dismissal was challenged by the worker on the ground that
no domestic enquiry was conduced Decide.
• Questions: • Dn D K Yadav vs J M A Industries Ltd
Is this a misconduct as per the (1993), the Supreme Court held that
standing orders ? the principles of natural justice are
To be Determined by the certified mandates of Articles 14 and 21. In
standing orders. Likely to be. view of this, the Court rules that the
Is dismissal the appropriate principles of natural justice must be
punishment ? read wherever the standing orders
To be determined by case laws. Likely to provide for automatic termination of
be service
• Does a conviction by a court for a
the same offence qualify for waiver • Hence employer faces the possibility
of Domestic enquiry and automatic of payment of notice period pay and
dismissal ? ensuring severance pay as per law
Q X a workman was removed from the
employment without being served any notice. X
disputed this as unfair dismissal. Discuss
• The key words are “ workmen”, “dismissal “, “dispute “ and “ unfair” • In D K Yadav vs J M A Industries Ltd (1993), the Supreme
and it appears to be an individual dispute Court held that the principles of natural justice are
• If the undertaking is an “industrial undertaking “ as defined as per IDA mandates of Articles 14 and 21. In view of this, the Court
then the dismissal has to be governed by IDA rules that the principles of natural justice must be read
• The Act applies to every industrial establishment wherein 100 or more wherever the standing orders provide for automatic
workmen are employed or were employed on any day of the preceding termination of service
12 months Several states have extended the application of the Act to
establishments employing 50 or more persons • Employee has a basic rights – right to adoption of
• If this unit comes under the purview of Industrial establishment , then principles of natural justice – right to know the grounds of
the Dismissal is a punitive action taken by the employer against the dismissal, right to given a notice and opportunity to defend
employee only on the grounds specified in the standing order himself and a “proportionate “ punishment if the
• Standing Orders’ contain such acts like insubordination, disobedience, misconduct is established
fraud, dishonesty, damage to employer’s property, taking bribe,
habitual absence or habitual late attendance, riotous behaviour, • When the employer wishes to terminate the employment
habitual neglect of work, strike in contravention of rules etc. ss of the employee, the employee has a right to receive 30-90
misconducts. days of notice of the same or salary in lieu of the notice.
• Rights of the employees are implied by way of the procedure to be Notice must clearly mention the reason for termination of
followed by the employer in case of termination of employment of an the employment and show cause as to why he should not
employee. The procedure that is laid down has certain requirements to be dismissed or discharged. And the arrangement made for
be fulfilled by the employer, which the employee can claim as a right
since its non-fulfilment will entitle him to sue the employer in the court the fulfilment of the remaining rights of the employee
of law. post-termination.

Q An employer has imposed the punishment of
dismissal on the employee, without giving him an
opportunity of being heard, on the ground of
unauthorized absence for a long time. What
remedy is available to the employee against such
•action? Discuss
Key words are : employee , punishment , dismissal for unauthorized absence, without
opportunity of being heard
• If the employee is a blue collared workman as per IDA , he is governed by IDA and
therefore by the standing orders and if he is not covered by IDA , he is governed by the
employment contract
• In D K Yadav vs J M A Industries Ltd (1993), the Supreme Court held that the principles
of natural justice are mandates of Articles 14 and 21. In view of this, the Court rules
that the principles of natural justice must be read wherever the standing orders provide
for automatic termination of service due to long unauthorised absence without leave
• Principles of natural justice are mandates of Articles 14 and 21. right to know the
grounds of dismissal, right to given a notice and opportunity to defend himself and a
“proportionate “ punishment if the misconduct is established

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Labour law notes

Labour Law 1 Semester exam notes 1

• To improve industrial relations and minimize industrial disputes

Labour Law 1 Semester exam notes 2

Labour Law 1 Semester exam notes 3

Labour Law 1 Semester exam notes 4

• Social security legislations to • Welfare legislations to promote

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• Trade Union Act (TUA) 1926 • Excludes partner agreements

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• Not compulsory • Info required includes :

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• Immune from criminal Conspiracy • Sec 17 provides immunity from

Labour Law 1 Semester exam notes 12

• Rights: • Duties and liabilities :

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• Registrar if satisfied that the dissolution is as

Labour Law 1 Semester exam notes 16

Recognition is different from Registration Rights of Recognized TU

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Purpose • Applies only to defined

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• Arbitration award : Binding on parties to • Duration of operation of settlement : from

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Three elements of any industrial dispute are :

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• Sec 2 (ra) refers to schedule V

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• Establishment should have 50 or • Half wages and half of DA

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• Under Sec 10 (or under sec 10 A in • Labour court reference only for

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• 3 kinds of courts • Schedule 2 matters are :

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Labour Law 1 Semester exam notes 55

In Tata Chemicals Ltd vs Kailash C Adhvaryar (1965), a question directly

In Workmen of Dewan Tea Estate vs Their management AIR 1964 SC. In

Labour Law Law