Module - 3

Definition- Industrial Disputes Act 1947,sec 2 (k) Industrial dispute means any dispute or difference between (essentials prerequisites for a dispute)
Employers

and employers Employers and workmen Workmen and workmen.

Which

is connected with the employment / non employment of the terms of employment or with the conditions of the labor of any person but not supervisor or manager or Drawing wages 1600 /-pm or Relationship between employer & employee must exist.

Industry
As per section 2 (J) of industrial disputes act 1947, Industry mean any systematic activity carried on by cooperation between an employ and his work man for the production supply or distribution of goods and services with a view of satisfy human wants or needs.

Workman [(2) s]
All employees in an estt are not workmen under industrial dispute act. Employees doing any manual , skilled , unskilled, technical, operational ,work in respective of their salary. Sec 2 (s) of Act- workmen means any person employed in an industry to do any skilled or unskilled manual, supervisory, technical or clerical work for hire or reward. The terms of employment may be either express or implied. A workman has been dismissed, discharged or retrenchment comes within the definition of the term workman if there is any disputes relating to such dismissal, discharge or retrenchment.

Who all dont come under workman

Person subject to Army Act 1950 or Navy Act 1934 or Air Force Act 1950. Persons employed in police service. Employed for managerial or administrative capacity. Employed in supervisory capacity

Objective of the act

1)To secure industrial peace a) by preventing and settling industrial disputes between the employers and workmen. b) by securing harmony and good relations ,through an internal works committee, c) by promoting good relations, through an external 2) To ameliorate the condition of workmen in industry by providing job security. 3) To provide Suitable machinery for investigation and settlement of industrial dispute between 3 parties. 4) To Prevent illegal strikes & lockouts. 5) To provide relief to workmen lay offs, retrenchment etc

Causes of Industrial Disputes

A.

Economic causes
terms and conditions of employment Wages and other benefits

C. Organizational Causes

Non recognition of TU, multiple TU, lack of proper communication sys. Unfair practices

B.

Psychological causes

D. Physical causes
poor working conditions improper plant and workstations, worn out P& M, technological issues. Lack of adequate maintenance

Poor relation with peers or superiors Demand for self respect, clash of personalities.

Causes of Industrial Disputes

Industrial Factors

Managements attitude
Government machinery labor laws implementation , irrelevance of certain provisions

Other causes - affiliation of TU, political instability, centre state relations.

(A)Industrial Factors : Under this category, some of the causes of dispute may be : (i) An industrial matter relating to employment, work, wages, hours of work, privileges, the rights and obligations of employees and employers, terms and conditions of employment including matters pertaining to : (a) dismissal or non-employment of any person (b) Registered agreement , settlement or award : and (c ) demarcation (establishing limits) of the functions of an employee (ii) An industrial matter in which both the parties are directly and substantially interested. (iii) disputes arising out of unemployment, inflation, change in the attitude of employers and rivalry among unions.

(II) Management Attitude Towards Labor : Management s unwillingness to talk over any dispute with their employees. (ii) Managements unwillingness to recognize a particular trade union , delegating enough authority to the representatives, etc. (iii) unwillingness to negotiation and settlement of disputes. (iv) Managements insistence to take care of recruitments, promotion etc without consulting the concerned employees (v) Managements unwillingness to provide services and benefits to its employee's (i)

(III) Government Machinery : (a) Though there are number of enactments for promotion of harmonious relations, it is ineffective and unsatisfactory due to various reasons like their irrelevancy in the context of the challenges of present industrial climate /culture, incapability of understanding and answering imperatives of development, improper and inadequate implementation by many employers. The governments conciliation machinery has settled a very negligible number of disputes .

(b)

(IV) Other Causes : (i) (ii) (iii) Affiliation of the trade unions with a political party, where the latter may initiate the trade unions to conduct strikes, lockouts , gheraos etc. Political instability, centre- state relations, sometimes result into industrial conflict. Other potential factors like corruption in industry and public life, easy money, etc can also result into industrial disputes.

Industrial Disputes Strikes Lockouts

Primary Strikes

Secondary Strikes

Stayaway Strikes

Sit down Stay-in Tool Down or Pen Down Strikes

Go Slow

Work To Rule

Token or Protest Strikes

Lighten ing or CatCall strikes

Picket ing & Boyco tt

Gher ao

Hunger Strikes

Strikes :
Strikes are a result of more fundamental maladjustments, injustices and economic disturbances. Strike is a temporary termination of work by a group of employees in order to express grievances or to enforce a demand concerning changes in work conditions. Strikes are divided into three types .They are Primary strikes, secondary strikes and other strikes.

I.

Primary strikes are generally against the employer with whom the dispute exists. They are :

(i) Stay Away Strikes: In this strike workmen stay away from the work place. They organize rallies, demonstrations, etc. (ii) Stay-in or sit Down Strikes : In this strike, workmen come to the place , they stay at the work place but they dont work.

(iii) Tools Down, Pen Down Strike : Here the strikers lay down their tools in case of factory workers , office workers lay down their pens,

(iv) Token or Protest Strikes : It is of very short duration and is in nature of signal for the danger ahead. In this strike workers do not work for an hour or a day.

(v) Lightening or Wild cat strike : In this strike, the strike is done without any prior notice or with a shortest notice.
(vi) Go Slow : In this strike, the workers intentionally reduce the speed of work. (vii) Work to rule : In this strike, the strikers undertake the work according to rules or job description. (viii) Picketing : It is an act of protesting by the workmen in front of the premises of the employer

(ix) Boycott: It aims at disrupting the normal functioning of the enterprise.

(x) Gherao : It is a physical blockade of a target either by encirclement, intended to block from and to a particular office, workshop etc.
(xi) Hunger Strike : This type of strike is resorted to either by the leaders of the union or by some workers all at a time for a limited period or up to the period of settlement of disputes.

II Secondary Strike :
Secondary strikes are against a third party. These strikes are sympathetic strikes. Secondary action (also known as a secondary boycott or sympathy strike) is industrial action by a trade union in support of a strike initiated by workers in another, separate enterprise. The term "secondary action" is intended to be distinct from a trade dispute with a worker's direct employer, and so may be used to refer to a dispute with the employer's parent company (holding company), its suppliers, financiers, contracting parties, or any other employer in another industry.

Lockouts:

Lockout means the closing of a place of business of employment or the suspension of work, or the refusal by the employer to continue to employ any number of persons employed by him. However, termination of employment or retrenchment, and prohibiting an employee are not lockouts.

PREVENTIVE MEASURES OF INDUSTRIAL DISPUTES

Labor Welfare Officer Tripartite and Bipartite Bodies Standing Orders Grievance Procedure

Collective Strong Bargaining Trade Unions

Labor CoPartnership and Profit sharing

Joint Consultations

1]

Labor Welfare Officer :

Section 49 (1) and (2) of the Factories Act, 1948 specifies that: every factory wherein 500 or more workers are ordinarily employed at least one welfare Officer must be appointed, where the number of workers are in excess of 2500,the assistant and / or additional welfare officers are required to be appointed to assist the Welfare Officer.

The functions of Labor Welfare Officer includes : (I) Labor Welfare Functions :Advice and assistance in implementing legislative and non-legislative provisions relating to : (a)Health &Safety (b)Sanitation & Cleanliness (c)Welfare Amenities (d) Housing (e)Implementation of welfare Acts. (f)Working conditions (g) Recreation (h) Workers Education (i) Formation of welfare committees

(II) Labor Administration Functions :These may cover: (a)Organizational Discipline (b)Safety & Medical administration (c)Wage& salary administration (d)Administration of Legislation covering Industrial Relations

(III) Labor Relations Functions: These may consist of : (a)Administration of standing orders. (b)Settlement of Grievances. (c)Settlement of Disputes through statutory procedures. (d)Trade unions& union management relations (e)Steps to increase productivity efficiency.

2]Tripartite and Bipartite Bodies : Industrial relations in India have been shaped largely by the policies and practices of Tripartite and Bipartite bodies. The purpose of consultative machinery is to bring the partners together for mutual settlement of differences in spirit of cooperation and goodwill. Bipartite consultative machinery comprises two parties i.e. employees and employer, the important bipartite body is works committees.

3] Standing Orders : It was made obligatory that standing orders should govern the conditions of employment under the Industrial Employment (Standing Orders ) Act of 1946. The Standing Orders regulate the conditions of employment from the stage of entry to the stage of exit. 4] Grievance Procedure : 5] Collective Bargaining : 6] Strong Trade unions : 7] Labor Co-partnership and profit sharing : 8] Joint Consultation :

Consequences of ID

For Employers Decrease in output Increase in cost of prod. Fall in sales and fall in profits In long run loss of goodwill

For Employees Loss of income Threat Loss of employment Psychological and physical consequences of forced idleness.

For the Nation Cause wastage of national resources. An adverse effect on the national productivity, national income

Types of Industrial Disputes

1. Disputes of interest
Determination of new wage level and other employment conditions

2. Disputes of rights
Grievance disputes retrenchment, dismissal, working time etc.

3. Disputes over unfair labour practices

Discrimination of mgmt against workers on the grounds of TU.

4. Recognition dispute
Refuse to recognize TU.

Settlement of Disputes:

Collective Bargaining Code of Discipline

Dispute Settlement

Arbitration

Conciliation

Grievance Procedure Standing Order

Adjudication Consultative Machinery

Collective Bargaining: It helps for settlement of issues and prevention of industrial disputes. It occurs when representatives of a labor union meet management representatives to determine employees wages and benefits, to create or revise work rules and to resolve disputes or violations of the labor contract. The bargaining is collective in the sense that the chosen representative of the employees (i.e. union ) acts as a bargaining agent for all the employees in carrying out negotiations and dealings with the management.

Code of Discipline : It defines duties and responsibilities of employers and workers. The objectives of the code are: 1. To ensure that employers and employees recognize each others rights and obligations. 2. To promote consecutive co-operation between parties concerned at all levels. 3. To eliminate all forms of coercion (force), pressure and violence in IR. 4. To avoid work stoppages. 5. To facilitate the growth of trade unions. 6. To maintain discipline in the industry.

Grievance Procedure : This is another method of resolving disputes. Grievance is any discontent or dissatisfaction, arising out of employment relationship, which an employee thinks , believes or feels to be unfair, unjust or inequitable. A grievance procedure is a formal process which is preliminary to arbitration, which enables the parties involved to attempt to resolve their differences in a peaceful and orderly manner. When the grievance redressal machinery works effectively, it satisfactorily resolve most of the disputes between labor and management.

NS- Not satisfied

NS

Voluntary Arbitration Committee of union & Management Representatives

NS

VI stage within7 days V stage Appeal to Management for revision IV stage communicates the decision within 7 days

Manager
NS

Grievance Committee
NS

Departmental Representatives

Head of the department

III stage conveys verbally

NS
Department Representatives Supervisor

NS
Foreman

II stage decision within 3days I stage answer to be given within 48 hrs

Grievant Employee

Arbitration : Arbitration is a procedure in which a neutral third party studies the bargaining situation, listens to both the parties, gathers information and then makes recommendations that are binding on both the parties. Arbitration is effective means of resolving disputes because it is : 1. Established by the parties themselves and the decision is acceptable to them. 2. Relatively expeditious when compared to courts and tribunals.

Process of Arbitration : 1) The labor union generally takes initiative to go for arbitration. when the union decides, it notifies the management. 2) The union & the management select the potential arbitrator by carefully studying the previous decisions given by the particular arbitrator, to detect any biases. 3) After the arbitrator is selected, the time & place for hearing will be determined. 4) Each side represents its case at the hearing. 5) Each party has to submit formal written statements.

1) Witness , cross-examination, transcripts & legal

counsel may be used. 2) After hearing, the arbitrator studies the materials submitted and reaches the decision within 30 60 days. 3) The decision given usually is a written opinion mentioning the reasons. 4) The report is submitted by the arbitrator to the appropriate government

Conciliation :
representatives of workers and employers are brought together before a third party with a view to persuading them to arrive at an agreement by mutual discussion between them. The third party may be an individual or a group of people. The third party may also be called as mediators. The ID Act, 1947and other state enactments authorize the governments to appoint conciliators charged with duty of mediating in and promoting the settlement of industrial disputes.

In Conciliation , the ultimate decision rests with the parties themselves but the conciliator may offer a solution to the dispute acceptable to both the parties and serve as a channel communication . The parties may accept his recommendation or reject it. If the conciliation fails, the next stage may be compulsory adjudication or the parties may be left with their own choice

Adjudication : Adjudication means a mandatory settlement of an industrial dispute by a labor court or a tribunal. The government has a discretionary powers to accept or reject recommendations of the conciliation officer.

It is obvious that once referred for adjudication , the verdict of a labor court or tribunal is binding on both the parties.
This is the most significant instrument of resolving disputes. But, it has been criticized because of the delay involved in resolving conflicts.

Consultative Machinery : set by the government to resolve conflicts. The main function is to bring the parties together for mutual settlement of differences in the spirit of cooperation and goodwill. A consultative machinery operates at plant , industry , state and national levels. Being bipartite in character, works committee are constituted as per the provisions of industrial Disputes Act, 1947 and joint management councils are set up following the trust laid down in the Industrial Policy Resolution,1956. The bodies operating at state and national level, are tripartite in character , representing government, labor and management.

When strikes are justified

Economic demands Unfair labour practices When no response from mgmt. Existing facility withdrawn PF etc.

Causes of strike

Laws relating to Lockouts

Section 2(1) of the Industrial Disputes Act, 1947 defines Lock-out as the closing of a place of business of employment or the suspension of work, or the refusal by an employer to continue to employ any number of persons employed by him. It is declared by employers to put pressure on their workers. It is counterpart of a strike.

Every employer has the option to lock out workers, if 1) a dispute has been referred to a council or the Commission for Conciliation, Mediation and Arbitration (CCMA); a certificate that a dispute remains unresolved has been issued; 30 days have elapsed since the referral; and II ) 48 hours written notice of a strike is given to a. the employer; or b. a council (if the dispute relates to a collective agreement to be concluded in a council); or c. to an employers organisation (if the employer is a member of an organisation that is a party to the dispute); or III) 48 hours written notice of a lockout is given to a. the trade union; or b. to the workers (if they are not trade union members); or c. a council (if the dispute relates to a collective agreement to be concluded in a council)

Following do not constitute a lockout

Termination of employment by retrenchment. Prohibiting an individual employee is not lockout. Declaration by employer - on the grounds that the workman has refrained from attending to work.

Layoff Layoff implies temporary removal of an employee from the payroll of the organization due to circumstances beyond the control of the employer. It may last for an indefinite period. But the employee is not terminated permanently and is expected to be called back in future. The employer employee relationship does not come to an end but is merely suspended during the period of layoff. It is temporary denial of employment. The purpose of layoff is to reduce the financial burden on the organization when the human resources cannot be utilized profitably.

Under Section 2(KKK) of the Industrial Disputes Act, 1947, layoff is defined as
the failure, refusal or inability of an employer, on account of shortage of coal, power or raw materials or accumulation of stocks or breakdown of machinery or by any other reason, to give employment to a workman whose name appears on the muster rolls of his industrial establishment and who has not been retrenched. Layoff is restored in cyclical and seasonal industries. In mines workers are laid off due to excess of inflammable gas, flood, fire and explosion.

According to Section 25(c) of the Industrial Disputes Act, 1947, a laid off worker is entitled to compensation equal to 50 per cent of the basic wages and dearness allowance that would have been payable to him had he not been laid off. To claim this compensation, the laid off workman must satisfy the following conditions:

a) he should not be a badli or a casual worker, b) his name must appear on the muster rolls of the industrial establishment, c) he must have completed not less than one year of continuous service, and d) he must present himself for work at the appointed time during normal working hours at least once a day.

Badli workman" means a workman who is employed in an industrial establishment in the place of another workman whose name is borne on the muster rolls of the establishment, but shall cease to be regarded as such for the purposes of this section, if he has completed one year of continuous service in the establishment.

Retrenchment
Retrenchment means permanent termination of service of an employee for economic reasons in a going concern. The Industrial Disputes Act, 1947 defines retrenchment as the termination by the employer of the services of workman for any reason other than termination of services as punishment given by way of disciplinary action, or retirement either voluntary or reaching age of superannuation, or continued ill-health or the closure and winding up of a business.

Retrenchment however does not include the following:

Voluntary retirement of the workman Retirement of the workman on reaching the age of superannuation Termination in terms of non renewal of the contract Termination due to continued ill health

The Act lays down the following conditions for retrenchment.

1.The employee must be given one months notice in writing indicating the reasons for retrenchment or wages in lieu of such notice. 2. The employee must be paid compensation equal to 15 days for every completed year of service. 3. Notice in the prescribed manner must be served on the appropriate Government authority. 4. In the absence of any agreement to the contrary, the worker employed last must be terminated first.

For this purpose, average pay will be calculated as under: if the workman is entitled to monthly salary, then on the basis of the salary of last three calendar months;(90/3) or if the workman is entitled to weekly wages, then on the basis of wages of last four completed weeks; or if the workman is entitled to daily wages, then on the basis of wages of last twelve full working days.

Mr ABC has worked in an organization for 24 years, 5 months and his last drawn package is as under Basic Wages Rs 5, 000 + Dearness Allowance Rs 3, 000 + Conveyance Allowance Rs 1, 500 + Washing Allowance Rs 1, 000 + House Rent Allowance Rs 1, 000 + Canteen facility worth Rs 1, 000 + Dress Allowance Rs 1, 000. The total amount to be considered for retrenchment compensation is Rs 13, 500. 13, 500/ 26 days = 519.23 (1 Day salary) 519.23 X 24 years X 15 days = Rs 1, 86, 922. 80/Therefore the amount of retrenchment compensation to be payable to Mr ABC is Rs 1, 86, 922. 80/-

Mr. X is an employee of Bajaj Auto. Due to his ill behavior, he is retrenched from the services of the Co. after serving 5 years 7 months. He received an amount of Rs 3, 00,000. During his employment he was getting a monthly salary of Rs 45,000

COMPUTATION Least of the following Amount actually received 15 days average pay* no.of yrs served (45000*3/90)*6*15 3.Maximum exemption limit
___________ Exempted amount Taxable amount

is

exempt: 3,00,000 1,35,000 5,00,000 1, 35,000 1,65,000

Authorities under this act

Works committee Conciliation officers Boards of conciliation Courts of inquiry Labor court Tribunals National tribunals