*The Industrial Disputes Act, 1947 came into existence in April 1947.

It was enacted to make

provisions for investigation and settlement of industrial disputes and for providing certain
safeguards to the workers. industrial dispute may be defined as a conflict or difference of
opinion between management and workers on the terms of employment. It is
disagreement between an employer and employees’ representative; usually a trade union, over
pay and other working conditions and can result in industrial actions. When an industrial dispute
occurs, both the parties, that is the management and the workmen, try to pressurize each
other. The management may resort to lockouts while the workers may resort to strikes, picketing
orgheraos.

• Objectives of the Industrial Disputes Act 1947:-

(i) To maintain or restore industrial peace in cases of industrial disputes
(ii) To provide for the settlement of industrial disputes by conciliation or arbitration and
matters connected in addition to that; and
(iii) To provide for matters incidental thereto

• INDUSTRY
Sec.2 (j) of the Industrial Disputes Act, 1947 defines ‘industry’ as any business, trade, undertaking,
manufacture, or calling of employers and includes any calling, service, employment, handicraft or industrial
occupation or avocation of workmen”.

An industry exists only when there is relationship between employers and employees.

Sec. 2(j) gives the definition of industry, which was elaborated upon by the Supreme Court in the Bangalore
Water Supply and Sewerage Board v. A .Rajappa . The term industry has been given a wide scope and the
judgment overruled several earlier decisions. The court held-

1.Any activity will be industry if it fulfills the ‘triple test’, as under:

• Systematic and organized activity

• With the cooperation between Employers and employees
• For the production and distribution of good and services whether or not capital has been invested
for this activity.

It is immaterial whether or not there is profit motive or whether or not there is capital.

If the organization is a trade or business it does not cease to be one because of philanthropy animating the
triple test, cannot be exempted from scope of definition of industry.

Industrial doesn’t include spritual or religious services.

*Dominant nature test – whether there is complex of activities, the test would be predominant nature of
services and integrated nature of departments. All departments integrated with industry will also be industry.

The exceptions to industry are:-

Casual activities (because they are not systematic).

Small clubs, co – operatives, research labs, gurukuls which have an essentially non employee character.

Single door lawyer taking help from clerk (because there is no organized labour).

Selfless charitable activities carried on through volunteers e.g. free legal or medical service.
Sovereign functions – strictly understood, i.e., maintenance of law and order, legislative functions and judicial
function.

By applying the triple test formulae, industries are: –

HOSPITALS:-

*Hospital Mazdoor Sabha case AIR 1960 SC 610. It was held that hospital facilities are surely services and
hence industries.

Therefore, a government as well as a charitable hospital run by a private trust, offering free services and
employing a permanent staff is an industry.

*Management of Safdarjung Hospital v. Kuldip Singh AIR 1970 SC 1406, The court reversed the earlier decision
and it was held that a place where patients are treated by department of the government was not an industry
because it was a part of the functions of the government.Charitable hospitals run by Government or even
private associations cannot be included in the definition of industry because they were not analogous to trade
or business.

EDUCATIONAL INSTITUTION:

In Bangalore Water Supply Case AIR 1978 SC 548 the Supreme Court while holding the educational institutions
as industry overruled its earlier decision in

*University of Delhi v. RamNath AIR 1963 SC 1873, in which the court held that the university is not an
industry.

Suresh Chandra Mathe V.Jiwaji University Gwalior ,it was held that a university is an industry and a clerk of the
university is a workman.

MUNICIPALITY:

* D N Banerjee v.P.R. 1969 also known as (Budge Budge Municipality case) In this case The S.C held that
Municipality is also an Industry.

*Nagpur Corporation V.Its Employees. It was held that Tex department, Health department, Education
departments are included within the definition of Industry.

GOVERNMENT DEPARTMENT

State of Rajasthan V.Ganeshi Lal, The labour court had held the Law department of the Government as an
industry .It was challenged by the state before the S.C and it was held that the Law department of Government
could not be considered as an industry.

• INDUSTRIAL DISPUTE:-

An industrial dispute is defined as a conflict or a distinction in opinion between management and workers
regarding employment. It is a clash between an employer and employees representative i.e. trade union. The
issue of disagreement is usually pay or other working conditions.The Maine objectives of the Industrial
Disputes Act 1947 is to make provisions for the investigation and settlement of industrial dispute .

According to Section 2(k) of the Industrial Disputes Act, 1947 “industrial dispute” is defined as, “Any disputes
or differences between employers and employers, or between employers and workmen, or between workmen
and workmen, which is connected with the employment or non-employment or the terms of employment or
with the conditions of labour, of any person”.

Thus Industrial dispute is a dispute or difference –

 (i) Between employers and employers, or
(ii) Between employers and workmen or
(iii) Between workmen and workmen.

Industrial dispute is connected with –

(i) Employment or
(ii)Non-employment or
(iii)Terms of employment or
(iv)Conditions of labour of any person.

*In Workmen of Hindustan Lever Ltd V.Hindustan Lever Ltd. ,The question was whether a demand to confirm
employees in an acting capacity in a grade is an industrial dispute – It was held that a demand of the workmen
to confirm employees employed in an acting capacity in a grade would unquestionably be an industrial dispute
.

*Tata Chemicals V.Its Workmen, in this case it was held that it is not necessary that only major disputes should
be raised even a single member dispute should also be raised by the union .

*Chandrakant Tukaram Nikam and others V. Municipal corp. Of Ahmedabad and another,The dispute was
regarding the dismissal of employees and they were asking for reinstatement .The S.C said that it is also an
industrial dispute and the proper court for such relief is Industrial Tribunal not a civil court.

• WORKMEN:-

S.2(s) of I.D.Act 1947 ,Workman means any person (including an apprentice) employed in any industry to do
any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether
the terms of employment be express or implied, and for the purposes of any proceeding under this Act in
relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched
in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has
led to that dispute, but does not include any such person—

(i) Who is subject to the Air Force Act, 1950 or the Army Act, 1950 or the Navy Act, 1957 , or
(ii) Who is employed in the police service or as an officer or other employee of a prison; or
(iii) Who is employed mainly in a managerial or administrative capacity; or
(iv) Who, being employed in a supervisory capacity, draws wages exceeding [ten thousand
rupees] per month.

* PUNJAB NATIONAL BANK V.GHULAM DASTAGIR, the respondent was personal driver of area manager of the
appellant bank .Area. Manager was given personal allowances by the bank to enable him to employ personal
driver of his own Jeep .All requirements in maintaining the jeep were borne by the bank .There was no
material to show that the said driver was employed by the bank was paid his salary by the bank and was
included in the list of employees of the bank. The driver was not held to be employed by the bank and was not
a workman under s 2(s) of the act.

In S.K VERMA V MAHESH CHANDRA ,a development officer was held to be a workman .keeping in view the
nature of duties performed by such officers and powers vested in them they can’t be Said to be engaged in
any administrative or managerial work.

• Individual Dispute :-

Section 2-A provides that “where any employer discharges, dismisses, retrenches or otherwise terminated the
services of any individual workman, any dispute or difference between that workman and his employer
connected with, or arising out of such discharge, dismissal, retrenchment or termination shall be deemed to be
an industrial dispute, notwithstanding that no other workman nor any union of workmen, is a party to the
dispute.”
*Any workman may make an application directly to the labour court or Industrial Tribunal for adjudication of
such dispute after the expiry of 3 months when an application was made before the conciliation officer. This
has been done to prevent inordinate delay.

*The said application however should be made within 3 years of the date of dismissal, discharge,
retrenchment or termination of service.

*The court shall proceed to hear the matter as if it was referred to it U/S 10 of the ID Act.

Section 2A does not declare all individual disputes to be industrial disputes. It is only when a dispute is
connected with a discharged, dismissed retrenched or terminated workman that it shall be treated as an
industrial dispute.

Thus, an individual dispute to fall within the definition of industrial dispute, it must be sponsored by the Trade
Union of the workmen or if there is no trade union, it must be sponsored by the majority of the workmen or it
must comply with the requirements of Section 2-A of the Industrial Disputes Act, 1947.

MACHINERY FOR SETTLEMENT OF INDUSTRIAL DISPUTES:-

• Conciliation:

Conciliation is a process by which representatives of workers and employers are brought together before a
third person or a group of persons with a view to persuade them to come to a mutually satisfying agreement.
The objective of this method is to settle disputes quickly and prevent prolonged work stoppages if they have
already occurred.

According to the Industrial Disputes Act, 1947, the Central and State governments can appoint a conciliation
officer to mediate in all disputes brought to his notice. The officer enjoys the powers of a civil court. He can call
and witness disputing parties on oath and interpret the facts of the case.He is expected to give judgment
within 14 days of the commencement of the conciliation proceedings. His judgment is binding on all the
parties to the dispute. The conciliation officer has a lot of discretion over the ways and means to be followed
to bring about a settlement between the disputants. He “may do all such things as he thinks fit for the purpose
of inducing the parties to come to a fair and amicable settlement of disputes”.

• Board of Conciliation:

When the conciliation officer fails to resolve the disputes between the parties, the government can appoint a
Board of Conciliation. The Board of Conciliation is not a permanent institution like the conciliation officer. It is
an ad hoc, tripartite body having the powers of a civil court, created for a specific dispute. It consists of a
Chairman and two or four other members nominated in equal numbers by the parties to the dispute.The
board conducts conciliation proceedings in the same way as conducted by a conciliation officer. The board,
however, is expected to submit its report within two months of the date on which the dispute was referred to
it.

• Court of Enquiry:

In case the conciliation proceedings fail to resolve a dispute, a Court of Enquiry is constituted by the
government to investigate the dispute and submit the report within six months. It is merely a fact finding body
and its findings are not binding on the parties to the dispute.

• Voluntary Arbitration:

When conciliation proceedings fail to settle the dispute, the conciliation officer may persuade the conflicting
parties to voluntarily refer the dispute to a third party known as Arbitrator, appointed by the parties
themselves. The arbitrator listens to the viewpoints of both parties and delivers an award or judgment on the
dispute. He, however, does not enjoy judicial powers. The arbitrator submits his judgment on the dispute to
the government.
 • Adjudication:

Adjudication or compulsory arbitration is the ultimate remedy for the settlement of disputes in India.
Adjudication consists of settling disputes through the intervention of a third party appointed by the
government. An industrial dispute can be referred to adjudication by the mutual con-sent of the disputing
parties.The government can also refer a dispute to adjudication without the consent of the parties. The
Industrial Disputes Act, 1947, provides a three-tier adjudication machinery – namely Labour Courts, Industrial
Tribunals and National Tribunals – for the settlement of industrial disputes.

Labour Courts:

These types of courts have been set up by the State Governments to go into the disputed orders of the
employers dismissal, suspension and discharge of employees by the management, legality or otherwise of any
order passed by an employer under the standing orders, withdrawal of any concession or privilege, legality or
otherwise or any strike or lock-out etc. These courts will award decision and send report to the Government.

Industrial Tribunal:

The State Government has been empowered to appoint as many industrial tribunals as it thinks fit, for the
settlement of disputes selecting to wages, hours of work and rest, intervals, provident fund, leave with pay,
compensatory and other allowances, bonus, profit sharing, holidays, gratuity, discipline, retrenchments
closure of establishment etc. The tribunal will consist of a person of the rank of a high court judge. The
decision of these tribunals is binding on both the parties.

National Tribunal:

Such tribunals are set up by the Central Government for the settlement of industrial dispute which involve
questions of national importance or which affect industrial establishments situated in more than one state. It
gives decisions on matters referred to it by the Central Government.

• LAY-OFF :-

Section 2 (kkk) of the Industrial Disputes Act, 1947 defines the term ‘Layoff’’ as the inability, failure, or refusal
of the employer to provide employment to a workman whose name is mentioned in the muster roll of his
industrial establishment and who is not retrenched due to the lack of power, coal, raw materials, accumulation
of stocks, breakdown of machinery or natural calamity for any other relevant reason. It is a temporary
termination of the Workman at the disposal of the employer.

• Conditions essential for a lay-off

There must exist an inability, failure or refusal from the employer’s side to provide employment to the
workmen.

Such inability, failure or refusal must be due to lack of power, coal, raw materials, accumulation of stocks,
breakdown of machinery or natural calamity for any other relevant reason.

The name of the workman must be mentioned in the muster roll of the employer’s industrial establishment.

The workman must not have been subjected to retrenchment.

*Section 25B of the Industrial Disputes Act, 1947: continuous service

As per Section 25B, a workman is said to render continuous service if he has worked for at least one year
without any interruption. He shall be eligible for compensation if he has rendered a minimum of one year of
continuous service. The interruption of such continuous service is not affected by reasons such as an accident,
authorized leave, sickness, legal strikes, a lock and the termination of work that is not due to the fault of the
workmen.
There are two exceptions where even if a workman is not in continuous service shall be deemed to be in
continuous service – they are –

If the workman was employed for the preceding 12 calendar months from the date on which such calculation
is being made.

If the workman during such 12 months had rendered his services for 190 days or more in the case of being
employed in a mine and 240 days in any other employment.

*Compensation Against Lay Off According to Section 25 C of the Industrial Disputes Act a worker who is laid off
is entitled to compensation equal to 50% of his total basic wages and dearness allowance for the period of lay-
off excluding any weekly holidays . However, it is subjected to certain conditions like; He is not a badli or a
casual workman. His name should appear on the establishment’s muster rolls. He should have completed at
least one year of continuous service with the company.

A badli workman is a worker who takes the place of another worker whose name appears on the
establishment’s muster rolls. However, after one year of continuous service in the establishment, such a
worker no longer qualifies as a badli worker.

A. Compensation is normally available for no more than 45 days in any twelve-month period.

• RETRENCHMENT:-

Section 2(oo) of the Industrial Disputes Act, 1947 talks about retrenchment. As per the said section,
retrenchment refers to the termination of a workman for any reason except for a form of punishment in
furtherance of imposing disciplinary action. The employment of Workman is permanently terminated & the
relationship between employer & employee ceases to exist.

However, retrenchment does not include voluntary retirement of a workman, workman retiring upon reaching
the age of superannuation as mentioned in the employment contract, removal of a workman on basis of
continued ill-health, and removal of the workman because the employment contract is terminated or is non-
renewed after its expiry.

*Section 25F of the Industrial Disputes Act, 1947: conditions precedent to retrenchment

As per this Section, the employer must give one month’s written notice to the workman that includes the
reasons for retrenchment, or in lieu of such notice, the workman must be paid wages for the period of the
notice.

The employer at the time of retrenchment must pay the workman the compensation which is equal to the
average pay of 15 days for each year of continuous service provided by such workman.

The notice regarding retrenchment must be served to the appropriate Government as well.

*State Bank of India v N. Sundaramony,In this case, the s.c held that any retrenchment done as per Section
2(oo) shall mean that the termination of a workman is done by the employer for any reason whatsoever other
than as a punishment in furtherance of imposing disciplinary action.

*Delhi Cloth and General Mills v Union of India

In this case, it was held by the Supreme Court that if the name of any workman is removed from the muster
roll of an industrial establishment then it would automatically be deemed as the retrenchment of such
workman.

• STRIKE:-

Section 2(Q) of the industrial dispute act, 1947 defines the Strike that ‘Strike is a temporary cessation of the
work by the group of the employees of the industry with the same intention to stop the work.It is done by the
workers to get their necessary demands fulfilled by the employer of the company or industry.It is a tool in the
hands of the employees to compel the management to agree to their demands.

Essentials Of Strike:-

There are many essentials of strike given under the act which are:

Cessation of work

Cessation of work in combination by a group of employed persons in the industry

The persons should be employed in the industry.

The refusal of work must be the refusal of common understanding by such persons.

Types of strikes-

Workers in the industrial world have resolved to various types of strikes. The strikes differ in their mode of
actions they come along with. Some strikes produce different impacts on the industry at stake though they all
aim at the same results.

*General Strike-

A General Strike is said to be a legal strike since it follows all the protocols as stated in the Act of Industrial
Disputes. Employees begin by giving a strike notice to the management of the industry they work for. If the
management fails to settle the dispute within the given time in the strike notice, the strike will be launched
after the expiry of the notice. All trade unions linked to the demand at hand participate in the General Strike.

*Sit-down Strike

This kind of strike involves employees reporting for duty in their workplaces normally, take their positions in
their various areas of work but here comes the game changer; they simply sit and do nothing.They might also
choose to just hang around the industry’s premises. The objective of this strike is to cripple production. The
industry ends up incurring huge losses due to no work being done at all.

*Stay in strike

A stay in strike is also known as tools- down strike or pens- down strike . .it is the form of strike where the
workmen report to their duties ,occupy the premises but do not work .The employer is thus prevented from
employing other labour to carry on his business.

*Go-slow Strike

The Go-slow Strike is aimed at showing the employers how offended the employees are. The employees report
for duty as usual and could even get to work but with only one distinction; they don’t actually do anything
productive. The delay in all that they do and the outcome turns into little or no production at all.The unique
thing about this strike is that at the end of the day, the employees demand for their wages. This aspect makes
the Go-slow Strike the most harmful strike compared to the total dissertation of work like in the General
Strike.

• Boundaries of strikes:

Strikes are not allowed to take place when:

The employer has not given a notice of the strike within six weeks before commencing the strike; or

Before the end 14 days after giving the notice.

The duration of time stated in the notice has not expired.

The conciliation process before a Conciliation Officer is still pending.

A duration of 7 days passes after the settling of the conciliation proceedings.

• LOCK-OUT

Section 2(1) of the Industrial Dispute Act 1947 defines Lock- OutLock-out means temporary closing of the
industry, or suspension of work, or the refusal of the work by the employer of the industry to continue
employment to any number of workmen employed within the industry.It is a tool in the hands of employer.

*Essentials Of Lock-Out

These are the essentials of the Lock-out:-

Temporary Closing of the industry

Suspension of work

Refusal by the employer to continue to employ any number of workmen employed in the industry

Coercion and retaliation are the main elements of the Lock-out that must be used by the employer. The mere
suspension of the work without accompanied by an intention to retaliate will not amount to Lock-out.

*Boundaries of lockouts:

Lockouts are not allowed to take place when:

The employer has not given a prior notice about the lockout within six weeks before the lockout; or

Before the end of 14 days after giving the notice.

The duration of time stated in the notice has not expired.

The conciliation process before a Conciliation Officer is still pending

A duration of 7 days passes after the settling of the conciliation proceedings.

The notice of a lockout, however, shall not be necessary when there is a strike already in progress.

• Illegal strikes and lockouts-

*Circumstances making strikes and lockouts illegal in an industrial establishment (S. 23) –

An employee working in an industrial establishment shall not go in strike contrary to the agreements made in
the contracts and no employer of any such employee shall initiate a lockout when:

The conciliation process before the Board of Conciliation is still pending and after 7 days since the settlement
of the conciliation.

The case before a Labour Court, National Tribunal or Industrial Tribunal is pending and after 2 months since
the settlement of such a case.

The case of arbitration before an arbitrator is still pending and after 2 months since the closing of the

A settlement or award is still operational in reference to any of the issues under the settlement or award

*Circumstances making strikes and lockouts illegal in public utility service (S.24) –

Strikes and lockouts shall also be declared illegal when:

They are done contrary to the contract stating the terms of employment.

A notice of the lockout is not given to the employees or notice of strike is not given to the employers; within
six weeks before the commencement of the lockout or strike.
Employees strike or employers lock out the employees before the end of 14 days after the notice has been
given.

The employees commence a lockout or employers commence a strike while conciliation proceedings are
pending before the Conciliation Officer and before the end of 7 days after the proceedings have been settled.

*Circumstances under which strike or lockouts are not illegal

The strike or lock-out which is already commenced before the reference of the dispute

A lock-out declared by the employer in the consequences of an illegal strike

Strike declared by employees in the consequences of an illegal lock-out

*Penalties For Illegal Strike And Lock-Out

There are various penalties that have been given in the act for illegal strikes and illegal lock-outs

Section 25: Prohibition of money related guide to unlawful strikes and lock-outs -No individual will purposely
exhaust or apply any cash in the immediate facilitation of help of any illicit strike or a lockout.

*Penalty for commencing S.26

Imprisonment for one month,Fine up to fifty rupees,or both for Workman who resort to illegal strike.

*Penalty for instigation S. 27

Imprisonment for 6 months,Fine up to one thousand rupees,or both for anyone who instigates for illegal work
out or strike .

Penalty for giving financial aid

Imprisonment for 6 months,Fine up to one thousand rupees,or Both who provides financial aid for illegal strike
or lockouts.

• Closure

In S.25(o) the Act defines “Closure” as the permanent closing down of a place of employment or part thereof.
Here, the employer is constrained to close the establishment permanently. Nonetheless, the due procedure
has to be complied with when it comes to rolling out a plan of closure

The employer intending to do a closure of his establishment has to necessarily apply at least ninety days in
advance to the appropriate government. A copy of the said application has to be given to the representatives
of the workmen as well. The said application will be considered and a reasonable opportunity to be heard shall
be given to the employer as well as the workmen. After considering the same, the appropriate government
may or may not grant the employer to close down. Even here, if the government does not respond within sixty
days from application, the permission will be deemed to have been granted.

• TRANSFER:-

Sec. 25FF. —Where the ownership or management of an undertaking is transferred, whether by agreement or
by operation of law, from the employer in relation to that undertaking to a new employer, every workman
who has been in continuous service for not less than one year in that undertaking immediately before such
transfer shall be entitled to notice and compensation in accordance with the provisions of section 25F, as if the
workman had been retrenched:

Provided that nothing in this section shall apply to a workman in any case where there has been a change of
employers by reason of the transfer, if—

(a) the service of the workman has not been interrupted by such transfer;
(b) the terms and conditions of service applicable to the workman after such transfer are not in any way less
favourable to the workman than those applicable to him immediately before the transfer; and

(c) the new employer is, under the terms of such transfer or otherwise, legally liable to pay to the workman, in
the event of his retrenchment, compensation on the basis that his service has been continuous and has not
been interrupted by the transfer

Every employee has a right to get compensation in case Of a transfer of ownership of industrial unit i.e. a
change In the employer as per section 25FF of the ID Act, 1947.It Is not necessary that your employer will get
changed in All the cases of Merger and Acquisitions. For instance, When one company acquires the shares of
another Company and workers continue working for the latter on The same terms, there is no change of the
employer. But In cases wherein the whole company and its Management are acquired, the employer changes.
Therefore, in cases where the employer has changed Because of the reason of the transfer of ownership of the
Management of an industrial unit or an undertaking (eg: By Merger or by Acquisition), the previous employer
is Liable to give:

Notice – 1-month notice in writing stating the reasons for A change in the management;

● Compensation – An amount equal to the 15 days of Wages for every completed year of continuous service
or Any part of service in excess of 6 months, To every employee who has been in continuous service of 1 year
in that undertaking before such transfer.