INDUSTRY

Objectives of ID Act

Objectives of the industrial disputes act were analyzed in the case of Workmen of Dimakuchi
Tea Estate v. Management of Dimakuchi Tea Estate, 1958.

1. Promotion of measures in order to secure good relations between employer and

workmen.
2. Investigation and settlement of Industrial disputes between workmen and workmen,
Workmen and employer and employer and employer.
3. To prevent illegal strikes and lockouts
4. Relief to the workmen in case of layoff, retrenchment and closure
5. Collective bargaining

Definition of an Industry

Section 2(j) of ID act 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;

Interpretation of the word “undertaking”

In the case of D.N Banerjee v. P.R Mukherjee, 1953 the Supreme court held that non-profit
organizations are also industry which includes public utility services as well, even if there is
no private enterprise.

Then in the case of Baroda Municipality v. Workmen, 1957 municipality was again
considered as an industry.

These two cases laid down that to be an industry, it is not necessary that it must be carried out
by a private enterprise or for profit. It is sufficient enough that the activity which is under
consideration is analogous to carrying on of a trade or business and involve cooperation
between employer and workmen.

Then in the case of Corporation of city of Nagpur v. Employees, 1960 it was determined
whether municipal corporation comes within the definition of Industry under the C.P and
Berar ID Act, 1947.

The act defines Industry as-

 1. Any business trade, manufacturing and mining undertakings or calling of employees.
2. Any calling service, employment, handicraft, or industrial occupation or avocation of
workmen;
3. Any branch of Industry or a group of Industry.

The court is of the opinion that since scope of the word Undertaking here has been restricted,
the earlier cases cannot be used.

Thus, the SC did not bought the municipal corporations under the purview of the word
undertaking but took it under the ambit of the word trade and business.

The court under this case distinguished between regal and non-regal functions and said that
non-regal functions are analogous to trade and business and thus they comes under the
purview of the same. Regal functions (Sovereign ) are those functions of the state which are
inescapable and inalienable, basically the supreme functions of the state such as legislative
power, administration of laws. Whereas Non- regal functions(non-Sovereign) are those which
may be assumed by means of legislative powers.

Then in the case of State of Bombay v, Hospital Mazdoor Sabha, 1960, it was held that a
government hospital comes under the definition of industry. Further, the court held that
Domestic, personal and casual services would not be included in the definition of Industry.

“as a working principle it may be stated that an activity systematically or

habitually undertaken for the production or distribution of goods or for the
rendering of material services to the community at large or a part of such
community with the help of employees -is an. undertaking. Such an activity
generally involves the co-operation of the employer and the employees; and
its object is the satisfaction of material human needs. It must be organised or
arranged in a manner in which trade or business is generally organised or
arranged. It must not be casual nor must it be for oneself nor for pleasure”

Then in the case of National Union of Commercial Employees v. M.R. Meher, 1962,
learned professionals (Law firm ) were excluded from the ambit of industry. Further
in the case of Madras Gymkhana Employees Union v. Management of Madras
Gymkhana Club, 1968, club is not treated as an industry as its functions are not
analogous to that of a trade or business. Similarly the case of Cricket Club of India,
1961, where cricket clubs are excluded from the ambit of an industry.
Then in the case of University of Delhi v, Ramnath, 1963, the court narrowed down the
meaning of the term industry by stating that since the main purpose of educational institutions
was to provide education which is not a service, and thus does not come under the ambit of
the term Industry.

The aim of the court was that the profession of teaching cannot be assimilated with that of an
industry and workmen.

Then in the case of Safdarjung Hospital v. Kuldip Singh, 1970, the court held that hospitals
cannot be treated as an industry since it was a part of the functions of the government. The
court also took the view that professions must be excluded from the definition of industry.

A profession ordinarily is an occupation requiring intellectual skill, In any event, they are not
engaged in an occupation in which employers and employees co-operate in the production or
sale of commodities or arrangement for their production or sale or distribution and their
services cannot be described as material services. Material services involve an activity carried
on through co-operation between employers and employees to provide the community with
the use of something such as electric power, water, transportation, mail delivery

However, this case was overruled in the Bangalore Water Supply Case,

Then in the case of Management of FICCI v. Workmen, 1972, court held that services offered
by a federation comes under the definition of material services.

Bangalore water supply case

Bangalore Water Supply & Sewage Board v. A. Rajappa, 1978, seven judges landmark case
regarding the scope of an industry.

This case overruled various judgments before it such as Safdarjung, Delhi University,
solicitors, Gymkhana and upheld Hospital Mazdoor Sabha, Corporation of City of Nagpur
and Banerji v. Mukherjee. Although, triple test was earlier discussed in the case of Hospital
Mazdoor Sabha but this case establishes two tests to determine the status of an establishment
as an industry or not.

Triple Test

An establishment would be treated as an industrial establishment if there is-

1. Systematic Activity
 2. Organized by co-operation between employer and employee.
3. For the production and/or distribution of goods and services, calculated to satisfy
human wants and wishes.

Other important points-

1. Spiritual and religious services are outside the scope of an industry.

2. Absence of the intention of profit is irrelevant, be it private or public.
3. The true focus is functional, and the decisive test is the nature of the activity (special
emphasis on employer-employee relations).
4. Philanthropic institutions excluded

As a consequence of the triple test these below mentioned establishments would be regarded
as industrial establishments-

1. Professions
2. Clubs
3. Educational institutions
4. Co-operatives
5. Research institutes
6. Charitable projects
7. Kindred adventures

Dominant Nature Test

1. Where there are complex activities, some of which qualify for exemption and others
do not, then the decisive predominant nature of goods and services should determine
whether an organisation is an “industry” or not.

2. Sovereign functions are exempted from the ambit of “industry”

3. Even in departments discharging sovereign functions, if there are units which are
industries and they are substantially severable, then they can be considered to come
within s 2(j).

4. Welfare activities or economic adventures undertaken by the government will be

covered within “industry”.
State of UP v. Jai Bir Singh,2005 suggested for reconsideration of the Bangalore Water
Supply case by a larger bench. Further, although an amendment has been made to the
definition of the industry in 1982 it’s still not be implemented.

Philanthropic activities are excluded from the purview of the IR code.

As per the Som Vihar Apartment Owners v. Workmen, 2002, domestic workers
(Unorganized sector workers) are excluded from the purview of ID act as they do not
fulfils the conditions of the Triple Test.
 INDUSTRIAL DISPUTE

IDs Act is only applicable upon apprehension of existence of an Industrial Dispute. The
concept of an industrial dispute is borrowed and modified concept from section 8 of Industrial
Courts Act 1919, Section 2(j) of Trade Disputes Act 1929. Now, it is covered by s 2(k) of IDs
Act

Section 2(k) defines Industrial Dispute as “any dispute or difference between employers and
employers, or between employers and workmen, or between workmen and workmen (not
between individual workmen), which is connected with the terms of employment or non-
employment or the terms of employment or with the conditions of labour, of any person;

Thus, in order to constitute an industrial dispute below-mentioned are the essential

requirements-

1. There must be a dispute

2. The dispute or difference between employers and employers, or between employers
and workmen, or between workmen and workmen
3. Must be connected to the terms and conditions of employment

As clearly visible from the definition of an industrial dispute under Section 2(k) an industrial
dispute under the Indian ID Act not only exist between employer and worker but employer
and employer as well. Which is not covered within the scope of IDs in Australia, UK. Further
other labour laws are hardly applicable to such disputes. Indian ID Act even covers dispute
between association of workers and association of employer as well.

Section 2A of the ID Act deals with individual disputes with respect to the termination of
employment which becomes an industrial dispute through the support and espousal from
trade unions as laid down in the case of Bombay Union of Journalists v The Hindu 1963
which discusses the concept of deemed industrial disputes.

Interpretation of the term “any person”

According to the Workmen of Dimakuchi Tea Estate v. Management of Dimakuchi Tea

Estate, 1958, the judgement is related to K.T Banerjee who was appointed as an assistant
medical officer for a period of 3 months, however on the grounds of unsatisfactory
performance the he was terminated within the period of three months. This matter was
supported by trade unions which was thereafter referred to tripartite board which held that the
medical officer has to be reinstated but the company did not followed the order and thus the
matter again referred to Industrial tribunal then to labour appellate tribunal and at last the SC.
The issue before the SC is the status of K.T Banerjee as in whether he comes under the ambit
of any person.

The court held that this any person has to be a workman and workmen can raise and
industrial dispute for any person or to support any person but the worker must have direct and
substantial interest in the employment and non-employment of this any person. Thus, the
appeal was dismissed.

This is the majority decision in that case but a minority judgment was also given Justice
Sarkar who was of the opinion that this any person is any person other than the specified
parties and thus can also be non-employee or non-workmen. And thus, according to him K.T
Banerjee is covered under the definition of the term any person.

This any person means a person in whose employment, terms of employment or conditions
of labour the workman as a class have direct or substantial interest with whom they have
under the scheme of the Act. Thus, this any person can be a non-workman also. Community
interest not in general but the direct and substantial interest of the workmen in the
employment or non-employment or conditions of employment of the any person.

Further to this, in Standard Vacuum Refining Co. v Workmen, 1960 where contract workers
engaged to perform similar work as permanent workers, the latter raised Industrial dispute for
regularisation of this contractual labour. Now the question is whether this can be covered as
‘any person’ under Section 2(k) or can workmen raise industrial dispute in favour of non-
workmen? The court held that the permanent workmen have a direct and substantial interest
in the employment or regularization of contractual labour and thus would be treated as an
industrial dispute.

Then in the case of All India Reserve Bank Employees Union v. Reserve Bank of India, 1966
the court in this judgment reiterated the 1958 case confining the ambit of the term any person
to a workmen. Accepted the substantial interest part but that person can only be a workman.

In Bongaigaon Refining and Petrochemicals Ltd v Samijuddin Ahmed, 2001 offer of

employment was made to one person which was withdrawn by company later (not appointed
therefore). Rejection was challenged before the appropriate Government (individual dispute).
However, the workers of the company and trade union supported the cause and converted it
into an industrial dispute. The court further held that dispute must be related with
employment/non-employment of any person - direct and substantial interest with it.

So, to sum up this any person can be any person but the workmen should have direct and
substantial interest in the employment and non-employment of the terms and condition so
employment. This has to be proven by the workmen.

JURISDICTION OF THE CIVIL COURT TO TAKE COGNIZANCE OF AN

INDUSTRIAL DIPSUTE

There is no provision to bar the jurisdiction of a civil court from taking cognizance of an
industrial dispute but there exists an implied bar since you’ve created a specific institution to
take care of that purpose. Thus, the Section 9 relating to the jurisdiction of the civil court
would not be applicable because of this implied bar.

If the person is not a workmen can he go to a civil court for his reinstatement. Yes, because
ID Act would not be applicable since he is not a workmen, it would be applicable only if it is
covered under the definition of any person when supported by workmen showing their
substantial interest in the employment of this any person.

However, under Section 97 of the IR Code 2020 which bars the jurisdiction of the civil court
to take cognizance of an industrial dispute.

Further, the Section 34 of the ID Act only bars the jurisdiction of criminal court.

CONVERSION OF INDIVIDUAL DISPUTE INTO INDUSTRIAL DISPUTE-

Section 2A deals with the concept of individual disputes relating to the termination of service
only. Under this a person within 3 years from the date of cause of action can file an
application before a conciliation officer and after 45 days of the submission of application the
person may a labour court or an industrial tribunal. This Section provides for a direct route
which is also there in the IR Code 2020. IR Code 2020 dispensed with the reference route by
appropriate government except in the case of National Tribunal.

Further, Section 9 (c) talks about the grievance redressal committee which turned into
authority in the IR Code 2020.

Section 2A talks about deemed industrial dispute according to which all the disputes relating
to termination of employment would be deemed to be an industrial dispute and thus no
support is required by anyone.
Hypothetical situation-

A supervisor got terminated from employment which is an individual dispute however

workmen supported his cause converting the dispute into an industrial dispute.

Requirement of espousal

Some principals relating to the conversion of an individual dispute other than the termination
of employment relating to workmen into an industrial dispute, were laid down in the case of
Bombay Union of Journalists v The Hindu, 1961 as follows-

1. The dispute must be supported by trade union, inside and outside (whether the trade
union exist inside or outside the organization)
2. The trade union can be a minority trade union as well
3. The trade union can be a registered or unregistered trade union.
4. In case there is no trade union then it can also be supported by the workmen of same
department (In cases when the aggrieved person is a member of federation of trade
unions)
5. In case there is no trade union and no workmen of the same department then it can
also be supported by workmen of different organization

The principles laid down in this case are then followed in various cases such as Workmen v
Dharampal Premchad, 1966 and JH Jadhav v. Forbes Golak Ltd, 2005. Further there is no
particular way in which this support has to be made.

Then in the case of MCD v Management MCD, 1998 a beldaar died during course of
employment the family submitted a video of death to get compensation by compassionate
appointment of the deceased’s son which was rejected by MCD. Until this point it was an
individual dispute but when it was supported by trade union it became an industrial dispute.

Therefore, an Industrial dispute need not to be in respect of a workman but community of

interest in the workman is necessary for an industrial dispute.

On similar lines, in Indian Aluminium Co Ltd v Industrial Tribunal, 1995 where there was an
agreement between workers and employer that upon retirement or death, dependents will be
employed. Unskilled worker retired thereby submitted application for appointment of son
which was rejected by the company, since his brother was still serving. Was an individual
dispute but a recognised trade union supported the retiree’s cause an converted the dispute
into an industrial dispute. Industrial tribunal directed the appointment of the son, based on the
agreement. Later HC held that this dispute involved an industrial dispute and thus entitled to
appointment.

Housekeeping staff situation in college-

Housekeeping staff in a University removed due to a new contractor, but their cause for
reinstatement was supported by students and their committees. The question here is whether
it will be covered by ID Act? Whether it will be taken as an industrial dispute?

University will be taken as an ‘industry’ under Section 2(j) if we apply the triple test. It is
clearly an industrial dispute since they are workmen under Section 2(s), students’ support will
be immaterial.

However, students or employees of the institution would not be able file an industrial dispute
on behalf of the workmen. Because an industrial dispute can only exist between the specific
parties as mentioned under the act.

Further, in order to convert an individual dispute other than the termination of employment
relating to any person into an industrial dispute, though the support is required by parties or
other workmen but it must be shown that there exist a direct and substantial interest of the
supporting parties.

COMPONENTS OF AN INDUSTRIAL DIPSUTE

Factum of dispute:

Any difference/dispute/dissatisfaction should exist between the employer and workers relating
to the terms and conditions of employment. For the existence of an industrial dispute a
demand must be there between the concerned parties which is rejected by the employer. In
case the demand are accepted then no question of an industrial dispute arises.

A demand can be raised in any manner written or oral but the burden lies on the parties to
prove that the demand is in some way communicated to the employer which are rejected by
the employer. If the workers directly approach the appropriate government with their demand
without communicating the same to the employer then no industrial dispute exists.

This concept of dispute if discussed in various cases as follows-

In the case of Huntley v Thornton,1957 it was held that for the existence of an industrial
dispute there has to be some sort of dissatisfaction or substantial difference relating to the
terms and conditions of employment between the concerned parties, it cannot be a mere case
of personal difference between the parties. The dispute must be definite, being substantial in
nature there should not be any ambiguity.

Then in the case of Star Papers Mills Ltd v Industrial Tribunal, 1977 a industrial dispute can
be said to have arisen and come into existence not only on the making of a demand, but also
upon the rejection of such demand. If demand is communicated and accepted, with workers
being satisfied, then no dispute can be said to be in existence.

Then in Sindhu Resettlement Corporation Ltd v Industrial Tribunal,1968 it was held that an
industrial dispute is said to be arisen when the dispute has to be communicated to the
employer, without such communication, no dispute can be said to be in existence.

Parties to dispute:

Must be between specified parties that is workmen-workmen, employer-employer, employer-

workmen

Subject-matter:

The dispute had to be connected with termination, terms and conditions of employment, or
conditions of labour. Mainly those matter which are mentioned in the Schedule II-III ID Act.
In BBC v Hearn, 1978, the court held that written and unwritten terms and condition sof
employment would also be the part of terms of employment.

Terms of employment- Wages, bonus, leave, transfer, promotion, termination of service, etc.
Conditions of employment- Working conditions, working hours, safety, rest period, health,
welfare, weekly holiday, etc.

A workmen may raise a disputes orally, it is not necessary to raise an industrial dispute in a
written form. Difficult to prove oral communication. IDs Act does not distinguish b/w written
and oral - burden of proof upon the parties to show existence.

Status of unwritten conditions of employment-

Indian labour laws currently do not require written contract/agreement of the terms and
conditions of employment. Thus unwritten conditions of employment would also be a part of
terms and conditions of employment as observed in the case of Workmen of Hindustan Lever
v Hindustan Lever Ltd,1984 where the court held that the expression 'terms of conditions of
employment' would ordinarily include not only the contractual terms and conditions but those
terms which are understood and applied by the parties in practice or habitually or by common
consent without ever being incorporated in the contract.

IR CODE 2020 ON INDUSTRIAL DISPUTE

Section 2(q) of the IR Code 2020 talks about an industrial dispute which means any dispute or
difference between employers and employers or between employers and workers or between
workers and workers which is connected with the employment or non-employment or the
terms of employment or with the conditions of labour, of any person and includes any dispute
or difference between an individual worker and an employer connected with, or arising out of
discharge, dismissal, retrenchment or termination of such worker would amount to an
industrial dispute.

The 2(q) or IR Code 2020 is more or less pari materia only few differences are there as
follows-

1. Incorporated individual disputes within the main section with respect to discharge,
dismissal, retrenchment, or termination
2. Term worker has been used instead of workmen.

Further, no industrial appellate tribunal is there in India, even though such a mechanism exists
in the UK. This issue was discussed while making the IRs Code 2020 but it was not adopted
due to the constraints of policy makers. Aggrieved persons can file writ petitions to challenge
reference made by appropriate remedy, under Article 226-227.

SCHEDULE II

The jurisdiction of labour court is confined to Schedule II that is-

1. The propriety or legality of an order passed by an employer under the standing orders
2. The application and interpretation of standing orders
3. Discharge or dismissal of workmen including reinstatement of, or grant of relief to,
workmen wrongfully dismissed
4. Withdrawal of any customary concession or privilege
5. Illegality or otherwise of a strike or lock-out
6. All matters other than those specified in the Third Schedule.
According to [Sec 10 (1) (c)] matters specified in Schedule III dispute not effecting more than
100 workers can be referred to labour court otherwise they would be referred to an industrial
tribunal. Further to this, As per [Sec 10 (6)] no Labour Court or Industrial Tribunal shall have
jurisdiction to adjudicate upon any matter which is under adjudication before the National
Tribunal.

SCHEDULE III

This schedule talks about the jurisdiction of an industrial tribunal-

1. Wages, including the period and mode of payment

2. Compensatory and other allowances
3. Hours of work and rest intervals
4. Leave with wages and holidays
5. Bonus, profit sharing, provident fund and gratuity
6. Shift working otherwise than in accordance with standing orders
7. Classification by grades
8. Rules of discipline
9. Rationalisation
10. Retrenchment of workmen and closure of establishment
11. Any other matter that may be prescribed.

As mentioned above there is overlapping of jurisdiction between the labour tribunal and
industrial tribunal which was creating confusion, thus under the IR Code 2020 the concept of
labour court is completely removed.

CLAIMING OF DAMAGES FOR THE LOSS OF PRODUCTION DUE TO AN

ILLEGAL STRIKE-

In the case of Rohtas Industries v Staff Union, 1975 trade union went on a strike in light of
rivalries with the employer. Matter referred to board of arbitrators (there must be agreement
b/w parties for reference to voluntary arbitration).

The Arbitral tribunal Adjudicated upon 2 issues:

1. Claim of workers for wages;

2. Employers’ claim for compensation for loss of production due to illegal strike.
Arbitral tribunal did not entertain workers’ claims, since they were in illegal strike and
thereby directed workers and trade union to pay compensation worth Rs 7.7 lakh. HC relying
upon the Section 18 of the Trade Unions Act, 1929 which talks about the immunities and
privileges available to a trade union and Section 17 which talks about the immunity from
criminal proceedings, thereby struck down the second part of the award which provides for
the compensation for the loss suffered by the employer due to an illegal strike.

SC has clearly said that workers cannot get wages if strike is illegal (since it was declared
during pendency of conciliation proceedings). Employer could get only relief as per the
provision of Section 26 of ID Act. In utter shock because of this vague interpretation of ID
Act the court stated that “we may state that compensation for loss of business is not a dispute
or difference between employers 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'.
We are unable to imagine a tort liability or compensation claim based on loss of business
being regarded as an industrial dispute as defined in the Act, having regard to the language
used, the setting and purpose of the statute and the industrial flavour of the dispute as one
between the management and workmen.” Further the court also said that claiming damages is
not the part of the terms and conditions of employment.

If strike is legal then workmen would be entitled to salary for the period of strike.

RECOGNITION AND REGISTRARTION OF TRADE UNIONS-

There is no specific provision which necessitates on the part of the employer to recognise a
trade union.

As per Article 19(1)(c) workers have the right to form association but when it comes to
registration of trade union there are two things-

1. The registration of trade union is not mandatory

2. But in order to get certain benefits of the ID Act such as protection in civil suit trade
union are generally registered.

Registration of trade union is done by the registrar of trade union. Registration of trade union
is not a matter of terms and condition of employment.

If demand of recognition is rejected by the employer can it be raised under the ID Act? Since,
recognition of trade union is not related to the terms and conditions of employment the matter
cannot be raised under the ID Act. However, it is covered under the IR Code 2020 which
states that that dispute relating to recognition of trade union would be seen as an industrial
dispute.

DEMAND FOR WEEKLY HOLIDAY-

Demand for weekly holiday if rejected by the employer would amount to an industrial
dispute since it is related to the terms and conditions of the employment, thus ID Act would
be applicable.
 WORKMAN

This concept of workman has been borrowed from the Section 8 of UK Industrial Courts
Act , 1919. Under this section apprentice is also included as a workman.

The expression " workman " means any person who has entered into or works under a
contract with an employer whether the contract be by way of manual labour, clerical work, or
otherwise, be expressed or implied, oral or in writing, and whether it be a contract of service
or of apprenticeship or a contract personally to execute any work or labour.

Workman is defined under Section 2(s) of ID Act as 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.

IR code 2020 does not talk about the concept of workmen instead it only talks about worker
under Section 2(zr).

Persons whose employment has been terminated also comes under this definition of any
person.

However, there are some exclusions from the definition of workmen mentioned under
Section 2(s)

(i) who is subject to the Air Force Act, 1950 (45 of 1950), or the Army Act, 1950 (46 of
1950), or the Navy Act, 1957 (62 of 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 (2010 amendment), draws wages
exceeding ten thousand rupees per mensem or exercises, either by the nature of the duties
attached to the office or by reason of the powers vested in him, functions mainly of a
managerial nature (Purely administrative work). IR Code 2020 has extended this wage limit
to 18000.

One should not go on the designation of the person in order to determine his/her status as a
workman, rather the functions the concerned individual is performing has to be taken in to
consideration.

Interpretation of any person

According to skills workers can be classified into three categories that is-

1. Skilled
2. Unskilled
3. Semiskilled

Whereas according to the age they can be classified into following categories-

1. Minor worker (>14)

2. Adolescent worker (14-18)
3. Adult worker (18+)

Further they can also be categorized on the basis of duration-

1. Part time
2. Full time
3. Permanent
4. Casual
5. Daily wage
6. Contractual

For the purposes of Section 2(s) of the ID Act, duration and nature of employment would be
irrelevant. They are not relevant in order to determine the status of the worker as a workmen.

Essential conditions to be a workmen

First condition-
In order to qualify as a workman a person has to be employed in an industry as specified
under the Section 2(j) of the ID act.

The IR code 2020 is does away with the concept of workmen in place of that they use worker
or employee. Further to this, all employees are workmen but all workmen are not employees.
ID Act is only applicable to a workmen. As per the Section 18 of the Apprentices Act, 1961
an apprentice cannot be regarded as worker or workmen since there exist no contract of
employment which is an essential to be a workmen.

Additions made by the Section 2(zr) IR Code 2020 to the concept of workman-

1. Working journalists
2. Sales promotion employees
3. Supervisors who are drawing monthly salary less than 18000

Note:- A government employee can also approach a labour court under ID Act, if fulfils all
the conditions of the ID Act.

Concept of apprenticeship-

According to Section 18 of the Apprentices Act, 1961 apprentices are trainees and not
workers for the purposes of labour laws.

There is a basic differences between contract of employment and contract of apprenticeship

as follows-

An apprentice is employed for training purposes not for rendering services, which contradicts
the basic fundamental of contract of employment that is that the person has to be employed
for rendering services. And thus apprentices can not be deemed as a workmen.

However, this Section 2(s) of the ID Act includes apprentice in definition of any person.
Which give rise to a conflict between these two sections. But this is not true since Section
2(s) of the ID Act only covers those apprentices who are not covered under the Apprentices
Act, 1961. If covered under any other statue than the act of 1961 then they would be entitled
to get benefits under the ID Act.

Further, the Section 16 of the Apprentices Act, 1961 deals with the application of labour laws
to an apprentice. As per this section an apprentice is entitled to certain benefits in case of
injuries as per the below mentioned labour laws-
 1. Safety provisions of the Factories Act
2. Employees Compensation Act, 1923

These are some scenarios where a apprentice who is not a worker is treated as a worker.

However, under the IR code 2020, under the Section 2(zr) any person is excluding of
apprentices that are registered under the Apprentices Act, 1961.

Concept of an intern working in a law firm-

For this first we have to look as in whether a law firm constitutes as an industry. Now, since
the law firm is established for providing services and is a systematic activity that is organized
by the cooperation of employer and employees, it will be treated as an industry as it fulfils the
conditions of the triple test.

Further, an intern is also not covered under the Apprentices Act, 1961 and thus he may come
under the definition of any person. However, as an intern is not employed under the contract
of employment which is an essential condition to be a workman and thus an intern would not
be treated as a workman.

Second Condition-

A person must be employed to perform any manual, unskilled, skilled, technical, operational,
clerical or supervisory work.

Third condition

Must be employed for some hire or reward (consideration), if it is honorary, gratuitous or free
services then it would not be treated as workmen as held in the case of Bhagaband Colliery v
Workmen, 1962, Similar observations were also made in the case of Ready-Mix Concrete
(South East) Ltd v Ministry of Pensions and National Insurance, 1968.

Control test- It is one of the most important test in order to determine the relationship
between the employer and the employee is the existence of the right to control not only what
is to be done by the servant but also the manner in which the work shall be done as
established in the case of Short v. J.W. Henderson.

The Indian case which recognises the control test is the Dharangdhara Chemical Works v.
State of Saurashtra, 1957, in which it was held that the uniform test to determine the
employer employee relationship is the existence of the right in the master to supervise and
control the work done by the servant, not only in directing what work the servant is to do but
also the manner in which the work shall be done.

The facts of the case as follows-

Salt manufacturing company had licence given from State - had a piece of land which was
divided into pattas. Agarias were given these pattas to manufacture salt and a specific amount
at the outset of beginning of the engagement is given to the Agarias. They are permitted to
work as per their requirements. No working hours, allowed to employ other workers/family
members. They are independent; however a Salt Superintendent was employed by the
company to take care of the quality of the salt and supervise the work and was responsible for
every stage of manufacturing. There was a dispute w.r.t. terms of employment: Agarias
approached the government, State referred the dispute to a tribunal.

Company said that these Agarias were not workmen, and hence reference by the appropriate
government was illegal and no industrial dispute exist in this case, since Agarias were
independent contractors and not workmen. The Industrial Tribunal held that agarias were
workmen and an industrial dispute exists so, the reference was valid. The power to hire and
fire was with the company and also pays renumeration for the services rendered. Further salt
superintendent was there to supervise the work of the Agarias. All of this fulfils all the
condition of contract of employment and control test in specific.

Thus, applying the 4 components of contract of employment and control test in order to
determine the status of Agarias as workmen or not.

1. The first thing is to see whether the salt manufacturing company is an industry or not,
applying the triple test we can conclude that it is an industry
2. Then, they are employed for hire and reward
3. Then, they are under the supervision of the salt superintendent.

Taking the above into consideration the SC held that since the salt manufacturing company
fulfils all the test as well as the Agarias the Agarias would be treated as workmen and the
dispute would be regarded as an Industrial dispute.

However this is not a universal test since the there are some services where the master cannot
control the manner in which the work shall be done by the servant. And thus we require other
test as well.
Integrational test or organizational test-

According to this test if a person is an integral part of the organization then he/she would be
treated as worker.

The SC has applied this test in under various judgements as follows-

1. Ram Singh And Others v. Union Territory, Chandigarh, 2003

2. Balwant Rai Saluja v. Air India Ltd, 2014
3. Silver Jubilee Tailoring House v. Chief Inspector Of Shops,1973

These tests are generally applied when the facts are to complex as follows-

1. In cases where the worker is subjected to the control of various people such as
principle employer or immediate employer in form of contractor.

Multiple test or mix test-

According to this test there are multiple factors that are to be taken into consideration to
determine the status of a person as workmen or not as follows-

1. Control
2. Ownership of equipment or tools
3. Sharing of benefits
4. Risk of losses

If tools are provided by the employer then there exist a contract of employment, if profit and
loss are not shared then person would be deemed to be an independent contractor.

Every test encompasses of control test which makes it the most important test among all the
tests.

This test is established or discussed in the case of Ready-Mix Concrete (South East) Ltd v
Ministry of Pensions and National Insurance, 1968.

Union Bank of India v. Rakesh Kumar Vaid, 2020, relating to the regularization of drivers on
permanent basis. This judgment discusses the contours of contract of employment and other
components/ factors relating to the regularization of workers as follows-

1. Who is the appointing authority

2. Who is the paymaster
3. Who can select and dispense of with the services
Although, all the components or requirements established in the case of 1946 were reiterated
but there are some other additional requirements as well which are established-

1. How long does the alternate service last

2. Extent of supervision and control
3. Nature of the job (whether the job is professional or skilled)
4. Nature of establishment ( sovereign and non-sovereign function)
5. Who can take disciplinary action
6. Whether there is continuity of service
7. Whether the person is part and parcel of the institution or an integral part of the
organization (Integrational test)
8. Who organises the work (Mix test)
9. Who exercise the control, as in when and where the work is done.

Although, there are more than 10 components that are established in this case but on close
one can see they are more or less a part of the 4 major component of the contract of
employment.

Question- How to determine the status of the employee engaged by a contractor as in whether
the employee can be treated as the employee of the principal employer or not.

For this purpose, we can look into Bharat Heavy Electricals Ltd. vs Mahendra Prasad
Jakhmola, 2019 , Ram Singh And Others v. Union Territory, Chandigarh, 2003 and Balwant
Rai Saluja v. Air India Ltd, 2014

In order to resolve the issue in these cases the court again used the control test and
distinguishing between contract of service and contract for service.

For this purpose the SC in the BHEL case has coined two different terms as follows-

1. Primary control- exercised by the contractor

2. Secondary control- exercised by the principal employer.

There are two basic conditions required for an employee, employed by an independent
contractor be an employee of the principal employer-

1. Control and supervision- if they are under the supervision and control of the principal
employer
2. When the remuneration is directly paid by the principal employer.
This type of conversion can also happen in the case of sham contracts, camouflage contract
and unfair labour practices (when workers are supposed to be appointed on permanent basis
but they are employed on contractual basis or temporary basis and performing works of
perennial nature).

If the independent contractor is not paying benefits to the workers then it is the liability of the
principal employer to do the same such as minimum wages, employees compensation in case
disablement.

Further, the nature or extent of the control which is required to establish the relationship
between the employer and the employee varies from business to business and thus a precise
universal test is not possible. Therefore the correct method of approach would be to consider
whether having regard to the nature of work there was due control or supervision or not by
the employer as held in the case of Simmons v. Health Laundry Company. Thus the
determination of the relationship between the employer and employee is a matter of fact.

Fourth condition

In order to be a workmen a there must exist a contract of employment between the employer
and the workmen. He has to be in a contract of service not in contract for service. In simple
words there has to be a master servant relationship. Thus, an independent contractor cannot
be regarded as a workmen. Since there has to be an element of control over the workmen by
his master or employer.

Appointment letter, identity card, salary slip, duty roster can also be treated as a proof for the
existence of contract of employment.

Now in the case of Short v. J.W. Henderson, 1946, and Dharangdhara Chemical Works v.
State of Saurashtra, 1957, 4 basic components of the contract of employment were
established as follows-

1. Power of employer to appoint a person.

2. Employer’s obligation to pay remuneration
3. Employer’s control and supervision – what shall be done (control) and how it shall be
done (direction)
4. Power of employer to dispense with services and take necessary action.
It become very difficult to claim benefits under labour law without a contract of employment
talking about the term and conditions of employment. Thus, now its mandatory on the part of
the employer to issue a written contract of employment.

This concept of contract of employment was also discussed in these below mentioned cases-

1. Silver Jubilee Tailoring House v. Chief Inspector Of Shops,1973

2. Shining Tailors v. Industrial Tribunal, U. P, 1983
3. Hussainbhai, Calicut vs Alath Factory Thozhilali, 1978

Control Test

It is one of the most important test in order to determine the relationship between the
employer and the employee, as in whether the person amounts to a workmen or not. It has to
important facets as follows-

1. What work shall be done

2. How that work shall be done

However, in case of professionals, the second part is often not there and hence there are some
other tests to determine the status of person as a workman or not-

1. Mix test/ Multiple test

2. Organizational test/ Integrational test

Contract of employment is a matter of fact, it is the duty of the claimant to prove that there
exists a contract of employment in order to avail the benefits of the ID Act.

IR CODE 2020-

Other than worker this IR code has also defined the term employee under Section 2(l) which
is very different from each other.

Question- How does the definition of worker for the purpose Part III of the IR code is
different from Section 2(zr)? In simple words who is a worker for the purpose of trade union.

For the purpose of trade union any person who is engaged in trade and business would be
seen as worker. Thus any person engaged in trade and business activities can form trade
unions.

CONTRACT OF SERVICE AND COTRACT FOR SERVICE-

On the basis of control test-

In case of contract for service that is the independent contractor the second facet of the
control test which is, how the work shall be done is missing. Which makes the two different
from each other as in contract of service both facets are there.

Now in the case of Collins v. Hertfordshire County Council, 1947, the court has referred to
the distinction between contract of service that is a worker and contract for service that is the
independent contractor. The court observes that in one case the master can only tell about
what work has to be done whereas on the other case the master can not only tell about the
work that is to be done but also the how the work would be done.

On the basis of integrational test or organizational test-

In contract of service that is a worker is part and parcel of the institution where as in contract
for service that is the independent contractor is not the part and parcel of the institution.

Now in the case of Stevenson, Jordan Harrison Ltd v. MacDonald & Evans, 1952 the court
held that in contract of service a person is employed as a part of business and the work the
person do is also the integral part of business. Whereas in case of contract for service the
work is done for the business but not the integral part of the business. It is basically a part
time arrangement.

Difference between regular employees and Independent contractor (Jewel appraiser)

In the case of General Manager, Indian Overseas v. Workmen, All India Overseas Bank,
2006, the court held that jewel appraisers are not regular employees as they are employed for
specific assignment for particular period of time.

Parameters for the differentiation enunciated in that case were as follows-

1. A regular employee is subject to qualification and specific age however this is not
required in the case of jewel appraisers.
2. A regular employee is employed through a systematic way of recruitment which is not
the case in case of jewel appraisers who are directly appointed.
3. In case of regular employee there is fixed working hours, leaves, holidays,
disciplinary action which is not the case in jewel appraiser.
4. Monthly wages are paid to regular employees but to jewel appraisers no monthly
wages are paid only specific consideration for the work they have done.
 5. A regular employee is always under the control of supervision of the employer which
is not the case of the jewel appraisers. So, control test is missing in case of jewel
appraiser.
6. A regular employee is subject to transfer and have fixed age of retirement which is
not in the case of jewel appraiser.
7. A regular employee cannot participate in any other commercial activities whereas an
independent contractor like a jewel appraiser can.

Note: Designation of any person is not that important what is important is the functional
aspect as in exactly what the individual is doing.

For example if a manger is doing clerical work and his salary is also not exceeding Rs 10000
then by virtue of taking the functional aspect into consideration then he would be a workman.

This is discussed in the case of S.K. Maini v. Carona Sahu Co. Ltd ,1994 where the court
held that the designation of an employee is not of that much importance what is important is
the nature of duties that are being performed by the employee.

The case also discusses multifarious duties holding that just like incidental work, multifarious
duties performed by an individual cannot change the status of the individual as a workmen or
an employee.

For example- a manager performing clerical work for one month due to a vacant seat cannot
be treated as a workman under ID Act and vice versa.

Appropriate forum to determine the status of an employee-

Section 10 before 2010

In the case of Sharad Kumar v. Govt. Of NCT Of Delhi, 2002, reference was not made by the
appropriate government since the appropriate government is of the opinion that the person is
not a workman.

Adjudication over an industrial dispute can only be done by a labour court or an industrial
tribunal on the reference made by the appropriate government under Section 10 of the ID Act.
(Before 2010)

Section 2A (After 2010)

No reference is required, as a direct route is provided under this section to approach a labour
court. Further this concept of reference is dispensed in the IR Code 2020 except in the case of
National Tribunal.

As per Section 2A the appropriate authority to determine the status of the person is the labour
court or the Industrial tribunal.

TEACHER AS A WORKMAN

In the case of Federated School Teacher’s Association v. State of Victoria, 1929 the court
held that since teaching occupation is very different from that of an industry teacher cannot
be regarded as workman.

This judgment of the Australian HC is blindly followed in the judgment of University of

Delhi v, Ramnath, 1963 where the SC gave a very narrow interpretation to the term skill by
holding that intellectual skills does not come under the ambit of the term skill under Section
2(s) of the ID Act.

In the case of Corporation of city of Nagpur v. Employees, 1960 the court held that
educational institutions for the purpose of ID Act are industry. However this judgment is not
taken into consideration in the case of University of Delhi v, Ramnath, 1963.

However, in the Bangalore Water Supply & Sewage Board v. A. Rajappa, 1978, again it was
held that educational institution are industry. Then again in Miss A. Sundarambal v.
Government Of Goa, Daman And Diu, 1988, relying upon the 1929 and 1963 judgment the
SC came to the conclusion that educational institutions are not industry and thus teachers are
not workman.

Although the ID Act was amended in the year 1982 excluding the educational institutions
from the ambit of industry but it has still not come into force. After that in the case of
Haryana Unrecognised Schools Association v. State Of Haryana ,1996 the SC again taking
the abovementioned cases into consideration gave the narrow interpretation of the term
skilled and called teacher as literate person not skilled professionals, thereby excluding them
from the ambit of workman.

Then in the case of Ahmedabad Primary Teachers Association v. Administrative Officer,

2004, where an issue relating to payment of gratuity was under consideration the court again
relying on the abovementioned judgments held that they are not workman.
According to IR Code 2020 educational institutions are part of an industry (To be confirmed)

DISPUTE RESOLUTION MECHANISM

RESOLUTION OF DISPUTES THROUGH DIRECT ROUTE-

Sections 2A-

Individual dispute on termination of employment can be directly referred to an industrial

tribunal.

Section 9C-

Resolution of disputes through grievance redressal mechanism for establishments having

20/more workmen.

Section 33-

States that during pendency of dispute, no change can be made in conditions of service, etc.
No other Act provides for protection like this other than the IR Code 2020.

Section 33A-
States that if there is any change in the terms and conditions of employment of the worker
during the pendency of a dispute, then the aggrieved party can directly approach the same
agency for redressal of grievances.

Section 33C-

Allows recovery of money due from an employer , computation of benefits when there is no
dispute (but under an award, settlement or agreement) - aggrieved person can approach the
government - it is more of an execution proceeding. Empowered individual workmen to
recover amounts upon submitting an application under ID Central Rules, 1957 - contains
details of the recovery process + Section 10 application.

RESOLUTION OF DISPUTES THROUGH REFERRAL ROUTE

1. Settlement
2. Investigation
3. Adjudication

SETTLEMENT

Settlement of an industrial disputes can be further divided into two categories-

Bi-partite settlement-

It is basically a form of collective bargaining where parties themselves negotiate relating to

the settlement of industrial disputes to achieve better terms and conditions of employment. It
mainly involve the participation of two parties employer and representative of employers and
workmen or representatives of workmen.

Collective bargaining settlement or Bi-partite settlement is discussed in Section 2(p) of ID

Act which is settlement without conciliation officer or board of conciliation. Under this
parties negotiate and reach to a settlement which is then signed by both the parties and then
submitted to the appropriate government for enforcement. Further, Section 18(1) delas with
the binding nature of the settlement reached.

Tri-partite settlement-

This is also a type of settlement of an industrial dispute but also involves the interference of a
third party like a conciliation officer or board of conciliation where the conciliation officer
mediates between the parties. And when the parties agree to a settlement they sign it in front
of the conciliation officer for enforcement.

The biding nature of any tripartite settlement is discussed in Section 18(3) of the ID Act.
Further, the Section 4 deals with the appointment of a conciliation officer. It is a permanent
body; the work of conciliation officer is generally performed by a labour commissioner or
assistant labour commissioner. Other then this the functions performed by the conciliation
officer are mentioned in the Section 12.

In case of conciliation officer reference is not required but it is required in case of board of
conciliation. Section 6 deals with the functions and duties and formation of board of
conciliation and Section 13 regulates the functions performed by a board of conciliation. This
system of settlement through board of conciliation is abolished by the IR Code 2020.

Basic differences between settlement through board of conciliation and settlement

through conciliation officer-

1. Reference:
Reference is required in case of board of conciliation but it is not required in case of
conciliation officer
2. Composition:
Board of conciliation is made up of several members but conciliation officer if a
single individual.
3. Powers: Section 12 and Section 13 of the Industrial Disputes Act.

INVESTIGATION

If the appropriate government is of the opinion that more facts needs to be find then the
appropriate government refers the matter to investigation by a court of inquiry. The only
purpose of court of inquiry is to collect more facts in accordance of the reference made.
Appropriate government constitutes a court of inquiry.

ADJUDICATION

Basically there are three modes of adjudication under the ID Act-

Labour court

Industrial tribunal
National tribunal

Further anytime before the dispute has been referred to a labour court parties may enter into
some kind of written agreement to refer the dispute to and arbitral tribunal under Section
10A. at one time a dispute can either be in the labour court or industrial tribunal or arbitral
tribunal not in two at the same time. Thus if a dispute is pending in the labour court then it
cannot be referred to an arbitral tribunal and vice versa under Section 10A

The basic function of an arbitral tribunal is the adjudication of any industrial dispute between
the specified parties. Further, in the case of Rohtas Industries v Staff Union, 1975 jurisdiction
of an arbitral tribunal is discussed limiting the jurisdiction to industrial disputes only not
individual disputes.

ADJUDICATION UNDER IR CODE 2020

1. System of board of conciliation under settlement has been abolished.

2. System of court of inquiry under investigation is also abolished
3. Also abolished the reference of dispute to a labour court since it is now done away
with the concept of labour court,
4. Industrial tribunal under IR Code 2020 has both Original and appellate jurisdiction.

Appellate jurisdiction of an industrial tribunal-

1. An aggrieved person can approach an industrial tribunal against any decision of an

arbitral tribunal
2. An aggrieved person can also approach an industrial tribunal against the decision of
EPF commissioner under the Act of 1952 as well.

Under the ID Act there is no appellate jurisdiction of an industrial tribunal.

Further, day to day disputes can also be resolved through works committee which is
constituted under the Section 3 of the ID Act and IR Code 2020, when more than 100
workmen are there. However, this committee can only deal with the resolution of day to day
disputes not industrial disputes.

INVOLVEMENT OF ADMINSITRATIVE LAW IN THE FUNCTIONING OF

LABOUR COURT, INDUSTRIAL TRIBUNAL AND NATIONAL TRIBUNAL-

Administrative law always comes into action when state is involved and since labour court,
industrial tribunals and national tribunals are created by the state there is an involvement of
administrative law. Further, state is also a stakeholder in labour laws. Further some
appointments are also made by the state such as conciliation officer.

REFERENCE

NEED FOR A SYSTEM OF REFERENCE-

1. Filtration process: We need a system of reference under Section 10 of the ID Act for
the filtration of disputes by only referring genuine disputes.
 2. To stimulate resolution of disputes at local level as parties are called to resolve the
disputes before making reference.
3. To share the burden of High court and labour court, since it is considered to be the last
resort and only genuine desirable disputes are refereed by the appropriate government.

These things are discussed in the case of Rajasthan Sate Road Transport Organization v.
Krishan Kant ,1955 which was again recapitulated in the case of Rajasthan Sate Road
Transport Organization v. Rajesh Kumar Sharma, 2020.

Reference for adjudication is the last resort for the resolution of the dispute by the appropriate
government. Further, though the appropriate government has the discretionary power to refer
the dispute but there are certain essential conditions which needs to be fulfilled before such
discretionary power is exercised when it is sure that an industrial dispute exists or there is
apprehension of an industrial dispute or a threat of the same. It can refer industrial disputes
through following ways-

1. Can refer the dispute to the board of conciliation or conciliation officer for settlement
under Section 5 and 13 of the IDA
2. Can refer the dispute to court of inquiry for further investigation under Section 6 and
14
3. Reference to a labour court for matter relating to Schedule II and Schedule III as well
if the matter involves less than 100 workmen in accordance with Section 7 and 11 of
IDA
4. Reference to an Industrial Tribunal for matter under Schedule II and Schedule III in
accordance of Section 7A and 11
5. Under Section 10A reference can be made to arbitral tribunal on the basis of a written
agreement between the parties.
6. Reference to National Tribunal- Only be done by the central government as
appropriate government in cases of-
a) Question of national importance
b) Two or more states are affected or involved
c) Other proceeding deemed to have been quashed
d) No labour court or tribunal has powers

Section 10 of the ID Act provides for the power of dual reference to the appropriate
government and thus it can be divided into 2 parts-
Discretionary Reference-

Situations in which it is left to the discretion of the appropriate government to make a

reference or not under Section 10 o the ID Act.

Mandatory Reference-

There are certain conditions under which the appropriate government has no discretion over
reference and have to refer the industrial dispute-

1. If an application for reference has been submitted by concerned parties and the
appropriate government is of the opinion that it is submitted by majority of workers
then in that case there is no discretionary power it has to make a reference in
accordance with Section 10(2) of the ID Act.
2. If the dispute is related to public utility services and notice under Section 22 has been
given and the appropriate government has verified the validity of the notice then it has
no discretion over reference and has to make reference.

Section 22 deals with the declaration of strike or lockout in case of public utility services,
now no strike can be declared without giving a prior notice and the moment the notice is
given to the employer, he shall forward the notice to the conciliation officer under the
appropriate government for further action. And the moment such notice is received by the
appropriate government they shall make a reference since they have no discretion.

If the notice under Section 22 has been submitted to the appropriate government in case of
public utility services and the appropriate government does not make a reference then the
remedy available to the aggrieved person is to approach HC through writ under Article 226.
Writ of mandamus can be issued and the appropriate government can be compelled to make a
reference. Since there is no appellate authority that has been created by the ID Act or the IR
Code 2020.

Further, the central government as an appropriate government can make a reference to

industrial tribunal or labour court created by the state government but the state government
cannot make a reference the national tribunal created by the central government.

The HC or any other court cannot compel or dictate an appropriate government to make a
reference as that would be in violation of the principals of natural justice. It cannot compel
until and unless there is any kind of abuse of the discretionary power by the appropriate
government in not making the reference as that would be subject to judicial review under
Article 226.

NATURE OF ACTION PERFORMED BY THE APPROPRIATE GOVERNMENT

UNDER SECTION 10

In Telco Convoy Drivers Mazdoor Sangh v. State of Bihar, 1989 around 900 telco drivers are
temporarily appointed by the company now the workers association supported their cause for
the regularization of their services. Which was presented in front of the labour commissioner
who refused to make a reference, arguing that they are not workmen and hence not covered
under the ID Act. Then an appeal under 226 was filed before the HC but the HC again upheld
the decision of the labour commissioner and thus the matter was taken to the SC.

The SC analysed the nature and scope of the powers exercised by an appropriate government
under the Section 10. The issue before the SC is whether the power of an appropriate
government is-

1. Quasi-judicial
2. Quasi- legislative
3. Pure administrative action with or without civil consequences.

The SC came to the conclusion that the nature of the action of the appropriate government
under Section 10 is a pure administrative action with our without civil consequences. Thus
the SC held that the appropriate government was acting outside the scope of its nature of
action by trying to be a quasi-judicial authority.

Similar facts were also there in the case of Miss A. Sundarambal v. Government Of Goa,
Daman And Diu, 1988 and Sharad Kumar v. Govt. Of NCT Of Delhi, 2002, where reference
was not made by the labour commissioner on the ground that the concerned individual is not
a workman. While in the former the case was related to a teacher which was well established
in previous judgments that they are not workmen and thus the SC upheld the decision of the
HC. But the latter is related to an area sales executive, whose status as workmen is not well
established and hence the SC like the Telco driver case overruled the decision of the HC.

Conclusion-

The labour commissioner or the appropriate government is not allowed to delve in the merits
of the judgment and cannot adjudicate upon the same and does not determine the rights and
liabilities of the parties as a general rule under Section 10 but in case there is a well-
established principle like in the case of teacher in the 1988 case then the labour commissioner
can decide as in whether to refer the dispute or not.

Further in the case of State of Madras v. C. P Sarathy, 1953 the court held that the Section 10
deals with an administrative action and thus the appropriate government must form an
opinion based on the facts, it should not adjudicate upon the dispute, should not determine the
rights and liabilities of the parties as the person is workmen or not, or the industrial institution
is an industry or not or the dispute is an industrial dispute or not, as the same should be
decided by the labour court or industrial tribunal after making the reference. (This case
beautifully analyses the nature and scope of appropriate government under Section 10).

Before the case of Sultan Singh v. State of Haryana, 1996 this specific action under Section
10 is only seen as a pure administrative action and there were no discussion over civil
consequences but after this case the SC has made very clear that this action also involve civil
consequences.

As a result of this the appropriate government is required to issue a speaking order and is
required to provide proper justification as in why reference is made or reference is not made.
Further, there is no requirement or prior hearing or prior notice what is important is that there
must be speaking order or reasoned order as in why the reference is rejected by the
appropriate government.

There are some principles which are laid down regarding the nature and scope of reference
under Section 10-

1. The appropriate Government would not be justified in making a reference under

Section 10 of the Act without satisfying itself on the facts and circumstances brought
to its notice that an industrial dispute exists or apprehended.
2. The order of the appropriate Government making a reference under Section 10 of the
Act is an administrative order with civil consequences and not a judicial or quasi-
judicial one.
3. An order made by the appropriate government under Section 10 of the Act being an
administrative order no lis is involved, as such an order is made on the subjective
satisfaction of the Government;
 4. If it appears from the reasons given that the appropriate government took into
account any consideration irrelevant or foreign material, the court may in a given case
consider the case for a writ of mandamus and;
5. It would, however, be open to a party to show that what was referred by the
Government was not an industrial dispute within the meaning of the Act.
6. The appropriate government should issue a speaking order. This last point clearly
shows that the action taken is an administrative order with civil consequences.

Then in Syndicate Bank v. Government of India, 1985 where the central government
declined to refer the dispute on the grounds that charges were proved in a proper inquiry and
thus the punishment of stoppage of increments was justified. The court held that reference
has to be made as the appropriate government has no power or discretion to deal with the
merits of the dispute. As in whether the punishment is fair or not fair, whether the inquiry
was fair or not fair.

Then in Sarva ShremiK Sangh v. Indian Oil Corporation, 2009 the SC recapitulated all the
issues regarding the nature of scope of the appropriate government to make a reference.

HOW TO DETERMINE THE STATUS OF APPROPRIATE GOVERNMENT-

Central government would be the appropriate government in a industrial dispute where the
industrial establishment is controlled funded or owned by he central government. For
example- SBI, LIC, EPFO etc.

State government would be the appropriate government where the industrial establishment is
controlled funded or owned by the state government or any other private establishment which
is in the territory of the concerned state.

Further, in cases where the industrial establishment is in a union territory then the central
government would be the appropriate government. Except in the case of Puducherry and
Delhi where there are state legislatures.

In the case of Lalbhai Tricumlal Mills v Vin D,M, 1955, services were terminated of a
workman due to closure of branch office in Bombay from accompany which has their
registered office in Ahmedabad. Filed a suit in Bombay Labour Court under the Bombay
Industrial Relations Act, 1946 but the reference was questioned on the ground that the head
office is in Ahmedabad thus the cause of action arose in Ahmedabad as a result of which the
matter is out of the jurisdiction of the Bombay Labour Court.
The Bombay HC relied on the principals regulating jurisdiction under civil code. “There must
be a nexus between the territory and the dispute: the ID Act does not deal with the causes of
action, nor does it indicate what factors will confer jurisdiction upon the Labour Court. But
applying the well-known tests of jurisdiction, a Court/Tribunal would have jurisdiction if
parties reside within jurisdiction or if the subject-matter of the dispute substantially arises
within its territorial jurisdiction.” Here the cause of action has been taken into consideration
for the determination of the status of the appropriate government.

The observation of made by Mr. Chagla were later followed by various judgments ignoring
the principal laid down under Section 2(a) for the determination of the appropriate
government for the convenience of the workmen. Sometime they go with the cause of action
rule and sometime by the principals laid down under Section 2(a). The judgments are as
follows-

Workmen of Shri Rangavilas Motors Private Ltd v. Company, 1967-

Head office in one state controls activities of employees working in company in other states,
no other branches - exercise control over activities. Same principles reiterated. The judgment
later followed by Heavy Engineering Mazdoor Union v. The State Of Bihar, 1969

HAL v Workmen, 1975 (No.1):

Head office in Bangalore, industrial establishments and branches across the country and the
dispute concerned with Barrackpore branch relating to remuneration and allowances. West
Bengal made reference which was challenged by HAL arguing that the government of Wet
Bengal had no jurisdiction to make reference (since HAL is controlled, funded and owned by
the Central Government and thus only the central government can refer). The Labour Court
and High Court held the WB government’s reference to be valid on the basis of the place
where cause of action arose, HAL Barrackpore branch was treated as an independent
company (controlling its own activities within the particular area). SC held that since the
dispute was in respect of workers employed in Barrackpore, then cause of action arose there -
the branch was independent with respect to administrative activities and thus the reference
was valid. The judgment was later followed in the case of FCI Worker Union v FCI, 1985.

Steel Authority Of India v. National Union Water Front, 2001:

Relating to the determination of the status of appropriate government in a case involving the
regularization of contractual labour. Principle laid down under Section 2(a) were taken into
consideration and central government was held to be the appropriate government.

HAL v Hindustan Aero Canteen Karamchari Sangh No.2 (2002):

Bench of 3 judges mainly relying on SAIL judgment 2001. Ignoring all other judgments and
held the central government to be the appropriate government.

BSNL v Bhurumal, 2013:

No discussion over the place of cause of action, central government was held to be the
appropriate government since BSNL comes under the central government.

Nasik Workers’ Union v HAL No.3 (2016):

Bench of 2 judges and dispute is relating to the recognition of TU and prohibition of unfair
labour practices. Overruled a 3-judge bench judgment and reiterated the HAL-1 and HEMU
judgement.

This is the entire labour jurisprudence regarding the determination of the status of appropriate
government regarding jurisdiction.

Conclusion- Thing are not clear as of yet regarding this determination of the status of
appropriate government regarding jurisdiction.

Reference and terms and condition of reference-

Reference is done by the appropriate government which further formulates the terms and
conditions of reference. Terms of reference are supposed to be very specific as in whether the
person has to be reinstated or whether the court should recognize a trade union.

So there are two questions which needs to be answered here-

1. Whether a labour court can deviate from these terms and conditions of reference or go
beyond the terms of reference as provided by the appropriate government.
2. Whether these terms of reference can be amended, superseded or withdrawn by the
appropriate government.

Modification of terms of reference by a LC/IT/NT/BOC-

It cannot happen as these courts and tribunals have very limited jurisdiction as held in the
following cases-

1. JK Iron & Steel v. Iron and Steel Mazdoor Union, 1956 : a labour court cannot go
beyond the terms of reference. Although incidental and ancillary modification are
allowed but substantial modifications are not allowed.
2. Oshiar Prasad v Employers, 2015: Cannot go beyond the terms of reference but
incidental and ancillary modification are allowed as long as it protects the interests of
workmen and labour law.

Withdrawal or cancellation or overriding of terms of reference by the appropriate

government-

There is no discretion with the appropriate government to withdraw, supersede or cancel the
terms of reference, it can only be done in case of transfer of proceedings as held in the case of
State of Bihar v DN Ganguli,1985

Amendment to the terms of reference by the appropriate government-

Clerical and incidental changes relating to name can be done but not more than that, that too
can only be done by the appropriate government not the court or tribunals as held in the case
of Dabur v Workmen, 1976 and Madan Pal Lal v State of U.P, 2000

RES JUDICATA AND REFERENCE UNDER SECTION 10-

Res Judicata is a phrase which is defined in Section 11 of the Civil Procedure Code has been
evolved from a Latin maxim, which stands that the thing has been judged which means if an
issue is brought in the court and it has already been decided by another court, between the
same parties and which has the same cause of action then the court will dismiss the case
before it as being useless.

Now the question is whether this concept of res judicata can be applied to the concept of
reference so as to bar the appropriate government from making subsequent references. No,
this is not applicable to the reference made by the appropriate government as the inclusion of
these technical concepts will defeat the purpose of ID Act. As labour law is for the speedy
disposal of industrial disputes and is informal for that purpose and thus these formal technical
concepts cannot be included.
Another question is that, is there any specific time limit to make a reference? No there is
nothing in Section 10 which specifies any particular time limit to make a reference. But there
is time limit to file an industrial dispute under Section 2A to the appropriate government for
reference which is 3 years from date of cause of action, which is further reduced to 1 year by
some states. As held in the case of UPSRTC v Babu Ram, 2006

Hypothetical-

Suppose there are some workmen and they are victimized by the employer as a result of
which they approached the appropriate government to make a reference for claiming damages
from the employer. Can this reference made by the appropriate government can be
questioned?

First thing which has to be seen is whether this dispute amounts to an industrial dispute or not
and there is an apprehension or threat of the same, then only the appropriate government can
make a reference. Dispute regarding the specific issue cannot be referred as held in the case
of Rohtas Industries v Staff Union, 1975.

EXHAUSTING ALTERNATIVE REMEDY-

Is a worker supposed to use the alternative remedy such as available under 226 and 136 or in
house mechanism before approaching the appropriate government under Section 10.The
workers are not supposed to exhaust alternative remedies before approaching an appropriate
government under Section 10 as held in the case of Jai Bhagwan v Ambala Central
Cooperative Bank Ltd,1984.

Further, there are no scope of sub-delegation in appropriate government under Section 10.

CAN CAT/SAT/JAT ADJUDICATE OVER ID ACT MATTERS

Section 28 of the Administrative Tribunals Act accords very broad jurisdiction with the
administrative tribunals power to review and all which are not given to Labour Courts
ordinarily. Accordingly, if all requirements such as holding a civil post are met,
administrative tribunals can adjudicate over Industrial disputes. Further, it is not compulsory
for someone to exhaust alternate remedy u/IDs Act before approaching the ATs for
adjudication.
CAT has the jurisdiction to deal with service matter disputes relating to government servants.
Further, if the central government employees fulfils the requirement of ID Act then they can
approach the labour court or any other court under the Section 10 of the ID Act.

The labour court or the ID Act does not have jurisdiction to deal with disputes relating to
recruitment as the ID Act is only applicable to a workmen. However, the administrative
tribunals have jurisdiction of these cases as well. However there is an exception which is
made because of the interpretation of any person by the Dimakuchi Tea estate case, according
to which if the individual dispute of the person is supported by the trade union or other
workmen or direct or substantial interest is proven then in that case recruitment related cases
can also be adjudicated by the labour courts.

Further, withdrawal of support or espousal by the trade union or workers from an individual
dispute would not affect the validity of the dispute once the reference has been made by the
appropriate government.

GROUNDS ON WHICH REFERENCE CAN BE CHALLENGED-

1. Since making reference is a pure administrative action with civil consequences there
is an essential requirement of a speaking order. Absence of the same would amount to
the violation of principals of natural justice and thus would be questioned.
2. If the matter has been adjudicated by the appropriate government as in whether it is an
industrial dispute or not unless there is a well-established principle as the same would
amount to abuse of the discretionary power conferred upon the appropriate
government. They only have to see the facts and then conclude whether it should be
referred or not cannot delve into the merits of the case. Ass held in the case of British
India Corporation v. IT Punjab, 1957
3. If no industrial dispute exists and the appropriate government was wrong in making
an opinion of referring the dispute.
4. Doctrine of ultra vires: that the reference is contrary to the ID Act, it usually happens
in cases where the industrial dispute is pending before the arbitral court and still
referred to the industrial tribunal or any other court or vice versa.
5. Appropriate government which made the reference in actual is not an appropriate
government.
6. Appropriate government while making a reference relied upon irrelevant facts,
irrelevant material, and acted irrationally.
 7. Further an industrial dispute can only be raised in a living industry not a dead industry
and thus a reference made in such case would also be valid as held in the case of
Andhra Prabha Ltd. v. Secretary, Madras Union Of journalists, 1967

CONSEQUENCES OF A REFERNCE-

1. As per the Section 22 and Section 23 of the ID Act, during and after (for 17 days in
case of conciliation officer and 2 months in case of adjudicatory machinery like
labour courts) the pendency of dispute strike and lockouts cannot declared by the
workmen.
2. No terms and conditions of employment can be changed during the pendency of the
dispute and in such a case an aggrieved person can approach the same agency for that
purpose as per the provisions of Section 33A. these two sections are not only
available to workmen only but employees too.
 WORKS COMMITTEE

Section 3 of the ID act and Section 3 of the IR Code 2020 deals with the concept of a works
committee. There is a requirement of minimum number of workers which is required to be
fulfilled before the constitution of a works committee and that is 100 workers. There is also a
procedural requirement for the election of members to the works committee as well. Works
committee is an instrument of Article 43-A which talks about the workers participation in the
management.

Works committee deals with day-to-day issues of workmen such a safety, working conditions
etc. it is further recognized under several acts as follows-

1. Section 48 of BIRA, 1946

2. Section 21 of Central 7 Berar IDs Settlement Act 1947
3. Section 36 of MPIRA 1960
4. State of Gujarat: Joint Management Council
5. State of Maharashtra: Recognised TU
6. Section 3 of the ID Act, 1947
7. Section 3 of the IR Code 2020

SIGNIFICANCE OF HAVING A WORKS COMMITTEE-

The recommendation made by the works committee are not binding on the employer. Further
to this works committee cannot represent workers in industrial disputes in adjudication like
trade unions. The significance and objectives of having works committee as follows-

1. Ensure the participation of workmen in the management of the industrial institution

and thus develops a sense of partnership between employer and workmen.
2. Promotes harmony and reach to amicable solutions to day-to-day problem of the
workmen.
3. Deal with local issues or incidental issues relating to the working conditions of
employment. Promotes industrial democracy.
4. To strive to minimize the difference of opinions in regard to matters of mutual
interests
5. To smooth away the friction that might arise in day to day dealing between parties
NATURE AND SCOPE OF THE FUNCTIONS OF THE WORKS COMMITTEE-

Whether the member of the works committee can represent workmen for the purpose of
collective bargaining, this question along with other thing relating to the nature and scope of
works committee are discussed in the case of North Brook Jute Company Ltd v
Workmen,1960 where employers wanted to deduce a rationalisation scheme, which the
workers had opposed on the apprehension that the scheme would burden them with additional
work. However, the scheme was approved by the Works Committee in an extraordinary
meeting. Thereafter, notices under Section 9A were sent which deals with change in terms
and conditions of employment, as a consequence workers refused to do additional work as
the same is not authorized by the previous terms and conditions of employment and therefore
a lock-out was declared. Appropriate Government referred this industrial dispute to the
industrial tribunal and later to the SC which held that the work committee cannot represent
the workers in collective bargaining as the work committee has a specific mandate and that
specific mandate does include collective bargaining. The court further held that it cannot
represent workers other than matters mentioned under the Section 3 of the ID Act.

PROBLEMS WITH THE WORKS COMMITTEE-

This institution of a works committee has been abolished by various states such as UP and
MP because of the following reasons-

1. Decision made by the works committee is not binding upon the employer and thus
only have consultative role or a medium.
2. Employer has to provide infrastructure for elections and thus see this as an extra
financial burden.
3. No powers are given to the works committee under Section 3 of the ID Act.
 CONCILIATION OFFICER

Section 4 of the ID Act deals with the concept of conciliation officer. A conciliation officer is
permanent body and not an ad hoc body like other institutions. Generally this position is
given to labour commissioners or assistant labour commissioners. If a conciliation officer is
appointed by the appropriate government without releasing any notification of the
appointment in the official gazette then that appointment would be illegal as per the Section 4
and 5 of the ID Act. and also observed in the case of Jhagrakhand Collieries Pvt Ltd v CGIT,
1975,

The notification through an official gazette is required for the following purposes-

1. Sensitization
2. Authorization of the appointment

Nature and functions performed by a conciliation officer-

1. To be part of the process of tri-partite settlement of disputes.

2. To be a part of court of inquiry in case of investigation of disputes.
3. The major function is to promote settlement of dispute by assisting and bridging the
gap between the parties for the settlement of disputes or to reach amicable solution.
4. The conciliation officer cannot make a party to reach a particular settlement and
cannot even adjudicate upon the matter, he is there to facilitate the process of
resolution of dispute through settlement. In Jaswant Sugar Mills Ltd v Laxmichand,
1963 it was held by the court that conciliation proceeding are purely administrative in
nature. Further in the case of General Manager, Security Paper Mills v RS Sharma,
1986 it was held that even though a CO is not competent to adjudicate disputes b/w
the management and its workmen, s/he is expected to assist them in arriving at a just
and fair settlement - has to play the role of an advisor/friend of both parties + see that
neither party takes undue advantage of the situation.
5. He has some mandatory as well discretionary functions. An example of the former
can be the duty to sign the copy of the settlement which is reached, take the sign of
the parties and submit the same to the appropriate government. If there is no
settlement, then the Conciliation officer must submit a failure report to the appropriate
government (within 14 days from the date of initiation of the conciliation proceeding)
 then the appropriate government will then take necessary action (will decide if
reference or investigation into a matter is needed).
6. The conciliation officer has no discretionary power in case of pubic utility services
but has discretionary powers to start the conciliation in case of non-public utility
services which is now dispensed under the IR Code 2020.

What if settlement is arrived at after the 14 day-period?

As per the Section 9(2) of the ID Act a settlement will not be held invalid only because it is
arrived at after 14 days as held in the case of State of Bihar v Kripa Shankar Jaiswal,1960
where conciliation proceedings are continued beyond 14 days and report is not sent within
prescribed time, proceedings held to be valid. Though the contravention of section 12(6) may
amount to a breach of duty on part of the Conciliation officer but it does not affect the
legality of settlement award. Parties may arrive at settlement even after submission of the
failure report. This show how welfare-based interpretation for labour law has been done by
the judiciary.

Further to this, as per the Section 36(3) of the ID Act, no party to a dispute shall be entitled to
be represented by a legal practitioner in any conciliation proceeding under this Act or in any
proceeding before a Court but it is hardly followed in practice as lawyers make the matter
complex + tribunals headed by judges (they bring their legal experience into play: makes a
matter further technical).

Then as per Section 36(4) In any proceeding before a Labour Court, Tribunal or National
Tribunal, a party to a dispute may be represented by a legal practitioner with the consent of
the other parties to the proceedings and with the leave of the Labour Court, Tribunal, or
National Tribunal.

Application of res judicata to conciliation proceedings

The doctrine is not applicable, since the performed function is administrative in nature and
concerned with resolution of disputes (not adjudication). Settlement can also be arrived at on
a holiday.

Other than this, Conciliation officer has no power to sub-delegate powers to others: since
there is no provision which permits delegation. Further there is no power which is conferred
on the appropriate government under which it can restrict the jurisdiction of the conciliation
officer in any situation as held in the case of Karnataka State Tool Daily Wages v State of
Karnataka, 1996

Difference between Section 33C and Section 10-

1. Reference is not required in case of 33C but reference is required in Section 10

2. Section 10 delas with the adjudication of disputes, whereas Section 33C deals with
execution of disputes. As Section 10 deals with determination of right and liabilities
and Section 33C with the computation of entitlement.

These tribunals perform various functions other then the adjudication of disputes, but they do
not have any suo-motu jurisdiction , it only deals with matter when approached by the parties
or matter is referenced by the appropriate government.

A labour court is bound by the terms and conditions of reference it cannot dilute or modify
the terms of reference, otherwise it would be ultra vires. Further it cannot add additional
charges as held in the case of Oshiar Prasad v. Employees in relation to Management of
S.C Washery, 2015 and Kapra Mazdoor Ekta Union v. Management of Ms. Birla Cotton,
2005.

Further, matter relating to compensation, claiming damages for victimization or harassment

or computation of entitlement cannot be taken under these labour tribunals unless the matter
is an industrial dispute. At the same time, employer cannot recover compensation for the loss
of production due to illegal strike as the IDA does not deal with computation of cost and
benefits.

Difference between the composition of labour courts and tribunals under the IDA and the IR
Code-

Under IDA it is just one person, the presiding officer but under the IR Code there are two
person one is judicial member and the administrative member.

What are the implication if unqualified person is appointed as the presiding officer of a
labour court?

An appeal can be filed for judicial review under Article 226. In the case of State of Haryana
v. Haryana Co-operative Transport, 1976 registrar of a pension tribunal was appointed as
the presiding officer of labour court. Thus after the award was passed by the presiding
officer, matter was appealed in the SC which held that an award passed by an unqualified
person is null and void.

ADJUDICATORY MECHANISM
 STRIKE AND LOCKOUT

Strikes in Indian context is different from those of other countries, as in Japan strike does not
mean - not discontinuing of work, but instead they stop issuing tickets to passengers. While
in Indian context strike means secession/stoppage of work, concerted refusal of work by
workers. It is a mode of collective bargaining which is why right to form association is
related to right to strike. Strike in Indian context is complete secession of work.

Process of strike is given under the Section 22 of the IDA. This Section also enunciates the
prohibition of strike in PUS.

List of public utility services is given under first schedule of the IDA. Whether strike can be
declared in case of public utility services?

Yes strike can be declared in case of PUS but only after giving a prior notice. Further,
distinction between public utility services and others services has been removed by IR Code,
Since under this, prior notice is required in all cases of strike.

Whether right to strike is a legal right?

These rights are related to right to form association under Article 19(1)(c), however as per the
case of Kameshwar prasad v. State of Bihar,1962, T.K Rangarajan v. Govt of Tamil Nadu,
2003 and V.R Singh v. VJ, 1990 there is not fundamental or legal right to strike. However,
right to strike is recognized right owing to the Section 22 of the IDA and regulated by IDA
and TUA. So it is treated as a recognized right. Since strike amounts to secession of work, it
amounts to breach of employment. However, this breach of contract is protected by Section
22 and 23 of IDA and the Section 17, 18 and 19 of the TUA.

In the case of Bank of India v. T.S Kelawala 1990, the court held that when there is no work
there is no pay. However in the 5-judge bench case of Syndicate Bank v. Nayak 1994 the
court although approved the judgment of Kelawala but criticized the judgment as it does not
consider legal strike as valid, thereby violating the principal of proportionality.

Why is strike required/ Why do workers go on strike?

It is a last resort, can be declared in case of serious disputes. The court in the case of
Swadeshi Industries Ltd v. Employees, 1990 the court held that right to strike is tool for
intimidation and coercion as well as collective bargaining to fulfil their demands, however it
must be treated as a last resort. Further, similar observations were made in the case of
Morgan v. Fry 1968.

Section 2(q)-

Defines strike as a cessation of work by a body of persons employed in any industry acting in
combination or a concerned refusal, or a refusal under a common understanding, of any
number of persons who are or have been so employed to continue to work or to accept
employment;

Section 2(l)-

Defines lockout as “lock-out” means the temporary closing of a place of employment, or the
suspension of work, or the refusal by an employer to continue to employ any number of
persons employed by him;

Lockout and strike are antithesis to each other. These are temporary actions taken by
employer and employees respectively. On the other hand, closure is permanent.

Section 20 –

After the commencement and conclusion of proceedings - no strike can be declared during
the pendency of proceedings before the conciliation officer.

Section 22, 23,24 –

Deal with the procedural requirements for declaration of strike.

Whenever workers declare strike, they conspire to refuse to work. Members of registered
trade unions are protected by trade unions act section 19 for conspiracy , but not those of
unregistered trade unions. They are protected from charges of conspiracy, breach of contract
etc.

Section 34-

Deal with prosecution proceedings

Deemed strike –
Under the Section 9(2) of Payment of Wages Act if ten or more employed persons acting in
concert absent themselves without due notice (that is to say without giving the notice which
is required under the terms of their contracts of employment) and without reasonable cause,
then as a penalty 8 days wages would be deducted this is a clear violation of doctrine of
proportionality.

Section 2(zk) defining strike in the IR Code if more than 50 percent concerted casual leave by
are absent on any given day, it would be deemed a strike.

Is strike a breach of contract of employment or service?

Yes, it is as it is against the mandate of working under the contract of employment. Although
its legality and validity can be questioned and it is a breach of contract of employment but it
is protected under the IDA and TUA as held in the case of Syndicate Bank vs K. Umesh
Nayak, 1994

What are the essential requirements of strike for IDA-

1. Cessation of work-
a) Temporary suspension or stoppage of work
b) Duration is not relevant under this it can be of 5 min or 1 day.
c) Concerted voluntary refusal of work by the workers but should not be
characterized by coercion
d) Refusal of workers to work due to absence of safety equipment etc, which is a
matter of fact.

A hunger strike will qualify as strike under the IDA if it involves cessation of work and on
similar lines a sympathetic strike would also qualify as a strike if there is cessation of work.

Sympathetic strike is a strike which is of two types-

Primary strike where workers raise their own issues, involves direct conflict between the
employers and workers within the same establishment .

Secondary strike - when workers of a different establishment support the workers of another
establishment in support. Secondary strike is not recognized by the IDA.

2. Participation-
a) Concerted collective efforts
b) Voluntary
 3. Workers who have declared strike must have been employed to work or to continue to
work. There cannot be any strike in case of closure of establishment, because in that
case there is no question of discontinuation of work
4. Demand and rejection - the workers have made a demand from the employer, and it
has been rejected. The demand must be related to terms and conditions of
employment. This is the most important element as if it is not there then strike would
be declared illegal and workers as no strike can happen without an industrial dispute
and no dispute can exist without a rejection of demand as held in the case of Mill
Manager, Model Mills Nagpur v. Dharam Das, Etc. 1957
5. Strike must be the last resort, should not be done for trivial reasons.

Classification of strike

Legal strike is a strike which satisfies the conditions necessary for declaration of strike under
the IDA. Whereas an illegal strike is a strike which is not declared according to the
provisions of the IDA.

Justified strike is one which is declared for serious issues, and not for minor issues. If it is not
treated as a last resort, it cannot be considered a justified strike and would be an unjustified
strike.
In simple words, if a strike fulfils all the above-mentioned essential components of a strike
then it would be a legal and justified strike. Essential services Maintenance Act, by invoking
this act, strike can be declared illegally.

For example- as held in the case of Bata ltd v. workmen 2022 and Jay Engineering Works
v. State of West Bengal gherao or wrongful restraint was not held as a justified strike.

Sympathetic strike –

This is a secondary form of strike which happens because of sympathy with workers in other
industries but is not considered a justified strike because it is not related to their own causes.
This kind of strike is punishable. This is unjustified but not illegal as held in the case of
Crompton Greaves Ltd. v. Its Workmen, 1978

General strike-
Collective strike is a strike which is done by all or most of trade unions in the industry. This
kind of strikes usually happens against the disinvestments policies of the state. Such as banks,
railways.

Sit down strike -

Also known as pen down strike or tool down strike or stay in strike, in this kind of strike
workers occupy the place of work but they do not work they put down their tools, his seen as
a serious misconduct and thereby an unjustified strike. This case deals with the same Bata ltd
v. workmen 2022.

Go slow strike –

Also discussed in the Bata case in this kind of strike workers continue to perform their work
but slow down their pace of work. In Bata case this happened, they did not stop production
but did not meet the targets on purpose. Their wage was reduced without conducting any
enquiry. The SC has not talked about what were the grievances of workers. The judgement is
related to non-application of PNJ. Since wage was deducted without enquiry, such an action
was declared illegal by the SC. Further as held in the case of SU Motors Pvt Ltd 1990 a go-
slow strike is a sign of serious misconduct.

Lightning strike-

Also known as wild cat strike/quickie strike in this kind of strike without notice or at very
short notice strike is declared suddenly with an element of surprise, and thereafter bargaining
takes place. Used as a tool of coercion. This cannot be done in case of public utility services,
can only be done for non-PU services under IDA (section 22). However, in Section 62 of IRC
this cannot be done in any kind of strike

Hunger strike-

This kind of strike can be treated as a strike only when there is cessation of work. If the
merely refrain from eating then it would be considered as legal strike.

Employer cannot demand damages for the loss of production because of a go-slow strike by
the workers, under the ID Act employer cannot do so. Section 17 - no suit can be filed against
members of trade union, in case the union is involved in some kind of strike related activity if
it is legal strike

Section 22- public utility services

This section talks about the provisions for prior notice in case of lockout and strike . Lockout
is imposed by the employer on the employees to prevent them from working, while a strike is
imposed by the workers. Whether the requirement of prior notice is necessary or not as in
whether it can be dispensed with or not?

Notice is not required in case when the strike is already in existence but for all the other
strikes under the IR Code need 60 days prior notice while in case of IDA 6-week prior notice
is only required in case of PUS and other strikes no notice is required. Further no strike can
be declared within 14 days of giving notice.

Section 20-

No strike can be declared during the pendency of proceedings before the conciliation officer
and seven days thereafter.

Section 23 –

No workman who is employed in any industrial establishment shall go on strike in breach of

contract and no employer of any such workman shall declare a lock-out—

a) During the pendency of conciliation proceedings before a Board and seven days after
the conclusion of such proceedings;
b) during the pendency of proceedings before Labour Court, Tribunal or National
Tribunal] and two months after the conclusion of such proceedings;

When union which has declared strike is not registered, the strike will still be legal. There is
difference between recognition and registration of trade union. Legality of strike is related to
procedural requirements whereas justifiability is related to the objectives of the strike.

Illegality and legality of strike

Situations in which strike can be declared illegal under IDA

a) In case prior notice is not given in case of PUS

b) If strike is declared during pendency of conciliation proceedings,
c) it is commenced or declared in contravention of section 22 or section 23
 d) it is continued in contravention of an order made under sub-section (3) of section 10
e) Unjustified strike - when strike is treated as first resort and not last resort, or strike
like sympathetic strike, go slow strike, pen down strike.

Whether illegal strike can be treated as a crime and can the workers be punished for it can
they be prosecuted and sentenced to imprisonment of one month or fine of Rs.50?

Section 26 deal with the penalty for illegal strike and lockout, where for an illegal strike
workers can be imprisoned for one month or fine of Rs.50 or both, the same is applicable for
illegal lockout as well.

Certain protection s which are provided to members of registered trade unions in case of
strike-

1. Section 17- No prosecution for criminal conspiracy under Section 120B

2. Section 18- No prosecution for civil proceeding can be initiated against the workers.
3. Aggravating stage of trade and business.

Benefits of legal and justified strike will be extended to the members f the registered trade
union but can these benefits extend to workers who are not the member of such union.

In the case of Management of Churakulam Tea Estate v. Workmen, 1968, Crompton

Greaves Ltd. v. Its Workmen, 1978 it was held that if strike is legal and justified then
workers would be entitled to all the benefits and they will also extend to the workers who are
not the members of any such trade union.

In case strike is peaceful and has not created any nuisance, no action will be taken. Workers
must be peaceful without any interference in the production process. If there is an element of
wrongful restraint or confinement then the strike would be held illegal.

Consequences of illegal strike –

a) Services can be terminated with proper enquiry

b) Wage reduction
c) Discontinuity of service

Further, the appropriate government can also initiate prosecution proceedings against the
workers under the Section 34, but this power is rarely used as if that is done for every illegal
strike then whole purpose of collective bargaining would make no sense.
Can lockout be declared where strike is illegal, and can the employer do layoff in case of
illegal strike - yes for both. Lay off is inability of employer to provide work. This is done by
the employer because of certain circumstances beyond the control of the employer.

Consequences of illegal lockout-

Lockout is declared by the employer where he can refuse to provide work for a temporary
period where there is dispute between the workers and employers. It is antithesis to strike.

Workers would be entitled to compensation in case of illegal or unjustified lockout Further,

under Section 26 proceedings can be initiated against the employer by appropriate
government for illegal lockout

Refusal to work because of safety concerns, because the machine is not serviceable, etc - will
it be considered as strike. Since, all these things are related to terms and conditions of
employment the strike as a consequence of this would be legal and justified. In the case of
North Brook Jute Company v Their Workmen employers wanted to deduce a rationalisation
scheme, which the workers had opposed on the apprehension that the scheme would burden
them with additional work. However, the scheme was approved by the Works Committee in
an extraordinary meeting. Thereafter, notices under Section 9A were sent which deals with
change in terms and conditions of employment, as a consequence workers refused to do
additional work as the same is not authorized by the previous terms and conditions of
employment and therefore a strike was declared and then a lock-out was declared by the
employer. The court held that works committee cannot represent workers for the purpose of
collective bargaining. Further, if strike is done for no doing the additional works then it
would be legal but lockout would be illegal.

No work, no pay policy-

The idea behind this doctrine is that if workers do not work, they are not entitled to any
wages, it doesn’t matter whether it is legal or illegal whether it is justified or unjustified
strike. This doctrine was discussed by SC in the case of Bank of India v. T.S Kelawala,
1990. In this case, employees of the bank went on a 4-hour strike but the bank deducted the
salary of the whole day, when they rendered their services to bank after 4 hours.

The court in this judgment did not took into consideration the well stablished principle that if
strike is legal and justified then workers ae entitled to the wages for that particular period as
held in the case of Management of Churakulam Tea Estate v. Workmen, 1968, Crompton
Greaves Ltd. v. Its Workmen, 1978.

The court upheld the above principle relying on certain sections of Payment of Wages Act
such as Section 9(2) and Section 7.

Through these abovementioned Sections the court came to the conclusion that works are
entitled to wages only when they work, if no work is done then no wages. The SC did not
discussed the legality or rationality of strike as the strike is legal ad well as justified. This
case is per incuriam as the it did not took the decision of the larger bench into consideration
while giving its judgment.

Further in the case of Syndicate Bank vs K. Umesh Nayak, 1994, the court reiterated the
same principle established in the case of Kelawala. Further the court held that the issues
regarding justified strike were not placed before the court and thus they were not discussed
by the court as in that case demand was wage revision, workers had a demand regarding
wage revision so strike was justified but they didn’t placed the same.

Same happened in the case of Birla Institute of Tech v Jharkhand where it was held that
teachers are not entitled to payment of gratuity because certain facts were not disclosed
before the court and certain amendment as well regarding the Payment of Gratuity Act.

This is wrong as it is not only the duty of the advocate to place everything before the court.
And the court should look into the legality and justifiability of a strike.

Agreement to surrender the right to strike can this be done? Whether such an agreement can
be done - can right to strike be relaxed?

This is a well-established principle that no statutory right can be superseded by any contract
of employment. However, right to strike is not a fundamental right, human right, moral right
or statutory right and thus right to strike can be surrendered though a prior agreement as that
is not in violation of the established principle. Right to strike is just a recognised right.

In T.K Rangarajan v. Tamil Nadu the court held that there are certain rules which bar govt
servants from going on strike

Can damages be claimed by workers from loss of wages due to lockout?

Yes, damages can be claimed if lockout is illegal as held in the case of North Brook Jute
Company v Their Workmen.
Can damages be claimed by the employer for the loss of production during a strike? This is a
well-established principle that tortious liability cannot be decided by the labour court as there
are civil court for that purpose, however in case of illegal strike prosecution proceeding can
be initiated under the Section 26 of the IDA.

Code on Wages Section 20 – According to this Section in case more than 50% of the workers
are absent then it would be a deemed strike.

The basic principle is that if strike is legal and justified workers are entitled to wages