CLAT PG Exam > CLAT PG Notes > Labour and Industrial Law > Cheat Sheet: Industrial Disputes and Resolution
Cheat Sheet: Industrial Disputes and Resolution
1. Industrial Disputes
1.1 Definition and Scope
| Term | Definition |
|---|---|
| Industrial Dispute | Any dispute or difference between employers and employers, employers and workmen, or workmen and workmen, connected with employment or non-employment, terms of employment or conditions of labour (Section 2(k), Industrial Disputes Act, 1947) |
| Workman | Person employed in any industry to do manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward (excludes persons in managerial/administrative capacity, police, armed forces) |
| Industry | Systematic activity organized by cooperation between employer and employees for production, supply or distribution of goods or services with satisfaction of material human wants |
1.2 Types of Industrial Disputes
- Individual Disputes: Between one workman and employer
- Collective Disputes: Between group of workmen and employer(s)
- Interest Disputes: Related to creation of new rights or modification of existing terms
- Rights Disputes: Related to enforcement or interpretation of existing rights
- Disputes on Employment: Hiring, retrenchment, discharge, dismissal
- Disputes on Terms: Wages, allowances, working hours, leave
- Disputes on Conditions: Safety, welfare, amenities
1.3 Essential Elements
- Must be between parties in employer-employee relationship
- Must be real and substantial (not abstract or hypothetical)
- Must be connected with employment, non-employment, terms or conditions of labour
- Must be existing and present (not mere apprehension of future dispute)
- Individual dispute can become industrial dispute if taken up by trade union or substantial number of workmen
2. Collective Bargaining
2.1 Concept and Features
| Aspect | Description |
|---|---|
| Definition | Negotiation process between employers and representatives of workers to determine conditions of employment through voluntary agreement |
| Parties | Management and trade unions or worker representatives acting on behalf of workforce |
| Purpose | Settle disputes, fix wages, determine service conditions, establish grievance procedures |
| Nature | Bipartite, voluntary, flexible, continuous process |
2.2 Levels of Collective Bargaining
- National Level: Tripartite consultations involving government, employer organizations, central trade unions
- Industry Level: Industry-wide agreements on common issues
- Plant Level: Most common; agreements specific to individual establishments
2.3 Types
- Distributive Bargaining: Win-lose approach with fixed resources
- Integrative Bargaining: Win-win approach seeking mutual gains
- Productivity Bargaining: Linking wage increases to productivity improvements
- Composite Bargaining: Beyond wages; includes welfare, job security, participation
3. Works Committee
3.1 Constitution and Composition
| Element | Details |
|---|---|
| Statutory Provision | Section 3, Industrial Disputes Act, 1947 |
| Applicability | Establishments employing 100 or more workmen |
| Composition | Equal number of representatives of employers and workmen (not exceeding 20 members); workmen representatives elected by workmen |
| Tenure | 2 years from date of constitution |
| Chairman | Nominated by employer from among employer representatives |
3.2 Functions
- Promote good relations and harmony between management and workmen
- Comment on matters of common interest or industrial peace
- Endeavour to resolve differences before they assume form of industrial dispute
- Discuss conditions of work, safety, health, welfare amenities
- Matters not covered: wages, bonus, rationalization, retrenchment, disciplinary action
3.3 Meetings and Procedures
- Meetings held at regular intervals (at least once every three months)
- Decisions by mutual discussion and consent (not voting)
- Minutes recorded and copies provided to members
- Informal, non-adjudicatory, voluntary nature
4. Conciliation
4.1 Conciliation Machinery
| Authority | Key Features |
|---|---|
| Conciliation Officers | Appointed under Section 4; permanent officers; investigate disputes, mediate settlements; power to call witnesses; duty to submit report within 14 days of commencement |
| Board of Conciliation | Appointed under Section 5; ad hoc body; Chairman (independent) + 2-4 members (equal from employers and workmen); constituted when situation warrants; report within 2 months (extendable by 1 month) |
4.2 Conciliation Process
- Initiation: Dispute reported to conciliation officer or government appoints officer suo moto
- Investigation: Officer investigates dispute, holds meetings with parties
- Mediation: Facilitates negotiations, proposes solutions
- Settlement: If agreement reached, settlement recorded and signed
- Failure Report: If conciliation fails, report sent to government within 14 days with failure memorandum
4.3 Settlement in Conciliation
| Aspect | Provision |
|---|---|
| Binding Nature | Settlement binding on all parties to dispute and others affected (Section 18) |
| Period | Remains in operation for period specified (if not specified, 6 months from date of settlement) |
| Effect | Bar on strikes and lockouts during conciliation and 7 days thereafter |
5. Voluntary Arbitration
5.1 Features
| Aspect | Details |
|---|---|
| Statutory Basis | Section 10A, Industrial Disputes Act, 1947 |
| Nature | Voluntary reference by agreement of parties; alternative to adjudication |
| Arbitrator | Person(s) agreed upon by parties (may be single arbitrator or panel) |
| Procedure | Parties submit written agreement to refer dispute; government notifies arbitrator; procedure decided by arbitrator |
| Award | Binding on parties; same status as award of Labour Court/Industrial Tribunal |
5.2 Arbitration Award
- Award submitted to government within 4 months (unless extended by agreement)
- Published within 30 days of receipt
- Comes into operation on date of publication or specified date
- Binding period: Specified in award or 1 year from date of operation
- Enforceable as if it were decree of Civil Court
5.3 Advantages
- Speedy resolution compared to adjudication
- Parties have control over arbitrator selection and procedure
- Flexible and informal process
- Maintains industrial harmony through consensual approach
6. Adjudication
6.1 Adjudication Authorities
| Authority | Jurisdiction and Composition |
|---|---|
| Labour Court (Section 7) | Presided by independent person qualified as judge or experienced in labour matters; handles matters in Second Schedule (discharge/dismissal, legality of strikes/lockouts, work allocation, withdrawal of customary concessions) |
| Industrial Tribunal (Section 7A) | Similar composition; handles matters in Second Schedule + Third Schedule (wages, hours, leave, bonus, retrenchment, closure, rationalization) |
| National Tribunal (Section 7B) | Constituted for matters of national importance or affecting multiple states; headed by qualified judge; handles all matters within jurisdiction of Industrial Tribunal |
6.2 Reference to Adjudication
| Element | Provision |
|---|---|
| Authority to Refer | Appropriate government (Central/State) under Section 10 |
| When Referred | After conciliation fails or government satisfied that dispute exists/apprehended |
| Consultation | Government may refer without consent of parties (compulsory adjudication) |
| Public Utility Services | Mandatory reference if dispute likely to affect community |
6.3 Powers of Adjudication Authorities
- Powers of Civil Court under Code of Civil Procedure, 1908 (summoning witnesses, enforcing attendance, compelling document production, examining on oath)
- Call for documents and information from parties
- Appoint assessors to assist in proceedings
- Grant interim relief pending final award
- Award compensation, back wages, reinstatement
6.4 Award
| Aspect | Details |
|---|---|
| Time Limit | Labour Court/Tribunal: 3 months from reference date (extendable by 6 months); National Tribunal: 6 months |
| Publication | Award submitted to government and published within 30 days |
| Commencement | 30 days from date of publication or specified date |
| Binding Period | 1 year from date of operation (unless specified otherwise) |
| Modification | Government may refer award for modification within 1 year to same or another authority |
6.5 Execution of Award
- Award enforceable as decree of Civil Court under Order XXI CPC
- Labour Court/Tribunal may forward award to Collector for execution
- Non-implementation amounts to unfair labour practice
- Penalty for non-compliance under Section 31
7. Judicial Review of Awards
7.1 Grounds for Challenge
| Ground | Description |
|---|---|
| Jurisdictional Error | Authority acted without jurisdiction or exceeded jurisdiction |
| Violation of Natural Justice | Denial of fair hearing, bias, lack of notice, failure to consider material evidence |
| Perversity | Award based on no evidence or ignoring vital evidence; wholly arbitrary |
| Error Apparent on Face | Self-evident error in award; not requiring lengthy reasoning to establish |
| Illegality | Award contrary to statutory provisions or established legal principles |
7.2 Scope of Judicial Review
- Courts do not act as appellate authority over industrial adjudication
- No re-appreciation of evidence or substitution of views
- Interference only on limited grounds: jurisdictional error, violation of natural justice, perversity
- Award cannot be set aside merely because alternative view possible
- Findings of fact by Labour Court/Tribunal binding unless perverse
7.3 Remedy
- Writ petition under Article 226 (High Court) or Article 32 (Supreme Court)
- Certiorari to quash award
- Mandamus to compel authority to act according to law
- Time limit: Reasonable period from knowledge of award (laches may bar relief)
8. Strike and Lockout
8.1 Definitions
| Term | Definition |
|---|---|
| Strike | Cessation of work by body of persons employed in any industry acting in combination, or concerted refusal or refusal under common understanding to continue work or accept employment (Section 2(q)) |
| Lockout | Temporary closing of place of employment, suspension of work, or refusal by employer to continue employment of persons employed (Section 2(l)) |
| Public Utility Service | Services specified in First Schedule (railways, posts, telecom, ports, banking, hospitals, electricity, sanitation, water supply, transport, etc.) |
8.2 Types of Strikes
- Economic Strike: For better wages, bonus, working conditions
- Sympathetic Strike: Supporting other workers in dispute
- General Strike: Called by trade unions affecting multiple industries
- Sit-down Strike: Workers stop work but remain in workplace
- Go-slow: Working at deliberately reduced pace
- Work-to-rule: Strictly following all rules to slow down work
- Wildcat Strike: Sudden strike without proper notice or union authorization
8.3 Legal Strike/Lockout - Conditions
8.3.1 Public Utility Services
| Requirement | Provision |
|---|---|
| Notice Period | 6 weeks notice to employer (Section 22) |
| Notice Duration | Strike within 14 days after expiry of notice date, else fresh notice required |
| Cooling Period | No strike during conciliation proceedings and 7 days thereafter |
| Adjudication Bar | No strike during adjudication and 2 months after conclusion |
8.3.2 Non-Public Utility Services
| Requirement | Provision |
|---|---|
| Notice Period | 14 days notice to employer (Section 22) |
| Cooling Period | No strike during conciliation proceedings and 7 days thereafter |
| Adjudication Bar | No strike during adjudication and 2 months after conclusion |
8.4 Illegal Strike/Lockout
- Strike/lockout without proper notice under Section 22
- Strike/lockout in contravention of Section 23 (during conciliation, adjudication, operation of settlement/award)
- Strike in violation of settlement or award in force
- Lockout declared in consequence of illegal strike
- Strike declared in consequence of illegal lockout
8.5 Consequences
| Aspect | Consequence |
|---|---|
| Illegal Strike - Workers | Not entitled to wages for strike period; disciplinary action including dismissal; criminal penalty under Section 26 (imprisonment up to 1 month or fine up to ₹50 or both) |
| Illegal Lockout - Employer | Liable to pay wages to workers for lockout period; criminal penalty under Section 26 (imprisonment up to 1 month or fine up to ₹50 or both) |
| Instigation/Financing | Person instigating or inciting illegal strike/lockout liable under Section 27 (imprisonment up to 6 months or fine up to ₹1,000 or both) |
8.6 Protected Workmen
| Aspect | Details |
|---|---|
| Definition | Office bearers of registered trade unions connected with establishment (1% of workmen or 5 workmen, whichever less) - Section 33(3) |
| Protection | Cannot be altered service conditions, discharged or punished during pendency of proceedings without permission of authority before which proceedings are pending |
| Rationale | Prevent victimization of union leaders during disputes |
| Limitation | Protection not absolute; permission granted for misconduct unconnected with dispute |
9. Penalties and Offences
9.1 Major Offences under Industrial Disputes Act, 1947
| Section | Offence and Penalty |
|---|---|
| 26 | Illegal strike/lockout: Imprisonment up to 1 month or fine up to ₹50 or both |
| 27 | Instigation or inciting illegal strike/lockout: Imprisonment up to 6 months or fine up to ₹1,000 or both |
| 28 | Giving financial aid to illegal strike/lockout: Imprisonment up to 6 months or fine up to ₹1,000 or both |
| 29 | Breach of settlement/award: Imprisonment up to 6 months or fine up to ₹1,000 or both; for continuing offence, fine up to ₹200 per day |
| 30 | Failure to comply with order under Section 10(3) or 10A(4A): Imprisonment up to 6 months or fine up to ₹1,000 or both |
| 31 | Failure to implement award/settlement: Imprisonment up to 6 months or fine up to ₹1,000 or both; for continuing offence, fine up to ₹200 per day |
| 33 | Altering service conditions or discharge/punishment during pending proceedings without permission: Imprisonment up to 6 months or fine up to ₹1,000 or both |
9.2 Prosecution
- Prosecution only with previous sanction of appropriate government or authorized officer
- No court inferior to Presidency Magistrate or Magistrate First Class shall try offences
- Offences by companies: Company and person in charge liable unless due diligence proved
10. Unfair Labour Practices
10.1 Definition and Scope
| Aspect | Details |
|---|---|
| Statutory Basis | Schedule V, Industrial Disputes Act, 1947 (inserted by Amendment Act, 1982) |
| Scope | Acts by employers, trade unions, and workmen that violate rights and obligations under industrial law |
| Penalty | Imprisonment up to 6 months or fine up to ₹1,000 or both |
10.2 Unfair Labour Practices by Employers
- Interference with right to form unions or become union members
- Discrimination against workers for union activities
- Establishing employer-dominated unions
- Discharging or punishing workers for filing complaints or giving evidence
- Refusal to bargain collectively with recognized union
- Proposing negotiation with union while proceedings pending
- Threatening lockout or closure to influence negotiations
- Recruiting workers during legal strike
- Indulging in acts of force or violence
- Non-implementation of settlement or award
10.3 Unfair Labour Practices by Trade Unions and Workmen
- Coercion of workers to join or refrain from joining union
- Discrimination against non-union or minority union workers
- Refusal to bargain collectively in good faith
- Violation of settlement or award
- Resorting to coercion, intimidation, physical violence
- Staging illegal strikes or supporting such strikes
- Refusal to accept settlement or award
11. Special Provisions for Public Utility Services
11.1 First Schedule Services
- Railways, air transport services
- Posts, telegraphs, telephones
- Major ports, docks
- Banking, insurance
- Electricity, water, sanitation
- Hospitals, medical services
- Public conservancy
- Transport services (passenger and goods)
- Establishments producing defense equipment
- Establishment engaged in production, supply, distribution of coal, petroleum products
11.2 Special Requirements
| Requirement | Provision |
|---|---|
| Notice for Strike/Lockout | 6 weeks notice (compared to 14 days for non-public utility) |
| Mandatory Conciliation | Government must appoint conciliation machinery within 7 days of notice |
| Maintenance during Strike | Employer may require maintenance of essential services during legal strike |
| Stricter Penalties | Enhanced penalties for violation of provisions |
11.3 Ban on Strikes/Lockouts
- Prohibition during pendency of conciliation proceedings and 7 days thereafter
- Prohibition during pendency of arbitration/adjudication proceedings
- Prohibition for 2 months after conclusion of arbitration/adjudication proceedings
- Prohibition during operation period of settlement or award
12. Lay-off, Retrenchment and Closure
12.1 Definitions
| Term | Definition (Industrial Disputes Act, 1947) |
|---|---|
| Lay-off | Failure, refusal or inability of employer to give employment to workman whose name is on muster rolls due to shortage of coal, power, raw materials, accumulation of stocks, breakdown of machinery or natural calamity (Section 2(kkk)) |
| Retrenchment | Termination by employer of service of workman for any reason other than punishment, voluntary retirement, superannuation, non-renewal of contract, continued ill-health (Section 2(oo)) |
| Closure | Permanent closing down of place of employment or part thereof |
12.2 Lay-off Compensation
| Element | Provision |
|---|---|
| Eligibility | Workman with continuous service of 1 year (Section 25C) |
| Compensation | 50% of total basic wages + dearness allowance for lay-off period |
| Maximum Period | 45 days in any 12-month period |
| Conditions | Workman was not on leave with wages, did not refuse alternative employment, was ready to work |
12.3 Retrenchment Compensation
| Element | Provision |
|---|---|
| Applicability | Workman with continuous service of 1 year (Section 25F) |
| Compensation | 15 days average pay for every completed year of continuous service or part thereof in excess of 6 months |
| Notice | 3 months notice in writing indicating reasons or 3 months wages in lieu |
| Consultation | Appropriate government or specified authority to be consulted |
| Last-Come-First-Go | Principle to be followed unless contrary agreement exists |
12.4 Prior Permission for Retrenchment/Closure
| Establishment Size | Requirement |
|---|---|
| Less than 100 workers | No prior permission required; only compliance with Section 25F (notice, compensation) |
| 100 or more workers | Prior permission of appropriate government required under Section 25N for retrenchment; Section 25O for closure; 60 days notice to government; government decides within 60 days |
12.5 Consequences of Violation
- Retrenchment/closure without permission void
- Employer liable to pay full back wages to workers
- Penalty: Imprisonment up to 1 month or fine up to ₹5,000 or both
- Workers entitled to reinstatement with continuity of service
13. Important Case Law Principles
13.1 Industrial Dispute
- Bangalor Water Supply v. Rajappa (1978): Broad interpretation of "industry" - triple test: systematic activity, cooperation between employer-employees, production/distribution of goods/services
- Workmen v. Dimakuchi Tea Estate (1958): Individual dispute becomes industrial dispute when espoused by union or substantial number of workmen
- Central Provinces Manganese Ore v. Workmen (1961): Dismissed workman's dispute becomes industrial if taken up by union
13.2 Retrenchment and Closure
- Workmen v. Management Bata Shoe (1963): Bona fide closure for economic reasons upheld; bonafide cannot be doubted merely because accumulated losses not shown
- Hariprasad v. Dildarnagar Factory (1957): Closure due to financial difficulty must be genuine; burden on employer to prove
- Santosh Gupta v. State Bank of Patiala (2017): Abolition of post amounts to retrenchment
13.3 Natural Justice in Domestic Enquiry
- Managing Director ECIL v. B. Karunakar (1993): Non-compliance with principles of natural justice renders enquiry invalid
- Rattan Singh v. Govt. of NCT Delhi (1997): Complete denial of notice and opportunity amounts to violation of natural justice
13.4 Strikes and Lockouts
- India General Navigation v. Workmen (1960): Go-slow amounts to strike
- Management Jaipur Zila Sahakari Bhoomi v. Workmen (1963): Lightning strike without notice illegal
- Syndicate Bank v. Umesh Nayak (1994): Gherao amounts to criminal intimidation
13.5 Unfair Labour Practice
- Bharatiya Kamgar Union v. Bharati Mills (1999): Victimization of union office bearers amounts to unfair labour practice
- Management of Alembic Glass v. Workmen (1961): Employer's refusal to bargain with recognized union amounts to unfair labour practice
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