Industrial Legislation
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What?
Laws and regulations enacted by a government to govern the activities of factories, companies, and other industrial establishments
Evils of Industrialization
| Social Evil |
Exploitative Working Conditions(Factory workers faced long hours, unsafe environments, no legal protection) Child Labor Urbanization and Overcrowding(poor sanitation, leading to diseases) Social Inequality(widened the gap between the wealthy industrialists and the impoverished working class) Loss of Traditional Ways of Life Emergence of the Working Class(rise of the working class and their struggles for better wages and working conditions led to social unrest) |
| Economic Evil |
Low Wages Unemployment Environmental Pollution Exploitation of Colonial Resources(Industrialized nations often exploited the resources and labor of their colonies) Financial Disparities |
History of evolution of industrial legislation
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Industrial legislation in India can be broadly divided into several phases:
- Early attempts to regulate factory conditions during British rule
- Modern era of comprehensive labour laws and codes
| Period | Description | ||||||
|---|---|---|---|---|---|---|---|
| British Colonial Period |
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| Post Independence |
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| Modern Codification and Reforms |
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Acts
1947, Industrial Dispute Act
What?
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Any disagreement or difference between
- Employers and employers OR
- Employer and employee OR
- Employee and employee OR
that is linked to employment, non-employment, terms of employment, or the conditions of labor.
It encompasses a wide range of issues, including wages, working hours, layoffs, and unfair labor practices.
Methods for Settlement of dispute
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Provides mechanisms like conciliation, arbitration, and adjudication
Conciliation(action of stopping someone being angry): Conciliation officers to mediate between employers and employees. If a settlement is reached, it is recorded and becomes legally binding.
Arbitration(Middleman to settle dispute): If conciliation fails, parties can voluntarily agree to arbitration
Adjudication(formal judgement)
Prevention of Strikes and Lockouts: Act also provides mechanisms to prevent illegal strikes and lockouts
Other provisions: Act also deals with unfair labor practices, layoffs, retrenchment
Cases
| Case | Description |
|---|---|
| Star Paper Mills, Ltd. v. Industrial Tribunal |
Dispute over an agreement between the company and its drivers Drivers demanded fixed working hours and company granted Drivers also wanted monetary benefits which were given to other drivers to be provided to them as well, which is invalid demand. |
| Budge Budge Municipality case |
D.N. Banerjee v. P.R. Mukherjee were 2 Municipal Commissioners Of Bodge Budge Municipality if Industrial Disputes Act of 1947 applied to disputes between a municipality and its employees. Whether municipal bodies should be considered "industries", decision to reinstate dismissed municipal employees was valid under Industrial act? Municipal employees bought under the purview of the Industrial Disputes Act |
Sections
| Section | Description | ||||||||||||||||||
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| Section 2B (Award) |
Decision given on industrial dispute by Labour Court, Industrial Tribunal, or National Industrial Tribunal Types: Interim(temporary, pending final decision), Final(conclusive resolution of the dispute) Legal effect: Binding and enforceable as per the IDA Awards are binding(enforcable) on: All parties to the industrial dispute All other parties summoned to appear in the proceedings as parties to the dispute Employer, Employee |
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| Section 6 Court of Inquiry (govt formed body) |
Purpose: Adjudicating(न्यायिक निर्णय) specific industrial disputes 1 Chairman, 1 or more members appointed by the government temporary for specific inquiries. Provides reports within 6 months |
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| Section 7 Labour Court (govt formed body) |
Purpose: Investigation of matters on industrial disputes 1 presiding officer (qualified to be a High Court judge or District Judge) Permanent or ad-hoc, depending on the government’s notification. Legally binding decisions |
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| Section 7A (created by Central/State Government) |
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| 10 Reference |
Meaning:
Government (Central or State) sending an industrial dispute to a designated body for adjudication or resolution.
Bodies to which case can be sent: Board of Conciliation (for promoting settlement) Court of Inquiry (for inquiry) Labour Court (for Second Schedule matters) Industrial Tribunal (for Second & Third Schedule matters) National Tribunal (for disputes of national importance or involving multiple states) |
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| Section 10A Voluntary reference |
Parties (employer and workmen) voluntarily refer a dispute for arbitration(मध्यस्थता) before it is referred to a court/tribunal
The agreement must be in writing and signed by both parties. The agreement should specify the arbitrator or arbitrators Cases 2008 North west karnataka road transport corporation v hh Pujar: HH Pujar was conductor and charged of not taking tickets not bus. transport corp suspended him, he gone to High court, Court mentioned about enquiry. During enquiry he admitted the same. SC mentioned when he himself admitted no need to enquiry now. |
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| Section 10B Mandatory Reference | If both parties apply jointly for reference, the government shall refer the dispute if satisfied that an industrial dispute exists | ||||||||||||||||||
| 22,23,26 Prohibition of strikes and lockouts, Penalties |
These sections restrict strikes and lockouts in certain situations, making them illegal if violated.
Sec22, Prohibition on Strikes Public services Strikes(eg transportation, electricity, water) need minimum 6-week notice period before the strike. Sec 23, Prohibition on Lockouts Employers cannot declare a lockout during conciliation proceedings before a Board or Labour Court, Tribunal, or National Tribunal No lockout can be declared during the period a settlement or award is in operation Sec 26, Penalties Individuals responsible for illegal strikes or lockouts may face penalties Workers are generally not entitled to wages during an illegal strike. |
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| 25 layoff, retrenchment, and closure |
Sec22, Prohibition on Strikes Public services Strikes(eg transportation, electricity, water) need minimum 6-week notice period before the strike. Sec 23, Prohibition on Lockouts Employers cannot declare a lockout during conciliation proceedings before a Board or Labour Court, Tribunal, or National Tribunal No lockout can be declared during the period a settlement or award is in operation Sec 26, Penalties Individuals responsible for illegal strikes or lockouts may face penalties Workers are generally not entitled to wages during an illegal strike. |
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| 33 Restrictions on Change of Employment Condition during dispute |
During dispute period employer cannot: 1. Altering conditions of service 2. Discharging/punishing workmen, unless they have written permission from the relevant authority( like a conciliation officer or a labor court.) Prima Facie Case in Section 33: When an employer wants to take adverse action against an employee despite Section 33's prohibition, they must obtain permission from the appropriate authority. they need to show that there is a reasonable basis for their action, and that the employer has conducted a fair hearing. Penalties for Violations Section explicitly does not outline penalties for violations, but employers doing so may face legal repercussions Cases: 1. Laxmi devi sugar mill vs ram swaroop: Dismissal of 76 workers who participated in a tools-down strike raising critical questions about the legality of lock-outs. Court mentioned procedural adherence required by employers before taking disciplinary actions. |
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| 33B Power of Government to transfer proceedings between various adjudicatory authorities |
Govt may withdraw pending procedings before a Labour Court, Tribunal, or National Tribunal and
transfer it to another Labour Court, Tribunal, or National Tribunal. Written order with reasons provided(Administrative convenience, Speedy disposal) With Directions: De novo (afresh) From the stage at which it was transferred Cases 1960. Associated Electrical Industries v its workmen: Workmen claimed bonus, but company objected. SC looked into Financial status of company & told bonus is not an automatic right of workmen but depends on the available surplus and the financial capacity of the employer |
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| 33C Mechanism for a workman to recover money due from an employer |
Step-by-Step Procedure Sec33C-1. Application to Appropriate Government: Application within 1 year by Workmen, his/her hiers Government Issues Recovery Certificate Sec33C-2. Application to Labour Court for Computation: If there is a dispute about the amount Recovery after Labour Court’s Decision |
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| 250. Closure(Special Provisions) | Same as Section 25m |
Terms
| Term | Meaning | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Retrenchment |
Layoff of employee by employer for any reason other than misconduct or behavioural discliplinary action
Objective? Reduce their workforce when facing economic difficulties, restructuring, or changes in business operations Procedure Section(25F) Industrial Disputes Act, Retrenchment is valid if these conditions are met: Workman must recieve 1 month written notice(indicating reason), with salary for 1 month Sec25G: Generally should be carried as per principle of "last come, first go" (LIFO) In some cases, retrenchment may require prior permission from the appropriate Government or specified authority. Workman during retrenchment can challenge the employer if not recieved fair notice, compensation Penalties: Violations of the provisions related to retrenchment can lead to penalties, including imprisonment or fines What is not Retrenchment? - Termination as part of punishment - Voluntarily retirement - Retirement at reaching super annunation age - Non-renewal of an employment contract upon its expiry. - Termination due to the continued ill-health of the workman Cases: 1960 Oil & Oil Seeds vs Workmen: SC clarified "first come, last go" is standard guideline but not an absolute rule. Company can hold management's decision to retain employee with specialized skills if employee were essential for the company's limited operations. |
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| Appropriate government |
Governing authority (Central or State) with the power to administer and enforce labor laws Central Govt: is the appropriate government for industries with branches in more than one state, for matters within the Union List State Govt: 1 state, for matters within the State List. |
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| Average Pay |
Average pay paid to a workman over last 3 months. Act defines "average pay" specifically to calculate compensation in cases of retrenchment or closure. |
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| Closure | permanent cessation of operations of an establishment or part of it. | ||||||||||||
| Conciliation officer, conciliation proceedings |
Conciliation officer: Official(appointed by the Central or State Government) to mediate in and promote the settlement of industrial disputes Considered public servants under the Indian Penal Code. Powers: Similar to Civil court. Examine, Summon Witness, Compel document production. Conciliation proceedings: Process by which a officer assists parties in a dispute to reach a mutually agreeable resolution |
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| Controlled Industry | Industry where Central Government exercises some form of control in the industry's operations(eg: production, pricing, or distribution). | ||||||||||||
| Industrial establishment | Workplace involved in industrial activities like manufacturing, production, or distribution of goods and services Eg: factories, mines, and plantations. | ||||||||||||
| Lockout |
Employer temporarily closes a workplace or suspends work as a form of pressure on employees, often during a labor dispute or negotiation.
Strikee vs Lockout
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| Public utility service | Essential services that are critical for the functioning of society like transport(Railways, bus services), postal services, utilities like power and water, and sanitation systems | ||||||||||||
| Unfair labour practices |
Actions by employers or unions that violate worker rights or undermine the collective bargaining process 1. Violation of Worker Rights: 2. Illegal Activities Employer Actions: Discrimination(on race, religion, gender), Wage Theft(withholding wages), Refusing to Bargain in Good Faith Union Actions: Intimidating or threatening employees or employers, Illegal Strikes or Boycotts |
Works Committee
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Body formed consisting of representatives from both management and workers (around 100 people) to promote good relations, address issues of common interest
committee must have equal representation of different categories of workers within the establishment.
Frequency of Meetings: at least once every three months.
Constitution: Chairman, Vice-Chairman, Secretary, and Joint-Secretary
Cases
1. North Brook Jute Co. Ltd v Workmen: Mills gave extra work(in consultation with Works Committe) and workers denied. Mill called lock-out. Issue was will workers be paid for period of lock-out. SC told Works Committee’s approval of the rationalisation scheme was not binding on the workmen
Trade Union
History
| 1900-1918 (Early Beginnings) |
1850: Establishment of textile mills in Bombay 1854: Jute mills in Calcutta 1890: Bombay Mill-Hands Association, founded by N.M. Lokhande was 1st labour union |
| 1918–1926 (Formation of Unions) |
1917: Ahmedabad Textile Labour Association(first registered trade union in India) 1920: All India Trade Union Congress (AITUC) formed by Leaders like Lala Lajpat Rai, Joseph Baptista 1920 and 1924: 1000s of strikes in between |
| 1926–1947 (Legal Recognition and Growth) |
1926: Trade Union Act(Legal status to Unions. Methods to register), 1st year 28 unions registered |
| 1947 Onwards(Post Independence) | Trade unions played a key role in shaping India’s labour laws and social policies |
| Present Day |
16,000 trade unions representing millions of workers Trade unions remain important for collective bargaining, worker protection, and influencing labour policy |
Trade Union Act 1926
| Section | Description | ||||||||
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| 4-8 Registration of Trade Union |
Fill Form A, Sign by least 7 members (or 10% of workers) Submit form to Registrar of Trade Unions(Name, address, and objectives of union, Office Bearers, Objective) Registrar checks(Name uniqueness, rules meet statutory requirements) Minor greater than 15 years of age can become member of trade Union Issue of Certificate |
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| 11. Appeal against refusal/cancellation. |
Appeal to the Labour Court/Industrial Tribunal (within 60 days) Writ Petition in High Court(Art 226 of Constitution) Re-application after Compliance |
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| 13,14. Hold Property | A registered trade union can acquire and hold movable/immovable property in its name. | ||||||||
| 15,16. Protection of Funds | Trade union funds enjoy legal protection and can only be used for legitimate trade union purposes (e.g., salaries, legal disputes, welfare schemes) | ||||||||
| 16 Legal Provisions for Political Funds |
Separate political fund, but it is not mandatory. Members cannot be forced to contribute. Uses of Political Funds Expenses for political campaigns, supporting candidates |
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| 18. Immunity from Civil Suits |
Protection from civil liability for lawful trade union activities (e.g., strikes, protests) No suit or legal proceeding is maintainable against a registered trade union or its members if done with rules Cases: 1953 Raja Kulkarni v. State of Bombay, Immunity applies only to registered unions acting lawfully. |
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| 17. Immunity from Criminal Conspiracy | Only peaceful, If the act involves violence, coercion, or illegal means, immunity does not apply | ||||||||
| 24,25,26 Merger of Unions |
Procedure for Amalgamation: Voting: least 60% of those votes must be in favor of the proposal Notice to Registrar: signed by the secretary and seven members of each union, must be submitted to the Registrar of Trade Unions Approval: by the Registrar of Trade Unions Reasons for Amalgamation Increased Bargaining Power Improved Efficiency: A larger, unified union may be more efficient in serving its members. Reduce the burden of managing multiple, smaller unions |
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| 27. dissolution of registered trade union |
Steps for Dissolution: Decision to Dissolve: as per rules Notice of dissolution sent to registrar signed by Secretary, 7 members Effective Date: dissolves from effective date Distribution of Funds: Registrar will divide the funds among the members |
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| Penalties |
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