On this page you will read detailed information about Industrial Disputes Act 1947.
As a business or labor leader, you know that industrial relations are a vital part of a fair and productive workplace. Understanding the legal framework that governs labor relations in India is key to establishing harmonious employer-employee relationships. The Industrial Disputes Act of 1947 lays the foundation for this legal framework. Enacted shortly after independence, this act defines the rights and responsibilities of both workers and management. It establishes mechanisms for dispute resolution while protecting workers from victimization and unfair labor practices. With an overview of this seminal legislation, you will gain insight into the processes governing strikes, lockouts, layoffs, and more. Let us delve into the history and key provisions of this central pillar of Indian labor law.
What Is the Industrial Disputes Act 1947?
The Industrial Disputes Act, 1947 is a labor law enacted by the Government of India to promote industrial peace. It regulates the relations between employers, workmen and trade unions. The Act lays down the machinery and procedure for investigation and settlement of industrial disputes.
Objectives
The main objectives of the Act are:
- To promote measures for securing and preserving good relations between the employer and the workmen.
- To provide machinery for the investigation and settlement of industrial disputes.
- To secure industrial peace and harmony by providing statutory machinery for the amicable settlement of disputes between employers and employees.
Application
The Act applies to all industries and to all classes of workmen, whether employed in public or private sectors. However, it does not apply to persons employed in the police service and the armed forces. The appropriate Government has the power to exempt any industry or class of workmen from its application.
Authorities under the Act
The Act provides for the constitution of various authorities for investigation and settlement of industrial disputes such as:
- Works Committee: To promote measures for securing and preserving good relations between the employer and the workmen.
- Conciliation Officers: For mediating in and promoting the settlement of industrial disputes.
- Courts of Inquiry: For inquiring into any matter appearing to be connected with or relevant to an industrial dispute.
- Labour Courts: For adjudicating industrial disputes relating to specified individual workmen.
- Industrial Tribunals: For adjudicating industrial disputes relating to matters specified in the Second Schedule of the Act.
- National Industrial Tribunals: For adjudicating industrial disputes which, in the opinion of the Central Government, involve questions of national importance.
The Act prescribes detailed procedures for investigation and settlement of industrial disputes. It provides for three-tier machinery at the central and state levels for settlement of industrial disputes through conciliation, adjudication and arbitration.
Key Definitions Under the Act
Workman
The Act defines a ‘workman’ as any person employed in an industry to do any manual, unskilled, skilled, technical, operational or clerical work for hire or reward. It includes any such person who has been dismissed, discharged or retrenched in connection with or as a consequence of a dispute. The definition excludes those employed in the police service, military, air force, and navy.
Industry
An ‘industry’ refers to any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, handicraft or industrial occupation or avocation of workmen. The Act applies to all industries irrespective of whether they are carried out with or without the aid of power.
Employer
An ’employer’ means any person who employs workmen either directly or through another person, whether for his own benefit or on behalf of some other person, but does not include any person acting merely in a professional capacity on behalf of an employer.
Appropriate Government
The ‘appropriate government’ refers to the central government in relation to railways, airways, banking, insurance and such other industries as may be notified by the central government. In all other cases, the state government is the appropriate government. The appropriate government has the power to refer the dispute to a tribunal, appoint conciliators and take measures to promote settlement of industrial disputes.
Settlement
A ‘settlement’ means an agreement, either oral or in writing, between the employer and workmen arrived at in the course of conciliation proceedings before the conciliation officer. A settlement helps in restoration of normalcy in the working of an industry by arriving at an acceptable solution.
By understanding these key definitions, you will gain clarity on the scope and applicability of the Industrial Disputes Act, 1947. The definitions form an integral part of the Act and aid in its interpretation.
Provisions for Investigation and Settlement of Industrial Disputes
Conciliation
The Act provides for the appointment of conciliation officers by the Government. The duty of the conciliation officer is to mediate between the employer and the employees and bring about a settlement. The conciliation officer tries to conciliate the dispute and promote settlement by persuading the parties to come together and agree to a fair settlement. If conciliation succeeds then a settlement is drawn up and signed by the parties.
Investigation and settlement of disputes
If the conciliation proceedings fail, the Government may refer the dispute for adjudication by a labor court, industrial tribunal or national tribunal. The adjudicating authority shall investigate the dispute and issue an award binding on the parties. While investigating a dispute, the adjudicating body can summon witnesses, require the production of documents and do all such things as are necessary for the purpose of conducting the investigation. The parties shall be given opportunity to represent their case before the adjudicating authority.
Awards and settlements
The awards of labor courts, industrial tribunals and National Tribunal are binding on the parties to the dispute. The settlement arrived at during conciliation proceedings is also binding. The parties cannot go back on the settlement or award. If any party wants to challenge the settlement or award, it can file an appeal in the High Court on a question of law. The High Court can confirm, modify or reverse the award or settlement.
To conclude, the Act establishes proper mechanisms and procedures for promoting industrial peace and harmony by providing the means for investigation and settlement of industrial disputes through conciliation, adjudication and arbitration. With its provisions that make settlements and awards binding, it aims to secure a peaceful atmosphere to enable the employers and workmen to discuss and settle the differences through mutual negotiations.
In the previous post, we had shared information about Section 188 IPC: Exploring the Significance of this Essential Criminal Law Provision, so read that post also.
Powers of Government to Make Reference to Labor Courts
The Government has the authority under the Act to refer an industrial dispute to labor courts for adjudication.
Reference to Labor Courts
The appropriate Government may, if it deems fit, refer any industrial dispute to a labor court for adjudication at any stage of the dispute. The labor court shall then hold its proceedings expeditiously and shall, within the period of three months from the date of the reference, submit its award to the appropriate Government.
The labor court has the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 when trying a suit, in respect of the following matters:
- Enforcing the attendance of any person and examining him on oath;
- Compelling the production of documents and material objects;
- Issuing commissions for the examination of witnesses;
- Consolidating the cases of parties in a trade dispute as regards the place of hearing;
- Any other matter which may be prescribed.
Awards and Settlements Binding
The award of a labor court is binding on all parties to the industrial dispute. The appropriate Government may, within six months from the date of the award, amend the same after giving reasonable opportunity to the parties concerned. An award becomes enforceable on the expiry of thirty days from the date of its publication under Section 17, unless an appeal against it is preferred to the High Court.
The appropriate Government may also refer the industrial dispute for arbitration if it is of the opinion that the dispute is not likely to be settled by other means. The parties to the dispute will have to abide by the arbitration award. Any party aggrieved by the award may appeal to the labor court within 60 days of the publication of the award. The High Court’s decision on the appeal will be final.
The Act empowers the Government to enforce settlements arrived at between the employer and workmen. Such settlements have the same standing and effect as an award of a labor court or an arbitration award and will be binding on all parties to the industrial dispute.
Strikes and Lockouts Under the Act
Definition and Notice
The Act defines a strike as the cessation of work by a body of persons employed in any industry acting in combination, or a concerted refusal or 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. A lockout is defined as the closing of a place of employment or suspension of work, or the refusal by an employer to continue to employ any number of persons employed by him in consequence of a dispute.
Parties intending to go on strike or declare a lockout are required to give notice to the appropriate government authorities. The party raising an industrial dispute has to give a notice of strike or lockout within six weeks of the intended date. The party, on whom the notice is served, is required to investigate the dispute within two months of the service of notice.
Prohibition of Strikes and Lockouts
The appropriate government may prohibit strikes or lockouts in public utility services for a period of up to six months. The government may also prohibit strikes and lockouts where there exists a possibility of an imminent danger to the interest of public. Strikes and lockouts are also prohibited during the pendency of proceedings before a Labour Court, Tribunal or National Tribunal and two months after the conclusion of such proceedings.
Illegal Strikes and Lockouts
Strikes and lockouts contravening the provisions of the Act are deemed illegal. Participation in an illegal strike or an illegal lockout is punishable with imprisonment up to one year or fine up to Rs. 1,000 or both. Instigation or incitement to take part in an illegal strike or lockout is also punishable in the same manner.
The Act aims to regulate the employer-employee relations in India. It provides a platform for the settlement of industrial disputes through conciliation and adjudication. By prohibiting strikes and lockouts in public utility services, the Act ensures uninterrupted supply of essential services to the community. Overall, the Act balances the interests of employers, employees and the wider public.
Layoff, Retrenchment and Closure Rules
Under the Industrial Disputes Act, 1947, employers must follow certain rules regarding layoffs, retrenchments, and closures to protect workers’ rights.
Layoffs refer to the temporary suspension of work for a period of days or weeks owing to causes beyond the control of employers such as shortage of coal, power or raw materials or accumulation of stocks, breakdown of machinery, natural calamities. In the event of layoffs, workers are entitled to compensation and must be given first preference for re-employment when work resumes.
Retrenchment implies the termination of services of workmen on a permanent basis owing to rationalization, standardization or modernization or to the closing down of a department or replacement of workers by machines. Retrenched workers are entitled to one month’s notice or pay in lieu thereof, compensation and preferential re-employment.
Closure refers to the permanent closing down of a place of employment or part thereof. In the case of closure, workers are entitled to one month’s notice and compensation. They also have preferential rights for employment in any other establishment belonging to the same employer.
The Act mandates that no workman employed in any industry can be laid-off, retrenched or discharged from service without cause and without following the due procedure prescribed under the Act. The employer is required to seek prior permission of the appropriate government before effecting layoffs, retrenchments and closures. Failure to comply with these provisions attracts penal consequences under the Act.
In summary, the key provisions aim to protect workers in situations of uncertainty by providing them notice, compensation and the right to be re-employed. At the same time, they place certain responsibilities on employers to justify their actions and follow due process. By balancing the interests of both parties, the Act seeks to promote industrial peace and harmony.
Unfair Labor Practices Prohibited
The Industrial Disputes Act, 1947 prohibits employers from engaging in unfair labor practices that could undermine the collective bargaining process or weaken trade unions. Unfair labor practices refer to those acts by the employer which are deemed unjust or oppressive.
According to the Act, employers are prohibited from taking adverse actions against employees for participating in trade union activities or filing charges against the employer. This includes actions such as termination, demotion, or pay cuts. Employers are also barred from dominating, interfering with, or financially contributing to trade unions. The aim is to allow trade unions to operate independently without undue influence from employers.
Employers cannot refuse to bargain collectively with trade unions in good faith. They must participate fully in discussions and negotiations on issues such as wages, working hours, leave, health and safety standards, welfare measures and grievance redressal mechanisms. Refusing to discuss these matters or deliberately causing delays in negotiations would qualify as an unfair labor practice.
The Act forbids employers from changing the conditions of service applicable to any workman without giving notice of such intention to the workmen’s trade union. This stipulation seeks to protect employees from sudden unilateral changes made to their terms of employment without opportunity for consultation or objection.
Other prohibited acts include threatening workmen or trade union leaders with dire consequences for participating in trade union activities, and instigating or promoting litigation between workmen and workmen or between employers and workmen. The aim is to prevent disruption of harmonious industrial relations through malicious legal disputes.
In summary, the unfair labor practices prohibited under the Act curb the immense power employers wield over employees and trade unions. By barring acts of interference, domination, victimization and refusal to bargain, the law creates conditions conducive for free trade union development and meaningful collective bargaining.
Penalties for Violation of the Act
The Act outlines strict penalties for violation of its provisions to ensure compliance. If an employer contravenes the Act’s sections pertaining to strikes and lockouts, including sections 22,23,24 pertaining to strikes and lockouts and does not act in good faith during conciliation proceedings, they may face imprisonment up to 6 months and/or a fine up to Rs. 1,000.
Additionally, if any person knowingly supplies false information regarding any strike or lockout, they will face imprisonment up to 6 months and/or a fine up to Rs. 1,000 as per section 27 of the Act. According to section 28, if any person willfully breaks a contract knowing that it will cause a strike or lockout, they will face imprisonment up to one month and/or a fine up to Rs. 1,000.
For illegal strikes and lockouts under sections 24 and 25, on conviction, every office bearer and employee of the trade union or federation will be punishable with imprisonment up to 6 months and/or fine up to Rs. 1,000. The union will also lose recognition under the Act for a period of 3 years.
If an employer closes down an establishment to resist conciliation proceedings or awards, they will face imprisonment up to 6 months and/or fine up to Rs. 5,000 as per section 33. If they dispense with or punish workmen unfairly, causing hardship, they will face imprisonment up to 6 months and/or fine up to Rs. 1,000 as per section 33A.
In summary, the penalties aim to discourage malicious intent, non-compliance and unfair practices by employers, trade unions or individuals. By imposing penalties for violations, the Act safeguards the rights and interests of workmen and promotes harmony between employers and workmen.
FAQs on the Industrial Disputes Act, 1947
The Industrial Disputes Act, 1947 provides the legal framework for regulating employment and resolving industrial disputes in India. If you have questions about this Act and how it applies to employers and employees, here are some frequently asked questions and answers:
An industrial dispute refers to any disagreement between employers and employees or employees and employees connected with the employment or non-employment, terms of employment, or conditions of work. This includes disputes over wages, allowances, hours of work, leave, holidays, dismissals, retrenchments, and trade union rights.
Conciliation, Courts of Inquiry, Labor Courts, Industrial Tribunals, and a National Industrial Tribunal for investigating and settling industrial disputes. The most commonly used methods are conciliation, adjudication, and arbitration.
Employers must establish Works Committees and Grievance Redressal Machineries, provide information to Conciliation Officers and Labor Courts when required, and implement the settlements, awards, and orders of Conciliation Officers, Labor Courts, and Tribunals. Employers cannot take any action against employees that would be deemed as an unfair labor practice under the Act.
Registered trade unions have the right to represent employees in industrial disputes. They can nominate representatives to Works Committees and raise industrial disputes on behalf of employees. However, trade unions cannot engage in or encourage activities like strikes, lockouts, gheraos, or dharnas that disrupt production or business operations.
To summarize, the Industrial Disputes Act, 1947 aims to cultivate cooperative relations between employers and employees and prevent illegal strikes and lockouts. Both parties have certain obligations to maintain harmony and settle disagreements through due process. Following the provisions of this Act can help build a fair, stable, and productive work environment.
Conclusion
Reflecting on the key provisions of the Industrial Disputes Act, 1947, it is clear that this legislation was a pioneering effort in India to establish a comprehensive legal framework for governing industrial relations and settling labor disputes. While the Act has undergone amendments over the years, its core objectives remain intact. As an employee or employer, being aware of your statutory rights and responsibilities under this law will empower you in any employment relationship. The adjudicatory bodies established under the Act serve as critical pillars for delivering justice when disputes arise. Overall, the Industrial Disputes Act remains a cornerstone of labor legislation in India. Leveraging its mechanisms prudently can foster more harmonious labor relations.
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