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Labour Laws - Notes based on previous year question papers
Labour Laws (0302)
Karnataka State Law University
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Labour Laws Notes by Praveen Kumar 1 Contents UNIT 1 ..................................................................................................................................................... 4 1. What is Industrial Dispute? Explain the essential requisites of an Industrial Dispute?.............. 4 2. Causes/Essential requisites of industrial Disputes: .................................................................. 11 3. Explain the factors which were responsible for departure from the old theory of “Master and Servant”. ........................................................................................................................................... 13 4. Outline the impact of industrial jurisprudence on labour welfare legislations. ....................... 16 5. Explain the provisions of the Industrial Disputes Act, 1947 relating to award......................... 22 6. Labour Policy in India ................................................................................................................ 30 7. Labour Problems ....................................................................................................................... 32 8. “Industry is an organised or occupied activity carried on with the cooperation of employer and employee to meet its object”. Justify with aid of Bangalore water supply vs Rajappa case..... 34 9. Principles of Labour Legislation ................................................................................................ 40 10. Strike and Lockout................................................................................................................. 44 11. Explain the term ‘workman’.................................................................................................. 48 12. Explain ‘Industrial Dispute’. When does an individual dispute become an Industrial Dispute? ............................................................................................................................................ 54 13. Write a Note on Settlement.................................................................................................. 57 14. Lay Off ................................................................................................................................... 58 15. Explain the provisions relating to recovery of money due from the employer under Industrial Dispute Act........................................................................................................................ 60 16. Explain the provisions relating to closure of an undertaking under Industrial Disputes Act, 1947 62 17. Discuss briefly the Authorities set up for the investigation of Industrial Disputes. ............. 64 18. Conditions of service, etc., to remain unchanged ................................................................ 71 19. Termination of service of workman by the employer for any reason whatsoever amounts to retrenchment. Explain with the help of decided cases. .............................................................. 76 20. Unfair Labour Practice .......................................................................................................... 80 21. Explain the role of arbitration in resolving industrial dispute. ............................................. 85 22. Write note on notice of change. ........................................................................................... 87 23. Registration of Trade Unions under the Trade Union Act 1926 ........................................... 91 24. Discuss the liability of the employer to pay compensation under the Workmen Compensation Act. ............................................................................................................................ 99 25. Benefits under Employees State Insurance Act 1948 ......................................................... 108 26. Contributions, Employees State Insurance Act................................................................... 116 27. Pension................................................................................................................................ 124 28. Discuss the mode of Recovery of Moneys due from the employer under the EPF Act, 1952 126 2 UNIT 1 1. What is Industrial Dispute? Explain the essential requisites of an Industrial Dispute? According to Sec. 2(k) of the Industrial Dispute Act, 1947, “Industrial dispute means any dispute or difference between employers and employers or between employers and workmen or between workmen and workmen, which is connected with the employment or non-employment or the terms of employment or with the conditions of labour of any person” The above definition of industrial disputes brings out the following essential ingredients: 1) There should be a disputes or difference; 2) The disputes or difference may be between: a) employer and employer, or b) employer and workman, or c) workman and workman. 3) The disputes or difference may be connected with: a) employment, or b) non employment, or c) the terms of employment, or d) conditions of labour of any person, and 4) The disputes should relate to an industry. The definition further shows that certain type of disputes can never fall within its ambit. For e. disputes between a government and an industrial establishment or between workmen and nonworkmen. Definitions of industry (section 2) Section 2(J) of the act defines industry as follows: “industry” means any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, handicraft or industrial occupation or vocation of workmen. From the above definition, industry appears to mean: 1) 2) 3) 4) 5) 6) 7) A business, such as merchandising, A trade, such as cutler, A manufacture, such as flour milling An undertaking, such as an electricity company, A calling, such as architect, A services, such as transporter, or An employment, which is a general term covering. Perhaps, the rest of the vocations. 4 Definition of workman section 2(s) “workman” means any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person(i) who is subject to the Air Force Act, 1950 (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, draws wages exceeding one thousand six hundred 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.] The definition of workman has three essential parts: 1. Statutory meaning of workman; 2. Legal fiction, and 3. Categories of persons excluded. Broadly speaking, the definition of “Industrial Dispute” may be analysed under four heads: 1. Factum of Industrial dispute 2. Parties to the dispute 3. Subject matter of the dispute 4. Origin of the dispute Factum of Industrial Disputes The expression ‘dispute or difference’ connotes a real and substantial difference having some elements of persistency and likely, if not adjusted, to endanger the industrial peace of the community. In Workmen of Hindustan Lever Ltd v. Hindustan Lever Ltd (1984), the Court observed: The expression “Industrial Dispute” has been so widely defined as not to leave anything out of its comprehension and purview involving the area of conflict that may develop between employer and the workmen and in respect of which a compulsory adjudication may not be possible. When does an Industrial Dispute come into existence? When parties are at a variance, and the dispute or difference is connected with the employment or non-employment or the terms of the employment or with the conditions of labour, there comes into existence an Industrial Dispute. There is divergence of opinion on the issue whether a mere demand to the appropriate government or to the Conciliation Officer without a dispute being raised by the workmen with the employer regarding such demand can be called an industrial dispute? 5 7. The jurisdiction of the labour court/Industrial Tribunal is limited to the points specifically referred and matters incidental thereto. Since the scope of its jurisdiction and power is circumscribed by the order of reference, it is not permissible for it to go beyond the terms of reference. 8. Thus, if a reference is made without any demand having been made on the employer either expressly or impliedly, there is no occasion for the employer to point out the nature of the dispute so as to facilitate the government for making an appropriate reference of the dispute. Parties to Dispute S (k) of the Act considered a dispute to be an industrial dispute only if it takes place betweenEmployers and Employers Employers and Workmen Workmen and Workmen Employers and Employers The term ‘employers and employers’ have been included in the definition in the Industrial Disputes Act 1947 to widen its scope and ambit. The disputes between employers and employers may arise in respect of wage matters in an area where labour is scarce or disputes of similar character. Employers and Workmen Bangalore WC and Mills Co v Their workmen (1968) Trade unions as such are not mentioned in the definition of Industrial Dispute because they act on behalf of the workmen and therefore, when a trade union raises a dispute, the workmen are deemed to be parties to the dispute. Due to the absence of an employer-employee relationship between a contract worker and principal employer, a dispute between them regarding the regularization of the service of contract workers cannot be called an industrial dispute. In Rajaji Nagar Co-op Bank Ltd v. PO, LC a Division Bench of Karnataka High Court held that a dispute between the employees of a Co-operative Society and the management of the society relating to their employment is clearly excluded from the purview of the definition of industrial dispute u/s 2(k). Workmen and Workmen This includes the disputes between them directly or through their trade unions. Such a dispute may be a demarcation dispute for example. Subject-matter of Disputes A dispute or difference must relate either to: Employment or Non-employment or Terms of employment or The conditions of labour of any person. 7 The legislature used these phrases in the definition of Industrial Dispute so that all aspects of labour problems may be resolved through the industrial relations machinery provided under the Industrial Disputes Act 1947. Employment Employment brings in the contract of service between the Employer and Employed. The concept of employment involves three ingredients: 1. The employer 2. The employee and 3. The contract of employment The employer is one who employs, i., one who engages the services of other persons. The employee is one who works on hire basis. The employment is the contract of service between the employer where under the employee agrees to serve the employer, subject to control or supervisions. Unemployment Unemployment is the opposite of employment. It is the positive or negative act of the employer that leads to unemployment. It may relate to an existing fact of unemployment or a contemplated unemployment. Four illustrations cited by the federal court in Western Indian Automobiles Association v Industrial Tribunal are: With respect to Employment: 1. An employer has already employed a person and a trade union says “Please do not employ him”. 2. An employer gives notice to a union saying that he wishes two particular persons. The union says “No” With respect to Unemployment: 1. An Employer may dismiss a man, or decline to employ him. 2. An Employer contemplates turning out those who are already in his employment. The expression unemployment is sufficiently elastic to include all cases of 1. Termination of service either voluntarily or by act of parties. The instances of this kind are dismissal, discharge, retrenchment, compulsory retirement etc. It also includes temporary unemployment, e., suspension, layoff, compulsory leave, lockout, strike etc. Further, it would include within its scope the words arising out of unemployment, e., reinstatement, reemployment, compensation, and back wages for wrongful termination of service. Terms of employment The expression Terms of employment generally cover basic wages, Dearness Allowances and other allowances, wages on promotion, wages on demotion, wages on transfer out of town, wages for overtime work, wages for work on holiday, payment of wages, recovery of wages, bonus, retiral benefits, e., pension, provident fund, gratuity, pension etc. 8 The appellants, who were the workmen of Dimakuchi Tea Estate, espoused the cause of one Dr. K. P. Banerjee, Assistant Medical Officer, who had been dismissed unheard with a month's salary in lieu of notice but who had accepted such payment and left the garden and the dispute raised was ultimately referred by the Government for adjudication under s. 10 of the Act. Both the Tribunal and the Appellate Industrial Tribunal took the view that as Dr. Banerjee was not a workman within the meaning of the Act, the, dispute was not an industrial dispute as defined by S. 2(k): Held, (per Das, C. J., and S. K. Das, J., Sarkar, J., dissenting), that the expression 'any person' occurring in S. 2(k) of the Industrial Disputes Act, 1947, cannot be given its ordinary meaning and must be read and understood in the context of the Act and the object the Legislature had in view. Nor can it be equated either with the word 'workman' or 'employee'. The two tests of an industrial dispute as defined by the section must, therefore, be (1) the dispute must be a real dispute, capable of being settled by relief given by one party to the other, and (2) the person in respect of whom the dispute is raised must be one in whose employment, nonemployment, terms of employment, or conditions of labour (as the case may be), the parties to the dispute have a direct or substantial interest, and this must depend on the facts and circumstances of each particular case. “Can it be said that workmen as a class are directly or substantially interested in the employment, non-employment, terms of employment, or conditions of labour of persons who belong to the supervisory staff and are, under the provisions of the Act, non-workmen and for whose representation the act makes no provision? The answer is No” Applying these tests, the dispute in the present case which was in respect of a person who was not a workman and belonged to a different category altogether, could not be said to be a dispute within the meaning of S. 2(k) of the Act and the appeal must fail. 10 2. Causes/Essential requisites of industrial Disputes: The phenomenon of industrial disputes is inherent in the industrial system. This is because of the nature of industrial work, i., it involves division of labour, it is group work, and it is carried under control. As the late Dr. Radha Kamal Mukherjee observed, “The development of a capitalistic industry which means the control of the tools of production by a small entrepreneur class has brought to the force the acute problem of friction between management and labour throughout the world”. Cause-wise Industrial Disputes in India Compared to the situation prevailing in early 1980s, it is noted from Table 25 that causes like wages bonus and allowances, leave and hours of work are much less important now, while causes like indiscipline and violence have become more responsible for industrial sickness. The important causes of industrial disputes in India are summarized below: The percentage distribution of disputes by causes from 1973 onwards has been shown in Exhibit 2 reveals the following causes of industrial disputes: 1. Wages and Allowances: Since the cost of living has generally showed an increasing trend, the workers have been fighting for higher wages to meet the rising cost of living and to increase their standard of living. 34% of the industrial disputes in 1973 were due to demand for higher wages and allowances. This percentage was 36% in 1974. During 1985, 22% of the disputes were due to wages and allowances. Wages and allowances accounted for 25% of disputes in 1986, 26% in 1992, 25% in 1996 and 20% in 2000. 2. Personnel and Retrenchment: Personnel and retrenchment causes have also been important. During 1973, 24% of the industrial disputes were because of dismissals, retrenchment, etc. as compared to 29% in 1961. In 1979, personnel and retrenchment topped the list of causes of industrial disputes with 29%. The number of disputes because of personnel and retrenchment was 32% in 1971, 23% in 1985 and 19% in 1996. In 2000, about 12% of the disputes occurred due to dismissals, layoffs, retrenchments, etc. 11 3. Explain the factors which were responsible for departure from the old theory of “Master and Servant”. During the twentieth century a new branch of jurisprudence known as Industrial Jurisprudence has developed in our country. Industrial jurisprudence, is a development of mainly post-independence period although its birth may be traced back to the industrial revolution. Before independence it existed in a rudimentary form in our country. The growth of industrial jurisprudence can significantly be noticed not only from increase in labour and industrial legislations but also from a large number of industrial law matters decided by the Supreme Court and High Courts. It affects directly a considerable population of our country consisting of industrialists, workmen and their families. Those who are affected indirectly constitute a still larger bulk of the country's population. This branch of law modified the traditional law relating to master and servant and had cut down the old theory of laissez faire based upon the 'freedom of contract' in the larger interest of the society because that theory was found wanting for the development of harmonious and amicable relations between the employers and employees. Individual contracts have been in many respects substituted by a standard form of statutory contract through legislation and judicial interpretation. The traditional right of an employer to hire and fire his workmen at his will has been subjected to many restraints. Industrial Tribunals can by their award make a contract which is binding on both the parties creating new rights and imposing new obligations arising out of the award. There is no question of the employer agreeing to the new contract, it is binding even though it is unacceptable to him. The creation of new obligations is not by the parties themselves. Either or both of them may be opposed to it, nevertheless it binds them. Thus, the idea of some authority making a contract for the workmen and employer is a strange and novel idea and is foreign to the basic principle of the law of contract. Similarly, there is change in the concept of master and servant. One who invests capital is no more a master and one who puts in labour is no more a servant. They are employer and employees, the former may hire the latter but he can no more fire them at his will. The interest of the employees is in many respects protected by legislation. Both are now parties in an enterprise without one yielding to the higher status of another but as co-sharers in a partnership. The right of labour participation in management has been given legislative recognition to the utter despair of the capitalist. Most of the benefits claimed by a workman are not part of his bargain with the employer when the latter employed him or are not due to them on account of any contract but of "status". The industrial society all over the world has been moving during the present century from contract to status and this status is a politico-socio-economic juristic status. What were the factors that led to this departure from the old theories of the law of contract, and the law of Master and Servant? Industrialisation in India, as in other countries, brought with it some 13 new socio-economic problems. Those who control the industry have a natural tendency of multiplying their wealth and if this tendency is not checked the rich grow richer and the poor become poorer day by day. The gap between the rich and the poor ultimately grows on to the extent that it develops into two distinct classes in any industrial society, a few of whom are 'Haves' and others are 'Have-nots'. This economic disparity leads to a struggle between 'Haves' and 'Have-nots', the latter exploited. Although this situation continues for some time and it had continued to be so in our country too, but gradually the workmen realised that they could put a better fight if they get united. This realisation was closely followed by a period of industrial unrest leading to strikes and lock-outs. In conditions so disturbed, the world has witnessed the horrors of two world wars resulting in spiral rise in the cost of living. With the rise in the cost of living there has been consistent demand from labour for increase in wages. Democratic ideas have also grown simultaneously with the growth of industrialisation in our country. These democratic ideas have pleaded for and have also helped in mass awakening and consciousness for greater power amongst the working class. Out of the struggle between workers, demanding for better share in the production and profit of the industry and the employers' hesitation to part with it beyond a certain limit, have grown the recognition of certain principles which are considered to be fundamental in almost all developed countries of the world. The basic principles are: (1) The right of workmen to combine and form associations or unions. (2) The right of workmen to bargain collectively for the betterment of their conditions of service. (3) The realisation that economic struggle is inevitable because it is but natural that labour agitate for better conditions. (4) A shift from the doctrine of Laissez Faire to a Welfare State. (5) Tripartite Consultations i., solution of the industrial or labour disputes through the participation of the workers, employers and the Government. (6) The State can no more be a neutral onlooker but must interfere as the protector of the social good. (7) Minimum standards must be guaranteed through State Legislation. The concept of industrial jurisprudence in our country only developed after independence. Until Independence the change in attitude of the government and the benevolent labour legislation only aimed at amelioration of the conditions of labour and it could hardly be said to be a deal in social justice to the working class. The birth of industrial jurisprudence in our country may be ascribed to the Constitution of India' which made more articulate and clear the industrial relations philosophy of the Republic of India. This philosophy has afforded the broad and clear guidelines for the development of our industrial jurisprudence and has thus taken India one step forward in her quest for industrial harmony.' The Parliament and the Supreme Court have helped in shaping industrial jurisprudence, the former through legislation and the latter as interpreter of the labour laws. Industrial jurisprudence is of great importance to all developed or developing countries of the world because it is concerned with the study of problems relating to human relations arising out of a large scale development of a factory system which has emerged in consequence of industrial revolution. 14 4. Outline the impact of industrial jurisprudence on labour welfare legislations. Introduction The requisites for an efficient working unit are: An amicable environment, Cooperation between the workers and the employers, Reasonable remuneration and Proper working conditions. From the laissez faire to the ‘welfare state’, the socio-economic conditions have faced drastic changes, not only in India but also across the world. The industrial position that prevailed in the pre-independence era of India was not pristine. The industrial revolution in India brought with it certain inhumane as well as unjust aspects of the colonial era. To cope with these problems, industrial legislations were enacted in India. To keep pace with the changing socio-economic conditions in India, the Legislature as well as the Courts had to check the unfavourable growth of the industrial legislations. Industrial legislation finds its origin from industrial jurisprudence, which is a development of the 20th century world. In India, industrial jurisprudence prevailed before Independence, but it was in rudimentary form. The Industrial revolution was the emanating factor behind the growth of the industrial jurisprudence. The Industrial revolution brought with it the most inhumane aspects of human life. It saw the exploitation of man by man. The maximization of profit, even at the cost of the lives of the labourers, was the paramount goal of the employer. ‘Freedom of contract’ was the evident result of laissez faire. The employer was free to fire an employee arbitrarily. Thus the employees were always at the loss. To protect the interest of the employees, the legislature and courts in India took a giant step forward to give birth to Industrial Jurisprudence in India – the former through enactments and the latter through judgments. The scope of industrial jurisprudence not only covers the protection of interests of the employees but it also aims at securing a cordial relationship between the employers and employees in a working unit. The evil impact of the industrial revolution on India. As per the economic policy of the British government, they never wanted to make India an industrial base, rather they wanted to make India a supplier of raw materials for their industries. Instead of promoting industries in India, they continued to de-industrialise and ruralise the Indian economy. Further with the advent of the industrial revolution in England, the British government revved up its efforts to further exploit the Indian economy. As a result, in 1947, when the British left, India represented a ruined economy, a sick society and the evil effects of neo-colonialism. However, the evil impact of industrial revolution can be classified into Social Evils and Economic Evils, which are discussed as below: Economic Evils. 1 artisans lost the psychological satisfaction that they derived in producing goods themselves. In the industries, they had to produce only a part of the finished goods. 16 2 labourers were underpaid. They could just earn from hand to mouth. The wages were sufficient to provide them with daily bread, but at the cost of other necessities of life. 3 term of employment was not secure. The employers were free to exercise their arbitrariness in sacking the labourers. The factory workers had to suffer from the periodic unemployment and under-employment. Social Evils. 1 overcrowded cities, due to the large-scale immigration of the village population in the cities led to the industrial slums and acute housing problems. It had its adverse impact on the health of the workers and also led to the sanitation problems in the cities. 2 working condition in the factories were hazardous. Moreover, the long hours of duty, with no rest and no facilities of recreation marred the welfare of the workers. The machines were taken care of by the factory owners, with little regard for the safety of the workers. 3 were exposed to serious accidents caused by the improperly managed machines in the factory. These accidents were not taken seriously by the factory owners. The victims of such accidents did not have any right to compensation. 4 to the inadequate wages, the wives and children of the workers were exposed to the exploitation by the factory owners. They were employed at low wages without regard to their physical conditions. Labour problems in India. The factory owners paid their sole attention towards the maintenance of the machines irrespective of the health and working conditions of the workers. The employers neglected the conditions of the workers as the manual labour was abundantly available to them. The workers were underpaid. They could not raise their voice. They were illiterate and poor, so were ignorant of their rights. Taking the advantage of this situation, the employers dictated their own terms. The government also did not interfere in the matter as it was deemed to be a freedom of contract. The situation worsened further. The government could not just see it as a neutral player and it had to interfere. Moreover, some of the philanthropic agencies like the Servants of India Society and Social Service League raised voice against these problems. Later some industrial social workers also raised their voices against these problems. Initially, they lacked the resources and bargaining power but they were successful in mobilising the public voice against these problems. Later, the factory owners also realised the seriousness of the problem and also that a contended worker will add to the productivity of the factory. Later the Government also, could not confine itself as a neutral spectator. The Government also realised that it was in the interest of the national economy as well as the labourers that constitute a bulk of population in India. Thus the drive for the welfare of the labourers and for the protection of the Indian economy compelled the Government to intervene in the situation. Evolution of industrial jurisprudence in India. The evolution of Industrial Jurisprudence in India can be traced back to the period of postIndependence. Before the Independence, the industrial jurisprudence existed in a rudimentary form. The paramount concern of the Pre-independence industrial jurisprudence was the amelioration of the working conditions of the workers at the factories. There was hardly any deal with social justice to the working class. It was only after the commencement of our Constitution, that adequate provisions for social justice to the workers were inserted. Before Independence, India was not only a great agricultural country, but also a manufacturing country. But the British Government, as a matter of their policies always tended to discourage the Indian industries. This led to widespread 17 2. The Punjab Shops and Commercial Establishment Act, 1958, regulates the conditions of work and terms of employment of workers engaged in shops, commercial establishments, theatres, restaurants, etc. 3. The Punjab Maternity Benefit Act, 1943, provides for the grant of cash benefits to women workers for specified periods before and after confinements. 4. The Employment of Children Act, 1938, prohibits the employment of young children below the age of 15 years in certain risky and unhealthy occupations. 5. The payment of wages Act, 1936, regulates the timely payment of wages without any unauthorized deductions by the employers. 6. The Minimum Wages Act, 1948, ensures the fixation and revision of minimum rates of wages in respect of certain scheduled industries involving hard labour. 7. The Industrial Disputes Act, 1947, provides for the investigation, and settlement of industrial disputes by mediation, conciliation, adjudication and arbitration. There is scope for payment of compensation in cases of lay-off and retrenchment. 8. The Industrial Employment (Standing Orders) Act, 1946, requires employers in Industrial establishments to define precisely the conditions of employment under them and make them known to their workmen. These rules, once certified, are binding on the parties for a minimum period of six months. 9. The Workmen’s Compensation Act, 1923, provides for compensation to injured workmen of certain categories and in the case of fatal accidents to their dependants if the accidents arose out of and in the course of their employment. It also provides for payment of compensation in the case of certain occupational diseases. 10. The Indian Trade Unions Act, 1926, recognizes the right of workers to organise into trade unions, when registered, have certain rights and obligations and function as autonomous bodies. 11. The Employees’ State Insurance Act, 1948, provides for sickness benefit, maternity benefit, disablement benefit and medical benefit. 12. The Employees’ Provident Fund Act, 1952, seeks to make a provision for the future of industrial worker after he retires or in case he is retrenched, or for his dependents in case of his early death. 13. The Punjab Industrial Housing Act, 1956, provides for the administration allotment, realization of rent, etc., in connection with quarters constructed under the Subsidized Industrial Housing Scheme. Recent trends in labour law. The experience in India during the last 50 years has been that the Supreme Court of India, various High Courts, Industrial Tribunals and Labour Courts have enriched the country with a variety of precedents of labour demands by their sweat and toil and missionary research from almost a barren and fallow field of labour jurisprudence. They have handed down to the world community jurisprudence, as living as dynamic, as valid as sound, which has redeemed the lost faith of industrial masses in law and justice. Their contribution to the development of labour law and redemption of social values of law and justice, is unparalled in the world history of jurisprudence, far exceeding the contribution made by Equity in England. Adjudication of industrial demands being a complicated task, the Tribunals have to go into the merits of each issue which necessarily means examination, 19
Labour Laws - Notes based on previous year question papers
Course: Labour Laws (0302)
University: Karnataka State Law University
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