Synopsis-Labour Law

Q. Explain the following terms under the Industries Disputes Act, 1947.

(i) Average pay ---

Ans. According to Section 2 (a), ‘Average Pay’ means the average of the wages payable to
workman-

(1) In the case of a monthly paid workman, in the three complete calendar months,

(2) In the case of a weekly paid workman, in the four complete weeks,

(3) In the case of daily paid workman, in the twelve full working days.

(ii) Conciliation Proceeding ---

Ans. According to Section 2 (e), ‘ Conciliation Proceeding’ means any proceeding held by a
conciliation officer or Board under this Act.

(iii) Employer ---

Ans. The head of the department or the chief executive officer of an authority.

(iv) Independent Person ---

Ans. A person is deemed to be independent with reference to his appointment, when he is

appointed the presiding officer, of a Board, Court or Tribunal or as a member.

(v) Public Utility Service ---

Ans. According to Section 2 (n), ‘Public Utility Service’ means ---

(1) Any railway service, or any transport service, for the carriage of passengers or goods by air,

(2) Any service in or in connection with the working of any major port or dock,

(3) Any section of industrial establishment on working of which the safety of the establishment
or the workmen employed therein depends,
(4) Any postal, telegraph or telephone service,

(5) An industry which supplies power, light or water to the public,

(6) Any system of public conservancy or sanitation.

(vi) Industrial Establishment or undertaking ---

Ans. This term means an establishment or undertaking in which any industry is carried on. But if
several activities are on union establishment, any one or some of such activities are , an industry,
then---

(1) If any unit of such establishment or undertaking carrying on any activity, being an industry is
severable from the other unit , such, unit shall be deemed to be separate establishment or
undertaking.

(2) If the predominant activity carried on in such establishment or any unit thereof is an industry
and other activity is not severable from and is, for the purpose of carrying on of such
predominant activity, the entire establishment or undertaking, as the case may be unit there of
shall be deemed to be an industrial establishment or undertaking.

(vii) Working Committee ---

Ans. Section 3 provides that in industrial establishment in which 100 or more workmen are
employed the appropriate government may by general or special order, require the employer to
constitute a works committee in the prescribed manner. Consisting of representatives of
employers and workmen in equal number. There cannot be more than 20 members in all. The
members from amongst the workmen shall be elected by the prescribed mode of election in
consultation with Trade Union if any registered under the Trade Unions Act, 1926.

(viii) Conciliation Officer ---

Ans. The appropriate Government may by Gazetted notification, appoint conciliation officers in
such number and for such area, as it thinks fit either permanently or temporarily. Their main aim
is to mediate in the settlement of industrial disputes and to promote their settlement. Conciliation
officer may be appointed for any specified industries in a specified area. The jurisdiction, powers
and functions of the conciliation officer shall be notified in the official gazette.

(ix) Court of Inquiry ---

Ans. Section 6 contains the provision for Court of inquiry. The appropriate Government may, as
occasion arises by notification in official gazette, constitute a Court of inquiry for inquiring into
any matter appearing to be connected with or relevant to any industrial dispute.

(x) Collective Bargaining ---

Ans. Collective bargaining is a process, wherein the Trade Unions and the employers, put
forward their reasons and come to some certain settlement on the points of issues of disputes or
differences. There is full trial of strength in the process of the collective bargaining. This process
has been in vogue for a long time. For the better progress of the industries, the disputes of
Collective bargaining need settlement at the top priority and amity and good understanding must
be promoted and established between the two disputing parties, the employers and the workmen.

Q. What is the definition of “Industrial Dispute” under Industrial Dispute Act, 1947 ? When does
it arise ? When does an ‘Individual dispute’ become an ‘Industrial Dispute’ ?

Ans. According to section 2(k), ‘Industrial Dispute’ means any dispute or difference between ---

(a) Employers and employers

(b) Employers and employees

(c) Workmen and workmen; which is connected with:

(1) Employment or non-employment

(2) The terms of employment

(3) With the condition of labour of any person.

An Industrial dispute can be said to have arisen and to be in existence only when the demand is
made by the workmen and is rejected by the management or vice-versa. If the demand is made
by the workmen and is accepted by the employer and if the workmen are satisfied no industrial
dispute will ever come Into existence.

The individual dispute may be held to be an industrial dispute it is necessary that it must fulfil
two conditions ---

(1) That the workmen as a body or a considerable section of them must be found to have made
common cause with the individual workman,

(2) That the dispute was taken up or sponsored by the workmen as a body or a considerable
section of them at a time, before the date of reference.

Or

Whether the followings comes under the definition of Industrial disputes or not ? ---

(1) A dispute between a single workman and his employer.

(2) A dispute between a dismissed employee and his employer.

Ans. (i) A dispute between a single workman and his employer --- A dispute between employer
and an individual workman, cannot be an industrial dispute. It is only an individual dispute
outside the scope of the Industrial Disputes Act.

(ii) A dispute between a dismissed employee and his employer --- Section 2(a) has been inserted
by Act. 35 of 1965 which provides that where any employer discharges, dismisses, retrenches or
otherwise terminates the services of any individual workman any dispute or difference between
that workman and his employer connected with, or arising out of such discharge, dismissal
retrenchment or termination shall be deemed to be an industrial dispute notwithstanding that no
other workman nor any union of workmen is a party to the dispute.

Q. What are the various authorities under the Industrial dispute Act, 1947 ? Discuss the
constitution and function of the authorities.

Or
Discuss machineries which the Industrial Disputes Act, 1947 provide for the settlement of the
Industrial Disputes ? Are these measures sufficient in your opinion in the direction of achieving
the aim ?

Ans. The following machineries or Authorities are provided under the Act for the settlement and
adjuration of the Industrial Disputes.

(1) Conciliation machinery - This machinery consists of the following machinery ---

(i) Working Committee - Section 3 provides that in industrial establishment in which 100 or
more workmen are employed the appropriate government may by general or special order,
require the employer to constitute a works committee in the prescribed manner. Consisting of
representatives of employers and workmen in equal number. There cannot be more than 20
members in all. The members from amongst the workmen shall be elected by the prescribed
mode of election in consultation with Trade Union if any registered under the Trade Unions Act,
1926.

(ii) Conciliation Officer - The appropriate Government may by Gazetted notification, appoint

conciliation officers in such number and for such area, as it thinks fit either permanently or
temporarily. Their main aim is to mediate in the settlement of industrial disputes and to promote
their settlement. Conciliation officer may be appointed for any specified industries in a specified
area. The jurisdiction, powers and functions of the conciliation officer shall be notified in the
official gazette.

(iii) Conciliation Board – This is also constituted by the appropriate Government for the
settlement of

industrial disputes through mutual agreement. The parties to the dispute sit together and try to
reach at a meeting point acceptable to them. The chairman of the Board is an independent
person, not being interested in any of the parties or having no concern with dispute in question.
In addition to the chairman, there are equal number of representatives of the employers and the
workmen as members as the appropriate Government thinks fit. The representatives are
appointed with the consent of the parties.
(2) Adjudication machinery – It consists of the following three authorities ---

(i) Labour Court – Such Court is constituted by the appropriate Government under Section 7 of
the Act. Labour Courts adjudicate such industrial disputes which are referred to them by the
appropriate Government under Section 10. Such disputes may be related to the matters of the
second schedule. The Court is presided over by single judge.

(ii) Industrial Tribunal – Such tribunal is constituted by the appropriate Government under
Section 7 (a) of the Act. Tribunals adjudicate the industrial dispute which are referred to them by
the appropriate Government for that purpose under Section 10 (1). Such disputes may be related
to any items of second or third schedule of the Act.

(iii) National Industrial Tribunal – Such tribunal is constituted by the appropriate Government
under Section 7 (b) of the Act. This tribunal adjudicates only such industrial disputes which are
connected with any matter of public utility service or are of national importance, or any dispute
in which State and the Central Government has interest or such industries which are spread in
more than one State.

(iv) Court of Inquiry - Section 6 contains the provision for Court of inquiry. The appropriate
Government may, as occasion arises by notification in official gazette, constitute a Court of
inquiry for inquiring into any matter appearing to be connected with or relevant to any industrial
dispute. There is one independent person as a chairman of the Court appointed by the appropriate
Government and two or more members duly appointed by the Government.

(v) Arbitration Machinery – Section 10 (a) contains the provision for referring the industrial
disputes for arbitration voluntarily by the employers and the workmen with free consent. The
number of arbitrators shall be equal from both the parties. The parties can refer the disputes by
their mutual agreement reduced in writing provided they are not already referred to Labour Court
or tribunal for adjudication under Section 10 of the Act. Disputes cannot be referred for
adjudication and arbitration at one and the same time. That will be illegal procedure.

(vi) Grievance Settlement Authority – The provision for such authority was made by
adding/inserting a new Section 9 (c) through an amendment made in 1982. The employer of such
establishment, where the number of the workmen is 100 or more, is bound to appoint such
authority for the purpose of settlement of individual dispute. Now, the individual industrial
dispute should be referred to the Grievance Settlement Authority. This is mandatory provision. It
is only on the non-acceptance of the decision of the authority, that the dispute may be referred
for adjudication under Section 10 (1).

Are these measures sufficient- Inspite of the fact of the said provision of the constitution of five
machineries, there is no decreasing trend in the industrial disputes and at the same time it has not
been possible to wipe out the differences between the employers and the workmen. The
increasing dissatisfaction and inimical attitude is not satisfactorily removed or lessened. The
Central Government is well acquainted with such a situation. This is why the Standing
Committee of the Central Labour Ministry is very seriously thinking of introducing a new system
for the settlement of the industrial disputes.

Q. Examine the constitution, powers and functions of the Board of Conciliation constituted under
the Industrial Disputes Act, 1947. Discuss the consequences does if the Board fails to reach any
conciliation ?

Ans. Constitution of Conciliation Board - Section 5 of the Industrial Disputes Act, 1947 contains
the provision for the constitution of the conciliation Board, a body constituted by the appropriate
Government by the notification in the Official Gazette for purpose of settling the industrial
disputes arising between the employers and employees. The Board shall consist of a chairman,
two or four members as the appropriate Government deems fit. The chairman shall be an
independent person and the members of the parties shall be equal in number and be appointed on
the recommendation of the employers and workmen respectively. If any party fails to appoint its
representative in the prescribed time, then the Government will appoint such persons as it thinks
fit for purpose of that party’s representation. The number of Board shall 3 or 5. If the quorum is
complete, the Board may function even if the Chairman is absent or any member. But if the
appropriate Government notifies that the services of the chairman or any member shall not be
available, the Board will not function till the chairman or the member, as the case may be, is not
appointed.

Power and Duties of the Conciliation Board – Section 13 of the Act mentions the functions to be
performed by the Conciliation Board. The function of the Board commences only when any
industrial dispute is referred to it by the appropriate Government. Some of the powers of the
Civil Court are vested in the Board. The Board shall complete its function and send the report of
settlement within the period of 60 days prescribed for this purpose. This period of two months
may be extended, but with the consent of both the parties. The consent must be in writing, signed
by an agreement of the parties. The members of the Board may enter the premises occupied by
any establishment to which the dispute relates. The Board has power of ----

(a) Enforcing the attendance of any person and examining him on oath,

(b) Compelling the production of documents and material objects,

(c) Issuing commission for the examination of witnesses,

(d) Such other matters as may be prescribed.

The report of the Board shall be in writing signed by all the members of the Board. Any member
may record a minute of dissent. The report when submitted shall be published by the appropriate
Government within 30 days of its receipt.

Q. Write short notes on the following under the Industrial Dispute Act, 1947------

Ans. (1) Award - According to Section 2 (b), of the industrial dispute Act, 1947 ‘Award’ means
an interim or a final determination of any industrial dispute or of any question relating thereto by
any labour court, Industrial Tribunal or National Industrial Tribunal and includes an arbitration
award made U/S 10-A.

Ans. (2) Closure – According to Section 2 (oo) ‘closure’ means the permanent closing down a
place of employment or part thereof. The clause (oo) defining the expression closure has been
inserted by Act No. 46 of 1982 with effect from 21-8-1984.

Ans. (3) Controlled Industry – According to Section 2(ee) ‘Controlled Industry’ means any
industry the control of which by the Union has been declared by any Central Act to be expedient
in the public interest.

Ans. (4) Court – According to Section 2 (f) ‘Court’ means a Court of Inquiry constituted under
this Act.
Ans. (5) Industry – According to Section 2 (j) ‘industry’ means any business, trade, undertaking,
manufacture or calling of employers and includes any calling, service, employment, handicraft or
industrial occupation or avocation of workmen.

Ans. (6) Strike – ‘Strike’ means a cessation of work by a body of persons employed in any
industry acting in combination of any number of persons who are employed to accept
employment.

Ans. (7) Tribunal – According to Section 2 {r}, ‘Tribunal’, means an industrial Tribunal
constituted U/S 7-A and includes an Industrial Tribunal constituted before the 10th day of
March, 1957 under this Act.

Ans. (8) Unfair Labour Practice – According to S(ra), ‘Unfair Labour Practice’ means any of the
practices specified in Fifth Schedule. It contains several practices. In category I, it contains 16
practices which are said to be unfair practices on the part of employers or their trade unions. For
example, to interfere with, restrain from, or coerce workmen in the exercise of their right to
organize, form , join or assist a trade union or to engage in concerted activities for the purpose of
collective bargaining or other mutual aid or protection, to establish employer sponsored trade
unions of workmen, to discharge or dismiss workmen by way of victimization, to recruit
workmen during a strike which is not an illegal strike etc.

Ans. (9) Wages – According to Section 2 (rr) , the term ‘wages’ as contained in the Act means
all remuneration which can be expressed in terms of money which is paid to a workman in
respect of his employment according to terms and conditions of his employment. It includes all
allowances including D.A. to which a workman is entitled to get, value of any house
accommodation supply of food grains, or any other articles of the kind or supply of any service.
It also includes any travelling concession paid to the workman or any commission on the
promotion of sales or business or both.

Ans. 10. Workman – The term ‘workman’ has been defined U/S 2(s) of the Industrial Disputes
Act. It 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 the dispute, or whose
dismissal, discharge or retrenchment has led that dispute.

Ans. 11. Continuous Service – Continuous service means uninterrupted service and includes
service which may be interrupted merely on account of sickness or authorized leave or an
accident or strike which is not illegal or a lock-out or a cessation of work which is not due to any
fault on the part of workman.

Ans.12. Lay-Off – According to Section 2 (kkk), ‘lay-off’ means the failure, refusal or inability
of an employer on account of shortage of coal, power or raw materials or the accumulation of
stocks or the breakdown of machinery or for any other reasons, to give employment to a
workman whose name is borne on the muster roll of his industrial establishment and who has not
been retrenched.

Ans. 13. Lock-out – According to Section 2 (e), ‘lock-out’ means----

(1) Temporary closing of a place of employment,

(2) The suspension of work,

(3) The refusal by an employer to continue to employ any number of persons employed by him,
but it does not include the discharge of employees by an employer.

Ans. 14. Appropriate Government – According to Section 2(a), the Central Government as well
as the State Government are vested with various powers and the duties in relation to matters dealt
with in this Act. In relation to some industrial disputes the Central Government and in relation to
some others the State Government concerned are the Appropriate Government to deal with such
disputes. Therefore, to avoid repetition, it was expedient to use a phrase which may be used in
the same sense in different sections of the Act.

# Labour Law-Important Questions Part One

Q.. How can money due from an employer under a settlement or an award be recovered and what
is the procedure for computing the money value of any benefit which a workman is entitled to
receive from the employer?

Ans. Recovery of Money Due to Workman From an Employer— According to Section 33-C of
Industrial Disputes Act, 1947, where any money is due to workman from an employer under a
settlement or an award , the workman himself or any other person authorised by him in writing in
this behalf, or , in the case of death of workman, his assignee or heirs may, without prejudice to
any other mode of recovery, make an application to the appropriate Government for the recovery
of the money due to him and if the appropriate Government is satisfied that any money is so due,
it shall issue a certificate for that amount to the Collector who shall proceed to recover the same
in the same manner as an arrears of land revenue is recovered.

Procedure for Computing the Money Value of Any Benefit to a Workman ---- Where a workman
is entitled to receive from the employer any benefit which is capable of being computed in terms
of money, the amount at which benefit should be computed may be decided by such labour court
as may be specified in this behalf by the appropriate government within a period not exceeding 3
months and the amount so determined may be recovered as mentioned above.

Two options are open to the workman for recovery of the money due. He may seek redressal
from civil court or may proceed with an application to the appropriate government for recovery
through collector.

For the purpose of computing the money value of benefit, the labour court may, if it so thinks fit,
appoint a commissioner who shall after taking such evidence as may be necessary, submit a
report to the labour court. The labour court shall determine the amount after considering the
report of the commissioner and other circumstances of the case.

Is there any legal bar against referring to the Industrial Tribunal, the question relating to the
determination of the compensation payable on the closure of an undertaking?

Ans. In case an undertaking is closed down for any reason whatsoever every workman who has
been in continuous service for not less than one year in that undertaking immediately before such
closure shall subject to the provisions of Sub-Section (2), be entitled to notice and compensation
in accordance with the provisions of Section 25-F of Industrial Disputes Act, 1947 as it the
workman had been retrenched.

On the other hand, where the undertaking is closed down on account of unavoidable
circumstances beyond the control of the employer the compensation to be paid to the workman
U/Cl. (b) of Section 25-F, shall not exceed his average pay for 3 months. Where an undertaking
engaged in mining operation is closed down by reason merely of exhaustion of the minerals in
the area in which such operations are carried on, no workman referred to in that sub-section shall
be entitled to any notice or compensation in accordance with the provisions of Section 25-F, if --
--

(i) The employer provides the workman with alternative employment with effect from the date of
closure at the same remuneration as he was entitled to receive, and on the same terms and
conditions of service as were applicable to him immediately before the closure,

(ii) The service of the workman has not been interrupted by such alternative employment,

(iii) The employer is under the terms of such alternative employment or otherwise, legally liable
to pay the workman in the event of his retrenchment, compensation on the basis that his service
has been continuous and has been interrupted by such alternative.

Where any undertaking set up for the construction work is closed down on account of the
completion of the work within 2 years from the date on which the undertaking had been set up,
no workman employed therein shall be entitled to any compensation, but if the construction work
is not so completed within 2 years, he shall be entitled to notice and compensation under that
section for every completed year of continuous service or any part thereof in excess of 6 months.

There is no legal bar to refer to the Tribunal to determine the compensation payable as a result of
the closure of an undertaking.

Q.. Trace the history of the development of Trade Unionism in India.

Ans. The germs of trade unions in India can be traced back to the year 1890, when for the first
time an association of mill workers was formed in the name and style of “Bombay Mill hands
Association”. This association was formed for the redressal of grievances of the Bombay mill
workers.

“Trade Unionism to be fully effective, demands two things : a democratic spirit and education.
The democratic ideal has still to be developed in the Indian workers and the lack of education is
the most serious obstacle of all. The latter difficulty does not arise merely or even mainly from
illiteracy. Few Trade Unions can afford to conduct benevolent work, and the majority find it hard
to convince the worker that a subscription is worthwhile except when a dispute is imminent or in
progress”.

Development of Trade Union Law in India ----- After independence democratic spirit is
gradually developing among the Indian citizens and the workmen in industry are not an
exception to it. It was in the year 1920 that the High Court of Madras in a suit filed against the
officials of the Madras Textile Labour Union by Binny & Co. granted an injunction restraining
the Union Officials to induce certain workers to break their contracts of employment by refusing
to return to work. Obviously, the leaders of the Trade Union found themselves liable to
prosecution and imprisonment even for bona fide, trade union activities.

It was then that they felt that some legislative protection of Trade Union was necessary. Mr.
N.M. Joshi, the General Secretary of All India Trade Union Congress, successfully moved a
resolution in the Government for protection of Trade Unions. The employers were so much
opposed to any such legislative measure being adopted that the passing of the Indian Trade
Union Act could only be possible in 1926. But this Act was enforced only from 1st June, 1927.

Q.. Can a minor become Member of a Registered Trade Union? If so, on what conditions?

Ans. Yes, a minor can become the member of a registered Trade Union. Section 21 gives the
rights of membership of a Registered Trade Union even to persons who are minors but not less
than 15 years of age. This right of minors is subject to any rules of the Trade Union to the
contrary. The minor members of a registered Trade Union will ---

(i) Enjoy all the rights of a member,

(ii) Execute all instruments,

(iii) Give all a quittances necessary to be executed or given under the rules.

Section 21-A enumerates the disqualifications of a person for being chosen and for being a
member of the executive or any other office bearer of a Registered Trade Union. These
disqualifications are as follows ---

(i) If he has not attained the age of 18 years,

(ii) If he has been convicted by a Court in India of any offence involving moral turpitude and
sentenced to imprisonment, unless a period of 5 years has elapsed since his release.

Q.. What penalties are provided for different offences committed under the Trade Unions Act,
1926? State the procedure for taking the cognizance of such offences.

Ans. PENALTIES AND PROCEDURE

1. Failure to submit returns.----

(1) If default is made on the part of any registered Trade Union in giving any notice or sending
any statement or other document as required by or under any provision of this Act, every
1*[office- bearer] or other person bound by the rules of the Trade Union to give or send the
same, or, if there is no such 1*[office-bearer] or person every member of the executive of the
Trade Union, shall be punishable, with fine which may extend to five rupees and, in the case of a
continuing default, with an additional fine which may extend to five rupees for each week after
the first during which the default continues: Provided that the aggregate fine shall not exceed
fifty rupees.

(2) Any person who willfully makes, or causes to be made, any false entry in, or any omission
from, the general statement required by section 28, or in or from any copy of rules or of
alterations of rules sent to the Registrar under that section, shall be punishable with fine which
may extend to five hundred rupees. 32. Supplying false information regarding Trade Unions.

2. Supplying false information regarding Trade Unions---- Any person who, with intent to
deceive, gives to any member of a registered Trade Union or to any person intending or applying
to become a member of such Trade Union any document purporting to be a copy of the rules of
the Trade Union or of any alterations to the same which he knows, or has reason to believe, is
not a correct copy of such rules or alterations as are for the time being in force, or any person
who, with the like intent, gives a copy of any rules of an unregistered Trade Union to any person
on the pretence that such rules are the rules of a registered Trade Union, shall be punishable with
fine which may extend to two hundred rupees.

3. Cognizance of offences.-

(1) No Court inferior to that of a Presidency Magistrate or a Magistrate of the first class shall try
any offence under this Act.

(2) No Court shall take cognizance of any offence under this Act, unless complaint thereof has
been made by, or with the previous sanction of, the Registrar or, in the case of an offence under
section 32, by the person to whom the copy was given, within six months of the date on which
the offence is alleged to have been committed.

Procedure for Taking Cognizance of Offences ---- Sub-Section(1) of Section 33 lays down that
no court inferior to that of a Presidency Magistrate or a Magistrate of the first class shall try any
offence under this Act. Sub-Section(2) of Section 33 provides that no court shall take cognizance
of any offence under this Act, unless the complaint thereof has been made by or with the
previous sanction of the Registrar or , in the case of an offence U/S 32, by the person to whom
the copy was given, within 6 months of the date on which the offence is alleged to have been
committed.

The cognizance of an offence cannot be taken by any court unless ----

(i) A complaint has been made by the Registrar,

(ii) With his previous sanction by any person,

(iii) In the case of an offence U/S 32 of the Act, by the person to whom such copy has been
given.

Q.. What is the procedure and effect of amalgamation of Trade Unions?

Ans. Amalgamation of Trade Unions - Any two or more registered Trade Unions may become
amalgamated together as one Trade Union with or without dissolution or division of the funds of
such Trade Unions or either or any of them, provided that the votes of at least one-halt of the
members of each or every such trade Union entitled to vote are recorded, and that at least sixty
per cent. of the votes recorded are in favour of the proposal.

Notice of change of name or amalgamation –

1) Notice in writing of every change of name of every amalgamation, signed, in the case of a
change of name, by the Secretary and by seven members of the Trade Union changing its name,
and, in the case of an amalgamation, by the Secretary and by seven members of each and every
Trade Union which 12 is a party thereto, shall be sent to the Registrar, and where the head office
of the amalgamated Trade Union is situated in a different State, to the Registrar of such State.

(2) If the proposed name is identical with that by which any other existing Trade Union has been
registered or, in the opinion of the Registrar, so nearly resembles such name as to be likely to
deceive the public or the members of either Trade Union, the Registrar shall refuse to register the
change of name.

(3) Save as provided in sub-section (2), the Registrar shall, if he is satisfied that the provisions of
this Act in respect of change of name have been complied with, register the change of name in
the register referred to in section 8, and the change of name shall have effect from the date of
such registration.

(4) The Registrar of the State in which the head office of the amalgamated Trade Union is
situated shall, if he is satisfied that the provisions of this Act in respect of amalgamation have
been complied with and that the Trade Union formed thereby is entitled to registration under
section 6, register the Trade Union in the manner provided in section 8, and the amalgamation
shall have effect from the date of such registration.

Effects of amalgamation –

(1) The change in the name of a registered Trade Union shall not a affect any rights or
obligations of the Trade Union or render 63 defective any legal proceeding by or against the
Trade Union, and any legal proceeding which might have been continued or commenced by or
against it by its former name may be continued or commenced by or against it by its new name.
(2) An amalgamation of two or more registered Trade Unions shall not prejudice any right of any
of such Trade Unions or any right of a creditor of any of them.

Q.. Explain the procedure for the dissolution of a registered Trade Union.

Ans. Procedure for the Dissolution of a Registered Trade Union – Section 27 of the Trade
Unions Act, 1926 lays down the provisions for the dissolution of a registered Trade Union.

Sub-Section(1) of Section 27 provides that when a registered Trade Union is dissolved, notice
for the dissolution shall be sent to the Registrar and shall be signed by :

(i) The secretary of the Trade Union,

(ii) Seven members thereof,

(iii) Within 14 days of the Trade Union shall be registered by the Registrar if he is satisfied that
the dissolution has been effected in accordance with the rules of the Trade Union. The
dissolution shall have effect from the date of registration.

Dissolution is possible with the consent of the members or on the order of the Court.

Sub-Section(2) of the Section 27 lays down the provisions that where the dissolution has been
registered and the rule of the Trade Union do not provide for the distribution of funds of the
Trade Union , the Registrar shall divide the funds amongst the members in such manner as may
be prescribed.

Q.. Define the following terms as used under Trade Unions Act, 1926.

(1) Executive - "Executive" means the body, by whatever name called, to which the management
of the affairs of a Trade Union is entrusted.

(2) Office Bearer - “Office-bearer" means in the case of a Trade Union, includes any member of
the executive thereof, but does not include an auditor.

(3) Prescribed - "Prescribed" means prescribed by regulations made under this Act.

(4) Registered Office - "Registered office" means that office of a Trade Union which is
registered under this Act as the head office thereof.
(5) Registered Trade Union - "Registered Trade Union" means a Trade Union registered under
this Act;

(6) Registrar - "Registrar" means-- (i) a Registrar of Trade Unions appointed by the appropriate
Government under section 3, and includes any Additional or Deputy Registrar of Trade Unions;
and (ii) in relation to any Trade Union, the Registrar appointed for the State in which the head or
registered office, as the case may be, of the Trade Union is situated.

(7)Trade Dispute - "Trade Dispute" means any dispute between employers and workmen or
between workmen and workmen, or between employers and employers which is connected with
the employment or non-employment, or the terms of employment or the conditions of labour, of
any person, and "workmen" means all persons employed in trade or industry whether or not in
the employment of the employer with whom the trade dispute arises.

Q.. Is an Industrial Tribunal empowered to grant interim relief ? Explain with reference to case
law, if any.

Ans. The Tribunal has power to grant interim relief as incidental to its power to grant final relief.
But it cannot grant such relief except as in aid of a final relief which it could grant in the case.
Interim relief can be granted by the tribunal even when the question of granting such relief has
not been referred to it specifically. The tribunal shall grant such interim relief only where a prima
facie case has been made out by the party claiming such a relief. The tribunal cannot grant any
relief on the basis of any settlement arrived at between the parties otherwise than in a
conciliation proceeding.

The Steel Mazdoor Sabha, representing the workmen, filed an application for grant of interim
relief on the ground that the proceedings before the Tribunal are not likely to come to an end at
an early date. In fact, the application was filed for the grant of interim relief, based on the
recommendations for payment of interim relief, made by the Central Wage Board for the
Engineering Industries and accepted by the Central Government. The reference itself was made
as early as 1964, but it had not been possible for the Tribunal to make the final award within a
reasonable time. It also looks as if some more time may elapse before the Report of the
Assessors regarding Production Bonus is available to the Tribunal. The passing of the final
Award itself will take some time after the receipt of this Report.
Having regard to the above circumstances Supreme Court considered it necessary that the rate
awarded by that Tribunal can be reduced without prejudice to the right of the parties concerned
to have their full say regarding the fixation of the wage scales, dearness allowance etc., at the
time of the passing of the final award. Having this in view Supreme Court considered it proper
that the Hind Cycles should pay at one-third its rate directed in the order of the Tribunal and that
too only for a period of two years. The reason for restricting the period is that the Tribunal had
granted interim relief with effect from April 1, 1968. The amounts that are now paid will be
suitably adjusted, depending on the final directions that may be given in the award.

Strike is a condition when workers agree to refuse working organized by a group of employees
as a protest of attempting to have concessions from the employer. The common causes of strike
are to get improvements of workplace, money or wages, shorter working days, the unfair policy
or conditions which might happen in company.

Strikes may be specific to a particular workplace, employer, or unit within a workplace, or they
may encompass an entire industry, or every worker within a city or country. Strikes that involve
all workers, or a number of large and important groups of workers, in a particular community or
region are known as general strikes. Under some circumstances, strikes may take place in order
to put pressure on the State or other authorities or may be a response to unsafe conditions in the
workplace.

Most strikes are undertaken by labor unions during collective bargaining. The object of
collective bargaining is to obtain a contract (an agreement between the union and the company)
which may include a no-strike clause which prevents strikes, or penalizes the union and/or the
workers if they walk out while the contract is in force. The strike is typically reserved as a threat
of last resort during negotiations between the company and the union, which may occur just
before, or immediately after, the contract expires.

Type of strike are sick-out strike, slow-down and sit-down strike.

Variations

A strike may consist of workers refusing to attend work or picketing outside the workplace to
prevent or dissuade people from working in their place or conducting business with their
employer. Less frequently workers may occupy the workplace, but refuse either to do their jobs
or to leave. This is known as a sit-down strike. A similar tactic is the work-in, where employees
occupy the workplace but still continue work, often without pay, which to attempts to show they
are still useful, or that worker self-management can be successful.

Another unconventional tactic is work-to-rule (also known as an Italian strike), in which workers
perform their tasks exactly as they are required to but no better. For example, workers might
follow all safety regulations in such a way that it impedes their productivity or they might refuse
to work overtime. Such strikes may in some cases be a form of "partial strike" or "slowdown".

A "sickout", or (especially by uniformed police officers) "blue flu", is a type of strike action in
which the strikers call in sick. This is used in cases where laws prohibit certain employees from
declaring a strike. Police, firefighters, air traffic controllers are among the groups commonly
barred from striking .

Semester-IV-LABOUR LAW-Synopsis

The objects and characteristics of Industrial Disputes Act, 1947.

Objects of Passing the Industrial Dispute Act, 1947-

1. To harmonise the relations between the employer and employees.

2. To restore and maintain industrial peace.

3. Provide effective machinery for settlement of industrial dispute.

4. Compensation to prohibit and restrict strikes and lock outs.

5. To provide retrenchment compensation to retrenched employees.

6. To provide certain rules regarding lay off.

Characteristics of Industrial Dispute Act, 1947-

1. Any industrial dispute may be referred to an industrial tribunal by an agreement of parties to
the dispute or by the State Government if it deems it expedient so to do.

2. An award shall be binding on both the parties to the dispute for the specified period not
exceeding one year. It shall be normally enforced by the Government.

3. Strike and lock-outs are prohibited---

(1) During the pendency of conciliation and adjudication proceedings;

(2) During the pendency of settlements reached in the course of conciliation proceedings;

(3) During the pendency of awards of Industrial Tribunal declared binding by the appropriate
Government.

4. In public interest or emergency the appropriate Government has power to declare the transport
(other than railways), coal, cotton textiles, food stuffs and iron and steel industries to be a public
utility service for the purposes of this Act, for a maximum period of six months.

5. In case of lay off or retrenchment of workmen the employer is required to pay compensation
to them.

6. Provision has also been made for payment of compensation to workmen in case of transfer or
closure of an undertaking.

7. A number of authorities such as, Works Committee, Conciliation Officers, Board of

Conciliation, Courts of Inquiry, Labour Courts, Tribunal and National Tribunal are provided
provided for settlement of industrial disputes.

8. The nature of powers, functions and duties of these authorities differ from each other but each
one of them plays an important role in ensuring industrial disputes and industrial peace.
Question:How industrial disputes will be resolved as per Industrial Disputes Act 1947
Ans:Methods for Settlement of Industrial Disputes

The three methods for settlement of industrial disputes are as follows:

1. Conciliation

2. Arbitration

3. Adjudication.

Failure of the employees and the employers to sort out their differences bilaterally leads to the
emergence of industrial disputes. The Industrial Disputes Act, 1947 provides legalistic
machinery for settlement of such disputes by involving the interference of a third party.

The settlement machinery as provided by the Act consists of the three methods:

1. Conciliation

2. Arbitration

3. Adjudication

These are discussed one by one.

1. Conciliation:

In simple sense, conciliation means reconciliation of differences between persons. Conciliation

refers to the process by which representatives of workers and employers are brought together
before a third party with a view to persuading them to arrive at an agreement by mutual
discussion between them. The alternative name which is used for conciliation is mediation. The
third party may be one individual or a group of people.

In view of its objective to settle disputes as quickly as possible, conciliation is characterised by

the following features:

(i) The conciliator or mediator tries to remove the difference between the parties.
(ii) He/she persuades the parties to think over the matter with a problem-solving approach, i.e.,
with a give and take approach.

(iii) He/she only persuades the disputants to reach a solution and never imposes his/her own
viewpoint.

(iv) The conciliator may change his approach from case to case as he/she finds fit depending on
other factors.

According to the Industrial Disputes Act 1947, the conciliation machinery in India consists of the
following:

1. Conciliation Officer

2. Board of Conciliation

3. Court of Enquiry

A brief description of each of these follows:

Conciliation Officer:

The Industrial Disputes Act, 1947, under its Section 4, provides for the appropriate government
to appoint such number of persons as it thinks fit to be conciliation officers. Here, the appropriate
government means one in whose jurisdiction the disputes fall.

While the Com¬missioner /additional commissioner/deputy commissioner is appointed as

conciliation officer for undertakings employing 20 or more persons, at the State level, officers
from central Labour Commission office are appointed as conciliation officers, in the case of
Central government. The conciliation officer enjoys the powers of a civil court. He is expected to
give judgment within 14 days of the commencement of the conciliation proceedings. The
judgement given by him is binding on the parties to the dispute.

Board of Conciliation:

In case the conciliation officer fails to resolve the dispute between the disputants, under Section
5 of the Industrial Disputes Act, 1947, the appropriate government can appoint a Board of
Conciliation. Thus, the Board of Conciliation is not a permanent institution like conciliation
officer. It is an adhoc body consisting of a chairman and two or four other members nominated in
equal numbers by the parties to the dispute.

The Board enjoys the powers of civil court. The Board admits disputes only referred to it by the
government. It follows the same conciliation proceedings as is followed by the conciliation
officer. The Board is expected to give its judgment within two months of the date on which the
dispute was referred to it.

In India, appointment of the Board of Conciliation is rare for the settlement of disputes. In
practice, settling disputes through a conciliation officer is more common and flexible.

2. Arbitration:

Arbitration is a process in which the conflicting parties agree to refer their dispute to a neutral
third party known as ‘Arbitrator’. Arbitration differs from conciliation in the sense that in
arbitration the arbitrator gives his judgment on a dispute while in conciliation, the conciliator
disputing parties to reach at a decision.

The arbitrator does not enjoy any judicial powers. The arbitrator listens to the view points of the
conflicting parties and then gives his decision which is binding on all the parties. The judgment
on the dispute is sent to the government. The government publishes the judgment within 30 days
of its submission and the same becomes enforceable after 30 days of its publication.

In India, there are two types of arbitration:

Voluntary and Compulsory.

Voluntary Arbitration:

In voluntary arbitration both the conflicting parties appoint a neutral third party as arbitrator. The
arbitrator acts only when the dispute is referred to him/her. With a view to promote voluntary
arbitration, the Government of India has constituted a tripartite National Arbitration Promotion
Board in July 1987, consisting of representatives of employees (trade employers and the
Government. However, the voluntary arbitration could not be successful because the judgments
given by it are not binding on the disputants. Yes, moral binding is exception to it.
Compulsory Arbitration:

In compulsory arbitration, the government can force the disputing parties to go for compulsory
arbitration. In other form, both the disputing parties can request the government to refer their
dispute for arbitration. The judgment given by the arbitrator is binding on the parties of dispute.

3. Adjudication:

The ultimate legal remedy for the settlement of an unresolved dispute is its reference to adjudica-
tion by the government. The government can refer the dispute to adjudication with or without the
consent of the disputing parties. When the dispute is referred to adjudication with the consent of
the disputing parties, it is called ‘voluntary adjudication.’ When the government herself refers
the dis¬pute to adjudication without consulting the concerned parties, it is known as ‘compulsory
adjudication.

The Industrial Disputes Act, 1947 provides three-tier machinery for the adjudication of industrial
disputes:

1. Labour Court

2. Industrial Tribunal

3. National Tribunal

A brief description on these follows:

Labour Court:

Under Section 7 of the Industrial Disputes Act, 1947, the appropriate Government by notifying
in the official Gazette, may constitute Labour Court for adjudication of the industrial disputes
The labour court consists of one independent person who is the presiding officer or has been a
judge of a High Court, or has been a district judge or additional district judge for not less than 3
years, or has been a presiding officer of a labour court for not less than 5 years. The labour court
deals with the matters specified in the second schedule of the Industrial Disputes Act, 1947.

These relate to:

1. The properiety or legality of an employer to pass an order under the standing orders.

2. The application and interpretation of standing orders.

3. Discharge or dismissal of workers including reinstatement or grant of relief to workmen

wrongfully dismissed.

4. Withdrawal of any statutory concession or privilege.

5. Illegality or otherwise of a strike or lockout.

6. All matters other than those reserved for industrial tribunals.

Industrial Tribunal:

Under Section 7A of the Act, the appropriate Government may constitute one or more Industrial
tribunals for the adjudication of industrial disputes. Compared to labour court, industrial
tribunals have a wider jurisdiction. An industrial tribunal is also constituted for a limited period
for a particular dispute on an adhoc basis.

The matters that come within the jurisdiction of an industrial tribunal include the following:

1. Wages, including the period and mode of payment.

2. Compensatory and other allowances.

3. Hours of work and rest periods.

4. Leave with wages and holidays.

5. Bonus, profit sharing, provident fund, and gratuity.

6. Classification by grades.

7. Rules of discipline.

8. Rationalisation.

9. Retrenchment of employees and closure of an establishment or undertaking.

10. Any other matter that can be prescribed.

National Tribunal:

This is the third one man adjudicatory body appointed by the Central Govern¬ment by
notification in the Official Gazette for the adjudication of industrial disputes of national
importance. The central Government may, if it thinks fit, appoint two persons as assessors to
advise the National Tribunal. When a national tribunal has been referred to, no labour court or
industrial tribunal shall have any jurisdiction to adjudicate upon such matter.

The main highlights revealed are gleaned as follows:

1. That referring of disputes conciliation machinery is a common practice is well indicated by a

large number of disputes taken for conciliation.

2. On average, around one-third of the disputes referred for conciliation failed. Of these, about
60 to 90 per cent of cases were referred to adjudication. Only one per cent of the cases were
referred for arbitration. These underline the ineffectiveness of conciliation machinery in settling
industrial disputes. Thus, the existing machinery for the settlement of industrial disputes, as
provided under the Industrial Disputes Act, 1947, needs to be strengthened.

3. Adjudication has proved the most popular way of settling industrial disputes in India. This is
because adjudication is the last recourse for disputing parties to settle their disputes.

Here it is noteworthy that the data given in the Table 25.7 is incomplete in the sense that in no
year did all the States and Union Territories send all the information. For example in some years
as many as 12 States and Union Territories did not furnish information to the Union Ministry of
labour, as can be verified from the latter’s annual reports for the years decrease in the number of
disputes taken for conciliation from 47,788 in 19801 in 981 is explained by the same reason, i.e.
non-furnishment of information on dispute conciliation by all States and Union Territories.

Finally, following are a few suggestions to make the settlement machinery more effective:

1. The trained and experienced officers who are well acquainted with the problems of industrial
workers should be entrusted with the responsibility of dealing with conciliation machinery
Political and administrative interference should not be allowed to cloud the functioning of
conciliation machinery.

2. One way to strengthen the adjudication machinery is to substitute it by setting up Industrial

Relations Commissions (IRCs), both at the Central and the State level, on the lines suggested by
the National Commission on Labour. The IRC should also be empowered to oversee the working
of the conciliation machinery.

3. In order to make arbitration fair, the arbitrator chosen for settling disputes be mutually
acceptable to both the union and the management. This can be facilitated if the government
prepares the panel of experienced arbitrators at the national and the state levels so that arbitrators
are chosen from the panel, as and when required.

4. The government should refrain from actively intervening in the matters of industrial disputes
unless it is must for her to intervene in the disputes.

Source:http://www.yourarticlelibrary.com/…/3-methods-for-se…/35436/

The objects and characteristics of Industrial Disputes Act, 1947.

Objects of Passing the Industrial Dispute Act, 1947-

1. To harmonise the relations between the employer and employees.

2. To restore and maintain industrial peace.

3. Provide effective machinery for settlement of industrial dispute.

4. Compensation to prohibit and restrict strikes and lock outs.

5. To provide retrenchment compensation to retrenched employees.

6. To provide certain rules regarding lay off.

Characteristics of Industrial Dispute Act, 1947-

1. Any industrial dispute may be referred to an industrial tribunal by an agreement of parties to

the dispute or by the State Government if it deems it expedient so to do.
2. An award shall be binding on both the parties to the dispute for the specified period not
exceeding one year. It shall be normally enforced by the Government.

3. Strike and lock-outs are prohibited---

(1) During the pendency of conciliation and adjudication proceedings;

(2) During the pendency of settlements reached in the course of conciliation proceedings;

(3) During the pendency of awards of Industrial Tribunal declared binding by the appropriate
Government.

4. In public interest or emergency the appropriate Government has power to declare the transport
(other than railways), coal, cotton textiles, food stuffs and iron and steel industries to be a public
utility service for the purposes of this Act, for a maximum period of six months.

5. In case of lay off or retrenchment of workmen the employer is required to pay compensation
to them.

6. Provision has also been made for payment of compensation to workmen in case of transfer or
closure of an undertaking.

7. A number of authorities such as, Works Committee, Conciliation Officers, Board of

Conciliation, Courts of Inquiry, Labour Courts, Tribunal and National Tribunal are provided
provided for settlement of industrial disputes.

8. The nature of powers, functions and duties of these authorities differ from each other but each
one of them plays an important role in ensuring industrial disputes and industrial peace.

Synopsis-Labour Law

Q. Explain the following terms under the Industries Disputes Act, 1947.

(i) Average pay ---

Ans. According to Section 2 (a), ‘Average Pay’ means the average of the wages payable to
workman-
(1) In the case of a monthly paid workman, in the three complete calendar months,

(2) In the case of a weekly paid workman, in the four complete weeks,

(3) In the case of daily paid workman, in the twelve full working days.

(ii) Conciliation Proceeding ---

Ans. According to Section 2 (e), ‘ Conciliation Proceeding’ means any proceeding held by a
conciliation officer or Board under this Act.

(iii) Employer ---

Ans. The head of the department or the chief executive officer of an authority.

(iv) Independent Person ---

Ans. A person is deemed to be independent with reference to his appointment, when he is

appointed the presiding officer, of a Board, Court or Tribunal or as a member.

(v) Public Utility Service ---

Ans. According to Section 2 (n), ‘Public Utility Service’ means ---

(1) Any railway service, or any transport service, for the carriage of passengers or goods by air,

(2) Any service in or in connection with the working of any major port or dock,

(3) Any section of industrial establishment on working of which the safety of the establishment
or the workmen employed therein depends,

(4) Any postal, telegraph or telephone service,

(5) An industry which supplies power, light or water to the public,

(6) Any system of public conservancy or sanitation.

(vi) Industrial Establishment or undertaking ---

Ans. This term means an establishment or undertaking in which any industry is carried on. But if
several activities are on union establishment, any one or some of such activities are , an industry,
then---

(1) If any unit of such establishment or undertaking carrying on any activity, being an industry is
severable from the other unit , such, unit shall be deemed to be separate establishment or
undertaking.

(2) If the predominant activity carried on in such establishment or any unit thereof is an industry
and other activity is not severable from and is, for the purpose of carrying on of such
predominant activity, the entire establishment or undertaking, as the case may be unit there of
shall be deemed to be an industrial establishment or undertaking.

(vii) Working Committee ---

Ans. Section 3 provides that in industrial establishment in which 100 or more workmen are
employed the appropriate government may by general or special order, require the employer to
constitute a works committee in the prescribed manner. Consisting of representatives of
employers and workmen in equal number. There cannot be more than 20 members in all. The
members from amongst the workmen shall be elected by the prescribed mode of election in
consultation with Trade Union if any registered under the Trade Unions Act, 1926.

(viii) Conciliation Officer ---

Ans. The appropriate Government may by Gazetted notification, appoint conciliation officers in
such number and for such area, as it thinks fit either permanently or temporarily. Their main aim
is to mediate in the settlement of industrial disputes and to promote their settlement. Conciliation
officer may be appointed for any specified industries in a specified area. The jurisdiction, powers
and functions of the conciliation officer shall be notified in the official gazette.

(ix) Court of Inquiry ---

Ans. Section 6 contains the provision for Court of inquiry. The appropriate Government may, as
occasion arises by notification in official gazette, constitute a Court of inquiry for inquiring into
any matter appearing to be connected with or relevant to any industrial dispute.
(x) Collective Bargaining ---

Ans. Collective bargaining is a process, wherein the Trade Unions and the employers, put
forward their reasons and come to some certain settlement on the points of issues of disputes or
differences. There is full trial of strength in the process of the collective bargaining. This process
has been in vogue for a long time. For the better progress of the industries, the disputes of
Collective bargaining need settlement at the top priority and amity and good understanding must
be promoted and established between the two disputing parties, the employers and the workmen.

Appropriate government
On a preliminary note, it should be understood that the above two queries are not independent,
rather interrelated and interdependent to each other. The answer to both of the above queries lies
in ascertaining the true and correct interpretation of the expression ‘appropriate government’ as
defined under Section 2(1)(a) of the CLRA Act.

To begin with, Section 2(1)(a) of the CLRA Act defined the expression ‘appropriate
government’ as,

“in relation to an establishment in respect of which the appropriate government under the
Industrial Disputes Act, 1947, is the central government, the central government” and “in
relation to any other establishment, the government of the state in which that other establishment
is situated.”

The nexus created by this Section to the provisions of the Industrial Disputes Act makes it
pertinent to review the definition of appropriate government under the Industrial Disputes Act.
Section 2(a) of the Industrial Dispute Act provides that ‘appropriate government’ means:
In relation to any industrial dispute concerning any industry carried on by or under the authority
of the central government or by a railway company or concerning any such controlled industry as
may be specified by the central government in this behalf or the enumerated industries (which
forms the part of the definition but not relevant for the present discussion); and

In relation to any other industrial dispute, the state government.

A conjoint reading of the definitions of ‘appropriate government’ under the CLRA Act and the
Industrial Disputes Act suggests that the central government shall be the appropriate authority
under the CLRA Act if the industrial dispute pertains to:

(a) Any industry carried on the by the central government;

(b) Any industry carried on under the authority of the central government;

(c) Any industry carried on by a railway company;

(d) Any controlled industry as may be specified by the central government;

(e) Certain industries as enumerated specifically in the said Section of the ID Act. In relation to
any other industrial dispute, the appropriate government shall be the government of the state in
which such industry is situated.

The alternatives (a), (c), (d) and (e) indicate cases which can be clearly determined as the
industries carried on ipso facto by the central government itself under its direct authority. The
problem lies with alternative (b) which leads to the determination of the true meaning and import
of the phrase ‘under the authority of the central government’.

Before proceeding any further, it is pertinent to construe the words ‘under the authority of the
central government’ with the rule of liberal interpretation. In particular, the keyword which
requires prima facie determination is the word ‘authority’. According to the Concise Oxford
Dictionary, the word ‘authority’ means delegated power[1] and Black’s Law Dictionary defined
the word as permission, right to exercise powers, the power delegated by a principal to his agent
and the lawful delegation of power by one person to another.[2] From the above discussion, it
follows that the phrase ‘any industry carried on under the authority of the central government’
implies an industry which is carried on by virtue of, pursuant to, conferment of, grant of,
delegation of power or permission by the central government to a central government company
or other government company/undertaking. In other words, if there is a lack of conferment of
power or permissions by the central government to a government company/undertaking, it would
disable such a company/undertaking to carry on the industry in question.

Given this preliminary understanding, we shall now examine as to how the concept of
appropriate government and in particular the phrase ‘under the authority of the central
government’ has been explained by the judiciary in the leading decisions. This exercise will
ultimately lead us to analyze whether the central government is the appropriate government in
the present instance, failing which the state government shall be deemed to be the appropriate
government.

JUDICIAL INTERPRETATION OF THE CONCEPT OF ‘APPROPRIATE GOVERNMENT’

It is customary to begin the discussion with the decision of the Supreme Court in Heavy
Engineering Mazdoor Union v. state of Bihar and Others[3] (“Heavy Engineering case“). In the
said case the competency of the Bihar Government to refer the industrial Section 10 of the
Industrial Dispute Acts to the industrial tribunal was questioned by the Mazdoor Union. Since it
was not contested by the parties to the dispute that the corporation is not an industry carried on
by the central government, the limited issue that came for adjudication before the Supreme Court
was whether the corporation could be regarded as the industry carried on under the authority of
the central government. The Divisional Bench of the Supreme Court held that there being
nothing contrary in Section 2(a) of the industrial dispute act, the said section has to be interpreted
in accordance with its ordinary meaning. Applying the well established precedents of separated
juristic identity of the company[4], the Court held that mere fact that the entire share holding of
the corporation was held by the central government in the name of the President and certain
officers and extensive powers were conferred on the Central government to administer the
company (includingg the power to appoint director, power to give administrative directions,
power to determine wages and salary) is not conclusive evidence of the company being carried
on ‘under the authority of the central government.[5]’ These powers arederived form the
companies’ memorandum of association and the articles of association and not by the reason of
the company being the agent of the Central government. Going further, the Court opined that in
the absence of a statutory provision, a commercial corporation action on its own behalf, even
though it is controlled wholly or partially by the government department, will be presumed not to
be a servant or agent of the state. The Court meticulously carved out the distinction that power of
the ministry to call for information, give binding directions and to supervise the conduct of the
business does not render the status of agent on the corporation; rather such inference can be
drawn where the corporation is performing substantial governmental and not commercial
functions.[6] On the basis of the above mentioned reasoning, the Supreme Court ultimately
concluded that Heavy Engineering Corporation was not an industry carried on under the
authority of the central government and thus, this state government was the appropriate
government in the said case.

The decision of the Supreme Court in Heavy Engineering case form the reasoning of the
subsequent decision of the Supreme Court in Hindustan Aeronautics Limited v. the Workmen
and Others[7](‘HAL Case’) in the said case the government of West Bengal referred certain
issues under Section 10(1) of the Industrial Disputes Act to the industrial tribunal for
adjudication. In the Supreme Court, the competency of the government of West Bengal to make
the said reference was challenged. It was contended that the Barrackpore branch of the company
was under the direct control of the Bangalore division of the company and since it was a
government company (with the central government being the sole share holder and being
invested with the power of appointment and removal of directors and to decide important
matters), the reference ought to have been made either by the central government or the
government of Karnataka. Upholding the reasoning as laid down in the Heavy Engineering Case,
the court held that for the purposes of the Industrial Disputes act, the Barrackpore branch was an
industry carried on by the company as a separate unit. Factually, the Court analyzed that the
workers were receiving their pay packagesat Barackpore and were under the control of the
officers of the company stationed there.If there was any disturbance of industrial peace at
Barrackpore were a considerable number of workmen were working, the appropriate government
condemned in the maintenance of industrial peace was the West Bengal government. The Court
opened that the cause of action of the industrial dispute in question arose in Barrackpore and the
referral by the West Bengal government was good in law.

The Court rejecting the distinction made by the appellants on facts with the Heavy Engineering
Case that the said case dealt with a public sector undertaking operating an industry in
competition with the private sector undertakings while in the instant case, the government
company was entitled to carry on the business to the exception of the private undertakings. The
Court held that such distinction is of no consequence and does not affect the ratio of the Heavy
Engineering Case. The Court opined that from time to time, the definition of the ‘appropriate
government’ has been amended to incorporate certain statutory corporations within its ambit;
however, no public company even if the shares were exclusively held by the central government
was roped in the said definition. Thus strengthening the reasoning of Heavy Engineering that
mere fact that the shareholding is being held by the government is not sufficient to make such
company an agent of the government.
In Rashtriya Mill Mazdoor Sangh, Nagpur v. Model Mills[8] (“Rashtriya Mill Case”), a bench of
three judges, while interpreting Section 32(iv) of the Payment of Bonus Act, once again
considered the meaning and scope of the expression presently in discussion. In precise terms, it
was held by the Supreme Court that the industrial undertaking retains its identity, personality and
status remains unchanged through its management. In particular, pursuant to the exercise of the
power of the central government to issue a notified order appointing an authorized controller, the
said company does not lose its identity and cannot be held as an industry under the authority of
the central government. The Court opined that:

“Power to regulate management or control the management is entirely distinguishable from the
power to run the industry under the authority of the department of the Central Government. The
substitution of the management ordered under Sec. 18-A does not tantamount to the industrial
undertaking being taken over by the department of the Central Government. Nor could it be said
to be run under the authority of the department of the Central Government…Neither its identity
nor its ownership is affected in any manner. this change in personnel of management of the
industrial undertaking for a specified period can never make the industrial undertaking one
engaged in an industry carried on under the authority of the Central Government.”

“The fact that the authorized controller is appointed by the Central Government and that he has
to work subject to the directions of the Central Government does not render the industrial
undertaking an agent of the Central Government and therefore, could not be said to be an
establishment engaged in an industry carried on by or under the authority of the Central
Government.[9]” [Emphasis supplied]
The above judgment was followed by a bench of two judges in Food Corporation of India
Workers’ Union v. Food Corporation of India [10](“FCI Case”) where then issue for
consideration before the Supreme Court was whether regional offices of the Food Corporation of
India and the warehouses were an industry carried on by or under the authority of the central
government. Following the above three cases, the Court took the view that the same principle
would govern the interpretation of the expression ‘appropriate government’ in the CLRA Act
and held that the state government was the appropriate government pertaining to the regional
offices and warehouses.

The width and ambit of the definition of ‘appropriate government’ under the CLRA was once
again under the consideration of the Supreme Court in the case of Air India Statutory
Corporation v. United Labour Union[11] (“Air India Case”). The Court was concerned with the
question as to whether the central government was the competent appropriate government for the
purposes of the notification issued by the central government under the provisions of CLRA Act
to abolish the contract labour system in the establishment of Air India Statutory Corporation.
Taking a sharp departure from precedents (as discussed above) and analyzing the principles of
public law interpretations, the Court reversed the decision as laid down in the Heavy Engineering
Case on the reasoning that the said case narrowly interpreted the words ‘appropriate government’
on the common law principles which no longer bear any relevance when it is tested on the anvil
of Article 14 of the Constitution of India. The Court took an unconventional approach to
interpret the phrase ‘under the authority of the central government’ at the touchstone of the tests
as laid down in Ajay Hasia v. Khalid Mujib Sehravardi and Others[12] to determine whether the
entity is an instrumentality or agency of the state. Based on the said reasoning and taking a
contradictory view from the earlier cases, the Court held that the appropriate government is the
central government from the inception of the CLRA Act.

Taking note of the apparent conflict of opinion between different benches of the Supreme Court
in the HAL Case, FCI Case and the Air India Case, the divisional bench of the Supreme Court in
its decision in F.C.I Bombay v. Transport and Dock Workers Union and Others[13] referred the
questions to a larger bench of the Supreme Court. Thus, the question concerning interpretation of
the expression ‘appropriate government’ under Section 2(1)(a) of the CLRA Act and under
Section 2(a) of the Industrial Disputes Act came into consideration before the Constitutional
Bench of the Supreme Court in Steel Authority of India Limited v. National Union Waterfront
Workers[14] (“SAIL Case”).

Rejecting the instrumentality test for determination of appropriate government under CLRA Act
as laid down by the Air India Case, the Constitutional Bench opined in the SAIL Case that.,

“while discharging public functions and duties, the government companies/corporations/societies

which are instrumentality or agencies of the government must be subjected to the same
limitations in the field of public law (constitutional or administrative law) as the government for
all purposes so as to bind such government for all their acts, liabilities and obligations under
various central and/or state acts or under private laws.[15]”

The Court held that the fact of being instrumentality of a center/state government or being a state
within the meaning of Article 12 of the Constitution cannot be determinative of the question as to
whether an industry carried on by a company/corporation or an instrumentality of the
government, is by or under the authority of the central government for the purpose of or within
the meaning of the definition of ‘appropriate government’ in the CLRA Act.

The Court laid down that the test to determine whether the industry carried on by the
establishment in question is under the authority of the central government is that, whether an
undertaking instrumentality of the government is carrying on an industry under the authority of
the central government’ and not whether the undertaking is instrumentality or agency of the
government for the purposes of Article 12 of the Constitution. Such an authority may be
conferred either by a statute or by virtue of relationship of principal and agent or delegation of
power. Where the authority, to carry on any industry for or on behalf of the central government
is conferred on the government, company/undertaking by the statute under which it is created, no
further question arises. But, if it is not so, the question that arises is whether there is any
conferment of authority on the government company/undertaking by the central government to
carry on the industry in question. The Court opined that this is a question of fact and has to be
ascertained on the facts and circumstances of each case.

All this stage, the Court made reference to its earlier decisions by its other benches. The Supreme
Court upheld the law as laid down in the Heavy Engineering Case, with a little divergence. As
stated above, in the Heavy Engineering Case, the Court had opined that the corporation was an
agent of the government might be drawn where the corporation was performing substantial
governmental and not commercial functions. The Supreme Court in the SAIL Case disagreed
with the distinction thus made and barring this limited disagreement, the Court upheld the rest of
the decision. In paragraph 42 of the SAIL Case, the Court examined the HAL Case and held that
the factors weighed with the Court could not be said to be irrelevant. Further, the Court reiterated
the position as laid down in the Rashtriya Mill Case and FCI Case and concluded that there is no
illegality either in the approach or in the conclusion arrived at by the court in these cases.

TESTS FOR DETERMINATION OF THE ‘APPROPRIATE GOVERNMENT’-

CONCLUSION

The tests for determining as to when a corporation can be said to be ‘an industry carried on by or
under the authority of the central government’ may now be called out from the judgments as
discussed above. From the point of present discussion, it should be noted that these tests are not
conclusive or clinching, but they are merely indicative indicia which have to be used with care
and caution looking at the peculiarity of the facts, because while stressing the necessity of a wide
meaning to be placed on the expression, it must be realized that it should not be stretched so far
as to bring in every corporation which has any nexus with the central government within the
sweep of the expression. In essence, a wide enlargement of the meaning must be tempered by a
wise limitation.

The most crucial test that has been laid down in the SAIL Case is whether the corporation is
acting as an agent of the central government or has any authority to bind the central government.
In particular, it needs to be ascertained that whether the corporation has been referred authority
either by a statute, or by virtue of a relationship of principle and agent, or delegation of power. In
addition, the factors on which the Supreme Court decided the HAL Case, the Rashtriya Mill
Case and the FCI Case are also important in making such determination.

Interestingly, the judgments discussed above fall way short to enumerate in-depth and with
precision, the factors which shall be considered while determining whether, the corporation is an
industry carried on by the central government or not, however, from the conjoint reading of the
above discussed six judgments, a list of factors which are not relevant to make such
determination can be laid down. These irrelevant factors, inter alia, are as follows:

a) The entire share capital of the corporation being held by the central government or under
the name of the President or officers of the central government;

b) The memorandum and articles of association of the corporation confer extensive powers on
the central government to give binding directions as regards the functioning of the corporation;
c) The wages and salaries of the employees of the corporations are determined in accordance
with the directions issued by the central government;

d) The power of the President of India or the central government to appoint or remove the
directors, chairman and the managing director of the corporation;

e) The corporation is in substance performing government and non-commercial functions;

f) All the matters of importance are reserved for the decision of the President of India and
ultimately executed in accordance with his directions; or

g) The corporation is instrumentality or agency of the government for the purposes of Article
12 of the Constitution.