Industrial Disputes Act

Legal Framework of the Industrial Disputes Act in India

• The Industrial Disputes Act, 1947: It is the principal legislation in India governing labour relations and the resolution of industrial disputes. The Act aims to ensure harmonious relations between employers and employees by providing mechanisms for the investigation and settlement of industrial disputes. 
• Definitions and Scope: The Act defines key terms, including 'industrial dispute', 'workman', 'employer', 'industry', 'public utility services', 'retrenchment', and others. It applies to all industrial establishments employing a certain number of workers. The Act defines an industrial dispute as any conflict or difference between employers and employees, or between employees and employees, or between employers and employers, which is connected with the employment or non-employment, terms of employment, or conditions of work.
• Key Features of the Act Include
  • Authorities: Chapter II of the Act establishes various authorities for the investigation and settlement of disputes, including Works Committees under Section 3, Conciliation Officers under Section 4, Boards of Conciliation under Section 5, Courts of Inquiry under Section 6, Labour Courts under Section 7, Industrial Tribunals under Section 7A, and National Tribunals under Section 7B. The Act also provides for the appointment of Conciliation Officers by the appropriate authorities to mediate and resolve disputes. The role of Conciliation Officers is to facilitate negotiations between the parties and attempt to settle. If conciliation efforts fail, the authorities can constitute a Board of Conciliation to investigate and resolve the dispute. The Board's decision is binding on the parties.
  • Procedure: Section 11 of the Act outlines procedures and powers of the concerned authorities for the conciliation, arbitration, and adjudication of industrial disputes. For more complex disputes, the Act establishes Labor Courts and Industrial Tribunals. These bodies have the authority to adjudicate and provide binding decisions on disputes referred to them. The Act allows for the submission of disputes to voluntary arbitration, as outlined in Section 10A, and the resultant settlements and awards are legally binding on the parties involved.
  • Works Committee: Section 3 of the Act empowers employers to establish Works Committees in industrial establishments with 100 or more employees. These committees serve as a forum for addressing day-to-day workplace grievances and disputes. However, the Act prohibits unfair labour practices by both employers and trade unions. It ensures that industrial relations are maintained in a fair and just manner.
  • Strikes and Lockouts: Chapter V of the Act regulates the conditions under which strikes and lockouts can be declared, including notice requirements and prohibitions during the pendency of dispute resolution proceedings. The Act governs strikes and lockouts by imposing certain restrictions and obligations on both employers and employees. It seeks to strike a balance between the rights of workers to protest and the interests of employers to maintain production. Section 22, 23, 24, and 25 of the Act outline the provisions and procedures. 
  • Lay-offs, Retrenchment, and Closure: Chapter VA and VB of the Act specify the conditions and procedures for lay-offs, retrenchment, and the closure of industrial establishments, including the compensation to be provided to workers. Employers must follow due process and provide compensation to employees who are retrenched. Section 25A to 25S are the relevant provisions. 

Significant Amendments

• Industrial Disputes (Amendment) Act, 1953 & 1976: In the amendment of 1953, In the amendment of 1953, Chapter VA and its provisions, i.e., Section 25A, 25B, 25C, 25D, 25E, 25F, 25G, 25H, 25I, 25J, were introduced, and in the Amendment of 1976, Chapter VB and its provisions, i.e., Section 25K, 25L, 25M, 25N, 25O, 25P, 25Q, 25R, 25S, were introduced in this amendment, both amendments were regarding special provisions related to lay-offs, retrenchment, and closure in certain establishments. Although some minor amendments were also made in 1956, 1959, 1964, 1970, and 1971, focusing on improving and strengthening the provisions for the well-being of labour. 
• Industrial Disputes (Amendment) Act, 1982: Definitions of 'wages', industrial establishment', and 'trade union' were added under Section 2 of the Act. A new Chapter VC, including Section 25T and 25U, was introduced regarding the prohibition of unfair labour practices and penalties for committing such practices, with a focus on preventing the misuse of labour laws. Section 36B was introduced, which empowers the government to exempt establishments and undertakings in some instances. Schedule Fifth regarding unfair labour practice was also added. 
• Industrial Disputes (Amendment) Act, 2010: Section 7(3)(f) regarding the qualification of presiding officers of labour courts and Section 7A(3)(b) regarding the qualification of the presiding officer of the tribunal were defined. Introduced the provision, i.e., Section 11(9), for the execution of awards passed by labour courts, tribunals, and national tribunals should be implemented accordingly, as per Order XXI of the CPC. 
• Industrial Relations Code, 2020: This recent legislation consolidates and simplifies labour laws, including the Industrial Disputes Act, 1947, along with the Trade Unions Act, 1926, and the Industrial Employment (Standing Orders) Act, 1946. It aims to streamline dispute resolution processes and enhance labour flexibility while ensuring worker protection.

Penalties for Violating the Industrial Disputes Act

• Fines and Imprisonment: Employers and workers may face fines and imprisonment for engaging in illegal strikes or lockouts, failing to comply with settlement agreements or tribunal awards, and violating other provisions of the Act. The Act outlines the penalties for illegal strikes and lock-outs as outlined under section 26, instigation under Section 27, providing financial aid to illegal strikes and lockouts under Section 28, breach of award or settlements under Section 29, closure without notice under Section 30A, penalty for closure under Section 25R, committing unfair labour practices under Section 25U, lay-off and retrenchment without previous permission under section 25Q. The fines and imprisonment may range up to a maximum of ₹5000 and 6 months.  
• Compensation and Reinstatement: Employers may be required to compensate or reinstate workers in cases of wrongful termination, retrenchment, or layoff. Section 25C states the right of workmen laid off to receive compensation, Section 25FF states the compensation to be paid to workmen in the event of the transfer of an undertaking, Section 25FFF states the compensation to be paid to workmen in the event of the closure of an undertaking, and provisions are also provided for when workmen will not be entitled to compensation.  
• Court Orders: Labour Courts and Industrial Tribunals can issue orders for the enforcement of rights and obligations under the Act, including orders for reinstatement, compensation, and cessation of unfair labour practices. 

How to Report an Industrial Disputes Act Violation?

• Concerned Authorities Under the Act
  • Works Committee (Section 3)
  • Conciliation Officers (Section 4)
  • Board of Conciliation (Section 5)
  • Courts of Inquiry (Section 6)
  • Labour Courts (Section 7)
  • Industrial Tribunals (Section 7A)
  • National Tribunals (Section 7B)
  • Grievance Redressal Machinery (Section 9C)
• Grievance Redressal Machinery: Every industrial establishment with 20 or more employees must establish a Grievance Redressal Machinery as outlined under Section 9C. Any individual dispute can be referred to this machinery within one year from the date it arises, and the committee must resolve the dispute within 30 days. If the dispute cannot be resolved, it may be referred to the employer for further action. 
• Conciliation Officers: Appointed by the relevant government under Section 4 of the Act, Conciliation Officers serve as mediators and promoters for the settlement of industrial disputes arising between employees and employers in a specified area or for selected industries. According to Section 4(8) of the Industrial Relations Code, 2020, if the Grievance Redressal Committee fails to resolve the dispute within the stipulated time, or the employee is aggrieved with its decision, in that case, the Trade Union may approach the Conciliation Officer within 60 days from the date of such decision or expiration of such period to resolve the dispute. 
• Industrial Tribunals: Application can be filed with Industrial Tribunals for the adjudication of disputes related to wages, compensatory and other allowances, leave with wages and holidays, bonus, profit sharing, provident fund, gratuity, rules of discipline, or any other matter eligible for adjudication by such tribunals as outlined in the Third Schedule of the Industrial Disputes Act, 1947. Section 4(10) and 53(6) of the Industrial Relations Code, 2020, are the relevant provisions stating that the issues that the Conciliation Officer cannot settle within 45 days, parties may be eligible for an application to be filed with the tribunal, or within 90 days from the date of the receiving of the report produced by the Conciliation Officer.
• National Tribunal: If the industrial establishment expands in more than one state and the dispute involves a question of national importance, the matter can be directly referred to the National Tribunal for adjudication. Section 7B of the Industrial Disputes Act, 1947, outlines the provision for the establishment of the National Tribunal, and Section 10 outlines the process for referring disputes to boards, courts, or tribunals. 
• Labour Court: Application can be filed in the labour court in the matters as outined in the Second Schedule and for the offenses under the Central Acts associated with such disputes which comes under the jurisdiction of labour court such as The Trade Union Act, 1926, The Facories Act, 1948, The Employyes State Insurance Act, 1948, The Maternity Benfits Act, 1961, the Payment of Bonus Act, 1965, The Payment of Gratuity Act, 1972, The Equal Remenuration Act, 1976, The Inter-sate Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979, and others.    
• Other Mechanisms: Workers can approach the Work Committees, Trade Unions, Labour Department, or file online complaints through the designated portals. The Act also provides provisions apart from conciliation, arbitration, and mediation for resolving disputes, which one can refer to. Section 10A provides for the voluntary reference of disputes to arbitration. 

How Can Seasoned Advocates Help You?

• Legal Advice: Provide expert legal counsel on labour rights, employer obligations, and the appropriate course of action for resolving industrial disputes.
• Representation: Represent clients before conciliation officers, Labour Courts, Industrial Tribunals, and other adjudicating authorities.
• Documentation: Assist in the preparation and filing of necessary documents, including complaints, affidavits, and evidence to support claims.
• Negotiation and Mediation: Facilitate negotiation and mediation between employers and workers to resolve disputes amicably and avoid litigation.
• Compliance Audits: Conducting compliance audits to identify and rectify potential violations of labour laws and regulations.
• Training and Awareness: Providing training and awareness programs on labour laws, dispute resolution mechanisms, and best practices for maintaining harmonious industrial relations.

Conclusion

To ensure a healthy relationship with employees and labour and to ensure the smooth functioning of your industrial activities, you must comply with the relevant laws and undertake industrial activities in accordance with them. Experts ensure that both employers and employees understand their rights and obligations under the Industrial Disputes Act, promoting fair and effective resolution of industrial disputes. To know more, contact us.