Industrial Disputes Act 1947: Key Provisions and Concepts
Award
Section 2(b) of the Act defines an award as an interim or final determination of an industrial dispute by a labor court, industrial tribunal, or national tribunal, including an arbitration award. Awards must be in writing, signed by the presiding officer, and published in the Official Gazette. While the legality of an award can be challenged in the High Court, it becomes enforceable 30 days after publication.
Public Utility Service
Section 2(n) defines a public utility service as:
- Railway or air transport services
- Major port or dock services
- Postal, telegraph, or telephone services
- Industries supplying power, light, or water
- Public conservancy or sanitation systems
- Sections of industrial establishments on which the community depends (e.g., banking, cement, coal)
The government can declare an industry a public utility service for up to six months, with possible extensions in the public interest.
Strike and Lockout
Strike
Section 2(q) defines a strike as a cessation of work by employees acting in concert to pressure the employer. However, refusing additional work that the employer has no legal right to demand does not constitute a strike (Indian Hume Pipe Co. Ltd. vs. Their Workmen, 1960).
Lockout
Section 2(l) defines a lockout as the temporary closure of a workplace or suspension of work by an employer. It is a coercive measure used to pressure employees. Permanent business closure is not considered a lockout (Jaya Bharat Tile Works vs. State of Madras, 1954).
Prohibition of Strikes and Lockouts
Sections 22-24 of the Act address restrictions on strikes and lockouts. Section 22 prohibits them in public utility services without proper notice and adherence to specific conditions. Section 23 imposes general restrictions in both public and non-public utility establishments during conciliation, arbitration, or legal proceedings, or while a settlement or award is in effect.
Illegal Strikes and Lockouts
Section 24 defines illegal strikes and lockouts, including those that violate Sections 22 or 23, or continue despite a government order for arbitration. However, a strike or lockout that was initially legal and not prohibited by the government during a reference is not considered illegal if it continues.
Penalties
Section 26 prescribes penalties for illegal strikes and lockouts, including imprisonment and fines for both workmen and employers.
Layoff and Retrenchment
Layoff
Section 2(kkk) defines a layoff as the inability, refusal, or failure of an employer to provide work to a workman whose name is on the muster roll and who has not been retrenched. Laid-off employees retain their employment status and are entitled to compensation (Anusuyabi Vithal vs. Mehta, 1959). Section 25C outlines the rules for layoff compensation, including eligibility criteria and the rate of payment.
Retrenchment
Section 2(oo) defines retrenchment as the termination of service for any reason other than disciplinary action. It excludes voluntary retirement, superannuation, contract expiry, and termination due to ill health. Termination without reason constitutes retrenchment (Malkhan Singh vs. Union of India, 1981).
Procedure for Retrenchment
Section 25G establishes the principle of “last come, first go” for retrenchment, protecting workmen from discrimination. Employers must follow this principle unless there is an agreement to the contrary.
Transfer of Undertaking
When the ownership or management of an undertaking is transferred, workmen with at least one year of continuous service are entitled to notice and compensation as if they were retrenched, unless their service remains uninterrupted, their terms and conditions are not adversely affected, and the new employer assumes liability for retrenchment compensation.
Closing Down of Undertakings
Section 2(cc) defines closure as the permanent shutdown of a workplace or part thereof. Section 25FFA requires employers to provide 60 days’ notice to the appropriate government before closure, stating the reasons. This section does not apply to undertakings with fewer than 50 employees, seasonal or intermittent operations, or construction projects.
Compensation
Section 25FFF entitles workmen with at least one year of continuous service to notice and compensation as if they were retrenched in case of closure. If the closure is due to unavoidable circumstances, the compensation is limited to three months’ average pay.
Special Provisions
Section 25O requires employers to seek prior permission from the appropriate government at least 90 days before closure. The government can grant or refuse permission after an inquiry. Illegal closures entitle workmen to all benefits as if the undertaking had not been closed (M/s Orissa Textiles and Steel Ltd. vs. State of Orissa, 2002).