Labour Law Notes

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LABOUR LAW

Q. Notes on Lay off, Lockout, Retrenchment, Strike.

Section 2(kkk) - Lay off


Lay-off means failure, refusal, or inability of a employer to give employment to a
workman whose name is on the muster rolls of his industrial establishment and
who has not been retrenched, on the account of lack of coal, lack of power, lack of
raw material, over stocking of output, failure of machinery, due to natural
calamity, or due to any other connected reason.

Central India Spinning, Weaving, and Manufacturing Co. Ltd. Nagpur vs


State Industrial Court 1959 - Held that the words, "failure, refusal, or inability"
are key to the definition and means that the unemployment is due to a cause
independent of any action or inaction of the workmen.

Temporary
Due to reasons beyond employer's control
Due to economic reasons
non-intentional

Rights and Obligations Resulting from lay-off


Layoff is not a right conferred upon the employer but an obligation that the
unemployment is temporary in nature and in a reasonable time the laid off worker
will be restored his position. However, there is no indication regarding the time
layoff will continue.

25C. RIGHT OF WORKMEN LAID OFF FOR COMPENSATION


Whenever a workman (other than a badli workman or a casual workman) whose
name is borne on the muster rolls of an industrial establishment and who has
completed not less than one year of continuous service under an employer is laid
off, whether continuously or intermittently, he shall be paid by the employer for all
days during which he is so laid off, except for such weekly holidays as may
intervene, compensation which shall be equal to fifty per cent of the total of the
basic wages and dearness allowance that would have been payable to him had he
not been so laid off :

Provided that if during any period of twelve months, a workman is so laid-off for
more than forty-five days, no such compensation shall be payable in respect of any
period of the lay-off after the expiry of the first forty-five days, if there is an
agreement to that effect between the workman and the employer :

Provided further that it shall be lawful for the employer in any case falling within
the foregoing proviso to retrench the workman in accordance with the provisions
contained in section 25F at any time after the expiry of the first forty-five days of
the lay-off and when he does so, any compensation paid to the workman for having
been laid-off during the preceding twelve months may be set off against the
compensation payable for retrenchment.

Explanation : "Badli workman" means a workman who is employed in an


industrial establishment in the place of another workman whose name is borne on
the muster rolls of the establishment, but shall cease to be regarded as such for the
purposes of this section, if he has completed one year of continuous service in the
establishment.

25M. PROHIBITION OF LAY-OFF. -


(1) No workman (other than a badli workman or a casual workman) whose name is
borne on the muster-rolls of an industrial establishment to which this Chapter
applies shall be laid-off by his employer except with the prior permission of the
appropriate Government or such authority as may be specified by that Government
by notification in the Official Gazette (hereinafter in this section referred to as the
specified authority), obtained on an application made in this behalf unless such lay-
off is due to shortage of power or to natural calamity, and in the case of a mine,
such lay-off is due also to fire, flood, excess of inflammable gas or explosion.

(2) An application for permission under sub-section (1) shall be made by the
employer in the prescribed manner stating clearly the reasons for the intended lay-
off and a copy of such application shall also be served simultaneously on the
workmen concerned in the prescribed manner.

(3) Where the workmen (other than badli workmen or casual workmen) of an
industrial establishment, being a mine, have been laid-off under sub-section (1) for
reasons of fire, flood or excess of inflammable gas or explosion, the employer, in
relation to such establishment, shall, within a period of thirty days from the date of
commencement of such lay-off, apply, in the prescribed manner, to the appropriate
Government or the specified authority for permission to continue the lay-off.
(4) Where an application for permission under sub-section (1) or sub-section (3)
has been made the appropriate Government or the specified authority, after making
such inquiry as it thinks fit and after giving a reasonable opportunity of being
heard to the employer, the workmen concerned and the persons interested in such
lay-off, may, having regard to the genuineness and adequacy of the reasons for
such lay-off, the interests of the workmen and all other relevant factors, by order
and for reasons to be recorded in writing, grant or refuse to grant such permission
and a copy of such order shall be communicated to the employer and the workmen.

(5) Where an application for permission under sub-section (1) or sub-section (3)
has been made and the appropriate Government or the specified authority does not
communicate the order granting or refusing to grant permission to the employer
within a period of sixty days from the date on which such application is made, the
permission applied for shall be deemed to have been granted on the expiration of
the said period of sixty days.

(6) An order of the appropriate Government or the specified authority granting or


refusing to grant permission shall, subject to the provisions of sub-section (7), be
final and binding on all the parties concerned and shall remain in force for one year
from the date of such order.

(7) The appropriate Government or the specified authority may, either on its own
motion or on the application made by the employer or any workman, review its
order granting or refusing to grant permission under sub-section (4) or refer the
matter, or, as the case may be, cause it to be referred, to a Tribunal for adjudication
:

Provided that where a reference has been made to a Tribunal under this sub-
section, it shall pass an award within a period of thirty days from the date of such
reference.

(8) Where no application for permission under sub-section (1) is made, or where
no application for permission under sub-section (3) is made within the period
specified therein, or where the permission for any lay-off has been refused, such
lay-off shall be deemed to be illegal from the date on which the workmen had been
laid-off and the workmen shall be entitled to all the benefits under any law for the
time being in force as if they had not been laid-off.

(9) Notwithstanding anything contained in the foregoing provisions of this section,


the appropriate Government may, if it is satisfied that owing to such exceptional
circumstances as accident in the establishment or death of the employer or the like,
it is necessary so to do, by order, direct that the provisions of sub-section (1), or, as
the case may be, sub-section (3) shall not apply in relation to such establishment
for such period as may be specified in the order.

(10) The provisions of section 25C (other than the second proviso thereto) shall
apply to cases of lay-off referred to in this section.

Explanation : For the purposes of this section, a workman shall not be deemed to
be laid-off by an employer if such employer offers any alternative employment
(which in the opinion of the employer does not call for any special skill or previous
experience and can be done by the workman) in the same establishment from
which he has been laid-off or in any other establishment belonging to the same
employer, situate in the same town or village, or situate within such distance from
the establishment to which he belongs that the transfer will not involve undue
hardship to the workman having regard to the facts and circumstances of his case,
provided that the wages which would normally have been paid to the workman are
offered for the alternative appointment also.

Section 2(oo) - Retrenchment


Retrenchment means termination of service of an employee by an employer for
any reason other than as a punishment due to disciplinary action. This does not
include - voluntary retirement, superannuation, non-renewal of contract,
termination on the ground of continued ill-health.

For any reason what so ever - surplusage, redundancy due to advanced machinery,
slowdown in business. Reason does not matter.

DC & G Mills vs Shambhu Nath 1978 - Due to reorganization, a few workers


were made redundant. Instead of retrenching them, they were absorbed in other
places. One worker was given employment in another dept. with same pay.
However, due to lack of performance, he was shifted to another dept. However, he
refused to go to another dept. and asked for one more chance. He was then
removed from the rolls. This was held retrenchment.

Morinda Coop Sugar Mills vs Ram Kishen and others 1996 - Workers were
employed in the sugar mill only during the season and then they ceased to work.
Held that it is not retrenchment because it is only seasonal work.
Santosh Gupta vs SBI 1980 - A worker was removed after he failed a test that he
was required to pass for confirmation of service. SC held it to be retrenchment
because termination for any reason is retrenchment except if it is because of the
reasons mentioned in the act.

VRS
Panjab National Bank vs Virendra Kumar Goel 2004 - SC held that employees
who opted for voluntary retirement and availed any part of retirement benefits
were not eligible for retraction.

Ill-health
Lalit Mohan Puri vs Pure Drinks 1992 - A employee was asked to appear before
ESI doctor to prove ill health. He failed to appear. He was then removed. SC held
merely refusal to appear for medical examination should not be construed as ill
health and held it to be retrenchment.

Contract of Employment (subclause bb)


In the case of Dilip Hanuman Shirke vs Zilla Parishad Yavatmal 1990 - Held
that the sub clause bb that allows an employer to not renew the employment
contract must be read restrictively. The duration of employment must be read as
per the nature of work and not from just the employment letter otherwise it will be
abused by the employers.

Section 25F. CONDITIONS PRECEDENT TO RETRENCHMENT OF


WORKMEN
No workman employed in any industry who has been in continuous service for not
less than one year under an employer shall be retrenched by that employer until -
(a) the workman has been given one month's notice in writing indicating the
reasons for retrenchment and the period of notice has expired, or the workman has
been paid in lieu of such notice, wages for the period of the notice;
(b) the workman has been paid, at the time of retrenchment, compensation which
shall be equivalent to fifteen days' average pay for every completed year of
continuous service or any part thereof in excess of six months; and
(c) notice in the prescribed manner is served on the appropriate Government or
such authority as may be specified by the appropriate Government by notification
in the Official Gazette.

Section 25G. PROCEDURE FOR RETRENCHMENT


Where any workman in an industrial establishment, who is a citizen of India, is to
be retrenched and he belongs to a particular category of workmen in that
establishment, in the absence of any agreement between the employer and the
workman in this behalf, the employer shall ordinarily retrench the workman who
was the last person to be employed in that category, unless for reasons to be
recorded the employer retrenches any other workman.

Section 25N. CONDITIONS PRECEDENT TO RETRENCHMENT OF


WORKMEN

1. No workman employed in any industrial establishment to which this Chapter


applies, who has been in continuous service for not less than one year under
an employer shall be retrenched by that employer until -
1. the workman has been given three months' notice in writing indicating
the reasons for retrenchment and the period of notice has expired, or
the workman has been paid in lieu of such notice, wages for the period
of the notice; and
2. the prior permission of the appropriate Government or such authority
as may be specified by that Government by notification in the Official
Gazette (hereafter in this section referred to as the specified authority)
has been obtained on an application made in this behalf.
2. An application for permission under sub-section (1) shall be made by the
employer in the prescribed manner stating clearly the reasons for the
intended retrenchment and a copy of such application shall also be served
simultaneously on the workmen concerned in the prescribed manner.
3. Where an application for permission under sub-section (1) has been made,
the appropriate Government or the specified authority, after making such
inquiry as it thinks fit and after giving a reasonable opportunity of being
heard to the employer, the workmen concerned and the persons interested in
such retrenchment, may, having regard to the genuineness and adequacy of
the reasons stated by the employer, the interests of the workmen and all
other relevant factors, by order and for reasons to be recorded in writing,
grant or refuse to grant such permission and a copy of such order shall be
communicated to the employer and the workmen.
4. Where an application for permission has been made under sub-section (1)
and the appropriate Government or the specified authority does not
communicate the order granting or refusing to grant permission to the
employer within a period of sixty days from the date on which such
application is made, the permission applied for shall be deemed to have been
granted on the expiration of the said period of sixty days.
5. An order of the appropriate Government or the specified authority granting
or refusing to grant permission shall, subject to the provisions of sub-section
(6), be final and binding on all the parties concerned and shall remain in
force for one year from the date of such order.
6. The appropriate Government or the specified authority may, either on its
own motion or on the application made by the employer or any workman,
review its order granting or refusing to grant permission under sub-section
(3) or refer the matter or, as the case may be, cause it to be referred, to a
Tribunal for adjudication :Provided that where a reference has been made to
a Tribunal under this sub-section, it shall pass an award within a period of
thirty days from the date of such reference.
7. Where no application for permission under sub-section (1) is made, or where
the permission for any retrenchment has been refused, such retrenchment
shall be deemed to be illegal from the date on which the notice of
retrenchment was given to the workman and the workman shall be entitled
to all the benefits under any law for the time being in force as if no notice
had been given to him.
8. Notwithstanding anything contained in the foregoing provisions of this
section, the appropriate Government may, if it is satisfied that owing to such
exceptional circumstances as accident in the establishment or death of the
employer or the like, it is necessary so to do, by order, direct that the
provisions of sub-section (1) shall not apply in relation to such establishment
for such period as may be specified in the order.
9. Where permission for retrenchment has been granted under sub-section (3)
or where permission for retrenchment is deemed to be granted under sub-
section (4), every workman who is employed in that establishment
immediately before the date of application for permission under this section
shall be entitled to receive, at the time of retrenchment, compensation which
shall be equivalent to fifteen days' average pay for every completed year of
continuous service or any part thereof in excess of six months.

Section 25H. RE-EMPLOYMENT OF RETRENCHED WORKMEN


Where any workmen are retrenched, and the employer proposes to take into his
employment any persons, he shall, in such manner as may be prescribed, give an
opportunity to the retrenched workmen who are citizens of India to offer
themselves for re-employment, and such retrenched workmen who offer
themselves for re-employment shall have preference over other persons.
Section 2(l) - Lock Out
Lockout means temporary closing of the place of employment or suspension of
work or refusal by the employer to continue to employ any number of persons
employed by him.

Used as a measure of coercion - Antithesis of strike.


due to a trade dispute.
intentional

4 ingradients of Lockout

1. Temporary closure of a place of employment by employer or suspension or


work by the employer, or refusal to employ any number of persons by the
employer.
2. motivate by coercion
3. in an industry
4. due to a dispute in such industry.

Workmen of Itakhoolie Tea Estate vs Management 1952 - In lock out workmen


are asked by the employer to keep away from work and thus they are not under any
obligation to present themselves for work.

Section 2(q) - Strike


Strike means a cessation of work by a body of persons employed in any industry
acting in combination, or a concerted refusal, or a refusal under a common
understanding, of any number of persons who are or have been so employed to
continue to work or to accept employment.

Indian Iron and Steel Co vs Its Workmen - Held that mere cessation of work is
not strike unless it is shown that it is due to an industrial demand.
Ram Sarup vs Rex - Mere absence from work is not enough but there should be a
concerted refusal to accept employment to call it a strike.
Patiala Cement Co. vs Certain Workers - Cessation of work for even half an
hour can be a strike.

Types of Strike - General, Go Slow, Work to Rule, Tools down/Stay In,


Sympathetic, Hunger.
Section 22. PROHIBITION OF STRIKES AND LOCK-OUTS

1. No person employed in a public utility service shall go on strike in breach of


contract -
1. without giving to the employer notice of strike, as hereinafter
provided, within six weeks before striking; or
2. within fourteen days of giving such notice; or
3. before the expiry of the date of strike specified in any such notice as
aforesaid; or
4. during the pendency of any conciliation proceedings before a
conciliation officer and seven days after the conclusion of such
proceedings.
2. No employer carrying on on any public utility service shall lock-out any of
his workmen -
1. without giving them notice of lock-out as hereinafter provided, within
six weeks before locking-out; or
2. within fourteen days of giving such notice; or
3. before the expiry of the date of lock-out specified in any such notice
as aforesaid; or
4. during the pendency of any conciliation proceedings before a
conciliation officer and seven days after the conclusion of such
proceedings.
3. The notice of lock-out or strike under this section shall not be necessary
where there is already in existence a strike or, as the case may be, lock-out in
the public utility service, but the employer shall send intimation of such
lock-out or strike on the day on which it is declared, to such authority as
may be specified by the appropriate Government either generally or for a
particular area or for a particular class of public utility services.
4. The notice of strike referred to in sub-section (1) shall be given by such
number of persons to such person or persons and in such manner as may be
prescribed.
5. The notice of lock-out referred to in sub-section (2) shall be given in such
manner as may be prescribed.
6. If on any day an employer receives from any person employed by him any
such notices as are referred to in sub-section (1) or gives to any person
employed by him any such notices as are referred to in sub-section (2), he
shall within five days thereof report to the appropriate Government or to
such authority as that Government may prescribe, the number of such
notices received or given on that day.
Section 25. PROHIBITION OF FINANCIAL AID TO ILLEGAL STRIKES
AND LOCK-OUTS
No person shall knowingly expend or apply any money in direct furtherance or
support of any illegal strike or lock-out.

Section 26. PENALTY FOR ILLEGAL STRIKES AND LOCK-OUTS


(1) Any workman who commences, continues or otherwise acts in furtherance of, a
strike which is illegal under this Act, shall be punishable with imprisonment for a
term which may extend to one month, or with fine which may extend to fifty
rupees, or with both.

(2) Any employer who commences, continues, or otherwise acts in furtherance of a


lock-out which is illegal under this Act, shall be punishable with imprisonment for
a term which may extend to one month, or with fine which may extend to one
thousand rupees, or with both.

Section 2(j) - Industry


Industry means any trade, business, undertaking, manufature, or calling of service
of employers and includes any calling, service, employment, handicraft, industrial
occupation, or avocation or workers.

State of Bombay vs Bombay Hospital Mazdoor Sabha - Any activity


systematically or habitually undertaken for the production or distribution of goods
or for the rendering of material service to the community at large or a part of such
community with the help of employees is an industry.

Bangalore Water Suppy vs A Rajappa - Practially reiterated the principles in


Bombay Hospital Mazdoor Sabha case.
Triple Test -

1. Systematic Activity
2. organized by a cooperation of employer and employees
3. for the production and or distribution of goods or services calculated to
satisfy human wants and wishes.

The following points were also observed -


1. Does not include spiritual or religious services e.g. making, on a large scale,
prasad. It only includes material services and things.
2. Absence of profit motive or gainful objective is irrelevant be the venture
public, private, or joint.
3. The true focus is on the function and the decisive test is the nature of the
activity with special emphasis on employee-employer relationship.
4. If an organization is a trade or business, it does not cease to be an industry
merely because philanthropy is animating the undertaking.

Dominant Nature Test - If an undertaking includes several activities some of which


are industry and some not, the predominate nature of the business and the
integration of the departments is the true test.

Exceptions - Certain gurukuls, or research labs, or clubs operating on a small scale


are not industry.

In the Bangalore Water Suppy case, Bombay Hospital Mazdoor Sabha case was
rehabilitated and Hospital is considered an industry.

DN Banerjee vs PN Mukherjee - Municipal Corporation is an industry.

Brahmo Samaj Education Society vs WB College Employees Associaltion -


Whether a University or Educational institution is an industry or not depends on
the evidence in each case. If the evidence points that there is no much importance
of individual teachers and the focus is mainly profit, it is an industry. In general
Universities are industry even though its workers may not be Workers as per the
the act.

Clubs such as Cricket Club of India, Lawyers Office, Indian Standards Institute are
all Industry.

Q. Define Trade Union. Is the registration of a Trade Union necessary? Write


down the procedure of registration, amalgamation, and cancellation of a trade
union. Under what conditions can a Registrar of Trade Unions cancel the
registration of a Trade Union? State the appellate provisions against the
decisions of the Registrar. What are the rights, privileges, immunities,
and liabilities of a registered trade union? What are the various functions
performed by a trade union and how do they promote the welfare of the
workers (what is the utility of a Trade Union)?

Due to a surge in industrial activity in the later part of 19th century, the population
of working class increased. Since the employers were mainly interested only in
profitability, workers were at a mercy of the employers. Slowly, the concept of a
union started taking hold in India. In 1890, mill workers of Bombay associated
under the name of Bombay Millhands Association. Although it was not a trade
union in a strict sense, it was nevertheless a start in India.
After the first world war the cost of living increased and the workers frequently
agitated to demand more pay. In the early 20th century Royal Trade Commission
studied the condition of workers and suggested the formations of Trade Unions. As
per the recommendations of the Royal Commission, Indian Trade Unions Act was
passed in 1926. However, due to strong opposition from employers, it was
enforced only in 1927. The original act lacked teeth in the sense that the formation
of a Trade Union itself dependent on the recognition by the employer. Later on
several amendments were made to fix the issues. In 1947, the act was amended
widely as per the socialist inclination of the polity.

Definition
Section 2(h) of the Trade Unions Act 1926 defines Trade Union as a combination,
temporary or permanent, formed primarily for the purpose of regulating the
relations between workmen and employer, workmen and workmen, or employers
and employers, or for imposing restrictive condition on the conduct of any trade or
business, and includes the federation of two or more trade unions.

It is the object of the association or combination that determines whether it is a


trade union or not.
A society or authors, publishers, and other owners of copyright meant to protect
their copyright in music and songs, was held NOT to be a Trade Union by the
House of Lords.
In the case of Tamil Nadu NGO Union vs Registrar, Trade Unions, AIR 1962,
Madras HC held that Tamil Nadu NGO Union, which was an association of sub
magistrates of the judiciary, tahsildars, etc., was not a trade union because these
people were engaged in sovereign and regal functions of the State where were its
inalienable functions.
In the case of GTRTCS and Officer's Association, Bangalore and others vs
Asst. Labor Commissioner and anothers AIR 2002, Kar. HC held that the
definition of workmen for the purpose of Trade Unions is a lot wider than in other
acts and that the emphasis is on the purpose of the association rather than the type
of workers and so it is a valid Trade Union.

The registration of a trade union is not necessary. However, upon registration, a


trade union gets several benefits including some immunities that are not available
to an unregistered Trade Union. In the case of Workers of B and C Co vs Labor
Commissioner, AIR 1964 Mad it was held that a Trade Union can raise or
sponsor a trade dispute and represent on behalf of its members in legal proceedings
arising out of a trade dispute.
Section 13 specifies that upon registration, a trade union gets a legal entity status,
due to which it

 has perpetual succession and a common seal.


 can acquire and hold movable as well as immovable properties.
 can contract through agents.
 can sue and can be sued.

Procedure of Registration

Section 3 (Appointment of the Registrar) : The appropriate government appoints a


person to be the registrar or trade unions for each state.

Section 4 (Mode of registration) says that to register a Trade Union,

 an application must be sent to the Registrar of Trade Unions appointed by an


appropriate government.
 the application must be made by seven or more persons who are engaged in
the trade or industry in connection to which the Trade Union is to be
formed.
 all the applicants must subscribe their names to the rules of the Trade Union
and comply with the provisions of this act regarding registration.
 there must be at least 10% or 100, whichever is less, members who are
engaged or employed in the establishment or industry to which it is
connected.
 there must be not be less than seven members who are engaged or employed
in the establishment or industry to which it is connected.

If more that half of the persons who applied for the registration cease to be
members of the union or expressly disassociate themselves from the application,
the application will be deemed to be invalid.

Section 5 (Application of Registration) gives the details of the application. It says


that the application should be sent to the registrar along with the copy of the rules
of the trade union and a statement of the following particulars

 The name, occupation, and addresses of the applicants.


 The name of the trade union and the address of its head office.
 The titles, names, ages, addresses, and occupations of the office bearers of
the trade union.
 If the trade union has been in existence for more than 1 yr, a general
statement of its assets and liabilities.

Section 6 (Provisions to be contained in the rules of a Trade Union) specifies the


provisions that should be contained in the rule book of the trade union. A copy of
this rule book must be supplied along with the application for registration of the
trade union. This rule book details the internal administration of the trade union
and also determines and governs the relationship between the trade union and
its members. It must contain the rules for the following matters:

1. name of the trade union


2. the whole object of the trade union
3. the whole purposes for which the general funds can be used.
4. the maintenance of the list of members and adequate facilities to inspect it
by the members of the trade union.
5. the membership of ordinary members who are actually engaged or employed
in an industry with which it is connected as well as the membership of the
honorary or temporary members.
6. the appointment of members of the executive body.
7. the membership or subscription fee, which shall not be less that 25 paisa per
member per month
8. the conditions under which a member can get the benefits or has to pay
fines.
9. the safe custody of funds and provisions for inspecting or auditing the
statements, or other documents of the trade union.
10.dissolution of the trade union.
In the case of M T Chandersenan vs Sukumaran AIR 1974, SC held that if a
member fails to pay subscription fee, he cannot be considered a member of the
trade union. However, subscriptions cannot be refused under some pretext which
results in the denial of membership.
In the case of Bokajan Cement Corporation Employees Union vs Cement
Corporation of India, 2004, SC held that membership of the union does not
automatically cease upon termination of the employment.

Under section 7, the registrar has the power to ask for further information from the
trade union to satisfy himself that the trade union complies with section 5 and is
eligible to be registered under section 6. The registrar can refuse to register the
trade union until he receives the information. Further, he has the power to ask to
change the name of the trade union if a union with the same name already exists or
if he feels that the name could be deceiving or confusing to the public or the
members of the trade union.

Under section 8, upon satisfaction of all the requirements, the Registrar of the
Trade Unions will register the trade union. It is mandatory for the registrar to
register a trade union if the union satisfies all the technical requirements of this act.
In the case of re Indian Steam Navigation Workers Union AIR 1936 SC held
that a Registrar only has to see whether all the technical requirements are being
fulfilled and not whether it could be described as unlawful.
In the case of ACC Rajanka Limestone Quarries Worker's Union vs Registrar
of Trade Unions, AIR 1958, it was held that if the registrar does not register the
trade union within 3 months of application, an appeal can be made to the High
Court under art 226.

Under section 9, the registrar will issue the certificate of registration in the
prescribed form, which shall be a conclusive evidence that the trade union is
registered under this act.

Procedure for amalgamation


Section 24 says that any two or more registered trade unions may become
amalgamated together into one trade union with or without dissolution or division
of the funds of such trade unions or either or any of them, provided that votes of at
least one half of the members of each trade union are recorded and at least 60% of
the votes of each trade union are in favor of the proposal.
The notice of such amalgamation, signed by the secretary and seven members of
each of the trade unions, should be sent to the registrar of the state where the head
office of the amalgamated trade union is to be located. If the registrar is satisfied
that all the provisions of this act have been complied with and the trade union
formed thereby is entitled to registration under section 6, he will register the new
trade union under section 8 and the amalgamation will take effect from the date of
registration.

Cancellation of Registration
Under section 10, the Registrar of Trade Unions has the power to cancel the
registration of a trade union in the following conditions:

1. On the application of the trade union to be verified in the prescribed manner.


2. If the registrar is satisfied that registration was obtained by fraud or mistake.
3. If the trade union has ceased to exist.
4. If the trade union willfully, upon notice of the registrar, has contravened or
allowed any rule to continue in force, which is inconsistent with the
provisions of this act.
5. If the trade union rescinds any rule providing for any matter, provision for
which is required to be made in section 6.
6. If the registrar is satisfied that a trade union of workmen has ceased to have
the requisite number of members.

In the case of Tata Electric Companies Officer's Guild vs Registrar of Trade


Unions, 1994, Bombay HC held that for a registrar to cancel the registration,
willful neglect of the notice is a must. If the trade union sends the account
statement upon notice of the registrar, the registrar cannot cancel the registration
on the ground that the account statement was not filed earlier.

Under section 27, upon dissolution of a trade union, seven or more members must
send a notification to the registrar within 14 days of dissolution and the registrar
shall register ir after verifying that the dissolution has been done as per the
provisions of this act. Further, if the rules of the trade union do not provide for
distribution of the funds upon dissolution, the registrar may distribute the funds in
such manner as may be prescribed.

Appeal against the decision of Registrar


Section 11 grants a limited right to appeal the decisions or orders passed by the
registrar.

An appeal may be made to


1. the high court, if the head office of the trade union is located in a presidency
town.
2. the labour court or industrial tribunal, if the head office of the trade union is
located in its jurisdiction.
3. if the head office of the trade union in any other location, to such court, not
inferior to the court of an additional or assistant judge of a principal civil
court of original jurisdiction, as the appropriate govt. may appoint in this
behalf for that area.

An appeal must be made within 60 days of the date on which registrar passed the
order against which the appeal is made.
In the case of Registrar of Trade Unions, West Bengal vs Mihir Kumar Guha
1963, Cal, it was settled that a trade union whose head office is in a presidency
town has only a single chance of appeal against the decision of the registrar, which
is to the high court while a trade union whose head office is in muffasil has two
chances of appeals, first in the local court and second in the high court.

Liabilities of a registered Trade Union

A registered trade union must follow the provisions of the Trade Unions Act 1926.
In particular, the following are some restrictions in a registered trade union:

1. A Trade Union cannot spend the funds on anything the office bearers want.
It can spend funds only on the activities specified in Section 15. These
include:
1. salaries of the office bearers.
2. expenses required for the administration of the trade union
3. compensation to workers due to loss arise of any trade dispute.
4. welfare activities of the workers including housing, clothing, or any
such activity.
5. benefits to the workers or their dependents in the case of
unemployment, disability, or death.
6. publishing material for creating awareness in the workers.
7. legal expenses required for defending or bringing a suit.
8. education of workers or their dependents.
9. expenses for medical treatment of workers.
10.taking insurance policies for workers.
Mario Raposo vs H M Bhandarkar and others 1994 - Office bearers of a trade
union invested the money from general fund into shares of UTI. This was held
invalid because it is a speculative investment.

2. A trade union cannot force members to subscribe to political fund


under section 16.
3. Under section 20 a trade union must make available all its record books of
accounts and list of membership for inspection upon request of any member
or his representative.
4. Section 21 allows minors more than 15 yrs of age to be members of a trade
union. However, such minors cannot hold office.
5. Under section 21-A, a trade union cannot appoint a person who has been
convicted of a crime involving moral turpitude and has been imprisoned for
6 months or more within last 5 years.
6. As per section 22, at least half of the office bearers of a trade union of
workers of unorganized sector must be engaged or employed in an industry
to which the trade union is connected. Also, while a union has a right to
remove any office bearer, this power must be used judiciously and rules of
natural justice must be followed.
7. Under section 28, a general statement, audited in a prescribed manner, of all
income and expenses must be sent to the registrar every year.

Rights and Priviledges of a registered Trade Union

1. As per section 13, upon registration, a trade union becomes a legal entity
and as a consequence, it gets perpetual succession and a corporate seal, it
can acquire and hold movable and immovable property, contract through
agents, and can sue and get sued.
2. Under section 15 a registered trade union has a right to establish a general
fund.
3. Under section 16, a registered trade union has a right to establish a political
fund. Subscription to this fund is not necessary for a member.
4. Under section 17, 18, and 19 a registered trade union gets immunity in
certain criminal, civil, and contractual proceedings.
5. Under section 24, trade unions have the right to amalgamate.
6. Under section 28-F, the executive of a registered trade union has a right to
negotiate with the employer the matters of employment or non-employment
or the terms of employment or the condition of labor of all or any of the
members of the trade union and the employer shall receive and send replies
to letters and grant interviews to such body regarding such matters. It further
provides that the executive is entitled to post notices of the trade union
meant for its members at any premises where they are employed and that the
employer shall provide reasonable facilities for that.

Immunites available to a registered Trade Union

1. Section 17 confers immunity from liability in the case of criminal


conspiracy under section 120-B of IPC, committed by an office bearer or a
member. However, this immunity is partial in the sense that it is available
only with respect to the legal agreements created by the members for the
furtherance of valid objects of a trade union as described in section 15 of the
act. The immunity cannot be claimed for an act that is an offence. Registered
Trade Unions have certain rights to do in furtherance of their trade disputes
such as calling for strike, persuading members.

In the case of West India Steel Company Ltd. vs Azeez 1990 Kerala, a
trade union leader obstructed work inside the factory for 5 hrs while
protesting against the deputation of a workman to work another section. It
was held that while in a factory, the worker must submit to the instructions
given by his superiors. A trade union leader has no immunity against
disobeying the orders. A trade union leader or any worker does not have any
right by law to share managerial responsibilities. A trade union can espouse
the cause of workers through legal ways but officials of a trade union cannot
direct other workers individually or in general about how to do their work.
They do not have the right to ask a worker to stop his work or otherwise
obstruct the work of the establishment. An employer may deal with a person
causing obstruction in work effectively.

2. Section 18 confers immunity from civil proceedings in certain cases to a


trade union or its office bears or members. In general, a person is liable in
torts for inducing another person to breach his contract of employment or for
interfering with the trade or business of another. However, a trade union, its
officers, and its members are immune from this liability provided that such
an inducement is in contemplation or furtherance of a trade dispute. Further,
the inducement should be lawful. There is no immunity against violence,
threats, or any other illegal means.
In the case of P Mukundan and others vs Mohan Kandy Pavithran 1992
Kerala, it was held that strike per se is not an actionable wrong. Further, it
was held that the trade union, its officers, and its members are immune
against legal proceedings linked with the strike of workmen by the
provisions of section 18.
In the leading case of Rohtas Industries Staff Union vs State of Bihar
AIR 1963, it was held that employers do not have the right to claim damages
against the employee participating in an illegal strike and thereby causing
loss of production and business.
In the case of Simpson & Group Companies Workers & Staff Union vs
Amco Batteries Ltd 1992 Karn., it was held that physical obstruction of
movement of management officials, contractors, goods, or vehicles carrying
raw materials, is not a trade union right or a fundamental right under art 19.
Immunity under section 18 cannot be claimed for such activities. Right to
picket is a very intangible right and it extends only up to the right of free
movement of others. The methods of persuasion are limited to oral and
visual and do not include physical obstruction of vehicles or persons.

3. Section 19 Enforceability of agreements - In India, an agreement in


restraint of trade is void as per section 25 of Indian Contract Act. However,
such an agreement between trade union members is neither void nor
voidable. It is important to note that this right is available only to registered
trade unions. An unregistered trade union must follow the principles of
general contract law.

Activities of a Trade Union


Fatta

Problems with Trade Unions

1. Too many unions causes intra-union and inter-union rivalry and thus loss of
precious resources that can be used for worker's welfare.
2. Due to politicization of unions causes the union to overlook the true welfare
and benefits of the worker.
3. Outside Leadership causes unions to lose focus because such leadership does
not understand the problems of the laborers.
4. Closed Shop/Union Shop companies forces laborers to join the union and
thus causes monopoly. Close shops/Union Shops are now illegal in many
countries.
5. Sometime the employers do not recognize unions.

Q. Explain the terms "Dependents" and "Wages" w.r.t. WCA, 1923. What do
you understand by Workers Compensation? In what situations does an
employer have to compensate a worker? Explain the phrase "arising out of
and in the course of employment" with reference to WCA, 1923. How far is an
employer liable to pay compensation to a laborer injured in an accident
arising out of and in the course of employment? Since amount of
compensation depends on the nature of suffering, discuss the various
sufferings on the which amount to be paid differs. What are the remedies
available to a workman injured in course of an employment? How is social
security is made available to the workman under WCA, 1923?

What are the objectives behind Employees' State Insurance Act 1948 and how
does it differ from Workmen's Compensation Act 1923?

Dependents
Dependents means any of the following relatives of a deceased workman. Section
2 (1) (d) of WCA 1923 classifies dependents into three classes. In the case of New
India Insurance Co Ltd vs Man Singh and others, 1984, MP HC held
that persons in these classes do not have mutually exclusive claim to
compensation. They can simultaneously claim compensation.

1. Widowed mother, widow, minor legitimate or adopted son, unmarried


legitimate or adopted daughter. In this case it is irrelevant whether they are
fully or partially dependent on the earnings of the workman.
2. Legitimate son or daughter if -
1. they are fully dependent on the earnings of the workman.
2. if they are infirm.
3. if they are above 18.
3. The persons in this class must be dependent wholely or partially on the
earnings of the workman to claim compensation.
1. widower
2. a parent other than widowed mother
3. an minor illegitimate son, an illegitimate or legitimate or adopted
daughter if minor and married or if minor and widowed
4. widowed daughter in law
5. a minor brother, an unmarried sister, or widowed sister if minor.
6. a minor child of predeceased son.
7. a minor child of a predeceased daughter if no parent of the child is
alive.
8. a paternal grandparent if no parent of the worker is alive.

In the case of Ramji vs Lalit Kumar Bardiya, 1995, MP HC held that the parents
have to the right to claim compensation because the workman was living jointly
with them. In joint families there is a sharing of income and responsibilities. Even
if workman did not contribute to the family fund that was only because he was not
being paid by the employer. The family would have received the benefit of his
wages otherwise.

WagesSection 2(1) m defines wages as any benefit or privilege received by a


worker from an employer that can be estimated in money except

1. traveling allowance or value of any concession given on traveling.


2. employer's contribution to PF or pension fund
3. any expenses reimbursed to the workman incurred due to work.

The following benefits are included in calculating wages:

1. Bonus - was held to be wages in the case of Maharastra Sugar Mills Ltd.
vs Ashru Jaiwant AIR 1966 Bom.
2. Maternity benefits payable to a woman after pregnancy.
3. Dearness Allowance
4. Benefits in the form of food, clothing, and accommodation
5. Accommodation
6. Overtime pay

In the case of M/s J C Mills vs Deshraj, AIR 1952, MP HC held that paid leave
is not a wage unless it is stated expressly in the contract of employment that paid
leave can be encashed if not taken.
Workman
Section 2(1) n defines workman as

 A railway servant as defined in Railways Act 1989 except those who are
permanently employed in an administrative office.
 a master, seaman, or any crewman of a ship.
 captain or a crew member of an aircraft.
 driver, mechanic, cleaner, helper or employed to any task related to motor
vehicles.
 a person recruited for work abroad by a company.
 a person working for any task as described in schedule 2.

Exception: A member of the armed forces is not a workman.

Examples:

 A porter even though not included in schedule II. Narayanan vs Southern


Railway - Kerala 1980
 Working for 24 days in a month on daily wages. Hastimal vs Arjunan -
Madras 1993.

Workmen's Compensation and Social Security


Success of an industry depends on the productivity of the workers. Thus,
minimizing the labor cost is a prime objective of factory owners. In their zest to
reduce the labor cost, safety of the workers gets neglected thereby increasing the
chances of death or injury to the workers. An increase in the use of complex
machinery, the risk for injury to worker had increased. Further, many times,
because of the injury a worker may not be able to work, or in case a worker dies,
his dependents have no way of making ends meet. This in turn gives rise to
poverty, hopelessness, and above all insecurity among other workmen which is
detrimental to the industry itself. This is unacceptable in any civilized country.
Thus, to ensure that workers and their dependents get enough financial security,
Workmen's Compensation Act was enacted in 1923. It obligates the employer to
compensate a worker for his loss due to personal injury while on the job.
Appropriate compensation to worker and his dependents prevents unrest among
other workers. This promotes a general well being among the working class. In the
absence of such compensation, the dependents may be forced into begging or
illegal activities. Thus, WCA is a great mechanism to enhance social security.

This act has gone long way to protect workmen for accidental loss of life or limb
and to provide social security to poverty stricken workmen. Although its main
objective is to compensate the workers for injury it has also prompted the
employers to implement processes that reduce risk to the workers.
Main Features of the act:

 Modeled on the British pattern and payment is obligatory on all employers


whose employees are entitled to benefit under this act.
 The workmen or his dependents can claim compensation if the injury has
been caused by an accident arising out of and in course of employment and
if such an accident cannot be attributed to drug or drinks or willful neglect of
safety rules.
 Various class of workmen have been specified. Earlier clerical workers and
workers making more than 1600 rs per month were excluded but now the
wage limit has been removed.
 The amount of compensation depends, in case of death, the average monthly
wages, and in case of injury, the average monthly wages and the type of
injury.
 The term wages includes -overtime page, benefits like food, housing, and
clothing.

Principles Governing the act:

 The purpose is not to give a solatium but to compensate the worker or his
dependents for the actual loss suffered due to an accident.
 There must be a casual connection between the injury and the accident, and
the accident and the work done in the course of employment.
 The claimant must prove the connection between the injury and the course
of work during employment.
 It is not necessary that the worker is actually working or has just finished
work.
 If the evidence shows a greater probability which satisfies a reasonable man
that the work contributed to the injury, it is enough to prove the claim.

Nature of liability

This is a different kind of liability. It is not same as a liability in torts. It arises due
to the relationship between the worker and employer. An employer is only liable to
pay the difference between the earning capacities of the worker before and after the
accident irrespective of the loss or expenses incurred in treatment of the worker. It
is also not dependent upon the neglect or wrong doing of the employer.
When is an employer liable to pay compensation?

Section 3 says that an employer is liable to pay compensation if a personal injury


is caused to the workman due to an accident arising out of and in the course of
employment. Thus, the following conditions must be satisfied to claim
compensation:

1. Personal injury must have been caused to a workman.


2. The personal injury must have been due to an accident.
3. The accident must have arisen out of and in the course of employment.
4. The injury must have resulted in death or the worker must have received
total or partial disability at least for 3 days due to the injury.

The following are the excuses or conditions in which an employer is not liable to
pay any compensation:

1. If the injury did not cause total or partial disablement for more than 3 days.
2. If the injury did not result in death or permanent total disablement and
1. The worker was under the influence of drinks or drugs.
2. The worker willfully disobeyed the orders expressly given or a rule
expressly framed for the safety of the workman.
3. The worker willfully did not wear or removed protective gear as
required to work while having known that such devices exist and were
available.

Employer's liability in case of occupational diseases


Section 3 also discusses many diseases that can be caused due to employment in
certain industries. These diseases are divided in 3 parts and are listed in Schedule
3. There are different rules for the compensation arising due to diseases of different
parts.

In the case of Indian News Chronicle vs Mrs Lazarus - Punjab AIR 1961 - it
was held that Injury need not only be physical. Pneumonia caused due to change in
temperature is also injury because of job.
In the case of Sunil Industries vs Ram Chander Pradhan - SC 2001 - It was
held that it is not necessary for a workman to be working in a factory as defined in
Factories Act 1948 to claim compensation.
Arising out of and in the course of Employment

arising out of == suggests the cause of the accident


in the course of == refers to the time, place, and circumstances of the accident

The claimant must prove that the accident has occurred due to the circumstances
arising out of employment. If the risk taken by the workman was only because of
the employment, it is a valid casual connection. If the risk taken was on the
worker's own account and not due to employment, then the employer is not liable.
Worker was doing something for the furtherance of the employer's business and
not for his own benefit, it is a valid connection. Worker should not be doing
something which is way out of scope of his employment - doctrine of added peril.

It is not necessary that the accident has taken place within the work place, or even
within working hours but that the employment has some casual relationship with
the cause of the accident. A worker might get hurt while going to quench his thirst
or bodily needs, and that would be a valid ground for compensation. Thus, the
activity of the worker may not necessarily be exactly the same but must be
reasonably linked to the work that he is supposed to do.

Trustees Port of Bombay vs Yamunabai - AIR 1952 Bom - A worker was


injured by a bomb placed by somebody in the workplace. HC held that it was
arising out of employment. HC stipulated that if a particular accident would not
have happened to a workmen had he not been in the employment at that time and
place, it would be an accident arising out of the employment.

State of Raj vs Ram Prasad - 2001 SC - Worker died due natural lightning. SC
held that since the workman was exposed to lightning only because of the job,
employer is liable to pay compensation.

R B Moondra and Co vs Mst Bhanwari - AIR 1970 Raj - Worker entered a


petrol tank to check leak. He lighted a match and died of burns. HC held that it was
in due course of employment and that he did not take any additional risk because
he did not believe there was any risk since the tank was partially filled with water.

Notional Extension of Employer's premises


Ordinarily, going to and coming home from work place is not considered within
the course of employment. However, there may be reasonable cases where an
extension of employer's premise and time may be applied if while going to or
coming from work the worker has to use part of the employer's facilities.
This was discussed by the House of Lords in the case of St Hellen's Colliery Ltd.
vs Hewlston in 1924. In this case, the worker was not obligated to use employer's
train to work. He could use any other means to commute. So it was held that an
accident arising while on the special train was not in the course of employment.

In the case of Varadarajulu vs Masaya Boyan AIR 1953, Mad. HC held that the
worker had no other means to go to the work place other than to use the employer's
lorry. So, accident happening while in the lorry is in due course of employment.

Willful disobedience of orders or safety devices etc


In order to disown any claim for compensation, it is not enough to show that the
workman neglected the safely measures or disobeyed the orders. The employer
must show that such neglect was willful and the orders that he disobeyed were
express. Mere disobedience is not enough because it could be because or
forgetfulness or due to the result of impulse of the moment.

In the case, of Arya Muni vs Union of India 1965, a workman lost is right eye
due to an accident. The employer claimed that there were instructions to use
goggles but the worker did not use them. However, it was held that since the
worker did not know English, it cannot be said that he understood the message.
Also, while the worker was aware of goggles that did not mean that he understood
that they were mandatory. The supervisor also did not tell him so. Thus, the
employer was liable to pay compensation.

Negligence of the workman


In the case of Padam Debi vs Raghunath AIR 1950 Orrisa HC held that once it
is established that an accident happened without any design and in course of
employment, the question of negligence, great or small, is irrelevant.

In the case of Roshan Deen vs Preeti Lal 2002 SC held that liability to pay
compensation cannot be reduced or avoided by any agreement with the worker to
that affect.

Alternative Remedies
In case of an injury, a workman has the following alternative remedies

1. he can claim compensation under WCA 1923.


2. he can claim damages in torts.
3. he can claim under the Employer's liability act.
However, a workman is not allowed to put his employer into double jeopardy of
proceedings or compensation as per section 3(5). Thus, he cannot make any claim
for compensation under this act if he has instituted any civil proceeding for the
same injury. Similarly, a workman is not allowed to institute any civil proceeding
for damages against the employer or any other person for the same injury if,

1. he has made a claim for compensation before a commissioner or


2. the amount of compensation has been settled between him and the employer
in accordance with the provisions of this act.

A workman cannot get compensation twice through any means for the same injury.
Section 3(5) uses the word "instituted", which is more specific than that the just
filing a claim. "Instituted" means setting on foot an inquiry. Thus, if a workman
has filed a claim and then withdrawn it before any inquiry was started, it will not
be considered as instituted.

Amount of compensation
The amount of compensation for an injury depends on the extent of the loss of
earning capacity, which usually depends on the type of injury and resulting
disablement. Section 4 defines detailed rules for determining the amount of
compensation.

a) If the injury results in death, the amount of compensation is equal to the amount
of 50% of the monthly wages of the deceased workman multiplied by a relevant
factor or 80,000/- which ever is more.
b) If the injury results in total permanent disability, the amount of compensation is
equal to the amount of 60% of the monthly wages of the workman multiplied by a
relevant factor or 90,000/- which ever is more.
In these cases, if the monthly wage is more than 4000 Rs then the monthly wage
considered in the calculation will be 4000/-. The relevant factor must be seen in
schedule IV and it depends on the number of years in service.
c) If the injury results in partial permanent disability, the amount of compensation
is equal to the amount determined under permanent total disability multiplied by
the percentage of loss of earning capacity as given in schedule I, if the injury is
mentioned in schedule I, or is equal to the percentage of amount determined under
permanent total disability as the percentage of loss of earning capacity as
determined by a qualified medical practitioner.
d) If the injury results in temporary, partial or total, disablement, the workman
must be paid half monthly payments of 25% of his monthly wages for the time he
is disabled.

Any payment received by the workman for the treatment of his injury from his
employer will not be considered against the amount of compensation.

Employees' State Insurance Act 1948

While Worker's compensation act was instrumental in providing a secure working


environment to workers to quite an extent, it still lacked the aspect of
insurance. Worker's compensation Act is geared towards providing an assistance
in case of an accident causing an injury, that too only when the accident happens in
due course of employment. However, there are several other factors such as
disease and age, which may cause a worker to become unable to do any job. In
such cases, WCA 1923 does not provide any help. Further, no welfare activity is
done under WCA.

Dr Adarkar studied the social conditions of labor in India and made a detailed
report on the problems and solutions. Based on his reports and suggestions made
by several prominent experts of ILO, ESI Act was enacted. The main object of
ESIA 1948 is to provide a comprehensive insurance to the workers. ESIA is the
first legislation that looks after the general welfare of the labor in India. It provides
health, disability, and unemployment insurance to workers. The term welfare is
quite wide and includes any activity done for the physical, economical, and
intellectual betterment of the workers and their dependents.

In the first instance this act applies to factories all over India. A state govt. can all
extend provisions of this act to any industry or any class of industries, or
establishment in any part of the state.

Section 3
Under this section, the Central Govt. has formed a corporation by the name of
Employees' State Insurance Corporation, which is a legal entity.

Section 4 defines the constitution of the ESI Corporation. It details the provisions
regarding president, board of directors, managers, etc.

Section 38
This sections specifies that all employees working in factories are covered. In the
case of Hyderabad Asbestos vs. ESI Court AIR 1978, SC held that the term
employee is wide enough to included anybody who works for the factory directly
or indirectly.

Section 39
It obligates the factory occupier to contribute to the ESI fund. This contribution
includes Employer's share as well as Employee's share.

Section 46
This section details the benefits that Employees' state insurance provides. This
includes sickness, maternity, disability, medical, dependent, and funeral benefits.

Q. What do you understand by Collective Bargaining? Write down the


bargaining process. What are its benefits?

Collective Bargaining is a term adopted for the negotiation process between


workers, represent by a Union such as a Trade Union, and their employer,
represented by the management, for issues related to the terms and conditions of
their employment.such as wages, working hours, benefits, and workload. An
agreement arrived at by this negotiation process is called as Collective Bargaining
Agreement (CBA) or Collective Employment Agreement (CEA).
Practically, a worker and his employer are not on an equal footing because of the
financial power of the employer and as such, it is extremely difficult, if not
impossible, for a single worker to pressure his employer to provide equitable
benefits for his work. Historically, this has proven to be the main cause of
dissatisfaction among workers, resulting in decreased productivity, and poor
condition of workers. The objective of collective bargaining is to mitigate the
disadvantage of economic disparity between the worker and the employer by
bargaining with the employer collectively instead of individually.
Approaches to Collective Bargaining

1. Traditional or Positional or Adversarial or Distributional or Win-Lose


Bargaining - In this type of bargaining both the parties, i.e. the union and the
management, come out with their own agenda with little or no understanding of
each others problems. The process mostly involves a give and take type of
negotiation. This is the most common type of collective bargaining and is used all
over the world.

2. Principled or Mutual Gains or Integrative or Win-Win Bargaining - In this


type of bargaining both the parties understand the issues involved and they
approach it to solve the problems jointly. Thus, an equitable solution without any
acrimony can be found. This process works when there is not much disparity
between the education level of both the parties, such as in IT industry.

The principle of collective bargaining is recognized by International Labor


Organization (ILO) as well.

Bargaining Process

1. The process starts with the workers uniting to form an association in the
form of a Trade Union.
In the case of Workers of B and C Co vs Labour Commissioner, AIR
1964 Mad it was held that a Trade Union can raise or sponsor a trade
dispute and represent on behalf of its members in legal proceedings arising
out of a trade dispute.
2. Trade Union of registered and gets the power to represent the issues of the
workers. Though it is not necessary for a TU to be registered. In the same
case mentioned above, it was also held that an unregistered Trade Union that
has the support of the majority of the workers has a better claim to
negotiation than a recognized trade union that does not have majority
support.
3. The members of the trade union adopt a resolution to authorize the Trade
Union to represent them and put their issues across to the management.
4. Employer recognizes the Trade Union and gets ready to discuss the issues
with the Trade Union representatives.
5. The union representatives put their list of demands to the management
and the management discusses those with the representatives.
6. After a give and take either a mutually agreeable solution is found or
pressurizing tactics such as strike or lock-out are adopted.
7. If no solution is found, the matter could be referred to arbitration. If the
solution is found, it is implemented and the process ends.

Benefits of Collective Bargaining

Benefits for Workers

1. It provides uniformity and equality in conditions of labor for all laborers.


2. It ensures progress of workers and increases their importance and respect.
3. It prevents arbitrariness by owners regarding working conditions.
4. It preserves personal interest of workers.
5. It promotes welfare of workers.
6. A worker does not feel alone and helpless, on the contrary, he feels
powerful.
7. It provides a check on employers and inspectors.

Benefits for Employers

1. It is cheaper, easier, and safer option.


2. It saves time and it benefits all the parties equally.
3. Compromises reached by this process are not only applicable to the parties
but also to those who are not a party.
4. Upon success of collective bargaining, industrial peace prevails and mutual
understanding and production increases.
5. Compromises done through collective bargaining are binding on all the
parties.

Benefits in General

1. Helps in satisfactory solution of problems and allows old customs and


traditions.
2. It reduces tension in parties and establishes a tradition of industrial peace.
3. It has been proved helpful in bringing social change.
4. Upon failure of the process, no party is insulted or hurt.
5. In the case of Virundhachalam vs Management, Lotus Ltd, Lord
Roland said that it ends the arbitrariness of inspectors by preventing them
from becoming legal kings.

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