Effectiveness of ID Machinery in India

Flow of the Presentation

Note on Industrial Disputes Act , 1947 Machinery to settle disputes Central Industrial Relations Machinery International Perspective Legal Cases and Disputes under IDA Drawbacks, Improvements and Recommendations

Industrial Disputes Act 1947

Object of the Act
To promote peace and good relations in Industry To investigate and settle disputes
Between employers and workers Between workers Between employers

To prevent illegal strikes and lockouts To give relief to workers in case of lay-off and retrenchment To promote collective bargaining

Important terms in ID law (1/3)

Industry
Who can form the trade unions?
In the case of the Central Machine Tools Institute, Bangalore (1978), it was held that employees of any establishment falling with in the meaning of the term Industry under the ID act is presumed to be trade and industry under the trade unions act, are entitled to form a trade union

Definition as per section 2(j)

any business, trade, undertakings, manufacture or calling by employers and includes any calling or service, employment, handicraft or industrial occupation or avocation of workmen

Important terms in ID law (2/3)

Workman
Who can raise an industrial dispute?
A worker
Apprentices are also workmen Members of armed forces, civil personnel including in police or prison services and managerial and supervisory personnel earning more than Rs 1600 p.m. are not considered as workmen

Definition
a worker is any person employed in industry to do manual, clerical or technical work. His work may be skilled or unskilled. He may work for a remuneration or reward. His terms of employment may be either clearly stated or merely implied.

Important terms in ID law (3/3)

Industrial Dispute
What is an industrial dispute?
Any dispute is an industrial dispute if
It is between employer and employee/worker and worker/ or employer and employer It is connected with the employment/non employment/terms of employment or conditions of employment of any person

An industrial dispute may be individual or collective dispute

An individual dispute becomes an industrial dispute in case of
Termination (whether dismissal, discharge or retrenchment) It is taken up by a union or by a significant number of workers who have direct interest in the dispute

Does the law work to strengthen Trade Unionism?

No The law encourages dependence on a third party, especially the Government The law is so complex that only trained professionals like lawyers can interpret it The government retains a great deal of power under the act. It has the right to decide whether a dispute should go before a court The law stresses on individual more than collective rights

Machinery for settling Disputes

The Act provides four procedures for preventing, investigating and settling disputes 1. Works committee 2. Conciliation 3. Adjudication 4. Voluntary adjudication and voluntary arbitration

1. Works Committee
Expected to prevent disputes Handles issues related to amenities (canteen, drinking water,

rest rooms), recreation, medical services, health and safety

Do not have the power to enforce decisions

2.

Conciliation (1/2)

Third party, usually a government officer (not a judicial officer), mediates in dispute Either labour or management can seek his intervention. He

may intervene on his own in the case of public utilities

The officer does not have the power to make a final order. He can only persuade the parties to settle the differences

2. Conciliation (2/2)
Conciliation ends when a settlement is signed/failure report is submitted/ or the dispute is referred for adjudication No lawyer is allowed in conciliation

3. Adjudication (1/4)
This a judicial process where the dispute is sent to a labour court or industrial tribunal for decision which is binding unless set aside or modified by a higher

court
Being a higher court, a tribunal can consider any

issue coming within the power of a labour court

3. Adjudication (2/4)
A labour court is competent to consider disputes over the following issues
1. Interpretation and application of standing orders 2. Discharge and dismissal of workers and grant of relief to them 3. Withdrawal of customary privileges 4. The legality of strikes and lockouts 5. Other matters not coming with in the sphere of industrial tribunals

3. Adjudication (3/4)
Industrial tribunals are concerned over the following issues
1. 2. 3. 4. 5. 6. 7. 8. 9. Wages and allowances Hours of work and rest intervals Leave and holidays Bonus, provident fund and gratuity Changes in shift hours not mentioned in standing orders Grades Rules of discipline Rationalization Retrenchment and closure

3. Adjudication (4/4)
National tribunal
to adjudicate disputes which involve industries in more than one state A dispute which the government considers to be of national importance

A party dissatisfied by the award can file a writ in the high court (Const. Art 226) or go to the supreme court (Const. Art 136)

4. Voluntary adjudication/arbitration
The parties can together request the government to refer their dispute for adjudication The parties to the dispute can also refer their dispute voluntarily for arbitration An arbitrators award is binding and final which cannot be appealed against Voluntary arbitration is extremely rare in India

Amendments in Industrial Disputes Act (1947)

Amplification

of

the

definition

of

the

Appropriate

Government It is further clarified that Central Government would be appropriate government for any company in which more than 51 percent of the paid up share is held by the Central Government, or any corporation, established by or under any law laid by the Parliament
Enhancement of wage ceiling in the definition of workers: The wage ceiling limit in the definition of workmen under Section 2(s) (iv) of ID Act 1947 has been enhanced from Rs. 1600 per month to Rs. 10000 per month.

Industrial Tribunals will be connected to disputes relating to

Termination/Dismissal/Retrenchment/Discharge In cases of retrenchment, discharge, dismissal or termination of services, the

workman can directly apply to Labour Courts/Tribunals after expiry of 45 days

(within 3 years) from the date he has made the application for reinstatement to the conciliation officer.

A new chapter will be substituted for Chapter IIB titled as Grievance

Redressal Machinery Eligibility of qualification of Presiding Officers

Changes in salaries and other terms and conditions of Presiding Officer

Strikes and Lockouts

Definition : Section 2(q) of the ID act defines the strike as a cessation of work by a body of persons acting in combination or a refusal under a common understanding to work. General prohibitions: Workers cannot strike under the following conditions 1. When conciliation is continuing and for 7 days after it has ended 2. When adjudication or arbitration is continuing and for 2 months after it has ended 3. In public utilities a 14 day notices is required Legality of strikes: Three questions have to be answered to decide whether a strike is justified 1. Is it motivated by demands unconnected with the grievances of workers 2. Is it unnecessarily prolonged 3. Has there violence by workers? Have they tried to cause harm or damage?

Lockout
The ID act describes the lockout as temporary closure of the place of employment, or suspension of work, or refusal by the employer to employ persons employed by him

Some of the aspects of lockouts which are needed to be noted

1. 2. A lockout is legal if it results from an illegal strike The relationship of employer and employee continues to exits during the period of lockout

Other Labour Laws

(to be read along with Industrial Disputes Act)
The Industrial Disputes Act, 1947 and Rules made there under. The Industrial Employment (Standing Orders) Act, 1946 and Rules made thereunder. The Contract Labour (Regulations & Abolition) Act, 1970 and Rules made thereunder. Payment of Wages Act, 1936 in relation to Railways, Mines, and Air Transport Services and (in the major Ports as Authorized by respective State Government) and Central Rules made In respect of above industries. The Minimum Wages Act, 1948 and Minimum Wages (Central Rules), 1950. The Payment of Bonus Act, 1965 and Rules made thereunder. Chapter VI A of the Indian Railways Act, 1989 (Hours of Employment Regulations). The Child Labour (P&R) Act, 1986 and Rules made thereunder. The Payment of Gratuity Act, 1972 and Rules made thereunder. The Equal Remuneration Act, 1976 and the Rules made thereunder. The Maternity Benefits Act, 1961 (in Circus Industry only). The Inter-State Migrant Workmen (Regulation of Employment and Conduit ons of Service) Act, 1979 and the Rules made thereunder. Labour Laws (Exemption from furnishing Returns and maintaining registers by certain Establishments) Act, 1988. Building and other Construction Workers' (Regulation of Employment and Conditions of Service) Act, 1996.

Central Industrial Relations Machinery (CIRM)

The Organization of the Chief Labour Commissioner (C)) known as Central Industrial Relations Machinery was set up in April, 1945

It was then charged mainly with duties of prevention and settlement of

industrial disputes, enforcement of labour laws and to promote welfare of

workers in the undertakings falling within the sphere of the Central

Government

Organizational Structure of CIRM

CIRM is headed by the Chief Labour Commissioner (Central)[ CLC (C) ] At the headquarters, CIRM has a complement of 25 officers who perform line and staff functions.

In the field, the machinery has a complement of 253 officers and their
establishments are spread over different parts of the country with zonal, regional and unit level formations

Objectives of the CLC(C)s Organization

Promotion of peaceful and harmonious Industrial Relations in the Central Sphere through prevention & settlement of I.Ds. in the Industries for which Central Govt. is the appropriate Govt. Verification of the Trade Union's Membership. Enforcement of labour laws in central sphere.

Specific Functions of CIRM

Prevention and settlement of industrial disputes; Enforcement of Labour Laws; Verification of membership of Trade Unions; Enforcement of Awards and Settlements; Conduct of inquiries into the breaches of Code of Discipline;

Promotion of Works Committees and Workers' Participation in Management;

Collection of statistical information;

International Perspective: Points of Comparison

Technically, a Industrial dispute is a disagreement over a particular issue or group of issues in which there is conflict between workers and employers, or it can be a grievance expressed by workers and employers

Design of Dispute Resolution Mechanisms

The modes of dispute resolution that are practised in all these countries are dialogue and negotiation (with grievance handling in some countries), conciliation and mediation, arbitration and court adjudication

Hypothetical Model: Modes of Dispute Resolution

Core Labour Standards

ILO specified legal rights in the form of human, social and economic rights, there emerged another special classification called Fundamental Principles and Rights at Work, also known as core labour standards There are eight such core standards, two each on organizational rights, forced labour, non-discrimination and child labour Convention No. 87 on freedom of association and protection of the right to organize Convention No. 98 on the right to organize and collective bargaining Convention No. 29 on prison labour Convention No. 105 on forced labour Convention No. 100 on equal remuneration Convention No. 111 on discrimination in employment and occupation Convention No. 138 on the minimum age for admission to employment Convention No. 182 on elimination of the worst forms of child labour

 The following table shows the ratification status of these Conventions, including the year they were ratified, among the nine countries

C 87

C 98

C 29

C 105

C 100

C 111

C 138

C 182

Australia China India Japan Republic of Korea Malaysia

Yes (1973) No No Yes (1965) No No

Yes (1973) Yes (1960) No No No

Yes (1960) Yes (1974) Yes (1973) No No

No

Yes (1990) Yes (2006) Yes (1999) Yes (2002) No

Yes (1954) Yes (2000) Yes (1958) Yes (1960) No Yes (1967) No

Yes (1953) Yes (1932) No No No No

Yes (2000) Yes (2001)

Yes (1997) Yes (1998) Yes (1999) Yes (2001) Yes (1997) No Yes (1997) Yes (2000)

Yes (1961) Yes (1957) Den. (1990)

Philippines Yes (1953) Yes (1953) Yes (2005) Yes (1960) Yes (1953) Yes (1960) Yes (1998) Yes (2000)
Thailand Viet Nam
No No No No Yes (1969) Yes (1969) Yes (1999) No Yes (2007) No Yes (2004) Yes (2001)

Yes (1997) Yes (1997) Yes (2003) Yes (2000)

 In India, according to the Industrial Disputes Act (1947), industrial dispute means any disagreement or difference between employers and employers, between employers and workers, or between workers and workers, which is connected with the employment or non-employment or the terms of employment or with the conditions of labour, of any person. In Japan, according to the Labour Relations Law (1946 and 1988), a labour dispute means a disagreement over claims regarding labour relations, arising between the parties concerned with labour relations. In China, according to the Regulations on the Settlement of Labour Disputes in Enterprises (1993), labour disputes pertain to all those arising out of dismissal, discharge or a lay-off of workers and employees and the resignation of workers and employees; those concerning implementation of relevant state policies on wages, insurance, welfare, training and labour protection.

 South Korea : Trade Union and Labour Relations Adjustment Act (1997)

Malaysia : Industrial Relations Act (1967)

Strikes and lockouts in selected countries 19952006

Legal Cases

Bharat Bhawan Trust Vs. Bharat Bhawan Artists Association

Artists filed a case accusing trust violates ID act Trust argued that it can not be considered as an Industry Court ruled in favor of the trust observing The work they do is creative artCan by no stretch of imagination be termed as workman

Recent Cases
G.M. Ongc, Shilchar vs Ongc Contractual Workers Union on 16 May, 2008

The Union raised a dispute demanding the regularization of the services of its

members. This demand was resisted by the ONGC and on the failure of conciliation
proceedings, the State Government made a reference to the Industrial Tribunal. Tribunal awarded their services be regularized in a phased manner with pay and

other allowances
ONGC appealed before High Court which restored the award given by tribunal.

Illegal Strike of Jet Airways Pilots

Mass sick leave by the Jet Airways pilots

Supreme Court judgments do recognise mass leave as being a concerted

action of absenteeism, which amounts to a strike

Under the Industrial Disputes Act (IDA), any strike without giving notice while

conciliation proceedings are on is illegal and hence prohibited.

A union also cannot legally go on strike within seven days of the conclusion of conciliation proceedings.

Mumbai High Court holds that the strike called by Jet Airways pilots is illegal

Recent Relevance
Lockout of Manesar Plant of Maruti Suzuki

The New Trade Union Initiative (NTUI) condemned government actions

and demanded Haryana Labour department to 1. Immediately declare the lockout at the Maruti Suzuki India Ltd.s Manesar Plant to be illegal under the Industrial Disputes Act, 1947 2.Initiate prosecution proceedings against management of Maruti Suzuki India Ltd. for indulging in unfair labour practices under Section 25

(t) and (u) of the Industrial Disputes Act, 1947

INFORMATION REGARDING STRIKES AND LOCKOUTS INDUSTRIAL DISPUTES ACT, 1947

Year No. of Strikes No. of Workers Man Days Lost 1 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2 181 146 134 138 106 99 129 126 112 101 62 45 42 3 28,462 32,845 19,778 20,959 27,022 35,922 27,318 22,747 13,800 12,678 13,014 8,123 4 4,38,939 3,54,143 2,15,114 3,67,119 3,69,323 3,33,178 5,75,253 4,05,870 2,12,252 1,31,373 1,90,185 58,633 5 27 21 26 15 8 16 17 24 18 11 9 8 8 6 4,456 6,493 9,767 3,269 1,734 4,889 6,083 11,162 6,237 4,474 3,952 1,231 1,671 No. of Lock outs No. of Workers Man Days Lost 7 3,16,000 2,97,202 2,26,594 3,45,465 2,85,066 4,77,281 3,12,354 4,93,227 2,30,108 1,33,046 86,390 33,947 28,197 8 208 167 160 153 114 115 146 150 130 112 71 53 50 9 32,918 39,338 29,545 24,228 28,756 40,811 1,26,393 38,480 28,984 18,574 16,630 14,245 9,794 10 7,54,939 6,51,345 4,41,708 7,12,584 6,54,389 8,10,459 18,32,952 10,68,480 6,35,978 3,45,298 2,17,763 2,24,132 86,830 STRIKES LOCKOUTS No. of Strikes Lock-outs No. of Workers Affected ManDays Lost in Strikes Lockouts

(COL.2+5) (COL.3+6)

1,20,310 15,20,598

2003
2004 2005 2006 2007 (P)

34
29 23 16 23

5,874
2,970 7,280 4,703 5,237

40,534
38,005 96,668 64,095 67,621

8
7 5 4 1

2,104
3,195 292 3,302 72

81,564
1,04,171 22,163 39,406 19,830

42
36 28 20 24

7,978
6,165 7,572 8,005 5,309

1,22,098
1,42,176 1,18,831 1,03,501 87,451

Selected State-wise Number of Case Under Industrial Disputes Act, 1947 Pending in Central Government Industrial Tribunal-Labour Courts in India
(As on 30th June, 2004) Name of Central Government Industrial Tribunal Cum-Labour Courts Mumbai No. 1 $ Mumbai No. 2 Nagpur Dhanbad No. 1 Dhanbad No. 2 Jabalpur Kanpur New Delhi No. 1 New Delhi No. 2 Asansol Kolkata $ Chandigarh No. 1 Chandigarh No. 2* Jaipur Lucknow Bangalore Ernakulam* Chennai Hyderabad Bhubaneswar Guwahati* Ahmedabad* Pendency Cases 441 699 500 2226 1103 1555 694 566 545 454 199 2254 Nil 200 396 527 Nil 582 641 408 Nil 1377 Application 76 366 Nil 390 93 650 483 180 131 89 129 308 Nil 61 41 157 Nil 20 1206 104 Nil 1191

CASES OF REFERENCE UNDER SECTION - 10 (1)

OF THE INDUSTRIAL DISPUTES ACT, 1947

Pending at the Year 1 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 (June) beginning of the year 2 1,932 2,130 2,406 2,387 3,115 3,049 2,056 2,705 2,448 2,642 2,791 2,656 1,860 2,234 1,481 1,773 1,310 1,165 1,343

Received during the year 3 15,934 15,413 15,675 15,286 12,975 13,582 12,926 14,129 16,141 14,506 14,985 12,048 10,689 9,628 9,274 8,717 7,051 6,777 2,999 4 17,866 17,543 18,081 17,673 16,090 16,631 14,982 16,834 18,589 17,148 17,776 14,704 12,549 11,862 10,755 10,490 8,361 7,882 4,342 Total

Total Disposed off 10 15,736 15,137 15,694 14,558 13,041 14,575 12,277 14,386 15,947 14,357 15,120 12,844 10,315 10,381 8,982 9,180 7,256 6,439 3,515

Pending at the end of the year 11 2,130 2,406 2,387 3,115 3,049 2,056 2,705 2,448 2,642 2,791 2,656 1,860 2,234 1,481 1,773 1,310 1,105 1,343 827

Total Legal cases pending at the end of the year

3,500

3,000

2,500

2,000

1,500 Pending at the end of the year 1,000

500

Since number of cases filed in a year under IDA are decreasing and cases disposed off by the court are increasing, total pending cases are on decline.

Reforms Sought in ID Act

Need to review the industrial disputes resolution system due to adoption

of economic liberalisation policy

The government should be careful about being too rigid about labour laws as this might hamper the growth requirements and act as a constraint.

It also has to ensure that the compensations made available to the labour
are just and equitable. Speedy implementation of the second National Labour Commissions

recommendations.

Measures to Increase Effectiveness

Stronger works committee through continuous dialogue between

employers and employees to prevent disputes Encourage voluntary arbitration rather than dispute resolution through adjudication Limited political influence More focus on collective rights than individual Introduction of permanent grievance machinery

Major Problems
(Based on The Indian Industrial Relations System: Trying to

understand the dynamics of a globalizing economy Dr. Elisabeth Hill,

University of Sydney, Sage Publications, 2009) Core: The main architecture of IR in India dates back to before independence and is mostly unchanged. It is highly centralized, and the state remains the main mediator between capital and labour. Massive unorganized workforce, demographic and gender issues, the structure of Indias labour market itself give rise to core problems.

Excessive State Intervention

The government decides what is and what is not a dispute, has full discretionary powers over how the dispute can be solved, and the dispute cant go to court until the government deems it illegal. (Individual grievances are another matter) The National Commission for Labour suggested creating an Industrial Relations Commission (IRC) to recognize unions, manage dispute resolution and settlement processes as far back as 1969, to no avail.

Union Recognition Issues

Neither the 1947 Industrial Disputes Act nor the 1926 Trade Unions Act have any provisions for the clear recognition of a union as the collective bargaining agent on behalf of the workers. At present, unions remain strongly tied to political parties, and this politicization means that disputes are settled on a political basis rather than via collective bargaining and negotiation.

Loophole Abuse
Employers are concerned about employment security vs flexibility and global competitiveness Legal contract labour license hard to get, too many bureaucratic regulations All manner of loopholes subcontracting key processes via intermediates, making employees work unregistered, fake designations, as well as more forceful methods such as lock-outs to deny employees their legal status

Nothing in the existing Industrial Dispute process can take care of a

dispute that is quashed even before it has begun

Historic Causes of present ID scenario

The establishment of five-year plans and a more socialistic approach meant that the state took on the role of a mediator

between capital and labour.

Events worsened by political and economic issues in the 1970s. During the 1975-77 emergency, the Industrial Disputes Act was

amended so that employers employing over 300 people had to seek

government permission before retrenching workers.

 Unions in successful industries now focused on collective

bargaining, while those in struggling ones had to resort to the centralized system based on universal rights, creating a fragmented labour movement and bargaining, differences in wages and work conditions between public and private sectors. (Bombay textile mill strike, 1982) 1982- companies requiring 100 people or more needed government permission to lay off/retrench workers employment security, but no bargaining agent/ state level IR tribunals.

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