Industrial Dispute Act, 1947 – Notes


Before the Industrial Dispute Act, there was no machinery to solve the dispute. The whole system was based on the common law and according to common law, dispute solved according to the contract between the parties. Therefore, the Common Law system does not apply to the industrial system. Hence, Industrial Dispute Act, 1947 was passed to meet the needs which were based on socialistic law. This act is for social welfare.

Objectives and Scope of The Industrial Dispute Act, 1947:

  1. The promotion of measure for securing amity and good relationship between the employer and workmen.
  2. An investigation and settlement of the industrial dispute between employers and employers, employers and workmen or workmen and workmen with the right of a presentation by a registered trade union.
  3. Prevention of illegal strikes and lock-outs.
  4. Relief to workmen in the matter of lay-off, retrenchment and closure of undertaking.
  5. Collecting bargaining.
  6. To achieve industrial peace, harmony, good relations, and economic justice. For this, machinery was provided called Workers committee, which discusses the issues of common interest, to maintain co-operation, accommodation, mutual trust, etc. But this machinery was not functioning. This objective suffers from idealism. It is not practically reliable because there is always a clash between the interests of the two.
  7. To fulfil the industrial needs like work as a unit, mutual trust and tolerance.
  8. Cooperation between employer and employee. They must develop the spirit to work together and help one another.
  9. The protect the democratic right of strike and lock-out.
  10. To provide effective, easy mechanism, efficient, speedy and professionalise for the settlement of the industrial dispute. 3 types of Machinery: Conciliation, Adjudication and Voluntary arbitration.
  11. Protection of Trade Union’s right.
  12. To regulate lay-off and retrenchment.
  13. Production and productivity should be regulated.
  14. To provide social justice:

    • It has big and transforaminal objectives. It is the mechanism of striking balance between conflicting interest or competing interest with a minimum of waste.
    • According to Lincoln, ‘Social Justice does not mean to make the rich poor or vice versa but to balance the interest of both.’ The objective of IDA,1947 that to establish a machinery for the protection of rights, but because of common law, which decided cases on the contractualism concept, does not provide justice to the worker so the objective is that the case will be decided on the basis of socialistic law.
    • Social justice provides compensation to workers who are in trouble. In industries, employers want maximum profits and returns and employees want maximum wages on least work.

     15. To protect the employee:

    • Compensation should be paid to the person who will be terminated so one can carry on the expenses of his family.
    • In future, if there is any vacancy, then terminated worker will be appointed.
    • Social justice tells in the situation what is the more appropriate action.
    • Social justice is different from legalistic justice. It observes surroundings and circumstances, moral statute, human values, but all those things are not observed in legalistic justice.
    • Contractualism concept of social justice is necessary for the smooth functioning of society as well as for the economic system.

Main features of The Industrial Dispute Act:

  1. Strike and lock-outs are prohibited during the pendency of conciliation, adjudication settlement preceding.
  2. Any industrial dispute may be referred to an industrial tribunal by an agreement of parties to dispute or by State Government.
  3. An award shall be binding on both the parties to the dispute for a specified period not exceeding one year enforced by the government.
  4. In public interest or emergency, the appropriate government has the power to declare the transport, coal, iron and steel industry to be public utility services for the purpose of The Industrial Dispute Act, for a maximum period of six months.
  5. In case of lay off or retrenchment of workmen, the employer is required to pay compensation.
  6. Provision has also been made for payment of compensation to workmen.
  7. A number of authorities such as works committee, Conciliation Officer, Board of Conciliation, Labour court, Tribunal are provided for settlement of industrial disputes.

Work Committee:

It consists of representatives of employers and workmen constituted by democratic principles. It works for serving amity and good relations and co-operation. It discusses matters of common interests.

Functions of The Industrial Dispute Act:

  1. Aspires for co-operation and good relation among employer and employees.
  2. Constructed by the representatives of employer and employees by democratic pattern.
  3. To provide a piece of effective machinery for the settlement of the industrial dispute. There are 3 types of machinery:
    • Conciliation
    • Adjudication
    • Voluntary arbitration
  4.  During the post-independence era, we have witnessed the development of a new jurisprudence, namely ‘Industrial Law’.
  5. The economic growth of the country depends upon the industrial development.
  6. Industrial Law plays an important role in the national economy of a country.

Section 2: Definition:

(a). Appropriate Government: The Central Government, as well as the State Government, are vested with various powers and the duties in relation to matter dealt with this act. In relation to some industrial disputes the Central Government and in relation to some other the State Government concerned are appropriate government to deal with such dispute. The appropriate government shall be the Central Government or the State Government, which has control over such industrial establishment.

(aa). Arbitrator: Arbitrator includes an umpire.

(aaa). Average Pay: It means the average of the wages payable to workmen.

(b). Award: ‘Award’ the definition falls in two parts. The first part covers a determination, final or interim, of an industrial dispute. The second part takes in the determination of any question relating to an industrial dispute.

Enforcement of Award:

    1. The aggrieved party may apply to the appropriate government for prosecuting the defaulting party under Section 29 and Section 31.
    2. Where any money is payable by the employer to workmen, the workmen may move the appropriate government for recovery of the money due to him under the award.
    3. The party in whose favour the award has been granted may file a suit and obtain a degree.

(bb). Banking Company: Section 5 of Banking Companies act defines a banking company as any bank which transacts the business of banking in India.

Two conditions are necessary:

    1. It must be a banking company as defined above.
    2. It must have branches or another establishment in more than one state of India.

(c). Board: It means a Board of Conciliation constituted under this act. Instead of using a large expression a single word denoting the same meaning as Board of Conciliation has been used.

(cc). Closure: It means the permanent closing down of a place of employment or part thereof.

(d). Conciliation Officer means a conciliation officer appointed under this act.

(e). Conciliation Proceeding: means any proceeding held by conciliation officer or Board under this act.

(ee). Controlled Industry: It means any industry the control of which by the union has been declared by any central act to be expedient in the public interest.

(f). Court: means a court of inquiry constituted under this act.

(g). Employer: Section 2(g) of the act states the meaning of the word ‘employer’ in relation to industries carried on by or under the authority.

(gg). Executive: Executive in relation to a trade union means the body by whatever name called; to which the management of the affair of the trade union entrusted.

(i). Independent: Section 2(i) of The Industrial Dispute Act gives the meaning of the word independent for the purpose of appointment of a person as the chairman or another member of a Board, Court or Tribunal.

(j). Industry: means any business, trade, undertaking manufacture or calling of employer and includes any calling, service, employment or avocation of workmen.

Triple Test: where there is (i) systematic activity, (ii) organised by co-operation between employer and employee, (iii) for the production of goods and services calculated to satisfy human want and wishes, there is an industry is that enterprise. This is a Triple Test.

The amended definition of Industry: Any systematic activity carried on by co-operation between an employer and his workmen for the production, supply or distribution of goods or service with a view to satisfying human want.

(k). Industrial Dispute: The preamble is to make provision for the investigation and settlement of Industrial Dispute.

  1. A dispute or difference between (a) employers and employers, (b) employers and workmen, (c) workmen and workmen.
  2. The dispute or difference should be connected with (a) employment or non-employment (b) terms of employment (c) conditions of labour of any person.
  3. The dispute may be in relation to any workmen or any other person in whom they are interested as a body.

(kk). Insurance Company: Section 2(kk) essential:

  1. It should be an insurance company as defined in section 2 of the Insurance Act.
  2. It should have branches or another establishment in more than one state.

(kka). Khadi: has the meaning assigned to it in clause (d) of Sec.-2 of Khadi and Village industries commission act, 1956.

(kkb). Labour Court: means the labour court constituted under Section 7 of the Industrial Dispute Act, 1947.

(kkk). Lay-off: Salient feature of lay-off:

    1. An employer, who is willing to employ, fails or refuse or is unable to provide employment for reason beyond his control.
    2. Any such failure or refusal to employ workmen may be on account of:
    3. Shortage of coal, power or raw material
    4. The accumulation of stock;
    5. The breakdown of machinery;
    6. Natural calamity.
    7. Work must not have been retrenched.

Meaning of Lay-off: means putting aside workmen temporarily. The duration of lay-off is not for a period longer than a period of emergency.

(l). Lock-out: means the closing of a place of employment, or the suspension of work, or the refusal by an employer to continue to employ any number of person employed by him.

Four Ingredients:

    1. a) Temporary closing of a place of employment by the employer.
    2. b) Suspension of work by the employer.
    3. c) Refusal by an employer to continue to employ any number of persons employed by him.
    4. Above mentioned acts of the employer should be motivated by coercion.
    5. An industry is defined in the act.
    6. A dispute in such industry.

Difference between Lock-out and Lay-off:

    1. Lock-out is an act on the part of the employer taken to coerce or pressurise the labour, Lay-off is for trade reason beyond the control of the employer.
    2. Lock-out is due to an industrial dispute and continues during the period of dispute, Lay-off is not concerned with a dispute with the workmen.

Difference between Lock-out and retrenchment:

    1. Lock-out is temporary, retrenchment is permanent.
    2. In lock-out, the relationship of employer and employee is only suspended, it does not come to an end, in retrenchment such a relationship is served at the instance of the employer.
    3. Lock-out is with a motive to coerce the workmen, the intention of retrenchment is to dispense with surplus labour.
    4. Lock-out is due to and during an industrial dispute, whereas, in the case of retrenchment, there is no such dispute.

(la). Major port: means “any port which the Central Government may by notification in the official Gazette declare, or may by any law for the time being in force have declared to be a major port”.

(lb). Mine: means any excavation where any operation for the purpose of searching for or obtaining mineral.

(ll). National Tribunal: means a national industrial tribunal constituted under section 7-B.

(lll). Office Bearer: in relation to a trade union include any member of the executive, but not include an auditor.

(m). Prescribed: means prescribed by rules made under The Industrial Dispute Act.

(n). Public utility service:

    1. Any railway services.
    2. Any transport service for carriage of passengers.
    3. Any postal, telegraph or telephone services.
    4. Any industries which supply power, light and water to the public.
    5. Any system of public conservancy or sanitation.

(o). Railway Company: means a railway company as defined in section 3(4) of the Indian Railway Act as follow:

Railway means a railway or any portion of the railway for the public carriage of passenger, animal or goods are included:

    1. All stations, offices, warehouses, workshops, fixed plant and machinery and other works constructed for the purpose in connection with the railway.
    2. All lines of rails, siding or branches worked over for the purpose of or in connection with railways.

(oo). Retrenchment: means the termination by the employer of the service of workmen, the termination may be for any reason. But the termination should not be a measure of punishment by way of disciplinary action.

(p). Settlement: arrived at in the course of a conciliation proceeding and the second is a written agreement between employer and workmen arrived at otherwise than in the course of conciliation proceeding.

(q). Strike:  

    1. Cessation of work by a body of a person employed in any industry acting in combination.
    2. A concerted refusal of any number of persons who are or have been employed in any industry to continue to work or to accept employment.
    3. A refusal under a common understanding of any number of persons who are or have been employed in the industry to continue to work.

Kinds of Strike:

    1. General Strike: A general strike is one where the workmen join together for common cause stay away from work, depriving the employers of their labour needed to run his factory.
    • The general strike is for a longer period.
    • It is generally resorted to when employees fail to achieve their object by other means including a token strike which generally precedes a general strike.
    1. Stay-in-strike: It is also known as ‘tools-down-strike’ or ‘pens-down-strike’. It is that form of strike where the workmen report to their duties, occupy the premises but do not work.
    2. Go-slow: The workmen do not stay away from work, they do come to their work and work also but with slow speed in order to lower down the production and thereby cause loss to the employer.

Sympathetic Strike: It aims to encourage or extend moral support to or indirectly to aid the striking workmen.

Hunger Strike: Group of workmen resort to fasting on or near the place of work or the residence of the employer with a view to coerce the employer to accept their demands.

Work to Rule: Strictly adhere to the rules while performing their duties which ordinarily they do not observe.

(qq). Trade Union: means trade union registered under the Trade Union Act, 1926.

(r). Tribunal: Section 2(r) of The Industrial Dispute Act states that the ‘Tribunal’ means an industrial tribunal constituted under Sec.-7 A of the act.

(ra). Unfair Labour Practice: means any of the practice specified in the fifth schedule.

(rb). Village Industries: assigned in clause (h) of Sec.-2 of Khadi and Village Industries Commission Act, 1956.

(rr). Wages: means all remuneration capable of being expressed in terms of money, which would if the term of employment, expressed or implied were fulfilled, be payable to a workman in respect of his employment or of work done in such employment.

    • Proper Wages
    • Overtime
    • Bonus: It is a kind of cash payment in addition to wages. Demand for bonus two conditions must be satisfied; (a) the wages fell short of the living standard, and (b) the industry made a huge profit due to the joint contribution of the capital and labour.

    (s). Workman: means any person employed in any industry to do any manual, unskilled, skilled, technical or supervisory work for hire or reward, whether the term of employment is express or implied and for the purpose of any proceeding under The Industrial Dispute Act.

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