The Industrial Dispute Act , 1947

LABOUR LAWS

COURSE MATERIALS

THE INDUSTRIAL DISPUTE ACT , 1947

[Act No. 14 of 19471 as Amended by Acts of 1949, 1950, 1951, 1952, 1953, 1954, 1956, 1957, 1959, 1961, 1963, 1964, 36 of 1964 2 , 1965, 1968, 1970, 45 of 1971 3 , 1972, 1975, 1976, 32 of 1982 4 , 49 of 1984 5 , 62 of 1984, 1987, 1989 and A. Os. Of 1948 and 1950]

(Act No. 14 of 1947)

[11th March 1947]

An Act to make provisions for the investigation and settlement of Industrial Disputes, and for certain other purposes.

Whereas it is expedient to make provisions for the investigation and settlement of industrial disputes, and for certain other purposes hereinafter appearing ;

It is hereby enacted as follows :

Statement of Objects and Reasons – See Gazette of India, 1946, Part V at pages 239 and 240. The Statement of Objects and Reasons appended to the Industrial Disputes Bill as follows : -

“Experience of the working of Trade Disputes Act, 1929 has revealed that its main defect is that while restrictions have been imposed on the rights of strike and lock-out in public utility services no provision has been made to render the proceedings institutable under the Act for the settlement of an industrial dispute, either by reference to a Board of Conciliation or to a Court of Inquiry, conclusive and binding on the parties to the dispute. This defect was overcome during the war by empowering under Rule 81-A of the Defence of India Rules, the Central Government to refer industrial disputes to adjudicator and to enforce their awards. Rule 81-A, which was to lapse on the 1st October 1946, is being kept in force by the Emergency Powers (Continuance) Ordinance 1946, for a further period of six months: and as industrial unrest is checking which this rule has proved useful , is gaining momentum due to the stress of post –industrial re-adjustment, the need of permanent legislation in replacement of this rule is self-evident. This Bill embodies the essential principles of Rule 81-A which have proved generally acceptable to both employers and workmen, retaining intact, for

1.  For Statement of Objects and Reasons see Gazette of India, 1946, Pt. V. pp. 239-240; for Report of Select Committee, see ibid., 1947, Pt. V, pp-33-35.

2.  Act 36 of 1964 enforced w.e.f.10-12-1962, vide Noti. No. S.O.4301 of 18-12-1964.

3.  Act 45 of 1971 enforced w.e.f. 15-12-1971 vide S.O. 5500, dt. 14-12-1971.

4.  Ss 2(a), (a), (b) and (d) to (k); 3 to 6, 8 to 12, 14 to 21 and 23 of Act 46 of 1982 came into effect on 21-8-1984 vide S.O. 606(E) , dt. 21-8-1984.

5.  Came into effect on Aug. 18, 1984 vide S.O. 605(E) dt. 18-8-1984.

The most part, the provisions of the Trade Disputes Act, 1929. The two new institutions for the prevention and settlement of industrial disputes provided for the Bill are the Works Committees consisting of representatives of employers and workmen, Industrial Tribunal consisting of one or more members possessing qualifications ordinarily required for appointment as Judge of a High Court. Power has been given to appropriate Government to require works committees to be constitutes in every industrial establishment employing 100 workmen, or more and their duties will be to remove cause of friction between the employer and workmen in the day – to-day working of the establishment and to promote measures for securing amity and good relations between them. Industrial peace will be most enduring where it is founded on voluntary settlement, and it is hoped that the Works Committees will render recourse to the remaining machinery provided for in the Bill for the settlements of disputes in frequent. A reference to an Industrial Tribunal will lie where both the parties to an Industrial Dispute apply for such reference and also where the appropriate Government considers it expedient so to do. An award of a Tribunal may be enforced either wholly or in part by the appropriate Government for a period not exceeding one year. The power to refer disputes of Industrial Tribunals and enforce their awards in an essential corollary to the obligation that lies on the Government to secure conclusive determination of the disputes with a view to redressing the legitimate grievances of the parties thereto, such obligation arising from the imposition of restraints on the right of strike and lock-out, which must remain inviolate , except where considerations of public interest override such rights.

The Bill also seeks to re-orient the administration of the conciliation machinery provided in the Trade Disputes Act. Conciliation will be compulsory in all disputes in public utility services and optional in the case of other industrial establishment. With a view to expedite conciliation proceedings, time-limits have been prescribed for conclusion thereof – 14 days in the case of Conciliation Officers and two months in the case of Board of Conciliation from the date of notice of strike. A settlement arrived at in the course of conciliation proceedings will be binding for such period as may be agreed upon by the parties and where no period has been agreed upon, for a period of one year, and will continue to be binding until revoked by a 3 month’s notice by either party to the dispute.

Another important new feature of the Bill relates to the prohibition of strikes and lock-outs during the pendency of conciliation and adjudication proceedings of settlement reached in the course of conciliation proceedings and of awards of Industrial Tribunals declared binding by the appropriate Government. The underlying argument is that where a dispute has been referred to conciliation for adjudication a strike or lock-out, in furtherance thereof, is both unnecessary and inexpedient. Where, on the date of reference to conciliation or adjudication a strike or lock-out is already in existence, power is given to the appropriate Government to prohibit its continuance lost the chances of settlement or speedy determination of the dispute should be jeopardized.

The Bill also empowers the appropriate Government to declare, if public interest or emergency so requires by notification in the official Gazette any industry to be a public utility service, for such period, if any, as may be specified in the notification.”

Statement of Objects and Reasons of Amending Act 46 of 1982 –

The Industrial Disputes Act, 1947, provides the machinery for the investigation and settlement of industrial disputes. The Act had been amended from time to time in the light of experience gained in its actual working, decided cases and the policy of the Government. The National Commission on Labour (1969) under the Chairmanship of Justice Gajendragadkar made an in-depth study and identified many areas in which the Act needed a new look to promote the industrial harmony.

The object of the Bill are mainly to ensure speedier resolution of industrial disputes by removing procedural delay and to make certain other amendments in the light of the recommendations of the National Commission on Labour. The Bill seeks to make the following amendments in the Act, namely :-

i.  It was difficult to ascertain “appropriate Government” in respect of certain establishments, therefore, It was suggested to consider the Central Government. As appropriate Government in respect of those establishment .

ii.  The Supreme Court in the Bangalore Water Supply and Sewerage Board V. Rajappa, (A.I.R. 1978 S.C.548) observed that the Government should restructure the definition of “industry” by suitable legislative amendment. Accordingly, new definition was inserted which excluded certain establishments from the scope of the definition of “industry”.

iii.  As it is found that even if Labour Courts pass awards of reinstatement, employer prefer appeal therefore causes delay in the implementation of such award which causes hardship to the workmen concerned. Therefore, it is proposed to provide for payment of wages last drawn by the workman concerned from the date of the award till the case is finally decided.

iv.  It is proposed to make it obligatory for every industrial establishment employing 100 or more workmen to set-up a time bound grievance redressal procedure.

v.  Provision is to be made that the dispute will be adjudicated and heard even in the case of a death of the workman during the pendency of the dispute.

vi.  Taking into consideration the observation of the Supreme Court in the ExcelWear case (AIR 1979 SC 25), it is proposed to recast the provisions relating to closure namely;

a.  the employer has to obtain permission for closure ninety days before the extended date of closure ninety days before the extended date of closure ;

b.  the Government has to give reasonable opportunity of being heard to the applicant and the representatives of workmen before granting or refusing to grant the permission for closure;

c.  where an undertaking is permitted to be closed down, the workmen shall be entitled to closure compensation equivalent to 15 days average pay for every completed year of continuous service.

VII.  The National Commission on Labour examined the practice of unfair labour practices from different perspective and suggested a list of such unfair practices to be included in the central law. Therefore it is proposed that suitable provision in the Act to be incorporated to specify certain practices as unfair labour practices on the part of employers, workmen and trade unions and to provide for penalties for those indulging in such practices.

VIII.  The special provisions relating to lay-off, retrenchment and closure as contained in Chapter – V-B of the Act apply at present establishments employing 300 workmen or above with a view to extending this statutory protection to workmen of smaller establishments also. Therefore, it is proposed to reduce the existing employment limit from 300 to 100.

Statement of Objects and Reasons of Amending Act 49 of 1984 –

The Bill seeks the following amendments, namely :

i.  In order to avoid the problem of interpretation of the expression “retrenchment” it is suggested that the ground for termination of the service of the workmen due to non-renewal of the contract of employment should be excluded.

ii.  It is proposed to redraft the special provisions relating to lay-off retrenchment in the light of the closure, which was inserted in the Amendment act, 1982 (46 of 1982) after taking into consideration the observations of the Supreme Court in the ExcelWear case.

Objects of the Act :

Justice Krishna Iyer has categorically observed in L I C of India v. D J Bahadur, (1980) Lab. I.C. 1218 (SC), that the Industrial Dispute is a benign measure which seeks to pre-empt industrial tensions, provide the mechanics of dispute-resolutions and set-up the necessary infrastructure so that the energies of partners in productions may not be dissipated in counter-productive battles and assurance of industrial justice may create a climate of goodwill.

The Act was enacted as its preamble and long title show, to provide machinery and forum for the investigation of industrial disputes and for the settlement thereof and for the purposes analogous and incidental thereto.

The Supreme Court in Workmen of Dimakuchi Tea Estate v. Dimakuchi Tea State (1958), IL.L.J.500 (SC), has successfully summed up the objectives of the Act as follows ;

i.  promotion of measure for securing and preserving amity and good relations between the employer and workmen;

ii.  an investigation and settlement of industrial disputes, between employers and employees, employers and workmen or workmen and workmen, with a right of representation by registered trade union or a federation of trade unions or an association of employers or a federation of associations of employers;

iii.  prevention of illegal strikes and lock-outs;

iv.  relief to workmen in the matter of lay-off and retrenchment and;

v.  collective bargaining

AMENDMENT ACT NO. 24 OF 1996

Statement of Objects & Reasons –

The Industrial Dispute Act , 1947 inter alia , provides for the machinery and procedure for the investigation and settlement of industrial disputes. Clause (a) of Section 2 of Industrial disputes Act, 1947, defines the term ‘appropriate’ government. “Sub-clause (i) of clause (a) stipulates the Central Government as the appropriate Government” in relation to all other industrial disputes. According to this scheme, the Central Government was the appropriate government in relation to any industrial dispute concerning the Indian Airlines and Air India Corporation, the Industrial Finance Corporation of India, the Oil and Natural Gas Commission or the International Airports Authority of India. With the enactment of the Air Corporations (Transfer of lands-takings and Repeal) Act , 1994, the Industrial Finance Corporation (Transfer of under taking and repeal) Act, 1993 and the Q.1 and Natural Gas Commission (Transfer of undertaking and Repeal) Act, 1993, the Central Government ceased to be the ‘appropriate government’ in respect of these establishments. Further with the enactment of the Airports Authority of India Act , 1994, the National Airports Authority of India and the International Airports Authority of India were merged into are single entity named the Airports Authority of India. Meanwhile a number of Private airline companies got incorporated and commenced their operations over Indian Skies. For all airline Companies and the newly constituted Airports Authority of India, the concerned State Government is the ‘appropriate Government.”

2.  As the establishments and activities related to air transport services, the Airports Authority of India, the Oil and Natural Gas Corporation Ltd. And the Industrial Finance Corpn. Of India, Ltd., are spread across States and have nation-wide ramifications it was considered expedient and desirable to ensure uniformity in the handling of Industrial disputes concerning such establishments/ activities. A significant number of industrial disputes concerning employees of the Air India Limited, the Indian Air Lines limited, the ONGC Ltd. And the Industrial Finance Corporation of India Ltd., were pending for settlement through conciliation, arbitrationor adjudication for want of competent jurisdiction and hence conclusive resolution of the question of “appropriate government” for these organizations had acquired an urgency that could brok no further delay without adversely affecting harmonious industrial relations.