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3/17/12

Strikes,Lock-out,Lay-

off and RetrenchmentBy

LAKSHMI SURESH.KMBA S3 HR

NO:16


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Introduction

Every right comes with its ownduties. Most powerful rights have moreduties attached to them. Today, ineach country of globe whether it isdemocratic, capitalist, socialist, giveright to strike to the workers. But thisright must be the weapon of last resort

because if this right is misused, it willcreate a problem in the production andfinancial profit of the industry. This

would ultimately affect the economy oft ntr .


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Strikes and Lockout

Position in IndiaIn India unlike America right to strikeis not expressly recognized by the

law. The trade union Act, 1926 forthe first time provided limited rightto strike by legalizing certainactivities of a registered trade unionin furtherance of a trade disputewhich otherwise breach of commoneconomic law. Now days a right to

strike is recognized only to limited


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"the right to strike or right to declarelock out may be controlled orrestricted by appropriate industrial

legislation and the validity of suchlegislation would have to be testednot with reference to the criteria laid

down in clause (4) of article 19 butby totally different considerations."

Thus, there is a guaranteedfundamental right to form


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Provision of valid strike underthe Industrial Dispute Act,1947-

Section 2(q) of said Act defines theterm strike, it says, "strike" means acassation of work by a body of

persons employed in any industryacting in combination, or a concertedrefusal, or a refusal, under a commonunderstanding of any number ofpersons who are or have been so


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It provides that no person employedin public utility service shall go onstrike in breach of contract:

(a) Without giving to employer noticeof strike with in six weeks before

striking; or(b) Within fourteen days of givingsuch notice; or(c) Before the expiry of the date ofstrike specified in any such notice as


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It is to be noted that these provisionsdo not prohibit the workmen fromgoing on strike but require them to

fulfill the condition before going onstrike. Further these provisions applyto a public utility service only. The

Industrial Dispute Act, 1947 does notspecifically mention as to who goeson strike. However, the definition ofstrike itself suggests that the strikersmust be persons, employed in any


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Notice of strikeNotice to strike within six weeksbefore striking is not necessary

where there is already lockout inexistence. In mineral Miner Unionvs. Kudremukh Iron Ore Co. Ltd.,

it was held that the provisions ofsection 22 are mandatory and thedate on which the workmenproposed to go on strike should bespecified in the notice. If meanwhile


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Against this a writ petition waspreferred in the High Court ofRajasthen. Reversing the decision of

the Tribunal JusticeWanchoo observed:" ....We are of opinion that what is

generally known as a lightning strikelike this take place without notice.....And each worker striking ......(is)guilty of misconduct under thestanding orders ........and liable to be


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General prohibition of strike-The provisions of section 23 are

general in nature. It imposes general

restrications on declaring strike inbreach of contract in the both publicas well as non- public utility services

in the following circumstancesmainly: -

(a) During the pendency ofconciliation proceedings before a


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The principal object of this sectionseems to ensure a peacefulatmosphere to enable a conciliation

or adjudication or arbitrationproceeding to go on smoothly. Thissection because of its general nature

of prohibition covers all strikesirrespective of the subject matter ofthe dispute pending before theauthorities. It is noteworthy that aconciliation proceedings before a


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Illegal Strike-Section 24 provides that a strike incontravention of section 22 and 23is

illegal. This section is reproducedbelow:(1) A strike or a lockout shall be

illegal if,

(i) It is commenced or declared incontravention of section 22 orsection 23; or


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(2) Where a strike or lockout inpursuance of an industrial dispute hasalready commenced and is in

existence all the time of the referenceof the dispute to a board, an arbitrator,a Labour court, Tribunal or National

Tribunal, the continuance of such strikeor lockout shall not be deemed to beillegal;, provided that such strike orlockout was not at its commencementin contravention of the provision of this


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Consequence of illegalStrike-

Dismissal of workmen-In M/S Burn & Co. Ltd. V, TheirWorkmen , it was laid down thatmere participation in the strike wouldnot justify suspension or dismissal ofworkmen. Where the strike wasillegal the Supreme Court held that in

case of illegal strike the only


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Wages-it was held that in order to entitle theworkmen to wages for the period of

strike, the strike should be legal andjustified. A strike is legal if it does not

violate any provision of the statute. It

cannot be said to be unjustifiedunless the reasons for it are entirelyperverse or unreasonable. Whetherparticular strike is justified or not is aquestion of fact, which has to be


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The constitutional benchin Syndicate Bank v. K. UmeshNayak decided the matter , the

Supreme Court held that a strike maybe illegal if it contravenes theprovision of section 22, 23 or 24 of

the Act or of any other law or theterms of employment dependingupon the facts of each case.Similarly, a strike may be justified orunjustified depending upon several


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Right of employer tocompensation for loss caused byillegal strike-

In Rothas Industries v. ItsUnion , the Supreme Court held thatthe remedy for illegal strike has to be

sought exclusively in section 26 ofthe Act. The award grantingcompensation to employer for loss ofbusiness though illegal strike isillegal because such compensation is


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Lockout

It means temporary closing of aplace of employment or thesuspension of work or the refusal byan employer to continue to employany number of persons employed byhim.


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Notice of lock out:-

No employer carrying on any publicutility service shall lock out any ofhis workmen

without giving them notice oflock out as hereinafter provided,within six weeks before locking out;or

within fourteen days of giving suchnotice or


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The notice of lock out shall be givenby an employer in prescribed form.

The notice shall be displayed

conspicuously by the employer on anotice board at the main entrance tothe establishment and in the

manager's office:

Provided that where a registeredtrade union exists, a copy of thenotice shall also be served on the


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Report of lock-out by employer

If on any day an employer receivesfrom any person employed by himany notice of strike or gives to anypersons employed by him any noticeof lock-out, he shall within five days

thereof, and report to the appropriategovernment or to such authority asthat government may prescribe the

number of such notices received or


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Lay off and Retrenchment

Lay off means failure, refusal orinability of employer on account ofshortage of coal, power or raw

materials or accumulation of stock orbreak down of machinery or naturalcalamity; to give employment to a

workman on muster roll. - - Lay offmeans not giving employment withintwo hours after reporting to work. - -Lay off can be for half day also. Insuch case, worker can be asked to


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A factory employing 50 or more butless than 100 employees on anaverage per working day can lay off

the workmen, who have completedone year of service, by payingcompensation equal to 50% of salary

(basic plus DA) (section 25C of IDA). -- Employer can offer him alternateemployment, if the alternateemployment does not call for anyspecial skill or previous experience,


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Above provisions of compensation forlay off do not apply to (a) Industrialestablishments employing less than

50 workmen (b) seasonal industry (c)Establishments employing 100 ormore workmen, as in their case, prior

approval of Appropriate Governmentis necessary u/s 25M(1)


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Provisions for large industriesfor lay off

large industries employing 100 ormore workmen on an average forpreceding 12 months cannot lay-off,retrench or close down the

undertaking without permission fromGovernment (sections 25M to 25-O ofIndustrial Disputes Act)..


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Retrenchment Retrenchmentmeans termination by the employerof service of a workman for any

reason, other than as a punishmentinflicted by a disciplinary action.However, retrenchment does not

include voluntary retirement orretirement on reaching age ofsuperannuation or termination onaccount of non-renewal of contract ortermination on account of continued


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Retrenchment means discharge ofsurplus labour or staff by employer. Itis not by way of punishment. The

retrenchment should be on basis oflast in first out basis in respect ofeach category, i.e. junior-most

employee in the category (wherethere is excess) should be retrenchedfirst. [section 25G]. If employerwants to re-employer persons, firstpreference should be given to


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Meaning of continuousservice Provisions of compensation

for lay off and retrenchment areapplicable only to workman who is incontinuous service for one year. Asper section 25B, continuous service

includes service interrupted bysickness, authorised leave, accident orstrike which is not illegal, or lock-out or

cessation of work which is not due to


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Procedure for retrenchment

Section 25F, Industrial Disputes Act,provides that where any workman inan industrial establishment, who is acitizen of India, is to be retrenchedand he belongs to a particular

category of workman in thatestablishment, in the absence of anyagreement between the employer

and the workman in this behalf, the


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Difference between lock out

and lay off

The concept of 'lock-out' isessentially differnt from the concept of'lay-off' and so where closure of

business amounts to a 'lock-out underS. 2(l), it would be impossible to bringit within the scope of 'lay-off' under

S.2(kkk). The points of distinctionbetween 'lay-off' and 'lock-out' may bebroadly stated as follows:

1. 'Lay-off' generally occurs in ' -


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3. In the case of 'lay-off', the employermay be liable to pay compensation asprovided by Ss. 25C, 25D and 25E of

the Act, but liability for compensationcannot be invoked in case of 'lock-out',as the liability of the employer in cases

of 'lock-out would depend uponwhether the 'lock-out' was justified andlegal or not.

4. The provisions applicable to the' - '


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Difference between strikeand lockout

A strike is a temporary workstoppage effected by one or moregroups of workers with a view to

enforcing or resisting demands orexpressing grievances, or supportingother workers in their demands or

grievances. A lockout is a total or partial

temporary closure of one or more

places of employment, or the


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Workers involved in a strike:Workers directly involved in a strikeare those who participated directly

by stopping work. Workers indirectlyinvolved in a strike are thoseemployees of the establishments

involved, or self-employed workers inthe group involved, who did notparticipate directly by stopping workbut who were prevented from

orking beca se of the strike

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