AMITY LAW SCHOOL - 2

Labour Law

‘Case Study’

Submitted by: Submitted to:

Akansha Singh Chaudhary Mr. Amit Dhall

BA.,LLB (H)

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ACKNOWLEDGEMENT

I would like to express my special thanks of gratitude of my teacher Mr. Amit Dhall who gave me the golden opportunity to do this wonderful project . This project also helped me in doing a lot of Research and I came to know about so

many new things I am really thankful to him.

Secondly I would also like to thanks my parents and friends who helped me a lot in finalizing this project within the limited time frame.

TABLE OF CONTENTS

STRIKES INGREDIENTS CONCERTED ACTION NOTICE OF STRIKE GENERAL PROHIBITION ILLEGAL STRIKE CONSEQUENCES LOCKOUT LEGALITY DEFINITION PROHIBITIONS CASE STUDY

Strike

Strike is one of the oldest and the most effective weapons of labor in its struggle with capital for securing economic justice. The basic

strength of a strike lies in the labor’s privilege to quit work and thus brings a forced readjustment of conditions of employment. It owes its origin to old English words ‘Striken to go’. In common parlance it means hit, impress, and occur to, to quit work on a trade dispute. The latter meaning is traceable to 1768. Later on it varied to ‘strike of work’. The composite idea of quitting work or withdrawal of work as a coercive act could be gathered in the use of word as a verb as well as adjective. The definition and use of the word ‘strike’ has been undergoing constant transformation around the basic concept of stoppage of work or putting of work by employees in their economic struggle with capital.

The term ‘strike’ has been defined in a wide variety of branches of human knowledge, viz. etymology, sociology, political economy, law and political science

Strike has been defined in Section 2 (q) of the Industrial Disputes Act as under—“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.”

The analysis of the definition would show that there are the following essential requirements for the existence of a strike:(1) There must be cessation of work.(2) The cessation of work must be by a body of persons employed in any industry; (3) The strikers must have been acting in combination;(4) The strikers must be working in any establishment which can

be called industry within the meaning of Section 2(j); or(5) There must be a concerted refusal; or(6) 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;(7) They must stop work for some demands relating to employment, non-employment or the terms of employment or the conditions of labour of the workmen.

Ingredients of Strike

Cessation of Work:-

This is most significant characteristic of the concept of strike. It has been variedly expressed as ’abandonment’, stoppage’,

‘omission of performance of duties of their posts’, ‘hampering or reducing normal works’, ‘hindrance to the working or suspension of work, discontinuing the employment or breaking their contract of service or refusing or failing to return to or resume employment or refusing or failing to accept engagement for any work which they are usually employed for. Thus what required for strike is that there must be stoppage of work or there must be refusal to continue to work or to accept employment by any number of persons employed for the work but the refusal must be concerted or under a common understanding. The cessation of work may take any form. It must, however, be temporary and not for ever and it must be voluntary. No duration can be fixed for this. If the cessation of work is as a result of renunciation of work or relinquishment of the strikers’ status or relationship, it is not strike. Permanent cessation of work would result in termination of the contract of work which is alien to the underlying sanction of strike retaining contractual relationship during the strike periods. Cessation of work is not a cessation of contract of employment.

Concerted action

Another important ingredient of the strike is a concerted action. The workers must act under a common understanding. The cessation of work by a body of persons employed in any industry in combination is a strike. Thus in a strike it must be proved that there was cessation of work or stoppage of work under a common understanding or it was a concerted action of the workers or there was cessation of work by workers acting in combination.

Stoppage of work by workers individually does not amount to strike. The concerted refusal or refusal under a common understanding to continue to work or to accept employment or to resume work by any number of persons is a strike. One thing must be kept in mind that the refusal of work means refusal to perform duties which the workers are required to perform. If the workers are at liberty to do a particular work or not to do a work their refusal to work does not amount to strike. For example, over-time work, if it is the duty or workers to do overtime work necessarily because it is the practice of that establishment to take overtime work from the workers in that case refusal to work overtime would amount to strike otherwise not. Thus the test to determine whether refusal to do overtime work constitutes a strike or not would depend upon whether overtime was habitually worked in that industry.

The strike is illegal

1. if it is in breach of Contract of Employment.2. if it is in Public Utility Services.3. if Notice under Section 22(1) is not given.4. if commenced during Award or settlement period.5. if commenced During or within 7 days of completion of

Conciliation Proceedings.6. if commenced During or within Two months of completion of Adjudication Proceedings.

Notice of strike

Notice to strike within six weeks before striking is not necessary where there is already lockout in existence. In mineral Miner Union vs. Kudremukh Iron Ore Co. Ltd., it was held that the provisions of section 22 are mandatory and the date on which the workmen proposed to go on strike should be specified in the notice. If meanwhile the date of strike specified in the notice of strike expires, workmen have to give fresh notice. It may be noted that if a lock out is already in existence and employees want to resort to strike, it is not necessary to give notice as is otherwise required.

In Sadual textile Mills v. Their workmen certain workmen struck work as a protest against the lay-off and the transfer of some workmen from one shift to another without giving four days notice as required by standing order 23. On these grounds a question arose whether the strike was justified. The industrial tribunal answered in affirmative. Against this a writ petition was

preferred in the High Court of Rajasthan. Reversing the decision of the Tribunal Justice Wanchoo observed:

"…We are of opinion that what is generally known as a lightning strike like this take place without notice…. And each worker striking ….(is) guilty of misconduct under the standing orders …and liable to be summarily dismissed…(as)… the strike cannot be justified at all. "

General prohibition of strike-

The provisions of section 23 are general in nature. It imposes general restrictions on declaring strike in breach of contract in the both public as well as non- public utility services in the following circumstances mainly: -

a. During the pendency of conciliation proceedings before a board and till the expiry of 7 days after the conclusion of such proceedings;

b. During the pendency and 2 month’s after the conclusion of proceedings before a Labour court, Tribunal or National Tribunal;

c. During the pendency and 2 months after the conclusion of arbitrator, when a notification has been issued under sub- section 3 (a) of section 10 A;

d. During any period in which a settlement or award is in operation in respect of any of the matter covered by the settlement or award.

The principal object of this section seems to ensure a peaceful atmosphere to enable a conciliation or adjudication or arbitration proceeding to go on smoothly. This section because of its general nature of prohibition covers all strikes irrespective of the subject matter of the dispute pending before the authorities. It is noteworthy that a conciliation proceedings before a conciliation officer is no bar to strike under section 23.

In the Ballarpur Collieries Co. v. H. Merchant it was held that where in a pending reference neither the employer nor the workmen were taking any part, it was held that section 23 has no application to the strike declared during the pendency of such reference.

Illegal Strike

Section 24 provides that a strike in contravention of section 22 and 23 is illegal. This section is reproduced below:

1. A strike or a lockout shall be illegal if,

i. It is commenced or declared in contravention of section 22 or section 23; or

ii. It is continued on contravention of an order made under sub section (3) of section 10 or sub section (4-A) of section 10-A.

2. Where a strike or lockout in pursuance of an industrial dispute has already commenced and is in existence all the time of the reference of the dispute to a board, an arbitrator, a Labour court, Tribunal or National Tribunal, the continuance of such strike or lockout shall not be deemed to be illegal;, provided that such strike or lockout was not at its commencement in contravention of the provision of this Act or the continuance thereof was not prohibited under sub section (3) of section 10 or sub section (4-A) of 10-A.

3. A strike declared in the consequence of an illegal lockout shall not be deemed to be illegal.

Consequence of illegal Strike

Dismissal of workmen-

In M/S Burn & Co. Ltd. V, Their Workmen, it was laid down that mere participation in the strike would not justify suspension or dismissal of workmen. Where the strike was illegal the Supreme Court held that in case of illegal strike the only question of practical importance would be the quantum or kind of punishment. To decide the quantum of punishment a clear distinction has to be made between violent strikers and peaceful strikers.

In Punjab National Bank v. Their Employees, it was held that in the case of strike, the employer might bar the entry of the strikers within the premises by adopting effective and legitimate method in that behalf. He may call upon employees to vacate, and, on their refusal to do so, take due steps to suspend them from employment, proceed to hold proper inquires according to the standing order and pass proper orders against them subject to the relevant provisions of the Act.

Wages

In Cropton Greaves Ltd. v. Workmen, it was held that in order to entitle the workmen to wages for the period of strike, the strike should be legal and justified. A strike is legal if it does not violate any provision of the statute. It cannot be said to be unjustified unless the reasons for it are entirely perverse or unreasonable. Whether particular strike is justified or not is a question of fact, which has to be judged in the light of the fact and circumstances of each case. The use of force, coercion, violence or acts of sabotage resorted to by the workmen during the strike period which was legal and justified would disentitle them to wages for strike period.

The constitutional bench in Syndicate Bank v. K. Umesh Nayak decided the matter; the Supreme Court held that a strike may be illegal if it contravenes the provision of section 22, 23 or 24 of the Act or of any other law or the terms of employment depending upon the facts of each case. Similarly, a strike may be justified or unjustified depending upon several factors such as the service conditions of the workmen, the nature of demands of the workmen, the cause led to strike, the urgency of the cause or demands of the workmen, the reasons for not resorting to the dispute resolving machinery provided by the Act or the contract of employment or the service rules provided for a machinery to resolve the dispute, resort to strike or lock-out as a direct is prima facie unjustified. This is, particularly so when the provisions of the law or the contract or the service rules in that behalf are breached. For then, the action is also illegal.

Lockouts

The use of the term “lock-out” to describe employer's instruments of economic coercion dates back to 1860 and is younger than its counterparts in the hands of workers, strike by one hundred years. Formerly the instrument of lock-out was resorted to by an employer or group of employers to ban union membership: the employers refused

Employment to workers who did not sign a pledge not to belong to a trade union. Later the lock-out was declared generally by a body of employers against a strike at a particular work by closing all factories until strikers returned to work. India witnessed lock-out twenty-five years after the "lock-out" was known and used in the arena of labour management relations in industrially advanced countries. Karnik reports that the first known lock-out was declared in 1895 in Budge Budge Jute Mills. Section 2(1) defines the term Lock-out. However, the present definition is only a mutilated one. The term was originally and correctly defined in the Trade Dispute Act, 1929. From the definition given in the Trade Dispute Act, the present Act has taken the present definition but has omitted the words “when such closing, suspension or refusal occurs in consequences of a dispute and is intended for the purpose of compelling those persons or of aid in another Employer in compelling persons employed by him to accept terms or condition of, or affecting employment”.

With the omission of these words, the present definition fails to convey the very concept of Lock-out. In Sri Ramchandra Spinning Mills v/s State of Madras, the Madras High Court read the deleted portion in the definition to interpret the term lock-out. According to the Court, a flood may have swept away the factory, a fire may have gutted the premises; a convulsion of nature may have sucked the whole place under ground; still if the place of employment is closed or the work is Suspended or the Employer refuses to continue to employ his previous workers, there would be a lock out and the Employer would find himself exposed to the penalties laid down in the Act. Obviously, it shows that the present definition does not convey the concept of the term lock out.

Lock-out, When Legal

The Act treats strikes and lock-out on the same basis; it treats one as the counter part of the other. (Mohammed Sumsuddin), the circumstances under which the legislature has banned strike, it has also at the Same time banned the lock-out. Thus what holds good-bad; legal-illegal, justified unjustified for strikes, holds the same for the lock-out. As such, the provisions of the Act which prohibit the strike also prohibit the lock-out.

The object and reasons for which the Lock-out are banned or prohibited are the same for which strikes are banned or prohibited. It is because the Employer and the Employees are not discriminated in their respective rights in the field of industrial relationship between the two. As such, lock-out if not in conflict with Section 22 and 23 may be said to be legal or not legal. Sections 24(1) (iii), 10(3) and 10A (4A) similarly controls the lock-out. A lock-out in consequence of illegal strike is not deemed to be illegal. But if lock-out is illegal, Section 26(2), 27 and 28 will come in operation to deal with the situation. The Act does not lay down any guidelines to settle the claims arising out of illegal lock-out. The courts, therefore, have adopted the technique of apportioning the blame between the Employer and employees. This once again brings to the fore the concept of justifiability of lock-out.

The Statutory Definition

Section 2(1) of the Industrial Disputes Act, 1947 defines “Lock-out” to mean: The temporary closing of employment or the suspension of work, or the refusal by an employer to continue to employ any number of persons employed by him. A delineation of the nature of this weapon of industrial warfare requires description of: (i) the acts which constitute it; (ii) the party who uses it; (iii) the party against whom it is directed; and (iv) the motive which prompts resort to it.

Prohibition of Lockout

In the similar circumstances the lockout has been prohibited in the public utility service. Section 22 (2) of the Act provides that no employer carrying on any public utility service shall lock out any of his workmen:

1.Without giving them notice of lockout as hereinafter provided, within six weeks before locking out; or2.Within 14 days of giving notice; or3.Before the expiry of the day of lockout specified in any such notice as aforesaid; or

Case studyFor Bata, labor had always posed major problems. Strikes seemed to be a perennial problem. Much before the assault case, Bata's chronically restive factory at Batanagar had always plagued by labor strife. In 1992, the factory was closed for four and a half months. In 1995, Bata entered into a 3-year bipartite agreement with the workers, represented by the then 10,000 strong BMU, which also had the West Bengal government as a signatory.

On July 21, 1998, Weston was severely assaulted by four workers at the company's factory at Batanagar, while he was attending a business meet. The incident occurred after a member of BMU, Arup Dutta, met Weston to discuss the issue of the suspended employees. Dutta reportedly got into a verbal duel with Weston, upon which the

other workers began to shout slogans. When Weston tried to leave the room the workers turned violent and assaulted him. This was the second attack on an officer after Weston took charge of the company, the first one being the assault on the chief welfare officer in 1996. In February 1999, a lockout was declared in Bata's Faridabad Unit. Middleton commented that the closure of the unit would not have much impact on the company's revenues as it was catering to lower-end products such as canvas and

Hawaii chappals. The lock out lasted for eight months. In October 1999, the unit resumed production when Bata signed a three-year wage agreement.

On March 8, 2000, a lockout was declared at Bata's Peenya factory in Bangalore, following a strike by its employee union. The new leadership of the union had refused to abide by the wage agreement, which was to expire in August 2001. Following the failure of its negotiations with the union, the management decided to go for a lock out. Bata management was of the view that though it would have to bear the cost of maintaining an idle plant (Rs. 3 million), the effect of the closures on sales and production would be minimal as the footwear manufactured in the factory could be shifted to the company's other factories and associate manufacturers. The factory had 300 workers on its rolls and manufactured canvas and PVC footwear. 

In July 2000, Bata lifted the lockout at the Peenya factory. However, some of the workers opposed the company's move to get an undertaking from the factory employees to resume work. The employees demanded revocation of suspension against 20 of their fellow employees. They also demanded that conditions such as maintaining normal production schedule, conforming to standing orders and the settlement in force should not be insisted upon. 

In September 2000, Bata was again headed for a labour dispute when the BMU asked the West Bengal government to intervene in

what it perceived to be a downsizing exercise being undertaken by the management. BMU justified this move by alleging that the management has increased outsourcing of products and also due to perceived declining importance of the Batanagar unit. The union said that Bata has started outsourcing the Power range of fully manufactured shoes from China, compared to the earlier outsourcing of only assembly and sewing line job. The company's production of Hawai chappals at the Batanagar unit too had come down by 58% from the weekly capacity of 0.144 million pairs. These steps had resulted in lower income for the workers forcing them to approach the government for saving their interests.