INDUSTRY AND INDUSTRIAL DISPUTE UNDER THE INDUSTRIAL DISPUTES ACT, 1947

The Industrial Disputes Act, 1947 is a social welfare legislation enacted with the objective of
maintaining industrial peace and harmony by providing machinery for the investigation and
settlement of industrial disputes. Two fundamental concepts on which the entire Act is based
are “Industry” and “Industrial Dispute”. A clear understanding of these terms is essential for
the proper application of the Act.

INDUSTRY

Section 2(j) of the Industrial Disputes Act, 1947 defines the term “industry”. According to this
section, “industry means any business, trade, undertaking, manufacture or calling of
employers and includes any calling, service, employment, handicraft or industrial occupation
or avocation of workmen.” This definition is very wide and inclusive in nature. The legislature
intentionally used broad language to cover almost all organized economic activities involving
cooperation between employers and workmen.

Initially, courts adopted a narrow interpretation of the term industry. However, with the growth
of welfare jurisprudence, the interpretation became liberal. The most authoritative
interpretation of the term industry was given by the Supreme Court in the landmark case of
Bangalore Water Supply and Sewerage Board v. A. Rajappa (1978). In this case, the Court
evolved the famous Triple Test to determine whether an activity constitutes an industry.

According to the Triple Test, an activity will be considered an industry if the following three
conditions are satisfied. First, there must be a systematic activity. This implies that the
activity should be organized and carried out in a planned manner, and not be casual or
sporadic. Second, the activity must be carried on by cooperation between employer and
workmen. This element emphasizes the relationship of employment where workmen
contribute their labour under the control or supervision of the employer. Third, the activity
must be for the production and/or distribution of goods or services calculated to satisfy
human wants and wishes. It is not necessary that the activity should be profit-oriented; even
charitable or welfare activities may fall within the scope of industry if they satisfy this test.

The Supreme Court further clarified that profit motive is irrelevant. Even if an organization is
running on a no-profit or loss basis, it may still be an industry. Thus, hospitals, educational
institutions, clubs, research institutions, and charitable organizations can be industries if they
employ workmen and provide services systematically.

However, the Court also recognized certain exceptions. Purely sovereign functions of the
State such as defence, atomic energy, legislative functions, administration of justice, and
maintenance of law and order are excluded from the definition of industry. These functions
are considered inalienable functions of the State and are not subject to industrial
adjudication. On the other hand, welfare and economic activities undertaken by the
government, such as running transport services, printing presses, or factories, are
considered industries.
The Court also distinguished between dominant nature test, where an organization performs
multiple activities. If the dominant nature of the activity is industrial, then the entire
organization may be considered an industry, even if some incidental activities are
non-industrial.

Thus, the concept of industry under the Industrial Disputes Act is very wide and flexible. The
purpose behind such an expansive definition is to extend protection to a large number of
workmen and ensure industrial peace by bringing maximum employment relationships within
the purview of the Act.

INDUSTRIAL DISPUTE

Section 2(k) of the Industrial Disputes Act, 1947 defines an “industrial dispute” as “any
dispute or difference between employers and employers, or between employers and
workmen, or between workmen and workmen, which is connected with the employment or
non-employment or the terms of employment or with the conditions of labour of any person.”
This definition shows that an industrial dispute is not limited to disputes between employer
and workman only; it may also arise among employers themselves or among workmen.

An industrial dispute must satisfy certain essential elements. First, there must be a dispute
or difference. Mere dissatisfaction or grievance is not sufficient unless it is clearly expressed
and opposed by the other party. The dispute must be real and substantial, not imaginary or
frivolous. Second, the dispute must be between specified parties, namely employers and
employers, employers and workmen, or workmen and workmen. Disputes involving
individual workers alone do not ordinarily constitute industrial disputes unless they are
supported by a group of workmen or trade union.

Third, the dispute must be connected with employment or non-employment, or with the
terms or conditions of employment. Matters such as wages, bonus, working hours, leave,
retrenchment, dismissal, promotion, transfer, lay-off, and lock-out fall within the scope of
industrial disputes.

Originally, disputes relating to individual workmen were excluded unless espoused by a

union or a substantial number of workmen. However, Section 2A was later inserted to
provide that disputes relating to discharge, dismissal, retrenchment, or termination of an
individual workman shall be deemed to be industrial disputes even if no other workman or
union supports them. This amendment strengthened the protection of individual workmen
and reflects the social justice orientation of the Act.

The term “workmen” is crucial in industrial disputes. Only disputes involving workmen as
defined under Section 2(s) are covered. Disputes involving managerial or administrative staff
are generally excluded unless they fall within the statutory definition.

The object of recognizing industrial disputes under the Act is not merely to adjudicate
conflicts but to promote collective bargaining, conciliation, and peaceful settlement of
disputes. The Act provides various authorities such as Conciliation Officers, Labour Courts,
Industrial Tribunals, and National Tribunals to resolve disputes through legal and
quasi-judicial means.

In conclusion, the concepts of industry and industrial dispute form the backbone of the
Industrial Disputes Act, 1947. A wide interpretation of industry ensures that a large segment
of the workforce receives statutory protection, while a comprehensive definition of industrial
dispute enables effective resolution of employment-related conflicts. Together, these
concepts further the constitutional goal of social and economic justice by maintaining
industrial harmony and protecting the rights of workmen.

AUTHORITIES FOR SETTLEMENT OF INDUSTRIAL DISPUTES UNDER THE

INDUSTRIAL DISPUTES ACT, 1947

The Industrial Disputes Act, 1947 is a beneficial and social welfare legislation enacted with
the primary objective of securing industrial peace and harmony by providing effective
machinery for the investigation and settlement of industrial disputes. Instead of encouraging
strikes and lockouts, the Act emphasizes peaceful methods such as negotiation, conciliation,
and adjudication. For this purpose, the Act establishes various authorities for the settlement
of industrial disputes. These authorities can broadly be classified into conciliation authorities
and adjudicatory authorities.

CONCILIATION AUTHORITIES

Conciliation is the first and most preferred method of settlement under the Act. It aims at
bringing the disputing parties together to arrive at a mutually acceptable settlement without
resorting to adjudication.

Works Committee (Section 3)

The Works Committee is a bipartite body consisting of representatives of employers and
workmen engaged in an industrial establishment employing one hundred or more workmen.
The number of representatives of workmen shall not be less than that of the employer. The
main function of the Works Committee is to promote measures for securing and preserving
amity and good relations between the employer and workmen. It seeks to resolve day-to-day
differences relating to working conditions, amenities, and minor grievances. However, the
Works Committee has only an advisory role and no adjudicatory powers. It cannot decide
major issues such as wages or retrenchment but plays an important role in preventing
disputes from escalating.

Conciliation Officers (Section 4)

The appropriate government may appoint one or more Conciliation Officers for a specified
area or industry. The primary duty of a Conciliation Officer is to mediate and promote the
settlement of industrial disputes. The Conciliation Officer has the power to investigate the
dispute, call for documents, and hold discussions with the parties. During conciliation
proceedings, strikes and lockouts are prohibited in public utility services. If a settlement is
arrived at, the officer sends a report to the appropriate government along with the
memorandum of settlement. If no settlement is reached, a failure report is submitted, stating
the reasons for failure. The role of the Conciliation Officer is vital as it provides a flexible and
informal method of dispute resolution.

Board of Conciliation (Section 5)

The appropriate government may constitute a Board of Conciliation for promoting the
settlement of an industrial dispute. The Board consists of a Chairman and two or four
members representing the parties to the dispute in equal numbers. The Board functions as a
collective conciliation body and follows procedures similar to those of the Conciliation Officer.
The Board must submit its report within the prescribed period. Although Boards of
Conciliation are rarely constituted in practice, they are important where disputes are complex
and require collective mediation.

COURT OF INQUIRY

Court of Inquiry (Section 6)

A Court of Inquiry may be constituted by the appropriate government for the purpose of
inquiring into any matter appearing to be connected with or relevant to an industrial dispute.
The Court may consist of one or more independent persons. The function of the Court of
Inquiry is purely fact-finding and investigatory. It does not have the power to adjudicate or
grant relief. It submits a report to the government within six months. The report helps the
government decide whether to refer the dispute for adjudication. Thus, the Court of Inquiry
plays a supportive role in the dispute settlement mechanism.

ADJUDICATORY AUTHORITIES

When conciliation fails, the dispute may be referred by the appropriate government for
compulsory adjudication to judicial or quasi-judicial authorities.

Labour Courts (Section 7)

Labour Courts are constituted by the appropriate government to adjudicate disputes relating
to matters specified in the Second Schedule of the Act. These matters include propriety or
legality of orders passed by employers, application and interpretation of standing orders,
discharge or dismissal of workmen, legality of strikes and lockouts, and withdrawal of
customary concessions. A Labour Court consists of a single presiding officer who must
possess judicial qualifications. Labour Courts play an important role in protecting the rights
of workmen by ensuring fairness in disciplinary actions.

Industrial Tribunals (Section 7A)

Industrial Tribunals are constituted for adjudicating disputes relating to matters specified in
the Second Schedule as well as the Third Schedule. Matters under the Third Schedule
include wages, allowances, bonus, hours of work, leave, retrenchment, closure, and other
major service conditions. An Industrial Tribunal consists of one presiding officer with higher
qualifications than that of a Labour Court judge. Industrial Tribunals have wider jurisdiction
and deal with more complex and policy-oriented disputes affecting large sections of
workmen.

National Tribunals (Section 7B)

The Central Government may constitute a National Tribunal for adjudicating industrial
disputes of national importance or disputes affecting industries in more than one State. A
National Tribunal consists of a person who is or has been a judge of a High Court. The
award of a National Tribunal has nationwide applicability. This authority ensures uniformity
and consistency in the settlement of disputes having wide economic and social implications.

CONCLUSION

The Industrial Disputes Act, 1947 provides a comprehensive and structured machinery for
the settlement of industrial disputes through various authorities. The emphasis is on
conciliation and voluntary settlement, with adjudication as a last resort. Each authority under
the Act has a distinct role, ranging from preventive and advisory functions to compulsory
adjudication. Together, these authorities aim to maintain industrial peace, ensure fair
treatment of workmen, and promote harmonious relations between employers and
employees, thereby contributing to social and economic justice.

PROCEDURE FOR SETTLEMENT OF INDUSTRIAL DISPUTES UNDER THE

INDUSTRIAL DISPUTES ACT, 1947

The Industrial Disputes Act, 1947 provides a well-defined statutory procedure for the
settlement of industrial disputes with the primary objective of ensuring industrial peace and
avoiding disruptions such as strikes and lockouts. The procedure under the Act emphasizes
peaceful resolution through negotiation and conciliation, and only when these methods fail
does it resort to compulsory adjudication. The settlement procedure can broadly be divided
into voluntary settlement, conciliation proceedings, and adjudication by judicial authorities.

The procedure generally begins when an industrial dispute arises between employers and
workmen or among workmen themselves in relation to employment, non-employment, terms
of employment, or conditions of labour. Once a dispute arises, the parties are encouraged to
resolve it through mutual negotiation or collective bargaining. Such voluntary settlements are
preferred as they are based on consent and help maintain harmonious industrial relations. If
a settlement is arrived at through negotiation, it is reduced into writing and signed by the
parties, and such settlement is binding as per the provisions of the Act.

If voluntary settlement fails, the dispute is taken up for conciliation. Conciliation proceedings
may be initiated either on the application of either party or by the Conciliation Officer on his
own motion, especially in the case of public utility services. During conciliation, the
Conciliation Officer investigates the dispute, holds joint and separate discussions with the
parties, and attempts to bring about a fair and amicable settlement. The officer has the
power to call for relevant documents and information and to persuade the parties to arrive at
a compromise.

If a settlement is reached during conciliation, the Conciliation Officer sends a report to the
appropriate government along with a memorandum of settlement signed by the parties. Such
a settlement is binding not only on the parties to the agreement but also on all workmen
employed in the establishment. If no settlement is reached, the Conciliation Officer submits a
failure report to the appropriate government stating the facts of the dispute and the reasons
for failure of conciliation.

On receipt of the failure report, the appropriate government examines the matter and may
decide to refer the dispute for adjudication. Reference is made to a Labour Court, Industrial
Tribunal, or National Tribunal depending on the nature and importance of the dispute. The
reference clearly specifies the issues for adjudication, and the adjudicatory authority derives
its jurisdiction strictly from the terms of reference.

Once the dispute is referred, the adjudicatory authority follows a judicial or quasi-judicial
procedure. Notices are issued to the parties, written statements and rejoinders are filed,
evidence is recorded, and arguments are heard. The authority then passes an award
deciding the dispute on merits. The award must be in writing, signed by the presiding officer,
and submitted to the appropriate government.

After submission, the award is published by the government, and it becomes enforceable on
the expiry of thirty days from the date of publication unless otherwise directed. The award is
binding on the parties for the period specified under the Act, usually one year, and may
continue to operate until it is replaced by a new settlement or award.

In certain cases, the Act also recognizes voluntary reference to arbitration, where both
parties agree to refer the dispute to an arbitrator. The arbitrator investigates the dispute and
gives an award, which is then published and becomes binding.

In conclusion, the procedure for settlement of industrial disputes under the Industrial
Disputes Act, 1947 is systematic and welfare-oriented. It prioritizes voluntary settlement and
conciliation, and treats adjudication as a last resort. This structured procedure helps in
resolving disputes efficiently, protecting the interests of workmen, and maintaining industrial
peace and stability.

STRIKE UNDER THE INDUSTRIAL DISPUTES ACT, 1947

Strike is one of the most important weapons available to workmen in the industrial relations
system. It is a collective action adopted by workers to press their demands against the
employer. Though strike is a legitimate industrial weapon, it is not an absolute right and is
regulated by the Industrial Disputes Act, 1947 to maintain industrial peace and protect public
interest.

MEANING AND DEFINITION OF STRIKE

Section 2(q) of the Industrial Disputes Act, 1947 defines strike as “a cessation of work by a
body of persons employed in any industry acting in combination, or a concerted refusal
under a common understanding of a number of persons who are or have been so employed
to continue to work or to accept employment.” This definition highlights that strike is not an
individual act but a collective action by workmen acting together.
A strike may take place either by completely stopping work or by refusing to continue work in
a normal manner. Even a refusal to accept employment under a common understanding can
amount to a strike. Thus, the essence of strike lies in collective cessation of work with a
common objective.

ESSENTIAL ELEMENTS OF STRIKE

To constitute a strike under the Act, certain essential elements must be present. First, there
must be a cessation of work or refusal to work. Second, the cessation must be by a body of
workmen, not by an individual. Third, the workmen must act in combination or under a
common understanding. Fourth, the persons must be employed in an industry. If any of
these elements is missing, the action may not amount to a strike within the meaning of the
Act.

RIGHT TO STRIKE

The right to strike is not a fundamental right under the Constitution of India. The Supreme
Court has held that the right to strike is a statutory and controlled right, subject to restrictions
imposed by law. The Industrial Disputes Act regulates strikes to ensure that they are not
misused and do not disturb industrial harmony or public welfare.

KINDS OF STRIKES

Strikes may take various forms depending upon the nature and method adopted by
workmen.

A general strike is one where workmen across industries or establishments stop work to
support a common cause. A stay-in or sit-down strike occurs when workmen remain inside
the workplace but refuse to work. A go-slow strike refers to deliberate reduction of work
output without stopping work completely; courts have held this to be a serious misconduct as
wages are drawn without proper work. A token strike is a short-duration strike to draw
attention to demands. A sympathetic strike is one where workers strike in sympathy with the
workers of another establishment. An illegal strike is one which is commenced or continued
in violation of the provisions of the Act.

STRIKES IN PUBLIC UTILITY SERVICES

The Act imposes stricter conditions on strikes in public utility services such as transport,
electricity, water supply, and communication, as disruption of these services affects the
general public. Under Section 22, workmen employed in public utility services cannot go on
strike unless they give notice of strike within six weeks before striking, and the strike cannot
be commenced within fourteen days of giving such notice. Further, no strike can be
commenced during the pendency of conciliation proceedings and seven days after their
conclusion.

GENERAL PROHIBITION OF STRIKES

Section 23 of the Act imposes a general prohibition on strikes during the pendency of
conciliation proceedings before a Conciliation Officer, proceedings before a Labour Court,
Industrial Tribunal or National Tribunal, during arbitration proceedings, and during the period
when a settlement or award is in operation. These restrictions apply to all industries, not only
public utility services. The object is to ensure that disputes are resolved through legal
machinery rather than industrial action.

LEGAL AND ILLEGAL STRIKES

A strike is said to be legal if it is commenced and continued in accordance with the

provisions of the Act. If a strike is started without complying with statutory requirements or
during prohibited periods, it becomes an illegal strike under Section 24. However, mere
illegality of a strike does not automatically justify dismissal of workmen; the employer must
examine the conduct and circumstances.

JUSTIFIED AND UNJUSTIFIED STRIKES

Apart from legality, courts also examine whether a strike is justified or unjustified. A justified
strike is one which is resorted to for reasonable and genuine demands after exhausting
peaceful remedies. An unjustified strike is one which is unreasonable, violent, or premature.
The justification of strike is relevant for determining issues such as payment of wages for
strike period and disciplinary action.

CONSEQUENCES OF ILLEGAL STRIKE

Participation in an illegal strike may attract penalties under Section 26 of the Act. Workmen
participating in an illegal strike may be punished with imprisonment or fine. Moreover,
workmen are generally not entitled to wages for the period of strike, particularly if the strike is
illegal or unjustified. However, if the strike is legal and justified, courts may grant wages
depending on the facts of the case.

STRIKE AND PAYMENT OF WAGES

The principle of “no work, no pay” generally applies during strikes. However, courts have
held that in cases where the strike is legal and justified and the employer is at fault, wages
may be awarded. Thus, payment of wages during strike depends on the legality and
justification of the strike.

CONCLUSION

Strike is a powerful instrument in the hands of workmen to safeguard their rights and
interests, but it is not an unfettered right. The Industrial Disputes Act, 1947 seeks to balance
the interests of workmen, employers, and society by regulating strikes through legal
procedures and restrictions. By discouraging hasty and illegal strikes and promoting
peaceful settlement of disputes, the Act aims to maintain industrial peace, productivity, and
social justice.

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LOCK-OUT UNDER THE INDUSTRIAL DISPUTES ACT, 1947

Lock-out is an important weapon available to employers in industrial relations, just as strike

is available to workmen. It is used by employers to exert pressure on workmen in order to
secure acceptance of their demands. However, like strikes, lock-outs are not absolute rights
and are regulated by the Industrial Disputes Act, 1947 in the interest of industrial peace.

Section 2(l) of the Industrial Disputes Act, 1947 defines lock-out as “the temporary closing of
a place of employment, or the suspension of work, or the refusal by an employer to continue
to employ any number of persons employed by him.” This definition shows that lock-out is a
deliberate act of the employer and may take the form of closing the workplace, suspending
work, or refusing to provide employment to workmen.

The essential elements of a lock-out are that there must be a temporary closure or
suspension of work, it must be the act of the employer, and it must be done with the intention
of coercing workmen to accept certain demands. A lock-out is different from closure, as
closure is permanent, whereas lock-out is temporary and reversible.

The Industrial Disputes Act imposes restrictions on lock-outs, particularly in public utility
services. Under Section 22, an employer in a public utility service cannot declare a lock-out
without giving prior notice, nor can it be declared during the pendency of conciliation
proceedings or within seven days after their conclusion. Section 23 further imposes a
general prohibition on lock-outs during the pendency of proceedings before Labour Courts,
Industrial Tribunals, or National Tribunals and during the operation of a settlement or award.

A lock-out is said to be legal if it is declared in accordance with the provisions of the Act, and
illegal if it is declared in violation of Sections 22 or 23. Participation in an illegal lock-out
attracts penalties under Section 26 of the Act. The employer may also be required to pay
wages to workmen if the lock-out is found to be unjustified.

Courts also distinguish between justified and unjustified lock-outs. Even a legal lock-out may
be unjustified if it is unreasonable, mala fide, or used as a weapon of victimization. The
justification of a lock-out is relevant in deciding the question of payment of wages during the
lock-out period.

In conclusion, lock-out is a recognized but regulated weapon of employers under the

Industrial Disputes Act, 1947. The law seeks to balance the interests of employers and
workmen by allowing lock-outs under controlled conditions while preventing their misuse.
The ultimate aim is to ensure industrial peace, fairness, and social justice.

LAY-OFF AND RETRENCHMENT UNDER THE INDUSTRIAL DISPUTES ACT, 1947

The Industrial Disputes Act, 1947 provides protection to workmen against arbitrary
deprivation of employment by regulating situations where the employer is unable or unwilling
to provide work. Two important concepts in this regard are lay-off and retrenchment. Though
both result in loss of employment or wages to workmen, they differ in nature, purpose, and
legal consequences.

LAY-OFF

Lay-off is defined under Section 2(kkk) of the Industrial Disputes Act, 1947. According to this
section, lay-off means the failure, refusal, or inability of an employer to give employment to a
workman whose name is borne on the muster rolls of the industrial establishment, on
account of reasons such as shortage of coal, power, or raw materials, accumulation of
stocks, breakdown of machinery, natural calamity, or any other connected reason.

The essential elements of lay-off are that the workman must be on the muster rolls of the
establishment and must have presented himself for work, but the employer is unable to
provide employment due to reasons beyond his control. Lay-off is temporary in nature, and
the employment relationship continues to subsist. It generally applies to factories, mines,
and plantations, and not to seasonal establishments.

The Act provides for lay-off compensation under Section 25C. A workman who has
completed at least one year of continuous service is entitled to compensation equal to fifty
percent of basic wages and dearness allowance for the period of lay-off, subject to a
maximum of forty-five days in a year, unless the lay-off continues due to an agreement or
settlement.

Lay-off does not terminate employment, and once normal conditions are restored, the
employer is expected to provide work to the laid-off workmen. Thus, lay-off is a temporary
measure adopted due to economic or technical difficulties.

RETRENCHMENT

Retrenchment is defined under Section 2(oo) of the Industrial Disputes Act, 1947. It means
the termination of the service of a workman by the employer for any reason whatsoever,
otherwise than as a punishment inflicted by way of disciplinary action. The definition is very
wide and includes termination on grounds of surplus labour or economic necessity.

However, the Act expressly excludes certain terminations from the scope of retrenchment,
such as voluntary retirement, retirement on reaching the age of superannuation, termination
due to non-renewal of contract, and termination on the ground of continued ill-health.

Retrenchment is permanent in nature and results in severance of the employer-employee

relationship. Since retrenchment adversely affects the livelihood of workmen, the Act
imposes strict conditions to ensure fairness.

Section 25F lays down the conditions precedent to retrenchment. These include giving one
month’s notice in writing indicating the reasons for retrenchment or wages in lieu of such
notice, payment of retrenchment compensation equivalent to fifteen days’ average pay for
every completed year of continuous service, and notice to the appropriate government
authority. Non-compliance with these conditions renders the retrenchment invalid.
The Act also incorporates the principle of “last come, first go” under Section 25G, which
means that the most recently employed workman should ordinarily be retrenched first,
unless reasons are recorded for deviating from this rule. Further, Section 25H provides for
re-employment of retrenched workmen, giving them preference if the employer proposes to
take new workmen in the future.

DIFFERENCE BETWEEN LAY-OFF AND RETRENCHMENT

The main distinction between lay-off and retrenchment lies in their nature and effect. Lay-off
is temporary and does not terminate employment, whereas retrenchment is permanent and
results in termination of service. Lay-off occurs due to external or temporary difficulties, while
retrenchment is generally due to surplus labour or economic restructuring. Compensation in
lay-off is limited and conditional, whereas retrenchment compensation is mandatory and
statutory.

CONCLUSION

Lay-off and retrenchment are important concepts under the Industrial Disputes Act, 1947,
aimed at balancing the interests of employers and workmen. While recognizing the
employer’s right to manage the business, the Act safeguards workmen from sudden and
arbitrary loss of employment by providing compensation, procedural safeguards, and
re-employment opportunities. These provisions reflect the welfare orientation of labour law
and the constitutional goal of social and economic justice.

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