EXECUTIVE SUMMMARY

Lanka fashion leather Products has been running its business for the last
several years. There was a labor force of about 150 employees working in the
factory. At the beginning there was no workers trade union but about six
months ago the workers formed a branch union of a registered trade union
sponsored by a political party with radical views. After its formation the
union by a letter signed by the president and they be given an opportunity to
meet the higher management for a cordial discussion regarding some issues
affecting its members attached to the company. When there was no respond
from the management to their request they wrote again giving a list of issues
they intend to discuss.
The union informed the management in writing that in the event of the
management failing to grant an opportunity to discuss the aforesaid matters
within 14 days the union would be compelled to resort to strike action. As
there was no response from the management they extend their mandatory
period for another two weeks. As the management continued to be indifferent
towards the unions request, the union ultimately launched a strike. This
union had a membership of nearly 75% of the total workforce of the company
and nearly 70% of the membership joined the strike.
Even after the commencement of the strike the management refrained from
having any dialogue with the union. Two weeks after the commencement of
the strike the management wrote to all the strikers individually by registered
post to their home addresses that they would be treated has having vacated
post if they failed to report for work within 7 days from the date of the letter.
Employees ignored this ultimatum and continued to take part in the strike.
After the lapse of the ultimate date given the employees were informed in
writing that they had been treated as having vacated their posts. The
commissioner who came to know about the dispute summoned both parties to
his office and attempted to settle the dispute but failed. Thereafter the
commissioner referred the matter to the minister and the minister refereed the
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dispute for settlement by an arbitrator appointed by him.

On hearing the step taken by the minister the union called off the strike and
returned to work but they were refused to enter the factory by the security on
instructions from the management on the ground that they had already been
treated as having vacated their posts and were no more their employees. The
union secretary sent a note to the HR manager stating that they called off
their strike and now was now prepared to report back for work with
immediate effect to which the HR manager replied and said that they were no
more employees of the company and therefore there was no need to report
back for work. The workers complained to the labor department and the
commissioner of labor instituted action against the directors of the company
in the magistrates court on two counts under the provisions of the industrial
provisions act.

CASE RELEVANT QUESTIONS

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Analyze the above facts and prepare a comprehensive report discussing the
following issues.
1. Whether it is necessary to notify the employer before forming a trade union?
2. Should the employer have given an opportunity to the union to discuss these matters
with the management? Is it a legal requirement?
3. Was the employer under a legal obligation to deduct union membership fees from the
salaries of member employees?
4. What are the demands which the employer was bound to grant under the law? What
are the situations where the employer had acted contrary to law as alleged by the
union?
5. Are there any demands in the list submitted by the union which you consider as
unreasonable/
6. Is it lawful for the employer to have sent vacation of post letters to the striking
employees?
7. Was the final letter sent to the union by the HR manager legal?
8. What do you think are the two offences the employer would have committed under
the industrial disputes act for the commissioner to have instituted legal action against
the directors of the company?
9. As the company was an independent institution registered under the companies act is
it lawful to have instituted action against the directors without instituting action
against the company?
10. Was there a possibility of avoiding this unfortunate situation if the employer had
been more flexible with the union? If so what do you think the company should have
done?
11. Sudden decisions of the union officials to call of the strike which was carried on for a
long time was considered by certain members as a betrayal of the union struggle,
what is your opinion?

ANALAYZING THE FACTS

.
1. FORMING A TRADE UNION IN A COMPANY CONSISTING OF ABOUT 150
EMPLOYEES AND INFROMING IT TO THE EMPLOYER :

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As per the Trade Union Ordinance a required number of employees in a

company to form a TU are about 150 employees. In this case they are
consistent with the rules and regulations because their company is having
more than the required employees in forming a Trade Union.
Further, the trade union ordinance has not made any provision that is
prescribing the employees to inform their employer about the formation
of the trade union

2. DEMANDS AND ISSUES OF THE TRADE UNION :

In a social perspective, if we take any movements or unions which is
working together towards a goal must be having some kind of demands to
be full filled or issues to be sorted out. According to this there will not be
having any issue if the TU also had some kind of demands.
The demands which they tried to fulfill most of them are justifiable as
well as reasonable. As a matter of fact they didnt go too far beyond the
limit and boundary.

3. LEGALITY OF INSTITUTING ACTION AGAINST THE COMPANY AS

REGISTERED UNDER THE COMPANIES ACT OR DIRECTOR BOARD :
If the trade union take actions against the company, then the director
board is liable to reply for the actions on behalf of the company name.

4. STRIKE OF THE TRADE UNION :

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Strike of the TU is one of the weaponry items which really make the
demands true. If we have a look at the legality of strike indeed, its an
acceptable as well irrefutable one. Industrial dispute act amendment have
prescribed that, no actions shall be taken by the employer on the trade
union actions in mala fide (unfair and unjust) manner.

5. NECESSITY OF MANAGEMENT TO GIVE THE OPPORTUNITY TO THE TRADE

UNION TO DISCUSS THE MATTERS
Employer or the management should call up the union for bargaining or
either should pay attention for the union demands, if the trade union
membership is not less than 40%.

6. MANAGEMENTS DECISION TOWARDS TRADE UNIONS ACTION :

If the Trade Union is a strong legal force there must have been a proper
response from the management of the company but in this case we can
see even though the Union informed the management in writing that in
the event of the management failing to grant an opportunity to discuss
about the demands within 14 days the union would be compelled to resort
to strike action.

As there was no response from the management they extended their

mandatory period for another two weeks. As the management continued
to be indifferent towards the unions request the union ultimately
launched a strike. This union had a membership of nearly 75% of the total
workforce of the company and nearly 70% of the membership joined the
strike.
The strikes are legally accepted to conduct by the employees of the trade
union by the trade union ordinance and if any action is taken by the
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employer to influence and stop the strike through unfair and unjust
manner, then it will be considered as an act of unfair labor
Practice
I

The management did not call the trade union to bargain on the terms and conditions

II

The management have sent letters informing vacation of post to the workers who
were participating in the strike

7. INITIATIVES OF LABOUR DEPARTMENT

As the employees were informed in writing that they had been treated as
having vacated their posts. The commissioner who came to know about
the dispute summoned both parties to his office and attempted to settle the
dispute but failed. Thereafter the commissioner referred the matter to the
minister and the minister referred the dispute for settlement by an
arbitrator appointed by him.
Since, the employees complained again concerning the HR managers
Treat the commissioner of labor instituted action against the Directors of
the Company in the Magistrates Court on two counts under the provisions
of the Industrial Provisions Act.
In this case, the initiatives of Labor Department are fully true as well as
correct. They aligned with procedure and took the correct decision by
moving

into the suitable next step.

8. DECISION OF HR MANAGER :

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The union secretary send a note to the HR manager stating that they had
called off their strike and were now prepared to report back for work with
immediate effect to which the HR manager replied and said that they
were no more employees of the company and therefore there was no need
to report back for work.
The final letter that has been sent by the HR management to the trade
union is not legal.

1. QUESTIONS AND ANSWERS :

1. No, its not necessary to notify the employer before forming a Trade Union. At the same
time although our Trade Union Ordinance provides for registration of Trade Union there

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is no provision compelling employer to recognize a Trade Union or to bargain with such

a union.

2. Yes, its a legal one. Because in the midst of strong objectives by the employees enacted
laws to compel employers to bargain with Trade Union which has a memberships of
40% or more by amending the Industrial Disputes Act. A new chapter as part VA
introduced to the IDA by amending act no: 56 of 1991introducing a list of Unfair Labor
Practices in which it enacted that no employer shall refuse to bargain with a Trade
Union which has in its membership not less than 40% of the workmen on whose behalf
such TU seeks to bargain any employer or directors of any limited liability company
who contravenes this provision shall be liable on conviction after summary trial before a
magistrate to a fine of Rs. 20,000.00.

3. Its an illegal. No employer under a legal obligation to deduct union membership fees
from the salaries of member employees. There is nothing mentioned under the Trade
Union Ordinance concerning the aforesaid subject

4.

THE LEGALITY OF THE DEMANDS MADE BY THE TRADE UNION.

5. Yes, its there

THE LEGALITY, FAIRNESS AND

REASONABILITY OF DEMANDS

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01

It is an unfair amount of salary

increasement.

02 It is a fair, legal and reasonable.

03 It is an unfair and not reasonable
04. It is an unfair and not reasonable
05 It is a fair, legal and reasonable.
06 Not legal but its reasonable.
07 It is a fair, legal and reasonable.
08 It is an unfair and not reasonable
09 It is an unfair and not reasonable
10 It is a fair, legal and reasonable.
11 It is a fair, legal and reasonable.
12 Not legal but some demands are
reasonable.
13 It is a fair, legal and reasonable.
14 It is a fair and reasonable.
15 It is a fair, legal and reasonable.
16 Its not legal, but reasonable.
17 Its fair and reasonable.
18 Its not legal and not reasonable.
19 Its fair, legal and reasonable.
20 Its fair, legal and reasonable.
21 Its fair, legal and reasonable.
22. Its fair, legal and reasonable.
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6. Its an illegal no employee can vacate the posts by sending a letter for a mere legal
strike. Because Termination of Employment of Workmen Act states that an employer has
no rights to vacate the posts of employees through a letter send by post.

7. Its an illegal because as per the Industrial Disputes Act still they are in the status of
employees.

8. The two offences can be explained in brief as follows:

1. having sent the VOP letters by post.
2. They didnt recognize the TU

Indeed, the offences which the management committed are illegal as well
as unfair.

9. If the trade union take actions against the company, then the director board is liable to
reply for the actions on behalf of the company name.

10. If there had been a process of Collective bargaining the situation might have been made
fortunate if it got failed then they might have moved into Conciliation subsequently
arbitration

Collective bargaining / agreement:

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(A) Which is between?

1. Any workman
2. Any employer

(B) Which relates to the terms & conditions of employment of any Workman
or to the privileges, rights or duties of any employer?
A collective agreement could cover a large number of matters relevant to the
employee work life including privileges, rights, or duties of parties and
dispute settlement. Parties enter into agreements after negotiations and
agreeing on the terms and all other aspects. Before publishing the agreement
in the Gazette the commissioner of Labor should satisfy himself that the
terms and conditions are not less favorable than those applicable to any other
workman in the same in such district. The most important aspect of the CA is
that the workman can achieve better terms and conditions than the terms he
has already with the employer as an individual worker.

Conciliation:
The IDA has provision for conciliatory measures to be taken by the
commissioner of Labor when complaints are made to him by employees.

Arbitration:
The commissioner of Labor has also been conferred the power to refer
industrial disputes for settlement by arbitration. The industrial disputes act
has provision for voluntary arbitration as well as compulsory arbitration.

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11.

Indeed, the employees were aware of the procedures of settling Industrial Disputes

and very obedient to the legal procedures. There is nothing can be called as betrayal of
the union struggle since its a matter of obeying to the National Scheme to settle the
disputes.

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