UNIT - VIII

Industrial Disputes

An industrial dispute may be defined as a conflict or difference of opinion between

management and workers on the terms of employment. It is a disagreement between an
employer and employees' representative; usually a trade union, over pay and other
working conditions and can result in industrial actions. When an industrial dispute
occurs, both the parties, that is the management and the workmen, try to pressurize each
other. The management may resort to lockouts while the workers may resort to strikes,
picketing or gheraos.

As per Section 2(k) of Industrial Disputes Act,1947, an industrial dispute in defined as

any dispute or difference between employers and employers, or between

employers and workmen, or between workmen and which is connected with the
employment or non-employment or the terms of employment or with the conditions of
labor, of any person.

This definition includes all the aspects of a dispute. It, not only includes the disagreement
between employees and employers, but also emphasizes the difference of opinion
between worker and worker. The disputes generally arise on account of poor wage
structure or poor working conditions. This disagreement or difference could be on any
matter concerning the workers individually or collectively. It must be connected with
employment or non-employment or with the conditions of labor.

From the point of view of the employer, an industrial dispute resulting in stoppage of
work means a stoppage of production. This results in increase in the average cost of
production since fixed expenses continue to be incurred. It also leads to a fall in sales and
the rate of turnover, leading to a fall in profits. The employer may also be liable to
compensate his customers with whom he may have contracted for regular supply. Apart
from the immediate economic effects, loss of prestige and credit, alienation of the labor
force, and other non-economic, psychological and social consequences may also arise.
Loss due to destruction of property, personal injury and physical intimidation or
inconvenience also arises.

For the employee, an industrial dispute entails loss of income. The regular income by
way of wages and allowance ceases, and great hardship may be caused to the worker and
his family. Employees also suffer from personal injury if they indulge into strikes n
picketing; and the psychological and physical consequences of forced idleness. The threat
of loss of employment in case of failure to settle the dispute advantageously, or the threat
of reprisal action by employers also exists.

Prolonged stoppages of work have also an adverse effect on the national productivity,
national income. They cause wastage of national resources. Hatred may be generated
resulting in political unrest and disrupting amicable social/industrial relations or
community attitudes

ESI Act (Employee state insurance Act)

The promulgation of Employees’ State Insurance Act, 1948 envisaged an integrated need
based social insurance scheme that would protect the interest of workers in contingencies
such as sickness, maternity, temporary or permanent physical disablement, death due to
employment injury resulting in loss of wages or earning capacity. the Act also guarantees
reasonably good medical care to workers and their immediate dependants.

Following the promulgation of the ESI Act the Central Govt. set up the ESI Corporation
to administer the Scheme. The Scheme, thereafter was first implemented at Kanpur and
Delhi on 24th February 1952. The Act further absolved the employers of their obligations
under the Maternity Benefit Act, 1961 and Workmen’s Compensation Act 1923. The
benefit provided to the employees under the Act are also in conformity with ILO
conventions.

Workmen's Compensation Act, 1923: Provisions and Applicability

New Delhi, March 06, 2007

The Workmen's Compensation Act, 1923 is one of the important social security
legislations. It aims at providing financial protection to workmen and their dependants in
case of accidental injury by means of payment of compensation by the employers.

This Act makes it obligatory for the employers brought within the ambit of the Act to
furnish to the State Governments/Union Territory Administrations annual returns
containing statistics relating to the average number of workers covered under the Act,
number of compensated accidents and the amount of compensation paid.

Applicability of the Act

The Act extends to the whole of India except the States/Union Territories of Arunachal
Pradesh, Mizoram, Nagaland, Sikkim and Daman & Diu and Lakshadweep.

The Act applies to workers employed in any capacity specified in Schedule II of the Act
which includes Factories, Mines, Plantations, Mechanically Propelled Vehicles,
Construction Work and certain other Hazardous Occupations and specified categories of
Railway Servants.

Main Provisions and Scope of the Act

Under the Act, the State Governments are empowered to appoint Commissioners for
Workmen's Compensation for (i) settlement of disputed claims, (ii) disposal of cases of
injuries involving death, and (iii) revision of periodical payments. Sub-section (3) of
Section 2 of the Act, empowers the State Governments to extend the scope of the Act to
any class of persons whose occupations are considered hazardous after giving three
months notice to be published in the Official Gazette. Similarly, under Section 3(3) of the
Act, the State Governments are also empowered to add any other disease to the list
mentioned in Parts A and B of Schedule – II and the Central Government in case of
employment specified in Part C of Schedule III of the Act.

Compensation

In case of death the minimum amount of compensation fixed is Rs. 80,000 and Rs.
90,000 in case of permanent total disablement. The existing wage ceiling for computation
of maximum amount of compensation is Rs. 4000. The maximum amount of
compensation payable is Rs. 4.56 lakh in the case of death and Rs. 5.48 lakh in the case
of permanent total disablement.

The Factories Act is a social legislation which has been enacted for occupational safety,
health and welfare of workers at work places. This legislation is being enforced by
technical officers i.e. Inspectors of Factories, Dy. Chief Inspectors of Factories who work
under the control of the Chief Inspector of Factories and overall control of the Labour
Commissioner, Government of National Capital Territory of Delhi.

APPLICABILITY

It applies to factories covered under the Factories Act, 1948. The industries in which ten
(10) or more than ten workers are employed on any day of the preceding twelve months
and are engaged in manufacturing process being carried out with the aid of power or
twenty or more than twenty workers are employed in manufacturing process being
carried out without the aid of power, are covered under the provisions of this Act.

SALIENT FEATURES OF THE ACT ARE

1. Approval of Factory Building Plans before construction/extension, under the Delhi

Factories Rules, 1950.
2. Grant of Licenses under the Delhi Factories Rules, 1950, and to take action against
factories running without obtaining License.
3. Renewal of Licenses granted under the Delhi Factories Rules, 1950, by the Dy. Chief
Inspectors of Factories.
4. Inspections of factories by District Inspectors of Factories, for investigation of
complaints, serious/fatal accidents as well as sue Moto inspections to check compliance
of provisions of this Act relating to

I. Health
II. Safety
III. Welfare facilities
IV. Working hours
V. Employment of young persons
VI. Annual Leave with wages etc.

Administrative Machinery : -

The enforcement of this legislation is being carried out on district basis by the district
Inspectors of Factories. After inspection, Improvement Notices are issued to the
defaulting managements and ultimately legal action is taken against the defaulting
managements. The Inspectors of Factories file Challans against the defaulters, in the
Courts of Metropolitan Magistrates. The work of Inspectors of Factories is supervised by
the Dy. Chief Inspector of Factories on district basis.

Penalties

This Act provides for a maximum punishment up to two years and or a fine up to Rs. one
lakh or both.

Labour Legislation refers to all laws of the Government which have been enacted to
provide social and economic security to the labour or workers. The evils of industrial
volution have led to the labour legislation.

Payment of Bonus Act, 1965

1. Applicability
2. Eligibility
3. Benefits
4. Penal Provisions

Applicability

(a) Every factory (as def. in Factories Act), & (b) Every other establishment in which 20
or more persons (less than 20 but 10 or more if appropriate Govt. notifies) are employed
on any day subject to certain exemptions.

ii) Employees' drawing remuneration of Rs. 3,500/- or more and those who have worked
for less than 30 days are not eligible to receive bonus under the Act.
iii) Bonus to be paid within eight months from the expiry of the accounting year.

Eligibility

i) Every person (other than an apprentice) drawing salary up to RS 3,500 per month.
Ii) Every person drawing salary between RS 2,501/- and RS 3,500/- per month. The
bonus payable to him is to be calculated as if his salary were RS 2,500/- p.m.
Benefits
i) Subject to other provisions :— Minimum bonus shall be 8.33% of salary/wages earned
or RS 100 whichever is higher.
ii) If allocable surplus exceeds the amount of minimum bonus, then bonus shall be
payable at higher rate subject to a maximum 20% of salary/wages.
Iii) Computation of bonus is to be worked out as per Schedule I to IV of the Act.

Penal Provisions

Imprisonment up to 6 months and or fine up to RS 1000/-.

Labour Legislation refers to all laws of the Government which have been enacted to
provide social and economic security to the labour or workers. The evils of industrial
volution have led to the labour legislation. Now the state has a direct interest in the
industrial peace and prosperity. These acts are aimed at reduction of production losses
due to industrial disputes and to ensure timely payment of wages and other minimum
amenties of the workers.

Need of labour Legislation:

The basic principle of industrial legislation is to ensure social justice to the workers . The
object of legislation is the equitable distribution of profits and benefits accruing from
industry between industrialists and workers and affording protection to the workers
against harmful affects to their health safety and morality.In a developing country like
India, Labour legislation becomes especially important because of the following reasons :

1. Labour organizations are relatively weak and in most of the cases, they depend merely
on the mercy of the employers. Individual worker is economically very weak and is
unable to bargain his terms with the employers. Now the prior payment of wages lay off,
dismissal, retrenchments etc , are all governed by legislation. The economic insecurity of
the workers is removed to a great extent.

2. In many organizations, workers may feel occupational insecurity. The workers may not
be given by amount in case of accidents, death, occupational Act, Employees State
Insurance Ac, certain benefits have been statutarily given to workers which the
employees otherwise may not get from their employers.

3. In any factories, there important working conditions on account of which the

employees health and safety is always in danger. The factories Act contains a number of
provisions relating to health safety and welfare of workers. Special provisions have been
made for the women.

4. Labour legislation is also necessary from the view point of law and order situation and
national security of the country. State plays a vital role I the continuing production. It
helps in the economic development of the country. The idea of Welfare State is embodied
in the Directive Principles of the constitution and for reason, various labour laws have
been enacted to protect the sections of the society.

5. Labour Legislation is one of the most progressive and dynamic instruments for
achieving socio-economic progress

Objectives of Labour Legislation

The main objectives for various labour laws are as follows :

1. To protect the workers from profit seeking exploiters.

2. To promote cordial industrial relations between employers and employees.
3. To preserve the health safety and welfare of workers.
4. To product the interests of women and children working in the factories.

Principles of Labour Legislation:

There are four principles on which the labour legislation is based viz,

1. Social Justice
2. Social and Economic Justice
3. National economy
4. International conventions

Social Justice:

The concept of social justice refers to providing justice to everyone in the society so that
the poor are not exploited by the rich. It is an in the interest of both employers and
employees that they should consider themselves as two wheels of a cart and firmly
believe that one cannot exist without the other.

National Economy:

Labour legislation ensures industrial peace and helps in the industrialization of the
country. The Directive principles of the constitution contain the idea of welfare state. It is
a fundamental of a welfare state to look after the interest of workers who are the weakest
section of the society and satisfy their physical needs with the increase in productivity the
benefits are shared with the workers, resulting ih their prosperity. Thus for the growth of
economy and development of the country, labour legislation acts as guiding principle.

International Conventions:

International labour originations aims at securing the minimum standard of living for the
workers throughout the world. If any convention is passed by govt, it becomes binding if
it is ratified by any country. Thus, labour legislation is guided by these conventions.