Industrial Relations

INDUSTRIAL RELATIONS & LABOUR LAWS
Q1 (a).Trace the evolution of Industrial relations in India.
Ans. A study of modern industrial relations in India can be made in three

distinct phases. The first phase can be considered to have commenced
from about the middle of the nineteenth century and ended by the end
of the First World War. The second phase comprises the period thereafter
till the attainment of the independence in 1947, and the third phase
represents the post-independence era.
First Phase : During the first phase, the British Government in India
was largely interested in enforcing penalties for breach of contract and in
regulating the conditions of work with a view to minimising the
competitive advantages of indigenous employers against the British
employers. A series of legislative measures were adopted during the latter
half of the nineteenth century, which can be the beginning of industrial
relations in India.
The close of the First World War gave a new twist to the labour
policy, as it created certain social, economic and political conditions,
which raised new hopes among people for a new social order. There was
intense labour unrest because workers’ earnings did not keep pace with
the rising prices and with their aspirations. The establishment of ILO in 1919
greatly influenced the labour legislation and Industrial relations policy in
India. The emergence of trade unions in India, particularly the formation
of All India Trade Union Congress (AITUC) in 1920 was another significant
event in the history of industrial relations in our country.
Second Phase : The Policy after the First World War related to
improvement in the working conditions and provision of social security
benefits. It was a period of boom for employers. With rising prices, their
profits went up enormously. The wages of workers, however did not keep
pace with this tendency. Their economic distress brought together and an
organised working class movement began in the country resulting strikes
or lockouts. During this period, as a result of ILO influence, various laws
were enacted i.e. Workmen’s Compensation Act (1923), the Trade Unions
Act (1926) and the Trade Disputes Act (1917).
During the Second war, employers made enormous profits. The workers
demanded a share in them. Bonus and dearness allowance were granted
to them but as money wages did not increase in proportion to the rise in
prices. The years immediately following the war were the most disturbed
years from the point of view of the pattern of Industrial relations in India. In
1946 the Industrial Employment (Standing orders) Act and the Industrial
Disputes Act, 1947 provided for the settlement of disputes.
INDUSTRIAL RELATIONS & LABOUR LAWS(Page 1)

Name : (Amresh Anjan)
Third Phase: Immediately after Independence, in the interests of
the national economy, it was considered necessary to put a stop to
strikes/ lockouts that interrupted production. A tripartite conference was,
therefore convened in 1947, at which the industrial Truce Resolution was
adopted, giving paramount importance to the maintenance of industrial
peace. The Minimum Wages Act, The Factories Act and the Employees
State Insurance Act were all enacted in 1948.
When India became independent in 1947, industrial scene was subjected

to considerable amount of chaos and confusion. Industrial unrest and
shattered worker management relations have been prevalent
everywhere. Govt. has emerged as an arbitrator between management
and workers. It is in this context that the Industrial Disputes Act of 1947
deserves importance.
During the second five year plan period, certain norms, mechanisms and
practices were evolved which evolved which formulate the need based
minimum wage, wage boards, guidelines on rationalisation, code of
discipline, code of conduct, scheme for workers participation in
management.

Q1 (b) Define Industrial Relations and examine its nature, scope and objectives.
Ans. The term ‘Industrial Relations’ comprises ‘Industry’ and ‘relations’.

“Industry” means “any productive activity in which an individual is
engaged” and “relations” means “the relations that exist in the industry
between the employer and his workmen.”
V.Agnihotri defines “ the term industrial relations explains the relationship

between employees and management which stem directly or indirectly
from union-employer relationship”.
According to C.B. Kumar “ Industrial relations are broadly concerned with

bargaining between employers and trade union on wages and other
terms of employment”.
Nature or features of Industrial Relations:
1. Industrial relations are the relations, which are the outcome of the
“employment relationship” in an industrial enterprise. Without the
existence of two parties, the employer and the workmen such
relationship cannot exist.
2. This relationship emphasises on the process of accommodations

whereby the parties involved develop skills and methods of adjusting
to and cooperating with each other.
3. The government/State evolves, influences and shapes industrial

relations with the help of laws, rules, agreements, awards of the courts,
and emphasis on usages, customs, traditions, implementations of its
policies and interference through executive and judicial machinery.
4. Every industrial relations system creates a complex of rules and

regulations to govern the work place, and work community with the
main purpose of maintaining harmonious relations between labour
and management by solving their problems through collective
bargaining.
Scope and objectives of industrial relations:

The concept of industrial relations has a very wide meaning and
connotation. In the narrow sense, it means that the employer, employee
relationship confines itself to the relationship that emerges out of the day-
to day association of the management and the labour. In its wider sense,
industrial relations include the relationship between an employee and an
employer in the course of the running of an industry and may project itself
to spheres, which may transgress to the areas of quality control,
marketing, price fixation and disposition of profits among others.

Objectives of Industrial Relations:
i) To safeguard the interest of labour as well as management by

securing the highest level of mutual understanding and goodwill
between all sections in industry which take in the process of
production.
ii) To avoid industrial conflicts, and develop harmonious relations,

which is essential for productive efficiency of workers and industrial
progress in a country.
iii) To raise productivity to a higher level in an era of full employment

by lessening the tendency of higher labour turnover and frequent
absenteeism.
iv) To bring down strikes, lockouts and gheraos by providing better

and reasonable wages and improved living conditions, and fringe
benefits to the workers.
v) To bring about government control over such units and plants,

which are running at losses or where production has to be
regulated in public interest.

Q2(a). Examine the Evolution of Industrial Relations Policies in India.
Ans. Evolution of Industrial Relations Policies
1. In pre-independence India
State intervention in labour/ industrial relations had its beginning when the
British Government in India was constrained to protect its commercial
interests in this country. An ILO Publication observes : “ Far from protecting
the interests of labour, the earlier attempts to regulate labour consisted of
enactments such as the Assam Labour Act, the workmen’s Breach of
Contract Act, 1859, and the Employers’ and Workmen’s (Disputes) Act of
1860. These Acts aimed at protecting the social system against labour
rather than protecting labour against the social system.
Deterioration in working conditions, because of greater development of

industrial units: unduly low wages and consequent dissatisfaction of the
working class; growing indiscipline among the workers; strained relations
between labour and management the formation of ILO: the emergence
of AITUC (1920) and demands for higher wages, improved working
conditions led to serious industrial troubles and labour problems.
The beginning of industrial relations dynamics can be traced back to the

inception of the Indian Labour Conference as far as 1942 by
B.R.Ambedkar, when the policy of bringing together three parties namely,
govt., management and labour on a common platform as consultative
tripartite forum for all matter of labour policy and industrial relations was
accepted.
2. In Post-Independence India
The Industrial Disputes Act (1947) provided for
i. The establishment of a permanent machinery for the settlement of

disputes in the shape of certain authorities like the Works
Committee, Conciliation Officers, Industrial Tribunals, Labour Courts:
ii. Making an award of a Tribunal or any settlement brought about by

the conciliator binding on the parties and legally enforceable.
This Act seeks:
i. The prevention and settlement of industrial disputes in all industries

through conciliation, arbitration and adjudication/
ii. To prohibit strikes lock-outs during the pendency of conciliation and

adjudication proceeding.

In 1950, two bills were brought by the government- a Labour Relations Bill
and a Trade Unions Bill. They retained the provisions of the 1947
amendment. They also introduced the principle that “ collective
bargaining would be compulsory for both employers and unions under
stipulated conditions. Labour courts were empowered to certify unions as
sole bargaining agents.

Q2 (b).Comment on the future of Industrial Relations in India.
Ans. FUTURE OF INDUSTRIAL RELATIONS IN INDIA
1. The first is the issue of strengthening collective bargaining by trying to

determine a sole bargaining agent for negotiation. The state of
Maharashtra has already passed a law for the creation of a sole
bargaining agency in every unit and industry. Collective Bargaining is
advocated where the parties involved have a fuller understanding.
This will help to arrive at a speedier settlement of disputes between
themselves.
2. The second issue relates to the gaps that are occurring as a result of
the variations that occur in Central and State legislation as far as
labour matters are concerned. In India, labour falls under the
Concurrent List though NCL has made a recommendation for forming
a common labour code, which is yet to be adopted. Adoption of this
recommendation will go a long way in solving some of the problems
that India’s legislation process in facing.
3. Another issue is that of worker’s participation in management. India

has already experienced working of many forms of worker
participation schemes but none of them seems to have made any
headway. The reasons for the failure of these schemes need to be
probed into.
Its strategic importance extends beyond the limited frontiers of union-

management relationship and overlaps with the future prospects for
Indian democracy on one hand, and the basic concepts and
assumptions of economic development on the other. The set of
strategic choices must be made in the midst of economic and political
difficulties that the country is undergoing.

Q3 (a).Define Collective Bargaining and examine its characteristics.
Ans. Collective Bargaining is process of joint decision making and basically

represents a democratic way of life in industry. It is a technique adopted
by two parties to reach an understanding acceptable to both through
the process of discussion and negotiation.
According to Prof. Paul Samuelson, “Collective Bargaining is the process

of negotiation between firm’s and worker’s representatives for the
purpose of establishing mutually agreeable conditions of employment”.
ILO has defined Collective Bargaining as, “Negotiation about working
conditions and terms of employment between an employer and a group
of employees or one or more employee, organisation with a view to
reaching an agreement wherein the terms serve as a code of defining the
rights and obligations of each party in their employment relations with one
another.
Characteristics of Collective Bargaining:
1. It is a group process, wherein one group representing the employers

and the other representing the employees sit together to negotiate
terms of employment.
2. Negotiations form an important aspect of the process of Collective

Bargaining i.e. there is considerable scope for discussion, compromise
or mutual give and take in Collective Bargaining.
3. It is flexible or mobile and not fixed or static.
4. Collective bargaining is a process in the sense that it consists of a

number of steps. It begins with the presentation of the charter of
demands and ends with reaching an agreement, which would serve
as the basic law governing labour management relations over a
period of time in an enterprise.
5. It a bipartite process.
6. Collective Bargaining is a complementary process i.e. each party

needs something that the other party has, labour can increase
productivity and management can pay better for their efforts.
7. Collective Bargaining is continuous process.
8. It enables industrial democracy to be effective.
9. Collective Bargaining takes into account day to day changes,

policies, potentialities, capacities and interests.

Q3 (b) Explain how Collective Bargaining can help in dealing with the challenges
posed by the forces of globalisation and liberalisation.
Ans. Collective bargaining is a written document signed by the representatives

of labour and management. It is legal contract, which delineates the
rights and obligations of the contracting parties in detail.
The liberalisation in the scope of C.B
i. The growing strength of the Unions which have pressurized

management to include new subjects in the agreements;
ii. Increases profits, which have led to a favorable response in the

demands of the employees;
iii. Increased prices along with increased production have contributed to

expansion in the subjects for collective bargaining.
iv. The liberal and sympathetic attitude evident in the decisions of the
courts and legislative enactments have also favoured this expansion.
Collective Bargaining in globalisation
The representatives of the trade union and the employer negotiate and
arrive at a settlement, but given the industry-cum-region convention in
India, such national level agreements are few. At some tripartite
conferences convened by the Government of India, certain specific
issues have been negotiated and contracted e.g. the Agreement to
Rationalise Work Practices and manning and related issues, concluded in
1951 between labour unions (INTUC) and management. The other
agreement was the 1956 agreement on bonus for plantation workers
between the representatives of the Indian Tea Planters Association, Indian
Association and representatives of HMS.

Q4 (a) Explain the difference between mediation and conciliation.
Ans. “Mediation” and “Conciliation” are regarded as equivalent terms

referring to essentially the same kind of third-party intervention in
promoting voluntary settlement of disputes.
“Conciliation” is limited to encouraging the parties to discuss their

differences and to help them develop their own proposed solutions. On
the other hand “ Mediation” implies a stronger form of intervention, and
mediator may be permitted to offer to the parties proposals for
settlements.
Mediation is an attempt by which third party brings together the opposing

groups not only to iron out differences between them but also to find
answer to problems or specified proposals and other alternative
suggestions, whereas, Conciliation is a process by which representative of
workers and employers are brought together before a third person or a
group of persons with a view to persuading them arrive at an agreement
by mutual discussion between them.
The conciliator is a neutral third party whereas mediator has been

described as a confidential advisor and an industrial diplomat.
[The distinction between the two terms tends to disappear in industrial

relations practice and there is no consistency in their use from one country
to another.]

Q4 (b) Explain how conciliation helps in preventing and settling industrial disputes
in an industry.
Ans. Process of conciliation that helps in preventing and settling industrial

disputes are mentioned below
The Hard Posture Phase : The parties come to conciliation as

adversaries in an openly declared dispute. They come with hardened
attitudes. During this phase, each party invariably takes the stand that
is wholly right and the other side wholly unreasonable or wrong; neither
party can see or will admit any merit in any argument or proposition
put forward by the other side.
Search for Accommodation : In this phase, each party is primarily
concerned with protecting its own bargaining position. Neither party
normally takes the initiative in adopting an accommodation attitude.
The conciliator’s objective is to induce them to adopt a more flexible
attitude.
Emergence of Appropriate mood for settlement of compromise : Here
the conciliator encourages the parties to make modified proposals
and counter proposals, which might indicate the areas of agreement
within reach. Many conciliation rely upon a straightforward approach
to the parties; others prefer to work in a subtle and calculated manner.
Drafting of Agreement : When the conciliator’s efforts to settle dispute

comes to an end, he takes some action to wind up his handling of the
case. he may write a final report on his invention; and he may assist
the parties in initiating further proceeding if his condition has not been
fully successful.
If a dispute is settled, the fact is reflected in an agreement. The
conciliator adds his signature to an agreement reached during the
conciliation proceedings. The report has to be submitted to the
government as well as to the parties concerned within a specific time,
indicating (a) the steps taken by conciliator to ascertain facts relating
to the dispute (b) the steps taken to bring about the settlement (c) full
settlement of facts and circumstances (d) the reasons for which the
settlement could not be reached.

Q5 (a) Examine benefits arising out of arbitration.
Ans. Arbitration has been popular in foreign countries, particularly in U.S.A

Canada, New Zealand, Malaysia, because of the advantages of this
system are as follows:
1. Since it is established by the parties themselves, arbitration has the

particular advantage of bringing the dispute settlement procedure
sown to the level of the parties to the dispute.
2. Since arbitration is established by agreement, it is more flexible than

other procedures and can be adjusted to the views, desires and
experience of the parties and to the circumstances obtaining in the
undertaking and industry.
3. This procedure, operating at the level closest to the parties to the

disputes, has the advantage of enabling the arbitrators to acquire
much greater familiarity with the characteristics of the particular
industry or undertaking than most courts or tribunals.
4. The procedure is relatively expeditious when compared to that in

ordinary courts or Labour Tribunals. Ii cuts down delays and results in a
prompt settlement of differences.
5. It is informal in character because the disputes are handled by the

parties themselves, often without recourse to lawyers. Arbitration,
therefore, is less expensive than other procedures.
6. Awards are capable of implementation without any grudge on the

part of both the parties to the dispute and do not lead to further
chances of litigation.
7. Since arbitration is based on the consent of both the parties, it helps

build up a sound base for healthy industrial relations, mutual
understanding and co-operation.
8. It is popular because it is suitable and compelling. It is far better than a

costly work stoppage, even though not wholly satisfactory from either
parties point of view.

Q5 (b) What are the various types of arbitration. Explain the importance of each
one of them.
Ans. There are two types of arbitration: (i) Voluntary arbitration (ii)
Compulsory arbitration
i) Voluntary arbitration implies that the two contending parties,

unable to compromise their differences by themselves or with the
help of mediator or conciliator, agree to submit the conflict/
dispute to an impartial authority, whose decisions they are ready to
accept. In other words, under voluntary arbitration the parties to
the dispute can and do themselves refer voluntarily and dispute to
arbitration before it is referred for adjudication. This type of
reference is known as “voluntary reference”, for the parties
themselves volunteer to come to a settlement though an
arbitration machinery.
The essential elements in voluntary arbitration are :

The voluntary submission of dispute to an arbitrator ;
The subsequent attendance of witnesses and investigations,
The enforcement of an award may not be necessary and binding
because there is no compulsion.
Voluntary arbitration may be specially needed for disputes arising
under agreements.
ii) Compulsory arbitration is one where the parties are required to

accept arbitration without any willingness on their part. When one of
the parties to an industrial dispute feels aggrieved by an act of the
other. It may apply to the appropriate government to refer the
dispute to an adjudication machinery. Such reference of a dispute is
known as “compulsory” or “involuntary” reference, because
reference in such circumstances does not depend on the sweet will
of both the contending parties or any party to the dispute.
Under compulsory arbitration, the parties are forced to arbitration by the

state when:
the parties fail to arrive at a settlement by a voluntary method
when there is a national emergency which requires that the wheels of
production should not be obstructed by frequent work-stoppages
the country is passing through a grave economic crisis
there is a grave public dissatisfaction with the existing industrial
relations
public interest and the working conditions have to be safeguarded
and regulated by the state.

Q7 (a) What are the permissible authorised deductions under the Payment of
Wages Act, 1936?
Ans. Deductions from the wages of an employed person shall be made only in
accordance with the provisions of this Act and may be of the following
kinds only namely:
1. Fine
2. Deductions for absence from duty
3. Deduction for damage to or loss of goods expressly entrusted to
employed person for custody, or for loss of money, for which he is
required to account, where such damage or loss is directly attributable
to his neglect or default.
4. Deduction for such amenities and services supplied by the employer or
by government or any housing board.
5. Deduction for such amenities and service supplied by the employer.
(The word service does not include the supply of tools and raw
materials required for the purpose of employment).
6. Deduction for recovery of advances i.e. travelling allowance or
conveyance allowance.
a) deduction for recovery of loans granted for house building or other
purposes approved by the State Government and the interest due
in respect there of.
7. Deductions of Income tax payable by the employed person.
8. Deductions required to be made by the order of court or other
authority competent to make such order.
9. Deductions for subscription to and for repayment of advances from
provident fund to which the provident fund act applies.
10. Deduction for payment to co-operative societies approved by State
Government or to a scheme of insurance maintained by the Indian
Post office.
11. Deduction for payment of premium on his life-insurance policy to the
life insurance corporation of India.
a) deduction made with the written authorization of the employed
person, for the payment of contribution to any fund constituted by
the employer or a trade union registered under Trade Union Act,
1926. Or the members or their families or both approved by the
Government.
b) Deduction made for payment of fees payable by him for the
membership of any Trade Union Act, 1926.
12. Deduction for payment of insurance premium of Fidelity Guarantee
Bonds.
13. Deduction for recovery of losses sustained by a railway administration
on account of any rebates or refunds.
14. Deductions, made with the written authorised of the employed person,
for contribution by the employed person, for contribution to the Prime
Ministers National Relief Fund.
15. Deduction for contribution to any insurance scheme framed by the
Central Government for the benefit of its employees.

(A) The total amount of deductions which may be made in any
wage period from the wages of any employed person shall not
exceed.
(i) In case of payments to co-operative societies seventy five
percent of such wages and
(ii) In any other case fifty percent of such wages.
Q7 (b) Explain the procedure laid down under Minimum Wages Act, 1948 for
fixation and revision of minimum rates of wages.
Ans. Section 5: Procedure for fixing and revising minimum rates of wages
For this purpose, the appropriate government shall either
a) appoint as many committees and sub-committees as it considers

necessary to hold enquiries and advise it in respect of such fixation or
revision, as the case may be or.
b) by notification in the official gazette, publish its proposal for the

information of person likely to be affected thereby and specify a date,
not less than two months from the date of the notification on which
the proposals will be taken into consideration.
Section 6: Advisory Committee and sub-committees shall be formed for

the purpose
Section 7: Advisory Board- For the purpose of co-ordinating the work of

[committees and sub-committees appointed under sec 5] and advising
the appropriate government generally in the matter of fixing and revising
minimum rate of wages, the appropriate government shall appoint an
advisory board.
Section 8.: Central Advisory Board

(1) For the purpose of advising the central and state government in the
matters of the fixation and revision of minimum rates of wages and
other matters under this act and for co-ordinating the work of the
advisory board.
(2) The central advisory board shall consist of persons to be nominated
by the central government representing employers and employees in
the scheduled employments, who shall be equal in number, and
independent persons not exceeding one-third of its total number of
members, one of such independent person shall be appointed the
chairman of the board by the central government.
Section 9:
Composition of committees etc. each of the committees and the
advisory board shall consist of persons to be nominated by the
appropriate government representing employers and employees in the

scheduled employments, who shall be equal in number and independent
persons not exceeding one-third of its total number of members, one of
such independent person shall be appointed the chairman by the
appropriate government.

Q6 (a) What are the model principles for reference of disputes to Adjudication?
Ans. Model principles for reference of disputes to adjudication
The Indian Labour Conference (held in Madras in July 1959) laid down
model principles for reference of disputes to adjudication. The Central
Industrial Relations Machinery is to take these principles into consideration
before recommending adjudication. These principles were:
1. All disputes ordinarily be referred to adjudication on request.
2. Disputes may not, however, be ordinarily referred to adjudication.
a. Unless efforts at conciliation have failed

b. If a strike or lock-out is declared illegal by a court.
c. If the issues involved have been the subject matter of recent
judicial decisions.
d. If it is in respect of demands for which other legal remedies are
available i.e. matters covered by the Factories Act, Workmen’s
Compensation Act, etc.
3. Industrial disputes raised in regard to individual cases, may be referred

for adjudication when legality or propriety of such action is
questioned, and in particular:
a) If there is a case of victimization or unfair labour practice:

b) If the standing orders in force or the principles of natural justice
have not been followed; and
c) If the conciliation machinery reports that injustice has been done
to the worker.
Whenever an industrial dispute exists, or even where there is a mere

apprehension that will arise the government may make a reference of the
dispute for adjudication.
The following principles regarding the powers of the government to make

a reference of industrial disputes have been established by a series of
judicial decision:
i) The Government must be of the opinion that an individual dispute

actually exists or is apprehended.
ii) Government’s order cannot be challenged on ground that, the

Government has no material before it to come to the conclusion
that the dispute exists.

iii) Expediency of making a reference is matter entirely for the
government to decide. Making of reference, is not a duty or an
obligation on the part of the government but a matter of
discretion.
iv) The Government may refer the dispute or any matter appearing to
be connected therewith or relevant to the dispute, whether it
relates to any matter specified in the Second Schedule or the Third
Schedule, to a tribunal for adjudication:
v) Where the dispute relates to any matter specified in the Third

schedule and is not likely to affect more than 100 workers, the
government may make a reference to a labour court;
vi) It is mandatory upon the government to make a reference of

disputes to courts or tribunals where:
a) the dispute relates to a public utility service;
b) a notice of strike or lock-out has been give;
c) where the parties to the dispute apply in the prescribed manner
for reference and the government is satisfied that the persons
represent the majority of each party.

Q6 (b) Define a grievance. Draft a model grievance procedure.
Ans. “ Grievance is any discontent or dissatisfaction, whether expressed or not,

whether valid or not, arising out of anything connected with the company
which an employee thinks, believes and even feels to be unfair, unjust or
inequitable.”
“ A written complaint filed by an employee and claiming unfair

treatment”.
“ A complaint of any one or more workers in respect of wages,

allowances, conditions of work & interpretation of service stipulations,
covering such areas as overtime, leave, transfer, promotion, seniority,
work assignment and discharge constitute grievance”.
Model Grievance Procedure:

GRIEVANCE PROCEDURE
Work with grievance
------------------------- Verbal referring
Immediate Superior
-------------- Time limit for answering … 48 hrs
Dept. Head
-------------- Time limit for answering … 3 days
Grievance Committee
-------------- Recommendation within …. 7 days
Higher management for revision
--------- Union may ask for voluntary arbitration
Voluntary arbitration
Decision binding on both parties

Q8 (a)“Bonus is a dynamic concept”. – Elucidate.
Ans. This Act aims at providing a simpler formula for the payment of bonus to
persons employed in certain establishment on the basis of profits or on the
basis of production or productivity, so that disputes on this account are
minimised. It extends to the whole of India, and is applicable to every
factory as defined under the Factories Act and every other establishment
in which 20 or more persons are employed on any day during a year. The
Government can, however, extend this Act and make it applicable to
establishments employing between 10 and 20 workers. It covers all workers
including supervisors, managers, administrators etc. employed on a salary
or wages not exceeding Rs.3500 per month. The salary or wage of a
worker includes basic wage and dearness allowance only. The Act,
however, is not applicable to apprentices, and it excludes employees in
an establishment and in an industry carried on by or under the authority of
an department of the Central Government or State government. Nothing
in this Act applies to an establishment in the public sector if in any
accounting year, it sells any goods manufactured or produced by it or
renders any services in competition with an establishment in the private
sector, and income from such sale of goods or services rendered, or both,
is less than 20 percent of its gross income for that year.
In the case of new establishment bonus is not payable during the first five
accounting years following the accounting year in which the employer
sells goods. For the accounting year in which the employer derives profit
from such establishment, bonus for this year is to be calculated in
accordance with the provisions of this Act in relation to the year, but
without applying the provision regarding set on and set off.

Q8 (b) Examine the provisions relating to registrations of Union under Trade Unions
Act, 1926.
Ans. Provision relating to registration of union
a. the name of the Trade Union

b. the whole of the objects for which the Trade Union has been
established
c. the purposes for which the general fund of the trade union shall be
applicable
d. the maintenance of the members of the Trade Union and adequate
facilities there of for inspection
e. the admission of ordinary members and admission of the number of
honorary or temporary members as [office bearers]
ee. The payment of a subscription by members of the Trade Union
which shall not be less than Rs.12/- per annum per member in
case of union in organised section, Rs.3/- p.a. per member in the
Unorganised Sector and Re.1/- p.a. per member for the unions in
the rural sector. (The change in subscription has been made by
the amendment of 2001 to the Trade Unions Act.)
f. the conditions under which any member shall be entitled to any
benefit assured by the rules and under which any fine or forfeiture may
be imposed on the members
g. the manner in which the rules shall be amended, varied or rescinded;
h. the manner in which the members of the executive and other office
bearers of the Trade Union shall be appointed and removed
i. the safe custody of the funds of the Trade Union, and annual audit, in
such manner as may be prescribed, of the accounts thereof, and
adequate facilities for the inspection of the accounts books by the
[office-bearers] and the members of the Trade Union; and
j. the manner in which the Trade Union may be dissolved.

Q9 (a) Critically examine the benefits that are available to the insured persons
and their dependents under the Employees State Insurance Act, 1948.
Ans. Section 46: Benefits:
The insured persons and their dependents shall be entitled to the following
benefits, namely;
a. Periodical payments to any insured person in case of his sickness

certified by a duly appointed medical practitioner- This is the sickness
benefit. In order to claim this benefit the insured person should have
contributed for atleast 78 days during the contribution period. The
benefit is paid at a Standard Benefit rate which is close to 50% of the
average wage. Sickness benefit is available for maximum 91 days
during 2 consecutive benefit periods. Extended sickness benefit is
available to an insured person who is a member of the ESI scheme for
a minimum period of 2 years. If such an insured person contracts any
specified malignant disease then he is eligible to claim extended
sickness benefits for 309 days. This benefit is payable at a rate 25%
more than the standard benefit rate. Enhanced Sickness Benefit is
available to an insured person when he/she undergoes family
planning operation. This benefit available for a period ranging
between 6 days to 12 days depending upon the type of operation.
This benefit paid at double the standard benefit rate.
b. Periodical payment to an insured woman in case of confinement or

miscarriage or sickness arising out of pregnancy, confinement,
premature birth of child or miscarriage. This is Maternity Benefit. This
benefit is available to an insured woman if she has contributed for
minimum 70 days prior to confinement. The maternity benefit is paid at
a rate which is double the standard benefit rate.
c. Periodical payments to an insured person suffering person suffering

disablement as a result of an employment injury sustained as an
employee under this Act. This benefit is available to an insured person
right from day one. In order to avail this benefit the insured person who
has met with an employment injury should be disabled a from joining
duties for minimum 3 days. This benefit is paid at a rate which is 40%
above the standard benefit rate.
d. Periodical payments to such dependants of an insured person who

dies as result of an employment injury. It is known as Dependants
benefit. This benefit is paid to the spouse and two minor children. This
amount is paid on a monthly basis depending upon on the last income
of the insured person. Out of the payable amount 3/5 is given to the
widow and 2/5 is given to the children. Each child gets 1/5 of the
amount. The child gets this amount till reaches the age of 18 years, the

widow gets this amount till her death or till her re-marriage whichever is
earlier.
e. Medical treatment for attendance on insured persons- it is known as

Medical Benefit.
f. Payment to the eldest surviving member of the member of the family

of an insured person who has died, towards the expenditure on the
funeral of the deceased insured person- this is known as funeral
benefit. The amount payable as funeral benefit present is Rs.2500/-

Q9(b). Explain the contents of the Employees Deposit Linked Insurance and the
Pension Scheme, 1995.
Ans. Employees Deposit Linked Insurance Scheme
This scheme was introduced by an amendment in the year 1976.

It provides for relief to the nominee of the Provident Fund subscriber in
case of premature death of the subscriber
No contribution is payable by the employee under the scheme, but
the employer has o make contributions @ 0.5 % of basic wage,
dearness allowance and retaining allowance.
Benefits
In case of premature death, if the employees balance for the past

three years is Rs.1000 then he gets an equivalent amount subject to
max. Rs.60,000 /-.
If employers formulate a better scheme than the EDLI then can be
obtained from the Government.
LIC provides for Rs.62,000/- in its scheme irrespective of balance in the
subscribers account.
Employees Pension Scheme 1995: - This scheme retrospectively or

prospectively providing for industrial workers superannuation pension,
retiring person, children pension or orphan pension.
Applicability and Eligibility: The scheme applies to all factories and

other establishments to which Employees’ Provident Funds and
Miscellaneous Provisions Act, 1952 is applicable, including the exempted
establishments.
Pension Fund and Contribution: - The pension fund consists of—
i. Employers’ contribution of 8.33% of employees pay which will be

diverted from the Provident Fund, whether exempted or unexempted,
limited to the pay of Rs. 5000 p.m. only.
ii. Central Governments contribution of 1.16 % of the pay of the members

of the Employees’ Pension Scheme limited to the pay of Rs.5000 only.
iii. Net assets of the Employees’ Family Pension Fund Scheme 1971, will
vest in and stand transferred to the Employees’ Pension Fund.
In Industries where employers’ contribution is 10%, the excess of 1.67%
limited to pay Rs.5000 will have to be remitted to the Employees’
Provident fund.

Q10(a)Define Industrial dispute. Explain as to when an individual dispute
becomes an industrial dispute.
Ans. Section 2 (k) of the Industrial Dispute Act, 1947, defines Industrial dispute
means any dispute or difference between employers and employers or
between employers and workman, or between workman and workman.
Which is connected with the employment or non- employment or the
terms of employment or with the conditions of labour of any person.
Trade Unions as such are not mentioned in the definition of “ Industrial

Dispute” because they act on behalf of the workmen and, therefore,
when trade union raises a dispute, the workmen are deemed to be
parties to the dispute. However, the parties to the industrial dispute do
not include disputes (i) between Government & an industrial
establishment or (ii) between workmen and non–workmen.
Individual dispute means any dispute or difference between employer

and workmen regarding his dismissal, discharge, retrenchment or
termination. It shall be treated as an individual dispute.
An individual dispute becomes an industrial dispute where the workmen

of an establishment have no union of their own and some or all of them
have joined a union of another establishment belonging to the same
industry, if such a union takes up the cause of the workmen working in an
establishment which has no union of its own, the dispute would become
an industrial if such a union can claim a representative character in a
way that its support would made the dispute an industrial dispute.

Q10(b) Explain the procedure laid down under the Industrial Employment
(Standing Orders) Act, 1946 for certification and modifications of Standing
Orders.
Ans. Procedure for certification
On receipt of draft standing orders from the employers the certifying

officer sends copies of the same to the workmen and their union
requiring them to send their comments or objections, if any, within 15
days of receiving notice. After giving the employers and the workmen for
their trade union as opportunity of being heard and after considering
the fairness and reasonableness of the proposed standing orders, he
certifies the same with or without any modification. He has the power to
adjudicate any controversial matters, within seven days after certification
he sends copies of the certified standing orders to the parties concerned.
If the latter feel aggrieved by his order, they can appeal against if within
30 days from the date on which copies of the certified standing orders
are sent, to the Appellate Authority appointed under the Act, whose
decision is to be final. The Authority has to send copies of its order
confirming or modifying the standing orders as certified by the certifying
officer to the parties concerned within 7 days of passing the order. (Sec.
4,5,6)
Procedure for Modification
The application for modification of standing orders must be

accompanied by five copies of the modifications proposed to be made
and where such modifications are proposed to be made by agreement
between employer and the workmen, a certified copy of that
agreement shall be filed along with the application. Thus the only way to
give effect to the amendment was by resorting to the procedure of
amendment contemplated by section 10 of the Industrial Employment
(Standing Orders) Act, 1946. Until the existing certified standing orders are
suitably amended, the model standing orders could not be deemed to
be applicable to the concerned establishment.
The aforesaid provisions of the Act, shall apply in respect of the

application for modification as they apply to the certification of first
Standing Orders. But the said provision is not applicable to an industrial
establishment in respect of which the appropriate Government, is the
Government of the State of Gujarat or Maharashtra.


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INDUSTRIAL RELATIONS & LABOUR LAWS

Q1 (a).Trace the evolution of Industrial relations in India.

Ans. A study of modern industrial relations in India can be made in three

INDUSTRIAL RELATIONS & LABOUR LAWS(Page 1)

When India became independent in 1947, industrial scene was subjected

INDUSTRIAL RELATIONS & LABOUR LAWS(Page 2)

Ans. The term ‘Industrial Relations’ comprises ‘Industry’ and ‘relations’.

V.Agnihotri defines “ the term industrial relations explains the relationship

According to C.B. Kumar “ Industrial relations are broadly concerned with

Nature or features of Industrial Relations:

2. This relationship emphasises on the process of accommodations

3. The government/State evolves, influences and shapes industrial

4. Every industrial relations system creates a complex of rules and

Scope and objectives of industrial relations:

INDUSTRIAL RELATIONS & LABOUR LAWS(Page 3)

i) To safeguard the interest of labour as well as management by

ii) To avoid industrial conflicts, and develop harmonious relations,

iii) To raise productivity to a higher level in an era of full employment

iv) To bring down strikes, lockouts and gheraos by providing better

v) To bring about government control over such units and plants,

INDUSTRIAL RELATIONS & LABOUR LAWS(Page 4)

Ans. Evolution of Industrial Relations Policies

Deterioration in working conditions, because of greater development of

The beginning of industrial relations dynamics can be traced back to the

The Industrial Disputes Act (1947) provided for

i. The establishment of a permanent machinery for the settlement of

ii. Making an award of a Tribunal or any settlement brought about by

This Act seeks:

i. The prevention and settlement of industrial disputes in all industries

ii. To prohibit strikes lock-outs during the pendency of conciliation and

INDUSTRIAL RELATIONS & LABOUR LAWS(Page 5)

INDUSTRIAL RELATIONS & LABOUR LAWS(Page 6)

Ans. FUTURE OF INDUSTRIAL RELATIONS IN INDIA

1. The first is the issue of strengthening collective bargaining by trying to

3. Another issue is that of worker’s participation in management. India

Its strategic importance extends beyond the limited frontiers of union-

INDUSTRIAL RELATIONS & LABOUR LAWS(Page 7)

Ans. Collective Bargaining is process of joint decision making and basically

According to Prof. Paul Samuelson, “Collective Bargaining is the process

Characteristics of Collective Bargaining:

1. It is a group process, wherein one group representing the employers

2. Negotiations form an important aspect of the process of Collective

3. It is flexible or mobile and not fixed or static.

4. Collective bargaining is a process in the sense that it consists of a

6. Collective Bargaining is a complementary process i.e. each party

7. Collective Bargaining is continuous process.

8. It enables industrial democracy to be effective.

9. Collective Bargaining takes into account day to day changes,

INDUSTRIAL RELATIONS & LABOUR LAWS(Page 8)

Ans. Collective bargaining is a written document signed by the representatives

The liberalisation in the scope of C.B

i. The growing strength of the Unions which have pressurized

ii. Increases profits, which have led to a favorable response in the

iii. Increased prices along with increased production have contributed to

Collective Bargaining in globalisation

INDUSTRIAL RELATIONS & LABOUR LAWS(Page 9)

Ans. “Mediation” and “Conciliation” are regarded as equivalent terms

“Conciliation” is limited to encouraging the parties to discuss their

Mediation is an attempt by which third party brings together the opposing

The conciliator is a neutral third party whereas mediator has been

[The distinction between the two terms tends to disappear in industrial

INDUSTRIAL RELATIONS & LABOUR LAWS(Page 10)

Ans. Process of conciliation that helps in preventing and settling industrial