9th Semester BALLB | Labour and Industrial Law-II (Paper-III) — Important Questions & Answers

Following the "Suggestion 2025" for the 9th Semester BALLB (Paper-III: Labour and Industrial Law-II)

I. The Industrial Disputes Act, 1947

(i) Define 'Industry' as laid down under the Industrial Act, 1947

Under Section 2(j) of the Industrial Disputes Act, 1947, "Industry" is defined as any business, trade, undertaking, manufacture, or calling of employers and includes any calling, service, employment, handicraft, or industrial occupation or avocation of workmen.

The landmark "Triple Test" established in Bangalore Water Supply v. A. Rajappa (1978) further clarified that an activity qualifies as an industry if it satisfies three criteria:

Systematic Activity: The work must be organized and not casual or for pleasure.
Employer-Employee Cooperation: There must be a cooperative relationship between the employer and the workmen to produce goods or services.
Satisfaction of Human Wants: The activity must be aimed at producing or distributing goods or services to satisfy human wants or wishes (excluding purely spiritual or religious ones).

The Supreme Court emphasized that the absence of a profit motive or capital investment does not prevent an activity from being an industry.

(ii) Does a 'Hospital' come within the definition of an Industry?

The classification of hospitals as an "industry" has evolved through significant judicial shifts.

Initially, in Management of Safdarjung Hospital v. Kuldip Singh (1970), the Supreme Court held that hospitals run by the government or charitable institutions were not industries because they were not engaged in economic activities analogous to trade or business.

However, this view was overruled in the landmark case of Bangalore Water Supply & Sewerage Board v. A. Rajappa (1978). The Court adopted an expansive "worker-oriented" approach, holding that hospitals, regardless of whether they are non-profit or charitable, qualify as an industry under Section 2(j). The Court reasoned that hospital facilities are "services" rendered to the community through a systematic activity involving employer-employee cooperation.

Key Principles from Judicial Decisions:

Character of Activity: It is the nature of the activity, not who conducts it, that matters. If a private person running a hospital would be considered an "industry," the same applies when the government runs it.
Exclusion of Sovereign Functions: While "regal" or sovereign functions (like defense or justice) are excluded from the Act, welfare activities like health services provided by the state fall squarely within the definition of an industry.
Charitable Status is Irrelevant: Even if a hospital offers free services, it is an industry if it employs permanent staff and follows business-like organization.
Inclusion of Research and Training: Institutions like the Vallabhbhai Patel Chest Institute, which focus on research but also provide medical facilities, have been deemed industries by the Delhi High Court.

In summary, hospitals are considered industries because they fulfill the "Triple Test": they carry out systematic service activity, involve cooperation between doctors/staff (workmen) and management (employers), and satisfy the material human want for healthcare. This classification grants hospital staff the status of "workmen," allowing them access to dispute resolution mechanisms and protection against unfair labor practices under the Act.

(iii) Define the term 'Industrial Dispute'

Under Section 2(k) of the Industrial Disputes Act, 1947, an "Industrial Dispute" is defined as any dispute or difference between:

Employers and employers;
Employers and workmen; or
Workmen and workmen.

For a difference to qualify as a legal "industrial dispute," it must be connected to:

Employment or Non-employment: Such as reinstatement after dismissal or disputes over recruitment.
Terms of Employment: Including disputes over wages, bonus, hours of work, or leave.
Conditions of Labour: Such as safety, health, or welfare facilities provided to any person.

Essential Elements:

Factum of Dispute: There must be a real, existing disagreement, not just a difference of opinion.
Parties: The dispute must involve at least one of the combinations listed.
Community of Interest: Traditionally, a dispute had to be collective in nature, affecting several workmen as a class rather than just one individual. However, this was later modified by Section 2A for termination-related cases.

(iv) Whether individual dispute can be treated as Industrial Dispute?

Historically, an individual dispute could only become an industrial dispute if it was espoused (supported) by a trade union or a substantial number of fellow workmen. Without this collective support, a single workman had no standing under the Act.

To address this hardship, Section 2A was inserted into the Act. It provides that where an employer discharges, dismisses, retrenches, or otherwise terminates the services of an individual workman, any dispute arising out of such termination shall be deemed to be an industrial dispute, even if no other workman or union is a party to the dispute.

Consequently:

Termination-related disputes (dismissal, discharge) are automatically treated as industrial disputes under Section 2A, allowing the individual to approach a Labour Court directly.
Other disputes (wages, promotions, bonus) still require espousal by a union or a group of workmen to be classified as an industrial dispute under Section 2(k).

(v) What are the salient features of the Act?

The Industrial Disputes Act, 1947, is a "worker-oriented" statute designed to maintain industrial peace and harmony. Its salient features include:

Scope and Applicability: It applies to all "industries" across India and provides a broad definition of "workman" to include skilled, unskilled, manual, technical, and clerical staff.
Machinery for Settlement: The Act provides multiple levels of intervention, ranging from internal Grievance Settlement Authorities to external bodies like Conciliation Officers, Boards of Conciliation, and Industrial Tribunals.
Protection Against Victimization: It regulates the employer's right to "hire and fire" by requiring notice and compensation for layoff, retrenchment, or closure of undertakings.
Regulation of Strikes and Lockouts: It distinguishes between legal and illegal strikes/lockouts, particularly in public utility services, to prevent the dislocation of work essential to the community.
Adjudication and Enforcement: Awards given by Labour Courts and Tribunals are binding and enforceable, with penalties prescribed for non-compliance.
Collective Bargaining: It promotes the resolution of disputes through negotiation and settlements reached during conciliation proceedings.

(vi) What are the various methods of settlement and adjudication of disputes?

The Act provides a hierarchical machinery for the investigation and settlement of disputes, emphasizing peaceful resolution:

Grievance Settlement Authority (Sec 9C): Industrial establishments with 20 or more workmen must set up this internal mechanism for resolving individual grievances.
Works Committee (Sec 3): Comprising equal representatives of employers and workmen, it promotes amity and good relations by resolving day-to-day differences.
Conciliation Officer (Sec 4): Appointed by the government, their duty is to mediate and persuade parties to reach a fair and amicable settlement. If successful, a "Memorandum of Settlement" is signed.
Board of Conciliation (Sec 5): An ad-hoc body consisting of a chairman and equal representatives of both parties, used for more complex disputes referred by the government.
Court of Inquiry (Sec 6): An investigative body that inquires into matters relevant to a dispute and submits a report to the government within six months.
Voluntary Arbitration (Sec 10A): Parties can mutually agree to refer their dispute to an arbitrator before it is referred to a Tribunal.
Adjudication Machinery:
- Labour Courts (Sec 7): Handle matters in the Second Schedule, such as the legality of orders, discharge, or dismissal of workmen.
- Industrial Tribunals (Sec 7A): Handle matters in the Second and Third Schedules, including wages, bonus, and profit-sharing.
- National Tribunals (Sec 7B): Appointed by the Central Government for disputes involving questions of national importance or affecting establishments in more than one state.

(vii) Define 'Strike' and 'Labour' as laid down under the Industrial Disputes Act

Strike:

Under Section 2(q), a "Strike" means a cessation of work by a body of persons employed in any industry acting in combination, or a concerted refusal under a common understanding to continue to work or to accept employment.

Ingredients:

Plurality of workmen
Cessation of work or refusal to work
Combined action or common understanding

Types: This includes stay-in strikes, go-slows, or pen-down strikes, though their legality depends on compliance with notice requirements under Sections 22 and 23.

Labour (Workman):

The Act uses the term "Workman" (Sec 2(s)) rather than "Labour." It refers to any person (including an apprentice) employed in an industry to do skilled, unskilled, manual, supervisory, technical, or clerical work for hire or reward.

Inclusions: It includes persons who have been dismissed, discharged, or retrenched in connection with an industrial dispute.

Exclusions: It specifically excludes:

Persons subject to Air Force, Army, or Navy Acts
Police officers or prison staff
Persons employed in a mainly managerial or administrative capacity
Supervisors earning more than Rs. 10,000 per month (or those performing managerial functions)

(viii) What are the conditions precedent for closing down an undertaking under the Industrial Disputes Act, 1947?

"Closure" (Sec 2(cc)) means the permanent closing down of a place of employment or part thereof. The conditions for closure vary based on the size of the establishment:

1. General Undertakings (Sec 25FFA):

Employers who intend to close down an undertaking must serve at least 60 days' notice to the appropriate government, stating the reasons for the intended closure. This does not apply to small undertakings with fewer than 50 workmen or those in the construction industry.

2. Large Undertakings (Sec 25-O):

For industrial establishments (factories, mines, or plantations) where 100 or more workmen were employed on average per working day in the preceding 12 months, the following conditions apply:

Application for Permission: The employer must apply to the appropriate government for prior permission at least 90 days before the intended date of closure.
Reasonable Opportunity: The government must give the employer, the workmen, and other interested persons a "reasonable opportunity of being heard".
Criteria for Decision: The government considers the genuineness and adequacy of the reasons, the interests of the general public, and other relevant factors before granting or refusing permission.
Validity of Order: If the government does not communicate its decision within 60 days of the application, the permission is deemed granted.
Compensation: If permission is granted, every workman who has been in continuous service for at least one year is entitled to closure compensation equivalent to 15 days' average pay for every completed year of service.

(ix) What penalties can be imposed on the employer who closes down an undertaking without complying with the provisions of the Act?

The Act provides stringent penalties under Sections 25Q and 25R for non-compliance with closure procedures:

Illegal Closure: If an employer closes an undertaking without applying for permission under Section 25-O or after permission has been refused, the closure is deemed illegal from the date of closure.
Imprisonment and Fines: The employer may be punishable with imprisonment for a term which may extend to six months, or with a fine which may extend to five thousand rupees, or both.
Continuing Contravention: If the contravention continues, a further fine may be imposed for every day during which the violation persists.
Status of Workmen: In cases of illegal closure, the workmen are entitled to all the benefits under the law as if the undertaking had not been closed down (i.e., full wages and continuity of service).
Failure to give Notice (Sec 25FFA): An employer who fails to give the 60-day notice required for smaller undertakings is punishable with imprisonment up to six months or a fine up to five thousand rupees.

II. Trade Union Act, 1926

(i) Define the term 'Trade Union' under the Trade Union Act 1926

Under Section 2(h), a "Trade Union" means any combination, whether temporary or permanent, formed primarily for the purpose of:

Regulating Relations: Between workmen and employers, workmen and workmen, or employers and employers.
Imposing Restrictive Conditions: On the conduct of any trade or business.

The definition also includes a federation of two or more trade unions.

Key Characteristics:

Mutual Confidence: It is an association based on mutual confidence and cooperation for the protection of common interests.
Broad Scope: It can be formed by either workers or employers.
Objective Matters: Whether a group is a trade union is determined by its "primary object" (regulating relations) rather than its name.
Exclusions: It does not affect agreements between partners as to their own business or agreements between an employer and those employed by him regarding their employment.

(ii) What is the procedure for registration of a 'Trade Union'?

The procedure involves the following steps under Chapter II of the Act:

Application (Sec 4): Any seven or more members of a Trade Union can apply for registration by subscribing their names to the rules of the Union.
Minimum Membership (Sec 9A): No union of workmen shall be registered unless at least 10% or 100 workmen (whichever is less), engaged in the establishment, are its members on the date of application, subject to a minimum of seven.
Particulars (Sec 5): The application must be sent to the Registrar with:
- The names, occupations, and addresses of members making the application
- The name of the Union and address of its head office
- Titles, names, ages, and occupations of the office-bearers
- A statement of assets and liabilities (if the union has existed for over a year)
Rules (Sec 6): The Union must have rules covering its name, objects, fund usage, list of members, and the manner of its dissolution.
Registrar's Scrutiny: The Registrar may call for further information or require a name change if it resembles an existing union.
Certificate (Sec 9): If satisfied, the Registrar registers the Union and issues a Certificate of Registration, which is conclusive proof of registration.

(iii) When can the registration of a Trade union be cancelled?

Under Section 10, the Registrar may withdraw or cancel a certificate of registration in the following circumstances:

On Application: If the Trade Union itself applies for cancellation.
Fraud or Mistake: If the certificate was obtained by lying, fraud, or a mistake.
Ceased to Exist: If the Union has effectively stopped functioning.
Willful Contravention: If the Union, after receiving notice from the Registrar, continues to violate any provision of the Act.
Inconsistent Rules: If the Union allows any rule to continue that is inconsistent with Section 6.
Lack of Requisite Members: If a registered Union of workmen ceases to have the minimum number of members (10% or 100) required under Section 9A.

Mandatory Notice: Before cancelling registration (unless on the Union's own application), the Registrar must give at least two months' previous notice in writing, specifying the grounds for the proposed cancellation.

(iv) Discuss briefly the rights and liabilities of registration trade union with case laws

Registration grants a Trade Union a legal status that unregistered unions do not possess. These are governed by Chapter III of the Act.

Rights and Privileges:

Body Corporate: A registered Union becomes a legal person with perpetual succession and a common seal, capable of owning property and entering contracts in its own name.
Criminal Immunity (Sec 17): Office-bearers and members are immune from liability for criminal conspiracy (under Sec 120-B of IPC) for any agreement made in furtherance of valid trade union objects described in Section 15. However, this does not cover acts that are offenses in themselves.
Civil Immunity (Sec 18): No suit is maintainable against a Union or its members for any act done in contemplation of a trade dispute on the ground that it induces a breach of contract or interferes with someone else's business. In Rohtas Industries Staff Union v. State of Bihar, it was held that employers cannot claim compensation for losses caused by an illegal strike under this section.
Contractual Enforceability (Sec 19): Agreements between members of a registered Union in restraint of trade are not void or voidable, despite the Indian Contract Act.
Right to Inspect Books (Sec 20): Members or their representatives have the right to inspect account books and the list of members at any time.

Liabilities and Duties:

Maintenance of Accounts (Sec 28): A Union must send an annual general statement of all receipts and expenditures, audited in the prescribed manner, to the Registrar.
Notification of Changes: Any change in the address of the head office must be reported within 14 days. Changes in name or amalgamation must also be reported to the Registrar.
Limitations on Fund Usage: General funds can only be spent on objects specified in Section 15, such as salaries, legal expenses, and worker welfare.
No Compulsion for Political Funds: Under Section 16, a member cannot be forced to contribute to the political fund or be disadvantaged for not doing so.

(v) How a trade union is formed under the trade union act 1926?

The formation of a trade union is a fundamental right of workers in India, supported by both the Act and Article 19(1)(c) of the Constitution.

Steps in Formation:

Association of Members: A group of workers or employers with a common interest must come together. According to Section 4, a minimum of seven members is required to begin the formal process.
Adopting Rules (Sec 6): The founding members must draft a constitution or "rules" for the union. These rules must define the union's name, its objects (regulating relations), and provide for the safe custody of funds and annual audits.
Appointment of Office-Bearers (Sec 22): The executive committee must be formed. At least 50% of the office-bearers must be persons actually engaged or employed in the industry with which the union is connected. The remaining 50% can be "outsiders" such as lawyers or politicians.
Subscription: Members must agree to pay a subscription. The Act mandates a minimum subscription of 25 paise per month.
Applying for Registration: While registration is not mandatory, it is the step that grants the union legal identity and protections. The application must be filed with the Registrar of Trade Unions of the state.
Minimum Membership Requirement: To prevent the proliferation of "shell" unions, the law requires that at the time of registration, the union must have at least 10% or 100 workmen of the establishment as members.
Inauguration: Once the Registrar issues the Certificate of Registration, the union officially exists as a body corporate with perpetual succession.

In Hindustan Copper Mazdoor Sangh v. Chief Labour Commissioner, it was reaffirmed that any group of workers satisfying the requirements of the Act is entitled to registration as a matter of right.

(vi) What are the privilege of a registered trade union?

A registered Trade Union enjoys several legal privileges that strengthen its bargaining power:

Legal Personality: It becomes a "body corporate," meaning it has a separate legal existence from its members. It can own land, hold property, and enter into contracts.
Perpetual Succession: The union's existence is not affected by the death, resignation, or removal of any member.
Immunity from Criminal Conspiracy (Sec 17): Members are protected from prosecution for criminal conspiracy regarding agreements made for legitimate union objects, provided the act itself is not a crime.
Immunity from Civil Liability (Sec 18): Registered unions are protected from being sued for acts done in furtherance of a trade dispute, such as inducing workers to go on strike, which would otherwise be actionable as "tortious interference".
Vicarious Liability Protection: The Union is not liable for the tortious acts of its agents if they were committed without the knowledge of or contrary to the express instructions of the union executive.
Contractual Privilege (Sec 19): Agreements between members that might otherwise be seen as "restraint of trade" are legally valid.

III. The Industrial Employment (Standing Order) Act, 1946

(i) What do you mean by standing order?

Standing Orders are a set of rules and regulations that formally define the conditions of employment and conduct between employers and workmen in industrial establishments. Before this Act, employment terms were often left to the "law of demand and supply," which led to the exploitation of workers due to their weak bargaining power.

Definition (Sec 2(g)):

The Act defines standing orders as rules relating to matters set out in the Schedule of the Act. These matters include:

Classification of Workmen: Whether they are permanent, temporary, apprentices, probationers, or badlis.
Attendance and Leave: Rules regarding work shifts, latecomers, and the procedure for applying for leave.
Termination and Misconduct: Grounds for suspension, dismissal, or termination, and the notice required for these actions.
Grievance Redressal: Mechanisms for workers to address unfair treatment by the employer.

Legal Nature:

Statutory Nature: In Bagalkot Cement Co. Ltd v. R. K. Pathan (1962), the Supreme Court held that once certified, standing orders become statutory law and are binding on both parties.
Uniformity: The main objective is to establish uniformity in employment terms across the establishment, minimizing friction and industrial strife.
Contractual nature: They operate as an "implied contract" between the employer and every workman.

Applicability:

The Act applies to every industrial establishment employing 100 or more workmen (or 50 in some states like Odisha). If an employer fails to submit their own draft, the Model Standing Orders provided by the government automatically apply to the establishment.

(ii) What is the procedure for submission of draft standing order under the industrial employment (standing order) act 1946?

Within six months from the date the Act becomes applicable to an establishment, the employer must begin the submission process:

Submission (Sec 3): The employer must submit five copies of the draft standing orders to the Certifying Officer.
Content: The draft must cover every matter listed in the Schedule applicable to the establishment.
Conformity: Where Model Standing Orders have been prescribed, the draft must be in conformity with them as far as practicable.
Accompanying Statement: The draft must be accompanied by a statement giving prescribed particulars of the workmen, including the name of the trade union they belong to.
Joint Draft: A group of employers in similar industrial establishments may submit a joint draft for adoption.

(iii) Discuss briefly object and scope of industrial employment (standing order) act 1946

Object:

The Act was introduced to eliminate the "rough deal" given to workers by employers who would not define conditions of service, leading to frequent industrial strife. Its primary objectives are:

To Define Terms: To require employers to formally define conditions of work and make them known to the workmen.
To Ensure Uniformity: To establish a consistent set of rules for all employees within the same category, preventing discrimination.
To Foster Harmony: To cultivate better relations by minimizing the scope for arguments and conflicts regarding workplace rules.
To Prevent Exploitation: By acknowledging terms of employment in writing, it reduces the opportunity for workers to be exploited through arbitrary management decisions.

Scope:

Territorial: The Act extends to the whole of India.
Establishments: It applies to all "industrial establishments" which include factories, railways, mines, quarries, oilfields, plantations, and workshops.
Employee Threshold: It applies to establishments employing 100 or more workmen on any day of the preceding 12 months. The government can extend it to smaller establishments by giving two months' notice in the Official Gazette.
Exclusions: It does not apply to employees covered by specific civil service rules, such as the Fundamental and Supplementary Rules or Railway Establishment Code.

(iv) Is there any provision for modification of standing order under industrial employment (standing order) act 1946?

Yes, Section 10 provides for the modification of certified standing orders to ensure they remain relevant to changing industrial needs.

Conditions for Modification:

Time Limit: Generally, standing orders cannot be modified until the expiry of six months from the date they came into operation or since the last modification.
Mutual Agreement: This six-month limit can be bypassed if there is a mutual agreement in writing between the employer and the workmen (or their trade union) to modify the orders sooner.
Application: Either the employer or the workmen can apply to the Certifying Officer for a change. The application must be accompanied by five copies of the proposed modifications.

Procedure:

The procedure for modification is the same as the initial certification process. The Certifying Officer must give notice to the other party, hear their objections, and decide if the modification is fair and reasonable. In states like Karnataka, mutually agreed modifications are simplified and can be effected by following specific sub-sections of Section 3.

(v) Discuss the provisions related to penalties and procedures in case of failure to submit draft standing order under the said act

The Act ensures compliance through penal provisions under Section 18:

Failure to Submit (Sec 18(1)): An employer who fails to submit draft standing orders within the six-month time limit is punishable with a fine which may extend to five thousand rupees.
Continuing Offense: In case of a continuing offense, an additional fine of two hundred rupees may be imposed for every day the failure persists after the first conviction.
Illegal Modification (Sec 18(2)): An employer who modifies certified standing orders without following the procedure in Section 10 is punishable with a fine up to five thousand rupees, and a daily fine of two hundred rupees for continuing contraventions.
Contravention of Orders: Any action by the employer that violates the provisions of the certified standing orders is punishable with a fine up to one hundred rupees, and a daily fine of twenty rupees for continuing violations.
Procedure: No prosecution can be instituted except with the previous sanction of the appropriate government. The Act also provides for the appointment of Inspectors to monitor establishments and report infringements to the Central Industrial Relations Machinery.

(vi) Explain the procedure for certification of standing order

Once the draft is submitted, the Certifying Officer initiates the following process under Section 5:

Notice to Stakeholders: The Officer forwards a copy of the draft to the registered trade union. If there is no union, the Officer holds an election to choose three/five representatives of the workmen.
Hearing Objections: A notice is issued to the union or representatives, giving them an opportunity to raise objections to the draft within 15 days.
Adjudication: The Certifying Officer adjudicates upon the fairness or reasonableness of the provisions. They have the powers of a Civil Court to receive evidence and enforce the attendance of witnesses.
Certification: After making any necessary modifications to ensure conformity with the Act and Model Standing Orders, the Officer certifies the draft.
Authentication: Authenticated copies must be sent to the employer and union/representatives within seven days.
Enforcement (Sec 7): The certified orders come into effect 30 days after the authenticated copies are sent, provided no appeal is filed.

Ticker

Ad Code

9th Semester BALLB | Labour and Industrial Law-II (Paper-III) — Important Questions & Answers | Suggestion 2025