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Chapter V

Globalization and judicial trends

in the industrial relations

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Globalization and Judicial Trends in the Industrial Relations:

5.1 : Introduction :

In India, before independence, the industrial workers are the worst

affected people of the country. At that time, they had no right to organize

themselves in to unions, they had no right to bargain with the employer

collectively and they could not seek protection to their natural rights.

Soon after independence, India embarked upon the process of planning to

develop and harness the country’s resources so that there is transformation of the

Indian economy. The Constitution of India imposes heavy responsibility on the

three constitutional organs of the State, namely Legislature, Executive and

Judiciary, to steer the ship of governance to have a smooth sail to reach the

preamble destination of democratic socialism, wherein justice, equality, liberty

and fraternity would reign with a spirit of peaceful coexistence. Accordingly, the

executive has taken up its responsibility and started its mission through planning

and formulating policies.1

With Independence, India has to pass through economic revolution, which

is a transition from primitive rural economy to scientific and planned agriculture

and industry.2

1 Among the three constitutional organs of the State, the executive is vested with the function of planning and formulation of policies and implementation of the programme to achieve plan targets. 2.K. Santhanam , in a magazine section , The Hindustan Times New Delhi , September 1946 cited in Granvile Austin: The constitution of India – Corner Stone of a nation op cit , p 26.

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The economic development has influenced the personality development of

various sections of people including the industrial sector. The planning process

has facilitated the growth of the industry. Planning involves identification of the

goals, determination of means to achieve those goals, application of techniques to

balance the available resources and to analyze the other alternatives of ends and

means. The need for planning, as a means of economic growth, is universally felt

by all the economies in the world, especially after the Great Depression of 1930s,

though, by then, soviet Russia had achieved a fantastic economic growth by

making a pioneer attempt in planning by 1914 itself.1

Article 39 (c) provides that the operation of the economic system does not

result in the concentration of wealth and means of production to the common

detriment. These are the constitutional directives to be complied with the State

while planning for the development. They call for a socialistic patterned planning.

Accordingly, it sets out the following four long-term objectives2 namely

A. to increase production to the maximum possible extent so as to achieve higher

Level of national and per capita income.

B. to achieve full employment

C. to reduce inequalities of income and wealth and

D. to set up a socialist society based on equality and justice devoid of

exploitation.

1 V.B. Singh, Capitalism,, socialism in India, Sterling Publishers Pvt. Ltd. New Delhi, p.61 2 1.Ruddar Datt and K.P.M. Sundaram , Indian Economy (56th edition ) Chand &Co. New Delhi, (2007) , p.156.

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Industrialization is one of the conditions for economic development of a

country and a proper industrialization is chartered out in India through industrial

policies, which are adopted on the bedrock of a socialistic pattern of society. In

order to implement the measures contemplated under industrial policies,

legislations are indispensable instruments. Industrial Legislations, a broad

prospective, include regulatory legislations as well as labour welfare legislations.

Regulatory legislations are enacted to regulate industrial affairs, to promote

industrial peace and harmony, to canalize industrial growth in desired direction, to

control monopolistic trade practices and to prevent concentration of economic

wealth. Labour legislations provide welfare and social security measures.

Industrial and labour legislations derive their authority from constitutional

provisions. Industrial democracy with industrial growth is the primary goal of the

industrial policies of India. It has come to be realized that “an industry is a social

world in miniature.”1

5.2: Indian Industrial Policies and the judicial responses:

Judiciary, one of the three great branches of the State is a creature of the

Constitution and the Supreme Court of India is the apex body, the most revered

and adulated of all the institutions. In the words of Justice Krishna Iyer “the

Supreme Court is expected to grasp “the dharma” of the Constitution to discharge

“the Karma “and adjudication in a clear manner.2 Democratic values and

principles under the Constitution demand that, when they failed to do so, the court

1.Kothari, G.M.,A study of Industrial law, p.1 cited in M.N. Misra , Labour and Industrial Law, Allahabad Law Agency , Allahabad (2003) , p.7. 2.Krishna Iyer .J. , D.G. Mahajan Vs. State of Maharashtra (1972 ) 2 SCR 815

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stood ready to intervene to protect these democratic values as appropriate.

Justifying the power of the Judicial Review in the context of Golaknath’s case,

Upendra Baxi stated that -- “If there were no brakes, the engine of the amending

power would soon over run the constitution. The brakes must be provided some

where and the Bill of Rights was the place where the amending power should be

stopped1.”

In certain cases, the Supreme Court had displayed an admirable attitude of

respecting collective wisdom of parliament, adopting a policy of judicial restraint

and pursuing a course of liberal interpretation of law in matters of policy

decisions and measures2.

After independence, the concept of social justice was introduced and the

labour law developed more as a judgment law. There were various laws but with

the intervention of judiciary, the labour law was moving in a progressive

direction. The issues concerning the labour matters such as wage, minimum wage,

fair-wage, employment security, social security, etc. were initiated.

Between 1970 and 1980, the definition of industry was widened;

employment security was given to worker as a right. The right to get the back

wages if the dismissal of the worker was found to be unjustified, and the worker’s

right to strike was declared as legitimate weapon for collective bargaining. Until

1980’s, the labour laws were developed to suit the interest of working class. But

now the recent judgments show that the judiciary has taken a U-turn.

1 Upendra Baxi, Indian Supreme Court and Politics, Eastern Book Co. Lucknow (1980) p.19. 2 Upendra Baxi, India Supreme Court and Politics, ,Eastern Book Co. Lucknow (1980) p. 34

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During the sixties and the seventies, the judiciary played a very

progressive role in protecting the rights of labour, since 1968, the burden of proof

was on the party filing case against the worker. Nevertheless, in Municipal

Corporation Faridabad v. sirinivas, SC 2004 the burden of proof has been cast on

the worker. If the worker was retrenched, still he has to prove that he worked for

240 days, while the attendance records are with the employer. In recent case of

Uma Devi, the court remarked that the worker does not have any right to service

even if he worked for 10 - 20 years as millions are waiting for employment.

In Smt. Saran Kumar Gaur and others case1 the Court observed that when

work is not done remuneration is not to be paid and accordingly did not make any

direction for award of past salary. In State of U.P. and Anr. vs. Atal Behari Shastri

and anr. JT 1992 (5) 523, a termination order passed on 15.7.1970 terminating the

services of a License Inspector was finally quashed by the High Court in a writ

petition on 27.11.1991 and a direction was issued to pay the entire back salary

from the date of termination till the date of his attaining superannuation. The

Court, in absence of a clear finding that the employee was not gainfully employed

during the relevant period, set aside the order of the High Court directing payment

of entire back salary and substituted it by payment of a lump sum amount of

Rs.25,000/2-Where there was a dispute regarding seniority and promotion to a

higher post, the Court did not make any direction for payment of higher salary for

the past period on the principle 'no work no pay' as the respondents had actually

not worked on the higher post to which they were entitled to be promoted 3.

1 Saran Kumar Gaur and others vs. State of Uttar Pradesh and others 1993 (2) SC 478], 2 State of U.P. and Anr. vs. Atal Behari Shastri and anr. 1993 (2) SCC 207. 3 Virender Kumar, General Manager, Northern Railways, New Delhi vs. Avinash Chandra Chadha and others AIR 1991 SC 958.

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The appellant, Assistant Manager in the Bank, was dismissed from service

on 28.5.1985, but the Court on 6.2.1995 allowed his appeal as his dismissal order

was found to be suffering from an inherent defect. His claim for arrears of salary

for the past period came to about Rs.20 lakhs but the Court observed that a huge

amount cannot be paid to anyone for doing no work and accordingly directed that

a compensation amount of Rs.50, 000/- be paid to him in lieu of his claim for

arrears of salary.1

In Anil Kumar Gupta’s case, the appellants were employed as daily wage

employees in Water and Land Management Institute of the Irrigation Department

of Government of Bihar and they were working on the posts of steno-typists,

typists, machine operators and peons, etc. The Court allowed the appeal of the

workmen and directed reinstatement but specifically held that they would not be

entitled to any past salary. These authorities show that an order for payment of

back wages should not be passed in a mechanical manner but host of factors are to

be taken into consideration before passing any order for award of back wages.2

There is a sea- change in its role after the introduction of reforms. The

Supreme Court judgment in 2003 declared that the government employees have

“no fundamental, legal, moral or equitable right to go on strike.” The judiciary

had also reversed its own judgment on contract labour absorption in the case of

SAIL3.

1 Surjit Ghosh vs. Chairman and Managing Director, United Commercial Bank and others AIR 1995 1053. . 2 Anil Kumar Gupta vs. State of Bihar 1996 7 SCC 83 , 3 Steel Authority of India Ltd. V. Union of India & others , 2006 SC 3229.

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There was a big blow to the trade unions who were opposing flexibility of

labour. All these judgments indicate that the workers and trade unions could seek

redress of workers’ abrogation of labour rights from the judiciary earlier, in recent

years, there appears to be a compact between the state and judiciary to promote

the LPG model of development.

In the famous BALCO’s case.1 , the Government of India , in Constitution

of its disinvestment policy adopted in the make of New Industrial Policy of 1991

.This initiated the bunch of legal proceedings challenging that it impairs public

interest, that it was without any need and that the interest of the employees are not

sufficiently safeguarded. Holding that ‘the disinvestment by the Government was

not invalid ‘the Court gave its verdict justifying the reasoning as ----

“The policies of the Government ought not to remain static. With the change in

the economic climate, the wisdom and the manner for the Government to run

commercial ventures may require reconsideration. What may have been in the

public interest at a point of time may no longer be so. While it was a policy

decision to start BALCO as a company owned by the Government, it is as a

change of policy that disinvestment has now taken place. If the initial decision

could not be validly challenged on the same parity of reasoning, the decision to

disinvest also cannot be impugned without showing that it is against any law or

mala fied.

1 Balco Employees Union Regd. vs. Union of India and others AIR 2002. SC 360.

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By pursuing the shareholder’s agreement, we are satisfied that the

workers’ interest is adequately protected in the process of disinvestment.

It may be mentioned that BALCO will remain an industrial establishment even

after the disinvestment and all the provisions of Industrial Disputes Act, will

automatically apply to BALCO. Regarding social security to the BALCO

employees at par with government employees, it is to be noted that as a matter of

principle, no industrial establishment has any right to be compared with a

government establishment. Regarding employees right to be heard, it is

impracticable to apply the principles of natural justice to administrative policy

initiation like disinvestment and change of management.

In the famous Tamil Nadu case, the right to strike was called morally and

legally incorrect. Earlier a lawyer could successfully argue in the courts that by

striking, a workman do not lose his right of employment. However, with UP State

Corporation case, it has been laid down that if the workman continues to be on

strike then the employer can declare that he has voluntarily abandoned his

services.

When it is declared that by striking a workman can lose his job, the right

to protest is lost. It is futile for the working class to fight at individual level, it can

only assert through collective bargaining. The strike is the most peaceful way to

assert. The right to work includes the right to not to work but when that right is

denied, as a consequence of losing job, the workers can’t strike.

After centuries of struggle, the working class got some security of

employment and the right for fair opportunity and enquiry but it has been

nullified. The worker was given the opportunity of fair hearing before he is

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thrown out even if it had its own limitations. In Guzari Steel’s case, it was held

that in case of the dispute between the management and the worker, the

management could prove the worker guilty, the order of dismissal will be from

the date when labour court has passed the order and will not date back to the

earlier order of dismissal by management. But now in the recent Punjab National

case, it has been laid down that if the charge is proved against the worker in the

labour court then the order will date back to the day of dismissal by the

management. What is the practical impact of this decision? An employer can hire

and fire any workman any time without any enquiry and without any opportunity

of hearing. In addition, if the workman raises an industrial dispute, it takes 2-3

years for the case to be referred to the labour court. For instance, in Rajasthan

even if the workman goes directly to the labour court, he has to prove whether he

was an employee in the industry, which takes years. After that, the management

will come into picture and defend itself.

The Supreme Court in one of the recent judgments stated that the

Management is the best judge to decide about the conduct of an employee and

such decision should not be made subject to judicial review. It is only in the

condition when the judge becomes suspicious of the role of management that the

judicial review comes into play but it is never practiced.

It is clear that the Magna Carta created is for the employer not for the

workman. According to Justice S. B. Sinha in U.P Brass case1, the interpretation

of labour laws, in this changed scenario of privatization and globalization, cannot

be the same as it was in 80’s.

1 U P State Brassware corp. Ltd. V. Udai Narain Panday AIR 2005 SCW 6314.

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To conclude in a democracy, it is the prerogative of each elected

Government to follow its own policy. Often a change in Government may result

in the shift in focus or change in economic policies. Unless any illegality is

committed in the execution of the policy, the Court cannot per se interfere with a

decision.

The complexion of industries has changed a lot. New industrial units, new

establishments, and new undertakings have come up contributing to the efforts of

government for an overall development of the country. This development has

brought to the fore new ideas, such as that the State is the custodian of the

interests of the community, recognition of the right of workers to peaceful direct

action if justice is denied to them, encouragement of mutual settlement and

collective bargaining and voluntary arbitration by the State in favour of the

workers. Adding to this, philosophical ideas were adopted for implementation in

the policies of the country, certain institutions like Consultative Committees were

formed to formulate new polices with regard to labour welfare and labour

discipline.

From the above position we could notice at this point of time that the

industrial worker had acquired a dignity not known to his predecessor, he was no

longer a person of the by gone days. The social component of the labour has

undergone a change labour is not restricted to certain castes and communities. Old

social barriers were breaking down. It was common to find persons of different

castes, religions and creeds working side by side with each other. Thus, there was

a clear change seen at the place of work.

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During 70s and 80s, the success rate was 95 percent in the labour courts. It

was not necessary that the worker always got the relief but High Courts and even

Supreme Court in favour of the worker upheld the judgments. However, gradually

after 90’s the success rate has dropped to 5 percent.

Thus, the State has started undergoing changes. Even at this juncture,

there were certain problems, such as those of ownership and control of the capital

and the management of industrial relations. There are now statutory provisions

about the welfare and safety of the labour. The employers are under a duty to take

more interest in promoting the welfare of the employees and taking care of the

safety of the workers. The rule of compensating the worker for the damage

suffered by them and to pay wages during the closure of the industry or during the

Lay- off or retrenchment. The employees are paid bonus and dearness allowance,

which is fixed taking into account the changes in the cost of living.

There are wage-fixing authorities as well. There is the system of collective

bargaining, and recognition of trade unions. Above all, there is the concept of

social security, which has the implication of providing compensation to injured

workers. , compensating the worker paying minimum wages, prohibition of the

child labour , maternity benefits to the women workers, insurance protection ,

conditions and hours of work are all embodied in this system. In course of time

the method of recruitment, Lay-off and retrenchment gained considerable

significance. Though the legislations on these matters was enacted from time to

time to safe guard the labour , the vagueness and inconsistency leading to the state

of inadequacy resulting in the form of disputes between the employer and the

workers , the judiciary has sought to interfere to clarify the law of its

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interpretation . The worker who has come to the industry to secure the means of

his livelihood has not given full protection and security to the extent expected

against the various threats. Especially the worker felt insecured in the matters

relating to the retrenchment and lay off and the picture in his mind is that the

employer has an upper hand over him leading to the exercise of arbitrary powers

in the service matters and this led to serious controversies.

Earlier when the judiciary was in support of the working class, it was not

due to its pro-working class stand or greater understanding of socialism, as was in

the case of E.M.S Namboodaripad. In fact, in those days the bourgeoisie and the

ruling class were in need of the working class. However, today the trade unions

movements have became scattered and weak. The trade unions leaders are

dependent on judicial decisions than taking the movement forward. As a trade

unionist, one can feel that instead of struggling with the workers on the streets,

most of our time was spent in the courts. It was nothing but betrayal of working

class movement. Today’s judgments have defied all employment security, and the

right to strike.

The positive impact was that we must come out of the illusion that the

judicial system can help the struggle of working class. Judiciary is nothing but a

tool in the hands of ruling classes. E.M.S. Namboodaripad had said this and was

punished. In this age of privatization and globalization, we cannot implement

labour laws in its true sense. We need to hasten the process of coming out of this

illusion and struggle with the working class. - The present tendency is that India

has to meet the challenges projected by the globalization. For this, the function of

the law is to bring about necessary changes in the society, economy and polity so

that justice, equality , liberty and fraternity and would reign them and it is more so

in the case of a newly raising welfare State which had to rebuild its economy

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from the ruins of the colonial and feudal regimes. “Roscoe Pound” , an eminent

jurist, belonging to the sociological school of jurisprudence, characterized law as

an important tool of social engineering.1

The year 1991, an economic metamorphosis for India, was the turning

point when India accepted to open itself to face the world 2 to compete in the

global market, wanted to attract the foreign investment India took its first step

towards reliving itself from the state of its isolation, which is a pre condition for

the economic prosperity.

5. 3 Causal Labour:

There is no law in India, which states that the persons performing various

functions in the industrial establishments, Government departments as casual or

part time or ad hoc employees are eligible for the wages on par with regular

employees. The Supreme Court considered the case of employees of the Delhi

Transport Corporation who were being deprived of their employment. The court

concluded that the right to livelihood is necessary for the sustenance of the

persons and the deprivation of which would threaten their existence.3

1 V.D Mahajan , Jurisprudence and Legal Theory , Eastern Book co , Lucknow (1996) , p. 633. 2 The Indian Renaissance: India’s Rise after a thousand years of decline, Chapter 1,Waiting for a thousand years, at page 2, by Sanjeev Sanyal, Published in Viking by Penguin Books India, 2008 3 Delhi Transport corporation Vs. DTC Mazdoor Congress, AIR 1991 , SC 101.

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5.4 Collective Bargaining:

Collective Bargaining is the technique by which disputes as to conditions

of employment is resolved amicably by the agreement rather than coercion. The

dispute is settled peacefully and voluntarily although reluctantly between the

labour and the management.1

The collective bargaining for resolving industrial disputes while

maintaining industrial peace is the bedrock of the Act.2

With the rapid industrialization of the country, the problems of the

industrial relations have multiplied India, which is passing through transition, has

however adopted the adjudication system as an alternative of collective

bargaining. In India, the industrial relations are regulated not only by the

Industrial Disputes Act, 1947, Industrial Employment (Standing Orders) Act,

1946, Trade Unions Act, 1926, State Labour Legislations but also by the

Constitution of the India, Criminal Law, Other Laws, which are aiming at the

preservation of the law and order of the country. In addition to the above laws, the

Economic Laws like FERA, MRTP Act, (at present replaced by the FEMA and

Competitive Law respectively) Companies Act, Sick Industrial Companies Act is

directly or indirectly influencing the industrial relations. Due to the change in the

approach of the higher echelons of the judiciary newer areas like Environment

Law, Consumer Protection Laws are making the impact on the industrial

relations.

1 Karnal Leather Leather Karamchari Sanghatan Vs. Liberty Foot wear Co. AIR 1990 SC 247. 2 Virudhachalam Vs. Management of Lotus Mills Civil appeal No. 4852 of 1989 decided by the Supreme Court of India on 9-12-1997. AIR 1998 554.

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In B.R. Singh v. Union of India1 Justice Ahmadi opined "The Trade

Unions with sufficient membership strength are able to bargain more effectively

with the management. In Gujarat Steel Tubes v. Its Mazdoor Sabha2 JUSTICE

Bhagwati opined that right to strike is integral of collective bargaining. He further

stated that this right is a process recognized by industrial jurisprudence and

supported by social justice.

Over a period of time, there has been some perceivable conceptual

difference in the judiciary. The liberal or beneficial construction of the labour

welfare legislation and the legal interpretation based on the concept of eliminating

the mischief of the common law are undergoing a shift in the favour of liberal

construction of the law. Especially in the recent past, after 1990s, there appears to

be a greater tendency towards legalism and legal positivism in the approach of the

courts and liberal and beneficial construction of the law in the favour of the

workers / employees are said to be discouraged a lot.

Industrial disputes in respect of the regularization of the fulltime/ part

time/ causal,/ temporary, or ad hoc workmen are not finding favour from the

courts. The judiciary has been consistently restricting the jurisdiction of the lower

levels concerning many industrial disputes such as pay, disciplinary proceedings,

transfer, promotion etc. The tendency of the Judiciary is molded in such a way to

give more importance to the expert Opinions, like Disciplinary Authorities,

Departmental Promotion Committees, Pay revision Committees, etc. in their

respective fields. The trend is such that for the environmental protection, the

closures are allowed. Therefore, the Judiciary has been seriously curtailing the

1 (1990) Lab IC 389 SC 2 AIR 1980 SC 1896

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freedom of the workers / employees and also the employers towards their strikes,

lockouts, bandhs, and closures.

In this connection, the major changes are noted in the following areas:

A. restraining the strikes and lockouts,

B. Rights and duties of the unrecognized unions.

C. engagement of the contract labour.

D. rejection of the claims of the causal, temporary, adhoc workmen for

regularization and for the parity of wages with regularly employed employees.

Regulatory Framework: Foreign Direct Investment:

The Government of India, ever since the process of liberalization

commenced in 1991. While there did exist various laws and regulations prior to

1991, there has been a manifold increase in the FDI regulatory framework post

1991. One of the primary sources of the regulatory framework of FDI is the

Foreign Exchange Management Act, 1999 [FEMA] accompanied by various

regulations and the Circulars and Notifications issued from time to time by the

Reserve Bank of India.1 .

The Press Notes of the Ministry of Commerce and Industry of the Government of

India also provide the investor with a constant update on FDI policy. The judicial

interpretation and judicial perspectives of the Indian courts qua foreign direct

investment and globalization need to be carefully considered while understanding

the subtle and occasionally ambiguous nuances in the FDI policy and FEMA.

1 Master Circular on Foreign Investment in India 02/2008-2009: RBI: 2008-2009/15 dated July 1, 2008

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Indeed, there is a pressing need for clarity in the interpretation of the FDI policy,

particularly in certain inevitable ambiguities that unfold while interpreting India’s

FDI policy.

This clarity can be sought through judicial interpretation and analysis,

which is gradually gaining momentum, as disputes find their inexorable avenue

into the area of FDI as well. An important milestone in the judgment delivered by

the Supreme Court of India in Zippers (Singapore) Pvt. Ltd. Case.1 This case

dealt with a challenge by trade unions dealing with zip fasteners, to the approval

granted to YKK Zippers [Singapore] Private Limited, by the Foreign Investment

Promotion Board [FIPB] to set up its own subsidiary in India. In the words of

Justice S P Kurdukar speaking for the Bench:

It changes ownership, which may bring out changes not only in work

organization and employment but also in trade union (TU) dynamics. It changes

the work organization by necessitating retaining and redeployment. It affects the

right of workers and Trade unions, including job/union security, income security,

and social security. Trade unions, management and government are responding to

these challenges through various types of new, innovative, or model arrangements

to deal with different aspects of disinvestment like

A. Making workers the owners through issue of shares or controlling

interests (latter is still not in India)

B. Negotiating higher compensation for voluntary separations

C. Safeguarding existing benefits

1 Zippers Karamchari Union vs. Union of India 2000 [10] SCC 619 at p. 632.

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D. Setting up further employment generating programs, and

E. Proposals for setting up new safety nets that not only include

Unemployment insurance but also skills provisions for redundant workers.

F. Deregulation: - it is tried to ensure that pubic sector/ government

employees receive similar protection as is provided in public/

government employment. The worst affected are the pension provisions.

This means, usually a reduction in pension benefits and an

uncertainty concerning future provision of pension benefit due to them.

G. The absence of government guarantees

H. Falling interest rates

I. Investment of pension funds in stock markets

Decentralization of IR is seen in terms of the shift in consideration of IR issues

from macro to micro and from industry to enterprise level. When the coordination

is at the national or sectoral level then work in the whole industry can be

paralyzed because of conflict in industrial relations. However, when the dispute is

at the bank level, in the absence of centralized coordination by Trade unions, only

work in that bank is paralyzed and the other banks function normally. This

weakens the bargaining power of unions.

5.5 : New actors and the emerging dynamics:

Earlier industrial relations was mainly concerned with Trade unions,

management and government but now consumers and the community are also a

part of it. When the right s of consumers and community are affected, the rights of

workers and unions and managers / employers take a back seat. Hence, there is

ban on bandh and restrictions even on protests and dharnas.

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From the above analysis of the decided cases, undoubtedly one can say

that the Indian judiciary has in its judgments consistently preserved as

unassailable the economic and industrial policy of the Government of India, and

its natural concomitant, i.e. the FDI policy. It is evident from an analysis of some

decisions and that in the event of any mala fides, arbitrariness or gross illegality in

any decision or order concerning FDI policy issued by the Government, investors

has resorted to filing appropriate legal proceedings, including writ petitions in the

High Courts and appropriate legal relief has been sought.

It is hoped that some of the legal conundrums that do arise in the interpretation of

the FDI policy and FEMA can and are resolved by a proper, just and fair

interpretation and adjudication by the Indian Courts

5.6 The Judicial metamorphosis in the last two decades:

During the metamorphosis that has been traced out in the recent past

decades is giving an impression that whether an independent Judiciary that is

going to be created would cater to the interest of only the ruling classes or to they

have a larger democratic role to play for the whole population is a question that is

coming in to the mind of an ordinary prudent person of this generation. One can

notice in this present time that an insecure labor is best available as either a

contract worker or a temporary hand. All legal pronouncements that give legal

rights to such workmen to become direct and permanent were therefore to be

taken away. The most efficient method to extract the maximum surplus out of the

labour is to make his/her employment itself insecure. As a Welfare State, the

Indian Parliament had enacted the Minimum Wages Act guaranteeing the

payment of the minimum wages to the workmen as mere subsistence for survival.

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The Supreme Court of India during the period of 1980 to 1990s had held

that non-payment of minimum wages would amount to “Forced Labour” which

was prohibited by our Constitution and had held that if an Industry cannot pay

minimum wages, it ought to close down. But in the year 2006, the same Supreme

Court in the Umadevi’s case has glossed over the non-payment of minimum

wages by observing that such a payment was accepted by the workmen with open

eyes.

Up to the year 2000 approximately, it was recognized and was a settled

law by the Supreme Court of India that the Industrial Disputes Act was created to

adjudicate on the disputes between labour and employer and for that purpose,

wide powers were given to the labour Courts and Industrial Tribunals to grant

relief to then workmen. In case of wrongful termination or punitive discharge, the

labour courts could reinstate the employee with full back wages. Any termination

in violation of section 25 F of the ID Act was to be struck down with

reinstatement with full back wages.

In the era of Globalization however, the judicial metamorphosis can be

traced very clearly after the said period, the year 2000 and onwards. The new

concept, which is really new and alien to the statutory law, hire and fire had to

be introduced through the back door The S C judgments that are now prevailing

in this area have discontinued the payment of full back wages even though the

termination could be wholly illegal. Minor misconduct can now be visited with

the extreme punishment of dismissal. Violation of 25F would no longer make a

termination automatically void. Prejudice has to be established. Really, these

changes were brought forth in the recent decades.

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In this changing phase of Industrial relations in the era of globalization,

there is very clear change that can be noticed in the attitude of the judiciary; this

can be observed in some of the judgments given by the Supreme Court of India in

the very recent past, showing a clear metamorphosis.

The Supreme Court of India, unlike in the previous judgment, showed a

different attitude in the cases of daily wage earners, earning less than the

minimum wages.

Art. 14, 16- Employment of daily wage- confers no right of permanent

employment - Daily wager appointed on less than minimum wages that was made

known to him- Not forced labour- Continued on post for long period- Daily

wagers from a class by themselves - They cannot claim parity vis-a-vis those

regularly recruited on basis of relevant Rules and cannot be made permanent in

employment.1.

It is also clear from the Supreme Court’s decision in the case of U.P.

State Brassware Corp. Ltd V/s Udai Narain Panday , that the Supreme Court is

not in favour of the workmen in the industrial disputes who are expected

protection under the Industrial Disputes Act, 1947.

U.P. Industrial Disputes Act, 1947 - S. 6N, 6O - Industrial Disputes Act,

1947 - S. 25F - back wages - appointment on daily wage basis for a fixed tenure -

after expiry of the tenure workman was terminated - industrial dispute was raised

- industrial undertaking run by the State Corporation was closed Labour Court

held that the workman had worked for more than 240 days in each year therefore,

1.Secretary, State of Karnataka Vs. State of Karnataka 2006 AIR SCW 1991.

350

his retrenchment of the workman was in violation of Sec. 25F of I.D. Act -

reinstatement with full back wages for the period between 1.04.1987 till

26.03.1993 were awarded –

The Supreme Court of India, observing the above view whether the

workman is entitled to full back wages or not – held that there is no precise

formula to lay down as to under what circumstances payment of entire back

wages should be allowed - workman should raise the plea that he was not

gainfully employed during the said period - in the interest of injustice, on facts,

25% back wages for the said period awarded.

U.P. State Brassware Corp. Ltd case - Impugned judgments of High Court

and Labour Court set aside - appeal partly allowed.1. In this case The Appellant

is an undertaking of the State of Uttar Pradesh. The Respondent herein was

appointed on 23rd July, 1984 in a project known as Project Peetal Basti by the

Appellant for looking after the construction of building, cement loading and

unloading. He worked in the said project from 23.7.1984 till 8.1.1987. He was

thereafter appointed in Non-Ferrous Rolling Mill. By an order dated

12/13.2.1987, the competent authority of the Non- Ferrous Mill of the Appellant

passed the following order:

"Following two persons are hereby accorded approval for appointment in Non-

Ferrous Rolling Mill on minimum daily wages for the period w.e.f. Date indicated

against their name till 31-3-1987.

1. Sh. Hori La l 7-1-1987 2. Sh. Uday Narain Pandey 8-1-1987.

1 U.P. State Brassware Corp. Ltd V/s Udai Narain Panday 2005 AIR SCW 6314.

351

The services of the Respondent were terminated on the expiry of his

tenure. An industrial dispute having been raised, the appropriate government by

an order dated 14.9.1998 referred the following dispute for adjudication by the

Presiding Officer, Labour Court, Uttar Pradesh: "Whether the employer's

decision to terminate the Workman Sh. Uday Narain son of Pateshwari Pandey

w.e.f. 1-4-87 was illegal and improper? If yes whether the concerned workman is

entitled to the benefit of retrenchment and other benefit?"

The Project Officer of the Appellant-Corporation appears to have granted

a certificate showing the number of days on which the Respondent performed his

duties. The Labour Court in its award dated 31.10.1991 came to the finding that

the Respondent worked for more than 240 days in each year of 1985- 1986. It was

directed that the employer should reinstate the concerned workman Uday Narain

Pandey son of Sh. Pateshwari Pandey w.e.f. the date of retrenchment i.e. 1-4-87

and he should be paid entire back wage with any other allowances w.e.f. same

date within 30 days from the date of this order together with Rs. 50/- towards cost

of litigation to Sh. Uday Narain Pandey.

In this Industrial Dispute." The Appellant herein filed a writ petition

before the Allahabad High Court in May, 1992 contending that as the Respondent

had not rendered service continuously for a period of 240 days during the period

of 12 calendar months immediately before his retrenchment uninterruptedly, he

was not a workman within the meaning of Section 2(z) of the U.P. Industrial

Disputes Act. It was further contended that the appointment of the Respondent

was on contractual basis for a fixed tenure which came to an end automatically as

stipulated in the aforementioned order dated 12/13.2.1987.

352

An application was filed by the Respondent herein under the Payment of

Wages Act wherein an award was passed. The said order was also questioned by

the Appellant by filing a writ application before the High Court and the High

Court directed it to pay a sum of rupees ten thousand to the Respondent. Pursuant

to or in furtherance of the said order, the Respondent is said to have been paid

wages up to February, 1996. Due to the impugned order the writ petition was

dismissed holding that it was brought to the notice of the Honourable Court that

the Petitioner No. 1 i.e. U.P. State Brassware Corporation Ltd. has been closed

down. Be that as it may, the position of the Respondent workman would be the

same as that all the similar employees and this cannot be a ground to set aside the

award of the Labour Court.It was brought to the notice of the Honourable court

that the Appellant's industries have been lying closed since 26.3.1993 and in that

view of the matter, the Labour Court as also the High Court committed a serious

error in passing the impugned judgment. The appointment of the Respondent, the

learned counsel would contend, being a contractual one for a fixed period, Section

6- N of the U.P. Industrial Disputes Act, would have no application.

Relying on or on the basis of the principle of 'no work no pay', it was

urged that for the period the Respondent did not work, he was not entitled to any

wages and as such the grant of back wages by the Labour Court as also by the

High Court is wholly illegal, particularly, in view of the fact that no statement was

made in his written statement filed before the Labour Court that he was not

employed with any other concern. In any event, the Respondent was also not

interested in a job.

353

The above case is a clear indication of the change in the attitude of the

judiciary unlike in the previous past. In Haryana Roadways case 1, a 3-Judge

Bench of this Court in a case where the workman had worked for a short period

which was less than a year and having regard to his educational qualification, etc.

denied back wages although the termination of service was held to have been

made in violation of Section 25F of the Industrial Disputes Act, 1947.

In this case the court observed that the host of factors like the manner and

method of selection and appointment i.e. whether after proper advertisement of

the vacancy or inviting applications from the employment exchange, nature of

appointment, namely, whether ad hoc, short term, daily wage, temporary or

permanent in character, any special qualification required for the job and the like

should be weighed and balanced in taking a decision regarding award of back

wages.

The court observed that the important factors, which have to be taken into

consideration, are the length of service, which the workman had rendered with the

employer. If the workman has rendered a considerable period of service and his

services are wrongfully terminated, he may be awarded full or partial back wages

keeping in view the fact that at his age and the qualification possessed by him he

may not be in a position to get another employment.

However, where the total length of service rendered by a workman is very

small, the award of back wages for the complete period i.e. from the date of

termination till the date of the award, which the previous experience shows is

often quite large, would be wholly inappropriate. Another important factor, which

requires to be taken into consideration, is the nature of employment. A regular

1 General Manager , Haryana Road ways V. Rudhan Singh SC 2005 , 353 (14th July, 2005)

354

service of permanent character cannot be compared to short or intermittent daily-

wage employment though it may be for 240 days in a calendar year.

S. 2(eee) of the Act has been repealed and S. 25-B (2) now begins with the

clause "where a workman is not in continuous service ... for a period of one year".

These changes brought about by Act 36 of 1964 appear to be clearly designed to

provide that a workman who has actually worked under the employer for not less

than 240 days during a period of twelve months shall be deemed to have been in

continuous service for a period of one year whether or not he has in fact been in

such continuous service for a period of one year. It is enough that he has worked

for 240 days in a period of 12 months; it is not necessary that he should have been

in the service of the employer for one whole year. ........." In view of this

authoritative pronouncement the requirements of Section 25-F of the Act would

be satisfied if a workman has worked for 240 days in a period of 12 months and it

is not necessary that he should have been in the service of employer for complete

one year.

Here the Industrial Tribunal-cum-Labour Court has recorded a finding that

the respondent has worked for 264 days and this finding has not been challenged

before the High Court. In this view of the matter the provisions of Section 25-F of

the Act are clearly applicable and as neither any notice or wages in lieu of the

period of notice nor any retrenchment compensation was paid to the respondent,

his termination of service has to be held to be invalid.

The court felt that there is no rule of thumb that in every case where the

Industrial Tribunal gives a finding that the termination of service was in violation

of Section 25-F of the Act, entire back wages should be awarded. A host of

factors like the manner and method of selection and appointment, i.e., whether

355

after proper advertisement of the vacancy or inviting applications from the

employment exchange, nature of appointment, namely, whether adhoc, short term,

daily wage, temporary or permanent in character, any special qualification

required for the job and the like should be weighed and balanced in taking a

decision regarding award of back wages. One of the important factors, which have

to be taken into consideration, is the length of service, which the workman had

rendered with the employer. If the workman has rendered a considerable period of

service and his services are wrongfully terminated, he may be awarded full or

partial back wages keeping in view the fact that at his age and the qualification

possessed by him he may not be in a position to get another employment. In such

circumstances, the Court is of the opinion that the respondent is not entitled to

payment of any back wages.

The appeal is accordingly partly allowed and the award of the Industrial

Tribunal-cum-Labour Court in so far as it directs reinstatement with continuity of

service is upheld but the award regarding payment of 50% back wages is set

aside.

The change in the attitude of the judiciary can be clearly noticed when the

conflicting views were expressed by the Supreme Court of India in the cases to

decide the issue, whether a particular department is coming under the purview of

the definition of the term “industry” under Section 2 (j) of the Industrial Disputes

Act, 1947 amended later in Bangalore Water Supply case. In Pratamsigh

Narsingh Parmar’s case , the Supreme Court of India , in deciding the matter ,

whether the Social Forestry Department is an industry or not , expressed

conflicting judicial views is some what strange to the mind of the common man.

In this case, three-Judge Bench held that said department is covered by the term

‘industry’ - two Judge Bench had taken contrary view. It was held that worker

oriented approach in construing definition of industry unmindful of interest of

356

employer or owner of industry and public would be one sided approach - activity

must be ‘analogous to trade or business in a commercial sense’ in order to

encompass activity within word ‘industry’ - Supreme Court must reconsider

where line should be drawn and what limitations can and should be reasonably

implied in interpreting wide words used in S. 2(j), larger bench shall give such

meaning and effect to definition clause in present context with experience of all

these years and keeping in view amended definition of ‘industry’ kept dormant for

long 23 years - cases should be placed before.

Hon’ble Chief Justice of India for constituting suitable larger bench for

reconsideration of judgment of Supreme Court in case of Bangalore Water Supply

- appeal disposed of accordingly.

The Supreme Court of India is determined to ignore the plea of the

Employees Welfare Association in the Karnataka regarding the regularization of

their services, who worked for ten years in such capacity as running and

maintaining canteen as a department. This attitude may be somewhat liberal in the

past decades.

In KGSD Canteen Employees Welfare Association case1 , the employees

of the canteen run by the State Government Secretarial Department Association

who happend to be the service holders of ten years in such capacity sought for the

regularization of their services. It was held that the State had no statutory

compulsion to run and maintain any canteen for its employees. In that,

circumstance the State has no intention to run and maintain canteen as

department. In these circumstances, the High Court direction for the

1State of Karnataka V/s KGSD Canteen Employees Welfare Association

2006 AIR SC 845.

357

regularization of the services of the above said employees as State Government

Employees is not proper. The Court opined that the process of regularization

could not be claimed as a matter of right. An illegal appointment cannot be

legalized by taking recourse to regularization. What can be regularized is an

irregularity and not an illegality. The Court expressed that the constitutional

scheme, which the country has adopted, does not contemplate any back-door

appointment. A State before offering public service to a person must comply with

the constitutional requirements of Articles 14 and 16 of the Constitution. All

actions of the State must conform to the constitutional requirements. A daily-

wager in the absence of a statutory provision in this behalf would not be entitled

to regularization.

The attitude of the Supreme Court of India is so rigid, stating that through

its observation under Art. 16, 39(d) - Parity in pay scale-of the employees of

canteen run by the State Govt. Secretariat Dept. Association- Put in ten years of

service, the Supreme Court of India commented that they did not hold post. No

post for canteen was sanctioned by the State- According to the State, they were

found to be not employees of State.

In Surendra Kumar Verma v. Central Government Industrial Tribunal-

cum-Labour Court, New Delhi & Anr1. The Court refused to go into the question

as to whether termination of services of a workman in violation of the provisions

of Section 25F is void ab initio or merely invalid or inoperative on the premise

that semantic luxuries are misplaced in the interpretation of 'bread and butter'

statutes.

1.AIR 1981 SC 422.

358

In this case, Chinnappa Reddy, J. observed that - Plain common sense

dictates that the removal of an order terminating the services of workmen must

ordinarily lead to the reinstatement of the services of the workmen. It is as if the

order has never been, and so it must ordinarily lead to back wages too. But there

may be exceptional circumstances which make it impossible or wholly inequitable

vis-à-vis the employer and workmen to direct reinstatement with full back wages.

For instance, the industry might have closed down or might be in severe financial

doldrums; the workmen concerned might have secured better or other

employment elsewhere and so on. In such situations, there is a vestige of

discretion left in the court to make appropriate consequential orders. The court

may deny the relief of reinstatement where reinstatement is impossible because

the industry has closed down. The court may deny the relief of award of full back

wages where that would place an impossible burden on the employer.

In such and other exceptional cases, the court may mould the relief, but

ordinarily the relief to be awarded must be reinstatement with full back wages.

That relief must be awarded where no special impediment in the way of awarding

the relief is clearly shown. True, occasional hardship may be caused to an

employer but we must remember that, more often than not, comparatively far

greater hardship is certain to be caused to the workmen if the relief is denied than

to the employer if the relief is granted." Yet again, no law in absolute terms had

been laid down therein. The court proceeded on the basis that there might be

situations where grant of full back wages would be inequitable. We can notice

that the attitude of the court is very clear that the Payment of back wages having a

discretionary element involved in it has to be dealt with, in the facts and

circumstances of each case and no straightjacket formula can be evolved, though,

however, there is statutory sanction to direct payment of back wages in its

entirety.

359

The changes brought about by the recent decisions of the Court probably

having regard to the changes in the policy decisions of the government in the

wake of prevailing market economy, globalization, privatization and outsourcing

is evident.

In all these cases, the Supreme Court of India is so clearly showing its

changed attitude by rejecting the plea of the employees that at least for period

they have worked, they were entitled to remuneration in scale of as that of Govt.

employees.

The Supreme Court is not in favour of the worker is clear from various

judgments. Even it is not considering the reinstatement cases though Employee

appointed dehors rules should not be granted the relief of reinstatement even if his

termination of service is found to be violative of Sec. 25-f.1 In this case the

Labour Court arrived at a finding that all the workmen had worked for more than

240 days and as their services had been terminated in violation of the provisions

of Section 6-N of the U.P. Industrial Disputes Act, the termination of their

services was illegal. The Appellant was consequently directed to reinstate them in

service.

The High Court dismissed the said writ petition only on the premise that the

workmen having completed 240 days of continuous service and as they had been

reinstated in service pursuant to the interim order passed by the High Court, it

would not be appropriate to displace the workmen from employment and to offer

1. Nagar Mahapalika (Now. Municipal Corporation.) Vs. State of UP, AIR SC 2113.

360

other reliefs, particularly, when a relief of reinstatement can be granted for

violation of the provisions of Section 6-N of the Act. However, they were directed

to be paid 50% of the back wages.

There are cases where the Supreme Court of India, even set aside the

orders passed by the High Courts in the matters relating to the continuation of the

services of the workmen, who worked for more than 240 days. In the light of the

Industrial Disputes Act, 1947, Section 25 B, the Supreme Court made out this

verdict.

In .Madhyamik Shiksha Parishad’s case 1 the respondent’s engaged by the

appellant for same casual work purely on ad hoc assignment which was not the

sanctioned posts in existence at that time. The respondents worked for more than

240 days before their assignment was discontinued. The respondents challenged

the discontinuation of their services on the ground that they have already

completed 240 days of their service and entitled to the benefits of the

regularization of services under the provisions of the Industrial Disputes Act,

1947. The Supreme Court stated that merely completion of 240 days of work does

not under the Act import the right to regularization. The Supreme Court of India,

observing the purview of the workmen under Section 2 (s) of the Industrial

Disputes Act, refused to recognize that the Jewel appraisers appointed by the

Indian Overseas Bank are not employees of the Bank.2.

1 Madhyamik Shiksha Parishad Vs. Anil Kumar Mishra. 2005 (SCC L & S) 628.

2 General Manager, Indian Overseas Bank Vs. Workmen, All India Overseas Bank Employees Union. 2006 AIR SCW 1520.

361

The Supreme Court of India, in Central Aercanut and Coca Marketing Co.

case stated that the apprentice or the trainee engaged under the Apprentices Act is

excluded from the purview of the standing orders.1

The Supreme Court in the case of “State of Haryana Vs. Devinder

Kumar” gave favorable decision to the employer. In this case, the appellant

challenged award of reinstatement of respondent-workman. The respondent filed

second Writ petition during pendency of first Writ petition claiming of his

regularization of service. The High Court granted the relief in favour of the

respondent .The employer contended that so long as award of reinstatement was

under challenge before the Hon’ble High Court and the operation of which stands

stayed, the respondent workman could not have been granted relief of

regularization of his services The Supreme court held that the respondent cannot

have been granted relief of regularization so long as award of reinstatement was

under challenge - impugned order was set aside and the petition remanded for its

disposal - appeal allowed.

The Supreme Court of India even to inflict the terminations on the workers

when their behavior is unsatisfactory and the termination is not a kind of

punishment for such cases, is the attitude of the Court. This was not so in the

previous past but in the recent times only.

In Abhijit Gupta’s case,2 observing it under the purview of Art 311 of the

Indian Constitution, where the probationer’s attention was drawn from time to

1 . The Regional P. F. Commissioner Vs. M/s. Central Aercanut and Coca Marketing and Processing Co. Op. Ltd. 2006 AIR SCW 449

2. Abhijit Gupta Vs. S. N. B. National Centre .2006 AIR SCW 2102.

362

time to his deficiencies and he was properly advised to improve his behavior,

conduct and the work. The probationer was given a long time chance to improve

even then the process of discontinuation was traced out and his performance was

unsatisfactory. The order of the Court in this regard is not to be viewed, as a

punishment was the order of the Supreme Court.

The Supreme Court is not in hesitation to inflict punishment amounting to

dismissal in simple verbal abuse to the superior officers.1

In an other case, the Supreme Court felt that the powers belonging to the

industrial employer and the rights belonging to the industrial workers in the

matter of retrenchment constitute an important aspect of the law of industrial

relations.

In Hari Prasad V. A.D.Divaker 2 the Supreme Court of India viewed that

retrenchment should be understood in the ordinary sense that it is not every

termination that can be retrenchment but the termination in order to be

retrenchment should be of surplus labour or staff and in an industry which is

continuing and not closed or transferred.

“Retrenchment” in its ordinary connotation is discharge of labour as surplus

though the business or work itself is continued. It is well settled by a catena of

decisions that labour laws being beneficial pieces of legislation are to be

interpreted in favour of the beneficiaries in case of doubt or where it is possible to

take two views of a provision. It is also well settled that Parliament has employed

the expression "the termination by the employer of the service of a workman for

any reason whatsoever.

2 K. Verma Vs. H.M.T. Ltd. 2006 AIR SCW 460. 2 AIR 1956 SC 121.

363

While defining the term "retrenchment", which is suggestive of the

legislative intent to assign the term "retrenchment" a meaning wider than what it

is understood to have in common parlance.

In Duryodhan Naik V.Union of India1, the court held that the discharge of

surplus labour by the employer for any reason whatsoever, other wise than as a

punishment inflicted by way of disciplinary action is called retrenchment.2.

No employer is expected to carry the burden of such economic dead

weight3. The employer has a right to take a decision to retrench the dead weight of

uneconomic surplus and there is nothing unlawful in an employer desiring to

make even more profits by getting rid of the dead weight of uneconomic surplus.

However, this can be done only for the proper reason, which means that it

must not be actuated by any motive of victimization or any unfair labour

practice.4

The right to effect retrenchment cannot normally be challenged but when

there is a dispute about the validity of retrenchment, the impugned retrenchment

must be shown as justified on proper reasons. i.e. that it was not capricious or

without rhyme or reason.5

1 1969 Lah IC 1282. 2 1969 Lah IC 1282 3 Parry and Co. Ltd. V. P.C. Pal AIR 1970 SC 1334. 4 Film Distributors employees Association V. Metro Goldwayn (I) Ltd. , II LLJ 99 , Mad HC ( DB ) 1962 5 Workmen of Subong Tea Estate V. The Outgoing Mgt. of Subong Tea State . AIR 1967 SC 420.

364

It is settled law that it is the managerial discretion to organize his business

in the manner he considers best. It is not competent for a workman to challenge

the propriety of the same so long as the business is organized in a bona fide

manner. While reorganizing business. If surplus employees are asked to quit, no

employer can be burdened with carrying on with an economic dead weight and

retrenchment has to be accepted as inevitable. 1

It is clear that retrenchment means discharge of surplus labour of staff in a

continuing industry. It means the removal of the dead weight of uneconomic

surplus2.

The expression “termination of the service for any reasons whatsoever in

Section 2 (00) covers every kind of termination of service except not expressly

provided for by other provisions of the Act such as sections 25 FF and 25 FFF.

The discharge of the workman on the ground that she did not pass the test which

would have enabled her to be confirmed was ‘retrenchment with in the meaning

of the section 2 (00) and therefore, the requirements of section 25 F had to be

complied with.3

In Naresh Chandra Das V.Seventh Industrial Tribunal 4 ,where the

services of the workman were terminated in accordance with the standing orders

of the company for continued absence without leave it has been held by the

Calcutta High Court that it is a retrenchment because the cause is not covered in

any of the ground stipulated in Section 2 (00) for exemption. The employer at the

time of the retrenchment has to follow all the requirements other wise the non-

1 Satya Prakash Giri and othere V. Presiding Officer, Industrial Tribunal , Haryana, 1995 I LLJ 437 Punjab. 2 J K Iron and Steel Co. V. Mazdoor Union AIR !956 SC 231. 3 Santosh Gupta V. State Bank of Patiala AIR 1980 SC 1219 4 1982 (2) LLJ 64

365

compliance of the provisions of this section would render the retrenchment

invalid 1 .

It has been expressly laid down in the Section 25 –F that on compliance

with the three conditions mentioned therein , the employer shall have an

unrestricted right to retrenchment of the workman.2

The retrenchment in contravention of the mandatory provisions of the Section 25-

F becomes void and ineffective 3.

The Supreme Court held that once a candidate is selected and his name is

included in the select list in accordance with the regulation, he gets a right to be

considered for appointment as and when vacancy arises. On the removal of his

name, serious consequences entail as he forfeits his right to employment in

future.4

Where the workman in the service of the employer for about 11 years was

retrenched for being absent for a long period unauthorized and being irregular, the

question for decision was whether it could be said to be valid retrenchment? It

was held that the company sought to retrench the petitioner but for genuine

reasons but by way of punishment because the petitioner was irregular in his

attendance and was absent from duty for long time, the action of the company was

not bonafide5.

1 Delhi Cloth & General Mills Co Ltd. V. Shambu Nath Mukharji and others AIR 1978 SC 8. 2 Chopra Motors V. Their Workmen 1957 II LLJ 162 ( LAT) 3 Rolston John V. Central Government Industrial Tribunal 1995 SCC (L&S) 142 .SC 4 Govinda Raju V. K.S.R.T.C.1986 II LLJ 351 SC 5 Allex Fernandes V. Smt. N.A Kadam and anothers.1988 II LLJ 287

366

Where the services of the drivers working in the State Transport

corporation were terminated on the ground that they have developed eye sight

which was not standard required for, to drive the buses, the Supreme Court held

that such termination would be covered by sub-clause ( c ) of the section 2 ( 00)

of the Act. It was observed that any disorder in health, which incapacitates an

individual from discharging the duties entrusted to him, affects his work

adversely, or comes in the way of his normal and effective functioning, could be

covered by the phrase ill-health 1.

It has been laid down by the Supreme Court that when the appointment is

made for any period it comes to an end by efflux of time and the persons holding

such posts is not entitled to regularization of his service 2.

It was held by the Supreme Court that the termination of service of the

probationer cannot be said to be a retrenchment within the meaning of Section 2

(00) because his confirmation was to depend upon fulfillment of minimum

business guarantee and the employee not having fulfillment of minimum business

guarantee, LIC was justified to terminate his service without complying with the

provisions of the Act 3

Where workmen were engaged under an agreement for a period specified ,

it has been held by the Supreme Court that their case is covered by the provisio to

clause (a) of the section 6-N of U.P. Industrial Disputes Act , No notice of

terminating their services was necessary . Mere service of 240 days in a year does

not entitle a workman to regularization of his employment4.

1 Anand Bihari and others V. Rajasthan State Road Transport Corporation. AIR 1991 SC 1003. 2 Director , Institute of Management V. Smt. Pushpa Srivastava 1992 4 SCC 33. 3 M. Venu Gopal V. Divisional Mnager, LIC of India, 1994 (68) FLR 443 SC 4 U P State Co-operative Land Development Bank Ltd. V. Tazmull Ansari and Others 1994 SC 745

367

In an other case, the Appellant is the Assistant Executive Engineer, Public

Works Department. The respondent is the Karnataka State Government Daily

Wage Employees Federation. The State government, by means of its order dated

September 24th , 1994 was of the opinion that an industrial dispute exists between

the appellant and the Federation , referred the dispute for adjudication to the

Labour court, Mangalore under Section 10 (1) ( c ) of the Industrial Disputes Act,

1947 . The dispute referred was as to whether the Appellant was justified in

terminating the services of Smt. Nirmala Bai from service with effect from May,

27th, 1985 and if it is not justified, for what relief the said Smt. Nirmala Bai was

entitled to? The case of the Federation was that Smt. NIrmala bai was working as

helper from Nov. 1st 1983 till May 27th, 1985 continuously for period of more

than 240 days on daily wage of Rs. 9 (Rupees nine only) and with effect from

May, 28th, 1985 her services came to be abruptly terminated without any prior

notice and without payment of any compensation and in violation of the

provisions under Section 25 F of the act. It was also the case of the Federation

that refusal to give work to Smt. Nirmala Bai from May 28th, 1985 is wholly

unjustified, illegal and therefore she is entitled for reinstatement with all

consequential benefits including continuity of service and back wages. The claim

made by the Federation was seriously disputed by the appellant. However, it was

admitted by the Appellate that Smt. Nirmala Bai was working on daily wage

basis; she was not entitled to seek for relief of reinstatement with back-wage .It

was also contended that the regular appointment in the establishment of the

Government departments was required to be made only after complying with the

selection process and since Smt.Nirmala Bai’s appointment was not made

complying with the selection process, she had no right to seek reinstatement to

duty. It was also further contended that the appellant not being an “industry’ and

Smt. Nirmala Bai not being a workman , the dispute referred was without

368

jurisdiction and therefore the Labour Court had no jurisdiction to entertain the

dispute. In an other decided case 1 the appellate company impugned in this appeal

an award to the Labour Court, as affirmed by the single judge, which was in

favour of respondent workmen. The High Court dismissed the appeal. It observed

that the workman was not regarded as a casual employee on a temporary basis. It

could not be said the inference drawn by the industrial judge and accepted by the

single judge that at the time the respondent’s services were terminated, he had

acquired permanency in the post was impermissible or illegal. The High Court

further contended that merely because a workman had put in 240 days of

continuous service, he was not entitled to seek regularization of service as a

matter of right. The observation of the single judge to the contrary was there fore

set aside.

5.7 Lay-off and retrenchment:

The law on lay-off and retrenchment theoretically is pro-workers but

practically it is a law, which affords no adequate protection to the workers. The

examination of various provisions of the industrial Disputes Act with reference to

judicial decisions has shown that the Act is of greater help to the industries than

the employees are. A close study of the provisions of the Act shows that the

employer of the industry can exercise his power of lay-off and retrenchment on

various grounds and escape the liability before the legal forums. The following

are the situation from which we find the law is more on the side of the owners of

industry than on the side of the industrial workers.

1 Management of Tungabhadra Steel Products Limited, Hospet, Bellary District. V. A.B Patil and another 2004 III LLJ , (Karnataka High Court )

369

The very definition of lay-off in Section 2 (KKK) shows that the power to

lay-off has a limited meaning. It refers only to the situations, such a shortage of

coal, power or raw material or accumulation of stocks or breakdown of machinery

or natural calamity in which the employee fails to give employment or refuses to

give employment to workmen.

The provisions of lay-off and retrenchment however are applicable only to

factories as defined in the Factories Act.1948 to mines as defined in the Mines act

, 1952 and the Plantations as defined in the plantation of Labour Act.,1951.

The above-mentioned factories, mines and plantations should have a

minimum of 50 workmen employed therein and that such establishments are of

piecemeal character performing work only intermittently. To be eligible for

protection under the provisions of the Industrial Disputes Act, the workmen must

be in continuous service for a period of one year, or six months, this period may

be interrupted on account of sickness or authorized leave or accident or strike or

lockout. This provision is of course somewhat beneficial to the employee. The

law on lay-off and retrenchment provides that the industrial workers laid off in the

circumstances stated above may be paid lay-off compensation for the period they

are laid off. The safeguard of lay-off compensation however is not applicable to

beedi-workmen or the workmen who are casual workmen.

The safeguards of lay-off compensations not available to the person who

accepts an alternative employment in the same establishment from which has

been laid-off. When the scope of these safeguards is examined in the light of the

criteria set by the courts, we find that the concept of alternative employment has a

limited meaning. As in the case of lay-off, in the case of retrenchment also

termination of service in a particular form only is covered by the provisions of

Industrial Disputes Act, 1947. Compensation is payable to the industrial worker if

370

there is retrenchment without justification, and this is known from the provisions

of the Industrial Disputes Act, 1947. The above safeguards are not available to

industrial workers in situations like those in which the terminations takes place

due to loss of confidence , voluntary abandonment of service, or continued ill-

health or incapacity of a person to work in the industrial establishment.

The Industrial Disputes Act, 1947 protects the interests of workers only if

they have been in continuous service for a period of one year. The safe guards of

compensation are not available to the worker if the lay-off is for more than forty

five days. The provisions of industrial law as safeguards to the workers are not

merely because of their being workmen there are several limitations hedged in on

the fulfillment of which the workmen are entitled to protection.

Although the Act contains a penal provisions of imprisonment for one

year to the person contravening the provisions of the Act (Sec.25 (Q)) so far no

employer has been punished under the provision. The law on lay-off and

retrenchment goes by the number of employees working in the establishment and

the number of employees working in the establishment and the number of days

for which a workman should work in the industrial unit determines this fate.

Unless the numerical conditions are fulfilled, the benefits of law not accrue to the

workers.

There are several categories of persons employed in various

establishments who by judicial decisions are treated as workmen but they are not

entitled to the benefits of the provisions of the Industrial Disputes Act, 1947 as re

guaranteed to the limited categories of industrial workers. The compensation

provides to the workers laid-off is not sufficient, it needs to be enhanced. The

basic philosophy of the constitution is to provide protection to the life and

371

personal liberty of persons and the procedure according to which the deprivation

can take place must be just, fair and reasonable. The expression ‘ life ’ has been

interpreted to mean not only the life on an animal existence it also means the

several ways and means by which life needs to enjoyed.

Summing up all the above Lay-off and retrenchment provisions and position

the following heads can be arrived.

1. Completion of one-year service by daily wages would not give rise to claim for

regularization1 .

2. It is well settled that it is for the claimant to lead evidence to show that he in

fact worked for 240 days in a year preceding his termination. Labour Court and

the high court committed an error in placing burden on the employer to prove that

the workman had not worked 240 days with the employer. In the absence of

evidence, Labour Court and High Court committed error in direction of

reinstatement of the workman2.

3. Completion of 240 days does not confer a right for regularization3.

4. Principles of natural justice are not required to be complied with if

retrenchment had been effected under the provision of the ID Act .Principles of

natural justice are attracted only where the termination is punitive or stigmatic4.

1Divisional Manager, APSRTC v. P.Lakshmoji Rao ,AIR 2004 SC 1503.

2Surendranagar District Panchayat v.Jethabhai Pitamherbhai ,2006(1) LLJ 268 (SC)

3Hindustan Aeronautics Ltd. V .Dan Bahadur singh AIR 2007 SC 2733

4State of UP v. Neeraj Awasthi 2006 1 SCC 667 .

372

5. It is not always mandatory for the courts to order reinstatement in cases where

there has been violation of S 25 F, which can be substituted for good reasons by

awarding the compensation.

Mere working of 240 days does not by itself give rise to a claim for permanence,

the workman, on a direction for the reinstatement, would only be entitled to be

restored to the same status held prior to termination.

Accordingly, workmen who are ticca mazdoors could not get a right for

the regular work even if they were reinstated.1.

6. Continuous service.-Causal employment in different establishments even under

the same employer would not be continuous service2.

7. Service in different units cannot be counted for computing 240 days continuous

service for the purpose of S 25 F. Tribunal was justified in concluding that the

number of days of service in broken periods could not be taken as continuous

employment for the purpose of S25 F3.

8. Burden of proof -The burden of proving that the workmen had worked for 240

days in a year in order to seek protection of the provisions under Section 25 F is

on the workmen. When the workman claimed that he had worked for more than

240 days in an year preceding his termination, but the employer denied the same,

1 Manager, Reserve Bank of India V. S.Mani (2005) 5 SCC 100. 2 Union of India. V. J Ummasha Diwan (2006) 8 SCC 544 3 Dy General Manager , ONGC V. Ilias Abdulrehaman 2005 (1) SCJ 101

373

it was for the workman to lead evidence to show that he had in fact worked for

240 days in the year preceding his termination. Filling of affidavit cannot be

regarded as sufficient evidence1.

8 The workman had to lead evidence to show that he had in fact worked up

to.240days preceding the termination of his service .Mere non production of the

muster rolls for a particular period by the employer was not sufficient to hold that

the work man had worked for 240 days as claimed2.

9. Workman having not adduced any evidence except making oral statement that

they worked for more than 240 days, the award of reinstatement by the Labour

court, affirmed by the High Court is liable to be set aside3.

5.8 Globalization and the insecurity of labour:

The history of the industrial relations shows that the employer of the

earlier days enjoyed vast powers in relation to the institutions, which he had

established, and the employees whom he had engaged to work in his business.

The law governing the industrial relations was once such that the status of

an employee was not of much consequence in the employer and employee

relationship. The employer could exercise his free will unrestrained by any rule or

regulation. He could not only remove an employee he could even close down the

enterprise. Harassment and victimization of employees were the order of the day.

1Range Forest Officer V .S. T Hadimani with State of Karnataka with State of Karnataka V. S.T .Hadimani

AIR 2002 SC 1147 =2002 AIR SCW 909 2 Rajasthan State Ganganagar Mills.Ltd.v. State of Rajasthan ,2004(III) LLJ 832 (SC) 3Surendranagar Dist. Panchayat.V.Gangaben Lalijbhai, (2006) 9 SCC 132 .

374

In the case of any disputes arising between the employer and the employee, the

remedies available to the employee were very few. The Public Law had no

effective role to play. Anyhow, this situation could not continue until long. The

twentieth century witnessed the emergence of new principles according to which

could be the intervention of the State Authority concerning the disputes arising

between the employer and the employee. The conditions of the service had to be

well regulated by the law and the freedom of the contract was reduced in its

scope.

However, unfortunately even in the 20th Century there was no end of the

arbitrary powers of the employers. The employer could exercise certain powers,

which he could exercise earlier. The employer could on account of failure of

power , non availability of essential services etc. dispense with the services of the

employee , which authority was known as that of lay –off and he could remove a

person from service without any reason which is known as retrenchment. Then

came a time when the State took cognizance of this anti labour practice and

brought it under it control.

The powers of Lay-off and retrenchment are the two powers belonging to

the employer under the rules of labour law, but they are not absolute powers.

There are various restrictions subject to which the powers have to be exercised by

the employers. Legislation on this subject was enacted for the first time in the

year 1953 and then necessary changes were made in the law in the year 1957 and

1983. The Executive branch of Government under delegated authority has

supplemented the law, its rules and regulations. However, the enactments being

vague, inconsistent and inadequate in certain respect, disputes have arisen

between the employer and the employee because of whom the judiciary has had to

intervene in several cases and give its interpretation of the law.

375

In the era of globalization, workers are looking upon every change

proposed in the laour laws with caution. In the age of globalization, workers are

on the defensive and workers’ rights are at stake. Because of the globalization and

anti-labur reforms, trade union unity is being strengthened. In labour sector, the

accepted methods of implementing changes are through negotiations. Those who

are asked to change should be convinced of the rationale behind the reforms.

Now a days, globalization appears to be an excuse to hurt the workers.

Globalization has caused damage to the workers in many ways. Globalization has

placed workers in a highly unsecured situation. The impact of the globalization on

the labour is that it wants to take worker in ransom of their insecurity.

Reform of the labour laws are on fear based, i.e. fear of the closure,

recession etc. hence this capitalist ideology will necessarily lead to chaos,

destruction of peace and loss of production resulting in industrial loss as workers

deprived of their rights will have to resist.

Any how one could say that the Globalization and the increased

competition has lead to less strikes, lockouts and less man days lost due to strikes.

Also now, in the era of knowledge industry employees are educated and thus do

not believe in violent activities. They are having responsibilities in cutthroat

competition and also are aware of their rights well, leading to decline in strikes.

Employers also avoid lockouts because decline in production for even hours

results in heavy losses so forget about days or weeks. One of the impacts of the

globalization is that it downsized the organized sector and pushed many into

unorganized sector. In the same way, the reforms are primarily downsizing the

rights of workers in the unorganized sector and pushing their position to that of

376

those in the unorganized sector. Our ten years experiment with globalization has

proved that it has not brought about macro-economic discipline as the claim goes,

but had reverse impact on the economy.

In the Industrial Disputes Act, 1947 Chapter V –B is to discourage closure

etc. That is detrimental even to the society. Not only the workman but the society

is also concerned about non –functioning of an industrial establishment. That is

why provision for Government scrutiny into unscrupulous and mala fides closure,

retrenchment and lay-off is made in the form of Chapter V-B .Still at present this

is only in a limited way.

It is good if it is further modified in the following manner:

Lifting up the limit of the 100 workers, the limit of workers in the cases of lay-off

and retrenchment must be removed. The definitions of workers and the industrial

establishment as extended by the judicial decisions must be applied to the workers

in regard to the process of the lay-off and retrenchment under the Industrial

Disputes Act.

The quantum of compensation must be increased. The restrictions subject

to which h the law on lay-off and retrenchment operates must be removed and the

workers should be given more protection concerning their service in the industrial

establishment.

Applying Chapter V-B to all the establishments in which the employer-

employee relations exist apart from the present position of application only to

factories, plantations and mines. Workers must be protected well in the event of

unavoidable retrenchment or closure by paying the adequate compensation and

provision for re-employment.

377

The kinds of remedies provided by the Industrial Disputes Act 1947 are

not adequate to cover the various situations as noted in the controversies that had

been taken before the court. In view of this, it is necessary to effect a change in

the law and make the system stronger to protect the industrial workers. The laws

on lay-off and retrenchment appear to be for the protection of the labour but they

are hardly adequate to serve the purpose of serving the cause of the labour. On the

other hand, they are badly in need of modification. Labour law reform can bring

about a change in the status of labour and provide more protection to the workers.

After the introduction of new economic policy of 1991 and consequent

exit policy, number of establishments having even 100 employees is being

reduced. In the changed situations due to downsizing even, the limit 100 is on the

higher side.

The Indian industrial circles want to shift their failure mainly due to

maladministration to the shoulders of workers. According to the philosophy of

this unsuccessful industrialists, flexibility means right of management to adjust

their labour force from time to time according to their whims and fancies in the

name of changing needs of the industry or to meet the exigencies caused by

genuine economic reasons or in the best interest of the undertaking etc. The

closure maniacs in business lobby are trying to take the idea of flexibility in a

reverse gear. Instead of saying ‘we want to run the industry’ they demand ‘we

want closure of industry and retrenchment of workers.’ This is detrimental to

the society also. They want to apply their agenda of failure even to profit making

units.

378

5.9 Strike and Legislative Provisions :

Strike is a weapon that empowers the disempowered to tight in oppressive

cases when no constructive option is left. It is a weapon of the last resort taken out

of exasperation. In Gujarat Steel Tubes v. It’s Mazdoor Sabha1 is thus beyond

doubt that the Industrial Disputes Act, 1947 contemplates a right to strike. It is

this weapon, which provides an opportunity for collective bargaining. The modern

form of strikes had its origin in the era of industrial revolution and assumed its

multifarious forms and dimensions during the Indian national movement varying

from bandh. hartal, and protestation to hunger strike, Satyagraha, non co-

operation and civil disobedience etc., it was considered inalienable right and duty

of a patriot to protest against the mighty colonial rule. People who took part in

protests were regarded as patriots. Paradoxically, after 50 years of Independence

the act of participation in a strike even for a good cause is considered illegal.

No doubt , to avoid strikes is everyone's responsibility. But to assert that

strikes under any circumstances are illegal, immoral, inequitable and unjustified is

contrary to our law and industrial jurisprudence. Striking work is integral to the

process of wage bargaining in an industrial economy, as classical political

economy and post-Keynesian economics demonstrated long ago in the analysis of

real wage determination. A worker has no other means of defending her/his real

wage other than seeking an increased money wage. If a capitalist does not grant

such an increase, he/she can be forced to come to a negotiating table by striking

workers. This he/she can do because the earnings of the capitalist are contingent

upon the worker continuing to work. The argument is drawn from Marxian

classical political economy that shows how the employer's income is nothing

1 AIR 1980 SC 1896.

379

other than what is alienated from the worker in the process of production. When

workers stop working, capitalists stop earning. The same applies to government

servants as well. When they strike work, it is not the authorities that suffer a loss

of income or disruption of their income generating process but the general public.

Here, authorities come to a negotiating table mainly under political pressure or in

deference to public opinion. The right to strike is organically linked with the right

to collective bargaining and will continue to remain an inalienable part of various

modes of response/expression by the working people, wherever the employer-

employee relationship exists, whether recognized or not. The Apex court failed to

comprehend this dynamics of the evolution of the right to strike.

In B.R.Singh V.Union of India1 , Justice Ahmadi opined "The Trade

Unions with sufficient membership strength are able to bargain more effectively

with the management than individual workman. The bargaining strength would be

considerably reduced if it were not permitted to demonstrate by adopting agitation

methods such as 'work to rule', 'go-slow', 'absenteeism', 'sit-down strike', and

'strike'. This has been recognized by almost all democratic countries".

In Gujarat Steel Tubes v. Its Mazdoor Sabha 2 Bhagwati. J. opined that

right to strike is integral of collective bargaining. He further stated that this right

is a process recognized by industrial jurisprudence and supported by social

justice. The freedoms guaranteed under the Article 19(1) do not include the right

to strike. Nevertheless, if we look into the wider interpretation of the provisions,

exercise of such rights are subjected to the reasonable restrictions, which are

imposed under the sub- clauses (2) (6) of the very same Article. Hence, it is clear

that those provisions are wide enough to include the right to strike. Justice Shah's

1 1990 Lab IC 389 SC. 2 AIR 1980 SC 1896

380

judgment in Rangarajan case does not seem to be right when saying: "There is no

statutory provision empowering the employees to go on strike." Going further, the

judge then declared that there was "no moral or equitable justification to go on

strike". This observation does ignore the legal provisions under the Indian Law

and International conventions.

The scheme of the Industrial Disputes Act. 1947 implies a right to strike in

industries. A wide interpretation of the term 'industry’ by the courts includes

hospitals, educational institutions, and clubs and government departments.

Section 2 (q) of the Act defines 'strike'. Sections 22, 23, and 24 all recognize the

right to strike. Section 24 differentiates between a 'legal strike' and an 'illegal

strike'. It defines 'illegal strikes' as those which are in contravention to the

procedure of going to strike, as laid down under Sections 22 and 23. The

provision thereby implies that all strikes are not illegal and strikes in conformity

with the procedure laid down, are legally recognized.

Further. Justice Krishna Iyer had opined, "a strike could be legal or illegal

and even an illegal strike could be a justified one" in Gujarat Steel Tubes v. It's

Mazdoor Sabha is thus beyond doubt that the Industrial Disputes Act. 1947

contemplates a right to strike. The statutory provisions thus make a distinction

between the legality and illegality of strike. It is for the judiciary to examine

whether it is legal or illegal and not to declare that there exists no right to strike.

Besides the Industrial Disputes Act. 1947, the Trade Unions Act. 1926

also recognizes the right to strike. Sections 18 and 19 of the Act confer immunity

upon trade unions on strike from civil liability.

381

India is a signatory' to the Covenant and is therefore bound under Article 2

(I) to provide for the right to strike as enshrined in Article 8(1) (d) through

legislative measures or by other appropriate means.

The blanket ban on the right to strike also transgresses the limits of the following

Conventions of the International Labour Organization (1LO):

• Freedom of Association and Protection of the Right to Organize

• The Right lo Organize and Collective Bargaining

• Collective Bargaining Convention. I98I.

• Labour Relations (Public Service) Convention. 1978

Article 9 of the Convention provides: "Public employees shall have, as other

workers, the civil and political rights which are essential for the normal exercise

of freedom of association, subject only to the obligations arising from their status

and the nature of their functions".

By virtue of being a member of the ILO. India is under obligation to

satisfy at least the fundamental rights promoted by the Conventions, irrespective

of it having ratified them or not. With the Rangarajan verdict, the Apex court has

refused to adhere to the fundamental tenets of the ILO. Further, the right to strike

being well recognized under the scheme of central legislation i.e. the Industrial

Disputes Act. and forming an inalienable part and parcel of the same, could not be

taken away by way of enacting legislation by the state assembly or by merely

issuing a notification or any other executive action which necessarily involves but

only a subordinate, delegated or residue jurisdiction and capacity, inferior to that

of the central legislature in any case, and as such is incapable of over reaching the

rights created or recognized by the central legislature.

382

The provisions of the enactment passed by the state legislature – TESMA,

the service rules, specifically, Rule 22 of the Conduct Rules and the Ordinance of

2003, imposing a ban on the right to strike, all belong to such category of inferior

legislation and thus as far as they subvert or even restrict the sweep of the 'right to

strike' available to the employees under the central legislation Industrial Disputes

Act, are all illegal, ultra vires to the legislature and should have been struck down

on this ground alone. In a state of conflict between 'recognition' of such rights by

central legislation and their abrogation' by the state legislation through TESMA or

rules framed under the residue power of the executive like the conduct rules, the

provisions of the central legislation would doubtlessly hold the ground. As such,

the rights, benefits, protection accruing under the Industrial Disputes Act

including the right to strike are doubtlessly available lo the government

employees, and their status of being under the employment of the government

neither has any relevance nor makes a difference nor the purpose of availability of

such right.

Strike means a cassation of work by a body of persons employed in any

industry acting in combination, or a concerted refusal, or a refusal, under a

common understanding of any number of persons who are or have been so

employed to continue to work or accept employment1

In India unlike America, right to strike is not expressly recognized by the

law. The trade union Act. 1926 for the first time provided limited right to strike

by legalizing certain activities of a registered trade union in furtherance of a trade

dispute which otherwise breach of common economic law.

1 Section 2(q), Industrial Dispute Act, 1947.

383

Strike, is a work stoppage caused by the mass refusal of employees to

perform work. A strike usually takes place in response to employee grievances.

Strikes became important during the industrial revolution, when mass labour

became important in factories and mines. In most countries, they were quickly

made illegal, as factory owners had far more political power than workers. Most

western countries partially legalized striking in the late 19th or early 20th

centuries.

The Trade Unions Act. 1926 also recognizes the right to strike. Sections

18 and 19 of the Act confer immunity upon trade unions on strike from civil

liability. Now days rights to strike is recognized only to limited extent permissible

under the limits bid down by the law itself, as a legitimate weapon of Trade

Unions. The scheme of the Industrial Disputes Act. 1947 implies a right to strike

in industries. A wide interpretation of the term 'industry' by the courts includes

hospitals, educational institutions, and clubs and government departments.

Section 2 (q) of the Act defines 'strike'. Sections 22\ 23\ and 24 all recognize the

right to strike. Section 24 differentiates between a 'legal strike' and an 'illegal

strike*. It defines 'illegal strikes' as those which are in contention to the procedure

of going to strike, as laid down under Sections 22 and 23. The provision thereby

implies that all strikes are not illegal and strikes in conformity with the procedure

laid down, are legally recognized. Further. Justice Krishna Iyer had opined, "a

strike could be legal or illegal and even an illegal strike could be a justified one"

in Gujarat Sleet Tubes v. It's Mazdoor Sabha 1, is thus beyond doubt that the

Industrial Disputes Act. 1947 contemplates a right to strike.

1 1980 SC 1896.

384

The statutory provisions thus make a distinction between the legality and

illegality of strike. It is for the judiciary to examine whether it is legal or illegal

and not to declare that there exists no right to strike.

Article 8(1) (d) provides that the States Parties to the Covenant shall undertake to

ensure: "the right to strike, provided that it is exercised in conformity with the

laws of the particular country. Article 2 (I) 2 of the Covenant provides: "Each

State Party to the present Covenant undertakes to take steps. ... with a view to

achieving progressively the full realization of the rights recognized in the present

Covenant by all appropriate means, including particularly the adoption of

legislative measures". India is a signatory to the Covenant and is therefore bound

under Article 2 (I) to provide for the right to strike as enshrined in Article 8(1) (d)

through legislative measures or by other appropriate means.

5.10 RIGHT TO STRIKE - JUDICIAL INTERPRETATIONS:

According to Bhagwati J. the principle of reasonableness which legally as

well as philosophically, is an essential element of equality and non- arbitrariness

pervades Article 14 like brooding omnipresence of the procedure contemplated by

Article 21 must answer the test of reasonableness in order to be in conformity

with Article 14. It must be right, just, fair.

The right to strike in the Indian constitution set up is not absolute right but

it flow from the fundamental right to form union. As every other fundamental

right is subject to reasonable restrictions, the same is also the case to form trade

unions to give a call to the workers to go on strike and the state can impose

reasonable restrictions. The Supreme Court of India observes that there is no

statutory provision empowering the employees to go on strike. Further, it

observes that there is prohibition to go on strikes under the Tamilnadu

385

Government Servants Conduct Rules, 1973. Rule 22 provides that “no

government servant shall engage himself in strike on incitements there to or in

similar activities1.

The Hon’ble Supreme Court of India did not impose a blanket ban on all

strikes. The court further declares that the said strike to be illegal in View of Rule

22, which prohibits government servants from going on strike.

In the case of Communist Party of India (M) Vs. Bharat Kumar and

others2, the Supreme Court adjudicating on the legality of strikes held that the

“Fundamental rights of the people as a whole cannot be subservient to claim of an

individual or only a section of the people”.

In All India Bank Employees' Association v. National Industrial Tribunal

and others3, the Court specifically held that even very liberal interpretation of sub-

clause (C) of clause (I) of Article 19 cannot lead lo the conclusion that trade

unions have a guaranteed right to an effective collective bargaining or to strike,

either as part of collective bargaining or otherwise.

In another case B.R. Singh Vs. Union of India4 justice Ahmadi was of the

view that the right to strike cannot be equated to that of a fundamental one.

The Apex Court in the process of answering the same referred the

Judgments of previous cases of Kameswar Prasad and others Vs. State of Bihar

1 Lavu.. Nageswara Rao,(Addl.Solicitor General of India.) Right to Strike: National and International Perspectives Endowment Lecture of Smt. Pemmaraju Hymavathi and Satyanaryana on 14-11-2003 pp. 7-9, at Acharya Nagarjuna University, Guntur. 2 AIR 1997 p.4147. 3 1962 3 SCR 269 4 1990 (4), SCC, 710.

386

and another1 wherein the Supreme Court held that there exists no fundamental

right to strike.

Thus, there is a guaranteed fundamental right to form association or

Labour unions but there is no fundamental right to go on strike. Under the

Industrial Dispute Act, 1947 the ground and condition are laid down for the legal

strike and if those provisions and conditions are not fulfilled then the strike will

be illegal.

5.11 Summary:

Industrialization is one of the conditions for economic development of a

country and a proper industrialization is chartered out in India through industrial

policies. In India, before independence, the industrial workers are the worst

affected people. After Independence, India has to pass through economic

revolution. After independence, the concept of social justice was introduced and

the labour law developed more as a judgment law. At one Stage, there were

various laws but with the intervention of judiciary, the labour law was moving in

a progressive direction.

The Constitution of India has adopted the policy of socialism which means

the ownership of the material resources of the country have to be used for the

common good and that there should be no concentration of wealth in the hands of

1 1962 Supp. 3, SCR, 369

387

few person by allowing the owners of industry to close down their business

establishments as well as the provisions of socialism to contravened.

Any deprivation of the means of the livelihood affect the very safeguard

guaranteed to the individual under Article 21 of the Indian Constitution.The

safeguards of equality guaranteed to the persons under the provision of the Article

14 include the right to dignity and fair treatment. Any deprivation of the means of

employment affecting the dignity and status of a person amount to the

contravention of the Indian Constitution.

The industrial jurisprudence of our country has move in the direction

extending its help to the owners of industry rather than coming to the rescue of

the industrial workers. The legislature and the Judges had built up a jurisprudence

in which a harmony was created between the powers of the employers and the

rights of the workers but their equilibrium has been upset by conceding more

powers in the hands of the employer in favour of the industrial workers. Though a

number of agencies are there for reference, revision and adjudication under the

industrial Disputes Act, 1947, the Forum is not sufficient to protect the industrial

worker in all situations.

The scope of remedial justice is circumscribed by so many conditions.

Increasingly Trade unions are getting isolated and see a future for them only by

aligning themselves with the interests of the widersociety.

During the sixties and the seventies, the judiciary played a very progressive role

in protecting the rights of labour. There is a sea- change in its role after the

introduction of reforms during the latest decades viz. by the Supreme Court

judgment in 2003. The period was a big blow to the trade unions who were

opposing flexibility of labour. The Supreme Court in one of the recent judgments

388

stated that the Management is the best judge to decide about the conduct of an

employee and such decision should not be made subject to judicial review.

In the era of Globalization however, the judicial metamorphosis can be

traced very clearly after the said period, the year 2000 and onwards. The new

concept, which is really new and alien to the statutory law, hire and fire had to

be introduced through the back door. The Supreme Court’s judgments that are

now prevailing in this area have discontinued the payment of full back wages

even though the termination could be wholly illegal. Therefore, the Supreme

Court is not in favour of the worker is clear from various judgments. In the age of

globalization, workers are on the defensive and workers’ rights are at stake.

Because of the globalization and anti-labur reforms. Now days, globalization

appears to be an excuse to hurt the workers. Globalization has caused damage to

the workers in many ways. Globalization has placed workers in a highly

unsecured situation. The impact of the globalization on the labour is that it wants

to take worker in ransom of their insecurity. Reform of the labour laws are on fear

based, the laws relating to lay-off , retrenchment, strikes and lockouts are the best

examples. The law on lay-off and retrenchment theoretically is pro-workers but

practically it is a law, which affords no adequate protection to the workers,

judicial decisions has shown that the Acts are of greater help to the industries than

the employees.

The blanket ban on the right to strike also transgresses the limits of the

following Conventions of the International Labour Organization (1LO): By virtue

of being a member of the ILO. India is under obligation to satisfy at least the

fundamental rights promoted by the Conventions of ILO. But unfortunately this

omission or ignorance is treated by the judiciary as latest exception to develop the

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country by over ruling the rights of workers in the changing phase of

globalization.

It seems that the industrial jurisprudence of our country has move in the

direction extending its help to the owners of industry rather than coming to the

rescue of the industrial workers. The scope of remedial justice is circumscribed by

so many conditions and it clearly connotes that the law had to therefore follow the

economic compulsions of the ruling class.

Pro-labour and pro-investor-policies:

This leads to decline in strength and power of Trade unions if not in numbers.

Unions have to make alliances with the society, consumers and community and

various civil society institutions otherwise, they will find themselves dwindling.

In government and public sectors workforce is declining because of non-filling of

vacancies and introduction of voluntary / early separation schemes. New

employment opportunities are shrinking in these sectors. In the private sectors

particularly in service and software sector, the new, young, and female workers

are generally less eager to join unions. Workers militancy replaced by employer

militancy

Due to industrial conflicts

In 1980-81 man days lost = 402.1 million

In 1990-91 man days lost = 210 million

Not because of improved industrial relations but because of the fear of job

security, concern about the futility of strikes, and concern to survive their

organization for their income survival. Trade unions have become defensive

evident from the fact that there is significant shift from strikes to lawsuits. Instead

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of pressing for higher wages and improved benefits, Trade unions are pressing for

maintenance of existing benefits and protection and claims over non-payment of

agreed wages and benefits.

CollectiveBargaining:

Level of collective bargaining is shrinking day by day.

In India, while labour is in the Concurrent List, state labour regulations are an

important determinant of industrial performance. The states that had enacted more

pro-worker regulations had missed industrial production in general. However,

there was a secular decline in the number of strikes and lockouts during 2000-04.

The total number of strikes and lockouts went down 13.6% from 552 in 2003 to

477 in 2004. The decline was sharper in the number strikes than in lockouts.

While most of the strikes and lockouts were in private sector establishments,

overall industrial relations had improved, especially between 2003 and 2004,

when there was a decline in the number of man-days lost by 6.39 million. Among

states, the maximum number of strikes and lockouts were in Left-ruled West

Bengal, followed by Tamil Nadu and Gujarat. The sectors, which saw instances of

industrial disturbance, were primarily textiles, engineering, and chemical and food

product industries. Stressing on the importance of labour reforms to enhance

productivity, competitiveness and employment generation. It can be noted that a

beginning had already been made in that direction. For instance, in the current

year, there was a proposal to enhance the wage ceiling from Rs 1,600 per month

to Rs 6,000 per month through The Payment of Wages (Amendment) Act 2005.

In addition, the proposal to empower the central government to further enhance

the ceiling in future by way of notification is already in effect from November 9,

2005. As regards women working on night shifts, The Factories (Amendment)

Bill 2005, was under consideration to provide them flexibility and safety. In

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addition, to simplify the procedure for managements to maintain registers and

filing returns, an amendment of Labour Laws (Exemption from Furnishing returns

and maintaining Registers by Certain Establishments) Act 1988, was under

consideration.

In this era of globalization, integration of the nation states into a single

global economic system, Profit, market and competition became the buzzwords.

Now it is the attitude of the Government as well as the judiciary that Social

welfare spending, subsidies, even Pensionary benefits have now become wasteful

expenditures. Now the present tendency is that extraction of maximum surplus

has become the key to success.

It is indirectly suggested that the law had to therefore follow the

economic compulsions of the ruling class. Alternatively, the immediate impact

was upon the labour law since the maximization of the profit depends on the

maximization of the removal of the surplus labour. In that sense, the rights of the

labour had to be taken away altogether permanently.

There were drastic changes in the attitude of the judiciary, now the trend

of the judiciary is that the most efficient method of extracting the maximum

surplus out of the labour is to make their employment itself insecure. An

unorganized or insecure labor is best available as either a contract worker or a

temporary hand. All legal pronouncements that give legal rights to such workmen

to become direct and permanent were therefore required to be done away with.

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