STRIKES AND LOCK-OUTS UNDER INDUSTRIAL DISPUTES ACT, 1947

Hari Sri Vidya Lalithambica is a 4th-year BA.LLB student at Padala Rama Reddi Law College, Hyderabad, Read More.

---

ABSTRACT

The Industrial Disputes Act, 1947, is a critical piece of legislation in India, aimed at promoting industrial peace and regulating the relationship between employers and employees. This article focuses on the provisions related to strikes and lockouts under the Act, analysing the legal framework, procedural requirements, prohibitions, and penalties for non-compliance. The Act provides a clear definition of a strike and lock-out, and this article discusses their essentials, including the legal criteria that must be met for these industrial actions to be considered lawful.

The article further examines the procedures that must be followed before initiating a strike or lock-out, particularly the mandatory notice periods for both employees and employers in public utility services. It also covers the prohibitions placed on strikes and lock-outs during ongoing conciliation, arbitration, or legal proceedings, underscoring the importance of maintaining industrial harmony.

In addition, the legal consequences of non-compliance with the provisions of the Act are explored, including penalties for illegal strikes and lock-outs. The work also differentiates between illegal and justified strikes, based on case law such as Crompton Greaves vs. The Workmen, offering insights into how the courts view industrial actions. This article emphasizes the importance of adhering to the procedures outlined in the Industrial Disputes Act to ensure fair industrial relations, avoid legal penalties, and promote a cooperative environment between employers and workers.

KEYWORDS: Industrial Disputes Act, Strike, Lock-out, Procedures for Strike and Lock-out, Prohibitions for Strike and Lock-out, Consequences of Non-Compliance

INTRODUCTION

Following India’s independence, the field of Industrial Law gradually emerged as a distinct and significant area of legal study. Though its development was initially slow, recent decades have seen considerable expansion, with an increasing number of industrial law cases being adjudicated by the Supreme Court. This branch of law is instrumental in maintaining stability in employer-employee relationships, which in turn plays a crucial role in national economic growth.

A fundamental piece of legislation in this domain is the Industrial Disputes Act, 1947, which was enacted by the Government of India to facilitate the peaceful settlement of conflicts between employers and workers. The Act aims to uphold industrial peace, safeguard employee rights, and strengthen the collective bargaining process, thereby contributing to the nation’s economic progress.

OBJECTIVES OF THE INDUSTRIAL DISPUTES ACT, 1947

The primary objectives of the Industrial Disputes Act, 1947, as interpreted by the Supreme Court in the case of Workmen of Dimakuchi Tea Estate vs. Dimakuchi Tea Estate, include:

• Enhancing labor conditions and ensuring fair treatment of workers.
• Promoting industrial harmony by balancing the interests of both employers and employees.
• Contributing to national economic growth through a well-regulated industrial environment.

As a piece of social legislation, the Act plays a vital role in fostering a cooperative industrial atmosphere and preventing conflicts that could hinder productivity and economic stability.

To illustrate key concepts under the Act: when workers collectively refuse to work to demand improved wages or working conditions, it is termed a strike. Conversely, when an employer temporarily shuts down operations in response to such demands, it is known as a lockout. Understanding these fundamental definitions is crucial for navigating the complexities of industrial disputes and ensuring compliance with legal frameworks.

DEFINITION AND ESSENTIALS OF STRIKE

Strike is a very powerful weapon used by trade unions and other labour associations to get their demands accepted. Section 2(q) of Industrial Disputes Act, 1947 defines strike as “a cessation of work by a body of persons employed in any industry acting in combination or a concerned 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 to accept employment”.

A strike refers to a coordinated stoppage of work by a group of workers intending to exert pressure on the employer to meet their demands during an industrial conflict.

Key Elements of a Strike

1. Cessation of work with intent: The stoppage of work must be a collective action aimed at resolving an industrial dispute. Mere cessation of work without this intent does not constitute a strike.
2. No time restriction: Strikes can range from very short durations, such as half an hour, to extended periods.
3. Collective refusal: A strike involves a unified and deliberate refusal by workers to perform their duties, distinguishing it from individual absenteeism.

Strike as a Mode of Protest

A strike is considered a form of demonstration used to address workers’ grievances. While the right to strike is not classified as a fundamental right, it is widely recognized in democratic societies as a legitimate form of redress. However, this right is not absolute and is subject to restrictions under Sections 10(3), 10-A(4-A), 22, and 23 of the Industrial Disputes Act. These provisions place limitations on strikes to ensure they do not disrupt industrial harmony or public welfare unnecessarily.

DEFINITION AND ESSENTIALS OF LOCK-OUT

Section 2(l) of the Industrial Disputes Act defines lock-out as “temporary closure of a workplace, the suspension of work, or an employer’s refusal to continue employing any number of workers during their period of employment”.  A lock-out is when an employer temporarily closes a workplace or stops work. It’s different from permanently closing a business.

A lock-out serves as the counterpart to a strike and acts as a tool available to employers to compel workers to reconsider their demands regarding employment conditions.

Key Elements of a Lock-Out

1. Temporary cessation of operations: This includes an employer’s temporary closure of a workplace, suspension of work, or refusal to continue employing workers.
2. Coercive intent: The actions taken by the employer are intended to pressure workers into yielding to specific terms.
3. Industrial dispute: The occurrence of a lock-out is typically linked to the existence of an industrial conflict.

Distinction Between Lock-Out and Closure

1. Nature of the action: A lock-out is temporary, whereas a closure signifies a permanent shutdown of operations.
2. Purpose: A lock-out is a method of exerting pressure during an industrial dispute, while a closure is usually driven by business or financial considerations.
3. Industrial conflict: A lock-out arises in the context of an ongoing industrial dispute, whereas a closure may occur independently of any labor dispute.

DEFINITION OF PUBLIC UTILITY SERVICE

Section 2(n) of the Industrial Disputes Act, 1947 defines “Public Utility Service” as essential services that are crucial for public welfare and safety. These include:

1. Railway services or air transport for passengers and goods.
2. Services related to major ports or docks.
3. Sections of industrial establishments where worker safety or the operation depends on its functioning.
4. Postal, telegraph, or telephone services.
5. Industries that supply power, light, or water to the public.
6. Systems of public sanitation or waste management.
7. Any other industry that the government can declare to be a public utility service during emergencies or when it is in the public’s interest, for a maximum period of six months, extendable if necessary.

In simple terms, “Public Utility Services” are vital services that the public relies on, and the government can declare other industries to be such services in case of an emergency.

LEGAL FRAMEWORK OF STRIKES AND LOCK-OUTS

At the heart of this legal framework is the requirement that both employers and employees must follow specific procedures before initiating a strike or lock-out. The Industrial Disputes Act sets clear rules for strikes and lock-outs to ensure fairness and balance between employees and employers. Both parties must follow specific procedures before initiating these actions, particularly in public utility services, where disruptions can impact society at large.

PROCEDURE OF STRIKES IN INDIA

Section 22: “(1) No person employed in a public utility service shall go on strike in breach of contract—

(a) without giving to the employer notice of strike, as hereinafter provided, within six weeks before striking; or

(b) within fourteen days of giving such notice; or

(c) before the expiry of the date of strike specified in any such notice as aforesaid; or

(d) during the pendency of any conciliation proceedings before a conciliation officer and seven days after the conclusion of such proceedings.”

Under Section 22(1) of the Industrial Disputes Act, specific rules govern strikes in public utility services to ensure orderly conduct and provide an opportunity for resolution:

1. Prior notice: Workers must give the employer notice at least six weeks before initiating a strike.
2. Cooling-off period: A strike cannot commence within 14 days of giving the notice.
3. Adherence to notice timeline: The strike must begin on or after the date specified in the notice and within six weeks of the original notice.
4. Prohibition during conciliation: Strikes are not permitted while conciliation proceedings are ongoing or within seven days of their conclusion.

PROCEDURE OF LOCK-OUTS IN INDIA

“(2) No employer carrying on any public utility service shall lock-out any of his workmen—

(a) without giving them notice of lock-out as hereinafter provided, within six weeks before locking out; or

(b) within fourteen days of giving such notice; or

(c) before the expiry the date of lock-out specified in any such notice as aforesaid; or

(d) during the pendency of any conciliation proceedings before a conciliation officer and seven days after the conclusion of such proceedings”.

Under Section 22(2) of the Industrial Disputes Act, employers must comply with the following regulations when declaring a lock-out in public utility services:

1. Advance notification: Employers are mandated to provide employees with prior notice at least six weeks before the intended lock-out.
2. Waiting period: The lock-out cannot commence until 14 days have passed from the date of issuing the notice.
3. Specified timeline: The lock-out must begin on or after the date mentioned in the notice.
4. Restrictions during conciliation: Employers are prohibited from declaring a lock-out while conciliation proceedings are underway or within seven days of their conclusion.

The phrase “during the pendency of conciliation proceedings” in Section 22(1)(d) and Section 22(2)(d) refers to a situation where conciliation (mediation) is taking place to resolve a dispute. If one of the unions representing the workers is involved in the process, the Supreme Court has ruled that any agreement reached during this process (under Section 18(3)) will apply not just to the union members, but to all workers in the company. This means that if the dispute affects all employees, the conciliation process must be respected by everyone, and no strike or lock-out can happen while the process is ongoing.[1]

The term “in breach of contract” means breaking the terms of an employment agreement, whether the agreement is written or understood. There can’t be a contract that prohibits a worker from going on strike. Even if such an agreement exists, it cannot be considered a valid part of the employment contract[2].

NOTICE OF STRIKE OR LOCK-OUT

(3) The notice of lock-out or strike under this section shall not be necessary where there is already in existence a strike or, as the case may be, lock-out in the public utility service, but the employer shall send intimation of such lock-out or strike on the day on which it is declared, to such authority as may be specified by the appropriate Government either generally or for a particular area or for a particular class of public utility services.

(4) The notice of strike referred to in sub-section (1) shall be given by such number of persons to such person or persons and in such manner as may be prescribed.

(5) The notice of lock-out referred to in sub-section (2) shall be given in such manner as may be prescribed.

(6) If on any day an employer receives from any persons employed by him any such notices as are referred to in sub-section (1) or gives to any persons employed by him any such notices as are referred to in sub-section (2), he shall within five days thereof report to the appropriate Government or to such authority as that Government may prescribe the number of such notices received or given on that day”.

Section 22(3) says that in certain situations, the notice for a strike or lock-out can be skipped:

1. If there is already a lock-out in place at a public utility service, workers don’t need to give notice before going on strike.
2. If there is already a strike happening at a public utility service, the employer doesn’t need to give notice before declaring a lock-out.

Section 22(4) and 22(5) mention that notices for strikes and lock-outs must be given in the manner specified by the rules.

Section 22(6) talks about informing the authorities. If an employer receives a strike or lock-out notice (as per Section 22(1)), they must report it to the appropriate government or authority within five days.

Even if a strike happens while discussions are still taking place, and workers claim the employer caused it, both the workers and the employer must still follow the legal steps outlined in Sections 22 and 23. In other words, both sides must comply with the rules, even if one side provoked the strike.[3]

PROHIBITION OF STRIKES AND LOCK-OUTS

Section 23: “No workman who is employed in any industrial establishment shall go on strike in breach of contract and no employer of any such workman shall declare a lock-out—

(a) during the pendency of conciliation proceedings before a Board and seven days after the conclusion of such proceedings;

(b) during the pendency of proceedings before [a Labour Court, Tribunal or National Tribunal] and two months after the conclusion of such proceedings;

(bb) during the pendency of arbitration proceedings before an arbitrator and two months after the conclusion of such proceedings, where a notification has been issued under sub-section (3A) of section 10A; or

(c) during any period in which a settlement or award is in operation, in respect of any of the matters covered by the settlement or award”.

Section 23 restricts strikes and lockouts under specific circumstances, applicable to both public utility services and non-public utility establishments. The prohibition applies in the following situations:

1. During the period of conciliation proceedings and for seven days following their conclusion.
2. While a dispute is being adjudicated by a Labour Court, Tribunal, or National Tribunal, and for two months after the verdict is delivered.
3. During arbitration proceedings, as well as for two months after their conclusion, provided that a notice has been issued under Section 10-A(3-A).
4. While a settlement or award related to the dispute remains in force on the matters addressed therein.

Comparison of Sections 22 and 23

If the provisions of Sections 22 or 23 of the Act are violated, penal action can be taken under Section 26 of the Act. To hold someone accountable, two things must be proven:

1. The strike took place in a public utility service, as defined in Section 2(n) of the Act.
2. The strike was a breach of the workmen’s employment contract.

Section 24: General prohibitions of strikes and lock-outs

“(1) A strike or a lock-out shall be illegal if—

• it is commenced or declared in contravention of section 22 or section 23; or
• it is continued in contravention of an order made under sub-section (3) of section 10 1 [or sub-section (4A) of section 10A].

(2) Where a strike or lock-out in pursuance of an industrial dispute has already commenced and is in existence at the time of the reference of the dispute to a Board, [an arbitrator, a] 2[Labour Court, Tribunal or National Tribunal], the continuance of such strike or lock-out shall not be deemed to be illegal, provided that such strike or lock-out was not at its commencement in contravention of the provisions of this Act or the continuance thereof was not prohibited under sub-section (3) of section 10 [or sub-section (4A) of section 10A].

(3) A lock-out declared in consequence of an illegal strike or a strike declared in consequence of an illegal lock-out shall not be deemed to be illegal”.

A strike or lockout is deemed illegal in the following cases:

1. If it is initiated or declared in violation of the provisions outlined in Section 22 or Section 23.
2. If it continues after an order prohibiting it under Section 10(3) or Section 10-A(4A).

However, if a strike or lockout has already commenced before an industrial dispute is referred to a Board, arbitrator, Labour Court, Tribunal, or National Tribunal, it will not be classified as illegal, provided that:

• The strike or lockout was lawful when it began.
• Its continuation is not prohibited under Section 10(3) or Section 10-A(4A).

Furthermore, a lockout declared in response to an unlawful strike, or a strike initiated in retaliation to an illegal lockout, will not be regarded as illegal.

Under Section 26 of the Industrial Disputes Act, individuals responsible for an illegal strike may face penalties. However, even illegal strikes may be categorized as justified or unjustified, depending on the underlying reasons. This distinction arises because the demands associated with a strike can include both lawful and unlawful issues. A strike may technically breach the procedural requirements of the Act, rendering it illegal, but still be considered justified if the workers’ grievances are legitimate, such as unpaid wages or unsafe working conditions. On the other hand, a strike involving violence, unreasonable demands, or destruction of property would be both illegal and unjustified.

In the case of Crompton Greaves vs. The Workmen[4], the court clarified that workers are entitled to wages during a strike only if it is both legal and justified. A strike is legal if it follows all rules under the Industrial Disputes Act, and it is justified if the workers’ reasons are reasonable and fair. In this case, the company retrenched 93 workers without informing the Assistant Labour Commissioner while conciliation talks were still ongoing. Since the company’s actions violated fair practice, the strike was considered justified despite being technically illegal.

The takeaway is that a justified strike arises from valid grievances and peaceful conduct, even if it breaches legal procedures. However, workers lose their right to wages if they resort to violence, sabotage, or other disruptive actions during the strike.

Section 25: No person shall knowingly expend or apply any money in direct furtherance of support of any illegal strike or lock-out.

Section 25 involves these key points:

1. Money is being spent or used.
2. The money is being spent to support or encourage an illegal strike or lockout.
3. The strike or lockout must actually be illegal.
4. The person using the money must know that the strike or lockout is illegal.

In other words, the person must have a “guilty mind” or intention to break the law when spending the money.

LEGAL CONSEQUENCES OF NON-COMPLIANCE

“Penalty for illegal strikes and lock-outs-

(1) Any workman who commences, continues or otherwise acts in furtherance of, a strike which is illegal under this Act, shall be punishable with imprisonment for a term which may extend to one month, or with fine which may extend to fifty rupees, or with both.

(2) Any employer who commences, continues, or otherwise acts in furtherance of a lock-out which is illegal under this Act, shall be punishable with imprisonment for a term which may extend to one month, or with fine which may extend to one thousand rupees, or with both.”

If workers participate in an illegal strike, they can face imprisonment for up to one month, a fine of up to fifty rupees, or both. Employers who declare an illegal lockout may face imprisonment for up to one month, a fine of up to one thousand rupees, or both.

Additionally, workers involved in an illegal strike lose their right to wages for the duration of the strike. Employers who initiate an illegal lockout may be required to compensate workers for any losses incurred.

Moreover, those involved in illegal strikes or lockouts can face civil liability for damages caused by their actions. Courts can also issue orders to stop illegal strikes or lockouts, and failure to comply with these orders can result in further legal consequences. It is crucial for both workers and employers to adhere to the procedures outlined in the Industrial Disputes Act to avoid legal penalties and maintain a cooperative industrial environment.

CONCLUSION

In conclusion, the Industrial Disputes Act, 1947, remains essential for maintaining industrial harmony in India. It provides a structured framework for resolving disputes, balancing the interests of workers and employers. As India’s economy evolves, especially with the rise of contract-based work and technological changes, the Act’s principles still hold value but require modernization to address new labor challenges.

Today, the Act ensures fair dispute resolution and protects workers’ rights, while offering employers a way to resolve conflicts without escalation. For continued progress, it is crucial to adapt the Act to contemporary issues, ensuring it supports both economic growth and labor rights. By fostering better communication and mutual respect, the Act can continue to contribute to a stable and productive industrial environment, benefiting both employees and employers.

REFERENCES

1. Labour and Industrial Laws with lates amendements, S. N. Misra, Central Law Publications, 29^th edition, 197-211
2. Strike and Lock-out, Lawbhoomi, https://lawbhoomi.com/strike-and-lockout/
3. https://www.rippling.com/glossary/id-act
4. Strike and Lock-out under the Industrial dispute Act, 1947, Legal Service India, https://www.legalserviceindia.com/legal/article-12602-strike-and-lock-out-under-industrial-dispute-act-1947.html

[1] Ram Nagar Cane and Sugar Co. Ltd Vs Jain Chakravarty and Others, 1961 I LLJ 244 (SC)

[2] State of Bihar vs Deodhar Jha, AIR 1958 Pat. 51

[3] Colliery Mazdoor Congress vs Beerbhum Coal Co., 1952 LAC 29 (LAT)

[4] AIR 1978 SC 1489