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Labour Law Notes Simplified 2022

Contents
1) Employment Test................................................................................................................................................................................1
2) Tests to determine who is an workman...............................................................................................................................................2
3) Determining which establishment is an Industry................................................................................................................................3
4) Industrial Dispute:...............................................................................................................................................................................5
5) Trade Unions.......................................................................................................................................................................................6
6) Legality of Strikes...............................................................................................................................................................................8
7) Justification of Strikes.......................................................................................................................................................................11
8) Layoff Chapter VA (25A to E).........................................................................................................................................................11
9) Retrenchment....................................................................................................................................................................................13

Read restrictive covenant, reinstatement, conciliation and govt reference from case list.

1) EMPLOYMENT TEST
Determine employee or independent contractor. Only if an employee, he is entitled to certain benefits.
● Control and supervision test:
a. We need to see who is exercising the final control over the employees even though they are employed
indirectly under the Employer through another level of employees between them and the Employer.
(Shivnandan Sharma v. PNB).
b. Control and supervision not only in the work to be done but also the manner it is to be done. However, the
extent of control varies from industry to industry and therefore if such control can be shown to have been
exercised at most important stages of the work, then employee. (Dharangdhara Chemical Works v.
Management).
c. A mandate to work at factory premises only and further the right to the employer to reject the final
product if not upto the standard emerged as important indicator of control and supervision. (Birdhichand
Sharma v. First Civil Judge) (Subbarao dissent in State v. Balaji Shankar Waje ).
d. Supervision and control may not be required for all stages of production but if exercised at the very end
through rejection of product, it is a clear indicator of Employer-employee relationship. (DC Dewan
Mohideen Sahib & Sons v. United Biri Workers Union) (Silver Jubilee Tailoring House v. Chief
Inspector of Shops).
● Integrality Test:
a. If the work done by the employees is integral to the business, then it is a contract OF service, thus an
employee. Else it is a contract FOR service and thus an independent contractor. (Dharangadhara
Chemical Works v. Management ) (Bank Voor Handel v. Slatford)
● Control Plus Test:
a. Apart from control and supervision, if the employer is providing tools and machines, then the people
working are employees. (Silver Jubilee Tailoring House v. Chief Inspector of Shops) (Montreal v.
Montreal)
b. Being in exclusive employment of one Employer is not an indicator of being an employee. (Silver Jubilee
Tailoring House v. Chief Inspector of Shops)
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c. We have to see who has a chance of profit and risk loss, if the employer is having it then the person is an
employee. If an independent contractor by common logic he would care for his own profit and loss.
(Montreal v. Montreal).
● Economic Reality Test:
a. If the livelihood of the workers are substantially dependant on the work done for the Employer, even if
there's no direct relationship between the main Employer and the employee, it doesn't matter how many
sham intermediaries are there, those persons will always be the employee. (Krishna Iyer in Hussain Bhai
v. Alath Factory Enterprises) (US v. Silk)
● Other miscellaneous tests:
a. Who is the paymaster, essentially the person paying them will be their employer. Useful in cases where a
big corporation is alleged to be the main Employer but the workers are paid by some other people who
employ them temporarily. (Workmen of Nilgiri Cooperative Marketing Society v. State of Tamil Nadu)
b. In contract labor context, the primary control is always with the contractor. Only when the worker is sent
to the Employer and he works according to the control and direction of the employer but still then he has
secondary control.
● There is no one particular test to determine whether one is an employee or independent contractor and all the
tests are to be applied and considered in its totality. Court has to perform a balancing act of weighing all
relevant factors. Since labor laws deal with the weaker sections of society, the tendency of the court is to tilt in
favor of declaring it to be a contract OF service by virtue of beneficial legislation. (Sushilaben v. The New India
Assurance Company Limited, para 25)
● How to identify Independent contractor? (Sushilaben v. The New India Assurance Company Limited, para
25,26)
a. Contract itself mentioning its a contract FOR service
b. Not paid wage/salary but honorarium amount
c. Paid a percentage of earning of the employer (not the usual case with employees)
d. Appointment is contractual and tenure based and can be terminated by notice from either sides- parties
seeing each other as equals and not master servant
e. Not entitled to leave benefits available to other regular employees.

2) TESTS TO DETERMINE WHO IS AN WORKMAN

Section 2(s) of the ID Act defines workman:
Workman means any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled,
technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or
implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such
person who has been dismissed, discharged or retrenched in connection with, or as a consequence of, that dispute, or
whose dismissal, discharge or retrenchment has led to that dispute, but does not include any such person--
(i) who is subject to the Air Force Act, 1950 (45 of 1950), or the Army Act, 1950 (46 of 1950), or the Navy Act, 1957 (62
of 1957); or
(ii) who is employed in the police service or as an officer or other employee of a prison; or
(iii) who is employed mainly in a managerial or administrative capacity; or
(iv) who, being employed in a supervisory capacity, draws wages exceeding 59[ten thousand rupees] per mensem or
exercises, either by the nature of the duties attached to the office or by reason of the powers vested in him, functions
mainly of a managerial nature.]

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● Determining who an workman is important as only workmen are entitled to benefits under the Industrial Disputes
Act, 1947.
● Before determining who an workman is, we must determine whether he is an employee.
● Who are workers: Manual, technical, operational, clerical, supervisory work, unskilled and skilled.
● Who are not: Manager and Supervisor if supervisor draws salary above a certain limit (Rs. 10k).
● Tests to determine:
a. Main v. Ancillary Test: Look at the main work done by the employee, if it falls within the 'who are
workers' part then the person is a workman. Focus should be on the principal nature of duties and not the
works incidentally done. (HR Adyanthaya v. Sandoz) (SK Maini v. Carona Sahu Company Ltd.)
b. Along with the nature of work, look at the terms and conditions of the employment for determining who
is a workman (Anand Regional Coop Oil Seedgrowers Union Ltd. v. Shaileshkumar Harshadbhai Shah).
c. Only if a person does the types of work Manual, technical, operational, clerical, (skilled unskilled read
ejusdem generis) only then he'll be a workeman u/s 2(s). (Sonepat Cooperative Sugar Mills Ltd. v. Ajit
Singh) (HR Adyanthaya v. Sandoz).
d. Designation of the person doesn't matter (SK Verma v. Mahesh Chandra)
e. Skilled and unskilled u/s 2(s) must be read ejusdem generis with the other four categories mentioned,
meaning that the skill should be related to those kinds of works only. (HR Adyanthaya v. Sandoz). A skill
of sales agent is not ejusdem generis with those four thus they aren't workman as per s 2(s) IDA (HR
Adyanthaya v. Sandoz) A skill of acting isn't a skill of similar kind as Manual, technical, operational,
clerical but a skill of creative art and hence artists are not workmen (Bharat Bhawan Trust v. Bharat
Bhawan Artists Association).
f. A supervisor is a workeman u/s 2(s) ONLY IF he draws a salary below the specified limit.
g. If the main nature of work is supervisory in nature and have under him people who could not act without
his direction then such person is a supervisor. Essentially see whether the supervisor has supervision and
control over the people under him. (Heavy Engineering Corporation Ltd v. Presiding officer).
h. To prove one is a supervisor, show that there were people actually working under his control and the
supervision was not given as a mere guidance. If a person is in charge of a small department alone
without anybody under him, then the person is not a supervisor. (Anand Regional Coop Oil Seedgrowers
Union Ltd. v. Shaileshkumar Harshadbhai Shah).
● Who are not workman
a. Professionals are not Workmen. An occupation is a principal activity related to job, work or calling that
earns regular wages for a person and a profession, on the other hand, requires extensive training, study
and mastery of the subject. Persons performing such functions cannot be seen as a workman within the
meaning of Section 2(s) of the ID Act. (Muir Mills v. Swayam Prakash Srivastava) (ESIC Medical
Officers' Association v. ESIC)
b. Law is a noble profession and hence lawyers aren't Workmen. (Muir Mills v. Swayam Prakash
Srivastava)
c. Medicine is a noble profession and hence lawyers aren't Workmen. (ESIC Medical Officers' Association
v. ESIC)

3) DETERMINING WHICH ESTABLISHMENT IS AN INDUSTRY

● The object of the ID act is to settle industrial disputes; so to settle disputes in an establishment it is important to
determine whether it is an industry or not.
● Only if it is an industry, the provisions related to dispute settlement will apply.
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● Read only Bangalore Water Supply case, fuck the rest.
● S 2(k) ID Act defines Industry
Bangalore Water-Supply v. R. Rajappa; para 49 and 162- What is an Industry?
· Triple test to determine industry: (i) systematic activity, (ii) organized by co-operation between employer
and employee (iii) for the production of material goods and services for satisfaction of human needs.
· Focus should always be on the relation between employer and employee (control hierarchy by
employer and expectation of wages by employee: then industry)
· The third prong clarifies that there must be production of material goods and services, and not something
spiritual or intangible. Thus, spiritual undertakings won’t be industry.
· Should be a continuous activity and not something casual and temporary.
· The term ‘undertaking’ u/s 2(j) it has to be read noscitur a sociis to the terms occurring before it, the
analogy with trade or business is in the ‘carrying out’ of the economic adventure and not in the purpose.
(overruled Hospital Mazdoor Sabha only to this extent)
· First and the second parts of Section 2(j) should be read together. If an activity falls under either part of the
definition, it would be an industry.
· Profit motive or gainful objective is irrelevant to determine industry.
· Dominant Nature test: If an establishment has a complex of activities (where some of which qualify for
exemption from industry and others not, and involves employees some of whom are not 'workmen' or some
departments are not productive of goods and services if seen in isolation); then, the predominant nature of the
services and the integrated nature of the departments as will be true test. The whole undertaking will be
'industry' although those who are not 'workmen' by definition may not benefit by the status.
It is for this reason that schools and universities are Industries as the nature of the activity is education, which
is a service to the community. There is cooperation between the institute and its various employees for the
purpose of imparting education and a number of operations of educational institutes which are severable from
the teaching work and have an industrial character, such as transport buses, or printing press. Excluding
education from industry would have the effect of excluding these activities, which cannot be allowed. However,
teachers being noble profession won’t be a workman. (University of Delhi case overruled)
· Sovereign functions (eg: key aspects of public administration like public justice stand out of the circle of
industry) cannot be industry in strict sense, however welfare and economic activities are industries. Severability
test: Even in departments discharging sovereign functions, if there are units which are industries and they are
substantially severable, then they can be considered industry.
· Professionals: If a professional such as a lawyer conducts an organized activity with juniors, typists,
paralegals and other support staff, it would be an industry (although lawyer not workman as noble
profession) as the lawyer cannot continue his activity without this support. Since there is cooperation of various
specialists, seniors and juniors, and support staff, it is industry. However, a single professional with 1 or few
assistants would not fall within industry, as applying rules to small places will make it difficult for them to
function.
· Charities 3 categories:
a. Enterprise, like any other, yields profits but they are siphoned off for altruistic objects: Industry
b. Institution makes no profit but hires the services of employees as in other like businesses but the goods
and services, which are the output, are made available, at low or no cost, to the indigent needy who are priced
out of the market: Industry

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c. Establishment is oriented on a humane mission fulfilled by man who work, not because they are paid
wages, but because they share the passion for the cause and derive job satisfaction from their contribution:
NOT AN INDSUTRY (refer to 2nd bullet).
· Clubs: Clubs would be included within industry because there is cooperation between the club owners
and the workers engaged as catering staff to provide various services like bar tenders, cooks, waiters, ball boys,
etc. However, self-service clubs, where the members come and arrange things for themselves and the clubs do not
hire any employees, are excluded from ambit. (Madras Gymkhana case overruled).
· Sadhus, saints undertaking spiritual activity with their followers isn’t industry as predominant nature
of undertaking is spiritual and not analogous to trade/business.

Steps:
To raise an industrial dispute
1. Whether industry? – use triple test; if can’t understand from that then look into- dominant nature test,
severability test, whether employees doing it for wages or spiritual purpose, is it a self-serving establishment or
are they hiring external people on wages.
2. If industry, whether the people working are employees or independent contractor? Use employment tests
3. If employees, are they workman u/s 2(s) ID Act?

4) INDUSTRIAL DISPUTE:
● What amounts to Industrial Dispute?
a. Industrial dispute has to be a real and substantial dispute between the parties disturbing industrial peace.
(Prabhakar v. Joint Director)
b. Mere demand by one side cannot give rise to an Industrial Dispute (ID). For it to be an ID, such demand
has to be rejected by the other side. (Prabhakar v. Joint Director)
c. A ID is a live dispute as long as parties don't agree and keep on objecting to each others demands, no
limitation period applies here.
d. Dispute need not be in writing.
● How to raise an ID?
a. Under the ID Act, ID can only be raised by way of a trade union where the cause is espoused by them u/s
36 ID Act.
b. Individual workman cannot raise an industrial dispute EXCEPT only with respect to the few grounds
mentioned under s. 2A ID Act (deeming provision)
c. Representation of union is required only when the cause is espoused, even if the union withdraws their
support, it will still be a valid ID.
d. If there is no union of workmen in an establishment, a group of employees can raise the dispute and it'll
be valid (Workmen of Dharampal Premchand v. Dharampal Premchand)
e. Even if the union is not of that establishment but of the same industry, it can raise a valid dispute
provided it has some representative character (as in some employees of that establishment, which has no
union of their own, can join that union of another establishment of the same industry to prove
representative character) . (Workmen of Dharampal Premchand v. Dharampal Premchand) (Workmen of
Indian Express (P) Ltd. v. The Management).
f. If the cause is espoused by a union belonging to that establishment only, then no need to show
representative character, it is implied.

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g. If the dismissal of an individual employee working in an establishment in Delhi is taken up by the union
of workmen in a place away from Delhi, that would clearly not make the dispute an industrial dispute.
(Workmen of Dharampal Premchand v. Dharampal Premchand).
h. Individual disputes:
- if not supported by union only 2A grounds are available for raising the dispute
- if supported by union, then all grounds.
i. To convert an individual dispute to Industrial dispute it must be espoused by a union (though you need
not strictly be a workman) and it must be proved that the individual is one in whose employment, non-
employment, terms of employment or conditions of labour the workmen as a class have a direct or
substantial interest. (Workmen of Dimakuchi Tea Estate Vs. The Management of Dimakuchi Tea Estate)
● Interpretation of Industrial Dispute definition s 2(k) ID Act, 1947
Industrial dispute means any dispute or difference between employers and employers, or between employers and
workmen, or between workmen and workmen, which is connected with the employment or non-employment or the terms
of employment or with the conditions of labour, of any person.
● 3 parts to the definition of Industrial Dispute:
● The first part refers to the factum of a real or substantial dispute.
● the second part to the parties to the dispute, be between employers and employers, or between employers and
workmen or between workmen or between workmen and workmen.
● the third, to the subject matter of that dispute. Subject matter may relate to any of two matters - employment
or non-employment, and terms of employment or conditions of labour, of any person.
● Interpretation as to the ambit of ‘any person’:
The expression "any person" occurring in the third part of the definition clause cannot mean anybody and
everybody in this wide world. Read in context with the purposes of the act, it is held that 'any person' in the
definition clause means-
a person in whose “employment, non-employment, terms of employment, conditions of labour”, the workmen as a
class have a direct or substantial interest
OR
with whom they have, under the scheme of the Act, a community of interest.

5) TRADE UNIONS
● Governed by the Trade Unions Act, 1926
● Registered Trade Unions can also espouse a worker's cause.
● Who can form a Trade Union?
a. Persons who are not “workmen” in an “industry” can’t form a Trade Union at all. (The Tamil Nadu Non-
gazetted Government Officers Union, Madras v. The Registrar of Trade Unions, Madras)).
b. S 2(g) says 'all persons employed in a trade or industry'. Therefore, for some activity to be an industry, it
should be one amounting to a commercial undertaking i.e. of the nature of trade or business as mentioned
u/s 2(h). However, under ID Act, the definition is wider and also includes non-commercial undertaking.
(Rangaswami and Ors. V. Registrar of Trade Unions and Ors, here it cannot be stated that the workers
are employed in a trade or business carried on by the employer as the services rendered by them are
purely of a personal nature)
c. Reading these two subsections of s. 2(g) and (h) together, it is clear that for a combination of workmen to
be a trade union, such workmen must be persons employed in a trade or industry. Since "industry" isn’t
defined in the Trade Unions Act, it appears to us that the same considerations which have been held to be
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relevant for the purpose of holding whether an institution is an industry or not under the Industrial
Disputes Act, would be equally relevant for the purposes of the Trade Unions Act. Here, Andhra HC took
a wider approach than in Rangaswami. (Tirumala Tirupati Devasthanam v. Commissioner of Labour).
d. Core of the civil services integrated with the inalienable and regal functions of Government; those aspects
of Governmental activities cannot be an "industry"; no can such civil servants be "workmen". The
concept of collective bargaining can never be attributed to civil servants in light of their constitutional
safeguards. Thus, civil servants of the State can NOT form a trade union. (The Tamil Nadu Non-gazetted
Government Officers Union, Madras v. The Registrar of Trade Unions, Madras).
● Cancellation of Registration of Trade Unions
a. Trade Unions are registered u/s 4 (see the conditions, self explanatory).
b. Cancellation of such registration is done u/s 10.
c. Who can cancel the registration? Two contradictory views:
I. Can’t be canceled on application by Third party: U/s 10, the Certificate of Registration may be
withdrawn or cancelled by the Registrar of Trade Union either on application of a Trade Union inviting
the attention of the Registrar of Trade Unions or the Registrar may suo moto take cognizance under the
said section. There is no mention in the said provision about cancellation of Registration of Trade Union
on application by any other person. (R.G. D'Souza v. Poona Employees Union -2010 Two judge)
II. Can cancel on application by third party: s. 10(a) allows for the TU itself to cancel or withdraw the
registration through an application, but it cannot be envisaged that u/s 10(b) the TU itself would come up
for cancellation on the ground that the said certificate of registration has been obtained by fraud or
mistake or that the Trade Union has willfully contravened any provisions of the said Act.
Therefore, u/s 10(b), either the Registrar has to act suo-moto or on the basis of an application received by
him (basically a complaint from other party that the alleged TU not complying so cancel its registration)
where the grounds contained in Section 10(b) are alleged. In this case, Resp 2 was another TU and they
filed a complaint before the registrar who then took cognizance, so they had locus standi. (Solapur
District Central Co-operative Bank Employees Union v. Addl. Labour Commissioner (I/C) and Ors 2016
Single Judge)
III. PLEASE NOTE: Solapur was a single judge decision and RG Desouza was a two-judge bench. Both
contradictory, none overruled, so use them to argue from both sides.
d. Cancellation of registration cannot be done if the certificate of registration is granted by mistake due to
incorrect assessment or non-application of mind or mechanical act on the part of the Authority. This
granting of the certificate due to mistake or incorrect assessment or non-application of mind by the
Registrar of Trade Unions cannot be nullified by him Under Section 10 of the Act, but can only be
rectified by the appellate authority or writ court as rightly opined by the High Court in the impugned
judgment. (R.G. D'Souza v. Poona Employees Union)
e. Even if the Registrar cancels the Certification of Registration, then it must be preceded by an enquiry,
followed by show cause notice, disclosing grounds for initiating action so that the same can be answered
by the noticee Union effectively. Further, it is on receiving an application for withdrawal or cancellation
of registration, it is required that the application was approved in general meeting of the Trade Union if it
was not so approved, that it has the approval of the majority members of the Trade Union. (R.G. D'Souza
v. Poona Employees Union)
● When is demonstrations by Trade Union legal and illegal
a. S. 18 of the Act prevents Civil courts from interfering with the legitimate rights of the workmen (through
ad interim injunctions mostly) to pursue their demands by means of strikes or agitations or other lawful
activities so long as they do not indulge in acts unlawful, tortuous and violent. Such demonstrations and
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dharnas, when they do not turn unlawful, violent and tortuous, cannot be curbed by orders of Civil Court
and would come within the purview of Section 18 of the Act. (Ahmedabad Textile Research Association
v. ATIRA Employees Union and Anr)
b. Just because a strike is illegal doesn’t mean it is a tort of Conspiracy, look into the objective of the people
involved, in industry it is mostly done to make the management listen to their demands, if such is the
object, then it cannot be a conspiracy, although the strike is illegal. (Rohtas Industries Ltd. and Ors. v.
Rohtas Industries Staff Union and Ors)
c. There is no provision in the Act which contemplates a claim for money by an employer from the
workmen. Claims by employers against workmen on grounds of tortious liability have not found a place
in the pharmacopoeia of Indian Industrial Law. (Rohtas Industries Ltd. and Ors. v. Rohtas Industries Staff
Union and Ors)
d. Vidya Sagar Institute of Mental Health and Neuro Services v. Vidya Sagar Hospital Employees Union-
Laid down a few principles based on the law on the right to hold demonstrations by the unions/employees
for pressing their demands:-
1. Peaceful demonstration is a fundamental right of the Unions/employees.
2. Immunity given to the Unions under Section 18 of the Trade Unions Act,1926 does not extend to
conduct those acts which may amount to offence.
3. In exercise of such a right to peaceful demonstration, unions/employees cannot disrupt the
functioning of the employer or obstruct willing workers from performing their duties. Further
they cannot indulge in the acts of violence, physical assault, intimidation, threats etc.
4. There is no right of the unions/employees to hold demonstrations at the residence of the
employer. This is specifically prohibited by the provisions of the Industrial Disputes Act and
amounts to unfair labor practice on the part of the unions (See Schedule V Entry 6).
5. While it may be the right of the union to hold peaceful demonstration, such demonstrations
cannot be allowed to become violent or intimidating in nature. The safety of those visitors who
are visiting the employers premises as well, as those willing workers, including their smooth
ingress and egress is also to be ensured.
6. The Courts have devised the methods to ensure it by fixing the distance from the employers
premises within which such demonstration etc would not be permissible meaning thereby Unions
can resort to these demonstrations only beyond a particular distance. In this way they are able to
hold peaceful demonstration and at the same time it is ensured that such peaceful demonstration
does not relegate the aforesaid rights of the employer.
● Please note that in Vidya Sagar Institute case, defendant and its members threatened to resort to coercive methods
of raising slogans, shouting, blockage of passage and disruption of medical facilities in the hospital and to go on
strike with effect from 24th June, 2002. The defendant refused to amicably settle the disputes and threatened to go
on strike and disrupt the working of the hospital. As a result, plaintiff suit for declaration that the strike threatened
by Dr. Vidyasagar Hospital Employees' Union is illegal and seeking a restraint against them. Since here was
stoppage of work and blocking ingress of workers and patients, the court allowed the injunction; but in
Ahmedabad Textile case, there were slogans only and that too during lunch; so no injunction and legal strike
protected u/s 18 TU Act).
● Thus, while the right to form an union is guaranteed by sub-clause (c), the right of the members of the association
to meet would be guaranteed by sub-clause (b), their right to move from place to place within India by sub-clause
(d), their right to discuss their problems and to propagate their views by sub-clause (a), their right to hold property
would be that guaranteed by sub-clause (f) and so on each of these freedoms being subject to such restrictions as

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might properly be imposed by clauses (2) to (6) of Article 19 as might be appropriate in the context. (All India
Bank Employees' Association Vs. National Industrial Tribunal and Ors)

6) LEGALITY OF STRIKES
Chapter V ID Act talks about prohibition of strike and lockouts
Strike is defined u/s 2(q) ID Act:
strike means 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.

In Buckingham and Carnatic Co Ltd. v. Workers of the Buckingham and Carnatic Co Ltd, the court held that for
something to qualify as a strike the following ingredients must be fulfilled u/s 2(q):
● Cessation of work by a body of persons employed in that establishment
● Acting in combination
● Their refusal to go back to work is concerted

Strikes can be illegal by 2 ways:

● Contravening statute:
(B.R. Singh v. Union of India)
Right to strike though not a fundamental right, it is a legal right. But the right to strike is not absolute and
restrictions have been placed on it. These are to be found in Sections 10(3), 10A(4A), 22 and 23 of the Industrial
Disputes Act, 1947.
a. Section 10(3) empowers the appropriate Government to prohibit the continuance of a strike if it is in
connection with a dispute referred to one of therefore a created under the said statute.
b. Section 10A(4A) confers similar power on the appropriate Government where the industrial dispute
which is the cause of the strike is referred to Arbitration and a notification on that behalf is issued under
Section 10(3A).
c. Section 22 provides that no person employed in a public utility service shall proceed on strike unless the
requirements of Clauses (a) to (d) of Sub-section (1) thereof are fulfilled. The expression 'public utility
service' is defined in Section 2(n).
d. Section 23 next imposes a general restriction on declaring strikes in breach of contract during pendency
of (i) conciliation proceedings, (ii) proceedings before Labour Court, Tribunal or National Tribunal, (iii)
arbitration proceedings & (iv) during the period of operation of any settlement or award.
The field of operation of Sections 22 and 23 is different. While Section 10(3) and Section 10A(4A) confer power
to prohibit continuance of strike which is in progress, Sections 22 and 23 seek to prohibit strike at the threshold.
Under Section 24 a strike will be illegal only if it is commenced or declared in contravention of Section 22 or 23
or is continued in contravention of an order made under Section 10(3) or 10A(4A) of the I.D. Act.
● Becoming violent: If the strikes are violent in nature, then it's automatically unconstitutional and illegal.
Kameshwar Prasad v State of Bihar, TK Rangarajan v. Government of Tamil Nadu: Right to strike is not a
fundamental right but a legal right. But for government employees, it is not even a legal right, can be curtailed by
prohibiting them in service conduct rules.
Demonstrations which are peaceful are only protected u/a 19(1)(a) and (b) of the Constitution.

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Time duration of strike doesn’t matter:
As per Buckingham and Carnatic co. v. Workers of Buckingham and Carnatic, time duration does not matter. Even a 4
hour duration of refusal to work is deemed as a strike.

Types of strikes and their legality

● Pen Down Strike is a strike which falls u/s 2(q) of the ID Act. (Punjab National Bank v. Its Workmen)
● "Go slow" has always been considered a serious type of misconduct as it causes more harm to machines than
complete cessation of works and thus illegal per se. (Bharat Sugar Mills Ltd. v. Jai Singh and Ors)
● The calling of a bundh entails the restriction of the free movement of the citizen and his right to carry on his
avocation under article 19 and 21 and hence right to call a bundh is unconstitutional and won't be a part of their
19(1)(a) rights. (Bharat Kumar K Palicha v. State of Kerala)
● Bundh initiated by the State Government is also illegal. (Bharat Kumar K Palicha v. State of Kerala).
● Hartal as long as it is peaceful is not unconstitutional (Kerala Vyapari Vavasayi Ekopana Samithi, Ottappalam
and Anr. V. State of Kerala and Ors).

Every strike is not illegal, under the Indian Law, strikes are only illegal when penalties have been imposed for them for
contravention of the provisions of Sections 22, 23 and 24 of the Act. (State of Bihar v. Deodar Jha and Ors)

Since s 22 read with those of s 26 are of a penal nature, they have to be construed strictly meaning to prove a strike
illegal u/s 22, all conditions must be breached. So, you have to also prove breach of contract of service by the
employees as mentioned in 22(1) and 23(1). But now courts assume that there was a breach of contract if questions come
under these sections. In this case, the five workers who reached the premises, stayed away and did not perform their
duties, as they were bound to render to the Company and this, therefore, was in contravention of the terms of their
service. So, a large number of workers in the Company, including the five respondents aforesaid, did go on strike in
breach of contract. (State of Bihar v. Deodar Jha and Ors).

Ambit of s 23(b) of the ID Act which prevents strikes and lock outs during pendency of any proceedings?
● No kind of strikes are allowed when a dispute is already pending before a court. It doesn't matter if the subject
matter of the current strike is different from the pending proceedings. (State of Bihar v. Deodar Jha and Ors).)
● Different argument by Krishna Iyer who said it looks strange that the pendency of a reference on a tiny or
obscure industrial dispute should block strikes on totally unconnected yet substantial and righteous demands.
(Gujarat Steel Tubes v. Mazdoor Sabha)
● Same as Steel tubes: For s. 23 bar to be applicable, the issue/demands raised in the strike has to be related to the
pending Industrial Dispute. (Bharat Petroleum v. Petroleum Employees Union).
● However, Deodar Jha is the correct view. In s. 23(a) and (b), there cannot be a strike or lock-out even in relation
to matters other than those which are pending before the Labour Court, Tribunal or National. (Chemicals & Fibres
of India Ltd. v. D.G. Bhoir)

Individual Disputes u/s 2A:

Pendency of a dispute between an individual workman as such and the employer u/s 2A ID act does not attract the
provisions of Section 23, i.e. when there’s a pending proceeding wrt dispute between employer and individual employee,
strikes by general employees can’t be said to be illegal u/s 23(b) ID Act.
In the present case, one employee was dismissed whose case was pending before labour court. Following which 3 other
employees were also dismissed and this lead to a strike. Court said this strike isn’t illegal as pendency of a dispute
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between an individual workman as such and the employer does not attract the provisions of Section 23. (Chemicals &
Fibres of India Ltd. v. D.G. Bhoir).

Conciliation proceedings (in brief)

● s. 22(1)(a) says that the date of strike must be within six weeks from the date of the issue of strike notice. 22(1)(b)
states that the day of strike must not be within 14 days from the date of notice.
● S. 20(1) read writ S. 12(1) of the Act states that the moment a notice of strike given by the workmen of a public
utility service under S. 22, reaches the conciliation Officer, the conciliation proceedings start automatically.
Further by the force of S. 22(1)(d) of the Act, the workmen who have given such notice are prohibited from going
on strike not during the pendency of conciliation proceedings, but also during seven days after the conclusion of
the conciliation proceedings.
● According to S. 20(2)(b) in case of failure of conciliation, the proceeding stands concluded on the date when the
report of the Conciliation Officer is received by the State Government but till the date on which the parties are
informed by the Government of the failure report, the conciliation proceedings must be deemed to be pending and
it is only on the date of such intimation, the conciliation proceedings come to an end.
● Therefore, the question that arises is, what happens when conciliation fails and by the time the 7 days waiting
period post failure of conciliation is over, the six months from date of first notice has elapsed?
● Court held, the union needs to give a fresh notice but however, the automatic conciliation won’t start this time or
else it would lead to an infinity loop. (Mineral Miner's Union v. Kudremukh Iron Ore Co. Ltd).
● The predominant view is that after giving notice of strike as u/s 22 ID Act, wait for 14 days but must
conduct strike within 6 weeks from the date of giving notice. However, this court said that once a notice is
given, you can’t go on strike within 6 weeks but anytime after that even after 2 years. (Management, Essorpe
Mills Ltd. v. Presiding Officer, Labour Court)
7) JUSTIFICATION OF STRIKES
This is not in statute but is a creation of the Judiciary. It is required to be determined whether the strike is justified or not
to entitle the workers to wages.

For employees to get wages during the period of strike, the strike has to be BOTH LEGAL & JUSTIFIED. In other
words, if the strike is only legal but not justified or if the strike is illegal though justified, the workers are not entitled to
the wages for the strike-period. (Syndicate Bank and Ors. v. K. Umesh Nayak) (Churakulam Tea Estate (P) Ltd. v. The
Workmen) (Crompton Greaves Ltd. v. Its Workmen).

Deduction of wages:
Whether the deduction from wages will be pro rata for the period of absence only or will be for a longer period will
depend upon the facts of each case such as whether where was any work to be done in the said period, whether the work
was in fact done and whether it was accepted and acquiesced in, etc. Eg- If absent for a period when most of the work
to be done even for a short duration, can deduct wages for entire day or when employer acquiesces with the
employee coming back later and doing work then pro rata basis. (Bank of India and Ors. v. T.S. Kelawala).

Thus, to justify strikes, satisfy these prongs:

● Exhausted all remedies before doing strike
● Resorted to strike after using all ID Act mechanisms
● The demand was of a very urgent nature
● The demand concerned larger interest of society (public interest)
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● Resorted to strike as a last resort

Just punishment: Punishment to be valid must be preceded by an enquiry, management must have evidence to prove
charge before tribunal. Further the strike must be unjustified and illegal and the worker should have been an active
participant in the same.
In case of an illegal strike, for determination of quantum of punishment, see active participation.
Active participation: Mere failure to report for duty, when a strike is on, doesn’t necessarily means misconduct. Not
reporting for work does not lead to an irrebuttable presumption of active participation in the strike. More is needed to
bring home the mens rea and that burden is on the prosecutor, to sit the management. (Gujarat Steel Tubes v. Gujarat
Steel Tubes Mazdoor Sabha)

8) LAYOFF CHAPTER VA (25A TO E)

Defined in s 2(kkk) ID Act:
means the failure, refusal or inability of an employer on account of shortage of coal, power or raw materials or the
accumulation of stocks or the break-down of machinery [or natural calamity or for any other connected reason] to give
employment to a workman whose name is borne on the muster rolls of his industrial establishment and who has not been
retrenched.
Explanation.--.....not given employment by the employer within two hours of his so presenting himself shall be deemed to
have been laid-off for that day
Provided that if the workman, instead of being given employment at the commencement of any shift for any day is asked
to present himself for the purpose during the second half of the shift for the day and is given employment then, he shall be
deemed to have been laid-off only for one-half of that day:
Provided further that if he is not given any such employment even after so presenting himself, he shall not be deemed to
have been laid-off for the second half of the shift for the day and shall be entitled to full basic wages and dearness
allowance for that part of the day;

The power to lay off doesn't come from the ID Act but from standing orders/ contract of employment. ID Act only
provides for compensation only for establishments coming Chapter VA.
Compensation for layoff. Three scenarios:
● If terms of contract of service or statutory terms in the Standing Orders don’t give power to employer to lay off-
pay full wages for such period as compensation.
● If terms of employment confer a right of lay-off on the management
Two cases:
a. Industrial establishment which is governed by Chap. VA: Compensation payable according to Chapter VA
provisions
b. If Chap VA doesn’t apply (<50): Compensation payable as per terms of employment
(Workmen of Firestone Tyre & Rubber Co. of India (P) Ltd. and Ors. v. Firestone Tyre & Rubber Co. and Ors.)
If Standing Orders confer more benefits than ID act then Standing order benefits you'll get.

Whether s. 25C recognizes a common law right of the industrial employer to lay off his Workmen?
● No. The position is that workmen who are laid off are entitled to compensation and the method in which the said
compensation has to be calculated has been prescribed by the two clauses of s. 25C.

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● When the laying off of the workmen is referred to in s. 25C, it is the laying off as defined by s. 2(kkk), and so,
workmen who can claim the benefit of s. 25C must be workmen who are laid off and laid off for reasons
contemplated by s. 2(kkk);
● If any case is not covered by the Standing Orders, it will necessarily be governed by the provisions of the Act, and
lay off would be permissible only where one or the other of the factors mentioned by s. 2(kkk) is present, and for
such lay off compensation would be awarded under s. 25C (Workmen of Dewan Tea Estate v. The
Management).

Layoff is different from lockout. Lockout is an antithesis to strike. (Management of Kairbetta Estate v. Rajamanickam)

Layoff vs Lockout
● Happens due to shortage of raw materials v. Happens as employer wants to bargain with employees
● Layoff not a common law right v. lockouts common law right
● Happens in ongoing industry v. closed industry

Computation of 240 days under section 25B INCLUDES sundays and other paid holidays because the expression
‘actually worked under the employer’ must necessarily comprehend all those days during which he was in the
employment of the employer and for which he had been paid wages either under express or implied contract of service or
by compulsion of statute, standing orders etc. (Workmen of American Express International Banking Corporation v.
Management of American Express International Banking Corporation)

To claim layoff compensation under ID Act:

● Employee show that you've worked for at least one year of continuous service (s 25B) (working for 240 days in a
year will also be deemed as one year of continuous service)
● Interruptions to continuous service will break the chain but if the interruptions are the ones which are mentioned
in s 25B (1) then the chain doesn't break, continuous service continues.
● Compensation Amount: 50% of basic wages + DA
● To gate lay of compensation you have to show up to work everyday (25E ii)
● 25D muster roll maintenance is required to figure out that >50 people are working and that an employee worked
at least 240 days a year.
● 25E lays down conditions when not entitled to compensation. 3 conditions.
Dispute about the last one. What is "another part of the establishment" in 25E (iii)?

The Associated Cement Companies Limited, Chaibassa Cement Works, Jhinkpani v. Their Workmen
S. 25E(iii) of ID Act states that workman laid off will not be paid compensation if Such laying-off is due to a strike or
slowing- down of production on the part of workmen in another part of the establishment.
How is another part of establishment to be understood?
Essentially if there is a strike in another part of the establishment, so we have to show that the two parts (one
where employees are laid off and the one where the strike is going on) are connected to one single establishment.
The court developed the following criteria to understand this:
(1) ownership, (2) control and supervision, (3) finance, (4) management and employment, (5) geographical
proximity and (6) general unity of purpose and functional integrality

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However, since most industrial undertakings are now complex with branches and parts, which one of the tests among the
above becomes important will depend on the facts. Not necessary that all tests have to be satisfied. The real purpose of
these tests is to find out the true relation between the parts, branches, units etc. If in their true relation they
constitute one integrated whole, we say that the establishment is one; if on the contrary they do not constitute one
integrated whole, each unit is then a separate unit.
In this case, a cement making factory and within 1 mile of it there’s a limestone quarry which supplies raw materials.
Strike in quarry for increasing wages demand, so no raw material, workers laid off at factory. Whether they will be liable
to layoff compensation?
Court said yes, as all the tests are satisfied and the functional integrity test became important here because the adjacent
limestone quarry supplies the raw material, almost exclusively, to the factory; the quarry is indeed a feeder of the factory
and without limestone from the quarry, the factory cannot function. So, the quarry and factory are part of same
establishment hence no layoff comp u/s 25E(iii).

9) RETRENCHMENT
Defined in s 2 (oo)
retrenchment means the termination by the employer of the service of a workman for any any reason whatsoever,
otherwise than as a punishment inflicted by way of disciplinary action, but does not include--
(a) voluntary retirement of the workman; or
(b) retirement of the workman on reaching the age of superannuation if the contract of employment between the employer
and the workman concerned contains a stipulation in that behalf; or
[(bb) termination of the service of the workman as a result of the non-renewal of the contract contract of employment
between the employer and the workman concerned on its expiry or of such contract being terminated under a stipulation
in that behalf contained therein; or]
(c) termination of the service of a workman on the ground of continued ill-health

The four conditions not included will amount to termination simpliciter and not retrenchment. Termination if as a of
punishment, then it become dismissal.

Chapter VA (25F, FF & FFF): deals with compensation for retrenchment

● Retrenchment was initially envisaged as a situation where the employer thought he needed more workers but he
actually didn't. So there became a surplus of workers, and so he terminated the surplus workers.
● It is for that reason that court held retrenchment can happen only in ongoing industry. Thus, when business is
closing down, it doesn't amount to retrenchment so no retrenchment compensation in such cases. Retrenchment
compensation only when the industry is a going concern. (Pipraich Sugar Mills Ltd v. Pipraich Sugar Mills
Mazdoor Union) (Hariprasad Shivshankar Shukla vs A.D. Divikar).
● However, this position changed when it said retrenchment doesn't solely happen in surplus labour case. But rather,
the termination here amounts to retrenchment as it is not covered by any of the exceptions mentioned in section
2(oo). (Uptron India Limited v. Shammi Bhan and Ors)
● However, there's a catch. This retrenchment compensation only going concern issue is under s 25F. So to allow
for retrenchment compensation when an establishment is closing down, sections 25FF and FFF were introduced
to allow for deemed retrenchment compensation in such cases.
● However, here too, like layoff, the 240 days continuous service requirement applies (Employers in Relation to
Digwadih Colliery v. Their Workmen)

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Retrenchment Compensation Calculation: s 25F
● One month's notice in writing.
● Can't terminate during the period of notice.
● Pay the wage during the period of notice.
● Pay 15 days average pay for each years worked (15* n number of years)
● Total= (15*n)+ 1 month wage

Notice to government u/s 25F (c):

Appellant was a driver in the DAV Public School. His services were terminated according to section 25F. Notice to the
workman and retrenchment compensation were given, but 25F (c) requiring notice to the appropriate government was not
complied with.
Court observed that clause (c) was also a mandatory provision and a condition precedent for retrenchment. Non-
adherence to it makes the retrenchment invalid.
Rule 76 says give notice to Government within 3 days of giving notice to employee. (Raj Kumar v. Director of
Education & Ors)

Fixed Term Contracts: Initially fixed term contracts were interpreted to be a part of s 2(oo) and thus were paid
retrenchment compensation by cases like Sundar Money and Santosh Gupta. But then the legislature brought section 2(oo)
(bb) and overruled them. So now for fixed term contracts ending by efflux of time, there's no retrenchment Compensation.

Ill health exception to retrenchment compensation s. 2(oo)(c):

● For ‘Ill health’ it has to be seen whether the services offered by the workman would be affected due to the disease
or incapacity. Ill health has to be seen realistically, in context and not technically, and if the condition is such that
it interferes with the usual ordinary functioning of the worker’s duties, it would be included within ill health.
(Anand Bihari & Ors. v. Rajasthan State Road Transport Corporation, Jaipur)

Chapter VB
Applicability (Section 25K)
1. Industrial establishment with workmen > 100. Establishment of seasonal character or intermittent work excluded.
2. Here conditions are much stricter as prior approval of the appropriate Government required for lay off,
retrenchment.
3. The rest of the requirements are the same as Chapter VA.

Prohibition on Layoff (Section 25M)

1. Prior approval of the appropriate Government required for laying off workmen. Application needs to be given
containing the reason for layoff. Due to exceptional circumstances such as accident in the establishment or death
of the employer, the appropriate government may exempt such establishments from any approval.
2. Approval is not required if layoff due to shortage of power, natural calamity, mine, fire, flood, excess
inflammable gas or explosion. If laid-off on these grounds, then the establishment must seek permission from the
appropriate government to continue the layoff.
3. The appropriate government may pass an order after giving the opportunity of hearing to the parties and grant
the layoff. If the decision is not communicated within 60 days, consider approved.
4. If approval is not sought then layoff is illegal and workmen entitled to all benefits under any law.

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5. Layoff compensation calculated as per Section 25C.
6. Workers will not be deemed to be laid off if provided alternative employment or the transfer does not cause
undue hardship. See exact from explanation to Section 25M.

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