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Strikes And Lockouts

Rashmi Bagri
13 Jan 2022 11:36 AM GMT
Strikes And Lockouts
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Preventing illegal strikes and lockouts is a key concept both under Industrial Disputes Act, 1947 and in the Industrial Relations Code. Its significance can be understood by the fact that this statement finds its place in the very objectives of the Industrial Disputes Act, alongside maintaining harmony and good relations and well, solving industrial disputes. This article aims to look at...

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Preventing illegal strikes and lockouts is a key concept both under Industrial Disputes Act, 1947 and in the Industrial Relations Code. Its significance can be understood by the fact that this statement finds its place in the very objectives of the Industrial Disputes Act, alongside maintaining harmony and good relations and well, solving industrial disputes. This article aims to look at the history and causes of strikes and lockouts, provisions on them in the old and new legislations and important landmark judgments that have helped us attain clarity over the years about these terms.

Strikes

History

In March 1862, to demand an eight-hour workday, around 1200 workers of Howrah Railway station went on the first strike in the history of India. This strike emboldened the workers everywhere and thus, followed the 1877 strike of Nagpur Empress Mill workers demanding a wage hike. Then in 1881, the jute workers in Bengal went on a strike to protest wage reduction which was further followed by the Jute workers strike of 1885 and 1889 resulting in police firing on the strikers. Although the second half of the nineteenth century saw some instances of spontaneous resistance by industrial workers, the real working-class struggle and political awakening occurred in the 20th century where India witnessed the rise of organized trade union movement and assertion of their rights by the working class. This political awakening was evident in the several strikes that took place all over Mumbai when Bal Gangadhar Tilak was arrested on sedition charges in 1908. In the words of Lenin, "The infamous sentence pronounced by the British Jackals on the Indian democrat Tilak, evoked street demonstrations and strikes in Mumbai. In India too, the proletariat has already developed a conscious political mass struggle and thus the Russian style British regime in India is doomed." And well, most Indian national movements for freedom struggle that followed had one thing in common – workers going on a strike to dismantle the colonial structures and it can be stated that the Indian national struggle would have been incomplete without it.

Causes

In a study published in Economic and Political Weekly, the strikes in India had been analyzed closely to discover the rationale behind them and the conclusion is applicable even in 2022. Strikes always occur due to certain discontentment and frustrations and these could arise from various factors from inadequate wages, poor personnel policy and grievance system and disagreeable working conditions. The study came to a seemingly trite but significant conclusion that industrial peace in any country depends on the prevailing economic climate in that country, pointing to a direct correlation between industrial unrest and economic disparities. The formation of trade unions has entirely to do with the power to strike since the study concluded that, "Trade union membership gives workers a sense of cohesion and self-confidence and for this reason also, organized workers are readier to take strike action than unorganized." And thus, the study pointed out that since labour organization has increased, strikes have also seen a steep rise in occurrence. Unsatisfactory personnel management was also added to the list of strikes although the government has taken numerous steps regarding this which have been discussed in detail in this article.

The Law

First and foremost, it has to be stated that the right to strike is not a fundamental right under the Constitution of India, the right to form an association/union is. This statement has also been iterated in the Supreme Court judgment of All India Bank Employees Association v. National Industrial Tribunal. While the right to form association or unions is a fundamental right under Article 19(1), Supreme Court has expressly laid down in Kameshwar Prasad v. State of Bihar that the right to strike is not a fundamental right although, the right to strike has been recognized as a statutory right under Industrial Disputes Act, 1947. Even Article 43A of the Constitution under Directive Principles of State Policy mentions that the state shall take steps to secure the participation of workers in the management of undertakings, establishments or other organizations engaged in any industry. In B.R. Singh v. Union of India, Justice Ahmadi had recorded that, "Strike in a given situation is only a form of demonstration. There are different modes of demonstrations, e.g. go-slow, sit-in, work-to-rule, absenteeism, etc. and strike is one such mode of demonstration by workers for their rights. The right to demonstrate and therefore, the right to strike is an important weapon in the armoury of the workers. This right has been recognized by almost all democratic countries. Though not raised to the high pedestal of a fundamental right, it is recognized as a mode of redress for resolving the grievance of workers." It is also important to note at this point that this statutory right to strike is not available to government employees as has been stated by Justice M.B. Shah in T.K. Rangarajan v. Government of Tamil Nadu & Others.

The Provisions

S.2(q) of Industrial Disputes Act, 1947 and S.2(zk) of Industrial Relations code, 2020 define a strike as cessation of work by a group of persons employed in any under industry through a concerted effort or refusal or common understanding. S.2(zk) of Industrial Relations Code, 2020 also includes in the definition of strike, a concerted (joint) casual leave on a given day by 50% or more workers employed in any industry.

Certain pre-conditions have been laid down in both the Act and the Code for a strike to be held legally which have been covered under S.22 of the ID Act, 1947. First and foremost, according to S.22 of ID Act, 1947, employees have to give notice of the strike to the employer within six weeks before striking and employees cannot go on a strike

  • within 14 days of giving such notice or
  • before the expiry of the date of strike specified in any such notice (as aforementioned), or
  • during the pendency of any conciliation proceedings before a conciliation officer and seven days after their conclusion.

Three noteworthy points here are one: that these conditions and this section apply only to employees involved in public utility services. Two: these provisions are not prohibitory, i.e. their non-fulfilment does not prohibit workers from going on a strike, rather if workers go on a strike without complying with these provisions, then the strike will be considered illegal, as per S.24, ID Act, 1947. And three: These provisions under S.22 are mandatory as observed by the apex court under Mineral Miner Union v. Kudremukh Iron Ore Co. Ltd.

While S.22 of ID Act, 1947 deals with provisions of strike specific to public utility services, S.23 talks about general prohibition of strikes and lockouts and says that no workman in any industrial establishment shall go on a strike

  • during the pendency of conciliation proceedings and 7 days after their conclusion
  • during the pendency of proceedings before labour court, tribunal, national tribunal and 2 months after their conclusion
  • during the pendency of arbitration proceedings before an arbitrator and 2 months after their conclusion
  • during any period in which a settlement or award is in operation pertaining to the subject matter of the strike

S. 24(2) of ID Act, 1947 also states that if a strike has already commenced and is in existence at the time of reference of an industrial dispute to a conciliation board/an arbitrator/a Labour Court/a tribunal or a National Tribunal, its continuation shall not be considered illegal, if, at its commencement, it was not in contravention of provisions laid down in S.22 and S.23. Furthermore, if a reference is pending in one of the above-mentioned forums but neither the employer nor the employee participates in the proceedings, then S.23 shall have no application to the strike which was declared when such reference to the forum was pending (Ballarpur Collieries Co. v. H. Merchant).

Talking about provisions relating to strike under Industrial Relations Code, Strike has been covered under S.62 and there are no separate sections for strikes public utility service industry and other industrial establishments. S.62 says that no person employed in any industrial establishment shall go on a strike without giving notice to the employer within 60 days before striking OR within 14 days of giving such notice or

  • before the expiry of the date of strike mentioned in such notice or
  • during the pendency of conciliation proceedings and seven days after their conclusion or
  • during the pendency of proceedings before a tribunal/National Industrial Tribunal and sixty days after their conclusion
  • during the pendency of arbitration proceedings and sixty days after their conclusion
  • When award or settlement is in operation regarding the subject matter of the strike

S.63 of IRC is the corresponding provision for S.24 of ID Act, 1947 and talks about when a strike or lockout shall be illegal and there are no changes in this. S.64 of IRC is important and is the corresponding provision for S.25 of ID Act, 1947 which talks about the prohibition of financial aid to illegal strikes or lockouts and says that no person shall knowingly spend or apply any money in direct furtherance or support of any illegal strike or lockout.

Consequences of illegal strike

Any strike happening in contravention of the above-mentioned provisions of S.22 and S.23 is labelled as an illegal strike under S.24, ID Act, 1947. Even a strike in contravention of 10(3) and 10A(4A) (where an industrial dispute is referred to Conciliation Board, Labor court, Tribunal and National Tribunal and where Industrial dispute has been referred to arbitration, respectively) is considered illegal under S.22 and S.23 of ID Act, 1947. In M/s Burn & Co. Ltd. V. Workmen, the apex court had held that mere participation of workmen in a strike would not justify their suspension or dismissal. In Punjab National Bank v. Their Employees, the Supreme Court had observed that if there is an ongoing strike then the employer has the right to bar the entry of workers striking, into the premises by legitimate methods and if the workers refuse to do so, the employer has a right to hold proper inquiry concerning that as per Industrial Disputes Standing Orders Act, 1947.

Comparison of penalties in strikes and Lockouts under ID Act, 1947 and IRC

Offences

Section in ID Act, 1947

Penalties

Corresponding section in IRC, 2020

Penalties

Workmen who commence, continue or acts in furtherance of an illegal strike

S.26(1)

fine of INR 50 and/or imprisonment up to 1 month

S.82(13)

fine of INR 1000 extendable to INR 10000 and/or Imprisonment up to one month

Employer who commences, continues or acts in furtherance of an illegal lockout

S.26(2)

Fine up to INR 1000 and/or imprisonment up to 1 month

S.82(14)

Fine of INR 50000 extendable to INR 1 Lakh and/or imprisonment up to one month

Person who instigates others to participate in an illegal strike or lockout

S.27

Fine up to INR 1000 and/or imprisonment of one month extendable to six months

S.82(15)

Fine of INR 10000 extendable to INR 50000 and/or imprisonment up to one month

Person who provides financial aid to illegal strikes and lockouts

S.28

Fine up to INR 1000 and/or imprisonment up to 6 months

S.82(16)

Fine of INR 10000 extendable to INR 50000 and/or imprisonment up to one month

Person who breaches any settlement or award which is binding on him

Note: Court may also direct the offender to pay a part of this fine as compensation to the injured party/party affected by such breach (Same in both the Act and the code)

S.29

Fine (not specified) and/or imprisonment up to six months

S.82(17)

Fine of INR 20000 extendable to INR 2 Lakh and/or imprisonment up to 3 months

but if it's a continuing breach then a further fine of INR 200 per day of continuance of breach post the first conviction

But if it's a continuing breach as per S.82(18), then a further fine of INR 1000 per day of continuance of breach post the first conviction

Person who willfully discloses confidential information

S.30

Fine of INR 1000 and/or imprisonment of 1 month extendable to 6 months

S.82(19)

Fine up to INR 20000 and/or imprisonment up to 1 month

Note: Any person who contravenes any provisions of this code not mentioned in 82(1) to 82(19) shall be fined up to INR 1 Lakh

Wages

Whether the workmen will be entitled to wages during the period of strike, is a question that was answered by the apex court in Cropton Greaves Ltd. v. Workmen, where it held that if the strike is legal and justified, then the workmen will be entitled to wages. What is a legal strike you may ask? It has already been mentioned above that a strike not compliant with provisions of S.22 and S.23 is an illegal strike as per S.24 of ID Act, 1947. Regarding whether a strike is justified or not, it's a question of fact to be adjudged specifically in each case but broadly, unless the reasons behind a strike are unreasonable, aberrant almost, the strike will be justified. Although, if workmen resort to coercion or violence during a strike, then even in a justified, legal strike, the workmen will be denied their wages during the strike period.

What about an employer's right to compensation for the loss he suffered due to an illegal strike? This question was taken up in Rohtas Industries v. It's Union and the apex court observed that the remedy for an illegal strike to an employer is only available under S.26 of the ID Act, 1947.

Lockouts

History

This might sound surprising but the history of lockouts is older than the history of strikes. The term lockout was used for the first time in 1860, to describe the economic coercion by employers in Britain. Although initially, lockouts were used to coerce workers to avoid union membership, in the later stages, it took the form of retaliation by employers to force striking workers to return to work. In India, the first lockout was more than twenty-five years later than it was seen on the world stage and was declared in Budge Jute Mills in Bengal.

Causes

Since lockouts came first, it would not be entirely correct to say that lockouts are the tools of retaliation available to employers, since employers are already at an advantage because of the workplace power dynamics. But lockout is the employer's way of forcing certain terms and conditions on workers and the employer locks the workers out of the workplace till the time they accept these terms and conditions. Lockout is essentially work stoppage being used as a weapon by an employer to force his workers to come to a consensus and the reasons generally have to do with attaining a forceful consensus or expressing his grievance with the workers or as a show of support for one set of workers.

The law

In Shri Ramchandra Spinning Mills v. the State of Madras, the Madras High Court has tried to define a lockout and recorded that, "a flood may have swept away the factory, a fire may have gutted the premises, a convulsion of nature may have sucked the whole place underground; still if the place of employment is closed or the work is suspended or the employer refuses to continue to employ his previous workers, there would be a lockout and the employer would find himself exposed to the penalties laid down in the Act." The Court further noted that if an employer has closed the business temporarily due to many reasons including but not limited to using temporary closure as a means of coercion or a mode of exerting pressure, then it will be considered a lockdown. And if it is illegal as per the provisions of the ID Act, 1947, then it will expose the employer to penalties therein. Another important case law is Lord Krishna Sugar Mills Ltd. Saharanpur v. State of UP where it was held that a lockout may not always be connected with economic demands and sometimes, it may have been resorted to as a security measure.

Provisions

The definition of the lockout has been provided in S.2(l) of ID Act, 1947 and 2(u) of IRC, 2020 and both places, it involves

  • temporary closing of a place of establishment, OR
  • suspension of work, OR
  • Refusal by an employer to continue to employ any number of persons employed by him

S.22 of ID Act, 1947 says that any employer in a public utility service shall not lock out his workmen without giving them notice within six weeks before locking out or within fourteen days of giving such notice or

  • before the expiry of the date of lockout specified in the notice or
  • during the pendency of conciliation proceedings and seven days after their conclusion

These provisions are mandatory as pointed out by the apex court in Mineral Miner Union v. Kudremukh Iron Ore Co. Ltd.

While S.22 speaks of lockouts specifically in public utility service, S.23 talks about provisions relating to other industrial establishments and says that a lockout shall not be declared by an employer

  • during pendency of conciliation proceedings and seven days post conclusion of such proceedings
  • during the pendency of proceedings before a Labour Court/Tribunal/National Tribunal and two months post conclusion of such proceedings
  • during pendency of arbitration proceedings and two months post conclusion of such proceedings

The sections regarding the illegality of a strike and lockout and prohibition of financial aid to illegal strikes and lockouts are the same for strikes and lockouts, as referred above.

Speaking about provisions regarding lockouts under Industrial Relations Code, S.62 lays down certain pre-requirements for employers before imposing a lockout, regardless of the kind of industrial establishment (as opposed to ID Act, 1947 where public utility service establishment and other industrial establishments have been dealt with separately under S.22 and S.23 respectively) and says that no employer of an industrial establishment shall lockout any of its workers without giving them notice within sixty days before locking them out or

  • within fourteen days of giving the aforesaid notice or
  • before the expiry of date given in the notice or
  • during the pendency of conciliation proceedings and seven days after their conclusion or
  • during the pendency of proceedings before a tribunal or a national Industrial tribunal and sixty days post their conclusion or
  • during the pendency of arbitration proceedings before an arbitrator and sixty days post their conclusion or
  • during a period when award/settlement is in operation concerning the subject matter relating to the reason for the lockout.

However, a notice of lockout is not necessary if a strike/lockout is already going on, however, an intimation has to be sent to the appropriate government about the same.

Provisions relating to the illegality of strikes and prohibition of financial aid to illegal strikes and lock-outs are the same as mentioned in ID Act, 1947 and the corresponding sections are S.63 and S.64.


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