Unit 4

Workers Participation in Management in Indian IndustriesWorkers’ participation in Management in India was given importance only after Independence. Industrial Disputes Act,1947 was the first step in this direction, which recommended for the setting up of works committees. The joint management councils were established in 1950 which increased the labour participation in management. Since July 1975 the two-tier participation called shop councils at shop level and Joint councils were introduced. Workers’participation in Management Bill, 1990 was introduced in Parliament which provided scope for up liftment of workers.Reasons for failure of Workers participation Movement in India:

1. Employers resist the participation of workers in decision-making. This is because they feel that workers are not competent enough to take decisions.

2. Workers’ representatives who participate in management have to perform the dual roles of workers’ spokesman and a co-manager. Very few representatives are competent enough to assume the two incompatible roles.

3. Generally Trade Unions’ leaders who represent workers are also active members of various political parties. While participating in management they tend to give priority to political interests rather than the workers’ cause.

4. Schemes of workers’ participation have been initiated and sponsored by the Government.However, there has been a lack of interest and initiative on the part of both the trade unions and employers.

5. In India, labour laws regulate virtually all terms and conditions of employment at the workplace. Workers do not feel the urge to participate in management, having an innate feeling that they are born to serve and not to rule.

6. The focus has always been on participation at the higher levels, lower levels have never been allowed to participate much in the decision-making in the organizations.

7. The unwillingness of the employer to share powers with the workers’ representatives, the disinterest of the workers and the perfunctory attitude of the government towards participation in management act as stumbling blocks in the way of promotion of participative management.

Measures for making Participation effective:1. Employer should adopt a progressive outlook. They should consider the

industry as a joint endeavor in which workers have an equal say. Workers should be provided and enlightened about the benefits of their participation in the management.

2. Employers and workers should agree on the objectives of the industry. They should recognize and respect the rights of each other.

3. Workers and their representatives should be provided education and training in the philosophy and process of participative management. Workers should be made aware of the benefits of participative management.

4. There should be effective communication between workers and management and effective consultation of workers by the management in decisions that have an impact on them.

5. Participation should be a continuous process. To begin with, participation should start at the operating level of management.

6. A mutual co-operation and commitment to participation must be developed by both management and labour.

Modern scholars are of the mind that the old adage “a worker is a worker, a manager is a manager; never the twain shall meet” should be replaced by “managers and workers are partners in the progress of business”

Forms of Workers Participation in Management in IndiaForms of workers’ participation in management

The various forms of workers’ participation in management currently prevalent in the country are:

1. Suggestion schemes: Participation of workers can take place through suggestion scheme. Under this method workers are invited and encouraged to offer suggestions for improving the working of the enterprise. A suggestion box is installed and any worker can write his suggestions and drop them in the box. Periodically all the suggestions are scrutinized by the suggestion committee or suggestion screening committee. The committee is constituted by equal representation from the management and the workers. The committee screens various suggestions received from the workers. Good suggestions are accepted for implementation and suitable awards are given to the concerned workers. Suggestion schemes encourage workers’ interest in the functioning of an enterprise.

2. Works committee: Under the Industrial Disputes Act, 1947, every establishment employing 100 or more workers is required to constitute a works committee. Such a committee consists of equal number of representatives from the employer and the employees. The main purpose of this committee is to provide measures for securing and preserving amity and good relations between the employer and the employees.Functions: Works committee deals with matters of day-to-day functioning at the shop floor level. Works committees are concerned with:

o Conditions of work such as ventilation, lighting and sanitation.o Amenities such as drinking water,canteens, dining rooms, medical and

health services.o Educational and recreational activities.o Safety measures, accident prevention mechanisms etc.o Works committees function actively in some organizations like Tata

Steel, HLL, etc but the progress of Works Committees in many organizations has not been very satisfactory due to the following reasons:

o Lack of competence and interest on the part of workers’ representatives.

o Employees consider it below their dignity and status to sit alongside blue-collar workers.

o Lack of feedback on performance of Works Committee.o Undue delay and problems in implementation due to advisory nature of

recommendations.3. Joint Management Councils: Under this system Joint Management

Councils are constituted at the plant level. These councils were setup as early as 1958. These councils consist of equal number of representatives of the employers and employees, not exceeding 12 at the plant level. The plant should employ at least500 workers. The council discusses various matters relating to the working of the industry. This council is entrusted with the responsibility of administering welfare measures, supervision of safety and health schemes, scheduling of working hours, rewards for suggestions etc.

Wages, bonus, personal problems of the workers are outside the scope of Joint management councils. The council is to take up issues related to accident prevention, management of canteens,water, meals, revision of work rules, absenteeism, indiscipline etc. the performance of Joint Management Councils have not been satisfactory due to the following reasons:

o Workers’ representatives feel dissatisfied as the council’s functions are concerned with only the welfare activities.

o Trade unions fear that these councils will weaken their strength as workers come under the direct influence of these councils.

4. Work directors: Under this method, one or two representatives of workers are nominated or elected to the Board of Directors. This is the full-fledged and highest form of workers’ participation in management. The basic idea behind this method is that the representation of workers at the top-level would usher Industrial Democracy, congenial employee-employer relations and safeguard the workers’ interests. The Government of India introduced this scheme in several public sector enterprises such as

Hindustan Antibiotics, Hindustan Organic Chemicals Ltd etc. However the scheme of appointment of such a director from among the employees failed miserably and the scheme was subsequently dropped.

5. Co-partnership: Co-partnership involves employees’ participation in the share capital of a company in which they are employed. By virtue of their being shareholders, they have the right to participate in the management of the company. Shares of the company can be acquired by workers making cash payment or by way of stock options scheme. The basic objective of stock options is not to pass on control in the hands of employees but providing better financial incentives for industrial productivity. But in developed countries, WPM through co-partnership is limited.

6. Joint Councils: The joint councils are constituted for the whole unit, in every Industrial Unit employing 500 or more workers; there should be a Joint Council for the whole unit. Only such persons who are actually engaged in the unit shall be the members of Joint Council. A joint council shall meet at least once in a quarter. The chief executive of the unit shall be the chairperson of the joint council. The vice-chairman of the joint council will be nominated by the worker members of the council. The decisions of the Joint Council shall be based on the consensus and not on the basis of voting.In 1977 the above scheme was extended to the PSUs like commercial and service sector organizations employing 100 or more persons. The organizations include hotels, hospitals, railway and road transport, post and telegraph offices, state electricity boards.

7. Shop councils: Government of India on the 30th of October 1975 announced a new scheme in WPM. In every Industrial establishment employing 500 or more workmen, the employer shall constitute a shop council. Shop council represents each department or a shop in a unit. Each shop council consists of an equal number of representatives from both employer and employees. The employers’ representatives will be nominated by the management and must consist of persons within the establishment. The workers’ representatives will be from among the workers of the department or shop concerned. The total number of employees may not exceed 12.Functions of Shop Councils:

1. Assist management in achieving monthly production targets.2. Improve production and efficiency, including elimination of wastage of

man power.3. Study absenteeism in the shop or department and recommend steps to

reduce it.

4. Suggest health, safety and welfare measures to be adopted for smooth functioning of staff.

5. Look after physical conditions of working such as lighting, ventilation, noise and dust.

6. Ensure proper flow of adequate two way communication between management and workers.

Quality Circles (Q.C): Meaning, Objectives and Benefits

After reading this article you will learn about:- 1. Meaning of Quality Circles 2. Characteristics of Effective Quality Circles 3. Objectives 4. Implementation 5. Organisation and Working 6. Rules 7. Duties of Circle Leader 8. Steps for Setting up Quality Circles 9. Benefits 10. Launching of Programme.

Meaning of Quality Circles:Conceptually Quality Circles can be described as a small group of employees of the same work area, doing similar work that meets voluntarily and regularly to identify, analyse and resolve work related problems.

This small group with every member of the circle participating to the full carries on the activities, utilising problem solving techniques to achieve control or improvement in the work

The concept of the Quality Circle is based on “respect for the human individual” as against the traditional assumption based on suspicion and mistrust between management and its employees.

Quality circles built mutual trust and create greater understanding between the management and the workers. Cooperation and not confrontation is the key element in its operation. Quality Circles aims at building people, developing them, arousing genuine interest and dedication to their work to improve quality, productivity, cost reduction etc.

Thus we can say that a quality circle is a group of 5 to 8 employees performing similar work, who volunteer themselves to meet regularly, to identify the cause of their on-the-job problems, employ advanced problem-solving techniques to reach solutions and implement them.

The concept is based on the premise that the people who do a job everyday know more about it than anyone else and hence their voluntary involvement is the best way to solve their work related problems.

The Quality Circle concept provides an opportunity to the circle members to use their wisdom, creativity and experience in bringing about improvements in the work they are engaged in by

converting the challenging problems into opportunities and it contributes to the development of the employees and in turn benefits the organisation as well. The concept encourages the sense of belongingness in circle members and they feel that they have an important role to play in the organisation.

Characteristics of Effective Quality Circles:1. The atmosphere should be informal, comfortable and relaxed. The members should feel involved and interested.

2. Everyone should participate.

3. The objectives should be clear to the members.

4. The members should listen to each other.

5. The group should feel comfortable even when there are disagreements.

6. The decisions should generally be taken by a kind of consensus and voting should be minimum.

7. When an action is required to be taken, clear assignments should be made and accepted by all the members.

8. The leader should not dominate the group. The main idea should not be as to who controls but how to get the job done.

9. Until a final solution is found and results are attained feedback is necessary.

Objectives of Quality Circles:Some of the broad objectives of the Quality Circle are:(i) To improve quality, productivity, safety and cost reduction.

(ii) To give chance to the employees to use their wisdom and creativity.

(iii) To encourage team spirit, cohesive culture among different levels and sections of the employees.

(iv) To promote self and mutual development including leadership quality,

(v) To fulfill the self-esteem and motivational needs of employees.

(vi) To improve the quality of work-life of employees.

Implementation of Quality Circles in an Organisation:For the success of Quality Circle programme, following actions are necessary in the Organisation:(a) Few managers representing production, quality control, design, process planning form the Quality Circle (Q.C.) steering committee. This acts as a policy making body and will monitor the Q.C. in the Organisation.

(b) Top managment must attend the orientation courses designed for them.

(c) A committed top and middle management is necessary.

(d) A facilitator must be appointed, who serves as a link between top management, Q.C., steering committee, middle management circle leaders and circle members. Facilitator will coordinate training courses; get the support from all concerned including top management Q.C., steering committee, circle leader and circle members to help the circle leader in conducting the meetings, and to provide necessary resources.

Organisation and Working of Quality Circles:Q.C. was conceived in Japan in 1962 as a forum for training its work force for improving the quality of products. Q.C. is a voluntary one. Employees are free to join or not to join. In it, 8 to 10 employees including the Supervisor from same workshop doing similar work join together as a group. The Supervisor can become leader of the group, if the members of Q.C. so desire.

It is a part time activity; members of Q.C. are allowed to meet for an hour every week. During the various meetings, these groups progressively identify, select, analyse and solve the problems. Later they offer their proposed solutions to management for consideration, approval and implementation.

Additionally a senior officer from same workshop is nominated as facilitator who guides the activities of the group.

A Management Committee at senior level is also formed, which overview the progress of Quality Circles.

Training of members, leaders and facilitators is very important for the success of programme.

Rules for Quality Circles:(a) Each member can contribute an idea on his turn in rotation.

(b) Each member offers only one idea per turn regardless of how many he or she has in mind.

(c) Not everyone has an idea during each rotation, when this occurs just say “Pass”.

(d) No criticism or comments should be passed on the ideas being contributed by the member whatever old it may look to be, welcome their ideas.

(e) During brain-storming, no evaluation of suggested idea should occur. This applies equally to leader, phrases such as “We have tried it before”, “Impractical”, “Well” “May be it would work”. “Doubtful”, “Very good” etc. should not be uttered.

(f) Members can vote by raising their hands.

(g) Only supporting votes are taken. Votes against the ideas are not allowed.

(h) The time allotted for brain-storming session should be variable. The length of time that can be spent profitably will vary widely with nature of problem and the group itself. As a general practice, one hour is probably the minimum.

(i) While members give their ideas, they are recorded by the Recorder on a large sheet.

(j) It is often helpful to set a goal originally, i.e. Let us start for 30 ideas.

(k) When all members say “pass” then the first phase of brain-storming session is over. This means all ideas have been exhausted.

(l) Now all the ideas recorded on the sheet are displayed.

(m) These massive number of ideas are then narrowed down by the process of voting. The voting technique works because the members are experts in their areas. Members vote on each idea. The leader records each vote next to the idea.

(n) Members can vote for as many ideas as they feel have value. Only supporting votes are taken.

(o) Leader draws a circle around those ideas that receive the most votes. The members thus find that many of the top ideas will be so identified.

(p) Now the members can focus on a few important ideas instead of being somewhat confused by a large number of them. These few important ideas are voted on to give ranking to the circle ideas. Leader writes the ranking number beside each idea that has been circled.

(q) A member can ask for voting on any idea and argue for or against it. Others can join, if they wish. Only when the discussion has finished then the voting take place.

Idea ranked in the session can then be taken up for analysis or solution later on.

Duties of Circle Leader:For the success of Quality Circles, circle leader must have following duties:(i) He must assume the responsibility of guiding the members.

(ii) He must make his members sure about what is going on.

(iii) He must channelise the discussions.

(iv) Every member is allowed equal opportunity.

(v) Specific task be assigned to each member.

(vi) He must work in coordination with facilitator.

Steps for Setting up Quality Circles:For starting Quality Circles in an organisation, following steps should be taken:(i) First of all Managers, Supervisors and Foremen must be made to understand the concepts and activities of Q.C.

(ii) Management’s total support and commitment should be made known to everyone in the organisation.

(iii) Steering committee is formed with the top management personnel to give direction to Quality Circle activities.

(iv) A facilitator (or sometimes known as promoter) is selected from the senior management level, who will serve as coordinator and advisor to the circle.

(v) Supervisor and foreman are then trained to act as Q.C. leaders.

(vi) Members of each circle must be selected from the persons who are doing similar type of work or belong to the same department or section.

(vii) Membership to the circle is voluntary.

(viii) First few meetings of the circle are held with a view to train them.

(ix) To start with, only one to two circles should be formed in an organisation, and then increase the number gradually as more and more experience is gained.

(x) Meetings must be held regularly, may be once in a week initially and once in a month on completion of basic training of members.

(xi) Everyone’s suggestion or problem matching with the circle’s objectives is discussed.

(xii) Total participation of team members must be encouraged.

(xiii) Recommendations of the circle must be considered and decisions should be taken without delay.

Benefits of Quality Circles (Q.C.):1. Through the forum of Q.C. the chronic problems-of organisations which really create hurdles in work get resolved by the grass root employees of organisation, whose knowledge and experience otherwise is not fully utilized.

2. With such a capable work force, any organisation can easily undertake more difficult and challenging assignments for its growth and profit.

3. As the employees gain experience they take more challenging projects, in due course they undertake projects on cost reduction, material handling, quality improvement, preventing wastage, improving delivery schedule, improving customer service, improving inspection and test methods, preventing accidents improving design and process etc.

4. Cost reduction.

5. Increased productivity.

6. Improved quality.

7. Better communication.

8. Better house-keeping.

9. Increased team work.

10. Smooth working.

11. Better mutual trust.

12. Greater sense of belongingness.

13. Increased safety.

14. Better human relations.

Launching of Quality Circle Programme:The typical steps for launching programme are as under:(i) Orientation Programme for Senior Management Personnel.

(ii) Orientation Programme for Managers and Executives.

(iii) Orientation Programme for Selected Supervisors.

(iv) Orientation Programme for Workers (selected area).

(v) Formation of Circles (Minimum 2 and Maximum 4).

(vi) Training of Facilitators.

(vii) Training of Leaders.

(viii) Q.C. meetings for projects.

Employee Grievance: Concept and Causes

Employees are human beings and they have certain expectation, assumptions, norms, values and represent their culture. If the management or organization doesn’t respect their human aspects they become dissatisfied and it may turn into grievance of employees. And type of inhuman or injustice behavior can cause grievance of the employees. Apart from this, , lack of appropriate motivation, unnecessary or unscientific cannot system and ineffective leadership can also be the reason for grievance.

Employees may be grievant due to the existing policy, rule, work procedure or dissatisfaction due to the certain behavior. If the level of dissatisfaction goes on increasing then they put the written complaint about it to the management which is known as grievance. Grievances are concerns, problems or complaints that employees raise to their employers. The Employment Relations Acts gives all employees the rights to pursue a personal grievance if they have genuine complaints.

Employee grievance has negative effect in the organization. If it is not solved in time, employees may participate in the unfavorable activities like protesting, strike and lockout. This will reduce the productivity of organization and the dispute or conflict between the management and employee may arise. Capable, experienced and genuine employees may leave the organization. Production cost may be genuine employees may leave the organization. Production cost may be increased and the quality of products and services may deteriorate.

Causes of Employee Grievance

Employee’s grievance not only reduces the productivity of employees and organization, it may put the existence of the organization in a danger situation. Therefore, the grievance has to be solved as quickly as possible. For this, the reason has to be identified. The reason for grievance may vary according to the situation. Some of the important reasons are as under:-

1. Unfair Management

Employees want to be treated equally as other employees. But if management treats differently to the identically performing employees then the grievance arises. 

2. Poor Communication

Open and two way communication makes a healthy relationship and motivates the employees. Policy, directives, information and other notices have to be received by each employee in a similar way according to their job responsibility. One way and controlled communication makes them feel inferior and this will create misunderstanding among the employees and the management. This misunderstanding will slowly turns into the grievance. Thus, poor, controlled and one way communication is also a reason for employee’s grievance.

3. Different interpretation

Different in the understanding and the interpretation between the employees and the management also causes for grievance. If employees understand the policy, rules and terms and conditions, directions and guidelines determined by the management differently then they become negative towards the management and whole organization. Organization with ineffective communication has high chance for grievance. 

4. Personality traits

Some employees have habit of being grievant even in minor and small cases. They needle or point out other employees even in their minor mistakes. This will create grievance to the employee himself/herself and other employees as well. Therefore, a personality trait is one of the reasons for the grievance.

5. Culture of Organization

In some cases, the wrong culture of organization creates grievance in the employees. Bad culture adversely affects the organizational environment and it dissatisfies the employees. This dissatisfaction grows on increasing into the grievance. 

6. Weak leadership

Leader must be present as a guardian of all employees. If the leader is weak, then employee’s enthusiasm may go down and employees do not follow and ignore the leaders. Serious in-disciplinary activities may be carried out in the organization. This will increase the employee grievance. 

7. Personality clash

Sometimes, some employees may have personality clash with the colleagues, management and other people’s thought, concept and work style. They may take it as a challenge when their idea is not accepted and a feeling of revenge may take place. Feeling of ego may create anger, miserable or dishearten to an employee that will create grievance among the employees

Grievance: Handling, and Redressal Settlement Machinery

A grievance is any dissatisfaction or feeling of injustice having connection with one’s employment situation which is brought to the attention of management. Speaking broadly, a grievance is any dissatisfaction that adversely affects organizational relations and productivity. To understand what a grievance is, it is necessary to distinguish between dissatisfaction, complaint, and grievance.

1. Dissatisfaction is anything that disturbs an employee, whether or not the unrest is expressed in words.

2. Complaint is a spoken or written dissatisfaction brought to the attention of the supervisor or the shop steward.

3. Grievance is a complaint that has been formally presented to a management representative or to a union official.

According to Michael Jucious, ‘grievance is any discontent or dissatisfaction whether expressed or not, whether valid or not, arising out of anything connected with the company which an employee thinks, believes or even feels to be unfair, unjust or inequitable’.

In short, grievance is a state of dissatisfaction, expressed or unexpressed, written or unwritten, justified or unjustified, having connection with employment situation.

FEATURES OF GRIEVANCE

1. A grievance refers to any form of discontent or dissatisfaction with any aspect of the organization.

2. The dissatisfaction must arise out of employment and not due to personal or family problems.

3. The discontent can arise out of real or imaginary reasons. When employees feel that injustice has been done to them, they have a grievance. The reason for such a feeling may be valid or invalid, legitimate or irrational, justifiable or ridiculous.

4. The discontent may be voiced or unvoiced, but it must find expression in some form. However, discontent per se is not a grievance. Initially, the employee may complain orally or in writing. If this is not looked into promptly, the employee feels a sense of lack of justice. Now, the discontent grows and takes the shape of a grievance.

5. Broadly speaking, thus, a grievance is traceable to be perceived as non-fulfillment of one’s expectations from the organization.

CAUSES OF GRIEVANCES

1. Economic

Employees may demand for individual wage adjustments. They may feel that they are paid less when compared to others. For example, late bonus, payments, adjustments to overtime pay, perceived inequalities in treatment, claims for equal pay, and appeals against performance- related pay awards.

2. Work environment

It may be undesirable or unsatisfactory conditions of work. For example, light, space, heat, or poor physical conditions of workplace, defective tools and equipment, poor quality of material, unfair rules, and lack of recognition.

3. Supervision

It may be objections to the general methods of supervision related to the attitudes of the supervisor towards the employee such as perceived notions of bias, favouritism, nepotism, caste affiliations and regional feelings.

4. Organizational change

Any change in the organizational policies can result in grievances. For example, the implementation of revised company policies or new working practices.

5. Employee relations

Employees are unable to adjust with their colleagues, suffer from feelings of neglect and victimization and become an object of ridicule and humiliation, or other inter- employee disputes.

6. Miscellaneous

These may be issues relating to certain violations in respect of promotions, safety methods, transfer, disciplinary rules, fines, granting leaves, medical facilities, etc.

REDRESSAL SETTLEMENT MACHINERY

The three methods for settlement of industrial disputes are as follows:

1. Conciliation2. Arbitration3. Adjudication.

Failure of the employees and the employers to sort out their differences bilaterally leads to the emergence of industrial disputes. The Industrial Disputes Act, 1947 provides legalistic machinery for settlement of such disputes by involving the interference of a third party.

1. Conciliation

In simple sense, conciliation means reconciliation of differences between persons. Conciliation refers to the process by which representatives of workers and employers are brought together before a third party with a view to persuading them to arrive at an agreement by mutual discussion between them. The alternative name which is used for conciliation is mediation. The third party may be one individual or a group of people.

Board of Conciliation

In case the conciliation officer fails to resolve the dispute between the disputants, under Section 5 of the Industrial Disputes Act, 1947, the appropriate government can appoint a Board of Conciliation. Thus, the Board of Conciliation is not a permanent institution like conciliation officer. It is an adhoc body consisting of a chairman and two or four other members nominated in equal numbers by the parties to the dispute.

The Board enjoys the powers of civil court. The Board admits disputes only referred to it by the government. It follows the same conciliation proceedings as is followed by the

conciliation officer. The Board is expected to give its judgment within two months of the date on which the dispute was referred to it.

In India, appointment of the Board of Conciliation is rare for the settlement of disputes. In practice, settling disputes through a conciliation officer is more common and flexible.

2. Arbitration

Arbitration is a process in which the conflicting parties agree to refer their dispute to a neutral third party known as ‘Arbitrator’. Arbitration differs from conciliation in the sense that in arbitration the arbitrator gives his judgment on a dispute while in conciliation, the conciliator disputing parties to reach at a decision.

The arbitrator does not enjoy any judicial powers. The arbitrator listens to the view points of the conflicting parties and then gives his decision which is binding on all the parties. The judgment on the dispute is sent to the government. The government publishes the judgment within 30 days of its submission and the same becomes enforceable after 30 days of its publication. In India, there are two types of arbitration: Voluntary and Compulsory.

Voluntary Arbitration

In voluntary arbitration both the conflicting parties appoint a neutral third party as arbitrator. The arbitrator acts only when the dispute is referred to him/her. With a view to promote voluntary arbitration, the Government of India has constituted a tripartite National Arbitration Promotion Board in July 1987, consisting of representatives of employees (trade employers and the Government. However, the voluntary arbitration could not be successful because the judgments given by it are not binding on the disputants. Yes, moral binding is exception to it.

Compulsory Arbitration

In compulsory arbitration, the government can force the disputing parties to go for compulsory arbitration. In other form, both the disputing parties can request the government to refer their dispute for arbitration. The judgment given by the arbitrator is binding on the parties of dispute.

3. Adjudication

The ultimate legal remedy for the settlement of an unresolved dispute is its reference to adjudication by the government. The government can refer the dispute to adjudication with or without the consent of the disputing parties. When the dispute is referred to adjudication with the consent of the disputing parties, it is called ‘voluntary adjudication.’ When the government herself refers the dispute to adjudication without consulting the concerned parties, it is known as ‘compulsory adjudication.

Adjudication of industrial disputes

1. Labour Court2. Industrial Tribunal3. National Tribunal

MISCONDUCT

Any act or omission on the part of an employee which is a breach of any duty, obligation or

assignment arising under or flowing from any law or contract of employment or service rules or

standing orders, settlements or awards or improper conduct or wrongful behavior is a misconduct.

TYPE OF MISCONDUCTS

Minor Misconducts

The following acts or omission on the part of an employee shall amount to minor misconduct:

1. Late coming

2. Absence from duty without leaves for a period of less than six days

3. Loitering, gossiping in department during working hours

4. Failure to ware tight clothes/specified uniform.

5. Negligence of duties or neglect of work.

Major Misconducts

The following acts or omission on the part of an employee shall amount to major misconduct:

1. Willful insubordination or disobedience of any lawful and reasonable order of a superior.

2. Going on legal strike or abetting, inciting, instigation.

3. Willful slowing down in performance in work or instigation there of.

4. Theft, fraud or dishonesty in connection with the employer’s business or property.

5. Taking or giving bribes or any illegal gratification.

6. Habitual absenteeism without leave for more than 10 consecutive days or over staying the

sanctioned leave without sufficient grounds.

7. Habitual breach of any standing order or any law applicable to establishment.

8. Collection without the permission of the manager or any money within the premises of

establishment.

9. Engaging in trade within the premises of establishment.

10. Drunkenness, Riotous, Disorderly or indecent behavior on the premises of the establishment.

11. Commission of any acts subversive of discipline or rude behavior on the premises of the

establishment.

12. Habitual neglect of work or habitual negligence.

13. Canvassing for union membership or collection of union funds within the premises of the

establishment.

14. Willful damage to work in process or any property of the establishment.

15. Holding meetings inside the premises of establishment without the permission of the

manager.

16. Disclosing to any unauthorized person any information in regard to the processes of the

establishment.

17. Gambling within the premises of establishment.

18. Smoking or spitting on the premises of the establishment, where it is prohibited.

19. Failure to observe safety instructions notified by the employer or interference with the safety

devices.

20. Distributing or exhibiting within the premises of establishment and bills, pamphlets and

posters.

21. Refusal to accept a charge sheet order or other communication served in accordance with

the standing orders.

22. Unauthorized possession of lethal weapon in the establishment.

PENALTIES FOR MINOR MISCONDUCT

Warning, fine, passing adverse entry in service records, recovery of loss of goods for which the

concerned workman is accountable, recovery from wages of the whole or part of any loss caused

by the workman through negligence.

PENALTIES FOR MAJOR MISCONDUCTS

The following penalties may be imposed for good and sufficient reasons if an employee found

guilty of major misconduct.

Warning or censure, withholding of increment, fine, stopping promotion, demotion, suspension,

discharge, dismissal, vacation of company quarter or any other punishment which the manager

may deem fit.

PROCEDURE FOR AWARDING PENALTIES FOR ACTS OF MINOR MISCONDUCT

Where allegations of misconduct against the workman are of minor nature, he is called upon the

position verbally or otherwise. The manager or his authorized representative after hearing the

concerned workman will decide if the workman deserves any punishment and if so pass orders

accordingly. It is not necessary to hold enquiry in such cases.

PROCEDURE AND CONDUCT OF ENQUIRY

1. The I.D Act or any other law does not prescribe any procedure to be followed by the

employer in domestic inquiry.

2. In the absence of any statutory provision, the domestic enquiry do need not confirm to all the

requirements of judicial proceedings, they however, must satisfy the essentials of principle of

natural justice.

3. The guiding principle therefore, is that domestic enquiry should be conducted without bias

and by giving the delinquent employee an opportunity for adequately presenting his case.

4. Apart for compliance with the rules and principles of natural justice, the domestic enquiry

must be held honestly.

COMPLIANCE WITH RULES

1. In holding enquiry standing order in industrial employment should be followed as the standing

orders have force of law and constitute statutory terms of employment.

2. In holding enquiry statutory rules framed for the purpose should also be followed.

3. The enquiry must be conducted by an authorized person.

SUSPENSION PENDING ENQUIRY

A workman who committed a major misconduct may be placed under suspension by the

manager. A workman under suspension shall not leave the town during the period of suspension

without prior permission of the manager. A workman who placed under suspension pending

enquiry shall be entitled during the period of such suspension to subsistence allowance in the

following manner:

(a) From the date of suspension till the date he replies to the charge sheet is received by the

manager (nil.)

(b) For the first 30 days from the date of receipt of reply of the charge sheet—50% of the normal

wages and dearness allowance.

(c) For the next 30 days--- @ 60% of the normal wages and dearness allowance

(d) From the 91st day onwards--- @ 75% of normal wages and dearness allowance.

The workman shall not be entitled to subsistence allowance in case he takes up employment

during the period of suspension.

CHARGE SHEET AND ENQUIRY

A) A workman against wage misconduct is alleged and is placed under suspension shall be

served with a charge sheet within a week from the date of suspension. The charge sheet

should be specific and give full details for the charges leveled against him. The date, time

and place of incident should be mentioned in the charge sheet. When the misconduct

depends on offending language, then actual words used should be specified in the charge

sheet. The workman shall be called upon to submit his explanation within 48 hours, which

may be extended for 6 days for sufficient reason on request in writing from the workman

concerned.

B) If the workman admits the charges against him, no enquiry need to be held and it shall be

open to the manager to award punishment as he deems proper without holding the enquiry.

C) If the workman does not submit his written explanation or explanation submitted by him are

not found to be satisfactory or if he denies the charges alleged against him, an enquiry shall

be held.

D) The workman concerned in enquiry shall sign at the end of each statement recorded in his

presence. Such workman may be assisted by another workman of his choice but he must be

working in the company.

E) The enquiry may be conducted either by the manager or any officer or person appointed by

him for the purpose.

F) The manager shall appoint an enquiry officer and management representative for the

purpose of conducting domestic enquiry.

G) Copy of the charge sheet along with all relevant documents should be handed over to the

enquiry officer.

NOTICE OF ENQUIRY

a) It is very necessary to convey to the charge sheeted workman the name of the officer before

whom he is to appear. The time, date and place of enquiry should also be communicated in

the notice of enquiry.

b) The management should give its evidence first to prove the charges alleged against the

workman.

c) The enquiry officer can ask the management to serve the notice of enquiry.

d) The enquiry officer should decide in the beginning as to which procedure for major

misconduct should be followed.

e) If the charges rest on documents alone, it is not necessary to adduce oral evidence.

EX-PARTE PROCEEDINGS

1. If the employee does not attend on the date of enquiry fixed and communicated then ex-parte

proceedings can be taken against him.

2. When the worker insists that he must be allowed to be represented by his council and on

refusal of the same he boycotts the enquiry then such enquiry could be held ex-parte.

3. When the worker knows the date of enquiry and does not co-operate with the enquiry officer

or does not attend the proceedings, he cannot complaint if the proceedings are ex-parte.

4. If the worker intentionally refuses to participate in the enquiry, enquiry can be held ex-parte.

5. If the worker withdraws from the enquiry, it does not mean that he admits the charges alleged

against him. The enquiry officer has to record evidence of the management in support of the

charges.

JUSTIFICATION OF NON-ATTENDANCE BY WORKERS

1. Absence on account of protest is not justified. Even if some facility is denied the worker is not

justified to withdraw from the enquiry.

2. If certain documents or copies are not supplied to the workman and he withdraw from the

enquiry, it is not justified and enquiry could proceed ex -parte.

3. When a request of worker for being represented by an outsider or an advocate is disallowed,

he cannot walk out and if he does so, ex-parte proceeding is valid.

4. If absence is on account of genuine illness and he has asked an adjournment on death

grounds, it must be granted.

5. If an employee is on sanctioned leave and seeks adjournment on that ground, it must be

granted.

6. If an employee is on hunger strike and it is not possible for him to defend himself,

adjournment must be granted.

7. Adjournment is sought on the plea that the workman fears physical assault, the adjournment

may not be granted.

8. Enquiry can be held on a holiday also and in the absence an application of adjournment, the

enquiry officer is competent to proceed ex-parte.

9. Enquiry can be held even at night in case the concerned works day and night.

Grant of adjournment s discretion of the enquiry officer, but as such a discretion must be

exercised in a judicial and reasonable manner. An employee cannot be compelled to attend

enquiry. If an employee does not attend an enquiry, then it can be held ex-parte but he cannot be

charged for disobedience of orders.

ROLE OF THE MANGEMENT REPRESENTATIVE

1. In departmental enquiries, the punishing authorities play a dual role. The said authority or its

nominee conducts the enquiry on behalf of the management and judges the action of the

delinquent employee.

2. The role of management representative is similar to the case of public prosecutor as he also

conducts and pleads the case of management.

3. The role of MR is to conduct the case fairly and with full sense of responsibility.

4. It is not the duty of the MR to suggest any falsehood or suppress any facts.

5. The MR is also not expected to produce evidence, which stands to demolish his own case.

6. The role of MR can only be discharged properly if he sis equipped with the full knowledge of

the case. The MR should also have the basic knowledge or procedure and process of

domestic enquiry as well as to carry out the cross-examination of the charge sheeted

employee as well of his defense witnesses.

PRODUCTION AND INSPECTON OF DOCUMENTS

When the charge sheeted employee thinks that certain document is likely to be useful for his

defense and is in the possession of the management when he can apply for its production.

1. When a document is used against an employee, it should be disclosed to him.

2. Records of preliminary investigation if relied upon the management should be disclosed to

the employee.

3. Documents having no evidentiary value need not be disclosed.

4. If no reliance is placed on a document during enquiry then it need not to be disclosed.

5. Documents necessary for cross-examination or defense should be made available if asked

for.

6. If no prejudice is caused to the delinquent employee by non-production of documents,

enquiry is not vitiated.

7. Inspection of documents can be given as an alternative to production of documents.

BIAS IN DEPARTMENTAL ENQUIRIES

A domestic enquiry must be held by an unbiased person. The bias in its proper significance is

departure from the standard of even-handed justice which the law requires from those who

occupy judicial office the doctrine of bias:

1. No man shall be judge in his own case.

2. Justice shall not only be done but manifestly and undoubtedly seem to be done.

APPRECIATION OF EVIDENCE

1. Even though the onus of proving the guilt rest on the management, the probability or

otherwise of the version of incident put forth by he workman has to be taken into

consideration in determining his guilt and it cannot be altogether ignored.

2. The E.O. while appreciating the evidence should take care that the charges against the

delinquent workman should no deemed to be proved merely on the facts that the worker

could not put up strong defense.

3. If the employee has not produced any defense during enquiry, it cannot give rise to any

presumption that whatever the employer witness states is correct. Disposition of the

witnesses has to be judged on their merits.

4. It is not necessary to prove motives behind the act of misconduct.

5. While appreciating the evidence the E.O. should be extra careful for the disposition of chance

witnesses.

6. The E.O. should not simply disbelief the witness or think unreliable, as the witnesses are a

close relation of either party. Similarly, merely that middle and senior level officer depose for

the management and the workers for the delinquent employee is no reason to disbelief them.

7. The E.O. while appreciating the evidence should be conscious of the fact that the credit of a

witness does not depend upon his status. Truthfulness is not the monopoly of persons who

are rich and who hold high status.

8. It is not necessary that there should always be one witness to prove any charge. The reason

is that the evidence weighed and not counted.

9. The E.O. should not consider the events subsequent to incidence for which an employee was

charge sheeted.

10. In domestic enquiry the Doctrine of Benefit of Doubt is not applicable. Therefore, an E.O. is

under obligation to arrive at conclusion of facts.

11. It is not the concern of the E.O. as to whether the act mentioned in the charge sheet has

been proved or not.

12. E.O. is not interested with the power of imposing the punishment. His duty ends with the

finding of facts.

13. While drafting enquiry report, specific findings should be given on each charge and in case of

each person.

14. The finding should be specific and E.O. should come to conclusive findings of guilt.

FINDINGS OF ENQUIRY

1. The whole object of holding a domestic enquiry against a delinquent workman is to enable

EO to decide upon the merits of charges leveled against the employee. It is therefore,

essential that the EO should submit the enquiry report indicating clearly his conclusion and

reasons in support thereof.

2. The EO should not hold anyone guilty of the charges on suspicion. Suspicion, however

reasonable, is not sufficient to punish the employee.

3. EO should not give the findings on assumption of facts and circumstances not supported by

evidence on record.

4. The findings of the enquiry should be based upon the enquiry records and the EO should not

impose his own knowledge of things while writing the report.

5. The EO is not justified in parting extraneous consideration while writing the enquiry report.

6. While writing the findings, EO cannot omit from considering any material on record. When EO

disbelieves the worker and his witnesses he should give sufficient reasons.

7. The EO should bear in mind that the interpretation of document is a question of law.

Admission of document thereof should be distinguished from the admission of the contents of

the document.

8. EO should not give findings outside the scope of the enquiry. The scope of the enquiry is

limited to the charges as mentioned in the charge sheet.

The Concept of Industrial Relations and Background

 The term ‘Industrial Relations’ comprises of two terms: ‘Industry’ and ‘Relations’. “Industry” refers to “any productive activity in which an individual (or a group of individuals) is (are) engaged”. By “relations” we mean “the relationships that exist within the industry between the employer and his workmen.”

Concept of Industrial Relations

The term industrial relations explain the relationship between employees and management which stem directly or indirectly from union-employer relationship.Industrial relations are the relationships between employees and employers within the organizational settings.

The field of industrial relations looks at the relationship between management and workers, particularly groups of workers represented by a union. Industrial relations are basically the interactions between employers, employees and the government, and the institutions and associations through which such interactions are mediated.

The term industrial relations have a broad as well as a narrow outlook. Originally, industrial relations were broadly defined to include the relationships and interactions between employers and employees. From this perspective, industrial relations cover all aspects of the employment relationship, including human resource management, employee relations, and union-management (or labor) relations.

Now its meaning has become more specific and restricted. Accordingly, industrial relations pertains to the study and practice of collective bargaining, trade unionism, and labor-management relations, while human resource management is a separate, largely distinct field that deals with nonunion employment relationships and the personnel practices and policies of employers.

The term industrial relations have a broad as well as a narrow outlook. Originally, industrial relations were broadly defined to include the relationships and interactions between employers and employees. From this perspective, industrial relations cover all aspects of the employment relationship, including human resource management, employee relations, and union-management (or labor) relations.

Now its meaning has become more specific and restricted. Accordingly, industrial relations pertains to the study and practice of collective bargaining, trade unionism, and labor-management relations, while human resource management is a separate, largely distinct field that deals with nonunion employment relationships and the personnel practices and policies of employers.

Industrial relations is used to denote the collective relationships between management and the workers. Traditionally, the term industrial relations is used to cover such aspects of industrial life as trade unionism, collective bargaining, workers’ participation in management, discipline and grievance handling, industrial disputes and interpretation of labor laws and rules and code of conduct

In the words of Lester,Industrial relations involve attempts at arriving at solutions between the conflicting objectives and values; between the profit motive and social gain; between discipline and freedom, between authority and industrial democracy; between bargaining and co-operation; and between conflicting interests of the individual, the group and the community”.

The National Commission on Labor (NCL)also emphasize on the same concept. According to NCL, industrial relations affect not merely the interests of the two participants- labor and management, but also the economic and social goals to which the State addresses itself. To regulate these relations in socially desirable channels is a function, which the State is in the best position to perform.

History

Industrial relations got its roots in the industrial revolution and the spread of capitalism which created the modern employment relationship by spawning free labour markets and large-scale industrial organizations with thousands of wage workers. Kaufman, the Global Evolution of Industrial Relations.

As both societies wrestled with these massive economic and social changes, labour problems arose. Low wages, long working hours, monotonous and dangerous work, and abusive supervisory practices led to high employee turnover, violent strikes, and the threat of social instability and due to confluence of these event and ideas associated with rise of democratic governments in the western world of the late nineteenth and twentieth centuries. It emerged from both negative and positive impulses

The negative aspect, industrial relations was a reaction against deplorable working condition and with unrepressed profit making and employee clout in the nine teeth century and twentieth century capitalism and this led to the deplorable situations a conflict between capital and labour and hardship for employee of that time

So we come to the conclusion that industrial relation was part of the reform wing. Industrial relations arose from the conviction that cordial relationship between workers and employer could be improvised through a combination of scientific discovery, education, legal reform.

Current situation

Therefore, the maintenance of a good human relationship is a must in today business environment, because in case of its absence the organizational structure may crumble. Employees constitute the most valuable assets of any organization.

Any neglect of the important factor is likely to result in increased cost of production in term of wage and salaries, benefits and services; working conditions, increased labour turn-over, absenteeism, indiscipline and cleavages, strikes and transfer on the ground of discontent and the like, besides deterioration in the quality of the goods produced and strained relations between labour and management.

The Germans practice co-determination which gives workers of the organization representation at the management of the companies these known as the law allows workers to elect representatives (usually trade union representatives) for the supervisory board of directors.

Evolution of industrial Relations in INDIA

IR is dynamic in nature. The nature of IR can be seen as an outcome of complex set of transactions among the major players such as the employers, the employees, the trade union, and the state in a given socio-economic context. In a sense, change in the nature of IR has become sine quo non with change in the socio-economic context of a country.

Keeping this fact in view, IR in India is presented under the following two sections:

1. IR during Pre- Independence2. IR during Post-Independence

1. IR During Pre-Independence

The structure of the colonial economy, the labour policies of colonial government, the ideological composition of the political leadership, the dynamics of political struggle for independence, all these shaped the colonial model of industrial relations in pre-independent India”. Then even union movement was an important part of the independence movement.

However, the colonial dynamics of the union movement along with the aggressiveness of alien capital, the ambivalence of the native capital and the experience of the outside political leadership frustrated the process of building up of industrial relations institutions.

Other factors like the ideology of Gandhian class harmony, late entry of leftists and the bourgeois character of congress also weakened the class approach to the Indian society and industrial conflict”.

Till the Second World War, the attitude of the colonial government toward industrial relations was a passive regulator only Because, it could provide, that too only after due pressure, the sum of protective and regulative legal framework for industrial relations Trade Union Act 1926 (TL A) Trade Disputes Act 1929 (TDA). It was the economic emergence of the Second World War that altered the colonial government’s attitude on industrial relations.

The state intervention began in the form of introduction of several war time measures, viz. the Defense of India Rules (Rule 81- A), National Service (Technical Personnel) Ordinance, and the

Essential Service (Maintenance) Ordinance As such in a marked contrast to its earlier stance, the colonial government imposed extensive and pervasive controls on industrial relations by the closing years of its era-. Statutory regulation of industrial relations was on plank of its labour policy. The joint consultative institutions were established primarily to arrive at uniform and agreeable labour policy.

The salient features of the colonial model of IR can be summarized as close association between political and trade union movement, dominance of ‘outsiders’ in the union movement, state intervention and federal and tripartite consultations.

The eve of Independence witnessed several instances that served as threshold plank for IR during post Independence era. The prominent instances to mention are passing of Indian Trade Unions (Amendment) Act, 1947, Industrial Employment (Standing Orders) Act 1946, Bombay Industrial Relations Act, 1946, and Industrial Disputes Act, 1947 and split in AITUC and formation of INTUC.

2. IR During Post-Independence:

Though Independent India got an opportunity to restructure the industrial relations system the colonial model of IR remained in practice for sometimes due to various reasons like the social, political and economic implications of partition, social tension, continuing industrial unrest, communist insurgency, conflict, and competition in the trade union movement. In the process of consultation and confrontation, gradually the structure of the industrial relations system (IRS) evolved.

State intervention in the IRS was a part of the interventionist approach to the management of industrial economy.

Several considerations like unequal distribution of power in the labour market, neutrality of the state, incompatibility of free collective bargaining institution with economic planning etc. provided moral justification for retaining state intervention in the IRS. State intervention in the IRS is logical also when the state holds large stakes in the industrial sector of the economy.

However state intervention does not mean suppression of trade unions and collective bargaining institution. In fact, state intervention and collective bargaining were considered as complementary to each other.

Gradually, various tripartite and bipartite institutions were introduced to supplement the state intervention in the IRS.

The tripartite process was considered as an important instrument of involving participation of pressure groups in the state managed system. Non formal ways were evolved to do what the formal system did not legistate, for one reason or other.

The political and economic forces in the mid 1960s aggravated industrial conflict and rendered non-formal system ineffective. In the process of reviewing the system, National Commission on Labour (NCL) was appointed in 1966.

Now the focus of restructuring shifted from political to intellectual. However, yet another opportunity was lost when there was an impasse on the NCL recommendations in 1972. The Janta Government in 1978 made, of course, a half-hearted attempt to reform industrial relations. Unfortunately, the attempt met with strong opposition from all unions. The BMS, for example, termed it as “a piece of anti-labour, authoritarian and dangerous legislation””.

Several committees were appointed to suggest measures for reforming die IRS. In the process, tripartism was revived in 1980s. Government passed the Trade unions and the Industrial Disputes (Amendment) Bill, 1988.

But, it also proved yet another legislative disaster. The bill was severely criticised by the left parties. It was even viewed by some as a deliberate attempt to destroy “autonomous; organised or militant trade union movement”

Management, Unions and The State

 Industry management is one of two key players in the realm of industrial relations. Industrial relations describes the relationship between management (often top-level management) and employee organizations (like unions).

Top-level management

Top-level management must communicate and negotiate with employee organizations to avoid strikes, law-suits and protests. This level of management interacts with employee organizations on a large-scale, as opposed to lower tiers of management which mostly rely on human resources to conduct employee interactions.

Low-level management

Low-level (or local) management interacts with employees on an individual basis (often through a human resources department). All levels of management are involved in industrial relations, but low-level management has little or no say in big-picture decisions (employee compensation and benefit alterations).

UNIONS

A new report from the Economic Policy Institute takes a deep look at the role and importance of unions as the key avenue for working people to come together and negotiate for an expansion of their rights and freedoms. Here are nine things you need to know about the state of the labor movement in 2017.

1. Unions amplify the voices of working people on the job: Organized labor is one of the largest institutions in America: One in nine U.S. workers—16 million of us—are represented by unions. Joining a union means that you and your co-workers have a say in the workplace. When working people come together to negotiate, it means they are more likely to have their voice heard, which means they are more likely to win wage increases, better access to health care and workplace safety, more reasonable and predictable work schedules, and more satisfactory avenues for settling workplace disputes.

2. Working people in unions are as diverse as Americans as a whole: Union members are much more diverse than we are depicted in the media. Nearly two-thirds of union workers from 18-64 are women and/or people of color. Almost half of union members are women. More than one-third of union members are people of color. Black workers are more likely to be union members than white or Hispanic workers.

3. Working people in unions come from a variety of sectors: Nearly 40% of working people in unions are in education and health services. Nearly 14% are in public administration. More than 12% are in transportation and utilities. Just over 9% of union members are in manufacturing.

4. Unions are thriving in diverse industries: More and more working people are joining unions in fields that are experiencing a lot of change. Some key groups of working people that are growing in their union membership rates include: television writers, graduate student workers, professional and technical employees, UPS employees, Maine lobster fishers, cafeteria and contract workers, and working people at digital companies.

5. Democracy is strengthened when more working people are union members: Business owners and CEOs organize to represent their interests before government and in society. Unions enable working people to do the same thing with fewer resources. Unions fight not only for their own members, but for laws that benefit all working people, from things as diverse as Social Security and child labor laws to voting rights and the minimum wage.

6. Unions reduce inequality and help middle- and low-wage working people obtain a fair share of economic growth: When more working people are union members, the economy does better. Unions have a strong positive effect not only on the wages of their members, but also on the wages of nonunion members. Unions help boost the wages of middle- and low-wage occupations more than high-income ones, thus reducing inequality, which in turn helps boost the economy.

7. More specifically, unions help reduce wage gaps and increase wages for women and people of color: Through a variety of methods, unions make it easier for women and people of color to obtain equal pay for equal work. Things like establishing pay transparency, correcting salary discrepancies, making raise and promotion processes clearer, and helping pursue justice for workers who have been discriminated against are major tools in the pursuit of worker equality.

8. Union workplaces are safer and all workplaces are safer because of unions : One of the key reasons that working people organize into unions is to improve workplace safety. In a country where annually nearly 60,000 people die on the job or because of workplace-related diseases, and 7 million others are injured or get sick on the job, worker safety is a major concern. Unions have a long history of fighting for safer workplaces. When a workplace is unionized, working people are better able to negotiate for even safer workplaces.

9. Corporate lobbyists and their lawmaker friends are dismantling the rights of working people: From dishonest, but well-funded, anti-union campaigns to pushing for anti-worker federal and state laws, the richest corporations, their lobbyists, and the lawmakers that ally with them are fighting hard to take away your rights as a worker. For example, between 2011 and

2015, 15 states enacted laws that severely limited or dismantled collective bargaining rights for public-sector unions. Many states have cut public-sector wages and benefits. States and localities are frequently abandoning the promises they made to retired workers and abandoning pension obligations. These and a variety of other tactics are widespread and growing. The best way to fight back against these trends is through stronger unions.

STATE AND THE INDUSTRIAL RELATION

State intervention from the early period in 19th Century to the present. The colonial state was intervention and the state interventionists model of industrial relations system was later strengtened. State interests of both labour and capital also.

The state has intervened in the system principally because the class forces were weak and it served its political interests. It of course sought to promote labour welfare and also to protect the interests of capital. It used the class forces and the state machinery to advance its interests and favoured either class mainly to achievce its ends.

This has remained the dominant theme in the IRS for long time and remains unchanged at least in formal terms even after the economic system underwent radical changes since 1991.

It is the contention of this paper that state intervention in industrial relations has been the continuing thrust of the labour policy of the government. It is under threat now. The state will be there to either regulate of deregulate. The state will be difficult to be shaken off from the realm of industrial relations and labour market.

Role of Trade union in Industrial Relations

 Trade unions, also known as labor unions in the United States, are organizations of workers in a common trade who have organized into groups dedicated to improving the workers’ work life. A trade union generally negotiates with employers on behalf of its members, advocating for improvements such as better working conditions, compensation and job security. These unions play an important role in industrial relations — the relationship between employees and employers.

History

The origins of trade unions can be found in guilds and fraternal organizations composed of people practicing a common trade, which date back hundreds of years. However, the modern conception of trade unions, in which unions represent a specific set of workers in negotiations with employers, dates back only to the 18th century. Membership in unions only became widespread in the United States and Europe in the 19th century.

Trade unions are associations of workers formed to represent their interests and improve their pay and working conditions.

Types

There are four main types of trade unions.

Craft unions

These represent workers with particular skills e.g. plumbers and weavers. These workers may be employed in a number of industries.

General unions

These unions include workers with a range of skills and from a range of industries.

Industrial unions

These seek to represent all the workers in a particular industry, for instance, those in the rail industry.

White collar unions

These unions represent particular professions, including pilots and teachers. Unions in a country, often belong to a national union organization. For example, in India, a number of unions belong to the All India Trade Union Congress (AITUC).

This is the oldest and one of the largest trade union federations in the country. A number of them also belong to international trade union organizations such as the International Confederation of Free Trade Unions, which has more than 230 affiliated organizations in 150 countries.

Role of Trade Unions:

Unions carry out a number of functions. They negotiate on behalf of their members on pay scales, working hours and working conditions. These areas can include basic pay, overtime payments, holidays, health safety, promotion prospects, maternity and paternity rights and job security.

Depending on the circumstances, unions may try to protect or improve workers’ rights. They also provide information on a range of issues for their members, for instance on pensions. They help with education and training schemes and may also participate in measures designed to increase demand for the product produced and hence for labour.

Some also provide a range of benefits to their members including strike pay, sickness pay and unemployment pay. In addition many get involved in pressurizing their governments to adopt a legislation, which will benefit their members or workers in general, such as fixing a national minimum wage.

Industrial Disputes: Definition, Forms and Types!

Concept of industrial disputes:

In common parlance, dispute means difference or disagreement of strife over some issues be-

tween the parties. As regards industrial dispute, since its settlement proceeds as per the legal

provisions contained in the ‘Industrial Disputes’ Act, 1947, hence it seems pertinent to study the

concept of industrial disputes from a legalistic angle.

According to Section 2 (k) of the Industrial Disputes Act, 1947, the term ‘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 and conditions of employment of any person”.

The above definition is too broad and includes differences even between groups of workmen and

employers engaged in an industry. However, in practice, industrial disputes mainly relate to the

difference between the workmen and the employers. 

Dispute differs from discipline and grievance. While discipline and grievance focus on

individuals, dispute focuses on collectivity of individuals. In other words, the test of industrial

dispute is that the interest of all or majority of workmen is involved in it.

The following principles judge the nature of an industrial dispute:

1. The dispute must affect a large number of workmen who have a community of interest and the

rights of these workmen must be affected as a class.

2. The dispute must be taken up either by the industry union or by a substantial number of

workmen.

3. The grievance turns from individual complaint into a general complaint.

4. There must be some nexus between the union and the dispute.

5. According to Section 2A of the Industrial Disputes Act, 1947, a workman has a right to raise

an industrial dispute with regard to termination, discharge, dismissal, or retrenchment of his or

her service, even though no other workman or any trade union of workman or any trade union of

workmen raises it or is a party to the dispute.

Forms of Industrial Disputes:

The industrial disputes are manifested in the following forms:

Strikes: Strike is the most important form of industrial disputes. A strike is a spontaneous and

concerted withdrawal of labour from production. The Industrial Disputes Act, 1947 defines a

strike as “suspension or cessation of work by a group of persons employed in any industry,

acting in combination or a concerted refusal or a refusal under a common understanding of any

number of persons who are or have been so employed to continue to work or accept

employment”.

According to Patterson “Strikes constitute militant and organised protest against existing

industrial relations. They are symptoms of industrial unrest in the same way that boils symptoms

of disordered system”.

Depending on the purpose, Mamoria et. al. have classified strikes into two types: primary strikes

and secondary strikes.

(i) Primary Strikes:

These strikes are generally aimed against the employers with whom the dispute exists. They may

include the form of a stay-away strike, stay-in, sit-down, pen-down or tools- down, go-slow and

work-to-rule, token or protest strike, cat-call strike, picketing or boycott.

(ii) Secondary Strikes:

These strikes are also called the ‘sympathy strikes’. In this form of strike, the pressure is applied

not against the employer with whom the workmen have a dispute, but against the third person

who has good trade relations with the employer.

However, these relations are severed and the employer incurs losses. This form of strike is

popular in the USA but not in India. The reason being, in India, the third person is not believed

to have any locus standi so far the dispute between workers and employer is concerned.

General and political strikes and bandhs come under the category of other strikes:

Lock-Outs:

Lock-out is the counter-part of strikes. While a ‘strike’ is an organised or concerted withdrawal

of the supply of labour, ‘lock-out’ is withholding demand for it. Lock-out is the weapon

available to the employer to shut-down the place of work till the workers agree to resume work

on the conditions laid down by the employer. The Industrial Disputes Act, 1947 defined lock-out

as “the temporary shutting down or closing of a place of business by the employer”.

Lock-out is common in educational institutions also like a University. If the University authority

finds it impossible to resolve the dispute raised by the students, it decides to close-down (or say,

lockout) the University till the students agree to resume to their studies on the conditions laid

down by the University authority. Recall, your own University might also have declared closure

sometimes for indefinite period on the eve of some unrest / dispute erupted in the campus.

Gherao:

Gherao means to surround. It is a physical blockade of managers by encirclement aimed at

preventing the egress and ingress from and to a particular office or place. This can happen

outside the organisational premises too. The managers / persons who are gheraoed are not

allowed to move for a long time.

Sometimes, the blockade or confinements are cruel and inhuman like confinement in a small

place without light or fans and for long periods without food and water. The persons confined are

humiliated with abuses and are not allowed even to answer “calls of nature”.

The object of gherao is to compel the gheraoed persons to accept the workers’ demands without

recourse to the machinery provided by law. The National Commission on Labour has refused to

accept ‘gherao’ as a form of industrial protest on the ground that it tends to inflict physical

duress (as against economic press) on the persons gheraoed and endangers not only industrial

harmony but also creates problems of law and order.

Workmen found guilty of wrongfully restraining any person or wrongfully confining him during

a gherao are guilty under Section 339 or 340 of the Indian Panel Code of having committed a

cognizable offence for which they would be liable to be arrested without warrant and punishable

with simple imprisonment for a term which may be extended to one month or with a fine up to

Rs. 500, or with both.

Gherao is a common feature even in educational institutions. You might have seen in your own

University officers sometimes gheraoed by the employees / students to compel the officers to

submit to their demands. Here is one such real case of gherao.

Gherao of the vice chancellor:

The non-teaching employees of a Central University in the North-East India had some demands

with the University authority for quite some time. Non-confirmation of some of the employees

even after completion of six years service was one of the main demands. That the Vice Chan-

cellor was to resign on 31st October was known to all in the University.

As the last pressure tactic, the employees started Vice Chancellor’s gherao on 31st October at

11.00 a.m. They shut down the entrance gate of the administrative building at 3.00 p.m. to block

the egress and ingress from and to the office in the administrative building.

The Vice Chancellor was kept confined in his office chamber. He was humiliated throughout the

gherao by using abuses, disconnecting his telephone line, not allowing him food and water and

even not allowing him to answer “calls of nature”. This scene lasted for 18 hours and was over

only by 5 a.m. next day when some 50 C.R.P.F jawans with local police came from the city

which is about 20 kms. away from the University Campus.

They broke the entrance gate of administrative building, rescued the Vice Chancellor and

arrested 117 employees confining the Vice Chancellor under Section 340 of the Indian Penal

Code and kept them behind bars for a day.

On 1st November, the Vice Chancellor handed over the charge of his office to the senior most

Professor of the University at his residence in the city. In the wee hours on 2nd November, he

left for where he came from. The aftermath of gherao created a tuneful atmosphere in the

University Campus for about two weeks.

Picketing and Boycott:

Picketing is a method designed to request workers to withdraw cooperation to the employer. In

picketing, workers through display signs, banners and play-cards drew the attention of the public

that there is a dispute between workers and employer.

Workers prevent their colleagues from entering the place of work and pursuade them to join the

strike. For this, some of the union workers are posted at the factory gate to pursuade others not to

enter the premises but to join the strike.

Boycott, on the other hand, aims at disrupting the normal functioning of the organisation. The

striking workers appeal to others for voluntary withdrawal of co-operation with the employer. In-

stances of boycotting classes and examinations are seen in the Universities also.

Types of Industrial Disputes:

The ILO’ has classified the industrial disputes into two main types.

They are:

1. Interest Disputes

2. Grievance or Right Disputes.

They are discussed one by one:

1. Interest Disputes:

These disputes are also called ‘economic disputes’. Such types of disputes arise out of terms and

conditions of employment either out of the claims made by the employees or offers given by the

employers. Such demands or offers are generally made with a view to arrive at a collective

agreement. Examples of interest disputes are lay-offs, claims for wages and bonus, job security,

fringe benefits, etc.

2. Grievance or Right Disputes:

As the name itself suggests, grievance or right disputes arise out of application or interpretation

of existing agreements or contracts between the employees and the management. They relate

either to individual worker or a group of workers in the same group.

That’s way in some countries; such disputes are also called ‘individual disputes’. Payment of

wages and other fringe benefits, working time, over-time, seniority, promotion, demotion,

dismissal, discipline, transfer, etc. are the examples of grievance or right disputes.

If these grievances are not settled as per the procedure laid down for this purpose, these then

result in embitterment of the working relationship and a climate for industrial strife and unrest.

Such grievances are often settled through laid down standard procedures like the provisions of

the collective agreement, employment contract, works rule or law, or customs /usage in this

regard. Besides, Labour Courts or Tribunals also adjudicate over grievance or interest disputes.

Generally, industrial disputes are considered as ‘dysfunctional’ and ‘unhealthy’. These are mani-

fested in the forms of strikes and lock-outs, loss of production and property, sufferings to

workers and consumers and so on. But, sometimes industrial disputes are beneficial as well.

It is the dispute mainly which opens up the minds of employers who then provide better working

conditions and emoluments to the workers. At times, disputes bring out the causes to the

knowledge of the public where their opinion helps resolve them.

Causes of Industrial Disputes:

We can classify the causes of industrial disputes into two broad groups:

(i) Economic causes, and

(ii) Non-economic causes.

Economic causes include:

(i) Wages,

(ii) Bonus,

(iii) Dearness allowance,

(iv) Conditions of work and employment,

(v) Working hours,

(vi) Leave and holidays with pay, and

(vii) Unjust dismissals or retrenchments.

Non-economic causes include:

(i) Recognition of trade unions,

(ii) Victimisation of workers,

(iii) Ill-treatment by supervisory staff,

(iv) Sympathetic strikes,

(v) Political causes, etc.

The percentage distribution of disputes by causes from 1973 onwards has been shown in

Exhibit 2 reveals the following causes of industrial disputes:

1. Wages and Allowances:

Since the cost of living has generally showed an increasing trend, the workers have been fighting

for higher wages to meet the rising cost of living and to increase their standard of living. 34.1%

of the industrial disputes in 1973 were due to demand for higher wages and allowances. This

percentage was 36.1% in 1974. During 1985, 22.5% of the disputes were due to wages and

allowances. Wages and allowances accounted for 25.7% of disputes in 1986, 26.6% in 1992,

25.0% in 1996 and 20.2% in 2000.

2. Personnel and Retrenchment:

Personnel and retrenchment causes have also been important. During 1973, 24.3% of the

industrial disputes were because of dismissals, retrenchment, etc. as compared to 29.3% in 1961.

In 1979, personnel and retrenchment topped the list of causes of industrial disputes with 29.9%.

The number of disputes because of personnel and retrenchment was 32.0% in 1971, 23.1% in

1985 and 19.8% in 1996. In 2000, about 12.1% of the disputes occurred due to dismissals,

layoffs, retrenchments, etc.

3. Bonus:

Bonus has been an important factor in the industrial disputes, 10.3% of the industrial disputes in

1973 were because of bonus as compared to 6.9% in 1961. 13.8% and 15.2% of the disputes

were due to bonus during 1976 and 1977 respectively. It is worth noting that during 1982 only

4.7% of the disputes were due to bonus as compared to 7.3% in 1985. This percentage was 4.2 in

1992, 3.6 in 1996 and 8.5 in 2000.

4. Indiscipline and Violence:

The number of disputes because of indiscipline and violence among the workers has been

significant. During 1987, 15.7% of the disputes were because of indiscipline and violence as

compared to only 5.7% in 1973. During 1985, 16.1% of industrial disputes were caused by

indiscipline and violence and during 1996, about 21.6% of the industrial disputes arose due to

indiscipline and violence in industrial undertaking. This shows that indiscipline and violence

have continued to be a serious problem in industry during the past two decades.

5. Leave and Hours of Work:

Leave and hours of work have not been so important causes of industrial disputes. During 1973,

1.5% of the causes were because of leave and hours of work. Their percentage share in the

industrial disputes was 2.2% in 1977, 1.8% in 1985, 2.2% in 1996 and 0.9% in 2000.

6. Miscellaneous Causes:

Miscellaneous causes include modernisation of plant and introduction of computers and

automatic machinery recognition of union political factors, etc. These factors have caused a

significant number of industrial disputes in the country, 24.1% of the industrial disputes in 1973

were due to miscellaneous causes. They accounted for 19.5% of the industrial disputes in 1977,

29.2% in 1985, 27.8% in 1996 and 33.2% in 2000.

Miscellaneous causes of industrial disputes are as follows:

(a) Workers’ resistance to rationalisation, introduction of new machinery and change of place of

factory.

(b) Non-recognition of trade union.

(c) Rumours spread out by undesirable elements.

(d) Working conditions and working methods.

(e) Lack of proper communication.

(f) Behaviour of supervisors.

(g) Trade union rivalry etc.

Thus, industrial disputes do not arise only when workers are dissatisfied on economic grounds,

they also arise over issues which are of non-economic nature. Instances may be quoted when

strikes where successfully organised to protest against the management’s decision to change the

location of the plant from one state to another. Similarly, even causes like behaviour of

supervisor and trade union rivalries may give rise to industrial disputes.

The whole concept of industrial relations revolves around the principle of friction dynamics

which is the key to the establishment of harmonious relations between labour and management.

We cannot think of any society completely obliviant of some sort of friction between labour and

management.

Measures to Improve Industrial Relations:

The following measures should be taken to achieve good industrial relations:1. Progressive Management:

There should be progressive outlook of the management of each industrial enterprise. It should

be conscious of its obligations and responsibilities to the owners of the business, the employees,

the consumers and the nation. The management must recognise the rights of workers to organise

unions to protect their economic and social interests.

The management should follow a proactive approach, i.e., it should anticipate problems and take

timely steps to minimise these problems. Challenges must be anticipated before they arise

otherwise reactive actions will compound them and cause more discontent among the workers.

2. Strong and Stable Union:

A strong and stable union in each industrial enterprise is essential for good industrial relations.

The employers can easily ignore a weak union on the plea that it hardly represents the workers.

The agreement with such a union will hardly be honoured by a large section of workforce.

Therefore, there must be a strong and stable union in every enterprise to represent the majority of

workers and negotiate with the management about the terms and conditions of service.

3.Atmosphere of Mutual Trust:

Both management and labour should help in the development of an atmosphere of mutual

cooperation, confidence, and respect. Management should adopt a progressive outlook, and

should recognise the right of workers.

Similarly, labour unions should persuade their members to work for the common objectives of

the organisation. Both the management and the unions should have faith in collective bargaining

and other peaceful methods of settling industrial disputes.

4. Mutual Accommodation:

The right of collective bargaining of the trade unions must be recognised by the employers.

Collective bargaining is the cornerstone of industrial relations. In any organisation, there must be

a great emphasis on mutual accommodation rather than conflict or uncompromising attitude.

Conflicting attitude does not lead to amicable labour relations; it may foster union militancy as

the union reacts by engaging in pressure tactics. The approach must be of mutual “give and take”

rather the “take or leave”.

5. Sincere Implementation of Agreements:

The management should sincerely implement the settlements reached with the trade unions. The

agreement between the management and the unions should be enforced both in letter and spirit.

6. Workers’ Participation in Management:

The participation of workers in the management of the industrial unit should be encouraged by

making effective use of works committees, joint consultation and other methods. This will

improve communication between managers and workers, increase productivity and lead to

greater effectiveness.

7. Sound Personnel Policies:

Personnel policies should be formulated in consultation with the workers and their

representatives if they are to be implemented effectively. The policies should be clearly stated so

that there is no confusion in the mind of anybody. The implementation of the policies should be

uniform throughout the organisation to ensure fair treatment to each worker.

8. Government’s Role:

The Government should play an active role for promoting industrial peace. It should make law

for the compulsory recognition of a representative union in each industrial unit. It should

intervene to settle disputes if the management and the workers are unable to settle their disputes.

This will restore industrial peace.

Settlement  Machinery for Industrial Disputes

 Conciliation, Arbitration & Adjudication

Some of the major industrial dispute settlement machinery are as follows:

1. Conciliation

2. Court of Inquiry3. Voluntary Arbitration4. Adjudication (Compulsory arbitration).

This machinery has been provided under the Industrial Disputes Act, 1947. It, in fact, provides a legalistic way of setting the disputes. As said above, the goal of preventive machinery is to create an environment where the disputes do not arise at all.

Even then if any differences arise, the judicial machinery has been provided to settle them lest they should result into work stoppages. In this sense, the nature of this machinery is curative for it aims at curing the aliments.

1. Conciliation:

Conciliation, is a form of mediation. Mediation is the act of making active effort to bring two conflicting parties to compromise. Mediation, however, differs from conciliation in that whereas conciliator plays only a passive and indirect role, and the scope of his functions is provided under the law, the mediator takes active part and the scope of his activities are not subject to any statutory provisions.

Conciliation is the “practice by which the services of a neutral party are used in a dispute as a means of helping the disputing parties to reduce the extent of their differences and to arrive at an amicable settlement of agreed solution.”

The Industrial Disputes Act, 1947 provides for conciliation, and can be utilised either by appointing conciliation officers (permanently or for a limited period) or by constituting a board of conciliation. This conciliation machinery can take a note of a dispute or apprehend dispute either on its own or when approached by either party.

With a view to expediting conciliation proceeding, time-limits have been prescribed—14 days in the case of conciliation officers and two months in the case of a board of conciliation, settlement arrived at in the course of conciliation is binding for such period as may be agreed upon between the parties or for a period of 6 months and with continue to be binding until revoked by either party. The Act prohibits strike and lock-out during the pendency of conciliation proceedings before a Board and for seven days after the conclusion of such proceedings.

Conciliation Officer:

The law provides for the appointment of Conciliation Officer by the Government to conciliate between the parties to the industrial dispute. The Conciliation Officer is given the powers of a civil court, whereby he is authorised to call the witness the parties on oath. It should be remembered, however, whereas civil court cannot go beyond interpreting the laws, the conciliation officer can go behind the facts and make judgment which will be binding upon the parties.

On receiving information about a dispute, the conciliation officer should give formal intimation in writing to the parties concerned of his intention to commence conciliation proceedings from a specified date. He should then start doing all such things as he thinks fit for the purpose of persuading the parties to come to fair and amicable settlement of the dispute.

Conciliation is an art where the skill, tact, imagination and even personal influence of the conciliation officer affect his success. The Industrial Disputes Act, therefore, does not prescribe any procedure to the followed by him.

The conciliation officer is required to submit his report to the appropriate government along with the copy of the settlement arrived at in relation to the dispute or in case conciliation has failed, he has to send a detailed report giving out the reasons for failure of conciliation.

The report in either case must be submitted within 14 days of the commencement of conciliation proceedings or earlier. But the time for submission of the report may be extended by an agreement in writing of all the parties to the dispute subject to the approval of the conciliation officer.

If an agreement is reached (called the memorandum of settlement), it remains binding for such period as is agreed upon by the parties, and if no such period is agreed upon, for a period of six months from the date on which the memorandum of settlement is signed by the parties to the dispute, and continues to be binding on the parties after the expiry of the period aforesaid, until the expiry of two months from the date on which a notice in writing of an intention to terminate the settlement is given by one of the party or parties to the settlement.

Board of Conciliation:

In case Conciliation Officer fails to resolve the differences between the parties, the government has the discretion to appoint a Board of Conciliation. The Board is tripartite and ad hoc body. It consists of a chairman and two or four other members.

The chairman is to be an independent person and other members are nominated in equal number by the parties to the dispute. Conciliation proceedings before a Board are similar to those that take place before the Conciliation Officer. The Government has yet another option of referring the dispute to the Court of Inquiry instead of the Board of Conciliation.

The machinery of the Board is set in motion when a dispute is referred to it. In other words, the Board does not hold the conciliation proceedings of its own accord. On the dispute being referred to the Board, it is the duty of the Board to do all things as it thinks fit for the purpose of inducing the parties to come to a fair and amicable settlement. The Board must submit its report to the government within two months of the date on which the dispute was referred to it. This period can be further extended by the government by two months.

2. Court of Inquiry:

In case of the failure of the conciliation proceedings to settle a dispute, the government can appoint a Court of Inquiry to enquire into any matter connected with or relevant to industrial dispute. The court is expected to submit its report within six months. The court of enquiry may consist of one or more persons to be decided by the appropriate government.

The court of enquiry is required to submit its report within a period of six months from the commencement of enquiry. This report is subsequently published by the government within 30 days of its receipt. Unlike during the period of conciliation, workers’ right to strike, employers’ right to lockout, and employers’ right to dismiss workmen, etc. remain unaffected during the proceedings in a court to enquiry.

A court of enquiry is different from a Board of Conciliation. The former aims at inquiring into and revealing the causes of an industrial dispute. On the other hand, the latter’s basic objective is to promote the settlement of an industrial dispute. Thus, a court of enquiry is primarily fact-finding machinery.

3. Voluntary Arbitration:

On failure of conciliation proceedings, the conciliation officer many persuade the parties to refer the dispute to a voluntary arbitrator. Voluntary arbitration refers to getting the disputes settled through an independent person chosen by the parties involved mutually and voluntarily.

In other words, arbitration offers an opportunity for a solution of the dispute through an arbitrator jointly appointed by the parties to the dispute. The process of arbitration saves time and money of both the parties which is usually wasted in case of adjudication.

Voluntary arbitration became popular as a method a settling differences between workers and management with the advocacy of Mahatma Gandhi, who had applied it very successfully in the Textile industry of Ahmedabad. However, voluntary arbitration was lent legal identity only in 1956 when Industrial Disputes Act, 1947 was amended to include a provision relating to it.

The provision for voluntary arbitration was made because of the lengthy legal proceedings and formalities and resulting delays involved in adjudication. It may, however, be noted that arbitrator is not vested with any judicial powers.

He derives his powers to settle the dispute from the agreement that parties have made between themselves regarding the reference of dispute to the arbitrator. The arbitrator should submit his award to the government. The government will then publish it within 30 days of such submission. The award would become enforceable on the expiry of 30 days of its publication.

Voluntary arbitration is one of the democratic ways for setting industrial disputes. It is the best method for resolving industrial conflicts and is a close’ supplement to collective bargaining. It not only provides a voluntary method of settling industrial disputes, but is also a quicker way of settling them.

It is based on the notion of self-government in industrial relations. Furthermore, it helps to curtail the protracted proceedings attendant on adjudication, connotes a healthy attitude and a developed outlook; assists in strengthening the trade union movement and contributes for building up sound and cordial industrial relations.

4. Adjudication:

The ultimate remedy for the settlement of an industrial dispute is its reference to adjudication by labour court or tribunals when conciliation machinery fails to bring about a settlement. Adjudication consists of settling disputes through intervention by the third party appointed by the government. The law provides the adjudication to be conducted by the Labour Court, Industrial Tribunal of National Tribunal.

A dispute can be referred to adjudication if hot the employer and the recognised union agree to do so. A dispute can also be referred to adjudication by the Government even if there is no consent of the parties in which case it is called ‘compulsory adjudication’. As mentioned above, the dispute can be referred to three types of tribunals depending on the nature and facts of dispute in questions.

These include:

(a) Labour courts,

(b) Industrial tribunals, and

(c) National tribunals.

The procedure, powers, and provisions regarding commencement of award and period of operation of award of these three bodies are similar. The first two bodies can be set up either by State or Central Government but the national tribunal can be constituted by the Central Government only, when it thinks that the adjudication of a dispute is of national importance. These three bodies are into hierarchical in nature. It is the Government’s prerogative to refer a dispute to any of these bodies depending on the nature of dispute.

(а) Labour Court:

A labour court consists of one person only, who is normally a sitting or an ex-judge of a High Court. It may be constituted by the appropriate Government for adjudication of disputes which are mentioned in the second schedule of the Act.

The issues referred to a labour court may include:

(i) The propriety or legality of an order passed by an employer under the Standing Orders.

(ii) The application and interpretation of Standing Orders.

(iii) Discharge and dismissal of workmen and grant of relief to them.

(iv) Withdrawal of any statutory concession or privilege.

(v) Illegality or otherwise of any strike or lockout.

(vi) All matters not specified in the third schedule of Industrial Disputes Act, 1947. (It deals with the jurisdiction of Industrial Tribunals).

(b) Industrial Tribunal:

Like a labour court, an industrial tribunal is also a one-man body. The matters which fall within the jurisdiction of industrial tribunals are as mentioned in the second schedule or the third schedule of the Act. Obviously, industrial tribunals have wider jurisdiction than the labour courts.

Moreover an industrial tribunal, in addition to the presiding officer, can have two assessors to advise him in the proceedings; the appropriate Government is empowered to appoint the assessors.

The Industrial Tribunal may be referred the following issues:

1. Wages including the period and mode of payment.2. Compensatory and other allowances.3. Hours of work and rest intervals.4. Leave with wages and holidays.5. Bonus, profit sharing, provident fund and gratuity.6. Shift working otherwise than in accordance with the standing orders.7. Rule of discipline.8. Rationalisation.9. Retrenchment.10. Any other matter that may be prescribed.

(c) National Tribunal:

The Central Government may constitute a national tribunal for adjudication of disputes as mentioned in the second and third schedules of the Act or any other matter not mentioned therein provided in its opinion the industrial dispute involves “questions of national importance” or “the industrial dispute is of such a nature that undertakings established in more than one state are likely to be affected by such a dispute”.

The Central Government may appoint two assessors to assist the national tribunal. The award of the tribunal is to be submitted to the Central Government which has the power to modify or reject it if it considers it necessary in public interest

It should be noted that every award of a Labour Court, Industrial Tribunal or National Tribunal must be published by the appropriate Government within 30 days from the date of its receipt. Unless declared otherwise by the appropriate government, every award shall come into force on the expiry of 30 days from the date of its publication and shall remain in operation for a period of one year thereafter

Collective Bargaining Importance

 Collective bargaining is a process of negotiating between management and workers represented by their representatives for determining mutually agreed terms and conditions of work which protect the interest of both workers and the management.

According to Dale Yoder’, “Collective bargaining is essentially a process in which employees act as a group in seeking to shape conditions and relationships in their employment”.

Michael J. Jucious has defined collective bargaining as “a process by which employers, on the one hand, and representatives of employees, on the other, attempt to arrive at agreements covering the conditions under which employees will contribute and be compensated for their services”.

Thus, collective bargaining can simplify be defined as an agreement collectively arrived at by the representatives of the employees and the employers. By collective bargaining we mean the ‘good faith bargaining’.

It means that proposals are matched with counter proposals and that both parties make every reasonable effort to arrive at an agreement’ It does not mean either party is compelled to agree to a proposal. Nor does it require that either party make any specific concessions.

Why is it called collective bargaining? It is called “collective” because both the employer and the employee act collectively and not individually in arriving at an agreement. It is known as ‘bargaining’ because the process of reaching an agreement involves proposals and counter proposals, offers and counter offers.

Objectives:

The basic objective of collective bargaining is to arrive at an agreement between the management and the employees determining mutually beneficial terms and conditions of employment.

This major objective of collective bargaining can be divided into the following sub-objectives:

1. To foster and maintain cordial and harmonious relations between the employer/management and the employees.

2. To protect the interests of both the employer and the employees.3. To keep the outside, i.e., the government interventions at bay.4. To promote industrial democracy.

Importance:

The need for and importance of collective bargaining is felt due to the advantages it offers to an organization.

1. Collective bargaining develops better understanding between the employer and the employees:

It provides a platform to the management and the employees to be at par on negotiation table. As such, while the management gains a better and deep insight into the problems and the aspirations of die employees, on the one hand, die employees do also become better informed about the organisational problems and limitations, on the other. This, in turn, develops better understanding between the two parties.

2. It promotes industrial democracy:

Both the employer and the employees who best know their problems, participate in the negotiation process. Such participation breeds the democratic process in the organisation.

3. It benefits the both-employer and employees:

The negotiation arrived at is acceptable to both parties—the employer and the employees.

4. It is adjustable to the changing conditions:

A dynamic environment leads to changes in employment conditions. This requires changes in organisational processes to match with the changed conditions. Among other alternatives available, collective bargaining is found as a better approach to bring changes more amicably.

5. It facilitates the speedy implementation of decisions arrived at collective negotiation:

The direct participation of both parties—the employer and the employees—in collective decision making process provides an in-built mechanism for speedy implementation of decisions arrived at collective bargaining.

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Collective Bargaining in India: Recent Trend

The collective bargaining in India remained limited in its scope and restricted in its coverage by a well defined legal structure. Actually, the labour laws systematically promoted and perpetuated a duality of labour-formal sector workers enjoying better space for collective bargaining and informal ones with no scope for collective bargaining. To understand this, we can discuss in brief about the labour legislations in India and their scope and coverage.

It is interesting to note that the applicability of different sections of labour laws is limited by number of workers engaged in an establishment. The limitations put in applicability of labour laws is haphazard and there is no logic behind it, but in overall terms it systematically denies any protection and any social security to those employed in smaller factories with less than ten workers.

The Factories Act provides for the health, safety, welfare and other aspects of workers while at work in the factories. Under this Act, an establishment with power employing 10 workers and 20 workers in case of no power connection is a factory, but following provisions of the act are not applicable to all factories:

Provision for crèche:

applicable only if 30 or more women are employed;

Provisions of a rest room:

applicable only if there are 150 or more workers;

Provisions of canteen:

applicable only if there are 250 or more workers;

Provisions for ambulance, dispensary, and medical and para-medical staff: applicable only if there are 500 or more workers.

In India, right to protest is a fundamental right under Article 19 of the Constitution of India; but right to strike is not a fundamental right. Right to strike as also the right to lock-out is a legal right governed by Industrial Disputes Act 1947.

Under the law, all strikes needed due notices and in this period if management requests for a conciliation, then strike is not legal until the conciliation continues. Even if conciliation fails, the government may refer the dispute for compulsory arbitration or to a labor court for a final decision, and during this period the strike is considered to be illegal.

The State Governments, may also for securing the public safety or convenience or the maintenance of public order or supplies and services essential to the life of the community or for maintaining employment or maintaining industrial peace, make provisions for prohibiting strikes or lock-outs. Large number of special economic zones (SEZs) and proposed National Manufacturing Investment Zones are already declared public utility services and therefore the legal strike becomes almost impossible in the zones.

Moreover, in recent decades, a number of judgments came from the Supreme Court setting precedents against the right to strike.

The trade union movement in India comprises of over 70,000 registered unions (politically affiliated and independent) and an unaccountable number of non-registered organizations engaged on the issue of promoting and protecting workers’ interests. Trade unions in India largely represent only formal sector workers.

There are now 12 Central Trade Unions[4] in India:

(1) BMS- Bharatiya Mazdoor Sangh (linked with far right political party BJP)-members: 6 million

(2) INTUC – Indian National Trade Union Congress (linked with centrist Congress Party), members: 3.8 million

(3) AITUC – All India Trade Union Congress (linked with Communist party of India)- members: 3.3 million

(4) HMS – Hind Mazdoor Sabha (independent-socialist) -members: 3.2 million

(5) CITU – Centre of Indian Trade Unions (linked with Communist Party of India (Marxist) –members: 2.6 million

(6) UTUC (LS) – United Trade Union Congress (Lenin Sarani) (linked with the party named Socialist Unity Center of India)

(7) UTUC – United Trade Union Congress (linked with political party-Revolutionary Socialist Party)

(8) TUCC – Trade Unions Co-ordination Centre (linked with political party-All India Forward Bloc)

(9) SEWA-Self-Employed Women’s Association (independent)—recently included in the list

(10) LPF-Labour Progressive Front (linked with political party-Dravida Munnetra Kazhagam)—recently included in the list

(11) ICCTU- All-India Central Council of Trade Unions (linked with Communist Party of India (Marxist-Leninist)-Liberation group)- recently included in the list

(12) INTTUC-Indian National Trinomial Trade Union Congress (linked to the political party-All India Trinomial Congress)- recently included in the list

LEGISLATION (OVERVIEW)

The Trade Union Act 1926

The trade Unions Act, 1926 provides for registration of trade unions with a view to render lawful organisation of labour to enable collective bargaining. It also confers on a registered trade union certain protection and privileges.

The Act extends to the whole of India and applies to all kinds of unions of workers and associations of employers, which aim at regularising labour management relations. A Trade Union is a combination whether temporary or permanent, formed for regulating the relations not only between workmen and employers but also between workmen and workmen or between employers and employers.

Registration

Registration of a trade union is not compulsory but is desirable since a registered trade union enjoys certain rights and privileges under the Act. Minimum seven workers of an establishment (or seven employers) can form a trade union and apply to the Registrar for it registration.

The application for registration should be in the prescribed form and accompanied by the prescribed fee, a copy of the rules of the union signed by at least 7 members, and a statement containing

the names, addresses and occupations of the members making the application, the name of the trade union and the addresses of its head office, and the titles, names, ages, addresses and occupations of its office bearers.

If the union has been in existence for more than a year, then a statement of its assets and liabilities in the prescribed form should be submitted along with the application. The registrar may call for further information for satisfying himself that the application is complete and is in accordance with the provisions, and that the proposed name does not resemble

On being satisfied with all the requirements, the registrar shall register the trade union and issue a certificate of registration, which shall be conclusive evidence of its registration.

Objectives of Trade Union:

The following are the objectives of trade union:

(1) To improve the economic lot of workers by securing them better wages.

(2) To secure for workers better working conditions.

(3) To secure bonus for the workers from the profits of the enterprise/organization.

(4) To ensure stable employment for workers and resist the schemes of management which reduce employment opportunities.

(5) To provide legal assistance to workers in connection with disputes regarding work and payment of wages.

(6) To protect the jobs of labour against retrenchment and layoff etc.

(7) To ensure that workers get as per rules provident fund, pension and other benefits.

(8) To secure for the workers better safety and health welfare schemes.

(9) To secure workers participation in management.

(10) To inculcate discipline, self-respect and dignity among workers.

(11) To ensure opportunities for promotion and training.

(12) To secure organizational efficiency and high productivity.

(13) To generate a committed industrial work force for improving productivity of the system.

Functions of Trade Unions:

(1) Collective bargaining with the management for securing better work environment for the workers/ employees.

(2) Providing security to the workers and keeping check over the hiring and firing of workers.

(3) Helping the management in redressal of grievances of workers at appropriate level.

(4) If any dispute/matter remains unsettled referring the matter for arbitration.

(5) To negotiate with management certain matters like hours of work, fringe benefits, wages and medical facilities and other welfare schemes.

(6) To develop cooperation with employers.

(7) To arouse public opinion in favour of labour/workers.

Benefits of Trade Union:

Workers join trade union because of a number of reasons as given below:

1. A worker feels very weak when he is alone. Union provides him an opportunity to achieve his objectives with the support of his fellow colleagues.

2. Union protects the economic interest of the workers and ensures a reasonable wage rates and wage plans for them.

3. Union helps the workers in getting certain amenities for them in addition to higher wages.4. Union also provides in certain cases cash assistance at the time of sickness or some other

emergencies.5. Union organize negotiation between workers and management and are instruments for settlement

of disputes.6. Trade union is also beneficial to employer as it organizes the workers under one banner and

encourages them follow to peaceful means for getting their demands accepted.7. Trade union imparts self-confidence to the workers and they feel that they are an important part

of the organization.8. It provides for promotion and training and also helps the workers to go to higher positions.9. It ensures stable employment for the workers and opposes the motive of management to replace

the workers by automatic machines.10. Workers get an opportunity to take part in the management and oppose any decision which

adversely effects them.

The Industrial Dispute Act 1947

  The Industrial Disputes Act 1947 extends to the whole of India and regulates Indian labour law so far as that concerns trade unions as well as Individual workman employed in any Industry within the territory of Indian mainland. It came into force 1 April 1947.

The objective of the Industrial Disputes Act is to secure industrial peace and harmony by providing machinery and procedure for the investigation and settlement of industrial disputes by conciliation, arbitration and adjudication machinery which is provided under the statute. The main and ultimate objective of this act is “Maintenance of Peaceful work culture in the Industry in India” which is clearly provided under the Statement of Objects & Reasons of the statute. The laws apply only to the organized sector.

The Act also lays down:

The provision for payment of compensation to the workman on account of closure or lay off or retrenchment.

The procedure for prior permission of appropriate Government for laying off or retrenching the workers or closing down industrial establishments

Unfair labour practices on part of an employer or a trade union or workers.

Objective and Applicability of Industrial Disputes Act, 1947

The main objective of the industrial Disputes Act, 1947 is to investigate and thereafter come to a settlement of any industrial disputes, primarily between employers and employees. A workman having no supervisory or administrative capacity can raise an industrial dispute before the competent authority. Furthermore, collective disputes can also be raised by the union.

The Industrial Disputes Act was enacted with the purpose of providing a permanent machinery for the settlement of industrial disputes which had become a common feature due to industrial unrest in the wake of post-war problems arising out of constant strife between employers and employees.

The results were industrial unrest and fall in production. An attempt was made to achieve the objective

(i) By improving the service conditions of industrial labour so as to provide for them the ordinary amenities of life and

(ii) By that process to bring about industrial peace which would in turn increase the pace of productive activities in the country and result in prosperity.

Principal objects of the Act are

(1) The promotion of measures for securing amity and good relations between the employer and workmen;

(2) An investigation and settlement of industrial disputes between employers and employees, employers and workmen and between workman and workmen, with a right of representation by a registered Trade Union orFederation, of Trade Unions or association of employees or a federation or association of employers;

(3) The prevention of illegal strikes and lockouts; and

(4) Relief to workers in the matters of layoff and retrenchment.

The Factories Act 1948

  There has been rise of large scale factory/ industry in India in the later half of nineteenth century. Major Moore, Inspector-in- Chief of the Bombay Cotton Department, in his Report in 1872-73 first of all raised the question for the provision of legislation to regulate the working condition in factories; the first Factories act was enacted in 1881. Since then the act has been amended on many occasions. The Factories Act 1934 was passed replacing all the previous legislation in regard to factories. This act was drafted in the light of the recommendations of the Royal Commission on Labour. This Act has also been amended suitably from time to time.

The experience of working of the Factories Act, 1934 had revealed a number of defects and weakness which have hampered effective administration of the Act, and the need for wholesale revision of the act to extend its protective provisions to the large number of smaller industrial establishments was felt. Therefore, the Factories Act, 1948 consolidating and amending the law relating to labour in factories, was passed by the Constituent Assembly on August 28, 1948. The Act received the assent of Governor General of India on 23 September 1948 and came into force on April 1, 1949.

Objective of Factories Act ,1948

The main objectives of the Indian Factories Act, 1948are to regulate the working conditions in factories, to regulate health, safety welfare, and annual leave and enact special provision in respect of young persons, women and children who work in the factories.

1. Working Hours

According to the provision of working hours of adults, no adult worker shall be required or allowed to work in a factory for more than 48 hours in a week. There should be a weekly holiday.

2. Health

For protecting the health of workers, the Act lays down that every factory shall be kept clean and all necessary precautions shall be taken in this regard. The factories should have proper drainage system, adequate lighting, ventilation, temperature etc.

Adequate arrangements for drinking water should be made. Sufficient latrine and urinals should be provided at convenient places. These should be easily accessible to workers and must be kept cleaned.

3. Safety

In order to provide safety to the workers, the Act provides that the machinery should be fenced, no young person shall work at any dangerous machine, in confined spaces, there should be provision for manholes of adequate size so that in case of emergency the workers can escape.

4. Welfare

For the welfare of the workers, the Act provides that in every factory adequate and suitable facilities for washing should be provided and maintained for the use of workers.

Facilities for storing and drying clothing, facilities for sitting, first-aid appliances, shelters, rest rooms’ and lunch rooms, crèches, should be there.

5. Penalties

The provisions of The Factories Act, 1948, or any rules made under the Act, or any order given in writing under the Act is violated, it is treated as an offence. The following penalties can be imposed:-

(a) Imprisonment for a term which may extend to one year;

(b) Fine which may extend to one lakh rupees; or

(c) Both fine and imprisonment.

Applicability of Factories Act, 1948

The Act is applicable to any factory whereon ten or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power, or is ordinarily so carried on, or whereon twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on; but this does not include a mine, or a mobile unit belonging to the armed forces of the union, a railway running shed or a hotel, restaurant or eating place.

Importance of Factories Act, 1948

The Factories Act, 1948 is a beneficial legislation. The aim and object of the Act is essentially to safeguard the interests of workers, stop their exploitation and take care of their safety, hygiene and welfare at their places of work. It casts various obligations, duties and responsibilities on the occupier of a factory and also on the factory manager. Amendments to the Act and court decisions have further extended the nature and scope of the concept of occupier, especially vis-a-vis hazardous processes in factories.

Duties of Factory Manager

The Duties of Factory Manager are mentioned in the following Sections of Factory Act, 1948: –

1. Right of Workers to be warned about imminent danger (Section 41-H)

It shall be the duty of such occupier, agent, manager or the person in charge of the factory or process to take immediate remedial action if he is satisfied about the existence of such imminent danger in the factory where the worker is engaged in any hazardous process and send a report forthwith of the action taken to the nearest Inspector.

2. Notice of periods of work for adults (Section 61)

The manager of the factory shall display correctly and maintained in every factory in accordance with the provisions of sub-section (2) of section 108, a notice of periods of work for adults, showing clearly for every day the periods during which adult workers may be required to work, fix the periods during which each relay of the group may be required to work, classify them into groups according to the nature of their work indicating the number of workers in each group, shall draw up a scheme of shifts where under the periods during which any relay of the group may be required to work.

3. Register of Adult Workers (Section 62)

The manager of every factory shall maintain a register of adult workers, to be available to the Inspector at all times during working hours, or when any work is being carried on in the factory.

4. Annual Leave with Wage (Section 79)

For the purpose of ensuring the continuity of work, the occupier or manager of the factory, in agreement with the Works Committee of the factory constituted under section 3 of the Industrial Disputes Act, 1947 (14 of 1947), or a similar Committee constituted under any other Act or if there is no such Works Committee or a similar Committee in the factory, in agreement with the representatives of the workers therein chosen in the prescribed manner, may lodge with the Chief Inspector a scheme in writing whereby the grant of leave allowable under this section may be regulated.

5. Notice of Certain Dangerous Occurrences (Section 88A)

Notice of certain dangerous occurrences. —Where in a factory any dangerous occurrence of such nature as may be prescribed occurs, whether causing any bodily injury or disability or not, the manager of the factory shall send notice thereof to such authorities, and in such form and within such time, as may be prescribed.

6. Notice of Certain Disease (Section 89)

Where any worker in a factory contracts any disease specified in 1[the Third Schedule], the manager of the factory shall send notice thereof to such authorities, and in such form and within such time, as may be prescribed.

7. Safety and Occupational Health Survey (Section 91-A)

The occupier or manager of the factory or any other person who for the time being purports to be in charge of the factory, undertake safety and occupational health surveys, and such occupier or manager or other person shall afford all facilities for such every, including facilities for the examination and testing of plant and machinery and collection of samples and other data relevant to the survey.

8. Notice of Certain Accidents (Section 88)

Where in any factory an accident occurs which causes death, or which causes any bodily injury by reason of which the person injured is prevented from working for a period of forty-eight hours or more immediately following the accident, or which is of such nature as may be prescribed in this behalf, the manager of the factory shall send notice thereof to such authorities, and in such form and within such time, as may be prescribed to the Chief Inspector.

Conclusion

The present Factories Act in operation for the last 37 years has provided ample benefits to the factory workers. It has considerably improved their working and employment conditions. The Government is actively considering the introduction of some vital amendments to the Act to keep it in tune with time and make it more effective While dealing with the duties of the Occupier and Factory Manager under Factories Act 1948, altogether we can conclude that the Occupier and Factory Manager has a vital role to play in assuring the health, safety and welfare of the workers as they are the backbone of the industrial sector. It is, however necessary that the workers and their representatives make themselves aware of the various provisions of the Act and safeguard their interests on their own and force the defaulting employer to be conscious of his legal obligations.

The Contract Labor Act 1970

The Contract Labour (Regulation and Abolition) Act 1970 was enacted as a Central law aimed at regulating the conditions under which contract labourers work and also provide for the gradual abolition of the contract labour system as and when possible.

The Act was made applicable to all establishments operating all over the country and both the Central and state governments were authorised to enforce it in their respective jurisdictions. The Act envisages the minimization of the exploitation of the labour class and improving the working conditions enjoyed by labourers employed on a contract basis.

The present day and age of extensive globalisation has resulted in people and corporates increasing their pace of production in order to maximise their profits. This has resulted in careful cost cutting by companies thus promoting contract labour.

Contract workers form a large part of the total workforce in India. Most of these workers are engaged in seasonal or occasional employment as and when they are called for. The primary sectors that mainly function through contract labour are loading and unloading of goods and materials; catering including canteen services; security services; civil and construction works; electrical/ air conditioning/ painting/ whitewashing; house-keeping services; computer maintenance, etc.

Contract labourers are usually recruited through contractors who work as a link between the actual employers and the workers. However, over time such contractors are indulging in large scale misuse and abuse of power. Workers are especially abused by being paid lesser wages than agreed upon, being forced into employment that is harmful to physical or mental health etc.

Ensuring the welfare of the labour sector in the nation is the prime responsibility of the Central Government. For this reason, the Central Government has enacted several legislations aimed at securing the welfare of the labour class. However, the rights conferred to contract workers by way of the Constitution and various other labour laws are generally poorly enforced. Although there are trade unions to secure the rights and welfare of the workers, they primarily cater to the vested interests of the trade union leaders. In SMEs, the situation is even worse; there is total anarchy and the workers are left all to themselves.

Therefore in order to secure the rights and address the welfare of contract labourers, the Government deemed it fit to pass the Contract Labour (Regulation and Abolition) Act 1970.

OBJECTIVES OF THE ACT

The prime objective of the Contract Labour (Regulation and Abolition) Act is to prevent the exploitation of contract workers and to abolish the system of contract labour in cases where:

The work is perennial in nature. The work is incidental or is necessary for the functioning of the establishment. The work is of such a nature that it can employ a considerable number of workmen full time. The work need not be done by contract workers and can be done by regular workmen.

APPLICABILITY OF THE ACT

The Act is applicable to every establishment wherein twenty or more workmen are employed or were employed on any day of the preceding twelve months as contract labor. The Act is also applicable to all those contractors who employ twenty or more contract laborers in any establishment belonging to a primary employer.

Accordingly, any organization that comes under the ambit of the Act should register itself as the principal employer by making an application to the registration officer who is appointed by the appropriate government. Further, it should be known that any establishment that does not register itself under the Act is barred from employing contract labor. Also, all contractors who are engaged in recruiting and providing contract labor are supposed to obtain a license for the same. Such license has certain conditions such as hours of work, fixation of wages and provision of certain essential amenities etc. subject to which the contractor can recruit contract laborers.

AdvertisementsThe Payment of Bonus Act 1965

The Payment of Bonus Act, 1965 provides for the payment of bonus to persons employed in certain establishments, employing 20 or more persons, on the basis of profits or on the basis of production or productivity and matters connected there with.

The minimum bonus of 8.33% is payable by every industry and establishment under section 10 of the Act. The maximum bonus including productivity linked bonus that can be paid in any accounting year shall not exceed 20% of the salary/wage of an employee under the section 31 A of the Act.

Applicability

Payment of Bonus Act, 1965 extends to whole of India. Payment of Bonus Act, 1965 applies to every factory and to every other establishment in which

20 or more persons are employed on any day during an accounting year; The Government may also apply the act on any factory or establishment in which has less than

20 but not less than 10 persons are employed; Payment of Bonus Act, 1965 is applicable on every employee whether doing any skilled,

unskilled, manual, supervisory, managerial, administrative, technical or clerical work for hire or reward and whether the terms of employment are express or implied.

Eligibility

Payment of Bonus Act, 1965 is applicable on employees drawing wages / salary up-to 10,000/- per month.

Only those employees are entitled for bonus, who have worked for at least 30 working days in an accounting year.

Rate of Bonus

33% of the salary or wages earned by an employee in a year or Rs. 100/-, whichever is higher. In case allocable surplus exceeds the amount of provision of minimum bonus, the employer shall

be bound to pay maximum bonus not exceeding 20% of the salary or wages earned by employees.

In case allocable surplus exceeds the maximum bonus (20% of the salary or wages earned by employees), the excess surplus shall be carried forward for being set on in the succeeding accounting years up to and inclusive of the 4th accounting year.

The Industrial Employment (Standing Orders) Act 1946,1961  

Section 2(g) “Standing orders” means rules relating to matters set out in the Schedule; ‘Standing Orders’ means rules of conduct for workmen employed in industrial

establishments.  The object of the Act is to require employers in industrial establishments to formally

define conditions of employment under them.

The Minimum Wages Act

In a labour surplus economy like India wages couldn’t be left to be determined entirely by forces of demand and supply as it would lead to the fixation of wages at a very low level resulting in exploitation of less privileged class. Keeping this in view, the Government of India enacted the Minimum Wages Act, 1948. The purpose of the Act is to provide that no employer shall pay to workers in certain categories of employments wages at a rate less than the minimum wage prescribed by notification under the Act. In fact the sole purpose of this act is to prevent exploitation of sweeted and unorganised labour, working in compititive market.

The Act provides for fixation / periodic revision of minimum wages in employments where the labour is vulnerable to exploitation. Under the Act, the appropriate Government, both Central and State can fix / revise the minimum wages in such scheduled employments falling in their respective jurisdiction.

The term ‘Minimum Wage Fixation’ implies the fixation of the rate or rates of minimum wages by a process or by invoking the authority of the State. Minimum wage consists of a basic wage and an allowance linked to the cost of living index and is to be paid in cash, though payment of wages fully in kind or partly in kind may be allowed in certain cases. The statutory minimum wages has the force of law and it becomes obligatory on the part of the employers not to pay below the prescribed minimum wage to its employees. The obligation of the employer to pay the said wage is absolute. The process helps the employees in getting fair and reasonable wages more particularly in the unorganized sector and eliminates exploitation of labour to a large extent. This ensures rapid growth and equitable distribution of the national income thereby ensuring sound development of the national economy.

It has been the constant Endeavour of the Government to ensure minimum rates of wages to the workers in the sweated industries and which has been sought to be achieved through the fixation of minimum wages, which is to be the only solution to this problem.

Essential Ingredient

Wage should be by way of remuneration It should be capable of being expressed in terms of It should be payable to a person employed in respect of his employment or of work done in such

employment. It should be payable to a It should be payable if the terms of employment, express or implied, are fulfilled. It includes house rent allowance. It does not include house accommodation, supply of light, water, medical attendance, traveling

allowance, contribution of employer towards provident fund, gratuity , any scheme of social insurance etc.

Classification of Wages

The Supreme Court has classified “Wages” into three categories. They are:

The Living Wage ( highest standard of wage) The Fair Wage (between living and minimum wage) The Minimum Wage.( it is the lowest standard of wage)

Procedure for fixing and revising minimum wages (section 5)

The appropriate Government is required to appoint an Advisory Board for advising it, generally in the matter of fixing and revising minimum rates of wages.

The Central Government appoints a Central Advisory Board for the purpose of advising the Central and State Governments in the matters of the fixation and revision of minimum rates of wages as well as for co-ordinating the work of Advisory Boards.

The Central Advisory Board consists of persons to be nominated by the Central Government representing employers and employees in the scheduled employments, in equal number and independent persons not exceeding one third of its total number of members. One of such independent persons is to be appointed the Chairman of the Board by the Central Government.

The Payment of Wages Act 1923, 1936

The Payment of Wages Act, 1936 regulates payment of wages to employees (direct and indirect). The act is intended to be a remedy against unauthorized deductions made by employer and/or unjustified delay in payment of wages. The main objective for the introduction of the Payment of Wages Act, 1936, is to avoid unnecessary delay in the payment of wages and to prevent unauthorized deductions from the wages.

Purpose of the Act

The main objective of the Act is to avoid unnecessary delay in the payment of wages and to prevent unauthorized deductions from the wages. Every person employed in any factory, upon any railway or through sub-contractor in a railway and a person employed in an industrial or other establishment.The State Government may by notification extend the provisions to any class of persons employed in any establishment or class of establishment. The benefit of the Act prescribes for the regular and timely payment of wages (on or before 7th day or 10th day of after wage period is greater than 1000 workers) and Preventing unauthorized deductions being made from wages and arbitrary fines.

Salary statics

Wages are averaging less than Rs. 6500.00 per month only are covered or protected by the Act by the amendment in 2005 by {Section 1(6)}.Wages means contractual wages and not overtime wages. They are not to be taken into account for deciding the applicability of the Act in the context of section 1(6) of the Act. Wages must be paid in current coin or currency notes or in

both and not in kind. It is, however, permissible for an employer to pay wages by cheque of by crediting them in the bank account if so authorized in writing by an employed person.

Summary of the provisions of the Act

The provisions of the Act regarding the imposition of fines on the employed person are as follows such as, The employer must exhibit on his premises a list of acts or omissions for which fines can be imposed, Before imposing a fine on an employed person he must be given an opportunity of showing cause against the fine, The amount of fine must not exceed 3 percent of the wages, A fine cannot be imposed on an employed person who is under the age of 15 years, A fine cannot be recovered by installments or after 90 days from the day of the act or omission for which it is imposed, The moneys realized from fines must be applied to purposes beneficial to employed persons.

Subsection 8(3), 10(1-A) & Rule 15} deals with Any person desiring to impose a fine on an employed person or to make a deduction for damage or loss shall explain personally or in writing to the said person the act or omission, or damage or loss in respect of which the fine or deduction is proposed to be imposed, and the amount of fine or deduction, which it is proposed to impose, and shall hear his explanation in the presence of at least one other person, or obtain it in writing.

Conclusion

The Payment wages act is a regulation drawn up to protect the employee’s rights from being infringed by the employer. The employee should be paid on time and should not be harassed against anything during the employment. It has however given a lot of protections to employees and will continue to do so in the future as well