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Transcript of Finsl Module 3
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Definition- Industrial Disputes Act 1947,sec 2 (k)
Industrial dispute means any dispute or difference
between(essentials prerequisites for a dispute)
Employers and employersEmployers and workmen
Workmen and workmen.
Which is connected with the employment / nonemployment of the terms of employment
or with the conditions of the labor of any personbut not supervisor or manager orDrawing wages 1600 /-pm orRelationship between employer & employee
must exist.
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Industry
As per section 2 (J) of industrial disputes act
1947, Industry mean any systematic activity
carried on by cooperation between an employ
and his work man for the production supply or
distribution of goods and services with a view
of satisfy human wants or needs.
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Workman [(2) s]
All employees in an estt are not workmen under industrial
dispute act. Employees doing any manual , skilled , unskilled,
technical, operational ,work in respective of their salary.
Sec 2 (s) of Act- workmen means any personemployed in an industry to do any skilled or unskilledmanual, supervisory, technical or clerical work for hireor reward. The terms of employment may be either
express or implied. A workman has been dismissed,discharged or retrenchment comes within the definitionof the term workman if there is any disputes relating
to such dismissal, discharge or retrenchment.
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Who all dont come under workman
Person subject to Army Act 1950 or Navy Act1934 or Air Force Act 1950.
Persons employed in police service.
Employed for managerial or administrativecapacity.
Employed in supervisory capacity
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Objective of the act1)To
secure industrial peace
a) by preventing and settling industrial disputesbetween the employers and workmen.
b) by securing harmony and good relations ,throughan internal works committee,
c) by promoting good relations, through an external2) To ameliorate the condition of workmen in industry byproviding job security.
3) To provide Suitable machinery for investigation andsettlement of industrial dispute between 3 parties.
4) To Prevent illegal strikes & lockouts.
5) To provide relief to workmen lay offs, retrenchment
etc
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Causes of Industrial DisputesA. Economic causes
terms and conditionsof employment
Wages and other
benefits
B. Psychological causes
Poor relation with
peers or superiors
Demand for self
respect, clash of
personalities.
C. Organizational Causes
Non recognition of TU,multiple TU, lack of proper
communication sys.
Unfair practices
D. Physical causes
poor working conditions
improper plant andworkstations, worn out P&
M, technological issues.
Lack of adequate
maintenance
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Causes of Industrial Disputes
Industrial Factors
Managements attitude
Government machinerylabor laws implementation ,irrelevance of certain provisions
Other causes - affiliation of TU, political instability,centre state relations.
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Under this category, some of the causes of dispute may be :
(i) An industrial matter relating to employment, work,wages, hours of work, privileges, the rights andobligations of employees and employers, terms andconditions of employment including matters
pertaining to :(a) dismissal or non-employment of any person(b) Registered agreement , settlement or award : and(c ) demarcation (establishing limits) of the functions of
an employee(ii) An industrial matter in which both the parties are directlyand substantially interested.
(iii) disputes arising out of unemployment, inflation, change inthe attitude of employers and rivalry among unions.
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(II) :
(i) Management s unwillingness to talk over anydispute with their employees.(ii) Managements unwillingness to recognize a particular
trade union , delegating enough authority to the
representatives, etc.(iii) unwillingness to negotiation and settlement ofdisputes.
(iv) Managements insistence to take care of recruitments,
promotion etc without consulting the concernedemployees
(v) Managements unwillingness to provide services andbenefits to its employee's
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(a) Though there are number of enactments forpromotion of harmonious relations, it is ineffectiveand unsatisfactory due to various reasons like their
irrelevancy in the context of the challenges of presentindustrial climate /culture, incapability ofunderstanding and answering imperatives ofdevelopment, improper and inadequate implementation
by many employers.(b) The governments conciliation machinery has settled a
very negligible number of disputes .
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StrikesLockouts
PrimaryStrikes
SecondaryStrikes
Stay-away
Strikes
Sit downStay-in
Tool Downor
Pen Down
Strikes
Go -Slow
WorkToRule
Tokenor
ProtestStrikes
Industrial Disputes
Lightening orCat-Call
strikes
Picketing &Boyco
tt
Gherao
HungerStrikes
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Strikes :
Strikes are a result of more fundamentalmaladjustments, injustices and economic
disturbances.
Strike is a temporary termination of work by a
group of employees in order to expressgrievances or to enforce a demand concerning
changes in work conditions.
Strikes are divided into three types .They are
Primary strikes, secondary strikes and other
strikes.
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I. Primary strikes are generally against the employer
with whom the dispute exists. They are :
(i) Stay Away Strikes: In this strike workmen stay
away from the work place. They organize rallies,
demonstrations, etc.
(ii) Stay-in or sit Down Strikes : In this strike,
workmen come to the place , they stay at the work
place but they dont work.
(iii) Tools Down, Pen Down Strike : Here the strikers
lay down their tools in case of factory workers ,
office workers lay down their pens,
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(iv) Token or Protest Strikes : It is of very short duration
and is in nature of signal for the danger ahead. In this
strike workers do not work for an hour or a day.
(v) Lightening or Wild cat strike : In this strike, the strike
is done without any prior notice or with a shortest notice.
(vi) GoSlow : In this strike, the workers intentionally
reduce the speed of work.
(vii) Work to rule : In this strike, the strikers undertake thework according to rules or job description.
(viii) Picketing : It is an act of protesting by the workmen
in front of the premises of the employer
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(ix) Boycott: It aims at disrupting the normal
functioning of the enterprise.
(x) Gherao : It is a physical blockade of a target either
by encirclement, intended to block from and to a
particular office, workshop etc.
(xi) Hunger Strike : This type of strike is resorted to
either by the leaders of the union or by some workers
all at a time for a limited period or up to the period ofsettlement of disputes.
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II Secondary Strike :
Secondary strikes are against a third party. These strikes
are sympathetic strikes.
Secondary action (also known as a secondary
boycott or sympathy strike) is industrial action by
a trade union in support of a strike initiated by workersin another, separate enterprise.
The term "secondary action" is intended to be distinct
from a trade dispute with a worker's direct employer, andso may be used to refer to a dispute with the employer's
parent company (holding company), its suppliers,
financiers, contracting parties, or any other employer in
another industry.
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Lockouts:
Lockout means the closing of a place of
business of employment or the suspension of
work, or the refusal by the employer tocontinue to employ any number of persons
employed by him.
However, termination of employment or
retrenchment, and prohibiting an employee
are not lockouts.
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PREVENTIVE MEASURES OF INDUSTRIAL DISPUTES
LaborWelfareOfficer
TripartiteandBipartiteBodies
StandingOrders
GrievanceProcedure
CollectiveBargaining
StrongTrade
Unions
Labor Co-Partnership and
Profit sharing
Joint Consultations
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1] Labor Welfare Officer :
Section 49 (1) and (2) of the Factories Act, 1948
specifies that:-
every factory wherein 500 or more workers are
ordinarily employed at least one welfare Officermust be appointed,
where the number of workers are in excess of
2500,the assistant and / or additional welfareofficers are required to be appointed to assist the
Welfare Officer.
Th f i f L b W lf Offi i l d
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The functions of Labor Welfare Officer includes :
(I) Labor Welfare Functions :Advice and assistance in
implementing legislative and non-legislative provisions
relating to :(a)Health &Safety
(b)Sanitation & Cleanliness
(c)Welfare Amenities
(d) Housing(e)Implementation of welfare Acts.
(f)Working conditions
(g) Recreation
(h) Workers Education
(i) Formation of welfare committees
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(II) Labor Administration Functions :These may cover:
(a)Organizational Discipline
(b)Safety & Medical administration
(c)Wage& salary administration(d)Administration of Legislation covering Industrial
Relations
(III) Labor Relations Functions: These may consist of :
(a)Administration of standing orders.
(b)Settlement of Grievances.
(c)Settlement of Disputes through statutory procedures.
(d)Trade unions& union management relations
(e)Steps to increase productivity efficiency.
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2]Tripartite and Bipartite Bodies :
Industrial relations in India have been shaped
largely by the policies and practices of Tripartite and
Bipartite bodies.
The purpose of consultative machinery is to bringthe partners together for mutual settlement of
differences in spirit of cooperation and goodwill.
Bipartite consultative machinery comprises twoparties i.e. employees and employer, the important
bipartite body is works committees.
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3] Standing Orders : It was made obligatory that standing
orders should govern the conditions of employment under
the Industrial Employment (Standing Orders ) Act of
1946. The Standing Orders regulate the conditions ofemployment from the stage of entry to the stage of exit.
4] Grievance Procedure :
5] Collective Bargaining :
6] Strong Trade unions :
7] Labor Co-partnership and profit sharing :
8] Joint Consultation :
C f ID
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Consequences of ID
For Employers
Decrease in output Increase in cost of
prod.
Fall in sales and fall inprofits
In long run loss ofgoodwill
For Employees
Loss of income
Threat Loss ofemployment
Psychological andphysical consequencesof forced idleness.
For the Nation
Cause wastage of national resources.
An adverse effect on the national
productivity, national income
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Types of Industrial Disputes
1. Disputes of interest
Determination of new wage level and other employment
conditions
2. Disputes of rights
Grievance disputesretrenchment, dismissal, workingtime etc.
3. Disputes over unfair labour practices
Discrimination of mgmt against workers on the grounds of
TU.
4. Recognition dispute
Refuse to recognize TU.
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Settlement of Disputes:
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CollectiveBargaining
Code ofDiscipline
GrievanceProcedure
Dispute
Settlement
ConsultativeMachinery
Arbitration
Conciliation
Adjudication
StandingOrder
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Collective Bargaining:
It helps for settlement of issues and prevention of
industrial disputes.
It occurs when representatives of a labor union meet
management representatives to determine employees
wages and benefits, to create or revise work rules andto resolve disputes or violations of the labor contract.
The bargaining is collective in the sense that the
chosen representative of the employees (i.e. union ) acts
as a bargaining agent for all the employees in carryingout negotiations and dealings with the management.
Code of Discipline :
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Code of Discipline :
It defines duties and responsibilities of employers and
workers. The objectives of the code are:1. To ensure that employers and employees recognize
each others rights and obligations.
2. To promote consecutive co-operation between parties
concerned at all levels.3. To eliminate all forms of coercion (force), pressure
and violence in IR.
4. To avoid work stoppages.
5. To facilitate the growth of trade unions.6. To maintain discipline in the industry.
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Grievance Procedure :
This is another method of resolving disputes.
Grievance is any discontent or dissatisfaction, arising
out of employment relationship, which an employee
thinks , believes or feels to be unfair, unjust or
inequitable.A grievance procedure is a formal process which is
preliminary to arbitration, which enables the parties
involved to attempt to resolve their differences in a
peaceful and orderly manner.When the grievance redressal machinery works
effectively, it satisfactorily resolve most of the disputes
between labor and management.
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Voluntary
Arbitration
Committee of union
& Management
Representatives
Manager
Grievance Committee
Departmental
Representatives
DepartmentRepresentatives
Head of the
department
Supervisor
Foreman
Grievant Employee
VI stage within7 days
V stage Appeal toManagement forrevision
IV stage communicatesthe decision within 7days
II stage
decisionwithin 3days
I stage answer tobe given within
48 hrs
III stage conveysverbally
NS
NS
NS
NS
NS
NS
NS- Not satisfied
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Arbitration :
Arbitration is a procedure in which a neutral third
party studies the bargaining situation, listens to both the
parties, gathers information and then makes
recommendations that are binding on both the parties.
Arbitration is effective means of resolving disputesbecause it is :
1. Established by the parties themselves and the
decision is acceptable to them.2. Relatively expeditious when compared to courts
and tribunals.
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Process of Arbitration :
1) The labor union generally takes initiative to go for
arbitration. when the union decides, it notifies the
management.
2) The union & the management select the potential
arbitrator by carefully studying the previousdecisions given by the particular arbitrator, to detect
any biases.
3) After the arbitrator is selected, the time & place for
hearing will be determined.4) Each side represents its case at the hearing.
5) Each party has to submit formal written statements.
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1) Witness , cross-examination, transcripts & legal
counsel may be used.
2) After hearing, the arbitrator studies the materials
submitted and reaches the decision within 30 60
days.
3) The decision given usually is a written opinion
mentioning the reasons.
4) The report is submitted by the arbitrator to the
appropriate government
Conciliation :
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Conciliation :
representatives of workers and employers are brought
together before a third party with a view to persuadingthem to arrive at an agreement by mutual discussion
between them.
The third party may be an individual or a group ofpeople. The third party may also be called as mediators.
The ID Act, 1947and other state enactments authorize
the governments to appoint conciliators charged with
duty of mediating in and promoting the settlement of
industrial disputes.
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In Conciliation , the ultimate decision rests with the
parties themselves but the conciliator may offer a
solution to the dispute acceptable to both the parties
and serve as a channel communication .
The parties may accept his recommendation or reject it.
If the conciliation fails, the next stage may be
compulsory adjudication or the parties may be left with
their own choice
Adjudication :
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Adjudication :
Adjudication means a mandatory settlement of an
industrial dispute by a labor court or a tribunal.
The government has a discretionary powers to accept
or reject recommendations of the conciliation officer.
It is obvious that once referred for adjudication , the
verdict of a labor court or tribunal is binding on both the
parties.
This is the most significant instrument of resolving
disputes. But, it has been criticized because of the delay
involved in resolving conflicts.
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Consultative Machinery :
set by the government to resolve conflicts.
The main function is to bring the parties together for
mutual settlement of differences in the spirit of co-operation and goodwill.
A consultative machinery operates at plant ,
industry , state and national levels.
Being bipartite in character, works committee are
constituted as per the provisions of industrial Disputes
Act, 1947 and joint management councils are set up
following the trust laid down in the Industrial PolicyResolution,1956.
The bodies operating at state and national level, are
tripartite in character , representing government, labor
and management.
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When strikes are justified
Economic demands
Unfair labour practices
When no response from mgmt. Existing facility withdrawnPF etc.
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Causes of strike
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Laws relating to Lockouts
Section 2(1) of the Industrial Disputes Act, 1947defines Lock-out as the closing of a place ofbusiness of employment or the suspension of work, orthe refusal by an employer to continue to employ anynumber of persons employed by him.
It is declared by employers to put pressure on theirworkers. It is counterpart of a strike.
Every employer has the option to lock out workers, if
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Every employer has the option to lock out workers, if
1) a dispute has been referred to a council or the Commission
for Conciliation, Mediation and Arbitration (CCMA); a
certificate that a dispute remains unresolved has beenissued; 30 days have elapsed since the referral; and
II ) 48 hours written notice of a strike is given to
a. the employer; or
b. a council (if the dispute relates to a collective agreementto be concluded in a council); or
c. to an employers organisation (if the employer is a
member of an organisation that is a party to the dispute); or
III) 48 hours written notice of a lockout is given toa. the trade union; or
b. to the workers (if they are not trade union members); or
c. a council (if the dispute relates to a collective agreement to
be concluded in a council)
F ll i d i
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Following do not constitute a
lockoutTermination of employment by retrenchment.
Prohibiting an individual employee is notlockout.
Declaration by employer - on the grounds thatthe workman has refrained from attending towork.
ff
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Layoff
Layoff implies temporary removal of an employee from
the payroll of the organization due to circumstancesbeyond the control of the employer.
It may last for an indefinite period. But the employee is
not terminated permanently and is expected to be called
back in future.
The employer employee relationship does not come to an
end but is merely suspended during the period of layoff.
It is temporary denial of employment. The purpose
of layoff is to reduce the financial burden on the
organization when the human resources cannot be utilized
profitably.
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Under Section 2(KKK) of the Industrial
Disputes Act, 1947, layoff is defined as
the failure, refusal or inability of an employer, on
account of shortage of coal, power or raw materials or
accumulation of stocks or breakdown of machinery or by
any other reason, to give employment to a workman whosename appears on the muster rolls of his industrial
establishment and who has not been retrenched.
Layoff is restored in cyclical and seasonal industries. In
mines workers are laid off due to excess of inflammablegas, flood, fire and explosion.
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According to Section 25(c) of the Industrial Disputes
Act, 1947, a laid off worker is entitled to compensation
equal to 50 per cent of the basic wages and dearness
allowance that would have been payable to him had he not
been laid off. To claim this compensation, the laid off
workman must satisfy the following conditions:
a) he should not be a badli or a casual worker,
b) his name must appear on the muster rolls of the
industrial establishment,
c) he must have completed not less than one year ofcontinuous service, and
d) he must present himself for work at the appointed time
during normal working hours at least once a day.
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Badli workman" means a workman who is
employed in an industrial establishment in the
place ofanother workman whose name isborne on the muster rolls of the establishment,
but shall cease to be regarded as such for thepurposes of this section, if he has completed one
year of continuous service in the establishment.
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Retrenchment
Retrenchment means permanent termination of service ofan employee for economic reasons in a going concern.
The Industrial Disputes Act, 1947 defines retrenchment
as the termination by the employer of the services of
workman for any reason other than termination of
services as punishment given by way of disciplinary
action, or retirement either voluntary or reaching age of
superannuation, or continued ill-health or the closure andwinding up of abusiness.
Retrenchment however does not
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Retrenchment however does not
include the following:
Voluntary retirement of the workman
Retirement of the workman on reaching the ageof superannuation
Termination in terms of non renewal of thecontract
Termination due to continued ill health
The Act lays down the following conditions
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y g
for retrenchment.
1.The employee must be given one months
notice in writing indicating the reasons for
retrenchment or wages in lieu of such notice.
2. The employee must be paid compensation
equal to 15 days for every completed year of
service.
3. Notice in the prescribed manner must be
served on the appropriate Government authority.
4. In the absence of any agreement to the
contrary, the worker employed last must be
terminated first.
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For this purpose, average pay will be calculated asunder:
if the workman is entitled to monthly salary,then on the basis of the salary of last threecalendar months;(90/3) or
if the workman is entitled to weekly wages,then on the basis of wages of last fourcompleted weeks; or
if the workman is entitled to daily wages, thenon the basis of wages of last twelve fullworking days.
M ABC h k d i i i f 24 5
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Mr ABC has worked in an organization for 24 years, 5
months and his last drawn package is as under
Basic WagesRs 5, 000 + Dearness AllowanceRs 3, 000
+ Conveyance AllowanceRs 1, 500 + Washing Allowance
Rs 1, 000 + House Rent AllowanceRs 1, 000 + Canteen
facility worth Rs 1, 000 + Dress AllowanceRs 1, 000. The
total amount to be considered for retrenchment compensation
is Rs 13, 500.
13, 500/26 days = 519.23 (1 Day salary)
519.23 X 24 years X 15 days = Rs 1, 86, 922. 80/-
Therefore the amount of retrenchment compensation to be
payable to Mr ABC is Rs 1, 86, 922. 80/-
Mr. X is an employee of Bajaj Auto. Due to his ill behavior, he
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COMPUTATIONLeast of the following is exempt:
Amount actually received 3,00,00015 days average pay* no.of yrs served 1,35,000(45000*3/90)*6*15
3.Maximum exemption limit 5,00,000
___________Exempted amount 1, 35,000
Taxable amount 1,65,000
p y j jis retrenched from the services of the Co. after serving 5 years7 months. He received an amount of Rs 3, 00,000. During his
employment he was getting a monthly salary of Rs 45,000
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Authorities under this act
Works committee
Conciliation officers
Boards of conciliation
Courts of inquiry
Labor court
Tribunals National tribunals