This article is written by Sahil Arora. This article highlights the impact of lockouts on employers, employees, and the organisation as a whole. Lockout is a tool to negotiate the demands made by the employer that are related to the terms and conditions of the worker’s employment. The meaning, procedure, effects, and consequences are all discussed in detail in this article, along with landmark cases.
Table of Contents
Introduction
The contribution of the industrial sector to the global gross domestic product (GDP) in 2021 was approximately 27.59%. Apart from major contributions to the GDP, industries also contribute by providing employment to a large population. In the year 2021, around 753 million people were employed in the industries, and specifically in India. In the same year, the contribution was nearly 35.6 million, which covers 25.34% of the workforce across economic sectors. These facts were provided just to give an overview of how much the industries contribute to our personal lives, directly or indirectly. And because of whom these industries run, i.e., employers, employees, and workers, the world keeps going. But of course, all of these are humans, and there are certain times when they feel that their demands need to be fulfilled so that they can work more satisfactorily, and if their demands are not met, they choose certain ways to get them fulfilled, such as strikes by the employees and lockouts by the employers. These are the methods of collective bargaining that, if done lawfully, get protection from the law as well.
Lockout under Industrial Disputes Act, 1947
Meaning and definition of lockout
The term “lock” here means ‘not a permanent fixture that remains closed or open at all times’, while the word “out” in this context refers to ‘the temporary exclusion of employees and management from the establishment until the issues get resolved’, which leads to the declaration of a lockout.
As described above, a lockout is a tool by which the employer fulfils his demands from the employees who are already working for and under him. He makes his demands agreed upon by using various methods that pressurise the workers to agree to his demands related to their employment with the employer. Thus, it means there is an element of demand for which the place of employment is locked out or closed. However, the employer needs to have the intention to re-employ the workers if they accept the demands. These lockouts are the last resort available to the employer after conciliation measures have been deemed unfruitful.
Although declaring lockouts is not illegal, but conducting them without complying with the legal formalities and regulations could be deemed illegal. Also, not in every circumstance can a lockout be made, such as where a company closes down its business and terminates the service of its workmen; or where there is retrenchment of some workmen on the ground of rationalization of work; or when there is refusal by an employer to allow latecomers on a day to work on that day, etc. In all these cases, there is no need to conduct a lockout in the industrial establishment.
Under Section 2(l) of the Industrial Dispute Act, 1947, the term ‘lockout’ is defined, and according to this definition, it means “the temporary closing of a place of employment, or the suspension of work, or the refusal by an employer to continue to employ any number of persons employed by him”.
The Black’s Law Dictionary defines lockout as “an employment action. An entity stops or withholds work. The work force is not allowed on entity property during this condition. It is a reverse strike by entity management, intended to compel an entity-favourable settlement to a labor dispute. When several employers in concert conduct a lock out action, it is known as a joint lockout. Also known as shut out”.
Essentials of lockout in Labour Law
From the above definitions, the concept of lockout can be understood under the following 4 ingredients:
- (A) Temporary closing by the employer of a place of employment, or
(B) Suspension of the work by the employer, or
(C) Refusal to continue to employ any number of persons employed by the employer;
- The above-mentioned acts of the employer should be motivated by coercion;
- An industry as defined in the Act; and
- A dispute in such an industry.
The question of whether the lockout by the employer is justified or not would be an industrial dispute under the Act, and therefore, the consideration of payment of wages during the period of lockout would also be an industrial dispute.
Under the Industrial Disputes Act, 1947, there are mainly 7 Sections that deal with the concept of lockouts in labour laws in India. The series of sections discussed below are common for both strikes and lockouts, but here they will be explained only with the context of lockouts:
Prohibition of strikes and lockouts
Section 22 of the Act explains the conditions that are to be complied with by an employer before conducting a lockout, in the case of any public utility service, or else there could be no lockout.
Firstly, a notice of lockout is to be provided to the workmen in the prescribed manner, and within six weeks of such notice, the lockout is to be made; or a lockout is to be conducted only after 14 days of giving the prescribed notice. In the event that a strike is already in existence, then in that situation there is no need to give a notice of lockout, but an intimation is required to be sent to the specified authority specified by the appropriate government.
Also, no lockout can be made during the pendency of any conciliation proceedings before a conciliation officer and seven days after the end of such proceedings.
Also, if on any day, the employer gives to any person employed by him the prescribed notice of lockout, then he shall report the number of notices provided to the appropriate government within five days of providing such notice.
General prohibition of strikes and lockouts
Section 23 of the Act discusses the procedure to be complied in the event of conducting a lockout in any industrial establishment. The employer shall not declare a lockout while the conciliation proceedings are pending before a board of conciliation, and not even after seven days of its conclusion. Neither can it be declared while the proceedings are pending before a Labour Court, Tribunal, or National Tribunal, nor two months after the conclusion of those proceedings. And the same is the case under arbitration proceedings, where while the proceedings are pending before the arbitrator and even after two months of their conclusion, no lockout can be declared by the employer.
Apart from these proceedings, if any settlement or award is in operation, then during the period it is in operation, no lockout will be declared, in case of any of the matters covered by that settlement or award.
One thing to be noted here is that this section does not bar declaring a lockout if the conciliation proceedings are going on before a conciliation officer.
Illegal strikes and lockout in Labour Law
Section 24 of this Act declares that a lockout will be considered illegal if it is declared or commenced in contravention of Section 22 or Section 23 of this Act or if it is continued in contravention of Section 10(3) or Section 10A(4A) of this Act.
Although a lockout will not be considered illegal if its continuance is not prohibited under the above-mentioned sections or if it is declared in consequence of an illegal strike.
Prohibition of financial aid to illegal strikes and lockouts
As per Section 25 of this Act, a person is prohibited from knowingly expending or supplying any money that will be used in direct support of an illegal lockout.
Penalty for illegal strikes and lockouts
Section 26 of this Act provides a penalty of imprisonment, which may extend to one month or a fine of Rs. 1000 or both, on the employer who would commence, continue, or otherwise act in furtherance of a lockout that is declared illegal under this Act.
Penalty for instigation, etc.
Section 27 of this Act provides a penalty of imprisonment, which may extend to six months, or a fine of Rs. 1000, or both, against any person who instigates or incites others to take part in or otherwise act in furtherance of a lockout that is declared illegal under this Act.
Penalty for giving financial aid to illegal strikes and lockouts
Section 28 of the Act provides a penalty for the act, which is prohibited under Section 25 of the same Act. Thus, any person who knowingly supplies money that would be used in direct support of an illegal lockout would be punished for imprisonment which would extend up to 6 months or with fine of Rs. 1000 or with both.
Procedure for lockout in Labour Law
Although there is no definite procedure in itself regarding lockouts, the procedure for it can vary depending on the country and its labour laws. But there are some general steps that can be followed tath can lower the chances of declaring a lockout illegal or unlawful. They are as follows:
Issue of notice or notification
The employers are generally under a compulsion to give notice or issue a notification regarding the declaration of the lockout within the establishment. Such notice must be given to the employees as well as the government authorities so that they can make their preparations beforehand. The notice or notification must contain the reasons why a lockout is required to be declared, and along with that, the date on which it will be declared must also be mentioned. Other requirements in regard to a notice are mentioned in Section 22 of the Industrial Disputes Act.
Application for conciliation
Once the notice of lockout is issued, the employer must call for a conciliation officer who could initiate the conciliation proceedings so that if there are chances to resolve a dispute without declaring a lockout, it can be done, which will benefit both the employer as well as employee in the long run. The conciliation officer shall resort to the methods of mediation and negotiation so as to settle the disputes.
Prohibition on declaring a lockout during conciliation
Once the conciliation officer arrives and starts making efforts to resolve the dispute, the employer must be prohibited from declaring a lockout during such a period of conciliation. This must be done to avoid stretching the issue. Section 22(2)(d) of the said Act lays down this prohibition.
Waiting period
Once the conciliation proceedings are concluded, until the next seven days, no lockout can be declared. This waiting period is provided so that after the proceedings get over, the employer and employees resolve their disputes amicably as well for better understanding between them. Section 22(2)(d) of the said Act lays down this waiting period.
Declaration of lockout
After the conciliation proceedings get over, if no mutual settlement is reached between the parties, then the employer can use his right and declare a lockout in the establishments in which it is required. The employer must be careful in specifying which establishments or which part of such establishments is the one where the lockout is declared.
Information to authorities
Once the lockout is declared, the employer is under an obligation to inform the authorities, which are specified by the appropriate government, regarding these declarations on the day they are declared and provide the reasons for declaring them as well. Section 22(3) of the said Act lays down this condition.
Penalties for illegal lockouts
If the employer declares a lockout, but it is found that it was declared without complying with the requirements and procedures of the law, it would be deemed illegal or unlawful. The employees of such establishments can take a legal action against their employers and can also claim compensation for such duration of the lockout. Section 26-28 of the said Act prescribes penalties for violating any terms related to lockouts.
Resuming work
After the end of the lockout, the employees are expected to return to their work as they were doing before the declaration of the lockout, but under the new terms and conditions on which they agree to end the lockout.
Overall, the complete process of lockout requires a lot of requirements which must be met like, complying with the legal regulations, making effective communications and efforts to resolve it through different modes, and considering the potential consequences for both the employer and the employee.
Reasons for declaring a lockout
There is no exhaustive list under which all the reasons under which a lockout can be declared are mentioned. Although the main reasons that are common for declaring a lockout are mentioned below:
- Labour disputes occurring between workers and employers in regard to terms of employment.
- General disputes occurring between workers which leads to interruptions in work.
- To make the workers agree to a change in regard to the new policies of the organisation.
- In response to illegal strikes, continuous strikes, or regular strikes by the employees or their union.
- In regard to the economic and strategic reasons of the employer.
- To deal with financial losses by reducing its liability for paying wages and cost savings.
- To deal with external environmental disturbances that occurred due to unstable government decisions.
- Lack of trust, peace, and harmony between employers and employees.
Lockout under Industrial Relation Code, 2020
As per the Central Government of India, there are more than 40 central laws and more than 100 state laws that are related to labour and related matters, because of which it has become a very complex task to deal with such matters. Thus, the Central Government in the year 2019 brought certain labour reforms in the form of four new labour codes, which will consolidate 29 central laws. The codes are: Code on Wages 2019, Code on Social Security 2020, Occupational Safety, Health, and Working Conditions Code 2020, and the Industrial Relations Code 2020. Now, although all these labour codes have been passed, they are still to be notified by the Labour Ministry. Thus, their finalisation and implementation are still withheld.
Out of these four codes, the Industrial Relations Code, 2020 is the one which includes the three main core laws i.e. ‘The Industrial Disputes Act, 1947’; ‘The Trade Unions Act, 1926’ and ‘The Industrial Employment (Standing Orders) Act, 1946’, which are related to the settlement of labour disputes and collective bargaining agreements, under which the concept of strikes and lockouts is also discussed.
There are certain changes, although not major ones, which are discussed as follows:
- In the new labour code, a lockout is discussed in Chapter 8, the majority under Sections 62, 63, and 64. On the other hand, under the previous Act, they were covered under Chapter 5, from Sections 22 to 25.
- Earlier, the prohibition of lockout was divided into two parts: public utility service and general industrial establishments. But now, under the new Code, the prohibition is only in the context of general industrial establishments.
- Under the new Code, the employer is now to give notice of lockout 60 days before conducting it, which was earlier 6 weeks in the ID Act.
- The penalties are now also enhanced under the new labour code.
- The penalty for commencing, continuing, or otherwise acting in furtherance of a lockout that is illegal is a minimum Rs. 50000, which may extend to Rs. 1 lakh, or with imprisonment of up to one month or both.
- The penalty for instigating or inciting others to take part in an illegal lockout is now Rs. 10000, which may extend to Rs. 50000 or with imprisonment for up to one month or both.
- The penalty for knowingly spending money in direct furtherance of an illegal lockout is now raised to Rs. 10000, which may extend to Rs. 50000, with imprisonment of up to one month, or with both.
Effects of lockout in Labour Law
Effects of a lockout on organisations
Organisations and employers (as defined under Section 2(g) of the Industrial Disputes Act, 1947) are some of the parts of an industry that are affected both positively and negatively by the lockouts. These effects could have both short-term and long-term, as well as economic and psychological consequences. These effects can vary depending upon the duration, success, and specific circumstances of the lockout.
Speedy completion of the work
Employees, under the fear of losing their work because of the lockout, often prefer to agree to negotiate with the employer on his terms, and this saves time that would otherwise be wasted if the lockout continued for a long time. During this saved time, the employees could complete their work and achieve their targets.
Financial impact
By conducting lockouts, an establishment no doubt makes some cost savings in the initial phases by not paying their employees the amount required to be paid for their work done, but in the long-term, the organisation does incur financial losses because of a halt in operations, losing business opportunities, the cost of hiring temporary replacement workers, etc.
Strategic impact
Because of lockouts, all the plans that were made by the organisations get affected, and thus the strategies of those establishments to achieve profits also go in vain. They may need to recalibrate their strategies and goals as per the outcome of the lockout and the evolving labour relations landscape.
Operational disruptions and loss of market share
Lockouts often lead to disruptions in normal business operations because the normal working force is not available to complete the work, and thus the employees working in their place may be short of help or inefficient, in the case of newly employed employees. Thus, these disruptions may lead to delays in project timelines and achieving organisational goals. This further leads to delays in deliveries, or there can be no deliveries in certain cases if the lockout goes on for a long time. This affects the relationship and trust of the customers with the organisation, which can lead to lost business and a damaged reputation.
Disruptions in the supply chain
Not only the organisations in which the lockouts are announced are affected, but those organisations or establishments which were dependent on them also have their work disrupted as their supply chain is disturbed because of a lack or non-production of the materials required by them for further deliveries.
Loss of intellectual capital
The employees who, because of lockouts, preferred to change their place of employment also take with them the skills and expertise they acquired from their previous organisations. This leads to a loss for the previous organisation in two ways: firstly, they need to again train the new employees hired in place of the old ones, and secondly, this leads to a loss of intellectual capital, which could be harmful in case their employees leak their secrets to some rival organisation, leading to the chances of losing their competitive edge.
Employee morale
After declaring a lockout, there is a sense of uncertainty among the employees regarding when they will rejoin and continue their work. This leads to fear and also frustration among them, which leads to reduced morale among them. This low morale and demotivation affect their productivity at work even after the lockout ends, as they often remain in fear of the next lockout.
Employee recruitment and retention
Lockouts are mainly done as a result of any labour dispute within the organisation, and continuous lockouts mean continuous labour disputes. Thus, a new employee would never prefer to work in an organisation that has a history of labour disputes, as it would affect his productivity as well as put a hindrance on his career growth and opportunities. And not only for the new employees, but it is also difficult to retain the already employed employees in the organisation.
Reputation risk
Lockouts also affect the reputation of the organisation in the eyes of potential employees, the public, business partners. This leads to the loss of the goodwill of the organisation, and negative publicity or public perception of the organisation can have long-lasting consequences.
Litigation
Legal battles can arise from the lockouts. The employees, their union, or other stakeholders may take legal action against the organisation for unfair labour practices, breach of contract, or other wrongful actions. These litigations are often time-consuming and affect the organisation financially too.
Legal and regulatory risks
Certain conditions are already prescribed that need to be complied with for conducting a lockout, such as giving notice to the workers, not conducting a lockout in a certain time frame while the proceedings are going on, etc. Thus, these legal requirements need to be followed, and failure to do so can result in penalties, legal actions, and regulatory scrutiny, which can be detrimental to the organisation.
Long-term labour relations
A lockout once over can still hamper the relationship between the employee and the organisation, which could lead to non-compliance with the given orders, making future labour negotiations more challenging and potentially leading to a more adversarial relationship.
Effects of the lockouts on the employer(s)
Leverage in negotiations
The primary purpose for which an employer declares a lockout is to negotiate certain terms of employment with the employees. The lockout as a bargaining tool gives leverage to the employer during labour negotiations. Employers, with the help of this tool, pressurize the employees to comply with the terms and accept them, especially if the lockout causes financial hardship to the employees.
Cost savings
In the short-term, the employer often saves some money that would otherwise be spent on the employees for the work done by them. During the lockout, the employer does not pay employees wages and benefits, which can reduce labour costs. On the other hand, these savings are offset in the long-term if the lockout does not end soon in the form of legal fees, no or low production of products, hiring temporary workers, etc.
Resolution of labour disputes
Whether the idea of declaring a lockout is a successful one or not is known only after seeing the outcome of the labour dispute because of which the lockout was announced. If the lockout results in a favourable agreement for the employer, it can be seen as a successful strategy. But if the dispute remains unsolved or if the demands of the employer remain unaccomplished, the lockout could be deemed ineffective.
Financial losses
While the lockouts provide a short-term financial benefit to the employer, the uncertainty and disruption they cause can lead to much more financial loss than benefit. Businesses may, because of a stoppage of production in the organisation, lead to loss of revenue because of not being able to sell its products on time to their customers. The longer the lockout continues, the greater the financial losses.
Loss of market share
Because of not meeting the demands of its customers on time as a result of the lockout, there are chances that the employer’s competitors will take over him and his market share. The employer may lose its competitive edge and once it is lost, it is very difficult to regain its position in the market.
Damage to customer relationships
When a lockout is declared, it often results in delayed or unfulfilled orders, which affects and damages customer relationships with the employer. As a result, the customers may try to go for competitors who could meet their demands on time. And once the customer shifts to another company, it is very difficult to bring him back. This also hampers the reputation of the employer in public.
Increased labour costs
In cases where the negotiations are not in the employer’s favour and he decides to end the lockout, he sometimes has to offer higher wages or benefits to its employees, which increases the labour costs. Apart from this, during the continuance of the lockout, if the employer wants to hire some temporary workers for the completion of its work, he has to incur some labour costs, which would defeat the purpose of cost savings.
Employee morale
Lockouts can sometimes negatively affect the morale of employees and workplace culture. Employees who are locked out often feel demotivated, angry, or alienated, which could result in reduced loyalty with their employers, and it can continue even after the lockout ends. This also results in a decline in their productivity, which leads to losses for the employers.
Operational disruption
Long lockouts often disrupt the normal working operations of the business and result in reduced productivity, delayed projects, and disruptions in the supply chain. The longer a lockout continues, the greater will be its potential impact on the employer’s operations.
Legal and regulatory risks
Employers, before conducting a lockout, need to comply with the requirements set out in the laws and follow the prescribed procedure only to declare a lockout; otherwise, it will be considered illegal. Failing to comply with the laws or conditions set can lead to legal and regulatory risks, legal actions, penalties, etc.
Potential for litigation
Lockouts can also result in legal battles. The employees or the union can take legal action against the employer for unfair labour practices, breach of contract, or other grievances. Such legal disputes and litigation are often time-consuming as well as costly for the employer.
Long-term consequences
Just like the long-term consequences in the case of organisations, with employers too, there may be certain long-term consequences, such as strained relationships between the management and employees, difficulty in making future labour negotiations, etc. Such effects can go on for a long time, affecting organisational culture and employee engagement.
Effects of lockout on workmen
Employees and/or union members, collectively called as workmen (as defined under Section 2(s) of the Industrial Disputes Act, 1947), are also significantly affected by the lockouts made by the employers. Just like in the above-mentioned case, the effects of lockouts here also can vary depending on the duration of the lockout, the success of the labour dispute, and the specific circumstances. The workmen are also economically as well as psychologically affected by these lockouts.
Financial loss and financial stress
Workmen come under that class of people who are most affected by the lockouts, and one of the biggest impacts they have to face is financial burden. Workmen are not paid during the period of lockout, and if the lockout continues for a long duration, the hardships will continue to increase. Moreover, there is no certainty when a lockout will end, so the workmen are always under stress and anxiety about how to cover their financial commitments, including payment of bills, medical expenses, household expenses, etc. They have to rely on the savings made by them, which could also end if the dispute does not get resolved soon.
Emotional stress and low morale
Just as there is financial stress, the workmen also have to go through emotional stress like depression, anxiety, and frustration. The uncertainty of returning to work makes him feel demotivated, decreases his morale, as well as affects his growth in career and productivity. Workmen are also human beings, and like any other person, they also have to live and die in society, so he cannot ignore what people think about them. Due to the lockout, the workman who is unable to fulfil his commitments and duties has to face criticism from society, which affects his morale to perform any other task.
Impact on families
Workmen alone are not impacted by the lockout, but their family which is dependent on him also suffers. The duty to meet family obligations puts additional pressure on the workmen, which leads to more anxiety and frustration on him. This might also affect the relationship between the workman and his family.
Impact on health
All the above factors, which lead to anxiety and depression, might adversely affect the health of the workmen. This could hinder his productivity, and because of a lack of sufficient financial support, the workmen might not be able to provide himself with the proper treatment, which could further deteriorate his health.
Impact on career progression
Not being able to work because of the lockout results in missing the opportunities to polish their skills, which could affect their productivity and might affect their health as well. This might also decrease his chances of getting a new job in a higher position because of the lack of competitive skills required, or the new employer himself might not prefer to hire such employees who were involved in a lockout.
Disruption of routine
Because of lockouts, there could be an interruption in the normal working pattern of the organisation, leading to disruptions in the regular routine of the workmen. Once the lockout is over, when the workmen return, they could find difficulty in continuing the same work, which might result in a slowdown in production and a delay in meeting the commitments.
Divisions and strain
Ending a lockout is a tricky part, as some workmen might prefer to obey the conditions of the employer so that they can continue to work and earn something. On the other hand, some workmen might still prefer to not accept the conditions and continue their strikes, leading to a division within the workmen. This division and strain can continue even after the lockout ends, leading to bitterness in their relationships and coordination.
Potential legal action
To end a dispute, the workmen might prefer to choose the way of legal battles. These legal battles are often time-consuming as well as costly, and thus, choosing this method can act like a double-edged sword. Also, if the workmen consider the lockout unlawful, they can take legal action against their employer and, if found guilty, can claim compensation during such a period of lockout.
Landmark cases on lockout in Labour Law
Lakshmi Das Sugar Mills Ltd. v. Pt. Ram Sarup. (1956)
In this case, seventy-six workers of the appellant company went on a strike in support of a dismissed co-worker. The general manager of the company makes efforts so that the workers resume their work, but after making certain efforts, in the end, he suspends them until further notice. On a day, after the mid-day recess, the workers forcefully entered the mills, leading to the call of the police to maintain peace.
After all this, charges of misconduct and insubordination were framed against the workers. This further led to an open inquiry by the general manager, but the workers’ non-cooperation during this inquiry made the management take the step of dismissing the workers. However, due to a pending appeal, the company was made to seek permission from the Labour Appellate Tribunal to dismiss the workers. The main dispute in this case was whether the suspension and prevention of workers from working after midday constituted a lockout or not.
The Supreme Court of India in this case gave the decision in favour of the company by stating that the conduct of the company did not meet the definition of a lockout. And even if it is considered a lockout, it was because of the consequences of an illegal strike conducted by the workers. And against an illegal strike, the employer has a right to do a lockout. There is no need to obtain permission from the Appellate Tribunal under Section 22 of the Act to declare a lockout. The court also rejected the contention that the lockout amounted to punishment, as it was in response to the non-cooperation of the workers themselves.
Bangalore Water Supply v. A. Rajappa (1987)
This is a landmark case in Indian labour law, as this is the case that has expanded the horizon of the term ‘industry’ as defined in Section 2(j) of the Industrial Disputes Act, 1947. Although this case does not explicitly talk about the concept of lockout, it does deal with the issue of the rights of employers to lockout their workers.
Basically, in this case, there was a group of employees who were employed under the Bangalore Water Supply and Sewerage Board (BWSSB), and they were fined on the charges of misconduct because of which the employees filed a claim petition under Section 33C(2) of this same Act before the Labour Court, stating that the said punishment was imposed without complying with the principles of natural justice. The BWSSB, in reply, raised a preliminary objection, saying that they do not fit under the definition of the term ‘industry’, and thus the Labour Court has no jurisdiction to deal with the claim of the workmen. The Supreme Court in this case expanded the term industry and also included the BWSSB in this meaning.
Coming to the ‘lockout’ part, the Supreme Court, in this case, held that no doubt the law has provided the right of conducting lockout to an employer, but this is not an absolute right, and it is subject to a number of restrictions. This is an implied right that arises from the right to hire and fire workers. The court also held that the workers are entitled to reasonable notice of a lockout, which is to be provided by the employers with an opportunity to negotiate.
Cera Sanitaryware Limited v. State of Gujarat (2022)
This case is regarding a dispute which occurred between Cera Sanitaryware Limited, a company engaged in the manufacturing of sanitaryware and tiles, and the Gujarat Mazdoor Sabha, a union representing shop floor workers. The company made a settlement agreement with a previous union in the year 2017 under which certain terms and conditions were laid regarding wages and service. This settlement was for a duration of four years, i.e., from 1st September 2017 to 31st August 2021.
A dispute arose later on due to perceived changes in the incentive scheme. The workers under a new union, the Gujarat Mazdoor Sabha, called for strikes on multiple occasions in the year 2020. The company made efforts to call off the strike, but it was not fruitful. In response to this, the union claimed that a lockout was declared by the company, which resulted in a legal dispute over the nature of the work stoppage.
The Gujarat High Court observed that the efforts made by the company in calling off the strike and issuing notices which were published on the notice board, in no sense amounted to a lockout, and whatever it did was in accordance with the law. Certain government officers were also sent to the company, and they observed that the workers were not being prevented from entering the company premises, and thus the allegations of the workers and union regarding the lockout were frivolous and untenable.
Conclusion
Both strikes and lockouts in labour laws are an integral part of collective bargaining in any industrial establishment and should be considered the remedy of last resort. Analysing the multifaceted nature of lockouts reveals their impact on workplace dynamics, labour negotiations, and the broader socio-economic landscape.
In response to the labour disputes that occur between employers and employees, lockouts have proved to be a useful tool to negotiate and protect business interests. No doubt, from the standpoint of the employees, it is a tool which leads to loss of livelihood, causes financial strain and fosters a sense of instability, but if seen from the employer’s point of view, then it is an essential tool as if he wants to bring some important changes in the industry and the workers are not cooperating, then he can use this tool to get his work accomplished. As labour laws continue to evolve, the understanding and regulation of lockouts must balance the rights and responsibilities of both parties. Proper studies must be made so that fair, equal, and sustainable labour relations prevail in an ever-changing work landscape.
Frequently Asked Questions (FAQs)
What is the difference between a strike and a lockout?
The key difference between a strike and a lockout lies in who initiates these labour actions, i.e.strikes are often initiated by the employees and workmen to get their demands fulfilled from their employers, while on the other hand, a lockout can be initiated only by the employer against his workmen to get his demands and work accomplished. In the case of a strike, the employees collectively decide to cease work as a means of protest, whereas during lockouts, it is the employer who decides to prevent the employees from working. In case of a strike, it is the responsibility of the employees or their labour union to ensure compliance with applicable legal requirements, and on the other hand, under lockouts, the burden is on the employer to justify the lockout’s necessity and to ensure its compliance with the law. However, both of them are subject to the labour laws and regulations at the end.
Does the employer have the right to lockout in any public utility service?
Yes, the employer has a right, as per Section 22 of the Industrial Disputes Act, 1947, to declare a lockout in any public utility service. Public utility services basically include services related to water supply, electricity, transport, postal, etc. which are deemed essential to the community. Although it is a right, the employer must follow legal procedures, like providing a notice period, before declaring a lockout. Before declaring a lockout, a prior attempt of reconciliation should also be made through modes like conciliation, arbitration, etc. in order to resolve disputes between them.
References
- Labour and Industrial Laws (29th edition), S.N. Mishra
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