This article is written by Sukhmandeep Singh, a law student at the Guru Nanak Dev University, Amritsar. In this article, we aim to clarify the distinction between industrial disputes and individual disputes, as well as explore the underlying causes of such disputes. Additionally, we will discuss the circumstances in which individual disputes can escalate into industrial disputes, the process of filing these cases, and the situations where the Industrial Disputes Act, 1947, may not apply.
It has been published by Rachit Garg.
Table of Contents
The exploitation of the labour forces has been going on for a long time. Labourers and their unions have been fighting against exploitation for years now. Prior to 1947, the Trade Disputes Act, 1929 was applicable in cases of industrial disputes and thus helped in resolving them. This Act had a number of flaws that became apparent over time. In order to remove these flaws, the Industrial Disputes Bill, 1947 was proposed in the Legislature. The Industrial Disputes Bill, 1947 was eventually adopted to lay down investigation provisions and also to find some solutions to industrial disputes while providing certain safeguards to the workers. The Industrial Disputes Act, 1947 is broken into seven chapters and contains 40 sections. It was passed to establish a legal framework for resolving disputes between employers and employees in the country.
To promote the growth and development of industries, it is crucial to promote a harmonious environment within them. In order to achieve this, companies and industries employ various methods, commonly referred to as employer-worker interactions, to maintain positive relationships between management and employees. In India, these types of efforts are made to promote the highest possible level of satisfaction with the community’s economic demands.
The Industrial Disputes Act, 1947, which was amended in 2020 by the Ministry of Labour and Employment to the Industrial Relations Code, 2020, also provides for the successful maintenance of these partnerships.
Applicability of the Industrial Disputes Act, 1947
This Act of 1947 is applicable across the whole of India to every industrial institution engaged in any kind of business, production, or distribution of products and services, etc., regardless of the number of workers employed. Every worker who is either a contractual labourer, apprentice, or part-time worker or a worker who does any kind of manual, clerical, skilled, unskilled, technical, operational, or supervisory work is covered under this Act.
This Act, however, does not apply to persons primarily in a managerial or administrative capacity or to those who are in a supervisory capacity or performing managerial functions; it also does not apply in the instances where Army Act, 1950, Air Force Act, 1950, and the Navy Act, 1957 apply, as well as to those in the police service or officers or employees of a prison.
Who is considered a “workman” under the Act
An industrial dispute can be raised by either a “workman” or an “employer.” The idea of a “workman” is important to the concept of an industrial dispute. Since the Industrial Disputes Act of 1947 is a useful piece of legislation, the courts have expanded its scope and applicability by giving a broad meaning to the term “worker.”
A “workman” is defined in Section 2(s) of the Industrial Disputes Act, 1947 as any person, including an apprentice, who might be employed in any industry to do any type of manual, unskilled, skilled, technical, operational, clerical, or supervisory work for hire or reward, whether the terms of employment are express or implied, and includes any such person who has been dismissed, discharged, or retrenched in connection with, or as a result of, a dispute. It excludes all members of the army, navy, air force, or police, as well as those primarily employed in management or administrative, supervisory capacities, and those earning more than INR 6500 per month.
The Supreme Court of India ruled in Reserve Bank of India and Others v. C.N. Sahasranaman and Others (1986) that the employees are completely covered by the definition of the term “workman,” which is given in Section 2(s) of the Industrial Disputes Act.
In the case of Ved Prakash Gupta v. M/s Delton Cable India (P) Ltd (1984), it was decided that a person hired in a management or administrative position is not considered a worker.
The courts have gone through this definition many times, and with its various interpretations, they have determined some elements that would help in deciding whether a person is a “workman” or not. Some of the components are as follows:
- Whether or not a master-servant relationship exists.
It was held in the case of Chintaman Rao v. State of Madhya Pradesh (1958) that there must be the existence of a contractual relationship between a master and servant, i.e., the workman must be under his master’s supervision, direction, and control.
- When an individual performs a number of functions that share characteristics with other functions, the nature of the primary function for which the claimant is engaged should be considered in determining whether the person is a worker or not.
In the case of John Joseph Khokar v. Bhadange B. S. and Ors. (1997), it was held that while determining whether a person is a workman or not, the court must always try to look at the main or major work for which that person is hired. The designation of the individual or any connected work cannot exempt the individual from the provisions of the Act.
- Work is either manual, skilled, unskilled, technical operational, clerical, or supervisory in nature; simply because it does not fall within the exception does not make a person a workman.
- Manual and operational labour, both skilled and unskilled.
The courts have not clarified who is regarded as being engaged in “manual and operational work.” Manual or operational jobs may be described as requiring no particular skills. It is commonly associated with manual labour. The courts have made an exemption for works that need an imaginative or creative component. A work that necessitates training implies that the job is of a unique type and needs a specific mental application. It is not classified as a manual, clerical, operational, or technical job. In a few situations, however, the courts have diverted from the strict interpretation and excluded supplementary creative activities while assessing the term “workman”, for example, when an individual is hired on a contractual basis to provide specialised services, and the contract specifically states that they are not an employee of the company.
A person who suggests strategies to boost sales is employing inventive thinking and so falls beyond the scope of this definition. A person carrying out such ideas by distributing pamphlets or participating in door-to-door publicity, on the other hand, will be classified as a “workman” under the Industrial Disputes Act.
In the case of Chandrasekhara Sharma v. C. Krishnaiah Chetty Jewellers Private Limited (2012), it was held that a salesman may use a number of strategies to persuade customers, but this would not constitute the application of creative or imaginative faculties, and such a salesperson, even if he goes through training to learn about the product, is not excluded from the description of a worker.
- Supervisory and managerial responsibilities
A person operating only in a management or supervisory position is not considered a worker under the Industrial Disputes Act. However, when a person performs many duties, the nature of the primary role must be reviewed to establish if the individual is a “workman.” A person’s classification is not conclusive in determining the type of activity.
In the case of Delta Jute and Industries Ltd. Staff Association and Ors. v. State of West Bengal and Ors (2015), it was held that the burden is on the employer to prove that the individual identified as a supervisor truly holds the position of a supervisor.
What is considered an industrial dispute
According to Section 2(k) of the Industrial Disputes Act, 1947, if any conflict or differences arise between employers and employers, between employers and workers, or between workmen and workmen that are associated with any person’s employment or non-employment or related to terms of employment or with the working conditions of the employee, it is referred to as an “industrial dispute.”
Parties involved in the conflict may be:
- Employers and employees;
- Employers and employers;
- Workers and workers.
There should be a point of contention and not just a mere difference of opinion in order to constitute a dispute. It must be endorsed in writing by the union at the beginning of the dispute. Subsequent endorsements will not validate the reference. As a result, the date when the conflict was argued is very important. It impacts the interests of not just one worker but multiple workers as a class who work in an industrial enterprise. The debate might be about any worker or workers, or about any other individual in whom they have an interest as a group.
In Jadhav J. H. v. M/s. Forbes Gokak Ltd (2005), it was held that a dispute involving a single worker can be considered as an industrial dispute if the dispute is supported by the union or a group of workers, regardless of whether the union supporting the worker’s cause is not the majority of the union.
What is considered an individual dispute
An individual dispute is one that is raised by a single employee only. If we want to consider an industrial dispute, a disagreement must be raised by a registered trade union. Individual disputes become collective industrial disputes when community interests are added to them or when they are backed by workers themselves or their union or federation on their behalf.
Section 9C of the Industrial Disputes Act, 1947 deals with the creation of grievance redressal bodies and the transfer of certain individual disputes to such bodies. According to this Section, if a company has 50 or more workers, they need to set up a group of people to help solve problems between the company and individual workers. This group is called a Grievance Settlement Authority, and they follow certain rules made by the government. The goal is to solve any disagreements or arguments between individual workers and the company in a fair and just manner.
What are the underlying causes of industrial dispute
Industrial disputes develop as a result of workers’ entitlement to collective bargaining. In order to qualify as an industrial dispute, it is necessary that there be a demand made by workers or employees about employment or non-employment that is refused by the person to whom the demand is made, resulting in the disagreement between them.
In the case of Sindhu Resettlement Corporation Ltd. v. Industrial Tribunal (1967), the Supreme Court held that if the workmen do not have any kind of disagreement with the management, then every request they make to the government is seen as merely a demand. A simple demand to the government without a conflict with the management cannot become a labour dispute.
The expression “industrial dispute” has been extensively defined in the case of Workmen employed by Hindustan Lever Ltd v. Workmen of Hindustan Lever Ltd. (1984), and according to this case, any disagreement or conflict that may arise between an employer and its workers is included under this term. Hence, regardless of the nature of the conflict, it cannot be barred from being classified as an industrial dispute.
The court held in Shambu Nath Goyal v. Bank of Baroda (1983) that even if the demand was not previously made before the management and rejected by them but was brought during referral or conciliation processes, the disagreement may be referred to as an “industrial dispute.”
The reasons for dispute can be economic grounds such as unhappiness with remuneration such as earnings, promotions, bonuses, allowances, and other perks, or working circumstances such as working hours, leave, and holidays without pay, unfair layoffs and retrenchments, dismissal disputes, and so on.
There can be non-economic issues as well that could cause disputes, such as worker victimisation, ill-treatment by coworkers, sympathy strikes, political considerations, indiscipline, and so on. Non-economic causes of industrial disputes can be classified as psychological causes, which include personality clashes, worker demands for self-respect and recognition, the nature of administration, etc. There are some institutional causes too, such as non-recognition and non-registration of trade unions, issues with collective bargaining, unfair trade and other practices, etc., and the denial of workers’ legal and other rights.
When an individual dispute becomes an industrial dispute
To declare an individual conflict as an industrial dispute, the following elements must be met:
- A body of labourers, trade unions, or a significant number of workmen must be proven to have made common cause with the individual workmen.
In the case of Newspaper Ltd., Allahabad v. UP State Industrial Tribunal (1960), it was decided that when a group of workers, either through their union or otherwise, sponsored a worker’s complaint, it became an industrial dispute, provided, however, that the assistance or sponsorship gained must come from the employees of the employer being sued.
The Bombay Union of Journalists, of which the Workers Union was a member, initiated a workers’ dispute in the case of Bombay Union of Journalists v. The Hindu, (1961). In this case, the Bombay Journalists Union represented all personnel in the Bombay journalism sector, rather than just one job. The Supreme Court ruled that the dispute was personal rather than industrial.
- Another criteria for considering an individual dispute as an industrial dispute is that it was taken up or sponsored by the workers as a body of trade union or by a huge proportion of them prior to the date of reference. The Indian Express journalists had no union in the case of Workmen of Indian Express Newspapers Ltd. v. Management Indian Express Newspapers, (1968), thus their issue was taken up by the Delhi Union of Journalists, an external union. That union represented just a small percentage of the Indian Express’s working journalists. The Delhi Union of Journalists was found to have a representative character by the court in this case. This is because the journalists worked with the Indian Express, and the debate escalated into an industrial dispute.
Thus, for an individual dispute to be considered an industrial dispute, it must be supported by the trade union of the workers, or if there is no trade union, by the majority of the workers, or it must meet the conditions of Section 2A of the Industrial Disputes Act, 1947.
According to Section 2A of the Industrial Disputes Act, 1947, if an employer terminates the services of an employee, including by discharging, dismissing, or retrenching them, due to a dispute or differences between the worker and their employer, the resulting disputes will be termed as an industrial dispute. In such a situation, whether any other worker or any union of workers is a party to the dispute or not doesn’t matter.
After three months have passed since an application was filed with the conciliation officer, any worker may make an application directly to the labour court or an industrial tribunal for determination of such a dispute. The appropriate government has the power to appoint any number of persons as it thinks fit to be conciliation officers. Powers of mediating and promoting the settlement of industrial disputes are present. A conciliation officer can be appointed for a specified region, for some specific industries in a specified area, or for one or more specified industries. The government has the power to appoint these officers either permanently or for a limited period of time. This process is present to avoid unnecessary delay in the dispute resolution process. However, the application must be submitted within three years after the date of dismissal, discharge, retrenchment, or termination of employment.
The court will then move forward to proceed with the case as if it had been referred to it under Section 10 of the Industrial Disputes Act, 1947.
In the case of Express Newspapers (Private) Ltd. v. First Labour Court, West Bengal and Others (1958), it was held that a dispute is said to be an industrial dispute even if it is supported by an unregistered union, but the trade union is required to be related to the employer or the industry in question.
Any delay in filing an industrial dispute does not necessarily prevent it from being heard in the court. In the case of Guest, Keen, Williams Pvt. Ltd., Calcutta v. P.J. Sterling (1959), the Supreme Court stated that if a dispute arises after a significant delay that is not reasonably explained, the tribunal would definitely take this fact into account when dealing with the merits of the dispute.
How an individual worker may file an industrial dispute
There are some ways in which individual workers may file an industrial dispute:
Through trade union
Sections 15 to 28 of the Trade Unions Act, 1926 provide the rights and duties of registered trade unions. A trade union is allowed to make submissions on behalf of an employee or individual dispute if the employee grants written authorization to that union to represent him or her. With that kind of authority, a trade union gets the power to make submissions before any consolation officer, industrial court, or labour court. A recognised trade union is a legal body that can also sue the employer or anyone else if necessary. The union may plead under its own name or on behalf of its members before any labour court, authority, or court.
Through the labour courts
Industrial disputes can be resolved through labour courts as well. One or more labour courts may be established by the competent authorities. The role of these labour courts is to resolve industrial disputes involving any of the items listed in the second schedule.
According to Section 10(1)(c) of the Industrial Disputes Act, 1947, as per the subjects stated in the Third Schedule, disputes that involve a number of workers up to 100 can be addressed by the labour court. According to Section 10(2), if any party to an industrial dispute seeks the government’s permission to refer the disagreement to the labour courts, if the government is satisfied, then only they can submit that referral to the labour courts. As per Section 10(6) of the Industrial Disputes Act, 1947, no labour court or tribunal shall have jurisdiction to hear any case before the National Tribunal.
Through the grievance settlement authorities
Under Section 9(c) of the Industrial Dispute Act, 1947, the employer is under a duty to provide grievance settlement authority as per the regulations established in that name under this Act in respect of each industrial establishment employing or having employed fifty or more workers on any day during the preceding twelve months.
Each company or industrial establishment that employs twenty or more people must have one or more grievance resolution committees to settle conflicts originating from individual grievances. The grievance redress committee may conclude its proceedings within 45 days after receiving a written request from or on behalf of the aggrieved party.
The employee who is dissatisfied with the grievance redressal committee’s decision may file an appeal with the employer, and the employer must dispose of the decision within one month of receiving the appeal.
Kinds of disputes that are not subject to the Industrial Disputes Act, 1947
Section 2(j) of the Industrial Dispute Act, 1947 defines industry, which was later expanded upon by the Supreme Court of India in the case of Bangalore Water Supply and Sewerage Board v. R. Rajappa (1978). The phrase “industry” has been broadened under this case, and this ruling overturned numerous previous judgements. The court decided:
Any activity will be classified as industry provided it meets the ‘triple test,’ which is as follows:
- Activity that is systematic and organised;
- Activity that is done through the cooperation of employers and employers;
- Activities in which whether or not capital has been invested in the production and delivery of goods and services.
These are the basic tests that cover the activities covered by the industries. Some pointers to remember are as follows:
- It makes no difference whether or not there is a motive for profit or capital.
- If an organisation is a trade or company, it does not cease to be one because of any philanthropic acts done by it, animating the triple test; hence, it cannot be excused from the scope of the concept of industry under the meaning we are referring to here.
- The dominant nature test means if there is a complex of activities going on, then the dominating nature of services and the integrated nature of departments would be the test. Any departments that are connected with the industry would also be considered an industry.
Types of disputes that are not entertained under the Industrial Disputes Act, 1947 are:
- Casual activities are not covered under the Act because they are not systematic.
- Small clubs, co-operatives, research labs, and gurukuls are mostly of a non-employee nature, so they are also not entertained under the Industrial Disputes Act.
- A single-door lawyer who seeks assistance from a clerk, but in this case there is no organised labour and hence not covered under the Act.
- There are many volunteers who do selfless humanitarian acts such as providing free legal or medical services, which are not covered under the act.
- There are many sovereign functions that are precisely defined as maintaining law and order, legislative functions, and judicial functions.
Charitable organisations are classified into three types:
- Organisations that generate revenues but are not used for charitable purposes.
- Organisations that earn no profit but engage workers like in any other business, but the goods or services that are produced in the process are provided at a cheap or no cost to the impoverished poor.
- Organisations that are centred on a humane goal are carried out by men who do labour not with the motive to get paid, but because they share a love for the cause and receive job pleasure.
The first two categories (A and B) as mentioned above are industries, but category C is not an industry, because they entail collaboration between employers and employees.
In National Union of Commercial Workers v. M.R. Meher (1962), it was determined that a solicitor’s firm is not an industry, even if it is formed as an industrial concern.
The major activity of the hospital in the case of Dhanrajgirji Hospital v. The Workmen (1975) was imparting nursing training, and the beds in the hospital were designed for their practical training. It was ruled in this case that it was not an industry since it did not engage in any type of economic activity resembling commerce or business.
So it can be concluded that there is no distinction between an industrial dispute and an individual dispute. Industrial conflicts will encompass all disagreements, whether they are presented individually or collectively.
However, according to Section 2A of the Industrial Disputes Act, 1947, not all conflicts must be addressed by an industrial tribunal. It is only when a disagreement involves a discharged, fired, retrenched, or terminated worker that it is considered an industrial dispute. As a result, for issues pertaining to bonuses, gratuities, and other interest issues, only a collective dispute will become an industrial dispute if it was simply an individual dispute and was taken up by the union or a considerable body of workers.
In this context, collective bargaining does not imply that the disagreement must be supported by a recognised union or that all or a majority of the workers in an industrial facility must be parties to it.
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