This article has been written by Raksha Yadav, studying BBA.LL.B and pursuing a Diploma in General Corporate Practices: Transactions, Governance, and Disputes from LawSikho. This article provides deep knowledge of the most important aspect of labour laws, i.e., unfair labour practices in India, applicable provisions and some landmark judgments of the Appellate Courts.

This article has been published by Sneha Mahawar


Workers are the most important asset for the economic growth and development of every country. They contribute to the production and manufacturing of goods and services, and in exchange, they receive wages as remuneration. An employer and employee together contribute to gaining revenue and profit, but here the question arises, is it so simple to work peacefully and enjoy the benefits? No, in every organisation, whether public or private, several disputes arise between the employer and employee, either about fair wages, working hours, or trade union demands. To ensure and prevent such disputes and for the welfare of labourers or workmen and their employers, the Industrial Disputes Act of 1947 came into force. The main objectives of the Act are to promote peace and welfare, create amicable relations between employers and labourers, settle industrial disputes, and prevent illegal strikes or unfair trade practices.

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Practices that can be considered unfair labour practices 

Before the enactment of labour legislation, workmen and labourers were dominated by employers, but gradually labour welfare provisions were introduced, such as the Trade Union Act of 1926, the Factories Act of 1948, and the Minimum Wages Act of 1948, which gave recognition to the rights of labourers and protected them from exploitation and unfair labour practices.

In simple terms, unfair labour practices are deceitful practices by either employers or labourers to obtain profits that are prohibited by the statutes. Unfair labour practices are defined under the Fifth Schedule, Section 2(ra) of the Industrial Dispute Act, 1947, which was added after the Industrial Disputes (Amendment) Act, 1982. The Fifth Schedule of the Act listed certain practices which amount to unfair labour practices, and Sections 25-T and 25-U  laid down the provisions for the same.

Section 25-T deals with prohibited unfair labour practices. It states that an employer or worker can not engage in such activities which are against the welfare and peace of the employers and labourers as well. This Section also includes registering and unregistering trade unions. Section 25-U provides a penalty of imprisonment, fine, or both for unfair trade practices.

Unfair labour practices by the employer

As per the Industrial Dispute Act, 1947, unfair labour practices can be done by employers and trade unions as well. The Fifth Schedule has mentioned the activities which amount to unfair labour practices. The practices which are prohibited by employers are the following:

  1. The employer can not prohibit their employees from joining or establishing any trade union or can not interfere in their work.
  2. If an employee joins a union, the employer is not permitted to harass or control them.
  3. The employer can not bully an employee for being a part of legal lock-outs or strikes.
  4. Imposing any penalty or giving threats to dismiss them from the services.
  5. No discrimination or partiality for their workmen’s trade union.
  6. Create workmen’s trade unions supported by employers.
  7. Refuse to promote a worker because they supported unions.
  8. Promoting ineligible workers instead of eligible workers.
  9. Firing any employee on false allegations, and little technical mistakes made by the workers.
  10. Assigning work to contractors instead of workmen.
  11. Maliciously transferring workers.
  12. Appointing contract workers to cut down on the wages and compensation that permanent workers must receive.
  13. Appointment of new workmen when a legal strike is going on by the existing workmen.
  14. Refusing collective bargaining with trade unions.
  15. Not awarding the workmen for their work.
  16. Creating violence among the workmen.
  17. Discriminating against the employee who reported any false or illegal practice, discrimination, or any other practice against
  18. Paying fewer wages concerning the work assigned to workmen.
  19. Demotion of the workmen because they took part in trade union activities.
  20. Dismissing the workers who are members of any trade union.

Unfair labour practices by Trade Unions

Unfair labour practices are not only done by employers, trade unions also sometimes contribute to unfair labour practices. The Fifth Schedule of the Industrial Dispute Act mentions the following practices which are prohibited for trade unions:

  1. Promoting and supporting illegal strikes.
  2. Threatening the workers to join trade unions.
  3. Prohibiting any worker from entering the workplace who is not participating in illegal strikes.
  4. Using criminal force against workers who are not participating in strikes or lockouts that are not permitted as per the provisions of the legislation.
  5. Not aiming for workers’ welfare.
  6. Refusing collective bargaining as representatives of workmen.
  7. Entering the residence of the employers and damaging their personal property.
  8. Encourage the workers to demolish the industrial assets.
  9. Imposing illegal strikes such as going slow, or gherao(surrounding the employers to fulfil the demands of the workers).
  10. Threatening or harassing the workers who are going to work.

State legislations on unfair labour practices

In India, most of the labour legislations are enacted by the Central Government but apart from this, states have also introduced legislation that governs labour laws. Few state labour laws are :

Bombay Industrial Relations Act, 1946 

This Act came into force in April 1946 and was applied to the whole of Maharashtra.  It tries to govern the provisions and resolve conflicts between an employer and their employees. It regulates employer-employee relationships, provides for the resolution of labour disputes, and serves a few other purposes. It is necessary to make provisions for the regulation of employer-employee relationships in certain situations, to merge and update the legislation governing the resolution of labour disputes, as well as to make provisions for many other objectives.

The Madhya Pradesh Industrial Relations Act, 1960

This Act came into being in 1960. This Act states that an employer can not penalise any of his employees for participating in any trade union activities like strikes or lock-outs which are legal. The Act makes provisions for the settlement of industrial disputes and regulates the relations of employers and their workers in certain matters.

The Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 

This Act was passed in 1971 and came into force in September 1975. It was approved by the Indian government to regulate some businesses there to achieve the desired level of empathy between employees and employers. The objectives of this Act are to give recognition to-

  • The trade unions
  • Promote collective bargaining, and
  • Prevent unfair labour practices.

Legislation to prevent and punish unfair labour practices

The Industrial Dispute Act, of 1947 has the provision for the penalty for unfair labour practices under Section 25-U. Any employer or organisation who imposes such practices which are prohibited as per the Fifth Schedule of the Act shall be punished and fined as mentioned in the Section, i.e., six months’ imprisonment or a fine of one thousand rupees or both.

How to settle industrial disputes

Industrial disputes are conflicts between an employer and their workers or labourers and trade unions. The causes can be unfair wages, long working hours, unfair labour practices, improper government machinery, etc. In our country, the litigation process is very time-consuming and expensive. Rather than going to the courts to settle disputes, it is better to settle the dispute via alternative mechanisms. Industrial disputes can be settled through alternative mechanisms as well, which are as follows:

Collective bargaining or negotiation

It is an amicable way to settle the dispute. The parties mutually settle the dispute without the interference of the third party. The settlement of disputes through the collective bargaining process is the most acceptable procedure.

Collective bargaining means that all employees are represented in negotiations and contacts with management by the union, which has been elected as the authorised agent of the worker. The practice of collective bargaining is beneficial to both employees and employers. This ensures both the employees’ rights and the corporation’s essential interests are protected. From three different angles, collective bargaining has been analysed, i.e., as a method of social transformation; as a peace agreement between the parties engaged in combat; and as a framework for industrial law.

In the case of Karol Leather Karamchari Sangathan v. Liberty Footwear (1989), the Supreme Court stated that collective bargaining is the process to resolve disputes between employees and employers in an amicable manner.


Conciliation is an alternative dispute resolution mechanism. Parties can settle their disputes outside of court with the assistance of the conciliator. A conciliator is a neutral party in a dispute who assists the party in reaching a mutual decision. The conciliation process provides quicker and cheaper dispute resolution compared to regular court proceedings. A successful conciliation helps to build a strong relationship among the parties as this resolution safeguards the interests of both parties.

Section 4 and Section 5 of the Act provide provisions to appoint a conciliation officer to settle the industrial dispute. A conciliation officer is the third party who tries to settle the dispute in an amicable way within the board.

Voluntary arbitration 

Section 10-A of the Act states that parties can enter into an arbitration agreement to settle disputes. Arbitration is the process of settling disputes outside of court with the assistance of a third party who is known as an arbitrator. The arbitrator imposes an award that is binding on the parties.

In the case of Workmen Of Cement Industry v. Union Of India (1987), it was observed that voluntary arbitration is the mechanism to settle industrial disputes, which minimises industrial strikes and utilises the workers for the development of the economy of the country.


When disputes are not settled through the above-mentioned methods, they are referred to statutory bodies for settlement. Sections 7, 7-A, and 7-B of the Industrial Disputes Act provide the provisions for the establishment of a Labour Court, Industrial Tribunal, and Labour Tribunal.

Authorities under the Industrial Dispute Act, 1947 for dispute settlement

The Act came into force for labour welfare and aims to investigate, settle industrial disputes and prevent unfair labour practices. The following is the settlement machinery provided by the Act:

Work committees (Section 3)

The constitution of work committees is mentioned under Section 3 of the Act. It consists of the representatives of both the disputing parties. It aims to settle disputes and create an amicable environment for the workers. When 100 or more workers are currently engaged or have been employed on any given working day over the previous 12 months, the competent government may, by general or special order, require the employer to form a works committee under the authorised procedures. The representatives of the establishment’s employers and employees will make up the work committee. The work committee under  Section 3(2) of the Act has to maintain an amicable relationship between an employer and workmen, work for the interests of both employers and workmen, and take necessary steps to avoid industrial disputes.

Conciliation (Section 4)

It is the procedure to settle the dispute with the help of a third party known as a conciliation officer. The appropriate government appoints a person who is deemed fit for the role of conciliation officer as per the provisions of Section 4 of the Act. A conciliation officer may be appointed either temporary or permanent for any specific area or industry. A conciliation officer has the authority to enter into any premises to inquire about any industrial dispute, promoting industrial peace. It is an informal proceeding where the parties have the flexibility to decide the venue, time, and structure to resolve their disputes.

Conciliation Board (Section 5)

The appropriate government can appoint a board of conciliation through official notification in a gazette. The board consists of the chairman and two or four members. There must be equal members on the board. When a dispute arises, the board is appointed to settle it amicably. Section 13 of the Act provides the duties of the board. It can investigate the matter without any delay and settle the dispute fairly and amicably. When the dispute is settled, the board will send the report with the memorandum of settlement to the government; whereas, if the dispute is not settled, the board will send a report stating the causes and recommendations for the disputes.

Court of Inquiry (Section 6)  

According to Section 6 of the Act, the government may appoint a court of inquiry by its official notification to enquire into the matter and make a report on the inquiry within six months. It is borrowed from the British Industrial Courts Act, 1919. It consists of one or more independent persons. There can be one chairman. The main function of the Court of Inquiry is to investigate the matter and make a report on the dispute within six months from the date of the commencement of the inquiry.

Labour Court (Section 7) 

The appropriate government can constitute a labour court after being notified in its official gazette. A presiding officer is appointed by the government. A person who is appointed as the presiding officer must have at least one of the following qualifications:

  1. High Court judge;
  2. District or Additional District Judge for a minimum of three years;
  3. A person who is under the employment of judicial office for at least seven years;
  4. Any presiding officer under the State Act for a duration of a minimum of five years.
  5. Industrial Tribunal (Section 7-A(1)) 

One or more industrial tribunals are settled by the government to settle matters about industrial disputes. The appropriate government, by its official notification, may constitute one or more industrial tribunals for the settlement of the industrial dispute. It can be constituted for a specific time or for any specific case. It is also headed by the presiding officer.

National Tribunal (Section 7-B(1)) 

A national tribunal only entertains matters relating to national importance or if the industry is situated in different states. The Central Government constitutes one or more National Tribunals which have a composition of one presiding officer who must be a High Court judge.

Landmark judgments 

S.G. Chemical and Dyes Trading Employees’ Union v. S.G. Chemicals and Dyes Trading Limited and Another, 1986

In this case, the trade union filed a complaint against the company under Section 28 of the Maharashtra Recognition Trade Union and Prevention of Unfair Labour Practices Act, 1971. The company had given notice that it would close its office located at Churchgate, Bombay. It sent the notice to the Secretary of Maharashtra Industries and Labour Department, Bombay. The union raised a complaint against the notice as eighty-four employees had not received their wages. 

The Labour Court allowed this complaint as it found that the closure of the company was illegal and the termination of the services of the employees was an unfair labour practice. The company was ordered to compensate its employees. The workmen whose services were terminated due to illegal closure will continue their services in the company and are entitled to get their full salary and other benefits. 

Regional Manager, SBI v. Mahatma Mishra, 2006

The respondent was temporarily appointed in 1982 for 88 days, but his services were terminated before the tenure. In this case, the Labour Court found that it came under the ambit of unfair labour practice as the defendant was appointed on May 3, 1982, and terminated on September 3, 1982. Considering that he was hired on May 3, 1982, and that his employment was terminated on September 3, 1982, the Labour Court held that his termination was not casual, but rather one of a permanent nature. In addition, it was determined that the management had reported unfair labour practices.

The Labour Court also found that the respondent did not receive any written notice for the termination of his services; hence it was considered an illegal act under the Industrial Disputes Act, 1947.

General Labour Union (red flag) Bombay v. B.V. Chavan and others.,1984

In this case, the trade union filed two complaints against the company, alleging that they had imposed lockouts and unfair labour practices under the Industrial Dispute Act. After hearing the arguments advanced by both the parties, the Supreme Court found that the closure of the company was justified because it had been suffering losses for a long time, there was no hope to revive the business, it was not capable of continuing the industrial activities in the premises, and the employer had a bona fide intention of the closure of the company. Hence, the company has not committed any unfair labour practices; therefore, the complaints were dismissed.


One of the major labour welfare legislation is the Industrial Disputes Act, 1947, which deals with industrial peace and the welfare of labourers from any kind of exploitation. The Act prohibits unfair labour practices and also mentions the penalties for the same. The definition of unfair labour practices has not been mentioned in the Act but it provides what are the activities which constitute unfair labour practices. Trade unions and employers can both engage in unfair labour practices. Therefore, the labour tribunals are set up to entertain the appeals.

Frequently asked questions

What does the term “industrial dispute” mean?

Any argument or conflict between employers and employers, employers and workers, or workers and workers that has to do with a person’s employment or lack thereof, terms of employment, or working conditions.

What are the rights provided to labourers under the Indian Constitution?

The Indian Constitution provides every citizen of the country right to equality(Article 14), form an association or trade union (Article 19(1) (c)), a prohibition against forced labour (Article 23), right to adequate means of livelihood (Article 39(a)), equal pay for equal work (Article 39(d)), right to work (Article 41), just and fair working conditions(Article 42), living wages(Article 43).

“Equal pay for equal work” is mentioned under which provision of labour laws?

Section 4 of the Equal Remuneration Act, 1976 states that it is the duty of every employer to pay equal wages for similar kinds of work.

Is the conciliation officer’s decision binding on parties?

No, the conciliation officer does not have the power to make the parties adhere to his order. An officer only suggests solutions and tries to settle the dispute in a fair and amicable manner.


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