Introduction to Industrial Disputes
The Industrial Disputes Act was enacted with the main object to provide machinery for the investigation and settlement of disputes arising between the employer and workmen working in an “industry” as defined in the Act. Therefore, the definition of “industrial dispute” has special significance.
Meaning of Industrial Dispute under Section 2(k)
Sec. 2(k) defines ‘Industrial Dispute’ as: “Any dispute or difference between employers and employees or between employers and workmen or between workmen and workmen which is connected with the employment or non-employment or the terms of employment or with the conditions of labour of any person.”
The definition is comprehensive and wide enough to include all disputes or differences between employers and employees, or between employees and employers, or between employees and employees, regarding employment and non-employment, or terms of employment or conditions of labour of a person.
Essential Components of an Industrial Dispute
The definition of industrial dispute is in three parts:
(a) Factum or a real and substantial dispute – There should be a dispute or difference.
(b) Parties to the dispute – The dispute should be between employers and employers, or between employers and workmen, or between workmen and workmen.
(c) Subject matter of the dispute – The dispute must be connected with the employment or non-employment or the terms of employment or with the conditions of labour of any person. The expression ‘any person’ means that the person may not be a ‘workman but he may be someone in whose employment, terms of employment or conditions of labour the workmen as a class have a true and substantial interest.
The term ‘industrial dispute’ connotes a real and substantial difference, having some element of persistency and continuity till resolved and not likely, if not adjusted, to endanger the industrial peace of the undertaking or the community [Shambhunath v Bank of Baroda AIR 1978 SC 1088]. The ‘collective bargaining’ ideal is implicit in the definition of ‘industrial dispute’.
Any difference between the employer and employees that gives rise to the occasion to move the machinery for resolving the difference is covered by the definition of industrial dispute. The justification or otherwise of the controversy is a secondary consideration, as the difference may arise when a demand is made that may not be considered justified or may be considered wholly unjustified by the employer. Nevertheless, the machinery is put into action to resolve the controversy [Safdarjang Hospital v K.S. Sethi AIR 1970 SC 1407].
Requirements for a Valid Industrial Dispute
For a dispute to be an industrial dispute, a demand must first be raised to management and rejected by it. Where the demand is raised for the first time before the Conciliation Officer, and he in turn communicated to the management, which rejected the same was held not sufficient to constitute an industrial dispute within the meaning of the Act [Fedders Llyod Corpn. Ltd v Lt. Governor, Delhi AIR 1970 Del 60]. Written demand is not necessary for bringing into existence an ‘industrial dispute’.
Role of Trade Unions in Industrial Disputes
The union, which collectively represents the interests of employees, is also definitely interested in their conditions of service. Thus, refusal to participate by any individual employee who is the holder of a post does not bring any discredit to the industrial dispute [Dimak Mazdoor Sangh Ltd. v State of Maharashtra, 1992 LIC 1091]. The dispute should relate to a running concern or industry and ceases to be a dispute if the industry is closed down on the date when the cause of action arises; disputes do not cease to be disputes on the death of the workman concerned. The question in each case depends on the nature and character of the dispute.
The Industrial Disputes Act does not require that a dispute, to be an “industrial dispute”, should be raised by a recognized union or a majority union. The only requirement of an industrial dispute is that there is a dispute between the employer on one side and the workmen on the other side. Accordingly, the sponsoring union doesn’t need to be a registered trade union or a recognized trade union [Bharat Sanchar Nigam Ltd v Industrial Tribunal, 2000 LLR 742 (Ker.)].
Where the Union, which took up the cause of the dismissed workmen itself came into existence after the date of dismissal and the dismissed workmen joined the union thereafter, it would be a valid dispute [Jamadoba Colliery of Tata Iron & Steel Co. v Workmen (1972) 2 LLJ 663]. Even if, with the company, the dispute regarding the workman’s dismissal, held, did not cease to be an industrial dispute [Employ Ltd v Workmen (1972) 3 SCC 806].
Industrial disputes will subsist in spite of the closure or takeover of the industry. Where the dispute is over a claim to benefit by way of a bonus for work done in the past, it would be the duty of the tribunal to complete the adjudication and make the award [U.P. Electric Supply Co. Ltd v Workmen (1971) 3 SCC 495].
What is Not an Industrial Dispute
The following disputes also have been held not to be industrial disputes disputes in respect of bonafide and genuine closure of business or lockout [Express Newspaper (P) Ltd. v The Workmen AIR 1963 SC 569], and dispute in respect of non-implementation of award and claim for compensation payable by workmen to the employer for loss caused by strike. However, when closure is a pretence or lock-out is in the disguise of closure, there is an industrial dispute.
Subject Matter of Industrial Dispute
The industrial dispute may relate to wages, bonus, dearness allowance, etc., or to any matter connected with the terms and conditions of employment of the workers or on some general questions on which each group is bound together by a community of interest [D.N. Banerji v P.R. Mukherjee AIR 1953 SC 58]. Any dispute connected with employment or non-employment would ordinarily cover all matters that require settlement between workmen and employers whether the matters concern the cause of their being out of service or any other question and it would also include within its scope the relief likely for bringing about harmonious relations between the employers and workers [Western India Automobile Association v Industrial Tribunal (1949) LLJ 245].
All disputes relating to the matters specified in Schedules I and II shall constitute ‘industrial dispute’. These are:
(i) The propriety or legality of an order passed by an employer under the Standing Orders; the application and interpretation of the Standing Orders. Shift working otherwise than under standing orders.
(ii) Discharge or dismissal of workmen, including reinstatement or grant of relief to workmen wrongfully dismissed.
(iii) Withdrawal of any customary concession or privilege.
(iv) Wages, including the period and mode of payment.
(v) Compensatory and other allowances (e.g., house rent allowance).
(vi) Bonus, profit sharing, provident fund, and gratuity.
(vii) Hours of work and rest intervals.
(viii) Leaves with wages and holidays.
(ix) Classification by grades.
(x) Rules of discipline.
(xi) Rationalisation.
(xii) Illegality or otherwise of a strike or lock-out.
(xiii) Retrenchment of workmen and closure of the establishment.
Judicial Recognition of Various Industrial Disputes
Further, the following disputes have been held to be “industrial disputes”:
(i) Allegation of wrongful termination of services.
(ii) Claim for reinstatement of dismissed workmen [C.P. Transport Services Ltd v Patwardhan AIR 1957 SC 104].
(iii) Claim for compensation for wrongful dismissal.
(iv) Compulsory retirement of the employee.
(v) Dispute connected with minimum wages.
(vi) Dispute regarding payments to be made under the Production Bonus Scheme.
(vii) Demand of an employee relating to his confirmation on a post holding in an acting capacity [Workmen of Hindustan Lever Ltd. v Hindustan Lever Ltd. (1984) II LLJ 391 (SC)]. It may be noted here that even a casual or temporary labourer is a ‘workman’.
(viii) Dispute relating to the age of superannuation.
(ix) Dispute about the reason for the stoppage of work [Management of Radio Foundation Engg. v State of Bihar AIR 1970 Pat 265].
Dispute Relating to Workmen Employed by the Contractor
In Standard Vacuum Refining Co. v Their Workmen (1960) 2 LLJ 233 (SC), the company used to give the annual contract for the maintenance of the plant and premises. The contractor’s men were not entitled to any privileges, and there was no security of employment. The workmen raised an industrial dispute demanding the abolition of the contract system. The Supreme Court held the dispute to be an industrial dispute because there was a real and substantial dispute between the company and the workmen on the question of employment of contract labour for the work of the company. The fact that the workmen were employed by the contractor would not alter the nature of the dispute so long as the party raising the dispute has a direct interest in the subject matter of the dispute.
The dispute in this case is that the company should employ the workman directly and not through contractors in carrying on the work, and this dispute is undoubtedly real and substantial, even though the regular workmen (i.e., the respondents) who have raised it were not employed on contract labour. How the work of the company should be carried on is certainly a matter of some importance to the workmen. It was held that the company should abolish the contract system and engage regular workmen, and in so doing, it was to give preference to the workmen employed by the contractor.
The Court observed: Whenever a dispute is raised by workmen with the employment of contract labour by an employer, it would be necessary for the Tribunal to examine the merits of the dispute apart from the general consideration that contract labour should not be encouraged, and that in a given case the decision should not be based merely on theoretical or abstract objections to contract labour but on the terms and conditions on which contract labour is employed and the grievance made by the employees in respect thereof.
Conditions for Abolition of Contract Labour
Where the labour engaged by the contractor was deprived of legal facilities enjoyed by other workers under the statute, it was held that the employment of contract labour was an unfair labour practice [Shibu Metal Works v Workmen (1966) 1 LLJ 717]. Industrial Tribunal can order abolition of contract labour if the facts justify [National Iron & Steel Co. Ltd. v State of W.B. AIR 1967 SC 1206].
In K.K. Thilakam v FACT Ltd. [(1992) 2 LLJ 782 (Ker)], the petitioners were employed by the contractor in connection with the work of a company. After about 10 years of service, they claimed to be absorbed in service under the company. It was held that they were never the workmen of the company but were only now seeking employment. An industrial dispute cannot exist between an employer and a person seeking employment.
Dispute Must be Real and Definite
The dispute or difference must be something fairly definite and of real substance, and not a mere personal quarrel or a grumbling in agitation. The term “industrial dispute” connotes a real and substantial difference involving some element of persistency and, if not adjusted, to endanger the industrial peace of the community. The expression “dispute or difference” is not intended to include mere theoretical, abstract, or philosophical controversies between employers and employees. Thus, a workman may have ideological differences with employers, a workman may feel sympathetic for an employee, a workman may feel seriously agitated about the conditions of labour generally, etc. These are not industrial disputes. If the dispute is indefinite or vague, it might disqualify itself as an “industrial dispute “because of its disqualification [J.T. Stratford & Son Ltd. v Lindley (1965) 3 All ER 102]. Also read this article: Trade Union Registration in India: Legal Framework, Procedures & Key Benefits.
Examples of Disputes Not Considered Industrial Disputes
The dispute must be a real one and a genuine one. The mere pretext, or spacious cover, of an apprehended dispute will not do. Further, it must also be a grievance felt by workmen whom the employer is in a position to remedy or set right. An alleged assault of a workman by an outsider is not an industrial dispute.
Where privilege given to an office-bearer of a trade union in the form of duty relief is withdrawn by the management that has granted the privilege, it cannot be said that an industrial dispute has arisen thereby. The legal status of the duty relief is only that of a concession and not a matter about conditions of service [Workmen of Indian Bank v Management of Indian Bank (1985) 1 LLJ 6 (Mad.)]. The employer’s failure to keep his verbal assurance did not amount to an industrial dispute (Express Newspaper case).
There can be no nexus or interest between the workmen and the vacancies resulting from the resignation/retirement of the employees under the management. The dispute raised by the workmen relating to filling up of such vacancies is not an industrial dispute. The Act has used the expression “any person” and not “any post,” and the workmen could not fight a battle for those non-existent persons who might or might not be appointed to the vacant posts.
Similarly, the dispute regarding the refusal to employ the persons who were promised to be employed is not connected with the employment or non-employment or the terms of employment within the meaning of Sec. 2(k). “Non-employment or employment or refusal to employ” is different from not implementing the agreement for future employment. Except proof of entitlement or memorandum of settlement or provision in the certified standing orders, disputes regarding promise to employ persons or disregarding promise to give employment are not connected with employment and not an industrial dispute within the meaning of Sec. 2(k)” [Workmen of Nilgiri Corpn. Mktg. Society v State of T.N. (2004) 3 SCC 514.
A “recognition dispute” is an industrial dispute. If the management refuses to recognize the union i.e., refuses to recognize the union as a bargaining agent of its employees, such a dispute will amount to an industrial dispute [Beetham v Trinidad Cement Ltd. (1960) 1 All ER 274].
A dispute relating to a pensioner is not an industrial dispute, as he is not in the same category as a dismissed or retrenched workman. However, the pension can be the subject matter of an industrial dispute.
Community of Interest: Essential for Industrial Disputes
For an industrial dispute, there must exist some community of interest. Normally, workmen will not raise a dispute in which they are not directly or substantially interested. Only a collective dispute could constitute an industrial dispute.
Nature of Industrial Dispute and Collective Interest
“The very nature of an ‘industrial dispute’ is to obtain new industrial conditions, not merely for the specific individuals then working for the specific individuals then employing them, and not for the moment.
only, but for the class of employees from the class of employment. In such a case, the battle is fought by the claimants, not for themselves, but for others.
George Hudson Ltd. v Australian Timber Workers’ Union, 32 CLR 413.
If the dispute is collective, the party to the dispute must have either a direct interest in the subject matter of the dispute or a substantial interest therein in the sense that the subject matter of the dispute affects or is substantially affected thereby. It is only when the interest of the class as a whole — class of employees or class of workmen — which furnishes the real nexus between the dispute and the parties to the dispute.
In a case where the party to the dispute is composed of aggrieved workmen themselves and the subject matter of dispute relates to them, or any of them, they have a direct interest in the dispute. Where, however, the party to the dispute is also composed of or represents the cause of another person whose employment or non-employment, etc., may prejudicially affect their interest, the workmen are said to have a community interest in the subject matter of dispute. In both cases, the dispute is an industrial dispute.
The above-mentioned test of ‘direct and substantial interest’ was laid down in N.K. Sen v Labour Appellate Tribunal (1953) 1 LLJ (Bom), and was approved by the Supreme Court in the case discussed below:
LEADING CASE: WORKMEN OF DIMAKUCHI TEA ESTATE v DIMAKUCHI TEA ESTATE – [(1958) 1 LLJ 500 (SC)]
[Workmen can raise a dispute in respect of those persons only in the employment or non-employment or the terms of the employment or the conditions of labour, of whom. They have direct or substantial interest. The expression ‘any person’ can only be a person in whom the workers have a direct and substantial interest, i.e., a community of interest.
Thus, dispute need not be in respect of a workman, but a community of interest in the workman is necessary for the dispute to become an industrial dispute.]
In this case, one Dr. Banerjee was appointed by the respondents as their Assistant Medical Officer, on three months’ probation. After three months, his services were terminated, with one month’s salary instead of notice, on the ground of incompetency. On behalf of his cause by the Assam Karamchari Sangh, the Government of Assam referred the dispute regarding his reinstatement. The Tribunal accepted the plea of the management that the Medical Officer was not a “workman” and hence the Tribunal had no jurisdiction to adjudicate the dispute.
Facts and Arguments
Before the Supreme Court, the workmen raised the plea that a dispute concerning a person who is not a workman could be an industrial dispute. The learned counsel for the workmen submitted that the expression ‘any person’ occurring in the last part of the definition of ‘industrial dispute’ [Sec. 2(k)] is an expression of very wide import, and there are no reasons why the words ‘any person’ should be equated with ‘any workman.’ The argument is that since the dispute or difference between the employer and the workmen is connected with the non-employment of a person called Dr. Banerjee (even though he was not a workman), the dispute is an industrial dispute within the meaning of Sec 2(k) of the Act.
The Supreme Court, however, observed that the expression ‘any person’ cannot mean anybody and everybody in this wide world. Otherwise, it would be open to the workmen not only to raise a dispute about the terms of employment of persons employed in the same industry as themselves, not only to raise a dispute about the terms of employment in corresponding or similar industries, but also raise a dispute about the terms of employment of persons employed in our country, but terms of employment of any workman or any labourer anywhere in the world. [Chagla, C.J. in N.K. Sen v Labour Appellate Tribunal (1953) 55 Bom LR 125.]
The Supreme Court held as follows:
(i) Having regard to the scheme and objects of the Act, and its other provisions, the expression ‘any person’ in Sec 2(k) must be read subject to such limitations and qualifications as arise from the context.
(ii) One such crucial limitation is: the dispute must be real and substantial, in the sense of one party being in a position to give relief to the other. ‘Any person’, therefore, cannot mean a person for whom the employer is in no position to give any relief.
(iii) It is well settled that the words of the statute, when there are doubts about their meaning are to be understood in the sense in which they best harmonise with the subject of the enactment and the object which the legislature has in view.
The principle of solidarity of the labour movement or general welfare of labour must be based on or correlated to the principle of community of interest. Thus, the same limitation is that the workmen can raise a dispute in respect of those persons only in the employment or non-employment or the terms of the employment or the conditions of labour, of whom they have direct or substantial interest.
Such a person need not be strictly speaking, a “workman” within the meaning of the Act, but must be one in whose employment, non-employment, terms of employment, or conditions of labour the workmen as a class have a direct or substantial interest.
(v) Thus, ‘any person’ can only be a person in whom the workers have a direct and substantial interest, i.e., a community of interest. A community of interest cannot exist unless the person is a past or present employee.
(v) Ordinarily, it is only the aggrieved party who can raise a dispute; but an ‘industrial dispute’ can be on a collective basis, because it is now settled that an industrial dispute, not espoused by the workmen, i.e. the class to which the aggrieved party belongs, is not an ‘industrial dispute’ within the meaning of Sec. 2(k).
The court held that Dr. Banerjee was not a ‘workman’. He belonged to the medical or technical staff – a different category altogether from workmen. The appellants had no direct or substantial interest in his employment or non-employment, and even assuming that he was a member of the same Trade Union, it cannot be said that the dispute regarding his termination of service was an industrial dispute within the meaning of Sec 2(k) of the Act.
It may, however, be noted that today the decision on facts would be different due to the existence of the word ‘technical’ in the definition of ‘workman’. Today, a doctor is a workman. However, the ratio of this case still holds good.
Subsequent Cases on Community Interest in Industrial Disputes
In Workmen of Dahingeapara Tea Estate v Dahingeapara Tea Estate (AIR 1958 SC 1026), the Apex Court followed the Dimakuchi Tea Estate Case. In this case, a Tea Estate was sold to a buyer with an option whether or not to take the service of any existing staff. The buyer did not take into service 16 members of the clerical staff. The cause of these left-out members was taken up by the Union representing the workmen.
It was held that where the workmen of an industry, or a Union representing the workmen, raise a dispute against the employer, the persons regarding whose employment or non-employment the dispute is raised need not be ‘workmen’ within the meaning of the dispute. In the present case, the discharged workmen were concerned. Also, the workmen of the buyer.9 Even so, they were workmen of the seller but not ‘workmen of the buyer’. Even so, they were interested in the conditions of labour, the actual workmen of the Estate who had been taken by the buyer in his service were directly interested. Therefore, it was held to be an ‘industrial dispute’.
Workmen Can Raise Disputes for Others in Certain Conditions
“Workman” can raise a dispute that a class of employees not within the definition of ‘workman’ should be recruited by promotions from workmen. When they do so, the workmen raise a dispute about the terms of their own employment, though incidentally the terms of employment of those who are not workmen are involved [All India Reserve Bank Employees’ Association. v. Reserve Bank of India (1960) 1 SCR 25.
In Workmen v Greaves Cotton Ltd. (1971) 2 SCC 658, the issue was whether supervisors getting less than Rs. 500 per month on the crucial date namely the date of reference can raise a dispute regarding wages which take them beyond Rs. 500 [and thus out of the definition of ‘workmen’ in Sec. 2(s)]. The Apex Court observed: “In our opinion, the Tribunal has jurisdiction to consider revision of wage scales, dearness allowance and other emoluments so long as there is a category of workmen who are employed in a supervisory capacity with the wage structure which take them beyond Rs. 500 that by itself do not preclude its jurisdiction to determine what is the proper wage scale for that class or category of workmen…What has to be seen is whether on the date of the reference, there was any dispute in respect of workmen which could be referred under the Act to the Tribunal.”
The Court further observed that “as long as there are persons in the category of workmen in respect of whom a dispute has been referred, it cannot be said that the Tribunal has no jurisdiction, even though they might become non-workmen during the pendency of the dispute.” In other words, at the time of adjudication, there should at least be some persons in the category who are workmen.
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