Report No. 122

Chapter II

Present Structure

2.1. In a power-ridden society divided into segments, one capable of exercising powerful authority over the other, conflict of interests would inevitably surface. It is inherent in the very texture of society. In an industrial society where means of production are privately controlled, maximisation of profit is the only desired end. This, to some extent, legitimises exploitation of those who are unequal in the matter of contracting with those who employ them. Let no one be beguiled that out of humanitarian consideration or in order to be fair and just, some rights were conferred on the labour force.

In fact, it is a trite saying that labour law such as the one that can be found in the Industrial Disputes Act, 1947, was not enacted as a measure of socio-economic justice but it was in fact a law and order measure. Where interests clash such as the employers' keenness to pay the least and labour's keenness for payment which can keep body and soul together, the clash of interests would lead to confrontation which, in turn, would lead to direct action impinging upon production. In the First Five year Plan, it was observed....

"Answer to class antagonism and world conflict will arrive soon if we succeed in discovering a sound basis for human relations in industry. Economic progress is also bound up with industrial peace. Industrial relations are, therefore, not a matter between the employers and employees alone but a vital concern of the community which may be expressed in measures for the protection of its larger interest.".1

1. First Five Year Plan Document, p. 572.

2.2. This realisation grew as a consequence of according high priority to economic development by laying down a strong infrastructure for industrialisation of the feudal Indian society. Till then, and especially commencing from the days of the Second World War, the State machinery was geared to avoid direct action which may impinge upon production-unhampered production-first for the war effort and then for the planned development of Indian society.

2.3. Rule 81A of the Defence of India Rules, the precursor of the Industrial Disputes Act, 1947, empowered the appropriate Government to intervene in industrial disputes by compelling the parties to go to compulsory adjudication by prohibiting strikes or lock-outs during the pendency of adjudication proceedings and for a period of two months thereafter. A blanket ban was imposed on strikes which did not arise out of genuine trade disputes.1

"A process of conciliation, with arbitration in the background, is substituted for the rude and barbarous process of strike and lock-out. Reason is to displace force: the might of the State is to enforce peace between industrial combatants as well as between other combatants; and all in the interest of the public."2

On the termination of war, the rule was due to lapse effective from October 1, 1946; but was kept in operation by the Emergency Powers (Continuance) Ordinance, 1946. Simultaneously,Industrial Employment (Standing Orders) Act, 1946, was enacted providing for framing and certifying of standing orders covering various aspects of service conditions with a view to compelling the employers in industrial establishments to prescribe with sufficient precision the conditions of service under them and to make the industrial employees aware of those conditions.

On the advent of the Constitution, under Part IV thereof, the State, meaning thereby all limbs of Government, had to strive to promote the welfare of the people, by securing and protecting as, effectively as it may, a social order in which justice, social, economic and political, shall inform all the institutions of the national life.

The State had, in particular, to strive to minimise the inequalities of income and endeavour to eliminate inequalities in status, facilities and opportunities, not only amongst individuals but also amongst groups of people residing in different areas or engaged in different vocations (Article 38). The State had, within its limits of economic capacity and development, to make effective provision for securing the right to work, to education and to public assistance in cases of unemployment, old age, sickness, and disablement, and in other cases of undeserved want (Article 41).

The State was required to make endeavour to secure, by suitable legislation or economic organisation or in any other way, to all workers, agricultural, industrial or otherwise, work, a living wage, conditions of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities (Article 43). The State was required to take steps, by suitable legislation or in any other way, to secure the participation of workers in the management of undertakings, establishments or other organisations engaged in any industry (Article 43A).

1. Report of the National Commission on Labour, p. 56, para. 6.48.

2. H.B. Higgins A New Province for Law and Order.

2.4. As the Constitution envisaged a society governed by rule of law, the State had to enact numerous legislations to translate into reality the promise in the Preamble that the State shall secure to its citizens, justice, social, economic and political and equality of opportunity. Law was to ensure socio-economic justice to labour, transforming their position from being a factor of production to partner in industry.

Through the instrumentality of law, the unequal bargaining power of the labour was to be strengthened so as to avoid direct action, confrontation, or conflict and to ensure peace and harmony in the industry which was a prerequisite for higher production and thereby improving and ameliorating the economic position of the labour force.

Exploitation by the powerful industrial employers of the workmen had to be eschewed by enacting numerous legislations, which would help in avoiding confrontation and impel parties having apparently conflicting interests to negotiate and resolve their disputes. With this end in view, the Central Government enacted roughly about 51 legislations since 1947, a list of which appears at Appendix II of this report.

2.5. The underlying assumption in all these enactments is that once law is enacted, legal sanctions are created, machinery for its enforcement provided and violations are dealt with, peace and harmony would reign in the industry. The word "peace", as used in this context, should not mislead anyone. "Peace" does not imply slavish subjugation imposed upon the weaker sections by the more powerful dictating its own terms. "Peace, in the profound sense of the term, is not a mere negative concept of the avoidance of strife, but a positive idea of the fruitful co-operation of all for the fullest possible development of each."1

1. Qouted in the Report of the Labour Laws Review Committee, Gujarat State, 1974, p. 6, para. 28.

2.6. Law, to be an effective instrument of change for social transformation and for rendering socio-economic justice, must have sanction behind it and must compel obedience. In its effective implementation, the expectation from the law must be wholly fulfilled, otherwise law itself becomes an instrument for further exploitation. The laws for improvement of the conditions of labour employed in various industries provided for promoting arbitration by consent of parties, failing which by compulsory adjudication, with a further power to compel obedience to these provisions by declaring strike or lock-out illegal after an order for compulsory adjudication is made.

2.7. To appreciate this position adequately, a brief reference to the provisions of Industrial Disputes Act would become necessitous. The dictionary clause defines, amongst others, "appropriate Government" on which power to make a reference for compulsory adjudication is conferred.

Section 3 envisages setting up of a works committee consisting of representatives of employers and workmen engaged in the industrial establishment charged with a duty to promote measures for securing and preserving amity and good relations between the employer and the workmen and, to that end, to comment upon the matters of common interest or concern and endeavour to compose any difference of opinion in respect of such matters.

The State of Gujarat, in the application of section 3, has also introduced sections 3A and 3B providing for joint management council and prescribing the functions of the council. One can safely say that these provisions are a non-starter. In fact, for a long time the operation of section 3 was stayed by an injunction granted by the Supreme Court of India. Section 4 envisages appointment of conciliation officers. Section 5 deals with setting up of boards of conciliation and section 6 empowers the Government to constitute courts of inquiry.

Section 7 confers power to constitute one or more labour courts. Such labour court will have jurisdiction to adjudicate industrial disputes relating to any matter specified in the Second Schedule to the Act. Section 7A, which was introduced in 1956, conferred power on the appropriate Government to constitute one or more industrial tribunals for adjudication of industrial disputes relating to any matter specified in the Second Schedule or the Third Schedule.

Section 7B, which also was introduced in 1956, conferred power on the Central Government to constitute National Industrial Tribunal for adjudication of industrial disputes which may involve questions of national importance or are of such a nature that industrial establishments constituted in more than one State are likely to be interested in, or affected by such disputes, section 9A, which was introduced by the same Act of 1956, obliged the employer to give a notice of change if it is intended to effect a change in the condition of service applicable to any workmen in respect of any of the matters specified in the Fourth Schedule.

Section 10 confers power on the appropriate Government to refer any industrial dispute that exists or is apprehended to a board for promoting settlement or to a court of inquiry or to a labour court or to a tribunal, as the case may be, for adjudication. Sub-section (5) of section 10 confers power on the appropriate Government, while making a reference of an industrial dispute for adjudication, to include in the reference such establishment, group or class of establishments, whether or not at the time of such inclusion any dispute exists or is apprehended in the establishment or group or class of establishments.

Section 22 prohibits strike in a public utility service without giving to the employer a notice of strike as provided therein. Section 23 puts a general embargo on strike and lock-out during the period of proceedings before a labour court, tribunal or National Tribunal and for a period of two months after the conclusion of the proceedings.