The Industrial Relations Code, 2020

1.As per the provisions of the Industrial Disputes Act, 1947 even in the case of an economic recession, the company must follow due process for layoffs as per the Act. If Mr. Y believes that the company did not follow the proper procedure or that his termination was discriminatory, he can challenge it.

2.The government plays a crucial role in such disputes. If the dispute cannot be resolved at the company level, it can be referred to the appropriate government authority. The government can then refer the dispute to a conciliation officer, Board, Labour Court, or Tribunal as per the Act. The Government also ensures that the rights of the workers are protected during this process.

The adjudication of industrial disputes by Conciliation Board, Labour Court, Court of Inquiry, Industrial Tribunal or National Tribunal can take place when a reference to this effect has been made by the appropriate Government under Section 10 of Industrial Disputes Act, 1947.

3.IfY’s claim is upheld, the remedies available to him can include reinstatement to his previous position or compensation. The exact remedy would depend on the specifics of the case and the decision of the Labour court or tribunal. The decision of the Labour court or Tribunal is binding on both Mr. Y and the company.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2024, Q. 6(d) (Syllabus 2022).

Difference between lay-off and lock-out under the Industrial Disputes Act, 1947

(1)Lay-off means the failure, refusal or inability of an employer on account of shortage of coal, power or raw materials or the accumulation of stocks or the break-down of machinery or natural calamity or for any other connected reason to give employment to a workman whose name is borne on the muster rolls of his industrial establishment and who has not been retrenched.

While Lock-out refers to 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. It is a situation in which an employer prevents employees from working by refusing to allow them to enter the workplace.

It is caused by a labor dispute between the employer and the employees.

(2)In lay-off, the business continues, but in lock-out, the place of business is closed down for the time being. In a lock-out, there is no question of any wages or compensation being paid unless the lock-out is held to be unjustified.

(3)Lay-off is the result of trade reasons but lock-out is a weapon of collective bargaining.

(4)Lock-out is subject to certain restrictions and penalties but it is not so in case of lay-off.

However, both are of temporary nature and in both cases the contract of employment is not terminated but remains in suspended animation.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2023, Q. 6A(iii) (Syllabus 2022).

Section 10(1) of the Industrial Disputes Act, 1947 provides the powers of appropriate Government to make a reference, has been the favoured subject of judicial interpretation.

(i)In the case of Western India Match Co. Ltd. v. Workmen, it was held that it is not mandatory for the appropriate Government to wait for the outcome of the conciliation proceedings before making an order of reference. The expression “the appropriate Government at any time may refer” takes effect in such cases where the Government decides to make a reference without waiting for conciliation proceedings to begin or to be completed.

Thus, the Government can refer the matter to the Industrial Tribunal without waiting for conclusion of conciliation proceedings.

(ii)The Industrial Tribunal gets its jurisdiction on a reference by the appropriate Government under Section 10. The Government can nominate a person to constitute a Tribunal for adjudication of industrial disputes as and when they arise and refer them to it. The Tribunal may be constituted for any limited or for a particular case or area. If appointed for a limited period, it ceases to function after the expiry of the term even when some matters are still pending (J.B. Mangharam & Co. v. Kher, A.I.R. 1956 M.B.113).

Thus, the Industrial Tribunal cease to function after the expiry of 2 months.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2025, Q. 6(a) (Syllabus 2022).

Section 10A of Industrial Disputes Act, 1947 provides for the settlement by voluntary reference of dispute to arbitration.

To achieve this purpose, Section 10Amakes the following provisions:

(i)Where any industrial dispute exists or is apprehended and the same has not yet been referred for adjudication to a Labour Court, Tribunal or National Tribunal, the employer and the workmen may refer the dispute, by a written agreement, to arbitration specifying the arbitrator or arbitrators. The presiding officer of a Labour Court or Tribunal or National Tribunal can also be named by the parties as arbitrator. Where an arbitration agreement provides for a reference of the dispute to an even number of arbitrators, the agreement shall provide for the appointment of another person as umpire who shall enter upon the reference, if the arbitrators are equally divided in their opinion, and the award of the umpire shall prevail and shall be deemed to be the arbitration award for the purposes of this Act.

(ii)An arbitration agreement referred to in sub-section (1) shall be in such form and shall be signed by the parties thereto in such manner as may be prescribed.

(iii)A copy of the arbitration agreement shall be forwarded to appropriate Government and the Conciliation Officer and the appropriate Government shall within one month from the date of the receipt of such copy, publish the same in the Official Gazette.

(iv)According to Section 10-A(3A), where an industrial dispute has been referred to arbitration and the appropriate Government is satisfied that the persons making the reference represent the majority of each party, the appropriate Government may, within the time referred above, issue a notification in such manner as may be prescribed; and when any such notification is issued, the employer and workmen who are not parties to the arbitration agreement but are concerned in the dispute, shall be given an opportunity of presenting their case before the arbitrator or arbitrators.

(v)The arbitrator or arbitrators shall investigate the dispute and submit to the appropriate Government the arbitration award signed by the arbitrator or all arbitrators, as the case may be.

(vi)Where an industrial dispute has been referred to arbitration and a notification has been issued, the appropriate Government may, by order, prohibit the continuance of any strike or lock-out in connection with such dispute which may be in existence on the date of the reference.

(vii)Nothing in the Arbitration Act, 1940 shall apply to arbitrations under this Section.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2024, Q. 6A(iii) (Syllabus 2022).

Payment of Subsistence Allowance Statutory provision for payment of subsistence allowance has been made under Section 10A of the Industrial Employment (Standing Orders) Act, 1946, provides as follows:

Where any workmen is suspended by the employer pending investigation or inquiry into complaints or charges of misconduct against him, the employer shall pay to such a workman the subsistence allowance

(a)at the rate of fifty per cent of the wages which the workman was entitled to immediately preceding the date of such suspension, for the first ninety days of suspension: and

(b)at the rate of seventy-five per cent of such wages for the remaining period of suspension if the delay in the completion of disciplinary proceedings against such workman is not directly attributable to the conduct of such workman.

Any dispute regarding subsistence allowance may be referred by the workman or the employer, to the Labour Court constituted under the Industrial Disputes Act, 1947.

However, if the provisions relating to payment of subsistence allowance under any other law for the time being in force are more beneficial, then the provisions of such other law shall be applicable.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2023, Q. 6(c) (Syllabus 2022).

As per Section 22 of the Industrial Disputes Act, 1947 following are prohibitions of strikes and lock-outs in public utility service:

1)No person employed in a public utility service shall go on strike in breach of contract--

(a)without giving to the employer notice of strike, as hereinafter provided, within six weeks before striking; or

(b)within fourteen days of giving such notice; or

(c)before the expiry of the date of strike specified in any such notice as aforesaid; or

(d)during the pendency of any conciliation proceedings before a conciliation officer and seven days after the conclusion of such proceedings.

(2)No employer carrying on any public utility service shall lock-out any of his workmen--

(a)without giving them notice of lock-out as hereinafter provided, within six weeks before locking out; or

(b)within fourteen days of giving such notice; or

(c)before the expiry the date of lock-out specified in any such notice as aforesaid; or

(d)during the pendency of any conciliation proceedings before a conciliation officer and seven days after the conclusion of such proceedings.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2024, Q. 5(d) (Syllabus 2022).

Section 6 of the Industrial Relations Code, 2020, provides the following criteria for registration of a Trade Union.

Minimum number of members to apply for registration : Any seven or more members of a Trade Union may, by subscribing their names to the rules of the Trade Union and by otherwise complying with the provisions of this Code with respect to registration, apply for registration of the Trade Union under this Code.

Membership threshold for registration : No Trade Union of workers shall be registered unless at least ten per cent of the workers or one hundred workers, whichever is less, engaged or employed in the industrial establishment or industry with which it is connected are the members of such Trade Union on the date of making of application for registration.

Validity of Application in case of withdrawal of applicants : Where an application has been made under sub section (1) for registration of a Trade Union, such application shall not be deemed to have become invalid merely by reason of the fact that, at any time after the date of the application but before the registration of the Trade Union, some of the applicants, but not exceeding half of the total number of persons who made the application, have ceased to be members of the Trade Union or have given notice in writing to the Registrar dissociating themselves from the application.

Condition for continuing registration: A registered Trade Union shall at all times maintain, at least 10% of the workers or 100 workers, whichever is less, as members, subject to a minimum of seven members engaged in the establishment/ industry with which it is connected.

Conclusion:

As the proposed trade union has only 47 members, instead of minimum 74 [10% strength of the total 740 workers, or 100 workers, whichever is less ], hence registration of Trade Union is not possible.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2026, Q. 6(b) (Syllabus 2022).

Following are the matters to be provided in Standing Orders as per the schedule under the Industrial Employment (Standing Orders) Act, 1946

1.Classification of workmen, e.g., whether permanent, on overall temporary, apprentices, probationers or badlis.

2.Manner of intimating to workmen periods and hours of work, holidays, pay-days and wage rates.

3.Shift working.

4.Attendance and late coming.

5.Conditions of, procedure in applying for, and the authority which may grant leave and holidays.

6.Requirement to enter premises by certain gates, and liability to search.

7.Closing and reopening of sections of the industrial establishment, and temporary stoppage of work and the rights and liabilities of the employer and workmen arising therefrom.

8.Termination of employment, and the notice thereof to be given by employer and workmen.

9.Suspension or dismissal for misconduct, and acts or omissions which constitute misconduct.

10.Means of redress for workmen against unfair treatment or wrongful exactions by the employer or his agents or servants.

11.Any other matter which may be prescribed.

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Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2024, Q. 6A(iv) (Syllabus 2022).