Industrial Disputes Act
Encyclopedia
The Industrial Disputes Act, 1947 extends to the whole of India
. It came into force April 1, 1947.
Various studies indicate that Indian labour law
s are highly protective of labour, and
labour markets are relatively inflexible. These laws apply only to the organised sector.
Consequently, these laws have restricted labour mobility, have led to capital-intensive
methods in the organised sector and adversely affected the sector’s long-run demand for
labour. Labour being a subject in the concurrent list, State-level labour regulations are
also an important determinant of industrial performance. Evidence suggests that States,
which have enacted more pro-worker regulations, have lost out on industrial production
in general.
-- (Ministry of Finance, 2006, p. 209
the Industrial Disputes Act
(IDA) of 1947. Particular attention has been paid to its Chapter V-B, introduced by an
amendment in 1976, which required firms employing 300 or more workers to obtain government
permission for layoffs, retrenchments and closures. A further amendment in 1982 (which took
effect in 1984) expanded its ambit by reducing the threshold to 100 workers. It is argued that
since permission is difficult to obtain, employers are reluctant to hire workers whom they cannot
easily get rid of. Job security laws thus protect a tiny minority of workers in the organised sector
and prevent the expansion of industrial employment that could benefit the mass of workers
outside. It is also argued that the restriction on retrenchment has adversely affected workplace
discipline, while the threshold set at 100 has discouraged factories from expanding to economic
scales of production, thereby harming productivity. Several other sections of the IDA allegedly
have similar effects, because they increase workers’ bargaining strength and thereby raise labour
costs either directly through wages or indirectly by inhibiting work reorganization in response to
changes in demand and technology.
The Act also lays down
, trade
, manufacture or distribution
of goods and services irrespective of the number of workmen employed therein.
Every person employed in an establishment for hire or reward including contract labour, apprentices and part time employees to do any manual, clerical,skilled, unskilled, technical, operational or supervisory work, is covered by the Act.
This Act though does not apply to persons mainly in managerial or administrative capacity,persons engaged in a supervisory capacity and drawing > 1600 p.m or executing managerial functions and persons subject to Army Act, Air Force and Navy Act or those in police service or officer or employee of a prison
.
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
. It came into force April 1, 1947.
Objectives
The objective of the Industrial Disputes Act is to secure industrial peace and harmony by providing machinery and procedure for the investigation and settlement of industrial disputes by negotiations.Various studies indicate that Indian labour law
Indian labour law
Indian labour law refers to laws regulating employment in India. There are over fifty national laws and many more state-level laws.Traditionally Indian governments at federal and state level have sought to ensure a high degree of protection for workers. So for instance, a permanent worker can be...
s are highly protective of labour, and
labour markets are relatively inflexible. These laws apply only to the organised sector.
Consequently, these laws have restricted labour mobility, have led to capital-intensive
methods in the organised sector and adversely affected the sector’s long-run demand for
labour. Labour being a subject in the concurrent list, State-level labour regulations are
also an important determinant of industrial performance. Evidence suggests that States,
which have enacted more pro-worker regulations, have lost out on industrial production
in general.
-- (Ministry of Finance, 2006, p. 209
the Industrial Disputes Act
(IDA) of 1947. Particular attention has been paid to its Chapter V-B, introduced by an
amendment in 1976, which required firms employing 300 or more workers to obtain government
permission for layoffs, retrenchments and closures. A further amendment in 1982 (which took
effect in 1984) expanded its ambit by reducing the threshold to 100 workers. It is argued that
since permission is difficult to obtain, employers are reluctant to hire workers whom they cannot
easily get rid of. Job security laws thus protect a tiny minority of workers in the organised sector
and prevent the expansion of industrial employment that could benefit the mass of workers
outside. It is also argued that the restriction on retrenchment has adversely affected workplace
discipline, while the threshold set at 100 has discouraged factories from expanding to economic
scales of production, thereby harming productivity. Several other sections of the IDA allegedly
have similar effects, because they increase workers’ bargaining strength and thereby raise labour
costs either directly through wages or indirectly by inhibiting work reorganization in response to
changes in demand and technology.
The Act also lays down
- The provision for payment of compensation to the workman on account of closure or lay off or retrenchmentRetrenchmentRetrenchment is an act of cutting down or reduction, particularly of public expenditure.-Political usage:The word is familiar in this, its most general sense, from the motto of the Gladstonian Liberal party in British politics, "Peace, Retrenchment and Reform."The manifesto for 1906 Liberal...
. - The procedure for prior permission of appropriate Government for laying off or retrenching the workers or closing down industrial establishments
- Unfair labour practices on part of an employer or a trade unionTrade unionA trade union, trades union or labor union is an organization of workers that have banded together to achieve common goals such as better working conditions. The trade union, through its leadership, bargains with the employer on behalf of union members and negotiates labour contracts with...
or workers.
Applicability
The Industrial Disputes Act extends to whole of India and applies to every industrial establishment carrying on any businessBusiness
A business is an organization engaged in the trade of goods, services, or both to consumers. Businesses are predominant in capitalist economies, where most of them are privately owned and administered to earn profit to increase the wealth of their owners. Businesses may also be not-for-profit...
, trade
Trade
Trade is the transfer of ownership of goods and services from one person or entity to another. Trade is sometimes loosely called commerce or financial transaction or barter. A network that allows trade is called a market. The original form of trade was barter, the direct exchange of goods and...
, manufacture or distribution
Distribution (business)
Product distribution is one of the four elements of the marketing mix. An organization or set of organizations involved in the process of making a product or service available for use or consumption by a consumer or business user.The other three parts of the marketing mix are product, pricing,...
of goods and services irrespective of the number of workmen employed therein.
Every person employed in an establishment for hire or reward including contract labour, apprentices and part time employees to do any manual, clerical,skilled, unskilled, technical, operational or supervisory work, is covered by the Act.
This Act though does not apply to persons mainly in managerial or administrative capacity,persons engaged in a supervisory capacity and drawing > 1600 p.m or executing managerial functions and persons subject to Army Act, Air Force and Navy Act or those in police service or officer or employee of a prison
Prison
A prison is a place in which people are physically confined and, usually, deprived of a range of personal freedoms. Imprisonment or incarceration is a legal penalty that may be imposed by the state for the commission of a crime...
.
Related Sections Of The Act
- Section 1 : Short title, and commencement
- Section 9-B: Power of Government to exempt
Important Definitions
- Section 2A : Appropriate Government
- Section 2BB: Banking company
- Section 2G : Employer
- Section 2J : Industry
- Section 2K : Industrial dispute
- Section 2A : Industrial dispute between individual and employer
- Section 2KA: Industrial establishment or undertaking
- Section 2KK: Insurance company
- Section 2LA: Major port
- Section 2LB: Mine
- Section 2N : Public utility service
- Section 2O : Railway company
- Section 2RR: Wages
Related Schedules
- Schedule I - S 2(n)(6): Industries Which May Be Declared Public Utility Services
- Schedule II - S7 : Matters Within The Jurisdiction Of Labour Courts
- Schedule III - S 7A : Matters Within The Jurisdiction Of Industrial Tribunal