Strikes and Lockouts

Strike and lockout in labour law are the actions taken by the employees and employers respectively to
fulfil their demands. The strike is the remedy for employees while the lockout is the remedy for the
employer of the company or industry. In the struggle between the employers and employees, lockout
and strikes work as weapons. Strike makes an effect on the production in the industry whereas the
lockout makes an effect on the salary of the employees. Law gives the room for strike and lockout to
place in the industry. But both must be peaceful and must fulfil the conditions of the Industrial dispute
act, 1947.

Definition of STRIKE
Section 2(Q) of the industrial dispute act, 1947 defines that ‘Strike is a temporary cessation of the work
by the group of the employees of the industry with the same intention to stop the work. The strike means
the refusal of work that is decided by the association of a group of employees or workers. It is done by
the workers to get their necessary demands fulfilled by the employer of the company or industry. The
strike includes:
 Willing full suspension of work.
 It is a temporary withdrawal of the workers from the work.
 The workers can do the strike outside or inside of the workplace.
 the common understanding for the suspension of work should be present for the strike.
 it can be continued for any number of days.
 The workers start working when the demands are fulfilled.
The strike can make a loss to the industry as the workers will not do any kind of work. The production
or growth of the industry will suffer the loss.

Essentials of strike
There are many essentials of strike given under the act which are:
1. Cessation of work
2. Cessation of work in combination by a group of employed persons in the industry
3. The persons should be employed in the industry.
4. The refusal of work must be the refusal of common understanding by such persons.

Cessation of work
Cessation of the work in the industry is the essential element for the strike. Cessation of work means
the work of the industry has been stopped. Even the period for the stoppage is only half-hour still it will
fall in the definition of a strike if the other requirements of the definition are fulfilled.

Cessation of work in combination by a group of employed persons in the industry

The stoppage of work must be with the common intention of the employees and that too in defiance of
the authority of employers.

The Supreme Court held that if the employees do not stay away from work in pursuance of common
intention, it will be not recognized as Strike.

The right to strike is not a fundamental right

In the case of All India Bank Employees Association VS National industrial tribunal, it was held by the
Court that the right to go on strike is not included in the ambit of freedom of speech and expression
which is given under article 19 (1)(A) of the Constitution of India.
T.K. Rangarajan VS Government of Tamil Nadu
The SC delivers the strict decision that the Government employees have no legal, fundamental, or
equitable right to go on strike even for the just cause.
Types of strike
There are various types of strikes. All the strikes are differing in their mode of action but all the strikes
aim to enforce their demands from the employer.

General strike
The general strike is also known as a legal strike. In the general strike, the workmen give prior notice
to the employer with their demands that they wanted to enforce. If the management of the industry fails
to fulfil the demand within the given time in the notice, the workers launch the strike after the expiry of
the notice.

Sit down strike

In the sit-down strike, all the employees come on time in the industry normally, take their position in
the area which they regularly work, they simply sit there without doing any kind of work. The object of
this strike is to cripple the production of the industry.

Pen down Strike

The pen down and sit-down strikes are almost the same. The pen-down strike takes place among people
with white-collar jobs or the employees who work in the offices. The employees do not touch the
pen/tool they use to do their work.

Punjab National Bank Ltd Vs Their Workmen on 24 September 1959

It was held in the court that a pen down stoppage of the work was a strike within section 2(q) of the
industrial dispute act, 1947.

Go slow strike
In this strike the workmen come to the industry daily, they do the work also, but the speed of the work
will as much slow that they are doing nothing productive. The production of the industry will become
almost zero even after the working of the workmen.

Sick out strike

It is not a strike; it is just to show the employer that what it would be like if the worker went on strike.
In this, all workmen take the sick leave on the same day. They have not broken any rules because they
just use the leave that was allotted to them.

Economic Strike
When the strike is happening due to economic issues like salary, bonus, working hours and conditions
etc, it is called an Economic strike.

Sympathy Strike
When more unions of employees join the strike initiated by another union for support that union is
called Sympathy Strike.

Wildcat strike
The type of Wildcat strike happens when workers go on strike without the consent of the union, made
for them.

Hunger strike
Hunger strikes occur when the workers go on the strike without taking food/water. It is a very painful
type of strike. There is a case when the Kingfisher airline’s employees went on hunger strike for the
salary dues for several months.
Common Reasons for Strike
Here is the list of common reasons on which the strike occurs

 Working hours of Industry

 work conditions
 Employment salary, bonus or increments etc
 Layoff and retrenchment
 Timely payment of work
 Minimum wages issues
 Holidays
 PF/ ESI et

LOCKOUTS
Section 2(1) of the Industrial Dispute Act 1947 defines that Lock-out is a temporary closing of the
industry, or suspension of work, or the refusal of the work by the employer of the industry to continue
employment to any number of workmen employed within the industry.

Essentials of Lock-out
There are two essentials of the Lock-out
1) Closing of the industry
2) Suspension of work
3) Refusal by the employer to continue to employ any number of workmen employed in the industry.

Coercion and retaliation are the main elements of the Lock-out that must be used by the employer. The
mere suspension of the work without accompanied by an intention to retaliate will not amount to Lock-
out.
If the employer of the industry shut down the work because the raw material, or the fuel or any necessary
material is not present, it will not amount to Lock-out.

Common Reasons for Lockout

Here is the list of common reasons on which the Lockout occurs
 In response to a strike initiated by employees
 disputes between workers and managers
 Changes in the government rules
 Illegal activity is undertaken in the company

Prohibition of strike and lockout

The stopping or cessation of work whether by the workmen or by the employer of the industry is harmful
to the production and economy of the society. For this, the industrial dispute act is providing some
prohibition of strikes and lockout.

Prohibition of strikes
The strike is not allowed by the persons employed in public utility services:
1. Without giving the 6 weeks prior notice to the employer before striking,
2. Within 14 days of giving such notice,
3. Before the expiry date of the strike which was given in the notice,
4. During the pendency of any proceedings under conciliation,
5. Before the seven days of the decision of the conciliation officer.

Prohibition of lock-out
The lock-out shall not allow the employer to carry on any public utility service:
1. Without giving the 6 weeks prior notice to the employees before lock-out,
 2. Within 14 days of giving such notice,
3. Before the expiry date of a lock-out which was given in the notice,
4. During the pendency of any proceedings under conciliation,
5. Before the seven days of the decision of the conciliation officer.

Illegal strikes and lock-out

Section 24 of the act defines the illegal strikes and lockouts that a strike and lock-out is illegal if it is:
 Declared without the prior notice of 6 weeks,
 Declared during the pendency of conciliation proceeding,
 If it is continuingly contravention the boundaries of strikes and lockouts

Conditions where the strike and Lock-out is not deemed to be illegal

 The strike or lock-out which is already commenced before the reference of the dispute
 A lock-out declared by the employer in the consequences of an illegal strike
 Strike declared by employees in the consequences of an illegal lock-out

Penalties for illegal strike and lock-out

There are various penalties that have been given in the act for illegal strikes and illegal lock-outs
 Penalty for commencing
a) Imprisonment for one month,
b) Fine up to fifty rupees,
c) Both
 Penalty for instigation
a) Imprisonment for 6 months,
b) Fine up to one thousand rupees,
c) Both.
 Penalty for giving financial aid
a) Imprisonment for 6 months,
b) Fine up to one thousand rupees,
c) Both

Justified and unjustified strikes

A strike where the strike is legal and the motive or reason behind the strike is realistic, the strike is
justified.
Where the strike is commenced by the employees to intimidate the employer is an unjustified strike.

Difference between strikes and lockouts

S.
No. STRIKE LOCK-OUT

It is the weapon of employees against It is the weapon of the employer against

employers to bend the employer in their employees to restrict the militant’s spirits of
1 side. the workers of industry.

Cessation of work by employees in the Cessation of work by the employer to

industry to show grievance or to compel the accept the terms and conditions decided by
2 employer to fulfil their demands. the management.
 The Strike involves the united withdrawal Lockout Involves the withholding of
3 of the supply of labour at work. demand of labour.

4 The reasons are often economic. Reasons can be economic or non-economic

5 The strike is of various types. The lock-out does not have varieties.

The strike is conducted to gain a concession Lock-out is used to enforce the terms of
6 from the employer. employment during the dispute.

It is a full cessation of work by employees It is a temporal shutdown by the employer,

7 until the fulfilment of their demands. refusal of employment.

The Lockout is the employer power to

The strike is a union power as it is sported compel the workers to do the work
8 by the labour or union. according to their guidelines.

Conclusion
So, we came to the conclusion that the strike and lockouts can be used as weapons or as a remedy to
settle the disputes arising between employees and employers. These are used when they both failed to
solve their disputes with peaceful negotiation. Lockout is usually announced when the workman
continues to remain on the strike.

LAYOFF AND RETRENCHMENT

Layoff and retrenchment are talked about in the Industrial Disputes Act of 1947. Layoff refers to the
removal of employees by the employer for reasons other than the employee’s fault. A layoff is
temporary in nature as it indicates the incapability of an employer to continue the employment of the
workers for a short period. Retrenchment refers to a situation where the employer removes his
employees to increase profits and decrease losses. Even in retrenchment, there is no fault of the
employee that results in the termination of the employment.

Understanding the concept of lay-off under the Industrial Disputes Act, 1947
Section 2 (kkk) of the Industrial Disputes Act, 1947 defines the term ‘Layoff’’ as the inability, failure,
or refusal of the employer to provide employment to a workman whose name is mentioned in the muster
roll of his industrial establishment and who is not retrenched due to the lack of power, coal, raw
materials, accumulation of stocks, breakdown of machinery or natural calamity for any other relevant
reason.
Conditions essential for a lay-off

 There must exist an inability, failure or refusal from the employer’s side to provide
employment to the workmen.
 Such inability, failure or refusal must be due to lack of power, coal, raw materials,
accumulation of stocks, breakdown of machinery or natural calamity for any other relevant
reason.
 The name of the workman must be mentioned in the muster roll of the employer’s industrial
establishment.
 The workman must not have been subjected to retrenchment.

A layoff is a measure that is used only in continuing businesses. If the employer decides to permanently
shut down his industrial establishment, then layoff is of no use. Layoff must adhere to the conditions
provided in Section 2 (kkk) of the Industrial Disputes Act, 1947 or else it will not be considered right
as per the law. Layoff means there will be immediate removal of the employees, however, such
unemployment is temporary in nature so it does not result in the termination of the already existing
employer-employee relation and leads to no alteration of the terms of such employment.

A workman whose name is mentioned in the muster roll of the employer’s industrial establishment and
who is present for work during the working hours of any day is not employed within two hours of him
being present for work is said to be laid-off for that particular day. Similarly, if the workman is asked
to work during the second half of his shift and is employed then he is said to be laid off for half of the
day. In case he is not employed even after being present for work during the second half of the day,
then he is considered to be laid-off for the whole day.

Section 25A of the Industrial Disputes Act, 1947: non-applicability of compensation on industries
As per Section 25A, the compensation accrued from the layoff provisions mentioned in the said Act
shall not apply to the following kinds of industrial establishments:

 Such industrial establishments where less than 50 workmen worked on an average during
each working day in the preceding calendar month.
 An industrial establishment where work is done seasonally or occasionally.
 An industrial establishment that comes under the aegis of chapter V-B as included by the
Industrial Disputes Amendment Act of 1976.

Section 25B of the Industrial Disputes Act, 1947: continuous service

As per Section 25B, a workman is said to render continuous service if he has worked for at least one
year without any interruption. He shall be eligible for compensation if he has rendered a minimum of
one year of continuous service. The interruption of such continuous service is not affected by reasons
such as an accident, authorized leave, sickness, legal strikes, a lock and the termination of work that is
not due to the fault of the workmen.

There are two exceptions where even if a workman is not in continuous service shall be deemed to be
in continuous service – they are –

 If the workman was employed for the preceding 12 calendar months from the date on which
such calculation is being made.
 If the workman during such 12 months had rendered his services for 190 days or more in
the case of being employed in a mine and 240 days in any other employment.
Conditions precedent for providing compensation to a laid-off workman
As per Section 25C of the said Act, the workman who is laid off is entitled to compensation that is
equivalent to half of the total wages and allowance given for the said period of lay-off.
However such compensation is subject to the following conditions –
 The workman is not a badli or a casual worker.
 The workman’s name must be mentioned in the muster roll of the industrial establishment.
 The workman must have rendered at least one year of continuous service under such an
employer.

Conditions for non-applicability of compensation on workmen

Section 25E states when a workman shall not be entitled to layoff compensation –

1. If the workman is absent from the establishment during the required working hours at least
once a day.
2. If the workman is laid off for slowing down the efficiency of workmen in another part of
the establishment or due to the reason for a strike.
3. If the workman expresses his refusal towards the alternative employment being given to
him, provided that:

 Such employment is given in the same establishment he has been laid off from.
 Such employment is given in any other establishment under the same employer within 5
miles radius from the establishment to which he belonged.
 Such employment as per the employer does not require any previous experience or special
skills as compared to the work that the workman can do
 Such employment provides the same wages to the workman as his previous employment
did.

Prohibition of lay-off under Industrial Disputes Act, 1947

An employer is subjected to certain restrictions while laying off workers as per Section
25M (Chapter VB added to the Industrial Disputes Act of 1947 by the Industrial Disputes Amendment
Act of 1976). These restrictions apply to those industrial establishments which are not seasonal in nature
and where there more than 100 workmen. An employer cannot lay off a workman whose name is
mentioned in the muster roll of his industrial establishment except when the reason for such layoff is
lack of power or a natural calamity. If the work is regarding a mine, then the reasons can also be fire,
explosion, excess of inflammable gas or a flood.

An employer can lay off the workmen after acquiring the permission of the concerned authorities
specified by the government or the government itself. For this purpose, an application shall be made by
the employer stating the reasons for such lay-off and a copy of the same application shall be provided
to the workmen who are subjected to such lay-off. After receiving an application, the concerned
authority or the government can inquire about such lay off. After such inquiry, the order of the
concerned authority or the government must be communicated to the employer and the employees being
laid off. The order of the concerned authority or the government shall be considered as final and will
be binding for a period of one year from the date of such order.
If the concerned authority or the government does not communicate its order regarding its grant or
refusal to grant permission for such lay off within 60 days from the date of application then such
application for permission shall be considered as granted. The order of the concerned authority or the
government can be referred to a tribunal for adjudication or reviewed either in its own motion or through
an application made by an employer or any workman.

In case any lay off occurs even after the permission to do so is refused then such lay off will be
considered illegal and the workmen laid off will be entitled to the benefits of the law. However, an
employer will not be considered to have laid off a workman if he provides alternative employment to
such workman.

Understanding the concept of retrenchment under the Industrial Disputes Act, 1947
Section 2(oo) of the Industrial Disputes Act, 1947 talks about retrenchment. As per the said section,
retrenchment refers to the termination of a workman for any reason except for a form of punishment in
furtherance of imposing disciplinary action. However, retrenchment does not include voluntary
retirement of a workman, workman retiring upon reaching the age of superannuation as mentioned in
the employment contract, removal of a workman on basis of continued ill-health, and removal of the
workman because the employment contract is terminated or is non-renewed after its expiry.

Section 25F of the Industrial Disputes Act, 1947: conditions precedent to retrenchment

 As per this Section, the employer must give one month’s written notice to the workman that
includes the reasons for retrenchment, or in lieu of such notice, the workman must be paid
wages for the period of the notice.
 The employer at the time of retrenchment must pay the workman the compensation which
is equal to the average pay of 15 days for each year of continuous service provided by such
workman.
 The notice regarding retrenchment must be served to the appropriate Government as well.

Section 25G of the Industrial Disputes Act, 1947: procedure of retrenchment

The procedure of retrenchment as per this Section is as follows:

If an employer decides to retrench a workman belonging to a certain class of workmen working in the
establishment of such employer, he must ensure to retrench such a workman who was considered as the
last candidate to be employed for such work at the time of employment. Usually, the rule followed
during retrenchment is that it must start with beginners or new workmen and then progress towards the
experienced or senior workmen.

However, the exceptions to the above-mentioned method are if a contract exists between the employer
and the workmen that is contrary to the rule or if the employer states the grounds to retrench any other
workman. The employer in good faith is allowed to continue the employment of those workmen who
possess special skills and whose service is imperative for the establishment’s proper functioning.
Landmark Judgements regarding retrenchment

Byram Pestonji Gariwala v Union Bank of India and Others

In this case, the Apex court restricted the definition of ‘retrenchment’ as defined under Section 2(oo)
(bb) of the Industrial Disputes Act, 1947. It held that only when ‘discharge of excess of labour’ is done
by the employer then retrenchment is said to occur.

State Bank of India v N. Sundaramony

In this case, the Supreme Court put an end to its earlier decision expressed in Byram Pestonji Gariwala
v Union Bank of India and Others by expanding the definition of retrenchment as defined under Section
2(oo) of the Industrial Disputes Act, 1947. It held that any retrenchment done as per Section 2(oo) shall
mean that the termination of a workman is done by the employer for any reason whatsoever other than
as a punishment in furtherance of imposing disciplinary action and those explicitly excluded by clauses
(a), (b) and (c) of the said definition.

G. Jagadishwar Reddy v Railways, Guntakal Division

In this case, it was held that retrenchment compensation can also be claimed by casual workers under
the provisions of Section 25F of the Industrial Disputes Act, 1947 if such casual worker had rendered
continuous service for a period of one year.

Delhi Cloth and General Mills v Union of India

In this case, it was held by the Supreme Court that if the name of any workman is removed from the
muster roll of an industrial establishment then it would automatically be deemed as the retrenchment of
such workman.

 LAY-OFF AND RETRENCHMENT: A COMPARATIVE ANALYSIS

A layoff basically means the temporary termination of a workman at the disposal of an employer while
retrenchment means the removal of excess workmen to increase the efficiency of the industrial
establishment, provided that such removal is done for any reason whatsoever other than as a form of
punishment in furtherance of imposing disciplinary action.
The termination in a layoff is temporary while termination in retrenchment is permanent. The employer-
employee relationship does not cease to exist in the former and it ceases in the latter.
In a layoff, the industrial establishment stops functioning or operating after the declaration. However,
in retrenchment, the industrial establishment continues its functions or operations.
A workman who had been laid off is appointed back as soon as the layoff period ends. In the case of
retrenchment, the employment of the workman is immediately terminated, there is no further relation
between the employer and the workmen.

Conclusion
Any company doing business banks upon various aspects for the purpose of its operation, gaining profits
and reducing losses. It is also required to look after its employees well enough so that they work
efficiently for the development of such a company. However, in order to survive in the market, these
companies are required to take accurate and expeditious decisions. Terminating the employees or
workers by means of lay-offs or retrenchment may be beneficial to the company as both methods follow
certain protocols to make sure that the employees or workers are not subjected to unfair conditions.