MODULE 3

Industrial Dispute
 Introduction
• Conflict is a part of human life. Conflicts intensify and increase in numbers when a person

has to work in groups and teams. They further multiply when the objectives of the group,
sectional or individual objectives differ and even they are perceived to be differing. The
master and servant relationship is another factor which intensifies the human conflict.
• In early primitive economies based on hunting, fishing and pastoral pursuits, there were no

masters and servants as in industrialized societies. In artisan society also there was no
master and servant relationship. It is essentially seller and buyer relationship or producer
and consumer relationship.
• Industrialization leads to two inevitable things. First, Investment of Large capital and Second,

Employment of not only large number of people but also variety of people together with
intense from of master and servant relationship
Contd.
• The Industrialization of 20th century has brought together large number of workers under a

single management. Hence, the problem of Industrial Peace is common to almost all the
industrially developed countries of the world and ever since Industrialization began each
country is making efforts to find out solutions to this serious problem. The ways and methods
used in solving or preventing these problems, however, differ from country to country,
depending upon its economic, political and social environment.
• As far as India is concerned, we have „the Industrial Disputes Act, 1947‟. The main object of

the Act is to investigate and settle the Industrial Disputes. It is clear from the preamble of the
Act that, it provides for the investigation and settlement of only „Industrial Disputes‟, so here
is important to discuss the concept of the „Industrial Dispute‟.
 Industrial Dispute Definition
• The term “Industrial Dispute” is ‘a key concept of literally central importance” in the area of

Labour Laws which regulate the most delicate labour-management relations. A cordial
relationship between employer and employees could exist only when ‘Collective Bargaining’
blooms. On the contrary, if the same fails “Industrial Disputes” germinate.
• Section 2(k) of the Act defines ‘industrial dispute’ as follows:“ ‘industrial dispute’ means any

dispute or difference between employers and employers, 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”.
 ESSENTIALS OF INDUSTRIAL DISPUTES

• The definition of industrial Dispute has been divided into the following three parts by the Supreme

Court in the significant Dimakuchi Tea Estate Case.

• (a) Factum of the dispute;

• (b) Parties to the dispute; and

• (c) Subject-matter of the dispute.

• (a) Factum of the Dispute

• The key words of the definition are „Dispute or Difference.

• In Beetham V/s. Trinidad Cement Ltd1960) 1 All ER 274, Lord Denning, Speaking for the Privy

Council observed : by definition a „Trade Dispute‟ exist, wherever a difference exists and a
difference can exist long before the parties become locked in a combat. It is not necessary
that, they should have come to blows. It is sufficient that, they should be sparring for an
opinion.
Contd.
• ‘Industrial Dispute’ involves controversy between the disputants in connection with the items

specified in the definition but does not include metaphysical or spiritual or ideological controversies
or controversies relating to formulation of defence policy, foreign treaties etc. This, apart, disputes
between workmen and non-workmen or between government and employers do not fall within the
ambit of the definition.
• The Dispute or difference however must be something fairly definite and of real substance and not a

mere personal quarrel. The term Industrial Dispute‟ connotes a real and substantial difference
having some element of persistency and likely, if not adjusted, to endanger the Industrial Peace of
the community.
• The expression Dispute or difference as used in the definition, therefore, means a controversy, fairly

definite and of real substance, connected with the employment or non-employment or with the
terms of the employment or with the conditions of labour of any person, and is one in which the
contesting parties are directly interested in maintaining the respective contentions. In other words a
dispute or difference arises when a demand is made by workmen on the employer and it is rejected
by him and vice versa.
Contd.

• Thus, both the processes, i.e, putting forth the demand by one party and the

rejection of the same by the other, are like ‘subverse’ and ‘reverse’ of the same coin
and unless both are present there could not be any ‘industrial dispute’It is essential
that the disputants must have direct and substantial interest in the dispute.
Contd.
• Parties to Dispute:
• Section 2(k) speaks of three pairs which could be parties to an ‘industrial
• dispute’. They are
• (i) Employers and Employers;
• (ii) Employers and Workmen; and
• (iii) Workmen and Workmen.
• a) Employers and Employers;
• Sec.2 (g) of the „Industrial Disputes Act, 1947‟ defines Employer as,
• i) In relation to an Industry carried on by or under the authority of any Department of
the Central Government or State Government, the authority prescribed in this behalf or
where no authority is prescribed, the Head of the Department; and
• ii) In relation to any industry carried on by or on behalf of a local authority, the Chief
Executive Officer of that authority.
• The words employers and employers have presumably be enacted with a view to
widen the scope of the definition of Industrial Dispute, to take into its scope and ambit,
the eventualities in certain types of disputes connected with the employment or non-
employment or the terms of employment or the condition of labour of any person.
Contd.
• B)Employers and Workmen:

• The definition of „Industrial Dispute‟ expressly states that, not disputes and differences

of all sorts, but only those which bear upon the relationship of employer and workmen
are contemplated. Except in the last case, i.e. a dispute between workmen and
workmen, one of the parties to an Industrial Dispute must be an employer or a class of
employers.
• C) Workmen and Workmen

• In India, so far, there is no decision of any High Court or the Supreme Court, dealing
with a dispute between workmen and workmen. But it may happen, though rarely, that
the dispute is between two sets of workers in the same establishment; such a dispute
has been brought within ambit of the industrial dispute.
Contd.
• Subject Matter of Dispute:

• It is only that dispute or difference between employers and employers or

between employers and workmen or between workmen and workmen which is
connected with the employment or non-employment or the terms of the
employment or with the conditions of labour of any person which would fall
within the ambit of the definition of Industrial Dispute. In other words, a dispute
or difference must relate to either the employment or non-employment or the
term of the employment or the conditions of labour of any person. Unless a
dispute is connected with these matters, it will not satisfy the requirements of
law and will not fall within the ambit of an Industrial Dispute.
Contd.
• 1] The Employment or Non-Employment:

• The Words „Employment or Non-Employment have not been defined in the Act, but
„Employment‟ refers to a condition in which a man is kept occupied in executing any work and
it means not only an appointment to any office for the first time, but also the continuity of the
appointment.
• - The concept of Employment involves three ingredients.

• I. Employer : One who employees, i.e. engages the services of other persons;

• II. Employee : One who works for another for hire or reward.

• III. Contract of Employment : The contract of service between the employer and the

employee, where under the employee agrees to serve the employer, subject to his control and
supervision.
Contd.
• A Dispute relating to a termination of service, by Discharge , or Retrenchment of workmen

and their Reinstatement are disputes connected with their Employment or Non-
Employment. Suspension also amounts to a non employment of a workman.
• The Terms of Employment or the Conditions of Labour:

• „The Terms of Employment of any person referred to all the matters covered by the contract

of employment, either expressed or implied.

• Basically, terms of employment includes such straightforward industrial issues as bonus,

wage rates (in all forms, including dearness allowance and other allowances), hours of
works, overtime, holidays with pay, sickness benefits, superannuation benefits grading and
promotion, dismissal and retrenchment procedures, but the terms of the employment is a
wide-ranging frays, which also extends to aspects of labour relations that are less obvious
than these.
Contd.
• Any Person:
• The other controversy with respect to the definition of industrial dispute is about the

interpretation of the expression “any person”. The term “any person” found in the last part of the
definition does not mean “any body and every body in this wide world”.

• The Supreme Court in Workmen of Dimakuchi Tea Estate V. Management of

Dimakuchi Tea Estate1951 (1) LLJ 500,504 (SC
• A Medical Officer, who was not a workman under the Act, was terminated on the

ground of “Medical Incompetency”. Subsequently, Assam Chah Karmachari Sangh, a

trade union functioning in the Estate, espoused his cause. It was contended by the
union that the expression “any person” is of wide import and should not be equated
with ‘any workman’. But, the Apex Court held that “the expression ‘any person’ must
be read subject to such limitations and qualifications as arise from the context”.
Contd.
• According to the Court, the two crucial limitations in this context are:
held that the expression any person must be read subject to such limitations and
qualifications as arise from the context. The two crucial limitations are:
1. The dispute must be a real dispute between the parties to the dispute so as to be capable
of settlement or adjudication by one party to the dispute, giving the necessary relief to the
other; and
2. The person, regarding whom the dispute is raised, must be one in whose employments,
non-employment, terms of employment or the conditions of labour, the parties to the dispute
have a direct or substantial interest.
In the absence of such a interest the dispute cannot be said to be a real dispute.
In other words, it does not mean any person unconnected with the disputants in relation to
which the dispute is not of the kind described in the definition. The requirement of the
definition, that, the dispute must relates to the Employment or Non-Employment or the terms
of the Employment or the conditions of labour of „any person‟ necessarily therefore imports a
limitation in the sense that, a person in respect of whom the employer-employee relation
never existed or can never exist, cannot be the subject matter of a Industrial Dispute between
the employer and the workmen.
Contd.
• In the opinion of the Court, the workmen, as a class, must have a “community of interest in
the cause which they have espoused” and this element was missing in the present Case. Thus,
the expression ‘any person’, here, covers past, present and future workmen. The Court averred
that it is the “community of interest of the class as a whole which furnishes the clear nexus
between the dispute and the parties to the dispute”.
Even after a lapse of nearly five decades, the “Dimakuchi Doctrine” continues to retain its
vitality. Following this Doctrine, Justice Hidayatullah has, in All India Reserve Bank Employees ’
Association, ruled that “the direct interest must be a real and positive ... and not fanciful or
remote”.
• The connotation of the words any person was considered by a Division Bench of the Bombay
High Court in NK Sen V/s Labour Appellate Tribunal. 1953 (1) LLJ 6, as per Chagla C.J In this
case, Chagla C.J illustrated the absurdity of construing these words without any limitation or
qualification whatsoever and expanded the crucial test of direct and substantial interest of the
workmen in the Employment, Non-Employment or the terms of the Employment or the
conditions of Labour of the person concerned and further observed that, in the absence of
such interest, no industrial dispute could be raised with regard to such a person.
•
 Individual Dispute when becomes Industrial Disputes

• In India, the expression Industrial Disputes contained in this Act has been construed by the

Supreme Court as to exclude Individual Disputes, because of the scheme of the Act.

Before, the decision of the Supreme Court in Central Provinces Services Ltd., V/s. Raghunath
Gopal Patvardhan1957 1 LLJ 27 SC, there was a considerable conflict of judicial dicta, both in
the High Court and in Industrial Tribunals and three different views had been expressed thereon
viz.,

1. The Dispute between an employer and single workmen cannot be an Industrial Dispute.

2. It can be an Industrial Dispute.

3. It cannot per se be an Industrial Dispute, but, may become one if it is taken up by a Trade
Union or a number of workmen.
Contd.
• The controversy was set at rest by Supreme Court in the Express Newspapers Ltd V. State

Industrial Tribunal UP and otherAIR1957 SC532, where it was held that a dispute between an
employer and single workmen does not fall within the definition of industrial dispute, but if
workmen as a body or a considerable section of them make a common cause with a
individual workmen then such a dispute would be an industrial dispute
• In workmen v/s. Dharmpal Premchand AIR 1966, SC182 the Court held that,
notwithstanding the width of the words used in Sec.2 (k), a Dispute raised by a single
workman cannot become an Industrial Dispute unless it is supported either by his own Union
or in the absence of Union, by a substantial number of workmen. This position of Law created
hardship for individual workmen who were discharged, dismissed, retrenched or whose
services were otherwise terminated when they could not find support by a union or any
appreciable number of workmen to espouse his cause.
Contd.
• In order to mitigate this hardship section 2A was inserted by the Industrial Dispute (Amendment) Act,

1965 and the whole controversy ended in the year 1965 and the situation was changed in cases of
dismissals and retrenchments when the Parliament amended the Industrial Dispute Act, 1947 and
added section 2 A, according to which, even the individual disputes relating to termination of service
would now be called industrial disputes under the Act, notwithstanding whether they have been taken
up by any union or by a number of workmen.
• Perhaps this clause has been inserted with the object that dismissed, discharged; retrenched or

terminated workman may not be left on the mercy of other workers who are in service or the trade
union for obtaining justice in the matter.
• However, section 2A has its own limitations; it does not declare all individual disputes to be industrial

disputes. It covers only cases of discharge, dismissal, retrenchment or termination of an individual

workman. It means, it is only when a dispute is connected with a discharged, dismissed retrenched or
terminated workman that it shall be treated as an industrial dispute and not other matters. So, if the
dispute or difference is connected with some other matter e.g. payment of bonus/ gratuity etc. then it
would have to satisfy the test laid down in judicial decisions
Contd.

• What number of workmen are required to espouse the case of an individual workman in

order to convert an individual dispute into an industrial dispute is not clear from the available
judicial verdicts. Courts have, often, used phrases like “a substantial number of workmen”,
“appreciable number of workmen” etc., which give rise to a lot of uncertainty. Because, to
decide what number could be substantial etc., one has to necessarily go by the facts and
circumstances of each Case which, in all probabilities, would not be the same.