Understanding Employee Rights: How to Address Disputes Beyond Termination Under the ID Act 1947

Hi Everybody,

I have a small confusion regarding something; I hope someone can help me out.

We know that an employee can raise an industrial dispute regarding discharge/dismissal/termination/retrenchment through sec2A of the ID Act 1947. Now my question is, how will an employee raise a dispute, or in other words, what will be the recourse for an employee through the ID Act 1947 in case the dispute doesn't fall into the above four categories, such as a dispute regarding OT payment, unfair labor practice, etc.?

Eagerly waiting for your response.

Thanks and regards

The Industrial Disputes Act does not confine its purview to the settlement of disputes arising out of retrenchment, discharge, or dismissal. It is meant for the settlement of any dispute between the employer and employee or between employees. Therefore, if there is any disagreement regarding overtime payment, non-payment of overtime wages, or any dispute relating to the non-payment of customary allowances, leave, or leave encashment, you can refer it for conciliation or to the Labour Court or Tribunal for redressal.

If you experience any unfair labor practices, you can definitely approach the authorities under the ID Act such as the Conciliation Officer, Board of Conciliation, Court of Inquiry, Labour Court, Industrial Tribunal, and National Tribunal. For the jurisdiction of the Labour Court and Tribunal, refer to Schedule II and III of the ID Act.

Regards,
Madhu.T.K

Dear Mr. Madhu,

Thank you for your reply and clarification, but to be very honest, I am still not satisfied. What you are saying is that all disputes can be settled through conciliation, arbitration, and adjudication. However, a dispute can only be settled if it is raised by an individual/employee. So, in that case, we know that under the above-mentioned causes, i.e., discharge/dismissal/termination/retrenchment, a dispute can be raised by an employee and settled through conciliation, arbitration, and adjudication through Section 2A of the Industrial Disputes Act 1947.

But what will happen if the dispute is not regarding the above four cases? Then, what is the respite for the employee because they cannot raise a dispute through Section 2A? In that case, what will be the recourse for the employee, and under which section of the Industrial Disputes Act 1947 can the individual raise a dispute?

I hope I have made myself clear.

Regards

Dear Sir,

Thank you very much for the clarification you provided on the ID Act. It is very useful for me. I have a question for you as follows:

1. Our organization's Registered Office is in Delhi.
2. The PF No. is also from Delhi.
3. The ESI No. is also from Delhi.
4. We implemented a revision of the Minimum Wages according to the Delhi Minimum Wages Revision last time dated 1.2.09.
5. The Place of Operation of our organization is in Gurgaon, Haryana, under the Punjab Shop & Commercial Establishment Act 1948.
6. Haryana has also revised its Minimum Wage dated 25.7.09, which we did not implement as I thought we are under the Delhi Minimum Wage Act.
7. As the Delhi Minimum Wage is revised again, when I proposed a change in the salary of employees below the Minimum Wages, the management is refusing to accept it, citing that our organization is covered under the Haryana Minimum Wage Act.

Hence, please advise on what to do. Should I tell the management to seek legal opinion or implement the change?

Awaiting your reply.

I remain,

Regards,
JB Panda
Senior Executive-HR

Dear Mr. Panda,

Please stick to the topic under discussion. If you have a query, please start a different thread. We would be more than happy to answer your query.

Regards

Hi Panda,

Sorry Awvik. Your company's registered office is in Delhi, which is also registered under S&E. Could you please clarify?

Points 2 and 3: There is no issue, as EPF is centralized across India and can be managed on an All India basis, but it must meet the MWA. ESIC in Delhi & NCR can be singular but must meet the MWA. The All India MWA is revised twice a year, sometimes thrice but very rarely, usually in February and September.

The problem does not arise whether you follow the MWA of Haryana or Delhi; you can choose the higher MW to avoid any issues. Please ask the management to conduct a legal review as they are obligated to pay the MWA.

Salary should be revised based on location. The management must maintain a separate wages register based on location if they choose to strictly follow or pay less than the Delhi MWA.

Regards,
Santosh

Dear Awvik,

I presume that your query is regarding disputes other than non-employment disputes. Disputes relating to other conditions of service such as Charter of Demands, wage revision, etc., will be covered under section 2K of the ID Act. However, such disputes must be supported by a registered union, and an individual workman cannot raise a dispute under section 2K of the ID Act. Hope I understood your query correctly.

Regards,
Patrick Ryan

For raising an industrial dispute under Section 2A of the ID Act for dismissal, discharge, retrenchment, and termination of a workman, one has to first raise the dispute before the local conciliation machinery. The conciliation officer would try to achieve an amicable settlement between the management and the aggrieved workmen. However, if no settlement is reached, the conciliation officer will submit a failure report to the appropriate government (i.e., the Labour Commissioner of the State). Upon receipt of the failure report, the government will make a reference under Section 10 of the ID Act to the Labour Court/Industrial Tribunal to adjudicate on whether the dismissal/termination was justified or legal. If the termination is found to be illegal, the workman would be entitled to certain benefits. After the adjudication of the dispute by LC/IT, an award is given, which is then submitted to the appropriate government. The award becomes enforceable after the expiry of the stipulated time.

In case of a dispute arising from non-payment of overtime and other benefits that can be quantified in terms of money, the workman has the remedy of moving to the specified Labour Court under Section 33C(2) of the ID Act. In this scenario, the workman is not required to go through the Conciliation Machinery.

I trust that I have been able to bring clarity to your query. Regards, Ashok K. Ghose, Pune

Dear Madhu Sir,

Please intervene and provide the correct guidance. The revised Delhi Minimum Wage is higher than the revised Haryana Minimum Wage. What should I do next?

I am eagerly awaiting your esteemed guidance at the earliest.

I remain,

Regards,
JB Panda

Since your company's jurisdiction is Delhi, you have to follow the minimum wages of Delhi only. However, for employees working in Haryana areas, the minimum wages as applicable to that area will have to be paid. There is nothing wrong in fixing more than two rates of wages in the same establishment.

Regards,
Madhu.T.K

Thank you, Sir, for clarifying the issue, which I am sure will be useful for every HR person working in the National Capital Region.

However, I must say that I find the attitude of Mr. Panda's company very worker-unfriendly. Why should a good company stick to the bare minimum wages?

Secondly, the difference in minimum wages between two states is a mere few rupees. Should not the management have a compensation policy that is higher than the minimum wages of both states?

I would like to add that, in my personal experience, I have never come across a company that pays the exact amount of minimum wages, not a rupee more. This has helped me understand the term "Baniya Company" perfectly! A company that pays its lowest level of workers the exact amount of Minimum Wages fixed by the concerned state government (not a paisa more). Moreover, such companies are ignorant of the concept of fair wages and living wages.

Warm regards.

Since your company's jurisdiction is Delhi, you have to follow the minimum wages of Delhi only. However, for employees working in Haryana areas, the minimum wages as applicable to that area will have to be paid. There is nothing wrong in fixing more than two rates of wages in the same establishment.

Regards,
Madhu.T.K

Dear Awvik,

I hope any non-employment or unemployment issue pertaining to an individual employee could raise a dispute under sec 2A of the Industrial Disputes Act, 1947. Other than the above grievances, service-related issues like O.T. payment, unfair labor practices, etc., can be raised as disputes under Sec 2K of the ID Act, 1947.

In the normal course, O.T. and unfair labor practices can be redressed with the help of the Inspector of Factories Department.

Rajasekaran. MK.

Dear All,

As per section 2a, "any dispute or difference... arising out of discharge, dismissal, retrenchment, or termination," when the contract of services is terminated, the workman is certainly entitled to receive all remuneration due to him. It is expected that he would be paid wages and other charges due to him for the period he worked, including any overtime, which falls under section 2a.

Discussing matters related to unfair trade practices, is that unfair trade practice related to discharge, dismissal, retrenchment, or termination? If not, he is to approach the civil court. For example, if the matter is related to transfer, reduction in rank, demotion, or promotion, etc. Additionally, this section is to be read with schedules 2nd, 3rd, and 4th under sections 7 and 7A of the Industrial Dispute Act.

The scope of this section enables the conversion of an individual dispute related to employment into an industrial dispute.

That's what I understand. Your comments are welcomed.

Regards,

Rosy

Dear Rosy,

This is just for your information that section 2a under the Industrial Disputes Act, 1947 relates to the definition of the 'appropriate Government'.

If you are not satisfied with the answers provided by Mr. Madhu and Mr. Ghose, you may seek recourse in the civil court. The remedy under the Industrial Disputes Act is available for the workman.

Dear Madhu Sir,

Thank you for clearing my doubts. I will proceed accordingly. With regard to Mr. Raj Kumar's remark, I would like to inform you that we work within a certain restricted environment, i.e., between management's economic guidelines, employee benefits, and statutory compliance. Therefore, we have very little room to operate.

Thanks and Regards,

JB Panda
Executive-HR

Dear Sir,

The issues raised are two;

One is overtime. The employee may initially approach for overtime. Any representation received from an employee has to be given a proper and justifiable reply by the management. In the absence of an appropriate reply from the management, the employee has two remedies: one is to file a complaint before the inspector of factories or file a claim under section 33c(2) of the Industrial Disputes Act.

I hope the reply will be satisfactory to you.

Dear Sirs,

The second issue raised is unfair labor practice. The employees may organize as a group and raise an industrial dispute under section 2k of the Industrial Disputes Act.

Thank you.

Dear balajeepanda,

As an HR professional, I understand the problem cited by you. My criticism was neither personal nor against HR, but directed against such "management" and their compensation philosophy.

See, if we do not protest or highlight these things, how can we ensure fair living standards for the poor workers? We should at least create an awareness that in the organized sector, one should pay the workers a bit more than the minimum wages fixed by the government.

Sorry awvik, for the intrusion in your thread :)

Regards.

Dear All,

At the end of it all, I find myself in a position where I can say that I am more confused than before. I had a question regarding the section of the ID Act 1947 under which an employee can raise a dispute in case the issue does not fall under section 2A (definitely not 2K and 33 (2C)).

Let's consider an example:

An employee is aggrieved by the fact that the management has not made him permanent despite working for 10 years in the company as a casual worker. Whether an employee should be made permanent or not is undoubtedly the management's prerogative (in the absence of any settlement between the management and the union). However, the employee in this case can feel aggrieved and may want to raise a dispute against the management for unfair labor practices. Here lies the confusion; he cannot seek redress under section 2A, so what would be his option in that case? He must file a case against the management, but under which section? Remember, if he does not have a valid case, it will not progress to the stages of conciliation, arbitration, or adjudication.

I hope I have made myself clear this time.

Regards

Dear Awvik,

Certainly, he can raise the dispute under the provisions of the ID Act of 1947.

Regards,
Rajasekaran.MK.

Dear Mr. Panda,

You have to follow the minimum wages of Haryana as your work is falling in Gurgaon. The employees are working in Haryana, so Haryana MWA is applicable. The second issue is P.F and E.S.I; although you are registered in Delhi, the ESI dispensary should be nearby your employees' workstation.

Dear Awvik,

Allegations of unfair labor practices can render the person concerned liable for prosecution under Section 25U of the ID Act (Chapter V C). If the complaint is proved, the person found guilty will be liable for imprisonment for a maximum term of 6 months or with a fine which may extend to Rs 1000 or both.

Regarding liability for non-payment of overtime (OT), a complaint to the Inspector of Factories/Labor Inspector should set the ball rolling under the Factories Act/Shops & Estt Act. However, the individual employee will be within his rights to move the Labor Court under Section 33C(2) of the ID Act for the recovery of money due. But prima facie, he has to establish before the court that he is entitled to the amount claimed. In Central Bank of India Vs. P.S. Rajagopalan case (1963) II LLJ, Justice Gajendragadkar of the Hon'ble Supreme Court of India had held that Section 33C(2) of the ID Act empowers the Labor Courts to try claims by workmen which fall outside the purview of settlements and awards. However, only pre-existing rights can be enforced under this section (Dispute of Right as opposed to Dispute of Interest). In East India Coal Co Ltd vs. Rameshwar (1968) I LLJ SC, it was held that the Labor Court has jurisdiction to compute Bonus under the Bonus Scheme of the Coal Mines PF & Bonus Scheme 1948. Claims for OT allowance under the statute can be entertained by the Labor Court under Section 33C(2) as per the ratio in Shivaji Gulabrao Bhoite v. B.N. Biscuit Confectionary Works (1988) II LLJ Bom DB.

Thank you.

Dear all,

This is in reference to the queries raised regarding Industrial Disputes and some of the clarifications provided. I am afraid that further clarifications are required.

A worker can raise an Industrial dispute directly on only two counts:

1. Under Sec 2A in connection with his Dismissal, Discharge, Retrenchment, or Termination.

2. Under Sec 33C (2) of the Act to claim any money or benefit that can be computed in terms of money under a settlement or award or under Chapter V A or Chapter V B. Non-payment of OT wage, customary allowance, leave encashment, etc., can be claimed by the workman by filing a 'claim petition' directly before the labor court. He can represent himself in the labor court.

Any other dispute has to be raised by the Union of which he is a member or a group of workmen under Sec 2(k). Such disputes are raised by filing a petition before the Labor Officer or such other conciliation officer or board as the appropriate government has decided. If the conciliation fails, the authority concerned will send the failure report to the Labor Department, which will refer the dispute for adjudication before the Labor court or Tribunal. The Labor department has the discretion to refer or refuse to refer disputes; but as per the law established by the Supreme Court, such discretionary power cannot be capriciously and unreasonably exercised. The petitioner Union can file a writ in the High court and obtain an order for reference in case the department has not done so even after a reasonable time and the dispute is not frivolous in nature.

Regards,

Sanu Soman

Let me first address the question regarding the payment of minimum wage to the workmen employed in the Haryana Works of the company with its registered office in Delhi. I agree with Mr. MADHU and others that the jurisdiction is determined by the place of work. However, I would like to slightly differ because the questioner has clearly stated that the minimum wage rates in Delhi are higher than those in Haryana, and the company has already started implementing the Delhi rates at the Haryana Works. Therefore, in my opinion, you cannot switch to a lower rate now based on territorial jurisdiction and other related reasons.

Raising an Industrial Dispute Under Section 2(k)

Moving on to the issue of raising an industrial dispute under Section 2(k) of the Industrial Disputes Act, 1947, regarding the grievances of an individual workman concerning his employment, as mentioned by the knowledgeable members, support from a Trade Union, not necessarily a registered one, is essential. However, if the issues are addressed by a statute with a specific redress mechanism provided, and recourse to an alternative remedy is either expressly or impliedly prohibited, you cannot raise an industrial dispute under the Industrial Disputes Act.

For instance, in cases of non-payment of gratuity and overtime wages, you can file a claim for gratuity recovery under Section 8 of the Payment of Gratuity Act, 1972 before the relevant Controlling Authority, and for non-payment of overtime wages, you can file a claim under Section 15 of the Payment of Wages Act, 1936 before the Authority or opt for a claim under Section 33C(2) of the Industrial Disputes Act. However, it is crucial to remember that claims under Section 33C(2) are akin to execution proceedings.

Regards.

As you rightly pointed out, Section 2-A was inserted to provide specific relief to workmen in the case of dismissal, discharge, termination, and retrenchment.

Section 9C - Grievance Redressal Machinery

Section 9C provides for the settlement of individual disputes. It mandates that every industrial establishment employing twenty or more workmen shall have one or more Grievance Redressal Committees for the resolution of disputes arising out of individual grievances. (As amended with effect from 15-9-2010)

I think you are concerned with the settlement of individual disputes. Conciliation, Arbitration, and Adjudication are the settlement machineries. Grievance handling machinery redresses the grievance and does not allow it to become a dispute.

Regards

Thank you so much for your response in the backdrop of the amended provisions of Section 9-C of the Industrial Disputes Act, 1947. However, there is only one simple correction: As per Section 9-C (5), the setting up of the so-called Grievance Redressal Committee cannot affect the right of the workman to raise an industrial dispute on the same matter. However, before taking recourse to raising a dispute, he has to exhaust the remedy provided for under Section 9-C.

Understanding the Scheme of the Industrial Disputes Act, 1947

If we carefully analyze the scheme of the Industrial Disputes Act, 1947, we will understand that the spirit of the Act is the prevention and resolution of industrial disputes through collective bargaining between the partners of production. The provisions for the formation of a Works Committee under Section 3, the Grievance Redressal Committee under Section 9-C, as well as the constitution of the Board of Conciliation under Section 5, are pointers to this end. That's why it is said in a lighter vein that the worst settlement is better than the best award.

Regards

Dear Umakanthan ji, Thanks for your post. I fully agree with you. My intention is always to resolve the issue on three points. The issue should be resolved (1) in the least possible time, (2) with the least cost, and (3) with the least and less cumbersome procedure. When you have a remedy under Section 9-C, why not try that? Why should the workman go to conciliation, arbitration, or adjudication when he can try to settle it at his establishment level itself?

I have not overlooked Section 9-C(5). Resorting to an alternate remedy is not prohibited. Hence, the workman may proceed under the ID Act 1947.

Dear Seniors/Colleagues,

My question is, if an employee is receiving a salary of more than ₹18,000 per month and has grievances related to salary, fringe benefits, and other matters, are they eligible to raise a dispute under the ID Act?

If no, then why?

If yes, then how?

Hoping for your reply.

Thanks,
Mukesh

He can raise an industrial dispute provided he is not an employee having supervisory or managerial powers. Though supervisory or managerial powers have not been defined in the ID Act, authority either to sanction leave of a subordinate, initiate disciplinary action against a subordinate, or appraise the performance of a subordinate is considered as managerial rights, which will make an employee not eligible for any protection of the ID Act.

Madhu.T.K