Navigating Industrial Disputes: Importance of Employee Agreements under the Industrial Dispute Act

Dear Friends,

I recently got an opportunity as a Labour Welfare Officer. Currently, in my company, there are a lot of disputes ongoing between the management and the workers, such as salary hikes, requests for a workers' union, death compensation, etc. The workers went on strike to demand their requests. The management wanted to establish an agreement with the employees stating mutually beneficial conditions for a one-year timespan. The employees agreed as well, but they are not willing to sign the document on stamp paper or green sheets. According to the Industrial Disputes Act, we need to send a copy of the agreement to the government officials.

My query is regarding the stamp paper. Can we enter into an agreement with ordinary sheets and send it to the government? I fear that if the agreement is not valid, the troublemakers in our company may go on strike again, demanding unreasonable requests before the agreement's deadline.

I seek your feedback regarding the agreement. Is it a good decision to proceed with? Or should we compromise with the employees without an agreement and settle matters without invoking the Industrial Disputes Act?

Thank you for your guidance.

Dear,

As you mentioned, employees are not interested in signing the agreement. It is better for you and the management. Verbal agreements do not hold any legal meaning in a dispute. However, if you document everything in writing and do not fulfill all the points, employees can take the matter to the labor court with that copy.

It is advisable to agree with the verbal discussion.

Ratikanta Rath

Thank you, Ratikanta, for your thread.

I only fear that if we settle down with verbal discussion, again in a few months' time, a few notorious employees would make unreasonable petitions. Therefore, we have decided to put an agreement for at least one year stating that employees should not engage in illegal activities such as strikes, go-slows, etc.

Regarding the agreement, can we enter into the agreement on ordinary A4 sheets? Is it legally valid? Usually, for government purposes, green sheets (Legal 8.5 x 14) would be used instead of bond papers.

Dear,

As per your thread, I am feeling there are no ongoing union activities running in your organization, which is good for your management. To initiate a strike or lockout, certain procedures must be followed. If any employee does not adhere to the procedure, it will be considered an illegal strike. In such cases, not only can you terminate the employee, but you can also take legal action against them. Generally, no management likes to see union activities starting in the company because employee demands never cease, and they may resort to strikes as a negotiating tool. It is advisable to provide them with verbal assurances and fulfill all their demands for better industrial harmony.

Another important point is that even if you document all the terms on plain paper and have it signed by both parties (employer and employee) with witness signatures from both ends, it can also serve as legal evidence.

Ratikanta Rath

Dear Mr. David,

The agreement with the workmen need not be on stamp paper. But the agreement should comply with the provisions of Rule 25 of the Tamilnadu Industrial Dispute Rules. I have referred to the Tamilnadu Industrial Dispute Rules as I presume that your company should be situated in Tamilnadu and that the appropriate Government for your company under the Industrial Disputes Act is the Government of Tamilnadu. In case the appropriate Government for your company under the Industrial Disputes Act is the Central Government, please refer to the corresponding provisions under the Industrial Disputes (Central) Rules. If your company is in some other state and if the Government of that state is the appropriate Government for your company, please refer to the similar provisions in the Rules under the Industrial Disputes Act framed by that Government. Various High Courts have held that if the settlement under the Industrial Disputes Act is not signed according to the provisions of the Industrial Disputes Act and the Rules framed thereunder, then the settlement becomes illegal.

With regards,

Respected Sir,

Thank you for your reply. I tried sending an email to the above-mentioned ID elaborating on the situation, but it was not delivered. Could you provide another email ID for me to share relevant details of the dispute for consultation?

Thank you

Dear Mr. David,

You need to first examine the reasons why your workers supported the strike. Are there any pending demands or what is the cause of their dissatisfaction? It may not necessarily be solely about money. The workers may have other issues that can be resolved by engaging in effective dialogue with them. Don't resist the union, as doing so may lead to more problems of action and reaction. You can reason with the leaders because ego issues can also harm your business. I hope you have studied the recent Maruti Suzuki problem, where they suffered a loss of 1500 crores due to union activities. Therefore, as an HR professional, please consider all these aspects.

It is advisable to have the settlement on stamp paper under section 2(p) of the Industrial Disputes Act, which will carry more legal sanctity. Ensure that the settlement is worded properly to bind the parties from future disputes. Make sure that all the workers understand the consequences of the settlement.

Thank you.

Thank you for your post, sir. As mentioned earlier, salary hike, workers' committee, and death compensation are their demands. In that, we first settled the salary hike by giving an increment of a 40% raise, and then we wanted the workers to enter an agreement. The other two demands, we said, will negotiate later when the agreement is completed.

Would be grateful if you could send me the Maruti Suzuki case. We don't want any union disturbances; hope this workers' committee would help us for a while.

Thank you

If you are giving such a hefty raise of 40%, what could be the grievances of the employees? If there is any letter from them regarding any other grievances, please examine the issues they are raising. There is no need to address all the demands at once. How long has the death compensation demand been pending? What are the concerns of the workers' committee? Do you have any reservations about having specific worker representatives on the committee? It is essential to address these concerns and reassure them that they can call off the strike so discussions can continue, as the strike is disrupting production and will negatively impact everyone. Have you considered seeking assistance from a conciliation officer or HR advisor to mediate and resolve the dispute?

Regarding the Maruti Suzuki case, I am relying solely on the media, which raises questions about its authenticity. However, it is widely known that they incurred heavy losses due to the strike.

Dear,

It is always advisable to have a composite dialogue with the workers. It would help you to address all kinds of negativity that may be prevalent among them. The Maruti Suzuki case is in no way related to this, as it turns out to be an unfair labor practice, since the demands raised by the workers were not considered by the management.

Regards,
gg