Can We Lock Out Just One Section of Our Factory Under the ID Act of 1947? Seeking Advice

Hi all,

I have some doubts about the following: Under the ID Act of 1947, can we lock out one part of the factory or not? For example, we have four sections: 1) assembly, 2) welding, 3) machining, and 4) paint shop. If we want to lock out only machining, can we do that or not?

Please help me out.

Regards,
Hoods

Hi,

I beg to differ. Sometimes, wrong information posted on a site may cause losses to organizations if acted upon, and also to the person who carries the belief that information provided on the site is perfect and expert opinion.

I earnestly request all members not to treat the opinion given by members as the last word and to seek a second opinion from experts in the field.

I am writing this because many times I have observed opinions/information posted that are contrary to the settled legal position.

Having respect for all who have expressed legal opinions on this topic, let me make the position clear.

Lockout is the antithesis of a strike. It is a weapon in the hands of management to persuade, through coercive processes, the employee to see the employer's point of view. When workers resort to a strike, management often uses this weapon. It is not the case that you declare a lockout in one portion of the plant. A lockout is a temporary closure of a business place to press the workers to make them accept the employer's view.

It is different from a layoff and closure. Before declaring a lockout, management has to act very cautiously because if this weapon is used without considering all aspects, it may backfire on management.

It is a layoff that can be declared in a section or department of an industrial establishment and NOT a lockout.

You are free to contact me for any further clarification.

Regards,

Anil Kaushik

Email: akaushikus@yahoo.com

Mobile: 09829133699

Hi, Mr. Anil Kaushik has correctly explained the provisions under the ID Act. An employer can declare a lockout as a retaliation to the workers going on strike. If the management wants to close down any department or section, the best option would be to lay off the workmen or to retrench them by following the procedure. Under no circumstances can a lockout be declared unless there is an ongoing strike.

Cyril

Dear Mr. Anil Kaushik & Members,

I am extremely sorry. I have misunderstood the question. However, I have now understood the question regarding the layoff. I sincerely apologize for the confusion.

Regards,
Kalyan

Hi, Mr. Kaushik,

Under section 2 of the ID Act, the definition is as follows: "lock-out" means the temporary closing of a place of employment or the suspension of work, or the refusal by an employer to continue to employ any number of persons employed by him.

In this definition, it is mentioned that "refusal by an employer to continue to employ any number of persons employed by him." Does it mean we can call some workers and stop other workers?

You are requested to shed more light on this, and if you can provide a reference to any decided case, it would be of great help to all of us.

Regards,
Hoods

Dear HOODS,

I fully agree with the answer by Mr. Kaushik. Many people give wrong information without understanding the legality and consequences. Please ensure you seek advice from experts.

If a group of workmen resorts to an illegal strike, the employer can use it as a weapon and lock out the factory. I have encountered this situation twice in my career. The employer needs to seek consent/permission from the Labour Commissioner in this regard. If you intend to close any section/department, you should apply to the Labour office but be prepared to face the consequences.

I suggest that you inform the management to seek the advice of expert legal counsel before making any decisions.

Regards,
Bhushan

My dear friend,

I am not an advocate. I am an HR professional, but labor law is my subject.

The phrase 'refusal by an employer to continue to employ any number of persons' in the definition of lockout corresponds to the phrases 'cessation of work' or 'refusal to continue to work or accept employment' occurring in the definition of 'strike.' The phrase on which you have tried to put emphasis to draw the conclusion that you can refuse to employ 'any' number of persons while continuing your rest of the business activity is unfounded and is a wrong interpretation. This phrase in the definition of lockout has to be read with the rest of the definition and also the word 'lockout' in totality. In Ferozdeen vs. State of Bengal 1960 I LLJ 244 (249) SC and in Mohammad Samsudin vs. Sasamusa Sugar works 1956 I LLJ, SC has emphasized that these words have to be given a restricted meaning. The word 'any' connotes unlimited but with the condition that it has to be with respect to a temporary closure of the business place or suspension of work on his premises.

Remember that a lockout exists only when it is in terms of a complete suspension of business activity in a particular business premises.

Illustrations:

1. The closure of the business place for a duration of three days, which was in retaliation to certain acts of workmen, was held to be a lockout (Express Newspaper case) 1962 II LLJ 227 (SC).

2. Temporary suspension of work necessitated by a lack of stock was held not to constitute a lockout. Anamallais Timber Trust Case 1952 II LLJ 604.

3. Temporary stoppage of work due to a lack of raw material was held not to be a lockout. Praboo Pandey vs. J.K. Jute Mills 1956 I LLJ 588.

4. Closure of a section of an industry carried on by the employer on account of trade reasons was held not to be a lockout, and the closure of another section also as a result of the refusal of the workmen to work in sympathy for the workmen of the former section was held not to be a lockout. Industrial and General Engineering Co. vs. Their Workmen 1964 II LLJ 438 (Mys.).

Difference between lockout and layoff:

The concept of 'lockout' is essentially different from the concept of 'layoff,' and so where the closure of business amounts to a 'lockout' under S. 2(l), it would be impossible to bring it within the scope of 'layoff' under S.2(kkk). The points of distinction between 'layoff' and 'lockout' may be broadly stated as follows:

1. 'Layoff' generally occurs in continuous business, whereas 'lockout' is a closure of business for the time-being.

2. In the case of 'layoff' owing to the reasons specified in S. 2(kk), the employer is unable to give employment to one or more workmen, whereas in the case of 'lockout,' the employer deliberately closes the business and locks out the whole body of workmen for reasons which have no relevance to the causes specified in S. 2 (kkk).

3. In the case of 'layoff,' the employer may be liable to pay compensation as provided by Ss. 25C, 25D, and 25E of the Act, but liability for compensation cannot be invoked in the case of 'lockout' as the liability of the employer in cases of 'lockout' would depend on whether the 'lockout' was justified and legal or not.

4. The provisions applicable to the payment of 'layoff' compensation cannot be applied to cases of 'lockout.'

5. 'Lockout' is resorted to by the employer as a weapon of collective bargaining and also ordinarily involves an element of malice or ill-will, while 'layoff' is actuated by the exigencies of the business.

There are some resemblances also:

1. Both 'layoff' and 'lockout' are of a temporary nature and both arise out of and exist during an emergency, though the nature of emergencies in each case is different.

2. Both in 'layoff' and 'lockout,' the relationship of employment is only suspended and is not severed.

3. 'Layoff' resorted to in contravention of the provisions of S.25-M is illegal and punishable under S. 25Q, while 'lockout' declared in contravention of the provisions of Ss. 10(3), 10A (4A), 22, or 23 is illegal and punishable under S. 26 of I.D. Act.

Hope the issue is clear.

Regards,

Anil Kaushik
Chief Editor - Business Manager (HR) Magazine
Smriti Sadan, 28-Raghu Marg, Alwar - 301001 (Raj.) India
Mob.: 09829133699
SUBSCRIBE BUSINESS MANAGER, INDIA'S BEST HR MAGAZINE & UPDATE YOURSELF ON HR & IR

Dear Mr. Kaushik,

I would like to thank you for providing me with the information on the subject. I found the information both interesting and informative. Again, I appreciate your effort and help.

Thank you very much.

Regards,
Hoods

PS: Please let me know the procedure for subscribing to your magazine.

Dear Mr. Anil Kaushik,

The above information was very helpful to our organization. We have a case in the Madras High Court, and we have challenged by way of a Writ with regard to LOCKOUT. We found the judgments quoted by you very useful. Though we are not able to get the judgment of Mohammad Samsuddin vs. Sasa Musa Sugar. Can you please help us get the citation of the judgment?

Thanking you,

Regards,

Dinesh Director Pradeep Stainless India Pvt Ltd. Chennai

Your reply was quite clear and detailed. I have a query. Can anyone be of help here?

Employer Lockout Due to Low Production and Financial Conditions

Can an employer go for a lockout due to low production, poor financial conditions, or high losses over the years? If yes, what are the procedures and consequences? Where can I find this information?

Dear All, Can you kindly let me know whether we have to calculate yearly EL wages with deductions for lockout days, or should we pay them full EL wages? For example, can you confirm if it is correct to deduct wages for lockout days from the employees' EL entitlement when they have been on lockout for 10 days?

Thanks, Uma Padmaraj