Strike by contract workmen & thereafter lockout - Whether management can terminate the contract?

In one of our units in Chennai the contract workmen are represented by a trade union. The
contractor and the said union enter into periodical settlements providing for wage increase and other benefits. For the past few years, the settlement of wage is not resolved, and the contract workmen are indulging in strike even after the written advice by the Joint labor commissioner for withdraw the strike the union has not called off the Stike. On the other side failure report for the demand from 2018-2022 is just about for adjudication (it is signed by Govt for adjudication) Fresh demand for the period of 2018-2022 is also not concluded due to obstinate attitude of union.

The management has declared lockout of its establishment due to industrial unrest just outside the gate and practically facing other issues also due to stand still of allied activities.
However, management has decided to pay salary and wages to its own employee even for this lockout period also.
Now my question is -
- Whether management can terminate the contract as of now? Here i would like to clear the contractor doesn't have any contract with any of the other establishment.
- Whether Government authority can pass an order to pay for contract workmen?
Whether being a principal employee we should attend the conciliation meeting? (One meeting we have attended as a second party and clear our views)
Will be happy to receive the experts view on the same.

With Regards
Ranjan Kumar Dixit

Your queries are answered below:
1. Whether management can terminate the contract as of now? You are entitled to terminate the contract as per the agreed contract terms. Obviously, there is a breach of contract and as a consequence, you can terminate the contract. The contractor employees cannot challenge the contract termination as they are not a party to the contract.
2. Whether Government authority can pass an order to pay for contract workmen?
They may do so out of political compulsion but you can challenge it before the High Court and obtain favourable interim order against it.
3. Whether being a principal employee we should attend the conciliation meeting?
Having made your stand clear it is better to stay away from the conciliation meeting. Give a written reply to this effect if you have been invited for the meeting. The conciliation officer in his quest to find a settlement would force you to concede unnecessarily. At the same time have a clear understanding with the contractor on what he can agree with and what he should disagree with, totally as well as partially. However, keep in touch with the conciliation officer otherwise and give your constructive suggestions to resolve the differences.

For the betterment of the industry keep the doors open for a mutually acceptable solution rather than a confrontation to the hilt approach.

Thanks for your prompt reply further I will prefer more views keeping in view of gravity of the situation
Regards
Ranjan Ku Dixit

I think the view expressed by KK is more than enough and there cannot be any different view on it. So long as the contract is genuine, the dispute is between the contractor and his workmen and if the assigned work is disrupted, the contract can be terminated. But this will create a law and order issue in the area. That has to be tackled carefully. The workers know that they have no right to disrupt the operations of the principal employer but they also know that a solution will be found only when there is disturbance to the public.

I would like to invite Umakanthan Sir, who had handled such kinds of issues in Tamil Nadu itself as a conciliation officer when he was in service to share his views also.

With reference to the above this is to be noted that due to strike- lockout we have not processed the wage bill of contractor and due to this contractor has not paid wages for his workmen, we have given a notice to the contractor with a copy to conciliation officer that since bills and attendance are verified from unit itself under this present situation we would neither be able to reimburse nor we could be able to pay wages of contract workmen
However, our staffs and workmen salaries are being prepared by corporate office on the basis of electronic attendance system hence we paid.
Now conciliation officer of that area is forcing contractor and principal employer to pay the wages for the period for which he worked. OR are we legally payout the wages even during strike/ lockout? (As per my view we should pay once plant is open)
Can they force us under this current situation whether really there is a practical issue?

For the period the labours worked, you cannot forfeit or withhold any salary on the ground that their continued service is not available. Non payment of wages pertaining to the period the workers had worked is illegal. Therefore, you should pay the bill pertaining to that period. For the period the workers have not worked, obviously, since you have not received any service, no payment needs to be made.

Can we engage new contractor at this point of time when conciliation is going on
Can new contractor mobilise and engage willingness workmen in his roll
Whether old workmen has to resign and join with new contractor or without resining they may appoint by new contractor
Regards

When a conciliation is going on, it is better to avoid putting another contractor and workmen in the place because that will spoil the situation and may even lead to law and order situation in the area. Legally a principal employer can do it but I don't think it is practical. The old workers resigning from the rolls of the contractor and joining the new contractor etc will lead to worsen the situation. Try to prepone hearings and make conciliation faster.

Conciliation is happening on day to day basis but union is not coming down and the demand is also without any logic
Even they are getting at present in line with the permanent workmen
Hence as per me there is no option except to engage new contractor
If any ways to overcome the situation please let us know
Regards

You may discuss with the conciliation officer and decide. matter being referred for adjudication, appointing a new contractor will not be feasible. Moreover, the striking the workers will not permit the new workers to enter the premises they will create a law and order issue. Therefore, discuss the issue with the JLC and proceed.