Liability of Employer to Pay Compensation under the Employees’ Compensation Act, 1923

 

 Liability of Employer to Pay Compensation under the Employees’ Compensation Act, 1923

Introduction:

The Employees’ Compensation Act, 1923 (formerly the Workmen's Compensation Act, 1923), is a social welfare legislation aimed at providing financial protection to workers and their dependents in case of accidents arising out of and in the course of employment, resulting in injury or death.

1. Scope and Applicability:

• Objective: To provide compensation to employees/workmen for personal injury, disablement, or death due to accidents during employment.
• Applicability: Applies to certain classes of employers and employees as defined under the Act, particularly in hazardous employments.

2. Employer’s Liability – Section 3:

The cornerstone provision of the Act is Section 3, which deals with the liability of the employer to pay compensation.

Conditions for Liability:

The employer is liable to pay compensation if:

1. Personal injury is caused by accident
2. The accident arises out of and in the course of employment
3. The injury results in either:
   • Death
   • Permanent total disablement
   • Permanent partial disablement
   • Temporary disablement (total or partial)

3. Exceptions to Employer’s Liability (Provisos to Section 3):

No compensation is payable if:

• Injury does not result in disablement for more than 3 days
• Injury is caused by employee under the influence of drugs or alcohol
• Injury is due to willful disobedience of safety rules or removal of safety guard (Section 3(1)(b))

However, even in such cases, if the injury results in death or serious permanent disablement, the employer may still be liable (as per judicial interpretation).

4. Concept of "Accident Arising out of and in the Course of Employment":

Arising Out of Employment:

There must be a causal connection between the employment and the injury.

In the Course of Employment:

The injury must occur during the working hours and at the place of work or while engaged in a duty related to employment.

Case Law: Mackinnon Mackenzie & Co. Pvt. Ltd. v. Ibrahim Mahmmed Issak, AIR 1970 SC 1906
The Supreme Court held that there must be a causal connection between the employment and the accidental injury. Mere presence at the place of employment is not enough; the injury must arise as a result of employment.

5. Doctrine of Added Peril:

If the workman voluntarily does something outside the scope of their duty and is injured, the employer may not be liable.

Case Law:  Saurashtra Salt Manufacturing Co. v. Bai Valu Raja, AIR 1958 SC 881
The Court held that the employer was not liable where the employee took an unreasonable risk that led to the accident.

6. Compensation in Case of Occupational Diseases – Section 3(2):

• The employer is liable if the employee contracts a disease specified in Schedule III, provided the disease is peculiar to that employment.
• This is treated as if injury was caused by an accident arising out of employment.

7. Employer's Liability in Case of Contractors – Section 12:

• If a principal employer engages a contractor and a worker employed by the contractor is injured, the principal employer is still liable to pay compensation as if the worker was directly employed.

 Case Law:  General Manager, G.I.P. Railway v. Shankar, AIR 1937 Nag 215
The Court held the principal employer liable even though the injured worker was employed by a contractor.

8. Compensation in Case of Death or Permanent Disablement – Section 4:

• Death: 50% of monthly wages × relevant factor (as per age) or ₹1,20,000 (whichever is more)
• Permanent total disablement: 60% of monthly wages × relevant factor or ₹1,40,000 (whichever is more)

9. Employer Not to Contract Out Liability – Section 17:

Any contract that tries to remove or reduce the employer's liability under the Act is null and void.

10. Penalty for Default – Section 4A:

• If the employer fails to pay compensation within one month, the Commissioner may:
  • Order payment of interest @ 12% p.a.
  • Impose a penalty up to 50% of the amount due

Conclusion:

The Employees’ Compensation Act, 1923 ensures protection to employees and their families against unforeseen employment-related injuries. The liability of the employer is statutory and arises automatically on fulfillment of the conditions under Section 3. The Act strikes a balance between the rights of employees and the obligations of employers, ensuring prompt and adequate compensation.

Employer’s Liability

Condition	Employer Liable?
Injury in course of employment	Yes
Occupational disease in Schedule III	Yes
Injury due to employee’s negligence	No (with exceptions)
Death due to accident during duty	Yes
Work with added peril (outside duty)	No

Important Case Laws:

1. Mackinnon Mackenzie & Co. v. Ibrahim Mahmmed Issak, AIR 1970 SC 1906
2. Saurashtra Salt Manufacturing Co. v. Bai Valu Raja, AIR 1958 SC 881
3. General Manager, G.I.P. Railway v. Shankar, AIR 1937 Nag 215

🎯 Mnemonic: “CA-DOPPEL”

Think: The employer's duty is to "CA-DOPPEL" the burden of injury!

Letter	Stands For	Explanation
C	Course of Employment	Injury must occur during employment
A	Arising out of Employment	There must be a causal link
D	Disablement or Death	Employer liable for both
O	Occupational Disease (Sec 3(2))	Liability even if no accident, if listed in Schedule III
P	Principal Employer (Sec 12)	Liable for contractor’s workers too
P	Provisions (Sec 3 exceptions)	No liability if injury <3 days, under intoxication, etc.
E	Extent of Compensation (Sec 4)	Depends on wages and nature of injury
L	Late Payment Penalty (Sec 4A)	12% interest + up to 50% penalty for delay

🧠 Memory Tip:

Imagine the employer carrying a "CA-DOPPEL" bag, with all his duties stuffed inside — any mistake, and the bag bursts (i.e., liability explodes).

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Health and Welfare of Workers under the Factories Act, 1948:

 Health and Welfare of Workers under the Factories Act, 1948:

(a) Health of Workers 

Chapter III (Sections 11 to 20) of the Factories Act, 1948 deals with provisions relating to the health of workers. These provisions aim to ensure hygiene and healthy working conditions in factories.

Provisions:

1. Section 11 – Cleanliness:

   • The factory must be kept clean and free from effluvia arising from drains, privies, or other nuisances.
   • Floors, workrooms, and benches must be cleaned regularly.
   • Whitewashing or repainting must be done at intervals prescribed by law.

2. Section 12 – Disposal of Wastes and Effluents:

   • Effective arrangements must be made for disposal of wastes and effluents.
   • The disposal must conform to pollution control norms.

3. Section 13 – Ventilation and Temperature:

   • Proper ventilation must be maintained in the factory.
   • Temperature should be such as to secure reasonable conditions of comfort for the workers.

4. Section 14 – Dust and Fume:

   • Measures must be taken to prevent inhalation and accumulation of dust, fumes, or other impurities.
   • Exhaust appliances must be provided wherever dust or fume is generated.

5. Section 15 – Artificial Humidification:

   • If humidity is artificially increased, it must be done as per prescribed standards.
   • The water used should be clean and free from contamination.

6. Section 16 – Overcrowding:

   • Adequate space must be provided for each worker.
   • Minimum space: 9.9 cubic meters per worker after the Act came into force.

7. Section 17 – Lighting:

   • Proper lighting, natural or artificial, must be provided in all work areas.
   • Glare and shadows must be avoided to protect workers’ eyesight.

8. Section 18 – Drinking Water:

   • Safe and wholesome drinking water must be made available.
   • It must be clearly marked and located within accessible distance.
   • If there are more than 250 workers, the water must be cooled and supplied during hot weather.

9. Section 19 – Latrines and Urinals:

   • Sufficient and separate latrine and urinal facilities must be provided for male and female workers.
   • They must be maintained in a clean and sanitary condition.

10. Section 20 – Spittoons:

• Spittoons must be provided at convenient places and kept clean.
• Workers must use them; violations may attract fines.

(b) Welfare of Workers 

Chapter V (Sections 42 to 50) of the Factories Act, 1948 deals with the welfare of workers, ensuring their physical, moral, and social well-being.

Provisions:

1. Section 42 – Washing Facilities:

   • Adequate and separate washing facilities must be provided for male and female workers.
   • The facilities must be conveniently accessible and kept clean.

2. Section 43 – Facilities for Storing and Drying Clothing:

   • Provision must be made for storing clothes not worn during working hours.
   • Facilities should also be available for drying wet clothes.

3. Section 44 – Facilities for Sitting:

   • Sitting arrangements must be provided for workers who are required to work in a standing position to avoid fatigue.

4. Section 45 – First-Aid Appliances:

   • One first-aid box must be provided for every 150 workers.
   • The box must be under the charge of a responsible person trained in first-aid treatment.
   • If there are more than 500 workers, an ambulance room with prescribed equipment must be maintained.

5. Section 46 – Canteens:

   • Factories employing more than 250 workers must provide and maintain a canteen.
   • The canteen should be run in accordance with prescribed rules.

6. Section 47 – Shelters, Rest Rooms, and Lunch Rooms:

   • In factories with over 150 workers, adequate and suitable rest shelters or lunch rooms must be provided.
   • These must be properly ventilated and kept clean.

7. Section 48 – Creches:

   • Factories with more than 30 women workers must provide a creche for the use of children under the age of six years.
   • It must be adequately staffed and maintained in a hygienic condition.

8. Section 49 – Welfare Officers:

   • Every factory with more than 500 workers must employ qualified welfare officers.
   • Their role includes looking after workers' welfare, grievances, and social security benefits.

9. Section 50 – Power to Make Rules for Welfare:

   • The State Government is empowered to make rules for further welfare measures such as education, recreation, housing, and more.

Conclusion:

The provisions under the Factories Act, 1948 reflect the legislature’s commitment to ensuring that workers are protected from health hazards and provided with necessary welfare facilities. These measures help improve the overall working environment and productivity in industrial establishments.

HEALTH Provisions (Sections 11 to 20)

🎯 Mnemonic: "Clean Dusty Ventilated Rooms Need Just Light, Water, Latrines, and Spittoons"

Breakdown:

Section	Provision	Mnemonic Element
11	Cleanliness	Clean
12	Disposal of Waste	Dusty (dust/waste)
13	Ventilation & Temp.	Ventilated
14	Dust and Fume	Rooms (air quality)
15	Artificial Humidification	Need
16	Overcrowding	Just
17	Lighting	Light
18	Drinking Water	Water
19	Latrines & Urinals	Latrines
20	Spittoons	Spittoons

WELFARE Provisions (Sections 42 to 50)

🎯 Mnemonic: "Wash & Store, Sit & Aid, Eat, Rest, Kids & Officer Welfare"

Breakdown:

Section	Provision	Mnemonic Element
42	Washing Facilities	Wash
43	Storing & Drying Clothes	Store
44	Sitting Arrangements	Sit
45	First-Aid	Aid
46	Canteens	Eat
47	Rest Rooms/Lunch Rooms	Rest
48	Creches for Children	Kids
49	Welfare Officers	Officer
50	Power to Make Rules	Welfare (rules)

💡 Pro Tip:

To remember health = early sections (11–20) and welfare = later sections (42–50), think:

"Healthy first, Welfare later!"

 🔖 Blog by Chandan Sha | For more legal insights, stay tuned to Study on Law Hills.

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By Chandan Sha
One-stop blog for law notes, moot memorials & legal updates

Study on Law Hills is a legal blog that simplifies Indian law for students and professionals. From Constitution to Criminal Law, it offers:

• 📚 Law notes for exams
• ⚖️ Moot court memorials (Petitioner & Respondent)
• 🧾 Case commentaries & updates
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Differences between Lockout and Closure

What is Lockout?

According to Section 2(l) of the Industrial Disputes Act, 1947, a lockout refers to the “closing of a place of employment or the suspension of work or refusal to continue to employ any number of persons employed in an establishment.” A lockout is essentially the employer’s action to prevent workers from entering the workplace and performing their duties.

What is Closure?

On the other hand, closure refers to the permanent shutdown of an industrial establishment or part of it. Section 2(cc) of the Industrial Disputes Act defines closure as “the permanent closing down of a place of employment or part thereof.” The closure is an employer’s action to permanently discontinue operations in an establishment, resulting in the termination of employees.

Aspect	Lockout	Closure
Definition	Temporary suspension of work by the employer to resolve disputes.	Permanent shutdown of a business or part of it.
Duration	Temporary, lasts until the dispute is resolved.	Permanent, ends business operations.
Purpose	To exert pressure on workers to accept terms or resolve a dispute.	Economic reasons or decision to discontinue operations.
Legal Framework	Governed by Sections 22, 23, 24(3) of the Industrial Disputes Act.	Governed by Section 25(O) of the Industrial Disputes Act.
Employer’s Action	Employer refuses to allow workers to work.	Employer permanently stops business operations.
Conditions for Legal Action	Must follow legal procedures, such as issuing a lockout notice.	Requires advance notice and compensation to workers.
Compensation	Workers are not typically entitled to compensation unless the lockout is illegal.	Workers are entitled to compensation based on years of service.
Impact on Workers	Temporary inability to work, but no permanent job loss.	Permanent loss of job, with compensation.
Legal Status	Legal under specific circumstances (e.g., response to an illegal strike).	Legal if proper notice and compensation are given.
Required Notice	Must comply with notice requirements, especially in public utility services.	Must give notice as per legal requirements for compensation.
Employer’s Control	Employer can initiate or lift the lockout.	Employer has full control over the decision to close.
Effect on Employment	Does not end employment unless prolonged.	Ends employment permanently.
Example	Employer locks out workers in response to a strike.	Employer closes a factory due to financial losses.

Conclusion

While lockout and closure may appear similar on the surface, they differ significantly in their legal nature, purpose, duration, and impact on both employers and employees. A lockout is a temporary measure aimed at resolving a dispute, while a closure is a permanent decision to shut down business operations. Both actions are subject to different legal procedures and requirements under the Industrial Disputes Act, 1947. Understanding the differences between these two concepts is essential for employers, employees, and legal professionals involved in industrial relations to ensure compliance with the law and to safeguard the rights of workers in case of such events.

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Strikes and lockouts in public utility services

Under the Industrial Disputes Act, 1947, special provisions have been made regarding strikes and lockouts in public utility services to ensure that essential services are not disrupted abruptly, affecting the general public.

 Definition: Public Utility Service

As per Section 2(n) of the Industrial Disputes Act, 1947, a public utility service includes:

• Railways
• Transport services
• Postal, telegraph or telephone service
• Water, power, sanitation services
• Banking, insurance, etc.
  (The appropriate government may declare any service as a public utility for a maximum of six months at a time.)

Provisions Relating to Strikes in Public Utility Services

Section 22(1): Prohibition of Strikes Without Notice

No person employed in a public utility service shall go on strike:

1. Without giving notice of strike within six weeks before striking.
2. Within 14 days of giving such notice.
3. Before expiry of the date of strike specified in such notice.
4. During pendency of any conciliation proceedings and seven days after such proceedings.

Purpose: This safeguards the continuity of essential services and gives time for dispute resolution.

Provisions Relating to Lockouts in Public Utility Services

Section 22(2): Prohibition of Lockouts Without Notice

No employer carrying on a public utility service shall declare a lockout:

1. Without giving notice of lockout within six weeks before locking out.
2. Within 14 days of giving such notice.
3. Before expiry of the date of lockout specified in the notice.
4. During pendency of any conciliation proceedings and seven days after such proceedings.

Purpose: Prevents arbitrary closure of essential services impacting the public and employees.

Duty to Report Notices

As per Section 22(3), both strike and lockout notices must be reported to the conciliation officer within five days of receipt.

Penalties for Illegal Strikes/Lockouts

• Section 26: Provides for imprisonment up to 1 month and/or fine up to ₹50 for illegal strikes and lockouts.
• Section 27–28: Prescribe penalties for instigation or financial aid to illegal strikes/lockouts.

Case law 

🔹 Indian Steam Navigation Co. Ltd. v. Their Workmen, AIR 1960 SC 1058

Held: The Supreme Court emphasized the importance of proper notice and peaceful negotiations before resorting to a strike in public utility services.

🔹 Bangalore Water Supply and Sewerage Board v. A. Rajappa, AIR 1978 SC 548

Held: Laid down the broad interpretation of "industry" and confirmed that public utility services like water supply boards fall under the scope of the Act.

🔹 T.K. Rangarajan v. Government of Tamil Nadu, AIR 2003 SC 3032

Held: The Supreme Court ruled that government employees have no fundamental, legal or moral right to strike. Even in public utility services, strikes must be restricted and only after exhausting legal remedies.

🔹 State of Bihar v. D.N. Ganguly, AIR 1958 SC 1018

Held: Once conciliation proceedings have begun, going on strike is illegal under Section 22. The intent of the legislature is to encourage peaceful resolution, not disruption.

 Conclusion 

Under the Industrial Disputes Act, Sections 22–28 regulate strikes and lockouts in public utility services, ensuring:

• Mandatory notice period
• Prohibition during dispute resolution
• Penal consequences for violations

The judiciary has upheld these restrictions in favor of maintaining public order and balancing industrial interests.

Citation:

• Industrial Disputes Act, 1947, §§ 2(n), 22–28.
• Indian Steam Navigation Co. Ltd. v. Their Workmen, AIR 1960 SC 1058.
• Bangalore Water Supply v. A. Rajappa, AIR 1978 SC 548.
• T.K. Rangarajan v. State of Tamil Nadu, AIR 2003 SC 3032.
• State of Bihar v. D.N. Ganguly, AIR 1958 SC 1018.

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Industrial Dispute Act of 1947

What is Industrial Dispute Act of 1947?

The Industrial Disputes Act 1947 is the most recent milestone in India’s industrial growth. In recent years, the Act has seen fresh additions. The 1947 Industrial Disputes Act governs all industrial entities in India that employ one or more people. Collective disputes or disputes sponsored by trade unions or a considerable number of workers and individual disputes involving the termination of services are examples of conflicts.

History Of Industrial Disputes Act 1947

• World War I sparked a new awakening among working-class individuals who had previously been ruled by employers regarding service and compensation.
• To meet their goals, employees went on strike, while bosses countered by announcing lockouts. Several strikes and lock-outs in 1928-29 compelled the government to pass the Trade Disputes Act 1929.
• The Trade Dispute Act of 1929 was enacted to resolve industrial disputes. The Trade Union Act established trade unions as legal entities.
• The fundamental flaw of the Act was that no provision was provided for the procedures launched under the Act to be rendered when restrictions on the right to strike and lock-out in public utility services were enforced.
• However, this flaw was eventually remedied by authorising, under Rule 81-A of the Defense of Indian Rules, the referral of industrial conflicts to adjudicators for resolution during the Second World War (1938-1945).
• Rule 81-A was going to expire on October 1, 1946, with the end of the Second World War, but it was saved using the Government’s Emergency Powers. The major clause was kept in the 1947 Industrial Disputes Act.

Highlights Of Industrial Disputes Act 1947

Industrial Disputes Act, 1947
Long Title	An Act to make provision for the investigation and settlement of industrial disputes, and for certain other purposes.
Territorial Extent	Territories under direct British control, later implemented in the Princely States upon their integration with the Indian Union
Enacted by	Central Legislative Assembly
Assented to	11th March 1947
Commenced	1st April 1947

.

Objectives of the Industrial Dispute Act 1947

• The Industrial Disputes Act aims to ensure industrial peace and harmony by establishing apparatus and procedures for investigating and resolving industrial disputes through discussions.
• The legislation only applies to the organized sector.
• This Act provides precise instructions and guidelines for the works committee for firms and all workers to pursue measures for healthy working relationships.

Features of the Industrial Disputes Act 1947

• While the mediation and adjudication are underway, strikes and lockouts are unlawful.
• Any industrial dispute can be referred to an industrial tribunal by consent of the parties involved or by the State Government.
• An award must be binding on both parties to the dispute for no more than one year, and the government must enforce it.
• In the public interest or an emergency, the competent authority may declare the transportation, coal, iron, and steel industries public utility services under the Industrial Disputes Act for six months.
• When an employee is laid off or reduced in size, the company is required to provide compensation.
• Workers’ compensation is also covered in the statute.
• Several agencies are available to resolve industrial disputes, including a works committee, a Conciliation Officer, a Board of Conciliation, a Labor Court, and a Tribunal.

.

Authorities Under the Industrial Disputes Act

The act establishes several authorities, including the works committee, conciliation officer, conciliation board, courts of inquiry, labour court, tribunal, and national tribunal.

Works Committee

• This is stated in section 3 of the legislation, which states that each industrial establishment must have a works committee with equal participation from both the employer and the employee. 
• It is to settle the issue in the first instance through the mediation procedure in the early stages of the conflict. The works committee also makes remarks on disputed issues from time to time.

Conciliation officer

• The provisions of the conciliation officer are discussed in Section 4 of the Industrial Disputes Act of 1947.
• It specifies that the competent government, i.e. the federal government, state government, or local authority, will appoint as many conciliation officers as necessary.
• The conciliation officer’s responsible for mediating and facilitating the resolution of industrial disputes. The conciliation officer might be appointed permanently or temporarily.

Board of Conciliation:

• The competent government appoints the board of conciliation under Section 5. The Board of Conciliation was formed to promote the resolution of industrial disputes. The board comprises the chairman and two or four additional members.
• The board's chairman is independent, and the other members are appointed in equal numbers to represent the parties in disputes. The party appoints the person who represents the party.
• The party must designate such representatives within the time frame specified. If the party fails to do so, the competent government may appoint the individual to be the party’s representative.

Courts of Inquiry

• Section 6 of the legislation goes on to discuss the establishment of a court of inquiry to investigate the topic at hand. 
• The court of inquiry will be presided over by an independent person or individuals chosen by the competent authorities. If the court has two or more members, any one of them may be selected as chairman.

Labour Court

• Section 7 of the legislation discusses the competent authorities' establishment of the labour court. It may establish as many labour courts as it sees proper for adjudicating industrial disputes as indicated in Schedule II.
• It is made up of one individual who the appropriate government selects.

Tribunal

• Section 7A deals with the provision for the establishment of one or more tribunals for the adjudication of disputes concerning the features stated in schedules second or third. The tribunal will be composed of one person chosen by the relevant government.

Powers and Duties of Authorities

• Notice to enter premises: An official or board member, for investigating an existing or past industrial dispute, can enter the premises of the relevant establishment after giving reasonable notice.
• Production of documents before Tribunals: An official can summon individuals for assessment or request and review necessary documents related to the industrial dispute.
• Cost: The council, national council, or labour courts have the authority to decide and determine the payment of costs incurred in the proceedings.
• Granting of adjournments: The bench of judges in various tribunals and courts may grant adjournments to the concerned parties.
• Powers of the Tribunal: Tribunals and courts have similar powers as vested in a common court under the Code of Civil Procedure, 1908, for various issues.
• Fixation of wage structure: Compensation for supervisory work and those drawing more than 1600 per month for activities primarily of a managerial nature.
• Retirement age on account of industrial workers: Workers may retire upon reaching the superannuation age as per the contract between the employer and employee.
• Incentive Payment Scheme: Incentives are given to those wrongfully terminated from their services.
• Jurisdiction to decide the dispute regarding factory closure: Courts can resolve disputes related to factory closure based on relevant facts, ensuring individual or party rights are protected.
• Power of the Tribunal to interfere with the action taken by the management: The tribunal can interfere with management actions only under court supervision.
• Award of Industrial Tribunal: The tribunal's award must be in writing and signed by the presiding officer.
• Power of Labour Court: The labour court can decide industrial disputes through adjudication as per the second schedule.
• The finding of fact by Labour Court: The labour court can ascertain facts through formal investigation.
• Power of the High Court to issue a writ against decisions of the Tribunal: The High Court can issue a writ against the tribunal's decisions upon an official appeal.
• Special leave under Article 136 of the Constitution against the decision of the Industrial Tribunal: Special leave petition allows anyone to be heard in the case of any tribunal/national tribunal verdict.

Penalties under Industrial Disputes Act

Some of the penalties under the industrial disputes act are listed below.

Section 26: Penalty for illicit strikes and lock-outs

• Any workman who participates in an unlawful strike will face imprisonment for up to six months, a fine of up to 60 rupees, or both.
• Any employer initiating an illegal lock-out will be imprisoned for up to one month, a fine of up to 1000 rupees, or both.

Section 27: Penalty for inducement, etc.

Anyone inducing or encouraging others to participate in an unlawful strike or lockout will be liable for imprisonment of up to six months, a fine of up to 1000 rupees, or both.

Section 28: Penalty for providing financial aid to unlawful strikes and lock-outs

Anyone providing financial aid directly to support any unlawful strike or lockout will face imprisonment for up to six months, a fine of up to 1000 rupees, or both.

Section 29: Penalty for breach of settlement or award

A person breaking any term of a settlement or award binding on them under this Act will face imprisonment for up to six months, a fine, or both. An additional fine of up to 200 rupees per day may be imposed if the breach is continuous.

Section 30: Penalty for disclosing secret information

Any willfully revealing confidential information as referred to in Section 21, contrary to its provisions, will face imprisonment for up to six months, a fine of up to one thousand rupees, or both.

Section 30-A: Penalty for closure without notice

An employer shutting down an undertaking without complying with the above provisions will face imprisonment for up to six months, a fine of up to 5000 rupees, or both.

Section 31: Penalty for various offences

• An employer violating the provisions of Section 33 will face imprisonment for up to six months or a fine of up to one thousand rupees, or both.
• Anyone contravening any provisions of this Act or any rules made under it, for which no specific penalty is given elsewhere, will be liable to a fine of up to 100 rupees.

Significant Objectives of the Industrial Disputes Act, 1947

• To promote good relations between labour and industry and to offer a forum for conflict resolution through adjudicator authority.
• To establish a committee for conflict resolution between industry and labour, with the right of representation by a registered trade union or an employer organization.
• Prevent illegal strikes and lockouts.
• Reach out to workers who have been laid off, unfairly terminated, etc.
• Give workers the right to collective bargaining and encourage conciliation.

Applicability of Industrial Disputes Act, 1947

• The Industrial Disputes Act applies across India to every industrial institution engaged in any business, commerce, production, or distribution of products and services, regardless of the number of workers employed.
• The Act applies to everyone hired in an institution for hire or reward, including contract labour, apprentices, and part-time workers, to do any manual, clerical, skilled, unskilled, technical, operational, or supervisory work.
• This Act does not apply to persons primarily engaged in a managerial or administrative capacity, persons engaged in a supervisory capacity and persons subject to the Army Act, Air Force Act, and Navy Act, or those in police service or officers or employees of a prison.

Controversy Related to Industrial Disputes Act, 1947

• The two sections of Chapter V-B of the Industrial Disputes Act are considered labour market rigidity.
• This provision’s principal goal is to ensure that an employer cannot recruit or fire an employee at will.
• To take such action, they must first obtain approval from the labour commissioner. Because this issue is also on the concurrent list, various states have imposed even harsher restrictions and requirements, making layoffs, reductions, and closure much more difficult.
• This provision raises concerns about the legislation, particularly about Chapter V-B. This provision has been subjected to several changes throughout the years.
• The legislation was enacted to create equipment and procedures for investigating and resolving workplace disputes that were applicable to everybody, regardless of size or sector.
• It even includes measures for layoffs, reduction (reducing the extent of activities), and industry collapse.

Protection of People Under Industrial Dispute Act of 1947

The Industrial Dispute Act of 1947 includes provisions for the protection of people in the context of industrial disputes.

• Layoff and Retrenchment: The Act places restrictions on the layoff and retrenchment of workers, ensuring job security to a certain extent.
• Compulsory Recognition of Trade Unions: It provides for the compulsory recognition of trade unions by employers, allowing workers to collectively bargain for their rights.
• Prohibition of Unfair Labor Practices: The Act prohibits unfair labor practices by both employers and trade unions, safeguarding the interests of employees.
• Right to Strike: While it recognizes the right to strike, the Act lays down specific conditions and procedures to be followed before workers can resort to strikes.
• Settlement of Disputes: It establishes mechanisms for the settlement of industrial disputes, including the formation of boards and labor courts.
• Retrenchment Compensation: In cases of retrenchment, the Act mandates the payment of compensation to affected workers, offering them financial protection.
• Reemployment of Retrenched Workers: The Act also provides for the reemployment of retrenched workers when job opportunities become available.
• Health and Safety Measures: It includes provisions for the protection of the health and safety of workers, ensuring their well-being in industrial environments.
• Payment of Wages During Strikes: The Act outlines rules regarding the payment of wages during strikes, balancing the interests of workers and employers.
• Legal Remedies: Workers have access to legal remedies under the Act, allowing them to seek justice and protection against unfair labor practices.

Conclusion

The Industrial Disputes Act of 1947 is India’s major legislation controlling dispute settlement. It was adopted to allow for the investigation and resolution of industrial disputes, to prevent illegal strikes and lockouts, and to offer assistance to workers facing layoffs, reduction, or unfair dismissal. The Industrial Disputes Act of 1947 governs Indian labour law regarding trade unions and individual workers engaged in business on the Indian mainland.

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