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Unit 1: Philosophy of Labour Laws

to adjudications which contain the required adjudication provisions set out in the Construction Notes
Act, not to adjudications which rely on the provisions of the Scheme for Construction Contracts.
The Local Democracy, Economic Development and Construction Act provide that:
l z the parties may agree, in the construction contract, to confer power on the adjudicator to
allocate his fees and expenses between them - this agreement must be in writing;

l z if the parties agree, in the construction contract, to allocate liability for their own costs of
the adjudication that provision will be ineffective;

l z the parties are free to agree liability for their own costs of the adjudication after the notice
of intention to refer has been given - if they do so, this agreement must be in writing.
The Act does not address what will happen if a contract provision allocates liability for both the
parties’ costs and the adjudicator’s fees and expenses. It is arguable that in such a situation the
whole clause will be ineffective.

Interest

The adjudicator can only deal with interest on sums awarded if the contract contains a provision
dealing with interest, or alternatively if the parties agree.

Self Assessment

Fill in the blanks:

13. ................. a workman is one of the key methods of curtailing disputes amongst them and
achieving maximum productivity.
14. The Construction Act sets out a tight timetable of within ................. days of service of the
referral notice for submission of a response and for the adjudicator’s ultimate decision.
15. The ................. can only deal with interest on sums awarded if the contract contains a
provision dealing with interest, or alternatively if the parties agree.



Case Study Labour Unrest at Maruti

aruti Udyog Ltd. (MUL) is one of India’s leading automobile manufacturers and
the market leader in the car segment, both in terms of volume of vehicles sold
Mand revenue earned. It was established in February 1981, by Sanjay Gandhi, the
younger son of then Prime Minister of India, Mrs Indira Gandhi. It was taken over by Govt.
of India in February’ 1982. In October of the year 1983, Maruti entered into the collaboration
with Suzuki Motors, by which Suzuki acquired 26% of the equity and agreed to provide the
latest technology as well as Japanese management practices. The commercial production
and sales began by the end of 1983. The introduction of the Maruti 800 in 1983 marked the
beginning of a revolution in the Indian automobile industry. In Late 1990’s the company
had serious differences with Govt. over appointment of company’s managing director.
Suzuki referred the case for International arbitration and finally withdraws the case after
an amicable settlement was reached between Suzuki and Government of India.
For most of its history, Maruti Udyog had relatively few problems with its labour force.
The company trusts its employees to a greater extent and the employees in turn respond
by being totally devoted to the company. Both the managers and workers of Maruti wore
Contd...

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