Page 193 - DMGT306_MERCANTILE_LAWS_II

Mercantile Laws – II

Notes The Industrial Disputes Act (IDA) of 1947. Particular attention has been paid to its Chapter V-B,
introduced by an amendment in 1976, which required firms employing 300 or more workers to
obtain government permission for layoffs, retrenchments and closures. A further amendment
in 1982 (which took effect in 1984) expanded its ambit by reducing the threshold to 100 workers.
It is argued that since permission is difficult to obtain, employers are reluctant to hire workers
whom they cannot easily get rid of.

!

Caution Job security laws thus protect a tiny minority of workers in the organised sector
and prevent the expansion of industrial employment that could benefit the mass of workers
outside. It is also argued that the restriction on retrenchment has adversely affected
workplace discipline, while the threshold set at 100 has discouraged factories from
expanding to economic scales of production, thereby harming productivity.
Several other sections of the IDA allegedly have similar effects, because they increase workers’
bargaining strength and thereby raise labour costs either directly through wages or indirectly
by inhibiting work reorganization in response to changes in demand and technology. The Act
also lays down

10.2.1 Objectives of Industrial Disputes Act

Following are the objectives of Industrial Disputes Act:

 Promotion of measures for securing amity and good relations between employer and
workmen
 Investigation and settlement of industrial disputes

 Prevention of illegal strike and lock-outs
 Relief to workmen in the matter of lay-off, retrenchment and closure of an undertaking
 Promotion of Collective Bargaining

10.2.2 Scope and Coverage of Industrial Disputes Act

The Industrial Disputes Act, 1947, extends to the whole of India, and is applicable to all industrial
establishments employing one or more workmen. It covers all employees both technical and
non-technical, and also supervisors drawing salaries and wages upto 1600 per month. It excludes
persons employed in managerial and administrative capacities and workmen subject to Army
Act, Navy Act, Air Force Act and those engaged in police, prison and civil services of the
Government. As regards disputes, it covers only collective disputes or disputes supported by
trade unions or by substantial number of workers and also individual disputes relating to
termination of service. For purposes of this act the term “dispute” is defined as dispute or
difference between employers and employees, which is connected with the employment and
non-employment or the terms of employment or with the condition of labour of any person
[section 2(k)].
Industrial Disputes concerning any industry carried on by or under the authority of Central
Government or by a Railway company or concerning any such controlled industry as may be
specified in this behalf by the central government.

188 LOVELY PROFESSIONAL UNIVERSITY