Know what is Lockout and how it is different from strike, lay-off and closure as per Indian Industrial Law
Lockouts, under section 2 (l) of the Industrial Dispute Act. The Ingredients of lockouts are as follow:
1. Whenever the employer is declaring lockout it shall come within the meaning u/s 2(l) of the act, 3 actions:
a. When there is the temporary closure of the workplace for employment by the
employer
b. Suspension of work by the employer.
c. Refusal by the employer to continue to employ any number of workman employed
by him.
2. it should be motivated by coercion
3. Whenever the employer is declaring a lockout, it shall come within the ambit of the industry as mentioned under section 2(j).
4. Lockout shall be made when there is an industrial dispute.
Only it's dictionary meaning shall be used while interpreting the meaning of
lockout, as mentioned u/s 2(l) of the case.
Section 2(l), it does not include discharge of a worker. It is linked with the payment of wages. Whenever an employer declares a strike to be a lockout, then the employer is letting go of his obligation of paying the wages to workers.
Ramachandra Spinning Mills
In an industry, when a strike take place to which as a countermeasure employer takes out lockout.
-What action can amount to lockout, objective and extended meaning of lockout. 2 measures normally taken by the employer.
The court said that whenever an employer takes these 4 actions it would amount to lockout:
1. If an employer shuts down his place of business as retaliation to strike,
which initiated in his industry, will amount to lockout
2. whenever employer does not want to temporarily shut down his place, but he
was forced by his workers to do so and he has no other remedy, will amount to
lockout
3. whenever the employer has to act (belligerent), will amount to lockout
4. however if the employer is shutting down his place of business (even for
temporarily), because he is unable to sell his goods or shortage of raw
material or unable to get power or fuel to run industry or losing money, will
not amount to lockout.
The objective of the lockout is to prevent violence, to protect his property
and ensure there is no threat to life to anybody.
Mere suspension of work will not amount to a lockout, there has to intention
attached to it to make it lockout.
Engineer Mazdoor Sabha v ST Belgramin[1]
There was serious misconduct on the part of workers, a fight broke out between
them and created a threat of life both for management people and workers as
well. Because it endangered, the employer of the industry declared it as a lockout.
Issue: Is the lockout justified or not? and are the workers entitled to wages
or not?
Court held that whenever lockout happens due to serious misconduct on the part
of workers, in the consequences of endangering the lives of the workers and
management people(who are working for the employer) which could be foreseen. In
such a situation, the lockout will be justified lockout as declared by the employer.
When there is an industrial dispute, employer in order to ensure there is no
loss of lives in the industry and employer has the apprehension that the strike
may break out into lockout it will be justified lockout. The employer is not in
absolute obligation to pay the wages in a justified lockout, but it is only in
unjustified lockout the employer is entitled to pay wages.
Krishna Sugar Mills v State of Uttar Pradesh[2]
Krishna sugar mill was closed down for 2 days because the workmen assaulted 2
employer officers of the industry. It was a state-run entity (public utility
service) u/s 2 (n). The lockout was declared without giving notice.
The court held that when the employer closed down his place of business for 2
days, it will amount to lockout. Though court agreeing with the fact that it is
a lockout, but in Public Utility Service if the lockout is declared without
notice, makes it illegal and unjustified and the employer is a violation the
provision of section 24 of the Industrial Dispute Act. Hence for these 2 days,
workmen will be entitled to payment of wages.
Difference between lockout and strike
1. The strike is defined as u/s 2(q) and lockout
under 2(l)
2. The strike is a weapon in the hand of workers
and lockout in the hand of the employer.
3. The strike is a retaliation to the lockout if
lockout happens first and vice-versa.
4. Strikes happen because of economic factors
generally e.g. bonus, wages etc. Whereas lockout is declared due to both
economic as well as non-economic factors e.g. endanger to life, political
pressure etc.
5. Strike can be bifurcated into the legal and illegal
strike and justified and unjustified trike, but a lockout cannot be further
bifurcated into such divisions.
Difference between Lockout and Closure
Management of Express Newspaper ltd v Its Workmen[3]
Court tried to differentiate between the closure and lockout as follow:
1. Lockout defined as defined u/s 2(l) of the act- temporary
closure of the place of work which is curable. Closure as defined u/s 2(cc) of
the act-permanent closing of a place of work and is uncurable.
2. In lockout place of business is closed, but
business is not closed. But in closure both the place of business and business
is closed.
3. The closure is not a weapon in the hands of the employer,
but the lockout is a weapon in the hands of the employer. As closure affects
both employer and workmen.
4. In closure relationship between employer and
workmen comes to an end. Whereas in lockout the relationship between employer
and workmen does not come to an end.
5. In bona-fide lockout, it can be illegal. That
lockout if violate the provision 24 of the act. But closure is always a legal
closure.
6. Lockout is declared as an answer to strike, or
whenever an industrial dispute has taken place. The closure may be due to
economic reason or unrecoverable loss and it is not an industrial dispute.
7. The lockout may turn into closure, but the closure
will not turn into lockdown.
If the alternate employment is provided by the employer, then the lock-out
compensation shall not be granted to the worker as the worker is already
getting wages from alternative employment. As per section 25 (F) of the
Industrial Dispute Act.
Maximum lay-off period by the employer to his worker is of 45 days in a year.
So, if the worker is layoff for more than 45 days in a year, then the employer
has to pay compensation to him. If even after 45 days the employer is not
providing the worker with any work, then the employer can even go for the retrenchment
process. So that the worker can work somewhere else.
Section
2 (gg) (kkk) of the act defines lay-off, which means the failure or
inability of the employer to employ the worker.
For the following reason if the worker is laid off by the employer then
he is entitled to layoff compensation:
1. Shortage of coal
2. Shortage of power
3. Shortage of raw material
4. Shortage of accumulation of stock
5. Breakdown of machinery
6. Natural calamity
Ingredient for lay-off:
1. Workers name was in the muster roll
2. Workers presented himself in the establishment
at the appointed time
Lay-off types:
1. Lay-off for full day:
The
worker has not been given work for more than 2 hours by the employer even after
the worker name is present in the master role and he has presented himself at
the appointed time. Then the employer has to pay compensation.
2. Lay-off for half day:
When
the employer has given work to the worker only for the 2nd
phase/shift and not in the 1st phase/shift and also the employer is
paying the worker for only one shift, though the worker was present at both the
time of shifts. Then the worker will be deemed to be laid off for half-day and
the worker is entitled to full basic wages and dearness allowances.
3. Lay-off for more than a day:
The worker is not provided with work for more than 1 day, even after the worker
presenting himself. Then the worker shall be entitled to full basic wages and
dearness allowance.
Provisions
Section 25 C: Rights of the workmen in a lay-off. If the worker is not a badli or casual workmen, he shall be in 1 year of employment and his name is present in the muster roll, then 50% of the basic wage plus dearness allowance shall be given as lay-off compensation.
Section 25 D: It is the duty of the employer to maintain muster roll and attendance sheet of all the workers. Only then the worker will be entitled to the lay-off compensation if the situation arises.
Section 25 E: It works as an advantage for the employer as it mentions the
cases in which the workmen will not be entitled to lay-off compensation.
Lay-off by the employer shall be justified lay-off and it shall not be
mala-fide. The worker must be informed following things while lay-off by the
employer:
1) Whether the worker shall remain or leave the place of work.
2) When will the normal work resume.
3) What time the workers have to present themselves when the normal working
hour starts.
Maximum for 45 days are allowed for lay-off by the employer in any calendar
year. And if the period of the lay-off exceeds this 45 day then it will
automatically convert into retrenchment. Therefore, no compensation is payable
after expiry of 45 days to the worker (unless there is any such agreement
between the employer and worker as no one wanted to get terminated from their
employment).
Also read - Who Is And Is Not A Workman As Per Judiciary - Industrial Dispute Act
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