Unfair Labour Practices and the Fifth Schedule of the Industrial Disputes Act, 1947

Unfair Labour Practices under the Fifth Schedule of the Industrial Disputes Act, 1947: A Scholarly Analysis

Introduction

The concept of 'unfair labour practice' (ULP) is a cornerstone of modern industrial jurisprudence in India, aimed at fostering harmonious relations between employers and workmen and ensuring social justice. The Industrial Disputes Act, 1947 (hereinafter "ID Act"), through amendments introduced by Act No. 46 of 1982, effective from August 21, 1984, formally codified ULPs.[11], [8] These amendments incorporated Section 2(ra) defining ULP, Section 25T prohibiting such practices, Section 25U prescribing penalties, and, crucially, the Fifth Schedule, which enumerates specific practices deemed unfair. This article undertakes a comprehensive analysis of the Fifth Schedule, examining its provisions, judicial interpretations, and its impact on labour relations in India, drawing extensively from statutory provisions and pertinent case law. The need for such codification was felt as prior to these amendments, the ID Act did not have a specific provision for preventing ULPs, though the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971 (MRTU & PULP Act) had already addressed this in the state of Maharashtra.[22]

Legislative Framework of Unfair Labour Practices in India

Genesis and Objectives

The legislative intent behind defining and proscribing unfair labour practices was to curb activities that undermine the principles of collective bargaining, victimise workmen for trade union activities, or otherwise exploit labour. The Government of Maharashtra, recognizing the need for a systematic law, had appointed a Tripartite Committee in 1968, which led to the enactment of the MRTU & PULP Act.[13] This Act aimed to provide for the recognition of trade unions for facilitating collective bargaining, define and provide for the prevention of certain ULPs, and constitute courts for these purposes, intending to be a code in itself for such matters.[16] The subsequent amendments to the central ID Act drew from such state-level experiences, seeking to create a national framework. The Supreme Court in Hindustan Lever Ltd. v. Ashok Vishnu Kate And Others noted that the ULP provisions in the ID Act are almost in pari materia with those in the MRTU & PULP Act.[22]

The Industrial Disputes Act, 1947 - Key Provisions

The ID Act incorporates a dedicated chapter, Chapter VC, dealing with ULPs. The core provisions are:

  • Section 2(ra): Defines "unfair labour practice" as "any of the practices specified in the Fifth Schedule."[9], [10], [11], [12], [20], [22]
  • Section 25T: Imposes a clear prohibition: "No employer or workman or a trade union, whether registered under the Trade Unions Act, 1926 (16 of 1926), or not, shall commit any unfair labour practice."[8], [9], [11], [12], [25]
  • Section 25U: Prescribes penalties for committing any ULP: "Any person who commits any unfair labour practice shall be punishable with imprisonment for a term which may extend to six months or with fine which may extend to one thousand rupees or with both."[11]

These provisions collectively establish a statutory mechanism to identify, prevent, and penalize ULPs, thereby protecting the rights of workmen and trade unions and promoting a fair industrial environment.

The Fifth Schedule: A Detailed Examination

The Fifth Schedule to the ID Act is the linchpin of the ULP framework. It is divided into two parts: Part I lists ULPs on the part of employers and their trade unions, and Part II lists ULPs on the part of workmen and their trade unions.[8]

Part I: Unfair Labour Practices on the part of Employers and Trade Unions of Employers

This part enumerates various actions by employers that are considered unfair. Key items include:

  1. To interfere with, restrain from, or coerce, workmen in the exercise of their right to organise, form, join or assist a trade union or to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection, that is to say—[8]
    • (a) threatening workmen with discharge or dismissal, if they join a trade union;
    • (b) threatening a lock-out or closure, if a trade union is organised;
    • (c) granting wage increase to workmen at crucial periods of trade union organisation, with a view to undermining the efforts of the trade union at organisation.
  2. To dominate, interfere with or contribute support, financial or otherwise, to any trade union, that is to say—
    • (a) an employer taking an active interest in organising a trade union of his workmen; and
    • (b) an employer showing partiality or granting favour to one of several trade unions attempting to organise his workmen or to its members, where such a trade union is not a recognised trade union.
  3. To establish employer-sponsored trade unions of workmen.[25]
  4. To encourage or discourage membership in any trade union by discriminating against any workman, that is to say—
    • (a) discharging or punishing a workman because he urged other workmen to join or organise a trade union;
    • (b) discharging or dismissing a workman for taking part in any strike (not being a strike which is deemed to be an illegal strike under this Act);
    • (c) changing seniority rating of workmen because of trade union activities;
    • (d) refusing to promote workmen to higher posts on account of their trade union activities;
    • (e) giving unmerited promotions to certain workmen with a view to creating discord amongst other workmen, or to undermine the strength of their trade union;
    • (f) discharging office-bearers or active members of the trade union on account of their trade union activities.
  5. To discharge or dismiss workmen—[9], [10]
    • (a) by way of victimisation;
    • (b) not in good faith, but in the colourable exercise of the employer’s rights;
    • (c) by falsely implicating a workman in a criminal case on false evidence or on concocted evidence;
    • (d) for patently false reasons;
    • (e) on untrue or trumped up allegations of absence without leave;
    • (f) in utter disregard of the principles of natural justice in the conduct of domestic enquiry or with undue haste; (The implications of a vitiated inquiry were discussed in Satish Ganesh Saphtarshi And Others v. M/S. Kirloskar Oil Engines Ltd. And Another[15] under the MRTU & PULP Act, where the court can hold the inquiry itself or permit a fresh one).
    • (g) for misconduct of a minor or technical character, without having any regard to the nature of the particular misconduct or the past record of service of the workman, thereby leading to a disproportionate punishment.
  6. To abolish the work of a regular nature being done by workmen, and to give such work to contractors as a measure of breaking a strike.
  7. To transfer a workman mala fide from one place to another, under the guise of following management policy.[11], [12]
  8. To insist upon individual workmen, who are on a legal strike to sign a good conduct bond, as a pre-condition to allowing them to resume work.
  9. To show favouritism or partiality to one set of workers regardless of merit. (This is Item 5 of Schedule IV of MRTU & PULP Act, as noted in The Maharashtra State Coop. Cotton Growers Marketing Federation[5], and a similar principle would apply under the ID Act's general ULP framework).
  10. To employ workmen as "badlis", casuals or temporaries and to continue them as such for years, with the object of depriving them of the status and privileges of permanent workmen.[18], [20], [21], [23], [24] This is perhaps one of the most frequently invoked provisions. The Supreme Court in H.D Singh v. Reserve Bank Of India And Others deprecated the practice of rotating employees to deny them benefits, terming it a ULP.[18] Similarly, in Regional Manager, State Bank Of India v. Raja Ram, the Court emphasized that for an action to be ULP under this item, it must be found that casuals/temporaries were continued for years with the specific "object of depriving them" of permanency.[20] The principle that such practices aimed at denying permanency constitute ULP has been consistently upheld, allowing Industrial/Labour courts to grant regularization, as seen in cases like Durgapur Casual Workers Union And Others v. Food Corporation Of India And Others[2] and Maharashtra State Road Transport Corporation And Another v. Casteribe Rajya Parivahan Karmchari Sanghatana[4] (though the latter was under MRTU & PULP Act, the principle is analogous). The Andhra Pradesh High Court in D. Poornachandra Rao And Another v. Tirumala Tirupati Devasthanamas also noted that treating posts as temporary for decades, despite their permanent nature, amounts to ULP.[19]
  11. To discharge or discriminate against any workman for filing charges or testifying against an employer in any enquiry or proceeding relating to any industrial dispute.
  12. To recruit workmen during a strike which is not an illegal strike.
  13. Failure to implement award, settlement or agreement. (This is Item 9 of Schedule IV of MRTU & PULP Act, as seen in Bajaj Auto Ltd. v. Bhojane Gopinath D. And Others[6] and The Maharashtra State Coop. Cotton Growers Marketing Federation[5]. A similar failure under the ID Act would constitute a ULP).
  14. To indulge in acts of force or violence.
  15. To refuse to bargain collectively in good faith with the recognised trade union.
  16. Proposing or continuing a lock-out deemed to be illegal under this Act. (The Supreme Court in General Labour Union (Red Flag) Bombay v. B.V Chavan And Others, dealing with the MRTU & PULP Act, held that the Industrial Court must determine if a closure is bona fide or a pretence amounting to an illegal lockout, which is a ULP[3]).

Part II: Unfair Labour Practices on the part of Workmen and Trade Unions of Workmen

This part addresses ULPs attributable to workmen or their unions. While the provided reference materials predominantly focus on employer ULPs, this part is equally significant for maintaining industrial discipline. Practices listed here include, inter alia:

  • Advising or actively supporting or instigating any strike deemed to be illegal under the ID Act.
  • Coercing workmen in the exercise of their right to self-organisation or to refrain from joining any trade union, i.e., picketing by force or violence, or threatening workmen with violence.
  • For a recognised union to refuse to bargain collectively in good faith with the employer.
  • Indulging in coercive activities against certification of a bargaining representative.
  • To stage, encourage or instigate such forms of coercive actions as wilful "go-slow", squatting on the work premises after working hours or "gherao" of any of the members of the managerial or other staff.
  • To stage demonstrations at the residences of the employers or the managerial staff members.

The inclusion of ULPs by workmen and their unions underscores the balanced approach of the legislation, aiming to regulate the conduct of both parties in an industrial dispute.

Judicial Interpretation and Enforcement

Role of Labour Courts and Industrial Tribunals

The primary responsibility for adjudicating complaints of ULPs under the ID Act lies with the Labour Courts or Industrial Tribunals constituted under the Act. These bodies are empowered to investigate allegations, make findings, and grant appropriate relief, which can include orders to cease and desist from the ULP, reinstatement of dismissed workmen, payment of back wages, and regularization of services.

The Supreme Court in Maharashtra State Road Transport Corporation And Another v. Casteribe Rajya Parivahan Karmchari Sanghatana, while dealing with the MRTU & PULP Act, affirmed the broad powers of Industrial and Labour Courts under Section 30 of that Act to rectify ULPs, including granting permanency.[4] This principle is extendable to the powers of adjudicatory bodies under the ID Act when dealing with ULPs under the Fifth Schedule. If an inquiry leading to dismissal is found to be vitiated due to ULP (e.g., violation of natural justice under Item 5(f) of Part I), the employer may be given an opportunity to lead evidence before the tribunal to prove the misconduct, as held in Bharat Forge Co. Ltd. v. A.B Zodge And Another.[7]

The "Object" Element in Proving ULP

A critical aspect in establishing certain ULPs, particularly Item 10 of Part I (employing temporary/casuals to deprive them of permanency), is proving the employer's "object" or intent. As observed in Regional Manager, State Bank Of India v. Raja Ram, it is not merely the continuation of temporary employment but the underlying motive of depriving workmen of permanent status and benefits that constitutes the ULP.[20] This often requires a careful examination of the factual matrix, including the duration of temporary employment, the nature of work, and any patterns of "hire and fire" or artificial breaks in service.[20], [21]

Distinction from Constitutional Remedies (Umadevi Jurisprudence)

A significant development in service law was the Supreme Court's judgment in State of Karnataka v. Umadevi (3) (2006) 4 SCC 1, which curtailed the powers of High Courts and the Supreme Court to order regularization of public employment de hors the rules. However, the Supreme Court has clarified that Umadevi does not entirely oust the jurisdiction of Industrial and Labour Courts to grant relief, including permanency, when a finding of ULP is established under industrial statutes. In Durgapur Casual Workers Union And Others v. Food Corporation Of India And Others, the Court reinstated a Tribunal's award for regularization, emphasizing that ULPs under the ID Act take precedence.[2] Similarly, in Maharashtra SRTC v. Casteribe Rajya Parivahan Karmchari Sanghatana, it was held that Umadevi does not dilute the powers of Industrial Courts under the MRTU & PULP Act to grant permanency upon finding ULP.[4] The Gujarat High Court in JUNAGADH AGRICULTURE UNIVERSITY THROUGH REGISTRAR v. KAILASHBEN NATWARLAL PANDYA also reiterated that statutory power is available to Labour Courts to grant permanency where an employer has indulged in ULP.[24]

Comparative Perspective: MRTU & PULP Act, 1971

The Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971, serves as an important legislative precursor and counterpart to the ULP provisions in the ID Act. Many judicial pronouncements interpreting the MRTU & PULP Act's Schedules II, III, and IV (which list ULPs) offer valuable persuasive authority for interpreting the Fifth Schedule of the ID Act, given their in pari materia nature.[22] Cases like Bajaj Auto Ltd. v. Bhojane Gopinath D. And Others[6] (concerning permanency rights under Model Standing Orders and ULP under Item 6 of Schedule IV of MRTU & PULP Act) and The Maharashtra State Coop. Cotton Growers Marketing Federation Limited And Another v. Maharashtra State Coop. Cotton Growers Marketing Federation Employees Union And Another[5] (dealing with Items 5, 6, and 9 of Schedule IV regarding seasonal employees' permanency) illustrate principles that are highly relevant to the ID Act's framework. The objectives of the MRTU & PULP Act, such as providing for recognition of unions, preventing ULPs, and establishing independent machinery,[13], [16] mirror the broader goals of the ULP provisions in the ID Act.

Challenges and Efficacy

Despite the comprehensive legislative framework, challenges persist in the effective prevention and redressal of ULPs. Proving the "object" or "mala fide" intent of the employer can be an onerous task for workmen. Delays in the adjudication process can also dilute the efficacy of the remedies. The Supreme Court in H.D Singh v. Reserve Bank Of India And Others expressed concern over employers dragging out adjudication proceedings by raising technical pleas.[18] Ensuring timely justice and robust enforcement mechanisms are crucial for the ULP provisions to achieve their intended purpose of fostering fair and equitable labour relations.

Conclusion

The introduction of the Fifth Schedule and related provisions into the Industrial Disputes Act, 1947, marked a significant advancement in Indian labour law, providing a codified framework for identifying, preventing, and penalizing unfair labour practices. These provisions play a vital role in protecting workmen from exploitation, safeguarding their trade union rights, and promoting genuine collective bargaining. The judiciary, through its interpretative role, has largely upheld the legislative intent, particularly in cases of prolonged temporary employment aimed at denying permanency and other forms of victimisation. While challenges in implementation and proof remain, the Fifth Schedule stands as a critical tool for ensuring fairness, justice, and industrial peace in the complex dynamics of employer-employee relations in India. Continued vigilance in enforcement and a proactive approach by adjudicatory bodies are essential to realize the full potential of these salutary provisions.

References

  1. Hindustan Lever And Another v. State Of Maharashtra And Another (2004 SCC 9 438, Supreme Court Of India, 2003)
  2. Durgapur Casual Workers Union And Others v. Food Corporation Of India And Others (2015 SCC 5 786, Supreme Court Of India, 2014)
  3. General Labour Union (Red Flag) Bombay v. B.V Chavan And Others (1985 SCC 1 312, Supreme Court Of India, 1984)
  4. Maharashtra State Road Transport Corporation And Another v. Casteribe Rajya Parivahan Karmchari Sanghatana (2009 SCC L&S 2 513, Supreme Court Of India, 2009)
  5. The Maharashtra State Coop. Cotton Growers Marketing Federation Limited And Another v. Maharashtra State Coop. Cotton Growers Marketing Federation Employees Union And Another (1991 SCC ONLINE BOM 577, Bombay High Court, 1991)
  6. Bajaj Auto Ltd. v. Bhojane Gopinath D. And Others (2004 SCC 9 488, Supreme Court Of India, 2003)
  7. Bharat Forge Co. Ltd. v. A.B Zodge And Another (1996 SCC 4 374, Supreme Court Of India, 1996)
  8. Bhikku Ram v. The Presiding Officer, Industrial Tribunal-Cum-Labour Court, Rohtak & Another (Punjab & Haryana High Court, 1994)
  9. Management Of Cheran Transport Corporation, Coimbatore, And Another v. G. Balasubramaniam And Another (Madras High Court, 1999)
  10. Omkar Sitaram Rane v. Maharashtra State Khadi And Village Industries Board, Bombay And Others (Bombay High Court, 2002)
  11. Tarlok Chand & Ors. v. National Industrial Development Corporation Ltd. & Ors. (Delhi High Court, 1994)
  12. V. Mookan v. Branch Manager (Karnataka High Court, 1989)
  13. Ashok Vishnu Kate & Ors. v. M.R.Bhope, Judge, Labour Court, Bombay & Anr. (Bombay High Court, 1992)
  14. The Management Of v. The Presiding Officer (Madras High Court, 2011)
  15. Satish Ganesh Saphtarshi And Others v. M/S. Kirloskar Oil Engines Ltd. And Another (Bombay High Court, 1995)
  16. Maharashtra General Kamgar Union And Others v. Balkrishna Pen Pvt. Ltd. And Another (Bombay High Court, 1987)
  17. Mumbai Mazdoor Sabha v. Bombay Dyeing And Mfg. Co. Ltd. And Others (Bombay High Court, 1982)
  18. H.D Singh v. Reserve Bank Of India And Others (1985 SCC 4 201, Supreme Court Of India, 1985)
  19. D. Poornachandra Rao And Another v. Tirumala Tirupati Devasthanamas, Tirupati And Another (2009 SCC ONLINE AP 589, Andhra Pradesh High Court, 2009)
  20. Regional Manager, State Bank Of India v. Raja Ram (2004 SCC 8 164, Supreme Court Of India, 2004)
  21. Regional Manager, Sbi v. Rakesh Kumar Tewari (2006 SCC L&S 0 143, Supreme Court Of India, 2006)
  22. Hindustan Lever Ltd. v. Ashok Vishnu Kate And Others (1995 SCC 6 326, Supreme Court Of India, 1995)
  23. K.D.ANTONY v. Air India Limited (Madras High Court, 2021)
  24. JUNAGADH AGRICULTURE UNIVERSITY THROUGH REGISTRAR v. KAILASHBEN NATWARLAL PANDYA (Gujarat High Court, 2023)
  25. Mrf United Workers Union v. Government Of Tamil Nadu (Madras High Court, 2009)
  26. Industrial Disputes Act, 1947
  27. Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971
  28. State of Karnataka v. Umadevi (3) (2006) 4 SCC 1