Unfair Labour Practices in Labour Law

The relationship between employers and employees is fundamental to the functioning of any industrialised society. This relationship is governed by a complex set of laws and regulations designed to ensure fairness, protect workers’ rights and promote industrial harmony.  One of the most significant areas of concern within labour law is the concept of unfair labour practices, which can be perpetrated by both employers and employees. These practices are actions that violate the principles of fairness and equity that underpin labour relations and are strictly regulated by laws such as the Industrial Disputes Act, 1947.

Unfair Labour Practices: Meaning

Unfair labour practices refer to actions taken by employers or trade unions that violate the rights of workers or employers, often with the intent to undermine the collective bargaining process or to create an unfair advantage. These practices are detrimental to the harmonious relationship between employers and employees and are prohibited under various labour laws.

The Industrial Disputes Act, 1947, is the cornerstone of labour law in India, providing a legal framework for addressing industrial disputes, protecting workers’ rights and promoting fair labour practices. The Fifth Schedule of the Act, introduced by the Industrial Disputes (Amendment) Act, 1982, specifically enumerates unfair labour practices by both employers and workers.

The Legal Framework on Unfair Labour Practices: Industrial Disputes Act, 1947

The Industrial Disputes Act, 1947, was enacted to make provisions for the investigation and settlement of industrial disputes. It applies to the entire country and covers all industries, irrespective of size. The Act outlines various forms of unfair labour practices and provides mechanisms for the resolution of disputes arising from such practices.

Key Provisions

• Section 2(ra): Defines unfair labour practices.
• Section 25-T: Prohibits the commission of unfair labour practices by employers, workers or trade unions.
• Section 25-U: Prescribes penalties for those found guilty of committing unfair labour practices, including imprisonment for up to six months or a fine of up to one thousand rupees or both.

The Fifth Schedule of the Act is pivotal, as it details the specific actions that constitute unfair labour practices on the part of employers, trade unions of employers, workmen and trade unions of workmen.

Unfair Labour Practices by Employers

Employers hold significant power in the employment relationship and unfair labour practices by employers often stem from an abuse of this power. The Fifth Schedule of the Industrial Disputes Act, 1947, outlines specific unfair labour practices by employers, which include the following:

Interference with Workers’ Rights to Unionise

Employers are prohibited from interfering with, restraining or coercing workers in their right to organise, form, join or assist a trade union. Specific examples of such interference include:

• Threatening Workmen with Dismissal: Employers cannot threaten workers with discharge or dismissal if they join a trade union.
• Threatening Lock-out or Closure: Employers are prohibited from threatening a lock-out or closure if a trade union is organised.
• Undermining Trade Union Efforts: Employers cannot grant wage increases at crucial periods of trade union organisation to undermine the efforts of the trade union.

Dominating or Supporting a Trade Union

Employers are also prohibited from dominating, interfering with or contributing support, whether financial or otherwise, to any trade union. This includes:

• Active Interest in Organising a Union: An employer cannot take an active interest in organising a trade union of their workmen.
• Showing Partiality: Employers are forbidden from showing partiality or granting favours to one of several trade unions attempting to organise their workmen.

Establishing Employer-Sponsored Trade Unions

The establishment of trade unions controlled or sponsored by employers is considered an unfair labour practice, as it undermines the independence and effectiveness of genuine trade unions.

Discrimination Based on Union Membership

Employers are prohibited from discriminating against workmen based on their union membership or activities. This includes:

• Punishing Union Activities: Discharging or punishing a workman because they urged other workmen to join or organise a trade union.
• Discriminatory Promotions and Demotions: Refusing to promote or demoting workmen due to their union activities or giving unmerited promotions to create discord among workers.
• Victimising Office-Bearers: Discharging office-bearers or active members of the trade union on account of their trade union activities.

Unjust Dismissal

Unjust dismissal is one of the most severe forms of unfair labour practice by employers. The Act prohibits:

• Victimisation: Dismissing workers by way of victimisation.
• Lack of Good Faith: Dismissing workers not in good faith but as a colourable exercise of the employer’s rights.
• False Implications: Dismissing workers by falsely implicating them in criminal cases on false or concocted evidence.
• Untrue Allegations: Dismissing workers on untrue or trumped-up allegations of absence without leave.
• Ignoring Natural Justice: Dismissing workers in utter disregard of the principles of natural justice or with undue haste.

Abolishing Regular Work

Employers are prohibited from abolishing the work of a regular nature being done by workmen and assigning it to contractors as a measure of breaking a strike.

Malafide Transfers

Transferring workers with malicious intent, such as to punish them for union activities, under the guise of following management policy, is an unfair labour practice.

Good Conduct Bonds

Employers cannot insist upon individual workmen who are on a legal strike to sign a good conduct bond as a precondition to allowing them to resume work.

Favouritism and Partiality

Showing favouritism or partiality to one set of workers regardless of merit is prohibited, as it creates discord and undermines the unity of the workforce.

Prolonged Casual Employment

Employing workers as casuals or temporaries for extended periods to avoid granting them the status and benefits of permanent workers is an unfair labour practice.

Retaliation Against Workers

Discharging or discriminating against workers for filing charges or testifying against the employer in any inquiry or proceeding relating to an industrial dispute is prohibited.

Recruitment During Strikes

Recruiting new workers during a strike that is not deemed illegal under the Act is an unfair labour practice.

Failure to Implement Agreements

Failing to implement awards, settlements or agreements reached with workers is prohibited under the Act.

Use of Force or Violence

Employers must not engage in or encourage acts of force or violence against workers.

Refusal to Bargain Collectively

Employers are required to bargain in good faith with recognised trade unions and refusing to do so is considered an unfair labour practice.

Illegal Lock-outs

Proposing or continuing a lock-out deemed illegal under the Act is an unfair labour practice and is subject to penalties.

Unfair Labour Practices by Trade Unions and Workmen

While much focus is often placed on unfair labour practices by employers, it is equally important to recognise that trade unions and workmen can also engage in unfair practices that disrupt industrial harmony and violate labour laws. The Industrial Disputes Act, 1947, also outlines unfair labour practices on the part of workmen and their trade unions.

Supporting Illegal Strikes

Trade unions are prohibited from advising, supporting or instigating strikes that are deemed illegal under the Act. Illegal strikes disrupt the normal functioning of industries and can lead to severe economic consequences.

Coercion in Union Membership

Trade unions must not coerce workers to join or refrain from joining a union. This includes:

• Picketing: Trade unions cannot picket in such a manner that non-striking workmen are physically debarred from entering the workplace.
• Use of Force or Violence: Unions are prohibited from indulging in acts of force or violence or holding out threats of intimidation against non-striking workers or managerial staff.

Refusal to Bargain Collectively

Just as employers are required to bargain collectively in good faith, trade unions are also obligated to do so. Refusal to engage in collective bargaining with the employer is considered an unfair labour practice.

Coercive Activities

Unions are prohibited from engaging in coercive activities that disrupt the industrial peace, such as:

• Go-Slow Tactics: Encouraging or instigating workers to reduce their pace of work intentionally.
• Squatting on Premises: Occupying work premises after working hours as a form of protest.
• Gherao: Surrounding the managerial or other staff to press for demands.

Demonstrations at Employers’ Residences

Staging demonstrations at the residences of employers or managerial staff is considered an unfair labour practice and is prohibited.

Damage to Employer’s Property

Inciting or participating in willful damage to the employer’s property is an unfair labour practice and can result in legal penalties.

Violence and Intimidation

Unions must not engage in violence or intimidation against workers who choose to attend work during strikes or against managerial staff.

Mechanisms for Addressing Unfair Labour Practices

Addressing unfair labour practices requires a robust legal and institutional framework that provides avenues for workers and employers to seek redress. The Industrial Disputes Act, 1947, outlines several mechanisms for the resolution of industrial disputes, which often arise from unfair labour practices.

Collective Bargaining

Collective bargaining is the process by which workers, through their trade unions, negotiate with employers on matters such as wages, working conditions and other terms of employment. It is an essential mechanism for addressing disputes and ensuring that both parties’ interests are represented.

The process of collective bargaining is most effective when both parties engage in good faith, seeking to reach a mutually beneficial agreement. It is a cornerstone of industrial relations and plays a crucial role in preventing and resolving unfair labour practices.

Conciliation

Conciliation is an alternative dispute resolution mechanism where a neutral third party, known as a conciliator, assists the disputing parties in reaching an amicable settlement. The Industrial Disputes Act, 1947, provides for the appointment of conciliation officers who facilitate negotiations and help resolve disputes without resorting to litigation.

The conciliation process is often quicker and less costly than formal legal proceedings and can help maintain a positive relationship between employers and employees.

Voluntary Arbitration

Voluntary arbitration is another alternative dispute resolution mechanism where the parties in dispute agree to submit their conflict to an arbitrator, whose decision is binding. This process is outlined in Section 10-A of the Industrial Disputes Act, 1947.

Arbitration is particularly effective in resolving disputes that cannot be settled through conciliation or collective bargaining, providing a neutral and legally binding resolution.

Adjudication

When disputes cannot be resolved through collective bargaining, conciliation or arbitration, they may be referred to statutory bodies such as Labour Courts, Industrial Tribunals or National Tribunals for adjudication. These bodies have the authority to make legally binding decisions on industrial disputes.

Sections 7, 7-A and 7-B of the Industrial Disputes Act, 1947, provide for the establishment of these tribunals, which play a critical role in ensuring that unfair labour practices are addressed in accordance with the law.

State Legislation on Unfair Labour Practices

In addition to the Industrial Disputes Act, 1947, several states in India have enacted their own legislation to address unfair labour practices and manage industrial relations. Notable state laws include:

Bombay Industrial Relations Act, 1946

The Bombay Industrial Relations Act, 1946, applies to the state of Maharashtra and governs industrial relations and the settlement of labour disputes. The Act provides mechanisms for resolving conflicts between employers and employees and aims to maintain industrial peace.

Madhya Pradesh Industrial Relations Act, 1960

This Act applies to the state of Madhya Pradesh and prohibits employers from penalising employees for participating in trade union activities or legal strikes. It provides for the settlement of industrial disputes and regulates employer-employee relations in certain matters.

Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971

This Act, also known as the MRTU & PULP Act, 1971, applies to Maharashtra and provides for the recognition of trade unions, promotion of collective bargaining and prevention of unfair labour practices. It was enacted to create a balanced relationship between employers and employees and to ensure that workers’ rights are protected.

Landmark Judgments on Unfair Labour Practices

Several landmark judgments have shaped the interpretation and enforcement of laws related to unfair labour practices in India. These cases have provided clarity on the application of the Industrial Disputes Act, 1947 and have established important legal precedents.

S.G. Chemical and Dyes Trading Employees’ Union v. S.G. Chemicals and Dyes Trading Limited and Another, 1986

In this case, the trade union filed a complaint against the company for closing its office without paying employees their due wages. The Labour Court found the closure illegal and deemed the termination of services as an unfair labour practice, ordering compensation and reinstatement for the affected workers.

Regional Manager, SBI v. Mahatma Mishra, 2006

The respondent in this case was terminated without proper notice and the Labour Court ruled this as an unfair labour practice. The court held that the termination was not casual and that the management had engaged in unfair labour practices by not providing the respondent with due process.

Eveready Flash Light Company v. Labour Court Bareilly, 1958

This case involved a worker who was terminated after being put on probation despite having been tried and tested for his role. The Labour Court found this to be an unfair labour practice, as the probationary period was used as a tactic to delay granting the worker permanent status.

Hind Construction and Engineering Co. Ltd. v. Their Workmen, 1965

The Supreme Court in this case ruled that the dismissal of workers for a single day of absence was unjustifiably severe and amounted to victimisation, establishing the principle that disproportionate punishment can constitute an unfair labour practice.

Gangadhar Pillai v. Siemens Ltd., 2007

In this case, the appellant challenged his termination as an unfair labour practice. The Supreme Court held that intermittent engagement as a casual worker did not automatically grant permanent status and the burden of proving unfair labour practices was on the workman.

Conclusion: Unfair Labour Practices

Unfair labour practices pose a significant challenge to maintaining fair and equitable labour relations. The Industrial Disputes Act, 1947 and its Fifth Schedule provide a comprehensive legal framework for identifying and addressing these practices. By prohibiting actions that undermine workers’ rights or disrupt industrial harmony, the Act seeks to promote a balanced relationship between employers and employees.

Mechanisms such as collective bargaining, conciliation, arbitration and adjudication play a crucial role in resolving disputes and preventing the escalation of conflicts. Additionally, state legislations such as the Bombay Industrial Relations Act, 1946 and the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971, complement the national legal framework by addressing region-specific labour issues.