National Commission on Labour (1967)||
In the approach we have evolved for achieving industrial harmony, we have emphasised the need for creating conditions where disputes become redundant. Suggestions essentially connected with the prevention of disputes and the promotion of good labour management relations may now be dealt with. We group them under (A) Joint Consultation, (B) Code of Discipline, (C) Grievance Procedure and (D) Disciplinary Procedures.
24.1 The urge on the part of workers to know more about their place of work in all its relevant aspects and be associated with its activities is not new. It shows itself in different forms in different communities. The forms themselves have assumed appropriate names according to the content which has varied from mere voluntary sharing of information by management with the workers to formal participation by the latter in running the enterprise. Not all these have been experimented in the country nor are those which have been tried out accepted as so successful that workers have made a demand for it on the employer or the employer on his own has formally invited workers for such cooperation. It cannot be denied, however, that each one has shown its utility, albeit limited. In India, the experiment has mainly taken two forms:
(i) the statutory works committees/joint committees and (ii) joint management councils, accepted voluntarily by central organisations of employers and workers in 1958 and operated in some units. It is only these that we propose to deal with.
24.2 Section 3(1)(2) of the I.D, Act provides for the setting up of a works committee consisting of representatives of management and employees, in every undertaking employing 100 or more workmen, "to promote measures for securing and preserving amity and good relations between the employer and the workmen and to that end, to comment upon matters of their common interest or concern and endeavour to compose any material difference of opinion in respect of such matters". The representatives of the workmen, whose number shall not be less than the number of representatives of the employer, are to be chosen from among the workmen engaged in the establishment and in consultation with their registered trade union, if any. Under the Bombay Act, joint committees can be set up, but only in units which have recognised unions. On this practice of consultation, therefore, we have experience of both arrangements (i) where the union may or may not be consulted in the setting up of a committee and (ii) where the recognised union is fully in the picture.
24. 3 The usefulness of works committees as a channel for joint consultation and the need for strengthening and promoting this institution was stressed in the labour policy statements in the successive Plans. The legal requirement and the encouragement given by the Government led to the setting up of works committees in a number of undertakings; the pace of progress was, however, slow and uneven in different parts of the country. The number of works committees set up was 1,142 in 1951. It rose to 2,574 in 1959-60 (out of 4,730 required to be set up) and 3,133 in 1965-66 (out of 5,091 required to be set up). But mere numbers, though important, do not count. The general feeling among knowledgeable people in the country is that the committees have not proved effective. This is borne out by several research studies, though some have come to the conclusion that where there is enough understanding on both sides about the need for such consultations, the committees have achieved a measure of success. Where the committees have not succeeded, all assessments have pointed out that the failure is due partly to the tact that the committees are statutory, and thus an imposition on the employer, but mainly because the parties concerned do not evince sufficient interest in them. According to us, this diagnosis is but partial and so are the remedies suggested. Policy statements on this basis have thus not helped in vitalising the works committees. For instance, the debate has continued for some time on the premise that vagueness in the legal definition of the scope and functions of the committees was largely responsible for their failure. To remedy this defect, the Indian Labour Conference drew up in 1959 an illustrative list of items which works committees would normally deal with and a list of items which would be beyond their scope. The former included consultation on (i) conditions of work such as ventilation, lighting, temperature and sanitation including latrines
and urinals, (ii) amenities such as drinking water, canteens, dining rooms, rest rooms, medical and health services, (iii) safety and accident prevention, occupational diseases and protective equipment, (iv) adjustment of festival and national holidays, (v) administration of welfare and fine funds, (vi) educational and recreational activities, (vii) promotion of thrift and savings, and (viii) implementation and review of decisions arrived at in meetings of works committees. The items specifically excluded were: discussion on (i) wages and allowance, (ii) bonus and profit-sharing bonus, (iii) rationalisation and matters connected with the fixation of work load, (iv) matters connected with fixation of a standard labour force, (v) programmes of planning and development, (vi) matters connected with retrenchment and lay-off, (vii) victimisation for trade union activities, (viii) provident fund, gratuity schemes and other retirement benefits, (ix) quantum of leave and national and festival holidays, (x) incentive schemes, and (xi) housing and transport services. This clarification of the scope and functions of the works committees helped. But, as with all remedies where the basic weakness is not properly sorted out, it could not work for long and the more fundamental issue of trade union acceptance of works committees soon came to the surface.
24.4 In the evidence before us. State Governments have expressed the view that the advisory nature of the recommendations, vagueness regarding their exact scope and functions, inter-union rivalries, union opposition, and reluctance of employers to utilise such media have rendered works committees ineffective. The employers' associations have attributed the failure of works committees to factors like inter-union rivalries, union antipathy, and the attitude of members (workers' wing) in trying to raise in the committee discussion on extraneous issues. According to the unions, conflict between union jurisdiction and the jurisdiction of the works committees and the unhelpful attitude of the employers have generally led to their failure.
24.5 We consider that the effectiveness of these committees will depend on the following factors:—
(a) a more responsive attitude on the part of management;
(b) adequate support from unions;
(c) proper appreciation of the scope and functions of the works committees;
(d) whole-hearted implementation of the recommendations of the works committees; and
(c) proper coordination of the functions of the multiple bipartite institutions at the plant level now in vogue.
24.6 Even at the risk of repeating the obvious, we mention a vital point which requires to be recognised. It is the creation of an atmosphere of trust on both sides. Unions should feel that management is not side-tracking the effective union through a works committee. Management should equally realise that some of their known prerogatives are meant to be parted with. Basic to the success of such unit level committees is union recognition. Where a recognised union exists, as under the BIR Act, and it has accepted the responsibility of the arrangement, joint committees have a better showing. We take this as a pointer to our recommendations.
24.7 We have recommended elsewhere compulsory recognition of unions in establishments employing 100 or more workers and in units above a stipulated capital investment1 The same stipulation about size should apply to formation of works committees under new arrangement. The main change that we recommend—and in our view it is a fundamental one—is in regard to representation of the workers' side on the works committee. The recognised union should he given the right to nominate all worker members on this body. With union recognition obligatory, this would eliminate the most important cause of conflict and antipathy between unions and works committees. Other hurdles such as (a) apathy of the management: (b) vagueness regarding the exact scope of its functions; (c) inadequate implementation of unanimous conclusions, will all fall in their proper place. Taking the suggestions of the ILC regarding the scope and functions of works committees, already referred to, as a guide, division of functions between the recognised union and the works committee should be a matter of agreement between the employer and the recognised union.
24.8 The Joint Management Councils (JMC) owe their origin to the following observations made in the Government's Industrial Policy Resolution (April 1956): "In a socialist democracy, labour is a partner in the common task of development and should participate in it with enthusiasm...... There should be joint consultation, and workers and technicians
1 See Para 23.50
should, wherever possible, be associated progressively in management. Enterprises in the public sector have to set an example in this respect."1
24.9 The Second Plan sought to translate the spirit of this part of the Government Resolution in the statement on labour policy. In doing so, it showed a measure of caution as much as it indicated the criteria against which the, success of the experiment should be assessed.2 When the Second Plan was published, the working of arrangements similar to the JMCs within the country was almost unknown. International experience which could be relied upon was also inadequate. For studying such experience as was available, a Study Team on 'Workers' Participation in Management' was deputed to some European countries. The report of the team underlined a non-statutory approach, and that too, on an experimental basis, to implement the recommendations in the Plan but warned against the dangers of copying from the more advanced industrial communities. The 15th Session of the ILC, in accepting this recommendation of the team, appointed a tripartite committee to work out details of the suggested experimental scheme. The present scheme of JMCs is based on the draft prepared by this Committee, as subsequently modified by two tripartite national seminars on the subject held in 1958 and I960.3 The main objectives in the establishment of JMCs were to promote cordial relations between management and workers, build up understanding and trust between them, effect substantial increase in productivity, secure better welfare and other facilities for workers, and train them to understand and share the responsibilities of management. A requirement, which was considered basic to the establishment of the JMC, was emphasised in the first of these seminars (1958) in the following words:
"The seminar was convinced that Joint Councils will thrive only in an atmosphere of mutual confidence and goodwill. It took note of the gradual improvement in the attitude of employers and trade unions towards each other and felt that there was a need for continuous educative work both on the side of labour and management."
24.10 The essential features of the scheme for JMC are: (i) the Council is entitled to be consulted on certain specified matters; (ii) in some others, the management is expected to share information with the Council; and (iii) in a set of functions, administrative responsibilities have to be given to it. These areas are listed in Annexure I. In drawing up this list, it was made clear that if the parties to the JMC agreement so desired, the items in the list could be altered and transferred from one group to the other. In fact, much more was left to the parties to settle than is popularly recognised. This wide scope has not been utilised fully by the JMCs. In the light of the freedom given to the JMCs themselves, we feel that the criticism in several quarters against the tripartite recommendations that it put the scheme in a "strait-jacket" does not seem to be valid. For reasons well known, all • matters such as wages, bonus and allowances
which are subjects for collective bargaining were excluded from the scope of the JMC. Arrangements were also made by the Government of India to draw up a panel of names from the employers' and workers' organisations at various centres. The panel was maintained for advising the JMCs if they ran into difficulties and needed advice. By and large, therefore, we recognise that adequate precautions were taken for the JMCs to evolve into a potent force for improving the prospects of industrial harmony.
24.11 The Third Plan, in its approach to the problem of industrial relations, elaborated this policy of associating labour more and more with management and accepted the progressive extension of the scheme of JMCs as a major programme. It recommended the setting up of JMCs in all industrial undertakings found suitable for the purpose so that, in due course of time, the scheme might become a normal feature of the industrial system.
24.12 Against these policy statements, considerable promotional effort was needed for the success of the scheme. This promotional effort has been as much the responsibility of Governments. Central and State as of the central organisations of employers and workers. The Government of India on its part set up a tripartite committee on labour-management cooperation to advise on all matters connected with
1 Second Five Year Plan, p. 49.
2 Ibid p. 577.
3'The first of these seminars was attended by representatives of labour and management from units which had agreed to introduce the JMC. The seminar worked out the various steps for giving a right start to the JMCs. The second seminar reviewed the experience of the working of the JMCs and reiterated their usefulness.
the implementation of the Scheme. A special cell was also set up in the Department of Labour and Employment. Most State Governments have designated special officers to promote the Scheme. So far, JMCs have been set up in about 150 undertakings—both in the public and in the private sectors. Attempts to promote wider acceptance of the idea of JMCs appear to have met with little success over the years, though evaluation reports show that where the Councils are taken seriously by both parties and attempts made to work towards the purpose for which they are set up, the JMCs have shown results.
24.13 There does not appear to be much support for the institution of JMCs in their present form. Even where the Councils exist, they are reported to be ineffective and their functioning unsatisfactory in many cases. The reasons are not far to seek. Although representatives of central organisations of employers and workers supported the scheme at national conferences and committees, they have shown inadequate interest in making their affiliates enthusiastic about it. Progressive employers who already have a system of consultation with their workers, through a recognised union and/ or works committees, find the JMC in its present form superfluous; managements are generally averse to having a multiplicity of joint bodies and so are unions. In undertakings in which industrial relations are not cordial, and even arrangements like works committee, grievance procedure, and union recognition, are absent, JMCs cannot be expected to function satisfactorily.
24.14 Many employers have objected to the title of the scheme, viz., 'Workers' Participation in Management' and they have not showed willingness to waive their prejudice even after seeing the details of the scheme which merely envisages more consultations with workers and seeking their cooperation. The official title for the Scheme is Labour-Management Cooperation. On the side of workers also, there is often a desire to go outside the framework within which the councils are expected to function. There is an insistence on a discussion of matters which the employers' side finds itself incompetent to settle/discuss. While these and many other reasons have been given fort lack of interest in the JMCs, the fact remains that the JMCs have not been a resounding success at any place either from the point of view of employers or labour. If they had been, one or the other party would have worked for popularising it further.
24.15 In regard to the future of the JMCs, our view is that when the system of union recognition becomes an accepted practice, both managements and unions will themselves gravitate towards greater cooperation, in areas they consider to he of mutual advantage and set up a JMC. In the meanwhile, wherever the management and the recognised trade union so desire, they can by agreement enhance the powers and scope of the works committee to ensure a greater degree of consultation/cooperation amalgamating, to the extent desired, the functions of the two. In any case, multiplicity of bipartite consultative arrangements at the plant level serves no purpose.1
24.16 The discipline to observe the 'rules of the game' is an attitude of mind and requires, apart from legislative sanctions, persuasion on a moral plane. Attempts by public authorities to appeal to finer sentiments and to arouse responsive attitudes are not unknown. In our context, certain developments in the years before the Second Five Year Plan, such as inadequacy of Governmental machinery for implementation, instances of non-observance of awards on the side of some employers, and indiscipline among workers, all contributed to the following statement in the Second Plan:
"While the observance of stricter discipline, both on the part of labour and management, is a matter which cannot be imposed by legislation it has to be achieved by organisations of employers and workers by evolving suitable sanctions on their own— some steps, legislative or otherwise in case of rank indiscipline require to be thought of".2
24.17 The Government which was formed in 1957 shifted the emphasis from legislation to voluntary arrangements. There was clearly a need for bringing home to the parties—Government. employers and workers—an awareness of their obligations under labour laws, as also to create in them an attitude of willing acceptance of their responsibilities and a readiness to discharge them. It was in this context that the question of discipline in industry was discussed in the Indian Labour Conferences
1 Subject to Minute of Dissent by Shri Vasavada, Shri Ramanujam and Shri Malviya. 2 'Second Five Year Plan, p. 578.
and the Code of Discipline the Code1 laying down the rights and obligations on all sides came to be formally announced in June, 1958. It has been accepted since by all industries in the private sector, except the banking and the newspaper industries. The Code has also been accepted by all companies and corporations in the public sector except the ports and docks, defence undertakings and railways, in all of which difficulties arose because of the provision in the Code allowing recognition of one union only.
24.18 The Code enjoins on parties to refrain from taking unilateral action in connection with any industrial matter, to utilise the existing machinery for settlement of disputes with the utmost expedition, and to abjure strikes and lock-outs without notice and without exploring all avenues of settlement. It also discourages recourse to litigation and recommends that disputes not mutually settled should be resolved through voluntary arbitration. The employers are required to recognise the majority union in an establishment or industry and set up a mutually agreed grievance procedure. The workers are not to resort to go-slow, coercion and intimidation, etc. Unfair labour practices are to be given up, whether on the part of employers or workers. Both employers and unions are required to take appropriate action against their officers and members found indulging in action against the spirit of the Code. The message of the Code gradually spread to organisations other than those represented at the Indian Labour Conference. To some extent, the official pronouncements about the Code also helped. Thus, in the early years, it was considered worth giving the Code a serious trial. Its working came up for discussion in every tripartite forum as also in the Annual Reports of the Ministry of Labour and Employment. It soon became an instrument to which credit/discredit was given for industrial peace/conflict and was perhaps conveniently used by employers and workers to point out the shortcomings of the other side.
24.19 To measure the success or otherwise of the Code merely with reference to industrial peace, as has been attempted in certain circles. appears to be inappropriate. Peace or conflict is a complex of various factors. To state only one of them would not be enough in judging the operation of the Code in its proper perspective. To eulogise the Code for favourable trends in industrial relations or to condemn it as unworkable when the labour situation is difficult, is unwarranted. Factors like mutual consultation at different levels. development of sanctions—though limited in their operation—against members/affiliates within the central organisations, occasional recognition granted to unions, and even less occasional withdrawal of cases in the law courts which irked one side or the other, were exercising a wholesome influence on industrial peace. At the same time, inflationary price trends, the state of unemployment and other irritations in the economic system, as indeed the unfavourable attitude of some employers' and workers' organisations, had an adverse effect on industrial harmony, particularly in the last few years. These latter, according to the evidence before us, indicate a measure of failure of all parties to adhere to the spirit of the Code.
24.20 It cannot be denied that in the early years, the Code focussed the attention of the parlies prominently on their obligations under the various labour laws and enjoined on them a stricter observance of these and other obligations associated with work in an industrial environment. The fact that the parties got together and openly accepted the need for stricter adherence to certain basic propositions was in itself an achievement. When breaches were enquired into and openly discussed in tripartite committees or reported upon publicly, the very process of discussions produced a restraining and sobering effect on the parties, and instances of gross violations of laws and repudiation of responsibilities declined. However, with the passage of time, the attitude to the Code changed and no special attention is now being paid to it. The question therefore is whether the Code should be revived.
24.21 The evidence before us suggests that the Code has had a limited success as also a limited use. The Code began acquiring rust and the parties were none too eager to take it off; they developed an attitude of indifference. Among the factors mentioned as responsible for this are: (i) the absence of a genuine desire for and limited support to, self imposed voluntary restraints on the part of employers' and workers' organisations, (ii) the worsening economic situation which eroded the real wage of workers, (iii) the inability of some employers to implement their obligations, (iv) a disarray among labour representatives due to rivalries, (v) conflict between the Code and the Law, and above all (vi) the state of
1 For details of the Code of Discipline in Industry, see Appendix IV.
discipline in the body politic. As regards the future of the Code, the evidence is overwhelmingly in favour of giving a legal form to its important provisions regarding recognition of unions, grievance procedure, unfair labour practices, and the like. Our conclusion, there-tore, is while that part of the Code which enjoins stricter observance of obligations and responsibilities under the various labour laws may be left to the normal process of implementation and enforcement by the labour administration machinery, some others need to be formalised under law. These are:
(1) Recognition of a union as bargaining agents;
(2) Setting up of a grievance machinery in an undertaking;
(3) Prohibition of strike/lock-out without notice;
(4) Penalties for unfair labour practices;
(5) Provision of voluntary arbitration.
24.22 With the removal of these provisions from the Code to give them a legal form, the Code will have no useful function to perform.
24.23 Prompt redressal of individual grievances is essential for sustaining good labour-management relations, and promoting efficiency at the plant level. Absence of machinery for it leads to small grievances developing into collective disputes. The type of grievances we have in mind are those arising out of complaints affecting one or more individual workers in respect of their conditions of work and not disputes over matters of general applicability to all. Till the enactment of the Industrial Employment (Standing Orders) Act, 1946, (1) the settlement of day-to-day grievances of workers did not receive much attention in our legislative framework. The Act has, however, limited applicability; it applies only to those establishments employing hundred or more workers and does not provide for bipartite discussion for for prompt redressal of grievances. Welfare officers appointed under the Factories Act, 1948 are generally given the task of dealing with individual complaints of workers. Individual disputes relating to discharge, dismissal and retrenchment can now be taken up for relief under the Industrial Disputes Ad, 1947, alter the amendment to it in 1965.
24.24 But whatever be the legal provision, bipartite arrangements for redressal of grievances do exist over wide areas of organised employment, though in unorganised sectors, lack of procedure and even lack of fairness in dealing with grievances is still the rule. Even in some-cases where the Act is applicable, its implementation is reported to be defective. Instances were brought to our notice where Standing Orders to be adopted in public sector units could not be settled because neither the employer nor the authorities had a dear idea as to who should certify them. Under the Factories Act, 1948, the State Governments have framed rules requiring labour welfare officers to ensure settlement of grievances, but this provision has not been helpful because of the dual role of these officers2.
24.25 The Code of Discipline, among other things, lays down that the management and unions 'will establish, upon a mutually agreed basis, a grievance procedure which will ensure speedy and full investigation leading to settlement'. The guiding principles, which were evolved under the Code for this purpose, and the Model Grievance Procedure for adoption by the parties were settled in a tripartite committee in 1958. The principles and procedure are in conformity with practices followed in established units and cover items required by the law and even more. The proposed machinery has been made simple and expeditions within the constraints which all such procedures are subject to. Officers in the management hierarchy, to be approached by the workers at different steps in the procedure, have been specified. Here also, as in the case of efforts to promote the JMCs, full lattitude is given to the parties to come together and modify the procedure on an agreed basis to suit the requirements of a particular unit.
24.26 The Model Grievance Procedure has successive time-bound steps, each leading to the next in case of lack of satisfaction. Under the procedure, an aggrieved employee would first present his grievance verbally to a designated officer who would give a reply within 48 hours. In case the worker is dissatisfied with the decision or fails to get an answer within the-stipulated time, he would, personally or accompanied by his departmental representative,
1The B. I. D. Act, had, and the B.I.R. Act has, inbuilt provisions for Standing Orders. 2 See para 10.23.
present his grievance to the head of the department. If the departmental head fails to give a decision within three days or if his decision is unsatisfactory, the aggrieved worker can seek relief through the 'Grievance Committee" consisting of nominees of management and workers. This Committee would communicate its recommendations to the manager within seven days of the grievance leaching it. If the recommendation is not made within the stipulated time, reasons therefore would be recorded, and in case unanimous recommendations are not possible, the relevant papers would be placed before the manager for decision. The manager is expected to communicate his decision to the worker within three days. The worker would have a right to appeal to the higher authorities for revision of the manager's decision. All such appeals have to be decided within a week of the worker's petition. The worker, if he so desires, could take a union official with him for discussion with the appellate authority. In case of failure to settle the grievance even at this stage, the union and the management may refer it to voluntary arbitration within a week of receipt of the management's final decision.
24.27 All the steps in the above procedure may not be used if the complaint is against the designated officer at the lowest level or in the case of any grievance arising out of dismissal or discharge of a worker. In the former case, the worker may skip the first step and approach the next authority; in the latter, the appeal may be made to the dismissing authority or any higher authority designated by the management, within a week from the date of dismissal or discharge. Though the grievance machinery could be availed of by an aggrieved worker on receipt of an order causing the grievance, the worker's approach to the machinery ipso facto does not attract a stay in the implementation of the orders of management. In several industrial establishments, arrangements for a formal processing of workers' grievances exist, but they do not quite conform to the model described above. It is also not known to what extent the workers were consulted in framing the existing procedures. In all such cases, one has to see what works in a given establishment: whether the procedure in operation has all the elements of what could be considered the model is another matter.
24.28 In the evidence before us, there is unanimity on the need for a statutory hacking for the formulation of an effective grievance procedure which should be simple, flexible less cumbrous, and more 01 less on the lines of the present Model Grievance Procedure. It should be time-bound and have a limited number of steps, say, approach to the supervisor, then to the departmental head, and thereafter a reference to the 'Grievance Committee' consisting of management and union representatives. It should be made applicable to only those units which employ more than 100 workers. Evidence also suggests that settlement of an individual grievance should be prompt and quick in giving relief to the worker, as it is natural that during the period of suspense before getting the decision, a worker cannot whole-heartedly devote his energies to work.
24.29 A grievance procedure, whether formal or informal, statutory or voluntary, has to ensure that it gives a sense of (i) satisfaction to the individual worker, (ii) reasonable exercise of authority to the manager and (iii) participation to unions. The introduction of unions in the procedure is necessary, because ultimately the union will be answerable to members. It is also important that any procedure, to be effective, should be simple and have a provision for at least one appeal.
24.30 In view of the varying size and nature of units, it may not be desirable to be too rigid about a standardised procedure. Some informality in the approach may be required in case of small units, say units employing less than 100 workers, because in them it is easier both for the management and workers to have close contacts and personal approach. It would, therefore, be more appropriate to confine introduction of a formal procedure to units employing 100 or more workers. The Industrial Employment (Standing Orders) Act, 1946 should have provisions defining a grievance and laying down a procedure for effecting its settlement.
24.31 A basic ingredient of the procedure should be that the total number of steps involved should be limited; not more than four are generally envisaged even in the largest units. A grievance procedure should normally provide for three steps:
(a) approach to the immediate superior;
(b) appeal to the departmental head/manager; and
(c) appeal to the bipartite grievance committee representing management and the recognised union.
The constitution of the Committee should have a provision that in case a unanimous decision is not possible, the unsettled grievance may be referred to an arbitrator At the earlier stages,
a worker should be free to be presented by a co-worker and later by an officer of the union if one exists.
24.32 The right to 'hire and fire' has been urged before us by employers as a remedy for improving industrial discipline. The right to 'hire' belongs to them, but the other right has, in recent years, been circumscribed. The employers contend is that they should not be forced to take back a dismissed worker; they should have the option to pay compensation instead. Workers, on the other hand, have urged that in a labour surplus economy, they should not be placed in a position where their right to work can be bought off by the employer through compensation, howsoever hand-some. They also apprehend that the privilege claimed will be used by the employer to get rid of active union workers.
24.33 At the level of the undertaking, the legal framework as laid down under the Industrial Employment (Standing Orders) Act, 1946 (Annexure II) and the Industrial Disputes Act, 1947 provides for (i) a procedure to be fol-lowed in investigating cases which lead to disciplinary action; and (ii) a substantive restraint which protects the union officials. The present controversy covers both the aspects. It is not necessary to discuss punishments upto suspension for a specified period and the procedure relating to them. In most of the establishments there are set and accepted procedures for this purpose. They have not been seriously challenged in the evidence nor are the traditions built around them. It is only when punishment for an alleged misconduct leads to discharge/ dismissal that difficulties have arisen. We, therefore, limit our discussion to the connected issues.
24.34 The procedure followed in discharge/ dismissal cases is: (i) the workman concerned is given an opportunity to explain the charges against him; (ii) the order given to him elaborately states the charges against him; (iii) the worker is given an opportunity to explain his conduct in an enquiry to be conducted by the employer; (iv) the enquiry officer is an appointee of the employer; he can be either an experienced subordinate in the establishment or an outsider; (v) the punishment order is finally approved by the employer/manager who, before making his decision, takes into consideration the gravity of the misconduct and the worker's previous record; and (vi) if the charges are proved to be correct, the workman need not be paid wages during the suspension period.
24.35 Section 33 of the Industrial Disputes Act, 1947 in regard to matters connected with disputes requires maintenance of status quo by the employer and restrains him from discharging or punishing a worker by dismissal or otherwise, during pendency of conciliation or adjudication proceedings in an industrial dispute, save with the permission of the authority Holding such proceedings. In matters unconnected with the dispute, the employers' freedom to act is nut curtailed, except that he is required to pay one month's wages to a workman before discharge or dismissal and seek the approval of his action by the concerned authority. While Section 2(k) of the Industrial Disputes Act gives jurisdiction to labour courts and tribunals over such disputes, the controversy whether an individual dispute was an industrial dispute was set at rest by the incorporation of Section 2-A in the Industrial Disputes Act, which clearly includes individual disputes over discharge, dismissal or retrenchment within the meaning of the term 'industrial dispute' even if the case of the individual retrenched is not taken up by other workmen or a union.
24.36 Considerable volume of case law has been built around these provisions. To safeguard the interests of workmen against victimisation, the tribunals have gone into the reasons for discharge even when the procedure laid down under the Standing Orders was followed. Tribunals normally do not sit in appeal over management's decision, but where want of bonafides, victimisation or unfair labour practices, a basic error of facts or violation of a principle of natural justice, or a completely baseless or perverse finding on the material available, is established, tribunals have intervened to order reinstatement or award monetary compensation in lieu of reinstatement. Employers, for the sake of discipline, have insisted on compensation and workers on reinstatement.
24.37 According to a recent Supreme Court ruling, the tribunal does not have jurisdiction to substitute its own judgment for that of management. This decision has led to the Bill amending the Industrial Disputes Act, to remove the limitations on the tribunal's jurisdiction in such cases. The Bill, already passed by the Rajya Sabha, provides that labour courts/tribunals should have the power to set aside the order of discharge or dismissal and
direct reinstatement of the workmen or give such other relief including milder punishment in lieu of discharge or dismissal as considered proper by it.
24.38 Disciplinary procedure for misconduct leading to discharge/dismissal causes dissatisfaction among workers in a country where employment opportunities are inadequate. Attempts by the State to regulate the procedures are considered by employers as undue interference in the exercise of their right to 'hire and lire'. The present regulations in this regard, particularly the denial to the employer of a choice between reinstatement and payment of compensation, do not find favour with the employers as a group. The law, as it stands today, lays down specific procedures in regard to dismissal, so as to ensure that there is no victimisation and that punishment is awarded on the basis of a full enquiry and established facts. Evidence from employers shows that recourse to dismissal as a punishment has been declining. Where such punishment is meted out, courts generally have upheld the employer's decision. Reinstatements have been rare. On the consequence of reinstatement, and this is mostly a subjective assessment, views among- employers are divergent; a small section believes that it does not have any serious repercussions as things settle down in a short time, but a large majority feels that it leads to indiscipline. Workers' representatives, although they accept the claim of employers about the extent of dismissals and their justness in the case of the more progressive elements among employers, have shown dissatisfaction on both counts taking the employer group as a whole. There is a general but grudging acceptance of the existing practice and procedures, although both employers and workers would like to see certain changes introduced to accommodate their respective views. The employers want the law to be changed so as to allow them the right to choose between reinstatement and compensation when mala fides are non-existent. They are exercised over the law, as currently interpreted, particularly in regard to (a) delay and dilatoriness of the proceedings, (b) reference to tribunals even in cases where the domestic enquiry has been in order, and (c) the attitude of tribunals in setting their face against compensation. They have pleaded for a procedure involving minimum third party intervention and have suggested: (i) formulation of more comprehensive model standing A orders classifying major and minor misconducts and specifying punishment to suit each type;
(ii) provision of a milder punishment in lieu of dismissal: (iii) curtailment of tribunals' powers to sit in judgment over management's order; and (iv) payment of compensation rather than reinstatement for wrongful dismissal. Workers, on the other hand, oppose any such choice being granted, as in (iv), as they apprehend that this right will be used to cut at the root of union activity. They have also alleged the arbitrary nature of punishment; punishment for the same misconduct has ranged from four days suspension to dismissal, according to the person involved. Their basic dissatisfaction is, however, about the employer combining in himself the functions of a prosecutor and judge. The claim made by employers that this is not. always so is accepted by unions only to a limited extent and that too in the case of progressive managements. Some of the suggested changes are: (i) standardisation of punishment for different types of misconduct, (ii) inclusion of a workers' representative in the domestic enquiry committee, (iii) having an arbitrator to give decision in a domestic enquiry, (iv) an adequate show-cause opportunity to a workman, (v) presence of a union official to represent the case of a workman in the enquiry proceedings, (vi) supply of the record of proceedings to the aggrieved workman, (vii) payment of a subsistence allowance during the suspension period, (viii) right of appeal to administrative tribunals set up for the purpose, and (ix) fixing a time limit for tribunal proceedings and giving unfettered powers to it to examine the case de novo, modify or cancel a punishment ordered by the employer.
24.39 The general view seems to be in favour of the Bill presently before Parliament. According to it, the labour court/tribunal would be given appellate authority over the findings or a domestic enquiry. It gives to the aggrieved worker the right to appeal against the findings of the inquiry and empowers the court/ tribunal to order reinstatement of a wrongfully dismissed/discharged workman or alter the content of the punishment in favour of the worker. It provides for a decision on the dispute by the labour court/tribunal on the basis of the material on record,
24.40 We, therefore, suggest that the Bill' as it stands should be enacted without delay. To minimise delays in adjudication proceedings and further delays in appeal, adoption of the procedure which obtains in the Small Causes Court and abolition of appeals to higher courts may be provided. To make the procedure more effective, the following provisions should be made.
1 The Industrial Disputes (Amendment) Bill 1966 (Bill No. XVIII of 1966).
(a) In the domestic enquiry, the aggrieved worker should have the right to be represented by an executive of the recognised union or a workman of his choice;
(b) Record of the domestic enquiry should be made in a language understood by the aggrieved employee or his union. A copy of the record should be supplied to him;
(c) The domestic enquiry should be completed within a prescribed period which should be necessarily short;
(d) Appeal against the employer's order of dismissal should be filed within a prescribed period; and
(e) The worker should be entitled to a subsistence allowance during the period of suspension, as per agreement in the tripartite.
ANNEXURE I (Refer Para 24.10)
Functions of Joint Management Councils
1. The Council/Councils would be consulted by the management on matters like
(i) administration of Standing Orders and their amendment, when needed;
(iii) rationalisation; and
(iv) closure, reduction in or cessation of operations.
2. The Council/Councils would also have the right to receive information, to discuss and to give suggestions on
(i) general economic situation of the concern;
(ii) the state of the market, production and sales programmes;
(iii) organisation and general running of the undertaking;
(iv) circumstances affecting the economic position of the undertaking;
(v) methods of manufacture and work;
(vi) the annual balance sheet and profit and loss statement and connected documents and explanation:
(vii) long term plan for expansion, re-deployment etc.; and
(viii) such other matters as may be agreed to.
The Council/Councils would be entrusted with administrative responsibility in respect of
(i) administration of welfare measures;
(ii) supervision of safety measures;
(iii) operation of vocational training and apprenticeship schemes;
(iv) preparation of schedules of working hours and breaks and of holidays;
(v) payment of rewards for valuable suggestions received from the employees; and
(vi) any other matter.
4. All matters, e.g., wages, bonus etc., which are subjects for collective bargaining are excluded from the scope of the Council/Councils. In short, creation of new rights as between employers and workers should be outside the jurisdiction of the Management Council. Individual grievances are also excluded from its/ their scope.
ANNEXURE II (Refer Para 24.33)
Statement showing number of Establishments required
to frame Standing Orders and Establishments having certified Standing Orders (S.Os.)