Labour Law and Industrial Relations I Notes | B.A. LL.B. (Five Year Course) Semester 5 | Mumbai University | munotes

Repeal is the cancellation of an earlier Act by a later one. When an Act is repealed it ceases to be law for the future.

Savings are the provisions that decide what survives a repeal: which things done under the old Act still count, and which bodies set up under it keep working.

Substituted is what a footnote in a bare Act means when it says "Subs. by Act 1 of 2026". Parliament replaced the old text of a provision with new text. The footnote also gives the date from which the replacement operates, which need not be the date the amending Act was passed.

Section 1: what the Code is called, where it applies, and when it began

Section 1(1) gives the short title: the Industrial Relations Code, 2020.

Section 1(2): "It shall extend to the whole of India." There is no exception for any State or territory.

Section 1(3) is the provision that matters, and it is worth reading slowly:

It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint; and different dates may be appointed for different provisions of this Code and any reference in any such provision to the commencement of this Code shall be construed as a reference to the coming into force of that provision.

Three things are in that sentence.

The Code does not commence by itself. It waited for a notification. Between 28 September 2020 and 20 November 2025 this Code was on the statute book and was not the law of anything. Anyone who had written notes teaching it as operative law in that period would have been teaching a text that governed nobody.

Different dates may be appointed for different provisions. Parliament gave itself the power to switch a Code on in pieces. It used that power for the Code on Wages, which is why Module IV of this book needs a whole section on commencement. It did not use it here.

A reference to "the commencement of this Code" means the coming into force of that particular provision. This matters where a Code is switched on in pieces, because "commencement" then has no single meaning.

The notification, and why it is short

The Code was brought into force by S.O. 5320(E) dated 21 November 2025, issued by the Ministry of Labour and Employment. It is one sentence long. It carries no schedule, no list and no exception: it appoints the 21st day of November 2025 as the date on which the provisions of the said Code shall come into force.

So the whole Code is live, all 104 sections of it. Footnote 1 under section 1(3) of India Code's consolidated text says the same thing, and that footnote is the cheapest place to check it.

That short notification is unusual and you should notice it, because its neighbours are not short. The same day the Government issued S.O. 5319(E) for the Code on Social Security and S.O. 5322(E) for the Code on Wages, and both of those commence their Codes in numbered pieces. The Industrial Relations Code got the clean treatment.

Section 104: the repeal, and what it took with it

Section 104(1) is the reason this book exists in the form it does. As it now stands, substituted by Act 1 of 2026:

The following enactments shall stand repealed on and from the date appointed in the notification issued under sub-section (3) of section 1, namely:

(a) the Trade Unions Act, 1926 (16 of 1926);

(b) the Industrial Employment (Standing Orders) Act, 1946 (20 of 1946); and

(c) the Industrial Disputes Act, 1947 (14 of 1947).

Three Acts, and between them they were this entire subject for the best part of a century.

Read the opening words of sub-section (1) carefully. The Acts stand repealed "on and from the date appointed in the notification issued under sub-section (3) of section 1". The repeal is not free-standing: it is tied to the commencement date. That is why the repeal took effect on 21 November 2025 and not on 28 September 2020.

Section 104(1A): the amendment almost nothing else records

The consolidated text of this Code carries a dated heading on its first page, "As on the 2nd April, 2026" in square brackets, not November 2025, and there is one footnote that explains why:

Subs. by Act 1 of 2026, s. 2, for sub-section (1) (w.e.f. 21-11-2025).

Parliament replaced sub-section (1) and, in doing so, added a new sub-section immediately after it, with effect from the very day the Code commenced. The new provision reads:

(1A) Notwithstanding such repeal under sub-section (1), the functioning of the Tribunals and statutory authorities functioning under the Acts so repealed shall continue to function till such Tribunals and other statutory authorities becomes functional under this Code.

The grammar is Parliament's, not ours, and it is quoted as it stands.

What the sub-section does is easy to state and easy to get wrong. The Industrial Tribunals and Labour Courts constituted under the Industrial Disputes Act 1947, and the certifying officers and appellate authorities under the Standing Orders Act 1946, and the Registrars appointed under the Trade Unions Act 1926, did not all stop on 21 November 2025. They go on working until the corresponding bodies under this Code are functional.

The wrong answer, and it is the natural one: "the Industrial Disputes Act 1947 was repealed on 21 November 2025, so from that date every Labour Court and Industrial Tribunal under it ceased to exist and every pending reference lapsed." That is wrong twice over. Sub-section (1A) keeps the forums running, and section 51 of the Code separately provides for the transfer of pending cases.

Why Parliament had to do this is worth a sentence, because it makes the provision memorable. A repeal that abolished the old forums overnight, before the new ones existed, would have left thousands of half-heard references with no tribunal to hear them and no successor to send them to. The amendment closes that gap, and it was made retrospective to the commencement date so that no gap ever opened.

Sections 104(2) and (3): what survives the repeal

Sub-section (2) is the general savings clause. Notwithstanding the repeal, anything done or any action taken under the repealed Acts, "including any rule, regulation, notification, nomination, appointment, order or direction made thereunder", is deemed to have been done or taken under the corresponding provisions of this Code, and remains in force to the extent it is not contrary to the provisions of this Code.

That last qualification is the whole of the sub-section's difficulty. An old rule survives only so far as it does not contradict the Code. Where it does contradict the Code, the Code prevails.

Sub-section (3) adds that, without prejudice to sub-section (2), section 6 of the General Clauses Act 1897 applies to the repeal. Section 6 of that Act is the standard rule that a repeal does not revive anything not in force, does not affect anything duly done, and does not affect any right, obligation or liability already acquired or incurred, or any legal proceeding in respect of it.

Put sub-sections (2) and (3) together and the practical answer is: the old law goes on governing the past, and the Code governs the future. A registration granted under the 1926 Act is still a registration, an award made under the 1947 Act is still an award, and a prosecution begun before the repeal goes on.

There is a specific illustration of this you will meet in a later chapter. Section 9(4) provides that every Trade Union registered under the Trade Unions Act 1926 and holding a valid registration immediately before the commencement of this Code is deemed to be registered under this Code, subject to filing a statement that its executive is constituted in accordance with the Code together with rules updated to match section 7. Unions did not have to register again.

A worked example

The facts. The Konkan Textile Workers' Union was registered under the Trade Unions Act 1926 in 1998. On 3 October 2025 it raised a dispute about the dismissal of a member, and the dispute was referred to the Industrial Tribunal constituted under section 7A of the Industrial Disputes Act 1947. The Tribunal had heard part of the evidence when 21 November 2025 arrived. In March 2026 the employer's advocate argued that the Tribunal had ceased to exist, that the reference had lapsed, and that the union was no longer a registered union because the Act it was registered under had been repealed.

Every limb of that argument fails, and here is the provision for each.

The union is still registered. Section 9(4) deems a Trade Union validly registered under the 1926 Act immediately before commencement to be registered under this Code. The union must file the statement and updated rules the proviso requires, and the Registrar amends his records; it does not apply afresh.

The Tribunal has not ceased to exist. Section 104(1A), inserted by Act 1 of 2026 with effect from 21 November 2025, keeps the Tribunals and statutory authorities functioning under the repealed Acts working until the corresponding bodies under this Code are functional.

The reference has not lapsed. Section 104(2) preserves anything done or action taken under the repealed Acts, and section 6 of the General Clauses Act 1897, applied by section 104(3), preserves legal proceedings in respect of rights and liabilities already accrued. Section 51 of the Code separately provides for the transfer of pending cases.

But the future is governed by the Code. If the union now wants to be the body that negotiates with the employer, it cannot rely on anything the 1926 Act said, because the 1926 Act said nothing about recognition at all. It must satisfy section 14 of this Code.

What this does NOT mean

It does not mean the old cases are worthless. This is the commonest overcorrection and it would cost a student badly. The Code re-enacts most of the old law in new words, and where the words are the same, the decisions construing them still tell you what they mean. What you must never do is cite a case as though it were decided on the Code. Say which Act it was decided under, and say why the reasoning still applies. Every case in this book is presented that way.

It does not mean nothing was left behind. Some things really are new: recognition of a negotiating union in section 14, the worker re-skilling fund in section 83, and a raised threshold in Chapter X are all changes rather than renumberings. Those chapters say so.

It does not mean State labour Acts are gone. Section 104(1) repeals three central Acts. The Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act 1971 is a State Act and is not in that list. It matters a good deal for a Mumbai student, and it comes back in the chapter on recognition.

It does not mean the Code on Wages commenced the same way. It did not. That Code was switched on in two instalments, five years apart, and Module IV explains it.

Limits, criticism and amendments

The five-year gap invited criticism, and the criticism is worth knowing because it is a fair short-note question. A Code passed in 2020 and commenced in 2025 left employers, unions and tribunals working for five years under Acts that everybody knew were going to disappear, without knowing when. State Governments had to frame rules under Codes that were not in force.

The amendment by Act 1 of 2026 is itself a criticism, in the sense that it repairs something the original section 104 had not thought through. That Parliament had to make the repair retrospective to the commencement date, only weeks after commencement, tells you the gap was noticed as soon as the Code began to operate.

And the drafting of sub-section (1A) is loose. "The functioning of the Tribunals ... shall continue to function" is not good English, and the sub-section does not say who decides when a Code Tribunal has become "functional".

Quick revision

• Act 35 of 2020. Assent 28 September 2020. Extends to the whole of India, section 1(2).
• In force 21 November 2025, by S.O. 5320(E) under section 1(3). One sentence, no exceptions: the whole Code.
• Section 104(1) repeals three Acts: Trade Unions Act 1926, Industrial Employment (Standing Orders) Act 1946, Industrial Disputes Act 1947.
• Section 104(1A), inserted by Act 1 of 2026 w.e.f. 21-11-2025: the Tribunals and authorities under the repealed Acts continue to function until the Code's own are functional.
• Section 104(2): things done under the old Acts are deemed done under the Code, so far as not contrary to it. Section 104(3): section 6 of the General Clauses Act 1897 applies.
• Section 9(4): unions registered under the 1926 Act are deemed registered under the Code.
• The Code still has 104 sections, not 25F and not 2(oo). Those numbers belong to a repealed Act.

Test yourself

1. The Industrial Relations Code received assent on 28 September 2020. Was it the law of India on 1 January 2021? No. Section 1(3) provides that it comes into force on such date as the Central Government appoints by notification. No notification had been issued by then. It became law on 21 November 2025, by S.O. 5320(E). Assent and commencement are different things, and only commencement makes an Act operate.

2. Which Acts does section 104(1) repeal, and from what date? The Trade Unions Act 1926, the Industrial Employment (Standing Orders) Act 1946 and the Industrial Disputes Act 1947. From the date appointed in the notification under section 1(3), that is from 21 November 2025.

3. An Industrial Tribunal constituted under the Industrial Disputes Act 1947 was hearing a reference on 20 November 2025. What is its position now? It continues to function. Section 104(1A), substituted into the Code by Act 1 of 2026 with retrospective effect from 21 November 2025, provides that the Tribunals and statutory authorities functioning under the repealed Acts shall continue to function until the corresponding Tribunals and authorities become functional under this Code.

4. A union registered in 1998 under the Trade Unions Act 1926 asks whether it must apply for fresh registration. Advise it. It need not. Section 9(4) deems every Trade Union that held a valid registration under the 1926 Act immediately before commencement to be registered under this Code. The proviso requires it to file with the Registrar a statement that the constitution of its executive accords with the Code, together with its rules updated in accordance with section 7, whereupon the Registrar amends his records.

5. Why does it matter that S.O. 5320(E) contains no schedule? Because section 1(3) permits different dates for different provisions, a notification commencing a Code may switch it on in pieces, and the reader then has to work out which pieces are live. S.O. 5320(E) has no schedule and no exception, so the whole Code came into force together. The Code on Wages, commenced the same day, was not treated that way.

6. A writer says "the Industrial Disputes Act 1947 is the governing law on retrenchment in India." Correct the statement and give the current position. The statement is wrong. That Act was repealed by section 104(1)(c) of the Industrial Relations Code 2020 with effect from 21 November 2025. Retrenchment is now governed by the Code: the definition is in section 2(zh) and the conditions precedent, procedure and re-employment right are in sections 70 to 72, with special provisions for larger establishments in Chapter X.

The workers' answer was arithmetic. One worker who refuses to work loses his job. A thousand workers who refuse to work at the same time stop the mill. Individually the worker has nothing the employer needs; collectively they have the only thing he needs. Combination converts a worthless bargaining position into a real one, and that, and nothing more elevated, is why trade unions exist.

Some words this chapter uses

Combination means an association of persons acting together. It is the word the statutes use, and it is deliberately wide: section 2(zl) of the Code still defines a Trade Union as "any combination, whether temporary or permanent".

Collective bargaining is negotiation between an employer and a body representing the workers, about wages and conditions, in place of negotiation with each worker separately.

Bargaining power is the capacity to make the other side worse off by refusing to agree. It is not a moral idea; it is a description of leverage.

Master and servant is the older name for the law governing employment, when it was treated purely as a contract between two individuals.

Industrial establishment is the Code's expression for the place where the work is done. It is defined in section 2(r).

How this happened in India

The Indian story runs about a century behind England's and it has its own causes.

Factory industry in India begins in the 1850s, with the cotton mills of Bombay and the jute mills near Calcutta. The workforce was drawn from villages, was largely illiterate, worked twelve or more hours, and had no security of any kind. There was no minimum wage, no limit on hours for adults, no compensation for injury and no notice of dismissal.

The earliest responses were not unions but philanthropy and agitation. Individual reformers pressed for factory legislation, and the first Indian Factories Act was passed in 1881, followed by another in 1891. Those Acts were about hours and the employment of children. They were something done for workers, not by them, and they left the bargaining position untouched.

Combinations proper appear at the end of the nineteenth century and grow rapidly after the First World War. The war years produced high prices, hard conditions and large profits, which is the classic combination of circumstances for organised labour. What follows is a period of intense strike activity, and the emergence of unions that were organisations with officers, funds and rules rather than temporary strike committees.

Two outside forces then pushed in the same direction. The International Labour Organisation was created in 1919 and India was a founder member, which committed India to a continuing international conversation about labour standards; that is the subject of two chapters of its own later in this Module. And the national movement drew labour into politics, so that unions grew up alongside political parties rather than apart from them.

That last point has a long consequence, and the Supreme Court itself has described it. In Balmer Lawrie Workers' Union v. Balmer Lawrie & Co. Ltd. the Court explained that the trade union movement representing organised labour "developed as an adjunct of political party", that every political party set up its labour wings to control the vote banks that organised labour represented, and that the combination and fragmentation of political parties therefore produced a matching multiplicity of trade unions in a single undertaking. That case is worked in the chapter on recognition, where its holding belongs, but the historical observation is what explains why India ends up with several unions competing inside one factory rather than one.

The point at which history becomes law

Combination on its own is not enough, because a combination that the law treats as a criminal conspiracy or as an unlawful restraint of trade is worse than useless to its members. The workers' arithmetic works only if the law lets them do the arithmetic.

That is the whole of the next chapter, and it is the second half of MU's topic 1.1. In India the answer came with the Trade Unions Act 1926, which for the first time gave a registered union a legal existence, a protected fund and immunity from certain civil and criminal proceedings. That Act was repealed on 21 November 2025 by section 104(1)(a) of this Code, and its work is now done by Chapter III of the Code, sections 5 to 27.

The case that explains what the Constitution did NOT do

A student who has read about the freedom of association naturally assumes that the Constitution of India solved this problem in 1950. It did not, and the leading case says so in terms.

All India Bank Employees' Association v. National Industrial Tribunal, AIR 1962 SC 171, (1962) 3 SCR 269.

Facts. Section 34A of the Banking Companies Act 1949, inserted in 1960, allowed a banking company to refuse to produce or disclose documents that would reveal reserves not shown as such in its published balance sheet, and provided instead for the Reserve Bank to certify what amount an industrial adjudicator might take into account. The Association argued that this infringed the fundamental right guaranteed to trade unions by Article 19(1)(c) of the Constitution, because it shut out evidence that was important and relevant to the union's bargaining over wages and bonus before industrial tribunals, and that it also violated Article 14 because it applied only to banks operating in more than one State.

Held. Section 34A was constitutionally valid and infringed neither Article 19(1)(c) nor Article 14. The right guaranteed by Article 19(1)(c) does not carry with it a concomitant right that a union formed to protect the interests of labour shall achieve its object. The right extends only to the formation of an association or union. So far as the activities of the union are concerned, and the steps it may take to achieve its objects, those are subject to such laws as may be framed, and such laws are not tested against Article 19(4).

Why it matters here, and it matters more than any other case in this Module. The Constitution gives a worker the right to form a union. It gives no right to strike, no right to be recognised, and no right to bargain collectively. Everything a union can actually do comes from the statute. That is why Chapter III of the Code is the substance of this subject rather than a formality, and why the immunities in sections 16 to 18 are not technicalities: they are the source of the union's operative freedom, because the Constitution is not.

A worked example

The facts. Two hundred workers at a garment unit in Bhiwandi are paid below the rate paid at comparable units. Ravi, one of them, asks the manager for an increase. He is told that the rate is the rate, and that anyone who does not want the work need not come tomorrow. Ravi has a written contract of employment which he signed and which fixes his wage.

Ravi alone. His contract is valid, he agreed to the wage, and the law of contract gives him nothing. He may resign. His resignation costs the employer one day of one machine and costs Ravi his income. That is the whole of his bargaining power.

Ravi with the other one hundred and ninety-nine. If all of them decline to work until the rate is discussed, the unit stops. The employer's loss is now large and immediate, and the workers' collective loss, though real, is spread. For the first time there is something to negotiate about. That change, from nothing to something, is what combination produces, and it is why the workers organise.

But notice what the combination needs from the law before it is any use. The employer's first response will not be to negotiate. It will be to say that the two hundred have conspired to injure his business, that they have induced each other to break their contracts of employment, and that their own agreement to act together is void as a restraint of trade. Each of those is a real legal argument, each of them was once a winning argument, and each is answered by a section of this Code. That is the next chapter.

What this does NOT mean

It does not mean a trade union is only for strikes. The definition in section 2(zl) is about regulating the relations between workers and employers, and a union's ordinary work is negotiation, representation in disciplinary proceedings, and grievance handling. The capacity to withdraw labour is what makes the negotiation real, not what the union is for.

It does not mean combination is only of workers. Section 2(zl) covers a combination formed to regulate relations "between employers and employers" as well. Employers' associations are trade unions under this Code. Students routinely lose a mark by defining the term as though only workers could form one, and the chapter on the definition returns to this.

It does not mean the history is optional background. MU sets it directly, and the reason it can be examined is that the history explains the structure: it tells you why registration exists, why there are immunities, why recognition became necessary, and why the Code deals with strikes and lock-outs in the same breath.

Quick revision

• Workers combined because the individual contract of employment assumed two equal parties and the factory system made that assumption false.
• Three causes of the inequality: the worker owns nothing in the workplace; labour cannot be stored, so he must settle now; and there are many workers and few employers, so he is replaceable.
• Combination changes the arithmetic: one worker's refusal costs the employer a day, a thousand workers' refusal stops the mill.
• India: factory industry from the 1850s in Bombay and Calcutta; Factories Acts 1881 and 1891, done for workers not by them; combinations grow strongly after the First World War; ILO 1919, India a founder member; unions grew alongside political parties, which is why one factory can have several.
• The first statute to give unions legal existence was the Trade Unions Act 1926, repealed on 21 November 2025 by section 104(1)(a); its work is now Chapter III, sections 5 to 27.
• All India Bank Employees' Association, AIR 1962 SC 171: Article 19(1)(c) protects only the formation of a union, not the achievement of its objects. Everything else comes from the statute.

Test yourself

1. Why could the law of contract not protect an industrial worker? Because it assumes two parties of equal bargaining power freely negotiating terms. In a factory the worker owns none of the means of production, cannot store his labour and so must settle immediately, and is one of many competing for few positions. The employer therefore sets the terms and the worker accepts or leaves, yet the law of contract sees only a signed agreement and can find nothing wrong with it.

2. State the arithmetic that makes combination worth anything. Individually a worker has nothing the employer needs, because he is replaceable and his refusal costs the employer a single day. Collectively the same workers control the only thing the employer needs, because a simultaneous withdrawal of labour stops production. Combination converts a worthless bargaining position into a real one.

3. Trace the growth of combinations of workers in India in outline. Factory industry begins in the 1850s with the Bombay cotton mills and the Calcutta jute mills, drawing an illiterate village workforce into long hours without security. The first responses are protective statutes made for workers rather than by them, the Factories Acts of 1881 and 1891. Combinations proper appear at the end of the nineteenth century and grow rapidly after the First World War, when high prices, hard conditions and large profits produced sustained strike activity and permanent organisations with officers, funds and rules. Two external forces reinforced this: the founding of the International Labour Organisation in 1919, of which India was a founder member, and the national movement, which drew labour into politics so that unions grew as adjuncts of political parties. Legal recognition came with the Trade Unions Act 1926, whose work is now done by Chapter III of the Industrial Relations Code 2020.

4. Does Article 19(1)(c) of the Constitution give a trade union the right to bargain collectively? Give authority. No. In All India Bank Employees' Association v. National Industrial Tribunal, AIR 1962 SC 171, the Supreme Court held that the right under Article 19(1)(c) extends only to the formation of an association or union, and carries no concomitant right that the union shall achieve its objects. The union's activities, and the steps it may take to achieve its objects, are subject to such laws as may be framed, and those laws are not tested under Article 19(4).

5. Why does the Supreme Court's observation in Balmer Lawrie about political parties matter to this subject? Because it explains why a single Indian undertaking commonly has several competing unions. The Court noted that the trade union movement developed as an adjunct of political parties, that parties set up labour wings to control vote banks, and that the multiplicity and fragmentation of parties produced a matching multiplicity of unions. That multiplicity is the problem that recognition under section 14 of the Code exists to solve.

6. A friend says "a trade union means an organisation of workmen." What is wrong with the definition? It is too narrow in two ways. Section 2(zl) defines a Trade Union as any combination, whether temporary or permanent, formed primarily for regulating the relations between workers and employers, between workers and workers, or between employers and employers, or for imposing restrictive conditions on the conduct of any trade or business, and it includes a federation of two or more Trade Unions. So a combination of employers is a Trade Union, and a temporary combination is a Trade Union.

The answer is section 17 of the Code, which provides that no office-bearer or member of a registered Trade Union shall be liable to punishment under section 120B(2) of the Indian Penal Code in respect of any agreement made between the members for the purpose of furthering any object of the Trade Union specified in section 15, unless the agreement is an agreement to commit an offence.

And the limits of that answer were settled in the leading Indian case.

Jay Engineering Works Ltd. v. State of West Bengal, AIR 1968 Cal 407, a Full Bench of the Calcutta High Court.

Facts. Workers of the company's Calcutta sales office, together with retrenched employees, repeatedly surrounded the manager and other officers and confined them in the office: for thirty-three hours from 2 to 3 March 1967, again on 17 April 1967 until they were rescued on a magistrate's order, and again for over five hours on 29 May 1967. Food was allowed in only in nominal quantity, property was damaged, and slogans were shouted at the confined men. The police, acting on two State Government circulars, took no action. The company moved the High Court under Article 226.

Held. The Court defined gherao as a physical blockade of a target, by encirclement or forcible occupation, the target being a place or persons, usually the managerial or supervisory staff, invariably accompanied by wrongful restraint or wrongful confinement and often by assault, criminal trespass, mischief and unlawful assembly, its object being to compel those who control industry to submit without recourse to the machinery provided by law. On the immunity, the Court held that the protection in section 17 of the Trade Unions Act 1926 is of a limited nature: it provides only that an agreement to do things in furtherance of the objects in section 15 shall not amount to criminal conspiracy, and there is nothing in the Act which, apart from immunity from criminal conspiracy, gives immunity from any criminal offence. Wrongful restraint and wrongful confinement are not saved by it. Workers may strike peacefully, but have no right to resort to wrongful restraint, wrongful confinement or criminal trespass, all of which are cognizable offences.

Why it matters. It is the case that fixes the boundary. The immunity covers the agreement, not the acts. A union that agrees to stop work is protected; a union whose members lock a manager in a room is not, and the section it would have to rely on has nothing to say about wrongful confinement.

Impediment two: the civil action in tort

The criminal law was only half the employer's armoury, and in practice the smaller half. The larger threat was a civil suit, because a civil suit reaches the union's money.

Two torts were available.

Inducing a breach of contract. Every striking worker is, in the ordinary way, breaking his own contract of employment. Anyone who persuades him to do so, that is the union and its officers, commits the tort of inducing a breach of contract and is liable to the employer for the resulting loss. This was the standard weapon, and it was devastating, because the loss claimed was the whole value of the production lost.

Conspiracy. A combination of persons whose purpose is to injure another, causing damage, is actionable as a tort independently of whether the acts done would have been wrongful if done by one person alone.

The answer is section 16 of the Code, and it is drawn to meet those two torts precisely. Section 16(1) provides that no suit or other legal proceeding shall be maintainable in any civil court against a registered Trade Union or any office-bearer or member of it, in respect of any act done in contemplation or furtherance of an industrial dispute to which a member of the Trade Union is a party, on the ground only that such act induces some other person to break a contract of employment, or that it is an interference with the trade, business or employment of some other person, or with the right of some other person to dispose of his capital or of his labour as he wills.

How narrow that protection actually is was settled by the Supreme Court.

Rohtas Industries Ltd. v. Rohtas Industries Staff Union, AIR 1976 SC 425, (1976) 2 SCC 82.

Facts. In 1948 the workmen of Rohtas Industries went on a strike that was illegal under sections 23 and 24 of the Industrial Disputes Act 1947, the strike arising out of rivalry between unions. The workmen were not paid wages for the strike period and the employers lost profit. During conciliation the parties agreed to refer both claims, the workmen's claim for wages for the strike period and the employers' claim for compensation for the loss the strike caused, to the joint arbitration of two retired High Court judges and a retired member of a Labour Appellate Tribunal under section 10A of the 1947 Act. The arbitrators awarded the employers compensation. The union moved the High Court under Article 226.

Held. The employers' claim failed. The tort of conspiracy necessarily involves that the object of the combination be the infliction of damage on the plaintiff. A strike may be illegal, but if its object is to bring the employer to terms or to bully a rival union into submission, there is no actionable combination in tort; here the conceded object was inter-union rivalry, and the arbitrators had simply assumed that an illegal strike made the tort out. Further, an illegal strike is the creation of the statute, and the remedy for it must be sought within the statute; the employers' claim for compensation for loss of business is not an industrial dispute within section 2(k), so the arbitrators had no jurisdiction, and the consent of the parties could not create it. The Court also held the High Court wrong in supposing that section 18 of the Trade Unions Act 1926 gave strikers an implied immunity from all legal proceedings. Sabotage is expressly outside any protection: individuals who wilfully destroy plant and machinery are liable for the injury they cause.

Why it matters. It does three jobs at once. It shows how narrow the tort of conspiracy is when the defendants are workers pursuing their own interests. It shows that the statutory civil immunity is not a blanket one, which is the error the High Court had made. And it disposes of the employer's instinctive remedy, a suit for the profits an illegal strike cost him.

Impediment three: restraint of trade

The third impediment is the one students forget, and it is the most elegant of the three, because it did not attack the union from outside. It attacked the union from inside.

The doctrine. An agreement by which a person is restrained from exercising a lawful profession, trade or business is void. In India this is section 27 of the Indian Contract Act 1872.

Why it bit a trade union. A union's rules are an agreement among its members that they will not work below an agreed rate, or will not work on terms the union has not approved, or will stop work when the union decides. Every one of those is, on its face, a restraint on the members' freedom to dispose of their own labour. If section 27 applied, the union's rules were void, and a member who took work at a lower rate could not be held to anything he had agreed.

Notice what that does. It does not fine the union or imprison its officers. It quietly removes the union's ability to hold its own members together, which is the only thing that makes a combination work at all. A union whose rules are unenforceable is a debating society.

The answer is section 18 of the Code, which provides that notwithstanding anything contained in any other law for the time being in force, an agreement between the members of a registered Trade Union shall not be void or voidable merely by reason of the fact that any of the objects of the agreement are in restraint of trade. A proviso keeps the courts out of enforcing certain of those agreements, which is a different matter and belongs to that chapter.

The three impediments and the three answers

Read that table as the plan of the next three chapters, because it is. Sections 16, 17 and 18 sit together in the Code in that order for exactly this reason: they are three answers to three different attacks, and none of them would work without the other two.

What the Constitution did not do

It is natural to think that all of this was settled in 1950 by Article 19(1)(c), which guarantees to all citizens the right to form associations or unions. It was not, and this is where the previous chapter's case does its second job.

In All India Bank Employees' Association v. National Industrial Tribunal, AIR 1962 SC 171, the Supreme Court held that the right guaranteed by Article 19(1)(c) extends only to the formation of an association or union, and does not carry with it a concomitant right that the union shall achieve its objects; the union's activities, and the steps it may take to achieve its objects, are subject to such laws as may be framed, and such laws are not tested against Article 19(4).

So the Constitution removed none of the three impediments. It guarantees that the two hundred workers may form their union. It says nothing about whether their agreement is a conspiracy, whether their officers may be sued, or whether their rules are void. Those questions are answered by sections 16, 17 and 18 of this Code and by nothing else, which is why a subject that looks like background history is in fact the foundation of the statute.

A worked example

The facts. The two hundred garment workers of the previous chapter form the Bhiwandi Garment Workers' Union and register it under Chapter III. They serve notice, and after the notice period expires they stop work over the wage rate. Production halts for nine days. The employer, Shalini, takes advice.

Shalini's first idea: prosecute the office-bearers for criminal conspiracy. They agreed together to stop the work; that is an agreement to cause loss. Answer: section 17. No office-bearer or member of a registered Trade Union is liable to punishment under section 120B(2) of the penal law for an agreement made between the members to further an object of the union specified in section 15. Regulating relations with the employer over wages is such an object. The prosecution fails, and it fails because the union is registered.

Shalini's second idea: sue the union for the nine days' lost production. Every striker broke his contract of employment and the union induced them to. Answer: section 16(1). No suit lies against a registered Trade Union or its office-bearers or members in respect of an act done in contemplation or furtherance of an industrial dispute to which a member is a party, on the ground only that the act induces another to break a contract of employment or interferes with the employer's trade or business. And on the tort of conspiracy, Rohtas Industries answers her directly: the object of the combination must be the infliction of damage on the plaintiff, and the object here is a wage increase.

Shalini's third idea: persuade forty workers to come back at the old rate, and rely on section 27 of the Contract Act to say the union cannot hold them. Answer: section 18. An agreement between the members of a registered Trade Union is not void or voidable merely because some of its objects are in restraint of trade.

But now change the facts. On the sixth day thirty members lock the supervisor in the store room for eleven hours, and two of them break the cutting machines. Section 17 does not help, because on Jay Engineering Works the immunity is from the charge of conspiracy and gives no immunity from any substantive offence; wrongful confinement is an offence and the section says nothing about it. Section 16 does not help those two, because on Rohtas Industries sabotage is outside the protection and individuals who wilfully destroy plant and machinery are liable for the injury caused. The union's protection is a protection of the strike, not of everything done during it.

What this does NOT mean

It does not mean the immunities protect an unregistered combination. Every one of sections 16, 17 and 18 speaks of a registered Trade Union. That is what registration is worth, and it is why the registration chapters follow this one.

It does not mean the immunities are three ways of saying the same thing. They answer three different attacks and are drawn differently: section 16 is about civil suits, section 17 about a criminal charge, and section 18 about the validity of the union's own agreements. An answer that treats them as interchangeable will lose marks on any question that asks about one of them.

It does not mean the impediments were unreasonable when they arose. The doctrine of conspiracy, the tort of inducing a breach of contract and the rule against restraints of trade are all sensible rules of general application. They caused harm here because they were applied to a relationship that was not the arm's length bargain they assumed.

Limits, criticism and amendments

The immunities are narrow, and deliberately so. Nothing in them protects violence, wrongful confinement, trespass, damage to property or defamation, and both leading cases in this chapter say so.

Section 17 of the Code still cites the Indian Penal Code 1860. The Code was passed in 2020 and the penal law has since been replaced by the Bharatiya Nyaya Sanhita 2023, but the text of section 17 continues to refer to "sub-section (2) of section 120B of the Indian Penal Code (45 of 1860)". The reference is read, in the ordinary way, as a reference to the corresponding provision of the law now in force, but a student should quote the section as it stands rather than silently modernising it.

The criticism most often made is that the protections stop where they are most needed. An immunity that covers the agreement to strike but not the acts by which a strike is made effective leaves a great deal to the discretion of the police and the criminal courts, which is exactly the complaint made in Jay Engineering Works about the State circulars there.

Quick revision

• Three impediments, and the whole of Chapter III's protective sections answer them.
• Criminal conspiracy, section 120A and section 120B of the penal law: the agreement to act together was itself an offence. Answered by section 17.
• Tort, inducing breach of the contract of employment and conspiracy: the employer sued the union for the production lost. Answered by section 16.
• Restraint of trade, section 27 of the Indian Contract Act 1872: the union's own rules were void, so it could not hold its members. Answered by section 18.
• Jay Engineering Works, AIR 1968 Cal 407: the immunity is "of a limited nature"; it covers the agreement, and gives no immunity from any substantive offence. Definition of gherao.
• Rohtas Industries, AIR 1976 SC 425: the tort of conspiracy needs the object of the combination to be the infliction of damage; an employer's claim for loss of business is not an industrial dispute; the civil immunity is not a blanket immunity from all legal proceedings; sabotage is outside it.
• All India Bank Employees' Association, AIR 1962 SC 171: Article 19(1)(c) covers only formation, so the Constitution removed none of the three impediments.
• All three immunities are given to a registered Trade Union.

Test yourself

1. Name the three legal impediments to combinations of workers and the section of the Code that answers each. Criminal conspiracy, answered by section 17; the civil action in tort for inducing a breach of the contract of employment and for conspiracy, answered by section 16; and the rule that an agreement in restraint of trade is void, section 27 of the Indian Contract Act 1872, answered by section 18.

2. Why was the restraint of trade doctrine more dangerous to a union than it first appears? Because it did not attack the union from outside but from within. A union's rules are an agreement among members not to work below an agreed rate or otherwise than as the union directs, which is on its face a restraint on their freedom to dispose of their own labour. If those rules were void, the union could not hold its own members together, and a combination that cannot hold its members is of no use at all.

3. Workers gherao the manager for twenty hours during a lawful strike. Can they claim the immunity in section 17? No, so far as the confinement is concerned. On Jay Engineering Works Ltd. v. State of West Bengal, AIR 1968 Cal 407, the immunity is of a limited nature: it provides only that an agreement to further the union's objects shall not amount to criminal conspiracy, and there is nothing in the statute which, apart from immunity from criminal conspiracy, gives immunity from any criminal offence. Wrongful restraint and wrongful confinement are offences and are not saved.

4. An employer sues a registered union for the profits lost during an illegal strike. Advise him, with authority. The claim will fail. On Rohtas Industries Ltd. v. Rohtas Industries Staff Union, AIR 1976 SC 425, the tort of conspiracy requires that the object of the combination be the infliction of damage on the plaintiff, and where the object is to bring the employer to terms or to overcome a rival union there is no actionable combination. An illegal strike is the creation of the statute and the remedy must be sought within the statute; a claim for compensation for loss of business is not an industrial dispute, so it cannot be referred to adjudication or arbitration under the industrial law, and consent cannot create that jurisdiction. Section 16 of the Code separately bars a civil suit against a registered union on the ground only that the act induced a breach of a contract of employment or interfered with the employer's business.

5. Does registration matter to the immunities? Say why. Yes, decisively. Sections 16, 17 and 18 each confer their protection on a registered Trade Union and its office-bearers and members. An unregistered combination has none of them, and is exposed to prosecution for conspiracy, to a suit in tort, and to the argument that its own rules are void. Registration is the price of the protection.

6. "Article 19(1)(c) makes the immunities unnecessary." Comment. The statement is wrong. In All India Bank Employees' Association v. National Industrial Tribunal, AIR 1962 SC 171, the Supreme Court held that Article 19(1)(c) extends only to the formation of a union and carries no concomitant right that it shall achieve its objects; its activities and the steps it takes are subject to such laws as may be framed. The Constitution therefore guarantees that the union may exist and says nothing about whether its agreement is a conspiracy, whether its officers may be sued, or whether its rules are void. Those questions are answered only by sections 16, 17 and 18.

Some words this chapter uses

Tripartite means made of three parts. Applied to the ILO it means that each member State is represented not by its government alone but by its government, its employers and its workers, each speaking for itself.

Convention, in ILO usage, is an international treaty adopted by the Conference which a member State may ratify, and which binds that State in international law once ratified.

Recommendation is an instrument adopted by the Conference which is not open to ratification and which is not binding. It offers guidance, and it is used, in the words of article 19(1)(b), where the subject or an aspect of it is not considered suitable or appropriate at that time for a Convention.

Ratification is a State's formal act of accepting a treaty as binding on it.

The competent authority is the body within a State whose function it is to legislate on the subject. In India it is Parliament, or a State legislature, depending on the subject.

Specialised agency is the status an international organisation holds when it is brought into relationship with the United Nations under the UN Charter while keeping its own constitution and membership.

Where the ILO came from

1919: Part XIII of the Treaty of Versailles. The Organisation was created as part of the peace settlement at the end of the First World War, in the same instrument that created the League of Nations. India was among its founding members, which matters for the next chapter.

1944: the Declaration of Philadelphia. At Philadelphia on 10 May 1944, with a second war ending, the Conference adopted a Declaration restating the aims and purposes of the Organisation in far broader terms than 1919 had used. Its most quoted propositions are that labour is not a commodity; that freedom of expression and of association are essential to sustained progress; that poverty anywhere constitutes a danger to prosperity everywhere; and that all human beings, irrespective of race, creed or sex, have the right to pursue both their material well-being and their spiritual development in conditions of freedom and dignity, of economic security and equal opportunity.

1946: the Declaration is written into the Constitution. The Constitution was amended at Montreal in 1946, and article 1(1) as amended now establishes the permanent organisation "for the promotion of the objects set forth in the Preamble to this Constitution and in the Declaration concerning the aims and purposes of the International Labour Organisation adopted at Philadelphia on 10 May 1944 the text of which is annexed to this Constitution." The Declaration is therefore not a speech about the Constitution. It is part of it.

The same amendment brought the Organisation into the United Nations system, replacing the references to the League of Nations that the 1919 text carried. Under article 1(2) as amended, the Members are the States that were Members on 1 November 1945, together with such other States as become Members under the following paragraphs.

What makes the ILO different from every other international organisation

Tripartism. This is the answer to any question that asks what is special about the ILO, and it is found in article 3(1) of its Constitution:

The meetings of the General Conference of Representatives of the Members shall be held from time to time as occasion may require, and at least once in every year. It shall be composed of four representatives of each of the Members, of whom two shall be Government delegates and the two others shall be delegates representing respectively the employers and the workpeople of each of the Members.

Read the arithmetic in that sentence, because it is the point.

In every other international organisation, a State speaks with one voice, its government's. Here it speaks with three, and two of the three are not the government at all. The employers' delegate and the workers' delegate are not instructed by their government, and article 4(1) confirms the consequence: each delegate is entitled to vote individually on all matters before the Conference. An Indian workers' delegate may vote against the Indian Government, and does.

Article 4(2) has a sanction that makes the tripartism real. If a Member fails to nominate one of the non-Government delegates it is entitled to nominate, the other non-Government delegate is entitled to take part in the discussions of the Conference but is not entitled to vote. So a government which leaves out the workers' delegate does not gain the employers' vote; it loses it.

Article 3(2) adds that each delegate may be accompanied by advisers, not exceeding two for each item on the agenda, and provides that when questions specially affecting women are to be considered, at least one of the advisers should be a woman.

The three organs

The International Labour Conference is the deliberative organ, composed as article 3 describes and meeting at least once a year. It adopts Conventions and Recommendations, adopts the budget, and admits new Members. It is sometimes called the international parliament of labour.

The Governing Body is the executive organ. Under article 7 it is tripartite in the same way, drawn from Government, employers' and workers' representatives, and it settles the agenda of the Conference, elects the Director-General and supervises the work of the Office. The number of persons composing it has been altered by later amendments to the Constitution, and this book deliberately does not print a figure, because the copy of the Constitution available to us is the text as amended in 1946 and that figure has since changed.

The International Labour Office is the permanent secretariat, headed by the Director-General. It prepares the documents for the Conference, carries out research, publishes, and receives the reports member States are required to send.

Article 19: how a standard is made, and what a State must then do

This is the operative article of the whole Constitution for our purposes, because it is where an international decision starts to press on a national legislature.

Article 19(1): the Conference chooses the instrument. When the Conference has decided on the adoption of proposals with regard to an item on the agenda, it rests with the Conference to determine whether those proposals should take the form of (a) an international Convention, or (b) a Recommendation, to meet circumstances where the subject, or an aspect of it, is not considered suitable or appropriate at that time for a Convention.

Article 19(2): the majority. In either case a majority of two-thirds of the votes cast by the delegates present is necessary on the final vote for adoption.

Article 19(3): the developing-country clause, and it matters to India. In framing any Convention or Recommendation of general application, the Conference shall have due regard to those countries in which climate, the imperfect development of industrial organisation, or other special circumstances make the industrial conditions substantially different, and shall suggest such modifications as it considers may be required to meet the case of such countries.

Article 19(5): the obligation, and this is the paragraph to learn. Where the instrument is a Convention:

• (a) the Convention is communicated to all Members for ratification;
• (b) each Member undertakes to bring the Convention, within one year from the closing of the session of the Conference, or where exceptional circumstances make that impossible then as soon as possible but never more than eighteen months, before the authority or authorities within whose competence the matter lies, for the enactment of legislation or other action;
• (c) Members shall inform the Director-General of the measures taken to bring the Convention before that authority, with particulars of the authority regarded as competent and of the action taken by it;
• (d) if the Member obtains the consent of the competent authority, it will communicate the formal ratification to the Director-General and take such action as may be necessary to make the provisions of the Convention effective;
• (e) if the Member does not obtain that consent, no further obligation rests upon it, except that it shall report to the Director-General at appropriate intervals.

Now read (b) and (e) together, because between them they define exactly how much power the ILO has over a national legislature.

Paragraph (b) is a real and unconditional obligation, and it is an obligation of process. Every member State must place every Convention before its own law-making authority, within a fixed time, whether or not the government likes the Convention and whether or not it intends to ratify. It cannot quietly bury an instrument it dislikes.

Paragraph (e) is the limit. If the legislature says no, that is the end of it. There is no further obligation beyond periodic reporting.

So the ILO cannot legislate for any country. What it can do is force the question onto the table, in public, on a timetable, in a forum where that country's own employers and workers were part of the decision. That is a weaker power than legislation and a much stronger one than persuasion, and it is the mechanism by which the influence described in the next chapter actually operates.

Article 22 completes the machinery: a Member that has ratified a Convention must make annual reports to the Office on the measures it has taken to give effect to it. Ratification is therefore not the end of the process but the beginning of a supervised one.

A worked example

The facts. The Conference adopts a Convention on the maximum weight a single worker may be required to carry. India's delegation at the session consisted of two Government delegates, one delegate nominated after consultation with the central employers' organisations, and one nominated after consultation with the central workers' organisations. The workers' delegate voted for the Convention; the Government delegates abstained. The Convention was adopted by more than two-thirds of the votes cast.

Is the Convention validly adopted despite the Government's abstention? Yes. Article 4(1) gives each delegate the right to vote individually on all matters before the Conference, and article 19(2) requires only a two-thirds majority of the votes cast by delegates present. India's Government does not control India's vote, because India does not have one vote.

Is India now bound by the Convention? No. A Convention binds a State only on ratification. Adoption at the Conference creates no substantive obligation.

Then what must India actually do? Article 19(5)(b): it must bring the Convention before the authority within whose competence the matter lies, for the enactment of legislation or other action, within one year of the closing of the session, or exceptionally as soon as possible and never later than eighteen months. Under 19(5)(c) it must tell the Director-General what it did, which authority it treated as competent, and what that authority decided.

Suppose Parliament declines to legislate. Article 19(5)(e): no further obligation rests upon India, except that it must report to the Director-General at appropriate intervals. The Convention does not become Indian law, and no sanction follows.

Suppose instead Parliament consents and India ratifies. Article 19(5)(d): India must communicate the formal ratification and take such action as may be necessary to make the provisions of the Convention effective, which in practice means legislating. Article 22 then requires an annual report on the measures taken.

What this does NOT mean

It does not mean an ILO Convention is part of Indian law. It is not, unless and until Parliament legislates. India follows the dualist position: a treaty binds India in international law on ratification, and changes the rights of individuals in Indian courts only when a statute says so.

It does not mean a Recommendation is a lesser Convention. It is a different instrument, used deliberately where the Conference thinks the subject is not ripe for a binding treaty. It is not open to ratification at all.

It does not mean the ILO enforces anything. There is no ILO court that can strike down a national law, and no penalty for declining to ratify. The Organisation works by standard-setting, supervision, reporting and publicity.

It does not mean the tripartite delegates are a formality. The non-Government delegates vote independently, and article 4(2) penalises a government that tries to leave one of them out by disqualifying the other from voting.

Limits and criticism

Ratification is voluntary and uneven. A Convention adopted by an overwhelming majority may be ratified by very few States, and the Organisation's own standards therefore apply patchily.

The obligation in article 19(5)(b) is procedural. It guarantees that the question is asked. It guarantees nothing about the answer.

Supervision depends on self-reporting. Articles 19 and 22 work through reports made by the very governments whose compliance is in issue.

And the tripartite structure assumes something that is not always true, namely that there exist, in each member State, employers' and workers' organisations free enough to choose their own delegates. Where they do not, the two non-Government seats can be filled by the government in substance if not in form.

Quick revision

• Founded 1919, by Part XIII of the Treaty of Versailles. Now a specialised agency of the United Nations, after the 1946 amendment made at Montreal.
• Preamble: universal and lasting peace can be established only if based on social justice; and one nation's failure to adopt humane conditions of labour obstructs other nations that wish to improve their own.
• Declaration of Philadelphia, 10 May 1944, is annexed to and part of the Constitution by article 1(1). Labour is not a commodity; poverty anywhere is a danger to prosperity everywhere.
• Tripartite, article 3(1): four representatives per Member, two Government, one employers', one workers'. Article 4(1): each delegate votes individually. Article 4(2): fail to nominate one non-Government delegate and the other loses the vote.
• Three organs: International Labour Conference (deliberative, meets at least yearly), Governing Body (executive, tripartite), International Labour Office (secretariat, Director-General).
• Article 19(1): Convention or Recommendation. 19(2): two-thirds of votes cast. 19(3): due regard to countries whose industrial conditions differ.
• Article 19(5)(b): bring every Convention before the competent authority within one year, exceptionally never more than eighteen months. 19(5)(e): if consent is refused, no further obligation beyond reporting.
• Article 22: annual reports on ratified Conventions.

Test yourself

1. What is the ILO's own stated reason for existing? Its Preamble gives two. First, that universal and lasting peace can be established only if it is based upon social justice, conditions of labour involving injustice and privation producing unrest that imperils the peace and harmony of the world. Second, that the failure of any nation to adopt humane conditions of labour is an obstacle in the way of other nations desiring to improve conditions in their own countries, so that no country can safely raise its standards alone.

2. What is meant by saying that the ILO is tripartite, and where is it in the Constitution? Article 3(1) provides that the General Conference shall be composed of four representatives of each Member, of whom two shall be Government delegates and the two others delegates representing respectively the employers and the workpeople. Each Member is therefore represented by its government, its employers and its workers rather than by its government alone, and by article 4(1) each delegate votes individually, so the non-Government delegates may and do vote against their own government.

3. Distinguish a Convention from a Recommendation.

4. India's Parliament declines to enact a Convention that India's delegation voted for. What are India's obligations? India must still have brought the Convention before the competent authority within one year of the closing of the session, or exceptionally as soon as possible and never more than eighteen months, under article 19(5)(b), and must have informed the Director-General of the measures taken, the authority treated as competent and the action taken, under article 19(5)(c). Since the consent of the competent authority was not obtained, article 19(5)(e) provides that no further obligation rests upon India except that it shall report to the Director-General at appropriate intervals.

5. Why does article 19(3) matter particularly to India? Because it requires the Conference, in framing any Convention or Recommendation of general application, to have due regard to countries in which climate, the imperfect development of industrial organisation or other special circumstances make industrial conditions substantially different, and to suggest such modifications as may be required to meet their case. It is the provision that allows a universal standard to be framed so that an industrialising economy can accept it.

6. "The ILO can compel India to change its labour law." Comment. The statement is wrong. The ILO cannot legislate for any member State and has no court that can strike down a national law. What article 19(5)(b) compels is a process: every Convention must be placed before the competent law-making authority within a fixed time, whatever the government thinks of it. If that authority refuses its consent, article 19(5)(e) leaves no further obligation beyond periodic reporting. The influence is real but it operates through obligation to consider, supervision, reporting and publicity, not through compulsion.

What that does to a government is easy to underestimate. A government which regards a proposed standard as premature cannot simply ignore it. It must place it before Parliament, on a timetable, and then report internationally on what happened. The subject is put on the domestic agenda by an external timetable rather than a domestic one, and it is put there in public.

And the pressure is not only external. The Indian delegation that voted at Geneva included an Indian workers' delegate and an Indian employers' delegate, each voting individually under article 4(1). When the Convention comes home, the domestic debate already has two organised Indian constituencies that took a position on it. The ILO's method therefore manufactures a domestic lobby as a by-product of the international vote.

India's participation is old, and a court has noticed its effect.

Jay Engineering Works Ltd. v. State of West Bengal, AIR 1968 Cal 407, a Full Bench of the Calcutta High Court.

Facts. Workers of the company's Calcutta sales office, with retrenched employees, repeatedly surrounded and confined the manager and other officers, for thirty-three hours in March 1967 and again in April and May, while the police took no action under two State Government circulars. The company moved the High Court under Article 226. Because the case required the Court to decide whether such conduct was lawful in an industrial dispute, it began by tracing how India came to have industrial legislation at all.

Held, on that historical question. Before the First World War there was no industrial legislation in India and the idea of settling industrial disputes by legislation was not known, the ordinary principles of master and servant governing the relations of employer and employee. During the war manufacturers made phenomenal profits and there was a significant increase in the employment of industrial labour. The holding of the International Labour Conference at Washington in 1919, in which India participated, raised the consciousness of labour to their own plight. The spasmodic occurrences of strikes then led to an important amendment of the Factories Act in 1922.

Why it matters here. It is a court's own account of the ILO as a cause of Indian labour legislation, which makes it the safest single authority for this topic. The case is worked at length for its holding on the limits of the criminal immunity in [The Legal Impediments: Conspiracy and Restraint of Trade]; it is cited here for its history.

Channel two: the tripartite method, imported wholesale

The ILO's most transferable idea was not any particular standard. It was the way the standard is made: government, employers and workers in one room, each speaking for itself.

India adopted that method domestically. The Indian Labour Conference is India's own tripartite forum, and its consensus has repeatedly preceded legislation rather than followed it.

There is a documented instance of this in one of the very Acts this Code repealed, and it is worth quoting because it is primary material rather than commentary. The Industrial Employment (Standing Orders) Act 1946, in its own introduction, explains its origin in these terms: that the economic law of demand and supply had been assumed to secure fair terms, that the working of that law belied the assumption, that workers accordingly organised themselves in trade unions and insisted on collective bargaining, and that, recognising the rough deal being given to workers by employers who would not define their conditions of service, the legislature intervened. It then says, of the central idea of the Act:

Discussion on the subject at the tripartite Indian labour Conference revealed a consensus of opinion in favour of standing orders in all industrial establishments employing one hundred or more workers.

Read what that sentence actually records. The statutory requirement that an employer must define and certify the conditions of service, which is the whole of what is now Chapter IV of the Code, was settled at a tripartite conference before it was settled in Parliament. The threshold, one hundred workers, came out of the same discussion. That is the ILO's method operating on Indian soil and producing an Indian statute.

The same method produced the Codes themselves. The Statement of Objects and Reasons of the Code on Wages 2019 records that the Second National Commission on Labour, which reported in June 2002, recommended that the existing set of labour laws be broadly amalgamated into groups covering industrial relations, wages, social security, safety, and welfare and working conditions; and that in pursuance of those recommendations and of the deliberations made in the tripartite meeting comprising the Government, employers' and industry representatives, it was decided to bring the proposed legislation. The four Labour Codes of 2019 and 2020, including the Industrial Relations Code this book teaches, are the direct product of that grouping.

Channel three: the Constitution of India adopted the ILO's aims

This is the channel students most often miss, and it is the one that gives the influence permanence.

The Constituent Assembly wrote into Part IV of the Constitution, as Directive Principles of State Policy, a set of obligations that read like the Declaration of Philadelphia turned into domestic constitutional language. They are not enforceable in a court, but they are, in the Constitution's own words, fundamental in the governance of the country and it is the duty of the State to apply them in making laws.

Article 43A repays attention, because it dates the influence rather than merely illustrating it. It was inserted by the Constitution (Forty-second Amendment) Act 1976, with effect from 3 January 1977. Worker participation in management is an ILO preoccupation of long standing, and India wrote it into its Constitution in the 1970s. The Code's own bi-partite forums, the Works Committee in section 3 and the Grievance Redressal Committee in section 4, are what article 43A looks like once it reaches a statute.

Two other constitutional provisions belong in the answer.

Articles 23 and 24 are fundamental rights, not directives, and they are enforceable. Article 23 prohibits traffic in human beings and forced labour. Article 24 prohibits the employment of a child below fourteen years in any factory or mine or in any other hazardous employment. Those subjects, forced labour and child labour, are the oldest items on the ILO's agenda, and in India they are not policy but constitutional prohibition.

Article 51(c) provides that the State shall endeavour to foster respect for international law and treaty obligations in the dealings of organised peoples with one another. It is the general constitutional warrant for taking international obligations seriously.

And article 19(1)(c), the right to form associations or unions, is the constitutional footing of the whole of Chapter III of the Code. Its limits were settled in All India Bank Employees' Association, worked in an earlier chapter: it protects the formation of the union and not the achievement of its objects.

The mechanism, in one diagram of words

Geneva. The Conference adopts a Convention by a two-thirds majority. India's four delegates vote individually; the Indian workers' and employers' delegates have taken public positions.

Within twelve to eighteen months. India must place the Convention before the competent authority, article 19(5)(b), and report what happened, article 19(5)(c).

Domestically. The question is now on the table with two organised Indian constituencies already committed. It goes to the tripartite Indian Labour Conference, which is India's own copy of the ILO's method.

In the Constitution. Whatever Parliament decides in the particular case, the general programme has already been written into Part IV as a standing direction, so the argument for legislating is constitutional and not merely international.

In the statute book. The result appears as an Act, and eventually as a Code.

That is the answer to the exam question, and notice that at no point did the ILO make law for India. It set an agenda, supplied a method, and lent a vocabulary.

A worked example

The facts. Suppose the Conference adopts a Convention requiring that a worker facing dismissal be given a written statement of the ground and an opportunity to answer it. India's Government delegates abstain; India's workers' delegate votes in favour.

Step one. Within one year of the closing of the session, and at the outside eighteen months, the Union Government must bring the Convention before Parliament, because that is where competence over this subject lies, and must inform the Director-General which authority it treated as competent and what that authority did. Article 19(5)(b) and (c). Abstention at Geneva does not excuse it.

Step two. If Parliament declines to legislate, article 19(5)(e) leaves India with no further obligation beyond reporting at appropriate intervals. India is not in breach.

Step three, and this is the part that matters. Even if Parliament does nothing, the subject has been debated, the Indian workers' organisations have a position on record, and the matter goes to the Indian Labour Conference. That is how the Standing Orders Act's own hundred-worker threshold came to be settled before it reached Parliament.

Step four. The domestic argument for acting is not only "we promised at Geneva". It is article 42 of the Constitution, just and humane conditions of work, which is a direction to the Indian State that exists whether or not any Convention was ever adopted.

Now look at where the example lands in the Code. Chapter IV requires an employer to have certified standing orders which, among other matters, define the conditions of service and the disciplinary procedure, and section 38 fixes a time limit for completing disciplinary proceedings together with a liability to pay subsistence allowance while they run. That is the substance of the imagined Convention, arrived at domestically.

What this does NOT mean

It does not mean every Indian labour statute implements an ILO Convention. Many do not, and matching a particular Act to a particular numbered Convention is a claim that has to be checked against India's ratification record before it is made. This book does not make such claims, and a student writing in the exam should describe the mechanism and the constitutional reception rather than asserting numbered pairings they have not verified.

It does not mean a ratified Convention is enforceable in an Indian court. India is dualist. A treaty binds India in international law on ratification, and gives an individual rights in an Indian court only when Parliament has legislated.

It does not mean the Directive Principles are enforceable. They are not. Their force is that they are fundamental in the governance of the country and a duty on the State in making laws, and that courts read ordinary statutes in their light.

It does not mean the influence has been one way. Article 19(3) of the ILO Constitution requires the Conference to have due regard to countries whose climate, imperfect development of industrial organisation or other special circumstances make industrial conditions substantially different, and to suggest modifications for them. India has been one of the principal reasons that clause exists and is used.

Limits and criticism

Ratification lags behind adoption. Placing a Convention before Parliament is compulsory; ratifying it is not, and reporting on a refusal costs nothing.

A large part of the Indian workforce is outside the reach of any of this. The standards, the Codes and the constitutional directions operate mainly on organised industrial employment. The Code itself acknowledges this obliquely: section 23 makes special provision for Trade Unions in what section 2(zp) calls the unorganised sector.

The tripartite method assumes representative organisations. Where the employers' and workers' bodies consulted are not genuinely representative, the tripartite consensus is a consultation between the government and two of its own invitees.

And the Directive Principles have been criticised as a way of postponing. Article 41 is expressly qualified by the words "within the limits of its economic capacity and development", which is an argument for delay written into the direction itself.

Quick revision

• Three channels, and the answer needs all three: the obligation to lay the Convention, the tripartite method, the Constitution's adoption of the aims.
• Article 19(5)(b) of the ILO Constitution: bring every Convention before the competent authority within one year, exceptionally never more than eighteen months, whether or not the government likes it. 19(5)(e): if consent is refused, no further obligation but reporting.
• Jay Engineering Works, AIR 1968 Cal 407: before the First World War there was no industrial legislation in India and the master-and-servant principles governed; the 1919 Washington Conference, in which India participated, raised the consciousness of labour to their own plight.
• The Standing Orders Act 1946's own introduction: the standing-orders idea and its hundred-worker threshold came from a consensus at the tripartite Indian Labour Conference.
• The Code on Wages' Statement of Objects and Reasons: the Second National Commission on Labour, reporting June 2002, recommended amalgamating labour laws into five groups, and the Codes followed that plus tripartite deliberation.
• Constitution of India: article 19(1)(c) form unions; articles 23 and 24 forced labour and child labour, enforceable; Directive Principles 39, 41, 42, 43; and 43A, worker participation in management, inserted by the 42nd Amendment w.e.f. 3 January 1977; article 51(c) respect for treaty obligations.
• India is dualist: a ratified Convention is not by itself Indian law.

Test yourself

1. Discuss, in outline, the influence of the ILO on Indian labour legislation. It operates through three channels rather than through any power to legislate. First, article 19(5)(b) of the ILO Constitution obliges India to bring every Convention adopted by the Conference before its competent law-making authority within one year, or exceptionally not more than eighteen months, and to report to the Director-General what that authority did; the subject is therefore placed on the domestic agenda on an external timetable, in public, and with India's own employers' and workers' delegates already publicly committed by their individual votes at Geneva.

Second, India adopted the Organisation's tripartite method domestically in the Indian Labour Conference; the Industrial Employment (Standing Orders) Act 1946 records in its own introduction that the standing-orders requirement and its hundred-worker threshold came from a consensus reached at that tripartite conference, and the Statement of Objects and Reasons of the Code on Wages 2019 records that the four Codes followed the Second National Commission on Labour of June 2002 together with tripartite deliberation.

Third, the Constitution of India received the Organisation's aims into Part IV, in articles 39, 41, 42, 43 and 43A, and into Part III in articles 23 and 24, so that the case for labour legislation in India is constitutional and not merely international. Judicial notice of the influence was taken in Jay Engineering Works Ltd. v. State of West Bengal, AIR 1968 Cal 407, where the Calcutta High Court recorded that the 1919 Washington Conference, in which India participated, raised the consciousness of labour to their own plight.

2. Does India have to legislate whenever the Conference adopts a Convention? No. It must place the Convention before the competent authority within the article 19(5)(b) time limit and report under 19(5)(c). If the competent authority does not consent, article 19(5)(e) leaves no further obligation except periodic reporting. The obligation is one of process, not of outcome.

3. Which article of the Constitution directs worker participation in management, and when was it inserted? Article 43A, inserted by the Constitution (Forty-second Amendment) Act 1976 with effect from 3 January 1977. It directs the State to take steps, by suitable legislation or in any other way, to secure the participation of workers in the management of undertakings, establishments or other organisations engaged in any industry. Sections 3 and 4 of the Industrial Relations Code, the Works Committee and the Grievance Redressal Committee, are its statutory expression.

4. Distinguish the constitutional provisions on labour that are enforceable from those that are not. Articles 23 and 24 are fundamental rights in Part III and are enforceable: article 23 prohibits traffic in human beings and forced labour, and article 24 prohibits the employment of a child below fourteen in any factory or mine or other hazardous employment. Articles 39, 41, 42, 43 and 43A are Directive Principles in Part IV and are not enforceable by a court; their force is that they are fundamental in the governance of the country, a duty on the State in making laws, and a guide to the interpretation of statutes.

5. Give one documented instance of tripartite consultation producing an Indian statutory rule. The Industrial Employment (Standing Orders) Act 1946 states in its own introduction that discussion at the tripartite Indian Labour Conference revealed a consensus of opinion in favour of standing orders in all industrial establishments employing one hundred or more workers. Both the requirement and its threshold were therefore settled tripartitely before they were enacted.

6. Why is it wrong to answer this question with a list of Indian Acts and their dates? Because the question asks about influence, which is a causal claim, and a list asserts the conclusion without showing the mechanism. The ILO has never legislated for India and cannot. An answer must show how an organisation with no legislative power changed the statute book: by compelling the question to be laid before Parliament on a fixed timetable, by supplying a tripartite method that India copied domestically, and by furnishing aims that the Constitution then adopted as standing directions to the State.

Federation is an organisation whose members are themselves unions rather than individuals.

Executive, defined in section 2(n), means the body, by whatever name called, to which the management of the affairs of a Trade Union is entrusted.

Office-bearer, defined in section 2(zb), includes any member of the executive of a Trade Union, but does not include an auditor.

Registered Trade Union, defined in section 2(zf), means a Trade Union registered under this Code. Note what that tells you: a Trade Union and a registered Trade Union are two different things, and the Code keeps them apart deliberately.

Trade Union dispute, defined in section 2(zm), means any dispute relating to a Trade Union arising between two or more Trade Unions or between the members of a Trade Union inter se. Inter se means among themselves. This is not the same as an "industrial dispute", which is a dispute with the employer and is defined separately in section 2(q).

The definition, broken down

Section 2(zl) has four elements and one extension. A body is a Trade Union if it satisfies the first three and any one of the fourth.

Element one: it is a combination. Nothing more is required. No registration, no writing, no minimum membership. An unregistered group is still a Trade Union; it simply has none of Chapter III's benefits.

Element two: temporary or permanent. The definition says so expressly. A strike committee formed for one dispute and dissolved when it ends is within the definition.

Element three: formed primarily for the purpose. The purpose must be the main one. A cricket club whose members occasionally discuss their wages is not a Trade Union; a body formed to bargain about wages which also runs a cricket team is.

Element four: one of four purposes. This is where the width is, and it is worth setting out as a list because students routinely remember only the first.

• regulating the relations between workers and employers;
• regulating the relations between workers and workers;
• regulating the relations between employers and employers;
• imposing restrictive conditions on the conduct of any trade or business.

The extension: "and includes any federation of two or more Trade Unions." A federation is itself a Trade Union for the purposes of the Code, and section 8(1)(d) accordingly provides its own registration requirement for a federation or central organisation.

The three things students get wrong

A Trade Union need not be permanent. The words "whether temporary or permanent" are in the section. A combination formed for a single dispute qualifies.

A Trade Union need not be of workers. The third purpose is regulating relations "between employers and employers". An employers' association is a Trade Union under this Code, and may be registered as one. This is the single most commonly missed point in the definition, and it is why the Code's other provisions carefully say "Trade Union of workers" whenever they mean only that: section 6(2) and section 6(4), which fix the membership arithmetic, and section 14(2) to (4), which deals with recognition, all use those words.

A Trade Union need not have workers and employers on opposite sides. The second purpose, regulating relations between workers and workers, covers a body whose function is to settle demarcation between groups of workers.

The proviso, and what it actually does

The proviso to section 2(zl) reads:

Provided that the provisions of Chapter III of this Code shall not affect:

(i) any agreement between partners as to their own business; or

(ii) any agreement between an employer and those employed by him as to such employment; or

(iii) any agreement in consideration of the sale of the goodwill of a business or of instruction in any profession, trade or handicraft.

Read the opening words with care, because the proviso is regularly misdescribed. It does not say that these agreements are not Trade Unions. It says that the provisions of Chapter III shall not affect them.

Why the proviso is there. All three are ordinary commercial or employment agreements that contain restrictions on trade, and all three would otherwise be caught by the fourth limb of the definition, "imposing restrictive conditions on the conduct of any trade or business". A partnership deed restricting what the partners may do outside the firm, a contract of employment restricting what the employee may do, and a covenant given by the seller of a business not to compete are all restrictive conditions on the conduct of a trade.

And the reason it matters is section 18. Section 18 provides that an agreement between the members of a registered Trade Union is not void merely because its objects are in restraint of trade. Without the proviso, Chapter III might have been read as rescuing an ordinary non-compete covenant from section 27 of the Indian Contract Act 1872 simply by calling the parties a combination. The proviso stops Chapter III from reaching into ordinary commercial bargains.

The outer edge of the definition: two cases

The definition is wide, but it is not unlimited. Both limits were drawn by the Madras High Court, and both cases are about the same question: can people employed by the State in its governmental capacity register as a trade union?

Rangaswami v. Registrar of Trade Unions, AIR 1962 Mad 231, (1961) 1 LLJ 599.

Facts. Employees of the Madras Raj Bhavan, the Governor's household, formed the Madras Raj Bhavan Workers' Union with the object of securing better service conditions and making collective bargaining possible. On 9 February 1959 seven of them applied to the Registrar of Trade Unions, Madras, for registration under the Trade Unions Act 1926. The members were the domestic and menial staff of the Governor's household. The Registrar refused registration.

Held. The refusal was correct and the petition was dismissed with costs. A trade union under the Act presupposes an employer and employees engaged in the conduct of a trade or business. The Raj Bhavan carries on no trade or industry; its work is part of the household and regal functions of the Governor. Persons so employed are therefore not workmen within the Act, and their combination cannot be registered as a trade union however genuine its objects.

Why it matters. It is the cleanest demonstration that the definition has an outer edge. Students learn that a trade union is "any combination of workers" and stop; this case shows that the combination must be connected with a trade or industry, and that the Registrar may and must refuse where it is not.

Tamil Nad Non-Gazetted Government Officers' Union v. Registrar of Trade Unions, AIR 1962 Mad 234, (1962) 1 LLJ 753, a Division Bench.

Facts. The union was a recognised service association whose membership was open, under rule 7 of its constitution, to all non-gazetted government officers employed under the Government of Madras, other than the executive officers of the Police and Prisons departments and last-grade servants. It applied for registration as a trade union. Registration was refused, a single judge upheld the refusal, and the union appealed.

Held. The appeal was dismissed. The core of the civil services is integrated with the inalienable and regal functions of government, and those activities cannot be an industry, nor can such civil servants be workmen. The Court drew the line expressly: independent corporations that are quasi-government agencies, and subsidised undertakings that are purely industrial in character, stand on a different footing from the administrative machinery of the State itself.

Why it matters. It is the companion to Rangaswami and it states the principle where Rangaswami gave the illustration. It supplies the distinction a student is most often asked to draw: government as sovereign is outside; government as an employer carrying on an industry is inside.

Both cases were decided under the Trade Unions Act 1926, which section 104(1)(a) of the Code repealed on 21 November 2025. They are cited for the boundary they draw, not for the wording of the repealed Act. The same boundary is built into the present law, because section 6 requires the applicants to be workers engaged or employed in the industrial establishment or industry with which the union is connected, and because the Code's own definition of "industry" in section 2(p) turns on the same sovereign-functions distinction. That definition is Module II's topic 2.1 and is worked in the chapter on the conceptual analysis of industry, which is not yet written.

Distinctions

A worked example

The facts. Consider four bodies in Thane.

(a) The Thane Powerloom Workers' Union, four hundred workers across eleven units, formed to negotiate rates. A Trade Union. Its primary purpose is regulating relations between workers and employers, the first limb of section 2(zl).

(b) The Thane Powerloom Owners' Association, thirty owners, formed to agree common rates and common terms of purchase. Also a Trade Union, under the third limb, relations between employers and employers, and under the fourth limb, imposing restrictive conditions on the conduct of a trade. It may apply to be registered under Chapter III, and the phrase "Trade Union of workers" in section 6(2) does not apply to it.

(c) A committee of nine workers formed on Monday to press one demand and dissolved on Friday when it was met. A Trade Union, because the definition covers a combination "whether temporary or permanent". It is not a registered Trade Union, and it has no immunity under sections 16, 17 or 18, which is a serious practical difference.

(d) A partnership deed between two brothers running a dyeing unit, by which each agrees not to carry on a competing business. Not touched by Chapter III at all. It is an agreement between partners as to their own business, and clause (i) of the proviso to section 2(zl) provides that Chapter III shall not affect it. Its validity is decided by the ordinary law of contract, including section 27 of the Indian Contract Act 1872, and section 18 of this Code cannot be used to save it.

Now change (a). Suppose the four hundred are not powerloom workers but the domestic staff of the Raj Bhavan. On Rangaswami the Registrar must refuse, because there is no trade or business with which the combination is connected. Suppose instead they are the clerical staff of a State-owned manufacturing corporation. On Tamil Nad Non-Gazetted Government Officers' Union they are on the other side of the line, because a quasi-government agency or subsidised undertaking that is industrial in character is not the regal machinery of the State.

What this does NOT mean

It does not mean an unregistered combination is unlawful. It is a Trade Union and it may exist and act. What it lacks is registration and everything registration carries.

It does not mean the definition decides who may register. It decides who is a Trade Union. Whether a particular Trade Union may be registered is decided by sections 6 and 7, and those add real conditions: seven or more members subscribing to the rules, the membership arithmetic in section 6(2) and 6(4), and the twelve matters the rules must provide for under section 7.

It does not mean "office-bearer" includes everyone who holds a post. Section 2(zb) includes any member of the executive but excludes an auditor, and that exclusion is examinable.

It does not mean a Trade Union dispute is an industrial dispute. They are separately defined and go to different places. A quarrel between two unions over which of them represents the workers is a Trade Union dispute under section 2(zm), decided by the Tribunal under section 22, and section 22(2) bars every other civil court from entertaining it.

Limits, criticism and amendments

The definition is essentially the 1926 definition, with "workers" put where "workmen" stood and the federation extension carried over. A student who has read older material will find the substance familiar; what must change is the section number, which is now 2(zl) and not section 2(h) of a repealed Act.

The width of the definition is criticised from both directions. Employers say it lets a combination of nine people formed on a Monday claim the name and, once registered, the immunities. Workers say the width is illusory, because everything of value is attached not to being a Trade Union but to being a registered one, and registration is controlled by the arithmetic in section 6.

And the inclusion of employers' associations is criticised as untidy, since almost every operative provision of the Code that follows has to say "Trade Union of workers" to exclude them again.

Quick revision

• Section 2(zl): any combination, temporary or permanent, formed primarily for regulating relations between workers and employers, workers and workers, or employers and employers, or for imposing restrictive conditions on the conduct of any trade or business; includes a federation of two or more Trade Unions.
• Three traps: it may be temporary; it may be of employers; it includes a federation.
• Proviso: Chapter III shall not affect (i) an agreement between partners as to their own business, (ii) an agreement between an employer and those employed by him as to such employment, (iii) an agreement in consideration of the sale of goodwill or of instruction in a profession, trade or handicraft. It is a saving, not a carve-out from the meaning.
• Section 2(zf) registered Trade Union; 2(zm) Trade Union dispute, between unions or members inter se; 2(zb) office-bearer, includes an executive member, excludes an auditor; 2(n) executive.
• Rangaswami, AIR 1962 Mad 231: Raj Bhavan household staff, registration refused, no trade or business.
• Tamil Nad NGO Union, AIR 1962 Mad 234: the core of the civil services performs regal functions and is outside; quasi-government agencies and subsidised industrial undertakings are inside.

Test yourself

1. Define a Trade Union under the Code. Section 2(zl) defines it as any combination, whether temporary or permanent, formed primarily for the purpose of regulating the relations between workers and employers or between workers and workers, or between employers and employers, or for imposing restrictive conditions on the conduct of any trade or business, and includes any federation of two or more Trade Unions.

2. Is an association of mill owners a Trade Union? Give the limb you rely on. Yes. Section 2(zl) includes a combination formed primarily for regulating the relations between employers and employers, and also one formed for imposing restrictive conditions on the conduct of any trade or business. An employers' association satisfies both. It may be registered under Chapter III, though the provisions that speak of a "Trade Union of workers", such as section 6(2) and section 14, do not apply to it.

3. Nine workers form a committee for the duration of one dispute. Is it a Trade Union? Does it have the immunities? It is a Trade Union, because the definition expressly covers a combination whether temporary or permanent. It does not have the immunities. Sections 16, 17 and 18 confer their protection on a registered Trade Union, and this committee is not registered.

4. What does the proviso to section 2(zl) do, and why is it needed? It provides that the provisions of Chapter III shall not affect an agreement between partners as to their own business, an agreement between an employer and those employed by him as to such employment, or an agreement in consideration of the sale of the goodwill of a business or of instruction in a profession, trade or handicraft. It is needed because all three are ordinary agreements containing restrictions on trade which the fourth limb of the definition would otherwise catch, and because section 18 would then have been available to save an ordinary non-compete covenant from section 27 of the Indian Contract Act 1872. It is a saving for those agreements, not a statement that they are not Trade Unions.

5. Can the domestic staff of a Governor's household register a trade union? Give authority. No. In Rangaswami v. Registrar of Trade Unions, AIR 1962 Mad 231, the Madras High Court upheld the Registrar's refusal to register the Madras Raj Bhavan Workers' Union, holding that a trade union presupposes an employer and employees engaged in the conduct of a trade or business, that the Raj Bhavan carries on no trade or industry because its work is part of the household and regal functions of the Governor, and that persons so employed are therefore not workmen. The same boundary operates under the Code, because section 6 requires the members to be workers engaged or employed in the industrial establishment or industry with which the union is connected.

6. Distinguish a Trade Union dispute from an industrial dispute. A Trade Union dispute, section 2(zm), is a dispute relating to a Trade Union arising between two or more Trade Unions or between the members of a Trade Union among themselves, typically about registration, administration, management or the election of office-bearers; it is adjudicated by the Tribunal on an application under section 22, and section 22(2) bars every other civil court. An industrial dispute, section 2(q), is a dispute connected with employment between employers and workers or between those groups among themselves, and it goes to the machinery in Chapters II, VI and VII.

Subscribing their names to the rules means signing the rules as members, which is the act by which the applicants adopt them.

Industrial establishment or undertaking is defined in section 2(r). It is, broadly, the place or unit where the work is carried on.

Unorganised sector, for the purposes of section 23, means any sector which the appropriate Government specifies by notification. The Explanation to section 23(1) says so.

Executive, section 2(n), is the body, by whatever name called, to which the management of the affairs of the union is entrusted.

Honorary or temporary member is a member who is not a worker in the establishment or industry concerned. Section 7(e) contemplates them, and section 21 controls how many of them may be office-bearers.

Section 5: who registers, and where

Section 5(1) provides that the State Government may, by notification, appoint a person to be the Registrar of Trade Unions for the State. Registration is therefore administered at State level, not centrally.

Two consequences follow and both appear later in this Module.

Communications go to the head office as entered in the register. Section 11(1) requires all communications and notices to a registered Trade Union to be sent, in the prescribed manner, to the address of the head office as entered in the Registrar's register. Keeping that address current is the union's responsibility under section 11(3).

Where a union crosses State lines the Registrars have to talk to each other. Section 24(3) requires notice of a change of name or of an amalgamation to be sent to the Registrar, and where the head office of the amalgamated union is in a different State, to the Registrar of that State as well; section 24(6) then makes the Registrar of the State in which the amalgamated union's head office is situated the one who registers the amalgamation.

Section 6: the criteria, and the arithmetic that carries the marks

This section has four sub-sections and they do four different jobs. Take them in order.

Section 6(1): who may apply

Any seven or more members of a Trade Union may, by subscribing their names to the rules of the Trade Union and by otherwise complying with the provisions of this Code with respect to registration, apply for registration of the Trade Union under this Code.

Seven is the number of applicants, not the size of the union. The sub-section is about who signs the application. It says nothing about whether the union will be registered.

Section 6(2): the membership test, and this is the one that is examined

No Trade Union of workers shall be registered unless at least ten per cent. of the workers or one hundred workers, whichever is less, engaged or employed in the industrial establishment or industry with which it is connected are the members of such Trade Union on the date of making of the application for registration.

Four features, and each of them is a mark.

"Whichever is less" and not "whichever is more". The test is satisfied by the smaller of the two figures. That is favourable to unions in large establishments, and students reverse it constantly. Work it through:

The requirement is capped at one hundred. Once an establishment has a thousand workers, the number needed never rises again. A union in a factory of eight thousand needs the same hundred members as a union in a factory of a thousand.

"On the date of making of the application". The test is applied at a fixed moment. What happened before or after does not decide it, subject to sub-section (3).

It applies to a "Trade Union of workers" only. An employers' association, which is a Trade Union under section 2(zl), is outside sub-section (2) altogether.

Section 6(3): applicants who fall away

Where an application has been made under sub-section (1) for registration of a Trade Union, such application shall not be deemed to have become invalid merely by reason of the fact that, at any time after the date of the application but before the registration of the Trade Union, some of the applicants, but not exceeding half of the total number of persons who made the application, have ceased to be members of the Trade Union or have given notice in writing to the Registrar dissociating themselves from the application.

This sub-section exists because of a specific abuse. An employer who learns that seven of his workers have applied to register a union has an obvious response: persuade some of them to withdraw, and the application collapses. Sub-section (3) draws a line: losing applicants does not invalidate the application so long as not more than half of them go.

Note the two ways an applicant can fall away, because the sub-section covers both: ceasing to be a member, and giving the Registrar written notice dissociating from the application.

And note the limit. More than half, and the protection is gone.

Section 6(4): the union must keep its numbers up

A registered Trade Union of workers shall at all times continue to have not less than ten per cent. of the workers or one hundred workers, whichever is less, subject to a minimum of seven, engaged or employed in an industrial establishment or industry with which it is connected, as its members.

This is a continuing obligation, not a one-off test, and the words "at all times" are what make it so.

The floor of seven is new information and it belongs in the arithmetic. Take a very small establishment of twenty workers. Ten per cent. is two, and two is less than a hundred, so section 6(2) would be satisfied by two members. Section 6(4) then says that a registered union must never fall below seven. So in small establishments the effective figure is seven, and in establishments above seventy it is ten per cent. until the cap of one hundred bites.

Two other sections attach to this duty. Section 11(2) requires the Trade Union itself to inform the Registrar if its membership falls below the figure. Section 9(5)(iii) allows the Registrar to cancel the certificate of registration if he is satisfied that it has. So the union must report the very fact that can cost it its registration.

Section 7: the twelve matters the rules must provide for

Section 7 opens by requiring two things together: the executive must be constituted in accordance with the Code, and the rules must provide for the listed matters. Both are conditions of entitlement to registration.

The twelve matters are:

• (a) the name of the Trade Union;
• (b) the whole of the objects for which it has been established;
• (c) the whole of the purposes for which its general funds shall be applicable, all of which must be purposes to which such funds are lawfully applicable under the Code;
• (d) the maintenance of a list of members and adequate facilities for its inspection by the office-bearers and members;
• (e) the admission of ordinary members, irrespective of their craft or category, who shall be persons actually engaged or employed in the industrial establishment, undertaking or industry, or units, branches or offices of an industrial establishment, with which the union is connected, and also the admission of such number of honorary or temporary members, who are not such workers, as are not permitted under section 21 to be office-bearers to form the executive;
• (f) the payment of a subscription by members, from such members and others, as may be prescribed;
• (g) the conditions under which a member is entitled to a benefit assured by the rules, and under which a fine or forfeiture may be imposed on a member;
• (h) the annual general body meeting, the business to be transacted at it, including the election of office-bearers;
• (i) the manner in which the members of the executive and the other office-bearers shall be elected once in a period of every three years and removed, and the filling of casual vacancies;
• (j) the safe custody of the funds, an annual audit in the prescribed manner, and adequate facilities for inspection of the account books by office-bearers and members;
• (k) the manner in which the rules shall be amended, varied or rescinded;
• (l) the manner in which the Trade Union may be dissolved.

Read the list for its theme and it becomes easy to remember. Clauses (a) and (b) are identity. Clauses (c), (f), (g) and (j) are money. Clauses (d), (e), (h) and (i) are membership and internal democracy. Clauses (k) and (l) are the union's own end.

Clause (i) deserves separate attention because it fixes a period: office-bearers must be elected once in every three years. That is a check on office-bearers entrenching themselves, and it pairs with section 14(6), which makes a recognition or a negotiating council valid for three years in the first instance.

Clause (c) is drawn narrowly on purpose. The rules must state the whole of the purposes for which the general funds are applicable, and every one of them must be a purpose to which the funds are lawfully applicable under the Code. Section 15(1) then provides that the general funds shall not be spent on any objects other than such objects as may be prescribed. The rules cannot enlarge what the Code permits.

The case on clause (e), and it decides a question students get backwards

Bokajan Cement Corporation Employees' Union v. Cement Corporation of India Ltd., AIR 2004 SC 245, (2004) 1 SCC 142, Sabharwal and Agrawal JJ.

Facts. The short question was whether an employee, as a result of the cessation of his employment, loses the right to continue as a member of the trade union. The High Court, reversing a single judge, had held that he does. It relied on section 6(e) of the Trade Unions Act 1926, the predecessor of what is now section 7(e), which requires a union's rules to provide for the admission of ordinary members who are persons actually engaged or employed in the industry with which the union is connected, and on clause 5 of the union's own constitution, which made any worker employed by the company eligible for membership. Clause 9 of that constitution dealt with cessation of membership and listed non-payment of subscription for three months, death and withdrawal, but not the ending of employment. The union appealed.

Held. The appeal was allowed, the High Court's judgment set aside and the single judge's restored. Section 6(e) provides for the admission of members, not for the cessation of membership. There was no provision in the Act for automatic cessation of membership on cessation of employment, and none in the union's own constitution either. In the absence of any such provision, a member does not cease to be a member merely because he ceases to be employed.

Why it matters. It answers a question most students assume has the opposite answer, and it teaches the habit that matters more than the answer: read the statute, then read the union's own rules, because between them they decide the point. It also explains something practical, that a retrenched or dismissed worker can go on being represented by his union in the very proceedings about his dismissal, which would be impossible if his membership ended with his employment.

It was decided under the Trade Unions Act 1926, repealed by section 104(1)(a) on 21 November 2025. The reasoning applies unchanged, because section 7 of the Code is drawn the same way: it lists what the rules must contain, clause (e) is about admission, and the Code says nothing about automatic cessation. What the Code adds, and the 1926 Act did not have, is the membership arithmetic in section 6, which the case does not touch. There is also an express aid in the Code pointing the same way: the Explanation to section 23(2) provides that an employee who has retired or has been retrenched shall not be construed as an outsider for the purpose of holding office in a Trade Union.

And the outer edge of who may be a member at all is the subject of the two Madras cases worked in the previous chapter. Rangaswami v. Registrar of Trade Unions, AIR 1962 Mad 231 and Tamil Nad Non-Gazetted Government Officers' Union v. Registrar of Trade Unions, AIR 1962 Mad 234 both turn on the same point that section 6(2) now makes explicit: the members must be workers engaged or employed in an industrial establishment or industry, so a combination of the Governor's household staff, or of the core civil service performing regal functions, cannot be registered.

A worked example

The facts. Meera works at a packaging unit in Wada employing 640 workers. She and eight colleagues draw up rules, sign them, and apply to the Registrar. On the date of the application the union has 61 members.

Is the application competent? Yes. Section 6(1) requires seven or more members to subscribe their names to the rules and apply. Nine did.

Does the union satisfy the membership test? Yes, but only just. Ten per cent. of 640 is 64; one hundred is 100; whichever is less is 64. The union had 61 on the date of the application, so it is four short and section 6(2) is not satisfied. The Registrar must refuse.

Change the facts: the union had 66 members on the date of the application. Section 6(2) is satisfied, because 66 exceeds 64, and the test is applied on the date of the application.

Now, after the application and before registration, three of the nine applicants resign from the union and a fourth writes to the Registrar dissociating himself. Four of nine have fallen away. Section 6(3) protects the application so long as the number who cease to be members or dissociate does not exceed half of the total who applied. Half of nine is four and a half, so four is within the protection: the application is not invalid.

Change that too: six of the nine fall away. Six exceeds half of nine, and the protection in section 6(3) is lost.

A year after registration the unit sheds workers and the union's membership drops to 45 while the workforce falls to 520. Ten per cent. of 520 is 52; the requirement is 52; the union has 45. Section 6(4) is breached, and two things follow: section 11(2) requires the union itself to inform the Registrar, and section 9(5)(iii) permits the Registrar to cancel the registration on being satisfied that membership has fallen below the figure. He must give not less than sixty days' previous notice in writing specifying the grounds, under the proviso to section 9(5), and the union may appeal to the Tribunal under section 10.

Finally, the union's rules say that a member ceases to be a member on ceasing to be employed, and it uses that rule to expel a retrenched worker. Here the rule is the union's own, and Bokajan does not save the worker: the Supreme Court's reasoning was that there was no such provision in the Act or in the union's constitution. Where the constitution does provide for it, the position is different. Advise the union, however, that the Explanation to section 23(2) treats a retired or retrenched employee as not an outsider for the purpose of holding office, which sits awkwardly with a rule expelling him from membership.

What this does NOT mean

It does not mean seven members are enough to be registered. Section 6(1) is about who may apply. Section 6(2) is the test for registration, and in an establishment of 640 workers it requires 64 members, not seven.

It does not mean the ten per cent. is calculated on the union's own membership. It is ten per cent. of the workers engaged or employed in the industrial establishment or industry with which the union is connected.

It does not mean an employers' association must satisfy section 6(2). That sub-section applies to a "Trade Union of workers".

It does not mean membership ends with employment. On Bokajan it does not, unless the union's own rules so provide.

It does not mean the Registrar may impose conditions of his own. His function under section 9(1) is to register on being satisfied that the union has complied with the requirements of Chapter III. What he may do if he is not satisfied is call for further information under section 8(3) and refuse until it is furnished.

Limits, criticism and amendments

The membership threshold is the most criticised provision in the Chapter, and from both sides. Employers argue that ten per cent. is too low in a large factory, where a hundred members out of eight thousand can register and claim the immunities. Unions argue that in a workforce that can be dismissed, requiring ten per cent. to declare themselves on the date of the application exposes exactly those workers to identification and pressure, and that section 6(3) protects the application but not the applicants.

The continuing obligation in section 6(4) is a real change from the 1926 Act and it makes registration conditional rather than permanent. Combined with the union's own duty to report a fall under section 11(2), it puts the union in the position of having to disclose the fact that may end it.

Section 7's three-year election requirement is a genuine democratic advance over a regime in which office-bearers could continue indefinitely, and it is one of the few provisions in the Chapter that regulates the union's internal life for the benefit of its own members.

Quick revision

• Section 5: the State Government appoints the Registrar of Trade Unions by notification.
• Section 6(1): seven or more members may subscribe their names to the rules and apply.
• Section 6(2): no Trade Union of workers shall be registered unless ten per cent. of the workers or one hundred, whichever is LESS, engaged in the establishment or industry are members on the date of the application.
• Section 6(3): the application does not become invalid if applicants fall away, so long as not more than half of them cease to be members or dissociate in writing.
• Section 6(4): a registered union must at all times keep that number, subject to a minimum of seven. Section 11(2) makes the union report a fall; section 9(5)(iii) lets the Registrar cancel for it.
• Section 7: twelve matters the rules must provide for. Identity (a, b); money (c, f, g, j); membership and democracy (d, e, h, i); the union's own end (k, l). Office-bearers elected once every three years, clause (i).
• Bokajan, AIR 2004 SC 245: clause (e) governs admission, not cessation; membership does not end automatically when employment ends, absent a provision in the Act or in the union's own rules. Appeal allowed.

Test yourself

1. A factory employs 900 workers. How many members must a union have to be registered, and how many to stay registered? Ten per cent. of 900 is 90; one hundred is 100; whichever is less is 90. So section 6(2) requires 90 members on the date of the application. Section 6(4) requires the union to continue at all times to have that same figure, subject to a minimum of seven, so 90 again unless the workforce changes.

2. A workshop employs 30 workers. How many members must its union have to stay registered? Ten per cent. of 30 is 3, which is less than 100, so section 6(2) would be satisfied by 3 members on the date of the application. But section 6(4) requires a registered union to have that number subject to a minimum of seven, so it must keep at least seven.

3. Eleven members apply for registration. Before the union is registered, five of them write to the Registrar dissociating themselves. Is the application invalid? No. Section 6(3) provides that the application shall not be deemed to have become invalid merely because some of the applicants, not exceeding half of the total who applied, have ceased to be members or have given written notice to the Registrar dissociating themselves. Half of eleven is five and a half, so five is within the protection.

4. State the twelve matters section 7 requires the rules to provide for, in groups. Identity: the name of the union, and the whole of the objects for which it is established. Money: the whole of the purposes for which the general funds are applicable, all being purposes lawfully applicable under the Code; the payment of subscriptions; the conditions of benefits, fines and forfeitures; and the safe custody of funds, an annual audit and facilities for inspecting the account books. Membership and internal democracy: maintaining a list of members with facilities for inspection; the admission of ordinary members actually engaged or employed in the establishment or industry, irrespective of craft or category, and of honorary or temporary members; the annual general body meeting and its business including the election of office-bearers; and the manner in which the executive and other office-bearers are elected once in every three years, removed, and casual vacancies filled. The union's own end: the manner of amending the rules, and the manner of dissolution.

5. Does a worker lose his union membership when he is dismissed? Give the authority and the reasoning. Not automatically. In Bokajan Cement Corporation Employees' Union v. Cement Corporation of India Ltd., AIR 2004 SC 245, the Supreme Court allowed the union's appeal and held that the provision requiring the rules to provide for the admission of ordinary members who are persons actually engaged or employed in the industry deals with admission, not cessation; that there was no provision in the Act for automatic cessation of membership on cessation of employment; and that there was none in the union's own constitution, whose clause on cessation listed other grounds. In the absence of any such provision the member continues. The Code is drawn the same way, and the Explanation to section 23(2) reinforces the point by providing that a retired or retrenched employee is not to be construed as an outsider for the purpose of holding office.

6. Why does section 6(3) exist, and what abuse does it answer? Because an employer who learns that his workers have applied to register a union has an obvious counter, which is to induce enough of the applicants to withdraw so that the application collapses. Section 6(3) provides that the application is not invalidated by applicants ceasing to be members or dissociating in writing, so long as the number who do so does not exceed half of the total who applied. It protects the application; it does not protect the applicants from being identified, which is the criticism made of section 6(2)'s requirement that the membership be shown on the date of the application.

Deemed means treated as, by force of the statute, whether or not it is so in fact. Section 9(4) uses it for unions registered under the repealed Act.

Section 8: what the application must contain

Section 8(1) requires every application for registration to be made to the Registrar electronically or otherwise, and to be accompanied by four things:

• (a) a declaration by affidavit in the prescribed form and manner;
• (b) a copy of the rules of the Trade Union, together with a copy of the resolution by the members adopting those rules;
• (c) a copy of the resolution authorising the applicants to make the application;
• (d) where the Trade Union is a federation or a central organisation of Trade Unions, a copy of the resolution adopted by the members of each of the member Trade Unions, meeting separately, agreeing to constitute the federation or central organisation.

The Explanation to clause (d) puts the same point beyond doubt: for the purposes of that clause, a resolution adopted by the members of the Trade Union means, in the case of a federation or central organisation, the resolution adopted by the members of each of the member Trade Unions meeting separately.

The words "meeting separately" are doing real work. A federation cannot be created by a joint meeting at which delegates from several unions vote together. Each constituent union must decide, in its own meeting, that it agrees to join. That protects the internal democracy of each union against being carried into a federation by a bloc vote.

Section 8(2): unions older than a year. Where the Trade Union has been in existence for more than one year before the application is made, a general statement of the assets and liabilities, in the prescribed form and containing the prescribed particulars, must be delivered to the Registrar with the application.

Why that requirement exists. A body that has been operating for a year has collected money and may owe money. Registration will turn it into a body corporate under section 12, and the members and the Registrar are entitled to know what the corporate body is inheriting.

Section 8(3): the Registrar may ask for more. He may call for further information for the purpose of satisfying himself that the application complies with the Code and that the Trade Union is entitled to registration, and may refuse to register the Trade Union until such information is furnished.

Read the words of that refusal carefully. It is a refusal until the information is furnished. It is a suspension of the process, not a rejection on the merits, and the union cures it by answering.

Section 8(4): deceptive names. If the proposed name is identical with that of an existing registered Trade Union, or in the Registrar's opinion so nearly resembles the name of an existing Trade Union that it is likely to deceive the public or the members of either Trade Union, the Registrar shall require the applicants to alter the name, and shall refuse to register until the alteration has been made.

Three features are examinable. The test has two limbs, identical or nearly resembling. The mischief is deception of the public or the members of either union, so it protects the existing union's members and the incoming union's members alike. And the Registrar's duty is mandatory: the section says "shall", twice.

The same test reappears in section 24(4) for a change of name, where the Registrar shall refuse to register the change on the same ground.

Section 9: registration, the certificate, and cancellation

Section 9(1) and (2): the duty to register, and the certificate

Section 9(1) provides that the Registrar shall, on being satisfied that the Trade Union has complied with all the requirements of Chapter III in regard to registration, register the Trade Union by entering the particulars in a register maintained in the prescribed form.

The duty is mandatory once he is satisfied. He has no residual discretion to refuse a union that meets the requirements because he thinks it undesirable.

Section 9(2): where the Registrar makes an order for registration he shall issue a certificate of registration in the prescribed form, which shall be the conclusive evidence that the Trade Union has been registered under this Code.

Section 9(3) requires him then to enter the name and other particulars in a register maintained in that behalf in the prescribed form.

Section 9(4): the transitional provision

Every Trade Union registered under the Trade Unions Act 1926 and having valid registration immediately before the commencement of this Code shall be deemed to have been registered under this Code.

The proviso attaches a condition. Such a union shall file with the Registrar a statement that the constitution of its executive is in accordance with this Code, along with its rules updated in accordance with section 7, and the Registrar shall amend his records accordingly.

So an existing union does not re-apply. It updates. This is the provision that answers the question every union in India had to ask on 21 November 2025, and it is worked as part of the example in [The Code, and the Day the Law Changed].

Section 9(5): the three grounds of cancellation

The certificate may be withdrawn or cancelled by the Registrar:

• (i) on the application of the Trade Union, verified in the prescribed manner; or
• (ii) on information received by him regarding the contravention by the Trade Union of the provisions of the Code, or the rules made under it, or its constitution or rules; or
• (iii) if he is satisfied that the members in a Trade Union falls below ten per cent. of the total workers or one hundred workers, whichever is less.

Ground (ii) is wider than it first looks, because it covers contravention of the union's own constitution or rules, not only of the Code. A union that has not held the election that section 7(i) requires its rules to provide for is in breach of its own rules, and that is a ground.

Ground (iii) is the enforcement end of section 6(4), the continuing membership obligation. Note that it uses the section 6(2) figure and does not repeat the floor of seven.

The proviso: sixty days, in writing, with the grounds

Provided that not less than sixty days previous notice in writing specifying the grounds on which it is proposed to cancel the certificate of registration of a Trade Union shall be given by the Registrar to the Trade Union before the certificate of registration is cancelled otherwise than on the application of the Trade Union.

Four elements, and each is a mark. The notice must be not less than sixty days; it must be previous, that is before cancellation; it must be in writing; and it must specify the grounds. The only case in which no notice is required is a cancellation on the union's own application, which is ground (i).

Section 9(6): the Registrar shall cancel the certificate where a Tribunal has made an order for cancellation of the registration. Here he has no discretion at all; he is executing an order.

Section 9(7): while cancelling, the Registrar shall record the reasons for doing so and communicate the same in writing to the Trade Union concerned.

Sub-sections (5) and (7) together are what makes an appeal possible. A union that has been told the grounds in advance and given the reasons afterwards has something to appeal against.

Section 10: the appeal to the Tribunal

Section 10(1): any person aggrieved by the refusal of the Registrar to grant registration under section 9, or by the cancellation of a certificate under section 9(5), may within such period as may be prescribed prefer an appeal to the Tribunal.

The proviso allows the Tribunal to entertain an appeal after the prescribed period if the appellant satisfies it that the delay was caused by sufficient reason or unavoidable circumstances.

Section 10(2): the Tribunal may, after giving the parties concerned an opportunity of being heard, either dismiss the appeal, or pass an order directing the Registrar to register the Trade Union and issue a certificate, or set aside the order of cancellation; and it shall forward a copy of its order to the Registrar.

Notice where the appeal goes. Under the repealed Trade Unions Act 1926 an appeal lay to a civil court or a High Court depending on the place. Under the Code it lies to the Industrial Tribunal constituted under section 44, which is defined as "Tribunal" by section 2(zn). The subject has been taken out of the ordinary courts and given to the specialist forum, which is consistent with section 22(2) barring civil courts from Trade Union disputes and with section 97 barring their jurisdiction generally.

Rangaswami v. Registrar of Trade Unions, AIR 1962 Mad 231 is the illustration of a refusal being tested on appeal, and its facts are worked in [What a Trade Union Is: The Definition]. In short: the Registrar refused to register the Madras Raj Bhavan Workers' Union; the members brought a petition under section 11 of the Trade Unions Act 1926, the appeal provision of that Act; and the Madras High Court dismissed it with costs, holding that a trade union presupposes an employer and employees engaged in a trade or business and that the Raj Bhavan carries on no trade or industry. The case shows both that a refusal is challengeable and that the challenge fails where the union is outside the Act. Under the Code the same challenge would go to the Tribunal under section 10 rather than to the High Court.

Section 11: staying on the register

Section 11(1): all communications and notices to a registered Trade Union shall be sent, in the prescribed manner, to the address of the head office of the union as entered in the register maintained by the Registrar.

That is a rule with teeth. Service at the registered address is good service. A union that has moved and not told the Registrar can be validly served at an address it has left.

Section 11(2): the Trade Union shall inform the Registrar if its members fall below ten per cent. of the total workers or one hundred workers, whichever is less.

Section 11(3): the Trade Union shall inform the Registrar of any change in the particulars given in its application for registration and in its constitution or rules, in the prescribed manner.

Sub-section (2) is the uncomfortable one, and it is worth saying plainly why: it obliges the union to report the very fact that is a ground of cancellation under section 9(5)(iii). A union that fails to report is additionally in contravention of the Code, which is itself a ground under section 9(5)(ii).

A worked example

The facts. The Wada Packaging Workers' Union, eight applicants, applies electronically on 4 March. It encloses an affidavit in the prescribed form, a copy of its rules with the resolution adopting them, and a resolution authorising the eight to apply. The union has existed since January of the previous year. Its proposed name is "Wada Packaging Karmachari Sangh", and a registered union at a neighbouring unit is already called "Wada Packaging Kamgar Sangh".

Is the application complete? Not quite. The union has been in existence for more than one year before the application, so section 8(2) required a general statement of assets and liabilities to be delivered with it. The Registrar may call for it under section 8(3) and refuse to register until it is furnished.

The name. Under section 8(4) the Registrar must consider whether the proposed name so nearly resembles the existing one that it is likely to deceive the public or the members of either union. If he forms that opinion, he shall require an alteration and shall refuse to register until it is made. His duty is mandatory, and the union's remedy if it disagrees is the appeal under section 10.

The union alters the name and files the statement. The Registrar is satisfied. Under section 9(1) he shall register it; under section 9(2) he shall issue a certificate, which is conclusive evidence of registration; under section 9(3) he enters the particulars.

Eighteen months later the union has held no election. Its own rules, as section 7(i) requires, provide for the election of office-bearers once in every three years, so no breach has yet occurred. Suppose instead four years pass with no election. The union is now contravening its own rules, which is a ground under section 9(5)(ii).

The Registrar proposes to cancel. He must give not less than sixty days' previous notice in writing specifying the grounds, under the proviso to section 9(5). If he cancels, he must record his reasons and communicate them in writing to the union, under section 9(7).

The union wants to challenge the cancellation. It appeals to the Tribunal under section 10(1), within the prescribed period; if it is late, the proviso allows the Tribunal to entertain the appeal on being satisfied that the delay was caused by sufficient reason or unavoidable circumstances. Under section 10(2) the Tribunal, after hearing the parties, may dismiss the appeal or set aside the cancellation, and forwards a copy of its order to the Registrar.

Suppose instead the Tribunal itself orders the registration cancelled in some other proceeding. Section 9(6) then requires the Registrar to cancel: he has no discretion and the sixty-day notice has no application, because he is executing an order and not forming an opinion.

What this does NOT mean

It does not mean the Registrar may refuse registration on his own view of the merits. Section 9(1) obliges him to register once satisfied that Chapter III's requirements are met. His powers to refuse are the specific ones: until further information is furnished, section 8(3), and until a deceptive name is altered, section 8(4).

It does not mean the certificate proves the union is properly constituted. It is conclusive evidence that the union has been registered, no more. Whether the union is now complying with the Code is a separate question, and section 9(5) exists precisely because a registered union may stop complying.

It does not mean sixty days' notice is required for every cancellation. The proviso excepts a cancellation on the union's own application under ground (i), and section 9(6) cancellation on a Tribunal's order is the execution of an order rather than the Registrar's own decision.

It does not mean an existing union had to re-register in November 2025. Section 9(4) deems it registered, subject to filing the statement and the updated rules.

It does not mean an appeal lies to a civil court. It lies to the Tribunal under section 10, and section 22(2) and section 97 keep civil courts out of this territory generally.

Limits, criticism and amendments

The whole procedure is now electronic-capable, section 8(1) saying "electronically or otherwise", which is a modernisation over the repealed Act.

The appeal has been moved from the courts to the Tribunal. That is defensible, since the Tribunal is the specialist forum, but it depends on Tribunals actually being constituted and functional, which is why section 104(1A), inserted by Act 1 of 2026, had to keep the old forums working in the meantime.

The prescribed period for an appeal is not in the Code. Section 10(1) leaves it to the rules, so a student cannot state a number, and should say so rather than inventing one.

And the duty in section 11(2) is criticised as self-incriminating. A union whose membership has fallen must report the fact, and the fact reported is a ground for cancelling its registration.

Quick revision

• Section 8(1): application to the Registrar, electronically or otherwise, with an affidavit, the rules plus the resolution adopting them, the resolution authorising the applicants, and for a federation or central organisation a resolution of each member union meeting separately.
• Section 8(2): union in existence more than one year, add a statement of assets and liabilities.
• Section 8(3): Registrar may call for further information and refuse until it is furnished. Section 8(4): identical or deceptively similar name, he shall require alteration and shall refuse until made.
• Section 9(1): on being satisfied he shall register. 9(2): certificate is conclusive evidence of registration. 9(3): enter in the register.
• Section 9(4): unions registered under the 1926 Act are deemed registered, on filing a statement that the executive accords with the Code and rules updated to section 7.
• Section 9(5): cancellation on (i) the union's own application; (ii) contravention of the Code, the rules, or the union's own constitution or rules; (iii) membership falling below the section 6(2) figure. Proviso: not less than sixty days' previous notice in writing specifying the grounds, except on the union's own application.
• Section 9(6): cancel where the Tribunal so orders. 9(7): record reasons and communicate them in writing.
• Section 10: appeal to the Tribunal, within the prescribed period, with a proviso for sufficient reason or unavoidable circumstances; the Tribunal may dismiss, direct registration, or set aside cancellation, after hearing the parties.
• Section 11: notices go to the head office as entered in the register; the union must report a fall in membership and any change in its particulars, constitution or rules.

Test yourself

1. What must accompany an application for registration? Under section 8(1), a declaration by affidavit in the prescribed form; a copy of the rules together with a copy of the resolution of the members adopting them; a copy of the resolution authorising the applicants to apply; and, where the union is a federation or central organisation of Trade Unions, a copy of the resolution adopted by the members of each member union meeting separately. Under section 8(2), where the union has been in existence for more than one year, a general statement of its assets and liabilities as well.

2. Why does section 8(1)(d) insist that the member unions meet separately? Because a federation must be constituted by the decision of each constituent union taken in its own meeting, not by a joint meeting at which delegates vote together. The requirement protects the internal democracy of each union against being carried into a federation by a bloc vote, and the Explanation to the clause puts it beyond doubt.

3. What is the legal effect of a certificate of registration? Section 9(2) makes it conclusive evidence that the Trade Union has been registered under the Code. That means no proceeding may go behind it to dispute the fact of registration. It does not certify continuing compliance, which is why section 9(5) provides for cancellation.

4. On what grounds, and with what procedure, may a certificate be cancelled? Section 9(5) gives three grounds: the union's own verified application; information of a contravention by the union of the Code, the rules made under it, or its own constitution or rules; and the Registrar's satisfaction that membership has fallen below ten per cent. of the total workers or one hundred, whichever is less. Except where the union itself applied, the proviso requires not less than sixty days' previous notice in writing specifying the grounds. On cancelling, section 9(7) requires the Registrar to record his reasons and communicate them in writing. Section 9(6) separately obliges him to cancel where a Tribunal has so ordered.

5. A Registrar refuses registration. What is the remedy, and to whom does it lie? An appeal under section 10(1) to the Tribunal, that is to the Industrial Tribunal constituted under section 44, by any person aggrieved, within the prescribed period; the proviso allows the Tribunal to entertain a late appeal where the delay was caused by sufficient reason or unavoidable circumstances. Under section 10(2), after giving the parties an opportunity of being heard, the Tribunal may dismiss the appeal or direct the Registrar to register the union and issue a certificate, and forwards a copy of its order to the Registrar. The illustration is Rangaswami v. Registrar of Trade Unions, AIR 1962 Mad 231, where the refusal was challenged and upheld, though under the repealed Act that challenge lay to the High Court.

6. A registered union's membership falls below the required figure. What must it do, and what may follow? Section 11(2) requires the union itself to inform the Registrar. The fall is a ground of cancellation under section 9(5)(iii), and a failure to report is a contravention of the Code and therefore a further ground under section 9(5)(ii). Before cancelling on either ground the Registrar must give not less than sixty days' previous notice in writing specifying the grounds, and on cancelling must record and communicate his reasons; the union may appeal to the Tribunal under section 10.

Common seal is the corporate body's formal signature, historically an actual seal pressed into wax.

Movable and immovable property: immovable property is land and things attached to the earth; movable property is everything else.

Office-bearer, section 2(zb), includes any member of the executive but does not include an auditor.

Moral turpitude is conduct that is inherently base or depraved, as distinct from an offence that is merely technical or regulatory.

Office of profit is a position under the Union or a State carrying remuneration.

Casual vacancy is a vacancy arising between elections, for instance on a death or resignation.

Section 12: what the union becomes

Every registered Trade Union shall be a body corporate by the name under which it is registered, and shall have perpetual succession and a common seal with power to acquire and hold both movable and immovable property and to contract, and shall by the said name sue and be sued.

Six attributes are packed into that sentence, and it is worth taking them one at a time because an exam answer that lists them scores.

Two consequences deserve to be spelt out, because they are what a problem question turns on.

The funds are the union's, not the members'. A member who resigns takes nothing with him. That is why section 25(2) has to provide expressly for what happens to the funds on dissolution: if the rules do not provide for their distribution, the Registrar divides them among the members in the prescribed manner. Without perpetual succession that provision would be unnecessary; with it, it is indispensable.

Suing in its own name protects the officers. Where a union is sued for an act done in furtherance of an industrial dispute, section 16(1) protects the union and its office-bearers and members. But even without immunity, incorporation means the plaintiff's judgment is against the union's assets rather than against the secretary's house.

Section 13: the four Acts that do not apply

The provisions of the following Acts, namely:

(a) the Societies Registration Act, 1860 (21 of 1860);

(b) the Co-operative Societies Act, 1912 (2 of 1912);

(c) the Multi-State Co-operative Societies Act, 2002 (39 of 2002);

(d) the Companies Act, 2013 (18 of 2013); and

(e) any other corresponding law relating to co-operative societies for the time being in force in any State,

shall not apply to any registered Trade Union and the registration of any such Trade Union under any of the aforementioned Acts shall be void.

The section has two limbs and the second is the sharp one. The first says those Acts do not apply. The second says that registration of a registered Trade Union under any of them shall be void.

Why Parliament bothered. Every one of those statutes is a general law for associations of persons, and a trade union answers each of their descriptions well enough to be arguable. A union is a society of persons associated for a common object; it collects subscriptions and pays benefits like a co-operative; and it is an association of more than a handful of persons carrying on an activity, which brought the older company law's provisions about unregistered associations into view.

If a union could be registered under one of those Acts, the whole of Chapter III could be circumvented in either direction. An employer-sponsored body could take the form of a society and claim to be the workers' organisation without meeting the section 6 membership test. Conversely a genuine union could be dragged into company or co-operative regulation designed for quite different bodies.

Section 13 therefore makes the Code the exclusive route. A registered Trade Union is a body corporate under section 12, not under the Companies Act, and it is governed by this Code alone.

Sections 19 and 20: the rights of members

Section 19: the right to inspect. The books of account of a registered Trade Union and the list of members shall be open to inspection by an office-bearer or member of the union at such times as may be provided for in the rules.

Two limits are built in. The right is given to office-bearers and members, not to the public or the employer. And it is exercisable "at such times as may be provided for in the rules", which is why section 7(d) requires the rules to provide for the list of members and adequate facilities for the inspection thereof, and section 7(j) requires them to provide adequate facilities for inspection of the account books. The Code confers the right; the rules make it workable.

Section 20: minors. Any person who has attained the age of fourteen years and is employed in a non-hazardous industry may be a member of a registered Trade Union, subject to any rules of the union, and may, subject as aforesaid, enjoy all the rights of a member and execute all instruments and give all acquittances necessary to be executed or given under the rules.

Read the conditions, because there are three. The person must be at least fourteen; the industry must be non-hazardous; and membership remains subject to the union's own rules, which may set a higher age.

And read the consequence, which is the point of the section. A minor member is not a second-class member. He enjoys all the rights of a member, and he has the capacity to execute the instruments and give the receipts that membership requires, notwithstanding the ordinary law about a minor's contractual capacity. Without the section, a fourteen-year-old member could not validly give a receipt for a benefit paid to him.

This section must be read with Article 24 of the Constitution, which prohibits the employment of a child below fourteen years in any factory or mine or in any other hazardous employment. Section 20's two conditions, fourteen years and a non-hazardous industry, track that prohibition.

Section 21: who may not be an office-bearer

Section 21(1) disqualifies a person for being chosen as, and for being, a member of the executive or any other office-bearer of a registered Trade Union if:

• (i) he has not attained the age of eighteen years;
• (ii) he has been convicted by a court in India of an offence involving moral turpitude and sentenced to imprisonment, unless a period of five years has elapsed since his release;
• (iii) the Tribunal has directed that he shall be disqualified for being chosen or for being an office-bearer of a Trade Union for a period specified in the direction.

Note the double phrase "for being chosen as, and for being". The disqualification bites both at election and continuously afterwards. A person who is convicted while in office becomes disqualified then and there.

Ground (ii) has three cumulative elements and students routinely drop one: a conviction by a court in India; of an offence involving moral turpitude; and a sentence of imprisonment. A fine alone does not disqualify. And the disqualification is not permanent: it lifts five years after release.

Section 21(2) adds a separate disqualification: no member of the Council of Ministers, and no person holding an office of profit in the Union or a State, shall be a member of the executive or other office-bearer of a Trade Union. There is an important exception inside the parenthesis: an engagement or employment in an establishment or industry with which the Trade Union is connected is not an office of profit for this purpose.

That exception is what makes the sub-section workable. A worker employed in a State-run undertaking holds his job from the State. Without the parenthesis he could not be an office-bearer of his own union.

And note the age contrast with section 20, because it is a favourite short question. Fourteen to be a member. Eighteen to be an office-bearer.

Section 23: how many outsiders may hold office

This section restricts the proportion of office-bearers who are not themselves workers in the establishment or industry concerned. It has two limbs with different arithmetic.

Section 23(1), the unorganised sector. Not less than one-half of the total number of office-bearers of every registered Trade Union in an unorganised sector shall be persons actually engaged or employed in an establishment or industry with which the union is connected.

A proviso allows the appropriate Government, by special or general order, to declare that the section shall not apply to any Trade Union or class of Trade Unions specified in the order.

An Explanation defines "unorganised sector" for this sub-section as any sector which the appropriate Government may, by notification, specify.

Section 23(2), everywhere else. Save as provided in sub-section (1), all office-bearers of a registered Trade Union, except not more than one-third of the total number of the office-bearers or five, whichever is less, shall be persons actually engaged or employed in the establishment or industry with which the union is connected.

Work the arithmetic, because "whichever is less" appears again and is again reversed by students.

So the number of outsiders is capped at five, however large the executive.

The Explanation to section 23(2) is the provision to remember, and it connects this chapter to the last: for the purposes of the sub-section, an employee who has retired or has been retrenched shall not be construed as an outsider for the purpose of holding office in a Trade Union.

That Explanation and Bokajan point the same way. In Bokajan Cement Corporation Employees' Union v. Cement Corporation of India Ltd., AIR 2004 SC 245, the Supreme Court allowed the union's appeal and held that the provision requiring the rules to provide for admission of members actually engaged or employed in the industry governs admission and not cessation, so that in the absence of a provision in the Act or in the union's own constitution a member does not cease to be a member on ceasing to be employed. That case was decided under the Trade Unions Act 1926, which section 104(1)(a) repealed on 21 November 2025, and the Code's section 7(e) is drawn the same way. The Explanation to section 23(2) now says expressly, for office-holding, what Bokajan reasoned for membership: the man who has lost his job is not thereby an outsider to his union.

Why the law tolerates outsiders at all is worth a sentence, because MU has asked it. A workforce that is illiterate, or in fear of dismissal, may have nobody within it able to negotiate, keep accounts or conduct litigation. Permitting a limited number of outsiders, typically lawyers or full-time union organisers, supplies that capacity. The criticism is the mirror image: outsiders may have political interests of their own, which is the phenomenon the Supreme Court described in Balmer Lawrie and which is worked in [Recognition: The Negotiating Union and Negotiating Council].

A worked example

The facts. The Wada Packaging Workers' Union is registered. Its executive has twelve members. Two of them are practising advocates who have never worked at the unit; one is Sudhir, a worker retrenched last year; one is Farhan, aged seventeen, employed at the unit; and one is Anil, convicted three years ago of an offence involving moral turpitude and sentenced to four months' imprisonment, released two years and eight months ago. The unit is not in a sector notified as unorganised.

The outsider arithmetic. Section 23(2) applies. One-third of twelve is four; five is five; whichever is less is four. So up to four office-bearers may be outsiders and at least eight must be persons actually engaged or employed in the establishment or industry.

Is Sudhir an outsider? No. The Explanation to section 23(2) provides that an employee who has retired or has been retrenched shall not be construed as an outsider for the purpose of holding office. So the outsiders are the two advocates, which is within the permitted four.

Farhan, aged seventeen. He may be a member: section 20 permits any person of fourteen or more employed in a non-hazardous industry to be a member and to enjoy all the rights of a member. He may not be an office-bearer: section 21(1)(i) disqualifies a person who has not attained eighteen. His election to the executive is bad, and he must be replaced, the rules having to provide for the filling of casual vacancies under section 7(i).

Anil. Section 21(1)(ii) disqualifies a person convicted by a court in India of an offence involving moral turpitude and sentenced to imprisonment, unless a period of five years has elapsed since his release. Two years and eight months have elapsed. He is disqualified, and the words "for being chosen as, and for being" mean he cannot continue in office either. He becomes eligible again five years after his release.

A member asks to see the accounts. Section 19 gives an office-bearer or member the right to inspect the books of account and the list of members, at such times as the rules provide. The union must have such rules, because section 7(d) and (j) require them.

The union wants to buy a small office. It may. Section 12 gives it power to acquire and hold immovable property, in its own registered name, and the property will not be affected by changes in membership because the union has perpetual succession.

The union's treasurer suggests also registering it as a society, to look more respectable to a bank. He must be told plainly: section 13 provides that the Societies Registration Act 1860 does not apply to a registered Trade Union and that registration under it shall be void.

What this does NOT mean

It does not mean the union cannot be dissolved. Perpetual succession means membership changes do not end its existence. Section 25 provides how it is dissolved, and section 9(5) how its registration is cancelled.

It does not mean members own the union's property. They do not. That is why section 25(2) has to provide for the funds to be divided on dissolution, by the rules or, failing that, by the Registrar in the prescribed manner.

It does not mean a fourteen-year-old can be a secretary. Fourteen is the age for membership under section 20; eighteen is the age for office under section 21(1)(i).

It does not mean every conviction disqualifies. Section 21(1)(ii) requires a conviction by a court in India of an offence involving moral turpitude and a sentence of imprisonment, and the disqualification ends five years after release.

It does not mean outsiders are forbidden. They are limited: to not more than half in the unorganised sector under section 23(1), and elsewhere to not more than one-third or five, whichever is less, under section 23(2).

It does not mean the right of inspection is open to anyone. Section 19 gives it to an office-bearer or a member.

Limits, criticism and amendments

The outsider limits are the most debated provision in the Chapter. Restricting outsiders is defended as keeping unions in the hands of the workers whose interests they exist to serve, and attacked as depriving weak workforces of the professional help they most need. The Code's answer is a compromise: a stricter proportion where capacity is likely to be scarce, the unorganised sector, and a hard cap of five elsewhere.

The Explanation to section 23(2) is a genuine improvement over a position in which a retrenched worker was arguably an outsider in his own union at the very moment he most needed it.

Section 13's list will date. It names the Co-operative Societies Act 1912 and the Companies Act 2013 by year, and clause (e) catches corresponding State co-operative laws, but a new general statute for associations would need to be added by amendment.

And section 21(2) is drawn widely. Excluding every holder of an office of profit under the Union or a State from union office is a substantial restriction, softened only by the parenthesis that preserves employment in the establishment or industry the union is connected with.

Quick revision

• Section 12: a registered Trade Union is a body corporate by its registered name, with perpetual succession, a common seal, power to acquire and hold movable and immovable property, power to contract, and it sues and is sued in that name.
• Section 13: the Societies Registration Act 1860, Co-operative Societies Act 1912, Multi-State Co-operative Societies Act 2002, Companies Act 2013 and corresponding State co-operative laws do not apply, and registration under any of them is void.
• Section 19: books of account and the list of members open to inspection by an office-bearer or member, at the times the rules provide.
• Section 20: fourteen years and a non-hazardous industry to be a member, with all the rights of a member and capacity to execute instruments and give acquittances.
• Section 21(1): disqualified for being chosen as and for being an office-bearer if under eighteen; if convicted in India of an offence involving moral turpitude and sentenced to imprisonment, until five years after release; or if the Tribunal has so directed. 21(2): no Minister and no holder of an office of profit, but employment in the establishment or industry concerned is excepted.
• Section 23(1), unorganised sector: not less than one-half insiders; proviso allows exemption by order; the sector is what the appropriate Government notifies. 23(2), elsewhere: outsiders limited to one-third or five, whichever is less. Explanation: a retired or retrenched employee is NOT an outsider.

Test yourself

1. What does a union gain by being registered? List the attributes conferred by section 12. It becomes a body corporate by the name under which it is registered, with perpetual succession, a common seal, power to acquire and hold both movable and immovable property, power to contract, and the capacity to sue and be sued in that name. Practically this means the funds and property are the union's rather than the members', the union survives every change in its membership, and litigation is by and against the union instead of by and against named individuals.

2. Why does section 13 exist, and what is the effect of registering a trade union under the Companies Act 2013? It exists because a trade union answers the general description of a society, a co-operative and an association of persons well enough for those statutes to be arguable, and if a union could be registered under one of them the Chapter III scheme, in particular the membership test in section 6, could be circumvented. Section 13 makes the Code the exclusive route: those Acts do not apply to a registered Trade Union, and registration under any of them is void.

3. Distinguish the age for membership from the age for office. Section 20 permits a person who has attained fourteen years and is employed in a non-hazardous industry to be a member of a registered Trade Union, subject to the union's rules, and to enjoy all the rights of a member. Section 21(1)(i) disqualifies a person who has not attained eighteen years for being chosen as, and for being, a member of the executive or any other office-bearer.

4. A union's executive has fifteen members. How many may be outsiders, and does a retrenched worker count as one? Under section 23(2) the permitted outsiders are not more than one-third of the total or five, whichever is less. One-third of fifteen is five and five is five, so the permitted number is five, and at least ten must be persons actually engaged or employed in the establishment or industry. A retrenched worker does not count as an outsider: the Explanation to section 23(2) provides that an employee who has retired or has been retrenched shall not be construed as an outsider for the purpose of holding office.

5. When does a criminal conviction disqualify a person from union office? Under section 21(1)(ii), when he has been convicted by a court in India of an offence involving moral turpitude and sentenced to imprisonment, and the disqualification lasts until five years have elapsed since his release. All three elements are required, so a fine without imprisonment does not disqualify, and the bar is temporary rather than permanent. The words "for being chosen as, and for being" mean the disqualification operates both at election and while in office.

6. Can a member of a State Council of Ministers hold office in a trade union? Can a worker in a State-owned mill? A member of the Council of Ministers cannot: section 21(2) excludes him, as it excludes any person holding an office of profit in the Union or a State. A worker in a State-owned mill can, because the parenthesis in section 21(2) excepts an engagement or employment in an establishment or industry with which the Trade Union is connected, and without that exception no worker in a public undertaking could hold office in his own union.

Some words this chapter uses

General fund is the union's ordinary fund, made up of the subscriptions and other receipts, out of which its ordinary work is paid for.

Prescribed, defined in section 2(zc), means prescribed by rules made under the Code. When a section says "as may be prescribed", the detail is in delegated legislation and not in the Act.

Separate fund is the second fund permitted by section 15(2), constituted from contributions separately levied for or made to it.

Civic and political interests is the expression section 15(2) uses for what the separate fund may promote. "Civic" is wider than "political": it reaches the members' interests as citizens, for example in a municipal matter, as well as in party politics.

Disability here means a legal disadvantage, something a member is barred from doing.

Levy means a contribution demanded from members, as distinct from the ordinary subscription.

Section 15(1): the general fund

The general funds of a registered Trade Union shall not be spent on any objects other than such objects as may be prescribed.

This is a prohibition, not a permission, and the drafting shows it: the fund "shall not be spent on any objects other than" the prescribed ones. Anything not prescribed is forbidden.

Where the permitted objects actually live. They are in the rules made under the Code, not in the section. This is a real change of technique from the repealed Trade Unions Act 1926, which printed a list of permitted objects in the section itself, and it has three consequences a student should be able to state.

First, the answer to "what may the general fund be spent on?" is "the objects prescribed by the rules made under the Code". That is the accurate answer, and it is the one to give. Reciting the old statutory list as though it were section 15 is the error this chapter exists to prevent.

Second, the union's own rules must reproduce those objects. Section 7(c) requires the rules of a Trade Union, as a condition of registration, to provide for the whole of the purposes for which the general funds shall be applicable, and adds that all of which purposes shall be purposes to which such funds are lawfully applicable under this Code. So the rules must state the purposes, and may not state a purpose the Code does not allow. The union cannot enlarge its own spending power by writing a wider rule.

Third, spending outside those objects is a contravention with a serious consequence. It is a contravention of the Code and of the union's own rules, and section 9(5)(ii) makes contravention of either a ground on which the Registrar may cancel the certificate of registration, after not less than sixty days' previous notice in writing specifying the grounds.

Three other provisions guard the same money. Section 7(f) requires the rules to provide for the payment of subscriptions. Section 7(g) requires them to provide the conditions under which a member is entitled to a benefit and under which a fine or forfeiture may be imposed. Section 7(j) requires them to provide for the safe custody of the funds, an annual audit in the prescribed manner and by the prescribed person, and adequate facilities for the inspection of the account books by office-bearers and members. Section 19 then gives the individual member the right to inspect the books of account and the list of members, at the times the rules provide, and section 26(1)(a) requires an audited annual general statement of receipts, expenditure, assets and liabilities to be sent to the Registrar.

Section 15(2): the separate fund

A registered Trade Union may constitute a separate fund, from contributions separately levied for or made to that fund, from which payments may be made, for the promotion of the civic and political interests of its members, in furtherance of such objects as may be prescribed.

Four features, and each of them is examinable.

It is permissive. "May constitute". No union is obliged to have a political fund.

It must be separate. Not a separate ledger entry in the general fund but a separate fund.

Its money must be separately raised. The words are "from contributions separately levied for or made to that fund". Two routes are contemplated: a levy demanded for the fund, and voluntary payments made to it. What is excluded is a transfer from the general fund, because that money came from subscriptions paid by members who may not support the object.

Its purpose is the promotion of the civic and political interests of its members, in furtherance of such objects as may be prescribed. Notice that even this fund is not at large: the objects are prescribed.

Section 15(3): the protection of the dissenting member

This is the sub-section to learn by heart, because it is a favourite short note and because every clause of it does separate work.

No member shall be compelled to contribute to the fund constituted under sub-section (2) and a member who does not contribute to the said fund shall not be excluded from any benefits of the Trade Union, or placed in any respect either directly or indirectly under any disability or at any disadvantage as compared with other members of the Trade Union (except in relation to the control or management of the said fund) by reason of his not contributing to the said fund; and contribution to the said fund shall not be made a condition for admission to the Trade Union.

Break it into its four rules.

The single exception is inside the parenthesis, and it is fair. A non-contributor may be excluded from the control or management of the said fund. He has not paid into it, so he does not vote on how it is spent. He loses nothing else.

The words "directly or indirectly" are the ones that make the sub-section effective. A union cannot achieve by practice what it may not do by rule. Quietly leaving non-contributors off the list of members the union will represent is an indirect disadvantage and is caught.

Section 15(4): subscriptions

The subscriptions payable by the members of the Trade Union shall be such as may be prescribed.

Short, and again the technique is prescription by rules rather than a figure in the Act. Section 7(f) separately requires the union's own rules to provide for the payment of a subscription by members "from such members and others, as may be prescribed".

The link to section 17 that most notes miss

Section 15 looks like a chapter about money. It is also, indirectly, a chapter about criminal liability, and the connection is worth making explicitly because it is the kind of link that turns a good answer into a very good one.

Section 17 provides that no office-bearer or member of a registered Trade Union shall be liable to punishment under section 120B(2) of the Indian Penal Code in respect of any agreement made between the members for the purpose of furthering "any such object of the Trade Union as is specified in section 15", unless the agreement is an agreement to commit an offence.

So the objects in section 15 are the measure of the immunity. An agreement to further one of them is protected from the charge of criminal conspiracy; an agreement to further something outside them is not. That is why the prescribed objects matter beyond bookkeeping, and it is why the immunity chapter, [Immunity from Criminal Conspiracy], has to send the reader back here.

A worked example

The facts. The Wada Packaging Workers' Union has 90 members paying a monthly subscription. Its general secretary proposes four things at the annual general body meeting.

Proposal one: pay the legal fees of a member whose dismissal the union is contesting before the Tribunal. This is the union's ordinary work. Whether it may be paid from the general fund depends on whether it falls within the objects prescribed under section 15(1) and reproduced in the union's rules under section 7(c). Contesting members' dismissals is the paradigm case of a union's purpose, and the rules should state it. If the rules do not, the answer is to amend the rules under section 7(k) and inform the Registrar under section 11(3), not to make the payment and hope.

Proposal two: lend two lakh rupees from the general fund to a member's brother to start a business. This is outside anything a union's general fund is for. It is a contravention of section 15(1) and of the union's own rules, and section 9(5)(ii) makes contravention of either a ground for cancelling the registration, subject to the sixty-day notice in the proviso. The proposal must be refused.

Proposal three: transfer fifty thousand rupees from the general fund to support a candidate at the municipal election. This fails for two separate reasons and a good answer gives both. It is not a permitted object of the general fund under section 15(1). And it defeats the separation section 15(2) requires, because the political fund must be constituted "from contributions separately levied for or made to that fund", not from a transfer of money subscribed for general purposes.

Proposal four: constitute a political fund by a levy of thirty rupees a month, and expel any member who refuses to pay it. The fund is lawful: section 15(2) permits a separate fund from contributions separately levied, for the promotion of the civic and political interests of members, in furtherance of prescribed objects. The expulsion is unlawful in every respect. Section 15(3) says no member shall be compelled to contribute; a non-contributor shall not be excluded from any benefits; and he shall not be placed directly or indirectly under any disability or at any disadvantage compared with other members.

A member, Meera, declines to pay the levy. She keeps her membership, her strike pay, her right to be represented, her vote at the general body meeting and her right under section 19 to inspect the books. The only thing she loses is any part in the control or management of the political fund, which is the exception in the parenthesis.

Six months later the union quietly stops putting non-contributors' grievances forward. That is an indirect disadvantage imposed by reason of not contributing, and section 15(3) forbids it in those very words. It is a contravention of the Code and so a ground under section 9(5)(ii).

A new worker is told he may join only if he agrees to the political levy. Section 15(3) closes with the words "and contribution to the said fund shall not be made a condition for admission to the Trade Union". The condition is void.

What this does NOT mean

It does not mean a union may not engage in politics. It may. Section 15(2) expressly contemplates the promotion of the civic and political interests of its members. What it may not do is fund that activity out of the general subscriptions or coerce members into paying for it.

It does not mean the general fund and the political fund are equally regulated. The general fund is limited to prescribed objects and is audited and reported under sections 7(j) and 26. The political fund is separately raised, and the protection attached to it is the protection of the member who refuses to pay, not a set of spending limits of the same kind.

It does not mean "political" only means party politics. The expression in section 15(2) is "civic and political interests", which reaches matters affecting members as citizens.

It does not mean the objects are printed in the section. They are prescribed by rules. A student who writes out the old list from the Trade Unions Act 1926 is describing a repealed Act.

It does not mean a non-contributor has a say in the political fund. He does not, and that is the one lawful consequence of not paying.

Limits, criticism and amendments

The move from a printed list to prescription by rules is the biggest change here, and it cuts both ways. It lets the permitted objects be updated without amending the Code, which is sensible. It also moves a matter that determines the reach of a criminal immunity, through section 17, out of the statute and into delegated legislation, which is a real objection.

Section 15(3) is often described as a complete protection and it is not quite. It protects the member from compulsion, from exclusion from benefits and from disability or disadvantage. It does not protect him from the ordinary social pressure of a small workplace, and enforcing it requires him to complain, which identifies him.

And the separation of funds depends on honest bookkeeping. The guards are the audit and inspection requirements in section 7(j), the member's right of inspection in section 19, and the annual audited statement to the Registrar under section 26(1)(a). Those are the provisions to cite when asked how the separation is enforced.

Quick revision

• Section 15(1): the general funds shall not be spent on any objects other than such objects as may be prescribed. The objects are in the rules, not in the section.
• Section 7(c): the union's rules must state the whole of the purposes for which the general funds are applicable, and every one must be lawfully applicable under the Code. The rules cannot enlarge the Code.
• Section 15(2): a union may constitute a separate fund, from contributions separately levied for or made to it, for the promotion of the civic and political interests of its members, in furtherance of prescribed objects.
• Section 15(3): no compulsion to contribute; a non-contributor is not excluded from any benefits; not placed directly or indirectly under any disability or disadvantage; and contribution is not a condition of admission. The one exception: he has no part in the control or management of that fund.
• Section 15(4): subscriptions are as prescribed.
• Guards on the money: 7(f) subscriptions, 7(g) benefits, fines and forfeitures, 7(j) safe custody, annual audit and inspection facilities, 19 the member's right of inspection, 26(1)(a) the audited annual statement to the Registrar.
• Sanction: spending outside the objects contravenes the Code and the rules, a ground for cancellation under section 9(5)(ii), subject to sixty days' notice.
• The link to section 17: the criminal immunity covers an agreement to further "any such object of the Trade Union as is specified in section 15", so these objects also measure that immunity.

Test yourself

1. On what may the general funds of a registered Trade Union be spent? Only on such objects as may be prescribed. Section 15(1) provides that the general funds shall not be spent on any objects other than those, and section 2(zc) defines "prescribed" as prescribed by rules made under the Code. The union's own rules must, under section 7(c), state the whole of the purposes for which the general funds are applicable, all of which must be purposes to which the funds are lawfully applicable under the Code, so the rules may reproduce but not enlarge the permitted objects.

2. What is the political fund, and how must it be raised? It is the separate fund a registered Trade Union may constitute under section 15(2) for the promotion of the civic and political interests of its members, in furtherance of prescribed objects. It must be constituted from contributions separately levied for or made to that fund, so it cannot be funded by a transfer out of the general fund, whose subscriptions were paid for general purposes.

3. A union's rules provide that a member who does not pay the political levy shall not receive strike pay. Is the rule valid? No. Section 15(3) provides that a member who does not contribute to the political fund shall not be excluded from any benefits of the Trade Union, nor placed in any respect directly or indirectly under any disability or at any disadvantage as compared with other members by reason of his not contributing. Withholding strike pay is exclusion from a benefit and the rule is bad.

4. What is the only disadvantage a non-contributing member may lawfully suffer? Exclusion in relation to the control or management of the political fund. That is the sole exception, stated in the parenthesis in section 15(3). He keeps every other right and benefit of membership.

5. May a union require a new member to join the political fund as a condition of admission? No. Section 15(3) ends with the express words that contribution to that fund shall not be made a condition for admission to the Trade Union.

6. Why does section 15 matter to the immunity from criminal conspiracy? Because section 17 measures that immunity by section 15. It protects an office-bearer or member from punishment under section 120B(2) of the penal law in respect of an agreement made between the members for the purpose of furthering "any such object of the Trade Union as is specified in section 15", unless the agreement is one to commit an offence. So the objects that define what the general fund may be spent on also define how far the protection from a conspiracy charge extends.

Held. The appeal was dismissed. Reviewing the scheme of the 1971 Act, the Court explained why recognition exists. On the advent of industrial revolution, large units concentrated workmen at one place under one employer. The trade union movement representing organised labour developed as an adjunct of political parties, and every political party, with a view to controlling vote banks, set up its labour wings; the combination and fragmentation of political parties therefore had a pernicious effect on trade unions, and the multiplicity of parties spilled over into a multiplicity of unions seeking to represent workmen in one undertaking. The consequence was inter-union and intra-union rivalry threatening the peaceful working of the undertaking, each union trying to overreach its rival by making occasionally untenable demands, leading to conflict and confrontation which disturbed industrial peace and directly affected production. A need was therefore felt for the concept of a recognised union where multiple unions seek to represent workmen, and there was near unanimity, including from the National Commission on Labour, that such a union should be clothed with the powers of sole bargaining agent; the only question was the method of ascertaining which of the rival unions should have that status, and it was agreed that the union representing the largest number of workmen in the undertaking should acquire it, as being in tune with industrial democracy.

Why it matters. Twice over for a Mumbai student. It is the Supreme Court's own explanation of why a legal system picks one union to bargain, which is exactly what section 14 of the Code now does nationally; and it was decided on the Maharashtra Act that still governs recognition and unfair labour practices in this State.

Some words this chapter uses

Recognition means the employer's obligation to treat a particular union as the body it negotiates with. It is not the same as registration.

Negotiating union, defined together with negotiating council in section 2(z), is the union recognised under section 14 for negotiating with the employer.

Sole negotiating union is the union recognised under section 14(2) or (3) as the only one the employer negotiates with.

Negotiating council is the body constituted under section 14(4) where no union has the required support, made up of representatives of the qualifying unions.

Muster roll is the employer's register of the workers employed. Section 14(3) and (4) measure support against the workers on the muster roll of the industrial establishment.

Verified in such manner as may be prescribed means the support has to be established by a procedure the rules lay down, not merely asserted by the union.

Sole bargaining agent is the expression the Supreme Court used in Balmer Lawrie for a union clothed with the exclusive right to represent the workmen.

Section 14, sub-section by sub-section

14(1): the duty to have one

There shall be a negotiating union or a negotiating council, as the case may be, in an industrial establishment having registered Trade Union for negotiating with the employer of the industrial establishment, on such matters as may be prescribed.

Two things are established at once. There shall be such a body wherever there is a registered Trade Union in the establishment, so the machinery is compulsory and not optional. And what it negotiates about is prescribed by the rules, so the Code does not itself list the negotiable matters.

14(2): one union in the establishment

Where only one Trade Union of workers registered under the provisions of this Chapter is functioning in an industrial establishment, then, the employer of such industrial establishment shall, subject to such criteria as may be prescribed, recognise such Trade Union as sole negotiating union of the workers.

The employer "shall" recognise. There is no discretion, subject only to the prescribed criteria. Notice also that the union must be functioning in the establishment and registered under this Chapter.

14(3): more than one union, and one of them has 51 per cent.

If more than one Trade Union of workers registered under this Code are functioning in an industrial establishment, then, the Trade Union having fifty-one per cent. or more workers on the muster roll of that industrial establishment, verified in such manner as may be prescribed, supporting that Trade Union shall be recognised by the employer of the industrial establishment, as the sole negotiating union of the workers.

The threshold is fifty-one per cent. or more, measured against the workers on the muster roll and not against union membership, and it must be verified in the prescribed manner.

Support, not membership. The sub-section speaks of workers "supporting that Trade Union". A worker may support a union in a verification exercise without being a subscribing member.

14(4): more than one union, and none has 51 per cent.

Where more than one registered Trade Union is functioning and none has fifty-one per cent. or more support verified as prescribed, the employer shall constitute a negotiating council consisting of the representatives of those registered Trade Unions which have the support of not less than twenty per cent. of the total workers on the muster roll, so verified, and such representation shall be of one representative for each twenty per cent. and for the remainder after calculating the membership on each twenty per cent.

The arithmetic needs an example, because the closing words are compressed. Take an establishment of 1,000 workers, so each 20 per cent. is 200.

Two rules produce that table. A union is in the council only if it has not less than twenty per cent.; C, on 19 per cent., is out. A union that qualifies gets one representative for each full twenty per cent. and one for the remainder.

14(5): how the council decides

Where any negotiation on the matters referred to in sub-section (1) is held between an employer and a negotiating council constituted under sub-section (4), consequent upon such negotiation, any agreement is said to be reached, if it is agreed by the majority of the representatives of the Trade Unions in such negotiating council.

A majority of the representatives, not of the unions and not of the workers. On the table above the council has five representatives, so three of them agreeing makes an agreement. Union A alone, with three of the five, can carry it.

14(6): how long recognition lasts

Any recognition under sub-section (2) or (3), or a negotiating council constituted under sub-section (4), is valid for three years from the date of recognition or constitution, or such further period not exceeding five years in total as may be mutually decided by the employer and the Trade Union.

Read the arithmetic of that carefully, because it is easy to misstate. The base period is three years. It may be extended by mutual decision, and the total may not exceed five years. So the maximum extension is two further years, and it requires agreement on both sides.

Three years is also the period in section 7(i), which requires the rules to provide for the election of office-bearers once in every three years. The two periods are deliberately aligned.

14(7): facilities

The facilities to be provided by the industrial establishment to a negotiating union or negotiating council shall be such as may be prescribed.

Section 27: recognition at the Central and State level

Section 14 works inside a single industrial establishment. Section 27 does something different: it lets a union or federation be recognised as a Central Trade Union or a State Trade Union.

Section 27(1): where the Central Government is of opinion that it is necessary or expedient that a Trade Union or federation of Trade Unions be recognised as a Central Trade Union at the Central level, it may recognise it in such manner and for such purpose as may be prescribed; and any dispute in relation to such recognition shall be decided by such authority in such manner as the Central Government prescribes.

Section 27(2) makes identical provision for a State Government and a State Trade Union.

What this recognition is for. It is not bargaining with an employer. It is status at the level of the country or the State, which is what determines whom the Government consults, and who sits in the tripartite bodies described in [The ILO's Influence on Indian Labour Legislation]. The purposes are prescribed rather than listed in the section.

Note that the power is discretionary in both sub-sections, "may recognise", and that the trigger is the Government's own opinion of what is necessary or expedient.

Registration and recognition distinguished

This table answers MU's topic 1.3 in one place, and it is worth reproducing in an answer.

The Maharashtra position, which a Mumbai student must know

Section 104(1) of the Code repeals three Acts and all three are central: the Trade Unions Act 1926, the Industrial Employment (Standing Orders) Act 1946 and the Industrial Disputes Act 1947. The Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act 1971, on which Balmer Lawrie was decided, is a State Act and is not in that list.

That Act did, at State level and decades earlier, what section 14 now does nationally. Its section 19 provides for the recognition of a union satisfying stated conditions, and its section 20 sets out the rights of a recognised union, including by section 20(2)(b) the exclusive right to represent the workmen of an undertaking in certain proceedings, with the decision binding on all employees, while denying that right to an individual workman except where the legality or propriety of a dismissal, discharge, removal, retrenchment, termination or suspension is under consideration.

In Balmer Lawrie the Supreme Court upheld that scheme against a constitutional challenge brought by an unrecognised union, and dismissed the appeal.

What a student should say, and should not say. Say that Maharashtra has had statutory recognition since 1971, that Balmer Lawrie upheld it, that the Code has now introduced recognition nationally through section 14, and that the 1971 Act is a State law untouched by section 104(1). Do not assert how the two operate together in any given case: that is a question of repugnancy under Article 254 of the Constitution which turns on the precise provisions and has not been settled here.

A worked example

The facts. A packaging plant in Wada has 1,200 workers on its muster roll. Four registered unions function there. Verification conducted in the prescribed manner shows support of: Union A 610, Union B 300, Union C 250, Union D 40.

Is there a sole negotiating union? Yes. Fifty-one per cent. of 1,200 is 612. Union A has 610, which is two short. So there is no sole negotiating union under section 14(3), and the employer must proceed under sub-section (4).

Change one fact: Union A has 615. That is 51.25 per cent., so Union A shall be recognised by the employer as the sole negotiating union. The others get nothing under section 14, whatever their size.

Back to the original figures. Who is on the negotiating council? Twenty per cent. of 1,200 is 240. Unions with not less than 240 qualify: A on 610, B on 300, C on 250. Union D on 40 does not.

How many representatives does each get? One for each full 240, and one for the remainder.

The council has seven representatives.

The employer offers a settlement. A's three representatives and C's two accept; B's two refuse. Under section 14(5) an agreement is reached if it is agreed by a majority of the representatives in the council. Five of seven agreed, so there is an agreement, and B's refusal does not prevent it.

How long does the council last? Three years from its constitution, under section 14(6), extendable by mutual decision between the employer and the Trade Union to a total not exceeding five years.

Union D, with 40 supporters, complains that it is registered and is being excluded. It is excluded, and lawfully. Registration gives it corporate status under section 12 and the immunities under sections 16 to 18; it does not give it a seat at the table. That is the whole distinction between registration and recognition, and it is what Balmer Lawrie upheld when an unrecognised union challenged the exclusive rights of the recognised one.

What this does NOT mean

It does not mean recognition follows from registration. They are separate, differently tested and differently conferred, and MU's topic names both because they are different.

It does not mean an unrecognised union has no rights. It keeps everything Chapter III gives: corporate personality, protected funds and the three immunities. What it loses is the right to negotiate. Note also, from Balmer Lawrie, that even under the Maharashtra Act the exclusive right of representation was not absolute: section 20 preserved the individual workman's position in proceedings about dismissal, discharge, removal, retrenchment, termination and suspension.

It does not mean fifty-one per cent. of the members. It is fifty-one per cent. of the workers on the muster roll, verified as prescribed.

It does not mean the council decides by union. It decides by a majority of the representatives, section 14(5), so a large union can carry a decision alone.

It does not mean recognition is permanent. Three years, extendable by mutual decision to five in total.

It does not mean the Maharashtra Act was repealed. Section 104(1) repeals three central Acts and no State Act.

Limits, criticism and amendments

The fifty-one per cent. threshold is high, and that is the principal criticism of section 14. In a workforce split among several unions, a threshold above half will rarely be met, so the negotiating council will be the norm rather than the exception. The council in turn produces a body in which agreement is by a majority of representatives, so a union with a large minority can be outvoted by a coalition of smaller ones, or, as in the worked example, a single large union can carry the council alone.

Twenty per cent. is a real exclusion. A registered union with nineteen per cent. of a large workforce, which may be several hundred people, has no seat at all.

Almost everything is left to the rules. The matters that may be negotiated, the criteria for recognition under sub-section (2), the manner of verification, and the facilities to be provided are all prescribed. A student should say this rather than invent detail.

And the Code provides no express appeal against recognition decisions, unlike section 10 for registration. That is a gap worth naming in an answer.

Against all that, the provision is a genuine advance. For ninety-nine years Indian law gave a union no right to be negotiated with at all, and the National Commission on Labour's recommendation, recorded by the Supreme Court in Balmer Lawrie, has finally been enacted nationally.

Quick revision

• Recognition is not registration. Registrar and status, sections 6 to 11; employer and bargaining rights, section 14.
• 14(1): there shall be a negotiating union or council wherever a registered union functions; the matters are prescribed.
• 14(2): only one union functioning, the employer shall recognise it as sole negotiating union, subject to prescribed criteria.
• 14(3): several unions, the one with fifty-one per cent. or more of the workers on the muster roll supporting it, verified as prescribed, is the sole negotiating union.
• 14(4): nobody at fifty-one per cent., the employer shall constitute a negotiating council of unions with not less than twenty per cent. support, one representative for each twenty per cent. and one for the remainder.
• 14(5): an agreement is reached if agreed by a majority of the representatives in the council.
• 14(6): valid three years, extendable by mutual decision to a total not exceeding five.
• 14(7): facilities as prescribed.
• Section 27: the Central and State Governments may recognise a union or federation as a Central or State Trade Union, in the prescribed manner and for prescribed purposes, disputes decided by the prescribed authority.
• Balmer Lawrie, AIR 1985 SC 311: appeal dismissed; multiplicity of unions came from the multiplicity of political parties; the need was felt for a recognised union as sole bargaining agent; the National Commission on Labour agreed, and the union with the largest number of workmen should have that status.
• The MRTU and PULP Act 1971 survives, being a Maharashtra Act and not among the three central Acts repealed by section 104(1).

Test yourself

1. Distinguish registration from recognition. Registration is the conferment of legal status on the union as a body, by the Registrar of Trade Unions appointed under section 5, on the tests in section 6 and the rules requirements in section 7; it makes the union a body corporate under section 12 and gives it the immunities in sections 16 to 18, and it continues until cancelled under section 9(5), with an appeal to the Tribunal under section 10. Recognition is the conferment of bargaining rights in a particular industrial establishment, by the employer, under section 14, on a test of verified support among the workers on the muster roll; it lasts three years, extendable by mutual decision to not more than five in total.

2. An establishment has 800 workers and three registered unions with verified support of 300, 260 and 200. What follows? Fifty-one per cent. of 800 is 408, and no union reaches it, so there is no sole negotiating union under section 14(3) and the employer must constitute a negotiating council under section 14(4). Twenty per cent. of 800 is 160, so all three qualify. Representation is one for each full 160 and one for the remainder: the union with 300 gets one for 160 and one for the remaining 140, so two; the union with 260 gets one for 160 and one for the remaining 100, so two; the union with 200 gets one for 160 and one for the remaining 40, so two. The council has six representatives, and under section 14(5) an agreement requires a majority of them.

3. Why was recognition introduced, according to the Supreme Court? In Balmer Lawrie Workers' Union v. Balmer Lawrie & Co. Ltd., AIR 1985 SC 311, the Court explained that industrialisation concentrated workmen under one employer; that the trade union movement developed as an adjunct of political parties, each party setting up labour wings to control vote banks, so that the multiplicity and fragmentation of parties produced a multiplicity of unions in one undertaking; that the result was inter-union and intra-union rivalry threatening the peaceful working of the undertaking, each union overreaching its rival with occasionally untenable demands, disturbing industrial peace and affecting production; and that the need was therefore felt for a recognised union clothed with the powers of sole bargaining agent, the National Commission on Labour agreeing that the union representing the largest number of workmen should acquire that status as being in tune with industrial democracy.

4. For how long does recognition last? Three years from the date of recognition or of the constitution of the council, under section 14(6), or such further period as may be mutually decided by the employer and the Trade Union, so long as the total does not exceed five years.

5. Does an unrecognised registered union lose its immunities? No. Sections 16, 17 and 18 attach to a registered Trade Union, and recognition is a separate matter. What an unrecognised union loses is the right to negotiate under section 14 and the facilities under section 14(7). Balmer Lawrie confirms that an exclusive right of representation in the recognised union is constitutionally permissible, and notes that even there the exclusivity was qualified: the individual workman's position was preserved in proceedings concerning dismissal, discharge, removal, retrenchment, termination or suspension.

6. What is the position of the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act 1971 after 21 November 2025? It is not repealed. Section 104(1) of the Code repeals three Acts and all three are central: the Trade Unions Act 1926, the Industrial Employment (Standing Orders) Act 1946 and the Industrial Disputes Act 1947. The 1971 Act is a Maharashtra statute, it provided for recognition in this State decades before the Code did, and it is the Act on which Balmer Lawrie was decided. How its provisions operate alongside section 14 in any particular case raises a question of repugnancy under Article 254 of the Constitution, which is not settled here.

Some words this chapter uses

Collective bargaining is negotiation between an employer and a body representing the workers about the terms and conditions of employment.

Bi-partite means having two sides. A bi-partite forum has the employer on one side and the workers on the other, with nobody from outside. Tri-partite adds the Government as a third party, which is what the ILO is and what the Indian Labour Conference is.

Negotiating union or negotiating council, section 2(z), is the body recognised or constituted under section 14 to negotiate with the employer.

Settlement, section 2(zi), means a settlement arrived at in the course of a conciliation proceeding, and includes a written agreement between the employer and worker arrived at otherwise than in the course of a conciliation proceeding, where the agreement has been signed by the parties in the prescribed manner and a copy has been sent to an officer authorised by the appropriate Government and to the conciliation officer.

Sole bargaining agent is the expression the Supreme Court used in Balmer Lawrie for a union clothed with the exclusive right to represent the workmen.

The three levels at which the Code provides for it

The Code does not use the phrase "collective bargaining" as a heading, and a student should say so plainly rather than pretending otherwise. What it does is provide machinery at three levels.

Level one: inside the establishment, sections 3 and 4

Section 3, the Works Committee. In an industrial establishment in which one hundred or more workers are employed, or have been employed on any day in the preceding twelve months, the appropriate Government may by general or special order require the employer to constitute a Works Committee, in the prescribed manner, consisting of representatives of the employer and of the workers engaged in the establishment.

Two features of section 3 are examinable and both are about balance. The proviso requires that the number of representatives of the workers shall not be less than the number of representatives of the employer, so the workers can never be outnumbered. And section 3(2) requires the workers' representatives to be chosen from among the workers engaged in the establishment in consultation with their Trade Union, if any, registered under section 9, so the union is brought into the process even though the Works Committee is not itself a union body.

Its duty, under section 3(3), is to promote measures for securing and preserving amity and good relations between the employer and the workers, and to that end to comment upon matters of common interest.

Section 4, the Grievance Redressal Committee, is the companion body, and it deals with individual grievances rather than the general relationship. Both are treated fully in Module II's chapter on the bi-partite forums, which is not yet written; they appear here because they are the first rung of the bargaining ladder.

Level two: negotiating with the employer, section 14

This is the level at which collective bargaining proper happens, and it is the subject of [Recognition: The Negotiating Union and Negotiating Council]. In short: section 14(1) requires that there shall be a negotiating union or a negotiating council in any industrial establishment having a registered Trade Union, for negotiating with the employer on such matters as may be prescribed. A union with fifty-one per cent. or more of the workers on the muster roll supporting it is the sole negotiating union; where none has that, a negotiating council is constituted of the unions with not less than twenty per cent., and an agreement is reached if a majority of the representatives in the council agree.

Section 14 is the provision that converts collective bargaining from a practice into a legal process, because before the Code no employer was obliged to negotiate with anybody at all.

Level three: the agreement, and what makes it worth having

The product of successful bargaining is a settlement within section 2(zi). The definition covers two things, and the difference matters.

A settlement arrived at in the course of a conciliation proceeding, that is with a conciliation officer involved.

And a written agreement arrived at outside conciliation, provided it is signed by the parties in the prescribed manner and a copy is sent to an officer authorised by the appropriate Government and to the conciliation officer.

Those conditions on the second limb are the practical point of the definition. A private deal between an employer and a union is not a settlement in law unless it is written, signed as prescribed, and copied to the two officers. Get that wrong and the parties have a contract but not a settlement, and they lose what sections 57 and 58 give: the settlement's binding effect on the persons those sections specify, and a fixed period of operation. Those sections belong to Module II and are treated there.

What the Supreme Court has said about it

Balmer Lawrie Workers' Union v. Balmer Lawrie & Co. Ltd., AIR 1985 SC 311, 1984 Supp SCC 663.

Facts. After a strike the employer settled a number of pending industrial disputes with the union recognised under the Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act 1971. Clause 17 of that settlement required the company to deduct 15 per cent. of the gross arrears payable to each employee, members and non-members alike, as a contribution to the recognised union's fund. An unrecognised union challenged clause 17 and the validity of section 20 of the 1971 Act, which gives a recognised union the exclusive right to represent the workmen and denies that right to others except in proceedings concerning dismissal, discharge, removal, retrenchment, termination or suspension. A single judge and a Division Bench had both rejected the challenge.

Held. The appeal was dismissed. Reviewing the scheme of the 1971 Act, the Court explained that industrialisation had concentrated workmen under one employer; that the trade union movement developed as an adjunct of political parties, each party setting up labour wings to control vote banks, so that the multiplicity and fragmentation of parties produced a multiplicity of unions in one undertaking; that the result was inter-union and intra-union rivalry threatening the peaceful working of the undertaking, each union trying to overreach its rival by making occasionally untenable demands, disturbing industrial peace and directly affecting production; and that a need was therefore felt for the concept of a recognised union clothed with the powers of sole bargaining agent, the National Commission on Labour also favouring it, with the union representing the largest number of workmen acquiring that status as being in tune with industrial democracy.

Why it matters here. It is the Supreme Court's own explanation of why collective bargaining in India needed a legally chosen bargaining agent, and it is the authority for the disadvantage listed below: that where several unions compete, bargaining degenerates into rivalry.

All India Bank Employees' Association v. National Industrial Tribunal, AIR 1962 SC 171, worked in [Why Workers Combined: The Historical Reasons], supplies the constitutional limit. The Supreme Court held that the right guaranteed by article 19(1)(c) extends only to the formation of an association or union and carries no concomitant right that it shall achieve its objects, the union's activities and the steps it may take being subject to such laws as may be framed. So there is no fundamental right to bargain collectively in India. Whatever right exists is what the Code gives, which is why section 14 matters so much.

Advantages and disadvantages

MU has set this as a full essay, so it is worth having in an ordered form rather than as a list of adjectives.

Advantages

It corrects the inequality of bargaining power, which is the reason the whole subject exists. The workers negotiate as one body and the employer is dealing with the loss of all his production.

It produces terms suited to the particular establishment. A statute fixes a floor for a whole industry or a whole State; bargaining fixes what this employer can afford and these workers need.

It buys industrial peace for a period. A settlement has a defined life under section 58, so both sides know where they stand and neither has to reopen the question every month.

It is cheaper and faster than adjudication. Litigation before a Tribunal takes years, costs money and produces a decision imposed on both sides. A settlement is made by the parties themselves.

It gives the parties ownership of the result. An award is imposed; a settlement is agreed, and an agreed outcome is far more likely to be observed.

It is a form of industrial democracy, and the Constitution endorses the idea: article 43A directs the State to take steps to secure the participation of workers in the management of undertakings.

Disadvantages

There is no fundamental right to it. On All India Bank Employees' Association, article 19(1)(c) protects only the formation of the union, so bargaining rests entirely on the statute.

It presupposes a union strong enough to bargain. Where the workforce is unorganised, casual, or afraid of dismissal, there is nobody with the strength to sit opposite the employer, and the process is a form without a substance.

Multiplicity of unions turns bargaining into rivalry. This is the disadvantage the Supreme Court itself described in Balmer Lawrie: competing unions overreach each other with untenable demands and industrial peace suffers. Section 14 is the answer, and its own thresholds are criticised in the recognition chapter.

The minority is bound by a bargain it did not make. Where one union is the sole negotiating union, or a council decides by a majority of its representatives under section 14(5), workers who supported neither are governed by the result. Balmer Lawrie upheld exactly that arrangement against an unrecognised union's challenge.

The bargaining power is unequal in a slump. When work is short the threat of withdrawing labour is worth little, so the process delivers most when it is needed least.

And it can settle only what the parties can settle. Matters outside the employer's control, or reserved to statute, are not negotiable however willing both sides are, and section 14(1) itself confines negotiation to "such matters as may be prescribed".

A worked example

The facts. A packaging plant in Wada employs 1,200 workers. Three registered unions function there, with verified support of 610, 300 and 250. The employer wants a three-year wage settlement.

Who does he negotiate with? Not with whichever union writes to him first. Fifty-one per cent. of 1,200 is 612 and no union reaches it, so under section 14(4) he shall constitute a negotiating council of the unions with not less than twenty per cent. support, that is 240. All three qualify, and the council is made up of their representatives, one for each full twenty per cent. and one for the remainder.

Is there also a Works Committee? There may be. The establishment employs more than one hundred workers, so under section 3(1) the appropriate Government may by general or special order require the employer to constitute one. If it does, the workers' representatives must not be fewer than the employer's, and they are chosen from among the workers in consultation with their registered union.

The council and the employer agree terms. Two of the three unions' representatives vote for it and one against. Under section 14(5) an agreement is reached if it is agreed by a majority of the representatives in the council, so there is an agreement. The dissenting union's members are bound by it, which is the minority problem set out above, and Balmer Lawrie is the authority that such an arrangement is permissible.

Is the agreement a settlement? Only if it satisfies section 2(zi). If it was reached with a conciliation officer involved, it is a settlement arrived at in the course of a conciliation proceeding. If it was reached privately, it is a settlement only if it is in writing, signed by the parties in the prescribed manner, and a copy is sent both to an officer authorised by the appropriate Government and to the conciliation officer. If the parties simply shake hands and issue a circular, they have an understanding and not a settlement, and they will not get what sections 57 and 58 give.

Two years later the employer refuses to talk to any union. Section 14(1) says there shall be a negotiating union or negotiating council for negotiating with the employer, so the machinery is compulsory. But note the limit of the answer: the Code obliges him to have a body to negotiate with and to negotiate on the prescribed matters. Neither the Code nor the Constitution obliges him to agree, and on All India Bank Employees' Association article 19(1)(c) gives the union no right to achieve its object.

What this does NOT mean

It does not mean there is a right to collective bargaining in the Constitution. All India Bank Employees' Association holds the opposite.

It does not mean every agreement with a union is a settlement. Section 2(zi) imposes conditions on an agreement reached outside conciliation: writing, signature in the prescribed manner, and copies to two officers.

It does not mean the Works Committee bargains. Its duty under section 3(3) is to promote amity and good relations and to comment on matters of common interest. Bargaining proper is section 14.

It does not mean bargaining is an alternative to the immunities. It depends on them. A union whose officers can be prosecuted for agreeing to act together, or sued for the production a strike costs, has nothing to bargain with.

It does not mean the Code uses the phrase. It does not, and an answer is stronger for saying so and then showing where the machinery actually is.

Limits, criticism and amendments

The single largest criticism is that the Code still does not impose a duty to bargain in good faith. Section 14 requires that there be a negotiating union or council, and prescribes the matters, but it does not oblige the employer to negotiate seriously or to justify a refusal, and it attaches no consequence to bad faith at the table.

The thresholds are high. Fifty-one per cent. for a sole negotiating union means that in a divided workforce the council will be the norm, and twenty per cent. excludes a union that may still represent several hundred people.

Almost everything is prescribed. The matters on which negotiation takes place, the manner of verification, and the facilities under section 14(7) are all in the rules, so the statutory right is only as wide as the rules make it.

Against that, section 14 is a real advance. For the ninety-nine years of the Trade Unions Act 1926 there was no national machinery of recognition at all, and an employer could lawfully refuse to speak to any union. The National Commission on Labour's recommendation, which the Supreme Court recorded in Balmer Lawrie in 1984, has finally been enacted.

Quick revision

• Collective bargaining is negotiation between an employer and a body representing the workers about terms and conditions, in place of a separate bargain with each worker.
• The Code never uses the phrase. Its machinery is at three levels: sections 3 and 4 inside the establishment, section 14 for negotiating with the employer, and section 2(zi) for the settlement that results, with sections 57 and 58 giving it force.
• Section 3: Works Committee where one hundred or more workers are or have been employed in the preceding twelve months; workers' representatives not fewer than the employer's; chosen from among the workers in consultation with their registered Trade Union; duty to promote amity and good relations and comment on matters of common interest.
• Section 14: there shall be a negotiating union or council; fifty-one per cent. for a sole negotiating union; twenty per cent. for a seat on a council; council decides by a majority of representatives.
• Section 2(zi): a settlement is one reached in conciliation, or a written agreement outside it signed as prescribed with copies to the authorised officer and the conciliation officer.
• Balmer Lawrie, AIR 1985 SC 311: multiplicity of unions bred rivalry; the need was felt for a recognised union as sole bargaining agent; the union with the largest number of workmen should have it.
• All India Bank Employees' Association, AIR 1962 SC 171: article 19(1)(c) protects formation only, so there is no fundamental right to bargain collectively.
• Advantages: corrects inequality of bargaining power; terms fitted to the establishment; industrial peace for a fixed period; cheaper and faster than adjudication; ownership of the result; industrial democracy, article 43A.
• Disadvantages: no fundamental right; needs a strong union; multiplicity breeds rivalry; the minority is bound; weak in a slump; only prescribed matters are negotiable.

Test yourself

1. Define collective bargaining and say where the Code provides for it. It is the process by which terms and conditions of employment are settled by negotiation between an employer and one or more organisations representing the workers, the resulting agreement governing all the workers covered by it. The Industrial Relations Code 2020 never uses the phrase, but provides machinery at three levels: sections 3 and 4 establish bi-partite forums inside the establishment; section 14 requires there to be a negotiating union or negotiating council for negotiating with the employer on such matters as may be prescribed; and section 2(zi) defines the settlement that results, with sections 57 and 58 fixing whom it binds and how long it operates.

2. What are the advantages of collective bargaining? It corrects the inequality of bargaining power that makes the individual contract of employment a form without a substance. It produces terms fitted to the particular establishment rather than a statutory floor for a whole industry. It buys industrial peace for a defined period, since a settlement has a fixed life. It is cheaper and faster than adjudication before a Tribunal. It gives the parties ownership of a result they agreed rather than one imposed on them. And it is a form of industrial democracy, which article 43A of the Constitution directs the State to secure.

3. What are its disadvantages? There is no fundamental right to it, since on All India Bank Employees' Association article 19(1)(c) protects only the formation of a union. It presupposes a union strong enough to bargain, which an unorganised or casual workforce does not have. Multiplicity of unions turns bargaining into rivalry, the very phenomenon the Supreme Court described in Balmer Lawrie, where competing unions overreach each other with untenable demands. The minority is bound by a bargain it did not make, whether by a sole negotiating union or by a majority of the representatives in a council under section 14(5). Bargaining power is weakest in a slump, when it is most needed. And only prescribed matters are negotiable at all.

4. Explain the Works Committee and its relation to bargaining. Under section 3(1), where one hundred or more workers are employed, or have been employed on any day in the preceding twelve months, the appropriate Government may by general or special order require the employer to constitute a Works Committee of representatives of the employer and of the workers. By the proviso the workers' representatives shall not be fewer than the employer's, and by section 3(2) they are chosen from among the workers in consultation with their registered Trade Union, if any. Its duty under section 3(3) is to promote measures for securing and preserving amity and good relations and to comment upon matters of common interest. It is the first rung of the ladder rather than the bargaining body itself; bargaining proper is under section 14.

5. An employer and a union sign a private wage agreement and issue a circular about it. Is it a settlement? Not on those facts. Section 2(zi) covers a settlement arrived at in the course of a conciliation proceeding, and includes a written agreement arrived at outside conciliation only where it has been signed by the parties in the prescribed manner and a copy has been sent to an officer authorised by the appropriate Government and to the conciliation officer. An agreement that is not signed as prescribed and copied to both officers is a contract between the parties but not a settlement, so it does not attract what sections 57 and 58 give.

6. "The Industrial Relations Code guarantees collective bargaining." Comment. The statement is too strong. Section 14(1) does require that there be a negotiating union or negotiating council in an industrial establishment having a registered Trade Union, for negotiating with the employer, which is a real advance on the Trade Unions Act 1926, under which an employer could lawfully refuse to speak to any union at all. But the Code imposes no duty to bargain in good faith, attaches no consequence to a refusal to move, confines negotiation to prescribed matters, and does not oblige the employer to agree to anything. And there is no constitutional backstop: on All India Bank Employees' Association v. National Industrial Tribunal, AIR 1962 SC 171, article 19(1)(c) extends only to the formation of a union and carries no concomitant right that it shall achieve its objects.

Casual vacancy, in section 7(i), is a vacancy arising between elections.

Prejudice, in section 24(8), means to affect adversely.

Section 22: Trade Union disputes go to the Tribunal, and nowhere else

Section 22(1) lists four situations in which an application may be made, in the prescribed manner, to the Tribunal having jurisdiction over the area where the registered office of the Trade Union or Trade Unions is located, for adjudication:

• (a) where a dispute arises between one Trade Union and another;
• (b) between one or more workers who are members of the Trade Union and the Trade Union, regarding registration, administration or management or election of office-bearers of the Trade Union;
• (c) between one or more workers who are refused admission as members and the Trade Union;
• (d) where a dispute is in respect of a Trade Union which is a federation of Trade Unions, and an office-bearer authorised in that behalf by the Trade Union.

Take the four in turn, because they cover very different quarrels.

Clause (a) is union against union. The classic case is two unions each claiming to represent the same workers, which is the multiplicity problem described in [Recognition: The Negotiating Union and Negotiating Council].

Clause (b) is member against his own union, and it is limited by subject matter: registration, administration, management, or the election of office-bearers. It is the provision under which a member challenges a rigged or overdue election, and it pairs with section 7(i), which requires the rules to provide for elections once in every three years.

Clause (c) is the outsider knocking at the door. A worker refused admission may apply. This matters because membership carries real advantages, and because an executive that could refuse admission at will could keep the union in its own hands indefinitely.

Clause (d) deals with federations.

Section 22(2) is the sentence to quote, and it is short:

No civil court other than the Tribunal shall have power to entertain any suit or other proceedings in relation to any dispute referred to in sub-section (1).

Two features. The bar is total for the listed disputes: no other civil court may entertain any suit or other proceedings. And the Tribunal is the substitute, not merely an alternative, which is consistent with section 10 sending registration appeals to the Tribunal and with section 97 barring the jurisdiction of civil courts more generally.

Notice the difference from an industrial dispute. A Trade Union dispute, defined in section 2(zm), is one relating to a Trade Union arising between two or more Trade Unions or between members of a Trade Union inter se. It goes to the Tribunal under section 22 on an application. An industrial dispute, section 2(q), is a dispute with the employer and travels the machinery in Chapters II, VI and VII. Section 22 has nothing to do with the employer.

Section 24: change of name, and amalgamation

Change of name

Section 24(1): a registered Trade Union may, with the consent of not less than two-thirds of the total number of its members and subject to sub-section (3), change its name.

Two-thirds of the total number of members, not two-thirds of those present at a meeting. That is a high bar, and deliberately so: the name is the union's legal identity under section 12.

Section 24(3): notice in writing of every change of name, signed by the secretary and by seven members of the union changing its name, must be sent to the Registrar, in the prescribed manner. Where the head office of an amalgamated union is in a different State, notice must also go to the Registrar of that State.

Section 24(4): if the proposed name is identical with that of an existing registered union, or in the Registrar's opinion so nearly resembles it as to be likely to deceive the public or the members of either Trade Union, the Registrar shall refuse to register the change of name.

That is the same test as section 8(4) for a name at the point of first registration, and it is asked in exactly the same words.

Section 24(5): save as provided in sub-section (4), the Registrar shall, if satisfied that the Code's provisions about change of name have been complied with, register the change in the register referred to in section 9(3), and the change of name shall have effect from the date of such registration.

Amalgamation

Section 24(2): any two or more registered Trade Unions may be amalgamated in such manner as may be prescribed.

Section 24(3) requires notice of every amalgamation, signed by the secretary and by seven members of each and every Trade Union which is a party to it. So a merger of three unions requires the secretary and seven members of each of the three.

Section 24(6): the Registrar of the State in which the head office of the amalgamated Trade Union is situated shall, if satisfied that the Code's provisions about amalgamation have been complied with and that the Trade Union formed thereby is entitled to registration under section 9, register the Trade Union, and the amalgamation shall have effect from the date of such registration.

Two points in that sub-section repay attention. The registering authority is fixed by where the amalgamated union's head office is, which is why sub-section (3) requires notice to that State's Registrar as well. And the new body must itself be entitled to registration under section 9, so an amalgamation cannot be used to create a union that could not have been registered in the first place.

What survives a change of name or an amalgamation

Section 24(7): a change of name shall not affect any rights or obligations of the Trade Union or render defective any legal proceeding by or against it, and any legal proceeding which might have been continued or commenced by or against it by its former name may be continued or commenced by or against it by its new name.

Section 24(8): an amalgamation of two or more registered Trade Unions shall not prejudice any right of any such Trade Unions or any right of a creditor of any of them.

These two sub-sections are the reason the sections exist in this form. Without them, a union could shed a judgment debt by renaming itself, or three unions could merge and leave their creditors with nobody to sue. Sub-section (7) preserves proceedings and lets them go on under the new name; sub-section (8) protects the creditors of every constituent union.

Section 25: dissolution

Section 25(1): when a registered Trade Union is dissolved, notice of the dissolution signed by seven members and by the secretary shall, within fourteen days of the dissolution, be sent to the Registrar; and it shall be registered by him if he is satisfied that the dissolution has been effected in accordance with the rules of the Trade Union; and the dissolution shall have effect from the date of such registration.

Four elements to remember. Seven members and the secretary must sign. The notice must go within fourteen days. The Registrar's satisfaction is directed to one thing only, whether the dissolution was effected in accordance with the union's own rules, which is why section 7(l) requires the rules to provide for the manner of dissolution. And, as with a change of name and an amalgamation, the dissolution takes effect from registration, not from the members' resolution.

Section 25(2): where the dissolution has been registered and the rules do not provide for the distribution of funds on dissolution, the Registrar shall divide the funds amongst the members in such manner as may be prescribed.

This sub-section is the necessary consequence of section 12. Because the union is a body corporate, the funds are the union's and not the members'. When the union ceases to exist somebody must decide where its money goes. The rules decide it if they say anything, and section 7(c) required them to state the purposes for which the general funds are applicable; if they are silent on distribution, the Registrar divides the funds among the members in the prescribed manner.

Distinguish dissolution from cancellation. Cancellation under section 9(5) removes the union's registration, and with it the corporate status and the immunities; the combination of persons may go on existing as an unregistered Trade Union within section 2(zl). Dissolution under section 25 ends the union's existence. They are different events with different procedures, and a question that asks about one is not asking about the other.

Section 26: annual returns and inspection

Section 26(1)(a): every registered Trade Union shall forward annually to the Registrar, on or before the prescribed date, in the prescribed form, audited in the prescribed manner and by the prescribed person, a general statement containing particulars of all receipts and expenditure during the year ending on the 31st day of December next preceding the prescribed date, and of the assets and liabilities existing on that 31st December.

Section 26(1)(b): along with that statement, a statement showing changes of office-bearers made during the year to which it refers, together with a copy of the rules corrected up to the date of dispatch.

Section 26(2): a copy of every alteration made in the rules shall be sent to the Registrar within fifteen days of the making of the alteration.

Section 26(3): for the purpose of examining those documents, the Registrar or an officer authorised by him by general or special order may at all reasonable times inspect the certificate of registration, account books, registers and other documents relating to a Trade Union at its registered office, or may require their production at such place as he may specify, but no such place shall be at a distance of more than fifteen kilometres from the registered office.

The fifteen kilometre limit is a small provision worth remembering because it is the kind of concrete detail an examiner likes and because it has an obvious purpose: it stops a union's officers being required to carry their books across the State.

Section 26 completes the accountability scheme begun in section 7. Section 7(j) requires the rules to provide for safe custody, an annual audit and inspection facilities; section 19 gives an office-bearer or member the right to inspect the books of account and the list of members; and section 26 sends an audited statement to the Registrar every year and lets him inspect. The three provisions should be cited together whenever the question is how a union's funds are controlled.

A worked example

The facts. The Wada Packaging Workers' Union has 90 members. Four things happen in one year.

One: a member, Rakesh, says the executive has held no election for four years and asks the civil court to order one. The civil court has no jurisdiction. This is a dispute between a member and his Trade Union regarding the election of office-bearers, which is section 22(1)(b), and section 22(2) provides that no civil court other than the Tribunal shall have power to entertain any suit or other proceedings in relation to it. Rakesh must apply, in the prescribed manner, to the Tribunal having jurisdiction over the area where the union's registered office is located. On the merits, the union's rules must provide for election once in every three years under section 7(i), and a failure to hold one is also a contravention of the union's own rules, which is a ground for cancellation under section 9(5)(ii).

Two: a worker, Shabnam, is refused admission and wants to challenge it. Section 22(1)(c) covers a dispute between one or more workers who are refused admission as members and the Trade Union. She applies to the Tribunal, and again no civil court may entertain it.

Three: the union wants to rename itself "Wada Packaging Shramik Sangh". It needs the consent of not less than two-thirds of the total number of its members, so of 90 members it needs 60, and two-thirds of those attending a meeting will not do. Notice in writing signed by the secretary and seven members goes to the Registrar under section 24(3). If a registered union is already called "Wada Packaging Shramik Sanghatana", the Registrar must consider section 24(4) and shall refuse if in his opinion the name so nearly resembles it as to be likely to deceive the public or the members of either union. If he registers the change, it takes effect from the date of registration, section 24(5), and by section 24(7) a suit pending against the union in its old name may be continued against it in the new one.

Four: the union amalgamates with a union at a neighbouring unit whose head office is in a different State. Amalgamation is in the prescribed manner, section 24(2). Notice signed by the secretary and seven members of each union goes to the Registrar, and, the amalgamated union's head office being in another State, to that State's Registrar too, section 24(3). The Registrar of the State where the amalgamated union's head office is situated registers it if satisfied that the provisions have been complied with and that the new union is entitled to registration under section 9, and the amalgamation takes effect from that registration, section 24(6). A creditor of either original union is protected by section 24(8), which provides that the amalgamation shall not prejudice any right of a creditor of any of them.

Finally, suppose instead the members resolve to wind the union up on 3 April. Notice of the dissolution, signed by seven members and the secretary, must reach the Registrar within fourteen days, so by 17 April, under section 25(1). He registers it if satisfied the dissolution was effected in accordance with the union's rules, and it takes effect from that registration. The union has 40,000 rupees and its rules say nothing about distributing funds on dissolution: section 25(2) then requires the Registrar to divide the funds among the members in the prescribed manner. And the union must still have filed, for the preceding year, the audited general statement of receipts, expenditure, assets and liabilities under section 26(1)(a).

What this does NOT mean

It does not mean every dispute involving a union goes to the Tribunal under section 22. Only the four classes in sub-section (1). A dispute with the employer is an industrial dispute under section 2(q) and travels a different route entirely.

It does not mean a change of name creates a new union. It is the same body corporate with a different name, which is why section 24(7) preserves its rights, obligations and proceedings.

It does not mean dissolution and cancellation are the same. Cancellation under section 9(5) removes registration; dissolution under section 25 ends existence.

It does not mean the members own the funds on dissolution as of right. The rules govern; only if the rules are silent does the Registrar divide the funds among the members in the prescribed manner.

It does not mean two-thirds of a meeting can change the name. Section 24(1) requires the consent of not less than two-thirds of the total number of its members.

It does not mean the Registrar may summon the books anywhere. Section 26(3) caps the place of production at fifteen kilometres from the registered office.

Limits, criticism and amendments

Section 22 is a real improvement on the position under the repealed Trade Unions Act 1926, which left most internal union disputes to the ordinary civil courts, where they were slow enough to outlast the elections they concerned. Sending them to the Tribunal, and barring civil courts outright, is the sensible answer.

But section 22(1)(b) is limited by subject matter, to registration, administration, management and the election of office-bearers, and a member with a complaint outside those words has to fit himself into them.

The two-thirds requirement for a change of name is high, and it is calculated on total membership, which in a union with many inactive members can be difficult to reach.

The accounting year is fixed at 31 December by section 26(1)(a), which does not match the Indian financial year, so a union keeps its statutory records on one calendar and its tax affairs on another.

And much again is prescribed rather than stated: the manner of an application under section 22(1), the manner of amalgamation, the manner of dividing funds on dissolution, and the form, date, auditor and manner of the annual statement.

Quick revision

• Section 22(1): four classes go to the Tribunal where the registered office is: (a) union against union; (b) member against his union on registration, administration, management or election of office-bearers; (c) a worker refused admission; (d) a dispute in respect of a federation.
• Section 22(2): no civil court other than the Tribunal may entertain any suit or other proceedings in relation to those disputes.
• Section 24(1): change of name needs not less than two-thirds of the total number of members. 24(3): notice signed by the secretary and seven members, and by seven of each union in an amalgamation, to the Registrar, and to another State's Registrar where the amalgamated head office is there.
• Section 24(4): refuse a name identical or so nearly resembling an existing one as to be likely to deceive. Same test as section 8(4).
• Section 24(5) and (6): change of name and amalgamation take effect from registration; the amalgamated union must itself be entitled to registration under section 9.
• Section 24(7): a change of name does not affect rights, obligations or proceedings; proceedings continue in the new name. 24(8): an amalgamation does not prejudice any right of a creditor.
• Section 25(1): dissolution notice signed by seven members and the secretary, within fourteen days, registered if effected in accordance with the rules, effective from registration. 25(2): if the rules do not provide for distribution, the Registrar divides the funds among the members as prescribed.
• Section 26: annual audited general statement of receipts, expenditure, assets and liabilities for the year ending 31 December, plus changes of office-bearers and corrected rules; alterations of rules within fifteen days; inspection at the registered office or at a place not more than fifteen kilometres away.

Test yourself

1. A member says his union's election was rigged. Where does he go, and why not to a civil court? To the Industrial Tribunal, by an application in the prescribed manner under section 22(1)(b), which covers a dispute between one or more workers who are members and the Trade Union regarding the election of office-bearers, made to the Tribunal having jurisdiction over the area where the union's registered office is located. He may not go to a civil court because section 22(2) provides that no civil court other than the Tribunal shall have power to entertain any suit or other proceedings in relation to a dispute referred to in sub-section (1).

2. What consent is needed to change a union's name, and when does the change take effect? The consent of not less than two-thirds of the total number of its members, under section 24(1), calculated on total membership and not on those present at a meeting. Notice signed by the secretary and seven members goes to the Registrar under section 24(3), the Registrar must refuse under section 24(4) if the proposed name is identical with, or so nearly resembles, that of an existing registered union as to be likely to deceive the public or the members of either union, and under section 24(5) the change takes effect from the date of its registration.

3. Does a change of name affect a pending suit against the union? No. Section 24(7) provides that a change of name shall not affect any rights or obligations of the Trade Union or render defective any legal proceeding by or against it, and that any legal proceeding which might have been continued or commenced by or against it by its former name may be continued or commenced by or against it by its new name.

4. State the procedure for dissolution and the position of the funds. Under section 25(1), notice of the dissolution signed by seven members and by the secretary must be sent to the Registrar within fourteen days of the dissolution; he registers it if satisfied that the dissolution was effected in accordance with the union's rules; and the dissolution takes effect from the date of that registration. Under section 25(2), where the dissolution has been registered and the rules do not provide for the distribution of the funds, the Registrar shall divide them among the members in the prescribed manner. The provision is necessary because, the union being a body corporate under section 12, the funds belong to the union and not to the members.

5. Distinguish dissolution from cancellation of registration. Cancellation under section 9(5) is the Registrar's withdrawal of the certificate of registration, on the union's own application, on contravention of the Code, the rules or the union's own constitution or rules, or on the membership falling below the required figure, and it requires not less than sixty days' previous notice in writing specifying the grounds. It removes the union's registered status and with it corporate personality and the immunities, but the combination may continue to exist as an unregistered Trade Union within section 2(zl). Dissolution under section 25 is the ending of the union's existence, effected in accordance with its own rules and registered by the Registrar.

6. What must a registered union file each year, and what may the Registrar inspect? Under section 26(1)(a), an annual general statement, in the prescribed form, audited in the prescribed manner and by the prescribed person, containing particulars of all receipts and expenditure for the year ending on the 31st December preceding the prescribed date and of the assets and liabilities existing on that date; and under section 26(1)(b), along with it, a statement of changes of office-bearers during that year and a copy of the rules corrected up to the date of dispatch. Under section 26(2), a copy of every alteration in the rules within fifteen days of its making. Under section 26(3), the Registrar or an authorised officer may at all reasonable times inspect the certificate of registration, account books, registers and other documents at the registered office, or require their production at a specified place, which may not be more than fifteen kilometres from the registered office.

And the Constitution does not solve this. In All India Bank Employees' Association v. National Industrial Tribunal, AIR 1962 SC 171, the Supreme Court held that the right guaranteed by article 19(1)(c) extends only to the formation of an association or union and carries no concomitant right that the union shall achieve its objects; its activities, and the steps it may take to achieve them, are subject to such laws as may be framed, and those laws are not tested against article 19(4). Section 16 is therefore the source of the protection, and there is no other.

Some words this chapter uses

Tort is a civil wrong, other than a breach of contract, for which the remedy is damages.

Inducing a breach of contract is the tort committed by a person who knowingly persuades one party to a contract to break it, causing loss to the other party.

In contemplation or furtherance of an industrial dispute is the statutory formula fixing when the protection applies. "In contemplation of" covers acts done before the dispute breaks out, while it is being prepared; "in furtherance of" covers acts done to advance it once it exists.

Industrial dispute is defined in section 2(q). It is the dispute with the employer, and it is not the same as a Trade Union dispute under section 2(zm), which is a dispute between unions or among members.

Agent, in section 16(2), is a person acting on the union's behalf.

Executive, section 2(n), is the body to which the management of the union's affairs is entrusted.

Vicarious liability is the liability of one person for the wrong of another, typically an employer for an employee or a principal for an agent. Section 16(2) is a statutory limit on it.

Section 16(1): the three protected grounds

No suit or other legal proceeding shall be maintainable in any civil court against any registered Trade Union or any office-bearer or member thereof in respect of any act done in contemplation or furtherance of an industrial dispute to which a member of the Trade Union is a party on the ground only that such act induces some other person to break a contract of employment or that it is an interference with the trade, business, or employment of some other person or with the right of some other person to dispose of his capital or of his labour as he wills.

The sub-section has four conditions and three protected grounds. An answer that separates them scores; one that runs them together does not.

The four conditions

One: the defendant must be a registered Trade Union, or an office-bearer or member of one. An unregistered combination has nothing here, however genuine.

Two: the proceeding must be in a civil court. The protection is against civil liability. A prosecution is a different question and is answered by section 17.

Three: the act must be done in contemplation or furtherance of an industrial dispute. An act unconnected with any dispute is unprotected.

Four: the dispute must be one to which a member of the Trade Union is a party. So a union cannot pick up somebody else's quarrel and claim the immunity for it. A member of the union must be a party to the dispute.

The three grounds

The suit is barred on the ground only that the act:

• induces some other person to break a contract of employment; or
• is an interference with the trade, business or employment of some other person; or
• is an interference with the right of some other person to dispose of his capital or of his labour as he wills.

The first ground answers the tort of inducing a breach of contract, and notice its precision: it is a contract of employment. Inducing a breach of a contract of supply, say by persuading a haulier not to deliver to the employer, is not within these words.

The second and third grounds answer the wider economic torts. The third is worth reading twice: "the right of some other person to dispose of his capital or of his labour as he wills". It protects the union against a claim by the employer whose capital is idled, and against a claim by a worker who wanted to work and was prevented, so far as the ground of that claim is only interference with his freedom to dispose of his labour.

"On the ground only", and why it is the whole section

Those three words limit the immunity to the grounds listed. The section does not say a registered union cannot be sued. It says a suit cannot be maintained on the ground only that the act had one of the three listed characteristics.

So a claim founded on something else is untouched. If, during the same strike, pickets assault a manager, damage machinery, trespass or defame the employer, the suit is founded on those wrongs and not merely on inducement or interference. Section 16 does not bar it.

The Supreme Court has said this in terms, of the identically drawn predecessor.

Rohtas Industries Ltd. v. Rohtas Industries Staff Union, AIR 1976 SC 425, (1976) 2 SCC 82, Krishna Iyer, Chandrachud and A.C. Gupta JJ.

Facts. In 1948 the workmen of Rohtas Industries struck. The strike was illegal under sections 23 and 24 of the Industrial Disputes Act 1947, and it arose out of rivalry between unions. The workmen were not paid wages for the strike period and the employers lost profit. During conciliation the parties agreed to refer both claims, the workmen's claim to wages for the strike period and the employers' claim to compensation for the loss caused, to the joint arbitration of two retired High Court judges and a retired member of a Labour Appellate Tribunal under section 10A of the 1947 Act. The arbitrators awarded the employers compensation. The union moved the High Court under article 226.

Held. The employers' claim failed, and the Court gave several reasons, of which three matter here.

On the tort of conspiracy, the Court held that the tort necessarily involves that the object of the combination be the infliction of damage on the plaintiff. A strike may be illegal, but if its object is to bring the employer to terms with the employees, or to bully a rival trade union into submission, there is no actionable combination in tort. Here the conceded object was inter-union rivalry, and the arbitrators had assumed that an illegal strike made the tort out; that was a clear lapse in the law on the face of the award.

On the employer's claim generally, an illegal strike is the creation of the statute and the remedy for it and its fall-out must be sought within the statute and not outside it; the employers' claim for compensation for loss of business is not an industrial dispute within section 2(k), so the arbitrators had no jurisdiction, and the consent of the parties could not create it. Krishna Iyer J observed that claims by employers against the workmen on grounds of tortious liability have not found a place in the pharmacopeia of Indian industrial law.

And on the immunity itself, the Court held that the High Court's view was wrong in supposing that section 18 of the Trade Unions Act 1926 gave strikers an implied immunity from all legal proceedings.

The Court also fixed the outer limit: where individuals wilfully destroy plant and machinery to cause loss to the employer, they are liable for the injury so caused. Sabotage, in the Court's words, is no weapon in workers' legal armoury.

Why it matters. It does three jobs. It shows how narrow the tort of conspiracy is where the defendants are workers pursuing their own interests. It disposes of the employer's instinctive remedy, a claim for the profits an illegal strike cost him. And it states expressly that the civil immunity is not a blanket immunity from all legal proceedings, which is exactly what the words "on the ground only" mean.

The case was decided under the Trade Unions Act 1926 and the Industrial Disputes Act 1947, both repealed by section 104(1) on 21 November 2025. Section 16 of the Code re-enacts the civil immunity in the same terms as section 18 of the 1926 Act, and the common law of conspiracy the case applies is not statutory at all, so the reasoning stands. What has changed is the surrounding law: sections 62 and 63 of the Code make far more strikes illegal than sections 22 and 23 of the 1947 Act did, so the protection now operates across a wider field of illegal strikes. That is a point worth making in an answer, and it belongs to the chapter on strikes in Module III, which is not yet written.

Section 16(2): the union's protection against its own agent

A registered Trade Union shall not be liable in any suit or other legal proceeding in any civil court in respect of any tortuous act done in contemplation or furtherance of an industrial dispute by an agent of the Trade Union if it is proved that such person acted without the knowledge of, or contrary to express instructions given by, the executive of the Trade Union.

This sub-section does something quite different from sub-section (1), and students routinely treat them as one.

What the sub-section is for. Section 12 makes a union a body corporate, and a body corporate is ordinarily liable for the torts of those who act on its behalf. A union has hundreds of members and, in a strike, many people acting in its name across several sites. Without this sub-section a single agent's excess would fasten liability on the union itself.

The two escape routes are alternatives. The union escapes if the agent acted without the knowledge of the executive, or contrary to express instructions given by the executive. Either will do.

But the burden is squarely on the union. "If it is proved" means the union must establish it. And "express instructions" means express: a general exhortation to keep the strike peaceful may not be enough, whereas a recorded resolution of the executive directing that there be no obstruction of the gates is evidence of exactly the kind the sub-section contemplates.

Note also who is not protected by sub-section (2): the agent himself. The sub-section relieves the union. The agent remains personally liable for his own tort, subject only to whatever sub-section (1) gives him if he is a member or office-bearer and the suit is founded only on the three listed grounds.

A worked example

The facts. The Wada Packaging Workers' Union, registered, is in dispute with the employer over the wage rate. Members of the union are parties to the dispute. After notice, the workers strike. Five things then happen and the employer sues on each.

One: the union persuaded 90 workers to stop work, and each of them broke his contract of employment. The claim is founded only on the ground that the union's act induced other persons to break contracts of employment. Section 16(1) bars it. The union is registered, the act was done in furtherance of an industrial dispute, and members of the union are parties to it.

Two: the strike stopped production and cost the employer nine days' profit. Again the claim is founded only on interference with the employer's trade or business, and on interference with his right to dispose of his capital as he wills. Barred by section 16(1). And on Rohtas Industries the alternative framing in the tort of conspiracy also fails, because the object of the combination was to obtain a wage increase, not to inflict damage on the employer.

Three: two workers who wanted to work were persuaded not to. So far as their claim is founded only on interference with their right to dispose of their labour as they will, section 16(1) bars it, that being the third listed ground.

Four: on the sixth day pickets broke the gate lock and damaged two machines. Section 16(1) does not bar this. The claim is founded on damage to property, which is not one of the three grounds, and the words "on the ground only" therefore leave it untouched. On Rohtas Industries, individuals who wilfully destroy plant and machinery are liable for the injury caused.

Five: the same pickets are said to have been acting for the union, so the employer sues the union itself for the damage. Here section 16(2) is the union's answer, and it must prove its case: that the pickets were acting without the knowledge of the executive, or contrary to express instructions given by the executive. If the executive had passed and circulated a resolution directing members not to obstruct or damage anything, the union is likely to discharge that burden. If the executive knew and did nothing, it will not.

Change one fact. Suppose the union is not registered. It has none of section 16, and every one of the five claims proceeds on ordinary principles. That is the practical value of registration, and it is why [The Registrar and the Criteria for Registration] comes before this chapter.

Change another. Suppose the dispute is between two unions about which of them represents the workers, and the union's act induces workers to leave their jobs in the course of that quarrel. That is a Trade Union dispute under section 2(zm), not an industrial dispute under section 2(q), and section 16(1) protects acts done in contemplation or furtherance of an industrial dispute. The third condition fails.

What this does NOT mean

It does not mean a registered union cannot be sued. It means a suit cannot be maintained on the ground only that the act was one of the three listed things. Rohtas Industries holds expressly that the predecessor section did not give an implied immunity from all legal proceedings.

It does not protect violence, damage, trespass or defamation. Those found a claim on a different ground.

It does not protect an unregistered combination. Section 16 says "registered Trade Union".

It does not cover inducing a breach of any contract. The first ground is a contract of employment.

It does not give a right to strike. The right to strike, so far as it exists, is a matter of Chapter VIII, and All India Bank Employees' Association holds that article 19(1)(c) confers no such right. Section 16 removes a civil liability; it does not create a freedom.

It does not make the agent immune under sub-section (2). That sub-section relieves the union of liability for the agent's tort. The agent answers for his own.

Limits, criticism and amendments

The immunity is narrow by design and the criticism cuts both ways. Employers say that a union which calls a strike causing enormous loss cannot be made to pay for any of it, and that Rohtas Industries closed the alternative route as well by holding that such a claim is not an industrial dispute at all. Unions say the protection is illusory the moment a strike becomes effective, because effective picketing shades quickly into conduct founded on grounds outside the three, and the union then has to prove the section 16(2) defence.

The words "contract of employment" leave a real gap. Persuading a supplier or a transporter to withhold performance is a familiar industrial tactic and it is not within the first ground, though it may fall within the second.

The section is a re-enactment rather than a reform. It reproduces the substance of section 18 of the Trade Unions Act 1926, so the ninety-nine years of case law on that section continue to be the guide, provided the case is always cited as decided under the repealed Act.

And the surrounding law has moved against the protection. Because sections 62 and 63 of the Code make far more strikes illegal than the 1947 Act did, more industrial action now begins from a position of illegality, even though section 16 itself is unchanged.

Quick revision

• Section 16(1): no suit or other legal proceeding in any civil court against a registered Trade Union or its office-bearer or member, in respect of an act done in contemplation or furtherance of an industrial dispute to which a member of the union is a party, on the ground only that it (i) induces another to break a contract of employment, (ii) is an interference with the trade, business or employment of another, or (iii) is an interference with another's right to dispose of his capital or his labour as he wills.
• "On the ground only" is the whole section. A claim founded on assault, damage, trespass or defamation is untouched.
• Section 16(2): the union alone is not liable for any tortious act of an agent done in contemplation or furtherance of an industrial dispute if it is proved the agent acted without the knowledge of, or contrary to express instructions given by, the executive. The burden is on the union; the agent stays liable himself.
• Rohtas Industries, AIR 1976 SC 425: the tort of conspiracy needs the object of the combination to be the infliction of damage; an object of bringing the employer to terms or bullying a rival union is not actionable; an employer's claim for loss of business is not an industrial dispute, so arbitrators had no jurisdiction and consent could not create it; the High Court was wrong to find an implied immunity from all legal proceedings; and sabotage is no weapon in workers' legal armoury.
• All India Bank Employees' Association, AIR 1962 SC 171: article 19(1)(c) protects only formation, so the immunity is statutory or nothing.

Test yourself

1. State the protection in section 16(1) and its conditions. No suit or other legal proceeding is maintainable in any civil court against a registered Trade Union or any office-bearer or member of it, in respect of an act done in contemplation or furtherance of an industrial dispute to which a member of the union is a party, on the ground only that the act induces some other person to break a contract of employment, or that it is an interference with the trade, business or employment of some other person, or with the right of some other person to dispose of his capital or of his labour as he wills. The four conditions are that the defendant be a registered union or its office-bearer or member; that the proceeding be in a civil court; that the act be done in contemplation or furtherance of an industrial dispute; and that a member of the union be a party to that dispute.

2. Why are the words "on the ground only" the most important in the section? Because they confine the immunity to the three listed grounds. The section does not say a registered union cannot be sued; it says a suit cannot be maintained where the only ground relied on is one of those three. A claim founded on assault, damage to property, trespass or defamation is founded on a different ground and is not barred. Rohtas Industries states the point expressly, holding the High Court wrong to read the predecessor section as an implied immunity from all legal proceedings.

3. An employer sues a registered union for the profit lost during an illegal strike. Advise, with authority. The claim will fail. Section 16(1) bars a suit founded only on interference with the employer's trade or business or with his right to dispose of his capital as he wills. If the claim is reframed as the tort of conspiracy, Rohtas Industries Ltd. v. Rohtas Industries Staff Union, AIR 1976 SC 425, holds that the tort requires the object of the combination to be the infliction of damage on the plaintiff, and that where the object is to bring the employer to terms or to bully a rival union there is no actionable combination. The same case holds that an illegal strike is the creation of the statute so the remedy must be sought within it, and that an employer's claim for compensation for loss of business is not an industrial dispute, so it cannot be referred to adjudication or arbitration and consent cannot create that jurisdiction.

4. Distinguish section 16(1) from section 16(2). Section 16(1) protects the union together with its office-bearers and members, but only against a suit founded on three specified grounds, and only where the four conditions are met. Section 16(2) protects the union alone, against liability for any tortious act done in contemplation or furtherance of an industrial dispute by an agent, and it applies only if the union proves that the agent acted without the knowledge of the executive or contrary to its express instructions. The burden under sub-section (2) is on the union, and the agent remains personally liable.

5. During a strike some members damage the employer's machinery. Is the union liable? Section 16(1) does not bar the claim, because it is founded on damage to property and not merely on inducement or interference, and on Rohtas Industries the individuals who wilfully destroy plant and machinery are liable for the injury caused. Whether the union is liable turns on section 16(2): the union escapes if it proves that those acting for it did so without the knowledge of the executive, or contrary to express instructions given by the executive. Evidence of a recorded executive resolution forbidding such conduct is the kind of proof contemplated.

6. Does section 16 give workers a right to strike? No. It removes a civil liability that would otherwise attach to acts done in contemplation or furtherance of an industrial dispute; it does not confer a freedom. Whether a strike is lawful is governed by Chapter VIII, sections 62 and 63. And in All India Bank Employees' Association v. National Industrial Tribunal, AIR 1962 SC 171, the Supreme Court held that article 19(1)(c) of the Constitution protects only the formation of a union and carries no concomitant right that it shall achieve its objects, the union's activities being subject to such laws as may be framed.

Substantive offence means an offence complete in itself, such as wrongful confinement or assault, as opposed to the inchoate offence of agreeing to commit one.

Gherao is defined by the Calcutta High Court in the case worked below. It is not a statutory term.

Cognizable offence is one for which a police officer may arrest without a warrant and begin an investigation without an order of a magistrate.

Section 17, taken apart

No office-bearer or member of a registered Trade Union shall be liable to punishment under sub-section (2) of section 120B of the Indian Penal Code (45 of 1860) in respect of any agreement made between the members for the purpose of furthering any such object of the Trade Union as is specified in section 15, unless such agreement is an agreement to commit an offence.

The section has five elements and one exception. Every one of them limits it.

One: only an office-bearer or member is protected, and only of a registered Trade Union. An unregistered combination has nothing.

Two: the protection is only from punishment under section 120B(2). It is not a general criminal immunity, and it is not even a general immunity from conspiracy: the section names one sub-section of one offence.

Three: the protection attaches to an agreement, not to conduct. What is taken outside the offence is the making of the agreement.

Four: the agreement must be made between the members. An agreement with outsiders is not within the words.

Five: the purpose must be furthering an object of the union specified in section 15. This is the substantive limit, and it links this section to [The Funds of a Trade Union, and the Political Fund]. Because section 15 prescribes the objects by rules rather than printing them, the accurate statement is that the immunity extends to agreements furthering the objects prescribed under the Code, and a student should say that rather than reciting the list from the repealed 1926 Act.

The exception: "unless such agreement is an agreement to commit an offence." This is the sentence that decides most problems. An agreement to commit an offence is outside the section entirely, and the conspirators may be charged in the ordinary way.

The leading case, and the limits are the whole of it

Jay Engineering Works Ltd. v. State of West Bengal, AIR 1968 Cal 407, 72 CWN 440, a Full Bench of the Calcutta High Court.

Facts. The company had a sales office in Calcutta employing about 365 workmen, whose union was registered under the Trade Unions Act 1926. Eighteen employees were retrenched in January 1967. On 27 January the retrenched employees with about seventy others blockaded the premises, obstructing the passage of personnel and goods, including food for those confined inside. On 2 March about two hundred people gheraoed the manager and other officers from one in the afternoon; the gherao lasted thirty-three hours. On 17 April between one hundred and one hundred and fifty people did the same, and the confined men were rescued only at ten at night on 18 April on the order of the Chief Presidency Magistrate under section 100 of the Code of Criminal Procedure. On 29 May the officers were confined again for over five hours. Property was tampered with, insulting slogans were shouted, and food was allowed in only in nominal quantity at the besiegers' will. Information was given to the police each time and no action was taken, the police being immobilised by two State Government circulars. The company moved the High Court under article 226.

Held. The Court answered three questions, and two of them are the substance of this chapter.

On what a gherao is, the Court gave the definition that has been used ever since: a gherao is a physical blockade of a target, either by encirclement or forcible occupation; the target may be a place or a person or persons, usually the managerial or supervisory staff of an industrial establishment; the blockade may be complete or partial and is invariably accompanied by wrongful restraint, and or wrongful confinement, and occasionally by assault, criminal trespass, mischief to person and property, unlawful assembly and various other criminal offences; and the object is to compel those who control industry to submit to the demands of the workers without recourse to the machinery provided for by law and in wanton disregard of it, that is to achieve their object not by peaceful means but by violence.

On the immunity, the Court held that the protection given by section 17 of the Trade Unions Act 1926 is of a limited nature and must be clearly understood. What the section provides is that an agreement to do things in furtherance of the objects set out in section 15 will not amount to a criminal conspiracy. Adopting the reasoning it approved, the Court held that trade unions have the right to declare strikes and to do certain acts in furtherance of trade disputes, and are not liable civilly for such acts or criminally for conspiracy in furtherance of such acts as the Act permits, but there is nothing in that Act which, apart from immunity from criminal conspiracy, allows immunity from any criminal offence.

The Court then applied that to the facts in terms that answer any problem question. If a person or persons wrongfully restrain or wrongfully confine another, the matter comes under the penal provisions on wrongful restraint and wrongful confinement, and cannot be saved by section 17 of the Trade Unions Act 1926 or indeed any provision thereof. A combination of industrial workers cannot claim immunity from being charged with criminal conspiracy if they conspire to commit an offence; whether there was such a conspiracy is a question of fact. The commission of an offence is not excused by any other law. And though workers may go on peaceful strikes which are not illegal, they have no right to resort to coercive methods like wrongful restraint, wrongful confinement and criminal trespass, which are all cognizable offences, such methods being the more unwarranted because there is machinery set up by law to deal with industrial disputes.

The Court also drew a careful line about staying in a factory. Factory workers have a right to enter the factory; their staying in becomes criminal trespass when it appears that they intend to intimidate, insult or annoy the management or to commit any other offence. Staying in peacefully for the purpose of appealing to the management to grant some concessions would not be an offence, and the Court advised that police action be avoided in such cases.

Why it matters. It is the single most useful case on the limits of the immunities, and the limits are what an examiner asks about. It also supplies the accepted definition of gherao, which MU has set as a short note in its own right.

It was decided under the Trade Unions Act 1926, repealed by section 104(1)(a) on 21 November 2025. Section 17 of the Code reproduces the same protection in the same shape: immunity from a charge under section 120B(2) for an agreement between members made to further an object specified in section 15, unless the agreement is one to commit an offence. The reasoning that the immunity stops at conspiracy and never reaches a substantive offence is unchanged, and indeed the Code now says so expressly in the closing words of section 17, which the 1926 Act reached by construction.

The companion authority is Rohtas Industries. In Rohtas Industries Ltd. v. Rohtas Industries Staff Union, AIR 1976 SC 425, worked in [Immunity from Civil Suit], the Supreme Court held that the High Court had been wrong to suppose that the corresponding civil immunity gave strikers an implied immunity from all legal proceedings, and that individuals who wilfully destroy plant and machinery to cause loss to the employer are liable for the injury caused, sabotage being no weapon in workers' legal armoury. The two cases point the same way from opposite sides of the law: neither immunity is a general licence.

The penal law reference, and how to handle it

Section 17 refers to "sub-section (2) of section 120B of the Indian Penal Code (45 of 1860)". The Code received assent on 28 September 2020. The penal law of India has since been replaced by the Bharatiya Nyaya Sanhita 2023.

What a student should do about that is straightforward. Quote the section as it stands, because that is what the statute says, and note that the reference to the Indian Penal Code is read, in the ordinary way, as a reference to the corresponding provision of the law now in force. Do not silently substitute a Sanhita section number: that would be quoting a provision the Code does not contain, and this book's rule is that section numbers come from the text, never from recollection.

The same caution applies to the offences discussed in Jay Engineering Works. That judgment cites the Indian Penal Code sections on wrongful restraint, wrongful confinement and criminal trespass as they then stood, and this chapter quotes the case as the case put it.

A worked example

The facts. The Wada Packaging Workers' Union is registered. Its executive resolves at a meeting that the members will stop work from Monday until the wage rate is revised, and that members will stand at the gate to explain the dispute to anyone arriving. Four things then happen.

One: the employer complains that the executive agreed together to cause his business loss, and asks the police to charge them with criminal conspiracy. Section 17 answers it. They are office-bearers and members of a registered Trade Union; the agreement was made between the members; and its purpose was to further an object of the union within section 15, regulating relations with the employer over wages being the paradigm case. The agreement is not an agreement to commit an offence. No liability under section 120B(2).

Two: on the third day thirty members surround the manager in his office and keep him there for eleven hours, allowing him no food. This is a gherao on the Jay Engineering Works definition: a physical blockade of a target by encirclement, accompanied by wrongful restraint and wrongful confinement. Section 17 does not help. Wrongful confinement is a substantive offence and, in the Court's words, cannot be saved by section 17 or indeed by any provision of the statute; there is nothing which, apart from immunity from criminal conspiracy, gives immunity from any criminal offence.

Three: the employer says the thirty must have agreed among themselves before doing it, and asks that they be charged with conspiracy as well. Now the exception in section 17 bites from the other direction. The agreement was an agreement to commit an offence, so it falls within the closing words of the section, and the immunity does not apply to it at all. On Jay Engineering Works a combination of industrial workers cannot claim immunity from being charged with criminal conspiracy if they conspire to commit an offence, and whether they did is a question of fact on which the burden lies on the person alleging it.

Four: on the fifth day forty members sit inside the plant, peacefully, refusing to leave until the manager hears them, and do nothing else. Here the answer is more favourable and it comes from the same case. Factory workers have a right to enter the factory, and their staying in becomes criminal trespass only when it appears that they intend to intimidate, insult or annoy the management or to commit some other offence; staying in peacefully to appeal to the management for concessions would not be an offence, and the Court advised that police action be avoided in such cases.

Change one fact throughout: the union is not registered. Section 17 is unavailable in every one of the four situations, because it protects an office-bearer or member of a registered Trade Union. The first situation, the ordinary agreement to strike, would then have to be met on general principles.

What this does NOT mean

It does not mean members of a union cannot be prosecuted. They can, for any offence they commit. The immunity is from punishment under section 120B(2) for the agreement.

It does not mean every agreement a union makes is protected. The agreement must be between the members and must be for the purpose of furthering an object specified in section 15.

It does not protect an agreement to commit an offence. The closing words exclude it expressly.

It does not make a gherao lawful. On Jay Engineering Works a gherao is invariably accompanied by wrongful restraint or wrongful confinement, and those are offences that the immunity does not touch.

It does not mean peaceful staying-in is criminal trespass. On the same authority it is not, unless the intention is to intimidate, insult or annoy the management or to commit another offence.

It does not protect an unregistered combination.

And it does not give the same protection as section 16. Section 16 is about civil suits and lists three grounds; section 17 is about one criminal charge. They are answers to different attacks.

Limits, criticism and amendments

The immunity is narrow and the criticism is that it is narrow at the point of maximum need. An agreement to strike is protected; the acts that make a strike effective are not, and the line between vigorous picketing and wrongful restraint is drawn by the police in the first instance. Jay Engineering Works is itself a case about police inaction under State circulars, which shows how much practical weight falls on executive discretion rather than on the section.

The measurement by section 15 has become less transparent. The 1926 Act printed the permitted objects in the section, so a reader could see at once what the immunity covered. The Code prescribes them by rules, which means the reach of a criminal immunity now depends on delegated legislation.

The reference to the Indian Penal Code 1860 is a drafting artefact of a Code passed in 2020. It will need attention, and until it gets it a student must quote it as it stands.

Against that, the Code improved one thing. The closing words, "unless such agreement is an agreement to commit an offence", state expressly what the Calcutta High Court had to reach by construction in 1967, so the limit is now on the face of the section.

Quick revision

• Section 17: no office-bearer or member of a registered Trade Union is liable to punishment under section 120B(2) of the Indian Penal Code (45 of 1860) in respect of any agreement made between the members for the purpose of furthering any object specified in section 15, unless the agreement is an agreement to commit an offence.
• The immunity attaches to the agreement, not to the acts, and it names one offence.
• Measured by section 15, whose objects are prescribed by rules, not printed.
• Jay Engineering Works, AIR 1968 Cal 407 (FB): gherao is a physical blockade by encirclement or forcible occupation, target a place or persons, invariably accompanied by wrongful restraint or wrongful confinement, object to compel submission without recourse to the machinery provided by law. The immunity is "of a limited nature"; there is nothing which, apart from immunity from criminal conspiracy, allows immunity from any criminal offence; wrongful restraint and confinement cannot be saved by the section; a combination cannot claim immunity if they conspire to commit an offence; workers may strike peacefully but have no right to wrongful restraint, wrongful confinement or criminal trespass, all cognizable. Staying in peacefully to appeal to management is not an offence.
• Rohtas Industries, AIR 1976 SC 425: the civil immunity is likewise not an immunity from all legal proceedings, and sabotage is no weapon in workers' legal armoury.
• Quote the IPC reference as the section prints it; the penal law is now the Bharatiya Nyaya Sanhita 2023 and the reference is read as one to the corresponding provision.

Test yourself

1. State section 17 and identify what it does not cover. No office-bearer or member of a registered Trade Union is liable to punishment under sub-section (2) of section 120B of the Indian Penal Code in respect of any agreement made between the members for the purpose of furthering any such object of the Trade Union as is specified in section 15, unless the agreement is an agreement to commit an offence. It does not cover an unregistered combination; an agreement with persons who are not members; an agreement for a purpose outside section 15; an agreement to commit an offence; or any substantive offence actually committed.

2. What is a gherao, and is it protected? On Jay Engineering Works Ltd. v. State of West Bengal, AIR 1968 Cal 407, a gherao is a physical blockade of a target, either by encirclement or forcible occupation, the target being a place or persons, usually the managerial or supervisory staff, the blockade being complete or partial and invariably accompanied by wrongful restraint or wrongful confinement and occasionally by assault, criminal trespass, mischief and unlawful assembly, its object being to compel those who control industry to submit without recourse to the machinery provided by law. It is not protected. The Court held that wrongful restraint and wrongful confinement cannot be saved by the immunity or indeed by any provision of the statute, since there is nothing which, apart from immunity from criminal conspiracy, allows immunity from any criminal offence.

3. Workers agree among themselves to confine the manager until their demands are met. Can they claim the immunity for the agreement itself? No. Section 17 excepts an agreement which is an agreement to commit an offence, and confining the manager is an offence. Jay Engineering Works puts the same point directly: a combination of industrial workers cannot claim immunity from being charged with criminal conspiracy if they conspire to commit an offence, and whether there was such a conspiracy is a question of fact.

4. Forty workers sit peacefully inside the factory refusing to leave until management hears them. Is that criminal trespass? Not on those facts. On Jay Engineering Works, factory workers have a right to enter the factory, and their staying in becomes criminal trespass when it appears that they intend to intimidate, insult or annoy the management or to commit any other offence. Staying in peacefully for the purpose of appealing to the management to grant some concessions would not be an offence, and the Court advised that police action be avoided in such cases.

5. Why does section 15 matter to section 17? Because section 17 measures the immunity by section 15: it protects an agreement made for the purpose of furthering "any such object of the Trade Union as is specified in section 15". An agreement to further an object within section 15 is protected from the conspiracy charge; an agreement to further something outside it is not. Since section 15 prescribes the objects by rules rather than printing them, the objects that govern the union's general fund also fix the reach of this criminal immunity.

6. Compare the immunity in section 16 with that in section 17.

Section 18 is the answer, and it is why MU's topic 1.4, which names only "Criminal and Civil", nonetheless requires three sections to answer properly.

Some words this chapter uses

Restraint of trade means a restriction on a person's freedom to carry on his trade, profession or business, or here to dispose of his labour.

Void means of no legal effect at all; the agreement never had force. Voidable means valid until one party elects to avoid it.

Notwithstanding anything contained in any other law for the time being in force is a non obstante clause. It means the section prevails over any other law that would otherwise apply, which here is principally section 27 of the Indian Contract Act 1872.

Valid and enforceable are different. A valid agreement is one the law recognises. An enforceable agreement is one a court will compel performance of, or award damages for breaking. Section 18 makes certain agreements valid without making all of them enforceable.

Entertain, in the proviso, means to receive and deal with a proceeding. A court that may not entertain a proceeding must decline it at the threshold.

Section 18: the main provision

Notwithstanding anything contained in any other law for the time being in force, an agreement between the members of a registered Trade Union shall not be void or voidable merely by reason of the fact that any of the objects of the agreement are in restraint of trade.

Take the four elements.

The non obstante clause. "Notwithstanding anything contained in any other law for the time being in force" is what lifts the agreement clear of section 27 of the Indian Contract Act 1872, and of anything else to the same effect.

The agreement must be between the members of a registered Trade Union. Two limits are in those words. It must be an agreement between the members, so an agreement between the union and an outsider is not within the section. And the union must be registered, which is the same condition as in sections 16 and 17.

"Shall not be void or voidable." Both words are used, so the agreement is neither a nullity nor liable to be set aside at the election of a party.

"Merely by reason of the fact that any of the objects of the agreement are in restraint of trade." The word merely does the same work here that "on the ground only" does in section 16. The section removes one ground of invalidity. It does not validate an agreement that is bad for some other reason: an agreement between members which was procured by fraud, or which is unlawful on some other ground, remains bad, and section 18 has nothing to say about it.

Note also "any of the objects". It is enough that one object of the agreement is in restraint of trade; the agreement does not fail because that object sits alongside others.

The proviso, and the distinction that carries the marks

Provided that nothing in this section shall enable any civil court to entertain any legal proceedings instituted for the purpose of enforcing or recovering damages for the breach of any agreement concerning the conditions on which any members of a Trade Union shall or shall not sell their goods, transact business, work, employ or be employed.

This is where most answers go wrong, and the error is always the same: treating the proviso as an exception that makes the agreement void again. It does not. Read what it actually says.

The proviso is about the COURT, not about the agreement. It says that nothing in the section shall enable any civil court to entertain proceedings of a certain kind. The agreement remains perfectly valid under the main provision; what the proviso withholds is the assistance of a civil court.

Which proceedings are withheld? Those instituted for the purpose of enforcing or recovering damages for the breach of an agreement concerning the conditions on which any members of a Trade Union shall or shall not:

• sell their goods;
• transact business;
• work;
• employ; or
• be employed.

So the position after section 18, stated in one sentence, is this: the union's rules are valid, and they are not enforced through the civil courts.

Why the law arranges it that way, because an examiner may ask. Two reasons, and both are worth a line.

The first is that the union does not need a court. A union enforces its rules by its own machinery: a fine or forfeiture under the conditions its rules must contain by section 7(g), or ultimately expulsion under its rules. Its sanctions are internal and immediate, and they work better than litigation ever could among members earning daily wages.

The second is that the law is unwilling to lend the machinery of the State to compel a person to work, or not to work, on particular terms. An order enforcing an agreement about the conditions on which a person shall or shall not work comes uncomfortably close to compelling labour, and a court will not make one. Validity is one thing; the coercive power of the court is another.

And notice the symmetry. The list in the proviso covers agreements about whether members shall work or be employed, and equally about whether they shall employ. It applies as much to a registered employers' association, which is a Trade Union under section 2(zl), as to a union of workers.

How section 18 fits with the proviso to section 2(zl)

These two provisions are designed to work together, and seeing the pair is what turns a competent answer into a complete one.

Section 18 lifts a union's internal agreements clear of the restraint of trade doctrine. Left alone, that could be exploited. Any two parties whose bargain contained a restriction on trade could describe themselves as a combination, register, and claim that section 18 saved a covenant that section 27 of the Contract Act would otherwise void.

The proviso to section 2(zl) closes that door, by providing that the provisions of Chapter III shall not affect three kinds of agreement: an agreement between partners as to their own business; an agreement between an employer and those employed by him as to such employment; and an agreement in consideration of the sale of the goodwill of a business or of instruction in any profession, trade or handicraft.

All three are ordinary commercial or employment bargains containing restrictions on trade. By putting them outside Chapter III, the Code makes sure that section 18 rescues the union's rules and nothing else. The validity of an employer's non-compete covenant is decided where it always was, by section 27 of the Indian Contract Act 1872, and the parties cannot improve their position by registering as a Trade Union.

The three immunities, side by side

MU's topic 1.4 is answered completely only by all three. This table is the answer in one place.

Read down the last row of that table and the theme of the whole of MU's topic 1.4 appears: every one of the three immunities is limited, and the limit is where the marks are.

A worked example

The facts. The Wada Packaging Workers' Union is registered. Rule 14 of its rules, adopted by the members, provides that no member shall accept work at a rate below the rate fixed by the general body, and that a member who does so shall pay a fine of five hundred rupees. Rule 15 provides that no member shall take up work at a unit where a strike called by the union is in progress.

Are rules 14 and 15 void as restraints of trade? No. Both restrict how the members may dispose of their labour, so section 27 of the Indian Contract Act 1872 would ordinarily bite. Section 18 provides that an agreement between the members of a registered Trade Union shall not be void or voidable merely by reason that any of its objects are in restraint of trade, and the non obstante clause lifts it clear of the Contract Act. The rules are valid.

A member, Nitin, takes work at a lower rate. The union sues him in the civil court for damages for breaking rule 14. The suit cannot be entertained. The proviso to section 18 provides that nothing in the section shall enable any civil court to entertain proceedings instituted for the purpose of enforcing, or recovering damages for the breach of, any agreement concerning the conditions on which members shall or shall not work or be employed. Rule 14 is exactly such an agreement.

So has the union any remedy at all? Yes, but not from the court. It has its own machinery. Section 7(g) requires the union's rules to provide the conditions under which a fine or forfeiture may be imposed on a member, and rule 14 provides for a fine of five hundred rupees. The union may impose it under its rules. If Nitin says the fine was imposed irregularly, his remedy is not a civil suit either: a dispute between a member and his union regarding the administration or management of the union goes to the Tribunal under section 22(1)(b), and section 22(2) bars every other civil court.

Change the parties. The Wada Packaging Owners' Association, an employers' body registered as a Trade Union under section 2(zl), agrees among its members that none will pay above a stated rate. Section 18 applies to it in the same way, because it speaks of an agreement between the members of a registered Trade Union, and the proviso covers agreements about the conditions on which members shall or shall not employ.

Now a different agreement altogether. Two brothers running a dyeing unit make a partnership deed by which each agrees not to carry on a competing business. They register themselves as a trade union and argue that section 18 saves the covenant from section 27 of the Contract Act. The argument fails at the door. The proviso to section 2(zl) provides that the provisions of Chapter III shall not affect any agreement between partners as to their own business. Chapter III does not reach the deed at all, so section 18 cannot be used on it, and its validity is decided by the ordinary law.

The same answer, for the same reason, if an employer tries to use section 18 to save a non-compete clause in a contract of employment, that being an agreement between an employer and those employed by him as to such employment, and equally if a seller of a business tries to use it on a goodwill covenant.

What this does NOT mean

It does not mean the agreement is unenforceable in every sense. It is valid, and the union enforces it internally through the fines, forfeitures and expulsion its rules provide for under section 7(g). What the proviso withholds is the civil court.

It does not mean the proviso makes the agreement void. Validity and enforceability are different questions, and the section answers them differently on purpose.

It does not save an agreement bad on some other ground. The word is merely: section 18 removes one ground of invalidity and no other.

It does not apply to an unregistered combination. Like sections 16 and 17, it speaks of a registered Trade Union.

It does not apply to agreements with outsiders. It covers an agreement between the members.

It does not rescue ordinary commercial covenants. The proviso to section 2(zl) keeps partnership agreements, employment agreements and goodwill covenants outside Chapter III entirely.

Limits, criticism and amendments

The section is a re-enactment. It reproduces the substance of section 19 of the Trade Unions Act 1926, repealed on 21 November 2025, so the position has been the same for a century and there is little Indian authority on it, which is itself a sign that it works: a provision that removes a ground of invalidity is rarely litigated, because nobody bothers to take a point that is bound to fail.

The proviso is criticised as leaving the union without a remedy. That criticism is overstated once the union's own machinery under section 7(g) and section 22 is taken into account, but it has force where a member simply leaves the union after breaking the rule, since expulsion is then no sanction at all.

The section is silent about the union's agreements with the employer. A settlement with an employer is not an agreement "between the members", so section 18 does not touch it; settlements and awards are dealt with separately, in sections 57 and 58, and belong to Module II.

And the drafting of the proviso is dense. Five verbs, "sell their goods, transact business, work, employ or be employed", carry the whole of its scope, and a reader who skims them will not notice that the section covers employers' associations as squarely as it covers unions of workers.

Quick revision

• Section 18, main provision: notwithstanding any other law, an agreement between the members of a registered Trade Union shall not be void or voidable merely by reason that any of its objects are in restraint of trade.
• The non obstante clause lifts it clear of section 27 of the Indian Contract Act 1872.
• The proviso withholds the civil court, not the validity: no civil court may entertain proceedings to enforce, or recover damages for the breach of, an agreement concerning the conditions on which members shall or shall not sell their goods, transact business, work, employ or be employed.
• Valid but not enforceable through the courts. The union enforces internally: fines and forfeitures under section 7(g), and a dispute about administration or management goes to the Tribunal under section 22(1)(b), with civil courts barred by section 22(2).
• The proviso to section 2(zl) keeps three ordinary bargains outside Chapter III entirely: partners' agreements as to their own business; agreements between an employer and those employed by him; and agreements in consideration of the sale of goodwill or of instruction in a profession, trade or handicraft. So section 18 rescues the union's rules and nothing else.
• All three immunities require a registered union, and all three are limited: "on the ground only" in 16, "unless an agreement to commit an offence" in 17, "merely by reason" plus the proviso in 18.

Test yourself

1. What problem does section 18 solve? That a trade union's rules are, on their face, agreements in restraint of trade. The members agree not to work below a rate, not to accept unapproved terms, and to stop work when the union decides, each of which restrains their freedom to dispose of their labour. Under section 27 of the Indian Contract Act 1872 such agreements would be void, which would leave the union unable to hold its own members to anything, dissolving the combination from within. Section 18 provides that such an agreement between the members of a registered Trade Union shall not be void or voidable merely because any of its objects are in restraint of trade.

2. State the proviso and explain precisely what it takes away. The proviso is that nothing in the section shall enable any civil court to entertain any legal proceedings instituted for the purpose of enforcing or recovering damages for the breach of any agreement concerning the conditions on which any members of a Trade Union shall or shall not sell their goods, transact business, work, employ or be employed. It takes away the assistance of the civil court, not the validity of the agreement. The agreement remains valid under the main provision; what the union cannot do is sue on it.

3. A member breaks a union rule about accepting work below the agreed rate. What can the union do? It cannot sue him in a civil court, because the proviso to section 18 prevents a civil court from entertaining proceedings to enforce, or recover damages for the breach of, an agreement concerning the conditions on which members shall or shall not work. It can use its own machinery: section 7(g) requires the union's rules to provide the conditions under which a fine or forfeiture may be imposed on a member, and the rules may also provide for expulsion. If the member disputes the way the union has proceeded, that is a dispute regarding the administration or management of the union, which goes to the Tribunal under section 22(1)(b), civil courts being barred by section 22(2).

4. Can an employer use section 18 to save a non-compete clause in a contract of employment? No. The proviso to section 2(zl) provides that the provisions of Chapter III shall not affect any agreement between an employer and those employed by him as to such employment. Chapter III, and therefore section 18, does not reach such an agreement at all, and its validity falls to be decided by the ordinary law, principally section 27 of the Indian Contract Act 1872. The same answer applies to a partnership agreement as to the partners' own business and to a covenant given in consideration of the sale of goodwill.

5. Why is it wrong to say the proviso makes the agreement void? Because validity and enforceability are distinct. The main provision makes the agreement valid by removing one ground of invalidity. The proviso is addressed to the court, saying that nothing in the section shall enable a civil court to entertain certain proceedings. An agreement that a court will not enforce is not thereby a nullity, and the union's internal sanctions operate on it perfectly well.

6. MU's topic says "Immunities in trade disputes: Criminal and Civil". How many sections does a complete answer need, and why? Three. Section 17 answers the criminal impediment, the offence of conspiracy. Section 16 answers the civil impediment in tort, the suit for inducing a breach of the contract of employment and for interference with trade or business. But there was a third impediment, and it was neither criminal nor tortious: the rule that an agreement in restraint of trade is void, which made the union's own rules unenforceable and so destroyed it from within. Section 18 answers that, and an answer that gives only two immunities has left out the one that attacked the union internally.

Some words this chapter uses

Systematic activity means activity carried on in an organised, regular way, as opposed to something casual or isolated.

Sovereign functions are the inalienable functions of the State that no private person could perform: the making of law, the administration of justice, defence, the police power. The expression is used narrowly.

Eleemosynary means dependent on or supported by charity. It is the word the Court used for the narrow exception it allowed.

Dominant nature test is the rule for an undertaking that carries on several activities at once: you ask what its predominant activity is rather than dissecting it department by department.

Prima facie means at first sight, on the face of it, unless something displaces it.

The Code's definition, taken apart

Section 2(p) has three parts: a positive test, two things that do not matter, and four exclusions.

The positive test, which is the triple test in statutory words

An industry is any systematic activity:

• carried on by co-operation between an employer and worker, whether the worker is employed by the employer directly or by or through any agency, including a contractor;
• for the production, supply or distribution of goods or services;
• with a view to satisfy human wants or wishes, not being wants or wishes which are merely spiritual or religious in nature.

Notice the words "or by or through any agency, including a contractor". Contract labour does not take an activity out of the definition. That closes an avoidance route that would otherwise be obvious.

The two things that do not matter

The activity is an industry whether or not:

• any capital has been invested for the purpose of carrying it on; or
• it is carried on with a motive to make any gain or profit.

So a loss-making undertaking is an industry, and so is one that never intended to make money. A statutory board, a municipal water supply, a State transport corporation: all are industries if the positive test is satisfied. This is the single most useful sentence in the definition for a student, because the employer's instinctive argument is always "we are not a business".

The four exclusions, and this is where the Code departs from the case law

The definition does not include:

• (i) institutions owned or managed by organisations wholly or substantially engaged in any charitable, social or philanthropic service;
• (ii) any activity of the appropriate Government relatable to the sovereign functions of the appropriate Government, including all the activities carried on by the departments of the Central Government dealing with defence research, atomic energy and space;
• (iii) any domestic service;
• (iv) any other activity as may be notified by the Central Government.

Exclusion (i) is the important one and it reverses part of Bangalore Water Supply, as the next section explains.

Exclusion (ii) is narrower than it looks and wider than the case law. It is narrower because it exempts activity "relatable to the sovereign functions", which is the old language, so a Government undertaking that is simply carrying on a business is not saved. It is wider because it names three departments outright, defence research, atomic energy and space, and takes all their activities out, which the case law would not have done for severable industrial units inside them.

Exclusion (iv) is a delegated power. The Central Government may notify further exclusions, so the boundary of this definition can move without an amendment to the Code.

The case the definition is built on

Bangalore Water-Supply and Sewerage Board v. R. Rajappa, AIR 1978 SC 548, (1978) 2 SCC 213, a Bench of seven Judges: Beg CJ, Chandrachud, Bhagwati, Krishna Iyer, Jaswant Singh, Tulzapurkar and Desai JJ.

Facts. The Board, a statutory body supplying water and sewerage services in Bangalore, imposed penalties on some of its employees, who raised a dispute. The Board contended that it was not an "industry" within section 2(j) of the Industrial Disputes Act 1947, so that the Act did not apply to it at all. The question went to seven Judges because the Court's own earlier decisions on hospitals, universities, clubs and professional firms could not be reconciled with one another.

Held. The Board was an industry, and the Court laid down the tests that have governed ever since.

The triple test. Where there is (i) systematic activity, (ii) organised by cooperation between employer and employee, (iii) for the production or distribution of goods and services calculated to satisfy human wants and wishes, not spiritual or religious, there is prima facie an industry.

Profit is irrelevant. The absence of a profit motive or gainful objective does not matter, whether the venture is in the public, joint, private or any other sector.

The focus is functional. The decisive test is the nature of the activity, with special emphasis on employer-employee relations. An organisation that is a trade or business does not cease to be one because philanthropy animates the undertaking.

The consequences the Court drew expressly. Professions, clubs, educational institutions, cooperatives, research institutes, charitable projects and other kindred adventures cannot be exempted if they satisfy the triple test. A narrow exception survives for genuinely eleemosynary ventures: where people employ themselves free or for small honoraria, mainly drawn by sharing in the purpose, such as lawyers running a free legal services clinic or doctors serving in their spare hours in a free medical centre, and those who serve are not engaged for remuneration or on a master-and-servant basis, the institution is not an industry even if stray servants are hired.

The dominant nature test. Where a complex of activities is carried on, some qualifying for exemption and some not, the predominant nature of the services and the integrated nature of the departments is the true test. The whole undertaking will be an industry, although those who are not workmen by definition do not benefit by the status.

Sovereign functions. Only sovereign functions strictly understood are exempt, and not the welfare activities or economic adventures undertaken by Government or statutory bodies. And even in a department discharging sovereign functions, units which are industries and are substantially severable are covered.

What it overruled. Safdarjung Hospital, Dhanrajgiri Hospital, National Union of Commercial Employees v. M.R. Meher, University of Delhi, Madras Gymkhana Club and Cricket Club of India were overruled. Hospital Mazdoor Sabha was approved.

Why it matters. Section 2(p) of the Code is largely this judgment turned into a statute, and reading the two beside each other is how a student sees what survived and what did not.

What the Code kept, and what it changed

This table is the answer to any question that asks how far Bangalore Water Supply still governs.

The single change to remember is the charitable one. A hospital run by a charitable trust, or a school run by a philanthropic society, was an industry on Bangalore Water Supply and is not one under section 2(p), provided the organisation owning or managing it is wholly or substantially engaged in charitable, social or philanthropic service.

Section 2(r): the dominant nature test, codified

Bangalore Water Supply's dominant nature test does not appear in section 2(p). It appears in the definition of "industrial establishment or undertaking" in section 2(r), which means an establishment or undertaking in which any industry is carried on, with a proviso for the mixed case:

Where several activities are carried on and only one or some of them are an industry, then:

• (i) the severable unit rule. If any unit carrying on an activity which is an industry is severable from the other units which are not carrying on or aiding such activity, that unit is deemed to be a separate industrial establishment.
• (ii) the predominant activity rule. If the predominant activity, or each of the predominant activities, is an industry, and the other activities are not severable from it and are for the purpose of carrying on or aiding it, the entire establishment or undertaking, or the unit, is deemed to be an industrial establishment.

So the two limbs point in opposite directions and that is deliberate. Where the industrial part can be cut out, it is cut out and treated on its own. Where it cannot, the whole thing goes with the predominant activity.

The case that shows the definition still has an edge

State of U.P. v. Jai Bir Singh, (2005) 5 SCC 1, a Bench of five Judges.

Facts. The question was whether a State's social forestry department, a welfare scheme carried out by Government, was an industry. The Court found that the width Bangalore Water Supply had given to section 2(j) made almost every organised activity an industry, and that Parliament had tried to narrow the definition by the Industrial Disputes (Amendment) Act 1982, which substituted a new section 2(j) with express exclusions, but had never brought that amendment into force.

Held. The Court did not decide the point. It held that the Court must reconsider where the line should be drawn and what limitations should reasonably be implied in the wide words of section 2(j), observing that both the legislature and the executive were silent and had kept an important amended provision dormant on the statute book for twenty-three years, and that the pressing demands of the competing sectors of employers and employees, and the helplessness of the legislature and the executive in bringing the Amendment Act into force, compelled the reference. It directed the cases to be placed before the Chief Justice of India for constituting a suitable larger Bench for the reconsideration of Bangalore Water Supply.

Why it matters, and how to use it. It lets a student state the position honestly rather than pretending the law was settled: the leading case stood referred for reconsideration, and a legislative attempt to narrow the definition sat un-commenced for a generation. What the Code has now done is what the 1982 amendment tried to do, by writing a fresh definition with express exclusions. That is the closing sentence of a good essay on this topic.

A boundary case worth carrying from Module I. In Tamil Nad Non-Gazetted Government Officers' Union v. Registrar of Trade Unions, AIR 1962 Mad 234, worked in [What a Trade Union Is: The Definition], the Madras High Court dismissed the union's appeal and held that the core of the civil services is integrated with the inalienable and regal functions of government, that those activities cannot be an industry and that such civil servants cannot be workmen, while quasi-government agencies and subsidised undertakings that are industrial in character stand on a different footing. That is the same line section 2(p)'s sovereign-functions exclusion draws.

A worked example

The facts. Consider five undertakings in Thane district.

(a) The municipal water supply department, which lays pipes, treats water and bills consumers, and makes no profit. An industry. There is systematic activity, cooperation between employer and workers, and the supply of a service to satisfy human wants. Section 2(p) says in terms that it does not matter that no capital was invested or that there is no motive to make gain or profit, and this is the very activity Bangalore Water Supply was about.

(b) A hospital run by a trust wholly engaged in charitable service, charging nominal fees. NOT an industry, on the Code. Exclusion (i) in section 2(p) takes out institutions owned or managed by organisations wholly or substantially engaged in charitable, social or philanthropic service. Note carefully that on Bangalore Water Supply the answer would have been the opposite, because that case held philanthropy animating an undertaking does not exempt it and expressly refused to exempt charitable projects. This is where the Code departs from the case, and an answer that gets it right will say so.

(c) A private hospital run for profit. An industry, and comfortably so.

(d) A cook and a driver employed in a private household. NOT an industry. Exclusion (iii), domestic service.

(e) A Government-owned factory making machine tools, inside a department that also runs a defence research laboratory. Take the two parts separately. The defence research activity is excluded outright by exclusion (ii), which takes out all the activities of Central Government departments dealing with defence research, atomic energy and space. The machine tool factory is not a sovereign function; it is an economic adventure, and Bangalore Water Supply says such adventures of Government or statutory bodies are not exempt. Whether it is a separate industrial establishment is then answered by the proviso to section 2(r): if the unit is severable from the units not carrying on or aiding an industry, it is deemed a separate industrial establishment.

Now a mixed case. A company runs a manufacturing plant and, on the same premises, a small dispensary for its workers. The dispensary standing alone might be argued to be something else. Under the second limb of the proviso to section 2(r), the predominant activity is manufacture, which is an industry, and the dispensary is not severable from it and exists to aid it, so the entire establishment is an industrial establishment.

What this does NOT mean

It does not mean profit is required. The definition says the opposite, twice over: neither invested capital nor a gain or profit motive is necessary.

It does not mean a Government body is outside. Only activity relatable to sovereign functions is excluded, plus the three named Central departments. A State transport undertaking or a municipal water supply is an industry.

It does not mean Bangalore Water Supply is dead. Its triple test is what section 2(p) enacts. What it does mean is that the case can no longer be cited for the proposition that a charitable institution is an industry, because the Code excludes it.

It does not mean a temple or a religious body is automatically outside. The exclusion in the positive test is of wants or wishes which are merely spiritual or religious. Bangalore Water Supply made the point vividly: making prasad or food on a large scale is a material service.

It does not mean the dominant nature test has gone. It has moved: it is now in the proviso to section 2(r), in two limbs.

It does not mean the boundary is fixed. Exclusion (iv) lets the Central Government notify further exclusions.

Limits, criticism and amendments

The charitable exclusion is the most criticised feature of section 2(p), and the criticism is the one Bangalore Water Supply made in advance. A hospital or school does not become a kinder employer because its owner is a trust, and the worker who cleans its wards does the same work for the same wage as one in a private hospital across the road. The Court's answer in 1978 was that the focus is functional and that philanthropy animating an undertaking is irrelevant to the position of the people it employs. Parliament has now decided otherwise.

Naming three Central departments is unusual drafting. Defence research, atomic energy and space are taken out entirely, which removes even the severable industrial units inside them that Bangalore Water Supply would have covered.

The notification power in exclusion (iv) is a standing criticism. The scope of the whole Code can be narrowed by executive notification, without Parliament.

And the long silence is part of the story. Parliament passed an amendment narrowing "industry" in 1982 and never commenced it; the Supreme Court complained about exactly that in Jai Bir Singh in 2005 and referred its own leading case for reconsideration; and the definition was finally settled by a new Code in 2020, which came into force in 2025. A student who tells that story in three sentences has answered the "conceptual analysis" the syllabus asks for.

Quick revision

• Section 2(p): systematic activity, by co-operation between employer and worker (including through a contractor), for the production, supply or distribution of goods or services to satisfy human wants or wishes not merely spiritual or religious; whether or not capital invested; whether or not carried on for gain or profit.
• Four exclusions: charitable, social or philanthropic institutions; activity relatable to sovereign functions, including all activities of the Central departments dealing with defence research, atomic energy and space; domestic service; anything the Central Government notifies.
• Bangalore Water Supply, AIR 1978 SC 548, seven Judges: the triple test; profit irrelevant; focus functional; philanthropy does not exempt; professions, clubs, educational institutions, cooperatives, research institutes and charitable projects are in, subject to a narrow eleemosynary exception; the dominant nature test; only sovereign functions strictly understood are out, and severable industrial units within them are in. Overruled six cases; approved Hospital Mazdoor Sabha.
• The Code reverses it on charity and on domestic service.
• Section 2(r) proviso: severable industrial unit is a separate industrial establishment; otherwise the predominant activity carries the whole undertaking.
• Jai Bir Singh, (2005) 5 SCC 1: referred Bangalore Water Supply to a larger Bench; the 1982 amendment narrowing the definition was kept dormant for twenty-three years.

Test yourself

1. Define "industry" under the Code and state its exclusions. Section 2(p) defines it as any systematic activity carried on by co-operation between an employer and worker, whether employed directly or through any agency including a contractor, for the production, supply or distribution of goods or services with a view to satisfy human wants or wishes, not being wants or wishes merely spiritual or religious in nature, whether or not capital has been invested and whether or not the activity is carried on with a motive to make gain or profit. It excludes institutions owned or managed by organisations wholly or substantially engaged in charitable, social or philanthropic service; activity of the appropriate Government relatable to its sovereign functions, including all activities of the Central Government departments dealing with defence research, atomic energy and space; domestic service; and any other activity notified by the Central Government.

2. State the triple test and the dominant nature test. On Bangalore Water-Supply and Sewerage Board v. R. Rajappa, AIR 1978 SC 548, the triple test is that where there is systematic activity, organised by cooperation between employer and employee, for the production or distribution of goods and services calculated to satisfy human wants and wishes, not spiritual or religious, there is prima facie an industry; and the absence of a profit motive is irrelevant in any sector. The dominant nature test is that where a complex of activities is carried on, some qualifying for exemption and some not, the predominant nature of the services and the integrated nature of the departments is the true test, so that the whole undertaking is an industry although those who are not workmen do not benefit by the status.

3. A hospital run by a wholly charitable trust dismisses a ward attendant. Is the Code available to him? No, on the Code as it stands. Section 2(p) expressly excludes institutions owned or managed by organisations wholly or substantially engaged in any charitable, social or philanthropic service, so the hospital is not an industry, the attendant is not a worker employed in an industry, and the Code's machinery does not apply. The answer would have been the opposite under Bangalore Water Supply, which held that an organisation does not cease to be a trade or business because philanthropy animates it and expressly refused to exempt charitable projects. This is the clearest instance of the Code departing from the case law by statute.

4. Does it matter that an undertaking makes no profit, or that no capital was invested in it? No. Section 2(p) says an activity is an industry whether or not any capital has been invested for the purpose of carrying it on and whether or not it is carried on with a motive to make any gain or profit. Bangalore Water Supply had already held the absence of a profit motive or gainful objective irrelevant, in the public, joint, private or any other sector.

5. What happened in Jai Bir Singh, and why does it matter now? In State of U.P. v. Jai Bir Singh, (2005) 5 SCC 1, a Bench of five Judges declined to decide whether a social forestry department was an industry and instead referred Bangalore Water Supply to a larger Bench for reconsideration, observing that Parliament had substituted a narrower definition of industry by the Industrial Disputes (Amendment) Act 1982 and had kept it dormant on the statute book for twenty-three years, and that the helplessness of the legislature and executive compelled the reference. It matters because it dates the dissatisfaction with the wide judicial definition and explains why section 2(p) of the Code now carries express exclusions: the Code has done by a fresh definition what the 1982 amendment failed to do.

6. An establishment runs a printing press and a research wing that is not an industry. Which provision decides the position, and how? The proviso to section 2(r), which defines "industrial establishment or undertaking". If the unit carrying on the industry is severable from the units that neither carry on nor aid such activity, that unit is deemed to be a separate industrial establishment. If instead the predominant activity is an industry and the other activities are not severable from it and exist to carry on or aid it, the entire establishment or undertaking, or the unit, is deemed to be an industrial establishment. That proviso is where Bangalore Water Supply's dominant nature test now lives.

Conditions of labour are the circumstances in which work is done: hours, safety, shifts, amenities.

Espousal means the taking up of an individual's cause by a body of workmen or by a union, so that his grievance becomes their dispute.

Direct or substantial interest is the test Dimakuchi laid down for whether a dispute about a particular person can be an industrial dispute.

Trade Union dispute, section 2(zm), is a different animal: a dispute relating to a Trade Union between two or more Trade Unions, or between members of a Trade Union among themselves. It is not an industrial dispute and it goes elsewhere.

The definition, taken apart

The first limb: who is quarrelling, and about what

There must be a dispute or difference, and it must be between one of three pairs:

• employers and employers;
• employers and workers;
• workers and workers.

And it must be connected with:

• the employment of any person; or
• the non-employment of any person; or
• the terms of employment of any person; or
• the conditions of labour of any person.

Two features of that structure are examinable.

The parties and the subject are separate questions. The dispute must be between the listed parties, but the person about whom it is raised need not be a party to it at all. That is what makes espousal possible: the workmen quarrel with the employer about somebody else's employment.

A dispute between workers and workers counts. A demarcation dispute between two groups of workers about which of them is entitled to do a particular job is an industrial dispute even though the employer is not on either side.

The second limb: the individual dispute

The definition includes any dispute or difference between an individual worker and an employer connected with, or arising out of, the discharge, dismissal, retrenchment or termination of such worker.

This limb is new to the definition and it matters a great deal. Under the repealed Act the same result was reached by a separate section, section 2A, inserted years after the Act was passed precisely because the courts had held that an individual's dispute was not an industrial dispute unless a body of workmen or a union espoused it. The Code has folded that provision into the definition itself.

What follows practically. A dismissed worker no longer needs anybody to take up his cause. He is within the definition on his own, provided his dispute is about one of the four listed events: discharge, dismissal, retrenchment or termination.

And notice the limit of the second limb. It covers only those four events. An individual worker's dispute about, say, his wage rate or his transfer is not within the second limb, and has to come within the first, which in practice means it must be espoused.

The case that reads "any person" down

Workmen of Dimakuchi Tea Estate v. Management of Dimakuchi Tea Estate, AIR 1958 SC 353, (1958) SCR 1156, Das CJ and S.K. Das J, Sarkar J dissenting.

Facts. Dr. K.P. Banerjee, an Assistant Medical Officer at the Dimakuchi Tea Estate, was dismissed unheard with a month's salary in lieu of notice. He accepted the payment and left the garden. The workmen of the estate espoused his cause, and the Government referred the dispute for adjudication under section 10 of the Act. Both the Tribunal and the Appellate Tribunal held that, Dr. Banerjee not being a workman within the Act, the dispute was not an industrial dispute within section 2(k).

Held. The expression "any person" in section 2(k) cannot be given its ordinary wide meaning and must be read and understood in the context of the Act and the object the legislature had in view; nor can it be equated with the word "workman" or "employee". Two tests follow:

• the dispute must be a real dispute, capable of being settled by relief given by one party to the other; and
• the person in respect of whom the dispute is raised must be one in whose employment, non-employment, terms of employment or conditions of labour the parties to the dispute have a direct or substantial interest.

Dr. Banerjee not being a workman, the workmen had no such interest in him, and the dispute was not an industrial dispute.

Sarkar J dissented, and this book records that rather than presenting the decision as unanimous.

Why it matters. It is the leading authority on the outer edge of the definition, and it supplies the phrase every answer turns on. It also shows the method: where a statutory definition is drafted so widely that it defeats the statute's own purpose, the court reads it in the light of that purpose rather than literally.

How to cite it now. It was decided under section 2(k) of the Industrial Disputes Act 1947, repealed by section 104(1)(c) of the Code on 21 November 2025. Section 2(q) of the Code reproduces the same governing words, including "of any person", so the reading down survives unchanged. What the Code adds is the second limb, which does not disturb the case: Dr. Banerjee was not a worker, and the second limb speaks of a dispute between an individual worker and an employer.

Distinctions

A worked example

The facts. At a packaging plant in Wada, five things happen in one month.

One: the union demands a wage increase for all 1,200 workers and the employer refuses. An industrial dispute on the first limb. It is a dispute between an employer and workers connected with the terms of employment.

Two: Meera, a worker, is dismissed for alleged misconduct. No union takes up her case. An industrial dispute on the second limb, because it is a dispute between an individual worker and an employer connected with her dismissal. She does not need espousal. Under the repealed Act she would have needed section 2A to say the same thing.

Three: Rakesh, a worker, is transferred to another shift and objects. No union takes up his case. Not within the second limb, which covers only discharge, dismissal, retrenchment and termination. He must bring himself within the first limb, and on Dimakuchi the question will be whether the parties to the dispute have a direct or substantial interest in his terms of employment. In practice that means the union or a body of workers must espouse his case, and if they do, the dispute is industrial because fellow workers plainly have a direct interest in the shift arrangements of their colleague.

Four: the workmen raise a dispute about the dismissal of the plant's General Manager, who is employed mainly in a managerial capacity. On Dimakuchi this fails. He is not a worker, being excluded by section 2(zr)(iii), and the workmen have no direct or substantial interest in his employment. The words "any person" cannot be read literally.

Five: the fitters and the electricians quarrel about which of them is entitled to do a particular repair. An industrial dispute on the first limb: it is a dispute between workers and workers connected with the terms of employment or the conditions of labour. The employer is not on either side and that does not matter.

Now a sixth, to catch the other error. Two rival unions each claim to be entitled to represent the plant's workers and one sues the other. That is not an industrial dispute. It is a Trade Union dispute under section 2(zm), an application lies to the Tribunal under section 22(1)(a), and section 22(2) bars every other civil court.

What this does NOT mean

It does not mean any dispute in a workplace is an industrial dispute. It must be between the listed parties and connected with employment, non-employment, terms of employment or conditions of labour, and on Dimakuchi it must be a real dispute capable of being settled by relief given by one party to the other.

It does not mean "any person" means anybody. Dimakuchi reads the words down, and the test is direct or substantial interest.

It does not mean an individual worker can always go alone. The second limb covers four events only. Outside them, the first limb applies with all its requirements.

It does not mean a Trade Union dispute is an industrial dispute. They are separately defined and go to different places.

It does not mean the person concerned must be a worker in every case. The definition speaks of the employment of "any person", and Dimakuchi requires only that the parties have a direct or substantial interest in that person's employment. What Dimakuchi decided is that on those facts, a non-workman's dismissal, they did not.

Limits, criticism and amendments

Folding section 2A into the definition is a real simplification, and it removes a trap that used to catch dismissed workers who could find nobody to espouse their cause.

But the second limb is narrow. Confining it to discharge, dismissal, retrenchment and termination leaves every other individual grievance dependent on espousal, which is precisely the difficulty an unorganised worker has. The Code's own partial answer is the Grievance Redressal Committee in section 4, which an individual can approach.

"Any person" is still in the section, so the reading down in Dimakuchi is still needed. Parliament could have written the test into the definition and did not.

And Dimakuchi is not a unanimous decision. Sarkar J dissented, and the majority's method, reading plain words down by reference to the object of the Act, is the kind of reasoning that is always open to argument.

Quick revision

• Section 2(q), first limb: a dispute or difference between employers and employers, employers and workers, or workers and workers, connected with the employment, non-employment, terms of employment or conditions of labour of any person.
• Second limb: includes a dispute between an individual worker and an employer connected with or arising out of his discharge, dismissal, retrenchment or termination. This is section 2A of the repealed Act, folded in, and it removes the need for espousal in those four cases.
• Dimakuchi, AIR 1958 SC 353: "any person" cannot bear its ordinary meaning and is not the same as "workman" or "employee". Two tests: a real dispute capable of being settled by relief given by one party to the other; and the parties must have a direct or substantial interest in that person's employment. Dr. Banerjee, an Assistant Medical Officer, was not a workman, so the dispute failed. Sarkar J dissented.
• Distinguish a Trade Union dispute, section 2(zm), which goes to the Tribunal under section 22 with civil courts barred by section 22(2).

Test yourself

1. Define "industrial dispute" under the Code. Section 2(q) defines it as any dispute or difference between employers and employers, or between employers and workers, or between workers and workers, which is connected with the employment or non-employment or the terms of employment or with the conditions of labour of any person, and as including any dispute or difference between an individual worker and an employer connected with, or arising out of, the discharge, dismissal, retrenchment or termination of such worker.

2. What is the significance of the second limb? It makes an individual worker's dispute about his own discharge, dismissal, retrenchment or termination an industrial dispute in its own right, without any need for a union or a body of workers to espouse his cause. Under the repealed Industrial Disputes Act 1947 that result was achieved by a separate provision, section 2A, which had to be inserted after the courts held that an individual dispute was not an industrial dispute unless espoused. The Code has folded that provision into the definition. Its limit is that it covers only those four events.

3. How have the courts read the words "any person"? In Workmen of Dimakuchi Tea Estate v. Management of Dimakuchi Tea Estate, AIR 1958 SC 353, the Supreme Court held that the expression cannot be given its ordinary meaning and must be read in the context of the Act and the object the legislature had in view, and that it cannot be equated with "workman" or "employee". Two tests follow: the dispute must be a real dispute, capable of being settled by relief given by one party to the other; and the person in respect of whom it is raised must be one in whose employment, non-employment, terms of employment or conditions of labour the parties to the dispute have a direct or substantial interest. Sarkar J dissented.

4. The workmen of a factory raise a dispute about the dismissal of its General Manager. Advise. The dispute is unlikely to be an industrial dispute. A person employed mainly in a managerial or administrative capacity is excluded from the definition of "worker" by section 2(zr)(iii), so the second limb of section 2(q), which requires an individual worker, does not apply. Under the first limb the question is the Dimakuchi test, and on facts materially like these the Supreme Court held that the workmen had no direct or substantial interest in the employment of a non-workman, so the dispute was not an industrial dispute.

5. Two groups of workers quarrel about which of them may do a particular job. Is that an industrial dispute? Yes. Section 2(q) expressly covers a dispute or difference between workers and workers connected with the terms of employment or the conditions of labour of any person. The employer need not be on either side.

6. Distinguish an industrial dispute from a Trade Union dispute. An industrial dispute, section 2(q), is a dispute connected with employment, non-employment, terms of employment or conditions of labour, between employers and employers, employers and workers, or workers and workers, or between an individual worker and an employer on the four listed events; it travels the conciliation and adjudication machinery. A Trade Union dispute, section 2(zm), is a dispute relating to a Trade Union arising between two or more Trade Unions or between the members of a Trade Union among themselves, typically about registration, administration, management or the election of office-bearers; an application lies to the Tribunal under section 22(1), and section 22(2) provides that no civil court other than the Tribunal may entertain any suit or other proceedings in relation to it.

Some words this chapter uses

Hire or reward means payment, in whatever form. It excludes a volunteer.

Express or implied terms means it does not matter whether there is a written contract. A person taken on without any document may still be a worker.

Supervisory capacity means work whose substance is overseeing the work of others, as distinct from doing the work oneself.

Managerial or administrative capacity means work whose substance is running the business or a part of it: hiring, dismissing, sanctioning, deciding.

Apprentice, for this definition, means an apprentice as defined under clause (aa) of section 2 of the Apprentices Act 1961.

Independent contractor is a person who agrees to produce a result but is not subject to the employer's control as to the manner of doing the work. He is not a worker.

Fixed term employment, section 2(o), is engagement on a written contract for a fixed period, with the three protections the definition itself attaches.

Section 2(zr): the definition of 'worker'

The positive part

A worker is any person employed in any industry to do any:

• manual;
• unskilled;
• skilled;
• technical;
• operational;
• clerical; or
• supervisory

work for hire or reward, whether the terms of employment be express or implied.

Notice that supervisory work is in the list. A supervisor is a worker, and is taken out again only by the wage ceiling in exclusion (iv). That is a two-stage structure and students collapse it.

Who is expressly included

• working journalists, as defined in section 2(f) of the Working Journalists and other Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act 1955;
• sales promotion employees, as defined in section 2(d) of the Sales Promotion Employees (Conditions of Service) Act 1976;
• for the purposes of any proceeding under the Code in relation to an industrial dispute, any person who has been dismissed, discharged or retrenched or otherwise terminated in connection with, or as a consequence of, that dispute, or whose dismissal, discharge or retrenchment has led to that dispute.

That third inclusion is indispensable and it is worth pausing on. Without it, an employer could defeat every dismissal case by a circular argument: you are no longer employed, so you are not a worker, so you cannot raise an industrial dispute about the dismissal that ended your employment. The inclusion cuts that off. It is also why the second limb of section 2(q), the individual dispute, works at all.

Who is excluded

• (i) a person subject to the Air Force Act 1950, the Army Act 1950, or the Navy Act 1957;
• (ii) a person employed in the police service or as an officer or other employee of a prison;
• (iii) a person employed mainly in a managerial or administrative capacity;
• (iv) a person employed in a supervisory capacity drawing wages exceeding eighteen thousand rupees per month, or such amount as the Central Government may notify from time to time.

Exclusion (iii) turns on the word "mainly". A person who does some administrative work among other things is not excluded; the question is what the substance of his employment is.

Exclusion (iv) is the one with a number in it, so it is the one that gets asked. Two conditions must both be satisfied: the capacity must be supervisory, and the wages must exceed eighteen thousand rupees a month. A supervisor paid less is a worker. A person doing manual or clerical work is a worker however much he is paid, because exclusion (iv) applies only to supervisory capacity.

And the figure moves. The Central Government may notify a different amount from time to time, so a student should quote eighteen thousand as the figure in the section and add that it is subject to notification.

The proviso: a different meaning for Chapter III

Provided that for the purposes of Chapter III, "worker" (a) means all persons employed in trade or industry; and (b) includes the worker as defined in clause (m) of section 2 of the Unorganised Workers' Social Security Act, 2008.

This proviso is easy to miss and it changes Module I. Chapter III is the Trade Unions chapter. For that chapter only, "worker" is not the narrow definition above: it means all persons employed in trade or industry, and it takes in unorganised workers as defined by the 2008 Act.

Two consequences follow, and both are worth stating in an answer. The membership arithmetic in section 6, ten per cent. of the workers or one hundred whichever is less, is calculated on that wider class. And a person excluded from the narrow definition, for example a well-paid supervisor, may nonetheless be a member of a registered Trade Union.

Section 2(l): 'employee', and why it is wider

"employee" means any person (other than an apprentice engaged under the Apprentices Act, 1961) employed by an industrial establishment to do any skilled, semi-skilled or unskilled, manual, operational, supervisory, managerial, administrative, technical or clerical work for hire or reward, whether the terms of employment be express or implied, and also includes a person declared to be an employee by the appropriate Government, but does not include any member of the Armed Forces of the Union.

Read the two lists side by side and the difference jumps out.

So every worker is an employee, but not every employee is a worker. The Code uses "employee" where it wants the whole workforce, for instance in the definition of "employer" in section 2(m), and "worker" where it is conferring the protections that exist to correct unequal bargaining power.

Do not memorise this as "employee is the wider word" and stop there. The exclusions differ too: police and prison staff are outside "worker" but are not excluded from "employee".

Section 2(m): 'employer'

An employer is a person who employs, whether directly or through any person, or on his behalf or on behalf of any person, one or more employee or worker in his establishment. Where the establishment is carried on by a department of the Central or State Government, it is the authority specified by the head of the department, or where none is specified, the head of the department; and in relation to an establishment carried on by a local authority, the chief executive of that authority. It includes:

• (i) in relation to a factory, the occupier as defined in the Factories Act 1948, and where a person has been named as manager under that Act, the person so named;
• (ii) in relation to any other establishment, the person or authority which has ultimate control over the affairs of the establishment, and where those affairs are entrusted to a manager or managing director, that manager or managing director;
• (iii) a contractor; and
• (iv) the legal representative of a deceased employer.

Two of those four repay attention. Clause (iii) makes a contractor an employer in his own right, which matters wherever labour is supplied through an intermediary. Clause (iv) means the death of the employer does not extinguish the obligations; his legal representative stands in his place.

Section 2(o): fixed term employment

Fixed term employment is the engagement of a worker on the basis of a written contract of employment for a fixed period. The definition carries three protections in its own proviso, and they are what make it examinable:

• (a) his hours of work, wages, allowances and other benefits shall not be less than those of a permanent worker doing the same work or work of a similar nature;
• (b) he shall be eligible for all statutory benefits available to a permanent worker proportionately according to the period of service rendered, even if his period of employment does not extend to the qualifying period;
• (c) he shall be eligible for gratuity if he renders service under the contract for a period of one year.

Clause (c) is a real change and the number is the point: one year, not five. A fixed term worker qualifies for gratuity after a single year of service under the contract.

The case that answers "is he employed at all?"

Dharangadhara Chemical Works Ltd. v. State of Saurashtra, AIR 1957 SC 264, (1957) SCR 152.

Facts. The appellants held a licence to manufacture salt on leased land. The salt was made by professional labourers called agarias from rain water mixed with saline matter in the soil. The work was seasonal, running from October after the rains until June, after which the agarias returned to their villages to cultivate. The land was divided into plots called pattas, allotted to the agarias with four hundred rupees each to meet initial expenses, and generally the same patta went to the same agaria every year. They were paid by the maund, and accounts were settled at the end of each season. They worked with their families and were free to engage extra labour on their own account, with which the appellants had no concern. No hours of work were prescribed, no muster rolls were maintained, working hours were not controlled, there were no rules about leave or holidays, and the agarias were free to leave the factory after making arrangements for the manufacture of salt. The question was whether such persons were workmen under section 2(s) or independent contractors.

Held. They were workmen, and the reference was competent. The real test is whether the person has been employed by the employer and whether a relationship of employer and employee, or master and servant, subsists between them. The prima facie test of that relationship is the existence of a right in the employer not merely to direct what work is to be done but also to control the manner in which it is to be done, the nature or extent of such control varying in different industries and being by its nature incapable of being precisely defined. The correct approach is therefore to consider whether, having regard to the nature of the work, there was due control and supervision by the employer. And whether the relation is one of employer and employee is a pure question of fact; a finding of the Tribunal on it is not open to question under Article 226 unless shown to be wholly unwarranted by the evidence.

Why it matters. It is the foundation of every question that asks whether a particular person is a worker. It gives the control test, it makes the test flexible rather than mechanical, and it answers the employer's standard argument that a piece-rate worker who sets his own hours must be an independent contractor. The facts are the strongest part of it: almost every indicator of independence was present, and the workers still won.

How to cite it now. Decided under section 2(s) of the Industrial Disputes Act 1947, repealed on 21 November 2025. Section 2(zr) of the Code still defines a worker as a person EMPLOYED in an industry, so whether a person is employed at all remains the threshold question and is still answered by the control test. What the Code has changed is the exclusions, not the test.

A worked example

The facts. A packaging plant in Wada. Consider seven people.

(a) Meera, a machine operator on the shop floor, paid twelve thousand a month. A worker. Operational and manual work for hire or reward, and no exclusion applies.

(b) Rakesh, a clerk in the stores, paid twenty-six thousand a month. A worker. Exclusion (iv) applies only to a person employed in a supervisory capacity. Clerical work is in the positive list and carries no wage ceiling at all.

(c) Sunita, a shift supervisor, paid sixteen thousand a month. A worker. Supervisory work is in the positive list, and the ceiling in exclusion (iv) is not crossed.

(d) Faisal, a shift supervisor, paid twenty-two thousand a month. Not a worker. Both conditions of exclusion (iv) are satisfied: supervisory capacity and wages exceeding eighteen thousand a month. He is, however, an employee under section 2(l), which has no ceiling.

(e) Anjali, the plant's Human Resources head, who hires, disciplines and dismisses. Not a worker: exclusion (iii), employed mainly in a managerial or administrative capacity. She is an employee under section 2(l), which expressly includes managerial and administrative work.

(f) A crew of loaders engaged through a labour contractor, paid by the tonne, who set their own pace and bring their own helpers. Start with Dharangadhara. The question is not how they are paid or whether their hours are fixed but whether, having regard to the nature of the work, there is due control and supervision, including a right to control the manner of doing it. In Dharangadhara the agarias had far more independence than this and were still workmen. If they are employed, they are workers, because section 2(zr) covers a person employed in an industry whether directly or otherwise, and section 2(p) expressly contemplates workers engaged through a contractor. And the contractor himself is an employer, by section 2(m)(iii).

(g) An apprentice engaged under the Apprentices Act 1961. Not a worker, and not an employee either; both definitions exclude an apprentice.

Now the question that ties it to Module I. Faisal, the supervisor paid twenty-two thousand, wants to join the plant's registered Trade Union, and the employer says he cannot because he is not a worker. He is wrong. The proviso to section 2(zr) provides that for the purposes of Chapter III, the Trade Unions chapter, "worker" means all persons employed in trade or industry. Faisal is employed in an industry, so for union purposes he is a worker, may be a member, and counts towards the section 6 membership arithmetic.

What this does NOT mean

It does not mean the Code uses the word "workman". It does not use it at all. Answer MU's question in the Code's vocabulary, and say why the word changed.

It does not mean a supervisor is excluded. Supervisory work is in the positive list. A supervisor is excluded only if his wages exceed eighteen thousand rupees a month, or the notified amount.

It does not mean a highly paid person is excluded. The ceiling applies to supervisory capacity alone. A clerk or a technician on a large salary is still a worker.

It does not mean "employee" is just another word for "worker". Employee is wider on the kind of work, including managerial and administrative, and narrower on nothing except that it too excludes the armed forces and apprentices; and it does not exclude police or prison staff.

It does not mean a dismissed person stops being a worker. For proceedings in relation to an industrial dispute the definition expressly includes a person dismissed, discharged, retrenched or otherwise terminated in connection with, or as a consequence of, that dispute, or whose dismissal led to it.

It does not mean the control test asks whether the employer actually supervised. It asks whether he had the right to control the manner of the work, and Dharangadhara says the extent of that control varies with the industry and cannot be precisely defined.

Limits, criticism and amendments

The wage ceiling is the most criticised feature. Eighteen thousand rupees a month is a modest salary, and a supervisor just above it loses retrenchment compensation, the lay-off provisions and access to the Tribunal in a single step. The Code softens this only by leaving the figure to notification, so it can be raised without an amendment; it has correspondingly not been indexed to anything.

Two definitions doing similar work invite confusion, and the Code compounds it by using both. A student's safest course is to check which word the section in front of him uses.

The exclusion of police and prison staff from "worker" is defensible on the same ground as the sovereign-functions exclusion in section 2(p), but it is worth noticing that they are not excluded from "employee".

And the control test is old. It was framed for salt pans and factories, and it fits awkwardly over platform work and other modern arrangements where the "control" is exercised by an application rather than a foreman. Dharangadhara's own answer, that the nature and extent of control vary with the industry and cannot be precisely defined, is the sentence that keeps the test usable.

Quick revision

• The Code has no "workman". It has worker, section 2(zr), and employee, section 2(l).
• Worker: any person, except an apprentice, employed in any industry to do manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, terms express or implied.
• Includes: working journalists; sales promotion employees; and, for a proceeding in relation to an industrial dispute, a person dismissed, discharged, retrenched or otherwise terminated in connection with or as a consequence of that dispute, or whose dismissal led to it.
• Excludes: armed forces; police and prison staff; a person employed mainly in a managerial or administrative capacity; a person in a supervisory capacity drawing wages exceeding eighteen thousand rupees a month or the notified amount.
• Proviso: for Chapter III only, worker means all persons employed in trade or industry, and includes an unorganised worker under the 2008 Act.
• Employee, section 2(l), is wider on the work: it includes managerial and administrative, adds semi-skilled, has no wage ceiling, and does not exclude police or prison staff; it excludes apprentices and the armed forces.
• Employer, section 2(m): employs directly or through any person; for a factory the occupier or the named manager; otherwise the person with ultimate control; and includes a contractor and the legal representative of a deceased employer.
• Fixed term employment, section 2(o): written contract for a fixed period; hours, wages, allowances and benefits not less than a permanent worker doing the same or similar work; statutory benefits proportionately; gratuity after one year.
• Dharangadhara, AIR 1957 SC 264: the test is master and servant; prima facie, a right not merely to direct what work is done but to control the manner of doing it; the extent of control varies by industry and cannot be precisely defined; it is a pure question of fact. The agarias were workmen despite piece rates, no fixed hours, no muster rolls and freedom to hire their own helpers.

Test yourself

1. Define "worker" under the Code and list the exclusions. Section 2(zr) defines a worker as any person, except an apprentice as defined under the Apprentices Act 1961, employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied. The exclusions are a person subject to the Air Force Act 1950, the Army Act 1950 or the Navy Act 1957; a person employed in the police service or as an officer or other employee of a prison; a person employed mainly in a managerial or administrative capacity; and a person employed in a supervisory capacity drawing wages exceeding eighteen thousand rupees a month or such amount as the Central Government notifies.

2. Distinguish "worker" from "employee". "Employee" in section 2(l) is the wider expression so far as the kind of work goes: it covers skilled, semi-skilled and unskilled, manual, operational, supervisory, managerial, administrative, technical and clerical work, with no wage ceiling, and it includes a person declared to be an employee by the appropriate Government. "Worker" in section 2(zr) excludes managerial and administrative work altogether and excludes a supervisor paid above the ceiling. Both exclude apprentices and the armed forces, but only "worker" excludes police and prison staff. Every worker is an employee; not every employee is a worker.

3. A supervisor is paid twenty thousand rupees a month. Is he a worker? Would your answer differ if he were a clerk on the same pay? He is not a worker: exclusion (iv) in section 2(zr) requires both that the capacity be supervisory and that the wages exceed eighteen thousand rupees a month, and both are satisfied. A clerk on the same pay would be a worker, because the ceiling applies only to a person employed in a supervisory capacity, and clerical work carries no wage limit.

4. State the test for deciding whether a person is employed at all, with authority. On Dharangadhara Chemical Works Ltd. v. State of Saurashtra, AIR 1957 SC 264, the real test is whether the person has been employed and whether a relationship of employer and employee, or master and servant, subsists. The prima facie test of that relationship is the existence of a right in the employer not merely to direct what work is to be done but also to control the manner in which it is to be done, the nature or extent of that control varying in different industries and being incapable of precise definition. The correct approach is to consider whether, having regard to the nature of the work, there was due control and supervision by the employer. Whether the relation exists is a pure question of fact, and a Tribunal's finding on it is not open to challenge under Article 226 unless wholly unwarranted by the evidence. On those principles the agarias, who were paid by the maund, kept no fixed hours, appeared on no muster roll and could hire their own helpers, were held to be workmen.

5. What is the effect of the proviso to section 2(zr)? For the purposes of Chapter III, the Trade Unions chapter, "worker" means all persons employed in trade or industry and includes a worker as defined in section 2(m) of the Unorganised Workers' Social Security Act 2008. So the narrow exclusions do not apply to union membership: a person employed mainly in a managerial capacity, or a supervisor above the wage ceiling, may be a member of a registered Trade Union, and the membership arithmetic in section 6 is calculated on that wider class.

6. What protections attach to fixed term employment? Section 2(o) defines it as the engagement of a worker on a written contract of employment for a fixed period, and its proviso attaches three protections: his hours of work, wages, allowances and other benefits shall not be less than those of a permanent worker doing the same work or work of a similar nature; he shall be eligible for all statutory benefits available to a permanent worker proportionately according to the period of service rendered, even if his period of employment does not extend to the qualifying period; and he shall be eligible for gratuity if he renders service under the contract for a period of one year.

And the same introduction records where the idea came from, which connects this chapter to Module I: discussion at the tripartite Indian Labour Conference revealed a consensus in favour of standing orders in all industrial establishments employing one hundred or more workers. The ILO's method produced an Indian statute, as [The ILO's Influence on Indian Labour Legislation] describes.

Some words this chapter uses

Standing orders, section 2(zj), are orders relating to the matters set out in the First Schedule. That is the whole of the definition, and it is a pointer: to know what standing orders are you must read the Schedule.

Model standing orders are the standing orders the Central Government makes under section 29(1). They serve two purposes: they are the base an employer drafts from, and they are the interim law until his own are certified.

Certifying officer is the officer who examines the draft and certifies it. His powers are in sections 30 and 31.

Badli is a substitute worker, engaged in place of a permanent worker who is absent. The word appears in item 1 of the First Schedule.

Probationer is a worker taken on for a trial period before being confirmed.

Deemed to be adopted means treated by the statute as adopted, whether or not the employer has done anything.

Section 28: to whom the Chapter applies

Section 28(1): the provisions of Chapter IV apply to every industrial establishment wherein three hundred or more than three hundred workers are employed, or were employed on any day of the preceding twelve months.

Three things in that sentence are examinable.

The threshold is three hundred. The repealed Industrial Employment (Standing Orders) Act 1946 applied at one hundred, and its own introduction records that the hundred figure came out of the tripartite Indian Labour Conference. Parliament has tripled it. A student who writes one hundred is answering a repealed Act.

The count is of workers, as defined in section 2(zr). So the people excluded from that definition, those employed mainly in a managerial or administrative capacity and supervisors above the wage ceiling, do not count towards the three hundred.

The look-back is twelve months, and it is generous to the worker. The Chapter applies if three hundred were employed on any day of the preceding twelve months. An establishment that runs a seasonal peak of three hundred and drops to two hundred for the rest of the year is inside the Chapter.

Section 28(2) disapplies the Chapter, notwithstanding sub-section (1), so far as the workers employed are persons to whom the Fundamental and Supplementary Rules, the Civil Services (Classification, Control and Appeal) Rules, the Civil Services (Temporary Service) Rules, the Revised Leave Rules, the Civil Service Regulations, the Civilians in Defence Service (Classification, Control and Appeal) Rules, the Indian Railway Establishment Code, or any other rules or regulations notified by the appropriate Government, apply.

The logic of that exclusion is simple and worth stating. Those people already have written, published conditions of service with a disciplinary procedure and an appeal. Chapter IV exists to supply exactly that where it is missing, so it stands aside where it is already there.

Section 39: and the appropriate Government may exempt

The appropriate Government may, by notification, exempt conditionally or unconditionally any industrial establishment or class of industrial establishments from all or any of the provisions of the Chapter.

Read this beside section 28 rather than separately. Section 28 fixes the class the Chapter catches; section 39 lets the Government let particular establishments out again. The exemption may be partial, "all or any of the provisions", and it may carry conditions.

The First Schedule: what standing orders must cover

Section 2(zj) defines standing orders by reference to this Schedule, and section 30(6)(a) makes provision for every applicable Schedule matter a condition of certification. The eleven items are:

• 1. Classification of workers, whether permanent, temporary, apprentices, probationers, badlis or fixed term employment.
• 2. Manner of intimating to workers periods and hours of work, holidays, pay-days and wage rates.
• 3. Shift working.
• 4. Attendance and late coming.
• 5. Conditions of, procedure in applying for, and the authority which may grant leave and holidays.
• 6. Requirement to enter premises by certain gates, and liability to search.
• 7. Closing and reporting of sections of the industrial establishment, temporary stoppages of work, and the rights and liabilities of the employer and workers arising from them.
• 8. Termination of employment, and the notice to be given by employer and workers.
• 9. Suspension or dismissal for misconduct, and the acts or omissions which constitute misconduct.
• 10. Means of redress for workers against unfair treatment or wrongful exactions by the employer or his agents or servants.
• 11. Any other matter specified by the appropriate Government by notification.

Read the list as three groups and it becomes memorable.

Items 1 to 5 tell a worker where he stands. What category he belongs to, how he learns his hours and pay, how shifts work, what counts as attendance, and how he gets leave.

Items 6 to 9 are the employer's powers. He may require entry by particular gates and may search; he may close sections and stop work temporarily; he may terminate on notice; and he may suspend or dismiss for misconduct.

Item 10 is the balance. Whatever powers items 6 to 9 give the employer, item 9 obliges him to define misconduct in advance, and item 10 obliges him to provide the worker with a means of redress against unfair treatment or wrongful exactions.

Item 1 is worth a separate note because it now names fixed term employment among the classifications, which the 1946 Schedule did not. Fixed term employment is defined in section 2(o) with its own three protections, worked in ['Workman' Under the Code: Worker, Employee and Employer].

And item 9 is the one that decides real cases. An employer cannot dismiss for misconduct unless the acts or omissions constituting misconduct are set out in his certified standing orders. Writing them down in advance is the protection.

Section 29: the model standing orders

Section 29(1): the Central Government shall make model standing orders relating to conditions of service and other matters incidental thereto or connected therewith. The obligation is mandatory.

Section 29(2) is the provision that makes the scheme work, and it is easy to underrate. Notwithstanding sections 30 to 36, for the period commencing on the date on which the section becomes applicable to an industrial establishment and ending with the date on which standing orders as finally certified come into operation under section 33, the model standing orders shall be deemed to be adopted in that establishment; and section 33(2) and section 35 apply to those model standing orders as they apply to certified ones.

Three consequences follow.

An establishment is never without standing orders. From the first day the Chapter applies, the model orders are in force by operation of law, whatever the employer has or has not done.

The employer cannot gain by delay. Under a scheme without section 29(2), an employer who never submitted a draft would have no standing orders and so no defined misconduct and no defined procedure, which might suit him. Here he simply has the Government's model orders instead of his own.

The interim orders are real orders. Section 33(2), which requires the text to be maintained for the information of the workers, and section 35, which governs modification, both apply to them.

A worked example

The facts. A packaging plant in Wada. Its workforce is 260 for most of the year, but for two months of the season it takes on extra hands and reaches 315 workers. It employs, in addition, four managers and three supervisors paid above the section 2(zr) ceiling. It has never had standing orders.

Does Chapter IV apply? Yes. Section 28(1) applies the Chapter where three hundred or more workers were employed on any day of the preceding twelve months, and 315 were employed during the season. The managers and the high-paid supervisors are not counted, because they are not workers under section 2(zr), but the count reached 315 without them.

From what date does the plant have standing orders? From the date the Chapter became applicable to it. Section 29(2) deems the Central Government's model standing orders to be adopted from that date until certified orders come into operation under section 33. The employer's inaction is irrelevant.

A worker, Meera, is dismissed for leaving her post without permission, and the employer says this was misconduct. Ask first what the applicable standing orders say. Until certification, they are the model standing orders. Item 9 of the First Schedule requires the acts or omissions which constitute misconduct to be specified, so the question is whether leaving a post without permission is among the specified acts. If it is not, the dismissal is not a dismissal for a defined misconduct.

Meera says the standing orders themselves are unfair. That objection has a home: section 30(7) makes it the function of the certifying officer or the appellate authority to adjudicate upon the fairness or reasonableness of the provisions of any standing orders, keeping in view the model standing orders. That is the subject of the next chapter.

The plant's owner asks whether he can simply be left out. Only the appropriate Government can do that, by notification under section 39, conditionally or unconditionally, from all or any of the provisions of the Chapter.

Now change the facts: the plant's workers are railway employees to whom the Indian Railway Establishment Code applies. Then section 28(2) disapplies the Chapter notwithstanding the numbers, because those workers already have published conditions of service.

What this does NOT mean

It does not mean the threshold is one hundred. It is three hundred under section 28(1). One hundred was the figure in the repealed Act of 1946.

It does not mean an establishment below the threshold has no rules. It means Chapter IV does not apply to it. Its terms of employment are governed by the contract and by the rest of the Code.

It does not mean the employer writes whatever he likes. He drafts from the model standing orders, must cover every applicable First Schedule matter, and the certifying officer adjudicates on fairness and reasonableness.

It does not mean the model standing orders are only a template. Section 29(2) makes them the operative standing orders until certified ones come into operation.

It does not mean managers count towards three hundred. The section counts workers, and section 2(zr) excludes those employed mainly in a managerial or administrative capacity and supervisors above the wage ceiling.

It does not mean the count is taken today. It is satisfied if the number was reached on any day of the preceding twelve months.

Limits, criticism and amendments

Raising the threshold from one hundred to three hundred is the largest change in this Chapter and the most criticised. An establishment of two hundred and fifty workers is a substantial workplace, and it is now outside a requirement it had been inside since 1946. The employer's answer is that certification is a burden disproportionate to a medium-sized unit. The worker's answer is the one the 1946 Act's own introduction gave: the mischief is employers who will not define conditions of service, and that mischief does not begin at three hundred.

The same threshold appears in Chapter X, which governs lay-off, retrenchment and closure in larger establishments, and was raised there too. The two changes together are the central complaint made about the Code by trade unions.

The exemption power in section 39 is wide. It permits exemption from all or any of the provisions, conditionally or unconditionally, by notification, with no criteria stated in the section.

And the First Schedule can be enlarged by notification, item 11, so the content of standing orders is not fixed by Parliament alone. Section 101 separately gives a power to amend the Schedules.

Quick revision

• Section 2(zj): standing orders are orders relating to the matters set out in the First Schedule.
• Section 28(1): Chapter IV applies to every industrial establishment with three hundred or more workers employed, or employed on any day of the preceding twelve months. Not one hundred; that was the repealed 1946 Act.
• Section 28(2): does not apply where the civil service rules, the Civilians in Defence Service Rules, the Indian Railway Establishment Code or other notified rules apply.
• Section 39: the appropriate Government may exempt any establishment or class, conditionally or unconditionally, from all or any provisions.
• Section 29(1): the Central Government shall make model standing orders. 29(2): they are deemed adopted from the day the section applies until certified orders come into operation under section 33, and sections 33(2) and 35 apply to them.
• First Schedule, eleven items: classification of workers including fixed term employment; intimation of hours, holidays, pay-days and wage rates; shift working; attendance and late coming; leave, its conditions, procedure and granting authority; entry by certain gates and liability to search; closing and reporting of sections and temporary stoppages; termination and notice; suspension or dismissal for misconduct, and what constitutes misconduct; means of redress against unfair treatment or wrongful exactions; and any other matter notified.

Test yourself

1. What are standing orders, and to which establishments does Chapter IV apply? Section 2(zj) defines standing orders as orders relating to the matters set out in the First Schedule to the Code. Section 28(1) applies Chapter IV to every industrial establishment wherein three hundred or more workers are employed, or were employed on any day of the preceding twelve months. Section 28(2) disapplies it, notwithstanding that, so far as the workers are persons to whom the Fundamental and Supplementary Rules, the Civil Services (Classification, Control and Appeal) Rules, the Civil Services (Temporary Service) Rules, the Revised Leave Rules, the Civil Service Regulations, the Civilians in Defence Service (Classification, Control and Appeal) Rules, the Indian Railway Establishment Code or other notified rules apply.

2. State the matters to be provided for in standing orders. The eleven items of the First Schedule: classification of workers, whether permanent, temporary, apprentices, probationers, badlis or fixed term employment; the manner of intimating to workers the periods and hours of work, holidays, pay-days and wage rates; shift working; attendance and late coming; the conditions of, procedure in applying for, and the authority which may grant, leave and holidays; the requirement to enter premises by certain gates and liability to search; the closing and reporting of sections of the establishment, temporary stoppages of work and the rights and liabilities arising from them; termination of employment and the notice to be given by employer and workers; suspension or dismissal for misconduct and the acts or omissions which constitute misconduct; means of redress for workers against unfair treatment or wrongful exactions by the employer or his agents or servants; and any other matter specified by the appropriate Government by notification.

3. What is the effect of the model standing orders before an employer's own are certified? Section 29(2) provides that, notwithstanding sections 30 to 36, from the date on which the section becomes applicable to an industrial establishment until the date on which the standing orders as finally certified come into operation under section 33, the model standing orders made by the Central Government under section 29(1) shall be deemed to be adopted in that establishment, and sections 33(2) and 35 apply to them as they apply to certified orders. So the establishment is never without standing orders, and an employer gains nothing by delaying his draft.

4. A factory employs 250 workers all year but employed 310 for three weeks last summer. Does Chapter IV apply? Yes. Section 28(1) is satisfied where three hundred or more workers were employed on any day of the preceding twelve months, and 310 were employed during those three weeks. The obligation does not depend on the number employed today.

5. Why does the Code require misconduct to be defined in advance? Because item 9 of the First Schedule requires standing orders to provide for suspension or dismissal for misconduct and the acts or omissions which constitute misconduct, and section 30(6)(a) makes provision for every applicable Schedule matter a condition of certification. The purpose is the one the repealed Act's introduction gave: the mischief was employers who would not define conditions of service, leaving the worker unable to know in advance what would cost him his job and unable to complain of unfairness because there was no standard to measure against. Item 10 completes the balance by requiring a means of redress against unfair treatment or wrongful exactions.

6. Comment on the change of threshold from one hundred to three hundred. The Industrial Employment (Standing Orders) Act 1946 applied at one hundred workers, a figure its own introduction records as having come from a consensus at the tripartite Indian Labour Conference. Section 28(1) of the Code sets the figure at three hundred, so establishments between the two numbers, which are substantial workplaces, are now outside a requirement they had been inside since 1946. The argument for the change is that certification is a disproportionate burden on a medium-sized unit; the argument against is that the mischief the Chapter addresses, employers who will not define conditions of service, does not begin at three hundred. The same threshold was raised in Chapter X for lay-off, retrenchment and closure, and the two changes together are the principal criticism trade unions make of the Code.

Some words this chapter uses

Certify means to approve formally, so that the document becomes the operative standing orders of the establishment.

Authenticated means marked as genuine in the manner the rules prescribe.

Deemed to have been certified means treated by the statute as certified although the officer has not acted.

Appellate authority is the authority appointed by the appropriate Government by notification to hear appeals under section 32.

Subsistence allowance is the money paid to a worker while he is suspended and therefore not working, so that he can live while the inquiry runs.

Ordinarily, in section 38(1), signals a norm rather than an absolute bar. The section provides its own consequence for delay, in section 38(3)(b).

Section 30: preparing and certifying the draft

30(1): the employer drafts

The employer shall prepare draft standing orders within six months from the date of commencement of this Code, based on the model standing orders referred to in section 29, in respect of the matters specified in the First Schedule, and on any other matter he considers necessary for his establishment considering the nature of its activity, provided such provision is not inconsistent with any provision of the Code and covers every matter set out in the First Schedule.

Three obligations are packed in there. The draft must be based on the model; it must cover every First Schedule matter; and anything extra must not be inconsistent with the Code.

30(2): consultation before submission

The employer shall consult the Trade Unions, or the recognised negotiating union, or the members of the negotiating council, in respect of the draft, and thereafter forward it, electronically or otherwise, to the certifying officer.

The word "thereafter" fixes the order. Consultation comes before submission, not after. It connects Chapter IV to section 14: who must be consulted depends on who has been recognised, which is the subject of [Recognition: The Negotiating Union and Negotiating Council].

30(3): the short cut, and it is a real one

Where an employer adopts a model standing order of the Central Government with respect to matters relevant to his establishment, that model standing order shall be deemed to have been certified under the section, and he forwards the information to the certifying officer in the prescribed manner. A proviso allows the certifying officer, if he has any observation, to direct the employer to amend the standing order so adopted within the prescribed period.

This is new and it is the employer's fast route. Take the Government's model as it stands and there is no certification proceeding at all. The price is that he gets the model rather than rules fitted to his own plant, and the officer may still require amendment.

30(4): modifications, on the same timetable

The employer prepares the draft of any modifications required in the standing orders and forwards them for certification of those modifications only, within six months from the date the Chapter becomes applicable to his establishment.

30(5): what the certifying officer does

On receipt of a draft under sub-section (1) or (4), the certifying officer shall issue notice to:

• (i) the Trade Union or negotiating union of the establishment, or the members of the negotiating council; or
• (ii) where no Trade Union is operating, to such representatives of the workers chosen in the prescribed manner,

seeking their comments; and after receiving the comments he shall give an opportunity of being heard to the negotiating union or council, or to the Trade Unions or the workers' representatives, and decide whether any modification or addition is necessary to render the draft certifiable, and shall make an order in writing.

Clause (ii) is the provision that keeps the scheme honest in an unorganised plant. Where there is no union, the workers still get notice, still comment, and still are heard, through representatives chosen in the prescribed manner.

The sixty-day proviso, and the deeming that follows

The certifying officer shall complete the procedure within sixty days from receipt, both for a draft standing order and for draft modifications, failing which the draft standing orders or the modifications shall be deemed to have been certified on the expiry of that period.

This cuts both ways and a good answer says so. It protects the employer against an officer who never acts, and it means that an officer who lets sixty days pass certifies, by silence, a draft he may never have read. The workers' protection then rests entirely on the appeal in section 32.

30(6): the test of certifiability

Standing orders are certifiable if:

• (a) provision is made for every matter set out in the First Schedule which is applicable to the establishment; and
• (b) they are otherwise in conformity with the provisions of this Code.

30(7): fairness and reasonableness

It shall be the function of the certifying officer or the appellate authority referred to in section 32 to adjudicate upon the fairness or reasonableness of the provisions of any standing orders keeping in view the provisions of the model standing orders referred to in section 29.

This is the most important sub-section in Chapter IV. Without it the officer would be a clerk checking that all eleven Schedule items appear somewhere. With it he is an adjudicator on the merits, and the model standing orders are the yardstick against which fairness is measured. A provision markedly harsher than the model has to justify itself.

A note of history worth one line in an answer. Under the repealed Standing Orders Act 1946 the certifying officer originally had no such power; it was added by amendment years later, precisely because certification without it had proved to be a formality. The Code carries the power in the section from the start.

30(8) to (11): the rest of the machinery

30(8): the certifying officer shall certify, and within seven days thereafter send copies of the certified standing orders or modifications, authenticated in the prescribed manner, to the employer and to the negotiating union or council, or the Trade Union, or the workers' representatives.

30(9): the draft must be accompanied by a statement giving prescribed particulars of the workers employed, the Trade Union to which they belong, and the negotiating union or council if any.

30(10): a group of employers in similar establishments may submit a joint draft, and for the specified proceedings the words "employer", "Trade Union" and "negotiating union or negotiating council" include all of them.

30(11): standing orders existing on the date of commencement of the relevant provisions continue, so far as not inconsistent with the Code or the rules, and are deemed to be certified under sub-section (8).

Sub-section (11) is the transitional provision for Chapter IV, and it does for standing orders what section 9(4) does for union registrations: nobody starts again.

Section 31: the powers of the officer

Every certifying officer and the appellate authority has all the powers of a civil court for the purposes of receiving evidence, administering oaths, enforcing the attendance of witnesses, and compelling the discovery and production of documents, and is deemed to be a civil court within the meaning of sections 345 and 346 of the Code of Criminal Procedure 1973.

Section 31(2) allows clerical or arithmetical mistakes, or errors from an accidental slip or omission, in an order of a certifying officer to be corrected at any time by that officer or his successor.

The powers in sub-section (1) follow from section 30(7). An officer who must adjudicate on fairness needs to be able to take evidence and compel documents, and the deeming as a civil court for the two CrPC sections gives him the means to deal with contempt in the face of the proceeding.

Section 32: the appeal

Who may appeal: an employer, or a Trade Union, or the negotiating union or negotiating council, or, where there is no negotiating union or council, any union or such representative body of the workers.

Against what: the order of the certifying officer under section 30(5).

Within what time: sixty days of receipt of the order.

To whom: the appellate authority appointed by the appropriate Government, by notification, which disposes of the appeal in the prescribed manner.

Notice how wide the standing is. It is not confined to the recognised union. Where there is no negotiating union or council, any union or representative body of the workers may appeal, so the workers of an unorganised plant are not shut out.

And remember section 30(7) applies to the appellate authority too, in terms. The appeal is therefore an appeal on fairness and reasonableness, not merely on legality.

Section 33: when they come into operation, and who must see them

33(1): the standing orders or modified standing orders come into operation:

• unless an appeal is preferred, on the expiry of thirty days from the date authenticated copies are sent under section 30(8); or
• where an appeal is preferred, on the expiry of seven days from the date copies of the appellate authority's order are sent in the prescribed manner.

The thirty days exist to let the sixty-day appeal period begin sensibly, and the seven days after an appeal reflect that the matter has already been decided twice.

33(2): the text of a standing order as finally certified shall be maintained by the employer in such language and in such manner for the information of the concerned workers as may be prescribed.

Sub-section (2) is small and indispensable. Rules a worker cannot read are not rules he can obey. The provision requires the text to be kept in the prescribed language and manner for the workers' information, and by section 29(2) it applies to model standing orders in the interim period as well.

Section 34: the register

A copy of all standing orders as finally certified shall be filed by the certifying officer in a register, or uploaded in electronic form or such other form as prescribed, and the certifying officer shall furnish a copy to any person applying for it on payment of the prescribed fee.

"Any person" is deliberate. A worker, a union, a researcher or a prospective employee may obtain a copy. The orders are public.

Section 35: modification

35(1): certified standing orders shall not, except on an agreement between the employer and the workers, or a negotiating union or a Trade Union or other representative body of the workers, be liable to modification until the expiry of six months from the date the standing orders or the last modifications came into operation.

35(2): subject to that, an employer or worker or a Trade Union or other representative body may apply to the certifying officer to have the standing orders modified, in the prescribed form, accompanied by copies of the proposed modifications; and where the modifications are proposed by agreement, a certified copy of that agreement shall be filed with the application.

35(3): the foregoing provisions apply to such an application as they apply to the certification of the first-time standing orders.

So the six-month bar is not absolute: agreement lifts it. And note who may apply under sub-section (2): an individual worker may, not only a union.

Section 36: no oral evidence to contradict

No oral evidence having the effect of adding to, or otherwise varying or contradicting, standing orders as finally certified shall be admitted in any Court.

This is a rule of evidence and it protects both sides. An employer cannot say "there was an understanding that lateness meant instant dismissal" when the standing orders say otherwise; a worker cannot say a supervisor promised him something the orders do not give. The certified document is the document.

Section 37: interpretation goes to the Tribunal

If any question arises as to the application or interpretation of standing orders certified under section 30(8), or of modifications made by agreement, the employer, or any worker or workers concerned, or the Trade Union in relation to the workers employed in the establishment may apply to the Tribunal within whose territorial jurisdiction the establishment or the office, section or branch is situated; and the Tribunal shall, after giving all parties a reasonable opportunity of being heard, decide the question, and its decision shall be final and binding on the employer and the workers.

Two points. The certifying officer settles what the orders shall say; the Tribunal settles what they mean. And an individual worker may apply, not only the union.

Section 38: the ninety days and the subsistence allowance

This is the provision a student will actually use, and it is the one most often left out of an answer.

38(1): where a worker is suspended by the employer pending investigation or inquiry into complaints or charges of misconduct, that investigation or inquiry, or where there is an investigation followed by an inquiry then both, shall be completed ordinarily within a period of ninety days from the date of suspension.

38(2): the certified or modified standing orders shall provide that where a worker is so suspended, the employer shall pay subsistence allowance at the rates in sub-section (3) for the period of suspension.

38(3): the subsistence allowance shall be:

• (a) fifty per cent. of the wages the worker was entitled to immediately preceding the date of suspension, for the first ninety days of suspension; and
• (b) seventy-five per cent. of such wages for the remaining period, if the delay in completing the disciplinary proceedings is not directly attributable to the conduct of the worker.

Read (a) and (b) together with (1) and the design appears. The inquiry is meant to finish in ninety days. If it does not, the cost of the delay shifts to the employer, whose payment rises from half to three-quarters, unless the delay is directly attributable to the worker's own conduct. A worker who is himself spinning the proceeding out does not get the increase.

And note that section 38(2) works through the standing orders. The obligation is expressed as a requirement that the standing orders shall provide for it, so it becomes a term of the establishment's own certified rules.

A worked example

The facts. The Wada packaging plant is inside Chapter IV, as the previous chapter showed. It has a registered union which has been recognised as the sole negotiating union under section 14.

Step one. The employer prepares a draft based on the model standing orders, covering all eleven First Schedule matters, within six months of commencement, section 30(1).

Step two. He consults the negotiating union, section 30(2), and thereafter forwards the draft, electronically or otherwise, with the section 30(9) statement of the workers employed and their union.

Step three. The certifying officer issues notice to the negotiating union for comments, section 30(5)(i), receives them, gives an opportunity of being heard, and decides whether modification or addition is necessary, making an order in writing.

The union objects that the draft makes "any absence without prior written permission" a misconduct punishable with dismissal. This is exactly what section 30(7) is for: the officer adjudicates on the fairness or reasonableness of the provision keeping in view the model standing orders. If the model treats absence differently, the draft has to justify the departure.

Step four. The officer certifies and, within seven days, sends authenticated copies to the employer and the union, section 30(8).

Step five. No appeal is filed. The orders come into operation on the expiry of thirty days from the sending of those copies, section 33(1). The employer must maintain the text in the prescribed language and manner for the workers' information, section 33(2), and the certifying officer files a copy in the register and must give a copy to any person who applies and pays the fee, section 34.

Change it: the union appeals. It has sixty days from receipt of the order, section 32, to the appellate authority appointed by the appropriate Government. The orders then come into operation on the expiry of seven days from the sending of the appellate order, section 33(1).

Change it again: the certifying officer does nothing for sixty-five days. By the proviso to section 30(5) the draft is deemed to have been certified on the expiry of sixty days. The union's remedy is the appeal under section 32.

Four months later the union wants a clause changed. Section 35(1) bars modification until six months from the date the orders came into operation, except on an agreement. So either the employer agrees, in which case a certified copy of the agreement is filed with the application under section 35(2), or the union waits.

A worker, Rakesh, is suspended on 1 March pending an inquiry into alleged theft. The inquiry must ordinarily be completed within ninety days, section 38(1). He must be paid subsistence allowance at fifty per cent. of his previous wages for the first ninety days, section 38(3)(a). The inquiry drags to 1 August because the employer's witness is unavailable; the delay is not attributable to Rakesh, so from day ninety-one he must be paid seventy-five per cent., section 38(3)(b).

At the hearing the employer's manager says there was always an understanding that theft meant dismissal without inquiry, though the standing orders provide for an inquiry. Section 36 shuts that out: no oral evidence having the effect of adding to, varying or contradicting the certified standing orders is admissible in any Court.

Rakesh and the employer then disagree about what a clause of the standing orders means. That is a question of interpretation, and under section 37 the employer, the worker or the Trade Union may apply to the Tribunal, which decides after hearing all parties, and its decision is final and binding.

What this does NOT mean

It does not mean certification is a formality. Section 30(7) makes fairness and reasonableness the officer's function, and section 31 gives him civil court powers to take evidence and compel documents.

It does not mean the employer must draft at all. Section 30(3) lets him adopt the Central Government's model standing order, which is then deemed certified, subject to the officer's power to direct an amendment.

It does not mean silence by the officer defeats the employer. After sixty days the draft is deemed certified. The workers' answer is the appeal.

It does not mean only unions can act. Where no union operates, workers' representatives are noticed and heard under section 30(5)(ii), and any union or representative body may appeal under section 32. An individual worker may apply for modification under section 35(2) and for interpretation under section 37.

It does not mean standing orders are unalterable. They cannot be modified for six months except by agreement, and thereafter on application under section 35.

It does not mean the Tribunal certifies. The certifying officer and the appellate authority decide what the orders say; the Tribunal decides what they mean.

It does not mean section 38(1) is an absolute time limit. The word is "ordinarily", and the sanction for delay is the increase in subsistence allowance under section 38(3)(b), not invalidity.

Limits, criticism and amendments

The deeming provision in the proviso to section 30(5) is the most criticised feature. A draft becomes certified because an officer did not act within sixty days, and nothing in the section requires him to have read it. The workers' protection collapses into the section 32 appeal, which requires them to know that the sixty days have run.

Section 30(3) has the same structure of concern. Adoption of the model is deemed certification, so there is no proceeding in which the workers are heard at all; the only check is the certifying officer's power, on his own observation, to direct an amendment.

Section 38(1) is a norm rather than a rule. "Ordinarily within ninety days" is not a bar, and a worker whose inquiry runs for a year has no remedy under this section beyond the higher rate of allowance.

And the subsistence rates are a floor, not a wage. Fifty per cent. of wages for three months is a serious loss for a worker suspended on a charge that may not be made out.

Against all that, the Chapter is markedly better drafted than the Act it replaces. The fairness power is in the section from the start rather than added by amendment; consultation before submission is compulsory; workers without a union are expressly brought into the certification and the appeal; and section 38's time limit and subsistence allowance are new statutory protections.

Quick revision

• 30(1): draft within six months, based on the model, covering every First Schedule matter, nothing inconsistent with the Code.
• 30(2): consult the Trade Unions or negotiating union or council, then forward.
• 30(3): adopting the model is deemed certification; the officer may direct amendment.
• 30(5): notice for comments to the union, or where none, to workers' representatives; opportunity of being heard; order in writing. Proviso: sixty days, failing which DEEMED certified.
• 30(6): certifiable if every applicable First Schedule matter is provided for and it is otherwise in conformity with the Code.
• 30(7): the officer and the appellate authority adjudicate on fairness or reasonableness, keeping the model in view.
• 30(8): certify, then send authenticated copies within seven days. 30(10): joint draft by a group of similar employers. 30(11): existing standing orders continue and are deemed certified.
• 31: powers of a civil court for evidence, oaths, attendance and discovery; deemed a civil court for sections 345 and 346 CrPC; clerical errors correctable at any time.
• 32: appeal within sixty days; by the employer, a Trade Union, the negotiating union or council, or where there is none, any union or representative body.
• 33(1): operation on thirty days from sending copies, or seven days after an appellate order. 33(2): text maintained for the workers' information in the prescribed language and manner.
• 34: register, or electronic form; copy to any person on payment of the fee.
• 35: no modification for six months except by agreement; thereafter an employer or worker or union may apply; a certified copy of any agreement is filed.
• 36: no oral evidence adding to, varying or contradicting certified standing orders in any Court.
• 37: application or interpretation goes to the Tribunal; decision final and binding.
• 38: inquiry ordinarily within ninety days; subsistence allowance 50% for the first ninety days, 75% thereafter if the delay is not directly attributable to the worker.

Test yourself

1. Describe the procedure for certification of standing orders. Under section 30(1) the employer prepares a draft within six months of commencement, based on the model standing orders, covering every matter in the First Schedule and anything else he considers necessary, provided it is not inconsistent with the Code. Under section 30(2) he consults the Trade Unions or the negotiating union or council and thereafter forwards the draft to the certifying officer, accompanied by the section 30(9) statement. Under section 30(5) the officer issues notice for comments to the union, or where none operates to workers' representatives chosen in the prescribed manner, gives an opportunity of being heard, decides whether any modification or addition is necessary and makes an order in writing, completing the procedure within sixty days, failing which the draft is deemed certified. Under section 30(6) the orders are certifiable if every applicable First Schedule matter is provided for and they are otherwise in conformity with the Code, and under section 30(7) the officer adjudicates on their fairness or reasonableness keeping the model orders in view. Under section 30(8) he certifies and sends authenticated copies within seven days to the employer and the union or workers' representatives.

2. What is the significance of section 30(7)? It makes it the function of the certifying officer and of the appellate authority to adjudicate upon the fairness or reasonableness of the provisions of any standing orders, keeping in view the model standing orders. Without it certification would be a filing exercise in which the officer merely checked that all the Schedule items appeared. With it he decides on the merits, and the model standing orders are the yardstick, so a provision markedly harsher than the model must justify itself. Under the repealed Act of 1946 the officer originally had no such power and it had to be added by amendment; the Code carries it from the start.

3. When do certified standing orders come into operation, and can they be changed? Under section 33(1), unless an appeal is preferred, on the expiry of thirty days from the date authenticated copies are sent under section 30(8); where an appeal is preferred, on the expiry of seven days from the date copies of the appellate authority's order are sent. Under section 35(1) they are not liable to modification until the expiry of six months from the date they or the last modifications came into operation, except on an agreement between the employer and the workers or a negotiating union, Trade Union or other representative body. Thereafter, under section 35(2), an employer, a worker, a Trade Union or other representative body may apply to the certifying officer, and by section 35(3) the certification provisions apply to that application as they do to first-time orders.

4. A worker is suspended pending an inquiry that takes seven months. What is he entitled to? Under section 38(1) the investigation or inquiry, or both where there is an investigation followed by an inquiry, should ordinarily have been completed within ninety days of suspension. Under section 38(3)(a) he is entitled to subsistence allowance at fifty per cent. of the wages he was entitled to immediately before suspension for the first ninety days, and under section 38(3)(b) at seventy-five per cent. for the remaining period, provided the delay in completing the disciplinary proceedings is not directly attributable to his own conduct. Section 38(2) requires the certified standing orders themselves to provide for this payment.

5. What is the effect of sections 36 and 37? Section 36 excludes evidence: no oral evidence having the effect of adding to, or otherwise varying or contradicting, standing orders as finally certified shall be admitted in any Court, so neither side may set up an understanding inconsistent with the certified text. Section 37 allocates jurisdiction: where a question arises as to the application or interpretation of certified standing orders, or of modifications made by agreement, the employer, any worker or workers concerned, or the Trade Union may apply to the Tribunal within whose territorial jurisdiction the establishment is situated, and the Tribunal, after giving all parties a reasonable opportunity of being heard, decides the question, its decision being final and binding.

6. Comment on the deeming provision in the proviso to section 30(5). It provides that where the certifying officer does not complete the procedure within sixty days of receiving a draft standing order or draft modifications, the draft is deemed to have been certified on the expiry of that period. It protects an employer against administrative inaction, which is a real problem. But it also means a draft may become the establishment's certified standing orders although no officer has considered its fairness or reasonableness under section 30(7) at all, and the workers' only remaining protection is the appeal under section 32, which they must file within sixty days of an order that in this situation was never made. Section 30(3), under which adoption of the model standing order is deemed certification without any proceeding, raises the same concern in a milder form, since there the content is the Government's own model.

Some words this chapter uses

Bi-partite means having two sides, here the employer and the workers, with nobody from outside. Contrast tri-partite, which adds the Government, and which is what the Indian Labour Conference and the ILO are.

Amity means friendly relations. It is the word section 3(3) uses.

Individual grievance is a complaint personal to one worker, as distinct from a demand made on behalf of the workforce.

Cause of action is the set of facts that gives a person the right to complain. The one-year limit in section 4(5) runs from the date it arises.

Rotational basis means the office passes in turn. Under section 4(3) the chairperson comes alternately from the employer's side and the workers' side, changing every year.

Section 3: the Works Committee

3(1): who must have one

In the case of any industrial establishment in which one hundred or more workers are employed, or have been employed on any day in the preceding twelve months, the appropriate Government may by general or special order require the employer to constitute a Works Committee, in the prescribed manner, consisting of representatives of the employer and of the workers engaged in the establishment.

A proviso requires that the number of representatives of the workers shall not be less than the number of representatives of the employer.

Three points, and each is a mark.

The threshold is one hundred, and it is measured the same generous way as the standing orders threshold: the Chapter bites if the number was reached on any day in the preceding twelve months. Note the contrast with section 28, where the standing orders threshold is three hundred. Two different thresholds in one Code, and an examiner will ask which is which.

The obligation is not automatic. The appropriate Government may require it, by a general or a special order. Absent such an order there is no Works Committee, which distinguishes section 3 sharply from section 4, where the duty falls on the employer directly.

The workers can never be outnumbered. The proviso fixes a floor, not a ceiling: the workers' representatives must be not fewer than the employer's.

3(2): who the workers' representatives are

They shall be chosen, in the prescribed manner, from among the workers engaged in the establishment and in consultation with their Trade Union, if any, registered under section 9.

Two things follow. The representatives are insiders: outsiders cannot sit on a Works Committee for the workers. And the registered union, though not itself a member of the committee, has a statutory voice in choosing them, which links this section to Chapter III.

3(3): what it does

It shall be the duty of the Works Committee to promote measures for securing and preserving amity and good relations between the employer and workers and, to that end, to comment upon matters of common interest.

Read those words carefully, because they are the limit of the body. Its function is to promote and to comment. It does not adjudicate, it does not decide grievances, and it does not bargain. A student who describes the Works Committee as a dispute-deciding body has misread section 3(3).

Why then does it matter? Because a standing forum in which both sides meet regularly is where problems surface early. It is the industrial equivalent of a residents' committee: it settles nothing by force and prevents a great deal.

Section 4: the Grievance Redressal Committee

This is the operative in-house body, and it is drafted with far more precision.

4(1): who must have one, and for what

Every industrial establishment employing twenty or more workers shall have one or more Grievance Redressal Committees for the resolution of disputes arising out of individual grievances.

Contrast section 3 at three points. The threshold is twenty, not a hundred. The duty is on the employer directly, with no Government order needed: the words are "shall have". And there may be more than one committee in an establishment.

4(2) to (4): how it is composed

4(2): equal numbers representing the employer and the workers, chosen in the prescribed manner.

4(3): the chairperson shall be selected from among the persons representing the employer and the workers alternatively on a rotational basis every year.

4(4): the total number of members shall not exceed ten. A proviso requires adequate representation of women workers, and that representation shall not be less than the proportion of women workers to the total workers employed in the establishment.

Three features are worth stating in an answer.

Equality, not a majority. Unlike the Works Committee, where the workers may outnumber the employer, the Grievance Redressal Committee is exactly balanced. That is why section 4(7) has to solve the deadlock the balance creates.

The chair rotates annually between the two sides, so neither side holds it permanently.

The women's proviso is proportional and it is a floor. If a third of the workforce is women, at least a third of the committee must be. This is one of the few places in the Code where representation is tied to the composition of the workforce.

4(5) and (6): applying, and the time limits

4(5): an application may be filed by any aggrieved worker, in the prescribed manner, within one year from the date on which the cause of action of such dispute arises.

4(6): the Committee may complete its proceedings within thirty days of receipt of the application.

Notice the word "may" in sub-section (6), and notice that sub-section (8) supplies the consequence of not doing so: the worker may take the matter to conciliation. So thirty days is not a deadline enforced by invalidity; it is the point at which the worker acquires a right to go elsewhere.

4(7): how it decides, and the deadlock rule

The decision shall be made on the basis of the majority view of the Committee, provided more than half of the members representing the workers have agreed to such decision; otherwise it shall be deemed that no decision could be arrived at by the Committee.

This is the cleverest provision in the section and it is regularly asked. The committee is evenly balanced, so a bare majority is impossible without a crossing of sides. The sub-section therefore adds a double requirement: a majority of the whole committee and the agreement of more than half of the workers' representatives.

Why the double lock? Because without it the employer's side plus one worker representative could carry a decision against the other worker representatives, and the committee would become a way of legitimising the employer's position. The sub-section makes the workers' side, as a body, a necessary part of any decision. And where that cannot be achieved, the Code does not pretend: it deems that no decision could be arrived at, which is honest and which triggers section 4(8).

4(8): where an unresolved grievance goes

A worker aggrieved by the decision, or whose grievance is not resolved within the thirty days, may within sixty days from the date of the decision or from the expiry of that period, file an application for the conciliation of the grievance to the conciliation officer, through the Trade Union of which he is a member, in the prescribed manner.

Two limitations are built into that route and both are examinable. The application goes through the Trade Union of which he is a member, so a worker who belongs to no union has a practical difficulty at exactly this step. And the period is sixty days, running either from the decision or from the expiry of the thirty days.

4(9): the deeming provision

Where any employer discharges, dismisses, retrenches, or otherwise terminates the services of an individual worker, any dispute or difference between that worker and his employer connected with, or arising out of, such discharge, dismissal, retrenchment or termination shall be deemed to be an industrial dispute notwithstanding that no other worker nor any Trade Union is a party to the dispute.

This says in Chapter II what the second limb of section 2(q) says in the definitions, and the repetition is deliberate: it puts the rule where a worker reading about grievances will find it.

Its effect is to remove the espousal requirement for the four listed events, so that a single dismissed worker's dispute is an industrial dispute in its own right. Under the repealed Industrial Disputes Act 1947 that result needed a separate section, inserted years after the Act was passed, because the courts had held that an individual's dispute was not an industrial dispute unless a body of workmen took it up. See ['Industrial Dispute', and the Individual Dispute].

The two committees compared

A worked example

The facts. A packaging plant in Wada employs 1,200 workers, of whom 300 are women. It has a registered union recognised as the sole negotiating union.

Must it have a Works Committee? Only if the appropriate Government requires one by general or special order under section 3(1). The threshold of one hundred is comfortably crossed, but the obligation depends on that order.

Must it have a Grievance Redressal Committee? Yes. Section 4(1) says every industrial establishment employing twenty or more workers shall have one or more, and no Government order is needed.

How is it composed? Equal numbers on each side, section 4(2); not more than ten members in total, section 4(4); and, women being 300 of 1,200, that is one quarter of the workforce, so at least a quarter of the committee must be women, section 4(4) proviso. On a committee of ten that is at least two and a half, so at least three. The chairperson comes from the employer's side one year and the workers' side the next, section 4(3).

Meera's leave application was refused on 3 March, which she says breached the standing orders. She may apply to the Committee under section 4(5) at any time within one year of that date. The Committee may complete its proceedings within thirty days, section 4(6).

The Committee has ten members, five from each side. Six vote to reject Meera's grievance: all five of the employer's representatives and one worker representative. Is that a decision? No. Section 4(7) requires both a majority of the Committee and the agreement of more than half of the members representing the workers. Only one of the five workers' representatives agreed, which is not more than half. It is therefore deemed that no decision could be arrived at.

What can Meera do? She is a worker whose grievance was not resolved. Under section 4(8) she may, within sixty days from the expiry of the thirty-day period, file an application for conciliation to the conciliation officer, through the Trade Union of which she is a member.

Change it: Meera is not a member of any union. She faces the difficulty section 4(8) creates, because the route it gives runs through a union she does not belong to. That is a real limitation of the section and is worth saying so in an answer.

Change it again: instead of a leave refusal, Meera is dismissed. Now section 4(9) applies of its own force: her dispute with the employer connected with the dismissal is deemed to be an industrial dispute notwithstanding that no other worker and no Trade Union is a party. She is not confined to the grievance machinery at all.

What this does NOT mean

It does not mean the Works Committee decides disputes. Its duty under section 3(3) is to promote amity and good relations and to comment upon matters of common interest.

It does not mean the two committees have the same threshold. One hundred for the Works Committee, twenty for the Grievance Redressal Committee, and three hundred for standing orders under section 28. Three different numbers.

It does not mean an employer must constitute a Works Committee on his own initiative. Section 3(1) operates through a general or special order of the appropriate Government.

It does not mean a bare majority carries a grievance decision. Section 4(7) requires the majority of the Committee and the agreement of more than half of the workers' representatives, failing which no decision is deemed to have been arrived at.

It does not mean thirty days is a jurisdictional deadline. Section 4(6) says the Committee may complete its proceedings within thirty days; the consequence of not doing so is the worker's right under section 4(8) to go to conciliation.

It does not mean these bodies replace the Tribunal. They are the first rung. Conciliation, arbitration and adjudication follow, and are the subject of the next chapters.

Limits, criticism and amendments

The Works Committee has been criticised since long before the Code, and the criticism survives it: a body that may only promote and comment has no power to make anything happen, and its usefulness depends entirely on whether the employer takes it seriously. Making its very existence depend on a Government order weakens it further.

Section 4(8) requires the worker to go through his Trade Union, which is a strange requirement in a provision designed for individual grievances. A worker who is not a union member, which describes a great many workers in a plant of twenty, is left without the route the section provides.

The thirty-day period in section 4(6) is permissive, so a committee that simply does not meet delays a worker by thirty days before he can move on.

And the twenty-worker threshold, though low, is still a threshold. Below it the Code provides no in-house grievance machinery at all.

Against that, section 4 is a genuine advance. The repealed Act had no equivalent of a statutory grievance committee with a composition, a chairperson, a time limit and a decision rule; the women's proportional representation proviso has no ancestor at all; and the double lock in section 4(7) is a careful piece of drafting that keeps an evenly balanced body from being captured by one side.

Quick revision

• Section 3, Works Committee: 100 workers, employed or employed on any day in the preceding twelve months; constituted when the appropriate Government so requires by general or special order; workers' representatives not fewer than the employer's; chosen from among the workers in consultation with their registered Trade Union; duty to promote amity and good relations and to comment on matters of common interest. It decides nothing.
• Section 4, Grievance Redressal Committee: 20 workers; shall have one or more; equal representation; chair rotates annually between the sides; not more than ten members; women's representation not less than their proportion in the workforce.
• 4(5) application by any aggrieved worker within one year of the cause of action. 4(6) proceedings may be completed within thirty days.
• 4(7): decision by majority of the Committee AND agreement of more than half of the workers' representatives; otherwise deemed that no decision could be arrived at.
• 4(8): aggrieved, or unresolved in thirty days, then within sixty days apply for conciliation, through the Trade Union of which he is a member.
• 4(9): a dispute about an individual worker's discharge, dismissal, retrenchment or termination is deemed an industrial dispute, notwithstanding that no other worker and no Trade Union is a party.

Test yourself

1. Compare the Works Committee with the Grievance Redressal Committee. The Works Committee, section 3, is constituted where one hundred or more workers are employed, or were employed on any day in the preceding twelve months, and only when the appropriate Government so requires by general or special order; it consists of representatives of the employer and the workers, the workers' representatives being not fewer than the employer's and chosen from among the workers in consultation with their registered union; and its duty is to promote measures for securing and preserving amity and good relations and to comment upon matters of common interest. It decides nothing. The Grievance Redressal Committee, section 4, must be constituted by the employer himself in every establishment employing twenty or more workers, and there may be more than one; it has equal numbers from each side, not more than ten members in all, women represented at not less than their proportion in the workforce, and a chairperson rotating annually between the sides; and it decides individual grievances on application, within time limits, by the voting rule in section 4(7).

2. State the decision rule in section 4(7) and explain why it is drawn that way. The decision shall be made on the basis of the majority view of the Committee, provided more than half of the members representing the workers have agreed to it; otherwise it shall be deemed that no decision could be arrived at. The double requirement exists because the Committee is evenly balanced between the two sides. Without it, the employer's representatives together with a single worker representative could carry a decision against the rest of the workers' side, and the Committee would become a means of legitimising the employer's position. Requiring the workers' side, as a body, to agree makes that impossible, and where agreement cannot be reached the Code declares the deadlock rather than concealing it, which triggers the worker's right to go to conciliation under section 4(8).

3. A worker's grievance is not decided within thirty days. What are his options? Under section 4(8) he may, within sixty days from the expiry of the period specified in section 4(6), file an application for the conciliation of the grievance to the conciliation officer, through the Trade Union of which he is a member, in the prescribed manner. The same right is available to a worker who is aggrieved by a decision that was made, running from the date of the decision.

4. What is the effect of section 4(9)? Where an employer discharges, dismisses, retrenches or otherwise terminates the services of an individual worker, any dispute or difference between that worker and his employer connected with, or arising out of, that event is deemed to be an industrial dispute notwithstanding that no other worker and no Trade Union is a party to it. It removes the need for espousal in those four cases, and it repeats in Chapter II what the second limb of section 2(q) provides in the definitions.

5. What must the composition of a Grievance Redressal Committee be in an establishment where 400 of 1,000 workers are women? Equal numbers representing the employer and the workers, section 4(2); a chairperson selected alternately from the two sides on a rotational basis every year, section 4(3); not more than ten members in total, section 4(4); and, by the proviso to section 4(4), adequate representation of women workers, which shall not be less than the proportion of women workers to the total workers, that is not less than two-fifths. On a committee of ten, at least four members must be women.

6. "The Works Committee is the first forum for deciding an industrial dispute." Comment. The statement is wrong on its central point. Section 3(3) confines the Works Committee's duty to promoting measures for securing and preserving amity and good relations between the employer and workers and, to that end, commenting upon matters of common interest. It has no power to decide anything. The in-house body that decides is the Grievance Redressal Committee under section 4, and even that is confined to disputes arising out of individual grievances. It is also inaccurate to call the Works Committee the first forum in every case, since its constitution depends on the appropriate Government requiring it by general or special order, whereas the Grievance Redressal Committee must be constituted by the employer in every establishment employing twenty or more workers.

Effect a change means to bring it into operation, not merely to decide on it. The section prohibits effecting, so an employer may plan and announce without offending it.

Workers likely to be affected is the class entitled to notice. It is not the whole workforce and not only those certainly affected.

Emergent situation means one that has arisen suddenly and requires immediate action.

Casual, in item 11 of the Third Schedule, means occasional or irregular, as opposed to a settled increase or reduction in numbers.

Rationalisation means reorganising work or processes to make them more efficient, which typically means with fewer people.

Section 40: the prohibition, and its two limbs

No employer, who proposes to effect any change in the conditions of service applicable to any worker in respect of any matter specified in the Third Schedule, shall effect such change,

(i) without giving to the workers likely to be affected by such change a notice in such manner as may be prescribed of the nature of the change proposed to be effected; or

(ii) within twenty-one days of giving such notice.

Take the elements one at a time.

"Proposes to effect any change". The section bites on a proposal to change, so it applies to alterations of an existing position and not to the terms on which a new worker is engaged.

"In the conditions of service applicable to any worker". Any worker, so a change affecting one person is within the section as much as one affecting a department.

"In respect of any matter specified in the Third Schedule". This is the gateway, and it is a closed list. A change outside the eleven items needs no notice under section 40.

Limb (i): the notice. It goes to the workers likely to be affected, in the prescribed manner, and it must state the nature of the change proposed to be effected. It is not enough to announce that something will change; the notice must say what.

Limb (ii): the wait. The change may not be effected within twenty-one days of giving the notice.

The two limbs are cumulative and that is the commonest error. An employer who gives a perfect notice and implements the change the following morning has complied with (i) and broken (ii). The prohibition is against effecting the change without notice or within twenty-one days of it, so both requirements must be met.

The Third Schedule: the eleven matters

Section 40 operates only on these, and MU can ask for the list.

• 1. Wages, including the period and mode of payment.
• 2. Contribution paid or payable by the employer to any provident fund or pension fund, or for the benefit of the workers under any law in force.
• 3. Compensatory and other allowances.
• 4. Hours of work and rest intervals.
• 5. Leave with wages and holidays.
• 6. Starting, alteration or discontinuance of shift working otherwise than in accordance with standing orders.
• 7. Classification by grades.
• 8. Withdrawal of any customary concession or privilege, or change in usage.
• 9. Introduction of new rules of discipline, or alteration of existing rules, except in so far as they are provided in standing orders.
• 10. Rationalisation, standardisation or improvement of plant or technique which is likely to lead to retrenchment of workers.
• 11. Any increase or reduction, other than casual, in the number of persons employed or to be employed in any occupation or process or department or shift, not occasioned by circumstances over which the employer has no control.

Read the list in four groups and it becomes memorable.

Money: items 1, 2 and 3. Wages and how they are paid, employer contributions to provident and pension funds, and allowances.

Time: items 4, 5 and 6. Hours and rest intervals, leave with wages and holidays, and shift working.

Status and rules: items 7, 8 and 9. Grading, the withdrawal of a customary concession or privilege, and new or altered rules of discipline.

Jobs: items 10 and 11. Rationalisation likely to lead to retrenchment, and any non-casual increase or reduction in the number of persons employed.

Two items carry qualifications that are themselves examinable.

Items 6 and 9 both carve out standing orders. A change of shift working made in accordance with standing orders is outside item 6, and a disciplinary rule already provided in standing orders is outside item 9. The logic is that those matters have already been through certification under Chapter IV, where the workers were noticed, heard, and could appeal. Chapter V does not require the process twice.

Item 11 carries two qualifications. The change must be other than casual, so a temporary fluctuation is outside; and it must not be occasioned by circumstances over which the employer has no control, so a reduction forced on him by something outside his control is outside as well.

And item 10 is the early-warning provision. Rationalisation or improvement of plant or technique likely to lead to retrenchment requires notice at the point when it is proposed, which is well before anybody is actually retrenched under Chapter IX.

The proviso: when no notice is needed

No notice is required for effecting a change:

• (a) where the change is effected in pursuance of any settlement or award;
• (b) where the workers likely to be affected are persons to whom the Fundamental and Supplementary Rules, the Civil Services (Classification, Control and Appeal) Rules, the Civil Services (Temporary Service) Rules, the Revised Leave Rules, the Civil Services Regulations, the Civilians in Defence Services (Classification, Control and Appeal) Rules, the Indian Railway Establishment Code, or any other rules or regulations notified by the appropriate Government, apply;
• (c) in case of an emergent situation which requires change of shift or shift working, otherwise than in accordance with standing orders, in consultation with the Grievance Redressal Committee;
• (d) if the change is effected in accordance with the orders of the appropriate Government or in pursuance of any settlement or award.

Each exception has an obvious rationale and a student should give it.

(a) and (d) overlap on settlements and awards, and the reason is the same: the change has already been through a process in which the workers were represented. A settlement is an agreement to which they were party; an award is a decision after a hearing. Requiring notice of a change the workers themselves agreed to, or that a Tribunal ordered, would be pointless.

(b) is the same exclusion that appears in section 28(2) for standing orders: people governed by published civil service rules already have a settled and public code of conditions.

(c) is the only exception with a condition attached, and the condition matters. An emergent change of shift is permitted without notice, but only in consultation with the Grievance Redressal Committee. So the workers' voice is not removed; it is compressed from twenty-one days into a consultation. This is the one place in Chapter V where the section 4 committee is given an operational role, and it is a favourite short question.

Section 41: the power to exempt

Where the appropriate Government is of opinion that the application of section 40 to any class of industrial establishments or to any class of worker employed in any industrial establishment affects the employers so prejudicially that such application may cause serious repercussion on the industry concerned, and that public interest so requires, it may, by notification, direct that section 40 shall not apply, or shall apply subject to such conditions as may be specified, to that class.

The test has two limbs and both must be satisfied. A serious repercussion on the industry, and the requirement of the public interest. It is not enough that compliance is inconvenient.

And the exemption may be partial. The Government may disapply the section or apply it subject to conditions, and it operates by class rather than by individual establishment.

A worked example

The facts. A packaging plant in Wada, 1,200 workers, with certified standing orders and a Grievance Redressal Committee. Its management proposes six things in one month. Notice under section 40 is required for which of them?

One: reduce the night-shift allowance from 300 rupees to 200 rupees. Notice required. Item 3, compensatory and other allowances. Notice to the workers likely to be affected, and no change for twenty-one days.

Two: move the general shift from 9 a.m. to 8 a.m., which the certified standing orders permit the employer to do. No notice required. Item 6 covers the starting, alteration or discontinuance of shift working otherwise than in accordance with standing orders. This change is in accordance with them, so it is outside the item.

Three: introduce a new rule that mobile telephones may not be carried on the shop floor, a matter on which the standing orders are silent. Notice required. Item 9, introduction of new rules of discipline, except in so far as they are provided in standing orders. They are not.

Four: pay wages by bank transfer instead of in cash. Notice required. Item 1 covers wages including the period and mode of payment, and the mode is exactly what is changing.

Five: install automated sealing machines that will make forty jobs unnecessary. Notice required. Item 10, rationalisation, standardisation or improvement of plant or technique which is likely to lead to retrenchment. The notice is due now, when the change is proposed, not later when the workers are retrenched. And item 11 may also be engaged by the consequent reduction in numbers, which is neither casual nor occasioned by circumstances outside the employer's control.

Six: a boiler fails at 2 a.m. and the night shift must be sent home and the morning shift started three hours early. No notice required, by clause (c) of the proviso: an emergent situation requiring a change of shift or shift working, otherwise than in accordance with standing orders. But the exception is conditional: it must be done in consultation with the Grievance Redressal Committee.

Now the timing trap. On proposal one, the employer posts a proper notice on 1 April stating the nature of the change, and pays the reduced allowance in the wages for April, paid on 7 April. He has broken the section. Limb (ii) forbids effecting the change within twenty-one days of giving the notice, and only six days had passed. Both limbs must be satisfied.

And a question of scope. The employer says the allowance change affects only the 260 night-shift workers, so he need not notify the rest. He is right. Section 40(i) requires notice to the workers likely to be affected by such change.

What this does NOT mean

It does not mean the employer needs consent. Section 40 requires notice and a wait. It does not give the workers a veto, and it does not require agreement.

It does not mean twenty-one days is an alternative to notice. The two limbs are cumulative: no change without notice, and no change within twenty-one days of it.

It does not mean every change needs notice. Only a change in respect of a matter specified in the Third Schedule, which is a closed list of eleven items.

It does not mean a shift change always needs notice. Item 6 excludes a change made in accordance with standing orders, and clause (c) of the proviso excuses an emergent change made in consultation with the Grievance Redressal Committee.

It does not mean notice goes to the whole workforce. It goes to the workers likely to be affected.

It does not mean an exemption under section 41 can be given to one employer because compliance is awkward. The section requires an opinion that the application affects employers so prejudicially that it may cause serious repercussion on the industry concerned, and that the public interest so requires, and it operates by class.

Limits, criticism and amendments

The protection is procedural and modest. Three weeks and a piece of paper do not prevent a change the employer is determined to make; they only prevent him making it silently. That is the point, but it is also the limit.

The Third Schedule is a closed list, so a change in conditions of service that Parliament did not think of needs no notice at all. Item 11's own qualifications, "other than casual" and "not occasioned by circumstances over which the employer has no control", leave real room for argument.

Clause (c) of the proviso is the most open-textured exception, because "emergent situation" is not defined and the employer is the person who decides in the first instance whether one exists. The requirement of consultation with the Grievance Redressal Committee is the only check, and section 4(7)'s decision rule does not apply to a consultation.

And section 41's exemption power is broad, resting on an opinion about serious repercussion and public interest, with no procedure prescribed for hearing the workers before a class exemption is notified.

Quick revision

• Section 40: no employer proposing a change in conditions of service in respect of a Third Schedule matter shall effect it (i) without giving the workers likely to be affected a notice of the nature of the change, or (ii) within twenty-one days of giving it. Both limbs.
• Third Schedule, eleven items. Money: wages including period and mode; provident or pension fund contributions; compensatory and other allowances. Time: hours of work and rest intervals; leave with wages and holidays; shift working otherwise than in accordance with standing orders. Status and rules: classification by grades; withdrawal of a customary concession or privilege; new or altered rules of discipline except as provided in standing orders. Jobs: rationalisation, standardisation or improvement of plant or technique likely to lead to retrenchment; any non-casual increase or reduction in numbers not occasioned by circumstances beyond the employer's control.
• Proviso, no notice needed: change in pursuance of a settlement or award; workers governed by the civil service and comparable rules; an emergent situation requiring a change of shift or shift working otherwise than in accordance with standing orders, in consultation with the Grievance Redressal Committee; or a change in accordance with the orders of the appropriate Government.
• Section 41: the appropriate Government may, by notification, disapply section 40 or apply it subject to conditions, to a class of establishments or workers, where application affects employers so prejudicially as to cause serious repercussion on the industry and the public interest so requires.

Test yourself

1. State the requirement in section 40 and identify the trap in it. No employer who proposes to effect any change in the conditions of service applicable to any worker in respect of a matter specified in the Third Schedule shall effect that change without giving the workers likely to be affected a notice, in the prescribed manner, of the nature of the change proposed, or within twenty-one days of giving such notice. The trap is that the two limbs are cumulative: an employer who gives a faultless notice and then implements the change before twenty-one days have run has still broken the section.

2. List the matters in the Third Schedule. Wages, including the period and mode of payment; contribution paid or payable by the employer to any provident fund or pension fund or for the benefit of the workers under any law in force; compensatory and other allowances; hours of work and rest intervals; leave with wages and holidays; the starting, alteration or discontinuance of shift working otherwise than in accordance with standing orders; classification by grades; withdrawal of any customary concession or privilege or change in usage; introduction of new rules of discipline or alteration of existing rules, except in so far as they are provided in standing orders; rationalisation, standardisation or improvement of plant or technique likely to lead to retrenchment of workers; and any increase or reduction, other than casual, in the number of persons employed or to be employed in any occupation, process, department or shift, not occasioned by circumstances over which the employer has no control.

3. In what circumstances is no notice required? Under the proviso to section 40: where the change is effected in pursuance of any settlement or award; where the workers likely to be affected are persons to whom the Fundamental and Supplementary Rules, the Civil Services (Classification, Control and Appeal) Rules, the Civil Services (Temporary Service) Rules, the Revised Leave Rules, the Civil Services Regulations, the Civilians in Defence Services (Classification, Control and Appeal) Rules, the Indian Railway Establishment Code or other notified rules apply; in an emergent situation requiring a change of shift or shift working otherwise than in accordance with standing orders, in consultation with the Grievance Redressal Committee; and where the change is effected in accordance with the orders of the appropriate Government or in pursuance of a settlement or award.

4. An employer installs new machinery that will make thirty jobs unnecessary. When must he give notice? When he proposes to effect the change, not when the workers are eventually retrenched. Item 10 of the Third Schedule covers rationalisation, standardisation or improvement of plant or technique which is likely to lead to retrenchment of workers, so the notice obligation is triggered by the proposal itself. Item 11 may also be engaged by the resulting reduction in the number of persons employed, that reduction being neither casual nor occasioned by circumstances beyond the employer's control. The change may not be effected within twenty-one days of the notice.

5. Why do items 6 and 9 carve out standing orders? Because those matters have already been through certification under Chapter IV, in which the workers were given notice, invited to comment, heard, and given a right of appeal, and in which the certifying officer adjudicated on the fairness and reasonableness of the provisions. A change of shift working made in accordance with certified standing orders, or a disciplinary rule already provided in them, has therefore already been the subject of a process, and Chapter V does not require it to be repeated.

6. When may the appropriate Government exempt an establishment from section 40? Under section 41, where it is of opinion that the application of section 40 to a class of industrial establishments, or to a class of workers employed in an industrial establishment, affects the employers so prejudicially that such application may cause serious repercussion on the industry concerned, and that the public interest so requires. It then acts by notification, and may direct either that the section shall not apply or that it shall apply subject to specified conditions. Both limbs of the test must be satisfied, and the power operates by class rather than for a single employer.

Umpire is the person who decides where an even number of arbitrators is equally divided.

Settlement, section 2(zi), is one arrived at in conciliation, or a written agreement outside conciliation signed as prescribed with copies to the authorised officer and the conciliation officer.

Failure report is the report under section 53(4) that no settlement was arrived at. It is the document that starts the ninety days.

Section 43: the conciliation officer

43(1): the appropriate Government may, by notification, appoint such number of persons as it thinks fit to be conciliation officers, charged with the duty of mediating in and promoting the settlement of industrial disputes.

43(2): a conciliation officer may be appointed for a specified area, or for specified industries in a specified area, or for one or more specified industries, and either permanently or for a limited period.

Note the description of the office in sub-section (1), because it fixes what he is: a mediator and a promoter of settlement. He is not a judge and he decides nothing. Everything he can do is directed at getting the parties to agree.

Section 53: the conciliation proceeding

53(1): when he must act, and the two-year long stop

Where any industrial dispute exists or is apprehended, or a notice under section 62 has been given, the conciliation officer shall hold conciliation proceedings in the prescribed manner.

A proviso bars him from holding any such proceedings after two years from the date on which the industrial dispute arose.

Three points.

The duty is mandatory: "shall". He does not choose whether to conciliate.

"Exists or is apprehended" is wide. He may act before the dispute has broken out.

A notice under section 62 triggers it independently. Section 62 is the notice of a strike or lock-out, which belongs to Module III. The moment such a notice is given, conciliation begins, which is how the Code turns the notice period into a negotiating period.

And the two-year bar is a real limitation period, running from the date the dispute arose, not from the date of any decision or refusal.

53(2): what he does

For the purpose of bringing about a settlement he shall, without delay, investigate the dispute and all matters affecting the merits and the right settlement of it, and may do all such things as he thinks fit for the purpose of inducing the parties to come to a fair and amicable settlement.

Read the width of that second limb. He may do all such things as he thinks fit. Combined with the powers in section 49, which give him the powers of a civil court to enforce attendance, compel documents and issue commissions, and the power under section 49(2) to enter the premises occupied by the establishment after reasonable notice, the conciliation officer is a substantial investigator even though he decides nothing.

53(3) and (4): the two reports

If a settlement is arrived at, on the dispute or on any of the matters in dispute, he sends a report to the appropriate Government or its authorised officer, together with a memorandum of the settlement signed by the parties.

If no settlement is arrived at, he sends, as soon as practicable after the close of the investigation, to the concerned parties and to the appropriate Government, a full report setting forth the steps he took to ascertain the facts and to bring about a settlement, a full statement of those facts and circumstances, and the reasons why, in his opinion, a settlement could not be arrived at.

The failure report is a substantial document and that matters. It is not a bare certificate that conciliation failed; it records the facts, the steps and the reasons, and it goes to the parties as well as the Government. It is also the trigger for the ninety days in sub-section (6).

53(5): the time limits

Notwithstanding sub-section (4), the report shall be sent to the concerned parties and the appropriate Government within forty-five days of the commencement of the conciliation proceedings, or within such shorter period as the appropriate Government fixes.

First proviso: where the conciliation officer receives a notice under section 62, he shall send the report within fourteen days of the commencement of the proceedings.

Second proviso: subject to the approval of the conciliation officer, the time may be extended by such period as may be agreed upon in writing by the concerned parties.

The fourteen-day rule is the one to remember and the reason is obvious once seen. A section 62 notice means a strike or lock-out is coming. Forty-five days of conciliation would be useless, because the stoppage would have happened. So where the clock is already running, the report is due in a fortnight.

And note who can extend. Not the officer alone and not the parties alone: the parties must agree in writing and the officer must approve.

53(6): straight to the Tribunal

Any concerned party may make application in the prescribed form to the Tribunal in the matters not settled by the conciliation officer under this section within ninety days from the date on which the report under sub-section (4) is received to the concerned party and the Tribunal shall decide such application in the prescribed manner.

This sub-section is the most important change the Code made to the dispute machinery, and a student who understands why will answer any question on "mechanism to dispute resolution" well.

Under the repealed Industrial Disputes Act 1947, adjudication depended on a REFERENCE by the appropriate Government. A dispute did not reach a Tribunal because a party took it there; it reached a Tribunal because the Government decided to send it. The Government could refuse. It could sit on the file. Its refusal was challengeable only on limited administrative-law grounds, and by the time that challenge was decided the dispute was years old. The reference power was the single greatest bottleneck in Indian industrial adjudication, and it made the Government a gatekeeper in disputes to which it was often, as a public-sector employer, a party.

Section 53(6) removes the gate. Any concerned party may apply directly to the Tribunal, in the prescribed form, in the matters not settled, within ninety days from the date the failure report is received by that party. There is no reference, no Government discretion and no gatekeeper.

Three limits are still worth noting. The right arises on the failure report, so conciliation is a precondition. The period is ninety days from receipt of that report by the party applying. And it covers "the matters not settled", so a partial settlement leaves only the unsettled matters for the Tribunal.

Section 60: when proceedings begin and end

60(1): a conciliation proceeding is deemed to have commenced on the date on which the first meeting is held by the conciliation officer in an industrial dispute after the receipt of the notice of strike or lock-out.

60(2): a conciliation proceeding is deemed to have concluded:

• (a) where a settlement is arrived at, when a memorandum of the settlement is signed by the parties;
• (b) where no settlement is arrived at, when failure of conciliation is recorded by the conciliation officer; or
• (c) when a reference is made to a National Industrial Tribunal during the pendency of conciliation proceedings.

60(3): proceedings before an arbitrator, a Tribunal or a National Industrial Tribunal are deemed to have commenced on the date of filing the application or appeal, or on the date of reference for arbitration or adjudication, and to have concluded on the date on which the award becomes enforceable.

These deeming rules are not decoration. The forty-five and fourteen day periods in section 53(5) run from the commencement of the conciliation proceedings, so section 60(1) tells you when the clock starts. And the definition of a strike's legality in Chapter III of Module III depends on whether a conciliation proceeding is pending, so section 60(2) tells you when it stops.

Section 42: voluntary arbitration

Arbitration under the Code is voluntary: it happens because the parties agree, and it sits beside conciliation rather than after it.

42(1): where any industrial dispute exists or is apprehended and the employer and the workers agree to refer it to arbitration, they may, by a written agreement, refer the dispute to arbitration, and the reference shall be to such person or persons as arbitrator or arbitrators as may be specified in the agreement.

42(2): where the agreement provides for reference to an even number of arbitrators, it shall provide for the appointment of another person as umpire, who shall enter upon the reference if the arbitrators are equally divided, and the award of the umpire shall prevail and shall be deemed to be the arbitration award for the purposes of the Code.

42(3): the agreement shall be in such form and signed by the parties in such manner as may be prescribed.

42(4): a copy of the arbitration agreement shall be forwarded to the appropriate Government and the conciliation officer.

42(5): where a dispute has been referred to arbitration and the appropriate Government is satisfied that the persons making the reference represent the majority of each party, it may issue a notification in the prescribed manner; and when such a notification is issued, employers and workers who are not parties to the arbitration agreement but are concerned in the dispute shall be given an opportunity of presenting their case before the arbitrator.

A proviso to sub-section (5) provides how the workers are to be represented before the arbitrator where the dispute is other than the termination of an individual worker by discharge, dismissal, retrenchment or otherwise:

• (a) where there is a negotiating union or negotiating council, by that union or council;
• (b) where there is none, by the Trade Union;
• (c) where there is no Trade Union, by such representatives of the workers chosen in such manner as may be prescribed.

Sub-section (5) is the interesting one and it repays a sentence of explanation. An arbitration agreement binds only those who made it. But an industrial dispute is rarely confined to the signatories: other workers and other employers may be concerned in the same question. So where the Government is satisfied that the persons referring represent the majority of each party, it may notify the reference, and the effect is to open the arbitration to everyone concerned by giving them an opportunity of presenting their case. The award can then settle the dispute rather than a part of it, and section 57(3) makes an enforceable arbitration award binding on the wider class.

Sub-section (2) is the provision students forget. An even number of arbitrators can deadlock, so the agreement must provide an umpire, and where the arbitrators divide equally the umpire's award prevails and is treated as the arbitration award.

Conciliation, arbitration and adjudication compared

A worked example

The facts. At a packaging plant in Wada the union demands a revision of the night-shift allowance. The Grievance Redressal Committee cannot help, because this is a collective demand and not an individual grievance. The employer refuses. On 1 June the union serves a notice of strike under section 62.

What happens first? The conciliation officer's duty under section 53(1) is triggered twice over: an industrial dispute exists, and a notice under section 62 has been given. He shall hold conciliation proceedings.

When do the proceedings commence? Under section 60(1), on the date the first meeting is held by the conciliation officer after receipt of the notice of strike. Say that is 5 June.

By when must he report? Because he received a section 62 notice, the first proviso to section 53(5) applies: within fourteen days of commencement, so by 19 June. Without the notice it would have been forty-five days.

He investigates. Under section 53(2) he may do all such things as he thinks fit to induce a fair and amicable settlement; under section 49(2) he may, after reasonable notice, enter the premises; and under section 49(3) he has the powers of a civil court to enforce attendance, compel documents and issue commissions.

Route one: the parties settle. He sends a report to the appropriate Government together with a memorandum of the settlement signed by the parties, section 53(3). The proceeding is deemed concluded on the date that memorandum is signed, section 60(2)(a). The settlement is a settlement within section 2(zi) because it was arrived at in conciliation, and its binding effect and duration are governed by sections 57 and 58.

Route two: they do not settle. He sends a full report to the parties and the Government setting out the steps taken, the facts and the reasons why no settlement was reached, section 53(4). The proceeding is deemed concluded when he records the failure, section 60(2)(b). The union receives the report on 20 June.

What can the union do now, and this is the part that used to be impossible? Under section 53(6) it may apply directly to the Tribunal, in the prescribed form, in the matters not settled, within ninety days of 20 June, that is by about 18 September. It does not need a reference by the appropriate Government, and the Government cannot prevent it.

Route three: the parties prefer to choose their own decider. At any point while the dispute exists or is apprehended they may, by written agreement in the prescribed form and signed in the prescribed manner, refer it to arbitration under section 42(1) and (3), and must forward a copy to the appropriate Government and the conciliation officer, section 42(4).

They name two arbitrators. Section 42(2) requires the agreement to provide for an umpire, who enters the reference if the two are equally divided, and whose award then prevails and is deemed to be the arbitration award.

A second union at the plant, which did not sign, objects that it will be bound by an award it had no part in. If the appropriate Government is satisfied that those who made the reference represent the majority of each party, it may notify the reference under section 42(5), and the effect is that employers and workers not parties to the agreement but concerned in the dispute must be given an opportunity of presenting their case. The dispute being a collective one rather than the termination of an individual worker, the proviso applies and the workers are represented by the negotiating union or council, or failing that by the Trade Union, or failing that by representatives chosen as prescribed.

Finally, a limitation point. Suppose the union does nothing for three years and then asks the conciliation officer to act. The proviso to section 53(1) forbids him from holding conciliation proceedings after two years from the date on which the dispute arose.

What this does NOT mean

It does not mean the conciliation officer decides the dispute. Section 43(1) charges him with mediating in and promoting settlement. He investigates and persuades; he does not adjudicate.

It does not mean conciliation is optional for him. Section 53(1) says he shall hold proceedings.

It does not mean a Government reference is needed to reach the Tribunal. Section 53(6) lets a concerned party apply directly. That is the change from the repealed Act.

It does not mean the ninety days run from the failure of conciliation. They run from the date the section 53(4) report is received by the concerned party.

It does not mean the report is always due in forty-five days. Where a section 62 notice was received it is fourteen.

It does not mean arbitration under section 42 can be imposed. It requires a written agreement between the employer and the workers. What section 42(5) allows the Government to do is open a consented arbitration to others concerned, not to create one.

It does not mean an even number of arbitrators is forbidden. It is allowed, provided the agreement appoints an umpire.

Limits, criticism and amendments

Section 53(6) is a real reform and it is the strongest thing in this chapter, but it has a gap: it gives the right to apply on a failure report, so a conciliation officer who never reports leaves the party without the trigger. The forty-five and fourteen day limits in section 53(5) are the answer, but the section attaches no consequence to their breach.

The two-year bar in the proviso to section 53(1) is short for a workforce that may take time to organise, and it runs from the date the dispute arose rather than from any decision.

Voluntary arbitration remains little used in India, and the reason is structural rather than legal: it requires the two sides to agree on a neutral at the very moment they are furthest apart. Section 42 is well drafted and, in practice, rarely invoked.

And the conciliation officer's independence rests on his appointment by the appropriate Government, which in a public-sector dispute is also the employer. The Code does not address that, though the removal of the reference requirement in section 53(6) reduces the consequences of it considerably.

Quick revision

• Section 43: the appropriate Government appoints conciliation officers by notification, charged with mediating in and promoting the settlement of industrial disputes; for an area, for industries, permanently or for a limited period.
• Section 53(1): he shall conciliate where a dispute exists or is apprehended or a section 62 notice is given. Proviso: not after two years from the date the dispute arose.
• 53(2): investigate without delay and do all such things as he thinks fit to induce a fair and amicable settlement.
• 53(3): settlement, report plus a memorandum signed by the parties. 53(4): failure, a full report of steps, facts and reasons, to the parties and the Government.
• 53(5): report within forty-five days of commencement; fourteen days where a section 62 notice was received; extension only by written agreement of the parties with the officer's approval.
• 53(6): any concerned party may apply directly to the Tribunal in the matters not settled, within ninety days of receiving the failure report. No Government reference, unlike the repealed Act.
• Section 60(1): conciliation commences on the first meeting after receipt of the strike or lock-out notice. 60(2): concludes on the signing of the memorandum, on the recording of failure, or on a reference to a National Industrial Tribunal. 60(3): arbitration and adjudication commence on filing or reference and conclude when the award becomes enforceable.
• Section 42: voluntary arbitration by written agreement where a dispute exists or is apprehended; an even number of arbitrators requires an umpire, whose award prevails; the agreement is in the prescribed form and a copy goes to the Government and the conciliation officer; where those referring represent the majority of each party the Government may notify, and others concerned must then be given an opportunity of presenting their case, the workers being represented by the negotiating union or council, or the Trade Union, or prescribed representatives.

Test yourself

1. Describe the conciliation machinery under the Code. Section 43 empowers the appropriate Government to appoint conciliation officers by notification, charged with the duty of mediating in and promoting the settlement of industrial disputes, for a specified area or specified industries and permanently or for a limited period. Under section 53(1) the officer shall hold conciliation proceedings where an industrial dispute exists or is apprehended or a notice under section 62 has been given, but not after two years from the date the dispute arose. Under section 53(2) he must without delay investigate the dispute and all matters affecting its merits and right settlement, and may do all such things as he thinks fit to induce a fair and amicable settlement. If a settlement is reached he reports it with a memorandum signed by the parties, section 53(3); if not, he sends the parties and the Government a full report of the steps taken, the facts and the reasons no settlement was reached, section 53(4), within forty-five days of commencement or fourteen days where a section 62 notice was received, section 53(5).

2. How does a dispute now reach the Tribunal, and how is that different from the repealed Act? Under section 53(6) any concerned party may apply in the prescribed form directly to the Tribunal, in the matters not settled by the conciliation officer, within ninety days from the date the failure report under section 53(4) is received by that party. Under the Industrial Disputes Act 1947 adjudication depended on a reference by the appropriate Government, which could refuse or delay, making the Government a gatekeeper in disputes to which it was often itself a party. The Code removes the reference requirement entirely.

3. Why is the reporting period fourteen days in some cases and forty-five in others? Because of what has already happened. The general period under section 53(5) is forty-five days from the commencement of the conciliation proceedings. But where the conciliation officer has received a notice under section 62, a strike or lock-out is imminent, and forty-five days of conciliation would be pointless because the stoppage would occur first. The first proviso therefore requires the report within fourteen days, which turns the statutory notice period into a period of active conciliation.

4. Explain voluntary arbitration under section 42. Where an industrial dispute exists or is apprehended and the employer and the workers agree to refer it to arbitration, they may do so by a written agreement in the prescribed form, signed in the prescribed manner, naming the arbitrator or arbitrators, and a copy must be forwarded to the appropriate Government and the conciliation officer. Where the agreement provides for an even number of arbitrators it must also provide for an umpire, who enters the reference if the arbitrators are equally divided and whose award prevails and is deemed to be the arbitration award. Where the appropriate Government is satisfied that those making the reference represent the majority of each party it may issue a notification, whereupon employers and workers who are not parties to the agreement but are concerned in the dispute must be given an opportunity of presenting their case, the workers being represented by the negotiating union or council, or where there is none by the Trade Union, or where there is none by representatives chosen as prescribed.

5. When does a conciliation proceeding commence and conclude? Under section 60(1) it is deemed to have commenced on the date on which the first meeting is held by the conciliation officer in the dispute after the receipt of the notice of strike or lock-out. Under section 60(2) it is deemed to have concluded where a settlement is arrived at, when the memorandum of settlement is signed by the parties; where no settlement is arrived at, when failure of conciliation is recorded by the officer; or when a reference is made to a National Industrial Tribunal during its pendency. These matter because the time limits in section 53(5) run from commencement, and because the legality of a strike turns on whether a conciliation proceeding is pending.

6. What powers does a conciliation officer have, given that he decides nothing? Under section 53(2) he may do all such things as he thinks fit for the purpose of inducing the parties to come to a fair and amicable settlement, and must investigate the dispute and all matters affecting its merits without delay. Under section 49(1) he follows such procedure as he deems fit, subject to the Code and the rules. Under section 49(2) he may, after giving reasonable notice, enter the premises occupied by the establishment to which the dispute relates, for the purpose of inquiry into an existing or apprehended dispute. And under section 49(3) he has the same powers as a civil court under the Code of Civil Procedure 1908 in respect of enforcing attendance and examining on oath, compelling the production of documents and material objects, issuing commissions for the examination of witnesses, and such other matters as may be prescribed.

Some words this chapter uses

Tribunal, defined in section 2(zn), means an Industrial Tribunal constituted under section 44.

National Industrial Tribunal, defined in section 2(y), is the tribunal constituted under section 46.

Bench is the member or members actually hearing a case, as distinct from the Tribunal as an institution.

Judicial Member and Administrative Member are the two kinds of member every Tribunal has under section 44(2).

Consensus, in section 47(1), means agreement of the members. The Code provides its own machinery in section 47(2) and (3) for the case where it is absent.

De novo means afresh, from the beginning. Section 51(2) allows a transferred case to be heard either de novo or from the stage it had reached.

Section 44: the Industrial Tribunal

44(1): who constitutes it, and one extra jurisdiction

The appropriate Government may, by notification, constitute one or more Industrial Tribunals for the adjudication of industrial disputes and for performing such other functions as may be assigned under the Code. A Tribunal constituted by the Central Government also exercises the jurisdiction, powers and authority conferred on the Tribunal as defined in section 2(m) of the Employees' Provident Funds and Miscellaneous Provisions Act 1952.

That last clause is easy to skim and worth noticing. A Central Tribunal under this Code is also the appellate body under the provident funds legislation, so one forum now does both jobs.

44(2) and (3): the composition

Every Industrial Tribunal shall consist of two members appointed by the appropriate Government, of whom one shall be a Judicial Member and the other an Administrative Member.

A bench shall consist of a Judicial Member and an Administrative Member, or a single Judicial Member, or a single Administrative Member.

So the institution always has two members; the bench may have one or two. Which it is depends on section 44(7).

44(7): which cases need both members

The procedure of the Tribunal, including the distribution of cases between benches, is as prescribed, provided that a bench consisting of a Judicial Member and an Administrative Member shall entertain and decide the cases only relating to:

• (a) the application and interpretation of standing orders;
• (b) discharge or dismissal of workmen, including reinstatement of, or grant of relief to, workmen dismissed;
• (c) the illegality or otherwise of a strike or lock-out;
• (d) retrenchment of workmen and closure of establishment; and
• (e) Trade Union disputes,

and the remaining cases shall be entertained and decided by a bench consisting either of a Judicial Member or of an Administrative Member.

Look at what those five have in common and the design becomes clear. Every one of them is a case in which a person or an organisation stands to lose something: a job, a union's registration, the legality of industrial action, an establishment. They are the cases where the stakes are highest and where a decision by one person would be least acceptable to the losing side. Everything else, which is broadly the economic and collective work, goes to a single member.

Note also that (a) and (e) connect this section back to two earlier chapters. The application and interpretation of standing orders is section 37, worked in [Certifying, Appealing and Modifying Standing Orders]; and Trade Union disputes are section 22, worked in [Disputes, Change of Name, Amalgamation and Dissolution]. Both send their work here, and both therefore get a two-member bench.

44(4) to (6): appointment and tenure

For a Tribunal constituted by the Central Government, the qualifications, method of recruitment, term of office, salaries and allowances, resignation, removal and other conditions of service of both members are in accordance with the rules made under section 184 of the Finance Act 2017. A proviso provides that a person who has held a post below the rank of Joint Secretary to the Government of India, or an equivalent rank in the Central or a State Government, shall not be eligible to be appointed as an Administrative Member.

For a Tribunal constituted by a State Government, those matters are as prescribed by the State Government, section 44(5).

And by section 44(6), the salary, allowances and conditions of service of a member appointed by a State Government shall not be varied to his disadvantage after his appointment.

Sub-section (6) is a guarantee of independence and is the kind of provision that ordinarily protects judges. A member whose pay could be cut after he decided a case against the Government that appointed him would not be independent of it.

44(8) to (10): presiding, vacancies and staff

44(8): where the bench consists of one member of each kind, the Judicial Member shall preside.

44(9): a vacancy, other than a temporary absence, is filled in the prescribed manner, and the proceeding continues from the stage at which the vacancy is filled. So a case does not restart because a member left.

44(10): the appropriate Government provides officers and staff in consultation with the Judicial Member.

Section 45: the constitution cannot be questioned

No notification appointing a person as a Judicial Member or an Administrative Member shall be called in question in any manner; and no act or proceeding before the Tribunal shall be called in question in any manner on the ground mainly of the existence of any vacancy in, or defect in the constitution of, such Tribunal.

This is a validating provision of a familiar kind, and its purpose is practical. Without it, a party who lost before a Tribunal could reopen everything by showing that one member had been irregularly appointed or that a seat had been vacant. Note the word "mainly" in the second limb: the protection is against a challenge founded mainly on a vacancy or a defect in constitution, not a general immunity from judicial review.

Section 48: who may not sit

No person shall be appointed to, or continue in, the office of a member of a Tribunal or National Industrial Tribunal if:

• (a) he is not an independent person; or
• (b) he has attained the age of sixty-five years.

An Explanation defines "independent person" for this section as a person who is unconnected with the industrial dispute referred to the Tribunal or National Industrial Tribunal, or with any industry directly affected by such dispute.

Three features are examinable.

The bar operates twice over. The words are "appointed to, or continue in", so a member who becomes disqualified after appointment must go; independence is not tested once at the door.

The definition of independence is functional, not general. It does not ask whether the person is independent in the abstract. It asks whether he is unconnected with this dispute, or with any industry directly affected by it. A distinguished person with a shareholding in the industry before the Tribunal is not independent for that case.

Sixty-five is an absolute ceiling on continuance, and it applies to the Judicial and the Administrative Member alike.

Read section 48 with section 45 and the balance appears. Section 45 protects the Tribunal's decisions from being reopened on the ground mainly of a defect in its constitution; section 48 is the substantive guarantee that the people constituting it are independent and within the age limit. The first prevents technical challenges; the second supplies the thing that makes the forum worth protecting.

Section 47: how a two-member Tribunal decides

47(1): the decision shall be by consensus of the members.

47(2): if the members differ in opinion on any point, they shall state the point or points on which they differ and make a reference to the appropriate Government.

47(3): on receiving that reference the appropriate Government shall appoint a Judicial Member of another Tribunal or of a National Industrial Tribunal, who shall hear the point or points himself, and those points shall be decided according to the majority of the members who first heard the case, including the Judicial Member of the other Tribunal who heard the case thereafter.

Work the arithmetic, because that is what makes the provision intelligible. Two members disagree, so there is no majority. A third judicial mind is brought in from outside, hears only the disputed points, and then the decision is by the majority of three: the original two plus the newcomer. Whichever of the original two the newcomer agrees with carries the point.

Two features are worth remarking. The third person is always a Judicial Member, so a deadlock is broken by a legal mind. And he hears only the points of difference, not the whole case, which keeps the delay proportionate.

Section 46: the National Industrial Tribunal

46(1): the Central Government may, by notification, constitute one or more National Industrial Tribunals for the adjudication of industrial disputes which, in the opinion of the Central Government, involve questions of national importance or are of such a nature that industrial establishments situated in more than one State are likely to be interested in, or affected by, such disputes.

46(2): it consists of two members appointed by the Central Government, one a Judicial Member and the other an Administrative Member.

46(3): a person is not qualified as Judicial Member unless he is, or has been, a Judge of a High Court.

46(4): a person is not qualified as Administrative Member unless he is or has been Secretary to the Government of India, or holds an equivalent rank in the Central or a State Government, having adequate experience of handling labour related matters.

46(5): the Judicial Member shall preside.

Compare the qualifications with section 44 and the hierarchy is visible. For a National Industrial Tribunal the Judicial Member must be or have been a High Court Judge, and the Administrative Member must be or have been a Secretary to the Government of India with adequate labour experience. Section 44's Tribunal has no such floor for its Judicial Member in the section itself, and its Administrative Member need only be of or above the rank of Joint Secretary.

Section 54: how a dispute gets there. The Central Government may refer an industrial dispute to a National Industrial Tribunal which in its opinion involves a question of national importance or is of such a nature that establishments in more than one State are likely to be interested in or affected by it. Where a dispute has been so referred, or transferred under section 92, the National Industrial Tribunal shall hold its proceedings expeditiously and shall submit its award to the Central Government within the period specified in the order referring or transferring it, or any further period the Central Government extends.

Note the asymmetry, and it is examinable. An ordinary Tribunal is reached by a party's application under section 53(6), with no Government involvement. A National Industrial Tribunal is reached by a Central Government reference under section 54, or by transfer. The reference requirement that the Code abolished for ordinary adjudication survives at the national level, which makes sense: the question whether a dispute is of national importance is one only the Central Government is placed to answer.

Sections 51 and 52: the transition

These two sections, with section 104(1A), are the answer to the question every pending case raised on 21 November 2025, and they are asked together.

Section 51(1): on and from the commencement of the Code, cases pending immediately before it:

• (a) in the Labour Court and the Tribunal constituted under the Industrial Disputes Act 1947, are transferred to the Tribunal having corresponding jurisdiction under the Code;
• (b) in the National Tribunal under that Act, are transferred to the National Industrial Tribunal having corresponding jurisdiction.

Section 51(2): the transferred cases shall be dealt with de novo or from the stage at which they were pending before the transfer, as it may deem fit. So the new Tribunal chooses, and a part-heard case need not start again.

Section 52: a presiding officer of a Labour Court, Tribunal or National Tribunal constituted under the 1947 Act, holding office immediately before the commencement of the Code and qualified to be appointed under this Code, shall be the Judicial Member of the Tribunal or National Industrial Tribunal, and shall continue as such for the remaining period of his office.

Read those two with section 104(1A), worked in [The Code, and the Day the Law Changed]. That sub-section, inserted by Act 1 of 2026 with effect from 21 November 2025, provides that the Tribunals and statutory authorities functioning under the repealed Acts shall continue to function until the corresponding bodies under the Code become functional. Together the three provisions mean: the old forums keep working until the new ones exist; when a new Tribunal exists, the pending cases move to it; and the old presiding officers become its Judicial Members. Nothing lapses and nobody is left without a forum.

The old scheme and the new, compared

A worked example

The facts. At the Wada packaging plant, conciliation has failed and the union has received the failure report. Four separate matters remain.

One: whether the dismissal of Meera was justified. The union applies to the Tribunal under section 53(6). Under section 44(7)(b) this is a case relating to the discharge or dismissal of workmen including reinstatement, so it must be entertained and decided by a bench of a Judicial Member and an Administrative Member, and by section 44(8) the Judicial Member presides.

Two: whether the strike called in June was illegal. Section 44(7)(c): illegality or otherwise of a strike or lock-out, so again a two-member bench.

Three: a demand for a revision of the wage structure. This is not in the section 44(7) list, so under the closing words of that sub-section it is entertained and decided by a bench consisting either of a Judicial Member or of an Administrative Member, sitting alone.

Four: a quarrel between two unions about which of them represents the workers. That is a Trade Union dispute, and it reaches the Tribunal by an application under section 22(1)(a) rather than under section 53(6). By section 44(7)(e) it goes to a two-member bench, and by section 22(2) no civil court may entertain it.

Now the deadlock. On matter one, the Judicial Member would reinstate Meera and the Administrative Member would not. There is no consensus, so section 47(1) is not satisfied. Under section 47(2) the two members state the point on which they differ and refer it to the appropriate Government. Under section 47(3) that Government appoints a Judicial Member of another Tribunal, who hears that point and no more, and the point is decided by the majority of the three: the two who first heard the case and the newcomer.

A procedural objection. The employer discovers that the Administrative Member's appointment notification was irregular and argues that everything is void. Section 45 answers him: no notification appointing a member shall be called in question in any manner, and no act or proceeding before the Tribunal shall be called in question on the ground mainly of the existence of any vacancy in, or defect in the constitution of, the Tribunal.

A transition point. The dismissal case had actually been filed before a Labour Court under the Industrial Disputes Act 1947 in October 2025 and was part-heard when the Code commenced. Under section 51(1)(a) it stands transferred to the Tribunal having corresponding jurisdiction, and under section 51(2) that Tribunal may deal with it de novo or from the stage at which it was pending, as it thinks fit. Meanwhile, under section 104(1A), the Labour Court itself continued to function until the Code's Tribunal became functional. And the officer who had been presiding over that Labour Court, if qualified under the Code, is the Judicial Member of the new Tribunal under section 52, and continues for the remaining period of his office.

Finally, a national dispute. Suppose the wage demand is one of a set raised at plants in four States, and the Central Government forms the opinion that establishments in more than one State are likely to be affected. Under section 54(1) it may refer the dispute to a National Industrial Tribunal, whose Judicial Member must be or have been a High Court Judge and whose Administrative Member must be or have been a Secretary to the Government of India with adequate labour experience. That Tribunal must proceed expeditiously and submit its award within the period specified in the referring order or as extended.

What this does NOT mean

It does not mean there is still a Labour Court. The Code has one Industrial Tribunal. The Labour Court and the Tribunal of the repealed Act are gone, and their pending cases were transferred by section 51.

It does not mean every case is heard by two members. Only the five classes in section 44(7). The rest are decided by a single Judicial Member or a single Administrative Member sitting alone.

It does not mean the Administrative Member is a junior figure. He is one of the two members of the Tribunal, and for a Central Tribunal he may not be a person who held a post below the rank of Joint Secretary; for a National Industrial Tribunal he must be or have been a Secretary to the Government of India with adequate labour experience.

It does not mean a Government reference is needed for an ordinary dispute. Section 53(6) lets a party apply. The reference survives only for the National Industrial Tribunal, under section 54.

It does not mean a deadlock defeats the case. Section 47(2) and (3) supply a third judicial mind and a majority of three.

It does not mean section 45 excludes judicial review altogether. It bars a challenge founded mainly on a vacancy in, or a defect in the constitution of, the Tribunal.

Limits, criticism and amendments

The two-member Tribunal is the Code's most-discussed structural reform and the arguments run both ways. In its favour: economic questions are decided by somebody with administrative experience, and the artificial split between two schedules is gone. Against it: an Administrative Member is by definition drawn from the senior civil service, and in a dispute where the Government or a public undertaking is the employer, that raises a question about the appearance of independence that section 44(6)'s protection of conditions of service does not fully answer.

Section 47's deadlock machinery routes the disagreement through the appropriate Government, which must appoint the third member. In a dispute to which that Government is a party, the party chooses who breaks the tie.

The qualifications of the Judicial Member of an ordinary Tribunal are not stated in section 44 but left to rules under section 184 of the Finance Act 2017 for Central Tribunals and to State rules for State ones, so the Code itself sets no judicial floor at that level, unlike section 46(3) for the National Industrial Tribunal.

And section 45's validating provision, though standard, is wide. A notification appointing a member may not be called in question in any manner.

Against all that, the removal of the reference requirement by section 53(6), the transfer machinery in section 51, the continuity of the old presiding officers in section 52 and the continuity of the old forums in section 104(1A) together make a far tidier transition than the repeal of a seventy-eight-year-old Act might have produced.

Quick revision

• Section 44(1): the appropriate Government constitutes one or more Industrial Tribunals by notification; a Central one also has the EPF Act Tribunal's jurisdiction.
• 44(2), (3): two members, one Judicial and one Administrative; a bench is both, or a single Judicial Member, or a single Administrative Member.
• 44(7): the two-member bench decides only (a) application and interpretation of standing orders; (b) discharge or dismissal, including reinstatement or relief; (c) illegality or otherwise of a strike or lock-out; (d) retrenchment and closure; (e) Trade Union disputes. All other cases go to a single member.
• 44(4): Central Tribunal service conditions under section 184 of the Finance Act 2017; an Administrative Member may not have held a post below Joint Secretary. 44(6): conditions of a State-appointed member not to be varied to his disadvantage. 44(8): the Judicial Member presides on a mixed bench. 44(9): a proceeding continues from the stage at which a vacancy is filled.
• Section 45: no appointment notification may be called in question in any manner, and no proceeding may be challenged mainly on a vacancy or defect in constitution.
• Section 47: decision by consensus; on difference, state the points and refer to the appropriate Government, which appoints a Judicial Member of another Tribunal to hear those points, decided by the majority of the three.
• Section 46: the Central Government constitutes National Industrial Tribunals for disputes involving questions of national importance or affecting establishments in more than one State; Judicial Member must be or have been a High Court Judge, Administrative Member a Secretary to the Government of India with adequate labour experience; the Judicial Member presides. Section 54: reached by Central Government reference, proceedings expeditious, award within the specified or extended period.
• Sections 51, 52 and 104(1A): pending Labour Court and Tribunal cases transfer, to be heard de novo or from the stage reached; old presiding officers become Judicial Members for the remainder of their term; and the old forums keep functioning until the new ones do.

Test yourself

1. Describe the composition and benches of an Industrial Tribunal. Under section 44(1) the appropriate Government may by notification constitute one or more Industrial Tribunals for the adjudication of industrial disputes. Under section 44(2) every Tribunal consists of two members appointed by the appropriate Government, one a Judicial Member and the other an Administrative Member. Under section 44(3) a bench may consist of a Judicial Member and an Administrative Member together, or of a single Judicial Member, or of a single Administrative Member; and by section 44(8) the Judicial Member presides where the bench is composed of one of each.

2. Which cases must be decided by a two-member bench? By the proviso to section 44(7), only cases relating to the application and interpretation of standing orders; the discharge or dismissal of workmen, including reinstatement of or grant of relief to workmen dismissed; the illegality or otherwise of a strike or lock-out; the retrenchment of workmen and closure of establishment; and Trade Union disputes. All remaining cases are entertained and decided by a bench consisting either of a Judicial Member or of an Administrative Member.

3. The two members of a Tribunal disagree. What happens? Section 47(1) requires the decision to be by consensus. Under section 47(2), if the members differ in opinion on any point they shall state the point or points on which they differ and make a reference to the appropriate Government. Under section 47(3) that Government shall appoint a Judicial Member of another Tribunal or of a National Industrial Tribunal, who shall hear those points himself, and the points shall be decided according to the majority of the members who first heard the case, including the Judicial Member who heard them thereafter, so the outcome is a majority of three.

4. Distinguish the Industrial Tribunal from the National Industrial Tribunal. An Industrial Tribunal is constituted by the appropriate Government under section 44 for the adjudication of industrial disputes generally, and is reached by a party's own application under section 53(6). A National Industrial Tribunal is constituted by the Central Government under section 46 for disputes which in its opinion involve questions of national importance or are of such a nature that industrial establishments in more than one State are likely to be interested in or affected by them, and is reached by a Central Government reference under section 54 or by transfer under section 92. Both have two members, but the qualifications differ: for a National Industrial Tribunal the Judicial Member must be or have been a Judge of a High Court and the Administrative Member must be or have been Secretary to the Government of India or of equivalent rank with adequate experience of labour matters.

5. What happened to cases pending before Labour Courts when the Code commenced? Under section 51(1)(a) cases pending immediately before the commencement in a Labour Court or Tribunal constituted under the Industrial Disputes Act 1947 stand transferred to the Tribunal having corresponding jurisdiction under the Code, and under section 51(1)(b) cases pending before the National Tribunal stand transferred to the National Industrial Tribunal. Under section 51(2) the transferred cases are dealt with de novo or from the stage at which they were pending, as the Tribunal deems fit. Section 52 provides that a presiding officer of such a Labour Court, Tribunal or National Tribunal holding office immediately before commencement, and qualified under the Code, shall be the Judicial Member and shall continue for the remaining period of his office. And section 104(1A), inserted by Act 1 of 2026 with effect from 21 November 2025, keeps the old Tribunals and authorities functioning until the corresponding bodies under the Code become functional.

6. Comment on the replacement of the Labour Court and Tribunal by a single two-member Tribunal. Under the repealed Act a Labour Court dealt with the matters in its Second Schedule, broadly individual and disciplinary questions, and an Industrial Tribunal with those in its Third Schedule, broadly collective and economic questions, each under a single judicial presiding officer. Disputes did not respect that division, so the same quarrel could straddle both, and a judge decided economic questions on which he had no special competence. The Code merges the two into one Tribunal of a Judicial and an Administrative Member, reserving to the two of them together the five classes of case in section 44(7), where the stakes are highest, and leaving the rest to a single member so that the forum is not slowed to the pace of its heaviest work. The criticism is that the Administrative Member is drawn from the senior civil service, which raises a question about the appearance of independence where the Government or a public undertaking is the employer, and that section 47(3) routes any deadlock through the very Government that may be a party; section 44(6)'s guarantee that conditions of service shall not be varied to a member's disadvantage answers that only in part.

Some words this chapter uses

Award, section 2(e), is the determination of an industrial dispute by a Tribunal or National Industrial Tribunal, and includes an arbitration award.

Enforceable means legally operative, so that non-compliance has consequences. An award becomes enforceable under section 55(3).

Comes into operation is a different question from enforceability, and section 55(6) keeps them apart: an award operates from the date specified in it, or from the date it becomes enforceable if none is specified.

Assigns, in section 57(3)(c), are persons to whom the employer has transferred the establishment.

Arrear of land revenue is a class of debt recoverable by the Collector using a summary statutory procedure, without a suit.

Interim relief is relief granted while the case is still going on.

Section 49: procedure and powers

49(1): subject to the Code and the rules, an arbitrator, conciliation officer, Tribunal or National Industrial Tribunal shall follow such procedure as it may deem fit.

49(2): a conciliation officer, or an officer authorised by the Tribunal or National Industrial Tribunal, may, for the purpose of inquiry into an existing or apprehended industrial dispute, after giving reasonable notice, enter the premises occupied by any establishment to which the dispute relates.

49(3): the conciliation officer, Tribunal and National Industrial Tribunal have the same powers as are vested in a civil court under the Code of Civil Procedure 1908 when trying a suit, in respect of:

• (a) enforcing the attendance of any person and examining him on oath;
• (b) compelling the production of documents and material objects;
• (c) issuing commissions for the examination of witnesses;
• (d) such other matters as may be prescribed;

and every inquiry or investigation by a Tribunal or National Industrial Tribunal shall be deemed to be a judicial proceeding within the meaning of sections 193 and 228 of the Indian Penal Code.

The deeming in the closing words is worth a line. Sections 193 and 228 of the penal law deal with false evidence and with insult or interruption to a public servant sitting in a judicial proceeding. Making a Tribunal's inquiry a judicial proceeding for those purposes means a witness who lies to it can be prosecuted for perjury.

And note the freedom in sub-section (1). The forum follows such procedure as it deems fit. It is not bound by the Code of Civil Procedure generally; it is given specific civil court powers by sub-section (3) without being made a civil court.

Section 50: what the Tribunal may order in a dismissal case