Industrial Dispute Act and Trade Union Ordinance

Industrial Relationship

The interaction between employer(management) , employee(trade union) and the government/state the institution and associations through which such interactions are mediated.

When people are working together different types of relations are created. All parties should work together to get maximum benefits.

IR system involve,

• Tripartism
•  Balance of Interest
• Social Equilibrium. 

Employer – earn more profit with the minimum possible cost, efficiency and productivity from the TUs

Employee – gain things from his employment for living

State – Protect industrial peace/ some of the interest through legal control/ provide social welfare and other needs(CSR)

Background :

·         up to 20^th century – common law

·         introduced settlement of dispute by negotiation and conciliation through the invention of the controller of labour – Industrial Dispute (Conciliation) Ordinance No 3 of 1931

·         During second world war to avoid strikes and lock outs of essential services Ordinance of 1942 was announced.

·         With the requirement of addressing post war situations, Industrial Dispute Act No 43 of 1950 was enacted.

Key Objectives

·         Act to provide for prevention, investigation and settlement of disputes and matters connected therewith or incidental thereto.

·         Improve cordial relations between employer and employee

·         Minimizing industrial disputes

·         Reduce employment cost

·         To help employees grow and develop

·         To determine terms and conditions of employment

Levels of IR

·         International level (ILO) – set standards, provide advice, training and guidance to member countries.

·         National level – It depends on the type of government (democracy/dictorship). Operates mainly through the Ministry of Labour.

·         Industry level – relates to the specific industry and operates through wages board (plantation, transport, shipping). Each industry has its own characteristics.

·         Organizational  level – the policy on managing people in an organization. The manner in which the organization handles its KRA of HRM.

·         Departmental level – the day to day dealings are handled by respective Line Manager.

Role of Government in IR

Control/ protecting role

By enforcement of Labour Law :

·         Industrial Dispute Act (No. 43 of 1950)

·         Trade Union ordinance (No.14 of 1935)

·         Factories Ordinance (No. 45 of 1942)

Facilitation role

By preservation of Industrial Peace:

·         collective Agreement

·         Conciliation

·         Arbitration

- If management deal with employees collectively through TUs, then it is known as Industrial Relationship & If they deal with the employee individually it is known as Employee Relationship.

Industrial Dispute Act (No. 43 of 1950)

Provides several methods for the settlement of Industrial Dispute.

·         Conciliation

·         Arbitration – Voluntary , Compulsory

·         Industrial court

·         Labour Tribunal

·         Collective Bargaining / Collective Agreement

Conciliation

·         In the settlement process two disputing parties negotiate through the intervention of the third party who as the peace maker.

·         Labour Commissioner General and his authorized officer are expected to take all necessary steps for facilitating the settlement.

·         The conciliation must be concluded within one month. The labour Commissioner has authority to extend the period.

·         Once a settlement is reached it will be prepared in written and sign by both parties.

·         If settlement is not reached, the authorized officer must report same to the LC indicating all the steps he has taken to achieve settlement with his recommendation for settlement. On receiving this report LC transmits a copy of the same report to each party requesting them to inform him in writing as whether they accept or reject the term of settlement proposed in the report within 14 days. If there if no reply, it is taken as accepted. A settlement is binding on both parties and the terms of the settlement will become implied terms of the contract of employment.

Arbitration

Voluntary

·         Parties submit their dispute for settlement on their free will.

·         The process begins when the parties consent to settle the dispute through an arbitrator.

·         The parties can jointly nominate an arbitrator or agree to a suitable nomination made by the LC.

·         If parties want they can request panel of arbitrators instead of single one.

·         The reference to arbitration should be accompanied by a statement prepared by the LC setting out the matter in dispute.

Compulsory

·         When parties do not agree to refer the dispute for arbitration, the Minister is empowered to refer any dispute to an arbitrator or industrial court.

·         For that, the dispute should be industrial dispute, dispute should not on statutory matters, the dispute is not on the terms and conditions of a collective agreement in force, it relates to an illegal strike or illegal trade union action and it does not relate to individual terminations.

Industrial Court

·         The president can appoint a panel of not less than 5 persons to act as Industrial court.

·         The Minister can refer any dispute to IC.

·         One or three persons can be appointed from the panel by the Minister.

·         IC should make all inquiries required and hear all evidences and make a just and equitable Award.

·         The award of an industrial court cannot be repudiated.

·         The parties who are unhappy with the award can make an application to Minister to have the award set-aside, replaced or for the modification or an addition of new terms and conditions to the award. This application referred to IC by Minister for reconsideration.

·         An application for reconsideration can be entertained only after 12 months of coming into operation of the award.

·         On receipt of such an application the LC could either confirm or set-aside the award or make a fresh one, or vary or modify it.

Labour Tribunal

·         Under Act No.62 of 1957 Industrial Dispute Act

·         Any workman can invoke the jurisdiction of the labour tribunal on the following occasions:

o   Termination of service

o   Forfeiture of gratuity under Act No12 of 1983

o   To obtain gratuity  from an establishment where the number of workmen are less than 15.

·         Any workman or TU on behalf of workman can make an application within 3 months of the termination of service to seek a relief.

·         LT is empowered to hear both parties evaluate evidence and make a ‘just and equitable order  ’.

·         The party who is not satisfied with the order can appeal to the Provincial High Court within one month of the order.

·         The Act specifies that labour Tribunal hears and make order of an application within 6 months from the application.

Collective Bargaining

·         Universally accepted mechanism to come to an agreement by negotiation.

·         Collective agreement is the successful result of collective bargaining between workmen and employees

·         Collective agreement – an agreement between workmen or trade union/unions and employer/employers, on terms and conditions of employment and the manner of setting industrial dispute.

·         The collective agreement should be in writing, should have reference to the parties, signed by the parties, should be transmitted to LC and LC should publish it in the Gazzete.

·         LC should be satisfied about the terms and conditions of the collective agreement.

·         The effective date of the CA is the day published in the gazette ot any other specified therein.

·         Terms of CA becomes implied terms of individual contract of employment.

·         The workmen who are not members of the trade union also become entitled to the benefits.

Trade union ordinance No14 of 1935

Trade union – an association or combination of workmen or employers whether tempory pr permanent. Self-employed, family members an unpaid employees are not covered under the ordinance.

·          Trade union should apply for registration within 3months from the date it was established

·         To register as a  TU following should be fulfilled,

o   Should have at least 7 members

o   The application must be signed by 2 members

o   The objects, rules and regulation of the union must not conflict wit any of the provisions of the TUO and should not be unlawful,

o   Name of the TU should not b identical when the registrar proposes to cancel a TU, he should give 02 months notice to TU.  When receiving a notice the TU has a right to show cause as to why it should not be cancelled.

·         Judicial officers, member of armed forces, police officers, orison officers, and members of any corps established under the agricultural corps ordinance cannot form trade unions.

·         Public sector TU can have only two outside office bearers and private sector can have upto 50%

Shop & Office Act and Wages Board Ordinance

For,
All shop & Office employees - Shop and Office Act No.19 of 1954
Trade & Industries - Separate Wages Board

  

Area	Shop & Office Act	Wages Board
Normal working Hours	Max 8h (excluding break) Max 45h for a week	Max 8h (excluding break) Max working hours are decided by the relevant wages board
Working days/weeks	5 ½ days	5 days and a short working day
break for rest/meal	½ h after 4h working meal break can be reduced on mutual consent.	1/2h after 4h working
Over Time	Beyond normal working hours or 8h per day. Beyond 45h for a week. Not for Executives & sales canvassers.	Beyond normal working hours or  8h a day.
Over Time Rate	(Monthly salary / 240) x 1.5 [8h x 30days = 240]	As per the decision of the relevant wages board e.g. (monthly salary/200) x 1.5
Weekly Holidays	1 ½ days per week, if worked for 3 ½ days or 28 h a week. To be given in the same week or the following week. Not necessarily on Saturday/Sunday, but on any day.	One unpaid holiday per week, as per the decision of the relevant wages board
Working on a weekly holiday	O.T. for number of hours worked and a lieu holiday(1/2 day for sat. and 1day for sun) to be allowed within next 6 days	O.T.  for number of hours worked. ( O.T. rate as per the W.B decision.)and a day off without pay within 6 days.
Annual Leaving Entitlement	From the 1st Jan of the next year based on the period worked in the year joined. 1st Jan – 31st Mar – 14 days 1st April – 30th Jun – 10 days 1st Jul– 30th Sep  – 7 days 1st Oct – 31st Dec – 4 days In addition in the last year of employment 1day for each month completed should be added. If this period is 10 months or more, 14 days should be given	Only after a period of 1 year from the 1st of the month employment commenced, and the no of days will be calculated according to the formula of the relevant W.B.
Availing Annual Leave	With mutual consent. 7days must be taken consecutively. Cannot carry forward. On leaving annual leave should be allowed to take. Payment is possible only when both parties agree.	With mutual consent. 7days must be taken consecutively. Cannot carry forward. On leaving annual leave should be allowed to take. Payment is possible only when both parties agree. But max. days for annual leave are restricted to 21 days.
Casual Leave	For sickness/ private matters 1 day for each to months completed during first year up to 31st Dec. Thereafter 7 days from 1st Jan- 31st Dec. cannot carry forward.	No entitlements
Medical Leave, Short Leave	No prescribed	No prescribed
Poya day	holiday	holiday
Working on a poya day	One half day wages irrespective of no. of hours worked. No O.T.	1 ½ days wages irrespective of no. of hours worked. No O.T.
Statutory holiday	8 days per year.	Decision of the respective wages board. 8 days or less than 8days.
Working on a Statutory Holiday	Two times of one day wage or a lieu holiday before 31st Dec. Only 8h work. Approval of the Labour Dept. is to be obtained.	No approval is required. Either two days wages for 8h work or a lieu holiday. Work beyond 8h are paid at enhanced O.T. rate as per the Wages Board decision
Maternity Benefits	Under shop & Office Act	Under Maternity Benefits Ordinance
Upto two living children	84 working days	84 days
3rd living child	42 working days	42 days
still birth	42working days	42 days
test for 'viable foetus'	28 weeks of gestation period/ length of 12 inches/ weight of 2 lbs.	Same
Nursing interval	No prescribed	2h a day until the child is one year old.

Shop & Office Act 

Extra facts:

Working Hours

• In hotel trade, catering trade, hostel of educational establishment or long distance drivers in the motor transport trade employees could be allowed to work up to maximum of 12 hours, with which they shall be allowed a break continuously for 4 hours for rest/meal.
• Female cannot be employed in a shop or office before 6.00 a.m. or after 8.00 p.m. except as on over time. But employees work in hotel/restaurant between 8.00 p.m. - 10.p.m. , A ground hostess of Airline at a airport or receptionist, attendant of a ladies 'cloak room, ladies's linen room, ladies's lavatory' in a residential hotel.
• Traveling salesman, canvasser  sales representatives is not bounded by maximum working period.

Over Time

• Sales canvassers are bot paid overtime for working beyond the normal working hours, because they receive commission according to the work they do.
• Young persons (below 14 years) and female in shop/office cannot be employed beyond 9 hours (including rest/break) even on over time basis. Young persons between 14-18 can be employed for 1h Over Time on 5 week days.
• Refusal to work reasonable overtime when conditions require may amount to misconduct, unless valid reason are given.

Leave

• Annual  Leave
• Annual leave should be allowed to take if the employee requests.
• If both the employer & employee agree, payment could be made at the normal daily rate of pay. One party alone cannot insist payment instead of availing leave.
• If the employee does not give sufficient notice as stipulated in the contract of employment, to avail annual leave him/her self, he/she cannot demand payment in lieu of unauthorized annual leave.
• if the employer terminates the services of the employee, then the employer must pay for the unauthorized annual leave.

Wages Board Ordinance 

Extra Facts :

• Employees are required to work 5 normal working days and short working days which is usually 6 hours or 6 1/2 hours.
• If an employee absent on short working day, it considers as a full day absence.
• one day weekly holiday is not a paid holiday.

Thanks to IPM lecturer, Mr.Athula Amarasena.

Sri Lankan Labour Law

Today Sri Lankan Labour Law consists of more than forty Acts of parliament.

1) Terms and conditions of employment

•          The Shop and Office Employees Act
•          Wages Board Ordinance

2) Social Security

•          Employees Provident Fund (EPF)
•          Employees Trust Fund (ETF)
•          Payment of Gratuity

3) Industrial safety

•          Factories Ordinance
•          Workmen’s Compensation Ordinance

4) Industrial Relations

•          Industrial Dispute Act
•          Termination of Employment Act
•          Trade Union Act

5) Employment of Women and Children

•          Employment of Women, Young Persons and Children Act
•         Maternity Benefits Ordinance

  To Whom does all the legislation apply ?

 The law makes a distinction between a contract of service and a contract for service. Basically, a contract of service applies to an employee-employer relationship while a contract for service applies in the case of an independent sub-contractor. This distinction is most important as protection of employment legislation does not apply to independent sub-contractor.

 Contract  of servvice

• Employer -employee relationship
• Usually continuous relationship
• A duty of care is owed to employees as the employer
• The employer is generally liable for the vicarious act of employees
• Protective legislation applies to the contract

 Contract for service

• Employer - independent contractor relationship exists
• A relationship organized around the completion of once - off work.
• A duty of care, arising from occupation liability
• The company is generally not liable for the vicarious acts of independent contractors.