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%