Labour and Employment Matters, Indore

The chambers appear before the Labour Court at Indore in industrial disputes, and advise employers and employees on termination, wages, gratuity and compensation.

Raising an industrial dispute

An individual workman whose services have been terminated may raise a dispute directly under Section 2A, without the backing of a union, and may apply to the Labour Court after the expiry of forty five days from the date of the application to the conciliation officer. Other disputes go through conciliation and are referred by the appropriate government under Section 10.

The threshold question in almost every one of these matters is whether the person concerned is a workman within Section 2(s). Those employed mainly in a managerial or administrative capacity, and those in a supervisory capacity drawing above the prescribed wage, fall outside it, and the dispute then lies elsewhere.

Retrenchment and termination

Section 25F applies where a workman has been in continuous service for not less than one year. It requires one month's notice in writing stating the reasons, or wages in lieu; retrenchment compensation at fifteen days' average pay for every completed year of continuous service; and notice to the appropriate government. Non compliance with any of these renders the retrenchment invalid.

Section 25G requires that, ordinarily, the workman retrenched be the one last employed in that category, the principle of last come first go. A departure must be for reasons recorded.

Where the termination is by way of punishment, the question becomes whether a proper domestic enquiry was held. Under Section 11A the Labour Court has the power to set aside an order of discharge or dismissal and direct reinstatement, and to reduce the punishment where it is disproportionate.

Recovery of money due

Section 33C(1) allows recovery of money due under a settlement or award through the Collector. Section 33C(2) allows a workman to apply to the Labour Court where the amount requires computation. This is a commonly used and comparatively quick remedy where the entitlement itself is not in dispute.

Wages, gratuity and compensation

• Payment of Wages Act 1936. Claims for deductions and delayed payment, before the authority appointed under the Act.
• Payment of Gratuity Act 1972. Gratuity at fifteen days' wages for every completed year, on termination after five years of continuous service, with an application to the Controlling Authority where it is withheld.
• Employees' Compensation Act 1923. Compensation for injury or death arising out of and in the course of employment, before the Commissioner.

Reinstatement and back wages

Where a termination is held bad, reinstatement is no longer automatic. The courts now consider the nature of the employment, the length of service, the delay in raising the dispute, and whether the workman was gainfully employed in the interim, and frequently award compensation in lieu of reinstatement. Back wages are not a matter of course and must be claimed and supported.

Frequently asked questions

Who counts as a workman under the Industrial Disputes Act?

Section 2(s) defines a workman as a person employed in any industry to do manual, unskilled, skilled, technical, operational, clerical or supervisory work. It excludes those employed mainly in a managerial or administrative capacity, and those in a supervisory capacity drawing wages above the prescribed limit. The question is decided on the actual nature of the duties performed, not on the designation given in the appointment letter.

What is the time limit to challenge a termination?

Under Section 2A a workman may apply directly to the Labour Court after forty five days from making an application to the conciliation officer, and within three years of the date of discharge, dismissal, retrenchment or termination. Delay beyond that, and even substantial delay within it, affects the relief the court is prepared to grant, particularly back wages.

Is retrenchment compensation payable in every termination?

Section 25F applies where the workman has been in continuous service for not less than one year and the termination amounts to retrenchment. It requires notice or wages in lieu, compensation at fifteen days' average pay per completed year, and notice to the government. Termination as punishment after a domestic enquiry, and voluntary resignation, are treated differently.

Can an employee claim gratuity if dismissed for misconduct?

Gratuity is payable on termination after five years of continuous service. It may be wholly or partially forfeited under Section 4(6) of the Payment of Gratuity Act where the termination is for wilful omission causing damage or loss, or for riotous or disorderly conduct, or for an offence involving moral turpitude committed in the course of employment. Forfeiture requires the termination to have been on those grounds.

Will the Labour Court order reinstatement if the termination was wrong?

Not automatically. The court has the power under Section 11A to set aside a discharge or dismissal and direct reinstatement, but current practice weighs the nature of the appointment, the length of service, the delay in raising the dispute and whether the workman was otherwise employed. Compensation in lieu of reinstatement is frequently awarded instead.