Provisions Of Dismissal Of An Employee Under The Industrial Dispute Act

In this blog post, Amala Haldar, a student pursuing a Diploma in Entrepreneurship Administration and Business Laws by NUJS, discusses the provisions of dismissal of an employee under the Industrial Disputes Act. 

Dismissal of employees is unavoidable for any Employer. But it is this same factor that places an employee in a state of helplessness and disgust. While experts rightly call it “necessary evil,” this truly is an unpleasant process that both the employer and the employees need to undergo. However, in India, the “HIRE AND FIRE” policy is not adopted as in the West. So, if you are an employer dismissing the service of your employee chances are you will get stuck in long and tedious proceedings brought against you by the aggrieved employees you have fired. Seems like a lot too much? Well, it’s not that difficult if a few laws are kept into consideration. In India, there are many laws that guide Dismissal of Service norms. This article mainly discusses the provisions of Industrial Disputes Act 1947 concerned with the Dismissal of Service of Workman.

The Industrial Disputes Act, 1947

The whole purpose of this Act is to maintain balance and harmony between the employers and the workmen. The prevalence of justice is the main aim of the Act. One of the major concerns of the Act remains in a way to protect the interest of both Workmen and Employers equally. Accordingly, the Act lays down detailed guidelines as to the dismissal of service and how it is to be carried out. But, the dismissal of workmen remains an ambiguous area in this regard. The research focuses on this facet of the Act.

The Basics

Whether you are a Workman or an Employer to understand the dispute you are in you should know a few basic definitions before moving on to the provisions in detail. They are as follows:-

• Who is an Employer? The term employer is defined in Section 2(g) of the said Act. “Employer means-
  • About an industry carried on by or under the authority of any department of [the Central Government or a State Government] the authority prescribed in this behalf, or where no authority is prescribed as the head of the department;
  • About an industry carried on by or on behalf of a local authority, the chief executive officer of that authority;”

• Who is an Employee? Whenever an employee comes under the definition of the workman, the provisions of the Act would be applicable. As per Section 2 (s) of the Act, Workman means a person:
  • Employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical, or supervisory work.
  • For the purpose of any proceeding for dispute, it will include a person who has been dismissed, discharged, or retrenched about that dispute.

The Act also lays down those persons who will not fall under the category of a workman in detail. In any case arising out of dismissal the most important point always remains, whether a person raising such a dispute falls under the category of a Workman or not.

• What is a Dismissal? The term dismissal is not expressly defined in the Act, and that is why it leads to ambiguities. The dismissal in service is often confused with Retrenchment defined U/S 2(oo) and also with termination. However, the meaning of dismissal in the general sense is the termination of service as a disciplinary action taken by management against a delinquent. Dismissal is permanent in nature. So dismissal has got something to do with punishment and is neither a retrenchment nor a lay-off.
• What is an Industrial Dispute? According to Section 2(k) of the said Act, In very simple words an Industrial dispute is a dispute or difference between:
  • Employers and employees
  • Employers and workmen
  • Workmen and workmen
•    Connected with-
  • Employment
  • Non- employment
  • Terms of employment
  • Conditions of labor.

Identifying a problem of dismissal as an industrial dispute too is significant. Now, that we are well versed with the basics, we will move on to the provisions of the said Act regarding dismissal.

The Important Provisions

Though there is no concrete definition of dismissal, it is a major line of action that employers adopt more often. There are various phases that both the Employers and Workmen go through once a dispute regarding the dismissal of service arises. They are discussed below.

Phase-1

If there has been a dismissal of service. What would you do?  The very first provision to go to is Section 2 A.

Section 2A of the Act states that-

When any employer dismisses the service of an individual workman, any dispute or difference between that workman and his employer arising out of such dismissal shall be deemed to be an industrial dispute. In spite of the fact that neither another workman nor any union of workmen is a party to the dispute.

This Section was a valuable insertion indeed. It clearly says a personal dispute which is regarding the workman’s dismissal in service can and will be termed as an Industrial Dispute. There is no need of any representation through any union.

Phase-2

Now, that you know it is an industrial dispute the second thought coming to mind is that, which is the authority you must go to for remedy. Section 10 of the Industrial Dispute Act gives an answer to that.

Section 10 of the Act states that – Any Industrial dispute that has arisen or is apprehended may be referred by the appropriate Government to:

• The Board
• Court of inquiry
• Labour Court or,
• Labour Tribunal
• National Tribunal

As it may deem fit.

Phase-3

Now, once your matter is referred to the Labour Court, Labour Tribunal or National Tribunal, Section 11 A, clearly lays down the power to give appropriate relief in case of dismissal of workmen.

According to Section 11 A–

When an industrial dispute relating to dismissal of a workman has been referred to a Labor Court, Tribunal or National Tribunal for adjudication and in the course of the proceedings, the Court or Tribunal is satisfied that the order of dismissal was not justified it may by its award –

• Set aside the order of dismissal
• Direct for reinstatement of workman or
• Give such other relief as it thinks fit

The Court or tribunal has absolute authority to adjudicate whether the dismissal is justified or not. If it finds the dismissal to be prejudicial to the Workman, such would be set aside. The award given may be challenged by either party in higher courts.

Conclusion

The provisions regarding the dismissal of service are widely misinterpreted however a correct application may lead to the protection of rights of the workman. In a case where dismissal has been without justification, the chances are that the company would have to reinstate the workman with full back wages, well at least that which is what usually happens. A clear understanding of it may save a Company from the wrath of a multiplicity of proceedings hurled at it. In spite of that if you cannot avoid dismissing your employees; all I can say is Get a good lawyer!

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