AIDCSC

• Definition

“Lock-Out” has been defined in section 2 (1) to mean the closing of a place of employment, or the suspension of work, or the refusal by an employer to continue to employ any number of persons employed by him. 

• Background

           India witnessed lock-out twenty-five years after the “lock-out” was known and used in the arena of labour management relations in industrially advanced countries. The first known lock-out was declared in 1895 in Budge Budge Jute Mills  .

•  Meaning

Strike is a weapon in the hands of the labour to force the management to accept their demands. Similarly, Lock-Out is a weapon in the hands of the management to coerce the labour to come down in their demands relating to the conditions of employment.  Lock- Out is the keeping of labour away from works by an employer with a view to resist their claim. 

There are four ingredients of Lock-Out 

1. (i) temporary closing of a place of employment by the employer,  or  (i) suspension of work by the employer,      or  (i) refusal by an employer to continue to employ any number of persons employed by  him; 
2. The above mentioned acts of the employer should be motivated by coercion. 
3. An industry as defined in the Act;    and  

4. A dispute in such industry. 

Lock-Out has been described by the Supreme Court as the antithesis of strike.  

Shri. Ramchandra Spinning Mills v/s State of Madras

Held: If the employer shuts down his place of business as a means of reprisasl or as an instrument of coercion or as a mode of exerting pressure on the employees or generally speaking when his act is what may be called an act of belligerency there would be a lock-out. 

In case of Lock-Out the workmen are asked by the employer to keep away from work, and, therefore they are not under any obligation to present themselves for work.  So also LockOut is due to and during an industrial dispute.

  Causes :

A lockout is generally used to enforce terms of employment  upon a group of employees during a dispute. A lockout can act to force unionized workers to accept  changed conditions such as lower wages. If the union is asking for higher wages, or better benefits, an employer may use the threat of a lockout or an actual lockout to convince the union to back down.

Lock-Outs may be caused by internal disturbances, when the factory management goes in to financial crisis or got succumbed into financial debts, disputes between workers and workers, disputes between workers and management or may be caused by illtreatment of workers by the management. Sometimes lockouts may be caused by external influences, such as unnecessary political parties involvement in management of  workers, union may be provoked for unjustified demands that may be unaffordable by the management, which may ultimately lead to lockout of the factory.

1. Disputes  or clashes between workers and management.
2. Unrest , disputes or clashes in between workers and workers.
3. Illegal strikes, regular strikes or continuous strikes by workers.
4. Continuous or accumulated financial losses of factory or industry.
5. If any company involves in any fraudulent or illegal activities.
6. Failure in maintaining proper industrial relations, industrial peace and harmony.
7. Prohibition of Strikes and Lock-outs: 

  Section 22 of the Industrial Disputes Act, 1947, deals with the prohibition of strikes and lock-outs.  This section applies to the strikes or lock-outs in industries carrying on public utility service. Strike or lock-out in this section is not absolutely prohibited but certain requirements are to be fulfilled by the workmen before resorting to strike or by the employers before locking out the place of business. 

Conditions laid down in section 22(1) are to be fulfilled in case of strike and conditions as laid down in section 22(2) are to be fulfilled in case of any lock-out by the employer.  The intention of the legislature in laying down these conditions was to provide sufficient safeguards against a sudden strike or lock-out in public utility services lest it would result in great inconvenience not only to the other party to the dispute but to the general public and the society. 

Section 22(1): No person employed in public utility service shall go on strike in breach of contract: 

1. Without giving to the employer notice of strike within six weeks before striking;   or 
   1. Within fourteen days of giving such notice;  or 
      1. Before the expiry of the date of strike specified an any such notice as aforesaid;  or  

• During the pendency of any conciliation proceedings before a Conciliation Officer and seven days after the conclusion of such proceedings. 

These provisions do not prohibit the workmen from going on strike but require them to fulfill the conditions before going on strike. These provisions apply to a public utility service only and not to a non- public utility service. 

With regards to Notice of Strike, notice within six weeks before striking is not necessary where there is already a lock-out in existence. Secondly, notice may be given by the Trade Union or representatives of the workmen to do so. Thirdly, a notice of strike shall not be effective after six weeks from the date it is given. The strike can take place only when 14 days have passed but before 6 weeks have expired after giving such notice.  

 Section 22(2): No employer carrying on any public utility service shall lock-out any of his workmen: 

1. Without giving them notice of lock-out as herein after provided within six weeks before locking out; or 
   1. Within fourteen days of giving such notice;  or 
      1. Before the expiry of the date of lock-out specified in any such notice as aforesaid;  or 
      1. During the pendency of any conciliation proceeding before a Conciliation Officer and seven days after the conclusion of such proceedings. 

 Section 22(3): Notice of strike or lock-out as provided by sub-sections (1) and (2) many in certain cases be dispensed with. 

• No notice of strike shall be necessary where there is already in existence a lock-out in the public utility service concerned. 
  • No notice of lock-out shall be necessary where there is already in existence a strike in the public utility service concerned. 

Sub-section (3) is in the nature of an exception of sub-sections (1) and (2) of section 22.  

Section 22(4): Notice of strike shall be given by such number of persons to such person or persons in such manner as may be prescribed. 

  Who will give notice? 

• By the President or Secretary or office-bearer of a registered Trade Union or federation. 
  • Where there is no registered Trade Union of workmen by atleast seven representatives of workmen duly authorized in this behalf at a general meeting specifically held for the purpose. 

The object of giving notice of strike is to enable the other party to make amends or to come to terms or redress the grievance or to approach the authorities to intervene and stop, if it is possible the threatened action. 

Section 22(5): Notice of lock-out shall be given in such manner as may be prescribed. 

Section 22(6): Deals with intimation of notices given under sub-section (1) or (2) to specified authorities.  

If on any day an employer receives from any person employed by him any such notice as is referred to in sub-section (1), he shall within five days report to the Appropriate Government or to such authority as that Government may prescribe, the number of notices received on that day. Similarly, if any employer gives any notice as is referred to in subsection (2), to any person employed by him, he shall report this fact within five days to the to the Appropriate Government or to such authority as that Government may prescribe.  

• General prohibition of Strikes and Lock-outs: 

                      The prohibition against strikes and lock-out contained in Section 23 is general in      nature. It applies to both public utility as well as non-public utility establishments. A strike in breach of contract by workmen and lock-out by the employer is prohibited in the following cases: 

• During the pendency of conciliation proceedings before a Board and seven days after the conclusion of such proceedings; 
• During the pendency of conciliation proceedings before a Labour Court, Tribunal or National Tribunal, and two months after the conclusion of such proceedings; 
• During the pendency of arbitration proceedings before an arbitrator and two months after the conclusion of such proceedings, where a notification has been issued under sub-section (3-A) of section 10-A, or 
• During any period in which a settlement or award is in operation in respect of the maters covered by such settlement or award. 

The object of these provisions seems to ensure a peaceful atmosphere to enable a conciliation or adjudication or arbitration proceeding to go on smoothly. This section because of its general nature of prohibition covers all strikes and lock-outs irrespective of the subject-matters of dispute pending before the authorities. However a conciliation proceeding before a conciliation officer is no bar to a strike or lock-out under this section, it is only a conciliation proceeding before a Board which is mentioned in this Act. 

The provisions of section 23 shall apply to all industrial establishments. Section 23 applies to both public utility service as well as non-public utility service, while Section 22 applies to public utility service alone. Section 23 does not prohibit a strike or lock-out during the pendency of conciliation proceeding before a conciliation officer, Section 22 does so. 

Illegal Strikes and Lock-outs: 

  According to Section 24(1) Strike or lock-out shall be illegal if it is: 

• Commenced or declared in contravention of section 22 in a public utility service; 
• Commenced in contravention of section 23 in any industrial establishment ( including both public utility and non-public utility service); 
• Continued in contravention of an order made by the appropriate Government under section 10(3) or sub-section (4-A) of section 10-A of the Act. 

  Strike or lock-out in contravention of the provisions of Section 22 or Section 23 of the Act is declared illegal by Section24 of the Act. A strike or lock-out which commenced as legal under Section 22 & 23 can be continued unless an order under Section 10(3) has been passed prohibiting the continuance of an existing strike or lock-out. 

Sub-section (2) of Section 24 of the Act lays down that continuance of strike or lock-out is deemed to be illegal only if an order prohibiting it is passed under Section 10(3). 

Sub-section (3) of Section 24 of the Act provides that a lock-out declared in consequence of an illegal strike or a strike declared in consequence of an illegal lock-out shall not be deemed to be illegal. 

Thus Strike and lock-out shall not be deemed to be illegal if:- 

• At the commencement they are not in contravention of the provisions of this Act; 
• Their continuance has not been prohibited by the appropriate Government under section 10(3) of the Act; 
• A lock-out is declared in consequence of an illegal strike or vice versa. 

Prohibition of financial aid to Illegal Strikes and Lock-outs: 

       Section 25 of the Act prohibits financial aid to illegal strikes and lock-outs. The provisions of this section are attracted only if the strike or lock-out is illegal and not otherwise. 

It says that no person shall knowingly spend or apply any money in direct furtherance or support of an illegal strike or lock-out. This section has the following ingredients: 

• Spending or applying money; 
• Money spent or applied in direct furtherance or support of an illegal strike  or lock-out; 
• The strike or lock-out must actually be illegal; 
• Knowledge on the part of the person expending or applying money that the strike or lock-out is illegal. 

  Thus for prosecuting a person for the contravention of Section 25, the prosecution must prove:- 

• That the strike or lock-out was illegal; 
• That the accused had the knowledge that the strike or lock-out was illegal and that   the money spent by him was direct furtherance or support of the same. 
• That the money was spent by the accused.  

  It is only spending of money in support of a strike which is prohibited under this section. Therefore, helping the strikers by way of providing clothes or any other sort of help is not punishable under this Act. 

Section 28 provides penalty for giving financial aid to illegal strikes and lock-outs. 

  Punishment may extend to six months’ imprisonment or one thousand rupees fine or both. 

Punishment for Illegal Strikes: 

  If a strike is illegal the party guilty of the illegality is liable to punishment under Section 26 of the Act.  

Section 26(1) prescribes penalty which can be imposed on any workman who commences, continues or otherwise acts in furtherance of a strike which is illegal under this act. Thus to penalize a workmen under Section 26(1) two conditions must be fulfilled, namely,- 

• A workman must commence, continue or in some other manner act in furtherance of a strike ; and 
• Such strike must be illegal under the act. 

Any workman found guilty of participating in an illegal strike shall be punishable with imprisonment of a term which may extend to one month or with a maximum fine of rupees fifty or with both. 

Section 26(2) provides that an employer shall be punishable with imprisonment extending to one month or with a maximum fine of rupees one thousand or with both if,  

• Such employer commences, continues or otherwise acts in furtherance of a lockout; and 
• Such lock-out is illegal under the act. 

Even though the workers have a right to go a strike but it is not their fundamental rights. In case of illegal strike the guilty party has to undergo punishment. A distinction has been tried between illegal  but justified strikes and illegal and unjustified strikes. For instance a strike may be illegal but it might have been taken recourse for good reasons and carried on in orderly and peaceful manner.

If the strike is illegal, the workmen are not entitled to wages or compensation and they are also liable to punishment by way of discharge or dismissal.

• Impact of Illegal Strike & Illegal Lock-out:- 

  Wages during illegal strike: – The effect of an illegal strike is that the workmen cannot claim wages for the period during which an illegal strike continues.

It is pointed out that if the strike is legal the workmen are entitled to wages. A strike is legal or illegal, justified or unjustified is question of fact which is to be judged in the light of the fact which is to be judged in the light of the facts and circumstances of each case. It has been held by the Supreme  court that in order to entitle the workmen to wages for the period of strike, the strike should be legal as well as justified.

• Conclusion:  

  Though under the Constitution of India, the right to strike is not a fundamental right as such, it is open to a citizen to go on strike or withhold his labour. It is a legitimate weapon in the matter of industrial relations.  

In both lock-out and strike, a labour controversy exists which is deemed intolerable by one of the parties, but lock-out indicates that the employers rather than the employees have brought the matter in issue. 

  Strike may be justified or unjustified, legal or illegal. It depends on the circumstances of each case. It is usually associated with collective bargaining by workers and is permissible under Industrial dispute Act, 1947.  

Lock-out is a weapon of coercion in the hands of the employer with a motive to coerce the workmen which is due to an industrial dispute and continues during the period of dispute. 

However strikes and lock-outs are prohibited during the pendency of conciliation adjudication and arbitration proceedings. 

Strikes are said to be revolutionary as it seeks to obtain better living conditions for the workers who form the majority in the industrial community. Better wages, better homes and healthy living condition better education—these are the healthy objectives for the attainment of which labour resorts to strikes. Hence, strikes may justly be described as contributing towards a revolutionary process in man’s progress towards social order. 

‘Lock-outs’, on the contrary, are reactionary by any measures; because their object is to frustrate this progressive tend in human affairs. To hold down wages to a minimum, workers denied of equal opportunities for the education of their children, and no savings to fall back upon in evil times, is surely unjustifiable, and may be rightly called reactionary. 

A strike signals the transfer of power from the employer to the union. While the employer has a right to employ and retrench workers, in the case of a strike, the right to not come to the place of work is with the union. This transfer of right also means higher bargaining power for the union. A strike is also used by the union to unite its members and send a strong signal to the management. In this case, strike also becomes an effective tool for the union to regain any lost support among the workers. 

A lockout declared because of the poor financial condition of the company has an obvious advantage for the employer because it lets him cut his financial losses. During this period, an employer does not have to pay the labour costs and other variable costs. 

However A lockout is the last step an employer would take. This is because a lockout means loss of production, which in turn means financial losses for the company. So except it is a case of financial distress, the employer would like to continue working.  A lockout also means deterioration in the relationship between the employer and the union/workmen. If the workmen decide to contest the reasons on which the employer has declared a lockout, there are chances that the employer might have to end up paying wages for the period of lockout along with other benefits which will have a huge financial implication on the company.