In any Industrial endeavour co-operation of labour and capital is quite
essential for its success, although they have interests contrary to each
other. They have different strategies and weapons to ventilate their
grievances and safeguard their interests. Unlike the strikes, lockout is
declared by the management out of the consequences of clashes between
management and the workers, due to unjustified demands by the workers.
In the case Management of Kairbetta v/sRajamanickam And Others
Hon'ble Supreme Court of India court has observed as follows:
Just as a
strike is a weapon available to the employees for enforcing their industrial
demands, a lockout is a weapon available to the employer to persuade by a
coercive process the employees to see his point of view and to accept his
demands. In the struggle between capital and labour, the weapon of strike is
available to labour and is often used by it, so is the weapon of lockout
available to the employer and can be used by him. The use of both the
weapons by the respective parties Must, however, be subject to the relevant
provisions of the I D Act. Chapter V which deals with strikes and lockouts
clearly brings out the antithesis between the two weapons and the
limitations subject to which both of them must be exercised.
Strike is one of the oldest and the most effective weapons of labour in its
struggle with capital for securing economic justice.
Section 2 (q) of the Industrial Disputes Act defines:
Strike means a cessation of work by a body of persons employed
in any industry acting in combination, or a concerted refusal, or a refusal
under a common understanding, of any number of persons who are or have been
so employed to continue to work or to accept employment.
The following essential requirements for the existence of a strike:
- There must be cessation of work.
- The cessation of work must be by a body of persons employed in any
- The strikers must have been acting in combination;
- The strikers must be working in any establishment which can be
called industry within the meaning of Section 2(j); or
- There must be a concerted refusal; or
- Refusal under a common understanding of any number of persons who
are or have been so employed to continue to work or to accept
- They must stop work for some demands relating to employment,
non-employment or the terms of employment or the conditions of labour of the
Section 22 of ID Act prohibits strikes in Public Utility Services and
Section 23 puts a general prohibition on strikes in any industrial
establishment. Hence strikes are generally illegal. However, Section 24(3)
provides that a strike called in response to an illegal lock out will not be
illegal. Besides, there are other situations when a strike can become legal.
Section 20(1) provides for commencement of conciliation proceedings when the
notice is received by the conciliation officer or on the date of the order
the dispute is referred to the Board.
Until the dispute gets referred to the
conciliation officer or the Board as the case may be, the conciliation does
not start. Thus, in the time window between 14 days after notice of strike
is issued and before the lapse of six weeks from the same date, a legal
strike can take place in PUS, provided the dispute is yet to be referred.
Another occasion when a strike becomes legal is as follows. If a fresh
notice of strike is issued on the same agenda as the previous dispute on
which the conciliation officer had submitted a failure report on, the union
can go forward with a legal strike after the mandatory 14 day cooling off
period, if the government does not refer it to the Labour Court or
Industrial Tribunal. The failure of conciliation proceedings last time on
same grounds will be considered for the fresh strike notice as well.
Also, in non-PUS, no such time window is applicable. Unless otherwise
prohibited or regulated by the Standing Orders of the establishment or any
existing negotiation or conciliation proceeding is going on, workmen can go
for a lightning strike
A question may arise as to the fact that there is
general prohibition on strikes in any industrial establishment vide Sec. 23.
The answer to this lies in the fact that it is prohibited only if it is in
breach of contract.
The strike is illegal
- if it is in breach of Contract of Employment.
- if it is in Public Utility Services.
- if Notice under Section 22(1) is not given.
- if commenced during Award or settlement period.
- if commenced During or within 7 days of completion of Conciliation
- if commenced During or within Two months of completion of
Is strike a fundamental right?
Though right to form union and right to freedom of speech and expression are
guaranteed under the Constitution via Articles 19(1) (c) and 19(1) (a)
respectively, the right to strike is not derived out of it. However peaceful
demonstrations are allowed.
Justification of strike
Justification of a strike is a question of fact and has to be determined for
each case. Justification means whether the reason for which the strike was
called was serious enough or had enough potential to significantly affect
the conditions of labour or terms of employment or employer employee
relationships. However, use of coercion or violence during a strike negates
whatever justification a strike may have.
Implication of strike on the union Positive Implications
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.
The most direct implication of a strike on the workers is the non-payment of
wages during the strike period. As explained earlier, the wages might be
paid at a later date only if the strike is both justified and legal.
However, during the strike period, the workers have to survive without
pay.Hence, as the strike period keeps increasing, the bargaining power of
the union starts to decrease again and might go to levels lower than the
Implication of strike on the Employer
Strikes directly affect the bottom line of a company. During the initial
period of strike, the bargaining power of the union is very high and
employer's need to compromise is also high. The financial implication of
every additional day of strike is huge and there is immense pressure on the
employer to ensure an end to the strike. However, an end to the strike would
generally mean some additional financial burden. Hence, for the employer, a
strike is generally a lose-lose situation.
Implication of strike on the government/political setup
Strikes have a huge implication on the government as well as the political
set up in the area of strike. The political parties use strikes to strike an
emotional chord with the workers to maintain or enhance their vote-bank.
This also puts added pressure on the government, which has to ensure that
the employer is not at a disadvantage by compromising while at the same time
the workers have to be satisfied.
Lockout is a work stoppage in which an employer prevents employees from
working. It is declared by employers to put pressure on their workers to
come to their way by consensus about settlement of issued lead to lockout.
This is different from a strike, in which employees refuse to work. Thus, a
lockout is employers' weapon while a strike is raised on part of employees.
According to [section 2(1)] of Industrial Disputes Act 1947, lock-out means
the temporary 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
The mention of temporary in the definition of lockout differentiates it from
closure. In Mgmt of Express Newspapers Ltd, Gajendragadkar J mentions that
in case of a closure, the employer does not merely close down the place of
business; he closes the business itself. It is also mentioned that lockout
is often used by the employer as a weapon in his armoury to compel the
employees to accept his proposals.
The second part of the definition talks about the refusal by the employer to
continue to employ any number of persons. This implies that the employer
might refuse employment only to a certain number of employees and might
allow the others to work. However, this does not mean that lockout and
layoff are similar.
Layoff and lockout is both temporary and in both cases, some employees might
not get employment. The big difference between layoff and lockout is elaborated
by the Supreme Court in Kairbetta Estate v Rajamanicham
The Supreme Court clarifies that the employer can resort to
lay off only in one of the cases mentioned in Section 2(kkk) of ID Act
whereas there is no such requirement in case of a lockout. Also, in case of
lay off the employer may be liable to pay compensation whereas in case of
lock out there is no such liability.
Why the word lock out?
Lock made is not permanent that can be closed and opened. The word 'out' can
be understood as keeping temporarily away management and employees from the
factory, till settlement of the issues caused to lockout.
Factory lockout is the ultimate weapon in the hands of the management when
an uncontrollable situations arises in the factory. No matter what it is
factory lockout will cause great loss to the management and to the workers.
If lockout re-occurs, it may become threat for the existence of the factory,
which finally leads to the loss of the jobs of workers.
The Industrial Dispute Act does not intend to take away these rights.
However, the rights of strikes and lockouts have been restricted to achieve
the purpose of the Act, namely peaceful investigation and settlement of the
A lockout in contravention of sec 10(3), Sec 10A (4A) i.e. declaration of
lock-out when an industrial dispute has been referred, is an illegal
lockout. Also, a lockout in contravention of sec 22, 23 i.e. issuing a
notice before lockout, is an illegal lockout (Sec 24(1)). However a lockout
declared in consequence of an illegal strike is legal (Sec 24(3)). A legal
lockout can become a strong tool in the hands of the employer in critical
Section 2(1) defines the term Lock-out. However, the present definition is
only a mutilated one. The term was originally and correctly defined in the
Trade Dispute Act, 1929. From the definition given in the Trade Dispute Act,
the present Act has taken the present definition but has omitted the words
when such closing, suspension or refusal occurs in consequences of a dispute
and is intended for the purpose of compelling those persons or of aid in
another Employer in compelling persons employed by him to accept terms or
condition of, or affecting employment.
In the Case General Labour Unlon (Red Flag) v/s B. V. Chavan And Ors
16 November, 1984 Supreme Court of India expressed Imposing and continuing
a lockout deemed to be illegal under the Act is an unfair labour practice.
In Sri Ramchandra Spinning Mills v/s State of Madras
the Madras High Court
read the deleted portion in the definition to interpret the term lock-out.
According to the Court, a flood may have swept away the factory, a fire may
have gutted the premises; a convulsion of nature may have sucked the whole
place under ground; still if the place of employment is closed or the work
is Suspended or the Employer refuses to continue to employ his previous
workers, there would be a lock out and the Employer would find himself
exposed to the penalties laid down in the Act. Obviously, it shows that the
present definition does not convey the concept of the term lock out.
Kingfisher airlines of India went into losses amounts of 8,000 crores due to
failure in meeting competition in the aviation industry eventually had not
paid salaries to its employees for a period of six months which led to
agitation among employees eventually resorted for strike. With the loss of
Rs. 8,000 crores by Kingfisher airlines additionally got a burden of another
Rs. 7,000 crores hence declare partial lockout by its top officials on 1st
Lockout of any factory or industry is governed by the law called
the Industrial Disputes Act 1947. According to section 22 of this Act,
lockout of factory or industry must be done only after issuing prior notice
to concern employees. If not, such lockout shall be treated as illegal
lockout and concerned factory or industry shall be penalised according to
the Industrial Disputes Act 1947.
Procedure of Lockouts
According to Sec. 22(2)
No person employed in a public utility service shall go on Lockout in
breach of contract:
- Without giving to the employer notice of Lockout, as hereinafter
provided, within six weeks before lockout; or
- Within fourteen days of giving such notice; or
- Before the expiry of the date of lockout specified in 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
Procedure of lockout meaning
Proposal to go on lockout factory should be intimated to workers by way of
prior notice, that is 14 days stipulated time period should be given to the
workers to respond . During this 14 days time employer should not lockout.
Only after expiry of the that 14 days and management fails to resolve issues
within that 14 days, employer can go for lockout on fixed date by giving
notice of lockout. Such lockout should be done before the expiry of that six
Succinctly lockout of factory should be done only after the expiry of 14
days of prior notice given by the management.
The Reasons Behind The Lockouts
- Disputes or clashes in between workers and the management.
- Unrest disputes or clashes in between workers and workers.
- Illegal strikes, regular strikes or continuous strikes by workers
may lead to lockout of factory or industry.
- External environmental disturbance due to unstable governments, may
lead to lockouts of factories or industries.
- Continuous or accumulated financial losses of factory or industry,
may lead to opt lockout by the management.
- Maybe lockout, if any company involves in any fraudulent or illegal
- Failure in maintaining proper industrial relations, industrial peace
India: leading car manufacturer Maruthi Suzuki at Maneser (Haryana), workers
created extreme violence by burning alive company's general manager human
resource (Awanish Kumar Dev) to death, burnt down office furniture, injured
several executives, supervisors, managers and the Japanese manager of the
factory was also attacked. 91 workers were arrested for this brutal act
including causing heavy damage to the company's property. The sequence of
events began in the morning with a worker beating up a supervisor on the
Workers union alleges that this incident happened due to the
supervisor made objectionable remark against a permanent worker, who belongs
to the Scheduled Caste category. When we opposed it, they misbehaved with us
and suspended the worker that led to violence. But the management alleges
that the workers' union prevented the management from taking disciplinary
action against the worker. Finally management declared temporary close down
of the car Manufacturing plant that produces about 1600 units per day. In
terms of value the per day loss is about Rs. 70 crores. By then Cars waiting
for delivery to its customers were more than one lakh units that may take
more than five months to begin delivery due to lockout.
As company manufactures market demanded key models like Swift hatchback and
Dzire sedan faces a huge backlog. Maruthi Suzuki competitors like Ford,
Skoda and Hyundai got benefited in the market as many people shift to other
brands in the view of long waiting period for delivery of cars from Maruthi
No Payment for 2000 staff on August 1st, 2012
Company decided that no one working at the Manesar plant will be given
salary. According to the rule, after the company's lockout, workers are not
paid till the time it (lockout) is revoked. The monthly salaries of its
employees for the period before the incident, will be paid only after the
lockout is withdrawn and the plant starts functioning.
Workers had damaged
everything like computers, server cables and entire data on July 18.
Eventually company has no records of its employees and their duty-hours
details for the entire month and finally company decided to pay its
employees only after retrieving their data. [Source :TOI]
Lock-out, When Legal
The Act treats strikes and lock-out on the same basis; it treats one as the
counter part of the other. (Mohammed Sumsuddin), the circumstances under
which the legislature has banned strike, it has also at the Same time banned
the lock-out. Thus what holds good-bad; legal-illegal, justified unjustified
for strikes, holds the same for the lock-out. As such, the provisions of the
Act which prohibit the strike also prohibits the lock-out.
The object and reasons for which the Lock-out are banned or prohibited are
the same for which strikes are banned or prohibited. It is because the
Employer and the Employees are not discriminated in their respective rights
in the field of industrial relationship between the two. As such, lock-out
if not in conflict with Section 22 and 23 may be said to be legal or not
legal. Sections 24(1) (iii), 10(3) and 10A (4A) similarly controls the
A lock-out in consequence of illegal strike is not deemed to be
illegal. But if lock-out is illegal, Section 26(2), 27 and 28 will come in
operation to deal with the situation. The Act does not lay down any
guidelines to settle the claims arising out of illegal lock-out. The courts,
therefore, have adopted the technique of apportioning the blame between the
Employer and employees. This once again brings to the fore the concept of
justifiability of lock-out.
Prohibits an employer from declaring a lockout:
in any of the
eventualities mentioned therein [Section 22(2) of the Industrial Disputes
No employer carrying on any public utility service shall lock-out any of his
- without giving them notice of lock-out as hereinafter provided,
within six weeks before locking-out; or
- within fourteen days of giving such notice; or
- before the expiry of the date of lock-out specified in 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
Implication of lockout on the government or Political set up
Given the tripartite set up of industrial relations in the Indian context,
the government plays a very important role in the case of a lockout.
Reference of the industrial dispute for adjudication is the step taken by
the government which ensures that there are no legal strikes or lockouts.
A declaration of a lockout leaves the workers unemployed and creates an
environment of instability. This has political ramifications and is often
exploited by political institutions to their advantage. Hence, in the case
of a lockout, the government pressure on management to allow production
would be much more than the government pressure on union to resume work in
case of a strike.
India in the present context of economic development programs cannot afford
the unqualified right to the workers to strike or to the employer to
lock-out. Compulsory arbitration as an alternative of collective bargaining
has come to stay. The adoption of compulsory arbitration does not, however,
necessarily mean denial of the right to strike or stifling of trade union
movement. If the benefits of legislation, settlements and awards are to
reach the individual worker, not only the trade union movement has to be
encouraged and its outlook broadened but the laws have also be suitably
The existing legislation and judicial pronouncements lack breadth of vision.
Indeed, the statutory definitions of strike and lock-out have been rendered
worse by a system of interpretation which is devoid of policy-oriented
approach and which lays undue stress on semantics.
The discussion of the concepts and definition of strike has sought to
establish that legalistic consideration has frequently weighed with the
court in interpreting and expounding the said statutory definition: We
believe that emphasis on literal interpretation resulted in ignoring the
ordinarily understood connotation of the term strike and in encouraging
We now pass on to acts which constitute strike. Unlike the Industrial
Relations Bill, 1978 the three phrases used in the definition of strike in
IDA are not qualified by the expression total or partial. Further, they do
not specifically take into account go-slow. The Courts have accordingly
excluded go-slow from the purview of strike. However, the exclusion of
go-slow from the ambit of strike throws them open to the third party suits
- G.B. Pai, Labour Law in India, Vol. 1
- Dr. V.G. Goswami, Labour & Industrial Laws, 8th Ed., Central Law
- Dr. Avtar Singh & Dr. Harpreet Kaur, Introduction to Labour &
Industrial Law, 2nd Ed., 2008, Lexis-Nexis Butterworths Wadhwa Nagpur.
News Paper Source:
- Management of Kairbetta ... vs Rajamanickam And Others on 24 March,
- Kairbetta Estate v Rajamanicham.
- General Labour Unlon (Red Flag) ... vs B. V. Chavan And Ors on 16
- Sri Ramchandra Spinning Mills v/s State of Madras
Written By: Adv. R.Arunkumar
- Times of India.