Unfair Labour Practices, Offences and Penalties under the IR Code

The Industrial Relations Code protects collective relations in two ways: it lists conduct by either side that is unfair and prohibited, and it attaches graded penalties to breaches of its core obligations. The Code also freezes conditions of service while disputes are pending and protects union office-bearers from victimisation. This note covers unfair labour practices, protection during proceedings, the penalty scheme and compounding.

1. Unfair Labour Practices

• Prohibition, s.84. No employer, worker or trade union shall commit any unfair labour practice specified in the Second Schedule, which carries forward the Fifth Schedule of the 1947 Act.

Figure 1: Examples from the Second Schedule

• Colour-Chem Ltd v A.L. Alaspurkar (1998). A punishment shockingly disproportionate to the misconduct can amount to victimisation, an unfair labour practice.
• MSRTC v Casteribe Rajya Parivahan Karmchari Sanghatana (2009). Keeping workers as temporaries for years to deny them permanent status is an unfair labour practice, and Umadevi (2006) does not bar relief under labour legislation.

2. Protection During Pending Proceedings, Section 90

• Status quo. While conciliation, arbitration or adjudication is pending, the employer may not alter conditions of service connected with the dispute to the workers' prejudice, or discharge or punish them for misconduct connected with it, without the written permission of the authority.
• Unconnected matters. For matters not connected with the dispute, the employer may act under the standing orders, but a discharge or dismissal needs payment of one month's wages and an application for approval to the authority.
• Protected workers. Union office-bearers recognised as protected workers, 1% of the workforce, at least five and at most 100, cannot be discharged or punished during proceedings without express written permission.
• Decision. The authority ordinarily decides an application for permission or approval within three months.

3. Penalties, Section 86

Figure 2: Main penalties under the IR Code

• Strikes and lock-outs. Separate penalties apply for illegal strikes, lock-outs, instigation and financial aid (Topic 15)
• Adjudication, s.85. Fine-only offences may be adjudicated by an officer not below the rank of Under Secretary to the Government of India or equivalent, after an inquiry; unpaid penalties are recovered after 90 days.
• Companies, s.88. Persons in charge of and responsible for the company's business are liable with the company, subject to the defence of lack of knowledge or due diligence.

4. Composition, Section 89

Figure 3: Compounding offences under the IR Code

5. Frequently Asked Questions

What are unfair labour practices under the IR Code?

They are the practices listed in the Second Schedule and prohibited by section 84. For employers they include interfering with the right to organise, dominating or financing a union, victimisation, and keeping workers temporary for years to deny them permanent status. For workers and unions they include supporting illegal strikes, coercing workers in union matters, go-slow and gherao, and violence.

Who are protected workers?

Under section 90, protected workers are office-bearers of registered unions recognised as such, numbering 1% of the workers, with a minimum of five and a maximum of one hundred. While a dispute is pending, they cannot be discharged, dismissed or otherwise punished without the written permission of the authority before which the proceeding is pending.

Can offences under the IR Code be compounded?

Yes. Under section 89 a notified Gazetted Officer may compound an offence for 50% of the maximum fine where it is punishable with fine only, and 75% where it is punishable with imprisonment up to one year or fine. The amount goes to the Social Security Fund. Composition is not available for a second similar offence within three years.

What is the penalty for retrenching without permission in a large establishment?

Under section 86(1), contravening sections 78 to 80 attracts fine of ₹1 lakh to ₹10 lakh. A repeat offence attracts fine of ₹5 lakh to ₹20 lakh, or imprisonment up to six months, or both. The retrenchment itself is illegal, and the workers remain entitled to all benefits as if they had not been retrenched.

6. Related Topics

• Topic 15: Strikes and Lock-outs. Penalties for illegal strikes and lock-outs.