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The Indian Penal Code, 1860

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Central India Law Quarterly
The Code Of Discipline In Industry, 1958
THE CODE OF DISCIPLINE IN INDUSTRY, 1958 Dr. L.C. Dhingra *and A.S. Verma ** INTRODUCTION 1. The historical development of trade union movement in lndia revealsthat law at the very outset viewed the labour movement unfavouraMe for the industrial peace. It was the riSe of social conscience that forced the law to recognisethe social needs of labour. Thus, apart from law, the social accept ability of the claims of labour has a very significant role in maintaining industrial harmony in the society. The down of this realisationis apparent in the labour policy of the Government of lndia commencingfrom the Fiieenth IndianLabour Conference, held in July 1957which in many respects can be said to be historic event in the field of labour and industry. This labour conference discussed the question of discipline in industry at length and laid down certain general principles to be followed by both labour and management for mutual interest as also for the common interest of the society and the nation. 2. Despitethe fact that alarge number of labour enactments have been passed, and the Indian labour scene crowded with various complex judicial formalities and legalities and the courts in lndia have played a considerable significant role in providingjustice in industrial scene has not been peaceful. Discipline has ceased to exit. Labour-management relations have been shattered and the expected workers involvement has not been adequately achieved. As has been rightly stated: he legislation itself has provided many substantivebenefiistq industrial workers the delays of labourjudiciary have reduced the effectiveness of these benefits."' The need for some measuredother than legislativewas, therefore, felt both by.themanagement and the workers. The Government of India, while preparing the documents of the Second Five-Year Plan, stressed this need and stated: 'The whole issue of industrial discipline in its various aspects should be examined and in the meantime the parties should see that tendencies to incflscipiine are * Professor, Faculty of Law, M.D. University, Rohtak. ** Lecturer, Faculty of Law, M.D. University, Rathak. 1. Dr. C.B. Memoria, Dynamics of lndustiral Relations, 439 (1985). 68 CENTRAL INDIA LAW QUARTERLY [I 995 sternly discounten~ed.~ 3. A Sub-Committee ap~ointed the Govt. of India considered the by general principles of. the Fieenth Indian Labour Conference and after certain m da n of t s co ii therein, the Code of Discipline was evolved in 1958. Thisspaper is devoted to examine critically am-e of the aspects of the Code of Discipline in Industry particulatiy in relationto nature, objectives, scope, effects and limitations. The necessary conclusions from the discussion of the certainaspects of the Code have beendrawn and form a significant part of this research paper. THE tNDUSTRIAL DfSClPUNE 4. Cordial Industrial relatians in country like ours can be maintained only through collective bargaining3 mutual understandingand goodwill on the part of capital and labour. Peace, harmony and efficiency cannot be registered on by decree or command. The tremendous responsibility for peaceful labour relations, optimum production and stable economy, therefore, lies on the shoulders of those people who are responsible for the conduot of the industry. Recognition by both labour and capital of its responsibility to get along together without government intervention is of over-rtding importance. It is true that "in industrial negotiations perfectionof machinary counts for far less than good faith and goodwill.4 The correct scientific approach towards the problem o industrial relations appears to f be the realization of the dignity of labour as a human being and the fact that labour is not a commod'&y and a worker remains a human being first and last. "Until the.spirii of-partnershipbecomes the spirit of industrial relations, conflict as to the division of the existing product of industry obscures the needfor apwation towards productivii out of which alone can come a real advance in prosper~y.~ 2. Government of India, Planning Commission, Second Five Year plan, 578 (1956). 3. Ludwing TeUer atatea the definitionof collective bargaining in these terms. "It may be boradly defined . an agreement belween a single employers or an association of s * dmplopOS on one hend and a Iabou[ union on the other, which regulates the terms ' and conclitionr of employment".See Labog# Disputes and Collective Bargaining. Vol. I, ! h Q t i ~ n 154 4. AC. Pigou, Economias of Welfare. Part HI, Chapter-1, p. 414. 5. H.S. KirkUdy. The Spirit of hdurtrial Relations, pp 5-6. Also see Dr. T.N. Bhagoliwal Economics of Lebour and Industrial Relations, 295 (1982). Vol. Vlll:l] THE CODE OF DISCIPLINE 69 5. The spirit of discipline on the part of both labour and capital is not only in the interest of industry as a whole but provides rights and obligations on all sides. The discipline to observe the 'rules of game' is an attitude of mind and requires, apart from legislative sanctions, persuasion on a moral plane. Several developments madeinthe yeab beforethe SecondF eYear i plan, such as inadequacy of governmental machinery for implementation, instancesof non observance of awards on the side of some employers, and indisciplineamong all contributed to the following statement in the Second Five Years Plan: "While the observanceof stricterdiscipline, bothon the part of labour and management, is a matter which cannot by imposed by legislation, it has to be achieved by organizations of employers and workers by evolvhg suitable sanctions of their own some steps, legislative or otherwise, in casqof rank indisciplinerequireto be thought , of? 6. The Government of India in 1957 shifted its emphasis from legislation to voluntary agreements for bringing home to the parties government, workers and employers an awareness of their obligations under the labour legislations and also creating in them an attitude o willing f acceptance of their responsibilitiis and a rehdiness to discharge them. It was in this context that the question of descipline in the industry was discussed at length by the Indian Labour Conference held in July, 1957. The following general principles were laid down; There should be no lockout or strike without notice. No unilateral action should be taken in connection with any industrial matter. There should be no recourse to go slow tactics. \ No deliberate damage should be caused to plant or property. Acts of violence, intimidation, coercion, or instigation should not be resorted to. 6. Supra n. 2 70 CENTRAL,INDIA LAW QUARTERLY [I 995 (9 The existing machinery for settlement of disputes should be utilised. (g) Awards and agreements should be speedly implemented. (h) Anyacti9n which disturbs cordial industrial relations should be avoided. 7. In order to consider these aspects and the rele.vant matters, a Tripartite Sub Committee was appointed and on vJhose report, recommending a Code of Discipline, was accepted with certain m~difications.~ Code of Discipline in lnduhy, thus evolved, was The accepted in March 1958 after due discussion, came into force on 1st of June, 1958. NATURE O r THE CODE 8. The Code of Discipline is a set of self imposed and mutually agreed 1 voluntary principles of discipline and relations between the management and workers in the industry. It is a code of conduct both for workers and managements and provides for the voluntary and mutual settlement of disputes, through mutual negotiations, voluntary arbitrations and conciliationswithout the interference of an outside agency. While it refrains both the parties from unilateral action, it induces them to make the best use of the existing machinery for th,e settlement of disputes. Thus the code compels both the parties not to indulge in any strike or lock out without exploring the avenues for the voluntary, mutual settlement of any possible misunderstanding or disputes. In nutshell, it lays emphasis on the atmosphere of mutual regard and respedt. 9. The Code also stimulatesthe managements to give up unfair labour practices. Similarly, it prevails upon the trade unions not to indulge in coercive measures. Mutual agreement is preferred to compulsory arbitration of adjudication. It prescribes a set of mutually agreed principles to be followed inthe industry so that a constructive co-operation betweenworkers 7. V.P. Michael, Industrial Relations in India and Workers lnvdvementin Management, 28 (1979). 8. It was clarified that as the Code came into effect from June, 1, 1958, it would not be correct to apply sanction crf the Code to case of infringementsthat occured prior to the date. i Vbl. V111:l] THE CODE.OF DISCIPLINE 71 and management is encouraged. Under any circumstanceswork should not suffer by go slow tactics and the grievance procedure should be followed according to the set rules. Any action that stands in the way of cordial relations and is against the spirit of the Code on the part of both managements and trade unions should be avoided. It applies to both public and private sectors and may fail when the people concerned fail to comply with it. Hence, the Code is voulntary, spontaneous and moral in nature and has been evolved as a result of tripartite efforts. OBJECTIVES OF THE CODE 10. The Code i s aimed at establishing cordial relations between managements and workers on a voluntary basis. It has been expected to facilitate the industrial harmony and t6 put an end to industrial unrest. Objectives of the Code are: (i) to emphasise upon the employers and employees to recognise each other's rights and obligations; . (ii) to promote constructive criticism between the parties concerned at all levels; (iii) To maintain discipline in the industry; (ii) To avoid work stoppages and litigation; ' (v) To,eliminateall forms of coercion, intimidation and violence in industrial relations; (vi) To facilitate the free growth of trade unioys; and (vii) To secure settlement of disputes and grievance8 by mutual negotiation, conciliation and voluntary arbitration 11. The Code thus, aims, at bringing about greater industrial harmony and as such expects: "a just recognition by employers and workers of the rights and responsibilities of either party as defined by law and agreements (including bipartite, agreements arived at all leavels from time to time) an4.a proper and willing 9. Supra n. 7 p. 30. 72 CENTRAL INDIA LAW QUARTERLY I1995 discharge by either party of its obligations consequent on such recognition. The Central and State Governments, on their part will arrange to examine and set right any shortcomings in the machinery they constitute for the administrationof labour laws."'0 SCOPE OF THE CODE 12. The Code of Discipline prepares a ground for employees to meet their employers and discuss their problems. It enables the workers and trade unions to be nominated to the grievance committee constituted under the grievance procedure. It creates effective liaison between the workers and the management and enables the recognised unions to get certain rights, to put or cause to be put up a notice board on the premises of the undertaking which its members are employed and afix or cause to be affixed thereon notice relating to. mettings, statements of accounts of its income and expenditure and other announcements which are not abusive, indecent or inflammatory or subverise of discipline or otherwise contrary to the Code; to raise issue and enter into collective agreements with employers or general questions concerning the terms of employment and conditions of service of workers in an establishment or in the case of a representative union, in an industry in a local area; to collect membership fees/subscriptions payable by members to the union within the premises of the undertaking; (a) to hold discusions with the employees who are members of the union at a suitable place or places within the premises of officelfactory/establishment as a mutually agreed upon, (b) to meet and discuss-withan employer of any person ' appointed by him for its purpose, the grievances of 10. The Code of Discipline in Industry, 1958, Also See Dr. S.N. Dhyani, Trade Unions and the RTghtto Strike: A Comparative Sodo-legal Study in Labour Management Relations, p ~276-77. . THE CODE OF PlSClPLlNE 73 its members empioyed in the undertaking, (c) to inspect, by prior arrangement in an undertaking, any placewhere any member of union is emp[oyed; (5) to nominate its representatives on nonstatutory bipartite committees, e.g., production committees, welfare . committees, canteen committees, houses allotment committees, etc. set up by the management; (6) to nominate its representative on joint Management Councils' and ' (7) to nominate its representative on the Grievance Committee constituted. yyder the Grievance Procedure in an establsihment. 13. At the sametime, when there exists any misunderstandingbetween the partiesthe Codetries to amicably settle differences. The Third FiveYears Plan outline has, therefore, laid emphasis on the mutual discussion and arbitrations as the obligations of the Code on the parties in the following words: "The Code lays down specific obligations for the management and the workers with the object of promoting constructive co-operation between their representatives at all levels, avoiding stoppages as well as litigation, securing settlement of grievances by mutual negotiations, conciliation and voluntary arbiitation, facilitating the growth of trade unions and eliminating all forms of coercion and violence in industrial relations." l2 14. Thus, in order to maintain peace, harmony and discipline in industry, the code provides certain provisions f ~ management and trade r unions in this regard. Accordingly, the management interalia agrees" not to support encourage any unfair practice such as. l3 1 I.Supri n. 7 p. 30. 12. Government of India, Third Fba Year Plan Outline. Labour Policy, Para 3. 13. Clause Ill (II), W e of Discipline in Industry, 1958. CENTRAL INDIA LAW QUARTERLY [I 995 "(a) interference with the right of the employees to enroll or continueas union members; (b) discrimination, restraint or coercion against any employees because of recognised activity of trade unions and (c) victimization of any employee and abuse of authority in any form. The unions agree14 to discourage unfair labour practice, such as, (a) negligence of duty, (b) careless o&ration, (c) damage to property, (d) interference with or distrubance to normal work, and (e) insubordination". From the foregoing discussion, the scope of the Code, in nutshell.can be stated as under: l5 The Code of Disciplineenjoins uponthe partiesto refarainfrom taking unlateralactionin connectionwith any industrialmatter, to utilise the existing machinery for settlement of disputes with atmost expedition and to adjuron strikes and lock-out without notice and without exploring all avenues of settlement. It also discourages recourse to litigation and recommends that disputes not mutually settled should be resolved through voluntary arbitration. The employers are required to recognisethe majority union in all establishment or industry and set-up a mutually-agreed grievance procedure. The workers are not to resort to go-slow, coercion a ~ d intimidation, etc. Unfair labour practices are to be given up, whether on the part of the employer or workers Both employers and unions are required to take appropriate action against their officers and members found iridulging in action against the spirit of the Code". -I 14. Clause N (IV), Id. 15. See Dr. N.D. Sharma and V.C. Kochar,. Law, Labour and Management,58 0980). Vol. VIII:l] THE CODE OF DISCIPLINE EFFECTS OF THE CODE 16. The Code of discipline made an impact on the industrial relations scene in the beginning of its introduction.jSoth management and workers accepted it with open heart. As a result of this, the number of industrial disputes of workers involved and of the mendays lost was considerably reduced from 1958 onwards, as compared to 1957. The total number of disputes had not exceeded the 1957-level upto 1963. B t after 1963, the , u magnitude of disputes skyrocketed more than ever before. The table X shows the trend of disputes from 1951 to 1978 and the connected factors being treated as index variables indicate the effect of Code of discipline in the industry. The following table gives the information relating to industrial disputes in India from 1951 to 1978. 17. The table indicates that as soon as the Code of Discipline was introduced, it generated positive impact on the industries disputes: the industrialdisputes began to. show a downward trend. Disputes declined by over6.5 per cent in 1958 as compared to 1975. Even though after 1958 a little growth was negligible and the total number of disputes never reached the 1953 level till 1963; compared to 1957, the number of disputes marked in annual decline of one percent upto 1963. Similarly the mandays lost marked a decline at an average annual rate of about 5 per cent from 1958 to 1963. This decline of industrial unrest can be directly associated with the variable introductionof Code of Discipline. Butoverthrowing all the previous expectations, industrial unrest boosted up from 1964 onwards, provingthat the effect of the Code of Discipline was temporary. On close analysis of the facts and figures, it can be stated that a litfle impact made by the Code was quite temporary and it failed to work well in the long run. The failure of the Code to make any long run impact has been highlighted by the National Commission on Labourin the fdlowlng words: 'Thus the Code of Discipline which was Introduced with very high expectations has ceased to exist at present." l6 16. Report of the National Commission on Labour 345 (1969). 76 CENTRAL INDIA LAW QUARTERLY INDUSTRIAL DISPUTES IN INDIA FROM 1951 TO 1978 Year No No. of workers No of mandays disputes involved('000) lost (in million) 1951 1071 691 3.8 1952 963 809 3.3 1953 772 467 3.3 1 954 840 477 33 . 1955 1166 % 528 5.6 1956 1203 75 1 6.9 1957 1630 889 6;4 1958 1524 929 77 . 1959 1531 . 694 ' 5.6 1960 1583 986 6.5 1961 1357 512 4.9 1962 1491 705 61 . 1 963 1741 5 3.2 1 964 2151 1003 7.7 1965 1 835 991 6.4 1 966 '2556 1410 13.8 1967 2 15 8 1490 1. 71 1968 2776 1669 17.2 1969 >627 1827 1. 91 1970 2889 1827 20.6 1791 2752 1615 1. 65 1972 2924 1593 1. 79 1973 2924 2102 17.8 1974 .2601 2347 31.6 1975 1493 1143 21.9 1 976 ' 1459 737 12.7 1977 3 17 1 2193 25.3 Source Dr. T. N. Bhaaolial, Economics of Labour and Social Welfare 316 (1982). Also See statistical outline of India. THE CODE OF DISCIPLINE 77 Among the factors mentioned as responsiblefor this are: l7 the absence of genuine desire for and limited support to self-imposedvoluntary restraintson the part of employers' and workers' organisation: the worsening economic situation which eroded the real wage of workers; the inability of some employers to implement their obligations; a disarry among the labour representativedue to rivalries; conflicts between code and the law above all; the state of discipline in the body politic. 18. A remark made by Viren J. Shah reveals the present mentality of both trade unions and managements towards each other. "We are wintnessing around us the emergence of a deplorabletrend towardsa Mafia type gangsterism in trade union movement in which both labour and management become grist to the mil union bosses" ambition to esatblish an expendingsphere of influence. The year 1977-78was a nightmare in this respect."18thus, it can be stated that the recent trends revealthat the Code of Discipline has failed to achieve its obectives in the full sense otthe term. LIMITATIONS OF THE CODE 19. As already mentioned, the Code of discipline does not have legal sanction. It solgly depends on the voluntary approach of both the managements and workers. In case any of the parties fails to have a proper approach, the Code ceases to work. In course of time both managements and workers have turned cold face against the Code. Especially some of the union leaders who view everything through personal gains and vested - interestsfeel that the Code is deterimentalto their self-interest.Even, though a Central Evaluation and Implementation Cell comprising the 17. lbid p. 346. 18. Shah Viren J. Industrial Unrest, Business India, Nov- 13-16, 1978, p. 47. 1 78 CENTRAL INDIA LAW QUARTERLY . [ I995 representatives of Central Organisations of Workers, Employers and Government was set up in June 1958, under the Chairmanshipof the Union Labour Minister, ceased to function in course of time. As there was no compulsion or legal binding on the part of the industrial units and the individual workers organisations they have interpreted the Code according to their whims and fancies. 20. The Central Organisations, at the same time did not take any action against anybody, which apparently they did not want. Thus in course dtime the Code of Discipline became an element of only historical importance without any practical implication or application. Moreover, the cases subjected to implementation of the Code and did not receive proper attention both by the managements and the workers unions. Out of the 609, 696.306,226 and 171 cases reported in 1969, 1970, 1971, 1972 and 1973 respectively, only34,9,13,21 and 12cases respectively receivedconcetrate attention. The trade unions instead of complying with the Code resorted to direct action rather. I CONCLUSIONS 21. The above discussion leads us to the coflclusion that the Code of discipline have developed an attitude of inmerence from the parties to the disputes. It can stimulate industrial peace provided its drawbacks are eliminated. This is possiMe only wh& a legal sanction to the important provisions of the Code like recognition of trade unions, grievance procedure, unfair labour practices, etc is accprded. Our conclusion, therefore, is while that part of the code which enjoins the strict observance of obligations and respondbititiesunder various labour laws may be left to the normal process of implementation and enforcement by labour. administrationmachinary. Some other needsto beformalised bythem. They are. lg (a) Recognitionof union as bargaining agetns; (b) Setting up of a grievance machinery; 1 . Supra n. 16 p. 347. 9 .a Vol. VIII:l] THE CODE OF DISCIPUNE 79 (c) Prohibitionof strike and lock-out without notice; (d) penalties for unfair labour practice; (e) Provisionof voluntary arbitration. With the removal of these provision from the Code t ghre a legal form, the o code will have no useful function to perform. 22. It can be hoped that the unions and employers would rise to the occasion in sinking their past prejudices and contribute positively in establishing new dimenSions of understanding in labour-management relations. (ANNEXURE) \ THE CODE OF DISCIPLINE IN INDUSTRY, 1958 (Both inpublic and private sectors) 1. To MAINTAIN DISCIPLINE IN INDUSTRY there has to be (9 a just recognition by employers and workers of the rights and responsibilities of either party, as defined by the laws and agreements (inducting bipartite and tripartite agreement arrived at all levels from time to time), and (it) a proper and willing discharge by either party of its obligations consequent on such recognition. The Central and State Governments, on their part, will arrange to examine and set right any shortcomings in the machinery they constitute for the administration of labour laws. To ensure better discipline in industry 11. MANAGEMENT AND UNION (S) AGREE (i) that no unilateralaction should be taken in connectionwith any industrial matter and that disputes should be settled at appropriate level; (ii) that the existing machinery for settlement of disputes should be utilisedwith the utmost expedition; ' CENTRAL INDIA-LAW QUARTERLY [I 995 (ii) that affrming their faith in democratic principles, they bind themselves to settle all future differences, disputes and grievances by mutual negotiation, conciliation and voluntary arbitration; \ (v) that neither party will have recourse to (a) coercion. (b) intimidation. (c) victimisation. or (d) go-slow; (vi) that they will avoid (a) litigation. (b) sit-down and stay- in strikes, and (c) lock-outs; (vii) that they will promote constructive co-operation betweentheir , representatives at all levels and as between workers themselves and abide by the spirit of agreements mutually entered into; (yiii) that they will establish upon a mutually agreed basis, a grievance procedure which will ensure a speedy and full investigation leading to settiement; (ix) that they will abide by various stages in the grievance procedure and take no arbitrary action which would bypass this procedure; and (x) that they will educate the management personneland workers regarding their obligation to each'other. Ill. MANAGEMENT AGREE (i) not to increase work-loads unless agree upon or settled otherwise; (ii) not to support or encourage any unfair labour practice, such as, (a) interference with the right of employees to enrol or continue as union members, (bl discrimination, restraint or coercionagainstany employeebecauseof recognised activity of trade unions, and (c) victimisation of any employee and ' abuse of authority in any form; (iii) to take prompt action for (a) settlement of grievances, and (b) implementation of settlements. awards, decisions and orders; (ii) to display in conspicuous places in the undertaking the provisions of this Code in local language (5); (v) to distinquish between actions justifying immediatedischarge and those where discharge must be preceded by a warning reprimand, suspension o some other form of disciplinary r action and to arrange that all such disciplinary action and to THE CODE OF DISCIPLINE 81 arrange that all such disoiplinary action should be subject to an appeal through normal grievance procedure; (vi) to take approprate disciplinary action against its officers and members in cases where enquiries reveal that they were responsible for precipitate action by workers leading to indiscipline, and (vii) to recognise the union in accordance with the criteria evolved at the 16th session of the Indian Labour Conference held in May, 1958. IV. UNION (S) AGREE (i) not to engage in any form of physical duress; (ii) not to permit demonstrationswhich are not peaceful and not to permit rowdyism in demonstration; (iii) that their members will not engage or cause other employees to engage in any union activity during working hours, unless as provided for by law, agreement or practice; (iv) to discourageunfair tabour practices, such as, (a) negligence of duty, (b) &reless operation, (c) damage to property (d) interference with or disturbance to normal work, and (e) insubordination; ' (v) to take prompt action to implement awards, agreements, settlements and decisions; (vi) to display in conspicuous places in the union officers, the provisions of this Code in the lad language (s); and (vii) to express disapproval and to take appropriate action against office bearers and membersfor indulging In action against the spirit of this Code.