10 Solved Problems (IRAC Method) — Labour Law I

These ten problems are worked in the IRAC method — Issue, Rule, Analysis, Conclusion — the way a KSLU answer sheet expects. They span all five units; the full Question Bank has 40+ more.

Problem 1 — Is the Gate Security Inspector a ‘Worker’? (Unit I)

Problem: “A” is employed as a security inspector at the factory gate. Is he a worker? Give reasons.

I — Issue. Whether “A”, designated a “security inspector” but posted at the factory gate on watch-and-ward duties, is a worker entitled to the Code’s protection.

R — Rule. 1. Under s.2(zr) of the IR Code, 2020 (s.2(s) ID Act), a worker is a person employed to do manual, operational, clerical, technical or junior-supervisory work, excluding those employed mainly in a managerial/administrative capacity or a supervisor drawing wages above the notified ceiling. 2. Status is decided by the dominant nature of the duties actually performed, not the designation — the control test of Dharangadhra Chemical Works v State of Saurashtra (1957), under which a person whose work and manner of work are controlled by the employer is a worker.

A — Analysis. 1. The decoy is the title “Inspector”, which is meant to suggest a supervisory or managerial post placing A outside the definition. 2. A’s real duties — checking passes at the gate, logging vehicles, keeping watch and ward — are operational/manual work, not the management of the business or the supervision of staff with power to hire, sanction or direct. The grand title does not change the character of the work, and there is nothing to show he draws supervisory wages above the ceiling; on the dominant-duties test he is plainly a workman.

C — Conclusion. “A” is a worker within s.2(zr); his designation is immaterial, and he may invoke the Code’s protection. The employer’s reliance on the label “inspector” fails.

Problem 2 — Leaving Duty to Attend a Meeting — Strike? (Unit II)

Problem: Workers, after reporting for duty, leave without permission to attend an ex-employee’s funeral. The employer treats it as an illegal strike. Decide.

I — Issue. Whether a concerted departure of workers to attend a funeral, without any demand against the employer, is a strike — and, if so, an illegal one.

R — Rule. 1. Under s.2(zk) IR Code (s.2(q) ID Act), a strike is a cessation of work by a body of workers acting in combination or a concerted refusal to work — the hallmark being a concerted stoppage to press a demand on the employer. 2. A concerted refusal amounting to a work stoppage can be a strike (Buckingham & Carnatic Co. v Workers (1953)), but the stoppage must carry the character of pressing a grievance in the employment relationship, not merely a common absence for a private reason.

A — Analysis. 1. The decoy is that the workers acted in combination and stopped work — which superficially fits the “strike” definition and tempts the conclusion that it is an illegal strike. 2. But there is no demand made on the employer and no dispute about employment terms; the workers left to attend a funeral, a private and social purpose. The essential element of pressing a demand is missing, so the concerted absence is better characterised as unauthorised absence / misconduct than as a strike.

C — Conclusion. The walk-out is not a strike; the employer’s “illegal strike” label is unsustainable. At most the workers may face disciplinary action for unauthorised absence, decided through a fair domestic enquiry — not the consequences of an illegal strike.

Problem 3 — Lay-off and the Offer of the Same Job (Unit II)

Problem: Worker A (one year’s service) is laid off and offered the same job at the same wages at the employer’s other establishment in another town (beyond 8 km). He refuses and claims lay-off compensation. Decide.

I — Issue. Whether A, laid off with a year’s service, loses his lay-off compensation by refusing alternative employment offered at another establishment situated beyond 8 km.

R — Rule. 1. A laid-off worker with one year’s continuous service is entitled to 50% of basic wages plus dearness allowance for the laid-off days (s.25C ID Act / s.67 IR Code). 2. He forfeits it under s.25E / s.69 IR Code only if he refuses alternative employment in the same or a nearby establishment within 8 km at the same wages needing no special skill (or fails to present himself, or the lay-off is caused by another section’s strike).

A — Analysis. 1. The decoy is simply that A “refused” the offered work — inviting the wrong conclusion that any refusal disentitles him. 2. But the disentitlement in s.69 bites only for a nearby offer within 8 km. The alternative here is at another town beyond 8 km, so it falls outside the disqualifying radius; A’s refusal of such a distant posting is therefore lawful and does not defeat his claim.

C — Conclusion. A is entitled to lay-off compensation (50% wages + DA); his refusal of a posting beyond 8 km does not disentitle him. Had the offer been within 8 km at the same wages needing no special skill, refusal would have cost him the compensation.

Problem 4 — The Driver Terminated for Defective Eyesight (Unit II)

Problem: A KSRTC driver is terminated because of defective eyesight. Is he entitled to retrenchment compensation?

I — Issue. Whether the termination of a driver on the ground of defective eyesight is “retrenchment” attracting the s.70 compensation.

R — Rule. 1. Retrenchment (s.2(oo) ID Act / s.2(zh) IR Code) is termination for any reason other than disciplinary action, but it expressly excludes “termination on the ground of continued ill-health”. 2. If a termination falls in an exclusion, the retrenchment conditions of s.70 (one month’s notice or pay, 15 days’ compensation per completed year, notice to Government) do not apply, because the termination is not retrenchment at all.

A — Analysis. 1. The decoy is that every termination looks like retrenchment demanding compensation, tempting the candidate to award s.70 relief mechanically. 2. But loss of eyesight that makes a driver unfit to drive is a case of continued ill-health / incapacity, which s.2(zh) squarely removes from the definition of retrenchment. The termination is therefore not retrenchment, and the s.70 machinery is not engaged. 3. It is worth adding that the exclusions in s.2(zh) are specific: had the driver been terminated to cut surplus staff, that would have been retrenchment attracting s.70; it is precisely because the ground here is continued ill-health that the case falls outside the definition.

C — Conclusion. The termination is not retrenchment, so retrenchment compensation under s.70 does not follow. The driver may have separate service-rule or medical-invalidation remedies, but he cannot claim retrenchment compensation.

Problem 5 — Registering the Raj Bhavan Employees’ Union (Unit III)

Problem: Employees of Raj Bhavan apply to register a Trade Union; the Registrar refuses. Decide.

I — Issue. Whether the domestic staff of the Raj Bhavan may form a registrable trade union, and whether the Registrar’s refusal to register is valid.

R — Rule. 1. A trade union is a combination of persons engaged in a trade or industry (s.2(h) TU Act); registration under ss.4–9 presupposes such a trade or industry connection. 2. Rangaswami v Registrar of Trade Unions, Madras (1962) held that the Raj Bhavan (the Governor’s household) is not a trade or industry, so its staff cannot register a trade union.

A — Analysis. 1. The decoy is that the applicants are employees who “ought” to be able to unionise, tempting the conclusion that the refusal is wrong. 2. But the Raj Bhavan is the Governor’s household establishment, not a trade or industry carried on for the production or supply of goods or services; on the authority of Rangaswami, its domestic staff are not engaged in a trade, so they cannot form a registrable trade union. The Registrar was therefore right to refuse. 3. Nor can the applicants improve their position by pointing to their employment as such: the Act protects combinations in a trade or industry, and a household establishment is neither, so the disability is one of subject-matter, which no amount of good faith on the applicants’ part can cure.

C — Conclusion. The Registrar’s refusal is valid. The staff cannot compel registration; their remedy, if aggrieved, is an appeal under s.11 — not a direction to register.

Problem 6 — Cancellation for Registration Obtained by Fraud (Unit III)

Problem: The Registrar cancels a union’s certificate for registration obtained by fraud. The union wants to challenge the cancellation. Advise.

I — Issue. Whether the union can challenge the cancellation of its certificate, cancelled on the ground that the registration was “obtained by fraud”, and by what route.

R — Rule. 1. Section 10(b) permits the Registrar to cancel a certificate obtained by fraud or mistake; but s.10 requires, except on the union’s own application, two months’ previous written notice stating the grounds and an opportunity to be heard (natural justice). 2. Section 11 gives the union a right of appeal against the cancellation.

A — Analysis. 1. The decoy is the assumption that a mere allegation of fraud automatically justifies cancellation, so that nothing can be done. 2. The union may challenge on two independent grounds: (a) whether the fraud is actually proved — a bald allegation is not enough, and the burden lies on the Registrar; and (b) whether the mandatory two months’ notice and hearing were in fact given — if the Registrar cancelled without notice, the cancellation is procedurally void for breach of natural justice, regardless of the merits.

C — Conclusion. Advise the union to appeal under s.11, contesting both the proof of fraud and any failure of the notice-and-hearing requirement. If the fraud is not established, or natural justice was denied, the cancellation will be set aside and registration restored.

Problem 7 — Refusing to Contribute to the Political Fund (Unit III)

Problem: A union member refuses to contribute to the political fund; his membership is suspended. He challenges the suspension. Decide.

I — Issue. Whether a union may suspend a member for refusing to contribute to its political fund.

R — Rule. Under s.16 of the Trade Unions Act, 1926 (s.17 IR Code), contribution to the political fund is not compulsory, and a member who does not contribute cannot be excluded from any benefit of the union or placed under any disability or disadvantage for not contributing.

A — Analysis. 1. The decoy is the union’s assumption that it may enforce the political contribution as a condition of continued membership. 2. Suspending the member because he declined to pay the political fund is precisely the disadvantage that s.16 forbids; his refusal is a statutory right, and no penalty — including suspension — may follow it. The union’s action is therefore unlawful on the face of the statute. 3. The point is one of statutory right: since s.16 makes non-contribution a protected choice, the union cannot dress up the penalty as an internal disciplinary matter; any consequence visited on the member because of his non-contribution is void, whatever form it takes.

C — Conclusion. The suspension is invalid; the member’s challenge succeeds. He is entitled to remain a member with all benefits, contribution to the political fund being entirely his free choice.

Problem 8 — Transfer of Undertaking & Standing Orders (Unit IV)

Problem: A firm is dissolved and its unit taken over by a new firm, which claims it is not bound by the standing orders certified for the old firm. Decide.

I — Issue. Whether a successor employer, who has taken over the industrial unit of a dissolved firm, is bound by the standing orders certified for the predecessor firm.

R — Rule. 1. Certified standing orders have statutory force and are the binding conditions of service of the establishment (Western India Match Co. (WIMCO) v Workmen (1973)); they come into operation 30 days after certification (s.7) and attach to the establishment, not to a particular owner. 2. On a transfer of the undertaking, the successor steps into the shoes of the predecessor and is bound by the existing terms of service until they are lawfully modified (Anakapalle Co-operative Agricultural & Industrial Society v Workmen (1963)).

A — Analysis. 1. The decoy is the change of ownership — the new firm argues that a fresh owner starts with a clean slate and can ignore the old rules. 2. But the establishment (the unit) is the same; only the ownership has changed. The certified standing orders attach to that establishment with statutory force, so the successor inherits them and cannot simply disregard them. If it wishes to change them, it must follow the modification procedure under s.10, not unilaterally repudiate them.

C — Conclusion. The successor’s contention is wrong: it is bound by the certified standing orders of the predecessor and must apply them until they are lawfully modified.

Problem 9 — Bonus After Dismissal for Misconduct (Unit V)

Problem: Employee M/Y is refused (or asked to repay) bonus after being dismissed for misconduct. Can the bonus be denied?

I — Issue. Whether an employee dismissed for misconduct (for example, insubordination) is disqualified from bonus, and whether a festival bonus already paid to him can be recovered.

R — Rule. 1. Under s.29 of the Code on Wages, 2019, an employee is disqualified from bonus only if he is dismissed for (a) fraud, (b) riotous or violent behaviour on the premises, (c) theft, misappropriation or sabotage, or (d) conviction for sexual harassment — a closed list of grounds. 2. Bonus is a statutory right of an eligible employee and its provisions are construed in the worker’s favour (Mumbai Kamgar Sabha v Abdulbhai Faizullabhai (1976)).

A — Analysis. 1. The decoy is the assumption that “dismissal for misconduct” automatically defeats bonus, tempting an answer that any dismissal ends the claim. 2. But ordinary insubordination is not one of the four listed grounds in s.29. Unless the misconduct amounts to fraud, violence, theft/sabotage or a sexual-harassment conviction, s.29 does not disqualify him; and bonus already earned or paid cannot be clawed back merely because he was later dismissed on a non-listed ground.

C — Conclusion. The employee is not disqualified from bonus for insubordination; his claim to the bonus earned stands, and a festival bonus already paid on a non-listed ground cannot be recovered. Had he been dismissed for theft or fraud, he would have forfeited it under s.29.

Problem 10 — Bonus Claim in a Profitable Year (Unit V)

Problem: Worker X’s industry made heavy profits during the year; X and others demand bonus. Advise.

I — Issue. Whether X and the other workers are entitled to bonus, and to how much, where the establishment has made heavy profits during the year.

R — Rule. 1. Under s.26 of the Code on Wages, 2019, an employee who has worked at least 30 days in the accounting year and draws wages within the notified ceiling is entitled to bonus. 2. The minimum bonus is 8.33% of wages (payable even without profit); where the allocable surplus (60% of the available surplus) is larger, bonus rises in proportion to wages, up to a maximum of 20%.

A — Analysis. 1. The decoy is any suggestion that bonus is discretionary, or a matter of the employer’s goodwill, that can be withheld despite profits. 2. Bonus is a statutory right, not a gratuity. Assuming X and the others satisfy the 30-days’-work and wage-ceiling conditions and are not disqualified under s.29, they are entitled to bonus; and because the industry made heavy profits, the available and allocable surplus are large, so their bonus should be well above the 8.33% minimum, up to the 20% maximum.

C — Conclusion. Advise X and the others that they are entitled to statutory bonus; given the heavy profits, they can claim bonus above the minimum and up to 20% of wages from the allocable surplus — subject only to the s.26 eligibility conditions and the s.29 disqualifications.

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