CRITICAL SCRUTINY OF ‘NO WORK NO PAY’ DOCTRINE IN LABOUR LAW

LABOUR LAW - I
SEMESTER-VII

PROJECT SUBMITTED BY: PROJECT SUBMITTED TO:

NOYONIKA NAIR (1219) PROF. PARVEEN
TANVI ANNAPAREDDY (1255) FACULTY OF LAW
VARSHA MANOJ (1256) NATIONAL LAW UNIVERSITY JODHPUR

NATIONAL LAW UNIVERSITY, JODHPUR

SUMMER SESSION
(JULY-NOVEMBER, 2017)
 TABLE OF CONTENTS

TABLE OF STATUTES AND CASES II

RESEARCH METHODOLOGY 1

REVIEW OF LITERATURE 1
OBJECTIVE OF RESEARCH 1
RATIONALE OF RESEARCH 1

INTRODUCTION 2

OVERVIEW 2

RIGHT TO STRIKE 4

STATUTORY RIGHT 4
FUNDAMENTAL AND LEGAL RIGHT 5

STRIKE AND ‘NO WORK NO PAY’ 6

CONCLUSIONS AND RECOMMENDATIONS 10
BIBLIOGRAPHY III

BOOKS III
JOURNAL ARTICLES III

4
 TABLE OF STATUTES AND CASES

Statutes

Industrial Disputes Act, 1947 2, 4, 7

Payment of Wages Act, 1936. 2, 3
Trade Unions Act, 1926. 5

Cases

All India Bank Employees ‘Association v. National Industrial Tribunal 5

B.R. Singh v. Union of India 5
Bank of India v. T.S. Kelawala 5, 10
Crompton Greaves Ltd. v. Its Workmen 7, 10
Dharam Singh Rajput v. Bank of India 6
Gujarat Steel Tubes v. Its Mazdoor Sabha 5, 10
Kairbitta Estate v. Rajmanickam 4
Kameshwar Prasad v. State of Bihar 5
Management of Churakulam Tea Estate v. Its Workmen and Anr 6, 10
Mohan M. Agashe v. MSEDCL & Anr. 10
Panyam Cements & Minerals Industries v. Deccan Wire Employees Association 6
Syndicate Bank v. K. Umesh Nayak 8, 10
T.K. Rangarajan v. Govt. of Tamil Nadu and Ors 4, 5, 10
Vikram Thamskar v. Steel Authority of India 6

5
 RESEARCH METHODOLOGY
Review of Literature

The literature for the current project comprises of both primary and secondary sources. The
primary sources that have been used are the Industrial Disputes Act and the Payment of
Wages Act. Reference has also been made to secondary sources such as decisions by the

Supreme Court of India and various High Courts. To develop a general understanding of
labour law, the research has consulted Dobia: The Law of Services and Dismissals1which is a
well-regarded commentary on the issue of ‘no work no pay’. Further reference has been

made to the works of authors such as C. Krishnamurthi2 and Srikanta Mishra.3 Online
repositories such a JSTOR and LexisNexis have also been consulted to develop a deep
understanding of the subject.

Objective of Research

The objective of this paper is to study and analyse the jurisprudence on the issue of ‘No Work
No Pay’ and its applicability to the various different kinds of strikes in light of various
judicial pronouncements.

Rationale of Research

The present research is being undertaken as various courts in the country have differed in
their pronouncements of whether wages are required to be paid to employees who wilfully
absent themselves from work in pursuance of strikes. This is interlinked with the issue of

whether not strike in India is recognised as a right of the worker. It thus becomes important to

elucidate the principles regulating the application of this doctrine.

Utility of Research

1
Volume 2, Chapter 10.
2
Supra, note 3.
3
Srikanta Mishra, LABOUR LAWS AND INDUSTRIAL RELATIONS: NEW HORIZONS, Deep and Deep Publications,
1995.
6
Given the absence of judicial consensus on the issue of ‘No Work No Pay’, this paper will be
useful insofar as it places several conflicting judgments in the same document and charts out
a way forward.

Research Design
We have adopted the doctrinal method of research. The research questions and hypothesis

have been framed after preliminary research on the issue. The relevant statutes such as the
Industrial Disputes Act were referred to in order to gain a basic understanding of the
provision. Thereafter, the researcher read through various articles and online sources to

identify problem areas within the scope of ‘No Work No Pay’. Once the problem area, which
is the applicability of this principle to a situation of strike, was identified, the researcher went
through the important decisions by the Supreme Court and various other High Courts to
understand the judicial

INTRODUCTION
Overview

The employer-employee relationship is based on the fact that a workman agrees to provide
her labor/skill to the employer in return for which the employer agrees to compensate her
with money/ benefits/ other considerations. Such money/benefit/other consideration are

referred to as Wages. The Industrial Disputes Act stipulates that wages means any
remuneration paid to the workman by the employer, for the work she performs for the
employer.4It includes benefits and allowances such as dearness allowance or the value of any

housing or the supply of light, water, electricity etc. It does not, however, include bonuses,

gratuity or any contribution to the pension or provident fund.5

4
s. 2(rr), Industrial Disputes Act, 1947.
5
Ibid.
7
The principle of ‘No Work No Pay’ is enshrined in the relationship between an employer and
employee. Where an employee refuses to work as a result of a strike or absence from work or

various other reasons, the employer has no obligation to pay any wages.6

This doctrine in enshrined in the Payment of Wages Act. It is clearly stipulated that deduction

may be made from wages for absence from duty.7 Absence from duty means the absence of
an employed person from the place or places at which she is required to work as per the
terms of employment for the whole or any part of the period during which she is supposed to
work.8Such deduction of wage, however, must in no instance be disproportionate to the

period of absence from work.9

Absence from work is not limited to the physical presence of the employee in the place of
work. A refusal to work in pursuance of a stay in strike or for any other cause which is not
reasonable would make the employee who refuses liable for deduction of a proportional
amount from her wages.10 The principle of ‘no work no pay’ is of utmost relevance with

regards to a situation of strike. In this paper, the researcher aims to explore the various kinds

of strikes and the applicability of the aforementioned principle to such situations.

development of the doctrine.

6
C. Krishnamurthi, DIES NON (NO WORK NO PAY) IN BANKING INDUSTRY, Serial Publications, 01 Jan 2009.
7
s. 7(2)(b), Payment of Wages Act, 1936.
8
s. 9(1), Payment of Wages Act, 1936.
9
s. 9(2), Payment of Wages Act, 1936.
10
Explanation to s. 9, Payment of Wages Act, 1936
8
 RIGHT TO STRIKE

The existence of a right to strike has been a matter of great dispute. A vast jurisprudence has

been created on the issue culminating with the problematic judgement in the T.K. Rangarajan

case.11

Statutory Right

Before delving into the judicial decisions on the matter, it is pertinent to understand the
statutory provisions that are involved. The Statement of Objects and Reasons of the Industrial

Disputes Act itself gives us an idea of the intention of the framers with regards to strike. The
statement reads:

"The power to refer disputes to Industrial Tribunals and enforce their awards
is an essential corollary to the obligation that lies on the Government to
secure conclusive determination of the disputes with a view to redressing the
legitimate grievances of the parties thereto, such obligation arising from the
imposition of restraints on the rights of strike and lock-out, which must
remain inviolate, except where considerations of public interest override
such right".12

Right to strike as a mode of redressal of legitimate grievances of the workers against the
employers is recognised under the scheme of the ID Act.13 Furthermore, s.24 differentiated
between legal and illegal strikes (those which do not meet the provisions laid down in the ID
Act.) Sections 22,23 and 24 of the Act imply a right to strike for workers and concomitant

right of lockout for the employer.14This was elaborated on by Justice Gajendragadkar who
said the weapon of strike is available to the workman and so is the weapon of lockout to the
employer.15

11
T.K. Rangarajan v. Govt. of Tamil Nadu and Ors, Appeal (Civil) 5556 of 2003.
12
Statement of Objects and Reasons, Industrial Disputes Act, 1947.
13
1979 Lab IC 1079 (1084) (DB) (Punj).
14
Anirudh Rastogi, Is there a right to strike, Combat Law, Volume 2, Issue 6 February-March 2004
15
Management of Kairbitta Estate v. Rajmanickam, 1960 AIR 893
9
Besides the ID Act, the Trade Unions Act16 also recognizes the right to strike. Sections 18

(xiii) and 19 (xiv) of the Act confer immunity upon trade unions on strike from civil liability.

Fundamental and Legal Right

The working class has earned the right to strike after a lengthy and arduous struggle.17 Strikes

are integral to the process of bargaining in an industry.18A worker has few other means of

defending her wage other than seeking an increase in money wage. If a capitalist does not
grant the requested increase, she can be brought to the negotiating table by workers going on
strike. The same applies to government servants as well but it is not merely the authorities

but also the general public which suffers a loss. This places considerable pressure on the

relevant to authority to negotiate.19

The right to strike shares deep links with the practice of collective bargaining.20 The
Supreme Court has held that the ability of trade unions to bargain with the employers will be
substantially affected if they are unable to demonstrate by adopting methods such as strike,
go-slow or sit down strike.21
As far as the right to strike being a fundamental right, the Supreme Court has held that even a
liberal interpretation of Article 19(1)(c) cannot lead to the conclusion that it is a fundamental
right.22

These issues were finally decided by the Supreme Court in its decision in the T.K Rangarajan

Case.23The Court dealt with the contention, raised in the All India Bank Employees’
Association case24,that the freedom to form an association under Article 19(1)(c) of the
Constitution carried with it the right to strike by saying that interpreting the constitution in

16
Trade Unions Act, 1926.
17
Bank of India v. T.S. Kelawala, 1990 (4) SCC 744.
18
Supra, note 14.
19
R. J. Kochar. Right to Strike: Has Supreme Court Moved Backward? Economic and Political Weekly 25.29
(1990): 1564-566.
20
Gujarat Steel Tubes v. Its Mazdoor Sabha, AIR 1980 SC 1896
21
B.R. Singh v. Union of India,[1990] Lab I.C. 389 (396) (S.C.)
22
Kameshwar Prasad v. State of Bihar, (1962) Supp 3 SCR 369
23
Supra, note 11.
24
All India Bank Employees ‘Association v. National Industrial Tribunal, AIR 1962 SC 171.
10
such a manner would lead to a never ending circle where rights concomitant to concomitant
rights would also have to recognised.
While it is acceptable that the right to strike cannot be seen as a fundamental right, the
manner in which the Court dealt with the issue of there being a legal right to strike was
shocking. The Court categorically held that Government Employees have no “legal, moral or

equitable right” to go on strike. This decision seems to go against both statutory provisions

as well as previously decided cases. Furthermore, the bench in this case was smaller than the

3 Judge Bench in the Gujarat Steel Tubes case and could not overrule that decision.

STRIKE AND ‘NO WORK NO PAY’

The remuneration or salary earned by a worker depends on the performance of work in

accordance with the contract of employment. No part of the remuneration can be claimed
unless the service is completely performed in a situation where the contract provides for
payment on the completion of a period of service or a piece of work. The employer may
deduct the salary of the entire day if the worker absents even for a period of a few hours.25
If the employee absents from work without just cause, she commits a breach of the terms of
contract. The legal position is that an employee forfeits remuneration when she does not

discharge her duty as in the situation of a strike.26

A strike requires workers to cease doing work or work in a slow manner so as to reduce
production. The question that is to be answered is whether the wages of workers can be

deducted for the periods when they were on strike. It is pertinent in this context to understand

that strikes may be legal or illegal and justified or unjustified.27

The question of whether the wages of workers could be deducted for the period of strike first
came up in the Churakulam Tea Estate28 case. The case involved a dispute regarding non-

payment of bonus for a considerable period of time. After the failure of conciliation

proceedings, nearly 27 workers struck work. The management thereafter declined to pay

25
Dharam Singh Rajput v. Bank of India, [1979]12 LIC 1079.
26
Vikram Thamskar v. Steel Authority of India. 1982 II LLN 319 (M.P.)
27
Panyam Cements & Minerals Industries v. Deccan Wire Employees Association, 1998 II CLR 923
(Karn.H.C.).
28
Management of Churakulam Tea Estate v. Its Workmen and Anr, AIR 1969 SC 998
11
wages for the period of strike.29 The matter was referred to the Industrial Tribunal which held
that in the circumstances the strike was both legal and justified and directed the management
to pay wages for the day of strike.30

The Court first dealt with contention that strike was illegal under s. 24(1)(i) insofar as it had

been called during the pendency of conciliation proceedings under s. 2331. The Court negated

the argument and stated that the strike was in fact called after the conciliation had failed. It
also held that the strike was justified as it was in protest against the attitude towards the
conference of both parties called for by the Labour Minister.32 The Court upheld the decision

of the Tribunal insofar as it ordered payment of wages for the period of strike.

The second judgement of importance as delivered in the Crompton Greaves33case. The

Calcutta branch of Crompton Greaves was planning on laying off a considerable number of
workers as a result of economic recession. In order to negotiate a middle path, a few meetings

were held between both the parties. However, the differences remained and the Management

chose to retrench 93 workers. The workers saw this as a serious step and resorted to strike

after giving required notice to the Management and Labour Commissioner.34

The Court stated the well settled principle of law that in order to be entitled to wages for the
period of strike, the strike must be both legal and justified and that a strike cannot be said to
be unjustified unless the reasons for it are unreasonable or perverse.35 The Court eventually
agreed with the decision of the Tribunal in the current case and granted wages to the
workmen for a considerable portion of the period of strike. Both these cases reflect the
position that as long as a strike is both legal and justified, the principle of no work no pay
cannot be applied and workers are entitled to wages for the aforesaid period.

29
Id, ¶4.
30
Id, ¶9.
31
s. 23, Industrial Disputes Act, 1947.
32
Id, ¶24.
33
Crompton Greaves Ltd. v. Its Workmen, AIR 1978 SC 1489.
34
Id, ¶2.
35
Id, ¶3.
12
However, in the T.S. Kelawala36 case, the Supreme Court observed that in a situation where
the contract, standing orders or service rules are silent, the management can deduct wages
for the period of absence when such absence is not disputed and is the result of a concerted
action on part of the workers.37 Most importantly the court laid down the following
proposition:

"...whether the strike is legal or illegal, the workers are liable to lose wages

for the period of strike. The liability to lose wages does not either make the

strike illegal as a weapon or deprive the workers of it. When workers resort to

it, they do so knowing full well its consequences."38

Therefore, while holding that workers ostensibly have a right to strike, the Court stated that
no wages could be paid for the period of strike irrespective of whether the strike was legal or
illegal. This pronouncement created a conflict with the two decision discussed previously.

On the issue of a workman's entitlement to wages during a strike, regardless of its legality,
the Supreme Court was faced with a conflict in itself - Churakulam and Crompton
Greaves emphasized on the legality of the strike by saying that only during legal and justified
strikes will a workman be entitled to wages while the case of Kelawala opined that a
workman is not entitled to wages during a strike irrespective of it being legal or illegal.
To solve this dichotomy, the Constitution Bench of the SC took up the case of Umesh
Nayak39. Here, the Bench distinguished the two sides to specifically point out
that Kelawala never addressed the issue of entitlement to wages during a justified strike
because it did not even address the issue of whether the strike in question (in the case) was
justified or not. It further distinguished the two sides by stressing on how the two cases
of Chitrakulam and Crompton Greaves were not cited in Kelawala which leads to the
conclusion that no apparent conflict arises between them - and hence, these two cases
shouldn't have been considered in Kelwala.

36
Supra, note 17.
37
Id, ¶11.
38
Id, ¶13.
39
Syndicate Bank v. K. Umesh Nayak, 1995 AIR 319
13
It clarified the stand in the two decisions of Churakulam and Greaves - that even if the strike
is legal but is unjustified, the workman would not be entitled to her wages; and if the strike is
illegal but justified, she would still not be entitled hence stressing on the need for a legal and
justified strike.
In facts pertaining to Umesh Nayak, the SC followed this same line of reasoning - it asked for
a legal and justified strike for the workman to demand for her wages (during the period of
strike). On the substantive question of whether a strike is legal or justified, the Supreme
Court categorized it to be questions of facts that can only be decided by the industrial
adjudicator based on the evidence she receives. But the Court did give its opinion on how to
identify legality and justifiability of a strike - a strike is legal if it is carried out in accordance
with the Industrial Disputes Act and a strike is justified based on examining factors which
pushed for the strike such as the nature of demands sought, its causes and urgency,
conditions of service, reasons for avoiding the mechanisms under the Act et al.

14
 CONCLUSIONS AND RECOMMENDATIONS

In conclusion it must be said that the rights of workers have not been upheld by the courts as
they should have.

First, the right to strike is a universally recognised right. Article 8 of the International

Covenant on Economic Social and Cultural Rights (ICESCR) recognises a right to strike.

India being a member of the Covenant is bound to provide such a right to its workmen. While
statutory provisions such as those contained in the ID Act or the Trade Unions Act provide
some recognition to the right, recent judicial decisions have a struck a hammer blow. The
earlier judgements such as Gujarat Steels40 were in consonance with the existence of the
right. However, the Supreme Court’s decision in T.K. Rangarajan41 has virtually negated the

existence of the right for employees. Therefore, with respect to the right to strike, it is

recommended that the decision in the Rangarajan case be considered. An enactmenet or

amendment to existing Acts in order to expressly recognise the right to strike would go a long
way in protecting the interests of workers. Given that the balance of power is in favour of the
Management, it is necessary to protect weapons such as strike which the worker may use to
have her demands heard and acted upon.

With respect to the principle of no work no pay, it is submitted that the judgement in the T.S.
Kelawala42 is erroneous in so far as it does not consider the decisions in Crompton Greaves43
and Churakulam Tea Estate44. Workers must be entitled to wages for strikes which are

justified and legal.45 Legality involves following the procedure laid down in various

provisions whereas justification requires the absence of perverse reasons. Both must be

ascertained on a case to case basis. Therefore, the decision of the Supreme Court in the

40
Supra, note 20.
41
Supra, note 11.
42
Supra, note 17.
43
Supra, note 33.
44
Supra, note 28.
45
Mohan M. Agashe v. MSEDCL & Anr., Writ Petition No. 7763 of 2013.
15
Syndicate Bank46 case is correct and holds the field as far as the principle of “no work no
pay” in considered.

46
Supra, note 39.
16
 BIBLIOGRAPHY
Books

Srikanta Mishra, LABOUR LAWS AND INDUSTRIAL RELATIONS: NEW HORIZONS, Deep and
Deep Publications, 1995.
C. Krishnamurthi, DIES NON (NO WORK NO PAY) IN BANKING INDUSTRY, Serial Publications,
01 Jan 2009.

Journal Articles

Anirudh Rastogi, Is there a right to strike, Combat Law, Volume 2, Issue 6 February-March
2004.
R. J. Kochar. Right to Strike: Has Supreme Court Moved Backward? Economic and Political
Weekly 25.29 (1990).

17