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Lockout (Factory or Industry) l Definition of Lockout l Reasons - Procudure of lockouts

A lock-out declared in consequence of an illegal strike or a strike declared in consequence of an illegal

lock-out shall not be deemed to be illegal. Section 24 (3) of Industrial Disputes Act 1947

Lockout means temporary shutdown of the factory by the employer, but not winding up Industrial Relations
(permanent) of the factory. Lockout of the factory maybe happened due to the failure in the management
affected by internal disturbances or maybe by external disturbances. Internal disturbances maybe caused Industrial Relations
when the factory management goes in to financial crisis or got succumbed into financial debts, disputes Causes & Effects of Poor
between workers and workers, disputes between workers and management or may be caused by ill-
Industrial Relations
treatment of workers by the management. Sometimes factory lockouts may be caused by external
Approaches to Industrial
influences, such as unnecessary political parties involvement in management of workers union may be
provoked for unjustified demands that may be unaffordable by the management, which may ultimately Relations
lead to lockout of the factory. Factory lockout is procedural aspects governed by the labour legislation of Collective bargaining
that country. Lockout of the factory is a major issue, which affects workers as well as management and Principles of Collective
cannot be initiated for a simple reason.
Bargaining
Workers participation in Management
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. (The Constitution of India, Art 43A)

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Management Of Kairbetta ... vs Rajamanickam And Others on 24 March, 1960 Levels and Forms of Workers
Participation In Management
Supreme Court of India court observed as follows;
Employee welfare
"Just as a strike is a weapon available to the employees for enforcing their industrial demands, a Occupational health and safety
lockout is a weapon available to the employer to persuade by a coercive process the employees to Occupational healthy and
see his point of view and to accept his demands. In the struggle between capital and labour, the weapon safety (Indian context)
of strike Is available to labour and is often used by it, so is the weapon of lockout available to the
Industrial Disputes
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 Strikes
clearly brings out the antithesis between the two weapons and the limitations subject to which both of Lockouts
them must be exercised." Lay Offs / Laid off and Retrenchment
Labour Courts for disputes in India
When the lockout of the factory is illegal and justified, workers are not entitled to pay wages by the
management, as the principal of 'no work no pay'. The question of illegality or unjustified of lockout, Grievance procedure
mainly arises when it has been done without issuing notice in advance to the workers. Besides, there Methods of Identifying
must be justified reasons by the management to declare lockout of the factory, which ultimately affect Grievances
earnings of the workmen and also the management. Alternative Dispute Resolution
Arbitration & conciliation
Why the word 'lockout' ?
Lock made is not permanent that can be closed and opened. The word 'out' can be understood as USA
keeping temporarily away management and employees from the factory, till settlement of the issues
caused to lockout. Grievance Management

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.

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 September 2012.

Lockouts in INDIA
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.

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1/7/2019 Lockout (Factory or Industry) l Definition of Lockout l Reasons - Procudure of lockouts - What is Human Resource? (Defined) Human Resource Management Topics - Labour Laws - High Courts & Suprem…

A 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 by him.

According to Industrial Disputes Act 1947,Lockout [Sec. 2(1)]: Lockout 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 by him". Lockout is the antithesis of strike.

It is a weapon of the employer while strike is weapon in the hands of workers.

Just as the strike as a weapon in the hands of the workers for enforcing their demands, lockout is a
weapon available to the employer to make their employees to come to their way and to make accept
them to the management terms and conditions.
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 industrial disputes.

General Labour Unlon (Red Flag) ... vs B. V. Chavan And Ors on 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."

PROCEDURE OF LOCKOUTS
According to Sec. 22(2)

No person employed in a public utility service shall go on Lockout in breach of contract-

(a) without giving to the employer notice of Lockout, as hereinafter provided, within six weeks before lockout; or

(b) within fourteen days of giving such notice; or

(c) before the expiry of the date of lockout specified in any such notice as aforesaid; or

(d) during the pendency of any conciliation proceedings before a conciliation officer and seven days after the conclusion of such proceedings.

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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 weeks only.

Succinctly lockout of factory should be done only after the expiry of 14 days of prior notice given by the management.

Commentary
Subsection 2 is applicable to the workmen employed in public utility services and lays down that "no person employed in a public utility service shall go on
without following below said steps

1. Notice of lockout (with or without the date of lockout) to the employees by their employer is mandatory.
2. If the date of lockout by the employer is not mentioned in the notice, such notice is valid for six weeks only.
3. If the date of lockout is mentioned in the notice, the date of lockout should not be before the expiry of 14 days from the date of notice of strike
according to the clause (b).
4. Therefore employers should not go on lockout before the expiry of 14 days from the date of issue of notice of lockout to the employees.
5. Notice of lockout without the date of lockout is valid for six weeks only, if employer do not go on lockout within six weeks, a fresh notice of lockout by
employer is necessary, if employer wants to go on lockout.
6. Employers should not go on lockout during the pendency of any conciliation proceedings before a conciliation officer and seven days after the
conclusion of such proceedings.

General prohibition of strikes and lock- outs [Section 23] of The Industrial Disputes Act, 1947,
General prohibition of strikes and lock- outs.- No workman who is employed in any industrial establishment shall go on strike in breach of contract and
no employer of any such workman shall declare a lock- out--

(a) during the pendency of conciliation proceedings before a Board and seven days after the conclusion of such proceedings;
(b) during the pendency of proceedings before a Labour Court, Tribunal or National Tribunal] and two months after the conclusion of such
proceedings;
(bb) during the pendency of arbitration proceedings before an arbitrator and two months after the conclusion of such proceedings, where a
notification has been issued under sub- section (3A) of section 10A; or] [10A. Voluntary reference of disputes to arbitration]
(c) during any period in which a settlement or award is in operation, in respect of any of the matters covered by the settlement or award.

Prohibits an employer from declaring a lockout in any of the eventualities mentioned therein [Section 22(2) of the Industrial
Disputes Act 1947]

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No employer carrying on any public utility service shall lock-out any of his workman

(a) without giving them notice of lock-out as hereinafter provided, within six weeks before locking-out; or
(b) within fourteen days of giving such notice; or
(c) before the expiry of the date of lock-out specified in any such notice as aforesaid; or
(d) during the pendency of any conciliation proceedings before a conciliation officer and seven days after the conclusion of such proceedings.

legal strikes and Lockouts [Section 24 of ID Act 1947]

A strike or a lockout shall be illegal, if employers or worker who ever disobeys or fails to follow [Sec 22, 23, 10(3), 10-A (4-A)] for commencing strikes or
lockout, those strikes and lockout are said to illegal.

Section
22 Prohibition of strikes and Lockouts (Notice is mandatory in public utility services)
23 General prohibition of strikes and Lockouts (if said matter is pending before board, a Labour Court, Tribunal or national tribunal or arbitrator as
mention under Sec 10 & 10A or settlement or about is in operation)
10 Reference of disputes to Boards, courts or Tribunals
10A Voluntary reference of disputes to arbitration

(3) A lock-out declared in consequence of an illegal strike or a strike declared in consequence of an illegal lock-out shall not be deemed to be
illegal.

Penalty for illegal strikes and lock-outs. [Section 26] of the Industrial Dispute Act 1947.
Penalty for illegal strikes and lock-outs.- (1) Any workman who commences, continues or otherwise acts in furtherance of, a strike which is illegal under this
Act, shall be punishable with imprisonment for a term which may extend to one month, or with fine which may extend to fifty rupees, or with both.

(2) Any employer who commences, continues, or otherwise acts in furtherance of a lock-out which is illegal under this Act, shall be punishable with
imprisonment for a term which may extend to one month, or with fine which may extend to one thousand rupees, or with both.

THE REASONS BEHIND THE LOCKOUTS

Disputes or clashes in between workers and the management.
Unrest, disputes or clashes in between workers and workers.
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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 activities.
Failure in maintaining proper industrial relations, industrial peace and harmony.

Lockout of the factory is regarded as major issue which affects both management of the factory and their employees. Management should always monitor
employees behaviour and relationship between employees and relationship in between management and employees To avoid disputes which leads to
lockouts.

Facts [+]
18-july-2012, 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 shop floor. 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 Suzuki.

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

United States
In the United States, under federal labor law, an employer may hire only temporary replacements during
a lockout. In a strike, unless it is an unfair labor practice (ULP) strike, an employer may legally hire

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permanent replacements. Also, in many U.S. states, employees who are locked out are eligible to
receive unemployment benefits, but are not eligible for such benefits during a strike.

For the above reasons, many American employers have historically been reluctant to impose lockouts,
instead attempting to provoke a strike. However, as American unions have increasingly begun to resort
to slowdowns rather than strikes, lockouts have come "back in fashion" for many employers. Even as
incident of strikes are on the decline, incidents of lockouts are on the rise in the U.S.

Recent notable lockout incidents have been reported in professional sports, notably involving the
National Basketball Association in the 1995 offseason, the 1998–99 season and 2011 offseason, the
National Hockey League in the 1994–95 and 2004–05 seasons, and the National Football League in the
2011 offseason. In 2005, the NHL became the first major professional sports league in North America to
cancel an entire season due to a lockout.

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