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  • Ekamjot Singh Bagga & Kusha Grover

‘Striking’ A Balance: “To Pay or Not to Pay” the Striking Workers?

Imagine you are a worker in a factory, who is tired of the exploitative working conditions characterised by low wages, long working hours and negligible social security benefits. Your Trade Union calls for a strike and you join it to demand for better pay. Later that day, you get to know that even your existing pay has been deducted because you absented yourself from duty. Does strike become a counterproductive endeavour in such a case? In this article, the authors aim to analyse the doctrine of ‘no-work no-pay’ and highlight the practical problems underlying this doctrine. Further, they recommend policy measures which may be adopted in order to solve the problems discussed.


The Doctrine of ‘No-Work No-Pay’

The doctrine of ‘no-work no-pay’ (also known as dies-non) is a well-recognised principle of labour and industrial relations. The idea behind the doctrine is simple: a worker is entitled to wages only for the time he has put in for work. By corollary, an employer cannot be expected to pay a worker for the time that the worker has not turned up for work. The doctrine is considered to be fundamental and uncontroversial in the usual course of happenings. However, problems arise when this fundamental doctrine of ‘no-work no-pay’ clashes with the right to strike.


The right to strike has been acknowledged as a part and parcel of labour and industrial law by the International Labour Organisation as a means of defending the social and economic interests of the workers. Under Indian law, the right to strike is a statutory right provided in the Industrial Disputes Act, 1947 (IDA). Section 2(q) of the IDA defines strike as a “cessation of work” in a display of “concerned refusal” to work or accept employment.


The Payment of Wages Act, 1936 (PWA), which regulates the payment of wages in India, lays down under Section 9, the deductions which may be made on account of absence from duty. It simply states that a person is liable to face deductions in wages in case he absents himself from work when he is required to work. The section also explains that a worker who is physically present but refuses to work on account of a stay-in strike is considered to be absent for the purposes of deductions from wages. In the absence of a special law with regard to the payment of wages during strikes, the general law of PWA, which is premised on the doctrine of ‘no-work no-pay’, applies.


The Case Law Conundrum

A series of judgements of the Supreme Court of India have affirmed this doctrine within the labour and industrial law jurisprudence. The question of whether the wages of workers could be deducted for the period of strike first came up in the case of Management of Churakulam Tea Estate v. Its Workmen and Anr. (1969). The dispute originated from the non-payment of bonuses, leading to a strike by about 27 workers after conciliation efforts failed. The management’s refusal to pay wages for the strike period was challenged, and the Industrial Tribunal deemed the strike legal and justified, ordering wage payment for the strike day. The court dismissed the argument that the strike was illegal for occurring during conciliation proceedings, noting it began after such efforts had failed. It also recognized the strike as a legitimate protest against the management’s and the Labour Minister’s conference’s dismissive attitudes. The court upheld the Tribunal’s decision, affirming workers' rights to wages during a justified and legal strike.


A similar line of reasoning was given in the Crompton Greaves Ltd. v. Its Workmen (1978). The court reiterated a fundamental legal principle: for workers to earn wages during a strike, the action must be both legal and justified. It emphasized that a strike should not be deemed unjustified unless its grounds are unreasonable or perverse. These cases collectively underscore that if a strike is lawful and justified, the ‘no-work, no-pay’ principle does not apply, thereby entitling workers to wages for the period of the strike.


The case of Bank of India v. TS Kelawala (1990) is a landmark judgement, as it signals an apparent reversal in the position of the court. In this case, the court stated that the legality or illegality of a strike is immaterial for the payment of wages. During the period of strike, the contract of employment persists but the workers withhold their labour. Therefore, they are not entitled to the payment of wages for that period of time. Prior to the landmark TS Kelawala Judgement, the justification of strike was a matter of consideration. Furthermore, the Constitution Bench in the Syndicate Bank and Ors. v. K. Umesh Nayak (1994), scrutinized the previously contradictory judgements and held that the law had already been settled and workers would be entitled to wages during legal and justified strikes.


Such is the case not only in India, but across most of the jurisdictions in the world. The Trade Disputes (Amendment) Decree, 1977 of Nigeria, under Section 32A, provides that a worker who takes part in a strike shall not be entitled to wages or other remuneration. Similarly, under the Fair Work Bill 2008 of Australia, while there are different provisions for protected and unprotected industrial action, giving or demanding strike pay for the period of the industrial action is largely unlawful. In the UK as well, employers are not obligated to pay the striking workers, and are allowed to deduct the amount that they would have earned during the strike.


The Problem

Every week, an instance of a strike in some part of the world forms the news headlines. Recently, Germany has faced strikes amongst its train as well as airport workers over the issues of pay and working hours. Finland is also seeing a series of strikes against the cuts in social security proposed by the current government. In Boston, teachers are on strike to demand for living wages and increased paid family leave time, among other issues. Here in India, the workers of Coal India Ltd had called for a one-day strike for employee salaries and other compliances. These instances bring us to the realisation that strikes are not merely an academic concept. Strikes have the potential to considerably impact the lives of the individuals involved.


It is an instrument in the hands of the workers to push for better pay and working conditions. Indeed, a powerful tool, it ensures that the workers are not subject to the whims and fancies of the employer and are able to assert their rights with an impact. Therefore, the right to strike is an indispensable right when it comes to labour and industrial relations. However, it is important to note that most of the workers highly depend on their wages for their day-to-day expenditures, like rent, food and other amenities. Thus, when workers lose their wages, they lose the basic means of making ends meet.


The fact that workers are deprived of remuneration during the period of the strike, an action albeit reasonable on the part of the employer, effectively makes strike an undesirable option for the workers to resort to. It is quite ironical that a provision of labour and industrial law which is supposed to empower the workers to assert their demands, actually leads to a loss of wages for workers. This necessitates a deliberation on the way to solve this problem, especially in light of the sheer number of strikes happening across the world.


The Existing Approach to The Issue in India

The real issue which needs to be dealt with is the lack of a settled law on this matter. As discussed, the Supreme Court has also given varied verdicts based on the facts and circumstances of the particular cases. While some judgements follow the doctrine of ‘no-work, no-pay’ strictly, others give consideration and importance to the justifiability and legality of the strike in question.


Governmental practice within India has also shown support for the principle of ‘no-work, no-pay’. In 2023, the Haryana government issued a circular, adopting the ‘no-work, no-pay’ principle for workers participating in strikes. In 2022, the Kerala government issued an order that “unauthorised absence of employees participating in the strike will be treated as dies-non” under Rule 14A of Part 1 of Kerala Service Rules.


Quite surprisingly, despite the irregularities surrounding the law on this issue, it has not been heavily discussed until now. Nonetheless, certain measures to tackle this conundrum do exist and can be implemented. ‘Strike funds’ are funds earmarked by Trade Unions for giving allowances to the workers during the period of the strike. Depending on the availability of funds and the constitution and bylaws of the Trade Union, these funds try to make up for the loss of wages of striking workers, by covering for their housing, food and other essential expenses. For instance, the United Auto Workers in the USA gives its workers a weekly strike assistance of $500. In Spain, the Worker’s Trade Union (Unión Sindical Obrera) established a Resistance and Solidarity Fund in order to provide financial assistance of workers in the event of strike.


In India, the Trade Unions Act, 1926 permits Trade Unions to maintain ‘general funds’ for the purposes lawfully applicable under the Act. Under the Section 15 of the Act, the Trade Unions can utilise these funds for providing strike pay or some form of financial assistance to their members. However, this approach is not devoid of issues. The efficacy of this measure is subject to the availability of funds with the Trade Unions in the first place. It allows the government to bypass its responsibility of the welfare of workers by putting the onus of their pay on the Trade Unions.


The American Approach

Some States in the USA have enacted legislations providing unemployment benefits to tackle this problem. In general, unemployment benefits are paid by the government to those workers who are willing and able to work but are not able to find work appropriate for their potential. These benefits are only meant to be temporary and aimed to help workers until they find employment. They are paid out of the tax pool levied on the employers. Typically, therefore, employees are not eligible for availing unemployment benefits. However, certain American States recognise that when it comes to the issue of wages, the problems of unemployed persons and striking workers are the same. These States have brought in legislations which make certain exceptions for striking workers with respect to unemployment benefits.


In 2018, New Jersey enacted a legislation which made striking workers eligible to collect unemployment benefits from the government. Further, in 2023, vide a new amendment, the State decreased the number of days for which the striking workers had to wait for collecting unemployment benefits from thirty to fourteen. New York, which has historically provided these kinds of unemployment benefits to striking workers, also reduced the time requirement to claim these benefits from seven weeks to two weeks in 2020. As recently as in February 2024, Washington House approved a legislation making striking workers eligible for unemployment benefits, and the same shall be presented before the Senate for approval. Similar laws are being discussed in several other States in the USA. This shows that growing consideration is being given to the plight of workers fighting for their rights while being denied the wages they were earning at the moment.


Way Forward

In India, two major laws govern unemployment benefits. Firstly, the Mahatma Gandhi National Rural Employment Guarantee Act, 2005 ensures 100 days’ work or equivalent pay per year to all the applicants. Secondly, the Rajiv Gandhi Shramik Kalyan Yojana under the Employees State Insurance Act, 1948 (ESIA) provides for an unemployment allowance of 50% of the wages for a maximum period of two years to an unemployed person who has been insured for at least two years under the ESIA. Both these legislations and the scheme thereunder provide for benefits to workers who have been rendered unemployed due to any reason whatsoever. No consideration has been given to the similar problems of striking workers. The practice in the USA suggests that innovative solutions can be formulated upon rethinking such laws and schemes providing unemployment benefits.


While introducing the labour codes in 2020, the Indian government had the golden chance to deal with this conundrum of payment of wages to striking workers. However, since the codes do not reflect any such change and this problem continue unattended, the government should now take this into account and carefully consider enacting a legislation like the ones discussed above. Such a legislation can solve the problem before us to a large extent. Statutorily providing financial assistance to striking workers would make their right to strike meaningful and efficacious, instead of it being merely nominal.


Conclusion

The problems with the existing approach of strike funds need to be resolved through action by the State in the form of a legislation. Certainly, such a legislation will not come without opposition, especially from employers. This is because, such legislation threatens to reduce the bargaining power of the employers by providing workers a social and financial security, no matter how long the strike lasts. This also runs the risk of disincentivising the workers to cooperate in negotiations and swiftly put an end to the strike. In the face of all these considerations, the lawmakers will have to institute safeguards within the legislation to prevent abuse by the workers, for instance, providing unemployment benefits to striking workers only for a definite number of weeks and making the conciliation mechanism under the IDA more effective so that issues in labour and industrial relations are resolved even before the situation calls for a strike.


There is no denying that the needs of the labour market in India and other jurisdictions are highly different. However, it certainly helps to learn from the practices of other countries facing similar problems and tailoring them to one’s own needs. Unemployment benefits legislations for striking workers are one of those practices which present an opportunity for India to pay heed to a problem that it has managed to neglect for ages. The need of the hour is to standardise the law on this issue so that discrepancies in judicial decisions and governmental practice do not exist the way they do today.

 

This article has been authored by Ekamjot Singh Bagga, Senior Editor and Kusha Grover, Associate Editor at RSRR. This blog is a part of the RSRR Editor’s Column Series.

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