Unit 4 - Instruments of Economic Coercion | Retrenchment, Transfer, Closure, Gherao & Bandh, Strike

Welcome to your quick revision for SEM 3 LLB Labour Law I - Unit IV! Below are your comprehensive exam notes covering all major concepts, from strikes to retrenchment and disciplinary procedures.
📚 QUICK EXAM NOTES: Instruments of Economic Coercion
1. Concepts of Coercion Coercion involves forcing someone to do something through pressure
.
Strike: A collective stoppage of work by employees, which is legal if proper procedures are followed
. Types of strikes include Stay-in / Pen-down (coming to the workplace but refusing to work), Go-Slow (deliberately working at a slow pace), Sympathetic Strike, and Hunger Strike
.
Lock-Out: The temporary closing of a place of employment by the boss
.
Gherao & Bandh (Both Illegal): Gherao is the physical blockade of managers (considered wrongful confinement), while a Bandh is a total shutdown call that violates the fundamental rights of others
.
2. Legalities and Prohibitions
No Fundamental Right: There is no fundamental right to strike in India; it is strictly a statutory right
.
Illegal Strikes: A strike or lock-out is illegal if it happens in a Public Utility Service (like health, water, or electricity) without a 14 days' notice, or if it starts within 6 weeks of giving that notice
. It is also illegal if started while proceedings are pending before a Conciliation Officer or Tribunal
.
Wages: For justified strikes, workers may be entitled to wages. However, for illegal strikes, the strict rule of "No work, No pay" applies
.
3. Retrenchment, Transfer, and Closure When a business shrinks or closes, the law ensures workers get a "soft landing" through compensation
.
The Compensation Formula: For retrenchment, transfer, or closure, workers with 1 year of continuous service are entitled to 15 days' average pay for every year of service
.
Retrenchment Procedure: Employers must provide a 1-month written notice (or pay in lieu), pay compensation at the time of retrenchment, and strictly follow the "Last-Come-First-Go" rule, meaning the most junior person is fired first
. If hiring resumes, retrenched workers have first priority
.
4. Disciplinary Action & Domestic Enquiry Management has the prerogative to discipline workers but must follow Natural Justice through an internal trial called a "Domestic Enquiry"
.
Steps for Enquiry: It must include a Charge-sheet detailing the exact wrongdoing, a chance for the worker to provide an Explanation, presentation of Evidence (where the worker can cross-examine witnesses), and strict Impartiality by the person conducting the inquiry
.
🌟 EXAM GOLDEN KEY: "A strike is a weapon of last resort; its legality depends on the 'procedure' and its justification depends on the 'cause'." Use this to score extra marks when distinguishing between the legality of a strike and its moral or economic justification!

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