An Insight into the Excesses of the Essential Defence Services Act, 2021

Namrata Jeph & Vrinda Nargas

Introduction

On June 15, 2021, the Government of India via an Office Memorandum approved the consolidation of the existing 41 units of the Ordnance Factory Board (“the OFB”) into 7 units of Defence Public Sector Undertaking. As an immediate fallout to this decision, the OFB Employees’ Federations and Associations, to show their opposition, intimated via letter dated June 29, 2021 that they would commence an indefinite strike from August 26, 2021. Presumably as a response to this, on June 30, 2021, the Government issued the Essential Defence Services Ordinance, 2021 which was subsequently replaced by the Essential Defence Services Act, 2021 (“the EDS Act”)  on August 11, 2021 . Under the EDS Act, the government is empowered to prohibit strikes, lock-outs and lay-offs in any factory or establishment connected with the essential defence services. In addition, the EDS Act provides for punishment in terms of both fine and imprisonment for any person who engages in the above-mentioned activities or even if they are found to be instigating or financially supporting any such activity.

In this article, we shall analyse the justifiability of the EDS Act from a labour law perspective. We shall first lay out the international and the national legal position on the issue of the right to strike and other associated rights of the employer, and to what extent these can be restricted in the context of essential defence services. We shall also identify if the approach undertaken by the government is the “list approach” or the “consequences approach” and analyse the implications of the same. Next, we shall analyse the implications of the various provisions of the EDS Act and comment on its overarching ambit. The EDS Act has the potential of being detrimental to many employers and employees, and those in the public sector and the private sector alike.

The Constitutional design of Right to Strike and Lock-out/lay-off

In most cases, a strike is a tool used by the workers to promote their social or economic interests.[i] The Constitution of India, under Article 19, recognizes the right to assemble and form associations or unions as a fundamental right. The right to strike can be understood as a derivative right of the freedom of association[ii] and is an intrinsic corollary of the right to organise.

However, in All India Bank Employees Association v. National Industrial Tribunal and Kameshwar Prasad v. State of Bihar, the Supreme Court of India  held that there is no fundamental right to strike under Article 19 of the Constitution. In Ahmedabad Textile Research Association v. Atira Employees Union, 1992the Supreme Court explicitly stated that “any concerted movement by workmen to achieve their objectives is certainly permissible even inside the industrial establishment within the working hours, so long it does not prove to be unlawful, tortuous or violent”, and the same was reiterated in Vidya Sagar Institute of Mental Health and Neuro Services v. Vidya Sagar Hospital Employees Union.

The legalityof a strike is dependent on its conformity with Sections 22, 23 and 24 of the Industrial Disputes Act, 1947. InCrompton Greaves Ltd. v. Its Workmen, the Court held that strike cannot be said to be unjustified unless the reasons for it are entirely perverse or unreasonable. In the case of Syndicate Bank v. K. Umesh Nayak, justifiability of a strike was assessed upon several factors such as the service conditions of the workmen,  nature of demands of the workmen, the cause that led to the strike,  urgency of the cause or demands of the workmen, reasons for not resorting to the dispute resolving machinery provided by the Act, carried out in orderly and peaceful manner etc. Therefore, an unjustified strike is one where workmen have raised unreasonable demands, have not given reasonable time to the employer to discuss and have shown objectionable behaviour leading to violence etc. For instance, in Management of Chandramalai Estate, Ernakulam v. Its Workmen, the court stated that a strike is not justifiable where the dispute has been going on for years, since no urgency is involved.

When it comes to the prohibition of strike action in essential services, one of which is defence services, it is crucial that workers’ legitimate right to strike is not unreasonably hampered. Admittedly, the right to strike is not absolute. It is indeed permissible to restrict the right to strike in case of essential services. However, these restrictions must be reasonable and must strike the right balance between the consequences for individual citizens engaged in the industry in the capacity of employer and employee and the beneficial effect that the legislation is expected to accrue to the general public, as noted by the Supreme Court in Narendra Kumar v. The Union of India. This balancing exercise is crucial because the greater the restriction, the more the need for strict scrutiny by the Court. With regard to restriction on measures such as lock-outs and lay-offs, it must be considered that there may be situations wherein the employer faces financial hardship or legal obstacles and finds it impossible to carry on the business any longer. In such cases, the employer is bound to offer compensatory guarantees to his employees, but he cannot be pushed to extremes and cannot be forced to continue his business when it is clearly unviable to do so, which was emphasised by the Apex Court in Excel Wear v. Union of India.

List and Consequence Approach Analysis

Restrictions on strikes/lock-outs/lay-offs can be imposed by either adopting a list approach or a consequences approach.[iii] The ‘list approach’ is one in which the employers or employees to whom the prohibition will extend are identified in the legislation itself. On the other hand, in the ‘consequences approach’, instead of the identity of the employer or the employee, the potential consequences of the industrial action are accounted for.[iv] The EDS Act can be understood as a hybrid of the list and the consequences approach. While the legislature enlists establishments engaged in the production of goods or equipment, or connected with armed forces and defence, or engaged in repair and maintenance of defence equipment as part of the establishments on which the EDS Act will be applicable, it still leaves a wide scope for any other establishments to be included within its ambit, if their cessation of work is prejudicial to production, supply and/or maintenance of defence goods and services. The power of such inclusion is in the hands of the Central Government, which may, by notification, declare industries to be essential defence services, and thus prohibit strike action.

The implications of this hybrid version are far more disastrous as on the one hand it takes a rigid, radical, or extreme stance and puts an absolute bar on the right to strike, lay-off, and lock-out on employees and employers engaged in businesses even remotely connected with the essential defence services, while at the same time, it is vague and does not identify the entities upon which such an absolute restriction will be applied. Further, it is also unclear as to what actions or activities of workers and at what stage of such actions would prejudicially affect essential defence services and thus lead to notification as an essential defence service.

Detrimental Effect on the Right to Strike

Section 2(1)(b) of the EDS Act defines a strike as including not only the cessation of work but also actions such as a sympathetic strike, token strike, go-slow, sit down, stay-in and even mass casual leave. It also places a prohibition on workers regarding refusal  to work overtime when necessary, or engaging in any conduct which might result in disruption of work in the essential defence services.

It is clear that the EDS Act is intended to be made applicable in a wide sense, as herein, a “strike” not only connotes cessation of work but also various other legitimate modes of a strike as well. This all-encompassing definition has the potential to be grossly misused, severely curtailing the legitimate right to strike of those engaged in essential defence services.

The right to strike is an important means for the workers to give effect to the principle of collective bargaining, and is an essential right even in the context of military services or essential defence services.[v] It must be understood that the right to strike is availed only when other measures to bargain collectively fail – as a ‘last resort’.

The Overreach of the EDS Act

It is pertinent to note that the EDS Act does not distinguish between public employees and private employees in essential defence services. In Section 2(1)(a), the legislature has used the terms “any service” and “any establishment or undertaking”. This potentially extends the scope of applicability of the EDS Act to cover both public and private entities which are even remotely connected with the defence services, thereby curtailing the rights of workers in these establishments.

Additionally, the broad scope of the EDS Act is evidenced by the scale of industries it will affect; those engaged in manufacturing and supplying uniforms, boots, helmets, etc. will be equally affected by the legislation as those which manufacture heavy defence equipment such as tanks, artillery, ammunition, etc. Further, the provisions of the EDS Act do not reflect a bargain of power between the employer and the employee and are rather likely to be detrimental for both. Apart from unreasonably barring workers’ right to strike, the EDS Act also lays down that the central government, by way of general or special order, can restrict employers engaged in essential defence services from laying off workers. Departure from this provision has been permitted only in the limited circumstances of any natural calamity or shortage of power. These restrictions are unreasonable and are extremely limited in nature, and do not account for any other legitimate socio-economic factors.

On examination of the procedural aspects of the EDS Act, conducting an inquiry has not been made mandatory prior to the dismissal of employees from service. This is in clear violation of principles of natural justice as it deprives the employees of a fair inquiry procedure and denies them their right to be heard. Further, the EDS Act also clothes the police with wide powers. The police are empowered to arrest any person without a warrant, on mere suspicion of having committed any offence under the EDS Act. This leaves the possibility of the provisions being rampantly misused. There are not enough safeguards in the EDS Act against the unfettered powers of the police and the government.

Conclusion

It is understood that the right to strike and lay-off/lock-out of the employee and the employer respectively are not absolute rights and do not exist in a vacuum. While it may be in the interest of the public at large to prohibit strikes, lock-outs and lay-off which are politically motivated or carried out with a mala fide intention, however, it is pertinent that in case of strikes conducted with the objective to secure legitimate socio-economic interests, they are identified as such and not unreasonably fettered. Therefore, it must be ensured that requisite safeguards such as proper dispute resolution processes involving conciliation, mediation or arbitration are included. All the parties involved must be able to participate in the dispute resolution process equally and should have a fair opportunity to arrive at a resolution. Notwithstanding the stated objective of EDS Act, i.e.., securing national security, a legislation that has far-reaching implications as the EDS Act should have been drafted in the strictest and clearest of terms. Although concerns over national security are relevant for India, especially in light of its hostile neighbourhood and volatile security environment, these considerations must be adequately balanced with the protection of individual interests. While it is essential to maintain smooth functioning in essential defence services, this cannot be done at the cost of workers’ legitimate rights.

Both authors are students at the National Law University, Jodhpur

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[i] Jeremy S. Vogt, The Right to Strike and the ILO, 27(1) King’s Law Journal 110 (2016)

[ii] The Right to Strike and the ILO: The Legal Foundations, International Trade Union Confederation 15 (2014).

[iii] O.V.C. Okene, International Law and the Prohibition of the Right to Strike in Essential Services in Nigerian Labour Law: Some Reflections, Nigeria Journal of Labour Law and Industrial Relations 20 (2009).

[iv] Id.

[v] Tonia Novitz, The Restricted Freedom to Strike: Far-Reaching ILO Jurisprudence on the Public Sector and Essential Services, 38 Comp. Lab. L. & Pol’y J. 353 (2017).