When proceedings (conciliation, arbitration, or adjudication) are pending before any authority, the employer's power to change conditions of service is restricted. This "status quo" obligation prevents employers from unilaterally altering employment terms while a dispute is being resolved, which would prejudice workers and make the proceeding futile.
Legal Framework
| Provision | Subject | Rule |
|---|---|---|
| S.86(2) IRC 2020 (S.33 ID Act) | Restriction during pendency | Employer shall NOT alter conditions of service applicable to any worker to the worker's prejudice during pendency of proceedings |
| S.86(2) Proviso | Exception with approval | Employer MAY alter conditions / discharge/dismiss for misconduct IF prior approval of Tribunal/authority obtained |
| S.86(2) Explanation | "Applicable to" | Conditions include wages, hours, leave, seniority, promotion rules |
What is Prohibited
During pendency of ANY proceeding (conciliation, Tribunal, arbitration):
| Prohibited Action | Example |
|---|---|
| Altering conditions of service to worker's prejudice | Reducing wages, increasing hours, withdrawing benefits |
| Discharging or dismissing worker | Termination for any reason during pendency |
| Punishing worker for misconduct | Without prior approval of authority |
| Changing established practices | Withdrawing transport facility, canteen, shift allowance |
What is Permitted
| Permitted Action | Condition |
|---|---|
| Altering conditions NOT connected with dispute | If unrelated to pending dispute |
| Discharge/dismissal for misconduct | With PRIOR APPROVAL of Tribunal/authority |
| Changes beneficial to workers | Improvements are never "prejudicial" |
| Normal administrative actions | Routine transfers, promotions per policy |
| Implementing existing rules | Actions per Standing Orders already in force |
Why: The prohibition protects the integrity of the proceeding. If an employer could freely fire union leaders while a dispute is pending, the very workers who raised the dispute would be eliminated. The status quo obligation ensures that the dispute is resolved on its merits, not through employer's unilateral power.
The Approval Mechanism
If the employer needs to dismiss/discharge a worker for misconduct DURING pendency:
| Step | Requirement |
|---|---|
| 1 | Conduct domestic inquiry (establish misconduct) |
| 2 | Apply to the authority (Tribunal/Conciliation Officer) for approval |
| 3 | Authority examines: |
-
(a) prima facie case of misconduct
-
(b) whether dismissal is victimization disguised as discipline |
| 4 | If approved: employer can proceed with dismissal | | 5 | If refused: worker must be continued in service |
Why: This is NOT a full hearing on misconduct. The authority checks whether the employer has a prima facie case and whether the action is genuinely disciplinary (not retaliation against the worker for raising the dispute). It is a safeguard against disguised victimization.
"Connected With the Dispute" Limitation
The prohibition applies to conditions "applicable to any workman concerned in such dispute." Courts have interpreted this broadly:
| Connected (prohibition applies) | Not Connected (prohibition does not apply) |
|---|---|
| Dispute about wages; employer reduces bonus | Dispute about canteen; employer transfers worker to another shift (transfer unrelated) |
| Dispute about reinstatement; employer dismisses another union member | Routine promotion of unconnected worker |
| Dispute about working conditions; employer withdraws safety equipment | Restructuring of department not involved in dispute |
Illustrations
-
Classic violation: Workers file a charter of demands before the Conciliation Officer demanding a 15% bonus. During conciliation (proceedings pending), management issues a circular: "With immediate effect, the existing 10% attendance incentive is discontinued." This is ALTERATION of conditions of service (withdrawal of attendance incentive) TO WORKERS' PREJUDICE during pendency. Violation of S.86(2). Workers can seek restoration through the authority.
-
Dismissal during pendency (with approval): Worker Sunil, during a pending wage dispute before the Tribunal, is caught stealing factory material (Rs.50,000 worth). Management wants to dismiss him. They CANNOT dismiss without Tribunal approval (proceedings pending). They apply to the Tribunal: "Sunil committed theft; here is CCTV evidence, witness statements, domestic inquiry report." Tribunal is satisfied there is prima facie misconduct unconnected with the dispute. Approval granted. Sunil can be dismissed.
-
Dismissal during pendency (victimization): Union President Meera files a dispute regarding unsafe conditions. Two weeks later, management claims "Meera was late 3 times this month" and applies to Tribunal for permission to dismiss her. Tribunal examines: lateness of 15-30 minutes on 3 occasions is disproportionate to dismissal; no other worker has been dismissed for similar lapses; Meera is union President who filed the very dispute that is pending. Approval REFUSED this is victimization disguised as discipline.
-
Beneficial change (permitted): During a pending bonus dispute, the employer announces a new medical insurance policy covering all workers at company expense. This IMPROVES conditions and is not "to the worker's prejudice." It is permitted without any approval, even during pendency.
Recall Check
- What is the employer prohibited from doing during pendency of proceedings under S.86(2)?
- Under what condition can an employer dismiss a worker for misconduct during pendency?
- What is the test to determine whether a dismissal during pendency is genuine discipline or victimization?
Key Cases
Jaipur Zila Sahakari Bhoomi Vikas Bank v. Ram Gopal (2002) Jaipur-Zila-Sahakari-Bhoomi-Vikas-Bank-v-Ram-Gopal-2002 Issue: Whether an employer can alter conditions of service during pendency of proceedings if the alteration benefits the worker. Rule: The prohibition under S.33 (now S.86(2)) applies only to changes "to the prejudice" of workers; changes that are beneficial to workers are not prohibited during pendency. Held: Improvement in conditions during pendency is not a violation; the statute targets prejudicial changes, not all changes.
Distinctions
| Aspect | During Pendency (S.86(2)) | Normal Period (No Proceedings) |
|---|---|---|
| Employer's power | Restricted cannot alter to prejudice | Full management prerogative (subject to other laws) |
| Dismissal for misconduct | Requires prior approval of authority | Employer can dismiss after domestic inquiry |
| Beneficial changes | Permitted without restriction | Permitted |
| Rationale | Protect integrity of proceedings; prevent victimization | Normal industrial relations |
| Consequence of violation | Action void; worker deemed in service; employer may face penalty | N/A |
Flashcards
Q: What does S.86(2) IRC 2020 prohibit during pendency of proceedings? A: Alteration of conditions of service applicable to workers to their prejudice, and discharge/dismissal without prior approval of the authority before which proceedings are pending.
Q: Can an employer dismiss a worker for misconduct during pendency of proceedings? A: Yes, but ONLY with prior approval of the Tribunal/authority. The authority must be satisfied of prima facie misconduct and that the action is not victimization.
Q: Are beneficial changes to workers' conditions prohibited during pendency? A: No. Only changes "to the prejudice" of workers are prohibited. Improvements are always permitted.
Q: What is the consequence of violating S.86(2)? A: The alteration/dismissal is void. The worker is deemed to have continued in service without interruption.
Q: What is the authority checking when an employer applies for permission to dismiss during pendency? A:
-
(1) Prima facie case of misconduct exists
-
(2) The action is genuine discipline, not retaliation/victimization for raising the dispute.
Exam Scenario
A dispute regarding non-payment of overtime wages is pending before the Industrial Tribunal. During this period, the employer:
-
(a) discontinues the existing transport facility (bus service) for night-shift workers
-
(b) dismisses Worker X for habitual absence (12 consecutive days without leave) after conducting a domestic inquiry
-
(c) promotes Worker Y (not involved in the dispute) to the post of supervisor.
Advise on the legality of each action under S.86(2) IRC 2020.