Can a union be made to pay for losses from an illegal strike?

No. Compensation claims of this kind are outside the Industrial Disputes Act and unions have statutory immunity for acts in a trade dispute.

Is an employer’s compensation claim an industrial dispute?

No, unless the claim itself is part of the referred industrial dispute. Otherwise it is outside IDA mechanisms.

Did the arbitrators act within their powers?

No. They exceeded jurisdiction by awarding compensation, which the IDA does not cover.

Which provision protects unions here?

Section 18 of the Trade Unions Act gives unions immunity for acts in contemplation or furtherance of a trade dispute.

What did the Supreme Court finally decide?

It upheld the High Court, set aside the compensation direction, and dismissed the employer’s appeal.

Rohtas Industries v. Union

Quick Summary

Workers at Rohtas Industries went on an illegal strike. Arbitrators later asked workers to pay the company for losses. The courts said this was not allowed.

Main point: Compensation for strike losses is not an “industrial dispute” under the IDA unless it is part of the referred dispute.
Union immunity: Section 18 of the Trade Unions Act protects unions for acts in a trade dispute.

Issues

Can a trade union be held liable for damages from an illegal strike?
Are employer compensation claims covered by the Industrial Disputes Act, 1947?
Did the arbitrators exceed their jurisdiction by granting compensation?

Rules

Unions, as collective bodies, are protected by Section 18, Trade Unions Act for acts in a trade dispute.
Employer claims for compensation are not industrial disputes under the IDA, 1947, unless specifically part of the referred dispute.
Arbitration under IDA cannot award compensation outside the Act’s scope.

Facts (Timeline)

CASE_TITLE

Workers at Rohtas Industries went on strike without following the IDA process; Tribunal declared the strike illegal.
Both sides later signed a memorandum to settle the core issues; a Board of Arbitrators (incl. two retired judges) was appointed.
Arbitrators awarded compensation to management for strike losses.
The union challenged the compensation part; High Court quashed it for lack of jurisdiction.
Management appealed to the Supreme Court.

Arguments

Appellant (Management)

Illegal strike caused heavy loss; workers should compensate.
Arbitrators could grant such relief within the overall dispute.

Respondent (Union)

Compensation is outside IDA; not an industrial dispute.
Section 18 TUA gives immunity; arbitrators exceeded power.

Judgment

Held

No compensation under IDA: Such claims are not industrial disputes unless specifically referred.
Arbitrators exceeded jurisdiction: Compensation part of the award is invalid.
Union immunity: Section 18 TUA protects unions for acts tied to a trade dispute.
Appeal dismissed: High Court order upheld; no costs.

Judgment illustration for Rohtas Industries case

Ratio Decidendi

Employer claims for monetary loss from a strike are generally outside the IDA framework and cannot be granted by IDA arbitration. Union acts in pursuit of a trade dispute enjoy statutory immunity.

Why It Matters

Defines clear limits on compensation claims during strikes.
Protects collective action while keeping arbitration within the IDA.
Guides HR, unions, and tribunals on jurisdiction boundaries.

Key Takeaways

Union not liable to pay strike-loss compensation under IDA.
Arbitrators cannot award compensation beyond the Act.
Section 18 TUA shields unions in trade disputes.

Mnemonic + 3-Step Hook

Mnemonic: “I-D-A? N-O-P!” — IDA can’t award Compensation; Not an industrial dispute; Outside jurisdiction; Protected by TUA §18.

Ask: Is compensation part of the referred dispute?
Check: If not, IDA arbitration has no power.
Conclude: Union immunity applies; no damages.

IRAC Outline

Issue

Union liability for strike losses and IDA power to award compensation.

Rule

IDA covers industrial disputes; compensation not included unless referred; TUA §18 grants immunity.

Application

Compensation claim arose from illegal strike but was not part of the referred dispute; arbitrators overreached.

Conclusion

Compensation direction set aside; union not liable; appeal dismissed.

Glossary

Industrial Dispute: A conflict about employment terms, rights, or conditions recognized by the IDA.
Section 18, TUA: Gives unions immunity for acts done in contemplation/furtherance of a trade dispute.
Illegal Strike: Strike that breaches IDA procedures; still does not create automatic compensation liability under IDA.