Syndicate Bank v K. Umesh Nayak (1994)

This is the leading and final authority on wages for the strike period, and being a Constitution Bench it binds everything below it.

The rule is the double test: workmen are entitled to wages for a strike period only where the strike is both legal and justified. Legality and justification are entirely different enquiries, and neither answers the other.

The examiner's favourite trap follows. A strike may be legal but unjustified; a strike may be illegal but justified. Neither label decides the wages question by itself — the adjudicator must answer both halves. A candidate who writes "the strike was illegal, therefore no wages" has missed the case.

It also settles a conflict in the Court's own decisions, which is why five Judges heard it. Say so; it earns a mark.

The workmen of the bank went on strike. The employer treated the strike period as absence and withheld the wages for it. The workmen claimed those wages, and the claim reached the Supreme Court.

What an examiner is testing is not the facts but the reason the case went to a Constitution Bench: there were two inconsistent lines of authority.

Line one — wages payable if the strike was legal and justified. In Churakulam Tea Estate (P) Ltd v Workmen (Supreme Court, 1969) and Crompton Greaves Ltd v Workmen, AIR 1978 SC 1489, the Court held workmen entitled to wages for the strike period if the strike was both legal and justified. That was treated as settled industrial law.

Line two — "no work, no pay". In Bank of India v T.S. Kelawala (Supreme Court, 1990), a two-Judge Bench dealing with a token strike of part of a working day held the employer entitled to deduct wages for the period during which employees refused work although work was offered, whether the strike was legal or illegal, and in an appropriate case for the whole day. The reasoning was pure contract.

The two lines could not stand together. A later Bench doubted Kelawala, and the question went to a Constitution Bench of five Judges.

1. Are workmen entitled to wages for the period of a strike?
2. Does the answer turn on the strike being legal, on its being justified, or on both?
3. Is "no work, no pay" a complete answer to a strike-wages claim?
4. Who decides, and on what material?

For the workmen. The Industrial Disputes Act recognises and regulates the strike; it does not prohibit it. If workmen strike lawfully because the employer refused to redress a legitimate grievance, denying them wages makes the statutory right worthless and rewards the employer's own default. Churakulam Tea Estate and Crompton Greaves state the correct rule; Kelawala misapplies contract reasoning to a relationship industrial law has taken out of contract.

For the bank. Wages are the consideration for work. No work, no wages. Nothing in the Act displaces that — it nowhere provides that a striking workman shall be paid — and to pay wages for a strike is to make the employer finance the pressure applied against him.

The Constitution Bench reconciled the two lines and laid down the governing rule.

1. Legality and justifiability are distinct questions.

• Legality is a statutory question answered only by ss. 22, 23 and 24: was notice given in a public utility service, was the strike launched during conciliation or adjudication, was it in breach of a subsisting settlement or award? It is compliance, and it admits of a yes-or-no answer.
• Justifiability is a question of fact and industrial fairness — the merits of the demands, the conduct of both sides, whether the employer refused to negotiate, delayed, or provoked the stoppage. It has nothing to do with notice periods.

2. The two do not track each other. A strike may be legal and yet unjustified — every formality observed, but the demands absurd. A strike may be illegal and yet justified — notice omitted, but the workmen driven to it by the employer's own unfair labour practice. Neither label decides wages on its own.

3. The double test. Workmen are entitled to wages for the strike period only where the strike is both legal and justified. Correspondingly, where a lock-out is illegal or unjustified, wages are payable for the lock-out period.

4. The burden lies on the employer. A strike cannot be held unjustified unless the reasons for it are entirely perverse or unreasonable. The workmen need not prove their demands correct, only that they were not perverse.

5. Conduct during the strike counts. Where strikers resort to force, violence, sabotage or intimidation, wages are refused however good the underlying grievance.

6. Kelawala explained, not overruled. "No work, no pay" is sound as contract and applies to absence generally, but does not displace the industrial-law rule for strikes. An employer may deduct, but the entitlement is finally determined by the industrial adjudicator applying the double test.

7. The forum. The question is for an industrial adjudicator, on evidence. It cannot be disposed of summarily, and is not a matter for a computation proceeding under s. 33C(2), which presupposes an undisputed entitlement rather than deciding one.

Entitlement to wages for a strike period depends on the strike being both legal and justified. Legality is determined solely by ss. 22, 23 and 24 of the Industrial Disputes Act; justifiability is a separate question of fact for the industrial adjudicator, on which a strike is not to be held unjustified unless the reasons for it are entirely perverse or unreasonable. Neither limb alone determines the entitlement, and the same test applies mutatis mutandis to a lock-out.

The judgment's observations on the strike as a legitimate weapon of industrial pressure are background reasoning, not ratio; the burden formulation in point 4 is part of the operative rule and should be stated as such.

The starting point is that the Industrial Disputes Act says nothing about strike-period wages. It says when a strike is illegal (ss. 22 to 24) and what illegality attracts (ss. 25 to 27); about pay it is silent. The answer has to be worked out from the principles of industrial law.

Contract alone will not do it. If contract governed, the answer would be Kelawala's in every case — no work, no wages, whoever was at fault. But industrial law has deliberately displaced pure contract here: it recognises the strike as a legitimate instrument of collective pressure, and a right the law recognises cannot be made self-defeating. Equally, the strike cannot be cost-free, or it becomes a device rather than a last resort and the employer funds the pressure applied to him.

The double test resolves the tension by asking who is responsible for the stoppage.

• Legal and justified: the workmen used the machinery correctly and had real cause; the stoppage is the employer's doing. Wages payable.
• Legal but unjustified: the forms were observed but the cause was not real. The loss lies where it falls. No wages.
• Illegal: the workmen defied the statutory scheme, and the first limb fails whatever the merits. No wages — though justification may still reduce a dismissal to a lesser punishment.

That last point is where students go wrong. "Illegal but justified" does not produce wages. It produces a mitigating circumstance in disciplinary proceedings, where it matters greatly. Keep the two consequences apart.

The burden rule in point 4 is the practical heart of the case. Because a strike is unjustified only if its reasons are entirely perverse or unreasonable, the ordinary industrial dispute — a genuine demand pressed after negotiation failed — will be justified. So the legality limb does most of the work.

1. The double test is settled and is the standard formulation applied by Labour Courts, Tribunals and High Courts whenever strike wages are in issue.

2. It is confined to workmen under the Industrial Disputes Act. It does not help government servants governed by conduct rules forbidding strikes: T.K. Rangarajan v Government of Tamil Nadu (2003) 6 SCC 581 holds that such employees have no fundamental and no statutory right to strike, so the double test never starts.

3. It sits alongside Rohtas Industries Ltd v Rohtas Industries Staff Union, AIR 1976 SC 425. Rohtas denies the employer damages for an illegal strike; Umesh Nayak denies the strikers wages unless the double test is met. Between them: the workmen lose pay, the employer bears his own loss.

4. Discipline is a separate track. Participation in an illegal strike is misconduct, but under Indian General Navigation and Railway Co v Their Workmen (Supreme Court, 1960) mere participation does not justify blanket dismissal; the employer must charge-sheet and hold an enquiry. Loss of wages and dismissal are different consequences and must be argued separately.

The case survives the repeal in substance — but the first half of its test now runs on a much stricter statute, and that is the point to make.

The Industrial Disputes Act 1947 was repealed on 21 November 2025 by IR Code s. 104(1)(c). The Code, like the Act, says nothing about wages for a strike period; there is no successor provision, because there was never a provision to succeed. Umesh Nayak continues to fill the same gap in the same way — the entitlement is judge-made, and the double test is the rule.

What changes is the legality limb. Under the old Act, s. 22 required notice of a strike only in a public utility service; elsewhere a strike needed no notice at all and was controlled only by the general prohibitions in s. 23. That is why so many strikes were legal, and why justification carried most of the argument.

IR Code s. 62 universalises the notice requirement. It applies to every industrial establishment, and "public utility service" has gone from the statute book. Under s. 62(1) no person employed in an industrial establishment shall strike, in breach of contract, (a) without notice within sixty days before striking; (b) within fourteen days of that notice; (c) before the date specified in it; (d) during conciliation and seven days after; (e) during proceedings before a Tribunal or National Industrial Tribunal and sixty days after; (f) during arbitration and sixty days after, where a notification has issued under s. 42(5); or (g) while a settlement or award covering the matter is in operation. Section 63(1) makes contravention illegal.

The consequence is severe: a far larger proportion of strikes will now fail the legality limb, and once they do the wages claim is over however well justified the grievance. Under the Act legality was easy and justification did the work; under the Code legality is hard and usually decisive.

Two further changes bear on the claim. Section 2(zk) brings concerted casual leave by fifty per cent or more of the workers on a given day within "strike", so the mass casual leave device now attracts s. 62 and can cost the workers their wages. And the forum has changed: Government reference is gone, and under s. 53(6) a party applies directly to the Tribunal within ninety days of the conciliation officer's failure report; recovery is under s. 59, with s. 59(2) carrying forward the computation jurisdiction of s. 33C(2).

The justification limb is untouched — it was never statutory, so the repeal cannot affect it.

Under the Code. The case survives: the IR Code 2020, like the repealed Act, contains no provision on wages for a strike period, so the double test — legal and justified — remains the governing rule. What changes is the legality limb: s. 62 extends the strike-notice requirement (sixty / fourteen / seven / sixty days) to every industrial establishment, abolishing the "public utility service" category, and s. 63 makes contravention illegal — so many strikes that were legal under ID Act ss. 22–24 will now be illegal and the claim will fail at the first limb. Section 2(zk) additionally treats concerted casual leave by 50 per cent or more workers as a strike. Claims go to the Tribunal under s. 53(6) and are recovered under s. 59.