Why does the government feel its need?

In June the government announced corporatisation of the Ordnance Factory Board, under which the 41 factories ammunition and other equipment to the armed forces will become part of seven government owned corporate entities. The OFB was directly under the Department of Defence Production and worked as an arm of the government. The government has claimed that the move is aimed at improving the efficiency and accountability of these factories.

Announcing the decision on June 16, Defence Minister Rajnath Singh had assured that the interests of the OFB employees will be safeguarded. “I assure that the service conditions of the employees will not be affected by the move”.

The Bill mentioned that there is a threat, though, that the employees of these factories can go on a strike against the decision. “Against the said decision, the recognised federations of the employees gave a notice for an indefinite strike. The conciliation proceedings initiated by the Government at the level of Chief Labour Commissioner failed in the meeting held” on June 15.

In spite of the government’s assurance to take care of the conditions of service of the employees of the Ordnance Factory Board, the government mentioned in the Bill’s objectives, “the recognised federations of the employees have reiterated their intention to go on indefinite strike” from July 26.

For the same purposes, the government had promulgated the Essential Defence Services Ordinance on June 30. The Bill will replace that.

When Ordnance Factory Board was established in India?

Ordnance Factory Board predates all the other organisations like the Indian Army and the Indian Railways by over a century. The first Indian ordnance factory can trace its origins back to the year 1712 when the Dutch Ostend Company established a Gun Powder Factory in Ichhapur. In 1787, another gunpowder factory was established at Ichapore; it began production in 1791, and the site was later used as a rifle factory, beginning in 1904. In 1801, Gun Carriage Agency (now known as Gun & Shell Factory, Cossipore) was established at Cossipore, Calcutta, and production began on 18 March 1802. This is the oldest ordnance factory in India still in existence.

In May 2020, Prime Minister Narendra Modi's government announced that it will corporatize Ordnance Factory Board units. As part of Prime Minister's Self Reliant India Atma Nirbhar Bharat scheme, finance minister Nirmala Sitharaman on 16 May 2020 announced the decision to corporatize the OFB units.The move has not gone down well with the 80,000 plus work force of OFB units who have threatened an indefinite strike against the move.The Ministry of Defence formed a high level official committee, comprising officials from the department of defence production and Indian Army, to address the concerns of defence employees unions and OFB officers' association.

Ordnance Factory Board (OFB), consisting of the Indian Ordnance Factories, is an organisation, under the control of department of defence production (DDP), Ministry of Defence (MoD), Government of India. It is engaged in research, development, production, testing, marketing and logistics of a product range in the areas of air, land and sea systems. OFB comprises forty-one ordnance factories, nine training institutes, three regional marketing centres and four regional controllerates of safety, which are spread all across the country.[8][9] Every year, 18 March is celebrated as the Ordnance Factory Day in India.

OFB is the 37th-largest defence equipment manufacturer in the world, 2nd-largest in Asia, and the largest in India.OFB is the world's largest government-operated production organisation,and the oldest organisation in India. It has a total workforce of about 80,000. It is often called the "Fourth Arm of Defence",and the "Force Behind the Armed Forces" of India. Its total sales were at $3 billion (₹22389.22 crores) in the year 2020–'21.

Where Right to Strike is guaranteed under the Constitution?

Right to strike is recognized globally. Article 19(1) the Constitution of India guarantees the protection of certain freedoms as fundamental rights such as:

• Freedom of speech and expression.
• Assemble peaceably and without arms.
• Form associations or unions.
• Move freely throughout the territory of India.
• Reside and settle in any part of the territory of India.
• Practise any profession, or to carry on any occupation, trade or business.

However, strike is not expressly recognized in the Constitution of India. The Supreme Court settled the case of Kameshwar Prasad v. The State of Bihar 1958 by stating that strike is not a fundamental right. Government employees have no legal or moral rights to go on strikes.

India recognized strike as a statutory right under the Industrial Disputes Act, 1947.

Industrial Disputes Act 1947

It defines public utility service and strike, it also puts certain prohibitions on the right to strike. It provides that no person employed in public utility service shall go on strike in breach of contract:

• Without giving the employer notice of strike within six weeks before striking.
• Within fourteen days of giving such notice.
• Before the expiry of the date of strike specified in any such notice as aforesaid.

During the pendency of any conciliation proceedings before a conciliation officer and seven days after the conclusion of such proceedings.

It is to be noted that these provisions do not prohibit the workmen from going on strike but require them to fulfill the condition before going on strike. Further these provisions apply to a public utility service only.

Who will it affect?

It has a direct bearing on around 70,000 employees of the 41 ordnance factories around the country, who are unhappy with the corporatisation of OFB, fearing that it will impact their service and retirement conditions.

Singh had said that even the Cabinet note, through which the decision got the nod, also mentioned that there should be no change in the service condition of the around 70,000 employees of the OFB the defence minister had mentioned earlier.

The employee unions and associations had threatened to go on strike last year as well, when the government had declared that it will start the process towards OFB corporatisation.

If passed it will come into effect retrospectively from June 30, when the ordinance was promulgated.

How the features of the act affect the employees ?

Key features of the Ordinance include:

 Essential defence services: Essential defence services include any service in: (i) any establishment or undertaking dealing with production of goods or equipment required for defence related purposes, or (ii) any establishment of the armed forces or connected with them or defence.  These also include services that, if ceased, would affect the safety of the establishment engaged in such services or its employees.  In addition, the government may declare any service as an essential defence service if its cessation would affect the: (i) production of defence equipment or goods, (ii) operation or maintenance of industrial establishments or units engaged in such production, or (iii) repair or maintenance of products connected with defence.

Strikes: Under the Ordinance, strike is defined as cessation of work by a body of persons acting together.  It includes: (i) mass casual leave, (ii) coordinated refusal of any number of persons to continue to work or accept employment, (iii) refusal to work overtime, where such work is necessary for maintenance of essential defence services, and (iv) any other conduct which results in, or is likely to result in, disruption of work in essential defence services.

Prohibition on strikes, lock-outs, and lay-offs: Under the Ordinance, the central government may prohibit strikes, lock-outs, and lay-offs in units engaged in essential defence services.  The government may issue such order if necessary in the interest of: (i) sovereignty and integrity of India, (ii) security of any state, (iii) public order, (iv) public, (v) decency, or (vi) morality.  The prohibition order will remain in force for six months, and may be extended by six months.

Strikes and lock-outs that are declared after the issue of the prohibition order, or had commenced before the prohibition order was issued will be illegal.  The prohibition will not apply to lay-offs made due to power shortage or natural calamity, or lay-offs of temporary or casual workmen.

Punishment for illegal lock-outs and lay-offs: Employers violating the prohibition order through illegal lock-outs or lay-offs will be punished with up to one year imprisonment or Rs 10,000 fine, or both.

Punishment for illegal strikes: Persons commencing or participating in illegal strikes will be punished with up to one year imprisonment or Rs 10,000 fine, or both.  Persons instigating, inciting, or taking actions to continue illegal strikes, or knowingly supplying money for such purposes, will be punished with up to two years imprisonment or Rs 15,000 fine, or both.  Further, such an employee will be liable to disciplinary action including dismissal as per the terms and conditions of his service.  In such cases, the concerned authority is allowed to dismiss or remove the employee without any inquiry, if it is not reasonably practicable to hold such inquiry.

All offences punishable under the Ordinance will be cognisable and non-bailable.

Public utility service: The Ordinance amends the Industrial Disputes Act, 1947 to include essential defence services under public utility services.  Under the Act, in case of public utility services, a six-week notice must be given before: (i) persons employed in such services go on strike in breach of contract or (ii) employers carrying on such services do lock-outs.