ISSN: 2347-3215 Volume 2 Number 8 (August-2014) pp.

328-344
www.ijcrar.com

A critical analysis on efficacy of mechanism to industrial disputes resolution

in India

M.J.Arputharaj* and R. Gayatri

Department of Management Studies, St. Peter s University, Chennai - 600054

*Corresponding author

KEYWORDS A B S T R A C T

Industrial Relations, The problem of industrial dispute is common to almost all the developed and
Industrial Disputes, developing countries of the world. Industrialization has tended to create a
Labour Law, ILO, ID hiatus between management and workers, owing to the absence of workers
Act, Industrial ownership over means of production this gap has led to industrial friction and
Tribunal, Disputes conflicts, which ultimately cause industrial disputes. Conflict resolution is an
Resolution, Industrial essential part of any well-functioning labour market and industrial relations
tribunal, Collective system. This article highlights the legal and practical aspects of industrial
Bargaining, dispute resolution in India. Presence of a powerful collective bargaining
Conciliation, machinery and proactive communication between the management and the
Labour Court unions not only minimizes the grievances but also promotes healthy industrial
relations.
Introduction

The Law Relating to industrial disputes, in and other kinds of judicial action), there are
this country, is known as industrial law. essentially three options: conciliation,
Industrial disputes are disputes relating to an mediation and arbitration. The need to
industry . But the question, what is resolve the labour disputes efficiently,
industry ? is the badger in the bag of effectively and equitably for the benefit of
industrial law. Its definition uses the most all the parties involved and the economy at
elastic and over-lapping terms as its large.
constituents. Generally, employment
disputes are divided into two categories: International Labour Standards
individual and collective disputes. (Conventions and Recommendations)
Collective disputes can further be divided
into two sub-categories: rights disputes and The main ILO instrument dealing with
interests disputes. dispute prevention and settlement is the
Voluntary Conciliation and Arbitration
With respect to resolving these different Recommendation, 1951 (No. 92). It
types of disputes (leaving aside litigation recommends that voluntary conciliation
should be made available to assist in the

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prevention and settlement of industrial and delay in payment of wages. In this
disputes between employers and workers. It connection on the request of the Bombay
also recommends that parties should refrain Government, the Government of India
from strikes or lockouts while conciliation enacted the Employers and Workmen s
or arbitration procedures are in progress, (Disputes) Act, 1860.
without limiting the right to strike.
The Trade Disputes Act, 1929 was codified
Dispute resolution is further addressed under for five years as an experimental measure.
the Collective Bargaining Convention, 1981 The Act was amended in 1932 and was
(No. 154), which provides that bodies and made permanent by the Trade Disputes
procedures for the settlement of labour (Extending) Act, 1934. Since 1937 the scope
disputes. One objective of dispute resolution of trade disputes legislation was
is in fact to promote the mutual resolution of considerably extended both at the Centre
differences between workers and employers and in a number of provinces, and
and, consequently, to promote collective substantial progress was made building up
bargaining and the practice of bipartite permanent machinery for the speedy and
negotiation. Also, 1967 (No. 130) addresses amicable settlement of industrial disputes.
dispute resolution at the enterprise level, The Trade Disputes Amendment Act of
including rights disputes over alleged 1938 provided for the appointment of
violations of collective agreements. conciliation officers charged with the duty
of mediating in or promoting the settlement
Origin and History of Industrial Disputes of trade disputes. The Act also included
Resolution Mechanism water transport and tramways under Public
Utility Services and made the provisions
The legislative history of industrial disputes concerning illegal strikes and lock-outs less
can be traced from the year 1890. The restrictive.
earliest legislation in India was Bengal
Regulation VII of 1819. Under this The Second World War brought about rapid
legislation the breach of contract treated as changes in the whole economic structure and
criminal offence and this was also followed also in the field of industrial relations. In
by Merchant Shipping Act (I of 1859) and May, 1942 another notification was issued,
the Workmen s Breach of Contract Act, vesting much the same powers in the
1860. However, the development and Provincial Governments, and in August
growth of central legislative measures to Essential Services Maintenance Ordinance
govern industrial legislation in India can be was promulgated prohibiting strikes and
examined and studied from employers and lock-outs without 14 days previous notice.
Workmen s Disputes Act, 1860 to the
present Industrial Dispute Act, 1947 which Dispute Resolution in the Indian Context
is being followed now.
In the Indian context, since disputes are
There were violent disturbances and resolved under the ID Act, the emergence of
conflicts and death of one of the contractors the non-union firms would have no effect on
took place in the year 1859 consequent to the dispute resolution framework of
disputes or differences between European conciliation, arbitration and adjudication in
Railway Contractors and their workmen in some specific cases. Under section 2A of the
Bombay Presidency relating to the failure ID Act, where any dispute or difference

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between that workman and his employer of management to take unilateral decisions
connected with, or arising out of, such and low intention to quit.
discharge, dismissal, retrenchment or
termination shall be deemed to be an The objects of the Industrial Disputes
industrial dispute notwithstanding that no Resolution Mechanism are given below:
other workman nor any union of workmen is
a party to the dispute . This study attempts to examine some vital
dimensions of the industrial disputes:
In fact the fairness perceptions may stem
from all three kinds of justice that constitute 1. To examine the types of industrial
organizational justice; distributive justice disputes in India;
which focuses on the fairness of distribution 2. To analyse the dominating causes of
of outcomes, procedural justice, which is Industrial disputes;
concerned about the fairness of the 3. To provide for prevention of industrial
processes by which outcomes are disputes through works committees;
distributed, and interactional justice that 4. To provide for investigating the
deals with the fairness of interpersonal industrial disputes through Court of
interactions and communications. Moreover, Inquiry;
despite the presence of several industrial 5. To provide for the settlement of
acts, the grievance procedures do not receive industrial disputes through a three tier
much attention due to complexities arising system of Labour Courts, Industrial
out of inarticulate treatment and lack of Tribunals and National Tribunals;
understanding of issues in bargaining, joint 6. To study the management attitude
consultation, and grievance redressal by all towards labour To impose prohibition on
the actors in the industrial relations system. commencement or continuation of strike
Unions protect workers directly from and lock out during specified period;
arbitrary discipline while providing 7. To provide for payment of compensation
management with a means of managing the in case of lay off, Retrenchment and
work force that does not call on the use of Closure;
overt sanctions since industrial action 8. To define and prohibit the unfair labour
performed an additional voice function. practices.
9. Offering suggestions and implications
Based on the preceding discussion it appears for improvement.
that union density, employees prolificacy to
raise disputes, managements propensity to Causes Consequences and Settlement of
make decisions unilaterally and employee Industrial Disputes
attitudes such as intention to quit would be
interlinked with both direct and indirect Industrial Disputes Act provides for
effects. It is therefore likely that union machinery for just and equitable settlement
density would have direct effects on of Industrial disputes by adjudication,
employees prolificacy to raise disputes, negotiation and conciliation. It promotes
management s propensity to take unilateral measures for securing and preserving amity
decisions and employee s intention to quit and good relations between employer and
such that a high union density would be workmen. It helps prevention of illegal
associated with high prolificacy on part of strikes and lockouts, and provides provision
employees to raise disputes, low propensity for relief to workmen in the case of layoff

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and retrenchment. It promotes a base or and problems of conflict within the groups
collective bargaining also. may not be taken into account.

Causes of Industrial Disputes (3)Lack of communication on one hand,

between the workers and management may
The problem of industrial unrest is inherent turn petty quarrels into industrial unrest and
in the industrial system. The main features on the other; the problem of discipline in
of industrial work anywhere are that (a) it industrial units may assume serious
involves division of labour; (b) it is a group dimensions. The other managerial factors
activity; (c) it is carried under control. responsible for industrial unrest have been
Broadly speaking, the causes of industrial as
disputes can be classified as: 1) Economic
causes; 2. Management causes; 3. Political 1. Mental inertia on the part of management
causes; a brief description of each is given and labour.
below: 2. Management's general attitude of hatred
towards their workers,
1. Economic causes 3. Lack of competence on the supervisor and
other managers in human relations.
Economic causes include questions 4. Management's desire to pay comparatively
pertaining to wages, bonus and allowances, lesser amount of bonus or dearness
retrenchment of workmen by the employer allowance against the desire of
retionalisation and automation, faulty workmen.
retrenchment system, leave and so on. Low 5. Efforts to introduce modernization without
wages, irrespective of rising prices, demand prior or appropriate environment.
for a rise in D.A., intolerable working and 6. Excessive work load and inadequate
living conditions, issues pertaining to hours welfare facilities.
of work, etc. are some other economic 7. Defective policy of lay-off.
causes that provoked a number of strikes in 8. Denial of the workers right to recognize
India. The worker factors responsible for union.
industrial unrest have been: (1) Inter union 9.Unfair practices like victimization or
rivalries, (2) Economic and political termination of services without assigning
environment that exercise adverse effects on any reasons.
workers attitudes, and (3) Indiscipline 10. Lack of definite wage policy and
amongst workers. stabilization of prices.
11. Lack of a proper policy of union
2. Managerial causes recognition.
12. Denial of worker's right to organise, etc.
Some of the causes of discontent are
inherent in the industrial system, itself such 3. Political causes
as:
(1) Workers do not get any opportunity for Industrial disputes are pertly political also.
self-expression; or Some important political strikes I organized
(2) Their social needs are not fulfilled; that by industrial workers in India. Prior to
is. the position of workers within in informal independence, as early , there was a mass
groups formed in industrial undertakings strike in Mumbai against the sentence of
imprisonment strikes occurred on account of

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actions taken against, for participating in industry checks activity in other industries
demonstrations, trial of political leaders, etc. too.
After the independence also, some strikes (3) Decline in the demand for goods and
have occurred owing to agitations of services: Strikes reduces the demand for the
political parties on questions like re- goods that other industries make, if the
organisation action of States, National industry in which stoppage has occurred is
Language, etc. Percentage distribution of one that furnishes raw materials semi-
industrial disputes by causes as published by finished goods or service largely used in the
the Ministry of Labour. products of other industries.
(4) Lasting loss to the workers: There is a
Impact/Effect/Consequences of Industrial lasting injury to the workers in the form of
Disputes work being interrupted due to the strikes
which involves a loss of time which cannot
Industrial law is no exception to the shifting be replaced. The wages are lost and the
emphasis of the modern law towards workers can least afford to lose them
statutory law. The Industrial Disputes Act, especially when the average earning of a
1947 is therefore, the matrix, the charter, as worker is not very high.
it were, to the industrial law. This Act and (5) Increase in indebtedness: This increases
other analogous State statutes provide the the indebtedness among the workers and not
machinery for regulating the rights of the only the old debts become heavier but fresh
employers and employees to lock-outs and debts may also be incurred.
strikes and foster investigation and (6) Loss of health of family members: The
settlement of industrial disputes in peaceful workers and their family members also
and harmonious atmosphere by providing suffer from loss of health due to mental
scope for collective bargaining by warrious resulting from loss of wages.
negotiations and mediation and, failing that, (7) Problem to consumers: Strikes and
by voluntary arbitration or compulsory lockouts create problem to consumers also.
adjudication by the authorities created under Articles of their requirements are not
these statutes with the active participation of available in time, and the prices of such
the unions. articles reach high due to black marketing
activities.
The consequences of Industrial disputes are (8) Loss to the management/employer:
many, a brief description is given When workers stop working, the plant and
machinery remain idle. The fixed express
(1) Disturb the economic, social and are to borne by the employer even when the
political life of a country: When labour and production stops. This way the employer
equipment in the whole or any part of an suffers from great loss.
industry are rendered idle by strike or (9) Bad effect on labour relations: Strikes
lockout, national dividend suffers in a way and lockouts bring bad effects on industrial
that injures economic welfare. relations. With the result the workmen and
the employer always be in mental tension.
(2)Loss of Output: Loss of output in an (10) Obstruction to economic growth:
industry which is directly affected by a Strikes creates many kinds of violence
dispute, but other industries are also affected which obstruct the growth of economy.
adversely, as stoppage of work in one

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In the All India Bank Employees the right to strike. Section 24 differentiates
Association v. I. T, the Supreme Court between a 'legal strike' and an 'illegal strike'.
held, "the right to strike or right to declare It defines 'illegal strikes' as those which are
lock out may be controlled or restricted by in contravention to the procedure of going
appropriate industrial legislation and the to strike, as laid down under Sections 22 and
validity of such legislation would have to be 23.
tested not with reference to the criteria laid
down in clause (4) of article 19 but by The general tests evolved for determination
totally different considerations." Thus, there of the question as to what is industry ?
is a guaranteed fundamental right to form have been ephemeral and elastic. After the
association or Labour unions but there is no decision of the Supreme Court Bangalore
fundamental right to go on strike. Under the Water Supply and Sewerage Board vs.
Industrial Dispute Act, 1947 the ground A.Rajappa [(1978) I.L.L.J.349] one may
and condition are laid down for the legal justifiably say that even the Supreme Court
strike and if those provisions and conditions is the Court of ultimate conjecture . In this
are not fulfilled then the strike will be case all the judges, in desperation, have
illegal. unanimously cried for legislative reform of
the definition of industry clearly
In Mineral Miner Union vs. Kudremukh demarcating its contours.
Iron Ore Co. Ltd., it was held that the
provisions of section 22 are mandatory and The provision thereby implies that all strikes
the date on which the workmen proposed to are not illegal and strikes in conformity with
go on strike should be specified in the the procedure laid down, are legally
notice. In Gujarat Steel Tubes v. Its recognized. Further, Justice Krishna Iyer
Mazdoor Sabha, (AIR 1980 SC had opined that "a strike could be legal or
1896) Justice Bhagwati opined that right to illegal and even an illegal Banglore Water
strike is integral of collective bargaining. He Supply and Sewage Board V. A.Rajappa
further stated that this right is a process AIR 1978 SC 548 strike could be a justified
recognized by industrial jurisprudence and one". It is thus beyond doubt that the
supported by social justice. Gujarat Steel Industrial Disputes Act, 1947 contemplates a
Tubes is a three-judge bench decision and right to strike. It is for the judiciary to
cannot be overruled by the division bench examine whether it is legal or illegal. Is the
decision of T.K. Rangarajan v.Government total ban on strikes post-Rangarajan not
of Tamilnadu and Others. barring judicial review which itself is a
(MANU/SC/0541/2003). basic structure of the Constitution?

In the Rangarajan case the court had no The workers' right to strike is complemented
authority to wash out completely the legal by the employers' right to lock-out, thus
right evolved by judicial legislation. The maintaining a balance of powers between
scheme of the Industrial Disputes Act, 1947 the two. However, the Rangarajan judgment,
implies a right to strike in industries. A by prohibiting strikes in all forms but
wide interpretation of the term 'industry' by leaving the right to lock-out untouched shifts
the courts includes hospitals, educational the balance of power in favour of the
institutions, clubs and government employer class.
departments. Section 2 (q) of the Act defines
'strike'. Sections 22, 23, and 24 all recognize

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Analysis of the definition The Supreme Court analyzed this situation
in the light of the Australian Judgment given
Industry - Section 2(j) of the Industrial in Federated Municipal and Shire Council
Disputes Act, 1947, as any business, trade, Employees Union of Australia Vs
undertaking, manufacture, calling of Melbourne Corporation and observed that
employers, and includes any calling, service, through every activity in which the
employment, handicraft, industrial relationship of employer and employee
occupation or avocation of workmen. The existed commonly understood at an industry,
first part says that industry means any but still a wider and more comprehensive
business, trade, undertaking, manufacture or interpretation has to be given to such words
calling of employers and the second part of to meet the rapid industrial progress and to
the definition of industry says that it bring about industrial peace, and economy
includes any calling, service, employment, and a fair.
handicraft, or industrial occupation or
avocation of workmen. The Courts have In the case of Madras Gymkhana Club,
given different meaning to this concept at Employees Union Vs Management of
different times, and actually, the Madras Gymkhana Club5, it was observed
interpretation has always depended on that if the activity can be described as an
predictions of individual Judges. industry with reference to the occupation of
the employers, the ambit of the industry,
For the first time such a situation arose in under the force of the second part takes in
the case of Budge Municipality Vs P.R. the different kinds of activity of employees
Mukerjee3 when Mr. Justice Chandra mentioned in the second part. But the second
Shekara Iyer of the Supreme Court was standing alone cannot define industry. By
asked to decide whether the Municipality is the inclusive part of the definition the labour
an industry within the meaning of the force employed in any industry is made an
Industrial Disputes Act, 1947. The fact of integral part of the industry for the purpose
this case was that two employees of the of industrial disputes although industry is
Municipality who were the members of ordinarily something which employers
Municipality Workers Union were create or undertake .
suspended by the Chairman on the charges
of the negligence, insubordination and In Bangalore Water Supply Vs A. Rajappa,
indiscipline. The workers were dismissed a seven Judges Bench of the Supreme Court
from the service saying that their exhaustively examined and considered the
explanations were unsatisfactory. The union scope of industry and prescribed the Triple
questioned the dismissal and the Tribunal test which has practically reiterated the test
directed the workers reinstatement by projected in Hospital Mazdoor Sabha case.
making an award saying that suspension of The Triple test laid down in the Bangalore
two employees was of victimization. The Water Supply case are that where there is
Municipality under Article 226 of the Indian a) systematic activity,
Constitution took the matter to the High b) organized by co-operation between
Court. The petition was dismissed and leave employer and employee (the direct and
was granted under Article 132(1) of the substantial element is chimerical),
Indian Constitution to make an appeal to the c) for the production and/or distribution of
Supreme Court. goods and services calculated to satisfy

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human wants and wishes, prima facie, there Industrial Disputes Act, 1947 as in other
is an industry . statutes, remains the contract of employment
i. Absence of profit motive or gainful between the employer and the employee.
objective is irrelevant, be the venture in Unless there is a contract of employment
public, joint, private or other sectors. between the two of employer and or in other
ii. The true focus is functional and the words, there is a relationship of employer
decision test is the nature of the activity and employee between them, the definition
with special emphasis on the employer of; workman; will not come into play.
and employee relations.
d) If the organization is a trade or business, Individual Dispute When Becomes
it does not cease to be one because of Industrial Dispute
philanthropy animating the undertaking.
The Supreme Court of India examined this
In view of the above points and the concept in different cases and observed in
consequences of the decision given in the the case of News Papers Limited Vs State
Bangalore Water Supply case activities that Industrial U.P. and others. Whether a single
such as professions, clubs, educational man who is aggrieved by an action can raise
institutions, cooperatives, Research industrial dispute. The Section 2(k) of the
institutes, charitable projects and other Industrial Disputes Act, 1947 provides that a
kindered adventures if they fulfill the above dispute between employer and workmen i.e.
Triple test, cannot be exempted from the plural form has been used, the Supreme
scope of section 2(j) of the Industrial Court of India specifically observed that
Disputes Act, 1947. before insertion of section 2(A) of the Act
an individual dispute could not per say be an
Workmen - in section 2(s) falls in three industrial dispute, but it could become one if
parts; the first part gives a statutory meaning taken up by the trade union or a number of
of workman . This part determines a workmen. The provision of the Act leads to
workman by reference to a person the conclusion that its applicability to an
(including an apprentice) employed in an individual as opposes to dispute involving a
industry to do any manual, unskilled, group of workmen is excluded unless it
skilled, technical, operational, clerical or acquires the general characteristic of an
supervisory work, for the hire or reward. It industrial dispute viz., the workmen as a
determines what a workman means. The body or a considerable section of them make
second part is designed to include something common cause within the individual
more in what the term primarily denotes. workmen .
This part gives an extended connotation to
the expression workman . The third part Like industry this term also has been
specifically excludes the categories of interpreted and analyzed differently in
persons specified in clauses (i) to (iv) of this different case situations by the Courts. Some
sub section. Even if a person satisfies the of the Principles to judge the nature of this
requirements of any of the first two parts, he terms were evolved by Courts such as
shall be excluded from the definition of Kundan Textiles Vs Industrial Tribunal23.
workman if he fails in any of the four Here the Court relied on Convey Vs Wade;
categories in the third part. In the first part, Jumburnna Coal Mines Vs Victorian Coal
the legal basis of the definition of Mines Asson; GeorgeHudson Ltd., Vs
workman contained in section 2(s) the Australian Timber Workers Union; D.W.

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Banerji Vs P.R.Mukerji; CPT Service Ltd. taken up by any union or by a number of
Vs R.G.Patwardhan28; Dimakuchi Tea workmen. The section provides: Where any
EstateVs the Management; Bombay Union employer discharges, retrenches or
of Journalists Vs The Hindu; Workmen Vs otherwise terminates the services of an
Dharampal Premchand. individual workman, any dispute or
difference between that workman and
The following are some of the principles employer connected with, or arising out of,
laid to examine the nature of the dispute by such discharge, dismissal, retrenchment or
the above said Courts. termination shall be deemed to be an
1. The dispute must affect large group of industrial dispute notwithstanding that no
workmen or employers who have other workman nor any union or workmen is
community of interest and the rights of these a party to the dispute.
workmen must be affected as a class in the
interest of common good. In other words, Whether an outside union is competent to
considerable section of employees should espouse the cause of workmen working in a
necessarily make common cause with the particular establishment. If it is, then what
general lot. should be the qualifications of that union
2. The dispute should invariably be taken up and under what circumstances could it
by the industry union or by an appreciable espouse the cause, it is enough that it
number of workmen. possesses a representative character,
3. There must be a concentrated demand by notwithstanding other considerations, within
the workers for redress and the grievance the industry, for the maintenance of
becomes such that if turns from individual industrial peace and harmony. It reasonably
complaint into the general complaint. justified that the workmen of an industry
4. The parties to the dispute must have direct who have a dispute with their employer
and substantial interest in the dispute, i.e., become members of an outside union after
there must be some nexus between the union the cause of action arose, simply to make
which espouses the cause of the workmen that union qualified to espouse their cause.
and the dispute. Moreover, the union must
fairly claim a representative character. In such issues Justice and fair play require
5. If the dispute was in its inception an that a dispute should be branded as an
individual dispute and continued to be such industrial dispute within the meaning of the
till the date of its reference by the Industrial Dispute Act, 1947 if only it affects
Government for adjudication, it could not be the operations of the industry in any manner,
converted into an industrial dispute by irrespective of the persons involved. If it is
support to the reference even of workmen likely to create a grave situation and if it
interested in the dispute. shows impact adversely on production and
industrial discipline, it has to be taken up as
The whole controversy ended in the year an industrial dispute, no matter whether the
1965 and the situation was changed in cases union takes it up or not. Espousal by outside
of dismissals and retrenchments when the unions should as far as possible be
Parliament amended the Industrial Dispute discouraged because that gives leverage to
Act, 1947 and added section 2 A, according outside people to put unnecessary
to which, even the individual disputes interference in an industry where they have
relating to termination of service would now no locus standi otherwise. It would be
be called industrial disputes under the Act, better if the Parliament defines the term
notwithstanding whether they have been

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 industrial dispute , in a detailed manner so to the Government along with a
as to leave little scope for diverse memorandum of settlement duly signed by
interpretations. both parties. If no settlement is reached by
the parties, the conciliation officer will
Procedure for Settlement of Industrial submit his report to the appropriate
Disputes Government stating the reasons for which he
thinks no settlement could be arrived at as
The Industrial Disputes Act, 1947 provides well as the facts of the case.
procedure for settlement of industrial
disputes, which must be followed in all Action by the Government
public utility service , has been defined in
section 2 (n) of the Act so as to include any On receipt of the report from the
railway, postal, telegraph or telephone Conciliation Officer, the Government will
service that supplies power, water and light come to a decision on whether the
to the public, any system of public circumstances and the facts of the case as
conservancy or sanitation, any section of an such to justify a further reference. The
industrial establishment on the working of Government has to arrive at prima facie
which the safety of the establishment or the conclusion that the nature of the dispute
workmen employed therein depend and any justifies a further reference. If in the opinion
industry which keeping in view the public of the Government, there is a scope of
emergency has been declared as such by the arriving at a settlement by further
appropriate Government . conciliation efforts, it may refer the case to
the Board of Conciliation.
As laid down in the Act a dispute should
first go through the process of conciliation Collective Bargaining as a method of
before it could be referred to the appropriate Settlement of Industrial Disputes
authorities for adjudication. Where any
industrial dispute exists or is apprehended, Collective bargaining as such is one of the
the Conciliation Officer may or where the most developed in Indian history since
dispute relates to a public utility service and independence, and deserves the attention of
a notice under Section 22 has been given all who are concerned with the preservation
shall hold conciliation proceedings in of industrial peace and implement of
prescribed manner. industrial productivity. In the laissez faire
the employers enjoyed unfettered rights to
Conciliation proceedings are deemed to hire and fire. In United States of America
have been started from the date on which a the workers have the right to organize and
notice issued to the parties to appear before bargain collectively. In Japan the right to
the conciliation officer who may meet them collective bargaining is guaranteed under
jointly or separately. The Conciliation their Constitution.
Officer must submit his report to the
Government within 14 days of the starting Collective bargaining in India is of late
of conciliation proceedings. development and therefore in view of the
above circumstances, the legislature in order
During this period he tries to bring about a to establish and maintain harmony and peace
fair and amicable settlement between the between labour and capital came out with a
parties to dispute. If a settlement arrived at, legislation named The Industrial Disputes
the Conciliation Officers will send a report

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Act, 1947 which provides for the to promote measures for securing and
machinery for the settlement of industrial preserving amity and good relations between
disputes. This act has two main objects, first the employer and workmen and, to that end
is the investigation and the second is the to comment upon matters of their common
settlement. There are some routine criticism interest or concern and endeavour to
of the adjudicatory system i.e., delay, compose any material difference of opinion
expensive Governmental interference in in respect of such matters. The Committees
referrals and uncertain outcome. Therefore attempt to remove causes of friction between
the parties to the industrial dispute are employers and workers in the day-to-day
coming closure to the idea that direct working of the factory. They provide a
negotiations provide better approach to forum for negotiations between employers
resolving key deference over wages and and workers at the factory level.
other conditions of employment.
In Kemp & Company Ltd., Vs. their
Settlement Machinery of Industrial Workmen that The Works Committees are
Disputes normally concerned with problems arising in
the day to day working of the concern and
State intervention in industrial relations is the functions of the Works Committees are
essentially a modern development. The to ascertain the grievances of the employees
concern of state in matters relating to labour and when occasion arises to arrive at some
is a product of its obligations to protect the agreement also.
interest of industrial community, while at
the same time fostering economic growth in Short comings
almost all countries. The state has assumed
powers to regulate labour relations in some The scope of the Works Committee as in
degree or the other. In 1947, the Sec. 3 (ii) of the Industrial Disputes Act,
Government of India passed the Industrial 1947 is vague. Besides health, safety,
Disputes Act under which machinery for the welfare and human relations, the committees
preventions and settlement of the disputes advise on a number of technical matters and
was outlined. The Act as amended in 1956 are kept posted with the undertaking
has set up machinery for settlement of position of trade, sale and account sheets.
disputes. The present system of establishing
industrial peace and to settle industrial Grievance Redressal Machinery
disputes is as under:
The Industrial Disputes (Amendment Act),
The Works Committee 2010 had substituted a new chapter for
chapter II-B.
In the case of any industrial establishment in
which 100 or more workmen are employed
1. Every industrial establishment employing
or have been employed on any day in the
20 or more workmen shall have one or more
preceding 12 months, the appropriate
GRC for the resolution of disputes arising
Government may by general or special order
out of individual grievances.
require the employer to constitute in the
prescribed manner a Works Committee 2. The GRC shall consist of equal number of
consisting of representatives of employer members from the employer and the
and workmen engaged in the establishment. workmen.
It shall be the duty of the Works Committee

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3. The chairperson of the GRC shall be refer the dispute to a Board of Conciliation
selected from the employer and from among or Labour Court or Industrial Tribunal or
the workmen alternatively on rotation basis National Tribunal as the case may be.
every year.
4. The total number of members of the GRC
shall not exceed more than six. Provided that
there shall be, as far as practicable, one
woman member if the GRC has two
members and in case the numbers of
members are more than two, the number of
women members may be increased
proportionately.
5. Notwithstanding anything contained in
this section, the setting up of GRC shall not
affect the right of the workman to arise
industrial dispute on the same matter under
the provisions of this Act.
6. The GRC may complete its proceedings
within 30 days on receipt of a written
application by or on behalf of the aggrieved
party.
7. The workman who is aggrieved of the
decision of the GRC may prefer an appeal to
the employer against the decision; and the
employer shall, within one month from the
date of receipt of such appeal, dispose of the
same and send a copy of his decision to the
workman concerned.
8. Nothing contained in this section shall
apply to the workmen for whom there is an
established GRC in the establishment
concerned. A Conciliation Officer may take appropriate
steps for inducing the parties to a fair and
amicable settlement of the dispute. If a
Duties of Conciliation Officers settlement is arrived at during conciliation
proceedings, he must send a copy of the
The Conciliation Officer is required to report and the memorandum of the
submit his report within 14 days of the settlement to the Government.
commencement of the conciliation
proceedings, but the time for the submission In case no settlement is arrived at, he is
of the report may be extended further on the required to send to Government, full report
written request of the parties to the dispute. of the steps taken by him to resolve the
Where a settlement is not reached, the dispute, and the reasons on account of which
appropriate Government, after considering a settlement could not be arrived at.
the report of the conciliation officer, may

339
Board of Conciliation setting forth the proceedings and steps taken
by the board for ascertaining the facts and
Section 5 of the Industrial Disputes Act, circumstances relating to the disputes and
1947 provides for creation of Board of bringing about a settlement and the reasons
Conciliation which is simply an extension of on account of which a settlement could not
conciliation officers work. Unlike a be arrived at, and also its recommendations
Conciliation Officer, the board may not be a for the determination of the dispute. The
permanent body and can be set up as the board is required to submit report within two
occasion arises. It comprises of two or four months of the date of the reference of the
members representing parties to the dispute dispute or within shorter period as
in equal numbers and a chairman who has to determined by the appropriate Government.
be an independent person . The Board has
the status of a Civil Court and can issue Court of Inquiry
summons and administer oaths.
The appropriate Government is empowered
References of Disputes to Board of to constitute a Court of inquiry as
Conciliation occasion arises, for the purpose of inquiry
in to any matter appearing to connect with or
Where the appropriate Government is of the relevant to an industrial dispute . Generally
opinion that any industrial dispute exist or is Court of Inquiry is constituted when no
apprehended, it may at any time, by order in settlement is arrived at as a result of efforts
writing, refer the dispute to a Board of made by the Conciliation Board. The idea of
Conciliation for promoting settlement. In Court Inquiry is new in this Act and has
case the parties to an industrial dispute make been borrowed from the British Industrial
an application in the prescribed manner Court Act, 1919. The Government can refer
whether jointly or separately, for a reference any single or more matter connected or
of the dispute to a Board of Conciliation, the relevant to the dispute or can refer whole to
appropriate Government is required. Where the Court which can be set up irrespective of
the dispute is referred to the Board, the consent of parties to dispute.
appropriate Government may prohibit the
continuance of any strike or lock-out in Labour Court
connection with such dispute which may be
in existence on the date of reference. Labour Court is one of the adjudication
authorities set up under the Industrial
Duties and Powers of the Board Disputes Act, 1947 it was introduced by
amending Act in 1956. Setting up of a
When a dispute has been referred to the Labour Court is at the discretion of the
Board of Conciliation, it may take suitable Government. It is the one man Court
steps to induce the parties to come to a fair presided over by a person who has held
and amicable settlement. If settlement is either a judicial position in India. The
arrived at, the board is required to send a function of labour Court is to adjudicate on
report and a memorandum of the settlement matters referred to it is listed in the schedule
signed by the parties to the disputes to the II appended to the Act, which includes; The
appropriate Government. If no such propriety or legality of an order passed by an
settlement is arrived at, the Board is required employer under the standing orders;
to the appropriate Government a full report Discharge or dismissal of workmen

340
including re- instatement of or grant of relief k. Any increase or reduction in the number
to workmen wrongfully dismissed; of persons employed or to be employed in
Withdrawal of customary concession or any occupation or department or shift not
privilege; Illegality or otherwise of a strike occasioned by circumstances over which the
or a lock out. All matters other than those employer has no control;
provided in the Third Schedule appended to
the Act. National Tribunals

Tribunals or Industrial Tribunals National Tribunals can be set up by the

Central Government, involve questions of
An Industrial Tribunal may be set up by the national importance industrial
appropriate Government on a temporary or establishments situated in more than one
permanent basis for a specified dispute for State. If the mater under adjudication of
industry. As a whole the Tribunal comprises National Tribunal is pending before a Court
of one person only. Generally, industrial or Tribunal the proceedings relating to that
disputes of major importance or industrial matter which is pending before them will be
disputes which are important to the industry deemed to have been quashed. State
as a whole are referred to the industrial Governments are debarred from referring
tribunals. the matter under adjudication of National
Tribunal to any Labour Court or Industrial
Thus appropriate Government may Tribunal. The National Tribunal consists of
constitute one or more Industrial Tribunals one person only to be appointed by the
for the adjudication of industrial disputes Central Government.
relating to any matter as specified either in
second schedule mentioned above or in the Reference of disputes to adjudication
third schedule appended to the Industrial authorities
Disputes Act, 1947 which includes ;
a. Wages, including the period and mode of The appropriate Government may refer the
payment. dispute to a Labour Court Tribunal or
b. Contribution paid or payable by the National Tribunal for adjudication. The
employer to a any provident or pension fund Labour Court is empowered to adjudicate
or for the benefit of the workmen under any upon matter specified in Second Schedule
law for the time being in force; and an Industrial Tribunal on those specified
c. Compensatory and other allowances. in Second or Third Schedule.
d. Hours of work and intervals.
e. Leave with wages and holidays. Thus, any matter which is important for the
f. Starting alteration or discontinuance. industry as a whole and is listed in schedule
g. Classification by grades; ii or schedule iii maybe referred for
h. Withdrawal of any customary concession adjudication to a Tribunal or Industrial.
or change usage; However, where a dispute relates to a matter
i. Introduction of new rules of discipline or specified in the third schedule, and is not
alteration of existing rules, except in so far likely to affect more than one hundred
as they are provided in standing orders; workmen, the appropriate Government may
j. Rationalization, standardization or refer it to a Labour Court.
improvement of plant or techniques which is
likely to lead retrenchment of workmen.

341
The procedure for the settlement of (v) It would be possible to arrange transfer
dispute of cases from the National IRC to the State
IRC and vice versa under certain conditions.
(i) After negotiations have failed and before (vi) The commission will have powers to
notice of strike or lock-out served, the pay or withhold payments for strike or
parties may agree to voluntary arbitration lockout under certain circumstances.
and the commission will help the parties in (vii) All collective agreements should be
choosing an arbitrator mutually concept able registered with IRC.
to them. (viii) An award made by the IRC in respect
(ii) In case of essential industrial services of dispute raised by the recognized union
when collective bargaining fails and when should be binding on all workers in the
the parties to the dispute do not agree to establishments and the employers.
arbitration, either party shall notify the Labour Courts may be appointed in each
Industrial Relations Commission (IRC) with state to deal with interpretation and
a copy to the appropriate Government of the implementations of award, claims arising
failure of negotiation where upon the IRC out of rights and obligations under the
should adjudicate upon the disputes and its labour laws and such other matters as may
award shall be final and finding upon the be assigned to these Courts.
parties.
(iii) In the case of non-essential industries Suggestion
services, following the failure of
negotiations and refusal by the parties to a) To suggest rationalization of existing laws
avail of voluntary arbitration, the IRC after relating to labour in organized sector;
the receipt of notice of direct action may b) To suggest an umbrella legislation for
offer the parties its good offices for ensuring a minimum level of protection to
settlement. the workers in the unorganized sector;
After the expiry of notice period, if no c) That it is necessary to provide a minimum
settlement is reached, the parties will be free level of protection to managerial and other
to resort to direct action. If direct action employers too, against unfair dismissals or
continues for 30 days it will be incumbent removals. This has to be brought
on the IRC to intervene and arrange for adjudication by Labour Court or Labour
settlement of the dispute. Relation Commission or Arbitration;
(iv) When a strike or lock-out commences, That all these laws are judicially constituted
the appropriate Government may move the into a single law called the Labour
commission to call for the termination of the Management Relations;
strike or lock-out on the ground that its d) That the changes in the labour laws be
continuance may affect the security of the accompanied by a well-defined social
state, national economy or public order and security package that will benefit all
it after hearing the Government and the workers, be they in the organized or
parties concerned the commission is so unorganized sector and should also cover
satisfied. It may for reasons to be recorded those in administrative managerial and other
call on the parties terminate the strike lock- categories which have been excluded from
out and the file their statements before it. the purview of the term worker .
There upon, the commission shall adjudicate e) Between arbitration and adjudication, the
on the dispute. better of the two and would like, the system
of arbitration to become the accepted mode

342
of determining dispute which is not settled of industrial disputes. Second, the dispute
by parties themselves. resolution machinery has increasingly failed
f) A system of Labour Courts, Lok - to bring about timely agreements and reduce
Adalaths and Labour Relation Commission the number of workdays lost due to work
is the integral adjudicatory system in labour stoppages. Finally, there seems to be a need
matters. to encourage parties to use collective
g) System of Lok Adalaths by the bargaining, rather than rely on third party
commission to be pursued to settle disputes dispute resolution.
speedily.
Whether the Indian government will
Conclusion introduce these changes is yet unknown. It is
only a matter of time before the current
This article is an informative guide to the industrial relations laws receive increased
practical aspects of industrial dispute attention, since the labor relations climate
settlement in India. By providing the also plays an important role in the decision
information regarding the legal framework of foreign investors to establish industries in
of industrial relations laws, this article India.
should prove helpful to those firms which
are contemplating the establishment of References
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