Industrial Disputes Machinery

Meaning of industrial disputes:

According to Section 2 (k) of the Industrial Disputes Act, 1947, the term
‘industrial dispute’ means “any dispute or difference between employers and
employers or between employers and workmen, or between workmen and
workmen, which is connected with the employment or non- employment or the
terms of employment and conditions of employment of any person”

If industrial peace is the backbone of a nation, strikes and lockouts are cancer for
the same as they effect production and peace in the factories. In the
socioeconomic development of any country cordial and harmonious industrial
relations have a very important and significant role to play. Industry belongs to
the society and therefore good industrial relations are important form society’s
point of view.

Settlement of Industrial Disputes - Methods and

Machinery
Lasting industrial peace requires that the causes of industrial disputes should be
eliminated. In other words, preventive steps should be taken so that industrial
disputes do not occur. But if preventive machinery fails, then the industrial
dispute settlement machinery should be activated by the government because
non- settlement of disputes will prove to be very costly to the workers,
management and the society as a whole.
The machinery for handling of industrial conflicts has been shown in the following
figure.
Machinery for Handling Industrial Disputes

A. Prevention of Industrial Disputes

The preventive machinery has been set up with a view to creating harmonious
relations between labor and management so that disputes do not arise. It
comprises of the following measures:
1. Worker’s participation in management
2. Collective bargaining
 3. Grievance Procedure
4. Tripartite bodies
5. Code of discipline
6. Standing orders

1. Worker’s participation in management

It is a method whereby the workers are allowed to be consulted and to have a
say on the management of the unit. The International Labor Organization has
been encouraging member to promote the schemes of worker’s participation in
management. The important schemes of worker’s participation are:
i. Work committee
ii. Suggestion scheme
iii. Joint Management Councils
iv. Worker Directors
v. Co-partnership

2. Collective bargaining
Collective bargaining is a process in which the representatives of the employer
and the employees meet and attempt to negotiate a contract governing the
employer. Collective bargaining not only includes negotiation, administration and
enforcement of the written contracts between the employees and the employers,
but also includes the process of resolving labor management conflicts. Collective
bargaining is democratic, flexible, durable means of regulating industrial relations.

3. Grievance Procedure
It is established for an early settlement of worker’s grievances. In India, Sec. 9-C of
the Industrial Disputes Act provides that in every establishment in which 100 or
more workers are employed or have been employed on any one day in the
preceding twelve months, the employer shall set up a time bound grievance
redressal procedure.
 4. Tripartite bodies
Several tripartite bodies have been constituted at the Central and State levels.
The Indian Labour Conference, Standing Labour Committees, Wage Boards and
Industrial Committees operate at the Center. At the State levels, State Labour
Advisory Boards have been set up. All these bodies play an important role in
reaching at agreements on various labour matters. The recommendations of
these bodies are advisory in nature. All these bodies constitute the consultative
machinery for the private sector.

5. Code of discipline
Code of Discipline is a set of self-imposed mutually agreed voluntary principles of
discipline and good relations between the management and the workers in
industry. Formally announced in 1958, the Code of Discipline provides guidelines
for the workers, unions and employers. It aims at preventing disputes through
negotiations without the interference of an outside agency.

6. Standing Orders
The purpose of these orders is to prescribe guidelines for regulating relations
between employers and employees under the Industrial Employment (Standing
Orders) Act, 1946. Every factory employing 100 or more workers is required to
frame standing orders in consultation with the workers. These orders must be
certified and displayed properly the employer for the information of workers.

B. Settlement of industrial Dispute

This machinery has been provided under the industrial Disputes Act, 1947. It in
fact provides a legislative way of settling the disputes. The following approaches
and measures are used for the settlement of disputes in industry:

1. Conciliation
Through conciliation, a third party provides assistance with a view to help the
parties, employers and employees, to reach an agreement. The conciliator brings
the employer and employees together to discuss with them their differences and
assist them in finding out solution to their problems. Conciliation may be
voluntary or compulsory. It is voluntary when the employer and employees
resolve their difference, amicably amongst themselves, while it is compulsory
when the parties have to participate irrespective of whether they desire to do so
or not.

2. Court of Enquiry
In case of the failure of the conciliation proceedings to settle a dispute, the
government can appoint a Court of Inquiry to enquire into any matter connected
with or relevant to industrial dispute. The court is expected to submit its report
within six months from the commencement of enquiry. A court of Inquiry may
consist of one independent person or of such number of independent persons as
the appropriate Government may think fit. In the case of a court of enquiry, the
object is to enquire into and reveal the causes of an industrial dispute.

3. Voluntary Arbitration
Voluntary arbitration refers to getting the disputes settled through an
independent person chosen by the parties involved mutually and voluntarily.
Voluntary arbitration became popular as a method of settling differences
between workers and management with the advocacy of Mahatma Gandhi, who
has applied it very successfully in the Textile Industry of Ahmedabad. However
voluntary arbitration was lent legal identity only in 1956 when Industrial Disputes
Act 1947 was amended to include a provision relating to it. Voluntary arbitration
is one of the democratic ways for setting industrial disputes. It is the best method
for resolving industrial conflicts and is a close supplement to collective bargaining.
It not only provides a voluntary method of settling industrial disputes, but is also a
quicker way of settling them.

4. Adjudication
Adjudication is the ultimate legal remedy for the settlement of Industrial disputes.
Adjudication means intervention of a legal authority appointed by the
Government to make a settlement which is binding on the parties. The Industrial
Dispute Act provides for a three tier system of adjudication.
I. Labour Courts
ii. Industrial Tribunal
iii. National Tribunal
i. Labour Court
A labour court consists of one person only, who is normally a sitting or an ex-
judge of a High Court. It may be constituted by the appropriate Government for
adjudication of disputes which are mentioned in the second schedule of the Act.
A Labour court consists of one person only to be appointed by the appropriate
Government. It is the duty of the Labour Court to adjudicate upon the industrial
disputes relating to any matter specified.
ii. Industrial Tribunals
Like Labour Court, an Industrial Tribunal is also a one-man body. The matters
which fall within the jurisdiction of industrial tribunals are as mentioned in the
second schedule or the third schedule of the Act.
The Industrial Tribunals may be referred the following issues:
 Wages including the periods and mode of payment
 Compensatory and other allowances
 Hours of work and rest intervals
 Leave with wages and holidays
 Bonus, profit sharing, provident fund and gratuity
 Shift working otherwise than in accordance with the standing orders
 Rules of discipline
 Retrenchment
 Introduction of grievance
A grievance is any dissatisfaction or feeling of injustice having connection with one’s
employment situation which is brought to the attention of management. Speaking
broadly, a grievance is any dissatisfaction that adversely affects organizational relations
and productivity. To understand what a grievance is, it is necessary to distinguish
between dissatisfaction, complaint, and grievance.

1. Dissatisfaction is anything that disturbs an employee, whether or not the unrest is

expressed in words.

2. Complaint is a spoken or written dissatisfaction brought to the attention of the

supervisor or the shop steward.

3. Grievance is a complaint that has been formally presented to a management

representative or to a union official.

According to Michael Jucious, ‘Grievance is any discontent or dissatisfaction

whether expressed or not, whether valid or not, arising out of anything connected with
the company which an employee thinks, believes or even feels to be unfair, unjust or
inequitable’.

In short, grievance is a state of dissatisfaction, expressed or unexpressed, written or

unwritten, justified or unjustified, having connection with employment situation.

Features of Grievance:
1. A grievance refers to any form of discontent or dissatisfaction with any aspect of the
organization.
2. The dissatisfaction must arise out of employment and not due to personal or family
problems.

3. The discontent can arise out of real or imaginary reasons. When employees feel that
injustice has been done to them, they have a grievance. The reason for such a feeling
may be valid or invalid, legitimate or irrational, justifiable or ridiculous.

4. The discontent may be voiced or unvoiced, but it must find expression in some form.
However, discontent per se is not a grievance. Initially, the employee may complain
orally or in writing. If this is not looked into promptly, the employee feels a sense of lack
of justice. Now, the discontent grows and takes the shape of a grievance.

5. Broadly speaking, thus, a grievance is traceable to be perceived as non-fulfillment of

one’s expectations from the organization.

Causes of Grievances

Grievances may occur due to a number of reasons:

1. Economic:
Employees may demand for individual wage adjustments. They may feel that they are
paid less when compared to others. For example, late bonus, payments, adjustments to
overtime pay, perceived inequalities in treatment, claims for equal pay, and appeals
against performance- related pay awards.

2. Work environment:
It may be undesirable or unsatisfactory conditions of work. For example, light, space,
heat, or poor physical conditions of workplace, defective tools and equipment, poor
quality of material, unfair rules, and lack of recognition.
3. Supervision:
It may be objections to the general methods of supervision related to the attitudes of the
supervisor towards the employee such as perceived notions of bias, favoritism,
nepotism, caste affiliations and regional feelings.

4. Organizational change:
Any change in the organizational policies can result in grievances. For example, the
implementation of revised company policies or new working practices.

5. Employee relations:
Employees are unable to adjust with their colleagues, suffer from feelings of neglect and
victimization and become an object of ridicule and humiliation, or other inter- employee
disputes.

6. Miscellaneous:
These may be issues relating to certain violations in respect of promotions, safety
methods, transfer, disciplinary rules, fines, granting leaves, medical facilities, etc.

Effects of Grievance

Grievances, if not identified and redressed, may adversely affect workers, managers, and
the organization.

The effects are the following:

1. On the production:
a. Low quality of production
b. Low productivity

c. Increase in the wastage of material, spoilage/leakage of machinery

d. Increase in the cost of production per unit

2. On the employees:
a. Increase in the rate of absenteeism and turnover

b. Reduction in the level of commitment, sincerity and punctuality

c. Increase in the incidence of accidents

d. Reduction in the level of employee morale.

3. On the managers:
a. Strained superior-subordinate relations.

b. Increase in the degree of supervision and control.

c. Increase in indiscipline cases

d. Increase in unrest and thereby machinery to maintain industrial peace

Collective bargaining
Definition of Collective Bargaining:

 Industrial disputes between the employee and employer can also be settled by
discussion and negotiation between these two parties in order to arrive at a
decision.

 This is also commonly known as collective bargaining as both the parties

eventually agree to follow a decision that they arrive at after a lot of negotiation
and discussion.

 According to Beach, “Collective Bargaining is concerned with the relations

between unions reporting employees and employers (or their representatives).

It involves the process of union organization of employees, negotiations administration

and interpretation of collective agreements concerning wages, hours of work and other
conditions of employees arguing in concerted economic actions dispute settlement
procedures”.

“Negotiations about working conditions and terms of employment between an

employer, a group of employees or one or more employers organization on the other,
with a view to reaching an agreement.”

Collective Bargaining Involves:

(i) Negotiations

(ii) Drafting

(iii) Administration

(iv) Interpretation of documents written by employers, employees and the

union representatives
(v) Organizational Trade Unions with open mind.

Features of collective bargaining

1. It is a Group Action:
Collective bargaining is a group action as opposed to individual action. Both the parties
of settlement are represented by their groups. Employer is represented by its delegates
and, on the other side; employees are represented by their trade union.

2. It is a Continuous Process:

Collective bargaining is a continuous process and does not end with one agreement. It
provides a mechanism for continuing and organized relationship between management
and trade union. It is a process that goes on for 365 days of the year.

3. It is a Bipartite Process:

Collective bargaining is a two party process. Both the parties—employers and employees
— collectively take some action. There is no intervention of any third party. It is mutual
given-and-take rather than take-it-or-leave-it method of arriving at the settlement of a
dispute.

4. It is a Process:
Collective bargaining is a process in the sense that it consists of a number of steps. The
starting point is the presentation of charter of demands by the workers and the last step
is the reaching of an agreement, or a contract which would serve as the basic law
governing labor-management relations over a period of time in an enterprise.

5. It is Flexible and Mobile and not fixed or Static:

It has fluidity. There is no hard and fast rule for reaching an agreement. There is a scope
for compromise. A spirit of give-and-take works unless final agreement acceptable to
both the parties is reached.

6. It is Industrial Democracy at Work:

 Collective bargaining is based on the principle of industrial democracy where the labor
union represents the workers in negotiations with the employers. Industrial democracy
is the government of labor with the consent of the governed—the workers.

Process of Collective Bargaining

1. Preparation: At the very first step, both the representatives of each party
prepares the negotiations to be carried out during the meeting. Each member should be
well versed with the issues to be raised at the meeting and should have adequate
knowledge of the labor laws.

The management should be well prepared with the proposals of change required in the
employment terms and be ready with the statistical figures to justify its stand.

On the other hand, the union must gather adequate information regarding the financial
position of the business along with its ability to pay and prepare a detailed report on the
issues and the desires of the workers.
2. Discuss: Here, both the parties decide the ground rules that will guide the
negotiations and the prime negotiator is from the management team who will lead the
discussion. Also, the issues for which the meeting is held, are identified at this stage.

The issues could be related to the wages, supplementary economic benefits (pension

plans, health insurance, paid holidays, etc.), Institutional issues (rights and
duties, ), Administrative issues (health and safety, technological changes, job security,
working conditions).

3. Propose: At this stage, the chief negotiator begins the conversation with an opening
statement and then both the parties put forth their initial demands. This session can be
called as a brainstorming, where each party gives their opinion that leads to arguments
and counter arguments.

4. Bargain: The negotiation begins at this stage, where each party tries to win over the
other. The negotiation can go for days until a final agreement is reached. Sometimes,
both the parties reach an amicable solution soon, but at times to settle down the dispute
the third party intervenes into the negotiation in the form of arbitration or adjudication.

5. Settlement: This is the final stage of the collective bargaining process, where both
the parties agree on a common solution to the problem discussed so far. Hence, a
mutual agreement is formed between the employee and the employer which is to be
signed by each party to give the decision a universal acceptance.

Thus, to get the dispute settled the management must follow these steps systematically
and give equal chance to the workers to speak out their minds.
 Types of Collective Bargaining

1. Conjunctive or Distributive Bargaining: In this form of collective bargaining, both

the parties viz. The employee and the employer try to maximize their respective gains. It
is based on the principle, “my gain is your loss, and your gain is my loss” i.e. one party
wins over the other.

The economic issues such as wages, bonus, other benefits are discussed, where the
employee wishes to have an increased wage or bonus for his work done, whereas the
employer wishes to increase the workload and reduce the wages.

2. Co-operative or Integrative Bargaining: Both the employee and the employer sit

together and try to resolve the problems of their common interest and reach to an
amicable solution. In the case of economic crisis, such as recession, which is beyond the
control of either party, may enter into a mutual agreement with respect to the working
terms.

For example, the workers may agree for the low wages or the management may agree to
adopt the modernized methods, so as to have an increased production.

3. Productivity Bargaining: This type of bargaining is done by the management, where

the workers are given the incentives or the bonus for the increased productivity. The
workers get encouraged and work very hard to reach beyond the standard level of
productivity to gain the additional benefits.
 Through this form of collective bargaining, both the employer and the employee enjoy
the benefits in the form of increased production and the increased pay respectively.

4. Composite Bargaining: In this type of collective bargaining, along with the demand
for increased wages the workers also express their concern over the working conditions,
recruitment and training policies, environmental issues, mergers and amalgamations
with other firms, pricing policies, etc. with the intention to safeguard their interest and
protect the dilution of their powers.

Thus, the purpose of the Collective Bargaining is to reach a mutual agreement between
the employee and the employer with respect to the employment terms and enjoy a long
term relationship with each other.

Workers participation in management

INTRODUCTION AND MEANING

Workers participation in management refers to the participation o f non-managerial

employees in the decision-making process of the organization. Workers participation
gives employees the mental and psychological satisfaction and thereby increases their
involvement in the affairs o f the organization. Workers participation in management is
the most accepted principle of industrial relations in modern industry throughout the
world and in India too.

In the words of Keith Davis “Participation is a mental and emotional involvement of a

person in a group situation which encourages to contribute to group goals or objectives
and share responsibilities.
 According to the British Institute of Management Workers participation in
management is the practice in which employees take part in Management decisions and
it is based on the assumption o f commonality of interest between employer and
employee in furthering the long term prospects of the enterprise and those working in it.

Need of Workers Participation

Worker’s participation in management has assumed great importance these days
because of the following advantages:

1. Reduced industrial unrest: Industrial conflict is a struggle between two

organized groups which are motivated by the belief that their respective interests are
endangered by the self-interested behavior of the other. Participation cuts at this very
root of industrial conflict. It tries to remove or at least minimize the diverse and
conflicting interests between the parties, by substituting in their place, cooperation,
homogeneity of objects and common interests. Both sides are integrated and
decisions arrived at becomes “ours” rather than “theirs”.

2. Reduced misunderstanding: Participation helps dispelling employee’s

misunderstanding about the outlook of management in industry.

3. Increased organization balance: If worker are invited to share in organizational

problems, and to work towards common solutions, a greater degree of organizational
balance occurs because of decreased misunderstanding of individual and group
conflict. Participation leads to increased understanding throughout the organization.
People learn that others have problems beside themselves.

4. Higher productivity: Increased productivity is possible only when there exists

fullest co-operation between labor and management. It has been empirically tested
that poor ‘labor management relations’ do not encourage the workers to contribute
anything more than the minimum desirable to retain their jobs. Thus, participation of
workers in management is essential to increase industrial productivity.

5. Increased Commitment: An important prerequisite for forging greater

commitment is the individual’s involvement and opportunity to express himself.
Participation allows individuals to express themselves at the work place rather than
being absorbed into a complex system of rules, procedures and systems. If an
individual knows that he can express his opinion and ideas, a personal sense of
gratification and involvement takes place within him. This, in turn, fortifies his
identification with the organization resulting in greater commitment.
6. Industrial democracy: Participation helps to usher in an era of democracy in
industry. It is based on the principle of recognition of the human factor. It tends to
reduce class conflict between capital and labor. It also serves as a support to political
democracy.

7. Development of Individuals: Participation enhances individual creativity and

response to job challenges. Individuals are given an opportunity to direct their
initiative and creativity towards the objectives of the group. This facilitates individual
growth.

8. Less resistance to change: when changes are arbitrarily introduced from above

without explanation, subordinates tend to feel insecure and take counter measures
aimed at sabotage of innovations. But when they have participated in the decision
making process, they have had an opportunity to be heard. They know what to expect
and why. Their resistance to change is reduced

Objectives of Workers’ Participation in

Management:

The main objectives of workers’ participation in management include:

1. To establish Industrial Democracy.
2. To build the most dynamic Human Resources.
3. To satisfy the workers’ social and esteem needs.
4. To strengthen labour-management co-operation and thus maintain Industrial peace
and harmony.
5. To promote increased productivity for the advantage of the organization, workers and
the society at large.
6. Its psychological objective is to secure full recognition of the workers.