ACKNOWLEDGMENT

I express my humble thanks to Dr Vinod Chaudhary Sir, my subject teacher of

Labour Law And Industrial Relations under whose supervision the whole
project have been made and without whose teachings and insights this project
could not have been fructified.

I extend my heartiest thanks to my seniors for their insights into the concerned
final draft of the project and helping with me with everything I asked them.
The role of the library department is also noteworthy. All the staff members
helped me generously in getting the material and information I needed to
complete this project.

At last I extend my heartiest gratitude to the almighty for giving me the

strength to complete this project.

AMIT KUMAR MEENA

BA LLB 6TH SEM

22BAL50006
Table Of Contents
Introduction

Industrial dispute Act, 1947

Mechanism of Settlement disputes

Landmark judgments

Conclusion

Bibliography
Introduction
Disputes are always a drawback for any industry. A dispute arises for several
reasons, the most common being the relation between the labourers and their
wages. It is the conflict of interests between two parties that give rise to a
dispute. The parties involved in an industrial dispute are the employer and the
employee. Traditionally speaking, the employees have always been placed on
the lower ladder of the society by the employer presenting a dominating self-
being in the position of authority. This inequality that has been existing in the
industrial domain for a long time now requires settlement on the part of both
the employer and the employee having an equal opportunity to present their
wants.

An employee has the right to be provided with wages depending on the

amount of work he delivers. It is the responsibility on the part of the employer
to provide his employees with a reasonable amount of wages along with other
conditions that are necessary for a person to earn his livelihood. The founder
of the Australian system of arbitration and conciliation, Mr Justice Higgins had
correctly pointed out that the conflict between wage earners and the profit
creators will always be existing with us in our everyday life. It is therefore
always necessary to settle the disputes arising between two parties under the
Industrial Dispute Act,1947 in order to prevent the industry from facing loss or
sufferings.

All disputes arising in an industry cannot be resolved in the same manner and
therefore comes the concept of the mechanism of settling disputes under the
Industrial Dispute Act,1947. Some of the mechanisms that are commonly
utilized are adjudication, conciliation, an inquiry by the court of law etc. These
mechanisms help in settling the disputes by investigating the matter and in to
successfully carry out the process, available mechanisms are utilized.

It is to be remembered that industrial dispute is different from any other kind

of dispute on grounds that it is something more than just getting compensated
for the loss suffered. Rather it is a constant fight against oppression on the part
of those who are employed for providing welfare among other sections of the
society and not being subjected to similar kind of welfare due to the
authoritative rule on the part of the employer. It is correct that the disputes
settlement mechanisms can provide relief for a temporary period only, these
settlement mechanisms, if used effectively, can provide long term services
also. Therefore what is necessary is the correct application of the mechanisms
available for settling disputes.

Industrial Dispute Act,1947

The Industrial Dispute Act,1947 is an Act that was formulated to guarantee fair
and equal terms between the employer and the employee. The act aims to
settle the disputes that arise through negotiations. By doing so it promotes
industrial harmony and peace. The Industrial Dispute Act,1947 regulates the
labour law in India as far as the same relates to trade unions. Section2(k) of the
Act,1947 lays down the meaning of an industrial dispute. The parties that can
be involved in an industrial dispute includes employers and workmen, two
employees, employer and workmen. The provision also lays down the grounds
that need to be abided by in order to term a dispute as an industrial dispute.
These grounds are provided hereunder:

1. The mere difference of opinion will not constitute an industrial dispute

instead of a factum of dispute will.
2. The date of commencement of the dispute should be provided in writing
by the union otherwise the same reference will be declared invalid. It
was in the case of Union of Journalists v. The Hindu where the court
observed that for a dispute to be claimed under industrial dispute, the
same should be existing or apprehending on the date that has been
referred. Therefore what the court meant by these observations is that if
the demand by the employees were not brought before the
management under which they work, and similar demands were raised
during the time of the proceedings, the dispute will still be considered as
an industrial dispute and proceed further with settlement mechanisms.
Similar kind of view was made by the court in the case of Shambhu Nath
Goel v Bank of Baroda also.
3. The dispute should be such that it affects the well-being of the majority
of workmen and not a single work-man.
4. The dispute that has arisen should be in relation with an individual
workman or workmen in whom they being a body is or are interested in.
To maintain a cordial relation between the employer and the employee, the
Act lays down settlement mechanisms as well that can be of some help. The
authorities on whom the Act confers authority to carry out settlement and
investigation purposes for an industrial dispute are mentioned below:

1. Conciliation officer under Section 4 of the Act,1947

2. Works committee under Section 3 of the Act,1947
3. Labour court under Section 7 of the Act,1947
4. Boards of conciliation under Section 5 of the Act, 1947
5. Labour Tribunal under Section 7A of the Act, 1947
6. National tribunal under Section 7B of the Act, 1947

Mechanism of Settlement disputes under the Industrial

Dispute Act :
Certain machinery is existing under the methods of settling industrial disputes
which helps in regulating the settlement and handling of the dispute in a just
and fair manner for the parties involved in the dispute and thereby ensure or
guarantee a normalised situation under which the employer and the employee
can exist and work in a friendly manner which is required for the growth of the
industry. The common mechanisms for settlement of disputes under the
Industrial Dispute Act,1947 have been explained in detail below.

Conciliation and Mediation

One of the most familiar ways to carry out the settlement of disputes under
the Industrial Dispute Act,1947 is conciliation which is also well-known by the
name of mediation. It is not only restricted to India but this method of dispute
settlement is used all across the world. Conciliation is the procedure in which
there is an involvement of a third party who provides assistance to the parties
in dispute to carry out negotiation between them. The two types of machinery
that are available for executing the conciliation functions are:

1. By the conciliation officers who work in the department of labour

2. The Conciliation Board is a body of several members consisting of a
chairman, two to four members as the representatives of the employers
 and the employees. These members are to be appointed by the
government on parties recommendation.

Section 4 of the Industrial Dispute Act, 1947 lays down the function of a
conciliation officer which is to create a kindred atmosphere within the industry
which will help the parties to settle the disputes between them. This is a
function with an administrative nature and not a judicial one.

A conciliation officer is required to hold proceedings, carry out investigations

regarding the dispute in a fair manner to help the parties arrive at a
settlement. They are appointed to regulate settlement disputes for a specified
area either for a temporary time period or permanently. While Section 11 of
the Industrial Dispute Act, 1947 lays down the powers vested upon a
conciliation officer, Sections 12 and 13 are meant for dealing with the duties of
the conciliation officer.

After the government agrees that there is a failure in the report, to his
satisfaction he can send the matter to the Board of Conciliation or any other
adjudicating body to look after the same. If such a step is not preferred, then
the government directly communicates the matter to the parties involved in
the dispute. The usage of conciliation as a settlement dispute mechanism is
indeed effective as have been revealed by the statistical study. The parties
while being a part of the conciliation proceeding do not reveal the entire
dispute matter with the thought that if the proceedings are not effective
enough to settle the dispute then the same can be tried by other legal
remedies that are available also. It is when the conciliation officers are not able
to handle the disputed matter, the matter gets passed on to the tribunals. This
is also cited as a reason for the failure of conciliation.

Voluntary arbitration
Before dealing with the concept of voluntary arbitration as a whole, it is
preferred to refer them separately for a better understanding. Arbitration
means a procedure which involves a third party in the form of a single
arbitrator or a board of arbitrators who are assigned with the duty to resolve
the dispute between the parties. Voluntary symbolises self willingness and
consent. Therefore voluntary arbitration means that the parties who are
involved in the dispute willfully agree to the decision taken by the arbitrator or
the board of arbitrators without any outside compulsion.

Section 10A of the Industrial Dispute Act, 1947 provides the provision for
voluntary arbitration which in a real-world is completely carried out by
adjudication. Arbitration and adjudication have a very thin line of difference
between them. While in the former the judge is decided by the parties
involved in the dispute, whereas in the latter the judge is appointed by the
State.

The origin of voluntary arbitration in India dates back to the issue of plague
bonus in the Ahmedabad Textile Mills under the leadership of the father of the
nation, Mahatma Gandhi. To make voluntary arbitration compulsory, The
Trade Unions & Industrial Disputes (Amendment) Bill, 1988 was brought

in laying down restrictions on legal strikes by the employees. According to the

bill, legal strikes can be carried out by the parties only after either of the
parties has rejected the offer of arbitration that had been provided to the
parties to settle the dispute. Although several efforts have been put to effect
by the Indian government, voluntary arbitration still remains in shadows as
have been reflected by the statistics.

It was in the case of Gujarat Steel Tubes Ltd. v. Gujarat Steel Tubes Mazdoor
Sabha, the apex court inform judicial legislation vested on the arbitrator the
powers of a labour tribunal for cases of discharge of workmen as a form of
punishment. This provided the arbitrator with appellate jurisdiction using
which the arbitrator can oppose the decision of an employer regarding his
employees. These exceptional powers were conferred by the Supreme Court of
India on the arbitrator.

Adjudication
It is not that adjudication replaces conciliation totally but rather the matter is if
conciliation fails to settle the dispute between the parties in the industry,
adjudication takes charge in carrying out the job which the conciliation
mechanism was assigned to do. It is just another legal remedy that can be
adopted if the necessity arises. The ultimate remedy for resolving an industrial
dispute is by adjudication.
Adjudication can also be termed as the compulsory settlement of the industrial
dispute in concern by labour courts, industrial tribunals, and national tribunal
as provided by the Industrial Dispute Act,1947. The terms adjudication and
arbitration have minute differences if placed in our country.

It is on the government to decide whether to refer to the party or not before

proceeding with the adjudication mechanism. If the parties are involved by the
government then that type of adjudication will be referred to as voluntary
adjudication. Whereas if the government does not feel it to be necessary to
involve the parties in the adjudication mechanism then that kind of
adjudication will be called compulsory adjudication.

Adjudication of the industrial dispute will take place by a three-tier system

which will be inclusive of the following:

1. Labour court- The Industrial Dispute Act, 1947 under Section 7 provides for
the constitution of a labour court. The appropriate government in the form of
notification in the official gazette can lead to the constitution of a labour court
for resolving the disputes in an industry. The labour court consists of one
person who is an independent judge or a judge of the High court or the District
court. The judge can also be a former judge of the labour court itself with an
experience of about 5 years. The matters handled by the labour court are
provided in the second schedule of the Industrial Dispute Act, 1947 which
consists of:

 The legality in the order passed by the employer under the orders that
are standing
 The implications of the standing orders
 Granting of relief that should be available to the workmen in the
industry which has been dismissed from them.
 Withdrawal of any privilege that a workman is subjected to
 All matters other than that coming under the purview of the industrial
tribunal.

2. Industrial tribunal- The provision for the industrial tribunal is provided under
Section 7A of the Industrial Dispute Act, 1947. One or more industrial tribunals
can be set up by the government according to his desire with the courts being
provided with wider jurisdiction in comparison with the labour court. It is not
to be considered as a permanent body but body set up for temporary purpose
for hearing on an ad-hoc basis only. As the courts are having wider jurisdiction,
the issues that will be taken into consideration by the courts will also be large
in number. Broadly the issues handled by the industrial tribunal have been
listed below:

 Wages of the employee which included the mode of payment of wages

also
 Bonus and provident funds that are provided
 Working hours of the employees
 Rationalisation
 Leaves that are granted to the employees inclusive of the wages
received and the holidays provided to them
 Rules associated with the maintenance of discipline in the industry
among the employees.
 Any other matter which may be considered to be heard and discussed
necessarily.

3. National tribunal- A national tribunal is formed by the Central Government

by an official gazette for adjudication of the industrial disputes that are
considered to be of national importance. Two people according to the choice
of the government are appointed to the role of an assessor in the national
tribunal. If a dispute between two parties of an industry reaches the national
tribunal, then both the labour court and the industrial tribunal loses its
jurisdiction over the matter.

Court of inquiry
The remedy in the form of a court of inquiry was first provided by The Trade
Disputes Act, 1929 and was followed by the Industrial Dispute Act, 1947 also
under Section 6. This mechanism of settling disputes has been out of use in the
country now. As the government of India could not figure out the benefit from
this machinery in industrial dispute cases, the machinery has been eliminated
completely by The Trade Unions & Industrial Disputes (Amendment) Bill, 1988
and is no more in use.

Landmark judgments
In the case of Workmen of Hindustan Lever Ltd v. Hindustan Lever Ltd, the
court observed that for every industry there is a necessity to promote
harmonious construction of the wants of both the employer and the employee
of an industry for the industry and the labour force to grow and prosper in the
long-term. In order to achieve this objective, the court laid down that there is a
need for compulsory adjudication for resolving industrial disputes by means of
a forum where the parties can resort for arbitration to avoid any kind of
confrontation between them in the industry. The courts have repeatedly made
it clear that although a lot of powers have been vested over an appropriate
government, he cannot misuse such power in carrying out the procedure of
settlement of disputes.

In the case of The Govt of India Vs. National Tobacco Company, the court held
that the powers that have been vested in the appropriate government are
discretionary in nature and not mandatory. Therefore if in any particular case
the government carry out arbitrary actions which are contrary to the statute
under which he is supposed to function and has been refusing to refer the
dispute at hand to the tribunals or the labour court, then such grounds will be
enough to file a writ petition against the government under Article 226 of the
Constitution of India. From this case, it can be observed that the Act provides
with no scope to misuse the powers that have been vested to any
administrative body that can directly affect the dispute that is already existing
and can further accelerate it as well creating more problems.

Adding more to this idea of restricting the use of arbitrary power, the court in
the case of Hochtief Gammon v. the State of Orissa was of the opinion that the
courts will have the authority to view that the action taken by the executive is
not unlawful and unfair in nature and in this process the courts’ vests the duty
of ensuring that the relevant matters of the dispute have been taken into
concern in a large away while making a decision on the appropriate
government.

It was in the well-known case of Mathura Refinery Mazdoor Sangh v. Union of

India, the Supreme Court of India gave importance to the tribunals to deal with
the industrial dispute and also directed the government to take consultancy
from the tribunals itself. Thus in this way, the court separated the mechanism
of settlement dispute under the Industrial Dispute Act,1947 as a separate
entity altogether.

In another case named United Bleachers (P) Ltd. v. LC, the High Court at
Madras was of the view that if any kind of delay happens on the part of the
appropriate government to make a reference, then that will not be a valid
ground to decline the relief that is to be granted to the labourers who are in
the dispute and have relatively suffered from the same already. If there is a
denial of the relief on this very ground then the same will be referred to as an
unfair labour practice and thereby will be unlawful. Thus the judgments that
are discussed above reflects that whatever be the dispute, the courts always
intend to settle it providing justice to both the parties involved in the dispute.

Conclusion
Despite a lot of loopholes in the system, the interference of the Supreme Court
and the High Courts have indeed been helpful in regulating the statute
governing the industrial dispute. Settlement disputes under the Industrial
Dispute Act, 1947 is indeed a way in which the chaos associated with industry
can be removed. As India slowly develops with the introduction of several
industries, it has become necessary to ensure the proper functioning of the
industries in order to help develop the country economically. For the same the
Industries Dispute Act, 1947 plays an essential role by not only providing the
provisions as to how to regulate the working of an industry but also laying
down settlement mechanisms that can help resolve disputes between the
employee and employer. Coordination of both can help industry run smoothly
and effectively. Some of the ways in which settlement machinery can function
effectively are listed hereunder:

 The mechanism of conciliation should be regulated by the officers who

are experienced in the field and are acknowledged with the issues that
are majorly faced by industrial workers. This mechanism should also not
be a subject-matter for the political and administrative influences in
order to prevent the mechanism from being used in a wrong way which
can affect the industrial dispute that is already at hand.
  Industrial Relations Commissions should be set up at both Central and
provincial levels according to the guidelines of the National Commission
of Labours in order to strengthen the framework of the available
adjudicatory machinery.
 The arbitration procedure should be just and fair like all other court
proceedings so that the decision taken as a conclusion to the industrial
dispute that has arisen should be able to satisfy both the parties
involved in the dispute.
 Government interference from any kind of industrial dispute should be
avoided unless urgently required in order to deal with the matter
effectively and independently without much influence as has been
mentioned earlier as well. The arbitrators are supposed to take
independent decisions so that the employers and the employees are
treated equally and fairly.

Bibliography
 https://www.legalserviceindia.com/legal/article-942-industrial-disputes-
act-1947
 http://hdl.handle.net/10603/95282
 https://blog.ipleaders.in/mechanism-settlement-disputes-industrial-
dispute-act/