ALTERNATIVE DISPUTE RESOLUTION

& HUMAN RESOURCE MANAGEMENT

 Dispute resolution processes are the methods or
techniques that an enterprise uses to resolve any
dispute that occurs in that organization,. Ordinarily,
the dispute resolution processes are broadly divided
into two major types −

DISPUTE • Adjudicative processes − Process like litigation or

arbitration, in which a judge or arbitrator is involved
RESOLUTI and determines the result on the basis of facts and
proofs presented.
ON • Consensual processes − Process like collaborative
law, mediation, conciliation, or negotiation, in which
the parties attempt to reach to a settlement through
mutual understanding.
Dispute Resolution is an essential requirement in
national as well as international HRM.
• Alternative Dispute Resolution (ADR) is an
excellent substitute for traditional methods
of workplace grievance resolution.
• ADR is cost-effective, time bound, and less
acrimonious mode of resolving disputes
including employment dispute.
• ADR is generally classified into at least four
types: negotiation, mediation, conciliation,
and arbitration.
 Types of ADR
Freestanding

Court Annexed

Non-Binding

In-Formal

Binding

Formal

Basic

Hybrid (ADR)
 Seven Elements of Negotiation
 Interests: What do the parties want?
 Options: What are likely areas of agreement?
 Alternatives: What if we don’t agree?
 Legitimacy: How persuasive is each party?
 Communication: Are both parties willing to discuss and
listen?
 Relationship: Are both parties ready to establish
operational relationship?
 Commitment: What’s the structure of commitment from
both parties.
 Disputes unsuitable for Mediation

circumstances where both parties are not willing to attend mediation

disputes where there is no continuing relationship between the parties

disputes where there is evidence of a gross imbalance of power

where there are overwhelming emotions involved

where there is a history of broken promises

 Conciliation

Conciliation involves a third part, who may make suggestions to the parties.

The decisions are not binding

 Conciliation

 Conciliation is like mediation except for the active role of the third
party (conciliator) in putting forward suggestions of compromise.
• It’s structured to bring disputing parties to acceptable agreement
through concessions.
• The Industrial Law in India makes it mandatory and voluntary
conciliation in certain circumstances.
• Voluntary Circumstances: Individual disputes
• Mandatory Circumstances: Strikes or threat to strike etc.
 Conciliation Officer
• The appropriate government may appoint one or more conciliation officers as it
thinks fit.
• A conciliation officer may be appointed for a specified area or for one or more
specified industries.
• The appointment may be made either permanently or for a limited period.
• The jurisdiction, power and other matters in respect of the conciliation officer shall
be published in the official Gazette.
• All conciliation officers shall be deemed to be public servants within the meaning of
section 21 of the Indian Penal Code (45 of 1860).
• A conciliation officer may enforce the attendance of any person for the purpose of
examination of such person or call for and inspect any document which he has
ground for considering to be relevant to the industrial dispute or to be necessary for
the purpose of verifying the implementation of any award or carrying out any other
duty imposed on him under this Act, and for the aforesaid purposes, the conciliation
officer shall have the same powers as are vested in a Civil Court under the Code of
Civil Procedure, 1908 (5 of 1908), in respect of enforcing the attendance of any
person and examining him or of compelling the production of documents.
 Duties of CO
• Where an industrial dispute exists or is apprehended, the conciliation
officer may, or where the dispute relates to a public utility service and a
notice under section 22 has been given, shall, hold conciliation
proceedings in the prescribed manner.
• The conciliation officer shall, for the purpose of bringing about a settlement of the
dispute, without delay, investigate the dispute and all matters affecting the merits and
the right settlement thereof and may do all such things as he thinks fit for the purpose
of inducing the parties to come to a fair and amicable settlement of the dispute.
 Conciliation Proceedings

• Any proceedings held by a conciliation officer Proceedings should be

conducted in a cordial atmosphere and opportunities should be provided
to the both parties to present their views
• Conciliation proceedings are deemed to have commenced on the date the
C.O. receives the notice of strike or lock –out under Sec.22 of ID Act
1947 in public utility services of if no notice is received, the C.O. must
give formal intimation in writing his intention to commence Con.
Proceedings with effect of date.
• However, CO has got no statutory power to make parties to settle
disputes through conciliation.
 CONCEPT
• Arbitration is a means of securing an award on a conflict issue by
reference to a third party. It is a process in which a dispute is submitted
to an impartial outsider who decides or takes a decision which is usually
binding on both the parties.
• It is a process where there is a hearing and a determination of a cause
between parties in controversy by a person or persons chosen by them or
appointed under a statutory provision.
• The parties submit their disputes/issues and are bound by the award of an
arbitrator in relation to the matter which is in dispute between them.
 BASICS
• The arbitrator enforces his own point of view on the contending parties
and the opinions of the participants are not given any predominance.
• Arbitration is a judicial process
• The award of the arbitrator is binding and rests on equity and
justice, i.e., there is no scope for compromise
• Arbitration is best suited for the settlement of contractual
rights, whereas mediation is suited to the adjustment of disputes
over interests.
 Advantages of Arbitration
• Since it is established by the parties themselves, arbitration has the
advantage of bringing the dispute settlement procedure down to the level
of the parties to the dispute. Workers and management tend to have
greater faith and confidence in a settlement machinery which is in effect
their own.
• Since arbitration is established by agreement, it is more flexible
than other procedures and can be adjusted to the views, desires
and experience of the parties and to the circumstances
obtaining in the undertaking or industry
• This procedure, operating at the level closest to the parties to the disputes, has the
advantage of enabling the arbitrators to acquire a much greater familiarity with the
characteristics of the particular industry or undertaking than most courts or tribunals.
• The procedure is relatively expeditious when compared to that in ordinary courts or
labour tribunals. It cuts down delays and results in a prompt settlement of
differences.
It is informal in character because the disputes are handled by the parties
themselves, often without recourse to lawyers. Arbitration, therefore, is a
less expensive than other procedures.
• Awards are capable of implementation without any grudge on
the part of both the parties of the dispute and do not lead to
further chances of litigation.
• Since arbitration is based on the consent of both the parties, it
helps building up a sound base for healthy industrial relations,
mutual understanding and co-operation.'
• "It is popular because it is suitable and compelling. It is far
better than a costly work stoppage, even though not wholly
satisfactory from either parties' point of views."
 Types of Arbitration
• Voluntary arbitration : implies that the two contending parties,
unable to compose their differences by themselves or with the
help of the mediator or conciliator, agree to submit the
conflict/dispute to an impartial authority, whose decision they
are ready to accept.
• In other words, under voluntary arbitration, the parties to the
dispute can, and do, themselves refer voluntarily any dispute to
arbitration before it is referred for adjudication.
 Essentials of voluntary arbitration
• The voluntary submission of dispute to an arbitrator
• The subsequent attendance of witnesses and investigations
• The enforcement of an award may not be necessary and
binding because there is no compulsion. But, generally, the
acceptance of arbitration implies the acceptance of its award
be it favorable or unfavorable; and
• Voluntary arbitration may be specially needed for disputes
arising under agreements /contracts
 Compulsory Arbitration
• Compulsory arbitration, is one where the parties are required to accept
arbitration without any willingness on their part. When one of the parties
to an industrial dispute feels aggrieved by an act of the other, it may
apply to the appropriate government to refer the dispute to an
adjudication machinery.
• Such reference of a dispute is known as 'compulsory' or 'involuntary' reference,
because reference in such circumstances does not depend on the sweet will of both
the contending parties or any party to the dispute. It is entirely the discretion of the
appropriate government based on the question of existing dispute, or on the
apprehension that an industrial dispute will emerge in a particular establishment.
 Essentials of Compulsory Arbitration
• The parties fail to arrive at a settlement by a voluntary method; or
• when there 'is a national emergency which requires that the wheels of
production should not be obstructed by frequent work-stoppages; or
• the country is passing through grave economic crisis; or
• there is a grave public dissatisfaction with the existing industrial
relations; or
• industries of strategic importance are involved; or
• industries of strategic importance are
• involved; or
• parties are ill balanced, i.e., where the unions are weak, ill-
organized, and powerless and the means of production are in
the hands of the capitalists who are well-organized and
powerful; or
• public interest and the working conditions have to be
safeguarded and regulated by the state.
 Reference of Dispute to Arbitration
Under Industrial Disputes Act, 1947
Under the Industrial Disputes Act, 1947, a dispute may be referred to arbitration under
the following conditions:
• An industrial dispute exists or is apprehended in an establishment;
• The employer and the workers agree, in writing, to refer the dispute to arbitration;
• The arbitration agreement is in the prescribed form and signed by the parties to it in the prescribed
manner;
• The agreement must be accompanied by the consent, in writing, of the arbitrator or arbitrators;
• The dispute must be referred to arbitration at any time before it has been referred to a labour court or tribunal or a
national tribunal;
• The reference must be to the person or persons specified in the arbitration agreement to act as
arbitrator/arbitrators;
• The arbitration agreement must set forth the issue/issues to be decided by the arbitration procedure and a copy of
the agreement is forwarded to the government and the conciliation officer.
Discourage litigation. Persuade your neighbors to
compromise whenever you can. Point out to them how
the nominal winner is often the real loser — in fees,
and expenses, and waste of time. As a peace-maker the
lawyer has a superior opportunity of being a good man.
There will still be business enough.”
– Abraham Lincoln