When a dispute has arisen i.e., it could not be prevented on voluntary basis, the Industrial Disputes Act 1947 provides several provisions for settling the disputes.
Dispute settlement machinery has been evolved under the Act. Provision made for the settlement of industrial disputes under this Act is called “Machinery of Settlement of Industrial Disputes”.
According to the Industrial Disputes Act, 1947, “Industrial dispute means any dispute or difference between employers and employees or between employers and workmen or between workmen and workmen, which is connected with the employment or non-employment of the terms of employment or with the conditions of work of any person”.
Some of the provisions involved in the machinery for the settlement of industrial disputes are:- 1. Works Committee 2. Conciliation Officers 3. Boards of Conciliation 4. Courts of Inquiry 5. Labour Courts 6. Industrial Tribunals 7. National Tribunals 8. Grievance Settlement Authority 9. Voluntary Arbitration 10. Adjudication.
Settlement of Industrial Disputes: Authorities, Settlements Bodies and Provisions as per Industrial Disputes Act, 1947
Settlement of Industrial Disputes – 7 Important Authorities Involved for the Settlement of Industrial Disputes
The Industrial Disputes Act, 1947 provides for the setting up of the following authorities for the settlement of industrial disputes.
1. Works Committee:
(1) In the case of any industrial establishment in which one hundred or more workmen are employed or have been employed on any day in the preceding twelve months, the appropriate Government may by general or special order require the employer to constitute in the prescribed manner a Works Committee consisting of representatives of employers and workmen engaged in the establishment so however that the number of representatives of workmen on the Committee shall not be less than the number of representatives of the employer. The representatives of the workmen shall be chosen in the prescribed manner from among the workmen engaged in the establishment and in consultation with their trade union, if any, registered under the Indian Trade Unions Act, 1926.
(2) It shall be the duty of the Works Committee to promote measures for securing and preserving amity and good relations between the employer and workmen and, to that end, to comment upon matters of their common interest or concern and endeavour to compose any material difference of opinion in respect of such matters.
2. Conciliation Officers:
(1) The appropriate Government may, by notification in the Official Gazette, appoint such number of persons as it thinks fit, to be conciliation officers, charged with the duty of mediating in and promoting the settlement of industrial disputes.
(2) A conciliation officer may be appointed for a specified area or for specified industries in a specified area or for one or more specified industries and either permanently or for a limited period.
3. Boards of Conciliation:
(1) The appropriate Government may, as occasion arises by notification in the Official Gazette constitute a Board of Conciliation for promoting the settlement of an industrial dispute.
(2) A Board shall consist of a chairman and two or four other members, as the appropriate Government thinks fit.
(3) The chairman shall be an independent person and the other members shall be persons appointed in equal numbers to represent the parties to the dispute and any person appointed to represent a party shall be appointed on the recommendation of that party-
Provided that, if any party fails to make a recommendation as aforesaid within the prescribed time, the appropriate Government shall appoint such persons as it thinks fit to represent that party.
(4) A Board, having the prescribed quorum, may act notwithstanding the absence of the chairman or any of its members or any vacancy in its number- Provided that if the appropriate Government notifies the Board that the services of the chairman or of any other member have ceased to be available, the Board shall not act until a new chairman or member, as the case may be, has been appointed.
4. Courts of Inquiry:
(1) The appropriate Government may as occasion arises by notification in the Official Gazette constitute a Court of Inquiry for inquiring into any matter appearing to be connected with or relevant to an industrial dispute.
(2) A Court may consist of one independent person or of such number of independent persons as the appropriate Government may think fit and where a Court consists of two or more members, one of them shall be appointed as the chairman.
(3) A Court, having the prescribed quorum, may act notwithstanding the absence of the chairman or any of its members or any vacancy in its number:
Provided that, if the appropriate Government notifies the Court that the services of the chairman have ceased to be available, the Court shall not act until a new chairman has been appointed.
5. Labour Courts:
(1) The appropriate Government may, by notification in the Official Gazette, constitute one or more Labour Courts for the adjudication of industrial disputes relating to any matter specified in the Second Schedule and for performing such other functions as may be assigned to them under this Act.
(2) A Labour Court shall consist of one person only to be appointed by the appropriate Government.
(3) A person shall not be qualified for appointment as the presiding officer of a Labour Court, unless he is, or has been, a Judge of a High Court; or he has, for a period of not less than three years, been a District Judge or an Additional District Judge; or he has held any judicial office in India for not less than seven years; or he has been the presiding officer of a Labour Court constituted under any Provincial Act or State Act for not less than five years.
(1) The appropriate Government may, by notification in the Official Gazette, constitute one or more Industrial Tribunals for the adjudication of industrial disputes relating to any matter, whether specified in the Second Schedule or the Third Schedule and for performing such other functions as may be assigned to them under this Act.
(2) A Tribunal shall consist of one person only to be appointed by the appropriate Government.
(3) A person shall not be qualified for appointment as the presiding officer of a Tribunal unless he is, or has been, a Judge of a High Court; or he has, for a period of not less than three-years, been a District Judge or an Additional District Judge;
(4) The appropriate Government may, if it so thinks fit, appoint two persons as assessors to advise the Tribunal in the proceeding before it.
7. National Tribunals:
(1) The Central Government may, by notification in the Official Gazette, constitute one or more National Industrial Tribunals for the adjudication of industrial disputes which, in the opinion of the Central Government, involve questions of national importance or are of such a nature that industrial establishments situated in more than one State are likely to be interested in, or affected by, such disputes.
(2) A National Tribunal shall consist of one person only to be appointed by the Central Government.
(3) A person shall not be qualified for appointment as the presiding officer of a National Tribunal unless he is, or has been, a judge of a High Court.
(4) The Central Government may, if it so thinks fit, appoint two persons as assessors to advise the National Tribunal in the proceeding before it.
Settlement of Industrial Disputes as per the Provisions of Industrial Disputes Act 1947
When a dispute has arisen i.e., it could not be prevented on voluntary basis, the Industrial Disputes Act 1947 provides several provisions for settling the disputes. Dispute settlement machinery has been evolved under the Act.
The machinery for settlement of disputes consists of several bodies which are:
(1) Establishment of Works Committees:
In every industrial establishment employing 100 or more workers, it is compulsory to establish a works committee at the plant level to promote the measures for securing and preserving unity and good relations between the parties. There are equal number of representatives of workers and employer on the committee.
The main function of the works of committee is to remove causes of friction between the two parties which concern the factory life of workers. No mention of functions of works committee have been made in the Act but however in 1960 a tripartite committee of Indian Labour Conference prepared two lists of functions one for works to be dealt with and the other for works not to be dealt with by the works committees.
The works committee is to discuss such problems relating to grievances, complaints, matter of discipline, welfare problems such as health, safety, training, education and other personal problems which vitally affect the interests of the workers in general. The functions of these committees are purely of advisory character and no legal obligation is imposed upon employers to carry out the decisions arrived at in the meeting of works committee.
(2) Grievance Settlement Authority:
The Industrial Disputes (Amendment) Act 1982 has provided for the setting up of a Grievance Settlement Authority and for reference of certain individual disputes to such authorities. Any employer employing one hundred or more workers on any one day in the preceding twelve months is required to provide for a Grievance Settlement Authority for settlement of industrial dispute relating to an individual. Where such dispute arises, the concerned worker or the trade union of which he is a member may refer the dispute to the Authority for settlement.
(3) Conciliation Officer:
The appointment of conciliation officer is made by the Central or State Government for a particular region or industries in the state. The main duty of these officers is to bring the two parties together and help them resolve their differences. They can do everything to settle the dispute between the two parties amicably. He is bound to take decision within 14 days or such period as extended by the State Government from the date of registration of dispute.
If the dispute is settled through his good offices and an agreement is reached, he should send a report to the appropriate Government along with a memorandum of settlement signed by the parties to the dispute. In case, the dispute is not settled he should inform the appropriate Government about his failure, steps taken and the reasons for not being successful.
(4) Conciliation Board:
In case, the conciliation officer fails to resolve the dispute, the Government appoints a board of conciliation on adhoc basis for a particular dispute consisting of a Chairman and two to four persons representing the employer and the employees to bring the parties of disputes to sit together and thrash out their differences as referred to by the Government. The board reports the Government about the success or failure of its efforts, steps taken and reasons for its failure to bring about a settlement within 2 months from the date of reference of the dispute.
(5) Court of Inquiry:
Where an industrial dispute remains unresolved by the efforts conciliation officer and the board of conciliation, the matter is referred to a court of inquiry. The court may consist of one or more independent persons. It will investigate the whole dispute and submit its report to the Government on the matters referred to it ordinarily within 6 months from the date of commencement of inquiry.
If settlement is not arrived at by the efforts of the above machinery, three-tier machinery for compulsory adjudication is provided under the Act. There are three types of semi-judicial bodies, i.e., labour courts, industrial tribunals and national tribunals.
(6) Labour Courts:
Such courts have been set up by the State Governments to go into the disputed orders of the employers dismissal, discharge and suspensions of employees by the management, legality or otherwise of any order passed by an employer under the standing orders, withdrawal of any concession or privilege, legality or otherwise or any strike or lock-out etc. These courts will award decision and send report to the Government.
(7) Industrial Tribunals:
The State Government has been empowered to appoint as many industrial tribunals as it thinks proper, for the adjudication of disputes selecting to wages, hours of work and rest, intervals, leave with pay, holidays, compensatory and other allowances, bonus, profit sharing, provident fund, gratuity, discipline, retrenchments closure of establishment etc. The tribunal will consist of a person of the rank of a high court judge. The adjudication of these tribunals is binding on both the parties.
(8) National Tribunal:
Such tribunals are set up by the Central Government for the adjudication of industrial dispute which involve questions of national importance or which affect industrial establishments situated in more than one state. It gives decisions on matters referred to it by the Central Government.
If any matter is referred to the National Tribunal by the Central Government the labour courts and industrial courts are barred from entertaining such disputes and if any such dispute is pending before labour courts or tribunals, shall be deemed to be quashed.
(i) Restriction of Lay off and Retrenchment:
The Industrial Disputes (Amendment) Act 1984 has provided that no industrial establishment employing 300 or more workers can lie off or retrench a worker without the prior permission of the Government at least three months before such lay off or retrenchment.
(ii) Restrictions on Strikes and Lock-Outs:
The Act prohibits strikes and lock-outs in public utilities without sufficient notice as specified in the Act. The Act also prohibits strikes and lock-outs during pendency of proceedings relating to the dispute before the concerned authority and certain specified period after that, further prohibition will also apply during the period in which a settlement or award is in operation in respect of any of the matters covered by the settlement or award.
(iii) Essential Services Maintenance (Ordinance), 1981:
The President of India has promulgated an ordinance on 26th July 1981, declaring a ban on strikes in essential services. These essential services are Railways, Post and Telegraph, Telephone, Ports, Air Ports, Banks, units producing or refining petroleum products public conservancy services, defence establishments and hospitals etc. The Government has power to declare a service as essential by notification.
Thus, the Government has provided machinery for prevention and settlement of industrial disputes and also made certain other provisions to maintain industrial harmony.
Settlement of Industrial Disputes – Enquiry into the Matter of Disputes and Settlement by Court (With Procedure, Powers and Duties of Authorities)
Provision made for the settlement of industrial disputes under this Act is called “Machinery of Settlement of Industrial Disputes”.
It is divided into two parts:
A. Enquiry into the Matter of Disputes
B. Settlement by Court
A. Enquiry into the Matter of Disputes:
Efforts are made to find out the causes of industrial disputes.
Main provisions in this respect are as under:
(1) Works Committees – Sec-3:
It has been provided in the Act that every such industrial unit as employs or has been employing 100 or more workers for the last 12 months, will form compulsorily work committees. These will be represented by equal number of members of both sides. The function of the committee is to work for the establishment of good relations between the employers and the workers.
In addition, these will also find out problems arising from day to day. If there is discontentment among the workers, the committee must know its causes. In case of any dispute, it must strive for an amicable settlement. It is an important objective for the setting up of the Works Committees.
(2) Conciliation Officers – Sec-4:
The act has a provision for the appointment of a conciliation officer to act as a mediator. Conciliation officer can be appointed in a particular area or unit for a certain period. He is supposed to bring round both the parties to the settlement table.
(3) Conciliation Board – Sec-5:
The Act also provides for the appointment of Conciliation Board for the settlement of important and complicated matters. The Board will also be represented by equal number of members of both the parties. Ordinarily, Conciliation Boards are set up only when Works Committees or Conciliation Officers fail in their attempt to get the dispute resolved.
(4) Court of Enquiry – Sec-6:
The Act empowers the concerned government to appoint Court of Enquiry, if it so desires, to enquire into the causes of industrial dispute. The personnel of the Court of Enquiry are independent persons. The main function of the Court of Enquiry is to find out the causes of industrial disputes. The court has to submit its Enquiry Report to the concerned government within six months.
Main objectives of the above mentioned provisions are to enquire into the causes of dispute and to settle the same by mutual negotiations. But when despite these no success is achieved, then the next steps to settle the disputes have been provided by the Act as under –
(1) Labour Court – Sec-7:
Under this provision, one person alone is appointed to settle the dispute. His qualifications have been clearly mentioned in the Act and so also his jurisdiction. Labour Court is empowered to hear matters relating to industrial disputes and give its judgement.
(2) Industrial Tribunal – Sec.7-A:
It is another significant provision to settle industrial dispute. Under it also, only one person is appointed with necessary eligibility conditions as mentioned in the Act. If the government deems it necessary, it may appoint two assessors to assist the Industrial Tribunal. These Tribunals are appointed for the settlement of such disputes as are given in schedule 2 and 3 of the Act.
(3) National Tribunal – Sec-8:
Such matters as are considered to be of national importance are referred to National Tribunal for adjudication. Central government appoints National Tribunal in those cases which affect industrial establishments of more than one state. After completing its proceedings it submits award within a specified period of time. The award is published by the government within 30 days of its submission. Award so published is considered final and no objection can be raised against it.
(4) Arbitration – Sec.10-A:
This provision is made to get any disputable matter settled by an impartial person. Written consent of the parties to the dispute is a pre-condition. Under it, equal number of arbitrators are appointed by both the parties, or if they so desire, there may be only one arbitrator.
Procedure, Powers and Duties of Authorities:
Under Industrial Disputes Act, machinery for settlement of disputes has been provided. It comprises of Conciliation Officer, Conciliation Board, Labour Court, Industrial Tribunal and National Tribunal. Under Section 11 of the Act, there is a mention of the duties and powers of all these officers, boards and tribunals.
Their powers are given under the following titles:
(1) Right of Entry:
Conciliation Officer or Board has full right of entry into the organisation for conducting enquiry.
(2) Right of Civil Court:
Conciliation Officer or Board, automatically enjoy full rights of civil court in the following matters:
(i) Right of access to all things concerned with this dispute.
(ii) Right to issue orders for examining the witnesses.
(iii) Right to take necessary action in other matters.
(3) Checking of Documents:
Conciliation Officer or Board has the right to examine all the documents necessary for conducting enquiry and he can compel the organisation to produce the same before him.
(4) Appointment of Assessors:
Labour Courts, Industrial Tribunals and National Tribunals have the right to appoint Assessors to assist them in matters entrusted to them.
(5) Public Servant:
All these officers and Tribunals are treated as public servants and enjoy the rights of public servants as mentioned in Sec-21 of Indian Penal Code (IPC).
(6) Judicial Proceedings:
The proceedings and enquiries conducted by these officers and Tribunals are treated as judicial proceedings in terms of Indian Penal Code 1898.
(7) Recognition as Civil Court:
All courts and tribunals appointed under Industrial Disputes Act will be treated as civil courts in terms of Section 480, 482 and 484 of Indian Penal Code.
(8) Rights Regarding Discharge or Dismissal of Workers:
Courts and Tribunals have been given special rights in respect of matters relating to discharge or dismissal.
Main rights are as under:
(i) Right to cancel the disputed order.
(ii) Right to re-employ the workers.
(iii) Right to penalize in any other manner.
Duties of Conciliation Officer:
Conciliation officer has the following main duties:
(i) It is only after conducting enquiry into the dispute that he initiates his proceedings.
(ii) He will enquire into all aspects of the dispute, deliberate on them and will make attempt at settling the dispute in a peaceful manner.
(iii) He will submit his report on the proceedings of the enquiry or on settlement proceedings to the concerned government.
(iv) If in spite of all efforts, he fails in resolving the dispute, he submits his report accordingly to the concerned government at the earliest. It will be an exhaustive report detailing the enquiry and all efforts made.
(v) Conciliation Officer is required to submit his report to the concerned government within 14 days or less than period. This time-limit cannot be extended without the written consent of the conciliation officer and the concerned parties.
Under Sec-13 of the Act, Conciliation Board is bound to discharge the following duties:
(i) Conciliation Board will make thorough enquiry into the dispute referred to it and encourage the parties concerned to agree to a settlement.
(ii) If as a result of Board’s efforts settlement or partial settlement takes place, it will submit the report accordingly to the concerned government.
(iii) If in spite of all the efforts of the Board, no settlement takes place, the Board will report accordingly to the concerned government. It will contain information about all the facts that came to light during the course of enquiry, efforts made by it and the causes of failure of settlement.
(iv) Conciliation Board is required to submit its report to the government within two months of the dispute referred to it. If the government so desires, it may extend the time-limit with the consent of the Board and concerned parties.
It is the duty of the Labour Court to hear the disputes referred to it and give its judgement. It will submit report on the proceedings of the matter referred to it to the concerned government within the specified period.
Duties of Industrial and National Tribunal:
Functioning of these tribunals is like that of the courts. These tribunals examine the matter in detail and take necessary measures to settle the same. They submit their report to the concerned government within the prescribed time limit.
(i) Written Report prepared by the Conciliation Officer, Board or Labour court should bear the signatures of all the members. If any member does not agree on any issue with the other members, he can give his dissenting note on the report.
(ii) Similarly, Labour Court and other Tribunals should also submit written report on their judgement. It must bear the signature of the presiding officer.
Report submitted by Conciliation Officer, Conciliation Board, Labour Court, Industrial and National Tribunals is published by the concerned government within 30 days of its receipt. It covers all parts of the report. After the report so published, the judgement is treated as final; (barring some exceptions and circumstances) and the same cannot be preferred to any other court of law.
Parties on Whom Settlement are binding:
(i) Any settlement arrived at between the employers and the workers is binding on both the parties.
(ii) Any award given by Labour Court, Industrial Tribunal or National Tribunal, is also binding on all the parties to the dispute. If an heir has succeeded to the position of the employer, he too is bound to execute the award.
Settlement of Industrial Disputes – Conciliation, Voluntary Arbitration and Adjudication
The Industrial Disputes Act, 1947, provides a legalistic way of setting disputes, where the employer and the unions fail to reach an agreement bilaterally.
The provisions of this judicial machinery may be listed thus:
Conciliation is a process by which representatives of workers and employers are brought together before a third person or a group of persons with a view to persuade them to come to a mutually satisfying agreement. The objective of this method is to settle disputes quickly and prevent prolonged work stoppages if they have already occurred.
The essential hallmarks of this approach are:
i. The conciliator tries to bridge the gulf between the parties, if possible.
ii. If he does not fully succeed, he tries to reduce the differences to the extent possible. He acts as a conduit through which messages are passed from one side to the other, coupled with his own interpretations facilitating the understanding of disputing parties. To the extent possible, he tries to ‘clear the fog’ surrounding the issue.
iii. He persuades parties to take a fresh look at the whole issue, through a process of give and take and explore the possibility of reaching a consensus.
iv. He only advances possible lines of solution for consideration by the disputants. He never tries to force the parties to accept his viewpoint. He never offers judgment on the issues. If parties feel that the suggestions offered by the conciliator are acceptable, they may strike a deal.
v. The conciliator need not follow the same path in each case. The process of conciliation, therefore, has a certain amount of flexibility and informality built around it.
The conciliation machinery in India consists of the following:
According to the Industrial Disputes Act, 1947, the Central and State governments can appoint a conciliation officer to mediate in all disputes brought to his notice. The officer enjoys the powers of a civil court. He can call and witness disputing parties on oath and interpret the facts of the case.
He is expected to give judgment within 14 days of the commencement of the conciliation proceedings. His judgment is binding on all the parties to the dispute. The conciliation officer has a lot of discretion over the ways and means to be followed to bring about a settlement between the disputants. He “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 disputes”.
When the conciliation officer fails to resolve the disputes between the parties, the government can appoint a Board of Conciliation. The Board of Conciliation is not a permanent institution like the conciliation officer. It is an ad hoc, tripartite body having the powers of a civil court, created for a specific dispute. It consists of a Chairman and two or four other members nominated in equal numbers by the parties to the dispute.
The Chairman who is appointed by the government should not be connected with the dispute or with any industry directly affected by such dispute. The board, it should be remembered, cannot admit a dispute voluntarily. It can act only when the dispute is referred to it by the Government.
The board conducts conciliation proceedings in the same way as conducted by a conciliation officer. The board, however, is expected to submit its report within two months of the date on which the dispute was referred to it. The Boards of Conciliation are rarely constituted by the government these days. In actual practice, settling disputes through a conciliation officer was found to be more flexible when compared to the Board of Conciliation.
In case the conciliation proceedings fail to resolve a dispute, a Court of Enquiry is constituted by the government to investigate the dispute and submit the report within six months. It is merely a fact finding body and its findings are not binding on the parties to the dispute.
How is the Conciliation Machinery Working?
The conciliation machinery has not proved its worth in the country so far. The reason is quite simple, very few cases are referred for conciliation. The few cases that are referred to it remain untenable as they fail to meet the legal stipulations. In some cases, disputes are filed, only to be withdrawn later on. A large number of cases remain pending, as the disputing parties do not supply relevant information initially.
The heavy work pressures of the officers also come in the way of clearing cases within the 14 days’ time period. Conciliation, as pointed out by the National Commission on Labour, is only treated as a first hurdle by the parties, who prefer to go to the next stage without showing any interest to settle the case(s) quickly. As things stand now, both labour and management do not seem to repose their faith in the efficacy of the machinery created by the Government.
2. Voluntary Arbitration:
When conciliation proceedings fail to settle the dispute, the conciliation officer may persuade the conflicting parties to voluntarily refer the dispute to a third party known as Arbitrator, appointed by the parties themselves. The arbitrator listens to the viewpoints of both parties and delivers an award or judgment on the dispute. He, however, does not enjoy judicial powers. The arbitrator submits his judgment on the dispute to the government.
Thereafter, the government publishes the award within 30 days of its submission. The award becomes enforceable after 30 days of its publication. The arbitration award is binding on all the parties to the agreement and all other parties summoned to appear in the proceedings as parties to dispute.
Before delivering the judgment, the arbitrator is expected to follow due procedure of giving notice to parties, giving a fair hearing, relying upon all available evidences and records and following the principles of natural justice.
Despite the best efforts of government to give a place of prominence to arbitration, it has not been a resounding success in India. The existing data on disputes settlement machinery shows that not even one per cent of the disputes reported were referred to arbitration. According to the National Commission on Labour, employers have not welcomed the step whole heartedly.
The main hurdles that came in the way were:
I. Dearth of suitable arbitrators enjoying the confidence of disputing parties.
II. The complicated procedure to be followed in voluntary arbitration.
III. The payment of arbitration fees. Unions can seldom afford to pay such fees equally with management.
IV. The absence of recognised unions which could bind the workers to a common agreement.
V. Easy availability of adjudication in case of failure of conciliation or negotiation.
VI. Absence of a legal remedy for appeal against the award given by the arbitrator.
With a view to promote voluntary arbitration, the Government has appointed a tripartite National Arbitration Promotion Board in July, 1967, consisting of representatives of employers, trade unions and the Government. The board keeps a panel of experts who could act as arbitrator. The board evaluates the progress of voluntary arbitration from time to time and advances suggestions for its improvement. It also tries to evolve principles, norms and procedures for the guidance of the arbitrator and the parties.
Adjudication or compulsory arbitration is the ultimate remedy for the settlement of disputes in India. Adjudication consists of settling disputes through the intervention of a third party appointed by the government. An industrial dispute can be referred to adjudication by the mutual consent of the disputing parties.
The government can also refer a dispute to adjudication without the consent of the parties. The Industrial Disputes Act, 1947, provides a three-tier adjudication machinery – namely Labour Courts, Industrial Tribunals and National Tribunals – for the settlement of industrial disputes.
Under the provisions of the Act, Labour Courts and Industrial Tribunals can be constituted by both Central and State Governments but the National Tribunals can be constituted by the Central government only.
The labour court consists of one independent person (called as presiding officer) who is or has been a judge of a High Court, or has been a district judge or additional district judge for not less than 3 years or has held any judicial office in India for not less than 7 years.
The labour court deals with disputes relating to:
(a) The propriety or legality of an order passed by employer under the standing orders;
(b) The application and interpretation of standing orders;
(c) Discharge or dismissal of workers including reinstatement of, or grant of relief to wrongly dismissed persons;
(d) Withdrawal of any statutory concession or privilege;
(e) Illegality or otherwise of a strike or lockout; and
(f) All matters except those reserved for industrial tribunals.
This is also a one-man ad hoc body (presiding officer) appointed by the Government. It has a wider jurisdiction than the labour court. The Government concerned may appoint two assessors to advise the presiding officer in the proceedings.
An industrial tribunal can adjudicate on the following matters:
(a) Wages including the period and mode of payment;
(b) Compensatory and other allowances;
(c) Hours of work and rest periods;
(d) Leave with wages and holidays;
(e) Bonus, profit-sharing, provident fund and gratuity;
(f) Shift working, otherwise than in accordance with the standing orders;
(g) Classification by grades;
(h) Rules of discipline;
(j) Retrenchment and closure of establishments; and
(k) Any other matter that may be prescribed.
This is the third one-man adjudicatory body to be appointed by the Central government to deal with disputes of national importance or issues which are likely to affect the industrial establishments in more than one state.
Adjudication has proved to be the most popular way of settling disputes in India. More than 90 per cent of the disputes are settled through this judicial process every year. However, the actual functioning of machinery is far from satisfactory because of- (i) the delays involved and (ii) the inefficient implementation of the awards.
Adjudication has been criticized thus:
(a) On the procedural plane, adjudication is dilatory, expensive and discriminatory as the power of reference vests with the appropriate government,
(b) On fundamentals, the system of adjudication has failed to bring about industrial peace, has prevented voluntary settlement of industrial disputes and growth of collective bargaining and has come in the way of healthy growth of trade unions.
Quite a good number of disputes are reported to be pending with Labour Courts and Industrial Tribunals for over four or five years. The complicated procedures, red tapism, bureaucratic delays, the high cost of adjudication which only an employer can bear – have all come in the way of prompt settlement of disputes through the adjudication machinery.
Settlement of Industrial Disputes – Industrial Relations Machinery, Preventive Machinery and Settlement Machinery
1. Industrial Relations machinery
2. Preventive machinery
3. Settlement machinery
1. Industrial Relations Machinery:
Cordial industrial relations and lasting industrial peace require 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 Government should activate the industrial Settlement machinery because non-settlement of disputes proves to be harmful not only for the workers, but also the management and the society as a whole.
2. Prevention of Industrial Disputes:
The preventive machinery has been set up with a view to creating harmonious relations between labour and management (so that disputes do not arise).
It comprises the following measures:
i. Tripartite bodies
ii. Code of discipline
iii. Standing orders.
iv. Schemes of workers’ participation in management such at works committees, joint management councils and shop councils and joint councils.
v. Collective bargaining.
Some of the preventive measures are discussed below:
Industrial relations in India have been shaped largely by principles and policies evolved through tripartite consultative machinery at industry and national levels. The aim of the consultative machinery is “to bring the parties together for mutual settlement of differences in a spirit of cooperation and goodwill”
Thus these bodies play the role of consultants!!
Indian Labour Conference (ILC) and Standing Labour Committee (SLC) have been constituted to suggest ways and means to prevent disputes. The representatives of the workers and employers arc nominated to these bodies by the Central Government in consultation with the All-India organisations of workers and employers.
The Labour Ministry settles! The agenda for ILC/SLC meetings after taking into consideration the suggestions sent to it by member organisations. These two bodies work with minimum procedural rules to facilitate free and fuller discussions among the members. Please note that the ILC meets once a year, whereas the SLC meets as and when necessary. I am sure you would have read in the newspapers that the ILC meet is being organized.
ILC means the Indian Labour Conference and SLC stands, for the Standing Labour Committee. Let us understand the functions of ILC!
The functions of ILC are:
a. To promote uniformity in labour legislation
b. To lay down a procedure for the settlement of industrial disputes
c. To discuss matters of All-India importance as between employers and employees.
The ILC advises the Government on any matter referred to it for advice, taking into account suggestions made by the States and representatives of the organisations of workers and employers.
The Standing Labour Committee’s main function is to consider and determine such questions as may be referred to it by the Plenary Conference or the Central Government and to render advice, taking into account the suggestions made by various governments, workers and employers.
The Code of Discipline is a set of self-imposed mutually agreed voluntary principles of discipline and relations between the management and workers in the industry.
In view of growing industrial conflict, the Fifteenth Indian Labour Conference agreed that there should be a set of general principles of discipline, which should be adopted by labour and management voluntarily. To evolve such a set of principles, a tripartite sub-committee was set up. The resulting draft was discussed at Standing Labour Committee meeting in October 1957. At the Sixteenth Indian Labour Conference held in 1958, the final form of the Code of Discipline was approved.
As of now please understand that there are three sets of principles in the Code of Discipline. The first set of principles is for the management and the union. The second set is for the Management and the third one is for the union.
Now what do you think are Standing Orders? …. The orders to stand….. Jokes apart, The Standing Orders regulate the conditions of employment from the stage of entry to the organisation to the stage of exit from the organisation. Thus, they form the regulatory pattern for industrial relations. Since the Standing Orders provide Do’s and Don’ts, they act as a code of conduct for the employees during their working life within the organisation.
The purpose of having Standing Orders at the plant level is to regulate industrial relations. They define with sufficient precision the conditions of employment under the employers and hold them liable to make the said conditions known to workmen employed by them.
These orders regulate the following:
a. Conditions of employment
e. Disciplinary action etc.
These apply to all the workmen employed in industrial undertakings.
Tell me what do you think is the difference between Code of ‘Discipline and Standing Order’?
On a closer examination you will be able to conclude that the Standing Orders are much wider in scope as compared to the Code of Discipline. The Code of Discipline just applies to the Management and union and that also a specific work related area. The Standing Orders on the other hand apply to all the aspects of an employees working life. It encompasses all the rules and regulations from his entry to exit.
3. Settlement of Industrial Disputes (Judicial Machinery):
Firstly, an effective management should stress on the preventive machinery rather than the settlement machinery.
Secondly, it should be noted that the settlement machinery should only be resorted to when the preventive machinery has failed to achieve its targets.
Thirdly, please remember that preventive machinery is entirely voluntary in nature. Law does not back it. It depends on the organisations. However, this is not the case with settlement machinery.
Preventive measures seek to create an environment where industrial disputes do not arise. Should they, however, arise, every effort is required to be made to settle them as early as possible so that they do not lead to work stoppage. The machinery for the settlement of industrial disputes has been provided under the Industrial Disputes Act, 1947.
This machinery comprises:
Conciliation or mediation signifies third party intervention promoting the voluntary settlement of disputes. The International Labour Organisation has defined conciliation as: “The practice by which the services of a neutral third party are used in a dispute as a means of helping the disputing parties to reduce the extent of their differences and to arrive at an amicable settlement or agreed solution.
It is a process of rational and orderly discussion of differences between the parties to a dispute under the guidance of a conciliator.” The conciliator assists the parties to dispute in their negotiations by removing bottlenecks in communication between them.
Conciliation machinery as provided under the Industrial Disputes Act, 1947 is as under:
a. Conciliation Officers:
The Act provides for the appointment of conciliation office is, permanently or for a limited period, for specific area or for a specific industry, to whom the industrial disputes shall be referred for conciliation. The conciliation officer enjoys the powers of a civil court; he can call and witness parties on oath. The conciliation officer examines all facts relevant to the disputed matter and then gives his judgment.
b. Board of Conciliation:
The Act also empowers the Government to appoint a Board of Conciliation for promoting the settlement of disputes where the Conciliation Officer fails to do so within 14 days. The Conciliation Board is a tripartite adhoc body, consisting of a chairman and two to four other members nominated by the parties to the dispute. The mode and procedure of the functioning of the Board are similar to those of the Conciliation Officer.
c. Court of Inquiry:
In case the conciliation proceedings fail to settle an industrial dispute, the Government has vet another option of referring the disputed to the Court of Inquiry. The Court is expected to give its report within six months. The performance of conciliation machinery cannot be said to be satisfactory. Only 25% of cases are annually handled. Besides a very large number of disputes are filed and then withdrawn later on by workers or unions. It means petty issues arc taken up for conciliation.
Finally, a substantial number of cases remain pending. The ineffectiveness of conciliation machinery can be attributed largely to inefficient Conciliation officer! “Either they do not have the necessary educational background, training and experience, and knowledge of industrial relations, since most of them are promoted from the ranks of clerks and labour inspectors, or they lack interest and initiative because conciliation is devoid of conciliation machinery because of the parties’ attitude of casualness towards it”.
I am sure you would have heard people discussing the ineffective judicial machinery in India. As budding managers I encourage you take it as a challenge to correct this scene!! Please note that often, conciliation is looked upon as merely a hurdle to cross to reach the next stage (i.e., adjudication). In Besides, the political pressures on the conciliators also cause the weakening of conciliation machinery.
Voluntary arbitration became popular as a method of settling difference between workers and management with the advocacy Mahatma Gandhi, who had 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. On failure of conciliation proceedings, the conciliation officer may persuade the parties to refer the dispute to a voluntary arbitrator.
Voluntary arbitration refers to getting the disputes settle through an independent person chosen by the parties involved mutually and voluntarily. The provision for voluntary arbitration was made because of the lengthy legal proceedings and formalities and resulting delays involved in adjudication.
It may, however, be noted that arbitrator is not vested with any judicial powers. He derives his powers to decide the dispute from the agreement that parties have made between themselves regarding the referring of dispute to the arbitrator. The arbitrator submits his award to the government. The government then publishes it within 30 days of its submission.
Regarding the performance of voluntary arbitration as a method of resolving disputes, it can be said at the very outset that it has failed to make much progress. There exists general indifference among parties to use voluntary arbitration as a method of settling disputes. Hardly 2 to 3 percent of the disputes not settled by conciliation are referred to voluntary arbitration.
Let me ask you, how many of you would be willing to solve a conflict that you had with your friend through a third party chosen voluntarily by you and your friend? I am sure not many of you would be willing to do that and please remember that in the organisations the scene is much more complex! The Voluntary Arbitration has not been able to achieve a lot of success in this regard.
National Commission on Labour (1969) identified following Causes for the failure of voluntary arbitration:
a. Lack of arbitrators who command the confidence of the parties to the disputes
b. Law provides no appeal against the award given by arbitrator
c. Easy availability of adjudication on the failure of negotiation or conciliation
d. The absence of simplified procedure to followed in voluntary arbitration.
The ultimate remedy for the settlement of an unresolved dispute is its reference by the Government to adjudication. Adjudication may be described as process which involves intervention in the dispute by a third party appointed by the government, with or without the consent of the parties to the dispute, for the purpose of settling the dispute.
The reference of dispute to adjudication is voluntary when both parties agree to reference of dispute to adjudication at their own accord, and it is compulsory when reference is made to adjudication by the Government without the consent of either or both the parties to the dispute.
The Industrial Disputes Act, 1947 provides a three tier adjudication machinery comprising:
a. Labour skills
b. Industrial Tribunals
c. National Tribunals
a. Labour Courts:
The Labour Courts can deal with disputes relating to the propriety or legality of an order passed by an employer under the standing Orders –
a. The application and interpretation of Standing Orders.
b. Discharge and dismissal of workmen and grant of relief to them.
c. Withdrawal of any statutory concession or privilege.
d. Illegality or otherwise of any strike or lock-out
All matters not specified in the third schedule of Industrial Disputes Act, 1947, (it deals with the jurisdiction of Industrial Tribunals).
b. Industrial Tribunals:
The Industrial Tribunals can deal-with the following matters
a. Wages including the period and mode of payment.
b. Compensatory and other allowances.
c. Hours of work and rest intervals
d. Leave with wages and holidays
e. Bonus, profit sharing, provident fund and gratuity
f. Shift working otherwise than in accordance with standing orders.
g. Rules of discipline
j. Any other matter that may be prescribed.
c. National Tribunals:
These tribunals are meant for disputes which, as the name suggest, involve the question national importance or issues which are likely to affect the industrial establishments of more than one state, The unions use adjudication as a primary measure of resolving disputes. About 90 to 95 percent of disputes are referred to adjudication machinery on an average annually.
However, the functioning of adjudication machinery has not been very satisfactory, particularly because of the delays and the inefficient implementation of the awards. The proceedings at adjudication take unduly long period. About 50 to 60 per cent of the cases are decided in more than a year. And 25% of the cases take between 6 to 12 months. The state of the implementation of awards (requiring implementation) is also not very commendable.
30 to 40 per cent awards are not implemented by the date of enforcement. Incomplete and abrupt implementation of awards creates suspicions in the minds of workers and shakes their faith in the machinery. Adjudication has been the most popular measure of resolving disputes accounting for more than 90 percent of the disputes every year. However, adjudication is not a democratic method and may create bitterness among the parties. It tends to encourage litigation and irresponsible behaviour among employers and labour.
The functioning of the adjudication machinery has in practice been unsatisfactory. I am sure you will agree that an unduly long time is involved in adjudication proceedings. You will be surprised to know that more than one-half of the disputes are decided in more than a year.
Moreover, the implementation of the awards has been inefficient. Delays in implementation erode the faith of workers in the adjudication machinery. Adjudication is preferred more by employers who can afford to spend more on the legal proceedings.
Settlement of Industrial Disputes: Conciliation Officer, Arbitration, Labour Court, Board of Conciliation, Court of Enquiry, Industrial Tribunal, National Tribunal
Very often, the relations between employer and employees are not cordial. The employees wants more jobs, increase in wages, better working conditions and the management wants to reduce the staff, control cost and increase productivity. Management would like to come out with improved and cost saving processes.
Industrial disputes resulting in the strikes and lockouts disturb the economic, social and political life of the country. The industrial dispute may be individual dispute pertaining to an individual or collective disputes relating to wage, bonus, profit sharing, hours of work etc.
According to the Industrial Disputes Act, 1947, “Industrial dispute means any dispute or difference between employers and employees or between employers and workmen or between workmen and workmen, which is connected with the employment or non-employment of the terms of employment or with the conditions of work of any person”.
Settlement of Industrial Disputes:
1. Conciliation Officer:
Government appointed conciliation officer, will do everything for bringing a fair and amicable settlement of the dispute. He is expected to give judgement within 14 days of the commencement of the conciliation proceedings. When no settlement is reached within 14 days of the commencement of the conciliation proceedings, he will send a “Failure Report” to the Government with reasons for non- settlement of the dispute.
The employer and employee may agree to settle the dispute by appointing an independent and impartial person. Arbitration provides justice and at minimum cost. An industrial dispute may be referred to an arbitrator by written agreement entered by employers and employees at any time before referring the dispute to a labour court or industrial tribunal. The voluntary arbitration first made its appearance in India in the year 1918, when Mahatma Gandhi intervened in the dispute between the Ahmedabad Textile Mill owners and its employees.
3. Labour Court:
The government has labour courts for dealing with the matters specified in the second schedule of the Industrial Disputes Act of 1947.
These matters include the following:
a. The property or legality of an order passed by an employer under the standing orders.
b. The application and interpretation of standing orders.
c. Discharges or dismissal of workers including reinstatement, grant of relief to workmen wrongfully dismissed.
d. Withdrawal of any customary concession or privilege.
e. Illegality or otherwise of a strike or lockout.
f. All matters other than those reserved for industrial tribunals.
4. Board of Conciliation:
The Government can also appoint a board consisting of a chairman along with two or four as members who are equally represented by the parties to the disputes.
The duties of the board include the following:
(a) To investigate the dispute and all matters affecting the merits and do all things as it thinks fit.
(b) The report has to be sent to the Government by the board whether a dispute is settled or not within two months of the date on which the dispute was referred to it.
5. Court of Enquiry:
The government may appoint a court of enquiry for enquiring into any industrial dispute. A court may consist of one person or more than one person in which case one of the people will be the chairman. The court shall enquire into the matter and submit its report to the Government within period of six months.
6. Industrial Tribunal:
The Industrial Tribunal consists of only one person who is appointed by the Government. He should be either a judge of a high court or district judge for a period of not less than three years. A tribunal is appointed by the Government for the adjudication of industrial dispute relating to any matter specified in the third schedule.
These matters are given below:
(a) Wages including the period and mode of payment.
(b) Compensatory and other allowances.
(c) Hours of work and rest intervals.
(d) Leave with wages and holidays.
(e) Bonus, profit sharing, provident fund and gratuity.
(f) Shift working otherwise than in accordance with standing orders.
(g) Classification by grades.
(h) Rules of discipline.
(j) Retrenchment of workmen and closure of establishment.
(k) Any other matter that may prescribed.
7. National Tribunal:
A national tribunal is constituted by the Central Government for the adjudication of industrial disputes involving questions of national importance. A national tribunal shall consist of one person to be appointed by the Central Government. A person who has held the office of the chairman or member of the labour tribunal is eligible for the appointment to the tribunal.