Objectives

The Industrial Disputes Act, 1947 makes provision for the investigation and settlement of industrial disputes and for certain other purposes. It ensures progress of industry by bringing about harmony and cordial relationship between the employers and employees. Definitions of the words ‘industrial dispute, workmen and industry’ carry specific meanings under the Act and provide the framework for the application of the Act.

The main objective of the Industrial Disputes Act, 1947 is to provide machinery for investigation and settlement of industrial disputes and matters connected therewith to ensure speedier resolution of industrial disputes and to create harmony and amity in the industry.

Scope and Coverage

This Act extends to whole of India. The Act was designed to provide a self-contained code to compel the parties to resort to industrial arbitration for the resolution of existing or apprehended disputes without prescribing statutory norms for varied and variegated industrial relating norms so that the forums created for resolution of disputes may remain unhampered by any statutory control and devise rational norms keeping pace with improved industrial relations reflecting and imbibing socio-economic justice. This being the object of the Act, the Court by interpretative process must strive to reduce the field of conflict and expand the area of agreement and show its preference for upholding agreements sanctified by mutuality and consensus in larger public interest, namely, to eschew industrial strife, confrontation and consequent wastage.

The Act came into force on 1st April, 1947 and at present extends to whole of India covering all type of industries includirig factories, mines, plantations, commercial and industrial establishments irrespective of number of people employed therein.

Administration

The appropriate government in respect of Central' Government Undertakings which have been created under the Act of Parliament, banking or insurance company, mines, oil fields, cantonment board, major ports,.is the Central Government and inrelation to any other industry, it is the State Government which is responsible for administration and providing machinery for resolution of industrial disputes. The responsibility of the appropriate government includes appointment of Conciliation Officers, appointing the Presiding Officer of Labour Court and Industrial Tribunal, reference of the industrial disputes, publication of awards, etc.

Important Definitions

Some of the most important definitions as per the Act are as under :

Section 2(j)    : "Industry" means any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, handicraft, or industrial occupation or avocation of workmen.

Section 2(k)    : "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 term of employment or with the conditions of labour, of any person.

Section 2(1)    "Lockout" means the temporary closure of a place of employment or the suspension of work, or the refusal by an employer to continue to employ any number of persons employed by him.
Section 2(oo)    "Retrenchment" means termination of service by the employer of a workman for any reason whatsoever, otherwise than as a punishment inflicted by way of disciplinary action. It does not include voluntary retirement, superannuation, termination of service as a result of non-renewal of contract of employment or termination on grounds of ill-health.

Section 2(q)    : "Strike" means a cessation of work by a body of persons employed in any industry acting in combination or a concerted refusal, or a refusal under a common understanding, of any number of persons who are or have been so employed to continue to work or to accept employment.

Section 2(s)    : "Workman" means any person including a trainee employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory - work for hire or reward, whether the term of employment be express or implied, and for the purposes of any proceeding under this Act in relation to an industrial dispute, includes any such person who has been dismissed, discharged, or retrenched in connection with, or as a consequence of that dispute, or whose dismissal, discharge or retrenchment has led to the dispute, but does not include any sum person who is employed in Police or Armed Forces or who is employed mainly in. managerial or administrative capacity or who being employed in supervisory capacity, draws wages exceeding Rs. 1,600 per month or exercises either by nature of the duties attached to the office or by reason of the power vested in him, functions mainly of a managerial nature.

Machinery for Investigation and Settlement of Disputes

The Act provides following machinery for investigation and settlement of industrial disputes :

Works Committee (Section 3)

(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, a Works Committee consisting of representatives of employers and workmen engaged in the establishment so  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.

So, 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.

Any industry, which has 100 or more workmen (in case of some states, 50 or more) is required to constitute works committee which will have workmen's representatives and employer's representatives in equal number with total number of members not exceeding twenty. It is the duty of the works committee to promote measures for securing and preserving amity and good relations between employer and workmen and comment upon matters of common interest and endeavour to compose any material difference of opinion in respect of such matters.

Conciliation Officers (Section 4)

(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.

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.

A conciliation officer may be appointed by the appropriate government for specified industries or in a specified area either permanently or for a limited period. The conciliation office either of his own or as and when any difference of opinion is brought to his notice, holds discussion with both the parties and acts as a mediator to resolve the differences between them.

Boards of Conciliation (Section 5)

(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.

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.

Courts of Enquiry (Section 6)

(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.

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.

The appropriate government may constitute a court of enquiry by notification in the official gazette as and when the occasion arises for enquiry into any matter appearing to be connected with or relevant to an industrial dispute. The court may consist of number of independent persons as the government may think fit. Where the court consists of two or more persons, one of them shall be appointed as the chairman.

Labour Courts (Section 7)

(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.

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.

The appropriate government's notification in the official gazette constitutes one or more labour courts for adjudication of industrial dispute to matters as specified in second schedule of the Act (issues relating to condition of work or discharge or dismissal, etc.) or any other function assigned to them. The labour court consists of one person only who will be known as Presiding Officer and will be appointed by the appropriate government. A person shall not be qualified for appointment as a Presiding Officer of a labour court unless he has been a Judge of High Court or a District Judge or Additional District Judge for a period of not less than 3 years or has held any Judicial Office in India for not less than 7 years.

Industrial Tribunals (Section 7A)

(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.

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.

The appropriate government's notification in the official gazette constitutes of one or more Industrial Tribunal for the adjudication of industrial dispute relating to any matter whether specified in second schedule or third schedule (issues relating to monitory benefit and discipline, etc.) or any other function assigned to them under the Act. Like Labour Court, the Industrial Tribunal also consists of one person only who is known as Presiding Officer and is appointed by the government. A person shall not be qualified for the appointment as Presiding Officer of the Tribunal unless he has been a Judge of High Court or District Judge or Additional District Judge for a period of not less than 3 years.

National Industrial Tribunal (Section 7B)

(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.

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.

The Central Government may by notification in the official gazette constitute one oq more National Industrial Tribunal for adjudication of industrial dispute which in its opinion involves question of national importance or are of such nature that industrial establishment situated M more than one state are likely to be interested or affected by such disputes. The National Industrial Tribunal shall consists of one person only and will be appointed by the Central Government. He shall be designated as Presiding Officer. A person shall not be qualified for appointment as Presiding Officer of the National Industrial Tribunal unless he has been a Judge of High Court.

Notice of Change (Section 9A)

No employer shall propose to effect any change in the condition of service of any workman in respect of any matter specified in fourth schedule unless he has given minimum 21 days notice in the prescribed manner. However, no notice shall be required for effecting any change if it is brought in pursuance of any settlement or award or where the workmen are governed by civil services rules or any such rule applicable to the armed forces or such allied categories.

Reference of Dispute to Boards, Courts or Tribunals (Section 10)

If the appropriate government is of the opinion that any dispute exists or is apprehended, it may by order in writing refer the dispute to a Board for settlement or to a Labour Court, if it relates to any matter specified in second schedule or third schedule to a Tribunal for adjudication. In case of receipt of a notice of strike from a public utility industry, the appropriate government may refer the dispute to a Labour Court or Tribunal irrespective of the fact whether any other proceeding under the Act may have commenced. The Central Government may refer a dispute in an industry for which the appropriate government is Central Government to a Labour Court or Tribunal constituted by the State Government.

Voluntary Reference of Disputes to Arbitration (Section 10A)

The employer and the workmen may agree to refer the dispute to Arbitration by an agreement any time before the dispute has been referred to a Labour Court or Tribunal or National Tribunal under Section 10.
Power of Labour Court, Tribunal & National Tribunal to Give Appropriate Relief in Case of Discharge or Dismissal of Workmen (Section 11A)
Whenever any industrial dispute relating to discharge or dismissal of a workman is referred to Labour Court, Tribunal or National Tribunal for adjudication and if it is satisfied with the order of discharge or dismissal was not justified, it may set aside the order of discharge or dismissal and direct the reinstatement of the workman or grant such relief as it may consider necessary.

General Provisions of the Act

Following are some important provisions of Industrial Disputes Act, 1947 :
(a)    Works Conunittee, Conciliation Officer, Boards of Conciliation and Court of Enquiry are meant to bring voluntary settlement of dispute through discussion and mediation. Their recommendations and findings are not legally enforceable whereas the finding of Labour Court, Tribunal is in the form of Award which is legally enforceable. On receipt of award, the appropriate government has to publish it in the official gazette within a period of 30 days and it becomes enforceable on expiry of 30 days from the date of publication.
(b)    If the employer prefers to go in appeal against the Award directing reinstatement of any worker in High Court or Supreme Court, it shall have to pay full wages last drawn by the workman during the pendency of such an appeal provided during this period, he is not employed elsewhere.
(c)    There is a prohibition on strike and lockout in public utility services until or unless 14 days notice is given to the other party and observe strike/lockout within six weeks thereof or before the scheduled date of strike/lockout as mentioned in the notice or during the pendency of conciliation proceeding and seven days after conclusion of proceeding.
(d)    In case of lay off or retrenchment of workmen or closure or transfer of undertaking, the workmen are entitled for payment of compensation as per the provisions of the Act.
(e)    During the pendency of a dispute before Conciliation Officer or Board or Arbitrator or Labour Court or Tribunal or National Tribunal, no employer shall prejudicially alter the condition of service or discharge or dismiss in regard to any matter connected with the dispute of any workmen except with prior permission in writing from the authority before which the proceeding is pending. However, employer can alter the condition of service or discharge or dismiss the workmen in accordance to the Standing Orders in accordance with implied or expressed terms of contract of employment in relation to any month notice or salary in lieu thereof and by filing an application for approval of his action before the authority before which the dispute is pending.
(f)    The employer and the workmen can be represented by any of the office hearer of their Association/Trade Union of which they are member or office bearer of the Federation of Associations/Trade Unions, in any proceeding under the Act.
 
No party to a dispute shall be entitled to be represented by legal practitioner in any conciliation proceeding or in any proceeding before, a court. However, in proceeding before a Labour Court, Tribunal or National Tribunal, a party to a dispute may be represented by a legal practitioner with the consent of the other party and with the leave of the concerned Court.

Obligations of the Employer

It is obligatory for an employer to fulfil the following :
(a)    to constitute Works Committee and provide facility of its proper function;
(b)    to implement all agreements, settlements and awards;
(c)    to assist Conciliation Officer, Board, Arbitrator, Labour Court, Tribunal and National Tribunal in performing their functions by rendering necessary information and documents;
(d)    to pay compensation as per the provisions of the Act in case of lay off, retrenchment or closure and to follow the prescribed procedure for the same;
(e)    not to indulge in any unfair labour practice as prescribed under fifth schedule attached with the Act; and,
(f)    to abide by various provisions of the Act in fulfillment of its responsibility. Obligations of the Workmen

Every workman is entitled to the following rights under the Act :

(a)    to abide by the provisions of the agreements, settlements and awards;
(b)    not to adopt any unfair labour practice as enumerated in fifth schedule attached with the Act;
(c)    to co-operate with management in the effective functioning of Works Committee; and
(d)    to assist Conciliation Officer, Board, Arbitrator, Labour Court, Tribunal and National Tribunal by furnishing necessary information and documents.

Offences and Penalties (Sections 26-31)

The Act provides varying penalties for different offences with imprisonment ranging from one month to one year and fine ranging from Rs. 100 to Rs. 5,000 or both for contravening the various provisions of the Act.