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Industrial Dispute Act, 1947 - Definition, Settlement Machinery

Industrial Relation and labour law Dispute Resolution

Definition of Industrial Dispute:

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”.

Authorities for Settlement of Industrial Disputes:

Settlement of Industrial Disputes – 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, 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.

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. 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.

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.

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.

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.

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.

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.

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.

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.

6. Tribunals:

(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.

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.

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.

Dispute Settlement Machineries.

A characteristic feature of society is a dispute. The biggest conflict of these is that between the capital and labour. It is possible to reduce and mitigate them, it is not practically possible to eliminate them. Each has their own demands and wants that they want to be fulfilled. The inherent inequality of an employment relationship places more power in the hands of employers and thus the question of distribution of the social product that is the outcome of the common effort of employers and workmen, the issue of the job security that is vital to an employee along with the growing yet constant urge of the workmen to climb the success ladder are some of the important factors that give rise to disputes in any industrial organization. Therefore, industrial disputes are those which arise between an employer or an employer’s organisation on the one hand and the workmen or trade unions of workmen on the other hand. These are on matters relating to an employer-employee relationship.

CAUSES OF INDUSTRIAL DISPUTES

There are a number of causes of industrial disputes. Let us take a brief account of these causes in the following paragraphs.

1. Wages and Allowances

The demand for higher wages is the major cause of industrial disputes. Data show that about one-third of the total disputes in the country arise due to this reason. , Workers may feel that: a) the existing wages art! insufficient to provide a reasonable standard of living; b) wages and allowances have not increased in proportion to the increase in the cost of living; and c) their wages and allowances are lower compared to that of the workers in other comparable industries. Thus the demand for higher wages often leads to trade union activities like strikes, gheraos', etc. resulting in prolonged industrial disputes.

2. Bonus

The second major case of industrial disputes relates to the issue of payment of bonus to industrial .workers, Disputes over the rate of bonus, and time and mode of payment have been common.

3. Personnel Matters

Poor personnel administration may also Cause industrial disputes. In the absence of effective personnel management grievances and unrest may result into a dispute. Retrenchment of labour due to automation is also likely to cause a dispute.

4. Working Conditions and Labour Welfare’

The demand for improvement in service conditions relating to security of jobs, hours of work, interval, leisure, leave, etc. causes industrial disputes. They are also caused by demand for social security measures.

5. Psychological Factors

A worker's satisfaction with the job is not only based on wages, hours of work, and other conditions of employment, it is also based upon the extent to which he enjoys his work. Psychological factors like denial of opportunity for self-expression, personal achievement, and betterment may cause unrest! Among workers.

6. External Factors

Certain causes are not directly connected with the industrial establishment itself. For example, the workers may go on sympathetic strike in support of fellow-workers in other establishments. Political factor is another important external factor. The workers may go on strike to protest against certain legislative measures or government policies.

It may therefore be observed that industrial disputes arise mainly due to various economic reasons. In order to improve the industrial relations in the country the government has undertaken a number of measures in this direction.

The Industrial Disputes Act, 1947 provides for four major industrial dispute settlement machinery:

1. Conciliation

2. Court of Inquiry

3. Voluntary Arbitration

4. Adjudication

Conciliation

Conciliation, a form of mediation refers to the act of making a passive and indirect effort in order to bring two conflicting parties to a compromise. It is the “practice by which the services of a neutral 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 of agreed solution.”

The conciliator or mediator tries to remove the difference between the parties by persuading the parties to rethink over the matter with a give and take the approach but does impose his or her own viewpoint. The conciliator is at liberty to change his or her approach from case to case as he or she deems fit depending on other factors.

The Industrial Disputes Act, 1947 provides for conciliation, and can be utilised either by the appointment of conciliation officers; permanently or for a limited period or via the constitution of a board of conciliation. This conciliation machinery is at liberty to either take note of the dispute or apprehend dispute on its own or when approached by a party.

In order to expedite proceedings, time-limits have been prescribed. It is 14 days in the case of conciliation officers and 2 months for a board of conciliation. The settlement so arrived upon during the course of conciliation is binding upon the parties for the period that has been agreed upon by the parties or for the period of 6 months. It shall continue to be binding until revoked by either of the parties. During the pendency of the conciliation proceedings, before a Board and for seven days after the conclusion of such proceedings, the Act prohibits strike and lock-out.

Conciliation Officer:

Under Section 4 of the Industrial Disputes Act, 1947, the appointment of a such number of persons as is deemed fit by the appropriate government is provided for. This is with reference to the relevant jurisdiction in which the dispute falls.For undertakings that employ 20 or more persons, the Commissioner/ Additional Commissioner/ Deputy Commissioner is appointed as the Conciliation Officer. But at the State level, some officers from the Central Labour Commission office are appointed as conciliation officers, in the case of Central Government. The conciliation officer enjoys the powers of a civil court, and he is expected to give a judgment within 14 days of the commencement of the conciliation proceedings. This judgement that is given by him is binding upon the parties to the dispute.

Board of Conciliation:

In case Conciliation Officer fails to resolve the differences between the parties, the government has the discretion to appoint a Board of Conciliation. The Board is tripartite and ad hoc body, consisting of a chairman and two or four other members.

The administrator is to be an autonomous individual, and different individuals are assigned in equivalent number by the Board tin view of the question. Conciliation procedures before a Board are like those that may occur before the Conciliation Officer. The Government has yet another choice of alluding the proceedings to the Court of Inquiry rather than the Board of Conciliation.

The apparatus of the Board is gotten under way when a debate alludes to it. As it were, the Board does not hold the pacification procedures voluntarily. On the debate being alluded to the Board, it is the obligation of the Board to do all things as it supposes fit with the end goal of initiating the gatherings to go to a reasonable and neighbourly settlement. The Board must present its answer to the legislature inside two months of the date on which the debate alluded to it. This period can be further stretched out by the administration by two months.

Court of Inquiry

If there should be an occurrence of the disappointment of the conciliation procedure to settle a question, the administration can choose a Court of Inquiry to enquire into any matter associated with or significant to debate. The court is mandated upon to present its report inside of six months and may comprise of at least one people to be chosen by the proper government.

The court of enquiry is required to present its report inside a time of six months from the initiation of enquiry. This report is therefore distributed by the administration within 30 days of its receipt. Not at all like amid the time of pacification, labourers’ entitlement to strike, businesses’ entitlement to a lockout, and bosses’ entitlement to reject labourers, and so forth stay unaffected amid the procedures in a court to an enquiry.

A court of enquiry is different from a Board of Conciliation. While the Board’s basic objective is to promote the settlement of an industrial dispute, a court of enquiry is primarily fact-finding machinery that aims at inquiring into and revealing the causes of an industrial dispute.

Voluntary Arbitration

On the disappointment of placation procedures, the conciliation officer may persuade the parties to refer the dispute to a voluntary arbitrator wherein the arbitrator alludes to getting the question settled since he is an autonomous individual picked by the parties included commonly and willfully.

As such, assertion offers an open door for an answer of the debate through an authority together delegated by the gatherings to the question. The procedure of intervention spares time and cash of both the gatherings which is generally squandered if there should be an occurrence of settling.

This form of voluntary arbitration became a popular method a settling differences between workers and management due to the advocacy of Mahatma Gandhi, who had himself applied it extremely effectively and successfully in the Textile Industry of Ahmedabad. However, voluntary arbitration received legal identity only in 1956 when the Industrial Disputes Act, 1947 was amended in order to include a provision relating to it.

This provision for voluntary arbitration was provided keeping in mind the lengthy legal proceedings and formalities and resulting delays that is involved in adjudication. But it is pertinent to note that the arbitrator is not vested with any judicial powers. He only derives his powers to settle the dispute at hand from the agreement entered into by the parties of opting to refer the dispute to the arbitrator. The arbitrator is required to submit his award to the government who shall then publish it within 30 days of such submission, and the award shall be enforceable only upon the expiration of 30 days of its publication.

Intentional intervention is one of the most democratic ways for settling industrial disputes and conflicts. It is the best technique for determining modern clashes and is a reasonable and fair supplement to aggregate bartering. It not just gives an intentional technique for settling industrial disputes, but on the other hand is a faster method for settling them.

Adjudication

A definitive solution for the settlement of industrial disputes is its reference to arbitration by a labour court or tribunals when conciliation fails to achieve a settlement with respect to the dispute or conflict. Arbitration comprises of settling debate through intercession by the outsider delegated by the legislature. The law gives the mediation to be directed by the Labour Court, Industrial Tribunal of National Tribunal.

A debate can have alluded to arbitration if the business and the recognized trade union consent to do as such. A question can likewise be alluded to arbitration by the Government regardless of the possibility that there is no consent of the parties in which case it is called ‘mandatory arbitration’. As has been mentioned before, the dispute may be referred to any of three sorts of tribunals relying upon the nature and certainties of the question in inquiries. This include:

(a) Labour courts,

(b) Industrial tribunals, and

The procedure, powers, and provisions with respect to the beginning of the award and time of operation of an award of these three bodies are comparable and similar. The first two bodies may be set up either by any State Government or by the Central Government. However the National Tribunal may be set up only by the Central Government when it believes that the adjudication of a dispute is of national significance. These three bodies are hierarchical in nature, and it is the Government’s privilege to refer a question or dispute or conflict to any of these bodies relying upon the nature of the conflict or dispute.

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