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Industrial Dispute Act: Process of Resolution of Disputes

The redressal of industrial disputes is very pertinent for effective functioning of the industry. Therefore, the Industrial Disputes Act, 1947 has provided various ways to settle industrial disputes by empowering the appropriate government to appoint different authorities as and when necessary, in order to maintain industrial peace and harmony. The recent amendment to the Act has provided for setting up of grievance redressal committee.
Written by:
Antim Amlan
Published on
24-Jun-19

Industrial dispute arises when employees and the employers fail to sort out their differences. Industrial dispute is always harmful to all persons associated with such industry as it affects all stakeholders, management, employees, economy, and society. The employers suffer losses in production, revenue, profits and even sickness of the plants; whereas the employees may suffer due to loss of wages and even jobs. Since industries are the pillars to economic growth, any dispute is detrimental to the rate of growth of the economy which ultimately affects the whole society. Therefore, Industrial Disputes Act, 1947 provides machinery to resolve such disputes by following ways:

  • Collective Bargaining

  • Grievance Redressal

  • Arbitration

  • Conciliation

  • Adjudication

Collective Bargaining

Collective bargaining is the most effective method of resolving industrial disputes. It occurs basically through Works Committee i.e. when representatives of both workmen and employer meet to settle the differences which may be due to disputes in wages, benefits, work rules, etc. Since both parties have their representatives, they can collectively bargain to protect their interests and reach a settlement.

 

Grievance Redressal Mechanism

A grievance may be defined as a sort of dissatisfaction to workman with any aspect of the organisation wherein he is employed. The same needs to be redressed for the betterment of the industry. The Industrial Disputes (Amendment) Act, 2010 has substituted a new chapter i.e. Chapter II-B in the Act with the purpose to establish an effective tool to resolve industrial disputes. The title of the Chapter is Grievance Redressal Machinery. Section 9C of the Act provides for the establishment of  Grievance Redressal Machinery.

  • Every industrial establishment having twenty or more workmen shall have one or more Grievance Redressal Committee for the resolution of disputes arising out of individual grievances

  • The Grievance Redressal Committee shall consist of equal number of members from the employer and the workmen

  • The chairperson of the Grievance Redressal Committee shall be selected from the employer and from among the workmen alternatively on rotation basis every year

  • The total number of members of the Grievance Redressal Committee shall not exceed six

  • There shall be one woman member in the Grievance Redressal Committee in case of two members. In case the number of members are more than two, the number of women members may be increased proportionately

  • The Grievance Redressal Committee shall not affect the right of the workman to raise industrial dispute on the same matter under the provisions of this Act

  • The Grievance Redressal Committee may complete its proceedings within thirty days on receipt of a written application by or on behalf of the aggrieved party

  • The workman who is aggrieved by the decision of the Grievance Redressal Committee may appeal to the employer against the decision of the Grievance Redressal Committee and the employer shall, within one month from the date of receipt of such appeal, dispose off the same and send a copy of his decision to the workman concerned

Arbitration

Arbitration is a method of settlement of a dispute wherein a neutral third party (appointed by both parties) apprehends the bargaining situation after listening to both the parties and studying other information. An award is made on such settlement that binds the parties. Arbitration is effective as a means of resolving disputes because it is relatively expeditious as compared to court.

When can the parties refer an industrial dispute to arbitration?

Section 10A of Industrial Disputes Act, 1947 provides for Voluntary reference of disputes to arbitration. It says:

  • Where any industrial dispute exists or is apprehended and the employer and the workman agree to refer the dispute to arbitration, they may, at any time before the dispute has been referred under section 10 to a Labour Court or Tribunal or National Tribunal by a written agreement, refer the dispute to arbitration and the reference shall be to such person or persons (including the presiding officer of a Labour Court or Tribunal, or National Tribunal) as an arbitrator or arbitrators as may be specified in the arbitration agreement

  • If arbitration agreement provides for a reference of the dispute to an even number of arbitrators then agreement shall provide for the appointment of another person as umpire who shall enter upon the reference, if the arbitrators are equally divided in their opinion, and the award of the umpire shall prevail and shall be deemed to be the arbitration award for the purposes of this Act.

  • An arbitration agreement must be signed by the parties thereto in such manner as may be prescribed

  • A copy of the arbitration agreement shall be forwarded to the appropriate government and the conciliation officer

  • The arbitrator or arbitrators shall investigate the dispute and submit to the appropriate government the arbitration award signed by the arbitrator or all the arbitrators, as the case may be

Conciliation

Conciliation is a process to resolve the dispute where representatives of workers and employers are brought together before a third party (conciliation officer) with a view to convince them to arrive at mutual settlement. The conciliation officer basically acts as a catalyst who deals with parties separately and collectively in order to provide an effective solution to the dispute. The appropriate government may appoint one or more conciliation officer, charged with the duty of mediating in and promoting the settlement of industrial disputes. Section 12 of the Act provides the duties of conciliation officer wherein the conciliation officer is required to hold conciliation proceedings in case of any industrial dispute or where the dispute relates to a public utility service and a notice under section 22. Other duties include investigation of disputes, appropriate steps to settle the dispute, submission of reports to appropriate government, etc.

Similarly, a board of conciliation (constituted under Section 5 of the Act) may also be referred for settlement of the dispute. The Board of Conciliation is another authority recognized under Industrial Disputes Act, 1947 to promote the settlement of industrial disputes. Duties of Board are similar to the duties of conciliation officer like to take necessary steps for settlement of the dispute, submission of reports and memorandum of settlement to appropriate Government within 2 months. In case of no settlement, the Board must submit the full report of steps taken by it while working for the settlement. The report shall be in writing and signed by all the members of the Board.

Adjudication

Industrial disputes can be resolved by way of adjudication i.e. settlement of an industrial dispute by labour court or industrial tribunal. The appropriate government may refer a dispute to adjudication depending on the failure of conciliation proceedings. Section 10 of the Industrial Disputes Act, 1947, provides for reference of a dispute to the court of inquiry or labour court or industrial tribunal. The decision of a court of inquiry or labour court or tribunals is binding on both the parties. The Act also provides for rules regarding the composition and powers of the court of inquiry, labour courts and tribunals.

When can an industrial dispute be referred to the Labour Court or Industrial Tribunal?

Section 10 of the Act empowers the appropriate government to refer any industrial dispute for adjudication to Labour court or Tribunal in case:

  • The conciliation proceedings fail and conciliation officer recommends for adjudication or

  • The appropriate government is satisfied that such dispute must be referred to the labour court or industrial tribunal

The appropriate government may refer the dispute to the Labour Court if such dispute appears to be connected with any of the matters specified in the Second Schedule

The appropriate government may refer the dispute to Industrial Tribunal if such dispute appears to be connected with any of the matters specified in the Second Schedule or the Third Schedule.

Where the dispute is related to any matter specified in the Third Schedule and is not likely to affect more than one hundred workmen, the appropriate government may refer the same to Labour Court.

The parties to an industrial dispute may apply jointly or separately, for a reference of the dispute to Board or Labor Court or Tribunal. If the appropriate government is satisfied that the persons applying represent the majority of each party, it shall make the reference accordingly. The reference must state the time period within which the refereed authority need to submit the award on such dispute.

When can an industrial dispute be referred to the Labour Court or National Tribunal?

If the Central Government is of the opinion that any industrial dispute involves question of national importance or is of such a nature that industrial establishments situated in more than one State are likely to be affected by such dispute and that the dispute should be adjudicated by a National Tribunal, then the Central Government may (whether or not it is the appropriate government in relation to that dispute) refer the dispute or any matter  connected with such dispute to a National Tribunal (established under Section 7B of the Act) for adjudication.

The parties to an industrial dispute may also apply to refer the dispute to the National Tribunal. If the appropriate government is satisfied then the persons applying represents the majority of each party, it shall make the reference accordingly. The Tribunal must submit the award on such dispute within the prescribed time period.

Section 11 of the Act provides the procedure and powers of conciliation officers, Board, courts and Tribunals and National Tribunals wherein they may take any step or follow any procedure as necessary for the settlement of disputes. The Conciliation officer may enter the industrial premises for inspection after reasonable notice. The Board, courts and Tribunals and National Tribunals have similar power as that of Civil Court and therefore, require the attendance of any person, compel the production of documents, examine witnesses or take necessary steps for inquiry and investigation.

Award and Settlement

Award is the decision given by the arbitrator, Labour Court or Industrial Tribunal. It resembles the judgment of a Court whereas settlement is at as a result of conciliation between the parties to the settlement. 

Award - Section 2(b) of the Industrial Dispute Act defines award as “an interim or a final determination of any industrial dispute or of any question relating thereto by any Labour Court, Industrial Tribunal or National Industrial Tribunal and includes an arbitration award made under Section 10-A.”

Settlement - Section 2(p) of the said Act defines settlement as “a settlement arrived at in the course of conciliation proceedings and includes a written agreement between the employer and workmen arrived at otherwise than in the course of conciliation proceeding where such agreement has been signed by the parties thereto in such manner as may be prescribed and a copy thereof has been sent to an officer authorized in this behalf by the appropriate Government and the conciliation officer”.

Persons on whom settlements and awards are binding   

Section 18 of the Industrial Dispute Act 1947 provides that the awards and settlements are binding on the following persons -

(a) A settlement arrived at by agreement between the employer and workman otherwise than in the course of conciliation proceeding shall be binding on the parties to the agreement

(b) An arbitration award which has become enforceable shall be binding on the parties to the agreement who referred the dispute to arbitration

(c) A settlement arrived at in the course of conciliation proceedings under this Act or an arbitration award in a case where a notification has been issued under sub-section (3A) of section 10A or an award of a Labour Court, Tribunal or National Tribunal which has become enforceable shall be binding on-

(i) All persons who are parties to the industrial dispute;

(ii) All the parties summoned to appear in the proceedings as parties to the dispute, unless the Board, arbitrator Labour Court, Tribunal or National Tribunal, as the case may be, records the opinion that they were so summoned without proper cause;

(iii) The heirs, successors or assigns in respect of the establishment to which the dispute relates

(iv) Where a party referred to in clause (a) or clause (b) is composed of workmen, all persons who were employed in the establishment or part of the establishment, as the case may be, to which the dispute relates on the date of the dispute and all persons who subsequently become employed in that establishment or part