Everything you need to know about the settlement of industrial disputes. Industrial disputes mean any conflict, unrest or dissention between the workers and the management on any ground.
According to industrial disputes Act, 1947,
“Industrial dispute is any disputes or difference between the employers and employees or between employers and workmen or workmen and workmen, which is concerned with the employment or the terms of employment or with conditions of labour or any person.”
Industrial disputes like strikes and lockouts pose a grave social serious problem for industrial peace. The grave industrial and social dislocation caused by them has underlined the importance of preserving industrial peace.
ADVERTISEMENTS:
Some of the methods used to settle industrial disputes are:-
1. Trade Unions 2. Joint Consultations 3. Standing Orders 4. Grievance Procedure 5. Code of Discipline 6. Conciliation 7. Voluntary Arbitration 8. Adjudication
9. Investigation 10. Mediation 11. Works Committees 12. Industrial Truce Resolution 13. Workers’ Participation in Management 14. Court of Enquiry 15. Labour Court 16. Industrial Tribunals and National. Tribunals.
Settlement of Industrial Disputes
How do you Settle Industrial Disputes – Preventive Methods: Trade Unions, Joint Consultations, Standing Orders, Grievance Procedure and Code of Discipline
Method # 1. Trade Unions:
Strong trade unions help prevent industrial disputes. They can bargain with employers effectively and seek quick redressal of grievances. Industrial relations will be sound only when the bargaining power of the employees’ union is equal to that of management. A strong union can protect the employees’ interest relating to wages, benefits, job security, etc.
Method # 2. Joint Consultations:
ADVERTISEMENTS:
To prevent industrial disputes, two ways of joint consultations are adopted – Works committees and Joint management councils.
A. Works Committees:
As per the provisions of the Industrial Disputes Act, 1947, works committees have to be set up in all those industrial units which employ 100 or more persons and are composed of an equal number of employers’ and employees’ representatives. The committees are given the responsibility of removing the causes of friction between labour and management in the day-to-day functioning of a unit. A works committee is a purely consultative body and not a negotiating body.
The committee offers- (a) Greater participation to worker in day-today affairs; (b) Ensures close mutual interaction between labour and management; (c) Generates a cooperative atmosphere for negotiations between the two parties; (d) Opens the door for unions to have a clear view of what is going on within the unit and (e) Strengthens the spirit of voluntary settlement of disputes.
ADVERTISEMENTS:
A number of issues come under the purview of works committees like wages, benefits, bonus, hours of work, terms and conditions of employment, welfare measures, training, transfers, etc. The Tata Iron and Steel Company (TISCO, Jamshedpur) was the first to create a works committee way back in 1920.
Till the end of Second World War, employers have not realised the importance of works committees and as a result, very few works committees came into existence.
The Industrial Disputes Act, 1947, legalised the establishment of works committees at the plant level. Though a large number of committees were established in the central sphere, only 530 committees were operational at the end of 1987 (in 1952, 2075 works committees were in existence!).
Works committees in India did not succeed on account of several reasons. The scope and functions of these committees were not clearly defined. The advisory nature of the committee did not help matters either.
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The committee, in the absence of legal powers, could not enforce its own decisions. Multiple unions had their representatives in the same committee at the plant level. This had only escalated tensions among members. Often, employers used these committees (filled with their own ‘yes’ men) to fight workers’ associations.
To complicate matters further, unions did not welcome the formation of these committees fearing dilution of their power. Unions looked upon these as their rivals.
Many works committees do not function at all, for they exist only on paper. They do not meet at regular intervals and do not discuss matters of real importance. According to the National Commission on Labour (1969), the advisory nature of works committees, the recommendations, vagueness regarding their exact scope, their functions, inter-union rivalries, union opposition and reluctance of employees to utilise such media have rendered works committees ineffective.
B. Joint Management Councils (JMCs):
ADVERTISEMENTS:
In the Industrial Policy Resolution 1956, the need for joint management councils consisting of representatives of management, technicians and workers was emphasised. Management must supply facts regarding the working of a unit and the council discusses various matters across the table and recommends steps for improving efficiency.
The main features of the scheme are given below:
i. The scheme is voluntary, not obligatory.
ii. The JMC should consist of equal numbers of representatives of workers and employers (minimum 6 and maximum 12).
ADVERTISEMENTS:
iii. JMCs should look after three areas- (a) information sharing (b) consultative and (c) administrative. Matters relating to welfare, safety, training, holiday schedules, formulation of standing orders, etc., all come under the above three categories.
iv. Decisions of the JMC should be unanimous and should be implemented without any delay.
v. The JMCs should not encroach on the jurisdiction of works committees.
vi. The JMC members should be given proper training.
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vii. Representation of workers to the JMCs should be based on nominations by the recognised union.
viii. Initially JMCs should be constituted in a large number of public and private sector units being over 500 or more workers where there is a strong trade union, and where the labour-management relations are sound.
Originally, the idea was to be implemented in over 150 units, but at present about 80 are operating in public sector units such as Hindustan Insecticides, HMT, Indian Airlines, Air India, etc. and in a large number of private sector units such as TISCO, Arvind Mills, Modi Spinners and Weaving Mills, Travancore Rubber Works, etc. The experiment has not succeeded in India.
As one expert commented, “the works committees and the joint councils have failed … It is living in a fool’s paradise to believe that labour will be an active partner in management”. Factors such as lack of interest on the part of workers, union rivalries, unfavourable management attitudes, etc., are mainly responsible for the unsatisfactory performance of JMCs in India.
Method # 3. Standing Orders:
The term ‘Standing Orders’ refers to the rules and regulations which govern the conditions of employment of workers. They specify the duties and responsibilities of both employers and employees. Through standing orders, the conditions of employment are sought to be regularised, paving the way for industrial peace and harmony.
The Industrial Employment (standing orders) Act of 1946 provides for the framing of standing orders in all industrial undertakings employing 100 or more workers As per the provisions of the Act, employers have to formulate standing orders in consultation with workers and submit to a certifying officer.
ADVERTISEMENTS:
The matters to be highlighted therein are- (a) Classification of employees, (b) Hours of work, holidays, paydays, wage rates, (c) Shift working, (d) Attendance and late coming, (e) Leave rules, (f) Temporary stoppages of work, (g) Termination, suspension and disciplinary actions, etc. The certified copies of the standing orders must be displayed prominently inside the undertaking. Once certified, the standing orders are binding on the employer and the employees.
Violation of conditions mentioned therein invite penalties. The Labour Commissioner (Deputy Labour Commissioner, Regional Labour Commissioner) exercises the powers of certifying officer and in that capacity has all the powers of a civil court. The Act has been amended a number of times, the latest in 1982. The 1982 Act provides for the payment of a subsistence allowance to workers who are placed under suspension.
Method # 4. Grievance Procedure:
A grievance may be defined as “any real or imagined feeling or personal injustice which an employee has concerning his employment relationship”. Grievances have to be redressed promptly. Any attempt to suppress them may backfire and may find expression in violent forms later on.
A model grievance procedure, as suggested by the Indian Labour Conference, 1958, has more or less been widely accepted now in India. Under this model, both the employer and the workers are expected to follow certain steps so as to put out the frictions between them. Another method commonly used to prevent industrial disputes is Workers’ Participation in Management.
Method # 5. Code of Discipline:
Over the years, several legislative measures have been adopted in India to promote discipline and harmony between employees and employers. Sad to relate, the results have not been very encouraging. As a remedy, the Second Five Year Plan has suggested that both employees and employers must formulate and abide by a voluntary Code of Discipline.
In pursuance of this suggestion, the Fifteenth Indian Labour Conference suggested a Code of Discipline in 1957.
The Central National Labour Organisations (INTUC, AITUC, HMS, UTUC) and Employers’ Associations (EFI, AIOIE, AIMO) have agreed to enforce the code with effect from June 1, 1958. The code aims at preventing disputes by providing for voluntary and mutual settlement of disputes through negotiations without the interference of an outside agency.
The principles regulating the conduct of the employer and the employee, as provided for in the code, may be listed thus:
i. Obligations of Both Parties:
a. It restrains both employers and employees from unilateral action. Both parties must recognise each other’s rights and obligations and settle disputes through the existing machinery for the settlement of disputes.
b. The parties should not indulge in strikes and lockouts without notice or without exploring possibilities to resolve disputes through negotiations.
c. Neither party will resort to coercion, intimidation, victimisation or litigation or adopt unfair labour practices (e.g., go slow, sit down strike, etc.).
d. Both employers and unions will educate workers regarding their obligations and agree to follow a mutually agreed grievance procedure.
ii. Obligations of Employer:
Management agrees not to increase workload without prior agreement with workers, discourages unfair labour practices, takes prompt action to redress grievances, displays the code in prominent places, agrees to implement all awards and agreements, take disciplinary action against officers / members who instigate workers and agrees to recognise a representative union.
iii. Obligations of Unions:
Unions agree not to indulge in physical duress, not to permit employees to do union work during working hours, discourage negligence of duty, careless operations, damage to property, insubordination and take action against office bearers who work against the spirit of the code.
The code does not have any legal sanction. However, the central employers and workers’ organisations agree to impose certain moral sanctions against erring members such as seeking explanations for infringement of provisions, criticising them for not following the code, give wide publicity to the fact that a particular unit is working against the code, etc.
Evaluation of Code of Discipline:
At present, the code has been accepted by about 200 individual employers and about 170 trade unions, in addition to the support extended by the central organisations of workers and employers. Barring railways, Port and Docks and undertakings under the Ministry of Defence, the code is applicable to all public sector units. The LIC, SBI and RBI have also accepted it.
The focus of the code in the early years was on compliance, i.e., asking the parties to abide by certain basic provisions and discouraging all violations in tripartite committees. The Third Plan felt that the code had a healthy influence on employer-employees relationship and definitively had a restraining and sobering impact on both the parties.
The National Commission on Labour (NCL), however, highlighted certain black spots:
The code failed because the parties did not have a genuine desire to support it whole heartedly.
a. Conflicts between the code and the law.
b. Union rivalries, inflationary pressures, the state of indiscipline in the body politic reasons beyond the control of employer, etc.
The remedy the situation, NCL wanted the Government to give legal shape to certain provisions such as:
a. Recognising unions as bargaining agents.
b. Setting up a grievance machinery.
c. Prohibiting strikes / lockouts without notice.
d. Imposing penalties for unfair labour practices.
e. Providing for voluntary arbitration.
How do you Settle Industrial Disputes – Provisions according to the Industrial Disputes Act, 1947: 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:
Provision # 1. Conciliation:
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:
a. The conciliator tries to bridge the gulf between the parties, if possible.
b. 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.
c. 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.
d. 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 judgement on the issues. If parties feel that the suggestions offered by the conciliator are acceptable, they may strike a deal.
e. 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:
i. Conciliation Officer:
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 judgement within 14 days of the commencement of the conciliation proceedings.
His judgement 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”.
ii. Board of Conciliation:
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.
iii. Court of Enquiry:
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.
Provision # 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 judgement on the dispute. He, however, does not enjoy judicial powers. The arbitrator submits his judgement 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 judgement, the arbitrator is expected to follow due procedure of giving notice to parties, giving a fair hearing, relying upon all available evidence 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 wholeheartedly.
The main hurdles that came in the way were:
a. Dearth of suitable arbitrators enjoying the confidence of disputing parties.
b. The complicated procedure to be followed in voluntary arbitration.
c. The payment of arbitration fees. Unions can seldom afford to pay such fees equally with management.
d. The absence of recognised unions which could bind the workers to a common agreement.
e. Easy availability of adjudication in case of failure of conciliation or negotiation.
f. 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.
Provision # 3. Adjudication:
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.
a. Labour Court:
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- (i) the propriety or legality of an order passed by employer under the standing orders; (ii) the application and interpretation of standing orders; (iii) discharge or dismissal of workers including reinstatement of, or grant of relief to wrongly dismissed persons; (iv) withdrawal of any statutory concession or privilege; (v) illegality or otherwise of a strike or lockout; and (vi) all matters except those reserved for industrial tribunals.
b. Industrial Tribunal:
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- (i) wages including the period and mode of payment; (ii) compensatory and other allowances; (iii) hours of work and rest periods; (iv) leave with wages and holidays; (v) bonus, profit sharing, provident fund and gratuity; (vi) shift working, otherwise than in accordance with the standing orders; (vii) classification by grades; (viii) rules of discipline; (ix) rationalisation; (x) retrenchment and closure of establishments; and (xi) any other matter that may be prescribed.
c. National Tribunal:
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.
Appraisal:
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 criticised thus- (a) on the procedural plane, adjudication is dilatory, expensive and discriminatory as the power of reference vests with the appropriate government and (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. (Ramaswamy; P. Verma; Srivastava; C. S. Venkata Ratnam; Celestine).
How do you Settle Industrial Disputes – General Methods of Settlement: Investigation, Mediation, Conciliation, Voluntary Arbitration and Adjudication
Industrial disputes mean any conflict, unrest or dissention between the workers and the management on any ground.
“Industrial strikes constitute militant and organised protest against existing industrial condition. They are symptoms of industrial unrest in the same way that boils are symptoms of a disorder of body.” (Patterson)
According to industrial disputes Act, 1947, “Industrial dispute is any disputes or difference between the employers and employees or between employers and workmen or workmen and workmen, which is concerned with the employment or the terms of employment or with conditions of labour or any person.”
For dispute to become an industrial dispute it should satisfy the following essentials:
(a) It is connected with the employment or non-employment or the terms of employment or with the conditions of labour of any person or it must be pertaining to any industrial matter.
(b) A workman’s wages do not exceed Rs. 1,000 per month.
(c) There must be a dispute or a difference –
(i) Between employers and employers
(ii) Between workmen and employers.
(iii) Between workmen and workmen.
(iv) The relationship between the employer and the workman should be in existence and should be the result of the contract and the workman actually employed.
(v) It should be related to working industry.
The methods of settlement of conflicts generally include:
(1) Investigation.
(2) Mediation.
(3) Conciliation.
(4) Voluntary Arbitration.
(5) Compulsory Arbitration/Adjudication.
Method # 1. Investigation:
This is conducted by a board or court appointed by the government. It may be voluntary or compulsory. If the investigation is conducted on an application by either or both the parties to the dispute, it is voluntary. If the Government appoints a Court of Inquiry to investigate into a dispute without the consent of the parties, it is compulsory. Investigations do not aim at bringing about the settlement of disputes directly, but by analysing the facts they aim at bringing about an amicable solution.
When the investigation is compulsory, the strikes and lock-outs are required to be stopped and employers should not make any change in the conditions of employment. The result of investigation has no serious effect on the disputes because the general public is least bothered to make note of disputes.
Method # 2. Mediation:
Another attempt to settle disputes is through mediation. In this method, an outsider assists the parties in their negotiations. It takes place with the consent of both the parties. The mediator performs the messenger’s job for both the parties and he neither imposes his will nor his judgment upon them. The main aim of mediation is the settlement of disputes by bringing about a voluntary agreement.
There may be three kinds of mediation:
(i) The Eminent Outsider;
(ii) Non-Government Board; and
(iii) Semi-Governmental Board.
If mediation is conducted skillfully and sympathetically along proper lines, it can bring about the adjustment of differences that might otherwise contribute to stoppage of work.
Method # 3. Conciliation:
The main objective of a conciliation and arbitration is to reunite the two conflicting groups in industry in order to avoid interruption of production, distrust etc.
Conciliation is a process by which representatives of both workers and employers are brought together before a third party with a view to persuading them arrive at some sort of settlement. Conciliation is an extension of collective bargaining with third party assistance. It is the practice by which the services of 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 discussions of differences between the parties to a dispute under the guidance of a conciliator.
Conciliation machinery consists of a conciliation officer and board of conciliations. The conciliator induces the parties to a course of action. He plays the roles of an innovator, protector, discussion leader, stimulator, advisor and a face saver. He acts as a safety valve and a communication link.
The task of conciliation is to offer advice and make suggestions to the parties to the dispute on controversial issues.
a. As a Discussion Leader:
The conciliator reduces irrationality and antagonism between the parties. He guides them towards a problem-solving approach to their dispute; he ensures that they discuss their differences in as friendly a manner as possible; he helps them to analyse their problem, always striving to keep the analysis on rational ground; he identifies the elements of the problem, both for the parties’ benefit and for his own.
b. As a Safety Valve:
The conciliator places him/her in the position of alternative target when he feels that the parties are in an aggressive mood. By setting a substitute target, the parties can achieve an emotional release without direct and immediate damage to the negotiations.
c. As a Communication Link:
The conciliator fulfils an important function as a communication link between the parties: serving as a communication link may either constitute his main conciliatory effort or be a contribution to it. He/she not only works as a conduit through which messages relayed from one side to the other, are passed, but he also provides a thorough explanation and interprets the intention of the party.
d. As an Innovator:
The conciliator acts as an invaluable source of new information, and new thoughts, particularly in providing the parties with different views of the issues, with possible alternative solution and possibly an entirely new approach.
e. As a Sounding Board:
He is often described as a “flying ambulance squad” appearing whenever or wherever a collision or conflict, which threatens to disturb harmonious relationship, occurs or is apprehended to occur between the interests of the parties. He may indicate the parties which of their own arguments, defences and supports cannot stand under a rational searching enquiry.
f. As a Protector:
The conciliator plays a protecting role for making the parties ready for collective bargaining positions by exploring alternative solutions during separate meetings.
g. As a Fail-Safe Device:
The conciliator often assists a party which has overstated its position to the extent of bluff or exaggeration of its reaction to some move on the part of the other; or taken a clearly untenable stance to withdraw gracefully under the banner of reason.
h. As a Stimulator:
Sensing the need for positive action, the conciliator can provide necessary impulse; he makes a concise statement, supplies some data, gives a hint or suggestion. He crystallises changes of opinion, in course of discussions, by intervening at the appropriate moment and giving such ideas a concrete form.
i. As an Adviser:
The conciliator tries to remove misunderstandings regarding the other’s position, intentions and capabilities. He tries to see that such misinterpretations do not occur and that each side thoroughly understands the other’s point of view obtains a picture of the opponent’s strength and realises its own limitations and weaknesses.
j. As a Face Saver:
When a party knows from the outset or realises during the course of proceedings that it has a weak case and can hope for little success in pursuing the dispute. The people concerned are often reluctant to admit defeat, because they feel that this will involve them in a loss of face, or prestige, with their members or with the public. In such situations, conciliator may device a form of announcing settlement, which apparently make some small concession to the party c3ncerned but which in reality gives it little or nothing.
k. As a Promoter of Collective Bargaining:
While intervening in a dispute he is not only concerned with obtaining settlement, but often he assists and promotes collective bargaining and helps and guides the parties in the development of their relationship.
Thus, a conciliator has to play a wide variety of roles. When a strike or lock-out is threatened it is his duty to advise the party concerned on the legality of the proposed action and to use all his powers of pursuing so that at least the action can be postponed while conciliation is going on. He makes all efforts to persuade the parties against violent or disorderly behaviour in carrying out the proposed action which might lead to bitterness. He also tries to bring the parties together to negotiate before the factory is shut down or any damage to equipment or property is done. He also ensures that work is immediately resumed when the strike or lock-out is terminated.
Criticisms against Conciliation:
(i) The work of conciliation is often delegated by the State Governments to the officers of the Labour Department, who are already over-burdened and, therefore, cannot do full justice in the matter. In actual practice these officers act only “as post offices” and do little to conciliate disputes.
(ii) Most of the conciliation officers are young, inexperienced and untrained who have no thorough training in the act of mediation.
(iii)Conciliation proceedings are abused and misused by the parties.
(iv) It has been said that even when labour and employers reach an agreement without the help of the conciliators. The written document is frequently initiated and approved by the State Labour Commissioner and this can then be reported as settled through conciliation.
(v) Conciliation is looked upon very often by the parties as merely a hurdle to be crossed for reaching the next stage.
(vi) Outside interference has been common in the working of this machinery. Managers grudge that political pressure is brought on them and conciliation machinery to settle the issues in favour of workers.
Suggestions for Effective Functioning of Conciliation:
To make conciliation more effective the National Commission on Labour has recommended that, “Conciliation machinery should be part of the Industrial Relations Commission, which will make it free from other influences… The independent character of the machinery will alone develop greater confidence and will be able to evoke more co – operation from the parties.
Apart from this basic change which will introduce important structural, functional and procedural changes in the working of the machinery, other measures are- (i) proper selection of personnel, (ii) adequate pre-job training, and (iii) periodic in-service training through refresher courses, seminars and conferences.
Following suggestions may be offered for improving the working of the conciliation machinery:
1. The first basic need for making the conciliation machinery a success is to free it from the clutches of any political or administrative interference. This can be achieved by assigning the control, of machinery to some autonomous body:
2. The conciliation machinery should be invested with adequate and more powers so that the parties could be forced to arrive at a conclusion which is binding and not only recommendatory in nature.
3. The mutual images of the parties towards each other need be improved so that their negative conceptions may not work like a self-fulfilling prophecy for the failure of conciliation.
4. The parties should not treat conciliation machinery as a more joy and ride and a sense of commitment towards the resolution of dispute should be inculcated among them by conciliator.
5. Conciliation should be introduced in all the industries in spite of their being public utilities or otherwise.
6. The workload of the machinery should be periodically assessed, if need be, the necessary staff should be appointed so that it may not break down under the unbearable workload which it is at present carrying.
7. The conciliation officers can be made more effective by- (i) prescribing proper qualifications for a conciliation officer and improving his qualities by proper selection and training, (ii) enhancing their status for dealing with persons who appear before them, (iii) delegating appropriate authority to these officers, and (iv) minimising political interference.
Method # 4. Voluntary Arbitration:
If the two parties to the dispute fail to come to an agreement, either by themselves or with the help of a mediator or conciliator agree to submit the dispute to an impartial authority, whose decision, they are ready to accept.
The essential elements in voluntary arbitration are:
i. The voluntary submission of dispute to an arbitrator;
ii. The subsequent attendance of witness and investigations;
iii. The enforcement of an award may not be necessary.
Essential Elements of Voluntary Arbitration:
Essentials of voluntary arbitration are:
i. The voluntary submission of dispute to an arbitrator;
ii. The subsequent attendance of witness and investigations;
iii. The enforcement of an award may not be necessary and binding because there is no compulsion. But generally, the acceptance of an arbitration implies the acceptance of its award — be it favourable or unfavourable; and
iv. Voluntary arbitration may be specially needed for disputes arising under agreements.
Advantages of Arbitration:
Advantages of Arbitration include:
1. Since it is established by the parties themselves, arbitration has the particular advantage of bringing the dispute settlement procedure down to the level of the parties to dispute.
2. Since arbitration is established by agreement, it is more flexible than other procedures.
3. This procedure, operating on the level closest to the parties to disputes, has the advantage of enabling the arbitrators to acquire a much greater familiarity with the characteristics of the particular industry or undertaking concerned than most courts or tribunals.
4. The procedure is relatively expeditious when compared to ordinary courts or labour tribunals. It cuts down delays and results in prompt settlement of differences.
5. It is informal in character and on that account as well, because the disputes are handled by the parties themselves often without recourse to lawyers, it tends to be less expensive than other procedures.
6. Awards are capable of implementation without any grudge on the part of both the parties at dispute and do not lead to further chances of litigation.
7. Since it is based on the consent of both the parties it helps building up a sound base for healthy industrial relations, mutual understanding and cooperation.
8. It is popular because it is suitable and compelling. It is far better than a costly work- stoppage, even though not wholly satisfactory from either parties’ point of views.
Disadvantages of Arbitration:
Disadvantages of Arbitration include:
1. It deprives the labour of its right to go on strike.
2. Judgment is often arbitrary and ill-advised as the arbitrators are not well-versed in the economic and technical aspects of industry.
3. Arbitrators are often biased against labour and their award is, therefore, usually not in favour of the labour.
4. Delay often occurs in arriving at the award and settlement of disputes. This leads to break down in the morale of members.
5. Though arbitration is an essential element in the creation of better labour-management relations, its availability may lead to less dependence of negotiation and conditions imposed by a third party may be resented.
6. Too much arbitration is not a sign of healthy relationship. Parties who find it necessary to leave the disposition of disputes to third parties do so often because they have not learnt how to solve their own problems, how to live with one another. Therefore, too frequent arbitration is not only costly and time-consuming but it also promotes a hostile and rigid relationship between the parties.
Reference of Dispute to Arbitration under the Industrial Disputes Act, 1947:
Under the Industrial Disputes Act, 1947, a dispute may be referred to arbitration, under following conditions:
(a) An industrial Dispute exists or is apprehended in an establishment;
(b) The employer and the workmen of that establishment agree, in writing, to refer the dispute to arbitration;
(c) Arbitration agreement is in the prescribed form and signed by the parties to it in the prescribed manner;
(d) The agreement must be accompanied by the consent, in writing, of the arbitration or arbitrators;
(e) The dispute must be referred to arbitration at any time before it has been referred to a Labour Court or Tribunal or a National Tribunal;
(f) The reference must be to certain person or persons specified in the arbitration agreement to act as a arbitrator/arbitrators;
(g) The arbitration agreement must set forth the issue/issues to be decided by the arbitration procedure and a copy of the agreements is forwarded to the Government and the Conciliation Officer.
National Arbitration Promotion Board:
To make voluntary arbitration more acceptable to the parties and to coordinate efforts for its promotion the government appointed in July 1967, a National Arbitration Promotion Board with a tripartite composition.
The functions of the Board are:
(i) To review the position periodically;
(ii) To examine the factors inhibiting wider acceptance of this procedure and suggest measures to make it more popular;
(iii) To compile and maintain up-to-date panels of suitable arbitrators for different areas and industries and to lay down their fees;
(iv) To evolve principles, norms and procedure for guidance of arbitrator and the parties;
(v) To advise parties, in important cases, to accept arbitration for resolving disputes so that litigation in courts is avoided;
(vi) To look into the cause of delay and expedite arbitration proceedings wherever necessary.
(vii)To specify, from time to time, the types of disputes which would normally be settled by arbitration in the light of tripartite decisions.
Method # 5. Compulsory Arbitration/Adjudication:
Where trade unions are weak the method of Compulsory Arbitration is used. Compulsory Arbitration is utilised generally when the parties fail to arrive at a settlement through the voluntary methods.
In India, Compulsory Arbitration is enforced because collective bargaining was not used for regulating wages and other conditions of employment.
It may be said that compulsory arbitration may be at times and under certain circumstances, necessary and desirable. The nature, scale and timing of state intervention should be suited to the needs of different occasions. The objective of state intervention in the field of industrial relations should be to do social justice and make the weaker party equally strong to enable it ultimately to stand on its own legs and settle its differences through negotiations and collective bargaining.
Compulsory arbitration is one where the parties are required to arbitrate without any willingness on their part. Any one of the parties may apply to the appropriate governments to refer the dispute to adjudication machinery.
Under compulsory arbitration, the parties are forced to arbitration by the State when:
(i) The parties fail to arrive at a settlement by voluntary method; or
(ii) When there is a national emergency which requires that wheels of production should not be obstructed by frequent work-stoppages; or
(iii) The country is passing through grave economic crisis; or
(iv) There is a grave public dissatisfaction with the existing industrial relations; or
(v) When industries of strategic importance are involved; or
(vi) Parties are ill balanced, i.e., where the unions are weak, ill-organised, and powerless and the means of production are in the hands of the capitalists who are well-organised and more powerful; or
(vii)Where public interest and the working conditions are desired to be safeguarded that regulated by the State. Compulsory arbitration leaves no scope for strikes and lock-outs and thus deprives both the parties of their very important and fundamental rights.
How do you Settle Industrial Disputes – Statutory and Voluntary Arrangements for the Prevention and Settlement of Industrial Disputes
The existing arrangement for the prevention and settlement of industrial disputes consists of:
1. Statutory procedures, and
2. Voluntary arrangements.
1. Statutory procedures are covered by the Industrial Disputes Act, 1947, and certain similar State enactments. The industrial relations machinery as provided in the industrial jurisprudence has four main organs, namely- (i) works/joint committee, (ii) conciliation, (iii) arbitration and (iv) adjudication.
2. Voluntary arrangements provide inter alia for recognition of unions; where no statutory provisions for it exist, the framing of a grievance procedure, reference of disputes to voluntary arbitration, setting up of joint management councils, implementation of agreements, settlements and awards and the setting up of industry-wise wage boards.
1. Statutory Procedures:
We discuss now the salient features of the four main organs of the industrial relations machinery, viz.-
i. Works/joint committee,
ii. Conciliation,
iii. Arbitration and
iv. Adjudication.
Among voluntary arrangements, the Code of Discipline (1958) and the Industrial Truce Resolution (1962) which help in the promotion and maintenance of good industrial relations are also discussed.
i. Works Committees:
The Industrial Disputes Act, 1947, provides for the setting up of a Works Committee, consisting of representatives of management and employees, in every undertaking employing 100 or more workmen.
The duty of the Works Committee is:
a. To promote measures for securing and preserving amity and good relations between employers and workmen;
b. To comment upon matters of their common interest or concern; and
c. To endeavour to compose any material difference of opinion in respect of such matters.
The Committee is constituted of an equal number of representatives of the employers and employees. The representatives of workers are to be chosen from among the workmen engaged in an establishment. The recommendations of the Works Committee are recommendatory and not binding.
They might carry weight but they are not conclusive. The Works Committee is not designed to supplant or supersede the workers’ union for the purpose of collective bargaining.
In 1951, the number of Works Committees set up was 1,142. It rose to 3,133 in 1965-66, but came down drastically to 752 in 1974 and 561 at the beginning of 1989. Several research studies have shown that these committees have not proved effective. It is primarily because of the fact that such committees do not have the power to enter into an agreement with an employer on behalf of workmen and a change in any condition of service accepted by the Works Committee does not bind Workmen.
The National Commission on Labour recommended that the effectiveness of these committees will depend on:
(a) A more responsive attitude on the part of management;
(b) An adequate support from unions;
(c) A proper appreciation of the scope and recommendations of the works committees; and
(d) A proper coordination of the functions of the multiple bipartite institutions at the plant level now in vogue.
ii. Conciliation:
The aim of conciliation is to bring about a settlement in disputes through third party intervention. The conciliation machinery can take note of a dispute or apprehended dispute either on its own or when approached by either party. Conciliation may be either voluntary or compulsory.
Under the method of voluntary conciliation, the State provides the conciliation machinery which may be used by the disputants whenever they require it. Under compulsory conciliation, the State is not content with the mere creation of a conciliation service but it imposes an obligation on the parties to submit their disputes to conciliation service.
Under the Industrial Disputes Act, 1947, conciliation is compulsory in all disputes in public utility services and voluntary in other industrial establishments. Over the years, the voluntary provisions appear to be acquiring a compulsory status in non-public utilities also.
A major defect of the conciliation machinery has been that it has involved unnecessary delays. Delays in conciliation are attributed partly to an excessive workload on officers and partly to procedural defects.
In order to enable the conciliation machinery to play an effective role in the settlement of industrial disputes the national commission on Labour has made the following significant recommendations:
(a) Conciliation can be more effective if it is freed from outside influence and the conciliation machinery is adequately staffed. The independent character of the machinery will alone inspire greater confidence and will be able to evoke more cooperation from the parties. The conciliation machinery should, therefore, be a part of the proposed Industrial Relations Commission.
(b) There is a need for certain other measures to enable the officers to function effectively.
Among these the more important are:
(1) Prescribing proper qualifications for a conciliation officer and improving his quality by proper selection and training;
(2) Enhancing his status appropriately for dealing with persons who appear before him;
(3) Giving him additional powers as a conciliator; and
(4) Keeping him above political interference.
iii. Arbitration:
Voluntary arbitration as a method of resolving industrial conflicts has been sought to be promoted by the Government. However, it has not found favour with the disputing parties. There has been a declining trend in the acceptance of arbitration for settling disputes between labour and management.
Factors which have contributed to the slow progress of arbitration have been identified by the national commission on Labour as follows:
a. Easy availability of adjudication in case of failure of negotiations;
b. Dearth of suitable arbitrators who command the confidence of both parties;
c. Absence of recognised unions which could bind workers to common agreements:
d. Legal obstacles;
e. The fact that in law no appeal was competent against an arbitrator’s award;
f. Absence of a simplified procedure to be followed in voluntary arbitration; and
g. Cost to the parties, particularly workers.
However, the Commission feels that “with the growth of collective bargaining and the general acceptance of recognition of representative unions and improved management attitude, the ground will be cleared, at least to some extent, for wider acceptance of voluntary arbitration.”
iv. Adjudication:
The ultimate legal remedy for the settlement of an unresolved dispute is its reference to adjudication by the Government. Adjudication involves intervention in the dispute by a third party appointed by the Government for the purpose of deciding the nature of final settlement.
Under the industrial Disputes Act, 1947, there obtains a three-tier adjudication machinery consisting of:
a. Labour courts,
b. Industrial tribunals,
c. National tribunals.
a. Labour Court:
A labour court consists of one person only, who is normally a sitting or an ex-judge of a High Court. Labour courts adjudicate in the following matters- (1) The propriety or legality of an order passed by an employer under the standing orders; (2) The application and interpretation of standing orders; (3) Discharge or dismissal of workmen including reinstatement of, or grant of relief to workmen wrongfully dismissed; (4) Withdrawal of any customary concession or privilege; (5) Illegality or otherwise of a strike or a lockout; and (6) All other matters not reserved for the industrial tribunals or national tribunals.
Labour courts set up under State legislation also deal with similar, issues. Legal practitioners are permitted to appear before the labour courts or tribunals with the consent of the other party and with the permission of the court. In the latter case, according to experience so far, the consent has become a mere formality. The Industrial Disputes Act, 1947, does not provide for appeal against an order of the labour court.
b. Industrial Tribunals:
Industrial tribunals constitute the second tier of adjudication machinery. It may consist of a sitting or a previous judge of a High Court.
Industrial tribunals can adjudicate on the following matters-
(1) Wages, including the period and mode of payment;
(2) Compensatory and other allowances;
(3) Hours of work and rest intervals;
(4) Leave with wages and holidays;
(5) Bonus, profit sharing, provident fund and gratuity;
(6) Shift working, otherwise than in accordance with the standing orders;
(7) Classification by grades;
(8) Rules of discipline;
(9) Rationalisation; and
(10) Retrenchment of workmen and closure of establishment.
The Government has the power to constitute a tribunal for a limited/specified period only. If the tribunal fails to dispose of the matter referred to it before the expiry of the specified period, the Government may constitute a new tribunal and refer to it the pending dispute. The new tribunal has the discretion either to continue with the proceedings where it was left off or to hear the whole dispute de novo.
c. National Tribunal:
The Government may appoint a National Tribunal when a question of national importance arises, or when industrial establishments located in more than one State are involved. In case of public utility concerns, the reference of a dispute to tribunal is compulsory unless the notice of strike is frivolous or vexatious.
In the case of non-public utility concerns, the reference to tribunal is entirely at the discretion of the Government concerned. The award of the tribunal is submitted to the Government which has the power to modify or reject it if it is considered necessary in public interest.
It cannot be denied that during the last four decades the adjudication machinery has exercised a considerable influence on several aspects of conditions of work and labour- management relations. Adjudication has been one of the instruments for improvement of wages and working conditions and for securing allowances for maintaining real wages, for standardisation of wages, bonus and introducing uniformity in benefits and amenities.
It has also prevented many work stoppages by providing an acceptable alternative to direct action and to protect and promote the interests of weaker sections of the working class who were not well organised or were unable to bargain on an equal footing with the employer.
But against these advantages, adjudication has been criticised on the following grounds:
First, adjudication suffers from certain procedural defects. Adjudication is dilatory, expensive and even discriminatory as the power of reference vests with the Government. As V.V. Giri put in- “Where one party has lost and the other has won, the victor and the vanquished get back to their work in sullen and resentful mood towards each other, and neither can forget nor forgive. The loser awaits the next opportunity to make good the loss, while the winner is carried away by a sense of victory which is not conducive to co-operation. Such an attitude of suppressed hostility in one party and an unconcealed satisfaction and’ triumph in the other may lead to transient truce but not lasting peace.”
Secondly, the system of adjudication has failed to achieve industrial peace; it has prevented the growth of unions and has prevented voluntary settlement of industrial disputes and growth of collective bargaining.
In short, adjudication, which was expected to be a temporary measure till such time as labour come of age and could bargain with employers on an equal footing, has failed to fulfil the expectations. Adjudication has inhibited the growth of trade unions and made them litigious. There is a need, therefore, for evolving a new machinery which should be based on the principles of collective bargaining.
Collective bargaining takes place “when a number of work people enter negotiations as a bargaining unit with an employer or group of employers with the object of reaching agreement on conditions of employment for the work people concerned.”
Collective agreements between employers and workmen are of three types:
(i) Agreements which are drawn up after direct negotiations between the parties and are purely voluntary in character for the purpose of their implementation;
(ii) Arrangements which combine the elements of voluntariness and compulsion, i.e., those negotiated by the parties but registered before a conciliator as settlements; and
(iii) Agreements which acquire legal status because of successful discussion between the parties when the matters in dispute are under reference to industrial tribunals and can be considered sub-judice, the agreements reached being recorded as consent awards.
To be effective, the collective bargaining should have the following important prerequisites:
(i) An enlightened management,
(ii) A well-developed trade union,
(iii) Unanimity of objectives,
(iv) Willingness to adopt scientific norms, and
(v) Adequate delegated authority.
To promote collective bargaining, the adjudication of labour disputes is needed to function in a manner so as to supplement rather supplant collective bargaining.
2. Voluntary Arrangements:
Statutory procedures are supplemented by voluntary arrangements.
We discuss below the more important of these arrangements:
i. Code of Discipline:
The Code of Discipline, requiring employers and workers to utilise the existing machinery for the settlement of disputes and avoiding direct action, was evolved at the Indian Labour Conference in 1958. It has been accepted by all the central organisations of employers and workers.
The broad features of the code are as follows:
a. It prohibits strikes and lock-outs without prior notice as also intimidation, victimisation and the adoption of ‘go-slow’ tactics by workers.
b. No one-sided action can be taken by either party in any matter.
c. All disputes must be settled through the existing machinery set up by the Government for this purpose.
d. A common grievance procedure for the settlement of disputes after full investigation has been provided for.
e. The employers will not increase workload without prior agreement with the workers.
f. The employers will provide all facilities for an unfettered growth of trade unions. To this end, they should discourage the use of unfair labour practices like victimisation of the members of recognised trade unions.
g. Prompt action will be taken against those officers whose conduct provokes labour to breach of discipline.
h. The workers will not indulge in any trade union activity during working hours, nor will they engage in any demonstration or activity that is not peaceful.
i. The workers will implement their part of the awards and settlement promptly and will take action against those office-bearers of the trade unions who are guilty of violating the code.
j. The unions will discourage negligence of duty, careless operation, damage to property, disturbance of normal work and insubordination.
ii. Industrial Truce Resolution:
In view of the National Emergency proclaimed in 1962 in the wake of the Chinese aggression, a joint meeting of the central organisations of employers and workers was convened on November 3, 1962. At this meeting an Industrial Truce Resolution was adopted.
It laid down that there would be no interruption or slowing down of production; on the other hand, production will be maximised and defense effort promoted in all possible ways. A standing committee with the Union Minister of Labour and Employment as chairman was set up in August 1983 to view the working of the Truce Resolution. It has since been merged with the Central Implementation and Evaluation Committee.
iii. Workers’ Participation in Management:
A scheme for workers’ participation in industry at shop-floor and plant levels applicable to manufacturing and mining units employing 500 or more workers was introduced in October 1975. Another scheme for workers participation in management in commercial and service organisations in the public sector, having large-scale public dealing and employing at least 100 persons, was announced in January 1977.
Critical Evaluation of Industrial Relations Machinery:
From the foregoing review of the statutory procedures and voluntary arrangements concerning industrial relations in India, the following conclusions can be drawn:
First, the voluntary framework of policies and programmes has remained a pious hope only; industrial relations continue to be guided and moulded by the statutory obligations placed under the law.
Secondly, industrial relations rely rather heavily on adjudication and third party intervention in disputes. Collective bargaining and mutual agreements between the parties at dispute have been by and large ignored.
Thirdly, barring the legislation of a few States, which provide for a statutory recognition of representative unions, no other Central or State Act makes this provision. In the absence of a statutory provision employers are expected to follow the criteria laid down for this purpose in the Voluntary Code of Discipline.
This Code, however, does not distinguish between a recognised and an unrecognised union. An unrecognised union though it may not be truly representative in character, gets as much hearing as the other. This tendency adversely affects the growth of industrial democracy.
Finally, our labour laws are essentially paternalistic in character; they do not give much scope for free trade union activity. This hinders the growth of trade unions. It becomes difficult to distinguish between efficient and inefficient unions.
To conclude, it may be stated that the present industrial relations machinery in India is not responsive to the needs of the hour. Keeping in view the democratic framework of our society, collective bargaining with its variations should be the main plank of industrial relations and mediation and arbitration its extensions to resolve the differences not settled at the bargaining table.
With an appropriate legal framework, progressive labour policy and a competent specialised agency the sub-system of disputes settlement would not only help to build up and strengthen the relations between labour and management but to evolve a mature industrial relations system.
How do you Settle Industrial Disputes – Methods for the Prevention of Industrial Disputes and Machinery for the Settlement of Industrial Disputes
Industrial disputes like strikes and lockouts pose a grave social serious problem for industrial peace. The grave industrial and social dislocation caused by them has underlined the importance of preserving industrial peace. Hence various types of measures have been taken to restore industrial peace in India.
These can be broadly divided into the following groups:
1. Methods to prevent industrial peace, and
2. Machinery for settlement of industrial disputes.
1. Methods for the Prevention of Industrial Disputes:
Prevention is always better than cure. The methods for the prevention of industrial disputes include broadly all the methods which directly or indirectly contribute towards improvement of industrial relations.
The preventive methods, therefore, cover the entire field of relations between industry and labour and include enactment and enforcement of progressive legislation, works committees, wage boards, trade board, profit sharing and co-partnership, tripartite labour, machinery, education, holding out welfare work and all such measures, which can bridge the gulf between the employers and the employed.
To be specific, they are as follows:
i. Works Committees – The Industrial Disputes Act, 1947 has provided for the establishment of works committees. In cases of any industrial establishment employing 100 or more workers a work committee consisting of employers and workers is to be established with equal number of representatives.
It shall be the duty of the works committee to promote measures for securing and preserving amity and good relations among the workers and employers, to comment upon matters of their common interest and to compose any maternal differences of opinion in respect of such matters.
ii. Voluntary Discipline – Voluntary discipline is also an important way of bringing about peace. A discipline code has been adopted for this purpose.
iii. Wage Board – Wages are the root cause of various trade disputes. Hence to recommend suitable wage rates, the government has provided for the establishment of wage board for a particular industry. These boards examine the basic wage structure and suggest suitable wage rates to be paid to the workers.
iv. Standing Orders – The standing orders refer to rules and regulations governing the conditions of employment of workers. These rules provide for the basic norms for satisfactory handling of various matters related to workers. The Government of India has enacted the Industrial Employment Act, 1946 with a view to regulating the conditions, of recruitment, discharge, disciplinary action, holidays, etc.
v. Suggestion Schemes – The various industrial organisations have introduced the suggestion scheme, under which the workers can give their suggestions, sense of responsibility as well as involvement.
vi. Grievance Handling System – An efficient and quick disposal of grievance of the employees also brings industrial peace. The government has provided a model scheme for this purpose and grievances may be addressed according to the set procedure.
vii. Joint Management Councils – The establishment of joint management councils has been provided under the workers participation in management scheme. These councils also consider the matters of common interest and thus contribute to industrial peace in many ways.
viii. Collective Bargaining – The term ‘collective bargaining’ is used to describe the procedure whereby employers reach agreement about wage rates and basic conditions of labour with trade unions instead of with individual workers.
In other words it is the process of discussion and negotiation between an employer and a union resulting into an agreement or contract and the adjustment of problems arising under the agreement or contract. Thus it is an extension of the principle and practice of democracy to industry leading the industrial peace.
2. Machinery for the Settlement of Industrial Disputes:
When the measures likely to prevent the emergence of industrial disputes prove either inadequate or insufficient and a strike or lockout is apprehended or is actually declared, then the second set of methods, i.e., for the settlement of disputes comes into play.
The Industrial Disputes (Amendment) Act, 1956 provides the following machinery for settlement of disputes:
i. Internal, and
ii. External machinery.
i. Internal Machinery:
It provides of the measures which can be adopted by the management in the organisation or factory itself. Thus it involved the settlement of disputes without outside intervention.
The Industrial Disputes Act provides for the creation of the following internal machinery:
a. Works committee – A work committee is a partite body set up the plant level. In the committee, there is an equal representation both from workers and the employers. The duties to the works committee are take step to promote and secure good employees-employees relation in case of differences of opinion between the two parties, to work to bring about conciliation between them. It is an advisory body.
It is the employer who should proceed to constitute this committee and he has been enjoyed upon to consult at all stages the recognised union if it exists in the undertaking. The works committee shall have a president, a vice-president, a secretary and a joint secretary.
b. Labour welfare officer – Labour welfare officers also help in preventing the disputes and to remove the internal complaints of the workers.
ii. External Machinery:
a. Board of Conciliation:
This is the third authority created by the Act and is simply an extent of conciliation officer’s work. Unlike a conciliation officer, the board may not be a permanent body can be set up when the occasion arises. It comprises of two or more members representing parties to the dispute in equal number and a chairman who has to be an ‘independent person’. The board has the status of a civil court and can issue summons and administrator oaths.
b. Court of Enquiry:
The idea of a court of enquiry is new in this Act and has been borrowed from the British Industrial Act, 1919. Under the British Act, the minister in charge can constitute a court of enquiry to enquire into and report on die cause and circumstances of any trade dispute together with its own recommendation.
The report is given a wide publicity to arise public interest with a view to preventing any irrational step on the parties for fear of public condemnation. Setting up of court of enquiry is at the discretion of an appropriate government.
The government can refer any single or more matters connected with or relevant to the dispute or refer the whole of it to the court which can be set up irrespective of the consent of parties to dispute. Usually the court of enquiry comprises of one person. In case it has more than one member, one of them will be nourished mass chairman.
c. Conciliation Officer:
This is the second agency or authority created for conciliation proceedings. The appropriate government has been authorized to appoint one or more conciliation officer for mediation in and promoting the settlement of industrial disputes. A conciliation officer can be appointed either for a special area or for a specified industry.
The former is more common in order to avoid wasteful touring in the same area by number of officers. Though conciliation officers have certain statutory powers of entering into premises of establishment and for calling and inspecting document, they are generally expected to function through suggestion and persuasion rather than compulsion and fault finding.
In order to bring about a right settlement of a dispute a conciliation officer is given wider direction. Where it is obligatory on the parties involved in a dispute to appear him, if summoned, they are however, not bound to accept his point of view.
d. Labour Court:
Labour court is one of the adjudication authorities set up under the Act Setting up a labour court is at the discretion of the government. It is a one man court presided over by a person who has held either a judicial position in India for not less than seven years or who has been a presiding officer of a labour court constituted under any State act for not less than five years. The functions of a labour court are to adjudicate on letters referred to it by the appropriate government.
These may include:
(i) The propriety of legality of an order passed by employer under the standing order.
(ii) The application of and interpretation of standing order.
(iii) Discharge or dismissal of workmen including reinstatement of or grant of relief to workmen wrongfully dismissed.
(iv) Withdrawal of a customary concession or privilege.
(v) Legality or otherwise of a strike or a lockout.
(vi) Other matter given in Schedule (iii) of the Act.
e. Industrial Tribunals and National Tribunals:
An industrial tribunal may be set up by the appropriate government on temporary or permanent basis for a specified depute or for industry as a whole. The tribunal comprises of one person only. Where the industrial disputes in its opinion, involve question of a national importance or is of such a nature that industrial establishment situated in more than one State are like to be interested in, or affected by disputes, the Central Government may set up a national tribunal.
The function of the tribunal is to adjudicate on following matters referred to it by the government and other:
(i) Hours of work and rest interval.
(ii) Leave and wages and holidays.
(iii) Bonus, profit sharing, provident fund and gratuity.
(iv) Shift working otherwise than in accordance with standing orders.
(v) Classification of grades.
(vi) Rules of discipline.
(vii) Rationalization, retrenchment of workmen and closure of establishment.
(viii) Any other matter that may be prescribed.
iii. Voluntary Arbitration:
If the two parties to the dispute fail to come to an agreement either by themselves or with the help of a mediator or conciliator, they agree to submit the dispute to an impartial authority whose decision, they are ready to accept.
The essential elements in voluntary arbitration are:
a. The voluntary submission of to arbitration,
b. The subsequent attendance of witness and investigation.
c. The enforcement of an award may not be necessary.
Arbitration and the Industrial Disputes Act, 1947:
Sec-10 A provides that where any industrial dispute exists or is apprehended and the employer, the workmen agree to refer the disputes to arbitration, they may do also any time before the dispute has been referred to a labour court or industrial tribunal or national tribunal. The arbitrator shall investigate the dispute and submit the report to the appropriate government.
Where a dispute has been referred for arbitration, the appropriate government may prohibit the continuance of any strike or lockout which may be in existence at the time of the reference.