Industrial Disputes Prevention & Settlement

Learning Objectives
To understand
@ Different categories of disputes
@ The relevant ILO standards on industrial
disputes settlement
@ The settlement of industrial disputes
through conciliation, adjudication and
voluntary arbitration.

Industrial Disputes Prevention & Settlement

Structure
5.1 Introduction
5.2 Categories of disputes
5.3 Relevant ILO standards on Industrial
Disputes
Settlement
5.4 Prevention of Industrial Disputes
5.5 Central Industrial Relations Machinery
5.6 Summary

Industrial Disputes Prevention & Settlement

5.1

Introduction

The prompt, equitable & effective settlement of

disputes is pre-requisite for healthy industrial
relations.
Appropriate dispute settlement machinery with
the least intervention from outside, is ideal.
But in reality there is excessive third party
intervention . There is a growing concern that the
dispute settlement machinery has become legalistic,
expensive & slow.

Industrial Disputes Prevention & Settlement

5.1

Introduction

In India & other industrial nations there is a

growing backlog of pending disputes.
There is an urgent need to identify ways &
means to increase efficiency and effectiveness of
industrial adjudication.
There is a rise in industrial disputes & claims
but no improvement in number of cases getting
resolved.
The issue needs to be reviewed in broader
perspective of developing human resource oriented
culture in the enterprise level.

Industrial Disputes Prevention & Settlement

5.2

Categories of disputes

1] Interest Disputes: relate to establishment of or

modification of the existing terms & conditions of
employment which constitute rights and obligations
of the contracting parties.
2] Rights Disputes : on the other hand relate to
interpretation and application of existing clauses in
the contract, collective bargain. Most such issues
relate to termination of a workers services by
employer.

Industrial Disputes Prevention & Settlement

5.2 Categories of disputes
Normally interest disputes are settled through
negotiation, failing which it involves threatening
action of strikes / lock outs. On the other had, rights
disputes are settled by arbitration or labour courts.
In India such distinction is not observed and
both conciliation & adjudication services are available
for both types of disputes.
Any dispute between employer & employee of
any nature what so ever is considered as industrial
dispute & has to be resolved per provisions of
Industrial Disputes Act.

Industrial Disputes Prevention & Settlement

5.3

Relevant ILO standards on Industrial

Disputes
Settlement

1] Both employers & employees have right to protect

their interests by joining an association & affiliating
it with international organizations
2] They have protection from acts of interference
from either side.
3] members of ILO need to establish a tripartite
consultation for resolution of disputes.
4] provide measures for settlement of labour disputes
through collective bargaining.

Industrial Disputes Prevention & Settlement

5.3

Relevant ILO standards on Industrial

Disputes
Settlement

5] Free voluntary conciliation & arbitration services

be offered for settlement of disputes.
6]Agreed procedures be established for possibility of
final solution for grievances that could not be
resolved within the organization.
7] Worker to have a facility for appeal against
termination of services to an impartial body such as
court, labour tribunal or arbitration.

Industrial Disputes Prevention & Settlement

5.4

Prevention of Industrial Disputes

The best way to prevent industrial disputes is

to strengthen the collaborative & cooperative
relationship between labour & management.
Human resource is an asset that has unlimited
potential.
Newer ways for
employee commitment,
motivation & satisfaction are being developed by
Human Resource Managers.
Focus is on enterprise, rather than industry
based resolution of conflicts. Thus individual
grievance cannot assume proportion of industrial
dispute.

Industrial Disputes Prevention & Settlement

5.4

Prevention of Industrial Disputes

A professional approach to labour relations is

required to develop an effective system of industrial
dispute prevention & resolution.
In fact, industrial relations scholars believe
that an ideal industrial policy involves a judicious
mix of mechanism to promote effective grievance
redressal,
collective
bargaining
and
joint
consultation these three issues being intimately
intertwined with each other.
Governments, too, are concerned with effective
dispute resolution, as success of economic reforms
rests on industrial peace & harmony.

Industrial Disputes Prevention & Settlement

5.5

Industrial Relations Machinery

Two types of machinery exist in India ,

machinery for direct settlement of disputes &
machinery for third party settlement.
Former comprises of both voluntary & statutory
measures like mediation, works committees,
grievance procedure, collective bargaining etc. Latter
consists
of purely statutory measures like
conciliation, adjudication & voluntary arbitration.
Machinery set up can be either consultative or
conciliation or arbitration.

Industrial Disputes Prevention & Settlement

5.5

Industrial Relations Machinery

Mediation : is a process available to the parties

involved in contract negotiation by which an outside
party is called for by union & management to help
them arrive at a solution. Mediator does not offer
solution , but assists parties towards solution.
Conciliation : Trade Disputes Act, 1929 provides for
appointment of conciliation officer or in special cases,
setting up of boards of conciliation, to mediate and
promote settlement of disputes.

Industrial Disputes Prevention & Settlement

5.5

Industrial Relations Machinery

Conciliation : contd.
Recommendations of conciliation officers may
be accepted in full or part or totally rejected. Thus
conciliation attempts to narrow the area of
disagreement , to remove reasons for friction and to
help arrive at common agreement.
The Act requires conciliation officers to
conclude proceedings in 14 days and boards in two
months ; unless both parties agree for extension.
Conciliation is mandatory for public utilities.

Industrial Disputes Prevention & Settlement

5.5 Industrial Relations Machinery
Conciliation : contd.
In case conciliation fails to resolve the dispute,
next stage may be compulsory adjudication or parties
are free to act on their own.
It is true that conciliation efforts have resolved
number of disputes, but it has shortcomings like
process is lengthy
parties fail to attend proceedings
conciliation officers lack training and are not
competent
it is perceived as a step prior to go for legal
action.

Industrial Disputes Prevention & Settlement

5.5 Industrial Relations Machinery
Conciliation : contd.
Conciliation can be more effective if it is freed
from outside influence and conciliation machinery is
adequately staffed. Independent conciliation
machinery inspires greater confidence & will evoke
more cooperation from the parties.
Conciliation officers need to be properly
selected, & trained before & after appointment.
Conciliation officer should hold proceedings in
parties workplace and not in his office. They should
have authority to enforce parties attendance.

Industrial Disputes Prevention & Settlement

5.5 Industrial Relations Machinery
Conciliation : Procedure
First preliminary investigation is conducted
by officer by finding out whether the union is
registered and then obtaining a statement of
demands from the party seeking conciliation. This
is sent to the other party for response. Once the
response is received the officer can decide whether the
case is to be taken up for reconciliation.
The officer arranges meeting with parties either
separately or together at the time & place selected by
him to start process.

Industrial Disputes Prevention & Settlement

5.5

Industrial Relations Machinery

Conciliation : Procedure
In case dispute is amicably resolved agreement
of settlement is signed. In case no such solution is
there , the officer files a failure report. The authority
studies the report along with officers confidential
note to decide whether the matter is to be submitted to
the tribunal or labour court.
If parties agree during reconciliation, the
matter can be submitted to voluntary arbitration.

Industrial Disputes Prevention & Settlement

5.5

Industrial Relations Machinery

Adjudication :
Adjudication means a mandatory settlement
of dispute by a labour court or a tribunal. The
Government, generally, refers the dispute to
adjudication after failure of conciliation proceedings.
There are two requirements for the matter to be
referred to adjudication. First there should be a valid
industrial dispute & two it should be expedient to refer
it to adjudication.

Industrial Disputes Prevention & Settlement

5.5

Industrial Relations Machinery

Adjudication : contd.
Adjudication
machinery
has
exercised
considerable influence on conditions of work & labour
management relations . It was instrumental in
improving standard of wages, securing allowances
to maintain level of real wages, bonus, and in
bringing about uniformity in benefits & amenities.
It also succeeded in avoiding work stoppages
by offering acceptable alternatives to direct action.

Industrial Disputes Prevention & Settlement

5.5

Industrial Relations Machinery

Adjudication : contd.
Criticisms levied against adjudication include
considerable delay in concluding proceedings
since power for reference is with the
government, adjudication is sometimes
discriminatory,
process is expensive, as party aggrieved by
adjudication appeals to High Court or Supreme
Court

Industrial Disputes Prevention & Settlement

5.5

Industrial Relations Machinery

Adjudication : contd.
Criticisms levied against adjudication include
It inhibits growth of trade unions , prevents
voluntary settlement of industrial disputes.&
growth of collective bargaining and
it has failed to achieve goal of industrial peace
The ID Act does not allow parties to be represented by
lawyers in reconciliation, but in adjudication they
can with consent of other party.

Industrial Disputes Prevention & Settlement

5.5

Industrial Relations Machinery

Adjudication : contd.
The court has right to decide which party bears
the cost of proceedings.
In case of dismissals & discharge if the labour
grants reinstatement of any worker & employer
prefers an appeal, the employer is liable to pay full
wages last drawn to worker during pendency of such
proceedings.

Industrial Disputes Prevention & Settlement

5.5

Industrial Relations Machinery

Adjudication : contd.
Labour courts have been constituted by the
Central as well as State Governments under the Acts.
They are empowered to decide legality or
otherwise of a strike, lock out, closure, stoppage etc. &
cases under various industrial relations Acts.
Voluntary Arbitration : was first introduced in
Ahmedabad textile industry under guidance of
Mahatma Gandhi.

Industrial Disputes Prevention & Settlement

5.5

Industrial Relations Machinery

The main ingredients of voluntary arbitration are

industrial dispute must exist or be
apprehended
agreement must be in writing
reference to voluntary arbitration must be
made before dispute is referred to the labour
court
the name of arbitrator/s must be specified
arbitrator/s investigate dispute and submit
arbitration award to the appropriate authority

Industrial Disputes Prevention & Settlement

5.5

Industrial Relations Machinery

Voluntary arbitration is one of the recognized

& democratic ways for settling industrial disputes. It
is the best method for solving disputes & is a
supplement to collective bargaining
It is based on the notion of self government in
industrial relations. It strengthens trade unions,
denotes healthy attitude & is quicker & the least
expensive.
But easy availability of adjudication in case of
failure of negotiation did not allow voluntary
arbitration to progress in India.

Industrial Disputes Prevention & Settlement

5.5

Central Industrial Relations Machinery

CIRM is headed by Chief Labour Commissioner

& is entrusted with the task of maintaining good
industrial relations central sphere.
Its main functions are
Prevention & settlement of industrial
disputes in industries for which the Central
Government is the appropriate government under ID
Act, 1947

Industrial Disputes Prevention & Settlement

5.5

Central Industrial Relations Machinery

Enforcement of labour laws in such

industries & establishments.
Verification of membership of trade unions
in major ports, registered trade unions & those under
Code of Discipline.
Enforcement of awards & settlements
Conduct enquiries into the breaches of Code
of Discipline.

Industrial Disputes Prevention & Settlement

5.5

Central Industrial Relations Machinery

Promotion of works committees & workers

participation in management.
Collection of statistical data regarding
industrial disputes, work stoppages, wages, labour
situation & labour regulations in the central sphere.
Defence of court cases and writ petitions
arising out of implementation of labour laws.

Industrial Disputes Prevention & Settlement

5.6

Summary

one of the main factors which acts as a hurdle

to the maintenance & promotion of industrial peace at
present is the increasing resort to the adjudication
machinery in preference to voluntary arbitration &
conciliation.
The state government should take all necessary
measures t encourage settlement of disputes through
voluntary arbitration & conciliation.
There should be a clause in every settlement &
agreement for reference of disputes arising over their
interpretation or violation, to arbitration.

Industrial Disputes Prevention & Settlement

5.6

Summary

It should also provide that there will be no

strike or lockout over the question of interpretation of
collective agreements.
It is felt that there is too much government
intervention & it is preventing creation of proper
atmosphere for meaningful collective bargaining.
NLC states the requirements of national
policy make it imperative that state regulation will
have to co-exist with collective bargaining. However it
has recommended for a shift in emphasis towards
collective bargaining.

Industrial Disputes Prevention & Settlement

The End!

In the next session we cover chapter six on

Trade Unionism &
Industrial Relations.

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