Contents

Contents..........................................................................................................1
1.0 Introduction...............................................................................................2
1.1 What is a dispute?..................................................................................2
1.2 Causes of Industrial Disputes.................................................................2
2.0 Settlement of Disputes..............................................................................3
2.1 Voluntary Methods..................................................................................4
2.1.1 Collective Bargaining.......................................................................4
2.1.2 Trade union......................................................................................5
2.1.3 Joint Consultations............................................................................5
2.1.4 Standing Orders................................................................................7
2.1.5 Grievance Procedure........................................................................8
2.1.6 Code of Discipline.............................................................................9
2.2 Statutory Measures...............................................................................11
2.2.1 Works Committee...........................................................................11
2.2.2 Conciliation.....................................................................................11
2.2.3 Voluntary Arbitration......................................................................12
2.2.4 Adjudication....................................................................................13

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1.0 Introduction
1.1 What is a dispute?
• Academically speaking, industrial dispute refers to any conflict
between employees and employers, between employers and
employers and between employees and employees.

• But in reality, dispute is understood as the conflict between employees

and employers.

• There are three types of Disputes :

• Disciplinary disputes

• Grievance disputes

• Industrial disputes

• According to Industrial Dispute Act, 1947, Industrial dispute means

any dispute or difference between employers and employers, or
between employers and workmen, or between workmen and workmen,
which is connected with the employment or non-employment or terms
of employment or with the conditions of labour of any person.

1.2 Causes of Industrial Disputes

Some of the prominent causes of industrial disputes may be listed thus:

Employment: The list here includes disputes over wages, allowances,

bonus, benefits, working, condition, unjust dismissals, retrenchment of
workers, methods of job evaluation, changes in methods of production, non-
implement of awards of tribunals, etc. The National Commission on Labour
remarked “though on majority of occasions industrial disputes were based on
claims pertaining to the terms and condition of employment, sometimes
economic issues of a general character dominated and, on occasion, purely
motives”.

Nationalization: Workers protested against the introduction of

rationalization, automation, computerization (e.g., Bank unions oppose this
move even now) on various occasion, fearing large scale retrenchment.

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Administration-related causes: these pertain to ill-treatment,
undeserved punishment, verbal abuse, physical assaults, etc.

Recognition: disputes arose when employers failed to recognized a union

as a bargaining agent.

Sympathetic strikes: Workers struck work in one plant/industry when

the wanted to exhibit their solidarity with striking workers from another plant
or industry.

Psychological/social causes:
On occasion, family, friends,
community, environmental pressures and concerns also instigated the
workers to take to the streets.

Institutional causes: Disputes arose on account of institutional factors

such as: recognition of unions, membership of unions, scope of collective
bargaining, unfair practices.

Political causes: Political leaders have use unions as powerful weapons

to build tensions inside a plant/industry with view to satisfy their own private
ends on number of occasions, especially in unionised places like Mumbai,
Ahmedabad, Kanpur, Culcutta, etc.

2.0 Settlement of Disputes

The different Methods for prevention of industrial Disputes are shown in the
chart. Usually they are divided in two groups: A. Voluntary Methods
B. Statutory
Measures

Each of them is explained in detail.

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2.1 Voluntary Methods

2.1.1 Collective Bargaining

Collective Bargaining is process of joint decision making and basically
represents a democratic way of life in industry. It is a technique adopted by
two parties to reach an understanding acceptable to both through the
process of discussion and negotiation.

According to Prof. Paul Samuelson, “Collective Bargaining is the process of

negotiation between firm’s and worker’s representatives for the purpose of
establishing mutually agreeable conditions of employment”.

ILO has defined Collective Bargaining as, “Negotiation about working

conditions and terms of employment between an employer and a group of
employees or one or more employee, organization with a view to reaching an
agreement wherein the terms serve as a code of defining the rights and
obligations of each party in their employment relations with one another.

Characteristics of Collective Bargaining:

1. It is a group process, wherein one group representing the employers and

the other representing the employees sit together to negotiate terms of
employment.

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2. Negotiations form an important aspect of the process of Collective
Bargaining i.e. there is considerable scope for discussion, compromise or
mutual give and take in Collective Bargaining.

3. It is flexible or mobile and not fixed or static.

4. Collective bargaining is a process in the sense that it consists of a number

of steps. It begins with the presentation of the charter of demands and ends
with reaching an agreement, which would serve as the basic law governing
labour management relations over a period of time in an enterprise.

5. It a bipartite process.

6. Collective Bargaining is a complementary process i.e. each party needs

something that the other party has, labour can increase productivity and
management can pay better for their efforts.

7. Collective Bargaining is continuous process.

8. It enables industrial democracy to be effective.

9. Collective Bargaining takes into account day to day changes, policies,

potentialities, capacities and interests.

2.1.2 Trade union

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. Some of
the examples are as under:

Craft Unions – supports skilled craftsmen, e.g. Musicians’ Union

Industrial Unions – grew from traditional heavy industrial e.g. Union of Shop,
Distribution Workers (USDAW)

General Unions – usually semi-skilled and unskilled workers e.g. GMB

White Collar Unions – people working in clerical jobs e.g. UNISON

2.1.3 Joint Consultations

To prevent industrial disputes, two ways of joint consultation are adapted –
works committees and Joint management councils.

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Works Committees

• Greater participation to workers in day-to-day affairs.

• Ensures close mutual interaction between labour and

management.

• Generates a cooperative atmosphere for negotiations between

the two parties.

• Opens the door for unions to have a clear view of what is going
on within the unit.

• Strengthens the spirit of voluntary settlement of disputes.

A number of issues come under the purview of works committees like wages,
benefits, bonus, hours of work, terms and condition of employment, welfare
measures, training, transfers, etc.

The Tata Iron and Steel Company (TISCO, Jamshedpur) was the first to create
a works committees way back in 1920. Till the end of Second World War,
employers have not realized the importance of works committees and as a
result, very few works committees came into existence. The Industrial
Disputes Act, 1947, legalized the establishment of works committees at the
plant level.

Joint management councils (JMCs)

In the Industrial Policy Resolution 1956, the need for joint management
councils consisting of representatives of management, technicians and
workers was emphasized. 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:

• The scheme is voluntary, not obligatory.

• The JMC should consist of equal numbers of representatives of

workers and employers (minimum 6 and maximum 12)

• JMCs should look after three areas: (1) information sharing (2)
consultative and (3) administrative. Matters relating to welfare, safety,

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 training, holiday schedules, formulation of standing orders, etc., all
come under the above three categories.

• Decisions of the JMC should be unanimous and should be

implemented without an delay.

• The JMCs should not encroach on the jurisdiction of work

committees.

• The JMC members should be given proper training.

• Representation of workers to the JMCs should be based on

nominations by the recognized union.

• Initially JMCs should be constituted in 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 relation are
sound.

2.1.4 Standing Orders

The term ‘Standing orders’ refers to the rules and regulation which govern
the conditions of employment of workers. They specify the duties and
responsibilities of both employers and employees. Through standing orders,
the condition of employment are sought to be regularized, 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 undertaking 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. The matters to be highlighted
therein are: (a) Classification of employees, (b) Hours of work, holidays,
payday, 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 condition mentioned therein invite
penalties. The Labour Commissioner (Deputy Labour Commissioner, Regional
Labour Commissioner) exercise the powers of certifying officer and in that
capacity has all the power 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.

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2.1.5 Grievance Procedure
“ Grievance is any discontent or dissatisfaction, whether expressed or not,
whether valid or not, arising out of anything connected with the company
which an employee thinks, believes and even feels to be unfair, unjust or
inequitable.”

A grievance may be defined as “any real or imagined feeling or personal

injustice which an employee has concerning his employment relationship”.
Grievance has 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 friction between them. Another method commonly used to
prevent industrial disputes-Workers’ Participation in management – has
already been explained previously.

“ A written complaint filed by an employee and claiming unfair treatment”.

“ A complaint of any one or more workers in respect of wages, allowances,

conditions of work & interpretation of service stipulations, covering such
areas as overtime, leave, transfer, promotion, seniority, work assignment
and discharge constitute grievance”.

(Grievance procedure)

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2.1.6 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 result 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 Organizations (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 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:

Obligations of both parties

It restrains both employers and employees from unilateral action. Both
parties must recognize each other’s rights and obligation and settle disputes
through the existing machinery for the settlement of disputes.

The parties should not indulge in strikes and lock-outs without notice or
without exploring possibilities to resolve disputes through negotiations.

Neither party will resort to coercion, intimidation, victimization or

litigation or adopt unfair labour practices (e.g., go slow, sit down strike, etc.).

Both employers and union will educate workers regarding their

obligation and agree to follow a mutually agreed grievance procedure.

Obligations of Employer
Management agrees not to increase workload without prior agreement with
workers, discourages unfair labour practices, take prompt action to
redressed grievances, display the code in prominent places, agrees to
implement all awards and agreement, take disciplinary action against
officer/members who instigate worker and agrees to recognize a
representative union.

Obligations of Unions

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Unions agree not to indulge in physical duress, not to permit employees to
do union work during working hours, discourage negligence of duty, careless
operation, damage to property, insubordination and take 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’ organizations agree to impose certain moral sanction against
erring members such as seeking explanation for infringement of provisions,
criticizing them for not following the code, give wide publicity to the fact that
a particular unit is working against the code, etc.

Evaluation
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 organization of workers and employers. Barring railways’ Port and
Docks and undertaking 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 wholeheartedly.

• Conflicts between the code and the law.

• Union rivalries, inflationary pressures, the state of indiscipline in the

body politic and other reasons beyond the control of employer, etc.

The remedy the situation, NCL wanted Government to give legal shape to
certain important provisions such as:

• Recognizing unions as bargaining agents.

• Setting up a grievance machinery.

• Prohibiting strikes/lockouts without notice.

• Imposing penalties for unfair labour practices.

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 • Providing for voluntary arbitration.

2.2 Statutory Measures

2.2.1 Works Committee

For promoting dialogue between the employer and the workmen and for
securing and preserving amity, the Industrial Disputes Act, 1947, provides
that every industrial establishment employing 100 or more workmen may be
required by the government to constitute a works committee comprising
equal representatives of management and workmen. The main function of
this committee is to endeavor to compose any difference of opinion in
matters of common interest and thereby promote measures for securing and
preserving amity and cordial relations between the employer and workmen.
The representatives of workmen are to be chosen from among the workers
engaged in the establishment in the prescribed manner and in consultation
with their trade union, if any, registered under the Trade Unions Act, 192613.

2.2.2 Conciliation
Conciliation is a process by which representatives of workers and employers
are brought together before a third party with a view to persuading them to
arrive at an agreement by mutual discussion between them.

Conciliation Officer
The conciliation officer may be appointed by the government for specified
area or specified industries.

Their main duty is to investigate and promote settlement of disputes by

inviting the parties to come to a fair and amicable settlement.

Conciliation proceedings are obligatory in case of disputes in public utility

services

Conciliation officer to normally submit report within 14 days of

commencement of conciliation proceedings

Duty of the conciliation officer is administrative and not judicial in nature.

Board of Conciliation
Government may, as occasion arises, constitute a board of conciliation with
an independent person as chairman and equal representatives of the parties
concerned as its members

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The board has to submit its report within two months of reference to it, or
within such shorter periods as may be fixed by the government

If the board fails to bring about settlement, a report is submitted to the

government explaining full facts and reasons for the failure along with its
findings.

2.2.3 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 award or
judgment on the disputes. He, however, does not enjoy judicial powers. The
arbitrator submits his judgment on the disputes to the government.
Therefore the government publishes the award within 30 days of it
submission. the award becomes enforceable after 3 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 proceeding as parties to disputes.
Before delivering the judgment, the arbitrator is expected to follow
procedure of giving notice to parties, giving a fair hearing, relying upon all
available evidence and records and following the principal of the nature
justice.

Despite the best efforts of government to give place of prominence to

arbitration, it has not been a resounding success of India. 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 came in the way were:

• Dearth of suitable arbitration enjoying the confidence of disputing parties.

• The complicated procedure to be followed in voluntary arbitration.

• The payment of arbitration fees. Unions can seldom afford to pay such fees
equally with management.

• The absence of recognized unions which could bind the workers to a

common agreement.

• Easy availability of adjudication in case of failure of conciliation or

negotiation.

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• Absence of 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 July, 1987,
consisting of representatives of employers, trade unions and the
Government. The board keeps the panel of experts who could act as
arbitrator. The board evaluates the progress of voluntary arbitration from
time to time and advances suggestion for its improvement. It also tries to
evolve principles, norms and procedures for guidance of the arbitration and
the parties.

2.2.4 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 mature 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 provision of the Act, Labour Courts and Industrial Tribunals can be
constituted by both Central and Stat government but the National Tribunals
can be constituted by the Central government only.

Labour Court
The labour court consists of one independent person (called 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 ha held any judicial office
in India for not less than 7 years. The labour court deals with disputes
relating to:(a) the propriety or legality of an order passed by employers
under the standing orders;(b) the application and interpretation of standing
orders ;(c) discharge of dismissal of workers including reinstatement of, or
grant of relief to wrongly dismissed person;(withdrawal of any statutory
concession or privilege;(e) illegality or otherwise of a strike or lockout; and (f)
all matters except those reserved for industrial tribunals.

Industrial Tribunal

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This is also a one-man adhoc 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 proceeding. An industrial Tribunal can adjudicate on the
following matters: (a) wages including the period and mode of payment; (b)
compensatory and other allowances; (c) hours of work and rest periods; (d)
leave with wages and holidays; (e) bonus, profit Sharing, provident fund and
gratuity; (f) shift working, otherwise than in accordance with the standing
orders; (g) classification by grades; (h) rules of discipline; (I) rationalization;
(j) retrenchment and closure of establishment; and (k) any other matter that
may be prescribed

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 stat.

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