CHAPTER FIVE

DISPUTE SETTLEMENT
PROCEDURE

5.1. INTRODUCTION

INDUSTRIAL DISPUTE

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 nonemployment or the terms of employment or with the conditions of
labour, of any person.

Industrial disputes may be said to be disagreement or controversy

between management and labour with respect to wages, working
conditions, other employment matters or union recognition.

5.2. PROCEDURES FOR SETTLING

LABOUR DISPUTE

Collective Bargaining,
Negotiation,
Conciliation
Mediation,
Arbitration and
Adjudication

Labour Court (Section 7)

Industrial Tribunal (Section 7A)

National Tribunals (Section 7B)

COLLECTIVE BARGAINING

Collective Bargaining is a technique by which dispute as to conditions of

employment, are resolved amicably, by agreement, rather than by coercion.
The dispute is settled peacefully and voluntarily, although reluctantly,
between labour and management.

NEGOTIATION

Negotiation is one of the principal means of settling labour disputes.

However, due to lack of trust between the employers and workmen

or their trade unions or inter-rivalry of the trade unions and the
employers being in a commanding position, many a time
negotiations fail.

Negotiation is a dialogue between two or more people or parties,

intended to reach an understanding, resolve point of difference, or
gain advantage in outcome of dialogue, to produce an agreement
upon courses of action, to bargain for individual or collective
advantage to craft outcomes to satisfy various interests of two
people/parties involved in negotiation process.

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Some truths about negotiation :
1)

Here there is no interference of 3rd party.

2)

Negotiation proceeding cannot be used as evidence, anywhere.

3)

Here, there is compromise between the parties by mutual understanding and has no
binding effect.
Guidelines for Negotiation:

The Dos of Negotiations:

1)

Do seek more( or offer less) than you plan to receive (or give)

2)

Do negotiate in private, not through the media.

3)

Do let both sides win. Otherwise other will retaliate.

4)

Do start with easy issues.

5)

Do remember that negotiations are seldom over, when the agreement is concluded.
Eventually the issue will be re-negotiated.

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The Donts of Negotiation
1)

Do not make your best offer first; that is so uncommon that the other
side will expect more.

2)

Do not seek unwanted changes, you may get them.

3)

Do not violate the confidence.

4)

Do not settle too quickly as union members may think a quick

settlement is not a good one.

5)

Do not let other side bypass your team

CONCILIATION

Conciliation is the most important method for the prevention and settlement
of industrial disputes through third party intervention. It is an attempt to
reconcile the views of the disputants and bring them to an agreement.

Conciliation is generally understood as the friendly intervention of a neutral

person in a dispute to help parties to settle their differences peacefully.

It is a process by which representatives of workers and employers are

brought together before a third person or a group of person with a view to
persuading them to arrive at an agreement by mutual discussion between
them.

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ROLE OF CONCILIATOR
a)

As a Discussion Leader

b)

As a Safety Valve (control device)

c)

As a communication Link

d)

As a Innovator

e)

As a Sounding Board flying ambulance

f)

As a Stimulator

g)

As an Adviser

h)

As a Promoter of Collective Bargaining.

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QUALITIES OF A CONCILIATOR
a)

Independent and impartial

b)

Physically and psychological fit

c)

He must be honest, polite, tactful, self-confident, even-tempered and

patient.

d)

Friendly personality

e)

Should be well acquainted with the law and regulations

f)

He must have ability and versatility to form judgments.

MEDIATION
Mediation is most frequently adopted ADR technique. It contemplates
the appointment and intervention of neutral 3rd person who helps the
parties to reach a negotiated settlement.
2) Mediation is process by which a 3rd party brings together the opposing
groups not only to iron out the differences between them but also to find
an answer to problems or specified proposals and offer alternative
suggestions.
3) It is conducted on confidential basis .
4) The process may have to pass through several stages like preparation,
joint sessions, private meetings and final result.
At one end of the range, mediation means simply getting the parties to talk to
each other until they reach a settlement.
1)

At the other extreme, mediation means the deliberate effort to introduce and
explore proposals which might lead to settlement.

MEDIATOR
1)

The mediators has described as confidential adviser or industrial

diplomat.

2)

He helps the two parties to come to a agreement to their own accord

rather than to render an award or decision of his own.

3)

He suggest solutions based on his knowledge and experience, which

both parties, if they have confidence in him, may agree to accept.

4)

He only brings the parties together in his presence and by formulating

substantive proposals for settlement, tries to iron out their differences.
he does not exercise any compulsion; he cannot and should not
undertake to decide what parties should do, he may advance
various considerations, but certain evaluations and judgments
should be left to the parties themselves

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ESSENTIALS OF SUCCESS OF MEDIATION
1)

Mediation can work only in climate of consent (approval).

2)

Mediator must be an impartial and unprejudiced person.

3)

Mediation should take in proper setting.

ARBITRATION
1)

Arbitration is a means of securing an award on a conflict issue by

reference to a 3rd party.

2)

It is process in which dispute is submitted to an impartial outsider who

makes a decision which is usually binding on both the parties.

3)

Arbitration is to be distinguished from conciliation not only by the

fact that its decision is binding on the parties but also by its different
approach and spirit.

4)

The main objective of arbitration is adjudication and hence there is no

place for compromise in awards though the parties are at liberty to do
so.

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APPROACHES TO ARBITRATION
1)

The Judicial approach- it emphasis that arbitration should not be

confused with conciliation and mediation. The parties submit a dispute for
arbitration, not for reaching a compromise solution but the vindication
(justification/ evidence) of the stand taken by them.

2)

The non-judicial approach- arbitrator cannot isolate himself from the

reality of the need for a workable solution.
ARGUMENTS FOR AND ADVANTAGES OF ARBITRATION

1)

Established by the parties themselves

2)

It is more expeditious

3)

Less expensive in nature

4)

Awards are capable of implementation without any grudge

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SUBMISSION OF AWARD
The arbitrator, after investigating the dispute, has to submit his award to the
government. The award will have the same legal force as the judgment of
a labour court or tribunal. The award must be signed by the arbitrators.
While writing his award, the arbitrator has to ensure that:
a)

The award is in line with the terms of reference

b)

It must be precise and definite

c)

It should be capable of being enforced or implemented

d)

The award should contain a date or a specific period for its

implementation

e)

The award should not violate any provision of any existing law.

f)

The award should contain sufficient reasons for the settlement arrived at
by arbitrator

COURT OF INQUIRY
a)

A court of inquiry is constituted as an adhoc body, by the appropriate

government.

b)

The constitution of the court has to be notified in the Official Gazette

c)

It can inquire into any matter connected with or relevant to industrial

dispute, but not resolve dispute.

d)

It may consists of an independent person or some no. of persons as

the government may think fit.

e)

The formation of court together with the name of persons constituting

it requires to be notified in the official gazette.

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f) Its duty is to inquire into the matter referred to it by the appropriate
government and to make a report on it on the inquiry held on matters
referred to it within a period of six months from the commencement of
the inquiry.
g) It must be signed by all members.
h)

A member can submit a note of dissent

i)

The report together with the dissenting notes must be published by the
appropriate government within 30 days from its receipt.

The section 22, 23 and 33 lays down that during the pendency of the
proceedings before a court of enquiry:
a)

The right of worker to go on strike

b)

The right of employer to resort to lockout; and

c)

The right of employer to dismiss or otherwise to punish the worker.

THREE-TIER SYSTEM OF ADJUDICATION

The industrial dispute act 1947, provides for a three tier system of
adjudication.
1)

Labour Court

2)

Industrial Tribunal

3)

National Tribunals

LABOUR COURTS
One or more labour courts may be constituted by the appropriate
government for adjudicating on industrial disputes relating to any matter
specified in the Second Schedule to the Act.

Constitution:
A labour court shall consist of one person only, who:
a)

Is or has been judge of High Court; or

b)

Has been, for a period of time of not less than 3years, a District
Judge; or

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The duties of labour court are:
a)

To hold adjudication proceedings expeditiously

b)

Submit its award to the appropriate government

The labour court usually deals with matters which arise out of the day
to day working of an undertaking
Jurisdiction: Matters specified in the 2nd Schedule
1)

Application and interpretation of standing orders

2)

Discharge or dismissal of workers (wrongfully)

3) Withdrawal of any customary concession or privilege.

4) Illegality of strike or lockout

INDUSTRIAL TRIBUNAL
a)

The appropriate government may appoint one or more industrial

tribunal for adjudication of industrial disputes relating to any matter,
whether specified in 2nd schedule or 3rd schedule.

b)

The matters which are in form of new demands and give rise to
industrial dispute which affect the working of a co. or industry are
usually referred to an industrial tribunal.

c)

The industrial tribunal may be appointed for a limited period on an

ad hoc basis or permanently.

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Constitution:
A tribunal shall consist of one or more persons such as
a)

Are or have been judge(s) of High court

b)

Are or have been District judge(s) for a period of not less than 3years.

c)

Hold or have held the office of the chairman or any other member of
any other tribunal for a period of not less than two years.

The government may, if it thinks fit, also appoint two persons as assessors
to advice the tribunal in the proceedings before it.

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Jurisdiction:
It have wider jurisdiction than labour courts. It covers any matters
specified in 2nd and 3rd schedule:
The matters specified in 3rd schedule:
1)

Wages, including the period and mode of payment

2)

Compensatory and other allowances

3)

Hours of work and rest interval

4)

Leave with wages and holidays

5)

Bonus, profit sharing, provident fund and gratuity

6)

Rules of discipline

7)

Retrenchment of workmen and closure of establishment

8)

Any other matter that may be prescribed.

NATIONAL TRIBUNAL
The central government may, by notification in the Official Gazette,
constitute one or more National Tribunals for adjudication on industrial
disputes.
It considers:
a)

Involving questions of national importance, or

b)

Which are of such nature that industries in more than one state are likely
to be interested in, or affected by, such disputes /

Constitution:
1) One person only who has been or was judge of High court and is below
65 years of age
b) or, held the office of Chairman in any other tribunal for not less than
2years.