Machinery for Handling Industrial Disputes

Industrial Conflict / Dispute:

• Industrial organizations consist of two important
stakeholders –
(a) Owners represented by Management
(b) Workers represented by Union
• The stakeholders have different goals and interests.
• Industrial relations is concerned with resolving
conflicts between Management and Workers.
• Conflict management is at the core of Industrial
Relations
• The machinery available for resolving conflicts /
disputes are given in the next slide.
 Machinery for handling Industrial
disputes

Preventive ConciliationCourt of Enquiry

Voluntary Arbitration Adjudicatio
Machinery n

Conciliation Conciliation Board

officers
Labour Court
Industrial tribunal
National Tribuna

Workers Collectiv Grievan Tripartit Code of Standin

participation e ce e Discipli g
in Bargaini Procedu Bodies ne Orders
Management ng re
Machinery for Handling Industrial Disputes

Industrial Relations offers the following bilateral machinery to

resolve the differences or conflicts between the stakeholders.
These machinery are also known as Preventive machinery as it
prevents small differences between stakeholders to become
Industrial Dispute requiring intervention by the State.

Preventive machinery for handling Industrial disputes

1. Workers participation in management
2. Collective bargaining
3. Grievance procedure
4. Tripartite bodies
5. Code of discipline
6. Standing orders
Machinery for Handling Industrial Disputes

Schemes of workers participation :

It is a method where by the workers are allowed to be consulted and
to have a say in the management of the unit. The important schemes
of workers participation are :Works committee, Joint Management
Council (JMC), Shop council and Joint council.
Collective bargaining :
Collective bargaining According to Dale Yoder, collective bargaining is
the term used to describe a situation in which essential conditions of
employment are determined by a bargaining process undertaken by
representatives of a group of workers on the one hand and of one or
more employers on the other. Collective bargaining not only includes
negotiation, administration and enforcement of the written contracts
between the employees and the employers ,but also includes the
process of resolving labour management conflicts.
Machinery for Handling Industrial Disputes

Grievance procedure :
Grievance are symptoms of conflicts in the enterprises So they should
be handled very promptly and efficiently. Coping with grievances forms
an important part of a managers job.

Tripartite bodies:
Industrial relations in India have been shaped largely by principles and
policies evolved through tripartite consultative machinery at industry and
national levels. The aim of the consultative machinery is to bring the
parties together for mutual settlement of differences in a spirit of
cooperation and goodwill.
Indian Labour Conference (ILC) and Standing Labour Committee(SLC)
have been constituted to suggest ways and means to prevent disputes.
Machinery for Handling Industrial Disputes

Code of discipline: Code of Discipline is a set of self imposed

mutually agreed voluntary principles of discipline and good relations
between the management and the workers in industry.
In India, Code of Discipline was approved by the 16 th Indian Labour
Conference held in 1958.

Standing orders : To prevent the emergence of industrial strife over

the condition of employment, one important measure is the standing
orders. The standing orders regulate the condition of employment from
the stage of entry to the organization to the stage of exit from the
organization. It also act as a code of conduct for the employees during
their working life within the organization.
Machinery for Handling Industrial Disputes

Failure of the employees and the employers to sort out

their differences bilaterally leads to the emergence of
industrial disputes.
The Industrial Disputes Act, 1947 provides legalistic
machinery for settlement of such disputes by involving
the interference of a third party.
The settlement machinery as provided by the Act
consists of the three methods:
1. Conciliation
2. Arbitration
3. Adjudication
Machinery for Handling Industrial Disputes

Conciliation:

In simple sense, conciliation means reconciliation of

differences between persons. Conciliation refers to the
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. The alternative name
which is used for conciliation is mediation. The third party
may be one individual or a group of people.
.
Machinery for Handling Industrial Disputes

In view of its objective to settle disputes as quickly as possible,

conciliation is characterised by the following features:
(i) The conciliator or mediator tries to remove the difference between
the parties.

(ii) He/she persuades the parties to think over the matter with a
problem-solving approach, i.e., with a give and take approach.

(iii) He/she only persuades the disputants to reach a solution and

never imposes his/her own viewpoint.

(iv) The conciliator may change his approach from case to case as
he/she finds fit depending on other factors.
According to the Industrial Disputes Act 1947, the conciliation machinery
in India consists of the following:
1. Conciliation Officer

2. Board of Conciliation

3. Court of Enquiry
Conciliation Officer:
The Industrial Disputes Act, 1947, under its Section 4, provides for the
appropriate government to appoint such number of persons as it thinks fit to be
conciliation officers. Here, the appropriate government means one in whose
jurisdiction the disputes fall.

While the Com­missioner /additional commissioner/deputy commissioner is

appointed as conciliation officer for undertakings employing 20 or more
persons, at the State level, officers from central Labour Commis­sion office are
appointed as conciliation officers, in the case of Central government. The
conciliation officer enjoys the powers of a civil court. He is expected to give
judgment within 14 days of the commencement of the conciliation proceedings.
The judgement given by him is binding on the parties to the dispute.
Machinery for Handling Industrial Disputes
Board of Conciliation:

In case the conciliation officer fails to resolve the dispute between the
disputants, under Section 5 of the Industrial Disputes Act, 1947, the
appropriate government can appoint a Board of Conciliation. Thus, the
Board of Conciliation is not a permanent institution like conciliation
officer. It is an adhoc body consisting of a chairman and two or four
other members nominated in equal numbers by the parties to the
dispute.
The Board enjoys the powers of civil court. The Board admits disputes
only referred to it by the government. It follows the same conciliation
proceedings as is followed by the conciliation officer. The Board is
expected to give its judgment within two months of the date on which
the dispute was referred to it.
In India, appointment of the Board of Conciliation is rare for the
settlement of disputes. In practice, settling disputes through a
conciliation officer is more common and flexible.
Machinery for Handling Industrial Disputes
Arbitration:
Arbitration is a process in which the conflicting parties agree to refer their
dispute to a neutral third party known as ‘Arbitrator’. Arbitration differs
from conciliation in the sense that in arbitration the arbitrator gives his
judgment on a dispute while in conciliation, the conciliator disputing
parties to reach at a decision.
The arbitrator does not enjoy any judicial powers. The arbitrator listens to
the view points of the conflicting parties and then gives his decision which
is binding on all the parties. The judgment on the dispute is sent to the
government. The government publishes the judgment within 30 days of
its submission and the same becomes enforceable after 30 days of its
publication. In India, there are two types of arbitration: Voluntary and
Compulsory.
Machinery for Handling Industrial Disputes
Voluntary Arbitration:

In voluntary arbitration both the conflicting parties appoint a neutral third

party as arbitrator. The arbitrator acts only when the dispute is referred to
him/her. With a view to promote voluntary arbitration, the Government of
India has constituted a tripartite National Arbitration Promotion Board in
July 1987, consisting of representatives of employees (trade employers
and the Government. However, the voluntary arbitration could not be
successful because the judgments given by it are not binding on the
disputants. Yes, moral binding is exception to it.
Compulsory Arbitration:

In compulsory arbitration, the government can force the disputing parties

to go for compulsory arbitration. In other form, both the disputing parties
can request the government to refer their dispute for arbitration. The
judgment given by the arbitrator is binding on the parties of dispute.
Adjudication:
The ultimate legal remedy for the settlement of an unresolved
dispute is its reference to adjudica­tion by the government.
The government can refer the dispute to adjudication with or
without the consent of the disputing parties. When the dispute is
referred to adjudication with the consent of the disputing parties, it
is called ‘voluntary adjudication.’
When the government itself refers the dis­pute to adjudication
without consulting the concerned parties, it is known as
‘compulsory adjudication.
The Industrial Disputes Act, 1947 provides three-tier machinery for
the adjudication of indus­trial disputes:

1. Labour Court
2. Industrial Tribunal
3. National Tribunal
Labour Court:
Under Section 7 of the Industrial Disputes Act, 1947, the appropriate
Government by notifying in the official Gazette, may constitute Labour Court
for adjudication of the industrial disputes The labour court consists of one
independent person who is the presiding officer 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 been a presiding officer of a labour court for not less than 5
years. The labour court deals with the matters specified in the second
schedule of the Industrial Disputes Act, 1947.

These relate to:

1. The propriety or legality of an employer to pass an order under the standing
orders.

2. The application and interpretation of standing orders.

3. Discharge or dismissal of workers including reinstatement or grant of relief

to workmen wrongfully dismissed.

4. Withdrawal of any statutory concession or privilege.

5. Illegality or otherwise of a strike or lockout.

6. All matters other than those reserved for industrial tribunals.

Industrial Tribunal:

Under Section 7A of the Act, the appropriate

Government may constitute one or more Industrial
tribunals for the adjudication of industrial disputes.
Compared to labour court, industrial tribunals have a
wider jurisdiction. An industrial tribunal is also
constituted for a limited period for a particular dispute on
an adhoc basis.
The matters that come within the jurisdiction of an industrial tribunal
include the following:

1. Wages, including the period and mode of payment.

2. Compensatory and other allowances.

3. Hours of work and rest periods.

4. Leave with wages and holidays.

5. Bonus, profit sharing, provident fund, and gratuity.

6. Classification by grades.

7. Rules of discipline.

8. Rationalisation.

9. Retrenchment of employees and closure of an establishment or

undertaking.

10. Any other matter that can be prescribed.

National Tribunal:

This is the third one man adjudicatory body appointed

by the Central Govern­ment by notification in the
Official Gazette for the adjudication of industrial
disputes of national importance. The central
Government may, if it thinks fit, appoint two persons
as assessors to advise the National Tribunal. When a
national tribunal has been referred to, no labour court
or industrial tribunal shall have any jurisdiction to
adjudicate upon such matter.
The main highlights revealed from figures in Table 25.7 are
gleaned as follows:

1. Referring of disputes to conciliation machinery is a common practice

is well indicated by a large number of disputes taken for conciliation.

2. On an average, around one-third of the disputes referred for

conciliation failed. Of these, about 60 to 90 per cent of cases were
referred to adjudication. Only one per cent of the cases were referred
for arbitration. These underline the ineffectiveness of conciliation
machinery in settling industrial disputes. Thus, the existing machinery
for the settlement of industrial disputes, as provided under the
Industrial Disputes Act, 1947, needs to be strengthened.

3. Adjudication has proved the most popular way of settling industrial

disputes in India. This is because adjudication is the last recourse for
disputing parties to settle their disputes.