Unit 3

Resolution of Industrial Dispute

The Industrial Dispute Bill was introduced by the Government of India in the
Legislative Assembly on 28th October, 1946. After the Select Committee’s
Report on 3rd February, 1947 with some amendments it was passed in March
1947 and became the law fro 1st April, 1947 repealing the Trade Disputes Act
1929.
The purpose of the Industrial Disputes Act has been to harmonies the
relations between the employer and the employees and thereby to restore
and maintain industrial peace. The object and reason was to provide effective
machinery for settlement of industrial disputes to prohibit and restrict strikes
and lock-outs, to provide retrenchment compensation to retrenched
employees, to provide certain rules regarding lay-off.
The Supreme Court has observed in Workmen of Dimakuchi Tea Estate v.
The Management of Dimakuchi Tea Estate that an examination of the salient
provisions of the Industrial Disputes Act shows that the principal objects of the
Act are

1. The promotion of measures for securing and preserving amity and good
relations between the employer and workmen
2. An investigation and settlement of industrial disputes between employers
and employers, employers and workmen, or workmen and workmen, with a
right of representation by a registered trade union, or federation of trade
unions or association of employers or a federation of association of employers.
3. Prevention of illegal strikes and lock-outs.
4. Relief to workmen in the matter of lay-off and retrenchment.
5. Collective bargaining.

Industrial Dispute and Individual Disputes:

Section 2(K) Industrial Dispute is “any dispute of 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 the terms of employment or with the conditions of labour of
any person.”

Industrial dispute as defined under Sec. 2(k) exists between

Parties to the dispute who may be
 Employers and workmen
 Employers and Employers
 Workmen and workmen

a) There should be a factum of dispute not merely a difference of opinion.

b) It has to be espoused by the union in writing at the commencement of the
dispute. Subsequent espousal will render the reference invalid. Therefore
date when the dispute was espoused is very important.
c) It affects the interests of not merely an individual workman but several
workmen as a class who are working in an industrial establishment.
d) The dispute may be in relation to any workman or workmen or any other
person in whom they are interested as a body.

The definition of “Industrial Dispute” under section 2(K) may include within its
ambit a dispute between a single workman and his employer, because the
plural in the context, will include the singular.

Before insertion of Section 2-A of the Act an individual dispute could not per
se be an industrial dispute, but it could become one if taken up by the Trade
Union or a number of workmen. The Supreme Court and indeed majority of
Industrial Tribunals are inclined to take the view that a dispute raised by a
dismissed employee provided it is supported either by his Union or in the
absence of a Union, by a number of workmen can become an industrial
dispute.
In order that the individual disputes may be held to be an industrial dispute it
is necessary that it must fulfill two conditions:

(i) That the workmen as a body or a considerable section of them must be

found to have made common cause with the individual workmen
(ii) That the dispute was taken up or sponsored by the workmen as a body or
a considerable section of them at a time before the date of reference.

Section 2-A provides that “where any employer discharges, dismisses,

retrenches or otherwise terminated the services of any individual workman,
any dispute or difference between that workman and his employer connected
with, or arising out of such discharge, dismissal,retrenchment or termination
shall be deemed to be an industrial dispute, notwithstanding that no other
workman nor any union of workmen, is a party to the dispute.”
 Any workman may make an application directly to the labour court or
Industrial Tribunal for adjudication of such dispute after the expiry of 3
months when an application was made before the conciliation officer. This
has been done to prevent inordinate delay.
 The said application however should be made within 3 years of the date of
dismissal, discharge, retrenchment or termination of service.
 The court shall proceed to hear the matter as if it was referred to it U/S 10
of the ID Act.

Arena of Interaction and Participants: Industry, Workman and Employer

Section 2(j) defines ‘industry’ to mean: any business, trade, undertaken,

manufacture or calling of employers and including any calling, service,
employment, handicraft or industrial occupation or avocation of workmen.
Section 2(s) ‘Workman’ means any person (including an apprentice employed
in any industry to do any manual, unskilled, skilled, technical, operational,
clerical or supervisory work for hire or reward, whether the terms of
employment be express or implied, and for the purposes of any proceeding
under this Act in relation to an industrial dispute, includes any such person
who has been dismissed, discharged or retrenched in connection with, or as a
consequence of, that dispute, or whose dismissal, discharge or retrenchment
has led to that dispute, but does not include any such person-
(i) who is subject to the Air Force Act, 1950 (45 of 1950), or the Army Act,
1950 (46 of 1950), or the Navy Act, 1957 (62 of 1957); or
(ii) who is employed in the police service or as an officer or other employee of
a prison; or
(iii) who is employed mainly in a managerial or administrative capacity; or
(iv) who, being employed in a supervisory capacity, draws wages exceeding
one thousand six hundred rupees per mensem or exercises, either by the
nature of the duties attached to the office or by reason of the powers vested in
him, function mainly of a managerial nature.

Section 2(g) "employer" means

(i) in relation to an industry carried on by or under the authority of any
department of [the Central Government or a State Government,] the authority
prescribed in this behalf, or where no authority is prescribed, the head of the
department.

(iii) in relation to an industry carried on by or on behalf of a local authority, the

chief executive officer of that authority.

The Supreme Court was called upon to interpret the word ‘industry’ for the
first time in D.N Banerji v. P.R Mukherjee4 also known as Budge Budge
Municipality Case. In this case court observed (with reference to Federated
Municipal and shrie Council Employees’ Union of Australia v. Lord Mayor,
Alderman, Councilors and Citizen of the Melbourne Corporation5 ) that
Industrial disputes occur when in relation to operations in which capital and
labour are contributed in corporation for the satisfaction of human wants and
desires, those engaged in cooperation dispute as to the basis to be observed,
by the parties engaged, respecting either in share of the product or any other
terms and conditions of their cooperation. The Supreme Court accordingly
dismissed the appeal filed by the municipality.

The court also ruled that neither investment of capital nor profit motive was
sine qua non for determining whether an activity was an ‘industry’ or not. The
court accordingly held that several departments of municipal corporation,
namely
i) Tax dept.
ii) Fire brigade dept.
iii) Public conveyance department
iv) Lighting department
v) Water works dept.
vi) City engineering dept.
vii) Enforcement dept.
viii) Sewerage dept.
ix) Estate dept.
x) General administration dept.
were not discharging sovereign or regal function and were therefore included
within the definition of industry.
Settlement of Industrial Disputes.

To protect the interest of the community as well as that of labour and

management, legislature has found it necessary to intervene in labour
management relations. Thus, the Industrial Disputes Act , 1947 provides for
the constitution of various authorities to preserve industrial harmony. At the
lowest level is the works committee. The various machineries for investigation
and settlement of industrial disputes under the Act are:
i) Conciliation
ii) Court of Inquiry
iii) Adjudication
iv) Voluntary arbitration

Work Committee

The institution of work committee was introduced in 1947 under the Industrial
Disputes Act 1947, to promote measures for securing and preserving amity
and good relations between employers and workmen. It was meant to create
a sense of partnership or comradeship between employers and workmen. It is
concerned with problems arising in day to day working of the establishment
and to ascertain grievances of the workmen.
 In the case of any industrial establishment in which one hundred or more
workmen are employed or have been employed on any day in the
preceding twelve months, the appropriate Government may by general or
special order require the employer to constitute in the prescribed manner
a Works Committee consisting of representatives of employers and
workmen engaged in the establishment so however, that the number of
representatives of workmen on the Committee shall not be less than the
number of representatives of the employer.
 It shall be the duty of the Works Committee to promote measures for
securing and preserving amity and good relations between the employer
and workmen and, to that end to comment upon matters of their common
interest or concern and endeavor to compose any material difference of
opinion in respect of such matters.
 There are Joint Committees of employers and employees for the purpose
of promoting good relations between the parties. The Committees attempt
to remove causes of friction between employers and workers in the day-
to-day working of the factory. They provide a forum for negotiations
between employers and workers at the factory level. The Government
may direct industrial establishments with 100 or more workers to
constitute such works committees.

Remedial Measures:

The National Commission on Labour suggested the following measures for

the successful functioning of a works committee:
a) A more responsive attitude on the part of management
b) Adequate support from unions
c) Proper appreciation of the scope and functions of the works committee
d) Proper coordination of the functions of the multiple bipartite institutions at
the plant level now in vogue.

Steps for success of a work committee

i) Trade unions should change their attitude towards the work committee.
ii) The management should also realize that some of their known prerogatives
are meant to be parted with.
iii) Recognition therefore should be incorporated in the Trade Union Act, 1926.

Conciliation Machinery

The appropriate Government has been authorized to appoint one or more

Conciliation Officers for mediating and promoting the settlement of industrial
disputes. A Conciliation Officer can be appointed either for a specified area or
for a specified industry or industries. In order to bring about a right settlement
of a dispute, a Conciliation Officer is given wide desecration. Whereas, it is
obligatory on the parties involved in the dispute to appear before him, is
summoned, but they are not bound to accept his point of view. Conciliation as
a mode of settings industrial disputes has shown remarkable success in many
industrialized countries.

Conciliation Authorities:
a) Appointment of Conciliation Officer- under Section 4, the appropriate
government is empowered to appoint conciliation officers for promoting
settlement of industrial disputes. These officers are appointed for a specified
area or for specified industries in a specified area or for one or more specified
industries, either permanently or for a limited period.
b) Constitution of Board of Conciliation- Where dispute is of complicated
nature and requires special handling, the appropriate government is
empowered to constitute a board of conciliation. The board is preferred to
conciliation officers. The board is constituted on an ad hoc basis. It consists of
an independent persons as chairman and one or two nominees respectively
of employers and workmen as members. The chairman must be an
independent person. A quorum is also provided for conducting the
proceedings.

Duties of Conciliation Authorities:

Duties of Conciliation Officers- A Conciliation Officer may take appropriate

steps for inducing the parties to a fair and amicable settlement of the dispute.
If a settlement is arrived at during conciliation proceedings, he must send a
copy of the report and the memorandum of the settlement signed by the
parties to appropriate Government or an officer authorized by it. In case no
settlement is arrived at, he is required to send to appropriate Government, full
report of the steps taken by him to resolve the dispute, and the reasons on
account of which a settlement could not be arrived at.
The Conciliation Officer is required to submit his report within fourteen days of
the commencement of the conciliation proceedings, but the time for the
submission of the report may be extended further on the written request of the
parties to the dispute. Where a settlement is not reached, the appropriate
Government, after considering the report of the conciliation officer, may refer
the dispute to a Board of Conciliation or Labour Court or Industrial Tribunal or
National Tribunal as the case may be.

Duties of Board of Conciliation: A board to which a dispute is referred must

investigate the dispute and all matters affecting the merits and the right
settlement thereof and do all things for purpose of inducing the parties to
come to a fair and amicable settlement of the dispute without delay.
If a settlement is arrived at, the board should send a report to the appropriate
government together with a memorandum of the settlement signed by the
parties to the dispute. If no settlement is reached, the board must send a full
report together with its recommendation for the determination of the dispute.
Then ‘appropriate government’ may refer the dispute to a labour court,
tribunal or national tribunal.

Court of Inquiry

The appropriate Government is empowered to constitute a “Court of inquiry”

as occasion arises, for the purpose of ‘inquiry in to any matter appearing to
connect with or relevant to an industrial dispute”. Generally Court of Inquiry is
constituted when no settlement is arrived at as a result of efforts made by the
Conciliation Board. A Court of Inquiry is required to enquiry into the matter
referred to it and report appropriate Government ordinarily within a period of
six months from the commencement of its inquiry. The report of inquiry is to
be in writing and sign by the all members but any of its members is free to
record any minute of dissent from any office recommendations. The idea of
Court Inquiry is new in this Act and has been borrowed from the British
Industrial Court Act, 1919. Under the British Act, the Minister-in-charge can
constitute a Court of inquiry to enquire into and report on the causes and
circumstances of any trade dispute together with its own recommendations.
The report should be given vide publicity to rouse public interest in the matter
in order to prevent any irrational step on the part of the parties for fear of
public condemnation.

Setting of a Court of Inquiry is at the discretion of an appropriate Government.

The Government can refer any single or more matter connected or relevant to
the dispute or can refer whole to the Court which can be set up irrespective of
consent of parties to dispute. Usually, the Courts of Inquiry comprise one
person. In case it has more than one member one of them will be nominated
as Chairmen usually. The Court of Inquiry has to submit its report with in six
months. After receiving the report of the Court of Inquiry, the Government may
refer the dispute to one of the adjudication authorities or Labour Courts or
Industrial Tribunal or National Tribunals as the case may be.

Voluntary Arbitration:

Voluntary arbitration is one of the effective modes of settlement of an

industrial dispute, it supplements collective bargaining. When negotiation fails,
arbitration may prove to be a satisfactory and most enlightened method or
resolving an industrial dispute.
It is important because it is
i) Expected to take into consideration the realities of the situation
ii) Expected to meet the aspiration of the parties
iii) Based on voluntarism
iv) Does not compromise the fundamental position of the parties
v) Expected to promote mutual trust

Section 10A (1) of the Industrial Disputes Act, 1947 authorizes the parties to
make reference to a voluntary arbitrator. But before the reference may be
made to the arbitrator, four conditions must be satisfied:-
1. The Industrial Dispute must exist or be apprehended
2. Agreement must be in writing
3. The reference must be made before a dispute has been referred under
Section 10 to a labour court, tribunal or national tribunal
4. The name of arbitrator must be specified

Adjudication: Labour Court, Tribunal and National Tribunal

The final stage in the settlement of industrial disputes is compulsory

arbitration which envisages governmental references to statutory bodies such
as labour court, industrial tribunal or national tribunal. Disputes are generally
referred for adjudication on their recommendation of the conciliation officer
who had dealt with them earlier. When the dispute is referred to adjudication
with the consent of the disputing parties, it is called ‘voluntary adjudication.’
When the government herself refers the dispute to adjudication without
consulting the concerned parties, it is known as ‘compulsory adjudication.

The Industrial Disputes (Amendment and Miscellaneous Provisions) Act, 1956

introduces threetier machinery for the adjudication of industrial disputes:
1. Labour Court
2. Industrial Tribunal
3. National Tribunal

The system of adjudication by labour court, tribunal, and national tribunal has
perhaps been one of the most important instruments of regulating the rights of
the parties in general and wages, allowances, bonus, working conditions,
leave, holidays and social security provisions in particular. The appropriate
government is empowered under Section 7 and 7A to constitute one or more
labour courts and industrial tribunals with limited jurisdiction, to adjudicate
‘industrial disputes’ and central government is authorized under Section 7B to
constitute the 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 property 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 ad hoc 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. Rationalization.
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.

Powers of the Appropriate Government under the Industrial Disputes Act,

1947

Section 10 of the Industrial Disputes Act, 1947, empowers the appropriate

government not only to refer the industrial dispute but also to choose the
disputes settlement process. Thus sub-section (1) provides
Where the appropriate government is of the opinion that any industrial dispute
exists or is
apprehended, it may at any time, by order in writing-
(a) Refer the dispute to a Board for promoting a settlement thereof; or
(b) Refer any matter appearing to be connected with or relevant to the dispute
to a Court for inquiry; or
(c) Refer the dispute or any matter appearing to be connected with, or
relevant to, the dispute, if it relates to any matter specified in the Second
Schedule, to a Labour Court for adjudication; or
(d) Refer the dispute or any matter appearing to be connected with, or
relevant to, the dispute, whether it relates to any matter specified in the
Second Schedule or the Third Schedule, to a Tribunal for adjudication.

Unfair Labour Practice

Unfair Labour Practice means any of the practices specified in fifth schedule.
The definition of this expression has been inserted for the first time by the
amendment made in 1982 which has come into force with effect from 1984.
The fifth Schedule has been inserted by the same amendment. It contains
several practices. In category I it contains 16 practices which are said to be
unfair practices on the part of employers or their trade unions.
On the other hand Category II of the fifth Schedule contains eight practices
which are said to be unfair labour practices on the part of the workmen or their
trade unions such as to advice or actually support or instigate any strike
deemed to be under the Act to stage demonstration at the residence of the
employers or the managerial staff members, to incite or indulge in willful
damage to employer’s property connected with the industry, to indulge in acts
of force or violence or to hold out threats of intimidation against any workmen
with a view to prevent from attending work etc.

Unfair conduct of an employer during the course of employment

1. refusal to promote or demotion
2. unfair conduct during the course of the probation period
3. refusal to provide benefits or training
4. unfair suspension
5. disciplinary action short of dismissal such as warnings or suspension
without pay or transfers

Haryana State Electronics Development Corporation Ltd. v. Mamni

Therein the action on the part of the employer to terminate the services of an
employee on regular basis and reappoint after a gap of one or two days was
found to be infringing the provisions of Section 25-F of the Industrial Disputes
Act. This Court held: In this case the services of the respondent had been
terminated on a regular basis and she had been reappointed after a gap of
one or two days. Such a course of action was adopted by the Appellant with a
view to defeat the object of the Act.