Introduction

Though the concept of labour was prevalent in India since 2250 B.C. from the code of Hamurabi, its
importance is realized only after the industrial revolution and the rise of communism. There arouse
a situation to protect the rights of the labour against the dominant employer community.

When such a realization has spread among the workers’ community, several disputes started arising
between the management and labour giving way to new legislations. One of such legislations is
Industrial Disputes Act,1947 with the aim of settling the industrial disputes in peaceful and
harmonious way which proceeded from Rule 81-A of Defence of India Rules,1939. The Act provides
for the establishment of several authorities under Chapter III for the purpose of settling industrial
disputes and Chapter IV deals with the power and duties of such authorities. The authorities have
been divided into adjudicatory and non-adjudicatory bodies for the purpose of understanding and
their mechanism is also explained in this project.

The objective of the project is

 To analyse the working pattern of dispute settlement authorities in India

 To understand the dispute settlement mechanism under different authorities
 To critically evaluate the concept of dispute settlement with judicial interpretation

Dispute settlement mechanism

Conciliation:
Conciliation is a process where the dispute between the employer and workmen are referred to a
third party and the third party helps them to come to an agreement. However, he is not the ultimate
decision maker. He helps the disputants to come to a consensus. For the purpose of conciliation
only, the appropriate governments appoint conciliation officers and constitute board of conciliation
as mentioned above. This process has come out successful in many industrialized countries. The
success of the conciliation machinery in India can be accounted by statistics.

However, it has failed in some states too. The non-adjudicatory bodies follow the process of
conciliation.

The conciliation proceedings generally commence from the reference of the disputes by the
appropriate government. During the pendency of the conciliation proceedings, strikes and lockouts
are prohibited in public utility services and the exercise of management’s prerogative [2].

A conciliation proceeding is deemed to have concluded:

 When the settlement is arrived and memorandum of settlement is signed by both the
parties
 When no settlement is arrived, then the report of the board is actually received by the
appropriate government [3] and is published under sec.17
 When reference is made to a labour court, tribunal or national tribunal under sec.10

The settlement as defined by sec.2 (p) as that arrived at in the course of conciliation proceeding and
includes a written agreement signed by the parties and a copy is sent to the officer authorized by the
appropriate government. ‘In the course of conciliation proceedings’ essentially requires that the
settlement is arrived during the conciliation proceedings are pending[4]. The settlement must be in
form 4 as mentioned under Rule 58 (i).

The settlement must be fair, just and bonafide and it should be published by the appropriate
government under sec.17 (1). The settlement shall come into force on the date in which the
memorandum of settlement is signed and agreed by the parties[5] and it can be terminated by
written intimation after the expiry of two months from the date of the notice (where the notice is
given after the expiry of 6 months after the memorandum of settlement is signed by both the parties
or any period prescribed thereof)[6].

Thus sec.18(3) of ID Act differs from contract law and lead us towards theory of collective bargaining
where the settlement reached by the representative binds the workmen beyond him not only the
existing workmen but also the future workmen [9].

ITC Ltd. workers’ welfare association v. mgmt. of ITC ltd. [10], decides five important issues
connected with the settlement arrived at the course of conciliation proceedings.

The court decided that

 the industrial tribunal cannot ignore the settlement unless it is found contrary to the
mandatory provisions of the Act
 the settlement binds on all the workmen despite of any objections
 the settlement is presumed to have arrived by just and fair manner
 the settlement should be given more weightage with regard to collective bargaining and
settlement cannot be ignores unless it is unfair, unjust and malafide
 the settlement is not liable to be tested on the touchstone of Art.14

Adjudication:
Adjudication means a mandatory settlement of Industrial Disputes by labour courts, Industrial
Tribunals or National Tribunals under the Act or by any other corresponding authorities under the
analogous state statutes. The ultimate remedy of unsettled dispute is by way of reference by the
appropriate government to the adjudicatory machinery for adjudication [11]. The adjudicatory
authority resolves the Industrial Dispute referred to it by passing an award, which is binding on the
parties to such reference.

There is no provision for appeal against such awards and the same can only be challenged by way of
writ under Articles 226 and 227 of the Constitution of India before the concerned High Court or
before the Supreme Court by way of appeal under special leave under Article 136 of the Constitution
of India which have superintending jurisdiction also[12].

This concept of compulsory adjudication was introduced in India by Rule 81-A of the Defence of India
Rules. Though it was repealed, it is incorporated in ID Act. Its main aim is to promote industrial
peace.

There are three adjudicatory bodies in India as mentioned earlier:

Labour Courts, Industrial Tribunals and National Tribunals. Disputes are generally referred by the
appropriate government on the recommendation of conciliation officers. The appeals from the
conciliation authorities are generally dealt by these bodies. The system of adjudication is made
compulsory as trade unions are weak in India.
It provides for settling disputes related to wages, working hours, holidays, safe conditions of working
etc., the general principles of labour adjudication are as follows:

 The adjudicatory bodies cannot go beyond the scope of the matter referred[13]
 The findings must be based only on the relevant and material facts proved in the case[14]
 A tribunal cannot avoid or relinquish the jurisdiction[15]
 Tribunals are not bound to adjudicate upon when the workers give up their demand as held
in Glaxo laboratories Ltd. v. Labour court, Guntur[16].
 The government has no power to take away the jurisdiction of the labour courts during the
pendency of the proceedings as held under Sindri cement factory union v. Dass[17].
 The rules of res judicata and estoppel need not necessarily be applied to industrial
adjudication as held in Indian general navigation railway co, v. workmen[18].
 The tribunals and labour courts have some implied powers under sec.11 A (inserted by 1971
amendment). They can deal with the industrial disputes regarding the dismissal or discharge
of workman provided that they rely on the material records and not beyond that.
 The rules of natural justice should be strictly followed[19].

Voluntary 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[20]. When negotiations fail, the parties opt for voluntary arbitration. The
decisions of the arbitrators are binding on the parties. This clause has been inserted into the ID Act
by 1956 amendment. Sec. 10A (1) authorizes the parties to make reference to voluntary arbitrator.

The conditions are:

 The industrial dispute must exist or be apprehended

 The agreement must be in writing

Sec.10A (2) (d) requires the arbitration agreement to be in Form C and Rule 7 of ID (Central) Rules,
1957. However, it is enough that the requirements of that form are substantially complied with and
it need not be necessarily in the prescribed Form C as held in North Orissa Worker’s Union v. State of
Orissa[21]. The agreement should be signed by the parties. Non-compliance of the signature of the
parties poses the question of validity of the award. Then such dispute may be referred to the labour
courts. Substantial compliance with the rule that ‘the consent of the arbitrators is must’ is required.
A copy of the arbitration agreement must be sent to appropriate government under sec.10A (3).
Non-submission of the copy would render the award invalid. The government within one month of
the receipt of the copy must publish the same in the official gazette.

The supreme court held in Karnal leather Karamchari Sangathan v. Liberty Footwear Co.[22], that the
arbitration agreement must be published before an arbitrator considered the merits of the disputes.
Non-compliance of this requirement will be fatal to the arbitration award.

The arbitrators must sign the award and send it to the appropriate government. Where a reference
is made to even number of arbitrators, an umpire shall be appointed whose ‘award’ shall prevail.
Such awards can be supervised by the High Court under Art.227 and by the Supreme Court under
Art.136 as the 1964 amendment extended the application of ID Act as held in Rohtas industries v.
Rohtas industries Staff Union (supra).
The second National commission on Labour felt that the arbitration as a dispute settlement
machinery is better than adjudication. Sec.10A (5) excludes the application of Arbitration Act,1940 in
the arbitration of industrial disputes.

Non-adjudicatory bodies:
Works committee (sec.3):

In the case of an industrial establishment in which 100 or more workmen are employed on any day
in the preceding 12 months, the appropriate Government may require the employer to constitute a
'Works Committee[30]'. It consists of equal number of representatives of employers and workmen
engaged in an industry. The representatives of the workmen shall be chosen from amongst the
workmen engaged in the establishment and in consultation with the registered trade union, if any
(registered under Indian Trade Unions Act,1926)[31].

Works committee deals with the workers problem arising day to day in the industrial establishment.
They have been set up to promote amity and good relations between the employer and workmen as
given under sec.3(2) of ID Act.

In Kemp & Company Ltd., v. their Workmen[32], that The Works Committees are normally
concerned with problems arising in the day to day working of the concern and the functions of the
Works Committees are to ascertain the grievances of the employees and when occasion arises to
arrive at some agreement also.

The scope of the committee is vague. Apart from dealing with the disputes on terms of employment
and conditions of labour, they also deal with technical matters and advise the company about its
sale and trade positions.

The first national commission on labour,1969 suggested some methods to have effective functioning
of works committee:

 A more responsive attitude on the part of management

 Adequate support from the union
 Proper appreciation of its scope and functions
 Whole hearted implementation of its recommendations
 Proper coordination of bipartite institutions

Conciliation officers (sec.4):

Sec.4 of ID Act, 1947, provides for the appropriate government to appoint such number of persons
as conciliation officers for settling the industrial disputes. These officers are appointed for a specified
area or for specified industries or for one or more specified industries[36]. Their decisions are not
binding on the parties.

There are no qualifications prescribed for the conciliation officers. They are deemed to be public
servants under sec.21 of Indian Penal Code[37]. While the Com-missioner /additional
commissioner/deputy commissioner is appointed as conciliation officer for undertakings employing
20 or more persons, at the State level, officers from central Labour Commis-sion office are
appointed as conciliation officers, in the case of Central government[38]. 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 judgment given by him is binding on the parties to the dispute[39]. He is
empowered to enforce the attendance of any person or inspect any documents[40] and to enter the
premises of any establishment to which the dispute relates after giving a reasonable notice under
s.11(2). Failure to give the notice affects the legality of the proceedings[41].

In Juggat pharma (P) Ltd v. Deputy Commissioner of labour, Madras[43], where the establishment in
Bangalore appointed several sale representatives in Madras and on the termination of the services,
the dispute was referred to the commissioner in Madras. The court was held to have jurisdiction
irrespective of the fact that the establishment was not situated in Madras.

A writ of mandamus[44] cannot be issued against the conciliation officer asking him to ensure that
the settlements are limited as he has is not empowered to adjudicate the proceedings but to simply
bring the parties to the consensus. Any such settlement can be enforced only by referring it to the
appropriate government under sec.29.

The conciliation proceedings can also be initiated and continued by the legal heirs of the deceased
workmen as held in Dhanalakshmi v. Reserve Bank of India, Bombay[45]. After the termination of
the proceedings, the appropriate government refers the disputes to the adjudicatory bodies.

Board of conciliation (Sec.5):

Whenever there arises a dispute of complicated nature and requires special handling, the
appropriate government constitutes the board of conciliation under sec.5 of ID Act. The Board of
Conciliation is not a permanent institution like conciliation officer[46]. 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. 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[47]. The appropriate government refers the disputes to the board under sec.10(1) (a).
If the chairman of the board is not available, the board cannot function until another member is
appointed in his place as specified under sec.5(4).

The inquiry by the board is deemed to be judicial proceeding within the meaning of sec. 193 and 228
of IPC and sec. 345,346,348 of the code of criminal procedure.

The board:

 Can issue notices to the authorities[48] and can handle ex-parte circumstances[49]
 Can keep certain awards confidential[50]
 Can accept admit, accept or call for evidences at any stage[51]
 can conduct the proceedings in camera[52]if required
 should allow the parties to have the right of examination and cross-examination[53]
 should provide the expenses for witnesses as in civil court[54]

The board has the duty to settle the disputes amicably without any delay as under sec.12(1). If the
settlement has been arrived, a report along with the memorandum of settlement signed by the
parties should be send to the appropriate government under sec.13(1). In case of failure of the
settlement, the board should send a full report to the government along with the recommendation
for the determination of the dispute under sec.13(3) and the government may refer it to the labour
court or tribunals.
Court of inquiry (Sec.6):
The concept is borrowed from the British Industrial Courts Act, 1919. The government may
constitute a court of inquiry under sec.6(1) of ID Act for the purpose of ‘enquiring into any matter
appearing to be connected with or relevant to the industrial dispute’ and submit a report to the
government on the basis of inquiry. Such an arrangement is made when the version or contentions
of the disputants differ, and the situation requires an investigation for the purpose of finding out the
truth. It consists of two or more independent members along with a chairman under sec.6(2). The
court has to inquire into matters referred to it by the appropriate government and submit its report
within 6 months from the commencement of the inquiry[55]. The report shall be published within 30
days of its receipts.

Adjudicatory bodies:
Labour courts (sec.7):
The appropriate government under sec.7(1) may constitute one or more labour courts. It consists of
only one person to be appointed[56] as a presiding officer of the labour court by the appropriate
government who has been the judge of the High court or

 has been a district judge or additional district judge for a period of not less than 3 years or
 has held judicial office in India for not less than 7 years or
 has been the presiding officer of the labour court for not less than 5 years
 has been a Deputy Chief Labour Commissioner (Central) or Joint Commissioner of the State
Labour Department , having a degree in law and at least seven years' experience in the
labour department after having acquired degree in law including three years of experience
as Conciliation Officer[57]
 is an officer of Indian Legal Service in Grade III with three years' experience in the grade[58]
under 7(3) of the Act. He shall continue in office provided he is an independent person[59]
and has not attained the age of sixty-five years or else he will be disqualified under sec.7-C.
the jurisdiction of the court commences by the reference of the dispute to it by the
appropriate government under sec.10. Once the labour court is seized of its jurisdiction of
the term of order of reference made to it, it cannot be extended by the act of the
parties[60].

The labour court has to adjudicate upon industrial disputes specified in second schedule of the act
which includes:

 the propriety or legality of any order passed by an employer under Standing Orders
 the application of interpretation of Standing Orders
 Discharge or dismissal of workmen including re-instatement and such other reliefs
 Withdrawal of any customary concession or privilege
 Illegality or of strikes or lockouts
 All matters other than those specified in third schedule

And perform such other functions assigned to it under ID Act which includes voluntary reference
sec.10(2), arbitration reference sec.10(A) (iii), approval of the action of discharge sec.33, complaints
by aggrieved employees sec.33A, application under sec.33-C (2) and reference of awards and
settlements under sec.36-A.
In Haryana state co-operative land development Bank v. Neelam[61], where a typist appointed in ad-
hoc basis and terminated from her service after 17 months applied to labour court for relief after 7
years from the termination. The labour court denied any relief to the typist and Supreme Court
upheld the decision stating that it is relevant to consider the time period. The appeals of the labour
courts generally lie to the High Court under Art.226/227.

Industrial Tribunals and National Tribunals (sec.7A and 7B):

The appropriate government may constitute one or more Industrial Tribunals (sec.7A) and National
Industrial Tribunals (sec.7B) for the purpose of adjudication of the industrial disputes. These sections
are inserted by 1956 amendment. The Industrial tribunal consists of one person who is or has been a
judge of the High court or has been a District Judge or Additional District Judge for a period not less
than 3 years or has been a Deputy Chief Labour Commissioner (Central) or Joint Commissioner of the
State Labour Department , having a degree in law and at least seven years' experience in the labour
department after having acquired degree in law including three years of experience as Conciliation
Officer[62] or is an officer of Indian Legal Service in Grade III with three years' experience in the
grade[63] under sec.7A(3) and National tribunal consists of a person who is or has been a judge of
the High court under sec.7B(3). The jurisdiction of the court commences from the reference of the
dispute by the appropriate government under sec.10(1) (d). The jurisdiction continues until it makes
an award which is enforceable. They have all the powers of a civil court and they may even appoint
two assessors to assist the proceedings[64].

Previously, before 1956 amendment, the appeals from the labour courts lie to the state tribunal and
then to the tribunal at the centre which was governed by Industrial Disputes (Appellate Tribunal)
Act,1950. But after the incorporation of sec.7A and 7B, tribunals have not been given any appellate
jurisdiction under ID Act. The jurisdiction is confined only to the disputes that are referred by the
appropriate government. But exceptionally in some cases where the state legislations allow for an
appeal to the tribunal, it can be permitted.

For instance, the appeal from the Mumbai labour court goes to the Bombay industrial courts under
sec.84 and 85 of the Bombay Industrial relations Act,1946 and sec.42 of The Maharashtra
Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971.

But nevertheless in such cases, appeals before both the tribunal and courts are valid and if the
appeal is done to both of the courts simultaneously, then the court where it was appealed first
should be given preference. Similar provisions are present in Uttar Pradesh and Madhya Pradesh
also[65].

In Lipton Ltd v. Workmen[66], court held that the jurisdiction of the Tribunals depends on the fact
that the parties reside within the jurisdiction and the subject matter should substantially arise from
that area. The tribunals have the power to adjudicate matters specified in second and third schedule
and such other matters assigned to it[67].

Matters specified in 3rd schedule are:

 Wages, including the period and mode of payment

 Compensatory and other allowances
 Hours of work and rest intervals
 Leave with wages and holidays
 Bonus, profit sharing, provident fund and gratuity
 Shift working otherwise than in accordance with standing orders
  Classification by grades
 Rules of discipline
 Rationalisation
 Retrenchment of workmen and closure of establishment and
 Any other matter that may be prescribed.

Sec.15 of the Act requires the Labour courts and Tribunals to hold their proceedings expeditiously
and shall submit the award to the appropriate government within the prescribed time in the order of
reference or within the period mentioned in sec.10(2A). The procedure for notices, summons,
hearing, inspection are provided under Rules 9 to 30 of ID (Central) Rules,1957 in which case the
application of the code of civil procedure is relaxed to some extent. And these adjudicatory bodies
need not strictly follow the rule of evidence under Indian Evidence Act[68]. The difference between
the ordinary courts of law and these adjudicatory bodies is that there are pre-existing laws with
applicability in the relevant cases which is absent in the latter[69].

They are mostly Quasi-judicial in nature and are bound to follow the natural justice principles except
for the purposes of sec.193 and 228 of IPC and they are of civil nature except for the purposes of
sec.480 and 482 of Cr.P.C. The tribunals adopt the adversary system in contradiction to the
inquisitorial system.

In Graphite India Ltd. v. State of West Bengal[70], the Enquiry officer relying only on the evidence of
one party made the respondent guilty of misconduct. The High Court held that the principles of
natural justice (audi-alteram partem) were not followed in the departmental enquiry and charge was
considered to be invalid.

The power of the labour courts and tribunals has been enlarged under sec.11A where the authorities
are empowered to decide the adequacy of punishment or can pass any order for re-instatement. The
appeal lies to High court or Supreme court as mentioned in the adjudication paragraph (supra p.11)

Conclusion
The reliefs provided by authorities are through settlement or awards. We have discussed about the
settlement by conciliation authorities. Award as defined under 2(b) an interim or a final
determination of any industrial dispute or any question relating to labour court or the tribunals and
also includes an arbitration award under sec.10A. It includes an interim award also. The language of
the award should be in accordance with the judicial interpretation[80]. The award must be signed by
the presiding officer or the arbitrators as the case may be under sec.16 else it would be held void.
Sec. 15 requires the award to be submitted to the appropriate government. Sec.17 (1) mandates the
publication of the award by the appropriate government. The award may operate from the date
specified or where no date specified, the date on which it becomes enforceable[81]. The tribunal has
the power to decide the date on which the benefits can be granted. The award becomes enforceable
after the expiry of 30 days from the date of its publication. And the award ceases to operate after
the expiry of 1 year from the date of enforcement[82] but this period can be extended or curtailed
by the government. The award can be executed as that of the civil court under Order 21 of CPC.