UNIVERSITY INSTITUTE OF LEGAL

STUDIES
2020-21

PROJECT REPORT

LABOUR AND INDUSTRIAL LAWS

TOPIC-

OBJECTIVES OF INDUSTRIAL
DISPUTES ACT, 1947

SUBMITTED TO- SUBMITTED BY-

Dr. Virender Kumar JASKARAN

BCOM LLB(H.)

ROLL NO.-149/16

SEMESTER-9

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 ACKNOWLWDGEMENT
The present project report on Objectives of Industrial Disputes Act, 1947 has been able to get
its final shape with the support and help of people from various quarters. My sincere thanks go to
all the members without whose help the study would not have come to its present state. I am proud
to acknowledge gratitude to the individuals during my study and without whom the study might
not have completed. I have taken this opportunity to thank those who have genuinely helped me.

With immense pleasure, I express my deepest sense of gratitude to Dr.Virender Kumar, who was
very generous in sharing her valuable time and knowledge with me and also guiding me and
motivating me at each and every step throughout this entire time frame.

I am also thankful to the library staff of University Institute of Legal Studies, for providing me
with all the required material which I required to complete my project report.

I have made every effort to acknowledge credits, but my apologies in advance for any omission
that may have inadvertently taken place.

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 CONTENTS
1. Introduction……………………………………………………………………..5
2. Historical Background of the Industrial Disputes Act………………………….5,6
3. General Information of the Act…………………………………………………6
4. The Preamble of the Act………………………………………………………..6
5. Applicability of the Act…………………………………………………………6
6. Definition of the Industrial Disputes……………………………………………7
7. Objects of the Industrial Disputes Act………………………………………….8,9
8. Causes of the Industrial Disputes……………………………………………….10
9. Conclusion………………………………………………………………………11
10. References……………………………………………………………………….12

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 TABLE OF CASES
1. Chandrakant Tukaram Nikam and others v. Municipal Corporation of Ahmedabad and
another……………………………………………………………………………………7
2. Claridge & Co. Ltd. v. Industrial Tribunal Bombay……………………………………..9
3. Hariprasad Shivshankar Shukla v. A. P. Divekar………………………………………..9
4. Hospital Employees Union v. Christian Medical College……………………………….9
5. Jadhav J.H. v. Forbes Gobak Ltd………………………………………………………...7
6. Rajasthan State Road Transport Corporation v. Krishna Kant…………………………...9
7. Workmen, Hindustan Lever Limited v. Hindustan Lever Limited……………………….9
8. Workmen of Dimakuchi Tea Estate v. Management of Dimakuchi Tea Estate………….8

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 INTRODUCTION
For the industrial growth, there must be peace and harmony is a prerequisite. The conflict
between the employees and employers is inherent in industrial society. The Industrial Dispute
Act was enacted to provide machinery and forum for the settlement of such conflicting and
seemingly irreconcilable interests without disturbing the peace and the harmony in industry. The
Act provides social justice to both employees and employers.

The Directive Principles of State Policy enshrined in Part IV of the Constitution, the supreme
lex, are not “pious declarations” but “instruments of instructions” which command every
government in power to promote the well being and the interests of the underdog, namely, the
working class. Many of these Directive Principles seek to establish the social order where
“Justice- social, economic and political” shall be assured to all, especially the working class.
Consequently, the labour laws enacted to protect and promote the interests of the workers should
be accorded a pivotal position in our Legal System.

HISTORICAL BACKGROUND OF
INDUSTRIAL DISPUTES ACT
The first enactment dealing with the settlement of industrial disputes was the Employer’s and
Workmen’s Disputes Act, 1860. Prior to the year 1947, industrial disputes were being settled
under the provisions of Trade Disputes Act, 1929. Experience of the working of the 1929 Act
revealed various defects, which needed to be overcome by fresh legislation. Accordingly, the
Industrial Disputes Bill was introduced in the Legislature. The Bill was referred to the select
committee. On the recommendation of the Select Committee amendments were made in the
original Bill.

Industrial Disputes Act, 1947 is meant for settling disputes, if any, between workers and the
industrialists or factory owners. It is the principal central legislation for settlement of Industrial
disputes.

The main labour laws prior to the Industrial Disputes Act, 1947 were:-

• The Bengal Regulation VII of 1819

• The Workmen’s Breach of Contract Act, 1859
• The Employments & Workmen’s Disputes Act, 1860
• The Trade Disputes Act, 1920
• The Indian Trade Unions Act, 1926
• Trade Disputes Act, 1929

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 • Bombay Trade Disputes Conciliation Act, 1934
• The Trade Disputes Amendment Act, 1938

The major shortcomings of these Acts were that the settlements or awards under these Acts were
not binding or conclusive.

GENERAL INFORMATION OF THE

ACT
• An Act to make provision for the investigation and settlement of industrial disputes and
for certain other purposes.
• It is applicable to the whole of India (including Jammu and Kashmir) w.e.f. on the first
day of April 1947.
• The Act consists of 7 Chapters consisting of 40 Sections, 5 Schedules and Appendix.
• Other related rules are The Industrial Tribunal Procedure Rules, 1949. The Industrial
Tribunal Central Procedure Rules, 1954 and The Industrial Disputes Central Rules, 1957.

THE PREAMBLE OF THE ACT

The Preamble to the Industrial Disputes Act 1947 mentions that this Act makes provision for the
investigation and settlement of Industrial Disputes and certain other purposes. The words “ for
certain purposes” essentially refer and include prevention of Industrial Disputes also as is clear
from the Statement of Objects and Reasons. Thus two institutions prescribed for the prevention
and settlement of Industrial Disputes, provided for in the Bill are the Works Committees
consisting of representatives of employers and workmen and Industrial Tribunals.

APPLICABILITY OF THE ACT

The Industrial Disputes Act extends to the whole of India and applies to every industrial
establishment carrying on any business, trade, manufacture or distribution of goods and services
irrespective of the number of workmen employed therein. Every person employed in an
establishment for hire or reward including contract labour, apprentices and part time employees
to do ant manual, clerical, skilled, unskilled, technical, operational or supervisory work, is
covered by the Act. This Act though does not apply to persons mainly in managerial or
administrative capacity, persons engaged in a supervisory capacity and drawing > 10,000 per
month or executing managerial functions and persons subject to Army Act, Air Force and Navy
Act or those in police service or officer or employee of a prison.

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 DEFINITION OF INDUSTRIAL
DISPUTES
As per Sec 2(k) of Industrial Disputes Act, 1947 an industrial dispute may be defined as a
conflict or difference of opinion between management and workers on the terms of employment.
It is a disagreement between an employer and employee’s representative, usually a trade union,
over pay and other working conditions and can result in industrial actions. When an industrial
dispute occurs, both the parties, that is the management and the workmen, try to pressurise each
other. The management may resort to lockouts while the workers may resort to strikes, picketing
or gheraos.., an industrial dispute is between employers and workmen, or between workmen and
which is connected with the employment or non employment or the terms of employment or with
the conditions of labour, of any person.

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

• 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.
• It affects the interests of not merely an individual workmen but several workmen as a
class who are working in an industrial establishment.
• The dispute may be in relation to any workman or workmen or any other person in whom
they are interested as a body.

In Chandrakant Tukaram Nikam and others v. Municipal Corporation of Ahmedabad and

another1, it was held by the Supreme Court that jurisdiction of the civil court was impliedly
barred in cases of dismissal or removal from service. The appropriate forum for such relief was
one constituted under Industrial Disputes Act, 1947.

In Jadhav J.H. v. Forbes Gobak Ltd,2 it was held that a dispute relating to a single workmen
may be a industrial dispute if either it is espoused by the union or by a number of workmen
irrespective of the reason the union espousing the cause of workman was not the majority of the
union.

1 Civil Appeal No. 4849-4854 of 1992

2 Civil Appeal No. 1089 of 2005

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OBJECTS OF INDUSTRIAL DISPUTES
ACT
The main object of the Industrial Disputes Act, 1947 is to investigate and settle the industrial
disputes. For the purpose of investigation and settlement of the industrial disputes, the Act
provides for the machinery and procedure for ensuring a speedy resolution of industrial disputes.
Speedy resolution of industrial disputes achieves twin objectives, first smoothness in the
relationship between labour and management and second uninterrupted production in the
industries. Smooth labour-management relationship and uninterrupted production achieves not
only industrial peace but also provides economic stability to any Nation.

On the basis of various judgements given from time to time by the Supreme Court, the principal
objective of the Act may be stated as follows:-

1. To make provision for the investigation and settlement of industrial disputes and for
certain other purposes.
2. To ensure social justice to both employers and employees and advance the progress of the
industry by bringing about harmony and cordial relationship between the parties.
3. To provide machinery for settling disputes arising between the capital and labour by
peaceful methods and through the machinery of conciliation, arbitration and if necessary,
by approaching the tribunals constituted under the Act.
4. To promote measures for securing and preserving amity and good relations between
employer and workmen.
5. To enable workmen to achieve their legitimate demands by means of the legitimate
weapons of strikes, and thus promote collective bargaining.
6. To prevent illegal strikes and lockouts.
7. To provide relief to workmen in cases of layoff, retrenchment and closure.
8. To enable the State to play a constructive role in employer workmen relationship. Thus
the concept of Welfare State is maintained.

In Workmen of Dimakuchi Tea Estate v. Management of Dimakuchi Tea Estate3, the Supreme
Court laid down following objectives of the Act:-

• Promotion of measures of securing and preserving amity and good relations between the
employer and workmen.
• Investigation and settlement of industrial disputes between employers and employers,
employers and workmen, or workmen and workmen with a right of representation by

3 AIR 1958 SC 353.

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 registered trade union or federation of trade unions or an association of employers or a
federation of associations of employers.
• Prevention of illegal strikes and lock-outs.
• Relief to workmen in the matter of lay off and retrenchment
• Promotion of collective bargaining.

In Workmen, Hindustan Lever Limited v. Hindustan Lever Limited 4, the Court opined that the
court by the interpretative process must strive to reduce the field of conflict and expand the area
of agreement and show its preference for upholding agreements sanctified by mutuality and
consensus in the larger public interest, namely to eschew industrial strife, confrontation and
consequent wastage.

In Hospital Employees Union v. Christian Medical College5, the court held that the Act applies
to all industries irrespective of religion or caste of parties. It applies to the industries owned by
the Central and State Governments too.

In Claridge & Co. v. Industrial Tribunal Bombay6, the court held that the purpose of the Act is
to provide machinery for just and equitable settlement by adjudication by independent tribunals,
by negotiations and conciliations of industrial disputes. It substitutes arbitration and fair
negotiation, instead of the trial of strength by strikes and lock-outs.

In Hariprasad Shivshankar Shukla v. A. P. Divekar,7 the court observed that the purpose of all
labour legislation is to provide fair wages and prevent disputes so that production might not be
adversely affected.

In Rajasthan State Road Transport Corporation v. Krishna Kant,8 the court observed: “the
policy of law emerging from the Act…. Is to provide an alternative dispute resolution
mechanism to the workmen, a mechanism which is speedy, inexpensive, informal and un-
encumbered by the plethora of procedural laws and appeals upon appeals and revisions
applicable to Civil Courts….”

4 AIR 1999 SC 525.

5 (1987) 4 SCC 691
6 AIR 1951 BOM 100.
7 AIR 1957 SC 121.
8 AIR 1995 SC 1715.

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 CAUSES OF INDUSTRIAL DISPUTES
The main causes of industrial disputes are:-

• Wages:- Low wages of industrial workers constitute a major cause of industrial disputes
in the country. Wages have not been rising in proportion to the rise in prices (inflation).
Hence labourers to demand higher wages which management may deny and it
consequently leads to disputes.
• Bonus:- It is the second major cause of industrial disputes. The workers feel that they
should have a greater share in the profits of the industrial concern and demand higher
bonus which management may deny and it consequently leads to disputes.
• Working Conditions:- The working conditions such as lesser working hours, the
security of a job, better safety measures in the factory, restrooms, leave, canteen, gratuity
facilities etc are important for workers for their motivation towards the job. Lack of or
insufficient working conditions are also responsible for many industrial disputes.
• Trade Unions:- Recognition of trade union and rivalry between different trade unions is
also the main cause of industrial disputes.
• Retrenchment:- Due to modern techniques and modern machinery, production is
simplified and require less labour. In such a case, the management tries to reduce the
manpower by retrenchment. This may create insecurity in the minds of workers and may
lead to industrial dispute.
• Political Influence:- Most of the trade unions are associated with one or another
political party. To score political point politicians may indulge in creating disputes in the
industry.

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 CONCLUSION
The Industrial Dispute Act 1947 is the most elaborative part of legislation that governs the
formation and conduct of industrial affairs. The Act confers a variety of powers on the Central
Government and the Industrial Law board to monitor , regulate and controls the affairs of the
Industries. The Industrial Disputes Act secures Industrial peace and harmony by providing
machinery and procedure for the investigation and settlement of industrial disputes by
negotiations. All the business and industrial laws which has been constituted are for the
protection of rights of employees solving disputes in harmonised way.

Various studies indicate that Indian Labour Laws are highly protective of labour, and labour
markets are relatively inflexible. These laws apply only to the organised sector. Consequently,
these laws have restricted labour mobility which have led to capital intensive methods in the
organized sector and adversely affected the sector long run demand for labour. Labour being a
subject in the concurrent list, State level labour regulations are also an important determinant of
industrial performance but still there are some weaknesses of Indian labour legislation.

First, the legislation allows a multiplicity of unions thereby which creates a intense inter union
rivalry that generates a large number of industrial disputes.

Second, the dispute resolution machinery has increasingly failed to bring about timely
agreements and reduce the number of workdays lost due to work stoppages.

Finally, there seems to be need to encourage parties to use collective bargaining, rather than rely
on third party dispute resolution.

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 REFERENCES
• Meenu Paul, Labour and Industrial Law, Allahabad Law
Agency, Edition 2020.
• Bare Act : The Industrial Dispute Act, 1947
• http://www.legalservicesindia.com/article/822/Workmen-Of-
Dimakuchi-Tea-Estate-V.-The-Management-of-Dimakuchi-
Tea-Estate.html
• http://www.legalserviceindia.com/legal/article-942-industrial-
disputes-act-1947.html
• https://www.lawctopus.com/academike/industrial-disputes-
and-individual-disputes-under-industrial-disputes-act-1947/

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