METHODS OF

PREVENTION OF
INDUSTRIAL DISPUTES

Dr. Archana Yadav

archana.yadav@gla.ac.in
Outlines
• Introduction
• Methods of Settlements of Industrial Disputes
1. Conciliation
2. Arbitration
3. Adjudication
• References
Meaning of Industrial Dispute

• According to the Industrial Disputes Act, 1947, the term 'industrial

dispute' means "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 non-
employment, or the terms of employment or with the conditions of labour,
of any person“.

<SELO: 1> <Reference No.: R2>

Industrial Disputes

-The industrial dispute means any dispute or difference between:-

(i) Employers and employers

(ii) Employers and Workmen or

(iii) Workmen and workmen, which is connected with

– Industrial disputes may be said to be disagreement or controversy between

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

<SELO: 1> <Reference No.: R2>

Industry

• As per section 2 (J) of industrial disputes act 1947, Industry mean any
systematic activity carried on by cooperation between an employ and his
work man for the production supply or distribution of goods and services
with a view of satisfy human wants or needs.

<SELO: 1> <Reference No.: R2>

Types of Industrial Disputes

<SELO: 1> <Reference No.: R2>

Methods For Settlement Of Industrial Disputes

1. Conciliation

2. Arbitration

3. Adjudication

<SELO: 1> <Reference No.: R2>

Conciliation

• Conciliation is the “practice by which the services of a neutral party are

used in a dispute as a means of helping the disputing parties to reduce the
extent of their differences and to arrive at an amicable settlement of
agreed solution.”

• The Industrial Disputes Act, 1947 provides for “Conciliation Officer or A

Board of Conciliation”.

<SELO: 1> <Reference No.: R2>

Conciliation Officer

• A Conciliation Officer Is a Person appointed by the Government to

conciliate between the parties to the industrial dispute.

• The Conciliation Officer is given the powers of a civil court, whereby he

is authorised to call the witness the parties on oath.

<SELO: 1> <Reference No.: R2>

Role of Conciliation Officer

• He shall, hold conciliation proceedings in the prescribed manner.

• He shall investigate the dispute and all matters affecting it and may do all
such things as he thinks fit for the purpose of inducing the parties to come
to a fair settlement of the dispute.

• If a settlement of the dispute or of any of the matters in dispute is arrived

at in the course of the conciliation proceedings the conciliation officer
shall send a report thereof to the appropriate government together with a
memorandum of the settlement signed by the parties to the dispute.

<SELO: 1> <Reference No.: R2>

Role of Conciliation Officer

• If no such settlement is arrived at , the conciliation officer shall, as soon

as practicable after the close of the investigation, send to the appropriate
Government a full report setting forth the steps taken by him for
ascertaining the facts and circumstances relating to the dispute and for
bringing about a settlement thereof, together with a full statement of such
facts and circumstances, and the reasons on account of which, in his
opinion, a settlement could not be arrived at.

• If, on a consideration of the report referred to in sub-section (4), the

appropriate government is satisfied that there is a case for reference to a
Board, , it may make such reference. Where the appropriate government
does not make such a reference it shall record and communicate to the
parties concerned its reasons therefore.

<SELO: 1> <Reference No.: R2>

Role of Conciliation Officer

• A report under this section shall be submitted within fourteen days of the
commencement of the conciliation proceedings or within such shorter
period as may be fixed by the appropriate government.

<SELO: 1> <Reference No.: R2>

Board of Conciliation

• In case Conciliation Officer fails to resolve the differences between the

parties, the government has the discretion to appoint a Board of
Conciliation.

• It consists of a chairman and two or four other members.

• The Board must submit its report to the government within two months of
the date on which the dispute was referred to it. This period can be further
extended by the government by two months.

<SELO: 1> <Reference No.: R2>

Arbitration

• Arbitration is a process in which the conflicting parties agree to refer their

dispute to a neutral third party known as ‘Arbitrator’.

• Arbitration is a procedure in which a dispute is submitted, by agreement

of the parties, to one or more arbitrators who make a binding decision on
the dispute.

• In choosing arbitration, the parties opt for a private dispute resolution

procedure instead of going to court.

<SELO: 1> <Reference No.: R2>

Arbitration
• Law encourages parties as far as possible, to settle their differences
privately either by mutual concessions or by the mediation of a third
person. When the parties agree to have their disputes decided with the
mediation of a third person, but with all the formality of judicial
adjudication, that maybe, speaking broadly, called arbitration. Arbitration,
therefore, means the submission by two or more parties of their dispute to
the judgment of a third person called the “arbitrator”, and who is to
decide the controversy in a judicial manner”.

• The Supreme Court has passed the following observation on why

arbitration should be preferred. “Arbitration is considered to be an
important alternative dispute redressal process which is to be encouraged
because of high pendency of cases in the courts and cost of litigation.
Arbitration has to be looked up to with all earnestness so that the litigant
has faith in the speedy process of resolving their disputes”.

<SELO: 1> <Reference No.: R2>

Arbitration

• Arbitration is a private process where disputing parties agree that one or

several individuals can make a decision about the dispute after receiving
evidence and hearing arguments.

• An arbitration award is legally binding on both sides and enforceable in

the courts.

<SELO: 1> <Reference No.: R2>

Types of Arbitration

• 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.

<SELO: 1> <Reference No.: R2>

Types of Arbitration

• 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.

<SELO: 1> <Reference No.: R2>

Difference Between Arbitration and Conciliation

• The primary difference between arbitration and conciliation is that

arbitration is the process by which parties select an independent person,
who renders a decision regarding the case.

• Conversely, conciliation attempts to make parties come to an agreement,

about the problem at hand.

<SELO: 1> <Reference No.: R2>

Difference Between Arbitration and Conciliation
The difference between arbitration and conciliation can be drawn clearly on
the following grounds:

• Arbitration refers to a method of resolving industrial disputes, wherein

the management and the labour present their respective positions to the
neutral third party, who takes a decision and imposes it. Conciliation is a
method of resolving the dispute, wherein an independent person, who
meet the parties jointly and severally and helps them to arrive at
negotiated settlement or resolve their differences.

• The decision made by the arbitrator is acceptable to the parties concerned.

On the other hand, the conciliator does not have the right to enforce his
decision.

<SELO: 1> <Reference No.: R2>

Difference Between Arbitration and Conciliation
• Arbitration requires a prior agreement between parties known as
arbitration agreement, which must be in writing. As against this, the
process of conciliation doesn’t require any prior agreement.

• Arbitration is available for the current and future disputes whereas the
conciliation can be adopted for existing disputes only.

• Arbitration is like a courtroom proceeding, wherein witnesses, evidence,

cross-examination, transcripts and legal counsel are used. On the contrary,
Conciliation is an informal way of resolving disputes between the
management and labour.

<SELO: 1> <Reference No.: R2>

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 herself refers the dispute to adjudication without

consulting the concerned parties, it is known as ‘compulsory adjudication.

<SELO: 1> <Reference No.: R2>

Three-tier machinery for the Adjudication of Industrial
Disputes:

• Labour Court

• Industrial Tribunal

• National Tribunal

<SELO: 1> <Reference No.: R2>

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.

<SELO: 1> <Reference No.: R2>

Issues that come under Labour Court
• The property or legality of an employer to pass an order under the
standing orders.

• The application and interpretation of standing orders.

• Discharge or dismissal of workers including reinstatement or grant of

relief to workmen wrongfully dismissed.

• Withdrawal of any statutory concession or privilege.

• Illegality or otherwise of a strike or lockout.

• All matters other than those reserved for industrial tribunals.

<SELO: 1> <Reference No.: R2>
Labour Court

Duties
• To adjudicate upon industrial disputes relating to matters specified in
second schedule.

• To give award within the specified period.

Powers
• Power to enter premises.

• Powers of civil court.

<SELO: 1> <Reference No.: R2>

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.

<SELO: 1> <Reference No.: R2>

Issues under Industrial Tribunal

• Wages, including the period and mode of payment.

• Compensatory and other allowances.
• Hours of work and rest periods.
• Leave with wages and holidays.
• Bonus, profit sharing, provident fund, and gratuity.
• Classification by grades.
• Rules of discipline.
• Rationalisation.
• Retrenchment of employees and closure of an establishment or
undertaking.
• Any other matter that can be prescribed.

<SELO: 1> <Reference No.: R2>

Industrial Tribunal
POWERS:
• Power to enter premises.

• Powers of civil court.

• Power to appoint assessors.

• Power to award costs.

DUTIES:
• Where an industrial dispute has been referred to a tribunal for
adjudication, it shall hold its proceedings expeditiously and shall, within
the period specified in the order preferring.
<SELO: 1> <Reference No.: R2>
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.

<SELO: 1> <Reference No.: R2>

National Tribunal
Appointments and constitution:

The central government may, by notification In the official gazette,

constitute one or more national industrial tribunals for the adjudication of
industrial disputes which, in the opinion of central govt., involve questions
of national importance or are of such a nature that industrial establishments
situated in more than one state are likely to be interested in, or affected by,
such disputes.[sec7-B)1].

<SELO: 1> <Reference No.: R2>

National Tribunal
Duties

• Where an industrial dispute has been referred to national tribunal for

adjudication,

• It shall hold its proceedings expeditiously.

• Within the period specified in the order referring such industrial disputes,
submit its award to the appropriate govt. [sec 15]

<SELO: 1> <Reference No.: R2>

National Tribunal

Powers
• Power to enter premises

• Powers of civil court

• Power to appoint assessors

• Power to award costs

<SELO: 1> <Reference No.: R2>

Collective Bargaining
• Collective bargaining is a process of negotiation between employers and a
group of employees aimed at agreements to regulate working salaries,
working conditions, benefits, and other aspects of workers' compensation
and rights for workers. The interests of the employees are commonly
presented by representatives of a trade union to which the employees
belong.

• The collective agreements reached by these negotiations usually set out

wage scales, working hours, training, health and
safety, overtime, grievance mechanisms, and rights to participate in
workplace or company affairs.

<SELO: 1> <Reference No.: R2>

References

1. Employee Training and Development, 4th Edition by Noe, Raymond

A., Publisher: Irwin/McGraw Hill, ISBN 13: 9780073404905
2. Personal Growth and Training & Development by Chhabra T. N.,
Sun India Publications, New Delhi
3. Approaches to Training and Development, 3d Edition by Dugan
Laird, Elwood F. Holton, Sharon S. Naquin, Publisher: Basic Books,
ISBN: 0738206989.
4. The ASTD Training and Development Handbook, by Robert Craig,
Publisher: McGraw-Hill, ISBN: 007013359X, ISBN 13: 978-
0070133594.