DAMODARAM SANJIVAYYA NATIONAL LAW

UNIVERSITY

VISAKHAPATNAM, A.P., INDIA

LABOUR LAW

ARBITRATION UNDER INDUSTRIAL DISPUTE ACT, 1947

NAME OF THE FACULTY

R. BHARATH KUMAR

G. ARTHI

19LLB102 & Semester V

 ACKNOWLEDGEMENT

The project consumed huge amount of work, research and dedication. Still, implementation
would not have been possible without support of my lecturer. I take this opportunity to express
my profound gratitude and deep regards to my lecturer for his exemplary support, monitoring
and constant encouragement throughout the course of thesis.

1
 ABSTRACT

An abstract provides concrete view of the project. This project focuses on the aspect of legalistic
machinery for settlement of disputes under Industrial disputes act. The Industrial disputes act
encourages the two parties to voluntarily submit the dispute to arbitration by an impartial third
party. Arbitration is a method or process by which the parties mutually agree for settlement of
their dispute by referring it to an impartial judge or authority of their own choice.

The impact of arbitration in the area of industrial relations for resolving industrial disputes can
be witnessed through several precedents. Section 10-A of industrial disputes act, 1947 confers on
parties’ power to enter into arbitration agreement. Thus, the researcher intends in the project to
look into the factors which is affecting the system of arbitration in industrial disputes.

2
 TABLE OF CONTENTS

Introduction………………………………………………………………………...4

Arbitration Procedure under Industrial disputes

act………………………………...6

Interpretation done through case laws………………………………………………

8

Conclusion………………………………………………………………………...15

3
 INTRODUCTION

With the advance in industrial development, there is increase in industrial disputes. Industrial
Disputes are of two kinds: interest disputes and rights disputes. The former category of disputes
is related to the determination of the wage rate, salary levels and working conditions of
employment whereas the latter category deals with determination, interpretation or application of
the already existing standards. Such kinds of dispute are popularly known as grievance dispute.
In these disputes, it is claimed that the workers have not been dealt in accordance with the rules
or contracts, laws and regulations or collective agreements that govern individual employment.
Such grievances may be regarding retrenchment, dismissal, payment of wages, working time,
overtime, demotion, promotion, transfer, seniority, job classification, work rules and fulfillment
of obligation relating to safety and health laid down in agreement. Thus, in case of these
disputes’ employer and workmen at any time, before the dispute has been referred under section
10 to a Labor court or tribunal refer the dispute to arbitration as per Industrial disputes act.
Disputes over unfair labor practices can also be referred for voluntary arbitration.

The word arbitration means settlement of industrial disputes between two or more parties by
means of a decision of an impartial body when efforts in the process of conciliation and
mediation have failed. Arbitration is judicial in nature whereas conciliation is advisory in nature.
Arbitration is voluntary if the parties to the dispute have failed to settle their differences by
negotiation and conciliation, agree to submit them to arbitration as prescribed under Section 10
A of the Industrial Disputes Act, 1947. Compulsory arbitration or adjudication, the government
requires the parties to the dispute to submit their differences to an arbitration tribunal which after
considering the facts and arguments submitted to it, makes an award.1

In case of voluntary arbitration, it does not necessarily follow the procedure adopted by the
courts. The essentials of voluntary arbitration is that there should be voluntary submission of
dispute to an arbitrator and the enforcement of an award may not be necessary and binding
because there is no compulsion. Compulsory arbitration is used when the parties fail to arrive at
a settlement through the voluntary methods. Compulsory arbitration may be at times and under

1
Arjun P..Agarwal , Arbitration under Section 10A of the Industrial Disputes Act, 1947 and Articles 136, 226 and
227 of the Constitution of India, 5ILIJ., 138-144(1963).

4
certain circumstances, necessary and desirable. The objective of state intervention in the field of
industrial relations should be to do social justice and make the weaker party equally strong to
enable it to settle its differences through negotiations and collective bargaining. In compulsory
arbitration the parties are forced to arbitration by the state when the parties to the dispute have
failed to arrive at a settlement by voluntary method or when there is situation of national
emergency or when the country is passing through economic crisis or when the parties to the
dispute are not well balanced or when the unions are weak and ill-organized or when the
employers are very well-organized and more powerful or when industries of strategic importance
are involved or when there is a general public dissatisfaction with the existing industrial
relations.

5
PROCEDURE OF ARBITRATION UNDER INDUSTRIAL DISPUTES ACT

In 1956, a new provision, Section 10A, was added to Industrial Disputes Act of 1947 providing
an option to parties to refer their industrial dispute to an arbitrator of their choice

Section 10 reads as follows: Voluntary reference of dispute to arbitration:

(1) Where any industrial dispute exists or is apprehended and the employer and the workmen
agree to refer the dispute to arbitration, they may, at any time before the dispute has been
referred under Section 10 to a Labour Court or Tribunal or National Tribunal, by a written
agreement, refer the dispute to arbitration and the reference shall be to such person or persons
(including the presiding officer of a Labour court or tribunal or national tribunal) as an arbitrator
or arbitrators as may be specified in the arbitration agreement.

(2) An arbitration agreement referred to in sub-section (1) shall be in such form and shall be
signed by the parties thereto in such a manner as may be prescribed.

(3) A copy of the arbitration agreement shall be forwarded to the appropriate Government and
the conciliation officer and the appropriate Government shall, within fourteen days from the date
of the receipt of such copy, publish the same in the official Gazette.

(4) The arbitrator or arbitrators shall investigate the dispute and submit to the appropriate
Government the arbitration award signed by the arbitrator or all the arbitrators, as the case may
be.

(5) Nothing in the Arbitration Act, 1940, shall apply to arbitrations under this section.

As per the section, at any time employer and workmen can refer a dispute to arbitration. But if
the parties desire to have recourse to Arbitration, they should act prior to the exercise of the
referral power by the Appropriate Government.

The disputants may opt for the services of the Presiding Officer of one of the adjudicatory bodies
under the Act to act as an Arbitrator. If the parties fail to agree over the choice of the arbitrator/s,
they may authorize the National Arbitration Promotion Board to nominate one or more

6
arbitrators. As per the recommendations of the National Commission on Labor, this task should
be entrusted to the Industrial Relations Commission to be established through a suitable
enactment. If the parties have chosen an even number of arbitrators, the Act mandates that they
shall provide for the appointment of an umpire, whose decision, when arbitrators are equally
divided in their opinion, shall prevail.2

The Arbitration Agreement should, specifically, contain the name of arbitrator and be signed in
the prescribed manner by the parties to the industrial dispute. Rule 8A of the Industrial Disputes
(Central) Rules, 1957 provides that the Arbitration Agreement should be signed by the employer
and any officer of a trade union and five authorized representatives of the workmen.

The act mandates that a copy of the Arbitration Agreement be forwarded to the Conciliation
Officer and to the Appropriate Government. The Appropriate Government is required to publish
the same within one month from the date of its receipt in the Official Gazette.

In Landra Engineering and Foundry Works v. Punjab State,3 the Punjab and Haryana High
Court, relying on Remington Rand of India v. The Workmen, ruled that although the Arbitration
Agreement has been published two weeks beyond the time prescribed in the Act, i.e., after the
expiry of thirty days, such delay would not matter because “the provisions as to publication
within one month are directory and not mandatory.

In K.P.Singh v. Gokhale, 4the Madhya Pradesh High Court has held that “arbitration agreement
between employer and employees regarding industrial dispute could not be a private arbitration
agreement but would necessarily be one under section 10A (1), especially when form ‘C’ was
used Further, according to the Court, “an award passed there-under would be invalid if the
mandatory procedure prescribed by sub-section (3) and (4) of section 10A of the Act is not
followed”.

2
S.10A (1-A) of Industrial disputes act.
3
(1969) Lab. I.C. 52 (P & H).
4
(1976) Lab. I.C.1375

7
Similarly, in Ved Prakash v. Ram Narain5, the Madhya Pradesh High Court has held that
section 10A can have no application to an Arbitration Agreement which does not comply with
the statutory requirements laid down in sub-sections (2) and (3).

5
. 1970 1 L.L.J. 125 (M.P.)

8
 INTERPRETATIONS DONE THROUGH CASE LAWS

 Kingfisher Airlines Limited vs. Capt. Prithvi Malhotra Instructor (Employee Code No)
& Others6

Facts: The petitioner in all the petitions is a public limited company and a air transport industry.
The respondent in each petition is employed by the petitioner as a Pilot. All the Respondents
have filed applications under Section 33 (C)(2) of the I.D. Act read with Rule 62 (2) of the
Industrial disputes (Central) Rules, 1957 in CGIT-cum-Labour Court for recovery of their
earned wages. They also seek interest on the earned wages at the rate of 18% p.a. from the date
the wages become due and payable under the Payment of Wages Act read with Rules framed
there under. After entering its appearance in the proceedings, the petitioner filed identical
applications under Section8 Arbitration and Conciliation Act, 1996 for referring the parties to
arbitration in view of Clause-17 in the respective letters of appointment of the Respondents. The
CGIT-cum-Labour Court by its reasoned order dismissed the applications of the petitioner,
which dismissal has led to the present petitions.

Issue: Whether an industrial dispute or a dispute relating to enforcement of a right or an

obligation created under the Industrial Disputes Act, is arbitral, i.e. capable of being adjudicated
by a private forum of an arbitrator.

Reasoning: The Bombay High Court affirmed the order of the labor court and held that labor
disputes were not arbitral under the Arbitration and Conciliation Act, 1996. The Court holds that
the inquiry is not solely whether the claim being urged is in personem or in rem (as was held by
the Supreme Court in Booz Allen & Hamilton vs. SBI Home Finance 7), but whether the
resolution of the claim has been exclusively reserved for adjudication by a particular court or
tribunal for public policy reasons. The Court holds that the resolution of labor and industrial
disputes has been reserved for resolution before the judicial for a constituted under the Industrial
Disputes Act, 1947. By drawing upon the preamble of the Act as well as the scheme of

6
LNIND 2012 BOM 784
7
AIR 2011 SC 2507

9
resolution of labor disputes, the Court holds that strong public policy reasons support such a
conclusion.

Conclusion: The Industrial Disputes Act provides for a unique process for arbitration of
collective labor claims. It therefore concludes that if there were to be adjudication of labor and
industrial claims outside of the courts and tribunals constituted under the Act, the reference to
and resolution by arbitration would have to be governed by the specific provisions of the
Industrial Disputes Act, 1947 (and the attendant rules made there under) and not the Arbitration
and Conciliation Act, 1996. The Court therefore concludes two crucial issues: claims under the
Industrial Disputes Act, 1947 are not arbitral under Arbitration and Conciliation Act, 1996 and
by extension, where it is arbitral; it must be in conformity with the requirements and procedure
under the Industrial Disputes Act. It is therefore important to remember that labor and industrial
claims are not per se non-arbitrable, but are instead only arbitrable in the manner and to the
extent permitted by the Industrial Disputes Act, 1947.

 Rajesh khorat vs. Management, Innoviti embedded solutions pvt ltd. 8

Facts: The petitioner joined the services of respondent on 26-12-2012. He has good reputation
for his hard work. It is claimed by petitioner that the respondent manager and management
harassed him to force him to voluntarily quit the job. On 14.03.2014 he received a mail from the
management stating that he needs to be put on a performance improvement plan which the
petitioner construed as a precursor to his removal and by the said mail he was also put on notice
that if he was not able to meet the PIB target he was required to leave the organization. It is
submitted that the petitioner was frustrated and tendered his formal resignation on 18.04.2014 in
compliance with the terms and conditions of his appointment.

Despite the tendering of the resignation letter, the respondent Management continued the
harassment and that they neither relieved him nor gave a letter of acceptance. That instead the
respondent proceeded to alter his service condition by re-designating him as an Operations
Manager which was protested to by the petitioner stating that they could not have altered the job
profile without his consent. That on 22.04.2014 the petitioner received a communication from
the respondent asking him to return the company assets including laptop, mobile, Access Card,
8
WP 34537/2015

10
I.D. Card and companies confidential information and that he was accused of gross
indiscipline and acting against the companies interest and it was also alleged that he had stolen
companies confidential information and hence, the respondent management was compelled to
initiate disciplinary action. Thereafter, the management, without considering the replies and
explanations offered by the petitioner, proceeded to issue a termination letter and also got filed a
complaint with the local police authorities and that one employee of a company orally agreed to
issue the formal relieving order withdrawal of the police complaint and payment till 10th of
January 2014 and also a letter recalling the termination order dated 23.04.2014 and on the said
promise the petitioner handed over the company’s assets in his possession.

Thereafter, the petitioner approached the Labour Court under the provisions of Section 10 (4-A)
read with Section 2A (2) of the Industrial Disputes Act and the same is registered as I.D.
No.87/2014. That on the first date of hearing, the management indicated settlement of the dispute
and on the next date of hearing also the management adopted the same stand. The said offer was
also made during the conciliation proceedings. But, as the offer constituted only 50% of the sum
that he had legally earned the petitioner declined the same and it is thereafter the management
filed its counter statement on the 3rd hearing i.e. on 22.12.2014. Thereafter, the application I.A.
No.1 came to be filed invoking the provisions of Section 8 of the Arbitration and Conciliation
Act, 1996

Issues: Whether the provisions of Section 8 of Arbitration and conciliation act apply to the
proceedings pending before the labour court?

Whether the provision of Section 10(5) of the Industrial disputes act ousts the jurisdiction of the
Arbitration act in respect of proceedings pending before the labour court?

Reasoning: The Arbitral Tribunals are private for a chosen voluntarily by the parties to the
dispute, to adjudicate their disputes in place of courts and tribunals which are public for a
constituted under the laws of the country. Every civil or commercial dispute, contractual or non-
contractual, which can be decided by a court, is in principle capable of being adjudicated and
resolved by arbitration unless the jurisdiction of the Arbitral Tribunals is excluded either
expressly or by necessary implication. Adjudication of certain categories of proceedings is
reserved by the legislature exclusively for public for a as a matter of public policy. Certain other

11
categories of cases, though not expressly reserved for adjudication by public for a (courts and
tribunals), may be necessary implication stand excluded from the purview of private for a
Consequently, where the cause/dispute is inarbitrable, the court where a suit is pending will
refuse to refer the parties to arbitration, under Section 8 of the Act, even if the parties might have
agreed upon arbitration as the forum for settlement of such disputes.

 A workmen cannot be driven to seek redress elsewhere because of the existence or availability
of another remedy and raising an Industrial Dispute is a well recognized and legitimate mode of
redress and is one which has achieved statutory recognition under the Industrial Disputes Act,
secondly, no discretion is vested in the Industrial Tribunal to avoid resolution of the dispute once
the reference is validly made.

Conclusion: Thus the industrial tribunal has no scope to entertain a prayer entertain a prayer
under Section 8  of the Arbitration and Conciliation Act  as it is mandated by the Hon'ble Apex
Court that the Tribunal must pass an award either way resolving the dispute.

RAP MFRS’ Employees’ Welfare Union, Hosur vs. Deputy Commissioner of Labour, Salem
and Others9 

Facts: In this writ petition, petitioner-employees’ union, impugned an award of an arbitrator

passed in voluntary reference to arbitration under Section 10-A of the I.D. Act, 1947, on the
ground that the award was not published in the official gazette, as required by Section 10-A(3)
of the I.D. Act . Due to non-publication of the award, it became not enforceable. Thus, the award
should be set aside. Before the learned Judge, it is not disputed by the respondent Management
that there was no publication of the Arbitration Agreement, as required under Section 10-A(3) of
the I.D. Act. However, it is the claim of the Management that though the award may be invalid
under the I.D. Act, the award will be enforceable as an award under Private Arbitration.

Issue: Whether an award under Section 10-A of the Industrial Disputes Act which is rendered
invalid due to non-compliance of the requirement under Section 10-A(3) of the Act, could be
enforced by one of the parties as an award on private arbitration under the provisions of the
Arbitration Act, 1996?

9
(2006) 3 LLJ 437

12
Reasoning: The Arbitration Agreement as entered into between the parties is traceable only
under Section 10-A of the Act, the agreement is a statutory agreement and the award passed
thereon be a statutory award enforceable only in terms of the provisions of the I.D. Act. It is also
found that sub- section (4) of Section 10-A of the I.D. Act is inter-linked with subsection (3)
and only on satisfaction of the mandates of sub- section (3) of Section 10-A, there could be an
investigation into the dispute and making the award by the arbitrator and then forwarding it to
the appropriate Government as per sub- section (4).

When an arbitrator was appointed and parties are permitted to solve the dispute under the
statutory provisions, unless it is fully complied with all the provisions, including the publication
in the Official Gazette, as mandated by sub- section (3) of Section 10-A of I.D. Act, the ultimate
award becomes unenforceable. In such circumstances, it is not enforceable and the same cannot
be treated as an award even under private arbitration.

Conclusion: Thus, it was held that an award under Section 10-A of the I.D. Act, which is

rendered invalid due to non-compliance of the requirement under section 10 Section 10-A (3) of

Id act cannot be enforced by the parties as the award under private arbitration.

 General Manager, Western Coalfields Ltd. & Another vs. Sumit Mullick & Others10 
Facts: On 8.5.2001 the petitioners had communicated to respondent no.1 - Divisional
Commissioner, Amravati Division, Amravati the fact that they have already submitted statement
of claim. Respondent no.1 has been mentioned as an Arbitrator in earlier communication dated
28.3.2001. The said communication is on the subject of arbitration in case of so-called sons in-
law.

Thus, at present dismissal of those respondents by the petitioners on the ground that employment
provided to them as sons-in-law was not proper formed the subject of arbitration proceeding. The
parties do not dispute that an industrial dispute was thus referred to arbitration to respondent
no.1. Respondent no.1 has delivered his award in the said matter on 16.7.2001. After mentioning

10
LNIND 2012 NGP 219.

13
that these workers were represented by four different Trade Unions, the Divisional
Commissioner has noted rival contentions and found that employment was provided with
knowledge that recruits were not sons-in-law. It was only after newspaper reports and vigilance
objection, the Management of petitioners panicked and terminated their services. Respondent
no.1 also concluded that these employees had filed false declaration, claiming to be sons-in-law,
however, in the peculiar facts, the said Arbitrator directed the petitioners to reinstate them with
full back wages. This Court has issued Rule in the matter on 6.4.2001 and no interim relief has
been granted, with the result the respective respondents-workmen, total seven in number claim to
be continuing in the employment petitioners has invited attention to the Scheme contained in
Section 10A of the Industrial Disputes Act, 1947 to show that the agreement to refer the
industrial dispute to Arbitrator is required to be forwarded to an appropriate Government as also
to the Conciliation Officer and the appropriate Government thereafter is expected to publish the
same in official gazette within one month. Sub Section 3A of , Section 10A of the Industrial
Disputes Act expects the Government to undertake scrutiny of that agreement and to issue a
notification so as to enable the other employers and other workmen who are not the parties to the
arbitration agreement but are concerned in the dispute to participate in arbitration proceeding. As
these steps are not taken, the award must fall to ground.

Issues: Whether the petition filed challenging the award because of non–compliance of
requirements under section 10 (3) is not maintainable as alternate remedy exists.

“Whether an award under Section 10-A of the Industrial Disputes Act which is rendered invalid
due to non-compliance of the requirement under Section 10-A(3) of the Act, could be enforced
by one of the parties as an award on private arbitration under the provisions of the Arbitration
Act, 1996?”

Reasoning: Citing the case of State of Uttar Pradesh and another vs. Uttar Pradesh,
Rajyakhanij Vikas Nigam vs. Sangharsh Samiti and others, Court has observed that it has
never laid down a proposition that once petition is admitted, it cannot be dismissed on the ground
of an alternate remedy. The observation of the Hon’ble Apex Court, therefore, shows that
availability of alternate remedy is one of the relevant considerations and writ petition cannot be
said to be not maintainable merely because the alternate remedies are available.

14
The catena of judgments conclusively establishes that the agreement between the parties to refer
the dispute to arbitration under Section 10A of the Industrial Disputes Act needed to be sent to
Conciliation Officer as also to appropriate Government and appropriate Government ought to
have published the same within one month of its receipt in Official Gazette. The appropriate
Government was also duty bound to apply its mind to ingredients of Sub Section 3A of, Section
10A of the Industrial Disputes Act to find out whether opportunity needed to be given to other
employers or other workmen, not party to arbitration agreement, so as to enable them to appear
before the Arbitrator and present their case. This procedure appears to be mandatory for finally
resolving the industrial dispute once for all and to restore and preserve industrial peace and
harmony in the industry. Any deviation from this procedure may result in private and at the most
a temporary resolution of problem, which may again erupt in due course after others, who are
interested or concerned, get knowledge of its clandestine settlement.

Conclusion: The arbitration agreement as entered into between the parties is traceable only
under Section 10A of the I.D. Act and the agreement being statutory agreement, passed in
pursuance of the provisions of the Act whether it is enforceable or not is to be decided only under
the provisions of the, I.D. Act. We reiterate that if the award fails to satisfy the requirements
under the, I.D. Act, then the same becomes invalid and unenforceable. To put it clear that non-
publication of the arbitration agreement in terms of, Section 10A (3) of the I.D. Act vitiates the
award and it cannot be enforced by one of the parties, as an award in private arbitration under the
provisions of Arbitration Act, 1996.

1. Engineering Mazdoor Sabha vs. Hind Cycles Ltd.11

Facts: The dispute between the respondent company and its workmen was voluntarily referred
to arbitration by their agreement dated December 3, 1959, under s. 10A of the Industrial
Disputes Act, 1947. Section 10A (2) prescribed the form of agreement which required that the
parties should state that they had agreed to refer the subsisting industrial dispute to the arbitration
of the persons to be named in the form. Section 18(2) provided that the arbitration award shall be
binding on the parties to the agreement. The arbitrator named by the parties entered upon the
reference on December 14, 1959, and pronounced his award on April 8, 1960. The appellants
seeking to challenge the validity of the award applied for and obtained special leave to appeal to
11
1963 AIR 874

15
the Supreme Court against the decision of the arbitrator. The respondent pleaded that the appeal
was not competent because the arbitrator was not a tribunal under Article 136 of constitution.

Issues: Whether special leave petition is maintainable on the arbitral award?

Whether the award given by arbitrator is quasi-judicial or not?

Reasoning: For invoking Art.136 (1) two conditions must be satisfied. First, the proposed appeal
must be from a judgment, decree, determination, sentence or order (it must not be against purely
executive or administrative order) i.e., the determination or order should be a judicial or quasi-
judicial determination or order. Secondly, the said determination or order must have been made
or passed by any court or tribunal in the territory of India.

Regarding first, it is beyond controversy that an award of an arbitrator under section 10A is a
quasi-judicial act. The Supreme Court in the instant case has also conceded "that the decisions of
the arbitrators to whom industrial disputes are voluntarily referred under S. 10A of the Act are
quasi- judicial decisions and they amount to determinations or orders under Article 136(1)".

The arbitrator under s.10A is not exactly in the same position as a private arbitrator does not
mean that he is a tribunal under Art. 136. Even if some of the trappings of a Court are present in
his case, he lacks the basic, the essential and the fundamental requisite in that behalf because he
is not invested with the State's inherent judicial power. He is appointed by the parties and the
power to decide the dispute between the parties who appoint him is derived by him from the
agreement of the, parties and from no other source.

The fact that his appointment once made by-the parties is recognized by s.10A and after his
appointment he is clothed with certain powers and has thus, no doubt, some of the trappings of a
court, does not mean that the power of adjudication which he is exercising is derived from the
State.

Conclusion: Consequently, an appeal against the decision of an arbitrator under s. 10A of

the Act does not lie under Art. 136 of the Constitution.

 North Orissa Workers' Union vs. State of Orissa and Ors12.

12
(1971) IILLJ 199 Ori

16
Facts: The petitioner is a Trade Union registered under the Trade Union Act having its head
office at Rourkela N. Roy, a member of this Union, was working as Crane Operator of the
Hindustan Steel Limited. On 1-11-1963, Roy was dismissed from service of the Hindustan Steel
Limited. The petitioner then raised a dispute before the District Labour Officer, Rourkela and he
took up conciliation proceedings. On 26th January, 1964, the District Labour Officer submitted a
factual report on the failure of the conciliation proceedings, but indicated in the report that both
parties had agreed to refer the issue for arbitration.
Government received this report on 29-6-1964. On 28-5-1965, a memo of settlement arrived at
agreeing to refer the dispute to the arbitration of Shri R.C. Misra, retired District Judge, was
executed and was sent to the District Labour Officer (Annexure-IV). The State Government did
not however publish the agreement in the Gazette as required by Sub-section (3) of Section 10A
of the Industrial Disputes Act (hereinafter referred to as the Act), and in May, 1966, in exercise
of their power under Sub-section (5) of Section 12 read with Clause (d) of Sub-section (1)
of Section 10 of the Act referred the dispute to the Industrial Tribunal for adjudication.
Meanwhile, the parties, as stated earlier, had referred the dispute to the arbitration of Shri R.C.
Misra, but the latter expressed his inability to proceed with the matter further in the absence of
publication of the arbitration agreement in the Official Gazette, as required in Sub-section (3)
of Section 10A of the Act.
The parties approached Government for withdrawing the reference to the Industrial Tribunal, but
Government pleaded their inability to do so. It is in these circumstances that the present
application has been filed under Article 226 of the Constitution for an order quashing the
reference of the dispute by the Government to the Industrial Tribunal in May, 1966, and for the
issue of a writ of mandamus directing the State Government to publish the arbitration agreement
in the Official Gazette.

Issue: Whether arbitration agreement needs to be published in the official gazette.

Reasoning: Section 10A of the Act refers to voluntary reference of disputes to arbitration. This
section authorizes the parties where any industrial dispute exists to refer any dispute to
arbitration of any person or persons, or, if they, so agree, to the Presiding Officer of a Labour
Court or Tribunal or National Tribunal. The agreement is required to be in writing and signed by

17
the parties and Rule 7 of the Orissa Industrial Disputes Rules, 1959 provides that an arbitration
agreement for the reference of an industrial dispute to an arbitrator or arbitrators shall be made in
Form. C and shall be delivered personally or forwarded by registered post in triplicate to the
Secretary to the Government of Orissa in the Labour Department, Labour Commissioner, Orissa,
and the local Conciliation Officer concerned.

The agreement is also to be accompanied by the consent in writing from the arbitrator or
arbitrators. It is contended on behalf of the State that the arbitration agreement between the
parties for reference of the dispute to the arbitration of Shri R.C. Misra had not been made in the
prescribed Form 'C' appended to the Rules and that, the agreement, is not in proper and
prescribed form. Although we find that Annexure-III is not in the prescribed form, we are
satisfied on perusing Annexure-III and also Form No. C. appended to the Rules that Annexure-
III substantially complies with the requirements of the arbitration agreement. On 26-6-1965, the
Deputy General Manager, opposite party No. 3, wrote a letter to the District Labour Officer,
Rourkela intimating to him that Shri R.C. Misra had given his consent in writing to arbitrate in
the dispute and a copy of the letter received from Shri R.C. Misra was also enclosed thereto.
Although technically this consent in writing of the arbitrator was not enclosed to the agreement
as required under Rule 7 of the Orissa Industrial Disputes Rules, 1959, we are satisfied that that
particular requirement of Rule 7 has also been substantially complied with.

No documents have been filed before us to prove that a copy of the agreement had also been sent
to Government. But from Annexure-VI dated 3rd May, 1966 addressed by the Labour
Commissioner to the petitioner and opposite party No. 3, it is clear that the Government were
fully aware that such arbitration agreement had been arrived at. The position, therefore, is that by
5th May, 1966, when Government referred the dispute to the Industrial Tribunal (Annexure-VII),
there was already a voluntary reference of the dispute by concerned parties to the arbitration of
Shri R.C. Misra. In the circumstances, Government had no jurisdiction to make the reference to
the Industrial Tribunal and it is therefore liable to be quashed.

Conclusion: Allowed this petition, quash the order of the State Government referring the
dispute to the Industrial Tribunal under Sub-section (5) of Section 12 read with Clause (d) of
Sub-section (1) of Section 10 of the Act and direct that a writ of mandamus be issued to the State

18
Government to publish the arbitration agreement in the Official Gazette within a month from the
date of this order.

 Rasbehary Mohanty vs. Presiding Officer Labour Court13

Facts: The petitioner was a conductor working in the State Transport Service of Orissa. He was
discharged from service. The union representing the workman and the management entered into
agreement agreeing to refer the said dispute voluntarily to the arbitration of Shri L. Misra who
was then Deputy Labour Commissioner (Rourkela). The agreement was under the Code of
Discipline and in Form K prescribed by the Orissa Rules. By the time the parties were heard and
award was passed by the Arbitrator, he took up new assignment at Bhubaneswar. The Arbitrator
by his award having granted the relief of reinstatement with back wages to the petitioner, the
petitioner preferred a claim petition under S. 33C (2) of the Industrial Disputes Act before the
Labour Court. The Labour Court held that the petition filed under S. 33C (2) was not
maintainable, that the non-publication of the arbitrator's award as required under S. 17 of the
Industrial Disputes Act would not render the award ineffective and that the reference to
arbitration had been made to the Deputy Labour Commissioner (Rourkela) and not to Mr. L.
Mishra personally, be having ceased to hold the office of Deputy Labour Commissioner
(Rourkela) when the award was passed. In the instant writ petition filed by the workman against
the order of the Labour Court, it was contended on behalf of the management that the Labour
Court erred in holding that the award did not require publication under S. 17 of the Act and that
the Labour Court was right in holding that the reference was made to L. Misra, to arbitrate the
dispute in his official capacity and not in his personal capacity.

Issues: Whether the award should be rendered ineffective on account of non-publication under
Section 17 of the Act?

Reasoning: The requirements of S. 10A (3) and 10A (4) were not complied with. Accepting the
contention of the management in this regard, it was held that there had been statutory infraction
in the matter of reference to the arbitrator and in the making of the award. Inasmuch as the award
was not published in terms of S. 17(1), of the Act, it did not become effective and enforceable

13
LNIND 1974 ORI 43

19
under S. 17A of the Act. Negative the contention of the management; it was held that the
reference by agreement between parties was to Mr. L. Misra as persona designate and not to the
Authority-Deputy Labour Commissioner (Rourkela). In fact the conduct of the parties also
showed that the reference was to the named arbitrator and not to the authority. Negativing the
contention of the petitioner that the arbitration agreement was a settlement outside the purview of
S. 10A and, therefore, S. 17 of the Act did not apply to the award ultimately passed, it was held
that the agreement was not a settlement as defined under S. 2(p) of the Act, as there was no
settlement of the dispute or any part thereof and the dispute continued to subsist even after the
settlement. It was merely an agreement to refer the dispute to arbitration. To a reference made to
the arbitrator by voluntary agreement between the parties, the provisions of S. 10A (1) applied.

Conclusion: It was held that for the award to become effective it must be published in terms of
S. 17(1) of the Act and it would have become effective on the expiry of 30 days from the date of
publication under S. 17 of the Act, had it been so published. The award having not been
published as required under the Industrial Disputes Act, the same never became effective and the
petitioner's claim under S. 33C(2) having been founded upon such award was, therefore, not
enforceable.

20
 CONCLUSION

Arbitration provision was inserted in the Act with a view to creating an atmosphere of harmony
and confidence among the employer and employees and to avoid the bitterness which is
generated in adjudication before other authorities. It was hoped that the voluntary arbitration,
would infuse sense of confidence and co-operation and its award would be respected and
observed unconditionally, unqualified and unemotionally in deed and in spirit.

The system of voluntary arbitration within the framework of the Act might have opened new
avenue for amicable settlement, if it would have been given free hand to develop it. But in view
of the Supreme Court judgment in Engineering Mazdoor Sabha and the much too uncertain
jurisdiction of the High Courts under Art. 226, there would hardly be any arbitration under
Section 10 A, because the parties would not like to leave their fate in the hand of an arbitrator
whose award may not be reviewed by the courts of law. In these circumstances the likelihood is
that parties would wait for the reference by the Government to the tribunal. This anomalous
position was pointed out to the Supreme Court and it realized the difficulty but it left it to be
corrected by the legislature.

Unfortunately, the method has failed to take deep roots in the arena of Labour-Management
Relations in India for reasons, such as, easy availability of the adjudicatory machinery when
negotiations fail, dearth of suitable arbitrators who could command the confidence of both the
parties, absence of recognized trade unions which could enforce discipline among its members
and could bear the cost of Arbitration and absence of a simplified procedure.

21