CHAPTER-1

INTRODUCTION

LABOUR ADJUDICATION is one of the means of settlement of disputes between an employer

and his employees. It involves determination of a question of fact or law arising out of a labour
dispute judicially by trial through a court or a tribunal having the attributes of a court. It is part of a
broader system of settlement of claims, redressal of grievances and resolution of conflicts. It is to be
distinguished from collective bargaining, conciliation, mediation or arbitration, and settlement of
claims and grievances by authorities and institutions specially constituted for the purpose. Malhotra
defines it to mean “a mandatory settlement of industrial disputes by Labour Courts, Industrial
Tribunals or National Tribunals under the (Industrial Disputes) Act or by any other corresponding
authorities under the analogous State statutes with specialized jurisdiction in the labour
management field.”

Under the existing system, the ultimate legal remedy for resolution of a labour dispute lies in its
reference to a court for adjudication. The mechanism and procedure for the reference and resolution
of the disputes are laid down in the Industrial Disputes Act, 1947 and the rules framed thereunder,
the central theme of which is said to be adjudication.”

The statute for adjudicating labour dispute, shall be evaluated periodically. In India, the substantial
period is over, after the introduction of the Industrial Dispute Act 1947, but has not undergone any
changes in its adjudication machinery. The very crux of industrial relation is a speedy Redressal of
probable industrial dispute. The effectiveness of adjudication process thus, shall be necessarily
reviewed and restructured. The labour law, which was in existence in the neighboring countries,
including the Great Britain has been reformulated before, through decades. But, the Labour
Law in India is flowing, as it is for the past 68 years. The ageing of the Industrial Dispute Act, with
substantial changes in the work pattern of adjudication machineries, will cause many hardships to
a healthy labour climate in the State.

Part III of the Constitution of India, provides a Fundamental Right for all citizens in India, to
carry on any profession, trade or business of their own. These rights inter alia provide, a right to
approach the courts for its evaluation. The adjudication process under industrial laws, provides
condition precedents for approaching the courts. The mandatory provision for reference, by
appropriate government was placed as an incident of legislative control, over the judicial process.
By the introduction of the Arbitration and Conciliation Act, recognized arbitration process came into
existence, even in labour fields. The effect of this law is badly affecting the work pattern of the
adjudication machinery.
The time to review, and scrutiny of the outputs of adjudication machineries in industrial fields in Kerala
is not yet done by the appropriate government, or any of the constitutional authorities. It is
necessary to have a look into the dependent and independent variables, which control the effectiveness
of the adjudication process. The word effectiveness used in the topic, is intended to measure out the
shortcomings of the present condition and to point out the results of the study. Reactive mechanisms,
to address industrial dispute includes negotiation, conciliation, arbitration and adjudication. When a
difference of opinion between management and employee, or trade union grows out of proportion to an
industrial dispute, one or more of the affected parties go to conciliation. When conciliation officer
fails to arrive at an amicable settlement, within 14 days of taking up the dispute, the appropriate
government may ‘refer’ the issue to adjudication mechanisms, upon its subjective satisfaction.
Adjudication authorities include labour courts, industrial tribunal and national tribunal. Prima facie, the
reason for the ineffectiveness of adjudication, seems to be the mandatory reference procedure by the
appropriate government, with a vested interest, time lags in obtaining an award and the inability of
the machinery to effectively implement the award. Among the prevailing machineries and mechanism,
available for the settlement of industrial dispute, code of discipline, grievance procedure, collective
bargaining and industrial relations committee will make all its endeavors, to prevent the conflict between
employers and employees, hence this mechanism can be called as preventive mechanism. These have a
vital part to play, to prevent the transformation of industrial dispute from individual differences. The
other mechanism like conciliation, arbitration and adjudication have a considerable role to play, only
when the industrial dispute apprehends or arrives in the industrial relm and thereby, termed as dispute
settlement machineries
 CHAPTER-2
LITERATURE REVIEW (Before Act of 1947)

Employers and Workmen Disputes Act, 1860

The Industrial Disputes Act has had a long history. Its genesis is traced back to the enactment of the
Employers and Workmen Disputes Act, 1860 (X of 1860). It provided for speedy and summary
disposal by magistrates of disputes concerning wages of workmen employed in railways, canals and
other public works. One of the provisions was that any person who voluntarily engaged himself to
work for a stipulated period or to execute any specific work and refused to perform would be liable
to a fine or simple imprisonment. In other words, it made breach of contract on the part of workers a
criminal offence. The Act was repealed in 1932 on the recommendations of the Royal Commission
on Labour?

Indian Trade Disputes Act, 1929

Prior to the first world war (1914-18) strike was a rare phenomenon in Indian industry and there
were very few industrial disputes. Strikes appeared in violent forms after the war in 1920. In 1921
two committees were appointed one in Bengal and the other in Bombay to investigate into the
matter and to suggest remedial measures. The Bengal Committee suggested the formation of joint
workers’ committees and opposed legislative measures and government intervention. The Bombay
Committee advocated the establishment of industrial courts. The general mill strike in 1924 led the
Government of Bombay to introduce a Bill but its passage was withheld at the instance of the
Government of India.
In the same year the Government of India prepared a Bill based on the recommendations of the
Bombay Industrial Disputes Committee modelled on the Canadian Industrial Disputes Investigation
Act of 1907 and the British Trade Disputes Act of 1927.

The first Indian Trade Disputes Act was passed in 1929 (VI of 1929). The object of the Act was to
provide a conciliation machinery to bring about peaceful settlement of industrial disputes. The Act
authorized the central and provincial governments to establish a board of conciliation or the court of
enquiry to investigate into and settle a dispute when it arose or was apprehended. The board would
consist of an independent chairman with several members. A court of inquiry would consist of one
or more persons. They had to report on the specific matters referred to them. The Act contained
provisions rendering punishable by fine or imprisonment instigating strikes and lockouts without 14
days’ notice in public utility concerns such as railways, postal telegraph or telephone services,
power, light or water supplying services or any system of conservancy or sanitation. It aimed at
prevention of periodical and general strikes on the lines of the British Act, 1927. The Act was
meant to be an experimental measure and it was to be in force for five years. It was made permanent
by the Trade Dispute (Extending) Act, 1934 (XII of 1934).

The defect of the Act was the lack of adequate provision for protecting those who served on the
courts of enquiry or boards of conciliation regarding the disclosure of confidential information
relating to trade unions or industrial undertakings. They were liable to prosecution by aggrieved
persons and to trial by any magistrate in respect of disclosures willful or accidental. The Royal
Commission on Labour recommended amendment of the Act to remedy the defect. Accordingly,
the Government enacted the Indian Trade Disputes Act, 1938. The Act provided that:
(a) persons desiring information to be kept confidential should make a request to that effect;
(b) the provisions of the Act would apply only to willful disclosures;
(c) in case of any prosecution, the trial should be only by a Presidency or a first-class magistrate;
and
(d) that the sanction of the authority appointing the court or the board would be a condition
precedent to the institution of a suit or a prosecution.

The Royal Commission on Labour (1930) had also recommended a complete revision of the Act.
The Commission was of the opinion that some statutory machinery was required to deal with trade
disputes and it was necessary to consider the form such machinery should take before the expiry of
the Trade Disputes Act in 1934. The Commission recommended, inter alia, that:

(a) the question of providing means for the impartial examination of disputes in public utility
services should be considered;
(b) The possibility of establishing permanent courts in place of ad hoc tribunals should be
examined; and
(c) every provincial government should have an officer or officers whose duty it would be to
undertake the work of conciliation and to bring the parties privately to agreement.’

The Government of India accepted the recommendations and introduced a Bill in the Legislative
Assembly in 1936 to give effect to them. The Bill was passed in 1938. It was called Trade Disputes
(Amendment) Act, 1938. The main provisions of the Act were as follows:

(a) The definition of the public utility service was enlarged to include power plants and water
transport services carrying passengers as well as tramway services.
(b) The government, both central and provincial, was granted power to appoint conciliation officers
charged with the duty of mediating in or promoting the settlement of trade disputes in any business,
industry or undertakings and invested with the necessary powers to carry out their duties as public
servants within the meaning of the Indian Penal Code (XLV of 1860).
(c) The Act was extended to include disputes between employers and employees, or between
workmen and workmen.
(d) Provision was made to the effect that discharged workers should be regarded as workmen for the
purposes of the Act.
(e) A court or board having the prescribed quorum were enabled to act notwithstanding the absence
of the chairman or any of its members or any vacancy in its number.

In addition, the provision for the control of illegal lockouts was made more precise and provisions
were also made for keeping any information communicated to conciliation officers as confidential if
any written request was made for it.

Rule 81-A of the Defence of India Rules

The central government had to adopt several emergency measures during the Second World War. In
January 1942, the government added Rule 81-A to the Defence of India Rules by a notification to
restrain strikes and lockouts. The new rule gave the government power:

(1) to prohibit, by general or special order, strikes or lockouts in connection with any trade dispute
unless reasonable notice was given;

(2) to refer any dispute to conciliation or adjudication;

(3) to require employers to observe such terms and conditions as might be specified; and

(4) to enforce the decisions of adjudication.?

The Indian Law Commission has described this rule as follows:

Rule 81-A of the Defence of India Rules, the precursor of the Industrial Disputes Act, 1947,
empowered the appropriate government to intervene in industrial disputes by compelling the parties
to go for compulsory adjudication by prohibiting strikes or lockouts during the pendency of
adjudication proceedings and for a period of two months thereafter. A blanket ban was imposed on
strikes which did not arise out of genuine
trade disputes. A process of conciliation, with arbitration in the background, is substituted for the
rude and barbarous process of strike and lockout. Reason is to displace force; the might of the State
is to enforce peace between industrial combatants as well as between other combatants; and all in
the interest of the public.

The Supreme Court has also justified the introduction of the concept of compulsory adjudication in
a similar language:

The concept of compulsory adjudication of industrial disputes was statutorily ushered in with a
view to providing a forum and compelling the parties to resort to the forum for arbitration so as to
avoid confrontation and dislocation in industry. A developing country like India can ill afford
dislocation in industrial production. Peace and harmony in industry and uninterrupted production
being the demand of the time, it was considered wise to arm the Government with power to compel
the parties to resort to arbitration and as a necessary corollary to avoid confrontation and trial of
strength which are considered wasteful from national and public point of view.'

In August 1942, the central government promulgated an order under this rule prohibiting strikes or
lockouts without 14 days’ previous notice. Strikes and lockouts were also prohibited during the
pendency of conciliation or adjudication proceedings.
 CHAPTER-3
LEGISLATIVE ANALYSIS
1. Industrial Disputes Act, 1947

Rule 81 A of the Defense of India Rules was due to lapse on 1st October 1946 and was kept in force
by the Emergency Powers (Continuance) Ordinance, 1946. A Bill was introduced by the
Government of India in the Central Legislative Assembly on the 28th
October embodying the essential principles of Rule 81-A and retaining the provisions of Trade
Disputes Act, 1929 with a view to make provisions for investigations and settlement of industrial
disputes. The Industrial Disputes Act was passed in March 1947 and came into force from Ist April
1947 repealing the Trade Disputes Act, 1929.
The Act introduced the principles of compulsory arbitration and prohibited strikes without notice in
respect of public utility services. Two new institutions were also introduced:

(a) Works committees consisting of representatives of employers and employees; and

(b) Industrial tribunals consisting of one or more members possessing qualifications ordinarily
required for the appointments as a high court judge. '

The working of the Industrial Disputes Act revealed the need for a central appellate authority to
review the decisions of large number Industrial tribunals set up by the central and state governments
and to coordinate their activities. With a view to constitute such an authority the Industrial Disputes
(Appellate Tribunal) Act was passed in May 1950.

1.1 Labour Appellate Tribunal

The object of the Act was to constitute an authority empowered to review the decisions of
adjudication appointed under the central and state Acts and to coordinate their activities. The Act
provided for the establishment of a Labour Appellate Tribunal and made certain incidental changes
in the existing laws relating to industrial disputes. The Act was extended to the whole of India
except Jammu and Kashmir. It authorized the central government to constitute a Labour Appellate
Tribunal for hearing appeals from awards or decisions of industrial tribunals, courts, wage boards,
and other statutory bodies set up under central or state enactments for the adjudication of industrial
disputes. The Appellate Tribunal was to consist of a chairman and such number of other members
as the government might, from time to time, think fit to appoint. The chairman of the Appellate
Tribunal was authorised to constitute as many benches of the tribunal as he might consider
necessary for the purpose of carrying out the functions and exercising the powers of the Appellate
Tribunal. Each bench was to consist of not less than two members one of whom was to be
appointed as the president.

The Appellate Tribunal was empowered to hear appeals from any award or decision of an
adjudicating authority, if -

(a) the appeal involved any substantial question of law;

(b)the award or decision related to:
(i) wages,
(ii) bonus or travelling allowance,
(iii) employers’ contribution to any pension or provident fund,
(iv) any sum paid or payable to, or on behalf of, the workman to defray special expenses entailed on
him by the nature of his employment,
(v) gratuity payable on discharge,
(vi) classification by grades,
(vii) retrenchment, and
(viii) any other matter prescribed by rules, made under the Act.
No appeal, however, could be preferred by any party from:
(i) any award made by the Industrial Tribunal appointed by the Government of India to decide
industrial disputes in banking companies, or

(ii) from any award or decision of an industrial tribunal made with the consent of the parties, or
(iii) from any settlement arrived at between the parties in the course of conciliation proceedings, or
(iv) from any decision of an arbitrator appointed under any law with the consent of the parties to
settle the dispute.

An appeal from the decision or award of an adjudication authority could be presented to the
Appellate Tribunal by any aggrieved party or by the appropriate government or the central
government, where it was not the appropriate government, irrespective of the fact whether the
government concerned was a party to the dispute or not.

Appeals had to be filed within thirty days from the date of publication of the award or decision or
decisions concerned or within thirty days from the date of making the award or decision where no
provision for the publication of the award had been made. The Appellate Tribunal, however, was
entitled to entertain an appeal even after the expiry of
thirty days if it was satisfied that the appellant had been prevented by sufficient cause from filing
the appeal. in time.

It was authorised to stay the implementation of any award or decision which was under appeal, if it
was satisfied that its implementation would produce serious results on the industry concerned or
other industries or on workmen employed in that industry.

The Appellate Tribunal was entitled to confirm, vary or reverse the award or decision appealed
from and to award relief to the appellant. It was also entitled to determine and award costs of, and
incidental to, any proceedings before it. The decisions of the Appellate Tribunal became
enforceable on the expiry of thirty days from the date of their pronouncement. The appropriate
government could, however, reject or modify any decision before the expiry of the period of thirty
days, if it felt that it would be inexpedient on public grounds to give effect to the whole or any part
of the decision. In all such cases it was obligatory on the part of the government concerned to place
the decision together
with the reason for rejecting or modifying, it before the appropriate legislature as soon as possible.

Under section 22 of the Act, it was not open to an employer, during the period of thirty days
allowed for filing the appeal or during the pendency of an appeal, to alter the conditions of service
to the prejudice of the workmen without obtaining the written permission of the Appellate Tribunal.
Workers aggrieved by the contravention of section 22 were entitled to make a complaint to the
Appellate Tribunal. The Act declared all strikes and lockouts to be illegal if commenced or declared
:

(a) during the period of thirty days allowed for filing of an appeal,
(b) during the pendency of an appeal before the Appellate Tribunal.

It prescribed penalties for financing, instigating, declaring or commencing illegal strikes and
lockouts.
Provisions of the Act relating to the representation of parties in the proceedings before the
Appellate Tribunal were almost similar to those in the Industrial Disputes Act, 1947 as amended in
1950.

The Act contained provisions which modified and affected the provisions of all laws in force in
India relating to prevention and settlement of industrial disputes. Notwithstanding anything
contained in any law an award or decision of any industrial tribunal, court, wage
board, or any authority set up in any state under any law relating to the adjudication of industrial
disputes, was by this Act rendered enforceable on the expiry of thirty days from the date of its
publication or where there was no provision for the publication, on the expiry of thirty days from
the date on which it was made. The Act empowered the appropriate government to reject or modify,
before the expiry of the said period of thirty days, those awards or decisions which were not
appealable and in which it was a party to the dispute, if it felt that it would be inexpedient on public
grounds to give effect to the whole or any part of such awards or decisions. In all such cases they
were required to place the award or decision concerned together with their reason for rejecting or
modifying it before the appropriate legislature.

The Act empowered the appropriate government to recover any money due from an employer or the
cash value of any benefit which was: capable of being computed in terms of money under an award
or decision of industrial tribunal, court, wage board, etc., appointed under the central or a state Act,
as arrears of land revenue or as a public
demand, if any application was made to them by the person entitled to the money.'

There were, however, several complaints regarding the working of the Labour Appellate Tribunal
on the ground mainly that there was enormous delay in disposal of cases. The Act was, therefore,
repealed in 1956.
2. Proposals for Modifications

2.1 Labour Relations Bill

The Industrial Disputes Act, 1947 was essentially an emergency measure enacted to deal with a war
like situation. Several attempts have been made since then to replace it by a more comprehensive
legislation to regulate industrial relations. The first such attempt was made in 1950 itself when Sri
Jagjivan Ram the then Labour Minister introduced the Labour Relations Bill in the Parliament to
provide for the regulation of the relationship between employers and employees, for the prevention,
investigation, and settlement of labour disputes and certain matters incidental thereto. The bill was a
comprehensive measure sought to replace several laws including the Industrial Employment
(Standing Orders) Act, 1946, the Industrial Disputes. Act, 1947, Industrial Disputes (Banking and
Insurance Companies) Act, 1949, Industrial Disputes (Appellate Tribunal) Act, 1949 etc.

The Bill was extensive in scope and character and would apply to all categories of employees
except civil services, persons employed in defence forces and domestic servants and to all
establishments working with more than ten employees. The most important provision of the Bill
was the provision for collective bargaining for. regulation of labour management relations. Other
features of the Bill were the provisions relating to retrenchment to be effected after prescribed
notice and payment of gratuity and go slow policy on the part of the employers or employees which
should be deemed to be an illegal lock out or strike and dealt with as such. The Bill was placed
before the tenth session of
the Indian Labour Conference in March 1950 and was subsequently referred to the select committee
which suggested a number of modifications. There were, however, several objections to the Bill as
it laid overwhelming emphasis on compulsory adjudication and the proposed procedure was
complicated. ‘It involved protracted legal proceedings and it was apprehended that it would lead’ to
delay in decision. The bill was, therefore, allowed to lapse on the dissolution of the Parliament.
2.2 Subsequent Developments

Subsequently Sri V.V. Giri proposed another equally comprehensive Bill but it did not receive
support from the different ministries of the central government or the state governments or the
employers or even labour.'

Thereupon, the question of enacting suitable legislation for revision of the existing laws was
discussed in the meetings of the Joint Consultative Board of Industry and Labour and also the
Planning Commission. As a result of which the central government introduced
the Industrial Disputes (Amendment and Miscellaneous Provisions) Bill 1955, It sought to make
certain important changes in the Industrial Disputes Act, 1947 and the Industrial Employment
(Standing Orders) Act, 1946 and also to repeal the Industrial Disputes (Appellate Tribunal) Act,
1950. The Act was passed in 1956. The Act abolished the Appellate Tribunal and set up a three-tier
adjudication machinery of labour courts, industrial tribunals, and national tribunals with jurisdiction
to decide disputes pertaining to specified matters. There was no provision for appeal from the
decisions of any of the tribunals.

Explaining these changes the statement of objects and reasons of the Bill stated:

There is a large volume of criticism that appeals filed before the Appellate Tribunal take a long time
for disposal and involve a great deal of expenditure which the workers cannot afford. It is proposed
to repeal the Industrial Disputes (Appellate Tribunal) Act, 1950 and at the same time, to substitute
the present system of tribunals by a three-tier system of original tribunals, manned by personnel of
appropriate qualifications. References to the national tribunals will be made by the Central
Government, and they will cover disputes which involve questions of national importance or which
are of such a nature that establishments situated in more than one State are likely to be interested in,
or affected by the disputes.

Provision is also made for voluntary reference of disputes to arbitration by the parties themselves by
written agreement and for the enforcement of agreements between the employers and workmen
reached otherwise than in the course of conciliation.
3. The Efficiency of System of Adjudication

The Act provides for the establishment of the following authorities for settlement of disputes
between the employer and his employees and to promote good relations among them:

(a) Works Committee

(b) Conciliation Officers
(c) Board of Conciliation
(d) Courts of Inquiry
(e) Labour Courts
(f) Tribunals and
(g) National Tribunals

Works Committee
In the case of any individual establishment in which one hundred or more workmen are employed
or have been employed on any day in the preceding twelve months the appropriate government may
by general or special order require the employer to constitute a works committee consisting of the
representatives of the employer and workmen engaged in the establishment. It will be the function
of the works committee to promote measures for securing and preserving amity and good relations
between the employer and workmen. It endeavors to compose anymaterial difference of opinion in
respect of any matter of common interest for various reasons. The National Commission on Labour
noted that the effectiveness of a works committee would depend on certain factors which were
lacking. They made certain suggestions to make good the deficiencies but the recommendations of
the commission have not been implemented and consequently, the works committees, wherever
constituted have remained ineffective.
Conciliation Officers
The appropriate government may by notification in the official gazette appoint such number of
persons as it thinks fit to be conciliation officers charged with the duty of mediating in and
promoting industrial disputes. These officers constitute the pivot on which the industrial relations
machinery of the appropriate government rests. The object of conciliation is to bring about a
settlement of disputes through third party intervention where bipartite negotiations fail. The
conciliation officers can take cognizance of an existing or apprehended dispute suo moto or on a
reference by either party. Under the Act,
conciliation is compulsory in all disputes in public utility services and optional in other cases. A
settlement arrived at in the course of conciliation is binding on the parties for the agreed period.

The National Commission on Labour noted that both employers and workers had expressed
dissatisfaction over certain aspects of the working of the conciliation machinery and mentioned, in
particular, the delays involved, the casual! attitude of the parties, lack of adequate background
knowledge on the part of the conciliation officers. The Commission felt that a basic rearrangement
of conciliation work was necessary to bring
about a qualitative change in the set up. The Commission expressed the view that conciliation could
be more effective if it was freed from outside influence and the conciliation machinery was
adequately staffed. The independent character of the machinery would alone inspire confidence and
would be able to evoke more cooperation from the parties. The conciliation machinery should,
therefore, be a part of the proposed
Industrial Relations Commissions. This transfer would introduce important structural, functional,
and procedural changes in the working of the machinery as it exists.!”
The Commission also felt that there was need for certain other measures to enable the officers of the
machinery to function effectively including proper selection of personnel adequate pre-job training,
and periodic in-service training.
The major structural changes suggested by the commission have not been implemented. The other
suggestions appear to have been implemented but with what result it is difficult to say.

Board of Conciliation
The appropriate government may constitute a board of conciliation if an occasion arises for
promoting the settlement of an industrial dispute. The function of the board is akin to that of a
conciliation officer. The board is tripartite in character and is presided over by an independent
chairman with equal number of representatives of the employers and workmen. The Board has the
power to compel production of documents and to enforce attendance of persons, to examine them
on oath and to call witnesses.
Boards of conciliation are appointed on ad hoc basis when the issues involved are considered to be
complex. Information is lacking whether boards of conciliation have been constituted in any case in
the recent past and, if so, how effective they have been.

Courts of Inquiry
The appropriate government may, as occasion arises, constitute a court of inquiry for enquiring into
any matter appearing to be connected with or relevant to an industrial dispute. A court may consist
of one or more independent persons as the appropriate government may think fit and where a court
consists of two or more members one of them should be appointed as the chairman. If the court has
the prescribed quorum it may act notwithstanding the absence of the chairman or any of its
members or any vacancy in its number. If, however, the appropriate government notifies that the
services of the chairman have ceased to be available the court should not act until a new chairman is
appointed.
A court of inquiry is an investigating agency. Its report is not binding on the parties but it may serve
to create public opinion and to put pressure on the parties to come to agreement.

Labour Courts
The appropriate government may by notification in the official gazette constitute one or more
labour courts for the adjudication of industrial disputes relating to any matter specified in the
Second Schedule to the Act and for performing such other functions as may be assigned to them
under the Act.

There was no provision for the constitution of a labour court in the Act as enacted in 1947 (Act 14
of 1947). This provision was made in the Industrial Disputes (Amendment) Act, 1956 (Act 36 of
1956). The labour court will consist of one person only to be appointed by the appropriate
government.
The Industrial Disputes (Amendment) Act, 1956 provided that a person would not be qualified for
appointment as the presiding officer of a labour court unless he had held any judicial office in India
for not less than seven years or he had been the presiding officer of a labour court constituted under
any provincial or state Act for not less than five years. In 1964 the Act was amended to provide that
a person would not be eligible for appointment as presiding officer of a labour court unless he was
or had been a judge of a high court or he had been a district judge or additional district judge for a
period of not less than three

According to O.P. Malhotra, the constitution of boards of conciliation has rarely been resorted to. In
the recent years, no board of conciliation has been appointed by the central government.
Some of the state governments have, however, modified or enlarged the qualifications for
appointment of the presiding officers of labour courts.

A labour court may adjudicate on the following matters:

(a) the propriety or legality of an order passed by an employer under the standing orders;

(b) the application and interpretation of standing orders;

(c) discharge or dismissal of workmen including reinstatement of, or grant of relief to, workmen
wrongfully dismissed;

(d) withdrawal of any customary concession or privilege;

(e) illegality or otherwise of a strike or lockout; and

(f) all matters other than those specified in the Third Schedule which are within the jurisdiction of
industrial tribunals.

The Government of Madhya Pradesh has added that the labour courts will try offences punishable
under the Industrial Disputes Act and several other Acts.

The labour court is a quasi-judicial body. It takes cognizance of Industrial Disputes only on a
reference by the appropriate governments in the manner prescribed by or under the law. Direct
approach to the courts by the disputants is not possible.

Tribunals
The appropriate government may constitute one or more industrial tribunals for the adjudication of
industrial disputes relating to any matter, whether specified in the Second Schedule or the Third
Schedule and for performing such other functions as may be assigned to them under this Act.

The original Act 14 of 1947 provided that the appropriate government may constitute one or more
tribunals for the adjudication of industrial disputes in accordance with the provisions of this Act.
The words ‘in accordance with the provisions of this Act, were substituted by the words ‘relating to
any matter, whether specified in the Second Schedule or the Third Schedule’ in Act 36 of 1956. The
reference to the Third Schedule was omitted and the functions of the tribunals were specified in the
current form in 1982 through Act 46 of 1982.

A tribunal will consist of one person only to be appointed by the appropriate government. The
appropriate government may, if it so thinks fit, appoint two persons as assessors to advise the
tribunal in the proceedings before it.

The Act provided that the tribunal could consist of such number of members as the appropriate
government thought fit. It also provided that where the tribunal consisted of two or more members
one of them would be appointed the chairman. The amendment to the Act carried out in 1956,
however, limited the number of members of the tribunal to
one only.

The Act also provided that every member of the tribunal should be an independent person who was
or had been a judge of a high court or a district judge or was qualified for appointment as a judge of
a high court provided that the appointment of a person who was not a judge of a high court or a
district judge should be made in consultation with the
high court of the province in which the tribunal had or was intended to have its usual place of
sitting. The Amending Act of 1936 provided that a person could be appointed as the presiding
officer of the tribunal if he was or had been a judge of a high court or he had held the office of the
chairman or any other member of the labour appellate tribunal or any other tribunal for a period of
not less than two years. The amending Act of 1964 added that a person who had been a district
judge or an additional district judge for not less than three years could be appointed as the presiding
officer of a tribunal

The Amending Act of 1982 omitted the qualification of holding the office of chairman or any
member of the Labour Appellate Tribunal because of the decision to abolish that tribunal.

The Act as it exists today requires that a person should possess one of the following qualifications
for appointment as the presiding officer of the tribunal :

(a) He is or has been a judge of a high court.

(b) He has been a district judge or an additional district judge for
a period of not less than three years.
Some of the state governments have enlarged or modified the qualifications for appointment of the
presiding officers of industrial tribunals.

The Labour Law Review Committee of Gujarat pointed out that under the Bombay Industrial
Relations Act a presiding officer of a labour court who had rendered certain number of service in
that office could be appointed as the presiding officer of a tribunal and suggested that a similar
provision could be made in the Industrial Disputes Act also that a person who had been a presiding
officer of a labour court or a special labour court could be appointed as the presiding officer of an
industrial tribunal if he had rendered five years of continuous service in that capacity.

National Tribunals
The central government may constitute one or more national industrial tribunals for the adjudication
of industrial disputes which in the opinion of the central government involve questions of national
importance or are of such nature that industrial establishments situated in more than one state are
likely to be interested in or affected by such disputes. A National Tribunal will consist of one
person only to be appointed by the central government. A person will be eligible for appointment as
the presiding officer of a national tribunal if he is or has been a judge of a high court. The central
government may, if it so thinks fit, appoint two persons as assessors to advise the national tribunal
in the proceeding before it.

Definition of ‘industrial dispute’

Under the Industrial Disputes Act the term industrial dispute means any dispute or difference
between employers and employees 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. The Supreme Court has held that a dispute between
an individual workman and an employer is not an industrial dispute as defined in the Industrial
Disputes Act unless it is taken up by a union of workmen or by a considerable number of
workmen.?°

Section 2-A was, therefore, inserted in the Act by an amendment carried out through Act No. 35 of
1965 whereby it is provided that a dispute arising out of the discharge, dismissal, retrenchment or
termination of service of a workman will be deemed to be an industrial dispute notwithstanding that
no other workman nor any union of workmen is a party to the dispute. This section is in the nature
of an exception to the general rule that individual disputes are not covered under the term.
The Act applies to disputes arising in an industry as defined in the Act itself.22 The mechanism and
the procedure prescribed under the Act for settlement of disputes are not applicable to non-
industrial establishments which are not covered under the Act. Although the definition of the term
industry has since been widened there must be establishments which are not industrial in nature.
Suggestions have, therefore, been made to consolidate all the labour laws and to make them
applicable to all establishments employers and employees. In that context it has also been suggested
that the term ‘industrial dispute’ should be replaced by the term ‘labour dispute’.?

The Act does not apply to disputes relating to persons who are not workmen, Suggestions have,
therefore, been made to replace the term ‘workman’ by the term ‘employee’.

Reference of disputes

Section 10 of the Industrial Disputes Act provides for reference being made by the appropriate
government or the central government to a board of conciliation, court of inquiry, labour court, a
tribunal or a national tribunal, as the case may be, of a dispute for settlement or for adjudication.

The original Act 14 of 1947 provided that “if any industrial dispute exists or is apprehended, the
appropriate government may by order in writing, (a) refer the dispute to a board for promoting a
settlement thereof, or (6) refer any matter appearing to be connected with or relevant to the dispute
to a court of inquiry; or (c) refer the dispute to a tribunal for adjudication.”

The Act further provided that where the dispute related to a public utility service and a notice (of
strike or lockout) under section 22 had been given, the appropriate government should make a
reference under this section to a board, court or tribunal notwithstanding that any other proceeding
under the Act in respect of the dispute had been commenced.

An appropriate government could also refer a dispute to a board, court of inquiry or a tribunal on an
application by the parties, whether jointly or severally, if it was satisfied that the persons who make
the application represent the majority of the respective parties.

The Act further provided that where an industrial dispute had been referred to a board, or tribunal,
the appropriate government might by order prohibit the continuance of any strike or lockout in
connection with such dispute which might have been in existence on the date of the reference.
In 1952 the Act was amended by Act No. 18 of 1952 whereby the following changes were made in
section 10. :

(a) The words ‘if any industrial dispute exists or is apprehended, the appropriate government may’
were replaced by the words ‘where the appropriate government is of opinion that any
industrial dispute exists or is apprehended it may at any time’.

(5) The words ‘refer the dispute to a tribunal for adjudication’ were replaced by the words ‘refer the
dispute or any matter appearing to be connected with, or relevant to, the dispute, to a tribunal for
adjudication.

The following additions were also made:

(i) Where in an order referring a dispute to a tribunal the appropriate government has specified the
points of dispute the tribunal should confine its adjudication to those points and matters incidental
thereto.

(ii) Where a dispute concerning any establishment or establishments has been or is to be referred to
a tribunal and the appropriate government is of the opinion that the dispute is of such a nature that
another establishment, group or class of establishments of similar nature is likely to be interested in
or affected by the dispute, such establishment or establishments may be included in the reference.

The amendment of the Act in 1956 vide Act 36 of 1956 made further changes in the section as
follows:

(a) Provision was made for the establishment of labour courts and for reference of any matter
specified in the Second Schedule to the Act to those labour courts and for reference of matters
specified in the Third Schedule to the tribunals subject to the condition that if the dispute related to
any matter which did not affect more than one hundred workmen the matters specified in the Third
Schedule could also be referred to the labour courts.

(b) Provision was also made that if any dispute involved any question of national importance or of
such nature that industrial establishments situated in more than one state were likely to be interested
in or affected by the dispute it could be referred by the central government to a national tribunal.
Provision was also made for the necessary consequential measures.
In 1964 an explanation was added to the effect that the term labour court and tribunal would include
any court or authority constituted under any law relating to the investigation and settlement of
industrial disputes
in force in any state.

The section as it reads now was brought into force with effect from August 1984 by the amending
Act No. 46 of 1982 .

Under the Act the government is not compelled to make a reference except in the case of a public
utility service where a notice of strike or lockout is given. Reference of a dispute to a court or
tribunal is not mandatory but discretionary. There is no legal obligation on the part of a government
to refer a case to a court or tribunal except in the case of public utility services. It has been held that
the appropriate government may in certain circumstances refuse to refer a dispute to a court or
tribunal. At the same time it is not open to a worker to approach a labour court or a tribunal directly.

The government has the option to refer a dispute to any of the authorities under the Act either for
the promotion of a settlement or an enquiry in the dispute or for adjudication by labour court or
tribunal depending on the circumstances of the case. The dispute may be referred to a labour court
even in respect of matters specified in the Third Schedule where the number of the workmen
involved is less than one hundred. The central government may also refer a dispute to a labour court
or tribunal set up by a state government.

There is no provision in the Act for settlement of disputes by bilateral negotiations. Unless the
parties agree mutually for voluntary arbitration they have to fall back on the power of the
appropriate government to refer a dispute for adjudication. The Act, however, recognises the
possibility of settlement of a dispute by collective bargaining in so far as the definition of the term
settlement in the Act includes “a written agreement between the employer and workman arrived at
otherwise than in the course of conciliation proceeding”. Malhotra says that “the Act does little
more than lip service to collective bargaining, relegates conciliation to the position of a mere
stepping stone to adjudication and gives step-motherly treatment to voluntary arbitration.”?

Voluntary Arbitration

Section 10 A of the Industrial Disputes Act provides that where any industrial dispute exists or is
apprehended the employer and the workmen may, at any time before the dispute is referred to a
labour court, industrial tribunal or a national tribunal, refer the dispute to arbitration by mutual
agreement. The agreement should be in the prescribed form. A copy of the agreement should be
forwarded to the appropriate government and the conciliation officer and the appropriate
government should publish it in the official gazette within one month of receipt. The arbitrator or
arbitrators are required to investigate the dispute and submit to the appropriate government the
arbitration award duly signed. Where an industrial dispute has been referred to arbitration and the
appropriate government is satisfied that the persons making the reference represent the majority of
each party, it may issue a notification in the prescribed manner whereupon the employers and
workmen, who are not parties to the arbitration agreement but are concerned in the dispute, will be
given an opportunity of presenting their case before the arbitrator or arbitrators. The resulting award
will be binding on all the employers and workmen concerned. Where an industrial dispute has been
referred to arbitration, the appropriate government may prohibit the continuance of any strike or
lockout in connection with that dispute.

According to the Supreme Court, “Voluntary arbitration appears to be the best method for
settlement of all industria] disputes. The disputes can be resolved speedily and in less than a year,
typically in a few months.... Arbitration is also cheaper than litigation with less
legal work and no motion practice. It has limited discovery with quicker hearings and is less formal
than trials. “The best advantage of arbitration is that there is no right of appeal, review or writ
petition. Besides it may as well reduce company’s litigation costs and its potential exposure to
ruinous liability apart from redeeming the workmen from
frustration”.

The various commissions and committees including the Indian Labour Conference, have
recommended voluntary arbitration as the preferred mode of dispute settlement . Yet for various
reasons it has notbecome popular. Malhotra says: “Voluntary arbitration as envisaged by section
10A is arbitration in name only. In reality it is more adjudication
than arbitration.... The only difference between the voluntary arbitration and the compulsory
adjudication left is that in the former case the parties have the liberty to make by mutual agreement
a reference to a private ‘arbitrator’ or ‘arbitrators’ of their choice apart from the presiding officers
of labour courts, industrial tribunals and national tribunals. Once a reference is made there is no
difference between the so-called ‘voluntary
arbitration’ and the ‘compulsory adjudication’. Thus, the efficacy of arbitration is largely buttressed
by reliance on state intervention. No wonder that “this method does not appear to have much
attraction for Indian industry”.

4. APPEALS

A significant feature of the Act is that it makes no provision for appeal or revision against the
awards of adjudicatory authorities. Parties who are aggrieved by the awards can only seek
constitutional remedies by resort to the writ jurisdiction of the high courts. Appeals may, however,
be made to the Supreme Court by special leave under article 136 of the Constitution. The need for
an authority with power to review the decisions of adjudicators has been felt since inception of the
Act. That was the reason for the enactment of the Industrial Disputes (Appellate Tribunal) Act in
1950 itself and the establishment of the
Labour Appellate Tribunal. Unfortunately, this Act was repealed and the tribunal was abolished for
extraneous reasons. Various proposals have since been made for setting up another appellate
authority. The Law Commission has deprecated the abolition of the Labour Appellate Tribunal and
strongly emphasised the need for restoring it in some
form. Implementation of this recommendation awaits a consensus on the other proposals regarding
the reform of the labour adjudicatory system.

Other central laws providing for settlement of industrial disputes

There are a number of other statutes which directly or indirectly deal with industrial relations. Some
of them provide a mechanism and forum for resolution of disputes including a forum for appeals.
According to the Law Commission there are about fifty such laws. A list of the laws is given in
the /22nd report of the Law Commission. For lack of space no attempt has been made to discuss the
provisions of these laws in this paper.

State Legislations on Industrial Disputes

Maharashtra

The former province of Bombay enacted the Bombay Trade Disputes Conciliation Act in 1934. The
Act provided for appointment of labour officers, special conciliators and authorised the government
to appoint the commissioner of labour as the chief conciliator. This Act was replaced by the
Bombay Industrial Disputes Act, 1938 which provided for an elaborate machinery for promotion of
peaceful and amicable settlement of industrial disputes. This Act was also later replaced by the
Bombay Industrial Relations Act, 1946 (Bombay Act XI of 1947).

This Act provides for quicker and more efficient disposal of industrial disputes and gives greater
impetus to labour to organise itself. The salient features of the Act are :

(1) creation of a new class of approved unions and maintenance of a list of such approved unions
authorising them to collect subscriptions, hold discussions with the employers for
prevention and settlement of industrial disputes;

(2) establishment of labour courts, which were entirely new in India at that time, to decide cases
regarding illegal strikes and lockouts and also to decide disputes regarding illegal changes in the
standing orders or conditions of work;
(3) establishment of joint committees of equal number of employers and employees’ representatives
in various occupations and undertakings in an industry; and

(4) formation of wage boards for standardization of wages, rationalization, etc.29

The Gujarat Labour Law Review Committee has observed that the Act had been on the statute book
for over 28 years and that except the controversy about the powers of the representative union and
method of its recognition, it had met the needs of the time to a considerable extent. The committee
has also stated that the Act had been extensively made
use of to redress grievances and creating new norms in industrial relations. Besides it was used for
reducing to a minimum strikes and lockouts and for establishing industrial harmony which was one
of the principal objects behind its enactment.

Madhya Pradesh

The erstwhile Central Provinces and Berar Province enacted the Central Provinces and Berar
Industrial Disputes Settlement Act in 1947. It provides for promotion of peaceful settlement of
industrial disputes by conciliation and arbitration but is a less comprehensive measure as compared
to the Bombay Act. It makes provision for the constitution of a permanent conciliation machinery.
The Act provides for registration of recognised unions and for compulsory framing and settlement
of standing orders.

Uttar Pradesh

The United Provinces Industrial Disputes Act was passed in December 1947 providing power to
prevent strikes and lockouts and to settle industrial disputes and for other incidental matters. The
Act provides for the constitution of boards of conciliation, courts of inquiry works committees and
industrial tribunals for prevention and settlement of industrial disputes. The Act confers wide
powers on the state government authorising them to issue orders prohibiting strikes or lockouts
generally or in connection with any industrial dispute and requiring employers and/or workmen to
observe such conditions and terms of employment as may be specified in the order. The Act lays
down penalty for illegal strikes and lockouts and for instigating or inciting the same and also for
breach of settlement or award.
 CHAPTER- 4
Review of the System of Labour Adjudication

The system of labour adjudication in India has been reviewed by several agencies. The comments
and suggestions made by some of them are indicated below.

National Commission on Labour

The Government of India constituted a commission under the chairmanship of Justice P.B.
Gajendragadkar to review, inter alia, the changes in the conditions of labour since independence and
the existing legislative and other measures intended to protect the interests of labour and their
working. The commission was in particular required to study
the state of relations between employers and workers and the role of trade unions and employers’
organisations in promoting healthy industrial relations. One of the important aspects dealt with by
the commission was the existing legal and other provisions for the intervention of the state in the
settlement of industrial relations.
The commission commented on the existing system of labour adjudication as follows: It cannot be
denied that during the last twenty years. the adjudication machinery has exercised considerable
influence on several aspects of conditions of work and labour management relations. Adjudication
has been one of the instruments for improvement of wages and working conditions and for securing
allowances for maintaining real wages, for standardisation of wages, bonus and introducing
uniformity in benefits and amenities. It has also helped to avert many work stoppages by providing
an acceptable alternative to
direct action and protect and promote the interests of the weaker sections of the working class, who
were not well organised or were unable to bargain on an equal footing with the employer. As
against these advantages, certain procedural defects and indeed fundamental criticisms have been
brought to our notice. On the procedural plane we were told that adjudication is dilatory, expensive
and even discriminatory as the power of reference vests with the appropriate governments. Most of
the analysis which has been made in detail with reference to conciliation applies to adjudication as
well.”
“On fundamentals, the objections are that the system of adjudication has failed to achieve industrial
peace, that it has inhibited the growth of unions and has prevented voluntary settlement of industrial
disputes and growth of collective bargaining. We are of the view that while there are certain
procedural deficiencies in the present system which need to be remedied there is some substance
also in each of the fundamental objections mentioned above against the system. At the same time,
we cannot help feeling that the disadvantages are overstated. Adjudication was not conceived to
prevent all work stoppages; the fact that government may not refer a dispute to adjudication means
that it should be settled , if need be, by direct action. Trade unions have certainly been growing
during the period the adjudication system has been in vogue. Where conditions were favourable,
voluntary settlement of disputes and collective agreements have been adopted in the last twenty
years.”

“The moot point is whether adjudication inhibits collective bargaining and is antithetical to it. It
certainly represents the availability of a third party to settle disputes. But the system as it has been
applicable in our country, did not exclude bipartite agreement. The parties have not been eligible to
have such third-party intervention directly and hence it could not inculcate in all cases a tendency to
avoid mutual agreements. The infrequency of mutual negotiations cannot, therefore, be all
accounted for by the system of adjudication as it has developed. In fact, a major handicap has been
the absence of a recognised bargaining agent. But these issues cannot be decided on the basis of
empiricism as we have no means of ascertaining what would have happened in the absence of
adjudication. We have, therefore, to analyse its efficacy on a broader plane and in terms of its
alternative , viz., collective bargaining.”??
After analysing and evaluating the evidence tendered before it, the commission stated that the
evidence appeared to favour the increasing adoption of collective bargaining to settle disputes and a
gradual replacement of adjudication. The desire for a shift to collective bargaining has, however,
been tempered by a concern in some quarters for avoidance of work stoppages and of unwarranted
disturbances in industrial peace. There is thus a general preference for collective bargaining with a
built in provision for arbitration in the event of failure of collective bargaining. The idea of leaving
certain areas of disputes, i.e., public utility services and cases where national interests are involved
— where adjudication should be permitted enjoys a large measure of support. The majority view
appeared to favour the introduction of collective bargaining subject to the safeguards, in the
organised sector, while retaining third party intervention in certain sectors and where workers are
not organised and conditions of work and wages had yet to reach satisfactory level.
The commission finally concluded: “The requirements of national policy make it imperative that
state regulation will have to coexist with collective bargaining. At the same time there are dangers
in maintaining status quo. There is a case for shift in emphasis and this shift will have to be in the
direction of an increasingly greater scope for, and reliance on, collective bargaining. But any
sudden change replacing adjudication by a system of collective bargaining would neither be called
for nor practicable. The process has to be gradual. A beginning has to be made in the move towards
collective bargaining by declaring that it will acquire primacy in the procedure for settling industrial
disputes.”

Referring to the weaknesses in the working of the existing industrial relations machinery, viz. the
delays involved, the expenditure, the largely ad hoc nature of the machinery and the discretion
vested in the government in the matter of reference of disputes, the commission stated that the
evidence before it was strongly in support of reforming the industrial relations machinery so as to
make it more effective and more acceptable. The commission expressed the opinion that what was
called for was a formal arrangement which was independent in character, expeditious in its
functioning and equipped to build up the necessary expertise.
The commission also observed: “We consider that it would not be enough to secure some of these
improvements through suitable modifications in the existing machinery. A more basic change is
called for and this can be ensured only through the replacement of the present ad hoc machinery by
a permanent machinery which will be entirely independent of administration, We, therefore,
recommend the setting up of an industrial relations commission at the national and state levels for
settling interest disputes broadly covering matters listed in the Third Schedule to the Industrial
Disputes Act.”

The recommendations of the commission with respect to the proposed Industrial Relations
Commissions and Labour Courts.

Labour Law Review Committee of Gujarat

In 1972, the Labour Law Review Committee of Gujarat headed by Justice Sri D.A. Desai which
reviewed the Industrial Disputes Act, among others, observed that the procedure laid down in the
Act was dilatory and frustrating. The committee recommended, inter alia, that:

(a) in respect of individual cases of discharge dismissal etc., the worker should have ‘direct
approach to the labour court; and that

(5) permanent industrial tribunals should be set up in different parts of the state and recognised
unions may be permitted to make a reference directly after failure of conciliation proceedings.

Indian Labour Conference (7th Session)

The Indian Labour Conference has discussed the adjudicatory system of industrial relations on
several occasions. The conclusions reached on this issue during some of the sessions are mentioned
below:

In its 17th Session the Conference felt that as far as possible disputes should be resolved by
bipartite negotiations. Where this was not possible tripartite mechanism could be resorted to and the
disputes referred to voluntary arbitration. The Conference expressed the view that it was not the
right time to replace the system of adjudication but recommended that there should be more and
more recourse to mediation and voluntary arbitration in place of adjudication and that matters of
local interest not having any wider repercussions should, as a general rule, be settled through
arbitration. The employers agreed to extend their full cooperation in evolving the mechanism for
settlement of
industrial disputes through mediation and arbitration. It was also agreed that a panel of arbitrators
should be maintained by the Central and State Governments in order to assist the parties in the
matter of choosing suitable arbitrators. The parties, however, would be at liberty to choose
arbitrators outside the panel.

It was also agreed that the question of making the provisions of the Indian Arbitration Act
applicable to the arbitration proceedings under the Industrial Disputes Act, 1947 should be
examined afresh by the central government.

National Labour Conference — Sanat Mehta Committee Report

The National Labour Conference held in September 1982 appointed a committee under the
chairmanship of Sri Sanat Mehta, the then Minister of Finance and Labour of Gujarat, to examine
important issues relating to industrial relations. One of the issues referred to the committee was the
machinery and procedure for resolution of industrial disputes. The
committee took note of the fact that the National Labour Conference had practically approved the
recommendations of the National Commission on Labour for setting up of Industrial Relations
Commissions (IRCs) at the centre and the state level for resolution of
industrial disputes. The Committee recommended, inter alia, that the proposed new legislation for
industrial relations must provide for setting up of independent on the same lines as recommended
by the National Commission IRCS on Labour. It further recommended setting up of standing labour
courts to work under the overall supervision of IRCs and that they would deal with disputes relating
to rights and obligations, interpretation of awards etc.

The procedure for settlement of individual disputes would be by a grievance redressal machinery
with a built-in provision for arbitration. Where arbitration is not acceptable to the parties they can
approach the conciliation wing of the IRC concerned which would
mediate with a view to help the two parties to arrive at a bipartite settlement. .

The adjudication wing of IRC will deal with issues where the conciliation wing is not in a position
to sort them out. The decision of the adjudicator would be final and binding on the parties. The
certification wing will deal with all matters connected with registration of unions and identification
of a negotiating agent and other issues specifically referred to it.

The labour courts would have powers for execution of the decisions of the IRCs, arbitrators
settlements and rights due under the statutes, directly, in the same manner as a collector is
authorized to collect revenues and the courts would be provided with mamlatdars / tahsildars,
bailiffs and other staff with powers of revenue recovery and power as available to judicial courts for
auction of properties so that the money realized can be made available to the beneficiaries by the
courts directly.

Based on the recommendations of the committee a Bill to amend the Trade Unions Act and the
Industrial Disputes Act was introduced in the Rajya Sabha.

29th Session of the Indian Labour Conference - Report of the Bipartite

(Ramanujam) Committee

The Indian Labour Conference met after a long time in April 1990. One of the items of the agenda
for the conference was to review the industrial relations situation in the context of the amendments
proposed to the Industrial Disputes Act and the Trade Unions Act. While discussing the subject the
representatives of trade unions generally felt that in the light of the new approach in regard to
workers’ participation in management, changes would have to be brought into the industrial
relations system. It also required some rethinking. The representatives of the employers too broadly
agreed with this idea. Following the discussion on the subject, the conference agreed to make the
following recommendations:

(a) The Trade Unions and the Industrial Disputes (Amendment) Bill introduced in the Rajya Sabha
in 1988 should be withdrawn.

(b) For formulating specific proposals for further legislation a bipartite committee should be
constituted with Sri G.Ramanujam as the chairman.

The Bill was withdrawn and the Committee was appointed.”

The committee went, inter alia, into the system of adjudication recommended by the National
Commission on Labour and endorsed the recommendation concerning the establishment of IRCs at
the centre and the state levels. The recommendations of the committee are given in Annexure II to
this chapter.

The report of the committee was not unanimous. Several members had appended notes of dissent.
Apart from these notes of dissent there was further division of opinion among the central trade
union organisations and the employers organisations on certain specific aspects.

The 40th Labour Ministers’ Conference held in February 1992, inter alia, considered the report of
the committee There was a consensus in the meeting that the recommendations which were
unanimous might be accepted. It was also decided to appoint another committee of five labour
ministers to examine the areas of disagreement with a view to arrive at a consensus. The group of
ministers did not agree with the recommendation for setting up the IRCs. The matter was placed
before the Indian Labour Conference again.
The conference at its thirtieth session felt that it would be more useful if the views of the central
government were made known. The chairman of the conference assured that a draft legislation
would be prepared after discussing with a select group of representatives of the parties present in
the conference. This was done.

But the conference at its 31st Session decided to appoint another bipartite committee under the
chairmanship of Dr. Shanti Patel to advise on a comprehensive industrial relations legislation. A
bipartite committee was set up but it could not arrive at a consensus on the issues referred to it by
the government. The committee did not submit any report. Eventually it was wound up.

The government has since appointed the Second’ National Commission on Labour. The
commission is expected to go into the outstanding issues once again. In the meantime it is unlikely
that the government will proceed with the legislative proposals

Law Commission

One of the tasks assigned to the Law Commission is to study measures for judicial reforms and to
recommend innovative suggestions, inter alia, with a view to decentralise the system of
administration of justice by establishing other tiers or systems within the judicial hierarchyto reduce
the volume of work in the Supreme Court and the high courts. In its 122nd report submitted in 1987
the Law Commission considered the question of introducing and setting up a forum with an all
India jurisdiction and an all India perspective for dealing with labour laws excluding the jurisdiction
of high courts and retaining one appeal to the Supreme Court under article 136 of the Constitution.
In this report the commission supported the recommendation for setting up IRCs.

In the absence of an all-India body having jurisdiction to reconcile conflicting awards of labour
courts/industrial tribunals so as to frame a consistent and noteworthy industrial jurisprudence within
the perspective of Part [V of the Constitution, contradictory, conflicting and irreconcilable industrial
relation norms have emerged. The expectation
that the Supreme Court of India would supply these lacunae by providing quick uniformity has been
wholly belied. Industrial adjudication cannot operate purely in a legal framework devoid of
humanistic touch. It requires understanding of constitutional goals, humanities, social sciences
economic planning and national and international economic developments. This is a field of
specialized study and, therefore, must be the concern of a specialist court
The fundamental considerations governing industrial adjudication being industrial peace and
harmony creating fruitful environment for economic advancement of the nation, the adjudicator
must have vision and capacity to move in that direction.

Over a period, industrial adjudication has developed all the trappings of civil litigation bringing in
all its imperfections, limitations and disadvantages. A bold and innovative approach must dictate
the choice.

The solution lies in providing a system of participatory justice. Industrial adjudication is an area
where a system of participatory justice with defined jurisdiction and powers can be introduced with
advantage which will remove the ills so far noticed. A participatory model, both at the national and
state level, replacing the tribunals should be a step forward and result oriented.

The specific recommendations of the Law Commission are given in Annexure III to this chapter.

Indian Labour Code 1994 (draft)

The National Labour Law Association, a non-government organisation, recently undertook a

research project called “Simplification, Rationalisation and Consolidation of Labour Laws” under
the direction of a Committee headed by Justice Sri D.A. Desai, retired Judge of the Supreme Court.
The object of the project was to evolve a set of recommendations for reform of labour laws aimed at
making them simpler, more coherent and harmonious, internally consistent with each other and
designed to give practical shape to the Directive Principles of State Policy in so far as they relate to
labour in conformity with the standards laid down by the UN and the ILO to the extent possible. At
the end of the project a document called Indian Labour Code 1994 (draft) was drawn up. It contains
proposals for reform of all the labour laws in an integrated fashion. One of the chapters in the Code
relates to Labour Relations.

The basic approach of the Code with respect to labour relations is to devise a system which would
considerably reduce, if not altogether do away with, the intervention in labour relations by the state.
It seeks to ensure that ultimately state intervention in labour relations should aim at promoting
autonomous bilateral negotiations between the employers and trade unions. It provides for third
party intervention for resolution of disputes between the parties, not by government agencies but by
statutory authorities, created for the purpose independently of government. The Code makes
bipartite negotiated settlements, freely entered into by the employers and the workers, paramount by
providing that the terms and conditions of employment at levels above the minimum standards laid
down in the Code should be determined by mutual agreement between the employer and the
employees concerned through collective bargaining. The Code also lays down the procedure for
collective bargaining.

The Code envisages the establishment of Labour Relations Commissions at the national, central and
state levels with wide ranging functions and powers. The Code has vested considerable amount of
authority on the commissions. This is deliberate as only high powered labour relations commissions
would be a safeguard against undue intervention in labour relations by appropriate governments.
Significantly the Code has proposed that the powers of even the Supreme Court may be vested in
the National Labour Relations Commission under clause 3 of article 32 of the constitution.
Consistent with the status and authority of the members of the commissions the Code has provided
that their appointment should be made on the recommendations of National Judicial Commission.

CHAPTER-5
JUDICIAL AND PROCEDURAL TRENDS

The need for specialization in labour adjudication has been expressed by several experts. Sri R.
Venkataraman, former President of India, in his address at a workshop on constitutional law,
industrial jurisprudence and labour adjudication had pointed out that it would be advantageous if a
separate labour judiciary was constituted which could deal with the various labour laws with power
to deal with violation of their own orders or of provisions of the laws. He had also observed that if
such a labour judiciary were formed it would be possible to man them by carefully selected persons
who could be given adequate pre-service training and orientation.

A similar suggestion was made by the Gujarat Labour Law Review Committee. The committee
commenting on the fact that no attempt had been made to create a labour judicial service, stated that
it was time to create such a service as recommended by the study group on labour legislation set up
by the National Commission on Labour.

As that would take some time, the committee recommended that in the meantime those who-were to
be appointed to man industrial courts, industrial tribunals and labour courts should be given a
specialized training. The committee also suggested the setting of a separate training institute for the
purpose.

The Law Commission had expressed the view that persons drawn from the civil judiciary were
unsuitable for manning the labour courts and industrial tribunals. The commission has observed that
those who had spent their whole active life in courts administering civil justice are prone to be
precedent oriented, technical, traditional, and impervious, if not blind, to the utter inequalities of
parties appearing before them when functioning as members of tribunals set up to resolve industrial
disputes.

The Indian Labour Code has also suggested the creation of an All India Judicial Service with a view
to develop expertise in labour laws.

1. Procedural Matters

Section 11 of the Industrial Disputes Act, 1947 lays down the procedure and powers of the
authorities constituted under the Act. According to the section an arbitrator, a board, court, labour
court tribunal or national tribunal may follow such procedure as the arbitrator or authority
concerned may think fit. Every board, labour court, tribunal and national tribunal have the same
powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908), when
trying certain specified matters. Every inquiry or investigation by a board, court, labour court,
tribunal or national tribunal will be deemed to be a judicial proceeding within the meaning of
Sections 193 and 228 of the Indian Penal Code (45 of 1860). Every labour court, tribunal, or
national tribunal will be deemed to be a civil court for the purposes of sections 345, 346, and 348 of
the Code of Criminal Procedure, 1973 (2 of 1974).

Thus, the section makes a distinction between the labour court, tribunal and national tribunal, on the
one hand, and the other authorities, namely, the arbitrator, board and the court, on the other. The
labour courts and national tribunals have the power to adjudicate upon industrial disputes. They act
on guasi judicial principles. The other authorities can only conciliate or mediate in disputes so as to
bring about settlement without resort to adjudication.*°

The labour courts and the tribunals generally follow the civil procedure. The Labour Law Review
Committee has commented that as the judges of the labour courts and industrial courts ‘tribunals are
drawn from the civil judiciary, they have been following the adversary system which has been
carried forward by the civil courts on the British pattern as a legacy from the British rule. In an
adversary system, the judge sits as an umpire and decides the matter on the evidence placed before
him. The entire liability to bring relevant evidence or facts to the notice of the judge rests upon the
parties to the dispute. The burden of proof and the consequences of failure to produce evidence rests
on the parties. This in the opinion of the committee was not a correct approach where parties are
wholly unevenly matched. The committee has, therefore, recommended the replacement of the
adversary system by inquisitional system. Under the inquisitional system the presiding officer will
have some responsibility to collect necessary material to do justice between the parties.

2. Development of Industrial Jurisprudence vis-à-vis Judicial Trends

The Supreme Court, and its predecessor the Federal Court are said to have given a shape to
industrial jurisprudence in the course of their judgments on several cases which were taken to it
under article 136 of the Constitution and the corresponding provision existing previously.

In Western India Automobile Association v. Industrial Tribunal Bombay, 1" the Federal Court
enunciated the powers of industrial adjudication and ruled: “Adjudication does not, in our opinion,
mean adjudication according to the strict law of master and servant. The award of the tribunal may
contain provisions for settlement of a dispute which no law could order if it was bound by ordinary
law, but the tribunal is not fettered in any way by these limitations.” This judgement quoted with
approval the observation of Ludwig Teller that industrial arbitration may involve the extension of
1
1949 FCR 321
an existing agreement or making of new one.

In the Bharat Bank v. Employees of Bharat Bank,2" it was held the awards of industrial tribunals
were subject to appeal to Supreme Court. As a result of this decision, the Supreme Court
subsequently entered the arena of industrial adjudication and evolved the guidelines of industrial
jurisprudence.

In Bijay Cotton Mills Lid v. State of Ajmer, 3 the Supreme Court while conceding that certain
provisions of the Minimum Wages Act, 1948 curtailed the freedom guaranteed under article 19 of
the Constitution rejected the plea to declare them ultra vires on the ground that the restrictions
imposed on the freedom of contract of the employer were reasonable and had been imposed in the
interest of the general public and were protected under clause (6) of article 19. This decision has led
to subsequent decisions by industrial tribunals and the Supreme Court that the employer is bound to
pay a minimum wage and in imposing upon him the liability to pay a minimum wage, the question
about his capacity to pay is totally irrelevant.

In Rai Bahadur Dewan Badri Das v. Industrial Tribunal 4, the Supreme Court ruled: “The
doctrine of the absolute freedom of contract has to yield to the higher claims of social justice.... In
the case of industrial adjudication, the claims of the employer based on the freedom of contract
have to be adjusted with the claims of industrial employees for social justice. (However) in order
that industrial adjudication should be completely freed from the tyranny of dogmas or the
subconscious pressures of preconceived notions , it is of utmost importance that the temptation to
lay down broad principles should be avoided.”

In J.K Cotton Spinning & Weaving Mills Co. Lid. y. Labour Appellate Tribunal 5, the Supreme
Court observed: “The ultimate object of industrial adjudication is to help the growth and progress of
national economy and it is with that ultimate object in view that industrial disputes are settled by
industrial adjudication on principles of fair play. and
justice”.

Commenting on these judgements, the National Commission on Labour has said :

“It is on these lines that adjudication has attempted to assist the process of evolving new concepts
2
[1950] SCR 459
3
AIR 1955 SC 33.
4
1962 LL J 366.
5
1963 II LLJ 436.
and ideas which should regulate industrial relations and help the establishment of industrial
harmony in the economic life of India, important in a Welfare State. It is on these lines that
industrial jurisprudence has developed during the last two decades in India.”

Continuing on the same vein the Commission has observed: “Industrial jurisprudence seeks to
evolve a rational synthesis between the conflicting claims of the employers and the employees.
Leaving aside the case of minimum wages which the employer must pay, in the matter of other
wages higher than the category of minimum wages, and in regard to other matters which come
under the category of industrial disputes, industrial jurisprudence does and should always try to
examine the merits of the rival contentions and seek to resolve the conflict by evolving solutions
which do no injustice to employers and fully meet the employee’s legitimate claims. In finding out
solutions to industrial disputes great care is always taken, as it ought to be, to see that then
settlement of industrial disputes does not go against the interests of the community as a whole.”

“In the decision on major industrial disputes, three factors are, thus, involved: the interests of the
employees which have received constitutional guarantees under the Directive Principles, the
interests of the employers which have received a guarantee under Article 19 and other articles of
Part II], and the interests of the community at large which are so important in a welfare state. It is
on these lines that industrial jurisprudence has developed during the last two decades in India.”

3. PROPOSALS FROM JUDICIAL PRONOUNCEMENTS

The two main central enactments which at present regulate matters relating to industrial
relations are the Trade Unions Act 1926 and the Industrial Disputes Act, 1947. There are
separate laws on the subject in some states which supplement the central laws. The National
Commission on Labour had felt that there was need for reform in the mechanism of dispute
settlement and made several recommendations in that regard.

In 1978, the government made an endeavour to bring out a comprehensive legislation to regulate
the industrial relations in the country. It introduced the Industrial Relations Bill, 1978 in the Lok
Sabha in August 1978. The Bill, however, lapsed before it could secure
passage through Parliament. The Industrial Relations Bill had excluded from its purview hospitals
and educational, scientific research and training institutions as they had special and distinct
characteristics of their own; and it was considered necessary to maintain an atmosphere that
eschewed strife and conflict. However, the employees engaged in these establishments also needed
protection. Another Bill was, therefore, introduced in the Lok Sabha in order to provide a
machinery for resolution of their individual and collective employment disputes. This Bill also
lapsed with the dissolution of the Lok Sabha .

In 1982, the Industrial Disputes (Amendment) Bill was introduced in the Lok Sabha to amend, inter
alia, the definition of the term ‘industry’ so as to exclude from its purview among others, hospitals
as well as educational, scientific research and training institutions.
Simultaneously the Hospitals and other Institutions (Settlement of Disputes) Bill was introduced in
the Rajya Sabha. While the former Bill was enacted, the Hospitals and Institutions Settlement of
Disputes Bill was not pursued further because of opposition to the various provisions of the Bill
both inside and outside Parliament. In the circumstances the amended definition of the term
‘industry’ could not be brought into effect as no alternative grievance redressal machinery was
available to the employees in hospitals etc. who would have been denied the protection of the
existing laws. Subsequently another Bill called the Hospitals and other Institutions (Redress of
Grievances of Employees) Bill, 1987 was introduced after withdrawing the 1982 Bill. The Bill was
passed in the Rajya Sabha but it too lapsed with the dissolution of the Lok Sabha in 1989. The
National Labour Conference held in 1982 had remitted to the Sanat Mehta Committee the matter
relating to restructuring the industrial relations machinery and consequent amendments to the
Industrial Disputes Act. The recommendations of that committee were considered in different fora
in September 1986. In the light of the discussions the trade unions and other Industrial Disputes
(Amendment) Bill, 1988 was formulated and introduced in the Rajya Sabha in May 1988. The Bill
was, however, not taken up for consideration in the Parliament because of the strong opposition to it
from some trade unions. The matter was discussed in the 29th Session of National Labour
Conference held in April 1990. In pursuance of the recommendation of the conference the 1988 Bill
was also withdrawn from the Rajya Sabha and a bipartite committee comprising representatives of
central trade union organisations and employers organisations was constituted in May 1990 under
the chairmanship of Sri G.Ramanujam. The terms of reference of the committee were to formulate
specific proposals for a new Industrial Relations Bill. The Ramanujam Committee submitted its
report in October1990. Based on the report another draft Bill was prepared but owing differences of
opinion on certain vital issues it has not seen the light of day.

Thus, all the attempts made to modify the legislative framework for regulating industrial relations
generally and the mechanism and procedure for adjudication of industrial disputes have failed.
Currently, there seems to be no fresh effort on the anvil.
 CHAPTER- 6
ISSUES

I. In the light of the foregoing history of labour adjudication the following

issues are currently under debate.

1. Whether adjudication can be replaced by collective bargaining?

Ans- The essence of labour relations is collective negotiation. Collective bargaining and
accommodation and reconciliation of mutual interests, therefore, is key to the establishment and
maintenance of amicable relations between employers and workers. Ordinarily the term collective
bargaining is used for the bipartite negotiations for determination of wages and other conditions of
service. But it can also be used in a wider context for settlement of differences and disputes.

The National Commission on Labour stated that the place of collective bargaining as a method of
settlement of industrial disputes has been debated since long, almost since the days of the Whitley
Commission. The best justification for collective bargaining is that it
is a system based on bipartite agreements and as such superior to any arrangement involving third
party intervention in matters which concern employers and workers. This is recognized even in our
system in principle but in practice there seems to be a preference for adjudication. The commission
marshalled the arguments in favour of collective bargaining and adjudication and came to the
conclusion that there is a case for a shift in emphasis in the direction of an increasingly greater
scope for and reliance on collective bargaining but that has to be a gradual process.

The Indian Labour Conference at its 17th Session also came to the conclusion that as far as possible
disputes should be resolved through bipartite mechanism. Where this was not possible, tripartite
mechanism could be resorted to but that too in the form of arbitration. There should be more
recourse to mediation and arbitration in place of adjudication.

This view represents the consensus in the matter but people do not yet seem to have enough faith in
mediation conciliation or arbitration. There is still a preference for adjudication. The number of
cases being referred to adjudication has been going up and, the existing machinery being inadequate
to handle them expeditiously, there is a gradual increase in the pendency of cases.

In this situation whether reliance can be placed on collective bargaining for settlement of disputes is
debatable. The ultimate sanction for the success of collective bargaining is the threat of strike or
lockout. if, however, it is pushed to the extreme it can destroy either or both parties. The case of the
textile strike in Mumbai illustrates how an industry can be ruined for failure on the part of the
government or any other third party to intervene in a dispute in time.

Collective bargaining can be the first step towards resolution of conflicts but if it fails third party
intervention becomes inevitable especially in public utilities. This may again be in the form of
conciliation failing which by arbitration or adjudication. It is said that adjudication is also a form of
arbitration but the procedures are different. If the procedure for adjudication can be simplified as
suggested by certain experts it can be a substitute for arbitration.

2. Whether the existing adjudication machinery may be replaced by the IRCs?

Ans- Currently, the adjudication machinery consists of labour courts, industrial tribunals and
national tribunals. There are shortcomings in the working of this machinery and people generally
are dissatisfied with it. The National Commission on Labour, therefore, recommended the
establishment of ICRs at central and state levels to take over the adjudicatory function along with
other functions in replacement of the existing machinery. This recommendation has been endorsed
by tripartite bodies like the Sanat Mehta Committee and the Ramanujam Committee, and also by
the Law Commission as well as the National Labour Law Association. The state governments and
some of the trade union
organisations are, however, opposed to it. The central government has also not taken a firm stand on
this issue with the result that the matter is being referred to committees after committees without
finality being reached. If the central government makes up its mind it should be possible for it to get
the legislation passed even if there is some opposition to it.

3. Whether reference by appropriate government is necessary for a labour court

or an industrial tribunal to take cognizance of a case or whether the

complainants can approach the court or tribunal directly.?

Granting that the existing machinery will continue in the same or modified form a more
fundamental question is whether the appropriate government should continue to have the discretion
to refer the disputes for adjudication. While the Government may have the right to refer any case for
adjudication with the view to prevent work stoppages and inconvenience to the public it is not clear
why the government should have the exclusive right to refer disputes for adjudication and why the
disputants cannot be allowed to approach the judicial machinery directly, if they choose to do so.

The Labour Law Review Committee has advocated eloquently the case for permitting the
individuals as well as the trade unions to approach the courts/tribunals directly. The committee has
advanced two major arguments against the continuance of the existing arrangement. Firstly, the
procedure is dilatory and frustrating. Secondly, the discretion
conferred on the government to refer or not to refer a dispute for adjudication is apt to be used in a
partisan way. The committee, therefore, made a positive recommendation in favour of providing the
workers direct access to the courts and tribunals.

It appears that the government has also recognised the infirmities of the existing arrangements and
has planned to carry out the necessary reform.

4. Whether it is necessary to revive the Labour Appellate Tribunal in the same

or other form?

If the existing machinery for adjudication were to continue, it calls for another major reform to
create a forum for appeals over the judgements of the labour courts and tribunals. The Labour
Appellate Tribunal was such a forum but it seems to have been abolished in a hurry for extraneous
reasons. The feasibility of reviving it needs to be considered seriously.

In the opinion of the Indian Law Commission, there is a need for an appellate authority to bring
about uniformity in the decisions of the numerous courts and tribunals on labour disputes. The
commission has commented on the abolition of the Labour Appellate Tribunal as follows:

With the pace of industrialisation numerous labour courts and industrial tribunals had to be set up
throughout the length and breadth of the country. Each forum was having power to make awards
with finality attaching to it. What was inherent in the situation was that conflicting awards,
decisions and approaches would emerge. An approach to the high court under article 226-227 of the
Constitution would at best bring about uniformity at the
state level but the high courts differ inter se. The situation was agonizing for industrial
establishments having interstate operations or having production units in more states than one and
being subject to jurisdiction of different high courts. Ultimately, the matter had to be taken to the
Supreme Court which was both dilatory and time consuming.

The establishment of the Appellate Tribunal having all India jurisdiction was thus a natural
response to the need for a measure of uniformity of underlying principles and norms to govern the
awards of the different industrial tribunals. Accordingly, the Industrial Disputes (Appellate
Tribunal) Act, 1950 was put on the statute book.
Somehow, this Appellate Tribunal incurred the wrath of the leading national organisations of
workmen.... According to workmen, there was inordinate delay in the disposal of these
appeals whereby the implementation of awards was held up and thereby prolonged the litigation.
The workmen with their weak staying power could ill afford such delay.

There was also a feeling among workmen that the Appellate Tribunal being manned by the retired
judges of high courts, disclosed a tilt in favour of the management, disclosing a class bias,
compounded by the lack of knowledge of industrial relations. Crass legalistic approach and lack of
commitment to social justice in deciding appeals further accentuated the feeling of the workmen
and a near unanimous demand was voiced for the, abolition of the Labour Appellate Tribunal.
Ultimately, in a democracy, the voice of the numerically stronger section prevailed...” and the
Tribunal was abolished.

Since the abolition of the Labour Appellate Tribunal, an award of the labour court or industrial
tribunal is challenged either by invoking the jurisdiction of the high court under articles 226-227 of
the Constitution or by special leave petition to the Supreme Court of India under Article 32 of the
Constitution. Even occasionally, they are questioned by a writ petition under article 32 of the
Constitution. Article 141 of the Constitution provides
that the law declared by the Supreme Court will be binding on all courts including tribunals and
government, within the territory of India. Obviously, therefore, the Supreme Court can bring about
uniformity in the matter of industrial relations. But the phenomenal backlog of cases in the Supreme
Court has considerably thwarted the disposal of labour cases which alone could bring about
uniformity. There is such inordinate delay in disposal of all cases including under the labour laws
coming before the Supreme Court that the faith reposed in it that it will expeditiously pronounce its
verdict and help in introducing
uniformity has been belied. The result is a tremendous lack of uniformity in the awards of the
industrial tribunals and multiplicity of litigation and proliferation of industrial disputes which very
often threaten industrial peace and harmony dislocating the goal set up in the plan documents.

There is almost near unanimity on the question of providing a forum having an all-India jurisdiction
and perspective to which an appeal may lie or which may also enjoy some original jurisdiction so
that much desired uniformity in industrial relations can be brought about. In a well-ordered judicial
system, it is considered absolutely essential to provide for one appeal as of right with safeguards of
a further possible appeal by leave in appropriate cases. The International Labour Organisation had
recommended that the workmen whose service is terminated must have a right of appeal to a neutral
body. The Supreme Court cannot be a forum for regular appeals as a matter of right. Therefore, an
intermediate appellate forum is the need of the day. There is a renewed interest in devising such a
forum, if not the revival of the Labour Appellate Tribunal.

5. Other reform measures

Irrespective of what form the judicial machinery takes, there can be no gainsaying that labour laws
being a specialized branch of law, there is an obvious necessity for building up expertise in that
branch. Suggestions have been made for creation of a separate labour judicial service for manning
the courts and tribunals and to provide the members of the service appropriate training so as to
equip them to handle cases with necessary knowledge, experience and empathy. These suggestions
call for serious consideration.

Similarly, the recommendation made by the Labour Law Review Committee of Gujarat to change
the procedure for dealing with industrial disputes from an adversarial system to an inquisitorial
system also deserves serious consideration

II. Recommendations of the National Commission on Labour (1969)

The setup of the proposed machinery will broadly be on the following lines:-

1. An Industrial Relations Commission (IRC)

(i) There should be a National Industrial Relations Commission appointed by the Central
Government for industries for which that Government is the appropriate authority. The National
IRC would deal with such disputes which involve questions of national importance or which are
likely to affect or interest establishments situated in more than one State, i.e., disputes which are at
present dealt with by National Tribunals.
(ii) There should be an Industrial Relations Commission in each State for settlement of disputes for
which the State government ‘is the appropriate authority.
(iii) The National/ State IRC will have three main functions:
(a) adjudication in industrial disputes;
(b) conciliation; and
(c) certification of unions as representative unions.
(iv) The Industrial Relations Commission will be an authority independent of the executive.
(v) The strength of the national /State Commission should be decided taking into account the
possible load on it and the need for expeditious disposal of cases; its membership should not exceed
seven.
(vi) The Commission should be constituted with a person having prescribed judicial qualifications
and experience as its President and equal number of judicial and non judicial members; the non
judicial members need not have qualifications to hold judicial posts, but should be otherwise
eminent in the field of industry labour or management.
(vii) Judicial Members of the National Industrial Relations Commissions, including its President
should be appointed from among persons who are eligible for appointment as Judges of a High
Court.
(viii) The terms and conditions of service and the age of superannuation of the judicial members of
the National / State IRC should be similar to those of the judges of the High Courts.
(ix) The President of the National Industrial Relations Commission will be appointed by the Union
Government in consultation with a committee consisting of the Chief Justice of India, the Chairman
of the Union Public Service Commission (UPSC) and the senior most Chief Justice in the High
Courts.
(x) The other members of the National Industrial Relations Commission will be appointed by the
Union Government in consultation with the Chief Justice of India, the Chairman of the UPSC and
the President of the National Industrial Commission.
(xi) In regard to the State Industrial Relations Commission, the President of a State IRC will be
appointed by the State Government in consultation with the Chief Justice of India, the Chief Justice
of the State and the Chairman of the State Public Service Commission.
(xii) The other members of a State Industrial Relations Commission will be appointed by the State
Government in consultation with the Chief Justice of the State High Court, the Chairman of the
State Public Service Commission and the President of the State Industrial Relations Commission.
(xiii) The Conciliation Wing of the Commission will] consist of conciliation officers with the
prescribed qualifications and status. In the cadre of conciliators there will be persons with or
without judicial qualifications. Those who have judicial qualifications will be eligible for
appointment as judicial members of the Commission after they acquire the necessary experience
and expertise. Others could aspire for membership in the non-judicial wing.
(xiv) The Commission may provide arbitrators from amongst its members/officers, in case parties
agree to avail of such services.
(xv) The Commission may permit its members to serve as Chairman of the Cental /State Wage
Boards/Committees if chosen by the Government for such appointment.
(xvi) The functions relating to certification of unions as representative unions will vest with a
separate wing of the National /State IRC. The National IRC may, where it considers necessary, get
the following of the contending unions determined by the State IRCs.

Labour Courts

In addition to the Industrial Relations Commission, we also suggest the setting up of standing
Labour Courts which would be entrusted with judicial functions of interpretation and enforcement
of all labour laws, awards and agreements. These courts will deal broadly with disputes relating to
matters mentioned in the Second Schedule to the I.D. Act, in respect of the industrial relations
issues brought to them.

(i) There will be a labour court in each State constituted of judicial members only. The strength and
location of such courts will be decided by the appropriate Government;

(ii) Members of the labour court will be appointed by Government on the recommendations of the
High Court. Generally, the Government should be able to choose from a panel given by the High
Court in the order in which names are recommended;

(iii) Labour courts will deal with disputes relating to rights and obligations, interpretation and
implementation of awards of either the National or State IRC and claims arising out of rights and
obligations under the relevant provisions of laws or agreements, as well as disputes in regard to
unfair labour practices and the like;

(iv) Labour courts will thus be the courts where all disputes specified in Clause (iii) will be tried
and their decisions implemented. Proceedings instituted by parties asking for the
enforcement of rights falling under the aforesaid categories will be entertained by labor courts
which will act in their execution jurisdiction in that behalf. Appropriate powers enabling them to
execute such claims should be conferred on them.

(v) Appeals over the decisions of the labor court in certain clearly defined matters, may lie with the
High Court within whose area/jurisdiction the court is located.
 CHAPTER-7
CONCLUSION
This study paved way, for recommending the possible way outs for accelerating the effective-
ness of the adjudication process, in industrial fields. Among the major suggestions, the most rec-
ommendable was the one regarding removal of legislative control, on such courts and forums.
The legal requisite of the reference by appropriate government was the main clog, for lack of ef-
fectiveness of the adjudication process. The three constitutional components, such as legisla-
ture, executive and judiciary should be given equal powers, to control the adjudication ma-
chineries.

The study emphatically precipitated the fact that, as the matter stands the control of appropriate
government on such adjudication machinery is greater, when compared with other two compo-
nents, executive and judiciary. The probability of ineffective awards, biased awards and injus-
tice in procedure is much, due to this control of appropriate government.

This study has brought out a good number of hidden facts, touching the domestic obstacles
in the adjudication process. The lack of expertise of presiding officers, the minimum number of
courts and tribunals, the presence of unskilled agents to defend the disputes are some of the
reasons for the ineffective results of the adjudication process.

THE REALM OF LABOUR LEGISLATIONS REQUIRES PERIODIC SCRUTINY AND

REVIEW.

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3. Hari Mohan Mittal, “Discretionary Referrals of Industrial Disputes to the

Adjudicators”, Journal of the Legal Studies, Vol. XXX, 1999-2000.
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Jay Hanuman