“Industry and Industrial Dispute”

A FINAL DRAFT SUBMITTED IN FULFILMENT OF THE COURSE CRIMINAL LAW-

II FOR OBTAINING DEGREE OF B.B.A. LL. B

PROJECT BY:
NAME: ABHIGYAT CHAITANYA
COURSE: B.B.A. LL. B (Hons.)
ROLL NO: 1802
SEMESTER: 4TH

SUBMITTED TO:
Ms. Pallavi Shankar

February, 2018

CHANAKYA NATIONAL LAW UNIVERSITY, NYAYA NAGAR,

MITHAPUR, PATNA - 800001
 DECLARATION BY THE CANDIDATE

I, ABHIGYAT CHAITANYA student of Chanakya National Law University hereby declare

that the work reported in the B.B.A.L.L.B(HONS) project report entitled INDUSTRY AND
INDUSTRIAL DISPUTEsubmitted is an authentic record of my work carried out under the
supervision of Ms. Pallavi Shankar. I have not submitted this work elsewhere for any other
degree or diploma. I am responsible for the contents of my project Report.

(Signature of the candidate)

NAME: ABHIGYAT CHAITANYA

ROL NO: 1802

COURSE: B.B.A.L.L.B(HONS)

SEMESTER: 2018-2019 (4TH)

SESSION:2017-22
 AKNOWLEDGEMENT

I would like to thank my faculty Ms. Pallavi Shankar whose guidance helped me a lot with
structuring my project.
I owe the present accomplishment of my project to my friends, who helped me immensely
with materials throughout the project and without whom I couldn’t have completed it in the
present way.
I would also like to extend my gratitude to my parents and all those unseen hands that helped
me out at every stage of my project.

THANK YOU

NAME: ABHIGYAT CHAITANYA

ROLL NO: 1802

COURSE: B.B.A.L.L.B.(HONS)

SEMESTER: 2018-19 (4TH)

SESSION:2017-22
Table of Contents

I. INTRODUCTION..............................................................................................................5
a. AIMS AND OBJECTIVES.............................................................................................6
b. RESEARCH METHODOLOGY....................................................................................6
c. HYPOTHESIS................................................................................................................6
e. SOURCES OF DATA.....................................................................................................7
f. LIMITATION.................................................................................................................7
g. MODE OF CITATION...................................................................................................7
I. GROWTH OF INDUSTRIAL DISPUTES LEGISLATION.............................................7
II. INDUSTRY’ UNDER THE INDUSTRIAL DISPUTES ACT......................................7
TRIPLE TEST LAID DOWN IN BANGALORE WATER SUPPLY CASE..........................9
III. POSITION OF DIFFERENT BODIES WITH RESPECT TO INDUSTRIAL
DISPUTES ACT......................................................................................................................10
1) IS HOSPITAL AN INDUSTRY?.................................................................................10
2) EDUCATIONAL INSTITUTIONS..............................................................................12
3) IS GOVERNMENT DEPARTMENT AN INDUSTRY?.............................................13
4) DO CLUBS FALL UNDER INDUSTRY?..................................................................13
IV. INDUSTRIAL DISPUTE.............................................................................................14
V. Industrial Dispute Settlement Machineries for Settling Industrial Disputes in India. . .17
1. Conciliation:.....................................................................................................................18
2. Court of Inquiry:...............................................................................................................20
3. Voluntary Arbitration:......................................................................................................20
4. Adjudication:....................................................................................................................21
V. CONCLUSION AND SUGGESTION...............................................................................24
VI. BIBLIOGRAPHY..............................................................................................................26
 I. INTRODUCTION

Sec.2 (j) of the Industrial Disputes Act, 1947 defines ‘industry’ as any business, trade,
undertaking, manufacture, or calling of employers and includes any calling, service,
employment, handicraft or industrial occupation or avocation of workmen”.

An industry exists only when there is relationship between employers and employees, the
former is engaged in business, trade, undertaking, manufacture or calling of employers and
the latter is engaged in the calling, service, employment, handicraft or industrial occupation
and avocation.

Sec. 2(j) gives the definition of industry, which was elaborated upon by the Supreme Court in
the Bangalore Water Supply and Sewerage Board v. R. Rajappa[i]. The term industry has
been given a wide scope and the judgment overruled several earlier decisions. The court held-

1. Any activity will be industry if it fulfills the ‘triple test’, as under:

· Systematic and organized activity

· With the cooperation between Employers and employees

· For the production and distribution of good and services whether or not capital has
been invested for this activity.

2. It is immaterial whether or not there is profit motive or whether or not there is capital.

3. If the organization is a trade or business it does not cease to be one because of philanthropy
animating the triple test, cannot be exempted from scope of definition of industry.

4. Dominant nature test – whether there is complex of activities, the test would be
predominant nature of services and integrated nature of departments. All departments
integrated with industry will also be industry.

5. The exceptions to industry are-

Casual activities (because they are not systematic).

Small clubs, co – operatives, research labs, gurukuls which have an essentially non employee
character.
Single door lawyer taking help from clerk (because there is no organized labour).

Selfless charitable activities carried on through volunteers e.g. free legal or medical service.

Sovereign functions – strictly understood, i.e., maintenance of law and order, legislative
functions and judicial function.

In common parlance, dispute means difference or disagreement of strife over some issues be-
tween the parties. As regards industrial dispute, since its settlement proceeds as per the legal
provisions contained in the ‘Industrial Disputes’ Act, 1947, hence it seems pertinent to study
the concept of industrial disputes from a legalistic angle.

According to Section 2 (k) of the Industrial Disputes Act, 1947, the term ‘industrial dispute’
means “any dispute or difference between employers and employers or between employers
and workmen, or between workmen and workmen, which is connected with the employment
or non- employment or the terms of employment and conditions of employment of any
person”.

The above definition is too broad and includes differences even between groups of workmen
and employers engaged in an industry. However, in practice, industrial disputes mainly relate
to the difference between the workmen and the employers.

Dispute differs from discipline and grievance. While discipline and grievance focus on
individuals, dispute focuses on collectivity of individuals. In other words, the test of
industrial dispute is that the interest of all or majority of workmen is involved in it.

a. AIMS AND OBJECTIVES

The researcher tends to bring to light, using research and reports to analyse the “Industry and
Industrial Dispute”.

b. RESEARCH METHODOLOGY
The researcher will be relying on Doctrinal method of research to complete the project.

c. HYPOTHESIS
d. The researcher tends to hypothesise that the Industrial Dispute Act has effectively and
efficiently worked and has successfully provided redressal to industry and industrial
disputes.
 e. SOURCES OF DATA
The researcher will be relying on both primary and secondary sources to complete the
project.

1. Primary Sources: Acts

2. Secondary Sources: Books, newspapers, journals, cases and websites.

f. LIMITATION
There is a time limitation for the researcher to finish the research.
The researcher is limited to his own self for the research.

g. MODE OF CITATION
The researcher has used blue book mode of citation for the purpose of citation in his research.

I. GROWTH OF INDUSTRIAL DISPUTES LEGISLATION

The law relating to the investigation and settlement of industrial disputes is known as
‘Industrial Law’ or ‘Labour Law’. In India, the terms ‘industrial law’ and ‘labour law’ are
often used interchangeably. They cover not only settlement of industrial disputes but also
state intervention for social control through law to directly protect the claims of workers --- to
wages, bonus, retirement benefits such as gratuity, provident fund and pension schemes,
social security measures such as workmen’s compensation, insurance, maternity benefits.
Therefore, the core of the labour law relates to problems in dealing with the conflict between
industrial employers and employees over employment and social security.

Industrial Disputes legislation in India started with the enactment of the Trade Disputes Act,
1929, to regulate the settlement of labour management disputes. It provided for the
establishment of courts of enquiry and boards of conciliation, for investigation and settling of
trade disputes. This act prohibited strikes and lockouts without notice to public utility
services.
II. INDUSTRY’ UNDER THE INDUSTRIAL DISPUTES ACT

Section 2(j) of the Industrial Disputes Act, 1947 defines the term ‘industry’ “Industry” means
any business, trade, undertaking, manufacture or calling of employers and includes any
calling, service, employment, handicraft or industrial occupation or avocation of workmen. It
is to be mentioned here that according to the phraseology of this definition one can easily
brand any business activity or trade as an industry in order to attract the provisions of the
Industrial Disputes Act, 1947. Normally speaking by industry it is meant production of
goods, and wealth and with the cooperation of labour and capital, but it is not so under this
Act.

This definition is in two parts. The first says that industry means any business, trade,
undertaking, manufacture or calling of employers and the second part provides that it
includes any calling, service, employment, handicraft or industrial occupation or avocation of
workmen. “If the activity can be described as an industry with reference to the occupation of
the employers, the ambit of industry, under the force of the second part takes in the different
kinds of activities of employees mentioned in the second part. But the second part standing
alone cannot define industry. By the inclusive part of the definition the labour force
employed in any industry is made an integral part of the industry for the purposes of
industrial dispute although industry is ordinarily something which employers create or
undertake.” However concept that “industry is ordinarily something which employers create
or undertake” is gradually yielding place to the modern concept which regards industry as a
joint venture undertaken by the employers, and workmen, an enterprise which equally
belongs to both.

Further it is not necessary to view the definition of industry under section 2(j) in two parts.
The definition read as a whole denotes collective enterprise in which employers and
employees are associated. It does not consist either by employers alone or employees alone.
An industry exists only when there is relationship employers and employees, the former
engaged in business, trade, undertaking, manufacture or calling of employees and the latter
engaged in any calling, service, employment, handicraft or industrial occupation or
avocation. There must, therefore, be an enterprise in which the employers follow their
avocations as detailed in the definition and employ workmen.
Thus, a basic requirement of ‘industry’ is that the employers must be ‘carrying on any
business, trade, undertaking, manufacture or calling of employers.’ There is not much
difficulty in ascertaining the meaning of the words business, trade, manufacture, or calling of
employers in order to determine whether a particular activity carried on with the co-operation
of employer and employees is an industry or not but the difficulties have cropped up in
defining the word ‘undertaking’.

“Undertaking” means anything undertaken, any business, work or project which one engages
in or attempts, or an enterprise. It is a term of very wide denotation. But all decisions of the
Supreme Court are agreed that an undertaking to be within the definition in section 2(j) must
be read subject to a limitation, namely, that it must be analogous to trade or business. Some
working principles have been evolved by the Supreme Court in a number of decisions which
furnish guidance in determining what the attributes are or characteristics which would
indicate that an undertaking is analogous to trade or business. First of these principles was
stated by Gajendragadkar, J. in Hospital Mazdoor Sabha case as follows:

“As a working principle it may be stated that an activity systematically or habitually

undertaken for the production or distribution of goods or for the rendering of material
services to the community at large or a part of such community with the help of employees is
an undertaking. Such an activity generally involves the co-operation of the employer and the
employees; and its object is the satisfaction of material human needs. It must be organized or
arranged in a manner in which trade or business is generally organized or arranged. It must
not be casual, nor must it be neither for one’s self nor for pleasure. Thus the manner in which
the activity in question is organized or arranged, the condition of the co-operation between
the employer and the employee necessary for its success and its object to render material
service to the community can be regarded as some of the features which are distinctive of
activities to which section 2(j) applies.”

TRIPLE TEST LAID DOWN IN BANGALORE WATER SUPPLY CASE

In Bangalore Water Supply vs. A. Rajappa a seven judge’s bench of the Supreme Court
exhaustively considered the scope of industry and laid down the following test which has
practically reiterated the test laid down in Hospital Mazdoor Sabha case.
Triple Test: where there is systematic activity, organized by cooperation between employer
and employee for the production and/or distribution of goods and services calculated to
satisfy human wants and wishes, prima facie, there is an “industry” in that enterprise. This is
known as triple test. The following points were also emphasized in the case:

1. Industry does not include spiritual or religious services or services geared to celestial bliss,
example, making, on a large scale, Prasad or food. It includes material services and things.

2. Absence of profit motive or gainful objective is irrelevant, be the venture in the public,
joint, private or other sector.

3. The true focus is functional and the decisive test is the nature of the activity with special
emphasis on the employer-employee relations.

4. If the organisation is a trade or business it does not cease to be one because of

philanthropy, animating the undertaking.

Therefore the consequences of the decision in this case are that professions, clubs,
educational institutions cooperatives, research institutes, charitable projects and other kindred
adventures, if they fulfill the triple test stated above cannot be exempted from the scope of
section 2(j) of the act.

III. POSITION OF DIFFERENT BODIES WITH RESPECT TO

INDUSTRIAL DISPUTES ACT

1) IS HOSPITAL AN INDUSTRY?

The question whether hospital is an industry or not has come for determination by the
Supreme Court on a number of occasions and the uncertainty has been allowed to persist
because ofconflicting judicial decisions right from Hospital Mazdoor Sabha case to the
Bangalore Water Supply vs. A. Rajappa.

In State of Bombay vs. Hospital Mazdoor Sabha case, the Hospital Mazdoor Sabha was a
registered trade union of the employees of hospitals in the State of Bombay. The services of
two of its members were terminated by way of retrenchment by the government and the
union claimed their reinstatement through a writ petition. It was urged by the state that the
writ application was misconceived because hospitals did not constitute an industry. The
group of hospitals were run by the state for giving medical relief to citizens and imparting
medical education. The Supreme Court held the group of hospitals to be an industry and
observed as follows:

1. The State is carrying on an undertaking under section 2(j) when it runs a group of hospitals
for purpose of giving medical relief to the citizens and for helping impart medical education.

2. An activity systematically or habitually undertaken for the production or distribution of

goods or for the rendering of material services to the community at large or a part of such
community with the help of employees is an undertaking.

3. It is the character of the activity in question which attracts the provisions of section 2(j).
Who conducts the activity and whether it is conducted for profit or not makes a material
difference.

4. The conventional meaning attributed to the words, “trade and business” has lost some of
its validity for the purposes of industrial adjudication. It would be erroneous to attach undue
importance to attributes associated with business or trade in the popular mind in days gone
by.

Applying the above principles an Ayurvedic College of Pharmacy, manufacturing medicines

for sale and for benefit of students of the college besides other activities of the college was
held to be an industry. Hospital Mazdoor Sabha case was overruled by Safdarjung Hospital
case. But Safdarjung Hospital and Dhanrajgiri Hospital cases have now been overruled in
Bangalore Water Supply vs. A. Rajappa and Hospital Mazdoor Sabha case has been
rehabilitated. A group of hospitals at Bikaner attached to the Sardar Patel Medical College
was held to be an industry and it was observed that the fact that hospitals are attached to the
educational institution would not bring any material change in their character. In Keraleeya
Ayurveda Samajam Hospital and Nursing Home, Shoranpur vs. Workmen ; the Ayurvedic
institution was registered under the Registration of Societies Act. It was running a hospital,
nursing home and an Ayurvedic School. It was held to be an industry for the following
reasons: It was engaging employees in its different departments; the institution where
Ayurvedic medicines were prepared was registered as a factory under the Factories Act; for
services, rendered by way of treatment, fee was charged from citizens, and the establishment
was organized in a manner in which trade or business was undertaken.
Thus on the analysis of the entire case law up to Bangalore Water Supply case on the subject
it can be said that such hospitals as are run by the Government as part of its sovereign
functions with the sole object of rendering free service to the patients are not industry. But all
other hospitals, both public and private; whether charitable or commercial would be industry
if they fulfill the triple test laid down in Bangalore Water Supply case.

2) EDUCATIONAL INSTITUTIONS

In University of Delhi vs. Ram Nath ; the respondent Ram Nath was employed as driver by
University College for Women. Mr. AsgarMashih was initially employed as driver by Delhi
University but was later transferred to the University College for women in 1949. The
University of Delhi found that running buses for transporting the girl students of women’s
college has resulted in looses and it therefore decided to discontinue that facility and
consequentially the services of the above two drivers were terminated. The above termination
was challenged on the ground that the drivers were workmen and the termination of their
service amounted to retrenchment. They demanded payment of retrenchment compensation
under section 25-F of the Act by filing petitions before the Industrial Tribunal. The tribunal
decided the matter in favour of the drivers and hence the University of Delhi challenged the
validity of the award on the ground that activity carried on by the university is not industry. It
was observed by the Supreme Court that work of imparting education was more a mission
and a vocation than a profession or trade or business and therefore University is not an
industry. But this decision has been overrule by the Supreme Court in Bangalore Water
Supply case in view of triple test laid down in that case. It was held that even a university
would be an industry although its employees would not be workmen under Section 2(s) of the
Act.

In Ahmedabad Textile Industry’s Research Association vs. State of Bombay an association

was formed for founding a scientific research institute. The institute was to carry on research
in connection with the textile and other allied trades to increase efficiency. The Supreme
Court held that “though the association was established for the purpose of research, it main
object was the benefit of the members of the association, the association is organized, and
arranged in the manner in which a trade or business is generally organized; it postulates co-
operation between employers and employees; moreover the personnel who carry on the
research have no right in the result of the research. For these reasons the association was held
to be an “industry”. Since University of Delhi vs. Ram Nath, which has been overruled by the
Supreme Court in Bangalore Water Supply case, the recent position is that the educational
institutions including the university are industry in a limited sense. Now those employees of
educational institutions who are covered by the definition of workman under section 2(s) of
the Industrial Dispute Act, 1947 will be treated as workman of an industry.

3) IS GOVERNMENT DEPARTMENT AN INDUSTRY?

In State of Rajasthan vs. GaneshiLal , the labour court had held the law department of
Government is an industry. This view has been upheld by the single judge and division bench
of the High Court. It was challenged by the state before the Supreme Court. It was held that
the Law Department of Government could not be considered as an industry. Labour Court
and High Court have not indicated as to how the Law department is an industry. They merely
stated in some cases certain departments have been held to be covered by the expression
industry in some decisions. It was also pointed out that a decision is a precedent on its own
facts.

4) DO CLUBS FALL UNDER INDUSTRY?

Clubs or self-service institutions or non-proprietary member’s club will be industry provided
they fulfil the triple test laid down in Bangalore Water Supply Case. In Cricket Club of India
vs. Bombay Labour Union , the question was whether the Cricket Club of India, Bombay
which was a member club and not a proprietary club, although it was incorporated as a
company under the Companies Act was a industry or not. The club had membership of about
4800 and was employing 397 employees. It was held that the club was a self-service
institution and not an industry and “it was wrong to equate the catering facilities provided by
the club to its members or their guests with a hotel. The catering facility also was in the
nature of self-service by the club to it s members. This case has now been overruled.

Madras Gymkhana Club Employees Union vs. Management , is another case on this point.
This was a member’s club and not a proprietary club with a membership of about 1200. Its
object was to provide a venue for sports and games and facilities for recreation and
entertainment. It was running a catering department which provided food and refreshment not
only generally bur also on a special occasion. It was held that the club was a member’s self-
serving institution and not an industry. No doubt that the material needs or wants of a section
of the community were catered but that was not enough as it was not done as part of trade or
business or as an undertaking analogous to trade or business. This case has also been
overruled.

Both Cricket Club of India and Madras Gymkhana are now ‘industry’ as they fulfil the triple
test as laid in Bangalore Water Supply case. Both are systematically organized with the co-
operation of employer and employee for distribution of service to satisfy human wishes.

IV. INDUSTRIAL DISPUTE

According to Sec. 2(k) of the Industrial Dispute Act, 1947, “Industrial dispute means any
dispute or difference between employers and employers or between employers and workmen
or between workmen and workmen, which is connected with the employment or non-
employment or the terms of employment or with the conditions of labour of any person”
Industrial disputes are of symptoms of industrial unrest in the same way that boils are
symptoms of a disordered body.

Whenever an industrial dispute occurs, both management and workers try to pressurize each
other. The management may resort to lock-out and the workers may resort to strike, gherao,
picketing, etc.

Strike:

Strike is a very powerful weapon used by a trade union to get its demands accepted. It means
quitting work by a group of workers for the purpose of bringing pressure on their employer to
accept their demands. According to Industrial Disputes Act, 1947, “Strike means a cessation
of work by a body of persons employed in any industry acting in combination, or a concerted
refusal or a refusal under a common understanding of any number of persons who are or have
been so employed, to continue to work or to accept employment.”

There are many types of strikes. A few of them are discussed below:

(i) Economic Strike:

Under this type of strike, members of the trade union stop work to enforce their economic
demands such as wages, bonus, and other conditions of work.

(ii) Sympathetic Strike:

The members of a union collectively stop work to support or express their sympathy with the
members of other unions who are on strike in the other undertakings.

(iii) General Strike:

It means a strike by members of all or most of the unions in a region or an industry. It may be
a strike of all the workers in a particular region of industry to force demands common to all
the workers. It may also be an extension of the sympathetic strike to express general protest
by the workers.

(iv) Sit Down Strike:

When workers do not leave their place of work, but stop work, they are said to be on sit down
or stay in strike. It is also known as tools down or pen down strike. The workers remain at
their work-place and also keep their control over the work facilities.

(v) Slow Down Strike:

Employees remain on their jobs under this type of strike. They do not stop work, but restrict
the rate of output in an organised manner. They adopt go- slow tactics to put pressure on the
employers.

Lock-out:

Lock-out is declared by the employers to put pressure on their workers. It is an act on the part
of the employers to close down the place of work until the workers agree to resume the work
on the terms and conditions specified by the employers.
The Industrial Disputes Act, 1947 has defined lock-out as closing of a place of employment
or the suspension of work or the refusal by an employer to continue to employ any number of
persons employed by him. Lock-outs are declared to curb the activities of militant workers.
Generally, lock-out is declared 25 a trial of strength between the management and its
employees.

Gherao:

It is a Hindi word which means to surround. The term ‘Gherao’ denotes a collective action
initiated by a group of workers under which members of the management of an industrial
establishment are prohibited from leaving the business or residential premises by the workers
who block their exit through human barricade.

A human barricade is created in the form of a ring or a circle at the centre of which the
persons concerned virtually remain prisoners of the persons who resort to gherao. Gheraos
are quite common in India these days. Gheraos are resorted to not only in industrial
organisations, but also in educational and other institutions. The persons who are gheraoed
are not allowed to more nor do any work.

Gheraos have been criticised legally and morally. Legally gheraos amount to imposing
wrongful restraints on the freedom of some persons to move. That is why, courts have held it
as an illegal action. Gheraos tend to inflict physical duress on the persons affected. They also
create law and order problem. Morally, to gherao a person to press him to agree to certain
demands is unjustified because it amounts to getting consent under duress and pressure. A
person who is gheraoed is subjected to humiliation.

Moreover, a person who has made a promise under gherao is justified in going back over the
word after that. In short, as pointed out by a National Commission on Labour, gherao cannot
be treated as a form of industrial protest because it involves physical coercion rather than
economic pressure.

Picketing:

When workers are dissuaded from reporting for work by stationing certain men at the factory
gates, such a step is known as picketing. If picketing does not involve any violence, it is
perfectly legal. It is basically a method of drawing the attention of public towards the fact
there is a dispute between the management and the workers.

Causes of Industrial Disputes:

We can classify the causes of industrial disputes into two broad groups:

(i) Economic causes, and

(ii) Non-economic causes.

Economic causes include:

(i) Wages,

(ii) Bonus,

(iii) Dearness allowance,

(iv) Conditions of work and employment,

(v) Working hours,

(vi) Leave and holidays with pay, and

(vii) Unjust dismissals or retrenchments.

Non-economic causes include:

(i) Recognition of trade unions,

(ii) Victimisation of workers,

(iii) Ill-treatment by supervisory staff,

(iv) Sympathetic strikes,

(v) Political causes, etc.

V. Industrial Dispute Settlement Machineries for Settling Industrial
Disputes in India

Some of the major industrial dispute settlement machinery are as follows:

1. Conciliation 2. Court of Inquiry 3. Voluntary Arbitration 4. Adjudication.

This machinery has been provided under the Industrial Disputes Act, 1947. It, in fact,
provides a legalistic way of setting the disputes. As said above, the goal of preventive
machinery is to create an environment where the disputes do not arise at all.

Even then if any differences arise, the judicial machinery has been provided to settle them
lest they should result into work stoppages. In this sense, the nature of this machinery is
curative for it aims at curing the aliments.

This machinery comprises following organs:

1. Conciliation

2. Court of enquiry

3. Voluntary arbitration

4. Adjudication (Compulsory arbitration).

1. Conciliation:
Conciliation, is a form of mediation. Mediation is the act of making active effort to bring two
conflicting parties to compromise. Mediation, however, differs from conciliation in that
whereas conciliator plays only a passive and indirect role, and the scope of his functions is
provided under the law, the mediator takes active part and the scope of his activities are not
subject to any statutory provisions.

Conciliation is the “practice by which the services of a neutral party are used in a dispute as a
means of helping the disputing parties to reduce the extent of their differences and to arrive at
an amicable settlement of agreed solution.”

The Industrial Disputes Act, 1947 provides for conciliation, and can be utilised either by
appointing conciliation officers (permanently or for a limited period) or by constituting a
board of conciliation. This conciliation machinery can take a note of a dispute or apprehend
dispute either on its own or when approached by either party.
With a view to expediting conciliation proceeding, time-limits have been prescribed—14
days in the case of conciliation officers and two months in the case of a board of conciliation,
settlement arrived at in the course of conciliation is binding for such period as may be agreed
upon between the parties or for a period of 6 months and with continue to be binding until
revoked by either party. The Act prohibits strike and lock-out during the pendency of
conciliation proceedings before a Board and for seven days after the conclusion of such
proceedings.

Conciliation Officer:

The law provides for the appointment of Conciliation Officer by the Government to
conciliate between the parties to the industrial dispute. The Conciliation Officer is given the
powers of a civil court, whereby he is authorised to call the witness the parties on oath. It
should be remembered, however, whereas civil court cannot go beyond interpreting the laws,
the conciliation officer can go behind the facts and make judgment which will be binding
upon the parties.

On receiving information about a dispute, the conciliation officer should give formal
intimation in writing to the parties concerned of his intention to commence conciliation
proceedings from a specified date. He should then start doing all such things as he thinks fit
for the purpose of persuading the parties to come to fair and amicable settlement of the
dispute.

Conciliation is an art where the skill, tact, imagination and even personal influence of the
conciliation officer affect his success. The Industrial Disputes Act, therefore, does not
prescribe any procedure to the followed by him.

The conciliation officer is required to submit his report to the appropriate government along
with the copy of the settlement arrived at in relation to the dispute or in case conciliation has
failed, he has to send a detailed report giving out the reasons for failure of conciliation.

The report in either case must be submitted within 14 days of the commencement of
conciliation proceedings or earlier. But the time for submission of the report may be extended
by an agreement in writing of all the parties to the dispute subject to the approval of the
conciliation officer.

If an agreement is reached (called the memorandum of settlement), it remains binding for

such period as is agreed upon by the parties, and if no such period is agreed upon, for a
period of six months from the date on which the memorandum of settlement is signed by the
parties to the dispute, and continues to be binding on the parties after the expiry of the period
aforesaid, until the expiry of two months from the date on which a notice in writing of an
intention to terminate the settlement is given by one of the party or parties to the settlement.

Board of Conciliation:

In case Conciliation Officer fails to resolve the differences between the parties, the
government has the discretion to appoint a Board of Conciliation. The Board is tripartite and
ad hoc body. It consists of a chairman and two or four other members.

The chairman is to be an independent person and other members are nominated in equal
number by the parties to the dispute. Conciliation proceedings before a Board are similar to
those that take place before the Conciliation Officer. The Government has yet another option
of referring the dispute to the Court of Inquiry instead of the Board of Conciliation.

The machinery of the Board is set in motion when a dispute is referred to it. In other words,
the Board does not hold the conciliation proceedings of its own accord. On the dispute being
referred to the Board, it is the duty of the Board to do all things as it thinks fit for the purpose
of inducing the parties to come to a fair and amicable settlement. The Board must submit its
report to the government within two months of the date on which the dispute was referred to
it. This period can be further extended by the government by two months.

2. Court of Inquiry:
In case of the failure of the conciliation proceedings to settle a dispute, the government can
appoint a Court of Inquiry to enquire into any matter connected with or relevant to industrial
dispute. The court is expected to submit its report within six months. The court of enquiry
may consist of one or more persons to be decided by the appropriate government.

The court of enquiry is required to submit its report within a period of six months from the
commencement of enquiry. This report is subsequently published by the government within
30 days of its receipt. Unlike during the period of conciliation, workers’ right to strike,
employers’ right to lockout, and employers’ right to dismiss workmen, etc. remain unaffected
during the proceedings in a court to enquiry.

A court of enquiry is different from a Board of Conciliation. The former aims at inquiring
into and revealing the causes of an industrial dispute. On the other hand, the latter’s basic
objective is to promote the settlement of an industrial dispute. Thus, a court of enquiry is
primarily fact-finding machinery.

3. Voluntary Arbitration:
On failure of conciliation proceedings, the conciliation officer many persuade the parties to
refer the dispute to a voluntary arbitrator. Voluntary arbitration refers to getting the disputes
settled through an independent person chosen by the parties involved mutually and
voluntarily.

In other words, arbitration offers an opportunity for a solution of the dispute through an
arbitrator jointly appointed by the parties to the dispute. The process of arbitration saves time
and money of both the parties which is usually wasted in case of adjudication.

Voluntary arbitration became popular as a method a settling differences between workers and
management with the advocacy of Mahatma Gandhi, who had applied it very successfully in
the Textile industry of Ahmedabad. However, voluntary arbitration was lent legal identity
only in 1956 when Industrial Disputes Act, 1947 was amended to include a provision relating
to it.

The provision for voluntary arbitration was made because of the lengthy legal proceedings
and formalities and resulting delays involved in adjudication. It may, however, be noted that
arbitrator is not vested with any judicial powers.

He derives his powers to settle the dispute from the agreement that parties have made
between themselves regarding the reference of dispute to the arbitrator. The arbitrator should
submit his award to the government. The government will then publish it within 30 days of
such submission. The award would become enforceable on the expiry of 30 days of its
publication.

Voluntary arbitration is one of the democratic ways for setting industrial disputes. It is the
best method for resolving industrial conflicts and is a close’ supplement to collective
bargaining. It not only provides a voluntary method of settling industrial disputes, but is also
a quicker way of settling them.

It is based on the notion of self-government in industrial relations. Furthermore, it helps to

curtail the protracted proceedings attendant on adjudication, connotes a healthy attitude and a
developed outlook; assists in strengthening the trade union movement and contributes for
building up sound and cordial industrial relations.
4. Adjudication:
The ultimate remedy for the settlement of an industrial dispute is its reference to adjudication
by labour court or tribunals when conciliation machinery fails to bring about a settlement.
Adjudication consists of settling disputes through intervention by the third party appointed by
the government. The law provides the adjudication to be conducted by the Labour Court,
Industrial Tribunal of National Tribunal.

A dispute can be referred to adjudication if hot the employer and the recognised union agree
to do so. A dispute can also be referred to adjudication by the Government even if there is no
consent of the parties in which case it is called ‘compulsory adjudication’. As mentioned
above, the dispute can be referred to three types of tribunals depending on the nature and
facts of dispute in questions.

These include:

(a) Labour courts,

(b) Industrial tribunals, and

(c) National tribunals.

The procedure, powers, and provisions regarding commencement of award and period of
operation of award of these three bodies are similar. The first two bodies can be set up either
by State or Central Government but the national tribunal can be constituted by the Central
Government only, when it thinks that the adjudication of a dispute is of national importance.
These three bodies are into hierarchical in nature. It is the Government’s prerogative to refer
a dispute to any of these bodies depending on the nature of dispute.

(а) Labour Court:

A labour court consists of one person only, who is normally a sitting or an ex-judge of a High
Court. It may be constituted by the appropriate Government for adjudication of disputes
which are mentioned in the second schedule of the Act.

The issues referred to a labour court may include:

(i)The propriety or legality of an order passed by an employer under the Standing Orders.

(ii) The application and interpretation of Standing Orders.

(iii) Discharge and dismissal of workmen and grant of relief to them.

(iv) Withdrawal of any statutory concession or privilege.

(v) Illegality or otherwise of any strike or lockout.

(vi) All matters not specified in the third schedule of Industrial Disputes Act, 1947. (It deals
with the jurisdiction of Industrial Tribunals).

(b) Industrial Tribunal:

Like a labour court, an industrial tribunal is also a one-man body. The matters which fall
within the jurisdiction of industrial tribunals are as mentioned in the second schedule or the
third schedule of the Act. Obviously, industrial tribunals have wider jurisdiction than the
labour courts.

Moreover an industrial tribunal, in addition to the presiding officer, can have two assessors to
advise him in the proceedings; the appropriate Government is empowered to appoint the
assessors.

The Industrial Tribunal may be referred the following issues:

1. Wages including the period and mode of payment.

2. Compensatory and other allowances.

3. Hours of work and rest intervals.

4. Leave with wages and holidays.

5. Bonus, profit sharing, provident fund and gratuity.

(c) National Tribunal:

The Central Government may constitute a national tribunal for adjudication of disputes as
mentioned in the second and third schedules of the Act or any other matter not mentioned
therein provided in its opinion the industrial dispute involves “questions of national
importance” or “the industrial dispute is of such a nature that undertakings established in
more than one state are likely to be affected by such a dispute”.

The Central Government may appoint two assessors to assist the national tribunal. The award
of the tribunal is to be submitted to the Central Government which has the power to modify
or reject it if it considers it necessary in public interest.
It should be noted that every award of a Labour Court, Industrial Tribunal or National
Tribunal must be published by the appropriate Government within 30 days from the date of
its receipt. Unless declared otherwise by the appropriate government, every award shall come
into force on the expiry of 30 days from the date of its publication and shall remain in
operation for a period of one year thereafter.
V. CONCLUSION AND SUGGESTION

The Industrial Act, 1947, which provides the legal framework for the government’s
intervention in industrial disputes through conciliation and adjudication , has not gone
undergone any major changes in this regard, despite the demands of the labour and
recommendations of various commission and committees for a through reform of the Act
with a view to shift the emphasis on favour of collective bargaining.
The following measures should be taken to achieve good industrial relations:

1. Progressive Management:

There should be progressive outlook of the management of each industrial enterprise. It

should be conscious of its obligations and responsibilities to the owners of the business, the
employees, the consumers and the nation. The management must recognise the rights of
workers to organise unions to protect their economic and social interests.

The management should follow a proactive approach, i.e., it should anticipate problems and
take timely steps to minimise these problems. Challenges must be anticipated before they
arise otherwise reactive actions will compound them and cause more discontent among the
workers.

2. Strong and Stable Union:

A strong and stable union in each industrial enterprise is essential for good industrial
relations. The employers can easily ignore a weak union on the plea that it hardly represents
the workers. The agreement with such a union will hardly be honoured by a large section of
workforce. Therefore, there must be a strong and stable union in every enterprise to represent
the majority of workers and negotiate with the management about the terms and conditions of
service.

3.Atmosphere of Mutual Trust:

Both management and labour should help in the development of an atmosphere of mutual
cooperation, confidence, and respect. Management should adopt a progressive outlook, and
should recognise the right of workers.
Similarly, labour unions should persuade their members to work for the common objectives
of the organisation. Both the management and the unions should have faith in collective
bargaining and other peaceful methods of settling industrial disputes.

4. Mutual Accommodation:

The right of collective bargaining of the trade unions must be recognised by the employers.
Collective bargaining is the cornerstone of industrial relations. In any organisation, there
must be a great emphasis on mutual accommodation rather than conflict or uncompromising
attitude. Conflicting attitude does not lead to amicable labour relations; it may foster union
militancy as the union reacts by engaging in pressure tactics. The approach must be of mutual
“give and take” rather the “take or leave”.

5. Sincere Implementation of Agreements:

The management should sincerely implement the settlements reached with the trade unions.
The agreement between the management and the unions should be enforced both in letter and
spirit.

6. Workers’ Participation in Management:

The participation of workers in the management of the industrial unit should be encouraged
by making effective use of works committees, joint consultation and other methods. This will
improve communication between managers and workers, increase productivity and lead to
greater effectiveness.

7. Sound Personnel Policies:

Personnel policies should be formulated in consultation with the workers and their
representatives if they are to be implemented effectively. The policies should be clearly stated
so that there is no confusion in the mind of anybody. The implementation of the policies
should be uniform throughout the organisation to ensure fair treatment to each worker.

8. Government’s Role:

The Government should play an active role for promoting industrial peace. It should make
law for the compulsory recognition of a representative union in each industrial unit. It should
intervene to settle disputes if the management and the workers are unable to settle their
disputes. This will restore industrial peace.
VI. BIBLIOGRAPHY

Lists of websites referred

 www.manupatra.com

Lists of books referred

 Labour and Industrial Law; Singh Avatar (Dr.) & Kaur Harpreet: 2ND Edition, 2008,
LexisNexis Butterworths Wadhwa