JAMIA MILIA ISLAMIA

FACULTY OF LAW

LABOUR LAW-I

MECHANISM FOR SETTLEMENT OF INDUSTRIAL DISPUTE

SUBMITTED TO SUBMITTED BY

PROF.NUZHAT PRAVEEN KHAN MOHD GULAM GAUS

ROLL NO – 38

B.A. LL. B. (Hons.), Sem-V

Student ID - 20185481
ACKNOWLEDGEMENT

I would like to acknowledge the beneficence of Prof.NUZHAT PRAVEEN KHAN in his

guidance throughout the course of completion of this project. It is for this reason I was able to
advocate this work with resources informative as much as concise.

Likewise, I would also like to take this opportunity to extend my gratitude to friends and family
for enhancing my emotional well-being and providing with financial sufficiency to ensure I
would not have to cobble for resources in my quest of penning down this work.

Lastly, may it be known that THE ALMIGHTY is the reason above all for the good deeds
found herein.
PRAISE BE TO THY LORD, ONE AND ALL, THE ALMIGHTY
TABLE OF CONTENTS

1) Introduction
2) Applicability & Scope of the Act
3) Dispute Settlement Process
4) Dispute Redressal Body
5) Works Committee
6) Grievance Redressal Committee
7) Dispute Relating to workmen employed by the Contractor
8) Board of Conciliation
9) Court of Inquiry
10) Labour Court
11) Industrial Tribunal
12) National Tribunal
13) Conclusion
14) Bibliography
INTRODUCTION

The main objective of the Act, as pointed out in the preamble is “ to make provision of the
investigation and settlement of industrial dispute”. Therefore the definition of ‘industrial
dispute’ has special significance. The following elements should exist to constitute an industrial
dispute :

1) A dispute or difference between

i) Employers and employers

ii) Employers and workmen
iii) Workmen and workmen

2) The dispute and difference should be connected with

i) Employment or non-employment
ii) Terms of employment
iii) Condition of labour of any person

3) The dispute may be in relation to any workman or workmen or any other person in whom
they are interested as a body

The expression “of any person” appearing in the last line of section 2(k) means that the person
may not be a workman but he may be someone in whose employment, terms of employment or
condition of labour the workmen as a class have a true and substantial interest. 1 Industrial
dispute is not restricted to dispute between employer and a recognised majority union. It also
means a difference between employer and workmen including a minority union.2

The definition of industrial dispute does not refer to a industry. But on the grammar of the
expression it must be necessarily be a dispute in an industry. Moreover, the expression the
‘employer’ and ‘workmen’ used in the definition of industrial dispute carry the requirement of
‘industry’ in that definition by virtue of their definition. For coming into existence of an
industrial a written demand is not a sine qua non, unless of course in the case of public utility

1
Workmen of Dimakuchi tea estate v. Management of Dimakuchi tea estate, AIR 1958 SC 353
2
Tata Chemicals v workmen Tata Chemicals, AIR 1976 SC 145
service. The very words in the definition of industrial dispute in Section 2(k) are ‘dispute and
difference’.

Regardless of the level of economic development, policies governing dispute resolution form
an essential part of the labour law framework in any nation. This is due to the fact that
complaints and conflicts are inevitable in any working relationship, and the object of policy is
aimed at providing mechanisms that address these disputes effectively and expeditiously. In
recent times the use of voluntary mechanisms such as arbitration, conciliation, and mediation
has become central to dispute resolution policy. This is because they lack the adversarial element
that ordinary litigation proceedings are characterized by and thus, have been effective in
maintaining relationships during the process of dispute resolution.

The Industrial Disputes Act,1947 is the primary legislation governing dispute resolution in
India. It was enacted to provide for the investigation and settlement of industrial disputes, to
prevent illegal strikes and lockouts, to provide relief to workmen during lay-off or after
retrenchment or wrongful dismissal. It also provides for the mechanisms of conciliation,
arbitration, and adjudication to promote measures for mutually beneficial relations between
employers and employees.

Applicability & Scope of the Act

To understand the scope of the Industrial Disputes Act, 1947 it is important to understand the
meaning and import of the terms ‘industrial dispute’ and ‘industry’ as defined in the statute.
Section 2(k) of the Act states that the former describes any dispute or difference between
employers and employees, or between employers and workmen, or amongst workmen, which is
connected with the employment or non-employment or the terms of employment or with the
conditions of employment of any person. Section 2(j) of the Act defines the latter as any
business, trade, undertaking, manufacture, or calling of employers and includes any calling,
service, employment, handicraft, or industrial occupation or avocation of workmen.

Therefore, to attract the application of the Act, a dispute would have to occur in an establishment
falling under the definition of industry and would have to involve one or more of the
stakeholders mentioned in the definition of industrial disputes. In other cases, there is no scope
for governmental interference and thus the only recourse is to approach courts or engage in
alternate dispute resolution mechanisms.
It is pertinent to note that the definition of ‘industry’ has been discussed extensively in case
laws.

In the landmark case of Banglore water supply and sewerage v. R. Rajappa,

the Supreme Court laid down a three-pronged test to ascertain whether a particular activity was
industrial in nature. If the said activity involved systematic and organized activity, cooperation
between employer and employee, and was carried out for the production of goods and services,
it would be considered industrial in nature. The elements of capital investment and profit motive
were held to be immaterial in the determination of the above question. In the case of an
undertaking engaging in multiple activities, which might or might not be one of the core
activities, the Dominant Nature Test is applicable. It determines whether a specific activity of
any enterprise can be classified as industrial in nature by examining the predominant nature of
the activities conducted by the enterprise and the integrated nature of the departments.

Dispute Settlement Process

Section 10 of the Industrial Disputes Act, provides that when an industrial dispute occurs or
is apprehended, the appropriate government may:
1. refer the industrial dispute to a conciliation officer or board of
2. conciliation officers for promoting a settlement,
3. to a court of inquiry,
4. to a labor court of adjudication,
5. to an industrial tribunal for adjudication.
Therefore, theoretically, any employer or workman must write in the prescribed form to the
appropriate government, informing the appropriate government that an industrial dispute
exists. The appropriate government may then refer the dispute to conciliation, labor courts,
or tribunals. Invariably, the appropriate government is the Secretary of Labor of the state.
As a matter of practice, however, this procedure is not always strictly followed, as is evident
from the procedures outlined below.
Dispute Redressal Bodies

Industrial disputes may be broadly classified into interest disputes and rights disputes. Interest
disputes are mostly related to the determination of a revised wage level and other conditions of
employment. Whereas, rights disputes relate to the interpretation and application of existing
standards of employment and usually involve an individual worker or group of workers. The
Industrial Disputes Act, 1947 has provided for the establishment of both internal and external
mechanisms to settle industrial disputes. Internal mechanisms include bodies such as the works
committee and the grievance redressal committee.

Works Committee

Section-3 of the Act is statutorily mandated in all industrial establishments having a hundred or
more workmen. It consists of representatives of employees and workmen of an establishment.
The workmen’s representatives and employer representatives should be equal in number. The
object of the works committee is to provide for an internal forum for dispute resolution as a
precursor to litigation or external mechanisms for dispute resolution.

Grievance Redressal Committee

Section-9(c) of the Act requires the employer in every industrial establishment in which fifty or
more workmen are employed to provide for a grievance settlement authority. Every industrial
establishment consisting of twenty or more workmen shall have one or more grievance redressal
committees that shall be composed in equal proportion by members of management and the
workmen. The total number of members in the committee shall not exceed six and shall include
one female member if feasible. The Grievance Redressal Committee shall complete its
proceedings within forty-five days after the receipt of a written complaint by an aggrieved party.
Any workman dissatisfied by the decision of the committee may prefer to appeal against it. The
employer is then obliged to consider the appeal and dispose of the matter within one month from
the date of its institution and provide a copy of the decision to the aggrieved employee.
The Industrial Disputes Act, 1947 provides for the following external mechanisms to resolve
industrial disputes.

Dispute relating to workmen employed by contractor

The Standard Vaccum Company Case3 is the leading case on the point. The Standard Vaccum
Company used to give annual contract for maintenance of the plant and premises. In the first
year 67 persons were employed while the next year 40 workmen were employed. The contractor
men were not entitled to any priviledges and there is no security of employment. The workmen
raised an industrial dispute demanding the abolition of contract system. In this case Supreme
Court held that the dispute to a industrial dispute because there was a real and substantial dispute
between the company and the workmen on the question of employment of contract labour for
the work of the company. The fact that the workmen were employed by the contractor would
not alter the nature of the dispute so long as the party raising the dispute has a direct interest in
the subject matter of the dispute

Board of Conciliation & Conciliation Officers

Section 4 and Section 5 of the Act refer to conciliation as a mechanism for redressal of industrial
disputes. The Government appoints Conciliation Officers by way of notification in the Official
Gazette. They can be appointed to a specific area or industry, for a fixed period of time, and are
considered to be acting in an administrative capacity. Their role is to facilitate dialogue between
the parties so as to help them reach a common understanding. The Officer must submit a report
within 14 days of the commencement of the conciliation of an issue/dispute. On the basis of the
same, the Government is empowered to either take the issue further in the form of litigation or
write to the parties.

The Conciliation Board is set up through a Gazette Notification issued by the Government to
resolve industrial disputes amicably by aiding the parties in reaching a settlement. It comprises
a Chairman and two or four members, all of whom must be impartial and must have no personal
involvement in the cases. A number of members are appointed equally for each side of a dispute
and are appointed on the recommendation of the parties. In case the parties fail to reach a
conclusion, then the government appoints the members and proceedings resume. The
Conciliation Board does not have powers to take suo moto cognizance of matters, it may only

3
Standard Vaccum Refining Company of India Ltd v. Their Workmen & another, (1960) II LLJ 233
engage in a matter when the government refers a case to it. The board must submit a report
within 2 months of the occurrence of a dispute which must be published by the government
within thirty days of receipt of the report. In circumstances wherein the dispute is still not
resolved, industrial tribunal or labour tribunal can be approached.

Court of Enquiry

This court of civil nature under Section-6 of the Act is constituted by the government by way of
notification to inquire into matters connected with or relevant to industrial disputes. Jurisdiction
of civil court barred-

In State of Haryana and others v. Bikar Singh respondent was a conducter in Haryana Roadways.
He was dismissed from service for embezzlement of Rs.200 which he collected from the
passesnger and for which he did not issue ticket. A suit was filed in Civil Court by dismissed
conductor seeking decree for declaration “that he should be deemed to be in service and the
orders regarding his dismissal passed by the department authorities be declared as null and void.
The trial court examined the case on merit without determining the jurisdiction of the Court.
The Supreme Court expressed its dismay on the absence of finding of the trial court on the issue
of jurisdiction and set aside the orders of the Civil Court and the High Court.

Labour Court

Under Section 10(c) of the Act, the appropriate government may also refer disputes to a
labor court for adjudication. Only matters covered in the Second Schedule of the Industrial
Disputes Act may be dealt with by labor courts. The schedule includes, inter alia, matters
connected with disciplinary action taken by the employer or his workmen, illegal lockouts
and strikes and interpretation of standing orders. Generally, a labor court consists of a single
person, with specified qualifications,81 who is vested with the plenary powers of a civil
court.

They have been constituted under Section 7 of the Act, consisting of only one person who is
appointed by the government to oversee the proceedings of the court. Qualification of such a
person is that they must have been/are a High Court Judge, or district judge or additional district
judge for at least 3 years or held any judicial office in India for not less than 7 years. Their
jurisdiction extends to matters specified under the Second Schedule of the Act.
In Awaz Prakashan Private Ltd v. Pramod Kumar Pujari4 respondent was a reporter in the
appellant’s newspaper. He was retrenched and he challenged his retrenchment on ground of
non-compliance of the Industrial Disputes Act,1947. The Labour Court gave its award in favour
of the respondent which was challenged before the High Court but the appeal was dismissed.
Hence this appeal has been preferred before the Supreme Court. The Supreme Court observed
that the contention of the appellant that the respondent was a working journalist and only the
Board constituted under Working Journalist and other Newspaper Employees (Condition of
Service) and Miscellaneous Provision Act,1955 had Jurisdiction and not the Labour Court under
the Industrial Disputes Act,1947 has no force.

Industrial Tribunal

They have been constituted by government notification under Section 7-A of the Act, and one
or more of its kind can be constituted. They are a quasi-judicial body; therefore, they must serve
notice upon the parties to the reference by name before making any award. Their jurisdiction
extends to matters specified in the Second or Third Schedule.

National Tribunal

This quasi-judicial body is constituted under Section 7-B to solve industrial disputes at the
national level, of national importance. Disputes of such nature are taken up at the national level,
in which one or more industries in one or more states are affected. The judge presiding this
tribunal must not be lesser in position than a High Court Judge, must be less than 65 years, and
has the same powers as other preceding tribunals, with respect to the declaration of an award.

The central government may, by notification in the official Gazette, constitute one or more
National Tribunals for the adjudication of Industrial Disputes in:

• National matters.

• Matters in which industries are more than one state, or are affected by the outcome
of the dispute.

4
(2003) III LLJ 256 (SC)
• The duty of the National Tribunal to hold its proceedings fast and submit its report
to the central government within the specified time given.
CONCLUSION

While the Act provides for both internal and external bodies for dispute resolution and
prevention of illegal strikes, lockouts and mitigates the use of unfair labour practices, from a
compliance perspective it is important to have robust internal mechanisms that address disputes.
External mechanisms generally require a great deal of effort, expense and time spent which
generally leads to a soured relationship between employer and employee. Thus, having internal
mechanisms is preferable because the likelihood of having to rely on adjudication or alternate
dispute resolution reduces thereby providing for an amicable working relationship which
ultimately leads to greater productivity.
 BIBLIOGRAPHY

Industrial Disputes Act,1947 in P.L.Malik's Industrial Law, Volume 2, Page 1986-1987, 24th
Edition,2013, Eastern Book Company 6

Causes of Industrial Disputes. http://www.naukrihub.com/industrialrelations/causes-

ofindustrial-disputes.html.

Kumar, Pradeep. Strikes in India: An Analysis. October 3, 1964. The Economic Weekly.

Industrial Disputes Act,1947 in P.L.Malik's Industrial Law, Volume 2, Page 1986-1987, 24th
Edition,2013, Eastern Book Company

Saha, Bibhas and Pan, Indranil. Industrial Disputes in India: An Empirical Analysis. Economic
and Political Weekly, Vol. 29, No. 18 (Apr. 30, 1994), pp. 1081-1087.