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LABOUR AND INDUSTRIAL LAWS

TOPIC: AUTHORITIES AND SETTLEMENT FOR INDUSTRIAL DISPUTES
(A project submitted as a part of curriculum of subject Labour and Industrial Disputes in the
course of B.Com. LL.B Hons.)

SUBMITTED TO: SUBMITTED BY:

DR. SHALLU AYUSHI
218/19
B.COM. LL.B
SECTION D
9TH SEMESTER
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ACKNOWLEDGEMENT

I would like to express my heartfelt regards to Ma’am Shallu, my Labour and Industrial Laws

teacher, who always gave me valuable suggestions and guidance during the completion of this

project. She has been a source of inspiration to me during the completion of my project. She

helped me remember the important details of the project that I would otherwise forget. I would

also like to extend my gratitude to the director of the department, for providing me with all the

required facilities. This project has helped me a lot in doing research and I got to learn many

new things from it about the topic and the subject. I hope this serves its purpose and is

worthwhile to the readers.

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INDEX

S. NO TOPIC PAGE

1. Introduction 4

2. Industrial Dispute Act, 1947 5

3. Mechanism of settlement disputes under the 7

industrial dispute act, 1947

4. Landmark Judgements 12

5. Bibliography 14
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INTRODUCTION

Disputes are always a drawback for any industry. A dispute arises for several reasons, the most
common being the relation between the labourers and their wages. It is the conflict of interests
between two parties that give rise to a dispute. The parties involved in an industrial dispute are
the employer and the employee. Traditionally speaking, the employees have always been
placed on the lower ladder of the society by the employer presenting a dominating self-being
in the position of authority. This inequality that has been existing in the industrial domain for
a long time now requires settlement on the part of both the employer and the employee having
an equal opportunity to present their wants.

An employee has the right to be provided with wages depending on the amount of work he
delivers. It is the responsibility on the part of the employer to provide his employees with a
reasonable amount of wages along with other conditions that are necessary for a person to earn
his livelihood. The founder of the Australian system of arbitration and conciliation, Mr Justice
Higgins had correctly pointed out that the conflict between wage earners and the profit creators
will always be existing with us in our everyday life. It is therefore always necessary to settle
the disputes arising between two parties under the Industrial Dispute Act,1947 in order to
prevent the industry from facing loss or sufferings.

All disputes arising in an industry cannot be resolved in the same manner and therefore comes
the concept of the mechanism of settling disputes under the Industrial Dispute Act,1947. Some
of the mechanisms that are commonly utilized are adjudication, conciliation, an inquiry by the
court of law etc. These mechanisms help in settling the disputes by investigating the matter and
in to successfully carry out the process, available mechanisms are utilized.

It is to be remembered that industrial dispute is different from any other kind of dispute on
grounds that it is something more than just getting compensated for the loss suffered. Rather it
is a constant fight against oppression on the part of those who are employed for providing
welfare among other sections of the society and not being subjected to similar kind of welfare
due to the authoritative rule on the part of the employer. It is correct that the disputes settlement
mechanisms can provide relief for a temporary period only, these settlement mechanisms, if
used effectively, can provide long term services also. Therefore, what is necessary is the correct
application of the mechanisms available for settling disputes.
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INDUSTRIAL DISPUTES ACT, 1947

The Industrial Dispute Act,1947 is an Act that was formulated to guarantee fair and equal terms
between the employer and the employee. The act aims to settle the disputes that arise through
negotiations. By doing so it promotes industrial harmony and peace. The Industrial Dispute
Act,1947 regulates the labour law in India as far as the same relates to trade
unions. Section2(k) of the Act,1947 lays down the meaning of an industrial dispute. The parties
that can be involved in an industrial dispute includes employers and workmen, two employees,
employer and workmen. The provision also lays down the grounds that need to be abided by
in order to term a dispute as an industrial dispute. These grounds are provided hereunder:

1. The mere difference of opinion will not constitute an industrial dispute instead of a
factum of dispute will.

2. The date of commencement of the dispute should be provided in writing by the union
otherwise the same reference will be declared invalid. It was in the case of Union
of Journalists v. The Hindu where the court observed that for a dispute to be
claimed under industrial dispute, the same should be existing or apprehending on
the date that has been referred. Therefore, what the court meant by these
observations is that if the demand by the employees were not brought before the
management under which they work, and similar demands were raised during the
time of the proceedings, the dispute will still be considered as an industrial dispute
and proceed further with settlement mechanisms. Similar kind of view was made by
the court in the case of Shambhu Nath Goel v Bank of Baroda also.

3. The dispute should be such that it affects the well-being of the majority of workmen
and not a single work-man.

4. The dispute that has arisen should be in relation with an individual workman or
workmen in whom they being a body is or are interested in.
To maintain a cordial relation between the employer and the employee, the Act lays down
settlement mechanisms as well that can be of some help. The authorities on whom the Act
confers authority to carry out settlement and investigation purposes for an industrial dispute
are mentioned below:

1. Conciliation officer under Section 4 of the Act,1947

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2. Works committee under Section 3 of the Act,1947

3. Labour court under Section 7 of the Act,1947

4. Boards of conciliation under Section 5 of the Act, 1947

5. Labour Tribunal under Section 7A of the Act, 1947

6. National tribunal under Section 7B of the Act, 1947

In the case of State of Bihar v. D.N.Ganguli, the Supreme Court decided that if a dispute which
has already been settled amicably by the parties have been brought before the tribunal with an
assumption that the same will be reconsidered by the tribunal then it would be very
unreasonable to do so. As soon as the matter is settled before the tribunal, the reward as
compensation for the dispute will be provided by the tribunal itself. Further the Act
under Section 10 provides that if there arises any industrial dispute, that might be referred by
the appropriate government for adjudication to the Conciliation Board, Court of inquiry, labour
court, national tribunal or industrial tribunal. The different types of disputes that come under
the ambit of an industrial dispute are:

1. Individual disputes, under which the disputes of termination, discharge, promotion

of workmen, security measures available to the workers, retirement benefits come
in. Disputes coming under individual disputes are either legal or rights disputes by
nature. In the case of Central Provinces Transport Services Ltd., v. R.G.
Patwardhan the court opinionated that if a dispute arises between an employer and
a workman, then that cannot be termed as an industrial dispute unless the dispute is
taken up by the trade union or a collective group of workmen claiming that a legal
dispute has taken place. Therefore, in this case, the Supreme Court extended its
support towards the trade union so that an individual dispute can be treated as an
industrial dispute and settlement can be done.

2. Collective disputes are those disputes which involve a group of workmen whose
rights and interests have been contravened with by the employer. This dispute is
referred to as the most important industrial dispute which if not resolved leads to a
stoppage of work by the workers that can be detrimental for the industry as a whole.

3. Disputes of rights and interest is another kind of industrial dispute. Disputes of rights
are also referred to as legal disputes that deal with the rights of the workmen that
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are already existing. When there is a violation of the legal rights of the workers,
disputes arise regarding the same.
The Act does not provide any provision for settling disputes by means of bilateral negotiations.
If the parties fail to negotiate mutually between themselves then the only way of resolving an
industrial dispute is by adjudication on the reference of the appropriate government. Therefore
the role of voluntary arbitration is necessary on the basic grounds for the parties involved in
the dispute to resolve the same easily. If the same is not done then there are also other ways of
resolving the disputes. The best way of resolving disputes is by means of collective bargaining
which symbolises plurality of workmen working in the industry. If collective bargaining fails,
then other mechanisms of settlement involve conciliation, arbitration and voluntary arbitration.
These methods are considered to be the appropriate alternatives for collective bargaining.

MECHANISM OF SETTLEMENT DISPUTES UNDER THE

INDUSTRIAL DISPUTE ACT

Certain machinery is existing under the methods of settling industrial disputes which helps in
regulating the settlement and handling of the dispute in a just and fair manner for the parties
involved in the dispute and thereby ensure or guarantee a normalised situation under which the
employer and the employee can exist and work in a friendly manner which is required for the
growth of the industry. The common mechanisms for settlement of disputes under the Industrial
Dispute Act,1947 have been explained in detail below.

Conciliation and Mediation

One of the most familiar ways to carry out the settlement of disputes under the Industrial
Dispute Act,1947 is conciliation which is also well-known by the name of mediation. It is not
only restricted to India but this method of dispute settlement is used all across the world.
Conciliation is the procedure in which there is an involvement of a third party who provides
assistance to the parties in dispute to carry out negotiation between them. The two types of
machinery that are available for executing the conciliation functions are:

1. By the conciliation officers who work in the department of labour

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2. The Conciliation Board is a body of several members consisting of a chairman, two

to four members as the representatives of the employers and the employees. These
members are to be appointed by the government on parties recommendation.
Section 4 of the Industrial Dispute Act, 1947 lays down the function of a conciliation officer
which is to create a kindred atmosphere within the industry which will help the parties to settle
the disputes between them. This is a function with an administrative nature and not a judicial
one.

A conciliation officer is required to hold proceedings, carry out investigations regarding the
dispute in a fair manner to help the parties arrive at a settlement. They are appointed to regulate
settlement disputes for a specified area either for a temporary time period or permanently.
While Section 11 of the Industrial Dispute Act, 1947 lays down the powers vested upon a
conciliation officer, Sections 12 and 13 are meant for dealing with the duties of the conciliation
officer.

After the government agrees that there is a failure in the report, to his satisfaction he can send
the matter to the Board of Conciliation or any other adjudicating body to look after the same.
If such a step is not preferred, then the government directly communicates the matter to the
parties involved in the dispute. The usage of conciliation as a settlement dispute mechanism is
indeed effective as have been revealed by the statistical study. The parties while being a part
of the conciliation proceeding do not reveal the entire dispute matter with the thought that if
the proceedings are not effective enough to settle the dispute then the same can be tried by
other legal remedies that are available also. It is when the conciliation officers are not able to
handle the disputed matter, the matter gets passed on to the tribunals. This is also cited as a
reason for the failure of conciliation.

Voluntary arbitration

Before dealing with the concept of voluntary arbitration as a whole, it is preferred to refer them
separately for a better understanding. Arbitration means a procedure which involves a third
party in the form of a single arbitrator or a board of arbitrators who are assigned with the duty
to resolve the dispute between the parties. Voluntary symbolises self willingness and consent.
Therefore voluntary arbitration means that the parties who are involved in the dispute willfully
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agree to the decision taken by the arbitrator or the board of arbitrators without any outside
compulsion.

Section 10A of the Industrial Dispute Act, 1947 provides the provision for voluntary arbitration
which in a real-world is completely carried out by adjudication. Arbitration and adjudication
have a very thin line of difference between them. While in the former the judge is decided by
the parties involved in the dispute, whereas in the latter the judge is appointed by the State.

The origin of voluntary arbitration in India dates back to the issue of plague bonus in the
Ahmedabad Textile Mills under the leadership of the father of the nation, Mahatma Gandhi. To
make voluntary arbitration compulsory, The Trade Unions & Industrial Disputes
(Amendment) Bill, 1988 was brought in laying down restrictions on legal strikes by the
employees. According to the bill, legal strikes can be carried out by the parties only after either
of the parties has rejected the offer of arbitration that had been provided to the parties to settle
the dispute. Although several efforts have been put to effect by the Indian government,
voluntary arbitration still remains in shadows as have been reflected by the statistics.

It was in the case of Gujarat Steel Tubes Ltd. v. Gujarat Steel Tubes Mazdoor Sabha, the
apex court inform judicial legislation vested on the arbitrator the powers of a labour tribunal
for cases of discharge of workmen as a form of punishment. This provided the arbitrator with
appellate jurisdiction using which the arbitrator can oppose the decision of an employer
regarding his employees. These exceptional powers were conferred by the Supreme Court of
India on the arbitrator.

Adjudication

It is not that adjudication replaces conciliation totally but rather the matter is if conciliation
fails to settle the dispute between the parties in the industry, adjudication takes charge in
carrying out the job which the conciliation mechanism was assigned to do. It is just another
legal remedy that can be adopted if the necessity arises. The ultimate remedy for resolving an
industrial dispute is by adjudication.

Adjudication can also be termed as the compulsory settlement of the industrial dispute in
concern by labour courts, industrial tribunals, and national tribunal as provided by the Industrial
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Dispute Act,1947. The terms adjudication and arbitration have minute differences if placed in
our country.

It is on the government to decide whether to refer to the party or not before proceeding with
the adjudication mechanism. If the parties are involved by the government then that type of
adjudication will be referred to as voluntary adjudication. Whereas if the government does not
feel it to be necessary to involve the parties in the adjudication mechanism then that kind of
adjudication will be called compulsory adjudication.

Adjudication of the industrial dispute will take place by a three-tier system which will be
inclusive of the following:

1. Labour court- The Industrial Dispute Act, 1947 under Section 7 provides for the
constitution of a labour court. The appropriate government in the form of
notification in the official gazette can lead to the constitution of a labour court for
resolving the disputes in an industry. The labour court consists of one person who is
an independent judge or a judge of the High court or the District court. The judge
can also be a former judge of the labour court itself with an experience of about 5
years. The matters handled by the labour court are provided in the second schedule
of the Industrial Dispute Act, 1947 which consists of:

1. The legality in the order passed by the employer under the orders that are
standing

2. The implications of the standing orders

3. Granting of relief that should be available to the workmen in the industry

which has been dismissed from them.

4. Withdrawal of any privilege that a workman is subjected to

5. All matters other than that coming under the purview of the industrial
tribunal.
2. Industrial tribunal- The provision for the industrial tribunal is provided under
Section 7A of the Industrial Dispute Act, 1947. One or more industrial tribunals can
be set up by the government according to his desire with the courts being provided
with wider jurisdiction in comparison with the labour court. It is not to be considered
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as a permanent body but body set up for temporary purpose for hearing on an ad-
hoc basis only. As the courts are having wider jurisdiction, the issues that will be
taken into consideration by the courts will also be large in number. Broadly the
issues handled by the industrial tribunal have been listed below:

1. Wages of the employee which included the mode of payment of wages

also

2. Bonus and provident funds that are provided

3. Working hours of the employees

4. Rationalisation

5. Leaves that are granted to the employees inclusive of the wages received
and the holidays provided to them

6. Rules associated with the maintenance of discipline in the industry

among the employees.

7. Any other matter which may be considered to be heard and discussed

necessarily.
3. National tribunal- A national tribunal is formed by the Central Government by an
official gazette for adjudication of the industrial disputes that are considered to be
of national importance. Two people according to the choice of the government are
appointed to the role of an assessor in the national tribunal. If a dispute between two
parties of an industry reaches the national tribunal, then both the labour court and
the industrial tribunal loses its jurisdiction over the matter.

Court of inquiry

The remedy in the form of a court of inquiry was first provided by The Trade Disputes Act,
1929 and was followed by the Industrial Dispute Act, 1947 also under Section 6. This
mechanism of settling disputes has been out of use in the country now. As the government of
India could not figure out the benefit from this machinery in industrial dispute cases, the
machinery has been eliminated completely by The Trade Unions & Industrial Disputes
(Amendment) Bill, 1988 and is no more in use.
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LANDMARK JUDGEMENTS

In the case of Workmen of Hindustan Lever Ltd v. Hindustan Lever Ltd, the court observed
that for every industry there is a necessity to promote harmonious construction of the wants of
both the employer and the employee of an industry for the industry and the labour force to grow
and prosper in the long-term. In order to achieve this objective, the court laid down that there
is a need for compulsory adjudication for resolving industrial disputes by means of a forum
where the parties can resort for arbitration to avoid any kind of confrontation between them in
the industry. The courts have repeatedly made it clear that although a lot of powers have been
vested over an appropriate government, he cannot misuse such power in carrying out the
procedure of settlement of disputes.

In the case of The Govt of India Vs. National Tobacco Company, the court held that the
powers that have been vested in the appropriate government are discretionary in nature and not
mandatory. Therefore if in any particular case the government carry out arbitrary actions which
are contrary to the statute under which he is supposed to function and has been refusing to refer
the dispute at hand to the tribunals or the labour court, then such grounds will be enough to file
a writ petition against the government under Article 226 of the Constitution of India. From this
case, it can be observed that the Act provides with no scope to misuse the powers that have
been vested to any administrative body that can directly affect the dispute that is already
existing and can further accelerate it as well creating more problems.

Adding more to this idea of restricting the use of arbitrary power, the court in the case
of Hochtief Gammon v. the State of Orissa was of the opinion that the courts will have the
authority to view that the action taken by the executive is not unlawful and unfair in nature and
in this process the courts’ vests the duty of ensuring that the relevant matters of the dispute
have been taken into concern in a large away while making a decision on the appropriate
government.

It was in the well-known case of Mathura Refinery Mazdoor Sangh v. Union of India, the
Supreme Court of India gave importance to the tribunals to deal with the industrial dispute and
also directed the government to take consultancy from the tribunals itself. Thus in this way, the
court separated the mechanism of settlement dispute under the Industrial Dispute Act,1947 as
a separate entity altogether.
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In another case named United Bleachers (P) Ltd. v. LC, the High Court at Madras was of the
view that if any kind of delay happens on the part of the appropriate government to make a
reference, then that will not be a valid ground to decline the relief that is to be granted to the
labourers who are in the dispute and have relatively suffered from the same already. If there is
a denial of the relief on this very ground then the same will be referred to as an unfair labour
practice and thereby will be unlawful. Thus the judgments that are discussed above reflects that
whatever be the dispute, the courts always intend to settle it providing justice to both the parties
involved in the dispute.
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BIBLIOGRAPHY

Srivastva S.C. , Social Security and Labour Laws, 1985: Eastern Harry Calvert, Social
Security Laws, 1978

https://www.indiabudget.gov.in/economicsurvey/ebook_es2022/files/basichtml/page398.html

Singh Avtar & Kaur Harpreet , Introduction To Labour And Industrial Laws, Lexis Nexis
New Delhi, 2016

https://www.india.gov.in/topics/labour-employment/unorganized-sector-workers

https://labour.gov.in/unorganized-workers

Padhi P.K. , Labour and Industrial Laws, 4th ed , PHI Learning Private Limited, New Delhi,
2019

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1968206

Ghosh Piyali & Nandan Shefali ,Industrial relations and labour laws , 1st ed., McGraw Hill
Education , U.P. , 2017

https://www.researchgate.net/publication/305728488_Labourers_of_Unorganised_sectors_an
d_their_Problems