Industrial Dispute Settlement Machinery has been provided under the Industrial Dispute Act,1947.It provides a legalistic way of settling the disputes. This machinery comprises following organs:a) CONCILIATION b) VOLUNTARY ARBITRATION c) COURT OF INQUIRY d) ADJUDICATION (COMPULSORY ARBITRATION)



Conciliation is the ³practice by which the services of the 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 or agreed solution.´ This neutral party intervenes in the dispute situation upon a request by either or both the parties. The Conciliator simply assist the disputing parties in negotiations and decision making, he resolve the impasse ,removes the bottleneck by bringing both the parties to a compromise.

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The Industrial Disputes Act,1947 provides for conciliation, and can be utilized either by appointing Conciliation Officers or by constituting a Board of Conciliation. Under the Act, conciliation is compulsory in all disputes in public utility services and optional in other industrial establishments. 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. 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.

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The Conciliation Officers is appointed by the appropriate Government by notification in the Official Gazette for any specified area or for one or more specified industries, either permanently or for a limited period. Conciliation Officers are charged with the duty of holding conciliatory proceedings for the purpose of bringing about a fair settlement of any industrial dispute.


1. In case Conciliation Officers fails to resolve the differences between the parties, the appropriate Government may by notification in the Official Gazette, constitute a Board of Conciliation for settlement of an industrial dispute. 2. A Board shall consist of a Chairman and two or four other members. 3. The Chairman is to be an independent person and other members are nominated in equal numbers by the parties to the dispute. 4. The quorum for a meeting is two where the total number is three, and three where the number is five. 5. A Board, having a quorum, may act notwithstanding the absence of the Chairman or any of its members, or any vacancy in its number. But if the Government informs the Board that the services of the Chairman or any other member have ceased to be available, The Board must not act until a new Chairman or member has been appointed.



On failure of conciliation proceedings, the conciliation officer may 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. The process of arbitration saves time and money of both the parties which is wasted in case of adjudication. For the purpose of reference of a dispute to arbitration, the parties must enter into a written agreement called the ³arbitration agreement´ to refer the dispute to an arbitrator or arbitrators whose name they must specify in the agreement.




5. The agreement must be in the form prescribed and must be signed by the parties jointly, and a copy sent to the appropriate Government and the conciliation officer. 6. Nothing in the Arbitration Act, 1940 shall apply to arbitrations under this section. The appropriate Government shall, within 14 days from the date of receipt of such copy , publish the same in the Official Gazette.


8. The parties are free to appoint one or more arbitrators but in case their number is even, the parties should provide for the appointment of another person as umpire who may give award if the arbitrators are equally divided in their opinion. The award of the umpire is then deemed as the µarbitration award¶. 9. The provision for Voluntary arbitration was made because of the lengthy legal proceedings and formalities and resulting delays involved in adjudication

Factors which have contributed to Arbitration¶s slow progress are:

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Easy availability of adjudication in case of failure of negotiations; Cost to the parties, particularly workers; Legal obstacles; Absence of simplified procedure; Dearth of suitable arbitrators who command the confidence of both the parties.


The appropriate Government may, as occasion arises, by notification in the Official Gazette, constitute a Court of Inquiry for inquiring into any matter appearing to be connected with or relevant to an industrial dispute. Such a Court may consist of one or more independent persons, according as the Government may appoint. Where it consists of more than one member, one of them shall be appointed as Chairman. The Court having the prescribed quorum may act even if the Chairman or a member is absent; but not if the services of the Chairman have ceased to be available, and no other Chairman has been appointed. The Court shall inquire into the matters referred to it and report thereon to the appropriate Government within 6 months from the commencement of the inquiry.

The ultimate remedy for the settlement of an industrial dispute is its reference to adjudication by labour court or tribunals when conciliation machinery fails o bring about a settlement.  It consists of settling disputes through intervention by the third party appointed by the government. The law provides adjudication to be conducted by the Labour Court, Industrial Tribunal or National Tribunal.  A dispute can be referred to adjudication if both 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 µcompulsory adjudication¶.

However, there are two situations when it is obligatory for the appropriate government to make a refernce to adjudication. These situations are: i. When both the parties to a dispute applying the prescribed manner either jointly or seperately,for a reference, the appropriate government has to refer the dispute to adjudication provided it is satisfied that the persons applying represent the majority of each party ii. when the disputes relates to a public utility service and a notice of strike or lockout according to law has been given,the appropriate government has to make a reference to adjudication.


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