INDUSTRIAL DISPUTE ACT, 1947

LECTURE 2
ROADMAP

 Trade Disputes Act,1929

 Relation to Trade Unions Act 1926
 Industrial Disputes Act 1947
 Industrial Disputes Mechanisms
EVOLUTION OF INDUSTRIAL DISPUTES IN INDIA

Employers’ and
Trade Disputes Act, Industrial Dispute
Workmen’s Disputes
1929 Act, 1947
Act,1869
HISTORY

 Industrial unrest in Bombay and Jamshedpur

 Beginning of organized trade unionism
 Trade Dispute Act,1929 - Three parts-
a) The first part consisted of Sections 3 to 14, dealt with the establishment of tribunals for the investigation and
settlement of trade disputes.
b) The second part, clause 15, relates to public utility services which were defined in Section 2 (g) of the Bill.
c) The third and last part consisted of Sections 16 to 18) contains special provisions relating to illegal strikes and
lockouts which were based on legislations of Great Britain.
TRADE DISPUTE ACT, 1947
Provided two Ad-Hoc Bodies

Court of Enquiry
Board of Conciliation
TRADE DISPUTE ACT, 1929

Purpose- To provide a conciliation machinery to provide resolution

to trade disputes

Strikes and Lockouts were illegal

Forbade strike in public utility services

TRADE DISPUTE ACT, 1929

BOARDS OF CONCILIATION AND COURTS OF INQUIRY

 Compulsory Conciliation mechanism
 Compulsory Investigation mechanism
 Appointing authority- Local Government or the Governor General
TRADE DISPUTE (AMENDED)ACT, 1938

Establish
Power of AG tribunals and
to intervene enforce
awards

Blanket ban
Speedy on strikes
recovery arising out of
mechanisms non industrial
dispute
TRADE DISPUTE ACT

 DEFECTS:
 The decision passed by the Board of Conciliation or the Court of Enquiry were not binding on the parties.
 Enforcement was the biggest loophole
 The Act did not provide a permanent machinery for industrial dispute settlement,
 REMEDY:
 Rule 81-A of the Defence of Indian Rules
 REPEALED as it failed to maintain industrial peace
INDUSTRIAL DISPUTE ACT, 1947

 It became the important step forward in the development of the industrial law in the country

 Large volume of decisional grist grew in the field of industrial adjudication as the tribunals created under this rules adjudicated large variety of
industrial disputes

 Industrial Employment Standing Orders Act, 1946

 The Industrial Disputes Bill was introduced in the Central Legislative Assembly in 1946

 It included all the essential principles of Rule 81A of the Defence of India Rules and Trade Disputes Act of 1929-Investigation and Settlement of
Industrial disputes

 Bill was passed by the Assembly in March 1947 and it became law with effect from 1 April 1947.
OBJECT OF THE PURPOSE

The Supreme Court in Dimakuchi Tea Estate Sangh v. Dimakuchi Tea Estate, described the objective of
the Act:
 Promotion of measures for securing and preserving amity and good relation between the employers
and workers
 Investigation and settlement of industrial disputes
 Prevention of illegal strikes and lock– outs • Relief to workmen in the matter of lay– off and
retrenchment
 Promotion of collective bargaining
 Introduced machinery for an adjustment of conflicting interest between the workmen and employer

 Preamble- provide a machinery and forum for investigation of industrial disputes and for settlement of
disputes
 The Act was enacted to provide a machinery and forum for the adjustment of such conflicting and
seemingly irreconcilable interests without disturbing the peace and harmony in the industry and
assuring industrial growth, which was the prerequisite for a welfare state.
 The Act enables the state to compel the parties to resort to industrial arbitration and for that purpose ,
different forums have been set up for the resolution of such disputes
 Beneficial Legislation and it seeks to achieve social justice on the basis of collective bargaining,
conciliation, arbitration and failing that – compulsory adjudication
CONTD…

 The object of the Act is to protect worker against victimization by the employer

 To ensure a termination of industrial disputes in a peaceful manner

 The purpose of the Act being beneficent, it has been described by courts as a piece

of social legislation
 To resolve disputes through the medium of arbitration and adjudication

 Deals with industrial dispute

 Regulation of rights of parties

 Enforcement of awards and settlements

PREAMBLE OF THE ACT
 Investigation and settlement of disputes

 Includes settlement through adjudication

 Material provisions have been enacted because it was thought to be expedient to make a provision for such
investigation and settlement of disputes, keeping in mind the importance of the development of the trade union
movement in the country
 Act empowers the A G to constitute the machineries mentioned under the act

 Its empowers the A G to make a reference of an industrial dispute for compulsory adjudication

 Empowers A G to prohibit strike and lockouts during the pendency of conciliation

 process
SETTLEMENT MECHANISM UNDER THE ACT

Mediation
Collective
and Investigation Arbitration Adjudication
Bargaining
Conciliation
 COLLECTIVE BARGAINING IN INDIA

 Supreme C ourt defined collective barg aining as “the technique by which dispute as
to conditions of employment is resolved amicably by agreement rather than coercion”.
 It is a process of discussion and negotiation between employer and workers regarding terms
of employment and working conditions.
 Workers are generally represented by trade unions with respect to expressing their grievance
concerning service conditions and wages before the employer and the management.
 This is generally an effective system as it usually results in employers undertaking actions to resolve
the issues of the workers. However, the legal procedure for pursuing collective bargaining in India is
complicated.

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STAGES OF COLLECTIVE BARGAINING

1. CHARTER OF DEMAND:
 Typically, the trade union notifies the employer of a call for collective bargaining negotiations.
However, in certain cases the employer may also initiate the collective bargaining process by
notifying the union(s).

 The representatives of the trade union draft a “charter of demands” through various discussions
and consultations with union members. The charter typically contains issues relating to wages,
bonuses, working hours, benefits, allowances, terms of employment, holidays, etc.

 In an establishment with multiple unions, the employer generally prefers a common charter of
demands, but in principle, all unions may submit different charters.

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 B. NEGOTIATION
 As a next step, negotiations begin after the submission of the charter of demands by the representatives
of the trade union. Prior to such negotiations, both the employer and the trade unions prepare for such
negotiations by ensuring collection of data, policy formulation and deciding the strategy in the
negotiations.

 After such preparation, the negotiations take place wherein the trade unions and the employer engage
in debates and discussions pertaining to the demands made by the trade unions. In the event that such
demands are rejected, the trade union may decide to engage in strikes.

 The collective bargaining process obviously takes long where the employer has to engage with
multiple unions. In the public sector, it may take months or even years. For example, the Joint Wage
Negotiating Committee for the Steel Industry, covering workers in four large unions, took more than
three years from the date of the submission of the charter of demands to the Steel Authority of India Ltd.
(SAIL). 2
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 C. COLLECTIVE BARGAINING AGREEMENT
 Next, a collective bargaining agreement will be drawn up and entered into between the employer and
workmen represented by trade unions. These may be structured as bipartite agreements,
memorandum of settlements or consent awards.
D. STRIKES
 If both parties fail to reach a collective agreement, the union(s) may go on strike. As per the IDA,
public utility sector employees must provide six weeks’ notice of a strike, and may strike fourteen
days after providing such notice (a ‘cooling off period’).

 Under the IDA, neither side may take any industrial action while the conciliation proceeding is
pending, and not until seven days after the conclusion of conciliation or two months after the
conclusion of legal proceedings.

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E. CONCILIATION
 A conciliation proceeding begins once the conciliation officer receives a notice of strike or lockout.
During the ‘cooling off period’, the state government may appoint a conciliation officer to investigate
the disputes, mediate and promote settlement.

 On the other hand, it may also appoint a Board of Conciliation which shall be appointed in equal
numbers on the recommendation of both parties, and shall be composed of a chairman and either two
or four members. No strikes may be conducted during the course of the conciliation proceeding.

 Conciliation proceedings are concluded with one of the following

recommendations:
(i) a settlement,
(ii) no settlement or 2
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(iii) reference to a labour court or an industrial tribunal.
F. COMPUSORY ARBITRATION/ADJUDICATION BY LABOUR COURTS,
TRIBUNALS
 When conciliation and mediation fails, parties may either go for voluntary or compulsory arbitration.
 In the case of voluntary arbitration, either the state or central government appoints a Board of
Arbitrators, which consists of a representative from the trade union and a representative from the
employer.
 In the case of compulsory arbitration, both parties submit the dispute to a mutually-agreed third party
for arbitration, which is typically a government officer. Arbitration may be compulsory because the
arbitrator makes recommendations to the parties without their consent, and both parties must accept the
conditions recommended by the arbitrator.
 If a labour dispute cannot be resolved via conciliation and mediation, the employer and the workers
can refer the case by a written agreement to a labour court, industrial tribunal or national tribunal for
adjudication or compulsory arbitration.
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 TYPES OF COLLECTIVE BARGAINING

In India, collective bargaining agreements are divided into three classes:

i. Bipartite (or voluntary) agreements are drawn up in voluntary negotiations between the employer and the
trade union. As per the IDA, such agreements are binding. Implementation is generally non-problematic
because both parties reached the agreement voluntarily.
ii. Settlements are tripartite in nature, as they involve the employer, trade union and conciliation officer. They arise
from a specific dispute, which is then referred to an officer for reconciliation. If during the reconciliation process,
the officer feels that the parties’ viewpoints have indeed been reconciled, and that an agreement is possible, he
may withdraw himself. If the parties finalize an agreement after the officer’s withdrawal, it is reported back to the
officer within a specified time and the matter is settled. However, it should be noted that the forms of settlement are
more limited in nature than bipartite agreements, because they must relate to the specific issues referred to the
conciliation office.
iii. Consent awards are agreements reached while a dispute is pending before a compulsory adjudicatory
authority, and incorporated into the authority’s award. Even though the agreement is reached voluntarily, it
becomes part of the binding award pronounced by the authority constituted for the purpose.
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