Industrial Dispute

by
Dr. Bignya Patnaik
Industrial Dispute

The common meaning of

dispute is disagreement or
difference over some
It may lead to strikes, lock-
issues between parties. if
outs, gheraos etc.
the disagreement is in an
industry, it is called
industrial dispute.
Industrial Dispute

“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 Act, 1947 [Section 2]
The following principles judge the nature of an industrial
dispute:

• The dispute must affect a large number of workmen who have a community
of interest, and the rights of these workmen must be affected as a class
• The dispute must be taken up either by the industry union or by a
substantial number of workmen
• The grievance turns from individual complaint into a general complaint
• There must be some nexus between the union and the dispute
• According to Section 2A of the Industrial Disputes Act, 1947, a workman
has a right to raise an industrial dispute with regard to termination,
discharge, dismissal, or retrenchment of his or her service, even though no
other workman or any trade union of workman or any trade union of
workmen raises it or is a party to the dispute.
ECONOMIC CAUSES
Wages has been the major economic reason causing industrial disputes. The following two
reasons are attributed to this:
• The demand for wages has never been fully met because of continuously rising inflation
and high cost of living. These result in never-ending demand for upward revision of
wages from the trade unions.
• Wage differential among industrial sectors, regional levels, and geographical levels also
become the bone of contention between the workers and the management.
MANAGEMENT PRACTICES
• The management’s unwillingness to recognize a particular trade union and its dilatory tactics in
verifying the representative character of the trade union.
• Its unwillingness to talk over any dispute with the employees or refer it to “arbitration” even when
trade unions want it to do so.
• Forcing workers either to join a particular trade union or refrain from joining a trade union.
• To discharge or dismiss workers by way of discrimination, victimization, or any other subjective
ground.
• The management’s denial for consulting workers in the matters of recruitment, promotion,
transfer, merit awards, etc.
• The benefits offered by the management to workers are far from satisfactory.
• Violation of norms by the management such as Code of Discipline, grievance procedures,
agreements entered between workers and management, etc.
TRADE UNION PRACTICES

Most of the organizations in India have multiple unions. Each union tries to show its
greater concern for the workers’ cause so as to attract more and more workers within
its folds. In this tug of war, the settlement arrived at between one union and
management is opposed by the other (i.e., rival) union. This show remains a never
ending one.
Trade unions’ assumption “what they do is only right and what management does is
wrong” breed strife or dispute between the workers and the management. As such,
trade unions oppose settlements, and the dispute remains unresolved.
LEGAL AND POLITICAL FACTORS

We have 108 multiple labour laws to regulate IR in our country. While there exists
contradiction among these laws with regards to IR, most of the labour laws enacted
in the past have by now outlived their relevance to a great extent in the changed
industrial environment.
Trade unions in our country are also affiliated to political parties. Political parties
divide unions on party lines. These also engineer strikes, gheraos and bandhs to
demonstrate their strengths. The political party which is in power invariably favours
a trade union which is affiliated to it. This results in unending disputes in the
organization.
Forms of Industrial Dispute
ID consequences

Industrial disputes are costly and have negative financial

consequences on the company. They injure economic
welfare of the nation by:
• Work stoppages disrupt wages and salaries as well,
leading to worsening financial situation of the workers
resulting in reduced demand for products and services as
the incomes drop.
• Work stoppages also lead to loss of production and man
hours resulting in dip in sales and profits.
ID Preventions

The preventive machinery is essentially a proactive

approach to avoid industrial disputes taking place in the
organization. It broadly includes all such measures which
directly or indirectly contribute towards improvement of
industrial relations and, in turn, prevention of industrial
disputes.
The preventive machinery includes various measures like
trade unions, collective bargaining, grievance procedure,
workers participation in management, empowerment, health
and safety, and social security.
The additional preventive measures include the
following:
• Joint Consultation
• Standing orders
• Code of Discipline
JOINT CONSULTATIONS
There are two important consultative arrangements made to prevent industrial disputes. These are:
(i) Works committees: The objectives of works committees are to:
• Remove the causes of friction in the day-to-day work situation
• Foster amity and harmonious relationship between the parties
• Create an atmosphere for voluntary settlement of disputes and frictions
(ii) Joint Management Councils (JMC): The salient features of the JMCs are as follows:
• The scheme is a voluntary one
• The minimum and maximum number of its members are 6 and 12, respectively consisting of
equal number of representatives of workers and employers
• The JMCs deal with matters like information sharing, consultative, and administrative
• The decisions taken by the JMC should be unanimous ones
• The JMCs can be set up in the units employing 500 or more persons and having strong trade
unions
SO and CoD
• STANDING ORDERS
The very purpose of having Standing Orders in the organization is to regulate industrial
relations. It refers to the rules and regulations which govern the conditions of employment of
workers. These standing orders are binding on the employer and the employees.

• CODE OF DISCIPLINE
According to this both employees and employers voluntarily agree to maintain and create an
atmosphere of mutual trust and co-operation in the industry. The Code of Discipline provides
that:
• Strikes and lockouts cannot be declared without prior notice
• No party should take any direct action without consulting the other
• The existing machinery for the settlement of disputes should be followed
SETTLEMENT of DISPUTES
Industrial Dispute Settlement
The settlement machinery as provided by the Act consists of the following three methods:
• CONCILIATION
In view of its objective to settle disputes as quickly as possible, conciliation is characterized
by the following features:
• The conciliator or mediator tries to remove the difference between the parties
• He/she persuades the parties to think over the matter with a problem-solving approach,
i.e., with a give and take approach
• He/she only persuades the disputants to reach a solution and never imposes his/her own
viewpoint
• The conciliator may change his approach from case to case as he/she finds fit depending
on other factors
Conciliation
 According to the Industrial Disputes Act 1947, the conciliation machinery in India consists of the
following:
• Conciliation Officer
• Board of Conciliation
• Court of Enquiry

• ARBITRATION
Arbitration is a process in which the conflicting parties agree to refer their dispute to a neutral third party
known as Arbitrator. In India, there are two types of arbitration:
(i) Voluntary Arbitration: In voluntary arbitration, both the conflicting parties appoint a neutral third
party as arbitrator. The arbitrator acts only when the dispute is referred to him/her.
(ii) Compulsory Arbitration: In compulsory arbitration, the government can force the disputing
parties to go for compulsory arbitration.
Arbitration
• ADJUDICATION
The government has the power to refer a dispute to the adjudicator with or without the
consent of the parties involved. When the dispute is referred to adjudication with the consent
of the disputing parties, it is called voluntary adjudication. When the government itself refers
the dispute to adjudication without consulting the concerned parties, it is known as
compulsory adjudication.
The Industrial Disputes Act, 1947 provides a three-tier machinery for the adjudication of
industrial disputes:
• Labour Court: The labour court consists of one independent person who is the
presiding officer or has been a judge of a High Court, or has been a district judge or
additional district judge for not less than 3 years, or has been a presiding officer of a
labour court for not less than 5 years. The labour court deals with the matters specified in
the second schedule of the Industrial Disputes Act.
Adjudication
• Industrial Tribunal: Under Section 7A of the Act, the appropriate Government may constitute one
or more Industrial tribunals for the adjudication of industrial disputes. The matters that come within
the jurisdiction of an industrial tribunal include the following:
1. Wages, including the period and mode of payment
2. Compensatory and other allowances
3. Hours of work and rest periods
4. Leave with wages and holidays
5. Bonus, profit sharing, provident fund, and gratuity
6. Classification by grades
7. Rules of discipline
8. Rationalization
9. Retrenchment of employees and closure of an establishment or undertaking
10. Any other matter that can be prescribed
• National Tribunal: A one adjudication body setup by the central government is called the national
tribunal. In such cases the government may appoint two advisors to assess or advice the national
tribunal.