UNIT 1: Industrial Relations

Industrial Relations: Role & Importance

The Concept of Industrial Relations and

Background
The term ‘Industrial Relations’ comprises of two terms: ‘Industry’ and
‘Relations’. “Industry” refers to “Any productive activity in which an
individual (or a group of individuals) is engaged”. By “relations” we mean
“the relationships that exist within the industry between the employer and
his workmen.”

Concept of Industrial Relations

The term industrial relations explain the relationship between employees and
management which stem directly or indirectly from union-employer
relationship. Industrial relations are the relationships between employees
and employers within the organizational settings.

The field of industrial relations looks at the relationship between

management and workers, particularly groups of workers represented by a
union. Industrial relations are basically the interactions between employers,
employees and the government, and the institutions and associations
through which such interactions are mediated.

The term industrial relations have a broad as well as a narrow outlook.

Originally, industrial relations were broadly defined to include the
relationships and interactions between employers and employees. From this
perspective, industrial relations cover all aspects of the employment
relationship, including human resource management, employee relations,
and union-management (or labor) relations.

Now its meaning has become more specific and restricted. Accordingly,
industrial relations pertains to the study and practice of collective
bargaining, trade unionism, and labor-management relations, while human
resource management is a separate, largely distinct field that deals with
nonunion employment relationships and the personnel practices and policies
of employers.

The term industrial relations have a broad as well as a narrow outlook.

Originally, industrial relations were broadly defined to include the
relationships and interactions between employers and employees. From this
perspective, industrial relations cover all aspects of the employment
relationship, including human resource management, employee relations,
and union-management (or labor) relations.

Now its meaning has become more specific and restricted. Accordingly,
industrial relations pertains to the study and practice of collective
bargaining, trade unionism, and labor-management relations, while human
resource management is a separate, largely distinct field that deals with
nonunion employment relationships and the personnel practices and policies
of employers.

Industrial relations is used to denote the collective relationships between

management and the workers. Traditionally, the term industrial relations is
used to cover such aspects of industrial life as trade unionism, collective
bargaining, workers’ participation in management, discipline and grievance
handling, industrial disputes and interpretation of labor laws and rules and
code of conduct

In the words of Lester, Industrial relations involve attempts at arriving at

solutions between the conflicting objectives and values; between the profit
motive and social gain; between discipline and freedom, between authority
and industrial democracy; between bargaining and co-operation; and
between conflicting interests of the individual, the group and the
community”.

The National Commission on Labor (NCL)also emphasize on the same

concept. According to NCL, industrial relations affect not merely the interests
of the two participants- labor and management, but also the economic and
social goals to which the State addresses itself. To regulate these relations in
socially desirable channels is a function, which the State is in the best
position to perform.

In refers to relation between:

1. Employer
2. Employee
3. Trade union
4. Labour union
 5. Government
6. Court and Tribunal

Importance of Industrial Relations

Industrial relations seek to protect the rights of managers too. Managers

expect workers to observe codes of discipline, not to join illegal strikes, not
to indulge in damage to company’s property, not to assault supervisors or
peers, and not to come inebriated to the workplace. Where a worker’s
behavior deviates from expected lines, it is the management’s prerogative to
take action.

There is a set procedure for handling any act of indiscipline or indiscretion on

the part of an employee, and if the management satisfies the procedure, it is
justified in taking action or even dismissing the employee from service.

Role:

 To help establish and maintain true industrial democracy which

is a prerequisite for the establishment of a socialist society.
 To help in the economic progress of a country. The problem of
an increase in productivity is essentially the problem of
maintaining good industrial relations. That is why they form an
important plank of the economic development plan of every
civilized nation.
 To help management both in the formulation of informed
labour relations policies and in their translation into action.
 To encourage collective bargaining as a means of self-
regulation. They consider the negotiation process as an
educational opportunity, a chance both to learn and to teach.
 To help government in making laws forbidding unfair practices
of unions and employers. In a climate of good industrial
relations, every party works for the solidarity of workers’
movement. Unions gain more strength and vitality.

In narrow sense, the term ‘industrial relations’ means relations between

parties in industrial establishments. That means, nature of relationship
established amongst the parties in the industry. Dictionary meaning of
industrial relations is the relations between management and employees in
industrial concerns. In short, the term, ‘industrial relations’ means the
relations between employees and management arising out of day-to-day
work in industry.
The healthy industrial relations are key to the progress and success. Their
significance may be discussed as under:

Uninterrupted production

The most important benefit of industrial relations is that this ensures

continuity of production. This means, continuous employment for all from
manager to workers. The resources are fully utilized, resulting in the
maximum possible production. There is uninterrupted flow of income for all.
Smooth running of an industry is of vital importance for several other
industries; to other industries if the products are intermediaries or inputs; to
exporters if these are export goods; to consumers and workers, if these are
goods of mass consumption.

Reduction in Industrial Disputes:

Good industrial relations reduce the industrial disputes. Disputes are

reflections of the failure of basic human urges or motivations to secure
adequate satisfaction or expression which are fully cured by good industrial
relations. Strikes, lockouts, go-slow tactics, gherao and grievances are some
of the reflections of industrial unrest which do not spring up in an
atmosphere of industrial peace. It helps promoting co-operation and
increasing production.

Mental Revolution:

The main object of industrial relation is a complete mental revolution of

workers and employees. The industrial peace lies ultimately in a transformed
outlook on the part of both. It is the business of leadership in the ranks of
workers, employees and Government to work out a new relationship in
consonance with a spirit of true democracy. Both should think themselves as
partners of the industry and the role of workers in such a partnership should
be recognized. On the other hand, workers must recognize employer’s
authority. It will naturally have impact on production because they recognize
the interest of each other.

High morale:

Good industrial relations improve the morale of the employees. Employees

work with great zeal with the feeling in mind that the interest of employer
and employees is one and the same, i.e. to increase production. Every
worker feels that he is a co-owner of the gains of industry. The employer in
his turn must realize that the gains of industry are not for him along but they
should be shared equally and generously with his workers. In other words,
complete unity of thought and action is the main achievement of industrial
peace. It increases the place of workers in the society and their ego is
satisfied. It naturally affects production because mighty co-operative efforts
alone can produce great results.

Reduced Wastage:

Good industrial relations are maintained on the basis of cooperation and

recognition of each other. It will help increase production. Wastage of man,
material and machines are reduced to the minimum and thus national
interest is protected.

Thus, it is evident that good industrial relations is the basis of higher

production with minimum cost and higher profits. It also results in increased
efficiency of workers. New and new projects may be introduced for the
welfare of the workers and to promote the morale of the people at work. An
economy organized for planned production and distribution, aiming at the
realization of social justice and welfare of the massage can function
effectively only in an atmosphere of industrial peace. If the twin objectives of
rapid national development and increased social justice are to be achieved,
there must be harmonious relationship between management and labor.

Objectives of Industrial Relations:

 To safeguard the interest of labour and management by

securing the highest level of mutual understanding and good-
will among all those sections in the industry which participate
in the process of production.
 To avoid industrial conflict and develop harmonious relations,
which are an essential factor in the productivity of workers and
the industrial progress of a country.
 To raise productivity to a higher level in an era of full
employment by lessening the tendency to high turnover and
frequency absenteeism.
 To establish and promote the growth of an industrial
democracy based on labor partnership in the sharing of profits
and of managerial decisions, so that ban individuals
personality may grow its full stature for the benefit of the
industry and of the country as well.
 To eliminate or minimize the number of strikes, lockouts and
gheraos by providing reasonable wages, improved living and
working conditions, said fringe benefits.
  To improve the economic conditions of workers in the existing
state of industrial managements and political government.
 Socialization of industries by making the state itself a major
employer
 Vesting of a proprietary interest of the workers in the
industries in which they are employed.

History
Industrial relations got its roots in the industrial revolution and the spread of
capitalism which created the modern employment relationship by spawning
free labour markets and large-scale industrial organizations with thousands
of wage workers. Kaufman, the Global Evolution of Industrial Relations.

As both societies wrestled with these massive economic and social changes,
labour problems arose. Low wages, long working hours, monotonous and
dangerous work, and abusive supervisory practices led to high employee
turnover, violent strikes, and the threat of social instability and due to
confluence of these event and ideas associated with rise of democratic
governments in the western world of the late nineteenth and twentieth
centuries. It emerged from both negative and positive impulses

The negative aspect, industrial relations was a reaction against deplorable

working condition and with unrepressed profit making and employee clout in
the nine teeth century and twentieth century capitalism and this led to the
deplorable situations a conflict between capital and labour and hardship for
employee of that time

So we come to the conclusion that industrial relation was part of the reform
wing. Industrial relations arose from the conviction that cordial relationship
between workers and employer could be improvised through a combination
of scientific discovery, education, legal reform.

Current situation

Therefore, the maintenance of a good human relationship is a must in today

business environment, because in case of its absence the organizational
structure may crumble. Employees constitute the most valuable assets of
any organization.

Any neglect of the important factor is likely to result in increased cost of

production in term of wage and salaries, benefits and services; working
conditions, increased labour turn-over, absenteeism, indiscipline and
cleavages, strikes and transfer on the ground of discontent and the like,
besides deterioration in the quality of the goods produced and strained
relations between labour and management.

The Germans practice co-determination which gives workers of the

organization representation at the management of the companies these
known as the law allows workers to elect representatives (usually trade
union representatives) for the supervisory board of directors.

Trade Union:

A trade union, also known as a labor union, is an organization formed by workers in a particular
industry or occupation to protect and promote their collective interests. These interests
typically include better wages, benefits, working conditions, and job security. Trade unions
negotiate with employers on behalf of their members regarding these issues through collective
bargaining.

Overall, trade unions play a crucial role in ensuring fair treatment and representation for
workers within the labor market.

Trade unions typically exhibit several key features that define their purpose and operations:

1. Collective Representation: Trade unions represent the collective interests of workers

rather than individual employees. They negotiate with employers on behalf of their
members to secure better wages, benefits, and working conditions.
2. Collective Bargaining: One of the primary functions of trade unions is collective
bargaining. They negotiate agreements (collective bargaining agreements or CBAs) with
employers that outline terms and conditions of employment such as wages, hours of
work, benefits, and grievance procedures.
3. Advocacy and Support: Trade unions advocate for workers' rights and interests both
within workplaces and in broader society. They support workers in disputes with
employers, provide legal assistance, and ensure fair treatment in disciplinary actions or
layoffs.
4. Membership and Solidarity: Membership in trade unions is typically voluntary, and
members pay dues to support union activities. Solidarity among members is emphasized
to achieve common goals and strengthen bargaining power.
5. Political and Social Advocacy: Trade unions often engage in political advocacy to
influence government policies related to labor rights, workplace safety, employment
regulations, and social welfare programs. They also promote social justice issues
affecting workers and their families.
6. Training and Education: Many trade unions offer training programs and educational
opportunities for members to enhance their skills, improve job prospects, and adapt to
changes in their industries.
 7. Protection of Workers' Rights: Trade unions act as watchdogs to ensure that employers
comply with labor laws and regulations. They intervene to prevent unfair labor practices,
discrimination, and unsafe working conditions.
8. Unity Across Industries: While trade unions are often specific to particular industries or
occupations, they may also collaborate within broader labor federations or alliances to
amplify their collective voice and impact.

TYPES OF TRADE UNION:

On the basis of purpose:
1. REFORMIST:(Reform advocates a change that will preserve the existing
values but will provide improved means of implementing them)

Gradually reform rather than revolution

It tries to uplist business also called as uplist union.

2. Revolutionary:(it advocates replacement of existing values)

Complete change

Convert present system to new one.

On the basis of membership structure:

1. craft workers:

Union of higher skilled occupations workers. (based on trade and

craft)

2. Industrial workers:

Union of one industry (steel, textile)

3. General union:( it rotates around industries and job titles)

Union of any skill and industry

4. Staff union:

Combination of craft and union workers

 Generally, in tertiary sector.

On the basis of level and status:

1. Blue collar union:

Association of lower-level workers (those who perform task from

hands) mechanic, labour

2. White collar union:

Association of highly skilled workers (such as accountants

working in an office)

Problems of Trade unions

The shortcomings or the weakness of the trade union movement in
India are as follows:

1. Lack of Balanced Growth: Trade unions are often associated

with big industrial houses. A vast majority of the working
population is without any union backing. The entire agricultural
sector is highly unorganized ( LIKE weavers, handloom
workers, fishermen and fisherwomen, toddy tappers, leather
workers, plantation labourers in India. The agricultural workers
are subject to all kinds of exploitation. The same is true with
respect to those working in small scale and cottage industries.
Lack of balanced growth of trade unions in all sectors is one of
the major weaknesses of the trade union movement in
India.
2. Low Membership: Trade unions, with the exception of few
have low membership. This is because many employees are
not willing to join unions although they are ready to enjoy the
benefits arising out of the union actions. The reasons for the
hesitation of employees to join unions include, among others,
the need to take part in strikes and such other programs, fear
of pay cut and fear of punishment.
3. Poor financial Position: Low membership is one of the
reasons for the poor financial position of the unions. Moreover,
the subscription payable by every member is kept low. Some
members may not even make a prompt payment of the small
amount of subscription. These are also not very many sources
from which unions can get funds. They may probably depend
on contributions from philanthropists. The poor financial
position can only weaken the trade union movement.
4. Political Control: Most popular trade unions in India are
affiliated to certain political parties. These political parties are
only keen on making every grievance of the working class a
political issue to attain political gains. As a result the problem
only gets wide publicity and remains unsolved.
5. Multiplicity of Unions: Often there exists more than one
union within the same industry each backed by a political
party. These various unions have conflicting ideology. If one
union comes out with a strike proposal another union may
work against it. As a result, none of the unions is actually able
to solve the problems of the workers.
6. Inter-Union Rivalry: The existence of many unions within a
particular industry paves way for what is called inter-union
rivalry. These unions do not work together for the cause of the
workers. Each union may adopt a different approach to the
problem. The inter-union rivalry may become a more serious
problem of the workers. As a result, the employees are unable
to derive the benefits of collective bargaining.
7. Lack of able Leaders: Another barrier to the growth of trade
unions is the lack of able leaders. Some union leaders give a
strike call even for petty problems that can easily be resolved
through talks. On the other hand, there are leaders who have
secret pact with the management. They get bribes from the
government and work against the interests of the employees.
Some leaders don’t convene a meeting of the general body at
all even when a crisis develops. They take unilateral decisions
that are thrust on the employees.
8. Lack of Recognition: Most management is not prepared to
recognize trade unions. This happens because of any of the
following reason.
 The existence of low membership that reduces the
bargaining power of the union.
 The existence of more unions within the same industry.
  Inter-union rivalry.
 The indifferent attitude of the employees themselves
towards trade unions.

 Opposition from Employers: Apart from the fact that most

employers are not prepared to recognize trade unions, they
also do not let their employees from a union. (For example:
Yellow dog contract: which is an agreement between the
employer and employee in which the employee agrees, as a
condition of employment and not to be the member of union.

 Indifferent Attitude of the Members: Union leaders alone

cannot be blamed for the weakness of the trade union
movement. The indifferent attitude of the members of certain
unions is also a barrier. Some members do not even make a
prompt payment of the subscription amount. The treasurer of
the union has to go behind them, remind and persuade them
to pay the subscription that is often a very small amount.
There are on the other hand, members who do not attend the
general body meetings nor do they bother to know what is
discussed in such meetings. There are still others who do not
take part at all in any of the programmes of the union
organized to press the demands of the employees like slogan
shouting procession, demonstration, hunger strike etc.
Members generally expect the office-bearers to do all that is
necessary to achieve the demands.

Settlement Machinery for Industrial Disputes

The definition of Industrial disputes is as follows:

According to Section 2(k) of the Industrial Disputes Act, 1947 “industrial

dispute” is defined as, “Any disputes or differences 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”.
The definition identifies three parties to disputes.

They are:

1. Employers
2. Employees
3. Workmen

In narrow sense industrial dispute means conflict between parties in

industrial establishments. Dictionary meaning of ‘dispute’ is ‘disagreement’,
‘mutual antagonism as of ideas, interests etc.’ So, industrial dispute is
disagreement/mutual antagonism as of ideas, interests etc. between parties
in industry. In industrial setting parties are invariably workers and
management.

In the process of working, workers express their need, expectation, desire for
fulfilment and satisfaction. They want more money i.e., attractive wages,
allowances, monetary incentive which the management may not be
agreeable to pay. Worker’s demand of better fringe benefits, health benefits
but management may provide less than that of their requirement.

They want recognition, status, power, advancement, higher quality of work

life but management may be reluctant to give. Under such situation, a state
of disagreement/mutual antagonism between workers and management
develops which gives birth to industrial conflict.

So, industrial dispute is a general concept, and this conflict gets the shape of
industrial dispute in a specific dimensional situation. Basically, there is no
difference between ‘industrial conflicts’ and ‘industrial dispute’, variation lies
only in scope and coverage.

Analysis of the provision of the Act reveals the following:

1. Industrial dispute is a dispute or difference:

(i) Between employers and employers, or

(ii) Between employers and workmen or

(iii) Between workmen and workmen.

2. Industrial dispute is connected with:

(i) Employment or

(ii) Non-employment or

(iii) Terms of employment or

(iv) Conditions of labour of any person

Industrial Disputes have the following characteristics or essentials:

(1) Parties:

Industrial disputes may be among different parties.

Ordinarily, it is among the following parties:

(i) Employers and employers,

(ii) Employers and workmen and

(iii) Workmen and Workmen.

(2) Relation:

Matter of dispute may relate to worker or to employer or to both. Normally, it

relates to an appointment or termination of a person; conditions of
employment or conditions of work.

(3) Forms:

Industrial disputes may manifest themselves in different forms, such as

strikes, lock-outs, Gheraos, go slow tactics, pens down strike, etc.

(4) Oral or Written:

Industrial dispute need not be written. It may be oral.

(5) Real:

It should be real. It should relate to employment of the worker, termination

of employment, terms of employment, conditions of employment, etc.
Matters relating to the personal life of the worker do not constitute industrial
dispute.

(6) Substantial Interest:

In matter relating to industrial dispute interest either of the employer or the

worker must be involved.

(7) Related to Industry:

A dispute can be included in industrial dispute when it concerns with

industry. Usually, disputes must belong to an industry which is functioning.
Disputes belonging to an industry that has since been closed down should
not be included in it.

(8) Clarification:

Industrial disputes should relate to matters which are clear. Unless, it is a

transparent case its settlement is not possible. Matters which are clear find
settlement easily. Concerned party can protect its interest when the issue is
crystal clear.

(9) Origin:

Ordinarily, dispute arises when the workers or trade unions put up their
demands before the employer and the latter refuses to consider them.

In short, it can be said that industrial dispute means lack of peace in

industry. When in an industry, requirements of the two parties contradict
each other industrial dispute raises its ugly head.

FORMS OF INDUSTRIAL DISPUTES:

STRIKE:

Quitting work by a group of workers

 Sympathetic strike: strike to support the other group of workers on

strike.
 General strike: for the common demands of the workers concerned.
 Sit down strike:
workers stop doing the work but also do not leave the place of work.
 It is also known as tool down or pen down strike.
 Slow down strike:
When workers remain on their jobs but slow down the output of their
work.
 Sick out:
When all the workers go on sick leave on a same day.

LOCK OUT:
step taken by the employer to put pressure on workers. He close down the
workplace until the workers agree to continue the work on the work on the
terms and conditions as given by the employer.

GHERAO:

Action taken by workers under which they restrict the employer to leave the
work premises or residence. It is an illegal act according to the law.

PICKETING:

When workers are not allowed to report for the work by deputing some men
at the factory gates. If picketing does not involve any violence it is perfectly
legal.

Conciliation, Arbitration & Adjudication

Some of the major industrial dispute settlement machinery are as follows:

1. Conciliation (conciliation officer, board of conciliation and court

of enquiry)
2. Voluntary Arbitration
3. Adjudication (Compulsory arbitration).

This machinery has been provided under the Industrial Disputes Act, 1947. It,
in fact, provides a legalistic way of setting the disputes. As said above, the
goal of preventive machinery is to create an environment where the disputes
do not arise at all.
Even then if any differences arise, the judicial machinery has been provided
to settle them lest they should result into work stoppages. In this sense, the
nature of this machinery is curative for it aims at curing the aliments.

1. Conciliation:

Conciliation, is a form of mediation. Mediation is the act of making active

effort to bring two conflicting parties to compromise. Mediation, however,
differs from conciliation in that whereas conciliator plays only a passive and
indirect role, and the scope of his functions is provided under the law, the
mediator takes active part and the scope of his activities are not subject to
any statutory provisions.

Conciliation is the “practice by which the services of a 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 of agreed
solution.”

The Industrial Disputes Act, 1947 provides for conciliation, and can be
utilized either by appointing conciliation officers (permanently or for a limited
period) or by constituting a board of conciliation. This conciliation machinery
can take a note of a dispute or apprehend dispute either on its own or when
approached by either party.

Here, a conciliation officer is appointed by an appropriate government whose

duties are laid down in section 12 of industrial dispute act.

According to Section 5 of the Industrial Disputes Act, 1947, a Board of

Conciliation is made up of a chairman and two or four other members:

 Chairman: An independent person

 Other members: Representatives of the parties to the dispute in equal

numbers. The parties concerned recommend these members, or if a
party doesn't make a recommendation in time, the government can
appoint someone eligible.

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, settlement arrived at in the course of
conciliation is binding for such period as may be agreed upon between the
parties or for a period of 6 months and with continue to be binding until
revoked by either party. 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.

Conciliation Officer:

The law provides for the appointment of Conciliation Officer by the

Government to conciliate between the parties to the industrial dispute. The
Conciliation Officer is given the powers of a civil court, whereby he is
authorised to call the witness the parties on oath. It should be remembered,
however, whereas civil court cannot go beyond interpreting the laws, the
conciliation officer can go behind the facts and make judgment which will be
binding upon the parties.

On receiving information about a dispute, the conciliation officer should give

formal intimation in writing to the parties concerned of his intention to
commence conciliation proceedings from a specified date. He should then
start doing all such things as he thinks fit for the purpose of persuading the
parties to come to fair and amicable settlement of the dispute.

The report in either case must be submitted within 14 days of the

commencement of conciliation proceedings or earlier. But the time for
submission of the report may be extended by an agreement in writing of all
the parties to the dispute subject to the approval of the conciliation officer.

If an agreement is reached (called the memorandum of settlement), it

remains binding for such period as is agreed upon by the parties, and if no
such period is agreed upon, for a period of six months from the date on
which the memorandum of settlement is signed by the parties to the dispute,
and continues to be binding on the parties after the expiry of the period
aforesaid, until the expiry of two months from the date on which a notice in
writing of an intention to terminate the settlement is given by one of the
party or parties to the settlement.

Board of Conciliation:

In case Conciliation Officer fails to resolve the differences between the

parties, the government has the discretion to appoint a Board of Conciliation.
The Board is tripartite and ad hoc body. It consists of a chairman and two or
four other members.

The chairman is to be an independent person and other members are

nominated in equal number by the parties to the dispute. Conciliation
proceedings before a Board are similar to those that take place before the
Conciliation Officer. The Government has yet another option of referring the
dispute to the Court of Inquiry instead of the Board of Conciliation.

The machinery of the Board is set in motion when a dispute is referred to it.
In other words, the Board does not hold the conciliation proceedings of its
own accord. On the dispute being referred to the Board, it is the duty of the
Board to do all things as it thinks fit for the purpose of inducing the parties to
come to a fair and amicable settlement. The Board must submit its report to
the government within two months of the date on which the dispute was
referred to it. This period can be further extended by the government by two
months.

2. Court of Inquiry:

In case of the failure of the conciliation proceedings to settle a dispute, the

government can appoint a Court of Inquiry to enquire into any matter
connected with or relevant to industrial dispute. The court is expected to
submit its report within six months. One independent person and two or
more persons one of them to be decided by app govt and few other member,
in the absence of chairman quorum is followed and meetings are proceeded.

A Board of Conciliation's main goal is to settle industrial disputes, while a

Court of Inquiry's main goal is to investigate and reveal the causes of an
industrial dispute

The court of enquiry is required to submit its report within a period of six
months from the commencement of enquiry. This report is subsequently
published by the government within 30 days of its receipt. Unlike during the
period of conciliation, workers’ right to strike, employers’ right to lockout,
and employers’ right to dismiss workmen, etc. remain unaffected during the
proceedings in a court to enquiry.

A court of enquiry is different from a Board of Conciliation. The former aims

at inquiring into and revealing the causes of an industrial dispute. On the
other hand, the latter’s basic objective is to promote the settlement of an
industrial dispute. Thus, a court of enquiry is primarily fact-finding
machinery.

3. Voluntary Arbitration:

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.
In other words, arbitration offers an opportunity for a solution of the dispute
through an arbitrator jointly appointed by the parties to the dispute. The
process of arbitration saves time and money of both the parties which is
usually wasted in case of adjudication.

Voluntary arbitration became popular as a method a settling differences

between workers and management with the advocacy of Mahatma Gandhi,
who had applied it very successfully in the Textile industry of Ahmedabad.
However, voluntary arbitration was lent legal identity only in 1956 when
Industrial Disputes Act, 1947 was amended to include a provision relating to
it.

The provision for voluntary arbitration was made because of the lengthy
legal proceedings and formalities and resulting delays involved in
adjudication. It may, however, be noted that arbitrator is not vested with any
judicial powers.

He derives his powers to settle the dispute from the agreement that parties
have made between themselves regarding the reference of dispute to the
arbitrator. The arbitrator should submit his award to the government. The
government will then publish it within 30 days of such submission. The award
would become enforceable on the expiry of 30 days of its publication.

Voluntary arbitration is one of the democratic ways for setting industrial

disputes. It is the best method for resolving industrial conflicts and is a close’
supplement to collective bargaining. It not only provides a voluntary method
of settling industrial disputes, but is also a quicker way of settling them.

It is based on the notion of self-government in industrial relations.

Furthermore, it helps to curtail the protracted proceedings attendant on
adjudication, connotes a healthy attitude and a developed outlook; assists in
strengthening the trade union movement and contributes for building up
sound and cordial industrial relations.

4. Adjudication:

The ultimate remedy for the settlement of an industrial dispute is its

reference to adjudication by labour court or tribunals when conciliation
machinery fails to bring about a settlement. Adjudication consists of settling
disputes through intervention by the third party appointed by the
government. The law provides the adjudication to be conducted by the
Labour Court, Industrial Tribunal of National Tribunal.
A dispute can be referred to adjudication if 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 ‘compulsory adjudication’. As mentioned above, the dispute can be
referred to three types of tribunals depending on the nature and facts of
dispute in questions.

These include:

(a) Labour courts,

(b) Industrial tribunals, and

(c) National tribunals.

The procedure, powers, and provisions regarding commencement of award

and period of operation of award of these three bodies are similar. The first
two bodies can be set up either by State or Central Government but the
national tribunal can be constituted by the Central Government only, when it
thinks that the adjudication of a dispute is of national importance. These
three bodies are into hierarchical in nature. It is the Government’s
prerogative to refer a dispute to any of these bodies depending on the
nature of dispute.

(а) Labour Court:

A labour court consists of one person only, who is normally a sitting or an ex-
judge of a High Court. It may be constituted by the appropriate Government
for adjudication of disputes which are mentioned in the second schedule of
the Act.

The issues referred to a labour court may include:(basically

employment right enactment)

(i) The propriety or legality of an order passed by an employer under the

Standing Orders (Standing orders are rules that cover various aspects of
employment in industrial establishments, such as working hours, attendance,
leave procedures, and rights and responsibilities of both employers and
workers).

(ii) The application and interpretation of Standing Orders(1946)

(iii) Discharge and dismissal of workmen and grant of relief to them.

(iv) Withdrawal of any statutory concession or privilege.

(v) Illegality or otherwise of any strike or lockout.

(vi) All matters not specified in the third schedule of Industrial Disputes Act,
1947. (It deals with the jurisdiction of Industrial Tribunals).

(b) Industrial Tribunal:

Like a labour court, an industrial tribunal is also a one-man body. The

matters which fall within the jurisdiction of industrial tribunals are as
mentioned in the second schedule or the third schedule of the Act.
Obviously, industrial tribunals have wider jurisdiction than the labour courts.

Moreover an industrial tribunal, in addition to the presiding officer, can have

two assessors to advise him in the proceedings; the appropriate Government
is empowered to appoint the assessors.

The Industrial Tribunal may be referred the following issues:

1. Wages including the period and mode of payment.

2. Compensatory and other allowances.
3. Hours of work and rest intervals.
4. Leave with wages and holidays.
5. Bonus, profit sharing, provident fund and gratuity.
6. Shift working otherwise than in accordance with the standing
orders.
7. Rule of discipline.
8. Rationalisation.
9. Retrenchment.
10. Any other matter that may be prescribed.

(c) National Tribunal:

The Central Government may constitute a national tribunal for adjudication

of disputes as mentioned in the second and third schedules of the Act or any
other matter not mentioned therein provided in its opinion the industrial
dispute involves “questions of national importance” or “the industrial dispute
is of such a nature that undertakings established in more than one state are
likely to be affected by such a dispute”.
The Central Government appoints the presiding officer of a National Tribunal
in India, and the person must be or have been a High Court Judge.

The Central Government may appoint two assessors to assist the national
tribunal. The award of the tribunal is to be submitted to the Central
Government which has the power to modify or reject it if it considers it
necessary in public interest

It should be noted that every award of a Labour Court, Industrial Tribunal or

National Tribunal must be published by the appropriate Government within
30 days from the date of its receipt. Unless declared otherwise by the
appropriate government, every award shall come into force on the expiry of
30 days from the date of its publication and shall remain in operation for a
period of one year thereafter.