LABOUR AND INDUSTRIAL LAW

PROJ0045CT REPORT

METHODS AND AUTHORITIES FOR

THE SETTLEMENT OF
INDUSTRIAL DISPUTES

SUBMITTED TO:

SUBMITTED BY:

Dr. Kusum

Smriti Singla
B.A.LL.b(Hons.)9thSem
76/11

ACKNOWLEDGEMENT
I express my sincere gratitude to Dr. Kusum for her inspiration,
expert guidance, moral boosting, continuous encouragement and
appreciation which are the vital factors in successful completion of
my project work.
I humbly acknowledge deep gratitude towards my teacher.
Thanking You.

Page 2

TABLE OF CONTENTS

METHODS FOR THE SETTLEMENT OF INDUSTRIALDISPUTES:

ACKNOWLEDGEMENT
INTRODUCTION
CONCILIATION

Authorities for Conciliation

ARBITRATION

Authorities for Arbitration

ADJUDICATION

Authorities for Adjudication

LABOUR COURT
INDUSTRIAL TRIBUNAL
NATIONAL TRIBUNAL
CONCLUSION
BIBLIOGRAPHY

Page 3

INTRODUCTION
According to Section 2(k) of the Industrial Disputes Act, 1947, Industrial Disputes
means any dispute or difference between employers and employers, or employers and
workmen or between workmen and workmen which is connected with employment or
non-employment or terms of employment or conditions of labour of any person.
Industrial Disputes means any conflicts, unrest or dissentation between the workers and
the management on any ground. Industrial strifes constitute militant and organized protest
against existing industrial condition. They are symptoms of industrial unrest in the same
way that boils are symptoms of a disorder of body.
The Industrial Disputes Act provides elaborative and effective machineries for bringing
about Industrial Peace in an organization by setting up Authorities for the Investigation
and Settlement of industrial Disputes.
The three methods for the settlement of industrial disputes under the Industrial Disputes
Act, 1947 are:
CONCILIATION
ARBITRATION
ADJUDICATION

CONCILIATION
Conciliation or mediation signifies third party intervention in promoting the voluntary
settlement of the disputes.
The International Labour Organization has defined conciliation as: The practice by
which the services of a neutral third 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. It is a process of rational and orderly
Page 4

discussion of differences between the parties to a dispute under the guidance of a

conciliator.
The utility of conciliation as a method of settlement of industrial disputes lies in the fact
that conciliation preserves amity and good relations between the employer and the
workmen as conciliation is an out of the court settlement of the dispute.1

Authorities for Conciliation

1. Works Committee (Section 3) - Works committee is the very first body
constituted for the purpose of negotiation and settlement of industrial disputes by
way of conciliation.
According to Section 3(1), works committee is constituted by the employer who
employs or have employed hundred or more than hundred workmen on any day of
the preceding twelve months. It consists of equal number of the representatives of
the employers and the workmen engaged in the industrial establishment. The
representatives of the workmen are chosen from among the workmen in
consultation with their Trade Union, if there is any.
According to Rule 39 of the Industrial Disputes (Central) Rules, 1971, the
number of members constituting the works committee is fixed so as to afford
representation to the various categories, groups and classes of workmen engaged
in and to the sections, shops or departments of the establishment. But the total
number does not exceed twenty. The representatives of the employer who are
nominated by the employer as far as possible, are the officials in direct touch with
or associated with the working of the establishment.2

Duties - To promote measures for securing and preserving amity and good
relations between the employer and the workmen and to comment upon matters of
their common interest or concern.3
1

https://www.scribd.com/doc/27371147/Methods-of-Settling-Industrial-Disputes
Meenu Paul. Labour and Industrial Law. p. 62
3
Supranote 1
2

Page 5

2. Conciliation Officer (Section 4) - The appropriate government, by notification in

the official Gazette appoints a specific number of persons as it think fit to be as
conciliation officers. Conciliation officer may be appointed for a specified area or
for specified industries in specified area either as permanent or for a limited
period. A conciliation officer shall be deemed to be a public servant as per Sec. 21
of Indian penal code 1860.

Duties (1) When any industrial disputes exist, the conciliation officer should
hold conciliation proceedings in a prescribed manner without delay to have right
settlement.
(2) Whether settlement is reached or not, the conciliation officer must submit the
report within 14 days of the commencement of the conciliation proceedings or
within the date fixed by the appropriate government
(3) If the report submitted in satisfied to the appropriate Government, it may or
may not refer the dispute to any authority under the Act. If the Government is not
making any reference, it should record and communicate the reason to the
contending parties
(4) The duty of a conciliation officer is administrative and not judicial.4
3. Board of Conciliation (Section 5) The appropriate Government by a
notification in the official Gazette constitutes a Board of Conciliation for
promoting the settlement of an industrial dispute. The Board consists of a
Chairman and two or four other members, as the appropriate government thinks
fit. The Chairman shall be an independent person; unconnected with the dispute.
The other members shall be persons appointed in equal number to represent the
parties to the dispute. The person appointed to represent a party shall be appointed
on the recommendation of the party. The appropriate Government appoints a fit
person as it thinks, if any party fails to make a recommendation within a

Ibid.

Page 6

prescribed period. A Board of Conciliation can act only when a dispute is referred
to it by the Government.

Duties - (1) When a dispute has been referred to a Board, it will investigate the
matter affecting the merits and right settlement of the dispute without delay.
(2) Whether settlement is reached or not, the Board must submit the report within
two months of the date on which the dispute was referred to it.
(3) If no settlement is arrived, the Government may refer the dispute to the labour
court, Industrial Tribunal or National Tribunal.
(4) The time for submission of report may be extended by such period as may be
agreed to in writing by all the parties to the disputes.
(5) The report of the Board shall be in writing and shall be signed by all the
members of the Board.
(6) The report submitted shall be published by the appropriate Government with
in 30days from the receipt.
(7) A Board of Conciliation can only try to bring about a settlement. It has no
power to impose settlement on the parties to the dispute.5

ARBITRATION
Arbitration is a method of by which the parties to the dispute agree to refer voluntarily
the dispute for settlement to a third neutral person known as Arbitrator. The Arbitrator
after hearing both the parties to the dispute determines the rights and duties of the parties
to the dispute by its award which is binding on the parties.
An industrial dispute is settled by arbitration under Section 10A of the Industrial
Disputes Act, 1947. The parties to an industrial dispute may refer an industrial dispute
voluntarily by a written agreement to an Arbitrator under Section 10A of the Act.6
Voluntary arbitration became popular as a method of settling difference 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
5
6

Supranote 1
Supranote 2 at p. 63

Page 7

lent legal identity only in 1956 when Industrial Disputes Act, 1947 was amended to
include a provision relating to it. 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.
Authorities for Arbitration
1. Arbitrator The arbitrator is the person who is specified as arbitrator in the
arbitration agreement between the employer and the workmen under Section 10A
of the act. The presiding officer of a labour court, industrial tribunal or national
tribunal may be appointed as an arbitrator.
2. Umpire According to Sub-section 1A of of Section 10A, where an arbitration
agreement provides for a reference of the industrial disputes to an even number of
arbitrators, the agreement must provide for the appointment of another person as
umpire. The umpire has the right to enter upon the industrial disputes if the
arbitrators are equally divided in their opinion. The award given by an umpire is
deemed to be the arbitration award.
According to Section 2(aa) of the act of 1947, arbitrator includes umpire.
National Commission on Labour (1969 )identified following causes for the failure of
voluntary arbitration:
1. Lack of arbitrators who command the confidence of the parties to the disputes.
2. Law provides no appeal against the award given by arbitrator.
3. Easy availability of adjudication on the failure of negotiation and conciliation
4. The absence of simplified procedure to be followed in voluntary arbitration.7

http://www.slideshare.net/rahul9288/industrial-disputes-act1947-14048322?next_slideshow=1

Page 8

ADJUDICATION
Settlement of an industrial dispute by adjudication is a compulsory method of settlement
of the dispute. The adjudicating authority after hearing both the parties considering the
merits of the dispute and material on record determines the rights and duties of the parties
to the dispute and gives its award. The award of this authority is final and binding on the
parties if it is not appealed against to the appellate authority.
Industrial Disputes Act, 1947 provides for the settlement of an industrial dispute by way
of adjudication when the dispute is referred to adjudicating authority by the appropriate
government under Section 10 of the act. The appropriate government may do so at its
discretion even if the parties to the dispute have not applied to the appropriate
government for such reference. Adjudicating authority may be approached even before
the conciliatory authority.
Following are the authorities for adjudication under the Industrial Disputes Act,
1947:
1. Labour Court
2. Industrial Tribunal
3. National Tribunal

Labour Court
A labour court is a governmental judicial body which rules on labour or employment
related matters and disputes.8
Section 7 of the Industrial Disputes Act, 1947 deals with labour courts. The power of
appointment of a labour court under this section 7 of the act is vested with the appropriate
government. The appropriate government may constitute one or more labour courts. The
constitution of the labour court together with the persons constituting the labour court
8

en.m.wikipedia.org/wiki/Labour_Court

Page 9

should be notified in the official gazette. 9 Labour court consists of one person only
known as the Presiding Officer who is appointed by the appropriate government under
Section 7(2) of this act.
According to Section 7(3), a person to be appointed as the presiding officer of the labour
court must possess the following qualifications:a) he is, or has been, a judge of a High Court; or
b) he has, for a period of not less than three years, been a District Judge or an
Additional District Judge; or
c) omitted; or
d) he has held any judicial office in India for not less than seven years; or
e) he has been the Presiding Officer of a labour court constituted under any
Provincial Act or State Act for not less than five years; or
f) he is or has been a Deputy Chief Labour Commissioner (Central) or Joint
Commissioner of the State Labour Department, having a degree in law and at
least seven years experience in the labour department including three years of
experience as Conciliation Officer:
Provided that no such Deputy Chief Labour Commissioner or Joint Labour
Commissioner shall be appointed unless he resigns from the service of the Central
Government or State Government, as the case may be, before being appointed as the
presiding officer; or
g) he is an officer of the Indian Legal Service in Grade III with three years
experience in the grade.
According to Section 11(6) of the Act, the presiding officer and members of the Labour
Court are deemed to be public servants within the meaning of Section 21 of the Indian
Penal Code.
According to Section 11(8) of the Act, every Labour Court is deemed to be a civil court
for the purposes of Section 345, 346 and 348 of the Code of Criminal Procedure, 1973.10
Functions - The functions of Labour Courts as provided in the Act are:
9

Section 7(1)
Supranote 2 at p. 65

10

Page 10

1. Adjudication of Industrial Disputes relating to any matter specified (under

schedule II) in the Act.
2. Performing of such other functions as may be assigned to them under this Act.
The following matters are specified in the second schedule:
1. The propriety or legality of any order passed by an employer under the standing
order.
2. The application and interpretation of standing order.
3. Discharge or dismissal of workmen including reinstatement of or grant of or relief
to workmen wrongfully dismissed.
4. Withdrawal of any customary concession or privilege.
5. Illegality or otherwise, of a strike or lock out.
6. All matters other than those specified in the third schedule.
Duties Duties of the labour court are:
1. Adjudicate upon the industrial disputes relating to any matter specified in the
Second Schedule.
2. When an industrial dispute has been referred to a labour Court for adjudication,
within the specified period, it should submit award to the appropriate
Government.
3. It shall be published in such manner as the appropriate Government thinks fit
within a period of 30 days from the date of its receipt by the appropriate
Government.11

Industrial Tribunal

11

http://www.slideshare.net/bibinssb/industrial-disputes-act-1947-22499294

Page 11

Section 7A of the Industrial Disputes Act, 1947 deals with industrial tribunals. In our
country the Industrial Tribunals were for the first time created by the Industrial Disputes
Act, 1947. Commenting on this the Supreme Court has observed that the Tribunals under
the Act are invested with many trappings of a court but do not have same status as
Courts.12
Industrial Tribunal consists of one person only known as the presiding officer who is
appointed by the appropriate government under Section 7A(2). According to Section
7A(3), a person to be appointed as the presiding officer of a tribunal must possess the
following qualifications:
1. he is, or has been, a judge of a High Court; or
2. he has, for a period of not less than three years, been a District Judge or an
Additional District Judge; or
3. he is or has been a Deputy Chief Labour Commissioner (Central) or Joint
Commissioner of the State Labour Department, having a degree in law and at
least seven years experience in the labour department including three years of
experience as Conciliation Officer:
Provided that no such Deputy Chief Labour Commissioner or Joint Labour
Commissioner shall be appointed unless he resigns from the service of the Central
Government or State Government, as the case may be, before being appointed as the
presiding officer.
4. he is an officer of the Indian Legal Service in Grade III with three years
experience in the grade.
To advise the tribunal in the proceedings before it, two persons as assessors may be
appointed by the appropriate government under Section 7A(4) if the appropriate
government so thinks fit.
The power to constitute Industrial Tribunal is conferred upon the Appropriate
Government. It can be constituted by the notification in the official gazette. Further, one
or more tribunal, may in the discretion of the Appropriate Government, be constituted.13

12
13

J.K.Iron and Steel Co. Kanpur v. Iron and Steel Mazdoor Union, AIR 1956 SC 231
Supranote 2 at p. 66

Page 12

Functions the functions of the Industrial Tribunal are:

1. To adjudicate on industrial disputes relating to any matter, whether specified in
the second schedule or the third schedule.
2. To perform such other functions which may be assigned to it under the Act.
The following matters are specified in the third schedule:
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 standing orders;
7. Classification by grades;
8. Rules of discipline;
9. Rationalization;
10. Retrenchment of workmen and closure of establishment; and
11. Any other matter that may be prescribed.

IMPORTANCE OF INDUSTRIAL TRIBUNALS:

1. Only experienced persons of high integrity can be appointed as Presiding Officers
of the Tribunal.

Page 13

2. Almost any important matter can be submitted for adjudication to the Tribunal
including questions relating to wages, bonus, provident fund, gratuity and
dismissal etc.
3. Tribunals enjoy unlimited power so long as they act within the scope of their
authority.
Powers the tribunal is a judicial body or at any rate a quasi-judicial body. 14 Therefore,
a tribunal must serve notice upon the parties of the reference by name and any award
made without serving such notices is fundamentally wrong. It could make a suitable
award for bringing about harmonious relations between the employees and workmen and
can direct reinstatement of a workman if it is necessary in the interest of industrial peace.
The tribunal while arriving at a finding in a matter may rely on data available to it
otherwise than from adduced on the behalf of the parties.15
Duties Duties of the Industrial Tribunal are:

1.

It shall submit its award to the appropriate Government within a specified period
if an industrial dispute is referred to an Industrial Tribunal.

2.

The award shall be in writing and shall be signed by its presiding officer.

3.

The award shall be published by the appropriate government within a period of 30

days in a manner as the appropriate government thinks fit.

4.

As it is a quasi judicial body, it must serve notice upon the parties to the
reference by name before making any award.16

National Tribunal
Section 7B of the Industrial Disputes Act, 1947 deals with National Tribunal. Unlike
the other authorities under the Act the National Tribunal can only be constituted by the
14

Vishwamitra Press Kanpur v. Their Workmen, AIR 1953 SC 41

Electro-mechanical Industries Ltd. v. Tribunal, AIR 1950 Mad. 889
16
Suprenote 11
15

Page 14

Central Government. The power is to be exercised by issuing of notification in the

official gazette. The National Tribunal consists of one person only known as the presiding
officer who is appointed by the Central Government. A person to be qualified for the
appointment as the Presiding Officer of a National Tribunal must be or must have been a
judge of the High Court.
According to Section 7B (4), the Central Government may, if it thinks fit, appoint two
persons as assessors to advise the National Tribunal. The Central Government may
constitute one or more National Industrial Tribunal, by notification in the official gazette.
Functions - The National Industrial Tribunal is constituted for the adjudication of
industrial disputes which, in the opinion of the Central Government:
1. Involve questions of national importance;
2. Are of such a nature that industrial establishment situated in more than one state
are likely to be interested in, or affected by, such disputes.
Duties the duties of the National Tribunal are:
1. When an industrial dispute is referred to the National Tribunal for adjudication, it
shall submit its award to the appropriate government.
2. The award shall be in writing and shall be signed by the presiding officer of the
National Tribunal.
3. It shall publish the award within a period of 30days from the date of its receipt by
Central Government.17

Section 7C deals with disqualifications for the presiding officer of Labour Courts,
Tribunals and National Tribunal.
According to section 7C, no person can be appointed to or continue in, the office of the
Presiding Officer of a Labour Court, Tribunal or National Tribunal if :1. he is not an independent person; or
17

Supranote 11

Page 15

2. he has attained the age of sixty five years.18

BIBLIOGRAPHY
Meenu Paul. Labour and Industrial Law. Allahabad Law Agency. 8th
edition. 2008
Malik, P.L., Law of Industrial Dispute,11th edition 2005, Allahabad
law publications

18

Supranote 2 at p. 66

Page 16

 Padhi P.K., Labour and Industrial Laws Prentice Hall of India

Pvt.Ltd., ed. 2008, New Delhi.
www.en.m.wikipedia.org/wiki/Labour_Court
http://www.slideshare.net/rahul9288/industrial-disputes-act194714048322?next_slideshow=1
https://www.scribd.com/doc/27371147/Methods-of-SettlingIndustrial-Disputes
http://www.lawyersclubindia.com/articles/settlement/of/industrial/
Disputes.

Page 17