Power of government to refer Industrial

Disputes for adjudication: The adjudication

machinery

Assignment submitted by-

VIKAS PADAMWAR
BALLB (H), 5th Semester
ALS, AUC
Introduction
According to Section 2(k) of Industrial Disputes Act, 1947, “Industrial Dispute” means any
dispute between,

1) Employers and Employers

2) Employers and workmen
3) 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. These industrial disputes can be resolved by

1) Collective bargaining
2) Adjudication

The process of collective bargaining does not include any adjudication machinery but include
process of conciliation, negotiation etc. The adjudication machinery includes several boards
such as labour court, tribunals and national tribunals.

Power of government to refer disputes

Section 10(1) of Industrial Disputes Act, 1947 lays down that where the appropriate
Government is of opinion that any industrial dispute exists or is apprehended it may at any
point of time by an order in writing refer the dispute to one or the other authority specified in
clauses (a) to (d). This section reflects the underlining theme of the Act i.e. to provide for
cheap and expeditious machinery for resolution of an industrial dispute by referring the same
for adjudication and thereby avoid industrial unrest. It is apparent that the provision confers
wide and absolute discretion on the Government either to refer or refuse to refer an industrial
dispute. The second proviso to Section 10(1) deals with disputes relating to a public utility
service and provides that where a notice under Section 22 has been given in respect of such a
dispute, the appropriate Government shall unless it considers that the notice concerned is
frivolously or vexatiously given or that it would be inexpedient in the interest of industrial
peace and harmony to do so, may make a reference under this subsection. Thus, this proviso
makes it clear that reference can be made even if other proceedings under the Act have
commenced in respect of the same dispute. A Constitution Bench of the Hon’ble Supreme
Court in State of Bombay v. K.P. Krishnan 1 has opined that the appropriate Government
while considering whether or not to make a reference is not precluded from considering the
matter beyond the report under Section 12(5) in coming to a conclusion as to whether a case
for reference has been made on merits and if on such prima facie examination the
Government comes to conclusion that no case is made out it may refuse to make the
reference. If in such a dispute the efforts at conciliation fail and a failure report is submitted
under Section 12(4) Government may have to act under Section 12(5) and decide whether
there is a case for reference. Now, in dealing with such a question relating to a public utility
service considerations prescribed by the second proviso to Section 10(1) may be relevant, and
Government may be justified in refusing to make a reference if it is satisfied that the notice
given is frivolous or vexatious or that reference would be inexpedient. This decision was
followed in Bombay Union of Journalists v. State of Bombay 2wherein the Hon’ble Supreme
Court observed that under Section 10(1) the Government while taking a decision on making
or not making a reference is not precluded from considering prima facie the merits of the
dispute and taking other relevant considerations into account. The Government should not
purport to reach a final decision on question of law or fact. Nevertheless the Court
emphasised that where the claim is patently frivolous, clearly belated or may have adverse
impact on general relations between the employers and employees of the region the
Government may refuse to make a reference.

The adjudicatory authorities, viz., Labour Courts, Industrial Tribunals and National
Tribunals, as provided under the Industrial Disputes Act are specialized Tribunals functioning
outside the hierarchy of ordinary courts and are entrusted with the task of adjudication of
industrial disputes. Compulsory adjudication may be considered as the soul of the I.D.Act.
Majority of the provisions of the I.D.Act, as originally enacted, deal with the adjudication
machinery and the related aspects. Justice D.A.Desai very aptly described the nature and
philosophy of compulsory adjudication in his judgment in Workmen of Hindustan Lever Ltd
v. Hindustan Lever Ltd3 in the following words:

“The concept of Compulsory adjudication was statutory ushered in with a view to providing a
forum and compelling the parties to resort to the forum for arbitration so as to avoid
confrontation and dislocation in industry. The Legislature considered it wise to arm the

1
AIR 1960 SC 1223
2
1964 AIR 1617
3
AIR 1999 SC 525
Government with the power to compel the parties to resort to arbitration with a view to avoid
confrontation or trial of strength which are considered wasteful from national and public
interest point of view. For assuring uninterrupted production, peace and harmony, industrial
relations is necessary.”

The Adjudicating machinery

There are mainly three adjudicating authority as under:

1) Labour courts
Section 7 of the I.D. Act provides for the constitution of Labour Court and specifies
the qualifications for the Presiding Officer of a Labour Court. The person shall not be
qualified for appointment as the presiding officer of a Labour Court unless
o he is, or has been a judge of a High Court; or
o he has, for a period of not less than three years, been a District Judge or an
Additional District Judge; or
o he has held any judicial office in India for not less than seven years; or
o he has been the presiding officer of a Labour Court constituted under any
provincial Act or state Act for not less than five years.
2) Industrial Tribunals
Section7A provides for the constitution of one or more Tribunals by an appropriate
Government for Adjudication of industrial disputes relating to any matter, whether
specified in the Second or Third Schedule, and for performing such other functions as
may be assigned to them under this Act. A Tribunal shall consist of one person only
to be appointed by the appropriate Government. A person shall not be qualified for
appointment as the presiding officer of a Tribunal unless:
o he is, or has been a judge of a High Court; or
o he has, for a period of not less than three years, been a District Judge or an
Additional District Judge.

The appropriate Government may also appoint two persons as assessors to advise the
Tribunal in the proceeding before it. The maters specified in the Third Schedule, which are
normally referred to Tribunals for adjudication are disputes arising out of demands of
workmen for better service conditions i.e, interests disputes.
 3) National Tribunal
As per Section 7B, the Central Government may constitute one or more National
Industrial Tribunals for the adjudication of industrial disputes which, in the opinion of
the Central Government, involve questions of national importance or are of such a
nature that industrial establishments situated in more than one State are likely to be
interested in or affected by such disputes. A National Tribunal shall consist of one
person only to be appointed by the
Central Government. A person shall not be qualified to be appointed as the Presiding
Officer of the National Tribunal unless he is or has been, a judge of a High Court. The
Central Government may also appoint two persons as assessors to advise the National
Tribunal in the proceeding before it.

Disqualification

Sec.7-C lays down the following two disqualifications for the appointment or continuation of
a person as the Presiding Officer of any of the above three adjudicatory bodies.

o He is not an independent person; or

o He has attained the age of sixty-five years.

Sec. 2 (i) of the Act defines an independent person as follows: “a person shall be deemed to
be “independent” for the purpose of his appointment... if he is unconnected with the industrial
dispute referred or with any industry directly affected by such dispute.” The proviso to the
definition says that no person shall cease to be independent by reason only of the fact that he
is a shareholder of an incorporated company, which is connected with or likely to be affected
by such dispute. But in such a case he shall disclose to the appropriate Government the nature
and extent of the shares held by him in such company.

Conclusion

And hence these are the three basic adjudicating body which are responsible for the
adjudication of the disputes referred by the government on the basis of the merits of the
disputes.