LABOUR LAW ASSIGNMENT

PREVENTION AND SETELLMENT OF INDUSTRIAL

DISPUTE

SUBMITTED TO : DR. SHOWKAT AHMAD WANI

SUBMITTED BY : POOJA RANI
REG.NO.: 11605384
INTRODUCTION

Industrial disputes are organized protests against existing terms of employment or conditions of
labor . According to the section 2 (k) of Industrial Dispute Act, 1947, an 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 and conditions of employment of any person”.

In practice, Industrial dispute mainly refers to the strife between employers and their employees.
An Industrial dispute isn't a private dispute of anybody person. It generally affects an outsized
number of workers’ community having common interests.

PREVENTION OF INDUSTRIAL DISPUTES:

Industrial peace is of vital importance for increasing industrial production and for securing
economic prosperity. Industrial unrest disturbs the tranquility of the country and benefits nobody.
The avoidance of conflict between employer and employee which ends up in strike is, therefore,
of utmost significance. If despite best efforts, any dispute is likely to occur or actually occurs, an
elaborate machinery is needed to bring about its amicable settlement.

In the production process there are various points where a conflict of interest between labour and
management arises. The conflict later on develops into a dispute and the production process itself
gets disturbed. The causes of strikes in India are partly psychological, partly political but
predominantly economic, low wages or wage cuts, regardless of inflation , intolerable conditions
of labor etc., have provoked a number of strikes in this country. Besides undeserved
punishments, mass discharges assaults, abuses and misbehaviours have also led to several
strikes. Other important causes of strikes are the absence of adequate machinery for collective
bargaining, the absence of close contact and understanding between employers and workers and
in some cases, the utter disregard of the human factor by employees. In this dispute, the worker’s
side is represented by the trade unions and the employer’s side whether in a public or private
sector, is represented by the management of the undertaking. These two institutions developed in
course of time along with the mechanization of production process. When a dispute arises, it is
natural that every party to the dispute feels that its contentions are justified and reasonable and
that the dispute should be settled in its favour. As a result of voluntary efforts the system of
collective bargaining, has been evolved. The Government intervention within the prevention and
settlement of such disputes comes through statutory measures. The existing arrangements for the
prevention and settlement of commercial disputes could also be said to contains –

1.Legislative measures, and

2. Other measures or voluntary arrangements.

These measures provide two types of machinery.

One is for the prevention of disputes and it includes Works Committee and Joint Management
Committees at the undertaking level or bi-partite bodies. At the industry level or tri-partite
bodies, there are Wage Boards and Industrial Committees and at the State level, there are Labour
Advisory Boards. At the National level, there are Indian Labour Conferences and therefore the
Standing Labour Committees, etc. Measures like appointment of welfare officers, adoption of the
Code of Discipline, Standing Orders, Code of Conduct and a well-defined Grievance procedure
also help in preventing industrial disputes. 2. The other is for settlement of industrial disputes
and it consists of Conciliation Officers and Boards, Courts of inquiry, Voluntary Arbitration and
Adjudication by Labour Courts or Tribunals.

The consequences of an Industrial dispute are going to be harmful to the owners of industries,
workers, economy and therefore the nation as an entire , which ends up in loss of productivity,
profits, market share and even closure of the plant. Hence, Industrial disputes got to be averted
by all means.

Prevention of commercial disputes may be a pro-active approach during which an organisation

undertakes various actions through which the occurrence of commercial disputes is prevented.
Like the old saying goes, “prevention is best then cure”.

MTHODS OF PREVENTION OF IDUSTRIAL DISPUTES

 MODEL STANDING ORDERS: Standing orders define and regulate terms and
conditions of employment and bring about uniformity in them. They also specify the
duties and responsibilities of both employers and employees thereby regulating standards
of their behavior. Therefore, standing orders are often an honest basis for maintaining
harmonious relations between employees and employers.

Under Industrial Dispute Act, 1947, every factory employing 100 workers or more is
required to border standing orders in consultation with the workers. These orders must
be certified and displayed properly by the employer for the knowledge of the workers.

 CODE OF COMMERCIAL DISCIPLINE: The code of commercial discipline

defines duties and responsibilities of employers and workers. The objectives of the code
are:

• To secure settlement of disputes by negotiation, conciliation and voluntary arbitration.

• To eliminate all forms of coercion, intimidation and violence.

• To maintain discipline in the industry.

• To avoid work stoppage.

• To promote constructive co-operation between the parties concerned at all levels.

 WORKS COMMITTEE: Every industrial undertaking employing 100 or more workers

is under an obligation to line up a works committee consisting equal number of
representatives of employer and employees. The main purpose of such committees is to
promote industrial relations. According to Indian Labor Conference work committees
are concerned with:-

Administration of welfare & fine funds.

• Educational and recreational activities.

• Safety and accident prevention

• Occupational diseases and protective equipment.

• Conditions of work such as ventilation, lightening, temperature & sanitation including

latrines and urinals.

• Amenities such as drinking water canteen, dining rooms, medical & health services.
 The following items are excluded from the preview of the work committees.

• Wages and allowances

• Profit sharing and bonus

• Programs of planning and development

• Retirement benefits

• PF and gratuity

• Housing and transport schemes

• Incentive schemes

• Retirement and layoff

 JOINT MANAGEMENT COUNCILS: Just to form a start in labour participation in

management, the govt: suggested in its Industrial Resolution 1956 to line up joint
management councils. It consists of equal numbers of workers and employers (minimum
6 & maximum 12) decisions of the JMC should be unanimous and will be implemented
with none delay. JMC members should be given proper training. JMC should look after
3 main areas:-

1. Information sharing

2. Consultative

3. Administrative

Representation of workers to the JMCs should be supported the nomination by the

representation.

Objectives

• Satisfy the psychological needs of workers

• Improve the welfare measures

• Increase workers efficiency

• Improve the relation and association between workers, managers and promoters.

JMC deals with matters like:-

 • Employee welfare

• Apprenticeship scheme

 JOINT COUNCILS: Joint Councils are found out for the entire unit and deals with
matters relating optimum production and efficiency and therefore the fixation of
productivity norms for man and machine for the as a whole. in every industrial unit
employing 500 and more workers there should be a Joint Council for the entire unit.

FEATURES

• Members of the council must be actually engaged in the unit.

• The chief executive of the unit will be the chairman of the council and vice chairman
will be nominated by worker members.

• Term of the council will be two years.

• JC shall meet at once in a quarter.

• Decision of the council will be based on consensus and not on voting.

FUNCTIONS

• Optimum use of raw materials and quality of finished products

• Optimum production, efficiency and function of productivity norms of man and

machine as a whole.

• Preparation of schedules of working hours and of holidays.

• Adequate facilitates for training.

• Rewards for valuable and creative suggestions received from workers.

 NEGOTIATION : Collective Bargaining may be a process during which the

representatives of the employer and of the workers meet and plan to negotiate a contract
governing the employer-employee-union relationships. Collective Bargaining involves
discussion and negotiation between two groups on the terms and conditions of
employment.
MACHINERY FOR SETTLEMENT OF INDUSTRIAL DISPUTES:

1. CONCILIATION: Conciliation refers to the method by which representatives of

employees and employers are brought together before a 3rd party with a view to debate ,
reconcile their differences and arrive at an agreement through mutual consent. The third
party acts as a facilitator during this process. Conciliation may be a sort of state
intervention in settling the economic Disputes. The Industrial Disputes Act empowers
the Central & State governments to appoint conciliation officers and a Board of
Conciliation as and when things demands.

CONCILIATION OFFICER: the acceptable government may, by notification within

the official gazette, appoint such number of persons because it thinks fit be the
conciliation officer. The duties of a conciliation officer are

a) To hold conciliation proceedings with a view to arrive at amicable settlement between

the parties concerned.

) to research the dispute so as to cause the settlement between the parties concerned.

c) To send a report and memorandum of settlement to the acceptable government.

d) To send a report back to the govt stating forth the steps taken by him just in case no
settlement has been reached at.

The conciliation officer however has no power to force a settlement. He can only
persuade and assist the parties to succeed in an agreement. The Industrial Disputes Act
prohibits strikes and lockouts during that point when the conciliation proceedings are
ongoing .

2. ARBITRATION: A process during which a neutral third party listens to the disputing
parties, gathers information about the dispute, then takes a choice which is binding on
both the parties. The conciliator simply assists the parties to return to a settlement,
whereas the arbitrator listens to both the parties then gives his judgement

ADVANTAGES OF ARBITRATION:

• It is established by the parties themselves and therefore both parties have good faith in
the arbitration process.

• The process in informal and flexible in nature.

• It is based on mutual consent of the parties and therefore helps in building healthy
Industrial Relations.
DISADVANTAGES:

) to research the dispute so as to cause the settlement between the parties concerned.

c) To send a report and memorandum of settlement to the acceptable government.

d) To send a report back to the govt stating forth the steps taken by him just in case no
settlement has been reached at.

• Labor court

• Industrial Tribunal

• National Tribunal

a) LABOR COURT: the acceptable government may, by notification within the official
gazette constitute one or more labor courts for adjudication of commercial disputes
concerning any matters laid out in the second schedule of Industrial Disputes Act.
Labour Court is one among the adjudication authorities found out under the economic
Disputes Act, 1947 it had been introduced by amending Act in 1956. Setting up of a
Labour Court is at the discretion of the govt . It is the one man Court presided over by an
individual who has held either a judicial position in India for not but seven years or who
has been a leader of Labour Court constituted under any state act for not but five years
They are:

• Dismissal or discharge or grant of relief to workmen wrongfully dismissed.

• Illegality or otherwise of a strike or lockout.

• Withdrawal of any customary concession or privileges.

Where an Industrial dispute has been mentioned a labor court for adjudication, it shall
hold its proceedings expeditiously and shall, within the amount laid out in the order
referring such a dispute, submit its report back to the acceptable government.

b) INDUSTRIAL TRIBUNAL: the acceptable government may, by notification within

the official gazette, constitute one or more Industrial Tribunals for the adjudication of
commercial disputes concerning the subsequent matters:

• Wages

• Compensatory and other allowances

• Hours of work and rest intervals

• Leave with wages and holidays

• Bonus, profit-sharing, PF etc.

• Rules of discipline

• Retrenchment of workmen

• Working shifts other than in accordance with standing orders

It is the duty of the economic Tribunal to carry its proceedings expeditiously and to
submit its report back to the acceptable government within the required time.

c) National Tribunal: The central government may, by notification within the official
gazette, constitute one or more National Tribunals for the adjudication of commercial
Disputes in

• MATTERS OF NATIONAL IMPORTANCE

• Matters which are of a nature such that industries in more than one state are likely to be
interested in, or are affected by the outcome of the dispute.

It is the duty of the National Tribunal to carry its proceedings expeditiously and to
submit its report back to the central government within the stipulated time

Collective Bargaining

Code of Discipline,

iii. Arbitration

iv. Permanent Negotiating Machinery and Joint Consultative Machinery, and

v. Tripartite Bodies.

3. COLLECTIVE BARGAINING:

Collective bargaining may be a process of dialogue and negotiation between parties, one
or both of whom may be a group of persons acting together . Resulting bargain is an
understanding on the terms or conditions under which a unbroken service is to be
performed.

More specifically, negotiation is that the procedure by which an employer or employers

and a gaggle of employees agree upon the conditions of labor . Prof. Allan Flanders has
argued that collective bargain is primarily a political instead of an process .

Collective bargaining may be a method by which management and labor may explore
each other’s problems and viewpoints and develop a framework of employment relations
and a spirit of cooperative goodwill for their mutual benefit. It are often described as
endless , dynamic process for solving problems arising directly out of the employer-
employee relationship.

4. CODE OF DISCIPLINE:

The code of discipline was approved by all central organizations of workers and
employers at the Sixteenth Session of Indian Labor Conference in June, 1958 at the
initiative of the then Union Labor Minister. It has also been accepted by an outsized
number of other employers and workers’ organizations.

The code applies to all or any public sector companies and corporations except defense,
railways and ports and docks. The code applies with certain modifications to the Federal
Reserve Bank of India, depository financial institution of India and therefore the
Department of Defense Production.

The Code consists of three sets of principles to be followed by the parties to labor
relations.

5. ARBITRATION:

The procedure of voluntary arbitration in India is governed by two different sets of rules
consistent with whether the arbitration is instituted under the Central or State Acts or
under the Code of Discipline. Where the parties invoke arbitration as per the provisions
of legislation its process is entirely governed by statutory prescriptions.

1. UNFAIR LABOUR PRACTICES:

On the part of employers and their unions:

i. To interfere with, restrain from, or coerce workmen in the exercise of their right to
organize, form, join or assist a trade union or to engage in concerted activities for the
purposes of collective bargaining or other mutual aid or protection.

ii. To dominate, interfere with or contribute support, financial or otherwise, to any trade
union.

iii. To establish employer-sponsored trade unions of workmen.

iv. To encourage or discourage membership in any trade union by discriminating against

any workmen.

v. To discharge or dismiss workmen by way of victimization or by falsely implicating a

workman in a criminal case on false evidence.
vi. To abolish the work of a regular nature being done by workmen, and to give such
work to contractors as a measure of breaking a strike. On the part of workmen and trade
unions:

vii. It would amount to unfair labour practice if workmen and trade union indulge in:

viii. To advise or actively support or instigate any strike deemed to be illegal.

ix. To coerce workmen in the exercise of their right to self-organization or to join a trade
union or refrain from joining any trade union.

x. Force a recognised union to refuse to bargain collectively in good faith with the
employer.

xi. To indulge in coercive activities against certification of a bargaining representative.

xii. To stage demonstrations at the residences of employers or the managerial staff

members.

xiii. To incite or indulge in willful damage to employer’s property connected with the
industry.

xiv. To indulge in acts of force or violence or to hold out threats of intimidation against
any workman with a view to prevent him from attending work.

2. REGULATION OF STRIKES AND LOCKOUTS:

The right of employees to go on strike and the right of employer to impose lock-out is
not without regulation. The Industrial Disputes Act puts several restrictions on the rights
of both the employees and employers. A strike or lock-out commenced or continued in
contravention of these restrictions is termed illegal and there is severe punishment
provided for the same. Illegal strikes and lockouts are those which are illegal from the
time of their commencement and those which are not illegal at the time of
commencement but become illegal later.

Section 22 and 23 of the Industrial Disputes Act provide for certain restrictions which if
not followed make strikes and lock-outs illegal from their very commencement. Section
22 regulates strikes and lock-outs in public utility services only. Section 23 regulates
strikes and lock-outs in any industrial establishment. If a strike or lock-out is continued
in contravention of a prohibit order issued under Section 10(3) or Section 10-A (4-A) it
becomes illegal under Sec.24.

3. Law Relating to Layoff, Retrenchment and Closure:

Section 25 – M of IDA prohibits layoff without prior permission of the acceptable

government in case of an industrial establishment in which not less than one hundred
workmen were employed on an average per working day for the preceding 12 months
unless such layoff is due to shortage of power or to natural calamity, and in the case of a
mine, such layoff is due also to fire, flood, excess of inflammable gas or explosion.

Section 25C provides for statutory compensation to be paid to a laid off worker equal to
50 % of the total of the basic wage and dearness allowance, for all days during which he
is laid off, provided he has employed continuous service of one year or more.

RETRENCHMENT:

Section 25F and 25N regulates retrenchment in industrial establishment. Section 25FD is
applicable to those industrial establishments in which less than one hundred workmen
have been employed on an average per working day for the preceding 12 months and
Section 25N is applicable to those industrial establishments in which one hundred or
more workmen have been employed on an average per working day for the preceding
twelve months.

Under Sec.25-F no workman who has been in continuous service for not less than one
year under an employer shall be retrenched by that employer until the workman has been
given one month’s notice or the workman has been paid in lieu of such notice, wages for
the period of the notice.

Under Section 25N no workman who has been in continuous service for not less than
one year under an employer shall be retrenched by that employer until the workman has
been given 3 months’ notice or the workman has been paid in lieu of such notice, wages
for the period of the notice and the prior permission of the appropriate government has
been obtained on an application made in this behalf.

CLOSURE:

Section 25 FFA requires an employer intending to close down an undertaking to serve a

notice in the prescribed manner on the appropriate government in at least 60 days before
the date on which the intended closure is to be effective stating the reasons for the
intended closure of undertaking.

Where an undertaking is closed down for any reason whatsoever, Section 25FFF
imposes a liability on the employer to give to every workman who has been in
continuous service for not less than one year in that undertaking one month’s notice and
compensation equal to fifteen day’s average pay for every completed year of continuous
service, or any part thereof in excess of six months.
4. CHANGE IN CONDITIONS OF SERVICE:

Section 9A of the Industrial Disputes Act prohibits an employer from making any
change in the conditions of service of a worker in respect of matters listed in Schedule
IV of the Act without giving to the working a 21 days notice in the prescribed form.

No notice is, however, required if the change is being effected in pursuance of any
settlement, award or any rule or regulation notified by the appropriate government in the
Official Gazette. If no objection is received from the workman till the expiry of the
notice period, the employer may effect the proposed change after the notice period.

But if the proposed change is not acceptable to the concerned workman, he may raise an
industrial dispute before the conciliation office.

IV. PERMANENT NEGOTIATING MACHINERY AND JOINT

CONSULTATIVE MACHINERY:

Permanent Negotiating Machinery operates within the Railways and Post and Telegraphs
industries. The decision to line permanent negotiating machinery was announced by the
Railway Board in Dec.1951. The machinery has three tiers.

The first tier consists of negotiation between the Divisional Superintendent and therefore
the branch of the recognized unions within the area and between the overall Management
of the Zonal Railways and the central executive of the recognized unions.

The second tier consists of negotiations between the Railway Board and therefore the
recognized federations of railway men’s union. The third tier assumes the shape of a
billboard hoc railway tribunal which must have equal number of representatives of
railway labour and railway administration with a neutral chairman.

V.JOINT CONSULTATIVE MACHINERY:

Joint Consultative Machinery deals with issues associated with service conditions within
the Government sector. This not only covers the economic employees of the Central
Government who come under the definition of a workman under the IDA. The
machinery has three tiers. National Council at national level to affect matters like
minimum remuneration, dearness allowance, pay etc. There are Department Councils at
the department levels and Regional or Office Councils at the regional or local levels.

If there's no agreement between the 2 sides then issues concerning pay and every one
owances weekly hours of labor and leave must be mentioned compulsory arbitration and
all other issues are often decided by the govt itself consistent with its own judgement. In
case of arbitration also, Government has power to switch the award within the national
interest.
V. TRIPARTITE BODIES:

There are variety of tripartite bodies that operate at the Central and State levels. The
Indian Labour Conference, Standing Labour Committees, Wage Boards and Industrial
Committees operate at the Central level and State Labour Advisory Boards operate the
State level. All these bodies play a crucial role in reaching at voluntary agreements on
various labour matters. The recommendations of those bodies are recommendatory in
nature.

Prevention of Industrial Disputes at Statutory Level:

The Industrial Disputes Act provides for preventing industrial disputes for settling them.

The Act attempts to prevent disputes by:

1. Prohibiting Unfair Labour Practices

2. Regulating strikes and lockouts

3. Laying down law relating to lay off, retrenchment and closure

4. Prohibiting change in conditions of service of a worker.

SUGEESTIONS

In the foregoing pages it's noticed that preventive and curative machinery does exist at
the State level to affect the issues of commercial disputes, but generally their working
has not been as satisfactory because it should are . Also the management should develop
a mechanism to understand the issues of the workers and their underlying causes and
will attempt to remove them expeditiously. a while limit can also be fixed for the
adjudication proceedings to be completed. the govt should either found out separate
conciliation machinery or should increase the amount of conciliation officers. Similarly
the amount of Labour Courts should even be increased in order that disputes could also
be solved quickly. in particular the personnel office should be quite alert and will
endeavour to nip the matter within the bud. 2. Voluntary arbitration should be
emphasised upon within the settlement of commercial disputes. The parties should be
allowed a minimum period of two months to succeed in a settlement of dispute through
negotiations and another 2 months for conciliation proceedings, if negotiations fail. If
both of those means fail, the matter should then attend arbitration. The parties must
exhaust all means of settling their disputes before approaching for adjudication or
resorting to any protest . for creating arbitration effective and useful the persons selected
as arbitrators should be of high integrity with no leanings towards any party, an
individual of upright character in whom the parties may have absolute faith and an
individual of mature experience and having some legal knowledge about the economic
relations while giving decision, the arbitrator should absorb to consideration the
subsequent points a. Decisions should be supported some principle, b. It should be
workable c. It should be supported the approach “Split the difference” 3. The employers
of the units have often indulged in to unfair practices like threatening the worker with
discharge or dismissal if they join a union, threatening a lockout if a union is made ,
granting a raise at crucial period of union organisation with a view to undermining the
efforts of the union at organisation, refusing to market an employee to higher post on

account of his union activities or giving unmerited promotions to any employee with a
view to making discard among other employees or undermine the strength of the union.
the workers on their part, indulge into such practices like refusing to figure overtime
when exigencies of service require performance of overtime work, encouraging or
instigating slowing down of production so as to compel the employer to simply accept
the stress of the workers or any section thereof striking members of a union to picket
non-striking employees to debar the latter physically from entering the work place and
refusing to barter collectively in straightness with the employer and dishonour an
agreement entered into the course of negotiations or conciliation. These unfair practices
on the a part of both parties should be restricted by imposing penalty on the offenders
and persuading them to adopt fair practices in consonant with the wants of the Labour
Code. Labour Court should be the acceptable authority to affect the complaints
concerning unfair labour practices. 4. Another area which has rather remained neglected
is that of a correct grievance procedure. it's suggested that statutory backing should be
provided for the formulation of an efficient grievance procedure, which should be
simple, flexible, less cumbrous and more or less on the lines of present Model Grievance
Procedure. It should be time bound and will have a limited number of steps say,
approach to the supervisor, then the departmental Head and thereafter a regard to the
Grievance Committee consisting, of equal members of management and union
representatives. 5. Management should honour all agreements and enforce them without
allowing much delay . 6. If there's any change within the conditions of service then a
notice of 21 days duration about the proposed changes to tend by the employer. Such
notice should be necessary while making changes within the conditions of service of
employees in respect of hours of labor and rest interval, withdrawal of any customary
concessions or privilege or change in usage or any increase or reduction within the
number of person employed in any occupation, process or department or shift. However,
no notice need tend if the change is effected under a settlement or a gift or with the
consent of the workers .

Finally, in bringing a few change within the outlook and attitudes of the employers and
therefore the employees, the govt is additionally required to play a constructive role
during a matter that it doesn't assume the role of an excellent arbitrator of fortunes of
both employers and employees but it adopts the role of their friend, philospher and
guide. It are often summed up with this that it need be realised by both parties that their
interests are inextricably inter-woven within the industry they work and thus , rather than
counting on outside help i.e. the State or any party , they need to assist themselves and
there lies the answer of the issues of commercial harmony.

REFRENCES
https://www.businessmanagementideas.com/

https://www.owlgen.in/

https://www.mbaknol.com/

http://www.yourarticlelibrary.com/