Industrial Disputes Act

Industrial Disputes Act is the most important legislation dealing with industrial relations. It governs
the relationships between an employer and an employee and the conflicts that could arise as a result of
that relationship.
Section 48 of the IDA defines ‘workman’, ‘employer’, and ‘Industrial Dispute’

Sec 48 - ‘workman’ means any person

a)
• who has entered into or works under a contract with an employer
• whether the contract is expressed or implied, oral or in writing,
• and whether it is a contract of service or of apprenticeship or a contract personally to
execute any work or labor

b) includes any person ordinarily employed under any such contract whether such person is or
is not in employment at any particular time, and

c) Includes any person whose services have been terminated.

This definition can be split up into three limbs as a, b, c, in the definition given above.

Sec 48- ‘employer’ means any person

a) who employs any workman or

b) any person on whose behalf any other person employs any workman and
c) any person who on behalf of any other person employs any workman.

Sec 48- ‘industrial dispute’ means

a) any dispute or difference between an employer and a workman or

b) between employers and workmen or
c) between workmen and workmen
d) connected with the employment or non-employment, or
e) the terms of employment, or
f) with the conditions of labor, or
g) the termination of the services, or
h) the reinstatement in service, of any person.

Mechanism for settlement of Industrial Disputes in Disputes Act

Power and functions of Commissioner
Sec 2 of the IDA defines the duty of a commissioner

Sec 2(1) gives wider power to the commissioner

• Commissioner need not have been formerly informed or noticed of a dispute to exercise his powers
for a possible settlement.
• He may exercise powers not only when an ID exists but also when he is satisfied that such a
dispute is apprehended.
• In his attempt to resolve a dispute, his powers are not limited to the mode of conflict
resolution contained in the act.

Sec 3 provides the machinery prescribed by the act.

Sec 3(1) The commissioner may

a) If there is any agreement between the employers and workmen already exists, the industrial
dispute to be referred for settlements by means of such agreements. (Collective agreement)
b) Make an attempt to settle the industrial dispute by conciliation.

c) Refer the industrial dispute to an authorized officer (defined in Sec 48) for conciliation.

d) i. Settlements by arbitration
This is voluntary arbitration. Both parties can nominate a arbitrator. If not, commissioner
appoints the arbitrator. If the parties do not consent to go for arbitration the commissioner
cannot force them to go for arbitration.

ii. Labour Tribunal

The commissioner shall go for voluntary arbitration only if the conciliation efforts fail. When
the commissioner fails in setting the disputes by conciliation and voluntary arbitration, he is
empowered to repeat such procedure over and over again and ultimately if all attempts fail he
shall refer the dispute to Minister for him to take necessary steps under sec 4.

Powers and functions of Minister

Sec 4 defines power and functions of the minister.
According to sec 4
 a) The minister may if the industrial dispute is a minor dispute, refer it to an arbitration by an
arbitrator appointed by the minister even without having the consent of the parties to the sipute.
This is compulsory arbitration.

b) Refer the dispute to a labour tribunal

c) Refer the dispute to an Industrial Court

Nadarajah V. Krishnadasan - It was held in this case that when the minister has duly made an order
under sec 4(1) of the IDA, referring an ID for settlement by arbitration he has no power to revoke the
said order of reference.

Arbitration

Conceptually the basic notion of arbitration is the settlement of a dispute between two contending
parties by reference to the decision of an outsider at their request. While conciliation is a friendly
interference to help the parties to arrive at a settlement of their differences, arbitration is the submission
of a dispute to the judgment of a third party. Whilst therefore, the conciliator does not exercise quasi-
judicial functions, the Arbitrator performs quasi-judicial functions.

According to section 15A a labor tribunal may also function as an arbitrator.

Forms of Arbitration

The IDA envisages two forms of arbitration.

a. Voluntary Arbitration

Section 3(1)(d) provides for voluntary arbitration and sets out that if the parties to the industrial consent
the commissioner may refer that dispute by an order in writing, for settlement by arbitration to an
arbitrator nominated jointly by such parties, or in the absence of such nomination, to an arbitrator or
body of arbitrators appointed by the commissioner.

Section 3(2) provides for the appointment of the arbitration panel and requires a body of arbitrators to
consist of

i. A panel nominated by the employers,

ii. A person nominated by the workmen and,
 iii. A person nominated as chairman jointly by the employers and workmen

In the absence of such nomination the arbitration panel is nominated by the commissioner.

b. Compulsory Arbitration

Section 4 of the IDA empowers the Minister to refer an industrial dispute which he is of the opinion to
be a minor dispute by an order in writing for settlement by arbitration to an arbitrator appointed by the
Minister or to a labour tribunal, notwithstanding that the parties to such dispute do not consent such
referee. The determination as to whether a particular dispute is major, or minor has been left to the
discretion of the Minister and the Minister and the Act does not provide any guidelines on that behalf.

Powers of the Arbitrator

According to section 17 the arbitrator shall

• Make all such inquiries in to the dispute as he may consider necessary

• Hear such evidence as may be tendered by the parties
• Make such award as may appear to him as just and equitable

Awards
According to section 18 the award made by an arbitrator is published in the gazette.
According to section 19 of the IDA every award of an arbitrator made in an industrial dispute is binding
on the parties, trade unions, employers and workmen referred to in the award and the terms of the
award become implied terms in the contract of employment.

Termination of an award

According to section 20 in order to terminate an award, written notice must be given to the
commissioner with copies to other parties.

Termination take place

• Upon expiration of 12 months from the date on which the award came into force, or
• Upon the expiration of 3 months immediately succeeding the month in which the notice was
received by the commissioner.
 Labour Tribunal
Establishment
Part IV which was incorporated into the Industrial Disputes Act by amending Act No. 62 of 1957
established Labor Tribunal.

Section 31A of the Industrial Disputes Act empowers the Minister to establish any number of labor
tribunals each consisting of one person.

Applications to a Labor Tribunal

Section 31B (1) of the IDA provides for the circumstances under which an industrial dispute can be
referred to a labor tribunal for settlement.

Accordingly, a workman or a trade union on behalf of a workman who is a member of that union,
may make an application in writing to labor tribunal for relief or redress in respect of

A. Termination of his services by his employer

B. Gratuity and other benefits
▪ Gratuity or other benefits due to him on termination
▪ Amount of such gratuity
C. Forfeiture of gratuity
▪ Forfeiture of Gratuity has been correctly made in accordance with the Gratuity
Act 1983
D. Others matters relating to terms of employment and conditions of labor as may be prescribed.

Labour Tribunal is not bound by contract of employment.

Breach of Contract is not necessary.

▪ Application need not be in the identical format. De

Silva Case (Sriskantha’s Law Report (3) p.01)

▪ Not much reliance on legal technicalities.

Gunasinghe Case (72 NLR 76)

▪ Widow of the employee can be substituted.

Amarajeewa Case (1993) 2 Sri LR 327

▪ No case against the widow of the employer.

Arnolda Case 64 NLR 153
 ▪ Employer’s heir cannot be substituted in labour tribunal proceedings.
Savoy Theaters Ltd Case (1982) 2 Sri LR 753.

▪ Relief from a district court is not ousted.

Fernando Case (2011) BLR 242

Application may be made to the Labour Tribunal by a “workman” within the meaning of section 48
of the Industrial Dispute Act or by a Trade Union on his behalf.

The application of the Trade Union must be signed by the President or Secretary of the Union.

If there are one employer two copies of application should be tendered to the tribunal. In case there are
two or more employers, the number of applications should be one more than the number of employers
cited.

The application can be made in Sinhala, Tamil, and English.

Public servants are not covered by the IDA therefore the gate of the labour tribunals are not opened to
them.

Dismissal of Application

Section 31B(2)(b) - where it is so satisfied that such matter constitutes, or forms part of, an industrial
dispute referred by the Minister under section 4 for settlement by arbitration to an arbitrator, or for
settlement to an industrial court, make order dismissing the application without prejudice to the rights
of the parties in the industrial dispute.

Time Period
Section 31B (7) - Application to a Labor Tribunal shall be made within a period of six months from
the date of termination of the services.

Regarding Termination of services

Independent Industrial and Commercial Employees’ Union v. Board of Directors, Co-operative

Wholesale Establishment – It was held that the Industrial Disputes Act does not refer to the
termination of the contract of employment (which is a subject more appropriate to the law of contract)
but to the termination of the services of the workman.

United Engineering Workers’ Union v. Devanayagam – It was held that Section 31B (1) does not
say that a workman can apply for relief in respect of the wrongful termination of his services.
It merely says that he can apply in respect of the termination of his services. This omission of the word
‘wrongful’ is significant.
Duties and Powers of Labour Tribunal

Section 31B (4) - Any relief or redress may be granted by a labour tribunal to a workman upon
an application made under subsection (1) notwithstanding anything to the contrary in any contract of
service between him and his employer.”

Section 31C (1 - A Labour Tribunal has a duty to make all such inquiries into the application and hear
all such evidence as the tribunal may consider necessary, and thereafter make such order as may appear
to the tribunal to be just and equitable.

Relief or Redress

Tambiah.J in Walker Sons & Co Ltd v. Fry, stated as “The words ‘relief’ and ‘redress’ in
section 31B (4) are also significant. Redress is a word that is used with reference to grievance. A
grievance arises when something legally due is not given. The word ‘relief’ clearly indicates
cases where a person is not enforcing a legal right. Relief may be given to a workman although the
employer has adhered to the terms of the contract and has fulfilled his legal obligation.”

Section 33(1) provide reliefs given in the Labour Tribunal.

i. Reinstatement (Section 33(1)(b)
ii. Compensation (Section 33(1)(d)

Section 36(4) - A Labour Tribunal is not bound by any of the provisions of the evidence ordinance.

It was held in Jayasuriya v. Sri Lanka State Plantations Corporation, that a Labour Tribunal
cannot ignore the rules of evidence in the guise of making just and equitable order

Appeals regarding order of a Labour Tribunal

Section 31D grants a right of appeal against a decision of a labour tribunal. Where a workman, a trade
union or an employer is dissatisfied with the order of a labour tribunal. It is permitted to make an appeal
by way of a written petition on a question of law to the High Court. Matter regarding question of law
was discussed in Jayasuriya v. Sri Lanka State Plantation Corporation.

In terms of Section 31DD, A further appeal lies from the decision of the High Court to the Supreme
Court.