Module 8: Industrial Disputes

 Meaning, Nature and Scope of Industrial Disputes

 Cases & Consequences of Industrial Disputes
 Prevention and Settlement of Industrial Disputes in India

An industrial dispute is defined as a conflict or a difference in opinion between management and workers
regarding employment.
● 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”.
● During an industrial dispute, both the parties try to pressurize each other to agree to their terms and
conditions. The industrial unrest manifests itself as strikes, lock-outs, picketing, gheraos and indiscipline on the
part of workers.
● From the point of view of the employer, an industrial dispute can lead to stoppage of work resulting in
stoppage of production. This leads to immediate economic effects, loss of prestige and credit, alienation of the
labour force, and other non-economic, psychological and social consequences. Loss due to destruction of
property, personal injury and physical intimidation or inconvenience may also arise.
● For the employee, an industrial dispute entails loss of income. The regular income in the form of wages and
allowance ceases, and great hardship may be caused to the worker and his family, many times resulting in
deprivation, mal nutrition, even starvation or near-starvation.
Causes of Industrial Disputes
Industry and industrial dispute always go hand in hand. The employees who give their services and time to the
industry are interested in higher wages, good working conditions and want to have a voice in management.
The employers on the other hand are more interested in profits, productivity, quality and control of cost. With
both these forces acting in opposite direction there is a maximum possibility of disputes.
Industrial disputes may arise out of economic, political, social or from socio - economic background. At the
same time the attitude of the employers and employees is also responsible to a great extent. The Causes for
industrial disputes are:
Economic Causes: Most of the Industrial Disputes are due to economic causes. Directly or indirectly economic
causes are at the backbone of industrial disputes. This includes:
● Low wages
● Dearness allowance
● Lack of profit sharing and Bonuses
● Working conditions and working hours
● Safety of work,
● Pension, Gratuity, Provident Fund and other Beneficiary Schemes
● Medical and accommodation facilities
● Leaves and Leaves with pay
Managerial Causes: Success of an organisation depends largely on its managerial capacity. Growth of the
organisation is based on the policies of the management. If the management pursues appropriate policies,
development of the industrial unit will be automatic. But many a time, due to wrong policies of the
management, disputes get accentuated. These causes are:
● Non-Recognition of Unions
● Violations of Agreements
● Ill treatment by managers and supervisors
● Defective Recruitment Procedure and Employees Development Policies
● Wrongful Retrenchment, Demotion and Termination
● Selfish leadership
● Violation of Accepted Code of Conduct
Political Causes: Political causes are no less significant than economic and managerial causes in accounting for
industrial disputes. Chief among them are as under
● Internal conflicts in Trade Unions.
● Resistance to automation.
● Influence of politics
● Strikes against the government

Interest Disputes:These conflicts are also called ‘conflicts of interest’ or ‘economic disputes’. Such disputes
relate to the establishment of new terms and conditions of employment for the general body workers i.e., that
affect the masses. Generally, such type of disputes originate form trade union demands or proposals for
increase in wages or other emoluments, fringe benefits, job security or other terms of employment. These
demands are put forth by the trade unions with a view to negotiate through collective bargaining and disputes
when the parties fail in their negotiations to reach an agreement.
Grievance or Rights Disputes: These disputes are also known as ‘conflicts of rights’ or ‘legal disputes’. These
disputes take place from day to day working relations in the undertaking. It is a protest by the workers against
the act of management that deprives the rights of the employees. The grievance disputes arises out of
payment of wages, fringe benefits, working hours, over time, promotions, demotions, seniority, safety, and
health related aspects. If grievance dispute as are not sorted out in accordance with a procedure that is
accepted by the parties it often results in disturbing the working relationship between the management and
employees.
Disputes over Unfair Labour Practices: The management many times discriminates against workers on the
ground that they are the members of the trade union and they participate in the activities of the union. Unfair
labour practice includes pressure on employees when they exercise their rights to organize, take part in union
activity, refusal to bargain, recruiting new employees during a strike which is not illegal, creating an
environment or actually creating an act of force or violence or stop communication etc. Such disputes can be
settled through conciliation or such disputes are settled according to the normal procedure laid down under
the Industrial Disputes Act 1947. These practices are also known as ‘trade union victimization’.
Recognition Disputes: Recognition Disputes arises when the management of an organisation refuses to
recognize a trade union for the purpose of collective bargaining or to represent its member employees in case
of a conflict or dispute. When the management dislike a particular union it refuses to accept that trade union
for the purpose of negotiations or bargaining and then it becomes a case of trade union victimization. This also
happens when there is already an existing trade union or it is a case of multiple trade unions and each making
a claim for recognition.
Recognition Disputes also arises when a particular trade union does not have sufficient representatives.
Recognition disputes are settled through the guidelines given by the government for recognition of trade
union or with the help of Code of Discipline which has been voluntarily laid down by the government
CASES
Bombay textile workers’ strike, 1982:
Even a single strike badly costs to the nation is well confirmed by the Bombay Textile Workers strike in 1982.
This was the longest strike in the world staged by Datta Samant on January 13, 1982 which lasted for about 18
months. In this strike, more than 2.5 lakh workers of 60 textile mills in Bombay (now Mumbai) were involved.
The strike resulted in a wage loss of Rs. 300 crore to the workers and Rs. 200 crore loss to the mills, and cloth
production worth about Rs. 2,000 crores was badly hit. Out of the total man days lost of 74.61 million due to
industrial disputes in 1982, 41.40 million man days were lost in this Bombay textile strike alone.
On the whole, the strike failed miserably and workers had to suffer a lot. Thus, the cost of industrial disputes
to the nation underlines the need for prevention and settlement of industrial disputes.
Indian Bank Vs Management of Indian Bank 1985 1 LLJ 6 (Mad.)
It was observed that where privilege is given to an office-bearer of a trade union in the form of duty, relief was
withdrawn by the management which was granted to the privileged. It cannot be said that an industrial
dispute has arisen thereby and the legal status of the duty relief is only that of a concession and not a matter
relating to conditions of service. In this case, it was held that where the concession provided is withdrawn, the
beneficiary cannot complain that a condition of service is affected and the management is not entitled to do
so without raising an industrial dispute and having the matter adjudicated by the authority.
Guest Keen William (Private) Ltd. Vs Sterling (P.J) and others
It was held by the Supreme Court that the delay in raising an industrial dispute does not serve as a bar to the
reference of a dispute. If the dispute is raised after a considerable delay that is not reasonably explained, the
Tribunal would take that into account while dealing with the merit of the dispute.
Bombay Union of Journalists vs. The Hindu 1961, II LLJ 727 Bom
A person working in ‘The Hindu, Madras’ was dismissed for claiming as a full-time employee. The Bombay
Union of Journalists raised the dispute. It was found that there were ten employees out of which seven on the
administrative side and only three on the journalism side. Of these three, only two were members of the
union. Therefore, the Supreme Court held that the Bombay Union of Journalists is not competent to raise this
dispute. Even if it had been raised, it could not have become an industrial dispute.
Workmen of Indian Express Newspapers Ltd. vs. Management Indian Express
Newspapers AIR 1970, SC 737
A dispute between two workmen of Indian Express Newspapers Ltd was espoused by the Delhi Union of
Journalists which was an outside union. About 25 per cent of the working journalists of the Indian Express
were members of that union. But there was no union of the journalists of the Indian Express. It was held that
the Delhi Union of Journalists could be said to have a representative character as the working journalists
employed at Indian Express and the dispute was thus transformed into an industrial dispute. Thus, an
individual dispute to fall within the definition of industrial dispute, it must be sponsored by the Trade Union of
the workmen or if there is no trade union, it must be sponsored by the majority of the workmen or it must
comply with the requirements of Section 2-A of the Industrial Disputes Act, 1947.
CONSEQUENCES
The consequences of an industrial dispute are hazardous to the employer, the employees, organisation,
society and the economy.
However, it is taken as a useful tool by the workers, to raise their voice and put up their demands in front of
the management or employers. It empowers the labours and protects their rights of speech in the
organisation.
The common consequence of industrial disputes are:
● Loss of production, income and employment
● Increase in inflation and cost of living.
Industrial disputes disturb the economic, social and political life of a country. They create turmoil between the
management and the labour and are, in fact, symptoms of poor industrial relations. An organisation being in
the grip of dense industrial relations finds it impossible to introduce any innovation or fit any productivity
improvement exclusively through the various industrial engineering techniques. Poor industrial relations
within an organisation are not only harmful for it, but are also against the interests of the society as whole.
Some of the impacts of industrial disputes are:
Impact # 1. Disruption in Production and Services: The industrial disputes result in huge wastage of man-days
and dislocation of production work. A strike in public utility concerns like water and electric supply units, posts
and telegraph or telephone’s services, railways or roadways, any system of public conservancy or sanitation,
hospitals, defence establishments etc., disturbs the whole public life and throws the economy out of gear.
Consumers are subjected to untold hardships. If the struck commodity happens to be used in other production
operations, then other producers also suffer.
When industrial dispute results in stoppage of work, supply position of the struck commodity becomes grim
and prices of that commodity shoot up. The position becomes severe if the product is consumer goods of daily
use.
Impact # 2. On Employers: The employers also suffer heavy losses, not only through stoppage of work,
reduction in sale and loss of market due to none or short supply of the product, but also in the form of huge
expenditure on crushing downs the strikes. They have to undertake publicity and propaganda to put their view
point before the public.
Impact # 3. On Workers: The workers are also badly affected in more than one ways. They lose their wages for
the strike period. Sometimes, they lose their employment. They have to incur debts to meet their day-to-day
expenses. Future prospects become dim. Disruption in family life, person hardship, mental agonies, tortures,
and tensions develop and persist.
The workers are prosecuted, often intimidated, even victimised or beaten mercilessly by goondas, repressed
by police. If strikes etc., fail, the workers, besides inflicting financial loss, are demoralised, disappointed and
shake their confidence in trade unions.
Impact # 4. On Society/Public: The public/society too, is not spared. Industrial unrest creates law and order
problem, ceasing a huge additional expenditures out of public exchequer. Further, even when the disputes are
settled, strife and bitterness continue to linger endangering happy social and industrial relations.
Impact # 5. On National Economy: The industrial disputes also affect the national economy adversely when
labour and equipment in the whole or any- part of the industry are rendered idle by strike or lock-out, national
dividend (income) suffers a lot. It may happen in two ways on the one hand, by impoverishing the workers
indulging in the stoppage of work, it lessens the demand of goods produced by other industries on the other
hand, if the struck industry is such that supply goods and services to other industries, it lessens the supply of
them of raw material or equipment to work. The result is loss in production, ultimately reducing the national
income. Consequently, public expenditure on welfare of public is reduced. Development activities cannot be
undertaken for want of finances.
In nutshell, the impact of industrial disputes is not good irrespective of the fact that who succeeds—employer
or employees. Each group employers, employees, consumers, society and the economy—suffers in one way or
the other.
PREVENTION OF INDUSTRIAL DISPUTES
Prevention of Industrial disputes is a proactive approach in which an organisation undertakes various actions
through which the occurrence of Industrial disputes is prevented.
Preventive steps should be taken so that industrial disputes do not occur. But if preventive machinery fails,
then the industrial dispute settlement machinery should be activated by the Government.
Some of the major preventive machinery for handling industrial disputes in India are as follows:
I. Worker’s Participation in Management (mod4)
II. Collective Bargaining (mod4)
III. Grievance Procedure
IV. Tripartite Bodies
V. Code of Discipline
VI. Standing Orders
III. GRIEVANCE PROCEDURE
Grievance means any type of dissatisfaction or discontentments arising out of anything related to the
enterprise where one is working.
A grievance procedure specifies the steps involved,
● the persons to be associated at each step and
● the method of their selection,
● the manner in which grievances are to be placed,
● the extent of authority vested at each level,
● the sanction behind decisions and
● the rights and obligations of the parties.
Types of GRIEVANCE PROCEDURE
Open door procedure: Employees are free to meet the top executives of the organization & get the grievance
redressal. A disadvantage is that lower level executives feel bypassed. Employees may even hesitate to go to
top executives with their grievance.
Step –ladder procedure: Aggrieved employee has to proceed step by step in getting his grievance re-
addressed. I. Filing of written grievance II. Supervisor or foreman III. Head of department IV. Joint grievance
committee V. Chief executive VI. Voluntary arbitration.
IV. TRIPARTITE BODIES
These include representatives of employers, employees and the Government. Purpose of Tripartite Body:
a. Bring the aggravated parties together for mutual settlement of differences, and encourage a spirit of
cooperation and goodwill.
b. Promote uniformity in labor laws and legislation.
c. Discuss all matters of All India importance as between employers and employees.
d. Determine a plan for settlement for all disputes.
It includes Indian Labour Conference, Standing Labour Committee, Industrial Committees and Tripartite
Committee on International Labour Organisation Conventions. The representatives of workers and employers
are nominated to these bodies by the Central Government in consultation with all India organisations of
workers and employers.
V. CODE OF DISCIPLINE
Code of Discipline is a set of self-imposed mutually agreed voluntary principles of discipline and good relations
between the management and the workers in industry. In India, Code of Discipline was approved by the 16th
Indian Labour Conference held in 1958.
The code of Discipline provides for that:
1. Strikes and lockouts cannot be declared without prior notice.
2. No party should take any direct action without consulting the other.
3. The existing machinery for the settlement of disputes should be followed.
VI. STANDING ORDERS
‘Standing Orders’ refers to the rules and regulations which govern the conditions of employment of workers.
These standing orders are binding on the employer and the employees.
Recognizing the need for the standardised conditions of employment in factories to develop industrial peace
in the country, the Industrial Employment (Standing Orders) Act was passed in 1946.
● This Act provides for the framing of standing orders in all industrial undertakings employing 100 or more
workers.
● The Act covers employment matters like classification of employees, i.e., permanent, temporary,
probationers, etc., shift working, hours of work; attendance and absence rules; leave rules; termination,
suspension, and disciplinary action, etc.
● The Labour Commissioner or the Deputy Labour Commissioner or the Regional Labour Commissioner
certifies the Standing Rules.
The Standing Orders regulate the conditions of employment from the stage of entry in the organization of the
stage of exits from the organization. Thus, they constitute the regulatory pattern for industrial relations. Since
the Standing Orders provide Do’s and Don’ts, they also act as a code of conduct for the employees during their
working life within the organization.
SETTLEMENT OF INDUSTRIAL DISPUTES
There are various methods of resolving industrial disputes like negotiations, conciliation, mediation and
arbitration. Every organisation or management or the trade union has the right and freedom to choose
anyone method to resolve the industrial disputes. What is important here is that Industrial disputes must be
solved as early as possible, it must be settled at the level which it has occurred. Both the management and the
union should change their attitude and keep their ego aside and resolve the disputes as early as possible.
When disputes are not settled relations further become strained and complicated. There should be a WIN -
WIN situation, if both management and unions are to be happy. If one wins and one loses relations do not and
can never improve.
As per Industrial Dispute Act, 1947, there are two ways of doing it:
a) Appointing Conciliation Officers (14 days)
b) Forming Board of Conciliation (2 months)
CONCILIATION
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 settlement of agreed solution.
As per Industrial Dispute Act, 1947, there are two ways of doing it:
A. Role of Conciliation Officer and Board of Conciliation:
● To hold the conciliation proceedings.
● To investigate the dispute.
● To send the report and Memorandum of settlement to the appropriate authority.
NOTE:
However, conciliation process is not a legal binding as it is not mandatory for both the parties to agree to it.
At the same time, conciliation tries to build trust of both the parties and resolve the issues with mutual
understanding.
 B. Court of Enquiry
● In case of failure of conciliation proceedings to settle a dispute, the government can appoint a Court of
Enquiry to enquire into any matter connected with or relevant to industrial dispute.
● The court is expected to submit its report within six months.
● The court of enquiry may consist of one or more persons to be decided by the appropriate government.
Later, the government publishes the report in 30 days.
● It acts as a fact finding machinery.
NOTE:
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 of enquiry.
C. 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 through an arbitrator jointly appointed by the
parties to the dispute.
● It saves time and money that is involved in a legal battle.
● This method was popularised by Mahatma Gandhi, however, it was legalised in 1956.
D. Adjudication
● It is a mandatory settlement of an industrial dispute through a labour court or a tribunal.
● It is the ultimate solution when all other methods of settlement fail to resolve the dispute.
● 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 or National
Tribunal.