Lesson 14 Industrial Disputes Act, 1947 223

(i) such allowance (including dearness allowance) as the workman is for the time being entitled to;
(ii) the value of any house accommodation, or of supply of light, water, medical attendance or other amenity
or of any service or of any concessional supply of foodgrains or other articles;
(iii) any travelling concession,
but does not include:
(a) any bonus;
(b) any contribution paid or payable by the employer to any pension fund or provident fund or for the benefit
of the workman under any law for the time being in force;
(c) any gratuity payable on the termination of his service.
(d) any commission payable on the promotion of sales or business or both. [Section 2(rr)]

DISMISSAL ETC. OF AN INDIVIDUAL WORKMAN TO BE DEEMED TO BE AN INDUSTRIAL

DISPUTE
According to Section 2A, where any employer discharges, dismisses, retrenches or otherwise terminates the
services of an individual workman, any dispute or difference between the workman and his employer connected
with or arising out of, such discharge, dismissal, retrenchment or termination shall be deemed to be an industrial
dispute notwithstanding that no other workman nor any union of workmen is a party to the dispute.
The ambit of Section 2A is not limited to bare discharge, dismissal, retrenchment or termination of service of an
individual workman, but any dispute or difference between the workman and the employer connected with or
arising out of discharge, dismissal, retrenchment or termination is to be deemed industrial dispute. It has to be
considered whether the claim for gratuity is connected with or arises out of discharge, dismissal, retrenchment
or termination of service. The meaning of the phrase “arising out” of is explained in Mackinnon Mackenzie & Co.
Ltd. v. I.M. Isaak, (1970) I LLJ 16. A thing is said to arise out of another when there is a close nexus between the
two and one thing flows out of another as a consequence. The workman had claimed gratuity and that right
flowed out of the termination of the services. Whether he is entitled to gratuity is a matter for the Tribunal to
decide. It cannot be accepted that the claim of gratuity does not arise out of termination (Joseph Niranjan Kumar
Pradhan v. Presiding Officer, Industrial Tribunal, Orissa, 1976 Lab. I.C. 1396).

AUTHORITIES UNDER THE ACT AND THEIR DUTIES

The Act provides for following Authorities for Investigation and settlement of industrial disputes:
(i) Works Committee.

(ii) Conciliation Officers.

(iii) Boards of Conciliation.
(iv) Court of Inquiry.
(v) Labour Tribunals.
(vi) Industrial Tribunals.
(vii) National Tribunal.
(i) Works Committee

Section 3 of the Act provides that the appropriate Government may by general or special order require the
employer to constitute in the prescribed manner a Works Committee in industrial establishments, where 100 or
224 EP-IL&GL

more workmen are employed or have been employed on any working day in the preceding 12 months. The
Works Committee will be comprised of the representatives of employers and workmen engaged in the
establishment.

It shall be the duty of the Works Committee to promote measures for securing and preserving amity and good
relations between the employer and workmen and, to that end, to comment upon matters of their common
interest or concern and endeavour to compose any material difference of opinion in respect of such matters
[Section 3(2)].

(ii) Conciliation Officers

With the duty of mediating in and promoting the settlement of industrial disputes, the appropriate Government
may, by notification in the Official Gazette, appoint such number of Conciliation Officers as it thinks fit. The
Conciliation Officer may be appointed for a specified area or for specified industries in a specified area or for one
or more specified industries and either permanently or for a limited period. The main objective of appointing the
Conciliation Officers, by the appropriate Government, is to create congenial atmosphere within the establishment
where workers and employers can reconcile on their disputes through the mediation of the Conciliation Officers.
Thus, they help in promoting the settlement of the disputes. (Section 4)

(iii) Boards of Conciliation

For promoting the settlement of an industrial dispute, the appropriate Government may, as occasion arises,
constitute by a notification in the Official Gazette, a Board of Conciliation. A Board shall consist of a Chairman
and two or four other members as the appropriate Government thinks fit.

It shall be the duty of Board to endeavour to bring about a settlement of the dispute and for such purpose it
shall, without delay, investigate into the dispute and all matters affecting the merits and the right settlement.
The Board may also do all such things which may be considered fit by it, for including the parties to come for
a fair and amicable settlement of the dispute. In case of settlement of the dispute, the Board shall send a
report thereof to the appropriate Government together with a memorandum of settlement signed by all the
parties to the dispute. In case no settlement is arrived at, the Board shall forward a report to appropriate
Government enlisting therein the steps taken by the Board for ascertaining the facts and circumstances
related to the dispute and for bringing about a settlement thereof. The Board will also enlist the reasons on
account of which in its opinion a settlement could not be arrived at and its recommendations for determining
the disputes. (Section 5)

(iv) Courts of Inquiry

According to Section 6 of the Act, the appropriate Government may as occasion arises, by notification in
the Official Gazette constitute a Court of Inquiry into any matter appearing to be connected with or relevant
to an industrial dispute. A Court may consist of one independent person or of such number of independent
persons as the appropriate Goverment may think fit and where a Court consists of two or more members,
one of them shall be appointed as the Chairman. It is the duty of such a Court to inquire into matters
referred to it and submit its report to the appropriate Government ordinarily within a period of six months
from the commencement of the inquiry. The period within which the report is to be submitted is not mandatory
and the report may be submitted even beyond the period of six months without affecting the legality of the
inquiry.
 Lesson 14 Industrial Disputes Act, 1947 225

Test your knowledge

Choose the correct answer
Which of the following is not a designated authority for investigation and settlement
of industrial disputes?
(a) Works Committee
(b) Conciliation Officers
(c) Labour Courts
(d) Dispute Tribunal
Correct answer: (d)

(v) Labour Courts

Under Section 7, the appropriate Goverment is empowered to constitute one or more Labour Courts for
adjudication of industrial disputes relating to any matter specified in the Second Schedule and for performing
such other functions as may be assigned to them under the Act.
A Labour Court 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 Labour Court unless –
(a) he is, or has been, a judge of a High Court: or

(b) he has, for a period not less than three years, been a district Judge or an Additional District Judge; or
(c) he has held any judicial office in India for not less than seven years; or

(d) he has been the presiding officer of a Labour Court constituted under any provincial Act or State Act for
not less than five years.
When an industrial dispute has been referred to a Labour Court for adjudication, it is the duty of the Labour
Court to (i) hold its proceedings expeditiously, and (ii) submit its award to the appropriate Government soon after
the conclusion of the proceedings. No time period has been laid down for the completion of proceedings but it is
expected that such Courts will hold their proceedings without going into the technicalities of a Civil Court. Labour
Court has no power to permit suo motu the management to avail the opportunity of adducing fresh evidence in
support of charges (1998 Lab 1C 540 AP).
Provisions of Article 137 of the Limitation Act do not apply to reference of dispute to the Labour Court. In case of
delays, Court can mould relief by refusing back wages or directing payment of past wages (1999 LAB 1C SC
1435).
(vi) Tribunals
(1) The appropriate Goverment may by notification in the Official Gazette, constitute one or more Industrial
Tribunals for the adjudication of industrial disputes relating to any matter whether specified in the Second Schedule
or the Third Schedule and for performing such other functions as may be assigned to them under this Act.

(2) A Tribunal shall consist of one person only to be appointed by the appropriate Government.
(3) A person shall not be qualified for appointment as the presiding officer of a Tribunal unless:
(a) he is, or has been, a Judge of High Court; or
(b) he has, for a period of not less than three years, been a District Judges or an Additional District Judge.
226 EP-IL&GL

(4) The appropriate Government may, if it so thinks fit, appoint two persons as assessors to advise the Tribunal
in the proceedings before it.
Further, the person appointed as a Presiding Officer should be an independent person and must not have
attained the age of 65 years. (Section 7-A)
The Industrial Tribunal gets its jurisdiction on a reference by the appropriate Government under Section 10. The
Government can nominate a person to constitute a Tribunal for adjudication of industrial disputes as and when
they arise and refer them to it. The Tribunal may be constituted for any limited or for a particular case or area. If
appointed for a limited period, it ceases to function after the expiry of the term even when some matters are still
pending (J.B. Mangharam & Co. v. Kher, A.I.R. 1956 M.B.113).
Further, when a Tribunal concludes its work and submits its award to the appropriate Government, it does not
extinguish the authority of the Tribunal nor does it render the Tribunal functus officio. The Government can refer
to it for clarification on any matter related to a prior award (G. Claridge & Co. Ltd. v. Industrial Tribunal, A.I.R.
1950 Bom.100).
The duties of Industrial Tribunal are identical with the duties of Labour Court, i.e., on a reference of any industrial
dispute, the Tribunal shall hold its proceedings expeditiously and submit its award to the appropriate Government.
(vii) National Tribunals
(1) Under Section 7-B, the Central Government alone has been empowered to constitute one or more National
Tribunals for the adjudication of industrial disputes which (a) involve questions of national importance or (b) 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.
(2) A National Tribunal shall consist of one person only to be appointed by the Central Government.
(3) A person shall not be qualified for appointment as the Presiding Officer of a National Tribunal unless: he is,
or has been, a Judge of a High Court; or
(4) The Central Government may, if it so thinks fit, appoint two persons as assessors to advise the National
Tribunal in the proceeding before it.
Section 7-C further provides that such a presiding officer should be an independent person and must not have
attained the age of 65 years.
Duties
When a matter has been referred to a National Tribunal, it must adjudicate the dispute expeditiously and submit
its award to the Central Government. (Section 15)

REFERENCE OF DISPUTES
The adjudication of industrial disputes by Conciliation Board, Labour Court, Court of Inquiry, Industrial Tribunal
or National Tribunal can take place when a reference to this effect has been made by the appropriate Government
under Section 10. The various provisions contained in this lengthy Section are summed up below:
(A) Reference of disputes to various Authorities
Where the appropriate Government is of the opinion that any industrial dispute exists or is apprehended, it may
at any time, by order in writing make a reference to various authorities in the following ways:
(a) It may refer the dispute to a Conciliation Board for promoting the settlement of the dispute. As noted
earlier, duty of the Board is to promote settlement and not to adjudicate the dispute. A failure report of
the Board will help the Government to make up its mind as to whether the dispute can be referred for
compulsory adjudication. Further, any matter appearing to be connected with or relevant to the dispute