Industrial disputes Act 1947

THE INDIAN INDUSTRIAL DISPUTE ACT 1947

1. Industrial Disputes 

Industrialization in a country has always contributed to employment, contribution to

National income, per capita income, exports and economic development on one side and

Industrial disputes on the other. It has always been the case of mixed blessing. The 

Conflict of interest between management and labour is what leads to industrial disputes.

The management has a goal of profit maximization and on the other hand the workers

Expect rise in income, security of job, protection of their skills, improvement in their

Status and in the working conditions. Those who control the factors of production require

Strict administration, closer supervision, and maintenance of strict discipline and

Implementation of rules, code of conduct and code of discipline. Whereas the workers

Demand a share in capital, voice in management, freedom of expression, participation in

Management and dignity of employees. So the people that control the factors of

Production and people that produce always have different or conflicting interest which

Gives birth to industrial disputes.

According to the Industrial Dispute Act, 1947. Section 2 (K) “Industrial Disputes mean

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 terms of employment or with the conditions of labour of any

Person”.

2. Causes of Industrial Disputes

Industrial disputes are a common feature of all industrialized economies, whether it is a

Capitalist economy or socialist economy or mixed economy. Industry and industrial

Dispute always go hand in hand infact they are the two sides of the same coin. 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

And so industrial disputes has become a major feature of industrialization.

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 factors leading to industrial disputes may be industry

Related, management related, government related or union related.

The most common causes of industrial disputes can be listed as:

1. Wages and Allowances

2. Personnel Policies

3. Retrenchment

4. Lay off

5. Leave and hours of work

6. Bonus

7. Indiscipline

8. Violence

9. Inter Union rivalry.10. Non-implementation of awards or agreements

11. Non-fulfillment of demands

12. Workload

13. Work standards

14. Surplus labour

15. Working conditions

16. Change of manufacturing process

17. Violation of rules or codes

18. Shift working

19. Political motives

20. Closure or lockouts

21. Inability to communicate effectively

22. Reftisal to recognize unions

23. Authoritarian or autocratic attitude of management.

24. Non-implementation of labour law.

Whatever may be the reason for an industrial dispute what disturbs the most is the Amount of loss to the nation. A developing country with pressure of population, per capita Income, poor infrastructure and low standard of living cannot afford to have such out of Proportion disputes and loss of man-days. The Indian Labour Year Book states that in the year 1998 the number of disputes in India In the public sector were 283 and in the private sector it was 814 that means in total there were 1,097 disputes. The numbers of man-days lost in the public sector were 7576000 and 14486000 in the private sector which means a total of 22062000 man-days were lost in a Single year 1998. The magnitude of industrial disputes and man-days lost in public sector Enterprises are less compared to the private sector. In many cases there is no direct action and so the man-days are not lost but when trade unions adopt strategies like go slow, tool, Down, pen down, work to rule etc. productivity is lost.

3. What is the Indian Industrial Dispute Act of 1947?

The Industrial Dispute Act of 1947 has been described as the latest milestone in the industrial development in India. The Act has seen new additions in the past few years. However, the principal objectives of the Industrial Dispute Act of 1947 are:

1. To encourage good relations between labour and industries, and provide a medium of settling disputes through adjudicator authorities.

2. To provide a committee for dispute settlement between industry and labour with the right of representation by a registered trade union or by an association of employers.

3. Prevent unauthorized strikes and lockouts.

4. Reach out to labour that has been laid-off, unrightfully dismissed, etc.

5. Provide labour the right to collective bargaining and promote conciliation.

The main purpose of the Industrial Disputes Act, 1947 is to ensure fair terms between employers and employees, workmen and workmen as well as workmen and employers. It helps not only in preventing disputes between employers and employees but also help in finding the measures to settle such disputes so that the production of the organization is not hampered. In this unit, we are going to discuss the Industrial Disputes Act, 1947 and its importance. This unit encompasses the different authorities and their duties in the settlement of disputes. It also discuss about the reference of disputes. Through this unit, you will be able to know about the different award given by the different authorities under the Act. Thus, you will able to understand through this unit, the procedures of settlement of the disputes as well as the duties of different authorities as well as the way of reference of disputes.

Industrial dispute as defined under Sec. 2(k) exists between-

• Parties to the dispute who may be
• Employers and workmen
• Employers and Employers
• Workmen and workmen

a) There should be a factum of dispute not merely a difference of opinion.

b) It has to be espoused by the union in writing at the commencement of the dispute. Subsequent espousal will render the reference invalid. Therefore date when the dispute was espoused is very important.

c) It affects the interests of not merely an individual workman but several workmen as a class who are working in an industrial establishment.

d) The dispute may be in relation to any workman or workmen or any other person in whom they are interested as a body.

Case Law

• Chandrakant Tukaram Nikam and others vs. Municipal Corporation of Ahmedabad and another: It was held by the Supreme Court that the Jurisdiction of the Civil Court was impliedly barred in cases of the dismissal or removal from service, The appropriate forum for such relief was one constituted under Industrial Disputes Act, 1947.

• Jadhav J. H. vs. Forbes Gobak Ltd: In this case, it was held that, a dispute relating to a single workman may be an industrial dispute if either it is espoused by the union or by a number of workmen irrespective of the reason the union espousing the cause of workman was not the majority of the union.

4. History of The Law of Industrial Disputes

The World War I (1914-1919) brought a new awakening among the working class people who were dominated by the employers regarding the terms and conditions of service and wages. The workers resorted to strikes to fulfill their demands and the employers retaliated by declaring lockouts. During the period 1928-29 the numerous strikes and lock-outs forced the Government to enact the Trade Disputes Act, 1929. NThe Trade ” dispute Act, 1929 was introduced for the settlement of industrial disputes. This Trade Union Act gave the trade unions a legal status. The main object of the Act was to make provision for the establishment of Courts of Enquiry and Boards of Conciliation with a view to investigating and settling trade disputes.

But, this Act failed to create favorable atmosphere in the industry and settle the disputes. The main defect of the Act was that no provision was has been made to render the proceedings institutable under the Act while restraint had been imposed on the right of strike and lock-out in the public utility services. But, later this defect was overcome by empowering under Rule 81-A, of the Defense of Indian Rules to refer industrial disputes to adjudicator for settlement during the Second World War (1938-1945).

The rule provide speedy remedies for industrial disputes by compulsory reference of disputes to conciliation or adjudication, by making the awards of adjudicators legally binding on the parties, by prohibiting strikes and lock-outs during the pendency of conciliation or arbitration proceeding. With the termination of the Second World War, Rule 81-A was about to lapse on 1^st October, 1946, but it was kept alive by recourse to Government’s Emergency Powers. The main provision was retained in the Industrial Disputes Act, 1947.

5. Features of the Industrial Disputes Act 1947

1. While the mediation and adjudication are underway, strikes and lockouts are unlawful. 
2. Any industrial dispute can be referred to an industrial tribunal by consent of the parties involved or by the State Government.
3. An award must be binding on both parties to the dispute for no more than one year, and the government must enforce it.
4. In the public interest or an emergency, the competent authority may declare the transportation, coal, iron, and steel industries public utility services under the Industrial Disputes Act for six months.
5. When an employee is laid off or reduced in size, the company is required to provide compensation.
6. Workers’ compensation is also covered in the statute.
7. Several agencies are available to resolve industrial disputes, including a works committee, a Conciliation Officer, a Board of Conciliation, a Labour Court, and a Tribunal.

6. Machinery for Settlement  of Industrial Disputes

The Industrial Disputes Act, 1947 provides an elabourate and efficient machinery for the Peaceful and amicable settlement of the industrial disputes. They include:

1. Works Committees (Sec 3)

2. Conciliation Officers (Sec 4)

3. Board of Conciliation (Sec5)

4. Courts of Enquiry (Sec6)

5. Labour Courts (Sec 7)

6. Tribunals (Sec 7A)

7. National Tribunals (Sec 7B)

1. WORKS COMMITTEE

In case of an industrial establishment in which on hundred or more workmen are

Employed or have been employed on any day in the preceding twelve months, the

Appropriate Government may be general or special order require the employer to

Constitute in the prescribed manner, a works committee consisting of representatives of

Employers and workmen engaged in the establishment, so however that the number of

Representatives of workmen or the committee shall not be less than the number of

Representatives of the employers. The representatives of the workmen engaged in the

Establishment and in the consultation with their trade union, if and registered under the

Indian Trade Union Act, 1926.

Duties of the Works Committee:

It shall be the duty of the works committee.

1. To promote measures for securing and preserving amity and good relations between

The employer and workmen.

b) To comment upon matters of their common interest or concern and

c) To endeavour to compose any material difference of opinion in respect of such

matters

2. CONCILIATION OFFICERS (Sec 4)

The appropriate Government may appoint such number of persons as it thinks fit, to be Conciliation officers, by notification in the Official Gazette. A conciliation officer may be appointed for a specified industries in a specified area or for one or more specified industries and either permanently or for a limited period.

Duties of Conciliation Officers:

1. In every industrial dispute, existing or apprehended, the conciliation officer shall

Hold the conciliation proceedings in prescribed manner.

2. The conciliation officer for settling the dispute without delay shall investigate the

Dispute and may do all such things to make the parties to come fair and amicable

Settlement of dispute.

3. The conciliation officer shall send a report on the settlement of the dispute to the

Appropriate Government together with a memorandum of the settlement signed by

The parties to the dispute.

4. If no such settlement is arrived at, the conciliation officer shall as soon as practicable

After the close of the investigation, send to the appropriate Government a full report

Setting forth the steps taken by him for ascertaining the facts and circumstances

Relating to the dispute, and bringing about a settlement thereof together with a full

Statement of such facts and circumstances and the reasons on account of which, in his

Opinion, a settlement could not be arrived at.

5. If, on a consideration of the failure report referred above the appropriate Government

Is satisfied, that there is a case for reference to a Board, Labour Court, Tribunal or

National Tribunal it make such reference. Where the appropriate Government does

Not make such a reference it shall record and communicate to the parties concerned

Its reasons thereof

6. A report under Sec. 12 shall be submitted within 14 days of the commencement of

The conciliation proceedings or within such shorter period as may be fixed by the

Appropriate Government.Provided that subject to the approval of the conciliation officer. The time for the Submission of the report may be agreed upon in writing by all parties to the dispute. [Sec. 12(6)].

3. BOARD OF CONCILIATION (SEC.5)

The appropriate Government may as the occasion arises by notification in the Official

Gazette constitute a Board of conciliation for promoting the settlement of an industrial

Dispute. A Board shall consist of Chairman and two or four other members, as the

Appropriate Government thinks fit. The Chairman is an independent person and other members are representatives of the Parties to the dispute in equal numbers.

Duties of Board of Conciliation (Sec 13):

1. Where the dispute has been referred to a Board under this Act, it shall he the duty of

The Board to endeavour to bring about at settlement of her same and for this purpose

The Board shall, in such manner as it thinks fit and without delay, investigate the

Dispute and all matters affecting the merits and the right settlement thereof and may

Do all such things as it thinks fit for the purpose of inducing the parties to come to a

Fair and amicable settlement of the dispute [Sec. 13(1)].

2. If a settlement of dispute or of any of the matters in dispute is arrived at in the course

Of the conciliation proceedings the Board shall send a report thereof to the appropriate

Government together with a memorandum of the settlement signed by the parties to

The dispute. [Sec. 13(2)]

3. If no such settlement is arrived at, the Board shall as soon as practicable after the Close of investigation send to the appropriate Government a full report on the steps Taken by the Board for ascertaining the facts and circumstances relating to the dispute And for bringing about a settlement thereof Report shall also contain a full statement Of such facts and circumstance and the reasons on account of which, in its opinion a Settlement could not be arrived at. [Sec. 13(3)]4. The board shall submit its report within 2 months of the date on which the dispute Was referred to it or within such shorter period as may be fixed by the appropriate Government. [Sec. 13(5)]. Thus, where conciliation fails, board of conciliation takes Over. The functions of the Board of Conciliation are the same as those of the Conciliation officers. The purpose of constituting boards of Conciliation is to bring About settlement of individual disputes.

4. COURT OF ENQUIRY (SEC. 6)

The appropriate Government may as occasion arises by notification in the Official

Gazette constitute a Court of Enquiry for enquiring into any matter appearing to be

Connecting 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

Government may think fit and where a Court consists of two or more members, one of

Them shall be appointed as the chairman. Court shall not be able to act unless minimum

Number of members required to transact business i.e. quorum is present. Absence of

Chairman or nay member or any vacancy of its member will not affect the validity of the

Proceedings of the Court if they are otherwise valid and regular.

Duties of Court of Enquiry:

A court shall enquire into the matters referred to it and report thereon to the appropriate

Government ordinarily within a period of 6 months from the commencement of its

Enquiry.

5. LABOUR COURTS (SEC.7)

The appropriate Government may, by notification in the Official Gazette constitute one

Or more Labour Courts for the adjudication of industrial disputes relating to any matter

Specified in the second schedule and for performing such other fiinctions as may be

Assigned to them under this Act. A Labour Court shall consist of one person only to be

Appointed by the appropriate Government.Jurisdiction of Labour Courts [Sec.7(l)j

The Labour Courts adjudicate the following disputes relating to matters specified in the

Second schedule;

1. The propriety or legality of an order passed by an employer under the standing

Order,

2. The application and interpretation of standing orders ,

3. Discharge or dismissal of workmen including reinstatement of or grant of relief to

Workmen wrongfiilly dismissed.

4. Withdrawal of any customary concession or privilege.

5. Illegality or otherwise of strike or lock-out and

6. All matters other than those specified in the Third schedule.

Duties of Labour Court:

The Labour Court shall hold its proceedings expeditiously and shall as soon as

Practicable on the conclusion thereof submit its award to the appropriate Government.

(Sec. 15)

6. TRIBUNALS (SEC. 7A)

The appropriate Government may be notification in the Official Gazette, constitute on or

More tribunals for the adjudication of industrial disputes relating to any matter, whether

Specified in the Second schedule or the Third schedule. A Tribunal shall consist of one

Person only to be appointed by the appropriate Government. It shall discharge judicial

Ftinctions, though it is not a court.

Jurisdiction of Industrial Tribunals [Sec.7 (A)(l)|:

Industrial tribunals have a wider jurisdiction than a Labour Court. It has jurisdiction over

Any matter specified in the Second or Third Schedule. The following matters are specified

Under the Third schedule:

1. Wages, including the period and mode of payment.

2. Compensatory and other allowances.

3. Hours of work and rest intervals.4. Leave with wages and holidays.

5. Bonus, Profit sharing. Provident Fund and gratuity.

6. Shift working otherwise than in accordance with standing orders.

7. Classification by grades.

8. Rules of discipline.

9. Nationalization.

10. Retrenchment of workmen and closure of establishment, and

11. Any other matter that may be prescribed.

Duties of a Tribunal:

The duties of a tribunal are the same as those of a Labour Court.

The Central Government may by notification in the Official Gazette, constitute one or

More National Tribunals for the adjudication of industrial disputes which in the opinion

O f 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. The duties of a National Tribunal are

The same as those of as Labour Court or an Industrial Tribunal. [Sec.7B (2)]

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. [Sec. 7B (3)]

The Central Government may, if it thinks fit, appoint 2 persons as assessors to advise the

National Tribunal in the proceeding before it [Sec.7B(4)].

Duties of Labour Courts, Tribunals and National Tribunal:

Where an industrial dispute has been referred to a Labour Court, Tribunal or National

Tribunal for adjudication, it shall hold its proceedings expeditiously and shall within the

Period specified in the order referring such industrial dispute or the flirther periodextended under the second provision to sub-section (2-A) of section 10 submit its award

To the appropriate Government (Sec. 15).

7. Applicability of Industrial Disputes Act, 1947

The Industrial Disputes Act applies across India to every industrial institution engaged in any business, commerce, production, or distribution of products and services, regardless of the number of workers employed. The Act applies to everyone hired in an institution for hire or reward, including contract labour, apprentices, and part-time workers, to do any manual, clerical, skilled, unskilled, technical, operational, or supervisory work.

This Act does not apply to persons primarily engaged in a managerial or administrative capacity, persons engaged in a supervisory capacity and persons subject to the Army Act, Air Force Act, and Navy Act, or those in police service or officers or employees of a prison.

8. Controversy Related to Industrial Disputes Act, 1947

The two sections of Chapter V-B of the Industrial Disputes Act are considered labour market rigidity. This provision’s principal goal is to ensure that an employer cannot recruit or fire an employee at will. To take such action, they must first obtain approval from the labour commissioner. Because this issue is also on the concurrent list, various states have imposed even harsher restrictions and requirements, making layoffs, reductions, and closure much more difficult.

This provision raises concerns about the legislation, particularly about Chapter V-B. This provision has been subjected to several changes throughout the years. The legislation was enacted to create equipment and procedures for investigating and resolving workplace disputes that were applicable to everybody, regardless of size or sector. It even includes measures for layoffs, reduction (reducing the extent of activities), and industry collapse.

9. Protection of People Under Industrial Dispute Act of 1947

The Industrial Dispute Act of 1947 includes provisions for the protection of people in the context of industrial disputes.

1. Layoff and Retrenchment: The Act places restrictions on the layoff and retrenchment of workers, ensuring job security to a certain extent.
2. Compulsory Recognition of Trade Unions: It provides for the compulsory recognition of trade unions by employers, allowing workers to collectively bargain for their rights.
3. Prohibition of Unfair Labour Practices: The Act prohibits unfair labour practices by both employers and trade unions, safeguarding the interests of employees.
4. Right to Strike: While it recognizes the right to strike, the Act lays down specific conditions and procedures to be followed before workers can resort to strikes.
5. Settlement of Disputes: It establishes mechanisms for the settlement of industrial disputes, including the formation of boards and labour courts.
6. Retrenchment Compensation: In cases of retrenchment, the Act mandates the payment of compensation to affected workers, offering them financial protection.
7. Reemployment of Retrenched Workers: The Act also provides for the reemployment of retrenched workers when job opportunities become available.
8. Health and Safety Measures: It includes provisions for the protection of the health and safety of workers, ensuring their well-being in industrial environments.
9. Payment of Wages During Strikes: The Act outlines rules regarding the payment of wages during strikes, balancing the interests of workers and employers.
10. Legal Remedies: Workers have access to legal remedies under the Act, allowing them to seek justice and protection against unfair labour practices.

Conclusion

The Industrial Disputes Act of 1947 is India’s major legislation controlling dispute settlement. It was adopted to allow for the investigation and resolution of industrial disputes, to prevent illegal strikes and lockouts, and to offer assistance to workers facing layoffs, reduction, or unfair dismissal. The Industrial Disputes Act of 1947 governs Indian labour law regarding trade unions and individual workers engaged in business on the Indian mainland.