Industrial Disputes and its settlement

Industrial Disputes

Meaning

According to Section 2(K) of the Industrial Disputes Act, 1947, and ‘industrial dispute’ means “any dispute or difference between employers and employees 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.

Thus form the legal point of view, industrial dispute does not merely refer to difference between labour and capital as is generally thought, but it refers to differences that affect groups of workmen and employers engaged in an industry. Essentially, therefore, the differences of opinions between employers and workmen in regard to employment, non-employment, terms of employment or the conditions of labour where the contesting parties are directly and substantially interested in maintaining their respective contentious constitute the subject-matter of an industrial dispute.

Causes of Industrial Disputes

The causes of industrial conflict or disputes have been much varied. These may be described partly a psychological or social and partly political, but predominantly economic. Some important factors responsible for industrial conflict and poor industrial relations many be briefly stated as follows:

Management’s general apathetic towards workers or employees because of their contention that they want more and more economic or monetary rewards and want to do less work.
Mental inertia on the part of both management and labour.
Lack of proper fixation of wages inconformity with cost of living and a reasonable wage structure generally.
Bad working conditions.
Attempts by management to introduce changes (such a rationalization, modernization or automation) without creating a favourable to appropriate climate or environment for the same.
Lack of competence or training on the part of first-line supervision as well management at upper levels in the practice of human relations.
Assignment of unduly heavy work-loads to worker, unfair labour practices (such as victimization or undue dismissal).
Lack of strong and healthy trade unionism, lack of a proper policy of union recognition and inter-union rivalries.
A spirit of non-cooperation and a general tendency among employees to criticize or oppose managerial policies or decisions even when they may be in the right directions.
A fall in the standard of discipline among employees largely due to wrong or improper leadership, often resulting in insubordination or disobedience on the part of employees.
Difference in regard to sharing the gains of increased productivity.
Inadequate collective bargaining agreements.
Legal complexities in the industrial relations machinery or settlement of industrial disputes.
Lack of necessary changes in the working of government in accordance with changing needs and circumstances.
Combination of too much law and too little respect for law even at high levels.
Growing factional and personal difference among rank-and-file employees who are union members or union leaders and a tendency on the part of the management in some cases to prefer having with outside leaders and not give due respect to worker-leaders.
Political environment of the country; and
Agitation and wrong propaganda by selfish labour leaders to further their own interests of their own party.

Forms of Disputes

Strikes, lockouts and gheraos are the most common forms of disputes.

Strike

“Strike” means a cessation of work by a body of persons employed in any industry acting in combination; or a concerted refusal or a refusal under a common understanding or an number of persons who are or have been so employed to continue to work or to accept employment.

The following points may be noted regarding the definition of strike:

Strike can take place only when there is a cessation of work or refusal to work by the workmen acting in combination or in a concerted manner.
A concerted refusal or a refusal under a common understanding of any number of persons to continue to work or to accept employment will amount to a strike. A general strike is one when there is a concert of combination of workers stopping or refusing to resume work. Going on mass casual leave under a common understanding amounts to a strike.
If on the sudden death of a fellow-worker, the workmen acting in concert refuse to resume work, it amounts to a strike (National Textile Workers’ Union Vs. Shree Meenakshi Mills (1951) II L.L.J. 516).
The striking workman, must be employed in an ‘industry’ which has not been closed down.
Even when workmen cease to work, the relationship of employers and employees is deemed to continue albeit in a state of belligerent suspension.

Types of Strike

Stay-in, sit-down, pen-down strike: In all such cases, the workmen after taking their seats, refuse to do work. All such acts on the part of the workmen acting in combination, amount to a strike.
Go-slow: Go-slow does not amount to strike, but it is a serious case of is conduct.
Sympathetic strike : Cessation of work in the support of the demands of workmen belonging to other employer is called a sympathetic strike. The management can take disciplinary action for the absence of workmen. However, in Remalingam Vs. Indian Metallurgical Corporation, Madras, 1964-I L.L.J.81, it was held that such cessation of work will not amount to a strike since there is no intention to use the strike against the management.
Hunger strike: Some workers may resort to fast on or near the place of work or residence of the employers. If it is peaceful and does not result in cessation of work, it will not constitute a strike. But if due to such an fact, even those present for work, could not be given work, it will amount to strike (Pepariach Sugar Mills Ltd. Vs. Their Workmen).
Lightning or wildcat strike: A wildcat strike is an unofficial strike i.e. a strike not sanctioned by the union. Such strikes occasionally occur in violation of the no-strike pledge in collective bargaining agreements. In such a situation union is obliged to use its best efforts to end the strike. Such strikes are prohibited in public utility services under Section 22 of the Industrial Disputes Act, 1947. Further, the standing order of a company generally required for notice.
Work-to-rule: Since there is a no cessation of work, it does not constitute a strike.

Lockout

Section 2(1) of the Industrial Disputes Act, 1947 defines “lockout” to mean the temporary closing of a place of employment or the suspension of work, or the refusal by an employers to continue to employ any number of persons employed by him, lockout, thus, is the counterpart of strike – the corresponding weapon the hands of employer to resist the collective demands of workmen or to enforce his terms. It has been held by the courts that the suspension of work as a disciplinary measure does not amount to lockout. Similarly, temporary suspension of work called lay-off is not lock-out.

Gherao

Gherao means encirclement of the managers to criminally intimidate him to accept the demands of the workers. It amounts to criminal conspiracy under Section 120-A of the I.P.C. and is not saved by Sec. 17 of the Trade Unions Act on the grounds of its being a concerted activity.

Regulation of strikes and lock-outs

Employees do not have an unfettered right to go on strike nor do employers have such right to impost lockout. The Industrial Disputes Act lays down several restrictions on the rights of both the parties. A strike or lockout commenced or continued in contravention of those restriction is termed illegal and there is serve punishment provided for the same.

Illegal strikes and lockout are of two types:

Those which are illegal form the time of their commencement; and
Those which are not illegal at the time of commencement but become illegal subsequently.

Section 22 and 23 of the IDA provide for certain restriction which if not followed make strikes and lockouts illegal from their very commencement.

According to this section, no person employed shall go on strike in breach of contract-

Without giving notice of strike to the employer, as here matter provided, within 6 week before striking; or
Within fourteen days of giving such notice; or
Before the expiry of the date of strike specified in any such notice as aforesaid; or
During the pendency of any conciliation proceedings before a Conciliation Officer and seven days after the conclusion of such proceedings.

Consequences of illegal strikes and lock-outs.

Penalty for illegal strikes [Sec.26(1)]: Any workman who commences, continues or otherwise acts in furtherance of a strike which is illegal, shall be punishable with imprisonment for a term which may extend to 1 month, or with fine which may extend to Rs. 50, or with both.

Penalty for illegal lock-out [Sec.26(2): Any employer who commences, continues or otherwise acts in furtherance of a lock-out which is illegal, shall be punishable with imprisonment for a term which may extend to 1 month, or with fine which may extend to Rs. 1,000 or with both.
Penalty for instigation, etc. [Sec. 27]: Any person who instigates or incites others to take part in, or otherwise acts in furtherance of, a strike or lock-out which is illegal, shall be punishable with imprisonment for a term which may extend to 6 months, or with fine which may extend to Rs. 1,000 or with both.
Penalty for giving financial aid for illegal strikes and lock-outs [Sec. 28] : Any person who knowingly expends or applies any money in direct furtherance or support of any illegal strike or lock-out shall be punishable with an imprisonment for a term which may extend to 6 months, or with fine which may extend to Rs. 1,000 or with both.

Machinery for Prevention and Settlement of Industrial Relations

The machinery for prevention and settlement of the disputes has been given in the following figure:

Machinery for Prevention and Settlement of Industrial Relations

Voluntary Methods

Code of discipline

Formally announced in 1958, the Code of Discipline provides guidelines for the workers, unions and employers. The code which was approved by major national trade unions and principal organisation of employers enjoyed on them to create an environment of mutual trust and cooperation and to settle the disputes by mutual negotiation, conciliation and voluntary arbitration. It required the employers and workers to utilize the existing machinery for the settlement of disputes.

A few important provisions of code of discipline are:

Strikes and lockout cannot be declared without proper notice.
The parties should not take any action without consulting each other.
There should be no go slow statistics or any resort to deliberate damage to plant or property or resort to acts of violence, intimidation, coercion etc.

The code has moral sanction only and it does not entail any legal liability or punishment.

Tripartite machinery

Tripartite machinery consists of various bodies like Indian Labour Conference, the Standing Labour Committee, the International Committees, the Central Implementation and Evaluation Committee and the Committee on conventions. Generally, these committees include representatives from centre and the states, and the same number of workers’ and employers’ organisatoins. These various committees are basically of advisory nature, yet they carry considerable weight among the government, workers and employers.

Workers’ participation in management

Workers’ participation in management is an essential ingredient of industrial democracy. The concept of workers participation in management is based on “Human Relations” approach to management which brought about new set of values to labour and management.

According to one view, workers participation is based on the fundamental concept that the ordinary workers invest his labour in, and ties his fate to, his place of work and, therefore, he has a legitimate right to have a share in influencing the various aspects of company policy”.

According to G.S. Walpole, participation in management gives the workers a sense of importance, pride and accomplishment; it gives him the freedom and the opportunity for self-expression; a feeling of belonging to his place of work and a sense of workmanship and creativity. It provides for the integration of his interests with those of the management and makes him a joint partners in the enterprise”.

The forms of workers participation in management vary from industry to industry and country to country depending upon the political system, pattern of management relations and subject or area of participation. The forms of workers participation may be as follows:

Joint Consultation Modes
Joint Decision Model
Self Management, or Auto Management Scheme
Workers Representation on Board

It should be borne in mind that when individuals are provided with opportunities for expression and share in decision-making, they show much initiative and accept responsibility substantially. The rationale of workers’ participation in management lies in that it helps in creating amongst the workers a sense of involvement in their organisatoin, a better understanding of their role in the smooth functioning of industry and provides them a means of self-realization, thereby, promoting efficiency and increased productivity.

Collective bargaining

Collective bargaining is a source of solving the problems of employees in the work situation collectively. It provides a good climate for discussing the problems of workers with their employers. The employees put their demands before the employers and the employers also gives certain concession to them. Thus it ensures that the management cannot take unilateral decisions concerning the work ignoring the workers. It also helps the works to achieve reasonable wages, working conditions, working hours, fringe benefits etc. It provides them a collective strength to bargain with the employer. It also provides the employer some control over the employees.

The process of collective bargaining is bipartite in nature i.e., the negotiations are between the employers without a thirds party’s intervention. Thus collective bargaining serves to bridge the emotional and physiological between the workers and employers through direct discussions.

Government Machinery

The Ministry of Labour and Employment at the centre is the key agency for the policy formulation and administration in all the matters pertaining to labour. The State governments with the cooperation of their labour departments are responsible for the enforcement thereof. The Directorate General of Employment and Training (DGET), Office of Chief Labour Commissioner (CLC) (Central), the Director General of Mines Safety (DGMS), the Director General of Factory Advice and Labour Institutes, and Industrial Tribunals are some of the agencies through which the Central Government discharges its functions related to framing of labour laws and settlement of industrial disputes. The Labour Secretary is the overall incharge of policy formulation and administration, and commissioners of labour in the States are the operative arms for the effective implementation of Labour Laws.

Statutory Measures – Industrial Disputes Act, 1947

The States are free to frame their own labour laws as the labour falls in the concurrent list, Some States like Maharashtra, M.P., U.P. and Rajasthan have their own Acts. In the rest of the states, Industrial Disputes Act, 1947 applies. However, in the States having their own Acts, the IDA, 1947 will be applicable to the industries not covered by the State Legislation. Formally announced in 1947, the Industrial Disputes Act, has been amended several times since then. Under the Act the following authorities have been proposed for the investigation and settlement of industrial disputes.

Works committees

The IDA, 1947 provides for setting up works committees in every organisation having 100 or more employees. Having representatives of employees and employees, these are consultative bodies and are set up for maintaining harmonious relations at the work lace and sort out the difference if any. Though the act does not define the jurisdiction of these committees, yet their functions mainly include providing proper working conditions and amenities for the welfare of employees at the work place or away from the work. A work committee aims at promoting measures for securing the preserving amity and good relations between employees and workers.

Conciliation

When the services of a neural party are availed for the amicable solution of a dispute between the disputing parties, this practice is known as conciliation. The IDA, 1947 provides for conciliation and it can be utilized either by appointing Conciliation Officer or by setting up Board or Conciliation.

The Conciliation Officers are appointed by the Government by notifying in the Official Gazettee. Usually at the State level, Commissioners of Labour, Additional and Deputy Commissioners of Labour act as Conciliation Officer for disputes arising in any undertaking employing less than twenty workers. In the conciliation process the officer ties to bring the disputing parties together towards a settlement of the dispute and hence works as a mediator. The intervention of conciliation officer may e mandatory or discretionary. But in the disputes related to public utilities in respect of which proper notice is served to him, his intervention becomes mandatory.

The Board of Conciliation is a higher forum and is constituted for a specific dispute. It consists of equal number of representatives of employers and employees under the chairmanship of an independent person, appointed by the government. The Board has to submit its report to the government regarding the dispute within two months from the date dispute was referred to it. However, depending on the case, the period can be extended.

Voluntary arbitration

Industrial Disputes (Amendment) Bill, 1956 incorporated Section 10A favouring voluntary arbitration. In case of existed or apprehended dispute, the disputing parties can enter into an arbitration agreement in writing. The success of voluntary arbitration depends on “a sufficient degree of mutual confidence in decision by agreement on subjects which may be submitted for arbitration”.

Court of enquiry

The IDA, 1947 empowers the appropriate government to constitute a Court of Enquiry. This body basically is a fact-finding agency, constituted just to reveal the causes of the disputes and does not care much for the settlement thereof. The Court of Enquiry is required to submit its report to the government ordinarily within six months from the commencement of enquiry. The report of the court shall be published by the government within 30 days of its receipt.

Adjudication

If the dispute is not settled by any other method, the government may refer it for adjudication. Hence it is a compulsory method which provides for three-tier system for adjudication of industrial disputes. This machinery consists of Labour Court, Industrial Tribunals and National Tribunal. The first two bodies can be set up either by State or Central Government but the National Tribunal can be constituted by Central Government only, when it thinks that the solution of dispute is of national significance. A Labour Court consists of one person only, called Presiding Officer, who is or has been a judge of a High Court. The jurisdiction of Industrial Tribunal is comparatively wider than Labour Courts, and further the Presiding Officer of Tribunal can have two assessors may be appointed by the Central Government to help its Presiding Officer.

Labour Courts and Tribunals are now required to submit award to the appropriate government within three months in case of individual disputes The submitted award shall be published by government within 30 days from the date of its receipt. It shall come into force on the expiry of 30 days from the date if its publication and shall be operative for a period of one year, unless declared otherwise by the appropriate government.