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We are always must reluctant
to put any interpretation upon labour legislation is likely to
prejudice the rights or welfare of Labour. We are fully conscious
of the fact that our legislature has put labour legislation on the
statue book primarily for the purpose of redressing the balance
between employers and employees and that we would not, unless we
are compelled to do so by the clear language used by the
legislature put any construction upon any provision of labour
legislation which will in any way prejudicially affect their
rights.1 - Chagla C.J.
State intervention in industrial relations is essentially a modern
development . With the emergence of the concept of welfare state,
new ideas of social philosophy, national economy and social
justice sprang up with result that industrial relation no longer
remains the concern of labour and management alone. Many countries
realized that for general progress to be assured, economic
progress was a must. In no country is a complete laissez faire
attitude now adopted in the matter of labour management relations.
In all the countries, over a
period of time, the state has assumed power to regulate industrial
relations. It is the state which is
now the most significant element in determining the legal
environment within which industrial relations operate.2
Bean regarded state as an actor within industrial relations
performing a number of distinct roles3 The distinct role that
state performs are broadly, categorized by him as five. Firstly,
it acts as a third party regulator promoting a legal framework
which establishes general ground rules for union-management
inter-action, particularly in the procedure for collective
bargaining4 . Secondly, and additionally, as a means of supporting
and underpinning collective bargaining or as a supplement to it
the law can be used establish minimum standards while collective
bargaining exploits particular advantages to secure higher
standards whenever it can.5 The third well established function in
many countries is the provision of state service for conciliation,
mediation and arbitration with a view to facilitating the
settlement of industrial disputes. A fourth aspect of the role of
the state that has become increasingly important is that of a
direct and primary participation as a major employer in the public
sector. In this respect, it influences the pattern of industrial
relations by its own behaviour and example. A fifth role that the
state has come to play in many countries is that of a regulator of
incomes. As a result, direct and active state involvement in the
industrial relations has become much more pronounced in recent
years.
The concern of state in matters relating to labour is product of
its obligations to protect the interest of industrial community ,
while at the same time fostering economic growth in almost all
countries. State has assumed powers to regulate labour relations
in some degree or the other. In some , has taken the form of
laying down bare rules or observance by employers and workers; in
others, the rules cover a wider area of these rules6. So far as
our country is concerned , State intervention in labour matter can
be traced back to the enactment of the Employers and Workmen’s
Disputes Act 1860 which provided for the speedy disposal of the
dispute relating to the wages of workmen engaged in railways,
canals and other public works, by Magistrates. After World War-1
however, State intervention in Dispute Resolution became more
systematic and effective.
The Trade Dispute Act was passed providing for constituting courts
of Inquiry and Conciliation Boards and forbidding strikes in
public utility services without notice. The Act 1920 was replaced
by the Trade Dispute Act 1929 incorporating provisions relating to
general strikes as well. Thereafter Bombay Trade Dispute
(Conciliation) Act 1934 was passed providing for permanent cadre
for conciliators in selected industries. In the Year 1938 , Trade
Dispute Act 1929 was amended authorizing and Central and
Provincial Govts. to appoint Conciliation Officers. In the same
year, Bombay Industrial Dispute Act 1938 was passed providing for
setting up of an industrial Court and prohibiting strikes and
lockouts under certain conditions. Thereafter, during the
emergency caused by World War II , under Rule 81A of the Defence
of India Rules , power was given to the appropriate Govt. to
appoint industrial tribunals and enforce the awards passed by
them.
Later on Bombay Industrial Disputes Act was replaced by the Bombay
Industrial Relations Act 1946. Little later in the year 1947, the
Industrial Dispute Act 1947 (here after referred as the Act) was
passed providing for appointing /constituting conciliation
officers, boards of conciliation, courts of inquiry and industrial
tribunals.
The Act was amended in the
year 1956 providing for constituting labour courts and national
industrial tribunals. The subject labour having been in the concurrent list of the Constitution of
India, both the centre and states have the power to legislate on
labour matters. Several states have amended the Central Act 1947
so as to suit to them while others have enacted their own Acts.
The main object of the enactment of the Act is to ensure social
justice to both the employees and employers and advance the
progress of industry by bringing about the existence of harmony
and cordial relationship between the parties so as to bring about
industrial peace which would accelerate procedure activity of the
country. The Act provides for prevention and settlement of
industrial disputes. Industry means a business (as a merchant),
a trade ( as a culter), a manufacture (as a flour mill), an
undertaking ( as a gas company), a calling as a engineer, or
service ( as a carrier) or an employment ( a general term like
calling embracing some of the others; and intended to extend to
vocations which might not be comprised in any of the rest), all
these expressions so far indicating the occupation in which the
principle,... is indicated whether on land
or water.. if the occupation so described is one in which persons
are employed for pay, hire, advantage or reward , that is as
employees, then , with the exceptions stated, it is an industry
with in the meaning of Act.7 . Industrial Peace and industrial harmony may have the
same meaning; but we are inclined to think that the concept of
industrial peace is somewhat negative and restrictive. It emphasis
absence of strife and struggle. The concept of industrial harmony
is positive and comprehensive and it postulates the existence of
understanding cooperation and a sense of partnership between the
employers and the employees. That is why we prefer to describe our
approach as one is quest of industrial harmony.8
Industrial Dispute means any
dispute or difference between employer and employees , or between
employer 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, or any person9. The
Scope the definition of Industrial Dispute is very wide. The words
employment and non
employment in the definition are of widest amplitude and have
been but in juxtaposition to make the definition comprehensive .
Any dispute concerned with employment or non-employment’
constitute the subject matter of one class or industrial disputes.
The matters which can form subject matter industrial dispute are
enumerated in Second, Third and Fourth Schedule given at the end
of Industrial Dispute Act.10
There are two types of
Industrial Disputes-interest disputes and rights disputes.
Interest disputes relate to determination of new wage level and
other condition of employment while rights disputes on the other
hand relate to interpretation and application of existing
standards and usually involve and individual worker or group of
workers. Under category of rights disputes, claim is made that the
workmen have not been treated in accordance with the rules,
individual contracts of employment, laws and regulations and as
per collective agreements. Such disputes are also described as
grievance disputes. Such grievances may be regarding
retrenchment ,dismissal, payment of wages, working time, overtime,
demotion , promotion, transfer, seniority, job classification,
work rules and fulfillment of obligation relating to safety and
health laid down in an agreement. The definition of
Industrial Dispute as given in the Act has a wide coverage. All disputes
relating to employment or non- employment, or the terms of
employment or with the condition of labour are covered under the
definition.
Settlement means a settlement arrived at in the course of
conciliation proceeding and included a written agreement between
employer and workmen arrived at otherwise than in course
conciliation proceeding where such agreement has been signed by
the parties there to in such manner as may be prescribed and a
copy thereof has been sent to the officer authorized in this
behalf by the appropriate government and the conciliation
officer.11The definition envisage two categories of settlement.
(1) Settlement arrived at in the course of conciliation and
(2) Settlement arrived at privately or otherwise than in the
course of conciliation.
The settlement arrived at in the course of conciliation stand on a
higher plane than the settlements arrived at otherwise than in the
course of conciliation. The legal effect of both these settlements
is not identical . The settlement arrived at otherwise than in the
course conciliation binds only the parties to settlement and none
else. In any case it does not stand on higher plane than the
settlements arrived at in the conciliation and that makes the two
distinct and different from each other.
Procedures for settling labour dispute: Collective Bargaining,
Negotiation, Conciliation and Mediation, Arbitration and
Adjudication are well known methods for settlement of industrial
disputes.
Collective Bargaining :- Collective Bargaining is a technique by
which dispute as to conditions of employment, are resolved
amicably, by agreement, rather than by coercion. The dispute is
settled peacefully and voluntarily, although reluctantly, between
labour and management.12 In the context of present day egalitarian
society, with its fast changing social norms, a concept like
‘collective bargaining’ is not a capable of a precise definition.
The content and Scope collective bargaining also varies from
country to country. Broadly Speaking Collective bargaining is a
process of bargaining between employers and workers, by which they
settle their disputes relating to employment or non-employment ,
terms of employment or conditions of the labour of the workman,
among themselves, on the strength of the sanctions available to
each side .13 Occasionally, such bargaining results in an amicable
settlement, arrived at voluntarily and peacefully , between the
parties. But quite often, the workers and employers have to apply
sanctions by resorting to weapons of strike and lockouts, to
pressurize one another, which makes both the sides aware of the
strength of one another and that finally forces each of them to
arrive at a settlement in mutual interest . It is thus the
respective strength of the parties which determine the issue,
rather than the wordy duals which are largely put on for show, as
an element of strength in one party is by the same token, an
element of weakness in another.14
The final outcome of bargaining may also depend upon the art,
skill and dexterity of displaying the strength by the
representatives of one party to the other.
Negotiation:
Negotiation is one of the principal means of settling
labour disputes. However, due to lack of trust between the
employers and workmen or their trade unions or inter-rivalry of
the trade unions and the employers being in a commanding position,
many a time negotiations fail. Through Amendment in the Act by Act
46 of 1982 Chapter II B providing for reference of certain
individual disputes to Grievance Settlement Authority has been
inserted in the Act. Under this Chapter, section 9 C has made it
obligatory for the employers to make provision for Grievance
Settlement Authority for settlement of industrial disputes
connected with an individual workman employed in an establishment
in which fifty or more workmen are employed or have been employed
on any day. In the preceding twelve months. This amendment however
even inspite of having been made twenty one years back has not
seen the light of the day.
Conciliation & Mediation: Through conciliation and mediation a
third party provides assistance with a view to help the parties to
reach an agreement. The conciliator brings the rival parties
together discuss with them their differences and assist them in
finding out solution to their problems. Mediator on the other hand
is more actively involved while assisting the parties to find an
amicable settlement. Sometimes he submits his own proposals for
settlement of their disputes.
Conciliation may be voluntary or compulsory. It is voluntary if
the parties are free to make use of the same, while it is
compulsory when the parties have to participate irrespective of
whether they desire to do so or not. Section 4 of the Act provides
for appointment for conciliation officers and Section 5 for
constitution of Boards of Conciliation. The Board of conciliation
is to consist of an independent Chairman and two or four member
representing the parties in equal number. While the former is
charged with the duty of mediating in and promoting the settlement
of industrial disputes, the latter is required to promote the
settlement of industrial disputes. The act generally allows
registered trade unions or a substantial number of workers/
employees and also in certain cases individual workman to raise
disputes. The performance of conciliation machinery, though it
does not appear to be unsatisfactory15, causes delays due to
casual attitude of the parties towards conciliation, defective
processes in the selection of personnel and unsatisfactory pre-job
training and period-in-service-training16. Delays in conciliation
are attributed partly to the excessive work-load on officers and
partly to the procedural defects. Since conciliation officer has
no powers of coercion over labour and management , he can only
persuade them to climb down and meet each other. The settlements
that are claimed to result from conciliation are increasingly the
result of political intervention17. Success of conciliation
depends upon the appearances and their sincere participation in
conciliation proceedings of the parties before the conciliation
officers. Non-appearance and non- participation of the parties in
conciliation proceedings poses a serious hindrance in this
direction. On the attitude of the parties National Commission on
Labour observed conciliation is looked upon very often by the
parties as merely hurdle to be crossed for reaching the next
stage. The representatives sent by the parties to appear before
him are generally officer who do not have the power to take
decisions or make commitments: they merely carry the suggestion to
the concerned authorities on either side. This dampens the spirit
of a conciliator. We have been told by the employer’s and workers,
organizations alike that the conciliation machinery is weakened
because of its falling into this type of disuse in recent
years,18 Section 11 of the Act has clothed the conciliation
officers with the power to enter premises occupied by any
establishment and also has been invested with the powers of civil
court under the Civil Procedure Code, 1908 when trying a suit for
enforcing the attendance of any person and examining him on oath,
compelling the production of documents and material objects and
issuing commission for examination of witness for the purpose of
inquiry in to any existing or apprehended industrial dispute.
These provisions are seldom enforced. Moreover, conciliators most
often do not have requisite information on the employers and trade
unions, up to date wage/productivity, information and relevant up
to date case laws which affect his capability to conciliate
effectively . The National commission on labour in this context
laid emphasis for pre job and on the job training of conciliation
officers.
Arbitration: The resort to arbitration procedure may be compulsory
or arbitrary . Compulsory arbitration is the submission of
disputes to arbitration without consent or agreement of the
parties involved in the dispute and the award given by the
arbitrator being binding on the parties to the dispute. On the
other hand in case of voluntary arbitration, the dispute can be
referred for arbitration only if the parties agree to the same.
Section 10 A of the Act, however, provides only for voluntary
reference of dispute to arbitration. This system, however, has not
been widely practiced so far. One of the main reasons for not
gaining popularly of this procedure is lack of arbitrators who are
able to command respect and confidence of the parties to the
dispute. Inter Union rivalry also sometimes makes it difficult in
arriving at an agreement on settlement of an arbitrator who is
acceptable to all the trade unions in the industry.
The Apex court in case
Kurnal Leather Employess Union vs Liberty
Footwear Co.19 has held that the remedy under section 10K is
voluntary and alternative for settlement of industrial dispute but
if the parties to the dispute have agreed in writing for
settlement of their disputes through arbitrator, then the Govt.
cannot refer the dispute to the Tribunal for adjudication.
Adjudication: If despite efforts of the conciliation officer , no
settlement is arrived at between employer and the workman, The
Industrial Dispute a provides for a three tier system of
adjudication viz. Labour Courts , Industrial Tribunals and
National Tribunals under section, 7 , 7A and under section 7B
respectively. Labour Courts have been empowered to decide disputes
relating to matters specified in the Second Schedule. These
matters are concerned with the rights of workers, such as
propriety of legality of an order passed by an employer under the
standing orders, application and interpretation of standing
orders, discharge or dismissal of workman including reinstatement
of grant of relief to workman wrongfully discharged or dismissed,
withdrawal of any customary concession or privilege and illegality
or otherwise of a strike or lockout.
The industrial tribunal are empowered to adjudicate on matters
specified in both the Second and Third schedule i.e. both rights
and interest disputes. The jurisdiction of the Industrial Tribunal
is wider that the labour courts.
In Paulos vs State of Kerala , per Mathew J.20 The government
entrusted the work of selection of candidates for the appointment
of presiding officers of industrial tribunals and labour courts to
the advocate-general . This mode of selection of candidates was
challenged by writ petition in High Court of Kerla on the ground
that the government is bound to make appointment to this post
after giving on opportunity to all eligible persons before
considering for appointment by proper publiciy through
advertisement in newspapers. In the absence of such opportunity
being given to all the persons having such prescribed
qualification to be appointed, the method was unfair and
arbitrary, and, therefore, violative of Article 14 and 16 of the
Constitution. A Single Judge of the Kerala High Court upheld the
appointment holding that the action taken by the government was
within the powers enjoined by law and it is not the requirement of
law that for every recruitment to an office under state, there
must be an advertisement in the public press. Therefore, it is not
necessary that the state must in every case of public employment
issue an advertisement or notice inviting applications for an
office.
In Shellac Industries Ltd v/s Their workmen , per Dutt J.21 A
tribunal once appointed cannot be abolished by an executive act
merely because the government chooses to put an end to it when a
reference is pending before it , for the state cannot do
indirectly what is not permissible to it to do expressly or
impliedly under the Act. Hence, a dispute pending before such a
tribunal cannot be referred to another tribunal under Sec 10 (1)
(d) as that can be done only under Section 33 B.
In case of disputes which in the opinion of the Central Govt.
involve question of national importance or is of such nature that
workers in more than one State are likely to be affected. The Act
provides for constitution of National Tribunals.
Industrial adjudication has
undoubtedly played a conclusive role in the settlement of
industrial disputes and in ameliorating the working and living
conditions of labour class. In this context the National
Commission of Labour observed :
the adjudicating
machinery has exercised considerable influence on several aspects
of conditions of work and labour management relations.
Adjudication has been on of the instruments for the improvement of
wages and working conditions and for securing allowances for
maintaining real wages, bonus and introducing uniformity in
benefits and amenities. It has also helped to avert many work
stoppages by providing an acceptable alternative to direct action
and to protect and promote the interest of the weaker sections of
the working class, who were not well organized or were unable to
bargain on an equal footing with the employer.22
The Act empowers the appropriate government to refer industrial
disputes when the industrial disputes exist or are apprehended .
The Apex court has also held in Shambu Nath vs Bank of Baroda
23
that the power conferred by Section 10 (1) on the Govt. to make
reference can be exercised not only when an industrial dispute
exists but when it is also apprehended. Kotwal J. Kashmir
Ceramtics Ltd. v/s Labour Court 24 It is not permissible for the
labour court to entertain more disputes than are contemplated in
the reference not is it permissible for it to decline to
adjudicate matters which clearly arise in the terms of the
reference.
In the case State of Madras vs C.P. Sarathi
25 and Secretary, India
Tea Association vs Ajeet Kumar Bharat 26 , it was held that to
make a reference is the administrative act of the Government and
the same view has been taken in the case Telecom Conway Divers Mazdoor Sangh & authorities vs State of Bihar27 and in
M/s Avon
Services ( Production Agencies ) Pvt. Ltd vs Industrial Tribunal
Faridabad 28 with the result that the State Government has little
choice in referring to make references of the disputes after
failure of conciliation proceedings . The adjudication system is
not immune from its weakness. The adjudication is dilatory and
expensive . The Apex Court in case Ajaib Singh vs Sirhind Co Op.
Marketing Cum Processing Service Society Ltd 29.has also held that
reference of industrial dispute to labour court is not subject to
limitation under Article 137 of the limitation Act . Thus no
period of limitation having been prescribed under the Act during
which the industrial disputes can be raised and referred for
adjudication sometimes state disputes which arose even 15 to 20
years back are referred for adjudication. Moreover the Labour
court , Tribunal and National Tribunal do not posses power of
executing the order/awards passed by them although they are
presided over by highly qualified and experienced judicial
officers such as District Judges and High Court Judges with the
result that generally workmen, weaker sections of the society
suffer on account of non-implementation of the order/awards.
However, there is no viable alternative to this system. Stringent
provisions, therefore are required for ensuring the time limit
within which the orders /awards to be implemented and clothe the
courts and tribunal with powers of contempt of court for
non-implementation of orders /awards passed by them.
Under the Act, an award made by the adjudication authority is
final as there is no appeal. However actual practice almost every
award made against the employer is challenged in the High Court
under Article 226 and 227 & in the Supreme Court under Article
136. It takes year before final orders are passed in writ
petitions pending before the High Court/Supreme Court. If the
period taken before the adjudicating authority is counted, it does
not take less 10 to 20 years before the protracted litigation
could be disposed off. It is the weaker sections who are
inconvenienced and handicapped the most, by the delay.
It is submitted that the need of the day is to evolve the
frame-work in which workers and the management perceive the need
to co-operate. Bilateral regulation is the most effective method
of evolving norms which enjoy wide acceptance.
It will be appreciate to recall the observation made by a jurist
on the subject:
No doubt, the state intervention in the form of compulsory
adjudication has significantly contributed to the settlement of
all sorts of industrial disputes between industrial employers and
their employees. But its very success is the failure of the
collective bargaining process as the normal method of settling
industrial disputes. It follows that if collective bargaining has
to gain ground, the state intervention through compulsory
adjudication must wane to the vanishing point. It has outlive its
utility . It is far better to leave the management and Trade
unions to settle their differences and disputes among themselves
than referring the issue to a third party settlement. Any attempt
to solve socio-economic problems arising out of industrial
relations within the old framework may have
some limited usefulness, but cannot, in the nature of the case,
achieve any, adequate solution. The frequent break-down in industrial
relations must give way to constructive programmes. The State
intervention through compulsory adjudication has often been
directed to , in the words of Prof. Mathews, the peripheral area
of legal pathology rather than to the healthy core of practical
working cooperation.30
The settlement of disputes, reached by mutual discussion, debate
and negotiation, leaves no rancour behind and helps to create an
atmosphere of harmony and co-operation.
-------------------------------------------
Foot Note:-
1. Mahadeo Dhandu Jadhav vs Labour Appellate Tribunnal [1956] 1
LLJ 252, 254 (Bom)
2. R. Bean , Comparative Industrial Relations: An introduction to
Cross-National Perspectives, 100 (1985).
3. Ibid.
4. All modern states try to fix the rules of the game by, at a
minimum, specifying tactics which are not permitted and by
facilitating the coming-together of the parties for negotiation.
5. H.A. Clegg , Trade Unionism under , Collective Bargaining: A
Theory based on Comparisons of Six Countries,101 (1976)
6. Government of India Gazette (1969) Report of the National
Commission on Labour p. 307.
7. Isaacs J, Jumbuna Coalmine, No liability vs Victoria
Coalminer’s Association 6 CLR 309 , 370 ( High Court of
Australia).
8. Supra Note 6 , page 53.
9. Section 2 (K) of Industrial Dispute Act.
10. What Every Body should know about Labour Law by H.L. Kumar
(Universal Publishing) p 104.
11. Section 2(p) of Industrial Dispute Act.
12. Jagannatha Shetty J Karnal Leather karamchari Sanhathan v/s
Liberty Foot Wear Co 1990 Lab I C 301, 307 , ( SC),
13. The Law of Industrial dispute volume I page 9 O.P. Malhotra.
2004 ed.
14. K Alexander , Collective Bargaining in Industrial Labour in
India , compiled by VB Singh , 1963 edn, pp 384-85.
15. Supra No 6 page 322-23.
16. E.A. Ramaswamy, Trade Unions, Rule Making and Industrial
Relations, (1985) 20 Economic and Political Weekly 524.
17. Ibid.
18. Government of India Gazette (1969)page 323-446-7.
19. A.I.R. 1990 S.C. 247.
20. (1993)2 LLJ 491 (Ker)
21. ( 1967) 1 LLJ 492, 495 ( Cal) (DB)
22. Government of India Gazette (1969)page 325.
23. A.I.R. 1978 S.C. 1088.
24. 1980 Lab IC 192 ( J&K)
25. A.I.R. 1953 S.C. 53.
26. A.I.R. 2000 S.C. 507.
27. 1989(FIR 73 ( SC)
28. (1978), L.L.N. 503.
29. ARR 199 SC 1351.
30. Supra Note 13 Introduction, p. xxii-xxiii.
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Industrial
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