Some of the major industrial dispute settlement machinery are as described:- 1.
Conciliation 2. Court of Inquiry 3. Voluntary Arbitration & 4. Adjudication.
This machinery has been provided under the Industrial Disputes Act, 1947. It, in
fact, provides a legalistic way of setting the disputes. As said above, the goal
of preventive machinery is to create an environment where the disputes do not
arise at all.
This machinery comprises following organs:
2. Court of enquiry.
3. Voluntary arbitration
4. Adjudication (Compulsory arbitration)
Conciliation is a form of mediation. Mediation is the act of
making active effort to bring two conflicting parties to compromise. Mediation,
however, differs from conciliation in that whereas conciliator plays only a
passive and indirect role, and the scope of his functions is provided under the
law, the mediator takes active part and the scope of his activities are not
subject to any statutory provisions.
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 an
amicable settlement of agreed solution. The Industrial Disputes Act, 1947
provides for conciliation, and can be utilised either by appointing conciliation
officers (permanently or for a limited period) or by constituting a board of
This conciliation machinery can take a note of a dispute or
apprehend dispute either on With a view to expediting conciliation proceeding,
time-limits have been prescribed-14 days in the case of conciliation officers
and two months in the case of a board of conciliation, settlement arrived at in
the course of conciliation is binding for such period as may be agreed upon
between the parties or for a period of 6 months and with continue to be binding
until revoked by either party. The Act prohibits strike and lockout during the pendency of conciliation proceedings before a Board and for seven days after the
conclusion of such proceedings.
Conciliation Officer: The law provides for the
appointment of Conciliation Officer by the Government to conciliate between the
parties to the industrial dispute. The Conciliation Officer is given the powers
of a civil court, whereby he is authorised to call the witness the parties on
oath. It should be remembered, however, whereas civil court cannot go beyond
interpreting the laws, the conciliation officer can go behind the facts and make
judgment which will be binding upon the parties.
On receiving information about
a dispute, the conciliation officer should give formal intimation in writing to
the parties concerned of his intention to commence conciliation proceedings from
a specified date. He should then start doing all such things as he thinks fit
for the purpose of persuading the parties to come to fair and amicable
settlement of the dispute.
Conciliation is an art where the skill, tact,
imagination and even personal influence of the conciliation officer affect his
success. The Industrial Disputes Act, therefore, does not prescribe any
procedure to the followed by him. The conciliation officer is required to submit
his report to the appropriate government along with the copy of the settlement
arrived at in relation to the dispute or in case conciliation has failed, he has
to send a detailed report giving out the reasons for failure of conciliation.
The report in either case must be submitted within 14 days of the commencement
of conciliation proceedings or earlier.
But the time for submission of the
report may be extended by an agreement in writing of all the parties to the
dispute subject to the approval of the conciliation officer. If an agreement is
reached (called the memorandum of settlement), it remains binding for such
period as is agreed upon by the parties, and if no such period is agreed upon,
for a period of six months from the date on which the memorandum of settlement
is signed by the parties to the dispute, and continues to be binding on the
parties after the expiry of the period aforesaid, until the expiry of two months
from the date on which a notice in writing of an intention to terminate the
settlement is given by one of the party or parties to the settlement. Board of
Conciliation In case Conciliation Officer fails to resolve the differences
between the parties, the government has the discretion to appoint a Board of
The Board is tripartite and ad hoc body. It consists of a chairman
and two or four other members. The chairman is to be an independent person and
other members are nominated in equal number by the parties to the dispute.
Conciliation proceedings before a Board are similar to those that take place
before the Conciliation Officer. The Government has yet another option of
referring the dispute to the Court of Inquiry instead of the Board of
The machinery of the Board is set in motion when a dispute is
referred to it. In other words, the Board does not hold the conciliation
proceedings of its own accord. On the dispute being referred to the Board, it is
the duty of the Board to do all things as it thinks fit for the purpose of
inducing the parties to come to a fair and amicable settlement. The Board must
submit its report to the government within two months of the date on which the
dispute was referred to it. This period can be further extended by the
government by two months.
2. Court of Inquiry
In case of the failure of the conciliation
proceedings to settle a dispute, the government can appoint a Court of Inquiry
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.
The court of enquiry is required to submit its report within a period of six
months from the commencement of enquiry.
This report is subsequently published by the government within 30 days of its
receipt. 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 to enquiry. A court of enquiry is different from a Board
of Conciliation. The former aims at inquiring into and revealing the causes of
an industrial dispute. On the other hand, the latter's basic objective is to
promote the settlement of an industrial dispute. Thus, a court of enquiry is
primarily fact-finding machinery.
3. Voluntary Arbitration
On failure of conciliation proceedings, the
conciliation officer many 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 of the dispute through an arbitrator jointly appointed by the parties
to the dispute.
The process of arbitration saves time and money of both the
parties which is usually wasted in case of adjudication. Voluntary arbitration
became popular as a method a settling differences between workers and management
with the advocacy of Mahatma Gandhi, who had applied it very successfully in the
Textile industry of Ahmedabad. However, voluntary arbitration was lent legal
identity only in 1956 when Industrial Disputes Act, 1947 was amended to include
a provision relating to it.
The provision for voluntary arbitration was made
because of the lengthy legal proceedings and formalities and resulting delays
involved in adjudication. It may, however, be noted that arbitrator is not
vested with any judicial powers. He derives his powers to settle the dispute
from the agreement that parties have made between themselves regarding the
reference of dispute to the arbitrator. The arbitrator should submit his award
to the government.
The government will then publish it within 30 days of such
submission. The award would become enforceable on the expiry of 30 days of its
publication. Voluntary arbitration is one of the democratic ways for setting
industrial disputes. It is the best method for resolving industrial conflicts
and is a close supplement to collective bargaining. It not only provides a
voluntary method of settling industrial disputes, but is also a quicker way of
settling them. It is based on the notion of self-government in industrial
Furthermore, it helps to curtail the protracted proceedings attendant
on adjudication, connotes a healthy attitude and a developed outlook; assists in
strengthening the trade union movement and contributes for building up sound and
cordial industrial relations.
The ultimate remedy for the settlement of an industrial
dispute is its reference to adjudication by labour court or tribunals when
conciliation machinery fails to bring about a settlement. Adjudication consists
of settling disputes through intervention by the third party appointed by the
The law provides the adjudication to be conducted by the Labour
Court, Industrial Tribunal of National Tribunal. A dispute can be referred to
adjudication if hot the employer and the recognised union agree to do so. A
dispute can also be referred to adjudication by the Government even if there is
no consent of the parties in which case it is called compulsory adjudication
As mentioned above, the dispute can be referred to three types of tribunals
depending on the nature and facts of dispute in questions.
(a) Labour courts,
(b) Industrial tribunals,
(c) National tribunals.
procedure, powers, and provisions regarding commencement of award and period of
operation of award of these three bodies are similar. The first two bodies can
be set up either by State or Central Government but the national tribunal can be
constituted by the Central Government only, when it thinks that the adjudication
of a dispute is of national importance. These three bodies are into hierarchical
It is the Government's prerogative to refer a dispute to any of these
bodies depending on the nature of dispute.
(a) Labour Court:
A labour court
consists of one person only, who is normally a sitting or an ex-judge of a High
Court. It may be constituted by the appropriate Government for adjudication of
disputes which are mentioned in the second schedule of the Act.
referred to a labour court may include:
(i) The propriety or legality of an order passed by an employer under the
(ii) The application and interpretation of Standing Orders.
(iii) Discharge and dismissal of workmen and grant of relief to them
(iv) Withdrawal of any statutory concession or privilege.
(v) Illegality or otherwise of any strike or lockout.
(vi) All matters not specified in the third schedule of Industrial Disputes
Act, 1947. (It deals with the jurisdiction of Industrial Tribunals).
(b) Industrial Tribunal:
Like a labour court, an industrial tribunal is also a
one-man body. The matters which fall within the jurisdiction of industrial
tribunals are as mentioned in the second schedule or the third schedule of the
Act. Obviously, industrial tribunals have wider jurisdiction than the labour
courts. Moreover an industrial tribunal, in addition to the presiding officer,
can have two assessors to advise him in the proceedings; the appropriate
Government is empowered to appoint the assessors.
The Industrial Tribunal may be referred the following issues:
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 the standing orders.
7. Rule of discipline.
10. Any other matter that may be prescribed.
(c) National Tribunal:
The Central Government may constitute a national
tribunal for adjudication of disputes as mentioned in the second and third
schedules of the Act or any other matter not mentioned therein provided in its
opinion the industrial dispute involves questions of national importance
or the industrial dispute is of such a nature that undertakings established in
more than one state are likely to be affected by such a dispute
Government may appoint two assessors to assist the national tribunal. The award
of the tribunal is to be submitted to the Central Government which has the power
to modify or reject it if it considers it necessary in public interest.