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Roles of Adjudicating Authorities in Settlement of Industrial Disputes

We all know that India is a labour-intensive country. Major of the industries work in the country depends on labour. Since ancient times, wealthy and influential class people harassed their workmen. They tend them to do more work on less pay or no pay, not even necessary facilities are provided to them like sanitary, food, clean water, etc. The conditions were so extreme that the workmen did not even see the sunlight for days. Out of poverty, the workmen had no choice but to work on a lesser wage.

There was no law to protect the interest and restore the fundamental rights of the workmen. After some years, when the industries started establishing, the same condition was with the employers and the employees. It tends to rise in industrial disputes between the workmen and the industrialists, employers and the employees. It made the need for a proper Act or law to combat with the conflicts occurring in the industries. Hence, Industrial Dispute Act, 1947, was passed to fulfill the requirements which were based on socialistic law (law for the welfare of the society). Before the Industrial Disputes Act, 1947, there was no other law to combat with industrial disputes.

The earlier dispute management system was based on Common Law, and as per the common law, disputes are solved according to the contract between the parties. That's the reason why the Common Law system does not apply to the industrial system.

The main objective of the Industrial Disputes Act, 1947 is to ensure a peaceful settlement of the Industrial disputes through the compulsory adjudication method as an alternative to strikes and lockouts, which are inherent in the process of collective bargaining and to establish a machinery for the protection of rights of the workmen and to provide them, Social Justice, by deciding the case based on Socialistic law rather than deciding it on the basis of Contractual Law. Compulsory adjudication may be considered as the cornerstone of the Industrial Disputes Act. Malhotra rightly commented, "the central theme of the act is adjudication."[1]

As the adjudication of disputes is to be managed at the initiative of the government, without asking from the parties to the disputes, it is to be considered as compulsory adjudication, also known as mandatory arbitration in some jurisdiction, as for Australia, where the system is very popular.

Main Objectives of the Industrial Disputes Act, 1947

The Act is primarily meant for regulating the relations between the employers and workmen-past, present, and future. It provides a distinction between 'workmen' as such and the managerial or supervisory staff and confers a benefit on the former only. Apart from this, as stated earlier or the name suggests, the main objective of the Act is to ensure the peaceful settlement of the Industrial Disputes.

From the Judicial view, the Supreme Court, in some of its judgments summed up some principle objects of the Act. In the case Workmen of Dimakuchi Tea Estate vs The Management of Dimakuchi tea[2], the Supreme Court set out some principle object of the Act as follows:
  • The promotion of measure for securing amity and good relationship between the employer and workmen
  • Collective bargaining.
  • Prevention of illegal strikes and lockouts.
  • Relief to workmen in the matter of lay-off, retrenchment and closure of undertaking
  • An investigation and settlement of the industrial dispute between employers and employers, employers and workmen or workmen and workmen with the right of a presentation by a registered trade union.

While the Supreme Court, in the case of Rajasthan State Road Transport vs Zakir Hussain[3] held the following things
  • The object of the Industrial Disputes Act, as its preamble indicates, is to make provision for the investigation and settlement of industrial disputes which means adjudication of such disputes also
  • The Act envisages collective bargaining, contracts between union representing the workmen and the management, a matter which is outside the realm of the common law or the Indian law of contract.
  • The Act also provided for the constitution of various committees and conferred extensive powers on different kinds of authorities in the matter of settlement of adjudication of industrial disputes.
  • It also provides remedies under Sections 10, 12, 18, 19 and 31(2), 33(1)(a), 33C (1) and 33C (2).

Industrial Dispute- Meaning and Concept

Though there are many types of disputes in the society, in layman's language, the Industrial Disputes refers to those disputes that are specifically related to the industries, workers, employer, employee. According to Section 2 (k) of Industrial Disputes Act, 1947 "industrial dispute means 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 the terms of employment or with the conditions of labour, of any person"[4].

To combat or resolve this issue in a peaceful manner the Act provides various modes of settlement of Disputes. These are Conciliation, Adjudication and Arbitration. The Authorities that make the use of conciliation as the sole method of settlement of disputes are: Work Committee, Conciliation Officer, and Board of Conciliation, while the authorities that uses adjudication process to decide any disputes are: Labour Courts, Tribunal and National Tribunal. Apart from these, Provision has also been made for the Constitution of a Court of Inquiry whose main function is to inquire into any matter appearing to be connected with or relevant to the Industrial Dispute.

The main objective of this work is to provide a light on the role of the adjudicating bodies is resolving Industrial Disputes. Justice D.A. Desai also very aptly described the nature and philosophy of compulsory adjudication in his judgment in Workmen of Hindustan Lever Ltd v. Hindustan Lever Ltd[5] in the following words:
"The concept of Compulsory adjudication was statutory ushered in with a view to providing a forum and compelling the parties to resort to the forum for arbitration so as to avoid confrontation and dislocation in industry.

The Legislature considered it wise to arm the government with the power to compel the parties to resort to arbitration with a view to avoid confrontation or trial of strength which are considered wasteful from national and public interest point of view. For assuring uninterrupted production, peace and harmony, industrial relations are necessary."

Composition and Qualification of Adjudicatory Authorities
Earlier the Industrial Dispute Act only provided only for the establishments of Industrial Tribunals for adjudication of all industrial disputes, After the 1956 Amendment, the present three-tier machinery of Labour Courts, Industrial Tribunals and National Tribunal, is provided.

Where the National Tribunal is to be formed by the Central Government in exceptional situations, viz., to resolve disputes of national importance or disputes relating to the industrial establishments situated in more than one state, the Labour Courts and National Tribunals are the normal adjudicatory bodies formed by all the appropriate Governments i.e., the State Government and the Central Government, for adjudication of industrial disputes.

The 1956 Amendment Act draws a clear distinction between the matters specified in Second Schedule that are stated to be "matters within the jurisdiction of Labour Courts" and those in the Third Schedule that are stated to be "matters within the Jurisdiction of Industrial Tribunals."

Labour Courts

Section 7 of the Industrial Dispute Act, 1947 provides that "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 functions as may be assigned to them under this Act"[6] and also specifies the qualification for the presiding officer of a Labour Court.

Qualification for the appointment of a Presiding Officer of the Court:

  • He is or has been the Judge of a High Court
  • He has for a period of not less than 3 years been a district Judge or an Additional Judge.
  • He has held any Judicial office in India for not less than 7 years.
  • He has been the Presiding officer of Labour Court constituted under any provision Act for not less than 5 years.

Disqualification
Section 7-C of the Industrial Dispute Act, 1947 prescribes Disqualifications for the presiding officer appointed to the Labour Court. It Provides that no person shall be appointed to or continue in the office of a Labour Court, Tribunal or National Tribunal, if:
  1. he is not an independent person; or
  2. he has attained the age of sixty-five years.

Jurisdiction of Labour Courts[7]
  1. The propriety or legality of any order passed by an employer under the Standing Orders
  2. The application and interpretation of Standing Order.
  3. Discharge or dismissal of workmen, including reinstatement of, or grant of, or relief to, workmen wrongfully dismissed.
  4. Withdrawal of any customary concession or privilege.
  5. Illegality or otherwise of a strike or lockouts; and
  6. All matters other than those specified in the Third Schedule.

Functions of Labour Court

Section 7 of the Industrial Disputes Act, 1947 itself provides for the functions of a Labour Court that as follows:
  1. Adjudication upon Industrial disputes specified in Second Schedule of the said Act, the following matters are specified in the Second Schedule:
    • The propriety or legality of any order passed by an employer under the Standing Orders
    • The application and interpretation of Standing Order.
    • Discharge or dismissal of workmen, including reinstatement of, or grant of, or relief to, workmen wrongfully dismissed.
    • Withdrawal of any customary concession or privilege.
    • Illegality or otherwise of a strike or lockouts; and
    • All matters other than those specified in the Third Schedule.
       
  2. Performance of some other functions as may be assigned to it under the Industrial Dispute Act, 1947
    The other matters assignable to Labour Courts are:
    • Voluntarily reference of dispute by written agreement between the parties under Section 10A
    • Arbitrations reference under Section 10A.
    • Permission to or approval of the action of discharge under Section 33.
    • Complaint by the aggrieved employees under Section 33A
    • Application under Section 33(c)2 for the computation of any money or any benefit which is capable of being computed in the terms of money.
    • Reference of awards or settlement for the interpretation in case of difficulty or doubt under Section 36A.

Duties of Labour Courts

In the case of Pubali Bank Limited v. Chairman[8], First Labour Court, Dhaka. The question raised that whether Labour Court is a civil court or not. The Lordship of Abdul Halim, The Bangladesh Labour Code, 2006, CCB Foundation Ed.1 P.282

The appellate division after the consideration of all relevant provision of the industrial relation ordinance 1969 held that the labour court acts as civil court for limited purpose but not a civil court at all. It's just a legal fiction or a statutory hypothesis that it is to be treated as a civil court.

Labour Court shall hold its proceedings within the stipulated time and shall submit its award to the appropriate government. The award must be in writing or signed by the presiding officer. The Labour Court has the same power as a Civil Court. The proceeding and the judgement of the labour court can not be challenged on the ground that it is not properly established.


Industrial Tribunals

Section 7-A provides Industrial Disputes Act, 1947 provides that "The appropriate Government 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]. It also provides that a Tribunal shall consist of one person only to be appointed by the appropriate government.

Qualification for the appointment of a Presiding Officer of the Tribunal:

  • He is, or has been a Judge of a High Court or
  • He has, for a period of not less than three years, been a District Judge or Additional District Judge;
  • He is or has been Deputy Chief Labour Commissioner (Central) or Joint Commissioner of the State Labour Department, having a degree in law and at least seven years' experience including labour department including three years of experience as Conciliation Officer: Provided that no such Deputy Chief Labour Commissioner or Joint Labour Commissioner shall be appointed unless he resigns from the service of the Central Government or State Government, as the case may be before being appointed as the presiding officer or;
  • He is an officer of Indian Legal Service in Grade III with three years' experience in grade.

Disqualification
Section 7-C of the Industrial Dispute Act, 1947 prescribes Disqualifications for the presiding officer appointed to the Labour Court. It Provides that no person shall be appointed to or continue in the office of a Labour Court, Tribunal or National Tribunal, if:
  1. he is not an independent person; or
  2. he has attained the age of sixty-five years.

Jurisdiction of Industrial Tribunal

The Industrial Dispute Act, 1947 assigned Industrial Tribunal to adjudicate upon industrial disputes provided in Second and Third Schedule of the Act or any matter appearing to be associated or relevant to such disputes, referred to it under Section 10 (1) (d) of the Act. It is immaterial whether any such matter appearing to be connected with or relevant to the basic dispute relates to any matter enumerated in Second Schedule or Third Schedule or not. The first provision of Section 10 provides that "the dispute relates to matter specified in the third schedule and it is not likely to affect more than a hundred workmen, the appropriate government has the discretion to make a reference to the Labour Court."

Functions of Industrial Tribunal

In India Industrial Tribunal were first established by the Industrial Dispute Act, 1947. According to Section 7-A of Industrial Disputes Act, 1947 the main function of Industrial Tribunal is to adjudicate industrial dispute enumerated under Second and Third Schedule of the Industrial Disputes Act, 1947 and for performing such others functions as may be assigned to them under the Act.

The following matters are specified in the Second Schedule[9]:

  • The propriety or legality of any order passed by an employer under the Standing Orders
  • The application and interpretation of Standing Order.
  • Discharge or dismissal of workmen, including reinstatement of, or grant of, or relief to, workmen wrongfully dismissed.
  • Withdrawal of any customary concession or privilege
  • Illegality or otherwise of a strike or lockouts; and
  • All matters other than those specified in the Third Schedule.

The following matters are specified in the Third Schedule[10]:

  • Wages, including the period and mode of payment
  • Compensatory and other allowances.
  • Hours of work and rest intervals.
  • Leave with wages and holidays.
  • Bonus, profit sharing, provident fund and gratuity
  • Shift working otherwise than in accordance with standing orders;
  • Classification by grades.
  • Rules of discipline;
  • Rationalisation;
  • Retrenchment of workmen and closure of establishment; and
  • Any other matter that may be prescribed.

Duties of Industrial Tribunal

In case of J.K. Iron and Steel Co. Ltd. vs The Iron and Steel Mazdoor Union[11] the Supreme Court commenting upon the status of these tribunals observed that the tribunals under the Act are invested with many trappings of a Court but do not have the same status as Courts. These tribunals need not to follow the strict technicalities of law in adjudication of industrial disputes.

Section 15 provides that "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 the order referring such industrial dispute or the further period extended under the second proviso to sub-section (2-A) of section 10][,submit its award to the appropriate government. ][12].

National Industrial Tribunal

Section 7-B of ID Act, 1947 provides that "the Central Government may, by notification in the Official Gazette, constitute one or more National Industrial Tribunals for the adjudication of industrial disputes which, in the opinion of 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".[13]

Qualification for the appointment of a Presiding Officer of the National Tribunal

Section 7-B of the ID Act, 1947 provides that the National Tribunal shall consists of only one person, who is to be appointed by the Central Government. Provided that:
  • A person shall not be qualified for appointment as a presiding officer of a National Tribunal, unless he is, or has been a Judge of a High Court.
  • The Central Government may, if it so thinks fit, appoint two persons as assessors to advise the National Tribunal in the proceeding before it.

Disqualification
Section 7-C of the Industrial Dispute Act, 1947 prescribes Disqualifications for the presiding officer appointed to the National Industrial Tribunal. It Provides that no person shall be appointed to or continue in the office of a Labour Court, Tribunal or National Tribunal, if:
  1. he is not an independent person; or
  2. he has attained the age of sixty-five years.

Jurisdiction of National Tribunal

Section 10 (1-A) provides that:
where the Central Government is of opinion that any industrial dispute exists or is apprehended and the dispute involves any question of national importance or is of such a nature that industrial establishments situated in more than one State are likely to be interested in, or affected by, such dispute and that the dispute should be adjudicated by a National Tribunal."[14]

Section 10 (2) provides that:
when the parties to the industrial dispute apply to government to refer dispute to the National Tribunal and if the government satisfies it shall make the reference to the Industrial Tribunal."[15]

Conclusion
In my opinion the adjudicatory bodies play a vital role in the peaceful settlement of industrial disputes, as it complies with the main objective of the Industrial Dispute Act,1947. In a developing country like India where more industries is to be set up in future which will obviously raise the Industrial disputes so to combat with that adjudication is the best method among all of the four ways of settlement of disputes. For that there must be an Act or law to manage it all.

End-Notes:
  1. Malhotra. O.P., The Law of Industrial Disputes, (1988), 5th ed. Vol. 1, p. 16
  2. AIR 1958 353, 1958 SCR 1156
  3. Civil Appeal No. 5176 of 2005 LLR 1044
  4. Industrial Disputes Act, 1947, Section 2(k), No. 14, Acts of Parliament 1947 (India)
  5. (1984) Lab.I.C. 276 (286-87) (S.C)
  6. Industrial Dispute Act, 1947, Section 7, No. 14, Acts of Parliament 1947 (India)
  7. Industrial Dispute Act, 1947, Second Schedule, No. 14, Acts of Parliament 1947 (India)
  8. II ADC (2005) 12
  9. Industrial Dispute Act, 1947, Second Schedule, No. 14, Acts of Parliament 1947 (India)
  10. Industrial Dispute Act, 1947, Third Schedule, No. 14 Acts of Parliament 1947 (India
  11. AIR 1956 231, 1955 SCR (2)1315
  12. Industrial Disputes Act, 1947, Section 10, No. 14, Acts of Parliament 1947 (India)
  13. Industrial Disputes Act, 1947, Section 7-B, No. 14, Acts of Parliament 1947 (India
  14. Industrial Dispute Act,1947, Section 10 (1-A), No. 14, Acts of Parliament 1947 (India)
  15. Industrial Dispute Act,1947, Section 10 (2), No. 14, Acts of Parliament 1947 (India)

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