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Industrial Disputes and The Alternate Dispute Resolution System Under The Industrial Disputes Act, 1947: A Critical Study
1
CHAPTER I
INTRODUCTION
Disputes are endemic in any organization. Even in a well - knit family where
parental, maternal and fraternal feelings are supposed to be pervasive, they are not
ruled out. Thus, in an industrial set up, because of the dissimilar characteristics of the
groups which out of necessity come together to engage in the production of material
goods or services, the disputes or difference aspects is bound to loom large.
In India the industrialization process started during the middle of the 19th
century with the advent of the Britishers1.The first cotton mill in India was established
in 1851 in Bombay and first jute mill in 1855 in Bengal. This was the beginning of the
modern factory system in India.2 At the time of India‟s independence, mixed
economy was the basis for economic development and perhaps it was the need of the
hour. However, with the change in world‟s economic scenario, India made
considerable change in its economic and industrial policy, which in effect meant
emergence of the period for liberalization when government controls were lifted and
the public sector giants were allowed to disinvest and channeling agencies were
introduced for the purposes of restructuring the industries3.
The liberalized industrial policy fascinated a large number of private investors,
both national and international, to invest in the Indian economy on a large sale. The
multinational companies are availing this golden opportunity in a remarkable way to
share Indian markets. Now a day, it is seen that, certain non agricultural land and even
agricultural land also in the name of special Economic Zone is taken over by
Industrialists in order to establish various industrial plants. Point is that, it is very
difficult to imagine the progress of economy without industry. Under this changed
industrial scenario, dispute resolution mechanism has assumed great importance
because more the industries established, more labour force would be required and
recruited and consequently, more labour problems would crop up.
1 Agarwal S.L.,Labour Relations Law in India 1980 at3.
2 Dr.Goswami V.G.,Labour and Industrial Law, 2008 at 245.
3 Ibid Preface.
Industrial Disputes and The Alternate Dispute Resolution System Under The Industrial Disputes Act, 1947: A Critical Study
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Good Industrial relations is a pre requisite for the successful industrialization
in any country. It is therefore, imperative to evolve a suitable system of machinery
for settling industrial disputes and also for preventing them.
For resolution of disputes there is a legal system in every human society. We
know the maxim, “where there is a right there is a remedy”, and our courts are also
working hard to achieve this ideal that where there is a wrong there must be a remedy.
This legal pattern of resolving disputes has resulted in number of pending cases.
Courts are overcrowded with cases. According to data available with the apex court,
the number of pending cases with the Supreme Court is 61300 pending matters as on
28/02/20154. As per the data near about 44.5 lakhs cases are pending in High Courts
in India and 2.6 corers cases are pending on lower courts up to the year ending 20135.
Hence began the search for alternative to the conventional court system.
In India, under the relevant provisions of the Industrial Disputes Act, 1947
various machineries of dispute resolution namely conciliation and mediation,
collective bargaining, investigation, Arbitration for settlement of Industrial Disputes
have been provided. Although we are having such strong alternative dispute
resolution system by way of conciliation and mediation, collective Bargaining,
negotiation, arbitration still our courts are overburdened with the cases regarding
Industrial Disputes.
Taking in to account the importance of Alternate Dispute Resolution
mechanism, let us find out what are various obstacles in the smooth working of this
system and what will be tentative solutions to this problem.
1.1 Historical Perspectives of Alternate Dispute Resolution (Herein
after called as ADR) in India:
ADR is an abbreviation that stands for Alternative dispute resolution. It also
stands for Appropriate Dispute Resolution. It refers to all those methods of resolving
disputes, which are alternatives for litigation in the courts. It refers to an assortment of
dispute resolution procedures that primarily serve as alternatives to litigation6 and are
4 http://supremecourtofindia.nic.in/pendingstat.htm visited on 1-4-2015.
5http://www.ndtv.com/india-news/more-than-3-crore-court-cases-pending-across-country-709595
visited on 1-4-2015 6 Bryan A. Garner (Ed.), Black’s Law Dictionary, 2004 at 112-113 also defines ADR as a procedure
for settling a dispute by means other than litigation; In fact all ADR processes share one essential
characteristic that they differ from litigation in a court of law.
Industrial Disputes and The Alternate Dispute Resolution System Under The Industrial Disputes Act, 1947: A Critical Study
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generally conducted with the assistance of a neutral and independent third party. ADR
is by no means a recent phenomenon, though it has been organized on more scientific
lines, expressed in more clear terms and employed more widely in dispute resolution
in recent years than before. The basic ADR methods, however, have been in existence
in some form or the other in the days before the modern justice delivery system was
introduced by the colonial British rulers.
Vedas stress on the importance of harmonious industrial relations. The Vedic
literature contains many references on the subject of industrial relations. W.N.
Morland, a scholar on industrial relations states “It has been realized in the Vedas that
one of the important factors necessary for happiness in a group or a community is
good mutual relations. A sense of trusteeship was prevailing during the vedic period.
It is a fact that the institution of mediation and conciliation had been conceived during
this period. Industrial relation machinery during the Vedic times consisted of
“Madhyamas” (conciliators or mediators) men of position and influence in the
society.
As per Dharma, industrial dispute used to be settled at first instance mutually
by employer and employees themselves. If it could not be resolved then it used to be
referred to “Madhayamas” (mediators or conciliators). In case the industrial dispute
could not be resolved even through conciliation or through mediators, it used to be
referred to a board appointed by the king.7
Again, the Panchayat, in its original conception was, primarily, an instrument
of law and order, a means of conciliation and arbitration within the community8. The
concept of parties settling their disputes by reference to a person or persons of their
choice or private tribunals was well known to ancient India, long before the king
came to adjudicate on disputes between persons. Such disputes were quite peacefully
decided by the intervention of the Kulas (family or clan assemblies),Srenis(guilds of
men following the same occupation), Parishads (assemblies of learned men who knew
law) and such autonomous bodies.9
7 Dr. Onkar Sharma, Industrial Jurisprudence in Vedic and Ancient Literature, Awards Digest: Journal
of Labour Legislation [Vol. XXXVII : 5-8] at 61. 8 Ashwanie Kumar Bansal, Arbitration and ADR, 2005, at 44.
9 William Sheffield & P.C.Rao, Alternative Dispute Resolution, 2006, at 27.
Industrial Disputes and The Alternate Dispute Resolution System Under The Industrial Disputes Act, 1947: A Critical Study
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The ADR procedures consist of negotiation10
, conciliation, mediation11
,
arbitration, collective bargaining, Expert Determination12
, Early Neutral Evaluation13
by a third person, Mini-trial14
, Dispute Resolution Boards15
, and etc.
ADR techniques are extra-judicial in character .They can be used in almost all
civil matters which are capable of being resolved, under law, by agreement between
parties.16
The advantages of ADR are several, it can be used at any time, even when a
case is pending before a court of law, it is speedy and inexpensive, ADR is not bound
by strict procedural laws so it is flexible, it can be used with or without a lawyer, it
helps in the reduction of the work-load of the courts and thereby help them to focus
attention on the cases which ought to be decided by courts.
1.2 Statement of the Problem and Its Significance:
The concept of “Industry” postulates partnership between capital and labour. Joint
contribution of capital and labour leads directly to the production which the industry
has in view.
The present dynamic age in India is marked by tremendous growth in the field
of Industrialization. In this modern age, industry plays an important role in the
national economy.
10
Negotiation is an ADR process by which the parties resolve their disputes themselves by arriving at a
mutually acceptable amicable solution. In this mode of settlement the parties or their
representatives128 voluntarily sit together themselves and negotiate directly by putting the factual
content of the dispute and discuss their claims and counter claims, earmarking the extent to which they
can forego their claims and their readiness to accommodate each other. (See S.S. Mishra, Law of
Arbitration and Conciliation in India (With Alternative Dispute Resolution Mechanisms (Central Law
Agency, Allahabad, 1st Edn., 2007). 11
The Black‟s Law Dictionary defines mediation as a method of non binding dispute resolution
involving a neutral third party (mediator) who tries to help the disputing parties to reach a mutually
agreeable solution.( Bryan A. Garner (Ed.), Black’s Law Dictionary at 1003. 12
Expert Determination is an ADR process in which the parties agree to appoint an independent third
party, who is an expert in the field to which the dispute relates so as to adjudicate their dispute on
merits. 13
„Early Neutral Evaluation‟ is an ADR process where a concise presentation given to an experienced
neutral followed by an assessment of the case by the neutral at an early stage forms the baseline for a
consensual resolution of the dispute between the parties. 14
A Mini Trial consists of an abbreviated adjudication like presentation of evidence and arguments to a
neutral joined by the high level principals of each of the disputant parties, which is then followed by
negotiations between the principals. Taken from (Frank E.A. Sander and Stephen B. Goldberg, “Fitting
the Forum to the Fuss: A User Friendly Guide to Selecting an ADR Procedure”, in P.C. Rao and
William Sheffield (Eds.), Alternative Dispute Resolution, 1997 at 331 ). 15
Dispute Review Board (DRB) is a tribunal consisting of experienced and impartial expert reviewers
for facilitating resolution of disputes related to a particular project or a particular type of dispute. 16
Supra note 10 at 24.
Industrial Disputes and The Alternate Dispute Resolution System Under The Industrial Disputes Act, 1947: A Critical Study
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Co-operation and conflicts are two forms of interaction between workmen
and management. Whether it is a developed or developing economy industrial co-
operation is essential to achieve the individual, institutional, industrial and national
objectives.
Disputes in industry is so universal that, even in the best managed
establishment where the co-operation between the labour and management is
maximum, the workmen and the management are occasionally subjected to the stress
and strain of different manifestation of conflicts.
With the growth of industrialization, the relationship between capital and
labour is becoming more and more complicated. There is inbuilt diversity in these
two classes in many ways i.e. they are socially economically, culturally, financially
different. Both are having dissimilar interests, so chances of disputes, conflicts are
more there in industry.
When these conflicts between capital and labour expressed in its overt
manifestations i.e. strikes, lockouts, Gherous not only parties to the disputes are
adversely affected but also the community at large and the national economy. The
losses to the worker, employer and the economy are always greater than the benefits
the workmen or the employer might gain. Furthermore, the community is denied
from number of essential services and goods. At times the economic life of the
country may get disturbed seriously.
In the light of this, it is an absolute necessity to make sincere efforts to resolve
the conflicts amicably the moment it arises or is imminent. Then what techniques
could be employed to bring about peaceful settlements of industrial disputes?
Industrial Disputes Act, 1947 the main object of which is to provide a
machinery and forum for the investigation and settlement of Industrial Disputes and
for purposes analogous and incidental thereto, provides for some alternative dispute
resolution mechanism such as:
Negotiation:
Negotiation is one of the principal means of settling labour disputes. The
Industrial Disputes (Amendment Act), 2010 had substituted a new chapter for chapter
II-B, providing for reference of certain individual disputes to grievance Settlement
Authority. Under this Chapter, Section 9C has made it obligatory for the employers
to make provision for Grievance Settlement Authority for settlement of industrial
Industrial Disputes and The Alternate Dispute Resolution System Under The Industrial Disputes Act, 1947: A Critical Study
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disputes connected with an individual workman employed in an establishment in
which twenty of more workmen are employed or have been employed on any day in
the preceding twelve months.
Collective Bargaining:
Collective Bargaining is a technique by which dispute are resolved amicably,
agreement, rather than by coercion. It 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 sanction available to each side.
Conciliation:
Conciliation is very important in resolving industrial disputes. It is the art of
opening a dialogue between the parties to a dispute and helping them to arrive at a
compromise settlement. To be able to do this, a conciliation officer must win the
confidence of the parties.
Section 4 of the Act authorizes the “appropriate government” to appoint
conciliation officers, charged with the duty of mediation in and promoting the
settlement of industrial disputes. Section 5 authorizes the appropriate government to
constitute a Board of Conciliation for promoting the settlement of industrial disputes.
Investigation:
Section 6 of the Industrial Disputes Act, 1947 empowers the appropriate
Government to constitute a court of Inquiry for enquiring into any matter appearing to
be connected with or prescribed by S. 11, S. 14 requires such Court to enquire into the
matters referred to it and report thereon to the appropriate Government ordinarily
within a period of six months from the commencement of the inquiry. This function
of the court is in the nature of an investigation.
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 agreed to the
Industrial Disputes and The Alternate Dispute Resolution System Under The Industrial Disputes Act, 1947: A Critical Study
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same. Section 10 A of the Industrial Disputes Act 1947, provides only for voluntary
reference of dispute to arbitration.
Despite The Industrial Disputes Act, 1947 provides these above mentioned
alternate dispute resolution system to settle the disputes amicably; still our courts are
overburdened with the cases. Parties are inclined more to approach to Courts and
Tribunals for the settlement of their disputes. There might be something going wrong
with these machineries which need to be addressed through this research work. Hence
it is intended to critically analyze the working of these machineries under the Act of
1947.
1.3 Importance and Relevance of the Topic:
It cannot be gainsaid that industrial peace and amenity are of great
significance in a developing country lie India. Peaceful and harmonious
relationship between the partners in production would ensure to workers economic
security and also facilities economic development of the nation. Perpetual protests
and continuous confrontations, while distrust and disharmony among employees and
workmen, would also hamper the nation‟s economic progress.
In the industrial dispute, human relations are at stake. To maintain good
relations between these partners in production, patience on the part of workers as well
as employers is essential. In earlier days people used to have lot of patience, but today
they are impatience. It may be due to various factors such as aggressiveness, feeling
of insecurity, lack of intake of nutritious food and so on.
In all these issues, “Make in India” agenda of the Central Government adds
requirement to critically evaluate the working of dispute settlement machineries under
the Act of 1947. The said initiative is launched by the Prime Minister Narendra Modi
on 25th
September 2014, which aims at in encouraging industries to manufacture their
products in India. The main focus of this initiative is job generation in India and
because of this, number of people will get employment in the industries. But for the
success of this programme, it is required that workers who got employment and their
employer must have cordial relations at workplace. In case of any difference it must
be sorted out and settled amicably and speedily.
With the judicial system in most of the countries including India being
burdened with cases, any new case takes a long time to be decided and till the time the
final decision comes, there is a state of uncertainty, which makes any activity almost
Industrial Disputes and The Alternate Dispute Resolution System Under The Industrial Disputes Act, 1947: A Critical Study
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impossible. On the other hand taking into account the place of industry in the national
economy, financial condition of workers, speed of production which is expected in
this globalized world there is need to settle these disputes quite speedily which is not
possible in traditional judicial system. To get out of this maze of litigation most of
the countries encourage alternative methods of dispute resolution.
In the light of this scenario, the machinery provided under the Industrial
Disputes Act, 1947 for the settlement of Industrial Disputes assumes significance and
is of great consequence. Industrial Disputes Act, 1947 provides for an in-built
alternate dispute resolution system by way of negotiations, Collective bargaining,
arbitration, conciliation, mediation, and investigation. But if we look into practical
working of this machinery, we will realize that, this machinery is not that much
successful in resolving disputes between the parties. There is increasing desire of the
parties for compulsory adjudication. Therefore, a need is felt to have a fresh look
upon the working of this machinery.
The National Commission on Labour had felt that, there was need to bring
reforms in the mechanism of dispute settlement under the Industrial Disputes Act,
1947; several attempts to modify the legislative frame work for regulating Industrial
relations and the procedure for adjudication of Industrial Disputes have failed
Through this research work an attempt is intended to find out the obstacles in
the effective functioning of this ADR system under Industrial Disputes Act, 1947 and
to suggest some solutions to make this system more effective and useful.
1.4 Justification for Selecting the Research Problem:
Alternative Dispute Resolution is rapidly developing at national and
international level, offering simple methods of resolving disputes. Increasing trends
of ADR service can easily be inferred from the growth of “Arbitration Clause” in
majority of contracts.
When we look into the position of alternative dispute resolution system which
is available in other branches of law like Family Law, the ADR has got much
recognition in settlement of family disputes. In civil matters also, by amendment to
the Code of Civil Procedure in the year 2002 Section 89 has been included in the code
which gives importance to mediation, conciliation and arbitration. In this area also
ADRs has done a quite satisfactory job.
Industrial Disputes and The Alternate Dispute Resolution System Under The Industrial Disputes Act, 1947: A Critical Study
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The other legislation which has given more emphasis on the alternative
dispute resolution is the National Legs Services Authority Act, 1985. Under this Act,
Lok Adalats have acquired wide acceptance among the public as the results are quick
and less expensive.
It is said that, the first avenue where the conciliation which is an important
component of ADRs has been effectively introduced and recognized by law was in
Labour Law, namely The Industrial Disputes Act, 1947. When we look into the
working of these alternate dispute resolution systems under Industrial Law, it is seen
that, it is not satisfactory. While evaluating the working of conciliation machinery,
National Commission on Labour itself indorsed that the working of the conciliation
machinery involves delay. Voluntary arbitration also has not proved to very popular
and day by day there is increasing desire of the parties to industrial disputes for
compulsory adjudication. As far as collective bargaining is concern in India, the
tradition of free collective bargaining has always been weak; consequently, there is
continuous and systemic surveillance over industrial disputes on the part of the
Government by resorting to compulsory adjudication.
So, in the light of this scenario it is worthwhile to evaluate critically the
working of this alternate dispute resolution machinery which is provided under the
Industrial Disputes Act, 1947.
1.5 Objectives of the Research:
1. To study various international conventions as well as recommendations and
Constitutional provisions which give strong base to these ADR techniques to settle the
Industrial Disputes.
2. To study what alternative methods are available in various countries like U.K.,
U.S.A., Australia, Russia, France and China to resolve industrial disputes.
3. To study various alternative disputes resolution systems available under the Industrial
Disputes Act, 1947 to settle Industrial Disputes and to have a comparative analysis of
working of ADR under the Industrial Disputes Act and Arbitration and Conciliation
Act, 1996.
4. To have a critical analysis of working of these machineries under the Industrial
Disputes Act, 1947 and to identify lacunae (if any) and obstacles in the effective
working of these machineries under the Industrial Disputes Act, 1947.
Industrial Disputes and The Alternate Dispute Resolution System Under The Industrial Disputes Act, 1947: A Critical Study
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5. To suggest some solutions for the effective functioning of the alternate dispute
resolution machinery under the Industrial Disputes Act, 1947.
1.6 Hypothesis:
In order to comprehend above objectives of the research work, following hypothesis
has been framed.
1. Majority of industries don‟t have recognized unions which is a pre requisite for the
successful collective bargaining.
2. Statutory compulsion regarding formation of Works Committees and Grievance
Redressal Machinery is their only in the Act. Practically these committees have not
been constituted by majority of industries.
3. The Machinery for the settlement of Industrial Dispute under the Industrial Disputes
Act, 1947 provides only a lip service in resolving Industrial Disputes.
4. It is impaired by undue political influence and adamant nature of parties to the
Industrial Dispute.
5. Use of Arbitration in the case of an industrial dispute is very rare.
6. Large scale ignorance on the part of workers (particularly small scale industries)
about these machineries under the Industrial Disputes Act, 1947.
1.7 Research Methodology Adopted:
In this research work doctrinal as well as non doctrinal method of research is
followed. In order to achieve the object of the study descriptive method and analytical
methods are adopted. It is descriptive so far as it deals with what exactly the Industrial
Disputes Act is, its object, provisions and various modes of settlement of Industrial
Disputes. It is analytical in the way it tried to analyze and make a critical evaluation
of the working of these ADR methods under the Industrial Disputes Act, 1947.
1.8 Type of Research:
In this research work, researcher has followed both doctrinal as well as non
doctrinal method of research.
A doctrinal research means a research that has been carried out on a
proposition or propositions by way of analyzing the existing statutory provisions and
cases by applying the reasoning power. In this research work, for understanding the
working of ADR system under the Industrial Disputes Act, it is essential to study
Industrial Disputes and The Alternate Dispute Resolution System Under The Industrial Disputes Act, 1947: A Critical Study
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what all ADR modes are available under the Industrial Disputes Act, 1947 for the
settlement of industrial disputes. Hence, for this part i.e. Industrial Disputes and
various alternative methods available under the Industrial Disputes Act for its
settlement, the researcher is banked upon doctrinal method of research.
But the present research topic requires the empirical method of research also,
because for analyzing the working of this alternative machinery under the Industrial
Disputes Act, it seems necessary to the researcher, to know from the people connected
with this field, e.g. workers, trade union leaders‟, employers, conciliation officers and
etc. Hence, empirical method of research is followed by the researcher.
1.9 Sources of Data:
The research work undertaken by the researcher is based on the collection of
data from primary and secondary sources.
The research requires the study of International Instruments, Foreign statutes
as well as Indian Laws. Among the International instrument, researcher has referred to
UDHR and various conventions and recommendations passed by the International
Labour Organisation on the research topic. Similarly report of the National
Commission on Labour is also taken into consideration.
Apart from this, primary data is collected from employers, workers, trade
union leaders and officers having task of conciliation. For this purpose, researcher has
framed and printed questionnaire for these three categories of people viz. worker,
employer and officers.
As far as workers are concerned, workers who are working in the factories,
banks, domestic workers, hospital workers, Mathadi workers, S.T. workers and those
working in building constructions are interviewed with. Similarly office bearers of
trade unions are also interviewed. Academic discussion with the Advocates who are
dealing with Labour disputes is also carried out by the researcher in order to find out
practical hurdles in the smooth working of these machineries under the Industrial
Disputed Act, 1947.
Secondary data is collected from text books on Industrial Law, Industrial
relations, research articles, journals, E-books and E-Journals, Magazines, News paper
clippings, and etc.
Industrial Disputes and The Alternate Dispute Resolution System Under The Industrial Disputes Act, 1947: A Critical Study
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The APA style of citation given in the Blue Book is followed for making
citations.
The researcher with the help of these two methods collected the data and analyzed the
same.
1.10 Universe:
Data from workers and employers is collected from the Waluj MIDC, Shendra
MIDC and Chikalthana MIDC of Aurangabad city i.e. workers, employers working in
these areas were selected for the purpose of data collection.
As far as data from officers is concerned, total Marathwada Region was
selected. Labour Commissioner of this region, 2 Assistant Labour Commissioners
working in the Aurangabad city, 6 Labour officers in the Aurangabad city, 1 labour
officer each from Jalna, Beed, Parbhani, Hingoli, Latur, Nanded and Osmanabad were
selected for interview.
Sample:
Workers, employers and conciliation officers from Aurangabad city were used
as sample.
Sample Size:
Sample size is as follows:-
1. Labour Commissioner-1.
2. Assistant Labour Comissioner-2
3. Labour Officers-10.
4. Workers-105.
5. Employers-100.
1.11 Sampling Method:
Sample for this research work is collected through interview (questionnaires)
and observation method for which random sampling method was adopted.
The primary data collected from the sample is analyzed to find out actual
working of these machineries under the Industrial Disputes Act, 1947 and to suggest
some ways and solutions for improving the working of these machineries under the
said Act. For analyzing the data, Microsoft Excel and simple tools of statistical
analysis are used to draw reliable conclusions.
Industrial Disputes and The Alternate Dispute Resolution System Under The Industrial Disputes Act, 1947: A Critical Study
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1.12 Limitations:
It is important to critically examine the whole study and signal out the
limitations. Such limitations can be taken into account while finding avenues for
future research under the said theme.
As far as conceptual frame work part is concerned, the researcher has banked
upon only selective and relevant concepts i.e. definition of Industry, Industrial
Dispute, Workmen and Appropriate Government. Only bird‟s eye view is there as
research work is dealt with settlement of Industrial Disputes through conciliation,
negotiation, mediation and arbitration. However, it does not present any significant
problem to the present study as the researcher has referred to many judicial decisions
under the respective concepts.
In this research work, the researcher has focus on settlement of industrial
dispute through the alternative dispute resolution methods i.e. negotiation,
conciliation, arbitration court of enquiry and etc. That's why working of Industrial
adjudication by Labour Court, Industrial Tribunal and National Tribunal is not
covered in depth in the research work.
As far as judicial contribution in strengthening ADR under the Industrial
Dispute Act is concerned, only those cases in which Supreme Court and High Courts
emphasized through their decisions to settle the industrial disputes through the
alternative methods of dispute settlement are covered in this research work. Decisions
of the Courts between the years from 1954 to 2014 are discussed.
In collecting data through questionnaires the researcher has selected
Aurangabad city as universe, the reason for the same is that, as the Aurangabad is the
fastest developed city in the Asia17
. It tops the chart among the developing cities.
Aurangabad has a renowned industrial area and is divided into four zones namely
Chikalthana, Waluj, Chitegaon & Shendra MIDC It has around over 195 units of large
scale enterprises which has generated 80,500 jobs with total investment of Rs.7,384
cr. It has 3,405 medium and small scale industries generating 36,871 jobs with an
investment of 40.486 cr.18
17
http://www.mlm4india.com/mlm-software-aurangabad-maharashtra.html (visited on 2-5-2015) 18
http://aurangabad.nic.in/htmldocs/District_Vision2020/Chapter%2012.%20Industry.pdf (visited on
2-5-2015)
Industrial Disputes and The Alternate Dispute Resolution System Under The Industrial Disputes Act, 1947: A Critical Study
14
So it is justified if it is representing the entire nation as far as this research
work is concerned. Secondly as the researcher is resident of Aurangabad and
presently working in the Aurangabad, so from that point of view it was convenient for
her to collect the data from Aurangabad city.
One of the major limitations of the present research study is that in the case of
employers, quantity of the sample is comparatively less as compared to actual
population of the selected universe. The reason for the same is that employers were
quite reluctant to fill the questionnaire. Some employers give the reason of
„confidentiality‟, some said that in our industry there is no dispute and everything is
okay and some employers tactfully avoided filling the questionnaire.
Apart from field visits, the questionnaire was sent by Email to approximate
100 employers. However, very few replied to the same.
In the case of data from the conciliation officers also Labour Commissioner of
Marathwada Region and labour officers from Beed, Usmanabad, Nanded and Latur
could not able to find time due to their heavy workload to respond the questionnaire.
So it could be possible for the researcher to collect data from 2 Assistant Labour
Commissioners and 8 Labour officers from Aurangabad, Jalna, Parbhani and Hingoli.
1.13 Review of Literature:
First, to put the study in its proper context, majority of relevant written material on the
topic like books, journal articles, Government reports have been referred.
International Instruments like UDHR and various conventions and
recommendations of the International Labour Organization have been referred.
Commentary written by N.Vaidyanathan19
, Dr.N.Maheshwara Swamy20
, N. Jintendra
Kumar & Ajay Bhola (2008), Prof. Ahmeduallah Khan21
, which deals with structure
and gist of various ILO Conventions and Recommendations passed by ILO and
ratified by India is discussed in these books very clearly.
Statues of industrially developed countries like UK, USA, Canada, Russia,
France, China and Australia which gives the sketch of industrial relations machinery
for the settlement of industrial disputes in these respective countries have been
19
N. Vaidyanathan, I.L.O. Conventions and India, 1971. 20
Dr. N. Maharashwara Swamy, Impact of I.L.O. Standards on Indian Labour Laws, 2007. 21
Prof. Ahmedullah Khan, Commentry on the International Labour Organisation and the Indian
Response, Asia Law House Hyderabad, 2005.
Industrial Disputes and The Alternate Dispute Resolution System Under The Industrial Disputes Act, 1947: A Critical Study
15
referred. For this purpose, relevant part of writings of internationally renowned
researchers, formulators, consultants and authors in the field of Industrial Law viz.
Samules22
discussed the machinery for the settlement of industrial disputes in U.K.,
Allan Flanders23
, B.C. Roberts,24
Victor Feather25
, Clegg, Mary Sur26
, discussed the
comparative study of development of collective bargaining in India and various
countries like U.K., USA., Canada, France. John C. Wood (1972), A. Sivananthiran27
,
Zhanna Anatolevna Gorbacheva (2011) , Michel Despax Jacques Rajot28
, Michael
Farrel29
, are studied in detail.
In Indian context, Indian Constitution has provided with number of
fundamental rights to the citizens of India. Particularly it has made speedy justice as
fundamental right under Article 21 of the Constitution of India. Article 39-A ordains
the state to secure a legal system which promote justice on the basis of equal
opportunity. Relevant topics from the writings of M.P.Jain30
, Dr.J.N.Pandey31
, and
H.M. Sheervai32
have been studied. Samant S.R33
, Chandra Mahesh34
, E.M.Rao35
,
dealt with the concept of industrial Jurisprudence, industrial Law, its sources,
principles of Industrial Law and etc. As per Samant S.R. knowledge of the historical
development of the industrial law will assist the negotiation and conduct of industrial
disputes. E.M. Rao in his book tried to cover as exhaustively as possible the
legislative and judicial trends in respect of Labour laws falling four major categories
namely, welfare and working conditions, wages, industrial relation and social
security.
22
Samules, Industrial Law, 1949. 23
Allan Flanders, Trade Unions, 1962. 24
B.C. Roberts, Industrial Relations Contempory Problems, 1962. 25
Victor Feather, The Essence of Trade Unionism, 1963. 26
Mary Sur, Collective Bargaining, 1965. 27
A. Sivananthiran , prevention and settlement of Labour Dispute in South Asia,1998. 28
Michel Despax Jacques Rajot , Labour Law in France, 2011. 29
Michael Farrel, Collective Bargaining in Canada, 2012. 30
Jain M.P., Indian Constitutional Law, 2011. 31
Dr.J.N.Pandey, Constitutional Law of India, 2007. 32
Sheervai H.M., Constitutional Law of India, 2006. 33
Samant S.R., Industrial Jurisprudence, 1961. 34
Chandra Mahesh , Industria;l Jurisprudence, 1976. 35
E.M.Rao, Industrial Jurisprudence, 2004.
Industrial Disputes and The Alternate Dispute Resolution System Under The Industrial Disputes Act, 1947: A Critical Study
16
There is no dearth of literature on the methods of settlement of Industrial
Disputes. There are number of books which have focused on methods of settlement of
Industrial Disputes like:
Punekar S.D.36
dealt with the methods of industrial peace. As per the author, internal
machinery which aims at prevention of industrial disputes is any time preferable to
external machinery to be used for the settlement of industrial disputes.
Giri V.V.37
tried to include most of the labour problems in one integrated publication.
One important problem is of maintaining good industrial relations and settlement of
the industrial dispute by the machinery provided under the Industrial Disputes Act,
1947. As per him; as long as compulsory adjudication exists as machinery for the
settlement of disputes, the voluntary system can hardly succeed.
Harry H.Platt38
while speaking on current Criticisms of labour arbitration
opined that labour arbitration is a tool whereby management and unions can increase
their vigour, their creativeness and their voluntary collaboration. Similarly Shantilal
Shah39
, while writing on settlement of industrial disputes mentioned that the only
remedy seem to be to appoint as arbitrators not only judicial persons but persons who
have experience of industry, management and labour.
Mehotra S.N.40
in chapter 29 of his book dealt with causes of industrial
disputes and critical estimate of various dispute settlement machineries under the
Industrial Disputes Act, 1947. He expressed the need to restrict the cases of industrial
disputes to be referred to adjudication is to be checked effectively. Rustumji R.F41
,
discussed in depth about the various authorities under the industrial Disputes Act,
1947 for the settlement of industrial disputes.
Arya V.P.42
has discussed the provisions of the Industrial Disputes Act, 1947
relating to the machinery and methods of investigation and settlement of industrial
disputes.
In the OECD43
Industrial Relations Programme44
, it was recommended that
“greatest single contribution to avoiding dispute within the enterprise is by good
36
Punekar S.D., Industrial peace in India, 1952. 37
Giri V.V., Labour Problems in Indian Industry, 1957. 38
Harry H.Platt, Arbitration and the Law ed. By Jean T. Mckelvey, 1959. 39
Shantilal Shah, Current problems of labour in India ed.by A.M.Loren. 40
Mehotra S.N., Labour Problems in India, 1964. 41
Rustumji R.F., , The Law of Industrial, 1964. 42
Arya V.P., A Guide to the Settlement of Industrial Disputes, 1965.
Industrial Disputes and The Alternate Dispute Resolution System Under The Industrial Disputes Act, 1947: A Critical Study
17
managerial industrial relations practices. It also recommended that to reduce the
incidence of industrial disputes, effective negotiating procedures are necessary.
John Zechariah45
, Rao S.B.(1984) opines that collective bargaining helps in
establishing the harmonious relations between capital and labour and considered to be
a step towards industrial democracy. Similarly as per Bulchandani46
, collective
bargaining as a means of settling the industrial disputes is by far the best and peaceful
method. It can avert the industrial disputes successfully.
Debi S. Saini47
concludes that the crux of industrial relations problems in India
is the lack of trust between parties. The study also notes that the working of
conciliation machinery is an important aspect of industrial relations, where State plays
a major role in the processing of industrial disputes at various institutional levels.
K. Madhavan Pillai48
, while evaluating the Arbitration said that in spite of the
powerful advocacy of many national leaders, the voluntary arbitration method has not
attracted more in Indian industries.
R.S. Tiwari49
has done the assessment of the system of industrial relations
machinery under the industrial Disputes Act, 1947. P.R.Sinha, Indubala Sinha and
Seeme Priyadarshani50
, expressed the need to force workers and employers to enter in
to formal collective bargaining through their representatives.
Malhotra O.P.51
has done a detail discussion on the Arbitration and
Conciliation Act, 1996. The same author has written an excellent commentary on the
Industrial Disputes Act, 1947 which is in three Volumes and dealt with the methods
of settlement of industrial disputes and other legislative provisions contained in the
Industrial Disputes Act, 1947.
43
Organisation for Economic Co-operation and Development. 44
Labour Disputes: A Perspective. 1979. 45
John Zechariah, Administration of Industrial Disputes, 1984. 46
Bulchandani K.R., Industrial Law, 1981. 47
Debi S. Saini, „Failure of Conciliation: Perceptions and Realities‟, Indian Journal of Industrial
Relations, Vol.28 (2), 1992. 48
K. Madhavan Pillai, Labour and Industrial Law, 1998. 49
R.S. Tiwari, New Challenges on Industrial Relations, 1999. 50
P.R.Sinha, Indubala Sinha and Seeme Priyadarshani, Industrial Relations, Trade Unions and Labour
Legislation, 2004. 51
Malhotra O.P., The Law and Practice of Arbitration and Conciliation, 2002.
Industrial Disputes and The Alternate Dispute Resolution System Under The Industrial Disputes Act, 1947: A Critical Study
18
Aparna Raj52
, observes that the establishment of a sound or harmonious
industrial relations system is a central theme for Governments, employers, workers
and their representatives, in their endeavour to achieve economic and social
development.
Singh B.D53
has stressed the need for Lok Adalats in industrial disputes, in
spite of conciliation being available under the Industrial disputes Act, 1947.
The Hon'ble Ex. President of India Dr. APJ Abdul Kalam has also been
supportive of amicable settlement of disputes and has advocated the need to
encourage mediation as an alternative dispute resolution (ADR) mechanism in the
following words in The 12th Justice Sunanda Bhandare Memorial Lecture –
Judiciary and its multidimensions (2006). “Mediation and conciliation is definitely a
faster method of dispute resolution compared to the conventional Court processes.
Only thing is that we have to have trained mediators and conciliators, who can see the
problem objectively without bias and facilitate affected parties to come to an agreed
solution. In my opinion, this system of dispute resolution is definitely a cost effective
system for the needy... Mediators must possess the qualities of being a role model in
the society, impeccable integrity and ability to persuade and create conviction among
the parties.”
Zafar Hussain and Afzal Wani54
in their research article “Application and
Enforcement of International Labour Standards In India: a Critique”, dealt with the
deficiencies in the Indian industrial relations framework with suggestions to fill the
gaps in the area of collective bargaining.
Jerome Joseph55
, in his research article explained the Ecosystem of Industrial
Relations. He expressed the need to introduce some changes in disputes resolution
system.
The first change proposed is to replace the Works Committee with an
Organizational Ombud person or Ombuds Committee which is representative,
impartial, and independent to deal with employee grievances and disputes internally,
52
Aparna Raj, Industrial Relations in India- Issues, Institutions and Outlook, 2003. 53
Singh B.D. , Industrial Relations Emerging paradigms, 2005. 54
Zafar Hussain and Afzal Wani, Application and Enforcement of International Labour Standards In
India: a Critique, ( Journal of Indian Law Institute, Vol.53, 2011). 55
Jerome Joseph ,Quo Vadis, Industrial Relations Disputes Resolution...? (The Indian Journal of
Industrial Relations, Vol. 50, No. 1, July 2014).
Industrial Disputes and The Alternate Dispute Resolution System Under The Industrial Disputes Act, 1947: A Critical Study
19
amicably and honorably. The second change can be by making a strategic shift from
government run disputes resolution machinery to a professionally run disputes
resolution machinery within the framework of “minimum government, maximum
governance”. This will call for deregulation of the disputes resolution processes
especially with reference to the conciliation machinery. This will mean conciliation
services to deal with industrial relations disputes will be offered both by government
and professional service organizations, will have the same powers as they have now
and will be fee based.
M.J.Arputharaj and R. Gayatri56
, in their research article titled “A critical
analysis on efficacy of mechanism to industrial disputes resolution in India,”
highlighted the legal and practical aspects of industrial dispute resolution in India and
suggested that the Presence of a powerful collective bargaining machinery and
proactive communication between the management and the unions not only
minimizes the grievances but also promotes healthy industrial relations.
Interpretations made by judiciary and judicial findings on important issues of
ADR under the Industrial Disputes Act, 1947 are culled out from cases decided by the
Supreme Court and various High Courts in the territory of India. Hon‟ble Supreme
Court while deciding the case of Hindustan Hosiery Industries vs F. H. Lala And
Another 57
held that the Industrial Disputes Act is intended to be a self-contained one
and. it seeks to achieve special Justice on the basis of collective bargaining
conciliation, and arbitration. Again Hon‟ble Supreme Court of India held that the
policy of law emerging from Industrial Disputes Act and its sister enactments is to
provide an alternative dispute resolution mechanism to the workmen, a mechanism
which is speedy, inexpensive, informal and unencumbered by the plethora of
procedural laws and appeals upon appeals and revisions applicable to Civil Courts.58
Further The Supreme Court of India in Virudhachalam vs. Management of Lotus
Mills,59
after taking note of various provisions of the Industrial Disputes Act, the
Court while describing the principle of collective bargaining held that the Act is based
56
M.J.Arputharaj and R. Gayatri, A critical analysis on efficacy of mechanism to industrial disputes
resolution in India, ( International Journal of Current research and Academic Review, Vol 2, No 8,
August, 2014). 57
1974 AIR 526. 58
Premier Automobiles Ltd vs Kamlekar Shantaram Wadke, 1975 AIR 2238, 1976 SCR (1) 427. 59
(1998) 1 SCC 650.
Industrial Disputes and The Alternate Dispute Resolution System Under The Industrial Disputes Act, 1947: A Critical Study
20
on the principle of collective bargaining for resolving industrial disputes and for
maintaining industrial peace.
Universities are the pioneers in various kinds of research. Most of the studies
available on the subject are theses. The studies and research works carried out on the
topic of Industrial dispute and dispute resolution through negotiation, conciliation and
arbitration is considered by the researcher at the relevant point.
In the early 1950s an attempt to study the functioning of the conciliation
machinery in India was made by the Indian Law Institute, New Delhi. It deals with
the administrative procedure involved in the conciliation proceedings.
Basanagouda Patil,h S. (1973), in his research work titled “ Conciliation a
Study into its functioning and effectiveness :Special reference to Karnataka”
attempted to study the functioning of conciliation machinery maintained by the
Government of Karnataka and its effectiveness.
K. Malaisamy60
conducted a study on “Conciliation in Settlement of Industrial
Disputes”. He reveals that the efficiency of the conciliation machinery is found to be
an average. The factors, viz. workload, nature of job, attitude of the employer,
conciliation as a complex and thankless job, skill and professional tactics, syndrome
of non-acceptance, non-acceptance of suggestions, non-co-operation of the disputants,
constraints in the time duration and restraints in administrative processes are the
important hindrances in dispute settlement. Inter union rivalries and negative
perception of the employer towards conciliation is also reflected.
Venugopal, E. Has completed his research on “Role of Managament and
Trade Unions in the Settlement of Industrial Disputes: A case study with reference to
Singareni Collieries Company Ltd.Kothagudem, Andra Pradesh.” In his research
work, the researcher has investigated the problem of industrial relations in the
Singareni Collieries Company Ltd., one of the major state enterprises of Andhra
Pradesh. The study also focused on labour management relations in India and
problems involved in the industrial adjudication.
Mankar M.V.61
, in his research work restricted the number of industrial
disputes in Akola, their reasons and method followed to settle those disputes.
60
K. Malaisamy , Conciliation in Settlement of Industrial Disputes: An Empirical Study in Tamil
Nadu‟,1999. 61
Mankar M.V., A Study of industrial Disputes in Akola District, 2012.
Industrial Disputes and The Alternate Dispute Resolution System Under The Industrial Disputes Act, 1947: A Critical Study
21
Singla, Naresh Lata62
dealt with the concept of ADR, its historical growth,
various forms. In the chapter V discussion about Conciliation under the Industrial
Disputes Act is done.
Venugopal, KV63
, has examined the nature and causes of industrial disputes,
the role and involvement of employers, trade union leaders in industrial disputes and
the performance of the settlement machinery. Kulsrestha Saurabh (2014) in his
research work “Alternative Dispute Resolution Mechanism: a Case Study of Delhi
dealt with the conciliation.mediation,arbitration as methods of dispute settlement.
Rahul Suresh Sapkal in his research work, “To Conciliate or Not to Conciliate:
Empirical evidence from Labour Disputes in India” dealt with the Conciliation as a
method of settlement of industrial dispute.
Babu T.64
has pointed out that, Gandhiji belived that if conflict between labour
and capital to be avoided “Labour should have the same status and dignity as capital.
Singh Manjit65
dealt with mediation and conciliation machinery under various
Laws in India. He dealt with various principles evolved by the courts to make the
ADR system effective. He focused on the role of conciliation in ADR system.
Singh Pradeep66
has focused on non- adjudicatory modes of ADR. It is the
study of justice administration in India pointing out the requirement and position of
ADR in India as a strengthening mechanism.
Study carried out by Jain Prakesh R. (Mediation as an alternative dispute
resolution system an analytical study) elaborately discussed the process of mediation
and role of mediation in the dispute resolution. It also focused on the practical
problems that arise while conducting the mediation process.
Apart from the above mentioned literature, Report of National Commission of
Labour, and Royal Commission on Labour wherein these commissions dealt with and
commented upon the working of these machineries have been emphasized upon.
UGC info net journals were also assessed through internet to tress the latest
change in cyber world about Industrial Law.
62
Singla, Naresh Lata, Speedy Justice and Alternate Disputes Redressal, 2012 63
Venugopal, KV, Industrial Relations in the Public and Private Enterprises in Kerala, 2013. 64
Babu T, A Study of Conflict Resolution in Industrial Disputes a Gandhian Approach, 2015. 65
Singh Manjit, Mediation and Conciliation Systems in India: A Study with special reference to state
of Haryana. 66
Singh Pradeep, Alternate Dispute Resolution System in India: Problems and Prospects.
Industrial Disputes and The Alternate Dispute Resolution System Under The Industrial Disputes Act, 1947: A Critical Study
22
Some of the additional resources assessed through internet are Annual
Review, J-store, Oxford University Press and etc.
In this academic Endeavour the researcher has referred various dictionaries
and Encyclopedias such as Black‟s Law Dictionary, New Standard Encyclopedia,
Encyclopedia Britannica, Encyclopedia of Social Sciences and 21st Century
Reference Dictionary.
1.14 Research Design:
The study is made to ascertain the working of these alternative dispute
resolution systems under the Industrial Disputes Act. It examines the working of these
Alternative Dispute Resolution systems.
India being the member of International Labour Organization and
International Labour Organization has enacted various conventions and
recommendations on the topic. These conventions and recommendations relating to
ADR are therefore studied.
The Judiciary in India has in its various decisions highlighted the need of
ADR in the settlement of Industrial Disputes. This study also identifies the decisions
of the Supreme Court and High Courts which strengthens the need of ADR under the
Industrial Disputes Act, 1947.
A careful analysis of the working of ADR under the Industrial Disputes Act,
1947 and field work questionnaires in coming up with suggestions for improvement in
the working of ADR systems under the Industrial Disputes Act.
Hence the researcher has designed the research to be descriptive with respect
to the machineries provided under the Industrial Disputes Act and analytical with
respect to the present working of ADR and hence the following chapters are framed.-
First chapter deals with the Introduction. In this chapter introduction of the
research topic and Research Methodology is discussed.
Second chapter deals with the conceptual framework. In this chapter,
concepts of industry, industrial dispute, workmen and appropriate Government are
discussed at the same time a bird‟s eye view on the historical development of ADR in
India is done.
Third Chapter deals with the International Scenario of the subject. In this
chapter various conventions and recommendations passed by International Labour
Industrial Disputes and The Alternate Dispute Resolution System Under The Industrial Disputes Act, 1947: A Critical Study
23
Organization for promoting alternative methods of dispute resolution, in case of
Industrial Dispute are discussed. Provisions of Universal Declaration of Human
Rights relating to labour are also discussed. Machinery available in other countries for
the settlement of industrial disputes and its comparison with India is also discussed.
Fourth chapter deals with the Constitutional perspectives. In this chapter,
Constitutional provisions which give a strong base to the alternative dispute resolution
system are discussed.
Fifth Chapter deals with the various alternate dispute resolution machineries
provided under the Industrial Disputes Act, 1947 for the settlement of Industrial
Disputes, and its critical evaluation. Similarly a comparison between working of
alternate dispute resolution system under Industrial Disputes Act, 1947 and
machineries provided under the Arbitration and Conciliation Act, 1996 is also dealt
with under this chapter.
Sixth Chapter deals with judicial contribution in strengthening the ADR
under Industrial Disputes Act, 1947. In this chapter judgments of the Court which
emphasized the use of alternative dispute resolution methods in the settlement of
industrial disputes are under the scope of discussion.
Seventh Chapter deals with Data Analysis.
Eighth Chapter deals with the conclusion and suggestion.