28 Industrial Disputes

Rajeev Jain

Learning Outcomes:

The primary purpose of the Industrial Disputes Act, 1947 is to protect organisations from all forms of disputes irrespective of their sources, magnitude & implications. Although the employers & the employees have irreconcilable goals, needs & interests, the Industrial Disputes Act attempts to provide a mechanism for avoiding disputes & preserving industrial peace.

• The primary purpose of this act is to preserve the peace & harmony of an industrial enterprise.
• This act aims at ensuring better utilisation of the available human resource by avoiding dispute related manpower loss in the organisation.
• It looks to preempt the employees’ grievance & industrial tensions from developing into full – fledged disturbances & confrontations between employers & employees in the forms of strikes or lock outs.
• It strives to provide a mechanism for the resolution of industrial disputes & assure industrial justice, which is an essential element of enduring industrial peace.
• It seeks to indicate the contingencies when strike or lock outs can be imposed lawfully.
• It specifies the grounds for declaring a strike or a lock out as illegal. It thus attempts to avoid illegal strikes & lock outs & the consequent description to work & also production & income losses.
• It endeavours to offer financial relief to the employees in the event of a lay-off or retrenchment.
• It aims at encouraging & streamlining collective bargaining as a dispute resolution forum.

28.1. Introduction:-

An Industrial dispute is basically a difference of opinion between the employer & employees over one or more issues. Disputes are core to the industrial relations exercise of an organisation. The primary aim of industrial relation exercises is dispute avoidance. The various aspects of industrial relations are designed with a view of restraining industrial dispute & the resultant labour unrest. Industrial disputes typically manifest in the debilitating form of strikes, lock outs, picketing, go slows & gheraos. Hence, they require the development of appropriate strategies for prompt identification of employees grievances & their resolution. In fact, a timely resolution of grievances can prevent them from becoming industrial disputes.

www.slideshare.net/Manisha_D_Vaghela13/industrial-disputes-act-1947-14623170

Section 2k of the Industrial Disputes Act, 1947. Defines an industrial disputes as “any dispute or difference between employers & employers or between employers & workmen, or between workmen & workmen, which is connected with the employment or non-employment or the terms of employment or with the conditions of labour of any person”.

A dispute can become industrial dispute when the following conditions are satisfied:

(i)  There must be actually a dispute or difference between (a) employers & employees, or (b) employers & employers, (c) workers or workers.

(ii)  There dispute must be connected with the employment / non-employment or terms of employment or with the condition of labour of any person.

(iii)  There must exist a relationship of employer & workmen as a result of the contract of employment & the workmen must be actually employed.

An industrial dispute is not a personal dispute of one person. It generally affects a large number of workers have community interest. The parties to the disputes have direct & substantive interest in the dispute. The dispute is taken up in a concerted manner by workers/employer.

28.2. Characteristics of Industrial Disputes:

Based on the definition of the term Industrial dispute given in the Industrial Dispute Act, its characteristics have been identified as follows:

1.  An industrial dispute is a collective dispute between employer & employees. The disputes between an individual employee & employer are not normally viewed as an industrial dispute except for dismissal, discharge, retrenchment or termination of individual employee. Typically, the dispute should have been raised by a substantial number of employees.

2.   The relationship existing between the parties to the industrial dispute must be that of the employer & employee or co-workers, that is, between workmen & workmen.

3.  The dispute may arise out of disagreements between employers & employees over the terms of employment like wages & salary, incentives & benefits, workloads & so on.

4.    It could also be connected to the conditions of labour like working conditions, occupational health & safety & so on.

5.    The industrial dispute may even relate to non-employment cause of workmen.

28.3. Causes of Industrial Disputes:

Organizations can effectively avoid an industrial dispute only when it is able to locate the causes of the industrial relations, tensions & disputes accurately. Generally, these causes are classified as Economic & Non-Economic.

28.3.1. Demand for Pay & Benefits hike:

Employee claim for increased pay & benefits & the employer’s refusal to concede their demand often gives to an industrial dispute. Employers & employees often make mutually irriconciable claim over the profits & wealth of the organisations. On the other hand, the rising cost of living, improved social status &   lifestyle changes often force employees to seek increase in their monetary compensation at periodic intervals. On the other hand, survival, prestige & growth needs drive the employers to retain the major share of the profit.

28.3.2. Demand for Hygienic & Safer Working Conditions:

The employee’s insistence on good & safer working conditions may also form a ground for an industrial dispute. Specifically, the employee’s demand for a proper physical environment, adherence to statutory safety measures & workload-related issues can cause industrial dispute in an organisation.

28.3.3. Demand for better Labour welfare & social security measure:

The employee’s insistence on improvement in welfare facilities such as transport, housing, education, recreation, canteen, insurance, e-commuting & flexi-time can also cause industrial disputes. Similarly, the need for better social security’s like retirement benefits, medical facilities & compensation facilities may also act as a ground for industrial disputes.

28.3.4. Demand for Recognition & Appreciation:

Besides the primary needs like wages, incentives, benefits, health & safety, the employees may also demand the fulfillment of social needs like recognition, self-expression, appreciation & scope for personal achievements. When these demands are denied or delayed by the employers, it may provide a ground for industrial dispute.

28.3.5. Demand for justice for an Individual or a group of employees:

Where there is a mass lay off or retrenchment of employees, it may provide reasons for the employees to develop a dispute with the employers. At times, even the disciplinary actions against individuals in the form of dismissal, discharge, demotions & suspensions may form aground for industrial dispute as per Section 2A of the Industrial Dispute Act, 1947.

28.3.6. One upmanship among the Unions:

One-upmanship is the practice of always keeping one step ahead of the rest i.e. friends or competitors. In their quest to prove their credibility & dependability among the employees, the unions may adopt a negative attitude towards the management deliberately. In such a situation, the union may start a dispute with the management even on silly issues just to unite their members & expand their membership base.

28.3.7. External Interference:

The system of allowing external leaders to manage the unions, like in India, also plays a significant role in an industrial dispute. In such a case, union activities are influenced more by political considerations than by organisational problems. The union’s stand on organisational issues are dictated mostly by the ideology & leadership of the political with which the union is affiliated.

28.3.8. Numerous Labour Legislation:

The government has enacted several legislations to protect the rights & interests of the workers in industrial establishment. It becomes a legal necessity for the organisation to provide these facilities to their employees. Understandably, any violation of these provisions or denial of statutory facilities to the employees becomes aground for dispute between employers & employees.

28.4. Type of Industrial Disputes:-

28.4.1. Interest Disputes:

This refers to the disputes relating to the economic interest of the employees. The interest disputes often arise at the negotiation or bargaining stage of a collective bargaining process. They may relate to wages, incentives & other benefits of the employees. In short, an interest disputes relates to the conditions of employment of workers.

28.4.2. Rights Disputes:

These involve disputes over the understanding, interpretation & application of the rules & regulations which protect the rights of the employees. They may relate to the interpretation & implementation of statutory rules, company rules, collective bargaining agreements & employment contracts. The alleged violation of these rules provides a ground for rights disputes.

28.5. Outcomes of Disputes:

28.5.1. Strikes:

A strike is an important tool in the hands of the trade unions to exert pressure on the employers to achieve their demands. According to the Industrial Disputes Act, 1947, a strike means “a cessation of work by a body of persons employed in any industry acting in combination or a concerted refusal or a refusal under a common understanding of any number of persons who are or have been so employed to continue to work or to accept employment.

Type of strikes:

28.5.1.1. General strike:-

It normally refer to a large scale strike organised by the employees belonging to an industry, aregion or an
entire country. Normally, the employees of the region, state or nation are united by common goals & interest and as such struggle together.

28.5.1.2. Pen-down, tools-down & sit in strike:-

In pen-down, tools-down and sit in strikes, employees reports for duty but do not work. In these forms of protest, the employees just refuse to leave their place after entering the work premises & remain idle.

28.5.1.3. Wild-cat strike:-

When employees resort to an unauthorised strike in violation of the labour contract or agreements, it is called a wild cat strike. Unions may resort to a wild cat strike to pressure their employers during negotiation.

28.5.1.4. Go-slow (slow down) & work to rule strikes:-

This is a form of strike in which employees work but not up to their usual levels or capacity. They reduce their output deliberately to show their protest to the employers.

28.5.1.5. Sick leave & Mass leave strikes:

Employees participating in these strikes apply for sick leave or casual leave in mass, mentioning sickness as the reason. The purpose of such mass casual or sick leave is to bring the work to a halt in order to achieve their demands.

28.5.1.6. Hunger strike:-

In this, employees undertake fasting by abstaining from both food & work as a means of protest. Since there is a cessation of work due to employee’s participation in the fasting, it is viewed as a strike.

28.5.1.7. Sympathy strike:-

The purpose of a sympathy & solidarity with another group of striking employees belonging to a different category of employment in the same organisation.

28.5.2. Picketing:-

It is a form of protest by employees in which the primary intention is to prevent or dissuade the non-striking employees from attending to their work during the strike period. In this method, the striking employees assemble in front of the factory gates & attempt to persuade the non- strikers to decide against going inside the premises & thereby participate in the strike.

28.5.3. Gheraos:

It is a form of protest in which employees encircle their employers or top managers at the workplace with a view to restricting their movements. The Purpose of a blockade or confinement is to force the employer or managers to concede the demands of the workers. The wrongful confinement of any person is not legally tenable & therefore gheraos is an illegal act.

28.5.4. Lock outs:-

A lock out is the employer’s response to the employees continued protest in the form of strike. According to Industrial Disputes Act, 1947, a lock-out means “the temporary closing of place of employment or the suspension of work, or the refusal by an employer to continue to employ any number of persons employed by him”.

28.6. Prevention of Industrial Disputes:

The following measures can be taken to avoid disputes in industries:-

28.6.1. Model Standing Order:

The purpose of these orders is to prescribe guidelines for regulating between employers & employees under the Industrial Employment (standing Orders) Act, 1946.

Standing order defines regulates terms & conditions of employment & bring about uniformity in them. These also specify the duties & responsibilities of the both employees & regulate standards of their conduct.

28.6.2. Code of Industrial Discipline:

It consist 3 set of principles namely (a) obligations to be observed by management, (b) obligations to be observed by trade unions, and (c) principles binding on both the parties.

28.6.3. Grievance Procedure:-

According to Micheal Armstrong, a well developed & properly structured grievance redressal procedure provides: (a) a channel of avenue by which any aggrieved employee may present his grievance; (b) a procedure which ensures that there will be a systematic handling of every grievance; (c) a method by which an aggrieved employee can relieve his feelings of dissatisfaction with his job, working conditions, or with the management; and (d) a means of ensuring that there is some measures of promptness in the handling of the grievance.

28.6.4. Collective Bargaining:

It is a process in which the representatives of the employer & of the employees meet & attempt to negotiate a contract governing the employer-employee union relationship. According to Jucious, “Collective bargaining refers to a process by which employers on the one-hand & representatives of employees on the other, attempt to arrive at agreements covering the conditions under which employee will contribute & be compensated for their services.

28.6.5. Work Committees:

It deals with matters of day-to-day functioning at the shop floor level. According to the Indian labour Conference (1959) works committees are concerned with:-

(a)  Conditions of work such as ventilation, lighting, temperature & sanitation including latrines & urinals.

(b)  Amenities such as drinking water, canteens, dining rooms, medical & health services.

(c)  Safety & accident prevention, occupational diseases & protection equipment.

(d)  Adjustment of festivals & national holidays.

(e)  Administration of welfare & fine funds.

(f)  Educational & recreational activities.

(g)  Promotion of thrift & savings

(h) Implementation & review of decisions arrived in the meetings of work committee.

28.6.6. Joint Management Councils:

These councils were set up in 1958 consequent upon the acceptance of socialistic pattern of society. These consist of equal representatives of management & workers, not exceeding twelve, at the plant level in selected industrial units, the units should employ at least five hundred workers, should have a well established & strong central organisation of employee’s unions & should have a record a good industrial relations.

28.6.7. Suggestion Schemes:

Under this system, workers are invited & encouraged to offer suggestion for improving the working of the enterprise. A suggestion box is in installed. Any worker can write his suggestions & put it into the box. Periodically all the suggestions are scrutinized by the suggestions committee. Good suggestions are accepted for implementation & suitable rewards are given to the concerned workers. Suggestion schemes encourage worker’s interest in the functioning of the enterprise.

28.6.8. Joint Consultative Machinery:-

Service conditions in the government sector are dealt with at National Council (for Central Government employees), Departmental Councils & Regional or office Councils.

28.6.9. Tripartie Bodies:

Several tripartie bodies have been constituted at Central & State levels. The Indian labour Conference, Standing labour Committees, Wage Boards & Industrial Committees operate at the centre. At the state levels, State labour Advisory Boards have been set up. All these bodies play an important role in reaching at agreements on various labour matters.

28.6.10. Labour Welfare officer:

The factories Act, 1948 provides for the appointment of a Labour Welfare Officer in every factory employing so or more workers. The officer looks after all facilities in the factory provided for the health, safety & welfare of workers.

28.7. Settlement of Industrial Disputes:

The following approaches & measures are used for the settlement of disputes in industry.

28.7.1. Conciliation: –

It is the process by which representatives of workers & employers are brought together before a third party with a view to persuade them to arrive at an agreement through mutual discussion between them. It involves friendly intervention of a neutral person or groups to help the parties to settle their disputes peacefully.

According to the ILO, conciliation is “the practice by which the services of a neutral third party are used in a dispute as a means of helping the parties to reduce the extent of their difference & to arrive at an amicable settlement or agreed solution. It is a process of rational & orderly discussion of difference between the parties to a dispute under the guidance of a conciliator.

28.7.2. Arbitration:-

It is a process in which a neutral third party listens to the disputing parties, gathers information & then takes a decision which is binding on both the parties in comparison with conciliation which involves compromise arbitration is a quasi-judicial process. The conciliator simply assists the parties to come to a settlement where as an arbitrator listens both the parties & then give his judgement.

Arbitration has many advantages: (a) it is established by the parties themselves & therefore, They have a greater faith in it; (b) the process is relatively expeditious & result in prompt settlement of differences; (c) it is informal & flexible in nature; (d) it is not very expensive because parties can directly present their case without a lawyer; and (e) it is based on mutual consent of the parties & therefore, helps in building healthy industrial relations.

Arbitration suffers from several disadvantages: (a) judgement can become arbitrary when the arbitrator is incompetent or biased; (b) delay often occurs in the settlement of disputes & (c) too much arbitration is not a sign of healthy industrial relations.

28.7.3. Adjudication:-

It is the ultimate legal remedy for the settlement of industrial disputes. Adjudication means intervention of legal authority appointed by the government to make a settlement which is binding on the parties.

28.7.4. Courts of Enquiry:-

The appropriate government may, by notification in the official gazette, constitute a court of inquiry for inquiring into any matter appearing to be connected with or relevant to an industrial dispute. A court of inquiry may consist of one independent person or of such number of independent persons as the appropriate government may think fit.

    The Industrial dispute Act provides for a three tier system of adjudication:

28.7.4.1. Labour Court: The appropriate government may by notification in the official Gazette, constitute one or more labour Court for adjudication of industrial disputes relating to the following matters:

1. The propriety or legality of an order passed by an employer under the standing orders.

2. The application & interpretation of standing orders

3. Discharge or dismissal of workmen including reinstatement of, grant of relief to, workmen wrongfully

dismissed.

4. Withdrawal of any customary concession or privilege

5. Illegality or otherwise of a strike or lockout &

6. All matters other than those specified in the Third schedule.

www.slideshare.net/Dolly03/conciliation

28.7.4.2. Industrial Tribunal: The appropriate government may, by notification in the official gazette constitute one or more Industrial Tribunals for the adjudication of industrial disputes relating to the following matters:

1.  Wages, including the period & mode of payment

2.  Compensatory & other allowances

3.  Hours of work & rest intervals

4.  Leave with wages & holidays

5.  Bonus, profit sharing, provident fund & gratuity.

6.  Shift working otherwise than in accordance with standing orders.

7.  Classification by grades;

8.  Rules of discipline

9.  Rationalisation

10.   Retrenchment of workmen & closure of establishment

11.   Any other matter that may be prescribed

28.7.4.3. National Tribunal: The Central government may, by notification in the official gazette, constitute one or more National Industrial Tribunals for the adjudication of industrial disputes:

(a) involving questions of natural importance or; (b) which are of such a nature that industries in more than one state are likely to be interested in or affected by, such disputes.

Summary:-

Industrial disputes take forms of strike, gheraos, lockouts etc. Wages and allowances, bonus, personnel and retrenchment, leave and hours of work, indiscipline and violence are the main causes giving rise to industrial disputes. Conciliation (Conciliation officer, Board of Conciliation), arbitration (Voluntary and Compulsory) and adjudication (Labour Court, Industrial Tribunal and National Tribunal) are the methods used to settle industrial disputes.