Industrial Disputes

Industrial disputes are conflicts, disorder or unrest arising between workers and employers on any
ground. Such disputes finally result in strikes, lockouts and mass refusal of employees to work in the
organization until the dispute is resolved.
Definitions of Industrial Disputes
As per Patterson:
Industrial strife constituent militant and organized protest against existing industrial conditions, they are
symptoms of industrial unrest in the same way that boils are symptoms of disorder of body.

Causes of industrial disputes

The causes of industrial disputes can be broadly classified into two categories: economic and
non-economic causes. The economic causes will include issues relating to compensation like
wages, bonus, allowances, and conditions for work, working hours, leave and holidays
without pay, unjust layoffs and retrenchments.
The non economic factors will include victimization of workers, ill treatment by staff members,
sympathetic strikes, political factors, indiscipline etc.
Wages and allowances: Since the cost of living index is increasing, workers generally
bargain for higher wages to meet the rising cost of living index and to increase their standards
of living. In 2002, 21.4% of disputes were caused by demand of higher wages and allowances.
This percentage was 20.4% during 2003 and during 2004 increased up to 26.2%. In 2005,
wages and allowances accounted for 21.8% of disputes.
Personnel and retrenchment: The personnel and retrenchment have also been an
important factor which accounted for disputes. During the year 2002, disputes caused by
personnel were 14.1% while those caused by retrenchment and layoffs were 2.2% and 0.4%
respectively. In 2003, a similar trend could be seen, wherein 11.2% of the disputes were
caused by personnel, while 2.4% and 0.6% of disputes were caused by retrenchment and
layoffs. In year 2005, only 9.6% of the disputes were caused by personnel, and only 0.4%
were caused by retrenchment.
Indiscipline and violence: From the given table, it is evident that the number of disputes
caused by indiscipline has shown an increasing trend. In 2002, 29.9% of disputes were caused
because of indiscipline, which rose up to 36.9% in 2003. Similarly in 2004 and 2005, 40.4%
and 41.6% of disputes were caused due to indiscipline respectively. During the year 2003,
indiscipline accounted for the highest percentage (36.9%) of the total time-loss of all disputes,
followed by cause-groups wage and allowance and personnel with 20.4% and11.2%
respectively. A similar trend was observed in 2004 where indiscipline accounted for 40.4% of
disputes.

 Bonus: Bonus has always been an important factor in industrial disputes. 6.7% of the
disputes were because of bonus in 2002 and 2003 as compared to 3.5% and 3.6% in 2004 and
2005 respectively.
Leave and working hours:Leaves and working hours have not been so important causes of
industrial disputes. During 2002, 0.5% of the disputes were because of leave and hours of work
while this percentage increased to 1% in 2003. During 2004, only 0.4% of the disputes were
because of leaves and working hours.

Industrial disputes settlement machinery for India

1.Work Committee: There is a Works Committee in factories employing 100 or more workers. [ section 3]. The
committee will consist of equal number of representatives of employer and employees. Representatives of
employees will be selected in consultation with Registered Trade Union. The Works Committee will first try to settle
disputes.

2.Conciliation: Conciliation refers to the process by which representatives of employees and employers
are brought together before a third party with a view to discuss, reconcile their differences and arrive at an
agreement through mutual consent. The third party acts as a facilitator in this process. Conciliation is a
type of state intervention in settling the Industrial Disputes. The Industrial Disputes Act empowers the
Central & State governments to appoint conciliation officers and a Board of Conciliation as and when the
situation demands.

Consolation Officer: If dispute is not solved, it will be referred to Conciliation Officer. He is appointed by

Government. [Section 4]. The duties of a conciliation officer are:

To hold conciliation proceedings with a view to arrive at amicable settlement between the parties
concerned.

To investigate the dispute in order to bring about the settlement between the parties concerned.

To send a report and memorandum of settlement to the appropriate government.

To send a report to the government stating forth the steps taken by him in case no settlement has
been reached at.

Board of consolation. The matter may also be referred to Board of Conciliation. [section 4]. The Board of
Conciliation consists of a chairman who must be an independent person and 3/4 members. Unsolved matters
may be referred to labour tribunal / industrial tribunal / labour court (sec. 12 (5))

2.Adjudication: Adjudication is the ultimate legal remedy for settlement of Industrial Dispute.
Adjudication means intervention of a legal authority appointed by the government to make a settlement
which is binding on both the parties. In other words adjudication means a mandatory settlement of an
Industrial dispute by a labour court or a tribunal. For the purpose of adjudication, the Industrial Disputes
Act provides a 3-tier machinery:
1.
Labour court
2.
Industrial Tribunal
3.
National Tribunal

Labour Court: The appropriate government may, by notification in the official gazette constitute one or
more labour courts for adjudication of Industrial disputes relating to any matters specified in the second
schedule of Industrial Disputes Act. They are:
Dismissal or discharge or grant of relief to workmen wrongfully dismissed.

Illegality or otherwise of a strike or lockout.

Withdrawal of any customary concession or privileges.

Where an Industrial dispute has been referred to a labour court for adjudication, it shall hold its
proceedings expeditiously and shall, within the period specified in the order referring such a dispute,
submit its report to the appropriate government.

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:
Wages

Compensatory and other allowances

Hours of work and rest intervals

Leave with wages and holidays

Bonus, profit-sharing, PF etc.

Rules of discipline

Retrenchment of workmen

Working shifts other than in accordance with standing orders

It is the duty of the Industrial Tribunal to hold its proceedings expeditiously and to submit its report to the
appropriate government within the specified time.
National Tribunal: The central government may, by notification in the official gazette, constitute one or
more National Tribunals for the adjudication of Industrial Disputes in
Matters of National importance
Matters which are of a nature such that industries in more than one state are likely to be interested in, or
are affected by the outcome of the dispute.
It is the duty of the National Tribunal to hold its proceedings expeditiously and to submit its report to the
central government within the stipulated time.
4.Arbitration: A process in which a neutral third party listens to the disputing parties, gathers
information about the dispute, and then takes a decision which is binding on both the parties. The
conciliator simply assists the parties to come to a settlement, whereas the arbitrator listens to
both the parties and then gives his judgment. There are two types of arbitration:
1.
Voluntary Arbitration: In voluntary arbitration the arbitrator is appointed by both the parties
through mutual consent and the arbitrator acts only when the dispute is referred to him.
2.
Compulsory Arbitration: Implies that the parties are required to refer the dispute to the arbitrator
whether they like him or not. Usually, when the parties fail to arrive at a settlement voluntarily, or when
there is some other strong reason, the appropriate government can force the parties to refer the dispute
to an arbitrator.