Prevnton

Prevention and Settlement of Disputes in India
PREVENTION AND
SETTLEMENT OF
DISPUTES IN INDIA
ROLE OF SOCIAL DIALOGUE
Edited by
A. Sivananthiran
C.S. Venkata Ratnam
International Labour Indian Industrial Relations

Organization (ILO) Association
Subregional Office for South Asia (IIRA)
New Delhi New Delhi
Copyright © International Labour Organization 2003
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First published 2003
ISBN 92-211915-7 92-2-111912-2
Rs. 300
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Printed in India
Contents
Foreword vii
Preface ix
List of Contributors xi
1. Effective Labour Court Administration: Trends and Issues 1

— P.D. Shenoy
2. Making Conciliation Effective 23

— C.S. Venkata Ratnam
3. Role of Conciliation Officers in the Resolution of Industrial Disputes 33

— Subesh K. Das
4. Enhancing the Effectiveness of Conciliation Machinery 57

under the Industrial Disputes Act
— J.S. Sodhi
5. Alternate Dispute Settlement Mechanisms in India – 81

A Study of Industrial Adjudication
— Sanjoy Ghose
6. Awards – Issues and Options 113

— Shrikant Shukla
7. Strategy for Effective Disposal of Cases: Role of Conciliation 121

— M. Dias
8. Lok Adalats — A Conceptual Framework : The Indian Experience 135

— V. Nagaraj
9. Constitution of National Mediation Board for Labour Disputes in India 143

— Jose P. Verghese
vi Prevention and Settlement of Disputes in India
10. Strengthening the Labour Inspection System in Kerala 155

— Elias George
11. Training Manual for Conciliators 187

— A. Sivananthiran
Foreword
The process of globalization is in many conditions having far-reaching effects on
labour-management relations and the dispute settlement system. The absence of an
effective dispute settlement machinery can result in widespread industrial conflict and
have negative effects on the collective bargaining process itself and on economic
growth in general. There is a growing realization in many countries that the success of
economic reforms depends among other things on achieving industrial harmony.
In this fast-changing workplace environment, new and innovative tools, techniques and
approaches to negotiation and conflict resolution are now being studied, developed and
applied. There is a growing stress on prevention of disputes with a focus on mutual
gains bargaining and win-win negotiations. In many countries the traditional dispute
settlement approaches are being questioned and greater emphasis is being placed on
labour-management cooperation. A new approach to dispute settlement is also evident
in India where it takes on average more than two years to settle a dispute, in fact, the
growing backlog of unsettled disputes has become a major problem. The promotion of
social dialogue in the dispute settlement process has led to the establishment of lok
adalats or peoples’ courts as one way of dealing with this problem. In the state of Punjab
in India, more than 18,000 cases have been settled through lok adalats.
Effective prevention and settlement of labour disputes remains a cornerstone of

sound labour-management relations, and it is essential that there be an efficient and
accessible machinery for this purpose in the interests of economic growth and social
justice. What is important is to take stock of the new developments in dispute
prevention and settlement and ensure that industrial disputes which are inherent in
all labour relations systems are prevented and settled as promptly and fairly as
possible.
During the years 2002 and 2003, the Sub-regional Office for South Asia in New Delhi, at
the request of the ILO constituents, was active not only in providing technical advice
but also in undertaking training programmes for conciliators and labour court
administrators in South Asia. The present volume includes several papers presented at
these workshops in India. It provides an overview of major emerging issues in dispute
settlement and suggests ways of improving the dispute settlement machinery. This
volume should be of interest to policy makers, industrial relations practitioners, the
viii Prevention and Settlement of Disputes in India
corporate sector, trade unions and civil society groups. I thank all the contributors, and
particularly my colleague A. Sivananthiran and Professor C.S. Venkata Ratnam for their
valuable assistance in editing and publishing this volume for wider dissemination.
30 November 2003 Herman van der Laan

Director, Subregional Office for South Asia and
ILO Representative in India
Preface
The effective prevention and settlement of disputes is a cornerstone of sound industrial
relations, and it is essential that appropriate machineries exist for this purpose. Efficient
mechanisms for dispute prevention and resolution help to create a climate in which
economic growth and equity can flourish.
Dispute settlement in general and is a major element of the larger problem of labour
policy. The dispute prevention and resolution process seeks to assist parties in the
employment relationship to settle their grievances or disputes with minimum disruption
of work. In a sense, the process is a peace-making arrangement.
The absence of an effective dispute settlement system and procedures can result in
widespread industrial conflict with adverse effects on worker-employer relations
and also on the collective bargaining process itself. On the other hand, it has been
recognized that third-party intervention in the settlement of disputes can also
undermine the collective bargaining process. In many developing countries, there is a
growing concern that the industrial dispute settlement machinery has become too
legalistic, expensive and slow.
An important challenge facing the countries is the large backlog of industrial disputes
pending before labour courts/tribunals. In India there are more than 500,000 cases
pending before labour courts and in Sri Lanka about 20,000 cases pending before labour
tribunals. In order to be meaningful, justice ought to be delivered on time and this can
only be possible only when pendencies in labour courts come down and disposal rates
go up.
At the outset it must be borne in mind that the role of dispute settlement mechanisms
must be seen in the overall context of industrial relations in India. Any reform in the
conciliation or labour adjudication system will be largely cosmetic unless greater
attention is paid towards developing a sound industrial relations framework at the
national and enterprise levels.
Many changes have been made particularly in the last decade in the way disputes are
prevented or resolved. However, effective prevention of disputes remains the core of
sound industrial relations. In the new and fast changing workplace environment, new
and innovative tools, techniques and approaches to negotiation and conflict resolution
x Prevention and Settlement of Disputes in India
are now being studied, developed and applied. There is greater stress on the prevention
of disputes with a focus on mutual gains bargaining and win-win negotiations. In many
countries the traditional dispute settlement approaches are being questioned and greater
emphasis is being placed on labour-management cooperation. A new approach to
dispute settlement is also evident in India where, on average, it takes more than two
years to settle a dispute and the growing backlogs have become a problem. The pro-
motion of social dialogue in the dispute settlement process has led to the establishment
of lok adalats or peoples’ court to deal with the problem.
The ten papers presented in the volume deal with labour courts, conciliation, inspection,
awards implementation as well as alternative dispute resolution mechanisms and lok
adalts. They are based on experience and field research and take into account the
recommendations of the Second National Commission on Labour. Some of the important
developments arising from changes in the workplace scenario include greater emphasis
on interest-based negotiations, mutual gains bargaining, win-win negotiations and
alternative dispute resolution. There is also a general trend to move away from
adversarialism to cooperation which makes disputes and conflict less pronounced than
before.
We are grateful to the contributors for sharing their knowledge and experience and to
the ILO for providing the opportunity to document and disseminate the studies.
New Delhi A Sivananthiran

25 November 2003 C S Venkata Ratnam
List of Contributors
A. Sivananthiran, Senior Specialist, Industrial Relations, ILO Subregional Office, New
Delhi.
C. S. Venkata Ratnam, Professor, International Management Institute, New Delhi &

Director, GITAM Institute of Foreign Trade, Visakhapatnam.
Elias George, Labour Secretary, Government of Kerala, Trivandrum.
J. P. Verghese, Vice Chancellor, Hidaytullah National Law University, Raipur.
J. S. Sodhi, Executive Director, Shri Ram Centre for Industrial Relations and Human
Relations, New Delhi.
M. Dias, Secretary, North India Employers’ Association, New Delhi.
P. D. Shenoy, Secretary, Ministry of Labour, Government of India, New Delhi.
Subesh Das, Former Chief Labour Commissioner, Government of West Bengal, Kolkata.
S. Ghosh, Advocate, Supreme Court, New Delhi.
S. Shukla, Presiding Officer, CGIT-cum-Labour Court, Government of India, MOL,

Lucknow.
V. Nagaraj, Additonal Professor of Law & Chairperson Singhania ADR Chair, National
Law School of India, Bangalore.
1
Effective Labour Court

Administration :
Trends and Issues
P.D. Shenoy
Adjudication has dug deep roots in the field of labour. Though collective bargaining
caters to long-term peace and organised trade unions and established concerns
prefer to bargain and amicably settle labour demands, failure to settle amicably often
makes adjudication the preferred trial of strength. Except for a handful who resort to
strikes and lockouts, exceptions which only prove the general rule, labour has come
to cultivate the habit of adjudication. This confidence in adjudication has been
inspired by the benefits earned by labour through this system. Employers in the
country have found adjudication beneficial to them in as much as it not only curbs
the habit of labour to direct action but also serves as a powerful check and control on
the extravagances of the demands and costs of labour. The State can hardly find a
better substitute for effecting social and economic justice through rule of law in the
labour field. Industrial adjudication has, therefore, very much come to stay in our
country.
The technique of industrial adjudication is a dynamic and revolutionary process of

transforming traditional jurisprudence — which has proved wholly ineffective and
impotent in protecting the poor industrial masses from social injustice and economic
exploitation (resulting from industrial revolution) — into a progressive and flexible
legal institution of social regeneration and economic justice. It has, to some extent,
redeemed the infamy of individualistic legal systems and demonstrated that with the
injection of right doses of progressive social philosophy, law and jurisprudence can
become potential agents of social and economic progress.
A correct understanding of this technique is necessary for all those interested and
concerned with labour affairs. It is also a fascinating study for legal scholars as also
2 Prevention and Settlement of Disputes in India
a romantic story for the working classes. How this technique works, how the
demands of labour are processed in the judicial furnace and what are the working
rules and principles which adjudication has formulated for settling these demands —
require to be analysed.
The experience in India during the last 50 years has been that the Supreme Court of
India, various High Courts, Industrial Tribunals and Labour Court have enriched the
country with a variety of precedents of labour demands by their sweat and toil and
missionary research from almost a barren and fallow field of labour jurisprudence.
They have handed down to the world community jurisprudence, as living as dynamic,
as valid as sound, which has redeemed the lost faith of industrial masses in law and
justice. Their contribution to the development of labour law and redemption of social
values of law and justice, is unparalled in the world history of jurisprudence, far
exceeding the contribution made by Equity in England.
Adjudication of industrial demands being a complicated task, the Tribunals have to

go into the merits of each issue which necessarily means examination, analysis and
appreciation of the labour economics, the sociological approach and the relevant
technical aspects of every issue. The demands concerning labour problems have
often been subjected to expert studies and researches by high powered bodies of
International Labour Organization, Indian Labour Conference, Labour Investigation
Committees, Wage Boards, Pay Commissions and various Government bodies, etc.
In fact, these Reports and Recommendations have often been adopted by the
Supreme Court, High Courts and Industrial Tribunals as guidelines.
According to Section 10 of the Industrial Disputes Act 1947, the appropriate

government is empowered to refer a dispute to the Tribunal. This power of the
appropriate government is independent of the fact whether conciliation proceedings
have been held or not. However, in practice, a dispute is referred to the Tribunal/
Labour Court for adjudication by the appropriate government after considering the
failure of conciliation report received from the conciliation officer.
The law gives sufficient scope to the conciliation officers for making. investigation
into the dispute and do all such things as they may deem fit in order to bring around
parties to an amicable settlement of the dispute.
Where a settlement is arrived at during the conciliation proceedings over a dispute or

any of the matters in a dispute, the conciliation officer is required to send a report of
the settlement to the appropriate government. The format in which the settlement is
required to be drawn is laid down in the rules framed under the Act. If no settlement
is arrived at, the conciliation officer is required to send to the appropriate government
as soon as practicable, a full report, setting forth steps taken by him for ascertaining
Effective Labour Court Administration: Trends and Issues 3
the facts and circumstances relating to the dispute and for bringing about a
settlement together with a full statement of facts and circumstances and the reasons
on account of which in his opinion, the settlement could not be arrived at. The time-
frame laid down for conclusion of the proceedings is 14 days. Section 12(6) lays
down that the report under this Section shall be submitted within 14 days of
commencement of the conciliation proceedings. The conciliation officer is
empowered to extend the time for submission of report by such further time as may
be agreed upon in writing by all the parties to the dispute.
Competence and Jurisdiction of Labour Courts/Industrial Tribunals
Under Section 7 of the Industrial Disputes Act 1947, a Labour Court constituted by
the appropriate government is competent to adjudicate and render awards on the
matters mostly relating to rights, such as:
1. Discharge or dismissal of workmen, including reinstatement of, or grant of
relief to, workmen wrongfully dismissed;
2. Withdrawal of any customary concession or privilege;
3. Illegality or otherwise of a strike or lockouts; and
4. All matters other than those specified in Schedule Ill.
INDUSTRIAL TRIBUNALS
Industrial Tribunals under Section 7A of the Industrial Disputes Act 1947 have also
been constituted to adjudicate upon the issues falling within Schedules II and III, i.e.
rights disputes and interests disputes.
Under Section 7-8 of the Industrial Disputes Act 1947, the Central Government may
also constitute national Tribunal to adjudicate the disputes if it involves any question
of national importance or it is of such nature that industrial establishments situated in
more than one State are likely to be interested or affected by such dispute whether
or not it is the appropriate government in relation to that establishment.
Labour courts or industrial tribunals are also competent to inquire into and
investigate industrial disputes referred to them and upon adjudication, render awards
which are binding on the parties. The Labour Courts and Industrial Tribunals also act
as forum of appeal under Section 11A in the matter of discharge, dismissal or
termination of employment.
The Labour Courts and Industrial Tribunals are also vested with power to inquire into
complaints of effecting adverse change in the conditions of service of the workmen
during pendency of conciliation proceedings and also to adjudicate and render
awards for providing relief to the aggrieved parties. They are also fora for
interpretation of settlements and awards in case of ambiguity upon referral by the
appropriate government. While adjudicating any industrial dispute, the Labour
Courts'/Tribunals' jurisdiction is circumscribed by the terms of reference of the
appropriate government. The Supreme Court has held that Labour Courts and
Tribunals are not civil courts in the real sense.
Issues given to the Labour Courts/Tribunals are very wide. Industrial dispute is
defined as any dispute or difference between the employers or between employers
and the workmen or between the workmen and workmen which is connected with
employment or non-employment or terms of employment or with the conditions of
labour of any person. In India, no distinction has been made so far where rights
disputes and interests disputes are concerned in the matter of reference to labour
courts/ tribunals for adjudication.
In the States of Andhra Pradesh, Bihar and Tamil Nadu, a workman can approach
the labour court directly in case of discharge, dismissal or termination of
employment. In Tamil Nadu, a workman can avail of this right after failure of
conciliation, whereas in Andhra Pradesh no conciliation is needed. In Bihar,
workmen covered under Bihar Shops & Establishments Act 1956 can approach
Labour Courts directly in case of discharge, dismissal or termination.
Procedure and Approaches of Labour Courts in Deciding and Settling

Industrial Disputes
The procedure practised in the Labour Courts and Industrial Tribunals has been
defined under Rule 10B, 13 to 30 of the Industrial Disputes Rules 1957. They have
the legal status of civil courts under the Civil Procedure Code 1908 in the matter of
summoning of witnesses, enforcing attendance and recording of evidence. However,
strictly speaking, they are not required to follow either the procedure laid down under
the Indian Evidence Act or the Civil Procedure Cole 1908. The procedure
incorporates the basic principles of natural justice. Ordinarily, adjudication is to
be a completed within three months and in case of delay, reasons have
to be recorded in writing. Under Section 11 of the Industrial Disputes Act,
Labour Courts, Tribunals or national Tribunals can follow such procedures as
they may deem fit.
Practising lawyers are not allowed to appear in such cases which the workers or
trade unions decide to present themselves. This has been aimed at simplifying
the process and keep it free from intricate legal wrangling unintelligible to
the ordinary citizen. In practice, however, lawyers flood Labour Courts and Industrial
Tribunals. The main emphasis has been on quick and inexpensive mechanisms for
disposal of disputes and relief to the aggrieved party to ensure industrial peace. In
reality, however, industrial adjudication is neither inexpensive nor prompt.
The awards rendered by the Labour Courts and Industrial Tribunals are binding on
the parties and to all the present and future employees and employers and its non-
implementation is a criminal offence punishable under Section 29 of the Industrial
Disputes Act. However, under the Industrial Disputes Act 1947, Labour Courts and
Tribunals do not have powers to issue decrees for the implementation of their
judgment.
Effectiveness of Labour Courts/Industrial Tribunals in Granting Relief to

Dismissed Workers/Issues Surrounding Reinstatement — Unfair Labour
Practices
Before insertion of Section 2A in the Act in 1965, the industrial relations scenario
was agog with allegations of victimization through winning over recognised trade
unions or pocketing unions to oppose reference or reinstatement of dismissed
workers. However, the situation underwent a sea-change after 1965 when individual
disputes relating to discharge, dismissal or termination of employment were defined
as industrial disputes under Section 2A of the Industrial Disputes Act, 1947.
Labour Courts / Industrial Tribunals were not competent to enter the quantum or
justifiability of punishment except in case the delinquent workman was denied a fair
and reasonable opportunity of defending his conduct. In other words, wherever
cases of non-compliance of principles of natural justice or finding of the inquiry officer
was found based on extraneous considerations to be termed as 'perverse', the
pronouncement of reinstatement with wages was inevitable. The industrial
jurisprudence obtaining in those days was non-interference by the judiciary in the
disciplinary domain of the master (employer) unless there was a gross violation of
the principles of natural justice. This constraint in industrial jurisprudence continued
till 1971 when a new Section 11A was inserted empowering the Labour Courts and
Industrial Tribunals to sit in judgement as a forum of appeal. This has completely
changed the industrial relations scenario in so far as reference of disputes and their
adjudication are concerned.
Reinstatement of Dismissed Workers
A case study of 80 dismissed employees employed in the coal industry in the heart
of the coal-belt in Dhanbad in the State of Bihar indicates that the Labour Courts/
Industrial Tribunals are effective in granting relief to the workmen. However, the time
taken in adjudication is not in consonance with the spirit of legislation, which
provides for passing an award within a period of three months. Of course, this
provision is recommendatory in nature and it has an enabling provision to justify

delay. In all the 80 cases selected on random basis, the time taken in adjudication
ranges from three to five years preceded by four to six months of reference exercises
by the Ministry of Labour. Out of 80 cases, in 59 cases order of reinstatement has
been passed by the Labour Courts/Industrial Tribunals on the grounds, inter alia,
1. Alleged misconducts not proved;
2. Punishment disproportionate to the gravity of allegation;
3. Non-compliance of principles of natural justice; or
4. Action of the management found arbitrary.
Therefore, it can be inferred that industrial adjudication through Labour Court/

Industrial Tribunal has proved its effectiveness of dispute resolution in so far as
dismissal, discharge or termination of employment is concerned. Of course, the time
lag is inordinate.
Establishment of the Labour Courts and Industrial Tribunals and the Pendency
of Cases Before Them"
As on 31.10.1998, there were 214 Labour Courts, 97 Industrial Tribunals and 22

Labour Courts-cum-Industrial Tribunals making a total of 333 functioning in the
various states. The statistics pertaining to the same, state-wise and UT-wise is given
at Annxure I.
As on 10.05.2000, 5,33,038 cases were pending in these Tribunals. Out of these

cases, 28,864 had been pending for more than 10 years. Details can be seen in
Annexure II. This gives a clear picture that the pendency is huge but also nearly
29,000 cases are more than 10 years old resulting in the futility of the adjudication.
This however does not imply that adjudicatory authorities are not making any effort to
dispose of the cases. In the year 1997, 1,21,295 cases, and in the year 1998,
1,25,739, and in the year 1999, 1,27,630 cases, respectively were disposed of by the
Labour Courts and Industrial Tribunals in the States/UTs. Details can be seen in
Annexure III.
Similarly, 17 Central Government Industrial Tribunals-cum-Labour Courts had

disposed of 867 cases in 2000, 1803 cases in 2001 and 2057 cases in 2002.
Similarly, they had disposed of 884 applications in 2000, 2,516 applications in 2001
and 827 applications in 2002. Details can be found in Annexure IV.
As on 31.07.2003 there were 11,828 cases and 3,978 applications were pending in
the 17 CGITs. Details can be scanned in Annexure V.
WORKLOAD OF LABOUR COURTS
So far as the question of coping with the existing workload of the Labour Courts and
Industrial Tribunals in the Central sphere is concerned, the time lag is on the
increase with the rise in the number of references pending before the Labour Courts/
Industrial Tribunals.
Apart from prosecution for breach of settlement or award and recovery of monetary
dues, there is no other mechanism in the Industrial Dispute Act to enforce the
decisions of the Labour Court. However, the State Governments of West Bengal and
Bihar have, by a State Amendment Act, empowered the Labour Courts/ Tribunals to
execute their award or any settlement as a decree of the civil court.
It has been observed that in many cases the awards of Labour Courts are
challenged by the employer in the higher courts of judicial review or writ jurisdiction
under the Constitution though the awards remained unimplemented in spite of filing
prosecution.
A study on Labour Adjudication in Central Government Industrial Tribunal, Delhi,

from July 1993 to June 1994 by the V.V. Giri National Labour Institute (NLI) has
revealed that in most of the cases there was inordinate delay in adjudication of
industrial disputes as well as disposal of claim applications. In cases of awards
passed after completion of adjudication process, the delay was to the extent of four
year and five months. The major causes of delay is the elaborate procedures
followed by the tribunal which are as under:
1. Notice to parties for filing claim;
2. Filing claim statements by the workmen and date fixed for filing written
statement by the employer;
3. Filing of written statement by the employer and date fixed for filing rejoinder
by workmen;
4. Filing of rejoinder by workmen and date fixed for employers' evidences;
5. Recording of employers' evidence and date fixed for workmen's evidences;
6. Recording and collection of evidence of workmen and date fixed for
argument;
7. Arguments and award given or resolves; and
8. Award.
The study suggests that the most prominent cause responsible for delay in
adjudication is frequent adjournment granted by the Labour Courts. Both workmen
and employer seek adjournment after adjournment at each of the above stage and
this contributes to the delay in dispute resolution. According to the study, the worker
sought 33 per cent adjournment as against 22 per cent adjournment at the instance
of the employer.
Besides the above issues, the other issues pertaining to delay are:
1. Procedural formalities and technicalities of Civil Procedure Codes followed
unintentionally almost as a routine;
2. Improper logistic supports such as shortage of staff, transport, access to
information;
3. Lack of awareness/orientation of the presiding officers about the industry to
which the dispute relates;
4. Lack of enabling provisions in the Industrial Disputes Act to enforce awards;
and
5. Duplication of work in conciliation and adjudication, etc.
Lok Adalat
Of late, Labour Lok Adalats have been recognised as a mechanism for quick
resolution of disputes with nil expenditure for the parties involved. This system
dispenses justice on the basis of discussions, counselling, persuasions and
compromises. Lok Adalats have helped in resolving cases pending for a long time. In
Central sphere several labour Lok Adalats have been organised. It has been
observed that many long pending cases which can be settled by awarding
Compensation can be settled in Lok Adalats.
Role of Trade Unions
The workers are either represented by the union representative who may not be well
versed in law and may not be in a position to match professional ability, knowledge
and skill of the employer's representative. In some cases, workers are represented
through legal practitioner-turned union leader who may be more interested in legal
practice than meeting the aspirations and concerns of the workers.
Role of Management
Generally, employers do not want disputes to be adjudicated on merit in Labour

Courts or Tribunals. Often they raise technical points to get the reference rejected.
They also seek time to try out the patience of workers in adjudication so that a no-
dispute award is passed by the Labour Court due to the absence of workers.
Personnel for the System — Relationship with Judicial System
Labour courts and tribunals in India consist of only one person appointed by the
appropriate government. A person who has worked as a High Court Judge or District
Judge, Additional District Judge for a period of not less than three years may be
appointed as presiding officer of a Labour Court/ Industrial Tribunal. A person who
held any judicial office in India for seven years or the post of presiding officer of a
State labour court for five years may also be appointed as a presiding officer of a
Labour Court/ Tribunal.
The Labour Courts and Tribunals are not bound to follow strictly the procedure laid
down in the Indian Evidence Act or Civil Procedure Code. They are also not required
to follow the complex technical, legal procedure followed by the courts. The scope
and jurisdiction of labour court is much wider than the civil courts. The labour courts
and tribunals are required to adhere to the principles of natural justice. Rules 10B, 13
to 30 lay down the procedure to be followed by the Labour Courts and Tribunals. The
Labour Courts unlike the civil courts can create new rights or obligation between the
employers and the workmen which they may consider essential for keeping the
industrial peace. [Western India Automobile Associations vs. Industrial Tribunal,
Bombay (AIR 1949); Bharat Bank Ltd. vs. Employees of Bharat Bank Ltd. (AIR 1950
SC 188)].
Selection and Training of Labour Court/ Tribunal —

Manpower Planning Issues
As labour court judges are required to decide complex issues, they require
induction training and retraining to perceive the change in their role as
labour adjudicators and the impact of their decisions on the national economy.
One of the major causes for delay in adjudication is non-availability of
Judges for appointment as presiding officers. Timely and proper selection of
presiding officers is necessary to avoid delay in dispute resolution. One of the most
crucial issues relating to delay in adjudication is manpower planning. Serious
manpower planning exercises like assessment of number of presiding
officers required, their qualifications of requirement, process of selection, training,
etc. are required to be undertaken to develop professionals in the dispensation of
labour justice.
The 2nd National Commission on Labour (2002) has made certain observations on
non-implementation of awards and denial of justice as these are very relevant and
quoting them in extenso.
Non-Implementation of Awards and Denial of Justice
Many witnesses have complained that the awards of Labour Courts and Tribunals
are not implemented by employers. The delay in implementing the awards cause a
lot of hardship to the concerned workmen and virtually amounts to denial of justice.
The remedy in the existing law is for the enforcement authorities to launch
prosecution under Section 29 of the Industrial Disputes Act. This remedy has not
proved effective. It consumes time at every step. Moreover, the law as it stands only
empowers the courts to impose fines. It does not empower the courts to ensure
implementation of the awards.
In the Central sphere itself, the number of unimplemented awards is approximately

2,500. These involve approximately 20,000 workers. Most of these awards of Labour
Courts / Tribunals have granted relief of reinstatement or regularisation from certain
specified dates. Many of these awards lie unimplemented for five to fifteen years or
more.
We find that non-implementation of the awards of Labour Courts and Industrial

Tribunals has become a major problem that paralyses the effectiveness of the
dispute resolution machinery and thwarts the basic intentions of the ID Act.
In 70 to 80 per cent of writ petition cases the employer/management does not find
success, and the award is upheld. However, it is seen that the High Court decisions
in such writ petitions are pronounced only after three to five years and sometimes
even seven to eight years.
The management again takes their time and if the worker again makes a demand
for the implementation of the award, or if the Labour Department issues a legal
notice for the implementation, they again go on appeal to a larger bench of the High
Court.
Most of the awards which employers/management challenge relate to the

regularisation, reinstatement, back wages, etc. of a large number of workers. Often,
awards in respect of individual worker too are challenged.
After 10 or 15 years when the employer/management loses in every court, it is often

that the concerned worker has disappeared from the scene.
It must be pointed out here that the Hon'ble Supreme Court had directed the
Government of India to set up a committee consisting of representatives of the
Ministry of Industry, the Bureau of Public Enterprises and the Ministry of Law to
monitor disputes between ministries and between ministries and PSUs, to ensure
that no litigation went to the Court or a Tribunal without the matter being examined
and cleared by the Committee for Litigation (Order dated 11 October 1991 in Civil
Appeal Nos.2058-59 of 1988 in the case of ONGC vs. Collector of Central Excise).
The Hon'ble Supreme Court further directed that every court and every tribunal
where such a dispute is raised should first demand a clearance from the Committee,
and in the absence of the clearance, refuse to take further proceedings. The
intention of the apex courts order is clearly to prevent litigation between departments
and agencies of the Government.
But it has been seen that Public Sector Undertakings (PSUs) often file writ petitions
against the Labour Ministry, impleading the Labour Secretary, the Labour
Commissioner and the Enforcement Officer as main respondents.
The situation in the State sphere private industrial units is even worse. They often
make it a point of prestige. Furthermore, awards with high financial implications are
hardly ever implemented. Quite often they fail to enable workers to receive financial
dues or back wages or compensation in spite of clear orders from the Courts.
Poor workers or their unions often find it difficult to defend their cases in the High
Court or in the Supreme Court, as it costs them huge sums of money. Many times
they approach employers or the Labour Commissioner for partial implementation of
the award. After losing from all the courts and feeling pressurised from all corners,
the employer pressurises the workers or unions to accept much less than what the
award has given them.
We, therefore, feel that if the existing unethical system of continuous denial of justice
is not changed, the workers will lose faith in the law, in labour administration and in
the labour judiciary. To remedy the situation it is essential that the award is
implemented immediately and the payment to the worker is started on the basis of
last salary drawn. This principle would apply to workers both in the private and in the
public sector organisations. However, for public sector organisations, which want to
prefer appeal against the orders of Labour Court, they should obtain permission of a
Screening Committee to be set up by the appropriate Government.
If the above recommendation is accepted, it would go a long way in providing relief

to the workers.
Policy Recommendations
There is a need to review the industrial disputes resolution system in the light of
economic liberalisation, globalisation and restructuring of the economy. The changes
taking place due to globalisation and market-driven economy demand that the
approach of voluntary resolution of disputes should take prime place and be
strengthened over the legalistic approach of settlement of disputes by the courts.

The workplace cooperation between employers and workers needs to be improved.
The focus should be on bipartite consultation, building trust by information sharing at
enterprise level and voluntary arbitration rather than resolution of disputes by
adjudication.
As conciliation in rights disputes is not as effective as it is in interests disputes, it

would be appropriate to allow workmen to approach the Labour Court straight away
without going through the process of conciliation specially in disputes under Section
2A.
There is a need for improvement of knowledge, skills and competency of conciliation

officers to enable them to win the confidence of employers and workmen. It is also
necessary to upgrade the skills of labour adjudicators to enable them to perceive the
change in their role as labour adjudicators and the impact of their decisions on the
national economy. Therefore, to improve the efficiency and effectiveness of
conciliation officers and labour adjudicators, induction training and periodical
refresher courses should be provided on a regular basis.
The labour adjudication should encourage pre-trial hearing to settle the disputes
amicably between the parties without involving any time-consuming procedures of
hearing.
Conciliators and adjudicators should be given sufficient staff and infrastructural back-
up to improve efficiency. Support facilities, such as office equipment, library,
transport and communication should be provided to conciliators and adjudicators.
They should have access to information on all matters concerning industrial relations
like industrial statistics, human resource, long term settlements, retrenchments,
dismissals, strikes and lockouts and judicial pronouncements. A data base should be
built by the Labour Ministry on all aspects related to industrial relations. The
conciliators and adjudicators should have access to such data base through
computer connectivity.
Whenever the conciliators are not in a position to settle the disputes they submit a
'Failure Report' o the Government. These are commonly known as 'FOCs'. The
factual reports submitted by the conciliation officers mention the efforts made by
them to investigate the disputes and also give a detailed analysis of the demands
male by the trade unions and the response given by the managements. The reports
also give the details pertaining to the efforts made by the conciliation officers to settle
the disputes. If copies of these reports are given to the adjudicators, they will be
benefited to a great extent. They can use them as inputs in their understanding of
the disputes though they are not bound by the analysis of the conciliation officers.
Efforts Made by the Central Government to Set up More CGIT-cum-LCs
Acting on one of the proposals of the Working Group set up by the Planning
Commission on Labour Policy in the context of preparation for the 9th Five Year Plan
that 15 additional CGIT-cum-Labour Courts may be considered for setting up during
the 9% Five Year Plan to cope with the increasing number of cases, three CGIT-
cum-Labour Courts in Chennai, Hyderabad and Bhubaneshwar were set up in the
9th Five Year Plan. In the second phase another exercise was conducted to create
five more CGIT-cum-Labour Courts at Ahmedabad, Emakulam, Guwahati,
Chandigarh and Delhi under the 9th Five Year Plan itself. However, they could not
be set up due to delay in receipt of the concurrence of the Ministry of Finance for
creation of essential posts.
Procedure for Filling up Vacant Posts of CGIT-cum-Labour Courts

(Current Position)
For appointment of Presiding Officers in the CGIT-cum-Labour Courts, a panel of

names is sought from the High Courts concerned in the States where CGIT-cum-
Labour Court located and also from High Courts of the neighbouring States. The
panel of names suggested by the High Courts are submitted for approval of the
Labour Minister and the judicial officer selected by the Labour Minister is appointed
as Presiding Officer.
With regard to the appointment of Presiding Officers in the five new CGIT-cum-
Labour Courts, the position is as follows:
With the approval of Labour Minister, the post of Presiding Officer in CGITcum-
Labour Court, Delhi-11 has been filled up.
It is expected that the CGIT-cum-Labour Courts at Ahmedabad, Eamakulam.

Guwahati and Chandigarh will be functional by the end of this calendar year. At any
point of time there are several vacancies in the post of Presiding Officers of CGITs.
These are due to procedural delays involved in circulation of vacancies to the
High Courts, collection of Curriculum-Vitae and annual confidential reports of the
judicial officers and seeking approval of the competent authority for their
appointment, etc.
The National Commission on Labour has recommended that officials of the Labour
Department at the Centre and the States who are of an above the rank of Deputy
labour Commissioner/Regional Labour Commissioner with 10 years experience and
having a degree in law may be eligible for being appointed as Presiding Officers of
Labour Courts.
The State Governments of Haryana, Maharashtra, Gujarat and Madhya Pradesh

have relaxed qualifications of Presiding Officers of Labour Courts/Industrial Tribunals
to make officers of the State labour Department possessing prescribed qualifications
and experience, also eligible.
The expertise of these officers of the Labour Department in handling conciliation and
mediation and also the degree in law or social work or social welfare will definitely
help them in expeditiously deciding the cases. Hence, once this recommendation is
accepted by the Central Government and other State Governments, it is hoped that
there will be a vast reduction in the pendency of the cases before the adjudicating
authorities.
ANNEXURE I
State Labour Courts-cum-Industrial Tribunals

The number of Labour Courts (LCs), Industrial Tribunals (ITs) and Labour Court-
cum-Industrial Tribunals (LC&ITs) set up by State Governments & Union Territory
Administrations as on 31.10.1998
S .No. Name of the State/ UT No of LC No. of IT No. of LC & IT Total
1 Andaman & Nicobar 1 1 0 2

2 Andhra Pradesh 6 2 3 11
3 Arunachal Pradesh 0 0 0 0
4 Assam 2 3 0 5
5 Bihar 14 3 0 17
6 Chandigarh 6 0 1 7
7 Dadra & Nagar Haveli 1 0 0 1
8 Daman & Diu 1 0 0 1
9 Delhi 10 3 0 13
10 Goa 1 0 1 2
11 Gujarat 41 17 0 58
12 Himachal Pradesh 0 0 1 1
13 Haryana 0 0 7 7
14 J&K 0 0 1 1
15 Kerala 4 5 0 9
16 Karnataka 12 4 0 16
17 Lakshadweep 0 0 0 0
18 Meghalaya 1 0 1 2
19 Maharashtra 40 28 0 68
20 Manipur 0 1 0 1
21 Madhya Pradesh 26 5 0 31
22 Mizoram 0 1 0 1
23 Nagaland 1 1 0 2
24 Orissa 3 1 0 4
25 Punjab 6 1 0 7
26 Pondicherry 3 1 0 4
27 Rajasthan 1 1 7 9
28 Sikkim 0 0 0 0
S .No. Name of the State/ UT No of LC No. of IT No. of LC & IT Total
29 Tripura 3 3 0 6
30 Tamil Nadu 10 1 0 11
31 Uttaar Pradesh 19 6 0 25
32 West Bengal 2 9 0 11
Total 214 97 - 333
l 22 -
Source: Annual Report of the Ministry of Labour 2000-2001 (Part-1)

ANNEXURE II
Statement Showing the Number of Cases Pending

in Each Labour Court in Every State Indicating
Separately the Cases Pending for More than
10 years (Information upto 10.05.2000)
No. of Cases Pending
No. of Cases Pending at
S.No. Name of the State /UT for More Than 10
Present
Years
1 Andaman & Nicobar 128 00
2 Andhra Pradesh 11674 47
3 Arunachal Pradesh There is no Labour Court / I. Tribunal In the State
4 Assam 189 138
5 Bihar 5200 566
6 Chandigarh 1428 6
7 Dadra & Nagar Haveli 2 00
8 Daman & Diu 15 00
9 Delhi 28837 2342
10 Goa 175 00
11 Gujarat 133916 8616
12 Haryana 11803 00
13 Himachal Pradesh 935 00
14 J&K 90 4
15 Kerala 3450 63
16 Karnataka 17457 2924
17 Lakshadweep There is no Labour Court 1 I. Tribunal In the State
18 Meghalaya There is no Labour Court 11. Tribunal In the State
19 Maharashtra 142345 11508
20 Manipur 00 00
21 Madhya Pradesh 89341 00
22 Mizoram There is no Labour Court/ I. Tribunal In the State
23 Nagaland 4 00
24 Orissa 4588 28
25 Punjab 14784 110
26 Pondicherry 128 1
27 Rajasthan 20066 775
28 Sikkim There is no Labour Court/ I.Tribunal In the State
No. of Cases Pending

No. of Cases Pending at
S.No. Name of the State /UT for More Than 10
Present
Years
29 Tripura 6 00
30 Tamil Nadu 21713 150
31 UttarPradesh 22539 1303
32 West Bengal 2225 283
Total 533038 28864
Source: Answer provided to a question in Parliament.

ANNEXURE III
Statement Showing the Year-wise Number

of Cases Disposed of During the
Last Three Years in Each State
S. Name of the State /UT No. of Cases Disposed of During the Last Three Years,
No. Year-wise
1997 1998 1999
1 Andaman & Nicobar 41 10 21
2 Andhra Pradesh 3381 2686 3713
3 Arunachal Pradesh There is no Labour Court/ Industrial Tribunal in the State
4 Assam 265 255 189
5 Bihar 706 1107 695
6 Chandigarh 574 520 691
7 Dadra & Nagar Haveli NIL NIL NIL
8 Daman & Diu 6 NIL 1
9 Delhi 4092 13591 13169
10 Goa 35 2 4 93
11 Gujarat 32057 24154 27461
12 Himachal Pradesh 457 197 354
13 Haryana 2703 4116 3646
14 J&K * 18 10
15 Kerala 990 723 743
16 Karnataka 3160 3722 2979
17 Lakshadweep There is no Labour Court/ Industrial Tribunal in the State
18 Meghalaya There is no Labour Court/ Industrial Tribunal in the State
19 Maharashtra 25244 26995 27159
20. Manipur NIL NIL NIL
21 Madhya Pradesh 22584 26665 26698
22 Mizoram There is no Labour Court/ Industrial Tribunal in the State
23 Nagaland 4 cases have been disposed of during these three years
24 Orissa 1074 755 1424
25 Punjab 6616 5332 4569
26 Pondichery 42 110 36
27 Rajasthan 3039 2416 2427
28 Sikkim There is no Labour Court/ Industrial Court/Industrial Tribunal in the Sate
S. Name of the State /UT No. of Cases Disposed of During the Last Three Years,
No. Year-wise
1997 1998 1999
29 Tripura 2 NIL 2
30 Tamil Nadu 4707 4542 5871
31 Uttar Pradesh 9103 7304 5284
32 West Bengal 417 479 395
Total 121295 125739 127630
• J&K not provided the figures for the year 1997.

Source: Answer provided to a question in Parliament.
ANNEXURE IV
Calender Year-wise Pendency/ Disposal Figures in the CGITs.

2000 2001 2002
Cases Applications Cases Applications Cases Applications
Sl. Name of the
Pending
Pending
Pending
Pending
Pending
Pending
No. CGITs
Disposed
Disposed
Disposed
Disposed
Disposed
Disposed
Registered
Registered
Registered
Registered
Registered
Registered
1 Awed 409 409 - 51 51 - 444 441 3 59 59 - 490 424 68 79 74 5

2 Bangalore 527 521 6 450 450 - 855 610 245 928. 489 439 434 322 112 164 130 34
3 Kollate 270 237 33 94 66 28 243 226 17 152 151 1 243 170 73 203 158 45
4 Chandigarh 1833 1810 23 376 341 35 2348 2130 218 407 360 47 2135 1790 346 396 319 77
5 Dhanibad-I 1717 1628 89 341 325 16 1873 18og 64 360 357 3 1850 1739 111 403 376 27
Effective Labour Court Administration: Trends and Issues
6 Dhanbad-11 1364 1364 - 63 63 - 1853 1683 170 95 76 19 1597 1337 260 64 28 38

7 Jabalpur 1499 1427 72 695 685 10 1755 1563 192 851 700 151 1405 1237 168 550 543 7
8 Kanpur 864 742 122 1220 859 361 718 648 70 708 628 80 658 625 33 704 517 187
9 Murnbaf-I 284 244 40 76 75 1 246 231 15 80 76 4 241 183 58 80 64 16
10 Mumbai-11 544 411 133 878 864 14 495 416 79 2073 1218 855 441 335 106 492 411- 81
11 New Delhi 1281 1184 97 560 490 70 1240 1182 58 598 440 158 1275 1132 143 321 283 38
12 Jaipur 317 221 96 94 66 28 298 191 107 262 188 74 120 90 30 151 143
13 Lucknow 265 239 26 426 232 194 366 296 70 13D 85 45 447 359 88 51 36 15
14 Nagpur 434 364 70 -- - - 463 373 90 58 29 29 53 383 70 7 - 7
15 Channel 115 89 26 263 136 127 1080 806 274 1097 ' 565 532 613 337 276 172 37 135
16 Bhubaneshw 68 34 34 7 7 -- 592 467 125 76 56 20 474 393 81 100 84 16
17 ar
Hyderabad - - - - - - 263 257 6 361 302 59 556 520 36 719 628 91
Total 11,791 10924 867 5594 4710 884 15132 13329 1803 8295 5779 2516 13033 11376 2057 4656 3829 827
Source: Answer provided to a question in Parliament

21
ANNEXURE V
Pendency Statement Upto July 2003

Cases Applications
S. B/F from B/F from
Name of CGIT Recei- Dis- Pen- Recei- Dis- Pen-
No. Previous Previous
ved posed ding ved posed ding
Month Month
1 Mumbai-I 183 35 36 182 64 26 28 62
2 Mumbai-II 335 43 77 301 411 60 123 348
3 Dhanbad-I 1739 65 85 1719 376 22 14 384
4 Dhanbad-II 1337 59 178 1218 32 -- -- 84
5 Asansol 419 27 35 411 74 9 0 83
6 Kolkata 149 7 2 154 157 0 0 157
7 Chandigarh 1783 136 98 1821 293 18 59 252
8 New Delhi 1144 101 25 1220 290 22 6 306
9 Kanpur 636 17 12 641 611 37 7 641
10 Jabalpur 1368 129 35 1462 548 149 45 652
11 Chennai 318 118 65 371 35 21 28 28
12 Bangalore 314 42 34 322 133 37 18 152
13 Hyderabad 516 70 25 561 639 224 214 649
14 Nagpur 423 194 15 602 - -- -- -
15 Bhubaneshwar 393 28 58 363 84 26 21 89
16 Lucknow 337 76 51 362 32 10 11 31
17 Jaipur 90 43 15 118 143 13 96 60
Total 11484 1190 846 11828 3922 674 670 3978
Source: Answer provided to a question in Parliamen
2
Making Conciliation Effective
C.S. Venkata Ratnam
Conciliation is an extension of the bargaining process in which the parties try to recon-
cile their differences. A third party acting as an intermediary – independent of the two
parties and acting impartially – seeks to bring the disputants to a point where they can
reach agreement. The conciliator has no power of enforcement and does not actively
take part in the settlement process but acts as a broker, bringing people together. The
attitudes of parties have a significant bearing on the effectiveness of conciliation. It is
not uncommon that they resort to dilatory tactics resulting in an endless chain of joint
meetings and conciliation proceedings1.
Conciliation is often seen as an essential first step in the resolution of interest disputes
since compromise could be expected2. In respect of rights disputes, however, the scope
for compromise being limited, conciliation usually has little or no role. The objective of
conciliation in rights disputes should be limited to clarifying the facts and the rights and
obligations of the parties rather than to encourage any party to compromise on his/her
rights. The increasing role of conciliation in rights disputes points to the blurring of the
distinction between disputes over rights and interests.
Conciliation begins when bargaining is deadlocked. It is referred to assisted bargaining

and a peace-making, confidential, consensus building flexible process to reconcile
differences and facilitate agreement. Its success hinges on trust, confidence, credibility
and relationship building by the conciliator.
Conciliation and mediation are third party mechanisms to assist parties to negotiation
during the process of negotiation, particularly when they are deadlocked. Conciliation
and mediation are generally used as synonyms. However, in conciliation the conciliator,
who is a third party, brings the parties together, encourages them to discuss their
differences and assists them in developing their own proposed solutions. In mediation,
the mediator plays a more active role in assisting the parties to find an acceptable
solution, and may even submit his/her own proposals for settlement to the parties. Of
course the parties are free to reject the proposals.
Conciliation is voluntary when parties are free to make of use of it if they wish. It is
compulsory when they are required to participate in the conciliation process. But such
compulsion is only in terms of participation in the process, but not accepting the
proposals, if any, of the conciliator.
The Industrial Disputes Act, 1947 assigns the conciliation machinery the role of mediation
and settlement of industrial disputes. Under the Industrial Disputes Act, 1947 the
appropriate government appoints the conciliation officers (they are not independent
authorities), makes reference of industrial disputes for adjudication, receives and
publishes the awards of the adjudicatory bodies and enforces such awards as also the
settlements entered into bilaterally [Section 2(p),18] or through the efforts of the
conciliation officer [Section 12(3)] or a Board of Conciliation [Section 13(2)]. The
government has the power to prosecute any person who breaches any term or settlement
or an award (Section 29). It is clear that in India conciliation is not voluntary, not
independent, and not autonomous.
For a proper appreciation of the statutory fore of conciliation, as Rao3 asserts, it is
necessary to distinguish between conciliation proceedings from joint meetings: Under
Section 20 of Industrial Disputes Act conciliation proceedings in respect of a public
utility service is deemed to have commenced on the date on which the conciliation
officer receives a notice of strike or lockout. It means that in such cases the matter
stands automatically and directly admitted in conciliation without any intervening
proceeding. Thus, deemed conciliation is an extreme statutory measure applicable only
to public utility services. Where, (a) the undertaking being a public utility service, no
such notice of strike or lock-out has been served; or (b) either party makes a request to
the conciliation officer to intervene; or (c) the dispute relates to a non-public utility service
and one of the parties makes a request for intervention – the conciliation officer does
not straightaway admit the dispute in conciliation, but fixes a date or a joint meeting of
the parties. The concept of joint meeting is not contemplated by the Industrial Disputes
Act, but is implied in the phrase ‘the conciliation officer… may do all such things he
deems fit [Section 12(2)].’ He has absolute discretion to hold ay number of joint meetings,
before formally admitting the dispute in conciliation. Joint meetings are informal and
non-statutory, whereas conciliation proceedings are formal and statutory. A settlement
reached in the course of joint meeting per se is not a settlement arrived at in the course
of conciliation proceedings within the meaning of Section 18(3), notwithstanding the
fact that the conciliation officer is a signatory to it. Such a settlement stands on the
same footing as the one reached at the bipartite level, i.e., under Section 18(1) and is
binding only on the parties thereto. On the other hand, a settlement arrived at in the
course of a formal conciliation proceeding is binding not only on the parties to the dispute,
but also on the whole body o workmen employed in the establishment and those
concerned, in the dispute. Joint meetings provide ample opportunity to the conciliation
officer to gauge the magnitude of the dispute, the extent of variance in rival positions
Making Conciliation Effective 25
and the gravity of the situation and help him in deciding when to initiate formal conciliation
proceedings. The importance of conciliation lies in that once the proceedings commence,
the parties cannot resort to a strike or lockout, while no such prohibition operates during
the phase of joint meetings. Another reason for holding joint meetings is the absence of
a statutory deadline requiring the conciliation officer to send a report to the government,
whereas submission of report within 14 days is mandatory in the case of a conciliation
proceeding under Section 12(6).
INTERNATIONAL LABOUR STANDARDS
International labour standards on dispute settlement leave room to accomodate diverse

situations in different countries. There is no ILO convention which mandates the
establishment of a labour court. The ILO conventions and recommendations present a
wide range of instruments to deal with dispute resolution. The following of the important
conventions which deal with the subject4 :
z The Voluntary Conciliation and Arbitration Recommendation, 1951 (No.92)
focuses on the importance of recourse to voluntary machinery for the resolution
of disputes. The Recommendation calls for voluntary conciliation machinery to
be made available to assist in the prevention and settlement of industrial disputes.
The procedure should be free of charge and expeditious. Where a dispute has
been submitted voluntarily to arbitration, the Recommendation goes on state
that the parties should be encouraged to refrain from strikes and lockouts and
accept the arbitration award.
z In the area of interest issues the Collective Bargaining Convention, 1981 (No.151)
stresses the importance of voluntary dispute settlement procedure. Article
8 of the Labour Relation (Public Service Convention, 1978 (No.151) states that
‘The settlement of disputes arising in connection with the determination of
terms and conditions of employment shall be sought, as may be appropriate
to national conditions, through negotiation between the parties or through
independent and impartial machinery, such as mediation, conciliation and
arbitration, established in such manner as to ensure the confidence of the
parties involved.’
z In the area of rights disputes, the Examination of Grievance Recommendation,
1967 (No.130) provides the following procedures in the event all other efforts to
settle the grievance within the undertaking have failed:
• Procedures provided by collective agreement, such as joint examination
of the case by the employers’ and workers’ organizations concerned or
voluntary arbitration by a person or persons designated with the agreement
of the employer and worker concerned or their respective organizations;
• Conciliation or arbitration by the competent authorities;

• Recourse to a labour court or other judicial authority;
• Any other procedure which may be appropriate under national conditions.
PROBLEMS / ISSUES
The conciliation machinery and conciliation proceedings suffer from the following
problems5 :
z Inadequate Manpower.
z Low Status.
z Poor Infrastructure.
z Politicised polarization among the parties to dispute.
z Lack of trust between and rigid attitudes among the parties to dispute and their
narrow self interests.
z Legalistic orientation of parties to dispute.
z Absence of proper system for grievance redressal within most enterprises.
z Delays in conciliation more due to pressure tactics of parties than heavy work
load on conciliation officers.
z Conciliation system is intertwined with the adjudication system and works
as the ‘invisible stage of adjudication’. The problem became acute with the
Supreme Court severely restricting the discretionary power of the appropriate
government not to refer individual disputes relating to termination6. Since
reference decisions are made after submission of the failure report of the
conciliation officer, conciliation in such cases tends to become a mere
formality.
z Difficulties and usual failure of conciliation in dealing with cases of individual
cases of termination of employment where employers would be usually unwilling
to reconsider their decision and workers and unions reluctant to accept
termination without taking the law take its full course. In such a scenario the
conciliation officers are usually less motivated to make much effort in dealing
with cases of ‘unfair dismissals,’ discharge, termination, etc.
z Multiple roles of conciliators with responsibility for the enforcement of various
other labour laws which are often numerous.
z Political interference.
2ND NATIONAL COMMISSION ON LABOUR ON CONCILIATION
The 2nd National Commission on Labour 7 made the following observations and
recommendations regarding conciliation.
z There is a popular perception that conciliation is not effective in resolving industrial
disputes. This is only partially correct. In 1999-00, 741 out of 783 threatened
strikes were averted (success rate 94.6%). In 2000-01, 622 out of 630 threatened
strikes were averted (success rate 98.7%).
z Conciliation has not been effective in the case of rights disputes, as in the case
of interest disputes. In fact, conciliation has an impressive record in interest
disputes.
z Conciliation machinery is more eager to consider the problems of employers
today.
z Conciliation should be optional on rights issues (dismissals, promotions,
etc.). Parties should have right to go to labour court and labour relations
commissions.
z Conciliation should be compulsory only in the case of industrial disputes related
to disputes like wages, allowances, fringe benefits, etc.
z Conciliation should also be compulsory in the case of strikes and lockouts over
any issue.
z Conciliation officer should be clothed with sufficient authority to enforce
attendance at proceedings of the conciliation.
z The conciliation officer will carry out such directions as may be given by the
Labour Relations Commission in addition to performing their duties as prescribed
under the Law.
z Inspectors should not be appointed as conciliation officers as that may undermine
the efficiency of conciliation officers.
z Individual worker disputes to be referred first to Grievance Redressal Committee
and if they fail to other levels – conciliation, arbitration and adjudication.
z In rights issues parties should have right to go to labour courts/labour relations
commission straight away.
z Collective bargaining plus inbuilt arbitration will result in speedy dispute
resolution.
z Labour courts, lok adalats, labour relations commissions and adjudication
system.
z All India Labour Adjudication Service should be established.

z Creation of autonomous Industrial Relations Commissions at central and state
level with conciliation and adjudication powers.
z Powers of Supreme Court to National Industrial Relations Commission.
ALTERNATIVE MECHANISMS
The Harvard Law School’s negotiation project established four principles which provide
the basis for effective resolution of disputes:
z Focus on problem, not the person
z Focus on interests, not take position
z Multiply options
z Invent mutually agreeable procedures
z Focus on win-win solutions
If parties to a dispute adhere to the above principles disputes can be minimized

and handled at bipartite for a without the need of even a conciliator, arbitrator or
adjudicator.
There is a need for some changes in the present system of conciliation and adjudication
of industrial disputes. Many European labour courts provide for pre-trial hearings to be
held to establish the facts of the case and to provide the parties with an opportunity to
reach a settlement. Conciliation is one of the principal means employed to expedite
matters and reduce the case load of the labour courts by encouragement settlements.
In Germany, conciliation proceedings will be held before the presiding judge of the labour
court with a view to encourage the parties to reach an amicable settlement. This
conciliation process is mandatory. In France, the labour court is bifurcated into a bureau
of judgement and a bureau of conciliation. The members of the labour court rotate from
one bureau to the other. The member of the court may also make proposal for settlement,
moving the process from conciliation to mediation. The parties are free to accept or
reject the proposals. The U.K. has a tripartite statutory, but independent and autonomous
Advisory Conciliation and Arbitration Service (ACAS). When a complaint is presented to
an industrial tribunal, a copy is sent to ACAS. The conciliation officer can contact the
parties and initiate conciliation proceedings. The concerned parties, however, can choose
whether or not to participate in the conciliation proceedings.
In the event that is not possible, besides the mechanism envisaged under the Industrial
Disputes Act, 1947, the following alternatives are available and tested with success in
several parts of India. Some of them – for instance, Lok Adalats – are being increasingly
used to clear the huge backlog of cases and expedite justice:
z Panchayat/community based system of diagnosis and recommendations

z Labour Lok Adalats which take justice to the door step of litigants and provide
expeditious on the spot resolution of disputes
z Permanent negotiating machinery (as in steel industry) whereby the bipartite
machinery established for negotiating agreements also takes up the responsibility
to resolve disputes and monitor implementation
z Encourage voluntary arbitration
z Working together, the ILO sponsored South Asia and Vietnam Project on
Tripartism (SAVPOT) experience that documented case studies of successful
bilateral mechanisms to address issues of corporate performance and dispute
mechanism through consultation, communication and cooperation.
CONCLUSIONS AND RECOMMENDATIONS8
In the context of intensifying global competition, there is a need to change mindset from
legalism to humanism and adversarialism to cooperation in labour management relations.
Voluntarily resolution of disputes should be encouraged because norms which are
established and agreed upon by the parties will be respected better than those imposed
by third party. Effective grievance redressal mechanism at enterprise level, two-way
communication and encouragement to bipartism will go a long way in promoting mutual
trust and cooperation which are conducive to amicable and voluntary resolution of
disputes by the parties themselves. The measures adopted by the State to reform the
dispute resolution process should not restrict the development of collective bargaining.
Moral persuasion through the mechanism of tripartite discussion should be used to
stimulate appropriate behaviours/attitudes in dispute settlement.
The 2nd NCL observed that the conciliation machinery is today more considerate to
product market considerations. Does it mean that they are neglecting labour market
aspects? In West Bengal, for instance, a region-cum-industry wide wage agreement is
signed. Soon thereafter another agreement is signed exempting the operation of the
agreement to certain financially unviable units. Collective agreements in unorganised
sector provide for less than the legal minima. Some unusual (which are becoming
usual now) collective agreements provide for clauses which conflict with certified service
conditions and certain clauses in Industrial Disputes Act. What should be the role of
conciliators who certify such agreements?
When parties agree to aspects that go below legal minima due to certain perception of
ground level realities, should conciliators endorse or certify such agreements? In the
newspaper industry, over 40 per cent of the news paper establishments in West Bengal
and Bihar did not honour the Bachawat award. The Supreme Court ordered that the
minimum wage rates prescribed by the Wage Board must be paid. When the issue
was raised in the parliament, the Parliament reiterated the decision of the Supreme
Court. Still most establishments were not paying and the unions in such enterprises
were hesitating to go on protest for fear that if they press too hard the employers might
close the units which are already unviable and their members may lose whatever
subsistence pay they are getting. In such cases conciliators face moral and ethical
dilemmas.
The following steps will make conciliation more effective:

z Establish a separate, specialized cadre for conciliation/mediation
z Equip the conciliators with proper role, authority commensurate with responsibility,
and infrastructure and other facilities for effective functioning without dependence
on the parties to dispute for physical facilities and other resources required for
undertaking the conciliation/mediation.
z Provide structured, continuous training to update the knowledge and skill base
of conciliators.
z Focus on preventive conciliation and workplace cooperation.
z Conciliation in individual disputes concerning unfair dismissals, termination,
retrenchment, discharge, etc., may be optional. Parties should have the option
to directly approach labour courts to ease the load on and to avoid unnecessary
delays in conciliation.
z There should be time-bound network of conciliation, reference and adjudication.
If the conciliation does not result in a settlement within that time, the matter
will be deemed to have failed in conciliation. After the failure/deemed failure of
conciliation, government will have the prescribed time for deciding whether or
not to make a reference. If the reference is not made within the prescribed time,
the matter will be deemed to have been referred. A time-frame of three months
for each of these two stages appears adequate.
z A time limit of one year should be prescribed for raising industrial disputes and a
time limit of two years for making applications under Section 33 –C (2) of the
Industrial Disputes Act.
z Laws should be amended for recognition of majority unions with exclusive right
of representing workmen and settlements, entered by such union(s), be made
binding on all the workmen in the industry, including those workmen who are not
members of the union.
z The lawyers should be permitted to represent parties before industrial tribunals/
labour courts because restriction on their appearance was leading to
malpractices, like engagement of lawyers by the organizations of workers and
employers as office bearers. Consequent deficiency in legal advice could result

in shortcomings in examination and cross examination of witnesses and failure
of justice.
z An automatic permanent injunction on raising of dispute under Section 33 of the
Industrial Disputes Act encourages the culture of raising disputes at the slightest
provocation. Law should not confer any advantage on those who raise disputes,
as against those who do not. The discretion to grant or refuse injunction under
Section 33 should rest with the tribunal/labour court/conciliator, based on the
merits of each case.
z Special courts could be established to deal with the accumulated backlog of
disputes pending in courts.
z Lok Adalat system could be tried at the state and the district levels to deal with
individual disputes.
z The Government should take urgent steps to enact a law providing for Labour
Relations Commissions at the Central and State levels for interest and individual
disputes, except termination disputes. The commissions should have one judicial
and two non-judicial members each. The Labour Relations Commissions should
perform the function of certification of bargaining agents and bargaining councils,
determination of the level at which collective bargaining shall be held, mediation
of disputes if desired by disputant parties, and adjudication of disputes not settled
by any of the above methods. The National Labour Relations Commissions is to
have powers exercisable by the Supreme Court of India under clause 2 o article
32 of the Constitution of India in so far as labour matters are concerned. A
regular cadre of labour conciliators, mediators and adjudicators should be drawn
from experienced persons in related field to man the Labour Relations
Commissions. It is desirable to include employers’ and workers’ representative
in dispute settlement machinery.
z The government’s role in dispute resolution should be limited to setting up an
institutional framework rather than intervening directly in the dispute resolution
process. The government should play no part in referring cases to labour
courts.
z There is a need for a data base to support policy formulation and reform in
dispute settlement area.
REFERENCES
1. E. M. Rao (2001), ‘Globalization and Dispute Settlement Process’, The Indian Journal of Labour
Economics, Vol. 44(3). Pp. 459-474.
2. The National Commission on Labour (1969; 323) observed, ‘conciliation is looked upon very often
by the parties as merely a hurdle to be crossed for reaching the next stage.’
3. E. M. Rao (2001). Pp.460-1.
4. Shauna Olney (1997), ‘European Labour Court Experiences’, in A. Sivananthiran (1997), ‘Labour
Adjudication in India’, New Delhi: ILO-SAAT, pp. 112-113.
5. Cf. Saini, Debi S. (1997), ‘Labour Court Administration in India’, in A. Sivananthiran, ‘Labour
Adjudication in India’, New Delhi: ILO-SAAT.
6. Ram Avtar Sharma & Others v. The State of Haryana (1985 Lab.I.C.1001).
7. Government of India (2002), ‘Report of the 2nd National Commission on Labour’, New Delhi:
Ministry of Labour.
8. This section draws from the recommendations of the 1st and 2nd National Commissions on
Labour as well as the conclusions of the High-level tripartite roundtable of experts on labour court
administration in India conducted by the International Labour Organisation Delhi office at New Delhi
during 30-31 May 1996.
3
Role of Conciliation Officers
in the Resolution of
Industrial Disputes
Subesh K. Das1
Cooperation between management and labor is essential for success of any firm.
Accordingly labor policy prescribes measures to secure and sustain cooperation by
limiting the chances of conflict between management and union. In spite of such policies
in favor of cooperation, the workers and employers are often found in conflict situations,
which is not uncommon even in firms known for good labor-management relations. In
order to maintain cooperation, whenever a dispute arises or is imminent, it is necessary
to make sincere efforts to resolve it amicably and without any delay. In general,
management and labor try to resolve their differences bilaterally. If it fails, two courses
of actions are open to them. One is to resort to direct action –normally strike or lockout
or other forms of protests. The other option is to invite a third party to assist them to
continue their resolution of disputes or to give them an award. Strikes and lockouts not
only affect the parties in conflicts, but also the community at large and the nation as a
whole. It is thus the latter course of action that is often resorted to.
The tripartite techniques of dispute resolution are of three types based on the nature of
involvement of the third party– fact-finding, conciliation, and adjudication/ arbitration. Of
the three, conciliation is a more democratic technique as the parties to the dispute
retain their freedom and right to determine the manner in which their dispute should be
settled. In conciliation, the third party or the conciliator helps negotiations but there is no
compulsion on the part of the parties to accept the solution of the third party. The
conciliator tries to reconcile the differences by offering suggestions and alternate
proposals, but he does not impose his decisions on the parties. The third party acts as
a catalyst, whose fresh views, suggestions, proposals, and knowledge from similar
cases, and the dignity of his office facilitate agreements between the disputants. He
has no power of decisions. He uses his expertise of diplomacy and mental acuteness
as contrasted with judicial decision-making in adjudication and arbitration. His initiative
and ability to a large extent influence conciliation outcomes. In spite important roles
conciliators in the conciliation process, few studies have focused on their roles and
how they can be more effective. In the following pages we discuss the role of conciliator
in resolution of industrial disputes and provide an analysis of their key strategies.
The objective is not only to resolve disputes, but also to resolve in a way that is
sustainable.
INDUSTRIAL DISPUTES, CONCILIATION, AND CONCILIATORS:
Industrial dispute arise because of differences between the employer and the workman
or a body of workmen connected with the employment or non-employment or the terms
of employment or the conditions of labor, of any person2. Section 2(k) of the Act gives a
broad definition of ‘industrial dispute’, but most often it refers to disputes between
employers and their employees3. Industrial disputes involving employers and employees
can be classified into two groups –individual disputes and collective disputes. The
collective disputes are connected with terms of employment and the condition of labor
in general involves economic interests of both management and labor. They involve
groups of workers and lend themselves a good amount of negotiations and assisted
bargaining. In contrast to such collective disputes, the disputes connected with non-
employment usually involve a disciplinary action, or incapacity of employer to employ
surplus labor, or unwillingness of the employer to continue employment of a workman
for reasons like habitual absence, low productivity. The Industrial Disputes Act 1947
has provision for conciliation of such disputes and adjudication is seen as a consequential
process. Section 2A of the Act has further strengthened the position by declaring all
such individual disputes as industrial disputes and giving individual workers the legal
authority to submit termination disputes for conciliation.
The Industrial Disputes Act 1947 provides the legal framework for the conciliation of
industrial disputes. It provides for conciliation by the conciliation officers and Boards of
Conciliation. Of the two, the use of standing conciliation machinery consisting of the
conciliation officers appointed by the appropriate governments is the most common
method of conciliation. This paper focuses on the roles of the conciliation officers in
resolution of industrial disputes. The issues are discussed in terms of conciliation
machinery, duties and powers of conciliation officers, conciliation procedure, settlement
of disputes, and other related matters. The discussion includes legal aspects of
conciliation and the techniques that the conciliators can apply in resolving industrial
disputes. The conciliation officers need to know the various provisions in the Act relating
to conciliation, their amendments by central and state government depending on the
appropriate government he represents and interpretation by the Supreme Court and the
High Courts4. Further, he must also know the legal provisions in other acts that apply to
subject matters of specific disputes.
Role of Conciliation Officers in the Resolution of Industrial Disputes 35
Conciliation is a profession, but unlike other professions the conciliators are drawn
from different fields and professions. A conciliator is not a person educated and trained
in a specialized school of mediation. He learns the art of conciliation by experience and
apprenticeship once he is drafted into the profession either by accident or by appointment.
He has no tools and no rules. His professional equipment consists of subtle, formless
personal elements whose identification is a difficult task. In Indian context, conciliators
can be classified in to two types: (1) the professional conciliators, and (2) the distinguished
outsiders. The professional conciliators are appointed by the State, while in the case of
the distinguished outsiders the parties in disputes approach them because of their
reputation and qualities or the office they hold. Usually the outsiders are political
personalities –a minister, a member of legislative assembly, an officials in general
administration like the district magistrates or sub-divisional officers, or any other person
with a position to reckon with5. More often than not, such mediators act more as
arbitrators than as the mediators or at least they use a mix of mediation and arbitration.
The discussions in this paper focus on the roles of the professional conciliators appointed
by the governments.
Conciliation is a process of diplomatic efforts by a neutral third party. The conciliation

officers typically appointed by the government to intervene in industrial disputes and
assist the workmen and management through persuasion, advice, and alternate
proposals, etc, to resolve the disputes and arrive at a voluntary settlement. The conciliation
officers are appointed under section 4(1) of the act and section 4(2) defines their
jurisdiction. In India, the conciliation system is quasi compulsory. Seeking conciliation is
compulsory on the part of the workmen and management in a public utility service if the
dispute results in a strike or lockout or when the parties intend to resort to direct action.
It is voluntary in other situations. Section 12(1) of the act casts a compulsory duty on a
conciliation officer to intervene in the disputes related to public utility services when he
receives a notice for strike or lockout under Section 22. Further, conciliation is of two
types- disputes conciliation and preventive conciliation. Besides intervening in the existing
industrial disputes, the conciliation officers are also expected to apprehend the disputes
and promote fair and amicable settlements.
The very purpose of the act, as the preamble states, is to promote settlement of industrial
disputes. The task of conciliation machinery is to intervene in the disputes and promote
fair and amicable settlements. It is impossible to lay down guidelines that can be used
to resolve each and every problem in disputes. In the following pages, we present a
brief guideline indicating broad principles of both law and practice. This is in no way the
complete picture. The conciliation officer should lay special stress on collecting of as
much information and data as possible in respect of the disputes as each dispute has
special characteristics. Disputes differ depending on the issues involved, differences in
the principles of law, and prevailing practices. Wage disputes are different from dismissal/
termination disputes. The conciliator has to adopt different strategies in different types
of disputes, but the core is always reduction of gaps between management and labor.
The discussion starts with a brief guideline on the issues that the conciliation officer
should examine before initiating the conciliation process and then it is followed by
discussion on legal and practical issues in resolution of different types of disputes.
There are more individual disputes than collective disputes. Collective disputes are
less in number, but they are important as they have greater influence in shaping firms’
industrial relations. There are differences across states and between the state and
central conciliation machineries in the shares of different types of disputes.
STARTING THE CONCILIATION PROCESS
The Industrial Disputes Act 1947 does not lay down the conciliation procedure. Instead
it requires the appropriate governments to prescribe the various manners to be adopted
by the conciliation officers. Sections 11, 12, and 13 of the Act and the rules made there
under guide the conciliation process. The procedure followed depends on the types of
disputes and whether compulsory or discretionary duties cast upon him by Section
12(1). If the conciliation officer receives a notice of a strike/ lockout in a public utility
service, he has to forthwith arrange interview of both the employer and the workmen
and try to bring about a settlement. If there is no such notice, but he apprehends an
industrial dispute and considers it necessary to intervene he may initiate the conciliation
process. In case of non-public utility services if the conciliation officer receives an
application or information about a dispute or apprehends a dispute in a non-public utility
service and he considers it necessary to intervene he may initiate the conciliation
process. In both cases he should give formal intimation in writing to the parties concerned
declaring his intention to commence the conciliation6. After entering the dispute situation
in either case, the conciliation officer, according to Section 12(2) should without delay
investigate all matters relating to the disputes and do all such things as he thinks
necessary. His starting point is the picking up from out of the multitudes of representation
received the matters, which should be taken up for conciliation. In doing this he should
look into certain essential preliminary points of law discussed below.
1. Whether the conciliation officer represents the appropriate government?
Section 2(a) of the Act defines the term ‘appropriate government and presents a list of
some selected industries for which the central government is the appropriate government.
The central amendments of the Act have added to the list and the issue has been
contested in the Courts on many occasions. In the Air India case the Supreme Court
declared the central government as appropriate government in respect of central public
sector undertakings7. Subsequently, the central government in 1998 delegated all the
powers exercisable under the Act to the state government in respect of 129 central
public sector undertakings and their subsidiaries and corporations subject to the condition
that the central government shall exercise all the powers under the act and rules as and
when it considers it necessary to do so8 . Finally, the Supreme Court in the Steel Authority
case restored the matter to its original condition as existed before the AIR India case9.
2. Whether the establishment is an industry?
Section 2(j) and 2(ka) define industry and industrial establishment. According to this
industry means any business, trade, undertaking, manufacture, or calling of employers
and includes any calling service, employment, handicraft or industrial occupation.
Industrial undertaking means any an establishment or undertaking in which any industry
is carried on. The 1984 amendment made new insertion in the definition of industrial
establishment. Questions on the issue should be judged based on legal interpretation in
court cases. There are organizations that are not industrial establishments. (example:
some hospitals and charitable organizations) If activities in an establishment are partly
industry in nature and partly not, then if the part having industry nature is sever able from
other parts it is a separate industrial establishment; and if it is not so separable, then the
whole undertaking is an industrial establishment.
3. Whether the disputes are of workmen?
Section 2(s) defines a ‘workman’ as any person employed in an industry to do any

manual, unskilled, skilled, technical, operational, clerical, or supervisory work for
reward. Further, in relation to an industrial dispute ‘workman’ includes any such person
who has been dismissed, discharged, or retrenched in connection with or as a
consequence of the dispute or whose dismissal, discharge, or retrenchment has led to
the dispute. Being an industrial establishment does not mean that all its employees are
workmen under the Act. (Example: teachers are not workmen though educational
institutions are industry.
4. Whether there is employer-employee relationship?
Industrial dispute mean 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 condition of labor of any person. (Section 2k) Industrial disputes can take
different forms, but most often the disputes are concerning employer-employee
relations. The conciliation officer must examine whether the employer-employee
relation exists or existed in the past.
5. Whether a competent union/ worker has raised the dispute?
A registered trade union or a federation of trade union to which the union is affiliated can
represent workman in a dispute. It is not necessary that the worker should be a member
of the union; it is enough if the union represents other workers in the firm or industry.
(Section 36(1)) Where the cause of the workman has been espoused by a union, which
has absolutely nothing to do with the establishment or industry as the case may be from
which the workman comes, then it is not an industrial dispute. Registration is sufficient
to enable a trade union to represent the workers; it is not necessary that the trade union
should be recognized. When an employer discharges, dismisses, retrenches, or
otherwise terminates a workman, the resulting dispute is an industrial dispute even if no
other workman or union is a party to the dispute and an individual worker can raise such
disputes. (Section 2A)
6. Whether conciliation can be done in respect of the subject matter?
There is no restriction on the subject matters that can be considered as industrial disputes.
However, the conciliation officers must be careful and should not take up issues or
resolve them in such a way that crosses the statutory limits of any labor legislation. For
example, if the minimum rates of wages have been notified for an employment under
the Minimum Wages Act 1948, the conciliation officer can take up disputes for payment
of wages higher than minimum wages, but he cannot take up issues for payment of
wages lower than the notified minimum wages. Similarly if an issue is clearly spelt out
in specific labor legislation and the legal provision provides for a remedy, then such an
issue cannot be taken up for conciliation. For example, non-payment of gratuity cannot
be a matter for conciliation. In respect of Bonus Act the payment of bonus between
statutory limits can be taken up for conciliation, but cannot be done for payments beyond
those limits. The conciliation officers should not take up issues for conciliation that are
covered by a subsisting award or agreement. Finally, they should not sign a bipartite
agreement as a witness.
The scrutiny of the above points has to be made in the light of provisions of law and
court decisions. As discussed, the requirement of workman’s first raising a demand
with the employer cannot be insisted upon. The Supreme Court observed that it is open
to an industrial tribunal to examine the question whether there was any material before
the appropriate government by which it took the decision of referring the dispute to
adjudication. In view of this position of law, although a written demand of the union or the
workmen is not a sine qua non, the government has to be satisfied before reference u/
s. 10, that there exists an industrial dispute as defined in the Act. Therefore, to enable
the government to be satisfied, the conciliation officers should conduct thorough enquiry
to ascertain whether what has been brought to them is an industrial dispute and the
findings should be documented in his report to the government. This would avoid any
subsequent complications. The Supreme Court’s stand on the issue has changed over
time. In practice, the conciliation officers insist on a written demand excepting in cases
where there is apprehension of a serious trouble.
DISCHARGE AND DISMISSAL
Most disputes submitted in the regional offices are ‘termination disputes’, which consists
of disputes arising from the discharge, dismissal, retrenchment, or otherwise termination,
and the demands are for reinstatement of the terminated workmen. Until 1965, an
individual workman had no right to raise any such dispute by himself. With the introduction
of Section 2-A of the Act, any workman whose services are terminated can raise an
industrial dispute irrespective of whether a trade union for fellow workmen sponsor it or
not. Most termination disputes originate in small firms and most of these are filed by
individual workers u/s 2-A of the Act. The disputes arising out of the non-employment of
a workman need to be adjudicated instead of mediated, as they involve a process of
determining whether the management was right or wrong in taking the decision. However,
the Act provides for conciliation of such disputes. Most of these disputes end up in
failures and reference to industrial tribunal. The conciliation officers need to know the
way industrial tribunals may handle the disputes in the context of legal provisions and
Courts interpretation.
Table 1: Settlement of Disputes
All India disputes West Bengal

leading to work Disputes
stoppages 200110 disposed 2001
Settled 12(4) submitted
Wages and allowances 34.7 5.54 5.68

Bonus 6.5 1.07 6.06
Personnel (dismissal, discharge etc) 11.0 3.84 41.67
Retrenchment 1.3 2.68 12.88
Others 46.5 33.71
Disposed as parties did not pursue 45.26
Total no of disputes handled 674 4873 4873
Disputes disposed 1120 264
(Source: Labor in West Bengal 2001, Indian Labor Year Book 2002 and 2003)
Prior to the insertion of Section 2-A, the Supreme Court limited the scope for an industrial
tribunal to interfere with the domestic proceedings to the following circumstances11 :
when there is want of good faith;
when there is victimisation or unfair labour practice;
when the management is guilty of basic error of a principle of natural justice, and
when on the materials the finding is completely baseless or perverse.
The law evolved was that the jurisdiction of an industrial tribunal is not appellate nature
and that the tribunal cannot substitute its own judgment for that of the management.
Later on ILO recommendation, that a worker aggrieved by the termination of his
employment should be entitled to appeal against the termination to a neutral body
empowered to give appropriate relief, led to introduction of Section 2-A. This made a
difference with the past on the question of relief but the law with regard to the
circumstances in which the findings of the domestic enquiry could be interfered with
continued to be the same. The conciliation officer while investigating a case of dismissal
needs to examine the following important documents:
certified standing orders, or contract of service or the appointment letters;
charge-sheet and its reply;
proceedings of domestic enquiry;
findings of the enquiry officer;
appeal, if any, and its disposal; and
final dismissal letter.
Investigation in individual disputes constitutes a major part of the conciliator’s daily task.
It is difficult as there are large numbers of such disputes, and sometimes the employers
are not willing to share these documents. The conciliation officers may, if necessary,
invoke the power conferred on them u/s. 11(4) to enforce production of these documents,
but most often there is not much success. The conciliation officer should try to convince
the management about the need for such documents. There is practically no alternative
to the carrying out of the daily grind of routine enquiries if one wishes to get to the real
picture of a problem and find out the truth. The most important is the enquiry officers’
report, which could easily prove or disprove the case against an accused workman. If
there is no settlement, a failure report u/s 12(4) should be submitted forthwith. Most
dismissal cases end in failures. This is why a special importance is attached to the
12(4) reports, a decision on whether or not to refer the disputes to adjudication would
depend much on whether during investigation the conciliation officers have made it
certain that all relevant facts argue a copper-bottom case and whether the case justify
recommendation for a reference. Particular care should be taken in cases where an
application u/s. 33 has been made. The application u/s 33 should be disposed before
sending the failure report. The decision u/s. 33 must be accompanied by reasons
therefore and must be based on rational analysis of the documents that are placed
before him.
Many legal issues complicate the dismissal cases. One such issue is the implication of
the judgement of a criminal court, on the disciplinary proceedings against a worker. The
Supreme Court allowed dismissal on the basis of enquiry proceedings pending disposal
of a workman’s appeal to a higher court against conviction in the lower court in a charge
of theft12 . This is because the criminal court requires a high standard of judicial review
and such a standard of proof is not required in any disciplinary proceedings. Another
important issue before the tribunal is whether adducing of further evidence is permissible.
Section 11-A of the Act, lays down that in any proceeding under the Section the Labour
Court, Tribunal or National Tribunal, as the case may be, shall rely only on the materials
on record and shall not take any fresh evidence”. In spite of this proviso there has been
a number of Supreme Court decisions as to the situations where the parties can adduce
further evidence to the materials already on record13. As most dismissal cases end in
failures the conciliation officers must ensure that they have covered all the important
legal aspects. They must examine whether the worker was given opportunity for self
defence and whether the principle of natural justice was followed, whether the worker
replied, whether domestic enquiry was held, what was the finding, whether the
management relied on the results of domestic enquiry. The Supreme Court held that,
in case of dismissal of service, the management is required to issue a second
show cause notice along with a copy of the findings of the enquiry officer before
dismissal14 .
Discharge and dismissals are two hermetically sealed concepts and the expressions
should not be loosely used, as there are material differences in their meanings in law.
Termination of service without charge sheet and without providing opportunity for defence
is clearly a violation of the principle of natural justice allowing for intervention under the
Act, but the position becomes different where the Certified Standing Orders under the
Industrial Employment (Standing Orders) Act, 1946, provide for automatic termination
of service15 . The Court observes that even if there is provision for automatic termination
of service in the standing order, the opportunity of self-defence must be given in all
cases. A particular type of cases of discharge is the automatic termination of service
for the probationers. Even if the terms of appointment have a clause to terminate the
service of a probationer without notice and without assigning any reason, if the validity
of such termination is challenged, the tribunal can enquire whether the termination
affected by the management is in the bonafide exercise of its power as conferred by the
contract. By virtue of Supreme Court decision, and by virtue of definition of the term
“retrenchment” an automatic termination of service for, say absence without notice
shall also to be treated as a case of retrenchment. It is open to the industrial tribunal to
consider whether the termination amounts to victimisation of the employee or an unfair
labour practice or is capricious or unreasonable. Further, in all cases, the law of the
land i.e. compliance of provisions u/s 25F of the Act must prevail over the contract of
employment and the industrial tribunal can give appropriate relief to the employees16 .
Wherever conditions precedent u/s. 25F are not complied with the retrenchment will be
illegal and reinstatement is likely to follow in adjudication.
LAY-OFF, RETRENCHMENT, AND CLOSURE:
The three types of disputes -lay-off, retrenchment, and closure are discussed together
because they all involve disruption of continuous service and loss of employment for
the workers with no alleged fault on their part. The terms are defined in section 2 and the
relevant legal provisions are included in Chapter V-A of the Act. In disputes relating to
retrenchment and lay-off, an important issue includes the meanings of continuous service
for one year. Continuous service of one year for the purposes of Chapter V-A means
actual service of 240 days. The condition of full twelve months’ employment is
unwarranted in view of the amended provisions of section 25B17. The employer is
expected to maintain attendance of the workers. If he fails to produce the attendance
register to controvert the workman’s claim as to number of days he has worked the
claim of the workman should be considered as correct18.
The concept with regard to retrenchment centres round the preposition of shedding
workmen found surplus to employers’ requirements. The Supreme Court has summed
up the law in this connection, which in brief is discussed below19 :
(1) The management can retrench its employees only for proper reasons; it must
not be actuated by any motive of victimization or any unfair labour practice.
(2) It is for the management to decide the strength of its labour force, and the num-
ber of workmen required to carry out work efficiently in industrial establishments.
(3) If the number of employees exceeds the reasonable and justified needs of the
undertaking, it is open to the management to retrench excess workers.
(4) Workmen may become surplus because of rationalization or on the ground of
economy, or because of other industrial or trade reasons, and
(5) Normally, the employer’s right to effect retrenchment cannot be challenged, but
tribunal can examine whether the impugned retrenchment is justified.
The concept of retrenchment has been given wide interpretation by the Supreme Court
to include all termination cases except those specifically excluded by the definition. The
striking off the name of a workman from the roll is termination of his service and it is
retrenchment within the meaning of Section 2(oo) of the Act20 . Termination due to efflux
of contractual period amounts to retrenchment and it is not defence to say that the
termination was not an act of the employer21 . Discharge of a workman for his failure to
pass a test that would enable him to get confirmed is a case of retrenchment22 .
Reinstatement with full back wages is the normal rule where termination of service is in
contravention of Section 25F of the Act23 . Further, the employers are expected to follow
the ‘last come first go principle’. (Section 25 G). Departure from the principle is allowed
only on valid and justifiable ground, which the employer must justify to be exonerated
from the said principle24 . A case of retrenchment in a particular situation could attract
the provisions Section 33. If a dispute over conversion of temporary status of a worker
into permanent status is pending adjudication, his retrenchment without prior permission
of the tribunal would amount to contravention of Section 33(I)(a)25.
Neither the definition clause nor any other section of the I.D. Act confers power on the
employer to lay-off a workman. Employers’ power is given either by the Certified Standing
Orders or by the contract of service. The cases of lay-off where the employer has the
requisite workforce and the necessary powers are covered under Chapter V-A.
Establishments employing less than 50 workmen on an average do not have standing
Orders and if in such a case the contract of service does not confer the right to lay-off,
the workmen would originally and generally be entitled to full wages. But in a reference
U/s. 10(1) it is open to a Tribunal to award a lesser sum depending on the justifiability of
the lay-off26 .
In case of closure of an industrial establishment, where a closure is real and bonafide,

there is no scope for intervention by the conciliation officer except to enforce the
obligations under the Act. Closure is a management’s prerogative, but they must satisfy
the legal requirements. However, in the event of an industrial dispute relating to closure,
it is always open to the conciliation officers to investigate and ascertain the fact as to
whether the closure is real and whether the management has complied with all the
statutory obligations. In some states, the government wants the conciliation officers to
investigate the cases of closure27 . Once the fact of closure is established, there is no
scope for going into the question of employer’s motive, and closure cannot give rise to
an industrial dispute28 .
STRIKES AND LOCKOUTS
It is mandatory on the part of a conciliation officer to hold conciliation when he receives

a notice of strike or lockout in a public utility service. In other cases, as spelt out in
Section 12(1) he has discretion to hold conciliation or not. As a matter of state policy,
the conciliation officers are expected to give priority in all cases of strikes and lockouts
and submit their reports without any delay. The handling of the cases of strikes, lockouts
or strikes followed by lockouts is extremely complex and involves many sensitive issues.
The conciliation officer has to remain composed and collected even in the midst of
excited vibes. He will have to remain unruffled when large number of people gather and
try to come to the meeting. One has to consider the case of the workmen sympathetically
and ignore their occasional broadsides made in an angry mood. There may be requests
to issue instructions to withdraw the lockout or strike. The conciliation officer, should
not, as a rule, issue such advices unless he gets assurance from management/union
through informal talks that the requests are likely to be complied with. Strikes and lockouts
are weapons of collective bargaining and are resorted to on the basis of the parties’ own
strength. From experience, a conciliation officer will know that the right moment for
ending the deadlock will arrive at an appropriate time. He will have to continue the dialogue
and patiently wait to allow time for the steam to let off.
Section 24 stipulates the circumstances when a strike or a lockout may be illegal. These
circumstances apart, a strike resorted to in violation of an express agreement that no
strike will be called without giving a specified period of notice has also been declared
illegal and an offence punishable under Section 26 of the Act29. What matters most
urgent in conciliation on strikes and lockouts is the sorting out of the issues involved
through protracted negotiation. The legality and justifiability of strikes and lockouts are
matters of court decisions and be better left out from the discussions in conciliation
meetings. Discussion of legality may aggravate the situation and can be detrimental for
resolution of industrial disputes. Officers are, however, expected to make themselves
at home about the various court rulings on legality and justifiability of strikes and lockouts.
A strike, which is illegal, cannot be justified. The two conclusions that a strike is illegal
and at the same time justified cannot co-exist30. The appropriate Govt. has been
empowered u/s 10(3) to prohibit the continuance of a strike or a lockout where an
industrial dispute has been referred for adjudication. In recommending adjudication and
prohibition for continuation of strike a conciliation officer must ensure that all the issues
involved in the dispute as a whole are recommended for reference to adjudication because
if an issue is not included in the reference, the parties will have the right to continue the
strike or lockout31 . The failure report must be framed with the issues whether strike or
lockout is justified and what relief if any the workers are entitled to.
WAGES AND OTHER ECONOMIC DEMANDS
The determination of wages and other conditions of work are often major sources of
conflict between management and unions. These issues are generally resolved through
collective bargaining. It is ‘collective’ action because employees associate together,
normally in trade unions to bargain with their employers. The process is called bargaining,
suggesting haggling and/or negotiating in which each side put pressure on the other.
The two extreme forms of pressures that parties apply are threats of strike and lockout.
Conciliation is an extension of collective bargaining, when the parties bargain in presence
of the conciliators. Negotiations between the two parties take place at different levels.
Some times they cover all firms in an industry, sometimes they cover a group of firms in
a region or locality, and some times they only cover individual firms32. Some industry-
wide agreements cover only principal wage issues, while other related issues like fringe
benefits, productivity related wages are discussed and resolved at the plant level. In
negotiating wages and other benefits, the conciliation officers must be careful that the
issues in disputes are not covered in the industry wide agreements, minimum wage
notifications, government determined wages, or specific provisions in labour laws. In
establishments like municipalities and in state electric supply undertakings, the
government in general ensures uniform pay scales for their employees. There is thus a
vast area of wage disputes where the field officers have practically nothing to do except
to see that the terms of industry-wise agreements are followed and resolve the disputes
that come up at the implementation stage.
Disputes on wages include many specific issues like revision of wage scales, fitment of
wage to the new scales under long-term agreements, fixation of DA neutralization rates,
and its adjustments. As to design and modification of wage scales and DA fixation, the
various industry-wide agreements and agreements of reputed firms are the foremost
guide to the conciliation officers. Conciliation in small firms is not as formal as in large
firms and there are wide variations across firms. Even if there is an industry-wide
agreement for a group of small firms, in reality it is hard to expect that the agreed rates
will be adopted or implemented in all firms within reasonable limits. Some firms even
with ability to pay may continue to pay wages way below the industry rates; while others
may not be in a position to pay. Judging the real positions and resolving the issues
within the legal parameters in such firms becomes extremely difficult. There is nothing
unusual in workmen’s agitating for better service conditions and management trying to
keep low wages. The conciliation officers must learn to bear the rough and tumble of
the industrial relations problems manifested through the eternal conflict of interest between
the parties. Settlement of wage disputes is a matter of hard bargaining between the
parties, and the contribution of a conciliation officer in this regard is a matter of individual
technique. He may, for example, play a very useful role as a channel of communication
between the parties who do not see eye to eye on many issues.
In India, there are wide ranges of employments where wage rates are fixed and revised
under the Minimum Wages Act, 1948. And to the extent these rates are implemented by
the employers, conciliation officers are relieved of handling wage disputes. There are,
though, employments like bidi and agriculture where workmen agitate for realizing the
minimum rates. The conciliation officers must not sign and thus make the state a party
to any agreement stipulating rates less than the statutory minimum. Their role is to
persuade the employers to abide by the law and take up enforcement responsibility
when required. Further, the workmen employed in bidi, motor transport, plantations,
sales promotion and contractor firms have many of their service conditions fixed by
separate pieces of legislations. The conciliation officers must not sign any agreement
providing for service conditions below the statutory level. A critical issue is wages of the
contractors’ workmen. Sometimes their wages are part of the general wage agreements
and sometimes they are negotiated and settled separately with the help of conciliation
machinery on a long-term basis. The conciliation officer has to ensure that the
agreements do not violate the principle of equal wage for equal work. Wage rates in
construction of roads bridges, etc. fixed under the Minimum Wages Act, 1948, apply
equally to the contractors’ workmen employed in a factory in sundry construction and
erection jobs and such wages are often taken as guidelines in many occasions. The
existence of industry wide agreements and minimum wage legislations have
substantially reduced the workload of conciliation officers with regard to wage and related
disputes.
A special issue in economic demands is the bonus issue, as the conciliation officers
are inspectors under the Payment of Bonus Act 1965. The conciliation officers should
use their statutory powers for scrutiny of registers and other legal documents to get
required information. In all cases of communication on bonus issues the Conciliation
Officers should act in the dual capacity as conciliation officer under the I.D. Act and as
inspector under the Payment of Bonus Act and should write both the designations in the
correspondences. Bonus disputes should be examined with reference to the
provisions of the Payment of Bonus Act, 1965 read with the Supreme Court’s decisions
on customary and contractual bonus.
MANAGEMENT’S CHARTER OF DEMAND:
Traditionally it is the union who submits charter of demands on wages and other issues
and the management offers its proposal in response to the demand. Management issues
come up as they offer counter proposal in response to workmen’s demand. Apart form
this recent trend shows that management in many firms are taking initiative to raise
their issues in the form of charter of demand or issues notices u/s 9 that prompts the
union to raise an industrial dispute before the conciliation officer. Whatever be the way
the issues appear these disputes are similar in many ways. Unions generally oppose
these demands stating that the changes if effected will curtail workmen’s existing rights
or benefits. Section 9A of the Industrial Disputes Act 1947 requires that no employer
who proposes to effect any change in the conditions of service applicable to any workman
in respect of any matter specified in the Fourth schedule shall effect the changes without
giving a twenty one day’s notice to the workman. This means that the workman or the
representing union get twenty day’s time to raise an industrial dispute before the
conciliation officer. Once the conciliation proceeding starts on the matter there are
restrictions in changing the conditions of service. The Section 33 of the Act provides
that during the pendency of any conciliation proceeding before a conciliation officer in
regard to any matter connected with the dispute the employer shall not alter the conditions
of service of any workman to the prejudice of the workman concerned. Disputes arise
on requirement of the notice and whether it changes the conditions of service33. The
notice is required only if the change is likely to affect the workman prejudicially. It is not
required when the proposal has no effect on the changes in service conditions or when
the worker has option to accept the changes or continue under existing conditions.
One of the management issues is introduction or modification of ‘management right

clause’. In general collective agreements in the past on various issues like seniority, job
description, promotion rules, transfer rules etc limited the amount of management
discretion at the workplace. In order to limit union intervention in management issues,
management in some firms have started to introduce management right clause in the
collective agreements. Some agreements have simple and general statement such as,
‘the supervision, management, and control of the firm’s business are exclusively
management functions’. In other cases they are more detailed and include specific
clauses on issues like discipline, promotion, transfer, production schedules etc34. Other
management issues appear in agreement clauses on modernization, technology up-
gradation, computerization, manpower rationalization, capacity utilization, redeployment,
manning, productivity improvement, quality improvement, skill development, recruitment,
and training35. Such clauses are now common in many agreements particularly in firms
that went through major organizational restructuring. The general focus of the changes
in management demand has been on increase of productivity and flexibility.
The conciliation officers have to adopt the same tactics and techniques as used in
disputes raised by the unions, however, there are some additional issues. Additional
skills and tactics are needed because there are additional problems with two sets of
demands from two different sources. A problem in the initial discussions is whose
issues to be discussed first. Management insists that their issues should be discussed
first while unions oppose it and demands that their issues on wages and others should
be discussed first. In general listing of the issues of both parties, linking them in bunches
of related issues, and identifying issues common for both parties may keep the ball
rolling. Some issues may be such that both workers and management can gain from
them. No issue can lead to perfectly win-win solution, but both parties can gain from it
and one party’s gain is not equal to other party’s loss. Examples of such issues include
increase in productivity with increase in wages or productivity-linked wages. All issues
relating to productivity increase involve extensive information sharing and sometimes
engagement of experts for a detailed study. Knowledge of different types of such schemes
is extremely important as otherwise the conciliation officer may find it difficult even to
understand the discussion between management and unions36.
SETTLEMENTS, FAILURES AND SUBMISSION OF REPORTS:
The term ‘settlement’ as defined under the Act includes both tripartite and bipartite agree-
ments. Section 2(p) states that “settlement means a settlement arrived at in the course
of conciliation proceedings and includes a written agreement between the employer
and workmen arrived at otherwise - where such agreement has been signed by the
parties - and a copy thereof has been sent to an officer authorized in this behalf by the
appropriate government and the conciliation officer.” This means that the parties to the
settlement may negotiate an agreement bilaterally and send copies of the settlement to
the appropriate government and conciliation officer. A settlement arrived at in the course
of the conciliation proceedings is, however, more wide and binding than an agreement
registered with the conciliation officer. A bipartite settlement is binding on the parties to
the agreement only, whereas a settlement arrived at in the course of a conciliation
proceedings is binding on all parties to the industrial disputes to which the disputes
relate. (60) A settlement comes into operation on the dates agreed upon by the parties,
and if no date is agreed upon the date when the agreement is signed as provided under
section 19(1) of the Act. It remains binding on the parties for such period as is agreed
upon by the parties and if no such date is mentioned up to a period of six months from
the date it is signed. (Section 19(2)) In either situation, the settlement remains binding
on the parties until the expiry of two months from the date on which a notice in writing to
terminate the settlement is given by a party to the other party as per sections 19(6) and
19(7) of the Act.
Drafting of settlement requires special skill, but it is not very difficult to master. Previous
agreements in the same establishments and other similar firms are useful guides. After
a settlement is arrived at, it is necessary to ensure that the duly authorized representatives
of the parties sign the agreements. In case of any doubt about the persons claiming
authority of the employer may be asked to produce such authority in writing from the
Managing Director or a senior official as the case may be. Similarly, the Rules framed
under the Act should be strictly applied to the representatives signing on behalf of the
union/workmen37. An agreement signed by the office bearers of a trade union unless
authorized either by the union’s rules or constitution, or by a resolution of the executive
committee thereof is not a valid settlement, and is not binding upon the workmen38. It is
important that the terms of settlement are written in clear and unambiguous language,
as ambiguous clauses may lead future complications in the form of disputes and
litigations. It is, however, not always easy to write the clauses in clear and unambiguous
terms. The conciliation officer should remember that his primary objective is to resolve
the disputes and not correction of unambiguous terms. Experience shows that some
un-ambiguity is inevitable. As negotiations often take long time, the conciliation officers
should take note on the issues agreed upon and tell the parties clearly what he has
written down. However, he should never take notes on the proceedings, as it may throttle
parties’ initiative to explore new ideas, as they may not feel free in the discussions.
The last part of the conciliation procedure is reporting. It is directly dependent on the
outcome of the conciliation proceedings. Reporting is fairly simple when a settlement is
reached whereas it is lengthy and time consuming when the disputes end in failures. If
a settlement is reached, the conciliation officer is required to report the same to the
government along with a copy of the memorandum of settlement drafted in Form H and
registered in Form O, as per section 12(3) and rules there under39. On the other hand if
no settlement is reached, the conciliation officer is required to send to the government
a full report under Section 12(4) stating the steps taken by him together with a full
statement of facts and circumstances thereof and the reasons on account of which a
settlement could not be reached. There is no statutory format or guideline for submission
of the report. A proforma of the report is presented in figure-1 as an example. Where a
part settlement is reached and the agreement provides for reference of the remaining
part to adjudication, it is necessary to submit two reports – one U/s. 12(3) for which no
further action is necessary and the other u/s. 12(4) where action is needed on the part
of the government.
Figure-1: Proforma of the report u/s. 12(4) of the I.D. Act, 1947
Preamble: (i) A reference should be given whether the workmen involved form a section of the
total workmen or represent a craft or a skill or whether it involves an individual workmen; (ii) in
the case of a closed or Lockout establishment, the names and residential address of the
Managing Director, Directors and Partners, and also the address of the Head Office.
Nature of Industry
Number of workmen involved
Affiliation of the Trade Union
The report must provide for separate paragraphs for each of the following matters:
(1) Date of submission of the dispute to the conciliation machinery, and the subject matter;
(2) Examination of the dispute and the items that are ultimately taken up for conciliation;
(3) Views of the parties – management, unions’ contention should be critically assessed.
(4) Where management is absent and whether powers U/s. 11(4) have been exercised.
(5) Conciliation officers must assess merit of each issue in dispute, and his suggestion to the
parties should never be given in writing unless there a consensus between the parties;
(6) Recommendation of the Conciliation in unequivocal terms.
(7) A written demand of the union or the workmen is not a sine qua non, but the government
has to be satisfied that reference U/s. 10 is needed, and there is a valid industrial dispute.
These aspects should be mentioned in the report u/s. 12(4).
TECHNIQUES AND PRINCIPLES OF EFFECTIVE CONCILIATION:
Conciliation is an art and a highly individualized process. Each dispute is unique and
needs tailor-made approach. Most often conciliators learn these techniques from their
senior colleagues. They learn from their mistakes and mistakes of others, and over
time become expert conciliators. It is impossible to present a guideline for conciliation
that can be applied routinely to each and every industrial dispute and no list of techniques
can be exhaustive. However, certain basic techniques are essential in all conciliations.
For example, persuasion, rationalization, determination of real position of the parties,
proposing alternate solution, and coercion are some of the common techniques used in
most conciliations40. The conciliator needs many qualities; the list of which is endless.
Experience, objectivity, and impartiality are the three basic qualities an effective conciliator
needs41 . If a conciliation officer has these three qualities he can overcome the handicaps
of the other qualities he may lack. In the discussion below I present some of the basic
techniques of conciliation and the principles the conciliators must follow to make
conciliation effective.
(1) Identification of the issues in dispute: The first step in any conciliation is identification
of the issues in dispute. Often the parties have mixed number of issues and the real
issues can be identified only through detailed discussions aimed to identify each issue
in their ‘normal form’ (when an issue has minimum relationship with other issues). After
general discussions at the start of the conciliation process (we do not want it to be
long), the conciliation officer can request the parties to spell out specific issues in
disputes and state their demands and offers on individual issues. This will help to
reduce some irrationality in workers’ demands or management offers. The out come of
this stage will be an agreed list of issues and the parties initial positions on the issues,
which can be maintained in a table as shown in table-3.
(2) Determining the real positions of the parties: Once the issues are identified, the next
step is to ascertain the real positions of the parties in respect of different issues. The
real positions are different from their demands or offers. A party’s real position on an
issue means the position least favorable to itself that the party is willing to accept rather
than resorting to other course of action. Problems arise because the parties try to hide
their real positions. Conciliation officers need to know them, because only by knowing
the real positions, he can understand the issues involved, ascertain the gaps between
their real positions, and take attempts to reduce the gaps. As conciliation proceeds, the
gaps between their real positions decreases and when there is no gap an agreement is
reached.
Table 3: Demand-Offer Matrix
Issues Union-1 Demand Union-2 Management Offer

Demand
Wage Increase 10% 11% 3%

Bonus 20% 20% 8.33%
HR Allowance 25% 20% 15%
Holidays Increase two days Increase four days Decrease one day
Attendance No change No change Deduction of leave
(3) Persuasion: This technique universally identified, as the most common and most
important in conciliation, is persuasion. It involves, the process of analyzing and
understanding the party’s perception on different issues and pursuing them to change
their positions. The parties in conciliation use both coercive and persuasion tactics.
Many a time, they threaten each other to induce the other party to step down. The
conciliator must be conversant with the tactics of the parties and more particularly the
way they put pressure on each other. The conciliator must allow the parties to uses the
pressure tactics, but should prevent them to do so if it broadens the gaps. In perusing
the parties to come closer he has to be particularly careful that one party does not see
him as the spokesman of the other party.
(4) Managing the conciliation process: Control of environment in which the conciliation
progress is an important issue. The success in conciliation to a large extent depends
on how the environment is managed and maintained. The environment should be such
that the parties feel free to offer suggestions. The conciliation officer has to decide
when to hold joint and separate meetings and who can attain the meetings and limit the
number of participants from each side if required42. If any party is agitated it is his
duty to cum him down for smooth progress in conciliation. Sometimes, diversionary
talks may help lighten a tense situation, but the parties should not be unnecessarily
carried too far. They should be encouraged to start serious discussions as soon as the
situation permits. It is not unusual for the trade unions to make statements like
‘employers are out to exploit the working class’ or ‘managers adopt various
malpractices’. On the other hand, management may say that unions are unrealistic,
without popular support and adopt various restrictive practices. Such arguments do not
help the conciliation, so the parties should be asked to restrict their discussions to
specific issues.
(5) Integrating in dispute situation: One of the main problems for the conciliator is to
integrate in the dispute situation. His achievement is dependent upon how well he is
accepted as ‘one of us’ by both the parties and how well he has grasped the disputes.
He has to win the confidence of both the parties and establish him-self as a neutral,
objective, and intelligent third party interested in the settlement of dispute. So long as
the conciliation officer enjoys confidence of the concerned parties there is nothing
arcane in it. The parties are sure to be relieved when they find that one always comes to
any question without preconceived idea. An important principle is maintenance of
secrecy, which the conciliation officer should always follow and specially after ending
separate meetings when one party is eager to know the real position of the other party.
Keeping confidentiality in issues that the parties want to share only with the conciliation
officer is an important factor in building trust of the parties. The law also cast an
obligation on the conciliation officer on matters marked as confidential. The conciliation
officer must keep constant touch with the parties in conciliation.
(6) Managing intra-organizational issues: Some times there are differences in goals
and preferences within the either side, either the union or management. In general, the
management side is more cohesive, but insufficient decision-making authority may
lead to intra-organizational differences. Such differences are common in public sector
because of complex decision making structures and numerous political constituencies.
The differences are also common in union functioning. For examples, some times the
office bearers of a union may differ about the preferences of negotiation issues or even
on specific issues. The best strategy is to ask them to resolve these issues amongst
themselves. If this is not possible, the conciliation officer can adopt methods and
strategies adopted in multiple union situations.
(7) Proposing alternate solution: The conciliator may propose alternate solutions at
appropriate time. In making alternate proposals, it is necessary that the conciliator
understand the parties in their proper perspective and the parties are willing to hear the
alternate solutions when presented. There is a prime time for communicating the
proposals, but until then the conciliator should maintain absolute secrecy. Sometimes it
is easier to make the proposals in separate meetings and get consent of each party
before their presentation in the joint meetings. Many a time, the conciliators are tempted
to give a solution at an improper time or in a manner the conciliator is not expected to
do. If this happens the parties are likely to feel that the conciliator is imposing a settlement
upon them. Such a feeling is against the principle of conciliation. The conciliator should
avoid the temptation to decide for the parties. Instead he may propose alternate solution
only when the parties have reached an impasse.
(8) Coercion: At critical times the conciliator is required to threaten or compel either or
both parties to arrive at an agreement. The use of this technique to a large extent depends
on the nature of the industry and the ability of the conciliator to do so. The conciliator
warns the parties of the consequences of not reaching a solution and of resorting to
strike/ lockout. This technique, however, must be used with utmost care.
(9) Managing multiple unions: When there is more than one union, conciliation becomes
more complex. The conciliation officer’s strategy will depend on the relationship and
mutual trust between the unions. If possible, the unions should be asked to submit their
demands jointly, and select a leader as a spoke person for the unions. In other words,
the unions should appear like a single union and speak in a single voice. Sometimes,
such a situation may not be always possible even after long negotiations with the unions.
If the relationship between the unions is too adversarial, the conciliation officer can hold
separate meetings with each union to ascertain their real position. In such multi-union
conciliation, the conciliation officer’s impartiality and confidentiality are extremely
important. It is not enough to be impartial; he must also appear to be impartial. An open
appreciation of the views of one union or adverse remark on any union may lead to
more complications. In multiple union setting, efforts should be made to enlist participation
of all unions if the disputes are of general nature. If any the unions refuse to sit jointly, the
conciliation officer can arrange separate meetings43.
(10) Incorporating the enforcement role: Most often, a conciliation officer also acts as a
labor enforcement officer. This conflation of the roles of a conciliation officer and an
enforcement officer has the advantage that a conciliation officer has at his armory the
law enforcing weapons to apply wherever employers fail to show up in conciliation or
after once showing up fail to take reasonable steps for an effective dialogue with their
workmen.
Figure 2: Ascertaining real positions
Management’s offer Management’s real offer Union’s real demand Union demand
Union’s estimate Management’s estimate
on management’s real demand on union’s real demand
We have discussed above some of the techniques and principles for the conciliation
officers. Conciliation starts with union demands and management offers on different
issues. The demands and offer change over time and so does their real positions.
Between union demand and management offer there are a number of positions relating
to demands and offers. (See figure-2) If a conciliation officer can identify these positions,
he will be in a better position to understand the issues and the differences between the
parties on the issues. The conciliator has to continuously ascertain, deduce, and infer
each party’s real positions and pursue them to bridge the gaps between their real
positions till parties agree to a settlement. As discussed, finding real positions is not an
easy task. It is more likely that the parties will not give straight answers to the questions;
the conciliation officer has to guess their real position. Separate meeting is a useful tool
for assessment of real positions, but the conciliator must maintain secrecy about the
separate discussions unless he is asked to disclose any of the issues. In the separate
meetings, the focus would be on assessment of real positions of the parties on various
issues, while in joint meetings followed by separate meetings the focus should on the
revised demands and offers. If conciliation progresses smoothly, the gaps between
their real positions as well as the gaps between the demands and offers will decline. On
the other hand continuing gaps between their real positions is an indication of impasse
and hence may result in failure.
CONCLUSION:
We have discussed here some of the legal issues in conciliation and the techniques
and principles for effective conciliation. The existence of numerous labor laws makes
the legal issues complex and it is further complicated by the plethora of court cases.
The conciliation officer is expected to keep himself updated with important court cases.
Conciliation is an art and a highly individualized process; therefore, the techniques and
practices mentioned here is not an exhaustive list. Expert conciliators become expert
because of their legal knowledge and experience. Experience gathered by conciliators
during their tenure of office is a valuable guideline for conciliation. To talk the unions out
of their restrictive practices or to guide employers and unions into an understanding is
an art, which can be acquired and perfected only through constant practice over the
years. Legal knowledge is essential, but it is not enough; practical knowledge is important
to attain maturity. Conciliation officers must have through knowledge of legal issues, but
he should not be pre-occupied with the legal aspects. Law is after all as is interpreted by
competent courts. The techniques mentioned here are some of the most common
techniques; a conciliator may have his own techniques; and a skilled conciliator can
use them more effectively. A beginner besides acquiring legal knowledge should,
therefore, learn from their seniors and colleagues.
In resolving industrial disputes, the conciliation officer must ensure that the government
policy advocating the principles of fairness and reasonableness are followed and
practiced. They must ensure that potential disputes are prevented and that workers in
distress are heard sympathetically and explained the legal position. The regional offices
often receive representations from industrial workmen that do not strictly form subject
matters of industrial disputes as per law. The workmen may be told so, but nevertheless
an enquiry should be called for and the result of the enquiry should be communicated to
the respective complainants. Sometime, inarticulate workmen write letters, which are
found to be full of errors of grammatical constructions. The remedy would obviously lie
in reading these epistles with emendations necessary to make sense out of them. The
cases of job loss should be dealt with special care. If large numbers of jobs are axed,
mere offer of a golden handshake and fulfillment of all legal obligations may not meet
workers’ demands. In the event of any dispute on the issue, it is necessary to hear the
parties with patience and sympathy and conduct an enquiry, even if legally he has nothing
to do. In the post liberalization period, the roles of conciliation officers have been put to
serious questions. There is now increasing tendencies for use of outsiders as
conciliators industrial disputes. Most often this is for personal and political reasons as
well as for lack of confidence in conciliation officers. It is true that in some cases there
are quick settlements, but this is not the general rule and there are sometimes legal
complications. The conciliation officers need to be more efficient and more effective.
Otherwise outside mediators distinguished or not will takeover their functions the reducing
roles of conciliation officers in resolution of industrial disputes.
REFERENCES
1. This paper is based on my experience as Labour Commissioner from 1992-99 and my academic
experience at the School of Industrial and Labor Relations, Cornell University, USA from 1999-2003.
2. The Industrial Dispute Act 1947 uses the terms ‘workman’ and ‘workmen’. There is no gender bias.
3. Industrial disputes also include disputes between employers and employers and between
workmen and workmen, but the most common disputes are the disputes between the employers
and employees.
4. The central amendments of 1982 and 1984 made sweeping changes in the various provisions in
the I.D. Act 1947. Similarly the state amendments are important the state conciliation officers in
dealing with disputes for establishments for which the state government is the appropriate
government.
5. For example Labor Ministers in many states frequently act as mediators because of his authority
and knowledge and the office he holds. (39)
6. Rules 9 and 10 refer to Industrial Disputes (Central) Rules, 1957. There are similar state rules.
7. Air India Statutory Corporation & Others vs. United Labour Union & Others, 1997-I-LLJ 1113 (SC)
8. Ministry of Labor, New Delhi, notification dated 3rd July 1998.
9. Steel Authority of India Ltd vs. National Union Water Front Workers and others, LLJ 2001, pp. 1087
(SC).
10. The numbers here are disputes relating to work stoppages. During 2000-2001, the central
industrial relations machinery held 7184 conciliation proceedings of them conciliation failed in
4137 cases.
11. Indian Iron & Steel Company’s Case 1958 I LLJ 260 S.C.
12. J.K. Cotton Sinning and Weaving Co. Ltd. – Vs – Its workmen 1965, LLJ 153, Supreme Court.
13. Bharat Sugar Mills Ltd. vs. Jai Singh 1961 II LLJ SC 644; Ritz Treatre (P) Ltd. vs. Its workmen 1962
II LLJ SC 498; Motipur Sugar Factory (P) Ltd. vs. Its Workmen vs. 1965 II LLJ SC 162.
14. Ramjanam Khan’s Case in 1990 (Vol. 61) FLR, page-736; ECIL vs. B. Kaarunakaran and others.
15. In general, recent standing orders (or model standing orders) do not have such clauses, but some
old standing orders have such clauses. The conciliation officers should process such cases very
carefully.
16. Utkal Machinery Ltd. vs. Santi Pattanyak, 1966 LLJ 393, S.C. The State Road Transport Corporation,
Bangalore vs. M. Boraiah and another, SC 01.11.83.
17. Surendra Kumar Verma vs. Central Industrial Tribunal-cum-Labour Court, 1981 I LIJ 386 SC
18. H.D. Singh vs. Reserve Bank of India, (1985) 4 SCC (L&S) 975.
19. Workmen of Subong Tea Estate-Vs-Sobong Tea Estate (1964 I LIJ 333 SC)
20. Delhi Cloth & General Mills Ltd.-Vs-Sambhu Nath Mukherjee and others, 1978 I LIJ L SC.
21. Hindustan Steel Ltd. vs. Presiding Officer, 1976, 4 SCC State Bank of India vs.N. Sundara Money
1976 I LIJ 478 SC.222: 1976 SCC (L&S) 565.
22. Santosh Gupta-Vs-State Bank of India, 1980 II LIJ 72 SC
23. Surendra Kumar Verma vs. Central Industrial Tribunal-cum-Labour Court, 1981 I LIJ 336 SC.
24. Workmen of Sudder Workshop of Jorehaut Tea Co. Ltd.-Vs- Management, AIR 1980 SC 1454.
25. Bhavanagar Municipality Vs. Alibhai Karimbhai and others, 1977 I LLJ 407 SC)
26. The Firestone Tyre & Rubber Co. vs. Its Workmen Ltd. 1976 I LIJ 493 SC.
27. In West Bengal, vide a circular in 1972, the Labour Department asked all conciliation officers to
send reports on closure giving a rundown of all facts and circumstances leading to the closure.
28. Indian Hume Pipe Co. Ltd.– Vs.– their workmen, 1969 I LIJ 242 SC.
29. Vide decision of the Supreme Court in Workers of Motor Industries Co. – Vs. – Motor Industries Co.
Ltd. 1969 II LLJ 673 SC.
30. General Navigation and Railways Co. Ltd. vs. their workmen, 1960 I LW 13 S.C.
31. Delhi Administration – Vs. – Workmen of Edward Eventers and another, 1978 I LW 209 S.C.
32. For example, in West Bengal there are long-term collective agreements covering wage and other
service conditions in jute, cotton textile, engineering, and tea plantations and others decided at the
state level. The wages in collieries are determined at a national level.
33. There are many court cases indicating that the section 9A is applicable or not applicable in certain
cases and on the meaning of alteration in conditions of service.
34. For example clause on discipline, attendance, and non-interference with management activities
are common in many firms. Dunlop India agreement in May 1994 have specific clauses on the
issues.
35. Tribeni Tissues Division of ITC Tribeni Tissues Division in their long term agreement in 1993 have
clauses on all of these issues. Out of 33 clauses in the agreement 17 are such management
clauses.
36. For examples and more detailed discussions see Das(2000)
37. Section 58 of the Industrial Disputes (Central) Rules 1957. Similar provisions exist in state Rules.
38. Brook Bond India Ltd. Vs. Workmen, 1981 II LLJ 184 SC
39. Industrial Disputes (Central) Rules, 1957. There are similar forms in the State Rules under the Act.
40. Stevens, 1967: 277-85 in 43
41. Peters
42. The act does not allow any party to be represented by a legal practitioner.
43. This approach cannot be adopted when there are two committees of the same union, in which
case, the two factions may be persuaded to sign the single agreement. The conciliation officer has
no authority to decide which faction is the real faction.
4
Enhancing the Effectiveness
of Conciliation Machinery
Under the Industrial
Disputes Act*
J.S. Sodhi
The main objective of the study is to (a) know the status of industrial relations in the
chosen units and suggest measures for enhancing the effectiveness of the dispute
settlement machinery with special reference to conciliation; (b) recommend measures
for streamlining the process of conciliation and reduce the number of pending
adjudication cases.
The study examination of the following:
z Conciliation officers – their adequacy in terms of numbers, education and
training, process of conciliation, etc., and
z Behaviour, attitude and practices of the management, trade unions and role
played by the conciliation officers.
Coverage
The study covered the working of the Dispute Settlement Machinery in the Central sphere
in five selected regions, namely Chennai, Delhi, Dhanbad , Jabalpur and Mumbai. From
each of these regions a sample size of three to five enterprises was chosen for the
study.
After selecting the five regions as mentioned above, the following units were chosen in
consultation with the Ministry of Labour in each of the five regions.
*This study on “Enhancement of Effectiveness of Dispute Settlement Machinery” under the Industrial
Dispute Act 1947 was sponsored by the Union Ministry of Labour and assigned to Shri Ram Centre
for Industrial Relations and Human Resources.
S.No. Region Units/Industries Chosen

1. Chennai Chennai Port Trust
2. Delhi Indian Airlines (Air Transport—domestic), Department of Posts, Food
Corporation of India (FCI) , Mahanagar Telephone Nigam Ltd. (Corporate
Office and Delhi Unit)
3. Dhanbad BCCL mine in Kusunda Area, Dhansar colliery
CCL mine in Barkakhana Area, Gopinathpur colliery
ECL mine in Mugma Area, Saunda ‘D’ colliery
4. Jabalpur NMDC, Bailadila Iron Ore Project, Deposit No.5
SAIL, limestone mine, Kuteshwar mine
NMDC, manganese ore mine, MOIL, Balaghat
Bharat Sanchar Nigam Ltd., Telecom factory, Richai
5. Mumbai ONGC, Air India (Air Transport,
International), State Bank of India,
Bharat Petroleum Corporation Ltd. (BPCL),
Life Insurance Corporation LIC, General Insurance Corporation (GIC).
Conciliation Process and Proceedings
While laying down the duties of the conciliation officer, Section 12 of the ID Act, 1947
states, “When any industrial dispute exists or is apprehended the conciliation officer
may, or where the dispute relates to a public utility service and a notice under Section
22 has been given, shall hold conciliation proceedings in the prescribed manner.” As
per provisions under the Industrial Disputes Act, issues are mostly raised first with the
conciliation officers. In the recent past, there had not been many cases referred to the
Board of Conciliation or Court of Enquiry. Conciliation by the conciliation officer is the
most popular and easily accessible process. Generally, some of the conciliation officers
take up the matter with the concerned parties in an informal manner before formal
proceedings start and in certain cases they have been successful in resolving the
disputes without initiating any discussion in formal conciliation meetings. Encouraged
by such outcome, there have been suggestions whether such an informal discussion
could be institutionalised. Through such informal discussions it will be possible to
work out many alternatives with a ‘give-and-take approach’ which might be ultimately
acceptable to the parties. Even if no agreement is reached in such informal discussions,
the conciliation officer would know the approach and the stand of the parties and
that would help the conciliation officer in applying his mind to search for various
alternatives and ultimately reach an amicable settlement through the process of formal
conciliation.
Enhancing the Effectiveness of Conciliation Machinery Under the Industrial Disputes Act 59
PROFILES OF ENTERPRISE LEVEL STUDY
A Conciliatory Approach to Meet Challenges
A study on the effectiveness of dispute settlement machinery should provide an insight

into the nature and magnitude of the problems faced by the various enterprises. In
reality, it is found that peculiar micro level-problems arise in different enterprise due to
endogenous factors such as varied industrial climate, financial status and labour-
management relations as well as exogenous factors such as political situation, change
in global market forces and challenges of innovative technological upgradation. Broad
generalisation without objective basis of any close study may prove to be too wide off
the mark in hitting the specific objectives of dispute settlement . Usual expectations
may not come true under changed circumstances. For example, usually a reference to
adjudication may be preferred by the management (and sometimes even by the Trade
Unions), as it gives scope for delaying implementation of decisions and awards; but
there are cases in which a promising market prospect with technological upgradation
prompted the management to initiate early bipartite settlement of disputes in order to
enable the workers to contribute towards enhancement of productivity with more
incentives. It is, therefore, attempted here to present briefly the selected enterprisewise
profiles which the study team has built up through field data collection and interviews. It
is expected that the results of these quick studies will not only highlight the shape
and content of emerging situations but also provide models for enhancing effectiveness
of dispute settlement machinery relying more on consultative and conciliatory approach.
A brief account of the IR and conciliation of selected 18 enterprises engaged in coal

mining, non-coal mining, oil exploration, service enterprise, such as ports, posts, air
transport , food procurement and distribution, banking and insurance coming under the
jurisdiction of five chosen Regional Offices of the organisation of C.L.C. is given in the
following paragraphs. This discussion is intended to provide an insight into the varying
conditioning factors in the enterprises and show how the negotiating functionaries
contributed towards achieving the common goal of industrial peace.
CHENNAI PORT TRUST
Status of Industrial Relations
The industrial relations in the Chennai Port is reported to be, by and large, cordial. There
has been no lockout in this port so far. However, there have been occasional strikes/
work stoppages on various charters of demands, some of an all-India nature and some
pertaining to different sections of this port. There have also been a few general strikes
of all major ports connected with the demand for wage revisions of Class III and IV
employees.
The demands of the Unions in their Charter of Demands are initially discussed at the
bilateral level and, if necessary, before the conciliation officer and the Government through
the officers of the Ministry of Shipping who take part in the bilateral discussions and the
demands are sorted out and settled amicably.
The Chennai Port Trust is adopting the following system for settlement of disputes and
grievances. The system is working smoothly and as such no change is required:
1. The Charter of Demands or grievances raised by the Unions are discussed first
by Heads of Departments and problems are attended to.
2. When cases cannot be settled at the level of Heads of Departments, the matter
is looked into by the Vice Chairman.
3. If the issues remain unsolved, the same are placed before the Chairman and
decisions taken.
A Statement obtained from the office of the Regional Labour Commissioner located in
Chennai and placed in Table 1. below shows that in the course of the last five years, 22
to 27 cases are received every year from the Trade Unions/workers of Chennai Port.
Pending cases of conciliation at the end of the year were never more than 20 till the year
2000, i.e. below receipts of cases. Failure of conciliation cases were not many giving
only an average of six cases per year as shown in column 6 of the Table.
Table 1: Details of Disputes and Conciliation Cases Handled in Port and Dock
During the Years 1997, 1998, 1999, 2000 and 2001 (Upto 30.6.2001)
Year B/F Recd. Total MO Settle- Foc Disposal Pending

ment
1 2 3 4 5 6 7 8
1997 4 22 26 5 6 9 6
1998 6 25 31 - 4 18 9
1999 9 22 31 1 3 11 16
2000 16 27 43 - 11 12 20
2001 20 13 33 4 7 8 14
(Upto 30.6.2001)
INDIAN AIRLINES: DELHI REGION
IR Status and Dispute Settlement
The IR system in this enterprise has shown some distinctly effective results in settlement
of disputes through mutual consultations between the employees and management
and also by utilising the collective bargaining machinery. Experience has shown that
grievances are better understood and tackled through bipartite negotiations and as such
the unions rarely refer the disputes to the dispute settlement machinery under the ID
Act (viz. conciliation and adjudication). This mutual understanding has largely helped
the company to avoid strikes/lockouts. The existing IR machinery relies heavily on a
streamlined grievance procedure, regular meetings with the unions/associations and
the Works Committees. The cases are, however, referred to conciliation and adjudication
by the unions and individuals. A settlement through conciliation takes about three months
to 12 months. Recently, about half a dozen cases referred to conciliation have been
disposed of by the Regional Labour Commissioner’s Office. During the last five years
only two cases were referred to adjudication and these two cases are still pending
with CGIT. Among the various causes for disputes the most important ones are found to
be on issues concerning termination of employment due to some disciplinary
action and non-engagement of casual labour particularly in view of the ruling of the Apex
Court.
MAHANAGAR TELEPHONE NIGAM LTD, DELHI REGION
IR and Dispute Settlement
With a closely interactive IR machinery and regular dialogues between employees and
management the issues related to disputes and grievances are settled so that the
IR status is maintained as cordial and harmonious. It is worthwhile to note the salient
features of the machinery that handles cases for redressal of grievances and
settlement of disputes. These are mentioned briefly as follows:
1. With separate IR Groups in the Corporate Office and Delhi and Mumbai units
can make systematic and speedy efforts to settle the grievances and disputes
in a decentralized set up. For example, in the Delhi Unit one industrial relations
cell headed by DGM (IR) functions effectively in sorting out issues of industrial
disputes.
2. The IR machinery heavily relies on the strategy of bi-partite consultations on a
regular basis and takes prompt action to implement the mutually agreed
decisions. Regular bi-monthly meetings are arranged by management in which
RLC and Chief General Manager discuss relevant issues while bi-monthly
meetings of ALC and Area GMs and DGMs are held to discuss problems and
help in arriving at the solutions.
3. The IR machinery believes that the prompt implementation of collective wage
agreements largely helped to maintain an IR status which was congenial for the
growth and prosperity of the company. As a result of recent change-over to PSU
pattern, MTNL has to discuss issues on wage agreement, perks, etc. with the
recognised trade unions. Meetings with the recognised trade unions are held
once every three months. Being a public utility service coming under essential
services category, MTNL tries to avoid strikes.
MTNL (Corporate Unit) has to trade unions with a total membership of 12,000. Out of
these only two unions are recognised. In the Delhi unit there are 12 unions with a total
membership of 25,000; but only one union, viz. MTNL-staff Union (affiliated to NTSF) is
recognised.
During the last 10 years there has been no strike or lockout in this enterprise except a
took down/ pendown strike only for one day on 4.7.2000. During the last two years only
five cases were referred to the Central Conciliation Machinery and in all the cases the
disputes were settled within a very short time. The statistics in Table 2 would bear out
the truth of this statement of progress.
Table 2: Dispute Settlment Scenario in 1999-2000 and 2000-2001
1999-2000 2000-2001
1. No. of disputes brought forward Nil Nil

2. No. of disputes arising in the year 2 3
3. No. of disputes disposed of in the year 2 3
4. No. of disputes pending at the end of the year Nil Nil
FOOD CORPORATION OF INDIA (FCI)
Industrial Relations and Dispute Settlement
Employer-employee relations could be termed cordial. Most of the issues are resolved
through bilateral discussions. It has, however, been found that sometimes even after
bilateral discussions and making all-out efforts by the management to resolve the
issues, the unions often approach Industrial Relations Machinery for settlement of
disputes.
Most of the issues which are raised before the CIRM by the Unions are resolved through
the intervention of ALC/RLC in the process of conciliation.
The IR Section in FCI deals with all types of grievances/demands put forward by the
unions. Meetings arising out of Agitation Notices held at the Head Quarter Offices with
the staff unions will immensely help in tackling disputes.
The yearwise position of industrial disputes during the last 10 years are shown below in
Table 3.
Table 3: Yearwise Positionof Industrial Disputes for the Last 10 Years
No. of Disputes 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Brought forward - 02 02 03 03 03 03 03 03 03
Arising in the year 05 05 03 04 05 04 05 07 08 02
Disposal in the year 03 05 02 04 05 04 05 07 08 02

Pending at the end of 02 02 03 03 03 03 03 03 03 03
the year
Both the FCI Management and ALC/RLC took the initiative to resolve the disputes and in
some cases the union/unions also agreed to defer their agitational programmes.
Keeping in view the request made by the FCI management and the concerned ALC/
RLC where the case was pending, no dispute has been referred to arbitration during the
last 10 years . There are only five FOC cases reported during the last 10 years.
DEPARTMENT OF POSTS
Employer-Employee Relations
Employer-employee relations could be termed cordial. A bi-partite Joint Consultative

Machinery (JCM) is working in the Department. Many disputes have been sorted out
through joint consultation as the same were within the competence of the Department.
There were, however, larger issues involving Government employees as a whole such
as pay revision, service matters, etc. During the past two years, the Central Conciliation
Machinery was approached twice. On both occasions, the recognised federations of
postal employees served strike notices demanding, in the main, improvement in pay
and allowances over and above the implemented recommendations of the 5th Central
Pay Commission as well as Justice Talwar Committee Recommendations for Extra
Departmental Agents, presently designated as “Grim Dak Sewaks”. The last strike notice
was served by a joint letter dated the 6 November, 2002 by the three recognised federations
of postal employees.
Out of the 11 issues listed in the Charter of Demands, nine related to upgradation of pay
and allowances. The other two demands related to filling up of all vacancies and
implementation of Talwar Committee Recommendations for granting status and pension
to Extra-Departmental Employees. The Chief Labour Commissioner (Central) was
approached and conciliation proceedings initiated. The Department explained the stand
of the Government that only minor demands within the competence of the Department
could be considered while the major demand for increase in pay, over and above the 5th
Central Pay Commission with far-reaching implications affecting all the Central
Government employees cannot be considered in isolation. Apart from the Central

Government employees, employees of the State Governments as also employees of
other Government Institutions would be demanding a similar pay hike. The issue is
therefore a complex one. The Department made an appeal for withdrawing the strike
notice and bringing up the matter before Joint Management Council at the National level.
When this was not agreed to and no settlement was in sight, the strike was declared
illegal and as a result all States were required to invoke the provisions of the Essential
Services Act. Some of the States in effect had to invoke the provisions of the Act.
However, the strike was ultimately withdrawn as a result of an appeal made by the
Minister of Communication.
All minor issues offering certain facilities could be settled through bi-partite discussion
in the Joint Management Council. There was only one case which was referred to an
Arbitrator and he gave an award reducing the weekly working hours to 45 from 48. This
matter is presently with the Parliament for approval. There has been no reference of
any dispute for adjudication. In some cases, certain employees had gone to the judiciary
with cases of personal nature. They were, however, told that the appropriate forum is
the Central Administrative Tribunal (CAT).
DHANBAD REGION
High Incidence of Disputes in the Premier Colliery Belt
The dhanbad region records a very high incidence of industrial disputes within the ID
Act framework, as about 25 per cent of the entire country’s industrial disputes are found
to arise in this region alone. An idea about the main reasons for industrial disputes in the
Dhanbad region and also their relative importance may be formed from the factual
account given in Table 4 below.
Table 4: Relative Importance of Major Causes of
Disputes in Dhanbad Region
S. No. Causes of Dispute (%) Share of Each Cause in the Total

1. Dismissal due to absenteeism and 20
other reasons
2. Regularisation in present post 15
3. Employment of dependents 15
4. Age controversy 20
5. Transfer/Promotion 5
6. Change in service conditions 15
7. Pay protection and others 10
Total : 100
From the data presented in Table 4 it is evident that issues on age controversy,
dismissal and regularisation together account for the bulk of disputes (about 55 per
cent) and these issues create much of the constraints to speedy settlement of
disputes. As the management has to tackle these problems very often, it is a common
practice to get temporary respite by setting aside the results of conciliation and waiting
for a reference to adjudication which helps dragging out the cases for years together.
However, the issues relating to transfer/promotion and pay protection, etc. account for
minimum number of disputes.
The experience of a three-year period i.e. 1997-1998 has shown that on an average
every year, 1,127 cases of disputes were received in this region and Memoranda of
Settlement (MOS) were entered into in respectively 15.51 per cent of disputes while
FOC reports were submitted in respect of 44.07 per cent cases. Despite vigorous
conciliatory efforts by Regional Labour Commissioner assisted by eight ALC as also
special conciliation by Deputy Chief Labour Commissioner, matters did not improve.
There are cases in which the decisions taken in conciliation are not honoured and
implemented. Among the various reasons for such non-implementation, particular
mention may be made of inter-union and intra-union rivalries local political and mafia
intervention, trouble created by unions with small minority who may not be a party to a
settlement arrived at between management and workers and sometimes a difference
of opinion between local and corporate management. On an average six months’ time
its taken to resolve an industrial dispute on general issues, but disputes arising out of
strike/lockout notices on genuine demands normally can be settled more easily.
According to the conciliation offices, the main reason for tardy progress of conciliation
endeavours arise when the management finds it convenient to drag the issues to
adjudication much to the detriment of workers’ interests. In the regime of liberalisation
and globalisation, many enterprises are forced by circumstances to downsize manpower
to regain competitiveness. In such a situation when tribunal awards require them to
reinstate dismissed employees or regularise temporary labour, the management
takes recourse to lengthy adjudication procedures by filing writ petitions to High Courts/
Supreme Court. The two CGITs working in the region present a dismal picture of
pending cases and non-implementation of awards. The main reasons for pending cases
are : delay in filling up the vacancies of Presiding Officers, induction of judges on the
verge of retirement who do not stay for long, lack of adequate staff support and infra-
structural facilities for effective functioning of the CGITs and increasing workload
per CGIT.
DHANSAR COLLIERY IN KASUNDA AREA OF BCCL
With the exception of the sampled colliery seven other collieries of the chosen area do
not present a similar overall picture of conciliation. The relevant statistics for 1991-2000
presented in Table 5 show that though there has been marked decline in the number of
disputes arising annually between 1991 and 2000 the situation regarding number of
pending cases has not shown much improvement since 1997 and that is primarily
because of tardy progress of disposal of cases every year. It is suggested that this
particular effort in disposal of cases needs to be more effective in providing
speedy results so that more cases may be disposed of annually. It might call for a
strengthening of the conciliation machinery of Regional Labour Commissioner’s Office
in Dhanbad region so that the number of cases dealt with by each ALC may be brought
down to a reasonable limit.
Some representatives of management expressed the view that the multiplicity of unions
often create problems in settling disputes; because all unions want to show their
importance as the guardians of labour interests. In this area there are nine unions, but
only five are recognised. At the time of dispute settlement even non-recognised unions
(but registered) are also consulted. This is in a way the safest approach. Non-invitation
may result in agitation affecting industrial peace and the colliery level management may
be termed tactless. In the opinion of the management, a lesser number of unions
will definitely facilitate speedy settlement of disputes. If necessary, the Trade Unions
Act, 1926 might be amended with more stringent conditions for the registration of
unions.
Table 5: Status of Conciliation in The Chosen Area of BCCL
Year Disputes Disputes Disputes Disputes

Carried Arising Disposed Pending at
Forward in the of in the the End of
(No.) Year (No.) Year (No.) Year (No.)
1991 18 22 22 18
1992 18 25 20 23
1993 23 26 24 25
1994 25 26 28 23
1995 23 28 32 19
1996 19 25 15 29
1997 29 30 22 37
1998 37 30 33 34
1999 34 32 30 36
2000 36 32 31 37
COAL MINES – DHANBAD
Of the five regions covered by the study, the Dhanbad area has a distinct culture. The
incidence of disputes here is high and is raised by a large number of splinter groups of
workers merely to demonstrate their importance and enjoy certain benefits which go
with the offices held. These are mostly of a personal nature, often on flimsy grounds
knowing fully well that these would not stand the test of any scrutiny. The problem of
multiplicity of unions has not been addressed with any seriousness. Hence all the unions
have de-facto recognition for consultation. It is safe to invite all to ward off agitations and
strikes. Major issues of a community nature such as wages and other service
conditions are dealt with by the central federations listed by the Joint Bipartite
Committee for the Coal Industry (JBCCI) and as such these do not pose a day-to-day
problem at the colliery level.
The conciliation machinery functions in the coal industry according to a set procedure.
But the success stories are not many. It has been observed that where the conciliation
officers are dedicated and keen to resolve the disputes with “give and take” approach
have been able to resolve many disputes after consultation with higher functionaries of
management. But these are exceptions. By and large, the conciliation officers finding
the parties not relenting, sent off FOCs. The two Benches of CGIT have the highest
number of pending cases. For Bench I, the vacancy of the Presiding Officer remained
vacant for a long period and hence cases piled up.
TELEPHONE FACTORY, RICHII, JABALPUR REGION

(BHARAT SANCHAR NIGAM LTD.)
Broadly speaking, the Jabalpur region stands out quite impressively with the IR systems
in the sample enterprises showing how a cordial employer-employee relation can be
built up with mutually collaborative efforts of both and how such a relationship can help
them to promote progress and share benefits. It is interesting to find that the basically
business-oriented relation could stretch out to enter the wider frontier of social relations.
On-the-spot descriptions of the Study Team have revealed, inter alia that frequently
both the employers and employees, come out to participate and enjoy staff-organised
entertainments with their families, and get together to celebrate religious festivals, sports,
cultural functions, etc. in these otherwise remote and dull locations, such occasions to
exchange thoughts and feelings go a long way in adding spice to life and cheering up
the employers, employees and their families. Such stimulating behaviour has largely
helped the growth of mutual understanding and confidence which have firmly cemented
the IR system and reduced the incidence of grievances and facilitated dispute settlement
in a big way.
The conforming ambience of human relations created by the employees’ cooperative
spirit and responsive behaviour on the part of the management has rendered the task of
dispute settlement relatively simpler and facilitated such settlement at an early stage.
One flourishing sample enterprise has reported that it relies heavily on Works Committees
and direct negotiations and makes immediate efforts for redressal of grievances.
Increasing reliance on direct dominant means of dispute settlement in this region. As a
result, there is less reliance on conciliation and adjudication. By and large, this region
has developed a culture of employer-employee cooperation. This is carried forward as
much by the ‘work more and earn more’ approach of interactive employees as by the
progress of welfare measures and schemes of closer participation initiated by responsive
management.
AIR INDIA—MUMBAI REGION
Air India has set up a Joint Consultative Committee representing the management and
various unions to discuss the issues raised by the employees. The system is working
satisfactorily and disputes are resolved amicably in most cases. Whenever a strike
notice or work-to-rule notice is received from any union the same is sent to RLC/ALC
for intervention and amicable solution. Many of the disputes are resolved in the
conciliation proceedings or discussions at a higher level with the management as also
the Ministry of Civil Aviation. Out of the 14 cases of industrial disputes raised by various
Unions/Guilds/Associations, by April 1991 onwards, 12 cases could be resolved through
intervention of Regional Labour Commissioner as also the Ministry of Civil Aviation. In
another case, the demand from Air India Employees’ Guild for correcting the defects in
the new B747-400 hanger at the old airport, the Managing Director agreed to constitute
a Committee of Director (Engineering) and Director (Engineering Overhauling) and submit
the report with the recommendation to the Chairman as also Managing Director. The
remaining case for providing additional flight allowance on long haul flights (exceeding
nine hours) was referred for adjudication by the Ministry of Labour to National Industrial
Tribunal, Mumbai. Thus, most of the demands were resolved through conciliation/
mutual discussion and only a single case was referred for adjudication. The above
account will give the status position in respect of cases which were filed by the unions
collectively but there were also many cases raised by individuals mostly opposing
dismissal, termination or absorption, etc.
STATE BANK OF INDIA (SBI)
Out of the 10 listed unions for both staff as also officers, the two most commanding
unions, i.e. All-India State Bank of India Staff Federation representing employees and All
India State Bank of India Officers’ Federation representing officers, have been recognised.
Thus, for all practical purposes a single union is negotiating with management for
redressal of grievances of their respective members. For dealing with industrial problems
SBI has the Industrial Relations Department Headed by the Deputy General Manager at
the corporate office and at the circle/zonal levels the Assistant General Manager
(P&HRD), Chief Manager (IR) and Chief Manager (P) handle matters relating to IR in
the bank. Frequent bi-partite meetings are held between the management and the
recognised unions at various levels to amicably resolve the issues.
However, the year-wise position of ID during the last eight years (1993-2001) is as
follows:
Table 6: Dispute Settlement Scenario in SBI (1993 – 2001)
Year No. of Disputes No. of Disputes No. of Disputes No. of Disputes

Brought Forward Arising in Year Disposed of Pending
1993 611 53 26 638

1994 638 38 23 653
1995 653 89 19 723
1996 723 82 33 772
1997 772 100 54 818
1998 818 297 232 883
1999 883 212 253 842
2000 842 267 250 859
2001 859 200 137 36
According to available data, 1138 cases were raised from 1993 to 2001 and 84 cases
were referred to arbitration. Another 84 cases were referred to the apex court in the last
10 years. Of these 84 cases 80 were concerning personal matters and four were of
collective interest. Again a trend set by the State Bank is likely to be the norm not only for
the employees of associate Banks but also for the entire Banking industry who are also
unionised. The number of disputes involving individual workers may not be considered
too high. It is worth mentioning that the management is always sympathetic to the
disputes concerning genuine demands of employees. The management is fully aware
of the prime need for ensuring industrial peace in the banking industry. For ensuring
this, they have been always receptive as a single day’s dislocation may cause a huge
loss to the economy.
GENERAL INSURANCE COMPANY (GIC) OF INDIA
The GIC has not spelt out any clear-cut industrial relations policy or laid down rules for
a machinery. However, issues like wage revision and other representations are sorted
out amicably through discussions with the various concerned Associations and Unions.
The status of industrial relations in the GIC Corporate Office is reported to be very
cordial and as such no lockout or strike has been declared in the corporate office. The
GIC has been taking a positive approach resulting in amicable settlement and as such
they do not feel that the present system has any shortcomings. It, was, however, stated
that with the intervention of senior functionaries authorised to take an on-the-spot view
by the Team Management and Trade Unions, the arrangement could expedite
settlements. In so far as the process of conciliation is concerned, they were of the view
that induction of functionaries with the right aptitude and background for the job of
conciliation would be desirable. It has to be recognised that the job of conciliation is an
art. It is felt that persons who are friendly, tactful and committed can make all-out efforts
in resolving the disputes. A system of incentives may yield better results. They were
also of the view that the Regional Labour Commissioner could assign the cases to his
colleagues, keeping in view their aptitude. Some of the major cases may have to be
retained by the Regional Labour Commissioner to pursue the matter with functionaries
at a higher level—both of the management and trade unions.
OIL AND NATURAL GAS CORPORATION (ONGC) LTD
Industrial Relations
ONGC has enjoyed cordial employer-employee relationships during the last few years.
A 10-year wage settlement was signed with the workers unions through bi-partite
negotiation. Such long-term wage Agreement could be signed because of mutual
understanding. This itself is proof of the healthy labour-management relation. This healthy
relationship has been recognised at the national level and accordingly, the All-India
Organisation of Employers bestowed the Outstanding Achievement in Industrial Relations
Award on ONGC for the year 1999-2000.
It was reported that there was no industrial strike or lockout. However, management
received several strike notices which were referred to conciliation officers from time to
time but many of these could be either resolved or withdrawn after due consultation with
both the parties. The management of ONGC organises participative bilateral meetings
from time to time depending on the need. The role of Works Committee for resolving
the disputes was minimal. Consequently, it refered the disputes to the Central Conciliation
Officers for settlement.
From the statistical information supplied by the office of the Regional Labour
Commissioner, and presented above it is found that the trend of cases of disputes
referred to conciliation during the last five years is downward. However, only one
Memorandum of Settlement (MOS) was signed in a formal manner during 1996. The
number of cases which could not be settled and Failure of Conciliation Report (FOC)
had to be forwarded to the Ministry of Labour showed an upward trend. Out of the total
cases referred to the Conciliation Officer, a large number of cases were disposed of
otherwise, either on the ground that there was no prima facie case or withdrawn by the
party when the legal position was clarified by the Conciliation Officer.
Status of Disputes
Table 8: Details of Industrial Disputes Handled on Respect of M/s ONGC Ltd.

During the Period from 1996 to 2000
Year No. of IDs No. of MoS No. of FOC Otherwise

Disposed of
1996 12 01 02 07
1997 11 – – 04
1998 12 – 02 08
1999 10 – 04 03
2000 07 – 05 07
BHARAT PETROLEUM CORPOORATION (BPC) LTD
Apart from the statutory provision in the Industrial Disputes Act for conciliation and
adjudication, BPCL has set up a Grievance Settlement Machinery known as Employee
Satisfaction Enhancement Scheme (ESES). The objectives of this scheme are to:
1. Provide an easily accessible machinery for ensuring expeditious redressal of
grievances of employees to increase job satisfaction, improve productivity and
efficiency in the organisation.
2. Provide mechanisms for prompt, impartial and fair internal resolution of
grievances at the lowest possible level;
3. Improve work culture and develop overall personality of the employees; and
4. Redressal of genuine grievances of the employees, in a proactive manner.
This scheme is covering all the employees, i.e. both managerial and non-managerial
staff. Manager IR is in-charge of the ESES cell at the refinery. Any employee can
approach the ESES Cell with his grievances, but before coming to the Cell he must try
to get his grievance redressed by his immediate superiors. However, it is not necessary
for him to approach the ESES Cell through his line manager; he may do so directly. On
receipt of the grievance, the ESES Cell will look into the entire facts and discuss the
matter with the employee/employees concerned, their superiors and the other staff
connected with the subject, in an endeavour to resolve the issue amicably. If the issue
is not resolved, then the Cell will discuss the matter at higher levels. If the grievance still
remains unresolved, the Cell will refer the matter to the Deputy General Manager (ESE),
who will then try to resolve the problem.
The employees also have the option of raising the issue at higher levels in the ESE Cell.
If all these efforts prove futile, the case will be forwarded to the Executive Director
(Corporate Affairs) by the Cell, for placing the matter before the Executive Council or
the Apex Council. The decision of the Executive Council or the Apex Council will be final
and binding on the employees.
In the past 10 years there were mainly two types of disputes: (1) Termination because
of unauthorised absenteeism, and (2) Union issues.
There was one major strike for a period of five and a half months when a demand
pertaining to revision in terms and condition of service was raised. This strike was
declared illegal and the High Court upheld the strike as being unjustified. After 1982,
sporadic day-long strikes were held — once on 31 Dec., 1995 and again on 18 April,
2000. On another two occasions — once on 19 October, 2000 and again on 4 June,
2001 they went on go-slow movement for more than two months. However, the issue
could be sorted out for such one day strikes amicably through consultation.
About 99 per cent of grievances are resolved bilaterally. Due to the positive attitude
and trust shown in the grievance redressal system there does not appear to be
any shortcoming. Approximately, 19 collective demands and individual demands
had been reported for conciliation by the unions and almost 75 per cent of the
disputes were resolved. In so far as judicial scrutiny is concerned seven cases were
referred to adjudication out of which four were related to dismissal because of
absenteeism and cases pertaining to fraud, dishonesty, etc. All these cases were solved
by lower courts within two to four years. Presently, there are four cases pending in
the CGIT.
An Overview of the IR Status in the five Chosen Regions
Enterprise-wise study of Industrial Relations status in the chosen 18 enterprises in

different parts of the country encompassing various industrial activities reveals that
some of the enterprises have been able to establish harmonious relationship through
innovations and style of functioning while there are others who function in a routine
manner and in a way not closely involved and ultimately settle for FOC. The conciliation
officers are not always persuasive in nature, do not deal with the parties in a friendly and
committed manner, fail to explain the implications for non-settlement through conciliation
and consider submission of FOC as the safest and quickest method of disposal. Similarly,
the adjudication process is cumbersome and time consuming. The Ministry of Labour
is required to take an objective view before referring a case to CGIT or rejecting the
same as there is no prima facie case. Mere consideration of the representatives of the
union or group of workers is not enough. Further, because of multiplicity of unions and
absence of check off system in the unions context of stay order sought by BMS any
objective assessment of representatives is not always possible. Doubts for the rational
for reference to CGIT as also rejection were expressed. For many of the cases a
reference to earlier decisions on identical disputes would have reduced the number of
disputes. However, this process of reference takes a long time. After receipt of the
reference, the concerned CGIT Bench initiates action for processing and directs the
parties to once again submit their claims before the first hearing is scheduled. In fact, in
some of the cases for first hearing itself takes three to six months’ time. Again, there are
postponements of hearings sought by parties causing further delay. Delay is also caused
as the turn of the fresh cases would come only when the backlog is cleared if the
Presiding Officer happens to be in position. Often, the vacancies remain vacant for
years and cases pile up as was the case in Dhanbad Bench I.
The problems as briefly stated above and related issues have been elaborated for each
of the enterprises covered under the study and discussed in this paper. While doing so,
corrective measures — both administrative and legal — have also been suggested
here.
MEASURES TO IMPROVE CONCILIATION
Bizarre Suggestions for Empowerment
It is widely believed that with further strengthening and more empowerment conciliation
can play the most effective role in settling industrial disputes. There have been
suggestions from different quarters — such as representatives of management, trade
union leaders and labour law practitioners — to take initiative to strengthen and add
more powers to the existing conciliation machinery. These suggestions relate to adding
more teeth to the authority of RLCs and ALCs and making the decisions emerging from
conciliation legally binding on both the contending parties. A few experts have even
suggested that the management and employees’ organisations (TUs) should be given
notice to submit necessary documents within a fixed time (say, a fortnight from the date
of reference to conciliation), failing which the violation would be punishable by fine or
imprisonment. Obviously, these suggestions are either half-baked or vague general
observations. Those who press for legal empowerment often forget the very nature and
spirit of conciliation to strike a compromise through mutual consultations between
employer and employees, with both parties sharing the moral obligation to honour the
mutually-agreed upon decisions. As a voluntary means of settling disputes, conciliation
proceedings need to be conducted on the basis of mutual understanding and sincerity
of purpose of both the parties and is largely influenced by the capability, tact and
perseverance of the conciliation officer acting as a mediator. The Act clearly states,
“The appropriate Govt. may, by notification in the official Gazette, appoint such number
of persons as it thinks fit, to be conciliation officers, charged with the duty of mediating
in and promoting the settlement of industrial disputes [Section 4(1`), ID Act 1947]. Simply
arming the officer with more legal powers will not help. Rather it might lead to more
complications due to a natural tendency to drag the case to the law courts for a show of
strength in the name of justice. Therefore, some alternative actions are suggested here
for the much-needed strengthening of conciliation machinery without impairing its spirit
and contents. These steps are mentioned below:
Toning Up Efficiency of Conciliation Officers
In view of the pivotal importance of conciliation officers much of the success of conciliation
depends on the efficiency of this officer. By using tact and persuasion a conciliator
should be successful in clinching a settlement. It is, therefore, suggested that while
appointing conciliation officers for a short or long period the right kind of candidates
with proper knowledge and aptitude should be chosen for the job. It is also necessary
to provide adequate facilities for training and orientation for enabling these officers to
acquire adequate professional capability in conducting conciliation proceedings
successfully. The possibility of entrusting this task to some reputed institution
having the relevant specialized know-how and training infrastructure could be
explored. Field study has revealed that there is a consensus on the viewpoint that
continuous training for upgrading the skills is a useful input for producing efficient
conciliation officers.
Strengthening of conciliation machinery also calls for an increase in the number of

conciliation officers who are often overburdened with a large number of cases in addition
to performing several other judicial duties concerning administration of labour laws
assigned to them. The filling up of vacancies, posting and transfers should be done
speedily for avoiding administrative delay. A region-wise assessment of the growing
workload vis-a-vis the number of conciliation officers in position will give the concrete
idea about the problem and help to identify weak spots and take steps to make good the
deficiency of staff wherever it is found. It is gathered that at present, on an average,
there are 80 to 90 conciliation officers per month whereas 30 should be the optimum
number as recommended by some experts. This fact shows that at present there is a
need for strengthening the conciliation machinery at least in areas with high incidence
of disputes with the induction of more conciliation officers, since overburdened officers
can hardly work as efficiently as is necessary.
Cases to be Dealt with at Appropriate Levels and Monitored
As far as major cases are concerned they should be dealt with at a higher level by the
RLC. The Deputy Chief Labour Commissioner, wherever available, may also share this
burden of conciliation by taking up conciliation of select cases of a complex nature at
the top level. This is already being done in a few regions and is required to be replicated
more widely. Deputy Chief Labour Commissioner should be provided with computer-
ised monitoring facilities so that he may effectively review the progress of conciliation in
his jurisdiction regularly and report to the Ministry of Labour once in three months and
also guide the conciliation machinery for better functioning.
Reducing Time Lag Involved in Conciliation
On an average, conciliation now takes a period of three to 12 months to arrive at a

settlement. In some cases settlement could be reached even within a period of two
months or less. It seems reasonable to set an outer limit of three months for such a
settlement through the conciliation proceedings. This, however does not imply that the
safest course of giving an FOC should be resorted to without exploring all the possibilities
for a settlement. It has to be recognised that depending on the special need, certain
flexibility should be allowed in the schedule. It is possible that an extension of one month,
allowing one or two more meetings might bring about a settlement. It was observed in
one case that both the parties were pressing for FOC as not a single one of them was
willing to relent and the adjudication might give them relief. The conciliation officer,
however, was hopeful of resolving the case after meeting officials at a higher level with
his formula and as such he flatly refused the proposal for FOC saying that the decision
for FOC is to be taken by him. Ultimately, the case was resolved. Cutting short the time
lag, simplifying the procedural formalities and in-depth analysis of the raised issues
with the concerned higher officials are the necessary dimensions of success which
deserve serious attention from the appropriate authority. Among the many expert
suggestions on this issue, two mentioned below merit consideration for enhancing
effectiveness of the machinery:
1. Adequate number of area inspecting staff with knowledge of labour laws should
be appointed so that delay in inspection may not lead to waste of time. This itself
is the initial stage of conciliation and the mutual friendship developed during the
first meeting might set the tone for mutual understanding and ultimate settlement
of dispute; and
2. With regard to representation from the employees and management it should
be insisted upon that only officers of adequately high rank with powers to take
decisions or those authorised to respond should participate in conciliation. This
will cut short the time lag in arriving at spot decisions on certain issues for
settlement without leaving any room for time lag in awaiting approval from the
headquarters or corporate office. There are even instances of difference of
opinions between the enterprise-level management and the corporate office
causing delay in settling disputes through conciliation.
Removing Lacunae at Pre- and Post-Conciliation Stages
A broader view of conciliation needs to be taken for the purpose of enhancing its
effectiveness. Though the main focus of improvement is on the quantitative and qualitative
aspects of conciliation officers it is necessary to remove the lacunae spotted at pre-
conciliation and post conciliation stages as well. At the pre-conciliation stage, the
enforcement officials (carrying out inspection) should be given proper training to acquire
the required knowledge and background (especially specific legal knowledge) to tackle
the dispute cases tactfully before they reach the stage of conciliation proceedings. In
fact, in certain cases, the Inspecting Officers could resolve the disputes by clarifying
the legal issues. Again, at the post-conciliation stage careful steps should be taken to
avoid delay in preparing reports and implementing the decisions. At present many of the
inspecting staff drawn from different departments do not have the required knowledge
of labour laws and this often results in improper handling of grievances and disputes at
the very initial stage.
Peripheral Considerations
Among the important peripheral considerations particular mention may be made of the
provision of adequate supporting staff and infrastructure to the Conciliation Officers,
stricter enforcement of labour laws and provision of welfare amenities to the employees.
There is one useful suggestion for introducing a Social Security Identity Card specially
for migrant workers with an omnibus listing of all benefits presently offered by our social
security system. There will be regular entries whenever the beneficiary gets the benefits,
thus showing the latest position. This will prove useful for both regular and casual labour
and help avoiding disputes. This suggestion, therefore, deserves consideration for
implementation. All these indirect factors help to accelerate the progress of conciliation
and pave the way for the speedy settlement of disputes. After all, conciliation is a
persuasive technique in which the mental preparedness of both the parties for reaching
a compromise is a very important pre-condition.
Exploring Scope of Pre-Trial Conciliation
If by adding one more step it is possible to provide a last chance to successful

conciliation, it is considered worth the trial. The reason is obvious. After the cases are
referred to CGIT, a “pre-trial conciliation” will save the great botheration of reference to
adjudication involving long time-lag and substantial expenses. One more effort should
be made for a pre-trial conciliation of hopeful cases under the watchful guidance of the
Presiding Officer of the concerned CGIT. Guidance of judiciary enjoining highest respect
will no doubt try to ensure natural justice. It might be started as a fresh case involving
the issue of notice, filing of claim, submission of documents and evidence, providing
fair chance of hearings and arguments and pronouncement of awards. Each of these
steps will be time bound. The MOS will be signed by both the parties as also by the
Presiding Officer of the CGIT. There will be no provision for further appeal. The
implementation of award will be done within one month’s time. If, however, this attempt
becomes unsuccessful in reaching an agreement the same may be sent by the
Presiding Officer of CGIT (A) to the Presiding Officer of CGIT (B) in a neighboring area
for judicial review. This procedure has been suggested by one of the sitting Presiding
Officers as judicial review can not be taken up by him again. Likewise, the Presiding
Officer of CGIT (B) may take up screening of the cases referred to him by the Ministry
and try to resolve the hopeful cases. Unresolved cases may be sent to his counterpart
in the neighboring CGIT (A). This suggestion has been discussed in two recent ILO-
sponsored workshops held at Bangalore and Mussoorie which were attended by the
Presiding Officers of the CGITs. Being originally conceived by judicial experts it combines
the merits of guided conciliation with the sanctity of court proceedings and at the same
time involves simple procedural formalities. We, therefore, feel that it deserves to be
given a fair trial.
Introducing Lok Adalats as a New Dimension
There is an alternative suggestion for introducing Lok Adalats in which the Presiding
Officers of CGITs might be made the Chairman. On the lines of the provisions of Legal
Services Authorities Act 1987 enacted by the Government of Punjab this needs to be
further pursued. Free legal Aid Committee can provide the required legal advice free of
cost to both the parties as and when needed. However, the awards, after getting the
seal of a court, will serve the purpose of a decree. There will be no provision for an
appeal against the judgement of the Lok Adalat which will be binding on both the parties.
This proposal for Lok Adalat was deliberated upon in the Consultations organised in
Mussoorie jointly by the ILO, India Office, ILO, SAAT and the Ministry of Labour during
September 2001. At present the Industrial Disputes Act 1947 does not have any
provision for Lok Adalat among the prescribed means of dispute settlement. Therefore,
any Government decision to introduce this new means will require the insertion of a
suitable clause in the Act prescribing the authority, composition and functioning of Lok
Adalat in settling industrial disputes.
IT Application in Conciliation
Yet another important suggestion for introducing the amazing tools and techniques of
Information Technology (IT) deserves early implementation. By facilitating prompt
documentation of different categories of cases and listing out the judgements and also
by speedy and less expensive retrieval of data, IT can reduce the workload of conciliators
and Presiding Officers of CGITs and also guide the contending parties with the necessary
knowledge and legal precedents. Once this documentation is done, the parties will
know the judicial pronouncements on all types of industrial disputes including disputes
they propose to raise. There is a lack of co-ordination in the processing of cases of
disputes received by Regional Offices. Often it has been found that Conciliation cases
are dealt with in a routine manner and hence there is delay in deciding the cases.
Details about the cases and the decisions taken earlier for identical issues are also not
readily available. The ready availability would no doubt help the conciliation officers to
take a view about their admissibility and thereby reduce their workload. The discussions
for conciliation are not planned for completion of proceedings with any schedule. There
is, therefore, a need for close monitoring of the progress of proceedings with an indication
of a time frame. Apart from weekly reporting of the progress by each conciliation officer
to the RLC, it would be appropriate to monitor the progress at the level of Deputy Chief
Labour Commissioner concerning all the regions under his jurisdiction. Taking advantage
of the information technology, the Deputy Chief Labour Commissioner may obtain reports
from RLCs and feed them in his computer for guiding those who may be lagging behind
and initiate compiling information which could form the basis for intimating progress to
the office of the CLC and the Ministry.
Skill Development and Recognition of Services
During our study, it was observed that some of the devoted officers have already
acquired expertise in dealing with conciliation process with great interest and effort and
aspire to acquire more knowledge. While we would recommend for some incentive
by declaring them Conciliation Officers of the month for each of the regions as was
the earlier practice. This may be re-introduced for recognising the good work done by
them. The conciliation officers belonging to a different stream and now a part of the
joint cadre after merger would require training which could be better organised not
only through class lectures but on-the-job filed training in the art of conciliation. Once a
fully trained cadre is developed, it has also to be ensured that the trained cadre
is not subjected to routine transfers for taking charge of duties not related to
conciliation.
SUMMARY OF SUGGESTIONS FOR IMPROVEMENT OF

CONSULTATION/CONCILIATION
Suggestions in Brief Action Points
Based on the encouraging experience of sample Management should make more frequent use
enterprise it is advisable to utilise the consulta- of their method of exploring wider areas of
tive committees and periodical meetings of man- labour management participation. These
agement and Trade Unions more effectively. consultative committees at enterprise and
corporate levels will verbally serve the purpose
of Works Committees.
More reliance on conciliation should be the Appropriate government may make a

policy and for this purpose the machinery needs policy declaration urging the implementing
to be strengthened. machinery to utilise conciliation machinery
more effectively.
As part of the strengthening of machinery, the Some reputed training institution with the
quality of services of conciliation officer may be requisite knowhow and infrastructure may be
improved through training and guidance so that entrusted with the training of conciliation
he may use tact and persuasion for clinching officers.
a settlement through mediation.
The burden of Conciliation Officers’ work may Region-wise assessment of growing work
be reduced by deploying adequate number of load vis-a-vis number of officers in position may
personnel so that each officer may be required be carried out by the Department in order to
to deal with on an average 30 cases per month make good the deficiency of staff, Filling-up of
instead of 80 to 90 cases handled at present. vacancies, transfer, etc. should be done
promptly.
Some selected major cases may be dealt with Ministry may take action in providing neces-
at the appropriate level by the Deputy CLC sary computer facilities and fund support for
and RLC. The Deputy CLC may be entrusted this purpose.
with the monitoring of on-going conciliation and
reporting the progress once in every three
months to the Ministry of Labour.
The usual time-lag involved in conciliation needs For completing conciliation the appropriate
to be reduced. It is observed that the average Government may fix a time limit of three
time taken for settlement through conciliation months allowing some flexibility only in
is three to six months. special cases. Instructions may be issued to
the Conciliation Officers stressing the need
Contd.
Suggestions in Brief Action Points
for avoiding the short-circuiting of disposal

by submitting routine FOC reports with no
mention about the effort made by him in
resolving the disputes.
As revealed by field study pre-conciliation ef- Adequate number of Area Imparting Staff may
forts may have to be made successfully by be posted to avoid delay inspection. These
area inspection staff to resolve the dispute at staff should be given proper training for
the initial stage and this calls for adept handling dispute cases tactfully and also give
handling in a friendly environment at the necessary exposure to Labour Laws.
earliest opportunity.
At the post-conciliation stage, when a case is The Office of CLC may formulate a detailed
referred to CGIT/Labour Court one more effort plan for pre-trial conciliation in consultation
for a pre-trial conciliation by the Presiding with the Presiding Officers of CGITs and ob-
Officer, CGIT is suggested as a last chance tain the Ministry’s approval for launching it.
to arrive at a settlement which can be The modalities once decided for a start could
formalised as MOS signed by both the parties be improved upon as and when required. This
and counter-signed by the Presiding Officer. procedure may not call for any amendment in
The award which will be binding on both the the ID Act. If it proves to be a success the
parties will also enjoy the credibility of procedure may be institutionalised.
impartial justice, as it is attempted by a person
of the rank of High Court/ District Court Judge.
When Presiding Officer (A) of concerned
CGIT fails to arrive at a settlement he will
transfer the case to Presiding Officer (B) of
neighbouring areas of CGIT for settlement
and voiceovers if Presiding Officer (B)
fails to resolve the dispute in the pre-trial
cancellation.
The introduction of modern Information The Ministry may formulate a plan scheme
Technology (IT) will facilitate prompt with necessary physical and financial details
intercommunication and also documentation and obtain clearance for a start.
of various dispute cases showing the court
judgements/settlements by conciliation
machinery which will help judges/ conciliation
officers to follow precedents to settle similar
cases. The time taken by the Ministry and the
adjudication machinery (CGIT) in appraising
each other of the necessary details will be
considerably curtailed.
5
Alternate Dispute Settlement
Mechanisms in India
A Study of Industrial Adjudication
Sanjoy Ghose
INTRODUCTION
This paper examines the alternative dispute settlement mechanisms in India primarily
in the context of settlement of industrial disputes. Towards this end, this paper takes a
look at the history and experience of adjudication under the Industrial Disputes Act,
1947 (ID Act), a law that had promised to herald a new justice regime for industrial
adjudication. It examines reasons why the ID Act regime has failed to deliver leading to
rising dockets and growing industrial unrest. It then proceeds to trace the growth of the
Lok Adalat system and examines whether Lok Adalats can succeed where the ID Act
failed. It concludes with a peek at some strategic intervention for effective and speedy
disposal of pending labour cases.
The paper therefore is structured in the following manner:
z The evolution of the dispute settlement machinery under the ID Act
z The conciliation process
z The key issues in labour court administration—reasons of delay
z Evolution of Lok Adalats
z Strategies for speedy disposal of industrial disputes
EVOLUTION OF THE MACHINERY UNDER THE ID ACT

It is ironical that industrial law in India evolved at a time when the colonial state was
grappling with the turbulence it had been thrown into by the Great War at the turn of the
last century. The limited objective of any legislative intervention was to bolster the War
Economy by ensuring industrial discipline.
Trade Disputes Act, 1920: In the year 1920, the first Trade Disputes Act was enacted
constituting Courts of Inquiry and Conciliation Boards. The law did not make any
provision for creating or establishing any machinery for the settlement of “industrial
disputes”; its focus was the regulation of strikes which could potentially cripple the
economy1 . The rendered illegal:
z Strikes in public utility services without a month’s written notice;
z Strikes whose object was not the furtherance of a ‘trade dispute’;
z Strikes aimed at inflicting hardship or coercing the Government; and
z “Sympathetic” strikes and provision of fraternal funds in furtherance or support
of an illegal strike.
Trade Disputes Act, 1929: This law was repealed and replaced by the Trade Disputes
Act, 1929, which was the precursor to the present ID Act. It facilitated state intervention
in the settlement of industrial disputes by arming the government with powers that could
be used whenever it considered fit to intervene in any industrial dispute. While it also
addressed strikes in public utility services and general strikes affecting the community
as a whole, its main purpose was to create a conciliation machinery to facilitate the
peaceful resolution of industrial disputes. Initially, the law made provision for only ad hoc
Conciliation Boards and Courts of Inquiry. However, in the year 1938, an amendment
authorised the Central and Provincial Governments to appoint Conciliation Officers for
mediating in or promoting the settlement of industrial disputes.
The National Commission on Labour, 1969 noted2 :

“This Act, however, was not used extensively, as the government policy at that
time continued to be one of laissez faire and selective intervention at the most.
Where Government intervened, the procedure consisted of appointing an
authority which would investigate into the dispute and make suggestions to the
parties for settlement or allow the public to react on its merits on the basis of an
independent assessment.”
Defence of India Rules: The Second World War led to the promulgation of the Defence
of India Rules. Rule 81(A) empowered the appropriate Governments to intervene in
industrial disputes, appoint industrial tribunals and to enforce the award of the Tribunals.
In other words, this Rule was intended to provide speedy remedies for industrial disputes
by:
z Referring disputes compulsorily to conciliation or adjudication;
z Making the awards legally binding on the parties;
z Prohibiting strikes/lock-outs during conciliation or adjudication proceedings; and
z Placing a blanket ban on strikes not arising out of genuine trade disputes.
Alternate Dispute Settlement Mechanisms in India : A Study of Industrial Adjudication 83
Emergency Powers (Continuance) Ordinance, 1946: During the war period this
provision led to the development of the industrial law in the country. The Tribunals
constituted under this law laid down some important principles while deciding upon a
large variety of industrial disputes relating to various aspects of industrial relations. The
said Rule was due to lapse on 1 October, 1946. However, it was kept alive by the
Emergency Powers (Continuance) Ordinance, 1946 which also provided for framing
and certifying of Standing Orders covering various aspects of service conditions including
the classification of employees and procedures for disciplinary actions. The object being
to require employers to define with sufficient precision the conditions of employment
and make the said conditions known to the workmen employed by them.
The ID Act: The first legislative effort undertaken by the Government of India under the
five Year Plan was the passage of Industrial Disputes Bill which was introduced in the
Central Legislative Assembly on 8 October, 1946. The Bill was passed by the Assembly
in March, 1947 and it was brought into the effect from 1 April, 1947.
The ID Act was largely modelled on the following two laws of the United Kingdom:
1. The Conciliation Act, 1896, which provides for a conciliation process; and
2. The Industrial Courts Act 1919 which set up Industrial Courts to enquire into and
decide trade disputes. However, unlike these statutes, the Act provided, for the
first time, a compulsory adjudication of industrial disputes.
In Workmen of Demakuchi Tea Estate (Assam Chah Karmachari Sangha) vs.

Dimakuchi Tea Estate3 , S.K. Das, J., speaking for the majority, has succinctly summed
up the principal objects of the Act as follows:
z Promotion of measures for securing and preserving amity and good
relationship between the employer and workmen;
z Investigation and settlement of industrial disputes;
z Prevention of illegal strikes and lock-outs;
z Relief to workmen in the matter of lay-off and retrenchment; and
z Collective bargaining.
Krishna Iyer, J. in Life Insurance Corporation of India v. D.J. Bahadur4 supplemented

thus:
“The Industrial Disputes Act is a benign measure which seeks to pre-empt
industrial tensions, provide the mechanics of dispute-resolutions and sets up
the necessary infrastructure so that the energies of partners in production may
not be dissipated in counter-productive battles and assurance of industrial
justice may create a climate of goodwill.”
Transition from colonialism to welfare: The transition of the country from a colonial
state to a welfare state significantly impacted the shaping of the ID Act. The law
provided for a machinery and a forum for the investigation and settlement of industrial
disputes. It reflects the desire of its farmers to end the exploitation of the workmen and
towards that end to permit collective bargaining. The ID Act requires the state to compel
the parties to resort to industrial adjudication and for that purpose different forums have
been set up for the resolution of such disputes. The principal techniques of dispute
statement provided in the Act are as under:
1. Collective Bargaining
2. Mediation and Conciliation
3. Investigation
4. Arbitration
5. Adjudication
The Indian Industrial law was poised for a monumental take-off at this juncture as the ID
Act provided for the creation of a specialised adjudicatory mechanism which was a
departure from the common law adversarial dispute settlement machinery and thereby
opened up new vistas till then unknown to law. The Act removed all fetters known to the
adversarial justice system for the adjudicators constituted under it. The Conciliators or
Adjudicators were not required to follow the classical procedural or substantive law.
The only guiding principle was the securement of industrial peace and justice. However,
the procedure observed would have to be in consonance with the principles of natural
justice.
Powers of authorities: Section 11 of the ID Act provided that industrial adjudicators
and authorities constituted under the ID Act such as Conciliation Officers, Boards, Courts
and Tribunal could:
z Follow such procedure as they thought fit;
z With reasonable notice, enter into any premises;
z Exercise powers of a civil court in respect of enforcing attendance of witnesses,
production of documents, etc.; and
z Appoint one or more persons having special knowledge of the matter under
consideration as an assessor or assessors to advise them.
Section 12 of the ID Act, addressing the duties of Conciliation Officers, clearly stated
that a conciliation officer could do all such things as he thought fit for the purpose of
inducing the parties to come to a fair and amicable settlement of the dispute. This
indicates the wide sweep of powers conferred upon the new authorities constituted
under the ID Act who had full liberty and discretion to secure a peaceful settlement of
industrial disputes.
Power to create, modify and alter contracts: The scope and parameters of industrial
adjudication and the powers of the adjudicator were called into question for the first time
before the Federal Court of India in the case of Western India Automobile Association
vs. The Industrial Tribunal, Bombay & Others5 . The Court held that:
“….although the employer may be unwilling to do so, there will be jurisdiction in
the Tribunal to direct the employment or non-employment of the person by the
employer. This is the same thing as making a contract of employment when the
employer is unwilling to enter into such a contract with a particular person.
Conversely, if a workman is unwilling to work under a particular employer a
trade union may insist on his doing so and the dispute will be about the
employment of workman by the employer and thus become an industrial dispute
subject to the award of the Tribunal. Therefore if the bringing about of such
relationship is within the jurisdiction of the Industrial Tribunal, because such
disputes are covered by the definition of the expression ‘industrial dispute’ there
appears no logical ground to exclude an award of reinstatement from its
jurisdiction. It can equally direct in the case of dismissal that an employee shall
have the relation of employment with the other party, although one of them is
unwilling to have such relation.”
Thus the Court recognised the fact that the common law limitation which debarred the
specific performance of a contract of personal service was not applicable to industrial
adjudication.
Discharging “judicial functions”: The Supreme Court revisited this issue soon
thereafter in Bharat Bank Ltd., Delhi vs. Employees of the Bharat Bank Ltd., Delhi 6
where it was called upon to decide whether industrial adjudication was “judicial” in
nature, to hold that:
“….., the functions and duties of the Industrial Tribunal are very much like those
of a body discharging judicial functions, although it is not a Court. The rules
framed by the Tribunal require evidence to be taken and witnesses to be
examined, cross-examined and re-examined. The act constituting the Tribunal
imposes penalties for incorrect statements made before the Tribunal. While the
powers of the Industrial Tribunal in some respects are different from those of an
ordinary civil Court and it has jurisdiction and powers to give relief which a civil
Court administering the law of the land (for instance, ordering the reinstatement
of a workman) does not possess, in the discharge of its duties it is essentially
working as a judicial body. The fact that its determination has to be followed by
an order of the Government which makes the award binding, or that in cases
where Government is a party the legislature is permitted to revise the decision,
or that the Government is empowered to fix the period of the operation of the
award do not, to my mind, alter the nature and character of the functions of the
Tribunal. Having considered all the provisions of the Act it seems to me clear
that the tribunal is discharging functions very near those of a Court, although it is
not a Court in the technical sense of the word.”
In the same judgement the Court noticed the decision in Western India Automobile
Association Case (cited supra) to observe that:
“The powers exercisable by a tribunal of this nature were considered in a judgment
of the Federal Court of India in Western India Automobile Association vs.
Industrial Tribunal, Bombay and it was observed that such a tribunal can do
what no Court can, namely, add to or alter the terms or conditions of the contract
of service. The tribunal having been entrusted with the duty of adjudicating a
dispute of a peculiar character, it is for this reason that it is armed with
extraordinary powers. These powers, however, are derived from the statute.
These are the rules of the game and it has to decide according to these rules.
The powers conferred have the sanction of law behind it and are not exercisable
by reason of any discretion vested in the members of the tribunal. The
adjudication of the dispute has to be in accordance with evidence legally adduced
and the parties have a right to be heard and being represented by a legal
practitioner. Right to examine and cross-examine witnesses has been given to
the parties and finally they can address the tribunal when evidence is closed.
The whole procedure adopted by the Act and the rules is modeled on the Code
of Civil Procedure. In my opinion, therefore, the Industrial Tribunal has all the
necessary attributes of a Court of Justice. It has no other function except that of
adjudicating on a dispute. It is no doubt true that by reason of the nature of the
dispute that they have to adjudicate, the law gives them wider powers than are
possessed by ordinary Courts of Law, but powers of such a nature do not affect
the question that they are exercising judicial power.”
Wide discretion but subject to limits: The Apex Court in J.K. Iron & Steel Co. vs.
Mazdoor Union7 examined the nature of industrial adjudication and it yet again noticed
the Western India Automobile Association Case (cited supra) and the decision in State
of Madras vs. C.P. Saratu8 to conclude that the scope of adjudication under the Act
was much wider than that of an arbitrator making an award. The Court reiterated that
the Industrial Tribunals were not fettered by the limitations of a court bound by ordinary
law to the strict law of master and servant and that the adjudicator had the jurisdiction to
investigate disputes about any discharge and/or dismissal and, where necessary, to
direct reinstatement. However, the Court noted that :
“It is not open to the Tribunals to fly off at a tangent and, disregarding the
pleadings, to reach any conclusions that they think are just and proper.”
Distinguished from commercial arbitration: Parameters of the Industrial adjudication
were further elaborated by the Court in Rohtas Industries Ltd. vs. Brij Nandan
Pandey 9 wherein it distinguished industrial adjudication from commercial arbitration as

under:
“The discretion which an Industrial Tribunal has, must be exercised in accordance
with well recognised principles. There is undoubtedly a distinction between
commercial and industrial arbitration. Industrial arbitration may involve the
extension of an existing agreement, or the making of a new one, or in general
the creation of new obligations or modification of old ones, while commercial
arbitration generally concerns itself with interpretation of existing obligations and
disputes relating to existing agreements. A Court of law proceeds, on the footing
that no power exists in the Courts to make contracts for people, and the parties
must make their own contracts. The Courts reach their limit of power when they
enforce contracts which the parties have made. An Industrial Tribunal is not so
fettered and may create new obligations or modify contracts in the interests of
industrial peace, to protect legitimate trade union activities and to prevent unfair
practice or victimization. But an Industrial Tribunal cannot ignore altogether an
existing agreement or existing obligations for no rhyme or reason whatsoever.”
Nature of industrial adjudication: The Court in N.T.F.Mills Ltd. Vs. The 2nd Punjab
Tribunal10 examined the nature of the award that could be passed by the Industrial
Adjudicator and held that:
“The Industrial Courts are to adjudicate on the disputes between employers and
their workmen, etc. and in the course of such adjudication they must determine
the “rights” and “wrongs” of the claims made, and in so doing they are undoubtedly
free to apply the principles of justice, equity and good conscience, keeping in
view the further principle that their jurisdiction is invoked not for the enforcement
of mere contractual rights but for preventing labour practices regarded as unfair
and for restoring industrial peace on the basis of collective bargaining. The
process does not cease to be judicial by reason of that elasticity or by reason of
the application of the principles of justice, equity and good conscience.
Thus there is neither legislation nor delegated legislation in the awards which
are pronounced by the Industrial Tribunals while adjudicating upon the industrial
disputes referred to them for adjudication.”
In the said case, the Court also noted that in resolving the industrial disputes, the
appropriate Government would have the discretion to opt for one or the other of the
authorities constituted under the ID Act depending upon its appraisement of a given
situation in a particular establishment or industry.
In Patna Electric Supply Co. vs. P.E.S.W Union11, the Court called upon to decide as to
whether the Industrial Adjudicator could direct the provision of housing benefits, held
that:
“Thus there can be no doubt that an industrial tribunal has jurisdiction to make a
proper and a reasonable order in any industrial dispute; and in that sense the
respondent may be right when it contends that it was within the competence of
the tribunals below to entertain its grievance about housing accommodation
and to give it appropriate relief in that behalf. But assuming that the Tribunal has
jurisdiction to entertain the dispute, the question still remains whether, apart
from the agreement on which the tribunals have based their decision, the award
under appeal can be justified on general grounds. In our opinion, under the present
conditions the answer to this question has to be in favour of the appellant and
against the respondent. Industrial tribunals have consistently taken the view that
housing accommodation of industrial labour is the primary responsibility of the
State.”
This clearly indicated that vast powers available to the industrial adjudicator ought to be
exercised with caution and after taking into consideration the situation prevailing in the
industry and in the economy.
In Assam Oil Co. vs. Its Workmen12, while reiterating the jurisdiction of the Industrial
Tribunal to direct reinstatement of a discharged or dismissed employee, the Court held
that:
“Whether or not the termination of services in a given case is the result of the
bonafide exercise of the power conferred on the employer by the contract or
whether in substance it is a punishment for alleged misconduct would always
depend upon the facts and circumstances of each case. In this connection it is
important to remember that just as the employer’s right to exercise his option in
terms of the contract has to be recognised, so is the employee’s right to expect
security of tenure to be taken into account. It cannot, therefore, be accepted that
whenever the employer purports to terminate the services of his employee by
virtue of the power conferred on him by the terms of contract, industrial tribunals
cannot question its validity, propriety or legality.”
Therefore, the Courts recognized that Industrial adjudicator was not merely bound to
interpret and apply a contract between parties. It could examine the very fairness and
the validity of the contract itself.
In Bidi, Bidi Leaves and Tobacco Merchants Association vs. the State of Bombay13, the
Court, while reaffirming the powers of Industrial Tribunal to alter and modify the terms
and conditions of the contract between the management and the workers,
observed that:
“Indeed, during the last ten years and more industrial adjudication in this country
has made so much progress in determining industrial dispute arising between
industries of different kinds and their employees that the jurisdiction and
authority of industrial tribunals to deal with such disputes with the object of
ensuring social justice is no longer seriously disputed.”
In N.M.C. Spg. & Wvg. Co. vs.Textile Labour Association14, the Court while dealing
with the issue of bonus cautioned the Industrial Adjudicator that it should be
circumspect in the exercise of its vast powers, stating that:
“It is, no doubt, open to an industrial court in an appropriate case to impose new
obligations on the parties before it or modify contracts in the interest of industrial
peace or give awards which may have the effect of extending an existing
agreement or making a new one. This, however, does not mean that an
industrial court can do anything and everything when dealing with an industrial
dispute. This power is conditioned by the subject-matter with which it is dealing
and also by the existing industrial law and it would not be open to it while dealing
with a particular matter before it to overlook the industrial law relating to that
matter as laid down by legislature or by the Supreme Court.”
Tribunal vs. arbitrator: The Constitution Bench of the Supreme Court in Engineering
Mazdoor Sabha vs. Hind Cycles Ltd.15 distinguished the nature of proceedings before
the Tribunal and that before an Arbitrator appointed under Section 10A of the Act. The
court held that the Arbitrator though a quasi-judicial activity having some of “the
trappings of a Court” was not a judicial authority or a tribunal for the purposes of Article
136 of the Constitution of India (permitting special leave to appeal against the order of
any court or tribunal). It proceeded to observe that:
“But the fact that the arbitrator under Section 10A is not exactly in the same
position as a private arbitrator, does not mean that he is a Tribunal under Art.
136. Even if some of the trappings of a Court are present, he lacks the basic, the
essential and the fundamental requisite in that behalf because he is not invested
with the State’s inherent judicial power. He is appointed by the parties and the
power to decide the dispute between the parties who appoint him is derived by
him from the agreement of the parties and from the other source. The fact that
his appointment once made by the parties is recognised by section 10A and
after his appointment he is clothed with certain powers and has thus, no doubt,
some of the trappings of a court, does not mean that the power of adjudication
which he is exercising is derived from the State.”
Role of precedents: The Court in the D.C.M. Ltd. vs. their Workmen16 explained the
role of precedents and settled legal principles in industrial adjudication as under:
“We consider it right to observe that in adjudication of industrial disputes settled
legal principles have little play, the awards made by industrial tribunals are often
the result of adhoc determination of disputed questions, and each determination
forms a precedent for determination of other disputes. An attempt to search for
principle from the law built upon those precedents is a futile exercise. To the
Courts accustomed to apply settled principles to facts determined by the
application of the judicial process, an essay into the unsurveyed expanses of
the law of industrial relations with neither a compass nor a guide, but only the
pillars of precedents is a disheartening experience. The Constitution has however
invested this Court with power to sit in appeal over the awards of Industrial
Tribunals. But in the branch of law relating to industrial relations the temptation
to be crusaders instead of adjudicators must be firmly resisted..”
Relevant Factors: In Atic Industries vs. Workmen17 , the Court was called upon to
decide whether the Tribunal could direct the provision of free transport to workmen from
their place of residence to the place of work. The Court held that:
“The Tribunal is justified in having regard to the practice obtaining in that region
on the principle of region-cum-industry when considering the claim of the
workmen for payment of transport allowance.
Though the Tribunal cannot impose any new obligation on an employer merely
on the ground that the financial capacity of the employer is sound, nevertheless
the Tribunal when imposing the new obligation has also to consider the capacity
of the employer to bear the burden.”
Recording of reasons: That in Woolcombers of India vs. Their Workers’ Union18, the
Court was called upon to examine an award of Industrial Tribunal granting minimum
wages. The Court clarified that while the Tribunal had vide power under industrial law,
being a quasi-judicial authority it was required to record reasons for its finding. It
stated that:
“The absence of reasons in support of the conclusions is indeed a serious
flaw in an award. However, the award cannot be set aside simply on that score,
if there is evidence on the record in support of the Tribunal’s conclusions.”
From the cases noticed above, it is clear that the history of industrial law is also
the history of evolution of an alternate dispute settlement or redressal mechanism
which is not fettered or confined by the rigours of classical law. The Industrial
Adjudicator has the liberty to formulate his own procedure and to conduct
adjudication in an innovative manner not restricted by the strict laws of procedure.
In arriving at a decision it is not bound by the law of precedent. The only objective
behind the process of enquiry or adjudication should be the securing of industrial
peace and ensuring justice to the parties.
The following table illustrates the difference between the alternative dispute
resolution machinery under the ID Act and the civil law:
Table 1
Civil law ID Act
¾ Litigant can approach court directly ¾ Has to go through a process of

conciliation19
¾ Requires espousal of cause by a trade
union
¾ Requires the dispute to be referred by the
appropriate government
¾ The court can only interpret existing ¾ Adjudicator has the power to create, alter,
contracts. If termination not as per modify, vary and set aside contracts, can
contract, can claim only damages direct reinstatement in the event of wrong-
ful termination
¾ Order operates instantly ¾ Award requires to be published, govern-

ment may even reject or modify an award20
¾ Party can move for contempt in the ¾ No contempt action possible, failure to
event of disobedience implement an award is an unfair labour
practice and a party can be prosecuted
for the same21
¾ A party can appeal against a judgement ¾ Award final can only be challenged by
filing a writ petition in the High Court or
Supreme Court22
The ID Act regime, conscious of the limitations of the common law adversarial legal
system in providing a “level playing field” to the unmatched partners in production,
empowers the Industrial adjudicator to discard the judicial passivity of the regular courts
to don the role of a sentinel guarding the rights of the marginalised and the weak thereby
securing their constitutional rights. Therefore, in one sense, industrial adjudication is
not strictly a neutral or impartial process. Perhaps it is this philosophy which spurred
the Court in KCP Employees Association vs. KCP Ltd 23 to hold that:
“In Industrial Law, interpreted and applied in the perspective of Part IV of the
Constitution, the benefit of reasonable doubt, must go to the weaker section,
labour.”
THE CONCILIATION PROCESS
The Court in General Manager, Security Paper Mill, Hoshhangabad vs. RS Sharma24
summed up the role of a Conciliation Officer as follows:
“Even though a conciliation officer is incompetent to adjudicate upon the dispute

between the management and its workmen, he is expected to assist them to
arrive at a fair and just settlement. He is to play the role of an adviser and friend
of both parties and should see that neither party takes undue advantage of the
situation.”
Section 12(6) of the ID Act requires the Conciliation Officer to complete the conciliation
process and to submit a report within 14 days or within such shorter period as may be
fixed by the appropriate government. It was felt that in important and complex disputes
the limit of 14 days may not be adequate and accordingly, in 1956 the provision was
amended to permit the extension of this period by agreement in writing between all the
parties to the dispute.
In Delhi, for instance, conciliation processes have even extended up to six years. The
National Commission on Labour, 2002 (NCL) notes that in Delhi the basic labour
inspectorate is drawn from the common subordinate services cadre and it observes
that “this does not have salutary effect on professionalism in the labour department.”25
Further, Conciliation Officers, instead of donning the proactive role mandated by the ID
Act, tend to act as “mini-courts” issuing show cause notices to the opposite parties,
requiring pleadings to be completed and thereafter posting the dispute on several dates
for hearing.
The NCL 26 , distinguishes “rights disputes” i.e. disputes over dismissal, denial of
regularisation, promotion, etc., from “interests disputes”, i.e. wages, allowances, fringe
benefits, etc and concludes that conciliation has not been as effective in the former as
in the case of the latter. Recording that “conciliation has an impressive record in
interests disputes”, it recommends that it be made compulsory in case of interests
disputes but optional in the case of rights disputes.
Table 2
Year Brought Received Total No. of Strikes Success

Forward Averted Rate
1999-2000 41 742 783 741 94.6%
2000-2001 42 586 630 622 98.7%
The Central Labour Service (CLS) was created in 1987 comprising the officers of the
Organisation of Chief Labour Commissioner (Central), Labour Officers of the Central
Pool and officers of the Welfare Commissioners. The Assistant Labour Commissioner
(C) and the Regional Labour Commissioner (C) deal with conciliation. According to the
NCL, the Conciliation Services are “poorly staffed and poorly equipped”. 27 It has
recommended that enforcement and conciliation machinery at the Central and State
Governments require:
z Suitable office accommodation;
z Facilities for transport and communication, like fax machines, telephones with
STD facilities and computers;
z Residential and official telephones and means of conveyance for Labour
Commissioners; and
z Well equipped libraries.
The NCL28 has recommended that to make conciliation effective, it was necessary to
improve the status and the competence and calibre of conciliation officers through proper
recruitment, training and placement. It recommends the creation of a Labour and
Judicial Service with officers of the CLS. Future recruitment could be effected through a
competitive examination conducted by the Union Public Services Commission.
Most State Governments, as noted by the NCL29, have persons on deputation working
as conciliation officers who have no knowledge or expertise in labour laws or the
technique of conciliation. Often posts are left vacant with existing manpower trying to
make up for the deficiency. This makes a mockery of the entire process. The Hospital
Employees Union30 had moved the Supreme Court on this issue after the Delhi High
Court dismissed its public interest litigation seeking a direction to the concliation officers
to speedily complete their duties. In the said case, the Supreme Court had appointed a
Committee under the chairmanship of the present Chief Labour Commissioner of India
to give a report on the state of the labour department. Based upon the report submitted
in this case, the Delhi Government finally appointed the additional conciliation officers.
Further, the Court had directed the Central Government to consider the amendment of
the ID Act to permit direct reference of individual industrial disputes. The same was also
effected for the National Capital Territory of Delhi. Finally, the case was disposed of
noting the following principles which conciliation officers should bear in mind:
z That the notice for conciliation should indicate that only the authorised
Representative of the party who is competent to make commitments/take
decisions should attend the conciliation proceedings;
z That the pleadings of the parties may be completed before the case file is put up
before the Conciliation Officer. In any dispute once a reference is made, the file
before the Conciliation Officer should be forwarded to the adjudicating authority
and should be deemed to be pleadings before it unless a party seeks leave to
furnish additional pleadings;
z That the conciliation officer should not grant more than three adjournments and
the reasons for the adjournment should be clearly recorded;
z That in case disputes covered under Section 2A of the Act, if the conciliation is
not concluded within 14 days then automatically a failure report should be given
unless both parties in writing agree to continue the conciliation proceedings;
and
z Inspectors should be given training in Labour Law prior to their appointment so
that minor disputes at their level can be resolved and such matters do not have
to go into conciliation and Conciliation Officers should not forward disputes for
investigation in a routine manner.
KEY ISSUES IN LABOUR COURT ADMINISTRATION
Delay in references: That upon receipt of a failure report from the Conciliation Officer,
the appropriate government is required to refer the industrial dispute to a Labour Court
or a Tribunal. While several decisions have by now clearly established that references
should be made expeditiously and that in deciding on whether to make a reference, the
appropriate government cannot go into the merits of a dispute31 , it is found that the
process of making references takes months; further, many references are rejected by
going into the merits of a dispute. This compels the parties to move the High Courts in
writ jurisdiction and results in delays. In individual disputes, this could either lead to
grant of more back-wages or even denial of relief of reinstatement/back-wages on
account of delay32 .
Delays in adjudication: That Section 10(2A) of the ID Act requires the appropriate
government while making a reference to the industrial adjudicator, to specify the period
within which the dispute is to be decided. In the case of an individual dispute, this period
is not to exceed three months. However, the adjudicator may extend this period by
recording reasons for the same, if a request is made in that respect by the parties.
However, rarely do the terms of reference prescribe any time period and disputes take
years to be adjudicated.
Infrastructure issues: The primary obstacle is the woeful lack of infrastructural
facilities. The Delhi High Court in a writ petition filed by the Delhi Labour Union33 directed
the Ministry of Labour to provide the following facilities in Central Government Labour
Courts cum Industrial Tribunals (CGIT):
z Bar room for advocates and labour law practitioners;
z Library;
z Photostat and public telephony;
z Canteen;
z Inspection Room;
z Advance Cause List; and
z Availability of Oath Commissioner/Notary Public.
Presiding Officers: The NCL notes that in respect of labour adjudication in the Central
Sphere34 :
z Has all along been based on ad hoc arrangements35 ;
z Retired High Court or District Court Judges are appointed on the basis of
availability and with no procedures for encadrement or selection;
z These judges bring with them the baggage of civil or criminal law orientation not
suited to labour jurisprudence; and
z At any point of time 50% or more of the Tribunals remain vacant on account of
non-availability of judges.36
Qualification for Presiding Officers: The NCL recommended that the qualifications
for the appointment of Presiding Officers should be relaxed to permit the appointment of
experienced conciliation officers not below the rank of Deputy Labour Commissioner
and RLC with LLB Degrees and at least 10 years experience37.
Backlog: The result of non-disposal is a large backlog of cases and delay in dispute
resolution. The NCL lists the pendency status of CGITs as follows38 :
Table 3:
The number of Industrial Disputes and Applications handled by the CGIT-cum-
Labour Courts During the year 2000 (as on 30.11.2000)
Number of Number of
Industrial Disputes Applications
S. Name of B/F as on Received Disposed Pending B/F Received Disposed Pending
No. The CGIT 1 Jan. During During As on As on during During as on
2000 1 Jan, 1 Jan. 30th Oct 1 Jan. 1 Jan. 1 Jan. 30th Nov.
2000 to 2000 to 2000 2000 2000 to 2000 to 2000
30th Nov. 30th Nov. 30th Nov. 30th Nov.
2000 2000 2000 2000
1. Asansol 309 97 - 406 47 4 - 51
2. Bangalore 441 78 4 515 448 - 10 438
3. Calcutta 184 41 20 205 33 21 22 32
4. Chandigarh 1374 272 19 1627 313 27 27 313
5. Dhanbad 1 1286 326 83 1529 295 29 15 309
6. Dhanbad 2 1170 82 - 1252 63 - - 63
7. Jabalpur 1229 198 62 1365 570 115 5 680
8. Kanpur 624 118 116 626 687 159 357 489
Contd.
9. Mumbai 1 189 54 40 203 66 9 1 74

10. Mumbai 2 292 112 133 271 429 432 14 847
11. New Delhi 1057 108 80 1085 350 132 64 418
12. Jaipur 141 67 92 116 27 39 27 39
13. Lucknow 31 205 23 213 - 232 190 42
14. Nagpur 71 166 29 208 - - - -
15. Chennai - 88 21 67 - 111 103 8
16. Bhubaneswar - 23 - 23 - - - -
17. Hyderabad - - - - - - - -
Total 8389 2035 722 9711 3328 1310 835 3803
Procedural issues: Though, as we have noticed, the Industrial Adjudicator is empow-

ered with sweeping powers to address industrial disputes, as most courts and tribunals
are manned by judges with little orientation to labour jurisprudence, they tend to function
as ordinary judges following the Civil Procedure Code and treat an industrial dispute
just as any ordinary civil litigation. Thus, on an average, at a conservative estimate in
Delhi for example, the course of an industrial dispute would proceed as follows:
Table 439
Stage What Should have been Done What is Done Time /
Mths
Conciliation Proactive counselling and Mechanical completion of pleadings.
generation of settlement options Even disputants treat this process 12
as a formality and an unnecessary
waste of time and do not depute
senior officials authorised to take
immediate decisions.
Reference Immediate upon failure report Repeated representations and often 12
further hearings
Pleadings Within a month, direct parties to Adjournments spanning over 18
file additional statements only if months to complete the pleadings.
pleadings before the conciliation Routinely giving time to file rejoin-
officer are not adequate ders
Evidence Can be recorded by appointing Several months to complete 24-48
commissions. Should require the evidence. Also depends upon the
statement of claim/written them- number of witnesses. Government
selves to be in the form of officials who get transferred create
Contd.
Stage What Should have been Done What is Done Time /

Mths
affidavits to avoid duplication another havoc. Courts grant liberal
adjournments. Orders proceeding ex
parte are set aside for the asking
and minimal costs are imposed
Award Within a month of close of Depends upon the forum and the 3-6
evidence and arguments as Presiding Officer (the track record
contentions remain fresh in the of the CGITs leaves much to be
mind of the Presiding Officer desired)
Publication Within 15 days of the award In Delhi specially, this publication 3-12
often takes months.
Implement- In the case of PSUs there should PSUs have vast funds and fear of
ation be immediate implementation vigilance inquires prompt officials to 6–
challenge each and every award.
Most challenges are belated and
that too after the workmen have ini-
tiated recovery proceedings or
launched prosecution for failure to
implement the award.
Non-implementation of awards: The awards of the Labour Courts and Tribunals are
often not implemented by the employers especially when the litigant is the Government
or a Public Sector Unit (PSU)40 . The existing execution provisions under the ID Act are
as follows:
Section 33C(1): Application for computation by the Labour Commissioner of
money due under an award. It has been found that despite having secured an
award in their favour, the Ministry routinely rejects applications of workmen
under Section 33C(1) directing them to revert to the CGIT to have the amount
computed by it under Section 33C(2). This means another round of litigation.
The Court has held that such action amounts to harassment of a workman41.
Section 29/Section 2(ra): Application to the Labour Commissioner to sanction
prosecution of the management for failure to implement the award. These
proceedings rarely end in prosecution especially if the target is a fellow
bureaucrat heading a PSU who is responsible for implementing the award.
Therefore the proceedings are kept pending for years. Recently, the Delhi High
Court has held that such proceedings should be completed within six months42.
The NCL has recommended that the Labour Court itself be empowered to
issue decrees or initiate contempt proceedings for non-implementation or non-
compliance of awards43 . It has also recommended that all employing Ministries

should be advised to implement awards or sanction prosecution within one
month of the matter being referred, failing which it would be deemed that
sanction has been granted.
Writ Petitions: Often the management, especially the PSUs, belatedly challenge the
awards of the CGIT/Labour Courts by filing writ petitions in the High Court under Articles
226 and 227 of the Constitution of India and obtain stay of operation of the award. However,
Section 17B of the ID Act requires the employer then to pay wages to the workman
during the pending of the proceedings before the High Court in cases whether the award
of reinstatement is challenged. The case could take years and during its pendency,
public funds are expended by paying wages without extracting any work from the
concerned workman. Often these awards are challenged only when the Labour
Department sends a notice of implementation. Therefore wages under Section 17B
have to be paid from the date of the award and this payment is not recoverable44.
According to the NCL in 70 to 80 per cent of the writ petitions, the management fails, but
the decision of the High Court comes after three to five years, or even after seven to
eight years45.
Lack of co-ordination and mismanagement: The NCL notices that the Supreme Court
had directed the Government of India to set up a committee consisting of representatives
of the Ministry of Industry, the Bureau of Public Enterprises and the Ministry of Law to
monitor the disputes between ministries and PSUs46. This committee was required to
clear any case to be filed by the Department/PSU. However, routinely writ petitions are
filed arraying the Ministry of Labour and Enforcement Authorities as parties without
following this procedure. One factor which has been cited as the reason for indiscriminate
challenge to awards of labour courts/tribunals is the fear of the concerned official that
there would be an objection/inquiry from the vigilance department. This fear could be
allayed by requiring every case to be cleared by the said inter-departmental committee.
Other reasons why PSUs may be reluctant to settle cases inlcude:
z Lack of personal accountability/responsibility-public funds being expended in
litigation and therefore does not hurt anybody if the matter drags on;
z Desire to set an example or to avoid the impugned award from being a
precedent for other workmen;
z Vindictiveness of the concerned superior official; or
z Lack of interest on the part of the panel lawyer to expedite a speedy resolution.
EVOLUTION OF THE LOK ADALAT SYSTEM
Opting out: In this rather dismal backdrop of a dream “alternative dispute settlement”
regime gone awry, let us examine the other developments in India towards alternatives
to the regular legal system. We shall take a look at the Lok Adalat which translated
literally means “People’s Court”. Given the fact that the Lok Adalat has been conceived
with the aim of taking justice out of the formal judicial system, such a nomenclature is
hardly complementary for the justice delivery system as every court in a democratic
republic should be a People’s Court. The concept of Lok Adalats or People’s Court can
be traced to the growing dissatisfaction with the “mainstream” legal system and society’s
yearning for an alternative47 . The Lok Adalat bypasses the following ills of the regular
legal system48 :
z Backlogs and delays;
z Costs (court fees, lawyers costs);
z Procedural formalities; and
z Adversarial justice (where one party wins and another loses).
Historical origins: As stated, the overflowing court dockets, and the woeful delays in
the justice dispensation machinery spurred efforts at securing alternative methods of
dispute resolutions. Many simply exited from the justice system and resorted to
extra-legal and often illegal means to resolve conflicts. Others drew inspiration from our
historic and socio-cultural context falling back upon traditional systems such as
Panchayats and Biradaris (community).
The First Experiment: The first documented Lok Adalat was held in Kalyan near
Bombay way back in 1978 as an experiment. A few months later another Lok Adalat
was held near Bhiwand, Maharashtra. The Lok Adalat at Gopalpura was organised with
one lawyer and two social workers. Some five hundred people gathered out of curiosity.
Twenty-eight cases were brought for settlement. The proceedings were graced by the
then Chief Justice of the Rajasthan High Court, Justice P.N. Bhagwati. Of the 28 cases,
26 were settled.
In 1981, Justice M.P. Thakker, the then Chief Justice of the Gujarat High Court continued
the march of the Lok Adalat movement by holding such courts every fortnight in different
parts of the state.
Constitutional mandate: The Government as far back as in 1976, through the
Constitution (Forty-Second) Amendment, inserted Article 39A into the Directive
Principles of State Policy of the Constitution of India (COI) with effect from 3.1.1977. It
read as under:
“39A Equal justice and free legal aid—The State shall secure that the operation
of the legal system promotes justice, on the basis of equal opportunity, and
shall, in particular, provide free legal aid, by suitable legislation or schemes or in
any other way, to ensure that opportunities for securing justice are not denied to
any citizen by reason of economic or other disabilities.”
CILAS: In furtherance of this constitutional mandate, the Government of India by a

resolution dated 26.09.1980 appointed the Committee for Implementation of Legal Aid
Schemes (CILAS) under the chairmanship of Justice P.N. Bhagwati.
Legal Services Authorities Act, 1987: That with the passage of time, the Government
felt that legal aid management was too important an issue to be left to an ad hoc
committee and that it would be more appropriate to institutionalise the legal aid system
by providing it with a statutory framework49. It was in this background that the Legal
Services Authorities Act, 1987 (LSA Act) was enacted though not brought into effect
until 9.11.1995.
Authorities: The LSA Act sets up a multi-tiered legal aid system by constitution of
statutory legal services authorities at the national (The National Legal Services
Authority50 ), state (State Legal Services Authority51 ), and district (District Legal Services
Authority52 ) level. These authorities are appointed by the Central and State Governments,
in consultation with the Supreme Court and the High Courts, respectively. These
authorities, in turn, appoint committees such as the Supreme Court Legal Services
Committee, the High Courts Legal Services Committees and the Taluk Legal Services
Committees.
Committees: The LSA Act also sets up through subsequent amendments, Legal
Services Committees at the level of the Supreme Court (The Supreme Court Legal
Services Committee53 ), the High Court (High Court Legal Services Committee54 ) and
at the Taluk level (Taluk Legal Services Committee55 ).
Functions: The functions of the Central Authority are as follows56 :

z Formulation of policies and principles;
z Framing of economical and effective schemes;
z Utilisation of funds and allocation of funds to State Authorities and District
Authorities;
z Initiating social justice litigation for the marginalised and para legal skill
building;
z Organisation of legal aid camps and Lok Adalats, especially in slums, rural
areas or labour colonies;
z Encouragement of alternative dispute resolution;
z Undertaking and promotion of research in the field of legal services with special
reference to the need for such services among the poor;
z Securing commitment of citizens to fundamental duties under Part IV A of the
COI;
z Monitoring and evaluation of the implementation of legal aid programmes;

z Provision of grants in aid for specific schemes to “voluntary social service
institutions”;
z Development of programmes for clinical legal education and supervision of the
establishment and working of legal services clinics in universities, law colleges
and other institutions;
z Promotion of legal literacy and legal awareness;
z Enlisting the support of social welfare institutions working at the grass roots;
and
z Co-ordination and monitoring the functioning of the State and District Authorities
and the Committees.
Integrated approach: Thus the statute prescribes quite an ambitious mandate upon
the Central Authority, recognising the special need of the marginalised, specially the
labour sector for protection against being priced out of the justice delivery system. Also,
the law for the first time recognises the role of non-legal players in the social sector in
facilitating access to justice. This need to establish a social coalition finds a more
expressed recognition in Section 5 of the LSA Act which states, as under:
“In the discharge of its functions under this Act, the Central Government shall,
wherever appropriate, act in co-ordination with other governmental and non-
governmental agencies, universities and others engaged in the work of promoting
the cause of legal services to the poor.”
As in the case of the Central Authority, the statute also recognises the role of non-legal
players such as non-governmental agencies, universities and others engaged in the
work of promoting the cause of legal services to the poor in the legal aid regime at the
State57 as well as at the District Level58 .
Implementing bodies: To Implement the national legal aid policy, the State
Authorities59 and the District Authorities60 are invested with responsibilities which
include the conduct of Lok Adalats.
Recipients of legal aid: The most important aspect of the LSA Act is that independent
of the means test, legal aid is available to the following as a matter of right61 :
z Member of Scheduled Caste/Tribe;
z Victim of trafficking;
z A woman or a child;
z A person under circumstances of undeserved want such as a victim of a mass
disaster;
z An industrial workman; or
z A person in custody under special circumstances.
Legal Aid Fund: The LSA Act mandates the constitution of a Legal Aid Fund at the
National62 , State63 and District Level64 through government grants, donations and court
orders.
Lok Adalats: Chapter VI of the LSA Act addresses the organisation of Lok Adalats. The
Lok Adalat for an area is to comprise of65 :
z Serving or retired judicial officers; or
z Other persons as may be specified by the State Authority or the District
Authority or the SCLSC or the HCLSC or the TLSC. In case of Lok Adalats
conducted by the SCLSC, the qualification for other persons shall be specified
by the Central Government in consultation with the CJI, and in all other cases
by the State Government in consultation with the Chief Justice of the High
Court.
Types of Cases: The Lok Adalat constituted under the LSA Act can enquire into
pending cases as well as any new case. However, it cannot attempt to resolve any
case relating to the commission of a non-compoundable offence. It can take
cognizance of a case where:66
z The parties agree to approach the Lok Adalat;
z One of the parties makes an application for referral to Lok Adalat for settlement
and the Court is prima facie satisfied that there is a possibility of a settlement; or
z The Court is satisfied that a matter is fit to be referred to the Lok Adalat.
The Committee or Authority organising a Lok Adalat can also refer a dispute to it upon
an application made by the disputants requesting such reference. The dispute referred
to the Lok Adalat should be disposed of in terms of the compromise arrived at between
the parties. The law requires the Lok Adalat to “act with utmost expedition” and to be
guided by the “principles of justice, equity, fair play and other legal principles.”
Powers and procedures: The Lok Adalat is invested with the powers of a civil court in
respect of summoning witnesses, reception of evidence, etc67 . The Lok Adalat can
devise its own procedure and like the Industrial Adjudicator is not bound to follow the
procedures of regular courts68 . However, in case a compromise fails, the parties would
be advised to move the regular court and in the case of a pending case, the case
records would be returned to the referee court.
Drawbacks: The Lok Adalat System, however, has not offered the solution it had
promised. Some of the drawbacks are as follows:
z The Lok Adalats under the LSA Act can only be conducted under the
supervision of the authorities constituted thereunder, namely the SLSA, the
HCLSC and the DLSA. Therefore, often there are too many red tapes and
hierarchical and protocol related issues in conducting Lok Adalats or Dispute
Resolution Camps.
z Lok Adalats are usually conducted by the same regular judges who depute as
Lok Adalat Judges at these camps. They are too used to the “regular” style of
functioning and the “regular” procedural systems and cannot bring themselves
to bring to bear the novel approach required to make Lok Adalats work. This is
the same “mindset” issue faced by Presiding Officers of Labour Courts/
Tribunals with a “regular” court background. It is true that specialists may be
appointed to the panel. However, it requires the appropriate government to issue
a notification in accordance with the rules which is a cumbersome process.
z Often Lok Adalats are held on a theme basis (eg “Accident Claims”, “Matrimo-
nial Claims” ) and there is a tendency to force through settlements in order to
generate impressive statistics.
z Specially in departmental Lok Adalats, such as Insurance Claims, only the
claimant is prejudiced by the delay. In such cases, often, Lok Adalats proceed
on the basis that claimants should agree to sacrifice their right to their “day in
court” or simply be priced out of the justice system.
z Lok Adalats can only decide by consensus and therefore all it takes to scuttle
the proceedings is a party reluctant to settle.
Recent amendments: The LSA Act was amended by the Legal Services Authorities
(Amendment) Act, 2002. The drawbacks of the Lok Adalat system as it existed are
evident from a perusal of the Statement of Objects and Reasons of the amending act
which reads:
“…the major drawback in the existing scheme of organisation of Lok Adalats…is
that the system is mainly based on compromise or settlement between the
parties. If the parties do not arrive at any compromise or settlement, the case is
returned to the court of law or the parties are advised to seek remedy in a court
of law. This causes unnecessary delay in the dispensation of justice. If Lok
Adalats are given power to decide cases on merits in case parties fail to
arrive at any compromise or settlement this problem can be tackled to a great
extent.”
Salient features of the Amendments:
z Creation of Permanent Lok Adalats (PLA) with a District Judge or an Additional
District Judge as the Chairman and two other members having adequate
experience in public utility services69.
z The PLA shall exercise jurisdiction over public utility services such as transport
(passengers and goods), postal, telegraph and telephone services, supply
of power, light or water, public conservancy or sanitation, hospitals or
dispensaries, and insurance.
z Pecuniary jurisdiction shall be over claims up to Rs 10 lakh70
z Before any dispute is brought to court, any party may seek reference of the
dispute to the PLA.
z The PLA, if of the opinion that a settlement is possible, would formulate the
terms of the settlement and seek the observations of the parties. If the parties
agree, the PLA would pass an award in terms of the agreement or else the PLA
would decide the dispute on merits71 .
z The award of the PLA would be final and binding.72
Critique of the new amendments: The new amendments have been criticised on the
following lines:
z It is arbitrary to subject a private litigant to the Lok Adalat against his wish. The
amendments empower the Department to demand that the dispute be referred
to the Lok Adalat;
z The Lok Adalat can proceed to decide on merits even if the parties are not
inclined to settle. It is argued that this goes against the very voluntary nature of
the Lok Adalat system;
z The decision of the Lok Adalat would be by majority and thus the non-judicial
member can veto the judicial member or proceed to decide by majority;
z Having non-judicial members would be of no consequence if the Lok Adalat
proceeds on the basis of consensus. However, if it is required to decide the
dispute on merits, these members may not be competent to conduct trial;
z The amendments are silent as to how these disputes would be decided. Would
it be the manner in which the Lok Adalat conducts its proceedings or would it
be like a regular trial where the Lok Adalat would be expected to receive
evidence;
z The Lok Adalat, after indicating its proposed terms of settlement, cannot then be
expected to independently decide the dispute if the same is not agreeable to the
parties;
z The non-judicial members would always have a bias towards the utilities from
which they have been selected or generally have a pro-department inclination;
and
z The award of the Lok Adalat would be final, taking away the valuable appellate
rights of litigants.
Lok Adalat and labour disputes: Settlement of labour disputes through Lok Adalats
are indeed a challenge on account of the following factors73 :
z These cases have already undergone a “settlement process”, i.e. before the
Conciliation Officer;
z Most cases involve more than one party, i.e. the disputant and the trade union
espousing the dispute; and
z Workmen in “rights disputes” in many cases seek reinstatement and therefore
may not be agreeable to receiving just a monetary compensation.
CIGT Experience: The CGITs have attempted to settle labour disputes by conducting
Lok Adalats. The following table illustrates the status of cases pending in CGITs in
Northern India and the status of cases disposed of through Lok Adalats74 .
Table 5
CGIT Cases Applications No. of No. of Settled

Lok Adalat Cases
Chandigarh 1825 253 3 94
New Delhi 1198 291 2 120
Lucknow 354 34 – –
The Lok Adalat system is just another replication of the ID Act regime in which the Lok
Adalat is expected to deliver where the Conciliation Officer has failed. While this new
dispensation must be given a fair chance, it is unlikely to succeed unless the systemic
issues raised in the previous segments are addressed.
STRATEGIES FOR SPEEDY DISPOSAL OF INDUSTRIAL DISPUTES
The Previous segments have delved into various suggestions made by courts and
expert bodies on how to ensure speedy disposal of industrial disputes. Without
repetition, these strategies may be summed up as follows:
Prelitigation
Re-orientation of the work-culture is required. Enacted to protect the weak, the ID Act
has ended up encouraging industrial indiscipline in many cases. The law and its
agencies must promote national economic development and towards that end the
workers and employers must be encouraged to behave as partners in production and
should resolve their disputes in that spirit.
The Works Committees constituted under Section 3 of the ID Act should be revitalised
and armed with powers of in-house dispute resolution, with management and trade
unions agreeing to abide by its decision. This would serve as an “in-house Lok Adalat.”
Conciliation Stage75
PSUs lose out on back-wages claims as they do not take the conciliation stage
seriously. Private management can afford to employ the tactic of “sack and tire”, i.e.
terminate and compel the workmen to litigate for years, but certainly not the PSUs. The
objections of the workmen should be addressed at the conciliation stage itself76 .
Conciliation Officers should detail the settlement options generated by them in their
report and the responses of the parties, instead of mechanically writing failure reports.
Reference Stage
There should be an expeditious reference and the reference should always prescribe a
time limit for disposal as mandated by Section 10(2A) of the ID Act. While making the
reference, the file of the Conciliation Officer should be transmitted to the Court/Tribunal
and disputants should be informed that additional pleadings be filed only if they are not
already covered.
Presiding Officers may be appointed PSU-wise so that all cases of that PSU are
referred to the same Court/Tribunal. The Court/Tribunal should follow a listing system
whereby similar disputes are bunched together and listed together. This would permit
group disposals, prevent divergent decisions and also enable the adjudicator to make a
systemic evaluation of the PSU concerned. This could even facilitate a PSU-wise Lok
Adalat.
Adjudication Stage
Practice directions should be issued to PSUs and CGITs to not permit framing of
unnecessary preliminary issues. For example, if the CGIT has held that a PSU is an
industry or that a particular type of employee is a workman, the same issue should not
be mechanically agitated.
Adjudicator should permit not more than three adjournments to either party and after
recording of reasons for the same.
The Statement of Claim can be accompanied with an affidavit stating that the contents
are true and be read in as evidence in lieu of examination in chief.
Local Commissioners should be appointed to receive evidence and time-bound

commissions should be issued for that purpose.
The parties should always be directed to file written submissions of arguments to

(a) prevent a possible contention that submissions were not considered, and (b) to
enable the adjudicator to recall the same at the time of writing of the judgement/order/
award.
The judgement/order/award should be normally delivered no later than one month from
the date of final arguments.
Fees of panel lawyers should be cleared in time and if a panel lawyer is negligent in
prosecuting the case, then he should be immediately reported to the concerned Bar
Council.
Implementation Stage
The Government should constitute a screening committee which would be required to

vet every award before the PSU /department is permitted to impugn the same.
The award should be implemented within one month and if not implemented, then upon
an application by the workmen, the Labour Commissioner must sanction prosecution
at the earliest.
Only in cases of a serious confusion should a party seeking implementation of an award
under Section 33C(1) of the ID Act be referred to file an application before the Industrial
Adjudicator under Section 33C(2) of the ID Act.
That as a normal rule, unless grave misconduct is alleged workmen should be
reinstated at the earliest to avoid further backwages or payments under Section 17B of
the ID Act.
There should be a periodic review of cases pending in the High Courts and every PSU
should constitute a committee to decide on whether a case should be settled or
compromised77 .
Practice directions should be issued to evolve means to ensure personal accountability
and officers should be penalised if cases are belatedly filed causing loss to the PSU/
Department. Costs imposed in such cases should always be recovered from the errant
officials.
Infrastructural Issues
These issues have already been dealt with. However, to sum up:
There should be an All India Cadre of Central Industrial Adjudication Services
There should be a permanent Central Labour Commission constituted comprising of a
retired Labour Secretary, a retired Judge of the Supreme Court, a trade unionist of
eminence and a representative of employers’ association which would have the

following responsibilities:
z Supervising the functioning of the CGITs;
z Conducting Needs Assessment and recommending the ideal strength for each
bench of the CGIT;
z Prescribing qualifications for appointment of Presiding Officers;
z Entertaining administrative grievances in relation to the CGITs; and
z Conducting training from Presiding Officers and Conciliation Officers
z Conducting Lok Adalats in consulation with authorities under the LSA Act.
The Ministry should not keep posts of Presiding Officers vacant, the red tape in the
appointments process needs to be cut.
The Court Complexes and the Presiding Officers should be provided with all the
facilities discussed in the previous segments.
In conclusion, it may be said that industrial adjudication in India is an alternative dispute

redressal system, based upon the premise that weak workmen cannot get justice
under the adversarial system. It is unique to our country and along with our
constitutional law, occupies a pride of place in our legal heritage. There can be no doubt
that the system ails. However, the need of the hour is to address the root of the ill rather
than to jettison the same and to opt for yet another alternative and that too one based
upon the premise that the legal system is not people’s friendly and the only alternative to
being priced out of the justice system is to opt for a People’s Court where one may be
short changed!
REFERENCES
1. Pai, G.B., Labour Law in India (Vol 1), Butterworths, New Delhi, p. 496, 2001.
2. Malhotra, O.P., The Law of Industrial Disputes (Vol 1, 5th Edn), Universal Law Publishing Co. Pvt Ltd,
New Delhi, p 2.
3. [1958] ILLJ500
4. (1980) Lab. I.C. 1218 (1226) (S.C.)
5. 1949 FCR 321
6. 1950 SCR 459
7. AIR 1956 S.C. 231
8. AIR 1953 SC 53
9. AIR 1957 SC 1
10. AIR 1957 S.C329

11. AIR 1959 SC 1035
12. AIR 1960 SC 1264
13. [1961] 1 S.C.R. 381
14. AIR 1961 SC 867
15. AIR 1963 SC 874
16. AIR 1970 SC 919
17. AIR 1972 SC 1234
18. AIR 1973 SC 2758
19. Certain state amendments to the ID Act have either removed the conciliation process (Karnataka,
Delhi) or made it optional (West Bengal).
20. Section 17, ID Act.
21. Section 2(ra) r/w section 25U, 25T of the ID Act. See also Section 29 of the
22. Earlier the Industrial Disputes (Appellate Tribunals) Act permitted appeals against awards but the
same has been repealed and now the only option is to file a writ petition in the High Court under
Article 226 read with 227 of the Constitution of India.
23. AIR1978SC474 per Krishna Iyer J.
24. (1986)Lab IC 887 (669) per Venkatramiah J. (as his Lordship then was)
25. Report of the National Commission on Labour, 2002, Vol. 1, p. 1179
26. Report of the National Commission on Labour, 2002, Vol. 1, p. 1164
27. Supra at p. 1180
30. Civil Appeal No. 185 of 1996 decided vide order dated 19.08.03
31. Telco Convoy Mazdoor Union’s Case 1989SCC(L&S)465
32. There is no clarity in decisional law on the issue of back-wages. While old decisions advocate
“full back-wages” (Hindustan Tin AIR1979SC75), recent cases mandate denial of a portion of
back-wages on account of length of litigation (MCD vs. Prem Chand (2000)10SC115) or even
compensation in lieu of reinstatement (Rolston John AIR1994SC131).
33. Delhi Labour Union vs. Union of India & Ors CW No. 1765/2003 decided on 10.03.03
34. Report of the National Commission on Labour, 2002, Vol. 1, p 1165.
35. Recently the NCT of Delhi has brought the Tribunals/Courts under the control of the High Court and
judicial officers man the same who are evaluated on a point/credit system. This has vastly improved
the efficiency and the disposal rate.
36. Even if a judge is appointed there is no system in place to supervise the functioning of the judge.
The post is often perceived as “post retirement” rehabilitation and certain Presiding Officers have
even habitually arrived late and thereafter held hearings at random in chambers instead of in open
court.
37. Supra at p. 1171.
38. Supra at p. 1166.
39. This table is not created on the basis of any statistical data but on the basis of the writer’s personal
experience in dealing with labour law cases.
40. According to the Report of the National Commission for Labour about 2,500 awards of the CGIT
remain unimplemented involving approximately 20,000 workmen for 5 to 15 years or
41. more (p. 1167, Vol. 1)
Fabril Gasosa’s Case (1997)3SCC150
42. Sanjay Kumar Sharma vs. Secretary Labour & Anr CWP No 2741/2003 decided on 19.05.03.
43. Report of the National Commission on Labour, 2002, Vol. 2, p. 103.
44. Regional Authority, Dena Bank vs. Ghanshyam JT 2001(Sup 1)SC229.
45. Report of the National Commission on Labour, 2002, Vol. 1, p. 1168.
46. ONGC vs. Collector of Central Excise CA No 2058-59/1988, order dated 11.10.88
47. Swaroop, R., Law Relating to Legal Aid and Lok Adalat, 2003, ALD Publications, Hyderabad, p. 33.
48. Narayana, P.S., Law Relating to Lok Adalats, 2002, Asia Law House, Hyderabad, p. 4
49. Even thereafter several states/UT failed to frame rules for the constitution of authorities at the State
Level leading to intervention by the Supreme Court in Supreme Court Legal Aid Committee vs.
Union of India (1998)5SCC762.
50. The “Central Authority” comprises of The Chief Justice of India (CJI), a serving or retired judge of the
Supreme Court of India nominated by the President in consultation with the CJI who shall be
the executive chairman; and such other members nominated by the Central Government in
consultation with the CJI (Section 3, LSA Act).
51. The “State Authority”, comprises of the Chief Justice of the High Court, a serving or retired Judge of
the High Court, members nominated by the State Government in consultation with the Chief Justice
and a person of the rank of a District Judge to be the Secretary (Section 6, LSA Act).
52. The “District Authority” comprises of the District Judge, who shall be the chairman, other members
nominated by the State Government in consultation with the Chief Justice and a person of the rank
of a Civil Judge to be the Secretary (Section 9, LSA Act).
53. SCLSC is constituted by the Central Authority and comprises of a chairman who is a sitting judge of
the Supreme Court of India; and such other members nominated by the Central Government in
consultation with the CJI.
54. Akin to the SCLSC, it is constituted by the State Authority and comprises of a chairman who is a
sitting judge of the High Court of India; and such other members nominated by the Chief Justice of
the high Court who fulfil qualifications prescribed by the State Authority.
55. At the Taluk Level is the Taluk Legal Services Committee (TLSC) comprising of the senior most
Judicial Officer of the Taluk as the chairman and such other members appointed by the State
Government in consultation with the Chief Justice of the High Court. The costs of the TLSC are to be
borne by the District Authority. The TLSC is entrusted with the duty of proving legal aid at the taluk
level and organising Lok Adalats.
56. Section 4, LSA Act.
57. Section 8 LSA Act
60. Section 10, LSA Act
69. Section 22-B, LSA Act
70. Section 22C, LSA Act
71. Section 22C(7) and (8), LSA Act
72. Section 22E, LSA Act
73. The proposed Law on Labour Relations Management (Report of the National Commission of
Labour, Appendix-V, Pg 500) provides for the setting up of Lok Adalats to which industrial disputes
could be referred for settlement by the Grievance Redressal Committee.
74. Source: Ministry of Labour, Government of India (2003)
75 The author’s recommendations have already been noticed by the Supreme Court as stated in the
previous segment and therefore the same are not repeated.
76 For example, if the termination has been resorted to without complying with the provisions of
Section 25F, 25G and 25H of the ID Act, at the conciliation stage itself this matter can be sorted out
instead of letting the matter be referred and the workmen being rewarded with lakhs in back-wages.
In cases of alleged abandonment, it is most important to make an offer to reinstate at this stage, if
the termination had been resorted to without conducting any enquiry.
77. Government Panel Lawyers and Instructing Officers are often reluctant to settle/compromise a case
fearing accusation of personal gratification. In such cases, the committee should assist such
decisions.
6
Awards – Issues and Options
Shrikant Shukla
The definition of an “award” is analogous to the “Decree” as defined in Section 2(2) of

the Civil Procedure Code (CPC). It may be interim or final. An “interim award” is like a
preliminary decree under Section 2 (2) of the CPC. On the other hand, the orders of
authorities under Section 33 (1) or section 33 (2) of Industrial Disputes Act are
not awards as contemplated by this clause because there is no final or interim
determination of an “industrial dispute” in such cases. Whether the award is interim or
final, it has to be published as required by section 17 of the Act. The decision of a
Tribunal on a preliminary issue will not be an “award” and, therefore, it need not be
published under Section 17 (1). If it is not published, it will not become enforceable
under Section 17A or binding under Section 18, nor will it be operative.
As stated above, the award is analogous to the decree of a civil court under Section 36
to 74 and order 21. For the execution of‘a civil decree, there are specific provisions in
the CPC, but for the execution of awards there is absolutely no provision in the Industrial
Disputes Act.
The Industrial Disputes Act is a piece of legislation calculated to ensure social justice to
both employers and employees and ensure the advancement and progress of the industry
by bringing about harmony and cordial relations between both parties. The object of the
industrial law is two fold, namely, (a) to improve the service conditions of industrial
labour so as to provide for them the ordinary amenities of life; and (b) consequently, to
bring about industrial peace, which would in turn, accelerate productive activity in the
country resulting in greater; prosperity. Thus, the object of the Act is not only to make
provisions for investigation and settlement of industrial disputes but also to secure
industrial peace so that it may result in more production leading to improvement of the
national economy. Cooperation between capital and labour is essential for the
maintenance of increased production and industrial peace. Also, the object of the Act is
to ensure fair terms to the workmen and to prevent disputes between the employers
and employees so that production does not get adversely affected and the larger interest
of the public do not suffer.
The Industrial Disputes Act provides speedy justice to the employers and employees
and similarly the awards passed by the Labour Court, Tribunals, Boards, etc. must be
brought into effect without undue delay to ensure speedy implementation of the awards.
The legislatures have not provided cumbersome execution proceedings for the
execution of Civil Court judgement and decree. With the intention of providing speedy
justice the legislature has not made the Tribunal’s order revisable or appealable.
Awards of Labour Courts, Tribunals or National Tribunals are enforceable after the
publication in the official gazette, that too after expiry of 30 days. But its enforcement is
carried out either under Section 33 C (1) by the Labour Court or 17 (B) of the Industrial
Disputes Act. In the event of the award itself being not honoured by the parties, the only
recourse open is prosecution under Section 29 of the Industrial Disputes Act, which
provides six months imprisonment and or fine. But, the powers under Section 29 of the
Industrial Disputes Act are not vested with the Tribunal or Labour Court. The practice is
that when the award is received by the concerned Assistant Labour Commissioner/
Regional Labour Commissioner, they issue show cause notice to parties defaulting
implementation of award, as to why proceedings under Section 29 of the Industrial
Disputes Act have not be initiated. The concerned Assistant Labour Commissioner, on
receiving the award, themselves try to ascertain whether the award has been
implemented by the parties or not implemented or it has been modified or rejected by
the competent Government in its proceedings under Section 17A.
It has been found that in case the award has to be executive against public servants
who are protected under Section 197 of the CPC, it is difficult to proceed under Section
29 of the Industrial Disputes Act without obtaining prior permission of the Government.
However, in some of the cases such prior sanction is not needed. In case of senior
government officials who are responsible for non-execution of award, could not be
prosecuted under Section 29 of the Act due to the lack of prosecution sanction. Thus
while the workman has an executable award in his hand, the party flouting the award is
able to escape from the clutches of Section 29 of the Industrial Disputes Act.
While on the one hand the legislature intends speedy execution of awards on the other
hand there are hurdles. Although the Industrial Disputes Act has been enacted which
provides adjudication of issues by the Court/Tribunal within three months from the date
of reference. But experience shows that hardly a single reference has been disposed
off within a period of three months. The provisions in the Industrial Disputes Act have
provided various time limits for presenting claim petitions, written statements, evidence,
etc., but it is sad to observe that normally workmen do not observe the time frame
provided by the law. As normally advocates do not plead or represent for the workman,
the Trade Union office bearers plead ignorance about the provisions of the Industrial
Disputes Act and Rules. Since the industrial law is social legislation and the Courts
seldom refuse to grant adjournment, there is hardly a reference which is disposed
Awards – Issues and Options 115
within a period of three years. Thus, the delay in initial stage before passing of award is
caused by the workman himself. There appears to be no defect in our legislation
enacted for the purpose. Therefore, I am of the opinion that the delay in the award can
be restricted by the workmen themselves in case they file the statement of claim
together with relevant documentary evidence and the list of witnesses in time as
provided under the law. I am sure that if the workmen adhere to the time schedule, the
results can be excellent. The workmen and their representatives must first cooperate
with the Labour Court/Tribunals for early disposal of reference.
The awards of the industrial adjudicators or the orders of the administrative authorities
are made ‘final’ only on the basis of facts and not on law alone. In other words, the right
of an aggrieved person to judicial review of administrative, quasi-judicial or judicial
orders would not normally extend to examination of the merits of the action; it would
merely cover its legality on the grounds of jurisdictional defects, errors of law apparent
on the face of the record or violation of the rules of natural justice.
However, the legislature has intended that the awards of the adjudicatory authorities
shall be “final” and that such awards shall not be called in question by any Court “in any
manner whatsoever”. This intention normally shall not be defeated except in cases
where the award of the Tribunal is vitiated by errors of law apparent on the face of the
record and has resulted in such grave miscarriage of justice as to disturb the
conscience of the Court or the award is in violation of the principles of natural justice, or
is perverse or arbitrary in the sense that it is without any evidence whatsoever or
extraneous considerations have gone into the making of the award. However, except in
such and similar circumstances, the power of judicial review shall not be exercised for
the purpose of invalidating an award, which is intended to be final and beyond question.
In case the writ by the aggrieved party is not barred and it is filed in the Hon’ble High
Court or Supreme Court, the award may be unexecuted and this delay cannot be
minimised. But at the same time, the legislators experienced that in the event of
termination of the workmen who were deprived of the benefits of reinstatement awards
during the protracted litigation in which awards were injected by the High Courts or the
Supreme Court, enacted Section 17 B in the Industrial Disputes Act. This provision is a
piece of social welfare legislation. The objective of introducing this provision is,
therefore, to enable the workmen to receive the “full wages last drawn” by them to
sustain themselves due to resist the litigation carried to the High Court or the Supreme
Court by the management. More often than not, the employers, as a matter of routine,
prefer proceedings before a High Court or the Supreme Court challenging such awards
and obtain stay of their operation. Therefore, by and large during the pendency of such
proceedings, workmen are deprived of their right to wages upon reinstatement. Now
this section at once codifies the right of a workman to get the wages and quantifies the
amount of such wages payable to him during the pendency of the proceedings before a
High Court or the Supreme Court where the award of his reinstatement is challenged by
the employer. Thus, Section 17 B of the Industrial Disputes Act has give a great amount
of relief to the workman.
Given below is the statement of Kanpur region which shows the position of
implementation of award as on 31.8.2003:
Total No. of Awards Reasons for Pendency

Implemented Due to P.P. Prosecution Improvement
During August 2003 Stay Order Submitted Cases Filed
264 3 159 72 10 20
The above table shows that the majority of the awards are stayed.
To cut down the huge pendency of un-executable awards, I am of the opinion that
compromise awards should be encouraged. Although a compromise award is not
specifically contained in the Industrial Disputes Act, as the Act does not contain any
provision specifically authorising an industrial adjudicatory to record a compromise and
pass an award in its terms corresponding to the provisions of Order XXIII, Rule 3 of the
Civil Procedure Code, this does not mean that the Tribunal is precluded from taking
note of a compromise entered into between the workers and management. There can,
therefore, be no doubt that if an industrial dispute before the Tribunal is amicably settled,
the Tribunal would immediately agree to make an award in terms of the settlement
between the parties. In this regard the Lok Adalats can play an important role. If the
cases are settled in the Lok Adalat there is no possibility of any writ in the Hon’ble High
Court and subsequent stages and thus the award passed as a result of a compromise
in the Lok Adalat shall not only dispose the industrial dispute but will also create
harmonious relationship between the employer and the employee as no one loses the
battle and both parties win simultaneously. The option, therefore, is to encourage the
settlement of the dispute by compromise in the Lok Adalat.
Arguments could be forwarded against this option on the ground that if there was
possibility of compromise, the dispute could have been settled when the case is brought
to Assistant Labour Commissioner. The experience shows that the final decision taking
authorities do not participate in the conciliation proceedings; instead junior officers are
sent for reconciliation with the clear mandate that they should not agree to the opposite
parties’ views. The decision-taking authorities have an ego problem in appearing in
conciliation proceedings before the Assistant Labour Commissioner. But when the case
is taken in the Labour Court/Tribunal the decision taking authorities should not have
hesitation in participating in the preliminary sittings of the Lok Adalats. There is a
difference between the taking of a decision while sitting in the office chamber and taking
a decision in a face-to-face meeting with the other party. I am of the considered view
that there are a large number of cases which could be settled by compromise in the
Lok Adalats with the result that the award so made will have no difficulty in execution
thereof.
A party in whose favour an award is made may enforce it in any of the following ways:
1. By moving the ‘appropriate Government’ to prosecute the defauling party under
Section 29.
2. Where any money or benefit which is capable of being computed in terms of
money under an ‘award’ to a workman from his employer, such workman may
make an application under Section 33 C to the appropriate Government or the
Labour Court, for the recovery of the money or computation of such benefit in
terms of money due to him under the award.
3. The breach of an award may itself be raised as an ‘industrial dispute’ to lead to
another reference to an industrial Tribunal.
4. Institute a civil suit for obtaining a decree in satisfaction of the dues under the
award, and such a decree will be enforceable by execution proceedings under
Order 21 of the Code of Civil Procedure.
Point no. 1. above is only a criminal provision for breach of an award, while Point no. 3.
will lead to absurdity and Point no. 4. will lead to protracted and prolonged litigation. The
only proper mode of recovery of money or benefit under an award is Point no. 2.
However, an award given by an Industrial Tribunal is the decision of an industrial
disputes by a statutory Tribunal and can have no more statutory force than the decree
of the Civil Court.
Section 29 of the Act was enacted to have deterrent effect against some employers
who were able to successfully thwart the implementation of settlements or awards as
the government was unable to accord prosecution sanction against its own officers.
Due to non-availability of prosecution sanction no complaint could be lodged to punish
the officer who was responsible for not complying with the award. The Court/Industrial
Tribunal/National Industrial Tribunal has no power to punish such officers who fail
to comply with the order. It is now necessary to confer some power to the Court
and Tribunal so that awards can be implemented by the employers. It is, therefore,
proposed to incorporate the powers to such Courts and Tribunals to punish the guilty
person, who failed to comply with the order. There is provision in the Consumer Protection
Act for execution of order but there is no such provision in the Industrial Disputes
Act. Therefore, it is considered necessary to substitute Section 29 of the Industrial
Disputes Act.
Another option for early execution of an award is to confer the power to impose the
penalty to the Presiding Officer of the Labour Court/Tribunal concerned. By legislation
the power of a first class Judicial Magistrate can be conferred to all the Presiding
Officers to deal with such parties who fail or omit to comply the award made by such
Labour Court or Tribunal. Section 29 could be substituted accordingly in the following
terms:
1. Where a party or a person to an award, fails or omits to comply with any order
made by the Court/Industrial Tribunal/National Industrial Tribunal, as the case
may be, such person/party shall be punishable with imprisonment for a term
which shall not be less than one month but which may extend to three years, or
with fine which shall not be less than two thousands rupees but which may
extend to ten thousand rupees, or with both.
2. Notwithstanding anything contained in the Code of Criminal Procedure, 1973
(2 of 1974), the Court/Industrial Tribunal/National Industrial Tribunal, as the
case may be, shall have the power of a first class Judicial Magistrate for the trial
of offences under this Act, and on such conferment of powers, the Court/
Industrial Tribunal/National Industrial Tribunal, as the case may be, on whom
the powers are so conferred, shall be deemed to be a Judicial Magistrate of
the first class for the purpose of the Code of Criminal Procedure, 1973
(2 of 1974).
3. All offences under this Act may be tried summarily by the Court/Industrial
Tribunal/National Industrial Tribunal, as the case may be.
This will simplify the entire process. However, there should be a permission of appeal
against the order above before the Hon’ble High Court. Accordingly, Section 29 A may
be incorporated as under:
29A–Appeal against order passed under Section 29:

1. Notwithstanding anything contained in the Code of Criminal Procedure 1973
(2 of 1974), an appeal under Section 29, both on facts and on law, shall lie from
the
(a) order made by the Labour Court/Industrial Tribunal to the High Court; and
(b) order made by the National Industrial Tribunal to the Supreme Court;
2. Except as aforesaid, no appeal shall lie to any court from any order of a Court/
Industrial Tribunal/National Industrial Tribunal.
3. Every appeal under this section shall be preferred within a period of 30
days from the date of an order of a Court/Industrial Tribunal/National Industrial
Tribunal, as the case may be,
Provided that the High Court or the Supreme Court, as the case may be, may entertain
an appeal after the expiry of the said period of 30 days, if it is satisfied that the appellant
had sufficient cause for not preferring the appeal within the period of 30 days.
if the above provisions are made in the Industrial Disputes Act, I believe that award shall
be complied with without delay. However, such an order of modification or concession
can be passed by the concerned Labour Court/Tribunal only when it is satisfied that the
circumstances of any case so require. In other words, the rule of imposing a
fixed minimum sentence or fine is not so rigid and it can be relaxed where deemed
appropriate. The factors that may mitigate the sentence or fine include total compliance
with the orders passed by the Labour Court/Tribunal and apology tendered after
substantially complying with the orders.
7
Strategy for Effective
Disposal of Cases:
Role of Conciliation
M. Dias
According to Justice Krishna Iyer, “The Industrial Disputes Act is a benign measure
which seeks to pre-empt industrial tensions, provide the mechanics of dispute resolutions
and set up the necessary infrastructure so that the energies of partners in production
may not be dissipated in counter-productive battles and assurance of industrial justice
may create a climate of goodwill.” [Life Insurance Corporation of India vs. D J Bahadur,
reported as 1980-Lab. I C-Page 1218 (Supreme Court) at Page 1226].
The Industrial Disputes Act was enacted, as its preamble and the long title show, to
provide machinery and forum for the investigation of industrial disputes and for
the settlement thereof and for the purposes analogous and incidental thereto. The
emergence of the concept of Welfare State implies an end to exploitation of workmen.
As a corollary to that collective bargaining came into its own and lest the conflicting
interests of the workmen and employer disturb industrial peace and harmony, a
machinery for adjustment of such conflicting interests became the felt need of the time.
The Act, therefore, was enacted to provide machinery and forum for adjustment of such
conflicting and seemingly irreconcilable interests without disturbing the peace and
harmony in the industry while, at the came time, assuring industrial growth which was
the prerequisite for a Welfare State. The need for State intervention permeates the Act
in its broad lines, “which in a Welfare State cannot afford to look askance at industrial
unrest and industrial disputes” [Dahyabhai Ranchhoddas Shah vs. Jayantilal Mohanlal,
reported as 1973-Lab. I C-page 967 (Gujarat High Court) on page 968]. The Act enables
the State to compel the parties to resort to industrial arbitration and for that purpose
different for a have been set up for the resolution of such disputes. The Act is intended
to be a self-contained one. It seeks to achieve social justice on the basis of collective
bargaining, conciliation, arbitration and, failing that, compulsory adjudication.
The Supreme Court in the case of Hindustan Hosiery Industries vs. F H Lala, reported
as 1974-(1)-LLJ-page 340, at page 348, has held that, “The essential object of all recent
labour legislation has been not so much to lay down categorically the mutual rights and
liabilities of employers and employees as to provide recourse to a given form of procedure
for the settlement of disputes in the interests of the maintenance of peaceful relations
between the parties, without apparent conflicts such as are likely to interrupt production
and entail other dangers.” The Act is a piece of legislation calculated to ensure social
justice to both employers and employees and advance progress of industry by bringing
about harmony and cordial relationship between the parties. The personality of the whole
statute has a welfare basis, it being a beneficial legislation which protects labour,
promotes their contentment and regulates situations of crisis and tension where
production may be imperilled by untenable strikes and blackmail lock-outs. The
mechanism of the Act is geared to conferment of regulated benefits to workmen and
resolution, according to a sympathetic rule of law, of the conflicts, actual or potential,
between managements and workmen. Its goal is amelioration of the conditions of
workers, tempered by a practical sense of peaceful co-existence, to the benefit of both—
not a neutral position but restraints on laissez faire and concern for the welfare of the
weaker lot.
The Act deals with industrial disputes, provides for conciliation, adjudication and
settlements. It regulates the rights of the parties and the enforcement of awards and
settlements. Thus by empowering the adjudicatory authorities under the Act, to give
reliefs such as ‘reinstatement’ of wrongfully dismissed or discharged workmen, which
may not be permissible in common law or justified under the terms of contract between
the employer and such workmen, the Legislature has attempted to frustrate the unfair
labour practices and secure the policy of collective bargaining as a road to industrial
peace. In other words, the purpose of this Act is to settle disputes between workers and
employers which, if not settled, could result in strikes or lock-outs and entail dislocation
of work, essential to the life of the community. The scheme of the Act shows that it aims
at settlement of all industrial disputes arising between the employers and labour by
peaceful methods and through the machinery of conciliation, arbitration and if necessary,
by approaching the Tribunals constituted under the Act.
Hence, the object of the Act is to protect workers against victimization by the employer
and to ensure termination of industrial disputes in a peaceful manner. The purpose
of the Act being beneficent, it has been described by Courts as a piece of social legislation.
The raison d’etre of a labour Tribunal is to be found in the desire of the State to provide
a forum which may, unhindered by legalistic considerations, attempt to secure
harmonious relations between the employer and employee with the ultimate objective
of securing an efficient working of industry by resolving disputes through the medium of
arbitration and adjudication. It, therefore, endeavours to resolve the competing claims
of employers and employees by finding a solution, which is just and fair to both the
Strategy for Effective Disposal of Cases : Role of Conciliation 123
parties with the object of establishing harmony between employer and labour and
maintaining good working relationship.
In the case of Workmen of Dimakuchi Tea Estate vs. Dimakuchi Tea Estate, reported
as 1958-(1)-LLJ-page 500 (Supreme Court) at page 506, the Hon’ble Justice S.K. Das,
speaking for the majority has succinctly summed up the principal objective of the Act as
follows:
1. Promotion of measures for securing and preserving amity and good relations
between the employer and the workmen;
2. An investigation and settlement of industrial disputes, between employers and
employers, employers and workmen or workmen and workmen, with a right of
representation by registered trade union or a federation of trade unions or an
association of employers or a federation of associations of employers;
3. Prevention of illegal strikes and lockouts;
4. Relief to workmen in the event of lay-off and retrenchment; and
5. Collective bargaining.
The industrial awards are based on the circumstances peculiar to each dispute and the
Tribunals are, to a large extent, free from the restrictions of technical considerations
imposed on Courts. This view was forwarded by the Hon’ble Justice Goswamy in the
case of Hindustan Hosiery Industries vs. F.H. Lala, reported as 1974-(1)-LLJ-page 340
(Supreme Court) at page 348. The Act, however, does not provide for any set of social
and economic principles for adjustment of conflicting interests. Such norms have been
evolved and devised by industrial adjudication, keeping in view the social and economic
conditions, the needs of the workmen, the requirements of the industry, social justice,
relative interests of the parties and common good. These norms have given rights to
industrial employees that may be called industrial rights since such rights may not be
available under common law. Such rights in their turn are enforceable through the
machinery of the Act because without the machinery for their enforcement, in case of
denial, they would be mere platitudes.
COLLECTIVE BARGAINING VS. COMPULSORY ADJUDICATION
In the quest of industrial peace and harmony, by obviating the struggle and strife of the
working classes to ameliorate and improve their working conditions against the
entrepreneurial exploitation which may often lead to headlong clashes and hamper
production and disturb the social life of the community, collective bargaining by voluntary
agreement has been adopted as the standard system in the United States of America.
However, in India the tradition of free collective bargaining has always been weaker.
Consequently, there is more continuous and systematic surveillance over industrial
disputes on the part of the Government by resorting to compulsory adjudication. However,

neither system is free from its share of snags and snares on account of sharp clashes
of interest and stormy quality of human nature.
Collective bargaining is vulnerable for its encouragement of strikes, lack of principled
and scientific decision and failure to protect the community’s interests; whereas
compulsory adjudication, apart from its greatest drawback of third party intervention, is
further vulnerable for its expenses, delays, bitterness, acrimony, frustrations and many
wrong decisions. Hence, with respect to the merits and demerits of collective bargaining
vis-à-vis compulsory industrial adjudication, there is a serious conflict and overlapping
of views.
One view is that collective bargaining without the intervention of a third agency, alone
can lead to a healthy development of trade union movement and in the end be conducive
to the growth of industrial harmony. This school advocates that State intervention by
way of compulsory adjudication has hampered the growth of the trade union movement
in India. Another view supports the settlement of disputes basically through collective
bargaining but advocates the retention of adjudication till all trade unions attain sufficient
strength to bargain with the employers from a position of equality. There is yet another
school which is of the view that though there is no substitute for collective bargaining in
the sphere of industrial relations, the fight-to-a-finish form of the strength is hardly feasible
in the context of Indian situation. This school further advocates that the present system
only pays lip service to collective bargaining whereas in practice it has perpetuated
adjudication, which was supposed to be a transient measure till such time the labour
came of age and could bargain with employers on an equal footing. Adjudication,
therefore, by the very logic of its functioning has inhibited the growth of trade unions and
made them litigious.
MEDIATION AND CONCILIATION
Section 4 of the Act authorises the ‘Appropriate Government’ to appoint Conciliation

Officers charged with the duty of mediation in and promoting the settlement of industrial
disputes. A Conciliation Officer may be appointed for a specified area or for specified
industries in a specified area or for one or more industries either permanently or for a
limited period. Though it is discretionary for the Government to appoint the Conciliation
Officers, their appointment has become a normal feature in view of the important role of
conciliation in the settlement of industrial disputes. Section 5 authorises the appropriate
Government to constitute a Board of Conciliation for promoting the settlement of
industrial disputes. The Board has to be appointed ad hoc for a particular dispute. It
consists of a Chairman and two or four other members. The Chairman of the Board
must be an “independent person” while the members represent the parties in equal
number and are appointed on the recommendation of the parties. A Board of
Conciliation can be constituted when the issue involved is of a complex nature.
The conciliation machinery provided in the Act can take note of the existing as well as
apprehended disputes either on its own or on being approached by either of the parties
to the dispute. The Act further makes conciliation compulsory in all disputes in ‘public
utility services’ and optional in other industrial establishments.
Conciliation or mediation is a somewhat diplomatic procedure, which endeavours to

settle a controversy by assisting parties to reach a voluntary agreement where the
ultimate decision is made by the parties themselves. A conciliator, sometimes also
called a mediator, with his prowess and prior experience in labour-management relations,
is expected to draw from a battery of diplomatic techniques depending on the particular
situation confronting him. He can furnish such information to the parties that can assist
them in evaluating the principal consequences of alternative decisions. He can serve
as a channel of communication when direct communication is unfeasable and offer a
recommendation if he believes there is a sufficient likelihood of its acceptance. His
basic task is to find a solution acceptable to both parties rather than determine the
rights and wrongs of a problem. His recommendations are, therefore, based on his
expectations of what arrangements will stabilize relations between the parties for the
period immediately ahead. The parties may accept his recommendations, use them as
the basis for some other settlement, or reject them altogether.
Thus, mediation may not result in an adjustment of conflicting interests. On the other
hand, parties often submit to mediation where they would be unwilling to empower an
outsider to make a binding decision. Further, since the final decision rests with the
parties themselves, they cannot complain that their practical freedom has been impaired
or that they have been forced into a settlement which is unacceptable to them. In public
utility concerns, or in cases where the Government makes a reference to the Board of
Conciliation, the Act requires that the parties submit to Conciliation proceedings before
they can resort to test their bargaining strength. If Conciliation fails, the next stage may
be compulsory investigation or compulsory adjudication. Though Conciliation in this
country has not made much progress, in many other countries, this technique has
worked well. For instance in Sweden, the contending parties meet in a spirit of
determination to agree, and they consider failure to agree almost a disgrace.
Section 11 prescribes the procedure and powers, inter alia, of the Conciliation Officers
and Boards. Section 12 deals with the Conciliation Officers and Section 13 deals with
the duties of the Boards. Broadly speaking, conciliators either bring the contending
parties to a conference table or endeavour at least to narrow the gulf of difference
between them by removing the sources of friction and tension and help them to find
common areas of agreement. They have no power to decide the disputes. However, by
gaining the parties’ confidence in their fairness and impartiality, the conciliators are
supposed to strive to find solutions, which the parties may not be able to find for
themselves. They have no authority to pass a final or binding order on the parties. In
cases where a settlement is arrived at, they can record the settlement and in case of
failure of the conciliatory negotiations, they can only send a failure report to the appropriate
Government.
Adjudication
Justice D.A. Desai of the Hon’ble Supreme Court of India in the case of Workmen of
Hindustan Lever Ltd. vs. Hindustan Lever Ltd., reported as 1984-Lab IC-page 276
(Supreme Court) at page 286 and 287 pointed out, “The concept of compulsory
adjudication of industrial disputes was statutorily 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. A developing country like India can ill afford
dislocation in industrial production. Peace and harmony in industry and uninterrupted
production being the demand of the time, it was considered wise to arm the Government
with power to compel the parties to resort to arbitration and as a necessary corollary to
avoid confrontation and trial of strength which are considered wasteful from national
and public interest point of view.”
Adjudication means a mandatory settlement of industrial disputes by Labour Courts,

Industrial Tribunals or National Tribunals under the Act or by any other corresponding
authorities under the analogous State statutes with specialised jurisdiction in the labour
management field. The line between the scope of ‘adjudication’ and ‘arbitration’ in this
country is rather blurred. The central theme of the Act is adjudication. From its scheme,
it is clear that the Act pays little more than lip service to collective bargaining, relegates
conciliation to the position of a mere stepping stone to adjudication and gives
step-motherly treatment to voluntary arbitration. By and large, the ultimate remedy of
unsettled disputes, therefore, is by way of reference by the appropriate Government to
the adjudicatory machinery for their adjudication.
Sections 7, 7A and 7B deal with the constitution of the adjudicatory authorities, viz.
Labour Courts, Tribunals and National Tribunals, respectively. Section 7C disqualifies
certain persons from being appointed to or to continue in the office of Presiding Officers
of the Labour Courts, Tribunals or National Tribunals. Section 8 prescribes the mode of
filling of vacancies created in the offices of these authorities. Section 10 deals with the
reference of dispute to Labour Courts, Tribunals or National Tribunals and proscribes
strikes and lockouts during the pendency of adjudicatory proceedings before these
adjudicatory authorities.
Section 12 (5) lays down that the appropriate Government may make a reference for
adjudication upon consideration of the failure report of the Conciliation under Section
12(4) and in case of its refusal, this provision enjoins upon the appropriate Government
to record and communicate to the parties concerned its reasons therefor. Section 11
prescribes the procedure and powers, inter alia, of the Labour Courts, Tribunals or
National Tribunals. Section 15 makes it the duty of a Labour Tribunal or National Tribunal
to hold the adjudication proceedings expeditiously and to submit its award to the
appropriate Government as soon as may be practicable, on the conclusion thereof.
Section 16 (2) prescribes the form of the award of such authorities. Section 17 lays
down the requirement of publication of the award. Section 17A deals with the
commencement of the awards. Section-18 makes the award binding on the parties
mentioned in sub-section (3) thereof and Section 19 prescribes the period of operation
of the award.
Section 20 lays down the points of time at which the adjudication proceedings are
deemed to have commenced and concluded before these adjudicatory authorities.
Section 21, inter alia, enjoins the adjudicatory authorities to keep certain matters
confidential. Section 29 prescribes penalties for the breach of awards. Section 36 bans
legal practitioners from appearing before the conciliatory authorities, though they have
been permitted to appear before the adjudicatory authorities with the consent of the
opposing party and with the permission of the adjudicator. Alternatively, if such legal
practitioner is an office bearer of a trade union or an employer’s organisation, such an
authorised representative is permitted under the law to represent the concerned party.
The matters specified in the Second Schedule to the Act are generally referable to the
Labour Courts. However, any matter specified in the Second and Third Schedule may
be referred to the Tribunal or the National Tribunal. The reference to the Labour Courts
or the Tribunal has to be made by the ‘Appropriate Government’ while the reference to
the National Tribunal can only be made by the Central Government. The Act does not
make provision for ‘appeals or revisions against the awards of the adjudicatory
authorities’. Hence, the aggrieved parties have to seek only the constitutional remedies,
viz. writs under Articles 226 and 227 of the Constitution to the High Courts having
jurisdiction or by way of appeals by special leave to the Supreme Court under Article
136 of the Constitution of India. Appeals in certain cases may also be made to the
Supreme Court against the decisions of the High Courts under Articles 132 and 133 of
the Constitution of India.
Howsoever severe one may be in the criticism of industrial adjudication, it cannot be

gainsaid that the contribution of industrial adjudication to the development of industrial
jurisprudence in this country over the past half-century has been remarkable. In the
opinion of the First National Commission on Labour, “it has played a major role since in
giving a more concrete shape to our progress towards the goal set by the Constitution”.
No doubt industrial disputes have been quite often, dominated by purely political motives
of the political parties controlling the trade unions. There have been disputes between
the employers and unions pertaining to terms and conditions of employment of workers
including wages, dearness allowance, bonus, working conditions and hours of work
and also matters such as recognition of unions. Industrial adjudication through the Labour
Courts, Tribunals and National Tribunals has laid down principles on these subjects to
which the Labour Appellate Tribunal provided definite and clearer contours and the
Supreme Court has provided polish and finish. Industrial adjudication has endeavored
to resolve the disputes with a pragmatic approach keeping in view the sub-economic
requirements of the society avoiding syllogistic and mechanical approach and steering
clear of doctrinaire and dogmatic approach and without yielding to the sub-conscious
political pressures or the pressure of preconceived notions.
Industrial adjudication has also borne in mind the social welfare philosophy in industrial
relations as enshrined in the Directive Principles in Part-IV of the Constitution which
“has afforded broad and clear guidelines of the development of our industrial
jurisprudence and has thus taken India one step forward in her quest for industrial
harmony”. Bearing in mind these principles, the Courts by interpretative process have
striven to reduce the field of conflict and expand the area of agreement. However, the
time has now arrived when the compulsory adjudication should increasingly give way to
collective bargaining and voluntary arbitration. Spoon-feeding must stop if trade
unionism in its proper perspective is to grow and progress. This ideal, however, will
remain only a dream as long as political parties continue to exploit trade unions for their
political ends.
Arbitration
In the language of Justice Jagannatha Shetty of the Hon’ble Supreme Court of India, in
the case of Karnal Leather Karamchari Sanghathan vs. Liberty Footwear Co. (Regd.),
reported as 1990-Lab IC page 301 (Supreme Court) at page 307, “Voluntary arbitration
is a part of infrastructure of dispensation of justice in the industrial adjudication”.
Arbitration is a judicial process under which one or more outsiders render a binding
decision based on the merits of the dispute. Voluntary arbitration is initiated by the
consent of the parties, which leads to a final and binding award. Agreement to
arbitrate implies willingness of the parties to abide by the award even though this is not
expressly stated. Voluntary arbitration is suited to any type of dispute including those
involving basic terms of employment, interpretation of existing agreement, inter-union
controversies and the like.
The Supreme Court in the aforesaid case, accentuating the advantages of voluntary
arbitration observed, “Voluntary arbitration appears to be the best method for settlement
of all industrial disputes. The disputes can be resolved speedily and in less than a year;
typically in a few months. The Tribunal adjudication of reference under Section 10(1)
often drags on for several years, thus defeating the very purpose of the industrial
adjudication. Arbitration is also cheaper than litigation with less legal work and no motion
practice. It has limited document discovery with quicker hearings and is less formal
than trials. The greatest advantage of arbitration is that there is no right of appeal, review
or writ petition. Besides, it may as well reduce Company’s litigation costs and its potential
exposure to ruinous liability apart from redeeming the workmen from frustration.”
Voluntary arbitration as envisaged by Section 10A is arbitration in name only. In reality it

is more adjudication than arbitration. The parties may make reference of an industrial
dispute by a written agreement to the Presiding Officer of a Labour Court or a Tribunal
or National Tribunal as an arbitrator. The parties have also liberty to make arbitration
to any other person or persons by specifying in the arbitration agreement. Such
arbitration, after the reference is made, partakes the character of adjudication. Section
11 makes the procedure to be followed by the arbitrator and in the arbitration
proceedings the same is to be followed by the adjudicatory authorities; in connection
with adjudication proceedings. This provision also vests the Arbitrator with similar
powers as those of the adjudicatory authorities. The duties of the Arbitrator also are the
same as those of an adjudicatory authority under Section 15 of the Act.
The award of the Arbitrator is to be communicated to the appropriate Government and

has to be published under Section 17. The commencement of such award is subject to
the provisions of Section 17A like the award of an adjudicator under Section 10.
Furthermore, Section 10A(5) makes the provisions of the Arbitration Act inapplicable to
the proceedings under Section 10A. In other words, the machinery of the Arbitration Act
is not available to the parties. Thus, the only difference between voluntary arbitration
and compulsory adjudication left is that in the former the parties have the liberty to
make, by mutual agreement, a reference to a private Arbitrator or Arbitrators of their
choice apart from the Presiding Officers of Labour Courts, Industrial Tribunals or
National Tribunals. Once the reference is made, there is no difference between the
so-called ‘voluntary arbitration’ and ‘compulsory adjudication’. Thus, the efficacy of
arbitration is largely buttressed by reliance upon State intervention. No wonder that this
method does not appear to have much attraction for Indian industry.
In other countries, voluntary arbitration is used to supplement collective bargaining. The

parties select their Arbitrator by agreement, or they accept one appointed by an agreed
third party. In the United States of America, the system of voluntary arbitration is highly
developed. The parties to labour disputes generally select arbitrators from businessmen,
lawyers, judges, sociologists, priests and clergymen. University professors with training
in law or industrial engineering, or industrial relations, economics or sociology are also
frequently appointed. A scheme somewhat analogous to the scheme under the Indian
Act, for settlement of industrial disputes, operating in Australia was severely criticised,
as early as 1929 by a British Economic Commission for its tendency to consolidate the
contesting parties in two opposing camps. This criticism was echoed by the ILO, when
in 1951 it recommended voluntary arbitration as a better mode of settlement of industrial
disputes. In India, the emphasis is mainly on compulsory adjudication and voluntary
arbitration has not taken root in spite of its influential advocacy in different policy-making
fora, including the recently submitted report by the Second National Commission on
Labour.
ILO’s Recommendation No.92 of 1951
Re: Concerning Voluntary Conciliation and Arbitration
The ILO has strongly recommended voluntary conciliation machinery to assist in the
prevention and settlement of industrial disputes between employers and workers. It
holds that where voluntary conciliation machinery is constituted on a joint basis, it should
include equal representation of employers and workers. Further, the procedure should
be free of charge and expeditious with necessary time limits for the proceedings to be
prescribed. It also recommends provisions to be made to enable the conciliation
procedure to be set in motion, either on the initiative of any of the parties to the dispute
or ex-officio by the voluntary conciliation authority.
As regards voluntary arbitration it states that if a dispute has been submitted to
arbitration for final settlement with the consent of all parties concerned, the latter should
be encouraged to abstain from strikes and lockouts while the arbitration is in progress
and to accept the arbitration award. However, it has been clarified that no provision of
the said recommendation may be interpreted as limiting in any way whatsoever the
right to strike.
CONCLUSION
At the recently held 39th Indian Labour Conference, the Hon’ble Prime Minister, Mr Atal
Bihari Vajpayee noted in his inaugural address on October 16, 2003, “After having
observed the ups and downs of our national economy for many decades, I have come
to the conclusion that India has suffered much because of three types of beliefs. First,
the belief that held that private enterprise is only for maximising wealth for the
employers. Second, the belief that held that there is a fundamental contradiction
between the class of employers and the class of employees. Thirdly, there was the
belief among, some in the Government—and that belief is still there to some extent—
that their job is to control everything, and not to facilitate investment and growth. We
have to change this mind set. We should replace it with a single overriding belief—
namely that faster growth in all sectors of the economy, and in all regions of our vast
country, is critical for faster eradication of poverty. It is critical for faster generation of
employment and self-employment opportunities for all our young men and women. I
must also point out that it is critical for strengthening our national security.”
The above observation of the Hon’ble Prime Minister is the culmination of jobless growth
in the economy, where employment generation in the organised sector has come down
dramatically. In fact, the growth of the labour force, employment and unemployment
during 1983-2000 observed were as under:
Growth of Population, Labour Force, Employment and Unemployment
Growth Rate (%) 1983-94 1994-2000

1. Population 2.12 1.93
2. Labour Force 2.05 1.03
3. Employment 2.04 0.98
4. Organised sector 1.20 0.53
employment
(a) Public 1.52 -0.03
(b) Private 0.45 1.87
Note:
1. Employment, unemployment, unemployment rate and labour force are on usual status basis
and are based on estimates given in various rounds of NSSO.
2. Population estimates are as per projection made by the Expert Committee on Population
Projection.
3. Organised sector employment figures are on the basis of data collected by DGE & T.
4. GDP growth rates are from Central Statistical Organisation.
5. The rates of growth of labour force, employment, population and organised sector employment
are compound rates of growth.
6. The above statistics have been taken from the agenda/backgrounder of the 39th Session of
the Indian Labour Conference.
The salient points of the employment and unemployment scenario are as follows:
1. The rate of growth of employment declined sharply from 2.04 per cent per
year in the period 1983-94 to only 0.98 per cent per year in the period 1994 to
2000.
2. There was sharp deceleration in the growth of labour force from 2.05 per cent in
the period 1983-94 to only 1.03 per cent in the period 1994-2000.
3. Growth rate of employment is less than the growth rate of the labour force
indicating an increase in the unemployment rate.
4. The open unemployment which is of the order of 9 million is not significant
compared to the size of the population in the country.
5. Though, open unemployment is only 2.23 per cent (9 million), the percentage of
the population below the poverty line as high as 26.1 per cent. The fact of being
employed is obviously no guarantee of escaping from poverty, which in our
situation refers to a very basic level of subsistence.
6. Percentage of population below the poverty line, which was of the order of 36
per cent in 1993-94, has come down to 26.1 per cent indicating that during the
period 1994-2000 improvement in the income level of the employed had taken
place.
7. Organised sector employment is not growing and its share is only 7 per cent of
the total employment.
8. There was decline in self-employment whereas regular salaried and casual
employment showed an increasing trend during 1993-94 to 1999-2000.
9. There was substantial increase in the average daily wage earnings in the rural
areas.
In the light of the above grim economic scenario particularly in relation to the growth of
employment in the organised sector, there is a school of thought that holds the view that
the existing labour laws including the provisions of the Industrial Disputes Act have
greatly contributed to the fear psychosis prevailing in the mind of employers in India, be
they in the large, small or even tiny sector;— including the foreign investors. The trend
observed in the last couple of years is that the employer would rather invest huge sums
of money towards capital expenditure but is not ready or willing to consider investments
on human resource development.
This trend has led to the engagement of contract labour and the casualisation of
employment. Industrial adjudication in this country is replete with citations where the
delinquent workman has got away with murder. Over the last 50 years the courts have
been indulgent in favour of the worker even when he indulges in criminal activity such as
assault, theft, use of abusive language and the like.
This mindset, as the Hon’ble Prime Minister himself mentioned, needs correction. The
recent judgement of the Hon’ble Supreme Court of India dated August 6, 2003, in the
case T.K. Rangarajan vs. the Government of Tamil Nadu, clearly reflects the judicial
mind where the Court has held, “Apart from statutory rights, Government employees
cannot claim that they can take the Society at ransom by going on strike. Even if there
is injustice to some extent, as presumed by such employees, in a democratic welfare
State, they have to resort to the machinery provided under different statutory provisions
for redressal of their grievances. Strike as a weapon is mostly misused which results in
chaos and total maladministration. Strike affects the Society as a whole and particularly
when two lakh employees go on strike en masse, the entire administration comes to a
grinding halt. In the case of strike by a teacher, entire educational system suffers; many
students are prevented from appearing in their exams which ultimately affect their whole
career...”, This decision has vindicated the right of the common man. Similarly, the
recent suo motto decision of the Hon’ble Single Judge of the Calcutta High Court, whereby
rallies in the city were banned on all working days and during working hours. This
judgment too is a clear manifestation of the frustration that the judiciary faces today.
Courts are a dynamic institution. They need to reflect the aspirations of society. We live
in a competitive world where the buzzwords are liberalisation, privatisation and
globalisation. This is the economic agenda of the nation. Irrespective of our own personal
views on the subject, we as a nation need to make it a reality at the earliest. In this
context, the role of Labour Courts and Industrial Tribunals for minimising disputes needs
a new and fresh look. It is imperative that the courts encourage a positive and productive
work culture, where the foundation is competition both in quality and price. Labour Courts
and Industrial Tribunals will need to establish a new matrix whereby the survival of
industry may be assured and employer-employee relations strengthened, thereby leading
to a strong nation that cares for the common citizen who is also the consumer.
While on the subject of conciliation as a mechanism for redressal, it would be

appropriate to mention that Section 2(A) of the Industrial Disputes Act, 1947, has been
recently amended in the National Capital Territory of Delhi, although a similar provision
does exist in certain other states such as Karnataka whereby an individual workman
whose services have been discharged, dismissed, retrenched or terminated, for any
reason whatsoever, may approach the Labour Court directly without approaching the
Labour Authorities through the conciliation mechanism. This, in my view, creates an
added responsibility on the Labour Courts and Industrial Tribunals to adjudicate such
matters, so as not to open a floodgate of litigation.
An interesting decision of the Hon’ble Supreme Court of India comes to mind in the
case of Municipal Corporation of Delhi vs. Ganesh Razak, reported as 1995-(1)-LLN-
page 402 (Supreme Court), wherein the Court held that the jurisdiction of the Labour
Court under Section 33 C (2) is limited. It cannot adjudicate disputes relating to
entitlement of workmen to parity in wages. The powers of the Court can be exercised
only when the entitlement has been earlier adjudicated upon or recognised by the
employer. Its jurisdiction is similar to that of an execution Court. This interpretation of
the law promptly shut out the mass of litigation under this provision. Earlier, the worker
would file applications under Section 33 (C) (2) for every conceivable claim, genuine or
not, with the sole purpose of launching protracted litigation in the firm belief that the
employer would be harassed, consequently enter into an out-of-court settlement; thereby
the worker would be duly enriched by such action.
Similarly, the contention of the worker in industrial adjudication that he is unemployed

since the date of his termination is generally an untrue statement. Common sense tells
us that no human being living in this country can exist without some source of income
or the other. Regrettably, the Courts have taken the assertion of the worker that he is
unemployed as the “gospel truth” and therefore have repeatedly proceeded to
mechanically grant full back wages. This is an aberration. It appears as though Labour
Court litigation is merely a lottery ticket for the worker while proceedings are pending. It
is earnestly expected that Presiding Officers of Labour Courts and Industrial Tribunals
would keep in view the realities of the situation before granting necessary and appropriate
reliefs.
Before concluding it is necessary to mention that the conditions of service of Presiding

Officers need to be improved. In this regard, their salaries, allowances and perquisites
should be suitably enhanced so that their remuneration should behove their status.
They need to be provided with all necessary infrastructural facilities including quality
manpower in terms of support staff, transportation, books, journals and the like. It is
indeed a sad commentary that a Labour Court-cum-Industrial Tribunal is required to
function from the top floor of a hotel or from the premises of one of the litigants in
disputes pending before the same Court. It is hoped that the Ministry of Labour would
duly address of self to these necessary and humane needs of the Presiding Officers to
facilitate them to effectively decide cases as also to contribute their own personal
charisma in minimising disputes as also setting the right tone and discipline in the field
of labour adjudication.
8
Lok Adalats –
A Conceptual Framework:
The Indian Experience
V. Nagaraj
The term Lok-Adalat literally means Peoples' Court. This literal meaning is misleading
because of the word 'court'. Court is popularly understood to be a place where disputes
are resolved through decisions made by a judicial authority. Court exercises the sovereign
power of the State. Sovereign power and Peoples' Court cannot go together. Functionally,
Lok Adalat means mass mediation of disputes or large-scale mediation of disputes.
Lok Adalat involves assembling of persons having disputes in the presence of
experienced conciliators and the conciliators persuading the disputing parties to
find amicable settlements for their disputes. Disputing parties negotiate in person or
through their Advocates. The conciliators using their experience assist parties in the
negotiation process and help them find amicable solutions to their problems. In this
paper mediation and conciliation are used to mean the same, as there is not much
difference between the two. A conciliator mediates and persuades the parties to reach
a settlement.
Mediation is very much a part of Indian culture. Litigation, on the other hand, was
introduced by the colonial masters as a top down model. It is alien to Indian culture and
never got imbibed into the Indian culture. Respectable and elderly people acting as
mediators or functioning as Panchayat members is integral to Indian culture. In the past
it was these respectable and elderly people who used to help in resolving disputes
through mediation or mediation-cum-arbitration in Panchayats. Even now mediation
as a method of dispute resolution is quite common in India. Mediation is an informal
process where the mediator, who is a neutral third party, assists the disputing parties
in the pursuit of finding a solution to their dispute. What happens in Lok Adalats is
only mediation in a formal way. When mediation is done in a formal way it is called
conciliation.
LIMITATIONS OF LITIGATION
There are many limitations associated with litigation. Litigation involves lot of delay. It is
expensive. In India, the adversary method of dispute resolution is used in litigation. The
adversary method is one which gives the parties and their lawyers a great deal of control
over the way in which the facts are collected and presented. Each party will present the
evidence to the Court in a way most favourable to its own version of the facts and
adverse to that of the other party. The role of the judge is limited to that of an umpire,
ensuring that the evidence is presented in accordance with certain ground rules. The
adversary method of dispute resolution promotes game theory of dispute resolution.
Persons with good resources are likely to win the game. Winning the game in an
adversary system does not necessarily mean justice is done or there is peaceful solution
to the dispute is found. It only means that the dispute is resolved. This is not a good way
of resolving disputes in situations such as family relations or industrial relations where
human emotions are also involved. The adversary system being a win-or-lose situation,
the animosity between the disputing parties gets worsened and usually ends up having
an adverse impact on industrial relations.
ADVANTAGES OF MEDIATION
In view of the limitations of the adversary method of dispute resolution in areas where
human emotions are also involved, the advantages of mediation as a method of dispute
resolution have been seriously considered. Mediation as a method of dispute resolution
has many advantages in situations where human emotions are involved. Unlike a court
which gives a judgment with respect to the particular claim or charge before it, mediators
assist the disputants to explore their differences and to develop a mutually acceptable
formula for future co-existence. Moreover mediation is cheap and quick in resolution of
disputes. For mediation has to be successful, the mediator needs to normalise
the strained relations between the disputing parties. In order to achieve this, a
mediator must to be a good counselor who can comprehend the emotional
issues associated with the problem. In the process of helping the parties give vent
to their emotions, all the minor differences which culminated in the dispute are
also addressed. Once the emotional and ego-related aspects associated with the
dispute are soothed, the disputing parties are able to negotiate in a reasonable
way. Once they are reasonable in negotiating, it becomes easy to find solution to
their problems.
Mediation addresses the interests and not the positions taken by the disputing parties. It
is easy to address the interests and once that is done, it ends up in a win-win situation.
There are many ways of addressing interests. In a mediation there can be one or more
mediators. The role of mediator includes facilitating communication between the parties,
assisting in identifying interests and generating options for settlement.
Lok Adalats – A Conceptual Framework : The Indian Experience 137
DEVELOPMENT OF LOK ADALATS
The concept of the Lok Adalat was developed to revive and institutionalise the mediation
process. It was developed as a mechanism for providing quick solutions to disputes
with practically no expenditure involved for the parties. Incidentally, Lok Adalats also
help in reducing backlog of cases pending before Courts and Tribunals. The Legal
Services Authorities Act, 1987 has institutionalised the organising of Lok Adalats. Though
enacted in 1987, this Act came into effect only from 1996. Prior to its operationalisation,
Lok Adalats used to be organised by the Committee for Implementing Legal Aid Schemes
(CILAS). The settlements reached in the Lok Adalats organised by CILAS had no legal
sanctity per se. To confer legal sanctity on them these settlements would be sent back
to the Court/Tribunal from where they were referred to the Lok Adalat. The Court/Tribunal
would convert the settlement reached in a Lok Adalat to a compromise judgment. Such
compromise judgments became enforceable by the Court/Tribunal. The compromise
judgment being an amicable settlement, parties to the settlement would voluntarily honour
them. It was only as an abundant caution that they would be converted into a compromise
judgment. Also, through this the Court/Tribunal can show in its records that the case is
disposed. Such judgment being a compromise judgment there is no appeal or writ
petition against them. The only remote possibility is challenging such settlement as a
settlement obtained by fraud. The settlements reached in Lok Adalat must fulfil the
requirements of a contract. The conciliator in a Lok Adalat is guided by the principles of
fairness, equity and justice.
The Legal Services Authorities Act, 1987 which was brought into effect in 1996, has
vested the judiciary with the authority to conduct Lok Adalats. What was done by the
executive prior to 1996, would now be done by the Judiciary. This would ensure better
co-ordination. The judiciary organises Lok Adalats from the revenue taluk level upwards.
At the taluk level, the Lok Adalats are organised by the taluk Legal Services Committee.
At the district level, the Lok Adalats are organised by the District Legal Services
Committee. At the High Court the Lok Adalats are organised by the High Court Legal
Services Committee. At the Supreme Court, it is by the Supreme Court Legal Services
Committee. To coordinate various activities contemplated under the Legal Services
Authorities Act, 1987, there is the National Legal Services Authority at the national level.
The Chief Justice of India is the patron-in-chief of the National Legal Services Authority.
A serving or retired judge of the Supreme Court is the executive chairman of the National
Legal Services Authority. The appointment of the executive chairman is made by the
President of India in consultation with the Chief Justice of India. The Member Secretary
of the National Legal Services Authority is appointed by the Central Government in
consultation with the Chief Justice of India.
All State Governments have State Legal Services Authority at the state level to coordinate
and perform the functions conferred on it by the Legal Services Authorities Act, 1987.
The Chief Justice of the High court is the patron-in-chief of the State Legal Services
Authority. A serving or retired judge of the High Court is nominated by the Governor in
consultation with the Chief Justice of the High Court as the executive chairman of the
State Legal Services Authority. The Central and State Legal Services Authorities
constituted under the Legal Services Authorities Act, 1987 are high powered Committees.
They exercise powers conferred on them by the Legal Services Authorities Act, 1987
including the power to organise Lok Adalats. Under Section 4(e) and (f) of the Act, the
National Legal Services Authority has to perform the function of organising legal aid
camps, especially in rural areas, slums or labour colonies with the dual purpose of
educating the weaker sections of the society as to their rights as well as encouraging
the settlement of disputes through Lok Adalats. Also it has to perform the function of
encouraging settlement of disputes by way of negotiation, arbitration and conciliation.
Section 7(b) of the Act requires the State Legal Services Authority to conduct Lok Adalats
including Lok Adalats for High Court cases. Sec. 10(b) of the Act requires the District
Authority to organise Lok Adalats within the district. Section 11 B(b) of the Act requires
Taluk Legal Services Committee to organise Lok Adalats within the taluk.
The Lok Adalats are organised by the above mentioned bodies from time to time
depending on the need at such places as they think fit. Often the sitting judges act as
mediators in these Lok Adalats. The constitution of the bodies for organising Lok Adalats
and the practice of sitting judges acting as mediators indicates the concern shown by
the judiciary to encourage settlement of disputes through Lok Adalats. Lok Adalats have
jurisdiction to promote settlements in cases pending before the Court/Tribunal and also
in case of disputes not brought before the Court/Tribunal, even though the Court/Tribunal
has jurisdiction over the dispute. Lok Adalats have jurisdiction over all disputes other
than the offences which cannot be compounded. They can take cognizance of the
disputes when one or both the parties to the dispute make an application to the Court to
refer the dispute to the Lok Adalat. Parties can themselves come before the Lok Adalat,
in situations where the dispute has not reached the Court/Tribunal. The Court/Tribunal
can suo motto take initiative in referring the dispute to a Lok Adalat. When the Court/
Tribunal takes the initiative to refer the dispute to a Lok Adalat, it should hear the parties
about the proposal to refer the dispute to a Lok Adalat.
The Civil Procedure Code was amended in 2002. Now Section 89 of the Civil Procedure
Code read with Order 10 requires the Court to refer the dispute to a Lok Adalat apart
from other if the court is convinced that the dispute can be settled through Lok Adalat.
When the dispute is referred to a Lok Adalat, the provisions of the Legal Services Authority
Act, 1987 will apply. When a dispute is before the Lok Adalat, it shall affect a compromise
or promote a settlement between parties. In doing so, the Lok Adalat shall be guided by
the principles of justice, equity fair play and other legal principles. Every award of a Lok
Adalat shall be deemed to be a decree of a Civil Court. Every award made by a Lok
Adalat shall be final and binding on all parties to the dispute and no appeal shall lie to any
court against the award. This indicates the clear policy to promote resolution of disputes
through Lok Adalats.
The Lok Adalat shall, for the purpose of holding any determination under this Act, have
the same powers as are vested in a Civil Court under the Civil Procedure Code while
trying a suit in respect of the following matters, namely :
z Summarising and enforcing the attendance of any witness and examining him
on oath ;
z Discovery and production of any document;
z Reception of evidence on affidavits;
z Requisitioning of any public record or document or copy of such record or
document from any Court or office; and
z Such other matters as may be prescribed.
All proceedings before a Lok Adalat shall be deemed to be judicial proceedings within
the meaning of Sections 193, 219 and 228 of the IPC and every Lok Adalat shall be
deemed to be a Civil Court for the purpose of Section 195 of the Code of Criminal
Procedure Code. Section 193 of the IPC prescribes punishment for giving false evidence.
Section 219 says, whoever being a public servant, corruptly or maliciously makes or
pronounces in any stage of judicial proceeding, any report, order or verdict or decisions
which he knows to be contrary to law shall be punishable with imprisonment of upto
seven years or fine or both. Section 23 of the Legal Services Authority Act says that the
members of a Lok Adalat shall be deemed to be public servants within the meaning of
Section 21 of the Indian Penal Code. Section 228 of the Indian Penal Code talks about
the consequences of intentional insult or interruption to public servant sitting in judicial
proceeding. The punishment for such an act will be imprisonment for a term which may
extend to six months or fine which may extend to Rs 1000/- or both. Section 195 of the
Criminal Procedure Code lays down the procedure for prosecution for contempt of
lawful authority of public servants, for offences against public justice and for offences
relating to documents given in evidence.
LOK ADALAT AS A BODY TO CONDUCT MEDIATION
What happens in Lok Adalats is essentially mediation. The mediators encourage the
disputing parties to compromise their demands and reach an amicable settlement.
Mediation is voluntary, the parties cannot be coerced to go for mediation generally. In the
mediation if the parties are not satisfied about the solutions coming forth, they can walk
out of the mediation. In India after the 2002 amendment to the Civil Procedure Code,
parties can be compelled to go to the Lok Adalat or for conciliation. Conciliation is
compulsory under the Industrial Disputes Act, 1947. However, it is not compulsory that
parties must settle their disputes in Lok Adalats or through conciliation. Conciliation is
mediation in a formal way. Though there is voluntariness in settling the disputes in Lok
Adalats, the parties will not be able to take Lok Adalats lightly. There is lot of seriousness
built into the functioning of Lok Adalats. The conciliators in Lok Adalat have been vested
with powers of the Civil Court with respect to collection of all relevant information
necessary to resolve the dispute. When the conciliator collects the information or
facilitates the parties to collect information from each other the information is furnished
under oath. If false information is given it will attract the consequences of giving false
information. The Lok Adalats are adequately empowered to collect as well as facilitate
collection of complete information necessary for helping the resolution of the dispute.
The Legal Services Authorities Act also has provisions as mentioned earlier to see that
the mediators behave responsibly. Hence, Lok Adalat is more than simple mediation
process. There are adequate provisions to make all players behave responsibly in the
Lok Adalat proceedings. The Lok Adalat proceedings are to be guided by the principles
of justice, equity, fair play and other legal principles. So the settlement of a Lok Adalat is
guarded against exploitation, though being a settlement there are compromises, to some
extent.
LOK ADALATS AND THE INDUSTRIAL DISPUTES ACT, 1947
The Lok Adalat process is similar to conciliation in the Industrial Disputes Act (I.D. Act).
In I.D. Act, conciliation is compulsory. Only when conciliation fails, does the appropriate
Government body refer the dispute for adjudication. However, some State Governments
have made amendments to allow termination disputes to go for adjudication before
labour court directly. When there is conciliation facility available under the I.D. Act why
are we talking about Lok Adalats for resolution of industrial disputes which is again
conciliation.
The need for Lok Adalats in industrial disputes, inspite of conciliation being available
under the I.D. Act is because of the emotional quotient in human behaviour. When a
dispute arises, emotions run very high. When the emotions are high, reasoning is at its
lowest level. In this kind of mental framework, if the parties go for conciliation, the
conciliation will, in all probability, be a failure. This is clearly visible in termination disputes.
After failure of conciliation, the State Government refers the dispute for compulsory
adjudication. This takes some time, giving the parties an opportunity to introspect. Then
there is delay in the Labour Court/Tribunal. This gives more time for introspection. As
time passes, the emotion level is likely to come down and reason prevails. At this stage,
if conciliation facilities are made available, the chances of reaching an amicable
settlement are greater. Here the Lok Adalat can act as a 'face saver’ for the parties to
reach a compromise. Often, the parties badly need this 'face saving’ because they
have refused to compromise in the conciliation process held under the I.D. Act. In
situations where the termination disputes go before Labour Courts/Tribunals directly,
the parties must have some encouragement to settle the dispute outside the Tribunal.
A study conducted by the author on the working of labour courts in Bangalore reveals
how parties to a termination dispute can compromise when the dispute is pending
before the labour court. The study sample comprised 142 that were disposed off
termination cases during the period 1980-1990. These 142 cases were chosen at
random. Out of this, 36 cases, i.e. 25 per cent of the total cases, were settled outside
the Court and settlements were converted into compromise awards. The study reveals
that these compromises were reached at different stages of the proceedings in different
cases. In some cases compromise was reached on the first day of appearance by the
parties, while in some compromise was reached at the stage of arguments. It may be
noted here that the Presiding Officers did not play any role in promoting these settlements.
These 25 per cent settlements were reached entirely at the parties or their lawyers
initiative. If the presiding officers of the labour court play a pro-active role, the rate of
out-of-court settlements is likely to be higher.
The I.D. Act, 1947 does not contain any provision specifically authorising an industrial
adjudicator to record a compromise settlement and pass an award. The Civil Procedure
Code Order 23, Rule 3 provides for converting out-of-court settlement into compromise
judgment decree. The same principle is used by the Labour Court and Industrial Tribunals
to convert an out-of-Tribunal settlement into an award. Section 11 of the I.D. Act gives
much wider powers to the Labour Court and Industrial Tribunal to follow such procedures
as the authority thinks fit. In Workmen of Government Silk Weaving Factory, Mysore v.
Industrial Tribunal (1973) 2 LLJ 144 S.C., the Supreme Court upheld the validity of the
Industrial Tribunal passing an award on the basis of a compromise settlement. The
validation of the same conclusion and converting it into an award requires the presiding
officer of the Tribunal to show that there has been some application of mind in the
process.
Lok Adalat Settlements are out of Tribunal Settlements. While promoting a settlement a
Lok Adalat is required to follow the principles of justice, equity and fair play. The conciliators
in the Lok Adalats are serving or retired judges. Hence if an industrial dispute is settled
in a Lok Adalat it can be straightaway converted into an award. Section 33C of the I.D.
Act is a very powerful mechanism for enforcement of awards/settlements. Section 29
of the I.D. Act provides for punishment for breach of any term of any settlement or
award. The Schedule on Unfair Labour Practices to the I.D. Act considers failure to
implement an award, settlement or agreement as an unfair labour practice, which is
punishable under Section 25 U of the I.D. Act. Hence, an appropriate blend of I.D. Act
and Lok Adalats should help in resolving most of the industrial disputes amicably.
REFERENCES
1. Introduction to Legal Method, John Farrar and Anthony Dugdale, N.M. Tripathi Private Limited,
Bombay, 1984.
2. Legal Services Authorities Act, 1987.
3. Industrial Disputes Act, 1947.
4. Mediation, Principles, Process and Practice, Lawrence Boulle and Miryana Nesic, Butterworths,
2001.
5. Mediation, Principle and Practice, Kimberlee K. Kovach, West Publishing Co., 1994.
6. Civil Procedure, C.K. Takwani, 5th edn. Eastern Book Co.
7. Promoting Harmonious Labour Relations in India : Role of Social Dialogue, SAAT, ILO & Indian
Industrial Relations Association.
9
Constitution of National
Mediation Board for Labour
Disputes in India
Jose P. Verghese
INTRODUCTION
The Labour Laws in India are built on the ideals of Welfare State and Social Justice, and
on the principles of collective bargaining. It is for this reason that the labour laws of this
country remain progress-oriented, capable of remedying discriminations both at
national and international level, and always looking for resolution of disputes in an
amicable manner.
But unfortunately, the statutory stipulations provided for Labour Adjudication, could
not stand up to these aspirations. These provisions, summarily stated, consists in,
One, Compulsory Conciliation / Negotiation, Two, Voluntary Arbitration, and Three,
Compulsory adjudication, all three knitted with a silver line called collective bargaining.
But in reality the first one still remains a pious wish, the second, almost abandoned, and
the third, still struggling to get out of the bottle-neck of 'compulsory reference' by the
appropriate authority, and other ailments.
In view of this fact situation of facilities available for adjudication of labour disputes
in India, are we justified in insisting and imposing these facilities on all the foreign
investors in India; will it not be in violation of our solemn commitment to the international
community, contained in Article 51 of the Constitution of India to make efforts to
resolve international disputes by amicable settlement procedures like arbitration; can
we provide a dispute settlement system, within the framework of existing law for amicable
resolution of labour disputes - these are some of the important questions dealt with
in the present discourse.
THE GOAL
Our Nation is committed to bring about a Welfare State and this social objective was
the main thrust of the "Objective Resolution" adopted by the Constituent Assembly on
22.1.47. These objectives were clearly expressed in the first part of the Directive Principles
of State Policy1 and the same contains in Articles 38, 39, 41, 42, 43 and 43A of the
Constitution of India. It was declared that the State would make every effort to promote
the welfare of all the citizens by securing and protecting as effectively it may, a social
order in which justice, social, economic and political, shall inform all the institutions of
national life.2
The State will further strive to minimise the inequalities in income and eliminate
inequalities in status, facilities and opportunities.3 It was declared that the State would
make every effort to direct its policies towards securing all citizens to have the right to
have adequate means of livelihood.4 It will also ensure that the ownership and control of
the material resources of the community are so distributed so as to subserve the
common good,5 and the economic system would be made to operate in such a manner
that it will not result in concentration of wealth and means of production to the common
detriment;6 there will be equal pay for equal work,7 and the health and strength of workers
will be protected from every form of abuse and citizens will not be forced by any economic
necessity to enter avocation unsuited to their strength.8
The Sovereign State had promised that within the limits of its economic capacity and
development, it shall secure the right to work to every citizen and provide for securing
just and humane conditions of work.9
Besides the endeavor of the State would be to secure to all workers agricultural, industrial
or otherwise, work, a living wage and conditions of work ensuring a decent standard of
life and full enjoyment of leisure and social and cultural opportunities.10 And finally State
is committed to make every effort to secure participation of the workers in the
management of undertakings, establishments or other organizations engaged in any
industry.11
Supreme Court has attempted to build a salutary labour jurisprudence, in the

same lines, while interpreting the Constitution:-
The Apex court of the country has reaffirmed these ideals stating that the past trend of
absolute freedom of contract has to yield to the higher claims of social justice.12 The
commitment to protect the economically weaker sections, including the workers, has
been viewed as a part of building up of a Welfare State through social justice. The
paramount importance is to primarily bring about the welfare of the working class as
well as achieve industrial peace without which there won't be any economic growth.
Constitution of National Mediation Board for Labour Disptues in India 145
Social justice is not based on contractual relations and is not to be enforced on the
principles of contract of service. It is something outside these principles, and is involved
to do justice without a contract to back it.13 Social security for the weaker sections of our
nation is of utmost importance. One cannot forget the limitations under which we are
living; if we did not approach our problems in a pragmatic way the whole purpose may
be defeated.14 The concept of social justice has a comprehensive sweep and it is neither
pedantic nor one sided but is founded on socio-economic equality and the same
demands a realistic and pragmatic approach for resolving the controversy between the
capital and labour by weighing it on an even scale with the consciousness that industrial
operations in modern times have become complex and complicated and for the efficient
and successful functioning of an industry various amenities for those working in it are
deemed as essential for a peaceful and healthy atmosphere.15
In the opinion of Gajendragadkar J, the argument that the considerations of social justice
are irrelevant and untenable in dealing with industrial disputes, has to be rejected without
any hesitation. The development of industrial law during the last decade and several
decisions of the Apex Court in dealing with industrial matters have emphasised the
relevance, validity and significance of the doctrine of social justice. Indeed, the concept
of social justice has become such an integral part of industrial law that it would be idle
for any party to suggest that industrial adjudication can or should ignore the claims of
social justice in dealing with industrial disputes. The concept of social justice is not
narrow, or one-sided, or pedantic, and is not confined to industrial adjudication alone. Its
sweep is comprehensive. It is founded on the basic idea of socio-economic equality
and its aim is to assist the removal of socio-economic disparities and inequalities.16
Anything said about the Apex Court is incomplete without referring to what the ailing
octogenarian jurist, Justice Krishna Iyer has to say about it. According to him industrial
jurisprudence does not brook nice nuances and torture some technicalities to stand in
the way of just solutions reached in a rough and ready manner. Grim and grimy
life-situations have no time for the finer manners of elegant jurisprudence.17
The Labour Ministry as well has constantly endeavored to achieve the same
purpose
Similar was the opinion of the National Labour Commission, which stated that the
industrial jurisprudence has developed in India by establishing an harmony for economic
life of India with a view to achieve Welfare State. Industrial jurisprudence seeks to evolve
a rational synthesis between the conflicting claims of the employers and the employees.
Leaving aside the case of minimum wages which the employer must pay, in the matter
of other wages higher than the category of minimum wages, and in regard to other
matters which come under the category of industrial disputes, industiral jurisprudence
does and should always try to examine the merits of the rival contentions and seek to
resolve the conflict by evolving solutions which do no injustice to employers and fully
meet the employees legitimate claims. In finding out solutions to industrial disputes
great care is always taken, as it ought to be, to see that the settlement of industrial
disputes does not go against the interests of the community as a whole.18
Pt. Jawaharlal Nehru in the initial years of freedom, had come up with a comprehensive
solution on this aspect, under the well known "Industrial Truce Resolution" which
consisted of the following aspects:
1. The labour was assured fair wages as the first charge on production;
2. As a first step towards improving the standard of living of workers, immediate
attention should be devoted to the problem of housing of industrial labour, the
cost of such housing should be shared in suitable proportions between the
Government employers and labour, the share of labour being given in the shape
of a reasonable rent; and
3. Both will share the produce of their common effort after making provisions for
payment of fair wages to labour, a fair return on capital employed in the industry
and reasonable reserves for the maintenance and expansion of the undertakings.
But on 11.12.1963 Pt. Jawahar Lal Nehru himself told the Lok Sabha that the "Industrial
Truce Resolution" has failed in its implementation. This assessment was also endorsed
by the National Commission on Labour which stated that the increase in money wages
of industrial workers since independence have not been associated with a rise in real
wages, nor have real wage increases been commensurate with improvements in
productivity. Simultaneously, wage costs as proportion of total costs of manufacture
have registered a decline and the same is true about workers share in value added on
manufacture. Wage disputes under these conditions have continued to be the single
most important cause of all industrial disputes.19
The opinion of the International Community was also not different in any manner
By way of solution International Bank for Reconstruction and Development suggested

that stable development would seem to require a more equitable distribution of wealth
and a greater degree of participation in political and economic life this has so far been
characteristic of many developing countries. Growth which merely makes the rich richer
will not make for the stable development of a healthy community. Policies which serve
to distribute income more equitably must, therefore, become as important as those
designed to accelerate growth.20
Interestingly a Study Group set up by ILO also had stressed the need for re-direction of
investment and for other measures to increases to increase opportunities for the working
poor to raise their productivity and incomes, including some redistribution of productive
resources and of income - obviously increases with the scale or the speed of the intended
results of the antipoverty policy. The more ambitious the employment target, and the
sooner it is to be attained, the more drastic the measure that will be needed. The need
for redistributive measures and for redirection of investment increases further if the
targets are not only for higher employment and the output of marketable goods which it
must entail but also extend to other basic needs such as public health and general
education of adequate quality. Thus, a combination of these measures together with
more equitable access to public services is needed if underemployment, inequality and
poverty are to be significantly reduced. Such measures need not imply a slower growth
of output. They place greater emphasis on patterns of growth leading to a more equitable
distribution of the gains from growth, and they may well lead to increasing growth rates
as well.21
Amicable Settlement of Disputes was always believed to strengthen Collective

Bargaining22
An individual employee has no strength or skill to bargain in the face of unabashed

injustice. This has given rise to the process of collective bargaining. The entire labour
force through a trade union or otherwise takes a stand against the employer for acceding
to their demands. The strength of the employer's wealth and organization, coupled with
weapons of layoff, lock-out and shut down is counter balanced by the workers' man-
power and agitational weapons of strike, go slow, boycott, black-ban etc. The possibility
of the labour being economically oppressed to the starving point is counter-balanced by
the possibility of industrial dislocation with all its attendant hardships and evil, the
occurrence of which is regarded as one of the powerful levers to bring about settlement.
The trade unions with sufficient strength of manpower are able to bargain far more
effectively than individual workman.
The process of reaching a collective agreement by collective bargaining is highly

complicated one. It involves complex interchange of ideas combining argument, horse-
trading, bluff, cajolery and threats. By its very nature, it is a rough, tough undertaking. Its
essence is the reluctant exchange of commitments, both parties want to yield less and
get more. It is not qualitatively different from a business deal in which both negotiators
have something less than 100 per cent trust in one another. Nor is it much different from
the practice of diplomacy;
Mr. Jagjivan Ram, when he was the Labour Minister, stated:

'I must make it clear that in providing for compulsory adjudication our intention is
not to oust or in any way minimise the importance of the methods of voluntary
negotiation and conciliation in the settlement of disputes'.
Mr. Jagjivan Ram's approach, of balance between collective bargaining and compulsory
adjudication, found reflection in the Labour Relations Bill, 1950 and the Trade Unions
Bill, 1950, introduced in the Parliament of India. Under the Labour Relations Bill, 1950,
collective bargaining was made compulsory for both employers and unions under
stipulated conditions. The Bill provided for a procedure for collective bargaining, which
included the prohibition of strikes and lock-outs until the parties had resorted to collective
bargaining and obligation on both the employers and workers to observe collective
agreements. The government office was declared to be the purpose of collective
bargaining.
Mr. V.V. Giri who took over as the new Labour Minister in 1952 sought to completely
overhaul the existing scheme of compulsory adjudication. At the Indian Labour
Conference at Nainital, Mr. Giri tried, with moderate success to win support for shifting
emphasis towards collective bargaining. Following the resignation of Mr. Giri in 1954,
Mr. Khandubhai Desai took over as Labour Minister. While acknowledging that the shift
from compulsory adjudication to collective bargaining was essential, he emphasized
that compulsory adjudication has to be retained as a reserve weapon in the armoury of
the state for tackling labour-management relations.
Thus, despite attempts like the voluntary Code of Discipline in Industry adopted by the
Indian Labour Conference in 1958 obliging management and unions not to take unilateral
action and to settle all future disputes through conciliation, negotiation and voluntary
arbitration, collective bargaining progressively took a back seat. The code of Discipline
in Industry which was ratified by representatives of the All-India organizations of employers
and workers in March 1958 obliging management and unions not to take unilateral action
and to settle all future disputes through conciliation, negotiation and voluntary arbitration,
collective bargaining progressively took a back seat. Enumerated what constituted acts
of interference and declared that there has to be a just recognition by employers and
workers of the rights and responsibilities of either party and that neither party will have
recourse to coercion, intimidation or victimization. The Code of Discipline is a non-
statutory measure and over the Years it has lost much of its importance.
Collective bargaining, which developed in the industrialized countries as the method of

regulating employment relations, requires the existence of two parties, the employer
and the workers. The collectives of workers ranged on one side, would in most cases,
be organized into trade unions. The need for the existence of trade unions and in turn,
the right of trade unions to function freely and further, the right of individual members to
freely join and participate in the affairs of the trade union then would, a fortiori, be an
indisputable and necessary condition for the efficient functioning of collective bargaining.
Viewed in this light, any action of either party to the collective bargaining process which
interferes with the formation or existence of unions or in the participation of individuals in
these organizations would hamper the collective bargaining process and would merit
being termed an unfair labour practice. At the same time collective bargaining also
requires that the collective bargaining agent be identified from among several available
collectives of workers - be they trade unions or groups of workers-and further that this
bargaining agent has the right, and also the duty, to negotiate on behalf of the workers,
in short be an exclusive bargaining agent. The need to evolve criteria for determining
what have been variously termed as a bargaining agent or a recognized union is a
prerequisite for collective bargaining and the failure to do so or irregularities in these
procedures could also be treated as an unfair labour practice.
STATUTORY PROVISIONS RELATING TO CONCILIATION
The Industrial Dispute Act provides for statutory conciliation. It refers to conciliation
conducted at the instance of appointed conciliation officers or to mediation that proceeds
a statutory conciliation proceeding. Section 2 (p), Section 18 clause- (1) and Section 19
clauses (1) & (2) refers to both these types of Conciliation/Mediation.
Section 4 of the Act clearly asserts that Conciliation Officers will be appointed by the
appropriate authority and such appointment will be notified in the Official Gazette and
they will be 'charged with the duty' of mediating in an promoting the settlement of labour
disputes. Subsection (2) further specifies that the appointment can be either for a limited
period or even permanent.
Under Section 11 of the Act,23 a conciliation officer, for the purpose of inquiry into any
existing or apprehended industrial dispute, after giving reasonable notice, is given the
power to enter the premises occupied by any establishment to which the dispute relates;
he can even enforce the attendance of any person for the purpose of examination of
such person or call for and inspect any document which he has ground for considering
to be relevant to the implementation of any award or carrying out any other duty imposed
on him under the Act. For that purpose, the conciliation officer shall have the same
powers as are vested in a Civil Court under the Code of Civil Procedure, 1908 (5 of
1908), in respect of enforcing the attendance of any person and examining him or of
compelling the production of documents. Once the notice or 'summons goes from the
office of the conciliator, the parties have no choice but to obey and appear before the
conciliator; he is compelled to do so. A conciliation officer, is deemed to be a public
servant within the meaning of section 21 of the Indian Penal Code (45 of 1860). Thus
the overall effect is that the statutory conciliation cannot but be viewed as 'compulsory
conciliation'.
More over the statute enjoins the conciliation officer, to hold conciliation proceedings in
the prescribed manner, where an industrial dispute exists or is apprehended; and under
no circumstances the consent of the parties is obtained. He has to investigate the
dispute, in all its ramifications for the purpose of bringing out a settlement and even
'induce' the parties to arrive at an amicable settlement. For all legal purposes, conciliation
proceedings are deemed to have been commenced on the date on which a notice of
strike or lock-out under Section 22 is received by the Conciliation Officer. Similarly
conciliation proceedings are deemed to have been concluded, where a settlement is
arrived at, when a memorandum of the settlement is signed by the parties to the dispute;
where no settlement is arrived at, when the report of the conciliation officer is received
by the appropriate Government.24 Under clause (3) of Section 12, if a settlement of the
dispute or of any of the matters in dispute is arrived at in the course of the conciliation
proceedings, the Conciliation Officer is required to send a report to that effect to the
appropriate Government, together with a memorandum of the settlement signed by the
parties to the dispute.25 And if no such settlement is arrived at, the conciliation officer is
bound to send to the appropriate Government a full report setting forth the steps taken
by him for ascertaining the facts and circumstances relating to the dispute and for
bringing about a settlement thereof, together with a full statement of such facts
circumstances, and the reasons on account of which, in his opinion, a settlement could
not be arrived at. Both the reports, whether it was a failure or success, will have to be
sent within fourteen days of the commencement of the conciliation proceedings.
The binding nature of the settlement arrived at during the course of the conciliation
proceedings, also does question the voluntariness of the statutory conciliation
proceedings, to this effect that the settlement arrived at remains in force only for six
months and one of the parties is free to give notice for termination of the settlement
agreement, to the opposite party. Section 19 of the Act, provides for that.26 As per the
said provision the settlement comes into operation on the date on which the
memorandum of settlement is signed by the parties to the dispute unless a different
date is agreed to by the parties to the dispute. Under clause (2) the settlement has a life
of six months from the date on which the memorandum of settlement is signed by the
parties to the dispute and the same shall continue to be binding on the parties after the
expiry of the said period. And in case a notice in writing of the intention to terminate the
settlement is given by one of the parties to the other party, the period of the settlement
will further stand extended by another two months. This is of course subject to agreement
between the parties with respect to the period during which the agreement is valid and
enforceable. The parties are free to determine the period during which a settlement
could continue to be enforceable and valid.
A settlement arrived at by the parties otherwise than in the course of conciliation

proceedings would remain binding on the parties to the agreement,27 and the said
provision does not contain the restrictive clause of six months' validity in the absence of
an agreement for enforcement of a settlement agreement.
Liberalization has substantially affected the situation, necessitating new equations and
balances to be brought into the dispute resolution mechanism. It may be difficult to
proceed through the entire conciliation proceedings as envisaged by the Statute. What
is suggested is to go through a Mediation procedure as described in Sections 2(p) and
18 (1) of the Act, and for the purpose of enforcement; Rules adapted from the provisions
of Section 19 may be relied upon.
The following are some of the important factors to be taken into consideration while
Rules are formulated for National Mediation Board for Settlement of Industrial Disputes:
1. Mediation process can start only if the parties to the dispute agree to refer the
same for mediation. This agreement between the parties can be incorporated at
the time when the contract of service is signed by the parties, incorporating a
Mediation-clause therein, stating that in case any dispute arises with respect to
any of the terms and conditions of the contract/service, the parties agree that
the said dispute be referred to Mediation in accordance with the Rules of National
Mediation Board for Settlement of Industrial Disputes. Besides, parties can also
agree to go mediation even after the dispute has arisen. Thirdly such an
agreement can entered into between the parties during any of the proceedings,
before Conciliator, Board of Conciliation, Arbitrator or even when the case is
pending for adjudication.
2. These Rules are primarily meant for resolving individual disputes, while arbitration
is recommended for group disputes or the involving trade union as one of the
parties.
3. The Rules framed shall not in any manner contravene any of the existing statutory
provisions on the subject. What is envisaged is mediation/conciliation other than
the conciliation proceedings under the Industrial Disputes Act [Vide Sec. 18 (1)],
to be resorted to. Enforcement of the agreed settlement can be made, in
accordance with the provisions contained in Section 19 of the Act, on agreed
terms. Under Sec. 19(1), parties are free to agree as to the date on which a
settlement shall come into operation; and Sec. 19 (2) further provides that parties
to the dispute can also agree as to the period during which a settlement shall
remain binding between the parties. These provisions can be incorporated into
the rules to be framed.
4. The Rules must be of international standard, that is to say, it should consider
adapting similar rules in vogue, such as UNCITRAL Model Law.
5. Even though the law applicable has to be the Indian laws, equity demands that
the parties and the mediators should have the freedom to decide amicably the
wage component in terms living wage, on the basis of international standards,
at least when one of the parties happens to be not governed by the Indian laws.
6. Ordinarily there shall be only one mediator, agreed to by both the parties out of a
panel of Mediator maintained and declared by the Board, and the fees of such
sole Mediator shall be payable by the management. In case of disagreement as

the sole Mediator, the parties are free to have two mediators, one each appointed
by the disputing parties; in such an event the fees of the Mediators shall be
shared equally by both the parties. Similarly if there were three mediators, the
two Mediators appointed by each party would select the third Mediator, and the
fees for the three Mediators shall be divided equally between the parties.
REFERENCES
1. Vide Part IV of the Constitution of India.
2. Cfr. Article 38(1).
3. Cfr. Article 38(2).
4. Cfr. Article 39(a).
5. Cfr. Article 39(b).
6. Cfr. Article 39(c).
7. Cfr. Article 39(d).
8. Cfr. Article 39(e).
9. Cfr. Article 41.
10. Cfr. Article 43.
11. Cfr. Article 43A. Even after two scores and fourteen years of the working of our Constitution, the
promises made to the working class are still a far cry, especially the wage component. Perhaps the
social fabric of the new born independent nation, could not probably but to succumb to the
pressures of from the dominant industrialists at the center and the landlord/agriculturists at the
State level. But that does not mean that the scenario of the present was the goal set by the founders
of the nation.
12. Rai Bahadur Divan Badri Das Vs Industrial Tribunal 1962 II LlJ 366.
13. Hidayutullah J in Rashtriya Mill Mazdur Sangh Vs Apollo Mills Ltd 1960 II 276 at 271.(S.C.)
14. Hegde in Burma Shell Oil Storage and Distributed Co. of India LtdVs their workmen 1970 I LL.J. 363
at 366 (S.C.).
15. Dua J in Ahmedabad Manufacturing & Calico Printing Co. Ltd Ram Tehal Vs. Ramanand 1972 II LLJ
165 at 174. (S.C.)
16. JK Cotton Spinning and Weaving Mills Co. Ltd Vs. Laban Appellite Tribunal.
17. Krishna Iyer J., in Basti Sugar Mills Co. Ltd. Vs. State of U.P.00 1978 II LLLJ 412, at 419 (S.C.).
18. Report of the National Commission on Labour-1969 para 6.5.5.
19. Vide Report of the National Labour Commission (1969).
20. Cfr. Partners in development, Report of the Commission on International Development and Inter-
national Bank for re-construction and Development, 1969.
21. ILO Employment, Growth and Basic Needs, 1976, quoted from G.B. Pai, Social Welfare Legislation
in India, An overview, Labour Adjudication in India 2001, (ILI Publication).
22. For this part, substantial reliance is acknowledged to two articles that appeared in 'Labour
Adjudication in India', 2001, an ILI Publication: the first one is by O.P. Malhotra: 'Arbitration and
Labour Disputes' and the other by Kamala Sankaran: 'Unfair Labour Practices - a Overview'.
23. The relevant clauses of Section 11 are given here below:
Section 11(2) A conciliation officer or a member of a Board, or Court or the presiding officer of a
Labour Court, Tribunal and National Tribunal may for the purpose of inquiry into any existing or
apprehended industrial dispute, after giving reasonable notice enter the premises occupied by any
establishment to which the dispute relates.
(4) A conciliation officer may enforce the attendance of any person for the purpose of examination
of such person or call for and inspect any document which he has ground for considering to be
relevant to the implementation of any award or carrying out any other duty imposed on him
under this Act, and for the aforesaid purpose of the conciliation officer shall have the same
powers as are vested in a Civil Court under the Code of Civil Procedure, 1908 (5 of 1908), in
respect of enforcing the attendance of any person and examining him or of compelling the
production of documents.
(6) All conciliation officers, members of a Board or Court and the presiding officers of a Labour
Court, Tribunal and National Tribunal shall be deemed to be public servants within the
meaning of section 21 of the Indian Penal Code (45 of 1860).
24. Vide the relevant provisions of Section 20:
20. (1) A conciliation proceeding shall be deemed to have commence on the date on which a notice of
strike or lock-out under section 22 is received by the conciliation officer or on the date of the order
referring the dispute to a Board, as the case may be.
(2) A conciliation proceeding shall be deemed to have concluded-
(a) Where a settlement is arrived at, when a memorandum of the settlement is signed by the
parties to the dispute;
(b) Where no settlement arrived at, when the report of the conciliation officer is received by the
appropriate Government or when the report of the Board is published under section 17, as the
case may be;
25. The relevant clauses of Section 12 are given here below:
Section 12. (1) Where an industrial dispute exists or is apprehended the conciliation officer may, or
where the dispute relates to a public utility service and a notice under section 22 has been given,
shall, hold conciliation proceedings in the prescribed manner.
(2) The conciliation officer shall, for the purpose of bringing about a settlement of the dispute,
without delay, investigate the dispute and all matter affecting the merits and the right settlement
thereof and may do all such things as he thinks fit for the purpose of inducing the parties to
come to a fair and amicable settlement of the dispute.
(3) If a settlement of the dispute or of any of the matters in dispute is arrived at in the course of the
conciliation proceedings the conciliation officer shall send a report thereof to the appropriate
Government or an officer authorized in this behalf by the appropriate Government together with
a memorandum of the settlement signed by the parties to the dispute.
(4) If no such settlement is arrived at, the conciliation officer shall, as soon as practicable after the
close of the investigation, send to the appropriate Government a full report setting forth the
steps taken by him for ascertaining the facts and circumstances relating to the dispute and for
bringing about a settlement thereof, together with a full statement of such facts circumstances,
and the reasons on account of which, in his opinion, a settlement could not be arrived at.
(6) A report under this section shall be submitted within fourteen days of the commencement of
the conciliation proceedings or within such shorter period as may be fixed by the appropriate
Government:
Provided that, subject to the approval of the conciliation officer the time for the submission of the
report may be extended by such period as may be agreed upon in writing by all the parties to the
dispute.
26. Relevant clauses of Section 19 are given here below:
Section 19(1) A settlement shall come into operation on such date as is agreed upon by the parties
to the dispute, and if no date is agreed upon, on the date on which the memorandum of the
settlement is signed by the parties to the dispute.
(2) Such settlement shall be binding for such period as is agreed upon by the parties, and if no
such period is agreed upon, for a period of six months from the date on which the memorandum
of settlement is signed by the parties to the dispute and shall continue to be binding on the
parties after the expiry of the period aforesaid until the expiry of two months from the date on
which a notice in writing of an intention to terminate the settlement is given by one of the parties
to the other party or parties to the settlement.
27. Vide Section 18(1).

10
Strengthening the
Labour Inspection System
in Kerala
Elias George
EXECUTIVE SUMMARY
Kerala has a well-developed tradition of ensuring compliance with labour standards

particularly in the organised sector; in comparison with the rest of the country. The
distinctive feature of Kerala’s labour standards compliance system is its focus on tripartite
mechanisms for supervision, particularly in the plantation and traditional industry sectors.
The State has a strong and vociferous trade union leadership who has been in the
forefront of efforts for setting labour standards.
The labour inspection machinery is divided between the Labour Commissionerate and
Directorate of Factories and Boilers. However the existing inspection system is facing a
number of difficulties on account of the proliferation of establishments and the
cumbersome inspection procedures that are out of synch with present requirements.
Labour inspectors are also deficient in number and lack motivation. Hence an incentive
/ disincentive system for ensuring proper inspection is necessary. The supervision and
monitoring systems for labour inspection efforts is also inadequate.
There is a pressing need to revamp the relevant legislations and rules pertaining to the
maintenance of labour standards. The labour inspection cadre has to be reviewed and
proper incentive structures have to be put in place for effective functioning. The training
of the labour inspection force is an urgent priority. The tools of Information Technology
have to be deployed for ensuring modernisation of the labour standards verification
apparatus.
Horizontal co-ordination between the labour inspection machinery both of the State and
Central Governments is now lacking. A system has to be put in place for ensuring this.
There is also the need to reorient the labour inspection machinery towards the
unorganised sector, which is around 90% of the workforce. The tripartite supervision
machinery that has been built up in a few selected sectors in Kerala needs to be
extended to other areas also.
The challenge before the labour inspection machinery in Kerala is to ensure wage and
workplace security at a time when the traditional production paradigm is undergoing
rapid change. This can be done through revamping the procedures, as well as the
mindsets of the stakeholders who are involved in labour standards setting and
maintenance. There has to be a paradigm shift from an ‘adversarial system’ of labour
supervision to a ‘presumptive system’ where there are positive incentives for all
concerned to conform labour standards.
The State of Kerala has a relatively well-developed legislative environment and

administrative system of labour inspection, vis-à-vis the other Indian States; for ensuring
the wage security and workplace security of the working population. Kerala has had a
strong tradition of workers coming together for asserting their rights; and the trade union
movement has been very active in the State. The labour leadership is also fairly politicised,
with the mainstream political parties depending substantially on the trade union leadership
in their quest for power. Hence the trade unions have traditionally had a dominant voice
in the monitoring of labour welfare measures by the Government.
The labour inspection machinery in Kerala is supervised by the Labour Department in

Government and is divided between the following line departments.
1. Labour Commissionerate
2. Directorate of Factories and Boilers
I. LABOUR INSPECTION MACHINERY
1. Labour Commissionerate
It is the task of Labour Commissioner to oversee the implementation of all regulations

pertaining to wage security, decent working conditions and ensuring related basic minima
for workers in the organised and unorganised sectors. The Labour Commissioner
administers thirty one Acts ranging from the enforcement of Minimum Wages to the
Equal Remuneration Act for ensuring parity between the sexes.
The Labour Commissioner traditionally belongs to the Indian Administrative Service. He

is assisted by a hierarchy of officers ranging from the Assistant Labour Officers at the
cutting edge; to the Additional Labour Commissioner to supervise enforcement and
conciliation related issues. The department has a strength of 1112 personnel.
Strengthening the Labour Inspection System in Kerala 157
The Labour Commissioner is also the chief conciliation officer of the State responsible
for ensuring industrial peace. His role is divided between ensuring harmonious industrial
relations and enforcing labour standards. He is also the head of the tripartite machinery
set up for ensuring labour standards enforcement and industrial relations in specified
sectors.
The Plantation sector in Kerala engages a substantial part of the workforce (around half
a million workers). The labour department has an Inspectorate for ensuring compliance
with labour standards in this sector. This Inspectorate is headed by a Chief Inspector of
Plantations who has 10 Plantation Inspectors reporting to him. They are empowered to
ensure labour standards compliance in the various Tea, Coffee, Cardamom and Rubber
estates spread out over the western hills of Kerala. This inspection directorate
complements the tripartite supervision machinery (Plantation Labour Committee) that
monitors labour standards compliance.
2. Directorate of Factories and Boilers
The Factories and Boilers Directorate is a technical organisation which primarily ensures
the implementation of workplace security standards in factories and mechanised
environments. The primary role of this organisation is to ensure the implementation of
the Factories Act, the Boilers Act and Technical Standard setting regulations. The
Directorate also implements non-technical laws like the Payment of Wages Act, Maternity
Benefit Act etc. The list of enactments implemented by the Directorate is enclosed as
Annexure - I
The Directorate of Factories and Boilers department has 273 personnel including
technical and non-technical staff. They also have a medical wing in charge of the
enforcement of standards relating to occupational safety and health.
It can be seen that there are around eighty Acts and Rules which are administered by
the personnel of these two departments for ensuring labour standards. Kerala is a
pioneer of labour welfare enactments and the labour legislative system is highly
developed. In addition to these listed enactments, there is also another variety of laws
that aim to ensure social security protection for various categories like Agricultural
labourers, Cashew Workers, Construction Workers, Motor Transport Workers, Beedi
Workers etc. The Labour inspection system reports to the Labour Secretary who in turn
is accountable to the Labour Minister of the State.
II. STATUS OF THE LABOUR INSPECTION SYSTEM
It cannot be disputed that over the years the role and scope of the labour inspection
system has tended to stagnate, on account of a variety of reasons including the
following.
1. The stresses of competition between various States and Countries, which

fosters levelling pressures on labour standards in the production process.
2. Fiscal stresses of the State Government which impact on the resources
available for undertaking inspections.
3. The perception that the labour markets in Kerala have traditionally been
overregulated to the detriment of fresh investments that could possibly flow into
the State.
4. Poor cadre management of the labour inspectors and their stagnation.
5. The lack of modernisation and antiquated legislation which is out of synch with
the times, and difficult to enforce on the ground.
6. The lack of training, leadership and motivation of the labour inspection
machinery.
Moreover, like in the rest of India, there is disproportionate emphasis on labour
enforcement standards in the organised sector. The unorganised sector comprising
around 90% of the workforce is largely outside of the purview of organised inspections.
The defects of the formal inspection system are made up to a certain extent by
the proactive trade unions in Kerala who point out breaches in labour standards
maintenance to the appropriate authorities. There are 11,567 registered Trade Unions
in the State as on 31.12.2002, though a considerable proportion of these are inactive.
On account of the archaic nature of labour legislation, the penalties for infringement
of labour standards are often low, and difficult to prove. Hence labour standards
enforcement efforts largely end up without any penalty, except the harassment to the
employer of undergoing a judicial process through the formal judicial system.
There is a perception that the labour standards in Kerala are much better enforced than
in other Indian States, and hence many employers also do not feel the need to actively
participate in the enforcement system.
1. Legal Basis
Wage security and work place security provisions are built into a variety of Acts and
Rules, some of which have been enacted by the Union Government and others by
the State. Since the subject of labour is allotted to the concurrent list of the Indian
Constitution; both the Union Government as well as the State can enact laws pertaining
to Labour. There are around 22 Acts of the Union Government and 9 Acts of the
State Government implemented by the Labour Department containing provisions
relating to labour.
The key Central Acts are the Trade Unions Act which basically cover conditions relating
to unionisation, the Payment of Wages Act for ensuring wage security, the Minimum
Wages Act, the Equal Remuneration Act, the Child Labour (Prohibition and Regulation)
Act and Workmens’ Compensation Act which covers compensation in case of work-
place injuries and death. The list of concerned Acts and respective rules is appended
as Annexure II.
The enactments of State Government attempts to fill the gap in the Central legislation.
The Kerala Agricultural Workers Act 1974 attempts to provide a rudimentary measure
of protection and social security to around 1.7 million agricultural workers of Kerala
who belong to the unorganised sector. The Kerala Headload Workers Act attempts
to regulate the terms and conditions of employment of Headload Workers and
their welfare. The list of State enactments and respective rules is appended as
Annexure III.
The administration of these Acts is the primary responsibility of officers of the Labour
Department. Supervision by tripartite systems have not been built into any of these
Acts, and employers’ organisations and trade unions have only got a “Whistle blower”
role in pointing out violations in these enactments. Many of these Acts date back half a
century and there is a pressing need to modernise, rationalise and simplify their
provisions. There is also the need to integrate like provisions contained in a variety of
Acts. One of the major lacunae of these enactments is their insistence on maintaining
a large number of forms and registers without much consequential benefit. Such
needless paperwork provide no great reliefs to the employee and its major consequence
is the harassment value.
The focus of labour protection enactments need reexamination. These legislations were
enacted at a time when the production process followed the ‘smoke stack’ production
paradigm and when industry was largely protected from the winds of global competi-
tion. Now the nature of the production process is undergoing fundamental change; the
service sector is predominant, production centres are getting dispersed, and global
competition is leading to an international benchmarking of the labour components of
production. There is also a tendency to move away from wage security towards income
security.
The challenge before the labour administration is to ensure basic protection for
employees in this changing environment without diluting the competitive edge that the
production process needs to have if local produce is to remain competitive in the global
market place.
The ILO Conventions and Recommendations that are relevant to the labour inspection
system in Kerala are appended as Annexure IV. It is a fact that the labour legislation in
Kerala as well as the enforcement system by and large complies with the provisions of
these Conventions.
One of the persistent complaints of the employers is the fact that many of the labour
protection legislations have become out of synch with the requirements of the modern
day production process.
The State Government has recently commenced an exercise of simplifying and

rationalising the provisions of the State enactments. The objective of this exercise is
to make these Acts easier to administer and to comply; without diluting any of the
protections afforded to the workers.
2. Labour Inspection Policy
It is a fact that there is practically no well thought out labour inspection policy per se in
the State. In earlier days, the number of establishments were more manageable vis-a-
vis the number of labour inspectors. The current policy is confined to numerical
supervision of inspections effected; with each level of the labour inspection hierarchy
being assigned a specified number of establishments. Now this system is also under
pressure, with the proliferation of new establishments. Unless these issues are settled,
there is a danger of the labour inspection machinery slipping into a reactive role, with
labour inspection being resorted to only in the case of substantive and vociferous
complaints from employees. The labour inspection system also suffers in that it is by
and large focused on the labour inspector. There is no attempt to institutionalise a role
for employers and trade unions in ensuring labour standards, except the tripartite
machinery in certain sectors described elsewhere in this paper.
An attempt is being made to overcome the deficiencies of labour inspection system by

resorting to “Presumptive Compliance Regime” or the “Self-certification system” in sun
rise areas like IT. Efforts have also underway to put in place a positive labour standards
vetting system on the lines of the labour quality assurance system provided by
classification societies. In other words, establishments practicing the highest levels of
labour standards would be accorded labour quality certification by the State Government.
3. Labour Inspection Procedures
Labour Inspections are conducted by the officers of the concerned departments largely
on a periodic rotation basis. However the labour inspection establishment has remained
largely stagnant over the years and is unable to cope with the mushrooming growth of
industries and establishments. The cutting edge level officers are the Assistant Labour
Officers in the Labour Commissionerate and the Inspector of Factories and Boilers in
the Directorate of Factories and Boilers. The activities of labour inspectors are supervised
by the next higher tier of officers, which is generally the District Labour Officers in the
Labour Commissionerate, and the Deputy Directors in the Directorate of Factories and
Boilers. However the system looks only at numerical supervision of the establishments
inspected, without giving importance to the quality of inspections undertaken. In view of

the large number of establishments, it would be desirable to focus on those sectors,
where there is more of a tendency to violate labour standards. But such a reorientation
has not been effected in the department.
However in situations where there is visible infringement of labour standards in specified

industries, there is a tradition of labour inspectors forming “inspection squads” for
focusing on specific industries in specific belts. Such an inspection system is particularly
feasible in traditional industries like Cashew where working conditions are still fairly
rudimentary. The Labour inspection squad system is also been actively used in the
enforcement of Inter-State Migrant Workmen (Regulation of Employment and Conditions
of Service) Act, which attempts to regulate the conditions of migrant workers, for ensuring
that there is proper surveillance of their living and working conditions.
The vertical barriers between the labour inspecting department have been broken down
in the case of inspections relating to the Cashew sector which have around 2.5 lakh
workers. For the Cashew industry, an enforcement monitoring review committee has
been set up comprising officials of the Labour Commissionerate, Inspector of Factories
and Boilers, Provident Fund Officers, Employees State Insurance Corporation officials,
Legal Meteorological Department officials and others. Squads of officers drawn from all
the departments go together to Cashew Factories and conduct inspections for ensuring
compliance with the variety of laws applicable. This horizontal-integrated model of labour
inspection could be applied mutis-mutandis to other productive sectors, especially in
the non-formal areas.
The labour inspection data in the concerned two departments are appended as Annexures
V and VI. Prosecution data pertaining to labour inspection system is appended as
Annexures VII and VIII.
4. Tripartite Supervision of Labour Standards
One of the unique features of Kerala is its fairly strong tradition of tripartite supervision
of labour standards particularly in certain traditional sectors like Plantation industry,
Cashew industry, Beedi industry and Coir industry. The role of Plantation Labour
Committees in providing decent working conditions to half a million Plantation labourers
in the hills of Kerala is part of the history of the State. This supervision process has
been largely amicable, and has led to a win-win situation for Government, the labourers
and the managements. The presence of these Committees has also helped to ensure
harmonious industrial relations in these sectors. However in recent years, the role of
these tripartite fora has been considerably weakened on account of crises being faced
by traditional industries like Plantation, Cashew, Beedi etc. in the face of global
competition. Such tripartite systems also need to spread over to other sunrise areas.
The present Tripartite Committees functioning are included in Annexure IX. At the highest
levels, the State has a Tripartite Industrial Relations Board (IRB) headed by Minister of
Labour and comprising the representatives of Managements and Trade Unions. Its role
is to suggest policy measures and to develop harmonious industrial relations and decent
work practices. However its deliberations are of a general nature to be of specific utility
in any particular sector.
5.Training of Labour Inspectors
It is a fact that there is no organised training system for Labour Inspectors. Earlier there
used to be a fairly rigorous process of induction training, even this is on the decline now.
There are periodic refresher courses conducted by the Kerala Institute of Labour and
Employment (KILE). There is an urgent need to put in a training system in place with
periodic updates of the labour inspector’s knowledge-base. Such a training system
should also aim to break down hierarchy barriers between the inspection personnel in
the concerned departments.
6. Labour Judiciary
Kerala has a dedicated labour judiciary comprising four Labour Courts and five
Industrial Tribunals for adjudicating disputes in terms of the Industrial Disputes Act 1947.
This forum does not handle prosecution cases pertaining to violations of labour
standards. Statutory violations of the labour protection provision are taken to the formal
criminal judicial Courts ranging from the First Class Judicial Magistrate to the District
Courts and the High Court. In view of the high degree of legal awareness among
workers and trade unions of the State, there is a lively degree of judicial activism in
cases of violation of statutory labour protection provisions. The Judges of the Labour
Courts are drawn from the regular judicial service and the presiding officers of the
Industrial Tribunals are selected from the Bar by the Government.
7. Quasi- Judicial Authorities
The Officers of the Labour Department are in one way or another exercising
quasi-judicial powers in their functions. Except two Deputy Labour Commissioners who
are solely appointed for Industrial Relations matters, all others are empowered with
quasi- judicial powers to function as the Workmens’ Compensation Commissioners,
Claim Authorities and Appellate Authorities under various enactments. The administrative
control of these officers is vested with the Labour Commissioner but their functions are
directly supervised by the High Court. However it is a fact that many of these officers
lack adequate legal background to function as quasi-judicial authorities. Hence they
need rigorous training in law and court procedures to exercise their powers effectively.
The details regarding the Labour judiciary is appended at Annexure X.

8. Structural Weakness of the Labour Inspection System.
The labour inspection system is divided between two departments and there is very
little horizontal integration at any levels. The main bulk of the labour machinery vests
with the Labour Commissionerate. The backbone; of the labour inspection system is
the Assistant Labour Officer, of which there are a hundred in the State. They come from
two streams, one directly from the Universities, with postgraduate Master of Social
Work (MSW) degree specialising in Personnel Management and the others on promotion
from the clerical cadre of the Department. Often the promoted officers lack the special
skills that are required to supervise/manage the labour inspection system. On account
of lesser promotional opportunities, there is also stagnation in this cadre leading to low
levels of motivation. The incentive/disincentive system for conducting proper inspections
is also very weak and there is a tendency to “dress up figures” by conducting rudimentary
inspections. The labour inspection system is also postulated on an adverse relationship
between the employer and the employee, which affects the efficacy of the enforcement
process. The labour inspection reporting system is also largely moribund, with resort to
forms and reporting schedules that have become cumbersome and outmoded.
Meanwhile the fiscal difficulties of the State Government have resulted in inadequacy of
budgetary provisions for ensuring labour standards enforcement, in terms of inadequacy
of travelling allowances, lack of stamps for issuing notices and so on. The benefits of IT
have not yet been utilised to modernise the labour inspection management system,
even though computerisation of these departments started a few years back. However
it is expected that an IT enabled labour inspection management system will be in place
in these departments in the next two years.
The labour inspection machinery is not equal to the task of inspecting all the concerned
establishments in Kerala, in view of the enormous numbers. There are 18,000 registered
Factories and 2.6 lakhs of shops and commercial establishment in the State. For ensuring
complete coverage, each Assistant Labour Officer has to inspect around 29,000
establishments in a year, which is not practically possible. In this era of right sizing
Government functions, it is also not immediately feasible to augment this corpus of
labour inspectors substantially. Consequently, new inspection paradigms have to be
put in place including electronic monitoring of the labour standards system, tripartite
supervision machinery, and inducements for voluntary compliance with labour
standards.
III. MINIMUM WAGES ENFORCEMENT
Kerala has a strong tradition of minimum wage enforcement with around 114
employments being notified under the Minimum Wages Act. The list of notified
employments Scheduled under the Minimum Wages Act is enclosed as Annexure-XI.
The minimum wages in various sectors in Kerala are considerably higher than those
prevailing in the rest of the country. This disparity, especially in relating to neighbouring
States, has been the cause of heartburn among employers. The State Government has
also been deeply concerned because lower minimum wages elsewhere tends to hamper
investment-led-growth. The State Government has been clamoring for some time now
for a regional minimum wages mechanism, which would harmonise minimum wages
across the State.
Despite the universal levels of literacy, the high levels of awareness and the strong
tradition of trade unions, it is a fact that minimum wage payment compliance, especially
in the traditional sector; is on the decline. Often workers are reluctant to press legal
action even in the case of proven violations in minimum wages payment, for fear of
losing their jobs.
A large number of new sectors are awaiting minimum wages notification. The challenge
is to ensure the creation of a climate with incentives for voluntary payment of minimum
wages without resorting to the coercive machinery of the State for effecting payment.
IV. NEXT STEPS
The revamping of the labour inspection system should cover the following aspects.
1. Modernising, simplifying and rationalising enabling legislations and rules.
2. Modernising and IT-enabling labour inspection procedures and monitoring
systems.
3. Professional training and motivation of the labour inspection crops.
4. Integrating the methodology, functioning and objectives of various departments
involved in labour standards maintenance.
5. Providing adequate resources for effectively running the labour inspection
machinery including vehicles, travel allowances and office expenses.
6. Shifting from a “numerical approach” of enforcement supervision towards a
“sectoral focus approach” towards errant sectors and employers.
7. Shifting to a “presumptive compliance system” wherever it can be enforced
without diluting labour standards.
8. Reviving the tripartite supervision system and extending its scope to cover
sunrise industries.
9. Building positive incentives for employers to conform to labour standards.
10. Shifting from an “adversarial system of labour standards” maintenance to a
“collaborative system” where trade unions managements and Government work
together in pursuit of common goals.
11. Building a climate of opinion with strong incentives for labour standards
compliance.
12. Reorienting labour standards policy and legislations to take into account the
changing nature of work, the production process and the pressures of international
competition.
13. Making the working of labour inspection system more transparent and accessible
to employee and employer scrutiny.
14. Improving the working of the labour judiciary for ensuring quick decisions in
case of labour standard violations
Kerala had a strong tradition of employees standing up for their rights. However on
account of the pressure of competition especially from other Indian States, the
enforcement of labour standards does not have the importance that was once accorded
to it. The challenges before all three social partners is to ensure that labour standards
are not diluted and that the labour standards machinery is modernised to cope with the
changing nature of the production process, without affecting the competitivity of the
State in the international market place.
It has become evident that the labour inspection machinery cannot continue with the
traditional inspection paradigm alone. The labour enforcement administration has to
ensure the creation of incentives and disincentives for ensuring labour compliance by
all the groups of stakeholders relating to workers security. There should be positive
incentives for the employers to comply with the desired labour standards as well as
strong disincentives for errant employers.
The traditional role of the labour inspector has to change, he has to be a facilitator for
encouraging compliance with labour standards. The task before the Government is to
create an environment where the incentives for labour standards compliance are much
more than those for non-compliance.
ANNEXURE I
Acts And Rules Implemented by The

Factories and Boilers Department
Central Enactments
1. The Factories Act, 1948
2. The Indian Boilers act,1923
3. The Payment of Wages Act, 1936
4. The Maternity Benefit act, 1961
5. The Dangerous Machines(Regulation) Act,1983
6. The Environment(Protection) Act, 1989
7. The Labour Laws (Exemption from furnishing Returns and Maintaining
Registers by certain Establishments) Act, 1988
Central Rules
1. The Manufacture, storage and Importof Hazardous Chemicals Rules, 1989
2. The Chemical Accidents(Emergency Planning, Preparedness and
Response)Rules, 1996
Central Regulation
1. The Indian Boiler Regulation, 1950
State Rules
1. The Kerala Factories Rules,1957
2. The Kerala Boiler Rules,1967
3. The Boiler attendants Rules, 1957
4. The Kerala Boiler Operation Engineers rules,1957
5. The Kerala Economiser Rules,1957
6. The Payment of Wages Rules,1958
7. Th Maternity Benefit Rules, 1964
8. The Dangerous Machines (Regulation) Rulwes, 2001
ANNEXURE II
Central Enactments and Rules Administered

by Labour Commissionerate
Central Enactments
1. The Workmens’ Compensation Act, 1923
2. The Trade Unions Act ,1926
3. The Payment of Wages Act,1936
4. The Industrial Employment (Standing Orders ) Act, 1946
5. The Industrial Disputes Act, 1947
6. The Minimum Wages Act, 1948
7. The Plantations Labour Act, 1951
8. The Working Journalists and Newspaper Employees (Regulation of
Employment and Conditions of Service ) Act, 1955
9. The Working Journalists (Fixation of Rates of Wages) Act, 1958
10. The Maternity Benefit Act, 1961
11. The Motor Transport Workers Act,1961
12. The Payment of Bonus Act, 1965
13. The Beedi and Cigar Workers(Regulation of Employment and Conditions of
service Act, 1966
14. The Contract Labour ( Regulation and Abolition) Act, 1970
15. The Payment of Gratuity Act, 1972
16. The Equal Remuneration Act, 1976
17. The Sales Promotion Employees (Conditions of Service) Act, 1976
18. The Interstate Migrant Workmen (Regulation of Employment and Conditions of
Service ) Act,1979
19. The Child Labour (Prohibition and Regulation ) Act,1986
20. The Labour Laws (Exemption from maintaining Registers and Records and
Furnishing of Returns by certain Establishments) Act, 1988
21. The Building and Other Construction Workers(Regulation of Employment and
Conditions of Service) Act,1996
22. The Building and Other Construction Workers Welfare Cess Act, 1996
Central Rules
1. The Industrial (Procedure) Rules, 1949
2. The Industrial Tribunal (Central Procedure)Rules, 1954
3. The Payment of Bonus Rules, 1975
4. The Equal Remuneration Rules, 1976
5. The Sales Promotion Employees(Conditions of Service )Rules, 1976
6. The Working Journalists (Conditions of Service) and Miscellaneous Provisions
Rules, 1957
7. Working Journalists and Other Newspaper Employees Tribunal Rules, 1979
State Rules / Regulations of the Central Enactments

1. Kerala Workmen’s Compensation Rules, 1958
2. Kerala Workmen’s’ Compensation (Occupational Diseases) Rules, 1962
3. Workmen’s Compensation (Transfer of Money) Rules, 1935
4. Workmen’s Compensation (Venue of Proceedings) Rules, 1996
5. Kerala Trade Unions Regulations, 1958
6. Kerala Payment of Wages(General) Rules, 1958
7. Kerala Payment of Wages(Procedure) Rules, 1958
8. Payment of Wages(Undisbursed Wages) Rules, 1998
9. Kerala Payment of Wages(Procedure) Applications to Schedule Employment
Rules, 1964
10. Kerala Payment of Wages (Unclaimed Amounts) Rules, 1958
11. Kerala Payment of Wages (Manner of recovery of Excess Deductions) Rules,
1968
12. Kerala Payment of Wages(Deductions for National Defence Fund and Defence
Savings Schemes) Rules
13. Kerala Industrial Employment (Standing Orders) Rules, 1958
14. Kerala Industrial Disputes Rules, !957
15. Kerala Minimum Wages Rules, 1958
16. Kerala Plantations Labour Rules, 1959
17. Kerala Plantation (Welfare Officers) Rules, 1978
18. Kerala Maternity Benefit Rules, 1964
19. Kerala Motor Transport Workers ‘ Rules, 1962

20. Kerala Beedi and Cigar Workers (Conditions of Employment ) Rules, 1968
21. Kerala Contract Labour (Regulation and Abolition) Rules, 1974
22. Kerala Payment of Gratuity Rules, 1973
23. Kerala Interstate Migrant Workmen (Regulation of Employment and Conditions
of Service) Rules, 1983
24. Kerala Child Labour(Prohibition and Regulation) Rules, 1993
25. The Building and Other Construction Workers(Regulation of Employment and
Conditions of Service)Rules,199
26. The Building and Other Construction Workers Welfare Cess Rules, 1998
ANNEXURE III
State Enactments and Rules Enforced by

The Labour Commissionerate
State Enactments
1. The Kerala Industrial Establishments (National and Festival Holidays) Act, 1958
2. The Kerala Shops and Commercial Establishments Act, 1960
3. The Industrial Establishments Payment of Gratuity Act, 1970
4. The Kerala Motor Transport Workers Payment of Fair Wages Act, 1971
5. The Kerala Agricultural Workers Act, 1974
6. The Kerala Payment of Subsistence Allowance Act, 1972
7. The Kerala Headload Workers Act,1978
8. The Kerala Casual, Temporary, Badli Workers (Wages ) Act, 1989
9. The Kerala Loading and Unloading (Regulation of Wages and Restriction of
Unlawful Practices) Act, 2002
State Rules
1. Kerala Industrial Establishments (National and Festival Holidays) Rules,1959
2. Kerala Shops and Commercial Establishments Rules, 1961
3. The Industrial Establishments Payment of Gratuity Rules, 1970
4. The Kerala Agricultural Workers Rules,
5. The Kerala Payment of Subsistence Allowance Act, 1974
6. The Kerala Headload Workers Rules,1981
7. The Kerala Casual, Temporary, Badli Workers (Wages ) Rules, 1990
8. The Kerala Loading and Unloading (Regulation of Wages and Restriction of
Unlawful Practices) Rules, 2002
ANNEXURE IV
ILO Conventions and Recommendations

on Labour Inspection
Sl. No No. of Name of Conventions

Convention
1. 81 Labour Inspection Convention, 1947
2. 85 Labour Inspectorates (Non-Metropolitan Territories)

Convention, 1947
3. 129 Labour Inspection (Agriculture) Convention, 1969
4 144 Tripartite Consultation (International Labour Standards)

Convention, 1976
5 150 Labour Administration Convention, 1978
6. 172 Working conditions (Hotels and Restaurants)

Convention, 1991
I L O Recommendations
1. Labour Inspection(Health Services) Recommendation, 1920
2. Maternity Protection (Agriculture) Recommendation,1921
3. Labour inspection Recommendation,1923
4. Vocational Training Recommendation,1939
5. Labour Inspectorates (Indigenous workers) Recommendation, 1939
6. Labour inspection Recommendation,1947
7. Labour inspection (Mining and Transport0 Recommendation, 1947
8. Labour inspection (Agriculture) Recommendation,1969
9. Tripartite Consultation (Activities of the International Labour Organisation)
Recommendation, 1976
ANNEXURE V
Labour Commissionnerate
A. Details of Inspection Under Various Enactments
(Source: Administration Report, Labour Department)
No of Inspections
1991-2001
Sl.
97 – 98
99 – 00
TOTAL
Name of the Acts
91 - 92
92 - 93
94 - 95
95 - 96
00 - 01
90 -91
No.
13507
7434
1166
1056
1006
1203
984
108
550
1 Payment of Wages Act
2,26,672
35317
31212
31964
24829
33889
28716
19899
20846
2 Minimum Wages Act
1471
1471
3 Plantations Labour Act
-
2953
849
174
114
298
231
337
858
92
4 Maternity Benefit Act

10577
45272
7138
9732
4686
4861
3721
1691
2866
5 Motor Transport Workers Act

1091
100
248
156
129
170
129
62
97
6 Contract Labour(R&A)Act
2103
342
598
559
153
217
140
72
22
7 Equal Remuneration Act
Interstate Migrant Workmen
301
11
02
94
22
8
-
Act
2161
207
801
665
416
51
16
05
9 Child Labour (P&R)Act
-
Labour Laws (Exemption
03
96
99
10 from maintaining Registers
-
-
and Records)Act
Kerala Industrial
1096
1162
1396
7504
1061
630
946
912
301
11 Establishments (National
and Festival Holidays) Act
395873
Kerala Shops and
37191
54844
61746
53445
68404
53923
28804
37516
12 Commercial Establishments
Act
3009
4025
Kerala Agricultural Workers 7504

321
59
37
35
09
09
13
Act
3732
323
727
504
208
694
694
279
303
14 Headload Workers Act
Kerala Casual, Temporary,

136
200
07
17
40
15
-
Badli Workers(Wages) Act

1813
Beedi and Cigar Workers
950
208
170
165
216
50
42
12
16
Act
1149
Motor Transport Workers
348
437
237
34
93
17
-
Payment of Fair Wages Act
Sales Promotion
Employees(Regulation of
02
06
01
09
18
-
-
Employees and Conditions
of Service)ACT,
The Working Journalists and
Newspaper
01
01
19 Employees(Regulation of
-
-
Employment and Conditions
of Service ) Act
104809
107445
111114
713243
53474
92642
85806
91076
66877
TOTAL
B. Details of Disputes Settled by The Labour Commissionerate
Disputes Settled by
Year Dispute
Voluntary
arose Conciliat- With- Adjudi-
Negotiat- Total
ion drawn cation
ion
1991 7849 3131 1579 2706 582 7998
1992 7448 2682 1563 2055 576 6876
1993 6873 2098 2118 2023 672 6911
1994 6199 2083 1753 2255 526 6617
1995 5827 3006 1778 2477 513 7774
1996 5249 1442 1836 2037 467 5782
1997 5729 1135 1749 1772 346 5002
1998 5186 1369 1537 1483 363 4752
1999 5144 1386 1636 2777 701 6500
2000 4307 914 1343 2220 529 5006
2001 3692 610 1001 1643 462 3716

2002
upto 2521 444 717 589 213 1963
8/2002
Source: Labour Commissionerate

ANNEXURE VI
Directorate of Factories and Boilers

Details of Registered Factories and Inspections
(1990 – 2002)
No. of Registered Factories No. of No. of

Year factories factories left
Under Under Total
inspected uninspected
Sn.2(m) Sn. 85
1990 3507 9315 12822 9024 3808
1991 3662 9807 13469 9868 3601
1992 3883 10116 13999 9974 4025
1993 4053 10328 14381 10231 4150
1994 4241 10588 14829 10427 4402
1995 4375 10899 15274 10497 4777
1996 4805 11223 16028 11012 5016
1997 5003 11721 16724 12078 4646
1998 5192 11932 17124 12356 4768
1999 5347 12325 17672 13319 4353
2000 5433 12509 17942 13247 4695
2001 5488 12610 18098 13576 4522
2002 5548 12470 18018 12681 5337
Total 1,48,290 58,100
Source: Factories Department
REASONS FOR SHORTFALL
In most of the Divisions the number of factories are very high compared to the
accepted norms. Inspectors are not provided with vehicles. Besides routine
inspections, they are to attend Court duty/ Accident investigation / various Committee
Meetings / Seminars arranged by the District Collector / Single Window Clearance
Board/ Departments etc.
ANNEXURE VII
Labour Commissionnerate
Details of Prosecutions Under Various
Enactments
Year No of Prosecutions No of Convictions
1990 – 91 1979 1209
1991 – 92 2814 2029
1992 – 93 3191 1887
1994 – 95 1199 1293
1995 – 96 1599 1456
1997 – 98 2056 1301
1999 – 00 1814 1359
2000 – 01 1909 1595
TOTAL 16,561 12,129
Source: Administration Report, Labour Commissionerate

ANNEXURE VIII
Factories and Boilers Department

Number of Prosecutions and Convictions
(1990 –2002)
Year No. of prosecutions No. of prosecutions

filed convicted
1990 79 57
1991 93 61
1992 58 71
1993 70 42
1994 71 46
1995 44 33
1996 39 37
1997 32 12
1998 85 51
1999 83 48
2000 77 40
2001 83 51
2002 33 4
Total 847 553
Source: Directorate of Factories and Boilers

ANNEXURE IX
Tripartite Industrial Relations

Commiittees in The Labour Department
(2000-2001)
1. Industrial Relations Committee for Plantation Industry
2. (Plantation Labour Committee)
3. Industrial Relations Committee Coir Industry
4. Industrial Relations Committee for Toddy Tapping Industry
5. Industrial Relations Committee for Textile Industry
6. Industrial Relations Committee for Cashew Industry
7. Industrial Relations Committee for Beedi and Cigar Industry
8. Industrial Relations Committee for Tile Industry
9. Industrial Relations Committee for Construction Industry
10. Industrial Relations Committee for Motor Transport Industry
11. Industrial Relations Committee for Liquor Trading Industry
12. Industrial Relations Committee for Kuttanad Agricultural area
13. Industrial Relations Committee for Timber, Plywood, Matches Industry
14. Tripartite Industry for Cardamom Industry
Source: Administration Report, Labour Department

ANNEXURE X
A. Judicial and Quasi- Judicial Authorities

In The Labour Department
1. Judicial Authorities
Labour Courts – 4
Industrial Tribunals – 5
2. Quasi-Judicial authorities
Deputy Labour Commissioners – 7
(acting as Workmens’ Compensations
Commissioners, Claim Authorities,
and Appellate Authorities)
B. Details of The Cases Handled by The

Quasi-Judicial Authorities of The Labour Department
for The Year 2002
Sl. Name of the Acts No. of No. of Total No. No. of No. of
No cases cases of cases cases cases
pending filed in the dispos- pending
at the during roll ed at the
beginni- the during end of
ng of Year the the Year
the Year Year
1 Compensation cases 3265 1590 4855 1146 3709
under the Workmens’
Compensation Act,1923
2 Claims under the 329 78 407 89 318
Minimum Wages Act,
1948
3 Appeals under the Kerala 128 44 172 40 132
Shops and Commercial
Establishments Act, 1960
4 Claims under the Kerala 138 59 197 92 105
Subsistence Allowance
Act, 1972
5 Appeals under the Kerala 21 Nil 21 2 19

Handloom Workers
Welfare Fund Act
6 Certification of Standing 32 16 48 11 37
Orders under the
Industrial Employments
(Standing Orders) Act,
1946
7 Claims under the 2 Nil 2 Nil 2
Maternity Benefit Act,
1961
8 Claims under the 8 2 10 3 7
Payment of Wages Act,
1936
9 Claims under the 14 5 19 3 16
Payment of Bonus Act,
1965
10 Claims under the Kerala 142 Nil 142 85 57
Casual, Temporary, Badli
Workers(Wages) Act,
1989
Total 4079 1794 5873 1471 4402 4402
Source: Labour Commissionerate

ANNEXURE XI
List of Schedule Employments

Under The Minimum Wages Act
Part I
1. Employment in any Woolen Carpet making or Shawl weaving

Establishment
2. Employment in any Rice mill, Flour mill or Dhall mill
3. Employment in any Tobacco(including beedi making) Manufactory
4. Employment in any Plantation, that is to say any estate which is maintained
for the purpose of growing cinchona, rubber, tea, coffee or cardamom)
5. Employment in any Oil Mill.
6. Employment under any local Authority
7. Employment on the construction or maintenance of roads or in building
operations
8. Employment in stone breaking or stone crushing
9. Employment in any ice manufactory
10. Employment in any Mica works
11. Employment in public Motor Transport
12. Employment in tanneries and leather manufactory
13. Employment in Gypsum mines
14. Employment in Marble and Calcite mines
15. Employment in barytes mines
16. Employment in bauxite mines
17. Employment in manganese mines
18. Employment in the maintenance of buildings and employment in the
construction and maintenance of runways
19. Employment in China clay mines
20. Employment in Kynite mines
21. Employment in magnasite mines
22. Employment in copper mines
23. Employment in clay mines covered under the Mines Act, 1952(35 of 1952)
24. Employment in magnasite mines covered under the Mines Act, 1952(35 of
1952)
25. Employment in clay mines
26. Employment in stone mines
27. Employment in Stealite mines(including the mines producing soap stones
and Talc)covered under the Mines Act, 1952 (35 of 1952)
28. Employment in ochre mines
29. Employment in asbestos mines
30. Employment in fireclay mines

31. Employment in chromite mines
32. Employment in Quatizite mines
33. Employment in Quartz mines
34. Employment in silica mines
35. Employment in graphite mines
36. Employment in felspar mines
37. Employment in laterite mines
38. Employment in dolomite mines
39. Employment in red oxide mines
40. Employment in wolfram mines
41. Employment in iron ore mines
42. Employment in granite mines
43. Employment in hermatite mines
44. Employment in loading and unloading in Railways, goods sheds, docks and
ports
45. Employment in ashpit cleaning on Railways
46. Employment in Rock Phosphate mines
47. Employment in uranium mines
48. Employment in Mica mines
49. Employment in Lignite mines
50. Employment in Gravel mines
51. Employment in slate mines
52. Employment in Laying of underground cables
Employments subsequently added to the Schedule by the State Government
53. Employment in the manufacture of Coir

54. Employment in cashew industry
55. Employment in Salt Pans
56. Employment in Water Boat Transport other than boat transport
57. Employment in printing presses
58. Employment in the Tile manufacturing industry
59. Employment in Toddy tapping industry
60. Employment in match industry
61. Employment in Shops and Establishments(including Hotels and
Restaurants)
62. Employment in Timber industry
63. Employment in Bricks manufactories
64. Employment in Banks
65. Employment in Handloom industry
66. Employment in Plywood industry
67. Employment in minor ports
68. Employment for works in forests

69. Employment in Rubber Products
70. Employment in Minor Engineering industry
71. Employment in the construction or maintenance of Dams
72. Employment in fish peeling, Fish canning, Freezing and exporting of Sea
foods and frog legs
73. Employment in the hill produce industry
74. Employment in the manufacture of Ayurvedic and Allopathic Medicines
75. Employment in the powerloom industry(excluding the workers employed in
the powerloom section of the Cotton Textile Mills)
76. Employment in drying of coconuts for making them copra
77. Employment in handling and care of Elephants
78. Employment in hosiery manufactory
79. Employment in ice factories
80. Employment in the units engaged in the manufacture and sale of umbrellas
81. Employment in hostels
82. Employment in rubber crepe mills
83. Employment in Liquor trading and liquor vending industry
84. Employment in the cinema theaters
85. Employment in crumb rubber factories
86. Employment in collection of rive sand and its loading and unloading
87. Employment in manufacture of Aluminium and Tin products
88. Employment in light motor vehicles
89. Employment in Oil Palm Plantations
90. Employment in marble and granite industry
91. Employment in food processing industry- Toffee, Bakery coming under the
Factories Act, Ice cream, soft drink etc.
92. Employment in electric equipments, home appliances and operations of
Software system
93. Employment in soap manufacturing
94. Employment in computer software
95. Employment in plastic industry
96. Employment in wirecut bricks
97. Employment in screen printing
98. Employment in handicrafts
99. Employment in Film production industry
100. Employment in garment making industry
101. Employment in diamond cutting and polishing industry
102. Employment in khadi industry
103. Employment in cane and Bamboo industry
104. Employment in private educational institutions(non-teaching)
105. Employment insecurity services
106. Employment in mechanised fish catching industry
107. Employment in production of motion pictures and telefilms

108. Employment in private hospitals, dispensaries, pharmacies, clinical labs,
scanning centres, X-ray units and other allied institutions
109. Employment in Liquefied Petroleum Gas Agencies(cooking gas)
110. Employment in electronic industry including export processing zone
111. Employment in sale promotion of pharmaceutical products
112. Employment in petrol pumps
Part II
I. Employment in agriculture, that is to say, in any form, of framing including

cultivation and tillage of the soil, dairy farming, the production, cultivation,
growing and harvesting of any agricultural or horticultural commodity, the
raising of live-stock, bees or poultry, and any practice performed by a
farmer or on a farm as incidental to or in conjunction with- farm operations
(including any forestry or timbering operations and the preparation for
market and delivery to storage or to market or to carriage for transportation
to market of farm produce)
II. Cashew Plantations
11
Training Manual
for Conciliators
A. Sivananthiran
CONCILIATION
Introduction to conciliation
Conciliation may be described as the practice by which the services of a neutral third
party are used in a dispute as a means of helping the disputing parties to reduce the
extent of their differences and to arrive at an amicable settlement or agreed solution. It
is a process of rational and orderly discussion of differences between the parties to a
dispute under the guidance of the conciliators.
As a process of peace-making in industrial relations, conciliation aims to bring about

the speedy settlement of disputes without resort to strikes or lockouts, and to hasten
the termination of work stoppages when these have occurred. The steps that a
conciliator may take to bring about an amicable settlement vary from one country to
another, but always his function is to assist the parties towards a mutually acceptable
compromise or solution. For this the only powers on which he can really rely are his
powers of reasoning and persuasion.
A unique and essential characteristic of the conciliation process is its flexibility, which
sets it apart from other methods of setting industrial disputes. A conciliator cannot
follow the same procedure in every case; he must adjust his approaches, strategy and
techniques to the circumstances of each dispute. Probably for this reason it has some-
times been said that conciliation is an art; the “conciliator is a solitary artist recognizing
at most a few guiding starts and depending mainly on his personal power of divination”.
Conciliation and collective bargaining
The voluntary settlement which is the aim of conciliation is nothing more nor less than
the parties’ reaching agreement, which is as much a collective bargaining agreement
as one resulting from unaided, direct negotiations between the parties. Viewed from
another angle, collective bargaining is a process of joint decision making. Essentially
the same process is involved in conciliation, and although the conciliator participates in
it, the joint decision which is aimed at is one made by the parties themselves. The view
of collective bargaining is as a process of joint decision making makes it easier to
understand the dynamics and complexity of conciliation, especially the many facets of
the face-to-face relationships between the parties’ negotiators as well as within each
party’s negotiating committee.
WHO IS A CONCILIATOR?
Conciliator can be sought through private arrangements, in which case the disputing
parties agree on a person they both trust as a conciliator because of his/her high personal
qualifications and qualities. However, in most countries, conciliation will be provided by
the government through an administrative unit that may have other tasks, such as the
promotion of workplace cooperation.
Conciliation is essentially a one-person job. Individual conciliators can be designated as

conciliators (a) on a full-time basis with conciliation as their only function; (b) on a
part-time basis with conciliation as one of their day-to-day function — in practice, this is
mostly the case for labour offices; or (c) on an ad hoc basis, whenever needed.
Conciliation can also take place through conciliation boards. These boards are often
composed on a tripartite basis and can be established either as a permanent body — in
which case employers’ and workers’ members of the panel are usually nominated or
selected by their respective organization — or on an ad hoc basis, where employers’
and workers’ members of the board has been set up. These two methods may be
combined into a system nominated by employers’ and workers’ organizations, from
which the parties to a dispute select the individuals to be members of the board dealing
with that dispute.
THE CONCILIATOR’S QUALIFICATION
The conciliator’s qualification
Independence and Impartiality
Independence and impartiality are the two attributes which every conciliator should
possess, regardless of other qualifications. It is essential that he should not only
possess these qualities but be also clearly seen to possess them. To appear independent
and impartial is no less important than actually to be so; in this regard a conciliator must
be above suspicion. Through his handling of various cases a conciliator should be able
to establish a reputation for himself and make both sides in industry accept him as a
Training Manual for Conciliators 189
creditable conciliator. Even a single incident in which his impartiality becomes suspect
will adversely affect his reputation.
Commitment
A personal factor calling for particular emphasis is therefore the fundamental need for a
conciliator to have a positive attitude towards his work. He must have strong and deeply
held conviction of the importance and usefulness of conciliation, and he must like or
learn to like the work. As a public official a conciliator can easily allow himself to sink into
the routine and the leisurely pace usually associated with government bureaucracy, but
conciliation, if it is to be performed effectively, can never be a matter of bureaucratic
routine.
Positive attitude
Conciliation in certain means arduous work. A conciliator should be physically and

psychologically fit for the rigours of his task. He has to do a certain amount of desk
work, but his cases will require him to work outside the confines of an office. He does
not have the same working days as most government servants and conciliation can
last for hours on end. For this reason, among others, a personal factor calling for a
particular emphasis is therefore the fundamental need for a conciliator to have a
positive attitude.
Conditions of employment
Unfortunately conditions of employment of government conciliators in certain countries

may be discouraging for them. Many may feel frustrated due to lack of promotional
positions and may opt to go to the private sector. Material inducement is also important.
The challenge in conciliation work
Every dispute in which a conciliator intervenes is an opportunity to make a clearly

invaluable contribution. Each dispute is unique.
Specialist in human relations
The Conciliator to a certain extent has to be a specialist in human relations. He must be

honest, polite, self-confident, even-tempered and patient in trying to accomplish his
results.
A friendly personality
In the informal atmosphere of conciliation, a friendly personality is a distinct asset.

PROFESSIONAL QUALIFICATION
A conciliator must possess a certain professional qualification in view of the nature of

work. A conciliator should have some knowledge of the following:
a. Knowledge of industry and industrial relations system, practical side of
industrial relations, development and structure of trade union and employers
association, prevailing methods of collective bargaining, main causes of
disputes.
b. Knowledge of dispute settlement at plant level.
c. Knowledge of products and services production lines, process lines.
d. Knowledge of occupations and employment practices
e. Questions of contract labourers, casual, temporary working conditions transfer
etc. manning levels, work load.
f. Knowledge of wage increases, productivity increases and technological
change.
Training on conciliation
A conciliation outfit should have a programme for further training of its staff.
Drawing from conciliators own experience
A good conciliator will constantly draw from his personal experience. Case experience
is invaluable. He should constantly refine his techniques. Conciliators can learn from
experience of other conciliators.
Judgements
A fundamental aspect of a conciliator is his ability to form judgements. When

conciliating, he has to take a decision on many questions. A conciliator will improve his
ability to make judgements by fuller understand of these problems.
THE CONCILIATORS PREPARATIONS
Pre-dispute readiness
The purpose of a conciliator’s general preparation is to enable him to be ready at

anytime to intervene in a dispute. Such pre-dispute readiness essentially a mater of
having readily information at hand. These materials have to be systematically arranged
to facilitate immediate use.
Desirability of information services
the conciliation service should be efficiently organized and provided with a specialized
staff who can at short notice collect desired information. A regional office will be at a
disadvantage compared to the headquarters in this respect. A Central information
service at HQ is essential.
BACKGROUND INFORMATION REQUIRED
Conciliator’s Preparation
A conciliator will need to make two kinds of preparations – general preparation and the
specific preparation for a dispute he/she is to intervene:
General
z Need for back up information services that can at quick notice collect, assemble
and analyze information needed.
z Information on employer/trade union
z Information on collective agreement awards, wage orders.
z Current development and trends
z Wage/salary information
Specific
z Background of dispute
z On issues pertaining to dispute
z On personalities-key personalities in the dispute
KEY INFORMATION REQUIRED
Information on employers
Ownership, type of business products, membership to employers association, number

of workers.
Trade unions
The number of trade unions, number of members, principal officers, wages,

information on the security of employment, wages, hours of work, overtime rates
etc.
Agreements, awards, wage order
Copies of collective agreement, arbitration awards, statutory minimum wages,

information on the security of employment, wages, hours of work, overtime rates etc.
Information on past negotiation and disputes between particular parties
In dealing with dispute a conciliator needs to have background information. This can
only be achieved if a file is opened and kept alive by adding materials concerning
subsequent development.
Current development and trends
Need to keep abreast with developments which will likely to affect collective bargaining.
z information from labour inspection
z publications of trade union employers
z publication of professional societies, industrial relation, research organizations
z university research
z ILO publications
z wage/salary surveys
z legislature enactments
z proceedings of conference/seminars
SPECIFIC CASE PREPARATION
The effectiveness of a conciliator in handling of a case depends on case preparation.
Specific case preparation
Case preparation involves all possible information to cope with proceedings. In includes:
- available information in office files
- background and facts of the dispute
- on issues relevant provision of collective agreement
- wage information – productivity/unit labour cost
- past dismissals/retrenchments
On personalities
To have an idea with person he will be dealing with.

THE CONCILIATOR’S ENTRY INTO A DISPUTE
The active intervention of a conciliator in a dispute takes the forms of holding

conciliation meetings for substantive discussion of the issues. there are some
preliminary steps to be completed before a conciliator begins. e.g.:
a. a decision has to be taken to submit the dispute for conciliation
b. a conciliator has to be assigned to the case
c. he must make his preparations for it.
Timing
a. In some countries conciliation is prescribed by law and the timing of intervention
is not a problem.
b. A conciliator will have no alternative but to intervene if the dispute is one that can
affect vital public service.
c. In some countries there is grievance procedure in collective agreements — if
such procedure exist it should be followed.
d. Any attempt to by-pass this should be resisted and a conciliator should resist
any attempt to intervene prematurely.
e. Even in cases where there is no agreed procedure for settlement, parties should
be encouraged to settle by themselves.
Assignment of cases
The practice in many countries is to assign conciliators to particular sectors or groups

of industries so that they acquire knowledge of condition in the industries assigned to
them.
Preliminary contacts with the parties
Once the case is assigned the conciliator will usually need to make preliminary
contacts with parties separately. The purpose of this is threefold:
a. to give them information
b. to obtain information
c. to establish his/her relationship on a positive note.
Careful preparations have to be made for these contacts.

Giving information
The conciliator informs the parties of his entry and that his services are available. He
should emphasize his impartial role.
The information he will give depends on the experience of parties.
Obtaining Information
Though his initial contacts the conciliator can acquire from each of the parties as much
further information a possible about:
a. background
b. facts of the dispute
c. attempts by parties to settle the dispute
d. understanding of the issues
e. attitude of the parties with regard to issues
f. identify critical issues and throwaway items.
In trying to induce parties to provide information, the conciliator should not be
aggressive and demanding.
Establishing working relations
The conciliators relationship with parties is essentially a matter of trust and confidence.
The initial contacts provide him an opportunity to start this relationship. His aim is to give
a good impression of his professional competence and his integrity and impartiality.
Appearance
Adjust personal appearance to project good image – question of grooming and

dressing.
Approach
Never assume the role of investigator or inspector

No coercion.
Show sympathetic concern and show interest in hearing their version.
Demonstrate that the conciliator understands the issues
Show that he is knowledgeable
Leave positive impression.
TYPES OF MEETINGS AND ARRANGEMENTS
Types of meetings
In pursuing his objectives for settlement of a dispute the conciliator perform a number of
procedural functions relating to the scheduling, arranging and conduct of meetings with
the parties.
In this part we consider

a) The type of meetings
b) Arrangements and preparations for meetings
Types of meeting: There are two types of meeting which a conciliator may hold:
- joint conferences attended by both parties
- separate meeting
Join conferences
Here the conciliator is the chairman and the parties’ representatives sit on opposite
sides. A joint conference is attended by full membership of two negotiating
committees.
the joint conference is a formal meeting and each side usually communicates to other
side through a single spokesperson. In joint conferences the parties are usually
defensive and there might be even arguments. It provides the opportunity for the
conciliator to observe the parties and power of observation can give important clues
about the attitude of parties. the pace of discussions tends sometimes to be slow.
Separate meeting
A separate meeting can arise in two ways:
e.g. in connection with the joint conference. Here the conciliator take the initiative to hold
this meeting when he finds it useful to hold this meeting separately.
Sometimes the two parties may refuse to come together at a joint meeting but are
willing to be present in separate rooms. Here the role of the conciliator is not as
chairman but he has a personal dialogue. The atmosphere is less hostile and less
tense.
At separate meeting the conciliator has the advantage of analyzing the sides position
and interpreting it. He can express views, offer suggestions and advice which he could
not do at the joint meeting. He can get information given to him in confidence.
What is important is relationship between conciliator and the party is confidential. This
trust should not be misplaced. He must earn parties’ trust in him by his personal
showing. He must also act without siding with any party.
Private meeting
This meeting is attended by minimum number of parties’ representatives e.g. one from
each party. It can be in separate meeting rooms or as joint conference. This may
happen when parties are not changing their stand at joint/separate meetings and adopt
hardline positions.
At these meetings there is a need for conciliator to speak candidly to the leading
spokesmen on two sides and look out for the hint that a change in thinking is
possible.
ARRANGEMENTS AND PREPARATIONS
Meeting place
Joint conferences are usually held in neutral ground e.g. office of conciliator.
If parties agree amongst themselves it can be held in a hotel, trade union premises or
employer’s premises.
Separate meetings are best held at conciliator’s officer.
Accommodation
The joint conference room should be large enough to accommodate parties. There
should be minimum of three rooms — one for joint conference and other two for parties.
Invitation
The normal way is for parties to be invited by phone or letter.
In some countries conciliator will compel parties to attend this meeting. Parties
attending the meeting should have full authority from employers and workers concerned
to reach settlement.
Production of Documents
In some countries the law empowers the conciliators to compel parties to produce
documents. However, the conciliator should try to secure voluntary production of such
documents and avoid resorting to compulsion.
THE CONDUCT OF MEETINGS
The conciliator is always striving to make each meeting as productive as possible. It is

important that the procedural side of the meeting be easily and artfully handled. In
this part we look at guidelines for conduct of joint meetings and conduct of joint
conferences.
In some cases, the conciliator may find that the parties are showing a disposition to be
reasonable and to compromise. He may then restrict his participation to guide
discussions and encourage participants to put forward their own solutions.
The conduct of meetings
Greetings and preliminary discussion
When a joint conference is held, the conciliator should be ready to meet the parties on
arrival at the meeting place. he should be certain of the names of those whom he
will meet and should acknowledge the presence of each and every member of the
negotiating committee individually.
Introduction and seating
The conciliator should accompany the parties to the meeting room and casually
suggest that the chief member make the introduction to the other side. The conciliator
takes his seat at the head of the table as chairman of the meeting.
Opening statements and presentation of case
It is a truism that less said by the conciliator at the opening of a joint conference the
better. He should open by a brief statement welcoming parties and thanking them for
responding to his request for the meeting. He should indicate briefly his understanding
of the dispute.
Presentation of case
Having made his opening statement, the conciliator calls on one side or the other side
to make a statement. In practice, worker representatives normally speak first. The
spokesman who makes the statement may at the end call on his colleagues to
elaborate upon his points. The latter spokesperson may similarly do the same. After
the cases for both sides have been presented, allow a general debate between the
parties.
The next step is for each party to clarify the position on each side. If these are made on
charts, position papers, the conciliator should request a copy.
Chairmanship
In the course of this debate it is common for each side to challenge the validity of other’s
statement. The role of the conciliator is to say as little as possible. The speakers on
each side should normally address each other through the chairman.
the main task of the chairman will be to keep parties attentive and control the discussion
in a orderly manner and is to listen and assess the real facts of the dispute, their stand
on issues and change in attitude. What is utmost importance is that the conciliator
must be neutral and not express views which would strengthen the position of one side.
Separate meetings
The joint meeting may not result in any agreement. He may therefore decide to call off
the discussion and allow for cooling off period. He therefore can inform parties that the
joint meeting is suspended or adjourned and that he would like to meet them separately.
The useful of this meeting is the more informal atmosphere. He however has to keep
absolutely confidential any information given in confidence and needs to protect his
impartiality.
The conciliator will now be able to convey the views and altitudes to other party. He has
to be patient and move between the two sides over a long period, often spending a
substantial time over each in endeavouring to bring their attitudes and positions closer
to each other.
Record of proceedings
Tape recording or noting the proceedings with shorthand should be discouraged. This
may unnecessarily give a “formal character” to the proceedings and discourage free
exchanges. Furthermore, parties will avoid saying things in confidence which may
become “public property”. The conciliator can be usually be relied upon to take short
notes and it is often helpful to have an assistant to take down notes too.
Order of discussion of the issues
When a conciliator is faced with a number of issues the conciliator will have to decide
on the order in which they will be discussed. One way is to do the simple issues first
which will create a favourable atmosphere for the discussion of other issues. Once
agreement is reached, it should be put in writing.
If an agreement is reached on an issue which has interrelationship to various issues, it
can be regarded as tentative subject to final agreement on all issues. Sometimes
discussion will proceed on the basis of a package which in joint meetings for collective
agreement involve wage increases and other benefits.
Duration of meeting
Duration of meeting varies enormously and depends upon the complexity and urgency
of the dispute and attitudes of parties. In general it is desirable to allow as much time as
possible.
Adjournment
Except in very simple cases, more than one meeting is generally necessary before
conciliation proceedings are concluded. In the case of a dispute involving the
negotiation of a long and complicated agreement, a series of meeting may be held
extending over weeks and even months.
Where there is need for further conciliation, the following procedure is suggested for
adjourning a joint conference:
z If the conciliator has been meeting the parties separately, they should be brought
together in the conference room to agree on the adjournment, unless extreme
hostility makes it undesirable to seek a joint expression of agreement even on a
purely procedural point such as this. Obviously, a meeting for this purpose is
unnecessary if the request or suggestion for adjournment is made at a joint
meeting.
z The conciliator should give a brief summary of the results of the meetings that
have just taken place. At the same time the parties should provide each other
with concise summaries of their respective positions on issues that remain
outstanding.
z The date, time and place of the next meeting should be arranged, if possible.
Alternatively, it may be suggested that the conciliator will be in touch with the
parties, and that he will set another meeting date on the basis of his evaluation
of the progress of the discussions.
z Appreciation should be expressed to both sides for participating in the meeting.
z Official adjournment should then be announced. It may be preceded, if
appropriate, by a succinct statement, which should be a concise summing up
of the conciliator’s view, and should not contain any element of blame for
anyone even if the discussions have not proceeded satisfactorily.
A meeting that concludes with an agreement between the parties leading to a

settlement of the dispute requires a few elementary steps by the conciliator:
z The parties should be brought into a joint conference and a statement should be
made on the issues that have been settled in the course of the meetings that
have just taken place. It is generally desirable to put down the final settlement in
writing, and to have the document initialed or signed by the parties. If a long
agreement is involved and its drafting may take sometime the parties may decide
to meet again for the signing of the agreement. On the other hand, if the parties
have a good working relationship the formality of signing a written agreement
may be omitted.
z The conciliator should express appreciation for the cooperation of the parties,
even when the meetings preceding the final agreement have been difficult or
exhausting.
z He should make a clear statement that the conciliation proceedings are ended.
THE SEQUENTIAL PATTERN OF CONCILIATION
Hard posture
It needs to be repeated here that the functions of a conciliator in a dispute is to help the
parties towards an amicable settlement and the responsibility to determine the terms of
the settlement rest with the parties. In practical terms, his central objective is to reduce
the differences between the parties to a point where the possibility of settlement arises.
He has to accept at the outset that he is confronted with a situation of deadlock, since
the differences that give rise to the dispute nearly always have been the subject of
previous discussion between the parties. His main task will therefore be to break the
deadlock and find scope for accommodation and possible compromise. Skillful
handling of the meetings is one of the means by which the conciliator moves towards
his main objective. The various aspects of the conciliator’s substantive responsibility
for leading the parties to agreement are discussed below.
The different phases in conciliation
During the initial phase of the negotiations the parties are usually adamant in upholding
their positions. Sooner or later, the conciliator will begin the task of inducing the parties
to search for accommodation and put them in a mood for settlement. The discussions
on the second phase begins with a softening of the parties’ initial attitudes. this phase
may be initiated when one party adopts a more conciliatory tone which reciprocated by
other.
Hard posture (initial phase)
Here the parties may generally assume the following attitude:
a) inflexibility
b) adamant defence of position
c) efforts to discredit each other
d) out of hand rejection of opposing views
e) pointing to extreme examples for support

f) stiffness/coolness in relationship to each other
At this point, it will be useless for the conciliator to take any initiative. He plays a passive
role by comparison with initiatives taken earlier. His main task will be to keep the parties
talking. He is more of a listener, observing, gathering information and mainly resorts to
lessening the tension. During this phase the conciliator will take stock of the situation
regarding the parties’ position and the gap that separates them and on that basis he
plans his future moves.
THE SEARCH FOR ACCOMMODATION
During this second phase, the major objective is to move the parties away from original
position and the conciliator’s role here will be to induce in them a mood in which they will
be ready for accommodation.
(a) This phase contains two sub-phases i.e. development of attitude of inquiry.
(b) Presentation of alternatives and evaluation.
Attitude of inquiry
In this sub-phase the conciliator’s main task will be to dislodge the parties from original
position when the conciliator took the case. He does this in two ways.
(a) bring home to each of the parties that its position is not actually right or perfect
as it is claimed to be.
(b) let each party see there is some merit in the other party’s position.
The objective, of course, is to encourage mutual appreciation of view before they can
be persuaded to bring position closer to each other.
Approach of conciliator
Here the conciliator in order to avoid hostile encounter will begin by asking questions
showing a desire to gain more insights into the problem. The purpose is to raise doubt
in mind of listeners, a doubt concerning accuracy or comprehensiveness of the
information. Another technique is asking parties to repeat their supporting arguments.
Here the purpose is make the spokesperson listen to his own arguments. There is a
possibility that his presentation may begin to sound a bit less convincing. He must also
draw attention to specific danger of taking inflexible positions. The parties must be shown
that by accepting less than their original goals is preferable to not reaching any
agreement.
EVALUATION AND PRESENTATION OF ALTERNATIVES

Here the conciliator must be ready with suggestions that are wholly/partly acceptable to
parties. Here the conciliator is ready to function as an expert, having a thorough grasp of
the problem and having prepared the way for settlement. The conciliator may consider
trying to reduce the relative importance attached to certain demands. The fact that the
parties have now indicated willingness to listen and be guided may mean that the
conciliator is on his way to a breakthrough.
Mood for settlement

In this major phase of the conciliation process is the emergence of appropriate mood
for settlement. The main objective of the conciliation is to encourage, assist parties in
making modified proposals/counter-proposals. The sign for settlement is on one side
acknowledges that if understands the views expressed by the opposite side. Another
indication is a partial acceptance of a proposal. Negotiators often avoid appearing too
eager to settle.
At this phase, attention should be focussed on the search for possible terms of com-
promise. The conciliator will then formally present it at joint meeting for acceptance.
CONCILIATION TECHNIQUES
The points below is intended to assist the young conciliator in his/her general
understanding of conciliation techniques.
Personal style
As a conciliator gains experience, he will develop his own techniques, his own personal
and individual style. The conciliator should act naturally and his style confirm to his/her
personality.
Listening, asking, questioning, timing

A conciliator must listen attentively ask questions to obtain information (not as an
inquisitor, enforcement officer, legal cross-examiner) and saying the right things and
intervening in the dispute at the right time.
Persuasion
The conciliator has no authority to settle, he can only persuade them to overcome
differences and agree on a compromise.
Moral authority
Conciliator’s success depends on the way he is viewed by parties. He must be above
suspicion-honest credible.
Marshalling pressures
A conciliator will use the techniques of persuasion which depends on the personal
relationship with his parties, opinions of influential outsiders, economic forces at work.
A conciliator will use personal and economic pressures.
THE MANY SIDES OF A CONCILIATOR
Discussion leader
Guiding parties towards a problem solving approach
Safety valve
The parties have to express their feelings to someone and have no one except the
conciliator.
Communication link
Serving as a communication link between parties.
Prober
He may test his suggestions to both parties – trial balloon.
Source of information and ideas
The conciliator is a source of information and ideas.
FAILURE TO REACH AGREEMENT

z Some countries prohibit strikes and lockouts while conciliation proceedings are
pending
z Some countries also limit the duration of conciliation proceedings.
z A conciliator should persist in his duty as long as neither party has broken out
negotiations.
CONCILIATION REPORTS
z In many countries in the Asia Pacific region, if conciliation fails, there are
procedures for preparation of a report on the matter.
z In most cases, the conciliator will have to submit a report.
z Conciliator should give due attention for preparation of his reports.
These reports may contain the following:
Objective
Why the dispute arose?
The stand adopted by both parties.
Conciliation initiatives undertaken.
Results of the intervention.
Recommendations.
z Avoid blaming either party for failure to reach agreement.
z Should conciliation files containing such reports be submitted to industrial/labour
courts?
REFERENCE TO A SENIOR CONCILIATOR

z Further attempt at conciliation by senior conciliator is common
z No reflection on competence of original conciliator
VOLUNTARY ARBITRATION
If a dispute is submitted to voluntary arbitration, the assistance of the conciliator may be
useful. If parties decide to refer to an arbitrator, conciliator can help parties to select the
arbitrator.
PREVENTIVE CONCILIATION
z Governments today not only concerned with settlement but prevention as well.
z Prevention requires a positive and varied approach.
z Target industries prone to disputes.
z Promote good labour management relations — workplace cooperation and
consultation – these have to be nurtured. Sound labour relations between
particular parties cannot be established in a day!
z Develop a programme for promotional activities
z Grievance procedure mechanism
z Contact visits.
CONCLUSION OF CONCILIATION PROCEEDINGS
When a conciliator’s efforts to settle a dispute comes to an end, he will assist the
parties in drafting of any agreement and adds his signature to an agreement reached. If
conciliation fails, the procedure in some countries is that the government has discretion
in referring the dispute to another procedure for settlement. In South Asian countries
for example, a failure report has to be submitted to the government for necessary
action.

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Prevention and Settlement of Disputes in India

International Labour Indian Industrial Relations

First published 2003

ISBN 92-211915-7 92-2-111912-2

1. Effective Labour Court Administration: Trends and Issues 1

2. Making Conciliation Effective 23

3. Role of Conciliation Officers in the Resolution of Industrial Disputes 33

4. Enhancing the Effectiveness of Conciliation Machinery 57

5. Alternate Dispute Settlement Mechanisms in India – 81

6. Awards – Issues and Options 113

7. Strategy for Effective Disposal of Cases: Role of Conciliation 121

8. Lok Adalats — A Conceptual Framework : The Indian Experience 135

9. Constitution of National Mediation Board for Labour Disputes in India 143

10. Strengthening the Labour Inspection System in Kerala 155

11. Training Manual for Conciliators 187

Effective prevention and settlement of labour disputes remains a cornerstone of

30 November 2003 Herman van der Laan

New Delhi A Sivananthiran

C. S. Venkata Ratnam, Professor, International Management Institute, New Delhi &

Elias George, Labour Secretary, Government of Kerala, Trivandrum.

J. P. Verghese, Vice Chancellor, Hidaytullah National Law University, Raipur.

M. Dias, Secretary, North India Employers’ Association, New Delhi.

P. D. Shenoy, Secretary, Ministry of Labour, Government of India, New Delhi.

S. Ghosh, Advocate, Supreme Court, New Delhi.

S. Shukla, Presiding Officer, CGIT-cum-Labour Court, Government of India, MOL,

Effective Labour Court

The technique of industrial adjudication is a dynamic and revolutionary process of

Adjudication of industrial demands being a complicated task, the Tribunals have to

According to Section 10 of the Industrial Disputes Act 1947, the appropriate

Where a settlement is arrived at during the conciliation proceedings over a dispute or

Competence and Jurisdiction of Labour Courts/Industrial Tribunals

Procedure and Approaches of Labour Courts in Deciding and Settling

Effectiveness of Labour Courts/Industrial Tribunals in Granting Relief to

Reinstatement of Dismissed Workers

provision is recommendatory in nature and it has an enabling provision to justify

Therefore, it can be inferred that industrial adjudication through Labour Court/

As on 31.10.1998, there were 214 Labour Courts, 97 Industrial Tribunals and 22

As on 10.05.2000, 5,33,038 cases were pending in these Tribunals. Out of these

Similarly, 17 Central Government Industrial Tribunals-cum-Labour Courts had

WORKLOAD OF LABOUR COURTS

A study on Labour Adjudication in Central Government Industrial Tribunal, Delhi,

Role of Trade Unions

Generally, employers do not want disputes to be adjudicated on merit in Labour

Personnel for the System — Relationship with Judicial System

Selection and Training of Labour Court/ Tribunal —

Non-Implementation of Awards and Denial of Justice

In the Central sphere itself, the number of unimplemented awards is approximately

We find that non-implementation of the awards of Labour Courts and Industrial

Most of the awards which employers/management challenge relate to the

After 10 or 15 years when the employer/management loses in every court, it is often

If the above recommendation is accepted, it would go a long way in providing relief

strengthened over the legalistic approach of settlement of disputes by the courts.

As conciliation in rights disputes is not as effective as it is in interests disputes, it

There is a need for improvement of knowledge, skills and competency of conciliation

Efforts Made by the Central Government to Set up More CGIT-cum-LCs

Procedure for Filling up Vacant Posts of CGIT-cum-Labour Courts

For appointment of Presiding Officers in the CGIT-cum-Labour Courts, a panel of

It is expected that the CGIT-cum-Labour Courts at Ahmedabad, Eamakulam.

The State Governments of Haryana, Maharashtra, Gujarat and Madhya Pradesh

State Labour Courts-cum-Industrial Tribunals

S .No. Name of the State/ UT No of LC No. of IT No. of LC & IT Total

1 Andaman & Nicobar 1 1 0 2