Voluntary

INDUSTRIAL DISPUTES ADJUDICATION AND THE
ROLE OF VOLUNTARY ARBITRATION WITH
WORLD TREND
ABSTRACT
Industrial dispute, a common occurrence in all industries, is essentially a disagreement between
workers and management. Such disputes not only have an impact on the economy of the nation,
but also affect the inalienable human rights of a labourer. Although the Industrial such dispute,
thereby ensuring labourers their rights, it is worth mentioning that the mechanism is painstaking
and time consuming. In light of the complexities and formalities of the system, rights remain
awry. In 1959, the Indian legislature, realising the flaws in the dispute resolution mechanism as
provided in the Act, 1947 and the subsequent need to revamp them, added Section 10A
introducing arbitration as an alternative to solve industrial disputes. Unlike other methods of
dispute resolution, arbitration could be initiated at any time, at the request of the parties, even if no
prior arbitration clause/agreement existed between the employer and the workman. The paper tries
to explore the reasons behind such a trend in India against the backdrop of global industrial
dispute resolution practices while advocating the case for arbitration as the most appropriate
method of dispute resolution
A. INTRODUCTION
It may be safely asserted that one of the fundamental prerequisites for economic
advancement in any State, whatever be its ideological preferences or commitments, is
industrial harmony; that is, ‘peace’ on the industrial front and absence of ‘strife’. Any
industry in any region where industrial strife is absent would be the cynosure of the
community. Alas, taking into account the competing interests of the industrial employers
and their work force, any pragmatic person would conclude that industrial disputes cannot
be wished away. Therefore, any Government in power must ensure to pre empt industrial
disputes and endeavour to evolve appropriate mechanisms to resolve them whenever they
occur or, are apprehended. This fundamental obligation of the Government assumes
greater significance in the era of Liberalisation, Privatisation and Globaliszation
“characterised by de-licensing, de-regulation and de-control in order to make [our
economy] competitive ... and to integrate the [same] with global economy...”1
In such an environment, should the partners in production demonstrate their might, resort
to strikes and lockouts or realize and appreciate that in order to survive, flourish and serve
the community, they should evolve mechanisms to resolve their disputes as expeditiously
as possible?
The disputants would be aware of the causes for the industrial dispute that has surfaced.
They alone can ensure the resolution of their dispute expeditiously. Of course, they can
opt for Collective Bargaining to thrash out their differences. If the Collective Bargaining
Process fails, they can seek the assistance of Conciliation Service. However, the
drawbacks that are inherent in the Conciliation Machinery contemplated under the Act,
namely, the non-availability of Conciliation Officers possessing the requisite attributes,
lack of faith on the part of the parties in the system of Conciliation under the Act and the
feeling that “Conciliation is a hurdle to be crossed to have the dispute referred to
adjudication” and the inter- union rivalries, may prompt us to consider whether the
system of Voluntary Arbitration would provide a more efficacious machinery for the
resolution of the industrial disputes.
1
Planning Commission of India, The Ninth Five Year Plan 409 (vol.II) (1997-
2002).
“Voluntary Arbitration”, as a method for settling industrial disputes, is preferable since it
is founded upon the principle of “Voluntarism” and provides an opportunity to the parties
to choose their own trusted person or a group to resolve their dispute and provide,
probably, a longer lease of life for industrial peace. Some may express that the very fact
that the parties have preferred ‘Voluntary Arbitration” establishes that the Collective
Bargaining Process has failed. However, the fact that the parties, instead of imploring the
Appropriate Government for reference of their dispute to adjudication, have opted for
‘Voluntary Arbitration’, should itself establish that mutual trust and confidence among the
parties still persist and are getting a boost through their preference for ‘Voluntary
Arbitration’.
‘Voluntary Arbitration’, it is averred, must not only concentrate on
deciding a specific dispute but also, more importantly, upon the development
and maintenance of friendly, co-operative labour-management relations. Parties
through this process seek to “arrive at an apparently mutually satisfactory pre-
arranged decision handed down by a third person”. 2 Such third person i.e., the
arbitrator, while arriving at a decision, relies heavily on the facts presented to
him by the parties. Without harping too much upon the legal technicalities, the
Arbitrator, in the light of his experience and expertise in the concerned field,
would prefer to decide the issue logically and, at the same time, pragmatically.
Arbitrator’s honesty, integrity, impartiality and expertise over the matter before
him can easily win the confidence of the disputants.

2
Robert M. Segal, “Arbitration - A Union View Point” in The Arbitrator And The Parties 54
(Proceedings of the 11th Annual Meeting NAA, 1958).

This would ultimately contribute to the success of the Arbitration Process.
S
3. Gabrial N.Alexander, “Evaluation of Arbitrators: An Arbitrator’s Point of
View”,
id., at 99.
4. Ibid.
5. Ibid.
a frontier of industrial society beyond the area of settled rules for behaviour
and his guide posts for decision are few and uncertain.6
With this background, let us turn to the Voluntary Arbitration
Machinery under the Act to determine whether it has been successful in
promoting the statutory objects. In the meanwhile, it would be helpful to
know what the term ‘Arbitration’ signifies.
IMPORTANCE OF DISPUTE RESOLUTION
The Indian industrial scenario changed dynamically after the economic reforms in the
country in 1991, which removed import restrictions, brought in foreign competition,
privatized certain nationalised sectors of economy, liberalised the Foreign Direct
Investment regime, improved infrastructure and led to an expansion in production of
Fast Moving Consumer Goods.8 Additionally, in the Indian economy, industry accounts
for 26% of Gross Domestic Product and employs 22% of the total workforce. Against
such a backdrop, any disrupting factor which hampers the industry will have
immeasurable consequences on the economy of the country. Industrial disputes are one
such embargo.9 Going by the definition, the arena of an industrial dispute is very wide
and incorporates all aspects of a dispute (including difference of opinions between
employer and employee and/or any other person). An industrial dispute adversely affects
the economy of a country as they usually translate in stoppage of work which directly
translates into stoppage of production. For the employer, this would mean increase in
cost of production and would end in loss of profits. For the workmen, it could have
effects like alienation of labour force, loss of credit, et al. Prolonged periods of reduced
production can have adverse effect on the national productivity and national income.
The community at large is interested in maintaining the industrial peace and sustaining
the tempo of production which leads to the buoyancy of national economy.10
There are mainly three causes of Industrial Disputes:11
1. Economic Causes: Where the disputes revolve around wages, bonus, allowances,
retrenchment, automation, leave and so on.
2. Managerial Causes: Little scope of self-expression, non-fulfilment of social needs and
lack of communication.
CURRENT METHODS FOR SETTLEMENT OF DISPUTES
The main object underlying the creation of different machineries to settle or adjudicate
the industrial dispute is to see that peace is maintained in industrial concerns and that
any dispute does not affect the production which is likely to hamper the economy of the
country and when a dispute has arisen, the industrial courts have thus been given powers
to see
if the order of termination of service is justified and to grant appropriate reliefs.12
Conciliatory Bodies
The method of conciliation is ancient. The International Labour Organisation has
defined
conciliation 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 difference between the parties to the dispute under the guidance of the conciliator.
This method of resolving dispute through mediation and negotiation is not foreign in
our
country. As time passed and the courts became overburdened with cases, conciliation
started gaining momentum. As soon as an industrial dispute arises or is expected to
arise, a notice of
strike has to be given for a period of 14 days, after which and before the expiry of 6
weeks, a
strike can take place.13 On the receipt of such notice by the employer, the conciliatory
bodies
come to play. The adjudication of any kind of industrial dispute has been kept out of
the
jurisdiction of the Municipal Courts so that efforts may be made for settlement of such
disputes
through the methods that have been prescribed by the Act, 1947.14 It is pertinent to
mention
that the Appropriate Government15 plays a very important role in the settlement of
any
industrial dispute as it is responsible for the constitution of all conciliatory and
adjudicatory bodies.
Works Committee16
The main purpose of a Works Committee is to develop a sense of a partnership
between the employer and his workmen. The main duty of a Works Committee is to
safeguard the rights of the workers and to compose any material difference of opinion
in respect of matters carrying an interest that is common to both, employers and
workmen. In Kemp and Co. Ltd. v. Their Workmen17, it was said that the duty of a
Works Committee is to smooth away frictions that arise in day to day work. Grievance
Settlement Authority18 This authority has been constituted for the resolution of
disputes arising out of individual grievances and the setting up of this authority does
not affect the right of the workmen to raise industrial disputes on the same matter
under the provisions of the Act, 1947.19 Conciliation Officer20 and Board of
Conciliation21 If the Works Committee is not able to resolve the dispute, the matter is
passed on to a Conciliation Officer. The duties of a Conciliation Officer have been
dealt with under Section 13.22 Though a Conciliation Officer cannot direct the parties
to act in a particular manner nor 13
________________________________________________________
Industrial Disputes Act, 1947, § 22. 14 S.N. MISHRA, LABOUR AND INDUSTRIAL
LAWS 92 (27th ed., 2015). 15 Industrial Disputes Act, 1947, § 2A. 16 Industrial
Disputes Act, 1947, § 3. 17 (1955) I LLJ 48. 18 Industrial Disputes Act, 1947, § 9C.
19 AVTAR SINGH AND HARPREET KAUR, INTRODUCTION TO LABOUR
AND INDUSTRIAL LAW 74 (3rd ed., 2015). 20 Industrial Disputes Act, 1947, § 4.
21 Industrial Disputes Act, 1947, § 5. 22 Industrial Disputes Act, 1947, § 13.

give a final decision in the matter, he can attempt to secure agreement of the parties for
reference to voluntary arbitration23 and on failure of such attempt, he tries to persuade
them to agree to refer the dispute to adjudication by sending in a joint or separate
application for such a reference under Section 10(2)24 of the Act, 1947. Reasons for
Failure of Conciliation 1. Illiteracy and lack of understanding amongst the workers,
especially those employed in backward areas. 2. Lack of co-operation and sometimes,
even opposition of the trade union leaders to the constitution and functioning of
conciliatory bodies. 3. Failure of reaching at a common consensus because of
obstinacy. Also generally, workers do not have faith in a body that is non-judicial in
nature. 4. Copiess of almost all demand charters, even if no involvement of the
conciliation machinery is in fact wanted by both the parties, are invariably sent to the
conciliation officer. Sometimes, there is also a pecuniary interest of the conciliation
officer which hampers the entire process.25
Adjudication Machinery
Industrial adjudication has undoubtedly played a conclusive role in the settlement of
industrial disputes and in ameliorating the working and living conditions of labour
class. In this context, the National Commission of Labour has observed:
The adjudicating machinery has exercised considerable influence on several aspects
of conditions of work and labour management relations. Adjudication has been one of
the instruments for the improvement of wages and working conditions and for
securing allowances for maintaining real wages, bonus and introducing uniformity in
benefits and amenities. It has also helped to avert many work stoppages by providing
an acceptable alternative to direct action and to protect and promote the interest of the
weaker sections of the working class, who were not well organized or were unable to
bargainon an equal footing with the employer.

23 Singh & Kaur, supra note 19, at 79-81. 24 Industrial Disputes Act, 1947, § 10(2)
-"Where the parties to an industrial dispute apply in the prescribed manner, whether
jointly or separately, for a reference of the dispute to a Board, Court Labour Court,
Tribunal or National Tribunal, the appropriate Government, if satisfied that the persons
applying represent the majority of each party, shall make the reference accordingly."
25 Debi Saini, Compulsory Adjudication of Industrial Disputes: Juridification of
Industrial Relations, 27(1) Indian Journal of Industrial Relations (1991). 26
Government of India Gazette, 1969.
Labour Court (Section 7)27
The power of appointment of a Labour Court is vested with the Appropriate
Government and it may constitute one or more Labour Courts. The powers and duties
of Labour Courts have been dealt with under Sections 1128 and 1529, respectively. In
Vijaya Bank v. Shyamal Kumar Lodh,30 it was said that the Labour Court within
whose local jurisdiction the establishment is situated will have the jurisdiction to
decide any dispute relating to subsistence allowance.
Industrial Tribunal (Section 7A)31
A Tribunal consists of one person only to be appointed by the appropriate government.
Only industrial disputes can be adjudicated upon by an industrial tribunal.32 All
machineries for adjudication of industrial disputes have been empowered with powers
and duties that would help facilitate smooth resolution of such dispute. In furtherance
of safeguarding the interest of workers, it has been held that the Industrial Tribunal
deciding upon the wage scale of the employees of an industrial establishment would
have the discretion to grant ad hoc increase of salary as part of the revision of
wages.33 Such machinery also has the power to enforce contracts of personal service,
to create contracts and to change contracts.34

National Tribunal (Section 7B)35
Only Central Government can refer an industrial dispute for adjudication to the
National Tribunal, even if the Central Government is not the appropriate government.
This is the ultimate remedy for the settlement of an industrial dispute in case where the
Labour Court or tribunals and the conciliation machinery fail to bring about a
settlement. Adjudication consists of settling disputes through intervention by third
party appointed by the government.
About 90 to 95 per cent of disputes are referred to adjudication machinery on an
average annually. However, the functioning of adjudication machinery has not been
very satisfactory, particularly because of the delays involved and the inefficient
implementation of the awards.36
____________________________________________________
27 Industrial Disputes Act, 1947, § 7. 28 Section 11, Industrial Disputes Act, 1947, §
11. 29 Section 15 Industrial Disputes Act, 1947, § 15. 30 (2010) 7 SCC 635. 31
Industrial Disputes Act, 1947, § 7A. 32 33 Tata Consulting Engineers v. Workmen,
(1981) II LLJ 147. 34 Apollo Tyres Ltd. v. CP Sebastian, (2009) 14 SCC 360. 35
Industrial Disputes Act, 1947, § 7B. 36 P. N. SINGH & NEERAJ KUMAR,
EMPLOYEE RELATIONS MANAGEMENTS 290 (2010).
Defects in the Present System of Adjudication Machinery 1.
The proceedings at adjudication take unduly long period. About 50 to 60 per cent of
the cases are decided in more than a year, and 25% of the cases take between 6 to 12
months. The state of implementation of awards (requiring implementation) is also not
very commendable. 30 to 40 per cent awards are not implemented by the date of
enforcement. Incomplete and abrupt implementation of awards creates suspicion in the
minds of workers and shakes their faith in the machinery.

2. Adjudication has been the most popular measure of resolving disputes accounting
for more than 90 per cent of the disputes every year. However, adjudication is not a
democratic method and may create bitterness among the parties. It tends to encourage
litigation and irresponsible behaviour among employers and labour. The functioning of
the adjudication machinery has, in practice, been unsatisfactory.
3. Moreover, the implementation of the awards has been inefficient. Delays in
implementation erode the faith of workers in the adjudication machinery.37
Adjudication is preferred more by employers who can afford to spend more on the
legal proceedings.38
The dispute resolution system as envisaged in the Industrial Dispute Act has projected
itself as representatives at conciliation and tribunal levels, outsider union leaders,
management consultants and labour lawyers), in effect, have got so structured that they
do power dispensation, and this dispensation is done at the conciliation level, at the
level of processing of disputes by labour bureaucracy, the level of the political
executive, and the tribunal level.
Abstract:
The scope of the paper is to identify whether arbitration is an appropriate method of industrial
dispute resolution. The historical background of arbitration would be discussed along with the
pros and cons of arbitration. Basic concepts of arbitration along with types of arbitration will be
dealt. Analysis of section 10A and section 18(2) and section 18(3) will be done. Reference of
disputes and arbitration with relation to Industrial Disputes Act, 1947 will be done. The arbitrators
duty of disclosure will also be disclosed along with some of the efficient solutions will be given.
STATUTORY HISTORY OF ARBITRATION
Arbitration has deep roots throughout history[1]. Use of
arbitration between international parties’ dates back to ancient Greece. It is one of the earliest methods of dispute resolution. People used to settle
disputes by means of arbitration long before courts were established. In medieval Europe, from
different regions, merchants and traders would assemble at markets to do business. The private
dispute resolution systems can be traced back to this period. In England, the first Arbitration Act
in England was in 1698 by formalizing a practice of informal arbitration which was done by trade
guild members. The need for the same was reinforced by the inefficiency of common law courts in
applying mercantile law[3].
For settlement of conflicts, arbitration is an age old practice in India. Panchayat system is based
on this concept. Under the influence of Mahatma Gandhi it originated in textile industry in
Ahmadabad. Along with the adjudication, provision for arbitration even was made by the Bombay
Act under the Bombay Industrial relations Act[4]. This
was very popular in 1940s and 1950s. The government had also been proposing the same in the
first three year plans. Voluntary arbitration is very important and essential feature of collective
bargaining and it was emphasized in the labor policy chapter. In 1958 it was incorporated in code
of industry discipline. In 1962 in Indian Labor Conference it was decided that arbitration would
be preferred after conciliation under adjudication is necessary[5]. During Chinese Aggression, Industrial trade resolution accepted voluntary arbitration.
To make the idea more and more popular the government set up National Arbitration Board. In
1956, it was decided that voluntary arbitration would be included. Finally in 1957, section 10A
was inserted which was enforced from 10 March 1957.[6]
The first statutory recognition was given to domestic arbitration in India and it was by way of the
Indian Arbitration Act, 1940 which dealt solely with the previously uncodified body of law
concerning domestic arbitration proceedings. Its purpose was to consolidate and amend the law
relating to arbitration[7]. The statutes dealing with
international commercial arbitration were the Arbitration Act, 1937 and the Foreign Awards Act,
1961.The UNCITRAL adopted the UNCITRAL Model law on International Commercial
Arbitration in 1985. The purpose of the model law was to provide a set of rules which by bringing
about uniformity in laws of member countries would facilitate the settlement of international
commercial disputes[8]. The Arbitration and
Conciliation Act 1996, seeks to amend and consolidate the law relating to domestic arbitration,
international commercial arbitration and the enforcement of foreign arbitral awards.[9]
B. I. ARBITRATION: MEANING OF
According to Encyclopedia Britannica:
Arbitration is a process for the settlement of disputes on the consent of the parties in conflict. By
their agreement, the controversy is referred to a third party for a final decision or award. It is to be
contrasted with conciliation or mediation in which the role of the third party is to persuade the
parties to the dispute to [arrive at a ] settlement, rather than to impose upon them a binding
decision.7
‘Arbitration’, as per the Oxford Dictionary, involves “a settlement of
disputes by an arbitrator and an arbitrator is a person appointed by both
parties to settle the dispute”. In the words of Nolan, “arbitration is a
procedure in which parties to a dispute voluntarily agree to be bound by the
6. Ibid.
1. 2 Encyclopaedia Britanica 215 (1969).
decision of an impartial person outside of the normal judicial process”. o
When no agreement is possible under conciliation, the
Industrial Disputes Act encourages the two sides to

voluntarily submit the dispute to arbitration by an impartial
third-party. This can only be done if the two sides are
prepared to accept the arbitrator's verdict as final and
binding. The faith placed by the statute on arbitration as a
method of resolving conflict has not been indicated by
experiences. Indeed, it is unusual for parties who cannot
compromise through conciliation to agree to arbitration. But
arbitration is to be distinguished from conciliation not only
by the fact that its decision is binding on the parties but
14
also by its different approach and spirit. The main
objective of arbiration is adjudication and hence there is no
place for compromise in awards, while the Conciliator has to
reconcile the recommendations of the parties, sometimes
against his own discretion.
13. Sahals Payal, "Industrial Relations system in India.
Stud y of Vital Issue", Sterling Publishers Pvt., Ltd.,
New Delhi, 1989, p.71.
14. A.C. Pigru Economics of Welfare Vol.1 and II, Macmillan
and Company, Bombay, p.435.
Arbitration is a method or process by which the parties

mutually agree for the settlement of their dispute by
referring it to an impartial judge or authority of their own
choice and whose decisions they agree to accept as final and
15
binding.
Both the parties have to mutually agree to the terms of
reference as well as to the choice of the arbitrator.
Arbitration is a judicial process. Under Arbitration one or
more outsiders present a binding decision on the merit of the
dispute.
Arbitration may be "voluntary" or "compulsory".
In Voluntary Arbitration the parties to the dispute can
themselves refer voluntarily any dispute to arbitration
before it is referred for adjudication. Compulsory
arbitration (Adjudication) on the other hand, is one where
the parties are required to accept arbitration even without
16
willingness on their part.
Voluntary arbitration as provided for under section
10(a) is an arbitration only in name. It is virtually
adjudication. The parties may make a reference of the

dispute to arbitration and the reference should be to such
15. Dharma Vira Aggarwala, Industrial Relations
Collective Bargaining, Deep and Deep Publications, New
Delhi, 1981, p.201.
16. C.P. Nanioria and S. Mamoria, op.cit. p.580
persons like the Presiding Officer of a Labour Court or
Tribunal or National Tribunal. Therefore it has the
character of adjudication. The award of the arbitrator
should be communicated to the appropriate Government and it
should be published under section 17. Moreover, as per
Section 10-A (5), the provisions of the Arbitration Act,
1940, are not applicable to the proceedings under Section
10-A. Consequently, the parties cannot take recourse to the
machines of the Arbitration Act.
But the impact of arbitration in the area of industrial
relations for resolving industrial disputes is not quite
effective, despite the efforts made by the State Governments
as well as the Central Government to promote arbitration by
setting up Arbitration Promotion Board. The ineffectiveness
17
of aribitration may be due to

1. easy availability of adjudication in case of failure
of negotiations.
2. death of arbitrators, who command the confidence of
both the parties.
3. the absence of recongnised Trade Unions which could
bind the workers to common agreements.
4. legal obstacles.
5. the fact that in law no appeal is competent against
an arbitrator.
6. the absence of a simplified procedure to be followed
in voluntary arbitration.
7. cost to the parties, particularly to the workers.
17. Rep ort of the National Commission on Labour op.cit
REFERENCE OF DISPUTE TO ARBITRATION UNDER INDUSTRIAL DISPUTES ACT,
1947
In Workmen of Dimakuchi Tea Estate v. Dimakuchi Tea Estate, the SC stated the principal objects of the I.D. Act as follows:
 1. For preserving amity and securing good relations
between employer and workmen, promotion of measures;

 2. The investigation into and the settlement of industrial
disputes between employers and employees, employers and workmen or workmen and workmen,
with a right of representation by a registered TU or a federation of TU or an association of
employers or federation of associations of employers[11] 3. Prevention of illegal strikes and lockouts
 4. In matters of lay off of retrenchment, providing relief to
workmen
 5. Ensure collective bargaining
In Sindhu Hochtief(India) Pvt Ltd Vs Pratap Dialers[13][14]. There are different forms and
causes of industrial dispute. The term industrial dispute in the Industrial Dispute Act, 1947 has the
following features:
 1. There should be dispute

 2. It could be between employer-employer, employer-
employee or employee-employee.
 3. The dispute must be related to work related issue.
 4. The dispute must be raised by a group or class of
workers[15].
There are various methods of settling industrial dispute. It may be without state intervention by
Collective bargaining i.e. without conciliation or with conciliation or by voluntary arbitration. The
Industrial Disputes Act along with providing machinery for investigation and settlement of
disputes, provides measures for prevention of conflicts. If the industrial disputes are not settled by
collective bargaining or works committees or by bipartite negotiations, the Industrial Disputes Act
provides the following authorities; Conciliation Officer and Board of Conciliation, Voluntary
Arbitration, Adjudication by labor court, Industrial Tribunal and National Tribunal[16].
Arbitration refers to negotiations in which parties are encouraged to negotiate directly with each
other prior to some other legal process. Arbitration systems authorize a third party to decide how a
dispute should be resolved[17].
Arbitration process may be either binding or non-binding. Binding arbitration produces a third
party decision that the disputants must follow although they disagree with the result. Non-binding
arbitration produces a third party decision that the parties may reject.
ADR process may be mandatory and they may be required as part of a prior contractual agreement
between parties. In voluntary process, submission of a dispute to an ADR process depends entirely
on the will of the parties[18].

In voluntary arbitration, the parties willingly refer their dispute to a third party. The essentials
include, there should be voluntary submission of dispute, investigation and attendance of witness.
It may be specially arising under disagreement of contracts or agreements. There is no compulsion
in this case[19].
In compulsory arbitration, it has to be accepted mandatorily. It is entirely based on voluntary
discretion of the appropriate government based on the dispute.The essentials of compulsory arbitration consists that the parties should fail to
arrive at a settlement by voluntary method, if there is grave economic crisis, there is grave public
dissatisfaction, any national emergency or if parties are ill balanced and public interest is of prime
importance. It leaves no scope for strikes or lockouts. Moreover it deprives both the parties of
their fundamental rights[21].
The ADR process is extra judicial in nature. ADR is informal, there is application of equity, and
there is direct participation and communication between disputants.
ANALYSIS OF SECTION 10A AND SECTION 18
Voluntary arbitration is a process in which the disputing parties show willingness to go to a third
party and voluntarily submit to his decision. An arbitrator may be a single person or a panel.
Arbitration is less expensive and faster than that of a court. The party might agree in advance and
hence dispute is resolved at the time of submitting a dispute to arbitration to abide by the award.
The party may even agree to submit the dispute to an arbitrator but at the same time reserve their
right to accept or reject the award when it comes.[23]
There are several factors hampering adoption of voluntary arbitration in India like that of legal
obstacles, scarcity of arbitrators who could win people’s confidence, adjudication is available
easily, cost to the parties, presence of complicated procedure, no appeal is competent against the
arbitrators award, absence of recognized unions which could bind the workers.
Reference to the Arbitrator
Section 10A of the Industrial Disputes Act was inserted by section 8 of the I.D act 1956. The
purpose was to enable employers and employees to voluntarily refer their disputes to arbitration
by a written agreement.[26]Strict adherence to these
provisions is a condition precedent for passing a valid award.[27]The reference will not be competent if the dispute which is existing or apprehended is
not an ‘industrial dispute ‘at all[28].The definition of
‘industrial dispute’ in section 2(k)[29]will not include
what will happen to the undistributed bonus. An agreement to refer to an industrial dispute to an
arbitrator under this section is not a settlement of the dispute because the dispute does not come to
an end.[30]Dispute cannot be validly referred to a
tribunal, labor court or national tribunal for adjudication after an industrial dispute has been
referred to an arbitrator under section 10A.[31]
The parties can enter into an arbitration agreement which must be in the prescribed form. Name of
the arbitrator must be specified and to the appropriate government, a copy of the arbitration
agreement should be forwarded which shall be published in the official gazette. The procedure to
be followed should be directory. An arbitration affecting the interests of large number of

employees cannot be a private agreement[32]. Non-
publication of the arbitration agreement under section 10A (3) would be fatal to the arbitration
award.[33]
On reference to more than one arbitrator, each one of them must act personally in performance of
the duties of his office, as if he were the sole arbitrator, for, as the office is joint. If one refuses, the
others cannot make a valid award. Such a provision is implied, unless a contrary intention is
expressed, whenever the arbitration agreement requires that there shall be 3 arbitrators the award
of any two is then binding[34].For the making of an
award, giving of a written notice to either party is not essential.
Procedure before the Arbitrator
The arbitrator can follow his own procedure, however with the rules of natural justice.[36]Section 11 states that an arbitrator shall follow such
procedure as he may think fit[37].An arbitrator has to
follow the same procedure as that of a board, court, labor court, tribunal or national tribunal. The
arbitrator has all the powers to which both the sides are partly, conferred.[40].Noncompliance of the mandatory requirement of this
provision would render the award itself invalid. In one particular case, neither the arbitration
agreement nor the award had been published[41]. The
court held that
“The government comes into the picture only after arbitration agreement has been entered into
under section 10A(1) .If once that is done, there is a valid arbitration agreement and non
compliance with the other provisions of section 10A or any other provision in the Act relating to
publication of the award will not invalidate or take the arbitration agreement itself outside the per
view of section 10A[42].”
All the confusion was settled by the SC pronouncement in Karnal leather Karamchari Sangahtan
vs Liberty Footwear Co[43]stating that the arbitration
agreement must be published before the arbitrator considers the merits of the dispute and
noncompliance of this requirement would be fatal to the arbitral award.
In Sir Silk Ltd V Govt of Andhra Pradesh[44], the SC
held that once the award is received by the appropriate government publication is a must. But
under special circumstances of this case, the SC held that the award need not be published.
In Grindlays Bank Ltd VC Central Govt Industrial Tribunal[45], the SC held that an application for setting aside tribunals ex parte award made within
30 days of publication of award can be validly entertained by the Tribunal.
Employers and Workmen Who Are Not Parties
The employers and the workmen who are not the parties may be given a notice to present their
case before the arbitrators. Within a period of one month notification is issued. The court held that
the requirements of this provision have not been complied with, will be rendered invalid[46].The court has taken the view that the provisions of this
sub section are only directory and not mandatory[47].
Sub Section (4): Award of the Arbitrator:
The industrial dispute referred to arbitrator can be investigated and adjudicated under the
arbitration agreement and then submitted after signature. The appropriate government should
publish it too[48].
Jurisdiction of the Arbitrator
An arbitrator is bound to adjudicate on the dispute as specifically referred in terms of the
agreement.[49]Reference is more of an ad hoc
arrangement. The arbitrator should settle the dispute and is well expected to do substantial justice
between the parties in giving his award.[50]

In Rohtas Industries Ltd v Rohtas Industries Staff Union[51], the SC observed:
An award under section 10A is not only invulnerable but more sensitively susceptible t be the writ
lancet being a quasi statutory body’s decision. The absence of reasons on support of the award
will shut out the judicial scrutiny by making it a unscruable face of the sphinx.
Exclusion of the Arbitration Act
Sub section (5) excludes the application of the provisions of the Arbitration Act 1940 to the award
of an arbitrator under section 10. In Hindustan National Glass and Industries Mazdoor union vs S
N Singh[52], court held that an application under
section 30 of the Arbitration Act challenging the award of an arbitrator under section 10A is not
maintainable.
Judicial Review
Whether the awards of the arbitrators can be challenged before the judiciary ?
In R v Disputes Committee Of National Joint Council for the Craft of Dental Technicians[53], it was stated that “ there is no instance of which I know in
the books, where certiorari or prohibition has gone to any arbitrator, except a statutory arbitrator
and a statutory arbitrator is a person to whom, by a statute , the parties must resort.”
If an arbitrator records findings based on no legal evidence and the findings are either his ipse
dixit or his findings suffer from additional infirmity of non application of mind, the award will be
quashed.[54]
In Regina v Disputes Committee of Dental Technical[55], and Hindustan Times Ltd Vs Workmen[57], held that an award passed under the Industrial Disputes Act cannot be inconsistent with
the law the legislature laid down, and if it did so, it was illegal and it would quash the arbitrator’s
award
In Engineering Mazdoor Sabha vs Hind Cycles Ltd[58][59], the SC held that arbitrator under the I.D Act comes within the rainbow of statutory
tribunals amenable to judicial review.
Section18 (2) and section 18(3)
Section 18 of the industrial Disputes Act states about persons on whom settlements and awards are
binding. Section 18(2) states that an arbitration award that has become enforceable shall be
binding on those parties who had referred for arbitration. An arbitration award where a
notification has been issued under section 10A shall be binding on all the parties to industrial
dispute[60].
A settlement within the meaning of section 18(3) is binding on both the parties and continues to
remain in force unless the same is altered by another settlement.
In an industrial dispute referred by central government which has an all India implication,
individual workmen cannot be made party to a reference. All of them are not expected to be
heard.[62]
THE ADVANTAGES AND DISADVANTAGES OF ARBITRATION
Whether arbitration is advantageous or disadvantageous largely depends on whether you are
plaintiff or defendant. Arbitration minimizes the plaintiff's chances of obtaining large punitive
damage and actual damages[63].While a party may
save litigation costs, that savings can also increase substantially in arbitration. [65]
There are several benefits of arbitration. It is less expensive than resolving disputes through the
judicial system; it produces a resolution of the dispute faster than the court system and achieves
results that are apt to be commercially reasonable in complicated cases. Arbitration rules can be
tailored to the types of disputes that are likely to occur under the contract. Moreover arbitration is
an expedient, convenient, less-expensive forum. Confidential decisions are taken by the arbitrators
who are selected because of their experience and expertise in the area of the dispute and quite
knowledgeable. Arbitration is one of the most efficient types of resolution. In most arbitral forums
today the arbitrators can award punitive.[66]Under the
rules of arbitration there is a method for filing a claim for adjudication of the grievance. The
selection of the arbitrators starts once the complaint is filed[67].
The arbitration comes with its disadvantages as well. In recent years, arbitration proceedings have
become more formal and have increased legal fees. Hence they are not always more expedient or
cost effective than the court proceedings. While the relaxed procedural and technical aspects of
arbitration can lead to a more streamlined process, it can also lead to delays and unpredictable
results[68]. They are reluctant to reprimand improper
behavior of the parties. Temporary injunctions, wage garnishments, property attachments, motions
to dismiss, summary judgments and other interlocutory remedies and decisions are not typically
available in arbitration[69]. It is also difficult to
appeal .In addition; collateral estoppels and res judicata are not typically available in
arbitration.[70]Hence arbitration comes with
limitations. Arbitrations can be expensive both in the fees paid to the agency setting up the
arbitration and the fees paid to the arbitrators. The courts have minimal fee. Also, at times the
arbitration process may not seem faster than the court system. Arbitration is a private dispute
process. Court files are public and usually available to anyone wanting to know what you are
doing. Hence the court procedures are more transparent in this matter. Arbitrators generally have
the power to issue subpoenas but probably do not have much authority to back up the subpoenas if
they are not obeyed[71].
How Does Arbitration Differ From Mediation And Civil Litigation?
Arbitration differs from the Court System in several respects. The parties can select the person to
decide the case. The typical discovery practice is also limited and controlled by the arbitrators
while the court system provides for broad investigation .While the arbitration hearing is formal, it
is not as formal as a court hearing. Unlike a court decision, there are very limited grounds for an
appeal challenging an award. Arbitration is binding, and parties can seek to enforce a decision
through the courts. Under many Arbitration Acts, arbitration is a matter of contract between the
parties. Since public policy favors arbitration, a court will resolve any doubts regarding the
applicability of an arbitration provision in favor of arbitration[72].
Arbitrators Duty of Disclosure

Arbitration is an alternative to adjudication and the two cannot be sued simultaneously. It is
voluntary at the discretion of the parties to a dispute. An arbitrator is a quasi- judicial body. He is
an independent person and has all the attributes of a statutory arbitrator. He has wide freedom, but
must function with limitations. He must follow the due procedure of giving notice to parties,
giving fair hearings, relying upon all available evidence and documents. There must be no
violation of the principles of natural justice.[73]

An arbitrator has a responsibility. An arbitrator should hear the evidence, understand it and apply
the principles of justice and equity to achieve the correct result. He should be fair enough so that
the people have complete faith on him. In classic arbitration they knew and trusted the individual.
Today we have gone to the opposite extreme. The arbitrator selected ideally has no relationships
with any of the parties. The disclosure process has thus become the modern surrogate for the
purpose of transparency.
"An arbitrator should disclose any interest or relationship likely to affect impartiality or which
might create an appearance of partiality or bias[74]."
An Arbitrator must disclose a relevant interest which is regarded by the courts as a matter bearing
upon the integrity which is the core of the arbitral process. Relationships may be those personal to
the arbitrator. They may also be derivative, in the sense of relationships involving members of the
arbitrator's family, employer, partner or business associate[75]. There is a dual element of reasonableness here. Both the duty to disclose interests and
the duty to disclose relationships implicate a reasonable effort. Following such investigation the
potential arbitrator should disclose those relationships which are likely to affect impartiality.
Actual bias should be shown. An arbitrator must be without bias and require disclosure of all facts
or circumstances that might give rise to reasonable doubt as to impartiality. An arbitrator must
disclose personal knowledge of disputed facts concerning the proceeding; prior and pending
matters in which the arbitrator served or serves as a party arbitrator or attorney serves or if served
as neutral arbitrator[76].The disclosure should be
sufficient to provide such insight and understanding but need not be as detailed or specific as that
of a neutral arbitrator. A party-appointed non-neutral arbitrator is not subject to disqualification by
the other party based upon matter so disclosed.[77]
Based upon the United Nations Commission on International Trade Law (UNICTRAL) Model
Law on International Commercial Arbitration, India has adopted new arbitration law. The new law
is titled the Arbitration and Conciliation Ordinance 1996.[78]

CONCLUSION
Faith is placed by the statute on arbitration as a method of resolving conflict. The problems are
similar to those that have general arbitration, which fundamentally is a failure to free arbitration
from that of courts[79]. Four things need to be kept in
mind. First, there is a terrible lack of qualified arbitrators and arbitration procedures. Secondly, the
courts have regularly accepted appeals against the award of arbitrators which makes a mockery of
the arbitration. Thirdly, arbitration is not taken seriously. Lastly, recognition of Trade Unions on
the part of the employers is a necessary pre-requisite for the success of voluntary arbitration[80]. Government intervention in voluntary arbitration and
Supreme Court decisions has caused problems.
Collective bargaining and voluntary arbitration should be given greater role. As the ILO puts it,
Collective Bargaining is "based on the premise that a negotiated agreement, however
unsatisfactory, is to be preferred to an imposed solution; the parties should always retain the
option of returning voluntarily to the bargaining table"[81]. This means whichever dispute settlement mechanism is adopted, if the parties are in
favor of resuming negotiation, it should incorporate the possibility of suspending the compulsory
arbitration process.[82]
The philosophy of the Industrial Disputes Act is seriously questioned today. The Government
needs to have a proactive and not protective labor policy[83]. It must increasingly take up a neutral stand between the conflicting interests of the
employer and the employees. Prior notice to the employees/union and proper compensation to the
affected workers should be focused upon rather than prior approval of the Government[84]. Productive resources should be productively used. If not
incentives at least disincentives should be avoided[85]<!--[endif]--
>and this solutions would ensure industrial peace.
Following is the meaning ascribed to the word ‘Voluntary Arbitration, in
the Bouvier’s Law Dictionary.
The system of voluntary arbitration works out by mutual and free
consent of the parties. It usually takes place in pursuance of an
agreement (commonly in writing) between the parties, termed as
‘submission’; the person to whom the reference is made is an
arbitrator and the determination of the arbitrator is called an
award... Arbitrators are judges chosen by the parties to decide
matters submitted to them, finally and without appeal and ... [their
decisions] must be taken as they are with their weaknesses and
frailties, and their action if honest and fair, is binding.98
Further, “the function of the arbitration”, Francis Kellor says “is to destroy
the disputes”.10
‘Voluntary Arbitration’ is a method adopted for resolving industrial
disputes with a view to maintain peace and order over a longer period in an
industry. To set this machinery into motion, the disputants should express
their “free consent” through a written agreement demonstrating their desire
8 . Dennis R.Nolan, Labour Arbitration Law And Practice In A Nutshell 1 (1979).
9 . Bouviers Law Dictionary 225, 228 and 230.
10 .Raman Rao, Mediation, Conciliation and Arbitration, U.S.A. And India:
A Comparative Study 49 (1963).

for Voluntary Arbitration. Such an agreement ought to contain the name/s of a
person or persons chosen to arbitrate upon the industrial dispute. Arbitrators
need not be learned in law but may be lay men. But, they should be persons
recognized and honoured for their attributes, like, impartiality, honesty,
integrity, expertise and experience over the matter referred to them.
II. TYPES OF ARBITRATION
At this point, we may refer, though briefly, to the different forms of
labour Arbitration. They are:
i. “Conventional” or “Voluntary Arbitration”;
ii. “Compulsory Arbitration” and
iii. “Final Offer Arbitration” or “Last Offer Arbitration” or “Pendulum
Arbitration [either compulsory or voluntary]”.

i. Conventional or Voluntary Arbitration
Under this method, it is for the disputants to decide whether they should
opt for Arbitration. That is, neither the Law, nor the Government compels them
to have recourse to Arbitration. But, law can dictate or prescribe the time limit
within which the parties should choose Arbitration for the resolution of their
dispute. Thus, for example, under the Act, once the Appropriate Government
decides to refer the industrial dispute to an

adjudicatory authority, the parties’ right to opt for Voluntary Arbitration
vanishes. Some of the major countries where this method is prevalent are; the
U.S.A., Canada and England. In U.S.A., and Canada, the Conventional or
Voluntary model is that of Grievance Arbitration which operates in private
sectors to resolve contested dismissals and Rights’ Disputes involving
application or interpretation of collective agreements.11
ii. Compulsory Arbitration
Here, law would require the disputants to go in for Arbitration or the
Government would insist for the incorporation of a clause in the contract of
employment which would oblige the parties to have recourse to Arbitration.
Compulsory Arbitration, in many aspects, resembles Compulsory Adjudication.
The Government, in its discretion, can make this method applicable to certain
industries only. Normally, in industries covered by the Arbitration clause,
workers are legally prohibited from resorting to strike. At the same time, the
Government would also be reluctant to refer the dispute to adjudication.

ii Roy Lewis, “Final Offer Arbitration: the Anglo-American Dimension”
311 (1993) I.L.J. (vol.22 No.4). (Dec.). See, Alvin L.Goldman, Labour
Law And Industrial Relations In The United States of America 62, 320,
321, 324, (II edn., 1984).

iii. Final Offer Arbitration or Last Offer Arbitration or Pendulum
Arbitration requires the arbitrator to choose between the employer’s final offer
and the union’s final claim.12 It prohibits a compromise between these
two positions or indeed any solution other than the final offer or claim. The
Pendulum Arbitration theory, it is said, is based on two implicit assumptions:
the reference to Arbitration is compulsory and it is “a specific alternative to the
right to strike”.
‘Pendulum Arbitration’, it is averred, provides an “impasse deterrent”:
the possibility of a total defeat in arbitration creates an effective incentive for
the parties to engage in genuine bargaining leading to an agreement.13
Deterrence is also thought to be necessary in order to avoid some major
disadvantages that Arbitration system might otherwise involve.14 These are the
“chilling” and the “narcotic” effects.14A The
former is manifested when the parties become reluctant to bargain realistically
because they believe that the Arbitration Award will be based on a compromise
between their final position and the latter signifies that the
12 . Roy Lewis, “Final Offer Arbitration: the Anglo- American Dimension” id., at
310. See, Alvin L.Goldman, Labour Law And Industrial Relations In the
United States of America, id., at 230.
13. Roy Lewis “Final Offer Arbitration: the Anglo-American Dimension”
supra note 11 at 310.
14. /bid.
14A. Ibid.
disputants have become dependent on Arbitration and are no longer willing or
able to negotiate their own agreements.14® However, if the deterrent fails
to work and neither side moderates its position, there is the lurking danger that
awards under Pendulum Arbitration may be one sided, unworkable and
damaging to long term industrial relations.15
Ill SUBJECT MATTER OF ARBITRATION
At the outset, it should be noted that all industrial disputes do not possess
the same characteristics. This raises the question: Are there different kinds of
industrial disputes? Further, since we are dealing with the machinery of
Voluntary Arbitration for the resolution of industrial disputes, an other incidental
but important question would be: what kinds of disputes are referable to
Voluntary Arbitration under our Industrial Disputes Act? In this context, let us
find out how industrial disputes have been classified and whether under our Act
“Arbitration” includes Grievance Arbitration also.

Industrial Disputes have been broadly classified under four heads. They
are: “Economic Disputes”; “Grievance Disputes”; “Recognition Disputes” and
“Disputes over Unfair Labour Practices”.
14B
. Ibid.
“Economic Disputes” are also referred to as “Collective Labour
Disputes” or “Conflicts of Interests”. These disputes seek to establish new terms
and conditions of employment or rewrite the existing terms and conditions. The
subject matter in these disputes may relate to demands for wage increases,
“fringe benefits”, better working conditions, job security, etc. If the disputants
do not adopt the “policy of Give and Take” in the Collective Bargaining Process,
a dead-lock would be imminent. Disputants may have recourse to the
Conciliation Machinery to pave the way for the settlement of the extant dispute.
It is said that the issues in Interest Disputes “ are greatly ‘ compromisable’ and
therefore, lend themselves best to conciliation”.16 It should, however, be noted
that although the terms and
conditions prevailing in comparable industrial units may provide guidelines in
the negotiation process, the disputants “cannot refer to any definite, mutually
binding standards”.16A
“Conflict of Rights” arise during the implementation of the Collective
Bargaining Agreement, that is, at the “Contract Administration Stage”.
15 . Roy Lewis, “Final Offer Arbitration: the Anglo-American Dimension”
supra
note 11.
16 . I.L.O. Conciliation and Arbitration of Industrial Disputes in English Speaking
Countries of Africa 14, Record of Proceedings of, and Contribution
submitted to an African Regional Seminar, Labour-Management Series
No.37, 1970.
16A.
Ibid.
These disputes are also known as “Grievance Disputes” or “Legal Disputes”.
The grievance may be that of an individual worker or a group of workers who
are similarly situated and aggrieved and may relate to an act or acts of the
employer, for example, suspension, retrenchment, discharge, dismissal of a
worker which the worker or his trade union regards as Unfair Labour Practice
on the part of the employer.
Grievance Disputes may also arise over the conflicting interpretations
accorded to certain clauses in the Collective Bargaining Agreements by the
parties. These disputes, therefore, are also branded as “Interpretational
Disputes”.
It has to be noted that workers’ grievances stem from “an alleged
violation of an existing right or an alleged unfair treatment by the employer, as
judged by certain rules”.17 In order to determine whether an
existing right has been infringed or the ‘treatment’ meted out by the employer is
‘unfair’, the provisions in the Collective Bargaining Agreement, the established
customs, practices and ‘usage’ in the industrial unit concerned, may provide the
norms or standards. Therefore, in the area of Grievance or Right Disputes,
unlike in respect of “Interest Disputes”,

17
. Id., at 15.
“there is some more or less a definite standard for settling [the dispute]”.1™
Trade Unions, today symbolise workers’ right to organize and to put-forth
their demands collectively. When freedom to organize is interfered with, the
workers may raise a dispute alleging violation of their organizational rights and
accuse the employer of “Unfair Labour Practices”. Further, when a
representative union is denied Recognition for the purposes of Collective
Bargaining, the union aggrieved may raise a Recognition Dispute. It may be
argued that denial of Recognition to a majority union smacks of Unfair Labour
Practice on the part of an employer who is hostile to workers’ organization.
Thus, “Organizational Disputes”, “Unfair Labour Practices Disputes” and
“Recognition Disputes” do seem to overlap.
It is difficult to state categorically the stage at which the system of
Arbitration can be pressed into service. Thus, in U.S.A., Arbitration is invoked
at the contract implementation stage, that is, when the parties to the collective
bargaining agreement raise disputes asserting rights or compelling the
performance of obligations arising out of the provisions in the collective
bargaining agreement. Arbitration in those circumstances may be regarded as
Grievance Arbitration because the subject matter

17 A.
Ibid.
revolves around “Grievance” or “Interpretation” of the collective bargaining
agreements.
However, in the Indian context, the parameters within which the
machinery of labour Arbitration works is very wide when compared to U.S.A.
Because, in India, there is no categorization of industrial disputes and an
arbitrator’s assistance may be sought both at the stage of Contract Negotiation
and Contract Implementation.
ADJUDICATION
INTRODUCTION
After conciliation fails, if the parties to the dispute
do not opt for voluntary arbitration to settle their dispute,
the ultimate legal remedy for the unresolved dispute is to
refer to a third party appointed by the Government. Such
method of settling the matter is known as "Adjudication". It
includes Labour Courts and the Industrial Tribunal.
Adjudication is the settlement of industrial disputes by
a Judicial forum. At the 17th session of the Indian Labour
Conference in 1959, an agreement was reached to the effect
that all disputes may ordinarily be referred to for
18
adjudication, on request from either party. But it was
found that the awards (Judgments) of the Industrial Tribunals
were often based on conflicting principles which led to

confusion and industrial unrest. Hence the Labour Appellate
Tribunal was constituted by the Industrial Disputes Act 1947,
19
and amended in 1950.
18. Government of India, Ministry of Labour, "Tripande
conclusions: 1942 - '67 11 1 1968, p.63.
19. Deputy Minister of Labour, ABID ACI in Rajya Sabha
Debats Vol.XIV, No.9, Column 214, August 9, 1956. Also
Zafar M. Shahid Siddiqic, "Development of the Law of
Strike in India", an Unpublished J.S.D. Thesis, Cornell
University, Jan.1971. pp. 87-93.
135
The Appellate Tribunal was abolished in 1956. By and
large, the Tribunal follows the directive principles
initiated in Part IV of the Indian Constitution. The
tribunals are trusted and they use their powers
20
meaningfully.
4.14 CONCEPT OF ADJUDICATION
The word "Adjudication" refers to the act or process of
adjudicating. The International Encyclopaedia of Social
Sciences defines "Adjudication" as a method of settling
controversies or disputes. It also states that the function
of adjudication is one normally belonging to the law courts;
although not all adjudications take place in the courts, and
not everything courts do can be called adjudication.

"Adjudication" or "Judgement", is defined as the application,
appropriation, or assignment, under judicial authority, of a
21
specific property to a particular person.
The process of adjudication involves the exercise of
judicial power through hearing upon an issue, receiving and
weighing of the evidence and the act of rendering judgement.
20. R.S. Kullçarni, Industrial Ad j u d i cat ion With Sp ec ial
Reference to Re-instateme, Progressive Corporation
Pvt., Ltd., Bombay, P.VII, 1973,
21. Dr. G.M. Kothari, A Study of Industrial Law",
N.M. Tripathy (P) Ltd., Bombay, 1978. 173.
136
Only industrial disputes as defined in Section 2(10) and
Section 2-A of the Industrial Disputes Act arising from
Industries' as defined in Section 2(i) of the Act can be
referred to for adjudication.
Industrial adjudication is always a matter of making
22
adjustments between two competing claims. The ultimate
object of industrial adjudication is to help the growth and
progress of national economy and it is with that ultimate
object that industrial disputes are settled by adjudication
23
on principles of fair play and justice. The judgement of
the adjudicator is called an "award".

4.15 PROCEDURE FOR RAISING A DISPUTE
An industrial dispute can be raised even by a minority
24
Trade Union against the employer. Even a Trade Union which
is not registered under the Indian Trade Union Act, 1926 can
25
raise an industrial dispute. But the dispute should be
raised by the workmen. An individual workman can raise a
dispute with regard to his dismissal, discharge, retrenchment
or termination, individually against the employer.
22. Rai Bahadur Diwan Badri Das Vs. Industrial Tribunal,
Punjab 1962 - II (L) 366 (S.C). 23. J.K. Cotton Spining
and Weaving Mills Co., Ltd., Vs.Labour Appellate
Tribunal, 1963 - II LLJ 436 (S.C).
24. 'rata Chemical Limited Vs. Their workmen-1978-II LLJ 22
25. Gamon (India) Ltd., Vs. State of Orissa and Other - 1974
-II LU. 34.
137
Since labour is in the concurrent list of the
Constitution of India, both Central and State Governments,
have jurisdication to enact labour laws and.administer them.
As for the Industrial Disputes Act, the Central Government is
the appropriate Government in respect of the industries
carried on by or under the authority of the Central
Government. The Railways Company, the Life Insurance
Corporation, Banks, Mines, Oil Fields, Major Ports and other

industries are enumerated in Section 2(a) (i) of that Act,
whereas in respect of other industries, the State Government
is the appropriate authority. That is, the Central
Government and the State Governments have their own machinery
of conciliation and machinery for enforcement of Labour Laws.
Both the Governments are vested with power to appoint
judicial forums for adjudication.
According to the existing law, an industrial dispute
cannot be taken by either party straight to the adjudication
machinery. The industrial dispute should first be presented
for collective bargaining and in case of failure of the
talks, either party can request the Conciliation Officer of
the Government to intervene. In case the Conciliation
Officer is not able to bring about a settlement of the
dispute, he has to send a report to the Government setting
forth the details of the case. The Government after
138
considering his report, may refer the industrial dispute to
the Labour Court, the Industrial Tribunal or the National
Tribunal, as the case may be, or decline to refer the same
for adjudication. Indeed, Governments have been given wider
powers to refer or not to refer, but such power has to be
exercised bonafide and on a consideration of relevant and
26
material facts. If the dispute involves a question of law
or disputed question of facts, the Government should not take

a final decision and refuse reference,as that would lie
27
within the ambit of the Industrial Tribunal. In Australia
and England where adjudication system is prevalent, the
Government does not possess the power of making reference of
28
industrial disputes for adjudication. But in India, the
Government may apprehend an industrial dispute and refer it
to adjudication. When a notice of strike or lockout is
received from a public utility service, the Government shall
refer the dispute for adjudication, not withstanding the
pendency of conciliation proceedings in respect of the
dispute covered in that notice.
26. State of Bombay and another Vs. K.P. Krishnan and
Others, 1960, (2) LLJ 592.
27. Bombay Union of Journalists Vs. State of Bombay - 1964
(1) LLG 351.
28. Santokh Rain, "Government Discretion to refer industrial
disputes for adjudication". Awards Digest - Journal gf
Labour Legislation, March and April, 1981, Vol-VII, No.
3 and 4, pp. 41-50.
139
4.16 FORMS OF ADJUDICATION
The State Government can constitute the Court of
Enquiry, the Labour Court and the Industrial Tribunal. The
Central Government is empowered to constitute the National

Tribunal in addition to the Labour Court and the Industrial
Tribunal. The Court of Enquiry should consist of an
independent person or more than one independent member, with
one of them as chairman. The constitution of the Court of
Enquiry is very rare. In Maharashtra only two references
were made to this Court, to go into the reasons for two
29
strikes. In September, 1983, the Government of India
constituted a Court of Inquiry to go into the accident which
30
occured in Horrilandih Colliery, killing 20 miners. The
Court of Inquiry is not a standing institution. It is
constituted by the Government for probing into a specific
problem. It serves as a fact-finding body to make possible
follow-up action though it cannot make binding awards.
Provision for the constitution of a Court of Inquiry is based
on a similar provision in the English Industrial Court Act,
1919.
29. R.S. Kulkarni, Industrial Adjudication With Special
Reference to Re-instatement Progressive Corporation
Pvt., Ltd., Bombay, 1973, p.63.
30. The Indian Worker' s September 26, 1983, Vol.XXI, No.52,
p.1.
140
The qualifications for a Presiding Officer of an

Industrial Tribunal are (i) experience as a Judge of a High
Court, or (ii) experience for not less than three years as a
District Judge or Additional District Judge, or (iii)
experience as a member or a chairman of Labour Appellate
Tribunal constituted under the Industrial Disputes (Appellate
Tribunal) Act, 1950 or (iv) experience as a member of any
Tribunal for a period of not less than two years. The
qualifications for the appointment of a Presiding Officer of
a Labour Court are the same as those prescribed for an
Industrial Tribunal or not less than seven years experience
in any judicial office in India or experience for not less
than five years as Presiding Officer of a Labour Court
constituted under any Provincial Act or State Act. The
qualifications for the appointment of a Presiding Officer of
a National Tribunal are that he should have been a Judge of a
High Court or haVe been a Chairman or a member of the Labour
Appellate Tribunal for not less than 2 years. The
constitution of a Labour Court or Industrial Tribunal or
National Tribunal cannot be called in question in any manner
on the ground merely of defect in the constitution of such a
court.
141
4.17 JURISDICATION OF THE COURTS
The Government will refer to Labour Court for
adjudication, an industrial dispute relating to
1. the propriety or legality of an order passed under

the standing orders
2. application and interpretation of standing orders
3. non-employment of workmen
4. withdrawal of any customary concession or privilege
5. legality of a strike or lockout, as found in
Schedule II of the Industrial Disputes Act, 1947.
In respect of Industrial disputes relating to
1. wages 2. allowances
3. hours of work 4. leave with wages
5. bonus, gratuity, provident fund
6. shift-working 7. grades of workmen
8. discipline.
9. closure of establishment or workmen and also
10. in respect of matters specified in Schedule II, the
Government may refer the matter to the Industrial Tribunal
for adjudication. If the number of workmen likely to be
affected by the industrial dispute is not more than 100, the
Government may refer the industrial dispute to the Labour
142
Court, even if the dispute pertains to Schedule III. If the
dispute is of national importance or is of such nature that
industries in more than one State are likely to be affected,
then the Central Government may refer it to a National
Tribunal, even if the Central Government is not the
appropriate Government in respect of that industry.
After referring an industrial dispute for adjudication,

Government can prohibit the continuance of any strike or
lockout, but the instance of such prohibition is very rare,
The Government frames the issues and refers the same for
adjudication and the adjudication authority has to confine
the proceedings only to the issues referred to.
4.18 EFFECTIVENESS OF THE INDUSTRIAL RELATION
MACHINERY
The whole purpose of creating the industrial relation
machinery through the Industrial Disputes Act has been the
prevention and settlement of disputes between Labour and
Management that may lead to work stoppages. In accordance
with the stated purpose a reference to the industrial
relation may be made either by the parties directly in
dispute, individually or jointl y , or by the Government
itself.
143
Once a dispute is referred to adjudication and is
pending, strikes, and lockouts are illegal. It is, thus,
possible that legal strikes and lockouts may not occur at all
if the Government is sufficiently vigiliant to intervene in
all disputes that may have occurred or have been apprehended.
Such an interpretation may mean that any breakdown of the
industrial relations machinery is solely due to the failure
of the Government in some particular respect. The Breakdown
rate is not to be interpreted as a failure of the Government
alone, but the measure of the non-fulfilment of a purpose to

which it is committed.
Data on industrial disputes referred to the industrial
relations machinery are available for the study period from
1982 to 1991. These, along with the number of conflicts and
the ratio of the latter to the former, are given in Table
4.1. This ratio shows the percentage of disputes which have
developed into conflicts, indicating thereby the extent of
failure of the industrial relations machinery in fulfilling
its stated legal obligation.
C. VOLUNTARY ARBITRATION UNDER THE ACT: SOME
HISTORICAL PERSPECTIVES
The Industrial Disputes Act, as enacted in 1947, had not incorporated
provisions relating to Voluntary Arbitration. Consequently, the Government’s
main endeavours for maintaining and restoring industrial peace were through
references of ‘existing or apprehended’ industrial disputes to the adjudicatory
authorities contemplated under the Act. Consequent upon the establishment of
the Planning Commission and the launching of the First Five Year Plan, there
was a rethink over the mechanism/s to be preferred for the resolution of
industrial disputes.
During the First Five Year Plan, the Government approached the labour
policy from two angles, namely, the welfare of the working class and
the country’s economic stability and progress.18 The Plan, inter alia, stated that
“differences should be resolved by impartial investigation and arbitration”.19
But, despite the professed governmental policy and anxiety
to encourage collective bargaining and Voluntary Arbitration, no legal sanctity
was given to Voluntary Arbitration until 1956.
Severe criticisms20 against the machineries of conciliation and
adjudication led to the introduction of section 10A relating to Voluntary
Arbitration through the Industrial Disputes Miscellenous Provisions
(Amendment) Act, 1956. This Amendment sought, though to some extent, to
accord legal sanctity to the system of Voluntary Arbitration. However, the
‘Award’ of the Arbitrator still stood on a lower pedestal than the ‘settlement’
arrived at in the course of conciliation proceedings and the Award of an
adjudicator, like the Industrial Tribunal, in so far as their binding nature was
concerned.
18 . See, Planning Commission, the first Five Year Plan , Summary 116-122 (1952.
19. Ibid.
20 . A somewhat similar scheme of settlement operating in Australia was
severely criticized as early as 1929 by a British Economic Commission
in that it
intended to consolidate the contesting parties into two opposing camps
See, Rustomji R.F., Law of Industrial Disputes In India 484-85 (2nd ed.
1964). The
I.L.O. gave renewed emphasis to such criticism. In 1951, it
recommended Voluntary Arbitration as a better method of settlement
See, Sharma G.S., “Labour Law And Labour Relations” 179 (I.L.I.,
1968).
Whatever the Government had stated in its First Five Year Plan
Manifesto in regard to its labour policy was reiterated when it embarked upon
the Second Five Year Plan. Since the Constitutional Objective has been the
establishment of a socialistic pattern of society, suitable modifications in our
labour policy had to be necessarily effected. Consequently, there was a shift in
emphasis in the Plan from statutory to non-statutory code of discipline and
greater emphasis was placed on ‘Voluntary Arbitration’ for the resolution of
industrial disputes in the event of a deadlock in the collective bargaining
process. The Code of Discipline, 1958, therefore, reflected the faith of the
employers and workmen in the system of Voluntary Arbitration and enjoined
them to resort to it in case the collective bargaining and conciliation processes
failed. The 1964 Amendment22 sought to place the arbitrator’s award at par
with the
award of an adjudicator and also the settlement arrived at in the course of
conciliation proceedings.23
21. The Code enjoins on parties to refrain from taking unilateral action in
connection with any industrial matter, to utilize the existing machinery
for settlement of disputes with the utmost expedition, and to abjure
strikes and lock-outs without notice and without exploring all avenues
of settlement. It also discourages recourse to litigation and recommends
that disputes not mutually settled should
be resolved through voluntary arbitration, see Report of National
Commission on Labour 346 (1969). For details regarding the Code of
Discipline in Industry,
see Appendix IV, id.
22 .S.10A (3A).
23. S.18 (3).

The Third Five Year Plan sought to ensure that the Voluntary Arbitration
as a mode of settlement of industrial disputes was taken to greater heights. The
Plan laid stress on “more intensive efforts at securing agreement for reference of
dispute to voluntary arbitration”24 by emphasizing that it should ultimately
replace adjudication. It was stated that “ways [would] be found for increasing
the application of the principles of voluntary arbitration”. Further, it was
asserted that “employers should show much greater readiness to submit disputes
to arbitration than they have done hitherto [and] this has to be the normal
practice in preference to recourse to adjudication [being] an important obligation
accepted by the parties under the Code”.26 A survey of labour policy during the
Third Plan
reveals that the Plan laid greater emphasis on Voluntary Arbitration as a mode
for settling industrial disputes.
The reiteration of the Government’s labour policy enunciated in the Third
Plan is easily discernible in the Fourth Five Year Plan. Emphasising the
significance of Voluntary Arbitration in the settlement of industrial disputes, the
draft outline of the Plan stated:

24 . See, the proposal on Labour Policy suggested for inclusion in the Third
Five Year Plan as approved by the Standing Committee at its 18th
Session.
25. See, Planning Commission, Third Five Year Plan 254.
26. Ibid.
While the provisions of ... [the Act relating to adjudication] ...
are available as a last resort, it is recognized that greater emphasis
should be placed on collective bargaining and on strengthening the
trade union movement for securing better labour management
relations, supported by recourse in the large measure to voluntary
arbitration. The Code of Discipline... stressed the need to avoid
unilateral actions by employers as well as workers [and exhorted
the parties] to settle disputes and grievances through mutual
negotiations, conciliation and voluntary arbitration....27
Further, the settling up of the National Arbitration Promotion Board [herein
after “NAPB”], on the recommendation of the National Commission on
Labour, in 1969, is a vital development in the field of labour policy and
administration in general and Voluntary Arbitration in particular.

Encouragement for mutual settlement through Collective Bargaining and
Voluntary Arbitration has been emphasised in the Report by the
Commission. The Indian Labour Conference, in 1962, reiterated the need
for a wider acceptance of this method. Further, the Industrial Truce
Resolution, in the same year, while re-emphasising the importance of
Voluntary Arbitration, also specified certain items as amenable to the
arbitration process, namely, complaints pertaining to dismissal, discharge,
27
. See, The Fourth Five Year Plan Draft Outline.
victimization and retrenchment of industrial workmen when the same could not
be settled mutually.
In spite of all these efforts, Voluntary Arbitration has not taken deep roots
in the industrial arena. Factors responsible, as cited by the Commission, are:
a. easy availability of adjudication in case of failure of negotiations;
b. dearth of suitable arbitrators who could command the confidence of both
the parties;
c. absence of recognized unions which could bind the workers to common
agreements;
d. legal obstacles;
e. the fact that in law no appeal was competent against an arbitrator’s
award;
f. absence of a simplified procedure to be followed in voluntary arbitration;
and
g. cost to the parties, particularly, workmen.28
28. Report of National Commission on Labour 324 (1969).

The National Arbitration Promotion Board, a tripartite body, has been
assigned the task of reviewing the system of Voluntary Arbitration, examine
factors that have come in the way of its wider acceptance and suggest measures
to make the system more popular. It has to draw up a Panel of arbitrators and
evolve and lay down the norms and procedures for the guidance of the
arbitrators and parties to the arbitration agreement. It has to examine the causes
for delay in the pronouncement of the arbitration awards and endeavour to
eliminate the same. Further, it has to, in the light of tripartite agreements,
periodically revise and prepare the list of disputes amendable to resolution by
arbitrators.29
The National Commission on Labour has observed that the development
of collective bargaining, the general acceptance of the principle of Recognition
of representative unions and a change in the management’s attitude may pave
the way for wider acceptance of Voluntary Arbitration. The NAPB may have a
better chance of success in the task of promoting the idea. It should pay special
attention for preparing and building up suitable and acceptable panels of
arbitrators for different sectors like jute, textile, transport, insurance, banking
industries, etc., and publicise the same among the interested parties and groups.
29 . Ibid.
During the Fifth Plan period, no major or significant change in the
Government’s Labour Policy is noticeable. However, an account of
governmental efforts, in the development, progress, working and administration
of the NAPB is discernible. Thus, most of the State Governments and the Union
Territory administrations have set up Arbitration Promotion Boards and the
States of Assam, Orissa and Himachal Pradesh have made some other
institutional arrangements such as State level implementation and evaluation
Committees and Labour Advisory Committees to popularize the system of
Voluntary Arbitration.30
Till 1977-78, the Ministry of Labour was maintaining a panel of
arbitrators consisting of 422 names as recommended by the State Governments,
employing Ministries, Central Labour Commissioners’ Organisation, Employers
and Workers’ Organisations, etc. This panel provided detailed information
relating to the qualifications and work experiences of the panelled arbitrators.31
It should be pointed out that in the Sixth and Seventh Five Year Plan
Reports and, also, in the Draft Outline pertaining to the Eight Five Year Plan,
the Government has not expressed its views over the merits or
30 .Indian Labour Year Book 1975 and 1976 (1979).
31 .Government of India, Annual Report of Ministry of Labour, 1977-78, p.31.

otherwise of the system of Voluntary Arbitration. The silence on the part of the
Government in the Reports, referred to, in respect of Voluntary Arbitration
cannot be, it is submitted, interpreted as signifying that the Government has,
after second thoughts, pushed Voluntary Arbitration into an obscure place. On
the other hand, it would be sensible to infer that the Government, having
repeatedly asserted about the merits and advantages of the system of Voluntary
Arbitration, has not found it necessary to repeat its views which are, by now, so
well-known.
The observations of the Government in its Draft ( Nineth Five Year Plan,
1997-2002 ) warrant attention and critical examination. It has been stated that
the Government has, increasingly, donned the role of arbitrator after
Independence and that it could be effective only in organized sectors.32 It has
been further averred that Government’s role as an arbitrator in respect of
industrial disputes arising in the public sector industries should be drastically
reduced.33
As already pointed out, the Act provides for Voluntary Arbitration and the
disputants may choose the presiding officer of an adjudicatory body set up
under the Act as an Arbitrator. These adjudicatory bodies are

32. Supra note 1 at 408.
33. Ibid.
independent quasi judicial bodies which would acquire jurisdiction to
adjudicate, normally, on a written reference of an industrial dispute by the
Appropriate Government.34 The referral power the Appropriate
Government enjoys does not confer upon it any jurisdiction to play the role of
an arbitrator. So, the statement that after Independence the Government has
increasingly played the role of an arbitrator should only mean the exercise of its
power under the Act to refer industrial disputes to compulsory arbitration
which, in the context, should mean compulsory adjudication. This conclusion is
buttressed by the exhortation in the Draft to the effect that “[b]oth the
employers and employees can select a mutually acceptable arbitrator,
independent of the Government, on a case to case
basis”.35 So, the Government’s desire and preference for Voluntary
Arbitration as an expedient machinery for resolving industrial disputes is easily
discernible.
Further, the disinvestment policy being advocated and pursued by the
Government pursuant to its resolve to implement the New Economic Policy
heralding Liberalisation, Privatisation, Globalisation has paved the way for the
establishment and growth of manufacturing and service units in the

34. S.10(1).
35 . Supra note 32.

Private Sectors which would not have work-forces of the size or the strength of
organized labour forces noticed in public sector industries like Banking,
Insurance, Communication, Transport etc. This, probably, explains the
Governmental exhortation to the partners in production to adopt and encourage
Voluntary Arbitration for resolving disputes that may erupt in the industrial
units.
D. VOLUNTARY ARBITRATION: STATUTORY PROVISIONS VIS-A-
VIS JUDICIAL DICTA
In 1956, for the first time, the provisions relating to ‘Voluntary
Arbitration’ were incorporated under the Act through an Amendment. Section
10A (1) provides that the employer and the concerned workmen, may, at any
time, by a written agreement, refer their dispute, existing or apprehended, to an
arbitrator. It should be noted that mere consent of the parties to refer a non-
industrial dispute to Voluntary Arbitration under section 10A cannot validate the
reference.36 So, existence or apprehension
of an industrial dispute is a sine qua non to set the machinery of Voluntary

36 . S.10A (1). Further, suppose the parties in the course of conciliation
arrive at an agreement to refer their dispute to Voluntary Arbitration.
Such an Agreement, the Orissa High Court has declared, does not
amount to a settlement. It can only be an agreement to refer the dispute
to arbitration. It is so, because, the Court has observed, the dispute
subsisted even after the parties agreed to refer the same to Arbitration.
See Rasbehary Mohanty v. Presiding Officer, (1974) 11 L.L.J. 222, 226
(Ori.).
Arbitration into motion. The term “at any time” in section 10A (1) does not
mean that reference to ‘Voluntary Arbitration’ can be subsequent to a reference
made by the Appropriate Government to an adjudicatory body
under section 10 (1) of the Act.37 So, the implication is, if the parties desire
to have recourse to Arbitration, they should act prior to the exercise of the
referral power by the Appropriate Government under section 10.
The Legislature by imposing restriction upon the time within which the
parties can exercise their right to refer the dispute to Voluntary Arbitration under
the Act, it is argued, has placed this machinery on a lower footing, because,
under the Act, if the parties intend to opt for Voluntary Arbitration, they should
act before the Appropriate Government refers the same to one of the
adjudicatory authorities provided under section 10 (1).
But, section 100 (3) of the Industrial Relations Bill, 1978, which has lapsed,
had sought to place Voluntary Arbitration at par with compulsory
Adjudication.39 The Bill had provided that despite a reference made by the
Appropriate Government under section 10 (1), the disputants could still invoke
section 10A and get their dispute arbitrated upon. Incidentally,

37 .S.10 (1), (1-A), (6).
38 . Srivastava S.C., “Voluntary Labour Arbitration: Law And Policy”, 23 J.I.L.I.
(1981) 349, at 359.
39. Ibid.
under section 14340 of The Indian Labour Code, 1994, the time-bound
restriction, referred to above, has been done away with. Here, the question
would be: can there be parellel proceedings both before the Tribunal and 10A
Arbitrator on the same issue and at the same time? That is, suppose a DA dispute
is raised by a Trade Union and is referred to a Tribunal by the Appropriate
Government. In the meantime, the disputants on their own volition refer the
same dispute to 10A Arbitrator also. In such a situation, whether 10A
Arbitrator’s Award should be allowed to prevail over the Adjudicator’s Award or
vice versa? The principle of ‘voluntarism’ underlying the Arbitration Process
compels the discerning to conclude that 10A Arbitrator’s Award should
necessarily have precedence over the Adjudicator’s Award. Thus, if the phrase
“at any time”, in section 10A is to be deleted then the law should expressly
provide that the Arbitrator’s Award shall have precedence wherever
Adjudicator’s Award is at variance or not in conformity with the award of the
Arbitrator.
However, in the light of the existing law on the point, referred to above, it
would be more appropriate to argue that even in the absence of the
40 . S.143 (1) “where any dispute exists or is apprehended and the employer
and the employees agree to refer the dispute to arbitration they may,
by a written agreement, refer the dispute to arbitration and the

reference shall be to such person or persons as an arbitrator or
arbitrators as may be specified in the arbitration agreement..., The
Indian Labour Code, 1994 (Draft).pp 100, 101.

provisions mentioned above, top priority has been given under the Act not for
adjudication but for Arbitration as the parties are at liberty to choose Arbitration
first and if they act promptly i.e., before the Appropriate Government exercises
its discretionary power under section 10 (1), there would not arise any necessity
for the Appropriate Government to act under section 10. Moreover, the
Appropriate Government would be reluctant to act in the absence of a real threat
to industrial peace which affects the community at large. This argument is
further substantiated when we refer to the provision41 of the 1988 Amendment
Bill which also lapsed due to the
fall of the Government. The provision, being referred to, forbid the disputants
from resorting to strike or lockout even when one of the parties was willing to
opt for Voluntary Arbitration while the other one was not so inclined.
The disputants may opt for the services of the Presiding Officer of one of
the adjudicatory bodies under the Act to act as an Arbitrator. If the parties fail to
agree over the choice of the arbitrator/s, they may authorise the National
Arbitration Promotion Board to nominate one or more arbitrators. As per the
recommendations of the National Commission on

. See, e.g., S.23-“General Prohibition of Strikes and Lockouts” in The
Trade Unions And The Industrial Disputes (Amendment) Bill, 1988.

Labour, this task should be entrusted to the Industrial Relations Commission to
be established through a suitable enactment.42
If the parties have chosen an even number of arbitrators, the Act
mandates that they shall provide for the appointment of an umpire, whose
decision, when arbitrators are equally divided in their opinion, shall prevail.43
Prior to the insertion of sub-section (1-A) under section 10A,
there was no provision to resolve the matter if the arbitrators were equally
divided in their opinion. The only alternative was to refer the issue to one of the
adjudicatory authorities under the Act.
It is incumbent upon the parties to obtain the consent of the arbitrators in
writing and forward the same to the concerned authorities mentioned in the
Act.44
The Arbitration Agreement should not only be in writing but also it
should be in ‘Form-C’.45 Further, the Arbitration Agreement should,
specifically, contain the name of arbitrator(s)46 and be signed in the
42 . Supra note 28 at 334.

43. S.10A (1-A).
44 .S.10A (1) read with Rule 7 of the Industrial Disputes (Central) Rules, 1957.
46
. Ibid.
prescribed manner47 by the parties to the industrial dispute. Rule 8A of the
Industrial Disputes (Central) Rules, 1957 provides that the Arbitration
Agreement should be signed by the employer and any officer of a trade union
and five authorised representatives of the workmen. There are clouds of
conflicting opinions over this issue which need be discussed in the light of
judicial pronouncements.
According to a provision of the Industrial Disputes (Bihar) Rules, 1961,
which is in pari materia with the Industrial Disputes (Central) Rules, 1957, the
Arbitration Agreement on behalf of the workmen was required to be signed both
by the President and the Secretary of a trade union.48 In State of Bihar v.
Nathuni Pandey,49 the issue before the Patna High Court was, whether the
attestation of the Arbitration Agreement by the President alone on behalf of the
trade union would suffice to validate the agreement. The High Court ruled that
the agreement was invalid for non-compliance with the mandatory provisions of
the Act.50
47. Id., Rule 8.
48 . Rule 8 (b) of the Industrial Disputes (Bihar) Rules 1961.
49 . (1973) Lab. I.C. 1492 (Pat.).
50 . Id, at 1495.
But, in Faridabad Glass Works (P) Ltd., v. Presiding Officer, Industrial
Tribunal,51 on an identical issue, the Punjab High Court has taken an entirely
different view. In the instant case, the Arbitration Agreement, which had to be
signed both by the President and Secretary of the trade union, was signed only
by the General Secretary. The Court observed that this defect could be removed
by getting the agreement signed by the President also.52
Similarly, a liberal approach was adopted by the Delhi High Court in
Mineral Industry Association v. Union of India, where the Court has declared
that in case the employer is a body corporate, there would be “sufficient
compliance” if the agreement is signed by an agent of such an employer or by
an attorney or a duly authorised agent on behalf of the employer - a body
corporate.54
The Act mandates that a copy of the Arbitration Agreement be forwarded
to the Conciliation Officer and to the Appropriate Government.55

31 . A.I.R. 1965 (P&H) 498.
52 . Id., at 502.
53. (1970) Lab. I.C. 837 (Del.).
54 . Id., at 841.
55. S.10A(1).
The Appropriate Government is required to publish the same within one month
from the date of its receipt in the Official Gazette.56
A plain reading of the statutory provision, that is 10A (3), indicates that
the statutory requirements are mandatory in nature. Do the judicial opinions
support this view? Let us examine. To start with, in Landra Engineering and
Foundry Works v. Punjab State,51 the Punjab and Haryana
CO
High Court, relying on Remington Rand of India v. The Workmen, ruled that
although the Arbitration Agreement has been published two weeks beyond the
time prescribed in the Act, i.e., after the expiry of thirty days, such delay would
not matter because “the provisions as to publication within one month are
directory and not mandatory59
The Madhya Pradesh High Court, however, in Modern Stores v.
Krishnadashas held that the requirements of section 10A (3) are partly
mandatory and partly directory. The Court declared that on a proper
construction of the section the condition regarding publication of the Arbitration
Agreement in the Official Gazette is a sine qua non but the
56 . S.10A (3).
57 . (1969) Lab. I.C. 52 (P & H).
58 . A.I.R. 1968 S.C. 224.
59 . Supra note 57 at 54. [Emphasis supplied].
60 . Modern Stores (Cigarettes) v. Krishnadas Shah, (1970) Lab.I.C. 196, 203
(M.P.) (D.B.) [Emphasis supplied.]

other requirement, namely, its notification within one month from the date
of its receipt, is only directory and not mandatory.61
On the contrary, in K.P.Singh v. Gokhale,62 the Madhya Pradesh High
Court has held that “arbitration agreement between employer and employees
regarding industrial dispute could not be a private arbitration agreement but
would necessarily be one under section 10A (1), specially
when form ‘C’ was used Further, according to the Court, “an award
passed there-under would be invalid if the mandatory procedure prescribed by
sub-section[s] (3) and ... (4) of section 10A of the Act is not followed”.64
Similarly, in Ved Prakash v. Ram Narain,6S the Madhya Pradesh High
Court has held that section 10A can have no application to an Arbitration
Agreement which does not comply with the statutory requirements laid down in
sub-sections (2) and (3).66

61 . Id., at 203. See, Aftah-e-Jadid v. Bhopal Shramjivi Patvakar Singh, 1985 1 L.L.J.
272, 275 (M.P.)
62 .(1976) Lab. I.C.1375. See Kathayee Cotton Mills Ltd., v. District Officer
And Others, (1989) 1 L.L.J. 417, 419 (Ker.)
63. K.P.Singh v. Gokhale, id., at 1375.
64 . Ibid.
65 . 1970 1 L.L.J. 125 (M.P.)
66. Ibid.
The confusion engendered by the conflicting decisions of the High
Courts, cited above, seems to have attracted the attention of our Apex Court
in Karnal Leather Karmachari Sanghatan. In Karnal, certain disputed
matters were referred to Voluntary Arbitration. The Arbitration Agreement,
however, was not published by the Appropriate Government in the Official
Gazette before the award was pronounced. In the meanwhile, the Government
had also referred some of the disputed issues to a tribunal and a Letter Patent
Appeal relating to the same was pending. In the circumstances, the Supreme
Court, inter alia, directed that the Arbitration
Agreement be published in the Official Gazette within four weeks. Further,
the Court observed:
... When a dispute is referred to arbitration, it is ... necessary that
the workers must be made aware of the dispute as well as the
arbitrator whose award ultimately would bind them. They must

know what is referred to arbitration, who is their arbitrator and
what is in store for them. They must have an opportunity to share
their views with each other and if
necessary to place the same before the arbitrator. ... The arbitration
agreement must therefore be published before the
67
. Karnal Leather Karmachari Sanghatan v. Liberty Footwear Co., (1990) Lab.
I.C. 292 (S.C.).

arbitrator considers the merits of the dispute. Non-compliance of
this requirement would be fatal to the ar bitral award.6*
A scrutiny of the decisions, cited above, would make anyone wonder why the
Courts, inspite of intelligible mandatory provisions in the Act, have, in the guise
of interpretative endeavours, instead of clarifying the issue, have rendered it
complicated. In the opinion of one High Court “time of publication of
arbitration agreement is “irrelevant”, and an other declares, “publication is a
must, especially, when Form ‘C’ is followed”, and, yet an other High Court, on
the issue, whether Form ‘C’ has to be strictly abided by, declares that “ if
substantial compliance is established it is sufficient”. In this context, the Apex
Court’s ruling, in Karnal, that the “arbitration agreement should be published
before the merits of the dispute are considered by the arbitrator”, appears to be
more pragmatic.
It is submitted that the provision under 10A (2) to the effect that the
Arbitration Agreement should be in the statutorily prescribed form and signed
by the appropriate parties and the requirement under section 10A (3) that the
Arbitration Agreement should be published by the Appropriate Government in
the Official Gazette within one month from the date of receipt are clear,
unambiguous and do not permit the reviewing High Courts

68
. Id., at 307 [.Emphasis supplied.]
to go on an interpretational expedition. Insistence by the Courts that the parties
to the Arbitration Agreement and the Appropriate Government are obliged to
honour the statutorily prescribed conditions would not only have eliminated the
avoidable confusion created by the Court’s Decisions, referred to above, but
also, would have promoted the rule of law, that is, acting according to the
intelligible statutory dictates, especially, when such compliance would never
have frustrated the statutory objects.
Parties being aware of the nature of the dispute in which they are
involved, should be genuinely interested in having their dispute arbitrated upon
expeditiously and, at the same time, be concerned about the better functioning of
Voluntary Arbitration machinery. But, the fact that the parties have often
allowed their dispute to traverse to the High Court-the second highest judicial
authority in the hierarchy of our judicial system -,on trivial issues, may compel
the concerned to question the integrity and honesty of the parties opting for
Voluntary Arbitration. Prudence, therefore, dictates that the disputants should
avoid unnecessary complications by complying with the statutory mandate
without destroying the underlying legislative intent. For example, if the Statute
dictates that ‘signature of both the Secretary and President of trade union are
necessary’, or ‘signature of either of them would be sufficient compliance’,
then, in the former case signatures of both must be taken and, in the latter, it
would
suffice if either of them signs. Because, if the Arbitration Agreement is
attacked inspite of non-compliance with clear statutory dictates,the main
object of expeditious resolution of the dispute would remain illusive.
Section 10A (3A) is of much significance in the Arbitration process
carved out under the Act. It reads:
... Where an industrial dispute has been referred to arbitration and
the appropriate Government is satisfied that the persons making the
reference represent the majority of each party, the appropriate
Government may, within [one month from the date of the receipt of
the arbitration agreement], issue a notification in such manner as
may be prescribed; and when any such notification is issued, the
employers and workmen who are not parties to the arbitration
agreement but are concerned in the dispute, shall be given an
opportunity of presenting their case before the arbitrators [s]__

When the above sub-section read with section 18 (3), quoted below, one
should conclude that the legislature has sought to equate the arbitrator’s
award with that of an adjudicator in certain situations. The relevant portion
of section 18 (3), from the point of view of our present study reads:
... [A]n arbitration award in case where a notification has been
issued under sub-section (3A) of Section 10A ... shall be binding
[like the award of the adjudicatory machinery] on:

(a) all parties to the industrial dispute;
(b) all other parties summoned to appear in the proceedings as
parties to the dispute, unless the ... arbitrator ... records ...
that they were so summoned without a proper cause ;
(c) where a party referred to in clause[s] (a) or ... (b) is an
employer, his heirs, successors or assigns ...;
(d) where a party referred to in clause[s] (a) or ... (b) is composed
of workmen, all persons ...employed in the establishment or
part of the establishment ... to which the dispute relates on the
date of the dispute and all persons who subsequently become
employed in that establishment or part.
Thus, the Act provides an opportunity to workers who are not parties to the
Arbitration Agreement but are concerned in the dispute to present their case
before the arbitrator. Such workers, by virtue of section 10A (3A), would be
bound by the Arbitration Award.
The principle of ‘Voluntarism’ is the foundation on which the machinery
of Labour Arbitration is built. Therefore, can it be argued that with a view to
extend the scope of Arbitration Award through a 10A (3A) notification an
element of compulsion in respect of the other minority

unions functioning in the industrial establishment has been introduced? Would
not such ‘compulsion’ run counter to the underlying spirit of voluntarism? This
line of argument is dismissible in the light of the object of the Act, in general,
and the underlying purpose behind the incorporation of sub-section (3A), in
particular. Moreover, in the modern state of affairs, even the Fundamental Rights
guaranteed under the Constitution are subjected to reasonable restrictions. It is,
therefore, incorrect to consider the right conferred upon the disputants in section
10A of the Act to opt for Voluntary Arbitration as an absolute, unbridled and
unchannelised right.
Apart from the above, what has to be pointed out is, the substantive
provision, viz, 10A (3A) uses ‘may’, while Rule 8A, a piece of Delegated
Legislation, uses the word 'shall’. Rule 8A reads:
“Where an industrial dispute has been referred to arbitration and
the central government is satisfied that the persons making the
reference represent the majority of each party, it shall publish a
notification....”
The use of the word “shall” in Rule 8A should be acceptable since the
Appropriate Government would not be able to exercise its power to forbid

the continuance of a strike or lockout under section 10A (4A)69 unless 10A
(3A) notification has been issued.
With a view to prevent the parties from being exposed to the
cumbersome, lengthy and expensive civil litigation, the legislature, under
section 10 (5), declares that the provisions of The Arbitration Act, 1940 are
inapplicable to ‘Voluntary Arbitration’ contemplated under the Act. A
Division Bench of the Calcutta High Court, in Hindustan National and Glass
Industries™ has ruled that an application under section 30 of the
Arbitration Act challenging the award of an arbitrator under section 10A is

69 “Where an industrial dispute has been referred to arbitration and a
notification has been issued under sub-section (3-A), the appropriate
Government may, by order, prohibit the continuance of any strike or lockout
in connection with such dispute which may be in existence on the date of the
reference”. Thus, 10A (3A) notification should precede the order for
prohibiting the continuance of strike or lockout and to issue 10A (3A) the
persons making the reference to the arbitration should represent the majority
of each party. But the irony is neither the Industrial Disputes Act, 1947 nor
the Trade Unions Act, 1926 provides for a mechanism to determine the
majority status or the representative character of a trade union. Also, there is
no consensus over the method to be followed to carry on this task. The
Indian National Trade Union Congress- a mouthpiece of Congress-I party
strongly supports “Verification of Fee-paying Membership”, whereas, the
All India Trade Union Congress along with other left wing Trade Union
Organizations recommend the “Secret Ballot”. In the Trade Union And The
Industrial Disputes Amendment Bill, 1988, the Parliament did seek to
provide for both “Verification by the Fee Paying Membership” and “Secret
Ballot” methods in certain situations under sub-section 6 of section 14A.
Due to change in the Government, the Bill lapsed. Consequently, the matter
has remained unsettled. A prompt meaningful legislative response is needed,
at the earliest.
70 . Hindustan National and Glass Industries v. S.N. Singh, 1982 1 L.L.J. 168 (Cal.)
not amenable to any provisions of the civil law but is subject only to the
provisions of the Industrial Disputes Act, 1947.71
At this juncture, it should be noted that the Arbitration Act, 1940, has
been repealed and replaced by the Arbitration and Conciliation Act, 1996.
E. A REVIEW OF 10A ARBITRATOR’S PROCEDURES, STATUS AND
POWERS
At the outset, certain queries need be raised. Since the Act, under
certain circumstances, equates the award of the 10A Arbitrator with that of
the adjudicatory authority, can we presume that thelOA Arbitrator is at
par
with the adjudicator? Does he enjoy the same powers under the Act as the
Presiding Officer of Labour Court, etc.,1 Can 10A Arbitrator, in the case of
disciplinary dismissals, order reinstatement with or without back wages72

71. Id., at 170.
72 . S.ll-A. Powers of Labour Courts, Tribunals and National Tribunals to give
appropriate relief in case of discharge or dismissal of workmen- Where an
industrial dispute relating to the discharge or dismissal of workman has
been referred to a Labour Court, Tribunal or National Tribunal for
adjudication and in the course of the adjudication proceedings, the Labour
Court, Tribunal or National Tribunal, as the case may be, is satisfied that the
order of discharge or dismissal was not justified, it may, by its award, set
aside the order of discharge or dismissal and direct reinstatement of the
workman on such terms and conditions, if any, as it thinks fit, or give such
other relief to the workman including the award of any lesser punishment,
in lieu of discharge or dismissal as the circumstances of the case may
require:
Provided that in any proceeding under this 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 relation to the
matter.
since 10A Arbitrator does not find a place in the scheme of section 11 A?
Is the 10A Arbitrator invested with the state’s inherent judicial power? Whether
the Arbitrator’s award is amenable to the appellate jurisdiction of the Supreme
Court under Article 136?73 Should the Arbitrator’s award be
accompanied by reasons? Does the Appropriate Government enjoy the power
under the Act to modify the Arbitrator’s award or shorten or lengthen the period
of operation of such an award, as it can, in respect of an award rendered by an
adjudicatory authority?
In order to find out the answers to some of the foregoing questions, one
has to necessarily refer to sections 11 and 11A of the Act.
Section 11 (1) grants procedural flexibility to the 10A Arbitrator. It lays
down that 10A Arbitrator shall follow such procedure “as he may think fit”. In
K.P.Singh v. Gokhale,74 a Division Bench of the Madhya Pradesh
High Court has observed that section 11 prescribes the procedure to be followed
by the Conciliation Officer, Board, Labour Court and Tribunal but

73 . Art. 136 “Special Leave to appeal by the Supreme Court-(l)... the Supreme
Court may, in its discretion, grant special leave to appeal from any
judgment, decree, determination, sentence or order in any cause or matter
passed or made by any... tribunal in the territory of India...”, quoted in
Seervai, H.M., Constitutional Law of India A-39 (vol.l, Fourth (Sliver
Jubilee)edn, 1991.)
74 . Supra note 59.

permits the Arbitrator to follow his own procedure. Further, according to the
Hon’ble Court, “it is certainly in consonance with the principles of arbitration”.
76
Justice Rohatagi, in Daily Aljamiat v. Gopinath,77 has opined that the
arbitrator is not bound by any particular procedure... In the last analysis he is
master of procedure and on law and facts”.
No doubt, under the Act, the Arbitrator is free to evolve his own
procedure. But, such procedure should not only conform to the statutory
provisions and the relevant Rules made thereunder, but also, should be in
consonance with the principles of Natural Justice. The question then would be:
Whether the 10A Arbitrator’s Award can be quashed on procedural grounds?
The 10A Arbitrator’s Award, according to a Division Bench of the Patna
High Court, in N.P.C.. Corporation v. Their Workmen, cannot be called in
question either on procedural grounds or on the fact that a particular criterion
has not been kept in view by the arbitrator while making
75. Supra note 59 at 128.

76. Ibid.
77 .(1977)Lab. I.C. 1353 (Del.)
78. Id., at 1356.
79 .(1970) Lab. I.C. 907 (Pat.)

the award. The reason is, it is the joint agreement arrived at by the parties that
invests the arbitrator with the authority to settle the dispute. The arbitrator,
undoubtedly, is expected to do substantial justice to the parties. Therefore, his
Award would be vitiated if he is guilty of misconduct or has exceeded his
jurisdiction or has not heard the parties or failed to determine
an important question referred to him.80
It may be interesting to note that the Supreme Court, in Nani Gopal
Sarkar v. Heavy Engineering Corporation Ltd.,81 has ruled that a petition
challenging the 10A Arbitrator’s Award for non-compliance with the
statutorily mandated procedure could be dismissed only when the parties have,
at the outset, complained about the breach of procedure. Therefore, if a disputant
wants to challenge the validity of the Arbitrator’s Award on procedural grounds,
such a plea, according to the Supreme Court, ought to be taken at the initial
stage; otherwise, the Court would not take into
account this contention while deciding the case. Here, the question is, taking
into account the ‘voluntary’ nature of the Arbitration Process that demands an
informal procedure to be adopted in the course of Arbitration,

80 . Id., at 913.
81 .(1990) Lab. I.C. 1221 (S.C.).
82 . Id., at 1222.
how far is the Supreme Court right in Nani Gopal Sarkar? Because, when an
informal procedure is being followed, naturally, some variance can be witnessed
not only from case to case but also from person to person acting as arbitrator.
It may be noted that the parties’ preference to Arbitration implies the
avoidance of adjudication. When they voluntarily opt for Arbitration and choose
an arbitrator of their choice, the implication is that they recognize his procedural
fairness, integrity and honesty. Hence, attacks on Arbitrator’s Awards on
grounds of procedural infirmity should not, normally, be entertained unless the
procedural format of the arbitrator is manifestly unfair. Further, it is respectfully
submitted that the Judiciary’s reluctance to interfere with the Arbitrator’s Award
impugned on the ground of non-compliance with the procedure, as demonstrated
by the decision of the Patna High Court in N.P.C. Corporation, may provide a
fertile ground for the Arbitration machinery to blossom in the arena of Labour-
Management Relations.
The proceedings before the Labour Courts, Industrial Tribunals or
National Tribunals, normally, should be held in public. If the situation so
demands, the concerned authority may direct that the proceedings be held in
Camera. But, such a power is not vested in the 1OA Arbitrator.83 Further, the
Presiding Officers of a Labour Court, etc., after serving reasonable notice upon
the concerned, may enter the premises for the purpose of inquiry into any
existing or apprehended industrial dispute. Such a power is not conferred upon
the 10A Arbitrator under the Act.84
Similarly, some of the powers of a Civil Court such as, enforcing the
attendance of any person and examining him on oath; compelling the production
of documents and material objects; issuing commissions for the examination of
witnesses have been conferred upon the adjudicatory bodies, under section
11(3). Under this section, ‘Arbitrator’ is conspicuously missing.85 However,
under the relevant Rules, the 10A Arbitrator may accept, admit or call for
evidence at any stage of the proceedings before him86 and may also administer
an oath.87 Further, according to Rule 17, the
Labour Courts, etc., may issue summons which ought to be in Form-D.
Although the word Arbitrator is expressly excluded under Rule 17, the same has
found its way into Rules 18 and 20 which deal with the service of
84
85
3 86
8
R. 30.
S. ll (2), read with
R.23. S.ll (3), read
with R.24. R.15.
R. 16.
summons and the manner in which they have to be served in certain situations.
The Act empowers, inter alia, the Presiding Officer of the Labour Court,
Tribunal, etc., to appoint one or more persons having special knowledge of the
matter under consideration as assessor/s to advise them but the Arbitrator does
not have any such power under the present law.88 In
this regard, it is pertinent to take note of section 26 of The Arbitration And
Conciliation Act, 1996 which empowers the Arbitral Tribunal to appoint one or
more experts to report to it on specific issues to be determined by the authority
in the absence of any agreement by the parties to the contrary. Because, at times,
the disputants may choose a particular person to act as an Arbitrator for his
integrity and impartiality despite his lack of expertise to deal with the matter
referred to him. In such cases, if the Arbitrator has the power to appoint experts
to advise him or to report to him on a specific matter under consideration, it
would be easier for him to infuse accuracy and fairness into the award to be
delivered by him.
The Conciliation Officers, Members of the Board of Conciliation, Court
of Inquiry and Presiding Officers of various Adjudicatory Authorities under the
Act are deemed to be “Public Servants” under section 21 of
88 . S.ll (5), read with R.25.

Indian Penal Code. It has to be noted that the 10A Arbitrator is not
mentioned.89 Moreover, under the Act, unlike the Adjudicatory Authorities,
the 10A Arbitrator is not deemed to be a Civil Court under the relevant
provisions of the Code of Criminal Procedure.90
Under the Act, it is left to the disputants to opt for Arbitration and to
choose person/s of their choice to arbitrate upon their dispute. Once chosen, the
10A Arbitrator derives his jurisdiction to arbitrate from the Arbitration
Agreement. Here the questions are : what status does the 10A Arbitrator enjoy?
Whether he can be regarded as a statutory arbitrator or a private arbitrator?
Whether the Arbitrator’s Award is amenable to the Appellate Jurisdiction of the
Supreme Court under Article 136 of the Constitution? To find out answers to the
foregoing questions, let us refer to the Case Law.
Prior to the Supreme Court’s decision in Engineering Mazdoor Sabha,
various High Courts had expressed divergent opinions on the issues raised
above.
89. S.ll (6).
90. S.ll (8).

A Single Judge of the Kerala High Court, in A.TJC.M. Employees'
Association v. Musaliar Industries,91 had held that 10A Arbitrator is not a
statutory arbitrator but more or less a private arbitrator. This view was, later,
upheld by the Division Bench of the same High Court. 92
On the contrary, the Bombay High Court in Air Corporation Employees'
Union v. Vyas,93 had ruled that 10A Arbitrator would have all the essential
attributes of a statutory arbitrator and, in substance, there would be no difference
between a statutory arbitrator, as contemplated by section 10, and a voluntary
arbitrator, as contemplated by section 10A of the Act.94
In Engineering Mazdoor Sabha,95 the preliminary objection raised
before the Supreme Court was that 10A arbitrator is not a tribunal and therefore,
no appeal would lie under Article 136. So, it was the character of the authority
which decided the dispute and not the character of the decision of the authority
which was at issue before the Supreme Court in the above case. According to
the Court, the 10A arbitrator can be described
yi . 1961 L.L.J. 81 (Ker.)
92 . 1962 (5) F.L.R. 212 (Ker.) (D.B.)
93 . A.I.R. 1962 Bom. 274.
94 . Id., at 279.
93. Engineering Mazdoor Sabha v. The Hind Cycle Ltd., A.I.R. 1963 SC 874.
as a statutory arbitrator in a loose sense but not in a true sense because he lacks
the basic, essential and fundamental requisite that is, he is not invested with the
State's inherent Judicial Power96 Further, the Court
added that 10A arbitrator is “higher above a private arbitrator and lower than a
statutory arbitrator because a statutory arbitrator is appointed under the relevant
provisions of a statute which also [require him] compulsorily [to resolve] certain
classified classes of disputes”.97 Hence, no appeal lies under Article 136 from
his determination since he is neither invested with the state’s inherent judicial
power nor he is a tribunal.98
But, the Kerala High Court, in Koru v. Standard Tile and Clay Works
(P) Ltd," has observed that the “jurisdiction exercisable by the 10A arbitrator
is statutory”.100
In Singh v. Gokhale,m the Madhya Pradesh High Court has held:
[I]t would be futile to contend that an arbitration agreement
between an employer and employee regarding an industrial dispute
would be a private agreement outside the scope of

96 . Id., at 882. [Emphasis supplied.]
97. /bid.
98. Ibid.
99 . 1964 1 L.L.J. 102 (Ker).
100 .Id., at 108.
101 . K.P. Singh v. Gokhale, supra note 62.

S.10A of the Act... The ... Act does not contemplate any private
arbitration in respect of questions of public importance involving
industrial disputes. If that had been the intent of the legislature sub-
section 5 of section 10A of the Act would not have excluded the
operation of the Arbitration Act of 1940.102
Later, in Rohtas,103 a part of arbitrator’s award which had awarded
damages against the trade union for resorting to an illegal strike and the
consequent loss it had caused to the employer was challenged by the trade
union. Although the status of 10A arbitrator was not directly at issue before the
Supreme Court in this Case, the Court, while referring to 1964 Amendments, by
way of an obiter, observed:
[Now] arbitrator has power to bind even those who are not parties
to the reference or agreement and the whole exercise under section
10A as well as the source of the force of the award on publication
derive from the statute. It is legitimate to regard such an arbitrator
now as part of the methodology of the sovereign’s dispensation of
justice, thus falling within the rainbow of statutory tribunals
amenable to judicial review.104

Subsequently, the Madras High Court in R.K.Steel v. Their Workmen,105 has
also observed that since there was a valid arbitration agreement under
102.Id, at 128.
103. Rohtas Industries v. Its Union, 1976 1 L.L.J. 274 ( S.C.).
104 . Id., at 279.
105. 1977 1 L.L.J. 382 (Mad.).

section 1OA, the arbitrator to whom the dispute was referred thereunder was a
statutory arbitrator. 106
In the light of judicial interpretations bearing upon the status of the 10A
Arbitrator, an other incidental question that has to be answered is: can the 1 OA
Arbitrator order reinstatement with or without back wages in cases of
disciplinary discharges, dismissals, which power, as per section 11 A, has been
expressly conferred only upon the Labour Courts, Tribunals, etc. Gujarat Steel
Tubes 107provides the answer to the question relating to 10A
Arbitrator’s status and also judicially confers upon the 10A Arbitrator the power
to order reinstatement in cases involving disciplinary dismissals, etc.
In the instant Case, the dispute related to the claim of about 400 workmen
who had participated in an illegal strike for reinstatement. The dispute was
referred to Arbitration. The Arbitrator’s award declared that the strike was
illegal, that the workmen were guilty of misconduct and, therefore, the
management’s action in terminating their services was justified. When the
workers’ Mazdoor Sabha challenged the Management’s action, the High Court,
while quashing the Arbitrator’s award, ordered

106 . Id., at 386.
107. Gujarat Steel Tubes Ltd., v. Gujarat Steel Tubes Mazdoor Sabha, 1980 1
L.L.J. 137 (S.C.)

reinstatement. The Management, aggrieved by the High Court’s decision,
appealed to the Supreme Court. One of the issues to be decided by the Apex
Court was whether the Arbitrator is empowered under section 11A to
interfere with the punishment awarded by the Management.
Answering in the affirmative, the Supreme Court ruled that “section
11A did clothe the arbitrator with similar powers as tribunals, despite the
doubt created by the abstruse absence of specific mention of arbitrator in
section 11A”.108 Further, the Court added:
The entire scheme, from its I.L.O genesis, through the objects and
reasons, fits in only with arbitrators being covered by S.11A, unless
parliament cheated itself and the nation by proclaiming a great
purpose essential to industrial justice and, for no rhyme or reason
and wittingly or unwittingly, withdrawing one vital word. Every
reason for clothing Tribunals with S. 11A powers applies a fortiori
to Arbitrators. i no
The Court was of the opinion that the adjudicatory bodies under the Act are
not “functionally different’ from the 10A Arbitrator. Thus:
... Section [11 A] makes only a hierarchical, not functional,
difference by speaking of Tribunals and National Tribunals. So we
see no ground to truncate the natural meaning of “tribunal” and on
the supposed intent of Parliament to omit irrationally
108. Id., at 158.

the category of adjudicatory organs known as arbitrators. To cut
down is to cripple and the art of interpretation makes whole, not
mutilates, furthers the expressed purpose, not
hampers by narrow literality. 110
The Court, further, emphasised that “[a] caste distinction between Courts,
Tribunals, Arbitrators and others, is functionally fallacious and,... stems from
confusion. [Thus] [fjunctionally, Tribunals and Arbitrators belong to
the same brood”.111** Hence, it can be concluded that what section 11A
Labour Court can do, the 10A Arbitrator also can. Following this decision, in
Rajinder Kumar Kindra v. Delhi Administration, the Supreme Court, has
reiterated that the 10A arbitrator can reappreciate the evidence, reject findings
which are perverse, based on no legal evidence and when the conclusion is one
to which no reasonable man would come to.113
The seeds for judicial interpretations, just referred to, were, probably
sown way back in 1962 itself, under the Industrial Truce Resolution.
109. Id., at 159.[Emphasis mine.]
1,0. Ibid.
111 . Supra note 107 atl58. But the forceful dissent of Justice Koshal in this
case cannot be ignored. According to the learned Judge, S.10A
Arbitrator is not clothed with the power to interfere with the
punishment order of the employer under section 11 A.
112 . 1984 11 L.L.J. 517.
113. Id., at 524.

Because, while re-emphasising the importance of ‘Voluntary Arbitration’ in
resolving industrial disputes, it was specified under the said Resolution that
complaints pertaining to dismissal, discharge, victimization and retrenchment of
individual workman which could not be settled by mutual negotiation should be
settled by ‘Voluntary Arbitration’.
Incidentally, it is worth mentioning that in the American context, where
this machinery is in full bloom, an opinion prevails to the effect that an
Arbitrator should enjoy the same powers as do the Courts of Equity, like for
example, ordering reinstatement of discharged, dismissed workmen in
• 114
appropriate cases.
The majority decision in Gujarat Steel Tubes, which is in tune with the
above view, is of great consequence, in the light of the recommendation of the
National Commission on Labour and the Governmental desire to provide a pride
of place for Arbitration in resolving industrial disputes. The Apex Court,
undoubtedly, in this Case, has resorted to ‘Judicial Activism’ while interpreting
the statue. Reed Dickerson has observed that one must not loose sight of the
legislative intent and purpose behind the

114 . Emanuel Stein, “Remedies in Labour Arbitration” in Challenges To
Arbitration 45 (Proceedings of 13th Annual Meeting of NAA, 1960).

insertion of particular provisions in the statute.115 This view would be
laudable provided the legislature enacts unambiguous laws, or, when it
promptly responds to the shortcomings in the law enacted, when pointed out.
Justice Krishna Iyer’s pronouncement in Gujarat Steel Tubes need be
commended in the Indian context since the legislative lethargy has been
manifest, at times.
The next question which needs to be dealt with is: can the High Courts in
the exercise of their inherent review jurisdiction under Article 226 of the
Constitution quash 10A Award when there is an error of law apparent on the face
of the Record or when the 10A Arbitration exceeds its jurisdiction or acts
without jurisdiction etc.,7 The observation of Chief Justice Lord Goddard in,
R.v. Disputes Committee of National Joint Council for the Court of Dental
Technicians,116 offers the answer to the above question. According to Lord
Goddard “[tjhere is no instance of which I know in the books, where certiorari or
prohibition has gone to any arbitrator, except a statutory arbitrator, and a
statutory arbitrator is a person to whom, by a statute the parties must resort”.117
It has already been
established that 10A Arbitrator is a statutory arbitrator and his award is

,15. Read Dickerson, The Interpretation And Application of Statutes, passim.
116 . (1953)1 ALL E.R. 327.
117. Id., at 328.

amenable to the Writ Jurisdiction. Under the law, a Writ of certiorari may
issue against not only judicial but also quasi-judicial decisions. 10A
arbitrator’s award has been held to be quasi-judicial in nature and,
therefore, is amenable to the Writ of certiorari. In Engineering Mazdoor
Sabha, 11 ft it was rightly held that 10A Arbitrator being a quasi-judicial body
is subject to the High Court’s surveillance under Article 226.119
Later, Justice Krishna Iyer speaking for the Court in Rohtas
Industries,120 has observed:
It is legitimate to regard ...[10A] arbitrator now as part of the
methodology of the sovereign’s dispensation of justice, thus falling within
the rainbow of statutory tribunals amenable to judicial review... Suffice it
to say, an award under section 10A is not only not invulnerable but more
sensitively susceptible to the writ lancet being a quasi statutory body’s
decision.121
If, therefore, an “arbitrator records findings based on no legal evidence and
the findings are either his ips dixit or based on conjectures and
surmises,..., the enquiry suffers fro additional infirmity of non-
118 .Supra note 95.

1,9 Supra note 95 at 881,
. 882.
120 Supra
. note 103.
121 Supra
. note 103 at 279.

application of mind, and stands vitiated”.122 An important point to be taken
note of is that the Court here acts in a supervisory capacity but not as an
appellate capacity.
Judicial decisions establish that the Award of the 10A Arbitrator is
amenable to judicial review under Article 226 of the Constitution. Judicial
Review can be meaningful and efficacious when thelOA Arbitrator’s Award
is accompanied by reasons. We may now refer to the case law to determine
whether the reviewing courts have consistently insisted upon the 10A
Arbitrator to furnish reasons for the Award rendered by him.
In Rohtas Industries,123 the Supreme Court has observed that “[t]he
need for a speaking order, where considerable numbers [of workmen] are
affected in their substantial rights, may well be a facet of natural justice or

fair procedure”.124 The Court has further observed:
[T]he position of an arbitrator may affect not only the parties to the
agreement but also those who are given opportunity of being heard
under [sub] section 3A of [section] 10A. The award may affect
thousands of workers in this background and it is legitimate to infer
from S.10A an implied statutory
122. Ibid.
123.Supra note 103.
124 . Supra note 103 at 281.

obligation on the arbitrator to give his reasons in support of the
conclusions of fact and law reached by him in the award...
Failure to give reasons when it is obligatory to do so constitutes an
error of law apparent on the face of the record.125
Controversy regarding reasoned awards permeated the judicial opinions
of various High Courts. In Rohtak Delhi Transport v. Risal Singh,126 one of the
issues was whether the Arbitrator’s award should be a
speaking order. Following Engineering Mazdoor Sabha, the Punjab High Court
held:
[T]he decisions of the arbitrator to whom industrial disputes are
voluntarily referred under section 10A of the Act are quasi judicial
decisions and not purely administrative or executive
determinations. [Hence], [t]he award of the arbitrator exercising
judicial functions should exfacie show the reasons on which the
award is based... [Because], the law does not intend to confer on the
arbitrator under the Act wholly uncontrolled and absolute powers to
make the award completely bare of reasons so as to render it

incapable of judicial scrutiny of the High Court under Article
226.127
125.Supra note 103 at 279.
126 . A.I.R. 1963 Punj. 472.
127 . Id., at 474, 477, 478.

But, in Daily Aljamiat v. Gopinath,m the Delhi High Court has
deviated from the opinion of the Punjab High Court over the same issue. In
this Case, the Court has held:
[A]n award of an arbitrator is not invalid merely because he has
not given reasons for his decision. There is no provision in the Act
which makes it obligatory on the part of the arbitrator under section
10A to give reasons for his decision. It would be putting an
intolerable burden on the arbitrator if he were required to give
reasons. The arbitrator may be a lay man or a lawyfer. To say that a
lay arbitrator must give reasons for his award when the statute does
not require him will be too much to ask. He may find it difficult to
articulate his ideas and mental processes. The Court cannot compel
him to give reasons. Many persons decide by intuitive knowledge
or instinct. They have a quick comprehension without orderly
reason, thought or cogitation.129
The Delhi High Court substantiated its holding further by adding:

[N]o where is there any requirement mandatory or directory that
the arbitrator must give reasons for his award. Section 11 on the
other hand points in the direction that the arbitrator is free to give
or refuse to give reasons. He is not bound by any
128 . Supra note 77.
129 . Supra note 77 at 1355.

particular procedure... In the last analysis he is master of
procedure and on law and facts....130
The Court’s observation that arbitrator is “a master of procedure and of law
and facts”, is however, debatable. More importantly, even his
“masterhood” cannot, for sure, empower him to abandon the most essential
Principle of Natural Justice, that is, no person can be condemned unheard.
Justice Rohatgi has observed that “a lay arbitrator does not know ‘the
lawyer’s law’. But he knows how to accomplish a just result. His is a domestic
forum. His award may be nothing but an expression of personal reactions and
adhoc responses to the concrete fact situation without any
reliance on general pointers and standards”. The award of such an
arbitrator has been characterised by the Delhi High Court as an act of “justice
without law” and to substantiate this viewpoint, Justice Rohatgi, quoting Dean
Roscoe Pound, argues that “there can be a concept of justice without law”.132
The Court’s interpretation and assimilation of Dean Pound’s statement in the
present context, probably, is, it is respectfully submitted, incorrect, because,

according to Dean Pound: “[Ijntuitive actions have always reasons behind them.
Persons while acting intuitively follow
130 . Supra note 77 at 1356.
131 . Supra note 77 at 1360.
132 . Ibid.
or base their behaviour on some principles and with the help of these principles
reasons can be derived”.133 So, reliance on Dean Pound by the Court, it is
submitted, is inappropriate and unsound.
Later, over the same issue, the Madhya Pradesh High Court, in
M.G.Panse v. S.K.Sanyal,134 has ruled that “the award of an arbitrator
functioning under section 10A derives its authority not merely from the
agreement but also from the other allied provisions [and, therefore,] failure to
give reasons gives rise to serious infirmity in the award”.135
It is now well settled that the 10A arbitrator should spell out reasons
underlying his award. This does not mean that he should provide exhaustive
reasons. It is enough if the reasons given are precise and to the point. The Patna
High Court’s observation, in N.P.C. Corporation v. Their Workmen,135A' that
an arbitrator’s award cannot be challenged merely on the
ground that it is not accompanied by elaborate reasons supports the view,
expressed above.
The other persuasive reason for insisting upon a speaking award is that
such an award may in future act as a precedent and thus help in the
133. Harris J.W., Legal Philosophies 360-361 (1981).
134. (1980) Lab. I.C. 524 (M.P.)
135.Id., 526.
development of ‘the common law for the industry concerned’. However,
the opinions over this view are not unanimous. One line of argument is :
[E]fforts to reduce uncertainty in the future administration of the
contract by being able to rely on the dogma that like cases ought to
produce like results is... one of the compelling reasons why many ...
urged that awards ... be accompanied by reasoned opinions and that
arbitrators be free to use past awards as and if the particular case
before them warrants.136
But, according to John Stone, “[l]abour and the world ia general [have]
made progress not because of precedent, but inspite of it”.137
But the views expressed by John H.Sembower are more moderate. He
maintains:
[T]he regular reporting of decisions is a great service, and, so long
as the parties do not object, is wholly desirable. Taking cognizance

of past practices within the particular plant where an arbitration is
being held is particularly pertinent. But [one] can be aware of the
precedents, and even use them, without
135A Supra note 70 at 913.
136 .David L.Cole, Jesse Freidin, et. al., “The Status And Expandability of Labour
Arbitration: A Panel Discussion” in The Profession of Labour Arbitration 57,
58 (selected papers from the first 7 Annual Meetings of the NAA, 1948-54).
137. John Stone, T.A., Director General Motors Division, U.A.W.C.I.O. Proceedings,
Conference on Labour Arbitration, University of Pennsylvania
November 12, 1948, p.6 (Quoted in Raman Rao, op.cit., at 120).

erecting them as a great panoply of authorities without which no
arbitration can be held, brief written, or award preferred.138
It can be deduced that the reported Arbitral Awards do have a persuasive value
in deciding similar arbitration cases that may arise in future and provide
guidance for their resolution by indicating how an arbitrator is likely to resolve
a particular dispute.139
In the light of the preceding discussion, it would be safe to conclude that
sticking to past awards rigidly is not highly desirable. However, to convince the
parties as to why the arbitrator has arrived at a particular decision, he may be
permitted to cite and rely on the past awards. That is, past awards may be used
as a persuasive factor in the arbitration process.
Therefore, it is advisable, under the Act, to incorporate a provision similar
to that of section 31 (3) of the Arbitration And Conciliation Act, 1996 which
provides that the arbitral award shall state reasons upon which it is based, unless
the parties have agreed that no reasons need be given or

138 . John F.Sembower, “Halting the Trend Toward Technicality In
Arbitration” in Critical Issues In Labour Arbitration 104 (Proceedings of
the 10th Annual
Meeting NAA, 1957).
139 . Alvin L.Goldman, Labour Law And Industrial Relations In United States of
America, supra note 11 at 321.

the award is an arbitral award on agreed terms or a consent award.140
Incidentally, it is worth mentioning that the 1996 Act, referred to above,
under section 30 (1), has rightly provided that with the agreement of the parties,
the arbitral tribunal many use mediation, conciliation or other procedures at any
time during the arbitral proceedings to encourage settlement”. Thus, according
to section 30 (2) of the 1996 Act, “[i]f, during arbitral proceedings, the parties
settle the dispute, the arbitral tribunal shall terminate the proceedings and, if
requested by the parties and not objected to by the arbitral tribunal, record the
settlement in the form of an arbitral award on agreed terms”141 or a consent
award. This consent award has been
accorded the same status and effect as any other arbitral award under the 1996
Act.142
Section 17(1) mandates the Appropriate Government to publish, inter
alia, the Arbitrator’s Awards and the Adjudicatory Awards within thirty days
from the date of their receipt in such manner as the Appropriate Government
thinks fit. Further, on the expiry of thirty days from the date of publication, the
Arbitrator’s Award would become enforceable according

140. S.31 (3) (a), (b). The Arbitration And Conciliation Act, 1996. See
Kwatra G.K., The New Arbitration & Conciliation Law of India A
Comparative Study of Old and New Law 108 (Reprint 1998).
141 . S.30 (2) ibid. [Emphasis mine.]
142 . S.30 (4)ibid.

to section 17A (1). The Adjudicatory Awards which have been published under
section 17(1) also become enforceable on the expiry of thirty days except under
the conditions mentioned in the provisos appended to section 17A.
(1) The conditions are -
(a) if the appropriate Government is of opinion, in any case,
where the award has been given by a Labour Court or Tribunal
in relation to an industrial dispute to which it is a party; or
(b) if the Central Government is of opinion, in any case where
the award has been given by a National Tribunal,
that it will be inexpedient on public grounds affecting national
economy or social justice to give effect to the whole or any part
of the award, the appropriate government... may ... declare that
the award shall not become enforceable on the expiry of the said
period of thirty days.

Thus, the Appropriate Government is empowered to withhold the
Adjudicatory Awards from becoming enforceable under the situations stated
above.
Even after becoming operative, the Adjudicatory Awards under section 19
(3) of the Act can be modified and their period of operation can be shortened or
lengthened by the Appropriate Government.

Considering the definitional meaning of the term ‘Award’, wherein the
‘Arbitrators Award’ is also included, can it be presumed that the Appropriate
Government is empowered to modify or reject the Arbitrator’s Awards as well?
If one goes by the Apex Court’s ruling in Gujarat Steel Tubes, where,
despite the absence of the word ‘Arbitrator’, the Supreme Court has read the
same into section 11 A, it is arguable that the word ‘Arbitrator’s Award’ may
also be read into the provisions of sub-section (1) of section 17A. But, this line
of argument flies on the face of the very basic principle of ‘voluntarism’ on
which the machinery of Arbitration is built.
On the contrary, it should be specifically pointed out that although the
arbitrator’s award has been included in the main clause of section 17A, the same
is missing under the provisions that follow. There seems to be a powerful reason
behind including ‘arbitrator’s award’ under the main clause of section 17A but at
the same time excluding it from the provisions which qualify the main clause.
This, probably, establishes that in view of the spirit of “voluntarism” underlying
the machinery of arbitration, the legislature might have thought it expedient not
to leave arbitrator’s award at the mercy of Appropriate Government to become
operative.
The overall discussion in the preceding paragraphs establishes the
following—
In the light of the Apex Court’s decision in Karnal Leather Karmachari
Sanghatan, publication of Arbitration Agreement is mandatory.
Majority of the judicial decisions, referred to earlier, further, establish
that 10A Arbitrator is a statutory arbitrator and that he enjoys section 11A
powers along with the adjudicatory bodies like the Labour Courts, etc.
10A Arbitrator’s Award is amenable not only to the appellate jurisdiction
of the Supreme Court under Article 136 but also to the supervisory jurisdiction
of the High Courts under Articles 226, 227 of the Constitution. Consequently,
10A Arbitrator’s Award should be a speaking award although he is not required
to give elaborate and exhaustive reasons.
In addition, as mentioned earlier, the Appropriate Government under
section 17A is empowered to prevent the adjudicatory award from becoming
operative in certain situations. The arbitrator’s award, though appears in section
17A (1), the same is missing in the provisions that follow. But taking into
account the various path-breaking decisions of the Apex Court where 10A
Arbitrator has been kept at par with the adjudicatory bodies, it can be argued
that the Appropriate Government is equally empowered to withhold the 10A
arbitrator’s award from becoming

operative and can also shorten or increase the life of arbitrator’s award under
sub-sections (3), (4) of section 19 of the Act. If this line of argument is heeded,
the basic principle of ‘voluntarism’ underlying the Arbitration machinery would
lose its relevance. Therefore, the Appropriate Government cannot prevent the
10A Arbitrator’s Award from becoming operative. So also, such an award can
not be modified or rejected by the Appropriate Government.
WORLD TREND WITH REGARD TO ARBITRATION
Dispute resolution by way of arbitration has its roots well established in the
leading countries of the world like the United States of America and Europe.
The growth of this method is being witnessed by India presently and therefore,
this method is approached with a lot of hesitation.
United States of America
Grievance arbitration became the preferred method of dispute resolution in
United States sometime around 1945 due to World War II. Today, one of the
most popular arbitration organizations in the world is American Arbitration
Association (AAA).48 Over 70,000 grievance and interest arbitration cases are
ruled on by arbitrators each year in United States and due to the final and
binding nature of arbitration, less than 1.5% of all arbitration cases heard in
America ever end up in court. The most famous Supreme Court cases on labour
arbitration have been named as Steelworkers Trilogy49 and all of these three
cases were decided in 1960. These cases have had a significant influence on the
judicial treatment of arbitration agreements and awards in the public sector, both
federal and state. Today, 98% of all collective bargaining agreements in United
States contain arbitration clauses.50
European Union
Although arbitration exists in some form in most European Union (EU) Member
States, it is not widely practiced. This can majorly be attributed to the national
laws which drastically limit the extent to which an employment related issue can
be arbitrated.51 European Union Member States usually treat arbitration of
individual employment disputes differently than arbitration of disputes in the
collective bargaining arena. Generally, they prohibit arbitration of individual
claims and allow or even mandate arbitration of collective rights. However, this
position can be clearly contrasted with India where the legislation has
showcased clear intent to utilize arbitration as a method for settlement of
industry disputes by inserting Section 10A to the Industrial Disputes Act,
1947.52 Nonetheless, European Union Member States greatly vary in how they
regulate labour and employment arbitration. The frameworks that govern dispute
resolution in European Union range from Netherlands, which has no specific
regulations, to Lithuania, which has an extensive elaborate legal system on the
subject. There may indeed exist some similarities between arbitration in Austria,
France, Germany, Italy, Spain, Sweden and Switzerland as well as other
European countries, but there is no common tradition for procedural rules
between all these countries.53 A preference for resolving disputes through social
partners rather than through government intervention is one approach taken in
several European countries when it comes to collective labour disputes.

49 Steelworkers v. American Manufacturing Co., 363 U.S. 564 (1960),
Steelworkers v Warrior & Gulf Navigation Co., 363 U.S. 574 (1960),
Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593 (1960). 50 Supra
note 32. 51 TARASEWICZ & BOROFSKY, supra note 42. 52 Industrial
Disputes Act, 1947, § A. 53 Frncois Dessemontet, Arbitration in Europe,
Lausanne and Fribourg Law Schools,
http://www.unil.ch/files/live//sites/cedidac/files/shared/Articles/Arbitration
%20in%20Europe.pdf (last visited on Jan. 25, 2015).
Britain
THE HISTORICAL POSITION OF ARBITRATION
When considering the historical position of arbitration in the British system of
industrial relations before 1970, it should be emphasised that compulsory
arbitration has been a relatively rare phenomenon, confined largely to wartime
years.1 During the First World War, the Munitions of War Acts provided for
legally binding arbitration where disputes could not be settled by the parties. The
conditions of Employment and National Arbitration Order No. 1305 of 1940,
contained even more extensive provisions, which were utilized throughout
World War II. One should not overestimate the impact of these compulsory
arbitration arrangements. Order 1305, for example, did not prevent strikes from
occurring and there were relatively few attempts to enforce the law against
striking.$ Of the 4,510 cases reported under Order 1305, only 2,092 were
referred to the Nation Arbitration Tribunal; and as many as 1,745 cases were
either withdrawn or settled following conciliation by officers of the Ministry of
Labour.' Order 1305 remained in force until August, 1951, when it was replaced
by the Industrial Disputes Order No. 1376." While the latter Order did not
prohibit industrial action, it continued to provide for compulsory arbitration

arrangements until February, 1959. Between 1951 and 1959 there were 1,277
awards made by the Industrial Disputes Tribunal under the terms of this Order.6
The most detailed assessment of the history of compulsory arbitration in British
industrial relations concluded that "the heydey of compulsory arbitration has
passed, and is unlikely to return except in time of national emergency."'7 This
conclusion is less certain if viewed in light of recent requests for the introduction
of compulsory arbitration as a substitute for the right to strike by certain groups
of "essential service" employees in the public sector.' These requests followed
sizable public sector strikes and appear to have gone relatively unheeded in
policymaking circles. In contrast, Britain has a relatively long history of using
voluntary arbitration to settle the industrial disputes. The formal basis for
employing such a tool was the Industrial Courts Act of 1919.' This Act created a
permanent arbitration tribunal, the Industrial Court, which arbitrated disputes at
the reuest of the concerned parties. It also permitted the Minister of Labour to
refer any matter to an ad hoc Court of Inquiry,10 and provided for the
appointment of ad hoc arbitrators and boards of arbitration." A voluntary
arbitration award by the Industrial Court (which changed its name to the
Industrial Arbitration Board in 1971),12 was not enforceable in ordinary
courts."3 In practice, however, the participants usually complied with the award
and once the award had been acted upon, it became an implied term in the
employment contracts of the individuals concerned. There were some situations
in which the jurisdiction of the Industrial Court extended beyond that of a
voluntary arbitral body. This was where an administrative or legal sanction
existed as a "back-up" to the arbitration award; 4 one such example was the Fair
Wages Resolution of 1946, which will be discussed in section III. Between the
First and Second World Wars, from 1920 to 1938, 1,669 arbitral awards were
made by the Industrial Court, with an additional 315 awards made either by
single arbitrators or by ad hoc boards of arbitration appointed by the Minister of
Labour.1 5 These awards were disproportionately concentrated in certain
industries: engineering, shipbuilding, railroads and other forms of transportation,
the civil service, and public utilities. Together these awards accounted for 791 of
963 awards made by the Industrial Court between 1921 and 1932.16 It should be
noted that the non-industrial civil service was removed from the jurisdiction of
the Industrial Court when a separate Civil Service Arbitration Tribunal was
established in 1936.17 While this tribunal issued 385 awards during the period
between 1936-1959,18 there has been a subsequent decline in the number of
references to arbitration. This change is alleged to be the result of policies of
wage restraint, the most vigorously enforced restraints in the public sector, and
has compromised the independence of the arbitral body.19 A number of other
groups of public sector employees, such as the railroads, have long had
independent arbitral bodies. An indication of the potential use of arbitration in
the British system of industrial relations was provided by a study conducted by
the Ministry of Labour in the mid-1950's. 20 This study of 152 industries,
excluding those with statutory wage fixing arrangements or with the central
Goverment as the employer, revealed that fewer than one-half (75) had
procedural agreements which stipulated the referral of unresolved disputes to
arbitration;21 the remaining 24 included agreements that disputes might be so
referred. 22 Appendix A indicates the extent to which such potential usage was
realized by showing the number of arbitration awards and conciliation
settlements made under the auspicies of the Ministry of Labour between 1939
and 1959. During this period, compulsory arbitration was used more frequently
than voluntary arbitration. However, the more important finding is that the
number of conciliation settlements typically exceeded the total number of
arbitrtation awards in any given year. In the traditional, voluntarist system of
British industrial relations, conciliation has always been the preferred form of
third-party interven tion to arbitration; the majority of arbitration awards have
always emanated from a failure to produce a settlement at the prior conciliation
stage.2 A useful indication of the extent to which arbitration has been used to
settle disputes, with particular attention given to wage issues, is provided by the
Ministry of Labour annual estimates of the proportion of total weekly wage
increases brought about by the various available methods of settlement. The
relevant figures for the years between 1945 and 1966 are presented in Appendix
B. These figures indicate that during the period from 1946 to 1955, less than
nine percent of wage increases resulted from arbitration awards. In the next
decade, 1956 to 1965, the proportion dropped to three percent. It is evident upon
analysis of Appendices A and B that, both in practice and in numerical terms,
arbitration played a- relatively small role in the traditional system of industrial
relations in Britain. It is useful to briefly note some of the major issues of
discussion surrounding the traditional operation of arbitration arrangements in
Britain. The distinction between dispute of "interests" and those of "rights,"
which has been so important in the United States, has been of relatively little
practical interest in Britain. The first relevant issue is whether arbitrators should
provide reasoned arbitral awards. Traditional British practice has been not to
give such reasons, primarily because this could exacerbate the existing conflict
between the parties in dispute.2' On a related point, there has been considerable
discussion as to whether an arbitrator adopts a "judicial" or "political" attitude
toward the dispute in question. Does the arbitrator attempt to determine who is
right and award accordingly, or does he make an award which reflects the
relative bargaining strengths of the two parties in dispute?2 5 Finally, much
consideration has been given to the question of whether Government-appointed
arbitrators can, or should, give an independent award during a time when
Government policy explicitly seeks to limit the size of wage increases negotiated
and awarded within the framework of industrial relations.26 These difficulties
stemmed from existing Department of Employment (formerly the Ministry of
Labour) practices and played an important role in the creation of the ACAS, in
1974.27 2
_______________________________________________
Hunter, Economic Issues in Conciliation and Arbitration, 15 BRrr. J. OF
INDUS. REL. 238-39 (1977). 24 See, e.g., Hepple, super note 1, at 102. 215
See, e.g., Lockwood, Arbitration and I
ARBITRATION TRENDS IN THE 1970's The establishment of the ACAS in
1974,28 and its subsequent codification in the Employment Protection Act of
1975, was very important. For the first time since 1896,29 the provision of
conciliation and arbitration facilities was removed from a Government
department and placed in a publicly-financed organization under the control of
an independent, non-governmental council.30 The ACAS council consists of a
full-time chairman, appointed by the Secretary of State for Employemnt, and
nine part-time members. 1 Of the part-time council members, three are
nominated by the central trade union federation (TUC), 2 three by the central
employers federation (CBI),33 and three are independents drawn from the
academic sector.3 4 The specific purposes of the ACAS were: "to provide
conciliation and mediation as a means of avoiding and resolving disputes, to
make facilities available for arbitration, to provide advisory services to industry
on industrial relations and related matters and to undertake investigations as a

means of promoting the improvement and extension of collective bargaining."3
5 The ACAS provision of arbitration facilities is provided by the terms of
Section 3 of the 1975 Employment Protection Act.38 Unlike the conciliation
procedure, the ACAS appoints arbitrators rather than use its own employees.
Both parties to the dispute must consent to arbitration, a procedure which is used
only as a last resort.
_________________________________________________
Re298 Kessler, The Prevention and Settlement of Collective Labor Disputes in
the United Kingdom, 11 INDus. REL. J. 17 (1980). 29 Id. 30 Id. 21 Id. 32 Id. 33
Id. 34 Id. 31 Id. at 18. 38 (1) Where a trade dispute exists or is apprehended the
Service may, at the request of one or more parties to the dispute and with the
consent of all the parties to the dispute, refer all or any of the matters to which
the dispute relates for settlement to the arbitration of: (a) one or more persons
appointed by the service for that purpose (not being an officer or servant of the
service); or (b) the-Central Arbitration Committee constituted under Section 10
below (2) In exercising its functions under subsection (1) above, the Service
shall consider the likelihood of the dispute being settled by conciliation and
where there exist appropriate agreed procedures for negotiation or the settlement
of disputes, shall not refer a matter for settlement to arbitration under that
subsection unless those procedures have been used and have failed to result in a
settlement or unless, in the opinion of the service, there is a special reason which
justifies arbitration under that subsection as an alternative to those procedures.
1982 CASE W. RES. J. INT'L
quests for arbitration typically arise as a result of a failure to reach a settlement
at the prior conciliation stage, although, in some cases, disputes are referred
directly to arbitration under the terms of the parties' particular procedure

agreements. The ACAS regional office in Scotland, accounting for some 10
percent of the total arbitration workload of the service, estimates that some two-
thirds of their arbitration cases have previously attempted conciliation, the
remaining one-third arising out of direct requests for arbitration. Awards arising
from voluntary arbitration are not legally binding, but since arbitration can
proceed only with the consent of all parties to the dispute, it is presumed that the
award will be accepted; in practice, this invariably seems to be the case. 3 7 The
size of the ACAS arbitration workload is strongly influenced by the extent to
which settlements are reached at the prior conciliation stage. The latest available
figures for 1980, indicate that settlement, or progress towards a settlement, was
achieved in 77 percent of the disputes conciliated in that year; 8 the figure for
the previous year was 78 percent.39 Because of this relatively high percentage
of conciliation settlements, it is not surprising that references to conciliation far
outnumber those to arbitration. In 1980, the ACAS received 2,091 requests for
collective conciliation as compared to 291 cases which went to arbitration. By
contrast in 1979, of the 2,667 requests received, 363 cases went to arbitration.4
These collective conciliation figures are distinguished from conciliations of
individual employee complaints alleging infringement of specified employment
rights, such as unfair dismissal. The number of arbitration cases handled by the
ACAS is substantially greater than the number which were heard by the
Department of Employment. In 1973, the last full year during which the
arbitration function was carried out by the Department of Employment, the
number of cases heard was only 54.41 Since the ACAS has assumed this
function, the number of arbitration cases heard has increased.42 Generally, these
cases have been heard by single arbitrators and not full arbitral boards. For
example, of the 291 arbitration awards made in 1980, 237 of them were made by
single arbitrators.4 3 The number of conciliation cases in any given year varies
significantly and is influenced by economic factors such as unemployment and
decreases in real wages. 44 Such factors undoubtedly influence the arbitration
workload since the majority of arbitration cases arise out of prior
___________________________________
11 KESSLER, supra note 13B, at 21. 36 ACAS ANNUAL REPORT 1980 14
(1981) (verified by author). I !d. 40 Id. at 14 and 23. 41 Kessler, supra note 28,
at 21. 42 Concannon, The G
conciliation requests. The primary causes of disputes referred to arbitration
include subsidiary pay issues such as grading, holiday pay and bonus payments,
as well as issues regarding dismissals and discpiline. 45 The 1980 ACAS Annual
Report noted that most of those disputes referred to arbitration in 1979 involved
local issues arising in individual companies or plants; conversely, in 1980, the
Service was responsible for referring over twenty national pay issues to
arbitration, including seven major cases. Annual pay settlements for
approximately 1.3 million workers, nearly six percent of those employed,
predominantly in the public sector, were determined in this manner. 46 There
has been much discussion in U.S. industrial relations literature concerning the
possibility of a "narcotic effect" occurring under compulsory arbitration
arrangements.47 The essence of the "narcotic effect" is that dispute resolution
procedures, ". .. often tend to the overused; they may become too accessible and
as a consequence, the responsibility and problem solving virtues of constructive
negotiations are lost. Dispute settlement procedures can become habit-forming
and negotiations become only a ritual." 48 Similar concerns have been expressed
about the operation of voluntary arbitration arrangements in Britain: [the dispute
procedure] may provide for arbitration as a final stage in the procedure. Such a
provision might be particularly helpful if used to resolve disputes at [sic] local
level on issues which are not regarded by the parties as appropriate to go beyond
more than one external stage of procedure. However, it must be recognised that
an excessive reliance on arbitration can weaken the effectiveness of the
negotiating procedures in resolving disputes. 9 In order to provide a preliminary
examination of the possible existence of such an effect in Britain, Appendix C
shows the industrial distribution of arbitration cases heard by the ACAS between
1976 and 1980. Correlation coefficients indicate that these industry groups
which accounted for a relatively high or low proportion of the ACAS arbitration
workload in 1980, for example, were the same as those which accounted for a
high or low proportion in previous years. The "percentage of users" figures are
admittedly not the ideal measure for testing this effect; a more appropriate basis
of measurement would be the percentage of impasses or 45
_________________________
ACAS ANNUAL REPORT 1980, supra note 38, at 23. 41 Id. at 24. 47 See,
e.g., Wheeler, Compulsory Arbitration: A Narcotic Effect?, 14 INDUS. REL.
119 (1975). " Kochan & Baderschneider, Dependence on Impasse Procedures:
Police and Firefighters in New York State, 31 INDUS. AND LAB' REL. REV.
431 (1978). 40 TUC, GOOD INDUSTRIAL RELATIONS: A GUIDE FOR
NEGOTIATIONS 15 (1971).
disputes in a given industry, within a limited period of time, that went to
arbitration. The central question is whether union-management disputes in those
industries which use arbitration extensively are disproportionately concentrated
among a relatively small number of individual unionmanagement relationships,
or, whether these disputes are a more widespread phenomenon within each of
the industries. The former pattern of usage would be more consistent with the
traditional notion of a narcotic effect which is an individual relationship, rather
than an industry-based phenomenon. No nationwide figures are available on the
number and characteristics of individual employment establishments that have
been repeated users of arbitration through 1980. However, figures provided by
the ACAS regional office, in Scotland, do provide some evidence to support the
finding that a disproportionate number of arbitration cases have involved a
relatively small number of employment establishments. During the 30-month
period extending to mid-1980, the ACAS Scottish regional office handled 107
arbitration cases,5 0 of which 24.3 percent were in the food, drink, and tobacco
industries,51 and 14 percent in mechanical engineering.5 2 Moreover, 43
percent of these 107 cases had come from only 17 employment establishments
that had been to arbitration more than once in this period of time. These figures
indicate nearly three arbitration cases per establishment in less than three years.5
Only 21.8 percent of the employment establishments that had used the ACAS
arbitration services in Scotland accounted for 43 percent of the arbitration
caseload within a 30-month period of time.5' The other body which has been
responsible for British arbitration in the 1970's is the Central Arbitration
Committee (CAC), created by section 10 of the Employment Protection Act of
1975.55 The CAC replaced the Industrial Arbitration Board. It consists of a
chairman, several deputy chairmen, and members who are experienced union
and employer representatives. The CAC had two basic functions during the
1970's: those inherited from the Industrial Arbitration Board, and new functions
based on various provisions of the 1975 Employment Protection Act and the
Equal Pay Act of 1970. 5 7 Furthermore, the CAC also inherited the
responsibility for ensuring compliance with the terms of the Fair Wages
Resolution of 1946, as passed by the House of Commons." The Resolu- "

_________________________________
Information provided through author's personal communications.
Information provided through author's personal communications. Information
provided through author's personal communications. '3 Information provided
through author's personal communications. Information provided through
author's personal communications. '5 Kessler, supra note 28, at 25. Id. 7 Id. at
26. 58 For a review of the operation of this clause see, Beaumont, The Use of
Fairways
tion states that a union has a unilateral right to bring an employer before the
CAC if it believes that an employer is not paying "fair wages."59 Fairness is
defined by comparing rates, hours, and conditions established in the relevant
industry and district by negotiations or arbitration, with the general level
observed by comparable employers in the industry.60 Such fair wage clauses
have also been incorporated into a number of statutes over which the CAC has
jurisdiction; these statutes include the Civil Aviation Act of 1949,1 the Films Act
of 1960,62 and the Independent Broadcasting Act of 1973.3 The new functions
of the CAC differ from the traditional British voluntary arbitration process in
that one party has a unilateral right to seek arbitration, with the resulting awards
being legally enforceable as implied terms of the contract of employment. The
CAC was empowered, under the terms of the Equal Pay Act of 1970, to amend
any collective agreements or pay structures that were discriminatory in nature,
but most of its new functions are derived from various provisions of the
Employment Protection Act of 1975." Under Schedule 11 of this Act, a union
could bring a claim before the CAC to ensure the observance of recognized
terms and conditions or, if there were no recognized terms and conditions, a
claim could seek compliance with a general level of terms and conditions. 5
Under sections 19 through 21 of the Employment Protection Act of 1975, a
union could file a charge with the CAC stating that an employer had failed to
disclose information necessary for collective bargaining purposes to that union's
representatives. 6 If the CAC found the claim well-founded, a declaration would
be made specifying the information which should be disclosed. If there were still
no disclosure, the union would have the right to take the employer to unilateral
binding arbitration by the CAC on the terms and conditions of employment.6 7
Finally, under section 16 of the Act, an independent trade union could complain
to the CAC that an employer was not observing an ACAS recommendation to
recognize that union. The union again would have the right to take the employer
to unilateral binding arbitration by the CAC on the
________________________________________
Clauses in Government Contracts in Britain, 28 LAB. L. J. 148 (1977). 8 K.W.
WEDDERBURN & P.L. DAVIES, supra note 14, at 193. 60 Id. at 194. 61 Civil
Aviation Act, 1949, 12, 13,14, Geo. 4, ch. 67. 02 Films Act, 8, 7 Eliz. 2 ch. 57
(1960). 63 Independent Broadcasting Act, 1973 ch. 19. 64 Equal Pay Act, 1970,
ch. 41 § 3; Employment Protect Act, 1975, ch. 71, pts. I, III. 65 For a review of
the CAC role in this regard see generally, Beaumont, Arbitration the Extension
of Terms in Britain, 34 ARBITRATION JOURNAL 32 (1979). 66 The general
duty is imposed by Employment Protection Act, 1975, c. 71, § 18. 67 For a
review of the CAC role in this regard see, A. MARSH & R. HUSSEY,
DISCLOSURE TO UNIONS-How THE LAW IS WORKING (1979) (verified
by author)
terms and conditions of employment."' Appendix D indicates the CAC's
arbitration workload for the period between 1977 and 1980. There has been a
dramatic decline in the workload of the CAC in 1979 and 1980; the total number
of references between 1979 and 1980 (1,067) was slightly more than one-half
the number between 1977 and 1978 (2,095). The basic reason for this dramatic
decline was the absence of a formal income policy or policy of wage restraint.
An artificially high number of claims under Schedule 11 of the Employment
Protection Act of 1975 and the Fair Wages Resolution of 1946 were put forward
in 1977 and 1978 in an attempt to circumvent the constraints of a wage policy.
By the end of this policy implementation, the number of claims decreased
considerably. This workload decline will undoubtedly continue, if not actually
worsen, in the future. In 1980, the Conservative government passed the
Employment Act which repealed Schedule 11 and section 16, concerning union
recognition, of the Employment Protection Act of 1975." This vulnerability to
legislative change has caused the CAC to reconsider its future role. IV. THE
F. CONCLUSIONS AND SUGGESTIONS
The principle of ‘voluntarism’ underlying the system induces the
disputants to opt for Voluntary Arbitration and to select person(s) of their choice
to arbitrate upon their dispute. Having been set up by the parties themselves,
‘Voluntary Arbitration’, it is presumed, would be “potentially responsive to their
values and concepts of justice”.
Apart from being speedy, economical and a private method of resolution,
the advantages of ‘Voluntary Arbitration’ are numerous. Despite repeated

emphasis upon the importance and efficacy of the system of ‘Voluntary
Arbitration’, by the Government in its various Five Year Plans, unfortunately,
the method has failed to take deep roots in the arena of Labour-Management
Relations in India for reasons, such as, easy availability of the adjudicatory
machinery when negotiations fail, dearth of

suitable arbitrators who could command the confidence of both the parties, absence of
recognised trade unions which could enforce discipline among its members and could
bear the cost of Arbitration and absence of a simplified procedure.
Additionally, on the recommendation of the National Commission on
Labour, the Government in 1969 constituted the N.A.P.B., which has been
entrusted with the task of drawing the Panel of Arbitrators to enable the parties
to select the right person(s) to arbitrate upon their disputes. Ironically, it is now
on the verge of disappearance from the industrial scenario. Hence, revitalization
of N.A.P.B. is the first and foremost step to be taken to encourage and promote
the system of ‘Voluntary Arbitration’. Along with the power of drawing the
Panel of Arbitrators for particular industries, the N.A.P.B. should also be
entrusted with the duty to list out the matters which fall under the jurisdiction of
the 10A Arbitrators. Further, the Panels drawn should include Academicians who
are Experts in Labour Laws and Industrial Relations. The Panelled Arbitrators
must also include the representatives nominated by Non-Governmental
Organisations having expertise in the areas of Human Rights and Labour Law
matters. More importantly, the guiding principle for including a particular
person on the Panel of Arbitrators ought to be his capacity to infuse confidence
in both the parties through his established credentials, like, impartiality,

integrity, expertise, humane attitude etc. Refresher Courses and a system of
continuing education should be introduced to enable the Panelled Arbitrators to
become aware and appreciate the developing trends in Labour-Management
Relations.
The existing lacunae, pointed out earlier in this Chapter, relating to the
ambiguous and incongruous Statutory Provisions and the Rules bearing upon the
‘Voluntary Arbitration’, should be weeded out, at the earliest. Where the Statute
mandates that the ‘Arbitration Agreement’ should be in Form-C and should be
duly signed by persons authorised and that a copy of the same should be sent to
the Conciliation Officer and the Appropriate Government, it would be prudent to
adhere to these statutory requirements, despite contradictory judicial opinions,
referred to, above. Because, it is a legislative choice made, probably, with an
intention to safeguard the interest of the parties and not, for sure, to devitalise
the importance of the vital machinery. It is, thus, easy to discern that in the
absence of a written and a duly signed Arbitration Agreement, the possibility of
invoking the Review Jurisdiction of High Courts by the disgruntled party
affected by the arbitrator’s award, can not be ruled out. Hence, bearing in mind
the cost and delay aspects, it is advisable to have a clear-cut Arbitration
Agreement which can substantially eliminate or at least reduce future
complications. Likewise, the statutory purpose would be served better if the
Appropriate
Government publishes the Arbitration Agreement within the statutorily
stipulated period to eliminate unnecessary and unwarranted challenges. The
basic objective underlying publication is to make the contents of Arbitration
Agreement known to all those who are vitally interested in and concerned with
the dispute though they may not be, initially, parties to the Arbitration
Agreement. Hence, contents of the Arbitration Agreement may infuse the
concerned to get involved in the arbitration process as interveners and this
would probably make the Arbitration Award wholesome and effective.
Another flaw relating to section 10A is about the wordings used in sub-
section (3A) that deals with the impleading of parties and the related Rule 8A
which are in conflict with each other. While section 10A(3A) uses the word
“may”, Rule 8A uses the word “shall”. The use of “may” under the substantive
provision indicates that the Appropriate Government may or may not issue the
10A(3A) notification despite the fact that the parties “represent the majority....”
But, if one goes by the word “shall” used in
Rule 8A, then the implication would be that once the fact that the majority of
each party is represented in a dispute is established, the Appropriate
Government ought to issue (3A) notification. This statutory compulsion should

be accepted since the Appropriate Government would not be able to exercise its
power to forbid the continuance of a strike or lock-out under

section 10A(4A) unless 10A(3A) notification has been issued. The Legislature,
therefore, has to remove the ambiguity through a suitable amendment to the
extant law.
As mentioned earlier, the Appropriate Government may issue 10A(3A)
notification if it is satisfied that the persons making the reference represent the
majority of each party in a dispute. But, for the Appropriate Government to
verify the majority character of a trade union, unfortunately, neither the
Industrial Dispute Act, 1947 or the Rules made there under nor the Trade
Unions Act, 1926 spellout any procedure. Central Trade Union Federations have
not arrived at any understanding as regards the method to be employed for
determining the representative character of a trade union in the industry. While
the Indian Trade Union Congress (I.N.T.U.C) prefers ‘Verification of Fee Paying
Membership’, the All India Trade Union Congress (A.I.T.U.C.), and other Left
wing unions are of the view that ‘Secret Ballot’ would be an ideal method. In the
1988 Amendment Bill, the Government provided for both the methods but,
regrettably, the Bill lapsed due to the fall of Government. It is high time for the
Government to amend the law and provide for a suitable method to determine
the representative character of a trade union functioning in the industrial
establishment concerned.
Moreover, a responsible trade union with its strong membership would be
in a position to act as an effective bargaining agent. Here, the question of
recognition assumes significance. Hence, the Legislature should provide for the
compulsory recognition of the most representative union in an industrial
establishment. A recognised union certified as a bargaining agent would be able
to act with responsibility and ensure that the collective bargaining agreement
arrived at is properly implemented. It can build up its trade union funds, become
financially strong and would then be in a position to bear the cost of Arbitration.
When it has to bear the cost of Arbitration, the recognised union, in all
probability, would act with greater caution while entering into Arbitration
Agreement. It will also ensure that the issues to be arbitrated upon are spelt out
with greater precision in the Agreement so that the Arbitrator can arbitrate over
the dispute without any further delay. Such a recognised and responsible union
would also be interested in doing all that is possible by cooperating with the
arbitrator and the employer with a view to complete the arbitration process as
quickly as possible so that the cost of Arbitration can be reduced to the
minimum.
In order to reduce the cost etc., of Arbitration, the 10A Arbitrator should
be provided with information relating to collective bargaining process that has
taken place before his services are enlisted to arbitrate

upon the dispute referred. Where the Conciliation Officer or the Board has
registered failure and the dispute is referred to a 10A Arbitrator, he should be
provided with the Failure Report, sent by the Conciliation Officer or the Board.
These Reports, probably, would enable the 10A Arbitrator to perform his job
better. Further, without there being compelling reasons, the Arbitrator must not
grant adjournments which strike at the very root of the Arbitration process, that
is, providing speedy remedy.
Taking cue from the relevant provisions of the Arbitration And
Conciliation Act, 1996, cited earlier in this Chapter, an Amendment should
specifically mention that the 10A Arbitrator should give reasons on which his
award is based unless there is an agreement between the disputants to the
contrary or the award is an arbitral award on agreed terms or a consent award.
Incidentally, it should be noted that the 1996 Act, referred to above, has also
empowered the Arbitral Tribunal to use conciliation, mediation or other
procedures with the consent of the parties at any time during the arbitral
proceedings to encourage settlement. Further, realizing the importance of
bipartite settlements in the realm of industrial relations, the 1996 Act has
provided a free hand to the Arbitral Tribunal to terminate its proceedings and to
record the settlement (arrived at by the parties during the pendency of Arbitral
proceedings) in the form of an Arbitral Award on agreed terms or a consent
award, if so requested by the disputants. There is

need for the incorporation of similar provisions under the Industrial Disputes
Act too to ensure a better performance by the ‘Voluntary Arbitration
Machinery’.
In the ultimate analysis, the Employers, the Trade Unions, the
Government, the Judiciary and the Experts in the field of Labour-Management
Relations have collectively contributed for the slow progress of the Voluntary
Arbitration method. It is, therefore, time for each one to realize that “an acre of
[proper] performance is worth the whole world of promise”. Only then, each one
could perform his duties better instead of passing the buck. It is the foremost
duty of all concerned to realise the importance of this machinery and enlighten
the interested parties to realize the same. In this context, steps ought to be taken
to boost mutual trust, confidence between the disputants and also to tune,
specifically, the attitude of the management towards this machinery so as to
clear the ground for wider acceptance of ‘Voluntary Arbitration Machinery’ in
Indian industries.

Voluntary

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INDUSTRIAL DISPUTES ADJUDICATION AND THE

ROLE OF VOLUNTARY ARBITRATION WITH

Industrial dispute, a common occurrence in all industries, is essentially a disagreement between

introducing arbitration as an alternative to solve industrial disputes. Unlike other methods of

method of dispute resolution

advancement in any State, whatever be its ideological preferences or commitments, is

“characterised by de-licensing, de-regulation and de-control in order to make [our

namely, the non-availability of Conciliation Officers possessing the requisite attributes,

feeling that “Conciliation is a hurdle to be crossed to have the dispute referred to

resolution of the industrial disputes.

‘Voluntary Arbitration’, it is averred, must not only concentrate on

and maintenance of friendly, co-operative labour-management relations. Parties

through this process seek to “arrive at an apparently mutually satisfactory pre-

arbitrator, while arriving at a decision, relies heavily on the facts presented to

him can easily win the confidence of the disputants.

(Proceedings of the 11th Annual Meeting NAA, 1958).

With this background, let us turn to the Voluntary Arbitration

Machinery under the Act to determine whether it has been successful in

promoting the statutory objects. In the meanwhile, it would be helpful to

know what the term ‘Arbitration’ signifies.

IMPORTANCE OF DISPUTE RESOLUTION

country in 1991, which removed import restrictions, brought in foreign competition,

privatized certain nationalised sectors of economy, liberalised the Foreign Direct

Investment regime, improved infrastructure and led to an expansion in production of

and incorporates all aspects of a dispute (including difference of opinions between

the tempo of production which leads to the buoyancy of national economy.10

There are mainly three causes of Industrial Disputes:11

retrenchment, automation, leave and so on.

2. Managerial Causes: Little scope of self-expression, non-fulfilment of social needs and

CURRENT METHODS FOR SETTLEMENT OF DISPUTES

if the order of termination of service is justified and to grant appropriate reliefs.12

amicable settlement or agreed solution. It is a process of rational and orderly discussion

started gaining momentum. As soon as an industrial dispute arises or is expected to

The main purpose of a Works Committee is to develop a sense of a partnership

in respect of matters carrying an interest that is common to both, employers and

passed on to a Conciliation Officer. The duties of a Conciliation Officer have been

to act in a particular manner nor 13

19 AVTAR SINGH AND HARPREET KAUR, INTRODUCTION TO LABOUR

21 Industrial Disputes Act, 1947, § 5. 22 Industrial Disputes Act, 1947, § 13.

reference to voluntary arbitration23 and on failure of such attempt, he tries to persuade

them to agree to refer the dispute to adjudication by sending in a joint or separate

Failure of Conciliation 1. Illiteracy and lack of understanding amongst the workers,

especially those employed in backward areas. 2. Lack of co-operation and sometimes,

conciliatory bodies. 3. Failure of reaching at a common consensus because of

nature. 4. Copiess of almost all demand charters, even if no involvement of the

conciliation officer. Sometimes, there is also a pecuniary interest of the conciliation

officer which hampers the entire process.25

Industrial adjudication has undoubtedly played a conclusive role in the settlement of

class. In this context, the National Commission of Labour has observed:

The adjudicating machinery has exercised considerable influence on several aspects

bargainon an equal footing with the employer.

25 Debi Saini, Compulsory Adjudication of Industrial Disputes: Juridification of

Industrial Relations, 27(1) Indian Journal of Industrial Relations (1991). 26

Government of India Gazette, 1969.

Labour Court (Section 7)27

The power of appointment of a Labour Court is vested with the Appropriate

decide any dispute relating to subsistence allowance.

Industrial Tribunal (Section 7A)31

A Tribunal consists of one person only to be appointed by the appropriate government.

Only industrial disputes can be adjudicated upon by an industrial tribunal.32 All

to create contracts and to change contracts.34

settlement. Adjudication consists of settling disputes through intervention by third

party appointed by the government.

About 90 to 95 per cent of disputes are referred to adjudication machinery on an