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Industrial Disputes and The Alternate Dispute Resolution System Under The Industrial Disputes Act, 1947: A Critical Study

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CHAPTER I

INTRODUCTION

Disputes are endemic in any organization. Even in a well - knit family where

parental, maternal and fraternal feelings are supposed to be pervasive, they are not

ruled out. Thus, in an industrial set up, because of the dissimilar characteristics of the

groups which out of necessity come together to engage in the production of material

goods or services, the disputes or difference aspects is bound to loom large.

In India the industrialization process started during the middle of the 19th

century with the advent of the Britishers1.The first cotton mill in India was established

in 1851 in Bombay and first jute mill in 1855 in Bengal. This was the beginning of the

modern factory system in India.2 At the time of India‟s independence, mixed

economy was the basis for economic development and perhaps it was the need of the

hour. However, with the change in world‟s economic scenario, India made

considerable change in its economic and industrial policy, which in effect meant

emergence of the period for liberalization when government controls were lifted and

the public sector giants were allowed to disinvest and channeling agencies were

introduced for the purposes of restructuring the industries3.

The liberalized industrial policy fascinated a large number of private investors,

both national and international, to invest in the Indian economy on a large sale. The

multinational companies are availing this golden opportunity in a remarkable way to

share Indian markets. Now a day, it is seen that, certain non agricultural land and even

agricultural land also in the name of special Economic Zone is taken over by

Industrialists in order to establish various industrial plants. Point is that, it is very

difficult to imagine the progress of economy without industry. Under this changed

industrial scenario, dispute resolution mechanism has assumed great importance

because more the industries established, more labour force would be required and

recruited and consequently, more labour problems would crop up.

1 Agarwal S.L.,Labour Relations Law in India 1980 at3.

2 Dr.Goswami V.G.,Labour and Industrial Law, 2008 at 245.

3 Ibid Preface.


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Good Industrial relations is a pre requisite for the successful industrialization

in any country. It is therefore, imperative to evolve a suitable system of machinery

for settling industrial disputes and also for preventing them.

For resolution of disputes there is a legal system in every human society. We

know the maxim, “where there is a right there is a remedy”, and our courts are also

working hard to achieve this ideal that where there is a wrong there must be a remedy.

This legal pattern of resolving disputes has resulted in number of pending cases.

Courts are overcrowded with cases. According to data available with the apex court,

the number of pending cases with the Supreme Court is 61300 pending matters as on

28/02/20154. As per the data near about 44.5 lakhs cases are pending in High Courts

in India and 2.6 corers cases are pending on lower courts up to the year ending 20135.

Hence began the search for alternative to the conventional court system.

In India, under the relevant provisions of the Industrial Disputes Act, 1947

various machineries of dispute resolution namely conciliation and mediation,

collective bargaining, investigation, Arbitration for settlement of Industrial Disputes

have been provided. Although we are having such strong alternative dispute

resolution system by way of conciliation and mediation, collective Bargaining,

negotiation, arbitration still our courts are overburdened with the cases regarding

Industrial Disputes.

Taking in to account the importance of Alternate Dispute Resolution

mechanism, let us find out what are various obstacles in the smooth working of this

system and what will be tentative solutions to this problem.

1.1 Historical Perspectives of Alternate Dispute Resolution (Herein

after called as ADR) in India:

ADR is an abbreviation that stands for Alternative dispute resolution. It also

stands for Appropriate Dispute Resolution. It refers to all those methods of resolving

disputes, which are alternatives for litigation in the courts. It refers to an assortment of

dispute resolution procedures that primarily serve as alternatives to litigation6 and are

4 http://supremecourtofindia.nic.in/pendingstat.htm visited on 1-4-2015.

5http://www.ndtv.com/india-news/more-than-3-crore-court-cases-pending-across-country-709595

visited on 1-4-2015 6 Bryan A. Garner (Ed.), Black’s Law Dictionary, 2004 at 112-113 also defines ADR as a procedure

for settling a dispute by means other than litigation; In fact all ADR processes share one essential

characteristic that they differ from litigation in a court of law.

http://supremecourtofindia.nic.in/pendingstat.htm

http://www.ndtv.com/india-news/more-than-3-crore-court-cases-pending-across-country-709595


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generally conducted with the assistance of a neutral and independent third party. ADR

is by no means a recent phenomenon, though it has been organized on more scientific

lines, expressed in more clear terms and employed more widely in dispute resolution

in recent years than before. The basic ADR methods, however, have been in existence

in some form or the other in the days before the modern justice delivery system was

introduced by the colonial British rulers.

Vedas stress on the importance of harmonious industrial relations. The Vedic

literature contains many references on the subject of industrial relations. W.N.

Morland, a scholar on industrial relations states “It has been realized in the Vedas that

one of the important factors necessary for happiness in a group or a community is

good mutual relations. A sense of trusteeship was prevailing during the vedic period.

It is a fact that the institution of mediation and conciliation had been conceived during

this period. Industrial relation machinery during the Vedic times consisted of

“Madhyamas” (conciliators or mediators) men of position and influence in the

society.

As per Dharma, industrial dispute used to be settled at first instance mutually

by employer and employees themselves. If it could not be resolved then it used to be

referred to “Madhayamas” (mediators or conciliators). In case the industrial dispute

could not be resolved even through conciliation or through mediators, it used to be

referred to a board appointed by the king.7

Again, the Panchayat, in its original conception was, primarily, an instrument

of law and order, a means of conciliation and arbitration within the community8. The

concept of parties settling their disputes by reference to a person or persons of their

choice or private tribunals was well known to ancient India, long before the king

came to adjudicate on disputes between persons. Such disputes were quite peacefully

decided by the intervention of the Kulas (family or clan assemblies),Srenis(guilds of

men following the same occupation), Parishads (assemblies of learned men who knew

law) and such autonomous bodies.9

7 Dr. Onkar Sharma, Industrial Jurisprudence in Vedic and Ancient Literature, Awards Digest: Journal

of Labour Legislation [Vol. XXXVII : 5-8] at 61. 8 Ashwanie Kumar Bansal, Arbitration and ADR, 2005, at 44.

9 William Sheffield & P.C.Rao, Alternative Dispute Resolution, 2006, at 27.


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The ADR procedures consist of negotiation10

, conciliation, mediation11

,

arbitration, collective bargaining, Expert Determination12

, Early Neutral Evaluation13

by a third person, Mini-trial14

, Dispute Resolution Boards15

, and etc.

ADR techniques are extra-judicial in character .They can be used in almost all

civil matters which are capable of being resolved, under law, by agreement between

parties.16

The advantages of ADR are several, it can be used at any time, even when a

case is pending before a court of law, it is speedy and inexpensive, ADR is not bound

by strict procedural laws so it is flexible, it can be used with or without a lawyer, it

helps in the reduction of the work-load of the courts and thereby help them to focus

attention on the cases which ought to be decided by courts.

1.2 Statement of the Problem and Its Significance:

The concept of “Industry” postulates partnership between capital and labour. Joint

contribution of capital and labour leads directly to the production which the industry

has in view.

The present dynamic age in India is marked by tremendous growth in the field

of Industrialization. In this modern age, industry plays an important role in the

national economy.

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Negotiation is an ADR process by which the parties resolve their disputes themselves by arriving at a

mutually acceptable amicable solution. In this mode of settlement the parties or their

representatives128 voluntarily sit together themselves and negotiate directly by putting the factual

content of the dispute and discuss their claims and counter claims, earmarking the extent to which they

can forego their claims and their readiness to accommodate each other. (See S.S. Mishra, Law of

Arbitration and Conciliation in India (With Alternative Dispute Resolution Mechanisms (Central Law

Agency, Allahabad, 1st Edn., 2007). 11

The Black‟s Law Dictionary defines mediation as a method of non binding dispute resolution

involving a neutral third party (mediator) who tries to help the disputing parties to reach a mutually

agreeable solution.( Bryan A. Garner (Ed.), Black’s Law Dictionary at 1003. 12

Expert Determination is an ADR process in which the parties agree to appoint an independent third

party, who is an expert in the field to which the dispute relates so as to adjudicate their dispute on

merits. 13

„Early Neutral Evaluation‟ is an ADR process where a concise presentation given to an experienced

neutral followed by an assessment of the case by the neutral at an early stage forms the baseline for a

consensual resolution of the dispute between the parties. 14

A Mini Trial consists of an abbreviated adjudication like presentation of evidence and arguments to a

neutral joined by the high level principals of each of the disputant parties, which is then followed by

negotiations between the principals. Taken from (Frank E.A. Sander and Stephen B. Goldberg, “Fitting

the Forum to the Fuss: A User Friendly Guide to Selecting an ADR Procedure”, in P.C. Rao and

William Sheffield (Eds.), Alternative Dispute Resolution, 1997 at 331 ). 15

Dispute Review Board (DRB) is a tribunal consisting of experienced and impartial expert reviewers

for facilitating resolution of disputes related to a particular project or a particular type of dispute. 16

Supra note 10 at 24.


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Co-operation and conflicts are two forms of interaction between workmen

and management. Whether it is a developed or developing economy industrial co-

operation is essential to achieve the individual, institutional, industrial and national

objectives.

Disputes in industry is so universal that, even in the best managed

establishment where the co-operation between the labour and management is

maximum, the workmen and the management are occasionally subjected to the stress

and strain of different manifestation of conflicts.

With the growth of industrialization, the relationship between capital and

labour is becoming more and more complicated. There is inbuilt diversity in these

two classes in many ways i.e. they are socially economically, culturally, financially

different. Both are having dissimilar interests, so chances of disputes, conflicts are

more there in industry.

When these conflicts between capital and labour expressed in its overt

manifestations i.e. strikes, lockouts, Gherous not only parties to the disputes are

adversely affected but also the community at large and the national economy. The

losses to the worker, employer and the economy are always greater than the benefits

the workmen or the employer might gain. Furthermore, the community is denied

from number of essential services and goods. At times the economic life of the

country may get disturbed seriously.

In the light of this, it is an absolute necessity to make sincere efforts to resolve

the conflicts amicably the moment it arises or is imminent. Then what techniques

could be employed to bring about peaceful settlements of industrial disputes?

Industrial Disputes Act, 1947 the main object of which is to provide a

machinery and forum for the investigation and settlement of Industrial Disputes and

for purposes analogous and incidental thereto, provides for some alternative dispute

resolution mechanism such as:

Negotiation:

Negotiation is one of the principal means of settling labour disputes. The

Industrial Disputes (Amendment Act), 2010 had substituted a new chapter for chapter

II-B, providing for reference of certain individual disputes to grievance Settlement

Authority. Under this Chapter, Section 9C has made it obligatory for the employers

to make provision for Grievance Settlement Authority for settlement of industrial


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disputes connected with an individual workman employed in an establishment in

which twenty of more workmen are employed or have been employed on any day in

the preceding twelve months.

Collective Bargaining:

Collective Bargaining is a technique by which dispute are resolved amicably,

agreement, rather than by coercion. It is a process of bargaining between employers

and workers, by which they settle their disputes relating to employment or non-

employment, terms of employment or conditions of the labour of the workman,

among themselves, on the strength of the sanction available to each side.

Conciliation:

Conciliation is very important in resolving industrial disputes. It is the art of

opening a dialogue between the parties to a dispute and helping them to arrive at a

compromise settlement. To be able to do this, a conciliation officer must win the

confidence of the parties.

Section 4 of the Act authorizes the “appropriate government” to appoint

conciliation officers, charged with the duty of mediation in and promoting the

settlement of industrial disputes. Section 5 authorizes the appropriate government to

constitute a Board of Conciliation for promoting the settlement of industrial disputes.

Investigation:

Section 6 of the Industrial Disputes Act, 1947 empowers the appropriate

Government to constitute a court of Inquiry for enquiring into any matter appearing to

be connected with or prescribed by S. 11, S. 14 requires such Court to enquire into the

matters referred to it and report thereon to the appropriate Government ordinarily

within a period of six months from the commencement of the inquiry. This function

of the court is in the nature of an investigation.

Arbitration:

The resort to arbitration procedure may be compulsory or arbitrary,

compulsory arbitration is the submission of disputes to arbitration without consent or

agreement of the parties involved in the dispute and the award given by the arbitrator

being binding on the parties to the dispute. On the other hand in case of voluntary

arbitration, the dispute can be referred for arbitration only if the parties agreed to the


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same. Section 10 A of the Industrial Disputes Act 1947, provides only for voluntary

reference of dispute to arbitration.

Despite The Industrial Disputes Act, 1947 provides these above mentioned

alternate dispute resolution system to settle the disputes amicably; still our courts are

overburdened with the cases. Parties are inclined more to approach to Courts and

Tribunals for the settlement of their disputes. There might be something going wrong

with these machineries which need to be addressed through this research work. Hence

it is intended to critically analyze the working of these machineries under the Act of

1947.

1.3 Importance and Relevance of the Topic:

It cannot be gainsaid that industrial peace and amenity are of great

significance in a developing country lie India. Peaceful and harmonious

relationship between the partners in production would ensure to workers economic

security and also facilities economic development of the nation. Perpetual protests

and continuous confrontations, while distrust and disharmony among employees and

workmen, would also hamper the nation‟s economic progress.

In the industrial dispute, human relations are at stake. To maintain good

relations between these partners in production, patience on the part of workers as well

as employers is essential. In earlier days people used to have lot of patience, but today

they are impatience. It may be due to various factors such as aggressiveness, feeling

of insecurity, lack of intake of nutritious food and so on.

In all these issues, “Make in India” agenda of the Central Government adds

requirement to critically evaluate the working of dispute settlement machineries under

the Act of 1947. The said initiative is launched by the Prime Minister Narendra Modi

on 25th

September 2014, which aims at in encouraging industries to manufacture their

products in India. The main focus of this initiative is job generation in India and

because of this, number of people will get employment in the industries. But for the

success of this programme, it is required that workers who got employment and their

employer must have cordial relations at workplace. In case of any difference it must

be sorted out and settled amicably and speedily.

With the judicial system in most of the countries including India being

burdened with cases, any new case takes a long time to be decided and till the time the

final decision comes, there is a state of uncertainty, which makes any activity almost


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impossible. On the other hand taking into account the place of industry in the national

economy, financial condition of workers, speed of production which is expected in

this globalized world there is need to settle these disputes quite speedily which is not

possible in traditional judicial system. To get out of this maze of litigation most of

the countries encourage alternative methods of dispute resolution.

In the light of this scenario, the machinery provided under the Industrial

Disputes Act, 1947 for the settlement of Industrial Disputes assumes significance and

is of great consequence. Industrial Disputes Act, 1947 provides for an in-built

alternate dispute resolution system by way of negotiations, Collective bargaining,

arbitration, conciliation, mediation, and investigation. But if we look into practical

working of this machinery, we will realize that, this machinery is not that much

successful in resolving disputes between the parties. There is increasing desire of the

parties for compulsory adjudication. Therefore, a need is felt to have a fresh look

upon the working of this machinery.

The National Commission on Labour had felt that, there was need to bring

reforms in the mechanism of dispute settlement under the Industrial Disputes Act,

1947; several attempts to modify the legislative frame work for regulating Industrial

relations and the procedure for adjudication of Industrial Disputes have failed

Through this research work an attempt is intended to find out the obstacles in

the effective functioning of this ADR system under Industrial Disputes Act, 1947 and

to suggest some solutions to make this system more effective and useful.

1.4 Justification for Selecting the Research Problem:

Alternative Dispute Resolution is rapidly developing at national and

international level, offering simple methods of resolving disputes. Increasing trends

of ADR service can easily be inferred from the growth of “Arbitration Clause” in

majority of contracts.

When we look into the position of alternative dispute resolution system which

is available in other branches of law like Family Law, the ADR has got much

recognition in settlement of family disputes. In civil matters also, by amendment to

the Code of Civil Procedure in the year 2002 Section 89 has been included in the code

which gives importance to mediation, conciliation and arbitration. In this area also

ADRs has done a quite satisfactory job.


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The other legislation which has given more emphasis on the alternative

dispute resolution is the National Legs Services Authority Act, 1985. Under this Act,

Lok Adalats have acquired wide acceptance among the public as the results are quick

and less expensive.

It is said that, the first avenue where the conciliation which is an important

component of ADRs has been effectively introduced and recognized by law was in

Labour Law, namely The Industrial Disputes Act, 1947. When we look into the

working of these alternate dispute resolution systems under Industrial Law, it is seen

that, it is not satisfactory. While evaluating the working of conciliation machinery,

National Commission on Labour itself indorsed that the working of the conciliation

machinery involves delay. Voluntary arbitration also has not proved to very popular

and day by day there is increasing desire of the parties to industrial disputes for

compulsory adjudication. As far as collective bargaining is concern in India, the

tradition of free collective bargaining has always been weak; consequently, there is

continuous and systemic surveillance over industrial disputes on the part of the

Government by resorting to compulsory adjudication.

So, in the light of this scenario it is worthwhile to evaluate critically the

working of this alternate dispute resolution machinery which is provided under the

Industrial Disputes Act, 1947.

1.5 Objectives of the Research:

1. To study various international conventions as well as recommendations and

Constitutional provisions which give strong base to these ADR techniques to settle the

Industrial Disputes.

2. To study what alternative methods are available in various countries like U.K.,

U.S.A., Australia, Russia, France and China to resolve industrial disputes.

3. To study various alternative disputes resolution systems available under the Industrial

Disputes Act, 1947 to settle Industrial Disputes and to have a comparative analysis of

working of ADR under the Industrial Disputes Act and Arbitration and Conciliation

Act, 1996.

4. To have a critical analysis of working of these machineries under the Industrial

Disputes Act, 1947 and to identify lacunae (if any) and obstacles in the effective

working of these machineries under the Industrial Disputes Act, 1947.


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5. To suggest some solutions for the effective functioning of the alternate dispute

resolution machinery under the Industrial Disputes Act, 1947.

1.6 Hypothesis:

In order to comprehend above objectives of the research work, following hypothesis

has been framed.

1. Majority of industries don‟t have recognized unions which is a pre requisite for the

successful collective bargaining.

2. Statutory compulsion regarding formation of Works Committees and Grievance

Redressal Machinery is their only in the Act. Practically these committees have not

been constituted by majority of industries.

3. The Machinery for the settlement of Industrial Dispute under the Industrial Disputes

Act, 1947 provides only a lip service in resolving Industrial Disputes.

4. It is impaired by undue political influence and adamant nature of parties to the

Industrial Dispute.

5. Use of Arbitration in the case of an industrial dispute is very rare.

6. Large scale ignorance on the part of workers (particularly small scale industries)

about these machineries under the Industrial Disputes Act, 1947.

1.7 Research Methodology Adopted:

In this research work doctrinal as well as non doctrinal method of research is

followed. In order to achieve the object of the study descriptive method and analytical

methods are adopted. It is descriptive so far as it deals with what exactly the Industrial

Disputes Act is, its object, provisions and various modes of settlement of Industrial

Disputes. It is analytical in the way it tried to analyze and make a critical evaluation

of the working of these ADR methods under the Industrial Disputes Act, 1947.

1.8 Type of Research:

In this research work, researcher has followed both doctrinal as well as non

doctrinal method of research.

A doctrinal research means a research that has been carried out on a

proposition or propositions by way of analyzing the existing statutory provisions and

cases by applying the reasoning power. In this research work, for understanding the

working of ADR system under the Industrial Disputes Act, it is essential to study


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what all ADR modes are available under the Industrial Disputes Act, 1947 for the

settlement of industrial disputes. Hence, for this part i.e. Industrial Disputes and

various alternative methods available under the Industrial Disputes Act for its

settlement, the researcher is banked upon doctrinal method of research.

But the present research topic requires the empirical method of research also,

because for analyzing the working of this alternative machinery under the Industrial

Disputes Act, it seems necessary to the researcher, to know from the people connected

with this field, e.g. workers, trade union leaders‟, employers, conciliation officers and

etc. Hence, empirical method of research is followed by the researcher.

1.9 Sources of Data:

The research work undertaken by the researcher is based on the collection of

data from primary and secondary sources.

The research requires the study of International Instruments, Foreign statutes

as well as Indian Laws. Among the International instrument, researcher has referred to

UDHR and various conventions and recommendations passed by the International

Labour Organisation on the research topic. Similarly report of the National

Commission on Labour is also taken into consideration.

Apart from this, primary data is collected from employers, workers, trade

union leaders and officers having task of conciliation. For this purpose, researcher has

framed and printed questionnaire for these three categories of people viz. worker,

employer and officers.

As far as workers are concerned, workers who are working in the factories,

banks, domestic workers, hospital workers, Mathadi workers, S.T. workers and those

working in building constructions are interviewed with. Similarly office bearers of

trade unions are also interviewed. Academic discussion with the Advocates who are

dealing with Labour disputes is also carried out by the researcher in order to find out

practical hurdles in the smooth working of these machineries under the Industrial

Disputed Act, 1947.

Secondary data is collected from text books on Industrial Law, Industrial

relations, research articles, journals, E-books and E-Journals, Magazines, News paper

clippings, and etc.


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The APA style of citation given in the Blue Book is followed for making

citations.

The researcher with the help of these two methods collected the data and analyzed the

same.

1.10 Universe:

Data from workers and employers is collected from the Waluj MIDC, Shendra

MIDC and Chikalthana MIDC of Aurangabad city i.e. workers, employers working in

these areas were selected for the purpose of data collection.

As far as data from officers is concerned, total Marathwada Region was

selected. Labour Commissioner of this region, 2 Assistant Labour Commissioners

working in the Aurangabad city, 6 Labour officers in the Aurangabad city, 1 labour

officer each from Jalna, Beed, Parbhani, Hingoli, Latur, Nanded and Osmanabad were

selected for interview.

Sample:

Workers, employers and conciliation officers from Aurangabad city were used

as sample.

Sample Size:

Sample size is as follows:-

1. Labour Commissioner-1.

2. Assistant Labour Comissioner-2

3. Labour Officers-10.

4. Workers-105.

5. Employers-100.

1.11 Sampling Method:

Sample for this research work is collected through interview (questionnaires)

and observation method for which random sampling method was adopted.

The primary data collected from the sample is analyzed to find out actual

working of these machineries under the Industrial Disputes Act, 1947 and to suggest

some ways and solutions for improving the working of these machineries under the

said Act. For analyzing the data, Microsoft Excel and simple tools of statistical

analysis are used to draw reliable conclusions.


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1.12 Limitations:

It is important to critically examine the whole study and signal out the

limitations. Such limitations can be taken into account while finding avenues for

future research under the said theme.

As far as conceptual frame work part is concerned, the researcher has banked

upon only selective and relevant concepts i.e. definition of Industry, Industrial

Dispute, Workmen and Appropriate Government. Only bird‟s eye view is there as

research work is dealt with settlement of Industrial Disputes through conciliation,

negotiation, mediation and arbitration. However, it does not present any significant

problem to the present study as the researcher has referred to many judicial decisions

under the respective concepts.

In this research work, the researcher has focus on settlement of industrial

dispute through the alternative dispute resolution methods i.e. negotiation,

conciliation, arbitration court of enquiry and etc. That's why working of Industrial

adjudication by Labour Court, Industrial Tribunal and National Tribunal is not

covered in depth in the research work.

As far as judicial contribution in strengthening ADR under the Industrial

Dispute Act is concerned, only those cases in which Supreme Court and High Courts

emphasized through their decisions to settle the industrial disputes through the

alternative methods of dispute settlement are covered in this research work. Decisions

of the Courts between the years from 1954 to 2014 are discussed.

In collecting data through questionnaires the researcher has selected

Aurangabad city as universe, the reason for the same is that, as the Aurangabad is the

fastest developed city in the Asia17

. It tops the chart among the developing cities.

Aurangabad has a renowned industrial area and is divided into four zones namely

Chikalthana, Waluj, Chitegaon & Shendra MIDC It has around over 195 units of large

scale enterprises which has generated 80,500 jobs with total investment of Rs.7,384

cr. It has 3,405 medium and small scale industries generating 36,871 jobs with an

investment of 40.486 cr.18

17

http://www.mlm4india.com/mlm-software-aurangabad-maharashtra.html (visited on 2-5-2015) 18

http://aurangabad.nic.in/htmldocs/District_Vision2020/Chapter%2012.%20Industry.pdf (visited on

2-5-2015)

http://www.mlm4india.com/mlm-software-aurangabad-maharashtra.html

http://aurangabad.nic.in/htmldocs/District_Vision2020/Chapter%2012.%20Industry.pdf


14

So it is justified if it is representing the entire nation as far as this research

work is concerned. Secondly as the researcher is resident of Aurangabad and

presently working in the Aurangabad, so from that point of view it was convenient for

her to collect the data from Aurangabad city.

One of the major limitations of the present research study is that in the case of

employers, quantity of the sample is comparatively less as compared to actual

population of the selected universe. The reason for the same is that employers were

quite reluctant to fill the questionnaire. Some employers give the reason of

„confidentiality‟, some said that in our industry there is no dispute and everything is

okay and some employers tactfully avoided filling the questionnaire.

Apart from field visits, the questionnaire was sent by Email to approximate

100 employers. However, very few replied to the same.

In the case of data from the conciliation officers also Labour Commissioner of

Marathwada Region and labour officers from Beed, Usmanabad, Nanded and Latur

could not able to find time due to their heavy workload to respond the questionnaire.

So it could be possible for the researcher to collect data from 2 Assistant Labour

Commissioners and 8 Labour officers from Aurangabad, Jalna, Parbhani and Hingoli.

1.13 Review of Literature:

First, to put the study in its proper context, majority of relevant written material on the

topic like books, journal articles, Government reports have been referred.

International Instruments like UDHR and various conventions and

recommendations of the International Labour Organization have been referred.

Commentary written by N.Vaidyanathan19

, Dr.N.Maheshwara Swamy20

, N. Jintendra

Kumar & Ajay Bhola (2008), Prof. Ahmeduallah Khan21

, which deals with structure

and gist of various ILO Conventions and Recommendations passed by ILO and

ratified by India is discussed in these books very clearly.

Statues of industrially developed countries like UK, USA, Canada, Russia,

France, China and Australia which gives the sketch of industrial relations machinery

for the settlement of industrial disputes in these respective countries have been

19

N. Vaidyanathan, I.L.O. Conventions and India, 1971. 20

Dr. N. Maharashwara Swamy, Impact of I.L.O. Standards on Indian Labour Laws, 2007. 21

Prof. Ahmedullah Khan, Commentry on the International Labour Organisation and the Indian

Response, Asia Law House Hyderabad, 2005.


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referred. For this purpose, relevant part of writings of internationally renowned

researchers, formulators, consultants and authors in the field of Industrial Law viz.

Samules22

discussed the machinery for the settlement of industrial disputes in U.K.,

Allan Flanders23

, B.C. Roberts,24

Victor Feather25

, Clegg, Mary Sur26

, discussed the

comparative study of development of collective bargaining in India and various

countries like U.K., USA., Canada, France. John C. Wood (1972), A. Sivananthiran27

,

Zhanna Anatolevna Gorbacheva (2011) , Michel Despax Jacques Rajot28

, Michael

Farrel29

, are studied in detail.

In Indian context, Indian Constitution has provided with number of

fundamental rights to the citizens of India. Particularly it has made speedy justice as

fundamental right under Article 21 of the Constitution of India. Article 39-A ordains

the state to secure a legal system which promote justice on the basis of equal

opportunity. Relevant topics from the writings of M.P.Jain30

, Dr.J.N.Pandey31

, and

H.M. Sheervai32

have been studied. Samant S.R33

, Chandra Mahesh34

, E.M.Rao35

,

dealt with the concept of industrial Jurisprudence, industrial Law, its sources,

principles of Industrial Law and etc. As per Samant S.R. knowledge of the historical

development of the industrial law will assist the negotiation and conduct of industrial

disputes. E.M. Rao in his book tried to cover as exhaustively as possible the

legislative and judicial trends in respect of Labour laws falling four major categories

namely, welfare and working conditions, wages, industrial relation and social

security.

22

Samules, Industrial Law, 1949. 23

Allan Flanders, Trade Unions, 1962. 24

B.C. Roberts, Industrial Relations Contempory Problems, 1962. 25

Victor Feather, The Essence of Trade Unionism, 1963. 26

Mary Sur, Collective Bargaining, 1965. 27

A. Sivananthiran , prevention and settlement of Labour Dispute in South Asia,1998. 28

Michel Despax Jacques Rajot , Labour Law in France, 2011. 29

Michael Farrel, Collective Bargaining in Canada, 2012. 30

Jain M.P., Indian Constitutional Law, 2011. 31

Dr.J.N.Pandey, Constitutional Law of India, 2007. 32

Sheervai H.M., Constitutional Law of India, 2006. 33

Samant S.R., Industrial Jurisprudence, 1961. 34

Chandra Mahesh , Industria;l Jurisprudence, 1976. 35

E.M.Rao, Industrial Jurisprudence, 2004.


16

There is no dearth of literature on the methods of settlement of Industrial

Disputes. There are number of books which have focused on methods of settlement of

Industrial Disputes like:

Punekar S.D.36

dealt with the methods of industrial peace. As per the author, internal

machinery which aims at prevention of industrial disputes is any time preferable to

external machinery to be used for the settlement of industrial disputes.

Giri V.V.37

tried to include most of the labour problems in one integrated publication.

One important problem is of maintaining good industrial relations and settlement of

the industrial dispute by the machinery provided under the Industrial Disputes Act,

1947. As per him; as long as compulsory adjudication exists as machinery for the

settlement of disputes, the voluntary system can hardly succeed.

Harry H.Platt38

while speaking on current Criticisms of labour arbitration

opined that labour arbitration is a tool whereby management and unions can increase

their vigour, their creativeness and their voluntary collaboration. Similarly Shantilal

Shah39

, while writing on settlement of industrial disputes mentioned that the only

remedy seem to be to appoint as arbitrators not only judicial persons but persons who

have experience of industry, management and labour.

Mehotra S.N.40

in chapter 29 of his book dealt with causes of industrial

disputes and critical estimate of various dispute settlement machineries under the

Industrial Disputes Act, 1947. He expressed the need to restrict the cases of industrial

disputes to be referred to adjudication is to be checked effectively. Rustumji R.F41

,

discussed in depth about the various authorities under the industrial Disputes Act,

1947 for the settlement of industrial disputes.

Arya V.P.42

has discussed the provisions of the Industrial Disputes Act, 1947

relating to the machinery and methods of investigation and settlement of industrial

disputes.

In the OECD43

Industrial Relations Programme44

, it was recommended that

“greatest single contribution to avoiding dispute within the enterprise is by good

36

Punekar S.D., Industrial peace in India, 1952. 37

Giri V.V., Labour Problems in Indian Industry, 1957. 38

Harry H.Platt, Arbitration and the Law ed. By Jean T. Mckelvey, 1959. 39

Shantilal Shah, Current problems of labour in India ed.by A.M.Loren. 40

Mehotra S.N., Labour Problems in India, 1964. 41

Rustumji R.F., , The Law of Industrial, 1964. 42

Arya V.P., A Guide to the Settlement of Industrial Disputes, 1965.


17

managerial industrial relations practices. It also recommended that to reduce the

incidence of industrial disputes, effective negotiating procedures are necessary.

John Zechariah45

, Rao S.B.(1984) opines that collective bargaining helps in

establishing the harmonious relations between capital and labour and considered to be

a step towards industrial democracy. Similarly as per Bulchandani46

, collective

bargaining as a means of settling the industrial disputes is by far the best and peaceful

method. It can avert the industrial disputes successfully.

Debi S. Saini47

concludes that the crux of industrial relations problems in India

is the lack of trust between parties. The study also notes that the working of

conciliation machinery is an important aspect of industrial relations, where State plays

a major role in the processing of industrial disputes at various institutional levels.

K. Madhavan Pillai48

, while evaluating the Arbitration said that in spite of the

powerful advocacy of many national leaders, the voluntary arbitration method has not

attracted more in Indian industries.

R.S. Tiwari49

has done the assessment of the system of industrial relations

machinery under the industrial Disputes Act, 1947. P.R.Sinha, Indubala Sinha and

Seeme Priyadarshani50

, expressed the need to force workers and employers to enter in

to formal collective bargaining through their representatives.

Malhotra O.P.51

has done a detail discussion on the Arbitration and

Conciliation Act, 1996. The same author has written an excellent commentary on the

Industrial Disputes Act, 1947 which is in three Volumes and dealt with the methods

of settlement of industrial disputes and other legislative provisions contained in the


43

Organisation for Economic Co-operation and Development. 44

Labour Disputes: A Perspective. 1979. 45

John Zechariah, Administration of Industrial Disputes, 1984. 46

Bulchandani K.R., Industrial Law, 1981. 47

Debi S. Saini, „Failure of Conciliation: Perceptions and Realities‟, Indian Journal of Industrial

Relations, Vol.28 (2), 1992. 48

K. Madhavan Pillai, Labour and Industrial Law, 1998. 49

R.S. Tiwari, New Challenges on Industrial Relations, 1999. 50

P.R.Sinha, Indubala Sinha and Seeme Priyadarshani, Industrial Relations, Trade Unions and Labour

Legislation, 2004. 51

Malhotra O.P., The Law and Practice of Arbitration and Conciliation, 2002.


18

Aparna Raj52

, observes that the establishment of a sound or harmonious

industrial relations system is a central theme for Governments, employers, workers

and their representatives, in their endeavour to achieve economic and social

development.

Singh B.D53

has stressed the need for Lok Adalats in industrial disputes, in

spite of conciliation being available under the Industrial disputes Act, 1947.

The Hon'ble Ex. President of India Dr. APJ Abdul Kalam has also been

supportive of amicable settlement of disputes and has advocated the need to

encourage mediation as an alternative dispute resolution (ADR) mechanism in the

following words in The 12th Justice Sunanda Bhandare Memorial Lecture –

Judiciary and its multidimensions (2006). “Mediation and conciliation is definitely a

faster method of dispute resolution compared to the conventional Court processes.

Only thing is that we have to have trained mediators and conciliators, who can see the

problem objectively without bias and facilitate affected parties to come to an agreed

solution. In my opinion, this system of dispute resolution is definitely a cost effective

system for the needy... Mediators must possess the qualities of being a role model in

the society, impeccable integrity and ability to persuade and create conviction among

the parties.”

Zafar Hussain and Afzal Wani54

in their research article “Application and

Enforcement of International Labour Standards In India: a Critique”, dealt with the

deficiencies in the Indian industrial relations framework with suggestions to fill the

gaps in the area of collective bargaining.

Jerome Joseph55

, in his research article explained the Ecosystem of Industrial

Relations. He expressed the need to introduce some changes in disputes resolution

system.

The first change proposed is to replace the Works Committee with an

Organizational Ombud person or Ombuds Committee which is representative,

impartial, and independent to deal with employee grievances and disputes internally,

52

Aparna Raj, Industrial Relations in India- Issues, Institutions and Outlook, 2003. 53

Singh B.D. , Industrial Relations Emerging paradigms, 2005. 54

Zafar Hussain and Afzal Wani, Application and Enforcement of International Labour Standards In

India: a Critique, ( Journal of Indian Law Institute, Vol.53, 2011). 55

Jerome Joseph ,Quo Vadis, Industrial Relations Disputes Resolution...? (The Indian Journal of

Industrial Relations, Vol. 50, No. 1, July 2014).


19

amicably and honorably. The second change can be by making a strategic shift from

government run disputes resolution machinery to a professionally run disputes

resolution machinery within the framework of “minimum government, maximum

governance”. This will call for deregulation of the disputes resolution processes

especially with reference to the conciliation machinery. This will mean conciliation

services to deal with industrial relations disputes will be offered both by government

and professional service organizations, will have the same powers as they have now

and will be fee based.

M.J.Arputharaj and R. Gayatri56

, in their research article titled “A critical

analysis on efficacy of mechanism to industrial disputes resolution in India,”

highlighted the legal and practical aspects of industrial dispute resolution in India and

suggested that the Presence of a powerful collective bargaining machinery and

proactive communication between the management and the unions not only

minimizes the grievances but also promotes healthy industrial relations.

Interpretations made by judiciary and judicial findings on important issues of

ADR under the Industrial Disputes Act, 1947 are culled out from cases decided by the

Supreme Court and various High Courts in the territory of India. Hon‟ble Supreme

Court while deciding the case of Hindustan Hosiery Industries vs F. H. Lala And

Another 57

held that the Industrial Disputes Act is intended to be a self-contained one

and. it seeks to achieve special Justice on the basis of collective bargaining

conciliation, and arbitration. Again Hon‟ble Supreme Court of India held that the

policy of law emerging from Industrial Disputes Act and its sister enactments is to

provide an alternative dispute resolution mechanism to the workmen, a mechanism

which is speedy, inexpensive, informal and unencumbered by the plethora of

procedural laws and appeals upon appeals and revisions applicable to Civil Courts.58

Further The Supreme Court of India in Virudhachalam vs. Management of Lotus

Mills,59

after taking note of various provisions of the Industrial Disputes Act, the

Court while describing the principle of collective bargaining held that the Act is based

56

M.J.Arputharaj and R. Gayatri, A critical analysis on efficacy of mechanism to industrial disputes

resolution in India, ( International Journal of Current research and Academic Review, Vol 2, No 8,

August, 2014). 57

1974 AIR 526. 58

Premier Automobiles Ltd vs Kamlekar Shantaram Wadke, 1975 AIR 2238, 1976 SCR (1) 427. 59

(1998) 1 SCC 650.


20

on the principle of collective bargaining for resolving industrial disputes and for

maintaining industrial peace.

Universities are the pioneers in various kinds of research. Most of the studies

available on the subject are theses. The studies and research works carried out on the

topic of Industrial dispute and dispute resolution through negotiation, conciliation and

arbitration is considered by the researcher at the relevant point.

In the early 1950s an attempt to study the functioning of the conciliation

machinery in India was made by the Indian Law Institute, New Delhi. It deals with

the administrative procedure involved in the conciliation proceedings.

Basanagouda Patil,h S. (1973), in his research work titled “ Conciliation a

Study into its functioning and effectiveness :Special reference to Karnataka”

attempted to study the functioning of conciliation machinery maintained by the

Government of Karnataka and its effectiveness.

K. Malaisamy60

conducted a study on “Conciliation in Settlement of Industrial

Disputes”. He reveals that the efficiency of the conciliation machinery is found to be

an average. The factors, viz. workload, nature of job, attitude of the employer,

conciliation as a complex and thankless job, skill and professional tactics, syndrome

of non-acceptance, non-acceptance of suggestions, non-co-operation of the disputants,

constraints in the time duration and restraints in administrative processes are the

important hindrances in dispute settlement. Inter union rivalries and negative

perception of the employer towards conciliation is also reflected.

Venugopal, E. Has completed his research on “Role of Managament and

Trade Unions in the Settlement of Industrial Disputes: A case study with reference to

Singareni Collieries Company Ltd.Kothagudem, Andra Pradesh.” In his research

work, the researcher has investigated the problem of industrial relations in the

Singareni Collieries Company Ltd., one of the major state enterprises of Andhra

Pradesh. The study also focused on labour management relations in India and

problems involved in the industrial adjudication.

Mankar M.V.61

, in his research work restricted the number of industrial

disputes in Akola, their reasons and method followed to settle those disputes.

60

K. Malaisamy , Conciliation in Settlement of Industrial Disputes: An Empirical Study in Tamil

Nadu‟,1999. 61

Mankar M.V., A Study of industrial Disputes in Akola District, 2012.


21

Singla, Naresh Lata62

dealt with the concept of ADR, its historical growth,

various forms. In the chapter V discussion about Conciliation under the Industrial

Disputes Act is done.

Venugopal, KV63

, has examined the nature and causes of industrial disputes,

the role and involvement of employers, trade union leaders in industrial disputes and

the performance of the settlement machinery. Kulsrestha Saurabh (2014) in his

research work “Alternative Dispute Resolution Mechanism: a Case Study of Delhi

dealt with the conciliation.mediation,arbitration as methods of dispute settlement.

Rahul Suresh Sapkal in his research work, “To Conciliate or Not to Conciliate:

Empirical evidence from Labour Disputes in India” dealt with the Conciliation as a

method of settlement of industrial dispute.

Babu T.64

has pointed out that, Gandhiji belived that if conflict between labour

and capital to be avoided “Labour should have the same status and dignity as capital.

Singh Manjit65

dealt with mediation and conciliation machinery under various

Laws in India. He dealt with various principles evolved by the courts to make the

ADR system effective. He focused on the role of conciliation in ADR system.

Singh Pradeep66

has focused on non- adjudicatory modes of ADR. It is the

study of justice administration in India pointing out the requirement and position of

ADR in India as a strengthening mechanism.

Study carried out by Jain Prakesh R. (Mediation as an alternative dispute

resolution system an analytical study) elaborately discussed the process of mediation

and role of mediation in the dispute resolution. It also focused on the practical

problems that arise while conducting the mediation process.

Apart from the above mentioned literature, Report of National Commission of

Labour, and Royal Commission on Labour wherein these commissions dealt with and

commented upon the working of these machineries have been emphasized upon.

UGC info net journals were also assessed through internet to tress the latest

change in cyber world about Industrial Law.

62

Singla, Naresh Lata, Speedy Justice and Alternate Disputes Redressal, 2012 63

Venugopal, KV, Industrial Relations in the Public and Private Enterprises in Kerala, 2013. 64

Babu T, A Study of Conflict Resolution in Industrial Disputes a Gandhian Approach, 2015. 65

Singh Manjit, Mediation and Conciliation Systems in India: A Study with special reference to state

of Haryana. 66

Singh Pradeep, Alternate Dispute Resolution System in India: Problems and Prospects.


22

Some of the additional resources assessed through internet are Annual

Review, J-store, Oxford University Press and etc.

In this academic Endeavour the researcher has referred various dictionaries

and Encyclopedias such as Black‟s Law Dictionary, New Standard Encyclopedia,

Encyclopedia Britannica, Encyclopedia of Social Sciences and 21st Century

Reference Dictionary.

1.14 Research Design:

The study is made to ascertain the working of these alternative dispute

resolution systems under the Industrial Disputes Act. It examines the working of these

Alternative Dispute Resolution systems.

India being the member of International Labour Organization and

International Labour Organization has enacted various conventions and

recommendations on the topic. These conventions and recommendations relating to

ADR are therefore studied.

The Judiciary in India has in its various decisions highlighted the need of

ADR in the settlement of Industrial Disputes. This study also identifies the decisions

of the Supreme Court and High Courts which strengthens the need of ADR under the


A careful analysis of the working of ADR under the Industrial Disputes Act,

1947 and field work questionnaires in coming up with suggestions for improvement in

the working of ADR systems under the Industrial Disputes Act.

Hence the researcher has designed the research to be descriptive with respect

to the machineries provided under the Industrial Disputes Act and analytical with

respect to the present working of ADR and hence the following chapters are framed.-

First chapter deals with the Introduction. In this chapter introduction of the

research topic and Research Methodology is discussed.

Second chapter deals with the conceptual framework. In this chapter,

concepts of industry, industrial dispute, workmen and appropriate Government are

discussed at the same time a bird‟s eye view on the historical development of ADR in

India is done.

Third Chapter deals with the International Scenario of the subject. In this

chapter various conventions and recommendations passed by International Labour


23

Organization for promoting alternative methods of dispute resolution, in case of

Industrial Dispute are discussed. Provisions of Universal Declaration of Human

Rights relating to labour are also discussed. Machinery available in other countries for

the settlement of industrial disputes and its comparison with India is also discussed.

Fourth chapter deals with the Constitutional perspectives. In this chapter,

Constitutional provisions which give a strong base to the alternative dispute resolution

system are discussed.

Fifth Chapter deals with the various alternate dispute resolution machineries

provided under the Industrial Disputes Act, 1947 for the settlement of Industrial

Disputes, and its critical evaluation. Similarly a comparison between working of

alternate dispute resolution system under Industrial Disputes Act, 1947 and

machineries provided under the Arbitration and Conciliation Act, 1996 is also dealt

with under this chapter.

Sixth Chapter deals with judicial contribution in strengthening the ADR

under Industrial Disputes Act, 1947. In this chapter judgments of the Court which

emphasized the use of alternative dispute resolution methods in the settlement of

industrial disputes are under the scope of discussion.

Seventh Chapter deals with Data Analysis.

Eighth Chapter deals with the conclusion and suggestion.

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