Concept of Industrial Relations
In ‘industrial relations’ there is no instant or ready-made method for resolving the industrial disputes and it could not be imported from outside also. Due to the technological advancement and scientific methods of production, the production processes have become very complicated as well as complex. It is also very crucial to understand the problems of human relations in management. All of the ties that exist in today's industrial society are encompassed within the broad idea of industrial relations.
Prof. Lester explains the dimension of the term industrial relations as follows:
“The term ‘industrial relations’ includes not only the dealing between labour organisations and industrial management but also all aspects of labour …. Including wages, productivity, employment security, management’s employment practices, union policies and governmental action on labour matters.”
Problems of Industrial Relations and Industrial Disputes
‘Dispute’ is one of the features of industrial relations and acquires specific and concrete subject matter between employer and workers. It is the outcome of conflicts between the demands and objectives of employers and employees. The important causes of industrial disputes:
Economic causes,
Methods of production and physical working conditions,
Terms of employment,
Institutional i.e., relating to recognition of union, bargaining unit, unfair practices, etc.
Psychological, and
Denial of legal and contractual rights.
Machinery for Settlement of Industrial Disputes
One of the most important feature of the Industrial Disputes Act is to foster harmony within the industrial sector by offering mechanisms to prevent and address conflicts between labour and management in India. Three-dimensional processes conciliation, voluntary arbitration and adjudication are provided by the Industrial Disputes Act.
Conciliation
It is a familiar method and a persuasive process for resolution of industrial disputes. In this method, a third neutral party serves as a mediator by providing a provision for conciliation officer and to promote the settlement of industrial dispute. The competent Government may designate a conciliation officer under Section 4 of the ‘Industrial Disputes Act’. This officer may be designated for one or more specific industries, for a specific area, or for a designated industry within a specified territory. The Act confers wider powers and imposes duties for mediating and promoting amicable settlement of industrial dispute.
If the parties involved in a dispute come to an agreement, the conciliation officer presents a report along with the 'memorandum of settlement,' which has been signed by all concerned parties. The conciliation officer must provide the report within 14 days of commencing the conciliation process, or sooner if directed by the relevant authority. If no agreement is reached, the officer must submit a failure report detailing the specific reasons and details contributing to the lack of success.
Board of Conciliation
Boards are favoured over conciliation officers for resolving intricate disputes that demand specialized attention. The ‘appropriate government’ may establish an ad hoc board of conciliation specifically for a particular labour dispute. The Industrial Disputes Act gives the board the authority to adopt any method it deems appropriate to ensure that the conciliation mechanism used to resolve the industrial dispute operates successfully. The ‘appropriate Government’ refers the disagreement to the board of conciliation, which then looks into all related issues. The primary role of the board is to aid the involved parties in achieving a fair and amicable resolution.
Once the disputed parties reach a settlement, the Board is responsible for sending a report along with the signed agreement. The report must be submitted within two months from the beginning of the proceedings, or in a shorter duration if specified by the appropriate government authority. If the parties fail to reach an agreement, the Board must submit a report detailing the facts and circumstances that led to the inability to reach a settlement.
Arbitration
The arbitration procedure involves the conflicting parties mutually consenting in written form to refer their labour disagreement to an arbitrator, who acts as an impartial third party. Though the arbitrator does not have any judicial powers, but his decision is binding on the concerned parties. Arbitration gives an opportunity to the disputants to resolve the dispute by a mutually agreed arbitrator. The arbitrator must look into the disagreement and send the arbitration ruling to the ‘appropriate authority’.
Adjudication
The adjudication mechanism serves as the ultimate authority in settling industrial disputes. The ‘appropriate government’ holds the power to refer labour disputes for resolution, regardless of the disputants' consent. The Act offers three tiers of machinery to resolve labour disputes.
- Labour Court
- Industrial Tribunal
- National Tribunal
Labour Court
The 'appropriate government' may establish a Labour Court to address disputes listed in the second schedule the Act of 1947. This establishment is initiated by issuing a notice in the official gazette. The matters falls within the jurisdiction of Industrial tribunal has been listed as follows:
- Assessing the appropriateness or legality of an employer's directive issued in accordance with established regulations
- Interpreting and applying Standing Orders
- Handling employee termination or dismissal, including the potential for worker compensation or reinstatement if termination was unjust
- Invalidation of any customary exemption or privilege
- Evaluating the legality or illegality of a strike or lockout
- Addressing issues not outlined in the Third Schedule
As a result, the Labour Court is tasked with resolving a majority of issues related to standing orders, including matters like dismissal, discharge, and reinstatement.
Industrial Tribunal
An industrial tribunal may be established by the competent government to settle labor disputes pertaining to any topic covered by the second or third schedules of the Act. The matters fall within the jurisdiction of Industrial tribunal has been listed as follows:
- Wages, together with the timing and method of payment;
- Compensation and additional benefits;
- Work hours and rest periods;
- Work hours and rest periods;
- Bonus, Profit-sharing, Gratuity, and Provident Fund;
- Working shifts in a way that deviates from following standing orders;
- Grading system classification;
- Guidelines for maintaining discipline;
- Improving efficiency;
- Decrease in workforce and facility shutdown; and
- Any additional issue as specified.
The matters covered under the second schedule has already discussed under the jurisdiction of Labour court
National Tribunal
The central government is the one who forms the national tribunal. In order to settle labor disputes involving matters of national significance or involving establishments spread across multiple states or likely to be impacted by such disputes, the federal government may establish one or more National Tribunals. The Labour Court and the Industrial Tribunal do not have the authority to make decisions regarding industrial disputes that have been referred to the National Tribunal.
Working pattern of Arbitration under the Industrial Disputes Act, 1947
Voluntary arbitration is an additional means of settling labor disputes in the event that conciliation is unsuccessful. The Industrial Disputes Act's Section 10 A offers voluntary arbitration as a substitute remedy. The disputants may, by written agreement, subject a matter to arbitration at any point prior to a dispute being referred under section 10. The arbitrator or board of arbitrators may be selected by the parties.
Requirements of Voluntary Reference of Disputes to Arbitrator
As long as the following requirements are met, the parties may refer to the voluntary arbitrator.
- There must be an existing or anticipated industrial dispute.
- The agreement must be documented.
- The referral must take place before a dispute is presented to a Labor Court, tribunal, or national tribunal in accordance with section 10.
- The arbitrator(s) should be identified by name.
Arbitration Agreement
Arbitration agreements ought to be in written and follow a set format. The agreement must be signed by all parties involved and should incorporate the pertinent written confirmation from the arbitrator or arbitrators. Copies of the agreement should be provided to the conciliation officer and the ‘appropriate government’ authorities. The appropriate government has a fourteen-day period from the date of receiving it to publish the document in the official gazette. If the 'appropriate government' verifies that the representatives referring represent the major part of both employers and employees, individuals not directly involved in the agreement but engaged in the dispute may be allowed to present their case to the arbitrator(s) within one month of being notified. Following an investigation into the disagreement, the arbitrator(s) will then submit the award to the ‘appropriate authorities’, signed by each arbitrator or, if required, by all of them. An umpire must be chosen if the arbitration agreement specifies an equal number of arbitrators. If there is a tie among the arbitrators, the umpire's decision will be taken into account.
Arbitration – A method of achieving industrial peace
The Code of Discipline, 1958 has emphasized the need of invoking voluntary arbitration as an important method on failure of other methods to resolve industrial disputes. In a similar vein, the necessity of voluntary arbitration was emphasized in the 1962 industrial ceasefire settlement. The National Commission on Labour in its first report has outlined factors contributing to the sluggish advancement in voluntary arbitration as follows:
- Quick access to adjudication in the event of unsuccessful negotiation is lacking.
- There exists a deficit of arbitrators who are mutually trusted by the involved parties.
- The absence of established unions capable of enforcing collective agreements among workers is notable.
- It's noteworthy that there is no option for appealing against the arbitrator's decision under the law.
- There is a lack of a streamlined process for voluntary arbitration.
- Parties involved, especially workers, incur significant costs.
Apart from the above, the lack of faith of the parties, responsible for the disuse of the method which are pointed out as follows:
- A legal challenge arises from the fact that there is typically no avenue for appealing the decision of the voluntary arbitrator, except through the writ jurisdiction;
- Difficulty in arriving at the common agreement on the names of the person mutually acceptable at arbitrators.
- Non-availability of such person who could enjoy confidence of both parties as impartial persons and men of integrity.
- Absence of skills and necessary expertise to resolve the dispute to the satisfaction of the rules of law and the parties etc.
- Prompt access to adjudication in the event of unsuccessful negotiations is readily accessible.
- Absence of recognised simplified procedure for voluntary arbitration;
- Lack of recognized trade unions that could force employees to reach consensus
- Cost to the parties, particularly workmen
Conclusion
Good labour relations are essential to the success of overall national development in a modern welfare state. Industrial disputes referred to the adjudication tribunal often take several years to be resolved. The goal of fostering positive workplace interactions will be undermined by this. In the case of Liberty Footwear Company v. Karnal Leather Karamchari Sanghthan, the court while considering the advantages of arbitration over adjudication, it has observed as follows: “It must be recognised that in the modern welfare state, healthy industrial relations are a matter of paramount importance. In attempting to solve industrial disputes, industrial adjudication, therefore, should not be delayed. Voluntary arbitration appears to be the best method for settlement of industrial disputes. The disputes can be resolved speedily and in less than a year, typically in a few months. The Tribunal adjudication of reference under Section 10(1) often drags on for several years, thus defeating the very purpose of the industrial adjudication. Arbitration is also cheaper than litigation with less legal work and no motion practice. It has limited document discovery with quicker hearing and less formal than trials. The greatest advantage of arbitration is that there is no right of appeal, review or writ petition. Besides, it may, as well reduce company’s litigation costs and its potential exposure to ruinous liability apart from redeeming the workmen the workmen from frustration.”
Though there are factors contributing to the slow progress, it will be the better system of redressal of grievances for workmen when it is properly applied in resolving industrial disputes thereby reducing the burden of courts.
