Prevention and Settlement of Disputes | Commerce & Accountancy Optional Notes for UPSC PDF Download

Prevention of Industrial Disputes

The following measures can be implemented to avert conflicts in industries:

• Model Standing Orders: These orders aim to establish guidelines for the relationship between employers and employees under the Industrial Employment (Standing Orders) Act, 1946. They define and regulate terms and conditions of employment to bring about uniformity, specifying the duties and responsibilities of both parties.
• Code of Industrial Discipline: This code encompasses three sets of principles:
  (a) obligations for management,
  (b) obligations for trade unions, and
  (c) principles binding on both parties.
• Grievance Procedure: A well-developed grievance redressal procedure provides a channel for employees to present grievances systematically, allowing them to address dissatisfaction with their job, working conditions, or management promptly.
• Collective Bargaining: Collective bargaining involves representatives of employers and employees negotiating a contract governing the employer-employee union relationship. It aims to arrive at agreements covering the conditions of employee contribution and compensation.
• Work Committees: These committees address day-to-day matters at the shop floor level, covering conditions of work, amenities, safety, festivals, health services, welfare funds, education, recreational activities, thrift promotion, and the implementation and review of decisions.
• Joint Management Councils: Set up in 1958 as part of the socialistic pattern of society, these councils consist of equal representatives from management and workers at the plant level in selected industrial units.
• Suggestion Schemes: This system encourages workers to offer suggestions for improving enterprise functioning. Workers can submit suggestions through a suggestion box, with good ideas accepted for implementation, and rewards given to the contributors.
• Joint Consultative Machinery: In the government sector, service conditions are addressed at National Councils, Departmental Councils, and Regional or Office Councils.
• Tripartite Bodies: Various tripartite bodies operate at central and state levels, including the Indian Labour Conference, Standing Labour Committees, Wage Boards, and Industrial Committees. They play a crucial role in reaching agreements on labor matters.
• Labour Welfare Officer: The Factories Act, 1948 mandates the appointment of a Labour Welfare Officer in every factory employing 500 or more workers. The officer oversees facilities for health, safety, and welfare of workers.

Settlement of Industrial Disputes

The following approaches & measures are used for the settlement of disputes in industry:

• Conciliation: Conciliation involves bringing representatives of workers and employers together before a neutral third party to encourage them to reach an agreement through mutual discussion. It employs the friendly intervention of a neutral person or group to help parties settle disputes peacefully. According to the ILO, conciliation is a process in which a neutral third party's services are used to help parties reduce their differences and reach an amicable settlement.
• Arbitration: Arbitration is a process where a neutral third party listens to the disputing parties, gathers information, and makes a decision binding on both parties. Unlike conciliation, arbitration is a quasi-judicial process, where the arbitrator listens to both parties and issues a judgment. Arbitration has advantages such as being established by the parties themselves, expeditiousness, informality, cost-effectiveness, and being based on mutual consent. However, it also has disadvantages, including the potential for arbitrary judgments, delays in dispute resolution, and an overreliance on arbitration indicating unhealthy industrial relations.
• Adjudication: Adjudication is the ultimate legal remedy for settling industrial disputes. It involves the intervention of a legal authority appointed by the government to make a binding settlement on the parties.
• Courts of Enquiry: The government may constitute a court of inquiry, through an official gazette notification, to inquire into matters connected with or relevant to an industrial dispute. A court of inquiry may consist of one or more independent persons appointed by the government to investigate the issues related to the dispute.
  The Industrial Dispute Act outlines a three-tier system of adjudication:
  • Labour Court: The appropriate government can establish one or more Labour Courts through an official Gazette notification. These courts handle the adjudication of industrial disputes related to various matters, including the propriety or legality of employer orders under standing orders, interpretation of standing orders, discharge or dismissal of workmen, withdrawal of concessions or privileges, legality of strikes or lockouts, and other issues not specified in the Third Schedule.
  • Industrial Tribunal: The appropriate government, by notification in the official gazette, can constitute one or more Industrial Tribunals. These tribunals adjudicate industrial disputes related to matters such as wages, compensatory allowances, hours of work, leave with wages, bonus, profit-sharing, provident fund, gratuity, shift working, disciplinary rules, rationalization, retrenchment, closure of establishment, and any other prescribed matter.
  • National Tribunal: The Central government, through an official gazette notification, can establish one or more National Industrial Tribunals for adjudicating industrial disputes. These tribunals handle disputes of national importance or those that involve industries in more than one state, making them likely to be of interest or impact to multiple states.

Conclusion

Industrial conflicts manifest as strikes, gheraos, lockouts, etc. The primary causes leading to industrial disputes include issues related to wages, allowances, bonuses, personnel matters, retrenchment, leave policies, working hours, indiscipline, and violence. Resolving these disputes often involves methods such as conciliation (utilizing conciliation officers or boards of conciliation), arbitration (both voluntary and compulsory), and adjudication (involving labor courts, industrial tribunals, and national tribunals).