Compulsory Adjudication - Composition, Qualification and Jurisdiction | Labour and Industrial Law - CLAT PG PDF Download

Constitution of Dispute Resolution Mechanism

• The Appropriate Government can set up one or more Labour Courts through an official gazette notification.
• These courts handle industrial disputes listed in the Second Schedule of the Act.
• A Labour Court consists of a single member appointed by the Appropriate Government.
• If a Labour Court's presiding officer position becomes vacant, the Appropriate Government must appoint a replacement.

Industrial Tribunal

• The Appropriate Government can establish one or more Industrial Tribunals via official gazette notification.
• These tribunals address industrial disputes related to matters in the Second or Third Schedule of the Act.
• Like Labour Courts, an Industrial Tribunal consists of a single presiding officer appointed by the Appropriate Government.
• The government may also appoint two assessors to assist the Tribunal if deemed necessary.
• Industrial Tribunals can be set up for specific cases, time periods, or geographic areas as needed.

National Tribunal

• The Central Government can establish National Tribunals through official gazette notification for disputes of national importance.
• National Tribunals handle disputes affecting industrial establishments across multiple states.
• A National Tribunal consists of a single member, usually a former High Court judge, appointed by the Central Government.
• The Central Government may also appoint two assessors to assist the National Tribunal if necessary.
• The Central Government can refer disputes to a National Tribunal regardless of whether it is the Appropriate Government.

Awards and Settlements

The Industrial Dispute Act, 1947, enacted on April 1, 1947, aims to investigate and settle disputes while ensuring economic and social justice. It provides mechanisms for dispute settlement and prevention in certain industries.

Collective Bargaining

• A process where employers and employees negotiate terms of employment directly, promoting harmony and avoiding third-party intervention. Recognized as a vital social right in India.
• Described by N.W. Chamberlain as the agreement process between management and unions on worker duties.

Conciliation

• Involves a neutral third party, such as a Conciliation Officer or Board, facilitating an agreement between disputing parties.

Voluntary Arbitration

• Disputes are settled outside court by a trusted arbitrator, with decisions binding on both parties. Section 10-A allows parties to enter into arbitration agreements.

Adjudication

• When other methods fail, disputes are referred to statutory bodies like Labour Courts or Industrial Tribunals for resolution. Sections 7, 7-A, and 7-B outline the establishment of these bodies.

Definition of Award

Section 2(b) of the Industrial Dispute Act, 1947 defines an Award as an interim or final determination of an industrial dispute or any related question by a Labour Court, Industrial Tribunal, or National Industrial Tribunal. It also includes arbitration awards made under section 10A.

Ingredients of Award

• An Award is a determination of an industrial dispute, either interim or final.
• It can also be a determination of any question related to the dispute.
• Such determination must be made by a Labour Court, Industrial Tribunal, or National Industrial Tribunal.
• An award by arbitrators under section 10A is also considered an award.

What is Settlement?

According to Section 2 (p) of the Industrial Dispute Act, 1947 Settlement means a settlement arrived at in the course of conciliation proceeding and includes a written agreement between the employer and workmen arrived at otherwise than in the course of conciliation proceeding where such agreement has been signed by the parties thereto in such manner as may be prescribed and a copy thereof has been sent to an officer authorized in this behalf by the appropriate Government and the conciliation officer.

Procedure for Settlement of Industrial Disputes

• Procedure for settlement of industrial disputes is provided under Industrial Disputes Act, 1947.
• Disputes must go through conciliation process before being referred for adjudication.
• Public utility services defined in Section 2(n) include services like railway, postal, telegraph, telephone, power, water, light, public conservancy, sanitation, safety of industrial establishments, and industries declared by the government.
• Conciliation Officer holds proceedings when a dispute exists or is apprehended, especially in public utility services after a notice under Section 22.
• Conciliation proceedings start when a notice is issued for parties to appear, and the officer can meet them jointly or separately.
• Report to Government: Conciliation Officer submits a report within 14 days of starting proceedings.
• Settlement: If reached, it becomes binding for 6 months, unless agreed otherwise.
• Binding parties: Settlement binds all parties, including successors and future employees.
• Government Action: Based on the report, Government decides on further reference or conciliation efforts.

Collective Bargaining as a Method of Settlement of Industrial Disputes

• Collective bargaining is a significant method for resolving industrial disputes in India, especially post-independence.
• Historically, during the laissez-faire era, employers had greater power in hiring and firing, leading to imbalances in bargaining power.
• Criticism of adjudicatory awards and settlements, such as delays and expenses, has led parties to prefer direct negotiations.
• Collective bargaining shifts the focus from individual contracts to collective agreements negotiated by representative groups.
• The Industrial Disputes Act, 1947 facilitates the machinery for settling industrial disputes, including collective bargaining.

On Whom Awards and Settlements Are Binding

• Section 18 of the Industrial Disputes Act, 1947 states that Awards and Settlements are binding on specific parties.
• A settlement reached by agreement between the employer and workmen, outside of conciliation proceedings, is binding on the parties involved.
• Subject to certain provisions, an arbitration award that is enforceable is binding on the parties who referred the dispute to arbitration.
• A settlement achieved during conciliation proceedings, as well as an award from a Labour Court, Tribunal, or National Tribunal, is binding on:
• All parties involved in the industrial dispute.
• All parties summoned to appear in the proceedings as parties to the dispute, unless the Board, arbitrator, Labour Court, Tribunal, or National Tribunal determines otherwise.
• If a party is an employer, their heirs, successors, or assigns concerning the establishment in question.
• All individuals employed in the establishment or part of the establishment on the date of the dispute, as well as those who become employed there subsequently.

Period of Operation of Awards and Settlements

Section 19 of the Industrial Disputes Act 1947 outlines the period of operation for Awards and Settlements.

Settlements

• Commencement: A settlement comes into effect on the date agreed upon by the parties involved. If no date is agreed upon, it starts on the date the memorandum of the settlement is signed.
• Binding Period: The settlement is binding for the period agreed upon by the parties. If no period is specified, it is binding for six months from the date of signing. After this period, it remains binding until one party gives written notice of termination two months in advance.

Awards

• Duration: An award remains in operation for one year from the date it becomes enforceable under section 17A. The appropriate Government can reduce this period or extend it by up to one year at a time, but the total duration cannot exceed three years.
• Modification: If there is a significant change in circumstances since the award was made, the appropriate Government can refer the award to a Labour Court or Tribunal to decide whether the period of operation should be shortened.

Differences between Settlement and Award

• Settlement: A settlement is an agreement reached among the parties involved in a workers' compensation claim, including the employee, employer, and workers' compensation insurer. It is a type of contract that may prevent the employee from seeking further compensation for their injury.
• Award: An award is granted by the workers' compensation court and may include medical benefits or other types of workers' compensation based on the specifics of the injury. Unlike a settlement, an award does not require the employee to sign away any rights to receive these benefits.

Definition of Settlement in Industrial Dispute Act, 1947: According to Section 2(p) of the Industrial Dispute Act, 1947, a settlement refers to an agreement reached during conciliation proceedings. It also includes a written agreement between the employer and workers that is not part of conciliation proceedings, provided it is signed by the parties in the prescribed manner and a copy is sent to the authorized officer and the conciliation officer.