ADR MECHANISMS FOR RESOLVING EMPLOYMENT AND INDUSTRIES RELATED DISPUTES IN INDIA

ABSTRACT

The term ‘industries related disputes’ or ‘industrial disputes’ could be interpreted widely to include corporate and fiscal laws as well. The Indian Parliament proposed the word ‘labour’ over the term ‘industrial’ in the Labour Bill, 1997 which was eventually lapsed.The term industries-related disputes’ in this paper only covers the employment and labour-related disputes. Labour falls within the concurrent list giving power to both Parliament and State legislature to legislate on this subject-matter, with the ‘residual power’ vesting with the centre. Both the legislatures have passed myriad labour legislations and also keep evolving and amending the same to meet the changing needs of labour models/practices. This paper discusses the existing pattern of using ADR mechanisms in resolution of employment and industries-related disputes.

Keywords: Union Collective bargaining, Conciliation officers & board, Works committee, Grievance redressal machinery, Arbitration.

INTRODUCTION

There exists numerous social welfare legislations in India such as Minimum Wages Act, Payment of wages Act, Factories Act, Industrial Disputes Act, Workmen Compensation Act etc, to provide social and economic security to the workers which also imposes statutory obligations on employers and workers to maintain industrial peace and harmony. Most of the disputes between the employer and employee in an industrial setup is disputes relating to wages, terms of employment, complaints over social-security/non-compliance of industrial standards, unfair labour practices etc. There are different forums/settlement bodies established by legislations to settle specific disputes and timely disposal of disputes. Initiation of a dispute in a particular forum depends on the nature of the dispute and kind of employment. This article attempts to cover important labour legislations insisting for ADR settlement machinery for resolving industries-related disputes in India.

INDUSTRIAL DISPUTES ACTS, 1947 (ID ACT)

The Industrial Disputes Act, 1947[1] is the primary labour legislation which provides for a machinery to investigate and settle industrial disputes. The Act applies to establishments which is an ‘industry’[2] and those who are within the ambit of ‘workman’[3]under the definitions of the Act. Section 2(k) of the Act defines industrial disputes as those disputes or differences between employers and workmen, between workmen and workmen, or between employers and employers that are connected with the employment or non-employment or the terms of employment or with the conditions of labour of any person. Section 2Aprovides for an individual workman to raise an industrial dispute, provided that the dispute connects with or arises out of a discharge, dismissal, retrenchment/termination. If the workman wants to raise a dispute relating to other claims, it can only be done by the union on behalf of the workmen or workman.[4]

Settlement machinery:

Negotiation by works committee: The Act[5] provides for constitution of works committees for  maintaining amicable and good relations between the employers and the employees so that any disputes/differences between them in the matters concerning the establishment are solved by mutual discussion. The establishment undertakes formation of such works committee, it is not a committee to subserve certain exclusive sectional interest ie, tries to balance the interests of both the sides. Further, employer also constitutes Grievance redressal machinery to resolve individual disputes with management.

Collective-bargaining by trade unions: Trade unions with sufficient strength of manpower can bargain far more effectively than individual workman to the management to meet the workmen’s needs. This is called collective-bargaining. Its success results in a bipartite agreement[6]of settlement between the union and the employers (management).

Mediation by conciliation officer[7]: The Act does not draw a difference between conciliation and mediation, instead it tries to merge both. It expects the conciliating officers to mediate between parties. Sections 4,5,12,13 relates to conciliation officers and conciliation boards. The Act further makes conciliation compulsory in all disputes in ‘public utility services’ and optional in other industrial establishments. In this process the officer makes suggestions/proposals which is recommendatory and not binding. Once the settlement agreement has been entered into by the parties, it becomes binding bythe parties signing it. The officer is required to send a report along with a memorandum of settlement signed by them, to the appropriate government. In case a settlement is not possible, a report shall be sent to the appropriate government which in turn may refer the dispute to conciliation board, labour court (provided the dispute relates to a matter specified in Schedule II to the ID Act) or to an industrial tribunal (provided the dispute relates to a matter specified in Schedule II or Schedule III to the ID Act).

Arbitration: Section 10A of the Act provides for voluntary reference of an existing or apprehended ‘industrial dispute’ between an employer and workmen by mutual consent at any time before the dispute has been referred for adjudication under Section 10. The ‘arbitration agreement’, however, has to be in writing and in the form as prescribed under the rules, specifying the person or persons to be arbitrator or arbitrators. It is not necessary that arbitral reference is made only to a private person(s). Such reference can be made even to the presiding officers of labour courts/tribunals/ national tribunals. The Act prohibits strikes and lockouts during the pendency of arbitral proceedings. The arbitrator is required to investigate the dispute and submit the award to the appropriate government. Provisions of the Arbitration and Conciliation Act, 1996 shall apply. Unlike adjudication by tribunals, it resolved speedily and in less than a year, typically in a few months. Arbitration is also cheaper than litigation. The jurisdiction of an ‘arbitrator’ appointed under Section l0A and the adjudicatory authorities, namely a labour court, tribunal or the national tribunal, established under section 10A for settling the disputes referred to them and to give appropriate relief is governed by the same principles[8]. Insertion of arbitration clauses in employment agreements is common.

Arbitrability of industrial disputes: In the case of Kingfisher Airlines v. Prithvi Malhotra & Ors wherein, various labour recovery proceedings instituted by pilots and other staff members of the now defunct Kingfisher Airlines; the proceedings were instituted before the specially empowered labour courts for recovery of unpaid wages and other salary benefits. In these proceedings, Kingfisher Airlines contested the jurisdiction of the labour court by relying on the arbitration clause in the employment agreements. It was held that at labour and industrial claims are non-arbitrable under the Arbitration and Conciliation Act, 1996, and where they can be submitted to arbitration, such reference and resolution must be in compliance with the procedure under the Industrial Disputes Act.

The ID Act focuses on regulating industrial relations, but there are several other labour law statutes that also provide for dispute resolution mechanisms or the appointment of authorities to adjudicate claims under the statute concerned. Example: Minimum Wages Act, 1948provides that the appropriate government may appoint an officer at the level of regional labour commissioner or assistant labour commissioner.

CONCLUSION

The ID Act has statutorily recognised and encouraged ADR mechanisms in resolving industrial disputes, but the Act still has a few setbacks. The Industrial Relations Code,2019 has been introduced in the Lok Sabha;it intends to repeal the ID Act. The Code proposes to do away with boards of conciliation, courts of inquiry and labour courts and insists on industrial tribunal being the sole adjudicating body in deciding appeals from the conciliating officers. Labour disputes mostly being civil in nature can be resolved by conciliation and arbitration effectively as it has an active role of a third party (preferably one with expertise). Negotiation could sometimes be disadvantageousas a worker who is not aware of his rights completely can be swayed by the employer in entering into an agreement (not voidable/void agreements) and also might end up wavering (waiver which is not against public policy) his rights. But collective bargaining, arbitration and conciliation will prove to effective in resolving labour disputes.

REFERENCES

Statute

  • The Industrial Disputes Act, No. 14 of 1947, India Code.

Cases

  • Prakash and Ors. v. Superintending Engineer (Eel), 2001 1 Kant LJ 490 (India).
  • Kingfisher Airlines Ltd v. Captain Prithvi Malhotra and others, 2013 (7) Bom CR 738 (India).

[1]The Industrial Disputes Act, No. 14 of 1947, India Code.

[2]The Industrial Disputes (Amendment), Act No. 46 of 1982, India Code,§2(j).

[3]The Industrial Disputes (Amendment), Act No. 46 of 1982 India Code,§2(s).

[4]Prakash and Ors. v. Superintending Engineer (Elel),2001 1 Kant LJ 490 (India).

[5]The Industrial Disputes Act, No. 14 of 1947, India Code, §3.

[6] The Industrial Disputes (Amendment), Act No. 36 of 1956, India Code, §2(p).

[7]The Industrial Disputes Act, No. 14 of 1947, India Code,§4.

[8]Kingfisher Airlines Ltd v. Captain Prithvi Malhotra and others, 2013 (7) Bom CR 738 (India).

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