UNIT -5

Industrial Disputes

5.1 Industrial Disputes

Disputes mainly relate to the strife between employers and their employees.

According to the Industrial Dispute Act,1947 sec (2(k)),Industrial disputes mean any dispute or difference between employers and employers, or between employers and workmen, or between workmen and workmen, which is connected with the employment or non-employment or terms of employment or with the conditions of labour of any person.

Causes of industrial Disputes

Causes of Industrial disputes may be grouped into four categories:

(A) Industrial Factors

(B) Managements Attitude towards workers

(C) Government Machinery; and

(D) Other Causes

(A)Industrial Factors:

Under this category, some of the causes of dispute may be:

1. An industrial matter relating to employment, work, wages, hours of work, privileges, the rights and obligations of employees and employers, terms and conditions of employment including matters pertaining to :

a)     dismissal or non-employment of any person

b)    Registered agreement , settlement or award : and

c)     demarcation (establishing limits) of the functions of an employee

2. An industrial matter in which both the parties are directly and substantially interested and disputes arising out of unemployment, inflation, change in the attitude.

(B) Management Attitude towards Labour:

a)     Management’s unwillingness to talk over any dispute with their employees.

b)    Management’s unwillingness to recognize a particular trade union, delegating enough authority to the representatives etc.

c)     Unwillingness to negotiation and settlement of disputes.

d)    Managements insistence to take care of recruitments, promotion etc without consulting the concerned employees

e)     Management’s unwillingness to provide services and benefits to its employees.

(C) Government Machinery:

a)     Though there are number of enactments for promotion of harmonious relations, it is ineffective and unsatisfactory due to various reasons like their irrelevancy in the context of the challenges of present industrial climate/culture, incapability of understanding and answering imperatives of development, improper and inadequate implementation by many employers.

b)    The governments conciliation machinery has settled a very negligible number of disputes .

(IV) Other Causes:

a)     Affiliation of the trade unions with a political party, where the latter may instigate the trade unions to conduct strikes, lockouts , gheraos etc.

b)    Political instability, centre- state relations, sometimes result into industrial conflict.

c)     Other potential factors like corruption in industry and public life, easy money, etc can also result into industrial disputes.             

Types of Industrial disputes

Industrial disputes are basically of two types, i.e., Strikes and Lockouts.

Strikes:

Strikes are a result of more fundamental maladjustments, injustices and economic disturbances. Strike is a temporary cessation of work by a group of employees in order to express grievances or to enforce a demand concerning changes in work conditions.

Strikes are divided into three types .They are Primary strikes, secondary strikes and other strikes.

I. Primary strikes are generally against the employer with whom the dispute exists. They are:

• Stay Away Strikes: In this strike workmen stay away from the workplace. They organize rallies, demonstrations, etc.
• Stay-in or sit-Down Strikes: In this strike, workmen come to the place, they stay at the workplace, but they don‘t work.
• Tools Down, Pen down Strike: Here the strikers lay down their tools in case of factory workers, office workers lay down their pens.
• Token or Protest Strikes: It is of very short duration and is in nature of signal for the danger ahead. In this strike workers do not work for an hour or a day.
• Lightening or Wild cat strike: In this strike, the strike is done without any prior notice or with a shortest notice.
• Go –Slow: In this strike, the workers intentionally reduce the speed of work.
• Work to rule: In this strike, the strikers undertake the work according to rules or job description.
• Picketing: It is an act of protesting by the workmen in front of the premises of the employer.
• Boycott: It aims at disrupting the normal functioning of the enterprise.
• Gherao : It is a physical blockade of a target either by encirclement, intended to block from and to a particular office, workshop etc.
• Hunger Strike: This type of strike is resorted to either by the leaders of the union or by some workers all at a time for a limited period or up to the period of settlement of disputes.

II Secondary Strike: Secondary strikes are against a third party. These strikes are sympathetic strikes.

III. Other Strikes: These strikes are in the form of general, particular, political and bandhs.

• Lockouts: Lockout means the closing of a place of business of employment or the suspension of work, or the refusal by the employer to continue to employ any number of persons employed by him. However, termination of employment or retrenchment, and prohibiting an employee are not lockouts.

Preventive measures of industrial disputes

1. Labour Welfare Officer
2. Tripartite and Bipartite Bodies
3. Standing Orders
4. Grievance Procedure
5. Collective Bargaining
6. Strong Trade Unions
7. Labour Co- Partnership and Profit sharing
8. Joint Consultations

1.] Labour Welfare Officer: Section 49 (1) and (2) of the Factories Act, 1948 specifies that every factory wherein 500 or more workers are ordinarily employed at least one welfare Officer must be appointed, where the number of workers are in excess of 2500, the assistant and / or additional welfare officers are required to be appointed to assist the Welfare Officer.

The functions of Labour Welfare Officer include:

(I) Labour Welfare Functions: Advice and assistance in implementing legislative and non-legislative provisions relating to :

• Health &Safety
• Working conditions
• Sanitation & Cleanliness
• Recreation
• Welfare Amenities
• Workers Education
• Services like Co-operative grain shops, housing cooperatives.
• Formation of welfare committees.
• Housing
• Implementation of welfare Acts.

(II) Labour Administration Functions: These may cover:

• Organizational Discipline
• Safety & Medical administration
• Wage& salary administration
• Administration of Legislation covering Industrial Relations

(III) Labour Relations Functions: These may consist of :

• Administration of standing orders.
• Settlement of Grievances.
• Settlement of Disputes through statutory procedures.
• Trade unions& union management relations
• Steps to increase productivity efficiency.

2] Tripartite and Bipartite Bodies:

Industrial relations in India have been shaped largely by the policies and practices of Tripartite and Bipartite bodies.

The purpose of consultative machinery is to bring the partners together for mutual settlement of differences in spirit of cooperation and goodwill.

Bipartite Bodies:

With the beginning of industrialization of India, labor relations in Indian industries have also been largely influenced by Indian democracy. Groups like Works Committee and Management Council were established to democratize Indian industrial relations. The bipartite consultation machinery was established around 1920, during the time when a few joint committees were setup by the Government of India. These joint committees were also introduced in TISCO in Jamshedpur.

Bipartite consultative machinery comprises two parties i.e., employees and employer, the important bipartite body is works committees.

Tripartite Bodies:

The principals and policies of the tripartite body have been a machinery of consultancy at the industrial and national levels. The tripartite body was established to make peace and improve relations between management and unions, and maintain smooth functioning of union management relations. It began as a statutory organization by the recommendation of the Whitey Commission to the ILO in 1931. The tripartite body had to be sufficiently large to ensure sufficient representation of the various interests involved; encourage representatives of employers, labor and government to meet regularly; and disallow individual members from making individual contributions to meetings.

Purpose of Tripartite Body:

a. Bring the aggravated parties together for mutual settlement of differences, and encourage a spirit of cooperation and goodwill.

b. Promote uniformity in labor laws and legislation.

c. Discuss all matters of All India importance as between employers and employees.

d. Determine a plan for settlement for all disputes. Works Committee: Works committees greatly contribute in prevention of industrial disputes. It is represented by an equal number of representatives of each party and the method of their appointment is also laid down in agreements or enactments.

Objectives and Functions:

(a)To promote industrial goodwill.

(b)To secure cooperation from employers and employees.

(c)To ensure the cooperation of private concerns.

(d)To provide for a popular agency for supervising the management of nationalized undertakings.

For the successful working of the works committee, the employers are required to abstain from doing anything that is likely to hamper various facilities to workers. The Trade unions on the committees also have to abstain from doing things that upset the operations of the undertaking.

3] Standing Orders: Majority of the industrial disputes are related to conditions of Employment. To prevent this, Standing orders are formulated. It was made obligatory that standing orders should govern the conditions of employment under the Industrial Employment (Standing Orders) Act of 1946. The Standing

Orders regulate the conditions of employment from the stage of entry to the stage of exit.

4] Grievance Procedure: Grievance generally arise from day – to- day working relations. Grievances of the employees are readdressed by the management.

Management can prevent the occurrence of industrial disputes by solving the individual problems.

5] Collective Bargaining:

Collective bargaining helps for settlement of issues and prevention of industrial disputes. It occurs when representatives of a labour union meet management representatives to determine employees’ wages and benefits, to create or revise work rules and to resolve disputes or violations of the labour contract.

6] Strong Trade unions: Trade union is the most suitable and effective agency to conduct collective bargaining on behalf of the workers. A powerful bargaining may be achieved by strong trade unions, which enable the workforce to maintain harmonious relations with the management.

7] Labour Co-partnership and profit sharing: Good industrial relations can be maintained through proper partnership and profit sharing; employer gives a portion of total profits to workers in addition to their normal wages. This sort of attitude of management would create psychological conditions favourable for industrial peace.

8] Joint Consultation: Joint Consultation involves a continuous relationship between labour and management and expects willingness of management

And the participation of workers in discussing common problems of interest. This is the result of collective bargaining relations on a stable basis when parties know each other well and have a mutual trust.

5.2 Settlement of Disputes

Whatever may be the cause of industrial disputes, the consequences are harmful to all stakeholders’ management, employees, economy and the society. For Management, disputes result in loss of production, revenue, profit, and even sickness of the plant.

Employees would be hard hit as the disputes may lead to lockouts and consequent loss of wages and even jobs. Various methods are available for resolving disputes.

Most important of them are:

Collective Bargaining:

Collective bargaining helps for settlement of issues and prevention of industrial disputes. It occurs when representatives of a labour union meet management representatives to determine employees’ wages and benefits, to create or revise work rules and to resolve disputes or violations of the labour contract.

The bargaining is collective in the sense that the chosen representative of the employees (i.e. union) acts as a bargaining agent for all the employees in carrying out negotiations and dealings with the management. On the employer side, it is collective in those common situations in which the companies have joined together in an employer association for the purposes of bargaining with a union.

Collective bargaining has been viewed as a process of social change, as a peace treaty between the conflicting parties and as a system of industrial jurisprudence.(i.e. it is a method of introducing civil rights into the industry ).

The process of collective bargaining involves six major steps:

Code of Discipline: The code of discipline defines duties and responsibilities of employers and workers.

The objectives of the code are:

1. To ensure that employers and employees recognize each other’s rights and obligations.

2. To promote consecutive co-operation between parties concerned at all levels.

3. To eliminate all forms of coercion, intimidation and violence in IR.

4. To avoid work stoppages.

5. To facilitate the growth of trade unions.

6. To maintain discipline in the industry.

Grievance Procedure: This is another method of resolving disputes.

Grievance is any discontent or dissatisfaction, arising out of employment relationship, which an employee thinks, believes or feels to be unfair, unjust or inequitable.

A grievance procedure is a formal process which is preliminary to arbitration, which enables the parties involved to attempt to resolve their differences in a peaceful and orderly manner.

It enables the company and the trade union to investigate and discuss the problem at issue without in any way interrupting the peaceful conduct of business. When the grievance redressal machinery works effectively, it satisfactorily resolve most of the disputes between labour and management.

VI stage within7 days

V stage Appeal to

Management for Revision

IV stage communicates

The decision within 7 days

III stage conveys verbally

II stage decision

Within 3days

I stage answer to

Be given within 48 hrs

NS- Not satisfied

Arbitration:

Arbitration is a procedure in which a neutral third-party studies the bargaining situation, listens to both the parties, gathers information and then makes recommendations that are binding on both the parties.

Arbitration is effective means of resolving disputes because it is:

1. Established by the parties themselves and the decision is acceptable to them.

2. Relatively expeditious when compared to courts and tribunals.

Process of Arbitration:

1) The labour union generally takes initiative to go for arbitration. When the union decides, it notifies the management.

2) The union & the management select the potential arbitrator by carefully studying the previous decisions given by the particular arbitrator, to detect any biases.

3) After the arbitrator is selected, the time & place for hearing will be determined; the issue to be resolved will be presented to the arbitrator in a document that summarizes the questions to be decided, any contracts restrictions that prohibit the arbitrator from making an award that would change the terms of existing contract.

4) Each side represents its case at the hearing.

5) Each party has to submit formal written statements.

Steps:

1) Witness, cross-examination, transcripts & legal counsel may be used.

2) After hearing, the arbitrator studies the materials submitted and reaches the decision within 30 – 60 days.

3) The decision given usually is a written opinion mentioning the reasons.

4) The report is submitted by the arbitrator to the appropriate government

Conciliation: Conciliation is a process by which the representatives of workers and employers are brought together before a third party with a view to persuading them to arrive at an agreement by mutual discussion between them. The third party may be an individual or a group of people. The third party may also be called as mediators.

The ID Act, 1947and other state enactments authorise the governments to appoint conciliators charged with duty of mediating in and promoting the settlement of industrial disputes.

In Conciliation, the ultimate decision rests with the parties themselves but the conciliator may offer a solution to the dispute acceptable to both the parties and serve as a channel communication. The parties may accept his recommendation or reject it.

If the conciliation fails, the next stage may be compulsory adjudication, or the parties may be left with their own choice. In cases where a settlement is arrived at, they can record the settlement and in case of failure of the conciliatory negotiations, they can send a failure report to the appropriate government.

Adjudication:

Adjudication means a mandatory settlement of an industrial dispute by a labour court or a tribunal. Generally, the government a dispute for adjudication depending on the failure of conciliation proceedings. Section 10 of the Industrial Act, 1947, provides for reference of a dispute to labour court or tribunal.

Disputes are generally referred to adjudication on the recommendation of the conciliation officer who had dealt with them earlier. The government has discretionary powers to accept or reject recommendations of the conciliation officer. It is obvious that once is referred for adjudication, the verdict of a labour court or tribunal is binding on both the parties.

This is the most significant instrument of resolving disputes. But, it has been criticised because of the delay involved in resolving conflicts.

Consultative Machinery:

Consultative machinery is set by the government to resolve conflicts. The main function is to bring the parties together for mutual settlement of differences in the spirit of co-operation and goodwill.

Consultative machinery operates at plant, industry, state and national levels. At plant level, there are works committee and joint management councils. Being bipartite in character, works committee are constituted as per the provisions of industrial Disputes Act, 1947 and joint management councils are set up following the trust laid down in the Industrial Policy Resolution, 1956. At the industry

Level, there are wage boards and industrial committee.

Labour advisory boards operate at the state and at the all-India level there are Indian labor conference and the Standing labor committee. The bodies operating at state and national level are tripartite in character, representing government, labor and management.

Strike

Strike is one of the oldest and the most effective weapons of labour in its struggle with capital for securing economic justice.

Strike has been defined in Section 2 (q) of the Industrial Disputes Act as under—“Strike means a cessation of work by a body of persons employed in any industry acting in combination, or a concerted refusal, or a refusal under a common understanding, of any number of persons who are or have been so employed to continue to work or to accept employment.”

The following are essential requirements for the existence of astrike:

(1) There must be cessation of work.

(2) The cessation of work must be by a body of persons employed in any industry

(3) The strikers must have been acting in combination

(4) The strikers must be working in any establishment which can be called industry within the meaning of Section 2(j); or

(5) There must be a concerted refusal; or

(6) Refusal under a common understanding of any number of persons who are or have been so employed to continue to work or to accept employment.

(7) They must stop work for some demands relating to employment, non-employment or the terms of employment or the conditions of labor of the workmen.

Ingredients of Strike

Cessation of Work:-

This is most significant characteristic of the concept of strike. It has been variedly expressed as ‘stoppage‘, ‗omission of performance of duties suspension of work, refusing or failing to return to or resume employment . Thus, what required for strike is that there must be stoppage of work or there must be refusal to continue to work. Refusal must be concerted or under a common understanding.

1. The cessation of work may take any form. It must, however, be temporary and not for ever and it must be voluntary.

2. No duration can be fixed for this. Permanent cessation of work would result in termination of the contract of work. Cessation of work is not a cessation of contract of employment.

Concerted action

Another important ingredient of the strike is a concerted action. The workers must act under a common understanding.

The cessation of work by a body of persons employed in any industry in combination is a strike. Thus in a strike it must be proved that there was cessation of work or stoppage of work under a common understanding or it was a concerted action of the workers or there was cessation of work by workers acting in combination.

Lockouts

Section 2(1) of the Industrial Disputes Act, 1947 defines―Lock-out as the closing of a place of business of employment or the suspension of work, or the refusal by an employer to continue to employ any number of persons employed by him.

It is declared by employers to put pressure on their workers. It is counter part of a strike. Lockout may happen for several reasons. When only part of a trade union votes to strike, the purpose of a lockout is to put pressure on a union by reducing the number of members who are able to work.

Every employer has the option to lockout workers, if –

1) a dispute has been referred to a council or the Commission for

Conciliation, Mediation and Arbitration (CCMA); a certificate that a dispute remains unresolved has been issued 30 days have elapsed since the referral and

II) 48 hours‘written notice of a strike is given to

a. The employer; or

b. a council (if the dispute relates to a collective agreement to be concluded in a council); or

c. To an employers‘ organisation (if the employer is a member of an organisation that is a party to the dispute); or

III) 48 hours‘written notice of a lockout is given to

a. The trade union; or

b. To the workers (if they are not trade union members); or

c. a council (if the dispute relates to a collective agreement to be concluded in a council)

During legal lockouts, employers may –

• Not have civil legal proceedings brought against them during legal lockouts; and
• Recover the monetary value of payment in kind through civil proceedings in the Labor Court after legal lockouts.

Layoff

Layoff implies temporary removal of an employee from the payroll of the organization due to circumstances beyond the control of the employer. It may last for an indefinite period. But the employee is not terminated permanently and is expected to be called back in future.

The employer employee relationship does not come to an end but is merely suspended during the period of layoff. It is temporary denial of employment. The purpose of layoff is to reduce the financial burden on the organization when the human resources cannot be utilized profitably.

Under Section 2(KKK) of the Industrial Disputes Act, 1947, layoff is defined as ― “the failure, refusal or inability of an employer, on account of shortage of coal, power or raw materials or accumulation of stocks or breakdown of machinery or by any other reason, to give employment to a workman whose name appears on the muster rolls of his industrial establishment and who has not been retrenched”.

Layoff is restored in cyclical and seasonal industries. In mines workers are laid off due to excess of inflammable gas, flood, fire and explosion.

According to Section 25(c) of the Industrial Disputes Act, 1947, a laid off worker is entitled to compensation equal to 50 per cent of the basic wages and dearness allowance that would have been payable to him had he not been laid off.

However, in order to claim this compensation, the laid off workman must satisfy the following conditions:

a) he should not be a badli or a casual worker,

b) his name must appear on the muster rolls of the industrial establishment,

c) he must have completed not less than one year of continuous service, and

d) he must present himself for work at the appointed time during normal working hours at least once a day.

Retrenchment

Retrenchment means permanent termination of service of an employee for economic reasons in a going concern.

The Industrial Disputes Act, 1947defines retrenchment as the ― “termination by the employer of the services of workman for any reason other than termination of services as punishment given by way of disciplinary action, or retirement either voluntary or reaching age of superannuation, or continued ill-health or the closure and winding up of a business”.

The Act lays down the following conditions for retrenchment.

1. The employee must be given one month‘s notice in writing indicating the reasons for retrenchment or wages in lieu of such notice.

2. The employee must be paid compensation equal to 15 days for every completed year of service.

3. Notice in the prescribed manner must be served on the appropriate Government authority.

4. In the absence of any agreement to the contrary, the worker employed last must be terminated first.

5.3 Workers participation is management

Employee involvement:

• Employee involvement is creating an environment in which people have an impact on decisions and actions that affect their jobs.
• Employee involvement means that every employee is regarded as a unique human being, not just a cog in a machine, and each employee is involved in helping the organization meet its goals. Each employee’s input is solicited and valued by his/her management. Employees and management recognize that each employee is involved in running the business.
• Intrinsic to most employee involvement processes is training in team effectiveness, communication, and problem solving; the development of reward and recognition systems; and frequently, the sharing of gains made through employee involvement efforts.

The keys to involvement are several and complex:

(a) Financial

Share ownership and profit distribution plans can help to foster an interest in a company’s affairs at the competitive level which is often hard to get across in the normal day to day routine of workplace activity.

(b) Job security

Doubt as to whether you will still be with the company next week are hardly likely to encourage a sense of belonging. Again the Japanese have recognized this rather obvious truism for many years.

Implementation

In order to implement employee involvement and empowerment to an enterprise the following key actions need to take place:

• Giving employee the responsibility
• Training employee to accept responsibility
• Communicating and giving feedback
• Giving rewards and recognition

Participative Schemes In India

 The introduction of works committees through the Industrial Disputes Act in 1947 was hailed by many as an encouraging measure for participation. The works committee was envisaged as an industrial relations (IR) tool to resolve or reduce differences between managements and labour.

 The National Commission on Labour, 1969, recommended that the recognized union be given the right to nominate worker representatives to the works committee.

 In 1956, the government suggested at the annual labour conference that a delegation should go to Europe and study how the system worked in countries where many of the joint bodies were still active. The delegation reported back to the conference and proposed that JMCs be set up in all establishments employing 500 or more workers. The conference adopted this recommendation as a resolution in 1958.

 After the JMC experience, the Government decided to make a fresh attempt at participation in public sector units (PSUs) at least. It announced in 1971 a scheme for worker directors on PSU boards. One worker director was made mandatory for each PSU, the representative being a nominee of the recognized union.

In 1975, one of the populist measures adopted by the Government was a 20-point programme, and workers’ participation was one of the points. A new scheme of shop councils and joint councils was formulated in October that year.

 When the Janata Party came to power in 1977, it appointed a committee under Labour Minister Ravindra Verma to investigate statutory imposition of participation. The Verma Committee in 1978 duly recommended a statute on participation.

 The final step in the rather prolonged introduction of participation was taken in 1990, when the new Government drafted a Participation of Workers in Management Bill and circulated it among chambers of commerce and major unions for comments. The annual labour conference that year had an almost single point agenda – statutory participation.

Key Takeaway

Preventive measures of industrial disputes

1. Labour Welfare Officer
2. Tripartite and Bipartite Bodies
3. Standing Orders
4. Grievance Procedure
5. Collective Bargaining
6. Strong Trade Unions
7. Labour Co- Partnership and Profit sharing
8. Joint Consultations

Adjudication means a mandatory settlement of an industrial dispute by a labour court or a tribunal

Arbitration is a procedure in which a neutral third-party studies the bargaining situation, listens to both the parties, gathers information and then makes recommendations that are binding on both the parties.

A grievance procedure is a formal process which is preliminary to arbitration, which enables the parties involved to attempt to resolve their differences in a peaceful and orderly manner.

Reference:

1. Labour Economics by G.P. Sinha

2. Labour Economics by T.N.B Bragoliwal