Industrial unrest

Difference between Industrial
peace & Industrial harmony
◦ Industrial Peace
◦ Industrial Harmony

The Industrial Disputes Act, 1947
◦ The Industrial Disputes Act 1947
◦ An Act to make provision for the investigation and settlement
of industrial disputes, and for certain other purposes.
◦ Citation - Act No. 14 of 1947
◦ Enacted by - Central Legislative Assembly
◦ Date enacted - 11 March 1947
◦ Date assented to - 11 March 1947
◦ Date commenced - 1 April 1947
◦ The Industrial Disputes Act 1947 extends to the whole of
India and regulates Indian labour law so far as that concerns
trade unions. It came into force April 1, 1947.

Definition
◦ According to Section 2 (k) of the Industrial Disputes Act, 1947, the term
‘industrial dispute’ means “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 of the terms of employment and conditions of
employment of any person”.

◦ The above definition is too broad and includes differences even between
groups of workmen and employers engaged in an industry. However, in
practice, industrial disputes mainly relate to the difference between the
workmen and the employers.
◦ Dispute differs from discipline and grievance. While discipline and
grievance focus on individuals, dispute focuses on collectivity of
individuals

◦ Industrial disputes are of symptoms of industrial unrest in the same way
that boils are symptoms of a disordered body.
◦ Whenever an industrial dispute occurs, both management and workers
try to pressurize each other. The management may resort to lock-out
and the workers may resort to strike, gherao, picketing, etc.

Forms of Industrial Disputes
Forms of
industrial disputes
Strikes Lock-outs Gheraos Non cooperation

STRIKE
◦ Strike is a very powerful weapon used by a trade union to get its
demands accepted. It means quitting work by a group of workers for
the purpose of bringing pressure on their employer to accept their
demands. According to Industrial Disputes Act, 1947, “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.”

types of strikes
A few of all are discussed below:
◦ (i) Economic Strike:
◦ Under this type of strike, members of the trade union stop work to
enforce their economic demands such as wages, bonus, and other
conditions of work.
◦ (ii) Sympathetic Strike:
◦ The members of a union collectively stop work to support or express
their sympathy with the members of other unions who are on strike in
the other undertakings.
◦ (iii) General Strike/central strike
◦ It means a strike by members of all or most of the unions in a region or
an industry. It may be a strike of all the workers in a particular region of
industry to force demands common to all the workers. It may also be
an extension of the sympathetic strike to express general protest by the
workers.

◦ (iv) Sit Down Strike:
◦ When workers do not leave their place of work, but stop
they are said to be on sit down or stay in strike. The workers
remain at their work-place and also keep their control over
work activities.
◦ (v) Slow Down Strike:
◦ Employees remain on their jobs under this type of strike. They
do not stop work, but restrict the rate of output in an
organised manner. They adopt go- slow tactics to put
on the employers
◦ (vi) Bandhs:
◦ when general public also helps like offices are kept closed,
clerks don’t work etc.

◦ (viii) Tool down strike
◦ when the workers remain at their work places, but refuses to
work is called tool down strikes . It is also known as tools
or pen down strike.
◦ (ix) Hunger strike
◦ it is the situation in which the whole group of workers resort
strike, but alongwith it, some workers undertake fast to press
their demands
◦ (x) Token strikes
◦ a token refers to a days stoppage or temporary stoppage of
work. It is resorted to only to bring the demand of the workers
to the notice of management.

LOCK-OUT
◦ Lock-out is declared by the employers to put pressure on their
workers. It is an act on the part of the employers to close down
the place of work until the workers agree to resume the work on
the terms and conditions specified by the employers.
◦ The Industrial Disputes Act, 1947 has defined lock-out as closing
of a place of employment or the suspension of work or the
refusal by an employer to continue to employ any number of
persons employed by him.
◦ Lock-outs are declared to curb the activities of militant workers.
Generally, lock-out is declared as a trial of strength between the
management and its employees.

Gherao
◦ It is a Hindi word which means to surround. The term ‘Gherao’ denotes a
collective action initiated by a group of workers under which members
of the management of an industrial establishment are prohibited from
leaving the business or residential premises by the workers who block
their exit through human barricade.
◦ A human barricade is created in the form of a ring or a circle at the
centre of which the persons concerned virtually remain prisoners of the
persons who resort to gherao. Gheraos are resorted to not only in
industrial organisations, but also in educational and other institutions.
The persons who are gheraoed are not allowed to more nor do any
work.

◦ Gheraos have been criticised legally and morally. Legally gheraos
amount to imposing wrongful restraints on the freedom of some
persons to move. That is why, courts have held it as an illegal action.
Morally, to gherao a person to press him to agree to certain demands is
unjustified because it amounts to getting consent under duress and
pressure. A person who is gheraoed is subjected to humiliation.
◦ Moreover, a person who has made a promise under gherao is justified in
going back over the word after that. In short, as pointed out by a
National Commission on Labour, gherao cannot be treated as a form of
industrial protest because it involves physical coercion rather than
economic pressure.

PICKETING
◦ When workers are dissuaded from reporting for work by stationing
certain men at the factory gates, such a step is known as picketing. If
picketing does not involve any violence, it is perfectly legal. It is basically
a method of drawing the attention of public towards the fact there is a
dispute between the management and the workers.

NON-COOPERATION
◦ When workers refuse to co-operate with the employers
◦ Practiced specially when government restricts the other forms of
disputes.

Mass CL
◦ When all the employees unanimously decide not to work for a day or
few days to show their resentment
◦ It creates a hindrance in smooth running of the enterprise
◦ Specially by bank employees, teachers, pilots etc.

Causes of Industrial Disputes
◦ We can classify the causes of industrial disputes into two broad
groups:
◦ (i) Economic causes, and
◦ (ii) Non-economic causes.

Economic causes include:
◦ (i) Wages/salary,
◦ (ii) Bonus,
◦ (iii) Dearness allowance,
◦ (iv) Worker’s welfare facilities
◦ V)other economic causes -
◦ -Conditions of work and employment,
- Social security measures

Non-economic causes include
◦ (i) personal causes
◦ (ii) Recognition of trade unions
◦ (iii) Political causes
◦ (iv) Sympathetic strikes,
◦ (v),other causes
-Ill-treatment by supervisory staff,
- Inter union rivalry

◦ Thus, industrial disputes do not arise only when workers are dissatisfied on
economic grounds, they also arise over issues which are of non-economic
nature. Instances may be quoted when strikes where successfully organised
to protest against the management’s decision to change the location of the
plant from one state to another. Similarly, even causes like behaviour of
supervisor and trade union rivalries may give rise to industrial disputes.

Consequences/ Adverse effects
of Industrial Disputes
◦ On producers
◦ Decrease in output/ Dimunition in output
◦ Economic loss
◦ Reduced income
◦ Loss of markets
◦ Burden of investment

◦ On labour
◦ Loss of benefits from service
◦ Economic loss
◦ Reduced income
◦ Anti-social
◦ Contempt of the society

◦ On society
◦ Reduced national income
◦ Loss inflicted to other industries
◦ Uncertain supply of raw material
◦ Price rise evils
◦ Damage to property

◦ On consumers
◦ Shortage of essential goods
◦ Loss of credit facilities
◦ Price rise
◦ Exploitation

Methods for Settlement/Resolving of
Industrial Disputes
◦ Failure of the employees and the employers to sort out their differences
bilaterally leads to the emergence of industrial disputes. The Industrial
Disputes Act, 1947 provides legalistic machinery for settlement of such
disputes by involving the interference of a third party.

Investigation
Investigation in industrial dispute is conducted by the board or court
appointed by the government. It may be voluntary or compulsory.
If it is conducted on an application by either one or both the parties to
the dispute, it is voluntary. If the government appoints a court to
investigate into the dispute without the consent of the parties to the
dispute, it is compulsory.
Th investigation aims to bring about the settlement of he dispute
immediately, by analyzing and publishing the facts about the dispute
and thereby creating public opinion about it.

Negotiation
◦ It refers to joint consultation in industry between employers and workers
to eliminate most of the problems faced by them. The solution so
obtained would be their own and not imposed upon them by any third
party. The decision is taken by proper understanding of each others
position and in good faith. For the success of negotiation , it is necessary
that both parties develop a give and take attitude towards each other.

Mediation
◦ Mediation is an attempt to settle disputes with the help of an outsider who
attempts to stimulate labour and management to reach some type of agreement.
The mediator, unlike an arbitrator, cannot decide the issue. He listens, suggests,
communicates and persuades. He does not give any award/judgment.
◦ Mediation is the act of making active effort to bring two conflicting parties to
compromise.
◦ Functions of this mediator include-
◦ Remove the differences between the two parties.
◦ Persuading the two parties to think in a manner that is based on an approach of
give and take i.e. a problem-solving approach
◦ Persuade both the parties to necessarily reach a solution and refrain from
imposing his viewpoint
◦ Change his approach depending on the need in each case and depending upon
other factors.

Conciliation:
◦ In simple sense, conciliation means reconciliation of differences between
persons. Conciliation refers to the process by which 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 one individual or a group of people.
◦ In view of its objective to settle disputes as quickly as possible,
conciliation is characterised by the following features:
◦ (i) The conciliator or mediator tries to remove the difference between the
parties.
◦ (ii) He/she persuades the parties to think over the matter with a problem-
solving approach, i.e., with a give and take approach.
◦ (iii) He/she only persuades the disputants to reach a solution and never
imposes his/her own viewpoint.
◦ (iv) The conciliator may change his approach from case to case as he/she
finds fit depending on other factors.

◦ Mediation, however, differs from conciliation in that whereas conciliator
plays only a passive and indirect role, and the scope of his functions is
provided under the law, the mediator takes active part and the scope of
his activities are not subject to any statutory provisions.

◦ According to the Industrial Disputes Act 1947, the conciliation machinery
in India consists of the following:
◦ 1. Conciliation Officer
◦ 2. Board of Conciliation
◦ 3.Court of Inquiry
◦ Conciliation Officer:
◦ The Industrial Disputes Act, 1947, under its Section 4, provides for the
appropriate government to appoint such number of persons as it thinks fit
to be conciliation officers. Here, the appropriate government means one
whose jurisdiction the disputes fall.

◦ Board of Conciliation:
◦ In case the conciliation officer fails to resolve the dispute between the
disputants, under Section 5 of the Industrial Disputes Act, 1947, the
appropriate government can appoint a Board of Conciliation. Thus, the
Board of Conciliation is not a permanent institution like conciliation
officer. It is an adhoc body consisting of a chairman and two or four
members nominated in equal numbers by the parties to the dispute.

◦ Court of Inquiry:
◦ In case of the failure of the conciliation proceedings to settle a dispute,
the government can appoint a Court of Inquiry to enquire into any
matter connected with or relevant to industrial dispute. The court is
expected to submit its report within six months. The court of enquiry
may consist of one or more persons to be decided by the appropriate
government.

Arbitration:
◦ Arbitration is resorted to by the parties fail to arrive at a settlement by
voluntary method. The parties to the dispute may then appoint an arbitrator
and refer the dispute to him. The arbitration award is binding upon the parties
who referred the dispute to arbitration.
◦ Arbitration is a process in which the conflicting parties agree to refer their
dispute to a neutral third party known as ‘Arbitrator’. In India, there are two
types of arbitration: Voluntary and Compulsory.

Voluntary Arbitration:
◦ Voluntary arbitration is one of the democratic ways for setting industrial
disputes. It is the best method for resolving industrial conflicts and is a close’
supplement to collective bargaining. It not only provides a voluntary method
of settling industrial disputes, but is also a quicker way of settling them.
◦ The employer and employees may agree to settle the dispute by appointing
an independent and impartial person.
◦ The arbitrator acts only when the dispute is referred to him/her. With a view
to promote voluntary arbitration, the Government of India has constituted a
tripartite National Arbitration Promotion Board in July 1987, consisting of
representatives of employees (trade employers and the Government.
However, the voluntary arbitration could not be successful because the
judgments given by it are not binding on the disputants. Yes, moral binding
is exception to it.

◦ The judgment on the dispute is sent to the government. The
government publishes the judgment within 30 days of its submission
and the same becomes enforceable after 30 days of its publication.
◦ The voluntary arbitration first made its appearance in India in the year
1918 when Mahatma Gandhi intervened in the dispute between the
Ahmedabad Textile mill owners and their employees

Compulsory Arbitration:
◦ In compulsory arbitration, the government can force the disputing
parties to go for compulsory arbitration. In other form, both the
disputing parties can request the government to refer their dispute for
arbitration. The judgment given by the arbitrator is binding on the
parties of dispute.
◦ Arbitration provides justice at the minimum cost. An industrial dispute
may be referred to an arbitrator by a written agreement entered into by
employer and employees at any time before referring dispute to a
labour court or industrial tribunal or national tribunal

Arguments in favour of
Compulsory Arbitration
◦ For Economic Development
◦ Weaken Trade unions
◦ Unfavourable attitude of employers

Arguments against Compulsory
Arbitration
◦ Denial of Industrial Democracy- govt. dictator
◦ Dependence on the government in trivial issues
◦ Obstacle to collective bargaining
◦ Attack on freedom-trade union
◦ Difficulty of securing impartial arbitrator
◦ Strike cannot be averted at times

Difference between arbitration
and conciliation
◦ Arbitration differs from conciliation in the sense that in arbitration the
arbitrator gives his judgment on a dispute while in conciliation, the
conciliator persuades the disputing parties to reach at a settlement
◦ If quick settlement is required then arbitration is more useful. As in
conciliation, it may fail and would result in strikes and lockouts as
conciliator can’t take a judgment.
◦ Cociliation has a long lasting effect as settlement is voluntary and it is
not forced like arbitration.
◦ Conciliation is effected in a friendly atmosphere while arbitration is in
formal court –room atmosphere

Adjudication:
◦ The ultimate legal remedy for the settlement of an unresolved dispute is
its reference to adjudication by the government. The government can
refer the dispute to adjudication with or without the consent of the
disputing parties. When the dispute is referred to adjudication with the
consent of the disputing parties, it is called ‘voluntary adjudication.’
When the government herself refers the dispute to adjudication without
consulting the concerned parties, it is known as ‘compulsory
adjudication.

◦ The Industrial Disputes Act, 1947 provides three-tier machinery for the
adjudication of industrial disputes:
◦ 1. Labour Court
◦ 2. Industrial Tribunal
◦ 3. National Tribunal
◦ A brief description on these follows:

Labour Court:
◦ Under Section 7 of the Industrial Disputes Act, 1947, the appropriate
Government by notifying in the official Gazette, may constitute Labour
Court for adjudication of the industrial disputes The labour court
consists of one independent person who is the presiding officer or has
been a judge of a High Court, or has been a district judge or additional
district judge for not less than 3 years, or has been a presiding officer of
a labour court for not less than 5 years. The labour court deals with the
matters specified in the second schedule of the Industrial Disputes Act,
1947.

◦ These relate to:
◦ 1. The property or legality of an employer to pass an order under the
standing orders.
◦ 2. The application and interpretation of standing orders.
◦ 3. Discharge or dismissal of workers including reinstatement or grant of
relief to workmen wrongfully dismissed.
◦ 4. Withdrawal of any statutory concession or privilege.
◦ 5. Illegality or otherwise of a strike or lockout.
◦ 6. All matters other than those reserved for industrial tribunals.

Industrial Tribunal:
◦ Under Section 7A of the Act, the appropriate Government may
constitute one or more Industrial tribunals for the adjudication of
industrial disputes. Compared to labour court, industrial tribunals
have a wider jurisdiction. An industrial tribunal is also constituted
for a limited period for a particular dispute on an adhoc basis.

◦ The matters that come within the jurisdiction of an industrial
tribunal include the following:
◦ 1. Wages, including the period and mode of payment.
◦ 2. Compensatory and other allowances.
◦ 3. Hours of work and rest periods.
◦ 4. Leave with wages and holidays.
◦ 5. Bonus, profit sharing, provident fund, and gratuity.
◦ 6. Classification by grades.
◦ 7. Rules of discipline.
◦ 8. Rationalisation.
◦ 9. Retrenchment of employees and closure of an establishment
or undertaking.
◦ 10. Any other matter that can be prescribed.

National Tribunal:
◦ This is the third one man adjudicatory body appointed by the Central
Government by notification in the Official Gazette for the adjudication of
industrial disputes of national importance. The central Government may,
if it thinks fit, appoint two persons as assessors to advise the National
Tribunal. When a national tribunal has been referred to, no labour court
or industrial tribunal shall have any jurisdiction to adjudicate upon such
matter.

Industrial unrest

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