Industrial Disputes Prevention & Settlement

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1 Learning Objectives To Different categories of The relevant ILO standards on industrial disputes The settlement of industrial disputes through conciliation, adjudication and voluntary arbitration.

2 Structure Industrial Disputes Prevention & Settlement 5.1 Introduction 5.2 Categories of disputes 5.3 Relevant ILO standards on Industrial Disputes Settlement 5.4 Prevention of Industrial Disputes 5.5 Central Industrial Relations Machinery 5.6 Summary

3 5.1 Introduction The prompt, equitable & effective settlement of disputes is pre-requisite for healthy industrial relations. Appropriate dispute settlement machinery with the least intervention from outside, is ideal. But in reality there is excessive third party intervention. There is a growing concern that the dispute settlement machinery has become legalistic, expensive & slow.

4 5.1 Introduction In India & other industrial nations there is a growing backlog of pending disputes. There is an urgent need to identify ways & means to increase efficiency and effectiveness of industrial adjudication. There is a rise in industrial disputes & claims but no improvement in number of cases getting resolved. The issue needs to be reviewed in broader perspective of developing human resource oriented culture in the enterprise level.

5 5.2 Categories of disputes 1] Interest Disputes: relate to establishment of or modification of the existing terms & conditions of employment which constitute rights and obligations of the contracting parties. 2] Rights Disputes : on the other hand relate to interpretation and application of existing clauses in the contract, collective bargain. Most such issues relate to termination of a worker s services by employer.

6 5.2 Categories of disputes Normally interest disputes are settled through negotiation, failing which it involves threatening action of strikes / lock outs. On the other had, rights disputes are settled by arbitration or labour courts. In India such distinction is not observed and both conciliation & adjudication services are available for both types of disputes. Any dispute between employer & employee of any nature what so ever is considered as industrial dispute & has to be resolved per provisions of Industrial Disputes Act.

7 5.3 Relevant ILO standards on Industrial Disputes Settlement 1] Both employers & employees have right to protect their interests by joining an association & affiliating it with international organizations 2] They have protection from acts of interference from either side. 3] members of ILO need to establish a tripartite consultation for resolution of disputes. 4] provide measures for settlement of labour disputes through collective bargaining.

8 5.3 Relevant ILO standards on Industrial Disputes Settlement 5] Free voluntary conciliation & arbitration services be offered for settlement of disputes. 6]Agreed procedures be established for possibility of final solution for grievances that could not be resolved within the organization. 7] Worker to have a facility for appeal against termination of services to an impartial body such as court, labour tribunal or arbitration.

9 5.4 Prevention of Industrial Disputes The best way to prevent industrial disputes is to strengthen the collaborative & cooperative relationship between labour & management. Human resource is an asset that has unlimited potential. Newer ways for employee commitment, motivation & satisfaction are being developed by Human Resource Managers. Focus is on enterprise, rather than industry based resolution of conflicts. Thus individual grievance cannot assume proportion of industrial dispute.

10 5.4 Prevention of Industrial Disputes A professional approach to labour relations is required to develop an effective system of industrial dispute prevention & resolution. In fact, industrial relations scholars believe that an ideal industrial policy involves a judicious mix of mechanism to promote effective grievance redressal, collective bargaining and joint consultation these three issues being intimately intertwined with each other. Governments, too, are concerned with effective dispute resolution, as success of economic reforms rests on industrial peace & harmony.

11 5.5 Industrial Relations Machinery Two types of machinery exist in India, machinery for direct settlement of disputes & machinery for third party settlement. Former comprises of both voluntary & statutory measures like mediation, works committees, grievance procedure, collective bargaining etc. Latter consists of purely statutory measures like conciliation, adjudication & voluntary arbitration. Machinery set up can be either consultative or conciliation or arbitration.

12 5.5 Industrial Relations Machinery Mediation : is a process available to the parties involved in contract negotiation by which an outside party is called for by union & management to help them arrive at a solution. Mediator does not offer solution, but assists parties towards solution. Conciliation : Trade Disputes Act, 1929 provides for appointment of conciliation officer or in special cases, setting up of boards of conciliation, to mediate and promote settlement of disputes.

13 5.5 Industrial Relations Machinery Conciliation : contd. Recommendations of conciliation officers may be accepted in full or part or totally rejected. Thus conciliation attempts to narrow the area of disagreement, to remove reasons for friction and to help arrive at common agreement. The Act requires conciliation officers to conclude proceedings in 14 days and boards in two months ; unless both parties agree for extension. Conciliation is mandatory for public utilities.

14 5.5 Industrial Relations Machinery Conciliation : contd. In case conciliation fails to resolve the dispute, next stage may be compulsory adjudication or parties are free to act on their own. It is true that conciliation efforts have resolved number of disputes, but it has shortcomings like process is lengthy parties fail to attend proceedings conciliation officers lack training and are not competent it is perceived as a step prior to go for legal action.

15 5.5 Industrial Relations Machinery Conciliation : contd. Conciliation can be more effective if it is freed from outside influence and conciliation machinery is adequately staffed. Independent conciliation machinery inspires greater confidence & will evoke more cooperation from the parties. Conciliation officers need to be properly selected, & trained before & after appointment. Conciliation officer should hold proceedings in parties workplace and not in his office. They should have authority to enforce parties attendance.

16 5.5 Industrial Relations Machinery Conciliation : Procedure First preliminary investigation is conducted by officer by finding out whether the union is registered and then obtaining a statement of demands from the party seeking conciliation. This is sent to the other party for response. Once the response is received the officer can decide whether the case is to be taken up for reconciliation. The officer arranges meeting with parties either separately or together at the time & place selected by him to start process.

17 5.5 Industrial Relations Machinery Conciliation : Procedure In case dispute is amicably resolved agreement of settlement is signed. In case no such solution is there, the officer files a failure report. The authority studies the report along with officer s confidential note to decide whether the matter is to be submitted to the tribunal or labour court. If parties agree during reconciliation, the matter can be submitted to voluntary arbitration.

18 5.5 Industrial Relations Machinery Adjudication : Adjudication means a mandatory settlement of dispute by a labour court or a tribunal. The Government, generally, refers the dispute to adjudication after failure of conciliation proceedings. There are two requirements for the matter to be referred to adjudication. First there should be a valid industrial dispute & two it should be expedient to refer it to adjudication.

19 5.5 Industrial Relations Machinery Adjudication : contd. Adjudication machinery has exercised considerable influence on conditions of work & labour management relations. It was instrumental in improving standard of wages, securing allowances to maintain level of real wages, bonus, and in bringing about uniformity in benefits & amenities. It also succeeded in avoiding work stoppages by offering acceptable alternatives to direct action.

20 5.5 Industrial Relations Machinery Adjudication : contd. Criticisms levied against adjudication include considerable delay in concluding proceedings since power for reference is with the government, adjudication is sometimes discriminatory, process is expensive, as party aggrieved by adjudication appeals to High Court or Supreme Court

21 5.5 Industrial Relations Machinery Adjudication : contd. Criticisms levied against adjudication include It inhibits growth of trade unions, prevents voluntary settlement of industrial disputes.& growth of collective bargaining and it has failed to achieve goal of industrial peace The ID Act does not allow parties to be represented by lawyers in reconciliation, but in adjudication they can with consent of other party.

22 5.5 Industrial Relations Machinery Adjudication : contd. The court has right to decide which party bears the cost of proceedings. In case of dismissals & discharge if the labour grants reinstatement of any worker & employer prefers an appeal, the employer is liable to pay full wages last drawn to worker during pendency of such proceedings.

23 5.5 Industrial Relations Machinery Adjudication : contd. Labour courts have been constituted by the Central as well as State Governments under the Acts. They are empowered to decide legality or otherwise of a strike, lock out, closure, stoppage etc. & cases under various industrial relations Acts. Voluntary Arbitration : was first introduced in Ahmedabad textile industry under guidance of Mahatma Gandhi.

24 5.5 Industrial Relations Machinery The main ingredients of voluntary arbitration are industrial dispute must exist or be apprehended agreement must be in writing reference to voluntary arbitration must be made before dispute is referred to the labour court the name of arbitrator/s must be specified arbitrator/s investigate dispute and submit arbitration award to the appropriate authority

25 5.5 Industrial Relations Machinery Voluntary arbitration is one of the recognized & democratic ways for settling industrial disputes. It is the best method for solving disputes & is a supplement to collective bargaining It is based on the notion of self government in industrial relations. It strengthens trade unions, denotes healthy attitude & is quicker & the least expensive. But easy availability of adjudication in case of failure of negotiation did not allow voluntary arbitration to progress in India.

26 5.5 Central Industrial Relations Machinery CIRM is headed by Chief Labour Commissioner & is entrusted with the task of maintaining good industrial relations central sphere. Its main functions are Prevention & settlement of industrial disputes in industries for which the Central Government is the appropriate government under ID Act, 1947

27 5.5 Central Industrial Relations Machinery Enforcement of labour laws in such industries & establishments. Verification of membership of trade unions in major ports, registered trade unions & those under Code of Discipline. Enforcement of awards & settlements Conduct enquiries into the breaches of Code of Discipline.

28 5.5 Central Industrial Relations Machinery Promotion of works committees & workers participation in management. Collection of statistical data regarding industrial disputes, work stoppages, wages, labour situation & labour regulations in the central sphere. Defence of court cases and writ petitions arising out of implementation of labour laws.

29 5.6 Summary one of the main factors which acts as a hurdle to the maintenance & promotion of industrial peace at present is the increasing resort to the adjudication machinery in preference to voluntary arbitration & conciliation. The state government should take all necessary measures t encourage settlement of disputes through voluntary arbitration & conciliation. There should be a clause in every settlement & agreement for reference of disputes arising over their interpretation or violation, to arbitration.

30 5.6 Summary It should also provide that there will be no strike or lockout over the question of interpretation of collective agreements. It is felt that there is too much government intervention & it is preventing creation of proper atmosphere for meaningful collective bargaining. NLC states the requirements of national policy make it imperative that state regulation will have to co-exist with collective bargaining. However it has recommended for a shift in emphasis towards collective bargaining.

31 The End! In the next session we cover chapter six on Trade Unionism & Industrial Relations. ZÉÉw _âv~4

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