MECHANISM TO DISPUTE RESOLUTION
The Industrial Relations Act 2020 represents a significant reform in the realm of labour
relations, specifically targeting the streamlining of dispute resolution processes. This
legislation fundamentally overhauls the existing system, replacing the outdated framework of
labour courts and tribunals with a new structure comprised of Industrial Tribunals and a
National Industrial Tribunal. This structural shift is intended to accelerate the resolution of
labour disputes, thereby minimizing the time and financial burden associated with litigation.
By consolidating and centralizing the process within a more efficient system, the Act aims to
reduce the delays and complexities that have traditionally characterized labour dispute
resolution.
Beyond these structural changes, the Industrial Relations Act 2020 also encourages a
proactive approach to conflict resolution by promoting the use of alternative dispute
resolution (ADR) methods. The Act recognizes the value of mediation and conciliation as
effective tools for resolving conflicts amicably and expeditiously. By encouraging parties to
engage in mediation or conciliation, the Act seeks to foster a collaborative approach to
resolving disputes, minimizing adversarial proceedings and promoting a more harmonious
environment in the workplace. This shift towards ADR is expected to not only expedite
dispute resolution but also enhance the overall health and stability of industrial relations,
creating a more productive and less contentious work environment.
Development of Indian Labour Laws and Establishment of Social Rights
The evolution of labour laws in India can be traced back to the British colonial period when
various legislations were enacted to regulate labour conditions. The early 20th century saw the
introduction of several key laws aimed at protecting workers' rights including:
Factories Act, 1948: This act was established to ensure the health, safety, and welfare of
workers in factories. It set forth regulations regarding working hours, rest intervals, and
provisions for hazardous work environments.
Trade Unions Act, 1926: This act recognized the right of workers to form unions for
collective bargaining purposes. It provided legal recognition to trade unions and laid down
their registration process.
Minimum Wages Act, 1948: This legislation aimed at ensuring that workers receive a
minimum wage for their labour across various sectors.
Payment of Wages Act, 1936: This act regulates the payment of wages to certain classes of
employed persons and ensures timely payment without unauthorized deductions.
Industrial Employment (Standing Orders) Act, 1946: This act mandates employers to
define conditions of employment through standing orders that govern matters such as
termination procedures and disciplinary actions.
The post-independence era marked a significant shift towards establishing social rights for
workers through comprehensive labour policies aimed at promoting social justice and
economic equity. The Constitution of India enshrines several fundamental rights related to
labour under Articles 14 (Right to Equality), 19 (Freedom of Speech), 21 (Right to Life), and
Directive Principles under Article 43 (Living Wage).
Aim of Labour Policy in India
The primary aim of India's labour policy is to create an environment conducive to
harmonious industrial relations while ensuring social justice for workers. Key objectives
include:
Promotion of Collective Bargaining: Encouraging dialogue between employers and
employees through trade unions facilitates mutual understanding and cooperation.
Protection of Workers' Rights: Ensuring that all workers have access to fair wages, safe
working conditions, job security, and social security benefits.
Dispute Resolution Mechanisms: Establishing effective mechanisms for resolving industrial
disputes is critical for maintaining peace in workplaces. The Industrial Disputes Act provides
several methods for dispute resolution:
Conciliation: A conciliator appointed by the government attempts to mediate between
disputing parties.
Arbitration: If conciliation fails, parties may agree to refer their dispute to an arbitrator
whose decision is binding.
Adjudication: In cases where disputes remain unresolved after conciliation efforts or if they
involve significant public interest or legal questions, they may be referred to labour courts or
tribunals established under the Industrial Disputes Act.
Promotion of Social Security Measures: Implementing schemes like the Employees
Provident Fund (EPF) and Employees' State Insurance (ESI) ensures financial security for
workers during unemployment or illness.
Encouragement of Skill Development: Fostering skill development initiatives enhances
employability among workers while meeting industry demands.
Definitions of Terms:
Industrial Dispute: Any disagreement or conflict between employers, workers, or even
among workers themselves that relates to employment, non-employment, employment
conditions, or labour conditions. This includes individual worker disputes with their
employer regarding issues like dismissal, discharge, retrenchment, or termination.
Conciliation Officer: An officer appointed under Section 43 of the relevant code.
Conciliation Proceeding: Any proceeding held by a Conciliation Officer as outlined in the
code.
Controlled Industry: An industry where the Union’s control is declared necessary for the
public interest by a Central Act.
National Industrial Tribunal: A body established under Section 46 of the code.
Settlement: An agreement reached during conciliation proceedings. This also includes
written agreements between employers and workers reached outside conciliation proceedings
that are signed by both parties and submitted to the appropriate government and the
Conciliation Officer.
Tribunal: Refers to an Industrial Tribunal formed under Section 44 of the code.
Worker: A person employed in any industry for hire or reward, performing manual,
unskilled, skilled, technical, operational, clerical, or supervisory work. This includes working
journalists, sales promotion employees, and those who have been dismissed, discharged, or
retrenched in connection with an industrial dispute.
However, “worker” does not include:
1. Individuals are subject to the Air Force Act, 1950, the Army Act, 1950, or the Navy
Act, 1957.
2. Police officers, prison officers, or other prison employees.
3. Persons mainly employed in managerial or administrative roles.
4. Individuals in supervisory roles earning over 18,000 rupees per month or an amount
specified by the Central Government.
For purposes of Chapter III
“Worker” includes all persons employed in trade or industry.
“Worker” also includes the definition found in Clause (m) of Section 2 of the Unorganized
“Workers” Social Security Act, 2008.
Award: An interim or final decision by an Industrial Tribunal (Section 44) or National
Industrial Tribunal (Section 46) on an industrial dispute or related issues. This also includes
arbitration awards made under Section 42.
Mechanism for Resolution of Industrial Disputes in India
The resolution of industrial disputes in India is governed primarily by the Industrial Disputes
Act, 1947. This legislation provides a structured framework for addressing conflicts between
employers and employees, ensuring that disputes are resolved efficiently and fairly. Below is
an labour ate discussion of the mechanisms available for the resolution of industrial disputes,
focusing on various sections of the Act.
Conciliation Officers - Section 43
Section 43 of the Industrial Disputes Act empowers the government to appoint conciliation
officers to facilitate the resolution of industrial disputes. These officers play a crucial role in
mediating between conflicting parties before a dispute escalates to formal adjudication. The
primary functions of conciliation officers include:
Initiating Dialogue: They encourage communication between employers and employees to
foster understanding and cooperation.
Investigating Disputes: Conciliation officers investigate the circumstances surrounding a
dispute, gathering facts from both parties.
Proposing Solutions: Based on their findings, they propose solutions or compromises that
could resolve the conflict amicably.
Reporting Outcomes: If conciliation fails, these officers are required to submit a report
detailing their efforts and any agreements reached.
Conciliation serves as an essential first step in dispute resolution, aiming to prevent
prolonged conflicts and maintain industrial harmony.
Industrial Tribunal -Section 44
Section 44 establishes Industrial Tribunals as quasi-judicial bodies tasked with adjudicating
industrial disputes that cannot be resolved through conciliation. The key features include:
Composition: An Industrial Tribunal typically consists of a judicial member (often a retired
judge) and an expert member with experience in industry or labour relations.
Jurisdiction: It has jurisdiction over matters related to wages, working conditions, layoffs,
retrenchments, and other significant issues affecting workers.
Procedure: The tribunal follows a formal procedure akin to court proceedings but is
designed to be more accessible for workers.
The establishment of Industrial Tribunals ensures that disputes are resolved by
knowledgeable individuals who can provide fair judgments based on legal principles and
industry practices.
Finality of Constitution of Tribunal -Section 45
Section 45 addresses the finality concerning the constitution of an Industrial Tribunal. It
stipulates that once constituted by the appropriate government authority, no challenge can be
made regarding its composition or appointment of members unless there is evidence of mala
fide intent or procedural irregularities.
This provision underscores the importance of maintaining stability in dispute resolution
processes by preventing frivolous challenges against tribunals' compositions which could
delay justice.
National Industrial Tribunal -Section 46
Section 46 provides for the establishment of a National Industrial Tribunal (NIT) when
disputes arise at a national level or involve multiple states. Key aspects include:
Scope: The NIT deals with cases that have broader implications beyond local jurisdictions,
such as those affecting industries operating across state lines.
Composition: Similar to regular tribunals but often includes members with extensive
experience in labour law and industrial relations at national levels.
Authority: Decisions made by NIT are binding across states, ensuring uniformity in
resolving significant industrial disputes.
The creation of NIT reflects India's commitment to addressing complex labour issues that
transcend regional boundaries effectively.
Decision of Tribunal or National industrial Tribunal - Section 47
Under Section 47, decisions rendered by either an Industrial Tribunal or National industrial
Tribunal are deemed final and binding on all parties involved in the dispute unless
Challenged under specific provisions outlined within the Act itself.
Enforceability: Awards given by these tribunals must be complied with promptly; failure to
do so can lead to legal consequences for non-Compliance.
Judicial Review: While decisions are generally final, they may be subject to judicial review
under certain circumstances if there are substantial questions regarding legality or procedural
fairness.
This section reinforces the authority vested in these tribunals while also providing limited
avenues for redressal against potential injustices.
Disqualifications for Members of Tribunal and National Industrial Tribunal Section 48
Section 48 outlines disqualifications applicable to members appointed to either type of
tribunal:
Conflict of Interest: Individuals who have any direct or indirect interest in any business
connected with any industry involved in a dispute cannot serve as members.
Bias or Prejudice: Any person who has previously expressed opinions on matters relevant to
on-going disputes may also be disqualified from serving on these tribunals.
Criminal Convictions: Individuals convicted for certain offences may also face
disqualification from membership.
These provisions ensure that tribunal members remain impartial and free from influences that
could compromise their ability to deliver fair judgments.
Procedure and Powers of Arbitrator, Conciliation Officer, Tribunal, and National
Industrial Tribunal-Section 49
Section 49 of the Industrial Disputes Act delineates the roles and powers of various
authorities involved in dispute resolution.
Conciliation Officers: These are appointed by the appropriate government to promote
amicable settlement between parties. They have the authority to summon both parties,
conduct inquiries, and facilitate negotiations.
Arbitrators: If conciliation fails, disputes may be referred to an arbitrator whose decision is
binding on both parties. The arbitrator has the power to examine witnesses and documents
relevant to the dispute.
Industrial Tribunals: Established under this section, these tribunals adjudicate upon
industrial disputes that cannot be resolved through conciliation or arbitration. They possess
powers akin to those of a civil court concerning summoning witnesses, enforcing attendance,
and compelling production of documents.
National Industrial Tribunal: This tribunal addresses disputes that affect multiple states or
involve significant national interests. It has similar powers as an industrial tribunal but
operates at a national level.
Powers of Tribunal and National Industrial Tribunal to Give Appropriate Relief in Case
of Discharge or Dismissal of Worker-Section 50
Section 50 empowers tribunals to provide relief in cases where workers have been discharged
or dismissed from service without just cause.
Reinstatement: The tribunal can order reinstatement if it finds that the dismissal was
unjustified.
Compensation: In cases where reinstatement is not feasible (e.g., due to loss of confidence),
tribunals may award monetary compensation based on factors such as length of service and
severity of misconduct.
This provision ensures protection against arbitrary actions by employers while balancing their
rights with those of employees.
Transfer of Pending Cases - Section 51
Section 51 allows for the transfer of pending cases from one tribunal to another under
specific circumstances:
Administrative Efficiency: This provision aims at enhancing administrative efficiency by
allowing higher authorities to reassign cases based on workload or jurisdictional issues.
Judicial Economy: It helps prevent delays in justice delivery by ensuring that cases are
heard by competent authorities without unnecessary adjournments.
Adjustment of Services of Presiding Officers under Repealed Act- Section 52
Section 52 addresses adjustments concerning presiding officers who were appointed under
any repealed laws before the enactment of this Act:
Continuity: It ensures continuity in judicial functions by allowing these officers to continue
serving until their replacements are appointed under the current framework.
Legal Certainty: This provision provides legal certainty regarding on-going proceedings
initiated under previous legislation.
Conciliation and Adjudication of Dispute- Section 53
Section 53 outlines procedures for conciliation and adjudication:
Conciliation Process: The process begins with a notice from either party indicating a dispute
exists; this triggers intervention by a conciliation officer who attempts mediation.
Adjudication Process: If conciliation fails, parties may refer matters for adjudication before
an industrial tribunal or national tribunal depending on jurisdictional requirements.
This dual mechanism emphasizes resolving disputes amicably while providing recourse
through formal adjudicatory processes when necessary.
Reference to and Functions of National Industrial Tribunal -Section 54
Section 54 of the industrial Disputes Act establishes the National Industrial Tribunal (NIT) as
a key body for resolving disputes that are beyond the jurisdiction of local or state-level
authorities. The NIT is constituted by the Central Government and consists of a chairperson
and other members who are appointed based on their expertise in industrial relations.
Functions:
1. The NIT adjudicates disputes referred to it by the Central Government.
2. It has jurisdiction over matters involving multiple states or significant national
interest.
3. The tribunal aims to provide speedy justice in complex industrial disputes that cannot
be resolved at lower levels.
Form of Award, Its Communication and Commencement-Section 55
Section 55 outlines the requirements regarding the form and communication of awards made
by tribunals or labour courts.
Key Provisions:
1. Awards must be in writing and should clearly state the reasons for the decision.
2. The award must be communicated to all parties involved within a specified
timeframe.
3. The commencement date of an award is crucial as it determines when obligations
under the award take effect.
Payment of Full Wages to Worker Pending Proceedings in Higher Courts - Section 56
Section 56 mandates that workers shall receive full wages while proceedings are pending
before higher courts concerning any dispute arising from an award or settlement.
Implications:
This provision ensures financial security for workers during prolonged legal processes.
It reflects a commitment to uphold workers’ rights even amidst legal uncertainties.
Persons on Whom Settlements and Awards Are Binding -Section 57
According to Section 57, settlements reached between employers and employees, as well as
awards given by tribunals, are binding on specific parties.
Scope:
1. Settlements apply not only to those directly involved but also extend to all employees
represented by trade unions.
2. Employers must adhere to these settlements unless they are set aside by competent
authorities.
Period of Operation of Settlements and Awards - Section 58
Section 58 specifies how long settlements and awards remain effective.
Details:
1. Generally, settlements have a defined period during which they operate unless
renewed or modified.
2. Awards may also have specific durations unless challenged legally.
Recovery of Money due from Employer - Section 59
This section provides mechanisms for recovering dues owed by employers following an
award or settlement.
Recovery Process:
1. Workers can approach labour courts or appropriate authorities if payments are delayed
or denied.
2. The law empowers authorities to enforce recovery through various means, ensuring
compliance from employers.
Commencement and Conclusion of Proceedings - Section 60
Section 60 deals with procedural aspects regarding how proceedings commence and conclude
before labour courts or tribunals.
Procedural Aspects:
1. Clear guidelines ensure that disputes are addressed promptly without unnecessary
delays.
2. Timelines for hearings, submissions, and decisions help maintain efficiency within
dispute resolution processes.
Certain Matters to Be Kept Confidential - Section 61
Section 61 emphasizes confidentiality concerning certain matters discussed during
proceedings.
Confidentiality Provisions:
Sensitive information disclosed during negotiations may not be used against parties outside
those discussions.
This encourages open dialogue between disputing parties without fear of repercussions from
disclosed information.
CONCEPT OF WORKMAN
The Industrial Relations Code, 2020 is significant in safeguarding the welfare of employees,
ensuring they feel valued and are free from concerns about excessive workloads or unfair
displacement from their positions by others. For a long time, the Industrial Relations Code,
2020, was an overlooked piece of legislation despite existing laws that were insufficient in
protecting the rights of both workers and employers. Thus, implementing the new Industrial
Relations Code, 2020 has enabled employees to assert their entitlements and promote
harmony within the workplace.
KEYA PROVISIONS
a. Businesses with 300 or more employees must follow rules about lying off workers.
b. Industrial businesses with twenty or more workers need one or more committees to
solve worker problems.
c. The conditions for when businesses have to provide formal employment terms to their
workers now apply to businesses with 300 or more workers, up from 100 or more.
d. If a worker is accused of something bad, the investigation must be finished within 90
days.
e. Before workers go on strike, they have to tell their employer 60 days beforehand.
f. A fund for training workers will be made by the government. Employers need to add
15 days of a worker's last wages to the fund if the worker loses their job.
g. The punishment for breaking the rules is stronger.
h. If a worker is doing real work but called a trainee, the courts will help the worker.
Definitions
“Worker” Worker means any person (except an. apprentice as defined under clause (aa) of
section 2 of the Apprentices Act, 1961) employed in any industry to do any manual,
unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward,
whether the terms of employment be express or implied, and includes working journalists as
defined in clause (f) of section 2 of the Working Journalists and other Newspaper Employees
(Conditions of Service) and Miscellaneous Provisions Act, 1955 and sales promotion
employees as defined in clause (d) of section 2 of the Sales Promotion Employees
(Conditions of Service) Act, 1976, and for the purposes of any, proceeding under this Code in
relation to an industrial dispute, includes any such person who has been dismissed,
discharged or retrenched or otherwise terminated in connection with, or as a consequence of,
that dispute, or whose dismissal, discharge or retrenchment has led to that dispute, but does
not include any such person
a. who is subject to the Air Force Act, 1950, or the Army Act, 1950, or the Navy Act, 1957;
or
b. who is employed in the police service or as an officer or other employee of a prison; or
c. who is employed mainly in a managerial or administrative capacity; or
d. who is employed in a supervisory capacity drawing wages exceeding eighteen thousand
rupees per month or an amount as may be notified by the Central Government from time
to time:
Provided that for the purposes of Chapter III, “worker”
a. means all persons employed in trade or industry; and
b. Includes the worker as defined in clause (m) of section 2 of the Unorganised Workers'
Social Security Act, 2008.
Explanation- The Industrial Relations Code states that the term “worker” includes all
persons employed in trade or industry and those defined under the Unorganised Workers'
Social Security Act, 2008, for the purpose of Chapter-III, which deals with trade unions.
The rest of the Code about dispute settlement and standing orders applies only to workers.
However the chapter about trade unions has wider coverage due to this provision.
The following section will explain why the term “worker” is used throughout the Code and
why it is important for understanding the Industrial Relations Code, 2020.
Case Laws
Thungabhadra Sugar Works P. Ltd. Management vs. Presiding Officer, Labour Court
and Another
In this landmark case (AIR 1964 SC 1372), the Supreme Court emphasized that the definition
of workman should be interpreted in light of the purpose behind labour legislation-to protect
workers from exploitation. The court held that even those engaged in managerial functions
could be considered workmen if their primary duties involved manual or clerical tasks.
Trambak Rubber Industries Ltd. vs. Narik Workers Union & Ors.
In this case (2005 LLR 109), the Bombay High Court reiterated that the nature of duties
performed by an employee determines their status as a workman rather than their designation
alone. The court ruled that individuals performing tasks integral to production processes
qualify as workmen regardless of their official titles.
ABP Limited & Anr., Versus State of West Bengal & Ors., 2024 LLRWEB 74
This recent judgment further clarifies the scope of what constitutes a workman under
contemporary industrial practices. The court highlighted that even those engaged on
contractual terms may fall within the ambit of 'workman' if they perform functions akin to
regular employees.