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5 Industrial peace
6 Government machinery
1 Industrial Disputes.
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 o r term of employment or with the conditions of labour of any person‖.
According to the Industrial Disputes Act, 1947, Section 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 o r term of employment or with the conditions of labour of any person‖.
2 Impacts of industrial relations conflict for a business
Industrial relations conflict can affect the business in the following way.
Ø Reduced productivity
Ø Loss of profits
Ø Damage to public image
Ø Difficulty in recruiting & keeping staff
Ø Wasted time and energy
Ø Increased costs
Due to lack of interests, labour will not concentrate in quantity and quality of production. It leads to loss of profit.
2. Loss of profits
Even though all companies and organizations are targeting in profits, they can‘t proceed for that goals because of labour absence and decrease in production.
3. Damage to public Image
Company‘s good will and self image is very important in this competitive world. So, due to industrial disputes and strikes that image will be get down in people mind.
4. Difficulty in recruiting & keeping staff
Employee must have the value and satisfaction in their working period about the company, but if the firm‘s value has damaged due to industrial disputes means the company can‘t recruit any other employees to their company and fulfilment of goals.
5. Wastage of time and Energy
If unnecessary disputes arises inside the organization and it is continuing means it will result in major discussion and finally it leads to wastage of time and energy.
6. Increased costs
The mantra for perfect business is decrease in cots and increase in profits, but the increase in industrial disputes will have the main problem of increase in costs and decrease in production and also the profit
1. Unrest and unnecessary tensions engulf the hearts and minds of all the people involved - labour and senior management.
2. There is economic loss due to conflicts because conflicts may result in strikes and lock-outs. This causes low or no production resulting in industrial loss.
3. Industrial loss may cause economic depression because many industries are interlinked. A problem in one industry may drastically affect another industry.
4. The lives of low-level labourers become worse when they are out of work. They may be the only working members of the family, and their joblessness may lead everyone in the family to poverty.
5. When industrial conflicts get out of hand, they become a threat to peace and security. Workers may resort to violence and indulge in sabotage.
3 Causes Of Industrial Disputes
Handling employee misconduct is a very critical task to be performed by the senior managers. Misconduct and other offensive behaviors often lead to decreased levels of productivity as they affect the individual performance of the employees. To manage discipline among employees, every company opts for a discipline policy which describes the approach it will follow to handle misconduct.
The causes of industrial disputes can be broadly classified into two categories: economic and non-economic causes. The economic causes will include issues relating to compensation like wages, bonus, allowances, and conditions for work, working hours, leave and holidays without pay, unjust layoffs and retrenchments. The non economic factors will include victimization of workers, ill treatment by staff members, sympathetic strikes, political factors, indiscipline etc.
Ø Wages and allowances
Ø Personnel and retrenchment
Ø Indiscipline and violence
Ø Leave and working hours
Wages and allowances
Since the cost of living index is increasing, workers generally bargain for higher wages to meet the rising cost of living index and to increase their standards of living. In 2002, 21.4% of disputes were caused by demand of higher wages and allowances. This percentage was 20.4% during 2003 and during 2004 increased up to 26.2%. In 2005, wages and allowances accounted for 21.8% of disputes.
Personnel and retrenchment
Personnel and retrenchment: The personnel and retrenchment have also been an important factor which accounted for disputes. During the year 2002, disputes caused by personnel were 14.1% while those caused by retrenchment and layoffs were 2.2% and 0.4% respectively. In 2003, a similar trend could be seen, wherein 11.2% of the disputes were caused by personnel, while 2.4% and 0.6% of disputes were caused by retrenchment and layoffs. In year 2005, only 9.6% of the disputes were caused by personnel, and only 0.4% were caused by retrenchment.
Indiscipline and violence:
From the given table, it is evident that the number of disputes caused by indiscipline has shown an increasing trend. In 2002, 29.9% of disputes were caused because of indiscipline, which rose up to 36.9% in 2003. Similarly in 2004 and 2005, 40.4% and 41.6% of disputes were caused due to indiscipline respectively. During the year 2003, indiscipline accounted for the highest percentage (36.9%) of the total time-loss of all disputes, followed by cause-groups wage and allowance and personnel with 20.4% and 11.2% respectively. A similar trend was observed in 2004 where indiscipline accounted for 40.4% of disputes.
Bonus has always been an important factor in industrial disputes. 6.7% of the disputes were because of bonus in 2002 and 2003 as compared to 3.5% and 3.6% in 2004 and 2005 respectively
Leave and working hours:
Leave and working hours: Leaves and working hours have not been so important causes of industrial disputes. During 2002, 0.5% of the disputes were because of leave and hours of work while this percentage increased to 1% in 2003. During 2004, only 0.4% of the disputes were because of leaves and working hour
Consequences of Industrial Conflicts
Ø Unrest and unnecessary tensions engulf the hearts and minds of all the people involved - labourers and senior management.
Ø There is economic loss due to conflicts because conflicts may result in strikes and lock-outs. This causes low or no production resulting in industrial loss.
Ø Industrial losses may cause economic depression because many industries are interlinked. A problem in one industry may drastically affect another industry.
Ø The lives of low-level labourers become worse when they are out of work. They may be the only working members of the family, and their joblessness may lead everyone in the family to poverty.
Ø When industrial conflicts get out of hand, they become a threat to peace and security. Workers may resort to violence and indulge in sabotage.
Ø Strike is ―a temporary cessation of work by a group of employees in order to express their grievance or to enforce a demand concerning changes in work conditions‖.
Ø Section 2(q) of the Industrial Disputes Act, 1947, defines a strike as ―a cessation of work by a body of persons employed in any industry acting in combination, or a concerted refusal under a common understanding of a number of persons who are or have been so employed to continue to work or to accept employment‖.
Types of Strikes
Ø Go slow - Go slow does not amount to strike but it is a serious case of misconduct.
Ø Hunger strike-Some workers may resort to fast on or near the place of work or residence of the employer
Ø Lightning or wildeat strike -It is an unofficial strike ie., a strike not sanctioned by the union. Such strikes occur in violation of the no strike pledge in collective bargaining agreements
Ø Stay in, sit down, pen down or Tool down strike- In all such cases the workmen after taking their seats, refuse to do work by their combination
Ø Symapathetic strike-Cessation of work in the support of the demand workmen belonging to their employer. The management can take disciplinary actions for the absence of workmen.
Ø Economic Strike-In this type the members of trade union stop work to enforce their economic demands such as increase in wages, bonus and other benefits.
Ø General strike-It means a strike by members of all or most of the unions in region or an industry. It nay be a strike of all or most of the unions in region or an industry.
Ø Lock outs-It 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 work on the terms and conditions specified by the employers.
Ø Lay off-Lay off means failure, refusal or inability of an employer, shortage of power or raw materials or accumulation of the stocks or the breakdown of the machinery or for any other reason not to give employment to a workman.
Ø Retrenchment-It means the termination of the service of a workman for any reasons by the employer. It does not include the voluntary retirement of the workman.
Ø Gherao-It denotes collective action by the workers which members of the management will be imprisoned by them.
Ø Picketing-When workers are dissuaded a certain men at the factory gates it is called as picketing. It is perfectly legal . It is to draw the attention of public.
Ø Boycott-The workers may decide to boycott the company by not using its products. It affects marketability of its products.
5 Industrial peace
Industrial peace is not merely a negative concept signifying the absence of industrial unrest, or the reconciling of hostile forces in order to avoid ruinous strife, but it also signifies the active presence of harmonious and good industrial relations generating amity and goodwill between the partners in an industry – a condition which is both the cause and effect of fruitful co – operation
1. Strong trade union with democratic norms
2. Employers should have progressive outlook
3. Employers should recognize the rights of the workers\
4. Both (workers and management) should faith in collective bargaining and settlement disputes.
5. Encourgement of workers participative management.
6. Two communication between both the parties
7. Govt should play an active role for promoting industrial peace.It should make law for the compulsory recognition of a representative union in each industrial unit.
6 Government Machinery
The various methods and machinery under the industrial disputes act can be classified as under the following heads:
Board of conciliation
Court of inquiry
Industrial tribunal and
Conciliation, is a form of mediation. Mediation is the act of making active effort to bring two conflicting parties to compromise. 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.
Conciliation is the ―practice by which the services of a neutral party are used in a dispute as a means of helping the disputing parties to reduce the extent of their differences and to arrive at an amicable settlement of agreed solution.‖
The Industrial Disputes Act, 1947 provides for conciliation, and can be utilised either by appointing conciliation officers (permanently or for a limited period) or by constituting a board of conciliation. This conciliation machinery can take a note of a dispute or apprehend dispute either on its own or when approached by either party.
With a view to expediting conciliation proceeding, time-limits have been prescribed— 14 days in the case of conciliation officers and two months in the case of a board of conciliation, settlement arrived at in the course of conciliation is binding for such period as may be agreed upon between the parties or for a period of 6 months and with continue to be binding until revoked by either party. The Act prohibits strike and lock-out during the pendency of conciliation proceedings before a Board and for seven days after the conclusion of such proceedings.
The law provides for the appointment of Conciliation Officer by the Government to conciliate between the parties to the industrial dispute. The Conciliation Officer is given the powers of a civil court, whereby he is authorised to call the witness the parties on oath. It should be remembered, however, whereas civil court cannot go beyond interpreting the laws, the conciliation officer can go behind the facts and make judgment which will be binding upon the parties.
On receiving information about a dispute, the conciliation officer should give formal intimation in writing to the parties concerned of his intention to commence conciliation proceedings from a specified date. He should then start doing all such things as he thinks fit for the purpose of persuading the parties to come to fair and amicable settlement of the dispute.
Conciliation is an art where the skill, tact, imagination and even personal influence of the conciliation officer affect his success. The Industrial Disputes Act, therefore, does not prescribe any procedure to the followed by him.
The conciliation officer is required to submit his report to the appropriate government along with the copy of the settlement arrived at in relation to the dispute or in case conciliation has failed, he has to send a detailed report giving out the reasons for failure of conciliation.
The report in either case must be submitted within 14 days of the commencement of conciliation proceedings or earlier. But the time for submission of the report may be extended by an agreement in writing of all the parties to the dispute subject to the approval of the conciliation officer.
If an agreement is reached (called the memorandum of settlement), it remains binding for such period as is agreed upon by the parties, and if no such period is agreed upon, for a period of six months from the date on which the memorandum of settlement is signed by the parties to the dispute, and continues to be binding on the parties after the expiry of the period aforesaid, until the expiry of two months from the date on which a notice in writing of an intention to terminate the settlement is given by one of the party or parties to the settlement.
Board of Conciliation:
In case Conciliation Officer fails to resolve the differences between the parties, the government has the discretion to appoint a Board of Conciliation. The Board is tripartite and ad hoc body. It consists of a chairman and two or four other members.
The chairman is to be an independent person and other members are nominated in equal number by the parties to the dispute. Conciliation proceedings before a Board are similar to those that take place before the Conciliation Officer. The Government has yet another option of referring the dispute to the Court of Inquiry instead of the Board of Conciliation.
The machinery of the Board is set in motion when a dispute is referred to it. In other words, the Board does not hold the conciliation proceedings of its own accord. On the dispute being referred to the Board, it is the duty of the Board to do all things as it thinks fit for the purpose of inducing the parties to come to a fair and amicable settlement. The Board must submit its report to the government within two months of the date on which the dispute was referred to it. This period can be further extended by the government by two months.
2. 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.
The court of enquiry is required to submit its report within a period of six months from the commencement of enquiry. This report is subsequently published by the government within 30 days of its receipt. Unlike during the period of conciliation, workers‘ right to strike, employers‘ right to lockout, and employers‘ right to dismiss workmen, etc. remain unaffected during the proceedings in a court to enquiry.
A court of enquiry is different from a Board of Conciliation. The former aims at inquiring into and revealing the causes of an industrial dispute. On the other hand, the latter‘s basic objective is to promote the settlement of an industrial dispute. Thus, a court of enquiry is primarily fact-finding machinery.
On failure of conciliation proceedings, the conciliation officer many persuade the parties to refer the dispute to a voluntary arbitrator. Voluntary arbitration refers to getting the disputes settled through an independent person chosen by the parties involved mutually and voluntarily.
In other words, arbitration offers an opportunity for a solution of the dispute through an arbitrator jointly appointed by the parties to the dispute. The process of arbitration saves time and money of both the parties which is usually wasted in case of adjudication.
Voluntary arbitration became popular as a method a settling differences between workers and management with the advocacy of Mahatma Gandhi, who had applied it very successfully in the Textile industry of Ahmedabad. However, voluntary arbitration was lent legal identity only in 1956 when Industrial Disputes Act, 1947 was amended to include a provision relating to it.
The provision for voluntary arbitration was made because of the lengthy legal proceedings and formalities and resulting delays involved in adjudication. It may, however, be noted that arbitrator is not vested with any judicial powers.
He derives his powers to settle the dispute from the agreement that parties have made between themselves regarding the reference of dispute to the arbitrator. The arbitrator should submit his award to the government. The government will then publish it within 30 days of such submission. The award would become enforceable on the expiry of 30 days of its publication.
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.
It is based on the notion of self-government in industrial relations. Furthermore, it helps to curtail the protracted proceedings attendant on adjudication, connotes a healthy attitude and a developed outlook; assists in strengthening the trade union movement and contributes for building up sound and cordial industrial relations.
The ultimate remedy for the settlement of an industrial dispute is its reference to adjudication by labour court or tribunals when conciliation machinery fails to bring about a settlement. Adjudication consists of settling disputes through intervention by the third party appointed by the government. The law provides the adjudication to be conducted by the Labour Court, Industrial Tribunal of National Tribunal.
A dispute can be referred to adjudication if hot the employer and the recognised union agree to do so. A dispute can also be referred to adjudication by the Government even if there is no consent of the parties in which case it is called ‗compulsory adjudication‘.
As mentioned above, the dispute can be referred to three types of tribunals depending on the nature and facts of dispute in questions.
(b) Industrial tribunals, and
(c) National tribunals.
The procedure, powers, and provisions regarding commencement of award and period of operation of award of these three bodies are similar. The first two bodies can be set up either by State or Central Government but the national tribunal can be constituted by the Central Government only, when it thinks that the adjudication of a dispute is of national importance. These three bodies are into hierarchical in nature. It is the
Government‘s prerogative to refer a dispute to any of these bodies depending on the nature of dispute.
(а) Labour Court:
A labour court consists of one person only, who is normally a sitting or an ex-judge of a High Court. It may be constituted by the appropriate Government for adjudication of disputes which are mentioned in the second schedule of the Act.
The issues referred to a labour court may include:
(i)The propriety or legality of an order passed by an employer under the Standing Orders.
(ii) The application and interpretation of Standing Orders.
(iii) Discharge and dismissal of workmen and grant of relief to them.
(iv)Withdrawal of any statutory concession or privilege.
(v) Illegality or otherwise of any strike or lockout.
(vi) All matters not specified in the third schedule of Industrial Disputes Act, 1947. (It deals with the jurisdiction of Industrial Tribunals).
(b) Industrial Tribunal:
Like a labour court, an industrial tribunal is also a one-man body. The matters which fall within the jurisdiction of industrial tribunals are as mentioned in the second schedule or the third schedule of the Act. Obviously, industrial tribunals have wider jurisdiction than the labour courts.
Moreover an industrial tribunal, in addition to the presiding officer, can have two assessors to advise him in the proceedings; the appropriate Government is empowered to appoint the assessors.
The Industrial Tribunal may be referred the following issues:
1. Wages including the period and mode of payment.
2. Compensatory and other allowances.
3. Hours of work and rest intervals.
4. Leave with wages and holidays.
5. Bonus, profit sharing, provident fund and gratuity.
6. Shift working otherwise than in accordance with the standing orders.
7. Rule of discipline.
10. Any other matter that may be prescribed.
(c) National Tribunal:
The Central Government may constitute a national tribunal for adjudication of disputes as mentioned in the second and third schedules of the Act or any other matter not mentioned therein provided in its opinion the industrial dispute involves ―questions of national importance‖ or ―the industrial dispute is of such a nature that undertakings established in more than one state are likely to be affected by such a dispute‖.
The Central Government may appoint two assessors to assist the national tribunal. The award of the tribunal is to be submitted to the Central Government which has the power to modify or reject it if it considers it necessary in public interest.
It should be noted that every award of a Labour Court, Industrial Tribunal or National Tribunal must be published by the appropriate Government within 30 days from the date of its receipt. Unless declared otherwise by the appropriate government, every award shall come into force on the expiry of 30 days from the date of its publication and shall remain in operation for a period of one year thereafter.
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