The Industrial Disputes Act, 1947 Preliminary

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Political causes

Industrial disputes are pertly political also. Some important political strikes I organized by industrial workers in India. Prior to independence, as early , there was a mass strike in Mumbai against the sentence of imprisonment strikes occurred on account of actions taken against, for participating in demonstrations, trial of political leaders, etc. After the independence also, some stirkes have occurred owing to agitation's of political parties on questions like re-organisation ation of States, National Language, etc. Percentage distribution of industrial disputes by causes as published by the Ministry of Labour,

Impact/Effect/Consequences of Industrial Disputes

The consequences of Industrial disputes are many. A brief description is given

(1) Disturb the economic, social and political life of a country: When labour and equipment in the whole or any part of an industry are rendered idle by strike or lockout, national dividend suffers in a way that injures economic welfare.

Loss of Output:

(2)Loss of Output : Loss of output in an industry which is directly affected by a dispute, but other industries are also affected adversely, as stoppage of work in one industry checks activity in other industries too.

(3) Decline in the demand for goods and services: Strikes reduces the demand for the goods that other industries make, if the industry in which stoppage has occured is one that furnishes raw materials semi-finished goods or service largely used in the products of other industries.

(4) Lasting loss to the workers: There is a lasting injury to the workers in the form of work being interrupted due to the strikes which involves a loss of time which cannot be replaced. The wages are lost and the workers can least afford to lose them specially when the average earning of a worker is not very high.

(5) Increase in indebtedness : This increases the indebtedness among the workers and not only the old debts become heavier but fresh debts may also be incurred.

(6) Loss of health of family members : The workers and their family members also suffer from loss of health due to mental warrious resulting from loss of wages.

(7) Problem to consumers : Strikes and lockouts create problem to consumers also. Articles of their requirements are not available in time, and the prices of such articles reach high due to black marketing activities. ..

(8) Loss to the management/employer : When workers stop working, the plant and machinery remain idle. The fixed express are to borne by the employer even when the production stops. This way the employer suffers from great loss.

(9) Bad effect on labour relations: Strikes and lockouts bring bad effects on industrial relations. With the result the workmen and the employer always be in mental tension.

(10) Obstruction to economic growth: Strikes creates many kinds of

violence which obstruct the growth of economy.


Machinery for prevention of disputes in India: The frequency with which the strikes took place and the serious industrial and social dislocation which they cause has underlined the importance of preserving industrial peace. The methods for prevention of industrial disputes include broadly all such measures which directly or indirectly contribute towards improvement of Industrial relations. The prevention methods, therefore cover the entire field of relations between industry and labour which are described below:

(1) Strong Trade Union

(2) Profit Sharing and Co-partnership

(3) Joint Consultation

(4) Inrlustrial Employment Standing Orders

(5) Code of Discipline

(6) Collective Bargaining

(7) Works Committees

(8) Workers Participation in Management

(9) Tripartite Bodies/ Machinery

(10) LabourWelfare Officer

(11 ) Wage Board

1. Strong Trade Union: A strong trade union responsible to the welfare of workers must work to protect and promote the interests of workers and the condition of their employment. It must provide advice and information to management on personnel policies and practices. Unions also impress upon workers the need to exercise restraint in the use of their rights. Unions assist employers in maintaining discipline and in increasing productivity. Unions should act as a link between employers and workers so as to develop mutual understanding and co orporation between the two sides. As a matter of fact a trade union is the most switable and most effective agency to conduct bargaining strong.

2. Profit Sharing and Co-partnership: (a) Profit-Sharing: This method helps for maintenance of good industrial relations. Profit sharing means that the employer gives to the workers a portion of profit of the business, in addition to wages. It is usually based on an agreement between the employer and the workers.

Importance of profit sharing:

(1) The award to labour of a share of profits would create psychological

conditions favourable to the restoration of industrial peace.

(2) Profit sharing is likely to strongthen the common interest of labour and

capital and thereby increase the productive efficiency of the workers.

(3) Profit sharing e"nhances social justice so far as labour, a primary factor

of production, that produces profits, is allowed to share in them.

(4) Protit sharing makes the worker responsible, creates a feeling of identity

with business and settles all disputes peacefully.

Limitations of profit sharing:

(1) Although the purpose of profit sharing is to lay foundation for harmonious industrial relations, they often fail to gain the confidence of the worker since the amount of profits accruing to the workers has not been very

large. The workers suspect honesty and good faith on the part of the employer in distribution of profits.

(2) There is possibility of conflicts since the employees contend that the

increased profits are due to their efforts.

(3) The workers often fear that employers may use the profit-sharing scheme to weaken the trade unions and to make the workers dependent upon them.

(4) Profit sharing may make the workers sluggish and therefore, production instead of being augmented, may actually diminish.

Broadly speaking; until a climate of mutual trust and confidence is created between the two sides, the success of profit sharing schemes in industry so far as industrial peace is concerned, seems doubtful.

(b) Co-partnership:

Co-partnership has come to be a applied to schemes which include a system of profit sharing as well as control in the management. It is necessary that in order to acquire control of business, the workers may other acquire share-capital gaining thereby the rights and responsibility of share-holders or may form a co-partnership committee having a voice in internal management of the business. So far as India is concerned, acquiring of share capital or joining in a co-partnership committee by workers seems difficult because of their law earnings and backward in education. Therefore, in the context of Indian conditions, it is proper to lay emphasis on workers participation in management.

(3) Joint consultation:

The industrial democracy necessitates joint consultation in industry between employer~ and workers to eliminate most of the problems faced by them. Joint consultation involves a regular and continuous relationship between workers and management, and therefore, pre-supposes the willing acceptance by management of the participation of workers representatives in discussing Common problems of interest to the enterprise. While full joint consultation can be expected only after the establishment of a collective bargaining relationship, mutual consultation at the plant level often helps to bring the parties together and to train them in the discussion of common problems. Thus, there is tremendous scope of reducing industrial tension and improving productivity through joint consultation in industry.

The system of joint consultation in India could not develop adequently before independence mainly because of the illiteracy, migratory character and lack of proper organisation of workers. After 1947, with the initiation of Five Year Plans greater emphasis was laid on more production and workers interests began to attract greater attention. The Industrial Disputes Act, 1947 provided for establishment of 'works committees' at the plant level. Now the consultative machinery in this country exists almost at every levels i.e. undertaking, industry, State and National levels. At the undertaking level, there are Joint Committees or Joint Councils. At the industry level, there are Wage Boards and Industrial Committees to deal with specific problems of workers that arose from time to time in particular industries. At the State Level, the Labour Advisory Board functions, and at the national level there are Indian Labour Committee, etc.

The functions of Joint Consultative Machinery in India have been the prevention of disputes, reduction in mutual differences and friction, and creation of a proper work climate in industry.

4. Industrial Employment Standing Orders: This is another constructive step towards the prevention of industrial disputes which determine the terms and conditions of industrial employment. Every worker should have the knowledge about the terms and conditions in which he has been employed. He is also expected to know the rules of discipline that is supposed to be followed by him. This problem is solved by 'Standing Orders' in which terms and conditions for employers and employees are prescribed. The provision for 'Standing orders was for the first time, made in the Bombay Industrial Disputes Act, 1938. Thereafter, in order to define the condition of employment and to make them known to the workmen, the Government enacted the Industrial Employment (Standing Orders) Act, 1946. This Act applies to every industrial establishment wherein 100 or more workers are employed or were employed on any day of the preceding 12 months.

5. Code of Discipline: The Indian Labour Conference at its 15th Session in 1957 evolved a 'Code of Industrial Discipline'. The Code voluntarily binds the employers and workers to settle all grievances and disputes by mutual negotiations, conciliation and voluntary arbitration. The main features of this Code include the following.

(1) Both, employers and employees should recognise the rights and

responsibilities of each other.

(2) Neither party will have recourse to coercion, intimidation, litigation and

victimisation, but will settle all disputes through the existing machinery

for the settlement of industrial disputes.

(3) A mutually agreed procedure will be set up and both the parties will

abide by it without taking arbitrary action.

6. Collective Bargaining: It is a form of joint consultation, and a process in which the representative of the employer and of the employees meet and attempt to negotiate a contract governing the employer-employees union relationship. It involves discussion and negotiation between the two groups as to the terms and conditions of employment. The main object of collective bargaining is to protect the interests of workers through collective action and by preventing unilateral action on the part of the employer. It promotes industrial democracy.

7. Works committees: Works committees are the most suitable agency for prevention of industrial disputes. In most of the countries like India, works committees are required to the established through legislation.

According to Sec. 3 of the Industrial Disputes Act 1947, in the case of an industrial establishment in which 100 or more workmen are employed or have been

employed on any day in the preceding 12 months, the appropriate Government may, by general or special order require the employer to constitute a Works Committee consisting of representatives of employers and worker engaged in the establishment, the number of representatives of workmen not being less than that of the employers representatives, to be chosen in consultation with their trade union, if any.

The duties of the Works Committee are to promote measures for securing and preserving amity and good relations between the employer and workmen and to comment upon matters of their interest, and to endeavor to compose any material difference of opinion in respect of such matters.

8. Workers participation in management: These councils aim at enabling the workers to participate in management, help them to understand the problems and difficulties of the industry concerned and bring about better relationship between the management and labour.

9. Tripartite Bodies/Machinery: Several tripartite bodies have been constituted at Central and State levels. The Indian Labour Conference, Standing Labour Committees, Wage Bounds and Industrial Committees operate at the Centre. At the State Level, State Labour Advisory Bounds have been set up. All these bodies play important role in reaching at agreements on various labour matters. The recommendations of these bodies are advisory in nature but carry a great weight on employers, trade unions and the Government. All these bodies constitute the consultative machinery for the private sector.
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