Industrial Disputes - Causes of Industrial Disputes

Thus form the legal point of view, industrial dispute does not merely refer to difference between labour and capital as is generally thought, but it refers to differences that affect groups of workmen and employers engaged in an industry. Essentially, therefore, the differences of opinions between employers and workmen in regard to employment, non-employment, terms of employment or the conditions of labour where the contesting parties are directly and substantially interested in maintaining their respective contentious constitute the subject-matter of an industrial dispute.

The HR Employee Relations Manager directs the organization's employee relations function. They develop employee relations policies and ensure consistent application of company policies and procedures. In addition, they are responsible for employee dispute resolution procedures, performing internal audits, and taking appropriate action to correct any employee relations issues.

Causes of Industrial Disputes

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. (The Industrial Disputes Act, 1947 governs rules for the settlement of disputes between the management of industrial establishments and workmen.)

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:

[Forced lay-off of employees by a firm, usually to cut down its payroll.] 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.

Facts [+]

There are four distinct generations working side-by-side in the workplace: traditionalist (1922-1945), baby boomer (1946-1964), generation x (1965-1980), and generation y (1981-2000). Research shows that people communicate based on their generational backgrounds. Understanding each generation may help reduce confrontations and misunderstandings, resulting in happier, more productive workers.

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% and11.2% respectively. A similar trend was observed in 2004 where indiscipline accounted for 40.4% of disputes.


Maruti's Manesar plant GM(HR) burned to death, 91 workers arrested

18-july-2012, India: leading car manufacturer Maruthi Suzuki, India, Maneser (Haryana), workers created violence by burning company's general manager human resource (Awanish Kumar Dev) to death, burnt down office furniture, several executives, managers, supervisors were attacked by them and the Japanese manager of the factory was also attacked. 91 workers were arrested for this brutal act done by them and they also caused damage to the company property.

The sequence of events began in the morning with a worker beating up a supervisor on the shop floor. Workers union alleges that this incident was caused due to the supervisor made objectionable remark against a permanent worker, who belongs to the Scheduled Caste category. When we opposed it, they misbehaved with us and suspended the worker that led to violence. But the management alleges that the workers' union prevented the management from taking disciplinary action against the worker. Finally management declared to temporary close down the car Manufacturing plant produces about 1600 units per day. In terms of value the per day loss is about Rs. 70 crores. Cars waiting for delivery to its customers were more than one lakh units that may take more than five months to begin delivery due to lockout.As company manufactures market demanded key models Swift hatchback and Dzire sedan faces a huge backlog. Maruthi Suzuki competitors like Ford, Skoda and Hyundai get benefited in the market as many people shift to other brands in the view of long waiting period for delivery of cars from Maruthi Suzuki.

Payment of Bonus:

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:

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 hours.


The miscellaneous factors include

  • Inter/Intra Union Rivalry

  • Charter of Demands

  • Work Load

  • Standing orders/rules/service conditions/safety measures

  • Non-implementation of agreements and awards etc.