Statutory Machinery

Traditionally, labour laws had a protective function consisting of established standards both to protect workers in their workplace and to provide them a basic minimum level of living conditions. Because of changing industrial and economic scenario, along with statutory machineries, voluntary machineries come into existence. Hence, regulatory mechanisms for prevention and settlement of industrial disputes comprises of statutory and voluntary machinery. In this unit, we will be discussing on these machineries and also concept of lok adalats.


The Industrial disputes Act, 1947 provides the mechanics of dispute- resolution and set-up the necessary structure so as to create congenial climate.

What is an ‘Industrial Dispute’?

An ‘Industrial dispute’ means any dispute or difference between employers and employers, or between employers and workmen, or between workmen and workmen, which is connected with the terms and conditions of employment of any person.

Who can raise a Dispute?

A dispute is said to have arisen when some demand is made by workmen and it is rejected by the management or vice versa and the demand is relating to the employment. A workman can raise a dispute. However, it is pertinent to note that a dispute between an employer and single workman does not fall within the definition of industrial dispute, but if the workmen as a body or a considerable section of them make a common cause with the individual workman then such a dispute would be an industrial dispute.

However, certain individual disputes relating to dismissal, discharge, retrenchment or termination of services of a workman, are also covered. The Act implies even to industrial establishments employing a single workman. But dispute in relation to a person who is not a ‘workman’ within the meaning of the Act is not an industrial dispute under Section 2(k).

The Industrial Disputes Act, 1947 provide for creation of different authorities to preserve industrial harmony, prevention and settlement of industrial disputes. These are as follows:

1) Works Committee

In establishments where hundred or more workers are employed:

a) The appropriate government may require the employer to set-up works committee.

b) It is composed of equal number of representatives of workmen and management who are chosen with consultation of the trade union.

c) Its functions are to preserve amity and establish cordial relations and to resolve differences of opinion on matters of common interest.

2) Conciliation Officer

a) The conciliation officer may be appointed by the government for specified area or specified industries.

b) Duty of conciliation officer is to mediate in and promote the settlement of industrial disputes. Where industrial dispute exists or is apprehended and relates to public utility, conciliation officer shall hold conciliation proceedings and it is mandatory. In such cases conciliation officer will investigate the dispute and induce the parties to come to amicable settlement. However, he cannot take the decision, he has to send report of settlement to his government. If no settlement is reached then also he has to report to the government giving reasons on account of which settlement could not be reached. Conciliation officer to normally submit report within 14 days of commencement of conciliation proceedings. Duty of the conciliation officer is administrative and not judicial in nature.

If an agreement is reached by the parties, it is binding on both the parties.

3) Board of Conciliation

The government may notify constitution of board of conciliation for promoting settlement of an industrial dispute. Its role is also consultative, like conciliation officer.

4) Court of Enquiry

The government may constitute a court of enquiry to enquire into any matter connected with an industrial dispute. In the case of board of conciliation the object is to promote settlement of an industrial dispute. But in the case of a court of enquiry object is to enquire into and reveal the causes of an industrial dispute.

5) Voluntary Arbitration

It is voluntary method of resolving individual disputes if dispute is not settled by negotiating parties. Here both parties are willing to go to an arbitrator of their choice and submit to his decision. Arbitrators are named by the parties in the written agreement.

The number of arbitrators can be one or even more than one. Legal sanctity to this mode of settlement of industrial disputes was given in1956 when Section lOA was introduced in Industrial Dispute Act.

6) Adjudication

The Industrial Disputes Act provides for three-tier system of adjudication of industrial disputes. The cases either may be referred by government to court after the receipt of failure report from conciliation officer or directly by any party. Labour courts and industrial tribunal may be constituted by the state government while national tribunal is constituted by the central government.

i) Labour Courts: Functions of labour courts are relating to matters as under:

1) Legality of an order passed by an employer under the standing order,

2) Application and interpretation of standing orders,

3) Discharge or dismissal of workman,

4) Withdrawal of any customary concession or privilege,

5) Illegality or otherwise of a strike or lock-out, and

6) All matters (not specified for industrial court).

ii) Industrial Tribunals: The functions of industrial tribunals are as follows:

1) All matters within jurisdiction of labour courts,

2) Wages,

3) Compensatory and other allowances,

4) Hours of work and rest intervals,

5) Leave with wages and holidays,

6) Bonus, Provident Fund and Gratuity,

7) Shift Working,

8) Classification of grades,

9) Rules of Disciplines, and

10) Retrenchment and closure of establishment.

iii) National Tribunal: The national tribunal shall be constituted by the Central government (only) when undertakings in more than one stage is affected by such industrial dispute and is of ‘national importance’ and matters relate to functioning of labour and industrial courts.

7) Grievance Settlement Authority

It is to be set-up enterprises where 50 or more workers are employed. This for settling of individual grievances of employees. Individual disputes are to be referred to the courts when not settled at grievances authority level.

8) Welfare Officer

Another preventive measure is under the Factories Act, 1948, i.e., the appointment of welfare officer in the organisation if workers are 500 or more.

9) Standing Orders

Another preventive measure is certification of standing orders by enterprises under the Industrial Employment Standing Orders Act, 1946. These standing orders require enterprises to lay down uniform terms and conditions of employment of workers.

10) Central and State Industrial Relations Machinery

Central Industrial Relations Machinery consists of the Chief Labour Commissioner and Regional Labour Commissioner together with Labour Enforcement Officers. The machinery has regional Offices. Their main functions are:

i) prevention, investigation and settlement of industrial disputes in industries, or enforcement of labour laws and awards,

ii) verification of union membership,

iii) fixation of minimum wages, etc., and

iv) central implementation and evaluation machinery ensures implementation of code of discipline, labour laws, awards and settlements, take preventive action by settling disputes, evaluates major strikes and lock-outs, evaluates labour laws and policy decision and suggests measures to improve them.

11) Other Preventive Measures

Some other provisions laid down in Industrial disputes Act, 1947 which discourage disputes are as under:

a) According to Sec. 9 A of Industrial Disputes Act, an employer cannot make any change in conditions of service without giving to the workers a 21-days’ notice and follow the prescribed procedure for changing them.

b) Defining of unfair labour practices on part of employees/unions and employers which have deterrent affect as penalties are provided under [Section 2(ra)] of lndustrial Disputes Act, 1947.

c) Provisions of laws relating to lay-off, retrenchment and closure and also regarding lock -out and strikes which imposes restrictions on the employers and employees.