Voluntary machinery for settlement of industrial disputes is based on Code of Discipline announced in 1958. The code was approved by all central organisations of workers and employers in 16th Indian Labour Conference at the initiative of the then Labour Minister, Shri G.L. Nanda.
1) Code of Discipline, 1958
The code reflects the policy of the government to build up an industrial democracy on voluntary basis and is the sheet anchor of Mahatma Gandhi’s philosophy of industrial relations. It aims at preserving industrial peace with the help of employers and employees. It represents a voluntary moral commitment and is not a legal document. The code, which aims at providing an alternative to conflict for the resolution of disputes, worked very well for some time after its adoption.
The issue of discipline e in industry was discussed in the Indian Labour Conference and the code of discipline was framed and introduced by that tripartite body in 1958. Discipline in the relationship between workers and employers can better be enforced if both the parties accept their responsibilities and show a willingness to discharge them.
In the absence of any statutory provision at the all-India level for the recognition of trade union, the provision in this regard has been incorporated in the Code of Discipline.
The main elements of the code are: The two parties agree to utilise the existing machinery for the settlement of industrial disputes.
The parties shall not resort to strikes and lock-outs without first exploring all avenues of settlement
The parties accept that the disputes not settled mutually shall be referred to voluntary arbitration.
The code specifies the criteria for the recognition of trade union and creates an obligation on employers to recognise the majority union in an establishment or industry.
The two parties shall not resort to the unfair labour practices detailed out in the code.
Managements and trade unions agree to establish grievance procedure on a mutually agreed basis.
Initially by the end of March, 1962, the code was accepted voluntarily by about 900 independent employers and trade unions. The number increased to around 3000 by the end of 1967. Over the years, however, the willingness and enthusiasm of the parties to observe the code has declined, and they have developed an attitude of indifference to the code. It has proved to be difficult for them to abide by self-imposed discipline in terms of obligations backed only by moral sanctions. Industrial Truce Resolution, 1962. With the Chinese attack in October 1962, an emergency was declared in the country, and it was realised that production should not be jeopardised in any way. Employers’ and workers’ representatives, in a joint meeting of their organisations held on November 3, 1962 at New Delhi, passed a resolution, saying that the emerging method of dispute resolution which is speedy, less costly and which ends in win-win situation.
2) Code of Conduct
The other code adopted in May 1958 was the code of conduct. The representatives of the four central trade union organisations - the INTUC, AITUC, HMS and UTUC –agreed to observe certain principles with a view to maintaining harmonious interunion relations. Inter-union and intra-union rivalries emerge out of certain weakness of Indian trade unions such as fragmentation and multiplicity. The code was formulated to curb these evils. But it has remained mainly on paper, for trade unions seem to have forgotten that it exists.
3) Tripartite Bodies
The other tripartite bodies which came into existence were:
Indian Labour Conference,
Standing Labour Committee,
Industrial Committees, and
Tripartite Committee on International Labour Organisation Conventions, 1954.
Workers participation in Management (The Constitution of India, Art 43A)
Wages or Salary (Indian context)
Minimum wage -
Fair wage -
Living wage -
4) Formation of Joint Consultative Machinery for Central Government Employees (JCM), this is also a three-tier machinery.
5) Collective Bargaining was encouraged. The term collective bargaining is made up of two words, ‘collective’ – which means a ‘group action’ through representation and ‘bargaining’, means ‘negotiating’, which involves proposals and counter-proposals, offers and counter-offers. Thus it means collective negotiations between the employer and the employee, relating to their work situations. The success of these negotiations depends upon mutual understanding and give and take principles between the employers and employees.
6) Workers’ Participation in Management Scheme
Workers’ participation in management is an essential ingredient of Industrial democracy. The concept of workers’ participation in management is based on Human Relations approach to Management which brought about a new set of values to labour and management. Traditionally the concept of Workers’ Participation in Management (WPM) refers to participation of non-managerial employees in the decision-making process of the organization.
Workers’ participation in management was introduced through Formation of Shop Councils and Plant Council.
Mediation and Litigation
Mediation is very much a part of Indian culture. Litigation, on the other hand, was introduced by the colonial masters as a top down model. It is alien to Indian culture and never got imbibed into the Indian culture. Respectable and elderly people acting as mediators or functioning as Panchayat members is integral to Indian culture. In the past it was these respectable and elderly people who used to help in resolving disputes through mediation or mediation-cum-arbitration in Panchayats. Even now mediation as a method of dispute resolution is quite common in India. Mediation is an informal process where the mediator, who is a neutral third party, assists the disputing parties in the pursuit organization finding a solution to their dispute. What happens in Lok Adalats is only mediation in a formal way. When mediation is done in a formal way it is called conciliation.
Limitations of Litigation
There are many limitations associated with litigation. Litigation involves lot of delay. It is expensive. In India, the adversary method of dispute resolution is used in litigation. The adversary method is one which gives the parties and their lawyers a great deal of control over the way in which the facts are collected and presented. Each party will present the evidence to the Court in a way most favourable to its own version of the facts and adverse to that of the other party. The role of the judge is limited to that of an umpire, ensuring that the evidence is presented in accordance with certain ground rules. The adversary method of dispute resolution promotes game theory of dispute resolution. Persons with good resources are likely to win the game. Winning the game in an adversary system does not necessarily mean justice is done or there is peaceful solution to the dispute is found. It only means that the dispute is resolved. This is not a good way of resolving disputes in situations such as family relations or industrial relations where no effort shall be spared to achieve maximum production, and management and workers will strive to collaborate in all possible ways to promote the defence efforts of the country.
As a result of the acceptance of this Resolution, there was a sharp decline in the number of disputes and in the number of mandays lost. Workers not only worked for extra hours but also contributed to the National Defence Fund. Emergency Production Committees were set-up, both at the Centre and in the states to improve production and productivity. But the Resolution lost its importance when prices rose sharply and disputes erupted once again.
Advantages of Mediation
In view of the limitations of the adversary method of dispute resolution in areas where human emotions are also involved, the advantages of mediation as a method of dispute resolution have been seriously considered. Mediation as a method of dispute resolution has many advantages in situations where human emotions are involved. Unlike a court which gives a judgment with respect to the particular claim or charge before it, mediators assist the disputants to explore their differences and to develop a mutually acceptable formula for future co-existence. Moreover mediation is cheap and quick in resolution of disputes. For mediation has to be successful, the mediator needs to normalise the strained relations between the disputing parties. In order to achieve this, a mediator must to be a good counselor who can comprehend the emotional issues associated with the problem. In the process of helping the parties give vent to their emotions, all the minor differences which culminated in the dispute are also addressed. Once the emotional and ego-related aspects associated with the dispute are soothed, the disputing parties are able to negotiate in a reasonable way. Once they are reasonable in negotiating, it becomes easy to find solution to their problems.
Mediation addresses the interests and not the positions taken by the disputing parties. It is easy to address the interests and once that is done, it ends up in a win-win situation. There are many ways of addressing interests. In a mediation there can be one or more mediators. The role of mediator includes facilitating communication between the parties, assisting in identifying interests and generating options for settlement.