Methods of Settlement of Industrial Dispute under Labor Law

Industrial disputes may be said to be disagreement or controversy ...Methods of settlement of Industrial Dispute has been enacted in the Industrial Dispute Act.
Industrial disputes may be said to be disagreement or controversy ...Methods of settlement of Industrial Dispute has been enacted in the Industrial Dispute Act.
Methods for Dispute Resolution
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Industrial disputes may be said to be disagreement or controversy between management and labor with respect to wages, working conditions, other employment matters or union recognition. Methods of settlement of Industrial Dispute has been enacted in the Industrial Dispute Act.

Methods of Settlement of Industrial Dispute :

There are two ways in which the basic parties to an industrial dispute the employer and the employees- can settle their disputes.

Methods of Settlement of Industrial Dispute

Collective Bargaining

Collective bargaining implies the following main steps:

  • Presentation in a collective manner, to the employer, their demands and grievances by the employees;
  • Discussions and negotiations on the basis of mutual give and take for settling the grievances and fulfilling the demands;
  • Signing of a formal agreement or an informal understanding when negotiations result in mutual satisfaction; and
  • In the event of failure of negotiations, a likely resort to strike or lock-out to force the recalcitrant party to come to terms.
    • When collective negotiations reach a deadlock, the parties themselves may call in third persons to help them settle their disputes.
    • The role of this third person is to break the deadlock, to interpret the view point of one to the other, and thereby to help the parties arrive at an agreement.
    • The solution, if any comes out of the parties themselves; the presence of the outsider neither supersedes the process of collective bargaining nor the freedom of the parties to agree or to disagree.
    • Bargaining with the help of the third party is generally called conciliation or mediation.
    • Strikes and lock-outs are an integral part of the process of collective bargaining.
    • If the threat of a strike were not there, mutual negotiations would rarely succeed.
    • The solutions arrived at in the process of collective bargaining are ultimately evolved by the parties themselves and are of lasting value.


Negotiation is one of the principal means of settling labour disputes. However, due to lack of trust between the employers and workmen or their trade unions or inter-rivalry of the trade unions and the employers being in a commanding position, many a time negotiation fail.

Under law, it is obligatory for the employers to make provision for Grievance Settlement Authority for settlement of industrial disputes connected with an individual workman employed in an establishment in which 50 or more worknen are employed or have been employed on any day, In the preceding twelve months.


It is a process by which a 3rd party persuades disputants to come to an equitable adjustment of Claims.The ultimate decision is of the disputants themselves.

Through conciliation and mediation a third party provides assistance with a view to help the parties to reach an agreement:

  • The conciliator brings the rival parties together discuss with them their differences and assist them in finding out solution to their problems.
  • Mediator on the other hand is more actively involved while assisting the parties to find an amicable settlement. Sometimes he submits his own proposals for settlement of their disputes.

Conciliation may be Voluntary or Compulsory :

  • It is voluntary if the parties are free to make use of the same, while it is compulsory when the parties have to participate irrespective of whether they desire to do so or not.
  • Section 4 of the Act provides for appointment for conciliation officers and Section 5 for constitution of Boards of Conciliation. The Board of conciliation is to consist of an independent Chairman with the duty of mediating and members representing the parties.
  • Delays in conciliation are attributed partly to the excessive work-load on officers and partly to the procedural defects.
  • Since conciliation officer has no powers of coercion over labour and management, he can only persuade them to climb down and meet each other.
  • Non-appearance and non- participation of the parties in conciliation proceedings poses a serious hindrance in this direction.
  • The representatives sent by the parties to appear before him are generally officer who do not have the power to take decisions or make commitments; they merely carry the suggestion to the concerned authorities on either side.
  • This dampens the spirit of a Conciliator.
  • Sec 11 of the Act has clothed the Conciliation officers with the power to enter premises occupied by any establishment and also has been invested with the powers of civil court.
  • Under the Civil Procedure Code, 1908 when trying a suit for enforcing the attendance of any person and examining him on oath, compelling the production of documents and material objects and issuing commission for examination of witness for the purpose of inquiry in to any existing or apprehended Industrial Dispute.


Arbitration is a means of settling an award on a conflict issue by reference to a third party.

  • It is a process in which a dispute is submitted to an impartial outsider who makes a decision which is binding on both the parties.
  • Arbitration is a judicial process.
  • Section 10-A of the Act, however, provides only for voluntary reference of dispute to Arbitration.
    • This system, however, has not been widely practiced so far.
    • One of the main reasons for not gaining popularly of this procedure is lack of arbitrators who are able to command respect and confidence of the parties to the dispute.
    • Inter Union rivalry also sometimes makes it difficult in arriving at an agreement.

Factors hampering the adoption of Voluntary arbitration in India:

  1. Easy availability of adjudication in case of failure of negotiations;
  2. Dearth of suitable arbitrators who command the confidence of both parties;
  3. Absence of recognised union which could bind the workers to common agreements;
  4. Legal obstacles;
  5. The fact that in law no appeal was competent against an arbitrator’s award;
  6. Absence of a simplified procedure to be followed in voluntary arbitration.


If despite efforts of the Conciliation officer, no settlement is arrived at between employer and the workman, The Industrial Dispute a provides for a Three Tier system of adjudication viz. Labour Courts, Industrial Tribunals and National Tribunals under Section, 7,7A and under Section 7B respectively.

Labour Courts have been empowered to decide disputes relating to these matters. These matters are concerned with the rights of workers, or otherwise of a strike or lockout.



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