Industrial Dispute Settlement Machineries: An Overview


The Industries are considered as a backbone of any country for its exponential development and growth. An efficient operating industry can generate an enormous amount of production at the same time the Industries which are led by disputes create a complete deadlock in the economy as a whole. There arises a need for a mechanism to settle these disputes efficiently. To curb this lacuna “The Industrial Dispute Act, 1947” was formed. The Preamble of the Act clearly states that the Industrial Dispute Act makes provision for the investigation and settlement of industrial disputes.

Reasons for the Industrial Disputes

The dispute can be the outcome of one or more reasons as laid down below:


There is a resentment among the workman when they are not being paid adequately. Sometimes, the cases are worst when they are not being paid on the due date as it affects their livelihood a lot. They feel demotivated when their effort is not recognized by giving them incentives such as bonus.

Working condition

When employer neglects the unhygienic and poor working condition leading to various health issues of the workman, it creates a sense of disturbance among the workman which lead to creating dispute by putting their demand of healthy working condition in front of management.

Unfavourable terms of condition

When employer put forth conditions such as deduction from the wages at a high rate whenever workman takes a leave, compelling workman to work on double shift without increasing the pay, putting unrealistic targets of production and so on, it creates a difference of opinion between the workman and employer which in turn; lead to dispute, if remain unresolved.

Other causes

Among other causes that lead to a dispute are rivalry among the trade union, failure by an employer to recognize the trade union, fear of retrenchment, political issues and so on.

Significant Terminologies as per Relevant Act


According to section 2(j) of the Act, an industry means any business, trade, undertaking, manufacture or calling of employers including calling, service, employment, handicraft or industrial occupation or avocation of a workman. However, the apex court has widened the definition of “Industry” in the case of Bangalore Water Supply and Sewage Board v. Rajappa”[1]. It laid down the test, which is essential in determining whether an activity can be defined as an industry or not. These are :

  1. An activity undertaken by an employer and employee for the production and distribution of goods or services for the satisfaction of human wants will be termed as “industry”.
  2. The absence of profit intention by the entity, whether it is public or private or any other sector is irrelevant for determining the status whether an entity falls under the definition of ‘’Industry’’ or not.
  3. The real test is functional, and the decisive aspect is the nature of the activity, with special emphasis on the employer-employee relationship.
  4. If the organization engages in activity in the nature of trade or business, this will not let this organization outside the purview of “Industry”.

Industrial Dispute

According to section 2(k) of the Act, an industrial dispute means a dispute between employer and employer or employer and workman or workman and workman on matters related to the employment, non-employment, terms and condition of the work, condition of labour of any person. In a very prominent case of “Workmen of Dimakuchi Tea Estate v. The Management of Dimakuchi Tea Estate”[2], it was held that the term ‘’any person’’ was interpreted to mean a person in whose employment, non-employment or terms of employment or condition of labour and in whose work they have a community of interest.


As per Section 2(g) of the Act, an employer can be defined as :

  1. Concerning any industry which is owned by the State Government or Central Government then such person who is duly appointed by the respective government will be regarded as an employer. In the case of other industries, department of the head will be considered an employer.
  2. In the case of industry belonging to the local authority, then the Chief Executive Officer of that authority will be regarded as an employer.


As per Section 2(s) of the Act states that any person (including an apprentice) employed in any industry to do any work related to –skilled or unskilled, manual, supervisory, technical, clerical or operational, for hire or reward, whether the terms of employment condition are expressed or implied. However, it does not include any such person :

  1. Who is employed under the Army Act, Airforce Act, Navy Act?
  2. Who is employed in the police service or as an officer or employee in prison?
  3. Who is employed in a supervisory position and drawing a salary of more than Rs 10,000/-?

Settlement Machinery Under the Industrial Dispute Act

These dispute mechanism can be divided into four types which are –

  1. Conciliation
  2. Voluntary Arbitration
  3. Court of Inquiry
  4. Adjudicating Authority


Conciliation Proceeding means any proceeding held by the conciliation officer or board duly appointed by Appropriate Government through gazette notification under this Act. The sole purpose of the proceeding is to settle the dispute in an amicable manner instead of going for strike and lockout. The conciliation officer may hold conciliation proceeding where an industrial dispute exists or is apprehended.Settlement in the course of conciliation proceeding is binding on all parties to the dispute. All parties summoned to appear, the heirs, successors and assign of employers and person employed in the establishment as well as who are subsequently employed.

Voluntary Arbitration

In order to opt for this mechanism, the two conditions need to be fulfilled. They are :

  1. Any industrial dispute should exist or apprehended and
  2. The employer and the workmen agree to refer the dispute to arbitration.

The reference to arbitration under Section 10A is the result of a written agreement between parties to refer the dispute to arbitration. The following pre-requisites are to be met –

  1. There must be an existing or apprehended industrial dispute.
  2. There is an agreement in writing to settle the dispute by way of arbitration.
  3. Mode of arbitration should be opted before giving reference to the adjudicating authority.
  4. In case of dispute, a copy of arbitration should be provided to the “appropriate government” Appropriate Government on being satisfied that apply to an agreement represents the majority of each party, issues a notification in the official gazette. Such notification gives an opportunity of being heard to all those employer and workman who are though not parties to the agreement but are concerned in the dispute. 

Courts of Inquiry

The appropriate government may by official notification constitute ‘’Courts of Inquiry’’ for carrying out the necessary inquiry in respect of matters related to the industrial dispute. Duty of Court of inquiry is not limited to only inquiry of matters referred to them but also other matters which it comes across during the proceeding that are connected to the dispute. They are required to submit the report within six months from the commencement of the inquiry. The report then is published within 30 days of receipt of it by the appropriate comment.

Adjudicating Authority

There are three adjudicating authorities responsible for bringing settlement of an industrial dispute.

  • Labour court

They are responsible for adjudicating the industrial dispute matters referred to in Schedule II of the Act

  • Industrial tribunal

They are responsible for adjudicating to the matters related to Schedule II and Schedule III of the Act

  • National Tribunal

They are responsible for adjudicating the matters of national importance or are of such a nature that industry establishment located in more than one state are likely to be affected or are concerned with it.

Measures Involved

Following measures can be taken to reduce the rising graph of industrial dispute substantially-

  1. Each industry should establish the redressal committee represented by an equal number of members on behalf of employer and workman.
  2. There should be a fair selection of trade union who are interested in the welfare of workman and industry upliftment.
  3. Strike and lockout should be opted as a last resort. Instead, the employer should promote collective bargaining.
  4. There should be a monthly meeting of employer and workman on a face to face level where both the parties can raise their concerns.
  5. The employer should perceive such actions which allow the workmen to be part of those decisions where they are concerned at a higher level.


In times of pandemic such as COVID-19, where a gamut of the industry is battling with the losses, it is the working class who are suffering at the deepest level. It becomes imperative for industries to come forward and extend the helping hand to their workman because ultimately, it is the workman who helps the employer to generate profit from the industry. On the other hand it is the responsibility of trade union and workmen to consider the interest of industry in which they are being employed. When both the party collaborate and work for each other, no space for dispute is left out.


Edison Anthony Raj, Arul. (2014). A Study on Industrial Disputes and its Effects: Exceptional Reference to Indian Industries. 1. 1 – 8.

Questions Addressed by this Article

  1. What is meant by Industrial Dispute?
  2. What are the consequences of such a dispute?
  3. What are the legal provisions applicable?
  4. What are the settlement machinery available under Industrial Dispute Act?
  5. What are the preventive measures that can be taken to avoid the dispute?

[1] 1978 AIR 548, 1978 SCR (3) 207

[2] AIR 1958 SC 353, (1958) ILLJ 500 SC, 1958 1 SCR 1156

2 Replies to “Industrial Dispute Settlement Machineries: An Overview”

  1. I really appreciate the detailed information about the law. And I completely agree with you on the point where you have mentioned that industries should come forward and help the workers as “it is the workman who helps the employer to generate profit from the industry. ” I have interacted with people who are still working hard but getting lesser pay as the employers are only concerned about their profit.

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