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Sunday, November 23, 2014

Industrial Dispute Act. - Introduction, Objectives

Meaning of Industry and Industrial disputes
Industry: “Industry” means any business, trade, undertaking, manufacture or calling of employers and includes any calling, service, employment, handicraft, or industrial occupation or avocation of workmen; the term ‘industry’ does not include:
(i) Agricultural operations (ii) Hospitals / dispensaries (iii) Educational, scientific, research or training institutions (iv) Organisations engaged in charitable, social or philanthropic work (v) Khadi/Village industries (vi) Any activity of Government relatable to sovereign functions of Govt. (vii) Domestic service (viii) Any professional activity, provided the number of persons employed is less than ten.

Industrial Dispute: An industrial dispute may be defined as a conflict or difference of opinion between management and workers on the terms of employment. It is a disagreement between an employer and employees' representative; usually a trade union, over pay and other working conditions and can result in industrial actions. When an industrial dispute occurs, both the parties, that is the management and the workmen, try to pressurize each other. The management may resort to lockouts while the workers may resort to strikes, picketing or gheraos.

As per Section 2(k) of Industrial Disputes Act, 1947, an industrial dispute in defined as any dispute or difference between employers and employers, or between employers and workmen, or between workmen and which is connected with the employment or non-employment or the terms of employment or with the conditions of labor, of any person.

Causes of Industrial Disputes
1. Low income: As prices and living expenses are rising in India, employees also expect their income to rise. Unfortunately, that rarely happens. To make things worse, there is only one earning member in the household and this person alone supports everyone financially. Many times, the income is not enough to keep everyone content and pay all the bills. Thus, if the earning member loses his/her job, the entire family suffers in poverty. Low wages cause discontent in employees.
2. Prices in India are rising constantly, hence, it is also expected that the income of industrial labourers increase, but that never happens.
3. Dearness Allowance associated with labourers has no corresponding increase with rising prices.
4. Most industries have unhygienic and unsafe working conditions. This puts pressure on workers' health.
5. Employees find it extremely difficult to get leave with pay.
6. Employees are becoming more and more conscious about self-respect. Tempers flare when they are insulted or instigated by their superiors.
7. Most of the time, extra bonus is not paid, or not paid on time. This causes industrial conflicts.
8. Sometimes, employees are unfairly relieved from their jobs. Nevertheless, their colleagues unite and fight for the rehiring of their relieved colleagues.
9. Sometimes, trade unions are not recognized by industries resulting in strained relations and stress.
10. Replacement of workers by machinery is causing discontent. Workers are getting laid off and replaced by cheaper machines that do the same work.
11. Many industrial disputes are being caused by political parties. Political involvement in trade unions causes divisions and unnecessary tensions.
12. Disputes may also arise due to dishonest mid-level management. This management prevents labourers from contacting senior management, and act as middle-men. Lack of communication causes distrust.

Impact/Effect/Consequences of Industrial Disputes
The consequences of Industrial disputes are many. A brief description is given
1.       Disturb the economic, social and political life of a country: When labour and equipment in the whole or any part of an industry are rendered idle by strike or lockout, national dividend suffers in a way that injures economic welfare.
2.       Loss of Output : Loss of output in an industry which is directly affected by a dispute, but other industries are also affected adversely, as stoppage of work in one industry checks activity in other industries too.
3.       Decline in the demand for goods and services: Strikes reduces the demand for the goods that other industries make, if the industry in which stoppage has occurred is one that furnishes raw materials semi-finished goods or service largely used in the products of other industries.
4.       Lasting loss to the workers: There is a lasting injury to the workers in the form of work being interrupted due to the strikes which involves a loss of time which cannot be replaced. The wages are lost and the workers can least afford to lose them especially when the average earning of a worker is not very high.
5.       Increase in indebtedness: This increases the indebtedness among the workers and not only the old debts become heavier but fresh debts may also be incurred.
6.       Loss of health of family members: The workers and their family members also suffer from loss of health due to mental worries resulting from loss of wages.
7.       Problem to consumers: Strikes and lockouts create problem to consumers also. Articles of their requirements are not available in time, and the prices of such articles reach high due to black marketing activities. ..
8.       Loss to the management/employer: When workers stop working, the plant and machinery remain idle. The fixed express are to borne by the employer even when the production stops. This way the employer suffers from great loss.
9.       Bad effect on labour relations: Strikes and lockouts bring bad effects on industrial relations. With the result the workmen and the employer always are in mental tension.
10.   Obstruction to economic growth: Strikes creates many kinds of violence which obstruct the growth of economy.

Objectives and Features of Industrial Dispute Act:
The Industrial Disputes Act, 1947 was enacted to promote industrial peace by providing appropriate machinery for amicable settlement of disputes arising between employers and employees.
Objectives of the Act:
1.       The Act provides machinery for the settlement of disputes by arbitration or adjudication.
2.       It attempts to ensure social justice and economic progress by fostering industrial harmony.
3.       It enables workers to achieve their demands by means of legitimate weapon of strike and thus facilitates collective bargaining.
4.       It prohibits illegal strikes and lockouts.
5.       It provides relief to the workman in the event of layoff or retrenchment.
6.       The act relates to all the relevant aspects of industrial relations machinery namely—collective bargaining, mediation and conciliation, arbitration, adjudication and matters incidental thereto.
Main Features or Characteristics of the Act:
Some of the important features of the Act may be summearised as below:
1. Any industrial dispute may be referred to an industrial tribunal by mutual consent of parties to dispute or by the State Government, if it deems expedient to do so.
2. An award shall be binding on both the parties to the dispute for the operated period, not exceeding one year;
3. Strike and lockouts are prohibited during: (a) The pendency of conciliation and adjudication proceedings; (b) the pendency of settlements reached in the course of conciliation proceedings, and (c) the pendency of awards of Industrial Tribunal declared binding by the appropriate Government.
4. In public interest or emergency, the appropriate Government has power to declare the transport (other than railways), coal, cotton textiles, food stuffs and iron and steel industries to be public utility services for the purpose of the Act, for a maximum period of six months.
5. In case of lay-off or retrenchment of workmen, the employer is requested to pay compensation to them. This provision stands in the case of transfer or closure of an undertaking.
6. A number of authorities (Works Committees, Conciliation Officers, and Board of conciliation, Courts of Inquiry, Labour Courts, Tribunal and National Tribunal) are provided for settlement of Industrial disputes. Although the nature of powers, functions and duties of these authorities differ from each other, everyone plays important role in ensuring industrial peace.