[Guest Post] Powers of Appropriate Government vis-a-vis Industrial Disputes

The post has been contributed by Mr.Rakesh Rastogi. He has about 35 years of experience in the legal field as legal consultant and visiting faculty in various law institutes. He is also empanelled as an arbitrator with ICA & ICADR and an accredited member of The Mediation and Conciliation Network. Presently, he is a visiting faculty at Mewar University and CCS University, Meerut.

  1. Introduction

The adjudication of industrial disputes in India is governed by The  Industrial Disputes Act 1947(IDA). The system of adjudication of disputes, as envisaged under this Act, was adopted as the country was in the nascent stage of industrialization and could not afford the loss of production caused by industrial strife. The purpose of this write up is to examine the efficacy of this system in the present day context. The IDA has set up several authorities for investigation and settlement of industrial disputes like:-

  • Conciliation Officer
  • Board of Conciliation
  • Court of Inquiry
  • Labour Court
  • Industrial Tribunal
  • National Tribunal

The authorities mentioned at (b) to (f) above have been referred to as “Tribunal”.

  1. Power of appropriate Government under Section 10

The appropriate Government ( A.G. for short) has been empowered under  Section 10 of the IDA to refern industrial dispute for conciliation/inquiry or adjudication, by an order in writing, whenever the A.G. is of opinion that an industrial dispute exists or is apprehended. However, in the following situations, the  A.G. is duty bound to make an order of reference:-

  • When the parties make a  joint application to the A.G. for reference to their dispute and the A.G. has satisfied itself that the persons applying to represent the majority of each party.
  • When a public utility concern is involved and a notice of strike u/s 22 has been given and the A.G. has satisfied itself that the notice was not frivolous or vexatious and it would not be inexpedient to make a reference.

The Act lays emphasis that the employer and workmen should be provided an opportunity to settle their disputes/ differences through a mutual settlement. The conciliation Officer brings together the parties when there exists an industrial dispute or the same is apprehended. When the efforts of conciliation officer fail to bring about a settlement and the conciliation officer submits a failure report to the A.G. The A.G refers the industrial dispute for adjudication upon the receipt of failure report. In case the A.G. decides not to refer the industrial dispute after receiving a failure report, then it has to give reasons. It is settled that even after once refusing to make reference, the A.G. can refer the industrial dispute for adjudication, even without informing the opposite party.

The nature of the power of A.G. to refer an industrial dispute for adjudication has been explained by S.C. in the case of State of Madras vs C.P.Sarathy ( AIR 1953 SC 53)  as under:-

“……………… in making a reference under Section 10(1) the Government is doing an administrative act and the fact that it has to form an opinion as to the factual existence of an industrial dispute as a preliminary step to the discharge of its function does not make it any the less administrative in character. The Court cannot, therefore, canvass the order of reference closely to see if there was any material before the Government to support its conclusion as if it was a judicial or quasi-judicial determination. No doubt, it will be open to a party seeking to impugn the resulting award to show that what was referred by the Government was not an industrial dispute within the meaning of the Act, and that, therefore, the Tribunal had no jurisdiction to make the award. But, if the dispute was an industrial dispute as defined in the Act, its factual existence and the expediency of making a reference in the circumstances of a particular case are matters entirely for the Government to decide upon, and it will not be competent for the Court to hold the reference bad and quash the proceedings for want of jurisdiction merely because there was, in its opinion, no material before the Government on which it could have come to an affirmative conclusion on those matters.”

Consequential Powers after the reference

On making the order of reference, the A.G. gets some consequential powers:-

  • The A.G. can make an order to prohibit the continuance of any strike/lock-out in connection with such dispute.
  • A.G. is empowered to include other establishments in the order of reference where it is of opinion that the dispute may affect the other establishments of a similar nature notwithstanding that no dispute exists or apprehended w.r.t. those establishments. This inclusion can be done either at the time of making reference or at any time thereafter but before the submission of the award.
  • The A.G. can mention the points of dispute for adjudication in the order of reference. This can be done by a subsequent order also. The adjudication is confined to those points and the matters incidental thereto. (This is so because the Tribunal , adjudicatory authority is a creature of statute and it derives its jurisdiction from the order of reference alone and therefore it is expected to adjudicate only the points referred to it and any incidental matter.) However, in case the points of dispute are not specified in the order of reference then the adjudicating Tribunal has to cull them out from the pleading of the parties.
  • The A.G. is duty bound to specify in the order of reference, the period within which the Tribunal has to submit its award on the dispute referred to it. In case the order of reference pertains to an industrial dispute relating to an individual workman then the time period specified in the order of reference cannot exceed three months.

However, this time period can be extended at the joint request of the parties and with the concurrence of the Tribunal. Further, the proceedings before the Tribunal shall not lapse merely on the ground that the period specified for disposal of the dispute has expired without the proceedings being completed.

Limitations of powers of appropriate Government

The A.G.while deciding to make a reference cannot determine the jurisdictional facts like:-

  • Whether or not the establishment is an industry within the meaning of S.2(j) of the Act.
  • Whether or not the dispute raised is an industrial dispute as defined in S.2(k) of the Act
  • Whether or not the person involved in the dispute is a workman as defined in S.2(s) of the Act.

The A.G. while making a reference has only to see that an industrial dispute either exists or is apprehended and it has not to determine any of the above jurisdictional facts. Since A.G., while making an order of reference is performing an administrative function, therefore, it is not necessary that employer is notified by A.G before it makes an order of reference. After making a reference under Section 10(1) of the Act, the jurisdiction and control over the dispute vests in the Tribunal and the appropriate Government stands outside the reference proceedings whereas after making an order under Section 12(5) of the Act refusing to refer the matter to the Tribunal, the Government does not get divested of its power to reconsider the matter. It does not get functus officio and there is no bar to its reconsidering the matter and in coming to a finding that reference be made to the Tribunal.

  1. Power of appropriate Government under Section 10A

Section 10 A of the  Act provides for alternative dispute resolution. This section allows the employer and the workmen to enter into an arbitration agreement to refer their dispute to an arbitrator(s) of their choice. This can be done when an industrial dispute either exists or is apprehended but this must be done before the dispute has been referred for adjudication by AG under Section 10.

This arbitration agreement has to be recorded in the prescribed form and a copy of the same has to be forwarded to the AG and the conciliation officer.  The A.G. is duty bound to get this arbitration agreement published in the official gazette within one month of its receipt. The arbitration award has to be submitted to the A.G.

Consequential Powers after the reference

Consequential powers of A.G once a dispute is referred for adjudication before the arbitrators.:-

  • The A.G., within 30 days from the date of the receipt of the award, when satisfied that the persons making the reference represent the majority of each party, can issue a notification in the prescribed form. Once such a notification is issued then the employers and workmen who are not parties to the dispute but are concerned with it shall be allowed by the Arbitrator to present their case.
  • After issuing notification, as referred to above, the A.G. can make an order to prohibit the continuance of any strike or lockout that may be in existence on the date of reference.
  • The experience has shown that more often than not, A.G. takes a lot of time in making the reference. It has made references even after several years and the same has been upheld because the legislative mandate is that A.G. may refer the dispute “at any time” after forming an opinion that an industrial dispute exists or apprehended.
  1. Need for Overhaul

The government’s intervention for adjudication of the industrial dispute could be justified in 1947. After 70 years , the system needs to be reviewed on the following grounds:-

  • The system is time-consuming and industrial peace remains elusive during the interregnum.
  • The employers are more enlightened and do not want to litigate unnecessarily.
  • The jurisdictional facts, at any rate, cannot be adjudicated by the A.G.
  • The individual workmen have been allowed to approach the Tribunal directly in the matter of their   dismissal/discharge/retrenchment/termination.

Therefore it is submitted that the existing system is not serving much purpose in the changed industrial atmosphere and the employer and employees can be permitted to approach directly to the Tribunal after passing through conciliation officer for 45 days.

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L&P Editorial Team

The Law & Practice Blog's editorial team.

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