Is Conciliation in the Resolution of Labour Disputes a waiting room before Adjudication? An Indian Perspective

Abstract

Conflict of interest is a part of human affairs. Industrial conflict is also human conflict and is one of the features of industrial relations. This conflict becomes industrial dispute when it acquires a concrete and a specific manifestation. The industrial dispute has adverse effect on production rate, efficiency of work, labour satisfaction, discipline and economic growth. State is the custodian of good industrial relations and hence through Industrial Disputes Act it has set up comprehensive machinery not only for settlement of industrial disputes but also for its prevention. Conciliation is one of the methods for settlement of industrial disputes in which a third party persuades disputants for an amicable settlement with an equitable adjustment of claims. This research paper makes an attempt to examine the conciliation machinery as a means of resolving industrial dispute and discusses the obstacles in the conciliation process for effective settlement of dispute resolution.

INTRODUCTION

Traditionally, the concept of dispute resolution has been associated with judiciary because disputes have always been resolved in the place of courts. In ancient India panchayat played a crucial role wherein the community elders decided the dispute by making the parties to enter into an agreement. In addition to the settlement of disputes, the panchayat enforced the customary law for preserving harmony and peace in the villages. In the level of social development, the role had extended and developed to deviate from traditional informal dispensation of justice. With the passage of time administration of justice by elderly persons of the village became disused by switching over to formal adjudication. The Courts have been established with formalities and technicalities. The pleadings, technical rules of evidence and hierarchy of appeal make the judicial adjudicatory mechanism time consuming as well as costly. This has resulted in large number of cases pending for disposal. The conventional legal procedures along with incurring of Court and advocate fees makes delay in delivering justice and hence docket-explosion had its impact on the efficiency of administration of justice delivering system.

Equal justice for all is a cardinal principle in the administration of justice. At the same time, access to justice to everyone is a basic requirement of human rights. Therefore, to redress the grievances or settle the disputes expeditiously at the minimal cost there is a need for mechanism to bring the disadvantage to contact with a legal system. To protect the interest of the working community and also to promote the employer-employee relations, the Industrial Disputes Act has been passed in 1947 with an intention to provide numerous mechanisms for investigation of industrial dispute and as well as to provide by compulsorily referring the matters involving industrial disputes to settle or adjudicate. Those mechanisms are namely conciliation, court of inquiry, voluntary arbitration and adjudication. Conciliation is one of the modes of settling industrial disputes. It is a persuasive process by which the disputants are the ultimate decision makers.

CONCEPT AND CHARACTERISTICS OF CONCILIATION

According to Alfred Stanger, “conciliation implies a compromise. It is a voluntary process in which the success depends on the citizen’s willingness to relinquish certain individual liberties as part of his duty to and respect for his fellowmen and to accept the other party as equal partner in conciliation proceedings. The characteristics of conciliation are flexibility, informality and simplicity”[1]. In India, as industrial law is concern, there is no prohibition for intervention of third person in conciliation.

An industrial dispute may arise when one party makes demand and other party refuses to accept the same. When the expectations of employee do not fit in to the pecuniary interest or desire of the employers, there will be failure of bilateral negotiations[2]. To channelize the pressures on one/both the parties to a dispute for getting settlement of their industries, an attempt is made to reconcile the views of both parties of the dispute, with intervention of  board of conciliation or conciliation officer as the case may be  to amicably adjust their claims. They are required to be patient and they are required to be persistent and to provide confidence to the disputants and to impress upon them that their problems are deeply understood. Conciliation is widely used technique in many countries as mediation. The concept of conciliation in India is mediation as is in the labour matters under foreign laws[3].

HISTORICAL PERSPECTIVES ON CONCILIATION

In the beginning, Trade Disputes Act of 1929 was passed to provide conciliation machinery at the center. Section 6 of the Act, provided for constitution of a board of conciliation which comprises of a chairman who is an independent person and two or four other members appointed equal in numbers. Section 18A of the same Act, was inserted “authorizing the central and provincial governments to appoint conciliation officers to act as mediators in trade disputes” which was incorporated in Section 4 of the Industrial Disputes Act.

APPOINTMENT OF CONCILIATION AUTHORITIES

Section 4 of the Industrial Disputes Act, provides that “the appropriate Government may, by notification in the Official Gazette, appoint such number of persons as it thinks fit, to be conciliation officers, charged with the duty of mediating in and promoting the settlement of industrial disputes. A conciliation officer may be appointed for a specified industry in a specified area or for one or more specified industries and either permanently or for a limited”.

The appropriate Government has discretionary powers “to appoint conciliation officer for a specified area or a specified industry either permanently or for a limited period for the purpose of mediation and promotion of the settlement of industrial disputes”.

CONCILIATION – AN EFFECTIVE MODE FOR RESOLVING INDUSTRIAL DISPUTES

Conciliation is the most used method in the settlement of disputes both in public and private enterprises[4].

Role of Conciliator

The conciliation officer does not discharge the function in adjudicative nature. He induces the parties during the conciliation proceedings and makes efforts to reach a settlement fairly and amicably and takes a role as mediator. He plays the role as a guide while actively taking part in the discussion and guiding the disputants for settlement. He cannot coerce the parties but he takes the role of the advisor by facilitating the persons to understand the reasonableness and ground for compromising with a view to suggest settlements.

Duties of Conciliation Officer

The conciliator depending upon the circumstances of each case, tries to induce the parties for negotiation by appreciating the advantages of settlement and binding of decisions. The conciliation machinery provides time for the parties to reconcile by allowing adjournments for possible resolution of industrial disputes[5]. Even after sending failure report, he is not debarred from making efforts to settle the industrial disputes.

Conciliation officer is not competent to hear and decide any of the issue between the opposing parties to industrial disputes. In this regard, his role is limited to the purpose of inducing the parties for mediation for reaching a fair and amicable settlement[6].

Section 12(2) deals with the duty of conciliation officer to investigate disputes expeditiously and empowers him to “do all such things as it thinks fit for the purpose of the inducing the parties to arrive at a fair and amicable settlement”[7].

Powers of Conciliation officer

The powers of the conciliation officer are provided under Section 11 of the Industrial Disputes Act, 1947. They are:

  • After giving a prior notice the conciliation officer is empowered to enter into the premises of the industrial establishment to inquire an industrial dispute which is existing or an apprehending.
  • The conciliation officer is vested with power to call for and inspect any relevant document relating to the dispute.
  • Conciliation officer may compel the parties to appear and produce all the relevant documents relating to the dispute as same powers as of the Civil Courts.
  • A conciliation officer is deemed to be a “public servant” as per Section 21of the IPC.

Duties of the Board of Conciliation

Board of Conciliation has duties which are enumerated under Section 13 of the Act. The Board is charged with the duty of bringing about a settlement of the industrial disputes referred to it and adopt any method as it thinks fit to minimise the conflict and patch up for arriving at a amicable settlement of the dispute[8]. If the effort of the Board is successful, it shall submit a memorandum of settlement duly signed by the parties to the dispute. Along with a memorandum of settlement a report shall be sent by the Board to the appropriate Government[9]. If no settlement is arrived by the parties, then the Board have to close the investigation and send complete report to the Government. The facts, findings, and the reasons of the disputes has to be stated as a failure report from the Board and further recommendations can also be given by the Board[10].

Powers of Board of Conciliation

The Board of Conciliation has the power of a Civil Court, while trying a dispute on matters defined under the Act. “Every inquiry or investigation by a Board shall be deemed to be a judicial proceeding within the meaning of Sections 193 and 228 of the IPC”. The Board is empowered to investigate matters that affect the merits and rights without any delay an it has to do everything that promotes a fair and amicable settlement.

Settlement

The conciliation officer is required to submit the report within 14 days of conciliation proceedings, however the time limit may be extended as may be agreed upon in writing by the parties subject to the approval of the conciliation officer. The memorandum of settlement is deemed to have to come to operation as per its term. In case of a Board, the report should be submitted within two months from the date on which the dispute was referred or within a short period as may be fixed by the appropriate government.

When a settlement is arrived privately that is otherwise than in the course of conciliation proceedings, it binds only the parties to the agreement. But when the settlement is reached with the help of the conciliation officer, the presumption is that the settlement is to be just and fair and has a far-reaching binding effect than a private settlement[11]. This shows that the government is motivating the parties involved i.e. the employer and employees to use the conciliation mechanism

FACTORS AFFECTING THE EFFECTIVENESS OF CONCILIATION

1. Inordinate delay in disposal of cases.

2. Lack of sufficient awareness of the Conciliation officer about the conditions of industry.

3. Lack of faith by the parties in the integrity and skills of the conciliation officers.

4. Absence of commitment of conciliation officers.

5. Inadequate background and training of the conciliation officers[12].

CHALLENGES

The absence of commitment and lack of faith had shown by the employer and workers in the conciliation proceeding drive them with no option but to refer the industrial dispute for adjudication[13]. Further, Section 2A of the Industrial Disputes Act, 1947 allows the “individual workmen” to directly approach the labour courts instead of taking it to the conciliation proceedings. It would reduce the role of conciliation authorities and making the dispute resolution more costly for the labour.

The conciliation authority need to make an objective analysis and assessment of the strength and weakness of each party to the industrial dispute and then exert the pressures on the manner in which they will be most effective. His tasks is the toughest one which would always depend on the nature of the industrial dispute before him and other related circumstances[14].

CONCLUSION

The conciliation machinery could discharge its functions effectively in the post economic reform period as numbers of cases were settled through conciliation machinery. Conciliation process provides a chance to rethink and compromise to arrive at settlement. Conciliation is a cheap and quick process in resolving industrial disputes. This has resulted in decreasing of number of references to adjudication[15]. Therefore, conciliation machinery has played an important role by inducing the parties to arrive at an amicable settlement. During 2015-2016, the Central Industrial Relations Machinery (CIRM) has intervened in 582 threatened strikes and its conciliation proceeding has succeeded in avoiding 579 strikes. This shows the success rate of around 99.48%.[16] similarly In  the year 2016-2017, the Industrial disputes handled by machinery has intervened in 635 threatened strikes and its conciliation procedure has succeeded in avoiding over 608 strikes, which gives a success rate of 95.74%.[17] Similarly, in all the years, leading up to 2021, approximately 461, 698, 89 threatened strikes have been avoided respectively[18]. Hence it is crystal clear that the success rate of conciliation machinery at Central level is extremely high. Various studies have shown that working of conciliation machinery is disappointing in resolution of industrial disputes[19]. These studies have discussed that failure of conciliation is due to the reasons:

  • lack of proper personnel with adequate training,
  • frequent transfers of conciliation officers,
  • lack of adequate powers of conciliation authorities, and
  • inordinate delay in conclusion of conciliation proceedings.

When these defects are rectified, conciliation method would be the one of the most successful methods to avert work stoppages. This also would decrease the number of cases to be referred for adjudication. In addition to that, conciliation officer has to make honest and conscious efforts to maintain impartiality and objectivity in order to win the confidence of the parties. The services of eminent persons such as retired judges, outstanding public leaders, retired civil servants, professors of industrial relations, economists, trade union leaders, enlightened businessman and experienced personnel officers on an adhoc basis are to be secured to make the conciliation proceedings more effective[20]. The light of above discussion it may be concluded that conciliation method is not a waiting room, but it is a best option as a winning place that provides guidance and chances to arrive at settlement free of cost.


[1]Kumar P.,“The working of conciliation machinery in Rajasthan”,2 IJIR 34(1966).

[2]E. Euwema et al. (eds.), Mediation in collective Labour conflicts, industrial relations and conflict management, 281, available at: https://doi.org/10.1007/978-3-319-92531-8_18 (Accessed on 28th September, 2022).

[3]G.M. Kothari, A Study of industrial law76 (Wadhwa and company, New Delhi, 2000).

[4]Venugopalan K.V., “Settlement machinery in public and private enterprises in Kerala”, 47 IJIR 383 (2011).

[5]Supra note 2.

[6]Madhavan Kutty v. Union of India, (1982) II LLJ 212.

[7]Sasamusa Sugar Mills Limited v. State of Bihar, AIR 1955 Pat. 49.

[8]Sub-section (1) of Section 13 of the ID Act, 1947.

[9]Sub-section (2) of Section 13 of the ID Act, 1947.

[10]Sub-section (3) of Section 13 of the ID Act, 1947.

[11]Britannia Biscuits Company Ltd. Employees Union v. ACL, (1983) LLJ 181.

[12]B.S. Murthy, D.V. Giri & B.P. Rath, “Conciliation machinery in Orissa: A Study”, 21 IJIR, available at: http://www.jstor.org/stable/27768906 (Accessed on – 29th September 2022).

[13]Supra note 2.

[14]G.M. Kothari, A Study of industrial law 77 (Wadhwa and company, New Delhi, 2000).

[15] N. Krishnamurthy, “Industrial Relations scenario in textile industry in Tamil Nadu”, 40 IJIR 476 (2005).

[16]Government of India, Ministry of Labour and Employment, Annual Report, 2016-17, Pp. 47-48.

[17]Ibid.

[18]Government of India, Ministry of Labour and Employment, Annual Report, 2020-21, P. 29.

[19]Debasish Biswas, “Effectiveness of Conciliation Resolving Industrial Disputes in West Bengal”, PP 5-6 available at: https://www.researchgate.net/publication/352413470 (accessed on 3rd October 2022).

[20]Kumar P. (1966), the working of conciliation machinery in Rajasthan, Indian Journal of industrial relations, 2(1), P. 47

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