Mechanism of settlement of Industrial Disputes

Any industry continually suffers from disputes. The relationship between employees and their pay is the one that raises the most concerns, and a disagreement between two parties results from their inability to agree. The employer and the employee are the parties involved in the labour dispute.

Traditionally, the employer has constantly introduced an excessive self-being in the powerful position, placing the representatives on the lower stepping stool of the general public. This disparity must be corrected so that the representative and the business have an equal chance to communicate their needs.

An employee has the right to get paid depending on how much effort he contributes. The employer must provide the employee with a decent amount of pay and other requirements necessary to obtain employment. Therefore, settlement of industrial disputes is always crucial between two parties under the Industrial Dispute Act of 1947 to prevent the company from suffering losses or harm

Industrial Disputes Act, 1947

The Industrial Disputes Act of 1947 came into existence to provide equal and fair treatment for employers and employees. The goal of the action is to settle arguments that come up during conversations, and it promotes contemporary harmony and amity in this way.

The Industrial Dispute Act of 1947 governs Indian labour rules to the degree relating to trade unions. Section 2(k) of the Act outlines the disputes between Employers and employers, employers and workers, and employees and employees related to employment or unemployment.

The means to resolve an industrial dispute if the parties cannot reach an amicable agreement is via adjudication on the recommendation of the relevant government. For the parties to the issue to settle amicably, the function of voluntary arbitration is therefore essential.

There are other methods also for settling disputes. The most effective way of settling conflicts is through collective bargaining, representing the workers’ diversity in the sector. Other dispute resolution methods include mediation, arbitration, and voluntary arbitration if collective bargaining is unsuccessful.

Mechanism for settlement of industrial disputes

Concrete machinery regulates the dealing of industrial disputes in a just and fair manner for the involved parties. This machinery aids in ensuring or guaranteeing a standardised situation in which the employer and the employee can coexist and work amicably, which is necessary for the development of the industry.

Conciliation and Mediation are the two ways by which generally any Industrial Dispute gets resolved.

  • Conciliation:

    One of the most well-known methods for resolving disputes under the Industrial Dispute Act of 1947 is conciliation. This way of resolving disputes is used almost everywhere in the world and is not unique to India. A third party helps to dispute parties carry out their discussions through the process of conciliation.

    The following are the two categories of jurisdiction used to carry out conciliation functions:

    • Through the Department of Labor’s conciliation staff
    • A chairperson and two and four members who speak for the employers and employees make up the Conciliation Board. Based on the suggestions from the parties, the administration will choose these candidates.

    As per Section 4 of the Industrial Dispute Act of 1947, a conciliation officer’s role is to foster a collaborative culture to help the parties in settlement of industrial disputes. Rather than being a judicial duty, this is an operational one.

  • Voluntary Arbitration

    A dispute between two parties is resolved through arbitration when a third party, typically a lone arbitrator or panel of arbitrators, is tasked with doing so. The term “voluntary arbitration” indicates that the parties voluntarily accept the arbitrators’ decisions or board of arbitrators.

    Voluntary arbitration is allowed under Section 10A of the Industrial Dispute Act of 1947, although it is fully managed through adjudication. The margin of distinction between arbitration and adjudication is relatively narrow. In arbitration, the parties involved in the dispute choose the judge, whereas, in adjudication, the State appoints the judge.

  • Adjudication

    Adjudication does not entirely substitute conciliation; instead, it intervenes to accomplish the task that the conciliation process intends to start when it fails to settle a disagreement among two parties. It only provides an additional avenue for recourse should the necessity arise. The last resort for resolving a labour dispute is adjudication.

    The adjudication of the labour dispute includes a three-tiered structure:

  • Labor court:

    Section 7 of the Act, 1947 establishes a labour court. The competent government may decide to create a labour court by publishing a notice in the official gazette. One judge from the High Court, District Court, or an independent judge makes up the labour court. Alternately, the judge might be a former labour court judge with a minimum of five years of experience.

  • Industrial tribunal:

    Section 7A of the act outlines the requirements for creating an industrial tribunal. One or even more may be established by the government, with both the courts possessing greater authority than the labour court. It should not be regarded as a permanent structure but as one erected for sporadic hearings. Many issues will explore since they will have an extensive range of authority.

  • National tribunal:

    The Central Government forms a national tribunal through an official gazette to resolve national-level labour disputes. Depending on their credentials, the government chooses two individuals to act as evaluators in this tribunal. The labour court and the industrial tribunal are stripped of jurisdiction when a dispute involving two industry parties enters the national tribunal.


The 1947 Industries Dispute Act established guidelines for resolving employee disputes and rules for controlling an enterprise’s running.

The Industrial Disputes Act established internal and external agencies for the settlement of industrial disputes. It forbade unlawful strikes, lockouts, and unfair labour practices, but from the perspective of compliance, it is crucial to have efficient internal systems to resolve disagreements.

External methods like arbitration and conciliation frequently require a lot of effort, price, and time, which strains the connection between the employer and the employee. Therefore, internal processes are advantageous since it reduces the need for adjudication or other forms of conflict resolution, leading to a better working environment and more productivity.


What is an Industrial Dispute?

Any disagreement or conflict among employers, between employers and employees, or between employees and themselves related to employment, non-employment, conditions of full-time work, or working conditions is referred to as an "industrial dispute."

Which types of establishments are covered under the Industrial Disputes Act of 1947?

This Act applies to establishments with employee collaboration and engages in a planned activity with or without the goal of making a profit.

What are the critical elements of the 1947 Industrial Disputes Act?

The primary goal of this Act is to ensure that there is industrial harmony. In the event of layoffs, reductions, or closure, the industry with an average of 100 or more workers over the previous 12 months must first acquire the prior approval of the designated authority.

How do raise Industrial Disputes?

If a discharge, dismissal, layoff, or service ends, a worker may bring a dispute immediately before a conciliation officer.

How is the Arbitration Award carried out?

After 30 days have passed from the date of its publication in the Official Gazette, an Award becomes enforceable. The person is responsible for putting the Awards into effect.

About Author

Eknoordeep is an Advocate. Currently she is working as an Associate with a Law Firm based out of Delhi. She has completed her BA. LL.B( Hons) from Lovely Professional University, Punjab in 2020. She has a good experience in Corporate, Civil and Commercial Laws.

She has a keen interest in the research area and write research papers, articles on current and social issues. Her manuscripts are published with distinguished Journals and Magazines. She is also a core member of Legal Podcast on Spotify (Metanoia). She has worked as an academic writer and content writer with different organisations.