Image source: https://blog.ipleaders.in/mechanism-resolution-industrial-dispute-industrial-relation-code-2020/

This article has been written by Kalpesh Shailendra Amrute pursuing the Diploma in Labour, Employment and Industrial Laws (including POSH) for HR Managers from LawSikho.

Introduction

HR professionals, acting as a middle man, have to do a balancing act between the management and workers to ensure uninterrupted and smooth flow of business operations. While doing so many times we face challenges from workers related to payment issues, disciplinary issues, issues related to working conditions etc. These issues can be of individual or collective in nature. While we do our best to alleviate them, sometimes taking a legal course of action becomes imminent, either by choice or with no alternative. In that scenario before the legal team steps in, HR has to act as the first line of defence for any organization. In order to minimise damage as well as to protect the interest of the organization, it is necessary to understand the overall mechanism of grievance redressal and the legal framework surrounding it to deal with such matters more efficiently and effectively.

Accordingly, in this article, we will try to understand –

  1. Meaning of grievance and the difference between a complaint and grievance
  2. Understanding the concept of industrial dispute
  3. Possible voluntary set-up to resolve them
  4. Dispute settlement mechanism in law and authorities involved in it

What is a grievance?

Before we ponder over the mechanism to resolve issues. First, let us understand the meaning of grievance. In simple words, it is a formal complaint filed by an aggrieved employee regarding any dissatisfaction he faces in his job. A grievance can be raised either by individuals, groups or by a union of workmen (if it exists).

Causes for a grievance primarily be,

  • Related to company policies and procedures
  • Related to nature of work
  • Payment related issues
  • Employee relations either with colleagues or manager

Difference between a complaint and a grievance

While both look similar in nature, there is a marginal difference between the two.

Complain

Grievance

A complaint is any dissatisfaction on part of an employee related to the job.

When a complaint remains unattended, it becomes a grievance.

A complaint is usually informal and can be expressed orally as well as in writing

A grievance is a formal way of expressing discontent, usually in written format

Complaints are mostly of individual nature

A grievance can be filed by an individual, a group of workers or by the union.

The impact could be lesser and remains within the organization as complaints are usually caused by minor issues.

The impact of an unattended grievance can be huge, as it may lead to a legal dispute and could even affect the reputation of the organization.

 

Industrial dispute and its legal perspective 

When a grievance is aggravated and heading for a legal course, it becomes an “industrial dispute”. The main reason for the arising of industrial dispute is the difference between the management and workmen related to employment. In India, we have a separate act dedicated to deal with such matters. The Industrial Dispute Act, 1947, not just defines the term but also provides a step by step mechanism to deal with such matters from a legal point of view. Provisions of this act aim towards providing benign measures seeking to pre-empt industrial tensions. Unlike many other labour laws which are intended mainly to protect the interest of employees, this act proposes a tripartite dispute settlement mechanism involving workmen, employers and the appropriate government.  

A dispute can be raised by any person working in the capacity of a workman in an industry. In case of any dispute, they may directly approach the conciliation officer in the district to register their grievances. Persons working in an administrative role or at a managerial capacity are excluded being a workman as per the provision of this act. 

Possible voluntary set-up for resolution of a dispute

Before understanding the external authorities provided in the act, let us first discuss the possible ways to manage any grievance within the organization. This can be useful even to those organizations, not covered under the Act, i.e. service sector. Let’s discuss each one in detail;

  • Certified Standing Orders – Carefully drafted and duly certified standing orders as per the provisions of The Industrial Employment (standing orders) Act, 1946 provides a legal framework for an organization to deal with ease for matters related to employment. It helps the employer to get rid of any unnecessary industrial dispute. Topics mentioned below need to be provided in standing orders.
  • Workmen’s classification – Permanent, Temporary, Probationers, Badlis etc.
  • Work timing, shifts, leaves, holidays.
  • Attendance, Wage periods, Wage rate.
  • Termination of employment & notice given by either party, act of misconduct, suspension & dismissal.
  • Grievance redressal means against unfair treatment.
  • Code of conduct and policies – It gives guidelines for workmen as well as management to carry out day to day operations in a systematic manner and deal with any unwanted situation in a systematic way. Policies allow to maintain better transparency and facilitate better decision making. For example, a well-defined compensation policy helps to maintain equality among workers, any incentive plan drafted carefully provides clarity and prevents the possibility of dissatisfaction among workers possibly leading to a dispute. At the same time the code of conduct simplifies the way workers should carry themselves at work. 
  •  Setting up of helpdesk by HR – Acting as an intermediary between the employer and workmen, handling grievances is a part of HR job. Setting up helpdesk will help workers to approach HR for their queries and get it resolved in a timely manner without any hustle. In a tech-driven world using systems like chatbot can be used. Such helpdesks will not only help to resolve any grievances but also to make employer understand the overall mood among workers. Based on which employer may take any pre-emptive action, if required.
  • Joint workgroups – Such groups allow workers participation in business affairs. This will help to build trust between employers and workmen. Since they work at the ground level, workers can provide valuable feedback to the management about the performance of the machinery, existing processes etc. This will help to increase the productivity and overall growth of the organization.
  • Communication- It is a “buzzword” to avoid any conflict. Employers should not shy away from sharing relevant information with workers. Meetings, town halls etc. should happen on a regular basis to reduce grapevine communication. For example, during time’s like Covid-19 when tough decisions like retrenchment, lay-off are despicable, direct communication by the employer with workers is preferred rather than taking any action in haste. This may reduce the risk of potential legal action by the workers. 

Authorities under the Act for settlement of disputes

In total there are six to eight various authorities set up as a part of dispute settlement machinery, which are mainly divided into three stages – Conciliation, Arbitration and Adjudication. Let’s discuss them one by one.

  • Works CommitteeSection 3 of the ID act provides for setting up of such committees mainly in factories with 100 or more workers. The formation of the committee is bi-partite with equal representation from employers and employees. Worker representatives should be elected departmentally from various groups and categories of workmen in consultation with the registered trade unions. The main objectives of such committees are to secure and promote healthy relations between the employer and workmen, have a say in matters of common interest and to cool down any material difference arising from such matters.
  • Grievance Redressal Committee – As per amended provisions of the ID Act in 2010 and Section 9C, it is mandatory for every industrial establishment to have such a committee internally for resolution of disputes. Total members of such a committee to be restricted at six (with an equal number of members from the employer and workmen) while the position of the chairperson to be rotated alternatively on yearly basis between the committee members. Any proceedings to be completed by the committee within a month. Workman aggrieved by the decision of the committee can appeal to the employer, who upon receiving such a complaint need to dispose of it within a month from its receipt and send the copy of his decision to the workman. However, it is important to note that the provisions of this section do not affect the right of a workmen to raise an industrial dispute as per the act.
  • Conciliation Officer – He is basically a mediator appointed by the appropriate government, i.e. either central or state, usually an officer of the rank of assistant labour commissioner in every district. They call both parties to the dispute to a table to discuss and come to a common consensus to resolve the issue. The aim is to come to an amicable “settlement” of dispute. His duties include, 

– To investigate and settle the dispute in a fair and amicable way without delay

– Prepare a memorandum of settlement with signs from both the parties and send it to the government along with his report.

  • Board of Conciliation – Any matter not resolved at the above stage can be referred to the board. It includes an independent chairman (mostly a conciliation officer), two to four members representing both the disputed parties in equal numbers. Duties of the board are similar to the conciliation officer. Board requires to submit its report to the government maximum within two months from the date the matter refer to them. Upon failure to solve the dispute, the appropriate government may refer the matter for adjudication.
  • Arbitrator – Although the ID act does not define arbitrator, but it includes umpires. There is a separate act called “The Arbitration Act, 1940” in India. An arbitrator is an independent person appointed by both parties to dispute, usually well in advance for amicable settlement of disputes. The award is recognised as per the act and binding on both the parties. Appointing an arbitrator is a voluntary act and not binding to the parties as per Section 10A of the ID act. Arbitrators are required to submit a signed copy of the arbitration award to the government post their investigation.
  • Court of Inquiry – Not in every case court orders an enquiry, unless it feels it necessary to do so. In exceptional cases, if there is an enquiry, then a report of enquiry (usually held by the senior judge of court) to be submitted within a period of six months from the date of enquiry.
  • Labour Court (LC)– Matters mentioned in Schedule II of the ID act are generally notified to the labour courts by the government. Labour courts are run by the presiding officer equivalent to the senior level district judge. Matters such as strikes & lay-off, dismissal or discharge of workmen, validating standing orders etc. are referred and heard by the labour court. “Award” given by the labour court is final and binding to the parties of the dispute.
  • Industrial Tribunal (IT) – Even though industrial tribunals have more power as compared to labour courts. Schedule II and Schedule III are the subject matters of industrial tribunals. Its presiding officer is equivalent to a high court judge. Subject matters of industrial tribunals are retrenchment, any closure of the establishment, profit sharing, wage-related matters including those related to PF & gratuity etc. 
  • National Tribunal (NT) – Even though matters heard at the National tribunal are of the same subjects as those of labour courts and industrial tribunals, they are being adjudicated at the national tribunal when the impact of the matter is on a large number of population as well as matters impacting more than one state. The judge of a national tribunal is a “presiding officer” equivalent to a Chief Justice of High Court judge.

Dispute Settlement Mechanism

  • The Board of adjudicating authorities have the right to force the attendance of any person, examine witnesses and compel to produce documents and proofs related to the dispute.
  • Every authority at the adjudication stage is deemed to be a civil court.
  • Be it labour court or any tribunal, their judgement is known as “award” is final decision binding on the parties to the dispute.
  • Award given by the authorities has to be in writing and signed by the presiding officer before its submission to the government.

Since any award given by the adjudicating authorities is final and cannot be appealed further as per the ID act, however, if any party feels its fundamental rights are violated, they may file a “writ petition” in the high court of their jurisdiction or in the Supreme Court of India. 

Conclusion

Both management and workers are fundamental parts of any commercial organization. While both works towards the growth of the organization, differences are inexorable during the process. Even though there is a “legal way” to deal with it, it is not advisable to take the route too often. it is not just time-consuming but also strain the relationships between the two resulted in impacting adversely to the organization, not just performance-wise but it affects the reputation of the business as well. Having a robust internal system to deal with employee grievances in a systematic manner along with empathy towards their problem is prudent and may save millions of dollars for a company in possible future legal battles. Therefore, transparency in matters and flexibility in approach from both sides is desirable for the eternal growth of the organization. 

References


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