Industrial Disputes
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.” This definition includes all the aspects of a dispute. It, not only includes the disagreement between employees and employers, but also emphasizes the difference of opinion between worker and worker. The disputes generally arise on account of poor wage structure or poor working conditions. This disagreement or difference could be on any matter concerning the workers individually or collectively. It must be connected with employment or non-employment or with the conditions of labor. From the point of view of the employer, an industrial dispute resulting in stoppage of work means a stoppage of production. This results in increase in the average cost of production since fixed expenses continue to be incurred. It also leads to a fall in sales and the rate of turnover, leading to a fall in profits. The employer may also be liable to compensate his customers with whom he may have contracted for regular supply. Apart from the immediate economic effects, loss of prestige and credit, alienation of the labor force, and other non-economic, psychological and social consequences may also arise. Loss due to destruction of property, personal injury and physical intimidation or inconvenience also arises. For the employee, an industrial dispute entails loss of income. The regular income by way of wages and allowance ceases, and great hardship may be caused to the worker and his family. Employees also suffer from personal injury if they indulge into strikes n picketing; and the psychological and physical consequences of forced idleness. The threat of loss of employment in case of failure to settle the dispute advantageously, or the threat of reprisal action by employers also exists. Prolonged stoppages of work have also an adverse effect on the national productivity, national income. They cause wastage of national resources. Hatred may be generated resulting in political unrest and disrupting amicable social/industrial relations or community attitudes.
Industrial Dispute Act
Industrial Dispute Act was an initiative by the government to reconcile the disputes of industries by the fair investigation. Industrial Dispute Act of most of the countries was an outcome of rubble & scattered life during industrial revolution. Later on, it became an imperative need when Second World War began. During the Industrial revolution, when the capitalism & feudalism was prominent, bourgeois classes were exploiting proletariat classes. And this proletariat class was not able to raise their voice against the deprivation of their rights. Slowly & gradually, when communism was getting strength, proletariat class started to form their unions & associations, & finally in most of the country, they asked for Industrial Dispute Act to the governments & now this is in effect. In India, Industrial Dispute Act came into existence during the time of India’s independence. It was formed in April 1947 with an aim to resolve the dispute of industries by authentic investigation. Apart from this, there were also certain purpose to make it but the key reason was the reconcilement of industries & to provide safeguards to the workers. The objective of the Industrial Disputes Act is to secure industrial peace and harmony by providing machinery and procedure for the investigation and settlement of industrial disputes by negotiations. Various studies indicate that Indian labour laws are highly protective of labour, and labour markets are relatively inflexible. These laws apply only to the organised sector. Consequently, these laws have restricted labour mobility, have led to capital-intensive methods in the organised sector and adversely affected the sector’s long-run demand for labour. Labour being a subject in the concurrent list, State-level labour regulations are also an important determinant of industrial performance. Evidence suggests that States, which have enacted more pro-worker regulations, have lost out on industrial production in general. The Industrial Disputes Act (IDA) of 1947. Particular attention has been paid to its Chapter V-B, introduced by an amendment in 1976, which required firms employing 300 or more workers to obtain government permission for layoffs, retrenchments and closures. A further amendment in 1982 (which took effect in 1984) expanded its ambit by reducing the threshold to 100 workers. It is argued that since permission is difficult to obtain, employers are reluctant to hire workers whom they cannot easily get rid of. Job security laws thus protect a tiny minority of workers in the organised sector and prevent the expansion of industrial employment that could benefit the mass of workers outside. It is also argued that the restriction on retrenchment has adversely affected workplace discipline, while the threshold set at 100 has discouraged factories from expanding to economic scales of production, thereby harming productivity. Several other sections of the IDA allegedly have similar effects, because they increase workers’ bargaining strength and thereby raise labour costs either directly through wages or indirectly by inhibiting work reorganization in response to changes in demand and technology. The Act also lays down The provision for payment of compensation to the workman on account of closure or lay off or retrenchment. The procedure for prior permission of appropriate Government for laying off or retrenching the workers or closing down industrial establishments Unfair labour practices on part of an employer or a trade union or workers. The Industrial Disputes Act extends to whole of India and applies to every industrial establishment carrying on any business, trade, manufacture or distribution of goods and services
irrespective of the number of workmen employed therein. Every person employed in an establishment for hire or reward including contract labour, apprentices and part time employees to do any manual, clerical,skilled, unskilled, technical, operational or supervisory work, is covered by the Act. This Act though does not apply to persons mainly in managerial or administrative capacity,persons engaged in a supervisory capacity and drawing > 1600 p.m or executing managerial functions and persons subject to Army Act, Air Force and Navy Act or those in police service or officer or employee of a prison.
Causes Of Industrial Disputes
Causes of Industrial disputes can broadly be classified in two parts: 1) Monitory 2) Non Monitory
The Monitory causes are the issues relating to compensation and wages where; non monitory are issues relating to work conditions, working hours, leave and holidays without pay, unjust layoffs and retrenchments. Common Cause of Industrial Disputes: 1. Demand for Higher wages The employees want higher wages. The employer wants more profit by paying lower wages. This results in frustration among employees and they resort to agitation. This is the case with almost all the major disputes in industry.
2. Non-Implementation of Bonus Schemes Bonus is a strong incentive for the employees. They want share in the profit in the form of bonus. However, the employers generally show deficit and do not pay bonus to the employees. This results in industrial dispute.
3. Demand for better working condition The employees want better working conditions. If their demand is not accepted by the employer they resort to agitation approach. The result is industrial disputes.
4. Failure to recognize Unions The employers cannot tolerate trade unions as they feel that these unions are threat to their profit. Therefore, they discourage union movement by the policy of divided and rule. But the workers believe in collective bargaining and desire the recognition of unions by the employers.
5. Demand for proper leave Rules The employers want that leave rules and working hours should as laid down in factory act. No worker should be forced to work more than 48 hours or more in a week. However, generally employers ignore these rules which results in industrial dispute.
6. Over Time Payment The employees demand over-time payment as prescribed in the factory act. But the employer either does not make any payment or makes under-payment. This causes frustration among employees and they resort to agitations.
7. Political Interference Most of the trade unions in India are dominated by political parties. Sometimes, political leaders use workers as tool for their selfish ends. They excite the workers to go on strike or adopt other agitational approach.
8. Punishment to Workers Sometimes, the employer adopts dictational policy and victimizes the employers by suspending or dismissing them from services. In order to get the victimization redressed the employees resort to agitational approach. This disturbs the industrial peace.
9. Mass retrenchment & undue promotions:One major cause of industrial dispute is the mass retrenchment and undue promotions of the employees. The employees start agitation to show their resentment against the callous attitude of the management.
10. Insecurity of Service:The employees want security of service. If the employer does not meet with their demand they adopt agitational approach. Now this is not a big cause as the economy is growing and industry belief of maintaining and growing talent with their existing work force. And also opportunities have increased.
11. Perception about policy or decision Sometimes, the policy or decision taken by the management are improper and directly impacting employees and some time employees perception about the policies or decision is not positive. This causes frustration among the employees and they went to agitational approach in bid to put pressure on the management to withdraw the wrong decision.
12. Bad Behavior The pre-requisite of industrial peace is the cordial relations between the employer and employees. If the behavior of the management is bad towards the employees, good will disappears and dispute arises.
13. Pending grievances:The employees place their grievances before the management time and again. If their genuine grievances are not removed or properly attended, it gives rise to frustration and ultimately a dispute.
It is also observed that the disputes starts with one major cause and then later on unions also include issues which are not related to the main issues, before talking to management about it. (Generally most of the strikes have multiple issues)
Industrial Dispute in India
doc_914677253.doc
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.” This definition includes all the aspects of a dispute. It, not only includes the disagreement between employees and employers, but also emphasizes the difference of opinion between worker and worker. The disputes generally arise on account of poor wage structure or poor working conditions. This disagreement or difference could be on any matter concerning the workers individually or collectively. It must be connected with employment or non-employment or with the conditions of labor. From the point of view of the employer, an industrial dispute resulting in stoppage of work means a stoppage of production. This results in increase in the average cost of production since fixed expenses continue to be incurred. It also leads to a fall in sales and the rate of turnover, leading to a fall in profits. The employer may also be liable to compensate his customers with whom he may have contracted for regular supply. Apart from the immediate economic effects, loss of prestige and credit, alienation of the labor force, and other non-economic, psychological and social consequences may also arise. Loss due to destruction of property, personal injury and physical intimidation or inconvenience also arises. For the employee, an industrial dispute entails loss of income. The regular income by way of wages and allowance ceases, and great hardship may be caused to the worker and his family. Employees also suffer from personal injury if they indulge into strikes n picketing; and the psychological and physical consequences of forced idleness. The threat of loss of employment in case of failure to settle the dispute advantageously, or the threat of reprisal action by employers also exists. Prolonged stoppages of work have also an adverse effect on the national productivity, national income. They cause wastage of national resources. Hatred may be generated resulting in political unrest and disrupting amicable social/industrial relations or community attitudes.
Industrial Dispute Act
Industrial Dispute Act was an initiative by the government to reconcile the disputes of industries by the fair investigation. Industrial Dispute Act of most of the countries was an outcome of rubble & scattered life during industrial revolution. Later on, it became an imperative need when Second World War began. During the Industrial revolution, when the capitalism & feudalism was prominent, bourgeois classes were exploiting proletariat classes. And this proletariat class was not able to raise their voice against the deprivation of their rights. Slowly & gradually, when communism was getting strength, proletariat class started to form their unions & associations, & finally in most of the country, they asked for Industrial Dispute Act to the governments & now this is in effect. In India, Industrial Dispute Act came into existence during the time of India’s independence. It was formed in April 1947 with an aim to resolve the dispute of industries by authentic investigation. Apart from this, there were also certain purpose to make it but the key reason was the reconcilement of industries & to provide safeguards to the workers. The objective of the Industrial Disputes Act is to secure industrial peace and harmony by providing machinery and procedure for the investigation and settlement of industrial disputes by negotiations. Various studies indicate that Indian labour laws are highly protective of labour, and labour markets are relatively inflexible. These laws apply only to the organised sector. Consequently, these laws have restricted labour mobility, have led to capital-intensive methods in the organised sector and adversely affected the sector’s long-run demand for labour. Labour being a subject in the concurrent list, State-level labour regulations are also an important determinant of industrial performance. Evidence suggests that States, which have enacted more pro-worker regulations, have lost out on industrial production in general. The Industrial Disputes Act (IDA) of 1947. Particular attention has been paid to its Chapter V-B, introduced by an amendment in 1976, which required firms employing 300 or more workers to obtain government permission for layoffs, retrenchments and closures. A further amendment in 1982 (which took effect in 1984) expanded its ambit by reducing the threshold to 100 workers. It is argued that since permission is difficult to obtain, employers are reluctant to hire workers whom they cannot easily get rid of. Job security laws thus protect a tiny minority of workers in the organised sector and prevent the expansion of industrial employment that could benefit the mass of workers outside. It is also argued that the restriction on retrenchment has adversely affected workplace discipline, while the threshold set at 100 has discouraged factories from expanding to economic scales of production, thereby harming productivity. Several other sections of the IDA allegedly have similar effects, because they increase workers’ bargaining strength and thereby raise labour costs either directly through wages or indirectly by inhibiting work reorganization in response to changes in demand and technology. The Act also lays down The provision for payment of compensation to the workman on account of closure or lay off or retrenchment. The procedure for prior permission of appropriate Government for laying off or retrenching the workers or closing down industrial establishments Unfair labour practices on part of an employer or a trade union or workers. The Industrial Disputes Act extends to whole of India and applies to every industrial establishment carrying on any business, trade, manufacture or distribution of goods and services
irrespective of the number of workmen employed therein. Every person employed in an establishment for hire or reward including contract labour, apprentices and part time employees to do any manual, clerical,skilled, unskilled, technical, operational or supervisory work, is covered by the Act. This Act though does not apply to persons mainly in managerial or administrative capacity,persons engaged in a supervisory capacity and drawing > 1600 p.m or executing managerial functions and persons subject to Army Act, Air Force and Navy Act or those in police service or officer or employee of a prison.
Causes Of Industrial Disputes
Causes of Industrial disputes can broadly be classified in two parts: 1) Monitory 2) Non Monitory
The Monitory causes are the issues relating to compensation and wages where; non monitory are issues relating to work conditions, working hours, leave and holidays without pay, unjust layoffs and retrenchments. Common Cause of Industrial Disputes: 1. Demand for Higher wages The employees want higher wages. The employer wants more profit by paying lower wages. This results in frustration among employees and they resort to agitation. This is the case with almost all the major disputes in industry.
2. Non-Implementation of Bonus Schemes Bonus is a strong incentive for the employees. They want share in the profit in the form of bonus. However, the employers generally show deficit and do not pay bonus to the employees. This results in industrial dispute.
3. Demand for better working condition The employees want better working conditions. If their demand is not accepted by the employer they resort to agitation approach. The result is industrial disputes.
4. Failure to recognize Unions The employers cannot tolerate trade unions as they feel that these unions are threat to their profit. Therefore, they discourage union movement by the policy of divided and rule. But the workers believe in collective bargaining and desire the recognition of unions by the employers.
5. Demand for proper leave Rules The employers want that leave rules and working hours should as laid down in factory act. No worker should be forced to work more than 48 hours or more in a week. However, generally employers ignore these rules which results in industrial dispute.
6. Over Time Payment The employees demand over-time payment as prescribed in the factory act. But the employer either does not make any payment or makes under-payment. This causes frustration among employees and they resort to agitations.
7. Political Interference Most of the trade unions in India are dominated by political parties. Sometimes, political leaders use workers as tool for their selfish ends. They excite the workers to go on strike or adopt other agitational approach.
8. Punishment to Workers Sometimes, the employer adopts dictational policy and victimizes the employers by suspending or dismissing them from services. In order to get the victimization redressed the employees resort to agitational approach. This disturbs the industrial peace.
9. Mass retrenchment & undue promotions:One major cause of industrial dispute is the mass retrenchment and undue promotions of the employees. The employees start agitation to show their resentment against the callous attitude of the management.
10. Insecurity of Service:The employees want security of service. If the employer does not meet with their demand they adopt agitational approach. Now this is not a big cause as the economy is growing and industry belief of maintaining and growing talent with their existing work force. And also opportunities have increased.
11. Perception about policy or decision Sometimes, the policy or decision taken by the management are improper and directly impacting employees and some time employees perception about the policies or decision is not positive. This causes frustration among the employees and they went to agitational approach in bid to put pressure on the management to withdraw the wrong decision.
12. Bad Behavior The pre-requisite of industrial peace is the cordial relations between the employer and employees. If the behavior of the management is bad towards the employees, good will disappears and dispute arises.
13. Pending grievances:The employees place their grievances before the management time and again. If their genuine grievances are not removed or properly attended, it gives rise to frustration and ultimately a dispute.
It is also observed that the disputes starts with one major cause and then later on unions also include issues which are not related to the main issues, before talking to management about it. (Generally most of the strikes have multiple issues)
Industrial Dispute in India
doc_914677253.doc