There are a number of causes for industrial disputes which can be classified into

four categories as follows:

(1) Economic Causes:

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Really, the most common causes of industrial disputes are economic causes.

These are as follows:

(a) Wages:

The demand for wage increase is the prime-most cause of the industrial disputes. A
large number of strikes are being organised to raise a voice against the rise in
prices and cost of living.

The real wages of the workers decline faster with the increase in price level and
they feel dissatisfied with their present emoluments and struggle for the
improvement in wages. By having a cursory glance on the history of industrial
disputes; it becomes clear that cause of most of the industrial disputes was wages.
The Indian employer has no clear-cut and enlightened wage policy.
(b) Dearness Allowance and Bonus:

Increase in cost of living was the main cause of the demand of dearness allowance
by the workers to equate their wages with the rise in prices. Bonus also plays an
important role as a cause of industrial dispute. It is interesting to note that in 1966,
49 percent of the disputes were related to wages and bonus.

Both the quantum and the method of bonus payment have led to a number of
disputes. There is an increasing feeling among the workers that they should have a
greater share in the profits of the concern and this fact has not been recognised by
the employees and non-acceptance of this fact has been a source of friction among
employers and employees.

(c) Working Condition and Working Hours:

ADVERTISEMENTS:

The working conditions in Indian industries are not hygienic. There is not ample
provision of water, heating, lighting, safety etc. Working hours are also greater.
The demand of palatable working conditions and shorter hours of work are also
responsible for labour disputes.

(d) Modernisation and Automation of Plant and Machinery:

The attempt at modernisation and introduction of automatic machinery to replace
labour has been the major cause of disputes in India. Workers go on strike, off and
on, to resist rationalisation and automation. A strike in cotton textile industry in
Kanpur in 1955 is an example of such disputes. Workers in Life Insurance.

(e) High Industrial Profits:

During and after the world wars, prices of the commodities went up and the
industrialists earned huge profits. In order to get share in the prosperity of the
industry, it naturally led to the resentment on their part. The increased profits also
led to the demands of higher wages and bonus. Now in the changing world,
concept of labour has changed considerably. They think themselves as a partner of
the industry and demand their share in the profits.

(f) Demand for Other Facilities:

Demand for other facilities for meeting out their basic needs such as medical,
education, housing, etc., encourage the workers to resort to direct action because
such facilities were denied by the employers.

(2) Managerial Causes of Industrial Disputes:

These causes include autocratic managerial attitude and defective labour policies
etc.

(a) Denial of Recognition to Trade Unions:

Failure on the part of the employer to recognise the trade unions or to recognise the
rival union for representation, insult of trade union leaders by the employers are
some of the examples of autocratic managerial attitude worth mentioning as the
causes of industrial disputes. The attitude of employers towards the labour
associations had never been sympathetic. They want to divide them and rule.

Moreover, the management is generally not willing to talk over the dispute with
the workers or workers’ representatives or refer it to ‘arbitration’ even when the
workers are willing to do so.

(b) Defective Recruitment Policies:

The recruitment practices in Indian industries are defective. Recruitment is

generally made by the contractors who exploit the workers and suppress their
individuality. The defective promotion, demotion, transfer and placement policies
encourage dissatisfaction among workers.

(c) Irregular Lay-Off and Retrenchment:

Lay-off and retrenchment are reasons to be mentioned for encouraging industrial

disputes. Indian employers follow the policy of ‘Hire and Fire’. As a matter of
practice, workers are not made permanent for a pretty long time to deprive them of
their legitimate rights.

(d) Defiance of Agreements and Codes:

The employers regularly defy the provisions of collective bargaining agreements
and code of conduct and code of discipline with a view to harass or exploit the
employees and just encourage strife.

(e) Defective Leadership:

Inefficient leadership is also one of the causes of disputes. Leadership from the
management and from the workers is quite incompetent to induce the workers to
get them worked. The employers’ representatives are not delegated sufficient
authority to negotiate with the workers.

They are not in a position to commit anything to workers on behalf of the

management. Defective management leadership ignored the labour problems and
inefficient labour leadership could not coordinate the efforts of their fellow
members, so disputes arise.

(3) Government Machinery:

Government measures to prevent and machinery to settle the disputes are not much
effective.

There are two examples:

(i) Enactments are Ineffective:

Though there is a plethora of enactments for promotion of harmonious industrial
relations, yet it is ineffective and unsatisfactory in most cases due to:

(a) The irrelevancy in the context of the challenges of present industrial

climate/culture, as many has not been convinced of their utility satisfactorily;

(b) Improper and inadequate implementation by many employers;

(c) Incapability of understanding and answering imperatives of development.

(ii) Little Confidence over Settlement Machinery:

Both employers and employees have little confidence over the Conciliation
Machinery as it could succeed in settling a very negligible number of disputes so
far. Both employers and employees are litigation-minded. Moreover, the settlement
machinery is quite inadequate because, it has to see whether labour laws are
properly being implemented or not.

(4) Voluntary Arbitration:

Mr. V.V. Giri was the promoter and supporter of voluntary arbitration and
regarded compulsory adjudication as enemy number one of collective bargaining
and industrial peace.

The Code of Discipline and the Industrial Truce Resolution adopted by the central
organisations of employers and employees also stress the significance of voluntary
arbitration. It was agreed by the two partners of industry that any dispute would be
referred to voluntary arbitration if conciliation efforts fail and settle the dispute
mutually and without recourse to legal remedies.

The Government of India took note of the intention of both the parties and set up
the National Arbitration Promotion Board in July 1967, to promote voluntary
arbitration to settle industrial disputes. The Board comprises of the representatives
of the employers’ and employees’ organisations, public undertakings, and the
Central and State Governments.

(5) Wage Boards:

Wages and allowances is the main issue in industrial disputes. The Government of
India set up wage boards for various industries. The main function of wage boards
is to fix the fair wage in various industries. Upto now more than 25 wage boards in
various industries have been set up.

(6) Standing Orders:

In order to avoid frictions between employer and his workmen over the terms of
employment, the Government enacted the Industrial Employment (Standing Order)
Act 1946.

The object of the Act is to require employers to diffuse with sufficient precision,
the conditions of employment in the establishments- under him and to let the
workers know. Such conditions include conditions of recruitment, discharge,
disciplinary action, holiday, leave etc., of the workers.

This Act applies to all establishment employing 50 or more workers. In 1961, the
Act was made applicable to some other establishments employing even less than
100 workers at the instance of State Governments. Under the Act, each employer is
required to certify the standing orders by the certifying officer to make them
effective in the establishment.

(7) Joint Management Councils:

Just to make a start labour participation in management, the Government in its

Industrial Resolution 1956, decided to set up Joint Management Councils. This
step also remained ineffective and not much headway is made in this direction.
Currently, there are hardly 80 JMCs and even out of them a good number are not
effective.

These Councils have equal representative of workers and management. The main
function of these councils is to make consultation in matters relating to workers.
All matters which are subject to collective bargaining have been excluded.

(8) Other Causes:

Among these may be included the following:

(i) Almost every trade union in India is affiliated to one or the other political party.
Political parties or political ideologies govern these trade unions. Each party,
therefore, engineers strikes, gheraos and bandhs to demonstrate its political
strength. The trade union, affiliated to a party in power gets preferential treatment.

(ii) Trade Unions in India are Weak:

They, invariably, fail in safeguarding the interests of workers.

The reasons for this state of affairs are:

(a) Multiplicity of trade unions in the same industry/unit and rivalry among the
workers has destroyed the solidarity of the working class.

(b) In some undertakings, there is no union at all recognised or unrecognised. They

have not been allowed to form a union, and therefore, they are deprived of their
right of collective bargaining.

(c) The workers generally are uncertain with the activities except wages.

(d) Trade union leaders, themselves aim at fulfilling ulterior motives leading to
thwarting the attempts of trade union unity.

(iii) Political instability, Centre-State relations, general responsibility or all fronts

are reflected in industry resulting in industrial conflict.

(iv) Other potential factors such as rampant corruption in industrial and public life,
easy money, conspicuous consumption, permissive society, character crises and
genera! Break down in the national morale have brought in their train debasement
of social values and social norms— all these can and have perpetuated all kinds of
unrest, including industrial unrest.

Thus, industrial disputes are the result of so many causes. Sometimes, a number of
causes collectively contribute to the dispute. All the actors of industrial relations
viz. employers, workers and the Government in maintaining industrial peace must
try to redress any grievances before it takes form of a dispute.