INTRODUCTION

The three methods for settlement of industrial disputes are as follows:

1. Conciliation

2. Arbitration

3. Adjudication.

Failure of the employees and the employers to sort out their differences bilaterally leads to
the emergence of industrial disputes. The Industrial Disputes Act, 1947 provides legalistic
machinery for settlement of such disputes by involving the interference of a third party. The
settlement machinery as provided by the Act consists of the three methods:

1. Conciliation
2. Arbitration
3. Adjudication

These are discussed one by one.

Conciliation:

In simple sense, conciliation means reconciliation of differences between persons.

Conciliation refers to the process by which representatives of workers and employers are
brought together before a third party with a view to persuading them to arrive at an agreement
by mutual discussion between them. The alternative name which is used for conciliation is
mediation. The third party may be one individual or a group of people.In view of its objective
to settle disputes as quickly as possible, conciliation is characterised by the following
features:

(i) The conciliator or mediator tries to remove the difference between the parties.

(ii) He/she persuades the parties to think over the matter with a problem-solving approach,
i.e., with a give and take approach.

(iii) He/she only persuades the disputants to reach a solution and never imposes his/her own
viewpoint.

(iv) The conciliator may change his approach from case to case as he/she finds fit depending
on other factors.
According to the Industrial Disputes Act 1947, the conciliation machinery in India consists of
the following:

1. Conciliation Officer
2. Board of Conciliation
3. Court of Enquiry

A brief description of each of these follows:

Conciliation Officer:

The Industrial Disputes Act, 1947, under its Section 4, provides for the appropriate
government to appoint such number of persons as it thinks fit to be conciliation officers.
Here, the appropriate government means one in whose jurisdiction the disputes fall.

While the Com-missioner /additional commissioner/deputy commissioner is appointed as

conciliation officer for undertakings employing 20 or more persons, at the State level,
officers from central Labour Commis-sion office are appointed as conciliation officers, in the
case of Central government. The conciliation officer enjoys the powers of a civil court. He is
expected to give judgment within 14 days of the commencement of the conciliation
proceedings. The judgement given by him is binding on the parties to the dispute.

Board of Conciliation:

In case the conciliation officer fails to resolve the dispute between the disputants, under
Section 5 of the Industrial Disputes Act, 1947, the appropriate government can appoint a
Board of Conciliation. Thus, the Board of Conciliation is not a permanent institution like
conciliation officer. It is an adhoc body consisting of a chairman and two or four other
members nominated in equal numbers by the parties to the dispute.

The Board enjoys the powers of civil court. The Board admits disputes only referred to it by
the government. It follows the same conciliation proceedings as is followed by the
conciliation officer. The Board is expected to give its judgment within two months of the date
on which the dispute was referred to it.

In India, appointment of the Board of Conciliation is rare for the settlement of disputes. In
practice, settling disputes through a conciliation officer is more common and flexible.

2. Arbitration:
Arbitration is a process in which the conflicting parties agree to refer their dispute to a neutral
third party known as ‘Arbitrator’. Arbitration differs from conciliation in the sense that in
arbitration the arbitrator gives his judgment on a dispute while in conciliation, the conciliator
disputing parties to reach at a decision.

The arbitrator does not enjoy any judicial powers. The arbitrator listens to the view points of
the conflicting parties and then gives his decision which is binding on all the parties. The
judgment on the dispute is sent to the government. The government publishes the judgment
within 30 days of its submission and the same becomes enforceable after 30 days of its
publication. In India, there are two types of arbitration: Voluntary and Compulsory.

3. Adjudication:

The ultimate legal remedy for the settlement of an unresolved dispute is its reference to
adjudica-tion by the government. The government can refer the dispute to adjudication with
or without the consent of the disputing parties. When the dispute is referred to adjudication
with the consent of the disputing parties, it is called ‘voluntary adjudication.’ When the
government herself refers the dis-pute to adjudication without consulting the concerned
parties, it is known as ‘compulsory adjudication.

The Industrial Disputes Act, 1947 provides three-tier machinery for the adjudication of
indus-trial disputes:

1. Labour Court

2. Industrial Tribunal

3. National Tribunal
Boards of Conciliation, Section 5 of Industrial Disputes Act 1947

According to Section 5 which is reproduced below, an appropriate government may

constitute a board of conciliation, if an occasion arises for promoting the settlement of
industrial disputes

Section 5(1) –
The appropriate Government may as occasion arises by notification in the official
Gazette constitute a Board of Conciliation for promoting the settlement of an
industrial dispute.
(2) A Board shall consist of a chairman and two or four other members, as the
appropriate government thinks fit.
(3) The chairman shall be an independent person and the other members shall be
persons appointed in equal numbers to represent the parties to the dispute and any
person appointed to represent a party shall be appointed on the recommendation of
that party:
Provided that, if any party fails to make a recommendation as aforesaid within the
prescribed time, the appropriate Government shall appoint such persons as it thinks fit
to represent that party.
(4) A Board, having the prescribed quorum, may act notwithstanding the absence of
the chairman or any of its members of any vacancy in its number:
Provided that if the appropriate Government notifies the Board that the services of the
chairman or of any other member have ceased to be available, the Board shall not act
until a new chairman or member, as the case may be, has been appointed.

Legislation

Section 6 of the repealed Trade Disputes Act of 1929, provided for the Constitution of boards
while s 7 laid down the duties of the boards. The present section is based on s 6 of the
repealed Act of 1929.

The function of Board is similar to that of a conciliation officer. However, there are some
dissimilarities also.
The procedure and powers have been laid down in Section 13 of the Act.

Section 20 provides the date of commencement and conclusion of proceedings. Section 20

also provides for the form of report of Board requiring publication under Section 17.

Constitution

Constitution of the Board is tripartite in its character and is presided over by the chairman
with and other two or four members as the appropriate members think fit. The chairman shall
be an independent person and the other persons shall be appointed in equal numbers to
represent the parties to the dispute. The person appointed to represent a party shall be
appointed on the recommendation of that party. If a party fails to make a representation
within the prescribed time the appropriate government shall appoint such persons as it thinks
fit to represent that party.

For conducting the proceedings, it is not necessary that all members may be present. If there
is quorum, the work shall continue, even in the absence of the chairman or any of the
members. In case the services of the chairman or any member are not available and the
government notifies accordingly the work shall be suspended till the new appointment is
made. The quorum necessary to constitute a sitting of a board must be two where the number
of members is three and three where number of members is five.

Duties of the Board of Conciliation

Section 13 of the Industrial Dispute Act deals with the duties Board of Conciliation. The
procedure before a Board of Conciliation is not like that before a conciliation officer, instead
it is like the proceedings before a Court of Law. Therefore, the proceedings before a Board of
Conciliation are judicial in nature and are amenable to a writ of certiorari. The appropriate
government is not empowered under this section to constitute a board for the purpose of
referring criminal proceedings.

 It shall be the duty of the board to take all necessary steps to bring about the
settlement of the dispute. For the purpose of settlement, the board must in such a
manner as it thinks fit and without delay investigate the dispute and all matters
affecting the merit and the right of the settlements thereof. It must do all other things
as it thinks fir for the purpose of fair and amicable settlement of the dispute.
 The board must send a report to the appropriate government together with a
memorandum of settlement which is arrived at in the course of the conciliation
proceedings. If no settlement is possible, the appropriate government must at the end
of the investigation, send to the appropriate government a full report setting forth the
proceedings and steps taken by it for ascertaining the facts and circumstances of the
dispute together with a full statement of its recommendations for the determination of
the dispute. Unlike the conciliation officer the board has power to make
recommendations for determination of the dispute in the report submitted to the
appropriate government.
 The report must be submitted within 2 months of the date on which the dispute was
referred to it or shorter period as may be fixed by the appropriate government. The
appropriate government may extend the time not exceeding 2 months in the aggregate
for the submission of report, it may be extended by agreement of both parties, in
writing.
 If, on the receipt of a report under sub- section (3) in respect of a dispute relating to a
public utility service, the appropriate Government does not make a reference to a
Labour Court, Tribunal or National Tribunal under section 10, it shall record and
communicate to the parties concerned its reasons therefor.
 With regard to the reporting of the outcome of the conciliation proceedings, the
procedure before a conciliation officer and a Board, the commencement of the
proceedings and the actual nature of the proceedings are also different. After a Board
of Conciliation is constituted, the dispute is referred to it by the appropriate
Government.

Procedure followed by the Board of Conciliation

 At its first sitting the chairman of the Board calls upon the parties in such an order as
he thinks fit to state their case (Rule 21).
 The sitting of a Board are held at such time and place as its chairman may fix. After
so fixing the sittings of the Board the chairman informs the parties to the dispute the
time and place of the sittings (Rule 13).
 A Board meeting is held only if there is the prescribed quorum, which depends upon
the size of the Board (Rule 14).
  A Board may accept, admit or call for evidence at any stage of the proceedings before
it, in a manner it thinks fit (Rule 15).
 Or a member of a board may, for the purpose of inquiry into the dispute, after giving a
reasonable notice, enter the premises occupied by the employer concerned. The Board
may issue summons in Form D requiring any person to produce before it any books or
papers or other documents and things in the possession or under the control of such
persons in any way relating to the dispute.
 A Board may adjourn its sittings. In all these sittings in endeavours to bring about a
settlement of the dispute referred to it way of investigating the various matters
connected with the dispute and inducing the parties to come to a fair and amicable
settlement.
 The proceedings before Board are held in public except when the Board, at any stage,
decides to examine a witness or to hold the proceedings in camera.

Powers of the Board of Conciliation

 The Board of conciliation acts in a judicial capacity and enjoy more powers then
conciliation officers. Under the act, every Board of conciliation enjoys the same
powers as are vested in a civil court under the Code of Civil Procedure, 1908, when
filing a suit.
 It can enforce the attendance of any person and examine him on oath, compel the
production of documents and material objects, issue commission for examination of
witness discovery and inspection, grant adjournment; and receive evidence taken on
affidavit.
 The proceedings are normally held in public but the Board may at any stage direct
that any witness be examined or proceeding be held in camera.
 The Board is empowered subject to the rules in this behalf, to follow such procedure
as they any think fit.
 The rule provide for place and time of hearing of the industrial dispute by the
adjudication or arbitration authorities as the care any be administrative of oath by the
adjudication or arbitration authorities, citation or description of the parties in certain
cases, the ‘issuance of notices to the parties, the circumstances when the Board can
 proceed ex-parte and correction of clerical mistakes or errors arising from accidental
slip or omission in any award.
 The Board also has to keep certain matters confidential in the award.
 The Board can accept, admit or call for evidence it any stage of the proceeding before
them and in such manner or it thinks fit.
 The representatives of the parties have the right to examination, cross examination
and addressing the Board when any evidence has been called.
 The witnesses who appear before a Board are entitled for express in the same way as
witness in the civil court.
 It a settlement is arrived at the Board should and report to the appropriate
Government along with a memorandum of the settlement signed by the parties to the
disputes, if no settlement is reached, the Board must send a full report together with
its recommendation for the determination of the dispute, section 13(2) of the
Industrial Dispute Act, 1947.
 In case of failure of settlement by a Board, the appropriate government may refer the
dispute to a Labour Court, Tribunal or National Tribunal just as after the receipt of the
failure report by a conciliation officer. The Government is not bound to make a
reference. But where the Government does not make a reference in a public utility
services after receiving a report from a Board it must record and communicate to the
parties concerned its reason for not doing so, Section 13(4) of the Industrial Disputes
Act, 1947.
 A board has to submit its report within two months of the date (on which the dispute
was referred to it) or within such shorter period, as may be fixed by the appropriate
Government. The time limit for the submission of a report can be extended by the
Government or by agreement in writing of all the parties to the dispute.

Similarities and Dissimilarities in the Functions of Conciliation Officers and Boards

There are certain similarities and dissimilarities in the Constitution and functions of the
conciliation officers and the boards,

(i) Similarities

(a) Power to Enter Premises

Both the conciliation officer and members of a board have the power to enter the premises
occupied by any establishment to which the dispute relates after giving reasonable notice for
the purpose of inquiry into any existing or apprehended industrial dispute.

(b) Public Servants

The conciliation officers as well as the members of the board are to be deemed to be public
servants within the meaning of s 21 of the Indian Penal Code.

(c) Settlement Report

In case of settlement arrived at during the conciliation proceedings before the conciliation
officers as well as the board, both have to submit their reports to the appropriate government.

(d) Failure Report

The conciliation officer as well as the board have to submit the failure report to the
appropriate government if no settlement is arrived at.

(e) Duty to Promote Settlement

The conciliation officers as well as the boards are charged with the same duties of promoting
settlement of industrial disputes.

(f) Powers under Section 33

The powers of the conciliation officers as well as of the board to grant or withhold approval
or permission under s 33 to the action of the employer discharging or dismissing a workman
during the pendency of conciliation proceedings are similar.

Dissimilarities

(a) Powers regarding Documents and Witnesses

The board has powers:

(1) to enforce the attendance of any person and examining him

on oath;
(2) to compel the production of documents and material objects;
(3) to issue commissions for examination of witnesses; and
(4) in respect of other matters that may be prescribed, and every
 inquiry or investigation by a board is judicial proceeding within the meaning of
Sections 193 and 228 of the Indian Penal Code.

A conciliation officer, however, has only the power to enforce attendance of any person for
the purpose of examination of such person or to compel the production and inspection of
documents.

(b) Procedure

The board has to follow the procedure like the courts and tribunals and subject to any rules
that may be made in this behalf; whereas the conciliation officers are not bound by any
procedural formalities, and the inquiry by a conciliation officer is of informal

nature.

(c) Initiation of Conciliation Proceedings

A conciliation officer can initiate proceedings in case of the public utility service only after a
notice under s 22 has been given, and in any other case, he may in his discretion, hold the
conciliation proceedings where an ‘industrial dispute’ is existing or is apprehended. But the
conciliation proceedings before a board can commence only after a reference has been made
to it under s 10(1) of the Act by the ‘appropriate government’.

(d) Statement in Failure Report

The conciliation officer in his ‘failure report’ has only to state the facts and circumstances of
the dispute along with the reasons on account of which, in his opinion, the settlement could
not he arrived at whereas the board in its report has to state:

1. the steps taken by it for ascertaining the facts and

circumstances relating to the dispute and for bringing about a settlement thereof;
2. statement of facts and circumstances relating to the dispute
and for bringing about a settlement thereof;
3. its findings on the facts and circumstances of the dispute;
4. the reasons on account of which, in its opinion, the settlement
could not be arrived at; and
5. its recommendations for the determination of the dispute.
(e) Publication for Settlement or Failure Report

The settlement recorded or the failure report submitted by the board under s 13(3) is required
to be published under s 17; whereas no such publication is required for the settlement
recorded or the failure report submitted by the conciliation officer under s 12(4) of the Act.

(f) Period for Submission of Report

The period for submission of the conciliation officers’ report is 14 days from the date of
commencement of the proceedings or any other shorter period that may be fixed by the
appropriate government and this period may be extended by agreement of the parties in
writing whereas the period for submission of the report of the board is two months from the
date of reference of the dispute to it or a shorter period that may be fixed by the appropriate
government and this period may be extended by agreement of all the parties in writing; or by
the government for further time not exceeding two months in aggregate.

(g) Commencement and Conclusion of Conciliation Proceedings

Before a conciliation officer, the conciliation proceedings commence on the date on which a
notice of strike or lockout under s22 is received by him in case of a public utility concern and
in any other cases on the date indicated by him in formal notice under r 10 of the Central
Rules or the corresponding state Rule, and conclude on the date of signing of the
memorandum of settlement by the parties and in case of ‘no settlement’, on the date on which
the appropriate government receives the report of the conciliation officer except in the case of
a reference under s 10(1) of the Act being made during the pendency of the conciliation
proceedings in which case the conciliation proceedings conclude on the date on which the
reference is made. Before the board, the proceedings commence on the date the dispute is
referred to it under s 10(1) (a) and conclude on the date on which the report of the board is
published under s 17 of the Act.

(h) Number of Members

A conciliation officer has to act singly for bringing about the settlement of the industrial
dispute between the parties while the board consists of a chairman and two or four other
members.
Difference between the board and court.

The main difference between the board and the court lies in the object with which these are
constituted. In the case of the board the fundamental object is to promote the settlement of am
industrial dispute by Persuading the parties to come around the table and discuss and thrash
out the differences in an amicable environment without being coerced by the board. On the
other hand, the primary object of the court is to enquire into and reveal the causes of an
industrial dispute. It is no more than a fact-finding machinery. It does not core much for the
promotion of the settlement of dispute as the board does.

In General manager, Security paper mills, Hoshangabad v. R.S Sharma1, the Supreme
court observed that “a settlement arrived at in the course of conciliation proceedings under
that Act shall be binding on all parties to the industrial dispute, where a party referred to in
clause is an employer, his heirs, successors, or assigns in respect of the establishment to
which the dispute relates and where a party referred to in clause is comprised of workmen,
all persons who were employed in the establishment of part.”

In M/S Tata Chemicals Ltd. V. The workmen employed under M/s Tata Chemicals Ltd2,
the supreme court held “if a settlement regarding a certain demand is arrived at otherwise
during the conciliation proceeding between the employer and the union representing majority
workmen the same is not binding on the other union whom represents minority workmen and
who was not a party to a settlement.”

In Sirsilk Ltd v. Government of Andhra Pradesh 3the Supreme court observed that, “there is
no doubt that a settlement of the dispute between the parties themselves is to be preferred
where it can be arrived at to industrial adjudication as the settlement is likely to lead more
lasting peace than an award as it is arrived at by the free will of the parties and is a pointer to
there being goodwill between them.”

1
1986 I LLJ 432 SC
2
AIR 1978 SC 828
3
1963 II LLJ 647 SC