CONCILIATION

under
INDUSTRIAL DISPUTES ACT

Diploma in  Labour Law & Industrial Relations

NATIONAL INSTITUTE OF LABOUR STUDIES

LECTURE BY
SANJAYA WILSON JAYASEKERA, LL.B, LL.M,
ATTORNEY-AT-LAW
Industrial Conciliation in Sri Lanka
• Employer
• Employee
• Agent
• Industrial Dispute
• Methods of dispute resolution
• Conciliation
• Procedure
• Significance
• National and International experience.
ADR
Alternative Dispute Resolution (ADR) mechanisms
• Arbitration,
• Conciliation,
• Collective Agreements
• Industrial Courts
are utilized for settlement of labour disputes
Definitions: Section 48 IDA
• “industry” includes
(a) trade, business, manufacture and agriculture, any undertaking or
occupation by way of trade, business, manufacture or agriculture, and
any branch or section of trade, business, manufacture or agriculture;
(b) service, work or labour of any description whatsoever performed by
person in the employment of a local authority, or of a corporation
established by or under any written law for carrying on an undertaking
whether for the purpose of trade or otherwise;
(c) every occupation, calling or service of workmen, and
(d) every undertaking of employers;
• “industrial dispute” means any dispute or difference between an
employer and a workman or between employers and workmen or
between workmen and workmen connected with the employment or
non-employment, or the terms of employment, or with the conditions
of labour, or the termination of the services, or the reinstatement in
service, of any person, and for the purpose of this definition
“workmen” includes a trade union consisting of workmen;
• “employer” means any person who employs or on whose behalf any
other person employs any workman and includes a body of employers
(whether such body is a firm, company, corporation or trade union) and
any person who on behalf of any other person employs any workman;
• “workman” means any person who has entered into or works under a
contract with an employer in any capacity, whether the contract is
expressed or implied, oral or in writing, and whether it is a contract of
service or of apprenticeship, or a contract personally to execute any work
or labour,and includes any person ordinarily employed under any such
contract whether such person is or is not in employment at any particular
time, and includes any person whose services have been terminated.
What is Conciliation?
• To conciliate is to bring together
• Conciliation is “art of gentle persuasion”
• “Conciliation may be described as the practice by which the services of a neutral
third party are used in a dispute as a means of helping the disputing parties to
reduce the extent of the differences and to arrive at an amicable settlement or
agreed solution. It is a process of rational and orderly discussion of differences
between the parties to a dispute under the guidance of the conciliator.”
• Alfred Stenger: “Conciliation implies a compromise- a basically voluntary
process-the success of which depends on the citizen’s willingness to relinquish
certain individual liberties as part of his duty to and respect for fellow men and to
accept the other party as equal partner in conciliation proceedings”.
• Frances Kellor:“the act of a third party bringing together the two parties in
dispute for negotiation and for settlement of the dispute”.
• Michael Salmon: “a strategy wherein the third party supports the
direct bipartite negotiation process by assisting the parties to identify
the cause and the extent of their differences, to establish alternative
solutions and their various implications and to develop and agree to a
mutually acceptable settlement”.
• Wood: “the Conciliator is a catalyst aiming to lead the parties to an
agreement without himself interfering in the actual decision making”.
Significance and salient features:

• The conflict between capital and labour is inherent in industrial

society.
• The resolution of conflict depends upon the historical development of
industrialization, cultural and national characteristics of the society.
So, every society must find its own solution.
• Conciliation is an initiation at the threshold of the industrial disputes
wherein the parties with sense of responsibility must prepare
themselves with free mind and participate in the conciliation
proceedings.
• State intervention in Industrial dispute resolution – a deviation of
doctrine of Laissez Faire in the industrial relations field.
• Conciliation is a practice whereby the third party provides assistance to the
parties in the course of negotiations and helps them to reach an agreement.
• It is a process of rational and orderly discussion of differences between the
parties to a dispute under the guidance of the conciliator.
• Finding solutions by peaceful means. Parties take the decision on settlement
• Commissioner or Authorized officer (State as third party) can only
recommend terms.
• Lawyers are not permitted to represent parties to the dispute at conciliation
–direct negotiation and compromise intended
• Good faith and Iberima fide paramount
• Parties can live and work together in an environment of peaceful
coexistence – No winners or losers.
• Assumed to be cost free and less time consuming: immediate advantages
The Concept of Conciliation
• Conciliation is a method of peacemaking, an ‘assisted –bargaining process’
• Conceptually, conciliation can be treated as a psychological therapy given to the
disputing parties.
• It requires two sets of conditions: objective and subjective.
• The objective conditions: nature of issues involved in industrial disputes, local
experience of collective labour relations, the prevailing system of collective
bargaining, and the importance accorded to conciliation in the national system of
settling disputes.
• The subjective conditions: the qualification, personal qualities, and commitment of a
conciliator in settling a dispute.
• Conciliator has to play a major role in averting industrial strikes making
continuous efforts and apply his own knowledge, qualification and ability. Must also
work within the framework of law.
• Conciliator plays the role of a social psychologist
• “Conciliation Officers have ... no statutory authority to impose their will on the
representatives of the workmen or employers. They through various techniques and
strategies of mediation, intervene to avert lockouts and strikes, to restore peace and
harmony” : P.D. Shenoy.
• The essence of conciliation procedure is the “exertion or channelizing of pressures
on one or both of the parties to a dispute to obtain the necessary concessions for the
settlement of their differences” : G. M. Kothari.
• Amicable settlement brings harmony in the establishment and satisfaction among the
workmen.
• Conciliator’s aim should be to reconcile the hostile attitudes of the disputants, strike
a balance between the two opposing outlooks and prepare a ground where the labour
and the management can shake their hands happily and hope to live in happiness at
least for some time to come.
• The concept of conciliation is not different from mediation and collective
bargaining. Conciliation and mediation are used interchangeably in many countries.
But, do not mean the same. Mediation is a facet of conciliation, differentiated only
by the degree of initiative taken by the third party, who is more active in mediation.
• Attributes of Conciliator:
“He should at all times be able to treat the parties with fairness using
good language and address, avoiding words carrying double meaning.
Another attribute is the ability to develop a balanced judgement,
independant enough to resist undue pressure from employers and trade
unions. Above all, the conciliator needs to have committed belief in the
value of conciliation coupled with equal commitment of never feeling
exhausted whilst being in the process of conciliation” S.H.Siripala,
Industrial Disputes and Conciliation:Sri Lankan Experience.
• Conciliator’s duty is not judicial, but administrative: Royal Culcutta
Golf Club Mazdoor Union Vs. State of West Bengal(AIR1956cal 550)
IDA Section 3 - Reference for Conciliation
• 3. (1) Where the Commissioner [includes “Labour Officer” S.2(2)] is
satisfied that an industrial dispute exists in any industry or where he
apprehends an industrial dispute in any industry, he may:
(a) if arrangements for the settlement of disputes in that industry have been
made in pursuance of any agreement between organizations representative
respectively of employers and workmen engaged in that industry, cause the
industrial dispute to be referred for settlement by means of such
arrangements, or
(b) endeavour to settle the industrial dispute by conciliation, or
(c) refer the industrial dispute to an authorized officer[S.48] for settlement by
conciliation, or
IDA Part III(B): SETTLEMENT BY CONCILIATION

Duties and powers of the Commissioner or an authorized officer for purposes of conciliation and
time limit for conculsion of investigations into industrial disputes:
• Section 11:
(1) Where, in accordance with the provisions of section 3, the Commissioner himself endeavours
to settle an industrial dispute by conciliation or an industrial dispute is referred to an authorized
officer for such settlement, it shall be the duty of the Commissioner or that officer to endeavour to
effect a settlement after such investigation as he may consider necessary of the matters in dispute;
and for the purpose aforesaid it shall be lawful for him to take all such steps as he may deem fit
for inducing the parties to the dispute to come to a fair and amicable settlement of the dispute.
(2) Subject to such regulations as may be made under section 39 (1)(f) of this Act in respect of
procedure, the Commissioner or an authorized officer conducting an investigation into an
industrial dispute under this Part may lay down the procedure to be observed by him in the conduct
of such investigation.
(3) Every investigation for the purpose of settling an industrial dispute by conciliation shall be
concluded within one month after the commencement of such investigation: Provided that the
Commissioner may extend the period within which such investigation shall be concluded.
Section 12 (Conciliation: Section 12 Settlements)
(1) If the Commissioner or an authorized officer succeeds in settling an industrial
dispute, a memorandum setting out the terms of settlement shall be drawn up by
the Commissioner or the officer and shall be signed by both the parties to the
dispute or by the representatives of each party thereto. (Memorandum of
Settlement)
(2) Reference shall be made in every memorandum of settlement drawn up
under subsection (1) to the parties and trade unions to which, and employers and
workmen to whom, such memorandum relates.
(3) Where the dispute has been settled by an authorized officer, he shall transmit
forthwith to the Commissioner the memorandum setting out the terms of
settlement.
(6) The Commissioner shall forthwith cause to be published in the Gazette every
memorandum of settlement relating to an industrial dispute which in his opinion is
a major dispute.
(4) Where the Commissioner or an authorized officer, after
endeavouring to effect a settlement of an industrial dispute, fails to
effect such a settlement, such Commissioner or such officer shall, at
the close of his investigation, prepare a full report regarding the
dispute and shall set out in such report the steps taken by him for its
investigation and settlement, and his recommendation for the
settlement of the dispute.
In the settlement recommended reference shall be made to the parties
and trade unions to which, and the employers and workmen to whom,
such settlement relates.
(5) Where a report has been prepared by an authorized officer under
subsection (4), he shall forthwith transmit such report to the
Commissioner.
12(7) (a) Where a report is prepared under subsection (4), then, if in
endeavouring to settle the industrial dispute to which that report relates
the officer who prepared that report had not submitted his
recommendation for the settlement of that dispute to both the parties or
to the representatives of both the parties to that dispute for their
consideration, the Commissioner shall transmit a copy of that report to
such parties or representatives and shall require them to state in
writing to him, within fourteen days after such date as he shall specify
in that behalf, whether they accept or reject the settlement recommended
in that report. If no reply is received from such parties or representatives
within the aforesaid fourteen days, such settlement shall be deemed to
be accepted by them.
12(7)(b) Where the recommended settlement referred to in paragraph (a) of this
subsection is accepted or is deemed under that paragraph to be accepted by both
the parties to the industrial dispute to which that settlement relates or by their
representatives
(i) the Commissioner shall cause to be published in the Gazette the report in
which that settlement is set out and the statement of acceptance made by
such parties or representatives or, if the acceptance is deemed under the
aforesaid paragraph (a), a statement by the Commissioner that the acceptance
is so deemed, and
(ii) that settlement shall have effect as though it were a settlement signed by both
the parties to the industrial dispute to which that settlement relates or by their
representatives, and accordingly section 13 shall apply to the report in which
that settlement is set out as though that report were a memorandum of
settlement, and section 14 shall apply to that settlement as though the
reference in that section to section 12(2) were a reference to section 12(4).
12(7)(c) Where the recommended settlement referred to in paragraph (a)
of this subsection is neither accepted nor deemed under that paragraph
to be accepted by both the parties to the industrial dispute to which such
settlement relates or by their representatives, then, if the Commissioner
is of the opinion that such report should be published, the
Commissioner shall cause such report to be published in the Gazette
together with a statement that the settlement recommended in such
report has neither been accepted nor deemed under paragraph (a) of this
subsection to be accepted by such parties or representatives.
Effective date of Settlement and period of Validity
Section 13
• Memorandum of Settlement(MoS), valid from the date of the Gazette
or from the date specified.
• MoS not published in Gazette is effective from the date of the signing
of that memorandum by the parties.
• MoS lasts untill date specified therein or ceases earlier under S.15.
Effect of Settlement by conciliation

• Section 14: Every settlement which is for the time being in force shall, for the
purpose of this Act, be binding on the parties, trade unions, employers and
workmen referred to in that settlement in accordance with the provisions of section
12(2) and the terms of the settlement shall be implied terms in the contract of
employment between the employers and workmen bound by the settlement.
• Same effect as that of a Collective Agreement.
• Contravening or not complying with agreed Terms of Settlement (ToS) is an
offence: Section 40 – same with Collective Agreements.
• No interference with the finality of Tos is permitted while in operation, “Agreement
in conciliation ...has got a Special sanctity...which the law has made bInding” :
James Warren & Co.Ltd Vs. Women [1958(2)LLJ551]
• Minister has no role to play in conciliation process. No regulation framed so far.
• Parties Are bound by the settlement.
• Employees are bound by settlement reached by their Trade Unions.
• The terms of Settlement are implied terms of the contract if employment
• Section 15: Termination: Any party, trade union, employer or workman, bound by a
settlement under this Act, may repudiate the settlement by written notice in the prescribed
form sent to the Commissioner and to every other party, trade union, employer and workman
bound by the settlement.
• With such notice settlement ceases to be effective one month after.
• Commissioner shall publish in Gazette such notice of repudiation.
• No individual member can repudiate the settlement
• A worker’s unilateral revocation is null and void.
Conciliation and Arbitration: the difference
• The dispute is referred to a third party arbitrator to decide
• Arbitration may be voluntary of manfatory
• The parties can decide who the arbitrator is in voluntary arbitration
• In mandatory arbitration, the Minister appoints
• Different, but parallel mechanisms
• WP.N.Silva in Industrial Law and Adjudication Vol I, states
conciliation procedure under IDA is more close to mediation than to a
pure conciliation procedure.
Conciliation in other Jurisdictions
• Widely used in many other countries, both in the developed and developing
countries.
• India, Australia, China, South-Africa, and the USA
• A failed mechanism in some countries, especially as delaying tactics.
E.g..Indian experience.
• In Sri Lanka conciliation through authorized officer is seldom used in past
few decades, as it is costly. Direct Conciliation through Labour Department
officers is often employed. They are generally however trained to be
enforcement officers, which is unsuitable.
• India: Industrial Diputes Act of 1947 has corresponding provisions to SL law.
Thank you.

sanjayawilson@gmail.com