Research Paper On The Use Of Alternative Dispute Resolution Mechanism In Resolving Labour And Industrial Disputes In India
Authored by - Yash Sarkar
Student at Christ (deemed to be) University, Bangalore
TABLE OF CONTENTS
Title of the Section
The ADR mechanism in Labour and Industrial Dispute in India.
In this paper the main focus of research area is the role of alternative dispute resolution and the legal regulation based on resolving the industrial dispute with respect to India. As the growing nature of industrialization creates more conflict as compared to the previous years. With the development of industrialization, the conflicts between the employees and the employers have been raised. It not only affects the society in nature but the impact is also visible in the commercial development. In India, cases were pending for years in a court. To resolve these issues and in this globalization and increasing the competition in market, the disputes have to be settled down quickly and effectively. Therefore, the alternative dispute resolution come into the picture to deal with the same. The legislation also has been given with respect to industrial dispute. Nevertheless, this paper will speak about the provision under the Arbitration and Conciliation Act 1996, along with the labor legislation in India. In this paper we will check upon the recent judgements, amendments and suggestion to resolve this matter thereby.
Keywords: Alternative Dispute Resolution, Industrial Dispute, Labour Dispute, Legislation in India.
Alternative Dispute Resolution, or ADR is a mechanism, the tenets of which allows people to opt for alternative methods to resolve disputes and proceedings other than the typical, and conventional style of courtroom arguments and judgements, in other words, without a trial. Some of the methods applied in ADR are namely (i) arbitration; (ii) mediation; (iii) neutral evaluation); (iv) Parenting Coordination; (v) Restorative justice, etc. Compared to traditional court proceedings, these procedures are typically more private, informal, and stress-free.
ADR frequently speeds up resolution and reduces costs. Parties in mediation have a significant say in how their own conflicts are resolved. This frequently leads to original solutions, enduring effects, higher satisfaction, and strengthened relationships.
The ability for the parties to resolve their disputes outside of customary legal / court processes is a common feature of all ADR techniques, but they are all subject to distinct set of restrictions. For instance, unlike in mediation and conciliation, where the third party's role is to encourage an amicable agreement between the parties, in negotiation there isn't a third party who steps in to help the parties reach a resolution. An arbitrator or panel of arbitrators will play a significant role in the arbitration process since they will produce the arbitration award, which is binding on the parties. In contrast, there are no binding decisions made by the third-party during conciliation or mediation.
A labour dispute is a state of disagreement over a specific issue or set of issues where there is conflict between employees and employers, or concerning a grievance expressed by either employees or employers, or concerning demands made by either employees or employers on behalf of other employees or employers.
It should be highlighted, that labour conflicts occasionally involve strikes, picketing, slowdowns, boycotts, lockouts, blacklisting, strike-breaking, or other similar actions (involving, perhaps, violations of law by representatives of one side or the other).
Legal problems frequently wind up in court when they cannot be settled between the parties. One important legal tool that workers have utilized to stop unfair labour practices and settle labour disputes is a lawsuit. Employees may use a class action lawsuit for workplace issues that affect an entire company or sector. However, alternative dispute resolution processes like arbitration and administrative adjudication are typically used to settle labour disputes outside of the courtroom.
Employees' signatures on binding arbitration agreements that govern workplace disputes are frequently required by employers. All parties to a collective bargaining agreement or other sort of workplace agreement may agree that arbitration is to be used. A private arbitrator or tribunal is typically involved in the arbitration procedure. The arbiters act as fact-finders, and an arbitration agreement governs the process, making it operate much like a court proceeding. Administrators can use quasi-judicial mechanisms like arbitration to resolve disputes, and they can act as watchdogs to make sure that the right rules and procedures are followed.
In this article, the author highlighted the importance of the role of mediation and conciliation in terms of resolving the issues of labour and employment disputes. The author speaks about the issues and challenges that have been growing in the era of industrialization and how legal authenticity has been given to resolve the dispute by the legislature in India. The article has been written well to understand the current situation and the status of labour and employment disputes in India where the author also mentioned the lacuna of the court and how the court has not dealt to resolve the matter quickly. Secondly, it’s not only the problem of the court that has the reason behind the backlog but also the consensus of the parties to believe that this mechanism is reliable and quick to resolve the dispute, in contrast to that the parties chose the court and tribunal decision as more appropriate than the mechanism of mediation and conciliation. The growth of industrialization altered the mindset or perception of the legislature, which proposed The Mediation Bill, 2021, which included 65 provisions and ten schedules, but the parliament did not approve it. The author mentioned the legal framework which dealt with understanding the concept of the rationale for mediation and conciliation in terms of resolving the dispute between Labour and Employment.
In this paper author speaks about the workplace arbitration and why do we need such mechanism where there is already existence of the traditional court to deal with this matter. In context of that the author reflects the mechanism of alternative dispute resolution in terms of achieving the settlement at one point. Where as in author also mentioned the measures to be made for an effective and unbiased nature of workplace arbitration. In present scenario many of the corporate sector has opted this mechanism including the arbitration in the future context which helps the matter to deal it quickly. Author also mentioned that the forms of mechanism which are commonly used in workplace disputes considered it to be the mediation, conciliation and arbitration. This paper not only covered the aspect of workplace arbitration in India but also focused as per the global perspective.
Author took sources to collect the data and come up with the term of “Mandatory Arbitration” where as in the contract has been formed between the employer and employees as parties to resolve the future conflict in front of the arbitrators before approaching to the court (As Per US policy) also known as Forced arbitration. Along with that author mentioned the judicial perspective in India where India follows two types of the arbitration i.e., the voluntary arbitration and mandatory arbitration. The paper has also given light on the advantages and disadvantages of workplace arbitration.
This paper deals with the provision of the Arbitration and Conciliation Act 1996 with Labour legislation in India, in which the author speaks about the rules and regulations and even the procedure which is mentioned in the act. The author has highlighted the issue as the act does not interpret which kinds of issues and disputes can be resolved under this provision and which is not, till now it is the discretion of the court. where they decide as per the suitability under the facts of the case. Nevertheless, the author mentioned that this is a concept of the Gandhian Era or before, where the matter has been solved outside the premises of the court. In the Indian context, the ADR mechanism is also described by the author wherein the disputes are resolved by the method of conciliation, arbitration, and adjudication under the Industrial dispute Act. The author specified that there are several causes of Industrial disputes such as economic causes, management causes, and political
4 Shah, Ninad, A Study to Analyze Provision of Arbitration and Conciliation in Labour Legislations in India (February
21, 2021). SSRN: https://ssrn.com/abstract=3789881 or http://dx.doi.org/10.2139/s srn.3789881
causes. It has been discovered by the author that in the current context, the labour laws in Indian legislation, there are three types of arbitration considered: Voluntary Arbitration, Compulsory Arbitration, and Final Offer Arbitration. The author specified the Binding nature of the Arbitral Award under section 18 of I.D. Act. In this paper the author mentioned the role of arbitrators and also compared it with adjudicatory authority, does he carry the same power as the presiding officer at the labour court or not, and so on. The author finds the lacuna arising in the recognition of trade unions as a prerequisite in some of the arbitrations under 10A. As per the present situation, the legislation has not emphasized the protection of labour and their rights and issues. It has to be discussed in the parliament to do some amendments in terms of ADR and labour legislation in India.
Use of Alternative Dispute Resolution (ADR) In Labour Disputes in India: An Analysis
In this paper, the author specified that the ADR mechanism is important in the current situation to deal with the matter of labour disputes. This paper simply clarifies that the use of the ADR mechanism is an effective and speedier means of settling disputes without hampering the reputation and relationship between employers and employees. The author also mentioned that this mechanism does not apply only in India but that international institutions also follow the same, such as the United Nations and International Labour Organization. The author also mentioned in this paper that while the outcome may not be favorable, it does help to reduce disputes. The author suggests that the ADR mechanism has to be used under the provisions given in the act. The author has found that labour disputes are very complex in nature and have to be settled with the help of any of the alternative dispute methods. As a view point of the parties, the author also mentioned the pros of the ADR mechanism in resolving the matter of labour disputes.
In this paper the author speaks about the growth of labour arbitration in India, in which the author also mentioned about mandatory arbitration as well as voluntary arbitration. The author also specifies that there is procedure which has to be followed by the parties in terms of selecting the arbitrators, seat, place and the venue. The consent of parties is must in terms to regulate the method of arbitration. In the next sub heading the author mentioned the clause for judicial review and public policy where it is explained with the help of case laws. Later on the author also mentioned that what are the consequences in terms of wrongful discharge claims of arbitration. To conclude the part of labour arbitration author specifies that there is need to amend the laws along with the changes in the procedural method of arbitration.
The idea of collective bargaining is discussed by the authors in this work. The arbitration systems of the USA and India were contrasted by the authors. As contrast to India, they discovered through their investigation, the USA employs this method well. Although labour arbitration has been implemented in India, it hasn't been able to produce the desired financial results. The Industrial Relations Code, 2020, was a new code that India introduced in 2020 to improve its industrial regulations, although labour arbitration appears to still be practiced as before because no such modification was made under this code. The authors discuss how voluntary labour arbitration operates legally in India and contrast it with other countries. The authors also discuss the causes of labour arbitration's failure in India. Additionally, the authors offer legislative and administrative reforms that can be used to improve labour arbitration in India.
In this paper, the author discusses how arbitration has developed into one of the most effective ways to settle conflicts worldwide. It is obvious that this approach has both benefits and drawbacks, particularly when arbitration is being used to settle labour law and industrial disputes in India. Along with focusing on voluntary arbitration under section 10A of the Industrial Dispute Act of 1947, the author also discussed other ways to settle disputes under the Act. In order to support the claim that class action arbitration is a worthwhile option to consider for prompt and effective resolution of disputes, it then examines the
concepts of arbitration and class action arbitration as advocated by various American judicial pronouncements to resolving industrial disputes.
In this paper the author compared two types of disputes, one is labour disputes and the other one is commercial disputes. To focus on labour dispute aspect the After all prior attempts to resolve a dispute between management and a labour union under a collective bargaining agreement have failed, the case is brought to labour arbitration by an impartial and unaligned third party. Employment mediation consists of two key components: rights arbitration and decision-making arbitration. Author also mentioned Arbitration of rights applies to labour disputes involving existing contracts, but arbitration of interests applies when those disputes involve the introduction of new contracts between a union and management.
6. The ADR mechanism in Labour and Industrial Dispute in India.
As per Indian context, the conflicts between the employees and employers are resolved with the help of conciliation, arbitration, and adjudication as per the Industrial dispute act.
ARBITRATION – INDUSTRIAL DISPUTE ACT:
In current scenario the unresolved conflicts are referred to an arbitrator by the parties, here the parties have the authorities to an arbitrator or convenience a court for his appointment. Here the person who has been convinced by the parties to resolve the matter is called as an arbitrator who is considered to be null and neutral party, the one who will decide the case as in non-biased way.
The arbitrator uses his knowledge to clear the dispute and verbally through the judgements, the arbitrators does not have plenty of powers as the judge in the court has but the dispute which has been discussed in front of the arbitrators gives his judgement in the context of the parties’ viewpoint. As soon as the arbitrators gives his decision and sent to the applicable authority and then it made implement and binding on the parties.
CONCILATION – INDUSTRIAL DISPUTE ACT
Conciliation means the action and process of ending a disagreement often by discussion between the groups or people involved in legal terms the group is considered to be parties. In the alternative dispute resolution, the conciliation means reconciliation the conflicts between the parties which are the workers and employees where both are considered to keep their interest is kept in closet while discussing the matter. Furthermore, the terminology which can be used for the conciliation is mediation as both the parties are not the best person to deal with the matter and reconcile both the parties hire their representatives and the person who will act as their representatives should be unbiased while dealing with the matter. The functions and the objectives of the hire person which is known as mediators is to resolve the issues of both the parties and the decision should be equivocal, induce the parties to acknowledge each other and find one way to resolve the matter, the mediator also helps to determine the path between two different mindset of the parties and does not inflict his perspective and to regulate this application of mind and resolving each matter own its eccentric facts and rationales and to be changed as per the case to case.
Kingfisher Airlines v. Captain Prithvi Malhotra and others
In Kingfisher Airlines v. Captain Prithvi Malhotra and Others (referred to as "Captain Prithvi Malhotra"), the arbitrability of labour conflicts first came up. The multiple labour recovery actions brought by pilots and other employees of the now-defunct Kingfisher Airlines gave rise to this case. For the purpose of recovering unpaid wages and other salary benefits, the procedures were commenced before the specially empowered labour tribunals.
By citing the arbitration clause in the employment agreements, Kingfisher Airlines challenged the labour court's authority in these proceedings. To that aim, Kingfisher submitted a request for reference to arbitration in terms of the employment agreements, invoking Section 8 of the Arbitration and Conciliation Act. The application was denied, and the labour court was still in charge of the case.
Following that, Kingfisher filed a petition with the Bombay High Court to contest the validity of the labour court's order. The Labor Court's ruling that labour disputes were not subject to arbitration under the 1996 Arbitration and Conciliation Act was upheld by the Bombay High Court. The Court maintains that the question is whether the resolution of the claim has been exclusively reserved for adjudication by a particular court or tribunal for reasons of public policy, rather than simply whether the claim being urged is in personem or in rem. The Court maintains that the Industrial Conflicts Act of 1947's judicial fora were established specifically for the purpose of resolving labour and industrial disputes. By referencing both the Act's preamble and the plan for resolving labour disputes, the Court concludes that this view is supported by compelling public policy considerations.
ADR Mechanism: with reference to above case the court denied that there was no as such provisions given under the Arbitration and Conciliation Act 1996 which resolve the matter regarding the petition made by the kingfisher.
Uttarakhand Purv Sainik Kalyan Nigam Ltd. Vs. Northern Coal Field Ltd
The decision was based on the doctrine of kompetenz-kompetenz (section 16 of the Arbitration and Conciliation Act, 1996) and the intent of the legislative intent to restrict judicial intervention at pre-reference stage. It observed that once a party has been appointed, all objections and issues are to be decided by the arbitrator.
According to the Supreme Court, the question of limitation is one of jurisdiction and should be resolved by the arbitrator in accordance with Section 16 of the Arbitration Act, not the High Court at the preliminary stage. The arbitrator will resolve all disputes, including those regarding jurisdiction, once the arbitration agreement is not in question, the court noted.
ADR Mechanism: Under the provision of section 16 of the Arbitration and Conciliation Act 1996, it clarifies that subject matter of arbitration can be deal by its own act, the court cannot intervene unless the consent of parties is there.
Hindustan Construction Company Limited & Anr. Vs. Union of India & Ors15
Section 87 of the Arbitration & Conciliation Act, 1996 (Arbitration Act) has been declared invalid under Article 14 of the Indian Constitution by a three-judge panel of the Hon'ble Supreme Court, which is made up of Hon'ble Mr. Justices R.F. Nariman, Surya Kant, and V. Ramasubramanium.
The Arbitration and Conciliation (Amendment) Act, 2015 (2015 Amendment) is incompatible with Section 87 of the Arbitration Act, and it also invalidates the ratio set forth in the Board of Control for Cricket's most recent ruling in India v. Kochi Cricket Pvt. Ltd. The Bench noted that the 2015 Amendment and the Arrangement Act's general design are at odds with the meaning and purpose of Section 87.
As a result, the Supreme Court reinstated Section 26 of the 2015 Amendment, and the ruling in Board of Control for Cricket in India Vs. Kochi Cricket Pvt. Ltd. remains the guiding principle for assessing whether the 2015 Amendment is applicable.
ADR Mechanism: with the consecutive amendments which has been done under the act, it signifies that there was lacuna in terms of dealing the matters. The amendment is considered to be necessary in such subject matters.
In light of the rule established in Section 3G (5) of the National Highways Act of 1956 (NH Act), which calls for the appointment of arbitrators by the central government, the Supreme Court ruled that an application under Section 11 of the Arbitration & Conciliation Act, 1996 (Arbitration Act) shall not be maintainable.
In relation to land compensation disputes arising under the NH Act, the Supreme Court noted that the use of the term "subject to" in Section 3G(5) of the NH Act clearly indicates that the NH Act's provisions will take precedence over the Arbitration Act.
16 2019 SCC Online SC 1102
It held that, because the power to appoint an arbitrator is solely vested in the central government under Section 3G(5) of the NH Act, which is a special enactment, the application filed under Section 11(6) of the Arbitration Act for appointment of an arbitrator was not maintainable, and the provisions of the Arbitration Act could not be invoked for the purpose.
ADR Mechanism: it has been noted that where an arbitration clause has already been given under the particular act which deals with the appointment of arbitrators, it is considered as Section 11 of the Arbitration and Conciliation Act 1996 can be overlap by that act and hence not maintainable.
After receiving parliamentary approval, the Arbitration and Conciliation (Amendment) Act, 2021 is regarded as having entered into force on November 4, 2020. The Amendment Act has aimed to address the problem of corrupt practices in obtaining contracts or arbitral awards, as discussed in the declaration of aims and reasons.
If the Court determines that fraud or corruption was used to influence or otherwise alter the making of an arbitral award, Section 36(2) of the Arbitration and Conciliation Act, 1996 stipulates that the award may be set aside. The Act provided that the parties to an arbitration could approach the Court to submit an application contesting such award before the Amendment Act was passed.
A proviso to Section 36(3)  has been added by the Arbitration and Conciliation (Amendment) Act, 2015, and is presumed to be in effect as of October 23, 2015. There is a worry that certain parties would take advantage of the proviso to prolong the enforcement of an arbitral ruling to their own benefit. The Amendment Act, in turn, has changed the way applications submitted under Section 34 alleging fraud are handled significantly from the previous position.
The Court further ruled that regardless of whether the arbitral or court procedures started before or after the 2015 Amendment took effect, the amendment to Section 36(3), as indicated above, shall have retrospective effect and apply to all cases arising out of or in relation to arbitral proceedings.
By way of an amendment to the Act, Section 43J of the Amendment Act has been repealed and replaced with a new section18. The qualifications, experience, and standards for accreditation of arbitrators under the recently added Section 43J will be as outlined in the
Eighth Schedule of the 2019 Amendment19. An arbitrator was required to meet a long list
18 Section 3, the Arbitration and Conciliation (Amendment) Act, 2021 stated that for section 43J of the principal Act, the following section shall be substituted, namely: –– “43J. The qualifications, experience and norms for accreditation of arbitrators shall be such as may be specified by the regulations.”.
19The Eighth schedule, the Arbitration and Conciliation (Amendment) Act, 2019 stated that Qualifications and Experience of Arbitrator A person shall not be qualified to be an arbitrator unless he— (i) is an advocate within the meaning of the Advocates Act, 1961 having ten years of practice experience as an advocate; or (ii) is a chartered accountant within the meaning of the Chartered Accountants Act, 1949 having ten years of practice experience as a chartered accountant; or (iii) is a cost accountant within the meaning of the Cost and Works Accountants Act, 1959 having ten years of practice experience as a cost accountant; or (iv) is a company secretary within the meaning of the Company Secretaries Act, 1980 having ten years of practice experience as a company secretary; or (v) has been an officer of the Indian Legal Service; or (vi) has been an officer with law degree having ten years of experience in the legal matters in the Government, Autonomous Body, Public Sector Undertaking or at a senior level managerial position in private sector; or (vii) has been an officer with engineering degree having ten years of experience as an engineer in the Government, Autonomous Body, Public Sector Undertaking or at a senior level managerial position in private sector or self-employed; or (viii) has been an officer having senior level experience of administration in the Central Government or State Government or having experience of senior level management of a Public Sector Undertaking or a Government company or a private company of repute; (ix) is a person, in any other case, having educational qualification at degree level with ten years of experience in scientific or technical stream in the fields of telecom, information technology, Intellectual Property Rights or other specialised areas in the Government, Autonomous Body, Public Sector Undertaking or a senior level managerial position in a private sector, as the case may be General norms applicable to Arbitrator (i) The arbitrator shall be a person of general reputation of fairness, integrity and capable to apply objectivity in arriving at settlement of disputes; (ii) the arbitrator must be impartial and neutral and avoid entering into any financial business or other relationship that is likely to affect impartiality or might reasonably create an appearance of partiality or bias amongst the parties; (iii) the arbitrator should not involve in any legal proceeding and avoid any potential conflict connected with any dispute to be arbitrated by him; (iv) the arbitrator
of requirements outlined in the Eighth Schedule, which included, among other things, being an advocate, chartered accountant/cost accountant, company secretary, officer with an engineering degree, and having a degree-level education. The selection of an arbitrator was outlined in the Eighth Schedule of the Arbitration and Dispute Settlement Procedures and Privileges (Eighth Schedule), who had to be someone with a well-known track record for fairness, integrity, and objectivity. In each issue brought to him for resolution, an arbitrator must be able to render a fair and enforceable arbitral award.
It has been observed that the Industrial Dispute Act of 1947 introduced the idea of ADR mechanisms for settling labour disputes as the country's first piece of legislation. The alternative dispute resolution considered to be effective and speedy meanwhile it has been noticed that not all the matters of labour dispute can be resolved by this mechanism but it helps to reduce the dispute and not affect the relation at large extent.
In respect of Industrial and Labour Disputes between parties there are plenty of redressed mechanism mentioned in the Act, but after calculating all the pros and cons likewise the cost, deadlines, efficiency, dispute resolution and adjudication stand it is considered to be the convenient approach to settle down any kind of industrial and labour dispute through the arbitration. Considered it to be the most effective and efficient and less time consuming tool with the positive outcome as win-win situation for all the respected parties.
India, wherein we know the courts are burdened with plenty of cases especially in labour dispute which took years to resolve the matter, the settlement dispute help us to resolve the matter in a speedily manner.
should not have been convicted of an offence involving moral turpitude or economic offence; (v) the arbitrator shall be conversant with the Constitution of India, principles of natural justice, equity, common and customary laws, commercial laws, labour laws, law of torts, making and enforcing the arbitral awards; (vi) the arbitrator should possess robust understanding of the domestic and international legal system on
Regardless a plenty of lacunas in the system, the intervention of the court always been helpful in regulating the enactment governing the industrial dispute. Resolving of conflicts
under the act of Industrial Dispute 1947, as a matter of fact the mechanism in which the turmoil combined with the labour and Industry can have eradicated. By passing time India steadily enlarge with the inception of various industries, it has become mandatory to noted that the legitimate functioning of the industries in respect to expand the economics of the country. Likewise, the Industry Dispute Act 1947, plays a vital role by rendering the facts in the provisions as how to synchronize the work culture of the industry as well as also discussed about the settling down the dispute between the employee and employer.
Analyzing the fact both can be of service to industry run effectively and efficiently.
arbitration and international best practices in regard thereto; (vii) the arbitrator should be able to understand key elements of contractual obligations in civil and commercial disputes and be able to apply legal principles to a situation under dispute and also, to apply judicial decisions on a given matter relating to arbitration; and (viii) the arbitrator should be capable of suggesting, recommending or writing a reasoned and enforceable arbitral award in any dispute which comes before him for adjudication.’’
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