What is Settlement of Disputes

Employee would be hard hits as the disputes may lead to lockouts and consequent loss of wages and even jobs. Industrial establishments are pillars of the economy and the economy is bound to collapse if industries are torn by industrial strife. The cumulative effect of all these is felt by society.

A dispute, therefore, needs to be settled as early as possible.

Various methods are available for resolving disputes.

  • Collective bargaining
  • Code of discipline
  • Grievance procedure
  • Arbitration
  • Conciliation
  • Adjudication
  • Consultative machinery

Collective Bargaining: Collective bargaining is probably the most effective method of resolving industrial disputes. It occurs when representatives of a labour union meet management representatives to determine employees’ wages and benefits, to create ot revise work rules, and to resolve disputes or violations of the labour contract. 

The bargaining is collective in the sense that the chosen representative of the employees acts as a bargaining agent for all the employees in carrying out negotiations and dealings with the management. The process may also be considered collective in the case of the corporation in which the paid professional managers represent the interests of the stockholders and the board of directions in bargaining with the union leaders. On the employer side, it is also collective in those common situations on which the companies have joined together in an employer association for purpose of bargaining with a union.

Code of Discipline: The code of discipline defines duties and responsibilities of employers and workers. The objectives of the code are:

  1. To ensure that employers and employees recognize of employers and workers.
  1. To promote constructive co-operation between the parties concerned at all levels.
  1. To secure settlement of disputes and grievances by negotiation, conciliation, and voluntary arbitration.
  1. To eliminate all form of concern, intimidation and violence in HR.
  1. To avoid work stoppages.
  1. To facilitate the free growth of trade unions.
  1. To maintain discipline in industry.

Grievance Procedure: Grievance procedure is another method of resolving disputes. All labour agreements contain some form of grievance procedure. And if the procedure is followed strictly, any dispute can easily resolved.

In the meanwhile, a grievance may be understood as an employee’s dissatisfaction or feeling of personal Injunction relating to his or her employment relationship. A grievance is generally well-defined in a collective-bargaining agreement. It is usually restricted to violations of the terms and conditions of employment. Other conditions which may give rise to a grievance are:

  • A violation of law.
  • A violation of the intent of the parties as stipulated during contract negotiations.
  • A violation of company rules.
  • A change in working conditions or past company practices.
  • A violation of health and/ or safety standards.

Arbitration: Arbitration I sa procedure in which a neural third party studies the bargaining situation, listens to both the parties and gathers information, and then makes recommendation that are binding that are binding on the parties. Arbitration I effective as a means iof resolving disputes because it is:

  • Establishment by the parties themselves and the decision is acceptable to them
  • Relatively expeditions when compared to courts or tribunals. Delays are cut down and settlements  are speeded up

Arbitration has achieved a certain degree of success in resolving disputes between the labour and the management. However it is not without its weaknesses. Some weaknesses are:

  • Arbitration is expensive. The expenditure  needs to be shared by the labour and the management
  • Judgment becomes arbitrary if there is a mistake in selecting the arbitrator.
  • Too much arbitration is not a sign of healthy HR.

Conciliation: Conciliation is a process by which representatives of workers and employers are bought together before a third party with a view to persuading them to arrive at an agreement ny mutual discussion between them. The third party may be one individual or a group of the people. The alternative name for the third party is mediators.

The industrial Disputes Act, 1947 provides for the appointment of conciliators, section 4 of the states that the appropriate government shall appoint such number of persons as it thinks fits as conciliation officers. The main duty of a conciliation officer shall be to mediate in and promote the settelment of industrial d and the natioiaputies. The other duties are:

  • To hold conciliatory procedings
  • To investigate the dispute
  • To send a report snd memorandum of settlement to the appropriate goverement
  • To send a full report to the appropriate goverement setting forth the steps taken , in case no settlement Is arrived at.

The conciliation officers shall submit his or her report within 14 days from the date of commencement of the conciliation proceeding. The act prohibits a strike or a lockout when the conciliation proceedings are in progress.

It may be stated that the conciliator has no power to force a settlement, but can work with the parties separately to determine their respective positions, explains a position more fully to the opposition points out bases fpr agreement that ,ay not have been apparent previously, helps in the search for solutions, and generally facilities to reach of an agreement.

In effect, mediators act as communications catalyst, and their effectiveness depends on their impartiality and on their capacity to win the trust of both parties.

Consultant Machinery: Towards the end, it is essential to refer to the consultative machinery set by the government to resolve conflicts. The main function of consultative machinery is to bring the parties together for mutual settlement of differences in a spirit of co-operation and goodwill. A consultative machinery operates at the plant, industry, state national levels. At the plant level, there are works committees and joint management councils. Being essentially bipartite in character, works committees are constituted as per the provisions of the Industrial Dispute Act 1947, and joint management councils are set up following the trust laid down in the Industrial Policy Resolution  1956. At the industrial level, there are wage boards and industrial committes.labour advisory boards operate at the state level there are the Indian Labour Conference (ILC) and the Standing Labour  Committee(SLC). The bodies operating at the state and national levels are tripartite in character, representing government, labour and management.