NATIONAL LAW INSTITUTE UNIVERSITY,BHOPAL

TRIMESTER-XII

LABOUR LAW - I

PROJECT ON

ROLE OF APPROPRIATE GOVERNMENT IN RESOLUTION OF

INDUSTRIAL DISPUTES

SUBMITTED TO:

MR. MAHENDRA SONI

ASSISTANT PROFESSOR

SUBMITTED BY:

PRASHANT VERMA

2016B.A.LL.B.98

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 ACKNOWLEDGEMENT

I would like to express my special thanks of gratitude to my professor Mahendra Soni who
gave me the golden opportunity to do this wonderful project on the topic “ROLE OF
APPROPRIATE GOVERNMENT IN RESOLUTION OF INDUSTRIAL DISPUTES”,
which also helped me in a lot of Research and knowing so many new things in relation to it. I
am really thankful to him. Also I would also like to thank my parents and friends who helped
me a lot in finishing this project within the limited time.

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Contents
LITERATURE REVIEW..............................................................................................................................4
3. The role of labour law in resolving disputes between workers.....................................................4
STATEMENT OF PROBLEM.....................................................................................................................4
INTRODUCTION.....................................................................................................................................6
Definition of “Appropriate Government”..............................................................................................6
Appropriate Government’s Power to Constitute the Adjudication Machinery.....................................7
Constitution of Labour Courts:......................................................................................................7
Power to constitute Industrial Tribunals.......................................................................................7
Central Government’s power to constitute National Industrial Tribunal..................................8
Appropriate Government’s Power to Refer Industrial Disputes for Adjudication.................................8
Nature and extent of Government’s power:.........................................................................................9
Powers of High Courts & Supreme Court to direct the Government to make a reference..................11
No Power to Withdraw, Cancel or Supersede a Reference.................................................................12
Power to amend the Order of Reference:...........................................................................................12
Appropriate Government may “at any time” refer..............................................................................13
Pendency of Conciliation Proceedings:................................................................................................13
Reference after refusal on a previous occasion:..................................................................................13
Special Powers of Central Government...............................................................................................15
Power of Central Government to refer disputes to Labour Courts and Industrial Tribunals
constituted by State Governments:..............................................................................................15
Overriding power of Central Government to refer disputes to National Tribunal:.................15
REFERENCE OF DISPUTES ON AN APPLICATION BY BOTH PARTIES...................................................16
DUTY OF THE APPROPRIATE GOVERNMENT TO SPECIFY THE PERIOD OF ADJUDICATION..............16
OBJECTIONS TO THE GOVERNMENTS’ DISCRETION TO REFER DISPUTES FOR ADJUDICATION.......17
SUGGESTIONS TO MAKE THE SETTLEMENT SYSTEM MORE EFFECTIVE...............................................18
CONCLUSION.......................................................................................................................................18

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 LITERATURE REVIEW

The researcher shall be majorly relying on the below listed scholarly articles for gaining an
understanding of the topic:

1. Sarosh Kuruvilla , “Industrial Dispute Resolution in India in Theory and Practice”

cornell university ILR school 1987
2. N O R TH B R O O K JU T E CO M PA N Y v. T H E IR W O R K M E N

Supreme Court, (1960) I L .L .J. 580, “ settlement of Industrial disputes”

3. THE ROLE OF LABOUR LAW IN RESOLVING DISPUTES BETWEEN WORKERS

Current Legal Problems, Volume 65, Issue 1, 2012, Pages 269–294,

4. “THE INDUSTRIAL DISPUTES ACT 1947” Bare act

STATEMENT OF PROBLEM

It has long been recognized that the appropriate government has right to deal with the issues of
industrial disputes, However the main issue arises in delicate matter of industrial disputes between
labour and industry and how the appropriate government can maintain balance in issues and how they
will deal with issues with the appropriate manner and ways .

HYPOTHESIS

The settlement of industrial disputes under ID Act we can understand that since to refer a dispute,
government intervention is must, because without reference by the appropriate government courts and
tribunals will not get the jurisdiction to decide the matter of dispute. There are some short comings
like if a workmen union is ideologically or politically is against the appropriate government, then
appropriate government will have the power to not refer the dispute for adjudication and hence this
will go against the interest of workers.

OBJECTIVE OF STUDY

1. To analyse how the appropriate government will deal with disputes

2. Appropriate government to constitute tribunals for dispute
3. Nature oand extent of government powers

4
 RESEARCH QUESTION

1. How the appropriate government will resolve the industrial disputes ?

2. What is the main objective of arbitration as per the industrial disputes act ?
3. What is the appropriate government ?

5
 INTRODUCTION
The government plays a vital role in the working of industrial adjudication system in India. In
addition to enacting the laws for regulating specific conditions of service, the state intervenes directly
in the process of settlement of industrial disputes through, mainly, conciliation and adjudication. The
intervention of the Government in the process compulsory adjudication is all-pervasive. Except the
actual adjudication, every other incidental function necessary for the adjudication of industrial
disputes is to be performed by the Government. From the initial function of constituting the
adjudicatory mechanisms and referring disputes to them for adjudication, up to the ultimate function
of ensuring of the implementation of the awards of these authorities are entrusted to the appropriate
government under the scheme of adjudication provided by the I.D.Act. In other words, the appropriate
Government is involved in every matter of detail in the scheme of adjudication. The rationale for this
is that it is the responsibility of the appropriate government to ensure industrial peace that is essential
for maintaining an uninterrupted production, supply and distribution of goods and services within its
territorial jurisdiction and therefore, it has to play a major and active role in the settlement of
industrial disputes.

DEFINITION OF “APPROPRIATE GOVERNMENT”

Sec.2 (a) of I.D.Act defines the term “appropriate Government ” to include both the Central and State
Governments and lays down their respective dominions in relation to industrial disputes Broadly,
Central Government is declared to be the appropriate Governments “in relation to any industrial
dispute concerning any industry carried on by or under the authority of the Central Government, ”
some specified Central Statutory Corporations, a Banking or an Insurance company, a mine, an oil
field, a cantonment board or a major port. And in relation to any other industrial dispute, the State
Government is the appropriate Government. If the Government referring a dispute for adjudication is
not the appropriate Government, within the meaning of this definition, the Tribunal to which the
dispute is referred would not get jurisdiction to adjudicate upon the dispute and even if an award is
rendered, it would be a nullity. The phrase ‘any industry carried on by or under the authority of the
Central Government’, occurring in the first part of the definition, has been construed by the Supreme
court as including only the industries which are carried on by the Central Government directly, such
as Railways, Postal and Telegraphs, Telephones, etc., and those carried on “under the authority of
i.e., as an agent or servant of the Central Government .

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APPROPRIATE GOVERNMENT’S POWER TO CONSTITUTE THE ADJUDICATION
MACHINERY
Along with the constitution of other industrial relations machinery like Conciliation officers, Boards
of Conciliation and Court of Inquiry, the appropriated government has the power to constitute the
adjudication machinery such as Labour Courts and Industrial Tribunals. The Central Government,
however, has the power to constitute National Industrial Tribunals .

Constitution of Labour Courts:

Section 7(1) of the Industrial Disputes Act provides - “The appropriate government may by
notification in the Official Gazette constitute one or more Labour Courts for the adjudication of
industrial disputes relating to any matter specified in the Second Schedule and for performing such
other functions as may be assigned to them under this Act.”

Sub-section (2) lays down: “A Labour Court shall consist of one person only to be appointed by the
appropriate government.”

As per the above section, both the Central as well as State Governments (as appropriate government)
have the power to constitute one or more Labour Courts, primarily for adjudication of Second
Schedule matters which are generally rights disputes. In cases of Vacancy in the office of the
Presiding Officer of a Labour Court, the appropriate government shall appoint to fill the vacancy.

Power to constitute Industrial Tribunals

According to Sec. 7-A (1) of the Industrial Disputes Act- “The appropriate Government may, by
notification in the Official Gazette constitute one or more Industrial Tribunals for the adjudication of
industrial disputes relating to any matter, whether specified in the Second Schedule or the Third
Schedule and for performing such other functions as may be assigned to them under the Act.”

The Industrial Tribunal like the Labour Court shall consist of only one person to be appointed as the
Presiding Officer of the Tribunal.

The appropriate Government also has power, if it so thinks fit, to appoint two persons as assessors to
advise the Tribunal in the proceedings before it. Under this Section the appropriate Government has
power to constitute Industrial Tribunal for a limited time or for a particular case or number of cases or
for a particular area. In other words, the appropriate Government may constitute Tribunals on an ad-
hoc basis as and when the disputes arise and the Government decides to refer them to the Tribunal’

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Central Government’s power to constitute National Industrial Tribunal
As per Sec. 7-B (1), “The Central Government may by notification in the Official Gazette, constitute
one or more National Industrial Tribunals for adjudication of industrial disputes, which, in the opinion
of the Central Government, involve questions of national importance or are of such a nature that
industrial establishments situated in more than one State are likely to be interested in or affected by
such A National Tribunal shall consist of one person only to be appointed by disputes”. The Central
Government1 further, only a person who is or has been a judge of a High Court can be appointed as
the Presiding Officer of a National Tribunal.

Government may also appoint, if it so thinks fit, two persons as assessors to advise the National
Tribunal in the proceedings before it. This power of the Central Government to constitute National
Tribunals is an overriding power and under Section 10 (1-A) of the I.D. Act the Central Government
has power to refer such disputes to a National Tribunal, whether or not the Central Government is the
appropriate Government in relation to such disputes.

The object of this provision is twofold: first, to get the disputes of national importance adjudicated
upon by a higher tribunal, as only a person who is or has been a judge of a High Court can be
appointed as the Presiding Officer; and secondly, as the Central Government need not be the
appropriate Government in respect of industrial disputes relating to all- India establishments, the
reference to National Tribunal can avoid reference by different State Governments and it also
overcomes the limitations of territorial jurisdictions of Industrial Tribunals constituted by the
respective State Governments.

APPROPRIATE GOVERNMENT’S POWER TO REFER INDUSTRIAL DISPUTES

FOR ADJUDICATION
In the realm of the Industrial Disputes Act, 1947, Sec 10 is of paramount significance. If the
disputants are not able to arrive at a “settlement” or if they are disinclined to refer their disputes to an
Arbitrator, then, “ultimate legal remedy for the unresolved dispute is its reference to adjudication by
the appropriate Government”. The scheme of the I.D. Act envisages the exclusive power of the
appropriate Government to refer disputes for adjudication, thereby rendering the adjudication
conditional on its discretion. Excepting applications under Sec. 33,34 33- A and 33-(C)(2), all other
matters will have to come before the adjudicatory authorities only through an order of reference by
the appropriate Government. But now in some States like Karnataka, Tamilnadu and Andhra Pradesh
in case of industrial disputes relating to discharge, dismissal, retrenchment or other
termination of services, a workman may directly approach a Labour Court for the adjudication

1
Sub.Sec (2) of Sec. 7- B of the I.D. Act

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of such disputes under the relevant State amendments to the I.D.Act, This power of the Government
disables the trade unions or the workmen to make use of the adjudicatory forums for the settlement of
disputes and as an effective remedy for their grievances. There has been a constant demand by the
trade unions to provide them and to the workers direct access to these adjudicatory authorities.
Further, the controversy about the Government’s power arises in the context of misuse of this
discretionary power for partisan ends with political motives. This discretionary power affords an
opportunity to the Government to unduly favour trade unions affiliated to the political party in power
and thus to discriminate against other trade unions. Then there are also objections of delay and of the
Government’s reluctance to refer disputes to which it is a party.

NATURE AND EXTENT OF GOVERNMENT’S POWER:

Section 10(1) I.D.Act, which confers power on the appropriate Government to refer disputes for
adjudication, is couched in very broad terms. It lays down, “Where the appropriate Government is of
opinion that any industrial dispute exists or is apprehended, it may, at any time, by order in writing”
refer the disputes for adjudication. On the construction of this Section the Supreme Court in a number
of decisions explained that this power of the appropriate Government is purely of an “administrative
nature”, as the expression is understood in contradistinction to quasi-judicial or judicial power. This
implies that it is a discretionary function of the Government and, therefore, it does not admit the
application of the principles of natural justice. The Government need not give any notice or hearing to
the parties before deciding to refer the dispute. Further implication of holding it an administrative
power is that, it may review its decision at any time and it is also not necessary for the Government to
record any reasons for the exercise of this power.

The only limitation on the Government is that it should exercise the power bonafide after application
of its mind to the matter before it. It should also take all relevant matters into consideration and leave
out all irrelevant considerations. In other words, the discretion must be exercised according to law, as
established by the Courts in various cases. The discretionary power should be exercised to promote
the statutory objects and that a discretionary decision founded upon irrelevant factors or grounds
would be judicially reviewable and quashable. In State ofMadras v. C.P. Sarathy2, the first leading
decision of the Supreme Court on the interpretation of Section 10, it was laid down that the
Government should satisfy itself on the facts and circumstances brought to its notice in its subjective
opinion that an industrial dispute exists or is apprehended. The factual existence of the dispute or its
apprehension and the expediency of making a reference are matters entirely for the Government to
decide. It was further observed that the order of reference passed by the Government cannot be
closely examined by a writ court under Article 226 of the Constitutions to see if the Government had
material before it to support the conclusion that the dispute existed or was apprehended. But later in
2
(1951) I.L.Z.J 148 (S.C.).

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Western India Match Co. v. Western India Match Co Workers’ Union‘d and in Shambunath Goyal v.
Bank of Baroda, Jullundur3, the Supreme Court insisted that the appropriate Government should first
satisfy itself on the basis of the material available before it that an industrial dispute exists or is
apprehended and it was held that such a satisfaction of the Government is a condition precedent to the
order of reference. In other words, if there is no material before the Government that an industrial
dispute exists or is apprehended, the Government has no power to make a reference. Of course, the
Court observed, the adequacy or sufficiency of the material on which the opinion was formed is
beyond the pale of judicial scrutiny. Once the Government forms an opinion with respect to the
existence of an industrial dispute or its apprehension, the next question of expediency, i.e. whether to
refer the dispute for adjudication or not, is left to the subjective satisfaction of the Government.
However, where the appropriate Government refuses to make a reference on receipt of a failure report
of a Conciliation Officer under Sec. 12 (4), the Government is bound to give reasons for its refusal
and communicate the same to the parties concerned.

It is now well established that the discretion of the appropriate Government under Sec. 10 (1) is
neither unfettered nor arbitrary. The exercise of power by the Government or refusal to do so is
subject to the well-recognized principles regarding the exercise of administrative desecration. There
must, first, be real exercise of discretion bonafide, i.e. the power must be exercised honestly and not
for any corrupt or ulterior purposes. Secondly, the appropriate Government must apply its mind to the
relevant material before it and decide the question of expediency of referring the dispute in the
interests of maintaining industrial peace in the concerned industry. It will be an absurd exercise of
discretion, if, for example, the Government forms the requisite opinion on account of pressure by any
political party. Within these narrow limits, the government’s opinion is not conclusive and can be
challenged in a court of law. The well-known grounds for challenging the exercise of administrative
discretion, like malafides, irrelevant considerations, not taking relevant considerations into account,
improper purpose, acting mechanically or under dictation, are also available for challenging the
improper exercise of power by the appropriate Government under Section 10(1) of the Act.

For instance, in Sindhu Resettlement Corporation Ltd v. Industrial Tribunal. The Supreme Court
quashed the order of reference on the ground that no industrial dispute relating to the dismissal of the
workman was in existence between the parties prior to the reference by the appropriate Government.
The workman raised the dispute raised by the workman before the employer was only with respect to
payment of retrenchment compensation and the disputer regarding reinstatement for the first time
before the Government. The court observed that in the absence of a formal demand by the workman
on the employer to reinstate him, he dispute relating to reinstatement cannot be said to have existed
dispute. The definition of “industrial dispute’ also contemplates the factum of dispute. Although the

3
(1978) 7.1. 1.J. 484 (S.C.).

10
court in the instant case did not consider the question whether on the facts the Government could have
apprehended such a dispute, the case is an authority to the proposition that there must be some
material before the Government regarding the specific dispute before it decides to make a reference.

POWERS OF HIGH COURTS & SUPREME COURT TO DIRECT THE

GOVERNMENT TO MAKE A REFERENCE
Where the Government exercises its power bonafide upon taking into account all relevant matters and
such an exercise of power results in a reference, the order of the Government cannot be successfully
challenged. But if the Government does not act bonafide or takes into account any extraneous or
irrelevant considerations, the order of the Government referring the dispute or refusing to refer the
dispute is amenable to judicial review. Practically the question of referring adispute for adjudication
arises after the Government has received the failure report from the Conciliation Officer According to
Section 12 (5), if on a consideration of the failure report by a Conciliation Officer, the appropriate
Government is satisfied that there is a case for reference, it may make such a reference. Where the
appropriate Government does not make such a reference, it shall record and communicate to the
parties concerned its reasons therefore. Similar obligation to record reasons for non-reference and
communicating the same to the parties concerned arises where the failure report is submitted by a
Board of Conciliation only in case of public utility services. The reasons given by the Government for
not referring the dispute should stand the test of judicial scrutiny. In State of Bombay v. K.P.
Krishnan4, the Government on consideration of the failure report refused to refer the dispute and the
reason given by the Government was that the workmen resorted to go slow during the year 1952- 53,
for which year the workmen claimed bonus. The Supreme Court held that the Government had taken
into consideration altogether an irrelevant matter in refusing to refer the dispute and therefore, a writ
mandamus was issued to the Government directing it to reconsider the matter by ignoring the
irrelevant consideration. While so holding, the Court observed:

“The order passed by the Government under Section. 12(5) may be an administrative order and the
reasons recorded by it may not be justifiable in the sense that their propriety, adequacy or satisfactory
character may not be open to judicial scrutiny; in that sense it would be correct to say that the Court
hearing a petition for mandamus is not sitting in appeal over a decision of the Government,
nevertheless, if the Court is satisfied that the reasons given by the Government for refusing to make a
reference are extraneous and not germane, then the Court can issue, and would be justified in issuing a
writ of mandamus even in respect of such administrative order 5.

4
(1961) II L.LJ. 592 (S.C.).
5
(1961) II L.LJ. 592 (S.C.).

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The Government’s order refusing to refer the dispute is amenable to judicial review on the following
grounds:

. i)  When the Government does not act bonafide;

. ii)  When the Government does not record reasons and communicate the same to the parties
concerned;

. iii) When reasons recorded by the Government under Sec. 12 (5) are not germane or are
irrelevant; or

. iv) When in the guise of considering the prima facie case the Government embarks upon the
adjudication of the dispute itself, i.e. the questions of law or disputed questions of fact, and
thus transgresses its jurisdiction.

NO POWER TO WITHDRAW, CANCEL OR SUPERSEDE A REFERENCE

On the question whether the power of the appropriate Government to refer a dispute under Sec. 10 of
the I.D. Act carries with it the power to cancel or supersede the reference, the Supreme Court in State
ofBihar v. D.N. Ganguly6 ruled that the Government has no such express or implied power to either
cancel or withdraw a reference after it has made the order of reference. The Court did not approve the
contention of the Government that as per the provisions of the General Clauses Act a power to make
an order includes in it a power to cancel the order. The Court arrived at this conclusion by taking into
account the objectives for which this power was not conferred on the Government.

POWER TO AMEND THE ORDER OF REFERENCE:

However, the appropriate Government acting under Sec. 10 will have power to add to or amplify or
correct any clerical or typographical errors7. But the Government under the guise amending or
correcting cannot supersede the reference already made. The cardinal principle in determining the
question, whether the amendment amounts to a mere correction of a clerical error or introduction of
fresh material is, whether the relief claimed by the aggrieved party in the original notification can be
granted in the proceedings which are to take place in pursuance of the amended notification. If the
same relief can be granted, the mistake may be considered as clerical, which can be corrected by an
amendment. But if the same relief cannot be granted, then it means that the original notification has
been cancelled and another notification has been issued in its place, which the appropriate
Government is not competent to do.

6
(1958) II L.L.J. 634 (S.C.)
7
(1958) II L.L.J. 634 (S.C.).

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 APPROPRIATE GOVERNMENT MAY “AT ANY TIME” REFER
The words “at any time” preceded by the word “may” in Sec. 10 (1) in dictate the intention of
legislatures that the Government should have discretion to refer a dispute at any time, if it is of
opinion that an industrial dispute exists or is apprehended and that it considers expedient to do so in
the interests of maintaining industrial peace in the concerned industry.

PENDENCY OF CONCILIATION PROCEEDINGS:

The significance of the words “at any time” is that the reference can be made at any time even before
or during the pendency or after the conciliation proceedings. In other words, though as a matter of
practice conciliation proceedings by a conciliation officer are held before the government decides to
refer a dispute for adjudication, it is not a condition precedent. In Western India Match Co. Ltd v.
Western Match Co. Workers’ Union, the Supreme Court observed:

“Ordinarily the question of making a reference would arise after the conciliation proceedings have
been gone through and the conciliation officer has made a failure report. But the Government need not
wait until such a procedure has been completed. In an urgent case, it can “at any time”, i.e. even when
such proceedings have not begun or are still pending, decide to refer the dispute for adjudication. The
expression “at any time” thus takes in such cases where the Government decides to make a reference
without waiting for conciliation proceedings to begin or to be completed.” This position is amply
made clear by Sec.20 of the I.D.Act which states that the conciliation proceedings shall be deemed to
be concluded, among others, when a reference is made to a Court of Inquiry, Labour Court, Tribunal
or National Tribunal

REFERENCE AFTER REFUSAL ON A PREVIOUS OCCASION:

Refusal of the Government to refer a dispute on a previous occasion does not prevent it from
reconsidering the matter afresh at a later date and deciding to refer the same under Sec. 10 (1) of the
I.D.Act. In other words, previous refusal is no bar for a subsequent reference. This has been the
consensus of thejudicial opinion.

The Supreme Court in the Western India Match Co. case categorically stated that the words, “at any
time” do not admit any period of limitation and that previous refusal is no bar for a subsequent
reference. In this case the Government referred the dispute for adjudication after a lapse of about six
years from the previous refusal. The Court explained the law on this aspect in the following words.

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“When the Government refuses to make a reference it does not exercise its power; on the other hand it
refuses to exercise its power. Consequently, the power to refer cannot be said to have been exhausted
when it has declined to make a reference at an earlier stage”.

The words “at any time” prima facie indicate to a period without boundary. But such an interpretation
making the power unending would be pedantic. There is inherent evidence in this section itself to
indicate that the time has some circumspection. The words ‘where the Government is of the opinion
that any industrial dispute exists or is apprehended’ have to be read in conjunction with the words ‘at
any time’. They are, in a way, complimentary to each other. The Government’s power to refer has
thus one limitation of time and that is, it can be done only so long as the dispute exists. In other
words, the period envisaged by the enduring expression ‘at any time’ terminates with the eclipse of
the industrial dispute. It, therefore, means that if the dispute existed on the day when the Government
made the reference it is idle to ascertain the number of years which elapsed since the commencement
of the dispute to determine whether the delay would have extinguished the power of the government
to make reference.

Further the contention that in making a reference the Government is performing an administrative
function and not a judicial or a Quasi-judicial function and therefore, audi alterem partem is not
invokable has become untenable in the light of the path breaking decisions of the Supreme Court in
State of Orisa v Binapani Devi8, Kraipak v Union of India9 and Mohinder Singh Gill v Chief Election
Commissioner10, In Mohinder Singh, The Supreme Court has observed, it is submitted, rightly, that
“the dichotomy between administrative and quasi-judicial functions vis-a-vis the doctrine of natural
justice is presumably obsolescent after Kraipak in India and Schmidt in England. In Binapani, the
Supreme Court has held that even an administrative order, which involves civil consequences, must
be made consistently with the principles of Natural Justice.

SPECIAL POWERS OF CENTRAL GOVERNMENT

Power of Central Government to refer disputes to Labour Courts and Industrial

Tribunals constituted by State Governments:
The Third proviso to Sec. 10 (1) “ where the dispute in relation to which the Central Government is
the appropriate Government, it shall be competent for that Government to refer a dispute to Labour
Court or an Industrial Tribunal, as the case may be, constituted by the State Government”. According

8
AIR 1967 S.C 1269, 1272.
9
AIR, 1970 S.C, 150,156.
10
(1978) S.C.C 405,433.

14
to this proviso, inserted by 1982 Amendment, it is not necessary that the Central Government shall
refer disputes only to Labour Courts and Industrial Tribunals constituted by it. Instead, it may refer
the disputes to a Labour Court or an Industrial Tribunal constituted by any State Government. This is
aimed at facilitating the Central Government not to constitute separate ad judicatory authorities in
areas where the disputes are not many in number, but all the same refer them to the authorities
constituted by State Governments in those areas.

Overriding power of Central Government to refer disputes to National Tribunal:

According to Sec. 10 (1-A), Central Government may, at any time, refer any industrial dispute, if it is
of opinion that the dispute involves questions of national importance or is of such a nature that
industrial establishments situated in more than one State are likely to be interested in, or affected by
such dispute and that the dispute should be adjudicated by a National Tribunal, whether or not the
Central Government is the appropriate Government in relation to such dispute and also whether the
dispute relates to any matter specified in Second Schedule or Third Schedule. For adjudication of
disputes of national importance or disputes in respect of inter-state industrial establishments, the
Central Government has been empowered to invoke this provision to refer such disputes to a National
Tribunal for adjudication. To invoke this provision, the Central Government need not be the
appropriate Government in relation to such disputes.

As per Sec. 10(6), upon such reference being made by the Central Government, no Labour Court or
Industrial Tribunal shall have jurisdiction to adjudicate upon any matter contained in the reference to
the National Tribunal. If any such matter referred to National Tribunal is pending in any proceeding
before a Labour Court or Tribunal, such proceeding before the Labour Court or Tribunal shall be
deemed to have been quashed, It shall also not be lawful for the appropriate Government to refer any
matter under adjudication before a National Tribunal to any Labour Court or Tribunal for adjudication
during the pendency of proceedings in relation to such matters before the National Tribunal.

A combined reading of Sec. 10 (1-A) and 10 (6) clearly indicates that Central Government has an
overriding power of reference to a National Tribunal, even with respect to disputes, which are already
pending adjudication by a Labour Court or Tribunal. Once the Central Government shall be divested
of its functions under the Act and thereafter the Central Government shall be deemed to be the
appropriate Government in relation to that dispute for all legal purposes.

REFERENCE OF DISPUTES ON AN APPLICATION BY BOTH PARTIES

Sec 10 (2) of the ID. Act provides, “where the parties to an industrial dispute apply in the prescribed
manner, whether jointly or separately, for a reference of the dispute to a Board, Court, Labour Court,
Tribunal or National Tribunal, the appropriate Government, if satisfied that the persons applying
represent the majority of each party, shall make a reference accordingly”.

15
This sub-section makes it obligatory for the Government to refer an industrial dispute if the parties
themselves apply to it in the prescribed manner. In other words, where the parties apply for a
reference, the discretion of the Government is divested and it will be under an obligation to refer such
dispute for adjudication. In such cases, the Government need not consider the question of existence of
an industrial dispute or its expediency to refer. The only requirement is that Government should
satisfy itself that the parties to the application represent the majority of each party. When on both
sides of the dispute there are associations or unions, the requirement of majority on both sides arises.
But if the dispute is between a single employer and his workmen, the question of majority with
respect to the employer does not arise and the Government will have to be satisfied only with respect
to the majority of workmen.

In other words, the trade union, which makes such an application, will have to be a representative of
majority of the workmen of that establishment. The appropriate Government before making a
reference under this provision may hold such inquiry as it thinks necessary to satisfy itself about the
representative character of the union, which is a party to the application.

DUTY OF THE APPROPRIATE GOVERNMENT TO SPECIFY THE PERIOD OF ADJUDICATION

It is common knowledge that there are inordinate delays in the adjudication of industrial disputes by
the Labour Courts and Tribunals. Parliament’s concern of these delays was manifested through an
amendment to the I.D. Act in 1982, which has introduced sub-sec (2A) in sec.10. This amendment is
aimed at reducing the delays in adjudication and ensuring a time - bound adjudication. This provision
requires the appropriate Government to specify in the order of reference itself the period within which
the adjudication shall be completed and the award submitted to the Government. According to this
sub-section, “An order referring an industrial dispute to a Labour Court, Tribunal or a National
Tribunal under this Section (i.e.Sec.10) shall specify the period within which such authority shall
submit its award on such dispute to the appropriate Government”. The first proviso to this sub-section
adds that, “where such industrial dispute is connected with an individual Workman, no such period
shall exceed three months.”

Having laid down this salient provision with a view to secure quick disposal of cases, the next proviso
whittles down its obligatory character when it empowers the presiding officer to extend such period
by such further period as he thinks necessary. The presiding officer may extend the period specified in
the order of reference either on the application of both parties or for any other reason as the presiding
officer considers it expedient or necessary, If the presiding officer extends the period by such further
period as he thinks necessary, he has to record reasons as to why such extension became necessary.
This leeway given to the presiding officer virtually negates the very spirit with which this amendment
was made. The last proviso introduces another safety clause according to which the proceedings

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before the presiding officer shall not lapse merely on the ground that any period specified under this
sub- section had expired without such proceedings being completed.

Except in case of individual disputes, the appropriate Government has discretion to fix the necessary
adjudication time. The Government has to decide this period by taking into account the nature of
dispute, the matters already pending before the concerned adjudicator, etc.

OBJECTIONS TO THE GOVERNMENTS’ DISCRETION TO REFER DISPUTES FOR

ADJUDICATION

It is already noted that the main policy background of the industrial relations system in India is the
Government intervention in industrial disputes through, mainly, conciliation and adjudication. The
Government’s intervention even in the adjudication method is extensive. The Government retains in
its hands the ultimate control of deciding which disputes should go for adjudication through the
technique of Government reference of disputes for adjudication. As a general rule, parties to the
dispute have no freedom to take their disputes to the adjudication machinery. In other words, they
have no access to the adjudication machinery, even in case of disputes of legal or rights nature, which
include very important disputes connected with dismissal or discharge of workmen. The discretion
vested in the Government to refer or not to refer is counterproductive and defeats the very purpose of
peaceful settlement of disputes through adjudication. The trade unions, researchers and Commissions
have voiced several objections on labour relations to this exclusive discretionary power of the
appropriate Government. These specific objections are discussed hereunder.

1. Objections on the basis of Policy

2. Delay in making reference

3. Political Patronage and Discrimination

4. State is the employer in many disputes

5. Favourtism and Corruption

6. Bureaucrats and politicians are not experts to decide

7. The Question of remedy vis-a-vis discretionary power

8. Frequent changes in the Government

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 SUGGESTIONS TO MAKE THE SETTLEMENT SYSTEM MORE
EFFECTIVE
1. The trained and experienced officers who are well acquainted with the problems of industrial
workers should be entrusted with the responsibility of dealing with conciliation machinery Political
and administrative interference should not be allowed to cloud the functioning of conciliation
machinery.
2.One way to strengthen the adjudication machinery is to substitute it by setting up Industrial
Relations Commissions (IRCs), both at the Central and the State level, on the lines suggested by the
National Commission on Labour. The IRC should also be empowered to oversee the working of the
conciliation machinery.
3. In order to make arbitration fair, the arbitrator chosen for settling disputes be mutually acceptable
to both the union and the management. This can be facilitated if the government prepares the panel of
experienced arbitrators at the national and the state levels so that arbitrators are chosen from the panel,
as and when required.
4. The government should refrain from actively intervening in the matters of industrial disputes unless
it is must for her to intervene in the disputes.

CONCLUSION
After studying about the settlement of industrial disputes under ID Act we can come to the conclusion
that since to refer a dispute, government intervention is must, because without reference by the
appropriate government courts and tribunals will not get the jurisdiction to decide the matter of
dispute. There are some short comings like if a workmen union is ideologically or politically is
against the appropriate government, then appropriate government will have the power to not refer the
dispute for adjudication and hence this will go against the interest of workers. I also think that
government should consider the recommendation given by National Commission on Labour regarding
the formation of Industrial Relations Commissions (IRC) at state and national level.

BIBLOGRAPHY

 Websites-

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Indian Kanoon.org

LegalservicesIndia.com

Hanumant.com

 Books-

O P Malhotra, labour law

S H Mehra, Cases on Labour Law

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