“CONCILIATION UNDER THE INDUSTRIAL DISPUTES

ACT 1947”

TENTATIVE CHAPTERIZATION:

 INTRODUCTION.

 IMPORTANCE OF CONCILIATION PROCESS.

 CONCILIATION PROCESS UNDER THE ACT.

 AN APPRAISAL OF THE CONCILIATION PROCESS IN LIGHT OF

THE STATUTORY SCHEME AND SOME JUDICIAL DECISIONS.

 EFFECTIVE CONCILIATION PROCESS.

 CONCLUSION.

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RESEARCH QUESTION:

 what are the types of conciliation procedures resorted under IDA 1947

 what is the effectiveness of both types of conciliation as a dispute resolution mechanism

RESEARCH METHODOLOGY:

This research methodology used for this project is descriptive and analytical. This design was used by

the researcher to explain the working mechanism of conciliation under the industrial disputes act, 1947,

with help of both primary and secondary sources like books, articles, websites, etc.,

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 INTRODUCTION:
In any association the questions are being endemic. as a result of the divergent attributes of the
gatherings in a modern set up, which ex necessitates meet up to participate in the creation of
material products and ventures. The question or contrast angle will undoubtedly pose a potential
threat. The gandhian saying that capital utilizes both, however alluded to, now and again, with
the end goal of underlining that an industry can exist neither by businesses nor by workers alone,
doesn't appear to have sunk into the tops of those occupied with profitable association.It cannot
be denied that industrial peace and friendship are important in a developing country like India.
Peaceful and harmonious relations between the production partners would guarantee the
economic development of the nation for the workers. Perpetual protests and ongoing clashes,
while spreading tentacles of mistrust and discord between employers and workers, would hinder
the nation's economic progress. For this reason, this mechanism is provided for in the industrial
Disputes Act 1947 (hereinafter "the law"), as the resolution of industrial disputes is gaining in
importance and has far-reaching consequences.

SCOPE AND NATURE:

The act provides for “conciliation” with a view to bringing about an harmonious settlement of
industrial disputes.1 The word “conciliation” has not been defined under the act. In industrial
parlance, it involves in an industrial dispute intervention by a third party, who may be a private
body or a governmental representative, for purpose of bringing about a “settlement”.

DEFINITION:

 According to simkin, conciliation is : “mild form of intervention limited primarily to

scheduling conferences, trying to keep the disputants talking, facilitating other procedural

1
Section 4,5 Industrial Disputes act 1947. The act also contemplates the setting up of labour courts, industrial and national
tribunals for the adjudication of disputes and also provides for voluntary arbitration. Sections 7,7a,7b,10,10(1)(a) and 10a.

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 niceties, carrying messages back and forth, and generally being a 'good fellow' who tries
to keep things calm and forward looking in a tense situation”2

 According to updegraff, concilition may be regarded as “an extension of a voluntary

negotiation of the parties by which they are seeking to adjust the matters in which they
have found themselves at odds”.

TYPES OF CONCILIATION:
‘Conciliation’, depending upon its nature, it can be divided into ‘Voluntary Conciliation’ and
‘Compulsory Conciliation’.
 In Voluntary Conciliation, it is up to the parties to decide whether to go for Conciliation
at all in case of a deadlock in bipartite negotiations. They are absolutely free to make the
choice. Practically, the writ of Voluntary Conciliation runs only in developed countries
where the economy is free and both workers and employers are quite matured and
responsive towards each other.
 In compulsory conciliation, law compels the conciliator to take cognizance of the crisis
and initiate conciliation proceedings irrespective of the inclinations or desires of the
parties. Where one of the parties to the dispute, normally, the workers, is comparatively
weaker at the bargaining table, this method, probably, serves a useful purpose.

A HISTORICAL NOTE ON CONCILIATION:

Conciliation is said to be an ancient art of peace making. Being a human institution, it is
probably as old as man’s interest in the process of peaceful resolution of conflicts. From time
immemorial, the process of Conciliation, as an honourable method, has been resorted to
frequently to iron out serious disagreements which threatened to rupture established relationships
between husbands and wives, labour and managements, warring nations, litigants at ordinary
courts, associates and friends and people in general. Since Conciliation, as a method for
resolving industrial disputes is the crux of this chapter, the focus would be upon the statutory
origin and development of Conciliation machinery in India.

2
http://nadfm.nic.in/learning/SAS%20PAPER%20VII/SAS%20PAPER%20VII%20(NS)%20FILES/C-%20Section%20III-Elements
%20of%20Law/A%20-Commercial%20Law/C-Arbitration%20&%20Conc.%20Act%201996.doc

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The statutory origin of Conciliation machinery as a method for resolving industrial disputes in
India is traceable to the Act of 1889. This was replaced by the Indian Trade Disputes Act of
1929 which contained provisions for the constitution of the ‘Board of Conciliation’. However,
there was no provision therein for appointing Conciliation Officers. The ‘Board of Conciliation’,
under the Act of 1929 proved to be highly inadequate. Consequently, in 1938, section 18-A was
inserted which authorised the Central and Provincial Governments to appoint Conciliation
Officers to act as ‘mediators’ in ‘ trade disputes’. Meanwhile, availing of the discretionary
power, provided for the Provincial Government under section 18-A of the Act of 1929, the
Bombay Province enacted the Bombay Industrial Disputes Act, 1938 which provided for
Compulsory Conciliation for the first time. The application of this Act was restricted to major
industries like, the textiles, woollen, silk mills, transport, electricity and sugar. This Act later, in
1946, was amended and was renamed as Bombay Industrial Relations Act .The very next year,
the Government of India enacted the Industrial Disputes Act, 1947, wherein, Sections 6 and 18-
A of the repealed Act of 1929 were retained under Sections 4 and 5 providing for appointment of
‘Conciliation Officers’ and for the constitution of ‘Board of Conciliation’ by the Appropriate
Government.3

IMPORTANCE OF CONCILIATION PROCESS

It is important to note that parties to an industrial dispute are not the typical litigants before an
ordinary court of law. Its "right settlement"can usher in and ensure industrial peace. After it has
been resolved, the parties, unlike the ordinary litigants, have to get back and engage under a
common roof in the industry's productive processes. Thus, if any rancor or ill-will persists even
afterwards such feelings would not augur well for promoting industrial peace. 4 Consequently,
only a "right settlement", i.e., a settlement which is "right" from the point of view of both the
parties would ensure future harmonious relationships. It is, therefore, important that the
eminently sensible principle of "voluntarism" that underlies the conciliation process be borne in
mind. Unlike the situation in adjudication or arbitration where a third party would impose its

3
DR. GOSWAMI, LABOUR AND INDUSTRIAL LAW, CENTRAL LAW AGENCY, 9 TH EDITION.
4
http://nadfm.nic.in/learning/SAS%20PAPER%20VII/SAS%20PAPER%20VII%20(NS)%20FILES/C-%20Section
%20III-Elements%20of%20Law/A%20-Commercial%20Law/C-Arbitration%20&%20Conc.%20Act%201996.doc

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award, in this process, the parties themselves have an excellent opportunity to settle their
differences. The adjudicator or arbitrator cannot understand and appreciate the differences of the
parties as well as they themselves can. The "give and take" policy demonstrated by them when
they voluntarily endeavour to reconcile their differences can rarely be effectively employed by a
quasi-judicial body such as an adjudicator or arbitrator. Further, the cost aspects of the
adjudicatory and arbitration processes as well as the inherent delay involved therein should make
the conciliation process more attractive.

CONCILIATION PROCESS UNDER THE ACT

Under the act, the power to appoint officers is vested in the appropriate government, which may
also, when the situation demands, constitute a board of conciliation. 5 While the act charges the
officers “with the duty of mediating in and promoting the settlement of industrial disputes,” the
board is created “for promoting the settlement of an industrial dispute”6. Also the officers act
singly, whereas the board functions as a multi-member body. Both are required to induce the
parties to arrive at an amicable settlement. In case this is achieved, they have to send their reports
along with the memorandum of the settlement. 7 Otherwise, a failure report is required to be
submitted detailing out the facts of the dispute and the reasons for failing to arrive at a
settlement. While the officer in submitting his report cannot make a recommendation "for the
determination of the dispute", the board can do so.
The Act compels the officer to commence conciliation proceedings where an industrial dispute
exists or is apprehended in a public utility service and where notice of strike or lockout has been
issued under section 22 of the Act. In respect of non-public utility services, though the Act
suggests that the officer may commence proceedings, in light of the statutory objectives, namely,
prompt investigation and settlement of industrial disputes, it is reasonable to conclude that there
is an implicit statutory obligation on his part to do so even in those cases where a dispute exists
or is apprehended. The board, however, acquires jurisdiction to promote a settlement only on a
reference being made to it by the appropriate government, under section 10(1) (a).
Both the officer and the board have been given certain powers of the civil court under the Code
of Civil Procedure 1908.u However, the board's powers are greater. Thus, for example, while
5
Section 4 of the act (defines “appropriate government”.
6
Section 5 of the act.
7
Section 12(2), 13(1) of the act.

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both attendance and examination on oath of any person can be enforced by it, the officer can
enforce only attendance.
As regards the binding nature of settlements, the Act envisages two situations. A settlement
arrived at in the course of conciliation proceedings, in so far as its "binding nature" is concerned,
is at par with the award of labour court, industrial or national tribunal and, in some
circumstances, that of an arbitrator.However, if it is achieved "otherwise than in the course of
conciliation proceedings" it binds only the parties to the agreement.

AN APPRAISAL OF CONCILIATION PROCESS IN THE LIGHT

OF SOME JUDICIAL DECISIONS
Now we turn to some of the judicial decisions bearing on the "settlement" issues to determine
whether the courts in light of the statutory objective of prompt settlement of industrial disputes
have done well to promote the growth of a healthy trade union movement in India or have
decided challenges against "settlements" on the principle of ad hocism. This attempt at an
appraisal of the courts' role, in the area of conciliation disputes, may enable us to find out the
contribution of the judiciary, if any, in making the conciliation machinery under the Act more
effectively.
In the case of Ramnagar Cane and Sugar Co. v. Jatin Chakravorty, 8 a case decided about
two and a half decades ago, is illustrative of the fact that supreme court let an excellent
opportunity slip by for promoting healthy trade union movement. In this case, fortunately, only
two unions has been involved, viz., ramnagar cane and sugar company employees union, a
minority union. In the course of conciliation proceedings, the latter, upset over the company’s (a
public utility service) suggestion that it be permitted to discuss separately the charter of demands
with the unions, served a notice of strike and later intimated that the conciliation had failed. The
officer sent a failure report in respect of the minority union. Later a settlement was arrived at
between the company and the majority union. In the meanwhile, in contravention of section 22
of the Act, the minority union had gone on an illegal strike. Before the Supreme Court, the issue
was whether the Calcutta High Court, in ruling that the strike resorted to by the minority union
was not illegal, had misconstrued section 22(X)(d) which lays down "during the pendency of
8
Supra note 17.

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conciliation proceedings before a conciliation officer and seven days after the conclusion of such
proceedings" it would be illegal.9
The court framed the question wrongly in that it asked whether any conciliation
proceeding was pending with reference to the minority union at the time it went on strike. The
Act simply forbids a strike in a public utility service during the pendency of conciliation
proceedings and seven days after their conclusion.10 Section 22(l)(d) merely speaks of
"pendency" of conciliation proceedings and not "pendency" in respect of any particular trade
union, whether a recognised or minority union. More significantly, the Act does not prescribe
that such proceedings should be pending in respect of a particular union before it can be debarred
from going on strike. Taking note of the special importance of a public utility service, it is
reasonable to conclude that the legislature has already made a policy choice and imposed an
absolute ban against all those employed in such service to go on strike during the specified
period. Otherwise, minority unions, which abound in industrial establishments commanding
support of workmen other than those who owed their allegiance to a majority union, can defeat
the statutory objectives with impunity. Further, the officer also committed an error in sending a
failure report in respect of the minority union in view of the extended operation of a settlement
arrived at in the course of conciliation proceedings. As the Supreme Court itself declared in
Ramnagar Cane and Sugar Cor.
[TJhere can be no doubt that the settlement arrived at between the [company] and the Employees'
Union during the course of conciliation proceedings...would bind not only the members of the
said union but all workmen employed in the establishment of the appellant at that date.

The court could have furthered the objectives of the Act by holding that "pendency" under
section 22(\)(d) means pendency of conciliation proceedings even when the most minority union
alone is involved in such proceedings so that the other disgruntled unions would have found it
obligatory to participate in them.

The court, instead of holding that the pendency of any conciliation proceeding would be an
absolute bar against any union from going on strike ruled as follows:

9
DR.H.K. SAHARAY, LABOUR AND INDUSTRIAL LAW, SIXTH EDITION .
10
Section. 22(1) (d). of the act

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[I]f a conciliation proceeding is pending between one union and the employer and it relates to
matters concerning all the employees of the employer, the pendency of the said conciliation
proceeding would be a bar against all the employees....
The effect of the decision is that even in a public utility service, despite the crucial nature of its
activity, those workmen who are not interested in the specific demands limited to a specified
class of employees' cannot be bound by the proceedings. But this does not clearly answer the
question as to whether the mere fact of pendency of conciliation proceedings would debar all the
workmen employed from resorting to strike. One can imagine the efficiency with which an
officer can act when the workmen, barring those whose union is engaged in such proceedings are
on strike, have posted pickets and where the atmosphere in the industry is anything but cogenial
for carrying on with the proceedings.

A settlement arrived at voluntarily by the parties is a sure sign of good industrial relations that
prevail in the industrial establishment. While it is imperative that it should be fair and just, the
labour court or the reviewing courts should exercise restraint while setting it aside as unfair in
proceedings challenging their fairness. Necessarily, there would be some "give and take" in
reaching such settlement and the parties might have lost something over an issue and gained on
another. Therefore, the courts exercising supervisory or appellate jurisdiction would do well
when they construe it as a whole and not in bits and pieces. In this context, the Supreme Court's
pronouncement that a settlement should not be upset "unless it can be demonstrated that the
objectionable portion is such that it completely outweighs all the other advantages gained" is
eminently reasonable.

Further, in Balmer Lawrieu the court has cast an obligation on the representative union to act
fairly and not to discriminate between its members and non-members. That is, according to it, the
bargaining agent in arriving at a settlement has an obligation to ensure that the interests of all
employees are taken due care of and that its provisions do not discriminate against the non-
members. The court's ruling can also be interpreted as imposing an obligation on the officer to
ensure that the settlement is "right'' from the point of view of all the parties concerned, that the
provisions, thereof, are "fair and just" even from the point of view of non-members.

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 EFFECTIVE CONCILIATION PROCESS
It has been said: "Mediation will never be a science but will alway remain an art. Nothing can
replace human touch which is so rare and precious." In order to make the conciliation process
effective, the attitudes of various participants, namely, parties to the dispute, the officer,
appropriate government,
and adjudicatory bodies like labor courts and ordinary courts exercising supervisory or appellate
jurisdiction, become relevant and important. It is time the disputants should bury their notion that
this process is "a fifth wheel to the coach." They should become aware of the fact that dispute
settlement through conciliation is founded on the eminently sensible principle of voluntarism and
that conciliation process is cheap and can be "quick" if they so desire. In this context, the
Swedish experience should hold out a lesson of great value to the parties to an industrial dispute
in India. In Sweden, where conciliation is compulsory, the representatives of the employer and
workmen "assemble in a spirit of determination to formulate an agreement— to make a success
of their meeting" and "both sides consider it a disgraceful thing if they cannot come together and
compose their differences themselves."11

Parties to a dispute in India should no longer regard that the conciliation process is a hurdle
which has to be inevitably faced and crossed in order to have the dispute adjudicated by a labour
court or an industrial tribunal. Unless they lay all their cards on the table and enter the process
with a determination to resolve their differences amicably, the conciliation machinery cannot
meet with success and will continue to remain "a fifth wheel to the coach". Here, the government
has a great responsibility. It should not persist in the habit of making references to adjudicatory
bodies either indiscriminately or soon after the officer or the board reports failure. It can
definitely require such bodies to make their reports clear and cogent and once it is satisfied that
the parties have not taken a meaningful part in the process, it may refuse to make a reference on
the ground that this would be "inexpedient". When demands of the workmen are unreasonable or
when the employer's attitude in the course of the process is found to be unreasonable the
government should publicise the reports received from the officer or board in prominent
newspapers to expose such attitudes and to demonstrate and establish that its exercise of
discretion, in not making the reference at the request of either of the disgruntled parties, has not
11
http://www.icaindia.co.in/icanet/quterli/jan-march2002/ICA3.htm

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been abused. Steps should also be taken to ensure that the persons appointed as officers possess
proper qualifications. It is the government that has first to demonstrate that it attaches great
importance to the conciliation machinery by selecting and appointing the right personnel. In the
selection and appointment of officers it would do better if it gives credence to "technical
qualifications in terms of education, training and experience" and to "knowledge of relevant
practice, including personnel management qualifications, as well as the technical and cultural
peculiarities of their region or industries.... Further, it should ensure that officers do not perform
a combination of functions, for example, as enforcers of labour laws and conciliators, since in
such a situation the employer class is not likely to extend the cooperation expected of them
during conciliation proceedings. Also, the status of the officer shoufd be raised in order to
impress upon the parties that the conciliatory body is an important one. The government,
employers and trade unions can come together to learn from experiences of the countries where
conciliation has been successful. They can also, through documentaries and video tapes, impress
upon workers the advantages emanating from a sincere participation in the conciliation process.
Additionally, a tripartite body consisting of representatives of employers, unions and government
can also draw up a list of names of persons who can act as conciliators in respect of an industrial
dispute. Since the parties themselves are going to draw up the names and approve the list, the
persons acting as conciliators would be able to command their co-operation in promoting a
settlement.12

The role of the conciliator is delicate and extremely crucial, and only an impartial body can
instill confidence in the disputants. In this context, the government should examine whether the
separation/removal of conciliation service from the stranglehold of the Ministry of Labour and
the creation of an "autonomous government [conciliation] agency" would not be expedient. By
establishing such an agency, it may be possible "to insulate the service from possible subjection
to partisan political pressures as well as to ensure the building up of a specialised and dedicated
career service." The conciliation process demands that the authority has requisite knowledge of
the collective bargaining process. He should be a staunch believer in it, encourage it and
minimise his role as a mediator. However this cannot be one of a silent spectator but should be
that of a representative of public interest.

12
http://iosrjournals.org/iosr-jhss/papers/Vol4-issue3/A0430107.pdf

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At the commencement of the proceedings, the parties might have almost come near the point of
exchanging blows. Tempers would have been frayed with each party perhaps determined to stick
to its guns. The feeling that "invincibility" should be demonstrated might reign supreme. An
officer who begins to promote a settlement without,
 Gaining a good grasp of the real differences,
 Finding out the facts leading to the dispute,
 A feel of the emotionally charged atmosphere, is comparable to a doctor who proceeds to
treat a patient without knowing or analyzing his symptoms.
The consequences can very easily be imagined. Since "[mediation [conciliation, in the Indian
context] is an emotionally charged process" the mediator has to ensure that "these human
emotions are constructively discharged as well as dealt with as substantive issues in disputes”.
The conciliator must cool the frayed tempers,infuse confidence in the parties and impress upon
them that he has thoroughly understood their problems. It is also his task to make each party
"realise the untenability of its original position and insert in their minds areas of reasonable
expectation." In the course of proceedings, each party would assert the Tightness of its stand,
paint its own righteousness in bold letters and try to expose of view...." In India, especially,
because of the hopeless state of the workmen in unorganised sectors, their illiteracy and
ignorance, lack of bargaining power, the conciliator's role would become much more
significant.13 According to Simkin, the conciliation officer should possess a combination of
qualities, namely,

 "the wit of the Irish";

 "the physical endurance of the marathon runner";
 "the guile of MachiavelU";
 "the personality- probing skills of a good psychiatrist";
 "the hide of a rhinoceros";
 "the wisdom of Solomon";
 "demonstrated integrity and impartiality"; and

13
http://www.legalservicesindia.com/article/article/principles-&-procedure-of-conciliation-under-arbitration-&-
conciliation-act-1996-725-1.html

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  "firm faith in voluntarism in contrast to dictation."

The foregoing may probably give an indication of the delicate and crucial role to be played by
the conciliator. His functions call for varied qualities including tons of patience and
perseverance. "Proper selection of personnel, adequate pre-job training and periodic in-service
training" might help in making the system of conciliation effective. The role of any one in the
conciliation drama cannot, however, be overemphasised. For the process to be successful, right
spirit, co-operation, understanding and sincerity on the part of all concerned, would be required.
the stark rigidity and naked unreasonableness of the other's stand. The officer should, therefore,
endeavour "to deflate the inflated misunderstandings... and enable them to see the reasonableness
of the other party's point.

CONCLUSION
Unless a desire to settle differences sincerely manifests itself in the parties, and unless the
conciliator and the government act in right earnest to make the process successful, the machinery
would continue to be regarded as a hurdle, to be inevitably crossed over by the parties. To make
the process successful, a legislative enactment providing for the certification of bargaining
agents in industrial establishment, is sine qua non. Proper selection of and , adequate pre- job
and in-service training for officers are of great consequence. The government would do well to
act with circumspection after receiving the failure report and before making a reference under
section 10(1) of the Act. In cases of failure of conciliation proceedings owing to the
unreasonable or demands and/ or attitudes of parties, publication of the report would probably
prompt them to evince greater interest in the process.

BIBLIOGRAPHY:
BOOKS:

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  DR. GOSWAMI, LABOUR AND INDUSTRIAL LAW, CENTRAL LAW AGENCY,
9TH EDITION.
 DR.H.K. SAHARAY, LABOUR AND INDUSTRIAL LAW, SIXTH EDITION.
 PROF.K.M. PILLAI, LABOUR AND INDUSTRIAL LAW, ALLAHABAD LAW
AGENCY, 6TH EDITION.
S C SRIVATSAVA, INDUSTRIAL RELATIONS AND LABOUR LAW, VIKAS
PUBLISHING HOUSE PVT LTD, SIXTH EDITION.
 S.N. MISRA, LABOUR AND INDUSTRIAL LAW, CENTRAL LAW
PUBLICATIONS, 27TH EDITION.
ARTICLES:
 http://nadfm.nic.in/learning/SAS%20PAPER%20VII/SAS%20PAPER%20VII%20(NS)
%20FILES/C-%20Section%20III-Elements%20of%20Law/A%20-Commercial
%20Law/C-Arbitration%20&%20Conc.%20Act%201996.doc
 http://www.legalservicesindia.com/article/article/principles-&-procedure-of-conciliation-
under-arbitration-&-conciliation-act-1996-725-1.html
 http://www.icaindia.co.in/icanet/quterli/jan-march2002/ICA3.htm
 http://iosrjournals.org/iosr-jhss/papers/Vol4-issue3/A0430107.pdf

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