Industrial Disputes Act, 1947: Mechanism for Settlement of Disputes

Conflict is inevitable but combat is optional.

-Max Lucado


Disputes are an unavoidable part of any industry. A dispute can emerge for a variety of reasons, the most prevalent of which being the relationship between labourers and their wages. A dispute is triggered by a clash of interests between two parties. The employer and the employee are the parties involved in a labour dispute. Employees have traditionally been placed on the bottom rungs of society by employers who show themselves as dominating self-beings in positions of authority. This long-standing inequity in the industrial arena now necessitates a settlement in which both the employer and the employee have an equal opportunity to present their wants. To avoid the industry from experiencing losses or sufferings, it is always required to settle conflicts between two parties under the Industrial Dispute Act of 1947. Because not all disputes in an industry can be settled in the same way, the Industrial Dispute Act of 1947 created the concept of a process for resolving disputes.

Industrial Disputes Act, 1947:

The Industrial Dispute Act of 1947 was enacted to ensure that both the employer and the employee are treated fairly and equally. The act’s goal is to use negotiation to resolve any problems that occur. It promotes industrial peace and harmony by doing so. In India, the Industrial Dispute Act of 1947 controls labour law in relation to trade unions. The definition of an industrial dispute is defined in Section 2(k) of the 1947 Act.

Mechanism of Settlement disputes under the Industrial Dispute Act, 1947:

  • Works Committee:

The competent Government may, by general or special order, necessitate the employer to form in the prescribed manner a Works Committee consisting of representatives of employers and workmen involved in the establishment in the case of any industrial establishment in which one hundred or more workmen are employed or have been employed on any day in the preceding twelve months. The workmen’s representatives shall be selected in the prescribed manner from among the workers in the establishment, in conjunction with their trade union, if any, and in accordance with the Indian Trade Unions Act, 1926. The Works Committee should be responsible for promoting steps to ensure and maintain amity and good relations between the employer and employees, as well as commenting on subjects of mutual interest or concern and attempting to reconcile any material differences of opinion on such matters.

  • Conciliation officer:

The competent Government may appoint as many conciliation officers as it sees proper to promote and settle industrial disputes by notifying them in the official Gazette. The major goal of selecting a conciliation officer is to establish a friendly culture in the workplace and to resolve disagreements between workers and employers. He can be appointed for a specific area, specific industries in a specific area, or one or more specific industries, and for a long or short period of time. The conciliation officer’s role is administrative rather than judicial. He must convene conciliation sessions, investigate the disagreements, and do anything else he deems necessary to persuade the parties to reach a fair settlement of the disputes.

  • Board of Conciliation:

If the appropriate government believes that there are any industrial conflicts in a particular industry, it may refer the matter to the Board of Conciliation for resolution. The Board of Conciliation is responsible for resolving the issue. He must submit a report as well as a memorandum of settlement to the appropriate government officials. In the event that no settlement is reached, he must submit a detailed report to the appropriate government outlining the Board’s actions.

  • Court of Inquiry:

By notification in the official Gazette, the appropriate Government may form a court of inquiry into any matter appearing to be associated with the settlement of industrial disputes, consisting of an independent person or such independent persons as the appropriate Government deems appropriate. The court must have at least two members, one of whom must be chosen by the Chairman. The court is required to deliver a report to the appropriate government within six months of the start of any investigation. A court of inquiry has no authority to improve any agreement reached between the parties.

  • Voluntary Arbitration:

Section 10A of the Industrial Dispute Act also allows for voluntary arbitration. If an industrial disagreement exists or is suspected, the matter may be referred to arbitration. If a majority of each party signs the arbitration agreement, the government may publish a notice allowing employers and employees who are not parties to the arbitration agreement but are involved in the dispute to present their case to the arbitrator or arbitrators. The arbitrator(s) will investigate the case and present the government with the arbitration award, which must be signed by all arbitrators.

  • Adjudication:

It is not that adjudication completely replaces conciliation; rather, if conciliation fails to resolve a dispute between two parties, adjudication steps in to do the job that the conciliation mechanism was supposed to finish. The industrial dispute can be resolved using a three-tier method, which will include the following:

1. Labour Court:

The labour court is made up of one person who is either an independent judge or a High Court or District Court judge. The judge could alternatively be a previous labour court judge with at least 5 years of experience. The second schedule of the Industrial Dispute Act of 1947 specifies the types of cases that the labour court can hear.

2. Industrial Tribunal:

The government can establish one or more industrial tribunals as he sees fit, with the courts having broader jurisdiction than the labour court. It is not to be considered a permanent body, but rather one that has been put up for the sole purpose of hearing on an as-needed basis.

3. National Tribunal:

The Central Government establishes a national tribunal by an official gazette for the adjudication of industrial disputes of national importance.

Landmark Judgments:

  • Workmen of Hindustan Lever Ltd v. Hindustan Lever Ltd[i]:

The court stated that for any industry to flourish and prosper in the long run, it is necessary to foster harmonious construction of the wants of both the employer and the employee of that business. In order to attain this goal, the court determined that mandatory adjudication for resolving industrial disputes is required, as well as a forum where the parties can seek arbitration to avoid any kind of conflict in the workplace.

  • Mathura Refinery Mazdoor Sangh v. Union of India[ii]:

The Supreme Court of India emphasized the importance of tribunals in resolving industrial disputes and instructed the government to seek advice from the tribunals itself. As a result, the court separated the process for resolving disputes under the Industrial Dispute Act of 1947 as a distinct institution.

  • United Bleachers (P) Ltd. v. LC[iii]:

The Madras High Court held that if the competent government takes too long to make a reference, it will not be a valid reason to deny relief to the workers who are involved in the dispute and have already suffered from it. If the relief is denied on this basis, it will be considered an unfair labour practice and hence illegal.

Thus, the above-mentioned judgements demonstrate that, whatever the disagreement, the courts always intend to resolve it in a way that provides justice to both parties involved in the dispute.


Despite the system’s many flaws, the Supreme Courts’ and High Courts’ intervention has been beneficial in controlling the statute governing industrial disputes. Settlement of disputes under the Industrial Dispute Act of 1947 is a good technique to get rid of the confusion that comes with industry. As India gradually evolves with the introduction of various sectors, it has become vital to ensure that the industries run properly in order to aid the country’s economic development. The Industries Dispute Act of 1947 plays an important role in this regard, not only by laying forth regulations for regulating the operation of an industry, but also by establishing methods for resolving conflicts between employees and employers.


  1. Rachit Garg, Mechanism of settlement disputes under the Industrial Dispute Act, Blog iPleaders,
  2. Subhodh Asthana, Industrial Law, Industrial Disputes and Industrial Relations: ID Act, 1947, Blog iPleaders,
  3. Subha S, Settlement of Industrial Disputes, Economics Discussion,
  4. Akshay Batheja, Industries Disputes Act, 1947, Legal Service India,,only%20to%20the%20organised%20sector.
  5. Diva Rai, Settlement of industrial dispute between employer and employee, Blog iPleaders,  
  6. Nitya Bansal, Mechanisms For Settlement Of Industrial Disputes, Legal bites,

[i] Workmen of Hindustan Lever Ltd v. Hindustan Lever Ltd, AIR 1999 SC 525.

[ii] Mathura Refinery Mazdoor Sangh v. Union of India, 1991 SCR (1) 468.

[iii] United Bleachers (P) Ltd. v. LC, (1962) IILLJ 130 Mad.

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