The Industrial disputes Act 1947, was enacted in the post-independence era with
a view to regulate the relationships of the employer and employee and to
maintain peace and harmonious relations between the two. Earlier the growth was
very slow but in recent years it has taken grown due to growing cases in the
Supreme Court. The growth of the country in the sense of economic development is
dependent upon the industries and the industries could only run smoothly when
there is a harmonious relationship between the two pillars.
Causes of Industrial Disputes:
We can classify the causes of industrial disputes into two broad groups:
(i) Economic causes, and
(ii) Non-economic causes.
Economic causes include:
(iii) Dearness allowance,
(iv) Conditions of work and employment,
(v) Working hours,
(vi) Leave and holidays with pay, and
(vii) Unjust dismissals or retrenchments.
Non-economic causes include:
(i) Recognition of trade unions,
(ii) Victimization of workers,
(iii) Ill-treatment by supervisory staff,
(iv) Sympathetic strikes,
(v) Political causes, etc.
The percentage distribution of disputes by causes from 1973 onwards has been
shown in Exhibit 2 reveals the following causes of industrial disputes:
1. Wages and Allowances:
Since the cost of living has generally showed an increasing trend, the workers
have been fighting for higher wages to meet the rising cost of living and to
increase their standard of living. 34.1% of the industrial disputes in 1973 were
due to demand for higher wages and allowances. This percentage was 36.1% in
1974. During 1985, 22.5% of the disputes were due to wages and allowances. Wages
and allowances accounted for 25.7% of disputes in 1986, 26.6% in 1992, 25.0% in
1996 and 20.2% in 2000.
2. Personnel and Retrenchment:
Personnel and retrenchment causes have also been important. During 1973, 24.3%
of the industrial disputes were because of dismissals, retrenchment, etc. as
compared to 29.3% in 1961. In 1979, personnel and retrenchment topped the list
of causes of industrial disputes with 29.9%. The number of disputes because of
personnel and retrenchment was 32.0% in 1971, 23.1% in 1985 and 19.8% in 1996.
In 2000, about 12.1% of the disputes occurred due to dismissals, layoffs,
Bonus has been an important factor in the industrial disputes, 10.3% of the
industrial disputes in 1973 were because of bonus as compared to 6.9% in 1961.
13.8% and 15.2% of the disputes were due to bonus during 1976 and 1977
respectively. It is worth noting that during 1982 only 4.7% of the disputes were
due to bonus as compared to 7.3% in 1985. This percentage was 4.2 in 1992, 3.6
in 1996 and 8.5 in 2000.
4. Indiscipline and Violence:
The number of disputes because of indiscipline and violence among the workers
has been significant. During 1987, 15.7% of the disputes were because of
indiscipline and violence as compared to only 5.7% in 1973. During 1985, 16.1%
of industrial disputes were caused by indiscipline and violence and during 1996,
about 21.6% of the industrial disputes arose due to indiscipline and violence in
industrial undertaking. This shows that indiscipline and violence have continued
to be a serious problem in industry during the past two decades.
5. Leave and Hours of Work:
Leave and hours of work have not been so important causes of industrial
disputes. During 1973, 1.5% of the causes were because of leave and hours of
work. Their percentage share in the industrial disputes was 2.2% in 1977, 1.8%
in 1985, 2.2% in 1996 and 0.9% in 2000.
6. Miscellaneous Causes:
Miscellaneous causes include modernisation of plant and introduction of
computers and automatic machinery recognition of union political factors, etc.
These factors have caused a significant number of industrial disputes in the
country, 24.1% of the industrial disputes in 1973 were due to miscellaneous
causes. They accounted for 19.5% of the industrial disputes in 1977, 29.2% in
1985, 27.8% in 1996 and 33.2% in 2000.
Miscellaneous causes of industrial disputes are as follows:
(a) Workers’ resistance to rationalisation, introduction of new machinery and
change of place of factory.
(b) Non-recognition of trade union.
(c) Rumours spread out by undesirable elements.
(d) Working conditions and working methods.
(e) Lack of proper communication.
(f) Behaviour of supervisors.
(g) Trade union rivalry etc.
Thus, industrial disputes do not arise only when workers are dissatisfied on
economic grounds, they also arise over issues which are of non-economic nature.
Instances may be quoted when strikes where successfully organised to protest
against the management’s decision to change the location of the plant from one
state to another. Similarly, even causes like behaviour of supervisor and trade
union rivalries may give rise to industrial disputes.
The whole concept of industrial relations revolves around the principle of
friction dynamics which is the key to the establishment of harmonious relations
between labour and management. We cannot think of any society completely
obliviant of some sort of friction between labour and management.
Measures to Improve Industrial Relations:The following measures should be taken to achieve good industrial relations:
1. Progressive Management:
There should be progressive outlook of the management of each industrial
enterprise. It should be conscious of its obligations and responsibilities to
the owners of the business, the employees, the consumers and the nation. The
management must recognise the rights of workers to organise unions to protect
their economic and social interests.
The management should follow a proactive approach, i.e., it should anticipate
problems and take timely steps to minimise these problems. Challenges must be
anticipated before they arise otherwise reactive actions will compound them and
cause more discontent among the workers.
2. Strong and Stable Union:
A strong and stable union in each industrial enterprise is essential for good
industrial relations. The employers can easily ignore a weak union on the plea
that it hardly represents the workers. The agreement with such a union will
hardly be honoured by a large section of workforce. Therefore, there must be a
strong and stable union in every enterprise to represent the majority of workers
and negotiate with the management about the terms and conditions of service.
3. Atmosphere of Mutual Trust:
Both management and labour should help in the development of an atmosphere of
mutual cooperation, confidence, and respect. Management should adopt a
progressive outlook, and should recognise the right of workers.
Similarly, labour unions should persuade their members to work for the common
objectives of the organisation. Both the management and the unions should have
faith in collective bargaining and other peaceful methods of settling industrial
4. Mutual Accommodation:
The right of collective bargaining of the trade unions must be recognised by the
employers. Collective bargaining is the cornerstone of industrial relations. In
any organisation, there must be a great emphasis on mutual accommodation rather
than conflict or uncompromising attitude. Conflicting attitude does not lead to
amicable labour relations; it may foster union militancy as the union reacts by
engaging in pressure tactics. The approach must be of mutual “give and take”
rather the “take or leave”.
5. Sincere Implementation of Agreements:
The management should sincerely implement the settlements reached with the trade
unions. The agreement between the management and the unions should be enforced
both in letter and spirit.
6. Workers’ Participation in Management:
The participation of workers in the management of the industrial unit should be
encouraged by making effective use of works committees, joint consultation and
other methods. This will improve communication between managers and workers,
increase productivity and lead to greater effectiveness.
7. Sound Personnel Policies:
Personnel policies should be formulated in consultation with the workers and
their representatives if they are to be implemented effectively. The policies
should be clearly stated so that there is no confusion in the mind of anybody.
The implementation of the policies should be uniform throughout the organisation
to ensure fair treatment to each worker.
8. Government’s Role:
The Government should play an active role for promoting industrial peace. It
should make law for the compulsory recognition of a representative union in each
industrial unit. It should intervene to settle disputes if the management and
the workers are unable to settle their disputes. This will restore industrial
Scope and Extent of the Industrial Disputes act 1947
The Industrial disputes act of 1947 extends to the whole of India. It came
into enforcement on 1st April 1947
Principal objects as stated by the Supreme Court in the case of Workmen of
Dimakuchi Tea Estate vs. Management of Dimakuchi Tea Estate
AIR 1958 SC
1) The act aims to promote the measures which are helpful in securing good and
amity relations between the employer and the employee.
2) An investigation and settlement of disputes between an employer and the
employee, employer and workmen, workmen and workmen and giving them the right of
representation in the trade unions.
3) The legislation also tries to do away with illegal strikes and lockouts.
4) It also helps to provide the relief to the workmen in the matter of lay off,
retrenchment, closure of undertaking, etc.
5) It helps to do Collective Bargaining.
The Industrial disputes act is social legislation which tries to maintain a
balance between the interests of the important pillars of the industrial
Written By: Sagar Gujjar