Group8-economichistorypaper.pdf

See discussions, stats, and author profiles for this publication at: https://www.researchgate.net/publication/276267207

Industrial Disputes Act, 1947 Research · May 2015 DOI: 10.13140/RG.2.1.5104.5282

CITATIONS

READS

0

18,462

5 authors, including: Shafin Shabir Naik Barcelona Graduate School of Economics 5 PUBLICATIONS   0 CITATIONS    SEE PROFILE

Some of the authors of this publication are also working on these related projects:

Police Strength and Ethnic Conflicts: Effect of increase in number of police personnel on riots View project

All content following this page was uploaded by Shafin Shabir Naik on 13 May 2015. The user has requested enhancement of the downloaded file.

2014

Industrial Disputes Act, 1947 An Ambivalent Institution Industrial Disputes Act, 1947, is an institution, enacted to make provisions for the investigation and settlement of industrial disputes. The paper tries to identify some of the determinants of industrial disputes, such as strikes and lock-outs, and illustrates the vital significance of resolving or minimizing such disputes. The study examines the institutional change in the Industrial Disputes Act, 1947, focusing on why amendments were necessary to the Act, and aiming to achieve an understanding of the economic performance of the society after the implementation of the Act over time.

Compiled byShafin Shabir Shashank Gupta Vaishnavi Nair Varushi Jain Vishaka Agarwal

Contents

S.NO

Particulars

Page No.

1.

Introduction

3

2.

History and formation

4

3.

Industrial Disputes Act, 1947- An Overview

6

4.

Economic Rationale

8

5.

Causes

11

6.

Amendments- Overview and Reason

14

7.

Impacts

16

8.

Settlement

18

9.

Prevention

22

10.

Conclusion

24

11.

References

25

2|Page

INTRODUCTION History is a continuous dialogue between past and present1, and our main aim of studying history is to inform the present. “Economic history can be thought of as a search for understanding of the nature of economic activity in the past. Such study is intrinsically rewarding but also can be useful in shedding light on questions of relevance to economic policy makers.” (N.F.R Crafts) But, the society cannot just function on economic theory; we need an amalgam of economic, political and social theory which shapes the way a society functions. In other words, we need effective institutions. Institutions are made up of formal rules and informal norms of behaviour, and their enforcement characteristics (Douglass North), which structure human interactions and provide incentives and disincentives for people to behave in a particular manner. Hence, an effective institution provides that incentive and structure for economic, political and social activity. Laws, constitutions, regulations, which are specified and defined precisely, constitute the formal part. While, informal part includes norms, and the understandings of these norms that govern the behaviour of the people. The evolution of a society over time is dependent on the institutional change and hence is helpful in understanding the historical change. When an institution evolves it has the ability to enhance the performance of the economy. Now, there may be times when these institutions do not prove to be as efficient as expected. It is well known that the structures that evolve overtime have both positive and negative effects. The bad performance of an institution is due to poor enforcement of the law, regulations, or the norms which mainly arise due to poor understanding of that particular institution. On the other hand, an

1

Carr EH. 1967. What is History?

3|Page

institution performs well due to lower costs of information and better awareness and increased knowledge of the polities. As economic historians, in this study we will examine an institutional change in the Industrial Disputes Act, 1947. How this change in the Act impacted the past and further influences the present and the future. In the later sections, there is also a discussion on how the Act was amended in order to illustrate the effects of the same. The main objective of the study is to achieve an understanding of the economic performance after the implementation of the Act over time. This study also takes into consideration the importance of labour and the regulations essential for a peaceful and healthy work environment. In an industry, the work environment cannot always be peaceful. There is always conflict of interests, and these conflicts result in disputes. Since this dispute is connected with the condition of the labour and is between the employer and the employee, it can be referred to as an industrial dispute. The question to be asked now is, how to prevent such disputes from taking place. The forth coming sections of the paper will focus on this issue. The next section of the paper ponders over the details of the Act, defines it and explains how the Act came into existence. The origin, the rationale behind the formation of the Act, its determinants, outcomes, and the amendments made and the reasons for these amendments follow next.

History and formation The origin of Industrial Disputes Act 1947 can be traced back to the existence of the monopolist traders in India, that is, The East India Company. Due to cheap labour and raw material, India 4|Page

became the hub for the production of a variety of products which was later sold to international markets at high prices. This helped East India Company to make huge profits. Indians at that time produced and exported some of the most desirable fabrics which posed a threat to the British Crown. Hence, the British decided to cut off this competition by imposing duties and tariffs on Indian cloth. This was a huge set back to the Indian economy. Not only did the British impose excise duties but they also flooded the Indian markets with cheaper fabric produced at the new steam mills in Britain. Since then the legislations enforced on Indians were more severe than the ones followed in Britain. This led Indian weavers to face complete isolation from international markets. Hence, instead of exporters of finished products, India became importer of British goods. Before delving in more detailed history, we must know the meaning of Industrial Relations (IR). It was defined by Clegg in 1979 as “the study of rules governing the employment, together with the ways in which the rules are made and changed, interpreted and administered. Put more briefly, it is the study of job regulation.” (Clegg, 1979: 1). From this definition it is clear that employment relationship is central to industrial relations. As IR gained importance at the time of stable employment and unionized labour force in the manufacturing plants, it emphasized more on public policies relating to the problem of labour control inside the workplace. The main objective of the industrial relation legislations in India was to provide the economy with a protected and bonded labour market. These series of these legislations include the following acts; Merchant Shipping Act (1859), Workmen’s Breach of Contract Act (1860), Workmen’s Dispute Act (1860), Indian Factories Act (1881), Trade Unions Act (1926), Trade Disputes Act (1929), Trade Disputes (Extending) Act (1934), and Trade Disputes Amendment Act (1938). Failure of the above mentioned acts drew a lot of attention as there was an urgent 5|Page

need to maintain peace and harmony within the industry in order to avoid further harm to the Indian economy. Hence, the formation of Industrial Disputes Act, 1947 came up in the priority list of the Government.

Industrial disputes act, 1947- An Overview Industrial Disputes Act formulated in 1947 was enacted “to make provision for the investigation and settlement of industrial disputes, and for certain other purposes.” 2 It provides a systematic institutional design for the prevention and settlement of disputes that arise in an industry. But how does this Act define an industry? What is an industrial dispute? To answer this question we turn towards the definitions of these terms under the Act. 1. Industry-Section 2(j) of the Industrial Disputes Act of 1947 defined industry as “any business, trade, undertaking, manufacture, calling of employers, and includes any calling, service, employment, handicraft, industrial occupation or avocation of workmen.” This definition is very broad. It fails to capture all organisations that may or may not come under an industry. For these types of organisations the definition of an industry has been constantly modified by the judgements3 given by various High Courts and Supreme Court. We also have an amended definition of an industry as per Industrial Disputes (Amendment) Act, 1982 .It defines industry as any systematic activity carried on by cooperation between an employer and his workmen (whether such workmen are 2

Preamble, THE INDUSTRIAL DISPUTES ACT, 1947 ACT NO. 14 OF 1947 1* [11th March, 1947.] Some Judgements in this regard are- State of U.P VS Jai Bir Singh, (2005) 5; Executive Engineer (State of Karnataka) VS K. Somasetty, (1997); Tourism Department VS Industrial Tribunal, Kollam (2005); Bangalore Water Supply & Sewage Board VS A. Rajappa, (1978); Corpn. Of City of Nagpur VS Employees, AIR 1960 SC 675: (1960) 1 LLJ 523; Baroda Borough Muncipality VS Workmen, AIR 1957 SC 110; (D.N. Bannerjee) BudgeBudge Muncipality VS P.R.Mukherjee, AIR 1953 SC 58. 3

6|Page

employed by such employer directly or by or through any agency, including a contractor) for the production, supply or distribution of goods or services with a view to satisfy human wants or wishes (not being wants or wishes which are merely spiritual or religious in nature.”4 This definition also has its loopholes and has been subject to modification through judgements. Discussing them is beyond the scope of this paper. 2. Industrial Dispute- Section 2(k) of the Industrial Disputes Act defines industrial dispute as “any dispute or difference between employers and employers, or between employers and workmen, or between workmen and workmen, which is connected with the employment or non-employment or the terms of employment or with the conditions of labour, of any person;..”5 Normally workmen raise a claim which their employer refuses to honour. This claim is termed as an industrial dispute. A claim can also be raised by workers who have been fired or for some reasons have left the industry6.A good reader might notice that so far we have only talked about collective disputes of workers against employers. But there also cases where individual disputes are treated as industrial disputes as in Western Co. VS Worker’s Union7. According to this judgement, an individual dispute can be treated as an industrial dispute if and only if it is taken up by a large number of workers or a registered body of workers like Trade Unions.

4

Industrial Disputes Act,1947 in P.L.Malik's Industrial Law, Volume 2, Page 1986-1987, 24th Edition,2013, Eastern Book Company 6 Industrial Disputes Act,1947 in P.L.Malik's Industrial Law, Volume 2, Page 1986-1987, 24th Edition,2013, Eastern Book Company 6 Traingular Motors Ltd. VS Bombay Automobile Employees' Union, 2 FJR 179 (LAT) 7 SCC 1 255 (1970); AIR 1970 SC 1205; (1970) 2 LLJ 256.

7|Page

Economic rationale The economic rationale behind the formulation of Industrial Disputes Act is simple. Without a proper mechanism in place for the resolution of industrial disputes, they can harm the harm the economic growth rates of a country. Strikes and lockouts cause massive losses to the country as they decrease the level of production in the economy and therefore decrease the GDP. Given below is a closer analysis of the economic rationale behind the working of the act. 1. Collective bargaining- It is a process whereby trade unions, representing workers, and employers through their representatives, treat and negotiate with a view to the conclusion of a collective agreement or renewal thereof or the resolution of disputes.8 The labourers come together and form a union, and the representatives of these unions negotiate with the employer on issues concerning wage raise, work environment, sanitation facilities, health and safety, working hours, etc. More essentially, trade unions use collective bargaining as a set of rules which keep the labour in the workplace regulated, disciplined and remunerated. Occasionally, in the process of bargaining, employers deliberately pull out from the ongoing negotiations due to strategic reasons, these deliberate acts cause tension and friction between both the parties. This havoc then takes the form of strikes, lockouts, work stoppages and various other forms of agitations. Industrial dispute is the outcome of all such conflicts between the employers and employees. 2. Strikes and lock-outs - The protests of the labourers in the form of strikes and lockouts cause a massive economic loss, in terms of production, profits generated, GDP, to the economy. These strikes and lockouts are harmful both to the employers and the

8

Section: Module 2 - The Collective Bargaining Process. http://www.ilocarib.org.tt/Promalco_tool/productivitytools/manual10/m10_3.htm.

8|Page

employees. Disputes tend to reduce organisational profits. Often, both the parties have different information and understanding of gains from bargaining which results in disputes that are unavoidable. Nonetheless, it is important to reduce the duration of the disputes with the introduction of additional policies. A common notion that thrives amongst us is, stronger trade unions tend to increase the chances of strikes and disputes taking place, but this may not be true. On the one end, a strong trade union poses a colossal threat of going on a strike; whether this threat is carried out or not, depends on how strong and cooperating the opponent is. The negotiations tend to go well if the employers are all ears and intent on solving the issue. If the situation is the opposite the threat of a strike taking place increases. The implementation of the threat is dependent on what the expectation of the workers is, from the outcome of the strike. A vital point to note is, higher the threat of a strike, higher is the probability of making the employers willing to negotiate. This in turn reduces the possibility of a strike. On the other end, for the employer, imposing lock-outs becomes difficult due to confrontations from the strong trade unions. Hence, it is in the hands of the trade unions to turn a negotiation into a dispute. What is essential to understand is that without trade unions, all the surplus earned would be bagged by the employers and this is highly unjust even though it is dispute free. Trade unions formation, therefore, has its own advantages and disadvantages in the industrial world. Collective bargaining between the employers and employees has the same effects. If the employer has a higher bargaining power, then the odds of lock-outs taking place increase. On the contrary, a strong union with greater bargaining power can lead to a

9|Page

negotiation between the two. But if the negotiations go bad, the consequences are well felt. 3. Man-days- Another issue that we need to focus on is the man-days lost due to strikes and lock-outs. Man-days are the days regarded in terms of the amount of work a worker can perform in this period, which essentially means the number of days lost per worker per day. Table 1 gives the number of disputes, which includes the number of strikes and lockouts, in India ranging from 1947- 1961. The table also includes the number of mandays lost and the number of workers involved at the time of the strikes and lockouts. The year of 1947 was the peak of industrial unrest with the total number of disputes of 1,181 which resulted in the loss of 1.62 million man-days.

Source: Labour Year Book and Indian Labour Journal

10 | P a g e

In order to reduce such negative effects on the economy, we need an intervention. In cases as these, the intervention is from the Government. Industrial Disputes Act, 1947 was formed and implemented for all such reasons. The vital significance of the Act will be explained in the upcoming sections.

Causes Industrial disputes can arise between employer-employer; employer-employee; and employeeemployee. A manner to categorise causes of an industrial disputes can be economic and noneconomic. Economic causes include issues relating to rightful compensation such as, wages and allowances, the conditions of work, bonus, leave or holidays without pay, working hours, unjust layoffs or retrenchments and so on. Undisciplined behaviour of the workers, victimization, political factors are some of the items that come under non-economic causes of an industrial dispute. We here focus more on the other categorization of the causes of an industrial dispute- industrial factors and management factors. These are stated below1. Industrial factors- These mainly include different forms of protests. Strikes, gheraos, etc. are the protest from the workers side where strikes, are a form of protest where employees with same interests come together and stop working in order to get their demands fulfilled by the employee and gheraos is a form of industrial action wherein employees imprison or surround their employers in a premise until their demands are met or until they get satisfactory answers. Retrenchments, lockouts, dismissals, etc are also a 11 | P a g e

form of protest but from the employers’ side. Retrenchment means removing or firing some employees from a department in order to cut the expenses. Lockouts are an act performed by the employers during a dispute wherein

Figure 1- Source: http://www.populstat.info/Asia/indiac.htm

they do not allow any employees to work or even enter the work premises, either by changing the locks or by keeping heavy security around the premises. Basically lockouts mean that industry stops functioning. Dismissals are the act of terminating or removing an employee from an industry without his/her will. One of the main reasons as to why an employers’ union or an employees’ union have to take such adverse steps can be accounted from many reasons. One of the reasons could be low wage rate. The wage rate that an employee gets does not rise in proportion to the rise in prices of goods. As we can see from Figure 1, the population decreased till 1920 which was in proportion to the wage rate. But after 1920 the population kept on increasing which failed to keep pace with the stagnant wage rate levels, thus leaving the employees and their families in a situation where they had to struggle for their survival. For example, a family which earlier had five members now had ten. They found it difficult to meet their ends with same income. So, an increase in the wages became a necessity for the employees and their families to survive. Employees were now desperate to earn more

12 | P a g e

money and were ready to work extra to earn bonuses. Employers acted greedily and did not fulfil the demands of workers, which created disputes between workers and employers. Apart from low wages, working hours, employee privileges, bonuses, security in jobs, safety measures in factories, canteen, leave and holidays with pay, etc. were some other measures that led to ugly disputes between the employers and the workers. 2. Management’s attitude- Due to lack of proper communication between management and workers even a small dispute would take longer time to arrive at a settlement. Employees, thus, felt alienated from the industry and led to increased number of disputes. Managements were unwilling to recognize any groups or associations formed by the employees like the trade unions due to which such unions tend to take major steps in order to get noticed and so that their grievances are heard by the higher authorities, which harmed the management ,the employees and in turn the nation adversely. These sometimes also lead to conflict between the unions as well. The management was quite adamant about the recruitment, promotions, etc. and insisted on the fact that these decisions are to be made by the management only without the consultation or assistance from any of the employees, not even the leaders appointed in the unions. Once again these unions were left unheard. Management debarred the employees from services and benefits which they deserve, like bonuses for good work, extra wage for overtime, promotions for constantly performing well, because of which the employees were less motivated to work. Their only motive left to work was to gain enough money to keep their ends meet as they knew that whatever amount of efforts they will put in, their work will never be appreciated for. This used to affect the quality and quantity of production.

13 | P a g e

Amendments- Overview and Reasons The Industrial Disputes Act, 1947 provides the machinery and procedure for the investigation and settlement of Industrial Disputes. The provisions of this act have been amended from time to time based on the experiences gained from various past judgements. The National commission of Labour in 1969 made an in-depth study on the various Industrial Relations and procedures leading to disputes between the employers and employees and decided to make changes in the act so that the resolutions of various Industrial Disputes could be made in a much speedier way. Hence, the commission proposed various amendments in the bill to amend the act in 1982. There were many reasons illustrated to amend the act. Interpretations of various terms in the original act were vague and hence needed to be made clear. For example, there were difficulties arising with the interpretation of the term “Appropriate Government”. Hence, a clear definition of the term was necessary; leading to the commission defining “Appropriate Government” to be the Central Government itself and no other Government could be referred to as the “Appropriate Government”. In the 1978, case of the Bangalore Water Supply & Sewerage Board vs. Rajappa, there were many misinterpretations of the term “industry”. Hence, there was a proposal made to redefine the term “industry” as well. As a result, certain institutions were excluded from the definition of this term like hospitals and dispensaries, educational, scientific, research or training institutes, institutions engaged in charitable, social and philanthropic services, etc. There was need to maintain in such institutions an atmosphere different from that in a commercial industry. Therefore, they were excluded from the industry. There was also a need for model grievances so that proper procedural grievance counselling could be offered to their employees by the 14 | P a g e

employers. Hence, a proposal was made that the grievance redressal procedure becomes mandatory for every industry employing a hundred or more workers. It was also proposed to fix a time limit for the adjudication of individual as well as collective disputes to sort out the delays involved in the entire process. These were the major amendments that were proposed in 1982 and then implemented in 1984. The major reason for the implementation of these amendments was to reduce the negative impact that the Industrial disputes had on the economy. Strikes and lockouts, which are a result of Industrial disputes cause a loss of output produced in the industry which in turn affects the economy as a whole. It causes the overall GDP of a country to suffer, based on the number of man days that have been lost as a consequence of these strikes. So, it is necessary to analyse whether there has been any impact as a result of these amendments proposed in the Industrial Disputes Act, 1947. It must be clear as to why any law or an act in general, is amended in the first place. It is done so as to make changes in the adjudication process and to provide benefits to both the parties to ensure a smooth running of the entire process. Hence, one of the major reasons the act was amended was to speed up the adjudication process, which made sure the disputes were solved at a much quicker rate. This helped the industries to function once again and reduce any damage that the dispute may have caused to the economy over this period of dysfunction. Amending the act also meant that it was supposed to have a major influence in reducing the number of strikes and lockouts but it was proved that it was not the case. As even though amending the act helped in better decision making on part of the courts; it didn’t really do much when it came to improving the relationships between the employers and the employees. Also, had the bill made any proposals regarding collective bargaining, wherein both the employer and employee have 15 | P a g e

equal say regarding matters of disputes, such as salary and perks, before taking it to the courts, there would have been a significant decrease in the number of industrial disputes. But, even then it is fair to say that by improving the adjudication process through these amendments, the economy of the country has improved in some way. Also, one would expect the number of disputes to fall as the settlement process speeds up, but a peculiar thing to notice is that the numbers of disputes rise. A possible way to look at is that if the cost of settling the dispute is reduced, and this process of settlement takes less time, at the same time, the cost of reporting a dispute may fall as well. This cut down in the cost of reporting would lead to an increased in the number of disputes reported.

Impacts Strikes and lockouts have a major say in a country’s economy as they result in the industry being shut down for a temporary period. This affects the overall production of a country. Strikes allow employers to dictate their own terms in the running of the industry, allowing them to locking out industries to maintain their personal profits.

16 | P a g e

Given above is a data chart that shows as to how much of an effect these strikes and lockouts have had on the overall production over the years. It can be observed from the set data, that the average number of strikes and lockouts has always had a general upward trend. It can also be observed that the number of lockouts have always dominated the number of strikes in reducing production. But the most notable observation that can be made here is that from the mid-eighties up to the early nineties there has been as much a decrease in man-days lost due to strikes as there has been an increase in the same due to lockouts. The reason for this is the major economic crisis that affected India during this period. So, to sustain the economy, the Government wanted to encourage emerging private investors. Hence, they decided to discourage strikes by declaring them illegal, which in turn empowered the employers. As a result of this, the number of lockouts in the country increased significantly. During this period about 47.6% of the strikes were unsuccessful as a consequence of the Government’s actions.

17 | P a g e

Settlement As mentioned earlier, costs associated with industrial disputes are high not only from employer and employees’ perspective but also from society’s perspective. It often leads to strikes, lockouts, etc. all of which lead to a loss in production. Despite all this, a harsh reality is that disputes

Conciliation

do arise in an industry. Therefore, we need a mechanism to settle them in a peaceful

Collective Bargaining

manner. This is done with the help of settlements as provided in the Act, are shown

Adjudication

in the diagram. All these processes are briefly discussed below. 1. Conciliation- It is the process of settling disputes internally in an industry which involves intervention of the Government. The Government has a power to appoint either conciliation officers or a Board of Conciliation for the purpose of conciliation. The aim of conciliators is to act as mediators between the workers and employers. They come up with recommendations for settling the dispute and share it with both the parties, i.e., management and workers. If the employees and employers agree on the recommendations, dispute is settled and Conciliating Officers send an official notification to the Government stating the terms of agreement. But if conciliators fail to convince workers and employees, then conciliators send report of failure to the Government and suggest following the process of adjudication for settling the dispute.

18 | P a g e

2. Collective Bargaining- Another method of settling the dispute internally is through collective bargaining. The difference between Collective Bargaining and Conciliation is the role of Government, while the latter is done after the intervention of Government, the role of Government in latter is non-existent. The process of collective bargaining involves following steps: a. Preparation of negotiations- Workers and management should take proper care in choosing the bargaining terms as the whole process is dependent on the terms of bargaining. Also both parties should have complete information regarding the process. Workers are normally represented by Workers’ Union and management can be represented by employers association or federation of employers. Before negotiations, both parties should meet amongst themselves and create a strategy for the process of bargaining. b. Negotiations- This process involves a series of meetings between the parties which ensures an exchange of ideas across board. This also involves giving threats, bluffing, etc. Bargaining continues as long as both parties come to an agreement. If they do come to an agreement, it formalised through a majority vote among the representatives of both parties. c. Drafting of Agreement- After this the agreement has to be drafted formally. This is a

• Negotiations

very complex process. Drafters have to draft it

• Drafting of Agreement

in such a manner that reflects the real intentions of both the parties. Also it has to be

19 | P a g e

• Preparation of Negotiation

• Implementation

an exhaustive document, stating every point of agreement in detail. d. Implementation- Laws are useless if not implemented. Same is the true for the end product of collective bargaining. Management and workers need to follow up to ensure the implementation of the draft. 3. Adjudication- It refers to settlement of a dispute by a formal authority, in this case a labour court or a tribunal. Labour Courts and Tribunals have the same function, i.e., to give verdict on an industrial dispute. However, they differ in matters of jurisdiction. Labour courts handle only those disputes that come under Second Schedule of Industrial Disputes Act (1947) while Tribunals handle disputes pertaining to Second as well as Third Schedule of Industrial Disputes Act (1947). The verdict or judgement given by the labour courts or tribunals is binding on both parties. Now let us look at some empirical data that has been put together regarding the method of settlement and the number of terminated disputes for the years 1958-1960. Figure 1 below shows that around 50% of the disputes were settled through Government intervention in 1958. But this proportion decreased to 36% in 1959 and increased in 1960 to 42%. Industrial disputes resolved through Mutual settlement, which mainly comprises of Collective Bargaining, has remained decreased from 25% in 1958 to 22% in 1960. A more surprising outcome is the increase in the number of disputes that have been settled using voluntary resumption9. Voluntary resumptions mean that workers return to work and employers end

9

“Others also include voluntary resumption.”-- Strikes in India by Pradeep Kumar, The Economic Weekly, October 3, 1964 20 | P a g e

lockouts10. Dispute settlement through voluntary resolution has increased from 20.5% in 1958 to 35% in 1960. It is also important to note that ‘others’ can also include techniques other than voluntary resolution.

Figure 2- Source: Indian Labour Journal, November, 1961, p 1050, October 1960, p 1084 Figure 2, illustrates the settlement of industrial disputes from the perspective of the method of settlement on a larger scale. It shows us a trend of settlement of disputes. One can easily observe that importance of voluntary resumption has increased in terms of dispute settlement and Government Intervention has been significant in solving the disputes. Collective bargaining, however, has remained stable in terms of dispute settlement.

10

http://labourbureau.nic.in/ID%202k7%20Chap%202%20Tab%202(IX).htm

21 | P a g e

Figure 3: Source- P.Sinha, Indu Sinha, Seema Shekhar, Industrial Relations, Trade Unions and Labour Legislation, 2009, Pg. 199, Pearson Education. Having looked at how the legal system handles the instances of disputes, let us now prospectively view the ultimate aim of the law, i.e. thwarting the future occurrences.

Prevention One of the objectives of Industrial Disputes Act, 1947 is to prevent industrial disputes. Also the cost of settlement of industrial disputes through formalised institutions is huge. Therefore, it is profitable for both the workers as well as employers to settle the disputes internally or prevent the industrial disputes from arising. One way to do this is through the formation of a Works 22 | P a g e

Committee. It is a body of representatives of employers and employees who ensure the development of a harmonious relationship between the workers and employers. It also helps in creating coordination as well as cooperation in the functioning of the industry which in turn leads to lesser number of disputes. One of the most important characteristics of Works Committee which gives it a democratic outlook is the equal number of representatives of workers and employers. Another way to prevent disputes is to the presence of a strong Trade Union. Employers must discuss the terms of employment and other

• Works Committee

Prevention • Participitation of Trade of Union for decision Industial making Disputes • Collective Bargaining

important policy decisions after consulting the Trade Union. This would ensure that the interests of workers are given due weightage which in

turn will lead to decreased number of disputes that arise within an industry.

The industrial disputes can be thwarted with the help of collective bargaining as well. We have already talked about it in the above sections. This takes us to the last section of the study which talks about the impacts both economic and social.

23 | P a g e

Conclusion This paper made readers aware of the complexity in the working of the legislation as well as the high costs that are associated with industrial disputes. This is one of the reasons for the decreasing trend in the settlement of industrial disputes through Government intervention. Nevertheless, as is true for every law, we can’t unequivocally say that this particular law has turned out to be positive or negative for the economy. On the one hand, the Act has increased the settlement rate from 92% in 1958 to 98% in 196011 and on the other hand number of strikes and lockouts has also increased. Thus, our analysis shows that the impact of Industrial Disputes Act, 1947 is ambiguous, thus the name ambivalent.

11

A per data in Figure 1.

24 | P a g e

REFERENCES North, Douglass C. The Role of Institutions in Economic Development. UNECE Discussion Papers Series No. 2003.2, October 2003. http://www.unece.org/oes/disc_papers/disc_papers.html.

N.F.R. Crafts is C.U.F. Lecturer in Economics at Oxford University. http://www.historytoday.com/paul-adelman/what-economic-history.

The Industrial Disputes Act, 1947. Act No. 14 of 1947 1*. [11th March, 1947.] http://pblabour.gov.in/pdf/acts_rules/inustrial_disputes_act_1947.pdf.

Causes of Industrial Disputes. http://www.naukrihub.com/industrialrelations/causes-ofindustrial-disputes.html.

Saha, Bibhas and Pan, Indranil. Industrial Disputes in India: An Empirical Analysis. Economic and Political Weekly, Vol. 29, No. 18 (Apr. 30, 1994), pp. 1081-1087. Published by: Economic and Political Weekly. http://www.jstor.org/stable/4401140.

Kumar, Pradeep. Strikes in India: An Analysis. October 3, 1964. The Economic Weekly. http://www.epw.in/system/files/pdf/1964_16/40/strikes_in_indiaan_analysis.pdf

25 | P a g e

Chand, Smriti. Industrial Disputes in India: its Causes and Measures. http://www.yourarticlelibrary.com/industries/industrial-disputes-in-india-its-causes-andmeasures/23437/.

Industrial Disputes Act, 1947 in P.L.Malik's Industrial Law, Volume 2, 24th Edition,2013, Eastern Book Company

http://www.wageindicator.org/documents/Labour_and_Employment_LawA_Profile_on_Pakistan.pdf - Iftikhar Ahmad

26 | P a g e

View publication stats