Dispute Resolution under Industrial Relations Code: A Mixed Bag of Hits and Misses?
[Mitali is a third-year student at Dr Ram Manohar Lohiya National Law University, Lucknow.]
Labour relations in India have been infamous for being governed by a labyrinth of rules and regulations. This anomaly has carried forward to the labour dispute resolution regime, which consists of multiple adjudicating authorities with disjointed and overlapping powers under the Industrial Disputes Act 1947 (IDA).
The new Industrial Relations Code 2020 (IRC) attempts to do away with these complexities by streamlining the dispute resolution procedure. This article aims to bring out the contrast between dispute resolution under the IDA and the IRC, while also trying to assess the possible impact of these changes.
Under both the IRC and the IDA, labour dispute resolution can be put under three tiers. The first tier includes preventive forums which rely on dispute redressal by workers and employers themselves. The second tier consists of conciliation where a third party mediates the disputes between two disputing groups. The third tier consists of adjudication by courts.
Both the IDA and the IRC envision two in-house bodies for dispute resolution - the Grievance Redressal Committee and the Works Committee. Although the duties of these bodies remain the same, changes have been made to their constitution.
Grievance Redressal Committee (GRC)
GRC is the first forum to redress individual disputes. The deciding body comprises workers and employers. All industrial establishments with 20 or more workers (non-managerial workforce) are required to constitute GRCs. The IDA requires GRC to have a maximum of 6 members as compared to the proposed cap of 10. Both legislations require GRC to have equal representation from workers and employers. Both advocate proportionate representation of women in GRC. However, Section 4 of the IRC makes the representation requirement very specific by mandating that the representation of women workers shall not be less than the proportion of women workers to the total workers employed in the establishment.
Further, under the IDA, upon an unsatisfactory decision of the GRC, the worker could appeal to the employer. Allowing the employer to hear an appeal against the decision of GRC was uncalled for as it vested unchecked decision-making power in a single person instead of a balanced body of people. The IRC has done away with this provision, allowing the worker to make an application for conciliation under Section 4(8) once proceedings before GRC are over or once GRC has failed to decide within 30 days. The IRC also brings clarity in the decision-making process of GRC as Section 4(7) provides that the decision of GRC should be based on the majority and that such a decision should enjoy the support of more than half of the members representing the workers (although this has become a cause of concern for employers as there is potential of abuse of this provision by workers).
The primary task of the Works Committee is to maintain amity and goodwill amongst the workers and employers. Pursuant to this, it can comment on matters of common interest and attempt to discuss and negotiate any material difference of opinion relating to such matters. The mandate of the Works Committee has remained the same in the IRC, i.e., only an industrial establishment with 100 or more workers is required to constitute a Works Committee on the issuance of orders by the appropriate government.
The IRC with regards to Works Committee has failed to realize the realities of the present times. Formation of a Works Committee only through government orders defeats the need to have a body to maintain harmony between workers and employers.
Conciliation is a step-up in the labour dispute resolution cycle as an outsider attempts to mediate the dispute between the parties by giving suggestions and advice. Conciliation under the IDA is done by two bodies - Conciliating Officer and Board of Conciliation. The difference between the powers and duties of the Conciliating Officer and the Board of Conciliation is marginal. Therefore, the IRC removes the Board of Conciliation altogether.
Under Section 12(4) of the IDA, the Conciliation Officer has to conclude conciliation in 15 days, unless the parties agreed otherwise. Whereas Section 13(5) of the IDA allows the Board of Conciliation to conciliate the dispute within 60 days, Section 53 of the IRC has found a mid-way, requiring conciliation to conclude within 45 days. However, in cases where the reference to conciliation relates to strike and lock-outs, the conciliation should be completed within 14 days. This sits well with India’s intention to boost labour productivity, as it will ensure that the disputes causing suspension of work do not drag on for too long and are settled as expeditiously as possible.
Although the IRC works towards doing away with multiplicity of forums, it fails to address the biggest folly of labour conciliation in India. It makes no effort to streamline the process of conciliation. There is a dearth of well-trained conciliators. Unfortunately, the conciliating officers in labour disputes are reduced to “postman/postwoman whose only work is to refer disputes to the government”. The conciliation process is also not equipped to deal with situations such as the pandemic, as it makes no provision for online conciliation. Although India has made significant strides in online dispute resolution, its growth will not translate into better labour conciliation unless specialized attention is given.
The IDA consists of two different bodies for dispute adjudication- Labour Courts and Tribunals. Both Labour Courts and Industrial Tribunal have one presiding officer each.
The IRC, however, has done away with Labour Courts. The Industrial Tribunal will operate in place of tribunals as well as Labour Courts. The Industrial Tribunals will consist of two types of benches, i.e., one-member bench (comprising one judicial member) or two-member bench (comprising one judicial and one administrative member).
Further, the government under Section 49 the IRC can appoint two assessors to advise the tribunals. This is in contrast with the IDA where the court, as well as the government, could appoint assessors having specialized knowledge of the matter. The appointment of assessors by the government seems unnecessary, especially since IRC is trying to reduce government interference in labour disputes. This change was also advised against by the Standing Committee of Parliament.
Under the current regime, Labour Courts and Industrial Tribunals have jurisdiction only when a reference under Section 10 of the IDA is made to it by the government. All matters specified in Schedule II are referred to Labour Courts while matters under Schedule III are referred to Industrial Tribunals. Item 6 of Schedule II pertains to “all matters other than those specified in the Third Schedule”, therefore giving residuary power to Labour Courts to deal with matters outside the scope of Schedules II and III.
Under IRC, the two-member bench will take up cases relating to standing orders, discharge/dismissal, strikes/lock-outs, retrenchment, closure, and trade unions. All the remaining cases will be taken up by a one-member bench. In case a two-member bench is unable to reach a consensus, Section 47 allows the appropriate government to appoint an additional judicial member. The matter will be decided by majority of the three members.
Even though constituting two separate benches for adjudication of different kinds of disputes resembles IDA, it is still a much-simplified version as it only enlists the matters to be decided by two-member bench while giving the residuary power to one-member bench. It also ensures that jurisdiction of the benches is not dependent on number of workers affected by the dispute. However, allowing adjudication by even numbered benches is a regressive step as adding on a member later in case of disagreements is a recipe for inordinate delays.
Scope of Government Interference
Under Section 10 of the IDA, the jurisdiction of Labour Courts and Industrial Tribunals arises only when the government refers disputes to them. Accordingly, their jurisdiction is confined to the terms of reference, and any adjudication beyond such terms is void. The IRC has done away with the requirement of reference. This move will help the government streamline labour disputes. This removes the element of discretion exercised by the government, and the jurisdiction will no longer be restricted by the ‘terms of reference’. This will help the court in settling all relevant matters at once. Lastly, it will help eliminate delays by the government in referring labour disputes for adjudication.
Section 55(4) of the IRC allows the government to reject or modify awards given by tribunals. This provision blatantly disregards the principles of separation of powers and independence of the judiciary. Section 17A of the IDA, a provision similar to Section 55(4), was struck down by the Madras HC and the Andhra Pradesh HC on two different occasions. Therefore, the government should have refrained from including Section 55(4) in the IRC.
The IRC has done a commendable job in reducing the multiplicity of adjudicating bodies. However, the finer details required to streamline labour disputes are still missing. For example, there is no emphasis on improving the condition of the Works Committee or ensuring well-trained conciliating officers. Although the IRC abolished Labour Courts, the creation of a two-member bench in tribunals might result in frequent indecisiveness and eventual delays. Similarly, doing away with government reference is a good step, but the power of the government to modify awards does little to ensure non-interference by the government. Although IRC has several chinks in its armour, it is still a significant step towards creating a more efficient labour dispute regime.
 Ernesto Noronha and Premilla D’ Cruz, ‘Mediation and Conciliation in Collective Labor Conflicts in India’ in Martin C. Euwema and others (eds), Mediation in Collective Labour Conflicts (Springer, 2019).  Standing Committee of Labour Report on The Industrial Relations Code (Eighth Report), 2019 (April 2020) 58.