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Alternative Dispute Resolution (ADR) refers to a wide variety of processes for resolving disputes that allow opposing parties to present their arguments without resorting to litigation. It involves the use of a neutral third party to assist in reaching a mutually agreeable resolution. ADR can alleviate the strain on courts caused by excessive litigation and provide a comprehensive and satisfactory outcome for all parties involved. It allows individuals to maintain social order, collaborate, and provides an opportunity to minimize hostility. According to the World Bank Group, "ADR is a wide range of means to resolve conflicts that are short of formal litigations."

The Industrial Dispute Act of 1947 was enacted with the aim of providing a legal framework for resolving industrial disputes and ensuring fair wages and other protections for workers. The Act includes provisions for investigating and settling such disputes. According to the section 2(k) of the act, “the industrial disputes mean any dispute or difference between employers and employees or between workman or employer or between workman or workmen, which is connected with the employment or non-employment or with the condition of labour, or of any person."

There are two main of reasons for Labour disputes:

Economic: Wage, bonus, and allowance related disputes are examples of economic disputes.

Non-economic: Disputes over ill treatment of workers, discipline, victimisation, political factors etc.

Conciliation in Industrial Dispute

The Industrial Disputes Act, 1947 introduced the concept of Alternative Dispute Resolution (ADR) in labor disputes in India. The legislation recognizes conciliation as a legally recognized and effective method of resolving disputes between workers and management. The Act encourages disputing parties to attempt to settle their disputes through negotiation and, if unsuccessful, through the assistance of a government officer in a conciliation process before resorting to litigation. Various provisions in the Act facilitate the conciliation process and enhance its prospects for success.

Section 4 of the industrial dispute act, 1947 provides provisions for appointment of the Conciliation officers:

"1) The appropriate Government may, by the notification in the Official Gazette , appoint such a number of persons as it thanks fit, to be conciliation officers , charged with the duty of mediating in and promoting the settlement of industrial disputes.

2) A Conciliation officer may be appointed for a specified area or for specific industries in a specified area or for one or more specified industries and either permanently or for a limited period."

Section 5 grants authority to ''appropriate govt." to constitute a Board of conciliation, for promoting the settlement of an industrial dispute. 

According to section 5, "Boards of Conciliation - 

(1) The appropriate Government may as occasion arises by notification in the Official Gazette constitute a Board of Conciliation for promoting the settlement of an industrial dispute. 

(2) A Board shall consist of a chairman and two or four other members, as the appropriate Government thinks fit.  

(3) The chairman shall be an independent person and the other members shall be persons appointed in equal numbers to represent the parties to the dispute and any person appointed to represent a party shall be appointed on the recommendation of that party: 

Provided that, if any party fails to make a recommendation as aforesaid within the prescribed time, the appropriate Government shall appoint such persons as it thinks fit to represent that party. 

(4) A Board, having the prescribed quorum, may act notwithstanding the absence of the chairman or any of its members or any vacancy in its number: 

Provided that if the appropriate Government notifies the Board that the services of the chairman or of any other member have ceased to be available, the Board shall not act until a new chairman or member, as the case may be, has been appointed"

Section 12 describes the duties of conciliation officers.

According to this section-

1) If a labour dispute exists or is apprehended, the conciliation officer may hold conciliation proceedings if the dispute involves a public utility service and a notice under section 22 has been issued.

2) The conciliation officer shall conduct an investigation in order to reach an amicable settlement of the dispute.

3) If a settlement is reached, the conciliation officer must send a report to the appropriate government or an officer authorised by the appropriate government, along with a memorandum of the settlement signed by the disputed parties.

4) If no such settlement is reached, the conciliation officer shall send a report to the appropriate government stating the reasons why, in his opinion, a settlement could not be arrived at.

5) The report must be submitted within 14 days of the start of the conciliation proceedings, or within such shorter period as the appropriate government may fix.

By virtue of Section 18 of the Act, the conciliation award under this Act is a binding instrument and has the same value as the decree of the court.

Arbitration in Industrial Dispute

Arbitration is another ADR process where an impartial third party, known as arbitrator, settles the dispute. In arbitration, an award is made, which is known as an arbitral award that is legally binding on the parties. Arbitration is a highly effective way of resolving disputes because it is generally faster than litigation in court.

There are two types of arbitration:

Voluntary Arbitration: Where the parties themselves agreed to appoint an arbitrator, to settle their disputes.

Compulsory Arbitration: Compulsory arbitration is one in which the parties are forced to accept arbitration regardless of their willingness. For example, in cases where the government instructs the two parties to use the arbitration process.

Section 10A of Industrial Disputes Act, 1947 provides provisions for Voluntary reference of disputes to arbitration. It states:

·       Where an industrial dispute exists or is apprehended, the employer and the workman agree to refer the dispute to arbitration, they may refer the dispute to arbitration at any time before the dispute has been referred under section 10 to a Labour Court or Tribunal or National Tribunal by a written agreement, and the reference shall be to such person or persons (including the presiding officer of a Labour Court or Tribunal or National Tribunal) as an arbitrator or arbitrators as may be specified in arbitration agreement.

·       If the arbitration agreement provides for the dispute to be referred to an even number of arbitrators, the agreement shall provide for the appointment of another person as umpire who shall enter upon the reference if the arbitrators are evenly divided in their opinions, and the award of the umpire shall prevail and be deemed to be the arbitration award for the purposes of this Act.

·       An arbitration agreement must be signed in the manner prescribed by the parties.

·       A copy of the arbitration agreement shall be forwarded to the appropriate government and the conciliation officer, and the appropriate government shall publish the same in the Official Gazette within one month of receipt of such copy.

·       The arbitrator or arbitrators shall investigate the dispute and submit the arbitration award, signed by the arbitrator or all of the arbitrators, to the appropriate government.

·       When an industrial dispute is referred to arbitration, the appropriate government may, by order, prohibit the continuation of any strike or lock-out in connection with the dispute that may be in place at the time of the reference.

References:

https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID4159133_code3388300.pdf?abstractid=3761618&mirid=1

https://blog.ipleaders.in/role-conciliation-arbitration-industrial-dispute-resolution/

https://viamediationcentre.org/readnews/NDQ5/Settlement-of-Industrial-dispute-through-Arbitration-and-Conciliation