Industrial Disputes Act, 1947 - Overview, Structure, Properties & Uses

Industrial Disputes Act

Edited By Ritika Jonwal | Updated on Jul 02, 2025 05:37 PM IST

The legislation controlling labour laws that apply to all employees on the Indian mainland is the Industrial Disputes Act of 1947 under Industrial Law. It became operative on April 1st, 1947. There have always been disagreements between the employers, or capitalists, and the workers, which causes many disputes between and within these two groups. After the government was made aware of these problems, they chose to enact this Act. The main goals of this Act were to provide parties with a peaceful means of resolving their differences and to put an end to labour disputes.

This Story also Contains

Historical Background of the Industrial Disputes Act
Definition of Industrial Dispute
The objective of the Industrial Disputes Act
Scope of the Industrial Disputes Act
Applicability of the Industrial Disputes Act
Main Features of the Act
Techniques for Handling Industrial Disputes
Method of Adjudication
Landmark judgements under the Industrial Disputes Act;
Conclusion

Industrial Disputes Act

Historical Background of the Industrial Disputes Act

Workers have been exploited for longer than civilization has existed. Labourers and their groups have been fighting against this kind of exploitation for a long time, yet it still exists in some way. Industrial disputes were resolved by the Trade Disputes Act of 1929 before 1947.

The 1929 Act's operational experience exposed many flaws that required new legislation to fix. Consequently, the Legislature received a bill titled Industrial Disputes Bill. The Bill was to be reviewed by the select committee. The original Bill was amended in response to the Select Committee's suggestions. On March 11, 1947, the Industrial Disputes Bill, having been enacted by the Legislature, was ratified.

The Industrial Disputes Act, of 1947 (14 of 1947) went into effect on April 1st, 1947. It was passed to provide some protections for workers as well as procedures for looking into and resolving labour disputes. The Act is broken down into seven chapters with forty parts. Therefore, an industrial dispute is a clash or disagreement between workers and their bosses regarding their work conditions.

There's a conflict between the workers' advocates and the company's leaders. Both sides try to apply force against each other during a labour strike. Workers might engage in picketing, gheraos, or strikes, whereas bosses could resort to lockouts.

The Industrial Disputes Act of 1947 is a significant piece of law that aims to achieve industrial peace and equitable treatment for workers.

Definition of Industrial Dispute

A dispute, clash, or harm that occurs between a company and its workers, or among workers and their supervisors, or among workers and their fellow employees, which is connected to terms related to work or non-work aspects of business, or terms related to business that are influenced by a person's employment status, is considered an industrial conflict.

The objective of the Industrial Disputes Act

In India where industrial disputes are concerned. The Industrial Disputes Act, of 1947 is a very important one. The primary goals of the Act are;

To advocate measures that will ensure healthy relations between employers and employees.
To resolve conflicts between employers and employees through adjudicatory agencies.
To establish appropriate apparatus for the investigation and resolution of workplace disputes.
To avoid unlawful strikes and lockouts.
To assist workers facing layoffs, retrenchments, unjust dismissals, and victimisation.
To grant employees the right to collective bargaining and encourage conciliation.

Scope of the Industrial Disputes Act

To maintain industrial peace and harmony by setting up the tools and processes necessary for the examination and negotiation-based resolution of labour disputes. The Act also establishes:

The clause requires compensation to be paid to workers who are laid off, retrenchmented, or closed.
the process for getting the relevant government's prior approval before making layoffs, retrenchments, or closing down industrial facilities.
Unfair labour practices by employees, a trade union, or an employer.

Applicability of the Industrial Disputes Act

Regardless of the number of workers at a manufacturing plant, the Industrial Disputes Act governs every industrial site in India that is involved in any form of business, trade, production, or the sale of goods and services.
Every person employed by a business for compensation is protected by the law, this encompasses freelancers, trainees, and part-time employees engaged in any type of manual, clerical, skilled, unskilled, technical, operational, or managerial work.
Nonetheless, people who mainly work in leadership or administrative roles, those who manage or supervise others, those protected under the Army, Air Force, and Navy Acts, police officers, and individuals working in correctional facilities are not protected by this legislation.

Main Features of the Act

This Act offers detailed instructions and rules for fostering positive relationships and comprehension among employees and companies going forward. It sets out clear directions for the works committee, applicable to both employers and employees alike. Moreover, it guarantees to resolve any major disagreements in views on these issues.

Techniques for Handling Industrial Disputes

Methods, like arbitration, mediation, conciliation, and negotiation, can be employed to address conflicts in the workplace. The ability to choose any method to resolve labour disputes is a privilege held by every organization, its management, and the labour union.

1. Negotiation

Negotiation techniques that work well for settling labour issues. During a negotiation, the parties—employers or management and employees or their unions—rely on one another to overcome differences. Instead of feeling the need for a third party, both parties have faith and confidence in one another. This dispute-resolution technique prioritises conversation, particularly bilateral interaction, using non-governmental mediation. This conflict resolution process demonstrates a higher degree of maturity in the management-union relationship.

2. Conciliation

In this dispute resolution process, the employer and the union seek outside assistance from organisations like government agencies. The governmental body aids in enabling conversations among the management and labour unions and backs them throughout their negotiations. Bringing together the two conflicting groups in the sector is the main objective of mediation to stop further production problems, apathy, and tense relationships in the workplace. This approach to resolving industrial conflicts is employed when individuals cannot find a peaceful solution to their disagreements but wish to steer clear of the issues that come with a public dispute.

3. Mediation

Mediation is frequently employed when two parties in a dispute cannot reach an agreement or discover a reasonable solution. Mediation is a process for resolving workplace disputes with the assistance of an outsider. The mediator contributes constructively by gathering information from both parties (management and union), analysing their perspectives, and providing solutions or compromises.

4. Arbitration

After mediation and conciliation have failed, arbitration is a means of resolving conflicts between two or more parties at work. Conferencing is advisory in nature, whereas arbitration is judicial. In contrast to conciliation, which is advising in nature, arbitration is judicial. Section lOA of the Industrial Disputes Act, of 1947 stipulates that arbitration is voluntary in cases when parties have not resolved their issues via discussion and conciliation and agree to submit to arbitration.

Method of Adjudication

A three-tiered method of adjudication is provided under the Industrial Disputes Act of 1947;

Labour Courts
Industrial Tribunal
National Tribunal

1. Labor Court

The responsible government may, by notice, establish one or more labour courts to resolve labour disputes related to the subjects mentioned in the second schedule of the Act. The following list outlines the authority of labour courts:

Release or deal alleviation to improperly utilized or ended labourers.
Analyze whether strikes or standstills are lawful.
Maintain typical benefits and concessions.
Report labour issues to an appropriate government agency.

2. Industrial Tribunal

At least one Industrial tribunal might be laid out by the important government to determine work debates by notice. The accompanying issues are:

The responsibility of the industrial tribunal
Decrease in the workforce.
Rules and compensation allowances are provided.
Consideration of profit sharing and bonuses.
Workbooks that provide information about working hours and breaks.
Arrangement of wages and fortunate assets.
Quick procedures and ideal reports are shown to the state government.
The Industrial tribunal should facilitate its cycles and give its outcomes to the state government before the due date.

National Tribunal;

The central government might lay out national tribunals for public issues.
Courts handle questions including various states or impacted businesses.
Responsibility: Lead speedy hearings and present a report to the central government.

Landmark judgements under the Industrial Disputes Act;

Indian Bank vs. Management of Indian Bank 1985 1 LLJ 6 (Mad.)

It was noted that when a trade union official received privileges in the form of duties, the management withheld the benefits that were awarded to the privileged. It is not possible to argue that this has given birth to an industrial dispute, and the duty relief's legal standing is limited to that of a concession rather than anything to do with working conditions. In this instance, it was decided that if a concession is taken away, the recipient cannot claim that a condition of service is impacted, and the management is not allowed to bring up the issue without filing an industrial dispute and having the authority settle it.

Guest Keen William (Private) Ltd. vs. Sterling (P.J) and others

The Supreme Court ruled that a delay in bringing up an industrial dispute does not prevent it from being referred. The Tribunal will consider this in evaluating the dispute's validity if it is brought up after a significant amount of time without a plausible explanation.

Bombay Union of Journalists vs. The Hindu 1961, II LLJ 727 Bom

A staff member of "The Hindu, Madras" was terminated for inaccurately portraying themselves as a permanent employee. The dispute was raised by the Bombay Union of Journalists. It was found that among the 10 workers, seven were in administrative roles and just three were in journalism positions. Only two out of the three were part of a union. Thus, the Bombay Union of Journalists cannot raise this matter, as per the Supreme Court's decision. It would not have turned into a labour conflict, even if it had been addressed.

Conclusion

The Industrial Dispute Act is a significant milestone in India's industrial law history. According to the Industrial Disputes Act of 1947, an industry employing 100 or more people must obtain government authorization to close, and workers must be compensated at the rate of 15 days' earnings for every completed year of labour.

Frequently Asked Questions (FAQs)

1. What is the Industrial Disputes Act of 1947's primary goal?

The Industrial Disputes Act of 1947 aims to maintain a balance between labour and industrial welfare by promoting industrial peace and harmony.

2. What is the total number of clauses in the Industrial Disputes Act 1947?

The legislation, which covers India in seven chapters and forty sections, came into effect on April 1, 1947.

3. Which Act was intended to settle labour conflicts, and when was it passed?

The Industrial Conflicts Act of 1947 was enacted on March 11, 1947, to address industrial conflicts in the country, effective on April 1, 1947.

4. What are the key reasons for labour disputes?

Industrial disputes arise from various factors such as wage disparities, disagreements between labour unions and industries, and failure to fulfil or neglect labour rights.

5. How can I file a labour dispute?

Employees can initiate a dispute with a conciliation officer following their termination, dismissal, retrenchment, or discharge from their job.

6. How does the Industrial Disputes Act interact with other labor laws?

The Industrial Disputes Act operates in conjunction with other labor laws such as the Trade Unions Act, the Factories Act, and the Payment of Wages Act. It provides an overarching framework for dispute resolution while specific aspects of employment are governed by these other laws.

7. How does the Act address the issue of closure of undertakings?

The Act regulates the closure of undertakings by requiring employers to obtain prior permission from the appropriate government before closing down an establishment employing 100 or more workers. It also provides for compensation to workers affected by such closures.

8. How does the Act define "workman"?

The Act defines a "workman" as any person employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical, or supervisory work for hire or reward. However, it excludes certain categories of employees, such as those employed in a managerial or administrative capacity.

9. What is the concept of "standing orders" under the Industrial Disputes Act?

Standing orders are rules of conduct for workmen employed in industrial establishments. The Act requires certain establishments to frame and get certified standing orders that define the conditions of employment, including hours of work, leave policies, and disciplinary procedures.

10. How does the Act protect workers during the pendency of disputes?

The Act provides for the continuation of existing working conditions during the pendency of disputes. It prohibits employers from altering the terms of service to the disadvantage of workers when proceedings related to the dispute are ongoing.

11. How does the Industrial Disputes Act define an "industrial dispute"?

The Act defines an "industrial dispute" as any disagreement or conflict between employers and employees, between employers and workmen, or between workmen and workmen, which is connected with the employment or non-employment, terms of employment, or conditions of labor of any person.

12. What is the concept of "industry" under the Industrial Disputes Act?

The Act defines "industry" broadly to include any systematic activity carried on by cooperation between an employer and his workmen for the production, supply, or distribution of goods or services. This definition has been subject to judicial interpretation and has evolved over time.

13. What is the concept of "award" and how is it different from a "settlement"?

An "award" is a decision made by a labor court or tribunal in an industrial dispute. A "settlement," on the other hand, is an agreement reached between the parties, either through direct negotiation or conciliation. Both are binding, but settlements are generally seen as more consensual.

14. How does the Act address the issue of workplace safety in the context of industrial disputes?

While workplace safety is primarily governed by other laws like the Factories Act, disputes arising from safety issues can be addressed under the Industrial Disputes Act. The Act's mechanisms can be used to resolve conflicts related to the implementation of safety measures.

15. How does the Act address the issue of discrimination in the workplace?

While the Act doesn't explicitly address all forms of discrimination, it provides mechanisms to address unfair labor practices, which can include discriminatory actions. Disputes arising from workplace discrimination can be addressed through the Act's dispute resolution mechanisms.

16. How does the Act address the issue of employment of children in industrial establishments?

While the Industrial Disputes Act doesn't directly regulate child labor, it interacts with other laws like the Child Labour (Prohibition and Regulation) Act. Disputes related to the employment of children in industries can be addressed through the Industrial Disputes Act's mechanisms.

17. What is the concept of "industry-wide settlements" under the Act?

Industry-wide settlements are agreements reached between employers' associations and trade unions that apply across an entire industry. The Act recognizes such settlements and provides a framework for their negotiation and implementation.

18. How does the Act balance the need for industrial development with worker protection?

The Act aims to strike a balance by providing mechanisms for dispute resolution that protect workers' rights while also allowing for necessary changes in industry. It recognizes the need for industrial peace and productivity while ensuring fair treatment of workers.

19. How does the Act address the issue of industrial action during the pendency of proceedings?

The Act prohibits strikes and lockouts during the pendency of conciliation proceedings and for a certain period after their conclusion. It also restricts such actions during the pendency of proceedings before a labor court or tribunal, aiming to maintain industrial peace during dispute resolution.

20. What is the role of the "recovery officer" under the Industrial Disputes Act?

A recovery officer is appointed to ensure the implementation of awards and settlements. They have the power to recover money due from employers as arrears of land revenue, ensuring that financial aspects of dispute resolutions are effectively implemented.

21. Who can raise an industrial dispute under the Act?

An industrial dispute can be raised by individual workers, groups of workers, trade unions, or employers. The Act allows for both individual and collective disputes to be addressed through its provisions.

22. How does the Act protect workers against unfair dismissal or retrenchment?

The Act requires employers to follow specific procedures for dismissal or retrenchment, including providing notice, reasons for termination, and compensation. It also allows workers to challenge unfair dismissals through the dispute resolution mechanisms provided by the Act.

23. How does the Act address the issue of strikes and lockouts?

The Act regulates strikes and lockouts by imposing certain conditions and restrictions. It prohibits strikes and lockouts in public utility services without proper notice and during the pendency of conciliation or adjudication proceedings. The Act also provides for penalties for illegal strikes and lockouts.

24. What is a "works committee" under the Industrial Disputes Act?

A works committee is a bipartite body consisting of representatives of employers and workers. It is mandatory for industrial establishments with 100 or more workers. The committee's purpose is to promote measures for securing and preserving amity and good relations between the employer and workers.

25. What is the significance of the "appropriate government" in the context of the Industrial Disputes Act?

The "appropriate government" refers to either the Central or State government, depending on the nature and scope of the industrial establishment involved. It plays a crucial role in implementing the Act, appointing conciliation officers, and referring disputes for adjudication.

26. What are the key mechanisms for dispute resolution provided by the Industrial Disputes Act?

The Act provides several mechanisms for dispute resolution, including conciliation, voluntary arbitration, compulsory adjudication through labor courts and industrial tribunals, and collective bargaining. These mechanisms aim to resolve disputes through dialogue and legal processes.

27. What is the role of labor courts under the Industrial Disputes Act?

Labor courts are judicial bodies established under the Act to adjudicate on industrial disputes. They have the power to hear and decide on matters related to individual disputes, such as wrongful dismissals, and can pass binding orders on the parties involved.

28. What is the role of the "appropriate government" in referring disputes for adjudication?

The appropriate government has the power to refer industrial disputes for adjudication to labor courts or tribunals. This referral can be made when conciliation efforts fail or when the government deems it necessary in the public interest.

29. What is an "award" under the Industrial Disputes Act?

An "award" is a decision made by a labor court, industrial tribunal, or national tribunal in an industrial dispute. It is binding on the parties involved and can cover various aspects of employment, including wages, working conditions, and terms of service.

30. How does the Act address the issue of victimization of workers?

The Act prohibits the victimization of workers for their participation in trade union activities or for raising industrial disputes. It provides for penalties against employers who engage in such practices and allows workers to seek remedies through the dispute resolution mechanisms.

31. How does the Act address the issue of outsourcing and contract labor?

While the Act doesn't directly regulate outsourcing, it does provide a framework for addressing disputes arising from the use of contract labor. Contract workers can raise disputes under the Act, and issues related to their employment conditions can be adjudicated.

32. How does the Act address the issue of unfair labor practices?

The Act defines and prohibits certain unfair labor practices by both employers and workers. These include interfering with workers' right to form unions, discriminating against workers for union activities, and refusing to bargain collectively in good faith.

33. What is the significance of the "public utility service" classification under the Act?

Public utility services are given special treatment under the Act due to their essential nature. Strikes and lockouts in these services are subject to stricter regulations, including longer notice periods and potential prohibition by the government.

34. How does the Act define and regulate "change in service conditions"?

The Act requires employers to give notice of any intended changes in service conditions related to wages, hours of work, leave, and other specified matters. Workers have the right to object to such changes, and disputes arising from these changes can be addressed through the Act's mechanisms.

35. What is the role of the "grievance redressal machinery" under the Act?

The Act mandates the establishment of a grievance redressal machinery in industrial establishments employing 20 or more workers. This machinery aims to address individual grievances of workers at the workplace level before they escalate into full-fledged industrial disputes.

36. What is the role of a conciliation officer in the dispute resolution process?

A conciliation officer acts as a mediator between the disputing parties. Their role is to promote settlement of the dispute through dialogue and negotiation. They investigate the dispute, hold meetings with both parties, and attempt to find a mutually acceptable solution.

37. How does the Act promote collective bargaining?

The Act recognizes and promotes collective bargaining as a means of dispute resolution. It provides a legal framework for negotiations between employers and trade unions, and allows for the creation of binding agreements through this process.

38. What is the role of trade unions in the context of the Industrial Disputes Act?

Trade unions play a crucial role under the Act. They can represent workers in dispute resolution processes, engage in collective bargaining, and file cases on behalf of workers. The Act recognizes the right of workers to form and join trade unions.

39. What is the concept of "go-slow" and how is it treated under the Act?

"Go-slow" is a form of industrial action where workers deliberately reduce their productivity. While not explicitly defined in the Act, it is generally considered a form of strike and can be treated as such under the provisions of the Act.

40. What is the concept of "lay-off" under the Industrial Disputes Act?

A lay-off is a temporary inability of an employer to provide employment due to reasons such as shortage of coal, power, raw materials, or accumulation of stocks. The Act provides for compensation to workers during lay-offs and regulates the conditions under which lay-offs can be implemented.

41. What is the primary purpose of the Industrial Disputes Act?

The primary purpose of the Industrial Disputes Act is to provide a framework for the prevention and settlement of industrial disputes between employers and workers. It aims to promote harmonious industrial relations, protect workers' rights, and establish mechanisms for resolving conflicts in the workplace.

42. How does the Act balance the interests of employers and workers?

The Act aims to balance the interests of employers and workers by providing mechanisms for fair dispute resolution, protecting workers' rights while recognizing employers' need for flexibility, and promoting industrial harmony through dialogue and legal processes.

43. How does the Act promote voluntary arbitration?

The Act encourages voluntary arbitration as an alternative to adjudication. Parties can mutually agree to refer their dispute to an arbitrator, whose decision will be binding. This promotes a more consensual approach to dispute resolution.

44. What is the role of the "appropriate government" in maintaining industrial peace?

The appropriate government plays a crucial role in maintaining industrial peace by appointing conciliation officers, referring disputes for adjudication, prohibiting strikes and lockouts in certain circumstances, and generally overseeing the implementation of the Act.

45. What is the significance of the "reference" system in the Industrial Disputes Act?

The reference system allows the appropriate government to refer disputes to labor courts or tribunals for adjudication. This system gives the government a role in determining which disputes require formal adjudication, potentially helping to prioritize significant issues.

46. How does the Act address the issue of retrenchment?

Retrenchment refers to the termination of a worker's services for reasons other than disciplinary action. The Act requires employers to follow specific procedures for retrenchment, including providing notice or compensation in lieu of notice, and following the "last in, first out" principle, subject to certain exceptions.

47. What is the concept of "protected workmen" under the Industrial Disputes Act?

Protected workmen are office-bearers of registered trade unions who are given additional protection against victimization. The Act limits the number of protected workmen based on the total number of workmen employed in an establishment.

48. How does the Act address disputes in small establishments?

While the Act applies to all industries regardless of size, some provisions have different applicability based on the number of workers. For instance, the requirement for standing orders and works committees applies only to larger establishments. However, the basic dispute resolution mechanisms are available to all.

49. How does the Act address the issue of technological changes in the workplace?

While not explicitly addressing technological changes, the Act's provisions on changes in service conditions and retrenchment can be applied to situations arising from technological advancements. Disputes related to job losses or changes in work processes due to technology can be addressed through the Act's mechanisms.

50. What is the role of the "Board of Conciliation" under the Act?

A Board of Conciliation is a temporary body that can be appointed by the government to mediate in disputes. Unlike individual conciliation officers, it is a multi-member body that can be useful in more complex or significant disputes.

51. What is the concept of "continuous service" under the Act and why is it important?

Continuous service refers to uninterrupted service or service with interruptions that don't break continuity as per the Act's provisions. It's important for determining eligibility for various benefits and protections under the Act, such as notice periods for retrenchment.

52. How does the Act address disputes in multinational companies operating in India?

The Act applies to all industrial establishments in India, including multinational companies. Disputes in these companies are subject to the same mechanisms and protections as in domestic companies, though complexities may arise in cases involving international transfers or global policies.

53. What is the role of "special provisions" in the Act for certain industries?

The Act contains special provisions for certain industries, such as public utility services, recognizing their essential nature. These provisions often involve stricter regulations on industrial action and more immediate dispute resolution processes.

54. What is the significance of the "burden of proof" in proceedings under the Industrial Disputes Act?

In proceedings under the Act, the burden of proof generally lies with the party making an allegation. For instance, in cases of alleged unfair dismissal, the employer typically needs to prove that the dismissal was for a valid reason and followed proper procedures.

55. How does the Act contribute to the overall framework of labor laws in India?

The Industrial Disputes Act is a cornerstone of Indian labor law, providing the primary mechanism for dispute resolution in industrial settings. It complements other labor laws by offering a framework for addressing conflicts that arise in the implementation of various employment rights and obligations.