DISPUTE RESOLUTION IN IR CODE AND ID ACT – ANALYSIS OF DIFFERENCES AND THEIR IMPACT

Authors: Harshima Vijaivergia and Priyanshi Singh are third-year law students at University of Petroleum and Energy Studies, Dehradun. They are interested in research work and have co-authored multiple research papers together.

By simplifying the dispute settlement process, the new Industrial Relations Code 2020 (IRC) aims to do away with these complications. This article attempts to examine the potential effects of these changes while highlighting the differences between dispute resolution under the IDA and the IRC. The resolution of labour disputes may be divided into three tiers under the IRC and the IDA. The Blog discusses the differences between the dispute resolution procedure prescribed by IRC and IDA.


Introduction

The landscape of India’s industrial and labour legislation has been fundamentally shaped through dispute resolution. The Industrial Relations Code, of 2020 has subsumed the Industrial Disputes Act, of 1947 (now repealed) as part of the codification effort undertaken by the Central Government to facilitate business and encourage industrial development, which includes the simplification of numerous labour law statutes and guidelines into the four major codes. The relevance of this article can be understood by looking at the IRC’s objectives, which include providing an appropriate platform for the resolution of industrial disputes and minimising conflict between employers and employees. Additionally, the legislation’s goal is to establish harmony in working relationships by fostering a cordial relationship between the employer and the employee. By simplifying the dispute settlement process, the new Industrial Relations Code 2020 (IRC) aims to do away with procedural complications and overlapping powers. 

IRC has implemented two significant reforms.

First, all institutions have been kept with the exception of the Conciliation Board, Court of Inquiry, and Labour Court. 

Two, it has eliminated the government’s prior authority to refer or not refer labour disputes under the Act [Section 10(1)] except in cases involving national tribunals.

This article attempts to examine the potential effects of these changes while highlighting the differences between dispute resolution under the IDA and the IRC.

The three tiers of Dispute resolution:

The resolution of labour disputes may be divided into three tiers under the IRC and the IDA. 

Tier 1 – Bi-partite forums (comprising Grievance Redressal Committee and Works Committee) deal with workers’ and employers’ own dispute resolution. The provision has been provided in Chapter II of the IR Code, 2020.

Tier 2 – Conciliation is the second layer, in which a neutral third party mediates disagreements between two parties in dispute.

Tier 3 – Court’s adjudication.

Bi-Partite Forum

The Grievance Redressal Committee and the Works Committee are two internal conflict
resolution structures that are envisioned by both the IDA and the IRC. Although the
responsibilities of these entities have not changed, their constitutions have.

Grievance Redressal Committee

The GRC is the first forum for resolving specific conflicts. The deciding body is made up of both employers and employees [Section 4(2)]. GRCs must be present in every industrial firm with 20 or more non-managerial employees. The IDA limits the size of the GRC to a maximum of six members as opposed to the suggested limit of ten. In accordance with the gender-neutral goal of the codification process, the mandate of equal representation of employees and employers has been maintained. The IRC’s Section 4(4) makes the necessity for representation, however, quite clear by stating that it must not be less than the proportion of women workers to all other workers employed in the business.

Furthermore, under the IDA, the employee had the opportunity to appeal to the employer in the event that the GRC’s judgement was unsatisfactory. It was improper to provide the employer the right to hear an appeal against the GRC’s decision since it gave one individual unfettered decision-making authority instead of a well-balanced group of persons. This provision has been removed by the IRC. Now the worker is permitted to submit a request for conciliation under Section 4(8) once the GRC’s proceedings are concluded or after the GRC fails to issue a decision within 30 days.

The IRC also clarifies under Section 4(7) that a decision must be supported by more than half of the members who represent employees to be based on the majority’s will (although this has become a cause of concern for employers as there can be potential abuse of this provision by workers).

Works Committee

The creation of the Works Committee (WC) is required in industrial establishments with more than 100 employees (preserving the original mandate) to maintain excellent relations and amity between the employer and employee. As a result, it is permitted to remark on topics of general interest and make an effort to resolve any significant differences of opinion. However, closer examination reveals that this clause exhibits arbitrary government control and excessive government meddling. The WC’s creation was mandated, giving the “relevant government” the power to issue instructions as and when they are required. Additionally, the provision’s simple language leaves out the justification and circumstances that led to the WC’s creation and instead grants the government unrestricted authority over both the WC’s founding document and the process for creating the committee.

The IRC needs to take into account the realities of the present in reference to the Works Committee. The need for a group to ensure peace between employees and employers is defeated if a Works Committee is only formed on government dictates.

Conciliation

Conciliation as a procedure has gained momentum with the growth of alternative conflict resolution mechanisms in the nation. It is a step up in resolving labour disputes since it involves an outsider attempting to mediate the conflict between the parties by offering suggestions and counsel. The Conciliating Officer and Board of Conciliation are the two organisations responsible for such conciliation under the IDA. However, their responsibilities barely differ from one another. As a result, the IRC completely abolishes the Board of Conciliation, while the conciliation officer remains. 

Unless the parties have agreed differently, the Conciliation Officer must end the conciliation process within 15 days as required by Section 12(4) of the IDA. While the IDA’s Section 13(5) permits the Board of Conciliation to resolve the disagreement through conciliation within 60 days, the IRC’s Section 53 has found a middle ground, requiring conciliation to be completed within 45 days. The conciliation officer’s time frame for reaching a solution is typically not flexible and is specified by statute to be 45 days for general industrial disputes and 14 days for disputes by a notice. This is in line with India’s goal of increasing labour productivity because it will prevent disagreements that lead to work suspensions from lingering for too long and guarantee that they are resolved as quickly as possible. However, given that disputes involving strikes and lockouts are serious matters and that gathering information and conducting an investigation take time, it is challenging to understand the government’s intentions during this time period. As a result, the 14-day period as set forth reeks of an absence of reasonable justification. Furthermore, it is shocking that the government failed to foresee a change in the landscape of conciliators, and data from the past ten years confirms a declining use of conciliation for dispute resolution and unnecessary delays in the procedure.

While the IRC strives to eliminate several forums, it fails to tackle a major anomaly of labour conciliation in India. It makes no attempt to speed up the conciliation procedure. There are not enough skilled mediators. Unfortunately, the primary function of the conciliating authorities in labour disputes is to refer issues to the government, like a postman or postwoman. Because it does not allow for online mediation, the conciliation mechanism is also ill-prepared to handle emergencies like the pandemic. Even though India has achieved great progress in online dispute settlement, unless particular attention is paid, this development won’t transfer to better labour conciliation.

Industrial Tribunal
 Structural Changes

The IDA consists of two distinct tribunals and courts for the resolution of disputes. One presiding officer is present in both the Industrial Tribunal and the Labour Court. Labor Courts, however, are no longer used by the IRC. Labor Courts and tribunals will be replaced by the Industrial Tribunal. There will be two different benches in the Industrial Tribunals: one-member benches (comprising one member of the judiciary) and two-member benches (comprising one judicial and one administrative member).

Additionally, the government may select two assessors to provide advice to the tribunals under Section 49 of the IRC. This is in contrast to the IDA when assessors with specific expertise on the subject might be appointed by both the court and the government. Given that IRC is attempting to lessen government intervention in labour disputes, it appears unnecessary for the government to select assessors. The Standing Committee of Parliament also advocated against this modification. 

Jurisdiction

Under the current system, the government may only send a matter to the Labour Courts and Industrial Tribunals pursuant to Section 10 of the IDA. Schedule III matters are referred to Industrial Tribunals, while Schedule II concerns are all referred to Labour Courts. The Labour Courts have residual authority to handle topics that are not covered by Schedules II and III since Item 6 of Schedule II applies to all matters other than those included in the Third Schedule.

The two-member bench will hear matters involving standing orders, discharge or dismissal, strikes or lockouts, layoffs, closure, and trade unions under the IRC. A one-member bench will hear all of the remaining cases. The relevant government may appoint an additional judicial member under Section 47 in the event that a two-person bench is unable to come to a decision. The three members will vote to decide the issue by majority.

Even while setting up two distinct benches for the resolution of various types of disputes is similar to the IDA, it is still a greatly simplified form because it only identifies the issues that need to be resolved by a two-member bench while leaving the remaining authority to the one-member bench. Additionally, it makes sure that the number of workers who are involved in the disagreement does not influence the benches’ jurisdiction. Allowing adjudication by benches with even numbers is a step backwards, though, as adding a member afterwards in the event of a disagreement will only result in excessive delays.

Governmental interference’s extent

Labor Courts and Industrial Tribunals only have jurisdiction over disputes under Section 10 of the IDA when the government refers cases to them. As a result, their authority is limited to the scope of the reference, and any decision made outside of these parameters is null and void. The IRC has abolished the reference requirement. The government can streamline labour conflicts with the help of this action. By doing this, the government’s element of discretion is eliminated, and the terms of reference will no longer place limitations on the jurisdiction. This will enable the court to resolve every pertinent issue at once. Last but not least, it will assist in removing delays caused by the government when referring labour issues for resolution.

The IRC’s Section 55(4) enables the government to overturn or alter awards made by tribunals. The principles of the separation of powers and the independence of the court are openly ignored by this provision. The Madras HC and the Andhra Pradesh HC both invalidated Section 17A of the IDA, a clause that is comparable to Section 55(4). As a result, the government should not have added Section 55(4) to the IRC.

Conclusion

The IRC deserves praise for its efforts in bringing down the number of adjudicating organisations. The more specific information needed to simplify labour conflicts is still lacking, though. For instance, there is no focus on guaranteeing properly educated conciliation officers or improving the state of the Works Committee. The introduction of a two-member bench in tribunals may lead to frequent indecision and eventual delays, despite the IRC’s abolishment of Labour Courts. In a similar vein, getting rid of government references is a good move, but the government’s ability to change awards offers little to guarantee that the government won’t interfere. IRC represents a substantial step in the direction of establishing a labour dispute framework that is more effective but has several weaknesses in its defence.


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