All you would like to know about Industrial Dispute Act, 1947

Regardless of a country’s state of financial development, policies governing dispute settlement are an integral component of any labour law framework.

It is because complaints and disagreements are unavoidable in any working relationship, and the goal of the policy is to provide procedures for successfully and speedily resolving these issues.

The Industrial Dispute Act 1947 India’s major piece of legislation governs dispute resolution. It was adopted to investigate and resolve industrial disputes, prevent illegal strikes and lockouts, and offer assistance to workers facing layoffs, retrenchment, or unfair dismissal.

It also includes tools for conciliation, arbitration, and adjudication to encourage actions that foster mutually beneficial relationships between an employer and employee.

What is Industrial Dispute?

According to Section 2 (K) of the Industrial Dispute Act 1947, an “Industrial Dispute” is “any dispute or difference between

  • employers and employers,
  • employers and workmen, or
  • workmen and workmen,

which get connected with any person’s employment or non-employment, terms of employment, or working conditions.”

Interest conflicts, grievance disputes, unfair labour practises, and recognition disputes are the four primary forms of industrial disputes.

Interest disputes are also known as economic disputes. In most cases, disagreements arise as a result of demands or suggestions for salary, benefit, or job security improvements or as a result of terms or conditions of employment.

Disputes over Unfair Practices in Industrial Relations are the most common labour dispute. Management frequently discriminates against workers because they are members of a trade union and participate in the organisation’s operations.

Unfair labour practices include putting pressure on employees when they exercise their rights to organise, participate in union activity, refuse to bargain, hire new employees during a legal strike, create an environment, commit an act of force or violence, or halting communication, among other things. Such conflicts can be settled by conciliation or through the standard procedure outlined in the Industrial Disputes Act of 1947.

Nature of Industrial Disputes

  1. There must be a disagreement or a conflict between:
    • Employers and employers (such as wage-welfare where labour is scarce).
    • Among employers and employees ( such as demarcation disputes).
    • Workers and workers
  2. The subject matter is associated with any person’s employment or non-employment, or the terms of employment or labour conditions, or it must pertain to any industrial matter.
  3. The relationship between the employer and the employee must exist and be the outcome of a contract and the employee’s employment.

Consequences of Industrial Disputes

The following are some of the negative impacts of industrial disputes:

  1. Industrial Peace Disturbance Causes:
    • Work resumes its typical pace.
    • The utilisation of plant capacity is below the optimal level.
    • Costs rise.
    • Absenteeism
    • The number of people leaving the company is increasing.
    • Industrial discipline gets shattered.
    • Quantitatively and qualitatively, production suffers.
  2. When people resist change, they end up with:
    • Employees lose faith in their employers.
    • Non-compliance with management
    • Resist any changes required for survival and growth.
  3. Employee dissatisfaction
  4. Tensions in society are becoming more intense
  5. Economy’s Negative Impact

Objectives of the Industrial Dispute Act

The Industrial Disputes Act aims to promote industrial peace and harmony by creating tools and procedures for investigating and resolving industrial disputes through negotiations. The ID Act 1947 also has the following goals:

  • to establish an appropriate arrangement for the just, equitable, and peaceful resolution of industrial disputes.
  • To promote efforts to ensure and maintain amity and good relations between employers and employees.
  • To avoid illegal strikes and lockouts.
  • To protect workers from layoffs, retrenchment, unjust dismissal, and victimisation.
  • Encourage the use of collective bargaining.
  • To improve workers’ working circumstances.
  • To avoid exploitative labour practices.

Scope of Industrial Dispute Act

The Industrial Disputes Act of 1947 applies to all industrial establishments in India that employ one or more workers. Conflicts encompass collective disputes or disputes supported by trade unions or a significant number of workers and individual disputes involving the termination of services.

Features of the Industrial Disputes Act

The main features of the Industrial Dispute act are:

  • Strikes and lockouts are illegal while the conciliation and adjudication process is in progress.
  • An agreement of the parties to the issue or the State Government can submit any industrial dispute to an industrial tribunal.
  • An award must be binding on both parties to the dispute for not more than one year, and the government must enforce it.
  • The competent government has the right to proclaim the transportation, coal, iron, and steel industries to be public utility services for the Industrial Disputes Act for a maximum of six months in the public interest or an emergency.
  • The employer must give compensation in a layoff or reduction of employees.
  • Compensation for workers has also been included in the act.
  • For the resolution of industrial disputes, several authorities are available, including a works committee, a Conciliation Officer, a Board of Conciliation, a Labour Court, and a Tribunal.

Authorities under the Industrial Dispute Act

The Industrial Dispute Act specifies the authorities listed below:

Work committee

As per the Industrial Disputes Act’s Section 3, if an industrial establishment employs or has employed 100 or more workers on any day in the previous twelve months, the appropriate government may order the employer to form a works committee composed of representatives of employers and workers employed in the establishment by ordinary or special order.

The number of workers’ representatives on the Work Committee shall not be less than the number of employers’ representatives.

Conciliation Officers

The relevant government will designate conciliation officials tasked with mediating and facilitating the resolution of industrial disputes.

These conciliation officers get assigned to a certain area or industry within a specific area, and their assignments can be permanent or temporary.

Board of Conciliation

A board of conciliation should also get established to promote the resolution of industrial disputes. A board should have a chairperson and two or four other members, as determined by the competent government. On the parties’ recommendation, the chairman should be an impartial person.

The other member should be a person nominated in equal numbers to represent the parties to the dispute. If a party fails to provide a recommendation within the specified time, the appropriate government may nominate individuals who get qualified to represent the party.

Courts of Inquiry

A court incorporates two or more members; they will get selected as chairman. The competent government will form a court of inquiry composed of thirteen independent persons to investigate any related matter relevant to an industrial dispute.

Labour Courts

One or more labour courts to judge industrial disputes involving any following entities.

  • The appropriateness or validity of a standing order issued by an employer
  • The appropriate government will establish one discharge or dismissal of employees, including retirement, and the provision of relief to employees unlawfully fired.
  • Any usual concession or privilege gets revoked.
  • The competent government shall designate a labour court, which will comprise one person with the requisite judicial qualifications.

Industrial Tribunals

The competent Government will establish one or more industrial tribunals by the announcement in the legal Gazette for the adjudication of industrial disputes relating to any of the subjects listed above, as in the case of the Labour Court, or the following matters, including:

  • Wages cover both the length of time and the method of payment.
  • Hours of work and rest periods; compensatory and additional allowances
  • Leave with pay and vacation time.
  • Bonuses, profit sharing, provident funds, and gratuities are all options.
  • Working shifts in a way aren’t dictated by standing orders
  • Discipline guidelines
  • Retrenchment of employees and establishment closure and any other matter that is mandated

National Tribunals

By notification in the legal Gazette, the Central Government establishes one or more National Industrial Tribunals for the adjudication of industrial disputes that, in the opinion of the Central Government, involve questions of national importance and involve industrial establishments located in more than one State.

The Central Government will appoint one person to serve on the National Tribunal. The person must be or have been a High Court Judge or have held the position of Chairman or any other member of the Labour Appellate Tribunal for at least two years to qualify as a Presiding Officer of a National Tribunal. In proceedings before the National Tribunal, the Central Government may designate two assessors.

Provision of Illegal Strike and Lockout

Strikes or lockouts get banned under the following situations, according to Section 24 of the Industrial Dispute Act:

  • Declared in violation of Sections 22 and 23 of the Criminal Code.
  • Continuing in defiance of a prohibitory order issued by the appropriate government after a dispute declared under Section 10 (3).

The circumstances and statutory regulations determine the legality of a strike. Strikes will not be considered illegal:

  • A strike that violates the certified standing orders is not legitimate in and of itself.
  • A strike is called strictly per the Act’s rules, such as when a worker is assigned an additional responsibility.
  • If a lockout got declared as a result of an illegal strike, or if a strike got announced due to an illegal strike.
  • If a strike or lockout began before and persisted during the pendency of arbitration proceedings, as well as after a referral to a board, labour court, or any other institution

Penalties for the Illegal Strike and Lockout

Any worker who continues to engage in illegal strikes as defined by Industrial Disputes Act will get sentenced to one month or more in prison, as well as a fine of Rs.1000 or both.

Any employer continuing to engage in illegal strikes as the act defines would get sentenced to one month or more in prison, as well as a fine of Rs.1000, or both.


The Industrial Disputes Act of 1947 is the most comprehensive legislation governing the development and management of labour disputes. The Act gives the Central Government and the Industrial Law Board a wide range of powers to monitor, regulate, and supervise the activities of the industries.

The Industrial Disputes Act ensures industrial peace and concord by establishing tools and procedures for investigating and resolving labour disputes through discussions. The Business and Industrial regulations enacted protect employees’ rights and consistently resolve disputes.

While the Act establishes internal and external bodies for dispute resolution and the prohibition of illegal strikes, lockouts, and unfair labour practices, it is critical to have effective internal processes to manage conflicts from a compliance standpoint.

External mechanisms typically necessitate a significant amount of work, expense, and time, resulting in a strained relationship between the company and the employee. As a result, having internal processes is desirable since it lowers the need for adjudication or other dispute resolution, resulting in a more pleasant working relationship that increases productivity.

FAQs on Industrial Dispute Act

When did the Industrial Dispute Act come into existence?

in 1947, the Industrial Disputes act came into existence.

The Industrial Dispute Act applies to which establishments?

The Act applies to establishments conducted with the assistance of workers and whose activity gets organised with or without profit.

Under which section, the works committee get established?

Section 3 of the ID act 1947

Under which section, the conciliation officer get appointed?

Section 4 of the ID act 1947

Under which section, Labour Courts get established?

Section 7 of the ID act 1947

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