Which one of the following is the process in which representatives of workmen and employer involved in an industrial dispute are brought together before a third person or group of persons who facilitates/facilitate through mediation to reach a mutually satisfactory agreement?

Correct — C, (c) Conciliation. The stem is a definition, and the two features it names settle the answer between them. A third person or group of persons is involved — so the process is not bipartite negotiation. And that third party works 'through mediation' towards 'a mutually satisfactory agreement' — so he assists the parties to reach their own settlement rather than imposing one on them. Only conciliation has both features.

The Industrial Disputes Act, 1947 supplies the machinery. Section 4 empowers the appropriate Government to appoint conciliation officers, charged with the duty of mediating in and promoting the settlement of industrial disputes; section 5 provides for a Board of Conciliation, with an independent chairman and two or four members representing the parties in equal numbers. Section 12 sets out what a conciliation officer must do. Under section 12(1), where an industrial dispute exists or is apprehended, he may hold conciliation proceedings — and must do so where the dispute relates to a public utility service and a notice of strike or lock-out under section 22 has been given. Under section 12(2) he is to investigate the dispute without delay and 'may do all such things as he thinks fit for the purpose of inducing the parties to come to a fair and amicable settlement of the dispute'. The word 'inducing' is the statutory expression of what the stem calls facilitating through mediation: he persuades, he does not decide.

The rest of the section describes both outcomes. If a settlement is reached, he sends the appropriate Government a report with a memorandum of the settlement signed by the parties; if it is not, he sends a full report setting out the steps he took and the reasons why a settlement could not be arrived at, and the Government then decides whether to refer the dispute for adjudication. A report under the section is to be submitted within fourteen days of the commencement of the conciliation proceedings, or within such shorter period as the appropriate Government may fix.

There is a good reason for a conciliation officer's presence beyond persuasion, and it explains why parties use the machinery. A settlement reached in the course of conciliation proceedings binds more widely than a private one. Under section 18(1) a settlement arrived at otherwise than in the course of conciliation proceedings binds only the parties to the agreement; under section 18(3) a settlement arrived at in the course of conciliation proceedings binds all the parties to the dispute, an employer's successors in the establishment, and the workmen employed in the establishment at the date of the dispute together with those who join it afterwards. The presence of the third party converts a private bargain into an instrument of general application.

Why the others are wrong

• (a)Arbitration — In arbitration a third party is indeed brought in, but he decides the dispute instead of helping the parties to settle it, and his decision binds them. Under section 10A of the Industrial Disputes Act, 1947 the employer and the workmen may, at any time before the dispute has been referred for adjudication, agree in writing to refer it to an arbitrator whom they name, and the arbitrator's award is published by the appropriate Government and takes effect accordingly. The consent is voluntary but the outcome is imposed, which is exactly the opposite of what this stem describes; the stem's third party facilitates and the parties themselves arrive at the agreement.
• (b)Adjudication — Adjudication is compulsory settlement by a judicial body. Under section 10 the appropriate Government may refer an industrial dispute to a Labour Court constituted under section 7, to an Industrial Tribunal under section 7A, or to a National Tribunal under section 7B, which hears the matter and makes an award; the award is published under section 17 and becomes enforceable under section 17A. Two things mark it off from the process in the stem. The reference does not require the parties' consent — the Government makes it — and the outcome is a decision rather than an agreement. Nothing in adjudication is 'mutually satisfactory' except by accident.
• (d)Collective negotiation — Collective negotiation, or collective bargaining, is bipartite. The representatives of the workmen and of the employer deal with each other directly, without any third party at all, and settle the terms of employment between them. It is the process the stem would describe if the words 'before a third person or group of persons' were struck out — and those are precisely the words that make the item answerable. Conciliation is often described as collective bargaining carried on with the assistance of a third party, which is a useful formula so long as the assistance is treated as the distinguishing feature rather than as a detail.

The Industrial Disputes Act, 1947 provides a graded machinery for handling industrial disputes, and the questions asked about it are almost always questions about which rung of the ladder a described process occupies. At the bottom is the Works Committee under section 3, a standing joint body meant to prevent disputes rather than to settle them. Then comes bipartite negotiation, which the Act does not regulate. Then conciliation, by a conciliation officer under section 4 or a Board of Conciliation under section 5, in which a third party mediates but does not decide; and a Court of Inquiry under section 6, which investigates and reports on matters connected with a dispute without settling it. Then voluntary arbitration under section 10A, where the parties choose their own adjudicator by written agreement. At the top is compulsory adjudication, on a reference by the appropriate Government under section 10, to a Labour Court under section 7, an Industrial Tribunal under section 7A or a National Tribunal under section 7B — with the Second Schedule listing the matters within the Labour Court's jurisdiction and the Third Schedule those within the Tribunal's. Section 20 fixes when conciliation proceedings begin and end, and sections 22 and 23 restrict strikes and lock-outs while proceedings are pending.

Key facts

• Conciliation: a third party mediates and the parties themselves reach the settlement; the conciliator has no power to impose a decision.
• Section 4 of the Industrial Disputes Act, 1947 provides for conciliation officers charged with mediating in and promoting the settlement of disputes; section 5 provides for Boards of Conciliation.
• Section 12(1): conciliation is discretionary in general, but mandatory where the dispute relates to a public utility service and a notice under section 22 has been given.
• Section 12(2): the conciliation officer may do all such things as he thinks fit for inducing the parties to come to a fair and amicable settlement.
• A report under section 12 must be submitted within fourteen days of the commencement of the conciliation proceedings, or a shorter period fixed by the appropriate Government.
• Section 18(1): a settlement outside conciliation binds only the parties to it; section 18(3): a settlement in the course of conciliation binds the parties, the employer's successors and all workmen of the establishment, present and future.
• Voluntary arbitration is under section 10A, by written agreement of the parties before a reference for adjudication.
• Adjudication follows a reference by the appropriate Government under section 10 to a Labour Court (section 7), an Industrial Tribunal (section 7A) or a National Tribunal (section 7B).
• Section 20 fixes the commencement and conclusion of conciliation proceedings, which matters because strikes and lock-outs are restricted while they are pending.

Common traps

• Choosing arbitration because a third party is involved. The test is whether the third party decides or assists.
• Choosing collective negotiation because the outcome is an agreement. Conciliation also ends in an agreement; the difference is the presence of the conciliator.
• Assuming conciliation is always optional. It is compulsory in a public utility service once a section 22 notice is given.
• Treating a conciliation officer as a judge. He has powers of investigation and entry, but no power to impose terms.
• Ignoring the difference section 18 makes. The wider binding effect of a conciliation settlement is the practical reason for using the machinery.

• practice — not a real PYQ

  Under section 12 of the Industrial Disputes Act, 1947, the report of a conciliation officer is to be submitted within

  • (a)seven days of the commencement of the conciliation proceedings
  • (b)fourteen days of the commencement of the conciliation proceedings
  • (c)thirty days of the commencement of the conciliation proceedings
  • (d)three months of the commencement of the conciliation proceedings

  Answer(b) fourteen days of the commencement of the conciliation proceedings

• practice — not a real PYQ

  A settlement arrived at in the course of conciliation proceedings under the Industrial Disputes Act, 1947 is binding on

  • (a)only the parties who signed the memorandum of settlement
  • (b)the parties to the dispute and all workmen employed in the establishment, including those who join it afterwards
  • (c)only the members of the trade union that took part in the conciliation
  • (d)nobody, until it is confirmed by an Industrial Tribunal

  Answer(b) the parties to the dispute and all workmen employed in the establishment, including those who join it afterwards