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Unit 13: Industrial Relations

2. Compulsory Conciliation: In compulsory conciliation, the disputes are referred to the Notes
board of conciliation under it, the procedure is made compulsory by provision requiring
the parties' attendance at conciliation proceeding or empowering the conciliation authority
to compel their attendance at such proceeding, as well as by prohibition of strike and
lockout without prior resort to conciliation.
13.8.2 Arbitration

Arbitration is a means of securing an award on a conflict issue by reference to a third party. It is
a process in which a dispute is submitted to an impartial outsider who makes a decision which
is usually binding on both the parties. It is a process where there is a hearing and a determination
of a cause between parties in controversy by a person or persons chosen by them, or appointed
under a statutory provision. The parties submit their disputes/issues and are bound by the
award of an arbitrator in relation to the matter which is in dispute between them.

Arbitration is to be distinguished from conciliation not only by the fact that its decision is
binding on the parties but also by its different approach and spirit. The main objective of
arbitration is adjudication and, hence, there is no place for compromise in awards though the
parties are at liberty to do so. Arbitration is also to be distinguished from mediation. Arbitrator
rests on equity and justice, i.e., there is no scope for compromise, while compromise is the very
essence of mediation. Arbitration often leads to termination of the dispute. It is best suited for
the settlement of contractual rights.

Types of Arbitration

'Voluntary' or 'Compulsory'

Voluntary arbitration implies that the two contending parties, unable to compose their
differences by themselves or with the help of the mediator or conciliator, agree to submit the
conflict/dispute to an impartial authority, whose decision they are ready to accept. In other
words, under voluntary arbitration, the parties to the dispute can and do they refer voluntarily
any dispute to arbitration before it is referred for adjudication. This type of reference is known
as a 'voluntary reference', for the parties themselves volunteer to come to a settlement through
an arbitration machinery.

The essential elements in voluntary arbitration are:
1. The voluntary submission of dispute to an arbitrator;
2. The subsequent attendance of witnesses and investigation;
3. The enforcement of an award may not be necessary and binding because there is no
compulsion. But, generally, the acceptance of arbitration implies the acceptance of its
award-be favourable or unfavourable; and

4. Voluntary arbitration may be specially needed for disputes arising under the agreements.
Compulsory arbitration, on the other hand, is one where the parties are required to accept
arbitration without any willingness on their part. When one of the parties to an industrial
dispute feels aggrieved by an act of the other, it may apply to the appropriate government to
refer the dispute to adjudication machinery. Such reference of a dispute is known as 'compulsory'
or 'involuntary' reference; because references in such circumstances do not depend on the sweet
will of both the contending parties or any party to the dispute.

Compulsory arbitration leaves no scope for strikes and lockouts; it deprives both the parties of
their very important and fundamental rights.

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