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Unit 10: Industrial Disputes Act, 1947

In 1956 the Government decided to place voluntary arbitration as one of the measures for Notes
settlement of a dispute through third party intervention under the law. Sec. 10A was added to
the Industrial Disputes Act, and it was enforced from 10th March, 1957.

Reference of Disputes for Arbitration

Where a dispute exists or is apprehended, it can be referred for arbitration if the parties to the
dispute agree to do so by submitting a written agreement to that effect, mentioning the person
acceptable to them as arbitrator and also the issues to be decided in arbitration - proceedings, to
the Government and the Conciliation Officer concerned before it is referred for adjudication to
Labour Court or Tribunal. The Agreement must be signed by both the parties. Both under Sec.
10A and 10(2) reference is obligatory.
Where an agreement provides for even number of arbitrators, it will provide for the appointment
of another person as an Umpire who shall decide upon the reference if the arbitrators are
divided in their opinion. The award of the Umpire shall be deemed to be the arbitration award
for the purposes of the Act.
The appropriate Government shall within one month from the date of the receipt of the copy of
the arbitration agreement publish the same in the Official Gazette if the Government is satisfied
that the parties, who have signed the agreement for arbitration, represent majority of each
party; otherwise it can reject the request for arbitration.
Where any such notification has been issued, the employer and workmen who are not parties to
the arbitration agreement, but are concerned in the dispute, shall be given an opportunity to
present their case before the arbitrator or arbitrators.
The arbitrator shall investigate the dispute and submit to the Government the Arbitration
Award signed by him.
Where an industrial dispute has been referred for arbitration and notification has been issued,
the Government may by order prohibit the continuance of any strike or lock-out in connection
with such dispute, which may be in existence on the date of reference.
The arbitration award which is submitted to the Government and becomes enforceable, is
binding on all parties to the agreement and all other parties summoned to appear in the
proceedings as parties to dispute. Such an award is also binding on all, employees at the time of
award, or to be employed subsequently even if they are not party to the initial agreement. If the
arbitration agreement is not notified in the Official Gazette under Sec. 10-A, it is applicable only
to the parties who have agreed to refer the dispute for arbitration.
Arbitration Award is enforceable in the same manner as the adjudication award of Labour Court
or Industrial Tribunal.

Arbitration is an alternative to adjudication and the two cannot be used simultaneously. It is
voluntary at the discretion of the parties to a dispute. Arbitrator is a quasi-judicial body. He is an
independent person and has all the attributes of a statutory arbitrator. He has wide freedom, but
he must function within the limit of his powers. He must follow due procedure of giving notice
to parties, giving fair hearings, relying upon all available evidence and documents. There must
be no violation of the principles of natural justice.

Acceptance of Arbitration

Voluntary arbitration has been recommended and given place in law by the Government.
Experience, however, shows that although the step has been strongly pressed by the Government
for over thirty years it has yet to take roots. During the last decade not even 1% of the disputes

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