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Overview of Industrial Disputes

An industrial dispute may arise from disagreements between employees and employers or between employers and workers. It could even involve disputes between groups of workers. These disagreements typically pertain to employment, termination, terms and conditions of employment, or other industrial matters (as per The Industrial Disputes Act 1947, Section 2K).

Nature of Industrial Disputes

A dispute or disagreement can occur between employers, among employers and labourers, or between labourers. To be categorised as an industrial dispute: - The subject matter should relate to a person's employment or lack thereof, the terms of their job, the way they work, or an industrial concern. - A relationship should exist between an employer and employee, whether on a contract basis or as permanent staff.

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Settlement of Industrial Disputes

Effectively resolving industrial disputes is crucial, as prolonged disputes indicate an unhealthy industrial environment in the country. The government has introduced various policies and steps to address labour disputes efficiently. The objectives of these policies are:

-To prevent and peacefully resolve industrial disputes.
-To foster better relationships between workers and employers.


The act empowers the government to appoint conciliation officers and establish conciliation boards to mediate disputes between employers and employees.

Work Committees

Working committees are mandated to maintain healthy relationships between employees and employers in all firms employing over 100 workers.

Court of Enquiry

When conciliation efforts fall short, the dispute is referred to a court of inquiry for investigation and reporting.

Labour Courts

The government has set up labour courts to address disputes concerning dismissals, suspensions, strikes, lock-outs, and various other factors.


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Causes of Industrial Disputes

Demand for wages and allowances

One of the primary causes of industrial disputes in India is the demand for higher wages and benefits. Despite the rapidly rising cost of living, wage growth has not kept pace with inflation. As a result, workers often resort to strikes to demand increased wages. A significant portion of India's labour disputes arises from workers seeking higher pay. These disputes could have been mitigated if employers had taken measures to ensure that wages and prices adjusted automatically.

Demand for bonus

The demand for increased bonuses is another substantial reason behind industrial disputes in India. Workers want employers to share the profits generated by industrial units. However, employers are often reluctant to part with their profits. In the past, during an emergency situation, the Government reduced the bonus rate from 8.33% to 4%, causing unrest. Later, the minimum bonus rate was raised back to 8.33%. Between 1961 and 1971, wages and bonuses were responsible for 46% to 50% of industrial disputes in India. From 1976 to 1984, wages and bonuses were the source of 32% to 40% of disputes.

Personnel and retrenchment

Personnel and retrenchment issues are also significant triggers of industrial disputes in India. These issues contributed to nearly 29% of all disputes between 1961 and 1976. From 1981 to 1984, around 21% to 22% of disputes were attributed to retrenchment and personnel matters.

Demand for Improving Working Conditions

Some industrial disputes arise because workers seek better working conditions, such as time off, shorter work hours, enhanced safety measures, and amenities like canteens. These demands are responsible for approximately 2% to 3% of all disputes.


Lock-outs are also a prominent cause of industrial disputes in the country. These occur when strikes persist for extended periods, and trade unionists do not act in a timely and responsible manner.

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