Conciliation Is an Opportunity for Opening of a Window Before Closing of the Final Doors in Relation to Industrial Disputes - Karma Global
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Conciliation Is an Opportunity for Opening of a Window Before Closing of the Final Doors in Relation to Industrial Disputes


Karma Management Global Consulting Solutions Pvt. Ltd. one of the top 5 labour law consulting firms  in the country, has recently hit upon  yet another significant milestone in the journey of  tying up  with SUNDEEP PURI ASSOCIATES AND ADVOCATES, where both these Firms have formally joined hands together to collaborate and create a bigger alliance by up scaling its business on pan India basis and Internationally to give greater reach of its services together,   to its hundreds of clients all over.

Sundeep Puri & Associates (SD Puri & Co.) with 55+ years of existence and helmed by Adv. Sundeep Puri & Adv Ravi Paranjpe is one of the largest retainer firms in India specializing in “Employment Laws” advising the Corporate Sector. The Firm boasts of some clients being associated since the last 55+ years and majority since last 30-40 years. They have extensive experience in counselling Foreign MNCs & Indian MNC Clients having multi-locational Factories &/or offices Pan-India on a daily basis on a wide range of “Employment & Labour” issues, keeping in view the cultural diversity of the workforce such as Acquisitions, Mergers, Consolidations, Reductions in work force, maintaining union free environment by not undermining the principles of collective bargaining & also preserving operational flexibility in unionised settings, providing tailor made models for conflict free, productivity conducive Industrial Environment, as also in respect to applicability of the various labour laws. They believe in Solution oriented Practical Advice backed by Law.

On the other hand,  Karma Management Global Consulting Solutions Pvt. Ltd. since 2004 is backed by 25 years of prior experience since 1979 , operating on pan India basis and Internationally in America and EMEA, helmed by Pratik Vaidya ,  is a leading giant in payroll management, compliance and governance, human resource services, professional Employment staffing and on boarding, recruitment and talent acquisition, advisory and consultations thereby offering a plethora of services with quick turn-around solutions including in-house flagship AI/ML based tech solutions so as to help organizations of different types and stature to perform better in Human Resource ensuring Risk Management, Compliance and Governance across Environmental, Social and Corporate laws and grow bigger.

So in this regard, besides the business profile of Karma Global relating to labour laws, it will now focus whole time also on legal and para legal issues and matters with the collaboration of Sundeep Puri & Associates who are already into legal matters such as disputes, litigation, and court cases.



Central Government Act

Section 10 in The Industrial Disputes Act, 1947

  1. Reference of disputes to Boards, Courts or Tribunals. –

Where the appropriate Government is of opinion that any industrial dispute exists or is apprehended, it may at any time], by order in writing, —

(1)   refer the dispute to a Board for promoting a settlement thereof; or

(2)   refer any matter appearing to be connected with or relevant to the dispute to a Court for inquiry; or

(3)   refer the dispute or any matter appearing to be connected with, or relevant to, the dispute, if it relates to any matter specified in the Second Schedule, to a Labour Court for adjudication; or

(4)   refer the dispute or any matter appearing to be connected with, or relevant to, the dispute, whether it relates to any matter specified, in the Second Schedule or the Third Schedule, to a Tribunal for adjudication: Provided that where the dispute relates to any matter specified in the Third Schedule and is not likely to affect more than one hundred workmen, the appropriate Government may, if it so thinks fit, make the reference to a Labour Court under clause (c) Provided further that] where the dispute relates to a public utility service and a notice under section 22 has been given, the appropriate Government shall, unless it considers that the notice has been frivolously or vexatiously given or that it would be inexpedient so to do, make a reference under this sub- section notwithstanding that any other proceedings under this Act in respect of the dispute may have commenced:  Provided also that where the dispute in relation to which the Central Government is the appropriate Government, it shall be competent for that Government to refer the dispute to a Labour Court or an Industrial Tribunal, as the case may be, constituted by the State Government;


Background in the light of the above mentioned Law

The Indian Industrial Relations System is dominated by the State Machinery which controls the process of (1) conciliation, (2) arbitration and (3) adjudication.

In this subject matter, we will be focussing on conciliation which, in the Indian context, means an effort to mediate between employers and employees. In fact, conciliation is an opportunity of opening a window before all the doors get closed and the issue gets into a kind of a deadlock, bringing down the curtains to a complete closure.

Over time, with fewer cases being mediated, there has been considerable disillusionment with the system of conciliation. The conciliation officer’s (CO’s) role has been reduced to that of a postman/postwoman who refers cases to adjudication while employers use the process as a delaying tactic to ultimately force employees to settle or withdraw disputes. Indeed, conciliation has not been used effectively or served the purpose for which it was created. Nonetheless, both employers and employees do not want the process to be abandoned. Indeed, conciliation could be a cheap and quick process if used appropriately.


Let us take a step by step look at the conciliation process and its effects:

1 Introduction

The state has come to play a major role in guiding industrial relations in India. The government, in order to protect labour and to ensure uninterrupted production, has enacted a number of labour legislations. These laws have covered rights and privileges and also guaranteed certain levels of income and conditions of working environment.

2 The Conciliation Process

The state domination of industrial relations is deeply rooted in India’s colonial past. Its origins can be traced to the promulgation of 81-A of the Defence of India Rules by the British Government in 1942 to control industrial unrest during the Second World War. This rule was converted into a full-fledged Industrial Disputes Act in 1947 (commonly known as ID Act, 1947).   In essence, it provided for the intervention of the state as a third party between labour and management at every stage of their relationship. This meant that the state would play a crucial role in settling an industrial dispute by monitoring the processes of conciliation, arbitration or adjudication under the ID Act, 1947.

Accordingly, the Central or State Government is authorized to appoint Conciliation officers (Cos) or when the situation demands, a Board of Conciliation.

  • The CO is normally the Assistant Commissioner of Labour (ACL) or the Labour Commissioner of the state.
  • In addition, Government Labour Officers (GLOs) are promoted to ACLs, both of whom are recruited through the state public service commission.
  • The GLOs are graduates while ACLs are post-graduates with a Master of Social Work (MSW) or Master of Labour Welfare (MLW) and have a minimum of 5 years of industrial experience.
  • The main work of a GLO is inspections and monitoring of the implementation of labour laws.
  • GLOs only conciliate in organizations having less than 30 employees while ACLs intervene in industries having more than 30 employees. Henceforth, we use the term CO to refer to ACLs.


An industrial dispute can come into existence when one party has made a demand on the other and the other party has rejected the same. These may relate to a genuine mismatch between the expectations of the employees and unions and their employer.


 A typical list of individual disputes that are covered by the ID Act, 1947, include:

  • discharge or dismissal of employees,
  • minimum wages deprivation,
  • gratuity,
  • bonus,
  • wrongful termination,
  • interpretation of standing orders,
  • wages,
  • conditions of work,
  • rationalization, lay-offs and retrenchments,
  • while collective disputes are related to terms of employment, service conditions, leave with wages and holidays, withdrawal of customary concession or privilege, new rules of discipline and long term charter of demands.


 Invariably, after the failure of bilateral negotiations, conciliation is the first attempt to reconcile views of disputants (individual or collective) with the help of a third party and the most frequently used method of dispute settlement both in the public and private enterprises

Although it is the duty of the government to refer the dispute to conciliation, conventional practice allows either party to submit a request in writing to the CO to start the process.

The CO can also take up the matter for conciliation not only when there is an ‘existing’ dispute but also when such dispute is ‘apprehended’.

When the CO receives the complaint through the union, they verify the authenticity of the documents submitted with the originals.

This is followed by the employer submitting the statement of justification in reply to the employee’s complaint.

Nonetheless, once the employers filed their reply, the COs without delay brings the employer and the representatives of the employees together and investigates the dispute, with a view to inducing the parties to arrive at a fair settlement.

In normal circumstances, the CO issues a notice to both the parties to ascertain the facts and tries to understand the merits of the case.

On the basis of this investigation, the CO can reject the complaint or proceed with the conciliation.

If the COs decide to proceed with the conciliation process, they may enter establishments involved in disputes, call for any relevant documents and resort to processes they think fit for the purpose of inducing the parties to come to a fair and amicable settlement.

Where direct action by employees is expected, the CO tries to arrange meetings in rapid succession with a view to avert any prolonged strike or lockout.

On such occasions, the conciliation meetings could last a whole day. The strategy is to try to ascertain each party’s bargaining and actual positions and to suggest suitable compromises in order to reach a settlement.

It should be noted that in the course of promoting “a fair and amicable settlement”, the CO does not discharge any adjudicatory functions, but can only goad, induce, encourage or cajole the disputants to persist in or continue with negotiations to arrive at a settlement.

The role of the CO is that of a guide, advisor and mediator who counsels the parties to reach an amicable solution.

A conciliator may act as a “go-between” for the parties, preside over and guide their joint discussion or may play an active role in clarifying misunderstandings, exploring grounds for compromise, enabling the parties to see the reasonableness of the other party’s point of view and suggesting settlements.

Since the conciliator has no powers of coercion over labour and management, they can only persuade the parties to climb down and meet each other.

The strategy is to try to ascertain each party’s bargaining and actual positions, find out the greatest common measure of agreement and suggest suitable compromises in order to settle a dispute.

In other words, their duties are only administrative and incidental to industrial adjudication.

The main characteristics of conciliation are flexibility, informality and simplicity.

The conciliator must be patient and persistent, infuse confidence in the parties and impress upon them that their problems are thoroughly understood.

For this, the CO does a benchmarking of the employer’s working conditions and capacity to pay the wage level and increments within the industry and compares it with the demands of the employees.

COs tries to persuade both the sides by highlighting the advantages of a settlement, the legality of the decisions and their vulnerabilities.

Further, the perils of adjudication are highlighted as being time-consuming, futile and with a highly uncertain end result. In short, a conciliator adjusts his approach to the circumstances of each case.

Further, the CO allows adjournments so that parties can soften their stance and do a rethink. Adjournments also provide opportunities to respective parties to submit documents and build arguments for their case.

However, if the parties raising the dispute are not interested in getting a settlement, it is not the duty of the CO to try to resolve the dispute.

In fact, it is the duty of the persons raising the dispute to assist the CO about the facts of the dispute and how the same can be possibly resolved.

Once the settlement is reached, the CO has to send a report to the government, together with a memorandum of the settlement signed by the parties to the dispute. If no settlement is arrived at, the CO has to send to the government a full report setting forth the steps taken by them for ascertaining the facts and circumstances, the efforts towards settlement and the reasons for not being able to arrive at a settlement.

On receipt of this report, the government may refer the dispute for adjudication to a labour court or industrial tribunal, depending upon the nature and type of the dispute. Such a reference, however, is not binding. If the government does not make a reference, it records the fact and communicates to the parties concerned its reasons.


Advantage Employers

In the case of collective disputes, both the employer and employees would like the dispute to be settled at the conciliation stage and avoid litigation that seems to be long drawn and unending, and finally only benefits lawyers.

However, it is clear from earlier research that employers had an edge in the conciliation process and used it to their advantage as and when convenient to them.

Clearly, the average number of disputes settled through the mediation of COs has reduced substantially in spite of the fact that the number of industries have increased.

In recent times, collective disputes relate to contract employees approaching the CO to regularize their employment. They claim to be directly employed by the principal employer who supervises their work, grants them their leave and pays them their wages, maintaining that outsourcing is used to disguise their relationship with the principal employer. Employers try extricating themselves from these cases by arguing that contract labour is employed for non-core activities and that the employer-employee relationship does not exist, as the work order is given to a contractor with a valid labour license who supervises and controls non-core work.

In the case of individual disputes, employers delayed matters through frequent adjournments to meet their interests. Delaying the process often meant that employers were keen that the matter be referred to adjudication especially in cases of dismissal. Consequently, although the prescribed time limit for the conclusion of conciliation proceedings was fourteen days, it often exceeded 6 months.

Frequent adjournments (4–6 per case) demanded by employers were intended to harass employees both psychologically and economically.

Employees approaching the CO was seen by employers as a personal affront and an attempt to blemish their reputation for which the employee was required to be ‘taught a lesson’.

Besides this, employees were put through great hardship and huge expenses if they wished to pursue the dispute. They had to take leave, suffer loss of wages and travel several times to appear for the dispute in person, eventually tiring them out so that they relented and agreed to a settlement or withdrawal of the dispute while private employers did not have to appear in person.

The latter appointed lawyers to handle complex and long drawn disputes or sent representatives who did not have the power to take decisions or make commitments. Thus, the delay in the conciliation process enabled employers to exploit the vulnerability of employees.

According to unionists, this attitude was reinforced by recent judgements that did not grant back wages to employees, with the presumption that they would have been working for the period pending conciliation proceedings. This made employers more belligerent and they were ready to accept the CO’s ex-parte reference to adjudication, instead wasting their time to appear before them. One employer’s representative also endorsed this view.


Challenges Facing Conciliation

  1. Inordinate delay in disposal of cases.
  2. Lack of sufficient awareness of the Conciliation officer about the conditions of industry
  3. Lack of faith by the parties in the integrity and skills of the conciliation officers.
  4. Absence of commitment of conciliation officers.
  5. Inadequate background and training of the conciliation officers.


The Way Forward

Some Labour Commissioners and employers argued that conciliation is ineffective and should be done away with or made optional. Instead, bipartitism may be encouraged, or since the matter ultimately goes for adjudication, both the parties should be given the liberty to approach the court directly.

Accordingly, in 2010, section 2(A) of the Industrial Dispute Act of 1947 was amended to allow individuals to directly approach the labour courts instead of bringing it before conciliation proceedings. This change minimizes the role of conciliator in handling individual labour disputes. While the employers’ associations have appreciated this change, unions argue that this would reduce the role of conciliation in resolving labour conflicts making it costlier for workers. Nonetheless, some persistently argue that the CO is not taken seriously while a judge is taken seriously because parties fear that the judgement would go against them if their approach was casual and therefore parties should be allowed to approach the court directly even in the case of collective disputes.

In spite of these debilitating factors, most employer representatives argued that conciliation was the only medium of getting the two warring parties together to find an amicable solution. Conciliation provided a window to correct disputes because, many times, decisions are taken hastily or due to some miscommunication.

Further, conciliation provides a chance to the parties to gauge the strength of their case and offers an opportunity to withdraw unworthy cases.

This was the only forum where a one-on-one dialogue was possible with employer and employee, unhindered by the formality of court proceedings. Employer representatives argued that only the CO could explain to labour that there was no substance in the case and no relief was possible and hence proceeding to adjudication would only be a waste of time and money.

Conciliation is therefore a very important stage in the dispute resolution machinery and should not be dismantled. The conciliation process was indeed more efficient and effective method of resolving labour conflicts as compared to adjudication. The CO was just like a friend trying to mediate between the two parties, while the judge could never be a friend.

Moreover, conciliation was a cheap and quick process of sorting out differences where no cost was incurred by the parties, and if used appropriately, it could become the best option to resolve disputes. For this, the parties to a dispute should not regard the conciliation process to be a hurdle to be crossed in order to have a dispute adjudicated.

All the parties should approach the proceedings with desire to settle differences, in the right spirit of co-operation and understanding.

Therefore, the parties involved should approach the conciliation process with a determination to resolve their differences amicably.

Conciliation would also reduce the number of cases being referred to adjudication. This could also be supported by the government resisting the urge to make references to adjudication and banning the representation of the parties by lawyers during the conciliation proceedings.

Overall, the crux of the matter lies in understanding the thin line between administration and adjudication. This has made the COs risk averse. Therefore, some employer representatives argued that the COs should be given liberty within limits to decide and settle some cases and the boundaries to their authority should be well defined.



In India, the state dominates industrial relations machinery which is often denoted by conciliation, arbitration and adjudication.

There has been considerable disillusionment with the system of conciliation, with fewer cases being mediated over the years.

Indeed, conciliation has not been used for the purpose it was created. Nonetheless, given the importance conciliation is bequeathed with, the parties involved have used the process in the most pragmatic manner to make bilateral agreements binding and to curb the initiation or continuation of strikes.

With the decline in militant trade unionism, employers use delaying tactics to tire and ultimately force employees who raise individual disputes to settle or withdraw.

Obviously, employers prefer to see the process as a waiting room before the case moves on to adjudication.

At times, the CO’s intervention did help, but it was solely based on the employer’s expedience which was largely guided by financial interests to consider the same.

Overall, employers seem to have an upper hand in the conciliation process.

Given these impediments some suggested that the entire process be abandoned in favour of adjudication. Further, the blurring of lines between administration and adjudication reduces COs to postmen/postwomen and the conciliation process as an adjunct to adjudication. In addition, the workload and skills of COs and the absence of a formal link between their performance and promotion also debilitated the process.

However, others argued that conciliation is a cheap and quick process if used appropriately. Therefore, one, the parties should approach conciliation with a commitment to resolve the dispute. Two, the COs’ require to curb their urge to refer disputes to conciliation. Three, the government required to increase the number of Co. Four, COs’ performance was required to be linked to the number of cases settled. Five, an independent body of conciliators was required to be established for parties to choose from those who were skilful. Finally, and most importantly, the boundary between administration and adjudication should be clarified so that the conciliation process becomes more fruitful.

Karma Global Tech Management LLC works across a wide variety of industries, constantly looking for ways to offer new services and increase its global businesses.

In order to serve today’s technological savvy clients and employees, Karma Management planned much ahead of its time by adapting to processes and systems to accommodate quickly changing markets.

As Industry is continuing to get more and more competitive, Karma Management is bridging the gap, setting itself in tune with the latest technological trends in order to maintain a competitive advantage for all its over 500 domestic and global clients.

Karma Global Tech Management LLC is also a top boutique consulting firm giving its long associated clients the benefit of its labour offering, by doing lot of promising work in the areas of disputes, litigations, resolutions, grievances, retrenchment and layoffs, etc. Including   terminations and settlements.

Karma Global regularly advises its clients on transaction-related compliance issues, while also representing multi nationals before the Central Government Industrial Tribunal-cum-Labour Courts.

Karma Global which is also basically into HR Services, does a lot of work on Change Management enabling Clients to drive Change Management through Leadership Development, Talent Analytics, Women Leadership, Technology Adoption to build Diverse and Inclusive, Talent- savvy cultures.  We offer proprietary and customize solutions from our successful models embedded in the culture of successful organisations in India and abroad which is built on a repertoire of vast experiences and success stories.


Proprietary blog of Karma Global

This blog has been compiled and collated by the internal staff of Karma Global with the knowledge and expertise that they possess, for its monthly newsletter Issue 06 of December   2022 and in case of specific or general information or compliance updates for that matter, kindly reach out to the


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