Ahan Gadkari, a final-year student at Jindal Global Law School. Introduction
Labour and the labour force have always been vital to society. Consequently, precise and decisive regulation of the industrial relations and labour sector is essential. In India, Labour comes within the Concurrent List of the Constitution, allowing both the Centre and the State to enact legislation pertaining to it.
In 2002, the Second Indian National Labour Commission recommended the consolidation of existing 404 central labour laws, some of which predate Indian independence, into five broad categories, namely, (i)Industrial Relations, (ii)Welfare and Working Conditions,(iii)Social Security, (iv)Wages, and (v)Safety, to suit the contemporary requirements and eliminate all the inconsistencies pertaining to several aspects. As a result, the Industrial Relations Code, 2020 (“IRC”) was tabled in Lok Sabha as Bill No. 120 of 2020 on September 19, 2020. It aims to combine, revise, simplify, and rationalise the requirements of the three current central labour laws: the Industrial dispute Act of 1947 (“IDA”), the Trade Unions Act of 1926, and the Industrial Employment (Standing Orders) Act of 1946. The IRC is the third in a series of four labour laws, the others being the Social Security Code, the Industrial Safety and Welfare Code, and the Code on Wages. The legislation aims to provide a broader framework to protect the rights of employees from the unjust practises prevalent in the organisation as a result of trade unions, as well as provisions for the investigation and settlement of industrial disputes and the facilitation of business by achieving industrial peace, harmony, and a cordial relationship between employers and employees.
The IRC targets achieving industrial peace and harmony as one of its ultimate pursuits. This piece will not be undertaking an overall analysis of the IRC, so please refer to other scholars’ contributions (see here, here and here), but rather focus on the changes made by the IRC to the preventive bipartite mechanism (“PBM”) and the effectiveness of the same. A PBM is a dispute settlement mechanism wherein the employer and employee have equal representation in the composition of the dispute settlement body.
PBMs under the IDA
The IDA and IRC both envisage two PBMs: the Works Committee and the Grievance Redressal Committee (“GRC”). The functions of these PBMs have not changed, but their constitutions have. In order to appreciate these changes, this piece will first examine both PBMs under the ambit of the IDA, before discussing them under the IRC.
A. Works Committee
The works committee is a body composed of company and employee representatives. The works committee is a venue for all parties to address their issues, and it derives its authority from Section 4 of the IDA. The primary purpose of the works committee is to resolve difficulties that arise during daily operations and to promote industrial harmony. In addition, the purpose of the Works Committee is to determine the workers’ problems and reach an agreement. The committee is established by a general or special order issued by the relevant government at an industrial facility where a hundred or more workers are engaged or have been employed on any given day over the previous twelve months. It comprises the representatives of the establishment’s employers and employees.
It is the responsibility of the Works Committee to promote measures for securing and preserving amity and good relations between employers and workers, to comment on matters of their common interest or concern, and to attempt to reconcile any substantial differences of opinion on such issues; however, the decisions of the works committees shall not be binding. It is important to note that the language used in the IDA makes it clear that the Works Committee is not intended to replace or supplant the Unions for the purpose of collective bargaining; they are not authorised to consider real or substantial changes in the conditions of service; their role is merely to smooth over any frictions that may arise between the workers and the management in the course of daily operations. In North Brook Jute Co., the Supreme Court stated that by no stretch of imagination can it be said that the Works Committee’s tasks and responsibilities included deciding on significant issues such as the modification of service conditions via rationalisation.
B. GRC
The GRC was not originally part of the IDA in 1947. It was added vide an amendment in 2010, that every industrial establishment have an internal Grievance Redressal Committee for the purpose of resolving disputes. There should be a maximum of six people on such a committee (with an equal number of representatives from management and employees), and the chairmanship should switch annually. The committee has one month to wrap up its proceedings. Suppose an employee is displeased with the committee’s decision. In that case, they can file a formal complaint with the employer, who then has one month to resolve the issue and provide the employee with written notification of the outcome. However, the right of a workman to raise an industrial dispute as per the act is unaffected by the provisions of this section.
PBMs under the New IRC Regime
After examining the Works Committee and GRC under the IDA, it can be noted that the majority of changes have been made to the GRC; and the Works Committee has remained more or less the same. This trend is discussed in the subsequent portion of this section which analyses these changes (or lack of changes) in detail.
A. Works Committee
i. Changes Made
The Works Committee draws power from Section 3 of the IRC (same section as in the IDA). Works Committee has to be formed by the appropriate government through a general or special order in establishments with more than 100 workers, and this remains the same in both the IDA and the IRC. The only thing to note is the lack of change in this provision.
ii. Analysis
When it comes to the Works Committee, there are two things that are confusing. First, why, after more than seventy years, should the threshold for the creation of the Works Committee under the IRC still be set at 100 workers? For what reason is its creation not a foregone conclusion for all businesses but rather is subject to the whim and fancy of the government under “special or general orders”? Have politicians collected statistics to back up keeping the Works Committee precisely as it was envisioned in 1947? Given that the IRC’s stated goal is to “promote measures for securing and preserving amity and good relations between employer and workers,” why does it leave the existence of such a committee up to the discretion of the “appropriate government” rather than making its presence mandatory in all Industrial establishments? The Second National Commission on Labour states that the Works Committee has been entirely ineffective, and that this is because of the way it was formed and the tasks given to it.
When it comes to the Works Committee, the IRC has not caught up to the present. Having a Works Committee formed merely in response to government mandates undermines the purpose of such an organisation, which is to promote cooperation between employees and management.
B. GRC
i. Changes Made
In Chapter 2, Section 4, of the IRC, it is mandated that each workplace with twenty or more employees must have a GRC. This committee must have an equal number of members from both the employees and the employer. The number of members of the grievance redressal committee, including women workers’ representatives in proportionate numbers, should not exceed ten (as opposed to six under grievance resolution authority of the IDA). The position of chair will be filled by a member of the committee each year on a yearly cycle. The grievance redressal committee must attempt to finish its procedures within thirty days of the day it receives the receipt of such application, and the application must be submitted within one year of the date from which the cause of action arises. Even if the committee decides based on a majority vote, if more than half of the members representing the workers disagree with the outcome, then it is considered that no decision has been made. Also, after sixty days of being made aware of the decision of the Committee, the aggrieved worker may petition for conciliation with the conciliation officer via the trade union of which he is a member (as opposed to submitting an appeal to an employer as stated in 9C, ID Act, 1947). Upon the expiration of forty-five days from the date the application was submitted to the conciliation officer, the aggrieved employee may apply directly to the Tribunal for adjudication of the dispute, and the Tribunal shall have powers under Section 53 of IRC to rule upon it.
ii. Analysis
The move to make the GRC mandatory for workplaces with twenty or more workers under the IRC is positive news for worker safety. It is commendable that a period of one year has been prescribed for presenting grievances to the GRC. Furthermore, if a grievance is not handled by the GRC or if a worker is aggrieved by the GRC’s decision, the procedure is no longer internal to the industrial institution, since the worker now has the option to pursue conciliation proceedings. Companies must pay close attention to GRC compliance since failure to do so may result in a punishment of up to INR 100,000 per offender. Thus, unlike the Works Committee, the IRC has positively changed the GRC.
Conclusion
In the words of Frederic Bastiat, “Law cannot organise labour and industry without organising injustice.” Preventing injustice can only be achieved by strengthening the mechanism for justice. The IRC provides these mechanism in the form of PBMs, more specifically, the Works Committee and the GRC. The IRC has done a fine job in strengthening the GRC. However, it has failed to provide the much-needed fortification to the Works Committee. The question posed in this piece’s title remains: Has the IRC succeeded or failed in its approach to BPMs? It must be noted that the IRC has improved the overall protection provided to workers under BPMs. However, the law requires continuous improvement. It is hoped that the government will take note of the recommendations of the Second National Commission on Labour and improve the Works Committee in the future, just like it has improved the GRC with the IRC.
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