Industrial Disputes Resolution Under Indian Labour Law: A Critical Analysis of Delay and Reforms

Introduction

A. The evolution of the Industrial Disputes Act, 1947

The Industrial Disputes Act, 1947¹ has been amended repeatedly to respond to changing industrial conditions and labour requirements. In its early years, the Act was chiefly concerned with protecting workers and securing their employment. Chapter V-A, introduced in 1953, provided compensation for lay-off and retrenchment, while Chapter V-B, added in 1976,² imposed further restrictions on larger establishments in respect of lay-off, retrenchment and closure. Following economic liberalisation in 1991, the emphasis shifted towards balancing worker protection with industrial flexibility, and the 2010 amendment revised the wage ceiling and expanded individual access to Labour Courts and Tribunals.

The Industrial Relations Code, 2020³ represents the most significant recent change, consolidating the Industrial Disputes Act with two other labour statutes. It retains the established mechanisms of conciliation, adjudication and arbitration while introducing reforms to grievance redressal, standing orders and trade union recognition. Indian industrial dispute law has therefore progressed gradually towards a framework that seeks to balance worker protection, industrial flexibility and efficient dispute resolution.

B. The scope of the study

This study examines the methods available for settling industrial disputes in India, with particular attention to the causes of delay and the effectiveness of recent reform. It considers the mechanisms under the Industrial Disputes Act, 1947 and the Industrial Relations Code, 2020, and compares them with the dispute resolution systems of Australia, the United States and the United Kingdom to identify practices of potential relevance to India. It also examines proposed reforms such as time-bound conciliation, mediation and pre-litigation settlement, alongside relevant judicial decisions. The study is doctrinal, analytical and comparative in character.

C. Research questions

1.  What factors contribute to delay in the settlement of industrial disputes in India?

2.  What are the limitations of the Industrial Disputes Act, 1947 in resolving industrial disputes efficiently?

3.  Does the Industrial Relations Code, 2020 offer an effective response to these limitations?

4.  How do the institutional mechanisms for resolving industrial disputes in Australia, the United States and the United Kingdom compare with those in India?

Conceptual framework of industrial disputes

A. Meaning and concept

An “industrial dispute” is a real and substantial difference possessing some element of persistence and continuity until resolved, and which, if left unadjusted, is likely to endanger industrial peace. Section 2(k) of the Industrial Disputes Act, 1947⁴ defines an industrial dispute as any dispute or difference between employers and employers, employers and workmen, or workmen and workmen, connected with the employment or non-employment, the terms of employment, or the conditions of labour of any person. In Workmen of Dimakuchi Tea Estate v. Management of Dimakuchi Tea Estate, the Supreme Court analysed this definition as falling into three parts: the existence of a dispute or difference, the identity of the parties, and the subject-matter of the dispute, and held that the expression “any person” could not be read so broadly as to include persons in whose employment the workmen raising the dispute had no direct or substantial interest.⁵

In Shambu Nath Goyal v. Bank of Baroda, the Supreme Court described an industrial dispute as a real and substantial difference having some element of persistency and continuity till resolved and likely, if not adjusted, to endanger industrial peace, and held that, except in the case of a public utility service, a written demand on the employer is not a precondition for the existence of an industrial dispute, so that a reference under section 10 could not be rejected merely because no formal demand had been made before conciliation.⁶ Similarly, in Standard Vacuum Refining Co. of India Ltd. v. Its Workmen, the Court applied the Dimakuchi test and held that a dispute raised by the company’s regular workmen for the abolition of contract labour in its refinery was an industrial dispute, because the workmen had a community of interest with the contract labourers and a substantial interest in the subject-matter, and the company was in a position to grant relief; the reference under section 10 was therefore competent.⁷ These elements continue to guide courts in determining whether a dispute is properly referable for adjudication.

B. Types of disputes

Industrial disputes may be individual or collective in character. Section 2A of the Act⁸ provides that where an employer discharges, dismisses, retrenches or otherwise terminates the services of an individual workman, any dispute connected with that termination is deemed an industrial dispute even though no other workman or trade union is a party to it. Collective disputes, by contrast, typically concern wages, bonuses and allowances, working hours and leave, or matters of discipline, retrenchment, closure and rationalisation.

The boundary between individual and collective disputes was considered in Newspapers Ltd. v. State Industrial Tribunal, U.P., a case under the U.P. Industrial Disputes Act, 1947, where the Supreme Court held that a dispute between an employer and a single workman does not, by itself, constitute an industrial dispute; however, where the workmen as a body, or a considerable section of them, make common cause with the individual workman, the dispute may properly be treated as an industrial dispute.⁹ This principle of collective espousal remains central to determining the maintainability of disputes referred for adjudication.

Statutory mechanisms for the settlement of industrial disputes

A. Mechanisms under the Industrial Disputes Act, 1947

The Industrial Disputes Act, 1947 provides a layered system for preventing and resolving disputes. A Works Committee offers a forum for employer and workman representatives to discuss workplace issues before they escalate. Conciliation Officers, appointed under section 4,¹⁰ mediate between the parties and encourage settlement before matters proceed to adjudication, while a Board of Conciliation, comprising an independent chairman and party representatives, performs a similar function for more complex disputes. Section 10A permits the parties voluntarily to refer a dispute to an arbitrator as a flexible alternative to formal adjudication.¹¹ Where conciliation and arbitration fail, the dispute may be referred under section 10¹² to a Labour Court, Industrial Tribunal or National Tribunal, the last of which deals with disputes of national importance or those in which establishments in more than one State are likely to be interested or affected. The resulting award has binding legal effect.

The scope of “industry” for this framework was substantially widened in Bangalore Water Supply and Sewerage Board v. A. Rajappa, in which a seven-judge bench of the Supreme Court formulated the “triple test”: whether there is a systematic activity, organised through the cooperation of employer and employee, for the production or distribution of goods or services calculated to satisfy human wants, irrespective of profit motive.¹³ This broad interpretation considerably expanded the range of establishments falling within the protective umbrella of the Act.

B. Mechanisms under the Industrial Relations Code, 2020

The Industrial Relations Code, 2020 consolidates and simplifies this framework while retaining conciliation, voluntary arbitration and adjudication. Conciliation Officers continue to assist the parties, but the Code prescribes specified timelines for conciliation in an effort to prevent disputes from remaining unresolved indefinitely. Industrial Tribunals become the principal adjudicatory bodies, empowered to examine evidence, summon witnesses and call for the production of documents, while National Industrial Tribunals continue to handle disputes of national importance. Settlements and awards under the Code carry binding legal effect, and the Code’s time-bound procedures depend, in practice, on the availability of adequately staffed tribunals and effective administrative support.

The binding nature of settlements reached during conciliation was affirmed in National Engineering Industries Ltd. v. State of Rajasthan, where the Supreme Court held that a settlement concluded with a representative trade union during conciliation proceedings binds the entire body of workmen in the establishment, reinforcing the importance of conciliation as a genuine and consequential stage of dispute resolution rather than a mere formality preceding litigation.¹⁴

The anatomy of delay in industrial dispute resolution

A. Administrative factors

Administrative inefficiency remains a principal cause of delay. Heavy caseloads, unfilled vacancies in Labour Courts and Tribunals, inadequate staffing and poor infrastructure slow proceedings considerably, while inefficient record management and weak coordination between government departments and adjudicatory authorities compound the problem. The uneven geographic distribution of tribunals further disadvantages parties located far from existing benches.

B. Procedural factors

Complex procedures, multiple hearings, extensive documentary and witness evidence, and repeated adjournments all prolong disputes. Preliminary procedural objections can delay engagement with the substantive issues in dispute. A balance must therefore be struck between procedural fairness and speedy disposal, through simplified procedures, active case management and stricter control over unnecessary adjournments.

C. Legal factors

Industrial disputes frequently raise intricate questions concerning statutory interpretation, standing orders, contractual terms and judicial precedent. Preliminary challenges to maintainability can delay the hearing of the substantive dispute, and further delay may arise when awards are challenged before higher courts. Judicial oversight remains essential to legality and fairness, but its cumulative effect on the timeline of dispute resolution cannot be ignored.

D. Governmental factors

Delay may also originate at the governmental level, in the making of references, the issuing of notifications and the appointment of tribunal members. Weak coordination between departments affects the pace of proceedings, making efficient governmental administration essential to the practical effectiveness of statutory remedies.

E. Employer-related factors

Employers sometimes contribute to delay through repeated requests for adjournment, failure to produce records promptly, or prolonged internal investigations, particularly in disputes involving dismissal, disciplinary action or retrenchment, which often require extensive documentation. While litigation is occasionally used strategically to prolong resolution, delay may equally stem from genuine administrative difficulty, especially in smaller establishments with limited resources.

F. Judicial factors

Judicial review safeguards legality and natural justice and protects against error by Labour Courts and Tribunals, but when a dispute proceeds through several levels of litigation, final resolution can take considerable time. Heavy caseloads before the higher judiciary make it necessary to preserve the essential function of judicial review while discouraging unnecessary litigation and strengthening case management at every level.

Comparative analysis of industrial dispute resolution mechanisms

A. Australia

In Australia, conciliation conducted by the Fair Work Commission plays a central role in resolving unfair dismissal and other workplace disputes. Under the Fair Work Act 2009 (Cth), an eligible employee may apply to the Commission for an unfair dismissal remedy,¹⁵ and such applications are typically referred to conciliation before any formal hearing, giving the parties an early opportunity to settle their dispute with the assistance of a neutral conciliator.¹⁶ Where conciliation does not resolve the matter, it proceeds to a conference or hearing before a Commission member. The Australian model demonstrates the value of specialised institutions and structured early settlement in reducing the number of disputes that require lengthy formal adjudication.

B. The United States

The United States follows a comparatively decentralised model in which collective bargaining is central. The National Labor Relations Act of 1935 provides the principal federal framework for private-sector labour relations, and the National Labor Relations Board it establishes performs important administrative functions.¹⁷ Many disputes are addressed in the first instance through grievance procedures set out in collective bargaining agreements, with mediation and arbitration widely used for disputes arising under such agreements. The American approach therefore relies substantially on privately negotiated dispute-resolution procedures, supported by administrative and judicial oversight rather than a unified statutory tribunal system.

C. The United Kingdom

The United Kingdom combines internal workplace grievance procedures with a mandatory pre-claim conciliation stage administered by the Advisory, Conciliation and Arbitration Service (Acas). Since 2014, a prospective claimant must generally notify Acas and undertake early conciliation before an Employment Tribunal claim may be presented.¹⁸ Employment Tribunals then deal with matters such as unfair dismissal and discrimination where conciliation does not succeed. The UK system therefore places strong emphasis on early, structured settlement while preserving formal adjudication as a safeguard of last resort.

D. Comparative assessment of institutional efficiency

The four systems adopt markedly different approaches to industrial dispute resolution, summarised below.

Table 1: Industrial dispute resolution mechanisms in India, Australia, the United States and the United Kingdom

India has traditionally relied heavily on statutory conciliation followed by adjudication before specialised tribunals, a model the Industrial Relations Code, 2020 seeks to streamline. Australia illustrates the effectiveness of a single specialised commission combining conciliation and determination; the United States gives primacy to collective bargaining, mediation and arbitration; and the United Kingdom strongly encourages conciliation before a claim can even be lodged. Each model suggests that structured, time-limited conciliation at an early stage, supported by an adequately resourced adjudicatory body, reduces the burden on formal litigation more effectively than adjudicatory capacity alone.

The Industrial Relations Code, 2020 and the quest for efficient dispute resolution

A. Scope and intent

The Industrial Relations Code, 2020 was introduced to consolidate and modernise the law governing trade unions, conditions of service, retrenchment, lay-off, closure and dispute settlement. By bringing these matters under a single statute, the Code aims to simplify labour regulation and reduce procedural complexity while balancing worker protection with the flexibility employers require. It also seeks to ease the compliance burden on establishments: according to the government’s own account of the reform, the number of applicable rules has been reduced from 105 to 51, the number of prescribed forms from 37 to 18, and the requirement to maintain three separate registers has been removed.¹⁹

B. Structural and procedural reforms

Several structural changes are directed at reducing delay. The definition of “worker” under section 2(zr)²⁰ is widened to bring sales-promotion staff, working journalists and supervisory staff below a prescribed wage ceiling within the protective scope of the Code, while section 2(p)²¹ adopts a profit-neutral definition of “industry” that codifies the approach earlier taken by the Supreme Court in Bangalore Water Supply, subject to express exclusions for charitable institutions, sovereign functions and domestic service. A uniform definition of “wages”, with a fifty per cent ceiling on exclusions, is intended to reduce disputes over the calculation of retrenchment compensation and other benefits.

On the adjudicatory side, the Industrial Tribunal is reconstituted as a two-member body comprising a Judicial Member and an Administrative Member, combining legal and administrative expertise with a view to producing faster and better-informed awards. The conciliation officer must ordinarily report within forty-five days of the commencement of conciliation, and where conciliation fails, any party may apply directly to the Tribunal within ninety days of receiving the conciliation officer’s failure report, rather than await a discretionary government reference, a change intended to remove an avoidable source of delay before a dispute even reaches adjudication. The Code further extends to all industrial establishments the requirement that notice of a strike be given within sixty days before it, with no strike permitted within fourteen days of the notice, prohibits strikes during conciliation and adjudication, and establishes a Worker Re-skilling Fund, into which an employer must deposit an amount equal to fifteen days of a retrenched worker’s last drawn wages, to support the re-employment of displaced workers.²² The threshold for mandatory certified standing orders is raised from 100 to 300 workers, easing compliance obligations for mid-sized establishments.

Procedurally, the Code encourages digital registration, record-keeping and communication, which is expected to reduce paperwork, improve transparency and speed the handling of registrations and compliance filings. It also creates a formal process for recognising trade unions for collective bargaining: a union commanding the support of at least fifty-one per cent of workers in an establishment may be recognised as the sole Negotiating Union, and where no union meets that threshold, a Negotiating Council drawn from qualifying unions may be constituted instead, bringing greater structure to collective bargaining.

C. Implementation status

Although the Industrial Relations Code, 2020 received Presidential assent in September 2020, its provisions, along with those of the three other labour codes, remained unimplemented for several years pending the framing of central and state rules. The Government of India announced the implementation of all four labour codes with effect from 21 November 2025, on which date the Industrial Disputes Act, 1947, the Trade Unions Act, 1926 and the Industrial Employment (Standing Orders) Act, 1946 stood repealed and replaced by the Industrial Relations Code, 2020.²³ Pending the constitution of Tribunals under the Code, the Labour Courts, Industrial Tribunals and National Industrial Tribunals constituted under the 1947 Act continue to adjudicate both pending and new cases.²⁴ Certain central and state-level rules necessary for full operational effect remained pending at the time of implementation, and state governments have long exercised their concurrent jurisdiction differently; under the 1947 Act, for instance, some states raised the threshold for prior government approval of lay-off, retrenchment and closure from 100 to 300 workers while others retained the lower threshold, and some introduced sector-specific protections or streamlined local procedures.²⁵ To support the transition, the Ministry of Labour and Employment operates the Shram Suvidha Portal as a single-window platform for registration, compliance and dispute-related filings.²⁶ The International Labour Organization has broadly welcomed the consolidation of India’s labour laws as a step towards modernisation, while noting that further attention is needed to standard forms of employment and to the meaningful consultation of workers in the implementation process.²⁷

D. The Industrial Disputes Act, 1947 and the Industrial Relations Code, 2020 compared

The principal differences between the two frameworks, and their likely impact on delay, may be summarised as follows.

Table 2: The Industrial Disputes Act, 1947 and the Industrial Relations Code, 2020 compared

The Industrial Relations Code, 2020 places clear emphasis on speed: it allows direct access to the Tribunal, within a fixed period, once conciliation has failed, introduces statutory timelines at several stages, encourages electronic filing and record-keeping, and creates a defined process for collective bargaining. Even so, the Code cannot by itself resolve every source of delay. Its success depends on adequately staffed and resourced tribunals, the timely appointment of members, functioning digital systems and genuine enforcement of the statutory time limits it prescribes. The Code offers a framework for faster dispute resolution; whether that promise is realised depends substantially on how faithfully it is implemented.

Towards faster and fairer dispute resolution: suggestions for reform

A. Mandatory pre-litigation conciliation

Industrial disputes in India frequently reach Labour Courts and Industrial Tribunals without any serious attempt at prior resolution through dialogue, resulting in prolonged litigation, increased costs and strained relations between employers and workers. In many instances, the underlying dispute is not especially complex, but the absence of effective communication allows it to escalate. Requiring both parties to participate genuinely in a conciliation process before approaching a court or tribunal, along the lines already required before an Employment Tribunal claim may be lodged in the United Kingdom, could encourage discussion, help the parties understand each other’s concerns, and reduce unnecessary litigation.

B. Professional and independent conciliators

The success of conciliation depends heavily on the skill of the conciliator. Industrial disputes often involve emotional, economic and organisational dimensions in addition to strictly legal questions, so reliance on conventional procedures alone may not always produce satisfactory outcomes. Professional mediators trained in negotiation, communication and conflict management can direct discussions constructively and help parties focus on solutions rather than blame; unlike adjudicators, they do not impose outcomes but facilitate agreement. Equally important is the perceived impartiality of conciliators. Where either party doubts a conciliator’s independence, the credibility of the entire process suffers. Conciliators who are demonstrably free from the influence of employers, trade unions or government officials are more likely to enable candid discussion and durable settlement, strengthening confidence in the wider system of industrial justice.

C. Time-bound conciliation and mediation as a primary tool

Delay has long been one of the most persistent difficulties in India’s dispute resolution framework: proceedings referred for conciliation may continue for months without producing a substantive outcome, frustrating both employers and workers and intensifying workplace tension. Clear and realistic timelines for the conclusion of conciliation, of the kind the Industrial Relations Code, 2020 now prescribes, encourage the parties to engage seriously, since they understand that the opportunity for settlement is time-limited. Timely resolution matters because prolonged uncertainty affects productivity, morale and organisational stability, while workers face financial hardship and employers face operational disruption.

Adjudication remains essential in appropriate cases, but litigation is often lengthy, costly and adversarial in a way that can damage the ongoing employment relationship. Mediation, by contrast, encourages collaboration and mutual understanding, allowing the parties to participate actively in shaping a resolution suited to their particular circumstances; because the outcome is accepted voluntarily, mediated settlements tend to be more durable than outcomes imposed by a tribunal. Encouraging mediation at the earliest practicable stage could therefore reduce pressure on the courts, promote industrial peace and foster a culture of dialogue within workplaces, offering a pragmatic complement to formal adjudication as employment relationships continue to evolve.

Conclusion

Industrial disputes are a frequent and, to some degree, an inevitable feature of the employer-employee relationship, and their unresolved persistence can affect both workers and industry. This study has examined India’s industrial dispute resolution system and the changes introduced by the Industrial Relations Code, 2020, and found that although the Code brings significant and welcome reform, obstacles such as procedural delay, lengthy litigation and the limited use of alternative dispute resolution mechanisms persist.

Addressing these problems requires greater emphasis on conciliation, mediation and other collaborative approaches to dispute settlement. A successful system should aim not only to resolve disputes but to prevent them, through communication, trust and mutual understanding between the parties. Timely and fair resolution is essential to maintaining industrial harmony and to protecting the interests of both employers and workers.

In conclusion, the Industrial Relations Code, 2020 marks a positive step in the reform of Indian labour law, and its recent implementation from November 2025 provides an opportunity to test that promise in practice. Continued improvement, adequate institutional capacity and faithful implementation remain essential if India is to build a quicker, fairer and more cost-effective system of industrial dispute resolution, one capable of contributing to industrial peace, social justice and sustainable economic growth.

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Footnotes

1. The Industrial Disputes Act, 1947, No. 14 of 1947 (India).

2. The Industrial Disputes (Amendment) Act, 1976, No. 32 of 1976 (India) (inserting ch. V-B into the Industrial Disputes Act, 1947).

3. The Industrial Relations Code, 2020, No. 35 of 2020 (India), published in Gazette of India, Extraordinary, pt. II, sec. 1 (Sept. 28, 2020).

4. Industrial Disputes Act, 1947, supra note 1, § 2(k).

5. Workmen of Dimakuchi Tea Estate v. Management of Dimakuchi Tea Estate, AIR 1958 SC 353 (India).

6. Shambu Nath Goyal v. Bank of Baroda, (1978) 2 SCC 353 (India).

7. Standard Vacuum Refining Co. of India Ltd. v. Its Workmen, AIR 1960 SC 948 (India).

8. Industrial Disputes Act, 1947, supra note 1, § 2A.

9. Newspapers Ltd. v. State Industrial Tribunal, U.P., AIR 1957 SC 532 (India).

10. Industrial Disputes Act, 1947, supra note 1, § 4.

11. Industrial Disputes Act, 1947, supra note 1, § 10A.

12. Industrial Disputes Act, 1947, supra note 1, § 10.

13. Bangalore Water Supply and Sewerage Board v. A. Rajappa, AIR 1978 SC 548 (India).

14. National Engineering Industries Ltd. v. State of Rajasthan, (2000) 1 SCC 371, (2000) LLR 228 (India).

15. Fair Work Act 2009 (Cth) s 394 (Austl.).

16. Fair Work Act 2009 (Cth) ss 398, 595 (Austl.); Fair Work Commission, Practice Note: Unfair Dismissal Proceedings, https://www.fwc.gov.au/hearings-decisions/practice-notes/practice-note-unfair-dismissal-proceedings.

17. National Labor Relations Act of 1935, 29 U.S.C. §§ 151–169.

18. Employment Tribunals Act 1996, c. 17, § 18A (UK) (inserted by Enterprise and Regulatory Reform Act 2013, c. 24, § 7(1)).

19. Press Information Bureau, Industrial Relations Code, 2020: Promoting Harmony and Ease of Doing Business (Nov. 23, 2025), https://www.pib.gov.in/FactsheetDetails.aspx?Id=150483.

20. Industrial Relations Code, 2020, supra note 3, § 2(zr).

21. Industrial Relations Code, 2020, supra note 3, § 2(p).

22. Industrial Relations Code, 2020, supra note 3, §§ 44(2), 53(5)–(6), 62(1), 83; PRS Legislative Research, The Industrial Relations Code, 2020: Bill Summary (2020), https://prsindia.org/billtrack/prs-products/prs-bill-summary-3571.

23. Press Release, Ministry of Labour & Employment, Government Makes the Four Labour Codes Effective to Simplify and Streamline Labour Laws (Nov. 21, 2025), https://www.pib.gov.in/PressReleasePage.aspx?PRID=2192463; Industrial Relations Code, 2020, supra note 3, § 104(1) (as substituted by The Industrial Relations Code (Amendment) Act, 2026, No. 1 of 2026, § 2 (India), deemed in force from Nov. 21, 2025); Ministry of Labour & Employment Notification S.O. 5320(E) (Nov. 21, 2025) (India).

24. The Industrial Relations Code (Removal of Difficulties) Order, 2025, Ministry of Labour & Employment Notification S.O. 5683(E) (Dec. 8, 2025) (India), issued under Industrial Relations Code, 2020, supra note 3, § 103, amended by Notification S.O. 464(E) (Feb. 2, 2026) (India); Industrial Relations Code, 2020, supra note 3, § 104(1A) (inserted by Industrial Relations Code (Amendment) Act, 2026, supra note 23, § 2).

25. S.C. Srivastava, Industrial Relations and Labour Laws 485 (7th ed. 2021).

26. Shram Suvidha Portal, Ministry of Labour & Employment, https://shramsuvidha.gov.in (last visited Sept. 1, 2026).

27. International Labour Organization, Labour Dispute Systems: Guidelines for Improved Performance (2013), https://www.ilo.org/publications/labour-dispute-systems-guidelines-improved-performance.