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Conciliation Proceeding

The Conciliation Proceeding is a statutory, non-adjudicatory method of settling industrial disputes, where an impartial third party (the Conciliation Officer or Board of Conciliation) is appointed by the government to mediate between the employer and the workmen.

The core objective is to promote industrial peace by assisting the disputing parties to reach a voluntary and amicable settlement. This mechanism is formalized under the Industrial Disputes Act, 1947 (ID Act).

1. Authorities and Mandatory Intervention (ID Act, Sections 4 & 12)

A. Conciliation Authorities

The ID Act provides for two authorities responsible for conciliation:

  1. Conciliation Officer (Section 4): Appointed by the appropriate government for a specified area or industry, charged with the duty of mediating and promoting settlements.

  2. Board of Conciliation (Section 5): Constituted by the appropriate government for complex disputes, consisting of a neutral chairman and representatives from both parties. Boards are rarely constituted in practice.

B. Mandatory vs. Discretionary Duty (Section 12)

The duty of the Conciliation Officer to intervene depends on the nature of the industry:

  • Public Utility Service (Mandatory): Where the dispute relates to a Public Utility Service (like water supply, transport, or essential health services) and a strike/lockout notice has been given, the Conciliation Officer shall hold proceedings immediately.

  • Non-Public Utility Service (Discretionary): In all other industries, the Conciliation Officer may hold proceedings if an industrial dispute exists or is apprehended.

2. Process and Duties of the Conciliation Officer (Section 12)

Conciliation is characterized by its informal nature, focusing on persuasion and investigation rather than judicial mandate.

A. Commencement of Proceedings

  1. Public Utility Service: Conciliation is deemed to commence immediately upon receipt of the strike/lockout notice.

  2. Non-Public Utility Service: Proceedings commence when the Conciliation Officer formally gives written notice to the parties of their intention to start conciliation.

B. Role and Duties (Non-Adjudicatory)

The Conciliation Officer's duty is to act as a neutral mediator and investigator:

  1. Investigation (Section 12(2)): The officer must investigate the dispute without delay and all matters affecting its merits.

  2. Mediation and Persuasion: The primary goal is to induce the parties to come to a fair and amicable settlement. The officer cannot impose a solution.

  3. Powers (Section 11): The officer is granted powers equivalent to a Civil Court, including the power to summon and enforce the attendance of any person, compel the production of documents, and enter the premises for inquiry.

C. Time Limits

The proceedings must be completed within a prescribed period:

  • Public Utility Service: Within 14 days of commencement.

  • Non-Public Utility Service: Within 42 days (or extended period agreed upon by the parties).

3. Conclusion and Legal Effect

Conciliation proceedings conclude with one of two outcomes: a successful settlement or a failure.

A. Successful Settlement

  1. Settlement Report: If a settlement is achieved, the Conciliation Officer prepares a Memorandum of Settlement signed by the parties to the dispute (management and workmen/union).

  2. Binding Nature (Section 18): A settlement arrived at in the course of conciliation proceedings is highly binding. It is binding not only on the parties who signed it but also on all present and future workmenemployed in the establishment. This provides great stability.

B. Failure of Conciliation (Failure Report)

  1. Submission of Report (Section 12(4)): If no settlement is reached, the officer must submit a full Failure Report to the appropriate Government, detailing the steps taken and the reasons why a settlement could not be achieved.

  2. Government’s Discretion (Section 12(5)): The failure report is not a final order. The Government reviews the report and exercises its discretion (under Section 10) to decide whether to refer the dispute for adjudication (to a Labour Court or Tribunal) or refuse the reference. If the government refuses, it must record and communicate its reasons to the parties.

Conciliation is a mandatory stepping stone in the industrial dispute resolution hierarchy, ensuring that every opportunity for peaceful, mutual agreement is exhausted before resorting to the compulsory and adversarial process of adjudication.

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