Conciliation and Voluntary Arbitration

In one line

If a dispute is not settled inside the establishment, a conciliation officer tries to bring the parties to an agreement, and if he fails and reports so, either party may take the dispute straight to the Tribunal; and at any point the parties may agree instead to have an arbitrator decide it.

In exam wording: section 43 of the Industrial Relations Code 2020 empowers the appropriate Government to appoint conciliation officers charged with the duty of mediating in and promoting the settlement of industrial disputes; section 53 requires the conciliation officer, where an industrial dispute exists or is apprehended or a notice under section 62 has been given, to hold conciliation proceedings, to investigate without delay and do all things he thinks fit to induce a fair and amicable settlement, to report a settlement with a memorandum signed by the parties, or, failing settlement, to send a full report within forty-five days, or fourteen days where a section 62 notice was received, whereupon any concerned party may apply to the Tribunal within ninety days; and section 42 allows the employer and workers, by written agreement, to refer a dispute that exists or is apprehended to arbitration.

Why the law has this at all

The two committees of the last chapter but one are inside the establishment and are staffed by the parties themselves. When they fail, somebody from outside has to help, and there are only three things that outsider can be.

He can persuade. That is conciliation: a neutral officer who has no power to decide anything but every power to investigate, to bring the parties together and to propose terms.

He can decide because the parties asked him to. That is arbitration under section 42: the parties agree in writing on the person and are bound by his award.

He can decide because the State says he may. That is adjudication by the Tribunal, the subject of the next chapter.

The order matters and it is deliberate. Conciliation comes first because a settlement the parties made themselves is worth more than an award imposed on them: it is likelier to be observed, it costs nothing, and it takes weeks instead of years. The Code puts a time limit on the attempt so that conciliation cannot become a way of delaying adjudication, and then, crucially, it lets the party move on without needing anybody's permission.

Some words this chapter uses

Conciliation is assisted negotiation. The conciliator has no power to impose an outcome; his function is to bring the parties to one.

Mediating in and promoting the settlement is the statutory description of the conciliation officer's duty, in section 43(1).

Arbitration is a private adjudication: the parties choose the decider and agree in advance to be bound.