Settlement of Industrial Disputes

Settlement of Industrial Disputes

The various types of industrial disputes whether they are managerial, economic or have to do with unfair labour practices can be resolved in different ways. Because industrial unrest has always been around, approaches to resolve labour disputes have been devised. These approaches to industrial dispute settlements include negotiations, conciliation, mediation, arbitration and court action among other ways.

Table Of Contents

What are Industrial Disputes

An industrial dispute can be defined as a difference in opinion, a disagreement, friction or any form of conflict between management and workers or amongst employees. These disputes normally result in strikes, demonstrations, lockouts and boycotts. In many instances, strikes or protests arise when the grievance is connected to fundamental injustices. These could be poor working conditions, unfair treatment of workers or discrimination. Often times demonstrations and boycotts turn violent. The major causes of industrial disputes are related to wages and unfair labour practices. When any type of industrial dispute occurs, it is advisable to settle the issue internally. If the issues cannot be resolved between the workers and employers, then seeking the assistance of a 3rd party such as a trade union may minimise the risks of industrial action such as strikes.

Discussion and Negotiation

The first step in settlements of industrial disputes is through discussion and negotiation. This is when the parties involved attempt to resolve any form of conflict without an external person or mediator. If the dispute is about union recognition, the union will need to fulfil all the steps required to be recognised by an employer such as getting certified with the relevant board. If the disputes are related to the terms of a contract, then all parties can take a ‘collective bargaining’ approach.  This way, either party, the employers and the workers, can seek a solution to the demands of the other party in good faith.  Grievances related to contract interpretation are normally addressed through the specific procedures outlined in the contract. Industrial dispute settlements through discussion and negotiation are only successful if the parties involved are willing to resolve any form of dispute without escalating the matters.


Conciliation is another way in which the settlement of industrial disputes is done. This occurs when an outside party attempts to bring the parties involved together in order for them to resolve an issue. A conciliator often concentrates on one party when trying to get the disputes resolved.


Mediation, also a way in which settlements of industrial disputes is done, is similar to conciliation. The two terms, conciliation and mediation, are sometimes used interchangeably. However, a mediation is more positive and affirmative compared to conciliation. The third party, who acts as a mediator contemplates with both parties without concentrating on one party.  The conciliator or mediator can help clarify issues for either party or may even suggest new approaches if the parties involved cannot come up with a solution to resolve their disputes. A mediator or conciliator acts as a bridge between the two parties thus, either party can reveal facts or positions that they may be unwilling to reveal to each other directly.

Voluntary Arbitration

Voluntary arbitration is another route that can be taken in settlement of industrial disputes. Parties willingly place the dispute before a third party so that the issues can be resolved according to the terms of the submission. The arbitrator’s decision will bind the parties involved. Arbitration is judicial, where either party relies on compromise and mutual understanding. This means that the arbitrator becomes the judge and the parties involved decide his/her jurisdiction and the types of issues that are submitted to him/her.

Compulsory Arbitration

This form of Industrial dispute settlement means that any form of dispute that cannot be resolved by the parties involved on their own is submitted to 3rd parties for final and binding resolutions. The clauses in many contracts state that compulsory arbitration will resolve disputes relating to the interpretation and application of contracts. Compulsory arbitrations are especially useful when it comes to disputes relating to contracts. This is because an independent 3rd party can determine what the agreement between 2 parties shall be when the parties themselves fail to reach an agreement. However, compulsory arbitration has become an emotionally charged term and in many cases resolving issues in such a way may end up straining the relationship between the employer and employee even further.

Investigation and Fact Finding

Investigating and fact finding is an important approach to the settlement of industrial disputes. Fact finding boards investigate industrial disputes and report their findings to the relevant parties involved. However, it is up to the parties involved to accept and act on such findings. The fact-finding board relies on public opinion to force acceptance and action on findings on the part of employers and workers involved.  Investigation and fact finding are important when dealing with disputes related to contract negotiation and interpretation. Such an industrial dispute settlement procedure intervenes between the relationship between the employer and his/her workers in a great way.

Court Action

Courts have always played an important part in settlements of industrial disputes and continue to do so. Union activities such as boycotts and protests end up dragging the disputes to court. It is important to note that when courts get involved in industrial issues the procedure will still be regarded as compulsory arbitration. In most cases, many people encourage that industrial disputes be resolved by courts. Any questions and grievances relating to the enforcement and meaning of collectively bargained agreements may be brought into courts.


Legislation is also an approach to settlement of industrial disputes. Through legislation specific disputes can be avoided whilst procedures for some may be outlined. However, most of the procedures that can be provided through legislation may include the settlement procedures already mentioned above. For example, the national labour act can provide solutions or procedures to resolve the different types of industrial disputes.  On the other hand, in other countries the labour act may not provide such solutions but simply affirm the full freedom of workers to organise and to choose representatives for protection and for negotiating terms of employment. In such cases legislation may not be enough in providing solutions for disputes that cannot be solved by collective bargaining.

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