Meaning and Concept of Voluntary Arbitration
Voluntary Arbitration is a method of settling industrial disputes where the employer and workmen, by mutual consent, refer their dispute to an independent arbitrator instead of approaching adjudicatory authorities like Labour Courts or Industrial Tribunals. The concept is recognized under Section 10A of the Industrial Disputes Act, 1947. It is based on the principle of mutual agreement and collective bargaining, reflecting industrial democracy. The main objective of voluntary arbitration is to resolve disputes speedily, amicably, and economically without prolonged litigation. By opting for arbitration, parties retain autonomy in choosing the arbitrator and the procedure. Voluntary arbitration promotes cooperation, reduces industrial unrest, and strengthens harmonious industrial relations.
Procedure and Legal Provisions
The procedure for voluntary arbitration is laid down under Section 10A of the Industrial Disputes Act, 1947. The employer and workmen must enter into a written arbitration agreement before the dispute is referred for adjudication. A copy of the agreement must be sent to the appropriate government and the Conciliation Officer. The arbitrator conducts proceedings in a fair and impartial manner and gives an award after hearing both parties. According to Section 10A(3A), the arbitration award is enforceable and published in the same manner as awards of Labour Courts. This statutory recognition ensures that voluntary arbitration is legally binding and effective.
Importance and Legal Effect
Voluntary arbitration plays a crucial role in reducing the burden on labour courts and tribunals. It encourages parties to resolve disputes through dialogue rather than confrontation. Since arbitration is based on consent, the likelihood of acceptance and compliance with the award is higher. Courts generally respect arbitration awards unless they are contrary to law or principles of natural justice. Voluntary arbitration reflects the progressive approach of labour law by promoting peaceful settlement mechanisms. It strengthens collective bargaining and ensures continuity of industrial operations without disruption due to strikes or lockouts.
Real-Time Practical Example
A manufacturing company and its registered trade union have a dispute regarding revision of work shifts and overtime allowances. Instead of raising an industrial dispute before the Labour Court, both parties mutually agree to refer the matter to a retired labour judge as an arbitrator under Section 10A of the Industrial Disputes Act. After hearing both sides, the arbitrator gives an award balancing the interests of management and workers. The award is accepted and implemented by both parties, thereby avoiding prolonged litigation and maintaining industrial peace. This demonstrates the effectiveness of voluntary arbitration in practice.
Mnemonic to Remember Voluntary Arbitration
Mnemonic: “A.R.B.I.T.R.A.T.E”
A – Agreement in writing
R – Reference by consent
B – Binding award
I – Independent arbitrator
T – Time-saving
R – Reduces litigation
A – Amicable settlement
T – Tribunal avoided
E – Enforceable decision
This mnemonic helps recall the essentials of voluntary arbitration during examinations.
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