Till the 19th century, the government almost everywhere and in India, too followed a policy of laissez faire, i.e., it did not intervene between employer and workers even when some disputes took place. Both parties were left to themselves to settle their affairs as they liked. The attitude of the government and the high-handedness of the employer compelled workers to combine for a common cause to protest against the inhuman conditions of work, meagre wages or harsh treatment by the management.
Towards the end of the 19th century, however, a change was witnessed in the attitude of the government because of the agitation by social philanthropists like Robert Owen, Ruskin an others in the U.K. and many leaders, in India also. Accordingly, the government was constrained to bring in some type of protective legislation relating to conditions of work, regulation of wages compensation in case of injury, accidents and the formation of unions.
In the forties of the last century and at a later period, too, the government laid emphasis on the need for consultation between the representatives of labour management and the government in tripartite and bipartite forums, following the model suggested International Labour Organisation (ILO) recommendations.
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With independence, the Indian Labour Conference, the Standing Labour Committees and Industrial Committees were set up so that all the groups might be consulted before any policy decision was taken vis-a-vis labour.
Under the influence of Gandhian philosophy the government was inspired to formulate a series of codes to regulate labour-management relations on a voluntary basis. It also began to play a regulatory role by referring matters under dispute for conciliation and adjudication. Finally, the state emerged as one of the largest industrial employers in the country.
The Government now regulates the relationship between labour and management and keeps an eye on both the groups. This relationship was sought to be established with the creation of labour courts, industrial tribunals, wage boards, investigation and enquiry committees, etc. which laid down principles, works, rules and regulations, and made awards which were entered in books and have to be observed by both the parties to a dispute.
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Section 10 of the Industrial Act, 1947, empowers the appropriate Government not only to refer the industrial dispute but also to choose the dispute settlement process.
Thus, sub-section (1) thereof provides:
1. Refer the dispute to a Board for promoting a settlement thereof; or
2. Refer any matter appearing to be connected with or relevant to, the dispute to a court for inquiry; or
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3. Refer the dispute or any matter appearing to be connected with or relevant to the dispute, if it relates to any matter specified in the second schedule, to a Labour Court for adjudication; or
4. Refer the dispute or any matter appearing to be connected with, or relevant to the dispute, whether it relates to any matter specified in the Second Schedule or in the Third Schedule, to Tribunal for adjudication.
For Adjudication, Government depends on three tier adjudication machinery, (i) Labour Court (ii) Industrial Tribunals (iii) National Tribunal.