Causes of Industrial Disputes

Industry and industrial disputes are considered the two sides of the same coin. Disputes are very common in industries but their consequences are very big, an industrial dispute is not limited to an industry or a particular sector but it spread across the sector and creates social, economical, and political challenges. In this article, we will explain to you what are industrial disputes, their meaning, and definition, what are the causes of industrial disputes, and different methods to resolve industrial disputes.

► What are Industrial Disputes?

An industrial dispute is defined as the disagreement or conflict between an employer and employees regarding pay, unfair labor practices, recognition, other working conditions problems, etc.

Industrial disputes mainly arise due to strife between employees and employer and this strife become wider due to the diverse interest of both employee and employer. The employees are interested in higher wages, and good working conditions and want to right to express or have a voice in management whereas an employer is more interested in profits, productivity, quality, and control of cost this conflict of interest maximizes the possibility of industrial dispute.

Industrial Disputes Meaning

In simple words, industrial disputes mean a kind of difference or a conflict in opinion between employers and workers. This small difference of opinion or dispute may result in lockouts, strikes, bandhs, retracements, and layoffs which directly affect production, profit, loss of market share, or sometimes it led to the closure of the plant.

Definition of Industrial Disputes

As per the Industrial Dispute Act, of 1947. Section 2 (K) “Industrial Disputes mean
any dispute or difference between employers and employers or between employers and
workmen or between workmen and workmen, which is connected with the employment
or non – employment or terms of employment or with the conditions of labor of any

► Causes of Industrial Disputes

The common causes of industrial disputes are –

  • Wages
  • Dearness Allowance and bonus
  • Working condition
  • Retrenchment and layoff
  • Inter union rivalry
  • Violation of rules or codes
  • Political interference
  • Unfair labor practice
  • An authoritarian or autocratic attitude in management

All the above causes of industrial dispute are explained in detail one by one.


The most important cause of industrial disputes is wages. There is always a conflict exists between management and employees related to determining employee wages.

Inflation and increasing cost of living results in demand for high wages which is responsible for the industrial dispute.

Dearness Allowance and Bonus

Employees always want allowances, incentives, and bonus so they can satisfy their financial and non-financial needs but high allowances and bonus create an extra burden on company revenue so the company does not want to pay higher allowances and bonus which result in the never-ending conflict between the organization and employers.

Working Condition

Industrial disputes in India have also resulted from the demand for improved working conditions such as leave, lesser hours of work, better working conditions like better safety measures, canteen facilities, etc.

Retrenchment and Layoff

Another important cause of industrial disputes is regular layoff and retrenchment.

A layoff is defined as a temporary termination of an employee from his job

Interunion Rivalry

Trade Unions are inspired by different political ideologies. In some cases a political party shows its consent to management decisions or policy, on the other hand, some trade unions have discontent related to management decisions which creates never-ending disputes.

Violation of rules or codes

One of the important factors that cause industrial disputes is the violation of rules and codes by both management and workers.

If businesses want to operate peacefully then they should follow the rules and regulations in letter and spirit.

Political interference

All the trade unions have an affiliation or support with respective political parties. This nexus between the trade union and political parties, make the industry a playground for showcasing their money and muscle power which affects the smooth functioning of the organization’s operation.

Unfair labor practices

Many times management uses dilatory tactics or discriminates against workers to suppress or exploit those who are members of the trade union or who participate in the activities of the trade union.

The organization uses unfair labor practices such as pressure on employees when they try to exercise their rights to organize, take part in union activity, refusing to bargain, recruiting new employees during a strike which is not illegal, creating an environment or actually creating an act of force or violence or stop communication, etc.

Recognization dispute

Recognition Disputes arise when the management of an organization unwillingly to
recognize a trade union for the purpose of collective bargaining or to represent its
member employees in case of a conflict or dispute.

Management generally does not want to talk to the trade union over any industrial disputes with representatives of the trade union therefore management deliberately refuses to accept that trade union for the purpose of negotiations or bargaining.

The authoritarian or autocratic attitude of management

The authoritarian attitude of management is considered a root cause of industrial disputes. Management has complete control over regulation or decision-making and undermines the authority of trade unions.

The management uses excessive power to gain absolute control over workers which curbs the rights of workers, and their autonomy, workers do not have any say in decision making and the worker feels they are treated as a salve.

Also Read : What is Industrialization?

► Methods for the settlement of Industrial Disputes

The various methods available for resolving industrial disputes are-

  • Collective bargaining
  • Grievance procedure
  • Arbitration
  • Conciliation
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