(a) "There are two approaches of managing industrial disputes in an organization—preventive and curative." Examine this…

(a) Preventive and curative approaches

Preventive approaches try to remove causes before they harden into disputes. They include sound personnel policies, collective bargaining, works committees and grievance redressal committees (now under the Industrial Relations Code, 2020), joint management councils and other forms of workers' participation, standing orders that make service rules clear, the voluntary Code of Discipline (1958), tripartite bodies such as the Indian Labour Conference, and the IR Code's rule that a strike or lock-out in any establishment needs 14 days' notice. Their strength is that they keep management and workers talking and allow small irritations—leave, transfers, allowances, safety—to be handled informally. In large organised units, works committees and standing joint councils can reduce strikes by giving workers a voice without confrontation. However, their effectiveness in India is uneven. In MSMEs and the informal sector, bargaining power is weak, union presence is patchy, and management often treats grievance machinery as a formality. Without enforceable norms, preventive devices can become symbolic.

Curative approaches operate after a dispute has arisen. They include conciliation, voluntary arbitration and adjudication. Under the Industrial Relations Code, 2020 (in force since 21 November 2025, replacing the Industrial Disputes Act, 1947), adjudication is by two-member Industrial Tribunals and the National Industrial Tribunal; the former labour courts have been folded into the tribunals. Their merit is that they provide a legal, neutral and binding route, especially where bargaining has failed. Yet their Indian record is mixed. Delays, large backlogs, procedural complexity and weak implementation of awards reduce their credibility. A court award that comes years later may no longer reflect the dispute, and if management ignores it, workers lose faith in the system. Thus preventive mechanisms are more effective for industrial peace in the long run, while curative mechanisms are necessary but often too slow to restore confidence.

(b) Profit-sharing as an experiment

The statement comes from India's Profit-Sharing Committee (1948), which therefore recommended profit-sharing only as an experiment in a few well-established industries. The metaphor of “uncharted seas” is apt because profit-sharing is not a simple wage addition. It raises measurement problems: which profits count, how to separate management effort from worker effort, how to handle reserves, depreciation and cyclical downturns. In boom years workers may expect large bonuses, while in lean years they may feel betrayed if fixed wages are also cut. If profit-sharing is presented as a substitute for regular wage growth, it can create conflict with fixed wage demands and undermine the security that workers seek.

Nevertheless, the voyage is not without charts. The Scanlon Plan and Rucker Plan show that productivity-linked sharing can work when workers participate in cost-saving ideas and receive transparent information. In India, the statutory bonus is itself a limited form of profit-sharing: the Payment of Bonus Act, 1965, now part of the Code on Wages, 2019, requires a minimum of 8.33% and allows up to 20% of wages linked to allocable surplus. Employee stock ownership plans in companies such as Infosys have also given employees a stake in long-term performance. The Second National Commission on Labour (2002) likewise favoured linking a part of wages to productivity and profitability as a supplement to, and not a substitute for, the basic wage. The key is design: a guaranteed base wage, a clear formula, periodic review, and worker participation in governance.

(c) Organs of the ILO

The ILO, founded in 1919 with India as a founding member, has three principal organs. The International Labour Conference is the supreme body, meeting every June in Geneva to set policy, adopt conventions and recommendations and approve the budget. Each member state sends two government delegates, one employer delegate and one worker delegate. The Governing Body is the executive organ; it meets three times a year, sets the Conference agenda, prepares the programme and budget and elects the Director-General. It has 56 titular members (28 government, 14 employer, 14 worker), and 10 of the government seats are held permanently by states of chief industrial importance, including India. The International Labour Office is the permanent secretariat; it provides technical advice, research, statistics and administrative support, but is not itself a tripartite decision-making body. India’s engagement is reflected in its ratification, in 2017, of ILO Convention No. 182 on the Worst Forms of Child Labour and Convention No. 138 on Minimum Age.