Need for an effective employee grievance redressal mechanism

A swift, practical, thorough, and discreet grievance redressal process can help resolve issues at the workplace, and possibly go a long way toward fostering workplace harmony.

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What is an employee grievance?

CONFLICTING interpretations of contractual obligations or work regulations by employees and the management, violations of the law, perceived unfair treatment of an employee by management, unclear organisational strategy, inconsistent decision making, trust deficit, inability to resolve issues effectively, unempathetic approach, lack of transparency, poor communication, low level of engagement with employees/union members, and failure to manage expectations, amongst others, are some of the causes of employee grievances.

An efficient grievance redressal system provides employees with a mechanism for resolving their concerns. Such a process may also assist employers in resolving problems before they escalate to expensive and time-consuming litigation. A swift, practical, thorough, and discreet grievance redressal process can help resolve issues at the workplace, and possibly go a long way toward fostering workplace harmony.

Is there a legal definition of 'employee grievance', and how is this distinguished from 'disputes' under the Industrial Disputes Act?

A grievance can be defined as a disagreement, or a cause of distress (such as an unsatisfactory working condition) felt to afford reason for complaint or resistance. The word 'dispute' can be defined as a verbal controversy or quarrel.

The Industrial Disputes Act, 1947 ('IDA') or the upcoming Labour Codes do not define the word 'grievance' or 'dispute'. The word 'industrial dispute', though, has been defined as "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 the terms of employment or with the conditions of labour, of any person."

Reading all of this together, it can be said that the grievance happens before and may lead to a dispute, and any resentment in an industrial or work setup may lead to a grievance and dispute, which may have disruptive and expensive consequences for both the employers and the employees.

Also read: Reforming the Settlement of Industrial Disputes Mechanisms in the Industrial Relations Code [Part 1]

What is the link between grievance redressal and natural justice?

Natural justice is the umbrella term used in the English common law for basic principles of procedural fairness, which has been incorporated in most of the common law systems, including India. The two primary components of natural justice are the rule against bias (Nemo judex in causa sua) and the right to a fair hearing (Audi alteram partem). In practice, this means an impartial tribunal (judge/enquiry commission/official, and so on), notice, the opportunity to be heard, and a reasoned order. A lack of these essential safeguards leaves any adjudication or inquiry vulnerable to allegations of unfairness and is liable to be struck down in courts.

Principles of natural justice have closely been identified with fairness everywhere, and any grievance redressal mechanism needs to incorporate these principles to stand the test of fairness in courts and the public opinion.

Is there a statutory process to handle grievances?

The IDA provides the following framework for dispute resolution:

However, this framework does not bar any other internal grievance redressal mechanism. 

Will an employer also resolve his grievances by the same mechanism?

Statutory requirements mandate the grievance redressal mechanism only for employee grievances. But nothing in the law stops employers from formulating a redressal policy that simultaneously resolves the grievances of both the employers and employees. Though technically, the employer has the power to resolve its grievance by taking disciplinary action against the employee, in practice, such an action makes the process adversarial, and there is no resolution.

Thus, a grievance redressal mechanism where the employers can also raise the issues they are facing with individual employees may be able to 'resolve' such a dispute in an amicable manner. Moreover, such a mechanism may have more legitimacy as the employers also take a voluntary recourse to it.

What are the consequences of non-compliance?

Under the IDA, a fine of Rs. 100 (one hundred) is levied for not complying with the GRC requirement. Though the penalty itself is non-consequential, it has related issues of bad publicity for being anti-employee and unfair, which companies are actively trying to avoid.

The absence of a grievance redressal mechanism also leads to simmering problems, which may affect the employees' productivity and high attrition rates. Moreover, in case of unresolved disputes, the employees may approach the courts, which will lead to expensive and time-consuming litigation.

What are the upcoming changes?

The upcoming Industrial Relations ('IR') Code has made the GRC mandatory for industrial establishments with more than 20 employees while making it compulsory for workers to approach the GRC before approaching labour courts. The fine for non-compliance with GRC requirements has also been increased to Rs. 1,00,000 (one lakh).

Also read: Industrial Relations Code and Standing Orders Act: A Deregulation that Spells Chaos and Hurts Workers

What should employers consider?

• Employers should consider formulating a robust grievance redressal policy in compliance with the upcoming GRC requirement.
• The GRC should be formulated in such a way that it should be able to resolve most disputes amicably and internally, thus saving the establishment from avoidable litigation as well as work disruptions.
• The GRC policy and procedures should comply with natural justice principles. This will make the decisions of GRCs more acceptable to the employees while also standing scrutiny in Courts.
• Employers should also consider bringing other employees and related disputes, which are not mandated by the IR Code, within the ambit of the GRC. A dispute resolution mechanism, which resolves the disputes of every stratum of employees, will have more legitimacy with the participation of both employers and employees.