The new industrial set-up has given birth to the capitalistic economy which divided the industrial society into two groups of labour and capitalists. The interests of these two groups are not common which created industrial disputes.
The causes of industrial disputes can be broadly classified into two categories: economic and non-economic causes. The economic causes will include issues relating to compensation like wages, bonus, allowances, and conditions for work, working hours, leave and holidays without pay, unjust layoffs and retrenchments. The non economic factors will include victimization of workers, ill treatment by staff members, sympathetic strikes, political factors, indiscipline etc.
Economic causes :
The most common causes of industrial disputes are economic causes. These are follows:
Demand for higher Wages: Rise in the cost of living forces the workers to demand more wages to meet the rising cost of living index and to increase their standards of living. This brings them into conflict with their employers who are never willing to pay more wages to workers.
Demand for Allowances and Bonus: Increase in cost of living was the main cause of the demand of certain allowance allowances such as dearness allowance, house allowance, medical allowance, night shift allowance, conveyance allowance etc; by the workers to equate their wages with the rise of prices. Bonus also plays an important role as a cause of industrial dispute. Both the amount and the method of bonus payment have led to a number of disputes.
High Industrial Profits: In the changing world, concept of labour has changed considerably. At the present, employers consider themselves as a partner of the industry and demand their share in the profits.
Non- Economic Causes:
Working Conditions and Working Hours: The working conditions in Indian industries are not hygienic. There is not ample provision of water, heating, lighting, safety etc. On the other hand, working hours are also greater. The demand of palatable working conditions and shorter hours of work led to labour disputes
Modernization and Automation of Plant and Machinery: The attempt at modernization and introduction of automatic machinery to replace labour has been the major cause of disputes of India. Workers go on strike, off and on, to resist such rationalization.
Personnel Causes: Sometime industrial disputes arise because of personnel problems like dismissal, retrenchment, layoff, transfer, and promotion etc.
Political Causes: Various political parties control trade unions in India. In many cases, their leadership vests in hands of persons who are more interested in achieving their political interests rather than the interests of the workers.
Indiscipline: Industrial disputes also take place because of indiscipline and violation on part of the workforce. The managements to curb indiscipline and violence resort to lockouts
Non-reorganization of trade unions: The employers usually do not like the interference by trade unions. They do not recognize them. This brings the workers into conflict with their employers.
Weakness of Trade Unions: Weaknesses of trade unions encourages the employers to deny certain basic needs of the workers such as medical, education and housing facilities etc. This led to resentment on the part of workers who resorted to direct action.
Miscellaneous causes: Behaviour of supervisors, Lack of proper communication between management and workers, Rumors spread out by trade union, Inter-trade union rivalry etc; are the other causes that cause dispute between management and employers.