Section 42 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 42 lets an employer and workers agree in writing to refer an existing or apprehended industrial dispute to an arbitrator instead of a Tribunal. It covers the agreement, the umpire where arbitrators are even in number, who represents the workers, the award, and the exclusion of the Arbitration and Conciliation Act, 1996.
Where an industrial dispute exists or is apprehended, the employer and the workers may, by a written agreement, refer it to the arbitrator or arbitrators named in it (s.42(1)). An even number of arbitrators needs an umpire (s.42(2)). The agreement is in the prescribed form (Form V under the Central Rules) and a copy goes to the appropriate Government and the conciliation officer (s.42(3), (4)). Nothing in the Arbitration and Conciliation Act, 1996 applies (s.42(8)).
Section 42 at a glance
| Sub-section | What it says |
|---|---|
| 42(1) | Where an industrial dispute exists or is apprehended, employer and workers may refer it by written agreement to the arbitrator(s) named |
| 42(2) | For an even number of arbitrators, the agreement must name an umpire, who enters the reference if the arbitrators are equally divided; the umpire's award prevails and is deemed the arbitration award |
| 42(3) | The agreement is in the prescribed form and signed in the prescribed manner |
| 42(4) | A copy is forwarded to the appropriate Government and the conciliation officer |
| 42(5) | If the Government is satisfied the persons making the reference represent the majority of each party, it may notify; non-party employers and workers concerned may then present their case; representation rules in the proviso |
| 42(6) | The arbitrator(s) investigate and submit a signed award to the appropriate Government |
| 42(7) | After a notification under (5), the Government may by order prohibit continuance of any strike or lock-out in connection with the dispute existing on the date of reference |
| 42(8) | Nothing in the Arbitration and Conciliation Act, 1996 applies to arbitrations under this section |
The agreement: s.42(1) to (4)
Who agrees, and on what
The parties are "the employer and the workers". The dispute must "exist or be apprehended". The reference is to "such person or persons as an arbitrator or arbitrators as may be specified in the arbitration agreement", so the arbitrator is chosen by the parties, not by the Government. That is what "voluntary" means here. Employers and unions exploring this route before approaching a Tribunal can consult our legal dispute resolution team.
The umpire
Section 42(2): where the agreement provides for an even number of arbitrators, "the agreement shall provide for the appointment of another person as umpire who shall enter upon the reference, if the arbitrators are equally divided in their opinion, and the award of the umpire shall prevail and shall be deemed to be the arbitration award for the purposes of this Code." An agreement with two arbitrators and no umpire does not meet the Code's requirement.
Form and signature: Form V and rule 20
Section 42(3) leaves the form and signing to the rules. Rule 20 of the Industrial Relations (Central) Rules, 2026 (G.S.R. 342(E), 8 May 2026) provides:
- The agreement is made in Form V (rule 20(1)).
- It is signed by the parties and accompanied by the consent, in writing or electronically, of the arbitrator or arbitrators (rule 20(2)).
- Employer: signed by the employer, or for an incorporated company or body corporate, by the agent, manager or other officer authorised for the purpose (rule 20(3)(i)).
- Workers: signed by an officer of the registered Trade Union authorised for the purpose, or by five representatives of the workers authorised at a meeting of the concerned workers held for the purpose (rule 20(3)(ii)).
- An individual worker: signed by that worker, or by an officer of the registered Trade Union of which he is a member, or by another worker in the same establishment duly authorised by him (rule 20(3)(iii)).
- "Officer" of a registered Trade Union means the President, Vice-President, Secretary (including General Secretary), a Joint Secretary, or another officer authorised by the President and Secretary; for an employers' association, any officer authorised for the purpose (Explanation to rule 20).
Step 4 is to forward a copy to the appropriate Government and the conciliation officer (s.42(4)). Note that the Central Rules apply to Central-sphere establishments; where the State Government is the appropriate Government, the State's own rules apply.
Example (invented). A management and a recognised union agree to refer a dispute on a productivity-linked incentive to one arbitrator, Mr X. They sign Form V, the union through its General Secretary, the company through its authorised manager, with Mr X's consent attached. Copies go to the Government and the conciliation officer. Had they named two arbitrators, the agreement would need to name an umpire too.
Widening the reference: s.42(5), rule 21 and rule 22
Notification
Where a dispute has been referred and the appropriate Government is satisfied that the persons making the reference "represent the majority of each party", it may notify, in the prescribed manner. Non-party employers and workers "concerned in the dispute" are then given an opportunity of presenting their case before the arbitrator(s). Rule 21 says that the Central Government, if so satisfied, "shall issue a notification" and upload it on the website of the Ministry of Labour and Employment so those outside the agreement can present their case.
Who represents the workers (proviso to s.42(5))
| Type of dispute | Workers represented by |
|---|---|
| Any dispute other than termination of an individual worker (discharge, dismissal, retrenchment or otherwise) | (a) the negotiating union or council, if any; (b) otherwise the Trade Union; (c) otherwise, representatives chosen as prescribed |
| Dispute on termination of an individual worker | The worker, in person or through a representative authorised by him |
Rule 22 (Central) prescribes the choice in case (c): where there is no Trade Union, the representative is chosen by a resolution passed by the majority of the concerned workers in Form VI, authorising him to represent the case, and the workers are bound by the acts of the representatives so chosen.
For the negotiating union or council, see section 14.
The award and strikes: s.42(6) and (7)
The arbitrator or arbitrators "shall investigate the dispute and submit to the appropriate Government the arbitration award signed by the arbitrator or all the arbitrators, as the case may be." The award goes to the Government, and it is signed by all arbitrators if there are several. Where a reference has been made and a notification issued under (5), the Government "may, by order, prohibit the continuance of any strike or lock-out in connection with such dispute which may be in existence on the date of the reference." The power follows the notification, so there is no automatic stoppage on signing the agreement.
The binding force of an award, its publication and the period of its operation are dealt with in later sections; see sections 56 and 57 and section 58.
The 1996 Act is excluded: s.42(8)
"Nothing in the Arbitration and Conciliation Act, 1996, shall apply to arbitrations under this section." So the rules of that Act on appointing arbitrators, on challenging awards and on enforcement do not apply to a section 42 arbitration. The Code's own scheme governs. Parties should therefore not copy a commercial arbitration clause.
Need help with an arbitration agreement?
A voluntary reference is only as good as its agreement: the right form, the right signatories, the umpire clause and the copies to the Government. Our legal dispute resolution team can help you draft the Form V agreement, check the signing authority and plan the representation of non-party workers.
Key takeaways
- Written agreement between employer and workers, naming arbitrator(s) (s.42(1)).
- Even number of arbitrators needs an umpire (s.42(2)).
- Form V under rule 20, signed by authorised persons, with the arbitrator's consent; copy to Government and conciliation officer.
- Non-party workers can be brought in after a notification; individual termination cases are represented by the worker or an authorised representative.
- The Arbitration and Conciliation Act, 1996 does not apply (s.42(8)).
Read next
- Section 43-44: conciliation officers and Industrial Tribunals
- Section 40-41: notice of change in conditions of service
- Section 14: negotiating union and negotiating council
- Industrial disputes under the new labour codes
Disclaimer: Based on the Industrial Relations Code, 2020 (as enacted) and, where noted, the Industrial Relations (Central) Rules, 2026 (G.S.R. 342(E), 8 May 2026), as on 30 September 2026. The Code is in force from 21 November 2025; some provisions may be notified later, and State Governments make their own rules for establishments where the State is the appropriate Government. Verify the current position before acting.