Industrial relations has become one of the most delicate and complex problems of

modern industrial society. Industrial progress is impossible without cooperation of

labors and harmonious relationships. Therefore, it is in the interest of all to create and
maintain good relations between employees (labor) and employers (management).

Concept of Industrial Relations:

The term ‗Industrial Relations‘ comprises of two terms: ‗Industry‘ and ‗Relations‘.
―Industry‖ refers to ―any productive activity in which an individual (or a group of
individuals) is (are) engaged‖. By ―relations‖ we mean ―the relationships that exist
within the industry between the employer and his workmen.‖

The term industrial relations explains the relationship between employees and
management which stem directly or indirectly from union-employer relationship.

Industrial relations are the relationships between employees and employers within the
organizational settings. The field of industrial relations looks at the relationship
between management and workers, particularly groups of workers represented by a
union. Industrial relations are basically the interactions between employers, employees
and the government, and the institutions and associations through which such
interactions are mediated.

The term industrial relations has a broad as well as a narrow outlook. Originally,
industrial relations was broadly defined to include the relationships and interactions
between employers and employees. From this perspective, industrial relations covers all
aspects of the employment relationship, including human resource management,
employee relations, and union-management (or labor) relations. Now its meaning has
become more specific and restricted. Accordingly, industrial relations pertains to the
study and practice of collective bargaining, trade unionism, and labor-management
relations, while human resource management is a separate, largely distinct field that
deals with nonunion employment relationships and the personnel practices and policies
of employers.

The relationships which arise at and out of the workplace generally include the
relationships between individual workers, the relationships between workers and their
employer, the relationships between employers, the relationships employers and
workers have with the organizations formed to promote their respective interests, and
the relations between those organizations, at all levels. industrial relations also includes
the processes through which these relationships are expressed (such as, collective
bargaining, workers‘ participation in decision-making, and grievance and dispute
settlement), and the management of conflict between employers, workers and trade
unions, when it arises.

Industry:

Industrial Disputes Act 1947 defines an industry as any systematic activity carried on
by co-operation between an employer and his workmen for the production, supply or
distribution of goods or services with a view to satisfy human wants or wishes whether
or not any capital has been invested for the purpose of carrying on such activity; or such
activity is carried on with a motive to make any gain or profit. Thus, an industry is a
whole gamut of activities that are carried on by an employer with the help of his
employees and labors for production and distribution of goods to earn profits

Employer:

An employer can be defined from different perspectives as:-

• a person or business that pays a wage or fixed payment to other person(s) in exchange
for the services of such persons.
• a person who directly engages a worker/employee in employment.
• any person who employs, whether directly or through another person or agency, one
or more employees in any scheduled employment in respect of which minimum rates of
wages have been fixed.
As per Industrial Disputes Act 1947 an employer means:-
• in relation to an industry carried on by or under the authority of any department of
[the Central Government or a State Government], the authority prescribed in this
behalf, or where no authority is prescribed, the head of the department;
• in relation to an industry carried on by or on behalf of a local authority, the chief
executive officer of that authority;

Employee: -
• Employee is a person who is hired by another person or business for a wage or fixed
payment in exchange for personal services and who does not provide the services as
part of an independent business.
• An employee is any individual employed by an employer.
• A person who works for a public or private employer and receives remuneration in
wages or salary by his employer while working on a commission basis, piece-rates or
time rate.
• Employee, as per Employee State Insurance Act 1948, is any person employed for
wages in or in connection with work of a factory or establishment to which the act
applies.

In order to qualify to be an employee, under ESI Act, a person should belong to any of
the categories:
o those who are directly employed for wages by the principal employer within the
premises or outside in connection with work of the factory or establishment.
o those employed for wages by or through an immediate employer in the premises of
the factory or establishment in connection with the work thereof
o those employed for wages by or through an immediate employer in connection with
the factory or establishment outside the premises of such factory or establishment under
the supervision and control of the principal employer or his agent.
o employees whose services are temporarily lent or let on hire to the principal employer
by an immediate employer under a contract of service (employees of security
contractors, labor contractors, house keeping contractors etc. come under this category).
Employment: The state of being employed or having a job.

Labor market:

The market in which workers compete for jobs and employers compete for workers. It
acts as the external source from which organizations attract employees. These markets
occur because different conditions characterize different geographical areas, industries,
occupations, and professions at any given time.

Industrial Relations
Industrial relations is used to denote the collective relationships between management
and the workers. Traditionally, the term industrial relations is used to cover such
aspects of industrial life as trade unionism, collective bargaining, workers‘ participation
in management, discipline and grievance handling, industrial disputes and
interpretation of labor laws and rules and code of conduct.

In the words of Lester, "Industrial relations involve attempts at arriving at solutions

between the conflicting objectives and values; between the profit motive and social
gain; between discipline and freedom, between authority and industrial democracy;
between bargaining and co-operation; and between conflicting interests of the
individual, the group and the community‖.

The National Commission on Labor (NCL) also emphasize on the same concept.
According to NCL, industrial relations affect not merely the interests of the two
participants- labor and management, but also the economic and social goals to which
the State addresses itself. To regulate these relations in socially desirable channels is a
function, which the State is in the best position to perform.

In fact, industrial relation encompasses all such factors that influence behavior of people
at work. A few such important factors are below:

Institution: It includes government, employers, trade unions, union federations or

associations, government bodies, labor courts, tribunals and other organizations which
have direct or indirect impact on the industrial relations systems.

Characters: It aims to study the role of workers unions and employers‘ federations
officials, shop stewards, industrial relations officers/ manager, mediator/conciliators /
arbitrator, judges of labor court, tribunal etc.

Methods: Methods focus on collective bargaining, workers‘ participation in the

industrial relations schemes, discipline procedure, grievance redressal machinery,
dispute settlements machinery working of closed shops, union reorganization,
organizations of protests through methods like revisions of existing rules, regulations,
policies, procedures, hearing of labor courts, tribunals etc.

Contents: It includes matter pertaining to employment conditions like pay, hours of

works, leave with wages, health, and safety disciplinary actions, lay-off, dismissals
retirements etc., laws relating to such activities, regulations governing labor welfare,
social security, industrial relations, issues concerning with workers‘ participation in
management, collective bargaining, etc.

Industrial Relation System

An industrial relations system consists of the whole gamut of relationships between

employees and employees and employers which are managed by the means of conflict
and cooperation.

A sound industrial relations system is one in which relationships between management

and employees (and their representatives) on the one hand, and between them and the
State on the other, are more harmonious and cooperative than conflictual and creates an
environment conducive to economic efficiency and the motivation, productivity and
development of the employee and generates employee loyalty and mutual trust

Actors in the IR system:

Three main parties are directly involved in industrial relations:

Employers: Employers possess certain rights vis-à-vis labors. They have the right to hire
and fire them. Management can also affect workers‘ interests by exercising their right to
relocate, close or merge the factory or to introduce technological changes.

Employees: Workers seek to improve the terms and conditions of their employment.
They exchange views with management and voice their grievances. They also want to
share decision making powers of management. Workers generally unite to form unions
against the management and get support from these unions.

Government: The central and state government influences and regulates industrial
relations through laws, rules, agreements, awards of court ad the like. It also includes
third parties and labor and tribunal courts.
SCOPE:

The concept of industrial relations has a very wide meaning and connotation. In the
narrow sense, it means that the employer, employee relationship confines itself to the
relationship that emerges out of the day to day association of the management and the
labor. In its wider sense, industrial relations include the relationship between an
employee and an employer in the course of the running of an industry and may project
it to spheres, which may transgress to the areas of quality control, marketing, price
fixation and disposition of profits among others.

The scope or industrial relations is quite vast. The main issues involved here include the
following:
1. Collective bargaining
2. Machinery for settlement of industrial disputes
3. Standing orders
4. Workers participation in management
5. Unfair labor practices
Importance of Industrial Relations

The healthy industrial relations are key to the progress and success. Their significance
may be discussed as under –
• Uninterrupted production – The most important benefit of industrial relations is that
this ensures continuity of production. This means, continuous employment for all from
manager to workers. The resources are fully utilized, resulting in the maximum possible
production. There is uninterrupted flow of income for all. Smooth running of an
industry is of vital importance for several other industries; to other industries if the
products are intermediaries or inputs; to exporters if these are export goods; to
consumers and workers, if these are goods of mass consumption

• Reduction in Industrial Disputes – Good industrial relations reduce the industrial

disputes. Disputes are reflections of the failure of basic human urges or motivations to
secure adequate satisfaction or expression which are fully cured by good industrial
relations. Strikes, lockouts, go-slow tactics, gherao and grievances are some of the
reflections of industrial unrest which do not spring up in an atmosphere of industrial
peace. It helps promoting co-operation and increasing production.
• High morale – Good industrial relations improve the morale of the employees.
Employees work with great zeal with the feeling in mind that the interest of employer
and employees is one and the same, i.e. to increase production. Every worker feels that
he is a co-owner of the gains of industry. The employer in his turn must realize that the
gains of industry are not for him along but they should be shared equally and
generously with his workers. In other words, complete unity of thought and action is
the main achievement of industrial peace. It increases the place of workers in the society
and their ego is satisfied. It naturally affects production because mighty co-operative
efforts alone can produce great results.
• Mental Revolution – The main object of industrial relation is a complete mental
revolution of workers and employees. The industrial peace lies ultimately in a
transformed outlook on the part of both. It is the business of leadership in the ranks of
workers, employees and Government to work out a new relationship in consonance
with a spirit of true democracy. Both should think themselves as partners of the
industry and the role of workers in such a partnership should be recognized. On the
other hand, workers must recognize employer‘s authority. It will naturally have impact
on production because they recognize the interest of each other.
• Reduced Wastage – Good industrial relations are maintained on the basis of
cooperation and recognition of each other. It will help increase production. Wastages of
man, material and machines are reduced to the minimum and thus national interest is
protected.

Thus, it is evident that good industrial relations is the basis of higher production with
minimum cost and higher profits. It also results in increased efficiency of workers. New
and new projects may be introduced for the welfare of the workers and to promote the
morale of the people at work. An economy organized for planned production and
distribution, aiming at the realization of social justice and welfare of the massage can
function effectively only in an atmosphere of industrial peace. If the twin objectives of
rapid national development and increased social justice are to be achieved, there must
be harmonious relationship between management and labor.

Objectives of Industrial Relations:

The main objectives of industrial relations system are:-

• To safeguard the interest of labor and management by securing the highest level of
mutual understanding and good-will among all those sections in the industry which
participate in the process of production.
• To avoid industrial conflict or strife and develop harmonious relations, which are an
essential factor in the productivity of workers and the industrial progress of a country.
• To raise productivity to a higher level in an era of full employment by lessening the
tendency to high turnover and frequency absenteeism

• To establish and promote the growth of an industrial democracy based on labor

partnership in the sharing of profits and of managerial decisions, so that ban
individuals personality may grow its full stature for the benefit of the industry and of
the country as well.
• To eliminate or minimize the number of strikes, lockouts and gheraos by providing
reasonable wages, improved living and working conditions, said fringe benefits.
• To improve the economic conditions of workers in the existing state of industrial
managements and political government.
• Socialization of industries by making the state itself a major employer
• Vesting of a proprietary interest of the workers in the industries in which they are
employed.
Unitary Perspective
In unitarism, the organization is perceived as an integrated and harmonious system,
viewed as one happy family. A core assumption of unitary approach is that
management and staff, and all members of the organization share the same objectives,
interests and purposes; thus working together, hand-in-hand, towards the shared
mutual goals. Furthermore, unitarism has a paternalistic approach where it demands
loyalty of all employees. Trade unions are deemed as unnecessary and conflict is
perceived as disruptive.

From employee point of view, unitary approach means that:

• Working practices should be flexible. Individuals should be business process
improvement oriented, multi-skilled and ready to tackle with efficiency whatever tasks
are required.
• If a union is recognized, its role is that of a further means of communication between
groups of staff and the company.
• The emphasis is on good relationships and sound terms and conditions of
employment.
• Employee participation in workplace decisions is enabled. This helps in empowering
individuals in their roles and emphasizes team work, innovation, creativity, discretion
in problem-solving, quality and improvement groups etc.
• Employees should feel that the skills and expertise of managers supports their
endeavors.
From employer point of view, unitary approach means that:
• Staffing policies should try to unify effort, inspire and motivate employees.
• The organization's wider objectives should be properly communicated and discussed
with staff.
• Reward systems should be so designed as to foster to secure loyalty and commitment.
• Line managers should take ownership of their team/staffing responsibilities.
• Staff-management conflicts - from the perspective of the unitary framework - are seen
as arising from lack of information, inadequate presentation of management's policies.
• The personal objectives of every individual employed in the business should be
discussed with them and integrated with the organization‘s needs.
Pluralistic-Perspective

In pluralism the organization is perceived as being made up of powerful and divergent

sub-groups - management and trade unions. This approach sees conflicts of interest and
disagreements between managers and workers over the distribution of profits as
normal and inescapable. Consequently, the role of management would lean less
towards enforcing and controlling and more toward persuasion and co-ordination.
Trade unions are deemed as legitimate representatives of employees. Conflict is dealt
by collective bargaining and is viewed not necessarily as a bad thing and if managed
could in fact be channeled towards evolution and positive change.Realistic managers
should accept conflict to occur. There is a greater propensity for conflict rather than
harmony.

They should anticipate and resolve this by securing agreed procedures for settling
disputes.
The implications of this approach include:
• The firm should have industrial relations and personnel specialists who advise
managers and provide specialist services in respect of staffing and matters relating to
union consultation and negotiation.
• Independent external arbitrators should be used to assist in the resolution of disputes.
• Union recognition should be encouraged and union representatives given scope to
carry out their representative duties
• Comprehensive collective agreements should be negotiated with unions
Marxist Perspective
view of industrial relations is a by product of a theory of capitalist society and social
change. Marx argued that:
• Weakness and contradiction inherent in the capitalist system would result in
revolution and the ascendancy of socialism over capitalism.
• Capitalism would foster monopolies.
• Wages (costs to the capitalist) would be minimized to a subsistence level.
• Capitalists and workers would compete/be in contention to win ground and establish
their constant win-lose struggles would be evident.

This perspective focuses on the fundamental division of interest between capital and
labor, and sees workplace relations against this background. It is concerned with the
structure and nature of society and assumes that the conflict in employment
relationship is reflective of the structure of the society. Conflict is therefore seen as
inevitable and trade unions are a natural response of workers to their exploitation by
capital.

Bargaining Form And Tactics

A collective bargaining process generally consists of four types of activities- distributive
bargaining, integrative bargaining, attitudinal restructuring and intra-organizational
bargaining. Distributive bargaining: It involves haggling over the distribution of
surplus. Under it, the economic issues like wages, salaries and bonus are discussed. In
distributive bargaining, one party‘s gain is another party‘s loss. This is most commonly
explained in terms of a pie. Disputants can work together to make the pie bigger, so
there is enough for both of them to have as much as they want, or they can focus on
cutting the pie up, trying to get as much as they can for themselves. In general,
distributive bargaining tends to be more competitive. This type of bargaining is
alsoknown as conjunctive bargaining

Integrative bargaining:

This involves negotiation of an issue on which both the parties may gain, or at least
neither party loses. For example, representatives of employer and employee sides may
bargain over the better training programme or a better job evaluation method. Here,
both the parties are trying to make more of something. In general, it tends to be more
cooperative than distributive bargaining. This type of bargaining is also known as
cooperative bargaining.

Attitudinal restructuring:
This involves shaping and reshaping some attitudes like trust or distrust, friendliness or
hostility between labor and management. When there is a backlog of bitterness between
both the parties, attitudinal restructuring is required to maintain smooth and
harmonious industrial relations. It develops a bargaining environment and creates trust
and cooperation among the parties.

Intra-organizational bargaining:

It generally aims at resolving internal conflicts. This is a type of maneuvering to achieve

consensus with the workers and management. Even within the union, there may be
differences between groups. For example, skilled workers may feel that they are
neglected or women workers may feel that their interests are not looked after properly.
Within the management also, there may be differences. Trade unions maneuver to
achieve consensus among the conflicting groups

Characteristics Of Collective Bargaining

• It is a group process, wherein one group, representing the employers, and the other,
representing the employees, sit together to negotiate terms of employment.
• Negotiations form an important aspect of the process of collective bargaining i.e.,
there is considerable scope for discussion, compromise or mutual give and take in
collective bargaining.
• Collective bargaining is a formalized process by which employers and independent
trade unions negotiate terms and conditions of employment and the ways in which
certain employment-related issues are to be regulated at national, organizational and
workplace levels

• Collective bargaining is a process in the sense that it consists of a number of steps. It

begins with the presentation of the charter of demands and ends with reaching an
agreement, which would serve as the basic law governing labor management relations
over a period of time in an enterprise. Moreover, it is flexible process and not fixed or
static. Mutual trust and understanding serve as the by products of harmonious relations
between the two parties.
• It a bipartite process. This means there are always two parties involved in the process
of collective bargaining. The negotiations generally take place between the employees
and the management. It is a form of participation.
• Collective bargaining is a complementary process i.e. each party needs something that
the other party has; labor can increase productivity and management can pay better for
their efforts.
• Collective bargaining tends to improve the relations between workers and the union
on the one hand and the employer on the other.
• Collective Bargaining is continuous process. It enables industrial democracy to be
effective. It uses cooperation and consensus for settling disputes rather than conflict and
confrontation.
• Collective bargaining takes into account day to day changes, policies, potentialities,
capacities and interests.
• It is a political activity frequently undertaken by professional negotiators.

Collective Bargaining Process

Collective bargaining generally includes negotiations between the two parties

(employees‘ representatives and employer‘s representatives). Collective bargaining
consists of negotiations between an employer and a group of employees that determine
the conditions of employment. Often employees are represented in the bargaining by a
union or other labor organization. The result of collective bargaining procedure is called
the collective bargaining agreement (CBA). Collective agreements may be in the form of
procedural agreements or substantive agreements. Procedural agreements deal with the
relationship between workers and management and the procedures to be adopted for
resolving individual or group disputes

This will normally include procedures in respect of individual grievances, disputes and
discipline. Frequently, procedural agreements are put into the company rule book
which provides information on the overall terms and conditions of employment and
codes of behavior. A substantive agreement deals with specific issues, such as basic pay,
overtime premiums, bonus arrangements, holiday entitlements, hours of work, etc. In
many companies, agreements have a fixed time scale and a collective bargaining
process will review the procedural agreement when negotiations take place on pay and
conditions of employment.

The collective bargaining process comprises of five core steps:

1. Prepare: This phase involves composition of a negotiation team. The negotiation team
should consist of representatives of both the parties with adequate knowledge and
skills for negotiation. In this phase both the employer‘s representatives and the union
examine their own situation in order to develop the issues that they believe will be most
important. The first thing to be done is to determine whether there is actually any
reason to negotiate at all. A correct understanding of the main issues to be covered and
intimate knowledge of operations, working conditions, production norms and other
relevant conditions is required.
2. Discuss: Here, the parties decide the ground rules that will guide the negotiations. A
process well begun is half done and this is no less true in case of collective bargaining.
An environment of mutual trust and understanding is also created so that the collective
bargaining agreement would be reached.
3. Propose: This phase involves the initial opening statements and the possible options
that exist to resolve them. In a word, this phase could be described as ‗brainstorming‘.
The exchange of messages takes place and opinion of both the parties is sought.
4. Bargain: negotiations are easy if a problem solving attitude is adopted. This stage
comprises the time when ‗what ifs‘ and ‗supposals‘ are set forth and the drafting of
agreements take place.
5. Settlement: Once the parties are through with the bargaining process, a consensual
agreement is reached upon wherein both the parties agree to a common decision
regarding the problem or the issue. This stage is described as consisting of effective joint
implementation of the agreement through shared visions, strategic planning and
negotiated change.

Importance Of Collective Bargaining

Collective bargaining includes not only negotiations between the employers and unions
but also includes the process of resolving labor-management conflicts. Thus, collective
bargaining is, essentially, a recognized way of creating a system of industrial
jurisprudence. It acts as a method of introducing civil rights in the industry, that is, the
management should be conducted by rules rather than arbitrary decision making. It
establishes rules which define and restrict the traditional authority exercised by the
management.

Importance to employees
• Collective bargaining develops a sense of self respect and responsibility among the
employees.
• It increases the strength of the workforce, thereby, increasing their bargaining
capacity as a group.
• Collective bargaining increases the morale and productivity of employees.
• It restricts management‘s freedom for arbitrary action against the employees.
Moreover, unilateral actions by the employer are also discouraged.
• Effective collective bargaining machinery strengthens the trade unions movement.
• The workers feel motivated as they can approach the management on various matters
and bargain for higher benefits.
• It helps in securing a prompt and fair settlement of grievances. It provides a flexible
means for the adjustment of wages and employment conditions to economic and
technological changes in the industry, as a result of which the chances for conflicts are
reduced.
Importance to employers
1. It becomes easier for the management to resolve issues at the bargaining level rather
than taking up complaints of individual workers.
2. Collective bargaining tends to promote a sense of job security among employees and
thereby tends to reduce the cost of labor turnover to management.
3. Collective bargaining opens up the channel of communication between the workers
and the management and increases worker participation in decision making.
4. Collective bargaining plays a vital role in settling and preventing industrial disputes.
Importance to society
1. Collective bargaining leads to industrial peace in the country
2. It results in establishment of a harmonious industrial climate which supports which
helps the pace of a nation‘s efforts towards economic and social development since the
obstacles to such a development can be reduced considerably.
3. The discrimination and exploitation of workers is constantly being checked.
4. It provides a method or the regulation of the conditions of employment of those who
are directly concerned about them.
Levels of Collective Bargaining

Collective bargaining operates at three levels:

1. National level
2. Sector or industry level
3. Company/enterprise level

Economy-wide (national) bargaining is a bipartite or tripartite form of negotiation

between union confederations, central employer associations and government agencies.
It aims at providing a floor for lower-level bargaining on the terms of employment,
often taking into account macroeconomic goals.

Sectoral bargaining, which aims at the standardization of the terms of employment in

one industry, includes a range ofbargaining patterns. Bargaining may be either broadly
or narrowly defined in terms of the industrial activities covered and may be either split
up according to territorial subunits or conducted nationally.

The third bargaining level involves the company and/or establishment. As a

supplementary type of bargaining, it emphasizes the point that bargaining levels need
not be mutually exclusive.

Objectives Of Trade Unions

Trade unions are formed to protect and promote the interests of their members. Their
primary function is to protect the interests of workers against discrimination and unfair
labor practices. Trade unions are formed to achieve the following objectives:
•Representation
Trade unions represent individual workers when they have a problem at work. If an
employee feels he is being unfairly treated, he can ask /the union representative to help
sort out the difficulty with the manager or employer. Unions also offer their members
legal representation. Normally this is to help people get financial compensation for
work-related injuries or to assist people who have to take their employer to court.

• Negotiation
Negotiation is where union representatives, discuss with management, the issues which
affect people working in an organization. There may be a difference of opinion between
management and union members. Trade unions negotiate with the employers to find
out a solution to these differences. Pay, working hours, holidays and changes to
working practices are the sorts of issues that are negotiated. In many workplaces there
is a formal agreement between the union and the company which states that the union
has the right to negotiate with the employer. In these organizations, unions are said to
be recognized for collective bargaining purposes.
• Voice in decisions affecting workers
The economic security of employees is determined not only by the level of wages and
duration of their employment, but also by the management‘s personal policies which
include selection of employees for lay offs, retrenchment, promotion and transfer. These
policies directly affect workers. The evaluation criteria for such decisions may not be
fair. So, the intervention of unions in such decision making is a way through which
workers can have their say in the decision making to safeguard their interests.
• Member services
During the last few years, trade unions have increased the range of services they offer
their members. These include:
o Education and training - Most unions run training courses for their members on
employment rights, health and safety and other issues. Some unions also help members
who have left school with little education by offering courses on basic skills and courses
leading to professional qualifications.
o Legal assistance - As well as offering legal advice on employment issues, some unions
give help with personal matters, like housing, wills and debt.
o Financial discounts - People can get discounts on mortgages, insurance and loans
from unions.
o Welfare benefits - One of the earliest functions of trade unions was to look after
members who hit hard times. Some of the older unions offer financial help to their
members when they are sick or unemployed
Functions Of Trade Unions
Trade unions perform a number of functions in order to achieve the objectives. These
functions can be broadly classified into three categories:

(i) Militant functions,

(ii) Fraternal functions

Militant Functions

One set of activities performed by trade unions leads to the betterment of the position of
their members in relation to their employment. The aim of such activities is to ensure
adequate wages, secure better conditions of work and employment, get better treatment
from employers, etc. When the unions ffail to accomplish these aims by the method
ofcollective bargaining and negotiations, they adopt an approach and put up a fight
with the management in the form of go-slow tactics, strike, boycott, gherao, etc. Hence,
these functions of the trade unions are known as militant or fighting functions. Thus,
the militant functions of trade unions can be summed up as:
• To achieve higher wages and better working conditions
• To raise the status of workers as a part of industry
• To protect labors against victimization and injustice
Fraternal Functions

Another set of activities performed by trade unions aims at rendering help to its
members in times of need, and improving their efficiency. Trade unions try to foster a
spirit of cooperation and promote friendly industrial relations and diffuse education
and culture among their members. They take up welfare measures for improving the
morale of workers and generate self confidence among them. They also arrange for
legal assistance to its members, if necessary. Besides, these, they undertake many
welfare measures for their members, e.g., school for the education of children, library,
reading-rooms, in-door and out-door games, and other recreational facilities. Some
trade unions even undertake publication of some magazine or journal. These activities,
which may be called fraternal functions, depend on the availability of funds, which the
unions raise by subscription from members and donations from outsiders, and also on
their competent and enlightened leadership. Thus, the fraternal functions of trade
unions can be summed up as:
• To take up welfare measures for improving the morale of workers
• To generate self confidence among workers
• To encourage sincerity and discipline among workers
• To provide opportunities for promotion and growth
• To protect women workers against discrimination
Importance Of Trade Unions
The existence of a strong and recognized trade union is a pre-requisite to industrial
peace. Decisions taken through the process of collective bargaining and negotiations
between employer and unions are more influential. Trade unions play an important role
and are helpful in effective communication between the workers and the management.
They provide the advice and support to ensure that the differences of opinion do not
turn into major conflicts. The central function of a trade union is to represent people at
work. But they also have a wider role in protecting their interests. They also play an
important educational role, organizing courses for their members on a wide range of
matters. Seeking a healthy and safe working union activity.

Trade unions help in accelerated pace of economic development in many ways as

follows:
• by helping in the recruitment and selection of workers.
• by inculcating discipline among the workforce
• by enabling settlement of industrial disputes in a rational manner
• by helping social adjustments. Workers have to adjust themselves to the new working
conditions, the new rules and policies. Workers coming from different backgrounds
may become disorganized, unsatisfied and frustrated. Unions help them in such
adjustment.
Trade unions are a part of society and as such, have to take into consideration the
national integration as well. Some important social responsibilities of trade unions
include:
• promoting and maintaining national integration by reducing the number of industrial
disputes
• incorporating a sense of corporate social responsibility in workers
• achieving industrial peace
Reasons For Joining Trade Unions
The important forces that make the employees join a union are as follows:

1. Greater Bargaining Power

The individual employee possesses very little bargaining power as compared to that of
his employer. If he is not satisfied with the wage and other conditions of employment,
he can leave the job. It is not practicable to continually resign from one job after another
when he is dissatisfied. This imposes a great financial and emotional burden upon the
worker. The better course for him is to join a union that can take concerted action
against the employer. The threat or actuality of a strike by a union is a powerful tool
that often causes the employer to accept the demands of the workers for better
conditions of employment
2. Minimize Discrimination
The decisions regarding pay, work, transfer, promotion, etc. are highly subjective in
nature. The personal relationships existing between the supervisor and each of his
subordinates may influence the management. Thus, there are chances of favoritisms
and discriminations. A trade union can compel the management to formulate personnel
policies that press for equality of treatment to the workers. All the labor decisions of the
management are under close scrutiny of the labor union. This has the effect of
minimizing favoritism and discrimination.

3. Sense of Security
The employees may join the unions because of their belief that it is an effective way to
secure adequate protection from various types of hazards and income insecurity such as
accident, injury, illness, unemployment, etc. The trade union secure retirement benefits
of the workers and compel the management to invest in welfare services for the benefit
of the workers.

4. Sense of Participation
The employees can participate in management of matters affecting their interests only if
they join trade unions. They can influence the decisions that are taken as a result of
collective bargaining between the union and the management.

5. Sense of Belongingness
Many employees join a union because their co-workers are the members of the union.
At times, an employee joins a union under group pressure; if he does not, he often has a
very difficult time at work. On the other hand, those who are members of a union feel
that they gain respect in the eyes of their fellow workers. They can also discuss their
problem with‘ the trade union leaders.

6. Platform for self expression

The desire for self-expression is a fundamental human drive for most people. All of us
wish to share our feelings, ideas and opinions with others. Similarly the workers also
want the management to listen to them. A trade union provides such a forum where the
feelings, ideas and opinions of the workers could be discussed. It can also transmit the
feelings, ideas, opinions and complaints of the workers to the management. The
collective voice of the workers is heard by the management and give due consideration
while taking policy decisions by the management.

7. Betterment of relationships
Another reason for employees joining unions is that employees feel that unions can
fulfill the important need for adequate machinery for proper maintenance of employer-
employee relations. Unions help in betterment of industrial relations among
management and workers by solving the problems peacefully.
Trade Unionism In India
The trade unionism in India developed quite slowly as compared to the western
nations. Indian trade union movement can be divided into three phases.

The first phase (1850 to1900)

During this phase the inception of trade unions took place. During this period, the
working and living conditions of the labor were poor and their working hours were
long. Capitalists were only interested in their productivity and profitability. In addition,
the wages were also low and general economic conditions were poor in industries. In
order to regulate the working hours and other service conditions of the Indian textile
laborers, the Indian Factories Act was enacted in 1881. As a result, employment of child
labor was prohibited

The growth of trade union movement was slow in this phase and later on the Indian
Factory Act of 1881 was amended in 1891. Many strikes took place in the two decades
following 1880 in all industrial cities. These strikes taught workers to understand the
power of united action even though there was no union in real terms. Small associations
like Bombay Mill-Hands Association came up by this time.

The second phase (1900 to 1946)

This phase was characterized by the development of organized trade unions and
political movements of the working class. Between 1918 and 1923, many unions came
into existence in the country. At Ahmedabad, under the guidance of Mahatma Gandhi,
occupational unions like spinners‘ unions and weavers‘ unions were formed. A strike
was launched by these unions under the leadership of Mahatma Gandhi who turned it
into a satyagrah. These unions federated into industrial union known as Textile Labor
Association in 1920.In 1920, the First National Trade union organization (The All India
Trade Union Congress (AITUC)) was established. Many of the leaders of this
organization were leaders of the national Movement. In 1926, Trade union law came up
with the efforts of Mr. N N Joshi that became operative from 1927. During 1928, All
India Trade Union Federation (AITUF) was formed.

The third phase began with the emergence of independent India (in 1947). The partition
of country affected the trade union movement particularly Bengal and Punjab. By 1949,
four central trade union organizations were functioning in the country:
1. The All India Trade Union Congress,
2. The Indian National Trade Union Congress,
3. The Hindu Mazdoor Sangh, and
4. The United Trade Union Congress
The working class movement was also politicized along the lines of political parties. For
instance Indian national trade Union Congress (INTUC) is the trade union arm of the
Congress Party. The AITUC is the trade union arm of the Communist Party of India.
Besides workers, white-collar employees, supervisors and managers are also organized
by the trade unions, as for example in the Banking, Insurance and Petroleum industries.

Trade unions in India

The Indian workforce consists of 430 million workers, growing 2% annually. The Indian
labor markets consist of three sectors:
1. The rural workers, who constitute about 60 per cent of the workforce.
2. Organized sector, which employs 8 per cent of workforce, and
3. The urban informal sector (which includes the growing software industry and other
services, not included in the formal sector) which constitutes the rest 32 per cent of the
workforce.
At present there are twelve Central Trade Union Organizations in India:
1. All India Trade Union Congress (AITUC)
2. Bharatiya Mazdoor Sangh (BMS)
3. Centre of Indian Trade Unions (CITU)
4. Hind Mazdoor Kisan Panchayat (HMKP)
5. Hind Mazdoor Sabha (HMS)
6. Indian Federation of Free Trade Unions (IFFTU)
7. Indian National Trade Union Congress (INTUC)
8. National Front of Indian Trade Unions (NFITU)
9. National Labor Organization (NLO)
10. Trade Unions Co-ordination Centre (TUCC)
11. United Trade Union Congress (UTUC) and
12. United Trade Union Congress - Lenin Sarani (UTUC - LS)
FIGURES REGARDING TRADE UNIONS

Table Showing Growth Of Trade Unions and Membership is following below

Growth of trade unions and membership

Industrial Relation Policy

Prior to 1991, the industrial relations system in India sought to control conflicts and
disputes through excessive labor legislations. These labor laws were protective in
nature and covered a wide range of aspects of workplace industrial relations like laws
on health and safety of labors, layoffs and retrenchment policies, industrial disputes
and the like. The basic purpose of these laws was to protect labors. However, these
protectionist policies created an atmosphere that led to increased inefficiency in firms,
over employment and inability to introduce efficacy. With the coming of globalization,
the 40 year old policy of protectionism proved inadequate for Indian industry to remain
competitive as the lack of flexibility posed a serious threat to manufacturersbecause
they had to compete in the international market.

With the advent of liberalization in1992, the industrial relations policy began to change.
Now, the policy was tilted towards employers. Employers opted for workforce
reduction, introduced policies of voluntary retirement schemes and flexibility in
workplace also increased. Thus, globalization brought major changes in industrial
relations policy in India. The changes can be summarized as follows:
• Collective bargaining in India has mostly been decentralized, but now in sectors
where it was not so, are also facing pressures to follow decentralization.
• Some industries are cutting employment to a significant extent to cope with the
domestic and foreign competition e.g. pharmaceuticals. On the other hand, in other
industries where the demand for employment is increasing are experiencing
employment growths.
• In the expansionary economy there is a clear shortage of managers and skilled labor.
• The number of local and enterprise level unions has increased and there is a
significant reduction in the influence of the unions.
• Under pressure some unions and federations are putting up a united front e.g.
banking.
• Another trend is that the employers have started to push for internal unions i.e. no
outside affiliation.
• HR policies and forms of work are emerging that include, especially in multi-national
companies, multi-skills, variable compensation, job rotation etc. These new policies are
difficult to implement in place of old practices as the institutional set up still needs to be
changed.
• HRM is seen as a key component of business strategy.
• Training and skill development is also receiving attention in a number of industries,
especially banking and information technology
Labor Market Related Terms
Labor Market: A labor market is defined as a pool of all potential workers who compete
for jobs. It also includes the employers who compete for workers. Labor markets are
based on the supply and demand of labor in a country or a specific location that are able
and willing to work.

Labor Force: Labor force includes all persons classified either as employed or
unemployed during a specified period of time, usually a day or a week. Labor force can
be categorized as self-employed, wage and salary earners, casual workers and
unemployed.

Casual Workers: Casual workers are those workers who are generally employedby
small entrepreneurs on daily or weekly basis on a low wage rate. They are not entitled
to any paid holiday leave or paid sick leaves.

Unemployed persons: The persons in the labor market who are without work, that is,
without paid employment or self-employment and are currently either available for
work or are seeking any work are considered to be unemployed.

Labor force participation rate: It is the number of persons in the labor force as a
percentage of the working-age population. The working-age population is the
population above a certain reference age like15 years old and over or 15–64, etc.

Employment rate: It is ratio of employed persons to the total labor force. It is the
percentage of working age people who have jobs or are employed.

Unemployment rate: It is the ratio of unemployed people to the total labor force.

Underemployed persons: Workers who are employed, but not in the desired capacity,
whether in terms of compensation, hours, or level of skill and experience. The skills of
such persons are underutilized, for example paying low wages to a highly skilled
employee. Underemployment also refers to a situation where a major portion of labor
force is unemployed.

Underemployment rate: It is the ratio of underemployed to either total labor force or

total employment

Labor Market In India

The Indian labor market can be categorized into three sectors:
• Rural workers , who constitute about 60% of the workforce
• Organized of the formal sector, that constitutes about 8% of the workforce; and
• Urban unorganized or informal structure which represents the 32% of the workforce.

• The chart below describes the estimated increase in the number of labors from 1977-78
to 2004-05. The labor force has grown from 276.3 million to 385.5 million between 1977-
78 and1993-94 showing an annual growth rate of 2.1%. During the year 1999-2000, the
workforce was estimated to be 407 million. In 2004-05 the labor market consisted of 430
million workers and has grown up to 500 million in 2006

Two-third of India‘s workforce is employed in agriculture and rural industries. One-

third of rural households are agricultural labor households, subsisting on wage
employment. Only about 9 percent of the total workforce is in the organized sector; the
remaining 91 percent are in the unorganized sector, self-employed, or employed as
casual wage laborers. The labor force in year 2006 has grown up to 509.3 million out of
which 60% are in agriculture, 12% are employed in industries and the residual 28% are
in services.

Labor force can be divided into four categories: self employed workers, wage and salary
earners, casual workers and unemployed. Of these, self-employed are most loosely
connected to labor market because of the possibilities of work-sharing and work
spreading in a self-employed enterprise. Non-contractual casual laborers have the
closest connection to labor market on almost day-to day basis. Same is the case with
those unemployed who are actively seeking work. Contractual and hence stable hired
employment (with the same employer and/or in the same job) on a regular basis is
covered in the description wage and salary workers. Persons who are engaged in their
own farm or non- farm enterprises are defined as self employed. The employees in an
enterprise can be either regular salaried/ wage employees or casual wage employees
who are normally engaged on a day today basis. The casual wage workers both in
public work and other types of work don‘t have any job security or social security.
These workers, either in formal or informal sector or in private households, are informal
workers. The regular salaried/wage employees are those working in others farm or
non- farm enterprises and getting in return salary or wages on a regular basis and not
on the basis of daily or periodic renewal of work contract. This category includes those
getting time wage as well as those receiving piece wage or salary and paid apprentices,
both full time and part time. This category of persons may, therefore, include persons
engaged regularly on an hourly basis, temporary workers, out- workers, etc. The table
given below classifies labor force across male-female and rural-urban dimensions. It is
clear that
• Self-employment and casual labor statuses are more prevalent among rural than
urban labor force and among female than male workers.
• The Incidence of unemployment is higher in the urban than in the rural labor force
with nearly 48 per cent of the total unemployed persons coming from aggregate urban
labor force whose share in total (rural plus urban) work force is 22 per cent.
• Those reporting wage and salary earning dominate in the urban labor force, their
share being around 62 per cent (lines 10 to 12 of Table).

Organized and Unorganized Labor

In India, a major chunk of labor force is employed in the unorganized sector. The
unorganized / informal employment consists of causal and contributing family
workers; self employed persons in un-organized sector and private households; and
other employed in organized and unorganized enterprises that are not eligible either for
paid, sick or annual leave or for any social security benefits given by the employer.

According to the results of the National Sample Survey conducted in 1999-2000, total
work force as on 1.1.2000 was of the order of 406 million. About 7 % of the total work
force is employed in the formal or organized sector (all public sector establishments and
all non-agricultural
establishments in private sector with 10 or more workers) while remaining 93% work in
the informal or unorganized sector. The NSS 55th round, 1999-2000 also covered non-
agricultural enterprises in the informal sector in India. As per that survey, there were
44.35 million enterprises and 79.71 million workers employed thereof in the non-
agricultural informal sector of the economy. Among these 25.01 million enterprises
employing 39.74 million workers were in rural areas whereas 19.34 million enterprises
with 39.97 million workers in the urban area. Among the workers engaged in the
informal sector, 70.21 million are full time and 9.5 million part times. Percentage of
female workers to the total workers is 20.2 percent.

The table below describes major employment trends for the organized and unorganized
sector for the years 1983, 1987-88, 1993-94 and 1999-2000. It is evident that throughout
this period a large portion of the workforce in India is found to be employed in the
unorganized sector. Out of 397million workers in 1999-2000, it is estimated that 369
million workers (nearly 93 per cent) are employed in the unorganized segment of the
economy whereas only 28 million workers (7 per cent) are engaged in the organized
sector. The share of unorganized employment in the economy has displayed
remarkable steadiness over the years. The share of informal employment has risen from
92 per cent (nearly 276 million out of 300 million) in 1983 to 93 per cent in the 1999-2000.
It is clear that employment opportunity in the organized sector has remained more or
less stagnant, showing only a marginal increase from 24 million in 1983 to 28 million in
1999-2000.

The largest numbers of informal workers are in agriculture. In fact, 98.84 percent of the
employment in agriculture is informal. In the non-agricultural sector, the highest
numbers of informal employees are in retail trade, construction, land transport, textiles
etc.

Thus, the unorganized sector plays a vital role in terms of providing employment
opportunity to a large segment of the working force in the country and contributes to
the national product significantly. The contribution of the unorganized sector to the net
domestic product and its share in the total NDP at current prices has been over 60%. In
the matter of savings the share of household sector in the total gross domestic saving
mainly unorganized sector is about three fourth. Thus unorganized sector has a crucial
role in our economy in terms of employment and its contribution to the National
Domestic Product, savings and capital formation.

Employment In India
The organized sector in India consists of 293.77 thousand industrial establishments. Out
of these, 172.34 thousand are public sector enterprises while 121.43 thousand are in
private sector. Since 2004, an increase of 1.4% has been recorded in the number of
establishments in the organized sector. As on the 31st March, 2005 the total employment
in the organized sector was estimated to be 264.58 lakh while in 2004, it was 264.43 lakh.
This means there has been an increase of 0.1% in employment. The public sector
employs about 180.7 lakh persons while the private sector employs 84.52 lakh persons.
The negative growth of employment was recorded in public sector while private sector
showed an increasing trend, that is, the employment in public sector decreased by 1
percent while private sector increased by 2.5 percent.

The branch wise analysis of the public sector data reveals that Central Govt. shows
maximum negative growth in employment followed by Quasi Govt., Local Bodies and
State Govt. The same trend continued in 2005 also, in which the Central Govt. recorded
a negative growth of 2.9% followed by Quasi Govt. with a negative growth of 2.2%. The
Local Bodies and State Govt. were also subjected to a negative growth of 0.4% and 0.3%
respectively

State wise analysis reflects that only Punjab and Kerala recorded a decrease of more
than 3 percent. Decrease in employment above 1 percent was observed in Madhya
Pradesh Uttar Pradesh, Chandigarh and Andhra Pradesh. An increase of more than 3
percent in employment was observed in Goa, Himachal Pradesh and Gujarat and 1
percent or more in Pondicherry, Karnataka, West Bengal, Uttaranchal, Assam and
Nagaland.

While analyzing the figures zone wise, highest decrease of 1.6 percent was seen in
Central Zone followed by 1 percent in Northern Zone and 0.6 percent in Southern Zone
whereas the highest increase was 2 percent in Western Zone followed by 1.1 percent in
North-Eastern Zone and 0.9 percent in Eastern Zone in employment

Women Employment
Women workforce constitutes an integral part of total workforce in India. On 31st
march 2004, women constituted 19 per cent of the total workforce. The participation of
women in the labor force has always been lower than that of men, in the rural as well as
urban areas. The work participation rate for women has increased significantly. In 1981,
work participation rate for women was only 19.67 per cent which increased up to 22.73
per cent in 1991 and 26.68 per cent in 2001. In the women workforce, women from rural
areas are greater in number as compared to the urban women. Amongst rural women
workers, a majority is employed in agriculture and some are employed in cottage
industries. In the urban areas, women workers are primarily employed in the
unorganized sectors. As on the 31st March, 2005 a total number of 50.16 Lacs women
employees were engaged in the organized sector, out of which 29.21 lacs (58per cent) in
the public sector and 20.95 lacs (42per cent) in the Private Sector. Employment of
women in public sector increased by 1.1 percent and by 2.5 percent in the private sector
during 2004-2005. The zone wise analysis showed an increase of 8 percent in North-
Eastern Zone, followed by Western Zone (5.3per cent), Eastern Zone (3per cent) and
Central Zone (1.3per cent) and Northern Zone (1.2per cent). Only Southern Zone
registered a marginal dip of 0.8 percent

Some Vital Statistics

• The number of women job seekers has increased from 99.3 lacs in 1999 to 106.1 lacs in
2004. Thus the percentage of women job seekers to the total job-seekers has also
increased from 24.6per cent in 1999 to 26.2per cent in 2004.
Table 1: Number of Women Job Seekers
Year Number of Women (in lacs) Percentage to total
1999 99.3 24.6
2000 104.5 25.3
2001 108.8 25.9
2002 106.0 25.9
2003 107.5 26.0
2004 106.1 26.0
•
• Number of Educated Women Job Seekers as on December 2004 was 7537.7 thousand.
Educated Women at the end of 2004 accounted for 25.8per cent of the total educated
job-seekers.
Table 2: Number of Educated Women Job Seekers
Year Number of Women Percentage to total
2000 7911.7 27.1
2001 8525.6 28.1
2002 7921.4 26.8
2003 8032.4 26.6
2004 7537.7 25.8
•
• The state wise analysis reflects that Kerala has the maximum (21.1 lacs) women job-
seekers followed by West Bengal (19.3 lacs) and Tamil Nadu (15.3 lacs) while minimum
number of women job-seekers are in Rajasthan (1.0 lacs).
• The percentage of educated women job seekers among the total women job seekers
has gone down from 73.3per cent to 70.4per cent in 2004.
• The work participation rate for women was 25.68 per cent in 2001. This shows an
improvement over 22.73 per cent in 1991 and 19.67 per cent in 1981.
• Women workers constituted 19 per cent of the total organized sector employment in
the country, as compared to 18.4 per cent in the previous year. As on 31st March, 2004,
there were about 49.34 lacs women workers employed in the organized sector (Public
and Private Sector).
• As far as industries are concerned, in 2005, the manufacturing industry faced a dip of
1.1per cent in women employment. On the other hand, other industries reflected an
increase in women employment. An increase of 7.8 per cent was registered in Wholesale
and Retail Trade followed by 5.6 per cent in Mining and Quarrying, 5.5 per cent in
Agriculture, Hunting, Forestry & Fishing, 5.2 per cent in Financing, Insurance Real
Estate & Business Services, 1.7 per cent in Electricity, Gas & Water, 1.5 per cent in
Construction, 1.4 per cent in Community, Social and Personal Services and 1.2 per cent
in Transport, Storage & Communications.
Effective Discipline
Discipline is the key to success. Theodore Roosevelt has said ―With self-discipline
almost everything is possible‖. Self discipline makes employee realize what is required
at work. Discipline can be positively related to performance. It is the bridge between
goals and accomplishments. Effective discipline should be aimed at the behavior, and
not at the employee personality. This is because the reason for discipline is to improve
performance rather than punishing the employee
Factors necessary for effective disciplinary system include:
1. Training of supervisors is necessary: Supervisors and mangers need to be trained on
when and how discipline should be used. It is necessary to provide training on
counseling skills as these skills are used while dealing with problem employees.
Moreover, discipline decisions taken by trained supervisors are considered fair by both
employees and managers.
2. Centralization of discipline: Centralized means that the discipline decisions should be
uniform throughout the organization. The greater the uniformity, higher will be the
effectiveness of discipline procedure.
3. Impersonal discipline: Discipline should be handled impersonally. Managers should
try to minimize the ill feelings arising out of the decisions by judging the offensive
behavior and not by judging the person. Managers should limit their emotional
involvement in the disciplinary sessions.
4. Review discipline decisions: The disciplinary decisions must be reviewed before
being implemented. This will ensure uniformity and fairness of the system and will
minimize the arbitrariness of the disciplinary system.
5. Notification of conduct that may result in discipline: Actions that lead to misconduct
can be listed and documented so the employees are aware of such actions. This will
unable them to claim that they have not been notified, in advance, regarding the same.
6. Information regarding penalties: The employer should define the penalties and other
actions like warnings, reprimands, discharge and dismissal well in advance. All these
action plans must be communicated to the employees.
7. Discipline shall be progressive: Discipline system should be progressive in nature. In
a progressive discipline approach the severity of actions to modify behavior increases
with every step as the employee continues to show improper behavior. The advantage
of this approach is that employees can‘t take it for granted.
8. Documentation: Effective discipline requires accurate, written record keeping and
written notification to the employees. Thus less chance will be left for the employee to
say the he ―did not know‖ about the policy.
9. Discipline should be fair: The disciplinary decision should be fair enough for the
employee. Both over-penalization and under-penalization are considered to be unfair
for the problem employee. Moreover, an internal fairness is to be maintained, that is,
two employees who have committed the same offense should be equally punished.
10. Discipline shall be flexible and consistent: The manager administering discipline
must consider the effect of actions taken by other managers and of other actions taken
in the past. Consistent discipline helps to set limits and informs people about what they
can and cannot do. Inconsistent discipline leads to confusion and uncertainty.
11. Disciplinary action should be prompt: The effective discipline should be immediate.
The longer time lag between the misconduct offense and the disciplinary action will
result in ineffectiveness of the discipline.
Approaches to Discipline
Handling employee misconduct is a very critical task to be performed by the senior
managers. Misconduct and other offensive behaviors often lead to decreased levels of
productivity as they affect the individual performance of the employees. To manage
discipline among employees, every company opts for a discipline policy which
describes the approach it will follow to handle misconduct

Broadly defined, there are two approaches to discipline employees. They are:
• Positive Discipline Approach
• Progressive Discipline Approach
Code Of Discipline In Industry

To maintain harmonious relations and promote industrial peace, a Code of Discipline

has been laid down which applies to both public and private sector enterprises. It
specifies various obligations for the management and the workers with the objective of
promoting cooperation between their representatives.

The basic objectives of Code of Discipline are to:

• Maintain peace and order in industry.
• Promote constructive criticism at all levels of management and employment.
• Avoid work stoppage in industry

• Secure the settlement of disputes and grievances by a mutually agreed procedure

• Avoiding litigations
• Facilitate a free growth of trade unions
• Eliminate all forms of coercion, intimidation and violations of rules and regulations
governing industrial relations.
The Code is based on the following principles:
• There should be no strike or lockout without prior notice.
• No unilateral action should be taken in connection with any industrial matter.
• Employees should follow go slow tactics
• No deliberate damage should be caused to a plant or property
• Acts of violations, intimidation and coercion should not be resorted
• The existing machinery for the settlement of disputes should be utilized.
• Actions that disturb cordial relationships should be avoided.
To ensure better discipline in industry, management and unions agree on not indulging
into various actions. These actions can b summarized as follows:

Management and Union(s) agree

• that no unilateral action should be taken in connection with any industrial matter and
that should be settled at appropriate level
• that the existing machinery for settlement of disputes should be utilized with the
utmost efficiency
• that there should be no strike or lock-out without prior notice
• that neither party will have recourse to coercion, intimidation, victimization or go –
slow tactics
• that they will avoid litigation, sit-down and stay-in strikes and lock-outs
• that they will promote constructive co-operation between their representatives at all
levels and as between workers themselves
• that they will establish upon a mutually agreed grievance procedure which will
ensure a speedy and full investigation leading to settlement;
• that they will abide by various stages in the grievance procedure and take no
arbitrary action which would by-pass this procedure; and
Management Agrees
• not to increase work-loads unless agreed upon or settled otherwise
• not to support or encourage any unfair labor practice such as discrimination and
victimization of any employee
• to take prompt action for settlement of grievances and implementation of settlements,
awards, decision and orders
• to take appropriate disciplinary action against its officers and members in cases where
enquiries reveal that they were responsible for precipitate action by workers leading to
indiscipline
Union agrees
• not to engage in any form of physical duress
• not to permit demonstrations which are not peaceful
• that their members will not engage or cause other employees to engage in any union
activity during working hours
• to discourage unfair labor practices such as negligence of duty, damage to property
and insubordination
• to take prompt action to implement awards, agreements, settlements and decisions
Factors Guiding Code Of Conduct

The code of discipline and conduct communicates to the employees, the expected
behavior and the professional responsibilities. The significance of code of conduct is
that each employee should behave and perform in a way that preserves the company
values and commitments. The code expects employees to conduct business with
integrity and honesty. Moreover, it expects the employer to be an equal opportunity
employer.

The Code of Conduct policy of a company is determined on the basis of following

factors:

1. Honesty and integrity: The organization expects the employees to observe honesty
and integrity and such conduct should be fair and transparent. The employees should
show truthfulness in actions throughout their tenure in the organization.
2. Disclosure of information: The employees should not disclose the company
information to third parties and other outside organizations. However the employers
should reveal the various policies of the organization to their employees and make
them aware about the code of conduct and other policies.
3. Harassment: The work environment should be free from all kinds of harassments,
especially sexual harassments and verbal harassments. No physical harassments like
hitting or pushing are acceptable on part of employees.
4. Outside employment: Employees should not indulge in to any kind of concurrent
employment without the prior knowledge of employer.
5. Conflict of interest: An employee should not indulge into other professions or
services or other interests which might conflict with the interest of the company. This
means personal interests should not overshadow organizational interests.
6. Confidentiality: Employees should protect company‘s confidential information. The
financial records and unpublished data should be kept within the organizations and
should not be spread outside the organization.
7. Equal opportunity employer: This factor expects the employer to be an equal
opportunity, that is, no discrimination should be done on the basis of caste, color, race,
gender, religion or physical disabilities.
8. Misusing company resources: Employees should not misuse company resources,
intellectual property, time and other facilities. They are provided to them for business
purposes and thus, should be used in a cost effective way.
9. Health and safety: An employer should provide a safe and healthy work environment
to its employees. Proper cleanliness and lightening should be provided. A health and
safety committee can be set up by the employer consisting of representatives of workers
as well.
10. Payment and gifts: The employees should neither accept nor offer any kind of illegal
payments, donations, remuneration and gifts from outsiders.
Grievance In Industry

Grievance means any type of dissatisfaction or discontentments arising out of factors

related to an employee‘s job which he thinks are unfair. A grievance arises when an
employee feels that something has happened or is happening to him which he thinks is
unfair, unjust or inequitable. In an organization, a grievance may arise due to several
factors such as:
• Violation of management‘s responsibility such as poor working conditions
• Violation of company‘s rules and regulations
• Violation of labor laws
• Violation of natural rules of justice such as unfair treatment in promotion, etc

Various sources of grievance may be categorized under three heads: (i) management
policies, (ii) working conditions, and (iii) personal factors
1. Grievance resulting from management policies include:
o Wage rates
o Leave policy
o Overtime
o Lack of career planning
o Role conflicts
o Lack of regard for collective agreement
o Disparity between skill of worker and job responsibility

2. Grievance resulting from working conditions include:

o Poor safety and bad physical conditions
o Unavailability of tools and proper machinery
o Negative approach to discipline
o Unrealistic targets

3. Grievance resulting from inter-personal factors include

o Poor relationships with team members
o Autocratic leadership style of superiors
o Poor relations with seniors
o Conflicts with peers and colleagues
It is necessary to distinguish a complaint from grievance. A complaint is an indication
of employee dissatisfaction that has not been submitted in written. On the other hand, a
grievance is a complaint that has been put in writing and made formal.

Grievances are symptoms of conflicts in industry. Therefore, management should be

concerned with both complaints and grievances, because both may be important
indicators of potential problems within the workforce. Without a grievance procedure,
management may be unable to respond to employee concerns since managers are
unaware of them. Therefore, a formal grievance procedure is a valuable communication
tool for the organization

Grievance Procedure

Grievance procedure is a formal communication between an employee and the

management designed for the settlement of a grievance. The grievance procedures
differ from organization to organization.

1. Open door policy

2. Step-ladder policy

Open door policy: Under this policy, the aggrieved employee is free to meet the top
executives of the organization and get his grievances redressed. Such a policy works
well only in small organizations. However, in bigger organizations, top management
executives are usually busy with other concerned matters of the company. Moreover, it
is believed that open door policy is suitable for executives; operational employees may
feel shy to go to top management.

Step ladder policy: Under this policy, the aggrieved employee has to follow a step by
step procedure for getting his grievance redressed. In this procedure, whenever an
employee is confronted with a grievance, he presents his problem to his immediate
supervisor. If the employee is not satisfied with superior‘s decision, then he discusses
his grievance with the departmental head. The departmental head discusses the
problem with joint grievance committees to find a solution. However, if the committee
also fails to redress the grievance, then it may be referred to chief executive. If the chief
executive also fails to redress the grievance, then such a grievance is referred to
voluntary arbitration where the award of arbitrator is binding on both the parties.

GRIEVANCE PROCEDURE IN INDIAN INDUSTRY

The 15th session of Indian Labor Conference held in 1957 emphasized the need of an
established grievance procedure for the country which would be acceptable to unions
as well as to management. In the 16th session of Indian Labor Conference, a model for
grievance procedure was drawn up. This model helps in creation of grievance
machinery. According to it, workers‘ representatives are to be elected for a department
or their union is to nominate them. Management has to specify the persons in each
department who are to be approached first and the departmental heads who are
supposed to be approached in the second step. The Model Grievance Procedure
specifies the details of all the steps that are to be followed while redressing grievances.
These steps are:
STEP 1: In the first step the grievance is to be submitted to departmental representative,
who is a representative of management. He has to give his answer within 48 hours.

STEP 2: If the departmental representative fails to provide a solution, the aggrieved

employee can take his grievance to head of the department, who has to give his decision
within 3 days.

STEP 3: If the aggrieved employee is not satisfied with the decision of departmental
head, he can take the grievance to Grievance Committee. The Grievance Committee
makes its recommendations to the manager within 7 days in the form of a report. The
final decision of the management on the report of Grievance Committee must be
communicated to the aggrieved employee within three days of the receipt of report. An
appeal for revision of final decision can be made by the worker if he is not satisfied with
it. The management must communicate its decision to the worker within 7 days

STEP 4: If the grievance still remains unsettled, the case may be referred to voluntary
arbitration.

Employee Health and Safety

For smooth functioning of an organization, the employer has to ensure safety and
security of his employees. Health and safety form an integral part of work environment.
A work environment should enhance the well being of employees and thus should be
accident free.

The terms health, safety and security are closely related to each other. Health is the
general state of well being. It not only includes physical well being, but also emotional
and mental well being. Safety refers to the act of protecting the physical well being of an
employee. It will include the risk of accidents caused due to machinery, fire or diseases.
Security refers to protecting facilities and equipments from unauthorized access and
protecting employees while they are on work.

In organizations the responsibility of employee health and safety falls on the

supervisors or HR manager. An HR manager can help in coordinating safety programs,
making employees aware about the health and safety policy of the company, conduct
formal safety training, etc. The supervisors and departmental heads are responsible for
maintaining safe working conditions. Responsibilities of managers:
• Monitor health and safety of employees
• Coach employees to be safety conscious
• Investigate accidents
• Communicate about safety policy to employees
Responsibilities of supervisors/departmental heads:
• Provide technical training regarding prevention of accidents
• Coordinate health and safety programs
• Train employees on handling facilities an equipments
• Develop safety reporting systems
• Maintaining safe working conditions
Legislations governing Occupational Health & safety in India

* Factories act1948
* Mines act 1952
* Dock workers act(Safety, Health & Welfare)1986

Issues in Employee Health & Safety

Organizations frame many approaches to ensure health and safety of their employees.
But not all of the approaches focus on contribution of both work design and employee
behavior to safety. An organizational approach to safety is effective only when both the
work design and employee behavior work in coordination towards it. Many
organizational and individual issues emerge in management of employee health and
safety. They can be summarized as follows:

1. Physical Work Settings: The physical settings of work affect the performance of
employees to a great extent. Some of these factors include temperature, noise levels, and
proper lighting affect job performance. Other work setting factors include size of work
area, kinds of materials used, distance between work areas, cubicle arrangement, et al.

2. Sick Building Syndrome: It is a situation in which employees experience acute health

problems and discomfort due to the time spent in a building (particularly their
workplace). Some factors that lead to sick buildings include poor air quality, inadequate
ventilation, improper cleanliness, rodents, stench of adhesives and glues, et al.
3. Ergonomics: The term comes from the Greek word ergon, which means ―work,‖ and
omics which means ―management of.‖ Ergonomics is the study of physiological,
psychological, and engineering design aspects of a job, including such factors as fatigue,
lighting, tools, equipment layout, and placement of controls. It is the interface between
men and machines. Ergonomics is taken into consideration when designing the
workstation for computer operators. Problems of back ache, eye strain and headache
arise due to long working hours spent in front of computers.
4. Engineering of Work Equipments and Materials: Accidents can be prevented in a way
by proper placements of dangerous machines. Moreover design of such machines and
equipments also plays an important role in safety. Providing safety guards and covers
on equipments, emergency stop buttons and other provisions help in reducing the
accidents considerably.
5. Cumulative Trauma and Repetitive Stress: Cumulative trauma disorder occurs when
same muscles are used repetitively to perform some task. This results in injuries of
musculoskeletal and nervous system. Employees encounter high levels of mental and
physical stress also.
6. Accident Rates and Individuals: An individual approach to safe environment helps in
reducing the accident rates. This is generally because more problems are caused by
careless employees than by machines or employer negligence. A positive attitude
towards work environment and other practices promotes employee safety.

Occupational Health & Safety Management System

The Bureau of Indian Standards has formulated a standard for Occupational health and
safety management systems. This standard is known as IS 18001:2000 Occupational
Health and Safety Management System. Any OHS management system adopted by an
organization should incorporate all the requirements specified in this standard.

Organizations willing to adopt OH&S Management System have to obtain a license for
the same. For this purpose, they have to ensure that they are operating according to the
IS 18001:2000 standard. The organization has to apply at the nearest Regional Office of
Bureau of Indian Standards in the prescribed proforma along with a questionnaire and
application fee

The application has to be signed by the Chief Executive Officer of the organization or
any person who has been assigned by the CEO for this purpose. Also, manual or the
documentation of OHS management system is to be submitted along with the
application.

Once an application is received by the regional office of BIS, it is scrutinized for all the
requirements. If the application is complete, it is accepted, otherwise more information
is sought from the applicant organization. If the application is accepted, an adequacy
audit takes place and a preliminary visit (pre-audit) is conducted by an audit team.
Immediately after this, initial certification audit takes place on the basis of which an
audit report is prepared by the audit team. If the report comes out to be satisfactory,
recommendations for the award of certifications are made by the team and the
certificate is granted to the organization by the concerned authorities. However if the
report does not meet all the requirements, the applicant organization is asked to take
corrective actions after which another audit is conducted.

Process of OH&S Management System certification

* Source: Bureau of Indian Standards (BIS Home Page)

Employee Welfare
Welfare includes anything that is done for the comfort and improvement of employees
and is provided over and above the wages. Welfare helps in keeping the morale and
motivation of the employees high so as to retain the employees for longer duration. The
welfare measures need not be in monetary terms only but in any kind/forms. Employee
welfare includes monitoring of working conditions, creation of industrial harmony
through infrastructure for health, industrial relations and insurance against disease,
accident and unemployment for the workers and their families.

Labor welfare entails all those activities of employer which are directed towards
providing the employees with certain facilities and services in addition to wages or
salaries

Labor welfare has the following objectives:

1. To provide better life and health to the workers
2. To make the workers happy and satisfied
3. To relieve workers from industrial fatigue and to improve intellectual, cultural and
material conditions of living of the workers.
The basic features of labor welfare measures are as follows:
1. Labor welfare includes various facilities, services and amenities provided to workers
for improving their health, efficiency, economic betterment and social status.
2. Welfare measures are in addition to regular wages and other economic benefits
available to workers due to legal provisions and collective bargaining
3. Labor welfare schemes are flexible and ever-changing. New welfare measures are
added to the existing ones from time to time.
4. Welfare measures may be introduced by the employers, government, employees or
by any social or charitable agency.
5. The purpose of labor welfare is to bring about the development of the whole
personality of the workers to make a better workforce.
The very logic behind providing welfare schemes is to create efficient, healthy, loyal
and satisfied labor force for the organization. The purpose of providing such facilities is
to make their work life better and also to raise their standard of living. The important
benefits of welfare measures can be summarized as follows:
• They provide better physical and mental health to workers and thus promote a
healthy work environment
• Facilities like housing schemes, medical benefits, and education and recreation
facilities for workers‘ families help in raising their standards of living. This makes
workers to pay more attention towards work and thus increases their productivity.
• Employers get stable labor force by providing welfare facilities. Workers take active
interest in their jobs and work with a feeling of involvement and participation.
• Employee welfare measures increase the productivity of organization and promote
healthy industrial relations thereby maintaining industrial peace.
• The social evils prevalent among the labors such as substance abuse, etc are reduced
to a greater extent by the welfare policies
Labor Welfare Fund

Labor welfare refers to all the facilities provided to labor in order to improve their
working conditions, provide social security and raise their standard of living. Majority
of labor force in India is working in unorganized sector. In order to provide social
security to such workers, Government has introduced Labor Welfare Fund to ensure
assistance to unorganized labors. Five different welfare funds, which are governed by
different legislations, are administered by Ministry of Labor. The purpose of these
welfare funds is to provide housing, medical care, educational and recreational facilities
to workers employed in beedi industry and non-coal mines and cine workers.

The five legislations governing welfare funds are as follows:

• The Mica Mines Labor Welfare Fund Act, 1946
• The Limestone and Dolomite Mines Labor Welfare Fund Act, 1972
• The Iron Ore, Manganese Ore and Chrome Ore Mines Labor Welfare Fund Act, 1976
• The Cine Workers‘ Welfare Fund Act, 1981
Schemes under welfare funds provide assistance with respective to the following:
• Public health and sanitation
• Housing
• Recreational (including standard of living)
• Social security
• Educational facilities
• Water supply
• Transportation
• Medical facilities (prevention of diseases)
• Social security
o Group Insurance Schemes for Beedi and Cine workers
o Social Security under Mine Workers Welfare Fund

• Family welfare
The welfare funds are raised by government by imposing cess on manufactured beedis,
feature films, export of mica, consumption of limestone & dolomite and consumption
and export of iron ore, manganese ore & chrome ore. An explanation of the cess levied
under different legislations is given below:
• Beedi Workers Welfare Cess Act, 1976 provides for levy of cess by way of excise duty
on manufactured beedis from Re.1/- to Rs.5/- per thousand manufactured beedis. This
is presently Rs 2 per 1000 beedis with effect from 28th June 2000.
• The Cine Workers Welfare Cess Act, 1981 provides for duty of cess, at such rate not
being less than one thousand rupees and not exceeding twenty thousand rupees, on
every feature film submitted to the Chairman, Central Board of Film Certification. This
is Rs 20000 per feature film of Hindi and English and for regional films it is Rs 10000 per
film with effect from 20th April 2000.
• The Iron Ore, Manganese Ore & Chrome Ore Mines Labor Welfare Cess Act, 1976
provides for levy and collection of cess on Iron Ore, Manganese Ore & Chrome Ore
between 50p to Re.1/-, Re.1/- to Rs.6/- and Rs.3/- to Rs.6/- respectively.
• The Limestone and Mines Labor Welfare Fund Act, 1972 provides for the levy and
collection of cess on Limestone and Dolomite as a duty of excise at such rate not
exceeding one rupee per metric tone of limestone & dolomite. The rate of cess on
Limestone and Dolomite is Re.1/- with effect from 27th December 2000.
• Mica Mines Labor Welfare Fund Act, 1946, provides for levy and collection of cess on
all mica exported as duty of Customs not exceeding 6.25% ad valorem. This is 4.5% ad
valorem on export with effect from 1st November 1990.
Employee Welfare Schemes
Organizations provide welfare facilities to their employees to keep their motivation
levels high. The employee welfare schemes can be classified into two categories viz.
statutory and non-statutory welfare schemes. The statutory schemes are those schemes
that are compulsory to provide by an organization as compliance to the laws governing
employee health and safety. These include provisions provided in industrial acts like
Factories Act 1948, Dock Workers Act (safety, health and welfare) 1986, Mines Act 1962.
The non statutory schemes differ from organization to organization and from industry
to industry

STATUTORY WELFARE SCHEMES

The statutory welfare schemes include the following provisions:
1. Drinking Water: At all the working places safe hygienic drinking water should be
provided.
2. Facilities for sitting: In every organization, especially factories, suitable seating
arrangements are to be provided.
3. First aid appliances: First aid appliances are to be provided and should be readily
assessable so that in case of any minor accident initial medication can be provided to
the needed employee.
4. Latrines and Urinals: A sufficient number of latrines and urinals are to be provided in
the office and factory premises and are also to be maintained in a neat and clean
condition.
5. Canteen facilities: Cafeteria or canteens are to be provided by the employer so as to
provide hygienic and nutritious food to the employees.
6. Spittoons: In every work place, such as ware houses, store places, in the dock area
and office premises spittoons are to be provided in convenient places and same are to
be maintained in a hygienic condition.
7. Lighting: Proper and sufficient lights are to be provided for employees so that they
can work safely during the night shifts.
8. Washing places: Adequate washing places such as bathrooms, wash basins with tap
and tap on the stand pipe are provided in the port area in the vicinity of the work
places.
9. Changing rooms: Adequate changing rooms are to be provided for workers to change
their cloth in the factory area and office premises. Adequate lockers are also provided to
the workers to keep their clothes and belongings.
10. Rest rooms: Adequate numbers of restrooms are provided to the workers with
provisions of water supply, wash basins, toilets, bathrooms, etc.
NON STATUTORY SCHEMES
Many non statutory welfare schemes may include the following schemes:
1. Personal Health Care (Regular medical check-ups): Some of the companies provide
the facility for extensive health check-up
2. Flexi-time: The main objective of the flextime policy is to provide opportunity to
employees to work with flexible working schedules. Flexible work schedules are
initiated by employees and approved by management to meet business commitments
while supporting employee personal life needs
3. Employee Assistance Programs: Various assistant programs are arranged like
external counseling service so that employees or members of their immediate family can
get counseling on various matters.
4. Harassment Policy: To protect an employee from harassments of any kind, guidelines
are provided for proper action and also for protecting the aggrieved employee.
5. Maternity & Adoption Leave – Employees can avail maternity or adoption leaves.
Paternity leave policies have also been introduced by various companies.
6. Medi-claim Insurance Scheme: This insurance scheme provides adequate insurance
coverage of employees for expenses related to hospitalization due to illness, disease or
injury or pregnancy.
7. Employee Referral Scheme: In several companies employee referral scheme is
implemented to encourage employees to refer friends and relatives for employment in
the organization.
Causes Of 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.
• Wages and allowances: Since the cost of living index is increasing, workers generally
bargain for higher wages to meet the rising cost of living index and to increase their
standards of living. In 2002, 21.4% of disputes were caused by demand of higher wages
and allowances. This percentage was 20.4% during 2003 and during 2004 increased up
to 26.2%. In 2005, wages and allowances accounted for 21.8% of disputes.
• Personnel and retrenchment: The personnel and retrenchment have also been an
important factor which accounted for disputes. During the year 2002, disputes caused
by personnel were 14.1% while those caused by retrenchment and layoffs were 2.2%
and 0.4% respectively. In 2003, a similar trend could be seen, wherein 11.2% of the
disputes were caused by personnel, while 2.4% and 0.6% of disputes were caused by
retrenchment and layoffs. In year 2005, only 9.6% of the disputes were caused by
personnel, and only 0.4% were caused by retrenchment.
• Indiscipline and violence: From the given table, it is evident that the number of
disputes caused by indiscipline has shown an increasing trend. In 2002, 29.9% of
disputes were caused because of indiscipline, which rose up to 36.9% in 2003. Similarly
in 2004 and 2005, 40.4% and 41.6% of disputes were caused due to indiscipline
respectively. During the year 2003, indiscipline accounted for the highest percentage
(36.9%) of the total time-loss of all disputes, followed by cause-groups wage and
allowance and personnel with 20.4% and11.2% respectively. A similar trend was
observed in 2004 where indiscipline accounted for 40.4% of disputes.
• Bonus: Bonus has always been an important factor in industrial disputes. 6.7% of the
disputes were because of bonus in 2002 and 2003 as compared to 3.5% and 3.6% in 2004
and 2005 respectively.
• Leave and working hours: Leaves and working hours have not been so important
causes of industrial disputes. During 2002, 0.5% of the disputes were because of leave
and hours of work while this percentage increased to 1% in 2003. During 2004, only
0.4% of the disputes were because of leaves and working hours.
• Miscellaneous: The miscellaneous factors include

- Inter/Intra Union Rivalry

- Charter of Demands
- Work Load
- Standing orders/rules/service conditions/safety measures
- Non-implementation of agreements and awards etc.

Analysis Of Industrial Disputes

The number of industrial disputes in country has shown slow but steady fall over the
past ten years. In 1998, the total number of disputes was 1097 which fell by more than
half to 440 in 2006.It is being estimated that this trend will continue in 2007 as well. To
support this, only 45 cases of disputes have been recorded during the first four months
of 2007. This significant decline is attributed to the serious attempts made by industries
to improve industrial relations with their workers. However, a deeper look at the data
reveals that the number of mandays (i.e., the industrial unit of production equal to the
work one person can produce in a day) lost due to disputes has not come down as
significantly. The country, on an average, lost 25.4 million mandays of work annually
between 1998 and 2006, which might have affected its industrial output.

More than 2.14 lakh mandays were lost due to work stoppages in 23 industrial disputes
during January to March 2007. Though there has been a decline in the number of
strikes, the country still witnessed some major strikes between 2004 and 2006, like those
in Honda, Escorts, Apollo, and Skumars factories and in SBI bank.

On analyzing the data sector wise, it is clear that the private sector has witnessed
greater number of disputes as compared to the public sector. In 2005, only 57 disputes
were recorded in public sector which resulted in a wage loss of 79 Crores. In contrast to
this, 399 disputes were recorded in the private sector. In the recent past, maximum
number of disputes has been recorded in the manufacturing, agriculture and mining
and quarrying industries.
Strikes
A strike is a very powerful weapon used by trade unions and other labor associations to
get their demands accepted. It generally involves quitting of work by a group of
workers for the purpose of bringing the pressure on their employer so that their
demands get accepted. When workers collectively cease to work in a particular
industry, they are said to be on strike.

According to Industrial Disputes Act 1947, a strike is ―a cessation of work by a body of

persons employed in an industry acting in combination; or a concerted refusal of any
number of persons who are or have been so employed to continue to work or to accept
employment; or a refusal under a common understanding of any number of such
persons to continue to work or to accept employment‖. This definition throws light on a
few aspects of a strike. Firstly, a strike is a referred to as stoppage of work by a group of
workers employed in a particular industry. Secondly, it also includes the refusal of a
number of employees to continue work under their employer.

In a strike, a group of workers agree to stop working to protest against something they
think is unfair where they work. Labors withhold their services in order to pressurize
their employment or government to meet their demands. Demands made by strikers
can range from asking for higher wages or better benefits to seeking changes in the
workplace environment. Strikes sometimes occur so that employers listen more
carefully to the workers and address their problems.

Causes of strikes:
Strikes can occur because of the following reasons:
• Dissatisfaction with company policy
• Salary and incentive problems
• Increment not up to the mark
• Wrongful discharge or dismissal of workmen
• Withdrawal of any concession or privilege
• Hours of work and rest intervals
• Leaves with wages and holidays
• Bonus, profit sharing, Provident fund and gratuity
• Retrenchment of workmen and closure of establishment
• Dispute connected with minimum wages

TYPES OF STRIKE
1. Economic Strike: Under this type of strike, labors stop their work to enforce their
economic demands such as wages and bonus. In these kinds of strikes, workers ask for
increase in wages, allowances like traveling allowance, house rent allowance, dearness
allowance, bonus and other facilities such as increase in privilege leave and casual
leave.
2. Sympathetic Strike: When workers of one unit or industry go on strike in sympathy
with workers of another unit or industry who are already on strike, it is called a
sympathetic strike. The members of other unions involve themselves in a strike to
support or express their sympathy with the members of unions who are on strike in
other undertakings. The workers of sugar industry may go on strike in sympathy with
their fellow workers of the textile industry who may already be on strike.
3. General Strike: It means a strike by members of all or most of the unions in a region
or an industry. It may be a strike of all the workers in a particular region of industry to
force demands common to all the workers. These strikes are usually intended to create
political pressure on the ruling government, rather than on any one employer. It may
also be an extension of the sympathetic strike to express generalized protest by the
workers.
4. Sit down Strike: In this case, workers do not absent themselves from their place of
work when they are on strike. They keep control over production facilities. But do not
work. Such a strike is also known as 'pen down' or 'tool down' strike. Workers show up
to their place of employment, but they refuse to work. They also refuse to leave, which
makes it very difficult for employer to defy the union and take the workers' places. In
June 1998, all the Municipal Corporation employees in Punjab observed a pen down
strike to protest against the non-acceptance of their demands by the state government.
5. Slow Down Strike: Employees remain on their jobs under this type of strike. They do
not stop work, but restrict the rate of output in an organized manner. They adopt go-
slow tactics to put pressure on the employers.
6. Sick-out (or sick-in): In this strike, all or a significant number of union members call
in sick on the same day. They don‘t break any rules, because they just use their sick
leave that was allotted to them on the same day. However, the sudden loss of so many
employees all on one day can show the employer just what it would be like if they
really went on strike.
7. Wild cat strikes: These strikes are conducted by workers or employees without the
authority and consent of unions. In 2004, a significant number of advocated went on
wildcat strike at the City Civil Court premises in Bangalore. They were protesting
against some remarks allegedly made against them by an Assistant Commissioner
Lockouts
A lockout is a work stoppage in which an employer prevents employees from working.
It is declared by employers to put pressure on their workers. This is different from a
strike, in which employees refuse to work. Thus, a lockout is employers‘ weapon while
a strike is raised on part of employees. Acc to Industrial Disputes Act 1947, lock-out
means the temporary closing of a place of employment or the suspension of work or the
refusal by an employer to continue to employ any number of persons employed by him.

A lockout may happen for several reasons. When only part of a trade union votes to
strike, the purpose of a lockout is to put pressure on a union by reducing the number of
members who are able to work

For example, if a group of the workers strike so that the work of the rest of the workers
becomes impossible or less productive, the employer may declare a lockout until the
workers end the strike. Another case in which an employer may impose a lockout is to
avoid slowdowns or intermittent work-stoppages. Occupation of factories has been the
traditional method of response to lock-outs by the workers' movement.

PICKETING
When workers are dissuaded from work by stationing certain men at the factory gates,
such a step is known as picketing. If picketing does not involve any violence, it is
perfectly legal. Pickets are workers who are on strike that stand at the entrance to their
workplace. It is basically a method of drawing public attention towards the fact that
there is a dispute between the management and employees.

The purpose of picketing is:

• to stop or persuade workers not to go to work
• to tell the public about the strike
• to persuade workers to take their union's side
GHERAO
Gherao in Hindi means to surround. It denotes a collective action initiated by a group of
workers under which members of the management are prohibited from leaving the
industrial establishment premises by workers who block the exit gates by forming
human barricades. The workers may gherao the members of the management by
blocking their exits and forcing them to stay inside their cabins. The main object of
gherao is to inflict physical and mental torture to the person being gheraoed and hence
this weapon disturbs the industrial peace to a great extent

Analysis Of Strikes and Lockouts

In 1990, 1,825 strikes and lockouts were recorded. As a result, 24.1 million workdays
were lost, from which 10.6 million were lost to strikes and 13.5 million to lockouts. More
than 1.3 million workers were involved in these labor disputes. The number and
seriousness of strikes and lockouts have varied from year to year. As can be seen from
the below chart, there has been a steep decline in the number of strikes and lockouts.
This continuous decline in strikes and lockouts indicates that the industrial relations in
India are improving. There were 227 strikes in 2005, resulting in the loss of 10.81 million
man-days, while the number of lockouts stood at 229 with a loss of 18.86 million man-
days. In January-September 2006, there were only 154 strikes and 192 lockouts across
the country, as compared to the statistics of 2005, which resulted in the time loss of 3.16
million man-days and 10.60 million man-days respectively.

The number of strikes and lockouts, taken together, was down by 4.4 per cent in 2005.
During 2005, West Bengal experienced the maximum instances of strikes and lockouts
(19216) followed by Kerala (3619) and Rajasthan (19247). Industrial disturbances were
concentrated mainly in manufacturing (textile), financial intermediation, agriculture
and mining and quarrying industries during 2005.

During 2000, 426 strikes and 325 lockouts were observed which resulted in total time-
loss of 28.76 million mandays. Maximum time-loss was caused by 297 lockouts during
2003 which resulted in a time-loss of 27.05 million mandays. As compared to previous
years, in 2006 only 13.76 million mandays were lost due to strikes and lockouts.
Prohibition of Strikes and Lock-Outs

Employees are prohibited from striking according to the section 22 of Industrial

Disputes Act 1947. Employees, who are working in a public utility service, cannot go on
a strike without giving a notice of strike within the six weeks before striking. They can
not go on strike either within fourteen days of providing the strike notice or before the
expiry of the date of strike specified in any such notice. The same rule applies to the
employers. Employers who are carrying on a public utility service can not lockout any
of their employees without giving them a prior notice within six weeks before the lock
out or within the fourteen days of giving such a notice. Moreover, the notice of strike or
lockout is to be given in a prescribed manner showing the number of persons involved
in the strike/lockout

The notice of strike or lockout is not necessary when there is already a strike or lockout
going on in the company. However, a notice should be issued on the day on which the
lockout is declared just to intimate the appropriate authorities about the lockout. The
employer is supposed to report the number of notices of strikes received by him to the
appropriate Government or the authority prescribed by the government within the five
days of receiving such notices.

Illegal Strikes and Lock-Outs

A strike or a lock-out is illegal if it is declared in noncompliance with the section 22 (as

defined above) of Industrial Disputes Act 1947, that is, if the notice period is not served
or if the strike is held within the fourteen days of issuing the notice of strike. If a strike
or lockout has already taken place and is being referred to a Board, the continuance of
such a strike or lock out is not illegal provided it is in compliance with the provisions of
act. Moreover, a lockout declared in consequence of an illegal strike or a strike declared
in consequence of an illegal lock-out shall not be deemed to be illegal.

Penalty for Illegal Strikes and Lock-outs

A workman who is involved in an illegal strike can be penalized with imprisonment for
a term extendable to a month or with a fine or fifty rupees or both. In similar way, an
employer who initiates and continues a lockout is punishable with imprisonment
extendable to a month or with a fine of one thousand rupees or both. According to
Section 25 of Industrial Disputes Act 1947, no person should provide any sort of
financial aid to any illegal strike or lock-out. Any person who knowingly provides such
a help in support of any illegal strike or lock-out is punishable with imprisonment for a
term which may extend to six months, or with fine which may extend to one thousand
rupees, or with both

Measures For Improving Industrial Relations

The following measures should be taken to achieve good industrial relations:

• Strong and Stable Union: A strong and stable union in each industrial enterprise is
essential for good industrial relations. The employers can easily ignore a weak union on
the plea that it hardly represents the workers. The agreement with such a union will
hardly be honored by a large section of workforce. Therefore, there must be strong and
stable unions in every enterprise to represent the majority of workers and negotiate
with the management about the terms and conditions of service.
• Mutual Trust: Both management and labor should help in the development of an
atmosphere of mutual cooperation, confidence and respect. Management should adopt
a progressive outlook and should recognize the rights of workers. Similarly, labor
unions should persuade their members to work for the common objectives of the
organization. Both the management and the unions should have faith in collective
bargaining and other peaceful methods of settling disputes.
• Workers‘ Participation in Management: The participation of workers in the
management of the industrial unit should be encouraged by making effective use of
works committees, joint consultation and other methods. This will improve
communication between managers and workers, increase productivity and lead to
greater effectiveness.
• Mutual Accommodation. The employers must recognize the right of collective
bargaining of the trade unions. In any organization, there must be a great emphasis on
mutual accommodation rather than conflict or uncompromising attitude. One must
clearly understand that conflicting attitude does not lead to amicable labor relations; it
may foster union militancy as the union reacts by engaging in pressure tactics. The
approach must be of mutual ―give and take rather than ―take or leave.‖ The
management should be willing to co-operate rather than blackmail the workers.
• Sincere Implementation of Agreements. The management should sincerely implement
the settlements reached with the trade unions. The agreements between the
management and the unions should be enforced both in letter and spirit. If the
agreements are not implemented then both the union and management stop trusting
each other. An environment of uncertainty is created. To avoid this, efforts should be
made at both ends to ensure the follow up of the agreements.
• Sound Personnel Policies: The following points should be noted regarding the
personnel policies. The policies should be:
o Formulated in consultation with the workers and their representatives if they are to be
implemented effectively.
o Clearly stated so that there is no confusion in the mind of anybody.
o Implementation of the policies should be uniform throughout the organization to
ensure fair treatment to each worker.

• Government‘s Role: The Government should play an active role for promoting
industrial peace. It should make law for the compulsory recognition of a representative
union in each industrial unit. It should intervene to settle disputes if the management
and the workers are unable to settle their disputes. This will restore industrial harmony.
• Progressive Outlook: There should be progressive outlook of the management of each
industrial enterprise. It should be conscious of its obligations and responsibilities to the
owners of the business, the employees, the consumers and the nation. The management
must recognize the rights of workers to organize unions to protect their economic and
social interests.

Ethics at work place

Ethics are most important in one's life, unethical, whether it is individual or corporation
is bad and are doing harm to the society. In corporate social responsibility reports,
every company have spell out its policy on ethics of company and follow code of
conduct to conduct business and ask the employees to follow ethics and code of
conduct to accomplish economic, social and environmental responsibilities of the
company to the society.
According to the study titled Nothing Ethical about Ethics encapsulates views of the
corporate workforce on workplace ethics across eight cities in India — New Delhi,
Mumbai, Bangalore, Chennai, Kolkata, Ahmedabad, Hyderabad and Pune.
Around 55.7 per cent of the workers had no qualms in fudging their cost details and
almost 61 per cent felt that it is fine to take printouts and photocopies in offices for
personal work, says a survey by Team Lease Services.
The fourth survey in the World of Work series tries to understand the changing scenario
at workplaces in India. It says any company trying to tackle productivity issues needs to
check internally. 55% of staff misuse company facilities. Around 63 per cent of the
respondents are fine with doing personal work during office hours, reveals World of
Work survey The study titled Nothing Ethical about Ethics encapsulates views of the
corporate workforce on workplace ethics across eight cities in India -New Delhi,
Mumbai, Bangalore, Chennai, Kolkata, Ahmedabad, Hyderabad and Pune.
Surabhi Mathur, general manager, permanent staffing, TeamLease Services, said, ―The
acceptable code of conduct in Corporate India is morphing from dogmatic thought
police, whose card-carrying members were the HR department, to a more fluid
situation that accepts diversity, relativity and materiality. Some people view this as a
devaluation, but companies are getting better at defining non-negotiable without
interfering in trivia.‖
Nearly 62 per cent of the respondents were willing to use any means to get competitor
information. The study further reveals that Kolkata reacted strongly to unethical office
behaviour, whereas the most lenient city was Ahmedabad.
While Mumbaikars would confront their co-workers directly for unethical behaviour,
Ahmedabad believed in the indirect route, according to the report. Hyderabad and
Kolkata insisted that leaders and managers should walk the talk on office ethics, with
Hyderabad stressing on the need for frequent training on ethics in offices and by
increasing open lines of communication.
75% respondents from Bangalore, Hyderabad and Pune conceded they lied to take
leave and did not considered it unethical. However 78% of the Kolkatta work force
differed on this. Taking credit for subordinate ideas is not unethical said Ahmedabad
and Bangalore, the other cities differ with an average score of 42 per cent. One third
respondents in Bangalore, Delhi and Hyderabad are unaware of their company‘s ethical
policy, while those in Mumbai and Chennai felt they were better information on this.
Mumbai, Bangalore and Chennai felt having open lines of communication would help
check it. Those in Delhi and Ahmedabad felt flexible work schedule will curtail it.
The study commissioned by Team Lease Services and conducted by global research
company Synovate in May and June, covered top 500 companies and had a sample size
of401.
IT majors Infosys, TCS and Wipro have emerged as the three most admired companies
in India, followed by Sunil Mittal-led telecom giant Bharti Airtel and another Tata
group company Tata Steel in the top five, according to a list prepared by the Wall Street
JournalAsia.
From the survey it is evident that the ethics in corporate sector are eroding. It is the
duty of individual employee and employer to enforce ethics for benefit of the company
and society. An ethical company will achieve its social economic and environmental
objectives towards society, it should feel it is its duty and responsibility to serve the
society. With out the help of employee this is not possible. Your ethical behaviour is
most important.
You are key person to make or unmake better society

The Role of Trade Union

Trade unions are unique organisations whose role is variously interpreted and
understood by different interest groups in the society. Traditionally trade unions role
has been to protect jobs and real earnings, secure better conditions of work and life and
fight against exploitation and arbitrariness to ensure fairness and equity in employment
contexts. In the wake of a long history of union movement and accumulated benefits
under collective agreements, a plethora of legislations and industrial jurisprudence,
growing literacy and awareness among the employees and the spread of a variety of
social institutions including consumer and public interest groups the protective role
must have undergone, a qualitative change. It can be said that the protective role of
trade unions remains in form, but varies in substance.
There is a considerable debate on the purposes and role of trade unions. The
predominant view, however, is that the concerns of trade unions extend beyond 'bread
and butter' issues. Trade unions through industrial action (such as protests and strikes)
and political action (influencing Government policy) establish minimum economic and
legal conditions and restrain abuse of labour wherever the labour is organised. Trade
unions are also seen as moral institutions, which will uplift the weak and downtrodden
and render them the place, the dignity and justice they deserve.

The State of Trade Unions in the World.

Public opinion is hostile to trade unions in most countries. The public is not against
unionism in principle. It is against the way unions and union leaders function. The
public image of union leaders is that they are autocratic, corrupt and indifferent to the
public interest 'Too much power, too little morality' sums up the publics' assessment of
unions
There have been many opinion surveys especially in the United States, which bring out
the poor public image of trade unions. In surveys which rank the confidence of the
American public in fourteen institutions (as for example the army, church, supreme
court, stock market, legal profession, industrialists, newspapers etc.) trade unions have
been consistently placed at the bottom of the list.
There is a serious decline in union membership in most industrialized nations. There
are two possible ways of looking at union membership figures. The first method is to
simply add up all union members in a factory, office or country. This gives overall
membership position. In the second method, the density of membership is calculated.
Density is the percentage of union members in relation to total employment, for
example, if unions have 50 members in a factory employing 100, the density is 50
percent. When the reference is to entire country, density is measured by comparing
union members against total employment in all sectors. Density is generally accepted as
a better indicator because it shows not only how many are members but also how many
are not.

Trade Unions in India

The trade union movement in India is over a century old. It is useful to take stock to see
whether the trade unions in India are at the centre stage or in periphery. In order to do
that, one may peruse the following relevant, though selective, statistics.
The Indian workforce 31.479 Crore (314.79 million) constitutes 37.3 percent of the total
population. Of the total workforce, 91.5 percent is accounted for by the informal sector,
while the formal sector accounts for 8.5 percent. Further, only abut 3 Crore (30 million)
(i.e. 9.5 percent of the workforce) are employed on permanent basis, implying 90.5
percent being employed on casual basis. It has also been reported that by December
1991, the claimed membership of the Indian trade union movement was 3.05 Crore (30.5
million) (i.e. 9.68 percent of the workforce) with 82.24 percent of the trade union
membership being accounted for by the organised sector. Thus the unorganised sector
is meagrely represented.
The World Labour Report summarises the trade union situation in India "Indian unions
are too very fragmented. In many work places several trade unions compete for the
loyalty of the same body of workers and their rivalry is usually bitter and sometimes
violent. It is difficult to say how many trade unions operate at the national level since
many are not affiliated to any all- India federation. The early splits in Indian trade
unionism tended to be on ideological grounds each linked to a particular political party.
Much of the recent fragmentation, however, has centered on personalities and
occasionally on caste or regional considerations.‖
Apart from the low membership coverage and fragmentation of the trade unions,
several studies point to a decline in membership, growing alienation between trade
unions and membership particularly due to changing characteristics of the new
workforce and waning influence of national federations over the enterprise unions.
New pattern of unionisation points to a shift from organising workers in a region or
industry to the emergence of independent unions at the enterprise level whose
obsession is with enterprise level concerns with no forum to link them with national
federations that could secure for them a voice at national policy making levels. Several
studies also point to a shift in employment from the organised to the unorganised sector
through subcontracting and emergence of a typical employment practice where those
work for the organisation do not have employment relationship, but a contractual
relationship.
Unfortunately trade unionism in India suffers from a variety of problems such as
politicisation of the unions, multiplicity of unions, inter-union rivalry, uneconomic size,
financial debility and dependence on outside leadership.

WORKERS‘ PARTICIPATION IN MANAGEMENT

Introduction:

Three groups of managerial decisions affect the workers of any industrial
establishment and hence the workers must have a say in it.
o Economic decisions – methods of manufacturing, automation, shutdown, lay-offs,
mergers.

o Personnel decisions – recruitment and selection, promotions, demotions, transfers,

grievance settlement, work distribution.

o Social decisions – hours of work, welfare measures, questions affecting work rules
and conduct of individual worker‘s safety, health, sanitation and noise control.

Participation basically means sharing the decision-making power with the lower ranks
of the organization in an appropriate manner.

Definitions:

The concept of WPM is a broad and complex one.

Depending on the socio-political environment and cultural conditions, the scope and
contents of participation change.
International Institute of Labour Studies: WPM is the participation resulting from the
practices which increase the scope for employees‘ share of influence in decision-making
at different tiers of organizational hierarch with concomitant assumption of
responsibility.

ILO: Workers‘ participation, may broadly be taken to cover all terms of association of
workers and their representatives with the decision-making process, ranging from
exchange of information, consultations, decisions and negotiations, to more
institutionalized forms such as the presence of workers‘ member on management or
supervisory boards or even management by workers themselves as practiced in
Yugoslavia.

Objectives:

According to Gosep, workers‘ participation may be viewed as:

o An instrument for increasing the efficiency of enterprises and establishing

harmonious relations;
o A device for developing social education for promoting solidarity among workers and
for tapping human talents;

o A means for achieving industrial peace and harmony which leads to higher
productivity and increased production;

o A humanitarian act, elevating the status of a worker in the society;

o An ideological way of developing self-management and promoting industrial

democracy.

Other objectives of WPM can be cited as:

o To improve the quality of working life (QWL) by allowing the workers greater
influence and involvement in work and satisfaction obtained from work; and

o To secure the mutual co-operation of employees and employers in achieving

industrial peace; greater efficiency and productivity in the interest of the enterprise, the
workers, the consumers and the nation.

The main implications of workers‘ participation in management as summarized by

ILO:

o Workers have ideas which can be useful;

o Workers may work more intelligently if they are informed about the reasons for and
the intention of decisions that are taken in a participative atmosphere.

Importance:

 Unique motivational power and a great psychological value.

Peace and harmony between workers and management.
Workers get to see how their actions would contribute to the overall growth of the
company.

They tend to view the decisions as `their own‘ and are more enthusiastic in their
implementation.

Participation makes them more responsible.

o They become more willing to take initiative and come out with cost-saving
suggestions and growth-oriented ideas.

Scope and ways of participation:

One view is that workers or the trade unions should, as equal partners, sit with the
management and make joint managerial decisions.

The other view is that workers should only be given an opportunity, through their
representatives, to influence managerial decisions at various levels.

In practice, the participation of workers can take place by one or all the methods listed
below:

o Board level participation

o Ownership participation
o Complete control
o Staff or work councils
o Joint councils and committees
o Collective Bargaining
o Job enlargement and enrichment
o Suggestion schemes
o Quality circles
o Empowered teams
o TQM
o Financial participation

Participation at the Board level:

This would be the highest form of industrial democracy.

The workers‘ representative on the Board can play a useful role in safeguarding the
interests of workers.
He or she can serve as a guide and a control element.
o He or she can prevail upon top management not to take measures that would be
unpopular with the employees.
o He or she can guide the Board members on matters of investment in employee benefit
schemes like housing, and so forth.
The Government of India took the initiative and appointed workers‘ representatives
on the Board of Hindustan Antibiotics (Pune), HMT (Bangalore), and even nationalized
banks.
 The Tatas, DCM, and a few others have adopted this practice.
Problems associated with this method:
o Focus of workers‘ representatives is different from the focus of the remaining
members of the Board.
o Communication and subsequently relations between the workers‘ representative and
the workers suffers after the former assumes directorship.
He or she tends to become alienated from the workers.
o As a result, he or she may be less effective with the other members of the Board in
dealing with employee matters.
o Because of the differences in the cultural and educational backgrounds, and
differences in behaviour and manners, such an employees‘ representative may feel
inferior to the other members, and he or she may feel suffocated. Hence, his or her role
as a director may not be satisfying for either the workers or the management.
o Such representatives of workers‘ on the Board, places them in a minority. And the
decisions of the Board are arrived at on the basis of the majority vote.

Participation through ownership:

This involves making the workers‘ shareholders of the company by inducing them to
buy equity shares.
o In many cases, advances and financial assistance in the form of easy repayment
options are extended to enable employees to buy equity shares.
Examples of this method are available in the manufacturing as well as the service
sector.
Advantage:
o Makes the workers committed to the job and to the organization.
Drawback:
o Effect on participation is limited because ownership and management are two
different things.

Participation through complete control:

Workers acquire complete control of the management through elected boards.
The system of self-management in Yugoslavia is based on this concept.
Self-management gives complete control to workers to manage directly all aspects of
industries through their representatives.
Advantages:
o Ensures identification of the workers with their organization.
o Industrial disputes disappear when workers develop loyalty to the organization.
o Trade unions welcome this type of participation.
Conclusion: Complete control by workers is not an answer to the problem of
participation because the workers do not evince interest in management decisions.

Participation through Staff and Works Councils:

Staff councils or works councils are bodies on which the representation is entirely of
the employees.
There may be one council for the entire organization or a hierarchy of councils.
The employees of the respective sections elect the members of the councils.
Such councils play a varied role.
o Their role ranges from seeking information on the management‘s intentions to a full
share in decision-making.
Such councils have not enjoyed too much of success because trade union leaders fear
the erosion of their power and prestige if such workers‘ bodies were to prevail.

Participation through Joint Councils and Committees:

 Joint councils are bodies comprising representatives of employers and employees.
o This method sees a very loose form of participation, as these councils are mostly
consultative bodies.
Work committees are a legal requirement in industrial establishments employing 100
or more workers.
o Such committees discuss a wide range of topics connected to labour welfare.
o Examples of such committees are welfare committee, safety committee, etc.
o Such committees have not proven to be too effective in promoting industrial
democracy, increasing productivity and reducing labour unrest.

Participation through Collective Bargaining:

Through the process of CB, management and workers may reach collective agreement
regarding rules for the formulation and termination of the contract of employment, as
well as conditions of service in an establishment.
Even though these agreements are not legally binding, they do have some force.
For CB to work, the workers‘ and the employers‘ representatives need to bargain in
the right spirit.
But in practice, while bargaining, each party tries to take advantage of the other.
This process of CB cannot be called WPM in its strongest sense as in reality; CB is
based on the crude concept of exercising power for the benefit of one party.
o WPM, on the other hand, brings both the parties together and develops appropriate
mutual understanding and brings about a mature responsible relationship.

Participation through Job Enlargement and Job Enrichment:

Excessive job specialization that is seen as a by-product of mass production in
industries, leads to boredom and associated problems in employees.
Two methods of job designing – job enlargement and job enrichment– are seen as
methods of addressing the problems.
o Job enlargement means expanding the job content – adding task elements
horizontally.
o Job enrichment means adding `motivators‘ to the job to make it more rewarding.
This is WPM in that it offers freedom and scope to the workers to use their judgment.
But this form of participation is very basic as it provides only limited freedom to a
worker concerning the method of performing his/her job.
The worker has no say in other vital issues of concern to him – issues such as job and
income security, welfare schemes and other policy decisions.

Participation through Suggestion Schemes:

 Employees‘ views are invited and reward is given for the best suggestion.
 With this scheme, the employees‘ interest in the problems of the organization is
aroused and maintained.
Progressive managements increasingly use the suggestion schemes.
Suggestions can come from various levels.
The ideas could range from changes in inspection procedures to design changes,
process simplification, paper-work reduction and the like.
o Out of various suggestions, those accepted could provide marginal to substantial
benefits to the company.
The rewards given to the employees are in line with the benefits derived from the
suggestions.
Participation through Quality Circles:
Concept originated in Japan in the early 1960s and has now spread all over the world.
A QC consists of seven to ten people from the same work area who meet regularly to
define, analyze, and solve quality and related problems in their area.
Training in problem-solving techniques is provided to the members.
QCs are said to provide quick, concrete, and impressive results when correctly
implemented.
Advantages:
o Employees become involved in decision-making, acquire communication and
analytical skills and improve efficiency of the work place.
o Organization gets to enjoy higher savings-to-cost ratios.
o Chances of QC members to get promotions are enhanced.
The Indian Scenario:
o Tried by BHEL, Mahindra and Mahindra, Godrej and Boyce among others.
o Experienced mixed results:
M&M (jeep division) with 76 QCs has experienced favourable results.
• Technical problems got solved.
• Workers got to get out of their daily routine and do something challenging.
Trade unions look at it as:
• A way of overburdening workers, and
• An attempt to undermine their role.
These circles require a lot of time and commitment on the part of members for regular
meetings, analysis, brainstorming, etc.
Most QCs have a definite life cycle – one to three years.
o Few circles survive beyond this limit either because they loose steam or they face
simple problems.
QCs can be an excellent bridge between participative and non-participative
approaches.
 For QCs to succeed in the long run, the management needs to show its commitment
by implementing some of the suggestions of the groups and providing feedback on the
disposition of all suggestions.

Empowered Teams:
 Empowerment occurs when authority and responsibility are passed on to the
employees who then experience a sense of ownership and control over their jobs.
Employees may feel more responsible, may take initiative in their work, may get more
work done, and may enjoy the work more.
For empowerment to occur, the following approach needs to be followed as compared
to the traditional approach:
Element Traditional Org. Empowered Teams
Organizational structure Layered, individual Flat, team
Job design Narrow, single task Whole process, multiple tasks
Management role Direct, control Coach, facilitate
Leadership Top-down Shared with the team
Information flow Controlled, limited Open, shared
Rewards Individual, seniority Team-based, skill-based
Job process Managers plan, control, improve Teams plan, control, improve

Features of empowered or self-directed teams:

o Empowered to share various management and leadership functions.
o Plan, control and improve their work.
o Often create their schedules and review their performance as a group.
o May prepare their own budgets and co-ordinate their work with other departments.
o Usually order materials, keep inventories and deal with suppliers.
o Frequently responsible for acquiring any new training they might need.
o May hire their own replacement to assume responsibility for the quality of their
products or services.
 Titan, Reliance, ABB, GE Plastics (India), Wipro Corporation and Wipro InfoTech are
empowering employees – both frontline as well as production staff, and are enjoying
positive results.

Total Quality Management:

TQM refers to the deep commitment, almost obsession, of an organization to quality.
Every step in company‘s processes is subjected to intense and regular scrutiny for
ways to improve it.
Some traditional beliefs are discarded.
o High quality costs more.
o Quality can be improved by inspection.
o Defects cannot be completely eliminated.
o Quality in the job of the QC personnel.
New principles of TQM are:
o Meet the customer‘s requirement on time, the first time, and 100% of the time.
o Strive to do error-free work.
o Manage by prevention, not correction.
o Measure the cost of quality.
TQM is called participative because it is a formal programme involving every
employee in the organization; making each one responsible for improving quality
everyday.

Financial Participation:
This method involves less consultations or even joint decisions.
Performance of the organization is linked to the performance of the employee.
The logic behind this is that if an employee has a financial stake in the organization,
he/she is likely to be more positively motivated and involved.
Some schemes of financial participation:
o Profit-linked pay
o Profit sharing and Employees‘ Stock Option schemes.
o Pension-fund participation.

Pre-requisites for successful participation:

 Management and operatives/employees should not work at cross-purposes i.e. they
must have clearly defined and complementary objectives.
Free flow of communication and information.
Participation of outside trade union leaders to be avoided.
Strong and effective trade unionism.
Workers‘ education and training. Trade unions and government needs to work in this
area.
Trust between both the parties.
Workers should be associated at all levels of decision-making.
Employees cannot spend all their time in participation to the exclusion of all other
work.

Limitations of participation:
Technology and organizations today are so complex that specialized work-roles are
required.
o This means employees will not be able to participate effectively in matters beyond
their particular environment.
 Everybody need not want participation.
The role of trade unions in promoting participative management has been far from
satisfactory.
 Employers are unwilling to share power with the workers‘ representatives.
 Managers consider participative management a fraud.

Evolution of participative management in India:

The beginning towards WPM was made with the Industrial Disputes Act, 1947, which
made Works Committees mandatory in industrial establishments employing 100 or
more workers.
The Industrial Policy Resolution adopted by the government in 1956 stated that there
should be some joint consultation to ensure industrial peace, and improve employer-
employee relations.
The functions of both these joint bodies were to be consultative and were not binding
on the management.
The response to these schemes was encouraging to begin with, but gradually waned.
o A study team was appointed in 1962 to report on the working of joint councils and
committees.
The team identified some reasons for their failure.
No concrete steps were taken to remove the difficulties, or change the pattern of
participative management.
During the emergency of 1975-77, the interest in these schemes was revived by the
then Prime Minister by including Workers‘ Participation in industry in the
government‘s 20-point programme.
o The government started persuading large enterprises to set up joint consultative
committees and councils at different levels.
The Janata Government who came to power in 1977 carried on this initiative.
In was again emphasized by the Congress government who came back n 1979.
This continued in a ―non-statutory vein‖ till the late 1980s, and the response from the
employers and employees stayed luke-warm.
o Then, the 42nd Amendment to the Constitution was made.
Now, Article 43-A reads: The State shall take steps, by suitable legislation, or in any
other way, to secure the participation of workers in the management of undertakings,
establishments or other organizations engaged in any industry.
Thus, participative management is a constitutional commitment in India.
o And then, on May 30,1990; the government introduced the Participation of Workers in
Management Bill in the Rajya Sabha.
The bill requires every industrial enterprise to constitute one or more `Shop-Floor
Councils‘ at the shop floor level, and`Establishment Council‘ at the establishment level.
These councils will have equal representation of employers and employees.
Shop-Floor councils enjoy powers over a wide range of functions from production,
wastage control to safety hazards.
The Establishment Council enjoys similar powers.
The bill provides for the constitution of a Board of Management of every corporate
body owning an industrial establishment.
The bill also provides for penalties on individuals who contravene any provision of
the bill.
In spite of all these efforts, only the government and the academicians have been
interested in participative management.
But participative management is staging a comeback.
o The compulsions of emerging competitive environment have made employee
involvement more relevant than ever before.
o Managers and the managed are forced to forget their known stands, break barriers,
and work in unison.

Managers and workers are partners in the progress of business.

COLLECTIVE BARGAINING

―Collective Bargaining is concerned with the relations between unions reporting

employees and employers (or their representatives). It involves the process of union
organization of employees, negotiations administration and interpretation of collective
agreements concerning wages, hours of work and other conditions of employees
arguing in concerted economic actions dispute settlement procedures‖.
____BEACH

―Collective Bargaining is a process in which the representatives of a labour organization

& the representatives of business organization meet and attempt to negotiate a contract
or agreement, which specifies the nature of employee-employer union relationship‖.

____ FLIPPO

―Collective Bargaining is a mode of fixing the terms of employment by means of

bargaining between organized body of employees and an employer or association of
employees acting usually through authorized agents. The essence of Collective
Bargaining is bargaining between interested parties and not from outside parties‖.

According to an ILO Manual in 1960, the Collective Bargaining has defined as:

―Negotiations about working conditions and terms of employment between an

employer, a group of employees or one or more employers organization on the other,
with a view to reaching an agreement.‖

It is also asserted that ―the terms of agreement serve as a code defining the right &
obligations of each party in their employment relations with one another, if fixes large
number of detailed conditions of employees and during its validity none of the matters
it deals with, internal circumstances give grounds for a dispute counseling and
individual workers‖.

Collective Bargaining involves:

• Negotiations
• Drafting
• Administration
• Interpretation of documents written by employers and the union representatives their
employees.
• Able management
• Organizational Trade Unions with open mind.

Guide for Trade Union Training

Issued by the International Confederation of Free Trade Union, Collective Bargaining is

―Workers‘ Bill of Right‖ which serves several objectives of the union, such as:
Union recognition as an authority
Raised standard of living of workers
Greater share for them in the Company‘s profit
Due respect to workers
Participation in decision influencing their working conditions
Establishment of practices to settle disputes arising in day-to-day situations
Workers‘ interest throughout the country
A technique for the accomplishment of the goals both of employees and employers as
well
They are the integral part of the society
It implies agreement between representatives of management and freely designated
representatives of employees relating to the solutions of Industrial problems with
minimum government dictates.
In fact it is an extension of the principles and practices of democracy to the industry
 Actually it is the beginning of Industrial Jurisprudence
Management to abide by certain rules rather than arbitrary decisions

According to John T Dunlop, Collective Bargaining is….

A system which establishes, services and administers many of rules which governs the
workers‘ place of work
A procedure which determines the quantum of compensation which employee should
receive and which influences the distribution of economic benefits.
A method of settling disputes during pendency of agreement and of determining,
after its expiry, whether a dispute should be re-opened or whether a strike or lock-out
should be resorted to or not.

Thus categories of Collective Bargaining are:-

Single employer bargaining,
a) one Company and
b) either one union or
c) more than one union
(Where there are several unions at different plants)

Multi-employer bargaining
a) Employer‘s federation
b) Workers of an industry representatives by the federation of all the trade unions
(At local, regional or industry level)

Collective Bargaining Vs Joint Consultation

• Collective Bargaining is to arrive at an agreement on wages and other conditions of

employment about which the parties start with divergent viewpoints but ultimately
attempts to make a comprise.
• Joint Consultation means joint councils relates to the sharing of information &
suggestion with regard to the issues of common interest including health, safety,
welfare and productive efficiency. This only includes recommendations the ultimate
decisions rests with the management.

Features of Collective Bargaining

• It is a collective process: The representative of both the management & the employees
participate in it.
• It is a continuous process: It establishes regular & stable relationship between the
parties involved.
• It involves not only the negotiation of the contract, but also the administration or
application of the contract also.
• It means that bargaining is a day-to-day process
• Summer Sticher has rightly observed:
―It would be mistake as to assume that Collective Bargaining begins and ends with the
writing of the contract. Actually, that is only the beginning of the Collective Bargaining‖
• It is a flexible and dynamic process: The parties have to adopt a flexible attitude
throughout the process of bargaining
• It is a method of partnership of workers in management. It is in fact a way to establish
industrial democracy.
• It is based on give and take approach and take or leave approach.
• It is an attempt in achieving and maintaining discipline in industry
• It is an effective step in promoting industrial jurisprudence.

Subject matter of Collective Bargaining:

• Employment
• Relationship between the workers and the management.
• Recognition of union
• Wages and allowances, hours of work
• Leave and festival holidays
• Bonus & profit sharing schemes
• Seniority and rationalism
• Fixation of work loads
• Standard of labour force
• Programs of planning and development, influencing workforce
• Issue related to retrenchment and lay offs
• Victimization of trade union activities
• PF, gratuity and other retirement benefit schemes
• Incentive schemes
• Housing & transport facilities
• Issues related to discipline and stop rules
• Grievance proceedings
• Working conditions
• Issues related to safety and accident prevention, occupational diseases and protective
clothing.
• Employment benefits such as canteens, medical & health services and crèches
• Administration of welfare funds
• Cooperative thrift and credit societies
• Educational recreational and training schemes

The Indian Institute of Personnel Management suggested the following subject matter
of Collective Bargaining.
• Purpose of agreement, its scope, and the definition of important terms
• Rights and responsibilities of the management and of the trade union
• Wages, bonus, production norms, leave, retirement benefits and terms & conditions of
service
• Grievance redressal procedure
• Methods and machinery for settlement
• Termination clause.

Signification of Collective Bargaining

• Negotiations
• Administration
• Enforcement of the written contract between employees and the employer
• Process of reserving labour-management conflicts
• It is legally and socially sanctioned way of regulating in the public interest the forces
of power and influence inherent in organized labour management groups
• Labour legislation and machinery for settlement of disputes
• To promote cooperation and mutual understanding
• To provide strikes and lock-outs
• Bipartite / tripartite machinery
• An important solution to the problem of IRs
• Importance to employees
• Importance to employers
• Importance to Society
• Functions of Collective Bargaining

Social change
Peace Treaty or Industrial peace -- Temporary Treaty
Industrial Democracy
# With Combative aspects
#Without Combative aspects

Long run Social Change

Industrial Jurisprudence(To follow laws/Rules)

Procedure of Negotiation and Collective Bargaining

• Discussion between Management/workers/Trade Unions
• Counter-proposals followed by arguments come up.
• To iron-up differences in the beginning
• Frank discussions, mutual benefits and attempts to appreciate the other parties
approach/point of view for fruitful negotiations.
• No legal compulsion on either side to negotiate of a dispute.
• If both the parties are mutually prepared results can be achieved.
• When issue is raised by the union, the Industrial Relations Manager to initiate
preliminary work and have initial discussions and inform the results to top
management.
• Thus minor issues are defused and settled peacefully.
• A team of senior managers to involve from the management side for discussions in
matter.
• An IRM is to act as a liaison with the union members and as a bridge.

The Indian Institute of Personnel Management has suggested following procedure for
negotiation and Collective Bargaining between Management and Union.

1. Composition of Negotiating Team:

• Representatives of both workers and the employees
• Adequate qualify job knowledge and skills for negotiations.
• To have full authority to speak and make decisions.
• Correct understanding of the main issue and intimate knowledge of operations,
working conditions, production norms, etc.
• Basic qualities of balanced views even temper, analytical mind, objective look out.
• Inclusion of functional heads will be more beneficial.

2. Make a good beginning ―Well begun is half done‖ is true in the Collective Bargaining
• Steps for mutual cooperation
• Members in the right frame of mind.
• Proper climate for mutual understanding and a common desire to reach an
agreement.
• True spirit of give and take
• Maximum chances of success.

3. Maintain continuity of Talks

• With good will and understanding
• Occasions for emotional outbursts and roadblocks likely
• Never to reach the dead end
• Side track blind alleys and keep talks continuing
• Even under the worst situations breaking off temporarily for scrolling down and
rethinking may be necessary.
• When the main issue get confused the dust and storm raised, bringing things to
fundamentals will then help.
• Better to leave controversial issues for the time being and leap over to the next issue.
• As the field of agreement is widened and the field of disagreement is narrowed down,
small gaps can be bridged over more easily later.
• As long as talks continue, a solution will be possible.
• To keep the discussion fluid is therefore very important.

4. Develop a problem-solving attitude

• Appreciation on both the sides
• Better understanding
• Better performance and increased prosperity for future
• Proper discussion, analyses can fluid a solution with open mind.

5. Encourage leadership
• Possibilities of solution of both sides are argued.
• Right of association and fight for justice and a fair deal.
• United and homogeneous climate on both sides ―Management gets the union it
deserves‖
• Principle of justice, sympathy and firness
• Growth of healthy and strong trade unionism. Thus development of the right type of
leadership is only a matter of time.

6. Bring in the other managers

• Contribution and involvement of other managers
• Collective agreement covers not just one part, but the entire field of industrial activity.
• Lack of understanding and proper communication often create problems and
difficulties
• Discipline for management and productivity/job security for workers is important.
• These are the basic difference and conflict never gets resolved.
• At times conflict grows more serious and a situation becomes explosives, threatening
discipline peace and production gets disturbed.
• Thus maintaining normal conditions and preserving in spirit of agreement in such a
situation presents a tough challenge to the skill & ability of the management.

7. Contract Administration
• Once a contract is agreed upon it must be diminished
• Contract to specify the procedure for handling disagreement over the interpretation
of different clause of the agreement.
• Almost all Collective Bargaining agreements contain formal procedure to be used in
resolving difference over the interpretation and application of the agreement.
Essentials of Successful Collective Bargaining – ―Process‖
• It is an institutionalized representative process
• It is a graceful retreat and to compromise
• It involves:-
a) Psychology
b) Politics
c) Poker (Interference in a negative way)
• It is a tough-minded economic calculus and horse-trading
• Bargaining sessions almost are unavoidably contain certain stress and strains
• Labour-management tensions are recurrent in nature, since contacts are regularly re-
negotiated.
• Following conditions must be fulfilled to make Collective Bargaining successful.
a) Strong and stable union
b) Recognition of trade union
c) Permanent bargaining machinery
d) Mutual accommodation
e) Political climate
f) Bargainers authority

Note-worth trends on Collective Bargaining

• Collective Bargaining was initially coined by Sydney & Beatrice Webb in 1897
• Trade unionism came into existence during early 20th Century in England
• In USA, Collective Bargaining is an important element
• It became national bargaining between two world wars
• In India, it is not very popular in the private sector but is very popular in public sector
• Bipartite agreements in banks is very common practice
• Trade unions put forward their demands with counter demands from the
management.
• Coercive tactics from both sides
• Industry-wise bipartite committees formation
• Workers participation in management
• Collective Bargaining at various levels is feasible and effective.

Obstacles to Collective Bargaining in India

Progress of the Collective Bargaining process is not very encouraging in India. Most of
the unions and management lay emphasis on adjudication rather sorting out issues
themselves. Several factors are responsible for this:
• Multiple unions
• Non-recognition
• Political orientation
• Defective laws
• Mediation by political leaders

Suggestions for effective Collective Bargaining

• To create conditions for strong, stable representative by union
• Recognition by the law of the trade unions
• Political leadership to be replaced by internal workers leadership
• No political interference
• Both management and unions should adopt peaceful means of settling disputes
• Adjudication to be resorted to as last resort, when all other remedies have failed.

Dynamics of Industrial Relations

Industrial Conflicts

IRs are invariably a combination of cooperation, collaboration and conflict between

labour and management though industrial peace and harmony may be sought as an
organizational objective, same conflict is inherent in the industrial structure and in fact,
the conflict is an epidemic to the industrial society. Conflict of interests of management
and labour is the progeny of the capitalist form of economic organization. It is not only
the sharing of the fruits of industry that generate conflicts, the very factor of the
existence of the wide cleft of authority between the
―Hands that Produce‖
And
―Hands that Control‖
The means of production has become a major issue and source of conflict between
management and labour.
• Traditionally, conflict in organizations has been viewed very negatively
• The classical writers believe that conflict is inherently bad and so it must be curbed.
• Conflict indicates malfunctioning within the organization and it represents
management failure to bind the workers and the organization together.
• Conflict is not only a positive force in a modern group but is also necessary for a
group to perform effectively.
• It is inappropriate to say that conflict is all good or bad.
• It depends whether the conflict is functional or dysfunctional (destructive) and thus
hinders the performance of the organization.

Positive Aspects of Conflicts

• It provides stability to the group concerned
• Workers, who do not normally accept decisions of the union leaders and management
shows greater homogeneity during the strike period
• Conflicts brings issues in open and thus are easy to solve.
• When the conflicts become open, it gets into public lime-light and gets public opinion
and support
• During conflicts, group gain power which is identified to solve the problem.

Industrial Peace
• Cordial labour – Management relations
• Ideal situation for industrial growth
• Constant vigilance is required
• Is just opposite to industrial unrest

Preconditions for Industrial Peace

• Strong trade unions with democratic norms
• Employers to have a progressive outlook
• Both workers and management should have faith in Collective Bargaining & other
peaceful means of settling disputes.
• Workers participation in management should encouraged
• There should be open two-way communication between the parties to the IRs

Measures of Industrial Peace

• Liberal and fair management policy regarding wages and other benefits
• Satisfactory working conditions
• Mutually acceptable personnel policies in respect of employees, promotion,
disciplinary action and dismissal
• Social security and labour welfare measures to provide for the legitimate needs of
workers and their families.
• Better employer-employee communication greater and more effective attention to
employee‘s problem, complaints and grievances and effective grievance handling
machinery.
• Effective measures and techniques for preservation and improvement of employees
morale and motivation
• Healthy supervision, fair treatment and demonstrably impartial treatment of workers
• Evolution of a strong, representative and responsible trade union
• Effective and mutually satisfactory measures for attaining participation of workers in
the management of industrial enterprises.
• Collective Bargaining and establishment of mutually acceptable agreements defining
policies, responsibilities and procedures for implementation of decisions.

Introduction To Industrial Relations

Industrial relations has become one of the most delicate and complex problems of
modern industrial society. Industrial progress is impossible without cooperation of
labors and harmonious relationships. Therefore, it is in the interest of all to create and
maintain good relations between employees (labor) and employers (management).

Concept of Industrial Relations:

The term ‗Industrial Relations‘ comprises of two terms: ‗Industry‘ and ‗Relations‘.
―Industry‖ refers to ―any productive activity in which an individual (or a group of
individuals) is (are) engaged‖. By ―relations‖ we mean ―the relationships that exist
within the industry between the employer and his workmen.‖
The term industrial relations explains the relationship between employees and
management which stem directly or indirectly from union-employer relationship.

Industrial relations are the relationships between employees and employers within the
organizational settings. The field of industrial relations looks at the relationship
between management and workers, particularly groups of workers represented by a
union. Industrial relations are basically the interactions between employers, employees
and the government, and the institutions and associations through which such
interactions are mediated.

The term industrial relations has a broad as well as a narrow outlook. Originally,
industrial relations was broadly defined to include the relationships and interactions
between employers and employees. From this perspective, industrial relations covers all
aspects of the employment relationship, including human resource management,
employee relations, and union-management (or labor) relations. Now its meaning has
become more specific and restricted. Accordingly, industrial relations pertains to the
study and practice of collective bargaining, trade unionism, and labor-management
relations, while human resource management is a separate, largely distinct field that
deals with nonunion employment relationships and the personnel practices and policies
of employers.

The relationships which arise at and out of the workplace generally include the
relationships between individual workers, the relationships between workers and their
employer, the relationships between employers, the relationships employers and
workers have with the organizations formed to promote their respective interests, and
the relations between those organizations, at all levels industrial relations also includes
the processes through which these relationships are expressed (such as, collective
bargaining, workers‘ participation in decision-making, and grievance and dispute
settlement), and the management of conflict between employers, workers and trade
unions, when it arises.

Industrial Relations
Industrial relations is used to denote the collective relationships between management
and the workers. Traditionally, the term industrial relations is used to cover such
aspects of industrial life as trade unionism, collective bargaining, workers‘ participation
in management, discipline and grievance handling, industrial disputes and
interpretation of labor laws and rules and code of conduct.

In the words of Lester, "Industrial relations involve attempts at arriving at solutions

between the conflicting objectives and values; between the profit motive and social
gain; between discipline and freedom, between authority and industrial democracy;
between bargaining and co-operation; and between conflicting interests of the
individual, the group and the community‖.

The National Commission on Labor (NCL) also emphasize on the same concept.
According to NCL, industrial relations affect not merely the interests of the two
participants- labor and management, but also the economic and social goals to which
the State addresses itself. To regulate these relations in socially desirable channels is a
function, which the State is in the best position to perform.
In fact, industrial relation encompasses all such factors that influence behavior of people
at work. A few such important factors are below:

Institution: It includes government, employers, trade unions, union federations or

associations, government bodies, labor courts, tribunals and other organizations which
have direct or indirect impact on the industrial relations systems.

Characters: It aims to study the role of workers unions and employers‘ federations
officials, shop stewards, industrial relations officers/ manager, mediator/conciliators /
arbitrator, judges of labor court, tribunal etc.

Methods: Methods focus on collective bargaining, workers‘ participation in the

industrial relations schemes, discipline procedure, grievance redressal machinery,
dispute settlements machinery working of closed shops, union reorganization,
organizations of protests through methods like revisions of existing rules, regulations,
policies, procedures, hearing of labor courts, tribunals etc.

Contents: It includes matter pertaining to employment conditions like pay, hours of

works, leave with wages, health, and safety disciplinary actions, lay-off, dismissals
retirements etc., laws relating to such activities, regulations governing labor welfare,
social security, industrial relations, issues concerning with workers‘ participation in
management, collective bargaining, etc.