Professional Documents
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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:
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.
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:
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.
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
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.
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.
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 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
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.
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
• 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:
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.
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.
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 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.
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.
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
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.
• 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
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).
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
Broadly defined, there are two approaches to discipline employees. They are:
• Positive Discipline Approach
• Progressive Discipline Approach
Code Of Discipline In Industry
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.
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
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
Grievance Procedure
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.
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 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.
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.
* Factories act1948
* Mines act 1952
* Dock workers act(Safety, Health & Welfare)1986
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.
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.
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 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.
• 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
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.
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 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
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.
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
• 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 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
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 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:
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:
o A means for achieving industrial peace and harmony which leads to higher
productivity and increased production;
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 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:
They tend to view the decisions as `their own‘ and are more enthusiastic in their
implementation.
o They become more willing to take initiative and come out with cost-saving
suggestions and growth-oriented ideas.
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:
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
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.
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.
COLLECTIVE BARGAINING
____ FLIPPO
According to an ILO Manual in 1960, the Collective Bargaining has defined as:
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‖.
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.
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)
• 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.
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.
Social change
Peace Treaty or Industrial peace -- Temporary Treaty
Industrial Democracy
# With Combative aspects
#Without Combative aspects
The Indian Institute of Personnel Management has suggested following procedure for
negotiation and Collective Bargaining between Management and Union.
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.
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.
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
Industrial Conflicts
Industrial Peace
• Cordial labour – Management relations
• Ideal situation for industrial growth
• Constant vigilance is required
• Is just opposite to industrial unrest
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).
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.
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:
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.