Professional Documents
Culture Documents
&
LABOR LAWS
BY: Prof. V.P.KAKKAR
MODULE - I
DEFINING IR
• Industrial relations encompasses a set of
phenomena, both inside and outside the
workplace, concerned with determining
and regulating employment relationship
• Relationship between management and
employees or among employees and their
organization that characterize and grow
out of employment.
Chapter 1
Theories and Concepts Used to Analyse Industrial Relations
© These lecture slides are copyright to Eruditions Publishing and may not be used or reproduced without written permission of the publisher, except in those
institutions and courses where Petzall, Abbott, Timo, Australian Industrial Relations in Asian Context 2E is a prescribed student textbook.
Approaches Used to Define Industrial Relations (2)
Ddefinitions that seek to include all matters contained in the first three
definitions within other terms:
Conflict
Paternalism Revolution
Approaches to industrial relations
• Pluralism is belief in the existence of more than one ruling principle, giving
rise to a conflict of interests.
• The pluralist approach to IR accepts conflict between management and
workers as inevitable but containable through various institutional
arrangements ( like collective bargaining, conciliation and arbitration etc)
and is in fact considered essential for innovation and growth.
• It perceives organizations as coalitions of competing interests , where the
management’s role is to mediate among the different interest groups.
• It perceives trade unions as legitimate representative of employee interests
• It also perceives stability in IR as the product of concessions and
compromises between management and unions.
• Employees join unions to protect their interests and influence decision
making by the management. Unions thus balance the power between
management and employees. In pluralistic approach a strong unions is not
only desirable but necessary
MARXIST APPROACH
• Marxists like pluralists also regard conflict as inevitable but see it as a
product of capitalistic society where as pluralist believe that the conflict is
inevitable in all organizations
• For Marxists IR has wider meaning. For them conflict arises not because of
rift between management and workers but because of the division in the
society between those who own resources and those who have only labor to
offer.
• Marxist approach thus focuses on the type of society in which an
organization functions.
• Industrial conflict is thus equated with political and social unrest
• Trade Unions are seen both as labor reaction to exploitation by capitalists,
as-well-as a weapon to bring about a revolutionary social change. Wage
related disputes as secondary
• For them all strikes are political and they regard state intervention ( via
legislations and creation of Industrial Tribunals ) as supporting
management’s interests, rather than ensuring a balance between the
competing groups.
Systems approach
• IR - a social sub-system within the econ. & political
systems
• Components
– actors
– contexts (influences & constraints on decisions & action
e.g. market, technology, demography, industrial structure)
– ideology - beliefs affecting actor views - shared or in
conflict
– rules - regulatory elements i.e. the terms & nature of the
employment relationship developed by IR processes
OTHER APPROACHES OF INDUSTRIAL
RELATIONS
( DIFFERENT SCHOOLS OF THOUGHT )
PSYCHOLOGICAL APPROACH
• Differences in the perceptions of labor and management wrt factors influencing their
relations i.e. wages. Benefits, services and working conditions etc
• Dissatisfaction compels workers to turn aggressive and resort to strike, lockouts and
gherao etc.
SOCIOLOGICAL APPROACH
• Sociological factors such as value system, customs and traditions etyc affect the relations
between labor and management
GIRI APPROACH
• Collective bargaining and joint negotiations be used to settle disputes between labor and
management. Outside interference to be avoided.
GANDHIAN APPROACH
• worker's right to strike but cautioned that this right be exercised in just cause and in a
peaceful and non-violent manner for minimum wages etc like ‘satyagrah’- Non violent non-
cooperation
ROLES OF WORKERS,
MANAGEMENT & GOVERNMENT
PARTIES TO IR
EMPLOYEES EMPLOYERS
COURTS
GOVERNMENT &
TRIBUNALS
ROLE OF WORKERS
WORKERS and their ORGANIZATIONS( Trade Unions or Associations )
• Trade Union Act provides Status and Authority for the power vested in them
• This power is used for negotiating Wage Interests, better benefits and
service conditions, concessions, more amenities and welfare schemes
• It does it through :
- Statutes and legislations,
- The judiciary- labor courts industrial tribunals
- An executive machinery- that lays down rules, procedures and
gives awards and monitors them
Employment Relations
Dunlop’s model
FACTORS AFFECTING EMPLOYEE RELATIONS
INTERNAL FACTORS:
• Attitudes of management to employees and unions
• Effective and agreed procedures for discussing and resolving grievances or handling disputes within the company
• Effectiveness and capability of managers and supervisors in resolving grievances and handling disputes.
;
FACTORS AFFECTING EMPLOYEE RELATIONS
• EXTERNAL FACTORS:
TRADE UNIONS
&
INDUSTRIAL DISPUTES
What is a Trade Union?
• Definition: An organization of workers or
employees formed mainly to
_ Negotiate with the employers on various
employment related issues
– Improve the terms and conditions at their workplace
– Enhance their status in society
• In most countries, there are laws governing the
formation, membership and administration of
trade unions.
ORIGIN & GROWTH OF TRADE UNION
MOVEMENT
• Industrialization brought about new economic and social order in societies.
TU emerged as a result of industrialization in new social order
• First workers’ union in India under the leadership of Mr Lokhande was
developed in 1890
• Beginning of labor movement in the modern sense started after the outbreak
of World War I
• Economic. Political and social conditions influenced the growth of trade union
movement in India.
• Establishment of ILO helped the formation of TUs in the country
• In 1920 AITUC( All India Trade Union Congress) was formed- the 1st All India
trade union
• World War II brought splits in AITUC. Efforts of Indian National Congress
resulted in the formation of INTUC( Indian National Trade Union Congress)
• Socialists separated from AITUC formed HMS( Hind Mazdoor Sabha) in
1948
• Some other unions were also formed. They were BMS ( Bhartiya Majdoor
Sangh) in1955, HMP( Hind Majdoor Panchayat) in 1965, CITU( Centre of
Indian Trade Union ) in 1970
PRINCIPLE OF TRADE UNION
1. UNITY: Unity is strength
SOCIAL: Initiating & developing workers’ education system, organizing welfare &
recreational facilities, providing monitory and other help during period of strike
and economic distress, running cooperative welfare schemes and societies,
hosing needs/ community development, organizing cultural functions & social
welfare programmes
• Internally democratic
• Have a strong leadership
• Exhibit a responsibility towards their worker
members
• Committed to promote industrial peace and harmony
• Inclined towards collective bargaining that is
collaborative and not competitrive
• Possess financial security
• Adaptable to change
Industrial Dispute and individual
dispute
• Industrial dispute means any dispute or
difference between employers and employers, or
between employers and workmen or between
workmen and workmen, which is connected with
employment or non-employment or the terms of
employment .The dispute has to be between
plurality of workman and employer
• Individual workman cannot raise an industrial
dispute
Individual dispute deemed as
industrial dispute
• 1965 amendment to I.D ACT and insertion of 2A.
• Where any employer discharges, dismisses,
retrenches or otherwise terminates the services
of an individual workman, any dispute or
difference between that workman and his
employer…….shall be deemed to be an
industrial dispute notwithstanding that no other
workman nor any union of workmen is a party to
the dispute.
• This definition is not applicable to disputes short
of termination
FORMS OF UNREST/DISPUTES
STRIKES: A strike is spontaneous and concerted refusal of work and withdrawal
of labor from production temporarily. It is a collective stoppage of work for
pressurizing their employers to accept certain demands.
TYPES OF STRIKES:
EMPLOYER’S ASSOCIATION:
• Employers may form their unions to collectively oppose the working class and put
pressure on trade unions
LOCKOUT:
• It is the counterpart of strike.
• An employer may close down the place of employment temporarily. It is very
powerful weapon available with employer to pressurize workers till they agree to
resume work on the conditions laid down by employer.
• If it is impossible to meet the demands of workers, employers may decide o go
for lock-out
• An employer may also pull down the shutters so as to bring psychological
pressure on the workers to agree to his conditions or face the closure of unit
TERMINATION:
• Employer may resort to suspension or disciplinary action leading to termination of
workers on strike. The list of employees so suspended or dismissed may be
circulated to the other employer so as to restrict their chances of getting
employment with other employers.
CHANGING ROLE / PUBLIC PERCEPTION
TRADE UNIONS
• Change in the attitude of unions towards management, Industry,
Govt. and economy
• Unions becoming increasingly matured, responsive and realistic
Gone are the days of frequent strikes, bandhs, gheraoes and
violence
• Unions are reconciled to economic reforms. The accent is on
opposing the adverse impact of reforms and not the reforms
• Discussion among trade union circles is now on issues like
productivity, TQM, Technology, competition, MNCs, exports etc..
• Unions aware of the Right Sizing and feel the need for suplus labor
fat to be shed
• Days when unions were affiliated with political parties are gone by.
Today thrust is on de- politicization of unions
• Experience of politically free unions is pleasant, reinforcing the
belief that farther the unions are from politics, more advantageous it
is for them
• Workers association in our country is highly fragmented and the consequence is
multiplicity of unions, which weakens the bargaining strength of employees.
• One of the defects of trade union movement in India has been the phenomenon
of outside leadership. The fault of outside leadership lies with trade Union Act,
1926 itself. The act permitted outside participation to the extent of 50% of the
strength of office bearers in a union.
• Trade Unions are at cross roads. Their membership is declining, Their political
support is waning, public sympathy is receding, their relevance itself is at stake
• Managements on the other hand are on the offensive. They are able to force
unions to accept terms and conditions. Workers,officers and managers are
mercilessly terminated in the name of restructuring, downsizing etc
• Professionalisation of trade unions movement is another trend witnessed, they
are trying to upgrade their leadership quality. Topics lie IT, strategic planning,
diversity, networking and productivity etc now form inputs in training programmes
organized for union leaders
TRADE UNIONISM IN INDIA TODAY
• Unionization according to industry/region/state
• 70,000 registered trade unions , many not regisered
• 9 central unions, all affiliated to political parties
• 2 % of the union force unionized
• PSUs: Industrial level collective bargaining in coal/steel,
enterprize level elsewhere
• Private sector: Plant level collective bargaining
• Union density according to the size of of industry
• Craft unions in Govt transport sector
• Unionization in India under recession
• Twin battle against Inter Union Competition and assertive
management
MAJOR PROBLEMS FACED BY BTRADE
UNIONS IN INDIA
• Outside or political leadership
• Multiplicity of trade unions
• Small size of unions
• Low membership
• Uneven growth
• Poor financial position
• Low level of knowledge of labor legislation
• Fear of victimization
FUTURE ROLE OF TRADE UNIONS
IN INDIA
TRADE UNION ACT (1926)
• It legalizes the formation of trade unions by allowing employees the right to form
and organize unions and also strengthen bargaining power of workers
• Act aims to provide law for the registration of trade unions and get it registered
under the act
• Permits any seven persons to form a union
OBJECTIVES
• Lay down conditions governing the registration of trade unions
• Defines obligations of trade unions
• Prescribe rights and liabilities of a registered trade union
STATUS OF A REGISTERED UNION
• It becomes a body corporate
• It gets a common seal
• It can buy and hold movable and immovable property
• It can enter into contracts with others
• It can sue and be sued in its name
TRADE UNION ACT (1926)
REGISTRATION:
A trade union formed with at least 7 members may apply for registration with following
documents
• A copy of the rules of trade union
• Name, occupation and addresses of members
• Name of trade union and address of its office
• Office Bearers of the trade unions
• In case already in operation- submit statement of accounts/assets and liability statement
OBLIGATIONS:
It should have a name, clearly laid down objective, membership list readily available,
purpose for which funds shall be utilized, members to be the actually working persons ,
Honorary/temporary office bearers, conditions for benefits/fines, conditions under which
rules shall be amended, manner in which office bearers shall be appointed, safe custody
of funds and manner in which trade union shall be dissolved
S. 2-A, 33-A
Publication of award
Collective Bargaining –
If successful – settlement
Sec. 18(1) of ID Act
Publication of awards
• Publication is must
• Time duration of 30 days is directory
• Award comes in to operation 30 days after
publication
• Tribunal to recall the award
Conditions for Successful
Bargaining
1. Freedom of association
– Workers and employers are free to form their own
associations to represent their interests.
1. Stability of union
– Unions have to be stable for collective bargaining to
be effective union is able to honor the agreement.
1. Recognition of union by employer
– Collective bargaining begins after employer
recognizes the union that claims to represent the
specific group of workers.
Conditions for Successful
Bargaining
4. Good faith
– Both parties must be willing to resolve differences
to reach an agreement.
5. Mutual respect
– Relationship affected and process becomes tense
and difficult if any party used unfair practices such
as victimization.
6. Supportive legal system
– Employment laws to ensure process takes place in
an orderly manner.
Negotiations
• Process depends on these factors:
1. Subject matter to be discussed
2. Persons involved
3. Circumstances under which the discussion is held.
• A Typical Negotiation Process begins with each
party stating its position.
• As discussion progresses, each party adjusts its
demands to seek a mutually acceptable
agreement.
Steps in Negotiation
1. Preparation
– Each party must know what it wants.
1. Presentation
– Each party presents its case.
1. Exchange and compromise
– Parties look for possible adjustment or compromise.
1. Reaching an agreement
– Parties sign a written statement on what have been
agreed.
Ways to Settle Disputes
• Impasse: settlement cannot be
reached
• Impasses may be solved by these
alternatives:
– Conciliation
– Mediation
– Arbitration
Ways to Settle Disputes
• Conciliation
– Impartial third party helps the two parties to
reach a mutually acceptable settlement.
– Conciliator meets parties separately or
together to exchange information, clarify
issues and settle misunderstanding.
– Conciliator does not impose a solution but
works with the parties to enable them to
come to an agreement.
Ways to Settle Disputes
• Arbitration
– Third party settles the dispute by making an
independent decision for the two parties.
– Some prefer arbitration as the responsibility
“for reaching agreement” is made by a
neutral party (quite often, appointed by the
government e.g. Arbitration Court).
– Arbitration gives some people the impression
that they did not give in to the other party but
“fought all the way” to the Arbitration Court.
Ways to Settle Disputes
• Mediation
– Impartial third party helps to reach a
mutually acceptable agreement.
– Mediator makes recommendations for
the two parties to consider.
– Final agreement is made by the two
parties themselves.