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CHAPTER 2

IN D U S T R IA L R E L A T IO N S : A N O V E R V IE W
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INTRODUCTION
In the pre-industrial society, agriculture was the main source of income and wealth
involving basic skills passed on from one generation to the other. Economic power in
those days was judged by those who had control over land and labourers working on the
farms with crude methods and equipments. The classical economist identified three
important factors of production land, capital and labour.

The first great transformation which came in the society was because of industrial
revolution which came in the eighteenth century in Great Britain (U.K.) followed by a
transformation in U.S.A., France, Germany, Belgium and Sweden. This transformation
which led to industrialization brought about drastic changes in the methods of production
and labour management relations in the factory. The owners of factory were the people
who provided machinery tools other means of production and the premises. The other
side was the supply of labour by the workers. It was here that two distinct classes were
created the capitalist class and the working class. The working class was unskilled,
uneducated and unorganized, and the capitalist were more powerful, organized and were
in a position to exploit the working class. In the initial stages of industrialization the
working class was the most suffered class who did not have freedom to express their
views who worked in poor working conditions.

The position of the working class changed in the post industrial period. The demand of
physical labour had gone down with the use of machinery and modem methods of
production workers. Though capital was the most important factor of production workers
were also treated as an important factor of production and one could not think of industry
without human resource. Human resource became the most precious wealth of each
nation.

In the words of Fredric Harbison “Human beings are the active agents who accumulate
capital, exploit natural resources, build social, economic and political organizations and
carry forward national development”. Therefore the welfare of the work force and happy
industrial relations are fundamental perquisites for shifting economic paradigm towards
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greater prosperity. Industrial revolution made a transformation in the Indian society also.
It transformed the society from agriculture to industry and then emerged the problems of
labour. After independence the Government of India made a series of legislation to
protect the working class from exploitation and for improving the working and the living
conditions. In order to bring greater equity and harmony in industrial relations the
government played an active role by enacting various labour protective laws. The laws
made the labour depend upon the government and the government gained political
leverage.

E V O L U T I O N O F INDUSTRIAL R E L A T I O N S
Evolution is a gradual change process which takes place in parts or stages or passes from
one stage to another. The evolution of industrial relations has also taken place in various
stages and when it passes from one stage to the other there is a possibility of either
increase in complications or complexity or change in the laws and legislations. The
problem of industrial relations did not take place in the initial stages when the
organisations were small but took place when organisations started growing and when it
passed from one stage to another stage. As the evolution took place organisational
structures became elaborate and complicated specially in the nineteenth century when
gigantic industrial empires and capitalist class came into existence followed by the
technology of mass scale production and the era of specialization and division of labour.
Technology, mass scale production and division of labour demanded for a specialized
class of labour in large numbers who were more skilled, more educated and more
organized which gave rise to an increase in complications in an industrial organisation.

In order to understand the issues and problems associated with industrial relations it is
desirable to study the various phases of evolution as it progressed from one stage to
another. The various important stages are:

PRIMITIVE STAGE:
This was the stage of hunting and fishing with a very few necessities of life and very
simple living. In this stage the members of the family or a group lived together and
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worked together with no speciaHzation in their work except for the difference in physical
strength which divided the male and female. This was the stage where people did some
activities of hunting and fishing for their own consumption and nothing was done in
excess of their consumption. No activity was done for storing or for exchange. There was
no accumulation of wealth or exchange of products.

This was the stage where the authority and decision making power was with the elder of
the family. Authority came with age and experience or may be linked with physical;
strength. This was the stage where the members of the family or members of the group
had to accept whatever has been decided and act accordingly. The group being small and
being together had a personal and one to one communication system. It was in this stage
where the group would settle where there was source of water and food and they would
migrate from one place to another in search of food, water and acceptable climatic
conditions. The group also migrated in search of safety for themselves and their animals
which they depended on for milk and meat.

AGRARIAN STAGE:
This was the stage when the primitive people started to know something about farming
and agriculture. It was in this stage where farming and agriculture started supplementing
their old occupation of hunting and fishing. In this stage people got stablised in one
particular place where there was water and fertile land. This stage was responsible in
creating two different classes of people, one who owned the land and the other who
worked on land in farming and agriculture. Those who had land had it because of might
or by over powering the other. Those who were the owners of land were called the
Masters and those who worked for the Masters were workers but they were treated as
slaves. The employer employee relationship was that of master slave type and this
servant/slave had to do all types of work and jobs told by his master. The slave in
exchange got no money but just some food to keep himself alive. In this stage there was
no legal protection to the employees and so the employees were weak, unskilled and
unorganized. The masters were more organized and protected due to less government
intervention or no intervention. The employees had no freedom or autonomy they had no
 26

right to express their views and opinions and communication was just one sided that is
from the master to employee / servant / slave, top to down. Communication was only
orders and instructions. No special art was required to manage these servants what was
required was just power and power to keep the servants suppressed. Towards the end of
the agrarian economy stage a separate class of princes and landlords came into existence
and to serve these lords the serfs came into existence which was just like that of the
slaves. These serfs had to work hard for their landlords and were very unfortunate and
worked hard all their lives. The landlords who were the masters were power centered and
were assumed to be bom superiors.

HANDICRAFT STAGE:
This stage came into existence because of the growth in towns and cities and because of
the increase in the volume of trade and business. This stage also came into existence
because of the decline in the power of feudal lords and landlords. The art, innovation and
skill of the workers increased and transformation took place in the position and status of
the workers. The workers due to their art and skill started to own the factors of
production. There was a big change in the careers of these workers. These workers started
to work on their own with their small means of factors of production, with their own
skills, with the members of their family and within their homes. These people started
producing something on a small scale and whatever they produced they sold their product
directly to the customers without the help of any middleman. It was in this stage
specialization came into existence. Separate craftsman with specialized skills were there
for specialized work. In this stage different craftsman came into existence for different
types of work like blacksmith, pottery, leather work, shoe making, goldsmith, cloth
weaving and carpentary.

The older generation which was having the art and skill started teaching the younger
generation the skill they had. Those with skill became masters or employers and those
who came to learn the skill and started contributing to the production were the employees
or servants. The masters provided the employees with food and shelter. The master
craftsman would transform the apprentice into a better skilled craftsman and make him
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independent. The master craftsman in this stage held a very high status and respect
because he had the ownership of factors of production and also the fine skills of that
respective craft. It was in this stage the workers gained mobility and respect due to their
skills and specialization. They became more respected and superior compared to the
slaves in the stages before this.

COTTAGE INDUSTRY STAGE:

This stage was responsible for the creation of a new class called crafts guilds. The master
craftsman were responsible in regulating economic and employment conditions. They
could decide the price, the quality, the methods of production and the type of craftsman.
It was in this stage that the crafts guilds or crafts union started thinking of various
benefits to its members like unemployment benefits or benefits in case of death or
disability. Workmen started becoming more and more organized and united. Slowly the
economic system started developing. Production activity started increasing in houses of
the master craftsman or in small workshops. The workers were paid on a piece rate
system of wages. Goods were sold in the local areas or local markets or supplied to those
who financed the raw material to the master craftsman. It was in this stage that the basic
technological developments started taking place. Size of trade started increasing markets
started growing and the need for capital was felt by those in the production process or by
the master craftsman. Traders started traveling from one place to another.

FACTORY STAGE:
As the time passed the scale of production increased and the master craftsman as well as
the owners of factors of production started to know the use of power and machines. The
production activity shifted fi-om houses and cottages to a large production shed were a
large number of people started to work under one roof These production sheds were
called as factories, it made use of power tools machines and power driven machines.
More employment was offered to workers in factories or workshops and the cottage
workers became factory workers or factory hands. With large number of people working
under one roof supervision became essential and the workers were closely supervised.
The late eighteenth and the early nineteenth century made inventions in the methods of
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production and in the power driven machines. With more and more machines coming in
the use of production and factories marked the rise of “Industrial Revolution”.

Under the factory system men, women and child labour were employed for long hours in
poor working conditions. With more production profits increased and with profits
technology started improving. More use of machines came into force and the employer
employee relations became more impersonal and neglected. Under the factory system
more and more workers started working under one roof and the employers had to
maintain strict discipline and the workers depended totally on the employers who were
the oMTiers of factors of production. The level of wages was decide by the demand and
supply of labour and the employer would pay the wages and did not care about his
working or living conditions. There was no human element in the employer employee
relationship. The employer was more interested in profits and the employee worked to
satisfy his economic needs like food shelter and clothing.
So these were the stages in the evolution of industrial relations throughout the world.
India is in no way different from the other parts of the world. What we see from these
stages is that the employer employee relationship has a long history and so it is with
industrial relations.

THEORIES OF INDUSTRIAL RELATIONS

There are various theories developed by different thinkers or philosophers from time to
time or as per the situation in their country or related to the current trend throughout the
world. The theories related to industrial relations may be applicable in one particular
situation or at one particular time and may not be applicable another time or in another
situation. Though there are various theories they have provided an integrated view with
regards to industrial relations, I shall take here a few theories related to the research
work.

JEROMEJOSEPH’
SPOLITICAL VsAPOLITICAL THEORIES:
The political theories of industrial relations are concerned with macro social questions
such as the political purpose of society. Issues such as the class characteristics of the
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State, conflict between the classes, the exploitative element of economic and industrial
structures and systems. Private Vs State ownership, the role and voice of the working
classes and the need for change of political power.

The protection and promotion of the rights and interests of the working classes and their
organisations by using varied measures available to the working classes. The apolitical
theories of industrial relations are concerned with :

Micro organisational questions at the strategic, fiinctional and operational levels of the
firm or industry.
Procedural issues such as evolving laws and rules to regulate working class organisations
and action at strategic functional and operational levels of the firm or industry substantive
issues such as competitive advantage market - orientation productivity and technological
dynamism take precedence over concerns related to collective organisation and action or
larger political economic purposes.

MILLER AND FORM’S MODEL:

Miller and Form provided an overview of industrial relations structures. According to
them the organisations with labour and management built in their interaction form a
complex substructure of both formal and informal systems. Formal industrial relations are
performed through the collective committees. Moreover, there are several parts of the
management and union structures which are also involved largely in bargaining. Lastly
there is latent and informal structure of sub legal activities which prevails in the power
structures of management and labour. The whole organisational complex has been
visualized as a cultural pattern of collective bargaining which incorporates
comprehensive range of activities embracing informal collective action, grievance
bargaining and contract bargaining. They recognize that although the day to day
industrial relations in most establishments do not strictly comply with contract rules, they
represent a shifting mixture of conflict, co-operative and accommodative behaviour on
the part of the union and management representatives.
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DUNLOP’S THEORY:
DUNLOP JOHN T, a Harvard Professor explains his theory of industrial relations as a
system consisting of workers and their organisations, managers and their organisations
and government and their agencies. Every industrial relations system creates a complex
of several rules operating within the work environment to govern it. These rules may take
numerous forms in different systems such as agreements, statutes, orders, awards,
decrees, regulations, policies, practices and customs. These rules and regulations defines
the status of the actors and govern the conduct of all the actors in the work environment
perpetually. Dunlop further says that there is an impact of technology, market and
budgetary constraints on rules of the work environment. He further states how these rules
are different in various other countries and specific for that particular country, at the same
time how these rules are similar among different countries. He also attempts to study
industrial relations system in the process of change as well as during the process of
economic development. Dunlop points out that some rules are directly concerned with the
technology and market context of the system while others are related more uniquely to
power status of the actors in the society in general. The context of an industrial relation
system is also significant from the stand point of the internal organisation of hierarchies
of workers, managers and specialized governmental agencies. Different types of
technologies and markets or budgets developed by industrial society have an impact on
formal organisations. Similarly the status of the actor tends to influence the forms and the
fiinctions of the specific hierarchies. However the formation of the rules by the actors at
the level of a plant say in steel industry is determined by the rules formed by national
actors in this same sector.
APPRAOCHES TO INDUSTRML RELATIONS
The study of industrial relations have been studied by different people and therefore it has
been perceived differently. The study of industrial relations can be viewed from various
angles which may range from economic, social, political and managerial. With these
different angles of study the subject has got more depth with more view points making
the study more complex and dynamic. 1 have selected a few approaches for the study of
my thesis which are as follows;
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SOCIOLOGICAL APPROACH
An industry is a part of the social system made up of various groups of people and
individuals with different personalities, education, family background, customs,
emotions, value systems, norms, attitudes, caste and religions working in one
organisation. The difference in individuals and groups attitudes and behaviour creates
problems, conflicts, comparison and competition amongst the members of the industrial
society. Sociological approach gives importance to the social aspects of problems. The
general understanding of the problems of industrial relations is always linked with wages,
working conditions, bonus, overtime or labour welfare facilities but this approach
considers social problems as more important. According to this approach the relation
between workers and management is dominated by social factors. The attitude and
perception of labour and management is controlled by the sociological factors. This is a
correct thinking because many social evils like stress, strain, health problems, drinking,
gambling, prostitution, drug abuse and family disintegration do influence workers
efficiency, productivity attitude and perception which is the negative consequence of
industrialization and migratory character of labour. Due to industrialization a set of new
industrial and social patterns emerges and thereby new relationships, institutions, patterns
of behaviour and techniques of handling people in the industry develops. In studying and
understanding industrial relations or studying and understanding the behavioural pattern
of labour and management the role of social change cannot be ignored. The social change
that has taken place has made the workers more urban in their taste and thinking than his
predecessor. He is no longer unskilled or ignored by the society, he is more secured when
he enters the industrial organisation. From social point of view in the process of change,
industrial relations are becoming more and more complex and will further complicate
with the passage of time and so to deal with it, a proper analysis is required at micro and
macro level.

HUMAN RELATIONS APPROACH:

According to this approach the human relations is the most critical and delicate aspect of
management compared to the other fields of management like finance, material or
production because this aspect of management deals with human beings and human
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beings have their own perceptions, beliefs, attitudes, personality and emotions. These
features govern the behaviour of the individuals and groups and it further gets
complicated when they interact with other individuals or groups both at individual or
group level.

To manage this human resource the leaders adopt different styles either autocratic or
democratic. The effectiveness of a particular style depends upon the situations, no style
of managing people is good or bad it depends upon the people their attitudes and the
given situation. The effectiveness of a leader also depends upon how he manages the
human relations and how the needs of the people are satisfied for maintaining good
human relations. There are some basic needs of human beings like the physiological
needs, safety and security needs, social needs, self esteem needs and the need for self
actualization. Once a particular need is satisfied the workers will aim at satisfying the
next need and till that need is not satisfied industrial relations will be complex and so it is
necessary for the management to design a suitable motivational strategy to provide an
environment for their optimum need satisfaction, required for maintaining good human
relations in the organisation.

As every organisation has its problems and limitations. Employees also have their own
preconceived notions, needs, problems etc., so no specific diagnosis can be made for
maintaining good industrial relations in the industry. The progress of industrial relations
and the future of it will depend upon how far industry is willing to go in for establishing a
community of mutual responsibility between the managers and workers. If the managers
and workers understand and apply the techniques of human relations to industrial
relations the managers would develop a greater insight and effectiveness in his work and
the workers would achieve greater job satisfaction and develop greater involvement in
their work.

SOCIO - ETHICAL APPROACH:

This approach though not much accepted has been widely discussed academically with
regards to industrial relations. According to this approach industrial relations besides
having a sociological base does have some ethical ramifications. Good industrial relations
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can be only maintained when both the labour and management realise their moral
responsibility through mutual co-operation and greater understanding of each other’s
problems. In India a tripartite study group at the behest of the National Commission on
Labour studied the sociological aspect of labour management relations. This group
observed that the labour management relations exists within the social economic and
political structures of society. The study group observed that the goal of labour
management relations may be stated as maximum productivity leading to rapid economic
development, better understanding among the employers, workers and government,
commitment to industry and to the industrial way of life on the part of labour as well as
management, sound unionism, proper machinery for handling industrial disputes and
willingness among parties to cooperate as partners in the industrial system.

The other important observations of the study group are:

1. An important aspect of labour relations in the industry is the extent to which labour
and management accept the way of life and value system of modern technology. The
director of industrial relations should develop for his company a code of ethics and a
management philosophy for industrial relations.
2. A better appreciation of management problems by labour through programmes of
communication and education be developed in the industry.
3. The Study Group is of the opinion that workers and employers who belong to the
same cultural area, state or region have a greater mutual understanding but modem
management recruitment techniques can remove the narrow cultural difference
between labour and management.
4. The works committee designed to promote harmonious relations between employers
and workers have not played any usefiil role.
5. Though the joint management council or the system of joint consultation has been
developed its functions often overlap with those of the committees on production,
safety and welfare. Participative management have had little success wherever they
have been formed.
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6. The Study Group is of the opinion that the implementation of workers participation in
management is with full of doubts and danger. The management and workers should
feel the need for workers participation in management and should take this in the
right spirit and with mutual interest. Workers participation in management should be
more positive and constructive in nature. The study group also suggests that the
government should limit its intervention in labour management negotiations.

7. The Study Group suggests that “there is a need for framing uniform statutory standing
orders for all central government undertakings and emphasis on the need for
minimum government intervention in industrial relations.
So this approach puts social and ethical pressure on labour and management in resolving
the problems of industrial relations.

GIRI APPROACH:
V.V. Giri, in his approach to industrial relations has given importance to collective
bargaining and mutual negotiations between employers and employees for the settlement
of disputes. His emphasis is on the voluntary efforts of the management and the trade
unions for the settlement of disputes and differences through voluntary arbitration rather
than through arbitration. According to V.V.Giri every organisation should settle their
differences without outside interference and industrial peace should be secured through
the machinery of collective bargaining. According to V.V. Giri compulsory arbitration
takes the parties to the courts and that not only proves to be costly but also not wholly
satisfactory. The trade unions according to V.V. Giri should become strong and self
reliant and learn to negotiate without compulsory arbitration and outside interference.
The unions should get what they wanted through their own strength, own resources and
proper negotiations. According to this approach achieving goals by the workers or the
trade unions without compulsory arbitration means learning the art and techniques of
collective bargaining and thereby achieving greater self respect along with industrial
peace. In simple words it means maintenance of good industrial relations through
peaceflil settlement of disputes.
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GANDHIAN APPROACH:
Gandhiji’s approach to industrial relations is based on these fundamental principles of
truth, non-violence and non-possession. Based on these fundamental principles evolved
the concept of non-cooperation and trusteeship on which his philosophy of industrial
relations rests. Gandhiji’s philosophy presumes the peaceful co-existance of capital and
labour which calls for the resolution of conflict by non-violent, non cooperation that is
peaceful strike. Gandhiji further states that workers have the right to strike but this right
has to be exercised in a just cause and that too in a peaceflil and non violent manner and
it should be resorted to only after the employers have failed to respond to the moral
appeals of the employees. Gandhiji’s principle of trusteeship does not recognize the right
to property except to the extent permitted by the society for its own welfare, the
individual does not have any right to hold or use wealth for his interest but for the interest
of the society. The character of production is to be determined by social necessity rather
than by personal whims or greed. The capitalist is to act as a trustee of the community
and hold the industiy as a trustee and assume the workers as a co-trustee of the society.
The trusteeship theory of Gandhiji gives no room for conflict because the wealth legally
belongs to the owners morally it belongs to the society and so there should be no conflict
of interests. Gandhiji was also of the opinion that without the co-operation of the workers
the capitalist cannot work and this should be known by everyone the capitalist and the
employees. Exploitation by capitalist should be taken care through non co-operation and
non violence. For resolving the disputes the following rules should be observed according
to Gandhiji.
1. The workers should make their reasonable demands through collective action.
2. Strikes by the trade unions must be peaceful and non violent.
3. Where essential services are concerned workers should avoid strikes as far as possible.
4. The workers should avoid the formation of unions in philanthropic organisations.
5. Strike should be used as a last resort when other measures have failed.
6. Workers should go for voluntary arbitration for settlement of disputes. India’s
industrial relations system has been highly influenced by the Gandhian approach this
approach emphasis on peaceful settlement of industrial disputes and expects to resolve
their disputes peacefully through mutual negotiations. This approach also emphasis on
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direct action like strike but only after exhausting the available means for resolving
disputes. It is this approach which has been widely accepted in the Indian industries and
by many trade unions. This approach seems to be more realistic and more practical.

UNITARY APPROACH:
Under the unitary approach industrial relations is regarded as a process of mutual
cooperation, individual treatment, team work and shared goals. According to this
approach work place conflict is seen as a temporary aberration resulting from poor
management. It gives importance to common goals and interest. The important
assumption in this approach is that everyone is benfited when the focus is on common
interest and for the promotion of harmony and peace within the organisation. Conflict in
the form of strike is not only regarded as unnecessary but destructive. This can change
the work culture into more positive, productive and peacefiil. It will lead to tair treatment,
mutual trust, transparency and open communication. The environment of the workplace
will become more pleasant. This approach seeks direct negotiations with its employees
and the role of government trade unions and tribunals are restricted.

Though this approach is a very positive one for good industrial relations it has been
criticized for seducing the employees away from unions and has also been criticized as
manipulative and exploitative.

PLURALISTIC APPROACH:
The pluralistic approach is totally opposite to the unitary approach. This approach
assumes that the organisation is made up of different interests and it is the management
who plays an important role to mediate among different interest groups. It also assumes
that the trade unions as legitimate representative of employees interests. The most
important assumptions is that “Stability of industrial relations as the product of
concessions and compromises between management and unions. It is very natural that the
managements authority is not easily accepted or automatically accepted and so conflict
between management and workers is bound to be there and is inevitable but at the same
time it is conducive for innovation and growth. Employees join unions to protect their
 37

interest and influence decisions made by the management. This approach says that the
unions balance the power between management and employees. According to this
approach a strong union is not only desirable but necessary. Similarly the society’s
interests are protected by state intervention through legislations and industrial tribunals.

This approach was developed in mid sixties and early seventies and further developed by
British scholars Flanders and Fox. According to this approach industrial conflict is
inevitable and it needs to be contained within the social mechanism of collective
bargaining, conciliation and arbitration.

F E A T U R E S O F INDIAN INDUSTRIAL R E L A T I O N S S Y S T E M
Industrial relations by itself is a very dynamic subject. It has been realized that the
industrial relation system has brought about a large number of changes and thereby it has
always created complex situations for the organisations or the management or the
employees or the union. There are certain basic features of the Indian industrial relations
systems which are different from those in the other developed and developing countries.
The special features of the industrial relations systems are:

1. The society, the system in general assumes that the unions are there only to play a
negative role. The employers as well as the management assumes that the unions only
play a militant role and they are basically created to fight for the members and create
trouble for the employers. In other words workers union is a hurdle in the progress of the
organisation.

2. The second important feature of the Indian industrial relations system is that the
management does not like the basic existence of the trade unions because they assume
that the constructive and progressive decisions of the management are made ineffective
by the unions or timely implementation cannot be done because of the unions. Many
times it is assumed that the welfare of the workers do not take place because of the
Unions, which is true to some extent when they go on strikes or use go slow techniques.
 38

3. Another important feature of the Indian industrial relations system is that when one
union becomes very strong the management tries to create another union and when there
are multiple unions in the industry no one union can function to their full potential and
they become ineffective. More than one union means less fiinds, less bargaining power,
comparatively less members and infighting on the rise. Multiple trade unions means
small size unions, poorly organized and above all Indian trade union has a very peculiar
problem and that is of outside union leaders who do not understand the real or practical
problems of their workers or members of the union, more than the interest of their
members or industry they have their ovwi political interest.

4. Opposite to weak and unorganized employees is organised and highly united

employers. In India the employers are highly organized and are capable of influencing the
country’s wages, welfare and labour policies. The employers in India can take advantage
of their weak unions and inter union rivalry for their own benefit. The peculiar feature of
the Indian employers is that they are more authoritarian’s which blocks the path of
communication between the employers and the employees or trade unions which help in
aggravating the problems which otherwise could be sorted out through dialogue.

5. Another important feature of our industrial relations system is that Indian industrial
relations are highly dynamic, they have changed from time to time and will further
undergo a change. One good example is that when industrialization took place many
changes were seen like replacement of human labour performing heavy task by machine
labour, improvement in the working conditions, mass scale production, division of work,
specialization, reduction in the skills of the workers and increase in the mobility of the
workers. Another important feature was seen when India adopted liberalized economic
policy, where India saw large scale production, economies of scale, downsizing,
automation, rationalization, cost cutting policies, maintenance of quality standards, super
.specialization, co-operation in management and unions, VRS and CRS. Industrial
conflicts and the militant approach of the Unions have also undergone a change. A major
change has been seen in the employer employee relationship.
 39

6. Another important feature of the Indian industrial relations system is that the
involvement of the government central and state who influence the industrial relations
system. Tripartite consultation, is an important feature of India’s industrial relations
system. The Indian Labour Conference (ILC) and the Standing Labour Committee (SLC)
are the two main forums of Tripartite consultation. The main objectives of Tripartite
consulation are as follows:
i) To promote uniformity in labour legislation.
ii) To lay down the procedure for settlement of industrial disputes
iii) To consider matters of importance to both the management and labour. The
government state or centre plays an important role in the dispute resolution machinery
for achieving industrial peace as a third side along with the management and labour.
The government is instrumental in forming the legal system and has rendered useful
service in declaring the awards and judicial prouncements. The government is also
instrumental in setting various norms or standard guidelines on several critical issues
of dispute between management and labour. The World Labour Report 1997 - 98 has
observed that there is dominance of regulation by legislation in the Indian industrial
relations system.
iv) To conclude, the industrial relations system over a period of time has become more
and more complicated than what it was in earlier times. The modem industrial society
is getting more and more complex and the problems are ever changing with time. The
most important feature of the employer - employee relationship is that it is highly
dynamic and with technological developments it will continue to change in the fiiture.
In years to come the industrial relations system will see management and employees
come to terms under economic reforms and dynamic changes in the organisational
environment. They will jointly share the responsibility of organisations survival and
progress. The industrial relations system will undergo a transformation to cope up
with the challenges of high tech industries, growing competition and globaHzation.

O B J E C T I V E S O F INDUSTRIAL R E L A T I O N S
The term industrial relations means the relationships between management and labour or
employer and employees. The two main participants in the industrial relations are labour
 40

and management who are required to work in a spirit of co-operation and adjustment
which is in their own mutual interest. Good industrial relations implies peaceful,
harmonious and fruitftil relationship between labour and management. In such a situation
both labour and management should realize their mutual obligations towards each other
resort to actions that promote harmony and better understanding between them. Industrial
Relations constitute one of the most delicate and complex problems of industrial society.
The maintenance of relations between the workers and the management is the very basis
on which the development of Industrial Democracy depends. The study of industrial
relations has become an important aspect of the science of management specially one that
deals with manpower.

THE IMPORTANT OBJECTIVES OF INDUSTMAL RELATIONS

1. The prime objective of industrial relations is to promote healthy labour managemer
relationships. Healthy labour management relations is very much instrumental in
improving the economic conditions of the organisation as well as the labour. When
relations between labour and management is healthy both the parties can concentrate
on more and better constructive work and create an atmosphere where there is
sufficient scope for organisational growth and development. Sound industrial
relations means more productivity, better quality, less wasteage and more profits.
When organisation earns profits there is always good returns to the employees and
more money is invested back into business. The ploughing back of profits enhances
the fiarther earning capacity of business and thereby both the employer as well as the
employee benefit in the long run.

2. The next important objective of industrial relations is to have strong well organized
trade unions or association of employees. A union which understands its duties and
responsibilities. A union which can educate its member employees on matters of
importance and linked with industrial relations. The objective here should be to
generate a greater sense of job security amongst its employee. Employees with job
security do have a greater sense of belonging and a greater degree of involvement.
The objective of industrial relations should be to convert this involvement into
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employees participation in decision making and give them the opportunity to

contribute something towards the organisation so they will feel as a part of the
organisation. The objective of industrial relations is to create a platform for
employers and employees to come together and enter into negotiations and
discussions relating to employment aspects.

3. The next important objective of industrial relations should be to promote collective

bargaining technique for compromising on conflicting interests. It is called collective
because the employees as a group select their representatives to meet and discuss
differences with the management. Collective bargaining which takes place between
individual worker and management. Collective bargaining plays a significant role in
improving labour management relations and achieving industrial peace. The objective
of industrial relations should be to have more discussions and joint sessions of the
representatives of labour and management for the better labour and management for
the better understanding of each others problems as well as point of view. Through
discussions and interaction both parties will start knowing more about each other and
thereby various misunderstandings will be removed.

4. Another important objective of Industrial Relations is to achieve Industrial

Democracy. Industrial democracy can be achieved through various ways and means
like workers participation in management, co-partnership and joint management
councils. Workers should be encouraged to give suggestions and actively take part in
managerial decision making. This act shall open new channels of communication and
Industrial Democracy will be achieved in true sense. Workers participation in
management and joint management councils should not only be the means for profit
sharing but also to increase productivity and accept additional responsibilities.
Industrial democracy should not only give the workers the freedom of expression but
it should bring in productive and constructive, creative ideas for organisational
growth and development. Industrial Democracy should create a strong sense of
belonging and affiliation of workers towards the organisations.
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5. The fifth important objective of Industrial relations is to bring down the rate of
strikes, lockouts and gheraos as far as possible and to avoid conflicts. The
responsibility of the organisation should be to provide good working conditions,
proper wages and fringe benefits to the workers. When workers are treated like
human beings and not as a commodity they feel organisation as a more comfortable
place to work by which labour absenteeism reduces with less or no conflicts, less
lockouts and less absenteeism, man hours are not lost, industrial productivity
increases and this industrial progress becomes responsible for the progress of the
nation.

6. The last important objective of industrial relations from India’s point of view I feel,
that our country being a developing country with a vast population, large
unemployment and a major problem of illiteracy the responsibility is to educate the
employees in various aspects related to employment, productivity, technology
environment and culture because education will transform them to be better citizens
first and a good human being which means a good employee. When organisations
have good employees all other goals and objectives can easily be achieved. Education
has a lot of capacity to bring in a transformation amongst the employees.

T H E E M E R G I N G ISSUE F O R INDIAN I N DUSTRIAL R E L A T I O N S

The emerging issue for Indian industrial relations is the issue none other than the issue of
economic liberalization since 1991 which gave the direction of market economy and
globalisation. Liberalisation made business and industry free from various controls. The
result of economic reform was competition aiming at quality, control of prices and cost of
production. The survival of Indian industry depended upon the ability to compete with
firms within the country and the companies abroad. In the process the industries in India
aimed at improving their competitive ability.
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In this emerging scenario there is a need for labour management co-operation through
consultation rather than collective bargaining. The trade unions are expected to play a
constmctive role by co-operating with the management as the survival of the industry
under the competitive global environment was top of the list. Participative management
became more important under liberalized economy as employees could contribute their
innovative and creative abilities to the organisations health. Quality development,
upgradation and maintenance became the area of prime importance to match the latest
technology. The strategy of continuous development as followed by the other nations
demanded qualitative human resource in Indian industry. Demand for skilled, qualified
and competitive work force gained more ground. Liberalisation results in higher wages
and salaries for highly skilled and talented employees. Demand for highly committed
personnel is on the rise and continuous development is a must. Unskilled and lack of
commitment personnel will have very little to contribute in the era of liberalization.

The emerging issue is also of technological inputs on the rise. Technology has both
positive and negative effect on employment. In area of information technology it has
generated employment opportunities and in the manufacturing sector the effect is
negative. Manpower input for per unit of output has reduced. Though technology gives
more jobs the problem is of existing employees who are displaced by technology. Unions
face the problems of early retirement schemes voluntary retirement schemes (VRS) or
compulsory retirement schemes (CRS) as corporates will hire the best talent from
anywhere in the world. Out sourcing and sub contracting will be on the rise. On the
whole there will be a reduction in the workforce with solid increase in organisational
productivity.

INDUSTRIAL RELATIONS IN INDIA IN THE EMERGING SCENERIO

Indian industry at present is facing various challenges brought by new economic policy
as well as the challenges of globalisation. There has been a situation of crises which
demands the need of a good industrial relations system. A system which would remove
the drawbacks of the old or traditional industrial relations system and give a new
direction to the Indian economy. The new industrial relation system must make a constant
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effort to developing healthy relations between management and employees. The main
aim of the industrial relations system under the emerging challenges should be to
promote quality, productivity and its competitive ability. To face the challenges in the
emerging scenario the industrial relations system should be strongly supported by
a) Employers
b) Trade Unions
c) Government.

The employees should support the unions to face the challenges posed by globalization
and by the liberalization of the economy. The employers should make unions their
partners in developing healthy industrial relations. The employers should make
themselves responsible for promoting collective bargaining and joint consultation.

The trade unions will also have the responsibility to face the emerging challenges to
protect the interest of the employees in the process of restructuring of the economy.
Trade unions will now have to work with a broader vision and not only confined their
role to industrial disputes and tribunals but keeping in mind the interest of the
organisation the employees and the society at large. Unions will have to cooperate with
the management in the larger interest of the industry. The unions are expected to play a
very constructive role in the existing environment specially with regards to productivity,
technological changes and upgradation of qualification of the workers. Making
adjustment to the fast changing environment will be the new feature of the trade unions in
the emerging scenario. They will have to change their interest focus from labour to
community and nation at large.

To face the challenges in the emerging scenario the government support is important and
crucial for dynamic industrial relations. The government is expected to play a proactive
role for creating a healthy atmosphere for healthy industrial relations. Government should
reduce their intervention where industrial and trade disputes are concerned and support
more of bilateral negotiations rather than depending upon the acts and the legislations. If
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possible the government should make both the management and the unions understand
the importance of mutual settlement than the third party intervention Government should
on its own reduce its intervention and give a procedure for solving industrial disputes
which involves less time, less complicated and one which protects the interest of both the
parties. Government should promote consultation rather than confrontation.