Concept of Industrial Relations

The term ‘Industrial Relations’ comprises of two terms: ‘Industry’ and ‘Relations’. “Industry”
refers to “any productive activity in which an individual (or a group of individuals) is (are)
engaged”. By “relations” we mean “the relationships that exist within the industry between the
employer and his workmen.” The term industrial relations explains the relationship between
employees and management which stems 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 main aspects of industrial relations can be identified as
follows:
1. Promotion and development of healthy labour — management
relations.

2. Maintenance of industrial peace and avoidance of industrial strife.

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3. Development and growth of industrial democracy.

Thus, the objectives of IR are designed to:

1. Establish and foster sound relationship between workers and
management by safeguarding their interests.

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2. Avoid industrial conflicts and strikes by developing mutuality

among the interests of concerned parties.
3. Keep, as far as possible, strikes, lockouts and gheraos at bay by
enhancing the economic status of workers.

4. Provide an opportunity to the workers to participate in management

and decision making process.

5. Raise productivity in the organisation to curb the employee

turnover and absenteeism.

6. Avoid unnecessary interference of the government, as far as

possible and practicable, in the matters of relationship between
workers and management.

7. Establish and nurse industrial democracy based on labour

partnership in the sharing of profits and of managerial decisions.

8. Socialise industrial activity by involving the government

participation as an employer.

According to Krikaldy, industrial relations in a country are influenced,

to a large extent, by the form of the political government it has.
Therefore, the objectives of industrial relations are likely to change
with change in the political government across the countries.
The Functions of Industrial Relations

There are four main functions which industrial relations play and which can be used by managers to
ensure that relationships with employees are positive.

The Function of Open Communication

Communication is important to any relationship, including a business relationship. Employees will

typically spend a very large chunk of their days at work and so it is important that they feel perfectly
comfortable with their manager and satisfied with the kind of work that they do.
The ABC rule really helps here. ABS stands for Always Be Communication and it is an important rule
of thumb to remember when relating with employees. A manager should inform their team that the
work of the manager is to make work a little easier for the employee and help them with whatever
they need. They should also seek to be clear about what they need from employees.

One way that you can stay on top of things with your team is to conduct surveys on a weekly basis
where your employees can give you feedback with the benefit of anonymity. It helps to maintain the
flow of communication and it engages your employees in an environment that is both safe and
anonymous for them.

The Function of Recognition

Sometimes something as simple as saying some kind words to your employees can go a long way.
In fact, most employees feel starved of recognition at their places of work. When you show them
gratitude and appreciation it will mean a lot to them. It also a kind of reinforcement strategy, where
you reinforce the good work that they do by recognizing them for it. That inspires them to want to do
more of it.

But don’t just give the praise in private. Give it in public as well for a much grander effect. When you
praise your employees in public, the rest of the team also gets inspired. When you reward your team
for work well done then a culture of reward and appreciation begins to develop between you and
your employees, which motivates them to work even harder at their tasks.

The Function of Constant Feedback

You should offer feedback as frequently as you can to your employees. You can tell them about the

great work they’re doing as well as offer some constructive criticism on what they need to improve.
That is another essential part of a strong relationship between an employee and a manager.

Believe it or not, your employees actually want and value your feedback. They want to learn more
and grow in their capabilities and sills and feel like they are moving ahead, not just at their place of
work, but in life as well. When you give them guidance and little tips on what they need to do to get
where they want, they will appreciate you. Hold as many feedback sessions as you need to do this
and make sure you employees constantly feel like there is growth and development in their work and
themselves.

The Function of Investment

You should always show your employees that you care. You shouldn’t care about them as your
employees, but also as people. They need to know that you take their fulfillment seriously, both
personally and professionally. When you want your employees to succeed, they will respect you
more and will be more engaged in their work and in the company generally.

When an employee is happy and feels fulfilled in his personal life, his productivity at work is likely to
improve. So, if you want to see your employees do better, make a grand gesture of investing in their
personal lives and you will see massive improvements.

The importance of industrial relation is as follows:

1. Increased Production:
Healthy cordial relationship between the work force and the employer
and management and amongst the workers within the workplace
improves the workers’ productivity and efficiency. It motivates the
workers to contribute their best towards attainment of organisational
objectives. This leads to increase in production in the organisation.
2. Reduction in Industrial Disputes:
Good industrial relation helps in reducing the industrial disputes.
Good Industrial relationship removes dissatisfaction among the
workers. Adequate financial and non-financial benefits, provision of
employee participation in sharing of profits and of management and
decision making, improved bargaining capacity through mutual
negotiations and consultation with the management provides
satisfaction to the workers.
Satisfied workers are less inclined towards entering into conflict with
the management on issues like low wages, long work hours, and
unhealthy work environment. Thus industrial unrest can be avoided.
3. Uninterrupted Production:
The most important benefit of industrial relations is that it ensures
uninterrupted production. Reduced industrial dispute, industrial
unrest, strike, lock outs can be avoided through good industrial
relation. This ensures smooth running of the organization and
continuous production.
4. Improves Morale:
Good industrial relation boosts the morale of the employees.
Employees feel that they are part of the organization and their
contribution will improve productivity of the organization. Good
industrial relation brings about realization among the employees that
gain to the organization will not only benefit the employer but will
benefit them as well. This makes the workers work with zeal, energy
and efficiency.
5. Effective Utilization of Resources:
Good industrial relation helps in effective utilization of man, money
and material. Improved employee morale, industrial peace,
recognition of employee’s interest and reconciliation of employer’s and
employee objectives and interest increased production with minimum
wastage of resources.
 What are the challenges in India
Suppose a fatal happened in any factory and the worker is contract labour. Now the contractor ran
away as soon as this incident occurred, as an IR manager what would you do? You will find there is
no provision for compensation by employer for death of contact labour inside factory premises in
Contract Labour (Regulation and Abolition) act 1970. Still you have to do something. So an IR
manager has to be prepared for these type of scenarios .Let us explore some challenges in brief.

 Labour is a subject in the concurrent list of the Indian Constitution where both centre and state can
amend and frame the labour laws. As a result, labour law varies from state to state and thus it becomes
difficult for IR managers to follow the laws strictly.

 In this cut throat competition, dependence on contract labours is increasing at phenomenal rate. There
are not that many amendments in Contract Labour (Regulation and Abolition) act 1970, which could
really cover all the dynamism of Contract Labour issues. As a result, IR managers are found with
albatross around their neck.

 The roles of the unions are defined, but their responsibilities are not mentioned.
 A ‘protected workman’ is defined, but there are no such provisions for factory managers.

 Productivity & Flexibility are not mentioned anywhere in ID Act 1948, so it becomes difficult to retrench
any worker or take any steps against him even though he is not working as per expectations.

 Formation of trade union is a fundamental right in India.

 There is a lot of misconceptions regarding ‘collective bargaining’ issue if it is fundamental right or not.

 Difference in wages of the regular employees and contract labours is a major issue of concern and is one
of the main causes for several disputes because many times it has been seen that there is no difference in
nature of the job between regular employee and contract labour.

So, in race of earning profit many organizations have introduced the concept of contract labour in
practice , which is the most critical issue as far as the applicability of labour laws are concerned. Many
cases(contract labour issues) either it is B.H.E.L Workers Association ,Hardwar v Union of India (AIR
1985 SC409) or Gammon India Limited v Union of India (AIR 1967 SC691), one can find the
difference in opinions regarding implementation of labour laws. Every judgement has its own opinion
towards the applicability of labour laws. Not only contract labour issues, an IR manager have to be
very cautious while dealing with issues regarding trade unions, collective bargaining, compensations
and different issues in factory.

How to face these challenges

For sustainable growth, organizations have forgotten the essence of employment relationship and
allowed the business to be driven by their dreamy thought of "PROFIT AT ANY COST.” They
knowingly or unknowingly are involved in the practice of exploitation of the ‘social resources’. It has
resulted into the peril of indifference among the workers.
This is no denying the fact that the Manesar incident has not only damaged the image of Maruti Udyog
but also damaged the social image of incredible India and specially Gurgaon. So, let us see how can
we manage these issues.

1. To deal with Trade Unions, Contractors, labours , IR managers should minimize the use of jargons
and they should try to communicate in simple language and if possible try to communicate in local
language to avoid any confusion.

2. Review different labour laws, civil laws and consult with the company’s legal representative to
assure if the company is in compliance with all of these regulations.

3 .Always try to listen closely to the employee’s concern. It is not always necessary
to give judgement or suggestions and to enforce certain policies, which are not in law.

4. Sometimes to settle down dispute, An IR manager can take the decision on the basis of their intuition.

5. Job rotation policy or transfer of the workers are the another way to settle down the dispute among
the workers or employees.
6. They should not try to check the workmen to form unions or groups, which may lead to aggression
among them.

Trade Union: it’s Meaning and Definition!

Trade unions are associations of workers and are formed with the
intention of protecting the workers against exploitation of the
employers and also to improve the workers’ conditions. The
industrial revolution in England and in other countries and the
advent of the factory system of production are greatly responsible for
the emergence of trade unions.
The modern industrial establishments employ the workers in
conditions which make them helpless in bargaining individually. The
workers are unorganised and are subject to exploitation by the
employer. This exploitation of the employers is resented by the
working class. Hence they form unions to protect themselves against
the exploitations of the employers.

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Thus, the trade union movement arose for the purpose of defending
their rights, for improving their living and working conditions and for
protecting their interests. From a small beginning, this movement has
now grown into worldwide movement for achieving social justice,
economic equality and preservation of democratic values of life.

Meaning and Definition:

Trade union is a voluntary organisation of workers formed to protect
and promote their interests through collective action. It may be
formed on plant basis, industry basis, firm basis, regional basis or
national basis. Different writers and thinkers have defined the trade
union differently.

A few definitions are given below:

1. Trade union is a “continuous association of wage earners for the
purpose of maintaining and improving the conditions of their working
lives.”

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—Web

2. “A trade union means an association of workers in one or more

occupation— an association carried on mainly, for the purpose of
protecting and advancing the members’ economic interests in
connection with their daily work’.

—G.D.H. Gole

3. “A trade union is an association of employees designed primarily to

maintain or improve the conditions of employment of its members.”

Meaning and Definition of Trade Union:

A trade union is an association of workers formed with the object of
improving the conditions of workers. It is formed for protecting the
interests of workers. Workers have little bargaining capacity when
they are unorganized. In fact, trade union movement began against
the exploitation of workers by certain managements under the
capitalist system.
The trade union has been defined by different authors as
follows:
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(1) Webb:
Trade union may be defined as “a continuous association of wage
earners for the purposes of maintaining or improving the conditions of
their working lives.”

(2) Lester:
“A trade union is an association of employees designed primarily to
maintain or improve the condition of employment of its members.”

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(3) Indian Trade Union Act 1926:

“Any combination whether temporary or permanent formed primarily
for the purpose of regulating the relations between the workmen and
employers”.

Objectives of Trade Union:

The following are the objectives of trade union:
(1) To improve the economic lot of workers by securing them better
wages.

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(2) To secure for workers better working conditions.

(3) To secure bonus for the workers from the profits of the
enterprise/organization.

(4) To ensure stable employment for workers and resist the schemes of
management which reduce employment opportunities.

(5) To provide legal assistance to workers in connection with disputes

regarding work and payment of wages.

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(6) To protect the jobs of labour against retrenchment and layoff etc.

(7) To ensure that workers get as per rules provident fund, pension
and other benefits.

(8) To secure for the workers better safety and health welfare schemes.

(9) To secure workers participation in management.

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(10) To inculcate discipline, self-respect and dignity among workers.

(11) To ensure opportunities for promotion and training.

(12) To secure organizational efficiency and high productivity.

(13) To generate a committed industrial work force for improving

productivity of the system.
Functions of Trade Unions:
(1) Collective bargaining with the management for securing better
work environment for the workers/ employees.

(2) Providing security to the workers and keeping check over the
hiring and firing of workers.

(3) Helping the management in redressal of grievances of workers at

appropriate level.

(4) If any dispute/matter remains unsettled referring the matter for

arbitration.

(5) To negotiate with management certain matters like hours of work,

fringe benefits, wages and medical facilities and other welfare
schemes.

(6) To develop cooperation with employers.

(7) To arouse public opinion in favour of labour/workers.

Benefits of Trade Union:

Workers join trade union because of a number of reasons as
given below:
1. A worker feels very weak when he is alone. Union provides him an
opportunity to achieve his objectives with the support of his fellow
colleagues.

2. Union protects the economic interest of the workers and ensures a

reasonable wage rates and wage plans for them.
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3. Union helps the workers in getting certain amenities for them in

addition to higher wages.

4. Union also provides in certain cases cash assistance at the time of

sickness or some other emergencies.

5. Union organize negotiation between workers and management and

are instruments for settlement of disputes.

6. Trade union is also beneficial to employer as it organizes the

workers under one banner and encourages them follow to peaceful
means for getting their demands accepted.

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7. Trade union imparts self-confidence to the workers and they feel

that they are an important part of the organization.

8. It provides for promotion and training and also helps the workers to
go to higher positions.

9. It ensures stable employment for the workers and opposes the

motive of management to replace the workers by automatic machines.

10. Workers get an opportunity to take part in the management and

oppose any decision which adversely effects them.
 Types of trade Union

A trade union is a group of workers who join together in order to protect their own interests and to be more
powerful when negotiating with their employers.

Each employee who wishes to join a trade union must pay an annual fee, which contributes towards the costs
and expenses that the trade union incurs when it provides services to its members, and supports industrial
action by the workers.

Trade unions have a number of aims:

1. To improve the pay of its members.

2. To improve the working conditions and the working practices of its members.
3. To support the training and the professional development of its members.
4. To ensure that their members' interests are considered by the employers when any decision is made which will
affect the workforce.

There are four main types of trade union in the UK:

1. General Unions. These are for skilled and unskilled workers performing different jobs in different industries
(e.g. cleaners, clerical staff, transport workers).
2. Industrial unions. These are for different workers in the same industry (e.g. the National Union of Miners
(N.U.M), covering workers at all levels in the hierarchy).
3. Craft Unions. These are fairly small unions for skilled workers, performing the same or similar work in
different industries (e.g. musicians).
4. White-collar Unions. These are for 'white-collar' (or professional) workers who perform the same or similar
tasks in different industries (e.g. teachers, scientists).