Unit -I

Introduction of IR
 Evolution of IR in India
1. Industrial Relations in India Prior to British Raj
 India was predominantly a pastoral and agrarian economy during ancient and
medieval times.
 A large number of occupations were carried on by small manufacturers in their
cottages.
 The employer- employee relations were those of master and slave and, later on,
of those of master and servant.
 Ancient laws of our country laid emphasis on the promotion and maintenance of
peaceful relations between capital and labour.
 From very early times, craftsmen and workers felt the necessity of being united.
 The description of unions of workmen in different occupations is found at many
places in the Vedic literature and Shastras.
 During the days of Vikramaditya, there were well organized guilds known as kula.
 These guilds worked according to their own by-laws for the management of the
unions.
 From the earliest Buddhist literature, it appears that Shreni aimed at making
commercial progress.
 Almost every craft, profession or occupation had its own union which was called
Shreni.
 Every Shreni included about a 1000 members.
 The Shreni elected its chief who was called Pramukh.
 These guild often have considerable political power and influence.
 The Indian works of arts and crafts were badly damaged during the invasions of
foreign invaders, which lasted for about 700 years.
 These artisans gradually lost their traditional skills.
 Their condition degenerated to such an extent there was hardy any difference
between an artisan and a slave.
 The situation improved after the restoration of law and order under the Mughals.
 It has observed that different kinds of work such as embroidery, goldsmith’s work,
varnishing, tailoring, leather work, making of pots, polishing of metals with gold or
silver, weaving of silken clothes were carried on in big apartments known as the
Karkhanas.
 Under Emperor Akbar, the government factories worked at Agra, Lahore, Fatehpur,
and Ahmedabad, where employees could develop their respective arts.
 All contemporary travellers and historians agree that the industry of manufacture
of wool and its cloth was in a very highly developed condition in Kashmir.
 The articles produced by these craftsmen were mostly consumed by the Mughal
emperors and the members of the household and nobles.
 The commercial character of the East India Company did not change the
conditions of workers.
 After the abolition of the monopoly of the East India company in 1883, the British
Industrialists and merchants were able to develop some industries and trade in
India.
 2. Industrial relations during colonial period
 Industrial relations in by- product of Industrial Revolution and it owes its
origin from excessive exploitation of workers by the owners of industries.
 The relationship was that of two unequal- the powerful employers and
powerless workers.
 It was a master servant relationship which continued for a long.
 In early stage, the Government adopted the policy of Laissez- faire and
later on, enforced penalty on workers for breaches of contract.
 Some attempts were made to form trade unions, which were resisted and
crushed by the employers.
 The First World War is the first milestone enroute to industrial relations in
India.
 In certain social, economic and political conditions, which raised new
hopes among workers in industries.
 It was for the first time, that workers realized their importance that unless
they produce goods required for wars, the wars cannot be fought
successfully.
 After war, prices of consumer goods also become dearer.
 This lead to intense labour unrest because worker’s earnings did not keep
pace with the rising prices and their aspirations.
 Many other events happened which accelerated the pace of industrial
relations during the period-
1. Establishment of ILO(1919) and the influence of its conventions and
recommendations.
2. Formation of the Labour Party Govt. in U.K in 1924.
3. The Indian Trade Union Act of 1926.
4. The Trade Dispute Act, 1929.
5. Formation of Royal Commission on labour, 1929-31, which made a
comprehensive study of Indian Labour problem regarding health, safety
and welfare of workers and made recommendations of far- reaching
consequences.
 The second World War gave a new a spurt in the industrial relations field.
 The exigency of the war made it essential for the Govt. to maintain
uninterrupted flow of goods and services for successful conduct of military
operations.
 Therefore Govt. of India embarked upon a two- fold action for maintaining
industrial relations-
1. Form a Trade Dispute Act,1929 for helping the union Government in
enacting the I.D. Act,1947, which laid down a comprehensive dispute
settlement machinery to be applicable to all states.
2. The need for tripartite labour machinery on the pattern of ILO was
recommended by the Royal Commission on Labour as early as in 1931.
But the first step in this direction was taken only in the year 1942, when
the first tripartite labour conference was held at New Delhi under the
Chairmanship of Dr. B.R. Ambedkar.
The objectives, set before the two tripartite bodies at the time of their
inception in 1942, were-
1. Promotion of uniformity in labour legislation.
2. Laying down of a procedure for the settlement of industrial disputes.
Tripartite deliberations helped to reach on
 statutory minimum wage fixation(1944)
 constitution of tripartite industrial committees (1944)
 Introduction of health insurance scheme (1945)
 Provident funds scheme (1950)
Thus, it led to the passing of three important central labour laws like-
 The Minimum Wages Act, 1948
 The Employee’s State Insurance Act, 1948
 The Employee’s Provident Funds Act, 1952.
 IR in Post- Independence Era

This was the time when we launched our five year plans. Each of the
successive five year plans emphasized for the well- being of the working
class, co-operation between worker and employer, harmonious industrial
relations, worker’s right and worker’s participation, Welfare State etc.
The results of independence saw the mushroom growth of trade unions.
This was the period when Industrial Policy Resolution, 1956, facilitated the
growth of the public undertakings both at the centre and state level.
Through these PSUs, Govt. wanted to preset a role-model of industrial
relations as ‘ Model- Employers”.
Emergency of 1975 had its share of impact on industrial relations. Mrs. Indra
Gandhi, the PM, wanted to salvage her image as a democrat. Therefore
she amended the constitution to provide for workers participation and
added in the Industrial Dispute Act, 1947.
 IR in Post-Globalization Period from 1991 to till date
 The requirements a of global competitiveness are of international
standards in quantity, quality, cost- effectiveness and customers.
 This in turn, requires introduction of state of art technology,
followed by innovation, creativity and strategic alignment of
divergent resources to create performing climate.
 Such a performing climate requires a dynamic and synergetic
relationship.
 The tradition of IR is under tremendous pressure, because it was
made to cater to the requirements of a controlled, protected and
regulated market and was unable to address the new imperatives of
a competitive, global market.
 A tug of war is going on between “forces of change” and “ forces of
inertia”.
 The market requires a flexible, and aggressive employee relations
approach, while traditional industrial relation wants to remain
adhered to status quo without any change.
 Traditional institutions of IR are losing their importance and relevance.
Trade unions are marginalized and kept outside the mainstream of
business.
 Strike is losing its cutting edge.
 Collective bargaining is being replaced by collaborative and productivity
and individual bargaining.
 Emerging Business Scenario
 In the post industrial society ,technological revolution has created a
situation where space, distance and time have lost their relevance.
 The world has really become a global village.
 This has facilitated the movement of business across the boarder.
 The business skyline is completely changing by continuous mergers
and acquisition across the globe.
 Global competitiveness is the only rule of the global business game
where only the fittest can survive.
 In this situation it was not possible for India to remain isolated and
insulated from the global changes.
 Hence India frame New Economic Policy, 1991.
 The profile and requirement of emerging industries are entirely
different from the requirement of sunset industries.
 New players like Consumer Forms, NGOs, and electronic media are
replacing trade union in many areas.
 Flexibilities has become of vital importance, which may be
enterprise flexibility like outsourcing or labour flexibility like size of
work force, composition of work force, functional flexibility, flexi
timings, pay flexibility and place flexibility.
 Changing patterns of managerial practices like life long employment
vs short term employment, part time, contract worker and
international workers are regular features.
 Changes nature of work like unmanned work station, officeless
work (sales executive), establishment open 24 hours 365 days.
 Use of electronic gadgets in the office like telephones mobile phone
computers and internet have made them smart and self reliant.
 Fresher from international bodies like ILO, WTO, International
labour standard are exerting pressure on IR.
 These business scenarios require a different brand of employees
relations.
 Changing Dimensions of Industrial Relations in India

 Emerging business scenario has brought in new market

imperatives.
 Therefore traditional IR is giving way to emerging employee
relations some of the features of this are as under-
1. The institutions of trade union is getting weak. In IT there are
hardly any TUs.
2. The institution of collective bargaining is being decentralized
and being replaced by unit bargaining and individual
bragaining.
3. Changing pattern of compensation management, fixed time
rate wages are replaced by performance based wages.
 The recent judgment of supreme court and Tamil Nadu
government case on strike 2003 send clear messages to the
unions that mean business-
1. There is a proposal for labour Law simplification.
2. There is a trend to make employer friendly conciliation.
3. There has been ease in labour inspection.
4. There has been use of IDA, declaring strikes illegal.
5. Strict enforcement of unfair labour practices.
6. Use of policies for diluting labour struggle.
7. Skills management and formation.
8. Employee involvement, participation and communication.
9. Trade union participation.
10. Diluting political ideology.
All the activity have become regular features of emerging E.R.s
this trend is going to be accelerated in future.
 Role of Trade Union in IR
Unions have a crucial role to play in IR. Unions have broad
objectives which are:-
1. To redress the bargaining advantage of the individual worker
by substituting joint action for individual action.
2. To secure improved terms and conditions of employment for
their members and the maximum degree of security to enjoy
these terms and conditions.
3. To obtain improved status for the worker in his or her work.
4. To increase the extent to which unions can exercise
democratic control over decisions that affect their interest by
power sharing at the national, corporate and plant levels.
The union power is exerted primarily at two levels- at the
industry level, to establish joint regulation on basic wages
and hours with an employer’s association or its equivalent
and at the plant level.
 Role of employer in IR
In general the employers play an important role like-
1. Creating and maintaining employee motivation.
2. Obtaining commitment from the workforce.
3. Establishing mutually beneficial channels of communication
throughout the organization.
4. Achieving high level of efficiency.
5. Negotiating terms and conditions of employment with
employee representatives.
6. Sharing decision making with employees.
7. Engaging in a power structure with trade unions.
 Role of Employer’s Associations
Employer’s associations operate at local, industry and all India
levels. The major objectives of employer’s associations
include:-
1. Representing employers in collective bargaining.
2. Developing machinery for the avoidance of disputes.
3. Providing information on employee relations and to give
advice.
4. Representing members on national issues.
the specific objectives of CII( Confederation of Indian Industries)
are:-
1. Identifying and strengthening industry role in the economic
development of the country.
2. Acting as a catalyst in bringing about growth and
development of the Indian industry.
3. Reinforcing industry’s commitment to society.
4. Working towards globalization of Indian industry and its
integration into world economy.
5. Providing up-to-date information and data to industry and
government.
6. Creating awareness and support industry efforts on quality,
environment and consumer protection.
7. Identifying and addressing special needs of the small- scale
sector.
8. Promoting co- operation with counterpart organization.
 Role of state in IR
Government intervention in IR is as old as the industry itself.
Howe ever, till the 19th century, governments everywhere
followed the laissez faire policy- they left IR to the managers
and workers who were required to solve the problems
themselves.
Towards the end of the 19th century, the attitude of the
governments changed, and intervention became a reality.
The state, as of today, regulates the relationship between the
management and the labour and seeks to protect the interest
of both the groups.
The government has set up wage boards, labour courts, tribunals
and enacted laws to lay down norms and to enforce their
compliance.
 Role of State in IR
The state endeavor to correct, through effective
industrial relations, an imbalanced, disordered and
maladjusted social and economic order with a view
to reshaping the complex socio- economic
relationship following technological and economic
progress. It also controls and disciplines the parties
concerned and adjust their conflicting interest.
In this process, it protects some and restrains others,
depending upon the situation.
 Three actors of IR
The major participants or actors of industrial relation are
workers and their organizations, management and the
government etc.
1. Workers and their organizations:- The workers play an
important role in industrial relations. The workers have
working age, educational background, family background,
psychological factors, culture, skills attitude towards other
work etc.
Worker’s organizations prominently known as trade unions play
their role more prominently in trade unions. The main
purpose of trade unions is to protect the worker’s economic
interest through collective bargaining and by bringing
pressure on management through economic and political
tactics. Trade union factors include leadership, finances,
activities etc.
2. Employers annd their organizations:- Employer is a crucial
factor in industrial relations. Employers employ worker, pays
the wages and various allowances, regulates the working
relations through various rules, regulations and by enforcing
labour laws.

He expects the worker to follow the rules, regulations and laws

and also expects them to contribute their resources to the
maximum. Employer from their organizations to equate their
bargaining power with that of trade unions. Employer’s
organizations protect the interest of the employer forcing the
trade unions and government.
3. Government :- government exerts its influence on industrial
relations through its labour policy, industrial relations policy,
implementing labour laws, the process of conciliation and
adjudication by playing the role of a mediator etc. it tries to
regulate the activities and behavior of both employees
organizations and employers' organizations.
 International Labour Organization(ILO)
ILO is the symbol of social justice, universal peace and human
dignity. India’s policies and programs, which it pursues in the
fulfillment of it’s obligations towards it’s people, are also
based on similar concept, namely, social justice, universal
peace and human dignity.
 ILO was established on April 19, 1919.
 It was born as a result of the peace conference at the end of
World War I.
 India became the member of ILO in 1919.
 It became specialized agency of United Nations in 1946.
 ILO is new social institution trying to make the word conscious
that world peace may be affected by unjust conditions of its
working populations.
 It deals with International Labour Problems.
 The unique feature of ILO is that it is a tripartite body
consisting of representation of employers, labour and
government.
 There are three constituents namely the governments, which
finances it, the workers, for whose benefit it is created and
the employers who share responsibility for the welfare of the
workers.
 Objectives of ILO
 Full employment and the raising of standards of living.
 The employment of workers in the occupation in which they can
have satisfaction of giving the fullest measures of their skill and
make their contribution to the common well being.
 The provision, as a means to the attachment of this end under
adequate guarantees for all concerned, of facilities for training and
transfer of labour including migration for employment and
settlement.
 Policies in regard to wages and earning bonus and other conditions
of workers like minimum wages to all and need of protection.
 The effective recognition for the right of collective bargaining, the
cooperation of management and labour in continuous
improvement of productive efficiency and the collaboration of
workers and employers in social and economic measures.
 Provision for child welfare and maternity protection.
 The provision of adequate nutrition, housing and facilities for
recreation and culture.
 The assurance of educational and vocational opportunity.
 Structure of the ILO
The structure of ILO consists three principle bodies-
1. The International Labour Conference
2. The Governing Body
3. The International Labour Office

The International Labour Conference:- it is the prime body of

the ILO. It comprises 4 representing members governments,
employers ad workers in the ratio of 2:1:1. ILC holds its
session once in a year. One of the primary powers of the
conference is to appoint committees to deal with different
matters during each session.
Functions of International Labour Conference
 To formulate International Labour standards.
 To fix amount of contribution by the member states.
 To decide the estimated expenditure.
 To consider the report of the Director General giving labour
problems ad assist their solution.
 To appoint committees to deal with different matters doing
each session.
 To select once in 3 years members of the Governing body.
 To elect President.
 To confirm the power, functions ad procedure of Regional
Conference.
The Governing Body:-
It is political and legislative body of ILO. Out of 56 members in it,
28 represent the governments, 14 employers and 14 workers.
The tenure of office of this body is 3 years. It meets several
times a year to take decisions on the programs of the ILO.
Functions:-
 To co-ordinate work of the organization.
 To prepare agenda for each session and subject to the
decision of the ILC.
 To appoint the Director General of the office.
 To follow up the implementation of the conventions and
recommendations adopted by the ILC.
 To fix the date, duration and agenda of the regional
conference.
International Labour Office
This is the third important body of the ILO. The Director General
of the ILO is the chief executive ad he is appointed by the
Governing Body. His tenure is for 10 years ad his term may be
extended by the governing body.

Functions:-
 To prepare documents o the times of agency for the
conference.
 To brig out publications dealing with industrial labour
problems of international interest.
 To collect and distribute information of international labour
and social problems.