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Interaction between employers, employees, and the government; and the institutions and

associations through which such interactions are mediated. Government has a direct
involvement in industrial relations, through its role as an employer; one that is
particularly prominent in states where there are high levels of nationalization. Indirectly,
government has a major role through the regulation of the economy and the relationship
between employers and trade unions. (See corporatism.)

— Alistair McMillan

Industrial Relations

The term "industrial relations" has developed both a broad and a narrow meaning.
Originally, industrial relations was broadly defined to include the totality of relationships
and interactions between employers and employees. From this perspective, industrial
relations covers all aspects of the employment relationship, including human resource (or
personnel) management, employee relations, and union-management (or labor) relations.
Since the mid-twentieth century, however, the term has increasingly taken on a narrower,
more restricted interpretation that largely equates it with unionized employment
relationships. In this view, industrial relations pertains to the study and practice of
collective bargaining, trade unionism, and labor-management relations, while human
resource management is a separate, largely distinct field that deals with nonunion
employment relationships and the personnel practices and policies of employers. Both
meanings of the term coexist in the twenty-first century, although the latter is the more


The term "industrial relations" came into common usage in the 1910s, particularly in
1912 upon the appointment by President William Taft of an investigative committee
titled the Commission on Industrial Relations. The commission's charge was to
investigate the causes of widespread, often violent labor conflict and make
recommendations regarding methods to promote greater cooperation and harmony among
employers and employees. Shortly thereafter, the term gained even greater saliency in the
public mind due to the wave of strikes, labor unrest, and agitation for "industrial
democracy" that accompanied the economic and political disturbances associated with
World War I. As a result, by the beginning of the 1920s universities began to establish
industrial relations centers and programs to conduct research and train students in
employer-employee relations, while progressive business firms established the first
"industrial relations" or "personnel" departments to formalize and professionalize the
management of labor.

Although the term "industrial relations" came into prominent usage in the 1910s, its roots
extend back at least three decades into the nineteenth century. It was during this period,
beginning in the 1870s, that the process of industrialization began in earnest in the United
States, leading to the emergence of a growing urban-based wage-earning labor force
working in large-scale factories, mills, and mines. Conditions growing out of the
industrialization process—twelve-hour work days, tens of thousands of work-related
fatalities, low wages, extremely high rates of labor turnover, and poor employee work
effort and attitudes—led to growing numbers of strikes, revolutionary economic and
political movements, and demands for social and economic reform. These
maladjustments and frictions between employers and employees, and the conflict they
precipitated, came to be known as "the Labor Problem."

The emergence of industrial relations in the 1910s as an academic field of study and area
of business practice was thus intimately associated with the rise and growing seriousness
of the Labor Problem, and industrial relations came to be widely defined during this
period as the study of labor problems and alternative methods to resolve such problems.
Social scientists identified three major types of solutions: the "employer's solution" of
personnel management, the "workers' solution" of trade unionism and collective
bargaining, and the "community's solution" of government-enacted protective labor
legislation and social insurance programs (for example, minimum wages and
unemployment insurance). In its early years, therefore, industrial relations was broadly
conceived because it subsumed all three types of solutions to labor problems, while in
terms of ideology and approach to social policy industrial relations tended to be
reformist, progressive, and critical of laissez-faire.

Historical Development

During the prosperous and politically conservative 1920s, the American labor movement
suffered a significant loss in membership, influence, and public approval, while
restrictive court rulings and conservative political opposition hobbled the extension of
labor legislation. In this period the major line of advance in industrial relations was the
employer's solution of personnel management. Numerous firms established personnel
departments and in various ways tried to reduce the most serious causes of labor unrest
and turnover. The apogee of this effort was among several hundred liberal/progressive
employers who adopted the new model of welfare capitalism. Intended to promote
greater employee morale, cooperation, and productivity—as well as to undercut the threat
of unions and government intervention—this employment strategy entailed many new
employee welfare benefits (paid vacations and company doctors, for example), promises
of employment security, curbs on the right of foremen to hire and fire, payment of fair
wages, and the introduction of employee representation plans to promote resolution of
grievances and employee participation and voice in the enterprise.

The decade of the 1930s saw a near-revolution in American industrial relations practices
and policies. The Great Depression, beginning in late 1929 and extending to 1939, caused
widespread suffering and hardship among the industrial workforce, leading to the re-
emergence of numerous labor problems, such as low wages, long hours, and mass
unemployment. Many workers became disillusioned with employers when firms
succumbed to economic pressures and cut wages and other labor conditions, while some
became embittered when they perceived that companies took advantage of labor in a
harsh and opportunistic way. As the employer's solution lost credibility and effectiveness,
focus turned toward other solutions. This shift gained speed when the new administration
of Franklin D. Roosevelt was elected in late 1932 and soon thereafter Roosevelt instituted
his New Deal economic recovery measures. Under Roosevelt's leadership, public policy
turned favorable to labor unions and government labor legislation as a way to promote
economic recovery, protect the underdog in the employment relationship, and establish
greater industrial democracy. The three major initiatives were the National Labor
Relations Act (encouraging and protecting the right to join a union and bargain
collectively), the Social Security Act (establishing old age and unemployment insurance),
and the Fair Labor Standards Act (setting minimum wages and maximum hours).

The labor movement also transformed itself in the 1930s. More dynamic, aggressive
union leaders came to the fore, such as John L. Lewis, Sidney Hillman, and Philip
Murray. A more effective method of organizing and representing workers was
emphasized ("industrial" unions that organize all workers in an industry, rather than the
traditional "craft" union model that includes only workers of a particular occupation or
skill). And a new federation of industrial unions, called the Congress of Industrial
Organizations (CIO), was established to rival the traditional federation of craft unions,
the American Federation of Labor (AFL).

As a result of these events and developments in the economic, legislative, and trade union
worlds, a great shift in industrial relations practices and policies occurred in the 1930s.
Union membership mushroomed from only 10 percent of the workforce in the early
1930s to 27 percent a decade later. The American laissez-faire approach to employer-
employee relations was reversed and the beginnings of both greater government
regulation of employment and the development of a social welfare state were initiated.
Finally, employers emerged from the 1930s with much-reduced power in industrial
relations, while personnel management came to be regarded in many quarters as largely
ineffective and often an overt or covert union-avoidance device.

The decade of the 1940s saw a consolidation of the trends unleashed a decade earlier. As
a result of World War II, industrial employment boomed and the federal government
instituted a system of wage-price controls on the economy. The net effect of these
developments was to further spread collective bargaining and government regulation of
the labor market, in the case of the former due in part to government pressure on
employers to accede to union organizing efforts and bargaining demands in order to
prevent strikes and interruptions to war production. With the end of the war, wage-price
controls were lifted and a strike wave erupted in 1946 as employers sought to recoup
some of their lost prerogatives while unions fought to maintain their gains. The result was
largely to leave intact the industrial relations system that had evolved out of the war, but
with a discernible spread of opinion among the public that union power needed to be
reined in and made more responsible. The result was the passage in 1947 of the Taft-
Hartley amendments to the National Labor Relations Act. The law prohibited certain
practices of unions, such as the closed shop, and gave the government the ability to
temporarily end strikes that cause national emergencies.

Adverse changes in federal law notwithstanding, for roughly another decade organized
labor continued to expand its membership and influence. Unity was also restored in the
labor movement through the creation of a single labor federation in 1955, the AFL-CIO,
under the leadership of George Meany. Although not discernible at the time, the high
water mark for the labor movement came in the mid-1950s when the union share of the
non-agricultural workforce peaked at slightly above one-third. Hidden in this number is
the remarkable fact that over a twenty-year period unions had succeeded in organizing
most of the medium-large firms in the manufacturing, mining, and transportation sectors
of the economy. Also of significance, unions were seen as the primary innovators in
employment practices, using collective bargaining to win formal grievance systems, wage
classification systems, cost-of-living wage adjustment clauses, and a plethora of new
employee benefits.

Starting in the early 1960s, the New Deal industrial relations system, with its emphasis on
collective bargaining as the major institution for determining wages and labor conditions
in the economy, began to erode and be replaced by a new system. The new system that
emerged, and then became consolidated in the 1980s and 1990s, featured a much smaller
role for collective bargaining with a much-expanded role for personnel management—
now called human resource management—and direct government regulation of
employment conditions.

Several trends and developments were responsible for this shift. One was a slow but
cumulatively significant shrinkage in the size and influence of the union sector of the
economy. In the private (non-government) sector, the unionized share of the workforce
began to contract in the 1960s and continued to do so until the end of the century. While
32 percent of private sector workers were covered by collective bargaining contracts in
1960, in the year 2000 this proportion had shrunk to 9 percent—a level roughly equal to
that in the early 1930s. A number of factors were responsible for the union decline.
Unions gradually increased wage and benefits for their members up through the mid-
1980s, but in so doing the production costs at organized firms also became increasingly
higher than at nonunion firms. The result was a slow loss of competitiveness and jobs in
the union sector in the 1960s and 1970s, followed in the 1980s by a hemorrhaging of jobs
due to widespread plant closings and layoffs. Another complementary factor was the
intensification of competition in product and financial markets. Due to globalization and
domestic deregulation of industries, American firms experienced a gradual increase in
competitive pressure, leading them to more aggressively resist union organizing drives
and downsize and eliminate existing unionized plants. This trend was also complemented
by greater pressure from financial markets (Wall Street) for higher earnings and short-run
profit performance. Finally, during the presidency of Ronald Reagan in the 1980s
government policy toward organized labor turned more hostile, as reflected in the firing
of the striking air traffic controllers and the pro-management rulings of the National
Labor Relations Board.

The situation for unions from the 1960s to the 1990s was not entirely negative, however.
The most positive development was the spread of collective bargaining to the public
sector. Due to a liberalization of state and federal laws in the 1960s and 1970s, union
coverage in the public (government) sector greatly expanded, from 11 percent in 1960 to
37 percent in 2000. As a result of the shrinkage of private sector unionism and the
expansion of unionism in the public sector, the latter accounts for nearly 40 percent of
total union members in the United States. (However, even in the private sector unions
continue to represent over 9 million workers [and 7 million in the public sector] and,
encouragingly for organized labor, surveys indicate that one-third of American workers
would vote to have a union if given the opportunity.)

A second development that undermined the New Deal system of industrial relations was
the re-emergence and revitalization of the employer's solution of labor problems in the
form of human resource management. The decline of the unionized sector of the
economy opened the door for personnel/human resource management to reassert itself as
a leading force in industrial relations, and new ideas and practices in human resource
management allowed companies, in turn, to effectively take advantage of this
opportunity. Through the 1960s, personnel management had a reputation as a largely
low-level, heavily administrative, and nonstrategic business function. Starting in the
1960s, however, academic research in the behavioral and organizational sciences led to a
flowering of new ideas and theories about how to better motivate people at work,
structure jobs for increased productivity and job satisfaction, and organize and operate
business firms for competitive advantage. These new insights were gradually
incorporated into personnel management, leading to a shift in both its name—to human
resource management—and its approach to managing employees (from viewing
employees as a short-run expense to a long-term asset). As a result, human resource
management gradually replaced labor-management relations (increasingly thought of as
synonymous with industrial relations) in the eyes of academics and practitioners as the
locus of new and exciting workplace developments.

In the 1970s American companies started to introduce these new employment practices
into selected plants and facilities, culminating in the development of what is often called
a "high-performance" work system. Since the 1970s this system, and individual parts of
it, have spread widely. A high-performance work system is a package of employment
practices that include self-managed work teams, gainsharing forms of compensation,
promises of employment security, formal dispute resolution systems, and an egalitarian
organizational culture. These work systems not only boost productivity but also typically
increase employee job satisfaction, leading to reduced interest in union representation.
Companies have also become much more adept at keeping out unions, not only through
progressive human resource management methods but also through more aggressive and
sophisticated union-avoidance practices.

The third major force undermining the New Deal industrial relations system has been the
spread of greater government regulation of employment conditions. After the passage of
the Social Security and Fair Labor Standards Acts in the 1930s, the federal and state
governments enacted little new employment legislation until the mid-1960s. Starting with
the Civil Rights Act of 1964, however, government has become increasingly active in the
employment sphere. In addition to a host of laws and regulations pertaining to
discrimination (racial, gender, age, physical disability, sexual orientation), federal and/or
state governments have passed numerous laws relating to other employment areas, such
as pension plans, family and medical leave, and the portability of health insurance. It is
widely considered that these laws and attendant agencies, courts, and attorneys have to
some degree served as a substitute for unions, thus also explaining a portion of the union
decline in the late twentieth century.


The field and practice of industrial relations began in the early years of the twentieth
century and evolved in numerous ways in reaction to a host of far-reaching changes in the
economic, political, and social realm. It began with a broad emphasis on the employment
relationship and the labor problems that grow out of this relationship. As a result of the
rise of mass unionism between 1935 and 1955, the field became identified in the
academic and practitioner worlds with, first and foremost, the study and practice of
collective bargaining and labor-management relations. Since then the unionized sector of
the economy has shrunk considerably, while a rival field of human resource management
has grown and spread—a product of both new ideas and practices and the opening up of a
much-expanded unorganized sector in the labor market. Thus the term "industrial
relations" is increasingly associated with the unionized sector of the labor market. But a
minority of participants continue to view industrial relations as pertaining to the entire
world of work and, in particular, the three solutions to labor problems: personnel/human
resource management, trade unionism and collective bargaining, and government

Industrial Relations" is defined as "The Relations between Employers and Employees in

Industry". Public enterprise means an activity of a business character owned and
managed by the Government; Central, State or local, providing goods and services for a
price. Public sector undertaking is statutorily an autonomous institution and responsible
to the public through Government and Parliament.

According to the provisions of Article 2 of the Public Service Law I/1990, as amended
from 1990 to 2001, “public service” means any service under the Republic other than the
judicial service of the Republic or service in the Armed or Security Forces of the
Republic or service in the office of the Attorney General of the Republic or the Auditor
General or their Deputies or, without prejudice to paragraphs 3 and 4 of Section 126 of
the Constitution, of the Accountant General or his Deputies or service in any office in
respect of which other provision is made by law or service of workers or of other persons
whose remuneration is calculated on a daily basis or service by persons who are
employed on a casual basis in accordance with “Employment of Casual Officers” (Public
and Educational Service) Laws (Law 99/1985 and Law 122/1985

Since independence, the significance of the public sector as an employer and as an

investor was growing in India. Prior to 1947, public sector investment was limited to the
railways, post and telegraph department, ordinance, factories and a few state managed
factories. With the inception of five year plans, the public sector began to spread its
control over the economic sphere. With the Industrial Policy Resolutions of 1948 and
1956 the public sector has been assigned to specific role of bringing about rapid
industrialisation of India. Various investments in the public sector, such as for irrigation,
power and transport, for instance, increase the production potential of the private sector
and the producers or enterprises concerned can be expected to take advantage of these
facilities. The main aim of the public sector was not profit, but public service. Moreover,
the profits made by the public enterprises are utilised towards financing the economic
development of the country. Thus the purpose for which an industry in the public sector
is set up is primarily the welfare both for the workers and for the society.

The key factors for a better Industrial relations is creation of mutual trust, speedy
settlement of industrial conflicts, identification of conflict in the grass root level,
participation in decision making. The major external factor is the government policies. It
can be seen that the unrest in the industry is minimum since the policy of the government
have changed and it is pro-industry. Like wise a radical change in the minds of
employees, employer, public and government can remove the conflict and unrest from the
industrial area.

(i) To promote rapid economic development by filing critical gaps in the

industrial structure
(ii) To provide basic infra-structural facilities for the growth of the economy;
(iii) To undertake economic activity strategically important for the growth of
the country, which, if left to private initiative, would distort the national
(ii) (iv) To achieve balanced regional development and dispersal of economic
activity through growth and diversification of economic activity in less
developed areas by providing adequate infra-structure and undertaking
programmes of conservation and development of national resources;
(v) To reduce disparities in income;
(vi) To avoid concentration of economic powder in a few hands;
(vii) To exercise social control and regulation of long-term finance through
public financial institutions;
(viii) To control over sensitive areas, i.e., allocation of scarce imported
commodities; control over the distribution system in relation to essential
goods in order to reduce the margin between prices obtained by the producers
and those paid by the consumers;
(ix) To attain self-reliance in different technologies through development of
capacity for design and development of machinery, equipment and
instruments and elimination of dependence of foreign agencies for these
(x) To enhance the employment opportunities by heavy investment in industry
and mining, transport and communication; and
(xi) To increase exports and earn foreign exports and earn foreign exchange to
ease the pressure of Balance of Payments.

Public sector has come to assume the commanding heights of the economy. It
was monopoly in railways, communication and air transport; virtual monopoly
in coal mining, power generation and petroleum industry; a predominant share
in banking, insurance, shipping, steel and other metals; machine tools,
fertilizers, insecticides, and petrochemicals; and share in light engineering
industries like drugs;textiles garbages industries; consumer goods form break
of electronic new industries, it has also been taking over old opens which
became sick.

Public sector has played a significant role in the industrialization of the

country. By establishing the basic and heavy industries and providing the
infrastructure, it has enabled growth of innumerable light industries and also
taking over old ones which became sick.

Public sector has played a significant role in the industrialization of the

country. By establishing the basic and heavy industries and providing the
infrastructure, it has enabled growth of innumerable light industries and also
provided the virtual inputs of ushering the “Green Revolution”. It has also
played a pioneering role in dispersing industries in various regions of the
country particularly in the backward area.

It is generally recognized as a “model employer” providing fair wages, good

working conditions and amenities, and recognizing the rights of the workers.
As a result, industrial relations, except in certain units and for some time past,
are better and the mandays lost are much less than n the private sector.

In spite of its phenomenal growth and achievements, the public sector has
come in for criticism for its major shortfalls. The most important defect in the
public sector is the overall net loss incurred by it. The non-utilization of the
rated capacity, by the public sector undertakings, is another major
shortcoming. The shortfalls in core items in particular adversely affect the
growth of the entire economy. Some of the other defects in the sector are:

(i) lack of professional management; (ii) lack of autonomy for the mangers of
undertakings; (iii) adoption of bureaucratic procedures which breed delay; (iv)
appointment for surplus labor; (v) over stocking of inventories; (vi)
unproductive expenditures; (vii) neglect in maintenance of equipment; (viii)
taking over the burden of sick industries; (ix) uneconomic pricing of products;
and (x) lack of organic linkages between the big plants and small industries.

Frequency Rate = # lost time injuries X 200,000 divided by hours worked

Severity Rate = # DAYS lost due to work injuries X 200,000 divided by hours worked

This gives you the number of injuries (or days lost) per 100 people working

The terms were used by the National Safety Council until the early 70's when they were replaced
by "incidence rates"

Workplace safety performance is computed using frequency rate (FR) and severity
rate (SR). Only work time lost due to occupational incidents that need to be reported
is counted. FR and SR are the 2 most important safety performance indicators that
are applied universally; however, calculations differ from country to country. All
injuries and time lost should be considered while calculating safety performance

The Formula

 (Variable X 200,000) / Employee Hours

The 200,000 brings you to a rate equivalent to 100 full-time employees

During the development boom of the 1970s in Australia, the Green ban was developed by certain
more socially conscious unions. This is a form of strike action taken by a trade union or other
organised labour group for environmentalist or conservationist purposes. This developed from the
black ban, strike action taken against a particular job or employer in order to protect the
economic interests of the strikers.