Module 5:

ROLE OF GOVERNMENT IN IR: PERSPECTIVES, TYPES AND MEANS OF GOVT.

INTERVENTION, FUTURE ROLE OF GOVERNMENT

1. LEARNING OBJECTIVEs

2. INTRODUCTION

3. DIVERGENT PERSPECTIVES

4. TYPES OF GOVERNMENT INTERVENTIONS

5. THE MEANS OF STATE INTERVENTION

6. LIBERALIZATION AND THE CHANGING ROLE OF GOVERNMENT

7. PROBLEMS CONCERNING THE ROLE OF THE GOVERNMENT IN INDUSTRIAL

RELATIONS

8. FUTURE ROLE OF THE GOVERNMENT

9. SUMMARY

1. LEARNING OBJECTIVES
Upon completion of the module the students should be able to understand:
 The importance of Government in maintaining the fabric of industrial relations setup.
 The divergent perspectives of state interventions in IR
 The ways and means of state intervention in IR
 Problems concerning the role of the government in industrial relations.
 Future of states’ intervention in maintaining the sound industrial relations.
2. INTRODUCTION
The role of the state in industrial relations is
determined by its political, ideological, and
socio-economic orientation. This has a direct
impact on the model it adopts for economic
development. After a brief overview of
divergent perspectives on the role of the
state, the chapter discusses the types of
interventions the government may make in
the sphere of industrial relations, the means
of action by the state in different aspects of
industrial relations, the relationship between
multinational companies and the state, and
the role of the state in industrial relations.
3. DIVERGENT PERSPECTIVES
The role of the government in industrial relations depends on its ideological (socialist, communist,
capitalist, neo-capitalist persuasion), political (neo-colonial, democratic, dictatorship or military
regime), and socio-economic (protectionist or neo- liberal, export-oriented policies) orientation.
The role of the state varies depending on the (early, middle, or late) state of
development/industrialization and the level (international, national, industry, enterprise, or shop-floor)
of interactions.
In the early stages of the industrial revolution, the state was hostile to workers and the
emerging labour movement and the state's role became one of legally-sanctioned suppressor (Bellace
1993). After World War II, the drive for political independence of countries under colonial rule, the
Universal Human Rights Declaration the influence of the Philadelphia Declaration, and the
enunciation of the international labour standards concerning freedom of association and right to
collective bargaining prevented the state from formally opposing the workers' right to organize and to
collective bargaining. In both communist and fascist countries, the state's posture towards workers
and 'unions' was operationally similar. Unions were viewed as an instrument of the state and, as such,
were brought under the control of the party and the state. Although called 'unions', labour unions in
such countries served to organize and control the 'workers' and, consequently, were incapable of
performing the role accorded to unions under a system of free collective bargaining. It became clear
that unions could exist and collective agreements could be signed without the state losing control of
labour unions. After World War II, in several newly independent countries, the state emphasized the
welfare of the workers and trade unions became adjuncts of the state. In some countries the state
curbed trade unions and collective bargaining in order to pursue the declared economic plans/goals,
while in others, unions were too weak and fragmented to effectively represent and protect the interests
of the workers without the support of the state. Most of the newly independent countries had a
politically controlled economic system, which required politically-oriented economic action by
workers (Sufrin 1964). In the early 1950s, in some countries like India, the unions tacitiy endorsed the
state's preference for adjudication, rather than articulating the need for collective bargaining.
In the middle phases of industrialization, the state became more tolerant of unions and
pluralist values. The south Asian countries, particularly India, had a large industrial base and a strong
trade union movement by the time they became independent. The leaders who fought for the
independence of these countries were also at the forefront of organizing the labour movement.
Therefore, the state in India has been tolerant of the unions and has recognized the value of labour-
management cooperation in the context of planned economic development. Unfortunately, the spirit
of non- cooperation, which was the hallmark of the freedom struggle, was reinforced after
independence and led to antagonistic union-management relations. In India the mesmeric effect of
leaders like Gulzari Lai Nanda, who strove hard to promote voluntarism and codes of discipline in the
1950s did not last long. In areas where the state encouraged protection of domestic entrepreneurship
with the public sector at the forfront, it guaranteed unviable jobs by nationalizing sick private sector
units. In areas where the state followed export-oriented policies, it played a key role in co-opting the
workers and the unions in the economic development process.
4. TYPES OF GOVERNMENT INTERVENTIONS

Table 5.1 presents the various types of interventions by the state in industrial relations.

In the latest phase of industrialization, the state is adopting a neo-liberal policy. The dominant model
is that of a market economy where the state will let the market forces take charge. Macroeconomic
development models that emphasize investment and export-oriented growth strategies in the success
of newly industrializing countries jn Asia did not initially support the principles of basic labour
standards, freedom of association, and collective bargaining (Kochan 1996).

Table 5.1 : Types of Government Interventions in Labour Markets

Type of Specific Guarantees and Examples
Intervention Policies
Establishment Right to associate and organize Workers can form labour unions
and protection of
workers' rights
Right to bargain collectively Workers can negotiate wages and working
conditions with employers
Right to engage in industrial Workers can strike or use other non violent
action (strike) means to achieve their demands
Protection for the Minimum working age Children under fifteen may not be
vulnerable employed; the minimum age for work is 18
years if the work is hazardous to health,
safety, or morals
Equality of wages and em- No worker can be paid a lower wage or be
ployment opportunities excluded from employment due to reasons
of gender, race, religion, ethnic background,
national origin, or sexual orientation.
Affirmative action may be used for
disadvantaged groups
Special provisions for women Women workers need to be provided with
maternity leave; they may not be compelled
to work during the night
Establishment of Minimum wages Workers are to be paid a minimum hourly
minimum wage
compensation for
work
Minimum non-wage benefits and Workers are to be provided with housing or
overtime pay medical benefits, a minimum number of
holidays in a year, and specified overtime
wages for work beyond the maximum hours
Assurance of Minimum occupational health Workplaces must have proper light and
decent working and safety ventilation, and workers must have
conditions protection from hazardous activity
Maximum hours of work Workers cannot ordinarily be required to
work more than a certain number of hours in
a week; they must have at least one rest day
a week
Provision of Social security Workers who are out of work because of
income security disability, lay off, or old age are entitled to
transfer payments based on their prior work
experience
Job security and severance pay Workers have some rights not to be
dismissed at will, and a right to
compensation when laid off
Public works Temporary employment is provided for
those willing to work in times of weak
labour demand
(Source: World Bank)
 Rapid changes in technology, the
paradigm shifts in the workplace and
significant changes in the demographic
profile of workers meant that blue-collar
workers are progressively replaced by
white-collar knowledge/professional
workers. The state may have felt that the
new class of workers should know how
best to protect their interests. Therefore, the
focus is shifting from collective to
individual rights, from union to worker
participation, and from union to employee
communication. Newer forms of worker
ownership and worker empowerment are
ideas to carry the message of non-
adversarial, mutually beneficial employee
involvement in management. With the proliferation of knowledge workers, the focus is shifting
towards expansion of information and consultation rights of individual employees. However, as the
proportion of such a workforce is still small in south Asia, these developments have not yet become
trends nationally or regionally, except in the limited, growing services/high-technology areas.
Industrial relations systems have been undergoing profound changes in many industrializing
countries principally due to changes in economic situations. As governments of many developing
countries particularly ASEAN countries in the late 1970s and 1980s—have an obsession with
catching up with the more developed countries, their role in bringing about industrialization has
increased. One of the requirements of rapid industrialization is capital accumulation on a larger scale.
Therefore, governments desiring the rapid industrialization of their countries should facilitate the
process of capital accumulation by using various policy measures. Since industrial peace is an
important factor related to the process of capital accumulation, many governments have tried to make
industrial relations commensurate with the need for industrialization (Sharma 1985).
The extent of emphasis on capital accumulation varies according to the stage of industrial
relations, which in turn depends on the extent of development and the stage of industrialization.
Consequently, different stages of industrialization generate different patterns of industrial relations. In
view of this, it was postulated that a systematic relationship between political, conflict-oriented, and
accommodative patterns of industrial relations, and least-, semi-, and newly industrialized stages of
industrialization, respectively, exists. There are three different patterns of industrial relations evolving
in ASEAN countries at different stages of industrialization in the mid-1980s. Indonesia largely
represented a political pattern, Singapore an accommodative (co-optation being a variation of this)
pattern, and Thailand, the Philippines, and Malaysia a conflict- oriented one (Sharma 1985). A strong
political will for the ASEANization of industrial relations in the region was not possible if the social
and economic conditions were not supportive. Not only in Singapore, but also in Japan, industrial
relations have passed through political and conflict-oriented phases before they became
accommodative during the phase the countries reached the newly industrializing stage and concern for
creating a positive investment climate became pronounced. The key to the transformation of industrial
relations from the conflict-oriented to accommodative phase was the manner in which the transitional
concerns of labour were dealt with. In both the countries, even during the short term the positive
effects of chanr outweighed the negative effects of job displacement due to investment boosting '
productivity enhancement measures.
5. THE MEANS OF STATE INTERVENTION
The following are among the major means of state intervention in industrial relations.
A. Policies:
The policy framework in the sphere of labour and labour management relations can be varied
depending on the country's stage and level of development. Three broad trends in state
intervention in industrial relations can be found in developing countries:
i. The logic of peace and cooperation during the period of planned economic
development and import-substitution-oriented industrialization.
ii. The logic of competition as economies are liberalized to integrate them with
the global economy. Here cost cutting and value addition are important. The
focus is on markets, not labour and efficiency, not so much on equity.
iii. The logic of co-opetition, as the dogmatic pursuit of competition brings to the
fore growing unemployment and glaring inequity. Here the focus is on both
efficiency and equity.
B. Legislation:
Laws include hard laws and soft laws. The International Labour Standards provide the basis
for national laws concerning various aspects of employment and industrial relations. These
are hard laws. Codes of conduct, framework agreements, etc., comprise voluntary
arrangements. The legal framework usually provides the bare minimum standards.
Progressive and professional managements should seek to do more than what the laws
minimally entail. The legal framework needs to be reviewed from time to time, to align laws
with emerging requirements and to ensure their simplification and rationalization. The legal
framework in the sphere of labour and labour management relations should balance the
requirements of both labour and product markets and combine the need for efficiency with
considerations of equity. It should uphold the principles envisaged in the International Labour

Standards. For instance, in matters concerning freedom of association and the right to
collective bargaining, legislation should be such that there is no undue interference in the
formation, registration, or functioning of trade unions and no limitations are put on the right
to collective bargaining.

C. Institutions:
The institutions dealing with industrial relations could be classified into facilitative,
executive, and judicial.
i. Facilitative: The facilitative institutions can be of several kinds. They
include, for instance, institutional mechanisms for the provision of skills.
Institutions for developing and operationalizing proactive labour market
policies will include a national employment service that doesn't merely
 register job seekers and play a mechanical role, but one that identifies the gap
between required and acquired skills, provides opportunities for bridging the
gap and matching job seekers with job providers. In terms of minimum wage
setting, it could include tripartite institutions for setting up and enforcing
minimum wages. In terms of workplace democracy, it could include statutory
and voluntary institutional mechanisms for worker
involvement/representation/say/stake. In terms of grievance redressal, etc., it
could include systems and procedures for grievance redressal, handling of
discipline, and dispute settlement.
ii. Executive: The laws enacted by the state come into effect only upon gazette
notification for the purpose. The executive is also responsible for enforcing
the laws through the labour administrative machinery appointed by the
central and state governments. The executive's role can be visualized as a
source of authority or service. If it is perceived as a service function, its
effectiveness can be judged in terms of knowledge, accessibility, and attitude
of the incumbents. Are they knowledgeable? Are they accessible? Are they
helpful?
iii. Judicial: The authorities described in the Industrial Disputes Act to interpret
and adjudicate disputes are part of the judicial machinery. The key question
here is whether or not these institutions are specialized, independent, and
autonomous. Judicial independence and autonomy of the kind envisaged by
the first and the second national commissions on labour will adversely
impinge upon the discretionary power of the state. Discretionary power can
be subjective and susceptible to abuse.
6. LIBERALIZATION AND THE CHANGING ROLE OF GOVERNMENT
In the wake of structural changes in the region, as elsewhere, dominant shifts in macro-
economic policy are discernible:
a) from a centrally planned to a decentralized market economy;
b) liberalization and export-oriented policies;
c) relative stagnation in employment in the organized sector, expansion in the informal sector,
and growth in unemployment and poverty;
d) privatization and/or private sector as an engine of growth;
e) emphasis on productivity and profitability in economic and industrial enterprises in the state
sector;
f) increase in the incidence of industrial sickness;
g) decline in job and income security;
h) growth of atypical, non-standard employment; and
i) adverse effects on employment opportunity for women.
These shifts call for a reassessment of the role of the state in social and labour matters. In
many countries these developments have further strained the relations between governments and
social partners, particularly on issues such as privatization and the increasing incidence of
redundancies and atypical forms of employment (ILO 1997). It will require the redeployment of
labour from unviable sectors to expanding sectors and coping with sharp, transitory drops in
the/demand for labour nationwide. How labour fares during these periods of major change depends on
how successfully countries manage these two tasks. Although initial conditions matter in easing the
adjustment process, so do policy choices about the timing and sequencing of reform (World Bank).
The following observations can be made about the nature and consequences of the changing
role of the state in a liberalizing economy:
 Is the state withdrawing from a more active role in the management of industrial relations,
either or both in the public and private sectors? Privatization apart, there is no evidence of
the withdrawal of the state from industrial relations management in India. In developing
countries the role of the state is expected to grow due to the unfinished agenda of labour law
reform, growing poverty and unemployment, and the presence of a vast, unorganized, and
unprotected informal sector. In such situations the government cannot afford to sit back and
be content with the role of an umpire in a bipartite process. They must take initiative in the
 field of labour administration, public enterprises, and the promotion of sound labour relations.
The recent policy shifts do not warrant that the state be dormant, but require it to be more
active, though in a different role: it should move away from the present controller's role to the
enabler's role.
 What has been the state's role in the promotion of export-oriented policies, as compared to
the earlier orientation towards import substitution in the countries of the region? Economic
reforms have been ushered in without much consultation at the planning stage. On the labour
front, however, the legal framework has not changed much except for liberalized
compensation for voluntary separations in the context of privatization and
restructuring/adjustment at the enterprise level in almost all the countries. Legal restrictions
on termination and closures remain, but collective bargaining provides for greater flexibility
and assertion of employer prerogatives of the type Malaysian industrial relations legislation
provides in respect of 'employment, transfer, promotion, work assignment and work force
adjustment'. Bangladesh and Pakistan mandated restrictions on workforce reductions in the
first year of privatization. What happens after that is anybody's guess. Indian legislation is
considered stiff and the Indian government is considered generally reticent, if not reluctant, to
dole out administrative clearances for lay-offs, closures, or retrenchment. However, collective
agreements provide for these in the private sector without reference to the state.
 Have labour market and industrial relations (laws and other policies) reforms kept pace
with the changes in macroeconomic liberalization policies in the countries of the region?
The literature on the south-east Asian experience suggests such a linkage, but in India such an
alignment is still elusive.
 What governance arrangements link the changed role of the state to sound industrial
relations in the countries of the region? Where power is decentralized, changes can be
discerned. For instance, in India, at the state level, direct privatization of the state-owned
public sector is taking place, but at the central level, privatization efforts have been stillborn.
At the state level, public enterprises which are unable to pay redundant workers' wages are
not paying. At the central level, this is not the case. Even firms which the Board of Industrial
and Financial Restructuring ordered to be closed due to their unviable nature, have not been
closed. Some states in India introduced secret ballot, while others simplified labour inspection
and cancelled registration of unions on technical grounds. What the state is not able to do, the
consumers and the judiciary are accomplishing. When consumer rights clash with worker
rights, the former prevails over the latter. Courts are coming down heavily on the workers in
the organized sector and are soft on the workers in the unorganized sector. A spate of
judgments in India in the post-liberalization era substantiates this.
 Has there been a marked tendency towards decentralization in collective bargaining? In
India, collective bargaining has traditionally been decentralized. The only exception are the
large industries in India in which the state is the major employer. In banks, ports, steel, and
coal, centralized industry-wide bargaining is still prevalent.
 What changes have occurred in the incidence of strikes and in conflict resolution
mechanisms? The incidence of strikes has come down, but that of lockouts is growing in
several countries of the region. The union's capacity to strike may have come down.
Alternatively, they seem to prefer covert to overt forms of conflict. Dispute and conflict
resolution mechanisms continue much the same as before, with their independence at the
lower levels still being in question.
 What evidence is there, if any, to suggest that there is a shift in emphasis from conflict
resolution to conflict avoidance and from dispute handling to preventive maintenance in
industrial relations? There is hardly any evidence of such efforts by the state. At the firm
level, however, cooperative agreements provide for peace clauses. Where external pressures
precipitated economic crises, cooperative agreements between labour and management are
becoming possible. Where mistrust is prevalent and transparency is lacking, mutual
understanding becomes impossible, leading to stalemates in problem solving.
 What are the new roles, if any, of the state in industrial relations, including in the areas of
skills training (vocational), workforce adjustments, and the national/ institutional
 framework of industrial relations? In India, the state has initiated a major revamp of the
national vocational training system with the possibility of setting up a credible accreditation
system. At the company level, agreements providing for training, retraining, and multiskilling
are being reached.
 What has the state done to promote sound labour relations? What practical measures has the
government taken to bring about a genuine shift from dominant conflict- oriented forms of
labour relations to dominant co-operative arrangements? Since national development will
largely depend on the functioning of the tripartite machinery, it is essential that workers' and
employers' interests should be represented by strong, representative, effective, and well-
structured workers' and employers' organizations. It is not enough for the government to have
promotion of sound labour relations as a policy objective. It has to be pursued with the
requisite political will. Also, sound labour relations should contribute to the overall
competitiveness of industry and economy.
 What has the state done to initiate policy reform? If policymakers wait for reform until the
economy collapses, they will have fewer options and probably a more painful transition.
Contrarily, if reform is tackled before the government has established its commitment and
credibility, the results can be counterproductive and set back the cause of reform, with
disastrous consequences for growth and social well-being. A credible and sustainable reform
programme requires that government, capital, and labour perceive a common interest.
Winning the support of organized labour is critical, especially if, as is sometimes the case,
unions represent only that part of the labour force that was relatively privileged before the
transition and may have a vested interest in impeding reform. Social pacts can provide a
vehicle for labour, employers, and governments to reach some consensus on the reform
package as a whole and on the trade-offs involved. However, social pacts can have their own
drawbacks if they lack the wider support of the administrative and economic ministries within
the government. Also, if they are purely voluntary, compliance may become a casualty.

7. PROBLEMS CONCERNING THE ROLE OF THE GOVERNMENT IN INDUSTRIAL

RELATIONS

The government needs to focus on some of the persistent problems that it faces with regard to
its role in the industrial relations situation. The following are some of the constant problems related to
the government's role in industrial relations:
i. Persons who are appointed to the post of (a) Labour Minister, (b) Labour Secretary, and (c)
Labour Commissioner are expected to have an in-depth understanding of the historical, social,
and economic dimensions of the subject, apart from having the elementary empathy and
sensitivity so essential for handling labour issues. In actual practice, this does not happen. The
 Ministry at the Central level and the departments at the state level, therefore, fail to make
their presence felt and create the desired impact.
ii. Trade unions have political and ideological affiliations. If the Labour Minister, at either
Central or state level, has his/her roots in any one of the trade unions, his/her decision cannot
have the necessary degree of objectivity or impartiality. He/she is sure to be influenced, to
whatever degree, by the ideological beliefs of his/her past.
iii. Industrial Relations Commissions, as envisaged by the First National Commission on Labour
(1966-69), would have provided an answer to the imbroglio of the biased ideologies of
ministers. However, this was unacceptable to most of the states, as it would have resulted in
the erosion of the authority of the Labour Minister concerned.
iv. One year comprises of 52 weeks and 365 days. If we have over thirty Tripartite Committees
at the Central level and an equal number of Committees at the state level, we may be paying
lip-service to tripartism, however, we will be unable to do any justice to their actual
functioning. This calls for a complete reorganization of the number, scope, and mandate of
these committees and their actual functioning.
v. The Central and state governments have done precious little to ensure that
a. Industrial Tribunals and Labour Courts are set up according to the need, i.e., related
to the number of cases/disputes that are on an average taken up for
conciliation/adjudication;
b. persons of caliber and professional competence handle Tribunals and Courts;
c. labour-oriented recurrent training and orientation are provided to these persons;
d. the trend is arrested wherein
i. some cases have lingered for 15-20 years with the Tribunals, and
ii. constitutional writ jurisdictions of the High Courts (Articles 226 and 227) and
the Supreme Court (Article 32) were invoked to challenge the awards of the
Tribunals and to stall their implementation; and
e. the perverse trend of taking recourse to protracted litigation and non- implementation
is arrested.
vi. There are different judgments of the apex court at different points of time on the definition of
the appropriate government and the interpretation of various sections and sub-sections of the
Industrial Disputes Act, 1947; Contract Labour (Regulations of Conditions and Abolition)
Act, 1970; Minimum Wages Act, 1938; etc. which have confounded the prevailing confusion.
8. FUTURE ROLE OF THE GOVERNMENT

Past experience reveals that both the market and the state fail if unquestioned faith is reposed
in either of them singularly. Both have their respective roles to play. Too much of reliance on one will
prove counterproductive.

In future, the role of the state will

increasingly come under scrutiny not only by
social partners at the national level, but by
pressure groups at regional and international
levels. To what extent is the future role of the
state contingent on the forces of globalization?
How does it impact the commitment to pluralism
and concomitantly, the general recognition of the
principle of freedom of association and trade
union rights, which are still to gain wide
appreciation in Asia in general and India in
particular? How does the state defend the cherished goals and values of industrial relations systems
and yet meet the challenge of globalization? Herein lies the answer to the above questions.
In a civil society, the role of the state will come under heavy scrutiny by social institutions.
As Adams rightly questions, in future, societies may not necessarily accept uncritically the
proposition that the state always acts in public interest. Governance is an issue. Good governance is
said to be one of the factors of the economic success of east Asia. Transparency International, an
NGO, is openly publishing lists of the most corrupt countries in the world. Some Asian countries are
included in the top ten. Rankings by the World Competitiveness Reports of IMD and World
Economic Forum are seeking to explain whether governments are becoming a gateway or barrier to
the competitiveness of their nations. Openness, policy consistency, fiscal prudence, integrity and
efficiency of bureaucracy, and political stability are among the factors that influence competitiveness
of nations and the enterprises within a nation. The World Bank has warned corrupt governments that
it would put a hold on projects where corruption is involved.
Are there some core, eternal values and principles concerning the role of the state? A good
industrial relations system is one that
 harmonizes the economic growth with social justice,
 ensures observance of labour standards, is change friendly, and
 promotes a culture of non-interference by one party into the affairs of another.
The search for alternative strategies for achieving both efficient development and
improvement in worker welfare tends to stress support for
 a minimal number of basic labour standards,
 free trade unions, collective bargaining,
 workplace institutions capable of internalizing enforcement of labour standards and
government regulations,
 investment in training and education, and
 support for open markets, free trade, and mobility of capital and labour resources
(Kochan 1996).
The pursuit of these multiple and perhaps conflicting objectives is not easy, but, as the UNDP
observed, economic development is a means and human development/progress should be the goal.
Therefore, even if globalization leads to competitiveness and economic efficiency, it should not be
allowed to undermine human and employment rights. The state should facilitate the factors and
processes that ensure that the effectiveness of industrial relations institutions and employment
practices are adapted to fit into the different cultural settings of developing nations.
There are four main requirements in the building of viable industrial relations systems:
 there is a need for a general commitment of the actors to pluralist values which would
include the legitimizing of workers' rights and the role of trade unions and other
representative bodies;
 industrial relations legislation must shift from the negative role of minimizing conflict
towards the positive goals of promoting labour flexibility and productivity through
democratic institutions in the workplace;
 this legislation should also extend to all employees and not just industrial workers,
especially as newly industrializing countries move into economic maturity reflected
in the growth of their service sectors; and
 this parallels the second requirement, the locus of a stable' system needs to be moved
downwards towards the workplace, implying a weakening of the role of the state. The
fourth point, however, needs to be clearly understood. The weakening of the role
must be in terms of a substantial reduction of discretionary controlling power of the
state and not that of an enabler or facilitator (Towers 1996).
9. SUMMARY
The role of the state in industrial relations is determined by its political, ideological, and socio-
economic orientation. This has a direct impact on the model it adopts for economic development. The
role of the government in industrial relations depends on its ideological (socialist, communist,
capitalist, neo-capitalist persuasion), political (neo-colonial, democratic, dictatorship or military
regime), and socio-economic (protectionist or neo- liberal, export-oriented policies) orientation. The
role of the state varies depending on the (early, middle, or late) state of development/industrialization
and the level (international, national, industry, enterprise, or shop-floor) of interactions. Rapid
changes in technology, the paradigm shifts in the workplace and significant changes in the
demographic profile of workers meant that blue-collar workers are progressively replaced by white-
collar knowledge/professional workers. The state may have felt that the new class of workers should
know how best to protect their interests. Therefore, the focus is shifting from collective to individual
rights, from union to worker participation, and from union to employee communication. The major
means of state intervention in industrial relations are Policies, Legislation, Institutions.
In the wake of structural changes in the region, as elsewhere, dominant shifts in macro-
economic policy are discernible: from a centrally planned to a decentralized market economy;
liberalization and export-oriented policies; relative stagnation in employment in the organized sector,
expansion in the informal sector, and growth in unemployment and poverty; privatization and/or
private sector as an engine of growth; emphasis on productivity and profitability in economic and
industrial enterprises in the state sector; increase in the incidence of industrial sickness; decline in job
and income security; growth of atypical, non-standard employment; and adverse effects on
employment opportunity for women. The government needs to focus on some of the persistent
problems that it faces with regard to its role in the industrial relations situation. In future, the role of
the state will increasingly come under scrutiny not only by social partners at the national level, but by
pressure groups at regional and international levels.