The Role of Industrial Relations and Labor Legislation in maintaining Industrial Democracy and Harmony


Dr. Battu & Mr. Puttu

The Role of I. R and L. L in maintaining Industrial Democracy and Harmony 

1) Puttu Guru Prasad,*
M.Com, LL.B, P.G.D.F.T.M, M.B.A, M.Phil, (PhD), Professor, K L U Business School,
K L University, Andhra Pradesh. 

2) Dr. Nagaraju Battu,*
Professor and Research Director, Bommidala Department of HRM, Acharya Nagarjuna University,

Industrial progress  

Industrial relations has become one of the most delicate and complex problems of modern industrial society. Industrial progress is impossible without cooperation of labors and harmonious relationships. It is in the interest of all to create and maintain good relations between employees and employers

Industrial Relations  

The term industrial relations explain the relationship between employees and management which stem directly or indirectly from union±employee relationship. Industrial relations includes collective bargaining, workers participation in management, and grievance and dispute settlement.

The National Commission on Labor  

According to NCL, industrial relations affects not merely the interests of the two participants ±labor and management, but also the economic and social goals of the nation. To regulate these relations in socially desirable channels is the function of the State and Central Governments to perform effectively.

The Influencing factors of I.R 

Institutional factors Economic factors Social factors Technological factors Psychological factors Political factors Enterprise-related factors Global factors

Labor Legislation 

Despite various studies done in India indicating tangible benefits from liberalization of labour markets, Indian labour laws still remain highly restrictive due to political economy constraints

Labor laws and industrial relations  

Labor laws and industrial relations are important for all organizations ± especially which are operating at international level. Labor laws and industrial relations concepts differ according to country and region and according to the type of industry concerned. They should be flexible and take prevailing local factors.

The evolution of Industrial Relations 

The industrial relations began in India a long time ago. From the successive invasions of Moguls to Britishers, the industrial relations were greatly influenced by autocratic rule, less pay, poor living conditions and harsh treatment by the management.

The evolution of Industrial Relations  

During the British rule the first cotton mill was established in Mumbai in 1853, and a Jute mill was established in Kolkata in 1855. the working conditions of workers, however, were still very worse with low wages, harsh behavior of the management, and this give rise to various disputes involving the management and employees. Hence, factories act of 1881(British) was established, and granted certain rights to workers.

The evolution of Industrial Relations   

The first world war was an opportunity in disguise for local factories in India. Prices of all products went up and profits soared , however, wages of lower employees were still the same. There were various strikes and disputes between management and employees. During this time, the workmen¶s compensation act 1923, the trade union act 1926 and the trade disputes act 1917 were established

The evolution of Industrial Relations 

The years following World War II involved the most workers upheaval, and saw the establishment of Industrial Employment act 1946, and Industrial Disputes act 1947,Minimum Wages act, Factories act, and Employees state insurance act in 1948

Thomas A . Kochan 

Defined the IR in his book Collective Bargaining and Industrial Relations as ³all aspects of people at work´, but there are still some aspects which are totally neglected at work place like Industrial Hygiene, and Ergonomics.

John Dunlop  

Whether the nature of IR issues is sufficiently unique to justify considering IR a true discipline has been controversial. The author of Industrial relations systems theory, Dunlop argued and contends that industrial relations is a genuine discipline. To fully appreciate the multifaceted nature of many industrial relations issues, one must draw from a variety of perspectives, including economics, psychology, sociology, political science, and law, among others.

Pro to Non-unionization     

The post LPG era paved the way for IT and IT enabled service sector growth. The employees are highly skilled persons with high pay packages. Naturally their jobs are guaranteed and they work in their intellectual capacities, strive for quick self promotion rather than mass promotions. The private investors prefer non-unionized environment, and the Government introduced the investor friendly legislation for the promotion of Industrial economy. The employees and as well as Investors are against union activates. This causes the decline in number of unions in past four decades in India.

Human resource terms  

The terms Human resources, human resources management, and human resource development have emerged as preferred labels referring to employment issues in the modern period. Human resource terms have become more popular and the industrial relations term has become less popular as unions have declined in number.

Employee relations through HR policies
The unions emerge as a result of management¶s mistakes. That¶s why, all the IT based Technical industries are vigilant in maintaining good employee relations through HR policies and implementing all legitimate facilities for the full satisfaction of the employees.  

Retaining the Employees - through 

Work life balance, Employee participation in decision making, Encouraging Whistle blowers, 360 degrees appraisal system, Medical Insurance policies, Housing quarters, Housing loans, Car loans Better office ambiance, Hygiene work conditions, Brand image and loyally, High pay packages, Sweat Equity, Preferential allotment of shares to employees, Pay holidays for training and development, Job security, enrichment, satisfaction,

Industrial Relations includes  

Narrow definition:- Management of Labor organizations, collective bargaining, negotiations, industrial conflicts, grievance procedures, arbitration and mediation and other dispute resolution techniques, Maintaining industrial democracy. Broad definition:- Training and development, workforce diversity, compensation, selection and staffing, employment legislation such as laws on pension, safety, minimum wages and personal laws.

Karl Marx 

Worlds Intellectual father of Industrial relations, predicted that the pathological conflict escalating into inevitable class warfare between workers and capitalists, results in ultimate demise of capitalism.

John R. Commons 

The America intellectual father of Industrial relations and his followers argued that collective bargaining and legislation could temper the excesses of capitalism, allowing workers and management to resolve their conflicts for the sake of greater common interests within the capitalist economic system.

Employee involvement programs  

By the 1980s, innovation came to be associated more with the nonunion sector, and with unionization falling, the power of the unionized sector as a model to be emulated by nonunion firms was diminished in tandem. Many innovations like employee involvement programs, team concepts, quality circles, employee empowerment etc., are more closely associated with the nonunion sector.

Statue and judicial decisions  

The public policy on employment matters had shifted from a reliance on collective bargaining to more of an emphasis on individual worker rights established by statue and judicial decisions. Equal employment opportunity laws and judicial decisions narrowing the notion of employment-at-will ( employer and employee are free to enter or terminate an employment relationship at any time for good reasons, bad reasons, or no reason in the absence of formal contract)

Works councils  

We should seriously consider establishing works councils similar to those in many European nations. Works councils are legally mandated employee representation mechanisms independent of unions which requires that all employees elect representatives to the works council to confer with management and to ensure that worker¶s statutory rights are observed. Although they do not bargain over wages and benefits, works councils address many of the issues that unions have traditionally addressed including layoffs, discipline systems, and workplace safety.


Industrial relations and labor legislations are having cyclical effect on the harmonious industrial growth. Now the private investments are pouring into IT and IT enabled industries , where the workers are pro to non-unionization, and the Government also recognized the need for enacting equal employment opportunity legislation and Investor friendly Regulations for the promotion of industrial economy.

Presented by Dr. Battu and Mr. Puttu

Thank you & Any Questions Please

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