Contemporary Issues in

Employee Relations

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 Winds of change for Employee Relations

 Some of the contextual factors which have ushered in the shift:

• Globalization
• Governments of many countries have changed their development strategies and adopted
policies that favour deregulation, privatization and liberalization of trade and commerce
• The renewed activities of the MNCs, who are drawn to the developing countries by low wage
rates and the withdrawal of restrictions on foreign investments.
• Economic reforms
• A policy thrust on creation of job/employment opportunities boosts union power, and
contrarily, if the policy aims at reducing inflationary rate, then it creates an upswing in the
employer power
• Technology adoption
• technological changes do significantly influence the employment relations in a firm.
• Social, political and legal factors
• One of the most powerful political factor influencing employment relations in India is the
extent of hold the political parties exercise through their associations with the affiliated
unions
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 Government interventions
Intervention Provision in India Act and Rules
Protection of workers’ rights Workers can form unions. Unions can Trade union Act 1926. Industrial
negotiate wages and conditions of Disputes Act 1948.
work.

Protection of the vulnerable Regulation and prohibition of child Child labour Act 1986. Equal
labour; equal wage and equal Remuneration act 1976.Maternity
employment opportunity for women; Benefit Act 1961.
maternity benefit.

Establishment of minimum Workers to be paid minimum wages, Minimum Wage Act 1948.Plantation
compensation for work and minimum non-wage benefits like Labour Act 1951.
medical , housing etc.

Assurances of decent working Minimum occupational and safety Factories Act 1948.
conditions health standards, maximum hours of
work.

Provisions for income security Social Security. Workers get payment Provident Fund Act 1952.ESI Act
during sickness, disability or old age. 1948.Payment of Gratuity Act 1972.
Workmen Compensation Act 1923.

Provisions for job security Limited right not to be dismissed. Industrial Disputes Act, 1948.
Compensation when retrenched.

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 Employment Relations in a transnational
environment

 One approach of the MNCs is to create mirror images of the employment

relations technique that they developed at home in their foreign subsidiaries,
virtually in the same form regardless of the local environment
 The opposite also is known to have happened, whereby the traits of the local
environment have deeply shaped the employment relations strategy in
multinational subsidiaries
 MNCs are often seen to use their considerable clout to subvert existing
employment relations arrangements in the host countries to suit their interests
 The host countries frequently offer MNCs incentives, like exemption from
employment regulations, or even changes in employment laws as a way of
attracting investment or of preventing them from going elsewhere

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 MNC in India

 The incumbent trends India are:

 New centers of industrial strife (like Gurgaon, Manesar, Pune, Jaipur, Chennai,
Bangalore) have replaced traditional centers of union militancy like Bengal or
Ahmedabad
 Managerial strategy for union avoidance and issues of union recognition
emerged as a key issue for disrupting harmony in employment relations.
 The pressures of global competition and consequent quest for labour flexibility
resulted in growing use of temporary workers
 Managerial style was another source of discord. It often manifested in summary
suspensions and dismissals pay cuts, intolerance for any interference in their
own production plans, insistence on written undertakings of good conduct
 Matched by managerial insensivity, worker militancy formed another trend

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 Employment Relations in SMEs

 Some key findings:

 Researches on the status of employment relations practices in SMEs have
indicated a general lack of formal processes and informal engagement in
routine day to day tasks
 Formal people practices are conspicuous by their absence, and the internal
environment is relaxed and friendly with strong focus on relationships
 Employee relations were characterized by informality and close personal ties

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 future of employee relations

 Constantly evolving technology, rapid globalization, and the arrival of new

millennial employees- are all combining to unsettle the arrangements that have
been regulate the modern workplace.
 The advocacy for continued relevance of employee relations should have four
key plans:
 Work dominates and likely to dominate the lives of people and the vast
multitude of them are employees, rather than employers
 The management of employees, both collectively and individually, is the
fulcrum of organizational life
 It is difficult to hoist a unitary mindset on the employees or compel the
development of common interest between the manager and the managed
 Finally, the decline of trade union and the march of human resources
management notwithstanding

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 future of employee relations (cont.)

 If employment relations has to remain relevant:

 Needs to define a coherent set of values and priorities: greater equity, trust and
reciprocity
 Improved employment standards required by a decent workplace which will
incorporate fair wages
 Greater employment security
 Flexibility in work to create a work life balance demanded by the new
employees
 Slew of legislations to foster industrial democracy
 Individual and collective employment rights
 Strategy for vocation-oriented curricula, learning and skill enrichment

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 Thank you!

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