Ch - 1

Introduction to Industrial
Relations (IR)

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 Changes in the Indian Economy
 Tariff and non-tariff trade barriers lowered
 Industrial licensing abandoned in many sectors
 Private capital permitted in areas reserved for the
public sector
 Restrictions on foreign direct investment removed
 Steps towards privatization
 Food subsidies reduced and
 The rupee devalued.

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 Changes have lead to:
 Strengthened presence of multinational
companies
 Increase in redundancy
 Introduction of new technologies
 New management techniques etc.

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 WHAT IS INDUSTRIAL
RELATIONS ?
 Acc. To. J. Henry Richardson“ Industrial
relations is an art, the art of living together for
purposes of production. The parties while working
together learn this art by acquiring the skills of
adjustment.”

 South African author Mark Anstey: “Essentially,

industrial relations is the process through which
employers and employees interact, and through
which they regulate conflict at the workplace”

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 According to H.A. Clegg: “The field of
industrial relations includes the study of
workers and their trade unions,
management, employers’ associations, and
the State institutions concerned with the
regulation of employment”

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Parties to Industrial Relations

Government Employer Employee

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 Features of Industrial Relations
 Industrial relations are born out of employment
relationship in an industrial setting.
 Industrial relations are characterized by both
conflict and co-operation
 Vital environmental issues
 Industrial relations also involve the study of
conditions conducive to the labour, management
co-operation.
 Policy framework laid down by the government
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 Scope of Industrial Relations
 Promotion and development of healthy
labor-management relations
 Maintenance of industrial peace and
avoidance of industrial strife and
 Development of industrial democracy.

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 Significance of Good IR
1. Industrial Peace
2. Higher Productivity
3. Industrial Democracy
4. Collective Bargaining
5. Fair Benefits to Workers
6. Higher Morale
7. Facilitation of Change

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 Factors Affecting IR
1. Institutional Factors
2. Economic Factors
3. Social Factors
4. Technological Factors
5. Psychological Factors
6. Political Factors
7. Enterprise-related Factors
8. Global Factors
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EVOLUTION OF
INDUSTRIAL
RELATIONS

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 Stages in Evolution of Industry
 Primitive Stage
 Agrarian Economy Stage
 Handicrafts Stage
 Guild System
 Putting Out (or Domestic) System
 Industrial Revolution

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 1. Primitive Stage
 Self-sufficient families
 Hunting, fishing, cooking,
domestication of animals, agriculture
 Barter System

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 2. Agrarian Economy Stage

 Agriculture was the primary

source of maintenance
 Human wants became varied.
 Emergence of Traders.
 Some families started using hired
labor
 The employee-employer
relationship was that of the master-
sewant/slave type.

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 3. Handicrafts Stage
• Growth of towns and Cities
• Innovation in the careers of workers.
• Apprenticeship by artisans.
• Development of craft-guilds.

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 4. Guild Stage
 Merchant Guild
- engaged in trade in a particular locality
- enforce equality of opportunity for the members
of the guild

 Craft Guild
- skilled artisans engaged in a same occupation
- regulated entry to the craft, prescribed standards
of workmanship and regulated the conduct of the
members.
 Began to decline by the end of 15th Century.
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 5. Putting Out System
 During the beginning of 18th Century
Intermediary emerged between the producers
and consumers
 Entrepreneur gave out work to the artisans
 Entrepreneur procured raw-materials and
equipment, assigned work to artisans,
inspected the quality and found a market for
his products
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 6. Industrial Revolution
 During the later part of 18th century and earlier
part of 19th century.
 It changed radically the techniques of
production
 It emerged because of increase in the demand,
due to widening of markets
 Series of mechanical invention
 Large scale employment in factories gave birth
to labor problem.
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 System Approach to IR

Environmental Participants in the Outputs

Factors system

Market or Union
economic restraints
Technology Rules of the
Management
Workplace
Distribution of
power in society
Government

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