Industrial Relations

Definition
• According to Prof. Dunlop, “Industrial relations may be defined as the
complex of inter- relations among workers, managers and
Government”.
Features of Industrial Relations
• Complex Relationship:
• Industrial relations do not constitute a simple relationship between the
employers and employees rather it is an art of living together for the purposes
of production, productive efficiency, human well being and progress.
• It helps in maintain harmonious industrial relations.
Mixture of cooperation and conflict
• Industrial relations are always mixture of cooperation and conflict.
some conflict may arise there are three reason
• Both the groups (labour and management) develop different
orientations and perception of their interests.
• There are no mutually accepted yardsticks or norms to tell two groups
how far they should in their pursuit of their objectives
Continuation
• There is no neutral field for the groups to meet on. This means the
two groups which meet each other for negotiations bring with them
some carry over past besides their inhere tent distrust.
• Multi- dimensional in nature
• Industrial relations do not function in vacuum but are in multi
dimensional in nature and conditioned with determinants like
institutional, economical, technological factors.
Scope of industrial relation
• Participative management:
• In participative management, the employees ate invited to share their
ideas while taking decision making process, participating in activities
such as setting goals, determing work schedules
• Dispute settlement:
• Industrial disputes are disputes which arise due to any disagreement
in an industrial relation.
• The dispute which take in the form of strike, demonstrations,
lockouts are avoided through settlement of industrial disputes.
• Trade union
• A trade union is a continuous association of wage earners.
• It is a strength to the employees
Employers organisations
• Employers organisations , compromising of business enterprises are
key actors of industrial relations.
• Example: All India Organisation of Indian Employers (AIOE), Council of
Indian Employers(CIE) are the umbrella organisations for Indian
Employers.
Collective Bargaining
• Collective bargaining is a formal process which involves negotiation,
consultation and exchange of information between employers and
workers, the end goal being an agreement that is mutually acceptable
to all parties.
• Thus collective bargaining leads to an agreement known as labour
court.
Labour legislation
• The term labour legislation is used to cover all laws which have been
enacted to deal with promoting health and welfare of workers.
• Grievance Redressal
• The grievances of the employees related to the contract, work rule,
regulations, policies, procedure are redressed
• Therefore effective Grieveances handing is essential part of good
industrial relations.
Objectives of Industrial relations
Safeguard interest of labour and management:
To safeguard interest of labour and management by securing
highest level of mutual understanding and goodwill among all the
sections of the industry which participates in process of
production.
Enhances economic status of workers:
To improve the economic status of workers by improving wages,
benefits, and by helping the worker in evolving sound budget.
 Regulate government control
• To regulate Government control of such plants and units running
in loss or in which productions has to be regulated in the public
interest.
• Encourage and develop trade union:
• To encourage and develop trade union in order to improve the
workers strength.
• Avoid industrial conflict:
• To avoid industrial conflict or strife or develop harmonious
relation which are essential factor of productivity.
• Eliminate strikes and lockouts:
• Maintain industrial democracy
• To establish and nurse the growth of an industrial democracy
based on labour partnership in the sharing of profits and of
managerial decision, so that individual personality may grow.
• Raise productivity:
• To increase productivity to a higher level in era of full
employment by reducing the tendency of high turnover and
frequency absenteeism
 Vesting of proprietary interest
• Vesting of a proprietary interest of the workers in the
industries in which employed.
• Industrial relation aims to bridge the gap between various
public factions and reshape the complex social relationship
emerging out of technological advances by controlling and
deskilling members.
Factors influencing Industrial relations
Economic factors:
These factors are determined by the structure of the
economy- socialist economy, capitalist and mixed economy.
Example: demand and supply of labour, the nature and
composition of work, status of working class
Institutional factor
• These factors include Government policy, labour legislation,
functioning of labour courts, tribunal, trade unions.
• Social, and religious institution also can influence industrial relation
scenario.
• Technological factors:
• Techniques of production, automation, modernization are the
technological factors.
• Lesser the dependency on human capital, the lesser would be
bargaining strength of employee organisation.
Political factor
• Political factor:
• The political system prevailing in the country, political parties, and
their ideologies constitute the political factors.
• The growth and strength of political parties and the methods used in
formulating and implementing policies
• Example in former countries USSR (Union of Soviet Socialist Republics)
where the prevailing political ideology is state socialism, trade unions
are assigned well defined roles and they function within the
parameters of the overall political system
Social and cultural factors
• These factors refer to prevalent social norms, values and beliefs.
• In countries like U.S.A, where the socio- political order exists, the
Government promotes a common Ideology of free enterprise, or
democratic capitalism in such countries collective bargaining is
facilitated by legislation and Government Intervention
Organizational factors
• These include issues like style of management prevailing in enterprise,
its philosophy and value system, organizational climate, health, and
management policies
• Global factors:
• The cover international relations, global conflicts, dominant
economic- political, ideologies, global culture, etc
Importance of Industrial relation
• Reduces industrial disputes:
• Peaceful industrial relations reduces industrial disputes.
• Disputes are reflections of failure of basic human urges or motivations
to secure adequate satisfaction which are cured by good industrial
relation.
High Morale
• Sound industrial relations improve the morale of the employees
• Employees work with great zeal with the feeling in mind the interests
of employer and employees are the same.
• every worker feels he is the co-owner of the organisation and every
employer realizes that the gains of the industry are not for him alone
Collective bargaining
• Good industrial relations are extremely helpful for entering into long
term agreements as regards various issues between labour and
management.
• Fair benefits to workers:
• The workers should get sufficient economic and non economic
benefits to lead a happy life.
• It is possible when relations between workers and management are
coordinal and productivity is high.
Facilitation of change
• Climate of cooperation and confidence make the process change easy
• Hence full advantage of latest inventions, innovations and other
technological advancements can be obtained.
• The smooth industrial are useful to employers and employee.
Mental revolution
• Industrial relations completely transforms the outlook of employers
and employees.
• The process of joint consultations pay way for individual democracy.
This motivate the employee to give their best.
• Workers development:
• New programmes for workers development are introduced in
atmosphere of peace such as training facilities, labour welfare
facilities, etc. it increases efficiency of the workers resulting in higher
and better production at lower costs
Reduced wastage
• Good industrial relations are maintained on the basis of cooperation
and recognition of each other.
• It helps in increasing production.
• Wastage of man, material, and machines are reduced.
• Uninterrupted production.
• The mot important benefit of industrial relations is that it ensures
continuity of production.
• This means continuous employment for all manager to workers
Causes for poor industrial relation
• Nature of work:
• If the nature of work is uninteresting, it causes poor industrial
relation, as employees raise demand which may be much more than
the justified to be compensate behavioral problems arising out of
uninteresting work.
• Technology creates isolation if there is poor design of socio technical
systems
Poor wages and working conditions.
• Often poor wages and working conditions, taken together constitute
an important work factor for poor industrial relation.
• Poor wages are a matter of interpretation which is measured in terms
of equity. The concept of equity is based on comparison.
Defective trade union system
• Defective trade union system prevailing in the country has been one
of the most responsible factor for poor industrial relation in country.
• Politicization, multicipility, inter- union rivalry, lack of constructive
purpose.
• In this scenario trade unions become the means of serving interests
of few leader rather then working in wider interests of employees.
Occupational instability
• Another important factor which sometimes affect industrial relation
in the following circumstances.
• The new job will not give them such satisfaction of earlier job.
• The new job will reduce their wages and seniority structure.
• The new job will require them to undergo some training.
• The new job will change the existing social relationships.
• The new job will reduce opportunities for growth and development
Poor behavioral climate
• The behavioral climate of an enterprise which is made of its culture,
traditions and methods of action may be favourable or unfavorable to
the labour.
• Favourable climate is one which helps him meet his economic, social
and psychological wants, it creates a good image of enterprise in his
mind.
• On the other hand unfavorable climate is one which prevents him
from meeting his various types of need and creates bad image about
the company in his mind
Trade Union
“A trade union is an continuous association of wage earners for the
purpose of maintaining and improving the conditions of their working
lives”.
Importance of trade union
• Protect workers:
• Trade union protect workers from exploitation and help to uphold
health and safety legislation. Trade union can give representation to
workers facing legal action.
• Creates spirit of self reliance and self respect among employees:
• It helps to create self respect among the workers to build up national
character .
• No self respecting workers want gifts or alms but must be paid a fair
share of the results based on actual work produced.
Registration of Trade Unions
• Mode of Registration(Section4)
• “Any number of members of tarde union being not less then the
minimum number determined in accordance with the provisions of
sub section(1A), by subscribing their names to the rules of trade
union and by otherwise complying with the Provisions of this Act with
respect to registration of trade union”
continuation
• If more than one half of the members who apply for registration of
trade union cease to be the members of that trade union or
disassociate themselves from the application by giving notice to the
registrar before registration is granted to the trade union, the
applications shall be deemed to have become invalid.
Application for Registration(Section 5)
• An application for registration of a trade union shall be send to
registrar. The application should be accompanied by a copy of rules of
the trade union and a statement of following particulars, namely:
• The names, occupations, address of the members making the
application;
• The name of trade union and the addresses and occupations of the
office bearers of the trade union; and
continuation
• A general statement of assets and liabilities of the trade union,
prepared in the prescribed form and containing such particulars as
may be required, should be sent with application to registrar, where a
trade union is being in existence for more than one year before
making and application for existence.
Provisions to be contained in the
rules(Section6)
• Every registered union is required to have written rules and
regulations dealing with certain matters specified in schedule II of the
Central Trade Unions Regulations, 1938.
• To get itself registered, trade union should provide the following
information:
• The name of the trade union;
• The whole objects for which trade union has been established;
• The whole purpose for which the general funds of the trade union
shall be applicable, all of which purposes shall be the purposes to
Continuation
• Which all funds are applicable under his Act;
• The maintenance of list of all members of the trade union and
adequate facilities for the inspection thereof by the office bearers
and members of trade unions;
• The payment of subscriptions by members of trade union which shall
not be less than 25 paisa per month per member;
• The manner in which trade union may be dissolved.
Power to ask for alteration of name and
further alterations (Section7)
• The registrar of trade union is empowered to ask the union to alter its
name is identical with that of any registered union. He may refuse to
refuse register the union until such alteration has been made.
• Further hey may ask for any type of information which he feels
necessary for that purpose of seeing that application duly complies
with the provisions of the section 5 and 6 of the act.
Registration (section 8)
• The registrar on being satisfied that the trade union has complied
with all the requirements of the act in regard to registration, will
register the trade union within a period of sixty days from the date of
such compliance, by recording its particular in a register to be
maintained in such form as may be prescribed.
Certificate of registration( section9)
• The certificate of registration is issued by the registrar of trade unions
on registering a trade union which shall be conclusive evidence that
the trade union gas been duly registered under this Act.
Facilitates negotiation between worker and
employer
• As unions are organized body the workers can negotiate with the
employer on the basis of status and self respect.
• Pressure can be brought by them on employer to ensure that the
factories are maintained in healthy condition and hours of work are
arranged conveniently.
Maintenance of wages at uniform level
• Trade union helps to maintain the wages at uniform level in terms of
the actual economic value.
• Helps to negotiate productivity deals:
• Trade union helps to negotiate productivity deals. This means they
help the firm to increase output, this enables the firm to ability to pay
higher wages
Helps accelerated economic development
• Trade union help in accelerated pace of economic development in
many ways
• By helping recruitment and selection of workers.
• By inculcating discipline among workers.
• By enabling settlement of disputes in a rational manner.
Problems of Trade Unions
• Outside political leadership:
• The leadership of most of the trade unions in India has been outside
leadership mainly drawn from political parties.
• Trade unions were invented by political parties.
• Outside political leadership plays a pivotal role in Indian trade union
due to ability of insiders
Multiple unions
• Multiple unions both at plant and industrial levels pose a serious
threat to industrial peace and harmony.
• The situation of multiple unionism is said to prevail when two or
more union in same plant or industry to assert rival claims over each
other and function with overlapping of jurisdiction.
• It affects employee relations.
Union rivalry
• Inter union rivalry
• Inter union rivalry between two or more groups of the same trade
union is said to be inter union rivalry.
• This become advantageous for management, which is followed by the
policy of divide and rule.
• Intra union rivalry:
• Indian trade unionism has also demonstrated the intra union rivalry
coming to the forefront and hampering production and industrial
relations
continuation
• The National Commission on Labour remarked while healthy rivalry
and opposition are necessary for democratic structure of any trade
union, it can have pernicious effects when motivated by personal
considerations.
• labour court should request step in a request for either group by
appropriate state government if the central organisation cannot settle
the dispute.
Small size of union membership
• Size of membership of trade unions determines their strength and
financial soundness which in turn determines the activity taken by
them and their ability to protect employees interests.
• The size of membership of trade unions and successful functioning
are interdependent.
Poor financial position
• Sound financial position is an essential ingredient for the effective
functioning of trade union because it is the process of rendering
services or fulfilling their goals, trade union have for perform a variety
of functions which require enormous financial commitments.
• Inactive functioning:
• Due to poor financial position trade union are not able to function
actively.
• Poor financial position also negatively affects the morale of the labour
which decreases the activity of the union
Victimisation
• The word victimisation means a certain person has become victim, in
other words that has been unjustly dealt with.
• For example: pressurizing an employee to leave the union, treating an
employee unequally.
Codes of Conduct
• Code of conduct or code of discipline is a set of rules and regulations
put in place by organisations to establish exactly what is and what is
not accepted by their employees.
• in simple terms a way in which a employee should behave within the
organisation.
Features of code of conduct
• It is a Government induced self imposed and mutually agreed
voluntary principle of discipline and relations between management
and workers of industry.
• It aims at preventing disputes by providing voluntary and mutual
settlement of disputes.
• Both the central and state Government should rectify any
shortcomings in machinery they constitute for administration of
labour laws.
Objectives of code of conduct
• To ensure that employers and employees recognize each others rights
and obligations.
• To avoid work stoppages.
• To facilitate the free growth of trade unions.
• To maintain discipline in industry.
Principles of code of conduct.
• There should be no strike or lockout without prior notice.
• No unilateral action should be taken in connection with any industrial
matter.
• Actions that disturb cordial relationship should be avoided.
• To ensure better discipline in industry and management.
Factors guiding code of conduct
Honesty and Integrity:
The organisations expect the employees to observe honesty and
integrity.
The employees should not leak company information to third parties.
The work environment should be free from harassment.
Employees should not involve in any kind of concurrent employment
without the knowledge of the employer.
continuation
• The employees should not misuse company resource.
• An employer should provide safe environment.
• Importance of code of conduct:
• Builds organisational image
• Develops meaningful relationships
• Improves performance
Limitations of code of conduct
• Enforceability:
• A code of conduct needs to routinely enforced in order to be effective
• Inequality.
• Code of conduct is often drafted to cover all employee of the
organisation, but it is impossible to treat all employees equally
• Unethical corporate behavior
• Lack of stability.
Approaches to industrial relations
• Psychological approach:
• The psychologists are of the view of problems of industrial relations
are deeply rooted in the perception and attitude of focal participants.
• Human relations approach:
• Human relations are the integration of people into a work situation
that motivates them to work productively.
Gandhian Approach
• Gandhiji had immense faith in goodness of man and believed that
many of the evils of the modern world have been brought about by
wrong systems and not by wrong individuals.
• There are three successful conditions for a successful strike
• The causes of strike should be just.
• There should be no violence.
• Non strikers should never be ill- treated.
Socio ethical approach
• Good industrial relations can be maintained only when both labour
and management realize their moral responsibility.
• Dunlop Approach:
• John Dunlop had developed a systems approach to industrial
relations in the sense it focuses on participants in the process of
environmental forces and the output
Three elements of Dunlop
• Participants in system:
• There are three major participants (union, management,
Government).
• Ideological thinking:
• An ideological linking, to a considerable extent regulates the relations
among parties.
• Environmental force: It is the ground in which participants interact.
Growth of trade union in India
• Period between 1990 and 1918:
• In India first union was by Mr. N.K Lokhande in 1890, and was known
as the Bombay Mills Hands Association.
• After 1890 large number of trade unions were started in the country.
• Example: printers Union Calcutta((1905).
Period between 1919to 1923
• This period saw the real beginning of labour union movement in India.
• During this period large number of trade unions disappeared in India and
several strong and large sized unions came into existence.
• Factors that influenced growth of trade unions in India.
• Political conditions
• Economic conditions
• The ILO
• This led to establishment of All India Trade union Congress(AITUC, 1920)
Period between 1924 and 1935
• The year 1921 saw the emergence of communists in India scene.
• The AITUC was captured by communists.
• Acts such as The Mines act 1923, the trade union act 1926, and the
trade disputes act 1929 was passed in India.
• The passing of Trade union Act gave recognition and rights in India.
Period between 1936 and 1939
• The period witnessed a phenomenal increase in the number of
register Trade unions and their membership.
• The National Trade Union federation and AITUC merged together in
1938.
• The factor that lead to merger was that no political action should be
taken unless it commands two third majority unity which was finally
achieved in 1940 with N.M Joshi becoming General Secretary of the
AITUC.
Period between 1940 and 1946
• The unity was shattered during the second world war because of
ideological difference and mounting cost of living