BA-5015

INDUSTRIAL RELATIONS AND

LABOUR WELFARE
 UNIT I INDUSTRIAL RELATIONS
o Concepts

o Importance-Industrial Relations

o Problems in the Public Sector

o Growth of Trade Unions

o Codes of conduct.

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• CONCEPT OF INDUSTRIAL
RELATIONS
• The term 'Industrial Relations' comprises of two
terms: 'Industry' and 'Relations'. "Industry “refers to
“any productive activity in which an individual (or a
group of individuals) Is (are) engaged".
• By "relations" the relationships that exist within the
industry between the employer and his workmen."

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• Dale Yoder defines it as a "whole field of
relationships that exists because of the necessary
collaboration of men and women in the
employment process of an industry."
• According to J.T. Dunlop, “Industrial relations
are the complex interrelations among managers,
workers and agencies of the government”

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• Functions of Industrial Relations
o Employee – Employer relations
o Wage and salary administration
o Career prospects and promotions
o Retirement benefit and medical coverage
o Redress of grievance and discipline
o Training and development
o Counseling
o Compensation on accidents and Insurance coverage

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Labor – Management Relations
o Recognition of union and “bargaining agent”-
o Collective bargaining
o Industrial disputes and settling machineries
o Welfare measures and benefit scheme-Health and
safety etc.

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o Industrial Peace and Productivity
o Improve union –management relations- Avoid strikes
and go slow tactics-Prevent lock out and Lay off-
Upgrading production technology-Secure employees
cooperation in improving productivity
o Industrial Democracy
o Humanism in industry-Focus on employees-Social
orientation of employees-Public relations-
Participative management-Formation of works
committee and Joint management councils

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• Liaison Functions

• Formulation of industrial relation policy

• Employee attitude survey-

• Liaison with local govt. authorities like labour officers

and factory inspectors-Liaison with state and central
govt. industrial department / labour department-
Participation of judicial and quasi judicial dispute
settlement machinery and conciliation officers-
Participation in labour conference

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• Objectives of Industrial Relations

• To bring better understanding and cooperation between

employers and workers

• To establish a proper channel of communication between

workers and management

• To ensure constructive contribution of trade unions.

• To avoid industrial conflicts and to maintain harmonious

relations.

• To safeguard the interest of workers and the management.

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• To work in the direction of establishing and

maintaining industrial democracy.

• To ensure workers’ participation in decision-making.

• To increase the morale and discipline of workers.

• To ensure better working conditions, living conditions

and reasonable wages.

• To make positive contributions for the economic

development of the country.

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• Causes of poor Industrial Relations:
• Economic causes:
• Poor wages and poor working conditions
• Unauthorized deductions from wages
• Lack of fringe benefits,

• Absence of promotion opportunities,

• Faulty incentive schemes are other economic causes.

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• Organisational causes:

• Faulty communications system,

• unfair practices, non-recognition of trade unions

and labour laws are also some other causes of poor

relations in industry.

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• Social causes:
– Uninteresting nature of work.
– Dissatisfaction with job and personal life.
• Psychological causes:
– Lack of job security,
– Non-recognition of merit and performance,
– Poor interpersonal relations.
• Political causes:
– Multiple unions,
– Inter-union rivalry weaken the trade unions.
– Defective trade unions system prevailing in the
country has been one of the most responsible
causes for industrial disputes in the country.

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• Suggestions to Improve Industrial Relation

• Sound personnel policies:

• Policies and procedures concerning the compensation,
transfer and promotion, etc. of employees should be
fair and transparent.
• All policies and rules relating to Industrial relations
should be fair and transparent to everybody in the
enterprise and to the union leaders.

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• Participative management: Employees should

associate workers and unions in the formulation and

implementation of HR policies and practices.

• Responsible unions: A strong trade union is an asset

to the employer. Trade unions should adopt a

responsible rather than political approach to

industrial relations.

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• Employee welfare: Employers should recognise the
need for the welfare of workers. They must ensure
reasonable wages, satisfactory working conditions,
and other necessary facilities for labour.
Management should have a genuine concern for the
welfare and betterment of the working class.

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• Grievance procedure: A well-established and

properly administered system committed to the

timely and satisfactory redressal of employee’s

grievances can be very helpful in improving

Industrial relations. A suggestion scheme will help

to satisfy the creative urge of the workers.

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• Constructive attitude: Both management and trade
unions should adopt positive attitude towards each
other.
• Management must recognise unions as the spokesmen
of the workers’ grievances and as custodians of their
interests. The employer should accept workers as
equal partners in a joint endeavour for good Industrial
relations.
• Creating a proper communication channel to avoid
grievances and misunderstandings among employees
• Education and training imparted to the employees 18
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IMPORTANCE OF INDUSTRIAL RELATIONS:
• 1. Un interrupted Production
• -Ensures continuity of production-Continuous
employment for all from manager to workers-
Sources are fully utilized.
• 2. Reduction in Industrial Disputes

• Good industrial relation reduces the industrial

disputes-Disputes are fully cured by good industrial
relations-Strikes, lockouts, go-slow tactics, gherao
and grievances.

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3. High morale
• Improves the morale of the employees
• Employees work with great zeal.
• Worker feels that he is a co- owner of the gains of
industry
• The employer in his turn must realize that the
gains of industry should be shared equally and
generously with his workers.

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• 4. Mental Revolution
• Complete mental revolution of workers and employees
• 5. New Programmes

• Training facilities, labor welfare facilities are

introduced-It increases the efficiency of workers.
• 6. Reduced Wastage
• Good industrial relations are maintained on the basis
of cooperation and recognition of each other-Wastages
of man, material and machines are reduced to the
minimum and thus national interest is protected.
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• Scope of IR

• The industrial peace could be attained –

• By setting industrial disputes through mutual

understanding and agreement;

• by evolving various legal measures and setting up

various machineries such as Works Committee, Boards

of Conciliation, Labour Courts etc.

• The industrial democracy could be achieved –

• By allowing workers to take part in management; and by

recognition of human rights.

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 TRADE UNION - CONCEPT

• A trade union is an organization of employees formed

on a continuous basis for the purpose of securing

diverse range of benefits. It is a continuous

association of wage earners for the purpose of

maintaining and improving the conditions of their

working lives.

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• The Trade Union Act 1926 defines a trade union as a

combination, whether temporary or permanent, formed

primarily for the purpose of regulating the relations

between workmen and employers or between workmen

and workmen, or between employers and employers,

or for imposing restrictive condition on the conduct of

any trade or business, and includes any federation of

two or more trade unions. 

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• Sidney and Beatrice Webb states that it is "a

continuous association of wage earners for the

purpose of maintaining and improving conditions of

their working lives."

• DaleYoder,"A trade union is a continuous association

of wage-earners for the purpose maintaining of

improving the conditions of their working lives."

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• TRADE UNION AND ITS IMPORTANCE
• Trade unions help in accelerated pace of economic
development in many ways as follows:
• By helping in the recruitment and selection of
workers.
• By inculcating discipline among the workforce
• By enabling settlement of industrial disputes in a
rational manner
• By helping social adjustments. Workers have to
adjust themselves to the new working conditions, the
new rules and policies.
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• Protection of workers and provision for their
security;
• Improving the wages, conditions of work and
standards of living;
• Raising the status of the workers as a part of
industry and citizen of society;
• Contributing in nation's socio-economic
development

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• Functions of Trade Unions
• Functions relating to members
• Functions relating to organization
• Functions relating to the union; and

• Functions relating to the society.

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o Functions relating to trade union members

o To safeguard workers against all sorts of exploitation

by the employers, by union leaders and by political
parties.
o To protect workers from the atrocities and unfair
practices of the management.
o To ensure a desirable standard to living by providing
various types of social service – health, housing,
educational, recreational, cooperative, etc. and by
widening and consolidating the social security
measures.
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• To remove the dissatisfaction and redress the
grievances and complaints of workers.
• To encourage worker’s participation in the
management of industrial organization and trade
union, and to foster labour-management cooperation.
• To stress the significance of settling disputes through
negotiation, joint consultation and voluntary
arbitration.
• The raise the status of trade union members in the
industrial organization and in the society at large.

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• Functions relating to industrial organization

• To increase production quantitatively and

qualitatively
• To help in the maintenance of discipline.
• To create opportunities for worker’s participation in
management and to strengthen labour-management
cooperation.
• To help in the removal of dissatisfaction and
redressal of grievances and complaints.

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• To promote cordial and amicable relations between
the workers and management by settling disputes
through negotiation, joint consultation and voluntary
arbitration, and by avoiding litigation.
• To create favorable opinion of the management
towards trade unions and improve their status in
industrial organization.
• To facilitate communication with the management.
• To impress upon the management the need to adopt
reformative and not punitive.

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• Functions relating to trade unions organization
• To formulate policies and plans consistent with those
of the industrial organization and society at large.
• To improve financial position by fixing higher
subscription, by realizing the union dues and by
organizing special fund-raising campaigns.
• To preserve and strengthen trade union democracy.
• To train members to assume leadership position.

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• To improve the network of communication between

trade union and its members.

• To resolve the problem of factionalism and promote

unity and solidarity within the union.

• To eradicate casteism, regionalism and linguism

within the trade union movement.

• To keep away from unfair labour practices.

• To save the union organization from the exploitation

by vested interests –personal and political.

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• Functions relating to society

• To render all sorts of constructive cooperation in the

formulation and implementation of plans and policies

relating to national development.

• To actively participate in the development of

programmes of national development, e.g., family

planning, afforestation, national integration, etc.

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• To launch special campaigns against the social

evils of corporation, nepotism, communalism,

casteism, regionalism, linguism, price rise,

hoarding, black marketing, smuggling, inequality,

dowry, untouchability, illiteracy, dirt and disease.

• To create public opinion favourable to

government’s policies and plans, and to mobilize

people’s participation for their effective

implementation.
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Trade unions perform a number of functions: These
functions can be broadly classified into three
categories:
(i)  Militant functions, (ii) Fraternal functions
Militant Functions
The aim of such activities is to ensure adequate
wages, secure better conditions of work and
employment, get better treatment from employers.
• To achieve higher wages and better working
conditions
• To raise the status of workers as a part of industry
• To protect labors against victimization and injustice

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o Fraternal Functions
Trade unions try to foster a spirit of cooperation and
promote friendly industrial relations and diffuse
education and culture among their members.
o To take up welfare measures for improving the
morale of workers
o To generate self confidence among workers
o To provide opportunities for promotion and growth

o To protect women workers against discrimination

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• TRADE UNION MOVEMENT IN INDIA
• Growth of Trade unions- Indian trade union
movement can be divided into three phases
First phase : 1850- 1900
• Second Phase : 1900 -1946
• Third phase : After independence

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o The first phase (1850 to1900)
o The inception of trade unions took place.
o The working and living conditions of the labor were
poor and their working hours were long.
o Capitalists were only interested in their
productivity and profitability.
o The wages were also low and general economic
conditions were poor in industries.
o In order to regulate the working hours and other
service conditions of the Indian textile laborers,
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• The Indian Factories Act was enacted in 1881.
Employment of child labor was prohibited.
• The Indian Factory Act of 1881 was amended in 1891.

• Many strikes took place in the two decades following

1880 in all industrial cities.
• 1885 – Birth of Indian national congress as a political
party
• 1890 – 1900 the first trade union was formed in
Bombay N.K.Lokhande, which known as Bombay Mill-
Hands Association.

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The second phase (1900 to 1946)
• This phase was characterized by the development of
organized trade unions and political movements of
the working class.
• 1919 formation of ILO
• Under the guidance of Mahatma Gandhi,
occupational unions like spinners’ unions and
weavers’ unions were formed At Ahmadabad,
• A strike was launched by these unions under the
leadership of Mahatma Gandhi who turned it into a
satyagrah.
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• These unions federated into industrial union
known as Textile Labor Association in 1920.
• In 1920, the First National Trade union
organization (The All India Trade Union Congress
(AITUC)) was established. In 1926, Trade union law
came up with the efforts of Mr. N.N Joshi that
became operative from 1927.
• 1928, All India Trade Union Federation (AITUF)
was formed by Narayan Malhar Joshi.(N.M.Malhar
joshi)
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• The third phase began with the emergence of
independent India (in 1947).
• The partition of country affected the trade union
movement particularly Bengal and Punjab.
• 1949, four central trade union organizations were
functioning in the country:
• The All India Trade Union Congress,
• The Indian National Trade Union Congress,
• The Hindu Mazdoor Sangh
• The United Trade Union Congress
• Indian national trade Union Congress (INTUC) is the
trade union arm of the Congress Party.
• The AITUC is the trade union arm of the Communist
Party of India.
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• At present there are twelve Central Trade Union
Organizations in India:
• All India Trade Union Congress (AITUC)
• Bharatiya Mazdoor Sangh (BMS)
• Centre of Indian Trade Unions (CITU)
• Hind Mazdoor Kisan Panchayat (HMKP)
• Hind Mazdoor Sabha (HMS)
• Indian Federation of Free Trade Unions (IFFTU)
• Indian National Trade Union Congress (INTUC)
• National Front of Indian Trade Unions (NFITU)
• National Labor Organization (NLO)
• Trade Unions Co-ordination Centre (TUCC)
• United Trade Union Congress (UTUC) and
• United Trade Union Congress - Lenin Sarani (UTUC -
LS)
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• PROBLEMS AND MEASURES TO STRENGTHEN
TRADE UNION
1. Multiple unions
2. Union Rivalry
3. Finance
4. Low membership
5.Heterogeneous nature of labour
6. Lack of Interest
7. Absence of paid office bearers
8. Illiteracy
9. Uneven growth

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• Measures to minimize the evil effects of outside
leadership
• Management should assure that the victimization
will be at zero level, even if the trade unions are led
by insiders.
• Extensive training facilities in the areas of
leadership skills, management techniques and
programmes should be provided to the workers.
Special leave should be sanctioned to the office
bearers.

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o Measures to minimize union rivalry: In view of the evil effects

of inter-union rivalry and the problem of formation of one union

in one industry, it may be necessary to consider the

recommendations of National Commission on Labour, 1969.

The recommendations of NCL to minimize union rivalry are: 

o Elimination of party politics and outsiders through building up

of internal leaders

o Promotion of collective bargaining through recognition of sole

bargaining agents

o Encouraging union security

o Empowering labour courts to settle inter-union disputes.

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REASONS FOR JOINING TRADE UNIONS
o Greater Bargaining Power
o Minimize Discrimination
o Sense of Security

o Sense of Participation
o Sense of Belongingness
o Platform for self expression
o Betterment of relationships

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• INDUSTRIAL RELATION PROBLEMS IN PUBLIC SECTOR

– Bureaucracy of public sector: Generated low profits,

productivity and the low morale of employees, which in

turn has influenced the quality of industrial relations.

– Retrenchment and lay off of surplus workforce Most

of the PSU with a view to overcoming increasing

competition have adopted sophisticated technologies,

which in turn have rendered a sizeable chunk of

workforce obsolete because of its inability to work with

new systems.
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o Poor quality of unions Public sector should function as
an “ideal employer”. But it cannot assume the said role
unless there are “ideal unions”
o Ineffective workers participation in management The
scheme of WPM has failed in most of PSUs
o Absence of bargaining agent in collective bargaining:
Due to multiplicity of rival and politically coloured unions,
it is a difficult to choose a single bargaining agent
o Strikes The Indian PSU workers get their demands
fulfilled by “go slow” and coercive measures like “wild cat
strike” and “Gheraos” etc.
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• SUGGESTIONS FOR IMPROVING INDUSTRIAL RELATIONS

IN THE PUBLIC SECTOR

• Humanization of management: Adopting people-centered

Management strategies-Building effective work team-Respect

affection confidence and cooperation

• Adoption of suitable HRD Programme: Surplus workers must

be provided alternative job within the same organization-

Employees should be kept up to date, through training

programmes.

• Control of union quality: Proper education of workers-Develop

socially responsible trade unions

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• Encouraging WPM: Matters relating to restructuring,
adoption of new technology, diversification
programmes etc. must be discussed with workers
union before taking any final decision.
• Check off System: It is a system where by an
employer regularly deducts a portion of an employee’s
wages to pay union dues or initiation fees.
• Encourage Voluntary Arbitration: Motivating the
unions to adopt voluntary arbitration. A board of
arbitration consisting equal number of representatives
of both management and works.
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CODES OF CONDUCT OR CODES OF DISCIPLINE
• The significance of code of conduct is that each
employee should behave and perform in a way that
preserves the company values and commitments.
• Honesty and integrity: The organization expects the
employees to observe honesty and integrity and such
conduct should be fair and transparent.
• Disclosure of information: The employees should
not disclose the company information to third parties
and other outside organizations.
• Harassment: The work environment should be free
from all kinds of harassments.No physical
harassments like hitting or pushing are acceptable on
part of employees.

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• Outside employment: Employees should not indulge in
to any kind of employment without the prior knowledge of
employer.
• Confidentiality: Employees should protect company’s
confidential information. The financial records and
unpublished data should be kept within the organizations
and should not be spread outside the organization.
• Equal opportunity employer: This factor expects the
employer to be an equal opportunity, that is, no
discrimination should be done on the basis of caste, color,
race, gender, religion or physical disabilities.

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• Misusing company resources: Employees should
not misuse company resources, intellectual
propertyand other facilities.

• Health and safety: An employer should provide a

safe and healthy work environment to its
employees. Proper cleanliness and lightening
should be provided.

• Payment and gifts: The employees should neither

accept nor offer any kind of illegal payments,
donations, remuneration and gifts from outsiders.
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• The Code embodies four parts…
• Part –I: To maintain discipline in industry (both in
public and private sectors): A just recognition by
employers and workers of the rights and
responsibilities, as defined by the laws and
agreements.
• Part – II: To ensure better discipline in industry,
management and union(s) agree
• Settlement of disputes should be utilized.
• That there should be no strike or lock-out without
notice
• That they will establish upon a mutually agreed basis
a grievance procedure.

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• Part-III Management agrees
• Not to increase work-loads.
• Not to support or encourage any unfair labour
practice such as:
• (a) Interference with the right of employees
• (b) Discriminations, restraint or coercion against any
employee
• (c) Victimization of any employee.

• To take prompt actions for (a) settlement of grievance,

and (b) implementation of settlements, awards,
decisions and orders; SABANA ASHMIN.K 58
• Part-IV: Union(s) agrees

• Not to permit demonstrations which are not peaceful and not to

permit rowdyism in demonstration;

• That their members will not engage or cause other employees to

engage in any union activity during working hours.

• To take prompt actions to implement awards, agreements,

settlements and decisions.

• To display the provision of this code in the local language(s); and

to express disapproval and to take appropriate action against

office bearers and members for indulging in action against the

spirit of this code.

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