Relevance of

Employee Relations
in India today
Concept of Employee Relations

Introduction:

 Employee Relations is one of the important problems for the success

of a firm. Employee relations implies an organization’s efforts to
create and maintain a positive relationship with its employees. By
maintaining positive, constructive employee relations, organizations
hope to keep employees loyal and more engaged in their work. 2
 Employee relations includes all the laws, rules, regulation, agreements
awards of court, customs, traditions, as well as policy framework laid
by the government. Thus, IR involves a study of the conditions of
work, mainly the level of wages, Security of employment, Social
conflict, Cultural interactions legal aspects of disputes under laws etc.
Definition:
 According to International Labour Organization (ILO), ” Industrial Relations
deal with either the relationship between the state and employers and
workers organizations or the relation between the occupational organizations
themselves”

 The Indian employee relations system is characterized by three disparate

economies.
3
 Old Formal Economy
 The Informal Economy
 New Formal Economy
 Trade Unions:
Trade Unions play a crucial role in Employee relations in the formal
economy.

 Definition of Trade Union  

  Section 2(h) of the Trade Unions Act, 1926 has defined a trade union
as “ Any combination, whether temporary or permanent, formed
primarily for the purpose of regulating the relations between
workmen and employers, or between workmen and workmen, or 4
between employers and employers, or for imposing restrictive
conditions on the conduct of any trade or business, and includes
any federation of two or more trade unions.”

A trade union puts restriction on the discretion of employers for taking

decisions involving welfare of employees such as wages, lay-off,
transfer, discharge, etc. In certain organizations, unions have become
so strong that they affect every aspect of management and in order to
achieve their goals they resort to methods like collective bargaining ,
lockout , strike etc. for negotiating with the employers.
Participants in Employee Relations

 Employer and their Associations: Employer plays an important role in industrial relations.
They hires the employees, pay them wages, provides allowances, and regulates the working
relations through various rules, regulations and laws and at same time expects the workers to
follow them. The bargaining power of the employers is weakened in comparison to that of trade Employees
Employer
unions, though they have high bargaining power when compared to that of employees. So, they and their
and their
form into associations to equate their bargaining power with trade union, and these associations Associations
Associations
protect the employer by putting pressure on government and trade unions.

Participants in
ER 5
 Employees and their Associations: Workers plays a crucial role in industrial relation. Worker
as a whole includes his working age, Educational background, Social and family background,
Psychological traits, Talents, Skills, Culture, Attitude towards others work. Workers form into
their associations called “Trade Unions” to get their problems solved. The trade unions work for
workers economic interest through collective bargaining by bringing the pressure on the
management through economic and political strategies.
State/
Government

State/Government: Government plays a balancing role in industrial relations. Government has its
influence on industrial relations through industrial relations policy, Labour policy, Labour law
implementation, Acting as a mediator in the process of conciliation and adjudication. Government
regulates the behaviour of both the employer association and workers organizations.
Why Employee Relation is Important

Employee Engagement

Employee Satisfaction

Employee Productivity

Employee Loyalty

Employee Advocacy

Employee Experience

Employee Empowerment
Why It Is Not Relevant:

Are They Engaged?

Are they going to stay for a longer

period?

Boredom?

Collateral Damage?

Recognition?

Career Advancement?
So What’s The Solution?

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