Industrial Relations

What is IR?
Industrial Relations: “Concerned with the relationship
between management and workers and role of
regulatory mechanism to resolve disputes between
employer and workers”

•IR is concerned with the system, rules and procedures

used by unions and employers to determine the reward
for effort
•To regulate other conditions of employment to protect

the interests of the employed and their employers,

•To regulate ways in which employers treat their
employees
 Nature of IR

•IR covers

1)Collective bargaining

2)Role of management, unions and government

3)Mechanism of resolving disputes

4)Grievances and disciplinary policy and

practices

5)Labour legislation
 Importance of IR

•Moral dimension

•IR protect right of managers

•Handling disciplinary proceedings

•Fairness in practices and working

relations
Maruti Suzuki Plant and IR
 Let us understand the background of industrial relations at Maruti
Udyog since its inception.
In 1983, Maruti Udyog Limited had few problems in its labour
relationships.
 The locally hired workforce accepted the Japanese work culture and
the modern manufacturing processes.
In 1997, with the changed ownership, Maruti came under government
control.
From there on, the conflicts between the United Front Government
and Suzuki started.
In 2000, a major IR issue began and employees of Maruti Udyog
went on an indefinite strike, demanding major revisions of their
wages, incentives and pensions.
Employees resorted to ‘slowdown’ in Oct 2000, to force a revision
to their pay and perks.

After the elections were held and a new central government led
by the NDA alliance took command, pursuant to the
disinvestments policy, the new administration proposed to sell
part of its stake in Maruti Suzuki in a public offering through a red
herring perspective.
The workers opposed this public offer plan on the
grounds that the company will lose a major business
advantage of being subsidised by the Government and
that the workers are better protected under the Govt
control.
The cold war between the union and the management
continued through 2001. The management did not pay
heed to the union demands because of increased
competition in the automotive sector and lower profit
margins.
The central government prevailed and privatized Maruti
Udyog in 2003. Suzuki of Japan became the majority
owner of Maruti Udyog Limited with 51% share with the
public holding 12.5%.

In late 2011 and early 2012, labour unrest started in the
Manesar Plant – workers demanding right to establish
an alternative labour union due to non alignment of a
large section of workers with the existing union.
Sneaked by golden handshake scheme.

On 18 July 2012, Maruti’s Manesar plant was hit by violence as

workers at one of its auto factories attacked supervisors,
engineers and other management personnel and burnt and killed
a senior HR executive, injured 100 managers, including two
Japanese expatriates. The mob also injured nine policemen.
The company’s General Manager of Human Resources had both
arms and legs broken by his attackers, unable to leave the
building that was set ablaze, and he was charred to death.
The incident is the worst-ever for Suzuki since the company
began operations in India in 1983 and one of the most heinous of
industrial crimes in the history of India.

FIRs were filed , Arrest was made.

Lockdown was declared.

Causes of the 2012 Labour
Unrest:
Wage disparities between the regular and contracted
workers. Uncertainty in the minds of the contracted
workers regarding their future as employees of Maruti
Suzuki.

Lack of trust between the HR staff and the workers.

Lack of connectivity and active communication

between the management and workers.
Difficulties in Growth of IR
•Low Wage

•Ignorance and Illiteracy

•Heterogeneity

•Absenteeism
 Approaches To IR

Unitary approach

Pluralistic approach Industrial Relations

Marxist approach
 Approaches To IR
Unitary Approach

•Based on mutual cooperation, individual treatment, shared goals

and team work

•Everyone gains when there is common interest and goals and

promotion of harmony

•Conflict is destructive and unnecessary

•Direct negotiations with employees

•No need to involve government, and unions to resolve conflict

 Approaches To IR
Pluralistic Approach

•There is competing interests, management’s role is to act as

mediator amongst competing interests groups

•Trade unions are representative of employee interests

•Concessions and compromised between management and

unions

•Conflict between management and union is good for productive

work environment and innovation

•Unions balance interest of employees and employer

•Government interferes in form of regulations to protect the right

of society and employees

•Crux: Conflict is inevitable and needs to be contained with in the

social mechanism of conciliation, collective bargaining, and
arbitration
 Approaches To IR
Marxist Approach

•Conflict is inevitable but it is because of capitalist society

•Conflict is not because of competing interests of employees and

management but division with in society between people who own
resources and people who offer labour

•Industrial conflict is because of social and political unrest

•Trade unions are forum to react to capitalism exploitation and

bring social revolution

•Trade unions make employees (labour) position more strong in

capitalistic society

•All strikes are legitimate, fair and political

•Regard state interventions through legislation is to protect the

owners
 Parties to IR

Employers
Employees

Employer-
Employees Employers
employee relations
Association Associations

Government Courts and

Tribunal
 Factors Affecting IR

Internal Factors

1.The attitude of management to unions and employees

2.The attitude of employees and unions to management
3.The attitude of employees to unions
4.The strength of unions
5.The extent to which agreed and effective procedures and rules exist
within company to resolve disputes and handle disciplinary matters
6.The competence of managers to deal with employees issues

External
1.Strength and effectiveness of employers’ associations
2.The pay and employment situations at local and national level
3.The legal framework in which IR operates
Impact of Covid 19 on Industrial
Relations
Best IR Practices

Australia

USA
Indian Position
Suspension of Labour Laws by
some States.

Major Changes by Uttar Pradesh

and Madhya Pradesh