INDUSTRIAL

RELATIONS AND
LABOUR LAWS
 By Prin. Rajhans Gaikwad

[B.Sc, MSW (TISS), LLM, NET, SET,

PGDLL&LW, PGDCL, PGDHR]
INDUSTRIAL RELATIONS
 The term ‘Industrial Relations’ comprises 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” we mean “the relationships that exist within the industry
between the employer and his workmen.”.
 The term industrial relations explains the relationship between
employees and management which stems directly or indirectly from the
union-employer relationship.
DEFINITIONS
 J.T. Dunlop defines industrial relations as “the complex interrelations
among managers, workers and agencies of the governments”.
 According to Dale Yoder “industrial relations is the process of
management dealing with one or more unions with a view to negotiate
and subsequently administer collective bargaining agreement or labour
contract”.
IMPORTANCE OF
INDUSTRIAL
RELATIONS
 UNINTERRUPTED
PRODUCTION
 The most important benefit of industrial relations is that this ensures
continuity of production. This means, continuous employment for all
from managers to workers.
 The resources are fully utilized, resulting in the maximum possible
production.
 There is an uninterrupted flow of income for all.
 The smooth running of the industry is of vital importance for several
other industries; other industries if the products are intermediaries or
inputs; to exporters if these are export goods; to consumers and workers
if these are goods of mass consumption.
 REDUCTION IN
INDUSTRIAL DISPUTES
 Good industrial relations reduce the industrial disputes. Disputes are
reflections of the failure of basic human urges or motivations to secure
adequate satisfaction or expression which are fully cured by good
industrial relations.
 Strikes, lockouts, go-slow tactics, gherao and grievances are some of the
reflections of industrial unrest which do not spring up in an atmosphere
of industrial peace.
 It helps promoting co-operation and increasing production
 HIGH MORALE
 Good industrial relations improve the morale of the employees.
Employees work with great zeal with the feeling in mind that the
interest of employer and employees is one and the same, i.e. to increase
production.
 Every 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 are not for
him along but they should be shared equally and generously with his
workers.
 In other words, complete unity of thought and action is the main
achievement of industrial peace. It increases the place of workers in the
society and their ego is satisfied. It naturally affects production because
mighty co-operative efforts alone can produce great results.
 MENTAL REVOLUTION
 The main object of industrial relation is a complete mental revolution of
workers and employees.
 The industrial peace lies ultimately in a transformed outlook on the part
of both. It is the business of leadership in the ranks of workers,
employees and Government to work out a new relationship in
consonance with a spirit of true democracy.
 Both should think themselves as partners of the industry and the role of
workers in such a partnership should be recognized.
 On the other hand, workers must recognize employer’s authority. It will
naturally have impact on production because they recognize the interest
of each other.
 REDUCED WASTAGE
 Good industrial relations are maintained on the basis of cooperation and
recognition of each other. It will help increase production.
 Wastage of man, material and machines is reduced to the minimum and
thus national interest is protected.
 Thus, it is evident that good industrial relations are the basis of higher
production with minimum cost and higher profits. It also results in
increased efficiency of workers.
 New and new projects may be introduced for the welfare of the workers
and to promote the morale of the people at work.
 An economy organized for planned production and distribution, aiming
at the realization of social justice and welfare of the massage can
function effectively only in an atmosphere of industrial peace.
 If the twin objectives of rapid national development and increased social
justice are to be achieved, there must be a harmonious relationship
between management and labour.
APPROACHES TO
INDUSTRIAL
RELATIONS
 UNITARY APPROACH
 The unitary approach is based on the strong argument that there is only one
source of authority i.e., the management, which owns and controls the
dynamics of decision-making in issues relating to negotiation and bargaining.
 Under the unitary approach, industrial relations are grounded in mutual
cooperation, individual treatment, teamwork, and shared goals.
 Workplace conflict is seen as a temporary aberration, resulting from poor
management, from employees who do not mix well with the organizational
culture.
 Unions cooperate with the management and the management’s right to
manage is accepted because there is no ‘we-they’ feeling.
 The underlying assumption is that everyone benefits when the focus is on
common interest and the promotion of harmony. Conflict in the form of
strikes is not only regarded as necessary but destructive.
 PLURALISTIC APPROACH
 The pluralistic approach totally departs from the unitary approach and
assumes that the organization is composed of individuals who form
distinct groups with their own set of aims, objectives, leadership styles,
and value propositions.
 The organization is multi-structured and there will be continued tension
due to conflicts within and between the various sectional groups. In
contrast to the unitary approach, the pluralistic approach considers the
conflict between management and employees as rational and inevitable.
 The pluralistic approach perceives:

i. Organization as coalitions of competing interests, where the role of the

management is to mediate amongst the different interest groups.
ii. Trade unions as legitimate representatives of employee interests.
iii. Stability in industrial relations as the product of concessions and
compromises between management and unions.
 MARXIST APPROACH
 Also known as the ‘Radical Perspective’, the Marxist approach is based on the proposition
that the economic activities of production, manufacturing, and distribution are majorly
governed by the objective of profit. Marxists, like the pluralists, regard conflict between
employers and employees as inevitable. However, pluralists believe that the conflict is
inevitable in all organizations.
 Marxists see it as a product of the capitalist society. Adversarial relations in the workplace are
simple one aspect of class conflict. The Marxist approach, thus, focuses on the type of society
in which an organization functions.
 Conflict arises not only because of competing interests within the organization, but because of
the division within society between those who won or manage the means of production and
those who have only their labour to offer. Industrial conflict is, thus, seen as being
synonymous with political and social unrest.
 The Marxist approach argues that for social change to take place, class conflict is required.
Social change initiates strong reactions from the worker class and bridges the gap between the
economically settled owners of factors of production and the economically dependent worker
class. This approach views pluralism as unreal and considers industrial disputes and class
conflicts as inevitable for the circular functioning of an industry
 SYSTEMS APPROACH
 Prof. John T. Dunlop developed Systems Approach in “Industrial Relations Systems”
in 1958.
 Dunlop defines an industrial relations system in the following way – An industrial
relations system at any one time in its development is regarded as comprised of certain
actors, certain contexts, an ideology, which binds the industrial relations system
together, and a body of rules created to govern the actors at the workplace and work
community.
 There are three sets of independent variables – the ‘actors’, the ‘contexts’ and the
‘ideology’ of the system. The actors are –
(a) hierarchy of managers and their representatives in supervision,
(b) a hierarchy of workers (non-managerial) and any spokesmen, and
(c) specialised governmental agencies (and specialised private agencies created by the first
two actors) concerned with workers, enterprises, and their relationships.
 The contexts are the environment in which the actors are interacting with each other at
various levels and the ideology is their philosophy of industrial relations
 GANDHIAN APPROACH
 Gandhiji held definite views regarding the fixation and regulation of wages, organisation
and functions of trade unions, necessity and desirability of collective bargaining, use and
abuse of strikes, labour indiscipline, workers’ participation in management, conditions of
work and living, and duties of workers.
 He insisted on recognising each individual worker as a human being. He believed in
nonviolent communism, going so far as to say that “if communism comes without any
violence, it would be welcome.”
 Gandhiji realised that relations between labour and management can either be a powerful
stimulus to economic and social progress or an important factor in economic and social
stagnation.
 According to him, industrial peace was an essential condition not only for the growth and
development of the industry itself but also in a great measure, for the improvement in the
conditions of work and wages. At the same time, he not only endorsed the workers’ right
to adopt the method of collective bargaining but also actively supported it.
 He advocated voluntary arbitration and mutual settlement of disputes. He also pleaded for
perfect understanding between capital and labour, mutual respect, recognition of equality,
and strong labour organisation as the essential factors for happy and constructive
industrial relations. For him, means and ends are equally important.
 HUMAN RESOURCE
MANAGEMENT APPROACH
 The term, human resource management (HRM) has become increasingly used
in the literature of personnel/industrial relations.
 The term has been applied to a diverse range of management strategies and,
indeed, sometimes used simply as a more modern, and therefore more
acceptable, term for personnel or industrial relations management.
 Some of the components of human resource management are –
(a) human resource organisation; (b) human resource planning;
(c) human resource systems; (d) human resource development;
(e) human resource relationships; (f) human resource utilisation;
(g) human resource accounting; and (h) human resource audit.
 This approach emphasises individualism and the direct relationship between
management and its employees. Therefore, it questions the collective
regulation basis of traditional industrial relations.
COLLECTIVE
BARGAINING
 COLLECTIVE BARGAINING
 The term collective bargaining refers to the process of negotiation that
takes place between workers or labourers and their employers on the
terms of their contracts.
 In most instances, the labourers are represented by a trade or labour
union. This is usually done in order to achieve certain demands and
rights of the labourers, namely those pertaining to working hours,
salaries, working conditions, etc.
 This form of industrial dispute resolution has been revolutionary for
labour relations in the Indian industries, both private and public.
 This is because conflicts in the area of commerce and business are
inevitable and it is not practical to resolve all such disputes through
courts.
 Hence, collective bargaining has become a suitable alternative to
adjudicate industrial disputes
 DEFINITION
 According to Article 2 of the Collective Bargaining Convention, 1981
(No. 154) of the International Labour Organisation, “collective
bargaining extends to all negotiations which take place between an
employer, a group of employers or one or more employers’
organisations, on the one hand, and one or more workers’ organisations,
on the other, for
 (a) determining working conditions and terms of employment; and/or
 (b) regulating relations between employers and workers; and/or
 (c) regulating relations between employers or their organisations and workers
or workers’ organisations”.
 AIMS OF COLLECTIVE
BARGAINING
 Upholding industrial democracy
 Ensuring equality and justice for socially and economically backwards
groups
 Protecting the working class from exploitation
 Meeting the legitimate expectations of labourers regarding the work
they have undertaken
 ADVANTAGES OF
COLLECTIVE BARGAINING
 Being a part of a group helps employees to voice their demands and
negotiate better with their employers. It is harder for employers to
dismiss the demands of a unified large group of employees or a trade
union in comparison with individual employees.
 It helps to improve the workplace conditions for employees.
 It makes the rights and obligations of both employers and employees
clear.
 DISADVANTAGES OF
COLLECTIVE BARGAINING
 It is a long complicated process as the union of employees and the
employers go back and forth while negotiating. It is time-consuming
and requires both parties to take time off of their work.
 Another issue that stands as a hindrance to the effectiveness of this
process is the presence of multiple trade unions in India. Sometimes the
interunion rivalry gets in the way of negotiating for better working
conditions.
 Most trade unions are also backed by or associated with a political
party. Oftentimes, it is the decision of the party that influences the trade
union’s demands.
 There is no way to determine which union represents the employees.
INDIAN
STATUTES AND
CASE LAWS
RECOGNIZING
COLLECTIVE
BARGAINING
 INDUSTRIAL DISPUTES
ACT, 1947
 This Act was enacted for the purpose of governing the investigation and
settlement of industrial disputes. According to Section 18 of the Act,
any settlement other than a conciliation, which is arrived at through an
agreement by an employer and his employees shall be binding on them.
This essentially means that Section 18 recognises industrial dispute
settlement through collective bargaining.
 In the case of Karnal Leather Karamchari Sanghatan v. Liberty
Footwear Company (Regd.) and Ors. (1990), the Supreme Court laid
down that the Industrial Disputes Act, 1947 was enacted for the purpose
of securing social justice by means of collective bargaining. The court
further stated that arbitration comes within the purview of statutory
tribunals. The workers involved must be aware of what is presented
before the arbitrator and must be able to share their arguments and
claims before him. Even though it is the labour union that helps to
resolve the disputes, the labourers must be involved in the process and
suggest remedies.
 TRADE UNION ACT, 1926
 This Act deals with the registration, rights, liabilities and immunities of
a trade union. The most important function of a trade union is to
regulate the relationship between an employer or management and its
employees.
 In the case of D.N. Banerjee v. P.R. Mukherjee (1952), Justice Chandra
Shekhar Aiyer observed that due to the increased importance of capital
and labour in the modern-day world, they have organised themselves
into groups to settle disputes. This is based on the theory that unity is
strength and collective bargaining is a result of that.
 THE INDUSTRIAL
EMPLOYMENT (STANDING
ORDERS) ACT, 1946
 ‘Standing Order’ in this Act is defined in Section 2(g) as the rules
related to matters such as classification of workmen, attendance,
conditions of granting leaves, manner of intimation to workers about
work and wage-related details, etc. As per Section 3 of the Act, the
employer must first submit the draft of the standing order to the
Certifying Officer, and must also conform to the model set for the
standing order as far as possible. After that, the Officer forwards copies
of the draft to the trade union or to the workmen. If there is no trade
union for seeking objections, the officer must give both parties an
opportunity of being heard and then certify the standing order with
necessary modifications and send its copies to both parties. Here, it is
apparent that the certifying officer acts as the negotiator and the process
of framing a standing order involves both employer and employees.
This provision essentially employs the method of collective bargaining.
 THE CONSTITUTION OF
INDIA, 1950
 Several provisions enumerated in the Indian Constitution, particularly
the fundamental rights and the directive principles of state policy justify
the concept of collective bargaining. Firstly, Article 19 of the Indian
Constitution allows every Indian citizen to form an association, which
in turn covers the right to form a trade union as well. In Article 43 A,
the state is permitted to make laws that encourage workers to take part
in the management.
 INDUSTRIAL DISPUTES
ACT, 1947
 This Act was enacted for the purpose of governing the investigation and
settlement of industrial disputes. According to Section 18 of the Act, any
settlement other than a conciliation, which is arrived at through an agreement
by an employer and his employees shall be binding on them. This essentially
means that Section 18 recognises industrial dispute settlement through
collective bargaining.
 In the case of Karnal Leather Karamchari Sanghatan v. Liberty Footwear
Company (Regd.) and Ors. (1990), the Supreme Court laid down that the
Industrial Disputes Act, 1947 was enacted for the purpose of securing social
justice by means of collective bargaining. The court further stated that
arbitration comes within the purview of statutory tribunals. The workers
involved must be aware of what is presented before the arbitrator and must be
able to share their arguments and claims before him. Even though it is the
labour union that helps to resolve the disputes, the labourers must be involved
in the process and suggest remedies.
 This Act was enacted for the purpose of governing the investigation and
settlement of industrial disputes. According to Section 18 of the Act, any
settlement other than a conciliation, which is arrived at through an agreement
by an employer and his employees shall be binding on them. This essentially
means that Section 18 recognises industrial dispute settlement through
collective bargaining.
 In the case of Karnal Leather Karamchari Sanghatan v. Liberty Footwear
Company (Regd.) and Ors. (1990), the Supreme Court laid down that the
Industrial Disputes Act, 1947 was enacted for the purpose of securing social
justice by means of collective bargaining. The court further stated that
arbitration comes within the purview of statutory tribunals. The workers
involved must be aware of what is presented before the arbitrator and must be
able to share their arguments and claims before him. Even though it is the
labour union that helps to resolve the disputes, the labourers must be involved
in the process and suggest remedies.