Introduction to Industrial

Relations
Lecture 1& 2
Meaning & Concept

The term “Industrial Relations” is comprised 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” we mean “the relationships that exist
within the industry between the employer and his
workmen.”
 Meaning & Concept

• The term industrial relations explains the relationship between

employees and management which stem directly or indirectly from
union-employer relationship.

• Industrial relations are the relationships between employees and

employers within the organizational settings.

• The relationships which arise at and out of the workplace generally

include the relationships between individual workers, the relationships
between workers and their employer, the relationships between
employers, the relationships employers and workers have with the
organizations formed to promote their respective interests, and the
relations between those organizations, at all levels.

• The term industrial relations has a broad as well as a narrow outlook.

Originally, industrial relations was broadly defined to include the
 Definitions

The Industrial Relation relations also called as labor -

management, employee employers relations.

1) “Employer-employee relationships that are covered

specifically under collective bargaining and industrial
relation laws”.

2) “Concerned with the systems, rules and procedures used by

unions & employers to determine the reward for effort & other
conditions of employment.”
OBJECTIVES OF IR

• Employee empowerment: provide an opportunity to the

workers to participate in management and decision
making process.

• Productivity: raise productivity in the organization to

curb the employee turnover and absenteeism.

• Bargaining capacity: to improve the bargaining capacity

of the workers through trade unions.

• Discipline: to ensure discipline in the organization and

in the industry.
OBJECTIVES OF IR

• Labor-management interest: to safeguard the interests

of the labor and the management by preventing one of
the players from getting a strong hold over the other.

• Mutual cooperation: to develop & Secure mutual

understanding & good relationships among all the players
in the industrial set-up.

• Resolve and preventing industrial conflict: to maintain

industrial peace & harmony by preventing industrial
conflicts.
OBJECTIVES OF IR

• Economic condition: improvement of economic

conditions of workers.

• Standard of living: to improve the standard of living of

the average worker by providing basic and standard
amenities.

• Basic framework: to provide a basic framework for the

management & the employees to resolve their
differences.
3 Actors of IR

1
EMPLOYEES

2
STATE

3
EMPLOYER
Role of Three Actors to IR

Role of EMPLOYEES
To redress the bargaining advantage on one-to-one
basis

To secure better terms and conditions for their
members

 To obtain improved status for the worker in his/her

work

 To increase implementation of democratic way of

decision making at various levels
Role of Three Actors to IR

Role of EMPLOYERS
Contd.

 Creating and sustaining employee motivation

 Ensuring commitment from employees

 Negotiating terms and conditions of employment with TU

leaders

 Sharing decision making with employees

Role of Three Actors to IR

Role of STATE
 Labor policies

 Labor laws

 Industrial tribunals

 Wage boards

 Industrial relations policy

 Approaches to IR

There are mainly three approaches to IR

1. Unitary approach

2. Pluralistic Approach

3. Marxist Approach

4. Systems Approach
 1.Unitary Approach

IR is grounded in mutual co-operation, individual treatment,

team work and shared goals.
• Union co-operate with the mgt. & the mgt.’s right to
manage is accepted because there is no „ we they
feeling‟

• Assumption: Common interest & promotion of harmony

• No strikes are there.

• It's a reactive IR strategy.

• They seek direct negotiations with employees.

2.Pluralistic Approach

• It perceives:
• Org. as a coalitions of competing interest.
• TU as legitimate representatives of employee interests.
• Stability in IR as the product of concessions and
compromises between mgt. & unions.
• Conflict between Mgt. and workers is understood as
inevitable.
• Conflict is viewed as conducive for innovation and
growth.
• Strong union is necessary.
3.Marxist Approach

Regard conflict as Pluralists…

• Marxists see conflict as a product of the capitalist
society.

• Conflict arises due to the division in the society

between those
who own resources and those who have only labor to
offer.

• For Marxist all strikes are political.

• He regard state intervention via legislation & the

creation of
 4.Systems approach

• The system approach was developed by Dunlop of Harvard University

in 1958.

• According to this approach, individuals are part of an ongoing but

independent social system.

• The behavior, actions and role of the individuals are shaped by the
cultures of the society.

• The three elements of the system approach are input, process and
output.

• Society provides the cue (signal) to the individuals about how one
should act in a situation.
 Systems approach

• The institutions, the value system and other

characteristics of the society influence the process
and determine the outcome or response of the
individuals. The basis of this theory is that group
cohesiveness is provided by the common ideology
shaped by the societal factors.
Dunlop’s Systems Approach

INPUTS
Actors PROCESSES
(Employees, Bargaining
Employers,
State)
Conciliation OUTPUT
Context Arbitration Rules
(Tech, Market, Adjudication
Power Legislation
Indeology)

Feedback
 Causes of poor IR

The main reasons are as follows:

 An attitude of contempt towards the workers on the part of
the management.
 Inadequate fixation of wages or improper wages.
 Unhealthy working conditions at the workplace.
 Desire of workers for higher bonus, wages or daily
allowances.
 Desire of employers to pay as little as possible to its
workers.
 Lack of human relations skills on the part of supervisors and
managers.
 Causes of poor IR

 Inadequate welfare facilities.

 Dispute on sharing the gains of productivity.
 Retrenchment, dismissal and lockouts by the management.
 Strikes by the workers.
 Inter-union rivals.
General economic and political environment such as rising
prices, strikes by others and general indiscipline having their
effect on the employees attitudes.
 Mental inertia on the part of the management.
Trade unionism
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
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.”
 Then this definition talks about three relationships. They are
relationship between the:

 Workmen and workmen Workmen

 and employers Employers and
 employers.
 It is an organisation formed by employees or workers.

 It is formed on a continuous basis. It is a permanent body and

not a casual or temporary one.

 It is formed to protect and promote all kinds of interests –

economic, political and social-of its members. The dominant
interest with which a union is concerned is, however,
economic.

 It includes federations of trade unions also.

 It achieves its objectives through collective action and group

effort
 To improve the economic lot of employees by securing for
them better wages.
 To secure better working conditions for the workers.

 To secure bonus for the employees from the profit of the concern,

 To resist schemes of the management which reduce employment, e.g.,

rationalisation and automation.

 To secure welfare of employees through group schemes which give benefit to

every employee.

 To protect the interests of employees by taking active participation in the

management.

 To secure social welfare of the employees.

 To secure organisational stability, growth, and leadership.

Broadly speaking, trade unions perform two types of functions, viz.,

 Militant Functions. One set of activities performed by trade unions

leads to the betterment of the position of their members in relation
to their employment. The aim of such activities is to ensure
adequate wages, secure better conditions of work and employment,
get better treatment from employers, etc. When the unions fail to
accomplish these aims by the method of collective bargaining and
negotiations, they adopt an approach and put up a fight with the
management in the form of so-slow, strike, boycott, gherao, etc.
Hence, these functions of the trade unions are known as militant or
fighting functions.
 Fraternal Functions. Another set of activities performed by trade
unions aims at rendering help to its members in times of need, and
improving their efficiency. Trade unions try to foster a spirit of
cooperation and promote friendly relations and diffuse education and
culture among their members. They also arrange for legal assistance to
its members, if necessary. Besides, these, they undertake many welfare
measures for their members, e.g., school for the education of children,
library, reading-rooms, in-door and out-door games, and other
recreational facilities. Some trade unions even undertake publication
of some magazine or journal. These activities, which may be called
fraternal functions, depend on the availability of funds, which the
unions raise by subscription from members and donations from
outsiders, and also on their competent and enlightened leadership.
Another broad classification of the functions of unions may be as
follows

 Intra-mural activities. These consist of those functions of the unions

that lead to the betterment of employment conditions such as
ensuring adequate wages and salaries, etc. for which the methods
adopted may be collective bargaining, negotiations, strikes, etc.

 Extra-mural activities. These activities help the employees to

maintain and improve their efficiency or productivity, e.g.,
measures intended to foster a spirit of cooperation, promote friendly
relations, and diffuse education among members and various other
types of welfare measures.
 Political activities. Modern trade unions also take up
political activities to achieve their objectives. Such activities
may be related to the formation of a political party or those
reflecting an attempt to seek influence on public policy
relating to matters connected with the interests of working
class.
 Lack of education makes the workers narrow-minded, and
prevents them from taking long-term views. Thus, anything,
which does not result in an immediate reward, becomes
unattractive to them. This attitude is responsible for many
strikes and lock-outs in industrial concerns.

 Trade unions may not welcome rationalization and improved

methods of production for the fear that some of the workers will
be put out of work. Therefore, they resort to go slow policy that
retards industrial progress.
 When labor unions strike because of illogical grounds,
incalculable losses occur to producers, community and the
nation. These are harmful to the workers also. They suffer
because of the loss of wages.

 They create artificial scarcity of labor by demanding that only

union personnel should be employed.

 By undue insistence on the payment of standard rates of wages,

they have only leveled down the earnings of the efficient workers.
 Plant level Unions: The first level in the structure from below is
the plant level union. This comprises the unions in one
organisation or factory. Please note that only seven members are
required to form a union. This has lead to multiple unions in one
factory. (We will discuss the details of this aspect in the problems
faced by unions in India).

 Local Level federations. This is the second level in the structure from
below. The local trade union federation holds together the plant level
unions at the local level in a particular craft and industry. These local
level federations might be affiliated to either some regional level or
national level federation or these may be independent.
 Regional level federations. These are the organisations of
all the constituent unions in a particular state or region.

 National federations. These are national level bodies to which

plant level unions, local unions or regional level unions may get
affiliated. These are the apex bodies at the top of the structure.
They act as coordinating bodies. These national federations may
have their own regional or state level coordinating bodies to
which the plant level unions may get affiliated.
 Uneven Growth. The trade unionism in India is characterised by
uneven growth, both industry-wise and area-wise. Trade unions
are popular in big industries and the degree of unionisation
varies widely from industry to industry. Besides, trade union
activities are concentrated in a few states and in bigger industrial
centers mainly due to concentration of industries in those places.

 Limited Membership. The number of trade unions in India has

increased considerably. But this has been followed by the
declining membership per union.
 Multiplicity of Unions. There exist several trade unions in the same
establishment. The multiplicity of unions is the result of outside leadership
and labour laws. The law permits and gives sanctity to small unions. Any
seven persons can form a union under the Trade Unions Act, 1926. This Act
confers rights on such a union. It is allowed under the Act to raise disputes,
file suits, go to conciliation and even bargain with employers. Therefore,
small sections of workers are encouraged to form separate Unions. There is
no restriction on the number of unions to be registered in one
establishment.

 Outside Leadership. Trade unions in India are led largely by people who
themselves are not workers. These outsiders are politicians, intellectuals
and professionals having no experience of work in industry. Outsiders
continue to dominate the trade unions to advance their personal interests.
 Financial Problems. The financial position of the trade unions is
weak because their average yearly income is very low and
inadequate. The subscription rates are very low. Under conditions
of multiplicity of unions, a union interested in increasing its
membership figures keeps the subscription rate unduly low. As a
result, the funds with the unions are inadequate and they cannot
undertake welfare programmes for their members. Another
reason for the weak financial position of union is that large
amounts of subscription dues remain unpaid by the workers.
Besides this, unions do not have proper staff and organisation to
collect subscriptions.
 Indifferent Attitude of Workers. In India, a large number of
workers have not joined any union. Moreover, all the members
of the trade unions do not show interest in their affairs. The
attendance at the general meetings of the unions is very low.
Under such circumstance, trade unionism cannot be expected
to make much progress.
 One Union in One Industry: Multiplicity of unions in the same
plant leads to inter-union rivalry that ultimately cuts at the root
of the trade union movement. It weakens the power for
collective bargaining and reduces the effectiveness of workers in
securing their legitimate rights. Therefore, there should be only
one union in one industry.
 Paid Union Officials: Generally, the trade unions avail the
services of the honorary workers due to lack of funds. The
practice should be stopped because honorary office bearers
cannot do full justice to the task entrusted to them because of
lack of time at their disposal. Suppose that you are asked to do
something in the office, which requires a lot of responsibility.
You are not offered any thing in return. Of course the
motivational levels will come down unless and until you are a
very passionate or a committed person. The same applies to
the officials of the unions. Therefore, paid union officials
should be employed who are persons of proven integrity and
who are able to evaluate the demands of workers so that they
may negotiate with employers on equal footing.
 Development of Leadership from Within: It is of crucial
importance that trade unions are managed by the workers,
and not by outsiders. Leadership should be developed from
within the rank and file of the workers.

 Recognition of Trade Unions. Till recently, the employers

refused recognition to the trade unions either on the basis that
unions consisted of only a minority of employees or two or more
unions existed.
 Reasons For Joining
Trade Unions
1. Greater Bargaining Power
2. Minimize Discrimination
3. Sense of Security
4. Sense of Participation
5. Platform for self expression
7. Betterment of relationships
 REGISTRATION OF TRADE UNIONS

Power to
Provisions call for
to be further
Appointment Application Certificate
Mode of contained in particulars
of for Registration of
registration the rules of and to
Registrars. registration registration
a Trade require
Union alterations
of names

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 REGISTRATION OF TRADE UNIONS
Can be central or state
government (in relation to
trade union’s objects are
1) Appointment of registrars(Sec. 3) confined)

-Appointed by “appropriate Government”

- appropriate Government can also appoint as many
additional and Deputy Registrars of trade unions.
-But limits will be defined by Registrar

2) Mode of registration(Sec. 4)
-Any 7 or more members of Trade Union can subscribe to
the charter of TU by application and complying with the
provisions of this Act.
Cease to be a Registration
Cease to be a Registration
member is valid
member is invalid 48
REGISTRATION OF TRADE UNIONS …

3) Application for Registration(Sec. 5)

-Application for registration of TU shall be
made to Registrar in comply with Rules and
statement of following particulars:
Names, Name of the Trade
Occupations & Union & Address of
Address of the its head office
members

m ber
me TU is
y
An hich d Titles, Names, Where isExistence
e
to w ntrust Ages, Addresses & of TU from past 1
e
Occupations of Year before making
49

office Bearers of TU this application

REGISTRATION OF TRADE UNIONS …

4) Provisions to be contained in the Rules of

Trade Unions(Sec. 6)
list of members of Whole of the objects
Name of TU TU and their for which the TU has
inspection been established.
-
admission of ordinary
Whole of the purpose members(employee) to
Payment of whome TU is connected
for which the general Manner for every
subscription 25
funds of the TU shall appointment and removal & the number of
paise/month/me temporary members as
be applicable. of office-Bearer/
mber
Dissolve of TU office-beares(forms the
executive of TU)

Conditions under- Manner of

benefit entitled to Annual Audit of
members 50
the account
books
REGISTRATION OF TRADE UNIONS …

5) Power to call for further particulars and to

require alterations of names(Sec. 7)

 If TU is proposed to be registered is identical

with that by which any other existing

 shallrefuse to register TU until such alteration

has been made.

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REGISTRATION OF TRADE UNIONS …

6) Registration(Sec. 8)
Registrar, on being satisfied that the TU has
complied with all the requirements of this Act in
regard to registration,
60
shall register the TU
within a period
days of from the date of
such compliance.
7) Certificate of registration
in the prescribed form which shall be conclusive
evidence that the Trade Union has been duly
registered under this Act.
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 CANCELLATION OF REGISTRATION
The Registration of a Union can be cancelled or a
certificate of registration withdrawn by the
Registrar …

1. When the application is not made by the trade

union,
2. If the Registrar is satisfied that the Certificate
was obtained by fraud or mistake or
3. When the trade union has ceased to exist or
4. If the Registrar is satisfied that the TU has called
for or participated in any illegal strike
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 CANCELLATION OF REGISTRATION
The Registrar, on receiving an application from the
Union for withdrawal or cancellation or
registration, must satisfy himself that the
withdrawal or cancellation of registration was
approved by a general meeting of a trade union.
For this purpose, the Registrar may call for such
further information as he thinks necessary.

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