UNIT -4

Industrial Relations & Employee Welfare

Industrial Relations are the relations which emerge between the management and the
employees as a result of their employment and day to day working.
These relations are dynamic in nature and depend on the work environment.

LEGAL FRAMEWORK
There important pieces of legislations have played a major role in shopping Indian
Industrial relations. These are
1. Indian Trade Union Act, 1926.
2. Industrial Employment Act (Standing orders), 1946.
3. Industrial Disputes Act, 1947.
Indian Trade Union Act, 1926 confers on unions the basic minimum legality without
which they could be constructed to be unlawful association. This act was a sequel to a trade
Dispute between the Madras Labour Union & the Bucknigham & Carnatic Mills.
The act protects the registered union from civil and criminal proceedings arising out of
the conduct of trade disputes. The Act is silent on question of Union recognition.
The Industrial Disputes Act, 1947 is a crucial piece of legislation which aims at the
speedy resolution of any conflict between labour & management through conciliation,
arbitration & adjudication. The Act requires that fourteen days notice be given before a strike
or lockout can be declared in a public utility. The government has the powers to declare an
industry a public utility.
The labour department of the government sets the process of conciliation in motion
when intimation strike or lockout is received.
If the conciliator succeeds, the resulting agreement is signed in his presence by the two
sides & is statutorily binding on both.
When no agreement is possible as a result of conciliation, the ID Act encourages the
two sides to voluntarily submit the dispute to Arbitration by an imparted third party. Both
sides should first accept the award of the arbitration as binding.
When conciliation fails & arbitration not acceptable, the case is referred by the
conciliator with his report to the government. The government may at its discretion refer a
dispute to adjudication i.e. to judicial decision making bodies (Labour courts, Labour
tribunals & the national tribunals).

It is left entirely to the discretion of the government to decide whether a dispute merits
reference to adjudication.
The discretion of the government in this regard is absolute & beyond questions.
The third important piece of legislation is the industrial employment (standing order)
Act, 1946. Under the statute, every establishment employing a 100 or more worker is
required to have a set of certified standing orders defining the conditions of employment.
These relate to
1.
2.
3.
4.
5.
6.

Classification of workers,
Shifts,
Attendance,
Discipline,
Termination of employment &
Grievance procedure

It must reasonably confirm to the Model Standing orders framed by the government.

OBJECTIVES
1. The objectives of industrial relations are to maintain a healthy & cordial relationship
between workers & management.
2. The IR must always emphasize that goals of the management of workers are the same
i.e. well being of the enterprise.
3. The relationship should not be based on we & they but rather than ours.
4. The enterprise must have good environment of work rather than that of tension.
Employee must be happy working in the plant.
5. The management must look after the employees in every way and must provide for a
good career growth for their employees.
6. The management must recognize the contribution of the employees and must share
part of their profits with them through bonus & other welfare schemes.
7. The objectives of IRs ultimately are to ensure that wheels of Production never come to
a halt.
8. The IR must improve the quality of work life of their employees.
9. All disputes must be settled through negotiation, discussion & strikes/logouts must
never be resorted to.

IMPORTANCE
Importance of good IR cannot be over emphasized
1.
2.
3.
4.

Good IR makes an enterprise working of employment & a happy work place.

Make an enterprise a preferred place to work for.
Growth & profits become possible.
There is no tension in the minds of either work/management and people contribute
happily.

5.
6.
7.
8.

The employees support the enterprise through thick & them.

Fills a sense of pride amongst the workers.
Productivity of the enterprise improves.
Enterprise is better prepared to face business challenges & fluctuations.

PARTICIPANTS IN INDUSTRIAL RELATION

There are three main sectors in the Industrial Relation namely1. The Labour (work force).
2. The Management/owners/employer.
3. The government.
The government has been intervening off and on in the IR by way of passing some
legislative acts on the premise that minors are weak in front of the might of the
owners/management. Therefore the government passed the three fundamental acts namely1. Trade Union Act, 1926
2. Industrial Disputes Act, 1947
3. Industrial employment (standing order) Act, 1946
These legislations are intended to supplement the effort of a weak labour movement in
dealing with the employer.
The Trade Union Act protects the union from civil & criminal liability arising out of
the conduct of industrial disputes.
The Industrial Employment Act ensures that certain minimum. Standards of
employment will be maintained without a weak union having to fight for them.
Finally the ID Act puts the government in the position of a conciliator; arbitrator &
adjudicator empowered to sit in judgement over the competing claims of labour &
management. It is designed to help a weak labour movement which cannot rely on its own
strength to secure justice.
The other acts passed by the government are:1.
2.
3.
4.
5.
6.
7.

Factorys Act, 1948

Payment of Wages Act
Payment of Bonus Act
Minimum Wage Act
Workers Compensation Act
Employee State Insurance Act, 1948
Employee Provident Fund Act, 1952

WORKERS PARTICIPATION IN MANAGEMENT

Genesis of Workers Participation

Industry maintains a despotic & authoritarian society, under a hierarchy and discipline
of military character, which demands of its workers both unconditional obedience and active
participation in their own oppression.
This lead to alienation of the worker from management. He feels helpless and mute
spectator to his oppression. He doesnt own the machines, he cannot identify himself within
the ultimate product because of work specialization, and he has to say in the decision making
of any sort. He is only dictated to and ordered around. He doesnt have freedom even to do
work his own way.
This alienating condition which is all pervasive in modern industry differs from
CONFLICT in that it is not readily visible.
An alienated worker feels oppressed exploited, frustrated and dominated. At the same
time he has no words to speak about his oppression, distrust bitterness, his work exhaustion,
the stupidity, the monitory, lack of meaning in his work & life.
The solutions offered to work alteration are:1.
2.
3.
4.
5.

Work is necessary & we must accept these conditions.

Automation- which may cut out your monotonous repetitive work.
Job enlargement.
Anti industrialism- where workers should go back to small decentralized industry.
Where technology rules work satisfaction out, alienation has to be suffered & release
for individualism of man sought in leisure line pursuits.
6. Workers participation.
Workers Participation
Participation of workers in management gives the workers a sense of control over his
work, allows him to decide on such matters as machine speeds, allocation of work and
reorganization of jobs.
As a solution to the problem of dehumanization at work, workers participation in
management is considered feasible & practical.
Forms of Participation
Participation is one of the most difficult concepts to define with precision. Particular
may take place in
- Sharing power with management.
- Specific issues over which participation can take place.
Objectives
1.
2.
3.
4.
5.
6.

To achieve industrial peace & harmony.

To develop internal motivation in the workers.
To boost the morale of employees.
To raise employee productivity.
To raise the sense of ownership/involvement of workers.
To make workers feel that they also have in say in the affairs of the enterprise.

Types of Workers Participation

-

Accident prevention committees

Elimination of waste & defective work.
Attendance & absenteeism committees.
Employees Insurance Plan
Quality Circles
Joint councils (JCM)
Work Committee
Suggestion System
On board of Directors (elected worker can be put there)

EMPLOYEE WELFARE
Some companies provide some measures or services to their employees other than their
wages/pay which add to their & their families general well being. The concept is1. To make their work force healthier, aware & forward looking.
2. To make their work force 7 their families better citizen.
3. To increase their spirit of brotherhood and fill the pride enterprise amongst the work
force.
4. To improve & maintain their morale &
5. Employee feels happy that he is being cared for and looked after by his employer.

SCOPE /Employee welfare measures can be categorized into four categories.

1.
2.
3.
4.

Work environment.
Economic environment.
Recreational environment.
Facilitative environment.

1. WORK ENVIRONMENT
1. Workshop conditions
a. Temperature
b. Ventilation
c. Humidity
d. Lighting
e. Dust, smoke & gases
f. Noise
g. Convenient posture during work
h. Hazards & safety devices
2. Factory Sanitation & Cleaning
a. Provisions of spittoons

b. Disposal of waste & rubbish

c. Drainage
d. Bathing & washing facilities
e. General cleanliness, while washing & maintenance of buildings & workshops
f. Care & maintenances of open space parks, etc.
3. Welfare Amenities
a. Drinking water
b. Canteen services
c. Rest rooms
d. Cloak rooms
e. Indoor games
2. ECONOMIC
1. Insurance (including group Insurance)
2. Retirement & Pension Plans.
3. Health & Accident Care Services.
4. Loans on easy leisures.
5. Paid Holidays (LTC etc)
6. Profit Sharing.
7. Housing Loans.
8. Employee children scholarships
9. Fair Price shop
10. Festival Advances

3. Recreational
1. Sports
2. Celebration of various festivals.
3. Social gets together in company clubs.
4. Dramatics, hobbies
5. Play grounds for children
6. Indoor games.

4. Facilitative
1. Housing

2. Transport
3. Educational facilities/library services
4. Medical services, dispensary, Fust aid
5. Canteen
6. Cooperative stores
7. Discount on company products
8. Rest room/community hall
9. Legal & financial counseling
10.Career counseling for children.

"During the pre-independence period, industrial relations policy of the British Government
was one of laissez faire and also of selective intervention. There were hardly any labour
welfare schemes. After independence, labour legislations have formed the basis for industrial
relations and social security. These legislations have also provided machinery for bipartite
and tripartite consultations for settlement of disputes.
Soon after independence, the government at a tripartite conference in December 1947
adopted the industrial truce resolution. Several legislations, including the following, were
enacted to maintain industrial peace and harmony: Factories Act, 1948, Employees State
Insurance Act, 1948 and Minimum Wages Act, 1948. The payment of bonus act was passed
in 1965.
In the early 1990s, the process of economic reforms was set in motion when the
government introduced a series of measures to reduce control on industries, particularly large
industries. The workers have opposed economic liberalization policy for fear of
unemployment while entrepreneurs have welcomed it in the hope of new opportunities to
improve Indian industries. The new economic policy has directly affected industrial relations
in the country, because the government has to play a dual role, one of protecting the interest
of the workers, and second to allow a free interplay of the market forces. Economic reforms,
by removing barriers to entry, have created competitive markets. Fiscal stabilization has
resulted in drastic reduction in budgetary support to the public sector commercial enterprises
while exposing these enterprises to increased competition from private sector.
Labour and Labour Welfare sub-sector consists of six main programmes viz. Labour
Administration, Rehabilitation of bonded labour, Assistance to Labour Cooperatives,
Craftsmen training programme, Apprenticeship training programme, Employment Services
and Sanjay Gandhi Swavalamban Yojana.

Manpower, employment policy and labour welfare in India: post-independence

developments:
Many researches has been done in the following themes, such as
1. Manpower: trends and magnitude.

2. Employment policies and programmes.

3. Labour welfare: legal framework and initiatives.
4. Women workers: legislations and empowerment.
5. Industrial relations and labour laws.
6. Restructuring of labour laws: the great debate.
7. Labour laws and welfare: India and ILO.
8. Labour reforms: India and WTO. II. India's Five Year Plans at a glance. III. Edited
extracts from India's Five Year Plans on employment and labour related matters (I plan to X
plan including mid-term appraisal of the X Plan).