INDUSTRIAL RELATIONS

Certificate Course in Human Resources Management by Asoka Weerakoon AIPM , MIM (SL)
National Diploma in Human Resource Management

INDUSTRIAL RELATIONS
EMPLOYEE RELATIONS Basically Employee Relations refers to the relationship between the Employer and the employees in dealing with terms of the agreement & issues arising in the course of the employment. Here the Employer is represented by the Management and the managerial categories are not included in the Employees. Internal reactions between the management and employees on individual basis are referred to Employee Relations. To have a sound Employee Relations the Management has to adopt policies which win the hearts of the employees.

Job Dissatisfaction
Employees want to solve their issues with the management due to various reasons. As the first step they will try to solve their issues with the management individually. The success of this will depend on two things. i.e.

Job Dissatisfaction
Essentiality : The importance of the job for the success of the organization Exclusivity: The difficulty of finding a replacement for the employee (indispensability) When the above conditions are stronger for an employee the chances are greater to solve the issues with the management individually.

When employees feel they cannot win their demands individually they tend to organize or unite on their own or through a Trade Union. The reasons for such unionization are Insufficient remuneration, Attitude of the management, Favouration, Rigid rules & regulations, Tight supervision, One way communication, Weak grievance handling procedure

Introduction To Industrial Relations

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 field of industrial relations looks at the relationship between management and workers, particularly groups of workers represented by a union.

Introduction To Industrial Relations (Continues)

The term industrial relations has a broad as well as a narrow outlook. Originally, industrial relations was broadly defined to include the relationships and interactions between employers and employees. From this perspective, industrial relations covers all aspects of the employment relationship, including human resource management, employee relations, and unionmanagement (or labor) relations.

Now its meaning has become more specific and restricted. Accordingly, industrial relations pertains to the study and practice of collective bargaining, trade unionism, and labormanagement relations, while human resource management is a separate, largely distinct field that deals with nonunion employment relationships and the personnel practices and policies of employers.

Introduction To Industrial Relations (Continues)

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.

Industrial relations also includes the processes through which these relationships are expressed (such as, collective bargaining, workers participation in decision-making, and grievance and dispute settlement), and the management of conflict between employers, workers and trade unions, when it arise

INDUSTRAL RELATIONS The interactions between the management and the Trade Unions of the employees are referred to Industrial Relations INDUSTRIAL RELATION SYSTEM Industrial Relations (IR) can be defined as collective relations between Employees, Employers and the Government which intervenes to settle disputes between Employer and Employee. Healthy IR will ensure industrial peace and stability in the industry. IR System involves: 1. Tripartism 2. Balance of Interest 3. Social Equilibrium.

Tripartite relationship refers to the following parties Employees and their Trade Unions Employer and their representatives (management / Employers TU ) State State

Employer

TUs (Employees)

Each party plays a vital role in industrial relations process & each party depends on the other parties. Members of the TUs need the jobs for their living. Management owns the job opportunities. Management expects efficiency and productivity from the TUs. As a result of this dependability on the other party, Management and TUs have to respect each other. The State is the 3rd party. State needs the TUs as well as the management to fulfill its obligation to the general public in providing social welfare and the other needs. The priority of the state is to ensure industrial peace in the country. Although the parties mentioned above are dependent on each other, the powers of the parties are not equal. State is the most powerful party in this process. When the management is weak the TUs become more powerful. The management becomes more powerful when it is strategic and strong.

SOME OF THE BASIC OBJECTIVES OF INDUSTRIAL RELATIONS Balance the economic efficiency of the organisations with equity, justice and development of the individual. To find ways and means of preventing, minimising and resolving conflict. To determine terms and conditions of employment through dialogue and negotiation based on equality of partners.

To promote harmonious relations between and among the parties involved in industrial relations. To establish and promote the growth of an industrial democracy based on labor partnership in the sharing of profits and of managerial decisions, so that ban individuals personality may grow its full stature for the benefit of the industry and of the country as well.

To eliminate or minimize the number of strikes, lockouts and gheraos by providing reasonable wages, improved living and working conditions, said fringe benefits. To improve the economic conditions of workers in the existing state of industrial managements and political government.

Socialization of industries by making the state itself a major employer Vesting of a proprietary interest of the workers in the industries in which they are employed. The parties should work for the mutual benefit of the parties directly involved and society as a whole. The rules, processes and mechanism above referred to are found in many sources such as laws, practices, customs and agreements reached through bipartite and tripartite process.

ROLE OF LABOUR LAWS IN INDUSTRIAL RELATIONS

Controlling Role Less impact on promoting harmonious industrial relations. Facilitating Role It is the base on which a sound labour relation system can be built. Law has to provide measures of social protection. It supports the system. Protector Role Law provides protection against discrimination. Prescribes minimum terms and conditions. Impose restrictions.

LEGAL FRAMEWORK
1.

Enactments providing a set of rules governing terms and conditions of employment. Shops and Office Employees Act Wages Board Ordinance Workman Compensation Ordinance Maternity Benefits Ordinance Employment of Women, Children and Young Persons Ordinance Factories Ordinance Termination of Employment Act Employees Provident Fund Act Employees Trust Fund Act Payment of gratuity Act

(B) Enactments providing procedure for the settlement of Industrial disputes. Industrial Disputes Act No 43 of 1950 An Act to provide for the prevention, investigation and settlement of Industrial Disputes and for matters connected therewith or incidental thereto.

What is an Industrial dispute?

Any dispute or difference between an Employer and Employee or between Employers and Employees connected with the employment or non-employment or the terms of employment or with conditions of labour or the termination of employment or the reinstatement in employment of any person.

PROVISIONS FOR SETTLEMENT OF DISPUTES

The Industrial Dispute Act provides following methods for the settlement of disputes. Reactive measures Within the powers of Commissioner General of labour 1 Collective Agreements Settling the dispute according to the Dispute settlement procedure stated in the collective agreement signed between the parties.

2 Conciliation The Commissioner or the Authorised Officer calls up the parties to the disputes and facilitate for a mutual settlement. He may take steps to induce the parties to come to a settlement. If a settlement is arrived a Memorandum of Settlement is prepared setting out the terms of settlement and shall be signed by both parties and is binding on the parties. The terms of settlement shall be implied terms of the contract of employment.

3 Voluntary Arbitration When the conciliation fails the Commissioner General of Labour or the authorised officer can refer the dispute to an Arbitrator with the consent from the parties. An arbitrator proposed by both parties Arbitration Panel In the absence of the above, one name each from both parties together with a representative of the commissioner as the president of the Arbitration Panel Referring to a Labour Tribunal . With powers of the Minister of Labour

Compulsory Arbitration Minister has the powers to refer the dispute to an Arbitrator appointed by him or to a Labour Tribunal, by a written order, if the dispute is a minor one. 5 Industrial Court The President of Sri Lanka appoints annually not less than 5 people to the Panel of Arbitrators. The Minister may refer an industrial dispute to an Industrial Court consisting one or three arbitrators selected from the Panel of Arbitrators for settlement. The order will be gazette and is binding on the parties and the terms will be implied terms of the contract of employment.
4

6 By the employee / TU directly in a termination Labour Tribunals An employee may make an application to the Labour Tribunal (under the court system) for relief or redress in the event of termination of employment or non-payment of gratuity.

COLLECTIVE BARGAINING
Definition -: Negotiation about working conditions or terms of employment between the employer (an employer or a group of employers or one or more employer organizations) and Group of Employees (one or more representative Trade Unions) to reach an agreement. The end result will be the Collective Agreement signed between the two parties for a specific period. The terms and conditions in the collective Agreement supersede the terms & conditions in the Letter of Appointment.

IMPORTANCE OF COLLECTIVE BARGAINING

(a). Resolving a situation discussion and acceptance (b). A form of participation (c) Institutionalised process of settlement of industrial dispute (d). Discourage industrial disputes (e). Industrial peace (f). Cordial relationship between employer and employee (g). Enables business competition on equal footing due to standardisation in cost of labour (i). Less likely to change union affiliations

DIFFERENT LEVELS OF INDUSTRIAL RELATION SYSTEM

International Level 2. National Level 3. Industry Level 4. Organizational Level International Level Through I.L.O. (International Labour Organization) Conventions. National Level Legislations passed by the governments. Industry Level Different practices in each industry. Organizational Level Practices and policies of the organization
1.

REASONS FOR POOR INDUSTRIAL RELATIONS

Absence of a sound Corporate policy of HR Management attitude Poor communication Political agenda of the Trade Union Rigid stands of the Union leaders Conflict situations preferred by unions Inflationary & unsound economic policy of the country Lethargic role of the Labour Department (state)

MAINTAINING HEALTHY INDUSTRIAL RELATION

Human Resource Management Industrial relations Good industrial relations, while a recognizable and legitimate objective for an organization, are difficult to define since a good system of industrial relations involves complex relationships between: (a) Workers (and their informal and formal groups, i. e. trade union, organizations and their representatives); (b) Employers (and their managers and formal organizations like trade and professional associations); (c) The government and legislation and government agencies l and 'independent' agencies like the Advisory Conciliation and Arbitration Service.

HR managers responsibilities
The personnel manager's involvement in the system of industrial relations varies from organization to organization, but normally he or she is required to provide seven identifiable functions, thus: 1. To keep abreast of industrial law (legislation and precedents) and to advise managers about their responsibilities e.g. to observe requirements in respect of employing disabled persons, not to discriminate, not to disclose 'spent' convictions of employees, to observe codes of practice etc. in relation to discipline and redundancy, and similarly to determine organizational policies (in conjunction with other managers) relevant to legal and moral requirements

2.

To conduct (or assist in the conduct) of either local negotiations (within the plant) or similarly to act as the employer's representative in national negotiations. This could be as a critic or advisor in respect of trade etc. association policies or as a member of a trade association negotiating team. Agreements could be in respect of substantive or procedural matters. Even if not directly involved the personnel manager will advise other managers and administrators of the outcome of negotiations.

3. To ensure that agreements reached are interpreted so as to make sense to those who must operate them at the appropriate level within the organization (this can involve a lot of new learning at supervisory level and new pay procedures and new recording requirements in administration and even the teaching of new employment concepts like stagger systems of work - at management level).

4. To monitor the observance of agreements and to produce policies that ensure that agreements are followed within the organization. An example would be the policy to be followed on the appointment of a new but experienced recruit in relation to the offered salary where there is a choice of increments to be given for experience, ability or qualification.

5. To correct the situations which go wrong. 'Face' is of some importance in most organizations and operating at a 'remote' staff level personnel managers can correct industrial relations errors made at local level without occasioning any loss of dignity (face) at the working level. 'Human resource management' and the obscurity of its reasoning can be blamed for matters which go wrong at plant level and for unwelcome changes, variations of comfortable 'arrangements' and practices and unpopular interpretation of agreements.

6.

To provide the impetus (and often devise the machinery) for the introduction of joint consultation and worker participation in decision-making in the organization. Formal agreement in respect of working conditions and behavior could never cover every situation likely to arise. Moreover the more demanding the task (in terms of the mental contribution by the worker to its completion) the more highlyeducated the workers need to be and the more they will want to be consulted about and involved in the details of work life. Matters like the rules for a flexitime system or for determining the correction of absenteeism and the contents of jobs are three examples of the sort of matters that may be solely decided by management in some organizations but a matter for joint consultation (not negotiation) in others with a more twenty-first-century outlook and philosophy. Human resource management is very involved in promoting and originating ideas in this field.

7. To provide statistics and information about workforce numbers, costs, skills etc. as relevant to negotiations (i.e. the cost of pay rises or compromise proposals, effect on differentials and possible recruitment/retention consequences of this or whether agreement needs to be known instantly); to maintain personnel records of training, experience, achievements, qualifications, awards and possibly pension and other records;

Sound HR corporate policy

Focus on key result areas (man power planning, recruitment & selection, induction, training & development, compensation mgt, performance mgt, succession planning, employee welfare, health & safety, grievance handling, employee/industrial relations, HRIS & corporate social responsibility. Role of the management Top management Line management HR division Employees participation Gain sharing schemes & incentives Improve communication Due respect to TUs Entering into collective agreements

TRADE UNION ORDINANCE NO.14 OF 1935 (AS AMENDED)

Trade union Definition: Any association or combination of workmen or employers, whether temporary or permanent, having one or more of the following objectives. A trade union (or labour union) is an organization of workers who have banded together to achieve common goals in key areas and working conditions.

Regulations of relations Between workmen and employer Between workmen and workmen Between employers and employers 2. Imposing restrictive conditions on the conduct of any trade or business 3. Representing in trade disputes 4. Financing / providing pay or other benefits in strikes or lockouts, as the case may be, in trade or industry.

The following categories cannot form trade unions

Judicial officers Members of the Armed Forces Police Officers Prison Officers

When a Trade Union is formed it has to be registered with the Dept of Labour. Failure to do so the trade union becomes an unlawful association. In such a situation, the TU cannot participate in any trade union action or discussion with regard to trade disputes.

When a TU has the membership representing not less than 40% of the workmen on whose behalf such TU seeks to bargain, the employer must recognize such TU. For a recognized TU, the employer should

Allow the check off facility. Invite for discussion with the management concerning trade disputes. Allow to represent in the labour issues of their members

Thank You