MODULE 1

INDUSTRIAL RELATIONS

Employee Relations
Employees are the main assets.
Employees should work together as a
collective unit.
Employees should work for the
achievement of common goal.
There should not be any conflict of
misunderstandings.

What is Employee Relation

Management

ERM refers to managing the relation

between the various employees in an
organization.

What is Management?
Management is a technique which
bring people together on a common
platform and guides them so that
they achieve their desired target
without fighting with each other

Industrial Relation
Industry refers to any productive
activity in which an individual is
engaged.
Relation refers to the relationships that
exist within the industry between
employer and the workmen.
For industrial progress, good relation
between labour and employer is
necessary.

 Industry: Industry is a whole gamut of

activities that are carried on by an
employer with the help of his
employees and labors for production
and distribution of goods to earn
profits.
Employer: A person or business that
pays wages or fixed payments to other
person in exchange for the services of
such person.
Employee: Employee is a person who
is hired by another person for a wage
or fixed payment in exchange for
personal services.

Definition
Industrial relations deal with either the
relationships between the state and employers and
the workers organization and the relation between
the occupational organizations themselves.
International Labor Organization (ILO)
Industry relations are the relations of all those
associated in productive work including industry,
agriculture, mining, commerce, finance, transport
and other services. The main aspects are the
establishment of the conditions under which the
proceeds of the work are divided as dividends,
salaries
and
wages
between
shareholders,
employers, management and work people of various
grades- manual, clerical and technical.

 Employment: The state of being

employed or having a job.
Labor Market: The market in which
workers compete for jobs and
employers compete for workers.

Industrial Relation System

An industrial relation system consists of
whole gamut of relationships between
employees and employees, employees
and employers which are managed by
the means of conflict and cooperation.
A system which creates an environment
conductive to economic efficiency and
motivation, productivity and
development of employees and
generate mutual trust.

Nature of 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 and other
conditions of employment to protect the interests of the employed
and their employers, and to regulate ways in which employers
treat their employees
(p. 534)

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
6)Industrial relation training

Actors in IR System
Employers:
Employers possess certain rights vis-vis labors.
They have the right to hire and fire
them.
Management can also affect workers
interest by exercising their right to
relocate, close or merge the factory or
to introduce technological changes.

Employees:
Workers seek to improve the terms and
conditions of their employment.
They exchange views with management
and voice their grievances.
They also want to share decision making
powers of management.
Workers generally unite to form unions
against management and get support
from unions.

Government:
The central and state government
influences and regulates industrial
relations through laws, rules,
agreements, awards of court and the
like.
It also includes third parties and
labor and tribunal courts.

Trade Unions

Employers

Employees

Government

Industrial Relations

Employers association

Courts and Tribunals

Objectives of Industrial Relations

To safe guard
the interests

To avoid
industrial
conflict

To raise
productivity

To establish
and maintain
the growth
To establish
government
control

Scope of IR
Collective bargaining
Machinery for settlement of industrial
disputes.
Standing orders.
Workers participations in
management.
Unfair labor practices

OBJECTIVES OF IR

Objectives of Industrial
Relation
The development of healthy
employer-employee relations.
Labor management relations.
Industrial peace and productivity.
Industrial Democracy.
Liaison Functions

Importance of Industrial
Relations

Uninterrupted production.
Reduction in Industrial Disputes.
High Morale.
Mental Revolution.
Reduced Wastage.

IMPORTANCE OF IR
Uninterrupted Production.
Reduction in Industrial Conflict.
High Morale.
Mental Revolution.
Reduced Wastage.

Approaches to IR
1. Unitary Perspective:

Organization is perceived as an integrated and harmonious

system, viewed as one happy family.
Management, staff and all members of organization share the
same objectives, interests and purposes.
Paternalistic approach
Demands loyalty of all employees.
Conflict is perceived as irrational activity.
Trade unions are regarded as intrusions into the organizations
from outside.
Regarded as management ideology.

2. Pluralistic Perspective
Perceived as being made up of powerful and
divergent sub-groups.
Sees conflicts of interest and disagreement between
managers and workers over the distribution of profits.
Role of management would lean less towards
enforcing and controlling and more toward persuasion
and coordination.
Trade unions are deemed as legitimate
representatives of employees.
Conflict is dealt by collective bargaining.

3. Marxist Perspective:
Also called Radical perspective or conflict model.
Concentrates on nature of society surrounding the
organization.
Assumes that organization exists within a capitalist
society.
Class conflict is the source of societal change.
Capitalism would foster monopolies.
There is inequalities of power and economic wealth.
Conflicts here are seen as inevitable and trade unions
are a natural response of workers to their exploitation by
capital.

Dunlops Contribution to IR
oSystem concept of industrial relation
oAccording to Dunlop, IR system consists of 3 agents1. Management
2. Workers
3. Government agencies
oWithin this environment, actors interact with each other, negotiate and
use economic/political power in determining rules that constitute the
output of IR system.
Actors are:
1.A hierarchy of managers and their representatives in supervision.
2.A hierarchy of workers and spokesmen.
3.Specialized government agencies created by the first private agency.
The interaction between the three actors results in significant
strata that is referred to as subsystem of an IR system. When there is
problem in the interaction between these, conflict arises.

Role of actors in IR
State
Employers
1.
2.
3.
4.
5.

Exploitative authoritative style.

Benevolent authoritative style.
Consultative authoritative style.
Democratic style.
Participative style.

Employees
Trade unions.

Causes of Poor IR
1. Economic Cause
Poor wages and poor working conditions.
Unhealthy deduction from wages.
Lack of fringe benefits.
Absence of promotion.
Faulty incentive scheme.
2. Organizational Cause
Faulty communication system
Unfair practices.
Non-recognition of trade unions.
Labour laws.
3. Social Cause
Uninteresting nature of work
Dissatisfaction with job and personal life

4. Psychological Cause:
Lack of job security.
Non recognition of merit and performance.
Poor interpersonal skills.
5. Political Cause:
Multiple Unions.
Inter-union rivalry.

Developing Sound IR
1.
2.
3.
4.

Sharing Information.
Consulting with each other on a regular basis.
Brainstorming together.
Organizing morale boosting system where labour and management have
benefited through cooperation.
5. Creative opportunity to both management and labor.
6. Bridging the gap between perception and practice.
7. Ensuring the support and sustenance of top management.
Both management and unions have to fulfil certain Obligations :

Clarify the reason with the other party.

Provide for say and share for all employees.
Focus on fairness.
Empower people
Be transparent.
Learn to manage ego.
Give credit.
Develop a long-term perspective.

Ethical approach to IR
It focus on strong principles about workers and the employment relationship.
Labor should not be treated as commodity
Labor should be treated as human beings in democratic community.
It is that part of management which is concerned with the management of
enterprise Whether machine operators, skilled workers or managers.
It deals with the relationship between the state and the employers and workers
organisation or the relation between the organizations themselves.

Idea of Trusteeship
Gandhijis views on IR are based on his fundamental principles of truth, nonviolence, and non-possession.
This philosophy presumes the peaceful co-existence of capital and labor.
Gandhiji emphasized that if the employers follow the principles of trusteeship
then there is no scope of conflict of interest between labor and management.
Gandhiji accepted workers to strike, but it should be in a peaceful and nonviolent manner. This method should be used only when all methods failed in
getting employees response.
Gandhiji also appealed to the workers to behave as trustees, not to regard the
mill and machinery as belonging to the exploiting agents but to regard them as
their own, protect them and put to the best use they can.
In short idea of trusteeship is based on the view that all forms of property and
human accomplishments are gifts of nature and as such , they belong not to any
one individual but to society.

Code of conduct
To go on strike taking authority from all workers and remain peaceful.
Workers should avoid strike to the possible extent.
Strikes should be resorted to only as a last report.
Should seek redressal of reasonable demands through collective action.
Should try for direct settlement.
Should treat the business of their employer as their own and work
honestly.
Workers should go on strike only when capitalist failed to respond to moral
appeals.
Code of conduct laid down by Gandhiji:
Never to resort to violence.
Never to depend upon alms.
To remain firm, no matter how long the strike continues.
To earn bread during the strike by any other honest labor.

Approaches To IR

Unitary approach

Pluralistic
approach

Marxist approach

Industrial
Relations

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, managements 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

EMERGING TRENDS IN IR

COMPETITION ON THE BASIS

OF CHEAP LABOUR
Globalization and increased competition has
lead to less strikes, lockouts and less man
days lost due to strikes. Also now in the era
of knowledge industry employees are
educated and thus dont believe in violent
activities. They are having responsibilities in
cut throat competition and also are aware of
their rights well leading to decline in strikes.
Employers also avoid lockouts because
decline in production for even hours results in
heavy losses so forget about days or weeks.

DISINVESTMENT

It changes ownership, which may bring

out changes not only in work org and
employment but also in trade union
(TU)dynamics.
It changes the work organization by
necessitating retaining and redeployment.
It affects the right of workers and Trade
unions, including job/union security, income
security, and social security.

DEREGULATION
it is tried to ensure that pubic sector/ government
employees receive similar protection as is provided in
public/government employment. The worst affected
are the pension provisions. this means, usually a
reduction in pension benefits and an uncertainty
concerning future provision of pension benefit due to:
The absence of government guarantees
Falling interest rates
X Investment of pension funds in stock markets

NEW ACTORS AND EMERGING

DYNAMICS

Earlier IR was mainly concerned with Trade

unions, mgt and government but now consumers
and the community are also a part of it. When the
rights of consumers and community are affected,
the rights of workers and unions and managers /
employers take a back seat. Hence there is ban
on bandh and restrictions even on protests and
dharnas.
Increasingly Trade unions are getting isolated and
see a future for them only by aligning themselves
with the interests of the wider society.

PRO-LABOUR PRO
INVESTOR POLICIES
This leads to decline in strength and
power of Trade unions if not in numbers.
Unions have to make alliances with the
society, consumers and community and
various civil society institutions otherwise
they will find themselves dwindling.

DECLINING TU DENSITY

In government and public sectors workforce

is declining because of non-filling of vacancies
and introduction of voluntary / early separation
schemes.
New employment opportunities are shrinking
in these sectors.
In the private sectors particularly in service and
software sector, the new, young, and female
workers are generally less eager to join unions.

Workers militancy replaced

by employer militancy

DUE TO INDUSTRIAL
CONFLICT
In 1980-81 man days lost = 402.1 million
In 1990-91 man days lost = 210 million
Not because of improved IR but because of the
fear of job security, concern about the futility of
strikes,
and
concern
to
survive
their
organization
for
their
income
survival.
Trade unions have become defensive evident
from the fact that there is significant shift from
strikes to law suits. Instead of pressing for
higher wages and improved benefits, Trade
unions are pressing for maintenance of existing
benefits and protection and claims over nonpayment of agreed wages and benefits.

COLLECTIVE BARGAINING
Collective bargaining is a process of negotiations
between employers and the representatives of a unit
of employees aimed at reaching agreements which
regulate working conditions.
Total number of strikes and lockout have declined since
2000-04
In 2003 it was 552 and in 2004 it went down to 477.
As regards women working on night shifts, The
Factories (Amendment) Bill 2005, was under
consideration to provide them flexibility and safety.
Also, to simplify the procedure for managements to
maintain registers and filing returns, an amendment of
Labour Laws (Exemption from Furnishing returns and
maintaining Registers by Certain Establishments) Act
1988, was under consideration.

SUGGESTIONS TO IMPROVE
A. Both management and
IRunions should develop

constructive attitudes towards each other

B. All basic policies and procedures relating to
Industrial Relation should be clear to everybody
in the organization and to the union leader. The
personnel manager must make certain that line
people will understand and agree with these
policies.
C. The personnel manager should remove any
distrust by convincing the union of the
companys integrity and his own sincerity and
honesty. Suspicious, rumors and doubts should
all be put to rest.

D. The personnel manager should not vie with the

union to gain workersloyal to both the
organization. Several research studies also confirm
the idea of dual allegiance. There is strong
evidence to discard the belief that one can owe
allegiance to one group only.
E. Management should encourage right kind of union
leadership. While it is not for the management to
interfere with union activities, or choose the union
leadership, its action and attitude will go a long
way towards developing the right kind of union
leadership. Management gets the union it
deserves is not just an empty phrase

Future of IR in India

In our presentation we have discussed Industrial Relation Strategy vide which we could
know different strategies for industrial relations and could also know how the Industrial
Disputes aree settld under the provisions of Acts as applicable to the concerned dispute.
In our discussions Future of Industrial Relation in India, we shall discuss the current
scenario of industrial relation in India and how workers influence such relations
From the various reports certain issues are emerging which are posing challenges to the
three factors viz., the employer, the employee and the government
Strengthening collective bargaining by trying to determine a sole bargaining power
for negotiation
Gaps that are occuring as a result of the variations act as enacted by State and
Central Government
Workers participation in management and failure of these schemes to be looked into.

Keeping in mind the above issue and the three factors we have to evaluate and decide
future strategy, which is to be adopted in managing personnel and industrial relations. The
strategy will depend on the values, objectives, structures available and the environment in
which they have to work