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Chapter 1
Chapter 1
Content
Historical Background
Meaning
Definition
Nature
Objectives
Scope
Importance
Parties to Industrial Relation
Approaches
History
Industrial relations has its roots in the industrial revolution which created the modern
employment relationship by spawning free labor markets and large-scale industrial
organizations with thousands of wage workers. As society wrestled with these massive
economic and social changes, labor problems arose. Low wages, long working hours,
monotonous and dangerous work, and abusive supervisory practices led to high
employee turnover, violent strikes, and the threat of social instability. Intellectually,
industrial relations was formed at the end of the 19th century as a middle ground
between classical economics and Marxism.
The relation between workers and management have undergone Himalayan changes in
our country there had been a system of king and his subjects, all should
work to improve the coffers of the king. Later Zamindars came and
workers were at their mercy some time bonded also, later with the formation of
East India company and British Rule a heart less Hire and fire system was established
Industrial workers were no mans child neither the employers or government cared
for them, there were no union also. Gradually enlightened leaders came in
like, Gokale, MK Gandhi Ro y, Tilak etc felt the need for workers union.
Their relentless efforts forced both governments and the employers to
think of workers lot small u n i o n s w e r e f o r m e d , g o v e r n m e n t e n a c t e d
r u l e s l i k e T r a d e u n i o n A c t 1 9 2 6 . I n d u s t r i a l disputes Act etc.
Various factors responsible for this are Growing prosperity
Rising wages
Worker's higher standard of living
Education
Greater mobility
Individually owned organization have became Corporate enterprises.
Progressive , status-dominated , secondary group-oriented , sophisticated class
of workers has came into being who have their own trade unions , thus gained
bargaining power which enable them to give a tough fight to their employers to
establish their rights in the growing industrial society.
Meaning
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 boundary wall of
the industry between the employer and his workmen.
The term Industrial relations are basically the interactions between employers,
employees and the government, and the institutions and associations.
Accordingly, industrial relations concern to the study and practice of collective
bargaining, trade unionism, and labor-management 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.
Industrial relations has become one of the most delicate and complex problems of
modern industrial society. Industrial progress is impossible without cooperation of labors
and harmonious relationships. Therefore, it is in the interest of all to create and maintain
good relations between employees (labor) and employers (management).
The main concepts of industrial relations are
1. Preservation and promotion of economic interest of workers along with social
interest
2. Peace and productivity goes hand in hand hence. Attempt to reduce industrial
dispute and promote peace is a necessity.
3. Employer employee relation should be made healthy and growing
4. R u n n i n g o f t h e i n d u s t r y, d a y t o d a y w o r k s h o u l d b e m a d e m o r e
d e m o c r a t i c w i t h increasing workers participation
5. Producing products at a very com petitive price so that country can
promote export and our economy can improve.
6. Bringing mental revolution in management.
Definition
The term Industrial relations explains the relationship between employees and
management which stem directly or indirectly from union-employer relationship
sV. Agnihotri.
within a plant also constitute one of the important elements and impinge on the broader
aspects of industrial relations C.B Kumar
The field of industrial relations include the study of workers and their trade
unions, management, employers association and state institutions concerned with the
regulation of employment H.A Clegg
Industrial relations is a developing and dynamic concept and does not limit itself
merely to the complex of relations between the unions and management, but also refers
to the general web of relationships normally obtaining between employees-a web much
more complex than the simple concept of labor-capital conflict. kapoor
ACC. to ILO definition Industrial relations deals with either the relationships
between the state and employers and workers organizations or the relations between
the occupational organizations themselves.
Nature
Three types of relations between two components .
Employer-Employer
Employer-Employee
Employee-Employee
It exists within the boundary wall of the Industry. exist in both the organized or
unorganized sectors of industry.
It is a web of rules formed by the govt., and business community and labour.
Conflict Solving- From the earliest phase of industrialization from which the
workers formerly working with their own tools entered into power driven factories,
owned by owners: to minimization of breakdown due to industrial conflicts of later
state and further to industrial peace.
Multi- Dimensional- Industrial relation do not function in a vacuum but multidimensional in nature and are conditioned with three determinants (i) Institutional
factors (ii) Economic factors (iii) Technological Factors.
Institutional factors are included items such as state policy, labour laws,
voluntary codes, collective agreements, labourers unions and employers
organisation, social institution like the community, caste, joint family, creed,
system of beliefs, etc, attitudes of work, systems of power status, relative
Objectives
To safeguard the interest of labor and management- by securing the
highest level of mutual understanding and good-will among all those sections in
the industry which participate in the process of production.
grievances and disputes. This will ensure optimum use of resources, both human
and materials, eliminating all types of wastage.
5. It discourages unfair practices on the part of both management and
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.
11. 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 employers authority. It
will naturally have impact on production because they recognize the interest of
each other.
12. Reduced Wastage Good industrial relations are maintained on the basis of
cooperation and recognition of each other. It will help increase production.
Wastages of man, material and machines are reduced to the minimum and thus
national interest is protected.
Scope
The cordial and healthy labour management relations could be brought in
By collective bargaining.
Approaches
Approaches to Industrial Relations
Industrial conflicts are the results of several socio-economic, psychological and political
factors. Various lines of thoughts have been expressed and approaches used to explain
his complex phenomenon. One observer has stated, An economist tries to interpret
industrial conflict in terms of impersonal markets forces and laws of supply demand. To
a politician, industrial conflict is a war of different ideologies perhaps a class-war. To a
Psychological approach
According to psychologists, problems of industrial relations have their origin in the
perceptions of the management, unions and rank and file workers. These perceptions
may be the perceptions of persons, of situations or of issues involved in the conflict. The
perceptions of situations and issues differ because the same position may appear
entirely different to different parties. The perceptions of unions and of the management
of the same issues may be widely different and, hence, clashes and may arise between
the two parties. Other factors also influence perception and may bring about clashes.
The reasons of strained industrial relations between the employers and the
employees can be understood by studying differences in the perception of issues,
situations and persons between the management groups and labour groups.
The organizational behavior of inter-groups of management and workers is of crucial
importance in the pattern of industrial relations. The group-dynamics between the two
conflicting groups in industrial relations tend to shape the behavioral pattern.
Sociological approach
Industry is a social world in miniature. The management goals, workers attitudes,
perception of change in industry, are all, in turn, decided by broad social factors like the
culture of the institutions, customs, structural changes, status-symbols, rationality,
acceptance or resistance to change, tolerance etc. Industry is, thus inseparable from
the society in which it functions. Through the main function of an industry is economic,
its social consequences are also important such as urbanization, social mobility,
housing and transport problem in industrial areas, disintegration of family structure,
stress and strain, etc. As industries develop, a new industrial-cum-social pattern
emerges, which provides general new relationships, institutions and behavioural pattern
and new techniques of handling human resources. These do influence the development
of industrial relations.
Gandhian approach
This approach is based on his fundamental principles of truth and non violence . These
principles evolved the concept of non co-operations and trustees. Where conflict exists
it should be resolved by non co-operations & non violence .
Gandhi ji advocated the followings :
If they have to organize a strike, trade unions should seek by bailout authority
from all the workers, but in remain peaceful and use non violent methods.
It has now been increasingly recognized that much can be gained by the managers and
the worker, if they understand and apply the techniques of human relations approaches
to industrial relations. The workers are likely to attain greater job satisfaction, develop
greater involvement in their work and achieve a measure of identification of their
objectives with the objectives of the organization; the manager, on their part, would
develop greater insight and effectiveness in their work.
The willingness and ability of management and trade unions to deal with the
problems freely, independently and with responsibility.
Developing
employees.
proper
communication
system
between
management
and
Indiscipline;
Lack of human relations skill on the part of supervisors and other managers;
Desire on the part of the workers for higher bonus or DA and the corresponding
desire of the employers to give as little as possible;
a) Demand for increase of wages, salaries and other perks. workers demand goes on
increasing with the increase in cost of living
b) Demand for more perks, and fringe benefits. Issue of bonus also has become a
c o n t e n t i o u s o n e , e v e n t h o u g h B o n u s Ac t h a s c o m e f i x i n g m i n i m u m
r a t e payable as 81/3% of their total salary in spite of profit or loss incurred by the
industry
.c) Incentives festivals allowances, concessions etc requires a hike every now and then,
workers compare these benefits with other industries and demand them without
comparing the capacity of the industry where they are working.
2) Non financial aspects
a ) W o r k i n g h o u r s , r e s t h o u r s , Tr a v e l i n g h o u r s a r e s o u r c e o f d i s p u t e s .
I f h o u s e s a r e provided some section of workers want to include travel time also as
working hours.
b) Introduction of machines, computers modernization, and automation In effect any
act of management which may result in economy in man power is resisted
c) More facilities like free meals free group travel etc are sought every now and then
3) Administrators Causes
a) Non implementation of agreements awards and other local settlements with full
sprit
b) Stifling with recognition of labour unions though registered,
c) Attempt to weaken existing trade unions and trying to foist fake unions
d) Un healthy working conditions
e) Lack of skill on the part of leaders supervisors
f) Disproportionate works loads, favoritism
g) Victimization, nepotism attitude of man agement in recruitment, promotion,
transfer etc
h) Instead of re deployment or skill improvement easier way of retrenchm ent
forced voluntary retirement schemes (C.R.S) are adopted.
Text Question
1. What is industrial relation? Explain the objective of Industrial relation? Bring out
the significance of industrial relations?
2. Discuss different approaches to industrial relations?
3. What are the principles of good industrial relations?
4. Explain the role of the Government, Employer and the Trade Union in
maintaining sooth industrial relations?