CHPATER: 8 Industrial Relations

Introduction
Industrial relations constitute one of the most delicate and complex problems of the modern
industrial society. This phenomenon of a new complex industrial set-up is directly attributable to
the emergence of Industrial Revolution. The pre-industrial revolution period was characterized
by a simple process of manufacture, small scale investment, local markets and small number of
persons employed. All this led to close proximity between the manager and the managed. Due to
personal and direct relationship between the employer and the employee it was easier to secure
cooperation of the latter. Any grievance or misunderstanding on the part of either party could be
promptly removed. Also, there was no interference by the State in the economic activities of the
people. Under such a set-up industrial relations were simple, direct and personal. This situation
underwent a marked change with the advent of industrial revolution size of the business
increased needing investment of enormous financial and human resources, there emerged a new
class of professional managers causing divorce between ownership and management, and
relations between the employer and the employer became entranged and gradually antagonistic.
This new set-up rendered the old philosophy of industrial relation irrelevant and gave rise to
complex, indirect, and impersonal industrial relations.

Industry today is neither viewed as a venture of employers alone nor profit if considered as its
sole objective. It is considered to be a venture based on purposeful cooperation between
management and labour in the process of production and maximum social good is regarded as its
ultimate end and both management and employees contribute in their own way towards its
success. Similarly, labour today is no more an unorganized mass of ignorant works ready to obey
without resentment or protest the arbitrary and discretionary dictates of management. The
management has to deal with employees today nto as individuals but also as members of
organized social groups who are very much conscious about their rights and have substantial
bargaining strength. Hence, the objective of evolving and maintaining sound industrial relations
is not only to find our ways and means to solve conflicts to resolve differences but also to secure
the cooperation among the employees in the conduct of industry.
But maintaining smooth industrial relation is not an easy task. Almost all the industrialized
countries of he world fact the problem of establishing and maintaining good management worker
relationships in their industries. Each country has sought to find our solution, depending upon its
economic, social and political environment. However, industrial conflict still arises and therefore
establishment and maintenance of satisfactory industrial relations forms an important plank in
the personnel policies of modern organization.

Meaning
In the broad sense, industrial relations cover all such relationships that a business enterprise
maintains with various sections of the society such as workers, state, customers and public who
come into its contact.
In the narrow sense, it refers to all types of relationships between employer and employees,
trade union and management, works and union and between workers and workers. It also
includes all sorts of relationships at both formal and informal levels in the organization.
The term industrial relations has been variously defined. J.T. Dunlop defines industrial
relations as the complex interrelations among managers, workers and agencies of the
governments. According to Dale Yoder industrial relations is the process of management
dealing with one or more unions with a view to negotiate and subsequently administer collective
bargaining agreement or labour contract.
In indusial relations, therefore, one seeks to study how people get on together at their work, what
difficulties arise between them, how their relations including wages and working conditions etc.,
are regulated. Industrial relations, thus, include both industrial relations and collective
relations as well as the role of the state in regulating these relations. Such a relationship is
therefore complex and multidimensional resting on economic, social, psychological, ethical,
occupational, political and legal levels. There are mainly two set of factors that determine the
state of industrial relations whether good or poor in any country. The first set of factors,
described as institutional factors include type of labour legislation, policy of state relating to
labour and industry, extent and stage of development of trade unions and employers
organizations and the type of social institutions. The other set of factors, described as economic
factors include the nature of economic organization capitalist, socialist technology, the sources
of demand and supply in the labour market, the nature and composition of labour force etc.

Significance of Industrial Relations

Maintenance of harmonious industrials relations is on vital importance for the survival and
growth of the industrials enterprise. Good industrial relations result in increased efficiency and
hence prosperity, reduced turnover and other tangible benefits to the organization. The
significance of industrial relations can be summarized as below:
1. It establishes industrial democracy: Industrial relations means settling employees
problems through collective bargaining, mutual cooperation and mutual agreement
amongst the parties i.e., management and employees unions. This helps in establishing
industrial democracy in the organization which motivates them to contribute their best to
the growth and prosperity of the organization.

2. It contributes to economic growth and development: Good industrial relations lead to

increased efficiency and hence higher productivity and income. This will result in
economic development of the economy.
3. It improves morale of he work force: Good industrial relations, built-in mutual
cooperation and common agreed approach motivate one to contribute ones best, result in
higher productivity and hence income, give more job satisfaction and help improve the
morale of the workers.
4. It ensures optimum use of scare resources: Good and harmonious industrial relations
create a sense of belongingness and group-cohesiveness among workers, and also a
congenial environment resulting in less industrial unrest, 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 unions: Industrial
relations involve setting up a machinery to solve problems confronted by management
and employees through mutual agreement to which both these parties are bound. This
results in banning of the unfair practices being used by employers or trade unions.
6. It prompts enactment of sound labour legislation: Industrial relations necessitate
passing of certain labour laws to protect and promote the welfare of labour and safeguard
interests of all the parties against unfair means or practices.
7. It facilitates change: Good industrial relations help in improvement of cooperation, team
work, performance and productivity and hence in taking full advantages of modern
inventions, innovations and other scientific and technological advances. It helps the work
force to adjust themselves to change easily and quickly
Causes of Poor Industrial Relations
Perhaps the main cause or source of poor industrial relations resulting in inefficiency and labour
unrest is mental laziness on the part of both management and labour. Management is not
sufficiently concerned to ascertain the causes of inefficiency and unrest following the laissezfaire policy, until it is faced with strikes and more serious unrest. Even with regard to methods of
work, management does not bother to devise the best method but leaves it mainly to the
subordinates to work it out for themselves. Contempt on the part of the employers towards the
workers is another major cause. However, the following are briefly the causes of poor industrial
relations:
1. Mental inertia on the part of management and labour;
2. An intolerant attitude of contempt of contempt towards the workers on the part of
management.

3. Inadequate fixation of wage or wage structure;

4. Unhealthy working conditions;
5. Indiscipline;
6. Lack of human relations skill on the part of supervisors and other managers;
7. 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;
8. Inappropriate introduction of automation without providing the right climate;
9.

Unduly heavy workloads;

10. Inadequate welfare facilities;

11. Dispute on sharing the gains of productivity;
12. Unfair labour practices, like victimization and undue dismissal;
13. Retrenchment, dismissals and lock-outs on the part of management and strikes on the part
of the workers;
14. Inter-union rivalries; and
15. General economic and political environment, such as rising prices, strikes by others, and
general indiscipline having their effect on the employees attitudes.
Objectives of Industrial Relations
1. To bring better understanding and cooperation between employers and workers.
2. To establish a proper channel of communication between workers and management.
3. To ensure constructive contribution of trade unions.
4. To avoid industrial conflicts and to maintain harmonious relations.
5. To safeguard the interest of workers and the management.
6. To work in the direction of establishing and maintaining industrial democracy.
7. To ensure workers participation in decision-making.
8. To increase the morale and discipline of workers.
9. To ensure better working conditions, living conditions and reasonable wages.

10. To develop employees to adapt themselves for technological, social and economic
changes.
11. To make positive contributions for the economic development of the country.
Scope
The scope of industrial relations includes all aspects of relationships such as bringing cordial and
healthy labour management relations, creating industrial peace and developing industrial
democracy.
The cordial and healthy labour management relations could be brought in

by safeguarding the interest of the workers;

by fixing reasonable wages;

by providing good working conditions;

by providing other social security measures;

by maintaining healthy trade unions;

by collective bargaining.

The industrial peace could be attained

by setting industrial disputes through mutual understanding and agreement;

by evolving various legal measure and setting up various machineries such as Works
Committee, Boards of Conciliation, Labour Courts etc.

The industrial democracy could be achieved

by allowing workers to take part in management; and

by recognition of human rights.

Principle of Good Industrial Relations

The willingness and ability of management and trade unions to deal with the problems
freely, independently and with responsibility.

Recognition of collective bargaining.

Desirability of associations of workers and managements with the Government while

formulating and implementing policies relating to general economic and social measures
affecting industrial relations.

Fair redressal of employee grievances by the management

Providing satisfactory working conditions and payment of fair wage.

Introducing a suitable system of employees education and training.

Developing proper communication system between management and employees.

To ensure better working conditions, living conditions and reasonable wages.

To develop employees to adapt themselves for technological, social and economic

changes.

To make positive contributions for the economic development of the country.

Grievance in Industry:
Grievance means any type of dissatisfaction or discontentments arising out of factors related to
an employees job which he thinks are unfair. A grievance arises when an employee feels that
something has happened or is happening to him which he thinks is unfair, unjust or inequitable.
In an organization, a grievance may arise due to several factors such as:
Violation of managements responsibility such as poor working conditions
Violation of companys rules and regulations
Violation of labor laws
Violation of natural rules of justice such as unfair treatment in promotion, etc.
Various sources of grievance may be categorized under three heads: (i) management policies, (ii)
working conditions, and (iii) personal factors
1. Grievance resulting from management policies include:
o Wage rates
o Leave policy

o Overtime
o Lack of career planning
o Role conflicts
o Lack of regard for collective agreement
o Disparity between skill of worker and job responsibility

2. Grievance resulting from working conditions include:

o Poor safety and bad physical conditions
o Unavailability of tools and proper machinery
o Negative approach to discipline
o Unrealistic targets

3. Grievance resulting from inter-personal factors include

o Poor relationships with team members
o Autocratic leadership style of superiors
o Poor relations with seniors
o Conflicts with peers and colleagues
It is necessary to distinguish a complaint from grievance. A complaint is an indication of
employee dissatisfaction that has not been submitted in written. On the other hand, a
grievance is a complaint that has been put in writing and made formal.
Grievances are symptoms of conflicts in industry. Therefore, management should be
concerned with both complaints and grievances, because both may be important indicators of
potential problems within the workforce. Without a grievance procedure, management may
be unable to respond to employee concerns since managers are unaware of them. Therefore, a
formal grievance procedure is a valuable communication tool for the organization.
Grievance procedure is a formal communication between an employee and the management

designed for the settlement of a grievance. The grievance procedures differ from organization
to organization.
1. Open door policy
2. Step-ladder policy
Open door policy: Under this policy, the aggrieved employee is free to meet the top executives
of the organization and get his grievances redressed. Such a policy works well only in small
organizations. However, in bigger organizations, top management executives are usually busy
with other concerned matters of the company. Moreover, it is believed that open door
policy is suitable for executives; operational employees may feel shy to go to top
management.
Step ladder policy: Under this policy, the aggrieved employee has to follow a step by step
procedure for getting his grievance redressed. In this procedure, whenever an employee is
confronted with a grievance, he presents his problem to his immediate supervisor. If the
employee is not satisfied with superiors decision, then he discusses his grievance with the
departmental head. The departmental head discusses the problem with joint grievance
committees to find a solution. However, if the committee also fails to redress the grievance,
then it may be referred to chief executive. If the chief executive also fails to redress the
grievance, then such a grievance is referred to voluntary arbitration where the award of
arbitrator is binding on both the parties.
GRIEVANCE PROCEDURE IN INDIAN INDUSTRY
The 15th session of Indian Labor Conference held in 1957 emphasized the need of an
established grievance procedure for the country which would be acceptable to unions as well
as to management. In the 16th session of Indian Labor Conference, a model for grievance
procedure was drawn up. This model helps in creation of grievance machinery. According to
it, workers representatives are to be elected for a department or their union is to nominate
them. Management has to specify the persons in each department who are to be approached
first and the departmental heads who are supposed to be approached in the second step. The
Model Grievance Procedure specifies the details of all the steps that are to be followed while
redressing grievances. These steps are:
STEP 1: In the first step the grievance is to be submitted to departmental representative, who
is a representative of management. He has to give his answer within 48 hours.
STEP 2: If the departmental representative fails to provide a solution, the aggrieved
employee can take his grievance to head of the department, who has to give his decision
within 3 days.
STEP 3: If the aggrieved employee is not satisfied with the decision of departmental head, he
can take the grievance to Grievance Committee. The Grievance Committee makes its
recommendations to the manager within 7 days in the form of a report. The final decision of

the management on the report of Grievance Committee must be communicated to the

aggrieved employee within three days of the receipt of report. An appeal for revision of final
decision can be made by the worker if he is not satisfied with it. The management must
communicate its decision to the worker within 7 days.
STEP 4: If the grievance still remains unsettled, the case may be referred to
voluntary arbitration.

Collective Bargaining
Collective bargaining is process of joint decision making and basically represents a democratic
way of life in industry. It is the process of negotiation between firms and workers
representatives for the purpose of establishing mutually agreeable conditions of employment. It
is a technique adopted by two parties to reach an understanding acceptable to both through the
process of discussion and negotiation.
ILO has defined collective bargaining as, negotiation about working conditions and terms of
employment between an employer and a group of employees or one or more employee,
organization with a view to reaching an agreement wherein the terms serve as a code of
defining the rights and obligations of each party in their employment/industrial relations with
one another.
Collective bargaining involves discussions and negotiations between two groups as to the terms
and conditions of employment. It is called collective because both the employer and the
employee act as a group rather than as individuals. It is known as bargaining because the
method of reaching an agreement involves proposals and counter proposals, offers and counter
offers and other negotiations.
Thus collective bargaining:

is a collective process in which representatives of both the management and employees

participate.

is a continuous process which aims at establishing stable relationships between the parties
involved.

not only involves the bargaining agreement, but also involves the implementation of such
an agreement.

attempts in achieving discipline in the industry

is a flexible approach, as the parties involved have to adopt a flexible attitude towards
negotiations.

IMPORTANCE OF COLLECTIVE BARGAINING

Collective bargaining plays a vital role in settling and preventing industrial disputes. Specifically
its importance is evident from the following:
1. Increase the economic strength of unions and management.
2. Establish uniform conditions of employment with a view to avoiding industrial
disputes and
maintaining stable peace in the industry.

3. Secure a prompt and fair settlement of grievances.

4. Avoids interruptions in work which follow strikes, go-slow tactics and similar coercive
activities;
5. Lay down fair rates of wages and norms of working conditions;
6. Achieve an efficient operation of the plant;
7. Promote the stability and prosperity of the industry;
8. Provides a method or the regulation of the conditions of employment of those who are directly
concerned about them;
9. It provides a solution to the problem of sickness in industry, and ensure old age pension
benefits and other fringe benefits;
10. It creates new and varied procedures for the solution of the problems as and when they arise problems which vex industrial relations; and its form can be adjusted to meet new situations.
Since basic standards are laid down, the employee is assured that he will be required to work
under the stipulated audit;
11. It provides a flexible means for the adjustment of wages and employment conditions to
economic and technological changes in the industry, as a result of which the chances for conflicts
are reduced.
12. As a vehicle of industrial peace, collective bargaining has no equal. It is the most important
and significant aspect of labor-management relations, and extends the democratic principle from
the political to the industrial field.

13. It builds up a system of industrial jurisprudence by introducing civil rights in industry. In

other words, it ensures that management is conducted by rules rather than by arbitrary decisions;

Need for Collective Bargaining

(a) A high degree at collective bargaining as measured in terms of the proportion of workers
covered by collective agreements;
(b) Qualitative conduct of the parties to collective bargaining both before a situation warranting
negotiations develops and the methods followed at the time of arriving at agreements;
(c) The right priorities assigned to different methods in the agreement and their changing pattern
over time; and
(d) A structure of bargaining with emphasis on central bargaining which is purported to give
some order and stability to labor management relations.
ESSENTIALS FOR SUCCESSFUL COLLECTIVE BARGAINING:
1

Mutual Recognition
In the first phase, recognition of union by management is of great importance. A trade
union should be recognized. Collective bargaining cannot begin until union is recognized
and regarded as an integral part of industrial relations. Similarly union should not pursue
the militant aggressive strategy. Since collective bargaining is a two way process it is
necessary for both to shed their suspicion for each other and recognize each other in good
faith.

Mutual accommodation:
Heat of collective bargaining is the process for continuous joint consideration and
adjustment of plant problems. There has to be a greater emphasis on mutual
accommodation rather than conflict. The approach must be of mutual give and take
rather take it or leave it.

Single strong union:

A strong and stable union is an essential for the success of collective bargaining. The
employers can easily ignore a weak union on the plea that it hardly represents the
workers. Further, rivalry among unions also thwarts the development of collective
bargaining. Rival unions make it more difficult to introduce collective bargaining.

Efficient and permanent bargaining machinery:

The bargaining machinery must be efficient and permanent. No ad-hoc arrangements are
satisfactory because bargaining is a continuing process. An agreement is merely a
framework for every day working relationships, the main bargain is carried on daily and
for this, there is a need to have permanent machinery. As for machinery being efficient, it
has three aspects: (a) availability of full information; (b) selection of proper
representatives; and (c) recognition of natural temperament of each other.

Bargainers must have authority:

To procedures must be developed to assure that negotiators are known to have authority
to bind their constituents. If bargaining representatives have to refer constantly back to
their respective organizations, it makes bargaining process most ridiculous and
ineffective, because parties know by experience that bargaining team is only a showpiece
and not the real authority. The technical character of contemporary bargaining requires
that negotiations be conducted by top union leaders and top management in most cases.

Political climate:
Finally if collective bargaining has to be fully effective, a favorable political climate must
exist. The particular government must be convinced of bargainings positive
contribution. If encouraging attitude of government exists, it does everything to facilitae
bargaining process such as providing facility for starting unions, giving them recognitions
and providing machinery for the settlement of dispute, mediation and conciliation.
However, the role of state has to be minimum because collective bargaining is primarily
two way process more concerned with micro aspects.

CAUSES OF LIMITED SUCCESS OF CB IN INDIA/ FAILURE:

Problems with unions:
1. CB mainly depends on the strength of unions.
2. Weak trade unions cannot initiate strong arguments during negotiations.
3. Not many strong unions in India.
Indian unions are bogged down by the problems of: multiplicity, inter and intra-union rivalry,
weak financial position and non-recognition.
So, unanimous decision is unlikely to be presented at the negotiating table.
Problems from Government:
The Government has not been making any strong efforts for the development of CB.
Imposition of many restrictions regarding strikes and lockouts has removed the `edge` of the CB
process.
Political interference:
Interference of political leaders in all aspects of union matters has increased over the years.
Almost all unions are associating themselves with some political party or the other.

Legal problems:
Now that adjudication is easily accessible, the CB process is losing its importance.
Management attitude:
In India, managements have a negative attitude towards unions.
They do not appreciate their workers joining unions.
Suggestions for better functioning of CB:
The Indian Institute of Personnel Management has offered the following suggestions:
1. A progressive and strong management that is conscious of its obligations and responsibilities
to the various stakeholders.
2. A truly representative enlightened and strong trade union should come into being and
should function on strictly constitutional lines.
3. There should be unanimity between labor and management on the basic objectives of the
organization and a mutual recognition of their rights and obligations.
4. When there are several units of the company, there should be a delegation of authority to the
local management.
5. A fact-finding approach and a willingness to use new tools should be adopted for the solution
of industrial problems.

Industrial Disputes
Meaning
According to Section 2(K) of the Industrial Disputes Act, 1947, and industrial dispute means
any dispute or difference between employers and employees or between employers and
workmen or between workmen and workmen, which is connected with the employment or nonemployment or the terms of employment or with the conditions of labour of any person.
Thus form the legal point of view, industrial dispute does not merely refer to difference between
labour and capital as is generally thought, but it refers to differences that affect groups of
workmen and employers engaged in an industry. Essentially, therefore, the differences of
opinions between employers and workmen in regard to employment, non-employment, terms of
employment or the conditions of labour where the contesting parties are directly and
substantially interested in maintaining their respective contentious constitute the subject-matter
of an industrial dispute.

Causes of Industrial Disputes

The causes of industrial conflict or disputes have been much varied. These may be described
partly a psychological or social and partly political, but predominantly economic. Some
important factors responsible for industrial conflict and poor industrial relations many be briefly
stated as follows:

Managements general apathetic towards workers or employees because of their

contention that they want more and more economic or monetary rewards and want to do
less work.

Mental inertia on the part of both management and labour.

Lack of proper fixation of wages inconformity with cost of living and a reasonable wage
structure generally.

Bad working conditions.

Attempts by management to introduce changes (such a rationalization, modernization or

automation) without creating a favourable to appropriate climate or environment for the
same.

Lack of competence or training on the part of first-line supervision as well management

at upper levels in the practice of human relations.

Assignment of unduly heavy work-loads to worker, unfair labour practices (such as

victimization or undue dismissal).

Lack of strong and healthy trade unionism, lack of a proper policy of union recognition
and inter-union rivalries.

A spirit of non-cooperation and a general tendency among employees to criticize or

oppose managerial policies or decisions even when they may be in the right directions.

A fall in the standard of discipline among employees largely due to wrong or improper
leadership, often resulting in insubordination or disobedience on the part of employees.

Difference in regard to sharing the gains of increased productivity.

Inadequate collective bargaining agreements.

Legal complexities in the industrial relations machinery or settlement of industrial

disputes.

Lack of necessary changes in the working of government in accordance with changing

needs and circumstances.

Combination of too much law and too little respect for law even at high levels.

Growing factional and personal difference among rank-and-file employees who are union
members or union leaders and a tendency on the part of the management in some cases to
prefer having with outside leaders and not give due respect to worker-leaders.

Political environment of the country; and

Agitation and wrong propaganda by selfish labour leaders to further their own interests of
their own party.

Forms of Disputes
Strikes, lockouts and gheraos are the most common forms of disputes.
Strike
Strike means a cessation of work by a body of persons employed in any industry acting in
combination; or a concerted refusal or a refusal under a common understanding or an number of
persons who are or have been so employed to continue to work or to accept employment.
The following points may be noted regarding the definition of strike:

Strike can take place only when there is a cessation of work or refusal to work by the
workmen acting in combination or in a concerted manner.

A concerted refusal or a refusal under a common understanding of any number of persons

to continue to work or to accept employment will amount to a strike. A general strike is
one when there is a concert of combination of workers stopping or refusing to resume
work. Going on mass casual leave under a common understanding amounts to a strike.

If on the sudden death of a fellow-worker, the workmen acting in concert refuse to

resume work, it amounts to a strike (National Textile Workers Union Vs. Shree
Meenakshi Mills (1951) II L.L.J. 516).

The striking workman, must be employed in an industry which has not been closed
down.

Even when workmen cease to work, the relationship of employers and employees is
deemed to continue albeit in a state of belligerent suspension.

Types of Strike

Stay-in, sit-down, pen-down strike: In all such cases, the workmen after taking their seats,
refuse to do work. All such acts on the part of the workmen acting in combination,
amount to a strike.

Go-slow: Go-slow does not amount to strike, but it is a serious case of is conduct.

Sympathetic strike : Cessation of work in the support of the demands of workmen

belonging to other employer is called a sympathetic strike. The management can take
disciplinary action for the absence of workmen. However, in Remalingam Vs. Indian
Metallurgical Corporation, Madras, 1964-I L.L.J.81, it was held that such cessation of
work will not amount to a strike since there is no intention to use the strike against the
management.

Hunger strike: Some workers may resort to fast on or near the place of work or residence
of the employers. If it is peaceful and does not result in cessation of work, it will not
constitute a strike. But if due to such an fact, even those present for work, could not be
given work, it will amount to strike (Pepariach Sugar Mills Ltd. Vs. Their Workmen).

Lightning or wildcat strike: A wildcat strike is an unofficial strike i.e. a strike not
sanctioned by the union. Such strikes occasionally occur in violation of the no-strike
pledge in collective bargaining agreements. In such a situation union is obliged to use its
best efforts to end the strike. Such strikes are prohibited in public utility services under
Section 22 of the Industrial Disputes Act, 1947. Further, the standing order of a company
generally required for notice.

Work-to-rule: Since there is a no cessation of work, it does not constitute a strike.

Lockout
Section 2(1) of the Industrial Disputes Act, 1947 defines lockout to mean the temporary
closing of a place of employment or the suspension of work, or the refusal by an employers to
continue to employ any number of persons employed by him, lockout, thus, is the counterpart of
strike the corresponding weapon the hands of employer to resist the collective demands of
workmen or to enforce his terms. It has been held by the courts that the suspension of work as a
disciplinary measure does not amount to lockout. Similarly, temporary suspension of work called
lay-off is not lock-out.
Gherao
Gherao means encirclement of the managers to criminally intimidate him to accept the demands
of the workers. It amounts to criminal conspiracy under Section 120-A of the I.P.C. and is not
saved by Sec. 17 of the Trade Unions Act on the grounds of its being a concerted activity.

Regulation of strikes and lock-outs

Employees do not have an unfettered right to go on strike nor do employers have such right to
impost lockout. The Industrial Disputes Act lays down several restrictions on the rights of both
the parties. A strike or lockout commenced or continued in contravention of those restriction is
termed illegal and there is serve punishment provided for the same.
Illegal strikes and lockout are of two types:

Those which are illegal form the time of their commencement; and

Those which are not illegal at the time of commencement but become illegal
subsequently.
Section 22 and 23 of the IDA provide for certain restriction which if not followed make
strikes and lockouts illegal from their very commencement.
According to this section, no person employed shall go on strike in breach of contract-

Without giving notice of strike to the employer, as here matter provided, within 6 week
before striking; or

Within fourteen days of giving such notice; or

Before the expiry of the date of strike specified in any such notice as aforesaid; or

During the pendency of any conciliation proceedings before a Conciliation Officer and
seven days after the conclusion of such proceedings.

Consequences of illegal strikes and lock-outs.

1. Penalty for illegal strikes [Sec.26(1)]: Any workman who commences, continues or
otherwise acts in furtherance of a strike which is illegal, shall be punishable with
imprisonment for a term which may extend to 1 month, or with fine which may extend to
Rs. 50, or with both.

2. Penalty for illegal lock-out [Sec.26(2): Any employer who commences, continues or
otherwise acts in furtherance of a lock-out which is illegal, shall be punishable with
imprisonment for a term which may extend to 1 month, or with fine which may extend to
Rs. 1,000 or with both.

3. Penalty for instigation, etc. [Sec. 27]: Any person who instigates or incites others to take
part in, or otherwise acts in furtherance of, a strike or lock-out which is illegal, shall be
punishable with imprisonment for a term which may extend to 6 months, or with fine
which may extend to Rs. 1,000 or with both.
4. Penalty for giving financial aid for illegal strikes and lock-outs [Sec. 28] : Any person
who knowingly expends or applies any money in direct furtherance or support of any
illegal strike or lock-out shall be punishable with an imprisonment for a term which may
extend to 6 months, or with fine which may extend to Rs. 1,000 or with both.
Machinery for Prevention and Settlement of Industrial Relations
The machinery for prevention and settlement of the disputes has been given in the following
figure:
Machinery for Prevention and Settlement of Industrial Relations

Voluntary Methods

Statutory Measures

Government Machinery

Code of Discipline
Tripartite Machinery
Collective Bargaining
Workers Participation

I.D. Act, 1947

State Acts

Labour Administration
(States & Central Levels)
Works Committee
Voluntary Arbitration
Court of Enquiry
Conciliation

Adjudication

Voluntary Methods
Conciliation
Officers
Conciliation Board
Code
of discipline

Labour Court
Industrial Tribunal
National Tribunal

Formally announced in 1958, the Code of Discipline provides guidelines for the workers, unions
and employers. The code which was approved by major national trade unions and principal
organisation of employers enjoyed on them to create an environment of mutual trust and
cooperation and to settle the disputes by mutual negotiation, conciliation and voluntary
arbitration. It required the employers and workers to utilize the existing machinery for the
settlement of disputes.
A few important provisions of code of discipline are:

Strikes and lockout cannot be declared without proper notice.

The parties should not take any action without consulting each other.

There should be no go slow statistics or any resort to deliberate damage to plant or

property or resort to acts of violence, intimidation, coercion etc.

The code has moral sanction only and it does not entail any legal liability or punishment.
Tripartite machinery
Tripartite machinery consists of various bodies like Indian Labour Conference, the Standing
Labour Committee, the International Committees, the Central Implementation and Evaluation
Committee and the Committee on conventions. Generally, these committees include
representatives from centre and the states, and the same number of workers and employers
organisatoins. These various committees are basically of advisory nature, yet they carry
considerable weight among the government, workers and employers.
Workers participation in management
Workers participation in management is an essential ingredient of industrial democracy. The
concept of workers participation in management is based on Human Relations approach to
management which brought about new set of values to labour and management.
According to one view, workers participation is based on the fundamental concept that the
ordinary workers invest his labour in, and ties his fate to, his place of work and, therefore, he has
a legitimate right to have a share in influencing the various aspects of company policy.
According to G.S. Walpole, participation in management gives the workers a sense of
importance, pride and accomplishment; it gives him the freedom and the opportunity for selfexpression; a feeling of belonging to his place of work and a sense of workmanship and
creativity. It provides for the integration of his interests with those of the management and makes
him a joint partners in the enterprise.
The forms of workers participation in management vary from industry to industry and country to
country depending upon the political system, pattern of management relations and subject or area
of participation. The forms of workers participation may be as follows:
1. Joint Consultation Modes
2. Joint Decision Model
3. Self Management, or Auto Management Scheme
4. Workers Representation on Board

It should be borne in mind that when individuals are provided with opportunities for expression
and share in decision-making, they show much initiative and accept responsibility substantially.
The rationale of workers participation in management lies in that it helps in creating amongst the
workers a sense of involvement in their organisatoin, a better understanding of their role in the
smooth functioning of industry and provides them a means of self-realization, thereby, promoting
efficiency and increased productivity.
Collective bargaining
Collective bargaining is a source of solving the problems of employees in the work situation
collectively. It provides a good climate for discussing the problems of workers with their
employers. The employees put their demands before the employers and the employers also gives
certain concession to them. Thus it ensures that the management cannot take unilateral decisions
concerning the work ignoring the workers. It also helps the works to achieve reasonable wages,
working conditions, working hours, fringe benefits etc. It provides them a collective strength to
bargain with the employer. It also provides the employer some control over the employees.
The process of collective bargaining is bipartite in nature i.e., the negotiations are between the
employers without a thirds partys intervention. Thus collective bargaining serves to bridge the
emotional and physiological between the workers and employers through direct discussions.
Government Machinery
The Ministry of Labour and Employment at the centre is the key agency for the policy
formulation and administration in all the matters pertaining to labour. The State governments
with the cooperation of their labour departments are responsible for the enforcement thereof. The
Directorate General of Employment and Training (DGET), Office of Chief Labour
Commissioner (CLC) (Central), the Director General of Mines Safety (DGMS), the Director
General of Factory Advice and Labour Institutes, and Industrial Tribunals are some of the
agencies through which the Central Government discharges its functions related to framing of
labour laws and settlement of industrial disputes. The Labour Secretary is the overall incharge of
policy formulation and administration, and commissioners of labour in the States are the
operative arms for the effective implementation of Labour Laws.
Statutory Measures Industrial Disputes Act, 1947
The States are free to frame their own labour laws as the labour falls in the concurrent list, Some
States like Maharashtra, M.P., U.P. and Rajasthan have their own Acts. In the rest of the states,
Industrial Disputes Act, 1947 applies. However, in the States having their own Acts, the IDA,
1947 will be applicable to the industries not covered by the State Legislation. Formally
announced in 1947, the Industrial Disputes Act, has been amended several times since then.
Under the Act the following authorities have been proposed for the investigation and settlement
of industrial disputes.

Works committees
The IDA, 1947 provides for setting up works committees in every organisation having 100 or
more employees. Having representatives of employees and employees, these are consultative
bodies and are set up for maintaining harmonious relations at the work lace and sort out the
difference if any. Though the act does not define the jurisdiction of these committees, yet their
functions mainly include providing proper working conditions and amenities for the welfare of
employees at the work place or away from the work. A work committee aims at promoting
measures for securing the preserving amity and good relations between employees and workers.
Conciliation
When the services of a neural party are availed for the amicable solution of a dispute between the
disputing parties, this practice is known as conciliation. The IDA, 1947 provides for conciliation
and it can be utilized either by appointing Conciliation Officer or by setting up Board or
Conciliation.
The Conciliation Officers are appointed by the Government by notifying in the Official Gazettee.
Usually at the State level, Commissioners of Labour, Additional and Deputy Commissioners of
Labour act as Conciliation Officer for disputes arising in any undertaking employing less than
twenty workers. In the conciliation process the officer ties to bring the disputing parties together
towards a settlement of the dispute and hence works as a mediator. The intervention of
conciliation officer may e mandatory or discretionary. But in the disputes related to public
utilities in respect of which proper notice is served to him, his intervention becomes mandatory.
The Board of Conciliation is a higher forum and is constituted for a specific dispute. It consists
of equal number of representatives of employers and employees under the chairmanship of an
independent person, appointed by the government. The Board has to submit its report to the
government regarding the dispute within two months from the date dispute was referred to it.
However, depending on the case, the period can be extended.
Voluntary arbitration
Industrial Disputes (Amendment) Bill, 1956 incorporated Section 10A favouring voluntary
arbitration. In case of existed or apprehended dispute, the disputing parties can enter into an
arbitration agreement in writing. The success of voluntary arbitration depends on a sufficient
degree of mutual confidence in decision by agreement on subjects which may be submitted for
arbitration.
Court of enquiry
The IDA, 1947 empowers the appropriate government to constitute a Court of Enquiry. This
body basically is a fact-finding agency, constituted just to reveal the causes of the disputes and
does not care much for the settlement thereof. The Court of Enquiry is required to submit its

report to the government ordinarily within six months from the commencement of enquiry. The
report of the court shall be published by the government within 30 days of its receipt.
Adjudication
If the dispute is not settled by any other method, the government may refer it for adjudication.
Hence it is a compulsory method which provides for three-tier system for adjudication of
industrial disputes. This machinery consists of Labour Court, Industrial Tribunals and National
Tribunal. The first two bodies can be set up either by State or Central Government but the
National Tribunal can be constituted by Central Government only, when it thinks that the
solution of dispute is of national significance. A Labour Court consists of one person only, called
Presiding Officer, who is or has been a judge of a High Court. The jurisdiction of Industrial
Tribunal is comparatively wider than Labour Courts, and further the Presiding Officer of
Tribunal can have two assessors may be appointed by the Central Government to help its
Presiding Officer.
Labour Courts and Tribunals are now required to submit award to the appropriate government
within three months in case of individual disputes The submitted award shall be published by
government within 30 days from the date of its receipt. It shall come into force on the expiry of
30 days from the date if its publication and shall be operative for a period of one year, unless
declared otherwise by the appropriate government.

asures
- Non-implementation of agreements and awards etc.

SIGNIFICANT TRENDS IN INDUSTRIAL DISPUTES AND THE

RESULTANT MANDAYS LOST
1.1
Industrial Disputes in the Public and Private Sectors of both Central
and State Spheres:
The number of disputes (strikes and disputes); workers
involved and mandays lost in Public Sector constitutes 12.5; 70.0 and 7.8 per cent
respectively of the all-India total number of Disputes, Workers involved and
Mandays lost whereas the Private Sector constituted the highest number of disputes
and mandays lost i.e. 87.5; 92.2 per cent respectively as compared to the public
sector during the year 2005. The number of workers involved in the industrial
disputes in the private sector were only 30 per ncent as compared to the public
sector.
1.2
Industrial Disputes in the Central and State Spheres on All-India
Basis: On all-India basis, it is the State Sphere, which has the highest percentage
of disputes and mandays lost i.e., 89.9 per cent and 92.6 per cent respectively as
compared to the Central Sphere which constituted only 10.1 and 7.4 per cent
respectively. The number of workers involved is higher in the Central Sphere 69.9
per cent than in State Sphere 30.1 per cent.
1.3
Industrial Disputes in 2005 vis--vis 2003 and 2004:
Table A-II
shows the number of strikes and lockouts during 2003 to 2005 in different sectors
and spheres. The numbers of strikes reported during 2005 were 227 (56 in public
and 171 in private sectors) which were lower by 3.8 per cent and 11.0 per cent
respectively as compared to the previous years. Similarly, the number of lockouts,
(229 comprised of 1 in public sector and 228 in private sector) registered a
decrease of 5.0 per cent and 23.0 per cent respectively as compared to the previous
years. Thus, the total number of disputes (456) reported during 2005 were less by
4.4 per cent and 17.4 per cent as compared to the number of disputes during the
years 2004 and 2003.
1.4
Time-loss due to Industrial Disputes in 2003 to 2005:
During the
year 2005 as compared to 2004, the time-loss due to Strikes both of public and
private sectors accounted for an increase of 21.82 per cent whereas Lockouts
registered a significant increase of 100.00 per cent in the Central Sphere, while in
the State Sphere the time-loss due to Strikes registered an increase of 176.37 per

cent and Lockouts decreased by 1.93 per cent during the same period. Average
time-loss per dispute increased from 50034 mandays in 2004 to 65055 mandays in
2005. In the case of strikes it increased considerably from 20461 to 47580
mandays and for lockouts also it increased from 78994 to 82377 mandays per
dispute (Ref. Tables A-II and A-III)
1.4.1
The percentage of mandays lost due to strikes and lockouts by sector /
sphere during 2003 to 2005 have been presented in Tables AIII and AIV. It
can be seen from these tables that under Central Sphere time-loss in public sector
in respect of Strikes has increased by 24.36 per cent whereas Time-loss due to
Strikes in State Sphere decreased by 33.70 per cent under Public Sector. In
respect of Lockouts it increased in Public Sector under Central Sphere by 100 per
cent and decreased by 100 per cent in State Sphere. But under Private Sector of the
State Sphere time-loss due to Strikes increased by 189.83 per cent and decreased in
Central sphere by 87.23 per cent respectively. The Time-loss due to Lockouts
under Private sector in State Sphere decreased by 1.90 per cent over the previous
year. Table A-IV shows percentage time-loss by sectors and spheres due to strikes
and lockouts for the years 2003 to 2005.