CONTENTS

INTRODUCTION

CONCEPT OF IR SYSTEM OF IR SCOPE FOR IR OBJECTIVES OF IR MEASURES TO IMPROVE IR CASE STUDY

INTRODUCTION 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). CONCEPT OF INDUSTRIAL RELATIONS The term Industrial Relations comprises of two terms: Industry and Relations. 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 industry between the employer and his workmen. 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. Industrial relations are basically the interactions between employers, employees and the government, and the institutions and associations through which such interactions are mediated. 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 arises. INDUSTRIAL RELATION SYSTEM An industrial relations system consists of the whole gamut of relationships between employees and employees and employers which are managed by the means of conflict and cooperation. Actors in the IR system: Three main parties are directly involved in industrial relations: Employers: Employers possess certain rights vis--vis labors. They have the right to hire and fire them. Management can also affect workers interests 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 the

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

SCOPE OF IR The concept of industrial relations has a very wide meaning and connotation. In the narrow sense, it means that the employer, employee relationship confines itself to the relationship that emerges out of the day to day association of the management and the labor. In its wider sense, industrial relations include the relationship between an employee and an employer in the course of the running of an industry and may project it to spheres, which may transgress to the areas of quality control, marketing, price fixation and disposition of profits among others. The scope of industrial relations is quite vast. The main issues involved here include the following: 1. 2. 3. 4. 5. Collective bargaining Machinery for settlement of industrial disputes Standing orders Workers participation in management Unfair labor practices

The healthy industrial relations are key to the progress and success. Their significance may be discussed as under Uninterrupted production The most important benefit of industrial relations is that this ensures continuity of production. This means, continuous employment for all from manager to workers. The resources are fully utilized, resulting in the maximum possible production. There is uninterrupted flow of income for all. Smooth running of an industry is of vital importance for several other industries; to other industries if the products are intermediaries or inputs; to exporters if these are export goods; to consumers and workers, if these are goods of mass consumption. Reduction in Industrial Disputes Good industrial relations reduce the industrial disputes. Disputes are reflections of the failure of basic human urges or motivations to secure adequate satisfaction or expression which are fully cured by good industrial relations. Strikes, lockouts, go-slow tactics, gherao and grievances are some of the reflections of industrial unrest which do not spring up in an atmosphere of industrial peace. It helps promoting cooperation and increasing production.

High morale Good industrial relations improve the morale of the employees. Employees work with great zeal with the feeling in mind that the interest of employer and employees is one and the same, i.e. to increase production. Every worker feels that he is a co-owner of the gains of industry. The employer in his turn must realize that the gains of industry are not for him along but they should 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. 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. 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. OBJECTIVES OF IR The main objectives of industrial relations system are: 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. To avoid industrial conflict or strife and develop harmonious relations, which are an essential factor in the productivity of workers and the industrial progress of a country. To raise productivity to a higher level in an era of full employment by lessening the tendency to high turnover and frequency absenteeism. 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

MEASURES TO IMPROVE IR The following measures should be taken to achieve good industrial relations:

Strong and Stable Union:A strong and stable union in each industrial enterprise is essential for good industrial relations. The employers can easily ignore a weak union

on the plea that it hardly represents the workers. The agreement with such a union will hardly be honored by a large section of workforce. Therefore, there must be strong and stable unions in every enterprise to represent the majority of workers and negotiate with the management about the terms and conditions of service. Mutual Trust: Both management and labor should help in the development of an atmosphere of mutual cooperation, confidence and respect. Management should adopt a progressive outlook and should recognize the rights of workers. Similarly, labor unions should persuade their members to work for the common objectives of the organization. Both the management and the unions should have faith in collective bargaining and other peaceful methods of settling disputes. Workers Participation in Management: The participation of workers in the management of the industrial unit should be encouraged by making effective use of works committees, joint consultation and other methods. This will improve communication between managers and workers, increase productivity and lead to greater effectiveness. Mutual Accommodation. The employers must recognize the right of collective bargaining of the trade unions. In any organization, there must be a great emphasis on mutual accommodation rather than conflict or uncompromising attitude. One must clearly understand that conflicting attitude does not lead to amicable labor relations; it may foster union militancy as the union reacts by engaging in pressure tactics. The approach must be of mutual give and take rather than take or leave. The management should be willing to co-operate rather than blackmail the workers. Sincere Implementation of Agreements. The management should sincerely implement the settlements reached with the trade unions. The agreements between the management and the unions should be enforced both in letter and spirit. If the agreements are not implemented then both the union and management stop trusting each other. An environment of uncertainty is created. To avoid this, efforts should be made at both ends to ensure the follow up of the agreements. Sound Personnel Policies: The following points should be noted regarding the personnel policies. The policies should be:
o o

Formulated in consultation with the workers and their representatives if they are to be implemented effectively. Clearly stated so that there is no confusion in the mind of anybody.

Governments Role: The Government should play an active role for promoting industrial peace. It should make law for the compulsory recognition of a representative union in each industrial unit. It should intervene to settle disputes if the management and the workers are unable to settle their disputes. This will restore industrial harmony. Progressive Outlook: There should be progressive outlook of the management of each industrial enterprise. It should be conscious of its obligations and responsibilities to the owners of the business, the employees, the consumers and the nation. The management must recognize the rights of workers to organize unions to protect their economic and social interests.

EXAMPLE
KARNATAKA POWER TRANSMISSION CORPORATION LTD. & ANR. Vs. THE AMALGAMATED ELECTRICITY CO. LTD. & ORS.

Decision of the Karnataka High Court is challenged in these appeals. The first respondent, the Amalgamated Electricity Company Ltd., was engaged in supply of electricity in Belgaum city. In the year 1971, there arose some labour dispute. According to the workmen the Company declared a lockout, whereas the management of the first respondent Company contended that some of the workers had resorted to strike and refused to come for work. By the end December, 1971, the management of the first respondent-Company started the business with about 65 workmen and the other workers were not allowed to join duty. The first respondent- Company contended that these workers were offered employment, but they refused to join duty. Disputes relating to these issues were referred to the Industrial Tribunal and in I.D. No. 11/71, the Industrial Tribunal, Bangalore, passed an award on 17.2.1978 and it was held that there wasno lockout declared by the first respondent-Company. Meanwhile, on 18.12.1974, pursuant to the KarnatakaElectricity Undertaking (Acquisition) Act,1974, the management of the first respondent,Amalgamated Electricity Company Ltd., was taken over by the Karnataka Electricity Board whereby all the assets and liabilities of the Amalagamated Electricity Company Ltd. vested with the Karnataka Electricity Board. According to the workmen, 29 employees offered themselves to work with the Karnataka Electricity Board, but they were not allowed to work.The appellant, Karnataka Electricity Board, contended that these workers could not be allowed to join duty in view of the then pending Industrial Dispute. After the passing of the award in I.D.No. 11/71, the workmen again made a demand that they must be permitted to join duty in the Karnataka Electricity Board. However, the workmen were not allowed to join duty and in view of the demand made by the workers, a fresh Reference was made as to whether the management of M/s Amalgamated Electricity Company Ltd., Belgaum and the Karnataka Electricity Board, were justified in refusing employment to the 29 workmen named therein, with effect from 25.3.1971. The Industrial Tribunal at Hubli passed its award on 6.3.1991. It held that except one worker,K.S.Shinde, who was in gainful employment elsewhere, all other workers were entitled to reinstatement and 50% of the back wages from 7.10.1978 till their reinstatement.

The award of the Industrial Tribunal was challenged before the High Court and the learned Single Judge refused to interfere with the award. In an appeal filed against the

judgment of the learned Single Judge, the Division Bench also refused to interfere with the award passed by the Tribunal. Hence these appeals. We heard the learned counsel for the appellant, Karnataka Electrcity Board and also the counsel for the first respondent-Company. Learned counsel for the appellant contended that in view of the earlier Reference, namely, I.D. 11/71, the second Reference was wholly unnecessary and as it was on the same subject matter, the general principles of res judicata would apply. Therefore, he contended that the award passed in I.D. 32/86 is not enforceable inlaw.The 29 workers were admittedly the workers of the Amalgamated Electricity Company Ltd., which was engaged in the supply of electricity in Belgaum.The counsel for the appellant contended that there was an illegal strike and despite the offer made by the appellant, the workers refused to join duty. The learned counsel for the workmen, on the other hand, contended that there was an illegal lockout and in spite of the fact that these workers were willing to work, they were denied employment from 25.3.1971 onwards. In the Reference under I.D. No. 11/71, the dispute was whether there was a lockout or not by the first respondent-Company and it was held that there was no lock-out as alleged by the workmen. It may be noted that the workmen were not allowed to work right from 25.3.1971. Some of the workers were transferred and some of them are alleged to have been dismissed from service. Therefore, the dispute continued, and in the Second Reference, i.e. in I.D. 32/86, the question for consideration was whether the Amalgamated Electricity Company or its successor-in-interest,Karnataka Electricity Board, was justified in refusing employment to the workmen. We do not think that the subsequent Reference under I.D. 32/86 had anything to do with the earlier Reference made as I.D. 11/71. The second Reference was warranted in view of the stand taken by the Amalgamated Electricity Company and the Karnataka Electricity Board that these workmen were not entitled to join duty. Therefore, we do not think that the principles of res judicata have got any application in the instant case. It was further contended that there was a delay of several years in raising the dispute and, therefore, the Tribunal should not have directed reinstatement of all these workers. It was also contended that at the time of acquisition and taking over of the management of the Amalgamated Electricity Company, these workmen were not the workers of the Amalgamated Electricity Company and,therefore, the Karnataka Electricity Board has no legal obligation to reinstate them in service. It is true that these workmen were not working in the Amalgamated Company at the time when the management of the Company was taken over on 18.12.1974 as they were illegally denied employment. Nevertheless, the Company was legally bound to reinstate these workers as early as from 25.3.1971. The award of the Tribunal shows that they were illegally denied employment with effect from 25.3.1971. When the Karnataka Electricity Board took-over the management of the Amalgamated Electricity Company, these workers made themselves available for work, but they were not allowed to join duty by the Karnataka Electricity Board.The entire assets

and liabilities of the Amalgamated Electricity Company were taken over by the Karnataka Electricity Board.Even as per Section 25 FF of the Industrial Disputes Act,1947, where the ownership or management of an undertaking is transferrred, whether by agreement or by operation of law,from the employer in relation to that undertaking to a new employer, every workman who has been in continuous service for not less than one year in that undertaking immediately before such transfer shall be entitled to notice and compensation in accordance with the proivisions of Section 25 F thereof. These workers were not paid any such compensation as per Section 25 F. Their services should be deemed to have been not interrupted by such transfer.Had the Amalgamated Electricity Company Ltd. been functioning in Belgaum, the said Company would have been legally bound to engage these workers as their workmen by virtue of the award passed by the Tribunal. The Karnataka Electricity Board being the successor-in-interest is bound to reinstate these workers as per the award passed by the Tribunal. In the instant case, the workmen sought reference of the dispute long after it arose between the parties.Therefore, the appellant Karnataka Electricity Board contended that the workers should not be allowed back-wages.It was also pointed out that this Court in similar cases had even awarded back wages only upto 25%.In the instant case,the back wages have been directed to be paid from 7.10.1978 till the date of reinstatement. Many of the employees have now crossed the age of superannuation and only few remain to be reinstated.Having regard to the facts and circumstances of the case, payment of 40% of back wages would meet the ends of justice. We are told that out of 29 workers, 8 persons have died. One K.S. Shinde, S. No.28 in the Statement showing the service particulars of the respondent-workmen, was in gainful employment and held not entitled to get the back wages. Having regard to these facts, we direct the appellant, Karnataka Electricity Board to reinstate M.Y.Lohar (S.No. 8); P.P. Karadi (S.No. 10); K.S. Khade (S.No.14); K.B. Chavan (S.No. 18); Prakash J. Naik (S.No. 19);P.P. Patil (S. NO. 20); B.S. Tamhankar (S.No. 21) and Pratap P. Jamadar (S.No. 22) in service within a period of one month. In the case of P.F. Gawali (S.No. 23 ) the claim for reinstatement is not pressed. The appellant, Karnataka Electricity Board is also directed to give back wages to these employees at the rate of 40% from 7.10.1978 till their reinstatement. Out of the 29 workers have either retired or died. We direct that legal representatives of the deceased workers are entitled to get back wages till the respective dates of death of the deceased workers. The workmen who have retired shall be entitled to get back wages from 7.10.1978 till the notional date of their retirement. The appeals are dismissed accordingly with no order as to costs.