MANAGING HUMAN RESOURCES 2.

MODULE 5
MANAGING EMPLOYEE RELATIONS
07 Hours
Employee Relations: Meaning & Characteristics – Parties to Industrial relations – Theoretical
Perspectives on Industrial Relations – Nature of Trade Unions – Types of trade unions – Reasons
for joining TU – Problems of Trade Union – Causes for Industrial Disputes – Grievance
Procedures – Redressal of Grievances through Collective Bargaining – Features – Workers
participation in management – Laws relating to Employee Relations.

EMPLOYEE RELATIONS
MEANING
Employee relations definition states “any industrial relationship between the organization and its
workers or employees, concerning physical, emotional, contractual, and practical efforts by the
employer to maintain a positive relationship with its employees.”
CHARACTERISTICS
An employer’s relationship with their employees has to be nurtured and taken care of in order to
be beneficial for both individuals; their co-workers, and the company as a whole. It has long
been noted that strong employer-employee relationships often lead to greater employee
happiness and significantly improved productivity.

Many typical employer-employee relationships will vary on the scale of closeness and
familiarity, but it is essential that all employer-employee relationships involve at least these
major characteristics.

1. Mutual Respect
Both the employers and employees should have mutual respect. Signs of disrespect are not just
bad for the relationship; it also leads to low retention and bad word of mouth.

2. Knowing Each Other

To start a healthy relationship, it is essential to know the mutual strengths and weaknesses. It
allows them to understand each other by discovering similarities and differences.

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3. Communicating Freely

Open communication is vital in an employer-employee relationship. It leads them to be on the

same page, moving in the same direction, towards one common goal.

4. Knowing the Gap

There needs to be a gap between professionals and personal relationships. It is wise to avoid
getting too close to employees, as it can cause the gap between employer and employee to
become blurred. As a result, it can bring in allegations of favouritism in the workplace.

5. Embracing Recognition

Employers should remember that appreciation and recognition are equally important as
criticism.

6. Understanding What ‘Control’ Means

An employer doesn't necessarily have to exercise their right to control the employees.
The standard law test should work as a balance in maintaining the employer-employee
relationship.

Having strong employer and employee relations reaps a lot of benefits for your business. Let's
know-how.

Here’s How a Good Employer Employee Relationship Helps Your Business

1. Fewer Workplace Disputes

A friendly work environment leads to a reduction in conflicts. Employee's trust gets more
robust when they don't argue and work towards a common goal. That, in turn, results in making
them productive by avoiding confusion and increasing disharmony.

2. Added On Productivity

Just as mentioned above, a positive relationship with the employer helps the employees to
generate more revenue by increased productivity. It is because when the work atmosphere is
pleasant, motivation is increased, and morale is improved. And when employees feel happy,
they are more likely to give their best efforts on the job.

3. Higher Engagement Rate

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The organizational relationship is directly related to employee engagement. According to a

report by the Society for Human Resource Management, "The majority of employees find the
relationship with their employer to be significant to their job satisfaction.”

Thus, a close relationship can make the employees grow and stay for the long term because they
feel valued.

4. Higher Retention Rate

Companies that endorse positive relations are more likely to be successful because it helps gain
the confidence of their loyal employees who prefer to stick around.

They won't leave the team and organization, saving on recruitment, hiring, and training. To avoid
business loss, it is better to invest in creating a strong relationship rather than spending on new
searches.

5. Easier Work Assignment

As an employer, you should know your employees' strengths, weaknesses, and the current and
potential range of their expertise. It helps in assigning responsibilities and avoiding mix-ups. It
enables the employees to stay motivated and complete the given task efficiently.

Some employers also choose to create tasks to overcome weaknesses. When employees uncover
new strengths, they feel happy and be themselves at work.

6. Quick Understanding of Problems

Maintaining a good relationship with employees results in overall free and frank communication
in the day-to-day business. Such open conversations assist in being aware of existing business
problems and drawbacks, which helps find quick resolutions.

7. Workplace Equality

Most employers fail to serve equality in the workplace. And without a fair and equal
environment, employees do not feel important.

As a result, they don't tend to work harder and be productive. By embracing equality for the
employees, you can create a sound and efficient workforce vital for any business's success.

8. Earning Employee Advocacy

Employee advocacy is nothing but empowering your employees to promote the brand name of
the company.

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But why would an employee do that without a sense of oneness and trust towards the company?
A solid employer-employee relationship can create a consistent employee advocacy strategy and
activate them as promoting assets.

PARTIES TO INDUSTRIAL RELATIONS

Industrial relations deals with human behavior and management of personnel in an
organizational setup.

PARTIES INVOLVED IN INDUSTRIAL RELATIONS

The different persons holding distinct positions in the organization and the external or internal
associations involved in the process of building strong industrial relations can be bifurcated into
the following two categories:

Primary Parties

Those persons or associations which are directly associated with or influenced by the functions
of industrial relations are as follows:

Employees

 Employees share their views, suggestions, ideas with the management to improve the
business operations and become a part of organizational decision-making, and ensuring
the betterment of the working conditions

Employers

They are responsible for:

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 Providing a good work environment for the employees and taking strategic decisions
such as mergers, acquisitions, or shutting down of the organization, etc.
 Motivating the employees to give their best and gaining their trust and commitment.
 Improving the overall efficiency and ensuring effective communication among the
employees and the management.

Government

Government started regulating the industrial relations through labour courts and tribunals, for the
following reasons:

 Safeguarding the interest of both the parties.

 Ensuring that both the employer and the employee, abide by the legal terms and
conditions.

Other Parties

The parties which impact the industrial relations within an organization are as follows:

Employers’ Association

 Employers Association refers to an authoritative body, formed to protect the interest of

the industrial owners.
 They represent the owners in collective bargaining with the employees or government,
national issues, and provide insight into employee relations in an organization.

Trade Unions

 Trade Unions mean when the workers unite together to form an association and elect a
representative among themselves and to raise their demands in front of the management.
 They demand better working conditions and higher job security for the workers by
safeguarding the interest of the employees by demanding control over the decision-
making at various levels.

Courts and Tribunals

The judiciary includes the ‘courts’ to resolve the legitimate conflicts and the ‘judicial review’ to
administer the justice of the constitution. These courts and tribunals play an essential role in the
settlement of industrial disputes by eliminating the possibilities of Judicial flaws, conflicting
judgment, poor evaluation of penalty, and Confusing terms and conditions.

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International Labor Organization (ILO)

International Labor Organization aimed to look into matters like Worker’s compensation,
employee’s work duration and days, women employment, employee’s safety, security, and
medical facilities with maternity protection.

Human Resource Function

The human resource department or team acts as a mediator between the organization and its
employees for dealing with personnel issues and conflicts. HR professionals address the disputes
at the initial level, act as a change agent by bringing a mental revolution and perform the role of
an administration expert and a strategic partner.

THEORETICAL PERSPECTIVES ON INDUSTRIAL RELATIONS

Industrial relations deals with human behaviour and management of personnel in an

organizational setup. The various factors that influence the relationship between the
administration and the employees in an organization are as follows:

FACTORS AFFECTING INDUSTRIAL RELATIONS

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 Individual Behaviour: This explains that every person has a different perception,
background, skills, knowledge, experience, and achievements which influences an
individual’s behaviour.
 Organizational Structure: The hierarchical structure creates more formal relationships
among the employees belonging to different hierarchical levels in an organization.
 Psychological Factors: This explains an employee’s attitude and mentality towards the
employer and the given task. And the employer’s psychology towards the workers can be
positive or negative.
 Leadership Style: Every manager possesses certain leadership traits and different styles
to function even in a formal organization to generate team spirit and motivate the
employees.
 Economic and Technical Environment: Organizations need to restructure the task of
the employees including their work duration, conditions, and wages for dealing with the
changes in the economic conditions or in their behaviour, attitude, adapting spirit, etc.
 Legal and Political Environment: The legal framework and political circumstances
influence the organization and its industrial relations contributing to the framing of rules,
rights, authority, powers, and responsibilities of all the parties of the organization.

THEORETICAL PERSPECTIVES
Industrial relations scholars have described three major theoretical perspectives or frameworks,
that contrast in their understanding and analysis of workplace relations. The three views are
generally known as unitarism, pluralist and radical. Each offers a particular perception of
workplace relations and will therefore interpret such events as workplace conflict, the role of
unions and job regulation differently. The radical perspective is sometimes referred to as the
"conflict model", although this is somewhat ambiguous, as pluralism also tends to see conflict as
inherent in workplaces. Radical theories are strongly identified with Marxist theories, although
they are not limited to kosala.

Unitary Perspective

In unitarism, the organization is perceived as an integrated and harmonious system, viewed as

one happy family. A core assumption of unitary approach is that management and staff, and all
members of the organization share the same objectives, interests and purposes; thus working
together, hand-in-hand, towards the shared mutual goals. Furthermore, unitarism has a
paternalistic approach where it demands loyalty of all employees. Trade unions are deemed as
unnecessary and conflict is perceived as disruptive.

From employee point of view, unitary approach means that:

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 Working practices should be flexible. Individuals should be business process

improvement oriented, multi-skilled and ready to tackle with efficiency whatever tasks
are required.
 If a union is recognized, its role is that of a further means of communication
between groups of staff and the company.
 The emphasis is on good relationships and sound terms and conditions of
employment.
 Employee participation in workplace decisions is enabled. This helps in
empowering individuals in their roles and emphasizes team work, innovation,
creativity, discretion in problem-solving, quality and improvement groups etc.
 Employees should feel that the skills and expertise of managers supports their
endeavours.

From employer point of view, unitary approach means that:

 Staffing policies should try to unify effort, inspire and motivate employees.
 The organization's wider objectives should be properly communicated and
discussed with staff.
 Reward systems should be so designed as to foster to secure loyalty and
commitment.
 Line managers should take ownership of their team/staffing responsibilities.
 Staff-management conflicts - from the perspective of the unitary framework - are
seen as arising from lack of information, inadequate presentation of management's
policies.
 The personal objectives of every individual employed in the business should be
discussed with them and integrated with the organization’s needs.

Pluralistic-Perspective

In pluralism the organization is perceived as being made up of powerful and divergent sub-
groups - management and trade unions. This approach sees conflicts of interest and
disagreements between managers and workers over the distribution of profits as normal and
inescapable. Consequently, the role of management would lean less towards enforcing and
controlling and more toward persuasion and co-ordination. Trade unions are deemed as
legitimate representatives of employees. Conflict is dealt by collective bargaining and is viewed
not necessarily as a bad thing and if managed could in fact be channelled towards evolution and
positive change. Realistic managers should accept conflict to occur. There is a greater propensity
for conflict rather than harmony.

They should anticipate and resolve this by securing agreed procedures for settling disputes.
The implications of this approach include:

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 The firm should have industrial relations and personnel specialists who advise
managers and provide specialist services in respect of staffing and matters relating to
union consultation and negotiation.
 Independent external arbitrators should be used to assist in the resolution of
disputes.
 Union recognition should be encouraged and union representatives given scope to
carry out their representative duties
 Comprehensive collective agreements should be negotiated with unions

Marxist Perspective

The Marxist approach looks at industrial relations from a societal perspective. It views industrial
relations as a microcosm of the wider capitalist society. The basic assumption of this approach is
that industrial relations under capitalism are an everlasting and unavoidable source of conflict
According to this approach, industrial conflicts are the central reality of industrial relations, but
open conflicts are uncommon. The Marxist approach views industrial disputes as a class struggle
and industrial relations as a politicized concept and an element of the class struggle. As per the
Marxist approach, the understanding of industrial relations requires an understanding of the
capitalized society, the social relations of production and the mechanism of capital accumulation.

The Marxist approach views the power relationship between the two classes, namely, the
employer (capital) and the employee (labour), as the crux of the industrial relations. Both classes
struggle hard to consolidate their respective positions so that they can have a greater leverage
over the other in the process of bargaining. The proponents of this approach perceive that the
employers can survive longer without labour than the employees can without work. As far as
theory is concerned, the compensation payable to the employees is an outcome of the power
struggle. For instance, the employers seek to maximize their profits by paying less compensation
to the employees, while the latter resist such attempts, and this resistance results in industrial
conflicts. However, the weakness of this theory is that it is narrow in approach as it views
industrial relations as a product or outcome of the industrial conflict.

The System Approach

The system approach was developed by J. P. Dunlop of Harvard University in 1958. According
to this approach, individuals are part of an ongoing but independent social system. The
behaviour, actions and role of the individuals are shaped by the cultures of the society. The three
elements of the system approach are input, process and output. Society provides the cue (signal)
to the individuals about how one should act in a situation. The institutions, the value system and
other characteristics of the society influence the process and determine the outcome or response
of the individuals. The basis of this theory is that group cohesiveness is provided by the common
ideology shaped by the societal factors.

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According to Dunlop, the industrial relations system comprises certain actors, certain contexts,
and an ideology, which binds them together and a body of rules created to govern the actors at
the workplace and work community. The actors in the system are the managers, the workers and
their representatives, and the government agencies. The rules in the system are classified into
two categories:

SCOPE OF INDUSTRIAL RELATIONS

Industrial relations cover all kinds of formal relationships existing in an organization. The scope
of industrial relations can be briefly classified into the following four dimensions:

Employer-Employee Relations

The relationship that pertains between the business owner and the employees of a particular
company is known as the employer-employee relationship.

Group Relations

The interactions and communication between the workers belonging to different workgroups are
studied under group relations.

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Labor Relations

In an organization, the relationship shared by the managers and the workers is termed as labor
relations.

Public Relations

Public relations or community relations is the interaction and relationship of the organization
with the society or external bodies. For long-term existence in the business, every organization
needs to maintain cordial public ties.

OBJECTIVES OF INDUSTRIAL RELATIONS

Industrial relations hold a high significance in the context of human resource management about
addressing the industrial disputes in an organization. The various other goals of carrying out such
practices are as follows:

 Handling Grievance: Industrial relations aim to maintain a cordial relationship between

the management and the employees by setting up a mechanism to address the grievances
of both parties.
 Mental Revolution: It emphasizes on transforming the way of thinking of both the
management and the workers. The employer must value the worker’s contribution
towards the organization and the employees must respect the authority of the
management.
 Employees’ Rights Protection: Under industrial relations, various acts and associations
were formed to safeguard the rights and interests of the employees.
 Contract Interpretation: Industrial relations emphasizes on providing proper training to
the supervisors and the managers on the labor law contracts to clarify any
misunderstanding.
 Boosting Morale: Industrial relations emphasize on building employee’s confidence and
boosting their morale to perform better than before.
 Collective Bargaining: The worker’s representative and the management put up their
proposals in front of each other and negotiate over the same to reach a mutual decision
written in a collective bargaining agreement.
 Increasing Productivity: Industrial relations aims at improving the efficiency and
productivity of the organization by ensuring employees’ long-term retention.

NATURE OF TRADE UNIONS

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The trade union is an association, either of employees or employers or of independent workers.

It is a relatively permanent combination of workers and is not temporary or casual. It is an
association of workers engaged in securing economic benefits for its members.

According to Section 2(b) of the Trade Unions Act of 1926, “a trade union is any combination
of persons, whether temporary or permanent, primarily for the purpose of regulating the relations
between workers and employers, or between workers and workers and for imposing restrictive
conditions on the conduct on the conduct of any trade or business, and includes the federation of
two or more trade unions.”

Characteristics of Trade Unions

1. Association of employees: A trade union is essentially an association of employees

belonging to a particular class of employment, profession, trade or industry. For example,
there are unions for teachers, doctors, film, artistes, weavers, mine workers and so on.
2. Voluntary Association: An employee joins the trade union out of his free will. A person
cannot be compelled to join a union.
3. Permanent Body: A trade union is usually a permanent body. Members may come and
go but the trade union remains.
4. Common Interest: The member of a trade union have certain matters of common
interest-job security, better pay and working conditions and so on, which bring them
together.
5. Collective Action: Even when an individual employee has any grievance over certain
management decisions, the matter is sorted out by the intervention of the trade union
Employees are able to initiate collective action to solve any problem concerning any
particular employee or all the employees.
6. Rapport with the Management: The trade union seeks to improve relations between the
employees and employers. The officials of the trade union hold talks with the members of
the management concerning the problems of the employees in order to find an amicable
solution. It is thus possible for the employees to have better rapport with the
management.

NATURE OF TRADE UNIONS

Trade unions are voluntary organizations of workers or employers formed to promote and protect
their interests through collective action. The Trade Unions Act, 1926 defines a trade union as a
combination, whether temporary or permanent, formed -

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1. Primarily for the purpose of regulating the relation between

a. Workmen and employers or

b. Between workmen and workmen, or

c. Between employers and employers, or

2. For imposing restrictive conditions on the conduct of any trade or business, and includes
any federation of two or, more trade unions.

An analysis of the above definition reveals that trade union must be:

1. A combination of workers or employers,

2. Such a combination could be permanent or temporary,

3. Could include federation of two or more unions, and

4. To regulate relations among workmen, between workmen and employers or among employers
themselves.

TYPES OF TRADE UNIONS

Types and Classification of Trade Union in HRM

Several types of a trade union are there that serves different sort of workers. Here, we have jotted
down the trade unions into three categories as given below.

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1. Classification on the basis of Ideology

According to the ideology, a labour union is segregated into three parts which are named as
revolutionary unions, reformist or welfare unions and uplift unions which are as discussed
below.

1. Revolutionary Unions: This type of union is related to believe in the

transformation of the social as well as economic order and create some new one.
Moreover, it may lead to change the authority and power.
2. Reformist or Welfare Unions: It is associated with the change and reforms in the
field of working conditions within the current framework of the socio-economic
and socio-political European model.
3. Uplift Unions: Beyond the area of working conditions, it is attached with the
extensive reforms such as making changes in the taxation system, eliminate the
poverty and so on.

2. Classification on the basis of trade

Few unions have some memberships as well as jurisdictions on the basis of their trades that they
indicate. Craft Union is the narrow membership and includes the workers who are certified in
certain trade or craft such as pipe fitting, clerical work, carpentry and so on. But these unions are
less common in India and Sri Lanka and common in another western world.

At the next extreme, there is a general union that represents workers from all sort of industries
and companies. There are two general worker categories under trade union which is known as

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blue-collar workers such as workers on the production floor, construction work, etc. and white-
collar workers like management staff and clerical staff

3. Classification on the basis of an agreement

Another type of trade union is classified on the basis of agreement and based on the level to
which the condition of employment is the membership. Some heads are given below that
considered under this kind of trade union.

1. Closed Shop: The closed shop refers to the agreement between the management
and the union that recruitment of the workers is done by the trade union. An
employee becomes part of the shop when they enjoy the trade union.
2. Union Shop: It includes a fixed period of time under which a worker must join
the trade union after employment and it is a kind of agreement which is known as
a union shop.
3. Preferential Shop: It is related to giving the preference to a member. This
agreement is associated with giving more preference to the worker while filling
up the vacancies which are called as Preferential Shop.
4. Maintenance Shop: In this type of shop, there is no such compulsory
membership in the union, not before and after the recruitment. But, if the worker
wants to become a member of a trade union, then it is mandatory in such cases to
remain the member during the employment tenure of the employee. This is also
known as a membership shop.
5. Agency Shop: It is a kind of payment union. However, it is a sort of agreement
between the management and the union, if a non-union member wants to become
a member of the trade union, then they have to pay a definite sum of money to the
union trade as a member’s subscription in order to continue employment with the
employer.
6. Open Shop: In such an agreement between the union and the management, it is
not compulsory or mandatory to become a member of trade union either before or
after recruitment.

REASONS FOR JOINING TU

The important forces that make the employees join a union are as follows:

1. Greater Bargaining Power

The individual employee possesses very little bargaining power as compared to that of his
employer. If he is not satisfied with the wage and other conditions of employment, he can leave
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the job. It is not practicable to continually resign from one job after another when he is
dissatisfied. This imposes a great financial and emotional burden upon the worker. The better
course for him is to join a union that can take concerted action against the employer. The threat
or actuality of a strike by a union is a powerful tool that often causes the employer to accept the
demands of the workers for better conditions of employment.

2. Minimize Discrimination

The decisions regarding pay, work, transfer, promotion, etc. are highly subjective in nature. The
personal relationships existing between the supervisor and each of his subordinates may
influence the management. Thus, there are chances of favouritisms and discriminations. A trade
union can compel the management to formulate personnel policies that press for equality of
treatment to the workers. All the labour decisions of the management are under close scrutiny of
the labour union. This has the effect of minimizing favouritism and discrimination.

3. Sense of Security

The employees may join the unions because of their belief that it is an effective way to secure
adequate protection from various types of hazards and income insecurity such as accident, injury,
illness, unemployment, etc. The trade union secure retirement benefits of the workers and
compel the management to invest in welfare services for the benefit of the workers.

4. Sense of Participation

The employees can participate in management of matters affecting their interests only if they join
trade unions. They can influence the decisions that are taken as a result of collective bargaining
between the union and the management.

5. Sense of Belongingness

Many employees joins a union because their co-workers are the members of the union. At times,
an employee joins a union under group pressure; if he does not, he often has a very difficult time
at work. On the other hand, those who are members of a union feel that they gain respect in the
eyes of their fellow workers. They can also discuss their problem with’ the trade union leaders.

6. Platform for self-expression

The desire for self-expression is a fundamental human drive for most people. All of us wish to
share our feelings, ideas and opinions with others. Similarly the workers also want the
management to listen to them. A trade union provides such a forum where the feelings, ideas and
opinions of the workers could be discussed. It can also transmit the feelings, ideas, opinions and
complaints of the workers to the management. The collective voice of the workers is heard by
the management and give due consideration while taking policy decisions by the management.

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7. Betterment of relationships

Another reason for employees joining unions is that employees feel that unions can fulfil the
important need for adequate machinery for proper maintenance of employer-employee relations.
Unions help in betterment of industrial relations among management and workers by solving the
problems peacefully.

PROBLEMS OF TRADE UNION

1 Small size of trade unions: Most of the trade unions in India are having small membership.
So, it is not a healthy development because small unions cannot carry on collective bargaining
and maintaining discipline among their members.
2. Limited membership: The total membership of trade unions in India forms a small
percentage of the total workers and unions are limited to urban areas. Even if the trade unions are
strong a good number of workers do not join in any union.
3. Outside leadership: In India trade unions are controlled by the political parties. They have no
industrial concern and of the problem they faced and may not pay attention to the union work.
4. Low income of worker merge fund: Poverty and low saving capacity of the members hinder
the growth of trade unions.
5. Illiteracy: Due to the illiteracy, workers fail to understand the trade unionism. They are not
able to understand the implication of laws and procedures.
6. Ineffective leadership: There may be lack of ability, capacity and courage in leaders of trade
union. These persons may be rude, selfish and self-seeking. They do not have any knowledge
about the labour problems. They may be indifferent to the true interests of workers.
7. Lack of unity: Lack of unity among the members and leaders of trade union.

CAUSES FOR INDUSTRIAL DISPUTES

Industrial disputes refer to the differences between the employers and workers in an industry.
These disputes take various forms of protest. From the workers side the forms of protest are
strikes, gheraos, demonstration, etc. from the employer’s side the forms of protest are
retrenchment, dismissal, lockouts etc.

The two most important forms of protest lead to loss in industrial production and decline in the
national income. Hence, it is essential to know the nature and magnitude of industrial disputes,
factors responsible for their occurrence and measures used to resolve them

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There has been a growing trend in terms of workers involved and man days lost in industrial
disputes in India.

Causes of Industrial Disputes:

The main causes of industrial disputes are:

(i) Wages:
Low wages of industrial workers constitute a major cause of industrial disputes in the country.
Wages have not been rising in proportion to the rise in prices. This has forced the labourers to
demand higher wages, consequently leading to disputes.

(ii) Bonus:
The demand for bonus or increase in bonus has been the second major cause of industrial
disputes. The workers feel that they should have a greater share in the profits of the industrial
concern. Non-acceptance of this fact by the employers has been a source of friction among the
employers and the workers.

(iii) Working Conditions:

The demand for improvement in working conditions such as lesser working hours, security of
job, better safety measures in the factory, leave, canteen, gratuity facilities, etc., are also
responsible for many industrial disputes.

(iv) Other Causes:

Among other causes that lead to disputes are failure of employers to recognise trade unions,
conflict between rival unions for representation, insult to trade union leadership by the employer,
introduction of rationalisation in the factory, the fear of retrenchment of workers, sympathetic
strikes with fellow employees in other establishments, general discontent and sense of frustration
among labourers, political issues etc.

GRIEVANCE PROCEDURES
A grievance is a sign of employee’s discontent with job and its nature. The employee has got
certain aspirations and expectations which he thinks must be fulfilled by the organization where
he is working. When the organization fails to satisfy the employee needs, he develops a feeling
of discontent or dissatisfaction.
According to J.M. Jucius, “A grievance is any discontent or dissatisfaction whether expressed
or not, whether valid or not, arising out of anything connected with the company which an
employee thinks, believes or even feels to be unfair, unjust or inequitable”.

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Grievance procedure is a Step by step process an employee must follow to get his or her
complaint addressed satisfactorily. In this process, the formal (written) complaint moves from
one level of authority (of the firm and the union) to the next higher level.

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 superior’s
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.

How to handle an employee grievance?

1. Establish whether the grievance needs to be resolved formally or informally.

2. Choose an appropriate manager to deal with the grievance.
3. Carry out a full investigation and gather all relevant evidence, sending it to the
employee in advance of the meeting.
4. Arrange the grievance meeting, inviting the employee and reminding them of their
statutory right to be accompanied.
5. Make sure accurate notes are taken throughout by a person who is not involved in the
case.
6. Give the employee the opportunity to explain the details of their grievance and what
they would like the outcome to be.
7. Adjourn the meeting consider the evidence before making a decision.

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8. Inform the employee in writing of the decision, explaining how and why the decision
was reached.
9. Notify the employee of their right to appeal against the outcome of the grievance
procedure.
GRIEVANCE PROCEDURE IN INDIAN INDUSTRY

The 15th session of Indian Labour 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 Labour 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.

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REDRESSAL OF GRIEVANCES THROUGH COLLECTIVE

BARGAINING
A grievance is generally defined as a claim by an employee that he or she is adversely affected
by the misinterpretation or misapplication of a written company policy or collectively bargained
agreement. To address grievances, employers typically implement a grievance procedure. The
grievance procedure may also be part of a collective bargaining agreement.
A grievance procedure is a means of internal dispute resolution by which an employee may have
his or her grievances addressed. Most collective bargaining agreements include procedures for
filing and resolving grievances. Within a union environment, the processes will typically involve
the employee, union representatives and members of the employer’s management team.
Grievance processes may differ somewhat from employer to employer and under various
collective bargaining agreements. However, most will have certain general processes in
common.
Grievances are brought to the employee’s immediate supervisor. This may be either an informal
process or the beginning of the formal process. Generally, there will be a requirement that the
grievance be submitted in writing using a grievance form. Usually, the supervisor and the union
representative will review the grievance to determine whether it is valid. Also, most grievance

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procedures will require that the submission occur within a specified timeframe following the
event or incident.
Three possible outcomes may occur at this stage of the process:

 The supervisor and the union representative may determine that no valid grievance exists.
 The grievance may be resolved.
 The grievance may not be resolved to the employee’s satisfaction, and it will move
forward to the next step in the process.

The next step typically involves the next level of supervisor in the company hierarchy. In most
union environments, the employee will be represented by the union and is not present in the
review process. A failure to resolve the grievance will lead to the next step in the grievance
process.
The third step in the process will lead to a review by a higher level of company management and
potentially a higher-level union representative. Ultimately, the grievance may reach the highest
levels as set forth by the contract.
If the grievance remains unresolved through the highest levels of management within the
company, many procedures include a provision by which an outside arbitrator may be called in
to resolve the issue. Senior leaders from both sides are typically involved in the arbitration
process.
An effective grievance procedure provides employees with a mechanism to resolve issues of
concern. The grievance procedure may also help employers correct issues before they become
serious issues or result in litigation.

FEATURES
“Collective Bargaining is a mode of fixing the terms of employment by means of bargaining
between organized body of employees and an employer or association of employees acting
usually through authorized agents. The essence of Collective Bargaining is bargaining between
interested parties and not from outside parties”.
Main Features of Collective Bargaining:
Some of the salient features of collective bargaining are:

1. It is a Group Action:
Collective bargaining is a group action as opposed to individual action. Both the parties of
settlement are represented by their groups. Employer is represented by its delegates and, on the

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other side; employees are represented by their trade union.

2. It is a Continuous Process:
Collective bargaining is a continuous process and does not end with one agreement. It provides a
mechanism for continuing and organised relationship between management and trade union. It is
a process that goes on for 365 days of the year.

3. It is a Bipartite Process:
Collective bargaining is a two-party process. Both the parties—employers and employees—
collectively take some action. There is no intervention of any third party. It is mutual given-and-
take rather than take-it-or-leave-it method of arriving at the settlement of a dispute.

4. It is a Process:
Collective bargaining is a process in the sense that it consists of a number of steps. The starting
point is the presentation of charter of demands by the workers and the last step is the reaching of
an agreement, or a contract which would serve as the basic law governing labour-management
relations over a period of time in an enterprise.

5. It is Flexible and Mobile and not Fixed or Static:

It has fluidity. There is no hard and fast rule for reaching an agreement. There is ample scope for
compromise. A spirit of give-and-take works unless final agreement acceptable to both the
parties is reached.

6. It is Industrial Democracy at Work:

Collective bargaining is based on the principle of industrial democracy where the labour union
represents the workers in negotiations with the employer or employers. Industrial democracy is
the government of labour with the consent of the governed—the workers. The principle of
arbitrary unilateralism has given way to that of self-government in industry. Actually, collective
bargaining is not a mere signing of an agreement granting seniority, vacations and wage increase,
by sitting around a table.

7. It is Dynamic:
It is relatively a new concept, and is growing, expanding and changing. In the past, it used to be
emotional, turbulent and sentimental, but now it is scientific, factual and systematic.

8. It is a Complementary and not a Competitive Process:

Collective bargaining is not a competitive process i.e., labour and management do not coopt
while negotiating for the same object. It is essentially a complementary process i.e., each party
needs something which the other party has, namely, labour can put greater productive effort and

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management has the capacity to pay for that effort and to organise and guide it for achieving the
enterprise’s objectives.

The behavioural scientists have made a good distinction between “distributive bargaining” and
“integrative bargaining”. The former is the process of dividing up the cake which represents
what has been produced by the joint efforts of management and labour.

In this process, if one party wins something, the other party, to continue the metaphor of the
cake, has a relatively smaller size of the cake. So it is a win-lose’ relationship. The integrative
bargaining, on the other hand, is the process where both the parties can win—each party
contributing something for the benefit of the other party.

9. It is an Art:
Collective bargaining is an art, an advanced form of human relations

WORKERS PARTICIPATION IN MANAGEMENT

According to Keith Davis, “Workers’ participation refers to the mental and emotional involve-
ment of a person in a group situation which encourages him to contribute to group goals and
share in responsibility of achieving them”.

In the words of Mehtras “Applied to industry, the concept of participation means sharing the
decision-making power by the rank and file of an industrial organization through their
representatives, at all the appropriate levels of management in the entire range of managerial
action”.

Characteristics:
The following are the main characteristics of WPM:
1. Participation implies practices which increase the scope for employees’ share of influence in
decision-making process with the assumption of responsibility.

2. Participation presupposes willing acceptance of responsibility by workers.

3. Workers participate in management not as individuals but as a group through their

representatives.

4. Worker’s participation in management differs from collective bargaining in the sense that
while the former is based on mutual trust, information sharing and mutual problem solving; the
latter is essentially based on power play, pressure tactics, and negotiations.

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5. The basic rationale tor worker’s participation in management is that workers invest their
Labour and their fates to their place of work. Thus, they contribute to the outcomes of
organization. Hence, they have a legitimate right to share in decision-making activities of
organisation.

Accordingly, the objectives of WPM in India are to:

1. Promote mutual understanding between management and workers, i.e., industrial harmony.

2. Establish and encourage good communication system at all levels.

3. Create and promote a sense of belongingness among workers.

4. Help handle resistance to change.

5. Induce a sense among workers to contribute their best for the cause of organization.

6. Create a sense of commitment to decisions to which they were a party.

LAWS RELATING TO EMPLOYEE RELATIONS

The Central government’s new laws on labour took effect on July 1st 2022. This means there
will be huge transformations in all sectors and industries and how we’re accustomed to working.
Everything will undergo modifications. For example, the rules governing working hours for
employees and the provisional fund to the salary structure and provident fund.
There has been an official announcement regarding this issue until now. The new laws on labour
could affect payout, social security (pension or gratuity), health, safety, welfare for workers, and
working conditions (including the working conditions for women).
The reports suggest that 23 states, including Uttarakhand, Chhattisgarh, Odisha, Arunachal
Pradesh, Uttar Pradesh, Madhya Pradesh, Haryana, Jharkhand, Himachal Pradesh, Punjab,
Manipur, Bihar, and UT of Jammu and Kashmir, have framed regulations under the new labour
laws.
Key Points of New Labour Laws and Employment in India 2022
 The employees will have permission to take three weeks off
 They must be on the job for a period that is not longer than 48hrs. Those who work eight
hours daily will only have one week of vacation

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 Individuals who work 12 hours per day within an organisation will grant three weeks of
vacation. Also, those who are working 9 hours per day will get two weeks off
 The new labour codes will result in a total modification to the complete and final rules
 Professionals who leave the country must be dealt with. The final settlement is done
within 2 days from the date of departure from the business
 Female employees will be able to benefit from the increase in their maternity leave to 26
weeks. Employers must obtain approval from female employees to work the night shift
 Security and facilities must be in good order to be guaranteed to the female employees of
the organisation
 The structure of pay will be different according to the changes made
 The element of the basic salary will get an increment, and the provision fund calculations
based on the basic salary will get a raise as well
 This means that the provisional employee fund will increase while the salary paid in cash
will likely decrease
 After adopting the code, workers will grant vacation each 180-day instead of 244 days as
per the previous rules. In India, the full and final payment is due within 45 days of the
end of an organisation.
HR LAWS IN INDIA

A company’s Human Resource team is very significant in terms of maintaining workforce

satisfaction. This group is in charge of recruiting, hiring, and training staff. They are also in
charge of addressing employees’ concerns and remitting benefits. Now let us look at some of
most prominent HR Laws In India.

Recruitment, Selection, Training and Development

 Article 16 of the Indian constitution states that all citizens should be offered equal
work opportunities. It further stipulates that the employee shall not face discrimination
on any grounds. This is particularly applicable to all government jobs.
 Moreover, Article 24 says that children under the age of 14 shall not be recruited or
employed.
 Under the Employment Exchange (Compulsory Notification of Vacancies) Act, 1959,
a private sector business with 25 or more employees is required to notify vacancies.

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Employee Appraisal
The HR Management System has to maintain a track record of all employee’s performance. The
organization must recognize employees that do well through rewards and promotions. In the
event of a performance shortfall, HR should notify the affected employee within a reasonable
timeframe so that employees can improve their performance. This was established in the case of
Baidhyant Mahaputra v. the State of Orissa.

Compensation and Rewards

Payment Of Wages Act, 1936
Employees should be paid on time, according to the Payment of Wages Act. of 1936. Once the
recruitment processes, including orientation and training, are completed, the business should
ensure that the personnel receive their pay on the agreed-upon dates and times. Employee pay
must be set in accordance with industry standards. The parties, the HR and the employee, must
be given equal bargaining power. The Act also provides that even if an employee is fired, he is
entitled to pay for the month in which he worked.
Fines, the deduction for damage/loss, the deduction for loan recovery, and so on are all stated in
the legislation as acceptable deductions.

Workmen Compensation Act, 1923

This Act makes provisions for providing financial support to employees and their family
members when an employee is injured during the course of their employment. When an
employee is involved in an accident, is hurt, or becomes disabled. At the same time, on the job,
compensation should be provided under the Workers Compensation Act. Even if the individual
works across the ocean, he is qualified for payment under this provision. If the employer is
unable to provide compensation, criminal proceedings can be initiated against him.

Payment Of Bonus Act, 1965

Bonus incentives should be mandatorily given to all employees whose monthly income is less
than ₹21,000, regardless of their work. Suppose an employee works even for a minimum of 30
days in a given year. In that case, he is eligible for a bonus for that fiscal year. An employee has
one year in which to claim the bonus. As per Section 10 of this Act, the minimum bonus payable
is 8.33%.

Payment Of Gratuity Act,1972

The Gratuity Act of 1972 states that an employee is only eligible for this loyalty benefit after
completing five years of regular employment. The maximum gratuity that an employee can
receive is ₹20 lakh. This is a retirement benefit. Every employee is entitled to get a payment of

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gratuity. It is a part of the salary received as gratitude for the service performed during the course
of employment.

The Employees Provident Fund Act,1947

It is a form of social security for employees. EPF is available to all salaried employees.
Furthermore, any employee earning less than ₹15,000 must register for the EPF. The goal here is
to protect the rights of the older generation.

Healthy, Safety and Welfare Measures

The Factories Act, 1948
Every employer has an obligation to create a safe working environment. This statute was enacted
to defend employees’ rights and interests. All employers must provide adequate sanitation and
ventilation. Every workplace environment must have a fire extinguisher. The Act also limits the
maximum weekly working hours to 48 hours. Sections 11 to 20 deal with the health measures to
be implemented, whereas Sections 21 to 50 deal with employee safety and welfare. Additionally,
all employees should be given a weekly holiday.

The Maternity Benefit Act, 1961

A pregnant woman who has worked for an organization for at least 80 days is eligible for this
perk. When she returns to work, she is required by law to do only light work for 10 weeks. If an
employer fails to provide this benefit, he can be prosecuted.

Sexual Harassment Act, 2013

HR personnel are usually the first to hear complaints about workplace harassment. They are
responsible for establishing a safe working environment for women. They are also responsible
for developing workplace sexual harassment awareness programmes for employers. They are
duty-bound to take swift and strict measures against sexual predators and perpetrators in the
workplace.
Industrial Relation
The Industrial Disputes Act of 1947 was enacted to bring harmony between employers and
employees. It addresses issues such as employer lockouts, employee strikes, layoffs and
retrenchment. It states that before discharging a worker, the employer must provide 6 weeks’
notice explaining the basis for the termination.

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