FOUNDATIONS OF INDUSTRIAL RELATIONS

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 explain the relationship between employees and management
which stem directly or indirectly from union-employer relationship.
Definitions:
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”.

Importance of Industrial Relations:

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 co-operation 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 employer’s
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. Wastage of man, material and
machines are reduced to the minimum and thus national interest is protected.

Objectives of Industrial Relations:

The main objectives of industrial relations system are:-

1. 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.
2. 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.
3. To raise productivity to a higher level in an era of full employment by lessening the
tendency to high turnover and frequency absenteeism.
4. 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 individuals
personality may grow its full stature for the benefit of the industry and of the country
as well.
5. To eliminate or minimize the number of strikes, lockouts and gheraos by providing
reasonable wages, improved living and working conditions, said fringe benefits.
6. 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.
) )

Vesting of a proprietary interest of the workers in the industries in which they are
employed.

History and Genesis of Industrial Relations:

Industrial Relations are the most primitive form of Personnel Management, which goes back
to the eighteenth century. It has relevance right from the 1769, when James Watt fought for
the patent of the steam engine. Industrial Relations borrows its basic principles from various
disciplines e.g. Economics such as wages, bonus, monetary benefits; Law as labor laws;
sociology which includes trade unions and their social framework. In the last two centuries,
there have been three inter related revolutions which marked the evolution of industrial
relations into its present form. The three revolutions are:

o Industrial Revolution

« Democratic Revolution

« Capitalist Revolution

Pre industrial revolution era — This period refers to the prior to industrial revolution in the
world. This was the time while there was no formal way of establish relationship between
employers and employees.

Industrial revolution-Industrial revolution brought about a transformation in the economic

and social life. It began in the UK and then soon spread to France, Germany, and the USA.
This period was extensively marked by the studies made by Taylor and his principles of
scientific management.

Democratic revolution- Democratic revolution refers to giving consideration for involvement

of people in things which matter to them. Democratic revolution is the next important event
in industrial relations which impacted industrial revolution. It started in 1750 in UK and then
spread to USA and then France. This revolution brought about a change in the political
governance of the countries and focused on labour. These Countries moved from colonialism
to different arrangements. The salient features of the democratic revolution are: There was an
increase in social concerns for human rights. During the industrial Revolution as human
rights were suppressed and workers were not allowed to voice their opinions. The Democratic
revolution changed the way workers were treated. It impacted trade unionism positively. The
countries where unionization was banned and considered a sin, changed and took to the new
norms e.g. In Germany, Trade Union was not accepted before the democratic revolution and
the same goes for USA, where trade unions were banned in certain sectors.

Capitalist Revolution -Capitalist revolution is the next phase in the course of industrial
relations. This revolution changed industrial relations significantly. There were certain
changes in the society after the capitalist revolution.

History of Industrial Relations in India:

The history of industrial relations, in India, can be seen in the following Context:

« Pre independence

Post-independence Era

o Post Liberalization Era

Pre independence era :

In India, following are the key issues about industrial relations at that time:

» Workers used to have faced hired and fired policy. Employer used to fire workers at any
stage of work for any reason. Worker was not having right to ask for explanation.

» Employer was in commanding position over all workers. Workers have to do a work
assigned by the employer.

» The wages were very poor according to the nature of work and time of work.

« Till the end of First World War trade unions movement had not emerged in India.

There were hardly any laws were present to protect the rights of workers except that of
Employers and Workmen Dispute Act 1860 which was used to settle wage disputes.

Post Independence Era:

After independence significant steps were taken to protect the rights of labour and provided a
formal mechanism to settle their disputes. These enactments not only served as a machinery
to settle industrial disputes but also to make these awards binding and legally enforceable on
the parties. Constitution of India came into existence giving many rights to the citizens of
India. Besides this Industrial Conference in December 1947 was held in India where an
appeal was made to labor and management India in form of Industrial Truce Resolution to
maintain industrial peace and harmony.

Post Liberalization Era:

Liberalization came in India in 1990s and it has caused a huge change in the Indian Industry.
It opened the door for MNC companies in India 31 which attracted foreign investment in the
country. This has increased employment opportunity in India, increased flexibility for
investment, import of new technology, new ways of doing business, automation, added new
infrastructure and creation of world class facilities in the country.
It also levelled up the quality of products, delivery and service standards in the industry.
Employees and workers were exposed to different world class technologies and work
environment. Industry has witnessed unprecedented increase in salaries and benefits. Talent
in Indian Industry received international exposure through visits to parent companies and
their work culture and practices. The Liberalization had impact on IR in terms of reduction in
labour disputes in the1990s.
Current Scenario of Industrial Relations:

Today’s employees or workers are modernized and have changed expectations out of
employment relationships. The current changing phase of Industrial relations is different in
the era of “knowledge worker” from that of “who only think of a living” In the field of
academicians, industrial relations traditional positions is threatened on one side by the
dominance of mainstream economics and organizational behavior, and on the other by
postmodernism.

In policy making, the industrial relations emphasis on institutional intervention is trumped by

a neoliberal emphasis on the laissez faire promotion of free markets. In actual practice now
days, labor unions are declining and fewer companies have industrial relations functions. In
many companies more focus is being to human resource function as a whole. The number of
academic programs in industrial relations is therefore going down, and scholars are leaving
the field for other areas, especially human resource management and organizational behavior
too. But the importance of work is stronger than ever, and the study of industrial relations
remains important. The challenge possesses ahead of industrial relations are to re-establish
these connections with the broader academic, policy, and business worlds.

Theories of Industrial Relations:

Systems Theory:

The formation key inputs of this theory given by Dunlop (Martin, 1990). It has pluralist
frame of reference. This theory focuses on a general theory of industrial relations. This theory
serves the reference to industrial relations as that of Explicit Theory which is industrial
relations sub-system of wider society with four elements as actors which includes employers,
employees, their representatives, government agencies; environmental contexts such as
technology, market, budgets, distribution of power; procedural and substantive rules
governing the actors ; and binding ideology, common beliefs encouraging actors to
compromise.

Labour Process Theory:

The formation key inputs of this theory given by Braverman. It has Marxist frame of
reference. This theory focuses on labor’s relationship with industrial processes. This theory
serves the reference to industrial relations as of Implicit Theory where improved technology
and scientific management techniques are de-skilling work, fragmenting tasks, centralizing
knowledge in management, diminishing workers control of pace and conduct of work. The
implications of this theory results in as labor is increasingly alienated and exploited, leading
to resistance by organized and unorganized industrial conflict.

Strategic Choice Theory:

The key inputs of this theory are given by Kochan, Katz and McKersie. It has pluralist frame
of reference. This theory focuses on a general theory of industrial relations. This theory
serves the reference to industrial relations as of Explicit Theory which emphasizes the
strategic choice of actors in deciding industrial relations outcomes, as influenced by declining
 union membership, breakdown of collective bargaining frameworks, retreating government
intervention, proactive human resource management techniques, and spread of organizational
authority for industrial relations.

Scientific Management Theory:

The key inputs are given by Taylor. It has unitarist frame of reference. This theory focuses on
use and control of labor. It serves the reference to industrial relations as of Implicit Theory
where system of management maximizing output by greatest technical efficiency of work
methods, achieved by, unchallenged management powers to allocate work tasks, managers
relationship with employees is rational and objective, managers treat workers impersonally
and collectively, work tasks reduced to basic s for low-skilled, low-paid employees in
assembly line production, employees are chosen to suits the tasks to be performed, employees
given training in best work methods, and employees motivated by incentive payment
schemes.

Regulation Theory:

The key inputs provided by Stigler and Friedland,it has pluralist frame of reference. This
theory focuses on state intervention in industrial relations. It serves there reference to
industrial relations as of Explicit Theory which correlates with capture theory and bargaining
theory.

Labour Market Theory:

The key proponent to this theory is Friedman. It has unitarist frame of reference. This theory
focuses on the settlement of wages, employment and the allocation of work. It serves the
reference to industrial relations as of Explicit Theory where people are rational economic
maximizes; perfectly competitive labor and product markets yield most efficient economic
outcomes.

IR Approaches:
IR is perceived differently by a different group of behavioral practitioners and theorists.
Some believed that IR is related to the Class Conflict while some perceived it in terms
of Mutual Co-operation and still others perceived it in terms of Competing Interests of
various groups. On the basis of these perceptions, there are four popular approaches to
Industrial Relations. These are:

. Unitary Approach: The unitary approach is based on the notion that all the members of the
organization Viz. Managers, workers, and other staff have a common set of objectives,
purposes and interests and, therefore, work in unison towards the accomplishment of shared
goals. Here, the conflict is seen as a temporary divergence which is caused due to the poor
management or the negligence on the part of the employees to understand and mix with the
organizational culture.

The unitary approach is based on the assumption that the overall profitability of the firm
could be increased if everyone in the organization has the common interest/purpose and
 works unanimously towards its completion thereby establishing the harmonious relations.
Here the strikes are considered as destructive.

. Pluralistic Approach: The pluralistic approach is just the opposite of unitary approach
which is based on the assumption that an organization is an alliance of powerful and
divergent sub-groups (management and trade unions), having different competing interests
are mediated by the management. The management and the trade unions (association of
workers) are the powerful sub-groups that may not agree with certain terms and conditions
prevailing in the organization and to resolve those management tries to mediate the interest of
both the groups.

During mediation, if the management pays less attention to the needs of the workers then they
form unions in order to protect their interest and influence the management decision. The
unions so formed helps in balancing the power between the management and employees.
Thus, it is based on the notion that the conflict between the management and the employee is
inevitable and is viewed as instrumental in the innovation and growth.

. Marxist Approach: The Marxist approach is based on the basic assumption that the conflict
is regarded as the product of a capitalist society. This means that conflict arises not just
because of the rift between the employee and the employer, hut also because of the division
in the society between those who owns the means of production (capitalists) and the ones
who have only labor to offer. The ultimate objective of the capitalists is to increase the
productivity by paying possible minimum wages to the workers due to which the latter feels
exploited.

To overcome such situation workers form unions so as to safeguard their interests. These
trade unions are considered as a weapon to bring about a revolutionary social change that
focuses on improving the overall position of the workers in the capitalist system and not to
overthrow. Unlike the pluralist approach, the Marxist believes that the state intervention via
legislation and industrial tribunals work in the interest of the management and do not ensure a
balance between the competing groups. Thus, according to this approach, the pluralist
supports the capitalism, and the unitary approach is anathema.

. Human Relations Approach: The Human relations approach is propounded by Elton Mayo,
who is a humanist and believes in the positive nature of the employees. According to him,
given human initiatives from management, the employees positively listens and responds
properly to them and hence there is no room left for the conflict to arise. But however
Marxists and Pluralists did not appreciate too much stress on the positive nature of the
workers.
 INDUSTRIAL DISPUTE

In common parlance, dispute means difference or disagreement of strife over some issues be-
tween the parties. As regards industrial dispute, since its settlement proceeds as per the legal
provisions contained in the ‘Industrial Disputes’ Act, 1947, hence it seems pertinent to study the
concept of industrial disputes from a legalistic angle.

According to Section 2 (k) of the Industrial Disputes Act, 1947, the term ‘industrial dispute’
means “any dispute or difference between employers and employers or between employers and
workmen, or between workmen and workmen, which is connected with the employment or non-
employment or the terms of employment and conditions of employment of any person’.

Nature of Industrial Dispute:

1. The dispute must affect a large number of workmen who have a community of interest and the
rights of these workmen must be affected as a class.

2. The dispute must be taken up either by the industry union or by a substantial number of
workmen.

3. The grievance turns from individual complaint into a general complaint.

4. There must be some nexus between the union and the dispute.

5. According to Section 2A of the Industrial Disputes Act, 1947, a workman has a right to raise
an industrial dispute with regard to termination, discharge, dismissal, or retrenchment of his or
her service, even though no other workman or any trade union of workman or any trade union of
workmen raises it or is a party to the dispute.

Types of Industrial Disputes:

The ILO" has classified the industrial disputes into two main types.

They are:
1. Interest Disputes
2. Grievance or Right Disputes

1. Interest Disputes:
These disputes are also called ‘economic disputes’. Such types of disputes arise out of terms and
conditions of employment either out of the claims made by the employees or offers given by the
employers. Such demands or offers are generally made with a view to arrive at a collective
agreement. Examples of interest disputes are lay-offs, claims for wages and bonus, job security,
fringe benefits, etc.
2. Grievance or Right Disputes:
As the name itself suggests, grievance or right disputes arise out of application or interpretation
of existing agreements or contracts between the employees and the management. They relate
either to individual worker or a group of workers in the same group.

Forms of Industrial Disputes:

The industrial disputes are manifested in the following forms:

Strikes: Strike is the most important form of industrial disputes. A strike is a spontaneous and
concerted withdrawal of labour from production. The Industrial Disputes Act, 1947 defines a
strike as “suspension or cessation of work by a group of persons employed in any industry,
acting in combination or a concerted refusal or a refusal under a common understanding of any
number of persons who are or have been so employed to continue to work or accept
employment”.

According to Patterson “Strikes constitute militant and organised protest against existing
industrial relations. They are symptoms of industrial unrest in the same way that boils symptoms
of disordered system™.

Depending on the purpose, Mamoriaet have classified strikes into two types: primary strikes and
secondary strikes.

(i) Primary Strikes:

These strikes are generally aimed against the employers with whom the dispute exists. They may
include the form of a stay-away strike, stay-in, sit-down, pen-down or tools- down, go-slow and
work-to-rule, token or protest strike, cat-call strike, picketing or boycott.

(ii) Secondary Strikes:

These strikes are also called the ‘sympathy strikes’. In this form of strike, the pressure is applied
not against the employer with whom the workmen have a dispute, but against the third person
who has good trade relations with the employer.

However, these relations are severed and the employer incurs losses. This form of strike is
popular in the USA but not in India. The reason being, in India, the third person is not believed
to have any focus standing so far the dispute between workers and employer is concerned.
Here the strikes and its nature.
 INDUSTRIAL CONFLICT AND CODE OF CONDUCT

Conflict and Cooperation:

Lansbury and Prideaux (1981) discussed two dominant aspects of Industrial relations that would
facilitate WPM. The first aspect is cooperation and the second is conflict.
Cooperation:

Cooperation between labour and capital is one of the basic requirements for the functioning of
modem industries and the growth of industrialization. Here labour means workers who man the
factories, mines and other industrial establishments or services. Capital stands for the owners of
business enterprises who supply the capital and own the final products. Cooperation is a form of
social interaction where in two or more persons work together to gain a common end.
Cooperation involves reciprocity of intent as well as jointness of behavior, and it may even
become an end in itself.
Conflict:

Conflict too is inherent in the industrial relations setup of today and it is endemic in human life.
It becomes apparent when industrial disputes resulting in strikes and lockouts become frequent.
The prevailing industrial unrest, the frequency of work-stop pages resulting either from strikes or
lockouts, and the slowing down of production are the occasional expressions of the ever-present
and latent conflict between workers and the management. Motives are important in conflict. A
conflict refers to incompatible behavior and any industrial conflict includes human conflict. It
emerges whenever two or more persons or groups seek to possess the same object, occupy the
same space or the same exclusive position, play incompatible roles and undertake mutually
incompatible means for achieving their purposes.

Bi-Partism:

Bipartism is a system of industrial relations where social and labour issues are discussed between
trade unions and management, usually at the enterprise level. The bipartite consultative
machinery comprises two important constituents, viz., the works committees and the joint
management councils.
These are purely consultative, and not negotiating bodies. This consultative joint machinery-
with equal representation of the employers and the workers — has been set up exclusively for
dealing with disputes affecting the plant or industry.
Works Committees:

These committees have been regarded as the most effective social institution of industrial
democracy and as a statutory body, established within the industrial units with representatives of
the management and workmen, for preventing, and settling industrial disputes at the unit level.
The works committee can be formed by any enterprise, employing 100 or more workers.

Joint Management Council:

These committees give labour a greater sense of participation and infuse a spirit of co-operation
between the two parties without encroaching upon each other's sphere of influence, rights and
prerogatives.

They establish a channel of close mutual interaction between labour and management which,
keeping tension at a low level, generates a co-operative atmosphere for negotiation and
settlement.

These committees also aim at making the will of the employees effective in the management,
ensure the operation of the private-owned concern in conformity with national interests and
provide for a popular agency for supervising the management of nationalized undertakings.

Tri-Partism:

Tripartism is a system of labour relations in which the state, employers, and workers are
autonomous yet interdependent partners, pursuing common interests and participating in
decisions affecting them in a binding spirit of mutuality and reciprocity. This can take place at
either or both macro and micro levels. Tripartite consultation is an important feature of India's
industrial relations system.

It has a long history in India as it was set up as early as 1942. The Indian Labour Conference
(ILC) and the Standing Labour Committee (SLC) are two main forums for Tripartite
Consultation

Code of Discipline:
To maintain harmonious relations and promote industrial peace, a code of discipline has been
laid down which applies to both public and private sector enterprises. It specifies various
obligations for the management and the workers with the objective of promoting cooperation
between their representatives.
 The basic objective of Code of Discipline are to :
Maintain peace and order in industry
Promote constructive criticism at all levels of management and employment
Avoid work stoppage in industry
Secure the settlement of disputes and grievance by a mutually agreed procedure
Avoiding litigations
Facilitate a free growth of trade unions
Eliminate all forms of coercion, intimidation and violence of rules and regulations
governing industrial relations
The code is based on the following principles:
There should be no strike or lockout without prior notice
0O 0O0O0

No unilateral action should be taken in connection with any industrial matter

Employees should not follow go slow tactic
The existing machinery for the settlement of disputes should be utilized
The code of embodies four parts:
Part-I: To maintain discipline in industry: Maintain the discipline in organization by mutual
understating and cooperation among the workmen and employer.

Part-II Common Obligations of Management and Unions: Recognize the both requirements and
to void the unfair activities and avoid the unilateral actions in organization.
Part-IIT Obligations of Management: Management should be conscious towards the welfare of
employees to avoid the unfair activities .for the misconduct or unfair activities proper
disciplinary action should be taken.
Part-IV Obligation of Unions: Maintain the peace in organization by managing unions in
organization is challenging. Avoid the unfair labour practice.
 COLLECTIVE BARGAINING

Introduction:
Collective bargaining is a process of negotiating between management and workers represented
by their representatives for determining mutually agreed terms and conditions of work which
protect the interest of both workers and the management.

According to Dale Yoder', "Collective bargaining is essentially a process in which employees act
as a group in seeking to shape conditions and relationships in their employment",

Michael J. Juaous has defined collective bargaining as "a process by which employers, on the
one hand, and representatives of employees, on the other, attempt to arrive at agreements
covering the conditions under which employees will contribute and be compensated for their
services".

The basic objective of collective bargaining is to arrive at an agreement between the

management and the employees determining mutually beneficial terms and conditions of
employment.

1. To foster and maintain cordial and harmonious relations between the

employer/management and the employees.
2. To protect the interests of both the employer and the employees.
To keep the outside, i.e., the government interventions at bay.
o

4. To promote industrial democracy.

Levels of Collective Bargaining:

Bargaining in different sectors may take place at different levels. In no country does it take place
only at one level. Depending upon the coverage of the terms of agreement and involvement of
unit-level, enterprise-level, regional-level or national-level trade unions, collective bargaining
may take place at unit/plant level, enterprise-level, industry or national level.

Unit/Plant-level:Negotiations that take place at unit/plant-level result in decentralised

agreements. Sometimes such negotiations take place with trade union federations at company-
level, involving representatives of unions of different plants of an establishment.

Enterprise-level: Such negotiations take place between management and enterprise-level union
representatives, and affect all workers across all the units of the enterprise.
National-level: National-level negotiations usually take place in the industries or sectors which
are controlled by the Government. Collective negotiations at this level generally involve more
than one national-level trade union federations and employers’ organisations. Examples of
sectors in the Indian economy where national-level bargaining is common are iron and steel,
postal department, banks, ports and docks, etc. Most of the mining industries such as coal, iron
ore, copper, bauxite and zinc, the oil sector and the cement industry have evolved a system of
national-level negotiations and settlements.

Process of Collective Bargaining:

Process of Collective Bargaining:

(A)Negotiation Stage:

At the negotiation stage, certain proposals are put forward which explore the possibility of their
acceptance and have the way to mutually agreed terms after careful deliberation and
consideration. The negotiation stage itself involves three steps namely preparation for
negotiation, identifying bargaining issues and negotiating.

1. Preparation for negotiation:

Careful advance preparations by employers and employees are necessary because of the
complexity of the issue and the broad range of topic to be discussed during negotiations.
Effective bargaining means preparing an orderly and factual case to each side. Today, this
requires much more skill and sophistication than it did in earlier days, when shouting and
expression of strong emotions in smoke filled rooms were frequently the keys to getting one’s
proposals accepted.

2. Identifying Bargaining Issues:

The major issues discussed in collective bargaining fall under the following four categories:

a. Wage related issues: This includes such topics as how basic wage rates are determined, cost of
living adjustments, wage differentials, overtime rates, wage adjustments and the like.

b. Supplementary economic benefits: These include such issues as pension plans, paid vacations,
paid holidays, health insurance plans, retrenchment pay, Unemployment pension, and the like.

c. Institutional issues: These consist of the rights and duties of employers, employees, unions,
employee’s stock ownership schemes, and the like.

d. Administrative issues: These include such issues as seniority, employee discipline and
discharge procedures, employee health and safety, technological changes, work rules, job
security, and the like. While the last two categories contain important issues, the wage and
benefit issues are the ones which receive the greatest amount of attention at the bargaining table.

3. Negotiating:

Preparations have been made and issues being identified, the next logical step in collective
bargaining process is negotiation. The negotiating phase begins with each side presenting its
initial demands. The negotiation goes on for days until the final agreement is reached. But before
the agreement is reached, it is a battle of wits, playing on words, and threats of strikes and
lockouts. It is a big relief to everybody when the management representatives and the union
finally sign the agreement. The success of negotiation depends on skills and abilities of the
negotiators. At times, negotiations may breakdown even through both the labour and the
management may sincerely want to arrive at an amicable settlement. In order to get negotiations
moving again, there are several measures that are usually adopted by both the parties, which
sometimes even includes unethical measures:

a. Through third party intervention such as arbitration and adjudication,

b. Unions tactics likes strikes and boycotts, and

c. Management strategies such as lockouts, splitting the union, bribing union leaders and using
political influence.

(B)Contract Administration:

When the process of negotiation has been completed, it is time to sign the contract, the terms of
which must be sincerely observed by both the parties. The progress in collective bargaining is
not measured by the more signing of an agreement rather, it is measured by the fundamental
human relationships agreement. Once an agreement is signed, both the trade union and the
management are required to honour it in letter and spirit. The union officers and company
executives should explain the terms and implications of the contract to employees and
supervisors with a view to ensuring that the day to day working relationship between workers
and management is guided by that contract. It is important that contract must be clear and
precise. Any ambiguity leads to grievances or other problems. The whole process of contract
administration is identified by two steps, namely settlement and contract agreement i.e.
settlement of disputes by collective bargaining and find a solution as an contract agreement
between union and management and administration of agreement i.e. implementation according
to the letter and spirit of the provisions of the agreement.
 GRIEVANCE HANDLING AND DISCIPLINARY ACTION

Grievance:
Grievance may be any genuine or imaginary feeling of dissatisfaction or injustice which an
employee experiences about his job and it's nature, about the management policies and
procedures. It must be expressed by the employee and brought to the notice of the management
and the organization.

According to Michael Jucious, "Grievance is any discontent or dissatisfaction, 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."

In short, Grievance is formal complaint which demonstrates any kind of dissatisfaction in an

employee, arising out of the factors which are related to his job.

Reasons/Causes of Employee Grievance:

Employee's grievance not only reduces the productivity of employees and organization, it may
put the existence of the organization in a danger situation. Therefore, the grievance has to be
solved as quickly as possible. For this, the reason has to be identified.

The reason for grievance may vary according to the situation. Some of the important reasons are
as under:

1. Unfair Management : Employees want to be treated equally as other employees. But if

management treats differently to the identically performing employees then the grievance arises.
2. Poor Communication : Open and two way communication makes a healthy relationship and
motivates the employees. Policy, directives, information and other notices have to be received by
each employee in a similar way according to their job responsibility. One way and controlled
communication makes them feel inferior and this will create misunderstanding among the
employees and the management. This misunderstanding will slowly turns into the grievance.
Thus, poor, controlled and one way communication is also a reason for employee's grievance.

3. Different Interpretation : Difference in the understanding and the interpretation between the
employees and the management also causes for grievance. If employees understand the policy,
rules and terms and conditions, directions and guidelines determined by the management
differently then they become negative towards the management and whole organization.
Organization with ineffective communication has high chance for grievance.

4. Personality Traits : Some employees have habit of being grievant even in minor and small
cases. They point out other employees even in their minor mistakes. This will create grievance to
the employee himself/herself and other employees as well. Therefore, a personality trait is one of
the reasons for the grievance.

5. Weak Leadership : Leader must be present as a guardian of all employees. If the leader is
weak, then employee's enthusiasm may go down and employees do not follow and ignore the
leaders. Serious in-disciplinary activities may be carried out in the organization. This will
increase the employee grievance.

6. Personality Clash : Sometimes, some employees may have personality clash with the
colleagues, management and other people’s thought, concept and work style. They may take it as
a challenge when their idea is not accepted and a feeling of revenge may take place. Feeling of
ego may create anger, miserable or dishearten to an employee that will create grievance among
the employees.

Grievance Procedure:
While adaptations have to be made to meet special circumstances such as those obtaining in the
Defence Undertaking, Railways, Plantations and also small undertakings employing few
workmen, the procedure normally envisaged in the handling of grievances should be as follows:

1. Aggrieved employee shall first present his grievance verbally in person to the officers
designated by management for this purpose. An answer shall be given within 48 hours of the
presentation of complaint.

2. If the worker is not satisfied with the designated officer, he shall, either in person or
accompanied by his departmental representatives, present his grievance to the head of the
department designated by management for this purpose. The time allotted to reply within 3 days.
If the action cannot be taken with in that period, the reason for this delay should be recorded.

3. If the decision by departmental head is unsatisfactory, then the grievant may request the
forwarding of his grievance to the grievance committee which shall make its recommendations
to the managers within 7 days of the workers request. The management shall implement
unanimous recommendations of the Grievance Committee.

Code of Discipline:
Code of discipline forms the Gandhian approach to industrial relations to hind employees and
trade unions to a moral agreement for promoting peace and harmony. It was an outcome of the
efforts of Guljari Lal Nanda, the then Union Labour Minister in 1957 to 1958. G.L. Nanda was
the true Gandhian. It was at his instance that code was formulated. It was formally adopted at the
16th session of the Indian labour conference (1958). National representatives of both employers
and trade unions were parties to it. This code was a unique formulation to voluntarily regulate
labour management relations.

Principles For Disciplinary Action:

Despite, best efforts, acts of indiscipline occur and it becomes necessary to take a disciplinary
action. While taking disciplinary action the following principles must be considered.

1. Principles of natural justice: This principle must guide all enquires and actions. This means
that no person should be appointed to conducting an enquiry who himself is interested in the
outcome —either as an aggrieved party or because he is hostile to the person proceeded against, or
for any other reason.

2. Principles of impartiality or consistency: There should be no marked difference in the action

taken under identical situations where all the factors associated to situations are alike.

3. Principle of impersonality: The disciplinary authority should not encourage a person who is
failing to fulfil his duty. He should be impartial to everyone.

4. Principle of reasonable opportunity to the offender to defend himself. Article 311 of the
constitution of India says: No “person employed by the union or a state govt. shall be dismissed
or remove until he has been given a reasonable opportunity showing cause against the action
proposed to be taken in regard to him.”

Procedure for Disciplinary Action:

The procedure for taking disciplinary action involves the following steps:

1. Preliminary Investigation: First of all a preliminary enquiry should be held to find out the
misconduct behaviour or situation.

2. Issue of a charge sheet: Once a misconduct or indiscipline is identified, the authority should
proceed to issue of charge sheet to the employee. Charge sheet is merely a notice of the charge
and provides the employee an opportunity to explain his conduct. Therefore, charge sheet
generally called as show cause notice. In the charge sheet each charge should be clearly defined
and specified.

3. Suspension Pending Enquiry: In case the charge is grave a suspension order may be given to
the employee along with the charge sheet. According to the industrial employment (Standing
orders) Act, 1946, the suspended worker is to be paid a subsistence allowance equal to one-half
of the wages for the first 90 days of suspensions and three fourths of the wages for the remaining
period of suspension if the delay in the completion of disciplinary proceedings are not due to the
workers conduct.

4. Notice of Enquiry: In case the worker admits the charge, in his reply to the charge sheet,
without any qualification, the employer can go ahead in awarding the punishment without further
enquiry. But if the worker does not admit the charge and the charge merits major penalty, the
employer must hold enquiry to investigate into the charge. Proper and sufficient advance notice
should be given to the worker of the enquiry.

5. Conduct of Inquiry: The inquiry should be conducted by an impartial and responsible officer.
He should proceed in a proper manner and examine witnesses. Fair opportunity should be given
to the worker to cross- examine the management witnesses.

6. Recording the findings: The enquiry officer must record all the conclusion and findings. As far
as possible he should refrain from recommending punishment and leave it to the decision of the
appropriate authority.

7. Awarding Punishment: The management should decide the punishment on the basis of finding
of an enquiry, past record of worker and gravity of the misconduct.

8. Communicating Punishment: The punishment awarded to the worker should be communicated

to him quickly. The letter of communication should contain reference to the charge sheet, the
enquiry and the findings. The date from which the punishment is to be effective should also be
mentioned.
 TRADE UNIONISM

Dale Yoder defined a trade union as a continuing long term association of employees, formed
and maintained for the specific purpose of advancing and protecting the interest of the members
in their working relationship.
A trade union is a continuous association of persons in industry, whether employers, employees
or independent workers—formed primarily for the purpose of the pursuit of the interest of its
members and of the trade they represent.—The Trade Union Act 1926.

They are relationship between:

Workmen and Workmen

Workmen and Employers
Employers and Employers

Objectives of Trade Unions:

a.Wages and Salaries: The subject which drew the major attention of the trade unions is wages
and salaries. Of course, this item may be related to policy matters. However, differences may
arise in the process of their implementation. In the case of unorganised sector the trade union
plays a crucial role in bargaining the pay scales.

b. Working Conditions: Trade unions with a view to safeguard the health of workers’ demands
the management to provide all the basic facilities such as, lighting and ventilation, sanitation, rest
rooms, safety equipment while discharging hazardous duties, drinking, refreshment, minimum
working hours, leave and rest, holidays with pay, job satisfaction, social security benefits and
other welfare measures.

c. Discipline: Trade unions not only conduct negotiations in respect of the items with which their
working conditions may be improved but also protect the workers from the clutches of
management whenever workers become the victims of management’s unilateral acts and
disciplinary policies. This victimization may take the form of penal transfers, suspensions,
dismissals, etc. In such a situation the separated worker who is left in a helpless condition may
approach the trade union. Ultimately the problem may be brought to the notice of management
by the trade union and it explains about the injustice met out to an individual worker and fights
the management for justice. Thus, the victimised worker may be protected by the trade union.

d. Personnel Policies: Trade unions may fight against improper implementation of personnel
policies in respect of recruitment, selection, promotions, transfers, training, etc.
e. Welfare: As stated earlier, trade unions are meant for the welfare of workers. Trade union
works as a guide, consulting authority and cooperates in overcoming the personnel problems of
workers. It may bring to the notice of management, through collective bargaining meetings, the
difficulties of workers in respect of sanitation, hospitals, quarters, schools and colleges for their
children’s cultural and social problems.

f. Employee-employer relation: Harmonious relations between the employees and employer is a

sine quo non for industrial peace. A trade union always strives for achieving this objective.
However, the bureaucratic attitude and unilateral thinking of management may lead to conflicts
in the organisation which ultimately disrupt the relations between the workers and management.
Trade union, being the representative of all the workers, may carry out continuious negotiations
with the management with a view to promote industrial peace.

Reasons for Joining Trade Unions:

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
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 labor decisions of the management are under close scrutiny of
the labor 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
an employee joins a union under group
at work. On the other hand, those who
eyes of their fellow workers. They can
their co-workers are the members of the union. At times,
pressure; if he does not, he often has a very difficult time
are members of a union feel that they gain respect in the
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.

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.

Functions of Trade Unions:

Trade unions perform a number of functions in order to achieve the objectives. These functions
can be broadly classified into three categories:
1. Militant Functions :

One set of activities performed by trade unions leads to the betterment of the position of their
members in relation to their employment. The aim of such activities is to ensure adequate wages,
secure better conditions of work and employment, get better treatment from employers, etc.
When the unions fail to accomplish these aims by the method of collective bargaining and
negotiations, they adopt an approach and put up a fight with the management in the form of go-
slow tactics, strike, boycott, gherao, etc. Hence, these functions of the trade unions are known as
militant or fighting functions. Thus, the militant functions of trade unions can be summed up as:

« To achieve higher wages and better working conditions

« Toraise the status of workers as a part of industry
« To protect labors against victimization and injustice

2. Fraternal Functions :

Another set of activities performed by trade unions aims at rendering help to its members in
times of need, and improving their efficiency. Trade unions try to foster a spirit of cooperation
and promote friendly industrial relations and diffuse education and culture among their members.
They take up welfare measures for improving the morale of workers and generate self confidence
among them. They also arrange for legal assistance to its members, if necessary. Besides, these,
they undertake many welfare measures for their members, e.g., school for the education of
children, library, reading-rooms, in-door and out-door games, and other recreational facilities.
Some trade unions even undertake publication of some magazine or journal.
These activities, which may be called fraternal functions, depend on the availability of funds,
which the unions raise by subscription from members and donations from outsiders, and also on
their competent and enlightened leadership. Thus, the fraternal functions of trade unions can be
summed up as:

« To take up welfare measures for improving the morale of workers

« To generate self confidence among workers
« To encourage sincerity and discipline among workers
« To provide opportunities for promotion and growth
« To protect women workers against discrimination

3. Social Functions :

Besides the main economic functions consisting basically of organising unions and improving
their terms and conditions of employment to enable workers to meet their physical needs, some
unions have now started undertaking and organising welfare activities and also providing variety
of services to their members and sometimes to the community of which they are a part, which
may be grouped under following heads:

i) Welfare activities: Provided to improve the quality of work life including organisation
of mutual fund, cooperative credit societies for providing housing, cooperative stores,
cultural programmes, banking and medical facilities and training for women in various
crafts to help them to supplement their family income.

ii) Education: Education of members in all aspects of their working life including
improving their civic life, awareness in the environment around them, enhancement of
their knowledge particularly in regard to issues that concern them, their statutory and
other rights and responsibilities, workers’ participation in management.

iii) Scheme, and procedure for redressing their grievances: Some central union
organisations are also assisting the Government in implementing the Workers’ Education
Scheme.

iv) Publication of periodicals: News letters or magazines for establishing

communication with their members, making the latter aware of union policy and stand on
certain principal issues and personnel matters concerning members, such as births,
deaths, marriages, promotion and achievements.

v) Research: This is gaining importance and is intended mainly to provide updated

information to union negotiators at the bargaining table. Such research is to be more
practical than academic, concerning problems relating to day-today affairs of the union
 and its activities and union and management relations. Some of the research activities are
: (i) collection and analysis of wage data including fringe benefits, and other benefits and
services through surveys of comparative practices, data on working conditions and
welfare activities; (ii) preparation of background notes for court cases and also position
papers for union officials; (iii) collection and analysis of macro data relating to the
economy, industry sectors etc. All the above mentioned activities and services are
considered normal activities of unions in the Trade Unions Act which stipulates the
objectives on which general funds of the union can be spent.

4. Political functions: These functions include affiliating the union with a political party,
helping the political party in enrolling members, collecting donations, seeking the help of
political parties during the periods of strikes and lockouts.

Theories of Trade Unionism:

There is no one theory of Trade Unionism, but many contributors to these theories are
revolutionaries like Marx and Engels, Civil servants like Sydney Webb, academics like Common
and Hoxie and labour leader like Mitchall. Important theories of trade unionism are as follows.

1. Political Revolutionary Theory of Labour Movement of Marx and Engels: This theory is
based on Adam Smiths theory of labour value. Its short run purpose is to eliminate competition
among labour, and the ultimate purpose is to overthrow capitalist businessman. Trade union is
pure simple a class struggle, and proletarians have nothing to lose but their chains and they a
world to win.

2. Webb’s Theory of Industrial Democracy: Webb’s book ‘Industrial democracy’ is the Bible
of trade unionism. According to Webb,
' trade unionism is an extension of democracy from
political sphere to industrial sphere. Webb agreed with Marx that trade unionism is a class
struggle and modern capitalist state is a transitional phase which will lead to democratic
socialism. He considered collective bargaining as the process which strengthens labour.

3. Cole’s Theory of Union Control of Industry: Cole’s views are given in his book “World of
Labour™ 1913. His views arc somewhere in between Webb and Marx. He agrees that unionism is
class struggle and the ultimate is the control of industry by labour and not revolution as predicted
by Marx.

4. Common’s Environment Theory: He was sceptical of generalisations and believed only that
which could be proved by evidence. He agreed that collective bargaining was an instrument of
class struggle, but he summarised that ultimately there will be partnership between employers
and employees.

5. Mitchell’s Economic Protection Theory of Trade Unionism: Mitchell, a labour leader,

completely rejected individual bargaining. According to him unions afford economic protection
to.
6. Simons Theory of Monopolistic, anti-Democratic Trade Unionism: He denounced trade
unionism as monopoly founded on violence and he claimed monopoly power has no use save
abuse.

Classification of Trade Unions:

a. Closed Shop: Where management and union agree that the union would have sole
responsibility and authority for the recruitment of workers, it is called a Closed Shop agreement.
The worker joins the union to become an employee of the shop. The Taft-Hartley Act of 1947
bans closed shop agreements in the USA, although they still exist in the construction and printing
trades. Sometimes, the closed shop is also called the ‘Hiring Hall.”

b. Union Shop: Where there is an agreement that all new recruits must join the union within a
fixed period after employment it is called a union shop. In the USA where some states are
declared to be ‘right-to-work’.

c. Preferential Shop: When a Union member is given preference in filling a vacancy, such an
agreement is called Preferential Shop.

d. Maintenance Shop: In this type of arrangement no compulsory membership in the union

before or after recruitment exists. However, if the employee chooses to become a member after
recruitment, his membership remains compulsory right throughout his tenure of employment
with that particular employer. This is called a maintenance of membership shop or maintenance
shop.

e. Agency Shop: In terms of the agreement between management and the union a non union
member has to pay the union a sum equivalent to a member’s subscription in order to continue
employment with the employer. This is called an agency shop.

f. Open Shop: Membership in a union is in no way compulsory or obligatory either before or

after recruitment. In such organisations, sometimes there is no union at all. This is least desirable
form for unions. This is referred to as an open shop.

The above classifications are more usual in the west than on the Indian sub-continent.

Growth of Trade Union Movement:

Trade unions in India, as in most other countries, have been the natural outcome the modem
factory system. The development of trade unionism in India has chequered history and a stormy
career.
Early Period :
Efforts towards organising the workers for their welfare were made, during the early period of
industrial development by social workers, philanthropists and other religious leaders mostly on
humanitarian grounds. The first Factories Act, 1881, was passed on the basis of the
recommendations of the Bombay Factory Commission, 1875. Due to the limitations of the Act,
the workers in Bombay Textile Industry under the leadership of N M Lokhande demanded
reduced of hours of work, weekly rest days, mid-day recess and compensation for injuries.
Bombay Mill owners® Association conceded the demand for weekly holiday. Consequently,
Lokhande established the first Workers® Union in India in 1890 in the name of Bombay Mill
hands Association. A labour journal called “Dinabandu” was also published

Some of the important unions established during the period are: Amalgamated Society of
Railway Servants of India and Burma (1897), Management the Printers Union, Calcutta (1905)
and the Bombay Postal Union (1907), the Kamgar Hitavardhak Sabha (1910) and the Social
Service League (1910). But these unions were treated as ad hoc bodies and could not serve the
purpose of trade unions.

Modest Beginning:
The beginning of the Labour movement in the modest sense started after the outbreak of World
War I'in the country. Economic, political and social conditions of the day influenced the growth
of trade union movement in India. Establishment of International Labour Organisation in 1919
helped the formation of trade unions in the country. Madras Labour Union was formed on
systematic lines in 1919. A number of trade unions were established between 1919 and 1923.
Category wise unions, like Spinners’ Union and Weavers’ Union, came into existence in
Ahmedabad under the inspiration of Mahatma Gandhi. These unions were later federated into an
industrial union known as Ahmedabad Textile Labour Association. This union has been formed
on systematic lines and has been functioning on sound lines based on the Gandhian Philosophy
of mutual trust, collaboration and non-violence

All India Trade Union Congress :

The most important year in the history of Indian Trade Union movement is 1920 when the All
India Trade Union Congress (AITUC) was formed consequent upon the necessity of electing
delegates for the International Labour Organisation (ILO). This is the first all India trade union in
the country. The first meeting of the AITUC was held in October, 1920 at Bombay (now
Mumbai) under the presidentship of Lala Lajpat Rai. The formation of AITUC led to the
establishment of All India Railwaymen’s Federation (AIRF) IN 1922. Many Company Railway
Unions were affiliated to it. Signs of militant tendency and revolutionary ideas were apparent
during this period.

a) Period of splits and mergers: The splinter group of AITUC formed All India Trade Union
Federation (AITUF) in 1929. Another split by the communists in 1931 led to the formation of All
India Red Trade Union Congress. Thus, splits were more common during the period. However,
efforts were made by the Railway Federation to bring unity within the AITUC unity. These
efforts did bear fruit and All India Red Trade Union Congress was dissolved. Added to this, All
India Trade Union Federation also merged with AITUC. The unified AITUC’s convention was
held in 1940 in Nagpur. But the unity did not last long.

The World Was II brought splits in the AITUC. There were two groups in the AITUC, one
supporting the war while the other opposing it. the supporting group established its own central
organisation called the Indian Federation of Labour. A further split took place in 1947, when the
top leaders of the Indian National Congress formed another central organisation.

b) Indian National Trade Union Congress: The efforts of Indian National Congress resulted in
the establishment of Indian National Trade Union Congress (INTUC) by bringing the split in the
AITUC, INTUC started gaining membership right from the beginning.

¢) Other Central Unions: Socialists separated from AITUC had formed Hind Mazdoor Sabha
(HMS) in 1948. The Indian Federation of Labour merged with the HMS, Radicals formed
another union under the name of United Trade Union Congress in 1949. Thus, the trade union
movement in the country was split into four distinct central unions during the short span of 1946
to 1949. Some other central unions were also formed. They were Bharatiya Mazdoor Sangh
(BMS) in 1955, the Hind Mazdoor Panchayat (HMP) in 1965 and the Centre of Indian Trade
Unions (CITU) in 1970. Thus, splinter group of INTUC formed Union

Trade Union Congress, the split in the Congress Party in 1969 resulted in the split in INTUC and
let to the formation of National Labour Organisation (NLO).

Problems and Measures To Strengthen Trade Union:

Over the years, trade unions in India have been taken for a ride by outside, political leaders. In
the process, the interests of workers and their aspirations have been totally neglected. The Trade
Unions Act, 1926, did not go for recognising a representative union. As a result multiple unions
have cropped up, often with blessings from management and outsiders. The union finances have
not been very sound in the beginning. The average membership figures for each union remain
poor and have not improved.
The forces of liberalisation unleashed in early 90s have strengthened the hands of employers in
closing down unvyiable units. The new corporate ‘mantras’ productivity, performance, efficiency,
survival of the fittest have virtually pushed them to the wall-where their very survival looks
uncertain.
1. Trade Union leadership: The nature of leadership significantly influences the union-
management relations as the leadership is the lynch-pin of the management of trade unions.
The leadership of most of the trade unions in India has been outside leadership mainly
drawn from political parties.

2. Multiple unions: Multiple unionism both at the plant and industry levels pose a serious
threat to industrial peace and harmony in India. The situation of multiple unions is said to
prevail when two or more unions in the same plant or industry try to assert rival claims
over each other and function with overlapping jurisdiction.
The multiple unions exist due to the existence of craft unions, formations of two or more
unions in the industry. Multiple unionism is not a phenomenon unique to India. It exists
even in advance countries like UK and USA.

3. Union Rivalry: The formal basis for Trade Union Organisation is provided by the
Indian Trade Union Act, 1926. “Any seven or more members of a trade union may be
subscribing their name to the roles of the trade union and by otherwise complying with the
provisions of this act with respect to the registration, apply for registration of the trade
union under this Act.”

This provision has led to the formation of multiple unions and resulted in inter-union
rivalry in different industries. But the inter-union rivalry breaks the very purpose of the
trade unions by weakening the strength of collective bargaining.

On the other hand, the existence of a single, strong union not only protects the employee
interests more effectively but also halts the various unproductive activities of the unions
and forces the leaders to concentrate on the strategic issues.

4.Finance: Sound financial position is an essential ingredient for the effective functioning
of trade unions, because in the process of rendering services or fulfilling their goals, trade
unions have to perform a variety of functions and organise programmes which require
enormous financial commitments. Hence, it is imperative on the part of a trade union to
strengthen its financial position.
 WPM and EO

Worker’s Participation in Management:

The concept of worker’s participation in management is considered as a mechanism, her workers
have a say in the decision making process of an enterprise.

According to Kieth Davis, Participation refers to the mental and emotional involvement of a
person in group situation which encourages him to contribute to group goals and share the
responsibility of achievement

Objectives of WPM:
e To establish industrial democracy
e To build the most dynamic human resources
e To satisfy the workers” social and esteem needs
o To strengthen labour-management co-operation and thus maintain industrial peace and
harmony
e To Promote increased productivity for the advantage of the organization, workers and
society at large
e Its psychological objective is secure full recognition of the workers

Levels of WPM:
1. Information Participation: It ensures that employees are able to receive information and
express their views pertaining to the matter of general economic importance.
II. Consultative Importance: Here workers are consulted on the matters of employee
welfare such as work, safety and health. However, final decision always rests with the top
level management, as employee’s views are only advisory in nature.
IMI. Associative participation: It is an extension of consultative participation as management
here is under the morale obligation to accept and implement the unanimous decisions of
the employees. Under this method the managers and workers jointly take decisions.
IV. Administrative Participation: It ensures great share of workers’ participation in
discharge of managerial functions. Here decisions already taken by management come to
employees, preferably with alternatives for administration and employees have to select
the best from those for implementation.
V. Decisive Participation: Highest level of participation where decisions are jointly taken
on the matters relating to production and welfare.

Methods of WPM:
I. Suggestion Scheme: Participation of workers can take place through suggestion scheme.
Under this method workers are invited and encourage to offer suggestions for improving
the working of the enterprise.
 IL Works committee: Under the ID act,1947,every establishment employing 100 or more
workers is required to constitute a workers committee. Such a committee consists of
equal number of representatives from the employer and the employees.The main purpose
of this committee is to provide measures for securing and preserving amity and good
relations between employees and the employer.
IIL. Joint Management councils:Under this system JMC are constituted at the plant
level. These councils were setup as early as 1958.These councils consists of equal number
of representatives of the employers and employees,not exceeding 12 at the plant
level.The plant should employed at least 500 workers.This method is resolving the issues
in organisation.
Work directors:Under this method, one or two representatives of workers are nominated
or elected to the Board of directors,this is full-fledged and highest form of worker’s
participation in management.
Co-Partnership: Involves employees’ participation in the share capital of a company in
which they are employed,by virtue of their being shareholders, they have the right to
participate in the management of the company. Shares of the company can be acquired by
workers making cash payment or by way of stock options scheme.
VL Joint council and Shop Council : Every industrial unit employed more than 500,these
should be a joint council and Shop council, joint council shall meet at least once in
quarter.Each shop council consists of an equal number of representatives from both
employer and employee
Employer Organisations :
Employers' Organisations (EOs) are "formal groups of employers set up to defend, represent or
advise affiliated employers and to strengthen their position in society at large with respect to
labour matters as distinct from economic matters. They may conclude collective agreements but
this is not a formal rule and cannot be an element of their definition. Unlike trade unions, which
are composed of individual persons, employers' organisations are composed of enterprises. Most
legal definitions of a trade union apply to them. (Oechslin, 1990). The Trade Unions Act, 1926
includes in its purview, both associations of workers as well as employers.

Objectives of EOs :
a) Promote collective bargaining at different levels.
b) Bring a unified employers viewpoint on the issues of industrial relations to the
government in a concerted manner.
c) Represent in the meetings of ILC and SLC boards in conformity with tripartite approach
to labour matter.
d) Employers' Associations are formed to promote and protect interests of employers in
Trade and industry.

Structure of EO’s:
At present EOs are organised at three levels :

(a) Local Organisations : They serve the interests of local businessmen. The Bombay Mill
Owners Association, for example, has been formed to protect the local interests of manufacturing
units operating within the city. Such bodies operate through the local chambers of commerce.

(b) Regional Organisations : The regional outfits such as Employers' Federation to South India,
Employers” Association, Calcutta are affiliated to central employers organisation. They offer
consultancy service; take care of training, safety and welfare measures on behalf of their
members. They even have special committees for specific region or industry related problems.

(c) Central Organisations : AIDE, EFI, AIMO operated as apex bodies governing the affairs of
several regional, local associations. To have better coordination a super structure called the
Council of Indian Employers was formed in 1956, both AIDE and EFI under one umbrella.