Industrial Relations

The Statutory Mechanism

1. Works Committee

2. Conciliation Machinery

3. Voluntary Arbitration

4. Compulsory Arbitration

5. Constitutional Adjudication
 Strikes, Lockouts, and Gheraos

Year Strikes Lockouts Gheraos

1961 1240 117 82

1971 2478 24 41
1976 1241 218 9
1987 1348 451 4
1990 1397 389 1
1992 1011 702 1
1995 732 334 1
 Workers on Strike
Strikes Lockouts
(1000's)

1991 1278 532 872

1992 1011 703 767
1993 914 479 672
1994 808 393 626
1995 732 334 683
1996 763 403 609
1997 793 512 637
1998 665 432 801
1999 540 387 1099
2000 426 345 1044
2001 372 302 488

2002(p) 174 212 362

• Steady Decline In Strikes (1278 to 174)
• Lockouts declining slowly
• Lockouts actually overtook strikes in 2002 
  Striking Workers rose in late 90's before decline to new low
 Total Due To 
Due To Strike
Mandays  Lock Out

1991 26.43 12.43 14

1992 31.26 15.13 16.13
1993 20.3 5.61 14.69
1994 20.98 6.65 14.33
1995 16.29 5.72 10.57
1996 20.28 7.82 12.47
1997 16.97 6.3 10.68
1998 22.06 9.35 12.71
1999 27.23 10.62 16.61
2000 28.75 11.95 16.8
2001 23.7 5.5 18.2
2002(p) 11.1 2.2 8.9
Lockouts cause more loss of mandays than strikes (surprised ?)

• Sharp Declining Trend over last 2 years

• Lockouts cause more loss of mandays than strikes (surprised ?)
 Comparison With Other Countries

Country No. of No. of Workers No. of Man-days

Disputes Involved (in lakhs) Lost (in lakhs)

USA 44 2 59

UK 598 3 19

Canada 66 2 34

Australia 1193 7 14

India 1825 13 241

 Why most disputes have occurred in India

Causes 1935 1946 1975 1995

1. Indiscipline N.A N.A 8.9 21.9

2. Job insecurity 14.5 17.2 29.8 12.5

3. Wages and Allownces 62.8 37.1 32 27.2

4. Bonus 1.4 4.8 8.0 5.6

5. Leave & working hrs. 6.8 2.9 2.9 1.2

6. Other causes 14.5 21.2 19 31.6

 Trade Union

“A association of wage-earners for

the purpose of maintaining and
improving the conditions of their
working lives”
Why do workers join Trade Union
• To enjoy economic security

• Protection from management’s action

• Have a say

• Recognition
 Functions of Trade Union
• To promote, defend and protect the
interest of their members
• To maintain & improve living standards
of their members
• To negotiate with the employer
• Enter in to the agreement
• Organising and guiding workers
• Influence management decision process
 Major Central Trade Unions
Union No. of Affiliated Membership %
unions In Lakhs
INTUC 4428 54.36 20.8
AITUC 2996 29.74 11.4
CITU 3011 23.86 9.2
HMS 1248 43.56 16.7
BMS2871 40.81 15.7
UTUC 413 7.85 3.0
UTUC(LS) 231 11.98 4.0
 Problems of Trade Unions
• Small Size
• Outside Leadership
• Limited membership
• Migratory Character
• Low income & thus lack of funds
• Illiteracy
• Multiplicity
• Attitude of Employer
• Lack of unity
Components of Pay Structure

The following, however, do not come under the term wages

 Bonus
 Payments made under a profit sharing scheme
 Value of house accommodation
 Medical allowances
 Travelling allowances
 Any other sum paid to defray special expenses incurred by
the worker
 Contribution to pension, provident fund
 Any amenity or service excluded from the computation of
wages
Wage Policy In India

A wage policy offers certain guidelines for determining a wage

structure. The term wage structure refers to various pay scales
showing rages of pay within each grade. Three important elements of
wage policy in India need to be elaborated here
 Minimum wage: Wage sufficient to sustain and preserve the
efficiency of the worker and offer basic amenities of life
 Fair wage: It is above the minimum wage but below the living
wage. It is fixed, taking into account factors such as the
productivity of labour, prevailing wage rates, level of national
income and its distribution, the employer’s capacity to pay etc.
 Living wage: This is the highest amount of wages proposed by
the government, offering basic amenities of life and satisfying
the social needs of worker.
 STATE-WISE RANGE OF MINIMUM WAGES As on
1.10.2002

Sl. Centre/States/UTs. No. of Scheduled Lowest and Highest rates of

No. Employments minimum wages per day (in
Rs.) @.

(1) (2) (3) (4) (5)

1 Central Sphere 45 54.52 130.49

2 Andhra Pradesh 65 49.08 106.04
3 Arunachal Pradesh 25 39.87 52.19
4 Assam 64 50.00 65.70
5 Bihar 74 45.00 84.92
6 Goa 20 60.00 125.00
7 Gujarat 51 50.00 105.00
8 Haryana 50 74.61 74.61 $
9 Himachal Pradesh 24 51.00 45.00 69.04
10 Jammu & Kashmir 18 100.00
State regulation of wages

Institutions involved in fixation of

wages

 E m p lo y e r
 C o lle c tiv e B a r g a in in g
 L e g is la tio n
 W a g e B o a rd s
 P a y C o m m is s io n s
 M in im u m W a g e s A c t
 P aym ent of W ages A ct
 A d ju d ic a t io n M a c h in e r y
Collective Bargaining
 Definitions
• In 1897, Sidney & Beatrice Webb coined the term
Collective Bargaining in a Book titled Industrial
Democracy
– In Individual Bargaining, employer makes a series of
employment contracts with individual employees
– In Collective Bargaining a single contract works for all
• Samuel Gompers took the term to USA to describe
the dynamic process for solving problems arising
directly out of Employer-Employee relationship
 ILO perspective
• Collective Bargaining entails negotiations
about working conditions and terms of
employment between an employer, a group
of employers or, one or more employers’
organisations, on the one hand, and one or
more representative workers’ organisation
on the other, with a view to reaching
agreement.
 TYPES
• SINGLE EMPLOYEE : ONE PLANT
• SINGLE EMPLOYER : MANY PLANTS
• MANY EMPLOYERS ;MANY PLANTS : SAME
INDUSTRY

• AA) PLANT LEVEL ---- I

• BB) LOCAL LEVEL
• CC) REGIONAL LEVEL
• DD) INDUSTRIAL LEVEL------ II
• EE) INDUSTRIAL –REGIONAL –LOCAL LEVEL
• FF) NATIONAL / ECONOMY LEVEL
 Scope of Collective Bargaining
• In Indian context, the practice covers:
– Wages, Bonus, Over-time, Compensation
– Leaves and Leave encashment
– Hours of work, Spread-over of work-shift
– Workplace Safety, Health care & Welfare
– Production and Productivity Norms
– Job-study, Work-measurement, Manning
– Performance Appraisal, Staffing, Transfer, Promotion
– Housing, Community welfare
– Disciplinary Action and Procedures
– Disinvestment, Merger, Acquisition
 Why is it Bargaining
Is it to Bar the opponent from
Gaining?
The Process involves :
• Proposals
• Counter Proposals
• Exchange of Facts and Information
• Exchange of Views and Opinions
• Offers and Concessions
• Agreement after thorough discussion
 Walton Mckersie’s classificaton
4 Types of Collective Bargaining

1. Distributive: Win/Loss (Pie-splitting)

2. Integrative: Win/Win (Pie-enlarging)
3. Attitude structuring: (Trust building)
4. Intra-organizational: (Consensus building)
 Conditions essential for success of
Collective Bargaining
• Strong and Stable Trade Union
• Recognition of Trade Union
• Mature Leadership
• Avoidance of Unfair Labour Practice
• Willingness to listen to reason, give & take
• Supportive Government Agencies
• Favourable political climate
 How CB works?
1. Each side fixes Negotiating Teams
2. Assessment of respective Bargaining Power
3. Preparatory work before first Meeting
4. Negotiation
5. Informal meetings and parleys
6. Ironing out differences & consensus recording
7. Fine tuning Agreement & Signing ceremony
8. Announcement
 Weaving a Negotiating Team
• Management perspective:
– Highest Rank must stay away
– Personnel/HR/IR/Welfare area should coordinate
– Concerned area should head the team
– Allied areas may join only for value addition
• Union Perspective:
– Highest possible rank may lead
– Concerned area should coordinate
– Flexible strategic rotation of other representatives
 The 3-Stages of Negotiation
1. Flooding of Demands:
• Tempers & Tantrums run amuck –immature
representatives let loose
• many additional & irrational demands come
• Real demands get disguised momentarily
2. Reasoning of Demands:
• Mature leadership (skilled negotiator) takes over
• Real demands surface ; trivial not pressed further
• Maximum and minimum limits of concession gauged
3. Matching of Demands:
• Balancing of rock-bottom demands & final positions
• Informal parleys and risk-assessment
 Announcing the Agreement
• Management cadre should know from Mgt
• Workers should first learn from Union and
then confirm with Management
• Each side to openly praise the other (win-win)
• None should reveal informal understanding
before appropriate time / context
• Agreement should have Single interpretation
WORKERS PARTICIPATION IN
MANAGEMENT
 METHODS OF PARTICIPATION

• SUGGESTION SCHEME
• JOINT CONSULTATION
• EMPLOYEES’ REPRESENTATIVE ON
THE BOARD
• CO-PARTNERSHIP
• CO-DETERMINATION
• AUTO MANAGEMENT
 AREAS OF PARTICIPATION

• INFORMATION
• CONSULTATIVE
• ASSOCIATE
• DECISION AND IMPLEMENTATION
 WORKERS PARTICIPATION IN
INDIA

• WORKS COMMITTEE(1947)
• JOINT MANAGEMENT COUNCILS(1958)
• SHOP COUNCILS AND THE JOINT
COUNCILS
• APPOINTMENT OF WORKERS’ REPS ON
THE BOARD