INDUSTRIAL RELATIONS

Sona Vikas
 Syllabus
Unit I: Introduction to Industrial
Relations (IR)
The Concept of Industrial Relations,
Background to IR, Evolution of IR in India,
Nature, Objectives and Importance of IR; The
Dynamic Context of IR, Actors in Employee
Relations, Role of Trade Union in IR, Changing
Profiles of Major Stakeholders of IR in India.
Employers’ Organization, ILO in IR.
 Introduction
 Industrial relations constitute one of the most
delicate and complex problems of the modern
industrial society that is characterized by rapid
change, industrial unrest and conflicting
ideologies in the national and international
spheres.
 It is a dynamic concept that depends upon the
pattern of the society, economic system and
political set-up of a country and changes with the
changing economic and social order.
 It is an art of living together for the purposes of
production, productive efficiency, human well-
being and industrial progress.
 Concept
There is no unanimity on the meaning and scope

of industrial relations since different terms, such
as labour-management relations, union
management relations, personnel relations etc are
all in use and are used synonymously.

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.”
 What it Means
In its stricter sense, the term “industrial
relations” means relationship between
management and workmen in a unit or an
industry.

In its wider connotation, it means the

organization and practice of multi-pronged
relationships between workers and
management, unions and workers, and the
unions and managements in an industry.
 What it Means
Industrial relations is the relation created at different levels of
the organization by the diverse, complex and composite needs
and aspirations and attitudes and approaches among the
participants.
It involves not only employees and managements, but also
their collective forums and the State.
In an organization, these relationships may be personal and
informal at one end, and may be highly institutional with
legally prescribed structures and procedures, at the other end.
Industrial relations includes the processes through which
these relationships are expressed (such as, collective
bargaining, workers’ participation in decision-making, and
grievance and dispute settlement), and the management of
conflict between employers, workers and trade unions, when
it arises.
 What is Industry?
Industrial Disputes Act 1947 defines an industry as
any systematic activity carried on by cooperation
between an employer and his workmen for the
production, supply or distribution of goods or
services with a view to satisfy human wants or
wishes whether or not any capital has been
invested for the purpose of carrying on such
activity; or such activity is carried on with a motive
to make any gain or profit.
An industry is a whole gamut of activities that are
carried on by an employer with the help of his
employees and labors for production and
distribution of goods to earn profits.
 Who is an Employer?
An employer is defined from different perspectives as
 a person or business that pays a wage or fixed payment to
other person(s) in exchange for the services of such
persons or
 a person who directly engages a worker/employee in
employment or
 any person who employs, whether directly or through
another person or agency, one or more employees in any
scheduled employment in respect of which minimum rates
of wages have been fixed
As per Industrial Disputes Act 1947 an employer means:-
 In relation to an industry carried on by or under the
authority of any department of [the Central Government
or a State Government], the authority prescribed in this
behalf, or where no authority is prescribed, the head of the
department;
 in relation to an industry carried on by or on behalf of a
local authority, the chief executive officer of that authority
 Who is an Employee?
 Employee is a person who is hired by another person
or business for a wage or fixed payment in exchange
for personal services and who does not provide the
services as part of an independent business or
 An employee is any individual employed by an
employer or
 A person who works for a public or private employer
and receives remuneration in wages or salary by his
employer for his work or
 Employee, as per Employee State Insurance Act
1948, is any person employed for wages in or in
connection with work of a factory or establishment
to which the act applies
 Who can be an Employee?
In order to qualify to be an employee, under ESI Act, a
person should belong to any of the categories:
 those who are directly employed for wages by the
principal employer within the premises or outside in
connection with work of the factory or establishment or

 those employed for wages by or through an immediate

employer in connection with the factory or
establishment outside the premises of such factory or
establishment under the supervision and control of the
principal employer or his agent or

 employees whose services are temporarily lent or let on

hire to the principal employer by an immediate
employer under a contract of service (employees of
security contractors, labor contractors, house keeping
contractors etc. come under this category).
 Primary Objectives of IR
 Improving the economic
conditions of workers

 Increasing productivity

 Achieving industrial democracy

 Objectives of IR
1. Good labor management relations depend on employers and trade unions
being able to deal with their mutual problems freely, independently and
responsibly.
2. The trade unions, employers, and their organizations are desirous of
resolving their problems through collective bargaining, though in resolving
such problems the assistance of appropriate government agencies might be
necessary in public interest.
3. The workers’ and employers’ organization should be desirous of associating
with government agencies in consideration of general, public, social and
economic measures affecting employers’ and workers’ relations.
4. To check industrial conflict and minimize the occurrence of strikes, lockouts
and gheraos.
5. To minimize labour turnover and absenteeism by providing job satisfaction
to the workers and increasing their morale.
6. To establish and develop industrial democracy based on workers’
partnership in management of industry.
7. To facilitate government control over industries in regulating production
and industrial relations.
Importance of IR
 Industrial Peace
 Higher Productivity
 Industrial Democracy
 Collective Bargaining
 Fair benefits to Workers
 Higher Morale
 Facilitation of Change
Scope of Industrial Relations
In the narrow sense, IR means that the employer,
employee relationship confines itself to the relationship
that emerges out of the day to day association of the
management and the labor.

In its wider sense, IR includes the relationship

between an employee and an employer in the course of
the running of an industry and may project it to
spheres, which may transgress to the areas of quality
control, marketing, price fixation and disposition of
profits among others.
 Aspects of Industrial Relations
1. Promotion of healthy labor management relations
a) Existence of strong, well organized, democratic and responsible
trade unions and associations of the employers in the industry
b) Spirit of collective bargaining
c) labor welfare
2. Maintenance of industrial peace/avoidance of industrial
strife
a) Machinery for the prevention and settlement of industrial disputes
in the form of
i) legislative and administrative enactment-trade union act, industrial
dispute act, industrial employment act
ii) works committees and joint management councils
iii) conciliation officers and board of conciliation
iv) labor courts, industrial tribunals, national tribunals, courts of enquiry
v) provision of voluntary arbitration
b) Provisions of bipartite and tripartite forums for the settlement of
disputes
 Aspects of Industrial Relations
3. Promotion of industrial democracy
a) establishment of the shop councils and joint management
councils at the shop floor and the plant levels.
b) recognition of human rights in the industry
c) increase in productivity
 IR System
 An industrial relations system may be defined as
comprising the totality of power interactions of participants in
a workplace, when these interactions involve industrial
relations issues.
 It is viewed as an integral and non-separable part of the
organizational structure and its dynamics.
 An industrial relations system includes all the individuals and
institutions that interact at the workplace.
 Regardless of the level at which the system exists, an
industrial relations system can be viewed as having three
components:
(1) a set of individuals and institutions that interact;
(2) a context within which the interaction takes place; and
(3) an output that serves to govern the future relationship of the parties
 Components of IR System
 Participants: The participants in the industrial relations sphere are
composed of duly recognized representatives of the parties
interacting in several roles within the system.
 Issues: The power interactions of the participants in a workplace
create industrial relations issues. These issues and the
consequences of power interactions find their expression in a web
of rules governing the behaviour of the parties at a workplace.
 Structure: The structure consists of all forms of institutionalized
behaviour in a system. The structure may include collective
procedures, grievances, and settlement practices. Legal enactments
relevant to power interactions may also be considered to be a part
of the structure.
 Boundaries: In systems analysis, it is possible to find an issue
which one participant is totally indifferent to resolving while, at the
same time, the other participant is highly concerned about
resolution of the same. These issues may serve to delimit systems
boundaries.
 Dunlop’s Approach
Among the contributions, the most outstanding has been that
of Prof. John T. Dunlop of Harvard University.
He presented systems approach to Industrial Relations in his
book Industrial Relations Systems (1958)
Systems thinking is a framework that is based on the belief
that the component parts of a system can best be
understood in the context of relationships with each other
and with other systems, rather than in isolation.
The only way to fully understand why a problem or element
occurs and persists is to understand the part in relation to
the whole
 Dunlop’s Approach
Dunlop defines an Industrial Relations system as
“An Industrial Relations system at any one time in its
development is regarded as comprised of certain actors,
certain contexts, an ideology, which binds the industrial
relations system together, and a body of rules created
to govern the actors at the workplace and work
community. There are three sets of independent
variables: the ‘actors’, the ‘contexts’ and the ‘ideology’
of the system.”
 The Actors in a System
The actors are:
(a)hierarchy of managers and their representatives in
supervision,
(b)a hierarchy of workers (non-managerial) and any
spokesmen,
(c)specialized governmental agencies (and specialized
private agencies created by the first two actors)
concerned with workers, enterprises, and their
relationships.
 The Actors in a System
These first two hierarchies are directly related to each
other in that the managers have responsibilities at
varying levels to issue instructions (manage), and the
workers at each corresponding level have the duty to
follow such instructions.
The hierarchy of managers need have no relationship to
the ownership of the capital assets of the workplace,
the managers may be public or private or a mixture in
varying proportions.
The formal hierarchy of workers may be organized into
several competing or complementary organizations,
such as, works councils, unions, and parties.
 The Actors in a System
The specialized government agencies as actors may
have functions in some industrial relations systems so
broad and decisive as to override the hierarchies of
managers and workers on almost all matters.
In other industrial relations systems, the role of the
specialized governmental agencies, at least for many
purposes, may be minor or constricted.
 Actors in the IR System
Three main parties are directly involved in industrial relations:
 Employers: Employers possess certain rights vis-à-vis labors. They
have the right to hire and fire them. Management can also affect
workers’ interests by exercising their right to relocate, close or
merge the factory or to introduce technological changes.

 Employees: Workers seek to improve the terms and conditions of

their employment. They exchange views with management and
voice their grievances. They also want to share decision making
powers of management. Workers generally unite to form unions
against the management and get support from these unions.

 Government: The central and state government influences and

regulates industrial relations through laws, rules, agreements,
awards of court ad the like. It also includes third parties and labor
and tribunal courts.
Actors in the IR System
 Example of Employers’ Association
 The Employers’ Federation of India (EFI) was established in 1933,
as an association of autonomous organizations of industry and was
set up with the purpose of protecting, promoting and championing
the interests of employers mainly in the area of human resources,
industrial relations, labour problems and cognate matters.

 Employers’ Federation of India plays a special role as an

apex body of employers’ organizations and industries on matters
concerning labour, human resource management, industrial
relations and other related issues.
Example of Trade Unions (recognized)
 All India Central Council of Trade Unions (Communist Party of India
(Marxist-Leninist) Liberation)
All India Trade Union Congress (Communist Party of India)


All India United Trade Union Centre (Socialist Unity Centre of India)


Bharatiya Mazdoor Sangh (Rashtriya Swayamsevak Sangh)



Centre for Indian Trade Unions (Communist Party of India (Marxist))



Hind Mazdoor Sabha (socialists)



Indian National Trade Union Congress (Indian National Congress)



Labour Progressive Federation (Dravida Munnetra Kazhagam)



SEWA


Trade Union Coordination Committee (All India Forward Bloc)



United Trade Union Congress (Revolutionary Socialist Party)


 Some other Terms
Employment: The state of being employed or having a job.
Labor market: The market in which workers compete for jobs and
employers compete for workers. It acts as the external source from which
organizations attract employees. These markets occur because different
conditions characterize different geographical areas, industries, occupations,
and professions at any given time.
Industrial Relation System: The whole gamut of relationships between
employees and employees and employers which are managed by the means
of conflict and cooperation.
A sound industrial relations system is one in which relationships between
management and employees (and their representatives) on the one hand,
and between them and the State on the other, are more harmonious and
cooperative than conflicting and creates an environment conducive to
economic efficiency and the motivation, productivity and development of the
employee and generates employee loyalty and mutual trust.
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