LECTURE 5

Lecture 5
MODULE 1
TRADE UNIONISM
 SYLLABUS OF MODULE 1
 Introduction to Industrial Relations: Meaning, objectives, scope,
determinants of Industrial relations, Factors affecting Industrial relation

Lecture 5
 Approaches to Industrial relation: Psychological, Sociological, Human
Relation, Socio-ethical, Gandhian, system Approach

 Trade Unionism- Concept, objectives of Trade Unions and Methods of

achieving the objectives; Features and functions of trade unions

 Industrial Disputes: Concept, Features, causes, classification of industrial

disputes.

 Methods of prevention of Industrial Disputes: Tripartite and Bipartite bodies,

Standing orders and grievance procedure, Ethical codes, collective bargaining .
 TRADE UNION
 Trade Union" means any combination, whether
Temporary or Permanent, Formed primarily for the
purpose of regulating the relations between workmen

Lecture 5
and employers or between workmen and workmen, or
between employers and employers, or for imposing
restrictive conditions on the conduct of any trade or
business. Most trade unions are independent of any
employer. However, trade unions try to develop close
working relationships with employers. This can
sometimes take the form of a partnership agreement
between the employer and the trade union which
identifies their common interests and objectives.
 MEANING OF TRADE UNION
 trade union, also called labour union, association of
workers in a particular trade, industry, or company
created for the purpose of securing improvements in pay,

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benefits, working conditions, or social and political
status through collective bargaining.
 A trade union is an organisation made up of members (a
membership-based organisation) and its membership
must be made up mainly of workers.
 One of a trade union's main aims is to protect and
advance the interests of its members in the workplace.
CHARACTERISTICS OF  TRADE UNIONS
 Association of employees: A trade union is essentially an association of employees
belonging to a particular class of employment, profession, trade or industry. For example,
there are unions for teachers, doctors, film, artistes, weavers, mine workers and so on.
 Voluntary Association: An employee joins the trade union out of his free will. A person

Lecture 5
cannot be compelled to join a union.
 Permanent Body: A trade union is usually a permanent body. Members may come and go
but the trade union remains.
 Common Interest: The member of a trade union have certain matters of common interest-
job security, better pay and working conditions and so on, which bring them together.
 Collective Action: Even when an individual employee has any grievance over certain
management decisions, the matter is sorted out by the intervention of the trade union
Employees are able to initiate collective action to solve any problem concerning any
particular employee or all the employees.
 Rapport with the Management: The trade union seeks to improve relations between the
employees and employers. The officials of the trade union hold talks with the members of
the management concerning the problems of the employees in order to find an amicable
solution. It is thus possible for the employees to have better rapport with the management.
 OBJECTIVES OF A TRADE UNION
1. To regulate terms and conditions of employment
2. To improve the working conditions at work place.
3. To raise the living standards of workers.
4.To protect the workers by exploitation of management.
5. To help in maintenance of discipline of organisation/industry
6. To ensure the proper implementation of personnel and
welfare policies.
7. To replace managerial dictator ship by worker’s
democracy
8. To establish industrial peace by improving employees and
employers relations.

Lecture 5
9. To act as a best negotiator machinery.
10. To safeguard the interest of organisation and organisational
health.
11. In a broader sense, to protect the interests and welfare of
workers.
REASONS FOR JOINING TRADE UNION

Greater
Minimize
Bargaining

Lecture 5
Discrimination
Power

Sense of Sense of
Security Belongingness

Platform for self Betterment of

expression relationships
THE IMPORTANT FORCES THAT MAKE THE EMPLOYEES JOIN A UNION ARE AS
FOLLOWS:

 1. Greater Bargaining Power

The individual employee possesses very little bargaining
power as compared to that of his employer. If he is not

Lecture 5
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

Lecture 5
influence the management. Thus, there are chances of
favouritisms and discriminations. A trade union can compel the
management to formulate personnel policies that press for
equality of treatment to the workers. All the labour decisions of
the management are under close scrutiny of the labour union.
This has the effect of minimizing favouritism and discrimination.
 3. Sense of Security
The employees may join the unions because of their belief that it
is an effective way to secure adequate protection from various
types of hazards and income insecurity such as accident, injury,

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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.

Lecture 5
 5. Sense of Belongingness

Many employees joins a union because their co-workers are the

members of the union. At times, an employee joins a union under
group pressure; if he does not, he often has a very difficult time at
work. On the other hand, those who are members of a union feel
that they gain respect in the eyes of their fellow workers. They can
also discuss their problem with’ the trade union leaders.
 6. Platform for self-expression
The desire for self-expression is a fundamental human drive for
most people. All of us wish to share our feelings, ideas and
opinions with others. Similarly the workers also want the

Lecture 5
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 fulfill the important need for adequate
machinery for proper maintenance of employer-employee
relations. Unions help in betterment of industrial relations

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among management and workers by solving the problems
peacefully.
FUNCTIONS OF TRADE UNIONS
Primarily, the Trade Unions have the purpose of regulating
the relation between (i) Workmen and employers; (ii)
Between workmen and workmen; and(iii) Between
employers and employers.

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The important basic functions of trade unions as listed
by the National Commission on labour are:
(i) To secure fair wages to workers.
(ii) To safeguard security of tenure and improved
conditions of service.
(iii)To enlarge opportunities for promotion and training.
(iv)To improve working and living conditions.
V. To promote identity of interests of workers with their
industry.
VI. To offer responsive co-operation in improving levels
of production and productivity, discipline and high

Lecture 5
standards of quality; and
VII. To promote individual and collective welfare.
VIII. To provide for educational, cultural and
recreational facilities.
OVERALL THESE FUNCTIONS CAN
BE BROADLY CLASSIFIED INTO
THREE CATEGORIES:
Militant functions
One set of activities performed by trade unions leads to the betterment of the position

Lecture 5
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
•To raise the status of workers as a part of industry
•To protect labours 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.
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
 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

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of strikes and lockouts.
 METHODS OF ACHIEVING TRADE
UNION OBJECTIVES
The use of collective bargaining

Lecture 6
Mutual Insurance

Legal Enactment

Representation

Collective Action

Arbitration
 METHODS OF ACHIEVING TRADE
UNION OBJECTIVES
 The objectives of a trade union are achieved by a
pursuit of traditional methods. These are:

Lecture 6
1. The organisation of a trade union on the basis of the
craft or industry in which its members are employed,
such as general unions and professional employee’s
organisations.
 METHODS OF ACHIEVING TRADE
UNION OBJECTIVES
  Collective bargaining, which is the essence of
industrial relations, for it is through collective bargaining
that the terms and conditions of employment are

Lecture 6
determined and under which work is performed’
satisfactorily.
  Grievance processing and handling procedures, under
which grievances are redressed or dealt with by a
correction of situation or by channelling up of these “up
the line”.
 METHODS OF ACHIEVING TRADE
UNION OBJECTIVES
  Arbitration, by which unsettled or unresolved disputes
can be settled by an outside agency.

Lecture 6
 Political pressure exercised through legislators who are
capable of bringing about changes in labour laws; and
 Mutual insurance through common contributions to
meet the financial needs of workers when there are
stoppages of work.
 Lecture 5
THANK YOU
BBAE0102: INDUSTRIAL
RELATIONS

Presented by:
Niharika Singh
Assistant Professor
Institute of Business Management
GLA UNIVERSITY, MATHURA
BBAE0102: INDUSTRIAL RELATIONS
 Syllabus of Module 1
• Introduction to Industrial Relations: Meaning, objectives, scope, determinants
of Industrial relations, Factors affecting Industrial relation

• Approaches to Industrial relation: Psychological, Sociological, Human Relation,

Socio-ethical, Gandhian, system Approach

• Trade Unionism- Concept, objectives of Trade Unions and Methods of

achieving the objectives; Features and functions of trade unions

• Industrial Disputes: Concept, Features, causes, classification of industrial

disputes.

• Methods of prevention of Industrial Disputes: Tripartite and Bipartite bodies,

Standing orders and grievance procedure, Ethical codes, collective bargaining .

Lecture 1
 Industrial Relations
• Industrial relations are the relationships between
employees and employers within the industrial
settings.
• It looks at the relationship between management and
workers, particularly groups of workers represented
by a union.
• Industrial relations are basically the interactions
between employers, employees and the government,
and the institutions and associations through which
such interactions are mediated.
BBAE0102: INDUSTRIAL RELATIONS
• Let’s break down the concept:

• “Industry”: Industry refers directly to productivity – when one or many

individuals are engaged in a productive task we call those people
“industrious”.  

• “Relations”: In the context of “Industrial relations”, the word refers to

any relationship that exists within a productive sphere between an
employer and his employees and the union that represents them.

• Industrial Relations: Industrial relations then refers to the relationship

between employers and employees.
• This needs to be a good relationship, the divisions need to be working
together as efficiently as possible, in order to maximize economic gain
and the potential for industrial growth.
BBAE0102: INDUSTRIAL RELATIONS
 Some definitions of industrial relation

• 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”.
• J. T. Dunlop defined industrial relations as
“the complex interrelations among managers,
workers and agencies of the governments”.

BBAE0102: INDUSTRIAL RELATIONS

 Features of Industrial Relations:
• 1. Industrial relations are outcomes of employment relationships in an industrial
enterprise. These relations cannot exist without the two parties namely employers
and employees.
• 2. Industrial relations system creates rules and regulations to maintain harmonious
relations.
• 3. The government intervenes to shape the industrial relations through laws, rules,
agreements, terms, charters etc.
• 4. Several parties are involved in the Industrial relations system. The main parties
are employers and their associations, employees and their unions and the
government. These three parties interact within economic and social environment
to shape the Industrial relations structure.
• 5. Industrial relations are a dynamic and developing concept, not a static one. They
undergo changes with changing structure and scenario of the industry as and when
change occurs.
• 6. Industrial relations include both individual relations and collective relationships.
BBAE0102: INDUSTRIAL RELATIONS
BBAE0102: INDUSTRIAL RELATIONS
Objectives of Industrial Relations

BBAE0102: INDUSTRIAL RELATIONS

BBAE0102: INDUSTRIAL RELATIONS
 Factors affecting Industrial Relations
• Institutional factors- State Policy, Labour Laws,
Collective Bargaining Agreement, Labour Unions.

• Economic factors: Types of business,

government economic policies, labor supply in
market

• Social factors: caste, color, social values, norms,

social status
BBAE0102: INDUSTRIAL RELATIONS
 Factors affecting Industrial Relations
• Technological factors- introduction of new and
improved technology

• Political factors- Political system, system of

government political philosophy, attitude of
government towards trade unions.

• Global factors- International relations, global

conflicts, international Labour agreements.
BBAE0102: INDUSTRIAL RELATIONS
IN NUTSHELL
Labour relations, i.e. relations
between union and
management

Employer-
employees relations

Groups relations i.e. relations

between industry and society

Promotion and development

of healthy labour-
management relations
Maintenance of
industrial harmony

BBAE0102: INDUSTRIAL RELATIONS

 Determinants of industrial
relations
• History of industrial relations
• Economics satisfaction of workers
• Social and psychological satisfaction
• Off-the-job conditions
• Enlightened trade unions

BBAE0102: INDUSTRIAL RELATIONS

 Continued…

• Negotiating skills and attitudes of management

and workers
• Public policy and legislation
• Better education
• Nature of industry

BBAE0102: INDUSTRIAL RELATIONS

 Scope of Industrial Relations

• Protecting interest of employees

• Providing reasonable wages to employees
• Provide safe and hygienic working conditions
• Providing social security measures
• Maintaining strong trade unions
• Collective bargaining

Lecture 2
 Evolution of IR in India
 Employee- employer relationship.

 Employer are the people who own the instrument and material of
production and employ the workers.

 Relationship between employee-employer was informal, personal and

intimate since the business and industrial establishments were small.

 the growth of the giant sized joint stock companies and business
corporations, which employed thousands of workers changed the
relationships.

Lecture 3
 In India occupations were carried on by small manufacturers in their
cottages, mostly on hereditary basis.

 Slavery was common.

 Master slave relations later on converted to master servant.

 The Indian craft and arts were badly damaged during the invasions of
foreign invaders, which lasted about 700 years

 After invasion of East India Company in 1883, the British Industrialist

developed some industries( Cotton, jute, railways plantation, coal mines
etc)

Lecture 3
 Industrial relations is a by product of industrial revolution, it
originates from excessive exploitation of workers by the
owners of industries.

 Trade union were resisted and crushed by employers.

 the first world war is the first milestone enroute to

industrial relations in India.

 After war prices of consumer goods goes up and workers

were unable to afford it.
Lecture 3
 Other events which accelerated the pace of industrial
relations:

 Success of Russian Revolution in 1917

 Formulation of ILO
 AITUC was established in 1920
 In 1924 labour party Government formed in U.K.
 The Indian Trade Union Act 1926
 Royal Commission on Labour( 1929-31) was formed.

Lecture 3
 By the end of 19th century and beginning of 20th century
Government started paying attention towards inhuman
working conditions of mine and factory workers.

 British Government set up a Royal Commission on Labour

(1929-1931) to conduct a study on the working conditions
of Indian Labour.

 As a result of the same, conciliation and adjudication were

formulated.

Lecture 3
 After the Independence Industrial Dispute Act, 1947.

 Which laid down a comprehensive dispute settlement machinery to be

applicable to all states and passed three important Central Labour Laws:
 The Minimum Wages Act, 1948
 The Employee State Insurance Act, 1948
 The Employee Provident Funds Act,1952

 Five Years Plans of India.

 In1969 first National Commission on Labour was formed and many banks, sick
textile mills, sick steel plants were nationalized.

 New Economic Policies in 1991

Lecture 3
Approaches to Industrial Relation
– System Approach
– Unitary Approach
– Pluralist Approach
– Marxist Approach
– Sociological Approach
– Gandhian Approach
– Psychological Approach
– Human Relation Approach

Lecture 4, Part 1
 1. System Approach to IR
• John Dunlop gave the systems theory of
Industrial Relations in the year 1958. He
Believed that every human being belongs to a
continuous but independent social system
culture which is responsible for framing his or
her actions, behaviour and role

Lecture 4, Part 1
 The industrial relations system was based
on three sets of different variables:

• Actors: By actors here we mean that the individuals or

parties involved in the process of developing sound industrial
relations. This variable is denoted by ‘A’.
• Contexts: The contexts refer to the setup in which the actors
perform the given tasks. It includes the industry markets (M),
technologies (T) and the power distribution in the
organization and labour unions(P).
• Ideology: The similar ideas, mentality or beliefs shared by
the actors helps to blend the system. It can be expressed by
the initial (I)
Lecture 4, Part 1
 System Approach Formula
• Based on these variables, the following
formula was derived by Dunlop:

John Dunlop’s Systems Approach Formula:

R=F(A,T,M,P,I)

This formula represents that the industrial

relations system can be seen as a joint function of
all the elements mentioned above.
Lecture 4, Part 1
 2. Unitary Approach

• This approach can be seen as a method of bringing together the

teamwork, common objective, individual strategy and mutual efforts of
the individuals.

• This theory believes that the conflicts are non-permanent

malformations, which are a result of improper management in the
organization.

• Moreover, if everyone works towards the achievement of the common

goals by maintaining peace and cooperation in the workplace, it will
tend to benefit everyone associated with the organization. It also
considered the organizational conflicts resulting in strikes to be useless
and destructive.

Lecture 4, Part 1
 Aims of the unitary approach
• To create a productive, effective and harmonious work
environment;

• to develops a trustworthy, open, fair and transparent work

culture;

• to create a cordial work environment;

• to restrict the role of the tribunals and other government

associations like the trade unions and initiates direct
negotiation between the management and the employees.

Lecture 4, Part 1
 3. Pluralist Approach

• The pluralist theory also called the ‘Oxford Approach’,

• Proposed by Flanders in the year 1970.

• This approach explained that the management and the trade

unions are the different and robust sub-groups which unanimously
form an organization.

• Collective bargaining was considered to be a useful technique for

resolving organizational conflicts. Due to this, the management’s
role has transformed from imposition and control; to influencing
and coordinating with the workers.

Lecture 4, Part 1
 Following are some of the highlights
of this approach:
• The organization should appoint personnel experts and industrial relations
specialists to act as mediators between the management and trade unions.
They need to look into the matters of staffing, provide consultation to the
managers and the unions, and negotiate with both the parties in case of conflicts.

• The organization should ensure that the trade unions get recognized and the
union leaders or representatives can perform their duties freely.

• In the case of industrial disputes, the organization can avail the services of
the external agent for settlement of such issues.

• The managers should resolve to a collective bargaining agreement when there is

a need for negotiation and settlement with the trade unions.

Lecture 4, Part 1
 Formula

• The following formula denotes the Flanders pluralist theory:

– R=f(b)
– R=f(c)

• Where,
– ‘R‘ is the rules of industrial relations;
‘b‘ is collective bargaining;
‘c‘ is resolving conflicts through collective bargaining.

• It depicts that the rules of industrial relations are a function of

collective bargaining, or in other words, it is a function of
handling conflicts through collective bargaining.
Lecture 4, Part 1
 4. Marxist Approach
• Lenin came up with the concept of a Marxist approach in the year 1978, where he
emphasized the social perspective of the organization.

•  Also known as the 'Radical Perspective',

• the Marxist approach is based on the proposition that the economic activities of

production, manufacturing, and distribution are majorly governed by the objective of
profit. 

• Marxists, like the pluralists, regard conflict between employers and employees as
inevitable.

• This theory perceived that the industrial relations depend upon the relationship between
the workers (i.e., employees or labour) and the owners (i.e., employer or capital).

• There exists a class conflict between both the groups to exercise a higher control or
influence over each other.

Lecture 4
Karl Marx was a German
philosopher, economist,
historian, sociologist, political
theorist, journalist and socialist
revolutionary. 
 Assumptions of this approach 
• Industrial relations are a significant and never-ending
source of conflicts under capitalism which cannot be
avoided. However, cases of open disputes are quite
unusual.
• Understanding the conceptions of capitalized society,
capital accumulation process and the pertaining social
relations, give a better overview of the industrial relations.
• The Marxist theory assumed that the survival of the
employees without any work is more crucial than the
survival of the employer without the labours.

Lecture 4
 5. Sociological Approach

• The industries comprise of different human beings who

need to communicate with the individuals of other
organizations.

• Due to the difference in their attitude, skills, perception,

personality, interests, likes and dislikes, needs, they are
usually involved in one or the other conflict. Even
the social mobility and other aspects including transfer,
default, group dynamics, stress, norms, regulations and
status of the workers influence their output and the
industrial relations.
Lecture 4
• This theory also emphasizes on the impact of
various changes in the work
environment (i.e., economic, technical and
political) on the interactions and relationship
shared by the employer, employees,
institutions and the government bodies.

Lecture 4
 6. Gandhian Approach

• The Gandhian approach to industrial relations

was proposed by the father of our
nation, Mahatma Gandhi or Mohandas
Karamchand Gandhi, who was also a well-
known labour leader.

Lecture 4
 Features of the Trusteeship or
Gandhian theory:
• Gandhi Ji was not against strikes; instead, he gave the following conditions to
carry out a favourable strike:
– The workers or labours can go on a strike only if there is a specific grievance.
– There should be complete non-violence while carrying out strikes.
– The ones who are not involved in the strikes should not be tormented.

• Though Gandhi Ji was not against carrying out strikes, he believed that it
should be the last option to which the labour should resort to, after the failure
of all the constitutional and peaceful ways of resolving conflicts and
negotiating with the employer.

• The Gandhian approach illustrated that nature had provided us with human
capabilities and different kinds of property. Thus, such nature’s gift belongs to
the whole society and cannot be considered as of personal possession by
anyone.
Lecture 4
 Contd..
• The objective of this theory is to adopt non-violent ways to bring in economic
parity and material enhancement in a capitalist society.

• Gandhi Ji perceived that every organization is a joint venture, and the labour
should be treated as associates or co-partners with the shareholders.
Moreover, the workers should have proper knowledge of all the business
transactions as it is their right.

• He focussed on increasing the production and believed that the gains should

be shared with the employees because of whom it has been possible.

• He also emphasized that the industrial disputes and conflicts between the
parties should be resolved healthily through interactions, arbitration and
bilateral negotiations.

Lecture 4
 7. Psychological Approach

• The psychologists perceived the problem of the industrial relations as a

result of the varying perception and mindset of the key participants,
i.e., the employees and the management.

• The ‘thematic application test’ was conducted by Mason Harie to

understand the behaviour, mindset and perception of the two
significant workgroups, i.e., executive and the union leaders, in a
particular situation.

• In this test, both the groups were asked to rate and interpret the
photograph of an ordinary middle-aged person, and the results were
drastically contrasting. The union leaders perceived the person to be a
‘manager‘ whereas, the executives thought that the person was a
‘union leader‘.
Lecture 4, Part 3
 Major Interpretations of the test 

• The general belief of a management

representative is entirely different from that of a
labour representative.

• Both the management and labour do not consider

each other to be trustworthy.

• Even each of these groups considers that the other

one lacks emotional and interpersonal attributes.
Lecture 4, Part 3
• These contrasting impressions are a result of certain economic as
well as non-economic factors, like values, power, position,
personal objectives, recognition, beliefs, education, social security
and income of the individuals.

• Also, each of these parties forms a negative image or perception of

each other. Due to which they always find fault in the actions and
behaviour of one another.

• As a result of the factors mentioned above,  there remains a tensed

interpersonal relation leading to conflicts which ultimately hinders
the image and interest of the individuals involved.

Lecture 4, Part 3
 8. Human Relations Approach

• The person behind the concept of the human relations approach

is Keith Davis. The organization and the society comprise of
human beings who vary in various aspects as their behaviour,
emotions, attitude, mindset and personality. But, they have
come together to achieve common organizational goals and
objectives.

• The concept of human relations approach underlines the need

for making the individuals familiar with the work situations of
the organization and uniting the efforts of the workers. The
purpose is to meet the social, psychological and economic
objectives, by enhancing the overall productivity.

Lecture 4, Part 3
 Objectives 
• To ensure cooperation by promoting the
mutual interest of the organization;

• to enhance the productivity of the individuals;

• to satisfy the psychological, social and

economic needs of the employees.

Lecture 4, Part 3
• This theory focused on enhancing the level of
efficiency, worker’s morale and job satisfaction by
applying specific techniques or tools and policies.

• The human relations approach highlighted a

technique for enforcing proper control over the
work environment by forming small
workgroups and at the same time eliminating the
hurdles of sound labour-management relations.

Lecture 4, Part 3
SOCIO - ETHICAL APPROACH:
This approach though not much accepted has been widely
discussed academically with regards to industrial relations.

According to this approach industrial relations besides having

a sociological base does have some ethical ramifications.
Good industrial relations can be only maintained when both
the labour and management realise their moral responsibility
through mutual co-operation and greater understanding of
each other’s problems.

Lecture 4, Part 3
BBAE0102: INDUSTRIAL RELATIONS
INDUSTRIAL DISPUTE

Module : 1
Industrial Relations
 Syllabus of Module 1
• Introduction to Industrial Relations: Meaning, objectives, scope,
determinants of Industrial relations, Factors affecting Industrial relation

• Approaches to Industrial relation: Psychological, Sociological, Human

Relation, Socio-ethical, Gandhian, system Approach

• Trade Unionism- Concept, objectives of Trade Unions and Methods of

achieving the objectives; Features and functions of trade unions

• Industrial Disputes: Concept, Features, causes, classification of industrial

disputes.

• Methods of prevention of Industrial Disputes: Tripartite and Bipartite bodies,

Standing orders and grievance procedure, Ethical codes, collective bargaining .

Lecture 9
 INDUSTRIAL DISPUTE: INTRODUCTION
Dictionary meaning of ‘dispute’ is ‘disagreement’,
‘mutual antagonism as of ideas, interests etc.’ So,
industrial dispute is disagreement/mutual antagonism
as of ideas, interests etc. between parties in industry.
• An industrial dispute is defined as a conflict or a
difference in opinion between management and
workers regarding employment. It is a disagreement
between an employer and employees representative
i.e. trade union. The issue of disagreement is usually
pay or other working conditions.
 Industrial Dispute
• During an industrial dispute, both the parties try to pressurize each
other to agree to their terms and conditions. The industrial unrest
manifests itself as strikes, lock-outs, picketing, gheraos and indiscipline
on the part of workers.
• According to the Industrial Dispute Act, 1947. Section 2 (K) “Industrial
Disputes mean 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
 terms of employment or
 with the conditions of labour”.
• The word employment refers to a condition in which a man is kept occupied
in executing any work. In other words, it means not only an appointment to
any office for the first time but also the continuity of that appointment.[20]

b. Non-employment: Non-employment is the negative of employment and

means that disputes of workmen out of service with their employers are
within the ambit of the definition. It is the positive or negative act of an
employer that leads to employment or non-employment. The failure to
employ or refusal to employ are actions on the part of the employer which
would be covered under the term non-employment
• Terms of employment: The word terms postulate existence of contract of
employment. The rights and obligations of employer and employees inter se
depend, in the first instance, on the initial fact of a contract between the
parties.
• Conditions of labour: The expression conditions of labour has reference to
the amenities to be provided to the workmen and the conditions under which
they are required to work
 Features of Industrial Disputes
• There must be a disagreement or a conflict between:
– Employers and employers (such as wage-welfare where labour is
scarce).
– Among employers and employees ( such as demarcation disputes).
– Workers and workers
• The subject matter is associated with any person’s employment
or non-employment, or the terms of employment or labour
conditions, or it must pertain to any industrial matter.
• The relationship between the employer and the employee must
exist and be the outcome of a contract and the employee’s
employment.
 Causes of Industrial Dispute
• Industrial disputes may arise out of economic,
political, social or from socio - economic
background. At the same time the attitude of
the employers and employees is also
responsible to a great extent.
• The factors leading to industrial disputes may
be industry related, management related,
government related or union related
 The most common causes of industrial
disputes can be listed as:
• 1. Wages and Allowances
• 2. Personnel Policies
• 3. Retrenchment
• 4. Lay off
• 5. Leave and hours of work
• 6. Bonus
• 7. Indiscipline
• 8. Violence
• 9. Inter Union rivalry
• 10. Non-implementation of awards or agreements
• 11. Non-fulfillment of demands
• 12. Workload
• 13. Work standards
• 14. Surplus labour
• 15. Working conditions
• 16. Change of manufacturing process
• 17. Violation of rules or codes
• 18. Shift working
• 19. Political motives
• 20. Closure or lockouts
• 21. Inability to communicate effectively
• 22. Authoritarian or autocratic attitude of management.
• 23. Non-implementation of labour law
 Classification of Industrial Dispute
• Industrial disputes can be classified into four
major types, known as interest disputes,
grievance disputes, unfair labour practices
disputes and recognition disputes
 Type # 1. Interest Disputes:
• These conflicts are also called ‘conflicts of interest’ or
‘economic disputes’. Such disputes relate to the
establishment of new terms and conditions of employment
for the general body workers i.e., that affect the masses.
• Generally, such type of disputes originate form trade union
demands or proposals for increase in wages or other
emoluments, fringe benefits, job security or other terms of
employment. These demands are put forth by the trade
unions with a view to negotiate through collective
bargaining and disputes when the parties fail in their
negotiations to reach an agreement.
 Type # 2. Disputes over Unfair Labour
Practices:
• Such disputes arise over the malpractices adopted by the
management against a worker or trade union. The
examples of such malpractices may be discrimination
against workers for their being members of the trade union
or their involvement in union activities; interference,
restraint or coercion of employees from exercising their
right to organise, establishment of employer sponsored
union and coerce the workers to join such union; recruiting
new employees during a strike which is not declared illegal;
failure to implement an award, settlement or agreement;
indulging in acts of violence etc.
Type # 3. Grievance or Rights Disputes:
• These disputes are also known as ‘conflicts of rights’ or ‘legal
disputes’. They involve individual workers or a group of workers
in the same group. In some countries, such disputes are called
‘individual disputes’. Such disputes arise from the day to day
working relations of the workers and management, usually, as a
protest by the workers or workers against an act of management
that is considered to violate his or their legitimate right.
• Grievances typically arise on such questions as discipline,
promotion, transfer or dismissal of a worker, payment of wages,
fringe benefits, overtime, retirement benefits, seniority work-
rules, leave rules etc., which are against the practice and affect
their rights adversely. 
 Type # 4. Recognition Disputes:
• Such type of disputes arises when the management
refused to recognise a trade union for purposes of
collective bargaining. Issues under this category differ
according to the cause that led the management to
refuse recognition. Here the problem is that of attitude.
• In such case, resolution of issue depends upon whether
the rules for recognition of a trade union exist or not.
Such rules may be laid down by law, for they may be
Conventional or derived from prevailing practices in the
country.
 Prevention of Industrial Disputes
• Bipartite and Tripartite Bodies
• 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.
 The works committees
• According to the Industrial Disputes Act of India, every employer
should form a works committee if they have more than 100
employees in the organization.
• The works committee members should be comprised of equal
number of workmen (employees) and individuals representing
employers.
• The need for the works committee procedure is to reduce the
material differences between both parties.
• This committee looks after maintaining a healthy relationship
between the employer and the employees through the collective
efforts of both parties. It also aims at improving industrial peace
and works on matters involving general peace and work-related
issues.
 The joint management councils
• Under this system, Joint Management Councils are constituted
at the plant level. These councils were set up as early as 1958
and consist of an equal number of representatives of the
employers and employees, not exceeding 12 at the plant level.
The plant should employ at least500 workers. This council is
entrusted with the responsibility of administering welfare
measures, supervision of safety and health schemes,
scheduling of working hours, rewards for suggestions etc. The
council is to take up issues related to accident prevention,
management of canteens, water, meals, revision of work rules,
absenteeism, indiscipline etc.
 Tripartite body
• The principles and policies of the tripartite body have been a machinery of
consultancy at the industrial and national levels. The tripartite body was
established to make peace and improve relations between management and
unions, and maintain smooth functioning of union management relations.
• The two main tripartite bodies are:
• Indian Labour Conference (ILC) and
• Standing Labour Committee(SLC) 

• Purpose of Tripartite Body:

• a. Bring the aggravated parties together for mutual settlement of
differences, and encourage a spirit of cooperation and goodwill.
• b. Promote uniformity in labor laws and legislation.
• c. Discuss all matters of All India importance as between employers and
employees.
• d. Determine a plan for settlement for all disputes.
 Industrial Employment (Standing Orders) Act

• The concept of ‘Standing Orders’ is one of the recent growth

in relation to Indian labour- management. Prior to 1946, there
existed chaotic conditions of employment, wherein the
workmen were engaged on an individual basis with uncertain
and vague terms of employment. The Act was enacted as a
simple measure to remedy this situation – by bringing about
uniformity in the terms of employment in industrial
establishments so as to minimize industrial conflicts.
• The Preamble of the Act imposes a compulsion upon the
employers, “to define with sufficient precision the conditions
of employment” and make the same known to the workmen.
 Objective of the Act

• The objective of the Industrial Employment

(Standing Orders) Act, are as follows:
1. To provide regular standing orders for workers,
factories, and working relationship.
2. To ensure that the employee recognises the
terms and conditions of the employees and thus
to minimise exploitation of the workers.
3. To promote industrial peace and harmony by
supporting fair industrial practices.
 Details Enclosed in Standing Orders
• Section 2(g) of the Act states that “standing orders” are the rules relating to matters set out in the
Schedule, i.e. with reference to:
1. Workmen classification into categories such as permanent, temporary, on probation,
etc.
2. Method of informing the workmen about working hours, holidays, etc.
3. Shift working.
4. Temporary stoppages of work.
5. Provisions concerning the termination of employment and the notice period.
6. Actions/inactions which are treated as misconduct and the consequences for the fault.
7. Grievance redressal mechanism in case of unjust or unfair treatment by the employer.
8. Attendance marking system for workers.
9. Employment termination and the notice thereof to be provided by both employer and
the workers.
10.Procedure for availing leave and encashment, accumulation of leaves.
11.Workmen records and information, etc.
Submission of Draft Standing Orders: Section 3

• A statutory obligation is imposed by the Act upon

the employer(s) to submit, individually/ jointly,
five copies of a ‘Draft Standing Order’ within six
months of its applicability to the industrial
establishment, which should be inclusive of the
matters enlisted in the Schedule and of the MSOs
(short for – Model Standing Orders), if any, and
to which shall be annexed such documents
containing particulars of the workmen employed.
 Meaning of Grievance
• A grievance is a sign of employee’s discontent with job
and its nature. The employee has got certain aspirations
and expectations which he thinks must be fulfilled by the
organisation where he is working. When the
organisation fails to satisfy the employee needs, he
develops a feeling of discontent or dissatisfaction.
• Dale S. Beach has defined grievance as “any
dissatisfaction or feeling of injustice in connection with
one’s employment situation that is brought to the notice
of the management”.
What is a grievance procedure? A definition

• When an employee feels that they’ve been wronged – be it an

unfair paycheck, an unpleasant assignment, or sexual
harassment, they can file a grievance with the company they
work for. This is a formal complaint procedure that generally has
rules that the investigator must follow.
• A grievance is a concern, problem or complaint that an employee
raises with an employer.
• An employee can raise a grievance for a number of reasons and
circumstances, including but not limited to, a change in their
terms and conditions of employment, bullying or harassment in
the workplace, wages and discrimination.
• Employers should have effective measures in place to deal with a
grievance.
 Features of a systematic grievance redressal
procedure
• A systematic grievance redressal procedure must have the following
features:

• 1. It should be simple, fair and easy to understand.

• 2. It should be in writing.
• 3. It should specify to whom employees may take a grievance in the first
instance (normally their immediate boss), and that they have the right to
be accompanied by a colleague or a trade union representative.
• 4. It should encourage employees to put forth their grievances.
• 5. It should state where, in the event of the grievance remaining
unresolved, an employee should then address his complaint.
• 6. It should specify time limits within which the aggrieved employee can
expect to be notified of the outcome of his complaint.
 Five step grievance redressal procedure
• ndia’ at present has only a voluntary grievance procedure
called the Model Grievance Procedure formulated in
pursuance to the Code of Discipline adopted by the 16th
Session of the Indian Labor Conference in 1958. Most of
the grievance procedures nowadays are built after the
Model Grievance Procedure with certain changes to suit
individual operations, size and special requirements of an
enterprise.
• The Model Grievance Procedure provides for five
successive time-bound steps, each leading to the next in
case the aggrieved worker prefers an appeal.
 Level I:
• An aggrieved worker shall first present his
grievance verbally in person to-the officer
designated by the management for this
purpose. An answer shall be given within 48
hours of the presentation of complaint.
 Level II:
• If the worker is not satisfied with the decision of this
officer or fails to receive an answer within the stipulated
period, he shall, either in person or accompanied by his
departmental representative, present his grievance to the
head of the department designated by the management
for the purpose of handling grievances. (For this purpose,
a fixed time shall be specified during which, on any
working day, aggrieved worker could meet the
departmental head for presentation of grievances.) The
departmental head shall give his answer within 3 days of
the presentation of grievance.
 Level III:
• If the decision of the departmental head is unsatisfactory, the
aggrieved worker may request for the forwarding of his
grievance to the Grievance Committee which shall make its
recommendations to the manager within 7 days of the worker’s
request Unanimous recommendations of the Grievance
Committee shall be implemented by the management.
• In the event of difference of opinion among the members of the
Grievance Committee, the views of the members, along with the
relevant papers, shall be placed before the manager for final
decision. In either case, the decision of the management shall
be communicated to the workman concerned ,by the personnel
officer within 3 days from the receipt of the Grievance
Committee’s recommendations.
 Level IV

• Should the decision from the management be not

forthcoming within the stipulated period or should
it be unsatisfactory, the worker shall have the right
to appeal to management for a revision. While
making this appeal, the worker, if he so desires,
shall have the right to take a union official along
with him to facilitate discussion with management
for solving his grievance. Management shall
communicate its decision within a week of the
workmen’s revision/petition.
 Level V:
• If no agreement is still possible the union and the
management may refer the grievance to voluntary
arbitration within a week of the receipt by the worker of
management’s decision.

• In the case of any grievance arising out of discharge or

dismissal of a workman, the above- mentioned procedure
shall not apply. Instead; a discharged or dismissed workman
shall have the right to appeal either to the dismissing
authority or to a senior authority whom the management
within a week from the date of dismissal or discharge shall
specify.
 Collective Bargaining
• Collective bargaining is a method of negotiation among a group of workers and
employers regarding working conditions, employment contracts, rules
of the workplace, overtime pay, base pay, holidays, vacation time, sick
leave, hours of work, health and retirement benefits collectively known as terms
of employment. 
• Collective bargaining is a key means through which employers and their
organizations and trade unions can establish fair wages and working conditions. It
also provides the basis for sound labour relations. Typical issues on the
bargaining agenda include wages, working time, training, occupational health and
safety and equal treatment. The objective of these negotiations is to arrive at a
collective agreement that regulates terms and conditions of employment.
 Collective Bargaining Agreement (CBA)
• A collective bargaining agreement (CBA) is a written legal
contract between an employer and a union representing
the employees. The CBA is the result of an extensive
negotiation process between the parties regarding topics
such as wages, hours, and terms and conditions of
employment.
• It is important to note that once a CBA is reached, both
the employer and the union are required to abide by that
agreement. Therefore, an employer should retain legal
counsel before participating in the collective bargaining
process.
 Features of Collective Bargaining
• 1. Group and Collective Action
• Group and Collective action is the main feature of collective
Bargaining. It is a collective process in two ways. First, the
workers collectively bargain for their shared interests and
benefits. Secondly, the workers and management jointly
arrive at an amicable solution through negotiations.
• 2. Strength
• It is an industrial democracy at work. Across the table, both
parties bargain from a position of equal power. In collective
Bargaining, the bargaining power of both parties is equal.
• 3. Continuous Process
• It is a constant process. It establishes a regular and stable relationship
between the parties involved. It involves not only the contract
negotiation but also the contract’s administration or application. The
continuous process is the main feature of Collective Bargaining.
• 4. Flexible
• It is flexible, and the parties must adopt a flexible attitude throughout
the Bargaining process since no party can afford to be rigid and
inflexible. The unique feature of collective Bargaining is that both the
parties concerned start negotiations with entirely different views. But
finally, reach a point acceptable to both parties. It is, therefore, not a
one-way street but a give-and-take process.
• 5. Voluntary
• Collective Bargaining is a voluntary process by the
management and workers. Both the parties come to
the Bargaining to have a meaningful dialogue on
various troubling issues.
• 6. Dynamic
• Collective Bargaining is a relatively new concept and is
growing, expanding, and changing. The idea used to be
emotional, turbulent, and sentimental in the past. But
now, it is scientific, factual, and systematic.
 Scope of Collective Bargaining
• 1. The Cooperation & Communication b/w trade union
organisation and the management
• It covers matters such as employers’ duties to consult,
inform & decide in cooperation with the union and
confidentiality clauses. Also, employers support trade union
activities by providing them with technical facilities, etc.
• 2. Employment & Working Conditions
• It covers matters such as employment contracts &
termination of employment; principles of redundancy policy.
Also, working time & working time schedules; & holiday &
paid leave is included in it.
• 3. Wages & Remuneration
• It covers matters such as the wage system & minimum wage tariffs;
payment for working overtime & working on holidays. However,
extra payments for difficult & risky working conditions & night work;
& severance payment in the event of collective redundancies. In this
area, the scope of Collective Bargaining is wide.
• 4. Occupational Safety & Health
• These matters such as employee duties & cooperation with trade
unions on safety and health issues. Preventive & corrective
measures to improve working conditions & to reduce risk at work.
Also, the establishment of trade union Safety & health delegates in
companies.
• 5. Human resource development & Other Social
issues
• It covers matters such as Training & human resources
development activities. Moreover, the creation &
utilization of the Social fund in an enterprise.
• 6. Reduction of conflict between Management &
trade unions
• It covers the procedures applied in serious
disagreements between social partners.
 Key Functions of Collective Bargaining
• Collective Bargaining plays an essential role in preventing and settling industrial disputes by performing the
following functions:
• 1. Economic Strength
• Increase the economic strength of employees & management.
• 2. Uniformity
• Establish uniform conditions of employment.
• 3. Fair Redressal
• Secure a prompt & fair redressal of grievances.
• 4. Norms
• Lay down Fair rates of wages & other norms of working conditions.
• 5. Efficiency
• Achieve an efficient functioning of the organization.
• 6. Stability
• Build the stability & prosperity of the Company.
• 7. Regulation
• It provides a method of regulating the conditions of employment of those directly concerned about them. It
is the very essential function of Collective Bargaining.
• 8. Solution
• It solves the problem of sickness in industry and ensures old benefits, age pension benefits & other fringe
benefits.
Process of Collective Bargaining
• 1. Preparing for Negotiations
• This may cover a number of areas that its members are most concerned
with. It may include a survey of members or several focus groups.
• Simply put, the trade union and negotiators look to find out the key points
by which they are to negotiate on.
• For instance, the lack of local canteen may be an issue, or alternatively,
workers want to get paid extra to work Sundays. Whatever the key issues,
the first stage would be to compile these ready for the negotiation.

• 2. Propose Key Demands

• Once a list of key items are highlighted by the unions members, it
compiles them down into an official document which is then passed onto
the relevant party/parties. These are also known as ‘key demands’.
• It may include items that are ‘red lines’ by which the negotiation must
start with. Often this would be wages or key benefits to the employee. So
if these are not met, negotiations will fall down.
• 3. Negotiation
• As part of the process, both parties may take time to gather information on
whether a specific course of action would be best. For instance, an increase in
an employees salary by 10 percent is going to cost the company. So the
negotiators would have to see whether this is financially possible.
• In turn, the negotiation will continue in a circular fashion until an agreement is
reached or negotiations completely break down.
• 4. Agreement Reached
• An agreement is usually reached in principle and it is at this stage by which the
more intricate details are hammered out.
• Legal wording, and binding agreement are put into place so both parties are
liable. Any legal documents are then signed.
• In short, this stage is where the agreement is put into place and the final
details are arranged.
• 5. Administration of Agreement
• It is at this stage by which unions will look to hold the
employer to account and ensure the agreement is being
implemented. For instance, are workers getting paid the
agreed minimum salary? Or, has the firm built the newly
requested canteen on time and to an agreed upon quality.
• Furthermore, some agreements may have a set expiry
date by which another set of negotiations will take place.
So the collective bargaining system can be seen as a
continuous process.
 Code of Ethics – Conduct Guidelines

• The code of discipline and conduct communicates to the

employees, the expected behavior and the professional
responsibilities.

• The significance of code of conduct is that each employee

should behave and perform in a way that preserves the
company values and commitments.

• The code expects employees to conduct business with

integrity and honesty. Moreover, it expects the employer to
be an equal opportunity employer.

Lecture 10, Part 1

 Code of Ethics Factors
The Code of Ethics of a company is determined on the basis of following
factors:

• Honesty and integrity:

The organization expects the employees to observe honesty and integrity
and such conduct should be fair and transparent. The employees should
show truthfulness in actions throughout their tenure in the organization.

• Disclosure of information:
The employees should not disclose the company information to third
parties and other outside organizations. However the employers should
reveal the various policies of the organization to their employees and
make them aware about the code of conduct and other policies.

Lecture 10, Part 1

 Code of Ethics Factors
• Harassment:
The work environment should be free from all kinds of harassment, especially sexual
harassment and verbal harassment. No physical harassment like hitting or pushing are
acceptable on part of employees.

• Outside employment:
Employees should not indulge in to any kind of concurrent employment without the
prior knowledge of employer.

• Conflict of interest:
An employee should not indulge into other professions or services or other interests
which might conflict with the interest of the company. This means personal interests
should not overshadow organizational interests.

Lecture 10, Part 1

 Code of Ethics Factors
• Confidentiality:
Employees should protect company’s confidential information. The financial records and
unpublished data should be kept within the organizations and should not be spread
outside the organization.

• Equal opportunity employer:

This factor expects the employer to be an equal opportunity, that is, no discrimination
should be done on the basis of caste, color, race, gender, religion or physical disabilities.

• Misusing company resources:

Employees should not misuse company resources, intellectual property, time and other
facilities. They are provided to them for business purposes and thus, should be used in a
cost effective way.

Lecture 10, Part 1

 Code of Ethics Factors
• Health and safety:
An employer should provide a safe and healthy work
environment to its employees. Proper cleanliness and
lightening should be provided. A health and safety
committee can be set up by the employer consisting of
representatives of workers as well.

• Payment and gifts:

The employees should neither accept nor offer any kind of
illegal payments, donations, remuneration and gifts from
outsiders.

Lecture 10, Part 1