Management of Industrial Relations

Unit-1

Industrial Relation

Industrial Relation Meaning

The term industrial relations comprises of two words, i.e. ‘industry’ and ‘relations’.
The term ‘industry’ refers to any productive activity in the organization in which
the employees are engaged. On the other hand, the term ‘relations’ refers to the
relationship, which exists within the industry between the management and the
employees. The relationship between management and employees within the
organization within the organizational settings is defined by industrial relations.
Industrial relations emerge directly or indirectly from management-trade union
relationships.

Aspects of Industrial Relation

(a) Promotion of development of healthy industrial relations at plant and

industry level.

(b) Maintenance of industrial peace and avoidance of disputes.

(c) Promotion of industrial democracy through participation schemes.

(d) Group relations, i.e., relations between various groups of workmen.

(e) Community relations, i.e., relations between industry and society.

(f) Promotions and development of healthy labour-managements relations.

(g) Prevention of industrial disputes and maintenance of industrial peace and

harmony.

Characteristics/Features of Industrial Relation

Following are the significant characteristics /features of industrial relations:

 Industrial relations are the result of employment relationships in industrial

enterprises.

 Industrial relations introduced the concept and method of balancing and

cooperating.

 Industrial relations formulate rules and regulations to maintain harmonious

relations.

 The intervention of the Government to shape the industrial relation is made

through laws, agreements, rules, charters, etc.

 Industrial relations incorporate both individual relations and collective

relations.

 Several parties play a role in industrial relations. The main parties are
employees and their organization, employers and their association, and
government.
Objectives of Industrial Relation

Following are the different objectives of industrial relation.

 To establish industrial peace.

 To safeguard the interests of both workers and management.

 To avoid industrial disputes.

 To raise the production capacity.

 To establish industrial democracy.

 To minimize the labor turnover rate and absenteeism.

 To safeguard the workers economic and social interests.

 To contribute to the economic development of the country through

productivity.

 To establish a full employment situation.

 To minimize strikes, lockout, Heroes, etc., by providing good working

conditions and fair wages to the workers.

Nature of Industrial Relation

 Industrial relations are concerned with the relationship between management

and workers.

 Industrial relations safeguard the interest of employees.

  Industrial relations are concerned with the system, rules, and procedures
used by unions and employees to determine the reward for effort and other
conditions of employment safeguard the interests of the employees and their
employer and regulate how employers treat their employees.

 Industrial relations maintain a balance with employee expectations,

employer associations, trade unions, and other social and economic
institutions of societies.

 Industrial relations help in resolving disputes, conflicts, and controversies

between labor and management.

Scope of Industrial Relation

Industrial Relations are a wide-reaching term. Different scholars have expressed

their different views on the scope of industrial relations. According to Dale Yoder,
“Industrial relations incorporate policies related to recruitment, selection, training
of workers, personnel management, and collective bargaining.” According to the
International Labor Organization (ILO), industrial relations incorporate the
relations between state and employers and relations between trade unions and
employers associations.
According to Richard A Lester, the scope of industrial relations is no
longer limited only to trade unions and industrial management; rather it includes
all aspects of labor such as wages, productivity, social security, management, and
employee policies. Trade Union policies also form part of it.
In a modern organization, the industrial relations functions are
performed by the Industrial Relations Department. This function is performed
under the supervision of the Director of the Industrial Relations department. In the
performance of this function, support is rendered by different managers and
subordinates. Different important functions performed by workers of the industrial
relation department include:

 Management of policies and programs of industrial relations.

 Public Relation

 Labor Relation

 Recruitment, Selection, and Placement of labourers.

 To provide medical and health-related services.

 To maintain employment records of the employees.

 Provision of recruitment test, ability test, skill test, and intelligence test.

 Provision of training and education program

What is the Importance of Industrial Relations?

 Promotes Democracy: Industrial relations means employing collective

bargaining to resolve issues faced by workers. This collective bargaining is
generally employed through cooperation and mutual agreement amongst all
the affected parties, i.e., democracy, management, and employees unions.
This enables an organization to establish industrial democracy, which
eventually motivates the workers to perform their best to the growth and
prosperity of the organization.

 High Morale: Good industrial relations enhance the morale of the

employees and motivate the workers to work more efficiently.
  Avoid Conflicts Between Management And Union: Industrial relations
minimize issues between unions and management. This is because industrial
relations incorporate setting up machinery to resolve issues faced by
management and employees through mutual agreement to which both these
parties are bound. This results in ignoring any unfair practices that could
lead to major conflicts between employers and trade unions.

 Minimizes Wastage: Satisfactory Industrial relations are maintained on the

basis of co-operation and recognition of each other in the department. It
helps to minimize wastage of material, manpower, and costs.

 Economic Growth and Development: Good and harmonious industrial

relations result in increased efficiency and hence prosperity, which in turn
minimize turnover and other tangible benefits to the organization. This
promotes economic growth and development.

Functions of Industrial Relations

The important functions of industrial relations are:

 To establish communication between workers and management to maintain

the sound relationship between the two.

 To establish support between managers and employees.

 To ensure the creative contribution of trade unions to avoid industrial

conflicts.

 To safeguard the interests of workers and the management,

  To avoid an unhealthy and unethical atmosphere in an industry.

 To formulate such considerations that may promote understanding,

creativity, and cooperativeness to enhance industrial productivity.

 To ensure better workers’ participation.

Conflict in Industrial Relation

Industrial relations conflict a business and its employees can lead to issues such as
low employee morale, poor work performance and even legal issues if the
company/industry don't handle them appropriately. Some common causes of
industrial conflict range from how you compensate, reward and discipline
employees to what type of work environment and schedule you provide them.
Understanding these problem sources can help the company/industry make labor
management decisions that reduce conflict and provide a better experience for the
company’s/industry’s staff.

1. ISSUES WITH EMPLOYEE COMPENSATION

One of the most common causes of industrial dispute relates to how the company
pays its employees. When employees feel that their wages don't suffice for the
work they're performing or that they don't receive regular wage increases that keep
up with inflation, this can cause disputes with the company and the need to
negotiate pay. At the same time, if the company offers new employees for a
warehouse position a higher starting wage than some existing workers make after
several years of service, this can create a conflict between employees and
management. There may also be conflict if the company doesn't compensate
workers for all time worked, such as when employees find the need to work off the
clock.
 2. DISAGREEMENTS ON REWARDS AND DISCIPLINE

When employees disagree on how the company handles rewards and discipline,
this can lead to industrial relations conflict that the companies have to address. For
example, if the company promotes someone with less experience, skills and
seniority over more tenured workers, this can lead to arguments that the decision
was unfair. The same is true when the company reward and punish employees
inconsistently, such as letting specific employees get away with being late or
slacking off while giving others write-ups for the same behaviors. If such issues
aren't resolved, the company’s workers may feel there's no point in doing quality
work.

3. UNDESIRABLE WORKING HOURS

Working hours that significantly interfere with your employees' work-life

balance or routine is another one of the causes of industrial conflict. If the
company’s employees were hired to work a regular day shift, forcing them to begin
working nights can cause issues with their family schedule and can lead to
industrial disputes. Problems can also occur if the companies significantly shorten
employees' work hours so that they can no longer afford to pay their bills, or the
company begin requiring longer shifts and overtime that take away time from
employees' families.

4. LACK OF STAFF

Not having enough employees to handle the company's demand can cause
disputes with workers who feel that they are overworked or have to perform tasks
outside their job description. Such an issue may point to a problem in working
conditions, job preparation or compensation that drives existing employees away,
thus causing high turnover for your company. This cause of labor relations conflict
may also be due to the company not hiring the best employees due to a need to
quickly provide staffing and not performing thorough enough screening as
necessary.

5. POOR WORK ENVIRONMENT

The work environment you provide for employees can cause industrial relations
conflict when workers feel unsafe, unhealthy or uncomfortable doing their
jobs. If the company give workers substandard office equipment, don't keep the
place clean or don't control the temperature properly, employees can become
distracted and frustrated. Other examples of a poor work environment that can
cause industrial relations conflict is one where scheduling is not properly done or
employees don't get sufficient breaks, leading to fatigue and lower morale.

6. HANDLING INDUSTRIAL RELATIONS CONFLICT

While creating a positive work environment, offering a fair compensation and

reward system and being consistent with rules are good steps toward the
prevention of industrial disputes, the company can still expect disagreements to
happen from time to time. The key is to give your employees an easy way to
share their grievances and handle them as early as possible to avoid bigger
problems such as absenteeism, strikes or even legal issues. For some challenging
or heated disputes, the company might find it helpful to engage a neutral third
party for mediation to allow for a fair outcome.
Cooperation in Industrial relation

Cooperation in Industrial relation can be only possible if there is way to find out
the conflict removal methods. When there is no conflict there will always be
cooperation among the employees, workers and the organization. Therefore, the
organization should not think about their gain only, they should also think about
their employees, workers who are acting as a pillar for the company to grow. If the
company think about their employees, workers etc. then only the employees,
workers will think about the company will work perfectly (which includes no
conflicts, disputes and peacefully working).

Parties to IR:
Various parties to IR can be grouped into three categories — employees and
their associations/ unions, employers and their associations, and government
and is various agencies. These three parties perform different roles in IR and
derive their power within the framework of environment.

i. Employees:

Employees are a party to IR as they are affected most by the IR outcomes. In

an IR system, employees may be grouped into two categories- those who have
been defined as workers/workmen under the Industrial Disputes Act, 1947 and
those who are not covered by this Act.

Various characteristics of employees such as their commitment to the

organization, their level of education and social background, their attitudes
towards the management and the organization, and their commitment to the
work determine the extent to which they will-

i. Improve their conditions of employment;

ii. Voice any grievances;

iii. Exchange views and ideas with management; and

iv. Share in decision making.

ii. Trade Unions:

Trade unions or other employees’ associations play crucial role in the

effectiveness or otherwise of an IR system. The employees may have
grievances, claims, and other demands on individual basis but they express
these, often, on group basis. In order to strengthen their bargaining power, they
form some kind of associations to voice their grievances.

According to Armstrong, trade unions/employees’ associations have the

following broad objectives in relation to IR:

i. To increase the bargaining advantage of the individual worker vis-a-vis the

individual employer by joint or collective action for the individual action.

ii. To secure improved terms and conditions of employment for their members,
and the maximum degree of security to enjoy these terms and conditions.
iii. To obtain improved status for the worker in his work.

iv. To increase the extent to which unions can exercise democratic control over
decisions that affect their interests by power sharing at the national, corporate,
and plant levels.

The role of unions in determining the status of IR in an organization depends

on their membership, attitudes towards management, inter-union rivalry, and
the strengths at the national or local level.

iii. Employers:

The second party to IR is employers. Since in the corporate form of

organization, management represents the owners/employers, it can be treated
as the second party to IR. The management is an organization is responsible to
various stakeholders including the employees. Therefore, employer-employee
relationship is also termed as management-labour relations.

Management tends to see employee relations in terms of the following

activities:

i. Creating and maintaining employee motivation.

ii. Obtaining commitment from the workforce.

iii. Establishing mutually beneficial channels of communication throughout the

organization.
iv. Achieving high level of efficiency.

v. Negotiating terms and conditions of employment with employees’

representatives.

vi. Sharing decision making with employees.

vii. Engaging in a power structure with trade unions.

Management’s role in determining the status of IR system is quite crucial.

iv. Government:

The role of the government has been changing from time to time in the matter
of IR. Till 19th century, the governments throughout the world adopted a
policy of laissez faire and left the IR matters to be settled by the employers and
employees. However, with the increasing conflicts between them even on tiny
matters, the governments’ attitudes changed to some kind of intervention in IR
matters towards the end of 19th century. In the present context, everywhere,
governments intervene in the HR system in different ways. In India,
government has prescribed various laws dealing with employer-employee
relations and set machinery for resolving conflicts — labor courts, tribunals at
state and national levels. These courts and tribunals intervene in the solution of
industrial disputes referred to these. While developing IR system, an
organization has to take into account the role played by the government in IR
activities.
Collective Bargaining

Industrial disputes between the employee and employer can also be settled by
discussion and negotiation between these two parties in order to arrive at a
decision. This is also commonly known as collective bargaining as both the
parties eventually agree to follow a decision that they arrive at after a lot of
negotiation and discussion.

Importance of Collective Bargaining:

(1) From Management Point of View:

The main object of the organization is to get the work done by the employees
at work at minimum cost and thus earn a high rate of profits. Maximum
utilization of workers is a must for the effective management. For this purpose
co-operation is required from the side of the employees and collective
bargaining is a device to get and promote co-operation. The labor disputes are
mostly attributable to certain direct or indirect causes and based on rumors,
and misconceptions. Collective bargaining is the best remedial measure for
maintaining the cordial relations.

(2) From Labor and Trade Union Point of View:

Labor has poor bargaining power. Individually a worker has no existence

because labor is perishable and therefore, the employers succeed in exploiting
the laborers.
The working class in united form becomes a power to protect its interests
against the exploitation of the employers through the process of collective
bargaining. The collective bargaining imposes certain restrictions upon the
employer. Unilateral action is prevented. All employees are treated on equal
footings. The conditions of employment and rates of wages as specified in the
agreement can be changed only through negotiations with labor. Employer is
not free to make and enforce decisions at his will. Collective bargaining can be
made only through the trade unions. Trade unions are the bargaining agents for
the workers. The main function of the trade unions is to protect the economic
and non- economic interests of workers through constructive programmes and
collective bargaining is one of the devices to attain that objective through
negotiations with the employers, Trade unions may negotiate with the
employer for better employment opportunities and job security through
collective bargaining.

(3) From Government Point of View:

Government is also concerned with the process of collective bargaining.

Government passes and implements several labor legislations and desires it to
be implemented in their true sense. If any person violates the rules and laws, it
enforces them by force. Collective bargaining prevents the Government from
using the force because an amicable agreement can be reached between
employer and employees for implementing the legislative provisions. Labor
problems shall be minimized through collective bargaining and industrial
peace shall be promoted in the country without any force.
 Collective bargaining is a peaceful settlement of any dispute between
worker and employers and therefore it promotes industrial peace and higher
productivity resulting an increase in the Gross National Product or the national
income of the country.

Collective Bargaining Involves:

(i) Negotiations

(ii) Drafting

(iii) Administration

(iv) Interpretation of documents written by employers, employees and the

union representatives

(v) Organizational Trade Unions with open mind.

Forms of Collective Bargaining

The working of collective bargaining assumes various forms:-

 Firstly, bargaining may be between the single employer and the single
union, this is known as single plant bargaining. This form prevails in the
United States as well as in India.
 Secondly, the bargaining may be between a single firm having several
plants and workers employed in all those plants. This form is called
multiple plants bargaining where workers bargain with the common
employer through different unions.
  Thirdly, instead of a separate union bargaining with separate employer,
all the unions belonging to the same industry bargain through their
federation with the employer’s federation of that industry. This is known
as multiple employer bargaining which is possible both at the local and
regional levels. Instances in India of this industry- wide bargaining are
found in the textile industry.

The common malady of union rivalry, small firms and existence of several
political parties has given rise to a small unit of collective bargaining. It has
produced higher labor cost, lack of appreciation, absence of sympathy and
economic inefficiency in the realm of industrial relationships. An industry-
wide bargaining can be favorable to the economic and social interests of both
the employers and employees.

Features of Collective Bargaining:

1. It is a Group Action:

Collective bargaining is a group action as opposed to individual action. Both

the parties of settlement are represented by their groups. Employer is
represented by its delegates and, on the other side; employees are represented
by their trade union.

2. It is a Continuous Process:

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

Collective bargaining is a two party process. Both the parties—employers and

employees— collectively take some action. There is no intervention of any
third party. It is mutual given-and-take rather than take-it-or-leave-it method of
arriving at the settlement of a dispute.

4. It is a Process:

Collective bargaining is a process in the sense that it consists of a number of

steps. The starting point is the presentation of charter of demands by the
workers and the last step is the reaching of an agreement, or a contract which
would serve as the basic law governing labour-management relations over a
period of time in an enterprise.

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

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

6. It is Industrial Democracy at Work:

Collective bargaining is based on the principle of industrial democracy where

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

7. It is Dynamic:

It is relatively a new concept, and is growing, expanding and changing. In the

past, it used to be emotional, turbulent and sentimental, but now it is scientific,
factual and systematic.

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

Collective bargaining is not a competitive process i.e., labor and management

do not co-opt while negotiating for the same object. It is essentially a
complementary process i.e., each party needs something which the other party
has, namely, labor can put greater productive effort and management has the
capacity to pay for that effort and to organize and guide it for achieving the
enterprise’s objectives. The behavioral scientists have made a good distinction
between “distributive bargaining” and “integrative bargaining”. The former is
the process of dividing up the cake which represents what has been produced
by the joint efforts of management and labor.

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

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

Constituents of Collective Bargaining:

There are three distinct steps in the process of collective bargaining:

1. The Creation of the Trade Agreement:

In negotiating the contract, a union and management present their demands

to each other, compromise their differences, and agree on the conditions
under which the workers are to be employed for the duration of the
contract. The coverage of collective bargaining is very uneven; in some
industries almost all the workers are under agreement, while in others only
a small portion of the employees of the firms are covered by the agreement.
The negotiating process is the part of collective bargaining more likely to
make headline news and attract public attention; wage increases are
announced, ominous predictions about price increase are reduction in
employment are made.

2. The Interpretation of the Agreement:

The administrative process is the day-to-day application of the provisions

of the contract to the work situation. At the time of writing the contract, it
is impossible to foresee all the special problems which will arise in
applying its provisions. Sometimes, it is a matter of differing
interpretations of specific clause in the contract, sometimes; it is a question
of whether the dispute is even covered by the contract. Nevertheless, each
case must somehow be settled. The spirit of the contract should not be
violated.

3. Enforcement of the Agreement:

Proper and timely enforcement of the contract is very essential for the
success of collective bargaining. If a contract is enforced in such way that it
reduces or nullifies the benefits expected by the parties, it will defeat basic
purpose of collective bargaining. It may give rise to fresh industrial
disputes. Hence, in the enforcement of the contract the spirit of the contract
should not be violated. However, new contracts may be written to meet the
problems involved in the previous contract. Furthermore, as day-to-day
problems are solved, they set precedents for handling similar problems in
future. Such precedents are almost as important as the contract in
controlling the working conditions. In short, collective bargaining is not an
on-and-off relationship that is kept in cold storage except when new
contracts are drafted.

Theories of Collective Bargaining

1. The Marketing Concept and the Agreement as a Contract:
The marketing concept views collective bargaining as a contract for the sale of
labour. It is a market or exchange relationship and is justified on the ground
that it gives assurance of voice on the part of the organised workers in the
matter of sale. The same objective rules which apply to the construction of all
commercial contracts are invoked since the union-management relationship is
concerned as a commercial one.

According to this theory, employees sell their individual labor only on terms
collectively determined on the basis of contract which has been made through
the process of collective bargaining. The uncertainty of trade cycles, the spirit
of mass production and competition for jobs make bargain a necessity. The
trade union’s collective action provided strength to the individual laborer. It
enabled him to resist the pressure of circumstances in which he was placed and
to face an unbalanced and disadvantageous situation created by the employer.
The object of trade union policy through all the maze of conflicting and
obscure regulations has been to give to each individual worker something of the
indispensability of labor as a whole. It cannot be said whether the workers
attained a bargaining equality with employers. But, collective bargaining had
given a new- relationship under which it is difficult for the employer to
dispense without facing the relatively bigger collective strength.

2. The Governmental Concept and the Agreement as Law:

The Governmental Concept views collective bargaining as a constitutional

system in industry. It is a political relationship. The union shares sovereignty
with management over the workers and, as their representative, uses that power
in their interests. The application of the agreement is governed by a weighing
of the relation of the provisions of the agreement to the needs and ethics of the
particular case. The contract is viewed as a constitution, written by the point
conference of union and management representative in the form of a
compromise or trade agreement. The agreement lays down the machinery for
making executing and interpreting the laws for the industry. The right of
initiative is circumscribed within a framework of legislation. Whenever,
management fails to conform to the agreement of constitutional requirements,
judicial machinery is provided by the grievance procedure and arbitration. This
creates a joint Industrial Government where the union share sovereignty with
management over the workers and defend their group affairs and joint
autonomy from external interference.

3. The Industrial Relations (Managerial) Concept as Jointly Decided

Directives:

The industrial relations concept views collective bargaining as a system of

industrial governance. It is a functional relationship. Group Government
substitutes the State Government. The union representative gets a hand in the
managerial role. Discussions take place in good faith and agreements are
arrived at. The union joins with company officials in reaching decisions on
matters in which both have vital interests. Thus, union representatives and the
management meet each other to arrive at a mutual agreement which they cannot
do alone. To some extent, these approaches represent stage of development of
the bargaining process itself. Early negotiations were a matter of simple
contracting for the terms of sale of labor. Developments of the latter period led
to the emergence of the Government theory. The industrial relations approach
can be traced to the Industrial Disputes Act of 1947 in our country, which
established a legal basis for union participation in the management.
Hindrance/ Problems of Collective Bargaining

(1) Competitive Process:

Collective bargaining is generally becoming a competitive process, i.e.,

labour and management compete each other at negotiation table. A situation
arises where the attainment of one party’s goal appears to be in conflict with
the basic objectives of the other party.

(2) Not Well-Equipped:

Both the parties—management and workers—come to the negotiation table

without doing their homework. Both the parties start negotiations without
being fully equipped with the information, which can easily be collected
from company’s records. To start with, there is often a kind of ritual, that of
charges and counter charges, generally initiated by the trade union
representatives. In the absence of requisite information, nothing concrete is
achieved.

(3) Time to Protest:

The immediate objective of the workers’ representatives is always some kind

of monetary or other gains, accrue when the economy is buoyant and the
employer has capacity to pay. But in a period of recession, when demand of
the product and the profits are falling, it is very difficult for the employer to
meet the demands of the workers, he might even resort to retrenchment or
even closure collective bargaining is no answer to such a situation.

(4) Where Prices are Fixed by the Government:

In industries, where the prices of products are fixed by the Government, it
becomes very difficult for the employer to meet the demands of workers
which would inevitably lead to a rise in cost of the products produced.
Whereas the supply price to the consumers cannot be increased. It will either
reduce the profits of the firm or increase the loss. In other words, it will lead
to closure of the works, which again is not in the interest of the workers.

(5) Outside Leadership:

Most of the Indian trade unions are led by outsiders who are not the
employees of the concerned organisations. Leader’s interests are not
necessarily to be identical with that of the workers. Even when his bonafides
are beyond doubt, between him and the workers he leads, there cannot be the
degree of understanding and communication as would enable him to speak
on behalf of the workers with full confidence. Briefly, in the present
situation, without strong political backing, a workers’ organisation cannot
often bargain successfully with a strong employer.

(6) Multiplicity of Trade Unions:

One great weakness of collective bargaining is the multiplicity of trade

unions. In a multiple trade union situation, even a well recognised, union
with long standing, stable and generally positive relationship with the
management, adopts a militant attitude as its deliberate strategy.

In Indian situation, inter-union rivalries are also present. Even if the unions
combine, as at times they do for the purpose of bargaining with the employer
they make conflicting demands, which actually confuse employer and the
employees.

(7) Appointment of Low-Status Executive:

One of the weaknesses of collective bargaining in India is that the

management deputes a low-status executive for bargaining with the
employees. Such executive has no authority to commit anything on behalf of
the management. It clearly indicates that the management is not at all serious
and the union leaders adopt other ways of settling disputes.

(8) Statutory Provisions:

The constraints are also imposed by the regulatory and participative

provisions as contained in the Payment of Wages Act, the Minimum Wages
Act, and Payment of Bonus Act etc. Such provisions are statutory and are not
negotiable.

(9) Fresh Demands at the Time of Fresh Agreement:

At the time when the old agreement is near expiry or well before that,
workers representatives come up with fresh demands. Such demands are
pressed even when the industry is running into loss or even during the period
of depression. If management accepts the demand of higher wages and other
benefits, it would prefer to close down the works.

(10) Agreements in Other Industrial Units:

A prosperous industrial unit in the same region may agree with the trade
unions to a substantial increase in wages and other benefits whereas a losing
industry cannot do that. There is always pressure on the losing industries to
grant wages and benefits similar to those granted in other (relatively
prosperous) units in the same region.