Industrial Relations

1
 Introduction

Industrial relation means the relationship between employers and

employees in course of employment in industrial organizations.
•Industrial relation is used to denote the collective relationships
between management and the worker.
• IR is used to cover such aspects of industrial life as trade
unionism, collective bargaining, workers participation in
management , discipline and industrial disputes.
•Definition: According to J.T. Dunlop, “Industrial relations are
the complex interrelations among managers, workers and
agencies of the government”
 Nature of IR

•IR is concerned with the relationship between management

and workers and the role of regulatory mechanism in
resolving any industrial dispute.
• Under the IR participative management, employee
development, employee remuneration, employee safety and
health.
 Features of Industrial Relations
• Industrial relations are outcomes of employment
relationships in an industrial enterprise. These relations
cannot exist without the two parties namely employers
and employees.
• Industrial relations system creates rules and
regulations to maintain harmonious relations.
• The government intervenes to shape the industrial
relations through laws, rules, agreements, terms etc.
•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.
•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.
•Industrial relations include both individual relations and collective
relationships.
 Objectives of Industrial Relations:
•To maintain industrial democracy based on participation of labour
in the management and gains of industry.
•To raise productivity by reducing tendency of high labour turnover and absenteeism.
•To ensure workers’ participation in management of the company by giving them a fair
say in decision-making and framing policies.
•To establish a proper channel of communication.
•To increase the morale and discipline of the employees.
•To safeguard the interests of the labour as well as management by
securing the highest level of mutual understanding and goodwill
between all sections in an industry.
•To avoid all forms of industrial conflicts so as to ensure industrial
peace by providing better living and working standards for the
workers.
 Importance of Industrial Relations

• Uninterrupted Production: The most important benefit of industrial

benefits is that it ensures continuity of production. This means continuous
employment for all involved right from managers to workers.
• Reduction in Industrial disputes: Good Industrial relations reduce
Industrial disputes. Strikes, grievances and lockouts are some of the
reflections of Industrial unrest. Industrial peace helps in promoting co-
operation and increasing production.
• High morale: Good Industrial relations improve the
morale of the employees and motivate the workers to work more and better.
• Reduced wastage: Good Industrial relations are maintained on the basis
of co-operation and recognition of each other. It helps to reduce wastage of
material, manpower and costs.
• Contributes to economic growth and development.
 Causes of poor Industrial Relations:
•Economic causes: Often poor wages and poor working conditions are the main
causes for unhealthy relations between management and labour. Unauthorised
deductions from wages, lack of fringe benefits, absence of promotion opportunities,
faulty incentive schemes are other economic causes. Other causes for Industrial
conflicts are inadequate infrastructure, worn-out plant and machinery, poor layout,
unsatisfactory maintenance etc.
•Organisational causes: Faulty communications system, unfair practices, non-
recognition of trade unions and labour laws are also some other causes of poor relations
in industry.
•Social causes: Uninteresting nature of work is the main social cause of poor
Industrial relations. Dissatisfaction with job and personal life culminates into Industrial
conflicts.
•Psychological causes: Lack of job security, nonrecognition of merit and
performance, poor
interpersonal relations are the psychological reasons for unsatisfactory employer-
employee relations.
•Political causes: Multiple unions, inter-union rivalry weaken the trade unions.
Defective trade unions system prevailing in the country has been one of the most
responsible causes for Industrial disputes in the country
 Suggestions to improve Industrial Relations
•Sound personnel policies: Policies and procedures concerning the compensation, transfer and
promotion, etc. of employees should be fair and transparent. All policies and rules relating to
Industrial relations should be fair and transparent to everybody in the enterprise and to the union
leaders.
•Participative management: Employees should associate workers and unions in the
formulation and implementation of HR policies and practices.
•Responsible unions: A strong trade union is an asset to the employer. Trade unions should
adopt a responsible rather than political approach to industrial relations.
•Employee welfare: Employers should recognise the need for the welfare of workers. They
must ensure reasonable wages, satisfactory working conditions, and other necessary facilities for
labour. Management should have a genuine concern for the welfare and betterment of the
working class.
•Grievance procedure: A well-established and properly administered system committed to the
timely and satisfactory redressal of employee’s grievances can be very helpful in improving
Industrial relations. A suggestion scheme will help to satisfy the creative urge of the workers.
•Constructive attitude: Both management and trade unions should adopt positive attitude
towards each other. Management must recognise unions as the spokesmen of the workers’
grievances and as custodians of their interests. The employer should accept workers as equal
partners in a joint endeavor.
•Creating a proper communication channel to avoid grievances and misunderstandings
among Employees.
•Education and training imparted to the employees.
 Parties to IR
• Employee

• Employer

• State
 Approaches/Theories of IR

UNITARY APPROACH
•UNITARY APPROACH is grounded in mutual cooperation, individual
treatment, team work and shared goals.
•Work place conflict is seen as temporary aberration, resulting from poor
management Employees who do not mix well with organization culture,
Unions cooperate with the management.
•Management’s right to manage is accepted because there is no ‘we
they” feeling Underlying assumption is that everyone benefits when the
focus is on common interest and promotion of harmony Based on
reactive strategy.
 PLURALISM(CONFLICT APPROACH )
• PLURALISM(CONFLICT APPROACH )Pluralism is belief in the
existence of more than one ruling principle, giving rise to a conflict of
interests.
• The pluralist approach to IR accepts conflict between management
and workers as inevitable but containable through various institutional
arrangements ( like collective bargaining, conciliation and arbitration
etc) and is in fact considered essential for innovation and growth.
• It perceives organizations as coalitions of competing interests , where
the management’s role is to mediate among the different interest
groups.
• It perceives trade unions as legitimate representative of employee
interests It also perceives stability in IR as the product of concessions
and compromises between management and unions.
 MARXIST APPROACH
• MARXIST APPROACH Marxists like pluralists also regard conflict
as
inevitable but see it as a product of capitalistic society where as
pluralist believe that the conflict is inevitable in all organizations
• For Marxists IR has wider meaning. For them conflict arises not
because of rift between management and workers but because of the
division in the society between those who own resources and those who
have only labor to offer.
• Marxist approach thus focuses on the type of society in which an
organization functions.
• Industrial conflict is thus equated with political and social unrest
Trade Unions are seen both as labor reaction to exploitation by
capitalists, as- well-as a weapon to bring about a revolutionary social
change.
 THE SYSTEM APPROACH
• The system approach was developed by J. P. Dunlop of Harvard
University in 1958.
• According to this approach, individuals are part of an ongoing but
independent social system.
• The behaviour, actions and role of the individuals are shaped by the
cultures of the society.
•The three elements of the system approach are input, process and
output. Society provides the cue (signal) to the individuals about how
one should act in a situation.
• The institutions, the value system and other characteristics of the
society influence the process and determine the outcome or response
of the individuals. The basis of this theory is that group cohesiveness
is provided by the common ideology shaped by the societal factors.
 Labour Legislation in India
All the labour legislation so far enacted in India can be classified under four categories:
Laws on Working Conditions
• Factories Act, 1948
• Shops and Establishments Act
• Mines Act, 1952
• Plantation Labour Act, 1951
• Indian Merchants Shipping Act.
Laws on Wages
• Minimum Wages Act, 1948
• Payment of Wages Act, 1936
• Payment of Bonus Act, 1965
• Equal Remuneration Act.
Laws on Industrial Relations
• Industrial Disputes Act, 1947
• Indian Trade Union Act, 1926
• Industrial Employment (Standing Orders) Act, 1946
Laws on Social Security
• Workers Compensation Act, 1923
• Maternity Benefit Act, 1961
• Employees Provident Fund Act, 1952
• Payment of Gratuity Act, 1972
• Employees' State Insurance Act, 1948
Thank You