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Industrial Relations
Industrial Relations:
The term ‘Industrial Relations’ comprises ‘Industry’ and ‘relations’.
Industry means any productive activity in which an individual is
engaged. It includes:
(a) Primary activities like agriculture, fisheries, plantation, forestry,
horticulture, mining etc. etc. and
(b) Secondary activities like manufacturing, construction, trade,
transport, commerce, banking, communication etc.
“Industrial relation is that part of management which is concerned
with the manpower of the enterprise whether machine operator,
skilled worker or manager.”
Objectives of IR:
1. Establish and foster a sound relationship between workers and
management by safeguarding their interests.
2. Avoid industrial conflicts and strikes by developing mutuality among
the interests of concerned parties.
3. Keep, as far as possible, strikes, lockouts and gheraos at bay by
enhancing the economic status of workers.
4. Provide an opportunity to the workers to participate in the
management and decision making process.
5. Raise productivity in the organization to curb employee turnover and
absenteeism.
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6. Avoid unnecessary interference of the government, as far as possible
and practicable, in the matters of relationship between workers and
management.
7. Establish and nurse industrial democracy based on labor partnership
in the sharing of profits and of managerial decisions.
8. Socialize industrial activity by involving the government participation
as an employer.
Approaches of Industrial Relations:
Some of the important approaches to industrial relations are:-
1. Unitary Approach 2. Pluralistic Approach 3. Marxist Approach 4.
Systems Approach 5. Oxford Approach 6. Industrial Sociology Approach
7. Action Theory Approach 8. Social Action Approach 9. Human
Relations Approach 10. Gandhian Approach 11. Human Resource
Management Approach.
Approach # 1. Unitary: The unitary approach is based on the strong
argument that there is only one source of authority i.e., the
management, which owns and controls the dynamics of decision
making in issues relating to negotiation and bargaining.
It is criticized as manipulative and exploitative.
Approach # 2. Pluralistic: The pluralistic approach totally departs from
the unitary approach and assumes that the organization is composed of
individuals who form distinct groups with their own set of aims,
objectives, leadership styles, and value propositions. The organization is
multi structured and there will be continued tension due to conflicts
within and between the various sectional groups. In contrast to the
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unitary approach, the pluralistic approach considers conflict between
management and employees as rational and inevitable.
Approach # 3. Marxist: 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. However,
pluralists believe that the conflict is inevitable in all organizations.
Marxists see it as a product of capitalist society. Adversarial relations in
the workplace are simply one aspect of class conflict. The Marxist
approach, thus, focuses on the type of society in which an organization
functions.
A. Prof. John T. Dunlop – Systems Approach in “Industrial Relations
Systems” 1958: Among the contributions, the most outstanding has
been that of Harvard University. His systems treatment deserves special
mention in view of its wider applicability. His book Industrial Relations
Systems (1958) was a pioneering volume in which he presented an
analytical framework of industrial relations.
Dunlop defines an industrial relations system in the following way – An
industrial relations system at any one time in its development is
regarded as comprised of certain actors, certain contexts, an ideology,
which binds the industrial relations system together, and a body of
rules created to govern the actors at the workplace and work
community.
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● There are three sets of independent variables – the ‘actors’, the
‘contexts’ and the ‘ideology’ of the system. The actors are – (a)
hierarchy of managers and their representatives in supervision,
(b) a hierarchy of workers (non-managerial) and any spokesmen,
and (c) specialised governmental agencies (and specialised private
agencies created by the first two actors) concerned with workers,
enterprises, and their relationships. The contexts are the
environment in which the actors are interacting with each other
at various levels and the ideology is their philosophy of industrial
relations.
B. Flanders – the Oxford Approach: According to this approach, the
industrial relations system is a study of institutions of job regulations
and the stress is on the substantive and procedural rules as in Dunlop’s
model. Flanders, the exponent of this approach, considers every
business enterprise a social system of production and distribution,
which has a structured pattern of relationships. The “institution of job
regulation” is categorised by him as internal and external – the former
being an internal part of the industrial relations system such as code of
work rules, wage structure, internal procedure of joint consultation,
and grievance procedure.
C. Margerison – the Industrial Sociology Approach: G. Margerison, an
industrial sociologist, holds the view that the core of industrial relations
is the nature and development of the conflict itself. Margerison argued
that conflict is the basic concept that should form the basis of the study
of industrial relations. The author criticised the prevalent approach to
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industrial relations, which was more concerned with studying the
resolution of industrial conflict than its generation; with the
consequences of industrial disputes than on their causes.
D. Henry Sanders – the Action Theory Approach: Like the systems
model, the action theory approach takes the collective regulation of
industrial labour as its focal point. The actors operate within a
framework, which can at best be described as a coalition relationship.
The actors, it is claimed, agree in principle to cooperate in the
resolution of the conflict, their cooperation taking the form of
bargaining. Thus, the action theory analysis of industrial relations
focuses primarily on bargaining as a mechanism for the resolution of
conflicts. Whereas, the systems model of industrial relations
constitutes a more or less comprehensive approach, it is hardly possible
to speak of one uniform action theory concept.
E. Elton Mayo with Roethlisberger, Whitehead, W. F. Whyte and
Homans – the Human Relations Approach: In the words of Keith
Davies, human relations are “the integration of people into a work
situation that motivates them to work together productively,
cooperatively and with economic, psychological and social
satisfactions.” According to him, the goals of human relations are – (a)
to get people to produce, (b) to cooperate through mutuality of
interest, and (c) to gain satisfaction from their relationships. The human
relations school founded by Elton Mayo and later propagated by
Roethlisberger, Whitehead, W. F. Whyte and Homans offers a coherent
view of the nature of industrial conflict and harmony. The human
relations approach highlights certain policies and techniques to
improve employee morale, efficiency and job satisfaction.
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F. M K Gandhi – The Gandhian Approach: Gandhiji can be called one of
the greatest labour leaders of modern India. His approach to labour
problems was completely new and refreshingly human. He held definite
views regarding fixation and regulation of wages, organisation and
functions of trade unions, necessity and desirability of collective
bargaining, use and abuse of strikes, labour indiscipline, and workers
participation in management, conditions of work and living, and duties
of workers.
G. Human Resource Management Approach: The term, human
resource management (HRM) has become increasingly used in the
literature of personnel/industrial relations. The term has been applied
to a diverse range of management strategies and, indeed, sometimes
used simply as a more modern, and therefore more acceptable, term
for personnel or industrial relations management.
Industrial Disputes:
The definition of Industrial disputes is as follows – According to Section
2(k) of the Industrial Disputes Act, 1947 “industrial dispute” is defined
as, “Any disputes or differences between employers and employers, or
between employers and workmen, or between workmen and
workmen, which is connected with the employment or non-
employment or the terms of employment or with the conditions of
labour, of any person”.
An industrial dispute is defined as a conflict or a difference in opinion
between management and workers regarding employment. It is a
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disagreement between an employer and employees representative i.e.
trade union. The issue of disagreement is usually pay or other working
conditions.
Causes of Industrial Disputes:
We can classify the causes of industrial disputes into two broad
groups:
(i) Economic causes, and
(ii) Non-economic causes.
Economic causes include:
(i) Wages,
(ii) Bonus,
(iii) Dearness allowance,
(iv) Conditions of work and employment,
(v) Working hours,
(vi) Leave and holidays with pay, and
(vii) Unjust dismissals or retrenchments.
Non-economic causes include:
(i) Recognition of trade unions,
(ii) Victimization of workers,
(iii) Ill-treatment by supervisory staff,
(iv) Sympathetic strikes,
(v) Political causes, etc.
Forms of Industrial Disputes:
1. Strike:
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Strike is a very powerful weapon used by a trade union to get its
demands accepted. It means quitting work by a group of workers for
the purpose of bringing pressure on their employer to accept their
demands.
Types of strikes:
(i) Economic Strike:
Under this type of strike, members of the trade union stop work to
enforce their economic demands such as wages, bonus, and other
conditions of work.
(ii) Sympathetic Strike:
The members of a union collectively stop work to support or express
their sympathy with the members of other unions who are on strike in
the other undertakings.
(iii) General Strike:
It means a strike by members of all or most of the unions in a region or
an industry. It may be a strike of all the workers in a particular region of
industry to force demands common to all the workers. It may also be an
extension of the sympathetic strike to express general protest by the
workers.
(iv) Sit Down Strike:
When workers do not leave their place of work, but stop work, they are
said to be on sit down or stay in strike. It is also known as tools down or
pen down strike. The workers remain at their work-place and also keep
their control over the work facilities.
(v) Slow Down Strike:
Employees remain on their jobs under this type of strike. They do not
stop work, but restrict the rate of output in an organised manner. They
adopt go- slow tactics to put pressure on the employers.
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(VI) Wild Cat Strike:
A wildcat strike action, often referred to as a wildcat strike, is a strike
action undertaken by unionized workers without union leadership's
authorization, support, or approval; this is sometimes termed an
unofficial industrial action.
2. Lock-out:
Lock-out is declared by the employers to put pressure on their workers.
It is an act on the part of the employers to close down the place of work
until the workers agree to resume the work on the terms and
conditions specified by the employers.
3. Gherao:
It is a Hindi word which means to surround. The term ‘Gherao’ denotes
a collective action initiated by a group of workers under which
members of the management of an industrial establishment are
prohibited from leaving the business or residential premises by the
workers who block their exit through human barricades.
4. Picketing:
When workers are dissuaded from reporting for work by stationing
certain men at the factory gates, such a step is known as picketing. If
picketing does not involve any violence, it is perfectly legal. It is
basically a method of drawing the attention of the public towards the
fact there is a dispute between the management and the workers.
Grievance
Grievance refers to the employee's dissatisfaction with the company's
work policy and conditions because of an alleged violation of law. They
may or may not be justified and usually represent the gap between
what the employee expects and gets from the company.
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Grievance has to be properly addressed because it lowers the
motivation and performance of the employee and affects the work
environment.
Types of Grievances
1) Individual Grievances
When an individual employee grieves against a management action like
demotion based on bias, non payment of salary, workplace harassment
etc.
2) Group Grievances
This type of grievance is when a team or a group collectively grieves
against the management for example when none of the team members
receive the promised overtime bonus as mentioned in the policy.
3) Union Grievances
This is rare, especially in a corporate setup where unions don't often
exist. But in this type of a grievance, the entire union complains against
the management generally over contract misinterpretation.
Trade Union & Collective Bargaining
Trade Union
A trade union is an organisation formed to protect the rights and
interests of the members it represents (employees in a particular
industry). A trade union can: Be an important source of information for
employees. Provide employees with protection on employment
matters.
Labour unions or trade unions are organizations formed by workers
from related fields that work for the common interest of its members.
They help workers with issues like fairness of pay, good working
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environment, hours of work and benefits. They represent a cluster of
workers and provide a link between the management and workers.
The Indian Trade Union Act, 1926, is the principle act which controls
and regulates the mechanism of trade unions.
A registered trade union of workmen has a minimum of 7 persons,
engaged and employed in an industry.
Types of Trade Union:
1. Craft Union:
The workers belonging to the same craft, specialized skill or same
occupation can form their trade union irrespective of industry or trade
they are employed.
2. Industrial Union:
The workers on the basis of industry can form unions irrespective of
their craft.
3. General Union:
This type is open to all members irrespective of their craft and industry
within a particular city or region.
4. Labour Unions:
In these unions, membership is open to all workers irrespective of their
occupation, skill or industry, the philosophy being that all workers have
common status and a common need for mutual help.
5. Blue-Collar Workers’ Unions:
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Blue-collar workers’ unions consist of employees usually performing
operative jobs. They usually operate machines in the production and
allied departments. Blue-collar workers constitute the bulk of
membership of trade unions in the organised sector.
6. White-Collar Workers’ Unions:
Such unions usually comprise office staff or who work off the shop floor
and perform desk jobs or provide service over the counter or any such
other job. White-collar category includes executives, managers,
professionals, administrators, supervisors, clerks and the like.
Settlement of Industrial Disputes:
The methods used for preventing and settling industrial disputes are:
1. Collective bargaining
2. Mediation,
3. Conciliation and
4. Arbitration.
1. Collective Bargaining:
The phrase Collective Bargaining was coined by “Sidney & Beatrice
Webb” in their famous treatise “History of Trade Unions”.
“Collective Bargaining” is the process of negotiating terms of
employment and other conditions of work between the representatives
of management and organised labour. When it is free of intimidation
and coercion and is conducted in good faith, collective bargaining
culminates in a workable contract i.e., labour contract.
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A labour contract is a collective agreement between the
representatives of labour and management for the sale of labour
services at designated wage rates, hours of work, and other terms of
employment and conditions of work for a stated period of time.
1. Conjunctive or Distributive Bargaining: In this form of collective
bargaining, both the parties viz. The employee and the employer
try to maximize their respective gains. It is based on the principle,
“my gain is your loss, and your gain is my loss” i.e. one party wins
over the other.
The economic issues such as wages, bonus, and other benefits are
discussed, where the employee wishes to have an increased wage or
bonus for his work done, whereas the employer wishes to increase the
workload and reduce the wages.
2. Co-operative or Integrative Bargaining: Both the employee and
the employer sit together and try to resolve the problems of their
common interest and reach to an amicable solution. In the case of
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an economic crisis, such as recession, which is beyond the control
of either party, they may enter into a mutual agreement with
respect to the working terms.
For example, the workers may agree for the low wages or the
management may agree to adopt the modernized methods, so as to
have an increased production.
3. Productivity Bargaining: This type of bargaining is done by the
management, where the workers are given the incentives or the
bonus for the increased productivity. The workers get encouraged
and work very hard to reach beyond the standard level of
productivity to gain the additional benefits.
Through this form of collective bargaining, both the employer and the
employee enjoy the benefits in the form of increased production and
the increased pay respectively.
4. Composite Bargaining: In this type of collective bargaining, along
with the demand for increased wages the workers also express
their concern over the working conditions, recruitment and
training policies, environmental issues, mergers and
amalgamations with other firms, pricing policies, etc. with the
intention to safeguard their interest and protect the dilution of
their powers.
2. Mediation:
Mediation is an attempt to settle disputes with the help of an outsider
who attempts to stimulate labour and management to reach some type
of agreement. The mediator, unlike an arbitrator, cannot decide the
issue. He listens, suggests, communicates and persuades. He does not
give any award.
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3. Conciliation:
Conciliation is merely the bringing together by a third party the two
parties in disputes.
4. Arbitration:
Arbitration is resorted to by the parties failing to arrive at a settlement
by voluntary method. The parties to the dispute may then appoint an
arbitrator and refer the dispute to him. The arbitration award is binding
upon the parties who referred the dispute to arbitration. Arbitration
can be either voluntary or compulsory.
Arbitration provides justice at the minimum cost. An industrial dispute
may be referred to an arbitrator by a written agreement entered into
by employer and employees at any time before referring the dispute to
a labour court or industrial tribunal or national tribunal.
Employee Welfare Benefits Schemes in India:
Some of the employee welfare Laws in India
▪ The Factories Act, 1948
▪ Industrial Disputes Act, 1947
▪ The Payment of Wages Act,1936
▪ The Minimum Wages Act, 1948
▪ The Mines Act, 1952
▪ The Maternity Benefit Act,1961
▪ The Employee State Insurance Act, [ESI] 1948
▪ THE EMPLOYEES’ PROVIDENT FUNDS AND MISCELLANEOUS
PROVISIONS ACT, 1952
▪ The Payment of Bonus Act, 1965
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