EMPLOYEE RELATIONS AND

LABOR LAWS
KMBN HR 02
Course Objectives:
1. To Provide conceptual framework of Industrial
Relation
2. 2. To make students aware with the Indian Labor
legislation
3. 3. To make students aware with the basic
requirements and mandate of labor legislations
4. 4. To help the students to understand the existing
framework of Industrial Relation and Labor
legislation.
 UNIT 1
• Employee Relations Management (ERM) & Industrial
Relation:
• Introduction: Employee relationship management
refers to managing the relation between the various
employees in an organization. The relationship can be
between employee and the employer as well as
between employees at the same level.
• Let us go through certain activities which are imperative
for a healthy employee relationship management:
• 1. Transparency in communication is of utmost
importance for a healthy employee relationship
Management.
 Importance of Employee Relations
• 2. Encourage group activities at the workplace.
• 3. Assign challenging work to your team
members so that they feel motivated to deliver
their level best.
• 4. The employees must be motivated to avoid
politics and blame games at work.
• 5. Last but not the least the superiors or the
team leaders must not act pricy and try to
dominate their team members.
• 6. Partialities must be avoided for a better
employee relationship.
 What are the 4 methods for managing
employee relations?
• The Four Pillars of Employee Relations
• Open Communication. Just as it is in any form
of interrelation, communication is critical. ...
• Show Recognition. Do you know that a simple
“Thank you” can go a long way in affecting how
someone's day goes? ...
• Constant Feedback. ...
• Invest in your Employees.
 Why is employee relations important?

• Employee relations are important

because they form the foundation of trust
between an organization and its
employees. When workers feel respected
by their supervisors for their contributions
to the organization's success, they tend to
reciprocate this respect with hard work
and loyalty towards the company
 EMPLOYEE RELATION TOOLS
• Employee Opinion Surveys
• One of the most valuable tools for employee relations
specialists is an employee opinion survey. These surveys
have two functions: They measure the workplace climate
in terms of employee satisfaction and they serve as a tool
to create action plans for managers in modifying work
conditions to improve overall job satisfaction. Questions
examine employee opinion in specific areas such as
compensation and benefits; general employee opinion
survey questions ask for feedback from employees on a
variety of workplace issues, such as leadership,
performance, pay and overall work attitudes.
• Training Aids
• Supervisors and managers frequently consult
employee relations specialists for advice on how to
determine when to administer employee discipline or
when to consider termination. Before effecting
decisions concerning the employment relationship,
leadership training may be in order. The benefits of
leadership training are improved relationships
between supervisors and their employees as well as
more effective workforce management skills. When
employee relations specialists are called on to help
improve supervisor and manager performance, they
general use one-on-one guidance based on their
expertise supplemented by materials such as tapes and
books.
• Legal Resources
• Employee relations specialists keep current on labor and
employment laws, as well as legislation that can
potentially affect the work environment. Therefore, legal
resources available for researching labor and employment
laws are an oft-used employee relations tool. Legal
resources include subscription-based services as well as
publicly available resources such as legislative summaries
and news feeds. In addition, knowledge of labor and
employment laws permits employee relations specialists
to perform the basic duty for which they are hired: protect
the interests of the employer while maintaining a
productive employer-employee relationship. Although
legal counsel is another resource for employee relations
specialists, too-frequent dependence on legal counsel can
drive up employer costs.
• Human Resource Information Systems
• Human resources information systems are tools
employee relations specialists use regularly.
HRIS generate employee census reports and
assist employee relations specialists in analyzing
workforce trends, compensation structure, pay
practices and recruitment and selection
processes. Annual reports to federal agencies
such as the U.S. Equal Employment Opportunity
Commission, the U.S. Department of Labor and
the Occupational Safety and Health
Administration are based on data compiled and
stored via complex HRIS.
• Departmental Expertise
• Employee relations specialists are usually
human resources generalists with a broad
knowledge base. Nevertheless, despite their
exceptionally broad understanding of topics
such as compensation, safety, recruitment and
employee development, they rely heavily on the
expertise of HR department employees who
handle employee issues in these areas day in
and day out. An employee relations tool,
therefore, is the expertise of colleagues who
lend additional expertise and knowledge
whenever required.
APPROACHES TO INDUSTRIAL
RELATIONS
• The three popular approaches to industrial relations are
the unitary approach, pluralistic approach and marxist approach.
These approaches to industrial relations at a primary level are
analytical categorizations and not theories having predictive
values.

• 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.
Under unitary approach, industrial relations are grounded in
mutual cooperation, individual treatment, team-work, and
shared goals. Work place conflict is seen as a temporary
aberration, resulting from poor management, from employees
who do not mix well with the organizational culture. Unions co-
operate with the management and the management’s right to
manage is accepted because there is no ‘we-they’ feeling.
• 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 unitary approach, the pluralistic approach
considers conflict between management and employees as
rational and inevitable. The pluralistic approach perceives: i.
Organizations as coalitions of competing interests, where
the role of the management is to mediate amongst the
different interest groups. ii. Trade unions as legitimate
representatives of employee interests. iii. Stability in
industrial relations as the product of concessions and
compromises between management and unions.
• Legitimacy of the management’s authority is not
automatically accepted. Conflict between the management
and workers is understood as inevitable and, in fact, is viewed
as conducive for innovation and growth. Employees join
unions to protect their interests and influence decision-making
by the management.
• 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 the capitalist society.
Adversarial relations in the workplace are simple one aspect
of class conflict. The Marxist approach, thus, focuses on the
type of society in which an organization functions.
• Psychological approach
• The problems of IR have their origin in the perceptions
of the management, unions and the workers. The
conflicts between labour and management occur
because every group negatively perceives the behaviour
of the other i.e. even the honest intention of the other
party so looked at with suspicion. The problem is
further aggravated by various factors like the income,
level of education, communication, values, beliefs,
customs, goals of persons and groups, prestige, power,
status, recognition, security etc are host factors both
economic and non-economic which influence
perceptions unions and management towards each other.
Industrial peace is a result mainly of proper attitudes
and perception of the two parties.
• Sociological approach
• Industry is a social world in miniature. The management
goals, workers’ attitudes, perception of change in industry,
are all, in turn, decided by broad social factors like the
culture of the institutions, customs, structural changes,
status-symbols, rationality, acceptance or resistance to
change, tolerance etc. Industry is, thus inseparable from the
society in which it functions. Through the main function of
an industry is economic, its social consequences are also
important such as urbanization, social mobility, housing and
transport problem in industrial areas, disintegration of
family structure, stress and strain, etc. As industries develop,
a new industrial-cum-social pattern emerges, which provides
general new relationships, institutions and behavioural
pattern and new techniques of handling human resources.
These do influence the development of industrial relations.
• Human relations approach
• Human resources are made up of living human
beings. They want freedom of speech, of thought
of expression, of movement, etc. When
employers treat them as inanimate objects,
encroach on their expectations, throat-cuts,
conflicts and tensions arise. In fact major
problems in industrial relations arise out of a
tension which is created because of the
employer’s pressures and workers’ reactions,
protests and resistance to these pressures through
protective mechanisms in the form of workers’
organization, associations and trade unions.
• 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.
• Gandhian approach
• Gandhian approach to employer-employee relations
is based on the fundamental principles of truth, non-
violence and non-possession. If the employers
follow the principle of trusteeship, there is no scope
for conflict of interests between them and labour.
• Workers can use non-cooperation (Satyagraha) to
have their grievances redressed. Gandhiji accepted
the workers’ right to go on strike but they should
exercise this right in a peaceful and non-violent
manner. Workers should resort to strike for just
cause and after the employers fail to respond to
their moral appeals.
The Trends of Industrial Relations in India

• What are the trends of industrial relations in

India?
• In the private sectors particularly in service and
software sector, the new, young, and female
workers are generally less eager to join unions.
Not because of improved IR but because of the
fear of job security, concern about the futility
of strikes, and concern to survive their
organization for their income survival.
• Artificial Intelligence (AI) for Routine Tasks
• People have worried for decades that technological
advances would make their jobs obsolete. In many
cases, they have, and will continue to do so. At first, it
was personal computers that replaced typing pools and
freed up secretaries to do more advanced work such as
preparing presentations with programs like PowerPoint
(PPT). Self-service checkout lanes replaced clerks in
supermarkets and big box stores. In environments that
use and analyze data, such as IR human resources,
artificial intelligence (AI) will be able to handle routine
tasks like computing and compiling data. Human
resource personnel will then be able to spend more
time analyzing the data, noting trends and focusing
more on employee relations issues.
• Strong Sexual Harassment Policies
• The "Me Too" movement of 2017 brought sexual
harassment in work environments into the open. Although
many of the instances that made the news actually happened
years ago, they cost many people their jobs and tarnished
company reputations. One of the consequences is that now
businesses want to be absolutely sure they don't foster an
environment that allows harassment in any form. Therefore,
businesses will continue to strengthen and clarify their
sexual harassment policies, publish them in the company
handbook and make sure their employees know that
harassment won't be tolerated. Small and medium-sized
businesses have an advantage over large corporations,
because with a smaller staff, you can ensure that everyone is
trained in the sexual harassment policy and can better
monitor relationships between employees.
• The Changing Workforce
• The large group of baby boomers, born between the
mid-1940s and the mid-1960s, will continue to
retire over the next several years. Meanwhile, so-
called Gen-Xers, born between 1965 and 1980, are
becoming the CEOs and other top management,
while the millennials, born between 1981 and 1995,
are moving into management and will continue to
do so over the next 10 to 15 years. So much has
been said of millennials that the unfortunate group
following them doesn't get its own distinction, but
are instead just called "post-millennials." At around
22, the oldest of this group are just entering the
professional workforce.
• Salary Parity as a Goal
• Younger workers are pushing harder for equal pay
between men and women doing the same jobs. The
unfairness of women routinely being paid less than
men across all professions has been discussed for
generations. The difference is that men are now
advocating for their female co-workers by, in many
cases, sharing salary information with one another
so there is no doubt as to who earns what.
Employers can no longer require secrecy about
salaries. Instead of fighting this trend, you can be
one of the heroes by stepping up and making it
known that you are truly paying equally for the
same jobs.
 Factors Leading the Present State of
Industrial Relations
• labor market relative status, disparity of wages between
groups, level of unemployment, economic cycle. These
variables influence industrial relations in myriad ways.
The industrial relations system of an organization is
influenced by a variety of factors.
• They are:-- 1. Institutional factors 2. Economic factors 3.
Social factors 4. Technological factors 5. Psychological
factors 6. Political factors 7. Enterprise-related factors 8.
Global factors These interrelated and interdependent
factors determine the texture of industrial relations in any
setting. In fact, they act, interact, and reinforce one another
in the course of developing the industrial relations.
• 1. Institutional Factors: Under institutional factors are
included items like state policy, labor laws, voluntary
codes, collective bargaining agreements, labor unions,
employers’ organizations / federations etc.
• 2. Economic Factors: Under economic factors are
included economic organizations, (socialist,
communist, capitalist) type of ownership, individual,
company — whether domestic or MNC, Government,
cooperative ownership) nature and composition of the
workforce, the source of labor supply, labor market
relative status, disparity of wages between groups,
level of unemployment, economic cycle. These
variables influence industrial relations in myriad
ways.
• 3. Social Factors: Under social factors items like social
group (like caste or joint family) creed, social values,
norms, social status (high or low) — influenced industrial
relations in the early stages of industrialization. They
gave rise to relationship as master and servant, haves and
have-nots, high caste and low caste, etc. But with the
acceleration of industrialization, these factors gradually
lost their force but one cannot overlook their importance.
• 4. Technological Factors: Under technological factors fall
items like work methods, type of technology used, rate of
technological change, R&D activities, ability to cope
with emerging trends, etc. These factors considerably
influence the patterns of industrial relations, as they are
known to have direct influence on employment status,
wage level, collective bargaining process in an
organization.
• 5. Psychological Factors: Under psychological factors fall
items pertaining to industrial relations like owners’ attitude,
perception of workforce, workers’ attitude towards work, their
motivation, morale, interest, alienation; dissatisfaction and
boredom resulting from man-machine interface. The various
psychological problems resulting from work have a far-
reaching impact on workers’ job and personal life, that directly
or indirectly influences industrial relation system of an
enterprise.
• 6. Political Factors: The political factors are political
institutions, system of government, political philosophy,
attitude of government, ruling elite and opposition towards
labor problems. For instance, the various communist countries
prior to the adoption of new political philosophy, the industrial
relations environment was very much controlled by the
Government ever since change has altered considerably like
other capitalist economics.
• 7. Enterprise-Related Factors: Under enterprise-
related factors, fall issues like style of
management prevailing in the enterprise, its
philosophy and value system, organizational
climate, organizational health, extent of
competition, adaptability to change and the
various human resources management policies. 8.
Global Factors: Under global factors, the various
issues included are international relations, global
conflicts, dominant economic-political ideologies,
global cultural milieu, economic and trading
policies of power blocks, international trade
agreements and relations, international labor
agreements (role of ILO) etc.
 Impact of Globalization on the Liberalized
Economy
• Globalization refers to the integration of the
economy of a country with the economies of
other countries. The process of globalization is
associated with the free flow of trade, capital
across borders, increasing openness, growing
economic independence, and deepening of
economic integration in the world
 Emerging challenges of IR in India,
• Various contemporary emerging challenges in industrial
relations are as follows:-1) Changing face of the
organizations :-in the past organization have focused on
growing bigger and better. Today, increasing
international competition and the rapid pace
of technicnological change are favoring organizations to
become lean, faster and flexible. In fact, most
organization's are downsizing, decoupling, and
disaggregating.
• CHANGING PROFILES AND CHARACTERISTICSOF
EMPLOYEES :-The colour of the collar of
the worker in the organizedsector is changing.
New technologies have in several cases,reduced
the difference between blue and white-
collarworkers. The proportion of white- collar
employees isincreasing among the full- time
regular employees in theorganized sector. Thus,
today, in the organised sector, thereare less
of working class workers. Alongside the change
inthe profile of the workforce, there is also
a change andescalation in the aspirations of the
employees
• 3) Increased Complexity and Diversity:-Labour in
theconcurrent list of the distribution of powers
between theunion and states of india with both the
central and stategovernment having power to
legislate on certain smil mattersconcerning
industrial relations. With a poltical andideological
affiliations of the part in power at the central
andthe state level being varied, it may be difficult to
have asingle unified model of industrial relations.
With a generalweakening of the tripartite system
it be become difficult toachieve any consensus a
uniform patterns of industrialrelations policy.
• 4) CHANGES IN INDUSTRIAL RELATIONS
POLICY:-The emerging industrial relations
scenario is complex. Theexisting regional and
social imbalances are beingexacerbated in the
wake of the reaching economic
changesushered into the economy without
much consultation withthe concerned social
partners. Some states are waking up tothe
need for wooing investment, foreign and
domestic, anddomestic, and creating jobs
 Linking Industrial Relations with economic
growth of a country,
• Industrialisation plays an important role in the
promotion of trade. The advanced nations
gain in trade than countries who are
industrially backward. The underdeveloped
countries export primary products and import
industrial products. Agricultural products
command lower prices and their demand is
generally elastic.
• The following points explain the role of industrial
development in economic growth:
• 1. Modernisation of Industry:
• Industrial development is necessary for modernisation of
agriculture. In India, agriculture is traditional and
backward. The cost of production is high and productivity
is low. We need tractors, threshers, pump sets and
harvesters to modernise agriculture. To increase
productivity, we need chemical fertilizers, pesticides and
weedicides etc. These are all industrial products. Without
industrial development, these goods cannot be produced.
Agricultural products like jute, cotton, sugarcane etc. are
raw materials. To prepare finished products like flex,
textiles and sugar etc. we need industrialisation. So
industrial development is necessary for modernisation of
agriculture.
• 2. Development of Science and Technology:
• Industrial development encourages the development of
science and technology. The industrial enterprises conduct
research and develop new products. Ethanol in the form of
biofuel is an example of industrial development. Industry
conducts research on its wastes and develops byproducts like
biodiesel from Jatropha seeds. Due to industrialisation, we
have made progress in atomic science, satellite
communication and missiles etc.
• 3. Capital Formation:
• Acute deficiency of capital is the main problem of Indian
economy. In agricultural sector, the surplus is small. Its
mobilisation is also very difficult. In large scale industries, the
surplus is very high. By using external and internal
economies, industry can get higher profit. These profits can
be reinvested for expansion and development. So
industrialisation helps in capital formation.
• 4. Industrialisation and Urbanisation:Urbanisation
succeeds industrialisation. Industrialisation in a particular
region brings growth of transport and communication.
Schools, colleges, technical institutions, banking and health
facilities are established near industrial base. Rourkela was
dense forest but now is ultra modern town in Orissa. Many
ancillary units have been established after setting up of big
industry.
• 5. Self-reliance in Defence Production:
• To achieve self-reliance in defence production,
industrialisation is necessary. During war and emergency
dependence on foreign countries for war weapons may
prove fatal. Self-reliance in capital goods and industrial
infra-structure is also necessary. Atomic explosion at
Pokhran (Rajasthan) and Agni Missile are examples of
industrial growth.
• 7. Use of Natural Resources:
• It is a common saying that India is a rich country inhabited by the
poor. It implies that India is rich in natural resources but due to lack
of capital and technology, these resources have not been tapped.
Resources should be properly utilized to transform them into
finished industrial products. The British people took India’s cheap
raw-materials for producing industrial goods in their country. India
was used as a market for their industrial products. So India fought
with poverty and England gained during industrial revolution. Hence
industrialisation plays important role for proper utilisation of
resources.
• 8. Alleviation of Poverty and Unemployment:
• Poverty and unemployment can be eradicated quickly through rapid
industrialisation. It has occurred in industrially advanced countries
like Japan. The slow growth of industrial sector is responsible for
widespread poverty and mass unemployment. So with fast growth
of industrial sector, surplus labour from villages can be put into use
in industry.
• Trade union in industrial relations:
• 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. Most trade
unions are independent of any employer.
• Trade Union Definition
• A trade union meaning defines an association of the
workers related to the same trade, organization, or
industry to protect their rights, improve working
conditions, wage revisions, and communicate with
management in one voice. It aims to give bargaining
power to the workers vis-a-vis management of the
firms or the government in their favor.
• What is the need for a Trade union?Engaging in
collective agreements with the administration
ensures that workers and employees have
improved working conditions.Providing workers
with protection and monitoring employee hiring
and firing.Assisting management in the proper
level of worker grievance remedies.Referring a
disagreement or issue to arbitration if it is not
resolved.Discuss management issues, including
working hours, extra compensation, pay, and
access to healthcare and other social
programmes.To foster collaboration with
employers.To stir up support for labour and
workers in the general public.
• Functions of Trade Union
• The trade union roles are related to main types related to their members, organization
of union, union activities, and contribution to society.
• 1. Members
• Safeguard the workers’ rights and privileges from management encroachment.
• Ensure a healthy and sound working environment.
• Fight for the performance-linked bonus for workers.
• Negotiate for insurance, housing, healthcare, education, and cooperative societies for
the workers from the management.
• To help workers financially in times of emergency through union funds and
management corpus.
• 2. Organization
• To improve the production and worker efficiency as per the requirement of the firm
through discussions with the management.
• To act as a bridge between the worker and the management for all types of
communication.
• To convince management to act as a motivator and not as punitive toward workers.
• To guide management in formulating and implementing employees’ welfare schemes
and activities.
• Impress the management with pressure tactics to avoid illegal termination and
punishment, and treat every worker justly.
• To conduct elections for various posts of the union.
• 3. Union Activities
• To maintain records of all the worker members of the union
• To organize various events to promote unity amongst
members
• Act as a mediator between the aggrieved worker and the
member superior.
• To collect funds for strengthening the union.
• To bring a culture of leadership amongst the members
• To help new members of the organization and the union to
settle down easily.
• 4. Society
• To undertake social upliftment works for the poor like free
books, rations, and scholarships to needy students.
• To raise voices against anti-social policies of the government
and management of the related sector by the trade unionist.
• To be a role model for society in terms of social work.
• Types Of Trade Union
• # 1 – Craft-Based Union
• Daily wage earners of different occupations form this union to safeguard
their interests, bring uniformity, hike their labor charges, and stand united
against exploitation by businesses or individuals. Making a labor union
gives them immense bargaining power and strength of unity in the eyes of
society, businesses, and individuals like all the people who are engaged in
the profession of plumbing come together and form a plumber’s union or
electrical trade union. However, the union is weak and cannot fulfill trade
union objectives more often than not.
• # 2 – Industrial Union
• This type of union is formed by manual labor, semi-skilled labor, and
skilled and highly skilled workers in one single industry like the iron & steel
industry at the plant level, regional level, or industry level. In America,
industrial unions like the International Union, United Automobile,
Aerospace, and Agricultural Implement Workers of America (UAW) exist at
the national level, having more than 0.4 million active members.
• It gives great adaptability to new technology, better-negotiating salary and
working conditions with the employer, and advocacy of better labor
policies from the industrial body and the government. It also prevents the
unauthorized and mass layoffs of workers from their jobs illegally.
• # 3 – General Union
• It is a union body created by all the types of unions
like craft unions and industrial unions to have one
central body in the shape of the national trade union
congress. The central body has much more power to
negotiate with the industries, management, and
government so that the members of the union get
good treatment, better salaries, healthy working
conditions, and call a nationwide strike in case of any
injustice or laying off of the employees without due
legal course. Many times general union is formed to
take the voices of discontent over economic policies
to the government.
 structure of trade unionism
• here are three types of unions based on their
structure: industrial unions, labour unions, and
consumer unions. Labour unions are made up of
workers who earn a living from a particular occupation;
they include all workers who work in a single craft, even
if they work in various sectors.
• Why Employees Join Trade Unions :Trade unions are a
useful tool for improving workplace relations. To ensure
that union workers have improved working conditions:
By banding together under trade unions, employees
can better demand that their employers provide all
basic support for their employees and, if necessary, use
agitation to do so.
Trade Unions in the Eyes of the Management,
• A trade union is a tool to thwart the
management from implementing any anti-
worker policy. It also acts as a bridge between
the worker and the management. It conveys
the policy decisions and objections to and
from workers. The new corporate ‘mantras’
productivity, performance, efficiency, survival
of the fittest have virtually pushed them to the
wall-where their very survival looks uncertain.
Problems and Measures to Strengthen Trade Union

• Let’s recount the factors responsible for their

ever-increasing woes and depreciated status
thus as below:
• 1. Trade Union leadership:
• The nature of leadership significantly influences
the union-management relations as the
leadership is the lynch-pin of the management
of trade unions. The leadership of most of the
trade unions in India has been outside
leadership mainly drawn from political parties.
• Reasons for emergence of outside leadership:
• Outside leadership has been playing a pivotal role
in Indian Trade Union Movement due to the
inability of insiders to lead their movement. In
view of low education standards and poor
command over English language which is still the
principal language of labour legislation and
negotiations, low level of knowledge about labour
legislation, unsound financial position, fear of
victimisation by the employer and lack of
leadership qualities-outside leaders have come to
stay. The main reason for this trend is that the
Trade Unions Act, 1926,[India] itself provided the
scope for outside leadership.
• 2. Multiple unions:
• Multiple unionism both at the plant and industry levels pose a
serious threat to industrial peace and harmony in India. The
situation of multiple unions is said to prevail when two or more
unions in the same plant or industry try to assert rival claims over
each other and function with overlapping jurisdiction. The multiple
unions exist due to the existence of craft unions, formations of two
or more unions in the industry. Multiple unionism is not a
phenomenon unique to India. It exists even in advance countries
like UK and USA. Multiple unionism affects the industrial relations
system both positively and negatively.
3. Union Rivalry:
• The formal basis for Trade Union Organisation is provided by the
Indian Trade Union Act, 1926. The relevant article reads as follows:
“Any seven or more members of a trade union may be subscribing
their name to the roles of the trade union and by otherwise
complying with the provisions of this act with respect to the
registration, apply for registration of the trade union under this
Act.”
• 4. Finance:
• Sound financial position is an essential ingredient for
the effective functioning of trade unions, because in the
process of rendering services or fulfilling their goals,
trade unions have to perform a variety of functions and
organise programmes which require enormous financial
commitments. Hence, it is imperative on the part of a
trade union to strengthen its financial position.
• But it is felt that the income and expenditure of trade
unions in India over the years is such, with few
exceptions, that the financial position of the union is
generally weak, affecting their functioning. It is opined
that, “trade unions could be more effective, if they paid
more attention to strengthening their organisations and
achieving higher attention of financial solvency.”
• 5. Low membership:
• The average membership figures of each union are quite depressing. In 1992-93
the average membership figure was 632, a steady fall from 3,594 per union
from 1927-28. “Because of their small size, unions suffer from lack of adequate
funds and find it difficult to engage the services of experts to aid and advise
members in times of need’. They can’t bargain with the employer effectively on
their own.
• 6. Heterogeneous nature of labour:
• Since workers come to the factory with varying backgrounds, it is difficult for
them to put a joint front in case of trouble. Employers exploit the situation,
under the circumstances, by dividing workers on the basis of race, religion,
language, caste, etc.
• 7. Lack of Interest:
• For a large majority of workers, unionism even today remains a foreign issue. In
fact, workers avoid union activities out of sheer disinterestedness. Those who
become part of the union, do not also participate in the union work
enthusiastically. In such a scenario, it is not surprising to find outside political
leaders exploiting the situation serve their own personal agenda. 8. Absence of
paid office bearers:
• Weak finances do not permit unions to engage the services of full time, paid
office bearers. Union activists, who work on a part time basis, neither have the
 The Trade Unions Act 1926 & Amendment
Bill, 2019:
• The Bill amends the Trade Unions Act, 1926,
which provides for the registration and
regulation of trade unions. The Bill seeks to
provide for recognition of trade unions or a
federation of trade unions at the central and
state level by the central and state
government, respectively.
• The Trade Unions (Amendment) Bill, 2019 was introduced in
Lok Sabha by the Minister of Labour and Employment, Santosh
Kumar Gangwar, on January 8, 2019. The Bill amends the Trade
Unions Act, 1926, which provides for the registration and
regulation of trade unions.

• The Bill seeks to provide for recognition of trade unions or a

federation of trade unions at the central and state level by the
central and state government, respectively. Such trade unions
or the federation of trade unions will be recognised as Central
Trade Unions or State Trade Unions, as the case may be.

• The central or state government may make rules for: (i) the
recognition of such Central or State Trade Unions, and (ii) the
authority to decide disputes arising out of such recognition,
and the manner of deciding such disputes.
•
• What are the salient features of the Trade Union Act
of 1926?
• "The Trade Union Act of 1926 outlines the 3 key
functions of trade unions in India. These
include representation of workers' interests, collective
bargaining with employers, and providing support and
protection for worker.
• What are the objectives of trade union under Trade
Union Act 1926?
• The Trade Unions Act, 1926 provides for registration of
trade unions (including association of employers) with
a view to render lawful organisation of labour to
enable collective bargaining. The Act also confers on a
registered trade union certain protection and privileges
 What is industrial democracy and participative
management?

• While in participative management

organizational designs workers are listened to
and take part in the decision-making process,
in organizations employing industrial
democracy they also have the final decisive
power (they decide about organizational
design and hierarchy as well).
• Workers’ participation in management is a highly complex
concept. The notion that workers should participate in the
management of enterprises which employ them is not a new
concept. It has apparently existed since the beginning of the
industrial revolution. However, its importance increased
gradually over a period of years due to the growth of large-
scale enterprises, increase in work-force, paternalistic
philosophy and practice of informal consultation. Moreover,
the growth of professionalism in industry, advent of
democracy, and development of the principle of social justice,
transformation of traditional labour management relations
have added new dimensions to the concept of participative
management. The philosophy underlying workers’
participation stresses: (i) democratic participation in decision-
making; (ii) maximum employer-employee collaboration; (iii)
minimum state intervention; (iv) realisation of a greater
measure of social justice; (v) greater industrial efficiency; and
(vi) higher level of organisational health and effectiveness.
• Objectives of Workers Participation in
Management The objectives of workers’
participation in management are as follows:
i) To raise level of motivation of workers by
closer involvement. ii) To provide opportunity
for expression and to provide a sense of
importance to workers. iii) To develop ties of
understanding leading to better effort and
harmony. iv) To act on a device to counter-
balance powers of managers. v) To act on a
panacea for solving industrial relation
problems.
• Forms of Participation Different forms of participation
are discussed below:
• Collective Bargaining:
• Collective bargaining results in collective agreements
which lay down certain rules and conditions of service in
an establishment. Such agreements are normally
binding on the parties. Theoretically, collective
bargaining is based on the principle of balance of power,
but, in actual practice, each party tries to outbid the
other and get maximum advantage by using, if
necessary, threats and counter threats like; strikes,
lockouts and other direct actions. Joint consultation, on
the other hand, is a particular technique which is
intended to achieve a greater degree of harmony and
cooperation by emphasizing matters of common interest
• Works Councils: These are exclusive bodies of employees, assigned with different
functions in the management of an enterprise. In West Germany, the works councils
have various decision-making functions. In some countries, their role is limited only to
receiving information about the enterprise. In Yugoslavia, these councils have wider
decision-making powers in an enterprise like; appointment, promotion, salary fixation
and also major investment decisions.
• Joint Management Councils and Committees: Mainly these bodies are consultative
and advisory, with decision-making being left to the top management. This system of
participation is prevalent in many countries, including Britain and India. As they are
consultative and advisory, neither the managements nor the workers take them
seriously.
• Board Representation: The role of a worker representative in the board of directors is
essentially one of negotiating the worker’s interest with the other members of the
board. At times, this may result in tension and friction inside the board room. The
effectiveness of workers’ representative at the board depend upon his ability to
participate in decision-making, his knowledge of the company affairs, his educational
background, his level of understanding and also on the number of worker
representatives in the Board.
• Workers Ownership of Enterprise: Social self-management in Yugoslavia is an example
of complete control of management by workers through an elected board and workers
council. Even in such a system, there exist two distinct managerial and operative
functions with different sets of persons to perform them. Though workers have the
option to influence all the decisions taken at the top level, in actual practice, the board
and the top management team assume a fairly independent role in taking major policy
decisions for the enterprises, especially in economic matters.