Industrial relations Document Transcript 1.

1. Unit III INDUSTRIAL RELATIONSMEANING The concept of industrial relations mean s the relationship betweenemployees and management in the day-to-day working of an industry. But theconcept has a wide meaning. When taken in the wider sense, i ndustrial relationsis a set of functional independence involving historical, econ omic, social,psychological, demographic, technological, occupational, political and legalvariables.According to Dale Yoder, Industrial Relations are a whole field of relationship that exists because of the necessary collaboration of men andwo men in the employment process of an industry.According to the Industrial Labour O rganisation (ILO), IndustrialRelations dealWith either the relationship between t he state and employers and workersorganizations or the relation between the occupa tional organizationsthemselves.The concept of industrial relations has been exten ded to denote the relations ofthe state with employers, workers, and their organ isations. The subject thereforeincludes industrial relations and joint consultat ions between employers and workpeople at their work place, collective relations between employers and theirorganizations and trade union and part played by the State in regulating theserelations. 2. FEATURES 1. Industrial relations are mainly the relations between employees a nd the employer. 2. Industrial relations are the outcome of the practice of huma n resource management and employment relations. 3. These relations emphasis on a ccommodating other partys interest, values and needs. Parties develop skills of a djusting to and cooperating with each other. 4. Industrial relations are governe d by the system of rules and regulations concerning work place and working commu nity. 5. The main purpose is to maintain harmonious relations between employees and employer by solving their problems though grievance procedure and collective bargaining. 6. The government and shapes industrial relations though industrial relations policies, rules, agreements, mediation, awards, acts etc. 7. Trade Un ion is another important institution in the industrial relations. Trade union in fluence and shape the industrial relations through collective Bargaining. 8. Ind ustrial relations develop the skills and methods of adjusting to and cooperating with each other. 9. The Government-involves to shape the industrial relations t hrough laws, rules, agreements, awards etc. 10.The important factors of industri al relations are: employees and their organizations, employer and their associat ions and Government. 3. FACTORS OF INDUSTRIAL RELATIONS Industrial relations are influenced by variou s factors, viz., institutionalfactors, economic factors and technological factor s. 1. Institutional Factors: These factors include government policy, labour leg islations, voluntary courts, collective agreement, employee courts, employers fed erations, social institutions like community, caste, joint family, creed, system of beliefs, attitudes of works, system of power status etc. 2. Economic Factors : These factors include economic organization, like capitalist, communist mixed etc., the structure of labour force, demand for supply of labour force etc. 3. T echnological Factors: These factors include mechanization, automation, rationali zation, and computerization. 4. Political Factors: These factors include politic al system in the country, political parties and their ideologies, their growth, mode of achievement of their policies, involvement in trade unions etc. 5. Socia l and Cultural Factors: These factors include population, religion, customs and tradition of people, race ethnic groups, cultures of various groups of people et c. 6. Governmental Factors: These factors include Governmental policies like ind ustrial policy, economic policy, and labour policy, export policy etc. 4. THREE ACTORS OF INDUSTRIAL RELATIONS Three major participants or actors of in dustrial relations, viz., workersand their organizations, management and governm ent are identified. 1. Workers and their Organisations: The total worker plays a n important role in industrial relations. The total worker includes working age, educational background, family background, psychological factors, social backgr ound, culture, skills, attitude towards other workers etc. workers organizations prominently known as trade unions play their role more prominently in trade unio ns. The main purpose of trade union is to protect the workers economic interest t hrough collective bargaining and by bringing pressure on management through econ omic and political tactics. Trade union factors include leadership, finances, ac

tivities etc. 2. Employers and their organization: Employer is a crucial factor i n industrial relations. He employees the worker, pays the wages and various allo wances, regulates the working relations through various rules, regulations and b y enforcing labour laws. He expects the worker to follow the rules, regulations and laws. He further expects them to contribute their resources to the maximum. The difference between the demands of worker and employer results in industrial conflicts. Normally employers have higher bargaining power than workers. But the ir bargaining power is undermined when compared 5. that to trade unions. Employers from their organizations to equate (or excel) their bargaining power with that of trade unions. These organisations protect t he interest of the employer by pressuring the trade unions and government. 3. Go vernment: Government plays a balancing role as a custodian of the nation. Govern ments exerts its influence on industrial relations through its labour policy, in dustrial relations policy, implementing labour laws, the process of conciliation and adjudication by playing the role of both employees organisation and employer s organisation. OBJECTIVES OF INDUSTRIAL RELATIONSThe primary objective of indust rial relations is to maintain congenial relationsbetween employees and employer. The other objectives are: 1. To promote and develop congenial labour management relations; 2. To enhance the economic status of the worker by improving wages, benefits and by helping in evolving sound budget; 3. To regulate the production by minimizing industrial conflicts through state control; 4. To socialize indust ries by making the government as an employer; 6. 5. To provide an opportunity to the workers to have a say in the management a nd decision- making; 6. To improves workers strength with a view to solve their p roblems through mutual negotiations and consultation with the management; 7. To encourage and develop trade unions in order to improve the workers strength; 8. T o avoid industrial conflict and their consequences; 9. To extend and maintain in dustrial democracy. FUNCTIONS OF INDUSTRIAL RELATIONSFunctions of industrial rel ations include: 1. Communication is to be established between workers and the ma nagement in order to bridge the traditional gulf between the two. 2. To establis h a rapport between managers and the managed. 3. To ensure creative contribution of trade unions to avoid industrial conflicts, to safeguard the interest of the workers on the one hand and the management on the other hand, to avoid unhealth y, unethical atmosphere in an industry. 4. To lay down such considerations which may promote understanding, creativity and cooperativeness to raise industrial p roductivity, to ensure better workers participation. 7. 5. Good labour-management relations depend on employer and trade unions capaci ty to deal with their mutual problems freely, independently and responsibly. 6. The trade unions and the employers and their organisation should be interested i n resolving their problems through collective bargaining and if necessary with t he assistance of proper government agency. 7. Workers and employers organizations should be desirous of associating with government agencies taking into consider ations with general, social, public and economic measures affecting employers an d workers relations.CONDITIONS FOR CONGENIAL INDUSTRIAL RELATIONSThe establishme nt of good industrial relations depends on the constructiveattitude on the part of both the union and the management. The constructiveattitude in its turn depen ds on all the basic policies and procedures laid down inany organization for the promotion of healthy industrial relations. It depends onthe ability of the empl oyers and trade union to deal with their mutual problemsfreely, independently wi th responsibility. They should have their faith incollective bargaining rather t han in collective action. It is very difficult to promote and to maintain sound industrial relations.Certain conditions should exist for the maintenance of harm onious industrialrelations. They are: 8. 1. Existence of Strong, well-Organised and Democratic Employees Unions: Indust rial relations will be sound only when the bargaining power of the employees unio ns is equal to that of management. A strong trade union can protect the employee s interest relating to wages, benefits, job security etc.2. Existence of Sound an d Organised Employers Unions: These associations are helpful for the promotion an d the maintenance of uniform personnel policies among various organizations and to protect the interest of weak employers.3. Spirit of Collective Bargaining and

willingness to Resort to Voluntary Organisation: The relationship between emplo yee and the employer will be congenial only when the differences between them ar e settled through mutual negotiation and consultation rather than through the in tervention of the third party. Collective bargaining is a process through which employee issues are settled through mutual discussions and negotiations through give and take approach. If the issues are not settled through collective bargain ing they should be referred to voluntary arbitration but not to adjudication in order to maintain congenial relations.4. Maintenance of Industrial peace: Perman ent industrial peace in an organization is most essential which can be ensured t hrough the following measures: Machinery for prevention and settlement of indust rial disputes. It included legislative and non-legislative measures. Preventive measures include works committees, standing orders, welfare officers, shop counc ils, joint councils and joint management 9. councils. Settlement methods include voluntary arbitration, conciliation and adjudication. Government should be provided with the authority of settling the i ndustrial disputes when they are settled between the two parties and also by vol untary arbitration. Provision for the bipartite and tripartite committees in ord er to evolve personnel policies, code of conduct, code of discipline etc. Provis ion for the various committees to implement and evaluate the collective bargaini ng agreements, court orders and judgements, awards of the voluntary arbitration etc.APPROACHES TO INDUSTRIAL RELATIONSIndustrial relations issues are complex an d multifarious. They are the results ofsocial, cultural, economic, political, an d governmental factors. An economistinterprets industrial conflict in terms of i mpersonal market forces, a psychologistinterprets in terms of impersonal market forces, a psychologist interprets in termsof individual goals, and motives etc. similarly, a sociologist interprets from hisown viewpoint. But the study of indu strial relations should be from themultidisciplinary approach. 1. Psychological Approach to Industrial Relations: According to psychologists, issues of industri al relations have their origin in the differences in the perceptions of manageme nt, unions and rank and file 10. workers. The perpetual differences arise due to differences in personalities , attitudes, etc. Similarly factors like motivation, leadership, group goals ver sus individual goals etc., are responsible for industrial conflicts.2. Sociologi cal Approach to Industrial Relations: Industry is a social world in miniature. O rganisations are communities of individual and groups with differing personaliti es, educational and family backgrounds, emotions, sentiments etc. These differen ces in individuals create problems of conflict and competition among the members of individual society.3. Human Relations Approach to Industrial Relations: Huma n resources are made up of living beings but not machines. They need freedom of speech, of thought, of expression, of movement and of control over the timings. This approach implies that the relationship between employee and employer as bet ween two human beings. The term human relations include the relationship during the out of employment situations.4. Gandhian Approach to Industrial Relations: M ahatma Gandhis views on industrial relations are based on his fundamental princip les of truth, non violence and non possession. Under the principle pf non-violen ce and truth, Gandhi meant a peaceful co-existence of capital and labour. Truste eship implies cooperation between capital and labour. Gandhi advocated the follo wing rules to resolve industrial conflicts: Workers should seek redressal of rea sonable demands through collective action. Trade unions should decide to go on s trike talking ballot authority from all workers and remain peaceful and use nonviolent methods. 11. Workers should avoid strikes to the possible extent. Strikes should be resor ted to only as a last report. Workers should avoid formation of unions in philan thropical organisation. Workers should take recourse to voluntary arbitration to the possible extent where direct settlement failed.Factors Contributing for Har monious Industrial Relations 1. There is a full acceptance by management of the collective bargaining process and of unionism as an institution. The company con siders a strong union as an asset to the management. 2. The union fully accepts private ownership and operations of the industry; it recognizes that the welfare of its members depends upon the successful operation of the business. 3. The un

ion is strong, responsible and democratic. 4. The company stays out of the inter nal affairs of the union; it does not seek to alienate the workers allegiance to heir union. 5. Mutual trust and confidence exists between the parties. There hav e been no serious ideological incompatibilities. 6. Neither party to bargaining adopts legalistic approach to the solution of problems of relationship. 7. Negot iations are problem-centered. More time is spent on the day-to-day problems than on defining abstract principles. 12. 8. There are widespread union-management consultations and highly developed information sharing.9. Grievances are settled promptly in the local plant, where ver possible. There is flexibility and informality within the procedure.10.The e nvironmental factors do not by themselves cause peace but they create conditions to develop it. The attitudes and the policies of the parties, the personality o f their leaders and their techniques, bring about good relations. 13. Industrial DisputesINTRODUCTION Modern industrialization has not been an unm ixed blessing. It has created ayawning gulf between management and labour becaus e of the absence ofworkers ownership of the means of production. Power has been c oncentrated inthe hands of few entrepreneurs, while a majority has been relegate d to theinsignificant position of mere wage earners. The workers have now come t orealize that most of their demands can be satisfied if they resort to concerted andcollective action; while the employers are aware of the fact that they can r esistthese demands. This denial or refusal to meet their genuine demands has oft enlead to dissatisfaction on the part of the workers, to their distress, and eve n toviolent activities on their part, which has hindered production and harmed b oththe workers and the employers. According to Patterson, industrial strife const itute militant and organisedprotests against existing industrial conditions. The y are symptoms of industrialunrest in the same way that boils are a symptom of a disordered body. The Industrial Disputes Act, 1947, defines an industrial disput e as anydispute or difference between employers and employees, which is connected withthe employment, or non-employment, or the terms of employment or with theco nditions of work of any person. 14. FORMS OF DISPUTES Industrial disputes may take the form of strikes, go-slow tactics, tokenstrikes, sympathetic strikes, pen-down strikes, hunger strikes, ba ndhs,gheraos and lockouts. A strike is a stoppage of work initiated or supported by a trade union, when ato resolve a grievance or constrain him to accept such terms and conditions ofservice as the employees want to enjoy. If, however, an e mployer closes down his factory or place where his workersare employed, or if he refuses to continue in his employ a person or personsbecause he wants to force them to agree to his terms and conditions of serviceduring the pendency of a dis pute, resulting situation is a lockout. Procedures for avoiding strikes, lockout s and other forms of coercive actionin connection with industrial disputes betwe en trade unions and employers aregenerally laid down in the form of a clause or clauses in an agreement betweenthe two. At the same time, it is also laid down t hat there shall be no stoppage ofwork and no coercive act on the part of either party to a dispute till the procedureoutlined in the agreement have been gone th rough, and the two parties have beenunable to come to a compromise or reach a se ttlement. 15. TYPES OF DISPUTES Disputes, according to the code of industrial relations in troduced in the UnitedKingdom in 1972, are of two kinds: (a) Disputes of Right, which relate to the application or interpretation of an existing agreement or co ntract of employment; and (b) Disputes of interest, which relate to claims by em ployees or proposals by a management about the terms and conditions of employmen t. According to the industrial disputes act, 1947, and the mainly judicialdecisi ons which have been handed down by courts and tribunals, industrialdisputes may be raised on any one of the following issues: 1. Fairness of the standing orders ; 2. Retrenchment of workers following by the closing down of a factory, lay-off s, discharge or dismissal, reinstatement of dismissed employees, and compensatio n for them; 3. Benefits of an award denied to a worker; non-payment of personal allowance to seasonal employees; the demand of employees for medical relief for their parents; 4. Wages, fixation wages, and minimum rates, modes of payment, an d the right of an employee to choose one of the awards on wages have been given;

16. 5. Lockout and claim for damages by an employer because employee resorted to illegal strike; 6. Payment of hours, gratuity, provident fund, pension and trav eling allowance; 7. Disputes between rival unions; and 8. Disputes between emplo yees and employers.CAUSES OF INDUSTRIAL DISPUTES (A) Non-Industrial Factors: Ind ustrial relations may be harmonious or strained and acrimonious. In the latter c ase, there are many causes which are rooted in historical, political and socio-e conomic factors, and in the attitudes of workers and their employers. Some of th e causes of a dispute may be: 1. An industrial matter relating to employment, wo rk, wages, hour of work, privileges, the rights and obligations of employees and employers; the mode, terms and conditions of employment, including matters pert aining to (a) Dismissal or non- employment of any person; (b) Registered agreeme nt, settlement or award; and (c) Demarcation of the functions of an employee; 2. An industrial dispute which contains any difference which has been fairly defin ed and is of real substance; that is a matter in which 17. both parties are directly and substantially interested; or which s a grievan ce on the part of the worker which the employer is in a position to redress; or which is such as the parties are capable of settling between themselves or refer ring it for adjudication;3. Disputes often arise because of: (a) The rapidly inc reasing population which has no opportunities for gainful employment; there is, therefore, no improvement in the standard of living of employees who put forward demands for higher wages which, if not conceded, often lead to strained industr ial relations and strikes; (b) Rising unemployment. There was a backlog of 20 mi llion unemployed at the end of the fourth five-year plan and of 30 million by th e end of the fifth five-year plan. Often the unemployment resulted form the impl ementation of the rationalism schemes and installation of new machines on which fewer persons would be employed.4. The galloping prices of essential commodities , their shortages and or non- avaibility, all these erode the value of money, as a result of which the real wages of the workers go down. They become dissatisfi ed, and demand higher wages;5. The attitude and temperament of industrial worker s have changed because of their education, the growth of public opinion and the legislation enacted for their benefit. They are, therefore, very conscious of th eir rights, and will not put up with any injustice or wrong done to them;6. Trad e unions have often failed to safeguard the interest of the workers. 18. The reasons for this state of affairs are: (a) Rivalry among, and a multipli city of, trade unions have destroyed the solidarity of the working class; (b) No n-recognition of some trade unions as bargaining agents of their members; (c) Co mpulsory adjudication has made trade unions seem redundant, for the wages and th e working conditions of industrial employees can now be determined by courts, tr ibunals and wage boards; (d) Trade unions generally do not bother about any aspe ct of the lives of industrial labour except their wages; (e) Trade unions leader s who are themselves industrial workers have become an eye-sore; (f) Trade union s generally function on the basis of the caste, language, or communal considerat ions, which divide rather than unify industrial labour; (g) Trade unions are uns table and ephemeral.(B) Managements Attitudes to labour: Managements generally ar e not willingto talk over any dispute with their employees or their representati ves or refer it toarbitration even when trade unions want them to do so. A manag ements unwillingness to recognize a particular trade union and thedilatory tactic s to which it resorts while verifying the representative character ofany trade u nion have been a very fruitful source of industrial strife. 19. Even when employers have recognized representatives trade unions, they donot, in a number of cases, delegate enough authority to their officials tonegotitiat e with their workers, even though the representatives of labour arewilling to co mmit themselves to a particular settlement. Some of the other cases are: 1. The absence of any suitable grievance redressal procedure, as a result of which grie vances go on accumulating and create a climate of unrest among workers. 2. When, during negotiations for the settlement of a dispute the representatives of empl oyers unnecessarily and unjustifiably take the side of the management, tensions are created, which often leads to strikes, go-slow tactics or lockouts. 3. The m anagements insistence that they alone are responsible for recruitment, promotion,

transfer, merit awards, etc. and that they need not consult their employees in regard to any of these matters, generally annoys the workers, who become the unco- operative and un helpful, and often resort to go-slow tactics. As a result, tensions build up between the two parties. 4. The services and benefits offered by a management to its employees do promote harmonious employer-employee relatio ns. But a large number of managements have not taken any steps to provide these benefits and services for their workers. 20. (C) Government Machinery: The machinery provided by the government for the r esolution of the industrial conflicts is often very inadequate. For example: 1. The governments conciliation machinery has settled a very negotiable number of di sputes because both employers and employees have very little confidence in it; b ecause both have become litigation-minded; because it is inadequate, for the num ber of disputes referred to its very large and the personnel dealings with them is hopelessly inadequate, particularly because, in addition to labour disputes, it is called upon to see to it that labour laws are properly implemented. 2. Aga in, trade unions are generally affiliated to some major political party.ch polit ical party, therefore, somehow engineers strikes, gheraos and bandhs to demonstrat e its political strength. Invariably, the political party, which is in power, fa vours that trade union organisation which is affiliated to it. Result: labour co nflicts and disputes. Recent trends in ir I am providing you with good points indicating the changes that have taken place in IR due to globalizatioon:Competition on the basis of cheap labour:Globalization and increased competition has lead to less strikes, lockouts and l ess man days lost due to strikes. Also now in the era of knowledge industry empl oyees are educated and thus dont believe in violent activities. They are having re sponsibilities in cut throat competition and also are aware of their rights well leading to decline in strikes. Employers also avoid lockouts because decline in production for even hours results in heavy losses so forget about days or weeks . Disinvestment: - it affects IR in following ways:_ It changes ownership, which may bring out changes not only in work org and emplo yment but also in trade union (TU) dynamics. It changes the work organization by necessitating retaining and redeployment. It affects the right of workers and Trade unions, including job/union security, income security, and social security. Trade unions, mgt and government are responding to these challenges through vari ous types of new, innovative, or model arrangements to deal with different aspec ts of disinvestment like X Making workers the owners through issue of shares or controlling interests (lat ter is still not in India) X Negotiating higher compensation for voluntary separations X Safeguarding existing benefits X Setting up further employment generating programs, and X Proposals for setting up new safety nets that not only include unemployment ins urance but also skills provisions for redundant workers. Deregulation: - it is tried to ensure that pubic sector/ government employees re ceive similar protection as is provided in public/government employment. The wor st affected are the pension provisions. this means, usually a reduction in pensi on benefits and an uncertainty concerning future provision of pension benefit du

e to X The absence of government guarantees X Falling interest rates X Investment of pension funds in stock markets Decentralization of IR is seen in terms of the shift in consideration of IR issu es from macro to micro and from industry to enterprise level. When the coordinat ion is at the national or sectoral level then work in the whole industry can be paralyzed because of conflict in IR. But when the dispute is at the bank level, in the absence of centralized coordination by Trade unions only work in that ban k is paralyzed and the other banks function normally. This weakens the bargainin g power of unions. New actors and the emerging dynamics: - Earlier IR was mainly concerned with Tra de unions, mgt and government but now consumers and the community are also a par t of it. When the right s of consumers and community are affected, the rights of workers and unions and managers / employers take a back seat. Hence there is ba n on bandh and restrictions even on protests and dharnas. Increasingly Trade unions are getting isolated and see a future for them only by aligning themselves with the interests of the wider society. Pro-labour-pro-investor policies This leads to decline in strength and power of Trade unions if not in numbers. U nions have to make alliances with the society, consumers and community and vario us civil society institutions otherwise they will find themselves dwindling. Declining TU density In government and public sectors workforce is declining because of non-filling o f vacancies and introduction of voluntary / early separation schemes. New employ ment opportunities are shrinking in these sectors. In the private sectors particularly in service and software sector, the new, you ng, and female workers are generally less eager to join unions. Workers militancy replaced by employer militancy Due to industrial conflicts In 1980-81 man days lost = 402.1 million In 1990-91 man days lost = 210 million Not because of improved IR but because of the fear of job security, concern abou t the futility of strikes, and concern to survive their organization for their i ncome survival. Trade unions have become defensive evident from the fact that there is significa nt shift from strikes to law suits. Instead of pressing for higher wages and imp roved benefits, Trade unions are pressing for maintenance of existing benefits a nd protection and claims over non-payment of agreed wages and benefits. Collective Bargaining Level of collective bargaining is shrinking day by day. Some more information:In India, while labour is in the Concurrent List, state labour regulations are a

n important determinant of industrial performance. The Survey notes evidences th at states that had enacted more pro-worker regulations, had lost out on industri al production in general. However, on the upside, the Survey said there was a secular decline in the numbe r of strikes and lockouts during 2000-04. The total number of strikes and lockou ts went down 13.6% from 552 in 2003 to 477 in 2004. The decline was sharper in t he number strikes than in lockouts, it noted. While most of the strikes and lockouts were in private sector establishments, ov erall industrial relations had improved, especially between 2003 and 2004, when there was a decline in the number of mandays lost by 6.39 million. Among states, the maximum number of strikes and lockouts were in Left-ruled West Bengal, followed by Tamil Nadu and Gujarat. The sectors which saw instances of industrial disturbance were primarily textiles, engineering, chemical and food p roduct industries. Stressing on the importance of labour reforms to enhance productivity, competiti veness and employment generation, the Survey noted that a beginning had already been made in that direction. For instance, in the current year, there was a prop osal to enhance the wage ceiling from Rs 1,600 per month to Rs 6,000 per month t hrough The Payment of Wages (Amendment) Act 2005. Also, the proposal to empower the central government to further enhance the ceiling in future by way of notifi cation is already in effect from November 9, 2005. As regards women working on night shifts, The Factories (Amendment) Bill 2005, w as under consideration to provide them flexibility and safety. Also, to simplify the procedure for managements to maintain registers and filing returns, an amendment of Labour Laws (Exemption from Furnishing returns and mai ntaining Registers by Certain Establishments) Act 1988, was under consideration.