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Unit VII : Industrial Relations

Notes
Structure
7.1 Introduction
7.2 Industrial Disputes
7.3 Grievance Procedure
7.4 Discipline
7.5 Role of Trade Unions
7.6 Collective Bargaining
7.7 Summary
7.8 Check Your Progress Questions
7.9 Further Reading

Objectives
After reading this unit, you should be able to:
 Understand the concept of industrial relations
 Understand the meaning, causes and effects of industrial disputes.
 Understand how the industrial disputes can be prevented and also know the
existing machinery for the settlement of industrial disputes.
 Understand the grievance redressal procedure.
 Understand the various aspects of discipline
 Understand the concept, functions and role of trade unions
 Understand the meaning, process and role of collective bargaining.

7.1 Introduction
The concept of industrial relations has generally developed as a consequence of the
industrial revolution. Formerly, the employer and his workmen had the relationship of
a master and his servant, which was very much personal in nature. Because of direct
touch between the two, there was little problem of labour relations.

But with the advent of industrialisation and large-scale production, direct contact
between the two started coming to an end and relations between employers and
employees started getting estranged. Too much oppression of the workers compelled
them to organise themselves and fight for their common cause through the forum of
their trade unions. Employers too, would not hesitate to go for lockouts. With all this,
there started an industrial war between employers and the workmen. Hence, people
started viewing the issue of industrial relations as the problem of relationship between
the employer and the workmen.

In the beginning, the government, which believed in the laissez faire policy, did not
intervene in industrial disputes, unless these resulted in prolonged strikes. Even in such
cases, usually the government was contended with appointing Committees of Enquiry.
But when the frequency and the intensity of industrial conflicts started assuming serious
proportions, the government had to intervene and thus became one more party in the
field of industrial relations. In this way, people started considering industrial relations as
the complex of inter-relations among workers, managers and the Government.

The problems of poor industrial relations have given rise to the problems of industrial
disputes, indiscipline, trade unions and so on. In case, adequate measures are taken
to: (i) prevent and settle industrial disputes appropriately, (ii) implement grievance
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redressal procedure, (iii) make the trade unions play their role well, and (iv) use the
institutions of collective bargaining frequently and gainfully, the climate of industrial Notes
relations can be improved to the benefit of all concerned.

7.2 Industrial Disputes

According to Section 2 (k) of the Industrial Disputes Act, 1947, the term industrial
dispute means “any dispute or difference 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 and
conditions of employment of any person”.

Causes of Industrial Disputes

The causes of industrial disputes have been classified in different ways. According
to one classification, causes of disputes can be categorised as follows:

A) Related to Income - like wages, dearness allowance, bonus, fixation of pay

scales, P. F., gratuity, pension, overtime, fines, etc.

B) Related to Employment - like holidays and leave, welfare facilities, social

security, dismissal, retrenchment, lay off, retirement, discharge, re-instatement,
grievance redressal procedure, safety measures, conditions of work, strikes,
lockouts, standing orders, etc.

C) Related to Technological Changes - like work load, rationalisation,

automation, computerisation, modernisation of plants, training and re-training,
rehabilitation, etc.

Effects of Industrial Disputes:

The negative effects of industrial disputes can be considered under the following
heads:

(a) On employees- loss of wages due to strikes and lock-outs, loss of bonus
and incentives, physical injuries if strikes are violent, adverse effects on their
families, especially on children.

(b) On employers- loss of production, increase in cost of production, less profits,

distrust, less expansion.

(c) On Government- loss in revenue due to less taxes on account of less

production and less sales, waste of resources in settling of certain disputes.

(d) On the community- shortage of goods and services, inadequate and irregular
supply of goods and services, higher prices, poor quality of goods.

(e) On shareholders- less dividend,

Thus, you can see that industrial disputes affect all the stakeholders adversely.
Therefore, industrial disputes should be prevented or amicably settled.

Preventive Measures
The following are the major steps taken in our country to prevent industrial disputes:
 Labour/ Labour Welfare Officers
 Works Committees
 Standing Orders
 Code of Discipline
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 Code of Conduct
Notes  Workers’ Participation in Management
 Collective Bargaining
 Profit Sharing
 Labour Co-partnership
 Strong Trade Unions
 Improvement in economic and living conditions of workers
 Provision for labour welfare activities
 Provision for social security
 Grievance redressal mechanism
 Wage Policy of the Government and Wage Boards
 Bi-partite and Tri-partite Bodies
Machinery for Settlement of Industrial Disputes

A) Statutory Machinery:
The statutory machinery for the settlement of industrial disputes is contained in the
Industrial Disputes Act, 1947 (as amended from time to time), which, besides providing
for Works Committee (which, by and large, are of preventive nature. The statutory
machinery provides for:

I. Conciliatory Machinery:
i). Conciliation Officer (Section 4 of the Act)

ii). Board of Conciliation (Section 5 of the Act)

iii). Courts of Enquiry (Section 6 of the Act)

II. Adjunction Machinery:

i). Labour Courts (Section 7 of the Act)

ii). Industrial Tribunals [Section 7 (a) of the Act]

iii). National Tribunals [Section 7 (b) of the Act]

III. Compulsory Arbitration

I. Conciliatory Machinery:
(i) Conciliation Officer: Under Sec. 4 of the Act, the appropriate Government
may, by notification in the official gazette, appoint such number of persons as it
thinks fit to be Conciliation Officers for a specified area, or for specified industries
in a specified area, or for specified area, or for one or more specified areas, or for
specified industries in a specified area, or for one or more specified industries,
either permanently or for a limited period.

The primary function of a Conciliation Officer involves mediation in and promoting

the settlement of industrial disputes. This is the most popular system of bringing
about an agreement. Except the two parties to the dispute and the Conciliation
Officer, no third party is involved. It has been experienced that where adjudication
has failed, conciliation process has achieved remarkable success. The Conciliation
Officer is required to submit his report to the government within 14 days. If the
settlement is arrived at, it is signed by both the parties and the report is sent to
the appropriate government. In case of failure, the Conciliation Officer sends full
report of his efforts, steps taken, circumstances and reasons on account of which
settlement could not be reached, to the government. If on consideration of report,
the appropriate government feels convinced that there is a case for reference to a

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Board of Conciliation, it may make such reference. The Conciliation Officer is not a Notes
judicial authority. He acts just like an administrator.

Compulsory Conciliation- Under the Industrial Disputes Act, 1947, (as amended
from time to time), it is compulsory for the government to refer all disputes in public
utility concerns for conciliation. The government can exercise this power, in the
case of other concerns also. However, compulsory conciliation is not liked, because
it leads to State interference. Besides, conciliation, by its very nature, is voluntary
and, therefore, should not be made compulsory. As far as voluntary conciliation is
concerned, it is rarely availed of in our country. Compulsory conciliation, though not
appreciated in the normal course, has helped in resolving many disputes.

(ii) Board of Conciliation (BOC): Where the appropriate government is of opinion

that any industrial disputes exists or is apprehended, it may at any time, by order
in writing, refer the disputes to a Board of Conciliation for promoting a settlement
thereof, under Section 5 of the Industrial Disputes Act, 1947 (as amended from time
to time). Usually, those cases which could not be settled at the Conciliation Officer’s
level, are referred to B.O.C.

The B.O.C consists of a Chairman and two or four other members as the
government may think fit, representing, in equal number, both the parties. If the
settlement is arrived at, the B.O.C. sends a report to the appropriate government
with a memorandum of settlement signed by both the parties. In case of no
settlement, a full report, stating reasons, etc., is submitted to the government.

The B.O.C is required to submit its report within two months from the date on which
the dispute is referred to it (can be further extended by the government, if it so
desires).

In case of failure, the government may refer the case to a Court of Enquiry.

(iii) Court of Enquiry: Under Section 6 of the Industrial Disputes Act, 1947 (as
amended from time to time), the appropriate government may, as the occasion
arises, by notification in the official gazette, constitute a Court of Enquiry for
enquiring into any matter appearing to be connected with or relevant to an industrial
dispute (specially the cases which B.O.C fails to resolve).

A Court of Enquiry may consist of one independent person or such independent

persons as the government may think fit. The court is required to submit its report
within a period of six months from the commencement of enquiry. In case of failure,
the government may refer the matter to the adjudication machinery (Labour Court/
Industrial Tribunal/ National Tribunal).

II. Adjudication Machinery

Industrial Disputes (Amendment and Miscellaneous Provisions) Act, passed in
August 1956, made certain long-felt changes in the Industrial Disputes (Appellate
Tribunal) Act, 1950 and thus, the previous system of tribunals has been substituted by
three-tire system (adjudication machinery) which consists of:

(i) Labour Court: Under Section 7 of the Industrial Disputes Act, the appropriate
government may constitute one or more labour courts for the adjudication of
industrial disputes relating to any matter specified in the II Schedule (e.g. illegality,
or otherwise, of a strike or lockout, the propriety, or legality, of any order passed
by the employer under the Standing Order, discharge or dismissal of a worker,
etc.) and for performing such other functions as may be assigned to them. A

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Notes Labour Court shall consist of one person only—to be appointed by the appropriate
government. As far as the effectiveness of labour Courts is concerned, it can be
said that they are playing an important role in adjudication of the industrial disputes
referred to them. However, their functioning needs further streamlining.

(ii) Industrial Tribunals: Under section 7(b) of the Industrial Disputes Act, the
appropriate Government may constitute one or more Industrial Tribunals for
adjudication of industrial disputes relating to any matter, whether specified in the
IInd or IIIrd Schedule. III Schedule includes matters like wages, compensatory and
other allowances, hours of work, rest intervals, leave and holidays, bonus, provident
fund, gratuity, rationalization, retrenchment, etc.).

An Industrial Tribunal comprises one person to be appointed by the appropriate

government. As far as the effectiveness of Industrial Tribunal is concerned, they are
doing a good job though the workers have got certain grievances against them.

(iii) National Tribunals: Under Section 7(b) of the Industrial Disputes Act,
the Central Government may constitute one or more National Tribunals for
adjudication of industrial disputes which, in the opinion of the Central Government,
involve questions of national importance, or are of such a nature that industrial
establishments situated in more than one State are likely to be interested in, or
affected by such, disputes. A National Tribunal consists of only one person to be
appointed by the Central Government. National Tribunals constituted so far have
been effective to a great extent though they have complaints from both the workers
and employers from time to time regarding the judgements given by National
Tribunals.

III. Compulsory Arbitration

In case the device of voluntary arbitration is not utilised and the dispute has not
been referred to the adjudication missionary, the government may refer a dispute for
compulsory arbitration. In such a case, it becomes a statuary step. As in our country,
voluntary arbitration has not been able to make any mark, the government has been
making the use of compulsory arbitration quite frequently. The principle of compulsory
arbitration was incorporated in the Industrial Disputes Act. Under compulsory
arbitration, the government submits the case to an authority for arbitration, on its own or
on the request of either of the two parties, and enforces its award on the parties.

Compulsory arbitration, or adjudication, should be used sparingly and cautiously.

Otherwise, it may amount to an unjustified State imposition and may lead to complete
negation of the principle of democracy. It also leads to denial of the right of collective
bargaining. Hence, compulsory arbitration has been subjected to severe criticism,
though it may be good for the community at large. However, both the workers and
employers do not favour it at all. The Royal Commission on Labour and the eminent
writers like Sydney Webb and V.V.Giri, all have opposed compulsory arbitration.

B. Non-Statutory Measures
(i) Mediation: Mediation is an attempt to settle disputes with the help of an
outsider, who assists the parties in their negotiations. The mediator is usually an
eminent outsider or a non-governmental board, etc. It starts functioning at the
invitation of or, at least, consent of both the parties. A mediator does not enforce his
will or judgment, but simply tries to bring about a voluntary agreement. Though a
very useful method, but is not much availed of in our country.

(ii) Arbitration: Voluntary Arbitration- The amended Industrial Disputes Act

[Section 10(a)] provides that where any industrial dispute exists, or is apprehended,

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and the employer and the workmen agree to refer the dispute for arbitration, they Notes
may, at any time before the dispute has been referred to a Labour Court/ Industrial
Tribunal/ National Tribunal, by a written agreement, signed by the parties, refer
the dispute for arbitration and the reference shall be made to such a person, as
specified in the arbitration agreement. Voluntary arbitration is considered to be
one of the best methods for settlement of industrial disputes, but unfortunately, this
machinery has not been very much utilised in our country. Still, it has served a very
good purpose in certain cases.

Thus, we find that the existing machinery for settlement of industrial disputes
has been effective to a great extent. However, it still needs certain improvements; for
example, there should be permanent machinery for the settlement of industrial disputes.
Voluntary arbitration, mediation and conciliation should be encouraged to play a
greater role in this regard. The proposed legislation is likely to take care of many of the
shortcomings in the existing system of settlement of industrial disputes.

7.3 Grievance Redressal

According to J.M. Jucius, “A grievance is any discontent or dissatisfaction, whether
expressed or not, whether valid or not, arising out of anything connected with the
company which an employee thinks, believes, or even feels, to be unfair, unjust or
inequitable.” This definition throws light on almost all the main aspects of a grievance.

Causes of Grievance
The causes of grievances may fall under any one or more than one of the following
categories:

(i) Concerning policies and practices of the management

(ii) Concerning working conditions

(iii) Concerning personality traits

(iv) Concerning a mismatch between a worker’s ability and the job.

Essentials of a Sound Grievance Redressal Procedure

A grievance redressal procedure can be considered sound if it has the following
features:

(i) It should be legally approved

(ii) It should be acceptable to all concerned

(iii) It should redress the grievances within the prescribed time framework

(iv) It should be easily understandable

(v) The officials handling grievance should have undergone training in this regard

(vi) Proper follow up for review of the procedure through feedback

Model Grievance Procedure

Keeping in view the importance of grievance redressal procedure to all concerned,
the National Commission on Labour has suggested a model grievance procedure for
speedy redressal of grievance which is self-explanatory in the following figure:

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Notes the

and
the within

(Fig. 7.1 Model Grievance Procedure)

7.4 Discipline

Meaning and Definition

Discipline is a procedure that corrects or punishes a subordinate, because he or
she has violateda rule or proceduress. Discipline is, therefore, a force that prompts
employees to observe rules, regulations and procedures that are viewed to be
necessary for the effective functioning of the organisation. Discipline is said to be good,
when employees willingly adhere to rules and regulations of the organisation.

Foundations of a Fair Disciplinary Process

There are three foundations of a fair discipline process:

i) A set of clear rules and regulations

ii) A system of progressive penalties

iii) Existence of an appeal process.

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Objectives of Discipline Notes

Discipline has the following objectives:

 To get voluntary acceptance of members to rules, regulations and policies of

the organisation, so that the objectives of the organisation are achieved surely,
certainly and economically

 To develop the feeling of adjustment, so that they work according to the

demands of the situation

 To provide direction, right of leadership and getting cooperation

 To arouse the feeling of endurance and mutual co-operation among the workers
and the management

 To inculcate the feeling of respect for human beings and human relations and
create a conducive atmosphere for that

 To increase the morale and efficiency of the organisation, so that it can give
maximum production at minimum cost.

Types of Discipline
According to Dale, “Discipline is to regulate the human behaviour through reward
or punishment”. Thus, this definition stresses upon two types of discipline - positive
discipline, and negative discipline.

i) Positive Discipline, or Self-imposed Discipline - It is such an arrangement,

wherein a worker is motivated to work himself and he is eager to obey and
abide by the rules.

ii) Negative Discipline - This approach to discipline is just opposite to positive

discipline. This stresses more on punishment than on cooperation. For the
establishment of discipline, the accused worker is issued a warning, or
made to fear that he may be punished or is actually given a punishment. Its
objective is to establish discipline through fear, or actual punishment. Here,
he is immediately punished for not doing, wrongly doing, or doing against
instructions. Workers are told the nature and quantity of punishment well in
advance.

Causes of Indiscipline
The causes of indiscipline in industries can be divided into two groups:

a) Internal Causes

Internal causes of indiscipline are as follows:

(i) Lack of Effective Leadership
(ii) Lack of personal Development Opportunities
(iii) Defective Supervision
(iv) Biased Attitude
(v) Lack of Code of Conduct
(vi) Apathy towards Grievances
(vii) Divide and Rule Policy
(viii) Personal Factors
(ix) Victimisation and Excessive Pressure
b) External Causes
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External causes of indiscipline relate to the factors outside the organisation itself.
Notes Various non-economic, social and political factors cause indiscipline in industries
as a whole. For example, if the whole country is passing through violence and
disturbance, the industry’s discipline may also be affected.

Disciplinary Process
Although there is no specific procedure to be followed for taking disciplinary action,
yet the following steps be taken into consideration:

i) Issue of Show Cause Notice

ii) Conducting Preliminary Investigation
iii) Collecting Facts
iv) Determination of the Penalty, if any, to be imposed
v) Application of the Penalty
vi) Follow up of the Disciplinary Action

Guide to Disciplinary action:

While taking actions against indiscipline, the following factors should be kept in view:

i) Disciplinary action should be taken in private

ii) An application of a penalty should always carry with it a constructive element
iii) Disciplinary action should be administered by the immediate supervisor
iv) Promptness is important in taking disciplinary action
v) Need of consistency in the administration of disciplinary action
vi) A person should never be disciplined in the presence of his own subordinates
vii) Normal attitude towards the employee after disciplinary action
Thus, we find that when the management is not satisfied with the behaviour of an
individual, its ultimate aim is to bring about a change in his behaviour, which may be
more consistent with organisation’s requirements. Penalties and punishments constitute
only one means of effecting the desired change and, therefore, should be used as
sparingly as possible. The attitude of the supervisor and other managerial personnel
should be one of counseling and understanding, rather than ‘police and punish’.

7.5 Trade Unions

According to Section 2 (h) of Trade Union Act, 1926, a trade union means, “any
combination, whether temporary or permanent, formed primarily for the purpose of: (a)
regulating the relations (a) between workmen and employers, or (2) between workmen
and workmen, or (3) between employers and employers; or (b) for imposing restrictive
conditions on the conduct of any trade or business, and includes any federation
of two or more trade unions.” Broadly speaking, good trade unions are supposed to
protect and promote the interests of their members and also work for the betterment
of the firms they belong to as also of the community and the nation as a whole. Under
the Trade Union Act, 1926, any seven or more persons can form their trade union
and apply for its registration, though registration is not mandatory. However, if not
registered, the trade unions cannot avail the privileges of a registered trade union.
Similarly, the recognition of a trade union by the employers is also not mandatory,
though there is a voluntary Code of Discipline, and legislation in some States regarding
recognition of trade unions by the respective employers. Some of the major problems of
trade unions in our country include: multiplicity of trade unions, politicalisation of trade
unions, poor finances, inter - union and intra - union rivalries, outside leadership, lack
of provision for mandatory recognition by employers, inefficient and selfish leaders, etc.

Functions of Trade Unions

The functions of trade unions can be classified under the following five categories:

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i) Militant/ Fighting/ Intra - mural Functions: These functions include protecting
and promoting the interest of worker, e.g., rise in wages, security of job, more Notes
fringe benefits, etc., through negotiations, collective bargaining, etc. If this fails,
unions resort to direct action like strikes, gheraos, violence, etc.

ii) Fraternal or Extra - mural Functions: These may comprise monetary or non
monetary help to workers during the periods of strikes and lockouts, or medical,
recreational and housing facilities, etc.

iii) Political Functions: These functions include affiliating a union to a political

party, contesting elections and too ambitious, if possible.

iv) Social Functions: These functions may consist of carrying out social service
activities like educating the people.

v) Ancillary Function: Such functions may include welfare activities, publication

and research, communication, etc.

Role of Trade Unions

A Trade Union can play a number of roles, like:
(i) Protector and promoter of the interest of employees
(ii) Counselor of the employees
(iii) Legal Advisor of the employees
(iv) Peace Promoter
(v) Spokesperson of the employees
(vi) Liaison maker
(vii) Change agent
(viii) Conciliator/ Negotiator
(ix) Disseminator of information
(x) Motivator
(xi) Facilitator
(xii) Miscellaneous

Thus, you find that if trade unions play the desired role, they can bring about a lot of
transformation and improvement in the organisation.

7.6 Collective Bargaining: Role And Process

Collective bargaining, an essential element of industrial democracy, is a ‘two party’
procedure for arriving at a commonly agreed solution. According to the Encyclopedia
of Social Sciences, collective bargaining is “a process of discussion and negotiation
between two parties, one or both of whom is a group of persons acting in concert. The
resulting ‘bargain’ is an understanding as to the terms and conditions under which a
continuing service is to be performed… More specifically, collective bargaining is a
procedure by which employers and a group of employees agree upon the conditions
of work”. The word “collective” merely indicates that the representatives are trying to
negotiate an agreement for a group of persons. “Bargaining” is the process of meeting,
presenting demands, discussing, presenting counter-offers, haggling, cajoling,
threatening, and a whole host of other activities which go into the negotiation of an

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agreement. The term “Collective Bargaining”, therefore, denotes collective negotiations

Notes of a contract between management’s representatives, on one side, and those of the
workers, on the other. The phrase collective bargaining was coined by Sydney and
Beatrice Webb, and Great Britain is said to be the “home of collective bargaining”,
which had its first systematic application in the early nineteenth century.

Process of Collective Bargaining

Collective bargaining comprises two stages: (1) the negotiation stage, and (2) the
stage of contract administration.

Process of Collective Bargaining

A) Negotiation Stage

a) Identification of Problems

b) Preparation for Negotiations

i) Selection/ Constitution of Negotiating Teams
ii) Bargaining Power
iii) Data Collection

c) Negotiations of Agreement
i) Haggling bargaining
ii) Boulwarism bargaining
iii) Continuous bargaining

d) The collective Bargaining Agreement

e) Follow-up

B) Contractual, Administration

a) Negotiation Stage
The negotiation stage involves the following steps:

a) Identification of the Problem - It is very important for both the parties to be

clear about the problem before entering into negotiations, because the nature
of the problem affects the entire process of negotiations. Hence, the problem is
to be identified in its true perspective, i.e., whether the problem to be discussed
is of urgent nature and whether it, at all, requires collective bargaining. The
selection of representatives, the number of representatives, period of collective
agreement, etc., are all affected by the problems.

b) Preparation for Negotiations - After having identified the problem, the next
step in the process of collective bargaining is the preparation for negotiations,
which may be initiated at the instance of either party. The preparation involves
the following:

i) Selection/ Constitution of Negotiating Teams - On the company’s side,

the negotiating team may comprise the HR manager, production manager
and the company’s legal advisor. Normally, the chairman of the company
is kept out of the negotiation team, so as to keep the two bargaining teams

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on an equal footing. The team representing the company acts in unison,
i.e., either it accepts or it rejects. On the workers’ side, where there is a Notes
single trade union, the negotiating team comprises the office-bearers of the
union. In case there are more than one trade union, the management faces
a difficulty in deciding whom to accept as the bargaining agent.

It is not necessary for the number of representatives on the employers’ side and
the workers’ side to be equal.

It will be good if the members of the negotiating team possess the following
qualities/ attributes:
 Skills to identify and analyse problems
 Right attitudes
 Credibility
 Thorough knowledge of working conditions, production norms and other
concerned factors
 Skill in adopting tactics

ii) Bargaining Power - It is obvious that before starting the negotiations, each
side in the collective bargaining weighs its bargaining power and determines
the maximum concession which it can offer to the other side. This depends
on the estimated cost of the work stoppage (strike or lock-out) to the side
concerned and also on its estimate of the other side’s cost arising out of
the stoppage.

iii) Data Collection - Both sides devote a great deal of time in collecting
necessary data on a large number of issues like wages and salary, seniority,
over-time allowance, cost of living, productivity trends, retirement and fringe
benefits, policies and practices of trade unions and managements, hours
of work, leave and holidays and other relevant information on area-cum-
industry practices, as also on the nature of agreements signed in other
organisations. Such agreements signed elsewhere play a very important
role in negotiations. Usually, the management collects the information on the
above-mentioned items from different management associations, surveys
conducted by research staff, government and other dependable bodies. On
the other hand, trade unions collect the data from their central organisation/
federations, surveys and reports conducted/ published by other competent
agencies.

c) Negotiation of Agreement - Normally, the chief negotiator representing the

management side directs and presides over the process. He presents the
problem, points out its nature and intensity, and the views of both the sides.
Thereafter, the representatives of both sides are allowed to present their
views and negotiate. There can be the following three types of negotiating
procedures:

i) Haggling bargaining is the orthodox procedure of labour negotiations. This

can be of two types: (i) the piecemeal approach, in which issues are settled
one by one independently and ticked away; and (ii) the total approach in
which no issue is settled independently. Each issue is discussed and laid
aside as others are brought forward; but each issue remains open until
suddenly the whole complex is ready to crystallise into a total agreement
because it is assumed that all issues are interrelated and inter-dependent.

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Notes ii) Boulwarism bargaining was originated by Lemuel Boulwarem, formerly

Vice President of the General Electric Company. In it, the company makes its
first offer a full and final one instead of starting low and letting it be dragged
up to the final offer it perhaps had in mind from the start. Besides, in Boul-
warism bargaining, the company representatives in addition to meeting the
union representatives, conduct an extensive communication programme
to sell its offer directly to the employees and request them to make their
views known to their union officials so as to create an impression among
the employees that the company is doing it on its own, and not under the
pressure of the union.

iii) Continuous bargaining - this approach calls for parties to explore partic-
ularly difficult bargaining problems in joint meetings, over a long period of
time, sometimes throughout the life of each contract.

In the process of negotiations, each party tries to find strong and weak points in
the other’s defence and by and by differences are narrowed down and finally after
some manoeuvring, an agreement is reached. However, it will be desirable, if the
following points are kept in mind in the bargaining process:

 Parity of bargaining strength in the two parties

 Problems-solving attitude
 Good beginning
 Continuance of talks

d) The Collective Bargaining Agreement - The negotiations ultimately result in

the finalisation of the collective agreement, or labour contract. The collective
agreement is the written statement of terms and conditions mutually agreed
during collective bargaining. Such agreement may comprise a preamble, a
series of clauses and appendices, listing job classifications, wage rates and
other relevant details. While in certain countries like India, such agreements
assume the form of legal contracts, in some other countries like Britain, such
agreements are purely voluntary in nature, with no legal force.

As per the Indian Institute of Personnel Management, Kolkata, the following

should be included in a collective agreement:

(i) The purpose of the agreement, its scope and the definition of important
terms;
(ii) The rights and responsibilities of the management and of the trade union;
(iii) Wages, bonus, production norms, leave, retirement, and other benefits and
terms and conditions of service;
(iv) Grievance redressal procedure;
(v) Means and machinery for the settlement of possible future disputes; and
(vi) A termination clause.

In some countries, where national law and practice so permit, the collective
agreement may also include clauses on preferential recruitment for trade union
members. These are known as ‘closed shop’ (employer under an obligation to
employ only union members); ‘union shop’ (employer may employ a non-union
worker but the worker so employed must join the union within a specified period
after employment); and ‘maintenance of membership shop’ (workers are given
by the employer the options to become members within a certain period after
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Human Resource Management 105

employment. Of course, those who choose to be the members are not allowed Notes
to leave the union without losing their jobs).

(e) Follow-up Action - It is desirable to get the ‘collective agreement’ printed

and circulated among the employees so that they may also know the details.
Meetings of supervisors should also be convened so as to apprise them of the
content of the agreement, so that they may implement it effectively.

b) Contract Administration
Having signed the collective agreement, both the parties, i.e., the trade union and
the management, are required to honour it in letter and spirit because the progress in
collective bargaining is not measured by the mere signing of an agreement; it is rather
measured by the effective administration of the collective agreement. It is, therefore,
necessary that both the sides should explain the terms and implications of the contract
to employees and supervisors so as to ensure that day-to-day working relationship
between workers and the management is guided by the contract signed by the two
parties.

However, it is not unusual to come across that the process of collective bargaining
vitiated by the atmosphere of distrust, conflict, mutual acrimony, third party
interventions, legal disputes, etc.

Causes for Limited Success of Collective Bargaining in India

The following are main causes for the limited success of collective bargaining in
India:

i) Weak and multiplicity of trade unions

ii) Lack of strong efforts from the side of the Government
iii) Easy accessibility of adjudication
iv) Inference of political parties
v) Lack of encouragement for collective bargaining from the management.

Thus, we observe that collective bargaining in India is gradually extending its area
and, given proper impetus, it is capable of leading the country to industrial peace
and prosperity. It follows, therefore, that those requisites, which are essential for the
promotion of collective bargaining and have not yet either been provided at all or have
been provided inadequately, should be developed and provided, as mentioned earlier
also, if industrial peace and prosperity are to be achieved.

Role of Collective Bargaining

The institution of collective bargaining has come to stay in our country and has
started playing a vital role for quite some time. It can play the following roles:

(i) Mutual trust promoter between the workers and the management.
(ii) Promoter of industrial peace.
(iii) Preventor of industrial conflicts
(iv) Negotiator/ bargainer
(v) Ensurer of justice to workers.
(vi) Spokesperson of the workers.
(vii) Believer in the policy of ‘ give and take’
(viii) Others
Thus you see that collective bargaining is a powerful tool in the hands of both
the employees and the management, which can be instrumental in protecting and
promoting the interest of all the stakeholders in the organisation.

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106 Human Resource Management

Notes 7.7 Summary

This unit dealt with some of the important aspects of ‘industrial relations’ which is a
product of interaction between the employees, employer and the government. First, the
problem of ‘industrial disputes’ was taken up. After defining the term as per Industrial
Disputes Act, 1947, the causes and effects of industrial disputes were discussed.
After discussing the steps undertaken to prevent industrial disputes, the existing
machinery for settlement of industrial disputes in our country was discussed. The issue
of grievance redressal was discussed pointing out the causes, essentials of a sound
grievance procedure, and explaining the model grievance redressal procedure with the
help of a chart.

Then comes the issue of maintaining discipline in organisations. Under this area, the
meaning of discipline, foundations of a fair disciplinary process, objectives and types of
discipline were discussed. The causes of indiscipline were also highlighted, followed by
a discussion on disciplinary process and guidelines to disciplinary action.

Coming to trade unions, besides the role of trade unions, the functions of trade
unions was discussed under four heads, viz., Militant functions, Fraternal functions,
Political functions and Social functions.

The process of collective bargaining was discussed under two heads, viz., (i)
Negotiation stage, and (ii) Contractual Administration. The Role of Collective Bargaining
was also been discussed.

7.8 Check Your Progress Questions

 Define the term ‘Industrial Dispute’. What are the causes and effects of
industrial disputes? Discuss in detail.

 Identify the steps taken in our country to prevent industrial disputes. Also
discuss, in brief, the existing machinery for the settlement of industrial disputes
in our country.

 Write a brief note on Model Grievance Redressal Procedure.

 What are the functions and role of trade unions in our country? Discuss in
detail.

 Discuss, in brief, the process and role of collective bargaining.

7.9 Short Answer Questions

1. What is an industrial dispute?

2. Identify the categories of causes of industrial disputes.

3. What does the conciliatory machinery of settling industrial disputes consist of?

4. What is a grievance?

5. What are the main types of discipline?

7.10 Long Answer Questions

1. Discuss the statutory machinery for settlement of industrial disputes, as
provided for under the Industrial Disputes Act, 1947 (as amended up to date).
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Human Resource Management 107
2. What steps have been taken in our country to curb the growth of industrial
disputes? Notes
3. What are the functions of Trade Unions? Discuss categories-wise.

7.11 Further Readings

 Ivancevich, J.M., 2006, Human Resource Management, Tata Mc Graw-Hill Pub.
Co. Ltd., New Delhi.

 Momappa, A., Industrial Relations, Tata Mc Graw-Hill Pub. Co. Ltd., New Delhi.

 Sharma, D.C. and Sharma R.C., 1988, Personnel Management and Industrial
Relations, S.J. Publications, Meerut.

 Rao, P.S., 2007, Essentials of Human Resource Management and Industrial

Relations, Himalaya Publishing House, Delhi.

 Jyothi, P. and Venkatesh,D.N., 2006, Human Resource Management, Oxford

University Press, New Delhi.

 Aswathappa, K., 2008, Human Resource Management , Tata Mc Graw-Hill,

New Delhi.

Amity Directorate of Distance & Online Education