MANAGEMENT OF

INDUSTRIAL RELATIONS
UNIT - II
INDUSTRIAL RELATIONS AND THE STATE,
LEGAL FRAME WORK OF INDUSTRIAL
RELATIONS

Industrial Relations
Definition:
According to J.T. Dunlop industrial relations are
the complex interrelations among managers,
workers and agencies of the governments.
According to Dale Yoder industrial relations is
the process of management dealing with one
or more unions with a view to negotiate and
subsequently administer collective bargaining
agreement or labor contract

What is a state.?
A set of institutions, comprising the legislature,
the executive, central administration, the
judiciary, the police and local government in
it.
It is the institutional system of political domination
with a monopoly over the legitimate use of
violence and over taxation and money supply
(Hill 1981: 239)

What is a state.?
The State has the monopoly of physical violence
in society (Castells 2000)
As well as underpinning relationships of power
through this and through legislation it embodies
symbolic
violence
through
ideology
conditioning human values and shaping
perceptions and notions of legitimacy (Gramsci
and hegemonic power)

Need of State Intervention in

Industrial Relations
In a developing country like India, state intervention has
been deemed necessary because:
The labor organizations were relatively weak.
When the labor situation worsens or the law and order
situation gets out of hand, the state cannot be
expected to be a silent spectator. As the guardian of
the people and of the economy of the country, it has to
intervene and adopt industrial relations policies which
are likely to ensure social justice and industrial peace.

Need of State Intervention in

Industrial Relations
The directive principles of the constitution enjoin upon the state
to establish a welfare state and to look after the interests of the
weakest sections of society, including the handicapped.
The federal (central) nature of the constitution has made it
imperative (very important) for the state to intervene in labor
matters to ensure smooth and continuing production.
Therefore, to meet the above stated demands for the intervention of the
state, the launching of the various five year plans is done since 1951,
which are aimed at bringing about an all-round development of the
country, set certain targets to be achieved in the field of production.

Role of state in industrial relations

It was considered essential that industrial / economic
development should progress smoothly during the planning
era. The implementation of the targets necessitated
industrial peace, i.e.

No strikes
No lockouts
No stoppages of work so that production can go on unhampered.

In the circumstances mentioned above, state intervention to

bring about a settlement of industrial disputes has become
essential.

Strikes

Strikers gathering in Tyldesley in the 1926 General Strike in the U.K.

LEGAL FRAME WORK

OF
INDUSTRIAL RELATIONS

Industrial Relations Act, 1946

An act to make further and better provision for promoting
harmonious relations between workers and their employers
and for this purpose to establish machinery for regulating
rates of remuneration and conditions of employment and for
the prevention and settlement of trade disputes, and to
provide for certain other matters connected with the matters
aforesaid. [27th August, 1946.]
This Act shall come into operation on the day
appointed for the purpose by order of the Minister.

Industrial Relations Act, 1946 (ctd)

Interpretation:
In this Act, unless the context otherwise requires
"award" means an award made by a Court;
"collective agreement" means an agreement as to industrial
matters;
"Commissioner" means the Commissioner for Labour appointed
under section 3 of the Employment Act (Cap. 91),
and includes a Deputy Commissioner for Labour,
a Principal Assistant Commissioner for Labour and an Assistant
Commissioner for Labour under that Act;

Industrial Relations Act, 1946 (ctd)

Interpretation:
In this Act, unless the context otherwise requires

"conciliation officer" means a conciliation officer

appointed under section 28;
"Court" means an Industrial Arbitration Court
established under section 3;

Industrial Relations Act, 1946 (ctd)

Interpretation:
In this Act, unless the context otherwise requires

The expression the Minister means the Minister for Industry and Commerce;

The word prescribed means prescribed by regulations made by the Minister

under this Act;

The expression registered joint industrial council has the meaning given to it
by section 59 of this Act;

The expression trade dispute means any dispute or difference between

employers and workers or between workers and workers connected with the
employment or non-employment, or the terms of the employment, or with the
conditions of employment, of any person;

Industrial Relations Act, 1946 (ctd)

Interpretation:
In this Act, unless the context otherwise requires
the expression trade union means a trade union which is the holder of a
negotiation licence granted under the Trade Union Act, 1941 (No. 22 of 1941).

(1) In this Act (except Part VI) the word worker means any person
of the age of fourteen years or upwards who has entered into or
works under a contract with an employer whether the contract be for
manual labour, clerical work, or otherwise, be expressed or implied,
oral or in writing, and whether it be a contract of service or of
apprenticeship or a contract personally to execute any work or
labour, other than

Industrial Relations Act, 1946 (ctd)

(a) a person who is employed by or under the State,

(b) a teacher in a secondary school, or
(c) a teacher in a national school, or
(d) a person who is employed by a local authority in any office or
employment, or
(e) an officer or servant of a vocational education committee, or
(f) an officer or servant of a committee of agriculture, or ( g) an
officer of a school attendance committee, or
(h) an agricultural worker, within the meaning of the Agricultural
Wages Act, 1936 (No. 53 of 1936).

Industrial Relations Act, 1946 (ctd)

For the purposes of this section, each of the following bodies
(whether corporate or unincorporated) shall be a local authority
(A)
a council of a county,
a corporation of a county or other borough,
a council of an urban district,
a public assistance authority,
the commissioners of a town,
a port sanitary authority,
(B)
a committee or joint committee or board or joint board appointed
(whether before or after the passing of this Act) by or under statute
to perform the functions or any of the functions of one or more of
the bodies mentioned in paragraph (a) of this subsection, and

Industrial Relation Policy

Prior to 1991, the industrial relations system in India
sought to control conflicts and disputes through
excessive labor legislations.
These labor laws were protective in nature and covered
a wide range of aspects of workplace industrial relations
like laws on health and safety of labors, layoffs and
retrenchment policies, industrial disputes and the like.
The basic purpose of these laws was to protect labors.
However, these protectionist policies created an
atmosphere that led to increased inefficiency in firms,
over employment and inability to introduce efficacy.

Industrial Relation Policy (ctd)

With the coming of globalization, the 40 year old policy of

protectionism proved inadequate for Indian industry to
remain competitive as the lack of flexibility posed a serious
threat to manufacturers
With the advent of liberalization in1992, the industrial
relations policy began to change. Now, the policy was tilted
towards employers.
Employers opted for workforce reduction, introduced
policies of voluntary retirement schemes and flexibility in
workplace also increased.
Thus,
globalization
brought
major
changes
in
industrial relations policy in India. The changes can be
summarized as follows:

Industrial Relation Policy (ctd)

Collective bargaining in India has mostly been

decentralized, but now in sectors where it was not so, are
also facing pressures to follow decentralization.
Some industries are cutting employment to a significant
extent to cope with the domestic and foreign competition
e.g. pharmaceuticals.
On the other hand, in other industries where the demand
for employment is increasing are experiencing employment
growths.
In the expansionary economy there is a clear shortage of
managers and skilled labor.

Industrial Relation Policy (ctd)

The number
increased and
of the unions.

of local
there is a

and enterprise level

significant reduction in

unions has
the influence

Under pressure some unions and federations are putting up a

united front e.g. banking.
Another trend is that the employers have started to push for
internal unions i.e. no outside affiliation.
HR policies and forms of work are emerging that include,
especially in multi-national companies, multi-skills, variable
compensation, job rotation etc.

Industrial Relation Policy (ctd)

These new policies are difficult to implement in place of

old practices as the institutional set up still needs to be
changed.
HRM is seen as a key component of business strategy.
Training and skill development is also receiving
attention in a number of industries, especially banking
and information technology.

Labor Law
Also called labor law or employment law.
It is the body of
laws,
administrative rulings, and precedents which
address the legal rights of, and
restrictions on, working people and their
organizations.

it mediates many aspects of the relationship between

trade unions, employers and employees.

Categories of labour law

categories of labour law

collective labour law

relates to the
tripartite relationship
between
employee,
employer and
union

individual labour law

It concerns
employees' rights at
work and through the
contract for work.

Individual labour law

It consists the following aspects
Contract of employment
Minimum wage
Working time
Health and safety
Anti-discrimination
Unfair dismissal
Child labour

Child labour

Two girls wearing banners in Yiddish and English with the slogan "Abolish child
slavery!!" at the 1909 May Day parade in New York City

Collective labour law

Collective labour law concerns the tripartite
relationship between employer, employee and
trade unions. It contains the legal aspects
regarding

i) Trade unions
ii) Strikes
iii) Pickets
iv) Workplace involvement
v) Co-determination

Trade unions, sometimes called "labour unions"

International Labour Organization

The International Labour Organization (ILO), whose
headquarters are in Geneva, is one of the oldest
surviving international bodies, and the only surviving
international body set up at the time of the League of
Nations following the First World War.
Its guiding principle is that "labour is not a commodity"
to be traded in the same way as goods, services or
capital, and that human dignity demands equality of
treatment and fairness in dealing within the workplace.