MARATHA VIDYA PRASARAK SAMAJ

College of Social Work

Specialization
Human Resource Management

Assignment topic
Industrial Relations

Subject Teacher’s Name

Prof. P.B. Pawar

Student’s name
Sonal S. Singh

Roll no.
32
 Index

Sr.No. Particulars
1 Introduction of IR
2 Meaning of IR
3 Definition of IR
4 Features of IR
5 Scope of IR
6 Significance
7 Causes of Poor IR
8 Approaches of IR
9 IR Strategy
10 Evolution of IR in India
11 Principles of Good IR
12 Parties to IR
 Introduction
Over the years, the relationship between employer and employee has changed from
master and servant to one of the contract of employment between management (as
employer) and a worker (as employee). This contract covers rights and obligations
of both sides in respect of nature of working conditions, discipline, wages and
benefits, security of employment, nature of work to be performed, productivity and
social security etc. The Industrial relations are often viewed as constraints which
limit the ability of the management. But neglect of industrial relations function by
employer can lead to problems like indiscipline, lack of mutual trust, frustration
and alienation of workers, coercive practices by trade unions.

In simple terms, Industrial Relations deals with the worker employee relation in
any industry Government has attempted to make Industrial Relations more health
by enacting Industrial Disputes Act, 1947, to solve the dispute and to reduce the
retency of dispute. This in turn improves the relations.

Meaning of Industrial Relations

According to Dale Yoder, industrial relations is collective relationship between
employees‟ (trade) union and employer which grows out of employment. The
concept also means the relationship between employees and management in the
day-to-day working of industry. The subject of industrial relations includes the
distinct areas.

 Individual relations and joint consultation between employers and workers at

work place.
 Collective relations between employers and their organizations and the trade
unions, and
 The part played by the state (govt.) in regulating these relationships.

Basically, IR sprouts out of employment relation. Hence, it is broader in meaning

and wider in scope. IR is dynamic and developing socio-economic process.
 Definition of Industrial Relations
Armstrong has defined IR as “IR is concerned with the systems and procedures
used by unions and employers to determine the reward for effort and other
conditions of employment, to protect the interests of the employed and their
employers and to regulate the ways in which employers treat their employees.

In the opinion of V.B. Singh, “Industrial relations are an integral aspect of social
relations arising out of employer-employee interaction in modern industries which
are regulated by the State in varying degrees, in conjunction with organized social
forces and influenced by the existing institutions. This involves a study of the
State, the legal system, and the workers‟ and employers‟ organization at the
institutional level; and of the patterns of industrial organisation (including
technology), compensation of labour force, and a study of market forces at all the
economic level.”

Features of Industrial Relations

Important features of industrial relations are as follows-

 Industrial Relations are outcome of employment relationship in an industrial

enterprise.
 As a regulated relationship the focus of it is on rule-making by participants
so that there may be uninterrupted production.
 The work situation may provide methods of adjustment and co-operation
with each other.
 The government agencies involve in shaping the industrial relation through
laws, rules and awards.
 The important actor parties of industrial relations are employees or their
trade unions, employers and their association s and government.
 Objectives of Industrial Relations
The objectives of Industrial Relations are:

 Development and promotion of harmonious labour-management relations.

 Maintenance of Industrial peace, goodwill and avoidance of Industrial
strike- the conflicts.
 To safeguard interests of labour, management, industry and national
economy as a whole.
 Establish industrial democracy based on labour partnership in management.
 To raise productivity level.
 To boost the discipline and morale of workers
 Industrial prosperity is largely dependant on good industrial relations.
 To improve their problems through mutual negotiations and consultation
with the management.
 Avoid unnecessary interference of the government, as far as possible and
practicable, in the matters of relationship between workers and management.
 Socialize industrial activity by involving the government participation as an
employer.
 Raise productivity in the organization to curb the employee turnover and
absenteeism.

Scope of Industrial Relation

Scope of Industrial relation is as given below:

1. Labour Relations, i.e. relations between labour union and management.

2. Employer-employee relations i.e. relations between management and
employees.
3. The role of various parties‟ viz, employers, employees, and state in
maintaining industrial relations.
4. The mechanism of handling conflicts between employers and employees, in
case conflicts arise.
The main aspects of Industrial relations can be identified as follows-

1. Promotion and development of healthy labour- management relations.

2. Maintenance of Industrial peace and avoidance of industrial strike.
3. Development and growth of industrial democracy.

Significance of Industrial Relations

Maintenance of harmonious industrials relations is on vital importance for the
survival and growth of the industrials enterprise. Good industrial relations in
increased efficiency and hence prosperity, reduced turnover and other tangible
benefits to the organisations. The significance of industrial relations can be
summarized as below-

 It establishes industrial democracy- Industrial relations means settling

employee‟s problems through collective bargaining, mutual co-operation
and mutual agreement amongst the parties, i.e, management & employees‟
unions. This helps in establishing industrial democracy in the organization
which motivates them to contribute their best to the growth and prosperity of
the organization.
 It contributes to economic growth and development- Good industrial
relations lead to increased efficiency and hence higher productivity and
income. This will result in economic development of the economy.
 It improves morale of the work place- Good industrial relations, built-in
mutual co-operation and common agreed approach motivate one to
contribute one‟s best, result in higher productivity and hence income, give
more job satisfaction and help improve the morale of the workers.
 It ensures optimum use of scare resources- Good and harmonious
industrial relations create a sense of belongingness and group-cohesiveness
among workers, and also a congenial environment resulting in less industrial
unrest, grievances and disputes. This will ensure optimum use of resources,
both human and materials, eliminating all types of wastage.
 It prompts enactment of sound labour legislation- Industrial relations
necessitate passing of certain labour laws to protect and promote the welfare
 of labour and safeguard interests of all the parties against unfair means or
practices.
 It facilitates change- Good industrial relations helps in improvement of co-
operation, team work, performance and productivity and hence in taking full
advantages of modern inventions, innovations and other scientific and
technological advances. It helps the work force to adjust themselves to
change easily and quickly.

Causes of Poor Industrial Relations

Perhaps the main cause or source of poor industrial relations resulting in
inefficiency and labour unrest is mental laziness on the part of both management
and labour. Contempt on the other part of the employers towards the workers is
another major cause. However, the following are briefly the causes of poor
industrial relations.

 Mental inertia on the part of management and labour.

 An intolerant attitude of contempt towards the workers on the part of
management.
 Inadequate fixation of wage or wage structure.
 Indiscipline
 Lack of human relations skill on the part of supervisors and other managers.
 Desire on the part of the workers for higher bonus or DA and the
corresponding desire of the employers to give as little as possible.
 Inappropriate introduction of automation without providing the right climate.
 Unduly heavy workloads
 Inadequate welfare facilities
 Dispute on sharing the gains of productivity
 Unfair labour practices, like victimization and undue dismissal.
 Retrenchment, dismissals and lock-outs on the part of management and
strikes on the part of the workers.
 Inter-union rivalries; and
  General economic and political environment, such as rising prices, strikes by
others, and general indiscipline having their effect on the employees‟
attitudes.
 Unhealthy working conditions.

Approaches to Industrial Relations

Industrial relations is associated with regulating of activity of employment. Two
terms industrial relations and employee relations are inter-changeably used. While
industrial relation is traditional term reflects unionized manual workers within
manufacturing sector. The other term employee relation is used for less unionized
white collar employment in service and commercial sectors.

Three different approaches in IR are:

 Unitary approaches legitimate the interests of management and employees

as being same and emphasizes management‟s role of governing in the best
interests of the organization, as a whole.
 Pluralistic perspective refers to separation of ownership and workers and
acceptance of conflict in both spheres. Role of trade unions is legitimate and
resolution of conflict is through compromise and agreement.
 Radical markist perspective highlights class conflict without which
society will stagnate. It is between those who own capital and those who
supply their labour. There is imbalance and inequities in economy. Conflicts
can be resolved by changing society, so trade unions should develop
political awareness and activity.

Industrial Relations Strategy

Industrial relation activities are to contribute to overall industrial goals such as
productivity, labour peace and industrial democracy. Important areas of focus are-

 Optimising the interests of the employer and those of employees in fields

such as:
 Wage & Salary administration, retirement and medical benefits,
worker‟s compensation issues.
Career prospects, training and development, and
Discipline and redress of grievances, counseling
 Labour Management relations to be based on union recognition, collective
agreements and settling industrial disputes and to be regulated through legal
structure. Managing of IR by collaborative problem-solving approach.
 In global business to maintain high productivity for survival of organization.
Some areas to focus are- upgrading technology and production methods, re-
training and re-deployment of surplus labour.
 Having industrial democracy, i.e. workers‟ involvement in decision-making
process.
 New collective bargaining (CB) approach to reach a win 1-win solution.
Both parties to collaborate to a solution acceptable to each of them. The goal
is to change negotiation from a zero-sum game to a positive-sum game.

Evolution of Industrial Relations in India

The post reform decade

(1992 - till now)

The productivity-, Efficiency-, Quality orientation phase

(1981-1991)

Conflict Ridden Interventionist Phase

(1967-1980)

The Consolidation Phase

(1956-1965)

The proactive phase

 (1947-1956)

The Proactive Phase (1947-56; 1st & 2nd Five Year Plans)

 Import substitution industrialization

 National Capitalism
 Economy grows @2%-3%/year
 Formation of large employment- intensive public enterprises.
 Largely centralized bargaining with static real wages, relative industrial
peace.

The Consolidation Phase (1956-1965)

 There should be no lockout or strike without notice.

 No unilateral actions should be taken in connection with any industrial
matter.
 There should be no recourse to go slow tactics
 No deliberate damage should be caused to plant or property.
 Awards and agreements should be speedily implemented.

Conflict Ridden Interventionist phase (1967-80; 4th & 5th Five Year Plans)

 Economic stagnation
 Economy grows at @ 2%/year: two oil price shocks
 Considerable slowdown in employment growth & declining real wages.
 Crisis in Industrial Relation System- Massive strikes and industrial conflict,
multiple unionism & decline in strength.
 Government losing control over the IR system.

The Productivity-Efficiency- Quality- Orientation Phase (1981-91; 6th &7th

Five Year Plans)

 Initial domestic economic liberalization; economy grows @5.7%/year.

 Regional variation in economic development increases.
  Variation in wage growth: skilled vs. unskilled, labour productivity
increases, period of “jobless growth”.
 Rise of „independent‟ enterprise unionism.

The Post-reform decade, (1992- till now)

 Stabilization & structural adjustment reforms- Economy grows @6.2%-

6.5%.
 In the Five years (2004-09) growing @7%-8% per year.
 Regional variation increases massively.
 Maximum growth in services: IT, IT-enabled services, “Hotels, Trade &
Restaurants”, but also in autos and ancillaries; more recently in overall
manufacturing.

Principles of Good Industrial Relations

 The willingness and ability of management and trade unions to deal with the
problems freely, interdependently and with responsibility.
 Recognition of collective bargaining.
 Desirability of associations of workers and management with the
Government while formulating and implementing policies relating to general
economic and social measures affecting industrial relations.
 Fair redressal of employee grievances by the management
 Providing satisfactory working conditions and payment of fair wages.
 Introducing a suitable system of employees education and training.
 Developing proper communication system between management and
employees.
 To ensure better working conditions, living conditions and reasonable
wages.
 To develop employees to adapt themselves for technological, social and
economic changes.
  To make positive contributions for the economic development of the
country.

Parties to IR

State

Industrial
Relations

Employer Employee

Three Actors to Industrial Relations

 Employees
 Employer
 State
 Employees- Among the participants to IR, employees are considered as the
most affected one by the IR system prevalent in an organization. Employees
with their various characteristics such as their commitment to the work and
the organization, their educational and social background, their attitudes
 towards the management and so on affect and are affected by the system of
Industrial Relations.
Role of Employee-
 To redress the bargaining advantage on one-on-one basis
 To secure better terms and conditions for their members
 To obtain improved status for that worker in his/her work
 To increase implementation of democratic way of decision-making at
various levels.
 Employer- Employer is the second party to IR. In the corporate
organization, employer is represented by the management. Hence
management becomes responsible to various stakeholders in an organization
including employees.
Role of Employer-
 Creating & sustaining employee motivation
 Ensuring commitment from employees.
 Achieving higher levels of efficiency.
 Negotiating terms and conditions of employment with Trade Union
leaders.
 Sharing decision-making with employees.
 Government- The role of government in the matter of industrial relations
has been changing along with the changes in Industrial environment and
management perspective.
The IR matters were left to be settled by the employees and
employers. But, towards the end of the 19th century, the attitude of the
government in the changed conditions of conflicts between employees and
employers, changed to some kind of intervention in the matter of IR.
In due course of realization, government intervention became a reality.
As a day, govt intervention has widespread in HR matters. In India, govt
tries to regulate the relationship of employees and employers, and also keeps
an eye on both groups to keep each in line. This relationship is enforced and
maintained through labour courts, industrial tribunals, wage boards,
investigating and enquiry committees, etc.

Role of Government
 Labour policies
 Labour laws
 Industrial Tribunals
 Wage boards
 Industrial Relations Policy
Reference

 Industrial Relations and Labour Legislation in India

Dr. R. Hiremani Naik
 Internet