Industrial relation

Industrial relation

1. Industrial relations

2. INDUSTRY
IndustrialDisputesAct1947definesanindustryas
anysystematicactivitycarriedonbyco-operation
betweenanemployerandhisworkmenforthe
production,supplyordistributionofgoodsor
serviceswithaviewtosatisfyhumanwantsor
wisheswhetherornotanycapitalhasbeeninvested
forthepurposeofcarryingonsuchactivity;orsuch
activityiscarriedonwithamotivetomakeanygain
orprofit.Thus,anindustryisawholegamutof
activitiesthatarecarriedonbyanemployerwith
thehelpofhisemployeesandlaboursforproduction
anddistributionofgoodstoearnprofits

3. Employer
Anemployercanbedefinedfromdifferent
perspectivesas:-
apersonorbusinessthatpaysawageorfixedpayment
tootherperson(s)inexchangefortheservicesofsuch
persons.
apersonwhodirectlyengagesaworker/employeein
employment.
anypersonwhoemploys,whetherdirectlyorthrough
anotherpersonoragency,oneormoreemployeesin
anyscheduledemploymentinrespectofwhich
minimumratesofwageshavebeenfixed.

4. Employee
•Employee is a person who is hired by another person or
business for a wage or fixed payment in exchange for
personal services and who does not provide the services as
part of an independent business.
•An employee is any individual employed by an employer.
•A person who works for a public or private employer and
receives remuneration in wages or salary by his employer
while working on a commission basis, piece-rates or time
rate.
•Employee, as per Employee State Insurance Act 1948, is
any person employed for wages in or in connection with
work of a factory or establishment to which the act applies.

5. Inordertoqualifytobeanemployee,underESIAct,1948a
personshouldbelongtoanyofthecategories:Thosewhoare
directlyemployedforwagesbytheprincipalemployerwithin
thepremisesoroutsideinconnectionwithworkofthefactory
orestablishment.
thoseemployedforwagesbyorthroughanimmediate
employerinthepremisesofthefactoryorestablishmentin
connectionwiththeworkthereof
thoseemployedforwagesbyorthroughanimmediate
employerinconnectionwiththefactoryorestablishment
outsidethepremisesofsuchfactoryorestablishmentunder
thesupervisionandcontroloftheprincipalemployerorhis
agent.
employeeswhoseservicesaretemporarilylentorletonhire
totheprincipalemployerbyanimmediateemployerundera
contractofservice(employeesofsecuritycontractors,labor
contractors,housekeepingcontractorsetc.comeunderthis
category).

6. Definition of IR
Industrial relations include the whole range of relations
between workers , managers and government which determine
the conditions under which work is done in all types of
enterprise.(An organization created for business ventures)
‘Managers’ are those who have the responsibility for the work of
others in the organization
‘Workers’ are those for whose work managers are responsible
‘Government’ directly legislate certain terms of employment
and regulate the interaction of managers and workers in varying
degrees

7. Industrial relations
Industrial relations commonly denotes “employee-employer relations”
Industrial relations are born out of employment relationship in an
industrial setting
Industrial relations with people who are the base of the industry

8. Objectives of Industrial relations
To enhance economic status of worker
To avoid industrial conflicts and their consequences
To extend and maintain industrial democracy
To provide an opportunity to the worker to have a say in the
management decision making
To regulate production by minimizing conflicts
To provide forum to the workers to solve their problems through
mutual negotiations and consultations with management
To encourage and develop trade union in order to develop workers
collective strength
To boost the discipline and morale of workers

9. Nature of Industrial Relations
IR arise out of employer employeerelations
IR is a web of rules: formed by the interaction of Govt, industry & labor
IR is multi dimensional: influenced by complex set of institutional. economic &
technological factors
IR is dynamic and changing: keep pace with employee expectations, trade
unions, employer associations and other economic and social institutions of
society
IR is characterized by forces of conflict and compromise. Individual differences
and disagreements resolved through constructive means.
Government influences and shapes IR: with its laws, rules, agreements through
executive and judicial machinery
Scope of IR is very wideas it covers grievances, disciplinary measures ethics,
standing orders, collective bargaining, participatory schemes and dispute
settlement mechanism etc
Interactive and consultative in nature: in resolving conflict ,controversies and
disputes between labor and management.

10. SCOPE OF IR
Management –Union relationship
Employer –Employee relationship
Relationship amongst various groups of
employees
Effect of extraneous factors like state,
socio-political-economic factors on
workplace relationships

11. Therearethreemajorsplayersin
industrialrelations
1.Management/employers
2.Labour/workers/employees
3.Government/regulator
Tomaintainharmoniousrelationsbetweenallthreemajorplayers.
Tocontributetoeconomicprosperityofthecountry.

12. Three actors to IR
Employee
Employer
Government

13. Employee
The employee see IR as
Improve their condition of employment
Views in any grievances
Exchange view and ideas with management
Share in decision making

14. Trade Unions
ToredressthebargainingpowerofIndividualworker.
Tosecureimprovedtermsandconditionsofemployment.
Tosecureimprovedstatusfortheworkerinhisorherwork.

15. Employer
TheemployerseeIRas
Creatingandmaintainingemployeemotivation
Obtainingcommitmentfromworkforce
Achievinghighlevelsofefficiency
Negotiatingtermsandconditionsofemployment

16. Government
Thegovt.regulatestherelationshipbetweenthe
managementandthelabourandseekstoprotectthe
interestofboththegroups.
Theauthorityofthecourtstosettlelegaldisputes.

17. Conditions for Good Industrial
Relations
History of industrial relations (harmonious or rivalry)
Economic satisfaction of workers (basic survival need)
Enlightened and responsible labor unions
Negotiation skills and attitude of management and workers (varying backgrounds, must
possess empathy)
Legislation :Govt intervention
Social and psychological satisfaction : supportive climate along with economic rewards

18. Cause of Poor Industrial Relations
Uninteresting nature of work : due to automation –role of worker reduced
Political nature of unions : : inter union rivalry, multiple unions,political parties
involvement
Poor wages : Inequity in wages , complicated wage system
Occupational instability : donot want changes in the job-fear or insecurity
Effects
Resistance to change, frustration and social cost , multiplier effect (total loss)

19. IR covers some of the following Areas
Collective Bargaining : Negotiation about working conditions and terms of employment between
employer and employee to reach an agreement
Role of management, unions and government
Machinery for resolution of industrial disputes :works committee , Concillatory officer( settlement)
,labor courts etc.
Grievances,labor welfare and security
Trade unions,workers participation
Labour legislation : Internal social responsibility to provide some basic amenities apart from pay,
protect interest of workers, social welfare

20. Approaches to IR

21. Pluralistic
Co-operation
Conflict
Authoritarian
Paternalism
Unitary
Human
resource
management
Systems
Evolution
Revolution
Marxist
Control of
the labour
process
Input Conversion Output
Conflict
(differences)
Institutions
and
processes
Regulation
(rules)
Approaches to organisations
Approaches to industrial relations
Social action
Wider approaches to industrial relations
Approaches to industrial
relations
Labour market Comparative

22. Systems approach
Systems framework by John Dunlop
•Actors
•Environmental
contents
•Ideology
input
•bargaining
•Conciliation
•arbitration
process
•Rules
•settlement
output

23. Actors: managers, workers and government agencies
Actors influenced by several forces in environment –
technology, markets and power relation in society
Ideology: Though there is conflict among the actors but
there is also a shared ideology and compatibility of
ideas which help to resolve conflict by framing rules
The network or web of rules

24. Unitary approach
Inunitarism,theorganizationisperceivedasan
integratedandharmonioussystem,viewedasone
happyfamily.Acoreassumptionofunitaryapproachis
thatmanagementandstaff,andallmembersofthe
organizationsharethesameobjectives,interestsand
purposes;thusworkingtogether,hand-in-hand,towards
thesharedmutualgoals.Furthermore,unitarismhasa
paternalisticapproachwhereitdemandsloyaltyofall
employees.Tradeunionsaredeemedasunnecessary
andconflictisperceivedasdisruptive.

25. Fromemployeepointofview,unitaryapproachmeansthat:
Workingpracticesshouldbeflexible.Individualsshouldbe
businessprocessimprovementoriented,multi-skilledandready
totacklewithefficiencywhatevertasksarerequired.
Ifaunionisrecognized,itsroleisthatofafurthermeansof
communicationbetweengroupsofstaffandthecompany.
Theemphasisisongoodrelationshipsandsoundtermsand
conditionsofemployment.
Employeeparticipationinworkplacedecisionsisenabled.This
helpsinempoweringindividualsintheirrolesandemphasizes
teamwork,innovation,creativity,discretioninproblem-solving,
qualityandimprovementgroupsetc.
Employeesshouldfeelthattheskillsandexpertiseofmanagers
supportstheirendeavours.

26. Fromemployerpointofview,unitaryapproachmeansthat:
Staffingpoliciesshouldtrytounifyeffort,inspireandmotivate
employees.
Theorganization'swiderobjectivesshouldbeproperly
communicatedanddiscussedwithstaff.
Rewardsystemsshouldbesodesignedastofostertosecure
loyaltyandcommitment.
Linemanagersshouldtakeownershipoftheirteam/staffing
responsibilities.
Staff-management conflicts-fromtheperspectiveoftheunitary
framework-areseenasarisingfromlackofinformation,
inadequatepresentationofmanagement'spolicies.
Thepersonalobjectivesofeveryindividualemployedinthe
businessshouldbediscussedwiththemandintegratedwiththe
organization’sneeds.

27. Pluralistic approach
Inpluralismtheorganizationisperceivedasbeingmadeupof
powerfulanddivergentsub-groups-managementandtrade
unions.Thisapproachseesconflictsofinterestand
disagreementsbetweenmanagersandworkersoverthe
distributionofprofitsasnormalandinescapable.Consequently,
theroleofmanagementwouldleanlesstowardsenforcingand
controllingandmoretowardpersuasionandco-ordination.Trade
unionsaredeemedaslegitimaterepresentativesofemployees.
Conflictisdealtbycollectivebargainingandisviewednot
necessarilyasabadthingandifmanagedcouldinfactbe
channelledtowardsevolutionandpositivechange.Realistic
managersshouldacceptconflicttooccur.Thereisagreater
propensityforconflictratherthanharmony.

28. Pluralist approach
Basedonassumptionthatorganizationiscomposedofindividualswho
makeupdistinctsectionalgroups,eachwithitsowninterests,
objectivesandleadership.
Recognitionofdiverginginterestsbetweenworkers,employersand
government
Conflictisthetotalrangeofbehaviourand
attitudesthatexpressoppositionanddivergentorientationanditis
perceivedasbothrationalandinevitable.
Butfocusisonframeworkofregulatingwork
relationships-balanceofpowerbetweenmanagementandtradeunions
Conflictisnecessary,butitcanbeandneedstobemanagedand
resolved

29. Theimplicationsofthisapproachinclude:
Thefirmshouldhaveindustrialrelationsandpersonnelspecialists
whoadvisemanagersandprovidespecialistservicesinrespectof
staffingandmattersrelatingtounionconsultationand
negotiation.
Independentexternalarbitratorsshouldbeusedtoassistinthe
resolutionofdisputes.
Unionrecognitionshouldbeencouragedandunion
representativesgivenscopetocarryouttheirrepresentative
duties
Comprehensivecollectiveagreementsshouldbenegotiatedwith
unions

30. Marxist Perspective
Thisviewofindustrialrelationsisabyproductofatheoryof
capitalistsocietyandsocialchange.Marxarguedthat:
Weaknessandcontradictioninherentinthecapitalistsystem
wouldresultinrevolutionandtheascendancyofsocialismover
capitalism.
Capitalismwouldfostermonopolies.
Wages(coststothecapitalist)wouldbeminimizedtoa
subsistencelevel.
Capitalistsandworkerswouldcompete/beincontentiontowin
groundandestablishtheirconstantwin-losestruggleswouldbe
evident.

31. Marxist Approach
Ifsharedideologythanwhyisthatconflictneverceases.
Conflictscanneverceaseuntilcapitalacceptsthatlaborhasrightto
anequalshareinpower.
Productionsystemisprivatelyownedandismotivatedbyprofit.
IRisthestudyof‘processes’ofcontroloverworkrelations,Itsabout
whocontrols,how,whatandwhy.

32. Thisperspectivefocusesonthefundamentaldivisionof
interestbetweencapitalandlabour,andseesworkplace
relationsagainstthisbackground.Itisconcernedwiththe
structureandnatureofsocietyandassumesthatthe
conflictinemploymentrelationshipisreflectiveofthe
structureofthesociety.Conflictisthereforeseenas
inevitableandtradeunionsareanaturalresponseof
workerstotheirexploitationbycapital.

33. OTHER APPROACHES OF INDUSTRIAL RELATIONS
( DIFFERENT SCHOOLS OF THOUGHT )
PSYCHOLOGICAL APPROACH
Differences in the perceptions of labor and management wrt factors influencing their relations i.e. wages. Benefits, servicesand
working conditions etc
Dissatisfaction compels workers to turn aggressive and resort to strike, lockouts and gherao etc.
SOCIOLOGICAL APPROACH
Sociological factors such as value system, customs and traditions etyc affect the relations between labor and management
HUMAN RELATIONS APPROACH
Human behavior is influenced by feelings, sentiments and attitudes. As per this approach humans are motivated by variety of
social and psychological factors
like economic and non-economic awards to be used.
GIRI APPROACH
Collective bargaining and joint negotiations be used to settle disputes between labor and management. Outside interference to
be avoided.
GANDHIAN APPROACH
worker's right to strike but cautioned that this right be exercised in just cause and in a peaceful and non-violent manner for
minimum wages etc like ‘satyagrah’-Non violent non-cooperation

34. Trusteeship
Proposed by Mahatma Gandhi
Company accepts its total responsibility and management
role becomes that of balancing all the claims upon the
company.
Inherent responsibility to its consumers, workers,
shareholders, and the community
Greater good

35. Employment Relations
Dunlop’s model

36. Dunlop's model identifies three key factors to be considered in conducting an
analysis of the management-labour relationship.
Environmental or external economic, technological, political, legal and social
forces that impact employment relationships.
Characteristics and interaction of the key actors in the employment
relationship: labor, management, and government.
Rules that are derived from these interactions that govern the employment
relationship.

37. Oneofthesignificanttheoriesofindustriallaborrelationswasputforthby
JohnDunlopinthe1950s.AccordingtoDunlopindustrialrelationssystem
consistsofthreeagents–managementorganizations,workersand
formal/informalwaystheyareorganizedandgovernmentagencies.These
actorsandtheirorganizationsarelocatedwithinanenvironment–definedin
termsoftechnology,laborandproductmarkets,andthedistributionofpower
inwidersocietyasitimpactsuponindividualsandworkplace.Withinthis
environment,actorsinteractwitheachother,negotiateanduse
economic/politicalpowerinprocessofdeterminingrulesthatconstitutethe
outputoftheindustrialrelationssystem.Heproposedthatthreeparties—
employers,laborunions,andgovernment--arethekeyactorsinamodern
industrialrelationssystem.Healsoarguedthatnoneoftheseinstitutions
couldactinanautonomousorindependentfashion.Insteadtheywere
shaped,atleasttosomeextent,bytheirmarket,technologicalandpolitical
contexts.
Thusitcanbesaidthatindustrialrelationsisasocialsubsystemsubjectto
threeenvironmentalconstraints-themarkets,distributionofpowerinsociety
andtechnology.

38. Dunlopemphasizesthecoreideaofsystemsbysayingthatthe
arrangementsinthefieldofindustrialrelationsmayberegarded
asasysteminthesensethateachofthemmoreorlessintimately
affectseachoftheotherssothattheyconstituteagroupof
arrangementsfordealingwithcertainmattersandarecollectively
responsible for certain results”.
Ineffect-Industrialrelationsisthesystemwhichproducesthe
rulesoftheworkplace.Suchrulesaretheproductofinteraction
betweenthreekey“actors”–workers/unions,employersand
associated organizations and government
TheDunlop’smodelgivesgreatsignificancetoexternalor
environmentalforces.Inotherwords,management,labor,and
thegovernmentpossessasharedideologythatdefinestheirroles
withintherelationshipandprovidesstabilitytothesystem.