IR Models.pdf

IR Models

1. EMPLOYEE RELATIONS
MBA 4 H01
Dr.Amir Jafar
Associate Professor
Department of Business Administration
Aligarh Muslim University Centre, Jangipur, Murshidabad

2. Unit I: Introduction to Industrial Relations
•Scope & Objectives of IR
•Dunlop’s Model of IR
•Issues & problems of IR
•Changing Paradigm
•Preventive Machinery of IR
•Settlement Machinery of IR

3. Introduction
•AsperlabourdictionaryIndustrialRelations(IR)meanstherelationbetweenemployersand
employeesinindustry.
•DaleYoder-IRistherelationshipbetweenmanagementandemployees,oramongemployees
andtheirorganization,thatcharacterizeorgrowoutofemployment.
•JohnTDunlop-IRisinterrelationamongmanagers,workers,andagenciesofgovernment
•TherearethreepartiesinIR
1.Employee, employee representatives or union
2.Employer, employers’ associations or union
3.Government

4. DOMINANT ASPECTS OF INDUSTRIAL RELATIONS
Therearetwoimportantaspectsoftheindustrialrelationssceneinamodernindustrialsociety:
(1)cooperation,and(2)conflict.
1.Cooperation
•Modernindustrialproductionisbaseduponcooperationbetweenlabourandcapital.
•Labourstandsfortheworkerswhomanthefactories,minesandotherindustrial
establishmentorservices.
•Capitalstandsfortheownersofbusinessenterpriseswhosupplythecapitalandownthefinal
product.
2.Conflict
• Conflict,likecooperationisinherentintheindustrialrelationssetupoftoday.
• Theprevailingindustrialunrest,thefrequencyofwork–stoppagesresultingeitherfrom
strikesorlock-outs,andtheslowingdownofproduction,aretheoccasionalexpressionalof
theever-presentandlatentconflictbetweenworkersandthemanagement.

5. Approaches to Industrial Relations
1.Economic Approach
•Fromtheinceptionstageoftradeunionism,theworkersandtheirorganisationhavebeenconcernedabout
protectionandpromotionoftheirmembers'economicinterest.
•Employer’saimwasminimisingcostandmaximisingprofit.
2.SociologicalApproach
•ConsiderIRasaproductofindustrialsociety
•Variouscomponentsofsocietylikesocialinstitution,association,valuesandstandards,customsandtradition,
beliefetc.havetheirimpactonIR.
3.PsychologicalApproach
•Itdevelopsfromperceptionofthepartiestothesameproblem.
•Perceptionmayrelatetoparticularsituation,personsorissue.
•Iftheperceptionofthepartiestothesamesubjectaresimilaroreasilyreconcilable,IRtendtobesmooth.
4.PoliticalApproach
•Therearetowperspectivea)Widerpoliticalperspectiveandb)Narrowerperspectiveofformationofgovernment
jointlybuemployerandtradeunionbymutualagreement.
•Narrowerperspective-thepowerstructureoftheunion-managementrelationshipisveryimportant.
•Power-structuremayberelatedtointernalpowerrelationshipwithinthemanagementandtradeunion
themselves,andalsobalancepowerbetweenthem.

6. Models of Industrial Relations
Dunlop’s Model
•Developed by Prof. John T. Dunlop of Harvard University.
•Also called system approach to IR
R=f[A,E,I]
R= Rules, A= Actors, E= Environment, I= Ideology
Rules-derivedfrominteractionsthatgoverntheemploymentrelationship.
Actors-Managementandhierarchyofmanagers,workersandhierarchyoftheir
organisationandspecialisedgovernmentandmutuallyagreednongovernmentagencies
concernedwithworkers,enterpriseandtheirrelationship.
Environment-externaleconomic,technological,political,legalandsocialforcesthat
influenceemploymentrelationships.
Ideology-philosophyorasystematisedbodyofbeliefsandsentimentsheldbytheactors.

7. Criticism of Dunlop’s Model
1.Noadequateattentionwaspaidtotheconflictaspectofindustrialrelations.
2.Emphasizedtheroleofthreeactorsincombinationintheformulationofrule.
3.Verylimitedapplicabilityinsmallsizedorganisation.
4.Doesnotprovideanswertotheimpactofthecreatedbyunionrivalriesandfactionalismin
theorganisation.
5.Doesnothavemuchapplicabilityinextraordinarysituationcreatedbywars,economic
crisisetc.
6.Didnotcoveredtheprocessesandprocedureinvolved,andthemannerinwhichrulesare
established.

8. IILS Model
•TheInternationalInstituteofLabourStudiesdevelopedthismodel.
•AccordingtothismodelIRhasfourdimensions.
1.Environment-conditionunderwhichindustriesorindustrialestablishmentsoperate.Example:
social,cultural,politicaletc.
2.Parties-state,workers’organisationsortradeunions,andemployersormanagerialhierarchies.
3.Process-negotiation,collaborationandresolutionofconflict.
•Innegotiation,theworkersandemployersmakejointefforttomakerules.
•Collaborationinvolvesjointdeterminationofissuesofmutualinterestinaspiritof
cooperation.
•Resolutionisdecisionofissuesofcontentionbetweenthepartiesintheformofawardor
settlement.
4.Rules-formedbydifferentauthoritiesconcerningtermsandconditionofemployment.

9. Criticism of IILS Model
•Thismodeldoesn’tclearlyexplaintheimpactofmulti-unionismandunionrivalries.
•Thismodeldoesn’tpresentconvincingassessmentoftheconditioninsmall-sizedundertaking
andunorganisedsector
•Classificationofenvironmentisbroad.Thismodeldoesn’texplainimpactofaparticular
factoroperatingundervariablecondition.
•Thismodeldoesn’tclearlyexplaintheimpactofextraordinarysituationlikewar,economic
crisis,politicalinstability,downsizingetc.ontheformationofrules.
•Thismodelissilentaboutbehaviouralaspectofindividual.

10. Development of Industrial Relations in India
•PriortothefirstWorldWar
•Therelationshipbetweenemployerandworkerwaslikemasterandservants
•BritishgovernmentintervenedinthefieldofIRtoprotecttheinterestemployers.
•FromthefirstWorldWartoIndependence
•Strengtheningtradeunionmovementandactiveinvolvementofeminentnationalistin
themovement.
•EnactmentoftheTradeUnionAct,1926,theIndustrialEmployment(Standingorder)
Act,1946,theIndustrialDisputeAct,1947etc.
•Establishmentofpermanenttripartitebodiesvariouslevel.
•Enactmentofdifferentprotectiveandsocialsecuritylaws.
•Positionsinceindependence
•Strengtheningbothemployees’andemployers’organisationatvariouslevel
•Impositionoflegalrestrictiononstrikeandlock-out
•Provisionofdifferentmachineriestopreventindustrialdisputes

11. Employers’ Organisationand Industrial Relations
•Employers’ federation at national level
•AllIndianOrganisationofEmployers(AIOE)
EstablishedinDecember,1932oninitiativeofFICCI
Originalnamewas‘AllIndiaOrganisationofIndustrialemployers(AIOIE)’
•Employers’FederationofIndia(EFI)
Establishedin1933withjointinitiativeofBombayandBengalChamberofCommerce
•StandingConferenceofPublicEnterprise(SCOPE)
Establishedin1970
•CouncilofIndianEmployers(CIE)
Establishedin1956withjointinitiativeofEFIandAIOE
•AllIndiaManufacturers’Organisation(AIMO)
Establishedin1941oninitiativeofM.Vishesvarayya
•FederationofIndianChamberofCommerceandIndustry(FICCI)
Establishedin1927byG.D.BirlaandPurushottamThakurontheadviceofMahatmaGhandhi
•Employers’federationattheindustrylevel
•Regionalandstatelevelemployers’federation

12. Methods of settling industrial
disputes

13. Methods of settling industrial disputes
Methods of settling industrial
disputes
Without state
intervention
Collective Bargaining
Without Conciliation
With Conciliation
Voluntary
Arbitration
With state
intervention
Compulsory Establishment of
Bipartite Committee
Establishment of Compulsory
Collective Bargaining
Compulsory Investigation
Compulsory Conciliation and Mediation
Compulsory Arbitration or Adjudication
Source: Industrial Relations, Trade Unions
and Labour Legislationsdby P R N Sinha,
InduBalaSinha, SeemaPriyadarshini
Shekhar; Pearson EducatioonIndia, 2017

14. Collective Bargaining
•Themethodsorprocessofdeterminingthespecificconditionoflabourcontract–particularly
wages,hoursandworkingconditions-bydirectnegotiationbetweentherepresentativesofoneor
moreunionsontheonehand,andofanemployerorassociationofemployerontheother,and
terminatinginacollectiveagreementbetweenbothparties.
•Stepsincollectivebargaining:
1.Presentationinacollectivemanner,totheemployer,theirdemandsandgrievancesbytheemployees.
2.Discussionandnegotiationsonthebasisofmutualgiveandtakeforsettlingthegrievancesandfulfillingthe
demands.
3.Signingofaformalagreementoraninformalunderstandingwhennegotiationresultinmutualsatisfaction.
4.Intheeventofthefailureofnegotiations,alikelyreasontostrikeorlock-outtoforcetherecalcitrantparty
tocometoterms.

15. Voluntary Arbitration
•Theprocedurevoluntarilychosenbydisputantparties,wherebyaconflictssettled
byanimpartialjudgeorumpireoftheirownmutualselectionandwhosedecision,
basedonthemeritsofcase,theyagreeinadvancetoacceptasfinalandbinding.
Thisisvoluntaryarbitrationwithcompulsoryacceptanceofthereward.
•Theprocedurevoluntarilychosenbydisputantparties,wherebyaconflictssettled
bythedecisionofanimpartialjudgeorumpirewhosedecisiontheyarefreeto
accept.Thisisvoluntaryarbitrationwithvoluntaryacceptanceoftheaward.

16. Settlement under the influence of state
•Interruptions in production because of strikes and lock-outs cause untold
inconvenience and loss of economic welfare to people in general, especially if the
supply of essential goods and services is stopped.
•The changing nature of strikes and took-outs involving entire industries, has further
strengthened the need for intervention by the state in the settlement of industrial
disputes.
•The most common ways in which the state intervention takes place arc the
following:
1.Compulsory establishment of bipartite committees;
2.Establishment of compulsory collective bargaining;
3.Conciliation and mediation (voluntary and compulsory);
4.Compulsory investigation; and
5.Compulsory arbitration or adjudication.

17. Compulsory Establishment of
Bipartite Committee
•Thestatehaspassedenactmentsrequiringtheestablishmentofbipartitecommitteesconsistingofthe
representativesofworkersandtheiremployerattheplantorindustriallevel.
•Thesebipartitecommitteesaregiventhepowertosettledifferencesbetweentheworkersandtheemployersas
soonastheyappear,andtherebytheypreventthemfromgrowingintobigconflagrations.
•TheIndustrialDisputesAct,1947providesforthecompulsoryformationofWorksCommitteesinindustrial
establishmentsemploying100ormorepersons,ifsorequiredbytheappropriategovernment.
•AWorksCommitteeconsistsofrepresentativesoftheworkersandemployersandisentrustedwiththe
responsibility"topromotemeasuresforsecuringandpreservingamityandgoodrelationsbetweenthe
employerandtheworkmenand,tothatend,tocommentuponmattersoftheircommoninterestorconcern
andendeavourtocomposeanymaterialdifferenceofopinioninrespectofsuchmatters."

18. Establishment of Compulsory Collective Bargaining
•Aformofsettlingconflictsinwhichanoutsideagencyorpersonusedasagobetweenby
thecontendingpartiestheagencyorthepersonendeavourstohelpthedisputantsarriveata
mutuallyacceptablesettlement.Theroleoftheconciliatorormediatorislimitedtooneof
counselandadvice.
•VoluntaryConciliationandMediation-thestatesetsupaconciliationandmediation
machinery,consistingofpersonneltrainedintheartofconciliatingdisputes.
•CompulsoryConciliationandMediation-inmanycountries,thestatedoesnotrestcontent
withthemarecreationofaconciliationservice.Thestategoesastepfurther;itimposesan
obligationonthepartiestosubmittheirdisputetotheconciliationserviceandmakesita
dutyoflattertoseektoconciliatethedispute.

19. Compulsory Conciliation and Mediation
•Aformofsettingconflictsinwhichanoutsideagencyorpersonisusedas
go-betweenbythecontendingparties.Theagencyorthepersonendeavours
tohelpthedisputantsarriveatamutuallyacceptablesettlement.Theroleof
theconciliatorormediatorislimitedtooneofthecounselandadvice.

20. Compulsory Investigation
•Methodsofinterventionbythestateinsettlementofindustrialdisputes.
•Governmentassumedpowerunderlawsrelatingtoindustrialrelation
•ThemainpurposebehindtheappointmenttheCourtofEnquiryistofind
outrelevantfactsandissuesinvolved.

21. Compulsory Arbitration or Adjudication
•Alegalrequirementthatempowersthegovernmentorprescribedauthoritytoreferanindustrialdisputetoanadjudicationauthoritywhosedecisionisgenerallybinding
onboththepartiesandalsoonthoseaffectedbythedispute.
•Twoprincipalformsofcompulsoryarbitration:-
1.Compulsoryreferencebutvoluntaryacceptanceoftheaward.
•AdisputeisreferredtoatribunalorcourtofArbitrationforadjudicationeitherbygovernmentorthepartiesmayrequired.
•Freetoacceptorrejecttheaward.
2.Compulsoryreferenceandcompulsoryacceptanceoftheaward
•Itisnotonlythatthegovernmenthasthepowertoreferthedisputeforadjudication,butalso,thatthepartiesareputunderalegalobligationtoabidebyitsaward.
•Penaltiesareimposedonpartiesfornon-acceptanceandnon-implementationofthetermsoftheaward.
•Thepartiesarerequiredtorefrainfromgoingonastrikeordeclaringalock-outduringthependencyofadjudicationproceedingsandduringtheperiodwhentheawardisin
operation.

22. Machinery for the Prevention and Settlement of
Industrial Dispute in India
Statutory Machinery
•WorksCommittee
•Permanentconciliationservicefora
particulargeographicalarea
•adhocBoardsofConciliationatthecentral
andstatelevel
•adhocCourtsofInquiryatthecentraland
statelevel
•TribunalandlabourCourt
•NationalTribunalatthecentrallevel
Non-Statutory Machinery
•IndianLabourConference(ILC)
•StandingLabourCommittee(SLC)
•WageBoards
•IndustrialCommittees
•StateLabourAdvisoryBoards

23. Indian Labour Conference (ILC) and Standing Labour Committee (SLC)
•Bothofthemaretripartitebodyandweresetupin1942
•ILChas44membersandSLChas20membersatinitiation.
•Mainobjectivesfortheirestablishmentwere:
•Promotinguniformityinlabourlegislation
•Layingdownofprocedurefirthesettlementofindustrialdisputes
•Discussingallmattersofnationalimportanceasbetweenemployerand
employee

24. Code of Discipline in Industry
Draftedbyatripartitesub-committeeappointedbyILCin1957
ItwasanoutcomeoftheeffortsofGuljariLalNanda,theUnionLabourMinisterin1957to
1958.
Itwasformallyadoptedatthe16thsessionoftheIndianlabourconference(1958)andcameinto
forcefrom1
st
June,1958andhadbeenratifiedbytheemployers’andworkers,organisation.
Thiscodewasauniqueformulationtovoluntarilyregulatelabourmanagementrelations

25. The Management and Unions agree
1.Nounilateralactionshouldbetakenandthatdisputesshouldbesettledatappropriatelevel.
2.Existingmachineryforsettlementofdisputeshouldbeutilizedwiththeutmostexpedition.
3.Thereshouldbenostrikeorlockoutwithoutnotice
4.Affirmingtheirfaithindemocraticprinciples,theybindthemselvestosettleallfuturedifferences,disputesandgrievancesby
mutualnegotiation,conciliationandvoluntaryarbitration.
5.Neitherpartywillhaveto(i)coercion,(ii)intimidation,(iii)victimizationor(iv)go-slow
6.Theywillavoid(i)litigation,(ii)sit-downandstay-instrikeand(iii)lock-outs
7.Theywillpromoteconstructivecooperationbetweentheirrepresentativesatalllevelsaswellasbetweenworkersthemselves
andabidebythespritsofagreementsmutuallyenteredinto.
8.Theywillestablishuponamutuallyagreedbasisagrievanceprocedurewhichwillensureaspeedyandfullinvestigationleading
tosettlement.
9.Theywillabidebyvariousstagesinthegrievanceprocedureandtakenoarbitraryactionwhichwouldbypasstheprocedure.
10.Theywilleducatethemanagementpersonnelandworkersregardingtheirobligationtoeachother.

26. The Management agrees
•Nottoincreaseworkloadunlessagreeduponorsettled.
•Nottosupportorencourageanyunfairlabourpractices.
•Totakepromptactionfor(i)settlementofgrievancesand(ii)implementationofsettlements,
awards,decisionsandorders.
•Todisplayinconspicuousplaceintheundertaking,theprovisionofthiscodeinlocallanguage(s).
•Todistinguishbetweenactionjustifyingimmediatedischargeandthosewheredischargemustbe
processedbyawarning,reprimand,suspensionetc.
•Totakeappropriatedisciplinaryactionagainstitsofficersandmembersincaseswhereenquires
revealthattheywereresponsibleforprecipitateactionbyworkersleadingtoin-discipline.
•Torecognizetheunionaspercriteriaevolvedin16
th
sessionofILC

27. The Union(s) agrees
•Nottoengageinanyformofphysicalduress
•Nottopermitnotpeacefuldemonstration
•Notengagemembersandemployeesduringworkinghours
•Discourageunfairlabourpracticeslikenegligenceofduty,insubordinationetc.
•Takepromptactiontoimplementawardsagreements,settlementsanddecisions
•Todisplayinconspicuousplaceintheunionoffice,theprovisionofthiscodein
locallanguage(s).
•Toexpressdisapprovalandtotakeappropriateactionagainstofficebearersand
membersforindulginginactionagainstthespiritofthiscode.

28. Industrial Committees
•TheestablishmentofIndustrialCommitteesforspecificindustrieswasthe
outcomeofthe1944sessionoftheIndianLabourConference.
•TheseCommitteesweresetupwithaviewtoconsideringthespecial
problemsoftheindustriesconcerned.
•ThefirstIndustrialCommitteewassetupin1947forplantations.

29. The first National Commission on Labour (1969) on the methods of settling industrial disputes
TherecommendationsoftheCommissionregardingthemethodsandmachineryfor
settlingindustrialdisputesare:
•CollectiveBargaining
•VoluntaryArbitration
•ConciliationandAdjudication(IndustrialRelationsCommission)

30. References:
•Dynamics of Industrial Relations by Mamoria, mamoria, and Gankar
•Industrial relations by ArunMonappa
•Industrial Relations, Trade Unions and Labour Legislationsdby P R
N Sinha, InduBalaSinha, SeemaPriyadarshiniShekhar; Pearson
EducatioonIndia, 2017