Module 4

Module Outline

Industrial relations Introduction to IR- Concept and approaches-

role of government , employers and trade unions in IR- employer employee relation- union management relations

Industrial disputes – causes and effects IR machinery- collective bargaining-

conciliation- arbitration and adjudication Modern trends in IR

Industrial Relations

Meaning

Employment relationships -- relations among workers, employers, their organizations, and government regulators

All aspects of people at work The processes by which human beings and

organizations interact at the workplace and more broadly in society to establish terms and conditions of employment

Objectives of industrial relations

Maintain sound and harmonious relations between employees and employers

Safeguard the interests of labour as well as management Raise productivity Avoid industrial conflict Establish and maintain industrial democracy Reduce tendency of higher labour turn over Eliminate strikes, lockouts & gheraos Establish government control over plants which are running on loss Encourage and develop trade unions Ensure healthy and balanced social order

Approaches to IR Unitary approach / Unitarism

A core assumption of unitary approach is that management and staff, and all members of the organization share the same objectives, interests and purposes; thus working together, hand-in-hand, towards the shared mutual goals.

Furthermore, unitarism has a paternalistic approach where it demands loyalty of all employees.

Trade unions are deemed as unnecessary and conflict is perceived as disruptive.

Unions cooperate with the management and the management’s right to manage is accepted because there is no “we they” feeling.

Approaches to IR Pluralistic Approach / Pluralism

- The organization is perceived as being made up of powerful and divergent sub-groups - management and trade unions. Trade unions as legitimate representatives of employee interests

- Stability in IR is the product of concessions & compromises between management and unions

- This approach sees conflicts of interest and disagreements between managers and workers over the distribution of profits as normal and inescapable.

- Consequently, the role of management would lean less towards enforcing and controlling and more toward persuasion and co-ordination.  

Approaches to IR

Marxist Approach

- Industrial conflicts has a wider meaning- Conflict arise not only out of rift between

management and workers but also because of the divisions in the society

- It is concerned with the structure and nature of society and assumes that the conflict in employment relationship is reflective of the structure of the society.

- Conflict is therefore seen as inevitable and trade unions are a natural response of workers to their exploitation by capital.

Approaches to IR

Psychological Approach Sociological approach V.V.Giri approach (late president of India –

mutual settlement of disputes, collective bargaining)

Gandhian approach (based on fundamental principles of truth, non violence & non possession)

HRD approach

Role of Government

1. Evaluation of industrial relations policies Employees and workmen Act of 1860 1920Bombay Committee 1931 Royal Commission on labour 1938 Bombay Industrial Disputes Act The Industrial disputes act in 1947

2. Directives principles (Part IV, constitution of India)3. Promotion of Rights at Work 4. Employment - Creation of greater employment and income

opportunities for women and men as a means to reduce poverty and inequality.

5. Social Protection 6. Social Dialogue7. Wage boards, labor courts, tribunals & enacted laws

Role of employers

Creating & maintaining employee motivation Obtaining commitment from work force Establishing mutually beneficial channels of

communication Achieving higher levels of efficiency Negotiating terms & conditions of employment Sharing decision making with employees

Role of Trade Unions

Representation Negotiation Voice in decisions affecting workers  Member services :Education and training Legal assistance Financial Welfare benefits.

Industrial disputes

The Industrial Disputes Act,1947

Any conflict Between employees and employers Between employers and employers Between employees and employees- Connected with employment or non employment

issues or terms of employment or with conditions of work of any persons

The Industrial Disputes Act,1947

Unfair labour practices The Industrial Disputes Act defines the

following as unfair labour practices: refusal by the employer to bargain collectively in

good faith with recognised trade unions, refusal by a union to bargain in good faith with the

employer workers and trade unions engaging in coercive

activities against certification of a bargaining representative

Breaching an industrial ‘settlement’ is punishable under law.

Causes of disputes Economic causes

Wage & allowances Bonus Working conditions & working hours Modernization & automation Demand for other facilities

Managerial Causes Failure to recognize trade unions Defective recruitment policies Irregular layoffs & retrenchment Defiance of agreements & codes Defective leadership Trade union problems (Multiplicity) Unfair labour practices

Political Causes Other Causes (Inter union rivalry, misbehavior, miscommunication,

Multiplicity of labour laws)

Forms of industrial disputes

Strikes ( Economic, sympathetic, general, sit down, slow down, lightening, hunger)

Lock outs Gherao Picketing Boycott

Effects of Industrial Disputes

On the employers Loss of production Increase in cost of production Fall in profit Loss of goodwill

On Employees Loss of income Fear of loosing the job Psychological & physiological effects of forced idleness

On the nation Adverse effect of national productivity Chances of damage to public property

IR Machinery

IR Machinery

These are the machinery for handling industrial conflicts so that industrial disputes do not occur. 

It is Mainly of 2 types – Preventive Machinery & Settlement Machinery

Prevention of Industrial Disputes

1. Workers participation in management2. Grievance redresal procedure3. Model Standing orders4. Tripartic bodies (Indian labour conference,

standing labour committees, wage boards)5. National Arbitration Board (Voluntary

Arbitration)6. Grievance Interview7. The Open door Policy

ID Settlement Machinery

Collective bargaining Conciliation Arbitration Conciliation

Collective bargaining

Collective bargaining is a process of negotiations between employers and a group of employees aimed at reaching agreements that regulate working conditions.

It is a resolution to industrial problems between the representatives of employees and freely designated representatives of employers acting with a minimum government direction.

Features

Group & collective action Strength Continuous process Flexible Voluntary

Dynamic Power relationship Bipartite process

Approaches to Collective bargaining

As a process of social change As a peace treaty between conflicting parties Industrial Jurisprudence

Objectives

Maintain cordial relationships Settle disputes or conflicts Protect the interests of the workers Ensure participation of trade unions

Activities in collective Bargaining / types of collective Bargaining

Distributive Bargaining Integrative Bargaining Attitudinal Restructuring Intra-organizational Bargaining

Process1. Identification of the problem

Wage related issues Supplementary economic benefits Institutional issues Administrative issues

2. Preparing for negotiations

Employer1. Prepare specific proposals for changes2. Determine the general size of the economic package3. Prepare statistical displays & supportive data4. Prepare bargaining book

Employees5. Financial position of the company & its ability to pay6. Attitude of management towards various issues7. Attitude & desires of employees

Process

3. Negotiating Procedure 4. Reaching the agreement5. Ratifying the agreement6. Administration of agreement

Conciliation

The process by which representatives of workers & employers are brought

together before a third party with a view to persuade them to arrive at an

agreement by mutual discussion.

The industrial disputes act 1947 provides for the appointment of conciliators or

for appointing conciliation officers or for constituting a board of conciliation .

The Central Government or the State Government appoints conciliation officers

who are usually officials of the State Labour Department or the officials of the

Ministry of Labour Government of India

Duties of the conciliator

Mediator Hold conciliatory proceedings Investigate the dispute Send a report & memorandum of settlement to

appropriate government To send a full report to the appropriate

government setting for the steps taken in case no settlement is arrived at.

Duties of the conciliator

The conciliator shall submit the report within 14 days from the date of commencement

The act prohibits any kind of strikes during the time of conciliation

The conciliator has no powers to force settlement

Adjudication The Labour Court/Industrial Tribunal after following the

procedure prescribed under law finally gives its Award. This Award is sent to the Government and becomes

operational thirty days after the date of its publication by the Government.

The Award given by the Labour Court/Indiustrial Tribunal is binding on the parties to the industrial dispute.

However, any one of the parties in the adjudication proceedings before the Labour Court/Industrial Tribunal can challenge the Award by means of a writ petition before the High Court.

Adjudication

Section 10 of Industrial disputes act The proceedings before the Labour

Court/Industrial Tribunal are called adjudication proceedings.

Disputes are generally referred to adjudication on the recommendation of the conciliation officer.

The government has discretionary powers to accept the recommendation or not

Criticized because of the delay involved

Arbitration

Arbitration & Industrial Disputes Act, 1974 Refers to a procedure in which a neutral third

party studies the dispute, listen to both the parties & collects information, makes recommendations which are binding on both the parties.

The parties agree that the issue in dispute between them should be settled by referring the issues for arbitration.

The parties to the dispute can select the person who should arbitrate the issue i.e., the arbitrator.

Solution from Arbitration would be bounded by both the parties

Types of Arbitration

Voluntary Arbitration

Compulsory Arbitration

Merits of Arbitration

Confidential Time saving Expert neutral Arbitrators often work faster than a judge to

decide disputes. The parties can select their arbitrator. Appointments are scheduled with the arbitrator

at the mutual convenience of all concerned; no other cases compete for attention.

Demerits of Arbitration

Workers cannot go on a strike during the discussion. Sometimes arbitrator show result towards one

group due to bias. Two groups of people should agree the result what

the arbitrator said. The parties gives up their power to decide and

leaves their fate in the hands of a third party stranger.

The arbitrator’s settlement is final. The parties, not the court calendar, decide when

and how much time the arbitrator spends on their case.