INDUSTRIAL RELATIONS

&
LABOR LAWS
 DEFINING IR
 Industrial relations encompasses a set of
phenomena, both inside and outside the
workplace, concerned with determining
and regulating employment relationship
 Relationship between management and
employees or among employees and their
organization that characterize and grow
out of employment.
 OBJECTIVES OF IR

 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
 NATURE OF IR
 IR arise out of employer employee relations
 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.
 Govt influences and shapes IR: with its laws, rules, agreements through
executive and judicial machinery
 Scope of IR is very wide as 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.
 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
 Approaches to Industrial
relations
 UNITARY APPROACH
 PLURALISM
 MARXIST APPROACH
 UNITARY APPROACH

 IR is grounded in mutual cooperation, individual treatment, team

work and shared goals.
 Work place conflict is seen as temporary aberration, resulting from
poor management
 Employees who do not mix well with organization culture
 Unions cooperate with the management
 Management’s right to manage is accepted because there is no ‘we
they” feeling
 Underlying assumption is that everyone benefits when the focus is
on common interest and promotion of harmony
 Based on reactive strategy. Direct negotiation with employees
 Participation of Govt, tribunals and unions are not sought or are
seen as being necessary for achieving harmonious employee
relation
 PLURALISM
(CONFLICT APPROACH )

 Pluralism is belief in the existence of more than one ruling principle, giving
rise to a conflict of interests.
 The pluralist approach to IR accepts conflict between management and
workers as inevitable but containable through various institutional
arrangements ( like collective bargaining, conciliation and arbitration etc)
and is in fact considered essential for innovation and growth.
 It perceives organizations as coalitions of competing interests , where the
management’s role is to mediate among the different interest groups.
 It perceives trade unions as legitimate representative of employee interests
 It also perceives stability in IR as the product of concessions and
compromises between management and unions.
 Employees join unions to protect their interests and influence decision
making by the management. Unions thus balance the power between
management and employees. In pluralistic approach a strong unions is not
only desirable but necessary
 MARXIST APPROACH
 Marxists like pluralists also regard conflict as inevitable but see it as a
product of capitalistic society where as pluralist believe that the conflict is
inevitable in all organizations
 For Marxists IR has wider meaning. For them conflict arises not because of
rift between management and workers but because of the division in the
society between those who own resources and those who have only labor
to offer.
 Marxist approach thus focuses on the type of society in which an
organization functions.
 Industrial conflict is thus equated with political and social unrest
 Trade Unions are seen both as labor reaction to exploitation by capitalists,
as-well-as a weapon to bring about a revolutionary social change. Wage
related disputes as secondary
 For them all strikes are political and they regard state intervention ( via
legislations and creation of Industrial Tribunals ) as supporting
management’s interests, rather than ensuring a balance between the
competing groups.
 Systems approach
 IR - a social sub-system within the econ. & political
systems
 Components
– actors
– contexts (influences & constraints on decisions & action
e.g. market, technology, demography, industrial structure)
– ideology - beliefs affecting actor views - shared or in
conflict
– rules - regulatory elements i.e. the terms & nature of
the employment relationship developed by IR processes
 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, services and 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
 ROLES OF WORKERS,
MANAGEMENT & GOVERNMENT
 PARTIES TO IR

EMPLOYEES EMPLOYERS

EMPLOYEE EMPLOYER-EMPLOYEE EMPLOYER

ASSOCIATIONS RELATIONS ASSOCIATION

COURTS
GOVERNMENT &
TRIBUNALS
 ROLE OF WORKERS
WORKERS and their ORGANIZATIONS( Trade Unions or Associations )

 Trade unions have a protecting role of safeguarding workers interests,

 Regulating function of ensuring implementation of statutes / Acts

 Ensuring non-violation of worker’s rights

 Trade Union Act provides Status and Authority for the power vested in them

 This power is used for negotiating Wage Interests, better benefits and
service conditions, concessions, more amenities and welfare schemes

 Structure of Workers’ organization or Trade unions differs from country to

country
 ROLE OF MANAGEMENT
An organization is represented through officials designated in the
organization structure for coordination of activities relating to:

 Administering employee benefits

 Regulating terms and condition of employment
 Providing welfare and social security benefits
 Coordination is done through graded hierarchical and formal
communication channels of orders and directives
 Style and manner in which employer organizations get work and
regulate the terms and conditions of employment affects the
industrial relations of the unit.
 ROLE OF GOVERNMENT

 Govt or state machinery regulates the relationship between workers’

organizations and employers’ organizations.

 It does it through :
- Statutes and legislations,
- The judiciary- labor courts industrial tribunals
- An executive machinery- that lays down rules, procedures and
gives awards and monitors them
 Employment Relations
Dunlop’s model
 FACTORS AFFECTING EMPLOYEE RELATIONS
INTERNAL FACTORS:
 Attitudes of management to employees and unions

 Attitudes of employees to management and unions

 Attitudes of unions to unions to management and employees

 Present and likely future strength of unions

 Effective and agreed procedures for discussing and resolving grievances or handling disputes within the company

 Inter union rivalries in case of more than one union

 Effectiveness and capability of managers and supervisors in resolving grievances and handling disputes.

 Company's strategy wrt expansion, diversification, contraction , stabilization etc

 Quality of work life ( QWL), growth and developmental opportunities

 Degree of Autonomy and Empowerment given to employees

;
 FACTORS AFFECTING EMPLOYEE RELATIONS

 EXTERNAL FACTORS:

 Militancy of unions- nationally or locally

 Authority and effectiveness of the employers
 The extend to which bargaining is carried out at national, local or
plant level
 The effectiveness of any national or local procedure agreements
that may exist
 Employment situation nationally or locally
 Legal framework within which IR exists
 SOCIAL SECURITY
( IMPACT ON EMPLOYEE RELATIONS )
 Social security is one of the key components of labor welfare
 Labor welfare refers to all such services, amenities and facilities to
the employees that improve their working conditions as-well-as their
standard of living
 Social security benefits provided by an organizations should protect
not only their employees but also their family members including
financial security and health care etc
 Social security envisages that the employee shall be protected
against all types of social risks that may cause undue hardship to
them in fulfilling their basic needs.
 Accidents, job losses, retirement, sickness, death while on duty-
these are realities of working life and leave a person and his
dependents vulnerable
 Social security is an attempt by the employer and the state io
institute measures that mitigate such social risks
 MAJOR LEGISLATIONS
 India being a welfare state has taken up itself the responsibility of
extending various benefits of social security and social assistance to
its citizens.
 Although the constitution of india is yet to recognize social security
as a fundamental right, it does require state to promote the welfare
of the people by providing social, economic and political justice
 Constitution requires companies to make effective provisions for
making effective provisions for securing right to work, to educate
and public assistance in case of unemployment, old age, sickness
and disablement. Securing just and humane conditions of work.
Raise level of nutrition and standard of living, improvement of public
health etc
 A social security division has been set up under the ministry of labor
and employment.
 In the context of labor , social security aims at reducing risks
against
loss of earnings or earning capacity due to old age,illness or work-
related injuries.
Social security to the workers is provided through 5 major Acts:

1. The Employees State Insurance act, 1948

2. Employees’ provident Fund and Miscellaneous provisions Act
3. The Worker’s Compensation Act
4. The Maternity Benefit Act
5. The payment of Gratuity Act
 In addition there are large number of welfare funds also for some
specific segments
 Major thrust of social security relating to labor is on:
a) Provisions relating to medical facilities, compensation benefits
and insurance coverage incase if accidents, incapacity, illness
etc..
b) Provisions relating to provident fund and gratuity
TRADE UNIONS
&

INDUSTRIAL DISPUTES
 What is a Trade Union?
 Definition: An organization of workers or
employees formed mainly to
_ Negotiate with the employers on various
employment related issues
– Improve the terms and conditions at their workplace
– Enhance their status in society
 In most countries, there are laws governing the
formation, membership and administration of
trade unions.
 ORIGIN & GROWTH OF TRADE UNION
MOVEMENT
 Industrialization brought about new economic and social order in societies.
TU emerged as a result of industrialization in new social order
 First workers’ union in India under the leadership of Mr Lokhande was
developed in 1890
 Beginning of labor movement in the modern sense started after the
outbreak of World War I
 Economic. Political and social conditions influenced the growth of trade
union movement in India.
 Establishment of ILO helped the formation of TUs in the country
 In 1920 AITUC( All India Trade Union Congress) was formed- the 1st All
India trade union
 World War II brought splits in AITUC. Efforts of Indian National Congress
resulted in the formation of INTUC( Indian National Trade Union Congress)
 Socialists separated from AITUC formed HMS( Hind Mazdoor Sabha) in 1948
 Some other unions were also formed. They were BMS ( Bhartiya Majdoor
Sangh) in1955, HMP( Hind Majdoor Panchayat) in 1965, CITU( Centre of
Indian Trade Union ) in 1970
 PRINCIPLE OF TRADE UNION
1. UNITY: Unity is strength

2. EQUALITY: Workers must not be

discriminated wrt caste, creed, sex etc.
Each worker should get equal pay for equal
work

3. SECURITY: Security of their employment

and their families must be safeguarded
 Objectives of a Trade
Union
1. Collective bargaining
– Represent members to negotiate with
employers, for better wages and conditions of
employment
2. Safeguard jobs
– Protect jobs of members
3. Cooperate with employers
– For the benefits of members, resolve disputes
in a mutually acceptable manner
 Objectives of a Trade
Union
4. Political activities
- Support political parties
5. Social activities
- Support members with recreation
facilities and benefits for
unemployment, illness, retirement,
death
 Types of Unions
1. Craft union
– Same craft or occupation
2. General union
– For unskilled workers
3. Staff union
– Non-manual workers
 Why Workers Join Unions
1. Higher wages and better working
conditions
– Collective bargaining with employer
2. Job security
– More secured with collective agreement
3. Social need
– Meet co-workers from other departments or
companies
 Why Workers Join Unions
4. Upgrading of skills
– Attend training courses organized by
union
5. Peer pressure
– Colleagues are members
6. Self-fulfillment
– Serve other members
 OBJECTIVES/IMPORTANCE OF TRADE UNIONS

 Wages & salaries

Policy matter but differences in implementation, so comes
the role of trade union
 Working conditions
safeguarding workers health: Lighting & ventilation,
sanitation, rest rooms, safety equipments ( hazards free
atmosphere , drinking water, refreshments, working hours,
leave & rest, holidays with pay, job satisfaction, social
security benefits and other welfare measures
 Discipline
Protect workers from victimization by management-
transfers, suspensions, dismissals etc
 Personal policies
Fighting against improper implementation of personnel
policies wrt
recruitment, selection, promotion, transfer, training etc..
 Welfare
Solving difficulties of workers through collective bargaining wrt
sanitation, hospitals, quarters, schools, colleges and other basic
amenities
 Employer- employee relations
Bureaucratic attitude and unilateral thinking of mgmt may lead to
conflicts
Trade unions go for constant negotiations for industrial
democracy and peace.
 Negotiating machinery
Based on ‘give and take principle’, negotiations continue till parties
reach an
agreement. Protect interests of workers through collective
bargaining
 Safeguarding organizational health
Methods evolved for grievance redressal, techniques adopted to
reduce
absenteeism and labor turnover. upgrading skills- attend training
courses organized by
unions
 FORMS OF UNREST/DISPUTES
STRIKES: A strike is spontaneous and concerted refusal of
work and withdrawal of labor from production
temporarily. It is a collective stoppage of work for
pressurizing their employers to accept certain
demands.

LOCK-OUTS:
 It is the counterpart of strike.
 It is the weapon available with employer to close down
the factory till the workers agree to resume work on
the conditions laid down by employer.
 If it is impossible to meet the demands of workers,
employers may decide o go for lock-out
 An employer may also pull down the shutters so as to
bring psychological pressure on the workers to agree
to his conditions or face the closure of unit
 FORMS OF UNREST/DISPUTES
GHERAO:
 Gherao means to surround
 Group of workers initiate collective action aimed at preventing members
of he management from leaving the office. This can happen outside the
premises too
 Persons who are under gherao are not allowed to move for a long time,
sometime even without food or water

PICKETING and BOYCOTT

 While picketing workers carry/display signs ,banners etc ( In connection
with dispute), prevent others from entering the place of work and
persuade others to join the strike
 Boycott aims at disrupting the normal functioning of an enterprise,
Through forceful and negative behavioral acts, strikers prevent others
not to cooperate with employer
 MANAGEMENT ACTION TO COUNTER STRIKES

EMPLOYER’S ASSOCIATION:
 Employers may form their unions to collectively oppose the working class and
put pressure on trade unions
LOCKOUT:
 It is the counterpart of strike.
 An employer may close down the place of employment temporarily. It is very
powerful weapon available with employer to pressurize workers till they agree
to resume work on the conditions laid down by employer.
 If it is impossible to meet the demands of workers, employers may decide o
go for lock-out
 An employer may also pull down the shutters so as to bring psychological
pressure on the workers to agree to his conditions or face the closure of unit
TERMINATION:
 Employer may resort to suspension or disciplinary action leading to
termination of workers on strike. The list of employees so suspended or
dismissed may be circulated to the other employer so as to restrict their
chances of getting employment with other employers.
 CHANGING ROLE / PUBLIC PERCEPTION
TRADE UNIONS
 Change in the attitude of unions towards management, Industry,
Govt. and economy
 Unions becoming increasingly matured, responsive and realistic
Gone are the days of frequent strikes, bandhs, gheraoes and
violence
 Discussion among trade union circles is now on issues like
productivity, TQM, Technology, competition, MNCs, exports etc..
 Unions aware of the Right Sizing and feel the need for suplus labor
fat to be shed
 Days when unions were affiliated with political parties are gone by.
Today thrust is on de- politicization of unions
 Experience of politically free unions is pleasant, reinforcing the belief
that farther the unions are from politics, more advantageous it is for
them
 Workers association in our country is highly fragmented and the
consequence is multiplicity of unions, which weakens the bargaining
strength of employees.
 One of the defects of trade union movement in India has been the
phenomenon of outside leadership. The fault of outside leadership
lies with trade Union Act, 1926 itself. The act permitted outside
participation to the extent of 50% of the strength of office bearers
in a union.
 Managements on the other hand are on the offensive. They are able
to force unions to accept terms and conditions. Workers,officers and
managers are mercilessly terminated in the name of restructuring,
downsizing etc
 Professionalisation of trade unions movement is another trend
witnessed, they are trying to upgrade their leadership quality.
Topics lie IT, strategic planning, diversity, networking and
productivity etc now form inputs in training programmes organized
for union leaders
MAJOR PROBLEMS FACED BY BTRADE UNIONS IN
INDIA

 Outside or political leadership

 Multiplicity of trade unions
 Small size of unions
 Low membership
 Poor financial position
 Low level of knowledge of labor legislation
 Fear of victimization
 TRADE UNION ACT (1926)

 It legalizes the formation of trade unions by allowing employees the right to

form and organize unions and also strengthen bargaining power of workers
 Act aims to provide law for the registration of trade unions and get it
registered under the act
 Permits any seven persons to form a union
OBJECTIVES
 Lay down conditions governing the registration of trade unions
 Defines obligations of trade unions
 Prescribe rights and liabilities of a registered trade union
STATUS OF A REGISTERED UNION
 It becomes a body corporate
 It gets a common seal
 It can buy and hold movable and immovable property
 It can enter into contracts with others
 It can sue and be sued in its name
 TRADE UNION ACT (1926)
REGISTRATION:
A trade union formed with at least 7 members may apply for registration with following documents
 A copy of the rules of trade union
 Name, occupation and addresses of members
 Name of trade union and address of its office
 Office Bearers of the trade unions
 In case already in operation- submit statement of accounts/assets and liability statement

OBLIGATIONS:
It should have a name, clearly laid down objective, membership list readily available, purpose for
which funds shall be utilized, members to be the actually working persons , Honorary/temporary
office bearers, conditions for benefits/fines, conditions under which rules shall be amended,
manner in which office bearers shall be appointed, safe custody of funds and manner in which
trade union shall be dissolved

RIGHTS AND LIABILITIES

 Section 15 of the Act provides for certain obligations and liabilities of registered unions
 It also stipulates the purpose for which funds can be utilized

THE AMALGAMATION OF TRADE UNIONS:

 Any two or more registered unions may get amalgamated together as one trade union
 INDUSTRIAL DISPUTE ACT (1947)
Ever expanding complex multi product/project companies with diverse and conflicting
interests of workmen and employers, growing labor consciousness, resulting in
strikes and lockouts, lead to the outcome of
Industrial dispute Act, 1947

Main provisions of the Act are:

 Settlement machinery
-Provides suitable machinery for investigation, equitable and peaceful settlement of industrial
disputes and aims to provide justice both to employers and workmen
- Collective bargaining, Negotiation
 Aims at promoting security, amity and good relations between employer and
employee or between employers and workmen or among workmen
 Prevent illegal strikes and lockouts and explains the contingencies when these can be
lawfully resorted to or when these can be declared illegal or unlawful.
 Provide conditions and relief to workmen in the matters of lay-offs, retrenchment,
dismissals and victimization
Last in first out in a retrenchment case or specific reasons in case of others
 Provides conditions under which an industrial unit can be closed down
60 days notice to be given of intention to close down any undertaking
Compensation to workmen in case of closing down
 Get the workmen the right of collective bargaining and promote conciliation
 Lists down unfair labor practices on the part of both parties introduced in 1984
MACHINARY FOE SETTLEMENT OF INDUSTRIAL DISPUTES

KEY PROVISIONS OF ID ACT:

COLLECTIVE BARGAINING:
It is a technique by which disputes as to conditions of employment are
resolved amicably, by agreement rather than coercion
NEGOTIATION
CONCILIATION AND MEDIATION: It is facilitated negotiation, essential in
public utility services, Binding on parties to the disputes
ARBITRATION:
Voluntary Arbitration: agreement between workman and management, Send
copy to the Govt and conciliation officer, publication of agreement
ADJUDICATION
 Conditions for Successful
Bargaining
1. Freedom of association
– Workers and employers are free to form their own
associations to represent their interests.
2. Stability of union
– Unions have to be stable for collective bargaining to
be effective  union is able to honor the
agreement.
3. Recognition of union by employer
– Collective bargaining begins after employer
recognizes the union that claims to represent the
specific group of workers.
 Conditions for Successful
Bargaining
4. Good faith
– Both parties must be willing to resolve differences
to reach an agreement.
5. Mutual respect
– Relationship affected and process becomes tense
and difficult if any party used unfair practices such
as victimization.
6. Supportive legal system
– Employment laws to ensure process takes place in
an orderly manner.
 Negotiations
 Process depends on these factors:
1. Subject matter to be discussed
2. Persons involved
3. Circumstances under which the discussion is held.
 A Typical Negotiation Process begins with
each party stating its position.
 As discussion progresses, each party adjusts
its demands to seek a mutually acceptable
agreement.
 Steps in Negotiation
1. Preparation
– Each party must know what it wants.
2. Presentation
– Each party presents its case.
3. Exchange and compromise
– Parties look for possible adjustment or compromise.
4. Reaching an agreement
– Parties sign a written statement on what have been
agreed.
 Ways to Settle Disputes
 Impasse: settlement cannot be
reached
 Impasses may be solved by these
alternatives:
– Conciliation
– Mediation
– Arbitration
 Ways to Settle Disputes
 Conciliation
– Impartial third party helps the two parties to
reach a mutually acceptable settlement.
– Conciliator meets parties separately or
together to exchange information, clarify
issues and settle misunderstanding.
– Conciliator does not impose a solution but
works with the parties to enable them to
come to an agreement.
 Ways to Settle Disputes
 Arbitration
– Third party settles the dispute by making an
independent decision for the two parties.
– Some prefer arbitration as the responsibility “for
reaching agreement” is made by a neutral party
(quite often, appointed by the government e.g.
Arbitration Court).
– Arbitration gives some people the impression that
they did not give in to the other party but “fought all
the way” to the Arbitration Court.
 Ways to Settle Disputes
 Mediation
– Impartial third party helps to reach a
mutually acceptable agreement.
– Mediator makes recommendations for
the two parties to consider.
– Final agreement is made by the two
parties themselves.
That’s all in HRM
Attitude Measurement for Change
Management
 Thanks
but remember ….
You make the world a better
place by making yourself a
better person.