L IA S R N T O S I U T S D A N L WI E L A R R & AB O L
DEFINING IRIndustrial relations encompasses a set of phenomena, both inside and outside the workplace, concerned with determining and regulating employment relationshipRelationship between management and employees or among employees and their organization that characterize and grow out of employment.
THEORIES AND CONCEPTS USED TO ANALYSE INDUSTRIAL RELATIONS Approaches Used to Define Industrial Relations (1) (1) Institutional-based definitions: industrial relations are the sum of institutional processes that establish and administer the rules regulating workplace relations (2) Social Psychology-based definitions: industrial relations are the sum of social psychological interactions between individuals (3) Class-based definitions: industrial relations are the sum of institutions, interactions and processes that are a product of wider social and economic influences, in particular the class divisions of contemporary capitalism
Approaches Used to Define Industrial Relations (2) Ddefinitions that seek to include all matters contained in the first three definitions within other terms:(4) Human Resource Management: contracts of employment (involving trade unions, worker collectives, labour courts and government agencies), as well as management of conflict arising out of the personal interactions of individuals in the workplace, are part of labour management functions ( i.e. recruitment, selection, training, development, performance management, and so on)(5) Employment Relations (or Employee Relations): contracts of employment (involving trade unions, worker collectives, labour courts and government agencies), as well as the management of conflict arising out of the personal interactions of individuals in the workplace, are part of workplace relations, together with the normal functions of Human Resource Management.
OBJECTIVES OF IRTo enhance economic status of workerTo avoid industrial conflicts and their consequencesTo extend and maintain industrial democracyTo provide an opportunity to the worker to have a say in the management decision makingTo regulate production by minimizing conflictsTo provide forum to the workers to solve their problems through mutual negotiations and consultations with managementTo encourage and develop trade union in order to develop workers collective strength
NATURE OF IRIR arise out of employer employee relationsIR is a web of rules: formed by the interaction of Govt, industry & laborIR is multi dimensional: influenced by complex set of institutional. economic & technological factorsIR is dynamic and changing: keep pace with employee expectations, trade unions, employer associations and other economic and social institutions of societyIR 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 machineryScope of IR is very wide as it covers grievances, disciplinary measures ethics, standing orders, collective bargaining, participatory schemes and dispute settlement mechanism etcInteractive and consultative in nature: in resolving conflict,controversies and disputes between labor and management.
SCOPE OF IRManagement – Union relationshipEmployer – Employee relationshipRelationship amongst various groups of employeesEffect of extraneous factors like state, socio-political- economic factors on workplace relationships
APPROACHES TO INDUSTRIAL RELATIONS Approaches to organisations Unitary Pluralistic Marxist Authoritarian Co-operation Evolution Conflict Paternalism Revolution Approaches to industrial relations Input Conversion Output Institutions Conflict Regulation and (differences) (rules) processes Human Systems Social action Control of resource the labourmanagement process Wider approaches to industrial relations Labour market Comparative
UNITARY APPROACHIR is grounded in mutual cooperation, individual treatment, team work and shared goals.Work place conflict is seen as temporary aberration, resulting from poor managementEmployees who do not mix well with organization cultureUnions cooperate with the managementManagement’s right to manage is accepted because there is no ‘we they” feelingUnderlying assumption is that everyone benefits when the focus is on common interest and promotion of harmonyBased on reactive strategy. Direct negotiation with employeesParticipation 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 interestsIt 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 APPROACHMarxists 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 organizationsFor 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 unrestTrade 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 secondaryFor 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 APPROACHIR - a social sub-system within the econ. & political systemsComponents 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 APPROACHDifferences in the perceptions of labor and management wrt factors influencing their relations i.e. wages. Benefits, services and working conditions etcDissatisfaction compels workers to turn aggressive and resort to strike, lockouts and gherao etc.SOCIOLOGICAL APPROACHSociological factors such as value system, customs and traditions etyc affect the relations between labor and managementHUMAN RELATIONS APPROACHHuman 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 APPROACHCollective bargaining and joint negotiations be used to settle disputes between labor and management. Outside interference to be avoided.GANDHIAN APPROACHworkers 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
PARTIES TO IR EMPLOYEES EMPLOYERS EMPLOYEE EMPLOYER-EMPLOYEE EMPLOYER ASSOCIATIONS RELATIONS ASSOCIATION COURTS GOVERNMENT & TRIBUNALS
ROLE OF WORKERSWORKERS and their ORGANIZATIONS( Trade Unions or Associations )Trade unions have a protecting role of safeguarding workers interests,Regulating function of ensuring implementation of statutes / ActsEnsuring non-violation of worker’s rightsTrade Union Act provides Status and Authority for the power vested in themThis power is used for negotiating Wage Interests, better benefits and service conditions, concessions, more amenities and welfare schemesStructure of Workers’ organization or Trade unions differs from country to country
ROLE OF MANAGEMENTAn organization is represented through officials designated in the organization structure for coordination of activities relating to:Administering employee benefitsRegulating terms and condition of employmentProviding welfare and social security benefitsCoordination is done through graded hierarchical and formal communication channels of orders and directivesStyle 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 GOVERNMENTGovt 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
FACTORS AFFECTING EMPLOYEE RELATIONSINTERNAL FACTORS:Attitudes of management to employees and unionsAttitudes of employees to management and unionsAttitudes of unions to unions to management and employeesPresent and likely future strength of unionsEffective and agreed procedures for discussing and resolving grievances or handling disputes within the companyInter union rivalries in case of more than one unionEffectiveness and capability of managers and supervisors in resolving grievances and handling disputes.Companys strategy wrt expansion, diversification, contraction , stabilization, turnaround and stagnation etcQuality of work life ( QWL), growth and developmental opportunitiesDegree of Autonomy and Empowerment given to employees;
FACTORS AFFECTING EMPLOYEE RELATIONSEXTERNAL FACTORS:Militancy of unions- nationally or locallyAuthority and effectiveness of the employer’s familyThe extend to which bargaining is carried out at national, local or plant levelThe effectiveness of any national or local procedure agreements that may existEmployment situation nationally or locallyLegal framework within which IR exists
SOCIAL SECURITY( IMPACT ON EMPLOYEE RELATIONS )Social security is one of the key components of labor welfareLabor welfare refers to all such services, amenities and facilities to the employees that improve their working conditions as-well-as their standard of livingSocial security benefits provided by an organizations should protect not only their employees but also their family members including financial security and health care etcSocial 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 vulnerableSocial security is an attempt by the employer and the state io institute measures that mitigate such social risks
MAJOR LEGISLATIONSIndia 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 justiceConstitution 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 etcA social security division has been set up under the ministrybof 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, 19482. Employees’ provident Fund and Miscellaneous provisions Act3. The Worker’s Compensation Act4. The Maternity Benefit Act5. The payment of Gratuity ActIn addition there are large number of welfare funds also for some specific segmentsMajor 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
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 societyIn most countries, there are laws governing the formation, membership and administration of trade unions.
ORIGIN & GROWTH OF TRADE UNIONMOVEMENTIndustrialization brought about new economic and social order in societies. TU emerged as a result of industrialization in new social orderFirst workers’ union in India under the leadership of Mr Lokhande was developed in 1890Beginning of labor movement in the modern sense started after the outbreak of World War IEconomic. Political and social conditions influenced the growth of trade union movement in India.Establishment of ILO helped the formation of TUs in the countryIn 1920 AITUC( All India Trade Union Congress) was formed- the 1st All India trade unionWorld 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 1948Some 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 UNION1. UNITY: Unity is strength2. Workers must not be discriminated wrt EQUALITY: caste, creed, sex etc. Each worker should get equal pay for equal work3. Security of their employment and their SECURITY: families must be safeguarded
OBJECTIVES OF A1. TRADE UNION Collective bargaining Represent members to negotiate with employers, for better wages and conditions of employment1. Safeguard jobs Protect jobs of members1. Cooperate with employers For the benefits of members, resolve disputes in a mutually acceptable manner
OBJECTIVES OF A TRADE UNION activities4. Political - Support pro-union political parties5. Social activities - Support members with recreation facilities and benefits for unemployment, illness, retirement, death
TYPES OF UNIONS1. Craft union Same craft or occupation1. General union For unskilled workers1. Staff union Non-manual workers
TYPES OF UNIONS4. Industry union Same industry, regardless of skills, occupation or job4. House union (company or enterprise union) All members are from the same company regardless of occupation or job
WHY WORKERS JOIN UNIONS1. Higher wages and better working conditions Collective bargaining with employer2. Job security More secured with collective agreement3. Social need Meet co-workers from other departments or companies
WHY WORKERS JOINUNIONS4. Upgrading of skillsAttend training courses organized by union5. Peer pressureColleagues are members6. Self-fulfillmentServe other members
OBJECTIVES/IMPORTANCE OF TRADE UNIONSWages & salaries Policy matter but differences in implementation, so comes the role of trade unionWorking 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 measuresDiscipline Protect workers from victimization by management- transfers, suspensions, dismissals etcPersonal 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 amenitiesEmployer- 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
ACTIVITIES OF TRADE UNIONECONOMIC: Improved economic status, shorter working day, improvement in living and working conditions, better health & safety standards, upgrading welfare facilities, reducing inequalities- both internally & externallyPOLITICAL: Seeking / obtaining political power through political affiliations, lobbying activities to influence the cause of labor and legislations, participating & representing workers on bipartite forums, developing revolutionary ideologies among workers, protesting against Govt. decisionsSOCIAL: Initiating & developing workers’ education system, organizing welfare & recreational facilities, providing monitory and other help during period of strike and economic distress, running cooperative welfare schemes and societies, hosing needs/ community development, organizing cultural functions & social welfare programmesNATIONAL / INTERNATIONAL LEVEL: Representing workers at the national level on advisory committees, associating with national federations for unity & solidarity, Raising funds in case of national / International calamities or tragedies
FEATURES OF AN EFFECTIVE TRADE UNIONInternally democraticHave a strong leadershipExhibit a responsibility towards their worker membersCommitted to promote industrial peace and harmonyInclined towards collective bargaining that is collaborative and not competitrivePossess financial securityAdaptable to change
INDUSTRIAL DISPUTE AND INDIVIDUALDISPUTEIndustrial dispute means any dispute or difference between employers and employers, or between employers and workmen or between workmen and workmen, which is connected with employment or non-employment or the terms of employment .The dispute has to be between plurality of workman and employerIndividual workman cannot raise an industrial dispute
INDIVIDUAL DISPUTE DEEMED AS INDUSTRIALDISPUTE 1965 amendment to I.D ACT and insertion of 2A. Where any employer discharges, dismisses, retrenches or otherwise terminates the services of an individual workman, any dispute or difference between that workman and his employer…….shall be deemed to be an industrial dispute notwithstanding that no other workman nor any union of workmen is a party to the dispute. This definition is not applicable to disputes short of termination
FORMS OF UNREST/DISPUTESSTRIKES: 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.TYPES OF STRIKES:SYMPATHETIC STRIKE: To show sympathy with workers in other industriesGENERAL STRIKE: Strike by all or most of the unions in an industry or a regionUNOFFICIAL STRIKE: Strike undertaken without the consent of the unionsSECTIONAL STRIKE: Refusal of a section of a given class of workers to perform their normal dutiesBUMPER STRIKES: to paralyze the industry firm by firmSIT DOWN /TOOL DOWN/PEN DOWN: Strike when unions plan strike and workers cease to perform but do not leave the place of work:SLOW DOWN STRIKE: Go-slow tactic, workers do not stop working but dot perform at their normal paceLIGHTNING STRIKE: Workers may go on strike without notice or at very short notice with an element of surpriseHUNGER STRIKE: To gain sympathy from public and get noticed by employer workers may decide to forego food for a specified period. Such non-violent protests generally bring moral pressure on employers
FORMS OF UNREST/DISPUTESLOCK-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-outAn 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 unitGHERAO:Gherao means to surroundGroup of workers initiate collective action aimed at preventing members of he management from leaving the office. This can happen outside the premises tooPersons who atre under gherao are not allowed to move for a long time, sometime even without food or waterNational commission on labor has refused to accept it as a form of industrial protestPICKETING and BOYCOTTWhile picketing workers carry/display signs ,banners and placards( In connection with dispute), prevent others from entering the place of work and persuade others to join the strikeBoycott 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 STRIKESEMPLOYER’S ASSOCIATION:Employers may form their unions to collectively oppose the working class and put pressure on trade unionsLOCKOUT: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-outAn 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 unitTERMINATION: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 PERCEPTIONTRADE UNIONSChange in the attitude of unions towards management, Industry, Govt. and economyUnions becoming increasingly matured, responsive and realistic Gone are the days of frequent strikes, bandhs, gheraoes and violenceUnions are reconciled to economic reforms. The accent is on opposing the adverse impact of reforms and not the reformsDiscussion 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 shedDays when unions were affiliated with political parties are gone by. Today thrust is on de- politicization of unionsExperience 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.Trade Unions are at cross roads. Their membership is declining, Their political support is waning, public sympathy is receding, their relevance itself is at stakeManagements 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 etcProfessionalisation 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
TRADE UNIONISM IN INDIA TODAYUnionization according to industry/region/state70,000 registered trade unions , many not regisered9 central unions, all affiliated to political parties2 % of the union force unionizedPSUs: Industrial level collective bargaining in coal/steel, enterprize level elsewherePrivate sector: Plant level collective bargainingUnion density according to the size of of industryCraft unions in Govt transport sectorUnionization in India under recessionTwin battle against Inter Union Competition and assertive management
MAJOR PROBLEMS FACED BY TRADE UNIONSIN INDIAOutside or political leadershipMultiplicity of trade unionsSmall size of unionsLow membershipUneven growthPoor financial positionLow level of knowledge of labor legislationFear 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 workersAct aims to provide law for the registration of trade unions and get it registered under the actPermits any seven persons to form a unionOBJECTIVESLay down conditions governing the registration of trade unionsDefines obligations of trade unionsPrescribe rights and liabilities of a registered trade unionSTATUS OF A REGISTERED UNIONIt becomes a body corporateIt gets a common sealIt can buy and hold movable and immovable propertyIt can enter into contracts with othersIt 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 documentsA copy of the rules of trade unionName, occupation and addresses of membersName of trade union and address of its office Office Bearers of the trade unionsIn case already in operation- submit statement of accounts/assets and liability statementOBLIGATIONS: 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 dissolvedRIGHTS AND LIABILITIES Section 15 of the Act provides for certain obligations and liabilities of registered unionsIt also stipulates the purpose for which funds can be utilizedTHE 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, 1947Main provisions of the Act are:Settlement machinery -Provides suitable machinery for investigation, just, equitable and peaceful settlement of industrial disputes and aims to provide justice both to employers and workmen - Collective bargaining, NegotiationAims at promoting security, amity and good relations between employer and employee or between employers and workmen or among workmenPrevent 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 othersProvides 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 downGet the workmen the right of collective bargaining and promote conciliationLists down unfair labor practices on the part of both parties introduced in 1984
MACHINARY FOE SETTLEMENT OF INDUSTRIALDISPUTESKEY 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 coercionNEGOTIATIONCONCILIATION AND MEDIATION: It is facilitated negotiation, essential in public utility services, Binding on parties to the disputesARBITRATION:Voluntary Arbitration: agreement between workman and management, Send copy to the Govt and conciliation officer, publication of agreementADJUDICATION
Compulsory Adjudication LC, IT, NT Reference by the Appropriate Government Sec. 10(1) Award Sec. 18(3) of ID Act S. 2-A, 33-A Publication of awardConciliation (if successful Judicial review - Art. 226 or Settlement) Art. 136 Sec. 18(3) of INDUSTRIAL The I D act DISPUTES Voluntary Arbitration – 10-A Award – 18(2) & 18(3) Judicial review - Art. 226 or Art. 136 Collective Bargaining – If successful – settlement Sec. 18(1) of ID Act
PUBLICATION OF AWARDSPublication is mustTime duration of 30 days is directoryAward comes in to operation 30 days after publicationTribunal to recall the award
CONDITIONS FOR SUCCESSFUL BARGAINING1. Freedom of association Workers and employers are free to form their own associations to represent their interests.1. Stability of union Unions have to be stable for collective bargaining to be effective union is able to honor the agreement.1. Recognition of union by employer Collective bargaining begins after employer recognizes the union that claims to represent the specific group of workers.
CONDITIONS FORSUCCESSFUL BARGAINING4. 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.
NEGOTIATIONSProcess 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 NEGOTIATION1. Preparation Each party must know what it wants.1. Presentation Each party presents its case.1. Exchange and compromise Parties look for possible adjustment or compromise.1. Reaching an agreement Parties sign a written statement on what have been agreed.
WAYS TO SETTLE DISPUTESImpasse: settlement cannot be reachedImpasses may be solved by these alternatives:ConciliationMediationArbitration
WAYS TO SETTLE DISPUTESConciliation 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 DISPUTESArbitration 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 DISPUTESMediation 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.