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  1. 1. INDUSTRIAL RELATIONS IN INDIA Presented By: Minaxi Kataria Research scholar, Gurukula Kangri University, Haridwar
  2. 2. Introduction  The framework for industrial relations in India is formed by a number of legislations in the country that contribute obligations and duties for both employers and workers.  Under the constitutions of India, labour is a subject in the Concurrent List, which empowers both the Central and State Government to enact legislations subject to certain matters being reserved for the center.
  3. 3.  Industrial relations in India revolve around three actors: 1) Employers 2) Workers and their unions and 3) The State/Govt.  This three-pronged(or tripartite) structure tries to balance the power equation between management and workers.  Many tripartite bodies have been set up in India for joint consultation between the representative of government, employers and workers.  These bodies, such as the Indian Labour Conference (ILC),  The Standing Labour Committee (SLC) and
  4. 4.  Industrial Committees provides a forum to discuss and resolve the issues related to labour.  The role of the State/Govt. is protective for labour, the weaker partner in industrial relations. The Govt. is not only a policy maker; it is also an employer in public sector enterprises. It initiates and ensures proper implementation and administration of policies and legislations for workers’ welfare, social security, health and safety.
  5. 5. Labour Administration Machinery  In India the Ministry of Labour & Employment controls labour-related issues. The Ministry has four attached offices, namely: 1) Office of the Directorate General of Employment and Training, New Delhi 2) Office of the Chief Labour Commissioner (Central), New Delhi. 3) Labour Bureau, Chandigarh and Shimla and, 4) Directorate General of Factory Advice Service and Labour Institutes, Mumbai.
  6. 6. Labour Subordinate offices in India 1. Directorate General of Mines Safety, Dhanbad Offices of the Welfare Commissions in India: 1. Employees’ State Insurance Corporation 2. Employees’ Provident Fund Organisation 3. V.V Giri National Labour Institute and 4. Central Board of Workers’ Education.
  7. 7. Industrial Relation in Public Sector Introduction  The emergence of the public sector on the economic scene is a post-independence development. Prior to 1947, public sector investment was limited to the railways, post and telegraphs, ordnance factories, and a few state managed factories like salt manufacturing.  The philosophy and programme of public sector undertaking are incorporated in the Industrial Policy Resolution of 1948 and 1956 .  Industrial Policy Resolution 1948 declared that “a dynamic national policy must be directed to a continuous increase in production by all possible means, side by side with measures to secure its equitable distribution.
  8. 8. Labour policy and public enterprises A brief accounts of various labour policies which have clearly highlighted the role of PSUs are as follows:  First Five Year Plan: the worker in public enterprise stands on a different footing from a worker in private enterprise. He has a dual role of master and servant, master as a citizen of the country and servant as a worker of the undertaking.  Planning Commission view that the “working conditions” and “welfare facilities” available in public sector should act as a “model of the private sector”.  Second Five-Year Plan : In this plan it was stated that “if conditions of work in the public undertaking are expected to set the pace for the private sector, administrators handling such undertaking have to be specially watchful of labour enterprise”.
  9. 9.  The Industrial Policy Resolution of 1956 remarked that, if a socialist democracy labour is a partner in the common task of development and should participate in it with enthusiasm. There should be joint consultation and workers and technicians should, where possible be associated progressively with management.  The Third Plan view that “ the enterprise of the public sector have a special obligation to follow labour policies which are conducive to securing and keeping a competent working force at a reasonable cost”.
  10. 10. Worker Participation in Management in Public Sector Gandhiji advocated the need of workers’ participation in industry. The First Five Year Plan called construction of joint committee for consultation at all levels. The Industrial Policy Resolution 1956 in this context, observed that “in a socialist democracy, laborer as a partner in the common task of development and should participate in it with enthusiasm”. Since then the participative scheme got momentum in the public sector. A few common schemes of workers’ participation that are prevalent in public sector are: 1. Work committee 2. Joint Management Councils 3. Shop Councils; 4. Plant Councils 5. Participation in share capital; and 6. Participation at Board levels.
  11. 11.  Quality of collective bargaining techniques adopted by public sector workers is not different from those of private employees. Unions do not know with whom to negotiate as the managers themselves are the employees of the public enterprise and are themselves governed by several rules and regulations.  State Intervention: With regard to third party intervention in labour disputes, there is no difference in the practices followed between the public and private sectors.  Trade unions allege that the enterprises under central Government receive some preferential treatment which adversely affects labour interests.
  12. 12.  Industrial Disputes: Collective bargaining is used in public sector to resolve the disputes. The bargaining is usually at the plant or corporate level only.  Bureau of Public Enterprises advocates civil service type standard compensation system & work conditions for all state owned units.  INTUC Public sector Union’s Conference: The conference held in 1981 pleaded for further expansion of the public sector. It reiterated that the success of the public sector be measured not on profit index but on social objectives of developing backward regions, generation of employment & protection of existing employment.
  13. 13. It complained that the sector is not managed by persons who have understood and are committed to the philosophy of public sector.  CITU public sector unions’ Conference: Was held in 1987. It also criticized Planning Commission’s recommendation to reduce the role to be played by the public sector. The conference was against the reckless drive for the modernization , mechanization, and computerization of public sector undertakings without objectively finding out their need. CITU further alleged that the Government was yielding to conditionality of IMF & the World bank and defocusing from the objective of making the economy self reliant.
  14. 14.  The National Commission on Labour has suggested the following measures to improve industrial relations in the public sector. i. Responsibilities for improving industrial relations be clearly defined ii. Active participation of managers in implementing labour welfare schemes & adopting practices that improve productivity of workers iii. Provide training to managers & workers in industrial relations & managerial styles. iv. Effective action to enforce labour laws. v] eliminate carelessness and indiscipline. v. Make appointment of managers on a permanent basis. vi. Establish a separate industrial relations department in public enterprise under control of personnel manager.
  15. 15. Evolution of Industrial Relation System Dunlop’s Framework of Industrial Relations System
  16. 16. Introduction  Dunlop considered industrial relations a subsystem of society, distinct from , but overlapping, other subsystems. He suggested that industrial relation system could be divided into four interrelated elements comprising “certain actors, certain contexts, an ideology which blinds the industrial relation system together and a body of rules created to govern the actors at the workplace.
  17. 17. Dunlop’s Framework of Industrial Relation System 1.The actors are : I. Managers and their representatives II. Workers and their organisations III. Specialized government agencies 2. The contexts are: i. Technological characteristics of the workplace and work community ii. The product and factor markets or budgetary constrains that impinge on the actors iii. The locus and distribution of power in the large society.
  18. 18. 3. The ideology: an ideology is a set of ideas and beliefs commonly held by the actors that helps to bind or to integrate the system together as an entity. It is a body of common ideas that defines the role and place of each actor and the ideas that each actor holds towards the place and function of the others in the system. 4. The network or web of rules: these concern procedures for the establishing rules, the substantive rules themselves and the procedures for deciding their application
  19. 19. History and Genesis of Industrial Relation System in India  In India, IR has passed through several social, economic, political and technical factors which influence the IR from time to time.  In the Pre-Independence Era: a. Conditions of employment & wages were very poor b. There were hardly any laws to protect the interest of the workers c. After First World War, the concept of IR changed and the employees resorted to violence and employers to lockouts. d. The Trade Dispute Act of 1929 was enacted by the Govt. to speed up the process of settlement of Industrial disputes.
  20. 20.  In 1938 the Bombay Industrial Relations (BIR) Act was enacted by the Govt. of Bombay to meet the acute Industrial unrest prevailing at that time. The Industrial Court, a permanent machinery for the settlement of dispute was established for the first time.  The BIR Act of 1938 was replaced b the BIR Act 1946, further amended in 1948,1949,1953 & 1956.  After Second World War the state of IR in the country deteriorated.
  21. 21.  The Post Independence Era : a. The Industrial Disputes Act 1947 was enacted. It established a permanent machinery for the settlement of Industrial disputes. b. Various labour laws, concerning, seniority, wage rate, paid holidays, disciplinary matters, social security were enacted from 1947 to 1956. c. In 1957 the Govt. emphasis shifted from legal enactment to voluntary arrangements  The National Commission of Labour (NCL) was appointed by the Govt. in 1966 to look into labour matters. The commission studied and analyzed the IR in India and its various dimensions for the first time both in the organised and unorganised sectors. The issues covered in the report included labour welfare, wages, wage policy, bonus, social security, workers’ training and education, workers’ and employers’ organisations, and industrial relation machinery.
  22. 22.  The period between late 70’s and early 1980’s has been characterised by violence on the Indian front.  To meet the situation of Industrial strife on 26th July 1981 the Govt. issued an ordinance to ban strikes. A new law called the Essential Service Maintenance Act 1981 (ESMA) was promulgated with this the Govt. has wide ranging powers to intervene in Industrial Relation.  The Second National Commission on Labour (2002):the commission submitted its report on analysis of issues related to labour by taking into consideration the impact of globalization, need for change in the existing labour laws, dynamics of the Indian Labour system, progress of industrial development after independence.
  23. 23. Substances of a sound Industrial Relation System  The structures of the economy and labour market  Constitutional provisions, legal framework, and labour standards (international and national; statutory and voluntary)  The structure of trade unions and employers organizations and their linkages, attitudes and approaches  The nature and degree of government intervention  Policies on industrial relations at international, national, industry, firm and workplace levels.  Labour market policies and labour market institutions, labour law administration and dispute relation mechanisms.
  24. 24. Attributes of a sound Industrial Relation System  Harmonizes the interests of ecologically sustainable economic growth with social progress and justice  Generates productive employment  Contributes to improvement in the productivity and quality of goods/services at economical/competitive costs.  Improves the well-being and quality of life of workers and their families.
  25. 25. Essential of Modern Industrial System The industrial relation system in India has undergone a sea change in the post-liberalisation phase. The last two decades have witnessed notable transformation in the way business is done. Physical boundaries between nations are no longer an obstruction for business as: 1. Multinational organisations are emerging in large number and are continuously expanding the concern of employers towards the rights and interest of workers is increasing, and 2. Workers are much more aware of their surrounding environment and are awakened towards their rights as compared to the pre-independence period. 3. New management systems are emerging that are designing novel ways of managing worker-management relations.
  26. 26.  Initially the scope of industrial relations was limited, more or less, to procuring and securing workers’ rights by trade unions.  Now the scope has expanded to all those aspects of work- related activities that require interaction between workers and management.  Workers, through their representatives, participate in decision making in the enterprise to find ways to:  Enhance firm performance  To discuss discipline-related issues, and  Training of workers, etc.
  27. 27.  Changing nature of business has also given to new issues for collective bargaining.  Business organisation are now hiring employees on contract basis as expense incurred on such workers are lesser as compared to permanent employee. Due to this, job security has emerged as an important issue in collective bargaining besides wages, work conditions, etc.  Impact of Globalization: Globalization is the process of interconnecting people across the world on various dimensions including cultural, economic, political, technological and environmental aspects. The process of globalization influences not only macro-level economics policies, but also arrangements at enterprise level.
  28. 28.  Globalization has bought changes in : i) A remarkable shift in the traditional system of industrial relations and changed the dimensions of relationship between management and workers. ii) Expands the boundaries of doing business across nations and bring interdependence between countries. iii) Change in products traded: shift to more skill-intensive products in developing countries and less skill-intensive products in developed countries.( Michael Camdessus, ex MD IMF). To support changes there have been a number of modifications in work arrangements in organisation, which also impact on the employer-employee relationship and has altered the role played by Trade unions.
  29. 29.  IR and technological changes: technological change has been an important aspects that has a significant impact on labour management relations. New technology is adopted by organisation for various reasons like: cost cutting, achieving better quality, time saving, efficiency and gaining competitive advantages.  Adoption of technology affects wide-ranging aspects in organisation including:  Human resource  Job profiles  Work arrangements  Employee attitudes  Training and Industrial relations
  30. 30. Impact of Industrial System  Industrial production and productivity may be affected, growth of industries will be stunted if there is no harmony in industrial relation.  Absence of mutual co operation affects, participation forums and Bargaining Plat forms.  Government also will loose revenue, and may need to spend more to keep law and order around the industry  Due to frequent strikes and conflicts the GDP growth will decrease .  Poor industrial relation indirectly leads to increase in product price and cost.

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