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
• As per labour dictionary Industrial Relations (IR) means the relation between employers and
employees in industry.
• Dale Yoder- IR is the relationship between management and employees, or among employees
and their organization, that characterize or grow out of employment.
• John T Dunlop- IR is interrelation among managers, workers, and agencies of government
• There are three parties in IR
1. Employee, employee representatives or union
2. Employer, employers’ associations or union
3. Government
4. DOMINANT ASPECTS OF INDUSTRIAL RELATIONS
There are two important aspects of the industrial relations scene in a modern industrial society:
(1)cooperation, and (2) conflict.
1. Cooperation
• Modern industrial production is based upon cooperation between labour and capital.
• Labour stands for the workers who man the factories, mines and other industrial
establishment or services.
• Capital stands for the owners of business enterprises who supply the capital and own the final
product.
2. Conflict
• Conflict, like cooperation is inherent in the industrial relations set up of today.
• The prevailing industrial unrest, the frequency of work–stoppages resulting either from
strikes or lock-outs, and the slowing down of production, are the occasional expressional of
the ever-present and latent conflict between workers and the management.
5. Approaches to Industrial Relations
1. Economic Approach
• From the inception stage of trade unionism, the workers and their organisation have been concerned about
protection and promotion of their members' economic interest.
• Employer’s aim was minimising cost and maximising profit.
2. Sociological Approach
• Consider IR as a product of industrial society
• Various components of society like social institution, association, values and standards, customs and tradition,
belief etc. have their impact on IR.
3. Psychological Approach
• It develops from perception of the parties to the same problem.
• Perception may relate to particular situation, persons or issue.
• If the perception of the parties to the same subject are similar or easily reconcilable , IR tend to be smooth .
4. Political Approach
• There are tow perspective a) Wider political perspective and b)Narrower perspective of formation of government
jointly bu employer and trade union by mutual agreement.
• Narrower perspective- the power structure of the union-management relationship is very important.
• Power-structure may be related to internal power relationship within the management and trade union
themselves, and also balance power between them.
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-derived from interactions that govern the employment relationship.
Actors- Management and hierarchy of managers, workers and hierarchy of their
organisation and specialised government and mutually agreed non government agencies
concerned with workers, enterprise and their relationship.
Environment-external economic, technological, political, legal and social forces that
influence employment relationships.
Ideology- philosophy or a systematised body of beliefs and sentiments held by the actors.
7. Criticism of Dunlop’s Model
1. No adequate attention was paid to the conflict aspect of industrial relations.
2. Emphasized the role of three actors in combination in the formulation of rule.
3. Very limited applicability in small sized organisation.
4. Does not provide answer to the impact of the created by union rivalries and factionalism in
the organisation.
5. Does not have much applicability in extraordinary situation created by wars, economic
crisis etc.
6. Did not covered the processes and procedure involved, and the manner in which rules are
established.
8. IILS Model
• The International Institute of Labour Studies developed this model.
• According to this model IR has four dimensions.
1. Environment- condition under which industries or industrial establishments operate. Example:
social, cultural, political etc.
2. Parties- state, workers’ organisations or trade unions, and employers or managerial hierarchies.
3. Process- negotiation, collaboration and resolution of conflict.
• In negotiation , the workers and employers make joint effort to make rules.
• Collaboration involves joint determination of issues of mutual interest in a spirit of
cooperation.
• Resolution is decision of issues of contention between the parties in the form of award or
settlement.
4. Rules- formed by different authorities concerning terms and condition of employment.
9. Criticism of IILS Model
• This model doesn’t clearly explain the impact of multi-unionism and union rivalries.
• This model doesn’t present convincing assessment of the condition in small-sized undertaking
and unorganised sector
• Classification of environment is broad. This model doesn’t explain impact of a particular
factor operating under variable condition.
• This model doesn’t clearly explain the impact of extraordinary situation like war, economic
crisis, political instability, downsizing etc. on the formation of rules.
• This model is silent about behavioural aspect of individual.
10. Development of Industrial Relations in India
• Prior to the first World War
• The relationship between employer and worker was like master and servants
• British government intervened in the field of IR to protect the interest employers.
• From the first World War to Independence
• Strengthening trade union movement and active involvement of eminent nationalist in
the movement.
• Enactment of the Trade Union Act, 1926, the Industrial Employment (Standing order)
Act, 1946, the Industrial Dispute Act, 1947 etc.
• Establishment of permanent tripartite bodies various level.
• Enactment of different protective and social security laws.
• Position since independence
• Strengthening both employees’ and employers’ organisation at various level
• Imposition of legal restriction on strike and lock-out
• Provision of different machineries to prevent industrial disputes
11. Employers’ Organisation and Industrial Relations
• Employers’ federation at national level
• All Indian Organisation of Employers (AIOE)
Established in December, 1932 on initiative of FICCI
Original name was ‘All India Organisation of Industrial employers (AIOIE)’
• Employers’ Federation of India (EFI)
Established in 1933 with joint initiative of Bombay and Bengal Chamber of Commerce
• Standing Conference of Public Enterprise (SCOPE)
Established in 1970
• Council of Indian Employers (CIE)
Established in 1956 with joint initiative of EFI and AIOE
• All India Manufacturers’ Organisation (AIMO)
Established in 1941 on initiative of M. Vishesvarayya
• Federation of Indian Chamber of Commerce and Industry (FICCI)
Established in 1927 by G. D. Birla and Purushottam Thakur on the advice of Mahatma Ghandhi
• Employers’ federation at the industry level
• Regional and state level employers’ federation
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 Legislationsd by P R N Sinha,
Indu Bala Sinha, Seema Priyadarshini
Shekhar; Pearson Educatioon India, 2017
14. Collective Bargaining
• The methods or process of determining the specific condition of labour contract – particularly
wages, hours and working conditions- by direct negotiation between the representatives of one or
more unions on the one hand, and of an employer or association of employer on the other, and
terminating in a collective agreement between both parties.
• Steps in collective bargaining :
1. Presentation in a collective manner, to the employer, their demands and grievances by the employees.
2. Discussion and negotiations on the basis of mutual give and take for settling the grievances and fulfilling the
demands.
3. Signing of a formal agreement or an informal understanding when negotiation result in mutual satisfaction.
4. In the event of the failure of negotiations, a likely reason to strike or lock-out to force the recalcitrant party
to come to terms.
15. Voluntary Arbitration
• The procedure voluntarily chosen by disputant parties, whereby a conflicts settled
by an impartial judge or umpire of their own mutual selection and whose decision,
based on the merits of case, they agree in advance to accept as final and binding.
This is voluntary arbitration with compulsory acceptance of the reward.
• The procedure voluntarily chosen by disputant parties, whereby a conflicts settled
by the decision of an impartial judge or umpire whose decision they are free to
accept. This is voluntary arbitration with voluntary acceptance of the award.
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
• The state has passed enactments requiring the establishment of bipartite committees consisting of the
representatives of workers and their employer at the plant or industrial level.
• These bipartite committees are given the power to settle differences between the workers and the employers as
soon as they appear, and thereby they prevent them from growing into big conflagrations.
• The Industrial Disputes Act, 1947 provides for the compulsory formation of Works Committees in industrial
establishments employing 100 or more persons, if so required by the appropriate government.
• A Works Committee consists of representatives of the workers and employers and is entrusted with the
responsibility "to promote measures for securing and preserving amity and good relations between the
employer and the workmen and, to that end, to comment upon matters of their common interest or concern
and endeavour to compose any material difference of opinion in respect of such matters."
18. Establishment of Compulsory Collective Bargaining
• A form of settling conflicts in which an outside agency or person used as a go between by
the contending parties the agency or the person endeavours to help the disputants arrive at a
mutually acceptable settlement. The role of the conciliator or mediator is limited to one of
counsel and advice.
• Voluntary Conciliation and Mediation- the state sets up a conciliation and mediation
machinery, consisting of personnel trained in the art of conciliating disputes.
• Compulsory Conciliation and Mediation- in many countries, the state does not rest content
with the mare creation of a conciliation service. The state goes a step further; it imposes an
obligation on the parties to submit their dispute to the conciliation service and makes it a
duty of latter to seek to conciliate the dispute.
19. Compulsory Conciliation and Mediation
• A form of setting conflicts in which an outside agency or person is used as
go-between by the contending parties. The agency or the person endeavours
to help the disputants arrive at a mutually acceptable settlement. The role of
the conciliator or mediator is limited to one of the counsel and advice.
20. Compulsory Investigation
• Methods of intervention by the state in settlement of industrial disputes.
• Government assumed power under laws relating to industrial relation
• The main purpose behind the appointment the Court of Enquiry is to find
out relevant facts and issues involved.
21. Compulsory Arbitration or Adjudication
• A legal requirement that empowers the government or prescribed authority to refer an industrial dispute to an adjudication authority whose decision is generally binding
on both the parties and also on those affected by the dispute.
• Two principal forms of compulsory arbitration:-
1. Compulsory reference but voluntary acceptance of the award.
• A dispute is referred to a tribunal or court of Arbitration for adjudication either by government or the parties may required.
• Free to accept or reject the award.
2. Compulsory reference and compulsory acceptance of the award
• It is not only that the government has the power to refer the dispute for adjudication, but also, that the parties are put under a legal obligation to abide by its award.
• Penalties are imposed on parties for non-acceptance and non-implementation of the terms of the award.
• The parties are required to refrain from going on a strike or declaring a lock-out during the pendency of adjudication proceedings and during the period when the award is in
operation.
22. Machinery for the Prevention and Settlement of
Industrial Dispute in India
Statutory Machinery
• Works Committee
• Permanent conciliation service for a
particular geographical area
• ad hoc Boards of Conciliation at the central
and state level
• ad hoc Courts of Inquiry at the central and
state level
• Tribunal and labour Court
• National Tribunal at the central level
Non-Statutory Machinery
• Indian Labour Conference (ILC)
• Standing Labour Committee (SLC)
• Wage Boards
• Industrial Committees
• State Labour Advisory Boards
23. Indian Labour Conference (ILC) and Standing Labour Committee (SLC)
• Both of them are tripartite body and were set up in 1942
• ILC has 44 members and SLC has 20 members at initiation.
• Main objectives for their establishment were:
• Promoting uniformity in labour legislation
• Laying down of procedure fir the settlement of industrial disputes
• Discussing all matters of national importance as between employer and
employee
24. Code of Discipline in Industry
Drafted by a tripartite sub-committee appointed by ILC in 1957
It was an outcome of the efforts of Guljari Lal Nanda, the Union Labour Minister in 1957 to
1958.
It was formally adopted at the 16th session of the Indian labour conference (1958) and came into
force from 1st June, 1958and had been ratified by the employers’ and workers, organisation.
This code was a unique formulation to voluntarily regulate labour management relations
25. The Management and Unions agree
1. No unilateral action should be taken and that disputes should be settled at appropriate level.
2. Existing machinery for settlement of dispute should be utilized with the utmost expedition.
3. There should be no strike or lockout without notice
4. Affirming their faith in democratic principles , they bind themselves to settle all future differences, disputes and grievances by
mutual negotiation, conciliation and voluntary arbitration.
5. Neither party will have to (i) coercion, (ii) intimidation, (iii) victimization or (iv) go-slow
6. They will avoid (i) litigation, (ii) sit-down and stay-in strike and (iii) lock-outs
7. They will promote constructive cooperation between their representatives at all levels as well as between workers themselves
and abide by the sprits of agreements mutually entered into.
8. They will establish upon a mutually agreed basis a grievance procedure which will ensure a speedy and full investigation leading
to settlement.
9. They will abide by various stages in the grievance procedure and take no arbitrary action which would bypass the procedure.
10.They will educate the management personnel and workers regarding their obligation to each other.
26. The Management agrees
• Not to increase work load unless agreed upon or settled.
• Not to support or encourage any unfair labour practices.
• To take prompt action for (i) settlement of grievances and (ii) implementation of settlements,
awards, decisions and orders.
• To display in conspicuous place in the undertaking, the provision of this code in local language(s).
• To distinguish between action justifying immediate discharge and those where discharge must be
processed by a warning, reprimand, suspension etc.
• To take appropriate disciplinary action against its officers and members in cases where enquires
reveal that they were responsible for precipitate action by workers leading to in-discipline.
• To recognize the union as per criteria evolved in 16th session of ILC
27. The Union(s) agrees
• Not to engage in any form of physical duress
• Not to permit not peaceful demonstration
• Not engage members and employees during working hours
• Discourage unfair labour practices like negligence of duty, insubordination etc.
• Take prompt action to implement awards agreements, settlements and decisions
• To display in conspicuous place in the union office, the provision of this code in
local language(s).
• To express disapproval and to take appropriate action against office bearers and
members for indulging in action against the spirit of this code.
28. Industrial Committees
• The establishment of Industrial Committees for specific industries was the
outcome of the 1944 session of the Indian Labour Conference.
• These Committees were set up with a view to considering the special
problems of the industries concerned.
• The first Industrial Committee was set up in 1947 for plantations.
29. The first National Commission on Labour (1969) on the methods of settling industrial disputes
The recommendations of the Commission regarding the methods and machinery for
settling industrial disputes are:
• Collective Bargaining
• Voluntary Arbitration
• Conciliation and Adjudication (Industrial Relations Commission)
30. References:
• Dynamics of Industrial Relations by Mamoria, mamoria, and Gankar
• Industrial relations by Arun Monappa
• Industrial Relations, Trade Unions and Labour Legislationsd by P R
N Sinha, Indu Bala Sinha, Seema Priyadarshini Shekhar; Pearson
Educatioon India, 2017