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Industrial relations 2010


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Industrial relations 2010

  1. 1. Industrial Relations Chandan raj IIeBM, PUNE
  2. 2. Meaning of Industry <ul><li>Industry in Latin it is called industrius meaning industrious, diligent. </li></ul><ul><li>Section 2(j) of the industrial disputes Act defines- </li></ul><ul><li>“ industry” means any business ,trade, undertaking, or calling of employers and includes any calling, service, employment, handicraft, or industrial occupation or avocation of workmen. </li></ul>
  3. 3. <ul><li>In the ordinary sense industry or business means an undertaking where capital and labour co-operate with each other for the purpose of producing wealth and for making profits. </li></ul><ul><li>Nothing prevents the statute from giving a wider meaning. </li></ul><ul><li>The I.D Act is intended to bring about industrial peace and harmony. </li></ul><ul><li>Hence Industry is given a wider meaning. </li></ul><ul><li>The judiciary has interpreted Industry in a number of cases. </li></ul><ul><li>They can be classified as follows: </li></ul>
  4. 4. <ul><li>1 st phase 1953 to 1962-wider meaning </li></ul><ul><li>2 nd phase 1963 to 1978- narrow meaning </li></ul><ul><li>3 rd phase BWSSB v A.Rajappa [ AIR 1978 SC5 48] -reviewed the earlier cases and widest meaning was given </li></ul><ul><li>1978 Parliament Reacts and amends Industry- not brought in to effect so far </li></ul><ul><li>4 th phase-Reservations about the correct ness of BWSSB case-Requested the CJI to constitute a larger bench than BWSSB case to explain what is industry- State of U.P v Jai Bir Singh [ (2005) 5 SCC1] </li></ul>
  5. 5. <ul><li>1 st phase1953 to 1962 </li></ul><ul><li>D.N.Banerji v P.R. Mukherjee [AIR 1953 SC 58] - The judiciary dealt with the question whether Municipality is an industry? </li></ul><ul><li>The SC held though municipal activity could not be regarded as “business or trade” it would fall with in the scope of the expression “undertaking” and it is an industry. </li></ul><ul><li>In Hospital Mazdoor Sabha v State of Bombay The SC held that Hospital comes under then term “undertaking” hence Industry </li></ul><ul><li>Industry includes even activities which have no commercial implications. </li></ul>
  6. 6. <ul><li>Activities carried on by Govt. or charitable organizations will also be industry. </li></ul><ul><li>The SC in this case laid down a working principle: </li></ul><ul><li>“ an activity systematically or habitually undertaken for the production and or distribution of goods or for rendering of material services to the community with the help of employees is an undertaking” </li></ul><ul><li>In this case it was also held that an undertaking to be an Industry must be analogous to trade or business. </li></ul><ul><li>Sovereign or Regal activities are out side the scope of Industry. </li></ul>
  7. 7. <ul><li>Corporation of the city of Nagpur v Its employees AIR1960 SC 675 </li></ul><ul><li>This case was under the C.P and Bearer I.D and Settlement Act, 1947 </li></ul><ul><li>Here unlike the definition of industry in the ID Act the word undertaking in this definition is qualified by the words manufacturing or mining. </li></ul><ul><li>The Judiciary could not use the earlier cases and call Corporation as an Undertaking. </li></ul><ul><li>In this case the SC said that municipal functions are analogous to “business or trade” </li></ul><ul><li>Hence Corporation was held to be an industry. </li></ul>
  8. 8. <ul><li>In Nagpur city corporation case there was another issue raised as to sovereign functions. </li></ul><ul><li>Departments performing sovereign functions are excluded from the definition of Industry. </li></ul><ul><li>If a department performs many functions, some pertaining to industry and other non industrial activities, the predominant functions of the department shall be the criteria for the purpose of deciding whether the department is industry or not. </li></ul><ul><li>The Sovereign functions shall be confined to legislative power, administration of Law and Judicial power. </li></ul>
  9. 9. <ul><li>Trend Between 1963 to 1978 </li></ul><ul><li>In this period the trend was narrowing down the meaning of the term industry. </li></ul><ul><li>University of Delhi-v-Ramanath AIR1963 SC 1873 the SC held that University is not an industry-because: </li></ul><ul><li>Main scheme of an educational institution is imparting education </li></ul><ul><li>Teaching is not with in the purview of industry as there is no commercial motive </li></ul><ul><li>The subordinate staff play a minor or insignificant role in the process of imparting education </li></ul><ul><li>Permitting the insignificant role of the subordinate staff to lend the colour of industry is unreasonable. </li></ul>
  10. 10. <ul><li>Cricket Club of India-v-Bombay Labour union AIR 1969 SC 276 The SC held that Cricket Club is not an Industry. </li></ul><ul><li>The Clubs activity is basically promotion of the game of Cricket. </li></ul><ul><li>It is a self serving institution </li></ul><ul><li>It is not carrying any trade or business. </li></ul><ul><li>In the course of promoting the game it has incidentally earned some profits. </li></ul><ul><li>It is not set up for earning profits. </li></ul>
  11. 11. <ul><li>In the Management of Sardarjung Hospital-v-Kuldipsingh Sethi AIR 1970 SC 1407, the SC held that Hospital is not an industry. </li></ul><ul><li>They overruled the earlier Hospital mazdoor sabha case </li></ul><ul><li>Hospitals run by the Government or Charitable institutions are not run on commercial lines. </li></ul><ul><li>If an hospital or Nursing home is run on commercial basis then it may be an industry. </li></ul><ul><li>The hospitals in question are not industry as they are not run on terms analogous to trade or business. </li></ul>
  12. 12. <ul><li>Bangalore Water supply Sewerage Board-v-A.Rajappa AIR 1978 SC 548 This was a seven judge bench constituted to review all the earlier cases and explain what is the meaning of Industry. </li></ul><ul><li>This case revived the pre 1962 cases and over ruled the post 1962 cases. </li></ul><ul><li>The law developed in this case is an amalgamation of Hospital Mazdoorsabha case and Nagpur city Corporation case, with minor eloborations. </li></ul>
  13. 13. <ul><li>The BWSSB case developed a working principle to determine whether an activity is an industry or not: </li></ul><ul><li>1. Systematic activity </li></ul><ul><li>2. organized by Co-operation between </li></ul><ul><li>employer and employee </li></ul><ul><li>3. For the production and or distribution of </li></ul><ul><li>goods or services; </li></ul><ul><li>Such an activity is an industry </li></ul><ul><li>Absence of profit motive is irrelevant. </li></ul>
  14. 14. Definition of Workman-[Section 2(s)] <ul><li>Workman means any person (including an apprentice) employed in any industry to do any manual, unskilled, skilled, Technical, Operational, clerical or supervisory work for hire or reward, whether the terms of employment be express or implied </li></ul><ul><li>It includes industrial disputes arising out of dismissal, discharge or retrenchment </li></ul><ul><li>It excludes persons subject to defence forces, police force and prison service </li></ul><ul><li>It excludes persons who are mainly employed in managerial or Administrative capacity </li></ul>
  15. 15. <ul><li>The definition does not differentiate between permanent, temporary etc workers </li></ul><ul><li>Conflicting judicial decisions as to the interpretation of the definition </li></ul><ul><li>Burmah shell storage Distribution Co; of India ltd-v-Management staff association(1970)2LLj590 </li></ul><ul><li>May and Baker(I) ltd-v-Workmen(1961)2LLJ94 </li></ul><ul><li>Sundarambal-v- Govt of Goa(1989)1LLJ61 </li></ul><ul><li>The above three decisions gave literal interpretation as per the words used in the definition </li></ul>
  16. 16. Distinction between workman and independent contractor <ul><li>Workman does the work by himself where as an independent contractor gets the work done by others </li></ul><ul><li>Workman is subject to supervision and control of the employer where as independent contractor is not </li></ul><ul><li>Workman is hired by the employer and can be terminated. In case of contractor there is a contract. </li></ul>
  17. 17. <ul><li>Hussainbai-v- Alath Factory union AIR1978 SC 1410 </li></ul><ul><li>The workers employed under a contractor </li></ul><ul><li>The work was done for the principal employer </li></ul><ul><li>The work was carried at the principal employers premises </li></ul><ul><li>The raw materials were supplied by the principal employer </li></ul><ul><li>The workers raised a dispute that they are the workmen of the principal employer </li></ul><ul><li>The I.T adjudicated that the workmen are the employees of the principal employer </li></ul><ul><li>The S.C up holds the decision of the tribunal and held that the contractor is a sham </li></ul>
  18. 18. Industrial Dispute and individual dispute <ul><li>Industrial 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 or with the conditions of labour of any person. </li></ul><ul><li>The dispute has to be between plurality of workman and employer </li></ul><ul><li>Individual workman cannot raise an industrial dispute </li></ul>
  19. 19. <ul><li>A trade union or a number of workmen must rise the dispute </li></ul><ul><li>What number of workmen are required to rise an industrial dispute? </li></ul><ul><li>The SC has said that substantial number of workmen will have to rise the dispute </li></ul><ul><li>The SC has said that substantial number is not majority </li></ul><ul><li>It must however be such number as to lead an inference that the dispute is one which affects the workmen as a class. </li></ul>
  20. 20. Individual dispute deemed as industrial dispute <ul><li>1965 amendment to I.D ACT and insertion of 2A. </li></ul><ul><li>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 not with standing that no other workman nor any union of workmen is a party to the dispute. </li></ul><ul><li>This definition is not applicable to disputes short of termination </li></ul>
  21. 21. <ul><li>Any person used in the definition </li></ul><ul><li>Workmen of Dimakuchi Tea estate-v- Dimakuchi Tea estate (1958)1LLJ500S.C The Court held that the word any person in the definition means a person in whose employment or non employment or terms of employment or conditions of labour the workmen as a class have a direct and substantial interest </li></ul><ul><li>Whether such direct and substantial interest has been established in a particular case will depend on its facts and circumstances </li></ul>
  22. 22. <ul><li>Standard Vacuum refining co; of India ltd-v-the workmen (1960)2LLJ233SC </li></ul><ul><li>this case labour was employed for cleaning and maintenance through contractor </li></ul><ul><li>The regular employees raised a dispute for regularising the contract labour </li></ul><ul><li>The regular workmen have direct and substantial interest in the contract workers </li></ul>
  23. 23. Definition <ul><li>Industrial Relation is that part of management which is concerned with the manpower of the enterprise-whether machine operator, skilled worker or manager. </li></ul><ul><li>Bethel, Smith & Group </li></ul><ul><li>The term Industrial Relations include recruitment, selection and training of workers, personnel management as well as collective bargaining policies and practices. </li></ul><ul><li>Dale Yoder </li></ul>
  24. 24. <ul><li>The dealings or relationship of a usually large business or industrial enterprise with its own workers, with labour in general, with governmental agencies, or with the public. </li></ul><ul><li>Merriam-Webster </li></ul><ul><li>Industrial Relation may be defined as the complex of inter-relations among workers, managers and government. </li></ul><ul><li>Prof. Dulop </li></ul><ul><li> Industrial relations encompasses a set of phenomena, both inside and outside the workplace, concern with determining and regulating employment relationship </li></ul>
  25. 25. Parties to IR <ul><li>There are different types of organizations: </li></ul><ul><li>1.Big organization, small organization, local or international. </li></ul><ul><li>2. They constitute of 3 main actors: </li></ul><ul><li>Shareholder- represented by management, association of employers. Always to gain as much profit and productivity. </li></ul><ul><li>Employees- being represented by trade unions. To get good salary and good working conditions </li></ul><ul><li>Government; being represented by specialize government agencies concern with workers, enterprise and their relationship. Try create industrial harmony </li></ul>
  26. 26. <ul><li>Each of the sectors above always conflicting between one another in order to achieve their objectives. </li></ul><ul><li>. 3. Besides the above 3 main sectors, in the present context academicians have also considered another actor which can also influence the nature of IR i.e Stakeholders </li></ul>
  27. 27. <ul><li>Does industrial harmony between the three sectors can be easily achieve particularly between employees and management?. </li></ul><ul><li>To moderate their conflict, the interference of the government is crucial. Government influence the relationship by introducing rules and regulations and some code of industrial harmony. </li></ul>
  28. 28. What is Industrial Relations? <ul><li>A particular set of phenomena associated with regulating the human activity of employment </li></ul><ul><li>The making and administering of the institutions and rules of work regulation </li></ul><ul><li>Socio-industrial conflict (in all its forms) and its resolution </li></ul><ul><li>Explicit and implicit bargaining between employees and employers </li></ul>
  29. 29. <ul><li>IR EXPLAINS THE RELATIONSHIP BETWEEN </li></ul><ul><li>EMPLOYEE—EMPLOYEE </li></ul><ul><li>EMPLOYEE---EMPLOYER </li></ul><ul><li>EMPLOYER---EMPLOYER </li></ul>
  30. 30. IR COVERS <ul><li>1. Collective Bargaining </li></ul><ul><li>2. Role of management, unions, and government. </li></ul><ul><li>3. Machinery for resolution of industrial disputes. </li></ul><ul><li>4. Individual grievance and disciplinary policy and practice. </li></ul><ul><li>5. Labour Legislation. </li></ul><ul><li>6. Industrial relations training. </li></ul><ul><li>Another term for IR is ‘employee relations’ or ‘human relations’. </li></ul>
  31. 31. Objectives of IR <ul><li>1. To create an atmosphere of mutual faith and trust between workers and management. </li></ul><ul><li>2. To settle Industrial Disputes. </li></ul><ul><li>3. To create the situation of full employment. </li></ul><ul><li>4. To develop industrial democracy. </li></ul><ul><li>5. To solve Labour problem. </li></ul><ul><li>6. To provide social justice. </li></ul>
  32. 32. Parties to IR Employees Employers Employee Employer-employee Employer Associations Relations Associations Government Courts & Tribunal
  33. 33. Scope of IR <ul><li>Labour Relations, ie. Relations between union and management. </li></ul><ul><li>Employer-employees relations, ie. Relations between management and employees. </li></ul><ul><li>Group relations, ie. Relations between various groups of workmen. </li></ul><ul><li>Community or Public relations, ie. Relations between industry and society. </li></ul><ul><li>Promotion and development of healthy labour-managements relations. </li></ul>
  34. 34. Scope of IR <ul><li>Maintenance of industrial peace and avoidance of industrial strike. </li></ul><ul><li>Development of true industrial democracy. </li></ul>
  35. 35. Factors Affecting Industrial Relations <ul><li>Institutional Factors- these include government policy, labour legislation, voluntary courts, collective agreement, employee courts, employer’s federation , social institutions like community, caste, joint family, creed , system of beliefs, attitudes of works, system of power status etc. </li></ul><ul><li>Economic Factors- economic organization like capitalist, communist mixed etc., the structure of labour force, demand for and supply of labour force etc. </li></ul>
  36. 36. <ul><li>Technological Factors- mechanization , automation, rationalisation , computerisation etc. </li></ul><ul><li>Social and Cultural Factors- population, religion, customs and traditions of people, race ethnic groups, cultures of various groups of people. </li></ul><ul><li>Political Factors- political system in the country, political parties and their ideologies , their growth, mode of achievement of their policies, involvement in trade unions. </li></ul><ul><li>Governmental Factors- governmental policies like industrial policy, economic policy, labour policy, export policy. </li></ul>
  37. 37. Contrast between HRM and IR Human Resource Management Industrial Relations Parties : employee and employer Parties : employees, employer, trade unions and government Formulation of objectives, policies, procedures and programmes of HR and implements them. The implementation of HR policies results in IR.
  38. 38. Reformulates the objectives, policies based on industrial conflicts Sound IR - organisational goals Unsound IR – industrial conflicts Demand for change and reformulation of HRM objectives and goals. Individual employee contacts with the immediate superior Employees contact even to top management as a group
  39. 39. Grievance and disciplinary procedures are resorted to, to solve the employee-employer conflicts. Collective bargaining and forms of industrial conflicts are resorted to, to solve the problems.
  40. 40. <ul><li>THEORIES OF INDUSTRIAL RELATIONS </li></ul>
  41. 41. Theories of industrial relations Approaches to organisations Approaches to industrial relations Wider approaches to industrial relations Pluralistic Co-operation Conflict Authoritarian Paternalism Unitary Human resource management Systems Evolution Revolution Marxist Control of the labour process Input Conversion Output Conflict (differences) Institutions and processes Regulation (rules) Social action Labour market Comparative
  42. 42. THEORIES Unitary Approach Industrial Relations Pluralistic Approach Marxist Approach
  43. 43. Unitary Perspective <ul><li>Working practices should be flexible . Individuals should be oriented towards business process improvement , have multiple skills and ready to tackle any task </li></ul><ul><li>If the union is recognized, its role is to further improve communication </li></ul><ul><li>The emphasis is on good relationship and sound terms and conditions of employment . </li></ul><ul><li>Employee participation in workplace decisions is encouraged. </li></ul><ul><li>The skills and expertise of managers should support the end eavours of the employees. </li></ul>
  44. 44. <ul><li>Staffing policies should try to unify, inspire and motivate employees. </li></ul><ul><li>The organization’s objectives should be properly communicated </li></ul><ul><li>Reward system should be designed </li></ul><ul><li>The personal objectives of every individual employed in the business should be discussed with them. </li></ul>
  45. 45. Pluralistic Perspective <ul><li>The firm should have industrial relations and personnel specialists who could give valuable input to managers </li></ul><ul><li>Independent arbitrators should be used to assist in the resolution of disputes. </li></ul><ul><li>Union recognition should be encouraged and union representatives given the scope to carryout their duties . </li></ul><ul><li>Comprehensive collective agreements should be negotiated with the union. </li></ul>
  46. 46. Marxist Perspective <ul><li>Weakness and contradiction intrinsic to the capitalist (individuals persons -money)system would result in revolution and the rise of socialism over capitalism. </li></ul><ul><li>Capitalism would promote monopolies . </li></ul><ul><li>Wages would be minimized to a subsistence level. </li></ul><ul><li>Capitalists and workers would compete to win ground and establish their supremacy, constant win-lose struggles would be evident. </li></ul>
  47. 47. Dunlop’s Theory <ul><li>Industrial relation system consists of 3 players. </li></ul><ul><li>1. management organisation ie; employers, </li></ul><ul><li>2. workers and formal/informal ways they are organised ie. Labour unions </li></ul><ul><li>3. government agencies. </li></ul>
  48. 48. <ul><li>Three factors to be kept in mind </li></ul><ul><li>Environmental or external factors : economic, technological, political, legal and social forces that impact employment relationships. </li></ul><ul><li>Characteristics and interactions of the key players in the employment relationship : labour, management and Government. </li></ul><ul><li>Rules that are derived from these interactions and which govern the employment relationship. </li></ul>
  49. 49. Unitary perspective <ul><li>Assumptions </li></ul><ul><ul><li>Capitalist society </li></ul></ul><ul><ul><li>Integrated group of people within the work organization </li></ul></ul><ul><ul><li>Common values, interests and objectives </li></ul></ul><ul><li>Nature of conflict and its resolution </li></ul><ul><ul><li>Irrational and aberrant ( straying from the path) </li></ul></ul><ul><ul><li>If there is/are conflict, they are Frictional and personal </li></ul></ul><ul><ul><li>Coercion (force) or paternalism (limiting freedom through regulation) </li></ul></ul><ul><li>Role of Trade Unions </li></ul><ul><ul><li>Intrusion from outside </li></ul></ul><ul><ul><li>Historical anachronism (relating to a wrong period) </li></ul></ul><ul><ul><li>Management only forced to accept trade unions in economic relations </li></ul></ul>
  50. 50. Unitary view <ul><li>Organization is: </li></ul><ul><li>A group that united </li></ul><ul><li>Having same objectives </li></ul><ul><li>Single authority </li></ul><ul><li>common value, interest and objectives </li></ul><ul><li>Managers have the right to manage, managers have prerogative to make decisions. Those who challange is not rasional. </li></ul>
  51. 51. Pluralist perspective <ul><li>Assumptions </li></ul><ul><ul><li>Post-Capitalist society, where a relatively widespread distribution of power and authority within the society, a separation of ownership from mgt. a separation ,acceptance and institutionalization of political and industrial conflict </li></ul></ul><ul><ul><li>Coalescence of sectional groups within work organisation </li></ul></ul><ul><ul><li>Differing values, interests and objectives </li></ul></ul><ul><ul><li>Competitive authority/loyalty structures (formal & informal) </li></ul></ul><ul><li>Nature of conflict and its resolution </li></ul><ul><ul><li>Rational and inevitable </li></ul></ul><ul><ul><li>Structural and institutionalized </li></ul></ul><ul><ul><li>Compromise, negotiate and agreement </li></ul></ul><ul><li>Role of Trade Unions </li></ul><ul><ul><li>Legitimate and accepted in both economic and managerial relations </li></ul></ul><ul><ul><li>Internal and integral to organization </li></ul></ul>
  52. 52. Approaches to Industrial Relations <ul><li>Psychological Approach </li></ul><ul><li>Sociological Approach </li></ul><ul><li>Human Relations Approach </li></ul><ul><li>Gandhian Approach </li></ul>
  53. 53. Psychological Approach <ul><li>Issues of industrial relations originated from the differences in the perceptions of management unions and file workers. The differences arise due to differences in personalities, attitudes etc. Even factors like motivation, leadership group goals and individual goals etc are responsible for industrial conflicts. </li></ul>
  54. 54. Sociological Approach <ul><li>Organizations have individuals and groups with differing personalities, educational and family background, emotion, sentiments etc. These differences in individuals create problems of conflict and competition among the members. </li></ul>
  55. 55. Human Relations Approach <ul><li>Human resources are living human beings. They require freedom of speech, thought of expression, movement and control over the timings. This approach implies that relationship between employee and employer as between two human beings. </li></ul>
  56. 56. Gandhian Approach <ul><li>Gandhian approach is based on his fundamental principles of truth, non-voilence and non-possession. Gandhi meant a peaceful co-existence of capital and labour. Trusteeship implies co-operation between capital and labour. </li></ul><ul><li>He advocates these rules to resolve industrial disputes </li></ul><ul><li>Workers should seek redressal of reasonable demands through collective action. </li></ul><ul><li>Trade unions should decide to go on strike taking ballot authority from all workers and remain peaceful and non-violent methods should be used. </li></ul>
  57. 57. <ul><li>Workers should avoid strikes to the possible extent. </li></ul><ul><li>Strikes should be resorted to only as the last resort. </li></ul><ul><li>Workers should take recourse to voluntary arbitration to the possible extent where direct settlement failed. </li></ul>