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Industrial Relations
Chapter: 1 (Introduction)
Introduction
Everyone who derives an income through work or who becomes
involved in the organization and management of emp...
Definitions
Definitions of Industrial Relations:
Broadly, the term “industrial relations” is used to denote the collective...
Historical context of Industrial Relations in Bangladesh (contd.)
The history of industrial relations system of this count...
Historical context of Industrial Relations in Bangladesh
Subsequently, the Labour Disputes Act, 1965 and Trade Unions Act,...
Features of Industrial Relations
Industrial relations are the relations between two parties connected with industrial /
ma...
Three partners of Industrial Relations
• Trade Union:
Trade unions try to protect interest of workers, they insist upon th...
Factors affecting Industrial Relations (contd.)
1. Industrial Factors:
These include items like state policy, labour laws,...
Factors affecting Industrial Relations
4. Technological Factors:
These include methods, type of technology used, rate of t...
Theories of Industrial Relations (contd.)
I. Unitary Approach:
The employer and employee work as a harmonious unit and the...
Theories of Industrial Relations (contd.)
III. Classical Approach (Marxist Model)/ Radical Approach:
Karl Marx considered ...
V. Social Action Approach:
Its origins is in Weberian Sociology. Under this model, the actors own definitions of
the situa...
Significance of Good Industrial Relations (contd.)
Good industrial relations refer to harmonious relations between the lab...
4. Collective Bargaining:
Cordial industrial relations are extremely helpful for entering into long-term
agreements as reg...
Objectives of Industrial Relations (contd. )
The primary objectives of industrial relations are improving the economic
con...
4. To minimize labour turnover and absenteeism by providing job satisfaction to the
workers and increasing their morale.
5...
Two dominant aspects of Industrial Relations
According to Douglas McGregor, conflict and cooperation are two states in the...
Industrial Relation System in Bangladesh (contd.)
Legal framework of trade union
The Constitution of Bangladesh provides t...
Trade union in EPZs
As mentioned earlier, trade unions were not allowed in EPZs until 2004 on the
ground that introducing ...
Role of employers’ organizations
Section 176(b) of the Labour Act 2006 provides that employers shall have the right
to est...
Structure and system of labour administration in Bangladesh
There are various authorities and agencies responsible for lab...
Difference of industrial Relations between
developed and developing countries (contd.)
Subject Developing countries Develo...
Subject Developing countries Developed countries
7. Class-consciousness 7. Workers are not well
informed about this.
7. Wo...
Causes of poor industrial relations
The following are briefly the causes of poor industrial relations:
1. Mental inertia o...
Challenges of Industrial Relations
• Privatization: It will benefit management. But the employees have to be skilled and
e...
Measures for improving Industrial Relations (contd.)
Good and harmonious industrial relations create a sense of belongingn...
6. Constructive attitude: Management must recognize unions as the spokesmen
of the workers’ grievances and as custodians o...
Conclusion
It is evident that good industrial relations is the basis of higher production with
minimum cost and higher pro...
Industrial Relations (Chapter 1: Introduction)
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Industrial Relations (Chapter 1: Introduction)

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Industrial relations are the relationship between management and employees or among employees and their organization. Industrial relation deal with either the relationships between the state and the employers and the workers organization or the relation between the occupational organizations themselves. The ILO uses the expression to denote such matters as freedom of association and the protection of the right to organize, the application of the principles of the right to organize, and the right of collective bargaining, collective agreements, conciliation and arbitration and machinery for cooperation between the authorities and the occupational organizations at various levels of the economy.
The term Industrial Relations refers to relationship between Management and Labor or among Employees and their organizations that characterize or grow out of employment. Theoretically speaking, there are two parties in the employment relationship labor and management. Both parties need to work in a spirit of cooperation, adjustment and accommodation. In their own mutual interest certain rules for co-existence are formed and adhered to. Over the years, the State has also come to play a major role in Industrial Relations one, as and initiator of policies and the other, as an employer by setting up an extremely large public sector.

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Industrial Relations (Chapter 1: Introduction)

  1. 1. Industrial Relations Chapter: 1 (Introduction)
  2. 2. Introduction Everyone who derives an income through work or who becomes involved in the organization and management of employees at work is immersed in the practice of industrial relations. The overall quality of the employment relationship and changes in industrial relations can have an important effect on the overall performance of an organization. Industry The manufacturing or technically productive enterprises in a particular field, country, region, or economy viewed collectively, or one of these individually. A single industry is often named after its principal product; for example, the auto industry.
  3. 3. Definitions Definitions of Industrial Relations: Broadly, the term “industrial relations” is used to denote the collective relationships between management and the workers. The two terms, labour- management relations and employer-employee relations are synonymously used. Bethel and associates defined “Industrial relations is that part of management which is concerned with the manpower of the enterprise”. J. Henry Richardson “industrial relations is an art, the art of living together for purposes of production”.
  4. 4. Historical context of Industrial Relations in Bangladesh (contd.) The history of industrial relations system of this country can be traced back to the Trade Union Act, 1926 introduced by British rulers. The main purpose of the Act was to provide for the registration of trade unions and in certain respects, define the law relating to registered trade unions. But the Act did not contain any provision regarding strikes. In 1929 the Trade Disputes Act put restrictions on strikes in public utility services. The Act provided for the establishment of tribunals to adjudicate upon the labour disputes. In 1947 the Industrial Disputes Act placed the conciliation and adjudication machinery for the settlement of industrial disputes on a permanent footing. In decade following partition of India, the then Pakistan government mostly adopted the colonial legacy with regard to labour laws. However, a major development took place in the legal framework of industrial relations in 1965 when the East Pakistan Trade Unions Act, 1965 was enacted repealing the Trade Unions Act, 1926. But the Act could not facilitate healthy growth of trade unions as it was more restrictive on the freedom of association and right to organize. The period between 1947 and 1969 was thus marked by a host of repressive laws and witnessed labour agitation and widespread industrial unrest.
  5. 5. Historical context of Industrial Relations in Bangladesh Subsequently, the Labour Disputes Act, 1965 and Trade Unions Act, 1965 were integrated into one law, namely Industrial Relations Ordinance, 1969, which made provisions for recognition of collective bargaining agents for establishment or group of establishments. Thus, the Ordinance was a landmark development in the evolution of collective bargaining in Bangladesh. After the emergence of Bangladesh, development of industrial relations was strained by imposition of martial laws, proclamation of state of emergency at different times, and promulgation of host of other laws and policy which inhibited the growth of sound industrial relations in Bangladesh. Since independence of Bangladesh, no major development took place in the history of labour legislation till the enactment of the Bangladesh Labour Act, 2006. The Bangladesh Labour Act, 2006 is a major and comprehensive enactment regarding industrial relation system-- partly as a response to demand of stakeholders for improving regulatory framework on trade union and partly by demand for codification of existing labour laws in order to avoid overlapping and inconsistencies. It brought some significant changes in industrial relation system. However, the Act has not been able to bring the desired changed due to its in-built weaknesses, suspension of many labour rights under state of emergency and lack of institutional capacity to implement the laws.
  6. 6. Features of Industrial Relations Industrial relations are the relations between two parties connected with industrial / manufacturing activity, namely employer and employees. Such relations are the outcome of the employment relationship in Industry. Features of Industrial Relations are explained below: 1. The concept of industrial relations is complex and multi- dimensional. It is also a dynamic and developing concept. 2. In the olden days, industrial relations were cordial and peaceful. However, at present, they are not so due to increase in the number of industrial workers, growth of trade unions, growing demands of workers etc. 3. Industrial relations do not function in a vacuum. The attitude and approaches of employers, employees and trade unions are directly related ‘to, industrial relations. 4. Industrial relations lead to “industrial peace” or “industrial unrest”. Both terms are used in relation to industrial relations. Cordial industrial , relations bring industrial peace i.e. a period when industrial disputes, strikes, lock-outs, etc. are absent and production activity is being conducted in a regular and continuous manner. 5. Cordial industrial relations are always beneficial to all concerned parties whereas absences of such relations are harmful to all parties and even to the national economy.
  7. 7. Three partners of Industrial Relations • Trade Union: Trade unions try to protect interest of workers, they insist upon the development of cultural and educational qualities of there members. • Employers & their organizations: They try to protect the interest of employers, to create healthy industrial atmosphere, so that the objectives of the organization may be achieved. They try to get full co-operation of workers for achieving this objective. • Government: The government plays an important role in establishing better industrial relations. Government passes various laws to protect the interest of both employers and employees.
  8. 8. Factors affecting Industrial Relations (contd.) 1. Industrial Factors: These include items like state policy, labour laws, voluntary codes, collective bargaining agreements, labour unions, employers organizations / federation etc. 2. Economic Factors: These include economic organisations (socialist, communist, capitalist) type of ownership, individual, company whether domestic or MNC, Government, co- operative, ownership, nature and composition of work force, the source of labour supply, labour market relative status, disparity of wages between groups, level of unemployment etc. 3. Social Factors: Social Factors like social group (caste system or joint family system) creed, social values, norms, social status etc. influence industrial relations in the early stages of industrialization.
  9. 9. Factors affecting Industrial Relations 4. Technological Factors: These include methods, type of technology used, rate of technological change, R & D activities, ability to cope up with emerging trends, etc. These factors considerably influence the patterns of industrial relations as they are known to have direct influence on employment status, wage level, and collective bargaining process in an organization. 5. Psychological Factors: Such factors include items pertaining to industrial relations like owners‟ attitude, perception of workforce, their attitude towards work, their motivation, morale, interest, alienation, dissatisfaction, occupational stress and boredom resulting from man-machine interface. 6. Political Factors: Political institutions, system of government, political philosophy, attitudes of government, ruling elite and opposition leaders towards labour problems affect the state of Industrial Relations. For instance, in the various communist countries, prior to the adoption of new political system, the industrial relations environment was very much controlled by the Government.
  10. 10. Theories of Industrial Relations (contd.) I. Unitary Approach: The employer and employee work as a harmonious unit and they work for a common goal. Hence, there is no possibility of conflicts arising between them and they work as a team to attain the common goal. The concept of loyalty is privileged in the Unitary Approach because of its paternalist roots. II. Pluralist Approach: It was developed in the United States of America by John R Commons. He considered society as complex due to the presence of multiple interest groups with their own goals. Hence, conflict is inevitable in the system and there are possibilities of compromise based on the interaction between different stakeholders. Collective bargaining was used as a mechanism to sort out the conflict between the employer and employees. The presence of trade union in an organization can serve as an interest group to protect the interest of employees.
  11. 11. Theories of Industrial Relations (contd.) III. Classical Approach (Marxist Model)/ Radical Approach: Karl Marx considered industrial conflict as a part of the broader social conflict between classes and used it to explain the fundamental historical process of change and development in human society. He was concerned with certain macro economic processes and deep-rooted inequalities in society as a whole, and not with specific industries or firms. Marx divided the society into two classes a. Capitalists, who own the means of production, and b. Proletariat, who own nothing but their own labour power. IV. Human Relations or Neo-Classical Approach: It denotes that conflict is an aberration and not the natural state of human society. This aberration occurs when tendency of the industrial society is to treat worker as an isolated individual, and deprive him of all control over his environment. This loss of mooring and control is a major source of conflict.
  12. 12. V. Social Action Approach: Its origins is in Weberian Sociology. Under this model, the actors own definitions of the situations in which they are engaged and these are taken as an initial basis for the explanation of their social behaviour and relationships. This model points out the reciprocal nature of the relationship between social structure and behaviour. One of the most important features of the social action models is the attitude it adopts towards social theory. VI. Systems Approach (developed by John Dunlop): The systems approach views the industrial relations system as a sub-system of the society or the total social system. The society is seen as providing certain external influences and constraints but not as completely dominating industrial relations. VII. Gandhian Trusteeship Approach: Gandhi’s views on industrial relations are based on his fundamental principles of truth and non-violence and non-possession. Out of these principles evolved the concept of trusteeship on which his philosophy of industrial relations rests. Theories of Industrial Relations
  13. 13. Significance of Good Industrial Relations (contd.) Good industrial relations refer to harmonious relations between the labour union and the management in an organisation. In other words, in such a situation, there is absence of industrial disputes between the two parties and presence of understanding and cooperation between them. Thus, industrial relations in an organization must be harmonious or cordial. Such relations will lead to the following benefits: 1. Industrial Peace: Cordial industrial relations bring harmony and remove causes of disputes. This leads to industrial peace which is an ideal situation for an industrial unit to concentrate on productivity and growth. 2. Higher Productivity: Due to cordial industrial relations, workers take interest in their jobs and work efficiently. This leads to higher productivity and production of the enterprise where they are working. Thus, they will contribute to the economic growth of the nation. 3. Industrial Democracy: Sound industrial relations are based on consultation between the workers and the management. This assists in the establishment of industrial democracy in the organisation which motivates employees to contribute their best to the success of the organisation.
  14. 14. 4. Collective Bargaining: Cordial industrial relations are extremely helpful for entering into long-term agreements as regards various issues between labour and management. Such collective bargaining agreements and association of employees in decision-making process will bring about cooperation between labour and management. 5. Fair Benefits to Workers: The workers should get sufficient economic and non-economic benefits to lead a happy life. It is possible when the relations between workers and management are cordial and the productivity is high. 6. Higher Morale: Good industrial relations imply the existence of an atmosphere of mutual co-operation, confidence, and respect within the enterprise. In such an atmosphere, there are common goals, which motivate all members of the organisation to contribute their best. 7. Facilitation of Change: Sound industrial relations, by creating a climate of co-operation and confidence, make the process of change easy. Hence, full advantage of latest inventions, innovations and other technological advancements can be obtained. Significance of Good Industrial Relations
  15. 15. Objectives of Industrial Relations (contd. ) The primary objectives of industrial relations are improving the economic conditions of workers, increasing productivity and achieving industrial democracy in industrial enterprises. The Labour Management Committee of the Asian Regional Conference of the International Labour Organisation (ILO) has recognised certain fundamental principles as objectives of social policy in governing industrial relations with a view to establishing harmonious labour-management relations. They are: 1. Good labour-management relations depend on employers and trade unions being able to deal with their mutual problems freely, independently and responsibly. 2. The trade unions and employers and their organisations are desirous of resolving their problems through collective bargaining, though in resolving such problems the assistance of appropriate government agencies might be necessary in public interest. 3. To check industrial conflicts and minimize the occurrence of strikes, lockouts and gheraos.
  16. 16. 4. To minimize labour turnover and absenteeism by providing job satisfaction to the workers and increasing their morale. 5. To establish and develop industrial democracy based on workers partnership in management of industry. 6. To facilitate government control over industries in regulating production and industrial relations. 7. Provide an opportunity to the workers to participate in management and decision making process. 8. Raise productivity in the organisation to curb the employee turnover and absenteeism. 9. Establish and nurse industrial democracy based on labour partnership in the sharing of profits and of managerial decisions. 10. Socialize industrial activity by involving the government participation as an employer. Objectives of Industrial Relations
  17. 17. Two dominant aspects of Industrial Relations According to Douglas McGregor, conflict and cooperation are two states in the continuum of industrial relations. i. Cooperation: The dynamics of cooperation lie in the recognition of a sphere of common interest. Cooperation between union and management, the two actors in the industrial relations drama, differing in economic power, wealth and education, depends primarily on their ability and willingness to make contacts at points of mutual concern. ii. Conflict: Generally, some degree of conflict between the management and the union is taken to be inevitable. Conflict is essential to survival of both union and management, and is not always bad and has certain constructive aspects also. But a recurring conflict needs to be channelized along the least destructive lines. And for this, conflict resolution measures – both voluntary and statutory –must be taken for good industrial relations to prevail and industrial harmony to be achieved.
  18. 18. Industrial Relation System in Bangladesh (contd.) Legal framework of trade union The Constitution of Bangladesh provides the basic legal foundation for formation of organizations by workers and employers. The main statutory framework for such organizations is the Bangladesh Labour Act 2006. Procedure of registration and cancellation of registration of trade union The Bangladesh Labour Act 2006 provides for registration of trade unions with a view to rendering lawful organization of labour to enable collective bargaining. Through its registration, the trade union acquires certain benefits including legal existence as an entity separate from its members. New role for trade union organizations The role of trade union is changing to meet the demands of a changing society and labour well-being. Apart from their traditional role of intervention through collective bargaining, the trade unions of Bangladesh are also being organized to introduce social dialogue and framework agreement system; address social issues in the workforce.
  19. 19. Trade union in EPZs As mentioned earlier, trade unions were not allowed in EPZs until 2004 on the ground that introducing trade unions in such areas would undermine the working environment there. However, a limited right of trade unionism was allowed through the enactment of the EPZ Workers Association & Industrial Relations Act, 2004, which provided that the workers in industrial units within the territorial limits of a Zone shall have the right to form association to engage in industrial relations from Nov 1, 2006. Problems of trade unions in Bangladesh Currently trade unions are beset with problems. The following are some of the reasons I. •Politicization or political affiliation of trade unions prevents them from becoming strong partners in collective bargaining. II. Lack of solidarity among trade unions, provincialism, patronage of vested interest groups and internal conflict are some of the reasons that have led to the fragmentation of trade unions. III. •Workers at the grass root level are not aware of their rights. Industrial Relation System in Bangladesh (contd.)
  20. 20. Role of employers’ organizations Section 176(b) of the Labour Act 2006 provides that employers shall have the right to establish and subject only to the rules of the organization concerned, to join associations of their own choosing primarily for the purpose of regulating the relations between employers and workers or employers and employers. Role of the State in maintaining industrial relations Industrial relations system in Bangladesh is characterized by the predominant role played in it by the government. Being the single major employer and manager, the industrial relation policies which it pursues with regard to public sector enterprises, have a decisive effect on the state of industrial relations throughout the country. Industrial Relation System in Bangladesh (contd.)
  21. 21. Structure and system of labour administration in Bangladesh There are various authorities and agencies responsible for labour administration in Bangladesh. The Ministry of Labour and Manpower is responsible for policy formulation and overall supervision of the departments and offices under it. The Ministry of Labour and Manpower has under it the following implementing agencies:  •Department of Labour,  •Department of Inspection for Factories and Establishments;  •Bureau of Manpower, Employment and Training (BMET);  •Minimum Wages Board;  •Labour Appellate Tribunal and seven labour courts Industrial Relation System in Bangladesh
  22. 22. Difference of industrial Relations between developed and developing countries (contd.) Subject Developing countries Developed countries 1. Level of employment 1. Level of employment is very poor. 1. Maintain satisfactory level of employment. 2. Family size 2. Here family size is big. 2. Here family size is small. 3. Democracy within the society 3. Here democracy is instable. 3. Democracy is quite stable in nature. 4. Educational qualification 4. Workers are not well educated. 4. Workers are highly qualified. 5. Productivity 5. Here productivity is low among the workers. 5. Here productivity is high among the workers. 6. Profitability 6. Profit margin is less because of low productivity. 6. Being highly productive the profit is good.
  23. 23. Subject Developing countries Developed countries 7. Class-consciousness 7. Workers are not well informed about this. 7. Workers are very much conscious. 8. Wage level 8. Here the workers need to struggle for it. 8. Here it is at quite satisfactory level. 9. Training facilities 9. Don’t have adequate facilities for it. 9. Worker get enough training facilities. 10. Exploitation of workers 10. Workers exploitation is a common phenomenon. 10. Workers are rarely exploited. 11. Dual subordination 11. Workers work in more than one job. 11. Workers are settled in a job. Difference of industrial Relations between developed and developing countries
  24. 24. Causes of poor industrial relations The following are briefly the causes of poor industrial relations: 1. Mental inertia on the part of management and labour; 2. An intolerant attitude of contempt towards the workers on the part of management. 3. Inadequate fixation of wage or wage structure; 4. Unhealthy working conditions; 5. Indiscipline; 6. Lack of human relations skill on the part of supervisors and other managers; 7. Desire on the part of the workers for higher bonus and the corresponding desire of the employers to give as little as possible; 8. Inappropriate introduction of automation without providing the right climate; 9. Unduly heavy workloads; 10. Inadequate welfare facilities; 11. Dispute on sharing the gains of productivity; 12. Unfair labour practices, like victimization and undue dismissal; 13. Disregard towards labour low; 14. Inter-union rivalry; 15. Absence of responsible trade unionism;
  25. 25. Challenges of Industrial Relations • Privatization: It will benefit management. But the employees have to be skilled and efficient enough to survive in the employment war. • Information technology: Industries need to update their information technology to adapt with the changing situation. • Downsizing: Companies are compelled to downsize their business because of heavy competition. • Reengineering: Companies need to redesign their business structure due to globalization effect. • Workforce diversity: Without multidimensional skill it is very difficult to survive in the competitive market. • Import liberalization: It may cause destruction of export-oriented industries and increase in unemployment. • Globalization: It necessitates economic integration and consequent removal of other factors from the business environment. • Change in laws: Rapid change in laws create problems for the firms to cope up with the changing situation.
  26. 26. Measures for improving Industrial Relations (contd.) Good and harmonious industrial relations create a sense of belongingness and group-cohesiveness among workers and also a congenial environment resulting in less industrial unrest, grievances and disputes. 1. Sound personnel policies: Policies and procedures concerning the compensation, transfer and promotion, etc. of employees should be fair and transparent. 2. Participative management: Employees should associate workers and unions in the formulation and implementation of HR policies and practices. 3. Responsible unions: Trade unions should adopt a responsible rather than political approach to industrial relations. 4. Employee welfare: Employers should recognize the need for the welfare of workers. They must ensure reasonable wages, satisfactory working conditions, and other necessary facilities for labour. 5. Grievance procedure: A well-established and properly administered system committed to the timely and satisfactory redressal of employee’s grievances can be very helpful in improving Industrial relations.
  27. 27. 6. Constructive attitude: Management must recognize unions as the spokesmen of the workers’ grievances and as custodians of their interests. The employer should accept workers as equal partners in a joint endeavor for good industrial relations. 7. Communication channel: Creating a proper communication channel to avoid grievances and misunderstandings among employees. 8. Education and training: These two very important things should be imparted to the employees for the well being of the organization. 9. Mutual trust: Both management and labor should help in the development of an atmosphere of mutual cooperation, confidence and respect. 10. Sincere implementation of agreements: The agreements between the management and the unions should be enforced both in letter and spirit. 11. Governments’ role: The government should make laws for the compulsory recognition of a representative union in each industrial unit. It should intervene to settle disputes if the management and the workers are unable to settle their disputes. Measures for improving Industrial Relations
  28. 28. Conclusion It is evident that good industrial relations is the basis of higher production with minimum cost and higher profits. It also results in increased efficiency of workers. Good industrial relations reduce the industrial disputes. Industrial relations has become one of the most delicate and complex problems of modern industrial society. Industrial progress is impossible without cooperation of labors and harmonious relationships. Therefore, it is in the interest of all to create and maintain good relations between employees (labor) and employers (management).Thus industrial relation measures followed should be given prime emphasis which may lead to an effective relationship between management and employees. An effective industrial relation results in the increase of the productivity of the organization.

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