Characteristics of Industrial Relations in INDIA


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Characteristics of Industrial Relations in INDIA

  3. 3. IntroductionWhat is IR ?• refers to all types of relationships between employer and employees, trade union andmanagement, works and union and between workers and workers.• the complex interrelations among managers, workers and agencies of thegovernments• the process of management dealing with one or more unions with a view to negotiateand subsequently administer collective bargaining agreement or labour contractCharacteristics of IR in India• Employer/Management in Retrospect and Historically used to consider TradeUnions as a necessary evil of the Industrial System• The trade union perceive their main task is to challenge and oppose decisios ofemployer/mangement• Trade unions are poorly organised in the country• The parties are largely in disagreement over the cope of collective bargainingand various issues to their negotiation process• Bargaining between employers and unions is very much centralized• The employers are highly organized• The Indian Industrial Relations is changing over time
  4. 4. First Phase ( 1947-66; 1st & 2nd five-year plans):• Import-Substitution Industrialization• National Capitalism• Formation of large employment-intensive public enterprises• Largely centralized bargaining with static real wages.• Relative industrial peace• Growth of public sector unionism.• Government controlled & regulated IR.Second Phase ( 1967-80; 4th & 5th five-year plans):• Considerable slowdown in employment growth & declining real wages.• Crisis in IR system : massive strikes & industrial conflict, multiple unionism &decline in strength.• Government loosing control over the IR system.Third Phase ( 1981-91; 6th & 7th five-year plans):• Variation in wage growth: skilled versus unskilled, labour productivity increases,period of “jobless” growth.• Rise of „independant enterprise unionism, several city/regional IR systems operating• Government slowly withdrawing from IR systemEvolution of IR in India
  5. 5. Central Labour ActsLaws related to Industrial RelationsThe Trade Unions Act, 1926The Trade Unions (Amendments) Act, 2001The Industrial Employment Act, 1946The Industrial Disputes Act, 1947Laws related to WagesThe Payment of Wages Act, 1936The Payment of Wages (Amendment) Act, 2005The Working Journalist Act, 1958The Minimum Wages Act, 1958The Payment of Bonus Act, 1965Laws related to Working Hours, Conditionsof Services and EmploymentThe Factories Act, 1948The Plantation Labour Act, 1951The Mines Act, 1952The Contract LabourAct, 1970The Sales Promotion Employees Act, 1976Laws related to Equality and Empowerment of WomenThe Maternity Benefit Act, 1961The Equal Remuneration Act, 1976Laws related to Deprived and Disadvantaged Sections of the SocietyThe Bonded Labour System (Abolition) Act, 1976The Child Labour (Prohibition & Regulation) Act, 1986Laws related to Social SecurityThe Employees‟ State Insurance Act, 1948The Unorganised Worker‟s Social Security Act, 2008Laws related to Employment and TrainingThe Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959The Apprentices Act, 1961
  6. 6. Trade Unions Act, 1926:• Till 2001, any 7 workers can form a union; amended in 2001; 10% or 100 workers in a unit,whichever is less, minimum still 7• Distinction between „registration‟ (with the government) & „recognition‟(by the employer asbargaining agent); neither mandatory under this Act, (but some states have laws).• Bargaining agent: „secret ballot‟ versus „check off‟ (government verifies membership)Industrial Disputes Act, 1947:Objective: To settle industrial disputes & secure industrial peaceProblems:1. No procedures to determine the „representative‟ union wihin a single bargaining unit2. Employers not legally obliged to bargain with unions3. Thus, no incentives for either party to engage in collective bargainingMost contentious issue:1. Firm employing more than 100 (reduced form 300) will need state government‟s „priorpermission‟ before any prposed layoffs2. Since nearly impossible to downsize during downturns, firms reluctant to hire permanentemployees during upturns3. These laws partly responsible for pushing newly created jobs into low productivity firms4. Recent OCED computation (2007): India‟s laws more stringent than Brazil, China & all buttwo OCED countries.IR Acts and Laws
  7. 7. Trade UnionWhat is a Trade Union?• According to Lester, a trade union is “anassociation of employees designed primarily tomaintain or improve the condition ofemployment of its members”.• A trade union performs two types of functions-militant(strikes,lockouts,gheraos) andministrant (to provide the employees withbenefits in times of need).
  8. 8. Evolution of Trade Union in India1890-1918•Trade unions were largely sectarian in character, they lacked definite aim and had no striking power.1919-1923•During this period many ad hoc unions disappeared and several large and medium sized unions came intoexistence.•India’s first central organisation of labour, the AITUC was set up in 19201924-1935•This period saw the rise of Left-wing Trade unions as the political situation in India was favourable for thereception of Communist ideology.•Number of Acts like Mines Act,Trade Unions Act,Workmen’s Compensation Act were passed1936-1939•There was phenomenal increase in the number of trade unions and their members due to the passing ofthe Government of India Act which gave increased representation of labour in the Legislative Assemblies.1940-1946• Second World War started in 1939 and it led to a rift in AITUC leadership wherein many leaders in AITUCwanted to form a seperate Union thus giving rise to INTUC in May 1947After1947•There was large-scale unionisation of white-collar workers whereby white collar workers joined thealready existing unions of blue-collar workers.•National Commission on Labour was set up in 1966.
  9. 9. Case Study : Heavy Engineering Corporation• This case represented a typical problem on the crucial issue of recognition and the inadequacy oflegal provisions on recognitionSummary• A new tripartite wage agreement was signed between the management ofHEC, the Bihar Labour Commission and the Hatia Project Workers‟Union• The other agreement rejected the agreement and declared a strike till theagreement was abrogated and few others terms and conditions weregranted• Then strike, lockout and confining followed claiming a completedisruption of normal functioning• Then the CE justified the signing of the agreement with the HPWU and theproduction resumed after a long settlement
  10. 10. Case Study : Bharat Heavy Electricals Ltd.• This case upsets the traditional view of industrial relations as one between management andlabour and how the lack of recognition affected the organisationSummary• Initially there was a single union, BHEL Employees‟ Association affiliated to the INTUC• A union representative was elected and all the elected persons formed the union executive• A split occured in the union and by 1986 six unions emerged in the plant and it was decidedthat the voting became based on the maximum numer of votes for a union• A year later INTUC split causing major problems and the recognised union was reduced toless then the majority, but still INTUC refused to concede• The AITUC was joined by other non-recognised unions in feelings of frustration at themanagement‟s refual to listen to their grievances, who appeared to discuss issues with theINTUC union• The execcutive‟s association organise a meeting of all unions but the INTUC unions refusedto attend and claimed that the executives couldnot enforce discipline because of theircorruption• Althogh the association got some recognition form the top management, the feelings offrustration and insecurity continued to haunt the managers
  11. 11. What is Collective Bargaining• a method by which problem of wages and conditions of employment are resolved peacefully andvoluntarily between labour and management• a process of bargaining between the employers and their workers by which they settle their disputesamong themselves relating to employment or non-employment or terms of employment or conditionsof labour of the workmenSubject-matter of Collective Bargaining :Collective Bargaining has two pronged concerns• Chalking out a broad contract of employment relationship between employers and workers• The administration of the contractPre-requisites for Collective Bargaining :Effective negotiations and enforacement requires a systematic preparation of the base or ground forbargaining which involves the following steps• Recognition of the Bargaining Agent• Deciding the Level of Bargaining• Determining the Scope and Coverage of Bargaining• Spirit of Give and Take• Good Faith and Mutual AgreementCollective Bargaining
  12. 12. History of Collective Bargaining in India1920-1950• Bargaining was in the stage of infancy• It was not a very common method of regulating labour-managementrelations in India1951-1969• In this period actual emergence of bargaining was witnessed• It was established as a method of settlement of industrial disputes anddetermination of terms and conditions of employment1970onwards• Collective bargaining took a more general form• It widened its scope from plant or enterprise level to the industry or thenational level• During this period some new trends in Collective Bargaining also developed
  13. 13. Collective Bargaining with all Unions of AI8 recognized unions , Major problem with pilotguild but other unions entangled in itGovt. intervention, allocate negotiator (N.I.T)Pilot guild negotiation success but other unionsrevolted against itHigh court intervention and negotiationcompleted after C.B. with all other unions
  14. 14. What are Industrial Disputes ? Any disputes or differences between employers and employees, or between employers and workmen,or between workmen and workmen, which is connected with the employment or non-employment orthe terms of employment or with the conditions of labour, of any person It is disagreement and difference between two disputants, labour and management, on any matterconcerning them individually or collectivelyWeapons used by labour and management during times of industrial disputesIndustrial DisputesIndustrial DisputesWeapons of Labour Weapons of ManagementEmployers‟s Association Termination of ServiceLock OutStrikes Boycott Picketing GheraoPrimary SecondaryEconomicsGeneralStay-inSlow down
  15. 15. Percentage Distribution of Industrial Disputes by Causes0510152025303519631973198319911992
  16. 16. Case Study : Reliance Industries• This case study depicts that how a single and simple decision can create anforeseen reaction in the companySummary• The company‟s leading organiser was transferred from the regional officeto company‟s godown• As a result the workers get very agitated and were pressurized to resign• The union protested and the dispute thus raised was referred to conciliation• After several meetings and reference to the indsutrial tribunals, theproblems was solved with the intervention of the Labour Secretary and Ministryof State for Labour
  17. 17. Employee Grievances• A grievance means any sort of discontentmentor dissatisfaction arising in an employee relatedto the enterprise where he is working. Ithappens when an employee feels somethingthat has happened or is going to happen isunfair,unjust or inequitable.
  18. 18. Case Study : Indian Oil Corporation• This case revealed that politicalisation was a result more of an abdiction of responsibility by themanagement in the matter of industrial relationsSummary• The first recognised union demanded and signed an agreement with themanagement for payment of bonus based on profits and was not affiliated toany central organisations• The dismissed employees formed another union affiliating to CITU, demandedreognition form the management, which was refused• Elections were conducted, indicating the majority for the first union, but thesecond union claimed that the results were manipulated• Following this, several troubles and agitations broke out again and the firstunion changes its affiliation form AITUC to INTUC• The managemnt agreed to secret ballot elections once again but the corruptionand collusion with agencies, serious violations of the promotion policy were in thelist of grievances.
  19. 19. Worker’s Participation in Management• Workers Participation in Management is a systemof communication and consultation, either formalor informal, by which employees of anorganisation are kept informed about the affairsof the undertaking and through which theyexpress their opinion and contribute tomanagement decisions.• It is distribution of social power in industry sothat it tends to be shared among all who areengaged in the work rather than concentrated inthe hands of minority.
  20. 20. Case Study : Fertilizers and Chemicals Travancore Ltd.• This case reveals that how several enterprises inroduced suggestions‟ schemes or minorconsultation with the unions and held these up as examples of participative cultuteSummary• The managers were easily accessible to employees and discussions were heldwith them without any formal agreements• The management decided to open up organisational system, conductingsessions with senior managers, middle managers and employees – this increasedthe man power• Several joint management action groups were constituted, persisted inbringing up new ideas related to grievances and conditions of service• In complex issues, study teams comprising union office-bearers together withthe management were established to collect data, analyse report, before decisionswere taken
  21. 21. Case Study : Jaipur Metals and Electricals Ltd.• This case depicts that how the agendas of workers and their committees and theirproceedings became beneficial for the enterprise in aparticular contextSummary•• In 1923 the company flourished in the manufacture of house service metres inspite of therestriction on the raw materials• In the mid 1940s the company made losses, a special scheme to rationalise employment wasadopted to make partial recovery• The government of Rajasthan took over its management and financial institutions, which hadacquired majority share-holding in the undertaking through debt onversions and a marginalprofit was earned• Then new chief executive began negotiations with the workers which culminated theagreement – a majority of the equity was passed to the workers through a credit operative• A major financial restructuring was achieved with highest-ever turnover of Rs 11 crore• The management created several other commitees for planning, production, sales and thesuggestions were made by the committee and was approved by the managing director
  22. 22. Labour WelfareWhat is Labour Welfare• Labour welfare activity in India was largely influenced by humanatarian principles and legislation• During early period of industrial development, efforts towards worker‟s welfare was made largely bysocial workers, and other religious leaders, mostly on humanatarian grounds.Before Independance The movement to improve the working conditions of Indian Labour started with the passing of thefirst Indian Factories Act in 1881 Provisions relating to the better ventilation, cleanliness and for preventing over crowding in factorieswere also made The establishment of the International Labour Organization in 1919 was another important landmarkin the history of labour welfare movement in our countryAfter Independance The labour welfare movement acquired new dimensions and it was relaized that labour welfare had apositive role to play in increasing productivity and reducing industrial tensions Various labour welfare activities were incorporated in diferent five year plans
  23. 23. Case Study : Durgapur Steel Plant• This case discusses how the representatives of the union discusses with the management thevaruous problems facing the industrySummary• The participation by the worker‟s representatives before the reconstitution had not been ofmuch significance• The worker‟s representative from Durgapur Steel Plant has been complaining that he has notbeen receiving notices and agenda of the meetings in time• In 1972 Joint Consultative Machinery was established and it functioned for one yearsatisfactorily• The Joint Consultative Machinery suggested that in view of the difficulty of the State LevelCommittee operating effectively, the Plant Level Commitee itself should be converted intotri-partite body with the Government participating in it in addition to the management andunions
  24. 24. Case Study : Tata Iron and Steel Company• This case discusses how the committees operate withindefined areas and how they have helped in settlement ofdisputesSummary• The first committee, Joint Works Commitee ceased tofunction in 1919 due to the fact that the company felt that anincreasing measure of association of employees with themanagement is desirable• In 1957 the two committees were decentralized into fivezonal committees each covering production problems
  25. 25. Future of IR in India• In our presentation we have discussed Industrial Relation Strategy vide which we couldknow different strategies for industrial relations and could also know how the IndustrialDisputes aree settld under the provisions of Acts as applicable to the concerned dispute.• In our discussions “Future of Industrial Relation in India”, we shall discuss the currentscenario of industrial relation in India and how workers influence such relations• From the various reports certain issues are emerging which are posing challenges to thethree factors viz., the employer, the employee and the government- Strengthening collective bargaining by trying to determine a solebargaining power for negotiation- Gaps that are occuring as a result of the variations act as enacted by Stateand Central Government- Workers participation in management and failure of these schemes to belooked into.• Keeping in mind the above issue and the three factors we have to evaluate and decidefuture strategy, which is to be adopted in managing personnel and industrial relations. Thestrategy will depend on the values, objectives, structures available and the environment inwhich they have to work
  26. 26. AcknowledgementsWe express our gratitude and heartful thanks to Professor (Mrs.) Tania Shawfor her co-operation, immense support and guidance in preparing thispresentation.We are also thankful to our Librarian for providing us valuable suggestionsabout books for preparing this presentation.We are also grateful to all our team members in the project for theircooperation throughout the project .And last but not the least we are very thankful to the internet.