The document discusses several key aspects of India's labor market and industrial relations system. It notes that the Indian economy has transitioned from import substitution post-independence to economic liberalization. The labor force is predominantly casual and informal, with only 13% in regular wage employment. There are concerns around job creation, skills, mobility, productivity and competitiveness. Industrial relations involve multiple parties like workers, management, unions and the government and are influenced by economic, social, political and technological factors. The state plays a role in regulating labor issues through various laws and policies.

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2.  Tertiarization of economy and casualization of
work force are the dominant theme.
 Some key concerns are job creation, skill
development, labour mobility, labour commitment,
work culture, productivity, and competitiveness.
 Two phase of Indian economy are 1.inmort
substitution era post independence (1947-
1991)and 2.Era of economic liberalization.
 NB: Employment in the large percentage of labour
force in casual occupation.

3.  Only 13% of the labour force is in the regular
wage
2001 census
POPULATION >1 BILLION
LABOUR WORKFORCE <400 MILLION
ORGANIZED SECTOR 7%
UNORGANIZED SECTOR 93%
SELF EMPLOYED 55%
REGULAR WORKFORCE 13%
CASUAL WORK FORCE 32%
EMPLOYMENT IN GOVT. AND >18MILLION
PBLIC SECTOR
EMPLOYMENT IN PRIVATE SECTOR >9MILLION
UNIONIZED WORKFORCE 4%
WORKFORCE COVERED BY 2%
COLLECTIVE BARGENING

4.  Declining stability and security in employment.
 Declining labour intensity
 Declining influence of trade union.
 Increasing in home based work
 Shift from contract of service (employment)to
contract for service (self-employment)
TRENDS IN LABOUR MARKET
•Squeeze in recruitment in government sector.
•Growing casualization and contractulization of
labour
•Falling employment elasticities.
•Merger and acquisition getting more prolific.

5. Aspect Primary/Agriculture Secondary/manfr. Tertiary/hitech.
Wealth based Land Money/capital Knowledge/mind
Human energy Muscle Machine skill mind./brain
Relationship Master & Servant Employer- Partnership
employee
Leadership Authoritarian Paternalistic Consultative/
participative
Motivation Fear Favor Fairness
Communicatio Top down/one way Two way Open/transparent
n
Productivity Hard work/control Hard Smart
over work & worker work/control over work//control
work & worker over
work/empowerme
nt
Employment inducement investment involvement
Dev
Mgmt. Direction & control Direction & Direction &
approach control control

6.  Technology and Job creation
 Skill development
 Labour mobility
 Labour commitment
 Work culture
 Productivity and competitiveness

7.  Human relation: relation between or among
human being.
 Employee Relation: Relations between employer
and employee as an individual.
 Employment relation: Relation between parties in
an employment context, either as individuals or a
collective. Employment relation covers relations
between management and employees, both in
unionized and non unionized situation.
 Industrial relation/Union management relation:
collective relation between management and trade
union.

8.  Industrial relations means relationship between
management and workmen in a unit or an
industry.
 In its wider connotation, it means the
organization and practice of multi-pronged
relationships between workers and management,
unions and workers, and the unions and
managements in an industry.
 industrial relations is that part of management
which is concerned with the manpower of the
enterprise.

9.  The four main parties who are actively associated with
any industrial relations system are the workers, the
managements, the organizations of workers and
managements, and the State.
 But the scope of industrial relations cannot merely be
confined to common labour-management relations or
employer-employee relations.
 It is a comprehensive and total concept embracing the
sum total of relationships that exists at various levels of
the organizational structure.
 More specifically, it connotes relations among workers
themselves within the class of employees, relations
among the managements within the managerial class,
and relations between the two distinct classes of workers
and management.
 It consists of a complex network of relations that arise
out of functional interdependence between workers and
managements and between industrial organizations and
society.

10.  ECONOMIC FACTORS  SOCIAL FACTORS
 Working condition  A supportive environment
 Wage and salary structure requires both economic ,social
 Bonus and profit sharing and psychological rewards
 Job security  TECHNOLOGY FACTORS
 Social security  Scientific technique for production
 High degree of modernization
 Scientific management.
 POLITICAL FACTORS
 Improving the international relations
 INSTITUTIONAL FACTORS
 Implementing international laws
 Implementation of labour law
 Improving national political situation.  Quality of collective bargaining
 Health of relation among employees
 attitude and degree of morale to work
 Concept of caste, color creed and
religion.

11.  Development of healthy employee-employer
relationship
 Maintenances of Industrial Peace.
 Development of industrial democracy.
Industrial Democracy: the employer must have the right and assess to
the management in running, managing and controlling the industry. It
is the management of the workers, for the workers and by the workers

12.  EMPLOYEE-EMPLOYER RELATION:
o A smart wage and salary administration.
o Employees career prospects promotion and transfer
o Retirement benefits and medical facilities.
o Training and development of employees.
 LABOUR MANAGEMENT RELATION
o There exist a strong collective bargaining machinery
o An efficient industrial dispute machinery
o Good provision for welfare measure and fringe benefits
 INDUSTRIAL PEACE AND PRODUCTIVITY
o Try to maintain healthy and improve union management
relationship
o To ensure there is no strike, logout or layoff
o To ensure there is minimum man day loss per year
o To look after the up-gradation of technology and methods
production.

13.  ASPECTS ID INDUSTRIAL DEMOCRACY
o To improve public relationship
o To bring humanism and professionalism in
the industry
 LIAISON FUNCTION
o To have a strong liaison with state and central
gov. through labour dept. and also with local
authority
o To do constant employees level of motivation
and attitude survey
o To participate in different labour conference
and arrange workshop on developing healthy
IR

14.  Two basic parties,  Four important
employee and employer parties, employee,emplo
 Concerned with yer,trade union and
formulation, objective government.
policies, procedures and  Aim to improve IR by
program for human providing all these
resources and its proper facilities and benefits for
implementation. which the employees are
legally entitled.
 To ensure industrial
peace.

15.  My Boat attitude: Get off, if u don’t like it.
 Shared boat attitude: We sail together. Don’t rock
the boat.
 Our boat attitude: it Is our own common
enterprise. Let us combine our effort to better it
 Your boat attitude: with sense of ownership and
pride, the purpose is to let employee
wholeheartedly contribute to the cause of
enterprise.
The approaches to IR must focus attention on solving problem on
solving problems and understanding the current environment.

16.  Dunlop considered industrial system as the subsystem of
society.
 It is divided in to four subsystem
 Certain actor
 Certain context[technological characteristics, product ,
market]
 An ideology(to bind the industrial system together)
 A body of rules: created to govern the actors in the work
place. It meant the regulation, policies of management.

17. Output
Input Processes
ACTORS
Bargaining
ENVIRONMENTAL Conciliation
CONTEXTS RULES
Arbitration
Lawmaking etc
IDEOLOGY

18.  IR system as a study of the institutions of job
regulation. The institutions may be external or
internal
 Internal regulation being the code of work rules,
internal procedures, wage procedures, grievances
handling.
 While trade union considered as external
regulation.

19.  Margerison developed two conceptual levels of IR,
one intra plant level the outside of firm.
 At one intra plant level there could be three type
of conflict, distributive, structural and human
relation.
 The major causes of such conflicts are related to
job contentment, work task and technology.
 Strategies adopted are collective bargaining,
human relation management analysis and
structural analysis.
 Industrial relations are also affected by social
factors like urbaniation,social mobility, housing
and transport problem, stress and strain,
gambling,drinking and other social evils.

20.  Its stresses the way in which an individual influence
the social structure and makes the society.
 It attempts to study the behavioral influence
 Behavior at work get influenced by quality of HRM
and nature of technology.
 Some times industrial peace itself may not ensure
healthy relationship.
 May be there are other internal tension among
employees which affects their behavior.

21.  The problem in IR arise due to perception of
management, Union and workers.
 These perception is about the person, the
situation, the issue involved in the conflicts.
 Workers satisfaction depends on many factors like
nature of work, attitude, working condition, wage,
job security, and relation with co workers.
 If the worker is not satisfied, he may be dragged
to dissatisfaction and this can be expressed in
strikes destruction…
 so industrial peace is the result of correct
perception and attitude of both parties.(mgmt and
workers)

22.  Take care of your employees they will take care of
your organization.
 management must learn and know the basic needs
of employee and should always try to win the
people.
 Basic need may be economic need and
psychological needs
 Human relation approach has it’s origin in the
Hawthorne experiment as it highlight certain
policies and technique to improve the morale and
efficiency of employees.
 Industrial conflict are due to inadequate
communication & lack of understanding of
interpersonal factors like personality factors.

23.  There should be bipartite machinery in every
industry and every unit of the industry to settle
difference from time to time with active
encouragement from government.
 A strong promoter of collective bargaining.
•Peaceful co existence of capital and labour
•Trust, nonviolence and non-possession
•Each individual worker is a human being
•Labour management is a powerful stimulus to
economy
•Industrial peace is an important condition for
development.
• conflict can be resolved by non violence, and non
cooperation.

24.  It says there is only one source of authority and that is
management. They own and therefore they control.
 For unitarist employers are law unto themselves.
 Employers perceives themselves as provider of job, income
and social security.
 They believe that conflict is unnecessary.
 It prevails in large scale of unorganized structure and small
scale industries.
 This perspective is based on assumption that an organization
is composed of a group of people under a single unified
loyalty structure.
 Conflict is irrational and trade union is avoidable.

25.  It is based on the assumption that the
organization is composed of individuals who
make up distinct sectional group, each with it’s
own interest, objectives and leadership.
 This perspective sees conflict between
management and employees as rational and
inevitable.
 Employees can organize themselves in to union to
collectively safeguard their interest.
 So the pluralist perception is that conflict is
necessary but it can be and need to be managed.

26.  Marxian perspective is based on the notion that the
production system is privately owned and motivated by
profit.
 Control over production is exercised by managers who
are agents of owner.
 Marxist theory believe that class conflict is necessary
for social change.
 It seems industrial conflict is synonymous with
political, and social conflict.
 In a capitalist system, conflict is the must.
 Marx seethe role of trade union in protesting against
exploitation.
 The radical approach favors the transformation of trade
union into revolutionary organization.

27.  An industrial relations system consists of the whole
gamut of relationships between employees and
employees and employers which are managed by the
means of conflict and cooperation.
 A sound industrial relations system is one in which
relationships between management and employees
(and their representatives) on the one hand, and
between them and the State on the other, are more
harmonious and cooperative than conflictual and
creates an environment conducive to economic
efficiency and the motivation, productivity and
development of the employee and generates
employee loyalty and mutual trust.


29.  Employers: Employers possess certain rights vis-à-vis
labors. They have the right to hire and fire them.
Management can also affect workers’ interests by
exercising their right to relocate, close or merge the
factory or to introduce technological changes.
Employees: Workers seek to improve the terms and
conditions of their employment. They exchange views
with management and voice their grievances. They also
want to share decision making powers of management.
Workers generally unite to form unions against the
management and get support from these unions.
Government: The central and state government
influences and regulates industrial relations through
laws, rules, agreements, awards of court ad the like. It
also includes third parties and labor and tribunal courts

31. The state sets the framework within which
industrial relations exist and it is the state
alone which has the law-making powers
which may substantially change the rules
affecting the employment relationship.
(Crouch 1982)
 When labour and equipments in the whole
or any part of an industry are rendered idle
by a strike or lockout, national dividend must
be suffer in a way that injures economic
welfares.

32. STATE
3rd party intervention
TRADE EMPLOYER
UNION ASSCIATION

33. The State as Employer
The State as Provider of Dispute Resolution
Mechanisms
The State as the State

34. 1. Market Individualism (State supports the
market)
2. Liberal Collectivism (principal of
‘voluntarism’ & ‘pluralism’ – State
facilitates)
3. Corporatism (State has power, capitalist
focus, unions coerced into compliance)
4. Bargained Corporation (‘Social partnership’)

35.  Industrial relation are an integral aspect of
social relation to influence the social force.
 To promote healthy employee and employer
relationship.
 When the labour situation the state can’t be
silent and hence bound to interfere.
 Different articles in constitution has made it
compulsory for the state to intervene in certain
labour issues.
 Minimum wage act-1948
 Industrial dispute act-1947
 Payment of bonus act- 1965

36.  To look after the interest of the weakest section
of the society, different articles says….
 Article 39:equal pay for equal work. Health and
strength workers and children are not abused.
 Article 42: state shall make provision for
securing just and human condition for work
and for maternity relief.
 Article 43: to secure living wage condition to
maintain descent standard of life for workers.
Evolution of Indian industrial relation started from the vedic
period, it also depicted in Arthashastra and later on the Mogul
period and British Raj period also.

37.  In pre independent era Indian worker does not
enjoy and freedom of expression or association.
 British employers were exploiting Indian workers
 Till the end of 1st world war there were no trade
union.
 Trade dispute act 1929
 Due to influence of ILO, workmen compensation
act-1923, trade union act 1926 and trade dispute
act 1917 were passed to provide significant
protection to workers.
 In post independent period INTUC was formed in
1947. industrial dispute act also enacted (formed)
in the same year

38.  During 3rd five year plan, emergency caused by
Chinese war, in 1962 industrial true resolution
was adopted. And bonus act also passed in 1965
 During 4th and 5th five year plan most emphasis
was given on collective bargaining and state
ensure that productivity should be increased
through labour management cooperation.
 In 6th five year plan industrial policy act resolution
was being recommended in 1956.(it is necessary
that proper amenities and incentives should be
provided for all those engaged in industry and the
living and working condition of employee must be
improved.

39.  The role of government in IR depends on its
ideological (socialist, communist, capitalist and
neo-capitalist) persuasion, political (neo colonial,
democratic, dictatorship or military regime) and
socio-economic protectionist or neoliberal
,export oriented policies) orientation
 Early age- Middle age- Modern age.

40. Import substitution Industrialization Export oriented industrialization
 In south Asia with inward strategy  In south east Asia with export
 In its first stage, development of oriented industrialization
low technology consumer and  1st stage focus on low cost
industrial goods for local production of low cost production
consumption. of light manufacturing goods for
 Purpose is to promote exports largely financed by FDI
industrialization locally.  Given their small market and lack
 2nd stage is about promoting the of local capitals they can’t sustain
development of heavy industries on ISI state.
like railway, atomic energy, steel  The 2nd stage is characterized by
for future growth emphasis on technological up
gradation of industries in the first
stage if EOI
The Change of Economic situations of the country ultimately change
the industrial system

41.  Policies: the policies framework can be varied depend of the country’s
stage and level of development.
 Logic of peace and cooperation during the period of planned economy and
ISI
 Logic of competition as economies are liberalized to integrate them with
global economy. The focus is on market not on labour and efficiency.
 Logic of co-opetition, the focus is on efficiency and equity.
 Legislations: through international labour standards.
 Institutions: may be of Facilitative, Executive or judicial.
 Facilitative institutions for developing and operationalizing proactive labour
market.
 Executive also responsible for enforcing the law through labour
administrative machinery through central and state govt.
 Most of the industrial dispute can be solved in labour court,

42. Definition of the state
The ‘State’ can be defined as an institutional system of political
government, with a monopoly over tax and the legitimate use of force
in a society. Our set of state institutions includes:
- the legislature (parliament);
- the executive (government ministers);
- the judiciary (courts);
- central administration (the civil service);
- the police and army, which from time to time have played an important
role in industrial relations, especially industrial disputes;
- local government; and
- specialist agencies such as, in the employment field, industrial
tribunals, conciliation and arbitration services, equal opportunities
commissions and health and safety inspectorates

43. Theories of state intervention
(Review Chapter 1 for general theories of IR and the role of the State)
In Western democratic society the distribution of power is often mediated
through organised social interests (i.e. pressure groups).
Types of pressure groups:
- environmental groups (e.g. Greenpeace)
- cause groups (e.g. RSPCA) Royal Society for the Prevention of
Cruelty to Animals
- professional associations (e.g. Indian Medical Association)
They also include:
- trade unions (e.g. Indian Council of Trade Unions)
- employer associations (e.g. Business Council of India)
- business organisations in their own right
How they influence the political process
- lobby government, ministers and parliamentarians
- provide submissions to parliamentary and party enquiries
- use media campaigns and researched articles to persuade public and
political opinion

44. The way political power is distributed and used in industrial relations can
be seen through four different theories of state intervention.
1. Pluralist theories
Key authors: Truman (1956); Dahl (1961)
Focus: Competing social groups
Key tenets:
(i) The state is made of different institutions reflecting different needs and
interests of society.
(ii) Government is the provider of rules, regulations and policies which
pressure groups representing social interests try to influence.
(iii) Some pressure groups have greater resources for political influence,
but none is capable of prevailing over others in all circumstances.
(iv) As a consequence, politics is not governed by any single power
centre, but is instead dispersed amongst ‘multiple centres of power’.
(v) The conduct of government is about resolving the conflicting interests
of pressure groups, with political actors using a ‘set of rules’ or
commonly agreed processes for resolving conflicts.
(vi) State policy outcomes are the result of the balance of competing
organised social interests.

45. Diagram of ‘Pluralist’ view of democratic political processes
Organised
Social Policy
Interests State Outcomes
Application to industrial relations:
The state intervenes in industrial relations to reconcile competing social
interests in the workplace.
These interests can favour employees, employers, the state itself, or all
three. None is dominant all the time. It depends on the issue provoking
the intervention and the type of political resources each player can
bring to bear at the time.

46. 2. Elitist theories
Key authors: Bottomore (1966); Nordlinger (1981)
Focus: Elite domination
Key tenets
(i) Societies are invariably dominated by a minority (or ‘elite’), who take
the major political and economic decisions.
(ii) Such elites gain their dominant position as a result of
- ownership of economic resources
- religious dogma or doctrine
- control military power
- the position they hold in large-scale organisations (e.g. political
parties, public bureaucracies, trade unions, business organisations)
(iii) State policy outcomes are determined by what serves the interests of
ruling elites.

47. Diagram of ‘Elitist’ view of democratic political process
Policy
Outcomes
State
Bourgeoisie
elite
Application to industrial relations:
The state intervenes in industrial relations to accommodate the interests
of the ruling elite.
These interests can favour employees, employers, the state itself, or all
three, with none dominant and much depending on what will serve the
interests of those in control of the relevant organisations and
resources.

48. 3. Marxist theories
Key authors: Miliband (1969); O’Connor (1973)
Focus: Class divisions
Key tenets
(i) In advanced capitalist societies people are divided into two competing
social classes—the ‘bourgeoisie’ who own the means of production and
the ‘proletariat’ who have nothing to sell but their labour.
(ii) Because the bourgeoisie is economically dominant in society it is able
to wield decisive political power.
(iii) Because the bourgeoisie is able to wield decisive political power the
state acts as an instrument of class domination to maintain its
dominant position.
(iv) The state is put in this position because its freedom of action is
limited by its dependence on a successful economic base for its
continued survival.

49. Diagram of ‘Marxist’ view of democratic political process
Policy
Bourgeoisie State Outcomes
Proletariat
Application to industrial relations:
The state intervenes in industrial relations to secure the class interests of
the bourgeoisie in the workplace.
The interests served favour employers only.

50. 4. Corporatist theories
Key authors: Schmitter (1974); Lehmbruch (1977)
Focus: Incorporated producer groups
Key tenets
(i) The state is the main provider of rules, regulations and policies.
(ii) Because of their control over income, employment and investment,
producer groups (i.e. trade unions, large business corporations and
employer associations) have the power to disrupt or frustrate the
conduct of state economic and social policies.
(iii) The state grants rights of ‘incorporation’ to producer groups in the
determination of economic and social policies as a means of soliciting
their support and cooperation for the conduct of such policies.
(iv) The outcome of state economic and social policies is the
consequence of negotiations with major producer groups.

51. Diagram of ‘Corporatist’ view of democratic political process
State Policy
Outcomes
Other organised Producer
social interests Groups
Application for industrial relations:
The state intervenes in industrial relations to maintain control over
national economic and social policies.
These interests may favour employers, trade unions, or the state, but
typically all three, depending on the ability of producer groups to deliver
on commitments in agreements reached with the state.
These interests are favoured over other organised social interests, but
are not necessarily always contradictory to such interests.

52. Role played by the state in industrial relations (1)
1. Provider of procedural and substantive rules
The state exerts influence over industrial relations system by regulating
relations between the actors. This regulation (laws) is the substantive
and procedural rules of the industrial relations system.
(a) Substantive rules directly regulate the terms and conditions of
employment. They include:
- federal legislation for minimum standards(e.g. annual leave, sick leave, equal
employment opportunity, working hours, termination of employment, and the
form in which wages are paid)
- state legislation (e.g. occupational health and safety)
- federal legislation for federal public sector (wages and conditions)
(b) Procedural rules regulate the behaviour of actors participating in
industrial relations bargaining. They include:
- federal and state legislation establishing industrial tribunals
- federal and state legislation giving tribunals power to legally recognise
participating actors and to establish procedures for resolution of disputes.
- federal and state legislation giving tribunals power to negotiate and ratify
bargaining agreements

53. Role played by the state in industrial relations (2)
2. Ability to manipulate social and economic environment
The state impacts industrial relations by its social and economic policies,
and its ownership and management of public services and utilities:
(a) Social and economic policies (examples only).
- Welfare policies impact on labour mobility and employment levels
- Education policies impact on skill levels and occupational mobility
- Health policies impact on absenteeism and health and safety
- Taxation policies impact on wage rates and work incentives
- Monetary policies impact on employment levels and real wage rates
- Tariff policies impact on employer profits and collective bargaining outcomes
- Employment policies impact on employment and dispute levels
(b) Ownership and management of public services and utilities: all
require direct state involvement in setting wages and working
conditions for employees. These services and utilities include:
- infrastructure e.g. ports, roads, railways and bridges
- essential services e.g. hospitals and schools
- public utilities (unprivatised) e.g. water, power, gas and public transport
- public corporations e.g. insurance and telecommunications companies

54. Role played by the state in industrial relations (3)
3. Influence as a major employer
The state is influential as a major employer, directly responsible for
employees’ wages and conditions. In Australia, public sector
employees work at federal, state and municipal levels, and (where the
service is not privatised) provide:
- immigration services - judiciary services - education service
- pension services - port services - health services
- welfare services - transport services - prison services
- unemployment services - road maintenance - military services
- law enforcement - garbage collection

55. Role played by the state in industrial relations (4)
4. As a signatory to international conventions
The state is influential because of obligations under international treaties
and membership of international bodies. Many obligations involve
social and labour commitments. In Australia the power to enter into
these obligations is defined by the Constitution.
The most important international organisations for industrial relations are :
- International Labour Organisation (ILO); and
- Organisation for Economic Cooperation and Development (OECD).
The most important membership obligations to these organisations are:
- the forty-hour working week
- equal pay for work of equal value
- anti-discrimination in employment and occupation.

56. Role played by the state in industrial relations (5)
5. Through the attitudes and policies of political parties
In pluralist democracies, political parties influence industrial relations.
In India major Indian political parties have different attitude toward labour
issues.