Industrial relations encompasses the relationships between employers and employees within an industry. It includes processes like collective bargaining, worker participation in decision making, and dispute resolution. A sound industrial relations system creates a harmonious environment for economic efficiency through cooperation between management, employees, and the government. The key actors are employers, employees, and the government which regulates industrial relations through laws. Good industrial relations are important as they lead to uninterrupted production, reduced disputes, high employee morale, and less wastage.

1. Industrial Relations
Comprises of two terms: ‘Industry’ and ‘Relations’
Industry means any systematic activity carried on by co-operation between an
employer and his workmen whether such work men are employed by such employee
directly or by or through any agency including a contractor for the production, supply
or distribution of goods or services with a view to satisfy human wants or wishes with
a motive to make any gain or profit; not merely spiritual or religious
“Relations” means “the relationships that exist within the industry between the
employer and his workmen”
Industrial relations defined to include the relationships and interactions between
employers and employees
This perspective of industrial relations cover all aspects of the employment
relationship, including human resource management, employee relations, and union-
management (or labour) relations

2. Industrial Relations
Industrial relations includes the processes through which relationships arise at
and out of the workplace (relationships between individual workers, relationships
between workers and their employer, relationships between employers,
relationships between employers and workers) are expressed (such as, collective
bargaining, workers’ participation in decision-making, and grievance and dispute
settlement), and the management of conflict between employers, workers and
trade unions, when it arises

3. Industrial Relations
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

4. Actors in the IR system
Three main parties are directly involved in industrial relations:
Employer
Any person who employs, whether directly or through another person or agency,
one or more employees in any scheduled employment in respect of which
minimum rates of wages have been fixed
Employers possess certain rights vis-à-vis labors which include:
 Right to hire and fire employees
 Right to relocate, close or merge the factory or to introduce technological
changes which may affect workers’ interests

5. Actors in the IR system Cont..
Employees
Employee is a person who is hired by another person or business for a wage or
fixed payment in exchange for personal services and who does not provide the
services as part of an independent business
Characteristics
 Seek to improve the terms and conditions of their employment
 Exchange views with management and voice their grievances
 Want to share decision making powers of management
Unite to form unions against the management and get support from these unions
Government
Include Central and State government influences and regulates industrial relations
through laws, rules, agreements, awards of Court. It also includes third parties and
labor and tribunal courts

6. Objectives
•To safeguard the interest of labour and management by securing the highest level of
mutual understanding and good-will among all those sections in the industry which
participate in the process of production
• To avoid industrial conflict or strife and develop harmonious relations, which are
an
essential factor in the productivity of workers and the industrial progress of a
country
• To raise productivity to a higher level in an era of full employment by lessening the
tendency to high turnover and frequency absenteeism
• To establish and promote the growth of an industrial democracy based on labour
partnership in the sharing of profits and of managerial decisions

7. Objectives Cont..
• To eliminate or minimise the number of strikes, lockouts and gheraos by
providing reasonable wages, improved living and working conditions, said
fringe
benefits
• To improve the economic conditions of workers in the existing state of industrial
managements and political government
• Socialisation of industries by making the state itself a major employer
• Vesting of a proprietary interest of the workers in the industries in which they are
employed

8. Scope
Scope of industrial relations are quite vast. The main issues involved here include
the following:
1. Collective bargaining
2. Machinery for settlement of industrial disputes
3. Standing orders
4. Workers participation in Management
5. Unfair labour practices

9. Importance/ Significance
 Uninterrupted production
Important benefit of industrial relations is that this ensures continuity of production
Means, continuous employment for all from manager to workers
The resources are fully utilized, resulting in the maximum possible production
results in uninterrupted flow of income
 Reduction in Industrial Disputes
Good industrial relations reduce the industrial disputes
Disputes are reflections of the failure of basic human urges or motivations to
secure adequate satisfaction or expression which are fully cured by good industrial
relations
Strikes, lockouts, go-slow tactics, gherao and grievances are some of the
reflections of industrial unrest which do not spring up in an atmosphere of
industrial peace

10. Importance/ Significance Cont..
 High morale
Improve the morale of the employees
Employees work with great zeal with the feeling in mind that the interest of
employer and employees is one and the same, i.e. to increase production
Every worker feels that he is a co-owner of the gains of industry
The employer in his turn must realise that the gains of industry are not for him
along but they should be shared equally and generously with his workers
In other words, complete unity of thought and action is the main achievement of
industrial peace
It increases the place of workers in the society and their ego is satisfied
It naturally affects production because mighty co-operative efforts alone can
produce great results

11. Importance/ Significance Cont..
Mental Revolution
Helps to have complete mental revolution of workers and employees
The industrial peace lies ultimately in a transformed outlook on the part of both
Both should think themselves as partners of the industry and the role of workers in
such a partnership should be recognized
On the other hand, workers must recognise employer’s authority
It will naturally have impact on production because they recognize the interest of
each other

12. Importance/ Significance Cont..
 Reduced Wastage
Good industrial relations are maintained on the basis of cooperation and
recognition of each other which helps to increase production by utilising the
resources effectively
Wastages of man, material and machines are reduced to the minimum and thus
national interest is protected
It is evident that good industrial relation is the basis of higher production with
minimum cost and higher profits
It also results in increased efficiency of workers