Introduction –INDUSTRIAL RELATIONS

( Employer Employee Relations)

Evolution of Industrial Relations

We have, in our introductory part of this lecture, discussed in short the Industrial
Relations, it requisites, objectives and how to foster good Industrial
Relations. Now we will discuss evolution of industrial relations, which
will comprehend the background of industrial relations showing the way
as to how Industrial Relations became so important to run industry or
establishment.

In this chapter we will look Industrial Relations System from a broad perspective.
The concept of Industrial Relations has a wide meaning. The expression
Industrial Relations by itself means relationship that emerges out of day
today working and association of labour and management.

Industrial relations thus when taken in its wide meaning is a “set of functional
interdependence, involving historical, economic, social, psychological,
technological, occupational, political and legal variables.” It also covers
the area of quality control, marketing, price fixation and disposition of
profit among others.

The evolution of industry has been quirt gradual. If we go through the primitive
stage of human activities, we find that initially there used to be no industrial
activity. The people lived by themselves. Gradually, the people came to stage of
exchange of services for goods. This made the background for evolution of
industry and initial stage of industrial relations. To have better knowledge, we can
classify the stages of evolution of industries as follows:-

1. Primitive stage
2. Agrarian economy stage
3. Handicraft stage
4. Guild system
5. Domestic system
6. Industrial revolution
Primitive Stage – The families at this stage were self-sufficient. This was
because men devoted their time to activities like hunting, fishing and
making of weapon and women were busy in cooking, upbringing the
children, domestication of animals and agriculture. Division of labour
was limited to family itself.

During this period the barter system developed. The main difficulty of the
barter system was lack of double coincidence and common measure of
value.

Agrarian Economy Stage – The things changed during this stage. Many tribes
settled down permanently at some place. Agriculture became the main
source of maintenance. With the rise of population and ownership of
land, there was split up of the families. The families were not self
sufficient because of varied activities. This led to exchange of goods.
Later on the traders came into existence. The difference between sale and
purchase price was their profit. Diversification of activities was observed
during this period.

Handicraft Stage – During this stage the craftsman ,artisans living in villages
produced the products for local population and exchanged them with
various things which were required for them.

4.Guild Stage- Under this stage two types of guild were initiated, namely
Merchant guild and Craft guild. A merchant guild was association of
merchants engaged in trade in a particular locality to enforce equality of
opportunity for the members of the guild, to avoid competition, regulate
conduct and protect their interest. The craftsman guild was there to regulate
the conduct of their members and protect their interest.

5.Putting Out System – During this stage, with the increase in demand, the
intermediary played a vital role. The entrepreneur gave outwork to artisans
who worked in their homes. By the passage of time, the artisans faced
difficulties because of increase of demand. The process of finding new tools to
increase the production was need of the hour. The stage was set for getting the
work done by the artisans at the premises of the entrepreneur This was the
beginning industrial activities.

7. Industrial Revolution- During the later part of 18th century and earlier
part of 19th century the industrial revolution played a vital role. With the
invention of new technique of production, the establishment of industries
was taking place, employing workers to complete the task of production.
Large-scale employment of workers gave birth to labour problems ; -

Changes brought about by Industrial Revolution:-

Development of Engineering- The Engineers were required to design and
develop new machinery for textile, coal, mines and other industries to meet
the requirement of the industries. They were also assigned the job to develop
new tools for repairing of machines so that the work may be finished at the
earliest.

Revolution in iron making – The engineers who were assigned this task,
were successful and improving the quality of the cast iron and were able to
cast iron in good quantity.

Use of power driven machines – The use of Power Driven machinery was
introduced starting from textile and spreading to other industries.

Rise of chemical industries – The chemicals, which were used in textile

industries give impetus for establishment of chemical industries.

Development of coal mining- The coal was need for steam power, refining of
pig iron and casting of iron as such attempt were made to increase its
production to meet the demand.

Development of means of transport- You are aware that for supply of raw
material to industries and distribution of finished goods good transport system
is need. To meet the requirement, attempts were made to develop good
transport system.

Economic Effects of Industrial Revolution

Large-scale production
Change of form of ownership
The Specialization
Rise of capitalism
Trade Cycles
Standard of living

Social and Political effects

Urbanization
Rise of individualism
Awareness of rights
Poor working conditions
Political awareness

Machine Age and Modern Factory System

To cater the needs of the people many changes took place in the industrial
system. The invention of machines and its use in the industry is called the
machine stage. The feature of machine age may be summarized as under;-

Large scale production

Mechanization
Automation
Management information system
Specialization
Standardization
Growth of industrial area
Expansion of International Trade
Research and development.
Competition.

The machine age brought in under factory system. The entrepreneur

established factories and employed large number of workers. This led to the
emergence of two distinct classes viz. the capitalist class and working class.
The capitalist were strong and the workers did not get fair deal.. The trends of
industrialization in the early stages have following features-

Loss of Freedom
Unhygienic working conditions
Employment of children
Suppression of rights

Since the workers were unorganized and had no bargaining power, the factory
owners suppressed them. Gradually, with the initiative of social and political
workers, the trade unions were formed to protect the workers. The factors,
which necessitated the trade unions to come into existence, may be described
as under:
Commanding position of employer.
Large-scale recruitment of workers
Introduction of division of labour
Growth of specialized workers
Monotony in jobs increase in accident and no compensation
Employment of children
Payment of lower wages
Unhygienic working conditions
Lack of welfare measure

The things were becoming complicated day by day. To overcome the above
problems and to have better industrial relations, several management thinkers
contributed and though of human relations in industry. The name of Robert
Owen, Charles Babbage and Daniel C. Macallum are worth mentioning.
Growth of Trade Unionism.

The problems as we have discussed earlier gave an opportunity to workers to

form trade unions so that the working conditions of the workers are improved.
The trade unions have played a vital role in establishing a machinery to
resolve dispute of workers relating to working hours, holidays, job duties, job
rights, discipline and other grievances.

The trade unions influenced the employers in U.S.A. to a greater extent.

Several employers in that country appointed a number of welfare societies and
have invested heavy sums to take welfare activities in an organization for
workers. In several companies personnel department were set up for
recruitment and following activities for the welfare and proper functioning of
the company

In India, the foundation of modern industries was laid down between 1850
and 1870. Indian enterprises started growing side by side with the British one
in all spheres of the national economy. During the period of growth of Indian
Capitalist enterprises, the working and livings conditions of workers were
poor and their working hours were long.

The first indication of industrial unrest and work stoppage was in the year
1977 in Empress Mills, Nagpur. Though there was no trade union, the
relations between workers and employer cannot be said to be peaceful. There
were short-lived strikes in Bombay and Surat. The suppression of the workers
by the employers continued, the workers were intimidated, dismissed and
victimized even in case of mild disputes. On going through the records we
find that in 1895 the workers struck working of the Budge Jute Mills resulting
in loss of Rs.18000/-.

There were hardly any laws to protect the interest of the workers except the
Employers and Working (Dispute) Act, 1860, which was used for settlement
of wages. In 1881, the Factories Act was passed which awakened the workers
to have concerted approach to settle their disputes.

Whatever trade unions emerged or workers organization came into existence,

were purely of local levels. The first emergence first strike may be recalled of
textile workers in Ahemdabad under the leadership of Mahatma Gandhi.
Textile Labour Association was born in 1920. Government also became aware
of the grievances of the workers any intervened in a number of cases. This
way there became three actors of Industrial relations viz. employer, employee
and Government.

Almost at the same time International Labour Organization (ILO) was

constituted with the objective to regulate the working conditions, fixation of
 minimum wages and for making provision of other benefits to the labour so
that the employer and good industrial relations stop exploitation.

The International Labour Orgainsation worked with the following aims and
objects (1919 under League of Nations) ;_

1. The regulation of hours of work and elimination of unemployment.

2. The maintenance of just and fair condition of labour irrespective of caste,

creed and sex.

3. The provision of adequate wages

4. The promotion of moral, social, political and cultural welfare of world

peasants.

5. The protection of workers against sickness, disease and injury.

6. The protection of children and young person and bringing of the female
labour upto the level of male labour.

7. The provision of old age pension

8. The protection and guidance of workers against exploitation of

capitalist /employers.

9. The organization of professional and technical education and recognition

of principles of freedom on Association.

In 1944, the ILO adopted the following principles:-

1. Labour is not commodity

2. Poverty anywhere constitutes danger to prosperity everywhere.

3. The freedom of expression and formation of Association

4. The war against want.