Tilak Education Societys

S.K College of Science & Commerce

Seawoods, Navi Mumbai. Phone 27711481/27710033

4B.Industrial Relations
Definition
Industrial Relations is concerned with the systems, rules and procedures used by unions and employers to
determine the reward for effort and other conditions of employment, to protect the interest of the employed and their
employers and to regulate the ways in which employers treat their employees
IR covers the following areas:

Collective Bargaining
Role of Management, Unions and Government
Machinery for resolution of industrial disputes
Individual grievance and disciplinary policy and practices
Labour Legislation
Industrial relations training

Another name for IR is employee relations or human relations. This term is more comprehensive and includes all
those aspects of HRM where employees are dealt with collectively. Human relations includes in addition to IR
includes aspects like participative management, employee welfare, employee development, employee remuneration,
employee safety and health etc.

OBJECTIVES OF IR

To enhance economic status of worker

To avoid industrial conflicts and their consequences
To extend and maintain industrial democracy
To provide an opportunity to the worker to have a say in the management decision making
To regulate production by minimizing conflicts
To provide forum to the workers to solve their problems through mutual negotiations and consultations
with management
To encourage and develop trade union in order to develop workers collective strength

FEATURES OF IR

Employer Employee Relations

IR arises out of relations between the two partys employer and employee. Such relations should be cordial
and should include individual as well as collective relations

Multi dimensional
IR is influenced by complex set of institutional, economic & technological factors

Dynamic:
The ever changing nature of IR is because it has to keep pace with employee expectations, trade unions,
employer associations and other economic and social institutions of society

Moral and Social Obligations

It is unethical on the part of the management to take advantage of the workers and the same time it protects
the right of management by expecting workers to observe codes of discipline

Conflict and Compromise

IR is characterized by forces of conflict and compromise. Individual differences and disagreements
resolved through constructive means.

Interactive and Consultative

Involves resolving conflicts, controversies and disputes between labor and management through
consultation and discussions.

Influenced by Government views

Government rules and regulations influences and shapes IR: with its laws, rules and agreements through
executive and judicial machinery

Tilak Education Societys

S.K College of Science & Commerce

Seawoods, Navi Mumbai. Phone 27711481/27710033

Wide Scope
Scope of IR is extensive as it covers grievances, disciplinary measures ethics, standing orders, collective
bargaining, participatory schemes and dispute settlement mechanism etc

Importance /Advantages/Benefits of IR

Industrial Peace
Resolution of disputes through interaction and compromise brings harmony to the environment. There is
long term peace and stability in the company

Higher Production
Due to good industrial relations, workers take more interest in their work and efficiency is increased. As a
result of this there is higher production.

Better treatment to workers

Due to good industrial relations and improved production, management offer higher remuneration, better
facilities and benefits to the employees and this improves their standard of living.

Reduced turnover
The workers are satisfied and their grievances are addressed at the proper forum. Hence there is reduced
turnover.

Encouragement to collective bargaining and participative management

Good industrial relations lead better long term co-operation and agreements between management and
employees. Workers have a better say in management decisions and their views and aspirations are taken
into consideration

Prosperity of employer and employee

Good industrial relations are a win-win situation to both the employer and employee. As with the growth of
the company, both parties benefit.

Tilak Education Societys

S.K College of Science & Commerce

Seawoods, Navi Mumbai. Phone 27711481/27710033

Approaches to Industrial Relations

UNITARY APPROACH

IR is grounded in mutual cooperation, individual treatment, team work and shared goals.
Work place conflict is seen as temporary aberration, resulting from poor management and employees
who do not mix well with organization culture
Unions cooperate with the management and managements right to manage is accepted because there
is no we they feeling
Underlying assumption is that everyone benefits when the focus is on common interest and promotion
of harmony
Strikes are considered destructive in nature
Based on reactive strategy and direct negotiation with employees
Participation of Government, tribunals and unions are not sought or are seen as being necessary for
achieving harmonious employee relation

PLURALISM

Pluralism is belief in the existence of more than one ruling principle, giving rise to a conflict of
interests.
The pluralist approach to IR accepts conflict between management and workers as inevitable but
containable through various institutional arrangements ( like collective bargaining, conciliation and
arbitration etc) and is in fact considered essential for innovation and growth.
The pluralists see the employment relationship as a mixture of shared interests and conflicting interests
that are largely limited to the employment relationship.
It also perceives stability in IR as the product of concessions and compromises between management
and unions.
It perceives trade unions as legitimate representative of employee interests. Employees join unions to
protect their interests and influence decision making by the management. Unions thus balance the
power between management and employees. In pluralistic approach a strong unions is not only
desirable but necessary
In the workplace, pluralists therefore champion grievance procedures, employee voice mechanisms
such as works councils and labor unions, collective bargaining, and labor-management partnerships. In
the policy arena, pluralists advocate for minimum wage laws, occupational health and safety standards,
international labor standards, and other employment and labor laws and public policies. These
institutional interventions are all seen as methods for balancing the employment relationship to
generate not only economic efficiency, but also employee equity and voice.

MARXIST APPROACH

Marxists like pluralists also regard conflict as inevitable but see it as a product of capitalistic society
and employer-employee conflicts as sharply antagonistic and deeply embedded in the socio-politicaleconomic systems.
For Marxists IR has wider meaning. For them conflict arises not because of rift between management
and workers but because of the division in the society between those who own resources and those
who have only labor to offer.
Marxist approach thus focuses on the type of society in which an organization functions.
Industrial conflict is thus equated with political and social unrest

Tilak Education Societys

S.K College of Science & Commerce

Seawoods, Navi Mumbai. Phone 27711481/27710033

Trade Unions are seen both as labor reaction to exploitation by capitalists, as-well-as a weapon to
bring about a revolutionary social change. Wage related disputes as secondary.
For them all strikes are political and they regard state intervention (via legislations and creation of
Industrial Tribunals) as supporting managements interests, rather than ensuring a balance between the
competing groups.
Militant trade unions are thus frequently supported

Unitary
Integrated groups of
people with common
interests, values and
objectives
Temporary

Pluralistic
Different groups with
different values, interests
and objectives

Marxist
Division between labour
and capitalists and huge
imbalance in society

Inevitable and relational

Resolution of conflict

Negotiations and
discussion

Strikes

Seen as destructive

Unions

Not necessary

Collective bargaining,
compromise and
agreement
Collective bargaining
preferred over strikes
Legitimate representative

Inevitable and inherent in

the prevailing social and
economic system
Change in society

Role of Government

Not necessary

Assumptions

Nature of conflict

Seen as a balancing factor

and necessary for making
laws & regulations

Strikes is an integral part

of this approach
Militant trade unions are
encourages
Seen as a support to
management

OTHER APPROACHES

GANDHIAN APPROACH

This approach to industrial relation is based upon fundamental principal of truth and non-violence. This
approach presumes the peaceful co-existence of capital and labour.
Gandhiji emphasized that if the employers follow the principal of trusteeship than there is no scope of
conflict of interest between labour and management.
Gandhiji accepted the workers right to strike, but cautioned that they should exercise this right for a just
cause and in a peaceful and non-violence manner and this method should only be resorted when all
methods failed in getting employers response.

GIRI APPROACH

Collective bargaining and joint negotiations to be used to settle disputes between labor and management.
Outside interference to be avoided.

PSYCHOLOGICAL APPROACH

Differences in the perceptions of labor and management wrt factors influencing their relations i.e. wages.
Benefits, services and working conditions etc
Dissatisfaction compels workers to turn aggressive and resort to strike, lockouts etc.

SOCIALOGICAL APPROACH

This approach includes various sociological factors like value system, customs and traditions, norms which
influence management and workers

HUMAN RELATIONS APPROACH

The human relations approach highlights certain policies and techniques to improve employee morale,
efficiency and job satisfaction.
It encourages the small work group to exercise considerable control over its environment and in the process
helps to remove a major irritant in labour-management relations.

Tilak Education Societys

S.K College of Science & Commerce

Seawoods, Navi Mumbai. Phone 27711481/27710033

Parties to Industrial Relations

The main parties to IR are the Employees, Employee Representatives, Employers, Association of Employers,
Government and Courts & Tribunals.
Employees:

They constitute the main party to industrial relations as a large number are working in the organized
industrial sector.

All employees have a right to make fair and reasonable demands but should offer support to cordial
industrial relations

They need to negotiate with the management from time-time for bonus, benefits either collective or through
their unions. At times unreasonable demands could lead to disputes, strikes and lockouts.

Employees perceive Industrial Relations as a opportunity to

Improve their conditions of employment

Voice any grievances
Exchange views and ideas of management
Share in decision making

Employee Associations/Trade Unions:

Employee Association or trade unions play a very crucial role in IR. Their broad objectives are:

To redress bargaining advantage of the individual worker by initiating joint or collective action
To secure improved terms and conditions for employment and maximum security
Improved status for worker in his/her work
To increase the extent to which unions can exercise democratic control over decisions that affect their
interests by power sharing at national, corporate and plant level.

Union Power is exercised at two levels-Industry level and plant level. At industry level to establish joint
consultation and regulation regarding wages, working conditions, incentives and facilities to workers. At
plant level, exercise joint control with managers in regard to working conditions, code of conduct and so
on.

The Union should play a positive role in maintaining good industrial relation. Multiplicity of unions affects
IR in the organization.

Employers/Management

The employers hire the workers and pay regular wages and provides benefits and other facilities to the
workers

The management is endowed with the rights and powers which at times is misused which leads to conflicts

The management should try to maintain cordial relations with the employees and the unions by paying
attractive wages, healthy working conditions, liberal welfare facilities and other incentives so that the

Tilak Education Societys

S.K College of Science & Commerce

Seawoods, Navi Mumbai. Phone 27711481/27710033
workers are satisfied. They should also try to address the grievances of the workers and make them a part
of the decision making process

In general, the role of management in terms of employee relations is

Creating and maintaining employee motivation

Obtaining commitment from the workforce
Establishing mutually beneficial channels of communication
Achieving high levels of efficiency
Negotiating terms and conditions of employment with employee representatives
Sharing decision making with employee
Engaging in power structure with trade unions

Employee Associations

Employee associations operate at local, industry and all India levels. The Confederation of Indian
Industries (CII) is a powerful body at national level which is doing an admirable job in protecting and
promoting the legitimate interests of owners of industries.

The major objectives include

Representing employers in collective bargaining
Developing machinery for avoidance of disputes
Providing information on employee relations and to advise
Representing members on national issues

The specific objectives of CII are:

Indentifying and strengthening industry role in the economic development of the country
Acting as a catalyst in bringing about growth and development of Indian industry
Reinforcing industrys commitment to society
Working towards globalization of Indian industry and its integration of world economy
Providing up-to date information and data to industry and government
Creating awareness and support industry efforts on quality, environment and consumer protection
Identifying and addressing special needs of the small scale sector
Promoting co-operation with counterpart organizations

The other major employer associations include ASSOCHAM, FICCI, AIMO, WASME,
FASSI,NAASCOM and FIEO

Role of Government

The role of government intervention in IR is as old as the industry itself. Till 19th century, governments
everywhere let managements and workers to solve their problem themselves. However the attitude of
governments have changed with time

The government today, regulates the relationship between the management and the labour and seeks to
protect the interests of both groups.

The government has set up wage boards, labour courts, tribunals and enacted laws to lay down norms and
to enforce their compliance.

Judicial

The powers of the judiciary are of dual type

The authority of the courts to settle legal disputes and this helps maintain a cordial relation in the company
Judicial review-the authority of the courts to rule on the constitutionality of legislation. In this case when
government passes legislation which violates the rights of workers or management, the court can review the
legislation.