Industrial Relations (HR 404)

Industrial Relation (HR 404) 1
Industrial Relations (HR 404)
Chapter – 1 & 2
1. Define Industrial Relations. State the importance of Industrial Relations in today’s economic
scenario. What are the scope and aspects of Industrial Relations?
Ans. Industrialization process started in Great Britain in 10th century followed by France,
Belgium and USA in 1830, Germany around 1850, Sweden and Japan in 1870 and so on. The
human society moved from cave age to Information Age and today it is teamed as “The Age of
discontinuity” or “Turbulent Environment” or “Technocratic Age”. The few important trends of
nature of Industrial work and life are discussed below :-
(a) Elimination of physical labour :- Magginson believes that with the increased automation,
fewer people are required to perform the work, as a single individual can work for a longer
time.
(b) Mass production at low cost :-
(c) Specialization of functions:-
(d) Unhygienically harsh working and living condition :-
(e) Hard Work, higher capital formation and high savings:-
(f) Strict Discipline : - The worker lives by the clock. He should report on time, should not
absent from work, must not disobey the superior, or else he will be fired, fined or otherwise
punished.
(g) Montony and boredom are the results of minute division of labor. Repetitive work cannot
generate interest in work – this results in loss of creativity and motivation at work place.
(h) Interdependence of specialized functions:-
(i) Increase in mobility :- Movement of labour class from one Industry to another.
(j) Social maladjustment and effect on personal life :-
(k) Alcoholism and Absenteeism from work place :-
(l) Bigamy :-
(m) Loss of work ethics :- Disregard forwards employer and superiors.
Concept of IR
Industrial relations refer to “Industry” and “Relations”. “Industry” means “Any productive activity
in which an individual is engaged” and “Relations” means “A professional interaction which exists
between employer and workmen.”
As per Kapoor “IR is a developing and dynamic concept and does not limit itself merely to the
complex of relations between the Union and the Management, but also refers to general web of
relationships between employees – a web which is much more complex then labour – capital
conflict”.
V Agnihotri “IR explains the relationship between employees and management which stems
directly or indirectly from union employer relationship.” CB Kumar “IR is broadly
concerned with bargaining between employer and Trade Union on wages and terms of
employment.
The term “Industrial Relations” commonly denotes “employee–employer” relations, in both

organized ad unorganized sectors of the economy. Without the existence of two parties, labour and
management, this relationship cannot exist. Industrial relations are characterized by both conflict
and cooperation. This is the basis of adverse as well as mutual relationship. Industrial relations also
study the laws, rules, regulations, agreements, awards of courts, customs and traditions, as well as
policy framework laid down by Government for eliciting cooperation between labour and
management. Again IR is very broad based, interdisciplinary approach. It draws concepts heavily
from a variety of disciplines like social sciences, humanities, behavioural sciences, laws, social
psychology, economics, International Relations etc.
Objective and Importance of Industrial Relations
(1) Industrial Relations pattern in organized sectors has an impact or spill over effect on un-
organized sectors.
(2) Unions are important force in Indian political system – Lobbying activities of the
unions ot influence legislative process.
(3) Varying patterns of IRs in organized and unorganized sectors –
(4) Development of healthy labour management relations – The spirit of workers

participation, collective bargaining replaces voluntary arbitration. The collective
bargaining recognizes equality of status between two conflicting groups and prepares the
ground in an atmosphere of trust and goodwill, for discussions, consultations and
negotiations on matters of common interest to both industry and labour.
(5) Maintenance of Industrial peace – Apart from different bipartite and tripartite
machineries set by Govt. of India through various acts for prevention of Industrial
Disputes, there are provisions for the bipartite and tripartite forms for settlement of
disputes. These forums act on the basis of Code of Discipline in industry, the code of
conduct, the code of efficiency and welfare, model standing orders, grievance procedures
and granting of voluntary recognition to trade unions by the employer.
(6) Development of Industrial Democracy :- Establishment of shop councils, JMCS at the

floor and plant level.
(7) Recognition of human rights in Industry.
(8) Increase in labour productivity.
(9) To maintain industrial democracy and bridge the gap between the unbalanced,
disordered social order with established mutual relations.
(10) To minimize strikes, backouts, gheraos, go slow.
Scope of Industrial relations:
(1) Labour Relations :- Relation between different labour and Unions.
(2) Employer-Employee Relations :- Relation between management and employees.
(3) Group Relations :- relations between various groups of workmen.
Community or Public Relation :- Relations between industry and society.
Chapter – 3 & 4
TRADE UNIONS - INTRODUCTION
Over the years, the contractual relationship between employer and employee has undergone several
changes. The employer can no longer hire and fire employees. He cannot promote/demote someone
based on personal preferences. He cannot afford to reprimand subordinates openly. He has to act
within the boundaries set by collective agreements, unions, past practices and court decisions. Thus,
managerial indiscretions, whimsical actions and one-sided exploitative acts have no place in the
industrial relations scene-especially when we look at labour management relations (relations
between employer-employee, employee-employee, employer-union, etc.) in large undertakings.
Today the relationship between employer and employee is contractual and reciprocal. The rights
and obligations of employers (frame rules for work, discipline employees who defy commands,
etc.) are well documented in various pieces of labour legislation. The same cannot be said of the
rights and obligations of employees which are somewhat imprecise. Stern action against problems
such as late coming, sleeping, loitering, absenting during working hours, poor workmanship, non-
compliance of rules, non-performance of tasks, ignoring superior's instructions would evoke strong
protests from employees. Collective strength forces employees to sacrifice overall organisational
interest, turn the issue on hand into a tug-of-war, impairing labour management relations. It has
become virtually impossible to exercise some of the rights of the employees such as right to strike,
freedom to associate, right to appeal against injustice in recent years - thanks to the cost saving
efforts of employers fighting unstoppable ongoing battles with competitive forces. Unions have
found their base slipping badly on several counts, i.e., disinterestedness of workers in union-related
work, depleting ranks, cash crunch owing to insufficient funds, shrinking political support, inability
to sustain organised protest for a long time and more dangerously the threat of employers drawing
shutters down, when pushed to the wall (like retrenchment, wage cuts, closures)! Lets look into
these troubling issues more closely in the ensuing sections.
Definition of Trade Union
According to Webbs, a trade union is a continuous association of wage earners for the
purpose of maintaining and improving the conditions of their working lives. Under the Trade
Union Act of .1926, the term is defined as any combination, whether temporary or permanent,
formed primarily for the purpose of regulating the relations between workers and employers,
or for imposing restrictive conditions on the conduct of any trade or business ]and includes
any federation of two or more unions. Let us examine the definition in parts:
Trade union is an association either of employees or employers or of independent workers.

It is a relatively permanent formation of workers. It is not a temporary or casual combination of
workers.
It is formed for securing certain economic (like better wages, better working and living conditions),
social (such as educational, recreational, medical, respect for individual) benefits to members.
Collective strength offers a sort of insurance 'if cover to members to fight against irrational,
arbitrary and illegal actions of employers. Members can share their feelings, exchange notes and
fight the employer quite effectively whenever he goes off the track.
OBJECTIVE OF TRADE UNIONS
The failure of an individual workers to seek solutions to problems, while discharging his duties,
personal as well as organisational, led them to form a formal group which is identified at present as
trade union. Thus, the main objective of any trade union is to protect the interest of
workers/employees in the organisation. However, the workers' interest/welfare is a broad term in
which various subjects - wages and salaries, working conditions, working hours, transfers,
promotions, recruitment and classification, training, discipline, leave and holidays, dearness
allowance, bonus, incentives, quarters, sanitation, employee relations, mechanisation, facilities to
unions, welfare, employee relations and the like are included. Thus, a trade union is meant to
conduct negotiations on behalf of the individual workers in respect of several items. However, trade
unions specifically concentrate their attention to achieve the following objectives:
A Wages and salaries: The subject which drew the major attention of the trade unions is wages
and salaries. Of course, this item may be related to policy matters. However, differences may arise
in the process of their implementation. In the case of unorganised sector the trade union plays a
crucial role in bargaining the pay scales.
b. Working conditions: Trade unions with a view to safeguard the health of workers demands the
management to provide all the basic facilities such as, lighting and ventilation, sanitation, rest
rooms, safety equipment while discharging hazardous duties, drinking, refreshment, minimum
working hours, leave and rest, holidays with pay, job satisfaction, social security benefits and other
welfare measures:
c. Discipline: Trade unions not only conduct negotiations in respect of the items with which
their working conditions may be improved but also protect the workers from the clutches of
management whenever workers become the victims of managements unilateral acts and disciplinary
policies. This victimisation may take the form of penal transfers, suspensions, dismissals, etc. In
such a situation the separated worker who is left in a helpless condition may approach the trade
union. Ultimately the problem may be brought to the notice of management by the trade union and
it explains about the injustice meted out to an individual worker and fights the management for
justice. Thus, the victimised worker may be protected by the trade union.
d. Personnel policies: Trade unions may fight against improper implementation of personnel
policies in respect of recruitment, selection, promotions, transfers, training, etc.
e. Welfare: As stated earlier, trade unions are meant for the welfare of workers. Trade union
works as a guide, consulting authority and cooperates in overcoming the personnel problems of
workers. It may bring to the notice of management, through collective bargaining meetings, the
difficulties of workers in respect of sanitation, hospitals, quarters, schools and colleges for their
children's cultural and social problems.
f. Employee-employer relation: Harmonious relations between the employee and employer is a
sine quo non for industrial peace. A trade union always strives for achieving this objective.
However, the bureaucratic attitude and unilateral thinking of management may lead to conflicts in
the organisation which ultimately disrupt the relations between the workers and management. Trade
union, being the representative of all the workers, may carry out continuous negotiations with the
management with a view to promote industrial peace.
g. Negotiating machinery: Negotiations include the proposals made by one party and the counter
proposals of the other party. This process continues until the parties reach an agreement. Thus,
negotiations are based on give and take' principle. Trade union being a party for negotiations,
protects the interests of workers through collective bargaining. Thus, the trade union works as the
negotiating machinery.
h. Safeguarding organisational health and the interest of the industry: Organisational health
can be diagnosed by methods evolved for grievance redressal and techniques adopted to reduce the
rate of absenteeism and labour turnover and to improve the employee relations. Trade unions by
their effective working may achieve employee satisfaction. Thus, trade unions help in reducing the
rate of absenteeism, labour turnover and developing systematic grievance settlement procedures
leading to harmonious industrial relations. Trade unions can thus contribute to the improvements in
level of production and productivity, discipline and improve quality of work life.
FUNCTIONS TRADE UNIONS
The functions of trade unions can be divided into the following categories, viz.,:
a. Militant or protective or intra-mutual functions: These functions include protecting the

workers interests, i.e., hike in wages, providing more benefits, job security, etc., through collective
bargaining and direct action such as strikes; gheraos, etc.
b. Fraternal or extra-mural functions: These functions include providing financial and non-
financial assistance to workers during the periods of strikes and lock outs, extension of medical
facilities during slackness and causalities, provision of education, recreation, recreational and
housing facilities, provision of social and religious benefits, etc.
c. Political functions: These functions include affiliating the union a political party, helping the
political party in enrolling members, collecting donations, seeking the help of political parties
during the periods of strikes and lockouts.
d. Social functions: These functions include carrying out social service activities, discharging
social responsibilities through various sections of the society like educating the customers.
GROWTH OF TRADE UNION MOVEMENT AND MEMBERSHIP
Trade unions in India, .as in most other countries, have been the natural outcome of the modern
factory system. The development of trade unionism in India has a chequered history and a stormy
career.
TRADE UNIONS AND EMPLOYERS'ASSOCIATIONS

Early Period
Efforts towards organising the workers for their welfare were made, during the early period of
industrial development by social workers, philanthropists and other religious leaders mostly on
humanitarian grounds.-The first Factories Act, 1881, was passed on the basis of the
recommendations of the Bombay Factory Commission, 1875. Due to the limitations of the Act,
the workers in Bombay Textile Industry under the leadership of N M Lokhande demanded
reduction of hours of work/weekly rest days, mid-day recess and compensation for injuries.
Bombay Mill owners' Association conceded the demand for weekly holiday. Consequently,
Lokhande established the first Workers' Union in India in 1890 in the name of Bombay Mill hands
Association. A.labour journal called "Dinabandu" was also published.
Some of the important unions established during the period are: Amalgamated society of Railway
Servants of India and Burma (1897), the Printers Union, Calcutta (1905) and the Bombay Postal
Union (1907), the Kamgar Hitavardhak Sabha (1910) and the Social Service League (1910). But
these unions were treated as ad hoc bodies and could not serve the purpose of trade unions.
A Modest Beginning
The beginning of the Labour movement in the modern sense started after the outbreak of .World
War I in the country. Economic, political and social conditions of the day influenced the growth of
trade union movement in India. Establishment of International Labour Organisation in 1919
helped the formation of trade unions in the country, Madras Labour Union was formed on
systematic lines in 1919. A number of trade unions were established between 1919 and 1923.
Categorywise unions like Spinners' Union and Weavers' Union came into existence in
Ahamedabad under the inspiration of Mahatma Gandhi. ]These unions were later federated into an
industrial union known as Ahmedabad Textile Labour Association. This union has been formed on
systematic lines and has been functioning on sound lines based on the Gandhian Philosophy of
mutual trust, collaboration and non-violence.
All India Trade union Congress
The most important year in the history of Indian Trade Union movement is 1920 when the All India
Trade Uriion Congress (AITUC) was formed consequent upon the necessity of electing delegates
for the International Labour Organisation (ILO). This is the first All India trade union in the
country. The first meeting of the AITUC was held in October, 1920 at Bombay (now Mumbai)
under the presidentship of Lala Lajpat Rai. The formation of AITUC led to the establishment of All
India Railwaymen's Federation (AIRF) in 1922. ]Many company Railway Unions were affiliated to
it. Signs of militant tendency and revolutionary ideas were apparent during this period.
a. Period of splits and mergers: The splinter group of AITUC formed All India Trade Union
Federation (AITUC) in 1929. Another split by the communists in 1931 led to the formation of All
India Red Trade Union Congress. Thus, splits were more common during the period. ]However,
efforts were made by the Railway Federation to bring unity within the AITUC. These efforts did
bear fruit and [All India Red Trade Union Congress was dissolved.] Added to this, All India Trade
Union Federation also merged with AITUC. ]The unified AITUC's convention was held in 1940 in
Nagpur.[ But the unity did not last long. The World War II brought splits in the AITUC. There were
two groups in the AITUC, one supporting war while the other opposing it. The supporting group
established its own central organisation called the Indian Federation of Labour. ]A further split took
place in 1947, when the top leaders of the Indian National Congress formed another Central
organization.
b. Indian National Trade Union Congress: The efforts of Indian National Congress resulted in the
establishment of Indian National Trade Union Congress (INTUC) by bringing the split in the
AITUC. INTUC started gaining membership right from the beginning.
c. Other Central Unions: Socialists separated from AITUC had formed Hind Mazdoor Sabha
(HMS) in 1948. The Indian Federation of Labour merged with the HMS. Radicals formed another
union under the name of United Trade Union Congress in 1949. Thus, the trade union movement in
the country was split into four distinct centralunions during the short span of 1946 to 1949.
Some other central unions were also formed. They were Bharatiya Mazdoor Sangh (BMS) in
1955, the Hind Mazdoor Panchayat (HMP) in 1965 and Centre of Indian Trade Unions (CITU) in
1970. Thus, splinter group of INTUC formed Union Trade Union Congress - the split in the
Congress party in 1969 resulted in the split in INTUC and led to the formation of National Labour
Organisation (NLO).
Present Position –
There are over 9,000 trade unions in the country, including unregistered unions and more
than 70 federations and confederations registered under the Trade Unions Act 1926. The
degree of unionism is fairly high in organised industrial sector. It is negligible in the
agricultural and unorganised sectors.
Though the number of unions has greatly increased in the last four decades, the union membership
per union has not kept pace. The National Commission on labour has stated that only 131 unions
had a membership of over 5,000. More than 70% of the unions had a membership of below 500.
Over the years the average membership figures per union have fallen steadily from about 1387 in
1943 to 632 in 1992-93 (Pocket Book of Labour Statistics 1997). Unions with a membership of
over 2000 constitute roughly 4 per cent of the total unions in the country.
There is a high degree of unionisation (varying from 30% to over 70%) in coal, cotton, textiles, iron
and steel, railways, cement, banking, insurance, ports and docks and. tobacco sector. White collar
unions have also increased significantly covering officers, senior executives, managers, civil
servants, self employed professions like doctors, lawyers, traders, etc., for safeguarding their
interests. There are as many as 11 central trade union organisations in the country (as against one or
two in UK, Japan, USA). The membership figures of each such union, naturally are not very
impressive - AITUC had 9.24 lakh; INTUC has 27.06 lakh; HMS had 14.77 lakh and UTUC 8.3
lakh (Lenin group); and CITU had 17.98 lakh members in 1995. The membership figures have not
changed significantly over the years. Just about 10% of the total workforce in India is unionised.
The last membership survey was carried out in 1989, the results came in 1992 suggesting the
supremacy of BMS as the union having maximum union members in the country of about 31 lakh.
A lot of benefits in the form of representation in various government committees, PSU

'boards, wage negotiation committees would be available to the BMS as a result of this survey.
In the 1980 survey INTUC emerged as the topper among the national trade unions in the
country. The survey results of 1989 had been leaked to the press in 1992, but not officially
endorsed by the government till recently. What about the figures of members claimed by
INTUC and others after 1989 survey? A meeting held on 2.10.1994 did not resolve the
conflicting claims of RSS- affiliated BMS and Congress supported INTUC and the stalemate
continues!
THE TRADE UMIONS ACT, 1926 AND LEGAL FRAMEWORK

Registration
The Trade Unions Act, 1926, legalises the formation of trade unions by allowing employees the
right to form and organise unions. It permits any 7 persons to form their union and get it
registered under the Act. They must agree to abide by the provisions of the Act relating to
registration and submit a copy of the rules of the trade union in their application to the Registrar of
Trade Unions. If the union has been in existence for more than one year, the application must be
accompanied by a statement of assets and liabilities of the union. The application must contain (a)
the names, occupations and addresses of the members (b) name of the union, its head office (c)
details about office bearers. After verifying the particulars, the Registrar will issue a certificate of
registration in the prescribed form.
 Status of a Registered Union
• A trade union enjoys the following advantages after registration.
• It becomes a body corporate.
• It gets a common seal.
• It can buy and hold movable and immovable property .
• It can enter into contracts with others.
• It can sue and be sued in its name.
Cancellation of Registration
• The Registrar of Unions can cancel the registration of a union on the following grounds:
• On the application by the union
• Where the application was obtained by fraud or mistake
• Where the union has ceased to exist.
• Where it has willful and after notice from the Registrar contravened any provisions of the
Act or alowed any rule to continue in force which is inconsistent with any provision of the
Act.
• Where the union has rescinded, any rule providing for any matter, provision which is
required by Section.
• Where the primary objects of the union are no longer in agreement with statutory objects.
Obligations
• Under the act it is obligatory for the union to:
• allow anyone above the age of 15 years to be a member of the union;

• collect membership fees not less than 25 paise per month and per member;
• specify that 50% of office bearers must be from the persons actually employed;
• maintain membership register, get the books of account audited and make them available to
members;
• state the procedure for change of its name, its merger with other unions and its dissolution;
• spend uniform funds for the purposes specified in the Act.
Rights
• Claim immunity from civil and criminal prosecution for bonafide trade union activities.
• Create a political fund.
• Spend general funds on salaries of staff and meet certain other expenses as stated in the Act.
• If a union is formed by giving wrong information or registration is obtained through

fraudulent means, the Registrar of Trade Unions can cancel such registration giving 2
months notice stating reasons.
UNION RECOGNITION
One of the long pending problems of Indian Industrial Relation System is to evolve satisfactory and
acceptable means to settle the problem of recognising a bargaining agent from out of rival unions.
Collective bargaining cannot exist and function without recognising the bargaining agent. Since
there is no law for compulsory recognition of trade unions it is left to the choice of the employers.
In view of the union rivalry and if multiple unions agree the employer finds it is difficult to
recognise a union in the context of a political affiliation. The employer may recognise those unions
with the highest number of members. But more than one union may claim the highest number of
membership in view of dual and multiple membership. Efforts have been made to bring about,
legislative measures for compulsory recognition of unions immediately after the Independence. In
fact some of the State Acts provide for the registration of unions as representative unions subject to
fulfillment of certain conditions. These acts include Bombay Industrial Relations Act, 1946, the
Madhya Pradesh Industrial Relations Act 1946 and the Industrial Dispute (Rajasthan Amendment)
Act, 1958.
The Bombay Industrial Relations Act, 1946, classified the registered unions as:
i. Representative union having not less than 25% of membership in an industry
ii. Qualified union having at least 5% of membership in an industry; and
iii. Primary union having at least 15% of membership in an undertaking.
The rights of a Representative union under the Act are:
i. First preferences to appear or act in any proceedings under the Act as the representative of
employees;
ii. Right to submit a dispute for arbitration;
iii. To make a special application to the Labour Court to hold an inquiry; and
iv. Office-bearers of the union cannot be dismissed or discharged.
The need for suitable provision for recognition was stressed by the Second Five Year plan.
The National Commission on Labour examined all the aspects of trade union recognition and
recommended that:
i. It would be desirable to make recognition compulsory under a central law in all undertakings
employing 100 or more or where the capital invested is above a stipulated size;
ii. A trade union seeking recognition as a bargaining agent from an individual employer should
have a membership of at least 30% of workers in the establishment;
iii. The minimum membership should be at least 25% if recognition is sought for in an industry in a
local area; and
iv. The minority unions should be allowed only the right to represent cases of dismissal and
discharge of their members before the Labour Court.
UNION PROBLEMS
Over the years, trade unions in India have been taken for a ride by outside, political leaders. In the
process, the interests of workers and their aspirations have been totally neglected. The Trade Unions
Act, 1926, did not clearly specify the procedure for recognising a representative union. As a result
multiple unions have cropped up, often with blessings from management. The union finances have
not been very sound from the beginning. The average membership figures for each union remain
poor and have not improved. The forces of liberalisation unleashed in early 90s have strengthened
the hands of employers in closing down unviable units. The new “Corporate mantras” -
productivity, performance, efficiency, survival of the fittest have virtually pushed them to the wall-
where their very survival looks uncertain. Let's recount the factors responsible for their even-
increasing woes and depreciated status thus:
A]Trade union leadership : The nature of leadership significantly influences the union-
management relations as the leadership is the lynch-pin of the management of trade unions. The
leadership of most of the trade unions in India has been outside leadership mainly drawn from
political parties. As the labour movement in is deeply involved in the politics and politicians, most
of the politicians also come from trade unions. For example, Lok Nayak Jayaprakash Narain,
former President of India V V Giri, George Fernandes, all worked as trade union lead In fact
political parties invented Trade Unions in India.
Reasons for emergence of outside leadership: Outside leadership has been playing a pivotal role
in Indian Trade Union Movement due to the inability of inside to lead their movement. In view of
low education standards and poor command over English language which is still the principal
language of labour legislation and negotiations, low level of knowledge about labour legislation,
unsound financial position, fear of victimisation by the employer and lack of leadership qualities -
outside leaders have come to stay. The main reason for this trend is that the-Trade Unions Act,
1926, itself provided the scope for outside leadership Section 22 of the Act requires that ordinarily
not less than half of the officers of the registered union shall be actively engaged or employed in an
industry which the union relates. Thus, this provision provides the scope for outsiders to the tune of
50% of the office bearers. The Royal Commission on Labour (RCL) 1931, recommended for the
reduction of the statutory limit of outsiders from 1/2 to 1/3 but no efforts were taken in this
direction.
The evil effects of outside leadership: The evil effects of outside leadership analysed by National
Commission on Labour are as follows:
1. Outside leadership undermined the purposes of Trade Unions and weakened their
authority. Personal benefits and prejudices sometimes weighed more than unions.
2. Outside leadership has been responsible for the slow growth of Trade Unions.
3. Internal leadership has not been developed fully.
4. Most of the leaders cannot understand the workers’ problems as they do not live the life of
a worker.
Even though outside leadership is permissible in the initial stages it is undesirable in the long run
because of many evils associated with it. Political difference of leaders has been inhibiting the
formation of one union in one industry. Most of the Trade Union leaders fulfill their personal
aspirations with their knowledge and experience gained in the Trade Unions.
Measures to minimise the evil effects of outside leadership: In view of the limitations outside
leadership, it is desirable to replace the outside leaders progressively the internal leaders. The
National Commission on Labour, 1969, also stated £h outsiders in the Trade Unions should be
made redundant by forces from with rather than by legal means.
Both the management and trade unions should take steps in this direction. These steps may be:
Management should assure that the victimisation will be at zero level, if the trade unions are
led by insiders;
Extensive training facilities in the areas of leadership skills, management techniques and
programmes should be provided to the workers;
Special leave should be sanctioned to the office bearers. Union rivalry has been the result of
the following factors:
1. The desire of political parties to have their basis among the-industrial workers;
2. Personnel cum factional politics of the local union leaders;
3. Domination of unions by outside leaders;
4. Attitude and policies of the management, i.e., divide and rule policy; and
5. The weak legal framework of trade unions.
Measures to minimise union rivalry: In view of the evil effects of inter-union rivalry and the
problem of formation of one union in one industry, it may be necessary to consider the
recommendations of National Commission on Labour, 1969. The recommendations of NCL to
minimise union rivalry are:
Elimination of party politics and outsiders through building up of internal leaders
Promotion of collective bargaining through recognition of sole bargaining agents
Improving the system of union recognition
Encouraging union security
Empowering labour courts to settle inter-union disputes if they are not settled within the
organisation.
b. Multiple unions: Multiple unionism both at the plant and industry levels pose a serious threat to
industrial peace and harmony in India. The situation of multiple - unions is said to prevail when two
or more unions in the same plant or industry try to assert rival claims over each other and function
with overlapping jurisdiction. The multiple unions exist due to the existence of craft unions,
formations of two or more unions in the industry. Multiple unionism is not a phenomenon unique to
India. It exists even in advanced countries like UK arid USA. Multiple unionism affects the
industrial relations system both positively and negatively. It is sometimes desirable for the healthy
and democratic health of labour movement. It encourages a healthy competition and acts as a check
to the adoption of undemocratic practice, authoritative structure and autocratic leadership. However,
the negative impacts of multiple unions dominate the positive impacts. The nature of competition
tends to convert itself into a sense of unfair competition resulting in inter-union rivalry. The rivalry
destroys the feeling of mutual trust and cooperation among leadership. It is a major cause for
weakening the Trade Union Movement in India. Multiple unionism also results in small size of the
unions, poor finances, etc.
C. Union rivalry: The formal basis for Trade Union Organisation is provided by the Indian Trade
Union Act, 1926. The relevant article reads as follows:
“Any seven or more members of a trade union may be subscribing their names to the roles of the
trade union and by otherwise complying with the provision this act with respect to the registration,
apply for registration of the trade union under this Act."
This provision has led to the formation of multiple unions and resulted inter union rivalry in
different industries. But the inter-union rivalry breaks the very purpose of the trade unions by
weakening the strength of collective bargaining. On the other hand, the existence of a single, strong
union not only protects tip" employee interests more effectively but also halts the various
unproductive activities of the unions and forces the leaders to concentrate on the strategic issues.
Further, it helps to bring about congenial industrial relations by bringing about a system of
orderliness in dealing-with the employees and by facilitating" expeditious settlement of disputes.
The state of rivalry between two groups of the same union is said to be inter! union rivalry. Inter
and intra-union rivalries have been a potent cause of industri disputes in the country. They are
responsible for weak bargaining power of trade unions in collective bargaining. These rivalries are
responsible for slow growth of trade union movement in the country.
d. Finance: Sound financial position is an essential ingredient for the effective functioning of
trade unions, because in the process of rendering services fulfilling their goals, trade unions have to
perform a variety of functions organise programmes which require enormous financial
commitments. Hence, it is imperative on the part of a trade union to strengthen its financial
position.
But it is felt that the income and expenditure of trade unions in India over the years is such, with
few exceptions, that the financial position of the union is generally weak, affecting their
functioning. It is opinioned that “the trade unions could be more effective, if they paid more
attention to strengthening the organisations and achieving higher attention of financial solvency.”
The primary source of income to the unions is membership subscription. The other sources of union
finances are donations, sale of periodicals, etc. The items of expenditure include: allowances to
office bearers, salaries to office staff, annual convention/meeting expenses, rents, stationery,
printing, postage, telegrams, etc.
Most of the trade unions in India suffer from inadequate funds. This unsound financial position is
mostly due to low membership and low rate of membership fee. Trade Union Act, 1926, prescribed
the membership fee at 25 paise per member per month. But the National Commission on Labour
recommended the increases; of rate of membership subscription from 25 paise to Re 1 in the year
1990. But the Government did not accept this recommendation.
As the National Commission on Labour observes, “an important factor limiting the effective
functioning of unions in our country has been their financial, weakness... In most unions, poor
finances are the result of inadequate membership strength. This in turn, can be traced to the small
size of units. In a majority of unions, the rate of contributions required of members is also small.
With a relatively low rate of unionisation, total funds collected are small.... The general picture of
finances of unions is disappointing.”
Other problems: The other factors responsible for the unsound functioning of trade unions in
India are:
i. Illiteracy: Workers in India usually fail to understand the implications of modern trade unionism.
Their illiteracy coupled with ignorance and indifference account for the predominance of outside
leadership,
ii. Uneven growth: Trade unionism activities are, more or less, confined to major metros in India
and traceable only in large scale units (Specially cotton textile industry). The degree of unionism
also varies from industry to industry, varying between to 30-70 per cent in coal, cotton textiles, iron
and steel, tobacco, railways, cement, banking, insurance, ports and docks, etc. The degree of
unionism is quite negligible in the agricultural and unorganised sector.
iii. Low membership: The average membership figures of each union are quite depressing. In
1992-93 the average membership figure was 632, a steady fall from 3,594 per union from 1927-28.
"Because of their small size, unions suffer from lack of adequate funds and find it difficult to
engage the services of experts to aid and advise members in times of need". They can't bargain with
the employer effectively on their own.
iv. Heterogeneous nature of labour: Since workers come to the factory with varying
backgrounds, it is difficult for them to put a joint front in case of trouble. Employers exploit the
situation, under the circumstances, by dividing workers on the basis of race, religion, language,
caste, etc.
v. Lack of Interest: For a large majority of workers, unionism even today remains a foreign
issue. In fact, workers avoid union activities out of sheer disinterestedness. Those who become part
of the union, do not also participate in the union work enthusiastically. In such a scenario, it is not
surprising to find outside political leaders exploiting the situation to serve their own personal
agenda.
vi. Absence of paid office bearers: Weak finances do not permit unions to engage the services of
full time, paid office bearers. Union activists, who work on a part time basis, neither have the time
nor the energy to take up union activities sincerely and diligently.
Measures to Strengthen Trade Union Movement in India
The trade union movement in India has been facing several problems as discussed earlier.
Moreover, the problems of trade unions are like a vicious circle. It is not possible to put an end to
all their problems, or mitigate them to a reasonable level. Hence, managements, trade unions,
political parties should take steps to reduce the effects of these problems. The following are some of
the measures to minimise trade union problems and to strengthen the Trade Union Movement in
India.
United Labour Front
Unions must put a joint front. Splinter groups, multiple unions dissipate their energies, dilute their
power and reduce their effectiveness.
Efficient Leadership
Outside political leadership has developed due to the absence of internal leadership. Outside
leadership is the main cause for the multiple problems of the trade unions. These problems can be
eradicated through the development of leadership talents, from within. Management should
encourage internal workers to lead their own movement. Management and trade unions should
provide educational and training! facilities for the development of internal leadership.
Membership Fees
The membership fees should be raised as the amount of wages of the workers increased
significantly, compared to the situation in 1926 when Trade Union Act provided for the collection
of 25 paise per month per member as subscription fee.
Other Measures
Trade unions should extend welfare measures to the members and actively pursue social
responsibilities.
The Trade Union Act, 1956, should be amended and the number of members required to form a
trade union should be increased from 7 to 50% of the employees of an organisation. Similarly, the
scope for the outside leadership should be reduced from 50% to about 10%. The membership
subscription should be enhanced from 25 paise to 1% of the monthly wage of the worker.
The Trade Union Act should be amended in order to avoid dual membership.
There should be legal provision for the recognition of the representative union.
Unions should not intervene in day-to-day matters. They must focus on important issues affecting
workers.
Trade unions should form a labour party and all the trade unions in the country should be affiliated
to it. It gives adequate strength to the trade unions both in industry and Parliament.
Employers Associations
Introdution
Employers Associations came into existence as a result of the formation of ILO and the growing
presence of Trade Unions, especially after the First World War. The Royal Commission on Labour,
1929, recommended that the Indian employers need an organisation "to deal with labour problems
from the employer's point of view". As rightly pointed out by Mr Naval Tata, employers'
organisations are required to:
Develop healthy and stable industrial relations;
Promote collective bargaining at different levels;
Bring a unified employers' viewpoint on the issues of industrial relations to the government in a
concerted manner;
The different employees’ Associations are FICCI, CII, ASOCHEM etc.
Chapter – 5
3. Write in brief the causes of Industrial disputes. Explain the classification of Industrial
disputes. What are the impacts of industrial disputes in organizations.
Ans. According to Industrial Disputes Act, 1947, Section 2 (K), “Industrial dispute means any
dispute or difference between employers and employers, or between employers and workmen or
between workmen and workmen, which is connected with the employment or non-employment or
terms of employment or with the conditions of labour of any person.”
Some of the principles are laid down by the court to identify one dispute as industrial dispute –
(a) A workman does not draw wages exceeding Rs.1600 per month.
(b) The dispute must affect a large group of workman who have a community of interest.
(c) The rights of those workmen must be affected as a class.
(d) The dispute should be invariably taken up by an appreciable no. of workmen.
(e) There must be concerted demand by the workers for redress and the nature of grievance
becomes such that individual complaint turns to be a general complaint.
(f) The parties to the dispute should have direct and substantial interest in the dispute.
Causes of Industrial Dispute / Conflict
(A) Industry Related Factors :-
(1) The industry related factors pertaining to employment, work, wages, house of work,
privileges, the rights and obligations of employees and employers, terms and conditions of
employment, including matters pertaining to – (a) Dismissal or nom-employment of any
person, (b) Registered Agreement, settlement or award.
(2) High growth of population and types of unemployment often rise to industrial dispute. The
types of unemployment include structural, seasonal, frictional and disguised
unemployment.
(3) High inflation erodes the value of money, thereby decreasing the real wages of workers.
(B)Trade Union related Factors :-
(1) The growing inter union rivalry and multiplicity of Trade Unions have destroyed solidarity of
working class.
(2) Non-recognition of some trade Unions as “Bargaining agents” of their members creates despair
among TU leaders.
(3) Continuous increasing compulsory adjudication of disputes has made trade Unions indifferent to
wages and working conditions of industrial employees which is now determined by courts, wage
boards and tribunals.
(C) Management Related Factors :-
(1) Management generally is not willing to talk over any dispute with the employees
or their representatives or refer it to arbitration even when Trade Unions want to
continue discussions.
(2) The management’s unwillingness to recognize a Trade Union creates despair.
(3) The unfair labour practices practiced by management creates
(4) Management shows unwillingness to delegate authority even to officials of

recognized Trade Unions.
(5) During negotiations for the settlement of a dispute, the representatives of

employees unnecessarily and unjustifiably take the side of the Management,
tensions are created, which often lead to strikes, go slow etc.
(D) Government Related Factors :-
(1) Policies of liberalizations and privatizations have caused may strikes due tofear of
unemployment.
(2) Most of the labour laws have lost their relevance in the concept of the changed industrial climate
/ culture.
(3) Government’s conciliation machinery many times proves to be irrelevant because :-
(a) Both the employees and employers have little faith in it.
(b) Both has become litigation minded.

Classification of Industrial Dispute
(1) Interest Disputes :- These disputes are also called conflicts of interest or economic disputes or
collective labour disputes. In general, they relate to the determination of new terms and conditions
of employment for general workers, in must cases, this dispute arises when trade union demands for
improvement in wages, fringe benefits, job security or other terms or conditions of employment.
(2) Grievance or Rights Disputes :- These disputes are also called conflicts of rights or legal
disputes or individual disputes. They generally raise from day to day working relations and
conditions in any undertaking. The grievances arise on such questions as discipline or dismissal, the
payment of wage and other fringe benefits, working time, overtime, promotion, demotion, job
classification, safety and health conditions, the work rules to the collective barraging.
(3) Disputes over Unfair Labour Practices :- Management practices these unfair labour practices.
Examples are :-
(a) Discrimination against workers on the ground that they are TU members or participate in trade
Union activity or in strikes.
(b) Interference, restraint or coercion of employees when they exercise their rights to organize, join
or assist a Union.
( c) Establishment and promotion of employer sponsored unions.
(d) Refusal to bargain collectively, in good faith, with the recognized union.
(e) Recruiting new employees during a strike which is not an illegal strike.
(f) Failure to implement an award, settlement or agreement.
(g) Indulging in acts of force or violence.
(4) Recognition Dispute : This type of dispute arises when the management of an undertaking or
employer’s organization refuses to recognize a registered Trade Union for the purpose of collective
bargaining. This is called Trade Union Victimization.
Criteria for Recognition of Union(s) ANNEXURE A
(1) When there is more than one union, a union should have been functioning for
at least one year after registration; where there is only one union, this condition
would not apply.
(2) The membership of the union should cover at least 15 percent of the workers in
the establishment. Membership should be limited of those workers who have
paid their subscriptions for at least three months during the period of six
months immediately preceding the reckoning.
(3) The membership of the Union should cover at least 25 percent of the workers
in a local area to be recognized as a represented union for an industry.
(4) When a union has been recognized, there should be no change in its position
for a period of two years.
(5) When there are several unions in an industry or establishment the union having
largest membership should be recognized.
(6) If Trade unions are not affiliated to any of the four central organizations of
labour, the question of recognition would have to be dealt with separately.
(7) Only those unions which follow the code of Discipline would be entitled to
recognition.
Rights of recognized unions under the code of discipline ANNEXURE A
(1) To raise issues and enter into collective agreements with employers on general questions
concerning the terms of employment and conditions of service of workers in an
establishment.
(2) To collect membership fees / subscriptions payable by members to the Union within the
premises of the undertaking.
(3) To put up a notice board on the premises of the undertaking where notice relating to
meetings, statements of accounts of its income and expenditure and other
announcements which are not abusive or subversive of discipline or otherwise contrary
to the code should be affixed or cause to be affixed.
(4) To hold discussing and to meet and discuss with employer or any person appointed by him
for the purpose of settlement of grievance of its members.
(5) To nominate its representatives on grievance committee. JMCS, non statutory bipartite
committees for smoothening the functioning and for quick settlement’ of grievances or disputes.
Chapter – 6
COLLECTIVE BARGAINING
INTRODUCTION
Before the Industrial Revolution, the employer, more or less, enjoyed unquestioned powers on
matters relating to wages, working conditions arid other matters affecting employees. The weak
bargaining strength of employees tempted them, on occasions to exploit the vulnerable situation to
their advantage. Workers as a result became restless and widespread protests followed.
Governmental intervention was of little help. Workers realised the importance of fighting jointly on
all work-related matters! This collective fighting spirit is behind the back of collective bargaining.
Concept of Collective Bargaining
Collective bargaining is a procedure by which the terms and conditions of workers are regulated by
agreements between their bargaining agents and basic objective of collective bargaining is to arrive
at an agreement other conditions of employment. Both the employer and the employees may begin
the process with divergent views but ultimately try to reach a compromise, making some sacrifices.
As soon as a compromise is reached, the terms of agreement start operating.
The underlying idea of collective bargaining is that the employer and employee relations should not
be decided unilaterally or with the intervention of any third party. Both parties must reconcile their
differences voluntarily through negotiations, yielding some concessions and making sacrifices in
the process. Both should bargain from a position of strength; there should be no attempt to exploit
the weaknesses or vulnerability of one party. With the growth of union movement all over the globe
and the emergence of employers' associations, the collective bargaining process has undergone
significant changes. Both parties have, more or less, realised the importance of peaceful co-
existence for their mutual benefit and continued progress.
FEATURES
a. Collective : It is collective in two ways. One is that all the workers collectively bargaining for
their common interests and benefits. The other is that workers and management jointly arrive at an
amicable solution through negotiations.
b. Strength: Across the table, both parties bargain from a position of equal strength. In collective
bargaining, the bargaining strength of both parties is equal. It is industrial democracy at work,
c. Flexible: It is a group action where representatives of workers and management expend energies
in order to arrive at a consensus. It has sufficient flexibility, since no party can afford to be
inflexible and rigid in such situations. The unique feature of collective bargaining is that usually the
parties concerned start negotiations with entirely divergent views but finally reach a middle point
acceptable to both. It is therefore not a one way street but a give and take process.
d. Voluntary : Both workers and management come to the negotiating table voluntarily in order to
have a meaningful dialogue on various troubling issues. They try to prove each other’s views
thoroughly before arriving at an acceptable solution. The implementation of the agreement reached
is also a voluntary process.
e. Continuous: Collective bargaining is a continuous process. It does not commence with

negotiations and end with an agreement. The agreement is only a beginning of collective
bargaining. It is a continuous process which includes implementation of the agreement and also
further negotiations.
f. Dynamic: Collective bargaining is a dynamic process because the way agreements are arrived at,
the way they are implemented, the mental make-up of parties involved keeps, changing. As a result,
the concept itself changes, grows and expands over time.
g. Power relationship: Workers want to gain the maximum from management, and management
wants to extract the maximum from workers by offering as little as possible. To reach a consensus,
both have to retreat from such positions and accept less than what is asked for and give more than
what is on offer. By doing so management tries to retain its control on workplace matters and
unions attempt to strengthen their hold over workers without any serious dilution of their powers.
h. Representation: The chief participants in collective bargaining do not act for themselves. They
represent the claims of labour and management while trying to reach an agreement. In collective
bargaining the employer does not deal directly .with workers. He carries out negotiations with
representatives of unions who are authorised to bargain with employer on work-related matters.
j. Bipartite process: The employers and the employees negotiate the issues directly, face to face
across the table. There is no third party intervention.
OBJECTIVES
The main objectives of collective bargaining are given below:
a. To settle disputes/conflicts relating to wages and working conditions.
b. To protect the interests of workers through collective action.
c. To resolve the differences-between-workers and management through voluntary negotiations and

arrive at a consensus.
d. To avoid third party intervention in matters relating to employment.
BARGAINABLE ISSUES
Which are the issues that could be bargained across the table? Practically speaking If any issue that
has relevance to management and workers becomes the subject matter of bargaining. However, in
certain specific cases both management and workers are reluctant to yield ground. Traditionally,
management is not willing to negotiate work a method, arguing that it is management’s exclusive
right to decide how the work is done. Likewise unions do not want negotiations on production
norms and disciplinary matters, because any agreement in this regard would put limits on their
freedom. However over the years, the nature and content of collective bargaining has changed quite
dramatically, thanks to the pulls arid processors exercised by the bargaining parties.
Traditionally wages and working conditions have been the primary focus areas of collective
bargaining. However, in recent times, the process of bargaining has extended to almost any area that
comes under the employer-employee relations, covering a large territory .
The Substance of Bargaining
1. Wages and working conditions
2. Work norms
3. Incentive payments
4. Job security
5. Changes in technology
6. Work tools, techniques and practices
7. Staff transfers and promotions
8. Grievances
9. Disciplinary matters
10. Health and safety
11. Insurance and benefits
12. Union recognition

13. Union activities / responsibilities
14. Management rights
TYPES OF BARGAINING
Four distinct types of bargaining have evolved overtime, namely conjunctive cooperative,
productivity and composite bargaining. These are discussed below.
a. Conjunctive / distributive / bargaining : The parties try to maximise their respective gains. They
try to settle economic issues such as wages, benefits, bonus, etc, through a zero-sum game (where
my gain is your loss and your gain is my loss) Unions negotiate for maximum wages. Management
wants to yield as little as possible - while getting things done through workers.
b. Cooperative bargaining: When companies are hit by recession, they cannot offer the kind of
wages and benefits demanded by workers. At the same time they cannot survive without the latter's
support. Both parties realise the importance of surviving in such difficult times and are willing to
negotiate the terms of employment in a flexible way. Labour may accept a cut in wages in return
for job security and higher wages when things improve. Management agrees to modernize and bring
in new technology and invest in marketing efforts in a phased manner In India companies like
TELCO, Ashok Leyland resorted to cooperative bargaining in recent times with a view to survive
the recessionary trends in the automobile sector.
C. Productivity bargaining: In this method workers wages and benefits are linked to productivity. A
standard productivity index is finalised through negotiations initially. Workers do not have to
perform at exceptionally high levels to beat the index. If they are able to exceed the standard
productivity norms workers will get substantial benefits. Management gains control over work
place relations and is able to tighten the norms still further in future negotiations. Without such
productivity bargaining agreements, workers may not realise the importance of raising productivity
for organisational survival and growth. Backed up by powerful unions they may fail to read the
danger signals from the market and respond quickly.
d. Composite bargaining: It is alleged by workers that productivity bargaining KU - agreements

have increased their workload. Rationalisation, introduction of high technology, tight productivity
norms have made the life of a worker somewhat uneasy. All these steps have started hitting the
unions and workers below the belt. As an answer to such problems, labour has come in favour of
composite bargaining. In this method labour bargains for wages as usual but goes a step further
demanding equity in matters relating to work norms, employment levels, manning standards,
environmental hazards, sub-contracting clauses, etc! When unions negotiate manning standards they
ensure the workload of workers does not increase, this helps to maintain the status quo as far as
employment level is concerned. By negotiating sub-contracting clauses, unions prevent
management from framing out business to ancillaries. If permitted, such an action may result in
lower employment in some other plant diluting the bargaining powers of unions substantially.
Workers are no longer interested in monetary aspects to the exclusion of work related matters.
There is no doubt that wages, bonus and-other monetary aspects continue to occupy the centre-stage
in bargaining sessions. But there is a definite shift towards composite bargaining. Without such a
proactive stand, workers may not be able to withstand the forces of liberalisation, automation,
farming out business to outsiders and survive. Through composite bargaining unions are able to
prevent the dilution of their powers and ensure justice to workers by putting certain limits on the
freedom of employers. For the employer this is lesser evil when compared to strikes and lockouts.
Apart from periodic wages hikes and day-to-day tussles over productivity norms and other related
issues there is at least no danger of workers striking work every now and then. Of course, even this
situation may not continue for long. In companies like SAIL, Philips, Bata, GKW and even TISCO
work force reductions have to come if they have to survive in a high-tech environment. The
compulsions of a free market economy cannot be put aside just for the sake of maintaining the
labour force. It is small wonder despite serious warnings from unions; companies in the recession-
hit automobile sector (Hindustan Motors, Premier Automobiles, Maruti, TVS Suzuki, Hero Honda)
have either reduced the work force or cut down their benefits.
The process of COLLECTIVE BARGAINING
The whole process of collective bargaining takes place mainly in two stages:
1. Negotiations and
2. Implementation
In collective bargaining carrying out negotiations and reaching an agreement If; constitute only half
of the process. The other equally important part is implementation of the contract. However, briefly
the following steps are involved in the Collective Bargaining process:
a. Identification of the problem: The nature of the problem influences whole process. Whether the
problem is very important that is to be discussed immediately or it can be postponed for some other
convenient time, whether the problem is a minor one so that it can be solved with the other party's
acceptance on its presentation and does not need to involve long process of collective bargaining
process, etc. It also influences selection of representatives, their size, period of negotiations and
period of agreement that is reached ultimately. As such it is important for both the parties to be
clear about the problem before entering into the negotiations.
b. Preparing for negotiations: When it becomes necessary to solve the problem through collective
bargaining process, both the parties prepare themselves for negotiations. The preparation starts with
selection of representatives. Such representatives should be selected who can carry out negotiations
with patience, composure and who can present their views effectively. After selection they should
be educated about the complete problem and its pros and cons. Their powers and authority during
negotiations also should be clearly spelt out. Other preparations include fixing up time for
negotiations, period of negotiations, etc. But once the parties enter into negotiations the period of
negotiations may vary depending upon circumstances.
c. Negotiation of agreement: Usually there will be a chief negotiator who is from the management
side. He/she directs and presides the process. The chief negotiator presents the problem, its intensity
and nature and the views of both the parties. Then he/she allows the representatives of both parties
to present their views. During negotiations, the representatives should be attentive as to find out
what the other party is arguing for. The-representatives tend to think about what counter arguments
they can present and how to say 'no' effectively, while the other party is presenting its own views.
This is a major obstacle in the bargaining process. The representative should be attentive to the
other parties' problems. By understanding their problems and weighing them, sometimes a better
situation may be reached, which is more acceptable to both parties. So, it is important that
representatives should reach negotiating table with positive frame of mind. In j Arnold F Canpo's
words - "both the parties should strive to maintain an objective attitude. They should think rather
than feel their way through the problem under consideration". With this objective mind both the
parties should try to reach an amicable solution. When a solution is reached at, it is put on paper
taking concerned legislations into consideration. Both parties concerned sign the agreement which,
in turn, becomes a binding contract for both the parties. If inspire of all these efforts, no amicable
solution could be reached, both parties; resort to arbitration.
Implementation of contract: The agreement can be made on a temporary basis. In such cases, before
its expiry both parties consult each other and can terminate or; renew the agreement depending
upon the circumstances. The union may always demand the renewal of such agreements which
benefit workers before their expiry. Management on the other hand, may reject this demand taking
the financial position of the organisation into consideration. As a result, this may again lead to
negotiations. As such, collective bargaining is not a temporary accommodation, but is a continuous
process.
Collective Bargaining VS Negotiation Skills
Collective bargaining is a procedure by which the terms and conditions of employment of workers
are regulated by agreements between their bargaining agent and employers.
It is a kind of rule making exercise. Both labour and management agree to a set of rules that govern
workplace relations from time to time. Negotiation, on the other hand, is process of resolving
conflicts between two or more parties wherein both or all modify their demands to reach a workable
compromise. Thus negotiation aims to settle disputes/differences between two or more parties;
achieve an acceptable compromise, which in turn, is based on the power equation of the parties
concerned. Parties to the conflict have a common interest in binding a negotiated settlement is a
deliberate, explicit event.
While negotiating issues, parties shift their stand from an ideal position to a settlement point, which
is mutually agreed upon. The position of this settlement point depends on the relative bargaining
strength and skill of the negotiator. The sacrifices to be made and the concessions to be yielded
depend on the negotiating skills of the bargaining agent to a large extent. If he is powerful, he will
have his way. If this power is challenged on justifiable grounds where other people see reason, he
may have to yield ground.
COLLECTIVE BARGAINING IN INDIA
The story of collective bargaining is the story of the rise and growth of trade unionism itself. It had
its roots in Great Britain and developed in response to conditions created by the Industrial
Revolution. In early part of 18th century when trade unions come into existence, the idea of
bargaining collectively gained strength. Initially the negotiations were carried out at plant level. By
early 1900, industry and national level agreements were quite common. Slowly but steadily the idea
spread to France, Germany, USA. After a century of rapid growth, collective bargaining has more
or less, become the gospel of industrial relations. It is being increasingly viewed as a social
invention that has institutionalised industrial conflict. In other words it is through the process of
collective bargaining organisations have learnt to cope with industrial conflict.
In India trade unions have come to occupy the centre stage only after 1900. In 1918, Gandhiji, as
the leader of the Ahmedabad Textile workers' advocated the resolution pi; of conflict through
collective bargaining agreements. For another 10 years, this method of setting disputes did not gain
popularity. The legal steps taken by the government after the Second World War revived interest in
the subject once again. The legislative measures included the setting up of a machinery for
negotiations, conciliation and arbitration. Basic conflicting issues concurring wages and conditions
of employment were sought to be resolved through voluntary means.
After Independence, with the spread of trade unionism, collective bargaining agreements have
become popular. A large majority of disputes were resolved through this mechanism. Most
agreements were concluded at the plant level. In centres like Mumbai, Ahmedabad industry level
agreements were quite common - thanks to the legal blessings extended by the respective State
Acts. The agreements were found in industries such as chemicals, petroleum, tea, coal, oil,
aluminum, etc. In ports and dorks, banking and insurance collective agreements at the national level
were also arrived at.
Changing Scenario
In most industrialised economies company unions and centralized bargaining is giving way to
decentralised bargaining carried out at the plant level. Local factors have become more important to
unions than political ideology or nation-wide workers solidarity across several industries.
In India also the role of national level federation of unions and employers organisations is limited
in collective bargaining. Strictly speaking, the process is centred around a handful of employers'
associations and trade unions. For example the Confederation of Indian Industry till the early 90s
represented the claims of member employers from the Engineering Industry. In traditional
industries such as jute the entrepreneurs themselves conduct the negotiations with unions. In places
like Bangalore and Hyderabad unions and employers have preferred to set up joint coordination
committees to deal with collective bargaining. In sectors like coal, steel, ports and docks such
coordination committees are quite common while carrying out the nation-cum-industry-wide
bargaining. As far as steel industry is concerned there are 240 trade unions organised into several
trade union federations within the public sector steel company, Steel Authority of India Ltd (SAIL).
Every three or four years the National Joint Consultative forum for Steel Industry (NJCS) enters
into agreements (so far 5 such agreements were concluded since early 70s) on behalf of SAIL,
Rashtriya Ispat Nigam (Visakhapatham) and TISCO (which incidentally has only one recognised
trade union.) A plant level agreement supplements the above national agreement to cover those
unique aspects concerning the plant which were not covered at the national level. Public sector
collective bargaining in India refers to collective bargaining in industrial and commercial
undertakings owned by Central and State Governments including those in finance and banking
sector. Employees in departmental undertakings (Railways, Post and Telegraphs, etc.) are governed
by pay commission awards. The average wages and benefits bargained at the national level for
lower level public sector employees were found to be higher when compared to the employees in
the organised private sector. Of course, at higher levels of management the private sector employees
got relatively better wages.
In some sectors (media, sugar, etc.) the wage boards still decide the wages and working conditions.
In the Cement industry arbitration has replaced collective bargaining over wage-related issues.
There are interesting contradictions in the collective bargaining scene in India. Over 80 different
unions may represent a single firm. Some large multi-plant firms such as BHEI, SAIL, and
departmental undertakings such as Railways have to live with over a hundred unions each. The
bargaining process in public sector especially has become quite coercive and demanding so as to
appease the claims of different sections (workers having ties with different unions. Due to
recession, computerisation, cut throat competition many large firms have resorted to productivity
bargaining limited extent and unions had to yield ground owing to their own helplessness in
fighting till the end in a fruitless battle. Some of the drastic measures mutually agreed as essential
for survival in recession-hit companies (Jaipur Metal and Electricals Ltd, Kamani Tubes, Kirloskar
Oil Engines, Bata India Ltd, Philips, Walchandnagar Industries, Metal Box, etc.) included:
Cut in pay and allowances;
Freeze in DA, changes in incentive payments;
Lay off / retrenchment;

Early retirement;
Change in work norms;
Retraining, relocating, etc.
in future, trade unions and management may have to be guided by market forces (survival of the
fittest, cost effective global manufacturing, high-tech/high quality service oriented approach,
customer centered marketing and manufacturing processes) while sharing the gains from industry.
Political, ideological concerns may have to take the back seat. The full potential and gravity of
technology-led-growth needs to be appreciated by both management and labour while they try to
draw concessions from each other at the negotiating table. Concession bargaining may-rule the
scene till industry gains stature and status in the global market place.
Factors those hinder Collective Bargaining process
Collective bargaining has not made much headway in India when compared to other industrialised
nations. The reasons for this sorry state of affairs may be listed thus:
a. Employers' reluctance: Employers have failed to read the writing on the wall. They do not
appreciate the fact that unions have come to stay with almost equal & bargaining strength. Such
negative attitudes have come in the way of negotiating fete with unions voluntarily
b. Weak unions: Just about 10 per cent of total workforce in India is unionised, a figure which is
much lower in comparison to developed countries. The trade union membership rarely includes a
majority of workers. For instance, union membership as a share of the labour force in India along
with Pakistan, Kenya is less than 10 per cent (Business India, Nov. 4-17, 1996). In addition to poor
membership figures, unions have to live with poor finances as well. To complicate matters further
there are multiple unions with multifarious political affiliations. All these factors have cumulatively
reduced the bargaining strength of unions in India.
c. Inadequate interventions: The regulatory framework covering the industrial relations scene is
quite tight, leaving very little room for bargaining to flourish on a voluntary basis. In case there is a
war of nerves between management and labour (as is the case with Philips, Bata in West Bengal)
government steps in to resolve the issue. The legislative means offered through conciliation or
adjudication did not help matters either. The absence of appropriate legislative provisions
recognising a bargaining agent has added fuel to the fire on a number of occasions. No attempt has
been made by the Government to rationalise or simplify the multifarious laws covering labour
management relations even after half a century of inactivity.
Employers in India face certain practical problems as well. Quite often they are not very sure about
who is the recognised bargaining agent. When there are multiple unions, bargaining with one union
may prove to be a tough battle. The awards of Wage Boards come in the way of negotiating freely,
keeping the plant industry conditions in mind.
The areas of collective bargaining have not grown in view of the encouragement given to wage
boards, pay commissions, statutory fixation of other conditions^ work and social security measures.
CONDITIONS ESSENTIAL FOR EFFECTIVE BARGAINING
Not all the collective bargaining processes are successful and effective. There are certain
prerequisites for an effective collective bargaining process which are as follows
a. Unanimity among workers: Before centering into negotiations, there must be unanimity among
workers. At least the representatives of workers should be able to present the opinion or demands of
majority of workers or else, the management can take advantage of diverse demands of the workers.
b. Strength of both the parties: Both the parties in negotiations should be equal in strength. One
party dominating the other is against the whole nature of collective bargaining. It should always be
a give and take process and should not be a “you give and we take” or you bargain and we collect
process from either side.
Attitudes
The attitudes of the parties (involved) should be positive. Both parties should reach the negotiating
table with an intention to find better solutions.
The parties involved in collective bargaining should be prepared to give away something in order to
gain something. As already mentioned both the parties of collective bargaining meet with highly
divergent interests. They are at far ends of the rope. As such to reach a middle point, both parties
should be prepared to give away something.
Both parties to collective bargaining should observe and follow the terms and conditions of
previous agreements that are reached. Collective bargaining, being a continuous process, can be
effective only with the successful implementation of previous agreements. Any lapse on the part of
any party concerned shows its effect on the present process.
The representatives of both parties should fully understand and be clear about the problems and
their implications. They should be given some authority in the process of negotiations like altering
minor terms and conditions if necessary. The collective bargaining process cannot be effective if the
representatives have to consult back concerned parties often on minor issues.
The workers' can make effective use of collective participative management and good working com
collective bargaining to monetary benefits alone.
The parties concerned should have mutual trust and confidence and respect for each other and also
show willingness to settle matters through negotiations.
The process of bargaining should be free from unfair practices and conflict.
Each party should respect rights and responsibilities of the other party.
SUGGESTIONS FOR EFFECTIVE IMPLEMENTATION OF COLLECTIVE
1. Unions should be made strong by creating awareness among workers.
2. Interference of political leaders should be avoided. The unions should separate themselves from
politics.
3. Government should make efforts for the growth of collective bargaining. Adjudication should be
used only as a last resort. Government can make legislation for compulsory collective bargaining
before resorting to adjudication.
4. Management should develop a positive attitude towards unions. Much headway has already been
made in this direction. Presently, managers are mostly aware of the rights of workers. They are also
realising how important is cooperation between management and workers for the effective
functining of an organisation. As such, they are now encouraging negotiations and amicable
solutions.
RECOMMENDATIONS OF NATIONAL COMMISSION ON LABOUR
In 1969, National Commission on Labour made the following recommendations after considering
the problem.
Government intervention in industrial relations, particularly in the settlement of industrial disputes,

should be reduced gradually to the minimum possible extent. Compulsory adjudication of disputes
should be used only as a last resort.
Trade unions should be strengthened both organisationally and financially by amending the Trade
Union Act of 1926 to make registration of unions compulsory, enhance the union membership fee,
reduce the presence of outsiders in the union executive and among the office-bearers and increase
the minimum number of members in respect of the union applying for registration.
3. Legal provision may be made either by a separate legislation or by amending an existing

enactment for:
Compulsory recognition of trade unions and certification of unions as bargaining agents.
Prohibition and penalisation of unfair labour practices.
Bargaining in good faith by both employers and unions.
Conferring legal validity and legitimacy on collective agreements.
These are such provisions in the Maharashtra Recognition of Trade unions and Prevention of Unfair
Labour Practices Act of 1972, but as this Act is applicable only to Maharashtra, there is the need for
making such legislation applicable to the whole country.
4. Intensification of worker's education for building up internal union leadership and making
workers more knowledgeable and conscious about their rights and obligations. This may help to de-
politicise unions and also reduce union rivalry.
Chapter – 7
Q. Explain the term ‘Workers participation in Management’. What are the directives of
workers’ participation in Management? Explain different forms of workers’ participation in India.
Ans. In the words of Keith Davis, “Workers’ participation is a mental and emotional involvement of
a person in a group situation which encourages him to contribute to goals and share responsibilities
with them.” The Trade Unions view workers’ participation as economic and social nature of
operation. The objective is to gain control over the decision making process within an enterprise.
The concept of workers’ participation crystallizes the concept of industrial democracy and the
essence of this concept lies in the belief and confidence on the subordinates that they com
constructively contribute to growth of productivity and discipline of the organization and avoid
disharmony in IR areas. Through this concept a continuum of men-management relationship can be
conceived –
Workers’ control – Joint management – joint consultation – work place consultation – management
supremacy.
In this continuum, workers’ control represents one extreme which suggests concentration of all
powers in workers and management supremacy represents the other extreme, which implies
management control at all levels,. Participation in decision making process develops feeling of
ownership and loyalty, confidence, trust, favourable attitude towards superiors and a sense of
involvement in the organization. Participation enhances employees’ ability to influence decision
making at different levels in organization hierarchy. In brief the concept can be described as a
system of communication and consultation, either formal or informal, by which employees of an
organization are kept informed about the affairs of the undertaking and through which they express
their opinion and contribute to management decisions.
Objectives : The Industrial Policy Resolution, 1956 viewed workers’ participation as a part of its
overall endeavour to create a socialistic society. The objectives can be explained as follows -
(1) Economically, the workers have a legitimate right to share equitably in the gains of higher
productivity.
(2) Psychologically, participation gives the worker a sense of importance, pride,

accomplishment, freedom, a feeling of belonging to the place of work by making himself
a joint partner in the enterprise.
(3) Sociologically, modern industry is viewed as a social institution and the interest of the
owner, the employer, the community and the workers are equally vested in it.
Participation enhances the sense of belonging, reduces absenteeism, creates loyalty and
faith as the workers feel that they are important bodies in decision making process.
(4) Legally, all legal disputes can be resolved through the provisions of section 9A of
Industrial Disputes Act, 1947.
(5) It is a device for developing social education among workers through “Suggestion
scheme”, QC concept, etc.
(6) It is a humanitarian act, giving the worker an acceptable status within the working
community.
(7) It is an ideological point of view to develop self management in Industry.
FORMS AND LEVELS OF WORKERS’ PARTICIPATION
Workers’ participation takes formal as well as informal forms. There may be formal
organizational structures, such as works Committee, plant councils, Shop councils, production
committee, safety committee, joint management Council, canteen committee, P.F. management
Committee etc. The participation may also take place through informal mechanisms and forums. A
supervisor or a foreman may consult a worker informally before taking a particular decision in
which the latter is interested. Likewise the participation may be ascending participation, where
workers are given an opportunity to participate in managerial decisions through their elected
representatives to work councils or Board of Enterprise. In descending participation, they may be
given more power to make decision about their own work (Delegation and job enrichment). They
may participate through collective bargaining (Disjunctive participation).
Dorothea has given these stages of development of labour management cooperation –
(1) Information Sharing – In joint committee, management provides and shares information
about business condition and company outlook with workers’ representatives.
(2) Problem Sharing – management discusses different work related problems with workers’
representatives like reduction of material costs, improving wastes, etc.
(3) Idea Sharing – management discusses different labour related ideas in any kind of
operation, production, personnel and labour related activities.
Ernest Dale describes for kinds of participation – (1) Informal cooperation, (2) Advisory
cooperation, (3) Constructive Cooperation (4) Joint Determination.
Mamoria describes four stages of participation – (1) Informative and Associative

participation – Initial stage. (2) Consultative participation – Higher degree of sharing of views. (3)
Administrative participation – At Administrative level in the matters, welfare, safety, vocational
training and apprenticeship schemes, schedules of working hours, breaks and holidays, payment of
reward; etc. (4) Decision participation – Economic, financial and administrative policies where
decisions are mutually taken.
FORMS OR WORKERS’ PARTICIPATION IN INDIA
(1) Works Committee(set up under ID Act, 1947)
(2) The Joint Management Councils (Set up as a result of labour –Management Cooperation
seminar, 1958)
(3) Shop Council (1975)
(4) Unit Council (1977)
(5) Plant Council
(6) Workers’ participation on Board of Management
(7) Workers’ participation in Share Capital
WORKS COMMITTEE
In any industrial establishment wherein 100 or more workmen are employed, the appropriate
Government may require the employer to constitute a works committee consisting of equal number
of representatives of the workmen and management. The objectives of formation of works
committee are:-
(1) To prevent and settle industrial disputes at unit level.
(2) To remove the causes of friction in day today work situation
(3) To preserve amity and good relations between employers and workmen
Composition
The composition of works committee is so fixed that there is representation of various

categories of workmen, groups and classes of workmen from all sections, shops and departments of
the establishment. The total membership shall not exceed 20. The representatives of the employer
shall be nominated from the technical, managerial and supervisory capacity, who should be in direct
touch with the working of the establishment. The representatives of workers shall be elected from
among themselves. If the workmen are members of registered trade union, the employer shall ask
the detailed information regarding membership, the distribution of the members among the sections,
shops or departments of the establishment. This list shall be referred to conciliation officer. There
shall be proportionate representation of the recognized and unrecognized unions.
Qualification for Election and voting
Any workmen of not less than 19 years of age and with a service of not less than one year in
the establishment may seek election on the committee. All workmen who have completed 6
months’ continuous service shall be entitled to vote.-
Officers of the Committee and their terms of Office
The committee has its office bearers – a chairman, a vice-chairman, secretary and a joint
secretary. The secretary and joint secretary shall be elected every year. The chairman shall be
nominated by the employer and the vice chairman shall be elected by the member on the committee.
The term of office of the representatives of the committee shall be two years, except the casual
vacancies.
Meetings and Submission of Returns
The Committee may meet as and when it is necessary but not less than once in three months.
It shall ordinarily meet during the working hours of the establishments. The employer shall submit
half yearly progress report on the constitution and functioning of the works committee in a
prescribed form in triplicate to the concerned conciliation officer not later than 20th day of the
month following the half year.
Dissolution
The Central Government or an appropriate authority, after making the necessary enquiry,
may dissolve any works committee at any time by an order in writing, provided the authority is
satisfied that :-
(1) The committee has not been constituted in accordance with the prescribed rules or
(2) Not less than two thirds of the members of the representatives of workmen, without
reasonable justification, have failed to attend three consecutive meetings of the committee,
or
(3) The committee has ceased to function for any other reason.
Functions of works committee on the basis of decisions of 17th session of the Indian Labour
Conference, 1959
List of items which works committee will normally deal with :-

(1) Conditions of work, such as ventilation, lighting, temperature and sanitation, including
latrines and urinals.
(2) Amenities such as drinking water, canteens, dinning rooms, crèches, rest rooms, medical
and health services.
(3) Safety and accident prevention.
(4) Prevention of occupational diseases.
(5) Festival and National holidays.
(6) Administration of welfare and fine funds.
(7) Educational and recreational facilities such as libraries, reading rooms, sports and games,
community welfare and celebrations.
List of items which works committee will not normally deal with :-
(1) Wages and allowances.
(2) Bonus and profit sharing schemes
(3) Fixation of workload of a standard labour force.
(4) Matters connected with retrenchment and lay-off.
(5) Provident fund, gratuity schemes and other retiring benefits.
(6) Incentive schemes
(7) Quantum of leaves.
(8) Housing and Transport services.
JOINT MANAGEMENT COUNCILS (JMCs)
The concept of Joint Management Councils (JMCs) first came in Industrial Policy Resolution, April
1956.
“There should be joint consultation, workers and technicians should be associated progressively in
Management.”
Functions of JMCs
The Indian Labour Conference, at its 15th session in July, 1957, accepted the idea of setting
op JMCs in India. First the scheme came as a result of evolution of a LIC sub committee. The JMCs
have following features –
(1) There should be equal representation of workers and management.

(2) The council shall be entitled.
(i) To consult with certain specific matters such as administration of standing orders
and their amendments, when needed; retrenchment, rationalization and closure;
reduction in or cessation of operations.
(ii) To receive information , to discuss and to give suggestions on general economic

situation of the concern, like the state of the market, production and sales
programs, methods of manufacture and work, the annual balance sheet, P/L
statements, long term plans for expansion.
(iii) To be entrusted with responsibility in respect of Administration of welfare and

safety measures, operational measures of vocational training and apprenticeship
schemes schedule of working hours and breaks and of holidays.
All matters, i.e. wages, bonuses, etc. which are subjected to collective Bargaining, creation of new
rights which is a matte of negotiation for Bargaining, individual grievances are completely excluded
from the scope of JMCs.
UNIT COUNCIL
It is scheme of workers’ participation in management in commercial and service

organizations in public sector. It was introduced on 5th Jan, 1977. It is an unit level council
consisting of an equal number of representatives of management and workers. Actual numbers
should be determined by the management in consultation with recognized union. In an industrial
establishment of public sector, wherein 100 or more workmen are employed, the unit council may
be formed in each unit to discuss day to day problems and find solutions. But wherever necessary, a
composite council may be formed to serve more than one unit. The PSUS include hotels,
restaurants, hospitals, air, sea, railway and road transport services, ports and docks, ration shops,
schools, research institutions, PF and pension organizations, municipal and milk distribution
services, post and telegraph offices, the FCI, all financial institutions, banks, insurance companies,
State Electricity Boards, Central and State Warehousing corporations, Mines and Minerals Trading
Corporations, irrigation systems, tourist organizations, establishments of public amusements and
training organizations of Central and State governments. The maximum representation of people in
Unit Council is 12. The management‘s representatives should be nominated by the management and
should consist of persons from the unit concerned. All decisions of a unit council shall be on the
basis of consensus and not by a process of voting. Every decision shall be implemented by the
parties concerned within one month. If any decision of one unit council has a bearing on another
unit council, the matter will be referred to joint council for consideration and decisions. A unit
council once formed shall function for period of three years and there shall be a provision of filling
a casual vacancy in mid-term. The council shall meet as frequently as is necessary, but at least once
a month.
Functions:-
(1) To create conditions for achieving optimum efficiency in superior service for customer
satisfaction where there is direct and immediate contact between workers at operational
level and the consumers, for higher productivity and output, for climination of wastages
and idle time.
(2) To identity and eliminate conditions which are chronically bad, providing inadequate and
inferior service to customers.
(3) To study absenteeism problems
(4) To eliminate pilferage and all forms of corruption.
(5) To suggest improvement in physical conditions of works and safety, health and welfare
measures.
(6) To ensure a proper fellow of two way communication between management and workers.
PLANT COUNCIL
“Plant Council” concept came in pursuance of the recommendations of meeting at Group on

Labour at New Delhi, on 23rd September, 1985. The scheme is applicable to all central public
sector undertakings. The main features of the scheme are :-
(1) There shall be one plant council for the whole unit.
(2) Each plant council should consist of not less than six and not more than eighteen members.
There should be parity between the representatives of employees and employers. One third
of employees’ representatives should come from supervisory staff level. If number of
women employees is 15% or more of the total workforce, at least one representative should
be a women employee.
(3) Tenure of plant council is three years. The chief executive of the unit shall be the chairman
of plant council. The vice chairman shall be elected from among the employees. The plant
council shall appoint one of its members as secretary. The council shall meet at least once a
quarter. Every decision of the council shall be made on the basis of consensus and not by
voting.
Functions of Plant Council
Operation Areas Economic and Financial areas Personnel matters and Welfare
areas
1. Productivity Schemes 1.Profit and Loss statement and 1. Absenteeism.

Balance Sheet
2.Problems to women workers
2. Operating expenses, Cost of
2. Planning and review of sales 3. Workers’ programs
monthly target
3. Labour and management 4. Implementation of welfare
3. Material supply and costs, market conditions schemes
preventing shortfall
4. Enterprise performance in 5. Safety
4. House keeping activities financial terms.
6. Township Administration
5. Quality improvement
7. Control of gambling,
6. Machine Utilization drinking and indebtedness
among workers.
7. Matters not sorted at
slop floor
8. Review of slop floor

bodies
SHOP COUNCIL
In every industrial unit, where 500 or more workers are employed the employer shall
constitute a shop council for each department. Each council consists of equal member of
representatives of employers (nominate by management) and workers (elected from amongst the
workers). Each employer shall, in consultation with recognized union or various registered trade
unions or with workers, determine the numbers of Shop councils and departments to be attached to
each council and the membership should be such that it is best suited to local conditions. The total
membership shall not exceed 12. All the decisions of shop council shall be on the basis of
consensus and not on voting. The chairman shall be a nominee of the management and the worker
members of the council shall elect a vice-chairman from amongst themselves. The tenure of the
council is of three years. Every decision of the shop council shall be implemented by the parties
concerned within a period by one month unless a compliance report shall be submitted to the
council. Any decision which has a bearing on another shop or department or the total undertaking
shall be referred to the joint councils for consideration and decision.
Functions
1. Assistance to management in achieving monthly, yearly production targets.
2. Optimum utilization of machine capacity and manpower.
3. Improvement of productivity and efficiency.
4. Elimination of wastes.
5. To study absenteeism in shop/Department and recommends steps to reduce it.
6. To suggest safely measures.
7. To suggest improvement in physical conditions of working – lighting, ventilation,

temperature, dust, fume, noise etc and reduction of fatigue.
8. To suggest welfare measures.
9. To ensure proper flow of adequate two way communication.
10. To assist in quality improvement program.
11. To determine and implement work system design and cost reduction program.
12. To supervise group working system and periodical review of utilization of critical machines.
Representation on Board of Management :-

On recommendations of Administrative Reforms Commission on public sector
undertakings, Government of India accepted workers’ representatives on Board of Directors of
public sector undertakings. The representatives of workers should be actual employees of the
enterprise. The definition of “workmen” as given in Industrial Disputes Act, 1947 would be
appropriate for the scheme. The participation should be limited to companies which employ 1000 or
more workmen (excluding casual and badli workers). The participation should be introduced if at
least 51% of workers vote in secret ballot in favour of participation. The worker director should be
elected by all the workers of the company through secret ballot. Each voter will have cumulative
voting rights. The prerequisite of this scheme of participation is appropriate training which should
be provided by appropriate Government. The employees’ representatives / Worker directors
participate in all functions of the Board. They can also review the workings of shop and plant
councils and take decisions on matters not settled by the council.
Workers’ participation in share capital
According to Sachar Committee, the companies should reserve a portion of their new shares, say
about 10% to 15%, exclusively for the workers, called the workers’ share. These shares must be
offered by the company to its workers at first, failing that they can be offered to the existing share
holders or to the public. For this purpose section 77 and 81 of the Act were later amended. This act
now permits companies to give to the employees a loan upto 12 months’ salary or wages, not
exceeding Rs. 12000, for the purchase of the shares of the company.
Chapter – 8
Q. 6 & 7. (a) Define Labour Welfare.
(b) What are the basic features of Labour Welfare work.
(c)What are the need and aims of Labour Welfare work.
(d) Explain different approaches to Labour Welfare.
(e) State the different welfare activities taken by different agencies (State, Employer and Trade
Unions)
Ans. (a) The term “Labour Welfare” cannot be precisely defined as it is flexible and classic
and differs widely with time.
According to Labour Investigation Committee, “Anything done for the intellectual physical, moral
and economic betterment of the workers, whether by employers, by Government or by other
agencies, over and above what is laid down by law or what is normally expected of the contractual
benefits for which worker may have bargained.”
According to ILO,”Such services, facilities and amenities as may be established in or in the vicinity
of undertakings to enable the persons employed in them to perform their work in healthy, congenial
surrounding and provided with amenities conducive to good health and high morale.
(b) Characteristics / Basic features of Labour welfare works :-
(i) It is the work which is usually undertaken within the premises or in the vicinity of the
undertakings for the benefit of the employees and the member of their families.
(ii) The work generally include those items of welfare which are over and above what is provided
by statutory provisions.
(iii)The purpose of providing welfare amenities is to bring about the development of the whole
personality of the worker – his social, psychological, economic moral, cultural and intellectual
development to make him a good worker, a good citizen and a good member the family.
(iv)Welfare works are not only intra-mural but also extra mural, statutory as well as non-statutory
activities, undertaken by any of the three agencies – the employers, trade unions or the Government
- for the physical and mental development of a worker, both as a compensation for wear and tear
that he undergoes as a part of production process and also to enable him to improve upon the
capacity of contribution to the processes of production.
Need for Labour Welfare Works :-
When a worker, who is in fact a ruralite, comes to work in a factory, has to work and live in
unhealthy, congested factories and slum areas, with no outdoor recreation facilities. To escape from
the conditions of the tedious job, he absents himself, become irregular and often indisciplined,
hence the need for procuring welfare services arises. Thus the industrial system is characterized by
two basic factors, one, the working conditions are not congenial for health and second, when a
labourer joins an industry he has to work in an entirely strange atmosphere, which create problems
of adjustment.
Aims of Labour welfare works :
(i) It is partly humanistic, as it enables the workers to enjoy a fuller and richer life.
(ii) It is partly economic, because it improves the efficiency of the workers, increases
its availability where it is scarce and keeps him contented.
(iii) The aim is partly civic because it develops a sense of responsibility and dignity
among the workers and they make them worthy citizens of the nation.
Different approaches to labour welfare :
(a) Narrow and broader sense :-
In narrow sense welfare activities are concerned with day to day problems of the workers and
betterment of social relations at the place of work. In broader sense, welfare activities include not
only health and hygiene but also social insurance schemes, measure for protection of women and
young workers, limitations of hours of work, paid vacations, etc.
(b) Negative and positive :-
Moorthy opines that welfare activities, on one hand, are associated with counteracting the harmful
effects of industrialization (Negative) and on the other, it deals with the provisions of opportunities
for the worker and his family for a socially and personally good life.
(c) Intra Mural and Extra Mural welfare activities :-

Welfare and Amenities within the precincts of Welfare outside the establishment (Extra Mural)
the establishment (Intra Mural)
1. Latrines and urinals. 1.Medical Facilities.
2. Washing and bathing facilities 2. Education Facilities.
3. Rest shelters and canteens. 3. Housing Facilities.
4. Ambulance room and First Aid. 4. Recreation facilities.
5. Crèches. 5. Holiday Home and LTAs.
6. Arrangements for drinking water. 6. Workers’ cooperatives, cooperative credit

societies, consumers’ cooperative stores, fair
7. Health services including occupational price shops.
safely.
7. Vocational training for dependants of
8. Shift allowance. workers.
9. Sufficient lighting, ventilation. 8. Transport facilities to and from place of work.
10. Provisions of provident fund, pension, 9. Amusement and sports.

gratuity, maternity benefit.
10. Library and reading rooms.
(d) Welfare activities concerned with “Conditions of Employment” and “Conditions of work
people.”
Welfare activities concerned with conditions of employment are problems arising out of hours of
work, wages, holidays with pay, rest intervals, sanitation, safely, lighting ventilation, temperature,
elimination of dust, smoke, fumes and gases, sitting arrangements, provisions of urinals, lavatories
and bathing facilities, provisions of spittoons, Disposal of wastes, general cleanliness, canteen,
drinking water, rest rooms etc. Welfare activities concerned with “Conditions of work people”
include cooperatives, medical aid, maternity aid, antenatal and prenatal care, health not family
welfare, education, vocational training, transport facilities, etc.
Chapter – 9
Q.10. (a) Define Indiscipline / Misconduct concept in Organization. What are the causes of
misconduct? State different forms of misconduct. What are the remedial measures and procedure of
punishment in disciplinary action procedure?
(b) Explain the concept grievance. What are the causes of grievances? Explain the procedure of
settlement of grievance or model grievance procedure in India.
Ans. (a) Discipline is employee self control which prompts him to cooperate willingly with
the organizational standards, rule, objectives, etc. Misconduct/Indiscipline is a transgression of
some established and definite rules. It is violation of rules. Any breach / violation of these rules may
amount to misconduct. It is an act which is prejudicial to the interest of the employer or likely to
impair the reputation of the employer or create unrest even outside the premises of the
establishment and beyond duty hours.
Causes of Misconduct
(1) Unfair labour practices practised by employers.
(2) Victimization on the part of employers, like wage differentials, Unreasonable declaration of
payment of bonus or non payment of bonus, wrongful work assignments, defective
grievance procedure.
(3) Bad service conditions.
(4) Poverty, frustration, indebtedness generally over shadows the minds of workers. These
create absenteeism, dishonesty, disloyalty, violation of plant rules, gambling, incompetence,
willful damage to office property, strikes, go slow, etc; all lead to indiscipline.
Forms of Misconduct
According to Bombay High Court (Tiwari vs. Central Railway, 1960), the following acts
would constitute misconduct –
(1) Theft, fraud or dishonesty in connection with employers’ business.
(2) Illegal strike or inciting others to take part in illegal strikes.
(3) Breach of duly, absence without leave.
(4) Non-performance of jobs, duties.
(5) Breach of discipline. Refusal to accept charge sheet, order or other communication secured
in accordance with standing orders.
(6) Disrespects to or assaulting superior, disrupting relations with co-workers. Canvassing for
union membership collection of union dues within the premises of establishment except in
accordance with law or with the prior permission of manager.
(7) Willful damage to, or loss of, employer’s goods or property.
(8) Taking or giving bribes
(9) Habitual absence without leave for more than ten days.
(10) Riotous or violent behaviour during working hours at the establishment. Present petition of
any act or commission for which a fine may be imposed under Payment of Wages Act, 1936.
(11) Frequent repetition of any act or omission for which a fine, may be imposed to a maximum of
2% of wages ore month.
(12) Habitual negligence or neglect of work.

Clause 14 of the model standing orders describes acts and omissions which are generally
regarded as misconduct and provide for disciplinary actions.
Disciplinary Actions
The disciplinary action must conform to certain principles.
For example :-
(1) The principle of natural justice must guide all enquiries and actions. This means that no
person should be appointed to conduct on enquiry who himself is interested in the outcome.
(2) The principle of impartiality or consistency. This means under identical situations, there
should be no marked difference in the action taken.
(3) The disciplinary authority should afford reasonable opportunity to the offender to defend
himself.
Procedure for punishment :- Steps of disciplinary action
(1) Workman has committed a misconduct.
(2) Preliminary investigation is held for establishment of prima facie of the case.
(3) Management issue show cause notice / charge sheet inviting written explanation from the
workman who has alleged by committing the misconduct.
(4) The workman writes the written explanation and it has received by management. In case the
workman requests for time, reasonable time (3-4 days) should be given.
(5) In case the written explanation is satisfactory and the workman has admitted the misconduct,
management issues letter of disciplinary action, i.e., oral warning or suspension from work.
(6) In case the workman has denied the charges, management arranges domestic enquiry.
(7) Management appoints on Enquiry officer for conducting the domestic enquiry. The enquiry
officer must be on independent person who is not a witness/party to the misconduct. He /
she may be a company official or an outsider.
(8) The company official or the manager will appoint the enquiry officer in writing stating date,
time and place of enquiry advising him to submit enquiry report for further action. Copy of
this letter should be forwarded to the charge sheeted workman advising him to be present
and participate in Domestic Enquiry.
(9) The manager shall nominate a company representative on behalf of management to present
the case, produce documents, evidence and witnesses in support of misconduct.
(10) At stipulated date, time and place. The Enquiry Officer follows the following steps :-
(i) He will allow the co representative to produce a copy of charge sheet, written explanation of
workman. The co. representative will produce his witnesses one by one. Thereafter the charge
sheeted workman will be permitted to cross examine the management witnesses. No two witnesses
will be either examined in chief or cross examined simultaneously. On completion of the statement,
examination-in-chief and cross examination, the management witness will leave the Enquiry room
after confirming recording their signatures.
(ii) Next the charge sheeted workman or his representative will conduct his examination. The
representative of the charge sheeted employee should not be a lawyer. However, if co.
representative is a lawyer, the enquiry officer may allow a lawyer to represent the workman. Now
the charge sheeted workman or his representative will conduct his examination in chief one by one
and thereafter the management representative will cross examine the witness. There after the
witnesses of the charge sheeted workman leave the room after recording their signatures.
(iii) The enquiry officer shall not permit any leading question in the process of examination-in-
chief. However the leading questions are permitted in cross examination. The enquiry officer shall
record the proceedings of enquiry in English, explain the same in vernacular and obtain signature of
everybody present in enquiry room on every page. In case the charge sheeted workman or his
representative refuses to sign, the enquiry officer shall record the same. If the charge sheeted
workman or the management representative requests for adjournment of Domestic Enquiry on a
reasonable ground, the Enquiry officer shall adjourn the proceedings, fixing the next date of
enquiry, advise all concerned either orally or in writing and adjourn the same. He can refuse
adjournment if he is not convinced about the reason for the same. On completion of domestic
enquiry the officer shall conclude the same, obtain signature of every body present put his own
signature with place, date and time and close the Enquiry. After that enquiry officer submits a report
to his appointing authority. On the basis of his report the management will take the next action. It
may be any of the followings – (i) Oral warning, (ii) Written warning, (iii) Notice of Suspension,
(iv) Letter of Discharge.
FORM – II
(Letter of Charge)
To
…………………..
…………………..
It has been reported against you as under:
On ………………………… (1), at …………………………..(2), you ……………………..(3)
(Note: If more than one misconduct be alleged, repeat as above for each misconduct)
The acts as above, alleged to have been committed by you, amount to item(s) of
major misconduct under clause(s) ……………………………..of the standing orders (4), and would
warrant your dismissal from our service.
Accordingly, you are hereby required to show cases within ………………… days of
receipt hereof why you should not be dismissed from services or otherwise punished.
Should you fail to submit your explanation as required it will be presumed that you
have no explanation to offer and the matter may be disposed of without any further reference to
you.
*Since, the charges leveled against you are of a grave and serious nature, you are
hereby suspended pending further proceedings and final orders in the matter.
The receipt of this matter should be acknowledged.
Dated ……………………………….. MANAGER
1. Give date here.
2. Give time and place here.
3. Give full details of the alleged misconduct here. See page 30.
4. Delete the underlined portion of Standing Orders by not operative.
5. Usually two days; no hard and fast rule can be laid down fixing the period of
time, but it should be sufficient to enable the workman to prepare and submit his
explanation. Extension of time originally allowed may also be granted to avoid
hardship in particular cases. See pages 31,33.
* Should be omitted, if not required, or workman already suspended.
---------------------
FORM – III
(Notice of Enquiry)
To
…………………..
…………………..
We are in receipt of your explanation dated …………………….. in reply to our

letter of charge dated ……………………..., which has been found to be unsatisfactory.
(Should the workman fail to submit explanation, as required, write : We find you
have failed to submit your explanation in reply to our letter of charge dated ……………….. issued
to you, from which it would appear that you have no defence to offer.)
It has been decided to hold a written enquiry into the charges leveled against you;
accordingly, you are hereby advised to present yourself at ………………….. (place) at
……………… P.M./A.M. or ………………… for the purposes of the enquiry to be held by Mr.
……………………
At the enquiry, you shall be given full opportunity to conduct your defence by
examining your witnesses and cross examining Company’s witnesses.
Should you fail to present at the enquiry, as advised, the enquiry shall proceed ex-
parte.
Dated ………………………… MANAGER
------------------------------
FORM – VI
(Letter of Warning)
To
…………………..
…………………..
Further to the letter of charge dated …………………….. issued to you, and receipt of your
explanation dated ………………….. a written enquiry was held into the charges leveled against
you.
We find from the proceedings of the enquiry that full opportunities were given to you for
conducting your defence at the enquiry by examining you witnesses and cross-examining the
Company’s witnesses and that you fully participated in the enquiry.
We have carefully gone through the records of the enquiry, the connected papers and
documents and findings of the enquiring offer and concur with his findings that on the evidence
recorded at the enquiry the charges leveled against you have been sufficiently proved.
The charges leveled against you and proved against you at the enquiry being grave and
serious, the punishment warranted is that of dismissal.
Under the circumstances, we would have been justified in dismissing you from service.
However, in consideration of the *FACT THAT YOU HAVE APOLOGISED 2 as a generous
gesture it has been decided not to inflict upon you any severe punishment.
We hope you will appreciate the generosity shown to you by better conduct on you part in
future.
We have also to warn you that should you be found guilty of such or any other misconduct
in future, we will not hesitate to inflict upon you the extreme punishment of dismissal, if so
warranted by the facts and circumstances of the case.
Dated …………………………………… MANAGER

1. Delete the underlined portion if the workman has failed to submit any
explanation.
* by mistake it is typed in capital letter
2. Delete the underlined portion, if inappropriate; in its place any other extenuating
circumstance may be substituted, if necessary.
---------------------
FORM – I
(Notice of Suspension)
To
…………………..
…………………..
Certain allegation, amount to items of major misconduct under the Standing Orders, 2 have
been made against you.
Since the allegation a made against you are of a serious nature, you are hereby suspended
pending further proceedings and final orders in the matter.
Date …………………… MANAGER
1. It is usual to incorporate order of suspension in the Letter of

Charge as in Form – II; however, in all cases where the act of
misconduct complained of is grave and serious, e.g. rioting
inside the factory, it may be necessary, in the interest of the
safety and security of the establishment, to suspend the
workman concerned forthwith, - even before the issue of Letter
of Charge; this Form is recommended to be used in such cases.
Delete the underlined portion, if Standing Orders be not operative.
------------------------
FORM – V
(Letter of Discharge)
To
…………………..
…………………..
Further to the letter of charge dated ………………… issued to you and receipt of your
explanation dated ……………………… 2 a written enquiry was held into the charges leveled
against you.
We find from the proceedings of the enquiry that full opportunities were given to you for
conducting your witnesses and cross-examining Company’s witnesses and that you fully
participated in the enquiry.
documents and findings of the enquiry officer and concur with his findings that on the evidence
Under the circumstances we would have been justified in dismissing you from service.
However, inconsideration of the fact hat record of you previous service with us is clean, and 3 as a
generous gesture, it has been decided to discharge you from service.
1* Accordingly, you are hereby discharged from service with effect from the date of this
letter; your final settlement dues can be collected by you from the office any time on ……………
Date ……………………………. MANAGER
1. Give here the name and particulars of the workman.
2. Delete the underlined portion if the workman has failed to submit any
explanation.
3. Delete the underlined portion, if inappropriate; in its place, any other

extenuating circumstances may be substituted, if necessary.
* In case proceedings relating to an industrial dispute be pending, use instead of 1* above,

paras under 2*, or 3* as provided in Form IV substituting the word ‘dismiss’ therein by the word
‘discharge’.
------------------------------
FORM – IV
(Dismissal letter)
To
…………………..
…………………..
Further to the letter of charge dated ………………… issued to you, and receipt of your
explanation dated ………………. I, a written enquiry was held into the charges leveled against you.
*We find from the proceedings of the enquiry that full opportunities were given to you for
conducting your defence at the enquiry by examining you witnesses and cross-examining
Company’s witnesses and that you fully participated in the enquiry.
OR
*We find from the proceedings of the enquiry that inspite of full opportunities given to you
for being present at the enquiry, you did not show up at the enquiry and therefore the enquiry had to
be held ex-parte.
documents and findings of the enquiring officer and concur with his findings that on the evidence
2We have looked into you past record of service with us with a view to find if there are any
extenuating circumstances. We regret to find there are non. 3 (on the contrary we find that you
record is unclean in that 4. ……………….)
In the circumstances it has been decided to dismiss you from service.
1* Accordingly, you are hereby dismissed from service with effect from the date of this
letter; you final settlement dues ca be collected by you from the office any time on
………………….
OR
2*However, since proceedings relating to an industrial dispute are pending before ……………. 5
whose prior permission is necessary for effecting you decision to dismiss your, an application for
the necessary permission has been made before the said authority.
6 In the meantime, pending permission of the said authority and final orders you are suspended with
effect from the service of this letter.
OR
3* Accordingly, you are hereby dismissed from service with effect from the date of this
letter, you are also advise that since proceedings relating to an industrial dispute are pending before
………………………….. 6 and application for ‘approval’ of the action taken by us against you is
being t\made before the said authority, and further that along with this letter you are being paid a
month’s wages, in accordance with Section 3 of the Industrial Disputes Act. Your other dues can be
collected by you from the office any time on ………………
Date ………………………. MANAGER
1. Delete the underlined portion if the workman has failed to submit any explanation.
2. Some Standing Orders provide that the Worker’s previous record or extenuating or
aggravating circumstances, if any, may be taken into account in awarding punishment.
3. If previous record of service be not clean, say further.
4. State here in brief the previous instances of misconduct and punishments.
* Delete, if inappropriate.
5. State here the authority : Conciliation Officer, Board, Labour Court or Tibunal, before
whom the proceedings be pending.
6. Delete this paragraph, if the paragraph, if the workman has already been suspended.
* In case proceedings relating to an industrial dispute be pending, delete para 1* and use para
2* and the subsequent para instead, if ‘prior permission’ for dismissal be necessary under Section
33 of the Industrial Disputes Act; or para 3* instead, if ‘approval’ for dismissal be necessary.
(b) The explanation of the term “GRIEVANCE HANDLING AND PROCEDURE” is given in
the Examination of Grievances Recommendations (No. 130) adopted in 1967 by the International
Labour Conference. The recommendation states -
“The grounds for a grievance concerns with the relations between employer and workers which
affects or may affect the conditions of employment of one or several workers in the undertaking
when that measure appears contrary to provisions of an applicable collective agreement or of an
individual contract of employment, to work rules, to laws or regulations concerned with any
economic activity of country.”
Causes of Grievances
Grievances generally arise from day to day working relation in an undertaking. Usually a
worker or Trade Union protest against an act or omission of management they consider as violation
of workers’ right. Grievances typically arise of such matters like discipline and dismissal the
payment of wages and other fringe benefits, working time, overtime and time-off entitlements,
promotion, demotion and transfer, rights of supervisors and union officers, job classification
problems, fulfillment of obligations relating to health and safety provisions, unfair lot practices as
practiced by management.
Model Grievance procedure practised in India :-
Clause 15 of the Model Standing Orders in the schedule of the Industrial Employment
(Standing Orders) Act, 1946 specifies that all complaints arriving out of employment like any unfair
labour practices practised by management or wrongful action on the part of employee or his agent,
shall be submitted to the manager or other person specific in his behalf. Factories Act, 1948 requires
Labour Welfare Officers for settlement of grievances. During 15th session of the Indian Labour
Conference, 1957, “Code of discipline” concept was enacted. According to this code, Management
and Union should establish, upon a mutually agreed basis a grievance procedure which will lead to
speedy settlement of grievance. Later on, in September 1958, Model Grievance procedure was
enacted by the tripartite committee.
There are three cardinal principles of grievance settlement.

(1) Settlement at the lowest level.
(2) Settlement as expeditiously as possible.
(3) Settlement to the satisfaction of the aggrieved.
The model Grievance procedure has a three tier system for the settlement of grievances at the levels
of immediate supervisor, departmental or factory head and a bipartite grievance committee
representing the management and the Union, with a provision of arbitration or appeal to the
organization head. The procedure has successive time bound steps, in case of lack of satisfaction;
each step leads to the next step.
Under model grievance procedure, an aggrieved employee would first present his grievance
verbally to a designated officer, who would give a reply within 48 hours. If the worker is
dissatisfied with the decision or fails to get on answer within the stipulated time, he would
personally or accompanied by his departmental representative, present his grievance to the head of
the department. If the departmental head fails to give a decision within 3 days or if the decision
seems to be unsatisfactory to the worker, the aggrieved worker would present his grievance to
grievance committee comprising of nominees of workers and management. The committee would
communicate its recommendations to the manager within 7 days. If the recommendations are not
made within time or if a uniform decision is not possible, the committee would send all the relevant
papers to the manager for decision. The manager is expected to communicate his decision within 3
days. The worker would have a right of appeal the higher authorities for a revision of the manager’s
decision. All those appeals will have to be decided within 7 days of workers petition. The worker
can take a union official with him for discussion with appellate authority. In case of failure of
achieving at any unanimous decision at this stage, the union and management may refer the matter
to voluntary arbitration within a week of the receipt of the appellate authority’s (Top management)
final decision.
Q.11. State and explain Code of Discipline. What art the chief features and sanctions under the
code. Explain rights of recognized. Trade Union under the code.
Ans. In our 2nd five year plan a suggestion was made for formulation of Code of
Discipline in industry. In pursuance of this suggestion, the 15th Labour Conference, held in July
1957, discussed the question of discipline in Industry and laid down the following general
principles -
(1) There should be no lock out or strike with out notice.
(2) No unilateral action can be taken in connection with industrial matter.
(3) No Go-slow tactics.
(4) No deliberate or willful damages to the property of the plant.
(5) There should be existence of machinery for quick settlement of dispute.
(6) Any award, settlement or agreement should be quickly imposed.
(7) Any agreement which disturbs industrial harmony and peace should be avoided.
In first section the code defines the duties and responsibilities of employers, workers and even the
Government. In second section there are listed common obligations of management and Unions.
The third section deals with obligations of management only, the 4th section deals with obligations
of unions only. There are two Annexure of the code. Annexure A contains national level agreement
procedure on the criteria for recognition of Unions. Annexure B deals with the rights of recognized
unions.
Thus the Code of Discipline is a Government induced self imposed and mutually agreed voluntary
principle of discipline and aims at maintaining harmonious relations between management and
workers in industry. It restrains both the parties from taking any unilateral action. If induces them
for making best use of existing machinery for the settlement of disputes. The code compels the
parties not to indulge in strikes and Lockouts without notice. It encourages constructive cooperation
between workers and management at all. There should be no recourse to violence, victimization,
coercion, discrimination or interference with union activities. Neither party shall adopt any kind of
unfair labour practices. The Code aims at binding the management to take prompt action for quick
settlement of Grievance and implementation of awards and agreements.
Sanctions under the Code
The Central employers’ and workers’ organizations shall take the following steps against
their constituent units when they are found such of branch of code –
(1) Ask the unit to explain the infringement of any of the provisions of the Code.
(2) Give notice to the Unit to settle and set right the infringement within a specified period.
(3) Warn for serious nature of infringement.
(4) Impose any other penalty open to the organization.
(5) Disaffiliate the unit from its membership, in case of persistent violation of the code.
(6) Willful and persistent breaches of the Code by any party shall be widely publicized.
(7) Failure to observe the code would entail dercognition normally for a period of one year.
CODE OF DISCIPLINE IN INDUSTRY
(1) To maintain discipline in Industry
There has to be (i) a just recognition of the rights and responsibilities of either party by
employers and workers as defined by laws and agreements.
(ii) A proper and willful discharge of responsibilities and obligations by either party.
(2) To ensure better discipline in Industry, management and Union (s) agree
(i) That no unilateral action should be taken in connection with any industrial matter.
(ii) That the existing machineries for settlement of disputed should be utilized with utmost
expedition.
(iii) That there should be no strike or Lockout without notice.
(iv) That management and Union (s) shall bind themselves to settle all future differences, disputes
and grievances by mutual negotiation, conciliation and voluntary arbitration.
(v) That they will avoid recourse to (a) coercion (b) intimidation (c) victimization (d) litigation (e)
go slow (f) sit down and stay-in- strikes (g) Lockouts.
(vi) That they will promote constructive cooperation between their representatives at all levels.
(vii) That they will establish a model grievance procedure and nobody should follow any arbitrary
action which would by pass this procedure.
(3) Management Agrees
(i) Not to increase workloads unless agreed upon or settled otherwise.
(ii) Not to support or encourage any unfair labour practices.
(iii) To take prompt action for (a) settlement of a grievance (b) Implementation of settlements,
awards, decisions and orders.
(iv) To display provisions of Code in local language(s) in conspicuous places in the undertaking.
(v) To distinguish between actions justifying immediate discharge and where discharge must be
preceded by a warning, reprimand, suspension and other form of disciplinary action.
(4) Union(s) Agree
(i) Not to encourage any form of physical duress.
(ii) Not to permit demonstrations which are not peaceful and not to permit rowdyism in
demonstrations.
(iii) That their members will not engage in any union activity during working hours, except as
provided for by law, agreement or practice.

Industrial Relations (HR 404)

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Industrial Relation (HR 404) 1

Industrial Relations (HR 404)

(b) Mass production at low cost :-

(c) Specialization of functions:-

(d) Unhygienically harsh working and living condition :-

(e) Hard Work, higher capital formation and high savings:-

(h) Interdependence of specialized functions:-

(j) Social maladjustment and effect on personal life :-

(k) Alcoholism and Absenteeism from work place :-

(m) Loss of work ethics :- Disregard forwards employer and superiors.

The term “Industrial Relations” commonly denotes “employee–employer” relations, in both

Objective and Importance of Industrial Relations

(3) Varying patterns of IRs in organized and unorganized sectors –

(4) Development of healthy labour management relations – The spirit of workers

(6) Development of Industrial Democracy :- Establishment of shop councils, JMCS at the

(7) Recognition of human rights in Industry.

(8) Increase in labour productivity.

Scope of Industrial relations:

(1) Labour Relations :- Relation between different labour and Unions.

(2) Employer-Employee Relations :- Relation between management and employees.

(3) Group Relations :- relations between various groups of workmen.

Community or Public Relation :- Relations between industry and society.

TRADE UNIONS - INTRODUCTION

Definition of Trade Union

Trade union is an association either of employees or employers or of independent workers.

OBJECTIVE OF TRADE UNIONS

FUNCTIONS TRADE UNIONS

a. Militant or protective or intra-mutual functions: These functions include protecting the

GROWTH OF TRADE UNION MOVEMENT AND MEMBERSHIP

TRADE UNIONS AND EMPLOYERS'ASSOCIATIONS

All India Trade union Congress

A lot of benefits in the form of representation in various government committees, PSU

THE TRADE UMIONS ACT, 1926 AND LEGAL FRAMEWORK

 Status of a Registered Union

• A trade union enjoys the following advantages after registration.

• It becomes a body corporate.

• It gets a common seal.

• It can buy and hold movable and immovable property .

• It can enter into contracts with others.

• It can sue and be sued in its name.

• On the application by the union

• Where the application was obtained by fraud or mistake

• Where the union has ceased to exist.

• Under the act it is obligatory for the union to:

• allow anyone above the age of 15 years to be a member of the union;

• spend uniform funds for the purposes specified in the Act.

• Create a political fund.

• If a union is formed by giving wrong information or registration is obtained through

i. Representative union having not less than 25% of membership in an industry

ii. Qualified union having at least 5% of membership in an industry; and

iii. Primary union having at least 15% of membership in an undertaking.

The rights of a Representative union under the Act are:

iv. Office-bearers of the union cannot be dismissed or discharged.

3. Internal leadership has not been developed fully.

2. Personnel cum factional politics of the local union leaders;

3. Domination of unions by outside leaders;

5. The weak legal framework of trade unions.

Promotion of collective bargaining through recognition of sole bargaining agents

Improving the system of union recognition

Encouraging union security

Measures to Strengthen Trade Union Movement in India

United Labour Front