INDUSTRIAL RELATIONS AND LABOUR WELFARE 2011

UNIT - 1

MEANING AND DEFINITION OF INDUSTRIAL RELATION

Industrial relations are a multidisciplinary field that studies the employment relationship. Simply
the relationship between employer and employee is called Industrial Relation. But it also covers
the relation between employer vs. employer and employees vs. employees. To safeguard the
interests of the all the parties, harmonious relationship is necessary for both employers and
employees of the production. In order to maintain good relationship with the employees, the
main functions of every organization should avoid any dispute with them or settle it as early as
possible, so as to ensure industrial peace and harmony with higher productivity. The Industrial
Relation relations also called as labor - management, employee-employers relations.

Definitions:-
Industrial Relation is deals with the manpower of the enterprise and the management which is
concerned with – whether machine operator, skilled worker or manager.

Industrial Relation is a relation between employer and employees, employees and employees and
employees and trade unions. and the “process by which people and their organizations interact at
the place of work to establish the terms and conditions of employment.” - Industrial dispute Act
1947

Characteristics of Industrial Relations

 Industrial Relation born out of employment relationship in an industrial setting.

 IR is characterized by both conflict and co-operation.
 IR involves the study of conditions conducive to labor and management.
 IR involves executive and judiciary in the regulations of labor-management relations.

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FACTORS OF INDUSTRIAL RELATIONS

Industrial Relation encompasses all such factors that influence behavior of people at work. A few
such important factors are details below:

1. Institution: It includes government, employers, trade unions, unions federations or

associations, government bodies, labor courts, tribunals and other organizations which have
direct or indirect impact on the industrial relations systems.

2. Characters : It aims to study the role of workers unions and employers’ federations officials,
shop stewards, industrial relations officers/ manager, mediator/conciliators / arbitrator, judges of
labor court, tribunal etc.

3. Methods : Focus on collective bargaining, workers’ participation in the Industrial Relation

schemes, discipline procedure, grievance re-dressal machinery, dispute settlements machinery
working of closed shops, union reorganization, organizations of protests through methods like
revisions of existing rules, regulations, policies, procedures, hearing of labor courts, tribunals etc.

4. Contents : Includes matter pertaining to employment conditions like pay, hours of works,
leave with wages, health, and safety disciplinary actions, lay-off, dismissals retirements etc.,
laws relating to such activities, regulations governing labor welfare, social security, industrial
relations, issues concerning with workers’ participation in management, collective bargaining,
etc.

Objectives of Industrial relations

1. To safeguard the interest of labor and management who are participate in the process of
production is being securing the highest level of mutual understanding and goodwill among all
those sections in the industry.

2. To avoid industrial conflict or strife and develop harmonious relations, which are an
essential factor in the productivity of workers and the industrial progress of a country. To

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eliminate, as far as is possible and practicable, strikes, lockouts and gathers by providing
reasonable wages, improved living and working conditions, said fringe benefits.

3. To raise productivity to a higher level in an era of full employment by lessening the tendency
to high turnover and frequency absenteeism.

4. To establish and nurse the growth of an Industrial Democracy based on labor partnership in
the sharing of profits and of managerial decisions, so that ban individuals personality may grow
its full stature for the benefit of the industry and of the country as well.

5. To establish government control of such plants and units which are running at a loss or in
which, productions have to be regulated in the public interest. In fact the subsidy is to provide for
stable of the productions. It is necessary for mankind.

SCOPE OF INDUSTRIAL RELATIONS WORK

The staff employed in the industrial relations department should know the limitations within
which it has to function. The industrial relations director generally has several assistants who
help him to perform his functions effectively, and he usually reports directly to the president or
chairman of the board of directors of an organization.

 Administration, including overall organization, supervision and co-ordination of

industrial relations policies and programmes.
 Liaison with outside groups and personnel departments as well as with various cadres of
the management staff.
 The drafting of regulations, rules, laws or orders and their construction and
interpretation.. Position classification, including overall direction of job analysis, salary
and wage administration, wage survey and pay schedules.
 Recruitment and employment of workers and other staff.
 Employment testing, including intelligence tests, mechanical aptitude tests and
achievement tests.
 Placement, including induction and assignment.
 Training of apprentices, production workers, foremen and executives.

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  Employee counseling on all types of personnel problems-educational, vocational, health
or behavior problems.
 Medical and health services.
 Safety services, including first aid training.
 Group activities, including group health insurance, housing, cafeteria programmes and
social clubs.
 Suggestion plans and their uses in labor, management and production committees.
 Employee relations, especially collective bargaining with representatives and settling
grievances.
 Public relations.
 Research in occupational trends and employee attitudes, and analysis of labor turnover.
 Employee records for all purposes.
 Control of operation surveys, fiscal research and analysis.
 Benefit, retirement and pension programmes.

Importance of Industrial Relations

The healthy industrial relations are key to the progress. Their significance may be discussed as
under –

1. Uninterrupted production – The most important benefit of industrial relations is that this
ensures continuity of production. This means, continuous employment for all from manager to
workers. The resources are fully utilized, resulting in the maximum possible production. There is
uninterrupted flow of income for all. Smooth running of an industry is of vital importance for
several other industries; to other industries if the products are intermediaries or inputs; to
exporters if these are export goods; to consumers and workers, if these are goods of mass
consumption.

2. Reduction in Industrial Disputes – Good industrial relation reduce the industrial disputes.
Disputes are reflections of the failure of basic human urges or motivations to secure adequate
satisfaction or expression which are fully cured by good industrial relations. Strikes, lockouts,

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go-slow tactics, gherao and grievances are some of the reflections of industrial unrest which do
not spring up in an atmosphere of industrial peace. It helps promoting co-operation and
increasing production.
3. High morale – Good industrial relations improve the morale of the employees. Employees
work with great zeal with the feeling in mind that the interest of employer and employees is one
and the same, i.e. to increase production. Every worker feels that he is a co-owner of the gains of
industry. The employer in his turn must realize that the gains of industry are not for him along
but they should be shared equally and generously with his workers. In other words, complete
unity of thought and action is the main achievement of industrial peace. It increases the place of
workers in the society and their ego is satisfied. It naturally affects production because mighty
co-operative efforts alone can produce great results.

4. Mental Revolution – The main object of industrial relation is a complete mental revolution of
workers and employees. The industrial peace lies ultimately in a transformed outlook on the part
of both. It is the business of leadership in the ranks of workers, employees and Government to
work out a new relationship in consonance with a spirit of true democracy. Both should think
themselves as partners of the industry and the role of workers in such a partnership should be
recognized. On the other hand, workers must recognize employer’s authority. It will naturally
have impact on production because they recognize the interest of each other.

5. New Programmes – New programmes for workers development are introduced in an

atmosphere of peace such as training facilities, labor welfare facilities etc. It increases the
efficiency of workers resulting in higher and better production at lower costs.

6. Reduced Wastage – Good industrial relations are maintained on the basis of cooperation and
recognition of each other. It will help increase production. Wastages of man, material and
machines are reduced to the minimum and thus national interest is protected.

Effects of poor Industrial Relations

Poor Industrial Relation produces highly disquieting effects on the economic life of the country.
We may enumerate the ill-effects of poor Industrial Relations as under:

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1. Multiplier effects: Modern industry and for that matter modern economy are interdependent.
Hence although the direct loss caused due to industrial conflict in any one plant may not be very
great, the total loss caused due to its multipliers effect on the total economy is always very great.

2. Fall in normal tempo: poor Industrial Relations adversely effect the normal tempo of work so
that work far below the optimum level. Costs build up. Absenteeism and labor turnover increase.
Plants discipline breaks down and both the quality and quality of production suffer.

3. Resistance of change: Dynamic industrial situation calls for change more or less
continuously. Methods have to be improved. Economics have to be introduced. New products
have to be designed, produced and put in the market. Each of these tasks involves a whole chain
of changes and this is resisted bitterly if these are industrial conflict.

4. Frustration and social cost: every man comes to the work place not only to earn a living. He
wants to satisfy his social and egoistic needs also. When he finds difficulty in satisfying these
needs he feels frustrated. Poor Industrial Relations take a heavy toll in terms of human
frustration. They reduce cordiality and aggravate social tension.
Interrupted production

5. Increase in industrial disputes

6. Low morale among employees

Grievance

An employee's formal complaint regarding working condition or failure by management to stick

to its contract with the employee.

Grievance means any discontent or dissatisfaction, whether expressed or not and whether
valid or not, arising out of anything connected with the company that an employee thinks,
believes or even feels is unfair, unjust or inequitable. This discontent can arise out of something
connected with company, or expressed and implied, or may be valid, legitimate and rational or
untrue and irrational or completely ludicrous.

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Causes of Grievances

Various sources of grievance may be categorized under three heads: (i) management policies, (ii)
working conditions, and (iii) personal factors
1. Grievance resulting from management policies include:
o Wage rates
o Leave policy
o Overtime
o Lack of career planning
o Role conflicts
o Lack of regard for collective agreement
o Disparity between skill of worker and job responsibility
2. Grievance resulting from working conditions include:
o Poor safety and bad physical conditions
o Unavailability of tools and proper machinery
o Negative approach to discipline
o Unrealistic targets
3. Grievance resulting from inter-personal factors include
o Poor relationships with team members
o Autocratic leadership style of superiors
o Poor relations with seniors
o Conflicts with peers and colleagues

Ways to know about grievances

Exit Interview: Employees usually quit organization due to dissatisfaction or better prospect
elsewhere. Exit interview, if conducted carefully, can provide important information about
employee’s grievances. It should be remembered that those employees who believe in keeping
their relationship cordial, because they never know when their paths may cross again, will not
like to burn their bridges behind them by speaking about their grievances.

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Gripe Boxes: These are the boxes in which the employees can drop their anonymous
complaints. They are different from the suggestion boxes in which employees drop their named
suggestions with an intention to receive rewards.

Opinion Surveys: Group meetings, periodical interviews with employees, collective bargaining
session are some other means through which one can get information about employee’s
dissatisfaction before it turns into a grievance.

Open Door Policy: Some organizations extend a general invitation to their employees to
informally drop in the manager’s room any time and talk over their grievances. It also has the
following limitations although it may appear very attractive. These are: This policy is workable
only in very small organizations; under this policy the frontline supervisor who should be the
first man to know about the grievances of his subordinates is bypassed.

Step ladder policy:

Under this policy, the aggrieved employee has to follow a step by step procedure for getting his
grievance redressed. In this procedure, whenever an employee is confronted with a grievance, he
presents his problem to his immediate supervisor. If the employee is not satisfied with superior’s
decision, then he discusses his grievance with the departmental head. The departmental head
discusses the problem with joint grievance committees to find a solution. However, if the
committee also fails to redress the grievance, then it may be referred to chief executive. If the
chief executive also fails to redress the grievance, then such a grievance is referred to voluntary
arbitration where the award of arbitrator is binding on both the parties.

Grievance Settlement Procedure

The 15th session of Indian Labor Conference held in 1957 emphasized the need of an established
grievance procedure for the country which would be acceptable to unions as well as to
management. In the 16th session of Indian Labor Conference, a model for grievance procedure
was drawn up. This model helps in creation of grievance machinery. According to it, workers’
representatives are to be elected for a department or their union is to nominate them.
Management has to specify the persons in each department who are to be approached first and
the departmental heads who are supposed to be approached in the second step. The Model

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Grievance Procedure specifies the details of all the steps that are to be followed while redressing
grievances.

STEP 1: In the first step the grievance is to be submitted to departmental representative, who is a
representative of management. He has to give his answer within 48 hours.

STEP 2: If the departmental representative fails to provide a solution, the aggrieved employee
can take his grievance to head of the department, who has to give his decision within 3 days.

STEP 3: If the aggrieved employee is not satisfied with the decision of departmental head, he
can take the grievance to Grievance Committee. The Grievance Committee makes its
recommendations to the manager within 7 days in the form of a report. The final decision of the
management on the report of Grievance Committee must be communicated to the aggrieved
employee within three days of the receipt of report. An appeal for revision of final decision can
be made by the worker if he is not satisfied with it. The management must communicate its
decision to the worker within 7 days.

STEP 4: If the grievance still remains unsettled, the case may be referred to voluntary
arbitration.

Employee Discipline

Discipline Meaning
Discipline refers to the actions imposed by an organization on its employees for failure to follow
the organization's rules, standards, or policies.
Discipline – Definition
According to Richard D. Calhoon, “Discipline is the force that prompts individuals or groups to
observe rules, regulations, standards and procedures deemed necessary for an organization.”
Forms of Discipline
According to Megginson, discipline involves the following three things.
• Self-discipline.
• Orderly behaviour.

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 • Punishment
Self-discipline implies that a person brings the discipline in himself with a determination to
achieve the goals that he has set for himself in life.

Orderly behaviour refers to discipline as a condition that must exist for an orderly behaviour in
the organization.

Punishment is used to prevent indiscipline. When a worker goes astray in his conduct, he has to
be punished for the same and the recurrences of it must be prevented.

Discipline can either be positive or negative.

Positive Discipline

 Positive discipline involves creation of an atmosphere in the organization whereby

employees willingly conform to the established rules and regulations. Positive discipline
can be achieved through rewards and effective leadership. It is also called as self-
discipline.

Negative Discipline

 Under negative discipline, penalties are used to force the workers to obey rules and
regulations. In other words, workers try to adhere to rules and regulations out of fear of
warnings, penalties and other forms of punishment. This approach to discipline is called
negative or punitive approach. It is also called as progressive discipline or corrective
discipline.

Causes of Indiscipline

 Ineffective leadership which cannot control, coordinate and motivate workers.

 Low wages and poor working conditions.
 Lack of promotional opportunities due to which people feel stagnated.
 Absence of any code of conduct to regulate behavior on both sides.

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  Lack of timely redressal of workers’ grievances.
 Unfair management practices.
 Defective communication system
 Lack of workers’ education
 Uninteresting work
 Drunkenness and family problems
 Outside political influences
 Excessive work pressure

Kinds of punishment
Minor punishments
1. Oral Reprimand
 Mildest form of disciplinary action
 It is a verbal interaction between the employees and supervisor where they discuss the
problem behavior and the expectations to change the behaviors.
 Superior makes clear to the subordinate that he does not approve of the subordinate’s
behavior.
 It is given for minor offences like failure to obey safety rules, smoking in prohibited area,
sleeping on the job or giving sub-standard performance.
 It does not involve loss of wages to the employee.
2. Written Reprimand
 It is applied in case of habitual misconduct or inefficiency.
 It involves the documentation between employees and supervisor if the behavior
continues or if the employee further commits a serious offense.
 A written warning is more official and summarizes the previous oral attempts. This
written feedback is discussed with the employee and then placed in his personnel file.
 It is issued in writing and brought on record so that it may support, if necessary, any
substantive punishment that may be given to the employee in future.
 It states that certain privileges would be with held or withdrawn if the subordinate
continues with his present conduct.

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3. Loss of privileges
• For offences like tardiness or leaving work without permission, the employee may be put
to loss of privileges like good job assignment, right to select machine or other equipments
and freedom of movement in workplace or company.

4. Fines
• Fine means deduction from the remuneration of the employee by way of punishment.

• Power to make penal deductions from the remuneration of the employee by the employer
is not implied unless it is reserved under the contract of employment or statute.

5. Punitive Suspension
 Punitive suspension is inflicted on the workman as a punishment for some misconduct.
 Under this an employee is prohibited from performing the duties assigned to him and his
wages are with held for so long as the prohibition subsists.
 Suspension pending enquiry is different in which the employee is entitled to wages for
the period of suspension.

Major Punishments
Withholding of increments
 Withholding of annual increment of an employee in a graded scale is a major
punishment, for a certain period.
Demotion
 It means reduction of an employee to a lower grade from the one hitherto enjoyed by
him.
Discharge
 It means the termination of a worker’s service.
 According to Industrial Employment Standing Orders Act, 1946, 15 days notice has to be
given to employee there by paying wages.
Dismissal

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  It is referred as Industrial Capital Punishment, which is the ultimate and severe
punishment than discharge.
 Dismissal is a disqualification for future employment.
 In this the employee is not entitled to provident fund or gratuity benefits.

Essentials of Good Disciplinary System

Knowledge of Rules
 The employee must be informed about the instructions in a clear and understandable
manner.
Prompt Action
 All violations and misconducts –big and small – should be promptly enquired into. The
greater the delay the more one forgets and the more one feels that punishment is not
deserved.
Fair Action
 All violations – big and small should be duly punished.
 All individuals – big and small should receive equal punishment for equal indiscipline.
 Discipline should be uniformly enforced at all times.
 The alleged violation should be fully enquired into.
 The employee should always be given opportunity to explain his action.
Well defined procedure
 The procedure to be followed to reach to a penalty decision should be carefully laid
down.
 The supervisor must assure himself that some violation of the rules has taken place.
 He should precisely and objectively the nature of the alleged violations.
 He should then proceed to gather full facts about the case and maintain proper records.
 He should prepare the list of actions.
 The first list should include all types of disciplinary action to make certain that no
possibility is overlooked.
 The second list should classify penalties according to rank in order to acquaint the
executive and he should refer the case to superiors.

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  The third list should include only those penalties which the offence in question
specifically calls for.
 The appropriateness of disciplinary action should be decided in terms of effectiveness in
correcting the employee.
 The accused employee should have the right to appeal to higher authorities.

Constructive Handling of Disciplinary Action

 Disciplinary action should be handled in a constructive manner.
 It should be carried out by the immediate line supervisor.
 It should be taken in private.
 After disciplinary action has been taken the supervisor must assume a normal attitude
towards the employee.
Hot Stove Rule
 By Douglas McGregor
 Analogy between touching a hot stove and undergoing discipline.
 The burn is immediate
 Effect is consistent
 Effect is impersonal
 The effect is commensurate with the gravity of misconduct.

PROCESS OF HOLDING DOMESTIC ENQUIRY

1. Issue and service of charge sheet
Preliminary Enquiry
• In this enquiry, if the employee is proved he will be given charge sheet.
• Charge sheet should be properly worded and loose language should not be used.
• While stating the offence the date, place and time of his commission and all other
relevant details should be given.
• The proposed punishment may be mentioned.

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 • It should call upon the worker to submit an explanation in writing within a specified
date or time.

• Charge sheet should be issued under the signature of disciplining authority and not by
the enquiry officer.

• Charge sheet should be properly served and there should be strict proof of issue and
delivery so that the worker may not deny it.

• Get the signature of the employee on the copy of charge sheet.

• When the workmen is present handover to him and oblige signature on duplicate copy
that he has received.

• If he/she refuses to sign, then duplicate copy may be signed by the manager and two
other witnesses.

• Deliver it to him by register post, if the registered charge sheet is returned un served.

2. Consideration of Explanation
• The workmen receiving the charge sheet may

• Submit his explanation refusing the charge sheet then it is to be carefully examined to
find out whether the explanation is satisfactory or not.

• Apply for an extension of time for submitting an explanation.

• Fail to submit his explanation, then the employee may follow further proceedings of the
enquiry.

3. Giving Notice of Enquiry

• The enquiry should be normally held within a reasonable time of receiving the
explanation.

• This happens in case of unsatisfactory explanation.

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 • Then sufficient notice to be given later.

4. Suspension pending enquiry

Where the nature of misconduct is grave and serious, and if it is in the interest of security
and safety and maintenance of good order and discipline in the establishment, the
workmen may be suspended with pay till the proceedings are concluded.

5. Proceedings of the Enquiry

Enquiry into the charges:

• Deciding as to who should conduct

• Deciding as to how to proceed

• Order of examining witnesses

Enquiry Officer
• Standing orders may provide as to who should hold the enquiry.
• Otherwise a labour welfare officer may be nominated.
• The Enquiry officer may be either the member of management or an outsider or an
employer’s lawyer or a manager of another business but not a person who is a witness or
who is himself involved in the incident.
Role of Enquiry Officer
• He has to collect information and arrive at a conclusion.
• He should not act as a prosecutor.
• The Enquiry officer has authority to give an adjournment to the charge sheeted workmen.
• Principles of natural justice should be strictly followed.
Request for adjournment
• If the workmen concerned request for further time on reasonable ground then another
enquiry dates should be fixed and conveyed.

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Nominee of the accused
• If the charge sheeted employee would like another employee to represent and assist him
in the conduct of his defense with the permission of enquiry officer.
Interpreter –
• is the agent who interprets the matter for some other person. It is allowed when the
person facing the enquiry is not familiar with the local language.

Order of examining witnesses

Management witness
• They produce their witness to prove the charges against employees
• They were cross examine by the employee with the management witnesses.
• Employee will produce his or her own witnesses.
• Management will cross examine the witnesses produced by the employee.

Expartite Enquiry
• When the workman is not co-operative or refused to attend the enquiry or refuse to
explain without the participation of the employee this enquiry will be conducted.

6. Recordings and findings of the Enquiry

Findings of the enquiry officer

• He has to find whether the charges made out is true or not.
• Communicate the findings of the enquiry to the management or discuss with them and
award the punishment.
7. Awarding the punishment
• It is a management task

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 • Punishment awarded should be based on the findings of the enquiry and past record of
the employee.
• This is to know and analyze the misconduct.
• Gravity of the misconduct should be taken into account.
8. Communication of the punishment
• A decision on punishment should be communicated to the concerned workmen as
expeditiously as possible.
• The letter communicating the punishment should contain the following:
• Reference to the enquiry
• Reference to the findings of the enquiry
• Decision whether to punish or not
• Date from which the punishment is effective.

Principles of Natural Justice

 The workmen charged should be given fair opportunity to present witnesses of his
choice on whom he relies.
 He has the right to cross examine the management’s evidence.
 The evidence of the management should be taken in his presence.
 No material should be used against him without giving him an opportunity to explain.
 The enquiry against the employee should be fair and conducted by an impartial person.
 The punishment awarded should not be out of proportion to the misconduct.

Arbitration
Arbitration, a form of alternative dispute resolution (ADR), is a technique for the resolution of
disputes outside the courts, where the parties to a dispute refer it to one or more persons, by
whose decision they agree to be bound. It is a settlement technique in which a third party reviews
the case and imposes a decision that is legally binding for both sides. Arbitration can be either
voluntary or mandatory. Arbitration is a proceeding in which a dispute is resolved by an
impartial adjudicator whose decision the parties to the dispute have agreed, will be final and
binding.

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Adjudication
It is the legal process by which an adjudicator or judge reviews evidence and argumentation
including legal reasoning set forth by opposing parties or litigants to come to a decision which
determines rights and obligations between the parties involved. Three types of disputes are
resolved through adjudication:

1. Disputes between private parties, such as individuals or corporations.

2. Disputes between private parties and public officials.
3. Disputes between public officials or public bodies.

Conciliation
 A form of Alternate Dispute Resolution (ADR) in which a neutral third-party hears both
sides and then issues a non-binding suggested resolution.

 Conciliation is neither arbitration nor mediation. The parties choose an independent third
party who hears both sides, either privately or together, and then prepares a compromise
which the conciliator believes is a fair disposition of the matter. The conciliator's report
or conclusions are then put to both sides, who may agree or disagree with it. It is not
binding nor is it enforceable unless the parties adopt it.
 Conciliation is used in labor disputes before arbitration
 Conciliation means bringing two opposing sides together to reach a compromise in an
attempt to avoid taking a case to trial.

 Arbitration, in contrast, is a contractual remedy used to settle disputes out of court. In

arbitration the two parties in controversy agree in advance to abide by the decision made
by the arbitrator, whereas conciliation is less structured.

Mediation
Mediation, as used in law, is a form of alternative dispute resolution (ADR), is a way of
resolving disputes between two or more parties. A third party, the mediator assists the parties to

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negotiate their own settlement (facilitative mediation). In some cases, mediators may express a
view on what might be a fair or reasonable settlement, generally where all the parties agree that
the mediator may do so (evaluative mediation).

One significant difference between conciliation and mediation lies in the fact that conciliators
possess expert knowledge of the domain in which they conciliate. The conciliator can make
suggestions for settlement terms and can give advice on the subject-matter. Conciliators may also
use their role to actively encourage the parties to come to a resolution. In certain types of dispute
the conciliator has a duty to provide legal information. This helps any agreement reached to
comply with any relevant statutory framework pertaining to the dispute. Therefore conciliation
may include an advisory aspect.

Mediation works purely facilitative, the practitioner has no advisory role. Instead, a mediator
seeks to help parties to develop a shared understanding of the conflict and to work toward
building a practical and lasting resolution

TRADE UNIONISM IN INDIA

A trade union is an organization of employees formed on a continuous basis for the purpose of
securing diverse range of benefits. It is a continuous association of wage earners for the purpose
of maintaining and improving the conditions of their working lives.

The Trade Union Act 1926 defines a trade union as a combination, whether temporary or
permanent, formed primarily for the purpose of regulating the relations between workmen and
employers or between workmen and workmen, or between employers and employers, or for
imposing restrictive condition on the conduct of any trade or business, and includes any
federation of two or more trade unions.

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Then this definition, primarily, talks about three relationships. They are the relationships
between the:

 workmen and workmen,

 workmen and employers, and

 Employers and employers.

Thus, a trade union can be seen as a group of employees in a particular sector, whose aim is to
negotiate with employers over pay, job security, working hours, etc, using the collective power
of its members. In general, a union is there to represent the interests of its members, and may
even engage in political activity where legislation affects their members. Trade unions are
voluntary associations formed for the pursuit of protecting the common interests of its members
and also promote welfare. They protect the economic, political and social interests of their
members.

Features of trade unions:

1. It is an association either of employers or employees or of independent workers. They

may consist of :-

 Employers’ association (e.g., Employer’s Federation of India, Indian paper mill

association, etc.)

 General labor unions

 Friendly societies

 Unions of intellectual labor (e.g., All India Teachers Association)

2. It is formed on a continuous basis. It is a permanent body and not a casual or temporary

one. They persist throughout the year.

3. It is formed to protect and promote all kinds of interests –economic, political and social-
of its members. The dominant interest with which a union is concerned is, however, economic.

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4. It achieves its objectives through collective action and group effort. Negotiations and
collective bargaining are the tools for accomplishing objectives.

5. Trade unions have shown remarkable progress since their inception; moreover, the
character of trade unions has also been changing. In spite of only focusing on the economic
benefits of workers, the trade unions are also working towards raising the status of labors as a
part of industry.

OBJECTIVES OF TRADE UNIONS

Trade unions are formed to protect and promote the interests of their members. Their primary
function is to protect the interests of workers against discrimination and unfair labor practices.
Trade unions are formed to achieve the following objectives:

Representation

Trade unions represent individual workers when they have a problem at work. If an employee
feels he is being unfairly treated, he can ask the union representative to help sort out the
difficulty with the manager or employer. Unions also offer their members legal representation.
Normally this is to help people get financial compensation for work-related injuries or to assist
people who have to take their employer to court.

Negotiation

Negotiation is where union representatives, discuss with management, the issues which affect
people working in an organization. There may be a difference of opinion between management
and union members. Trade unions negotiate with the employers to find out a solution to these
differences. Pay, working hours, holidays and changes to working practices are the sorts of
issues that are negotiated. In many workplaces there is a formal agreement between the union
and the company which states that the union has the right to negotiate with the employer. In
these organizations, unions are said to be recognized for collective bargaining purposes.

Voice in decisions affecting workers

The economic security of employees is determined not only by the level of wages and duration
of their employment, but also by the management’s personal policies which include selection of

22
employees for layoffs, retrenchment, promotion and transfer. These policies directly affect
workers. The evaluation criteria for such decisions may not be fair. So, the intervention of unions
in such decision making is a way through which workers can have their say in the decision
making to safeguard their interests.

Member services

During the last few years, trade unions have increased the range of services they offer their
members. These include:

 Education and training - Most unions run training courses for their members on
employment rights, health and safety and other issues. Some unions also help members
who have left school with little education by offering courses on basic skills and courses
leading to professional qualifications.

 Legal assistance - As well as offering legal advice on employment issues, some unions
give help with personal matters, like housing, wills and debt.

 Financial discounts - People can get discounts on mortgages, insurance and loans from
unions.

 Welfare benefits - One of the earliest functions of trade unions was to look after
members who hit hard times. Some of the older unions offer financial help to their
members when they are sick or unemployed.

Historical Development of Trade Unions in India

The trade unionism in India developed quite slowly as compared to the western nations. Indian
trade union movement can be divided into three phases.

The first phase (1850 to1900)

During this phase the inception of trade unions took place. During this period, the working and
living conditions of the labor were poor and their working hours were long. Capitalists were only
interested in their productivity and profitability. In addition, the wages were also low and general
economic conditions were poor in industries. In order to regulate the working hours and other

23
service conditions of the Indian textile laborers, the Indian Factories Act was enacted in 1881. As
a result, employment of child labor was prohibited.

The growth of trade union movement was slow in this phase and later on the Indian Factory Act
of 1881 was amended in 1891. Many strikes took place in the two decades following 1880 in all
industrial cities. These strikes taught workers to understand the power of united action even
though there was no union in real terms. Small associations like Bombay Mill-Hands Association
came up by this time.

The second phase (1900 to 1946)

This phase was characterized by the development of organized trade unions and political
movements of the working class. Between 1918 and 1923, many unions came into existence in
the country. At Ahmedabad, under the guidance of Mahatma Gandhi, occupational unions like
spinners’ unions and weavers’ unions were formed. A strike was launched by these unions under
the leadership of Mahatma Gandhi who turned it into a satyagrah. These unions federated into
industrial union known as Textile Labor Association in 1920.In 1920, the First National Trade
union organization (The All India Trade Union Congress (AITUC)) was established. Many of the
leaders of this organization were leaders of the national Movement. In 1926, Trade union law
came up with the efforts of Mr. N Joshi that became operative from 1927. During 1928, All India
Trade Union Federation (AITUF) was formed.

The Third Phase (after 1947)

The third phase began with the emergence of independent India (in 1947). The partition of
country affected the trade union movement particularly Bengal and Punjab. By 1949, four central
trade union organizations were functioning in the country:

1. The All India Trade Union Congress,

2. The Indian National Trade Union Congress,

3. The Hindu Mazdoor Sangh, and

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4. The United Trade Union Congress

The working class movement was also politicized along the lines of political parties. For instance
Indian national trade Union Congress (INTUC) is the trade union arm of the Congress Party. The
AITUC is the trade union arm of the Communist Party of India. Besides workers, white-collar
employees, supervisors and managers are also organized by the trade unions, as for example in
the Banking, Insurance and Petroleum industries.

Trade unions in India

The Indian workforce consists of 430 million workers, growing 2% annually. The Indian labor
markets consist of three sectors:

 The rural workers, who constitute about 60 per cent of the workforce.

 Organized sector, which employs 8 per cent of workforce, and

 The urban informal sector (which includes the growing software industry and other
services, not included in the formal sector) which constitutes the rest 32 per cent of the
workforce.

At present there are twelve Central Trade Union Organizations in India:

1. All India Trade Union Congress (AITUC)

2. Bharatiya Mazdoor Sangh (BMS)

3. Centre of Indian Trade Unions (CITU)

4. Hind Mazdoor Kisan Panchayat (HMKP)

5. Hind Mazdoor Sabha (HMS)

6. Indian Federation of Free Trade Unions (IFFTU)

7. Indian National Trade Union Congress (INTUC)

8. National Front of Indian Trade Unions (NFITU)

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9. National Labor Organization (NLO)

10. Trade Unions Co-ordination Centre (TUCC)

11. United Trade Union Congress (UTUC) and

12. United Trade Union Congress - Lenin Sarani (UTUC - LS)

Functions of Trade Unions

Trade unions perform a number of functions in order to achieve the objectives. These functions
can be broadly classified into three categories:

(i) Militant functions,

(ii) Fraternal functions

Militant Functions

One set of activities performed by trade unions leads to the betterment of the position of their
members in relation to their employment. The aim of such activities is to ensure adequate wages
secure better conditions of work and employment get better treatment from employers, etc.
When the unions fail to accomplish these aims by the method of

Collective bargaining and negotiations, they adopt an approach and put up a fight with the
management in the form of go-slow tactics, strike, boycott, gherao, etc. Hence, these functions of
the trade unions are known as militant or fighting functions. Thus, the militant functions of trade
unions can be summed up as:

 To achieve higher wages and better working conditions

 To raise the status of workers as a part of industry

 To protect labors against victimization and injustice

Fraternal Functions

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Another set of activities performed by trade unions aims at rendering help to its members in
times of need, and improving their efficiency. Trade unions try to foster a spirit of cooperation
and promote friendly industrial relations and diffuse education and culture among their members.
They take up welfare measures for improving the morale of workers and generate self confidence
among them. They also arrange for legal assistance to its members, if necessary. Besides, these,
they undertake many welfare measures for their members, e.g., school for the education of
children, library, reading-rooms, in-door and out-door games, and other recreational facilities.
Some trade unions even undertake publication of some magazine or journal. These activities,
which may be called fraternal functions, depend on the availability of funds, which the unions
raise by subscription from members and donations from outsiders, and also on their competent
and enlightened leadership. Thus, the fraternal functions of trade unions can be summed up as:

 To take up welfare measures for improving the morale of workers

 To generate self confidence among workers

 To encourage sincerity and discipline among workers

 To provide opportunities for promotion and growth

 To protect women workers against discrimination

Role of trade unions in Industrial Relations

The existence of a strong and recognized trade union is a pre-requisite to industrial peace.
Decisions taken through the process of collective bargaining and negotiations between employer
and unions are more influential. Trade unions play an important role and are helpful in effective
communication between the workers and the management. They provide the advice and support
to ensure that the differences of opinion do not turn into major conflicts. The central function of
a trade union is to represent people at work. But they also have a wider role in protecting their
interests. They also play an important educational role, organizing courses for their members on
a wide range of matters. Seeking a healthy and safe working environment is also prominent
feature of Union activity.

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Trade unions help in accelerated pace of economic development in many ways as follows:

 by helping in the recruitment and selection of workers.

 by inculcating discipline among the workforce

 by enabling settlement of industrial disputes in a rational manner

 by helping social adjustments. Workers have to adjust themselves to the new

working conditions, the new rules and policies. Workers coming from different
backgrounds may become disorganized, unsatisfied and frustrated. Unions help
them in such adjustment.

Trade unions are a part of society and as such, have to take into consideration the national
integration as well. Some important social responsibilities of trade unions include:

 promoting and maintaining national integration by reducing the number of

industrial disputes

 incorporating a sense of corporate social responsibility in workers

 achieving industrial peace

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 UNIT 2

COLLECTIVE BARGAINING

Meaning

Collective bargaining is process of joint decision making and basically represents a democratic
way of life in industry. It is the process of negotiation between firm’s and workers’
representatives for the purpose of establishing mutually agreeable conditions of employment. It
is a technique adopted by two parties to reach an understanding acceptable to both through the
process of discussion and negotiation.

Definition

ILO has defined collective bargaining as, negotiation about working conditions and terms of
employment between an employer and a group of employees or one or more employee,
organization with a view to reaching an agreement wherein the terms serve as a code of defining
the rights and obligations of each party in their employment/industrial relations with one another.

Concept of Collective Bargaining

Collective bargaining involves discussions and negotiations between two groups as to the terms
and conditions of employment. It is called ‘collective’ because both the employer and the
employee act as a group rather than as individuals. It is known as ‘bargaining’ because the
method of reaching an agreement involves proposals and counter proposals, offers and counter
offers and other negotiations.

Thus collective bargaining:

 is a collective process in which representatives of both the management and employees

participate.

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  is a continuous process which aims at establishing stable relationships between the parties
involved.

 not only involves the bargaining agreement, but also involves the implementation of such
an agreement.

 attempts in achieving discipline in the industry

 is a flexible approach, as the parties involved have to adopt a flexible attitude towards
negotiations.

Characteristics of Collective Bargaining

 It is a group process, wherein one group, representing the employers, and the other,
representing the employees, sit together to negotiate terms of employment.

 Negotiations form an important aspect of the process of collective bargaining i.e., there is
considerable scope for discussion, compromise or mutual give and take in collective
bargaining.

 Collective bargaining is a formalized process by which employers and independent trade

unions negotiate terms and conditions of employment and the ways in which certain
employment-related issues are to be regulated at national, organizational and workplace
levels.

 Collective bargaining is a process in the sense that it consists of a number of steps. It

begins with the presentation of the charter of demands and ends with reaching an
agreement, which would serve as the basic law governing labor management relations
over a period of time in an enterprise. Moreover, it is flexible process and not fixed or
static. Mutual trust and understanding serve as the byproducts of harmonious relations
between the two parties.

 It a bipartite process. This means there are always two parties involved in the process of
collective bargaining. The negotiations generally take place between the employees and
the management. It is a form of participation.

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  Collective bargaining is a complementary process i.e. each party needs something that the
other party has; labor can increase productivity and management can pay better for their
efforts.

 Collective bargaining tends to improve the relations between workers and the union on
the one hand and the employer on the other.

 Collective Bargaining is continuous process. It enables industrial democracy to be

effective. It uses cooperation and consensus for settling disputes rather than conflict and
confrontation.

 Collective bargaining takes into account day to day changes, policies, potentialities,
capacities and interests.

 It is a political activity frequently undertaken by professional negotiators.

PHASES IN COLLECTIVE BARGAINING

The actual bargaining typically goes through several stages. First, each side presents its demands.
At this stage both parties are usually quiet far apart on some issues. Second, there is a reduction
of demands. At this stage, each side trades off some of its demands to gain others. Third comes
the subcommittee studies; the parties form joint subcommittees to try to work out reasonable
alternatives. Fourth, the parties reach an informal settlement and each group goes back to its
sponsor. Union representatives check informally with their superiors and the union members;
management representative check with top management. Finally, once everything is in order, the
parties fine-tune and sign a formal agreement

The collective bargaining process comprises of five core steps:

1. Prepare: This phase involves composition of a negotiation team. The negotiation team should
consist of representatives of both the parties with adequate knowledge and skills for negotiation.
In this phase both the employer’s representatives and the union examine their own situation in
order to develop the issues that they believe will be most important. The first thing to be done is
to determine whether there is actually any reason to negotiate at all. A correct understanding of

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the main issues to be covered and intimate knowledge of operations, working conditions,
production norms and other relevant conditions is required.

2. Discuss: Here, the parties decide the ground rules that will guide the negotiations. A process
well begun is half done and this is no less true in case of collective bargaining. An environment
of mutual trust and understanding is also created so that the collective bargaining agreement
would be reached.

3. Propose: This phase involves the initial opening statements and the possible options that exist
to resolve them. In a word, this phase could be described as ‘brainstorming’. The exchange of
messages takes place and opinion of both the parties is sought.

4. Bargain: negotiations are easy if a problem solving attitude is adopted. This stage comprises
the time when ‘what ifs’ and ‘supposals’ are set forth and the drafting of agreements take place.

5. Settlement: Once the parties are through with the bargaining process, a consensual agreement
is reached upon wherein both the parties agree to a common decision regarding the problem or
the issue. This stage is described as consisting of effective joint implementation of the agreement
through shared visions, strategic planning and negotiated change.

Goals of Collective Bargaining

Collective bargaining includes not only negotiations between the employers and unions but also
includes the process of resolving labor-management conflicts. Thus, collective bargaining is,
essentially, a recognized way of creating a system of industrial jurisprudence. It acts as a method
of introducing civil rights in the industry, that is, the management should be conducted by rules
rather than arbitrary decision making. It establishes rules which define and restrict the traditional
authority exercised by the management.

Importance to employees

 Collective bargaining develops a sense of self respect and responsibility among the
employees.

 It increases the strength of the workforce, thereby, increasing their bargaining capacity as
a group.

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  Collective bargaining increases the morale and productivity of employees.

 It restricts management’s freedom for arbitrary action against the employees. Moreover,
unilateral actions by the employer are also discouraged.

 Effective collective bargaining machinery strengthens the trade unions movement.

 The workers feel motivated as they can approach the management on various matters and
bargain for higher benefits.

 It helps in securing a prompt and fair settlement of grievances. It provides a flexible

means for the adjustment of wages and employment conditions to economic and
technological changes in the industry, as a result of which the chances for conflicts are
reduced.

Importance to employers

 It becomes easier for the management to resolve issues at the bargaining level rather than
taking up complaints of individual workers.

 Collective bargaining tends to promote a sense of job security among employees and
thereby tends to reduce the cost of labor turnover to management.

 Collective bargaining opens up the channel of communication between the workers and
the management and increases worker participation in decision making.

 Collective bargaining plays a vital role in settling and preventing industrial disputes.

Importance to society

 Collective bargaining leads to industrial peace in the country

 It results in establishment of a harmonious industrial climate which supports which helps

the pace of a nation’s efforts towards economic and social development since the
obstacles to such a development can be reduced considerably.

 The discrimination and exploitation of workers is constantly being checked.

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  It provides a method or the regulation of the conditions of employment of those who are
directly concerned about them.

Prerequisites of Collective Bargaining

 Competent team from both the parties of the bargaining.

 Freedom of association i.e. workers as well as employers will have the right to form
organizations of their own to protect their interests.

 Truly representative and enlightened unions. Trade unions should encourage internal
democracy and have periodic consultations with the rank and file members.

 Mutual recognition

 Favorable political climate.

 Guarantee for faithful observance of the agreement

 Willingness to give and take of the parties.

Productivity Bargaining

Is a form of collective bargaining leading to a productivity agreement in which management

offers a pay raise in exchange for alterations to employee working practices designed to increase
productivity

Collective Bargaining Agreement

Collective bargaining generally includes negotiations between the two parties (employees’
representatives and employer’s representatives). Collective bargaining consists of negotiations
between an employer and a group of employees that determine the conditions of employment.
Often employees are represented in the bargaining by a union or other labor organization. The
result of collective bargaining procedure is called the collective bargaining agreement (CBA).

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Collective agreements may be in the form of procedural agreements or substantive agreements.
Procedural agreements deal with the relationship between workers and management and the
procedures to be adopted for resolving individual or group disputes.

This will normally include procedures in respect of individual grievances, disputes and
discipline. Frequently, procedural agreements are put into the company rule book which provides
information on the overall terms and conditions of employment and codes of behavior. A
substantive agreement deals with specific issues, such as basic pay, overtime premiums, bonus
arrangements, holiday entitlements, hours of work, etc. In many companies, agreements have a
fixed time scale and a collective bargaining process will review the procedural agreement when
negotiations take place on pay and conditions of employment.

Bargaining Hints

 Be sure to set clear objectives for every bargaining item, and be sure you understand the
reason for each.

 Do not hurry

 When in doubt, consult with your associates

 Be well prepared with firm data supporting your position.

 Always strive to keep some flexibility in your position

 Don’t concern yourself with what the other party says and does; find out why.

 Respect the importance of face saving for the other party.

 Be alert to the real intentions of the other party not only for goals, but also for priorities.

 Be a good listener

 Build a reputation for being fair but firm.

 Learn to control your emotions and use as a tool.

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 As you make each bargaining move, be sure you know its relationship to all other moves.

 Measure each move against your objectives

 Pay close attention to the wording of every clause negotiated; they are often a source of
grievances

 Remember that collective bargaining is a compromise process. There is no such thing as

having all the pie.

 Try to understand people and their personalities

 Consider the impact of present negotiations on those in future years.

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 UNIT: IV

LABOUR WELFARE

Labour welfare activities in an industrialized society has far reaching impact not only on the
work force but also all the facets of human resources. Labour welfare includes all such activities,
which not only secures existential necessities but also ensures improvement in spiritual and
emotional quotient. It comprises of short term and long terms goal toward building a humane
society.
Definition
Labour welfare has been defined in various ways, though no single definition has found
universal acceptance. The Oxford dictionary defines labour welfare as "Efforts to make life
worth living for workmen."

In the Report II of the ILO Asian Regional conference, it has been stated that worker's welfare
may be understood to mean "such services, facilities and amenities, which may be established
outside or in the vicinity of undertakings, to enable the persons employed therein to perform their
work in healthy and congenial surroundings and to provide them with the amenities conducive to
good health and high morale."

Need for Labour Welfare

The need for the Labour welfare arises from the very nature of industrial system which is
characterized by two basic factors: one the conditions under which work is carried on are not
congenial for the health and second when a labourer joins an industry has to work in an entirely

37
strange atmosphere, which creates problems of adjustments. 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 tiring conditions of his
tedious and tiresome job, he absents himself, becomes irregular and often undisciplined. Hence
the need for providing welfare Services arises.

The necessity for labour welfare is felt more in our country because of its developing economy
aimed at rapid economic and social development. The need for labour welfare was strongly felt
by the committee of Royal Commission on Labour as far back as in 1931. Primarily because of
lack of commitment to industrial work among factory workers and also the harsh treatment they
received from the employers. The resolution passed by the Indian National Congress for
Fundamental Right and economic programme, in 1931 emphasized that the state should
safeguard the interest of industrial workers and should secure for them, by suitable legislation, a
living wage, healthy conditions of work, limited hours of labour, suitable machinery for
settlement of disputes between employers and workmen and protection against the economic
consequences of old age, sickness and unemployment.

The Planning Commission also realized the necessity of Labour Welfare. The working
conditions should be such as to safeguard his health and protect him against occupational
hazards. The worker should, also be equipped with necessary technical training and a certain
level of general education because of the high rate of illiteracy among the workers. The facilities
would also help in decreasing the number of industrial accidents and increasing the workers
efficiency. Therefore proper organization and administration Welfare facilities can play a vital
role in promoting better working conditions and living standards for industrial workers and also
increase their productivity especially in developing countries. It is obvious that the scope of
Labour Welfare depends on the kind of Labour problems.

OBJECTIVES OF LABOUR WELFARE ACTIVITIES

The object of welfare activities is
To promote economic development by increasing production and productivity

38
the underlying principle is to make the workers given their loyal services ungrudgingly in
genuine spirit of co-operation, in return for obligations, voluntary and compulsory, accepted by
the employee towards the general well-being of the employees.

Improving the efficiency of the labour

Efficiency gives double reward, one in the form of increased production and the other in the
shape of higher wages due to achievement of higher productivity. Welfare activities add to their
efficiency and efficiency in turn help the worker to earn more wages. Therefore, welfare
activities in an organization are twice blessed. It helps the employer and the employee both.

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 member of the family.

Partly humanitarian i.e., to enable workers to enjoy a fuller and richer life
Partly economic i.e., to improved the efficiency of the workers and also partly civic
i.e., to develop among them a sense of responsibility an dignity and thus make them worthy
citizens of the nation.

To fulfill the future needs and aspirations of Labour

To secure the labour proper human conditions of work and living

Working conditions of organization may be led by an artificial environment which features are
dust, fumes, noise, unhealthy temperature, etc. It is generally found that these conditions impose
strain on the body. The welfare activities are done to minimize the hazardous effect on the life of
the workers and their family members. It is the duty of the employer to see these human needs.

To add in a real way to the low earning of the labour

The facilities are provided to supplement the income of the workers by services such as housing,
medical assistance, school, co-operative, canteens, stores, play grounds etc.

39
Thus, the objective of activities are to promote greater efficiency of the workers, assure proper
human conditions to the workers and their family members, supplement their wages in monetary
teams, give more real wages and foster better industrial relations.

PRINCIPLES FOR SUCCESSFUL IMPLEMENTATION OF WELFARE ACTIVITIES

The success of welfare activities depends on the approach which has been taken into account in
providing such activities to the employees. Welfare policy should be guided by idealistic morale
and human value. Every effort should be made to give workers/ employees some voice in the
choice of welfare activities so long as it does not amount to dictation from workers.

Labour welfare is dependent on certain basic principles. The following are the principles on
which successful implementation of welfare programmes depends.

 Principles of adequacy of wages

 Principles of social responsibility of Industry
 Principles Efficiency
 Principles of personalization
 Principles of co-ordination and integration
 Principles of association
 Principles of responsibility
 Principles of accountability
 Principles of timeliness
 Principles of self-help

Adequacy of Wages: Labour welfare measures cannot be a substitute for wages. Workers have a
right to adequate wages. But high wage rates alone cannot create healthy atmosphere, nor bring
about a sense of commitment on the part of workers. A combination of social welfare, emotional
welfare and economic welfare together would achieve good results.

40
Social Liability of Industry: Industry, according to this principle, has an obligation or duty
towards its employees to look after their welfare. The constitution of India also emphasizes this
aspect of labour welfare.

Impact on Efficiency: This plays an important role in welfare services, and is based on the
relationship between welfare and efficiency, though it is difficult to measure this relationship.
Programmes for housing, education and training, the provision of balanced diet and family
planning measures are some of the important programmes of labour welfare which increases the
efficiency of the workers, especially in underdeveloped or developing countries.
Increase in Personality: The development of the human personality is given here as the goal of
industrial welfare which, according to this principle, should counteract the baneful effects of the
industrial system. Therefore, it is necessary to implement labour welfare services. Both inside
and outside the factory, that is, provide intra-mural and extra-mural labour welfare services.

Totality of Welfare: This emphasizes that the concept of labour welfare must spread throughout
the hierarchy of an organization. Employees at all levels must accept this total concept of labour
welfare programme will never really get off the ground.

Co-ordination or Integration: This plays an important role in the success of welfare services.
From this angle, a co-ordinated approach will promote a healthy development of the worker in
his work, home and community. This is essential for the sake of harmony and continuity in
labour welfare services.

Democratic Values: The co-operation of the worker is the basis of this principle. Consultation
with, and the agreement of workers in, the formulation and implementation of labour welfare
services are very necessary for their success. This principle is based on the assumption that the
worker is "a mature and rational individual." Industrial democracy is the driving force here.
Workers also develop a sense of pride when they are made to feel that labour welfare
programmes are created by them and for them.

41
Responsibility: This recognizes the fact that both employers and workers are responsible for
labour welfare. Trade unions, too, are involved in these programmes in healthy manner, for
basically labour welfare belongs to the domain of trade union activity. Further, when
responsibility is shared by different groups, labour welfare work becomes simpler and easier.

Accountability: This may also be called the Principle of Evaluation. Here, one responsible
person gives an assessment or evaluation of existing welfare services on a periodical basis to a
higher authority. This is very necessary, for then one can judge and analyze the success of labour
welfare programmes.
Timely: The timeliness of any service helps in its success. To identify the labour problem and to
discover what kind of help is necessary to solve it and when to provide this help are all very
necessary in planning labour welfare programmes. Timely action in the proper direction is
essential in any kind of social work.

SCOPE OF LABOUR WELFARE ACTIVITIES

Labour welfare Activities is combinations of various steps, the cumulative effect of which is to
grease the wheels of industry and society. Sound industrial relations can only be based on human
relations and good human relations dictate that labour being, human being should be treated
humanly which includes respect for labour dignity, fair dealing and concern for the human
beings physical and social needs. In any industry good relations between the management and
workers depend upon the degree of mutual confidence, which can be established. This, in turn,
depends upon the recognition by the labour of the goodwill and integrity of the organization in
the day to day handling of questions which are of mutual concern.

The basic needs of a labour are freedom from fear, security of employment and freedom from
want. Adequate food, better health, clothing and housing are human requirements. The human
heart harbors secret pride and invariably responds to courtesy and kindness just as it revolts to
tyranny and fear.
An environment where he is contended with his job, assured of a bright future and provided with
his basic needs in life means an atmosphere of good working condition and satisfaction to labour.

42
Labour welfare activities are based on the plea that higher productivity requires more than
modern machinery and hard work. It requires co-operative endeavor of the parties, labour and
management. This is possible only when labour is given due importance and human element is
taken into account at every stage. The worker has a fund of knowledge and experience at his job.
If rightly directed and fully used, it would make a great contribution to the prosperity of the
organization. This can only be achieved through satisfaction of the labour as the worker feels that
he is an active participant in the production process, and he does at most for increasing the
production and its productivity.

THEORIES OF LABOUR WELFARE

The form of labor welfare activities is flexible, elastic and differs from time to time, region to
region, industry to industry and country to country depending upon the value system, level of
education, social customs, and degree of industrialization and general standard of the socio-
economic development of the nation. Seven theories constituting the conceptual frame work of
labour welfare activities are the following:-

1. The Police Theory: This is based on the contention that a minimum standard of welfare
is necessary for laborers. Here the assumption is that without policing, that is, without
compulsion, employers do not provide even the minimum facilities for workers.
Apparently, this theory assumes that man is selfish and self centered and always tries to
achieve his ends, even at the cost of the welfare of others. According to this theory,
owners and managers of industrial undertakings get many opportunities for exploitation
of labour. Hence, the state has to intervene to provide minimum standard of welfare to
the working class.

2. The Religious Theory: This is based on the concept that man is essentially "a religious
animal." Even today, many acts of man are related to religious sentiments and beliefs.
These religious feelings sometimes prompt an employer to take up welfare activities in
the expectation of future emancipation either in this life or after it.

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3. The Philanthropic Theory: This theory is based on man's love for mankind.
Philanthropy means "Loving mankind." Man is believed to have an instinctive urge by
which he strives to remove the suffering of others and promote their well-being. In fact,
the labour welfare movement began in the early years of the industrial revolution with the
support of philanthropists.
4. The Trusteeship Theory: This is also called the Paternalistic Theory of Labour Welfare.
According to this the industrialist or employer holds the total industrial estate, properties,
and profits accruing from them in a trust. In other words, the employer should hold the
industrial assets for himself, for the benefit of his workers, and also for society. The main
emphasis of this theory is that employers should provide funds on an ongoing basis for
the well-being of their employees.

5. The Placating Theory: This theory is based on the fact that the labour groups are
becoming demanding and militant and are more conscious of their rights and privileges
than ever before. Their demand for higher wages and better standards of living cannot be
ignored. According to this theory, timely and periodical acts of labour welfare can
appease the workers. They are some kind of pacifiers which come with a friendly gesture.

6. The Public Relation Theory: This theory provides the basis for an atmosphere of
goodwill between labour and management, and also between management and the public,
labour welfare programmes under this theory, work as a sort of an advertisement and help
an organization to project its good image and build up and promote good and healthy
public relations.

7. The Functional Theory: This is also called the Efficiency Theory. Here, welfare work is
used as a means to secure, preserve and develop the efficiency and productivity of labour,
It is obvious that if an employer takes good care of his workers, they will tend to become
more efficient and will thereby step up production. This theory is a reflection of
contemporary support for labour welfare. It can work well if both the parties have an

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 identical aim in view; that is, higher production through better welfare. And this will
encourage labour's participation in welfare programmes.

UNIT - 5
Types of Welfare Activities:
 Welfare Measures in-side the work place.
 Welfare Measures out-side the work place.
Welfare Measure in-side the work place
 Conditions of the work environment
 Work place safety and cleanliness
 Housekeeping- compound wall, labour, garden etc
 Workshop sanitation and cleanliness
 Distribution of works and provision for rest hours, meal times and breaks
 Supply of necessary beverages and pills and tastes i.e., salt taste, milk, soda.
Convenience:
 Urinals and laboratories, wash basins, bathrooms, provision for spittoons, waste disposal.
 Provision of drinking water, water coolers.
 Canteen services, full meals and mobile canteen.
 Maintenance of workers clock rooms, resting rooms and library.
 Workers health services

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  Ambulance, emergency aid, medical examination for workers, education, should be
provided at the work spot Women find Child Welfare Crèche and child care, separate
services for women workers i.e., lunch rooms, urinals, rest rooms.

Welfare Measure out-side the work place:

 Housing
 Water, Sanitation and Waste disposal.
 Roads, Lighting, Recreational clubs, Parks and Play grounds.
 Transport (work spot to work place).
 Communication: Post, Telegraph, Telephone and Internet.
 Watch and Ward security.
 Recreational facilities.
 Child, youth and workers club etc.

Classification of Welfare Activities

Statutory:
The welfare norms to be fulfilled compulsory by employer as prescribed by legal norms and
legislations
 Sanitary and hygiene facilities
 Rest rooms
 Medical facilities
 Crèches
 Housing
 Family planning
 Drinking water

Non-Statutory
The welfare measures provided by employer in order to maintain good human touch or pressure
by unions or due to his concern to workers or to avoid takes for due to many more reasons there
are voluntary in the aspect of employer.

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 Transport facilities
 Educational facilities
 Saving facilities
 Co-operative and credit societies
 Distress relief and cash benefits

Mural
These activities are performed due to the collaborate understanding between employer and
employees. They may mural to organize such welfare programs second type of classification on
the place activity is executed. In this we have:

Intra-mural activities:
It consists of such welfare schemes provided within the factories such as
 medical facilities,
 compensation for accidents,
 provision of crèches and canteens,
 supply of drinking water,
 washing and bathing facilities,
 provision on safety measures such as fencing and covering of machines,
 good layout of the machinery and plant sufficient lighting,
 first aid appliances,
 fire extinguishers activities relating to improving conditions of employment recruitment
and discipline and
 Provision of provident fund, pension and gratuity, maternity benefits etc.

Extra-mural activities:

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Activities cover the services and facilities provided outside the factory such as,
 housing accommodation,
 indoor and outdoor recreation facilities for adults and children,
 Provision of libraries and reading rooms.

Labor welfare: Legal Side

Article: 41
The state shall within the limit of its economic capacity and Development make effective
provisions for security the Right to work to Education and to public assistance in case of
unemployment wage sickness and disablement and in other case of unadorned want.

Article: 42
The state shall make provision for security the just and unmake Condition of work and for
maternity relief.

Article: 43
The state shall endeavor to secure by suitable legislation or Economic organization or in any way
to all workers agricultural, industries or otherwise work wage conditions of work ensuing a
decent standard of Life and full enjoyment of leisure and social and cultural opportunities and in
particular the state still endeavor to promote college industry.

The Factories Act, 1948:

Every factory shall provide adequate and suitable facilities for: -

 Washing and drying of wet clothes and storing of clothes not worn during working hours.
 Sitting arrangement for employees who are required to work in standing position in order
that may take short rests in the course of their work.
 First-aid boxes or cup-boards equipped with the prescribed contents - at least one for
every 150 workers.

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  Ambulance rooms-for 500 or more workers. The ambulance room shall be of prescribed
size, having equipments and medical and nursing staff as prescribed which shall be made
readily available during all working hours.
 A canteen for 250 or more workers. The canteen shall be suitably located and sufficiently
lighted and ventilated. It shall be of the prescribed size, equipped, with necessary
furniture, utensils etc., and operated on non-profit basis.
 Rest rooms or shelters and lunch rooms with provision for drinking water - 150 or more
workers are there.
 Crèches - if 30 or more women workers are employed Crèches shall be sufficiently
lighted and ventilated and maintained in a clean and sanitary condition under the charge
of women trained in child and infant care. Provision for wash room and supply of milk
and refreshment for children and facilities for feeding of children at necessary intervals
by their mother shall be made as per rules by State Government.

 It 500 or more workers are there then a Welfare Officer shall be employed. The scale of
standards paternity to various welfare facilities are laid down by the state Government.

Non Statutory Schemes

Many non statutory welfare schemes may include the following schemes:
1. Personal Health Care (Regular medical check-ups): Some of the companies provide the
facility for extensive health check-up
2. Flexi-time: The main objective of the flextime policy is to provide opportunity to employees
to work with flexible working schedules. Flexible work schedules are initiated by employees and
approved by management to meet business commitments while supporting employee personal
life needs
3. Employee Assistance Programs: Various assistant programs are arranged like external
counseling service so that employees or members of their immediate family can get counseling
on various matters.
4. Harassment Policy: To protect an employee from harassments of any kind, guidelines are
provided for proper action and also for protecting the aggrieved employee.

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5. Maternity & Adoption Leave: Employees can avail maternity or adoption leaves. Paternity
leave policies have also been introduced by various companies.
6. Medi-claim Insurance Scheme: This insurance scheme provides adequate insurance coverage
of employees for expenses related to hospitalization due to illness, disease or injury or
pregnancy.
7. Employee Referral Scheme: In several companies employee referral scheme is implemented to
encourage employees to refer friends and relatives for employment in the organization.

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