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Industrial Relations A Step Towards Industrial Peace

Presented By -

Dr. Arvind A. Dhond

Associate Professor, St. Xaviers College, Mumbai

Industrial Disputes Act 1947 defines an industry as any systematic activity carried on by co-operation between an employer and his workmen for the production, supply or distribution of goods or services with a view to satisfy human wants or wishes whether or not any capital has been invested for the purpose of carrying on such activity; or such activity is carried on with a motive to make any gain or profit. Thus, an industry is a whole gamut of activities that are carried on by an employer with the help of his employees and labours for production and distribution of goods to earn profits.

An employer can be defined from different perspectives as: a person or business that pays a wage or fixed payment to other person(s) in exchange for the services of such persons. a person who directly engages a worker/employee in employment. any person who employs, whether directly or through another person or agency, one or more employees in any scheduled employment in respect of which minimum rates of wages have been fixed.

As per Industrial Disputes Act 1947 an employer means: in relation to an industry carried on by or under the authority of any department of [the Central Government or a State Government], the authority prescribed in this behalf, or where no authority is prescribed, the head of the department; in relation to an industry carried on by or on behalf of a local authority, the chief executive officer of that authority.

Employee is a person who is hired by another person or business for a wage or fixed payment in exchange for personal services and who does not provide the services as part of an independent business. An employee is any individual employed by an employer. A person who works for a public or private employer and receives remuneration in wages or salary by his employer while working on a commission basis, piece-rates or time rate.

Employee, as per Employee State Insurance Act 1948, is . . any person employed for wages in or in connection with work of a factory or establishment to which the act applies.

The state of being employed or having a job.

Industrial Relation System

An industrial relations system consists of the whole gamut of relationships between employees and employees and employers which are managed by the means of conflict and cooperation.

Actors in the IR system:

Three main parties are directly involved in industrial relations: 1. Employers 2. Employees 3. Government

Role of Employers:
Employers possess certain rights vis--vis labors. They have the right to hire and fire them. Management can also affect workers interests by exercising their right to relocate, close or merge the factory or to introduce technological changes.

Role of Employees:
Workers seek to improve the terms and conditions of their employment. Workers exchange views with management and voice their grievances. Workers also want to share decision making powers of management. Workers generally unite to form unions against the management and get support from these unions.

Role of Government:
The central and state government influences and regulates industrial relations through laws, rules, agreements, awards of court and the like. It also includes third parties and labour and tribunal courts.


SCOPE of Industrial Relations:

1. The relationship that emerges out of the day to day association of the management and the labor. 2. Quality control 3. Marketing 4. Price fixation 5. Disposition of profits among others.

Main Issues involved in Industrial Relations:

1. Collective bargaining 2. Machinery for settlement of industrial disputes 3. Standing orders 4. Workers participation in management 5. Unfair labour practices

Importance / Significance of Industrial Relations:

1. 2. 3. 4. 5. 6. 7. Uninterrupted production Reduction in Industrial Disputes High morale Mental Revolution Reduced Wastage Industrial Peace Industrial Democracy

Main Objectives of Industrial Relations:

(1) To safeguard the interest of labor and management by securing the highest level of mutual understanding and good-will among all those sections in the industry which participate in the process of production. (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. (3) To raise productivity to a higher level in an era of full employment by lessening the tendency of high turnover and frequent absenteeism.

Main Objectives of Industrial Relations:

(4) To establish and promote the growth of an industrial democracy based on labour partnership in the sharing of profits and of managerial decisions, so that individuals personality may grow its full stature for the benefit of the industry and of the country as well. (5) To eliminate or minimize the number of strikes, lockouts and gheraos by providing reasonable wages, improved living and working conditions, and fringe benefits.

Main Objectives of Industrial Relations:

(6) To improve the economic conditions of workers in the existing state of industrial managements and political government. (7) Socialization of industries by making the state itself a major employer. (8) Vesting of a proprietary interest of the workers in the industries in which they are employed.

Trade Unionism 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:
1. The First Phase (1850 to 1900) 2. The Second Phase (1900 to 1946) 3. Third Phase began with the emergence of independent India (in 1947)

The First Phase (1850 to 1900)

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.

The First Phase (1850 to 1900)

In order to regulate the working hours and other 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.

The First Phase (1850 to 1900)

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.

The Second Phase (1900 to 1946)

These unions federated into industrial union known as Textile Labour 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 N Joshi that became operative from 1927. During 1928, All India Trade Union Federation (AITUF) was formed.

Third Phase began with the emergence of independent India (in 1947)
1. 2. 3. 4. 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: The All India Trade Union Congress, The Indian National Trade Union Congress, The Hindu Mazdoor Sangh, and The United Trade Union Congress

Third Phase began with the emergence of independent India (in 1947)
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. 27

Trade Unions in India

The Indian workforce consists of 430 million workers, growing 2% annually. The Indian labor markets consist of three sectors: 1. The rural workers, who constitute about 60 per cent of the workforce. 2. Organized sector, which employs 8 per cent of workforce, and 3. 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 12 Central Trade Union Organizations in India:

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. All India Trade Union Congress (AITUC) Bharatiya Mazdoor Sangh (BMS) Centre of Indian Trade Unions (CITU) Hind Mazdoor Kisan Panchayat (HMKP) Hind Mazdoor Sabha (HMS) Indian Federation of Free Trade Unions (IFFTU) Indian National Trade Union Congress (INTUC) National Front of Indian Trade Unions (NFITU) National Labor Organization (NLO) Trade Unions Co-ordination Centre (TUCC) United Trade Union Congress (UTUC) and United Trade Union Congress - Lenin Sarani (UTUC - LS)



Collective Bargaining
The term "collective bargaining" was first used in 1891 by economic theorist Sidney Webb. It is called collective because both the employer & the employee act as a group rather than as individuals. It is known as bargaining because the method of reaching an agreement involves proposals & counter proposals, offers & counter offers & other negotiations.

Definition of Collective Bargaining

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. 32

Meaning of Collective Bargaining

Collective bargaining consists of the process of voluntary negotiation between representatives of a employees union and employers (generally represented by management, in some countries by an employers' organization) aimed at reaching agreements that regulate working conditions.

The parties often refer to the result of the negotiation as a Collective Bargaining Agreement (CBA) or Collective Employment Agreement (CEA).

Collective Bargaining Agreements usually set out

1. 2. 3. 4. 5. 6. 7.

Wage scales, Working hours, Training, Health and safety, Overtime, Grievance mechanisms and Rights to participate in workplace or company affairs. 8. Working conditions 9. Rights and responsibilities of trade unions.

Recognized Through International Human Rights Conventions

Article 23 of the Universal Declaration of Human Rights identifies the ability to organize trade unions as a fundamental human right. Item 2(a) of the International Labour Organization's Declaration on Fundamental Principles and Rights at Work defines the "freedom of association and the effective recognition of the right to collective bargaining" as an essential right of workers.

Features of Collective Bargaining

1. Collective bargaining is specifically an industrial relations mechanism or tool, & is an aspect of negotiation, applicable to the employment relationship. Collective bargaining is process of joint decision making & represents a democratic way of life in industry. Collective bargaining is the process of negotiation between firms & workers representatives for the purpose of establishing mutually agreeable conditions of employment. Collective bargaining is a technique adopted by two parties to reach an understanding acceptable to both through the process of discussion & negotiation. Used to restore the unequal bargaining position between employer & employee.

2. 3.




Benefits of Collective Bargaining

1. Enhances the human dignity 2. Liberty and autonomy of workers 3. Giving them the opportunity to influence the establishment of workplace rules 4. Gain some control over a major aspect of their lives, namely their work 5. workplace democracy 6. ensure the rule of law in the workplace 7. Workers gain a voice to influence the establishment of rules that control a major aspect of their lives.


Thus Collective Bargaining:

1. is a collective process in which representatives of both the management and employees participate. 2. is a continuous process which aims at establishing stable relationships between the parties involved. 3. not only involves the bargaining agreement, but also involves the implementation of such an agreement.


Thus Collective Bargaining: (contd)

4. Attempts in achieving discipline in the industry is a flexible approach, as the parties involved have to adopt a flexible attitude towards negotiations.
5. The union always has a collective interest since the negotiations are for the benefit of several employees.

Employer - Trade Union - Government

Process is bipartite, but in some developing countries the State plays a role in the form of a conciliator where disagreements occur, or where collective bargaining impinges on government policy. Governments intervene when necessary in collective bargaining because the negotiations are of interest to those beyond the parties themselves.

Normal Commercial Negotiations

In the employment relationship the employer is, in a sense, a buyer of services and the employee the seller. Buyer may be in a stronger position as he could take his business elsewhere.

Industrial Relations A Step Towards Industrial Peace

Presented By -

Dr. Arvind A. Dhond

Associate Professor, St. Xaviers College, Mumbai

For your valuable time & patient listening.
With this I sign out