Unit 4 & 5

Industrial Relation & WPM

IR in India
Challenges faced by IR
1)Rapid technology change
2)Use of internet, e- commerce
3)Higher productivity
4)Low union activity
5)Decentralised collective bargaining

ILO
ILO is the UN specialized agency for promotion of social
justice and recognition of human and labour rights
Established in April 1919 with its headquarters at
Geneva.
the International Labour Organization has a tripartite
governing structure representing governments,
employers and workers (usually with a ratio of
2:1:1).The rationale behind the tripartite structure is
creation of free and open debate among governments
and social partners.
The ILO secretariat (staff) is referred to as the
International Labour Office
Present director-general is Guy Ryder
As of 2012, 185 countries in the UN are members of the
ILO

Functions of ILO
1. Promotion of social justice and human
rights
2. Formulates labour standards
3. Sets minimum standards of basic labour
rights like:
1.freedom of association,
2.right to organize,
3. collective bargaining,
4.abolition of forced labour
5. abolition of child labour

4. Provides technical assistance in:

1. vocational training and rehabilitation
2. employment policy
3. labour administration
4.labour law and IR
5. working conditions
6. Management development
7.cooperatives
8.social security
9.labour statistics and occupational safety and health
5. Promotes development of independent workers organisation
6.Provides training and advisory services to unions
7. assistance to member-states in solving social and labour
problems
8. research and publication of works on social and labour issues

Structure of ILO
ILO work through three main bodies
1.ILC- International Labour conference- The Member
states of the ILO meet the international Labour
conference in June every year, in Geneva. Each Member
state is represented by two government delegates, an
employer delegate and worker delegate. Cabinet
minister of labour dept will head the delegations. Also
known as the parliament of Labour
Functions1) ILC establishes and adopts international labour
standards
2)It acts as a forum where social and labour questions of
importance to the entire world are discussed
3) The conference adopts the budget of the organisation
4) It elects the governing body

2.Governing body - this is the executive body

of the ILO;
. Meets three times a year in March, June and
November in Geneva.
Functions1.Decides the agenda of the International Labour
Conference
2. Adopts the draft programme and budget of the
organization for submission to the conference
3. Elects the Director-General
4. It takes decisions on ILO policy

 It is composed of 56 titular members (28

Governments, 14 Employers and 14 Workers)
and 66 deputy members (28 Governments,
19 Employers and 19 Workers). Ten of the
titular government seats are permanently
held by States of chief industrial importance
(Brazil, China, France, Germany, India, Italy,
Japan, the Russian Federation, the United
Kingdom and the United States). The other
Government members are elected by the
Conference every three years .

 3. International Labour Office

This is the permanent secretariat of
the ILO and focal point for the overall
activities that it prepares under the
scrutiny of the governing body under
the leadership of Director General

Committee in governing
body
1. Committee on freedom of association(CFA)2. Programme, Financial and Administrative
committee(PFA)3. Committee on legal issues and International
labour standards(LILS)
4.Subcommittee on Multinational Enterprises(MNE)
5.Committee on Employment and social policy(ESP)
6.Committee on sectoral and technical meetings
and related issues(STM)
7.Committee on technical cooperation(TC)
8.Working party on the Social dimension of
globalisation(WP/SDG)

Trade union movement in

India
The first organised Trade Union in India
named as the Madras Labour Union was
formed in the year 1918. Since then a
large number of unions sprang up in
almost all the industrial centres of the
country. Similarly, entrepreneurs also
formed their organisations to protect their
interests. In 1926, the Trade Unions Act
was passed by the Indian Government.
The Act gave legal status to the
Registered Trade Unions.

Definition
Section 2(h) of the Trade Unions Act 1926
defines Trade Union as a combination,
temporary or permanent, formed primarily
for the purpose ofregulating the relations
between workmen and employer,
workmen and workmen, or employers and
employers, or for imposing restrictive
condition on the conduct of any trade or
business, and includes the federation of
two or more trade unions

Registration
there must be at least 10% or 100,
whichever is less, members who are
engaged or employed in the
establishment or industry to which it
is connected. there must not be less
than seven memberswho are
engaged or employed in the
establishment or industry to which it
is connected.

Membership
The minimum age limit for
membership of a Trade Union is 15
years unless the rules of a particular
trade union provide for higher age
limit.
However for being an office bearer
the person has to be above 18 years
of age.

Objectives of Trade union

Representation
Negotiation
Voice in decisions affecting
workers
Member services
(a)Education and training
(b)Legal assistance
(c)Financial discounts
(d)Welfare benefits

Functions of Trade unions

(i) Militant functions
(a) To achieve higher wages and better
working conditions
(b) To raise the status of workers as a
part of industry
(c) To protect labors against
victimization and injustice

(ii) Fraternal functions

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

Importance Of Trade Unions

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.

Contd.
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

Trade Unionism In India

Indian trade union movement can be
divided into three phases.
* The first phase (1850 to1900)
* The second phase (1900 to
1946)
* The third phase (in 1947).

By 1949, four central trade union

organizations were functioning in the
country:
The All India Trade Union Congress-1920
The Indian National Trade Union
Congress-3/5/1947
The Hindu Mazdoor Sangh-1948, and
The United Trade Union Congress -1949
CITU - 1970

Industrial Dispute Act

Came in to existence in April 1947

Definition
The industrial dispute means any dispute or difference between:(i) Employers and employers
(ii)Employers and Workmen or
(iii)Workmen and workmen, which is connected with

wages, working conditions, other employment matters or

union recognition.

Objective of ID Act
Promotion of measures of securing,
preserving Industrial harmony
Settlement of disputes between

Employer Workman
Employer - Employer
Workman - Workman

Rights of Registered Trade Union

Prevention of illegal- Strike; Lockout
Promotion of collective bargaining

INDUSTRIAL DISPUTE RESOLUTION MECHANISM(Section 10 of ID Act)

Industrial
Dispute

Conciliation officer(14 days)/

Collective Bargaining
Board(30 days)
Arbitration(30 days)

Adjudication(30days)

CG/State Govt.
Labour
Court- second
schedule

National
Tribunal
(national importance)

AWARD

2nd

Industrial
Tribunal
or 3rd schedule
25

Industrial dispute act

SCH2. THE SECOND SCHEDULE
Matters within the jurisdiction of Labour Courts
1. The propriety or legality of an order passed by an
employer under the standing orders;
2. The application and interpretation of standing
order;
3. Discharge or dismissal of workmen including
reinstatement of, or grant of relief to, workmen
wrongfully dismissed;
4. Withdrawal of any customary concession or
privilege;
5. Illegality or otherwise of a strike or lock-out; and
6. All matters other than those specified in the Third
Schedule.

SCH3. THE THIRD SCHEDULE

Matters within the jurisdiction of Industrial Tribunals
1. Wages, including the period and mode of payment;
2. Compensatory and other allowances;
3. Hours of work and rest intervals;
4. Leave with wages and holidays;
5. Bonus, profit sharing, provident fund and gratuity;
6. Shift working otherwise than in accordance with standing
orders;
7. Classification by grades;
8. Rules of discipline;
9. Rationalisation;
10. Retrenchment of workmen and closure of establishment;
and
11. Any other matter that may be prescribed.

New amendments of ID act

w.e.f 2010 wages ceiling has raised to Rs
10000/Retrenchment w/o permission no of
workers increased to 1000 from 100
Separation compensation increased to 45
days for every completed years of service
45 days of strike notice in Special economic
zone

Collective Bargaining
It is a process through which employees
and management negotiate over
terms and conditions of work like,
wages, working hours, etc.
The result of collective bargaining
procedure is called the Collective
Bargaining Agreement (CBA).
Collective bargaining is governed by
Laws, Regulations and judicial
decisions

 The outcome of collective bargaining

is determined by:
Information exchange
Mutual trust
The bargaining power

Distributive bargaining
This is a bargaining situation of union
and employer conflict. This
represents a WIN-LOSE situation,
where on side may win. If both sides
are unwilling to settle then the
situation will change to LOSE-LOSE

Integrative bargaining
Here both the parties jointly search
for a solution to the problems and
secure the best possible agreement.
This situation is called WIN-WIN.

Intra-organizational
bargaining:
It generally aims at resolving internal
conflicts. This is a type of maneuvering to
achieve consensus with the workers and
management. Even within the union, there
may be differences between groups. For
example, skilled workers may feel that
they are neglected or women workers may
feel that their interests are not looked
after properly. Within the management
also, there may be differences. Trade
unions maneuver to achieve consensus
among the conflicting groups

Mediation
This is the process of arriving at a
solution for a dispute with the help of
a neutral third party namely
mediator. Here mediator plays the
role of a facilitator. He has no
decision making power.

Conciliation
This is the process by which
representatives of management and
union are brought together before a
third party or a board with the view to
arrive at an agreement over a
dispute.
Conciliation officer has to give the
report with in 14 days and the board
with in 30 days.

Arbitration
When conciliation fails to settle the dispute, parties can go for
arbitration.
It is commonly viewed as less expensive and faster than
resolving a dispute in court.
An arbitrator may be a single person or a panel.
Arbitration is the procedure in which a third neutral party
studies the dispute and listens to both parties and collects
information and makes recommendation which are binding on
both the parties.

Binding and Non binding

Arbitration
Binding- the parties agree in advance that
the decision(award) of the neutral
arbitrator is final.
The parties can seek judicial help if the
arbitrator exceeds the limit already agreed
or in case of any mistake.
Non binding(advisory arbitration)- here the
award is not final or binding but only to
provide guidance to the parties to settle a
dispute.

Mandatory and voluntary

arbitration
Mandatory- to enter in to agreement to
which parties have agreed in
advance, similar to binding
Voluntary arbitration submitted to an
arbitrator by agreement of the
parties. this is based on mutual
agreement.

Adjudication
When the dispute not settled by
above methods the parties can go for
settlement by Adjudication
This is a compulsory method
Adjudication is done in
1)Labour Court
2)Industrial tribunal
3)National tribunal

Qualities of a good
negotiator

Director of table tactics

Maintaining equality with management
Private meeting
Initial sparring
The art of timing
Caucus
The other guys tactics
Trust in negotiations
Stating the unions demand

Workers Participation in
management
The concept of WPM is considered as
a mechanism where workers have a
say in the decision making process of
an enterprise formally.

Forms of WPM
Works Committee-Works committee are set
up in establishments employing 100 or
more persons with equal number of
representatives of workers and
management for settling any differences of
opinion in matters of common interest.
Joint management council(JMC)- JMC are
set up in establishments employing 500 or
more persons. JMC have more power than
works committee.
Suggestion schemes
Quality circle

Elements for effective worker

participation in decision
making

1. workers have access to and sharing

of management level information
2. protection from reprisal for workers
who voice criticism of management.
3. Appeals process to settle disputes
between labour and management
4. Set of beliefs that reinforce worker
participation
5. Gain sharing- Economic return above
workers salary.

Pre conditions for union

participation
Any decision making relating to employee
involvement must have union input
Union representation on all committees
Program has top management support
Written guarantee that program will not
lead to layoffs
No speed up
Balance between union and management
goals
Part of increased savings goes back to the
workers

Goals of management and

union in WP in decision making
Management goals
1.Higher productivity
2.Better quality and consistency
3.Cost savings
Union goals
1.Include management costs in cost savings efforts
2.Union influence all levels of the enterprise
3.Traditional goals such as building a stronger union
4.Union control over shop floor component program

Current and future trends in

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

Technology advancement
Virtual work place
Flexi timings
Globalisation- MNCs
Multiple career
Workforce diversity
Time management

HR Management

Industrial Relations

Only 2 imp. Parties employee and Relationship between workforce

employer
Objectives, policies, procedure
and programs of human resources
and implement them
Individual employee contacts

with the immediate superior.

Grievance and disciplinary
procedures are resorted to, to solve
the employee-employer conflicts.
Reformulates the objectives,
policies etc ,based on industrial
conflicts which are the outcome of
unsound industrial relations.
HRM is the overall management
of all resources including workers,
staff, executives, Top management
and even suppliers and customers.
MH

& management
The implementation of HRM
policies results in IR.
There are four important parties
namely employees, employer, trade
unions and government
Employees contact even the top
management as a group.
Collective bargaining and forms of
industrial conflicts are resorted to
solve the problems
The sound IR contributes to the
organizational goals. The unsound
IR result in industrial conflicts
demanding for change and
reformulation of HRM objectives
and goals
IR concentrates mainly on
relationship of union and
management
48

Practical criteria of Best Practice for Competitive Advantage

It summarizes a practical criterion that is seen to be important to

create a competitive advantage:

Goals/objectives
This contains a detailed statement of the general goals and their
relationship to the companys objectives. When the project goals are
not clear, it is difficult to initiate/formulate the planning efficiently.
The lack of planning contributes directly to unrealistic resource
allocations and schedules. Notably the key personnel should be
actively involved in defining the specific work to be performed, the
timing, the resources, the responsibilities, and positive participation
in the pursuit of the goal /objectives.

Recruitment
The argument is how the management can recruit the right
employees.
Most of management uses a detailed job analysis and job
description and some of them use one of the selection models to
insure they are employing the right employees.

 Commitment

Commitment is defined by Kline & Peters as a process by

which people become psychologically bound to their action
in such a way that feel a personal obligation to follow
through on the implications of those actions. Obtain
commitment from all key personnel regarding the problem
plan, its measures and results. This commitment can be
enhanced and maintained by high participation of employees
in definition of results, measuring criteria and schedules. It is
through this involvement that the employee gain a detailed
understanding of the work to be performed, a feeling of
importance, develops professional interests in the work and
desires to succeed, and eventually makes a firm commitment
toward the specific task and the overall project objectives.

Tracking/coaching
Define and implement a proper tracking/coaching system
which captures and processes work performance data
conveniently summarised for reviews and management
actions.

 Measurability
Assure accurate measurements of
performance data, especially technical
progress against schedule and budget.

Signing - On
The process of signing on employees during
the initial phases of the job or each task
seems to be very important to a proper
understanding of the task objectives, the
specific task and personal commitment.

Interesting Work
The managers should try to accommodate the professional interests and desires of
supporting employees when negotiating their tasks. The effectiveness of the work
depends on the managers ability to provide professionally stimulating and
interesting work. This leads to increase involvement, better communications, lower
conflict, and stronger commitment.

Communication
Good communication is essential for effective work. It is the responsibility of the task
leaders and ultimately the manager to provide the appropriate communication tools,
techniques, and systems. These tools are not the status meeting, reviews, schedules,
and reporting systems, but also the objective statements, specifications.

Minimize Threats
Managers must foster a work environment that is low on personal conflict, power
struggles, surprises, and unrealistic demands. An atmosphere of mutual trust is
necessary for the personnel to communicate problems and concerns candidly and at
an early point in time.

Design a Personal Appraisal and Reward System

This should be consistent with the responsibilities of the employee and implies
treating employees with respect, rewarding them fairly or even generously and,
perhaps, seeking to elicit responsibility and trust.