1

The term industrial relation means A relationship

between management and employees or among
employees and their organizations, that characterize
and grow out of employment.

GOVERNMENT RULES, AWARDS, POLICIES

EMPLOYE
R

EMPLOYEE
S
INDUSTRIAL
RELATIONS

EMPLOYERS
ASSOCIATION
S

TRADE
UNIONS

Usages, customers, traditions within a country

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OBJECTIVES OF
INDUSTRIAL RELATIONS

To enhance the economic status of the worker

To regulate the production by minimizing industrial
conflicts through state control
To socialize industries by making the government an
employer
To provide an opportunity to the workers to have a say in
the management and decision making

To improve workers strength with a view to

solve their problems through mutual
negotiations and consultation with the
management.
To encourage and develop trade unions in
order to improve the workers collective
strength
To avoid industrial conflicts and their
consequences and
To extend and maintain industrial
democracy.

Define Industry

Industry means any business, trade,

undertaking, manufacture or calling,
service, employment, handicraft or
industrial occupation or a vocation of
workman

Any systematic activity carried on by cooperation between an employer and his

workmen (whether such workmen are employed
by such employer directly or by or through any
agency, including a contractor) for the
production, supply or distribution of goods or
services with a view to satisfy human wants or
wishes (not being wants or wishes which are
merely spiritual or religious in nature), whether
or not, - (i) any capital has been invested for the
purpose of carrying on such activity; or
(ii) such activity is carried on with a motive to
make any gain or profit, and includes 8

(a) any activity of the Dock Labour Board

established under section 5A of the Dock
Workers (Regulation of Employment) Act, 1948
(9 of 1949);

(b) any activity relating to the promotion of

sales or business or both carried on by an
establishment, but does not include - (1) any
agricultural operation except where such
agricultural operation is carried on in an
integrated manner with any other activity
(being any such activity as is referred to in the
foregoing provisions of this clause) and such
other activity is the predominant one.
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Sec 2k
Industrial dispute between
1. Employer and Employer
2. Employer and Workman
3. Workman and Workman
The subject matter of the dispute should be
connected with a) Employment or non
employment b) Terms of employment c) or
conditions of labour
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Factors that influence the Industrial Relations

Working Conditions
Wage and Salary
Welfare facilities
Grievance Procedure
Disciplinary matters
Government Policies
Inter union rivalry
Production and Productivity

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Collective Bargaining

Bargaining is the process of cajoling,

debating, discussing and even threatening
so as to arrive at an amicable agreement for
those being represented. Collective is a
procedure by which the terms and
conditions of workers are regulated by
agreements between their bargaining agents
and employers.
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The underlying idea of collective

bargaining is the employer and employee
relations should not be decided unilaterally
or with the intervention of any third party.
Both parties must reconcile their
differences
voluntarily
through
negotiations, yielding some concession and
making sacrifices in the process.

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Objectives

To settle disputes/conflicts relating to wages and

working conditions.
To protect the interests of workers through collective
action.
To resolve the differences between workers and
management through voluntarily negotiations and
arrive at a consensus.
To avoid third party intervention in matters relating
to employment.
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Substance of bargaining

1. Wage and working conditions

2. Work norms
3. Incentive payments
4. Job security
5. Changes in technology
6. Work tools, techniques and practices
7. Staff transfers and promotions
8. Grievances
9. Disciplinary matters
10.Health and safety
11.Insurance and benefits
12.Union recognition
13.Union activities / responsibilities
14.Management rights
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DISCIPLINE

Discipline in an organization is behavior

activity, conduct of a worker or any
employee based on various rules and
regulations framed for the betterment of the
organization from time to time.

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CAUSES FOR INDISCIPLINE & MISCONDUCT

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 an
both sides
Lack of timely redressal of workers grievances
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Unfair management practices.

Defective communication system
Lack of workers education
Un-interesting work
Drunkenness and family problems
Outside political influences
Excessive work pressure
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HOT-STOVE RULE

By
Douglas
McGregor
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It draws
an analogy
between touching a hot
stove and undergoing
discipline.

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When one touches a hot stove

1.

The

burn

is
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2. He had Warning

Particularly if the stove was red

hot he knew what would happen
if he touched it.
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3. The effect is consistent

Every one who touches a

red-hot stove would be
burned.

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4. The effect is impersonal.

A person is burned not because of

who he is but because he touched
the hot stove
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5. The effect is commensurate

with the gravity of misconduct. A
person who repeatedly touches
the hot stove is burnt more than
one who touched it only once.

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Improper behavior
Does this violation warrant
disciplinary action?
Yes
Does this violation warrant
more than an oral warning?
Yes
Does this violation warrant
more than a written warning?
Yes
Does this violation warrant
more than a suspension?
Yes
Domestic Enquiry
Yes
Misconduct Proved

N
o

No Disciplinary action

N
o

Oral Warning

No
Written warning
No
N
o

Suspension order
Second Show Cause

No
Re-insert

Yes
Termination
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DISCIPLINARY ACTION

Though there is no rigid and specific

procedures for taking a disciplinary
action, the disciplinary procedure
followed in Indian industries usually
consists of the following steps.

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 Occurrence of Misconduct
Preliminary enquiry
Preparation of a Show cause Notice
Service of Show-cause notice
Consideration of explanation
Order of Enquiry

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 Holding of a full-fledged enquiry

Issuing a second show cause notice
Explanation of second show-cause notice
Making a final order of punishment
Follow up

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CONSIDERATION OF EXPLANATION

1.On getting the answer for the letter of

charge served, the explanation furnished be
considered and if it is satisfactory, no
disciplinary action need be taken.
2.On the contrary when the management is not
satisfied with the employees explanation
there is a need for serving a show-cause
notice.
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SHOW-CAUSE NOTICE

1. Show cause notice is issued by the manager when he

believes that there is sufficient prima facie evidence
of employees misconduct.
2. However, this gives the employee another chance to
account for his misconduct and rebut the charges
made against him.
3. Enquiry should also be initiated by first serving him a
notice of enquiry indicating clearly the name of the
enquiring officer, time date and place of enquiry, etc.
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HOLDING OF A FULL-FLEDGED ENQUIRY

1.This must be conformity with the

principle of natural justice, that is
the employee concerned must be
given an opportunity, of being
heard.
2.When the process of enquiry is
over and the findings of the same
are recorded, the Enquiry officer
should suggest the nature of
disciplinary action to be taken

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MAKING A FINAL ORDER OF PUNISHMENT

1. Disciplinary action is to be taken

when the misconduct of the
employee is proved. While
deciding the nature of
disciplinary action, the
employees previous record,
precedents, effects of
disciplinary action on other
employees, etc., have to be
considered
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FOLLOW UP

After taking the disciplinary

action, a proper follow up
action has to be taken and the
consequences of the
implementation of disciplinary
action should be noted and
taken care of.

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Principles of Natural Justice and Domestic Enquiry

Before taking disciplinary action

against a worker, the
management must hold a
domestic enquiry, following the
principles of natural justice.
It states that no man should be
held guilty without getting an
opportunity to explain his point of
view.
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To present evidence of his

own choice
To cross examine the
managements evidence
To explain his point of view
without any pressure or fear

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The enquiry must be conducted by

an impartial person who is fully
conversant with the intricacies and
procedures of domestic enquiries.
Then a notice of enquiry has to be
issued to the worker, giving the
time, date and place of enquiry and
the name of the person holding the
enquiry. The worker is supposed to
come to the place of enquiry with
supportive evidence and witness of

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The charges made by the

employer against the employee
are explained to the worker. If the
worker agrees with the charges
made against him, the enquiry is
dropped. If he pleads innocent, the
proceedings continue in the
presence of the accused. During
the course of enquiry, examination
and cross examination should be
free and proper and all documents
are open to be seen by the

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The findings of the enquiry are then

conveyed to the management in
writing. Before taking any punitive
action, management should keep in
view the gravity of misconduct. The
punishment awarded should not be
out of proportion to the misconduct
of the employee. The order of
punishment has to be handed over
to the worker immediately. If the
punishment does not seen to be fair,
the worker can go to the labour court
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40

Depending on the gravity of

misconduct, management may initiate
the following punitive actions against
the employee who is found guilty:
(i)dismissal:
(ii) discharge,
(iii) discharge simpliciter,
(iv) suspension
(v) demotion to a lower grade,
(vi) with holding of increments,
(vii) fine and
(viii)warning/censure.

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Of these, suspension, discharge

or dismissal may be classified as
major punishments, while
awarding a fine, warning or
censure are regarded as minor
punishments. In establishments
where the Industrial
Employment (Standing Order)
Act is applicable, the employer
can award only those
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The object of punishing an

employee in a minor way is
to express the concern of
the employer for
maintaining discipline in the
establishment. Oral
warnings, written censure,
fines, etc., all aim at
preventing the employee

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The fine may hit the take-homepay of the employee warnings

may be entered in his personal
record, loss of increment has an
element of shame attached to it
and demotion may be extremely
humiliating for the delinquent
employee. Discharge simplicator
means termination of an
employees services for loss of
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45

Suspension means
prohibiting an employee
from attending work,
preventing him from
discharging the duties
assigned to him and
withholding the wage
payable to him.
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Suspension does not imply

termination of services of an
employee, it only mans denial of
work to him. When the act of
misconduct of an employee is
considered as serious, he is
suspended (called as procedural
suspension) and an enquiry is
ordered to find out whether his is
really guilty or not. Sometimes the
employee may be suspended, even
before issuing a charge sheet so as

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The employer is obliged to pay a

subsistence allowance to the
delinquent employee
1. half of basic wages + dearness
and compensatory allowances for a
period of 90days.
2. If the enquiry goes beyond 90
days, the allowance is increased to
three fourths of the employees
normal emoluments.

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Minor offences like late coming,

sleeping while at work, smoking
in prohibited places, etc., do not
invite serious punishments like
suspension unless the employee
repeats the offences habitually.
Where standing orders are in
force the rules for suspending an
employee are mentioned therein
and are expected to be followed
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50

The end result of both the termsdischarge and dismissal-is same,

that is, the employees services
stand terminated. In practical
usage, both terms are therefore
used interchangeably. Some minor
differences however, are worth
mentioning here. While dismissal
is a sort of punishment against
alleged misconduct, discharge is
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When the employer examines all

background factors leading to the
termination of services of an
employee, he may simply
discharge the employee instead of
dismissing him. Dismissal has a
negative connotation and carries a
punitive label alongside. A person
who is dismissed from service may
find it difficult to find alternative
employment, when compared to a
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In case of discharge, the errant

employee may be served a
reasonable advance notice. This is
not so in the case of dismissal where
the services are terminated
immediately. In case of dismissal,
the employer can withhold the dues
payable to the employee whereas in
case of discharge, usually all these
are settled simultaneously. Finally,
before dismissing an employee, the
employer has to hold disciplinary
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The grounds for dismissing an

employee are clearly stated in
Industrial Disputes Act,1947 (as
amended in 1982) and the
industrial Employment (Standing
Orders) Act 1946-such as willful
insubordination, theft, fraud,
dishonesty, habitual late coming,
habitual neglect of work, willful
damage to property disorderly
violent behavior, striking work in

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Authorities under this Act

1.Works Committee
2.Conciliation Officer
3.Board of Conciliation
4.Courts of Inquiry
5.Labour Court
6.Tribunal
7.National Tribunal

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MAINTENANCE
PEACE

OF

INDUSTRIEL

Establish machinery for prevention and

settlement of industrial disputes. This includes
legislative and non-legislative measures. Preventive
measures include works committees, standing
orders, welfare officers, shop councils, joint
councils and joint management councils. Settlement
methods include voluntary arbitration, conciliation
and adjudication.
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Government
should
be
provided with requisite
authority for setting the
industrial
disputes
wherever necessary.

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Provision for the bipartite

and tripartite committees in
order to evolve personnel
policies, code of conduct,
code of discipline, etc.
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Provision for the various

committees to implement
and evaluate the collective
bargaining
agreements,
court
orders
and
judgement,
awards
of
voluntary arbitration, etc.
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Labour welfare is essentially two words, "labour"

and "welfare." For conversion of materials into
finished goods, human effort is needed and such
human effort is called labour. Labour is basically
the labour force employed in an industry. It is the
general category of the human effort that is used
for the production of goods and services. This may
include employees employed in all types of offices
and ranks. These employees may be working at a
regular income and may have variable amounts of
responsibility levied upon them.
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The term "welfare" is defined as the

economic well being of an individual,
group, or economy. For individuals, it is
conceptualized by a utility function. For
groups, including countries and the world,
it is a tricky philosophical concept, since
individuals fare differently. In an
industrial sense, welfare is defined as
physical and mental well being of an
employee.
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Therefore, labour welfare is welfare

applied to industrial labour. Labour
welfare is fundamentally deserved by
every employee in the industry - it is
the right of every employee to live and
think freely, and have their biological
and psychological demands fulfilled.
Labour welfare is a humanitarian
effort that works to counterbalance
the busy urban lifestyle, thus
eliminating any undesirable
consequences.

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What are the welfare measures that

employer can do?
1. Housing
2. Formation of Co-operative Society and
store.
3. Creation of labour welfare fund
4. Providing uniform
5. Tour
6. Family get together
7. Free medical checkup
8. Recreation
9. Transport
10. Medical facilities
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Classification of Labour Welfare

1. Statutory
2. Voluntary
3. Mutual
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Statutory welfare is the product of the

coercive power of the government. Statutory
stipulations compel employers to implement
welfare schemes. The government enacts rules
in regard to labour welfare in order to enforce
the minimum standard of health and safety of
the workers. Employers have to observe the
rules relating to working conditions, hours of
work, hygiene, safety, light, ventilation,
sanitation etc. Government have increased
the statutory control of labour welfare.
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Voluntary welfare includes all those

activities which employers
undertake for their workers on a
voluntary basis. There are some social
organizations, which also undertake
voluntary welfare work. Mutual welfare
is undertaken by the workers
themselves. Some trade unions also
undertake
the responsibility of workers welfare.
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Labour welfare is also classified

under intra-mural activities,
and extra-mural activities. The
former include services provided
inside the factory
premises, and the latter include
services and amenities outside
the factory.
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Types of Welfare facilities

Intramural
Drinking Water
Toilets
Washing and bathing facility
Rest shelters
Uniform and protective
clothing
Recreation facilities
Canteens
Subsidised food
Medical aid

Extramural
Housing
Education facilities
Maternity benefits
Transportation
Sports facilities
Leave travel
Vocational training
Holiday homes
Cooperative stores
Fair price shops
Social insurance
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