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Labour (Industrial)

Relations and
Labour Welfare
Industrial Relations

 Earlier a personalized concept of master


and servant
 Now due to rapid industrialization it is more
complex and impersonal
 Parties directly concerned with industrial
relation are: the employer/management and
the employee/worker/trade unions.
 The Government has varied roles to play, like
it plays a direct role in maintaining healthy
industrial relations, in cases of PSUs; wherein
other cases the State often plays the role of a
mediator.
 In the conduct of industrial relations, the
Government plays an important role with a view
to further the welfare interest of all sections of
the society including employers and employees.

 The role played by the Government agencies


varies in degree. It ranges from only formulation
of rules for the observance of the two parties-
employers and the workers to direct intervention
when the Government agencies regulate the terms
of bargain and intervene in industrial disputes to
fasten their settlement.
Scope and Definition

 Industrial relations touch all aspects of labour


such as union policies, personnel policies and
practices including wages, welfare and social
security, service conditions, supervision and
communications, collective bargaining; attitude of
management, trade unions and Government action
on labour matters.
 Therefore, it is defined as all relationships
between the members of an organization as
individual or groups, trade unions, management,
and the State institutions concerned specifically
related to the various aspects of industrial labour-
management problems.
Political Economy of India
 India is being rapidly transformed from a state-driven
economy into a market-driven economy committed
to privatization, liberalization, and globalization. At
the regional level, the states are forced to enter the
rat race of liberalization among them to attract funds
for investment and development.
 The State is becoming less interventionist and it is
shifting from a pro-labour to pro-investor policy. In
the process, the State has ceased to be tender minded
and has become less sensitive to the problems of
working people and has shown readiness even to dilute
some of the labour statutes which hitherto had
provided some protection to the working people.
Importance of Good Industrial
Relations
 Good industrial Relations are necessary for the
economic development of a country and for
establishing and maintaining true industrial
democracy. It encourages the collective
bargaining as a means of self-regulation and to
help Government in making laws forbidding unfair
practices of unions and employers. It boosts up
the discipline and morale of workers.
 Cordial industrial relations are possible only if
the workers have minimum grievances, good
working conditions, better job satisfaction and a
proper balance between individual aspirations
and organizational goals.
Functions

 The functions of industrial relations are to


bring about solutions for conflicts
between labour and management,
conflicts between objectives and values,
between profit motive and social gain,
between the discipline and freedom,
between authority and workers, between
bargaining and co-operation, and these
solutions should be in the interest of
individual, the group and the
community.
Need of Labour Welfare
 To counter the handicaps the workers are
exposed in their work-life and folk-life.
 To provide opportunities and facilities for a
harmonious development of the workers
personality.
 To make workers comfortable, as most of
them coming from rural background feel out
of the place in a city/industrial township.
 To ensure the efficiency, contentment and
commitment of the workers.
Need of Labour Welfare
 To establish the idea of socialism as provided in the
Preamble of the Constitution of India.
 To achieve these, job satisfaction is key, which
could ensure industrial peace and high
productivity. Wherein job satisfaction is influenced
by factors like work environment, personal factors,
work, organizational climate, job security and
provision of social security by the employer.
Objective
Objectives of labour welfare measures as proposed by John (1998) are
summarized below:
 Enabling workers to live richer and more satisfactory lives.
 Contributing to the productivity of labour and efficiency of the
enterprise.
 Enhancing the standard of living of workers by indirectly reducing
the burden on their purse.
 Enabling workers to live in peace and harmony.
 Based on an intelligent prediction of the future needs of the
industrial workers, designing policies to cushion off and absorb the
shocks of industrialization and urbanization to workers.
 Fostering administratively viable and essential developmental
outlook among the workforce and
 Discharging social responsibilities.
Scope

 Anything done for the intellectual, physical, moral and


economic growth of the workers, whether by
employers, government or other agencies over and
above legal provisions, industrial customs or
contractual benefits would fall under Labour Welfare.
 It can be interpreted in different ways, in different
countries, depending upon the stages of economic
development, political outlook and social philosophy. It
might even include benefits for family in some cases.
 These may be statutory or voluntary and intra-mural
or extra-mural (within or outside the premises of the
industry/factory).
 The term labour welfare is very comprehensive and
includes various types of activities undertaken for the
economic, social, intellectual and moral benefit of the
labour community. Labour welfare implies the setting up
of minimum desirable standards and the provision of
facilities like health, food, clothing, housing, medical
assistance, education, insurance, job security, recreation
etc. Such facilities enable a worker and his family to lead a
good work life, family life and social life.
 The Encyclopedia of Social Sciences Vol. XV (1935) defines
labour welfare as "voluntary efforts of the employers, to
establish within the existing industrial system, working and
sometimes living and cultural conditions for the employees,
beyond what is required by law, the customs of the industry
and the conditions of the market".
 Labour welfare has two aspects: negative and positive. On
the negative side, labour welfare is concerned with
counteracting the baneful effects of the large scale
industrial system of production — especially capitalistic, and
so far as India is concerned — on the personal/family, and
social life of the worker. On its positive side, it deals with
the provision of opportunities for the worker and his/her
family for a good life as understood in its most
comprehensive sense.
 In India, the framework of providing welfare measures to
workers consists of statutory and voluntary measures, the
former being taken by the management and the latter being
achieved through collective bargaining agreements.
Constituents of Labour
Welfare
 The constituents of labour welfare, according to C. P.
John (1998), include working hours, working
conditions, safety, industrial health insurance,
workmen's compensation, provident fund, gratuity,
pensions, protection against indebtedness, industrial
housing, rest rooms, canteens, crèches, wash places,
toilet facilities, lunches, cinemas, theaters, music,
reading rooms, holiday rooms, worker's education,
co-operative stores, excursions, playgrounds, and
scholarship and other help for education of
employee's children.
Theories of Labour Welfare

 Religious Theory
 Philanthropic Theory
 Trusteeship Theory
 Policing Theory
 Placating Theory
 Efficiency/Functional Criterion
 Public Relations Theory
 Social Theory
 Religious Theory: Welfare activities are
considered to be necessary under this theory on
the basis religious principle and sentiments of the
employer. Religious appeal demands sharing the
fruits of progress and wealth partly with your
fellow beings as God will not tolerate too much
selfish and materialistic tendency.
 Philanthropic Theory: Going ahead of the
religious theory, this theory argues that everyone
should have brotherly relations with the rest of
mankind. It is a duty of the rich to help the poor
as mutual help would lead to a peaceful and
cooperative atmosphere within the society.
 Trusteeship Theory: It takes paternalistic attitude
towards industrial production and ownership of
resources. Entrepreneur as a trustee looks after the
productive activities wherein his duty is to distribute
and use the wealth wisely in the larger interest of
every workman who contributes to the production of
wealth.
 Policing Theory: As per this theory welfare is a legal
or statutory responsibility of the employer, who is
compelled to make available minimum comforts to
the workers like minimum wages, safety and security
so that the state does not punish the employer for not
taking up the statutory labour welfare activities. The
State regulation, supervision, inspection of the
industrial premises in such cases become very crucial.
 Placating Theory: Employers promote welfare as a fruit
of sustained efforts of the working class due to their
pressure. The working class organize itself into militant
unions, plan agitation activities and compel the employers
to concede to more and more facilities to the working
class. Thus stronger the working class unity, greater the
benefits in the form of welfare provisions.
 Efficiency/Functional Criterion: It attempts to relate
additional expenditure on the welfare promoting
activities and resultant increases in the productive
efficiency of the workers. Every addition to the welfare
promoting activity is found to pay rich dividends in the
course of time. Thus commercial approach to labour
welfare activities is the key here.
 Public Relations Theory: According to this theory,
welfare activities are provided to create a good
impression on the workers and the public. Clean and
safe working conditions make a good impression on the
workers, visitors and the public. Some employers
proudly take their visitors around the plant to show how
well they have organized their welfare activities.
 Social Theory: The social obligation of an industrial
establishment has been assuming great significance
these days. The social theory implies that employer is
morally bound to improve the conditions of the society
in addition to improving the conditions of its employees.
Labour welfare should gradually become social welfare.
Laws dealing with Labour
Welfare
 Factories Act, 1948
 Payment of Wages Act, 1936
 Workmen’s Compensation Act, 1923
 Maternity Benefit Act, 1961
 Employees’ State Insurance Act, 1948
 Employees' Provident Fund and Miscellaneous Provisions
Act, 1952
 Payment of Gratuity Act, 1972
 Employees’ Pension Act, 1995
Example

 Employees' Provident Fund and Miscellaneous Provisions


Act, 1952 is a law providing for insurance against old
age, retirement, discharge, retrenchment or death of
the workers. It is against these risks that the schemes
guarantee the necessary protection to workers and their
dependents. The Act applies to factories and
establishments falling under any notified industry
employing 20 or more persons. To become eligible for
membership of the Fund, a worker must have
completed one year's continuous service, or worked for
240 days during a period of 12 months.