Mod 1

Industrial Relations-conceptual and legal framework

Industrial Relations (IR) is the study of the laws, conventions and
institutions that regulate 'the workplace'.
Industrial relations encompasses a set of phenomena, both inside
and outside the workplace, concerned with determining and
regulating employment relationship. Relationship between
management and employees or among employees and their
organization that characterize and grow out of employment.

Objectives of Industrial Relations:

The main objectives of industrial relations system are:1. To safeguard the interest of labor and management by securing the highest level
of mutual understanding.
2. To avoid industrial conflict or trouble and develop pleasant relations, which are an
essential factor in the productivity of workers
3. To raise productivity to a higher level in an era of full employment
4. To establish and promote the growth of an industrial democracy based on labor
partnership in the sharing of profits and of managerial decisions
5. To eliminate or minimize the number of strikes, lockouts and gheraos by
providing reasonable wages,
6. Improving workers living and working conditions, said fringe benefits.
7. To encourage and develop trade unions in order to develop workers collective
strength
8. To enhance economic status of worker
9. regulate production by minimizing conflicts
10. To provide forum to the workers to solve their problems through mutual

negotiations and consultations with management

conceptual and legal framework

Industrial relations scholars have described three major
theoretical perspectives or frameworks, that contrast in their
understanding and analysis of workplace relations. The three
views are generally known as unitarism, pluralist and radical.
Each offers a particular perception of workplace relations and will
therefore interpret such events as workplace conflict, the role of
unions and job regulation differently. The radical perspective is
sometimes referred to as the "conflict model", although this is
somewhat ambiguous, as pluralism also tends to see conflict as
inherent in workplaces. Radical theories are strongly identified
with Marxist theories, although they are not limited to these.
1) Pluralist perspective
In pluralism, the organization is perceived as being made up of
powerful and divergent sub-groups, each their own set of
objectives and leaders. In particular, the two predominant subgroups in the pluralist perspective are the management and
trade unions.
2) Unitarist perspective
In unitarism, the organization is perceived as an integrated and
harmonious whole with the ideal of "one happy family" in
which management and other members of the staff all share a
common purpose by emphasizing mutual co-operation.
Furthermore, unitarism has a paternalistic approach: it demands
loyalty of all employees and is managerial in its emphasis and
application
3) Marxist/Radical perspective
This view of industrial relations looks at the nature of the
capitalist society, where there is a fundamental division of
interest between capital and labor, and sees workplace

relations against this background. This perspective sees

inequalities of power and economic wealth as having their
roots in the nature of the capitalist economic system. Conflict is
therefore seen as inevitable

Collective Bargaining
Collective bargaining is a process of negotiation between
employers and a group of employees aimed at agreements to
regulate working salaries, working conditions, benefits, and
other aspects of workers' compensation and rights.
The interests of the employees are commonly presented by
representatives of a trade union to which the employees belong.
The collective agreements reached by these negotiations usually
set out wage scales, working hours, training, health and safety,
overtime, grievance mechanisms, and rights to participate in
workplace or company affairs
A collective agreement functions as a labour contract between an
employer and one or more unions.
Collective bargaining is a way to solve workplace problems.
The objective of these negotiations is to arrive at a collective
agreement that regulates terms and conditions of employment.
Collective agreements may also address the rights and
responsibilities of the parties thus ensuring harmonious and
productive industries and workplaces.

Collective Bargaining Process

The collective bargaining process involves five core steps:
1.

Preparation Choosing a negotiation team and

representatives of both the union and employer. Both parties
should be skilled in negotiation and labor laws, and both
examine available information to determine whether they have a
strong standing for negotiation.
2. Discussion Both parties meet to set ground rules for the
collective bargaining negotiation process.

3.

Proposal Both representatives make opening statements,

outlining options and possible solutions to the issue at hand.
4. Bargaining Following proposals, the parties discuss potential
compromises, bargaining to create an agreement that is
acceptable to both parties. This becomes a draft agreement,
which is not legally binding, but a stepping stone to coming to a
final collective bargaining agreement.
5. Final Agreement Once an agreement is made between the
parties, it must be put in writing, signed by the parties, and put
into effect.

Methods :
Continuous Bargaining
Continuous bargaining is a method of collective bargaining in which ongoing
negotiations between the employer and the union representative take place. This
may occur when the employer and union representative have a good working
relationship that enables them to continually make small changes to ensure positive
employment policies.
Concession Bargaining
Concession bargaining is a method of collective bargaining that sometimes takes
place when the employer is in distress. In this situation, the union may give the
employer back a previous agreement in exchange for job security for the largest
number of employees. For example, a union may give up paid time off in exchange
for protection for layoffs.

Bargaining and Negotiating skills

Principles of Collective Bargaining:
Principles for Trade Unions:
1.They should have open minds on various issues.

2.There should not be any room for confusion &

misunderstanding.
3.Trade Unions should fully support management.
4.Strike calls should be the last resort.
Principles for Management:
1. Management should give proper recognition to trade unions.
2. Rules governing labour should be periodically examined.
3. All the clauses of agreements should be accepted in true
spirit.
Principles for both Union & Management:

1. Both the parties should have faith in each other.

2. Both the parties should have positive views of the whole
process rather thinking of it as formality.
3. Both the parties should adhere to all laws applicable to
collective bargaining.

The process of collective bargaining includes

identification of the problem, preparation for
negotiations, negotiation procedure, and
implementation of contract.
Negotiation skills to maintain excellent industrial relations or
employee relations are very vital for any manager specially HR
manager. These skills are not learnt or developed overnight.
Unless the managers have sufficient knowledge of industrial

relations issues, union dynamics and the environment under

which the organization works, the skills may not draw desired
results.
Skills: 1) Know what is being negotiated and why
2. Know what are the negotiation matters
3. Understand that negotiators agenda and context shape the negotiation
4. Understand and learn the fundamental skills to be an effective negotiator
5. Learn to deal with emotions and build relationships
6. Understand each phase of the negotiation process and learn the techniques to be
used
a) Preparation
b) Stating and advancing your interests
c) Listening to their interests
d) Weakening their case
e) Inventing options
f) Settlement
7. Understand the common negotiation tactics and learn how to deal with them
Few more tips of good negotiations:
1.

Never start with an assumption that whatever you offer will be

accepted. Assumptions and biases have no place in good
negotiations.

2.

Stay focused on what is being said by both parties.

3.

Assess the real needs of the other party. It will help you finding
out the breaking point.

4.

Have deep understanding of workers interests and current

situation.

5.

Identify your own limitations and define the space in which you
can play.

6.

Assess the problems of other party too. Bring other party in

your area of comfort

7.

Express consent to small non financial /intangible demands

initially to create feel good environment. It helps building
confidence.

8.

Always discuss in package and not on individual demand. This

gives you room for flexibility.

9.

Create an understanding that whatever management will give

in terms of increase in salary and benefits, that extra financial load
has to be diminished by generating additional revenue by other
party.
During negotiations, you need to use your listening and
reasoning skills very effectively. Speak less; listen more is
the mantra of successful negotiating skills. Emotions can
overwhelm you in any negotiation.

Workers Participation in Management

Workers participation is a system where workers and management share important
information with each other and participate in decision taking
Definition :WPM A system of communication and consultation, either formal or
informal, by which employees of an organization are kept informed about the
affairs of the undertaking and through which they express
Participation refers to the mental and emotional involvement of a person in a group
situation which encourages him to contribute to group goals and share the
responsibility of achievement.
Participation in Management gives the worker a sense of importance, pride and
accomplishment; it gives him the freedom of opportunity for self-expression; a
feeling of belongingness with the place of work and a sense of workmanship and
creativity.

Objectives of Workers Participation in Management

The objectives of workers participation in management are as follows:
To raise level of motivation of workers by closer involvement.
To provide opportunity for expression and to provide a sense of importance
to workers.
To develop ties of understanding leading to better effort and harmony.
To act on a device to counter-balance powers of managers.
To act on a panacea for solving industrial relation problems.
Levels of Participation
Workers participation is possible at all levels of management; the only difference is that
of degree and nature of application. For instance, it may be vigorous at lower level and
faint at top level. Broadly speaking there is following five levels of participation:

1. Information participation: It ensures that employees are able to receive

information and express their views pertaining to the matters of general
economic importance.
2. Consultative participation: Here works are consulted on the matters of
employee welfare such as work, safety and health. However, final decision
always rests at the option of management and employees views are only of
advisory nature.
3. Associative participation: It is extension of consultative participation as
management here is under moral obligation to accept and implement the
unanimous decisions of employees.
4. Administrative participation: It ensure greater share of works in discharge of
managerial functions. Here, decision already taken by the management come to
employees, preferably with alternatives for administration and employees have to
select the best from those for implementation.
5. Decisive participation: Highest level of participation where decisions are
jointly taken on the matters relation to production, welfare etc. is called decisive
participation.

ILO CONEVNTIONS :
The International Labour Organization (ILO) is a specialized agency of the United
Nations system which seeks the promotion of social justice and internationally
recognized human and labour rights.
The ILO formulates international labour standards . These standards take the form
of Conventions and Recommendations, which set minimum standards in the field
of fundamental labour rights: freedom of association, the right to organize, the
right to collective bargaining, the abolition of forced labour, equality of
opportunity and treatment, as well as other standards addressing conditions
spanning across the entire spectrum of work-related issues.
The ILO provides technical assistance, mainly in the following fields:
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vocational training and vocational rehabilitation;

employment policy;
labour administration;
labour law and industrial relations;
conditions of work;
management development;
cooperatives;
social security;
labour statistics, and occupational safety & health.

Conventions and recommendations are drawn up by representatives of

governments, employers and workers and are adopted at the ILO's annual
International Labour Conference. Once a standard is adopted, member states are
required under the ILO Constitution to submit them to their competent authority
(normally the parliament) for consideration. In the case of conventions, this means
consideration for ratification. If it is ratified, a convention generally comes into
force for that country one year after the date of ratification.
The ILOs fundamental Conventions These cover subjects considered to be
fundamental principles and rights at work(conventions are not in detail..if u want
google each of them n study )
The eight fundamental Conventions are:

1. Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87)
2. Right to Organise and Collective Bargaining Convention, 1949 (No. 98)
3. Forced Labour Convention, 1930 (No. 29)
4. Abolition of Forced Labour Convention, 1957 (No. 105)
5. Minimum Age Convention, 1973 (No. 138)
6. Worst Forms of Child Labour Convention, 1999 (No. 182)
7. Equal Remuneration Convention, 1951 (No. 100)
8. Discrimination (Employment and Occupation) Convention, 1958 (No. 111)

Priority Conventions
The ILOs Governing Body has also designated another four
Conventions as priority instruments, thereby encouraging member
States to ratify them because of their importance for the functioning of
the international labour standards system.
The four governance Conventions are:
1. Labour Inspection Convention, 1947 (No. 81)
2. Employment Policy Convention, 1964 (No. 122)
3. Labour Inspection (Agriculture) Convention, 1969 (No. 129)
4. Tripartite Consultation (International Labour Standards) Convention, 1976 (No. 144)

Technical conventions :
Technical
1.
2.
3.

- Hours of Work (Industry) Convention, 1919 (No. 1)

Unemployment Convention, 1919 (No. 2)
- Maternity Protection Convention, 1919 (No. 3)

4.
5.
6.
7.
8.
9.
10.

- Night Work (Women) Convention, 1919 (No. 4)

- Minimum Age (Industry) Convention, 1919 (No. 5)
- Night Work of Young Persons (Industry) Convention, 1919 (No. 6)
- Minimum Age (Sea) Convention, 1920 (No. 7)
- Unemployment Indemnity (Shipwreck) Convention, 1920 (No. 8)
- Placing of Seamen Convention, 1920 (No. 9)
- Minimum Age (Agriculture) Convention, 1921 (No. 10)

ETC.
Total more than 180 technical conventions
OBJECTIVES of ILO
Full employment and raising of standards of living
The extension of social security measures to provide a basic
income to all in need of such protection and comprehensive
medical care
Adequate protection for the life and health of workers in all
occupation
Provision for child welfare and maternity protection
The provision of adequate nutrition, housing and facilities for
creation and culture
The assurance of quality of educational and vocational opportunity
SOUND LABOUR MANGEMENT RELATIONS
A sound industrial relations system is one in which relationships between
management and employees (and their representatives) on the one hand, and
between them and the State on the other, are more harmonious and cooperative
than conflictual and creates an environment conducive to economic efficiency and
the motivation, productivity and development of the employee and generates
employee loyalty and mutual trust
A sound labour management relations system is important to the removal of one of
the main objections of workers and unions to productivity drives by employers.
Productivity increases have sometimes been opposed by workers and unions on the

grounds that they do not result in equitable sharing of benefits to workers and that
increased productivity may lead to redundancy. Developing understanding of basic
productivity concepts and of the methods of increasing productivity

1) An effective Grievance Procedure

2. Various forms of Workers Participation in Management
3. Sound Labour Management practices involving: Communication,
Consultation, Cooperation , participation and Partnership with workers
4. Collective Bargaining in good faith
SLMR-ILO RECOMMENDATIONS
Conflict is inherent in Industrial Relations. There is no formula for
sharing of profits between workers and employers. Collective
Bargaining is the globally accepted mode for working out agreed
decisions relating to terms and conditions of employment, including
profit sharing arrangements. Prevention and minimization of conflict and
building up of harmony requires communication processes aimed at
generating trust confidence and harmony. These processes includecommunication, consultation, cooperation, participation, and
partnership. These processes constitute elements of Sound Labour
Management Relations.
These practices lead to employee bonding, engagement and retention.
ATTRIBUTES OF A SOUND IR SYSTEM
Harmonizes economic growth with social justice and progress
Generates productive employment
Contributes to improvement in productivity
Improves the well being and quality of life of workers and their families

GRIEVANCE REDRESS
1.1 Grievance Redress Mechanism is part and parcel of the machinery of
any administration. No administration can claim to be accountable,
responsive and user-friendly unless it has established an efficient and
effective grievance redress mechanism. In fact, the grievance redress
mechanism of an organization is the gauge to measure its efficiency and
effectiveness as it provides important feedback on the working of the
administration.
I. (A) STRUCTURE OF GRIEVANCE REDRESS MACHINERY AT APEX
LEVEL
The grievances of public are received at various points in the Government
of India .There are primarily two designated nodal agencies in the Central
Government handling these grievances. These agencies are:(i) Department of Administrative Reforms and Public Grievances, Ministry
of Personnel, Public Grievances & Pensions
(ii) Directorate of Public Grievances, Cabinet Secretariat

Setting up of Grievance Redressal Machinery

9C. (1) Every industrial establishment employing twenty or more

workmen shall have one or more Grievance Redressal Committee for the
resolution of disputes arising out of individual grievances.
(2) The Grievance Redressal Committee shall consist of equal number of
members from the employer and the workmen.
(3) The chairperson of the Grievance Redressal Committee shall be
selected from the employer and from among the workmen alternatively
on rotation basis every year.
(4) The total number of members of the Grievance Redressal Committee
shall not exceed more than six:
Provided that there shall be, as far as practicable one woman member if
the Grievance Redressal Committee has two members and in case the

number of members are more than two, the number of women members
may be increased proportionately.
(5) Notwithstanding anything contained in this section, the setting up of
Grievance Redressal Committee shall not affect the right of the
workman to raise industrial dispute on the same matter under the
provisions of this Act.
(6) The Grievance Redressal Committee may complete its proceedings
within thirty days on receipt of a written application by or on behalf of
the aggrieved party.
(7) The workman who is aggrieved of the decision of the Grievance
Redressal Committee may prefer an appeal to the employer against the
decision of Grievance Redressal Committee and the employer shall,
within one month from the date of receipt of such appeal, dispose off the
same and send a copy of his decision to the workman concerned.
Module II: Introduction to Labour Laws
Labour law (also known as labor law or employment law) mediates the relationship between
workers, employing entities, trade unions and the government. Collective labour law relates to
the tripartite relationship between employee, employer and union.
LABOUR LAW ORIGIN-The history of labour law concerns the development of labour law as
a way of regulating and improving the life of people at work. In the civilisations of antiquity, the
use of slave labour was widespread. Some of the maladies associated with unregulated labour
were identified by Pliny as " diseases of slaves.
As England was the first country to industrialise, it was also the first to face the often appalling
consequences of capitalist exploitation in a totally unregulated and laissez-faire economic
framework. Over the course of the late 18th and early to mid-19th century the foundation for
modern labour law was slowly laid, as some of the more egregious aspects of working
conditions were steadily ameliorated through legislation. This was largely achieved through the
concerted pressure from social reformers, notably Anthony Ashley-Cooper, 7th Earl of
Shaftesbury, and others.

Labor laws have a uniform purpose: they protect employees' rights and set forth
employers' obligations and responsibilities. They also have multiple functions. The primary

functions of labor laws are to provide equal opportunity and pay, employees' physical and
mental well-being and safety, and workplace diversity. Although many employers would still
embrace sound business principles without legal mandates, employers use the structure
that labor laws provide to ensure that their operations are in compliance with federal laws.

FUNDAMENTAL RIGHTS: Part III of the Constitution consisting of Articles 12-35 is the heart
of the Constitution. Human Rights which are the entitlement of every man, woman and child
because they are human beings have been made enforceable as constitutional or fundamental
rights in India. The framers of the Constitution were conscious of the unequal treatment and
discrimination meted out to the fairer sex from time immemorial and therefore included certain
general as well as specific provisions for the upliftment of the status of women. Justice Bhagwati
in Maneka Gandhi v. Union of India (AIR 1978 SC 597)4.3 said: "These fundamental rights
represent the basic values cherished by the people of this country since the Vedic times and they
are calculated to protect the dignity of the individual and create conditions in which every human
being can develop his personality to the fullest extent." 4.2.1. Article 14 guarantees that the State
shall not deny equality before the law and equal protection of the laws.
directive principles of state policy

The Constitution of India has conferred innumerable rights on the protection of labour. In this
chapter lets see in brief what are all the rights conferred and what are the mechanism used, with
the support of case laws. An important feature of the constitution is the Directive Principles of
State Policy. Although the Directive Principles are asserted to be "fundamental in the governance
of the country," they are not legally enforceable. Instead, they are guidelines for creating a social
order characterized by social, economic, and political justice, liberty, equality, and fraternity as
enunciated in the constitution's preamble. Part IV of the Indian constitution outlines the directive
principles that a state should remember while framing laws for the society. Directive principles
call for the provision of social justice and economic welfare and ensure peace and harmony by
trying to remove the prevalent social evils. These principles act as a check on the government
and as a yardstick to measure government performance. However, these provisions are not
enforceable in any court of law; a fact that makes us questions the relevance of directive
principles. The role of the state in providing employment, social services, education and
environmental protection cannot be denied. For instance, in developing countries like India, the
state is seen as an important source of employment and provider of welfare. The state has the
obligation to devise policies that improve the standards of living of all, which can be done in
coordination with NGOs and the private sector.

Module III: Health and Safety, Conditions ofEmployment

The Factories Act 1948 was an Act of Parliament passed in the United Kingdom by the
Labour government of Clement Attlee. It was passed with the intention of safeguarding
the health of workers. It extended the age limits for the medical examination of persons
entering factory employment, while also including male workers in the regulations for
providing seats and issuing extensive new building regulations.
Under the legislation, young persons under the age of eighteen became subject to
medical examination not only on entry to the place of work, but annually thereafter.
Certificates of fitness were also made a requirement for young people employed in the
loading, unloading and coaling of ships and other kinds of work in ships on harbour or
wet dock, engineering construction and building operations as well as for factory
employees.
Provisions Relating To Health For Employees
Cleanliness
Disposal of waste & effluents
Ventilation and Temperature
Dust And Fume
Artificial Humidification

(Sec-11)
(Sec-12)
(Sec-13)
(Sec-14)
(Sec-15)

Overcrowding

(Sec-16)

Lighting

(Sec-17)

Drinking Water

(Sec-18)

Latrines And Urinals

(Sec-19)

Spittoons

(Sec-20)

Relating To Safety of Employees

Fencing of machinery

(U/S 21)

Machines in motions

(U/S 22)

Employment of young persons on dangerous machines (U/S 23)

Striking gears

(U/S 24)

Self acting machines

(U/S 25)

 Casing of new machines

(U/S 26)

Cotton openers

(U/S 27)

Hoists and lifts

(U/S 28)

Lifting machines, ropes, chains

(U/S 29)

Floors, stairs and means of access

(U/S 32)

Pits, sumps, etc.

(U/S 33)

Protection to eyes

(U/S 35)

Precautions in case of fire

(U/S 38)

Provisions Relating To Welfare of Employees

Washing facility (Sec-42)
Facility for Storing & drying clothing (Sec-43)
Facility for sitting (Sec-44)
First aid appliances (Sec-45)
Canteen (Sec-46)
Shelter, restrooms and lunchrooms (Sec-47)
Crche (Sec-48)
Welfare officers (Sec-49)
Power to make rule (Sec-50)
Working Hours for adult
Weekly off
Weekly holiday
Compensative holiday
Daily hours
Rest interval
Spread over
Night shifts
Prohibition of overlapping shifts
Extra wages for overtime

SEC-51

 Restrictions on Double Employment

SEC-60

Industrial employment (standing orders) act 1946

This Act is to require employers in industrial establishments to formally define conditions of
employment under them and submit draft standing orders to certifying Authority for its
Certification. It applies to every industrial establishment wherein 100 (reduced to 50 by the
Central Government in respect of the establishments for which it is the Appropriate Government)
or more workmen are employed. And the Central Government is the appropriate Government in
respect of establishments under the control of Central Government or a Railway Administration
or in a major port, mine or oil field. Under the Industrial Employment (Standing Orders) Act,
1946, all RLCs(C) have been declared Certifying Officers to certify the standing orders in
respect of the establishments falling in the Central Sphere. CLC(C) and all Dy.CLCs(C) have
been declared Appellate Authorities under the Act.
Discipline and Disciplinary ProcedureEmployee Discipline
A tool used by managers to improve poor performance and enforce
appropriate behavior to ensure a productive and safe workplace.
The Purpose of Employee Discipline
Eliminate inappropriate behavior
Create a "win-win" situation for manager and subordinates
Not to exercise vengeance or eliminate a problematic employee
Neglecting discipline has consequences:
Negative effect on productivity and morale
Difficulty in enforcing long-ignored standards later on
Establish Disciplinary Process - A step-by-step method of dealing with
performance problems in employees.
Basic Tenets of Discipline
Be specific about the problem
Keep it impersonal
Get the employees side

 Keep control of the discussion

Agree on how mistakes can be prevented next time.
Select progressive disciplinary action and consider mitigating circumstances.
Fully document the disciplinary session.

The Hot Stove Rule

1. Warning system
Before any behavior has occurred, a good manager has communicated
what the consequences of the undesirable behavior are
2. Immediate burn
If discipline is required, it must occur immediately after the undesirable act
is observed
The person must see the connection between the act and the discipline
3. Consistency

 There are no favorites stoves burn everyone alike

Any employee who performs the same undesirable act will be disciplined
similarly
4. Impersonality
Disciplinary action is not pointed toward a person
It is meant to eliminate undesirable.
Progressive Discipline
Action that begins with a verbal warning, and then proceeds through written
reprimands, suspension, and finally, in the most serious cases, dismissal.
Discipline approach in which a sequence of penalties is administered
Each one slightly more severe than previous one
Goal is to build a discipline program that progresses from less severe to more
severe punishment
Objective is to create and maintain a productive, responsive workforce

Progressive
Discipline
Procedure
Positive Discipline
Future-oriented approach
Working with employees to solve problems so that problems do not occur again

 Recognizes that people make mistakes

Deemphasizes punitive action by management
Employee termination is a consequence
The Disciplinary Process
Verbal Warning
The first step in employee discipline, which includes identification of the
problem and information sharing between the manager and the employee.
If employee is unaware of a policy they are violating, they should be
coached instead of disciplined
Prior to a verbal warning, manager must become aware of the problem
and verify it exists
Manager:
Meets with employee
States problem that has been identified
Listens to employee's perspective
Discusses potential solutions with employee
Ends on a positive, hopeful note
Written Warning
The second, more formal, step in employee discipline, which includes
stating the problem and noting repetition over time.
Includes:
Meeting similar to verbal warning
Placement of formal document in the employee's file
Suspension
The third step in the employee disciplinary process, in which the employee
is given time off, usually without pay, to demonstrate the seriousness of
the problem.
Manager meets with employee as before, and review formal
documentation of suspension.
Demotion

 The fourth type of action is Demotion where employee is subject to an

action that lowers the salary within their current pay grade or is placed in a
position at a lower pay grade, with or without lowering the employees
salary, involuntarily
Termination
The final action in the employee disciplinary process, which leads to the
end of employment and that results after repeated failure of the employee
to correct the problem.
Special circumstances
Certain events may result in termination without progressive discipline
Before immediate termination, manager should consider:
Magnitude of problem behavior
Prior record of employee

Module IV: Laws for handling Industrial Disputes and Contract Labour
The Industrial Disputes Act 1947 extends to the whole of India and regulates Indian
labour law so far as that concerns trade unions. It came into force April 1, 1947.The
objective of the Industrial Disputes Act is to secure industrial peace and harmony
by providing machinery and procedure for the investigation and settlement
of industrial disputes by negotiations.
The laws apply only to the organized sector. Chapter V-B, introduced by an amendment
in 1976, requires firms employing 300 or more workers to obtain government permission
for layoffs, retrenchments and closures. A further amendment in 1982 (which took effect
in 1984) expanded its ambit by reducing the threshold to 100 workers.
The Act also lays down:
1. The provision for payment of compensation to the workman on account of closure or lay
off or retrenchment.
2. The procedure for prior permission of appropriate Government for laying off or
retrenching the workers or closing down industrial establishments

3. Unfair labour practices on part of an employer or a trade union or workers.

The Principal Objects of Industrial Disputes Act
1. The promotion of measures for securing and preserving amity and good relations
between employers and workmen;
2. Investigation and settlement of industrial dispute between employers and employers,
employers and workmen, or between workmen and workmen with a right of
representation by a registered Trade Union or . Federation of Trade Unions or
Association of Employers or a Federation of Association of Employers.
3. The prevention of illegal strikes and lock-outs;
4. Relief to workmen in the matter of lay-oft, retrenchment and closure of an undertaking.
.
5. Collective bargaining.

APPLICABILITY

The Industrial Disputes Act extends to whole of India and applies to every industrial
establishment carrying on any business, trade, manufacture or distribution of goods and
services irrespective of the number of workmen employed therein.
Every person employed in an establishment for hire or reward including contract
labour, apprentices and part-time employees to do any manual, clerical, skilled,
unskilled, technical, operational or supervisory work, is covered by the Act.
This Act though does not apply to persons mainly in managerial or administrative
capacity, persons engaged in a supervisory capacity and drawing > 10,000 p.m or
executing managerial functions and persons subject to Army Act, Air Force and Navy
Act or those in police service or officer or employee of a prison

Contract Labour (Regulation & Abolition) Act, 1970

The Object of the Contract Labour Regulation and Abolition) Act, 1970 is to prevent
exploitation of contract labour and also to introduce better conditions of work. A
workman is deemed to be employed as Contract Labour when he is hired in
connection with the work of an establishment by or through a Contractor. Contract
workmen are indirect employees. Contract Labour differs from Direct Labour in
terms of employment relationship with the establishment and method of wage
payment. Contract Labour, by and large is not borne on pay roll nor is paid directly.
The Contract Workmen are hired, supervised and remunerated by the Contractor,

who in turn, is remunerated by the Establishment hiring the services of the

Contractor.
Registration And Licensing
The Act applies to the Principal Employer of an Establishment and the Contractor where in
20 or more workmen are employed or were employed even for one day during preceding 12
months as Contract Labour. For the purpose of calculating the number, contract labour
employed for different purposes through different contractor has to be taken into
consideration. This Act does not apply to the Establishments where work performed is of
intermittent or seasonal nature. If a Principal Employer or the Contractor falls within the
vicinity of this Act then, such Principal Employer and the Contractor have to apply for
Registration of the Establishment and License respectively. The contractor The Act also
provides for Temporary Registration in case the Contract Labour is hired for a period not
more than 15 days. Any change occurring in the particulars specified in the Registration or
Licensing Certificate needs to be informed to the concerned Registering Officer within 30
days of such change. From combined reading of Section 7 and Rules 17 & 18 of the
Contract Labour (Regulation and Abolition) Central Rules, 1971, it appears that the Principal
Employer has to apply for registration in respect of each establishment. Other important
point to note is that a License issued for One Contract cannot be used for entirely different
Contract work even though there is no change in the Establishment.

Penal Provisions
Section 9 of the Act provides that the Principal Employer, to whom this Act is applicable,
fails to get registered under the Act, then such Principal Employer cannot employ contract
labour. It also appears that if the Establishment is not registered or if the Contractor is not
licensed then the contract labour shall be deemed to be the direct workmen and the
Principal Employer or the Establishment shall be liable for the wages, services and facilities
of the contract labour etc. For contravention of the provisions of the Act or any rules made
thereunder, the punishment is imprisonment for a maximum term upto 3 months and a
fine upto a maximum of Rs.1000/-.
Responsibilities
The Act enjoins Joint and Several responsibity on the Principal Employer and the
Contractor. The Principal Employer should ensure that the Contractor does the following:
a) Pays the wages as determined by the Government, if any, or;
b) Pays the wages as may be fixed by the Commissioner of Labour.
c) In their absence pays fair wages to contract labourer.
d) Provides the following facilities:
i. Canteen (if employing 100 or more workmen in one place) and if the work is likely to last
for 6 months or more.
ii. Rest rooms where the workmen are required to halt at night and the work is likely to last
for 3 months or more.
iii. Requisite number of latrines and urinals - separate for men and women.
iv. Drinking water.
v. Washing.
vi. First Aid.

vii. Crche
e) Maintains various registers and records, displays notices, abstracts of the Acts, Rules
etc.
f) Issues employment card to his workmen, etc

Module V: Trade Unions-An organization whose membership consists of workers and union
leaders, united to protect and promote their common interests.
TRADE UNION Definition: - a continuous association of wage-earners for the purpose of
maintaining and improving the conditions of their working lives".

Meaning
Trade unions are associations of workers and are formed with the intention of protecting the
workers against exploitation of the employers and also to improve the workers conditions.
Trade union is a voluntary organization of workers formed to protect and promote their
interests through collective action. It may be formed on plant basis, industry basis, firm
basis, regional basis or national basis. Different writers and thinkers have defined the
trade union differently.
Trade Union History in India
The setting up of textile and clothing mills around the port cities of Bombay , Calcutta ,
Madras and Surat in the second half of the 19th century led to the beginnings of the
industrial workforce in India.
The credit for the first association of Indian workers is generally given to the Bombay
Mill-Hands Association founded by N.M. Lokhande in 1884.
The first clearly registered trade-union is considered to be the Madras Labour Union
founded by B.P. Wadia in 1918.
Factories act 1891 was passed attempts to organize labour in India
Setting up of ILO In 1919 gave it an international colour

 Periods of 1924 1935 era of revolutionary trade union movement in India

The first trade union federation to be set up was the All India Trade Union Congress
(INTUC) in 1920.
Largest unions in India
Bharatiya Mazdoor Sangh : 6.2 million 5768 unions affiliated
Indian National Trade Union Congress : 3.9 million
Centre for Indian Trade Unions : 3.2 million
All India Trade Union Congress : 2.7 million
Trade Union Classification
A trade union may be:
1. A company union that represents interests of only one company and may not
have any connection with other unions.
Also called house union, a company union is often a bogus one and generally
illegal.
2. A general union that represents workers from several companies in the same
industry. Also called industrial union.
3. A craft union that represents skilled workers in a particular field such as
carpentry or welding.
4. White Collar Unions: members are usually professional eg teachers unions ,
Doctors Association etc
Why do people join Union?
Greater Bargaining Power
Minimize Discrimination
Sense of Security
Sense of Participation

 Sense of Belongingness
Platform for self expression
Betterment of relationships
SPECIFIC OBJECTIVES OF UNIONS
1. Wage & salary bargaining
2. Fight for continuous improvement in employee benefits
3. Improving working conditions at work place
4. Improving welfare, healthcare & recreation facilities, and leisure at workplace
5. Increasing rest periods, holidays, paid leave and time-offs
6. Decreasing working hours, work load esp. manual, and hazardous working conditions
7. Improving career and salary rise prospects & job security
8. Protecting employees against arbitrary / unjust actions of Management
Functions of Trade unions
FUNCTION -The primary functions of a trade union are to protect,

defend and support the common interests of members by acting as a

mediator between workers and the organizations for whom they
work.

(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
(iii)Political functions
Seeking the help of political parties during the period of strikes and lockouts
Helping the political parties in enrolling the members
Collecting donations etc
(iv) Social Functions
Social service activities
Discharging social responsibility
Taking up individual and collective grievances
The principal purposes of a labor union are to
(1) negotiate wages and working condition terms,
(2) regulate relations between workers (its members) and the employer,
(3) take collective action to enforce the terms of collective bargaining,
(4) raise new demands on behalf of its members, and
(5) help settle their grievances. A trade union may be:
(a) A company union that represents interests of only one company and may not have any
connection with other unions.
Also called house union, a company union is often a bogus one and generally illegal.

(b) A general union that represents workers from several companies in the same industry. Also
called industrial union.
(c) A craft union that represents skilled workers in a particular field such as carpentry or welding.

PROBLEMS-1. Trade Union leadership: The nature of leadership significantly influences the
union-management relations as the leadership is the lynch-pin of the management of trade
unions. The leadership of most of the trade unions in India has been outside leadership mainly
drawn from political parties.
2. Multiple unions: Multiple unionism both at the plant and industry levels pose a serious threat
to industrial peace and harmony in India. The situation of multiple unions is said to prevail when
two or more unions in the same plant or industry try to assert rival claims over each other and
function with overlapping jurisdiction. The multiple unions exist due to the existence of craft
unions, formations of two or more unions in the industry. Multiple unionism is not a
phenomenon unique to India. It exists even in advance countries like UK and USA. Multiple
unionism affects the industrial relations system both positively and negatively.
3. Union Rivalry: The formal basis for Trade Union Organisation is provided by the Indian
Trade Union Act, 1926. The relevant article reads as follows: Any seven or more members of a
trade union may be subscribing their name to the roles of the trade union and by otherwise
complying with the provisions of this act with respect to the registration, apply for registration of
the trade union under this Act.
4. Finance: Sound financial position is an essential ingredient for the effective functioning of
trade unions, because in the process of rendering services or fulfilling their goals, trade unions
have to perform a variety of functions and organiseprogrammes which require enormous
financial commitments. Hence, it is imperative on the part of a trade union to strengthen its
financial position.
5. Low membership: The average membership figures of each union are quite depressing. In
1992-93 the average membership figure was 632, a steady fall from 3,594 per union from 192728. Because of their small size, unions suffer from lack of adequate funds and find it difficult to
engage the services of experts to aid and advise members in times of need. They cant bargain
with the employer effectively on their own.
6. Heterogeneous nature of labour: Since workers come to the factory with varying
backgrounds, it is difficult for them to put a joint front in case of trouble. Employers exploit the
situation, under the circumstances, by dividing workers on the basis of race, religion, language,
caste, etc.

7. Lack of Interest: For a large majority of workers, unionism even today remains a foreign
issue. In fact, workers avoid union activities out of sheer disinterestedness. Those who become
part of the union, do not also participate in the union work enthusiastically. In such a scenario, it
is not surprising to find outside political leaders exploiting the situation serve their own personal
agenda.
8. Absence of paid office bearers: Weak finances do not permit unions to engage the services of
full time, paid office bearers. Union activists, who work on a part time basis, neither have the
time nor the energy to take up union activities sincerely and diligently.
Trade Unions Act 1926
The Act was formulated in 1926 called- Indian Trade Union Act and enforced from 1st June
1927. The Indian Trade Union Act 1926 was passed to provide for the registration of trade unions
with a view to render lawful association of workers. The act also defined law relating to
registered trade unions and provided certain privileges and protection to the registered trade
unions
NOTE-READ LITTLE MORE ABOUT (Trade Unions Act 1926) FROM THE SLIDES
WHICH SIR GAVE

MOD-VI
Module VI: Wage Related Laws
Minimum Wages Act, 1948

The Minimum Wages Act 1948 is an Act of Parliament concerning Indian labour law that sets
the minimum wages that must be paid to skilled and unskilled labours. The Indian
Constitution has defined a 'living wage' that is the level of income for a worker which will ensure
a basic standard of living including good health, dignity, comfort, education and provide for any
contingency. However, to keep in mind an industry's capacity to pay the constitution has defined
a 'fair wage'. Fair wage is that level of wage that not just maintains a level of employment, but
seeks to increase it keeping in perspective the industrys capacity to pay. To achieve this in its
first session during November 1948, the Central Advisory Council appointed a Tripartite
Committee of Fair Wage. This committee came up with the concept of Minimum Wages.
A minimum wage is such a wage that it not only guarantees bare subsistence and preserves
efficiency but also provides for education, medical requirements and some level of
comfort. India introduced the Minimum Wages Act in 1948, giving both the Central government
and State government jurisdiction in fixing wages. The act is legally non-binding, but statutory.
Payment of wages below the minimum wage rate amounts to forced labour. Wage Boards are set
up to review the industrys capacity to pay and fix minimum wages such that they at least cover a
family of fours requirements of calories, shelter, clothing, education, medical assistance, and
entertainment
Payment of Wages Act 1936
The Payment of Wages Act regulates the payment of wages to certain classes of persons
employed in industry and its importance cannot be under-estimated. The Act guarantees payment
of wages on time and without any deductions except those authorised under the Act. The Act
provides for the responsibility for payment of wages, fixation of wage period, time and mode of
payment of wages, permissible deduction as also casts upon the employer a duty to seek the

approval of the Government for the acts and permission for which fines may be imposed by him
and also sealing of the fines, and also for a machinery to hear and decide complaints regarding
the deduction from wages or in delay in payment of wages, penalty for malicious and vexatious
claims. The Act does not apply to persons whose wage is Rs. 10,000 or more per month. The Act
also provides to the effect that a worker cannot contract out of any right conferred upon him
under the Act.

Equal Remuneration Act 1976

Equal Remuneration Act, 1976 has been enacted to provide for the payment of equal
remuneration to men and women workers and also for the prevention of discrimination, on the
ground of sex, against women in the matter of employment. As per the Act no employer is
allowed to pay to any female worker, employed by him in an establishment or employment,
remuneration, whether payable in cash or in kind, at rates less than the male counterpart for same
work or work of a similar nature. Remuneration has been defined as the basic wage or salary,
and any additional emoluments whatsoever payable, either in cash or in kind, to a person
employed in respect of employment or work done in such employment, if the terms of the
contract of employment, express or implied, were fulfilled.
Regarding recruitment, the act makes it clear that no employer shall, while making recruitment
for the same work or work of a similar nature, or in any condition of service subsequent to
recruitment such as promotions, training or transfer, make any discrimination against women

except where the employment of women in such work is prohibited or restricted by or under any
law for the time being in force.
The Act also provides safeguarding rights of women by allowing for the complying with the
requirements of any law giving special treatment to women, or to any special treatment accorded
to women in connection with
-

the birth or expected birth of a child, or

the terms and conditions relating to retirement, marriage or death or to any provision
made in connection with the retirement, marriage or death will not be affected by the act.

Payment of Bonus Act 1965

The payment of Bonus Act provides for payment of bonus to persons employed in certain
establishments of the basis of profits or on the basis of production or productivity and for matters
connected therewith.

It extends to the whole of India and is applicable to every factory and to every other
establishment where 20 or more workmen are employed on any day during an accounting year
Eligibility For Bonus
Every employee receiving salary or wages upto RS. 3,500 p.m. and engaged in any kind of work
whether skilled, unskilled, managerial, supervisory etc. is entitled to bonus for every accounting
year if he has worked for at least 30 working days in that year.

However employees of L.I.C., Universities and Educational institutions, Hospitals, Chamber of

Commerce, R.B.I., IFCI, U.T.I. Social Welfare institutions are not entitled to bonus under this
Act.

DISQUALIFICATION FOR BONUS

Not with standing anything contained in the act, an employee shall be disqualified from
receiving bonus, if he is dismissed from service for fraud or riotous or violent behaviour while in
the premises of the establishment or theft, misappropriation or sabotage of any property of the
establishment.
Minimum/Maximum Bonus Payable
MINIMUM BONUS
1.

The minimum bonus which an employer is required to pay even if he suffers losses
during the accounting year or there is no allocable surplus is 8.33 % of the salary or wages
during the accounting year, or

2.

Rs. 100 in case of employees above 15 years and Rs 60 in case of employees below 15
years, at the beginning of the accounting year,
whichever is higher
MOD-VII
Module VII: Employee Benefits and Social Security related laws

Payment of Gratuity Act, 1972Gratuity is the reward in the form of money for an employer to his employee on his termination
for his past services.
Payment of Gratuity Act 1972 applies to whole India except Jammu and Kashmir State.
Application of Gratuity Act [Section 1]:

Every mine, factory, oilfield, port, plantation and Railway Company.

Every establishment or shop within the meaning of any law for the time being in force in
relation to establishment and shops in a State, in which ten or more employees are or
were employed on any day in the preceding twelve months.

Such class of establishment or other establishments, in which ten or more

workers/employees are or were employed on any day in the preceding twelve months, as
notified by Central Government of India by way of a notification in the Official Gazette.

If the provisions of the Gratuity Act 1972 become applicable to an establishment or shop
once, the Act shall continue to apply to such establishment or shop even if the number of
workers/employees falls below ten at any time in the future.

A worker/employee is eligible to receive gratuity under the Gratuity Act 1972, if he/she:

Is employed in an shop or establishment to which the Gratuity Act applies (Section 1)

Is an employee as per Section 2(e).

Has been in Continuous Service of not less than five Years subject to some exceptions.

Mode of Payment of Gratuity:

Cash

Cheque or demand draft; if so desired by the payee.

Postal Money Order if gratuity payable amount is less than one thousand; if so desired by
the payee. (After deducting the commission payable)

Note: The details of gratuity payment shall be sent by the employer to the controlling
authority.
Provident Fund Act 1952

This act is an important fragment of Labor Welfare legislation enacted by the Parliament to
provide social security benefits to workers. At present, the Act and Schemes framed provide 3
types if benefits:

Contributory Provident fund.

Pension benefits to employees/family members.

Insurance cover to the members of Provident Fund.

The provisions of the Employee provident fund act extend to whole of India except the State of
Jammu & Kashmir and also the State of Sikkim where it has not been notified so far after its
annexation with the Union of India.
Examples
Eligibility:

An employee at the time of joining the employment and getting salary up to Rs 6,500/He/ she is eligible for membership of fund from very first date of joining a covered
establishment.

Pension Fund :
This is a fund that provides retirement. To avail pension benefit
To avail pension benefit, the member

Should have completed 10 years of continuous service (or) attained age of 50 years or
more.

Doesnt receive any EPF pension.

Will receive pension amount on a monthly basis after attaining the age of 58.

Workmens Compensation Act 1923

The Workmens Compensation Act, 1923 provides for payment of compensation to workmen and
their dependants in case of injury and accident (including certain occupational disease) arising
out of and in the course of employment and resulting in disablement or death. The Act applies to
railway servants and persons employed in any such capacity as is specified in Schedule II of the
Act. The schedule II includes persons employed in factories, mines, plantations, mechanically
propelled vehicles, construction works and certain other hazardous occupations.
The amount of compensation to be paid depends on the nature of the injury and the average
monthly wages and age of workmen.The minimum and maximum rates of compensation payable
for death (in such cases it is paid to the dependents of workmen) and for disability have been
fixed and is subject to revision from time to time.
A Social Security Division has been set up under the Ministry of Labour and Employment ,
which deals with framing of social security policy for the workers and implementation of the
various social security schemes. It is also responsible for enforcing this Act. The Act is
administered by the State Governments through Commissioners for Workmen's Compensation.
The main provisions of the Act are:

An employer is liable to pay compensation:- (i) if personal injury is caused to a workman

by accident arising out of and in the course of his employment; (ii) if a workman
employed in any employment contracts any disease, specified in the Act as an
occupational disease peculiar to that employment.

E.S.I.C. Act, 1948

The Employees* Slate Insurance Act (ESI Act) was enacted with the object of introducing a
scheme of health insurance for industrial workers. The scheme envisaged by it is one of
compulsory State Insurance providing for certain benefits in the event of sickness, maternity and
employment injury to workmen employed in or in connection with the work in factories other
than seasonal factories. The ESI Act, which has replaced the Workmen's Compensation
(3) "confinement" means labour resulting in the issue of a living child or labour after 26 weeks
of pregnancy resulting in the issue of a child whether alive or dead;
(4) "contribution" means the sum of money payable to the Corporation by the principal
employer in respect of an employee and includes any amount payable by or on behalf of the
employee in accordance with the provisions of this Act;
(6) "Corporation" means the Employees' State Insurance Corporation set up under this Act;

8) "employment injury" means a personal injury to an employee caused by accident or an

occupational disease arising out of and in the course of his employment, being an insurable
employment, whether the accident occurs or the occupational disease is contracted within or
outside the territorial limits of India;

(11) "family" means all or any of the following relatives of an insured person, namely,(i) a spouse;
(ii) a minor legitimate or adopted child dependent upon the insured person;
(iii) a child who is wholly dependent on the earnings of the insured person and who is(a) receiving education, till he or she attains the age of twenty-one years,
(b) an unmarried daughter;
(iv) a child who is infirm by reason of any physical or mental abnormality or injury and is wholly
dependent on the earnings of the insured person, so long as the infirmity continues;
(v) Dependant parents, whose income from all sources does not exceed such income as may be
prescribed by the Central Government;
(vi) in case the insured person is unmarried and his or her parents are not alive, a minor brother
or sister wholly dependent upon the earnings of the insured person. (2010 amendment)
(12)"factory" means any premises including the precincts thereof whereon 10 or more persons
are employed or were employed on any day of the preceding 12 months, and in any part of which
a manufacturing process is being carried on or is ordinarily so carried on, but does not include a
mine subject to the operation of the Mines Act, 1952 or a railway running shed. (2010
amendment)
(14A) "managing agent" means any person appointed or acting as the representative of another
person for the purpose of carrying on such other person's trade or business, but does not include
an individual manager subordinate to an employer;
(14B) "mis-carriage" means expulsion of the contents of a pregnant uterus at any period prior
to or during the 26 weeks of pregnancy but does not include any mis-carriage,
Maternity Benefits Act, 1961 in India.
The Maternity Benefits Act, 1961 aims at regulating employment of women employees all over
the country. The act provides 12 weeks as the maximum period for which any working woman

shall be entitled to maternity benefit. She can avail this benefit as 6 weeks up to and including
the day of her delivery and 6 weeks immediately following the day of her delivery. (Section 4)

Applicability of the Act

The Act applies to:
Every factory, mine or plantation (including those belonging to Government),
An establishment engaged in the exhibition of equestrian, acrobatic and other performances,
irrespective of the number of employees, and
Every shop or establishment wherein 10 or more persons are employed or were employed on
any day of the preceding 12 months.

Eligibility & Conditions for Claiming Benefits

The Act lays down that any women employed, whether directly or through any agency, for wages
in any establishment is eligible to claim maternity benefits if she is expecting a child and has
worked for her employer for at least 80 days in the 12 months immediately preceding the date of
her expected delivery. (Section 5)
A woman looking forward to maternity benefits could ask the employer to give her light work for
a month. Such request should be made atleast 10 weeks before the date of her expected delivery.
At that time she needs to produce a certificate confirming her pregnancy. (Section 5)
Also she needs to give a written notice to the employer about 7 weeks before the date of her
delivery regarding her absence period pre and post delivery. (Section 5).
The Apprentices Act 1961Apprentices Act, 1961 was enacted to provide for the regulation and control of training of
apprentices. A person has to be more than fourteen years of age and also has to satisfy prescribed
standard of education to be qualified for being engaged as an apprentice to undergo
apprenticeship training in any trade. Special provisions have to be made for Scheduled Castes
and Scheduled Tribes. Also he or, if he is minor, his guardian has to enter into a contract of
apprenticeship with the employer. Every such contract of apprenticeship may contain such terms
and conditions as may be agreed to by the parties to the contract but no such term or condition
can be inconsistent with any provision of the Act. Employer has been defined as any person who
employs one or more other persons to do any work in an establishment for remuneration and
includes any person entrusted with the supervision and control of employees in such

establishment. Obligations have been put on employers by the Act such as they will have to
make suitable arrangements in their workshops for imparting a course of practical training to
every apprentice engaged by them.