Industrial Relations:

Industrial Relation is a relation between employer and employees, employees and employees and
employees and trade unions. (Industrial dispute Act 1947)
Governments set the framework for labour relations through legislation and regulation. Industrial
relations has become one of the most delicate and complex problems of modern industrial
society. Industrial progress is impossible without cooperation of labours and harmonious
relationships. Therefore, it is in the interest of all to create and maintain good relations between
employees (labour) and employers (management).

Industrial Relation encompasses all such factors that influence behaviour of people at
work. A few such important factors are details below:

1. Institution: It includes government, employers, trade unions, unions’ federations or

associations, government bodies, labour courts, tribunals and other organizations which have
direct or indirect impact on the industrial relations systems.

2. Characters : It aims to study the role of workers unions and employers’ federations officials,
shop stewards, industrial relations officers/ manager, mediator/conciliators / arbitrator, judges of
labour court, tribunal etc.
3. Methods : Focus on collective bargaining, workers’ participation in the Industrial Relation
schemes, discipline procedure, grievance re-dressal machinery, dispute settlements machinery
working of closed shops, union reorganization, organizations of protests through methods like
revisions of existing rules, regulations, policies, procedures, hearing of labour courts, tribunals
etc.

4. Contents : Includes matter pertaining to employment conditions like pay, hours of works,
leave with wages, health, and safety disciplinary actions, lay-off, dismissals retirements etc.,
laws relating to such activities, regulations governing labour welfare, social security, industrial
relations, issues concerning with workers’ participation in management, collective bargaining,
etc.

Services to Employer And Workers

Objectives of Industrial Relation:

1. To safeguard the interest of labour and management by securing the highest level of mutual
understanding and good-will among all those sections in the industry which participate in
the process of production.

2. To avoid industrial conflict or strife and develop harmonious relations, which are an
essential factor in the productivity of workers and the industrial progress of a country.

3. To raise productivity to a higher level in an era of full employment by lessening the tendency
to high turnover and frequency absenteeism.

4. To establish and nurse the growth of an Industrial Democracy based on labour partnership in
the sharing of profits and of managerial decisions, so that ban individuals personality may
grow its full stature for the benefit of the industry and of the country as well.

5. To eliminate, as far as is possible and practicable, strikes, lockouts and gheraos by providing
reasonable wages, improved living and working conditions, said fringe benefits.

6. To establish government control of such plants and units as are running at a loss or in which
productions has to be regulated in the public interest.

7. Improvements in the economic conditions of workers in the existing state of industrial

managements and political government.
8. Control exercised by the state over industrial undertaking with a view to regulating
production and promoting harmonious industrial relations.

9. Socializations or rationalization of industries by making the state itself a major employer.

10. Vesting of a proprietary interest of the workers in the industries in which they are employed.

Factors of industrial relations –

Good industrial relations depend on a great variety of factors. Some of the more obvious ones are
listed below:

1. History of industrial relations – No enterprise can escape its good and bad history of
industrial relations. A good history is marked by harmonious relationship between
management and workers. A bad history by contrast is characterized by militant strikes
and lockouts. Both types of history have a tendency to perpetuate themselves. Once
militancy is established as a mode of operations there is a tendency for militancy to
continue. Or once harmonious relationship is established there is a tendency for
harmony to continue.

2. Economic satisfaction of workers – Psychologists recognize that human needs have a

certain priority. Need number one is the basic survival need. Much of men conducted
are dominated by this need. Man works because he wants to survive. This is all the
more for underdeveloped countries where workers are still living under subsistence
conditions. Hence economic satisfaction of workers is another important prerequisite
for good industrial relations.

3. Social and Psychological satisfaction – Identifying the social and psychological urges of
workers is a very important step in the direction of building good industrial relations. A
man does not live by bread alone. He has several other needs besides his physical needs
which should also be given due attention by the employer. An organization is a joint
venture involving a climate of human and social relationships wherein each participant
feels that he is fulfilling his needs and contributing to the needs of others. This
supportive climate requires economic rewards as well as social and psychological
rewards such as workers’ participation in management, job enrichment, suggestion
schemes, re-dressal of grievances etc.

4. Off-the-Job Conditions – An employer employs a whole person rather than certain

separate characteristics. A person’s traits are all part of one system making up a whole
man. His home life is not separable from his work life and his emotional condition is not
separate from his physical condition. Hence for good industrial relations it is not enough
that the worker’s factory life alone should be taken care of his off-the-job conditions
should also be improved to make the industrial relations better.

5. Enlightened Trade Unions – The most important condition necessary for good industrial
relations is a strong and enlightened labour movement which may help to promote the
status of labour without harming the interests of management, Unions should talk of
employee contribution and responsibility. Unions should exhort workers to produce
more, persuade management to pay more, mobilize public opinion on vital labour
issues and help Government to enact progressive labour laws.

Collective Bargaining:

6. Negotiating skills and attitudes of management and workers – Both management and
workers’ representation in the area of industrial relations come from a great variety of
backgrounds in terms of training, education, experience and attitudes. These varying
backgrounds play a major role in shaping the character of industrial relations. Generally
speaking, well-trained and experienced negotiators who are motivated by a desire for industrial
peace create a bargaining atmosphere conducive to the writing of a just and equitable collective
agreement. On the other hand, ignorant, inexperienced and ill trained persons fail because they
do not recognize that collective bargaining is a difficult human activity which deals as much in
the emotions of people as in their economic interests. It requires careful preparation and top –
notch executive competence. It is not usually accomplished by some easy trick or gimmick.
Parties must have trust and confidence in each other. They must possess empathy, i.e. they
should be able to perceive a problem from the opposite angle with an open mind. They should
put themselves in the shoes of the other party and then diagnose the problem. Other
factors which help to create mutual trust are respect for the law and breadth of the
vision. Both parties should show full respect for legal and voluntary obligations and
should avoid the tendency to make a mountain of a mole hill.

Collective Bargaining in India

Origin & Development - Since Collective Bargaining is the off-shoot of Trade Union activity, it
is worthwhile to trace the origin of Trade Union first. The credit for organised labour movement
in India goes to N.M. Lokhande, who was a factory worker himself. In 1884, he organised an
agitation in Bombay and prepared a memorandum demanding limitation of working hours, a
weekly rest day, compensation for injuries etc. and in response of these demands a weekly
holidays was actually granted by the mill owners of Bombay. In fact, in 1890, the Bombay Mill
hands’ Association was organised with Lokhande as chairman and workers newspaper
“Deenabandhu” was started. The trade union movement got its momentum at the close of the
World War I and the period of 1918-21 was an epoch-making period in the history of Indian
labour movement. The Madras Labour Union (1918) founded by P.P. Wadia was the first India’s
Trade Union. By the year 1920 the Trade Union had emerged on the Indian Scene in almost all
the sector to protect the legitimate interests of the working classes. Collective Bargaining
formally started in 1920s in the textile industry in Ahmedabad at the time when Mahatma
Gandhi was introducing the concept of arbitration. Collective Bargaining started because of
failure of arbitration.
Thereafter, lots of collective bargaining agreements were executed especially after
Independence. But there was little support for the growth of this practice, since neither British
India nor Independent India made legal provisions for collective bargaining. Nevertheless, like
many other countries, collective bargaining in India got some impetus from various statutory
provisions. The Trade Union Act, 1929, the Bombay Industrial Relations Act, 1946, the
Industrial Disputes Act, 1947, and the Madhya Pradesh Industrial Relations Act, 1960 provided a
machinery for consultation and paved the way for Collective bargaining.
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Settlement of disputes:

7. Public policy and legislation:- when Government, regulates employee relations, it

becomes a third major force determining industrial relations the first two being the
employer and the union. Human behaviour is then further complicated as all three
forces interact in a single employee relation situation. Nonetheless, government in all countries
intervenes in management – union relationship by enforcing labour laws and by insisting that the
goals of whole society shall take precedence over those of either of the parties. Government
intervention helps in three different ways 1) it helps in catching and solving problems before
they become serious. Almost everyone agrees that it is better to prevent fires them to try stopping
them after they start; 2) It provides a formalized means to the workers and employers to give
emotional release to their dissatisfaction; and 3) It acts as a check and balance upon arbitrary and
capricious management action.

8. Better education: - with rising skills and education workers’ expectations in respect of
rewards increase. It is a common knowledge that the industrial worker in India is
generally illiterate and is misled by outside trade union leaders who have their own axe
to grind. Better workers’ education can be a solution to this problem. This alone can
provide worker with a proper sense of responsibility, which they owe to the
organization in particular, and to the community in general.

9. Nature of industry: - In those industries where the costs constitute a major proportion
of the total cast, lowering down the labour costs become important when the product is
not a necessity and therefore, there is a little possibility to pass additional costs on to
consumer. Such periods, level of employment and wages rise in decline in employment
and wages. This makes workers unhappy and destroys good industrial relations.
 INDUSTRIAL DISPUTE ACT,1947

 The Industrial Disputes Act, 1947 came into existence in April 1947. It was enacted to
make provisions for investigation and settlement of industrial disputes and for providing
certain safeguards to the workers.

 "INDUSTRIAL DISPUTE" means any dispute between employers and employers, or

between employers and workmen, or between workmen and workmen, which is
connected with the employment or non-employment or the terms of employment or with
the conditions of labour, of any person.

 Indian trade disputes act, 1929 was the first legislation in India for the settlement of
industrial disputes. Initially, the act was made to remain in force for 5 years. In 1932
certain amendments were carried out in the act in 1934, in consultation with the
provincial governments, the central governments made the act to remain in permanent
force. This act, inter alia, provided for the settlement of disputes by appointment of
‘court of inquiry’ and ‘board of conciliation’ upon an application to the government by
any party in disputes. The illegal strikes were banned under the act.

 In 1938, Bombay industrial development act was enacted. Under this act, an inquiry was
made compulsory before declaration of strikes or lock-outs. This was made, In fact, to
ensure uninterrupted working of industries Subsequently, after the outbreak of world
war-2, defiance India rule( DIR ) was enforced In 1939. under section 81a of DIR,
strikes and lock-outs were banned in the public utility services. In other establishments,
prior notice was compulsory for strikes or lock-out.
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