NMBA HR 02: INDUSTRIAL RELATIONS AND LABOUR ENACTMENTS

UNIT I
Overview of Industrial Relations: Concept of Industrial Relations; Nature of Industrial Relations;
Objectives of IR; Evolution of IR in India ; Role of State; Trade Union; Employers’ Organization; ILO in
IR.

UNIT II
Trade Unionism: Trade Union: origin and growth, unions after independence, unions in the era of
Liberalization; concept, objectives, functions and role of Trade Unions in collective bargaining; problems
ofTrade Unions.

UNIT III
Labourproblems: Discipline and misconduct; Grievance Handling Procedure; Labour turnover;
Absenteeism;Workers’ participation in management.

UNIT IV
Technological Change in IR-Employment issues, Management Strategy, Trade Union Response,
HumanResource Management and IR- Management Approaches, Integrative Approaches to HRM;
InternationalDimensions of IR.

UNIT V
Labour Legislations: Industrial Dispute Act, Factories Act, Payment of Wages Act, Workmen’s
Compensation
Act. Important Provisions of Employees’ State Insurance Act, Payment of Gratuity Act, Employees
Provident
Fund Act.

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UNIT I
Overview of Industrial Relations: Concept of Industrial Relations; Nature of Industrial Relations;
Objectivesof IR; Evolution of IR in India ; Role of State; Trade Union; Employers’ Organization;
ILO in IR.

Overview
The relationship between Employer and employee or trade unions is called Industrial Relation.
Harmonious relationship is necessary for both employers and employees to safeguard the interests of the
both the parties of the production. In order to maintain good relationship with the employees, the main
functions of every organization should avoid any dispute with them or settle it as early as possible so as to
ensure industrial peace and higher productivity. Personnel management is mainly concerned with the
human relation in industry because the main theme of personnel management is to get the work done by
the human power and it fails in its objectives if good industrial relation is maintained. In other words
good Industrial Relation means industrial peace which is necessary for better and higher productions.

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Evolution of Industrial Relations:

The evolution of industrial relations in India began a long time ago. The caste system greatly influenced
the ancient industries and their development. Due to successive foreign invasions in India, the living
conditions of slave and artesian couldn't be differentiated. Furthermore, under the autocratic regime of
Muslim rulers, the conditions of employees worsened. Wages were not guaranteed, the living conditions
of workers were harsh, and there was no proper management. The coming of the British didn't improve
the working conditions. After some time, however, most Indian industries were modeled after the
British system of business, and this led to growth in various sectors.

Industrial Relations under British Rule:

During British rule, India was expected to be a colonial market for British goods up until a cotton mill
was established in Mumbai in 1853 and a jute mill was established in Kolkatta in 1955. The working
conditions of workers, however, were still very harsh with low pay, and this gave rise to various
disputes involving the management and employees. On the other hand, Tata Iron and Steel industry was
also established in Jamshedpur in 1911. While there was great demand of iron and steel before and
during the First World War, the working conditions of workers hadn't improved. Hence, the Factories
Act of 1881 was established, and it granted workers certain rights.

Industrial Relations in First World War:

The First World War was an opportunity in disguise for local factories in India. Prices of virtually all
products went up and profits soared, however, wages of lower employees were still the same. There
were various strikes and disputes between management and employees. During this time, the
Workmen's Compensation Act (1923), the Trade Union Act (1926), and the Trade Disputes Act (1917)
were established. While the wages of employees remained the same, they were given a certain share of
profits made by their hiring industry. Strikes, however, were sometimes prohibited under the Emergency
Rules. The years following World War II involved the most workers' upheaval, and saw the
establishment of Industrial Employment Act (1946) and Industrial Disputes Act (1947).

Post-Independence Industrial Relations:

The post-independence era saw a developing relation between industry and labor. A conference called
the Industrial Truce Resolution took place in 1947, and foresaw the establishment of the Minimum
Wages Act, Factories Act, and Employees State Insurance Act in 1948. This ensured peace between
labor and industry. While industrial relations in India have evolved a long way, some features of the
early system still exist today. Modern industrial relations are dynamic, and may integrate industrial
policies of American and British businesses.

Role of State
Govt or state machinery regulates the relationship between workers’ organizations and employers’
organizations
It does it through: - Statutes and legislations,
- The judiciary- labor courts industrial tribunals
- An executive machinery- that lays down rules, procedures and gives awards and monitors them

Trade Union
Trade unions are formed to protect and promote the interests of their members. Their primary function is
to protect the interests of workers against discrimination and unfair labor practices.
"Trade Union" means any combination, whether temporary or permanent, formed primarily for the
purpose of regulating the relations between workmen and employers or between workmen and workmen,
or between employers and employers, or for imposing restrictive conditions on the conduct of any trade
or business

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Trade union performs various roles regarding the various classes of the society as follows:
A. Role towards the trade union member.
B. Role toward the industrial organization.
C. Role towards the Trade Union organization.
D. Role toward society.

A. To make the workers aware about their rights and duties, settle the disputes through negotiation.
To guarantee a fair deal and social justice to workers.
 To ensure health, safe, protect conducive work condition.
To safeguard the workers conditions and parties, education, housing, co-operative

B. Maintain harmonic relationship between workers and management

To create opportunities for workers participation in management and to facilitate communication with
management.
 To help in maintenance of discipline
 To promote of interest

C. To improve financial position and improve workers network of commercial between union& its
members.
To train members to assume leadership position.
 To manage the Trade union organization on scientific lines
 To maintain strengthen, necessary records, resolve the problem.

D. To enable unorganized sector to organize itself.

 To actively participate in the development of the programs of national development such as family
planning, fore situation effective implementation apply cooperation etc.

Employers’ Organization
Organization of employers generally from the same industry working together for the interests of all
member companies on tasks like trade union negotiation, sharing information and advice, and
approaching other companies.

Role of Employers Organisation

Promote and protect of the interest of employers engaged in Industry, Trade and Commerce.
Advice offering
Bridge between Union Governments
Train and develop staff members of concern members of Associations

Examples of Employer’s Organizations:

ASSOCHAM- Associated Chamber of Commerce (1920)
FICC- Federation of Indian Chamber of Commerce (1927)
IOE- International Organization of Employers (1920)

ILO in IR.
( ILO ) is a specialized agency of the United Nations that deals with labour issues pertaining to
international labour standards.
Its headquarters are in Geneva, Switzerland.
The ILO is the international organization responsible for drawing up and overseeing international labour
standards.

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Mission & Objectives:
The main aims of the ILO are:
to promote rights at work,
encourage decent employment opportunities,
enhance social protection and
strengthen dialogue on work-related issues.

ILO- Evolution:
ILO was formed on April 19, 1919 by Versailles Peace Conference.
1944 - adoption of the Declaration of Philadelphia the ILO Conference re-stated and expanded its goals
Only international organization survived after II World War even after dissolution of its parent body the
League of Nations.
1969 - ILO was awarded the Nobel Peace Prize
1998 - ILO adopted the Declaration on Fundamental Principles and Rights at Work and its Follow-up

The Declaration of Philadelphia:

It includes the following principles:
Labour is not a commodity
Freedom of expression and association are essential for sustained progress
Poverty threatens prosperity everywhere

How the ILO Works?

The ILO has a tripartite structure.
The “social partners” – governments, employers and workers – shape the policies and programmes of the
organization
It promotes “social dialogue” between the partners on social and economic issues
175 countries are members of the ILO

Three constituents:
ILO is a tripartite body consisted of
Governments who finance it
Workers, who are for it is
Employers who share responsibility of worker’s welfare

The three organs of the ILO are:

1. International Labour Conferences: General Assembly of the ILO – Meets every year in the month
of June.
2. Governing Body: Executive Council of the ILO. Meets three times in a year in the months of
March, June and November.
3. International Labour Office: A permanent secretariat.
How the ILO Works?:
International Labour Conference: meets annually to set minimum international labour standards and the
Organization’s policies.
Each member country sends 4 delegates: 2government 1 employer 1worker
Governing Body: Governing body is composed of 28 government representatives, 14 workers'
representatives, and 14 employers' representatives. Ten of the government seats are held by member
states. The terms of office are three years.

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International Labour Office: The International Labour Office Headquartes is based in Geneva. ILO
regional and field offices in more than 40 countries .International Training Centre is in Turin.

ILO Strategic Objectives:

Four principal strategic objectives:
1. Standards and fundamental principles and rights at work
2. Decent employment
3. Social protection for all
4. Strengthen tripartism and social dialogue

International labour standards - ILO conventions:

Setting up of International Labour Standards in the form of Conventions and Recommendations.
Conventions are international treaties and are instruments, which create legally binding obligations on the
countries that ratify them. Recommendations are non-binding and set out guidelines orienting national
policies and actions.

Core ILO conventions:

1. Forced Labour (1930)
2. Abolition of Forced Labour (1957)
3. Freedom of Association and the Protection of the Right to organize (1948)
4. Right to organize and collective bargaining (1949)

Note: Above four conventions were ratified by India

5. Minimum Age Convention (1973)

6. Worst Forms of Child Labour (1999)
7. Equal Remuneration (1951)
8. Anti-discrimination - Employment and Occupation(1958)
Yet to be ratified by India

Issues of Concern:
1. Active partnership policy & multi-disciplinary team
 The multi-disciplinary team for South-Asia is based in New Delhi.
 It consists of specialists on employment, industrial relations, workers and employers’ activity,
small-scale enterprises and International Labor Standards.
2. Child Labor Legislations
 In India, within a framework of the Child Labor (Prohibition and Regulations) Act, 1986 and
through the National Policy on Child Labor, ILO has funded the preparation of certain local and
industry specific projects.
 In two projects, viz. Child Labor Action and Support Programmes (CLASP) and International
Programme on Elimination of Child Labor (IPEC), the ILO is playing a vital role.

The effect of ILO on Labor legislation in India:

Enactment of a number of legislations beginning from the year 1881. These include:

The Factories Act (1881)

Workmen’s Compensation Act (1923)
Trade Unions Act (1926),

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Trade Disputes Act (1929)
Payment of Wages Act (1936)
Maternity Benefit Act (1939)
The Mines Act (1923)
The Industrial Dispute Act (1926)

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UNIT II
Trade Unionism: Trade Union: origin and growth, unions after independence, unions in the era of
Liberalization; concept, objectives, functions and role of Trade Unions in collective bargaining;
problems of Trade Unions.

Trade Union

According to Webb's;
A trade union is “a continuous association of wage-earners for the purpose of maintaining or improving
the condition of their working lives”.
A trade union as “a continuous association of wage-earners or salaried employees for maintaining the
conditions of their working lives and ensuring them a better and healthier status in industry as well as
in the society”.

Origin & Growth Of Trade Union Movement:

Union oriented, mainly in Great Britain the U.S.A in the late 18thand early 19thcenturies, as, associations
of workers using the same skill. There is no connection between trade unions and medieval craft guilds,
for the latter were composed of master craftsmen who owned capital and often employer several workers.
The early unions were formed a partly as social clubs but soon became increasingly concerned with
improving wages and working conditions, primarily by the device of collective bargaining. Progressing
from trade to trade within the same city or area, the clubs formed local associations which, because they
carried on their main activities on a purely local level, were almost self-sufficient. With industrial
development, however, local associations sooner or later followed the expansion of production beyond
the local market and developed into national unions of the same trade. These in turn formed national
union federations.
 Industrialization brought about new economic and social order in societies. TU emerged as a
result of industrialization in new social order
 First workers’ union in India under the leadership of Mr. Lokhande was developed in 1890
 Beginning of labor movement in the modern sense started after the outbreak of World War I
 Economic. Political and social conditions influenced the growth of trade union movement in India.
 Establishment of ILO helped the formation of TUs in the country
 In 1920 AITUC( All India Trade Union Congress) was formed- the 1 st All India trade union
 World War II brought splits in AITUC. Efforts of Indian National Congress resulted in the
formation of INTUC( Indian National Trade Union Congress)
 Socialists separated from AITUC formed HMS( Hind MazdoorSabha) in 1948
 Some other unions were also formed. They were BMS ( BhartiyaMajdoorSangh) in1955, HMP(
Hind MajdoorPanchayat) in 1965, CITU( Centre of Indian Trade Union ) in 1970

Unions after independence

In the period 1918-47 the ideology inspiring trade union was nationalistic. But after independence, trade
union developed into an effective instrument for protecting and safeguarding the interest of the labourers.
The third phase began with the emergence of independent India (in 1947). The partition of country
affected the trade union movement particularly Bengal and Punjab. By 1949, four central trade union
organizations were functioning in the country:

1- The All India Trade Union Congress,

2- The Indian National Trade Union Congress,
3- The Hindu MazdoorSangh, and
4- The United Trade Union Congress

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The working class movement was also politicized along the lines of political parties. For instance Indian
national trade Union Congress (INTUC) is the trade union arm of the Congress Party. The AITUC is the
trade union arm of the Communist Party of India. Besides workers, white-collar employees, supervisors
and managers are also organized by the trade unions, as for example in the Banking, Insurance and
Petroleum industries.

Trade unions in India

The Indian workforce consists of 430 million workers, growing 2% annually. The Indian labor markets
consist of three sectors:
1. The rural workers, who constitute about 60 per cent of the workforce.
2. Organized sector, which employs 8 per cent of workforce, and
3. The urban informal sector (which includes the growing software industry and other services, not
included in the formal sector) which constitutes the rest 32 per cent of the workforce.

At present there are twelve Central Trade Union Organizations in India:

1. All India Trade Union Congress (AITUC)
2. BharatiyaMazdoorSangh (BMS)
3. Centre of Indian Trade Unions (CITU)
4. Hind MazdoorKisanPanchayat (HMKP)
5. Hind MazdoorSabha (HMS)
6. Indian Federation of Free Trade Unions (IFFTU)
7. Indian National Trade Union Congress (INTUC)
8. National Front of Indian Trade Unions (NFITU)
9. National Labor Organization (NLO)
10. Trade Unions Co-ordination Centre (TUCC)
11. United Trade Union Congress (UTUC) and
12. United Trade Union Congress - Lenin Sarani (UTUC - LS)

Factors affecting the progress of trade unionism are as follows: -

1- Constant inflow of international influence.

2- the pressure of trade union politics
3- government’s industrial policy
4- rapid industrial growth

Unions in the era of Liberalization

Before Liberalization:
Trade Union movement was divided according to ideologies after independence and regional parties
came to power in different states with each political party having its trade union wing. Power of unions
grew along with the number. Political parties found the unions a strong medium. For fear of losing power,
ruling parties heeded to the demands of the Trade Union. The situation continued till the declaration of
emergency by the late Prime Minister Mrs.Indra Gandhi. As a result, the management, especially in the
public sector became weak partner in IR. Strikes and indiscipline increased with loss of working days,
especially in the essential service sectors like hospitals, airways, railways and telecommunications and
postal services

After Liberalization:
Introduction of neo-liberal policies had created fear in the minds of people that technological changes
would reduce the number of labour-intensified jobs. Unions in public sector rejected the offer of
discussion and also threatened to boycott and opposed the implementation of various measures announced
by the government. Management adopted soft policies towards workers and their attitude towards unions

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is changed. Number of strikes and the workers involved in strikes has been reduced. National TU centers
seem to be losing their control over enterprise unions .Unions who earlier opposed to technological up
gradation have gradually agreed to the same in return for linking wages with productivity . All these
indicate that central unions are losing ground.

Concept

Originating in Europe, Labour unions became popular in many countries during the Industrial Revolution,
when the lack of skill necessary to perform the jobs shifted employment bargaining power almost
completely to the employers' side, causing many workers to be mistreated and underpaid. But, over the
years, the contractual relationship between the employer and the employee has undergone several
changes. Managerial indiscretions, whimsical actions and one-sided exploitative acts have no place in the
industrial relations scene today. A union is a legal entity consisting of employees or workers having a
common interest. It is formed for the purpose of collectively negotiating with employer(s) over wages,
working hours and other terms and conditions of employment. Unions also often use their organisational
strength to advocate for social policies and legislation favorable to their members or to workers ingeneral.
A trade union (or labour union) is an organisation of workers who have banded together to achieve
common goals in key areas (such as working conditions) and protecting and promoting their mutual
interests through collective action. The trade union, through its leadership, bargains with the employer or
the management on behalf of union members and negotiates labour contracts (viz. negotiation of wages,
work rules, complaint procedures, rules governing hiring, firing and promotion of workers, benefits,
workplace safety and policies) with them. This process is called “Collective Bargaining”

Objectives
1. Wages & salaries Policy matter but differences in implementation, so comes the role of trade union
2. Working conditions safeguarding workers health: Lighting & ventilation, sanitation, rest rooms,
safety equipments ( hazards free atmosphere , drinking water, refreshments, working hours, leave &
rest, holidays with pay, job satisfaction, social security benefits and other welfare measures
3. Discipline Protect workers from victimization by management- transfers, suspensions, dismissals etc
4. Personal policies Fighting against improper implementation of personnel policies w.r.t. recruitment,
selection, promotion, transfer, training etc.
5. Welfare Solving difficulties of workers through collective bargaining wrt sanitation, hospitals,
quarters, schools, colleges and other basic amenities
6. Employer- employee relations Bureaucratic attitude and unilateral thinking of mgmt may lead to
conflicts
7. Trade unions go for constant negotiations for industrial democracy and peace.
8. Negotiating machinery Based on ‘give and take principle’, negotiations continue till parties reach an
agreement. Protect interests of workers through collective bargaining
9. Safeguarding organizational health Methods evolved for grievance redressed, techniques adopted
to reduce absenteeism and labor turnover. Upgrading skills- attend training courses organized by
unions

Functions
The functions of trade union is classified into 5 categories

Protective or militant function:

These functions include protecting the workers’ interests , i.e., hike in wages, providing more benefits,
job security, raise the status of workers as a part of industry, protect labors against victimization and
injustice etc., through collective bargaining and direct action such as strikes, gheraos etc

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Extra-mural or Fraternal function:
These functions include providing financial and non financial assistance to workers during the period of
strikes and lockouts, extension of medical facilities during sickness and casualties, provision of education,
reaction, recreational and housing facilities, provision of social and religious benefits etc

Social function:
These functions include carrying out social service activities, discharging responsibilities through various
sections of the society like educating the customers

Political function:
These functions include affiliating a union to political party, helping the political party in enrolling
members, collecting donations, canvassing during election period, seeking the help of political parties
during the strike and lockouts

Ancillary function:
Ancillary functions of trade union include: Communication Welfare activities Education Research

Role of Trade Unions in collective bargaining

Collectivebargaining is a process of negotiations between employers and the representatives of a
unit of employees aimed at reaching agreements that regulate working conditions.
•During the collective bargaining process, workers are represented through trade unions. The proc
ess of collective bargain involves negotiation and discussion between the management and trade uni
on.

Role of Trade Unions

• Recognized trade unions have the legal right to bargain about pay, hours and holidays.
•
Most agreements by employers to recognize trade unions for collective bargaining are entirely voluntary.
• Employees and other workers have the right to be accompanied at a disciplinary or grievance hearing
• Informing and consulting
• Transfers of business ownership
• Occupational and personal pension schemes

Problems of Trade Unions

1. INDIA Outside or political leadership
2. Multiplicity of trade unions
3. Small size of unions
4. Low membership
5. Uneven growth
6. Poor financial position
7. Low level of knowledge of labor legislation
8. Fear of victimization

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UNIT III
Labour problems: Discipline and misconduct; Grievance Handling Procedure; Labour turnover;
Absenteeism; Workers’ participation in management.

Labour problems

Discipline and misconduct

Misconduct means violation of rules, disorderliness, insubordination and not following the rules and
regulations of an organization
Forms of misconduct
 Does not discharge his duties properly
 Dishonest
 Abusive and disturb the peace of others
 Unfaithful, corrupt and disloyal
 Fraud and bribery
 Does not obey orders
 Resorts to illegal strikes
 Cause willful damage to property

 Discipline is simply “good behavior”. A situation where there is no issue, disordered chaos,
confusion, disobedience, misconduct etc. It is the expected standard of behavior of employees,
which is required for an organisation to function in an orderly and legal manner.
 “The conduct, expected by the organization” ( Silva 1995)
 The term discipline refers to a condition in the organization when employees conduct themselves
in accordance with the organization’s rules and standards of acceptable behaviour. ( De Cenzo and
Robbins 1999)
 Discipline is about Expected Behavior standards

The word discipline is synonymous with the words: Regulation, order, control,restraint,obedience,
authority.

 The purpose of any disciplinary action is to prevent reoccurrence of the inappropriate

behavior/misconduct.
 The emphasis should be on the corrective action required to change the employee’s conduct and
giving the employee a reasonable opportunity to do so, not on punishing the employee.
 To regularize the behavior of the employees.
 Smooth and efficient functioning of an Organization,
 To preserve organizations rules and regulations which are made to achieve objectives.
 As a part of the “controlling” function in Management,
 For the health and safety of workers prevent accidents
 To build a mutual co-operation amongst workers.,
 To co-ordinate different departments of the Organisation

Employee Disciplinary Management (EDM)

“It is the systematic procedure of creating, promoting and maintaining employee discipline so that goals
and objectives of the Organization are accomplished”.

Positive and negative Approaches to Discipline

Positive Approach to Discipline:
 Not personal.
 Rejects the misconduct not the employee.
 To reform

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  Employees are bound to make mistake
 Way forward in HRM
Negative Approach to Discipline
 Personal.
 Rejects Employee not the misconduct.
 To take revenge
 Employees should not commit any mistake
 Way back wards in HRM

What is meant by Progressive Discipline?

Oral warning,
1st st warning,
2nd warning,
Final warning
2nd Final warning
Termination

An employer should generally take the following steps when considering disciplinary action for possible
misconduct or serious misconduct. The employee should also know their rights and obligations in this
process.

 Before taking action - before commencing a disciplinary process, the employer should assess
whether the particular concern or complaint is sufficiently robust and serious to require such a
process. It may be necessary for the employer to undertake some preliminary steps to make this
assessment (e.g. to read documents, or to speak briefly with someone who saw what happened or
the employee who might be disciplined). If the employer needs to speak with an employee who
could be disciplined later, then the employee needs to be told of this possibility and that what
he/she says could be relevant in any disciplinary process.
 Forewarning and information - if the employer decides to commence a disciplinary process, the
employer should provide the employee at the outset with all of the relevant information (e.g.
documents), the reasons why the employer is concerned, and the possible consequences the
employee is facing (e.g. a warning or dismissal). It could be procedurally unfair if, at the end of
the disciplinary process, the employer decides to take a type of disciplinary action that the
employee was not forewarned about.
 Preparing for a meeting - the employee should be invited to a meeting to provide a response. The
employee should have enough time before the meeting to consider the information provided and
to prepare his or her response and should be told that the response can be made orally or in
writing, or in both ways. The employee should also be told who is coming to the meeting, and
should be told of his or her right to bring a support person or representative with him/her.
 Listening and explaining - at the meeting, the employer should listen to the employee’s response
with an open mind. If the employer disagrees with the employee’s response, the employer should
say so, and should provide the reasons for that. This does not necessarily have to be done at the
meeting, but the employee needs to know what it is that the employer is thinking, so that he or she
has an opportunity to address that.
 Keeping a record - it may be helpful for both the employer and employee to keep a record of all
discussions, agreements and meetings held.
 If further investigation is needed - once the employer has the employee’s response, it may be
necessary to investigate further. The employee should be given an opportunity to comment on any
new information that comes out of that further investigation. It may be necessary to meet again to
do this.
 Decision - once the employer has all of the relevant information, the employer can decide
whether the employee has committed misconduct or serious misconduct.
 Considering action to take - the employer should then consider what action it should take, if
any. At this stage the employer should consider any matters that could be relevant to what action

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 it takes (e.g. long-serving employee with a clean record), possible alternatives to disciplinary
action, and any other appropriate assistance that might be provided to help prevent a recurrence
(e.g. training or supervision). The action may be a warning (see below). If the employee has not
had an opportunity to comment on the outcome (e.g. dismissal or disciplinary action) it might be
necessary to have another meeting to hear and consider what he/she has to say.
 Preliminary decision - in serious or complex situations, the employer could provide the employee
with a ‘preliminary decision’ (including details of any proposed disciplinary action), and to allow
the employee to comment on it before a final decision is made. The employer must consider the
employee’s comments with an open mind – that is, the employer must be prepared to listen to the
employee and consider what they have to say before making a final decision.
 Final decision - once the employer has reached a final decision, the employer should tell the
employee and provide reasons for the decision. This needs to be done in a respectful and sensible
way.
 Giving notice - if the decision is to dismiss, and there is no serious misconduct, the employee
should be given notice in accordance with his or her employment agreement. If the employee is to
be dismissed for serious misconduct, the employer does not have to give notice but may choose to
do so anyway.

Both sides are required throughout the process to cooperate with each other, to answer questions honestly
and openly, and to act in a respectful and sensible way. The employee has the right to have a
representative present to speak on his or her behalf.

Misconduct & Discipline: The Basics

Progressive Discipline
removal
reassignment
Adverse
grade reduction
Action
suspension >14 days

suspension of 14 days or less Formal

written reprimand Discipline

written counseling / warning

Informal
oral warning
Discipline
oral counseling

Grievance Handling Procedure

Grievance procedure is a formal communication between an employee and the management designed for
the settlement of a grievance. The grievance procedures differ from organization to organization.

1. Open door policy

2. Step-ladder policy

Open door policy: Under this policy, the aggrieved employee is free to meet the top executives of
the organization and get his grievances redressed. Such a policy works well only in small organizations.
However, in bigger organizations, top management executives are usually busy with other concerned

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matters of the company. Moreover, it is believed that open door policy is suitable for executives;
operational employees may feel shy to go to top management.

Step ladder policy: Under this policy, the aggrieved employee has to follow a step by step procedure for
getting his grievance redressed. In this procedure, whenever an employee is confronted with a grievance,
he presents his problem to his immediate supervisor. If the employee is not satisfied with superior’s
decision, then he discusses his grievance with the departmental head. The departmental head discusses the
problem with joint grievance committees to find a solution. However, if the committee also fails to
redress the grievance, then it may be referred to chief executive. If the chief executive also fails to redress
the grievance, then such a grievance is referred to voluntary arbitration where the award of arbitrator is
binding on both the parties.

Grievance Procedure In Indian Industry

The 15th session of Indian Labor Conference held in 1957 emphasized the need of an established
grievance procedure for the country which would be acceptable to unions as well as to management. In
the 16th session of Indian Labor Conference, a model for grievance procedure was drawn up. This model
helps in creation of grievance machinery. According to it, workers’ representatives are to be elected for a
department or their union is to nominate them. Management has to specify the persons in each department
who are to be approached first and the departmental heads who are supposed to be approached in the
second step.

The Model Grievance Procedure specifies the details of all the steps that are to be followed while
redressing grievances.
These steps are:
STEP 1: In the first step the grievance is to be submitted to departmental representative, who is a
representative of management. He has to give his answer within 48 hours.
STEP 2: If the departmental representative fails to provide a solution, the aggrieved employee can take
his grievance to head of the department, who has to give his decision within 3 days.
STEP 3: If the aggrieved employee is not satisfied with the decision of departmental head, he can take the
grievance to Grievance Committee. The Grievance Committee makes its recommendations to the
manager within 7 days in the form of a report. The final decision of the management on the report of
Grievance Committee must be communicated to the aggrieved employee within three days of the receipt
of report. An appeal for revision of final decision can be made by the worker if he is not satisfied with it.
The management must communicate its decision to the worker within 7 days.
STEP 4: If the grievance still remains unsettled, the case may be referred to voluntary arbitration.

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Labour turnover

The ratio of the number of employees that leave a company through attrition, dismissal, or resignation
during a period to the number of employees on payroll during the same period.

Types Of Labour Turnover

Accessions: Additions of new candidates to the existing employees

Separations: Termination of employment or Employee turnover which includes - Voluntary quitting or
resignations by employees Layoff or Lack of Work Disciplinary Lay-off or Discharge Retirement and
Deaths

Reason for labour turnover:

Avoidable Reasons: (low job satisfaction, low pay, risky or repetitive work etc.).
Unavoidable reasons: (death, retirement, accident, poor health etc.)

Methods Used To Estimate Turnover:

Every good organization prepares a report of labor turnover to refer and rectify the avoidable causes of
turnover. Below are methods used to estimate turnover:

Average No. = (No. of employees at start + No. of employees at end) / 2

1- Separation Method/Rate:
(Number of employees separated in a period / Average number of employees in the period ) * 100
2- Replacement Method/Rate:
(Number of employees replaced in a period / Average number of employees in the period) * 100
3- Flux Method/ Rate:
(No. of employees separated + No. of employees replaced) / Average number of employees in the period}
* 100

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Factors could be the cause of a high level of Labour Turnover:
 Dissatisfaction on account of insufficient wages leading to employees moving to competitors
 Low level of motivation from employers’ side and poor morale within the workforce in a specific
industry. Recruiting and misplacement of employees resulting in their mobility in search of suitable
employment.
 A floating local labour market offering better and more attractive opportunities to employees.

How to Reduce Labour Turnover

Following action may be taken to reduce labour turnover:
 Pay Problem – increasing pay scale & improving pay structure to remove inequities.
 Employees Learning to further their Career – providing better career opportunities& ensuring the job,
opportunities for training &development program, implement promotion
 Employees Leaving due to Conflict – more effective procedure for handling grievances
& improving communication, using resolution &teambuilding techniques, reorganization of work.
 The Induction Crisis – improving recruitment & selection process, ensure job requirement, developing
better induction & initial training program
 Shortage of Labour – improving recruitment, selection & training, introducing better method of
planning & scheduling work smooth out peak loads.

Absenteeism
In every organization an employee / worker has some definite working hours with certain responsibility
(work assigned)and if the worker is not present in their working hours that called absenteeism in the
organization.

Fillipo defines absenteeism as a condition that exists when a person fails to come to work when he is
properly scheduled to work.
According to Labour Bureau, Simla defines absenteeism as the failure of the worker to report for work
when he is scheduled to work.

We can say absenteeism signifies the absence of an employee from work, i.e. unauthorized, un-explained,
avoidable and willful.
As per above definition, following causes of absence cannot form part of absenteeism:
 Absence due to strike or lock-out
 Employee is laid-off
 Employee reports for duty in later half schedule
 Employee takes Casual leave, Earned leave, Medical leave.
 When name is is removed from list of active employees.

Absenteeism is calculated as: Number of persons-days lost X 100

Average number of persons X number of working days

Classification of Absenteeism
Kerr classified absenteeism in following categories:

 Total absenteeism: absenteeism of workers at given time who are scheduled to work but remain
absent for any reason whatsoever excluding lay-off and lock-out.
 Excused absenteeism: Absence of work due to bonafide cause, like self-illness or accident due to
employment.
 Un-excused absenteeism: Absence as a habit and not as necessity.
 Chronic absenteeism: Habit of remaining on un-excused absence and normally increases the rate
of absenteeism.

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Causes of Absenteeism
 Lack of interest.
 Absence of transport facility.
 Poor Control.
 Accidents.
 Absence of regular leave arrangement.
 Personal Factors -age, marital status, health, education, hobbies, extracurricular activities.
 Work Environment – working conditions, relation with coworkers & seniors and their attitude
 Home Conditions – distance from residence, mode of conveyance, family size, family problems &
responsibilities
 Economic Issues – subsidiary economic interests
 Regional Aspects – legislations, politics, geographical situations
 Organisational Features – type & size of company, work load, nature of work, shift
arrangements, management attitude, personnel policies, leave facilities and medical benefits
 Social Reasons – religion, community obligations, customs festivals, marriage and death
 Miscellaneous Causes

Effects of Absenteeism
 Normal work-flow is disturbed
 Loss of wages for unauthorized absence from work.
 Extra pressure on employees, who are present for the work, may disappoint them.
 Casual workers may have to employ to deliver orders in time.
 Difficulty is faced in executing the orders in time.

Measures to Control Absenteeism

 Employee counseling
 Effective supervision.
 Disciplinary actions.
 Incentive bonus for regular employees.
 Provision of transport and housing facility.
 Better working condition.
 Proper selection and proper orientation.

Workers’ participation in management

According to Keith Davis, 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.
Workers’ participation in management means giving scope for workers to influence the managerial
decision-making process at different levels by various forms in the organization.
“ It implies a situation where worker’s representatives are ,to some extent, involved in the process of
management decision making ,but where the ultimate power is in the hands of management.” ….. Ian
Clegg.

Objectives of Workers participation

 Aware of Democratic right to influence the managerial decisions
 Cross-fertilization and speedy communication of ideas
 Raise worker’ level of motivation and commitment (own decisions)
 Avoid conflict and foster better co-operation between labour and management.

Importance of Workers’ Participation in Management

 Mutual Understanding
 Higher Productivity

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  Industrial Harmony
 Industrial Democracy (right of self expression and opportunity to communicate views on policies,
worker as responsible partner in decision making)
 Less Resistance to change
 Creativity and Innovation

Workers Participation in Management in India

 Indirect Representative: introduced by govt through legal provisions or notifications.
E.g Works Committee, Joint Management Council &Worker’s director etc.
 Direct Participation: opportunity for each and every worker to participate in management through
variety of mechanisms like suggestion schemes, small group activity, quality circles etc.

Suggestion schemes: Under this method workers are invited and encouraged to offer suggestions for
improving the working of the enterprise.

Works committee: Under the Industrial Disputes Act, 1947, every establishment employing 100 or more
workers is required to constitute a works committee.
 It meets frequently for discussion on common problems of the workers and the management.
 After discussion, joint decisions are taken
 problems of day to day working

List of items WC can deal with

 Conditions of work such as ventilation, lighting, temperature and sanitation
 Amenities such as drinking water, canteen, dining ,crèches, rest rooms, medical and health rooms
services
 Safety and accident prevention, occupational diseases and protective equipment.
 Adjustment of festivals and national holidays.
 Administration of welfare funds.
 Educational and recreational such as libraries, reading rooms, cinema-shows, sports, games,
community welfare and celebrations, games,
 Implementation and review of decisions arrived at meeting of works committees
Items excluded
 Wages and allowances
 Bonus
 Profit sharing
 Work load fixation
 Retrenchment or layoff
 Housing services
 Retirement benefits, PF, gratuity etc.
Reasons for failure of WC
 Exclusion of imp items
 Lack of competence of representatives
 Inter union rivalry
 Recommendations are just advisory in nature
 No machinery to enforce the decision

Joint Management Councils: These councils were setup as early as 1958. These councils consist of
equal number of representatives of the employers and employees, not exceeding 12 at the plant level.

Features or Functions of JMC

1. Consultative Functions - council consulted by management on:
 Administration of standing orders

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  New methods of production
 Retrenchment
 Closure, reduction in or cessation of operation

1. Information –receiving and suggestion making functions:

 General economic situation.
 The state of market, production and sales programmes.
 Organisation and general running of the undertaking.
 The annual balance sheet and profit and loss account statement and connected documents with
explanations.
 Methods of manufacture and work
 Long term plan for expansion etc.

2. Administrative functions :
 Welfare measures
 Supervision of safety measures
 Operation of vocational training and apprenticeship schemes
 Preparation of schedules of working hours , breaks , holidays
 Payment of rewards for valuable suggestions

Reasons for unsatisfactory working or partial success

 Trade union fear of loosing power
 Weak representatives
 Employers who already have WC and TU find it superflous

Work directors:
Under this method, one or two representatives of workers are nominated or elected to the Board of
Directors.

Co-partnership:
Co-partnership involves employees’ participation in the share capital of a company in which they are
employed. By virtue of their being shareholders, they have the right to participate in the management of
the company

Worker Participation scheme (1975)

Shop Councils
 For each dept or shop floor, establishment having more than 500 workmen
 Each council consists of equal number of representatives of employers and workers.

Functions:
 Assistance to management in achieving monthly/yearly production targets
 Improvement of production-elimination of wastage and optimum utilization of resources
 Study of absenteeism in shops/dept and steps to reduce that
 Assistance in maintaining general discipline
 Physical conditions of working etc.
 Welfare and health measures
 Two way communication

Joint Councils
 Operate for industrial unit as a whole, more than 500 workmen
 The chief executive of the unit is the chairman of the JC

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  Meets at least once in quarter
 Decision on the basis of consensus

Functions:
 Optimum production
 Matters not solved in shop council or having bearing on another shop/dept
 Development of skills of workmen
 Awarding of rewards for valuable suggestions
 General health, safety and welfare measures for the unit or the plant

Direct participation
 Two way communication: more imp in knowledge workers
 Suggestion schemes
 5S concept : Japan for TQM-house keeping practices
 Shitseke: discipline- maintain and review standards
 Seiton : orderliness –set in order
 Seiketsu: standardization of work practices
 Seiri: clearing (sorting) – keep only essential items rest discarded
 Seiso: sweeping/washing, cleanliness of workplace

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UNIT IV
Technological Change in IR-Employment issues, Management Strategy, Trade Union Response,
Human Resource Management and IR- Management Approaches, Integrative Approaches to
HRM; International Dimensions of IR.

Technological Change in IR
 Technology is an instrument of development.
 Affects various aspects of economic and social life.
 Technological change is a continuous process which covers a series of
-Developments
-Mechanization
-Increase in mass production

Types of Technological Changes-

 Scientific Management or Time or Motion Studies
 Change in location of plants
 Shift in product demand
 Change in machinery
 Automation

Rationalization & Automation

These are different forms of Technological change (introduced in 1960)

Rationalization implies a basic change in the structure and control of industrial activities. Its techniques
can be applied to methods, material and men.
Advantages of Rationalization
-planned production
-pooling of research
-modernization productive process& sales
-scientific & technical know how
-optimum utilization of manpower
In Automation, technology itself controls the operations. The machine provides data from its operations
and feeds it back to its own controls which govern the production process.

Impact of Technological changes

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Positive Impact
Labour saving
Improves level of earnings
Higher productivity
Reduction in cost and increase inbenefits
Product standardization

Negative Impact
Impact on employment
Redundancy
Occupational Adjustment
Allocation of gains
Transfer & Retraining Problems
Resistance to change- Strikes, Absenteeism, resignations
etc.
Job Satisfaction
Worker & Union Relations
Changes in job content there by creating new jobs to replace
old ones
Fitting new jobs into the existing incentive scheme

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Employees Response to Technological changes
 Initial response of employees towards automation and rationalization was mixed with fear and
suspicion
 They were apprehensive about their jobs
 New technology has changed the concept of work.
 It relives the employees of the boredom of repetitive jobs
 It makes work easy and safe.
Employment issues are: business alliances, E-recruitment, Jobs become Intellectual

Management strategy- Corporate structuring, planning for change well in advance, Participation of
employees

Trade Union response-

 The Unions Attitude was:
 Fear of losing jobs, Fear of losing comfort in an organization
 Prevent the introduction of automation and rationalization
 Slow down the introduction of change
 Agree to cooperate in the change planned on certain conditions
 Expedite the change
The Responses are classified as: obstruction, competition and control

Human Resource Management and IR- Management Approaches & Integrative Approaches to HR

Industrial Relations and Human Resource Management has two strands: the theory and practice of relations
between employers, employees, unions and government; as well as the management of people within an
organization, including recruitment, selection, remuneration, appraisal, and training and development. This
is a professional major who includes a work experience program with placements in unions, employer
organizations, companies and government.

Human Resource Management Approach:

The term, human resource management (HRM) has become increasingly used in the literature of
personnel/industrial relations. The term has been applied to a diverse range of management strategies and,
indeed, sometimes used simply as a more modern, and therefore more acceptable, term for personnel or
industrial relations management.

Some of the components of HRM are (i) HR organisation (ii) HR planning (iii) HR systems (iv) HR
development (v) HR relationships (vi) HR utilisation (vii) HR accounting (viii) HR audit.

Unitary perspective:
 The organization is perceived as an integrated & harmonious whole with the ideal of “one happy
family ", where management & other members of the staff all share a common purpose, emphasizing
mutual cooperation.
 Has a paternalistic approach where it demands loyalty of all employees, being predominantly
managerial in its emphasis and application
 Trade unions are deemed as unnecessary since the loyalty between employees & organizations are
considered mutually exclusive, where there can't be two sides of industry. Conflict is perceived as
disruptive and the pathological result of agitators, interpersonal friction and communication
breakdown.

Pluralist perspective:

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  The organization is perceived as being made up of powerful & divergent sub-groups , each with its
own legitimate loyalties and with their own set of objectives and leaders.
 In particular, the two predominant sub-groups in the pluralistic perspective are the management and
trade unions.
 The role of management would lean less towards enforcing & controlling and more toward
persuasion and co-ordination.
 Trade unions are deemed as legitimate representatives of employees, conflict is dealt by collective
bargaining and is viewed not necessarily as a bad thing and, if managed, could in fact be channeled
towards evolution and positive change

Radical perspective:
 Here IR looks at the nature of the capitalist society, where there is a fundamental division of interest
between capital & labour, and sees workplace relations against this history.
 Inequalities of power & economic wealth as having their roots in the nature of the capitalist
economic system. Conflict is seen as inevitable
 Trade unions are a natural response of workers to their exploitation by capital.
 Whilst there may be periods of acquiescence, the Marxist view would be that institutions of joint
regulation would enhance rather than limit management's position as they presume the continuation
of capitalism rather than challenge it.

International Dimensions of IR.

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UNIT V
LabourLegislations: Industrial Dispute Act, Factories Act, Payment of Wages Act,
Workmen’sCompensationAct. Important Provisions of Employees’ State Insurance Act, Payment of
Gratuity Act, Employees Provident Fund Act.

LabourLegislations

The term `labour legislation’ is used to cover all the laws which have been enacted to deal with
“employment and non-employment” wages, working conditions, industrial relations, social security and
welfare of persons employed in industries.

Objectives of Labor Legislation

1. To protect the workers from profit seeking exploiters

2. To ensure that the service conditions should be clearly spelt out by the employer to theemployee
3. To improve and regulate the working conditions of workers employed in different factories and
establishments
4. To make statutory provision for the regular trainings of a certain number of apprentices indifferent
trades.
5. To ensure that the employees are paid their wages on fixed dates and there should be no deduction
made from the wages
6. To promote industrial relations and industrial peace between employers and employees.
7. To preserve the health, safety and welfare of workers.
8. To protect the interests of women and children working in the factories.
9. To maintain the dignity of employees in their organizations.

Labour Legislation in India:

In India, we have many labour laws that affect the labour conditions. The main laws are:
1. The Industrial Disputes Act, 19473
2. The Trade Unions Act, 1926
3. The Industrial Employment (Standing Orders ) Act, 1946
4. The Factories Act, 19487
5. The Minimum Wages Act, 1948
6. The Payment of Wages Act, 1936
7. The Payment of Bonus Act, 1965

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