UNIT-3

Industrial relation and International practices in Industrial relation

A number of human resources best practices can help you develop a productive and
collegial relationship between management and organized labor. Up-to-date information
about labor laws, leadership training on basic industrial relations practices and well-
constructed negotiation strategy are elements that will improve your organization’s
labor-management relations. Turn what traditionally has been an adversarial
relationship into one that benefits your company and employees.
Labor Laws
Fundamental to the labor-management relationship is clarity about applicable laws,
such as the National Labor Relations Act. The act establishes employees’ rights and
sets out the obligations and responsibilities of employers and labor unions. In addition to
understanding basic labor law, HR best practices include staying abreast of changes in
the laws and decisions of the National Labor Relations Board that affect your industry
and your workplace.
Leadership Training
Much of leadership training covers how to assign work and provide feedback about
performance and basic employment law, such as Title VII of the Civil Rights Act and
preventing workplace harassment. Supplement your supervisory training with labor-
management-related components, such as union contract interpretation, conflict
resolution and, if your workforce isn’t unionized, how to maintain a union-free
workplace. Supervisors and managers have the most direct contact with workers, and
workforce management principles suggest that HR equip them with the skills necessary
to be first responders concerning labor-management issues.
Collective Bargaining
HR best practices in collective bargaining include developing management strategy and
proposals for contract negotiation at least six months before the contract expiration
date. Assess the negotiating team’s workload and reassign long-term projects that could
interfere with their availability for bargaining sessions. The NLRA requires that both
management and the union make themselves available for contract negotiations, as that
demonstrates good faith. If you anticipate changes in your employee benefits package,
get clarification from your compensation and benefits specialist on how the group health
plan, pension and other benefits will affect negotiations.
Resources
Take advantage of resources available to HR staff, supervisors and managers.
Continuing education courses, workshops and seminars on building relationships with
labor union representatives generally are sponsored by law firms, management
consulting groups and colleges. Use social media and Internet research to learn about
union-organizing drives, including the occupations and industries that labor unions are
targeting.
Union-Free Workplace
If your employees aren’t union workers, improve your employee relations practices.
Strengthen the employer-employee relationship by addressing workplace issues as
soon as possible to avoid the lingering effects of conflict that often lead employees to
seek unionization. Conduct routine vulnerability assessments to determine the likelihood
of your employees supporting a union. Vigilance pays off — showing interest in and
appreciation for your employees keeps job satisfaction high so they won’t seek union
representation.
Grievance Handling
HR management should address union grievances as soon as they arise. When a union
employee feels that he has been unjustly reprimanded or terminated, he can file a
grievance. The HR manager or a labor relations specialist is responsible for processing
a union-employee grievance, which usually is a three-step process. The process
includes a union steward who represents the employee’s interests. If the matter isn’t
resolved within the allotted three steps, the case goes to arbitration. The arbitration
process can be as lengthy and costly as litigation, both being processes that HR
management would like to avoid whenever possible.
Shifts in IHRM and IR
 International strategic human resource management
SHRM: Definition, Need and Importance
Strategic human resource management or SHRM is a branch of HRM. It emerged
from the discipline of human resource management and is a fairly new field. Strategic
HRM is defined as “the linking of human resources with strategic goals and objectives in
order to improve business performance and develop organizational culture that foster
innovation and competitive advantage.” SHRM in an organization means “to accept and
involve the functions of HR as a strategic partner in formulating and implementing the
company’s strategies through human resource activities which may involve recruiting,
selecting, rewarding and training company personnel. In spite of the similarity in names,
HRM and SHRM are two different practices; SHRM is basically a part of the complete
HRM process. Besides that SHRM focuses more on long-term objectives rather than
the in-house objectives with employees dealt by HRM. In the late 1980’s writers started
stating strong opinions for a much more strategic approach to managing people than
was the standard practice of that time. They clamored for the change of traditional
management practices of industrial relations and people to the modern more improved
ones.
The center point of SHRM is to address and solve problems that effect management
programs centering on people in the long run and more than often globally. We can say
that the main goal or objective of SHRM is to increase productivity not only in the
employees but in the business overall, it achieves this by focusing on business
problems and obstacles outside of the human resources range. SHRM identifies
important human resource areas where strategies can be implied for the improvement
of productivity and employee motivation. To achieve good results communication
between human resource and top management of the organization is of utmost
importance as cooperation is not possible without active participation.
KEY FEATURES OF SHRM
The key features of strategic human resource management are given below:
 Some organizing strategies or schemes link individual human resource
interventions so that they are ‘mutually supportive’
 A great amount of responsibility is transferred down the line for the management
of HR
 There is a precise link between overall organization strategy, organization
environment, HR policies and practices.
DEVELOPMENT IN SHRM
In recent times HRM professionals have been facing challenges with employee
participation, performance management, employee reward systems, high commitment
work systems and human resource flow because of globalization. Traditional models
and techniques have no place in today’s business world; also local companies which go
global cannot use the same tactics in the global business world. Top managements and
HR professionals that are involved in strategic human resource management face a
wide range of issues which include some of the following:
 Rapid change in technology
 Introduction of new concepts of general management
 Globalization of market integration
 Increased competition, which may not necessarily be local
 Resultant corporate climates
 Constantly changing ownership
International labour Standards
International labour law is the body of rules spanning public and private international law
which concern the rights and duties of employees, employers, trade unions and
governments in regulating the workplace. The International Labour Organization and the
World Trade Organization have been the main international bodies involved in reforming
labour markets. The International Monetary Fund and the World Bank have indirectly
driven changes in labour policy by demanding structural adjustment conditions for
receiving loans or grants. Issues regarding Conflict of laws arise, determined by national
courts, when people work in more than one country, and supra-national bodies,
particularly in the law of the European Union, has a growing body of rules regarding
labour rights.
International labour standards refer to conventions agreed upon by international actors,
resulting from a series of value judgments, set forth to protect basic worker rights,
enhance workers’ job security, and improve their terms of employment on a global
scale. The intent of such standards, then, is to establish a worldwide minimum level of
protection from inhumane labour practices through the adoption and implementation of
said measures. From a theoretical standpoint, it has been maintained, on ethical
grounds, that there are certain basic human rights that are universal to humankind.
Thus, it is the aim of international labour standards to ensure the provision of such
rights in the workplace, such as against workplace aggression, bullying, discrimination
and gender inequality on the other hands for working diversity, workplace democracy
and empowerment.
While the existence of international labour standards does not necessarily imply
implementation or enforcement mechanisms, most real world cases have utilised formal
treaties and agreements stemming from international institutions. The primary
international agency charged with developing working standards is the International
Labour Organization (ILO). Established in 1919, the ILO advocates international
standards as essential for the eradication of labour conditions involving “injustice,
hardship and privation”. According to the ILO, international labour standards contribute
to the possibility of lasting peace, help to mitigate potentially adverse effects of
international market competition and help the progress of international development.
Implementation, however, is not limited to the ILO nor is it constrained to the legislative
model that the ILO represents. Other alternatives include direct trade sanctions,
multilateral enforcement, and voluntary standards. In addition to controversies that arise
over each of these models, greater issues have also been raised concerning the debate
over the need for international labour standards themselves. However, while critics have
arisen, the international community has largely come to a consensus in favour of basic
protection of the world’s labour force from inhumane practices.
Associated with the development of successful international labour standards is proper
monitoring and enforcement of labour standards. Most monitoring occurs through the
ILO, but domestic agencies and other NGOs also play a role in the successful
monitoring of international labour standards.
Objective of ILO
 Formulation of international policies and programmes to promote basic human
rights, improve working and living conditions, and enhance employment opportunities;
 Creation of international labour standards in the form of Conventions and
Recommendations, backed by a unique system to supervise their application;
 An extensive programme of international technical cooperation.
 Training, education, research, and publishing activities to help advance all of
these efforts.
 To promote and realize standards and fundamental principles and rights at work;
 To create greater opportunities for women and men to secure decent
employment;
 To enhance the coverage and effectiveness of social protection for all.
STRUCTURE OF ILO
Some of the most important organisational structure of ILO are as follows:
1. International Labour Conference (ILC)
2. Governing Body
3. International Labour Office (ILO).
(1) INTERNATIONAL LABOUR CONFERENCE (ILC)
This is the Apex body of ILO which makes labour policies for international labour. The
ILC holds its sessions at a frequency not less than once in a year. The delegates from
three group’s viz. the government, the employers’ and the workers attend ILC sessions
in the ratio of 2:1:1 respectively. Each representative has a vote. The representatives
from the Government are mostly ministers, diplomats or officials.
The conference is empowered to appoint committees to deal with different matters
relating to labour during each session. Examples of such committees are the selection
committee, The Credential Committee, The Resolution Committee, The Drafting
Committee, The Finance Committee, etc. All committees except Finance Committee are
tripartite in nature.
The functions performed by the ILC are to:
1. Formulate international labour standards.
2. Fix the amount of contribution to be paid by the member states.
3. Decide budget and submit the same to the Governing Body.
4. Study the labour problems submitted by the Director General and assist in their
solutions.
5. Appoint committees to deal with different problems during its sessions.
6. Elect the president.
7. Select members of the Governing Body.
8. Develop policies and procedures.
9. Seek advisory opinion from International Committee of Justice.
 Confirm the powers, functions and procedure of Regional Conference.
(2) GOVERNING BODY
It is also a tripartite body. It implements decisions of the ILC with the help of the
International Labour Organization. It consists of 56 members in the same ratio of 2:1:1,
i.e. 28 representatives of the Government, 14 of the employers and 14 of the workers.
Of the 28 representatives of the Government, 10 are appointed by the members of the
States of Chief Industrial Importance and remaining 18 are delegates of the other
governments.
 Industrial population is the criteria for chief Industrial Importance. India is one of the ten
states of chief Industrial Importance. The tenure of the office of this body is 3 years. It
meets frequently in a year to take decisions on the programmes of the ILO.
The functions of the Governing Body are to:
1. Co-ordinate work between the ILC and ILO.
2. Prepare agenda for each session of the ILC.
3. Appoint the Director General of the office.
4. Scrutinize the budget.
5. Follow up with member states in regard to implementation of the conventions and
recommendations adopted by the ILC.
6. Fix the date, duration, schedule and agenda for the Regional Conferences
7. Seek as and when required, advisory opinion from the International Court of
Justice with the consent of the ILC.
(3) International Labour Office:
This is the secretariat of the ILO in Geneva and is the third major organ of the ILO. The
Director General (DG) of the ILO is the Chief Executive Officer of the Secretariat
appointed by the Governing Body. He also serves as the Secretary General of the ILC.
His tenure is for 10 years and extendable by the Governing Body.
The Director General is assisted by two Deputy Director Generals, six Assistant Director
Generals, one Director of the International Institute of Labour Studies, and one Director
of the International Centre for Advanced Technical and Vocational Training, Advisors,
Chief of Divisions from 100 nations.
Following are the main functions of this office:
1. Prepare briefs and documents for agenda of ILC.
2. Assist the Governments of the States to form labour legislation based on
recommendations of the ILC.
3. Bring out publications relating to industrial labour problems of international nature
and interest.
4. Carry out functions related to the observance of the conventions.
5. Collect and distribute information on international labour and social problems.
6. To promote and realize standards and fundamental principles and rights at work;
THE ROLE OF THE ILO
The mission of the International Labour Organization (ILO) is to promote social justice
and internationally recognized human and labour rights, based on the founding principle
that social justice is essential to universal and lasting peace.
Decent Work Agenda
As part of its mission, the ILO aims to achieve decent work for all by promoting social
dialogue, social protection and employment creation, as well as respect for international
labour standards. The ILO provides technical support to more than 100 countries to help
achieve these aims, with the support of development partners.
1 Comment
International labour standards
The ILO sets international labour standards with Conventions, which are ratified by
member states, or Recommendations, which are non-binding.
 Conventions are drawn up with input from governments, workers’ and employers’
groups at the ILO. Conventions are adopted by the International Labour Conference,
which meets every year in Geneva.
The ILO’s supervisory role
The ILO monitors the implementation of ILO Conventions ratified by member states.
This is done through:
 The Committee of Experts on the Application of Conventions and
Recommendations
 The International Labour Conference’s Tripartite Committee on the Application of
Conventions and Recommendations
 Member states are also required to send reports on the progress of the
implementation of the Conventions they have ratified.
ILO Declaration on Fundamental Principles and Rights at Work          
Adopted in 1998, the Declaration commits member states to respect and promote eight
fundamental principles and rights in four categories, whether or not they have ratified
the relevant Conventions.
They are:
 Freedom of association and the right to collective bargaining (Conventions 87
and 98)
 The elimination of forced or compulsory labour (No. 29 and No. 105)
 The abolition of child labour (Conventions No. 138 and No. 182)
 The elimination of discrimination in respect of employment and occupation 
Global Unions
 Regional integration and Framework Agreements
Regional Integration is a process in which neighboring states enter into an agreement in
order to upgrade cooperation through common institutions and rules. The objectives of
the agreement could range from economic to political to environmental, although it has
typically taken the form of a political economy initiative where commercial interests are
the focus for achieving broader socio-political and security objectives, as defined by
national governments. Regional integration has been organized either via supranational
institutional structures or through intergovernmental decision-making, or a combination
of both.
Past efforts at regional integration have often focused on removing barriers to free trade
in the region, increasing the free movement of people, labour, goods, and capital across
national borders, reducing the possibility of regional armed conflict (for example,
through Confidence and Security-Building Measures), and adopting cohesive regional
stances on policy issues, such as the environment, climate change and migration.
Intra-regional trade refers to trade which focuses on economic exchange primarily
between countries of the same region or economic zone. In recent years countries
within economic-trade regimes such as ASEAN in Southeast Asia for example have
increased the level of trade and commodity exchange between themselves which
reduces the inflation and tariff barriers associated with foreign markets resulting in
growing prosperity.
Regional integration has been defined as the process through which independent
national states “voluntarily mingle, merge and mix with their neighbors so as to lose the
factual attributes of sovereignty while acquiring new techniques for resolving conflicts
among themselves.” De Lombaerde and Van Langenhove describe it as a worldwide
phenomenon of territorial systems that increases the interactions between their
components and creates new forms of organization, co-existing with traditional forms of
state-led organization at the national level. Some scholars see regional integration
simply as the process by which states within a particular region increase their level
interaction with regard to economic, security, political, or social and cultural issues.
In short, regional integration is the joining of individual states within a region into a
larger whole. The degree of integration depends upon the willingness and commitment
of independent sovereign states to share their sovereignty. The deep integration that
focuses on regulating the business environment in a more general sense is faced with
many difficulties.
Regional integration initiatives, according to Van Langenhove, should fulfill at least eight
important functions:
 The strengthening of trade integration in the region
 The creation of an appropriate enabling environment for private sector
development
 The development of infrastructure programmes in support of economic growth
and regional integration
 The development of strong public sector institutions and good governance
 The reduction of social exclusion and the development of an inclusive civil
society contribution to peace and security in the region
 The building of environment programmes at the regional level
 The strengthening of the region’s interaction with other regions of the world.
The crisis of the post-war order led to the emergence of a new global political structure.
This new global political structure made obsolete the classical Westphalian concept of a
system of sovereign states to conceptualize world politics. The concept of sovereignty
became looser and the old legal definitions of the ultimate and fully autonomous power
of a nation-state are no longer meaningful. Sovereignty, which gained meaning as an
affirmation of cultural identity, has lost meaning as power over the economy. All regional
integration projects during the Cold War were built on the Westphalian state system and
were designed to serve economic growth as well as security motives in their assistance
to state building goals. Regional integration and globalization are two phenomena that
have challenged the pre-existing global order based upon sovereign states since the
beginning of the twenty-first century. The two processes deeply affect the stability of the
Westphalian state system, thus contributing to both disorder and a new global order.
Regional integration agreements
Regional integration agreements (RIAs) have led to major developments in international
relations between and among many countries, specifically increases in international
trade and investment and in the formation of regional trading blocs. As fundamental to
the multi-faceted process of globalization, regional integration has been a major
development in the international relations of recent years. As such, Regional Integration
Agreements has gained high importance. Not only are almost all the industrial nations
part of such agreements, but also a huge number of developing nations too are a part of
at least one, and in cases, more than one such agreement.
The amount of trade that takes place within the scope of such agreements is about
35%, which accounts to more than one-third of the trade in the world. The main
objective of these agreements is to reduce trade barriers among those nations
concerned, but the structure may vary from one agreement to another. The removal of
the trade barriers or liberalization of many economies has had multiple impacts, in some
cases increasing Gross domestic product (GDP), but also resulting in greater global
inequality, concentration of wealth and an increasing frequency and intensity of
economic crises.
The number of agreements agreed under the rules of the GATT and the WTO and
signed in each year has dramatically increased since the 1990s. There were 194
agreements ratified in 1999 and it contained 94 agreements form the early 1990s.
The last few years have experienced huge qualitative as well as quantitative changes in
the agreements related to the Regional Integration Scheme. The top three major
changes were the following:
 Deep Integration Recognition
 Closed regionalism to open model
 Advent of trade blocs
Recent regional integration
Regional integration in Europe was consolidated in the Treaty on the European Union
(the Maastricht Treaty), which came into force in November 1993 and established the
European Union. The European Free Trade Association is a free trade bloc of four
countries (Iceland, Liechtenstein, Switzerland and Norway) which operates in parallel
and is linked to the European Union. In January 1994, the North American Free Trade
Agreement was formed when Mexico acceded to a prior-existing bilateral free trade
agreement between the US and Canada. In The Pacific there was the ASEAN Free
Trade Area (AFTA) in 1993 which looked into reducing the tariffs. The AFTA started in
full swing in 2000.

Alternative Regional Integration

In the last decade regional integration has accelerated and deepened around the world,
in Latin America and North America, Europe, Africa, and Asia, with the formation of new
alliances and trading blocks. However, critics of the forms this integration has taken
have consistently pointed out that the forms of regional integration promoted have often
been neoliberal in character, in line with the motives and values of the World Trade
Organization, the International Monetary Fund and the World Bank – promoting financial
deregulation, the removal of barriers to capital and global corporations, their owners and
investors; focusing on industrialisation, boosting global trade volumes and increasing
GDP. This has been accompanied by a stark increase in global inequality, growing
environmental problems as a result of industrial development, the displacement of
formerly rural communities, ever-expanding urban slums, rising unemployment and the
dismantling of social and environmental protections. Global financial deregulation has
also contributed to the increasing frequency and severity of economic crises, while
Governments have increasingly lost the sovereignty to take action to protect and foster
weakened economies, as they are held to the rules of free trade implemented by the
WTO and IMF.
Advocates of alternative regional integration argue strongly that the solutions to global
crises (financial, economic, environmental, climate, energy, health, food, social, etc.)
must involve regional solutions and regional integration, since they transcend national
borders and territories, and require the cooperation of different peoples across
geography. However, they propose alternatives to the dominant forms of neoliberal
integration, which attends primarily to the needs of transnational corporations and
investors. Renowned economist, Harvard professor, former senior vice president and
chief economist of the World Bank, Joseph Stiglitz has also argued strongly against
neoliberal globalisation. Stiglitz argues that the deregulation, free trade, and social
spending cuts or austerity policies of neoliberal economics have actually created and
worsened global crises. In his 2002 book Globalization and Its Discontents he explains
how the industrialized economies of the US, Europe, Japan, South Korea and Taiwan
developed not with the neoliberal policies promoted in developing countries and the
global South by the WTO, IMF and World Bank, but rather with a careful mix of
protection, regulation, social support and intervention from national governments in the
market.