CENTRAL UNIVERSITY OF SOUTH BIHAR
ROLE OF STATE IN MAINTAINING INDUSTRIAL
RELATION
Semester VII
Project on
LABOUR LAW
Submitted to-
ASST. PROF. MR. DIGVIJAY SINGH SIR
Submitted by-
Amar Alam
2017-22, B.A LL.B (Hons.)
Enrollment No. 1713125003
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ACKNOWLEDGEMENT
Firstly, I would like to thank respected PROF. MR. DIGVIJAY SINGH Sir,
for giving me such an excellent opportunity to show my skills, through my
project and enhance my knowledge on this topic.
This paper is the result of extensive ultrapure study; hard work and labor, put
into make it worth reading and this was possible only with the heartiest
support of my subject teacher.
I wish to acknowledge that in completing this project I had full support of my
library staff. This project would not had been completed without the help of
my university’s library that had various quality books on the chosen topic and
the university’s internet facility that helped me in making my research a
succes
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CONTENT
1. Introduction
2. Meaning Of Industrial Relations…………………………………………………………..4
3. Definition Of Industrial Relations……………………………………………...…………4
4. Objectives Of Industrial Relations………………………………………………………...5
5. Scope Of Industrial Relation……………………………………………………………....6
6. Significance Of Industrial Relation…………………………………………………….…7
7. State Intervention In Industrial Relation…………………………………………………..9
8. Factors, Cause Or Effect, That Impinge On The Weakening Of State
Power……………………………………………………………………………….……10
9. Impact Of The New Reality On The Role Of The State In Labour
Relations……………………………………………………………………………..…..14
10. New Ways Of State Intervention On Industrial
Relations…………………………………………………………………………………15
11. Conclusion………………………………………………………………………………16
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1. Introduction
Over the years, the relationship between employer and employee has changed from master and
servant to one of the contract of employment between management (as employer) and a worker
(as employee). This contract covers rights and obligations of both sides in respect of nature of
working conditions, displines, wages and benefits, security of employment, nature of work to be
performed, productivity social security etc. The Industrial relations are often viewed as
constraints which limit the ability of the management. But neglect of industrial relations function
by employer can lead to problems like indiscipline, lack of mutual trust, frustration and
alienation of workers, coercive practices by trade unions.
In simple terms, Industrial Relations deals with the worker employee relation in any industry
Government has attempted to make Industrial Relations more health by enacting Industrial
Disputes Act, 1947, to solve the dispute and to reduce the retency of dispute. This in turn
improves the relations.
2. Meaning of Industrial Relations
According to Dale Yoder, industrial relations is collective relationship between employees’
(trade) union and employer which grows out of employment. The concept also means the
relationship between employees and management in the day-to-day working of industry. The
subject of industrial relations includes the distinct areas.
• Individual relations and joint consultation between employers and workers at work
place.
• Collective relations between employers and their organizations and the trade unions,
and
• The part played by the state (govt.) in regulating these relationships.
Basically, IR sprouts out of employment relation. Hence, it is broader in meaning and wider in
scope. IR is dynamic and developing socio-economic process
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3. Definition of Industrial Relations
Armstrong has defined IR as “IR is concerned with the systems and procedures used by unions
and employers to determine the reward for effort and other conditions of employment, to protect
the interests of the employed and their employers and to regulate the ways in which employers
treat their employees.
In the opinion of V.B. Singh, “Industrial relations are an integral aspect of social relations arising
out of employer-employee interaction in modern industries which are regulated by the State in
varying degrees, in conjunction with organized social forces and influenced by the existing
institutions. This involves a study of the State, the legal system, and the workers‟ and
employers‟ organization at the institutional level; and of the patterns of industrial organisation
(including technology), compensation of labour force, and a study of market forces at all the
economic level.”
Features of Industrial Relations
Important features of industrial relations are as follows-
Industrial Relations are outcome of employment relationship in an industrial enterprise.
As a regulated relationship the focus of it is on rule-making by participants so that there
may be uninterrupted production.
The work situation may provide methods of adjustment and co-operation with each
other.
The government agencies involve in shaping the industrial relation through laws, rules
and awards.
The important actor parties of industrial relations are employees or their trade
unions, employers and their association s and government.
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4. Objectives of Industrial Relations
The objectives of Industrial Relations are:
• Development and promotion of harmonious labour-management relations.
• Maintenance of Industrial peace, goodwill and avoidance of
Industrial strike- the conflicts.
• To safeguard interests of labour, management, industry and
national economy as a whole.
• Establish industrial democracy based on labour partnership in management.
• To raise productivity level.
• To boost the discipline and morale of workers
• Industrial prosperity is largely dependant on good industrial relations.
• To improve their problems through mutual negotiations and consultation with the
management.
• Avoid unnecessary interference of the government, as far as possible and practicable,
in the matters of relationship between workers and management.
• Socialize industrial activity by involving the government participation as an employer.
• Raise productivity in the organization to curb the employee turnover and absenteeism.
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5. Scope of Industrial Relation
Scope of Industrial relation is as given below:
1. Labour Relations, i.e. relations between labour union and management.
2. Employer-employee relations i.e. relations between management
and employees.
3. The role of variousparties’ viz, employers, employees, and
state in maintaining industrial relations.
4. The mechanism of handling conflicts between employers and employees, in case
conflicts arise.
6. Significance of Industrial Relation
Maintenance of harmonious industrial relations is on vital importance for the survival and
growth of the industrials enterprise. Good industrial relation in increased efficiency and hence
prosperity, reduced turnover and other tangible benefits to the organizations. The significance of
industrial relations can be summarized as below.
• It establishes industrial democracy- Industrial relations means settling employees
problems through collective bargaining, mutual co-operation and mutual agreement
amongst the parties, i.e, management & employees union . this helps in establishing
industrial democracy in the organization which motivates them to contribute their best
to the growth and prosperity of the organization.
• It contributes to economic growth and development- Good industrial relations lead
to increased efficiency and hence higher productivity and income. This will result in
economic development of the economy.
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• It improves morale of the work place- Good industrial relations, built-in mutual so-
operation and common agreed approach motivate one to contribute one’s best, result
in higher productivity and hence income, give more job satisfaction and help improve
the morale of the workers.
• It ensures optimum use of scare resources- Good and harmonious industrial
relations create a sense of belongingness and group-cohesiveness among workers, and
also a congenial environment resulting in less industrial unrest, grievances and
disputes. This will ensure optimum use of resources, both human and materials,
eliminating all types of wastage.
• It prompts enactment of sound labour legislation- Industrial relations necessitate
passing of certain labour laws to protect and promote the welfare of labour and
safeguard interests of all the parties against unfair means or practices.
• It facilitates change- Good industrial relations helps in improvement of cooperation,
team work, performance and productivity and hence in taking full advantages of
modern inventions, innovations and other scientific and technological advances. It
helps the work force to adjust themselves to change easily and quickly
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7. State Intervention in Industrial Relation
The sovereign power of nation-states in the peak period of the industrial society has been the
benchmark of the emergence and development of Labour Law as an organizing tool of
subordinate work. Especially in the economically most developed countries, but also in market
economies as a whole, State power has designed for decades the key institutions regulating
subordinate work. Moreover, it has been also the public power that, by means of judges and
courts or by means of administrative authorities’ action, has controlled to a great extent the
effective fulfilment of labour standards set by the State legislative power itself.
Notwithstanding that, in many occasions, all the foregoing has been carried out thanks to the
impetus provided by various supranational organism, mainly as the result of the influence of the
International Labour Organization, the decisive role has been played by the State in such a way
that labour relations models have been set up at the national level, presenting each one their own
political, economic, social and cultural peculiarities.
Considering that decisive influence, the State has become the protagonist par excellence in the
development of the balance of interest function between workers and entrepreneurs in labour
relations. Both the contents and the methods of intervention have been notably different in every
country, but, in any event, it can be said that both have also shared as a common guiding thread:
the decisive influence of the nation-state playing a role as the lawmaker as well as playing a role
deploying orientation public policies in the evolution of the labour market.
That intervention of the State has been particularly intense when it comes to the setting of
minimum standards of labour conditions aim at applying uniformly to the whole working
population. In contrast with this, it cannot be said the same concerning the intervention of the
State.in the design of collective labour relations. Indeed, in that particular aspect of labour
relations, it can be observed different options between one country and others. Certainly, in the
majority of developed economies during the expansive period of the fordist model of production,
the intervention of trade unions and enterprise organizations have been really relevant and it has
triggered an intervention, complementary to the State intervention, specially by the means a
decisive collective bargaining adapting minimum legal standards to the peculiarities of the
companies or the productive sectors.
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The development of the trade union’s activity and collective bargaining in some models have
taken place on the basis of a state regulatory framework of trade-union freedom as well as
collective bargaining, even in cases which reference rules for the development of other typical
manifestations of collective autonomy: participation in the company, exercise of the right to
strike, conciliation and arbitration proceedings. In sum, it is a model in which the State has
played a major role setting the collective labour relations system. It is also possible to identify,
during this long period of economic expansion in developed economies, other countries where
has prevailed another model favouring a more legal bstentionism when it comes to the collective
relations system design, leaving room enough to trade unions and enterprise organizations to set
the previous mentioned rules, notably in the case of collective negotiation regime and labour
conflicts resolutions. That said, even in models more inclined to some legal abstentionism, it is
possible to observe the role of the State in the background that, in one way or another, has set up
the labour collective relations system. Collective bargaining has had an decisive role in the
labour collective relations system in industrialized countries influencing the labour market in the
framework of a national model of collective relations, with its own peculiarities, due to the legal
culture of every country and, more specifically, due to the specific model of State intervention in
the collective labour relations.
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8. Factors, cause or effect, that impinge on the weakening of State power
Even though there has been a decisive impact of globalization over recent labour relations’
transformations, it is appropriate to point out the influence of other complementary factors which
are also responsible for the changes we have been examining so far. In some cases, these factors
are the causes intensifying the weakening process of the State intervention. In other cases, there
are phenomena that, without a doubt, present a long period presence in the different models of
labour relations, albeit they are growing in intensity and scope and, as a result, the strength of the
previous tendency to low-key profile of the State managing labour relations. Additionally, it may
well be said that there are cases those phenomena are at the same time cause and effect of this
new reality we are trying to expose.
Drawing our attention in a rather simplified manner to the description of the more influential
factors, we could highlight the followings. 4
Firstly, it should be noted the huge impact of the generalization of information and
communication technologies in the last decades. These technologies, as a manifestation of the
technical revolution of the post-industrial society, have expanded universally in all companies,
productive sectors and countries with no exception. One of the most significant traits of such
technologies, in contrast with previous technological changes, it is that they are not concentrated
in certain activities or specific fields, but they have a general impact. It is also worth noting the
impact of these technologies over some legal institutions and traditional rules whose effectivity
is decreasing or, at least, they have some functionality. With regard to this, we just have to think
about how these technologies influence the place of supply of services, the functionality of
certain rules concerning working time, the intensity of pace of working times, protection
instruments in the field of health and safety, procedures and instruments of control on the side of
the employer and their impact on the employee’s intimacy. It all provokes that labour rules,
without being changed in its content, they present a different functionality and efficacy than they
had in the past. What is more, these sort of changes are not restricted to labour standards of
labour conditions, but they also reach collective labour relations in such a way that trade union
activity is in need to adapt to this new context in the same way that collective bargaining
experiments the impact of the transformations in the companies and productive sectors deriving
from the intense presence of information and communication technologies. In addition, these
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technologies reinforce the impact of globalization. The result is, once again, a more complex
functioning of the classic labour rules in this new technological scenario.
Secondly, it cannot be overlooked the strong presence in many countries of the so-called
informal economy, that is, to be precise, informal employment. It is true that the term informal
employment encompass very different realities. Besides, it is understood differently in one
country or others. In any event, this term cover at least two diverse phenomena, notwithstanding
they can be closely linked in certain occasions. On the one hand, this term is referred to labour
activities that escape from the control exercised by labour rules enacted by the State. As a result,
that labour activities are developed in the framework of irregular employment that does not
comply with labour minimum standards. On the other, it refers to self-employment situations that
are also apart from State intervention in the management of labour market. Both phenomena are
an expression of informal employment and not only do they affect individual labour relations,
but also they have an impact on trade union’s activity as well as collective bargaining. It is
indisputable that informal employment is a common feature in some countries a long time ago.
This circumstance shares space with the new scenario of a globalized economy and, in addition,
informal employment is increasing a percentage in relation with the total. Some have raised a
major concern about that the high rate of salaried workers, which is considered as one the most
characteristic traits of a developed economy, can be reduced progressively in some labour
markets, especially enhanced by new ways of labour organizations, network enterprises schemes
and the implementation of information and communication technologies. All these factors enable
some more extended forms of self-employment without altering productivity, efficiency and
enterprise productivity. Naturally, if this tendency is verified, we will be witnessing a more
complex State intervention in the management of labour market. 5
Thirdly, it is necessary to underline the increase of small and very small size companies in many
national economies. Again, this is an embedded phenomenon in some countries that is being
generalized to all productive sectors. At first sight, this phenomenon is apparently contradictory
inasmuch as it could be assumed that in a more and more generalized globalized economy with a
high presence of transnational companies it should lead to an increase of medium size companies
-considering the number of employees-. Nevertheless, the emerging process is actually the
opposite provided that globalization favours flexible ways of organizing a company.
Consequently, the success of sum of network enterprises, productive decentralisation and
information and communication technologies is resulting in the incorporation of small size
enterprise organization models. Traditionally, the typical form of legal intervention on labour
relations was conceived to be applied to big and medium size companies. At any rate, it is
beyond dispute that the fact that very small companies are gaining weight will cause create
serious difficulties when it comes to the application of the traditional model of collective labour
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relations and these difficulties will also arise in some new phenomena emerging in some labour
relation models. In particular, it is necessary to determine the impact of all that on the rules
promoting trade union’s activity and on the tendency to favour collective bargaining that, due to
its nature, requires a minimum number of workers to function adequately.
Finally, it should be mentioned that a globalized economy works in a context where economic
turbulences are emphasized and, notably, where the average period of product and services
exploitation, companies’ life expectancy and the duration of contractual liaison between
employer and employees are reduced. Moreover, it is also clear a significant rise in non-standard
labour schemes, part-time work recruitment and a reduction of permanent work’s duration. The
general outcome is a growth in job rotation within the occupied population with high flows of
entries and withdrawal to employment and unemployment. The traditional model of workers’
and trade union’s participation within the companies is built on the basis of generally stable
employment workforce. On the contrary, when we are facing a different situation where
employees are aware that their expectations to continue in the companies is lower, their
implication in collective participative process decreases and it is more complex to apply certain
traditional labour relation models and it is also difficult to maintain new models of collective
bargaining focused on the company.
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9. The impact of the new reality on the role of the State in labour relations
Having into account the most important transformations occurred within labour relations due to
globalisation, it comes to assessing the implications for the State to manage the labour market
and, particularly, collective labour relations. And so, the potentially new perspectives traditional
labour law guidelines would develop.
Not only would it be desirable to identify the changes taking place, but to implement some new
political proposals to face the new situation.
The effects of this global process on collective labour relations are particularly noticeable: on
one hand realising how traditional rules have been transformed because of this new reality in a
different setting and on the other hand working to introduce some innovations in national
regulations.
Singularly important is to verify what is happening in terms of participation in the undertaking
organization and in settled legal institutions as collective workers representation.
There must not be forgotten to pay attention to collective bargaining in this area: the tendency to
maintain or change workers percentage to be ruled under collective bargaining; negotiation
structures transformation particularly focused on the proposals to address the undertaking as a
preferential space to develop collective bargaining; where it exists, this is the natural space to
improve sectorial collective bargaining and keep alive the process of individual negotiation about
labour relations; the comparative law vision regarding the compulsory elements of what has been
negotiated, the “erga omnes” efficacy of collective bargaining and finally the definite role of
judges on their fulfilment.
When it comes to speak about strike and other expressions of labour dispute, it is essential to
know the point of view of the legislative power, if more or less interventionist; the relationship
between the use of strike as a control method of workers movements in a context of transnational
scenario and to what extent national collective bargaining applies to posting workers. It will
necessarily be useful to see how the legislative deals with the problem of work stoppage in case
of public services essential to the community. Here, consumer’s reaction to this question must be
taken into consideration.
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Lastly, it is also important to analyse how different national models of arbitration procedure try
to solve some labour disputes, specifically the ones trying to promote them and whether they
accept the questions when they take place in a transnational context.
10. New ways of State intervention on industrial relations
As we all know, the most classical forms of legal State intervention on labour law have taken
place putting into force some minimum legal standards of working conditions, in such a way that
the most common juridical technique has consisted of establishing a block of some necessary
rules that cannot be changed by the contracting parties, commonly named under the expression
“hard law”. Although more frequently used for individual labour relations, from the initial
engagement till the extinction of the employment contract, including working conditions, it has
also had a long way within the area of collective working relations, where the use of “hard
law”rules has been intensive as well.
By contrast, some experiences of “soft law” have been appearing and spreading lately in
different ways, such as diagnosis reports, positioning, recommendations, instructions, good
practices in certain areas attempting to extend to some other ones, outcome evaluations, etc.8
Under this perspective, to test the evolution of State intervention through this hard law technique
to verify if there has been either a decrease or any changes in public intervention about its use
and efficiency would be of great interest.
Furthermore, the same analysis should be carried out about the “soft law” experience to check
the depletion degree and its real impact on working relations.
In the end, the question laid before is in what way mutual influences can be identified between
both techniques, hard and soft law, and if so they acts as alternative, to trade one against the
other, or, on the contrary, must be considerate complementary options that enhance each other.
As a consequence of the aforementioned, it is clearly visible that a deep insight into the new
State tools used to allow the parties of the labour relations to face the new challenges must be
done as soon as possible: green economy; digital economy, professional training, young people
integration, social inclusion, balance between working and family life time, active ageing,
migration, etc.
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11. Conclusion
Maintenance of harmonious industrials relations is on vital importance for the survival and
growth of the industrials enterprise. Good industrial relations in increased efficiency and hence
prosperity, reduced turnover and other tangible benefits to the organisations. In India, industrial
relations system has passed through several stages. A number of factors-social, economic, legal,
cultural and political-have influenced industrial relations in India. The chapter deals with the
historical perspectives of industrial relations systems and its various changing dynamics even in
economic reforms era.
The future of industrial relations in India can be reviewed from reports of the commissions
constituted by the government for this purpose. From these, certain issues are emerging which
are posing challenges to the three 'actors' in the system. (See Chapter -Recent Trends of IR and
Changing Role of Actors)
To sum up with a quotation: Its strategic importance extends beyond the limited frontiers of
union-management relationship and overlaps with the future prospects for Indian democracy on
one hand and the basic concepts and assumptions of economic development on the other. The set
of strategic choices must be made in the midst of economic and political difficulties that the
country is undergoing.
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References
1. C.K. Johri, (1969), "Normative aspects of industrial relations", in Issues in Indian Labour
Policy, C.K. Johri (Ed.), Shri Ram Centre for Industrial Relations, New Delhi
2. Y.B. Singh,(1968), Climate for Industrial Relations: A Study of Kanpur Col/on Mills, Allied
Publishers, p. I, Bombay
3. J.T. Dunlop, (1958), Industrial Relations Systems, Southern Illinois, University Press,
Illinois 4. V.V. Giri, (1960), Labour Problems in Indian Industry, Asia Publishing House,
Bombay
4. P.R.N. Sinha & Indu Bala Sinha, (2016) , “Industrial Relations, Trade Unions and Labour
Legislations, Pearson, Delhi.
5. R.G. Kaulgi,( 1977), "The strategy and tactics at the bargaining table", In: Personnel
Management: The Indian Scene, Y.B. Bhonsle (Ed.), S. Chand & Co., New Delhi
6. Government of India, (1969), Report of National Commission on Labour, Ministry of
Labour and Employment and Rehabilitation, New Delhi
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