Module- II: Industrial Relations: ---Concept, Scope and Approaches to

Industrial Relations—Unitary, Pluralistic and Radical approach, Industrial

Relations System (IRS), Trade Unionism: Concept, structure and function.
Industrial Dispute, Code of Discipline and Grievance Management, Dispute
Resolution and Industrial Harmony. Collective Bargaining.

Introduction
“Human beings are the active agents who accumulate capital, exploit natural resources, build
social, economic and political organizations and carry forward national development”. Growing
Industrialization and the rapid expansion of the services sector resulted in the galloping demand
for skilled labor. The emergence of the concept of human resource management and human
resource development contributed to the growing importance of labor. The issue of industrial
relations arose from the issue of divorce of the workers from the ownership and management of
the production process. This has brought about a sense of deprivation and loss independence on
the part of workers and is probably the primary cause of industrial disputes. All these factors
have led to growing unrest among the ranks of workers.

The term industrial relation refers to relationship between management and labor or among
employees and their organizations that characterize or grow out employment. Theoretically
speaking, there are two parties in the “employment relationship”. i.e. labor and management.
Both parties need to work in a spirit of cooperation, adjustment and accommodation. In their
own mutual interest certain rules for coexistence are formed and adhered to. The four main
parties who are actively associated with any industrial relations system are the workers, the
managements, the organizations of workers and managements, and the state.

According to the ILO, “IR deals with either the relationships between the State and the
employers and the workers in organization or the relation between the occupational organizations
themselves.”

The following points emerge from a close examination of the above definition: -

1. Employer –Employee Interactions

2. Web of Rules: - It include the relations between employer and employee and between
employer’s associations, trade unions as well as the state.

3. Multidimensional: - IR is multi-dimensional because they are influenced by a complex set of

institutional, economic and technological factors.
4. Dynamic and Changing: - IR change with times, expectations of employees, Trade unions,
employer’s associations etc.

5. Spirit of compromise and accommodations: - In the larger interests of society, both the
employer and employees must put out fires amicably and get along with each other in a spirit of
compromise and accommodation.

6. Government’s role: - the governments influences and shapes industrial relations with the help
of laws, rules, agreements, awards of courts and emphasis on usages, customs, traditions, as well
as the implementations of its policies and interference through executive and judicial machinery.

7. Wide coverage: - The scope of IR is wide enough to cover a vast territory comprising of
grievances, disciplinary measures, ethics, standing orders, collective bargaining, participatory
schemes, dispute settlement mechanisms etc.

8. Interactive and consultative in nature: - IR includes individual relations and joint consultation
between labor, management, unions, the state etc.

Objective of IR :- The fundamental objective of IR is to maintain sound relations between

employees and employers.

1. To enhance the economic status of the workers.

2. To regulate the production by minimizing industrial conflicts through state control.

3. To socialize industries by making the government an employer.

4. To encourage and develop trade unions in order to improve the workers’ collective strength.

5. To avoid industrial conflicts and their consequences.

6. To extend and maintain Industrial democracy.

Approach to Industrial Relations:-

1. Psychological Approach :- Dissatisfaction with pay, benefits, services, conditions of work
compel workers to turn aggressive and resort to strikes, gheraos etc. Apart from economic issues,
motives such as the need to gain prestige, power, status, recognition also compel people to go in
different directions, sacrificing the broader organizational interest.

2. Sociological Approach :- A number of sociological factors such as the value system, customs
and traditions affect the relations between labor and management. Problems such as urban
congestion, chronic shortage of affordable dwelling units, convenient transportation system.
These sociological changes impact industrial life significantly, forcing parties to assess, analyses
and find solutions to conflict full situations on a continuous basis.
3. Human Relations Approach :- People do not like the idea of being treated as machines. To
reduce friction and conflict in the work place, managers need to possess effective social skills.
They must explain why a particular job is important, allow workers to participate in work
processes fully, encourage work groups to flourish and try their best to keep workers happy.

4. HRD Approach :- It recognizes employees as the greatest assets in an organization , believes

that they can be developed to an unlimited extent with proper incentives, atmosphere and
treatment. It is possible to integrate human needs with organizational requirements.

How to Overcome Troubling Issues

To overcome some of the troubling IR issues, managers should focus on aspects like: -

a. Clarity of Goals

b. Reward Performance

c. Empower People at all levels

d. Follow Two-Way communication channels.

e. Settle Issues in an atmosphere of trust and understanding.

5. The Radical Approach(Marxists Approach):- Marxism is essentially a method of social

enquiry into the power relationships of society and a way of interpreting social reality. The class
conflict analysis of industrial relations derives its impetus from Marxist social thinking and
interpretations. To Marxist, industrial relations are essentially politicized and part of the class
struggle. The Radical approach is primarily oriented towards the historical developments of the
power relationship between capital and labor. It is also characterized by the struggle of these
classes to consolidate and strengthen their respective positions with a view to exerting greater
influence on each other. In this approach, industrial relations is equated with a power struggle.

6. The Pluralist Approach :- Pluralism is a major theory in labor-management relations which

has many powerful advocates. The focus is on the resolution of conflict rather than its
generation. When industrial jobs become more pleasant and employees get more integrated into
the wider society, strikes will become less frequent. Conflict is inherent in the industrial system.
The need for a formal system of collective bargaining is a method of conflict resolution.
Industrial conflict is accepted by pluralist not only as being inevitable but also as requiring
containment within the social mechanism of collective bargaining, conciliation and arbitration.
The major critics of the pluralist approach are the Marxist according to whom exploitation and
slavery will continue unabated in the institutional structure of pluralism. The only difference is
that in such a social structure, the worker will be deemed to be a better paid wage slave.

7. Unitary Approach :- In Unitary Approach the organization is perceived as an integrated and

harmonious whole with the ideal of “one happy family”, where management and other members
of the staff all share a common purpose, emphasizing mutual cooperation. Furthermore, unitarist
has a paternalistic approach where it demands loyalty of all employees, being predominantly
managerial in its emphasis and application. Consequently, trade unions are deemed as
unnecessary since the loyalty between employees and organizations are considered mutually
exclusive, where there can’t be two sides of industry. Conflict is perceived as disturbing element
which results interpersonal friction and communication breakdown.

Significance of Industrial Relations :-

Good industrial relations implies peaceful, harmonious, fruitful relations between labor and
management. In such a situation, both labor and management realize their mutual obligations
towards each other and resort to actions that promote harmony and understanding the following
benefits: -

1. Industrial Peace

2. Industrial Democracy

3. Improved Productivity

4. Benefits to workers.

Industrial Relation System: -

A sound IR system is one in which relationships between management and employees and their
representatives on the one hand, and between the state on the other, are more harmonious and
cooperative than conflictual and creates an environment conducive to economic efficiency and
the motivation, productivity and development of the employee and generates employee loyalty
and mutual trust. Three main parties are directly involved in industrial relations: -

Employers: - Employers possess certain rights vis-à-vis labors. They have the right to hire and
fire them.

Management: - Management can also affect workers’ interest by exercising their right to
relocate, close or merge the factory or to introduce technological change.

Employees: - Workers seek to improve the terms and conditions of their employment. They
exchange views with management and voice their grievances. They also want to share decision
making powers of management. Workers generally unite to form unions against the management
and get support from these unions.

Government: - The central and state government influence and regulates industrial relations
through laws, rules, agreements, awards of court and the like. It also includes third parties and
labor and tribunal court.
Scope of Industrial Relation

The concept of IR has a very wide meaning. In the narrow sense, it means that the employer,
employee relationship confines itself to the relationship that emerges out of the date to day
association of the management and the labor. In its wider sense, IR include the relationship
between an employee and an employer in the course of the running of an industry and may
project it to spheres, which may transgress to the areas of quality control, marketing, price
fixation and disposition of profits among others.

The main issues involved here are: -

a. Collective Bargaining

b. Machinery for settlement of industrial disputes

c. Standing orders

d. Worker participation with management

e. Unfair labor practices.

The scope of IR include :-

IR consists of Relationship among employees, between employees and their superiors or

managers, collective relations between trade union and management, collective relations among
trade unions, employees’ associations and government. Scott, clothier and Spiegel remarked that
the industrial relations have to attain the maximum individual development, desirable working
relationship between management and employees and effective molding of human resources.
They have also arrested that either industrial relations or personnel administration is primarily
concerned with all functions relating man of industrial relations seems to be very wide. It
includes the establishment and maintenance of good personnel relations in the industry, ensuring
manpower development, establishing a closer connect between persons connected with the
industry and that between the management and the workers, creating a sense of belongingness in
the minds of management, creating a mutual affection, responsibility and regard for each other,
stimulating production as well as industrial and economic development, establishing a good
industrial climate and peace and ultimately maximizing social welfare.

Values in IR :- The Values that govern sound industrial relations are:

a. Equity and fairness :- Equity refers to equal treatment to one and all under comparable
circumstances. The notion of fairness becomes relative when one considers whether or not one is
getting a fair share of pay in relation to what others with similar qualifications and experience are
receiving.
b. Power and authority:- Power is the ability to influence, impose or control. Authority is the
right to expect and command obedience.

c. Individualism and collectivism: - Individualism is focused on the rights and concerns of each
person. Independence and personal identity are promoted in individualistic culture. Collectivism
stresses the importance of community. Unity, selflessness or altruism are valued traits in
collective cultures.

d. Integrity, trust and transparency:- Integrity is adhering to what is professed, Trust is

established between and among people and transparency is promoted through sharing of
information, openness in communication and willingness to explain and reason out the motives
behind decisions and actions.

Trade Unions
Trade unionism: - Trade unions have become an integral and powerful factor in the
contemporary system of production and distribution of goods and services. Trade unions are now
exercising a strong influence on the methods of production of goods and services, their
distribution, the allocation of economic resources, the volume of employment and
unemployment, the character of rights and privileges, policies of governments, the attitude and
status of large masses of population, and the very nature of economic and social organizations.

Definition:-

According to Webbs “A Trade Union is a continuous association of wage earners for the purpose
of maintaining or improving the conditions of their working lives”.

According to Clyde E. Dankert “A trade union is a continuing organization of employees

established for the purpose of protecting or improving, through collective action, the economic
social status of its members”.

Origin :- Trade Unions have grown in response to the peculiar needs and problems which the
wageearners have had to face in the course of industrialization under the capitalist economic
system.

Features of the process of industrialization that necessitated the origin of trade unions are :

1. Separation between Capital and labor: - The capitalist economic order is based upon the
notion that the pursuit of self-interest by every individual leads to the establishment of an
economic and social order that serves best the interest of all concerned. The workers tried to
protect their economic interests and status by submitting petitions to kings, courts and
parliaments for the implementation of protective regulations of the medieval period.
2. Philosophy of Laissez-Faire :- The dominant philosophy of laissez-fair and economic
liberalism prevented the state from coming to the rescue of the suffering mass of industrial
workers.

3. Lack of Bargaining Power on the Part of Workers :- In reality, an individual workman,

was a tool in the hands of the employers. Being economically dependent on the employer, he had
neither the bargaining skill, nor the trade acumen to have his demands met.

4. Individual Dispensability but Collective Indispensability :- The individual workman was

dispensable to the employer but workmen, collectively, were indispensable to him. The employer
could easily and always get rid of the services of a few workmen and replace them by others, but
he could not dispense with the services of all his workmen and readily replace them.

Objectives of Trade Unions :- This generic goal of protecting and promoting worker’s interests
consists of such specific objectives are :-

A. Improved economic status

B. Shorter working days

C. Improvement of working and living conditions

D. Income security

E. Better health, safety and welfare standards

F. Respect for the personality of the workers

G. A greater voice in industrial administration

H. Improving political status.

Theories of Trade Unionism.:- Trade unions are voluntary organizations of workers formed to
promote and protect their interests through collective action. The theories of trade union
movement are in fact some abstract principles or ideologies that seek to explain the basic
motivating factors behind union organization, its goals and the means to accomplish them.

A. Karl Marx: Class conflict and communist manifesto: - According to Karl Marx, trade unions
are the natural outcome of capitalism. They perform a necessary and useful task in protecting
wages and improving working conditions and use their power to emancipate the working class
by putting an end to the capital system. Marx felt that unions should not be content with the
conservative motto, His revolutionary dictum was to abolish the wage system itself. He
emphasized a role for intellectuals to imbue and inspire in workers a class and political
consciousness, outside the economic struggle, and outside the sphere of relations between
workers and employers.
B. Sydney and Beatrice Webb : The Socialist Pattern of Society :- The Webbs viewed the role
of trade unions as more than first winning economic benefits for their members. They saw a role
for unions to usher in socialism through political action. They observed that market pressure
drove workers to organize into unions to protect their economic interests. The Webbs were
opposed to the capitalist system. They advocated different paths to bring its downfall. Marx,
along with Engels, played a key role in drafting the communist manifesto in Germany. The
Webb played an instrumental role as intellectual leaders of the labor party in Britain, drafting the
Socialist Manifesto for converting capitalist Britain into a mixed economy, thus laying the
foundations for the nationalization of major industries. Marx and his followers prescribed a
rapid, revolutionary and radical, even violent, change to a new order. The Webbs advocated a
non-violent, gradual evolution to a socialist form of government.

C. Robert Hoxie :- Was the advocate of social psychological environmental context of

unionism. He considered American unions less dogmatic and more pragmatic and opportunistic.
He identified five functional types of unionism.

Five functional types of unionism:

i) Business unionism: Business unions are trade-conscious rather than class conscious, they
stress on immediate goals and display an instrumental orientation. They seek to achieve their
goals primarily through collective bargaining and industrial action(strikes).

ii) Friendly or uplift unionism:- The goal of such unions is to elevate the moral, intellectual
and social life of the worker. Their means of action include collective bargaining and political
action.

iii) Revolutionary unionism :- These unions are class conscious rather than trade conscious.
Again, it subdivided into two types: one focusing on socialist(unionism) ideals and the other
perpetrating quasi anarchy(unionism) through strikes, sabotage and violence.

iv) Predatory unionism :- Such unions are leader based, not member based, while attempting to
secure higher wages and other benefits for their members, they do not hesitate to collude with
employers to squeeze out competition for mutual benefit.

D. Mahatma Gandhi : The concept of Trusteeship:- Gandhi understood the limitations of

capitalism and socialism and tried to synthesize their virtues in his concept of trusteeship.
Gandhi’s concept of trusteeship is not based on class conflict or on the ideology that
nationalization of resources promotes/provides equity rather on voluntarism. Trusteeship is
stewardship of one’s possessions to increase wealth using one’s talent and deploying the surplus
wealth in public causes. The concept of trusteeship presupposes provision of incentives for the
creation and development of enterprises while eliminating the defects of capitalism.

Trade Union Movement In India:-

In India the Trade union movement emerged sometime between the 1850s and 1870s.The First
national Federation, The All India Trade Union Congress (AITUC) was established in the year
1920. It comprised of different ideological persuasions broadly united in a struggle against
colonial rule and exploitation by foreign and local capitalists. With the change in the political
context on the eve of and after independence in 1947 the Indian National Trade union congress
was established with the support of the leader of National Congress those who are against the
revolutionary ideology of the AITUC and believes in peaceful and non-violent reformist
solution. In the late 1960s the socialist too broke away from the AITUC to form the Hind
Mazdoor Sabha (HMS). There was a split in the congress, followed by a division of the
communist and other political parties. After the general elections in 1967, non-congress
governments came into power in Kerala and west Bengal, subsequently, regional parties emerged
in several states and formed the government at various points of time. Each political party set up
its own trade-union wing. Today, there are over a dozen “National Centers” of trade unions in
the country with five of them having a membership of over 5,00,000 in at least four states and
four industries/sectors, Though the official number of registered unions is around 50,000 the
actual number may well exceed 1,00,000 unions. The strong nexus or connection between trade
unions and politics in Indian stems are: -

A. Trade unions played a major role in the freedom struggle, some of those who led the freedom
struggle also led the trade union movement.

B. Political leadership in the early part of twentieth century, pursued policies of a welfare state.

C. The Indian Constitution envisages justice, liberty, and equality for all and an activist role for
the state in guaranteeing the same.

D. In the post-independence, the state pursued socialist objectives, assigning the public sector the

dominant role of attaining high economic growth.

E. In a democracy, politicians need the support of the masses, working people being strong vote
banks, political parties began to depend on trade unions. The trade unions aligned with the ruling
party may be able to defend their members’ interests.

This nexus between political parties results in some negative consequences.

A. The Trade unions become fragmented whenever there is fragmentation in political parties.

B. Trade Union unity suffers due to political polarization, The public sector suffers most if the
ruling party in a state is different from one ruling at the center.

C. In the context of liberalization and globalization, having their own party in power is becoming
a liability for trade unions because political parties of all ideological hues tend to follow policies
of wooing investors and encouraging cost-based competition, workers bear the brunt of those
neo-liberal policies.

Trade Union s Act, 1926- Salient features

Section 2(h) of Trade union Act, 1926 defines a trade union as “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, and
includes any federation or two or more trade unions.

 Workmen means any person working in the industry. But the persons working in Civil,
police, and defense and persons who are dismissed and retrenched are barred from
forming unions.
 Children are prohibited from joining unions, but there is no upper age bar.
 Under the Act, 1926, seven members could form a trade union. But it was amended in
2001 and the limit for registering a union increased to 10% or 100 whichever is less,
subject to a minimum of seven.
 The law is silent on craft, category and caste unions.
 Section 15 of the act mentions that trade unions do not just pursue economic interest, but
are also
 oriented towards political, social and welfare objectives.
 Act 1926, mentioned that, 50% of outsiders can lead unions, but in 2001 it reduced to
1/3rd of the office-bearer positions in a union.

Registration of Trade Union:-

A trade union can be made permanent and stable only if it is registered under the Trade Union
Act. A registered trade union enjoy various privilege, benefits and immunities, and therefore,
most sponsors of a trade union are tempted to register it. After registration, a trade union is
entitled to represent its members.

Procedure for Registration :- As per section 4 of the trade Union Act, a minimum of 10
members of a trade Union shall apply for registration, with the total number being 100 or less. In
all other cases, at least seven members of a union shall apply for registration. However, in case
where less than half the number of applicants who originally applied for registration with draw
their membership from the union after submitting the application of registration, the application
shall not be considered invalid. The application shall be submitted to the Registrar along with the
rules of the union and other mandatory details, such as name of the trade union, addresses and
occupations of the applicants and the office bearers and address of the main office of the trade
union.
As per section 6 of the Trade Union Act, a trade union cannot be registered unless it adheres to
the

provisions of the Act. Here are some mandatory rules to be satisfied by a trade union to be
eligible for registration.

 Name of the Trade Union

 Objectives of its establishments

 The lawful purpose of spending the general funds

 Maintenance of list members, sufficient facilities for its scrutiny by the office bearers and
union members.

 Payment of monthly membership fee of 25 paise

 Safe custody of funds

 Conduction of annual audits

The Registrar, on being satisfied that the trade union has complied with all the requirements of
this Act in regard to registration shall register the Trade Union by entering the particulars in a
register.

Certificate of Registration :- The Registrar on registering a Trade Union as detailed earlier,

shall issue a certificate of registration in prescribed Form C which shall be conclusive evidence
that the Trade Union has been duly registered.

Cancellation of Certificate :- on an application from the Trade Union to be verified in such

manner as may be prescribed. On satisfaction of the Registrar that the certificate has been
obtained by fraudulent means or mistake or that Trade Union has ceased to exist or has willfully
and after notice from the Registrar contravened any provision of the Trade Union act, 1926 or
allowed any rule to continue in force which is consistent with any such provision or has
rescinded any rule providing any matter provision for which is required by section 6. The
Registrar has to provide not less than two months’ notice previous in writing specifying the
ground on which it is proposed to withdraw or cancel the certificate, before actually withdrawing
or cancelling the certificate.

Recognition of Trade Union:- A trade union is said to be recognized once an employer has
agreed to negotiate with it on pay and working conditions on behalf of a particular group of
workers. Trade Unions are recognized by Governments on the basis of membership
verification(once on 10 years or so) to determine which unions are to be invited for participation
in national-and international level consultations on social and labor matters.
There are several methods for recognition of trade union(s) by managements. These are

1. Closed Shop / Union Shop : Union membership is a prerequisite for employment in a firm or
a workshop. It is closed to all except members. First one has to a union before he/she could take
up employment in an enterprise. These prevails informally in wholesale markets and railway
stations among manual, headlock workers. Union shop is a system whereby new entrants to
employment, if they are not union members, must join the union within a stipulated period.

2. Membership Verification :- An official of the Labor Department of the State or Central

government visits the enterprise/establishment, obtains the roster of employees from the
management and asks each employee individually whether or not they wish to become members
of a union and if so, which union. The membership claim of all unions is verified to identify
which union or unions individually or collectively have the support of the majority of the
employees. This becomes the basis for recognizing the collective bargaining agent.

3. Check-off:- Under check-off, employees are asked to state in writing whether or not they
belong to a union and if they do, to which. Along with this, employees should also undertake in
writing that they are willing to have the union membership subscription deducted from their
salary every year, in one or more installments, and credited to the account of the union
concerned. The check-off system helps managements to know how many members each union
has and who are they. This not only enables an assessment of the relative strength of unions for
the purpose of recognition but such information can also be used by managements, in some
cases, to pressurize workers to stop patronizing unions which are not in good books of the
management.

4. Secret Ballot:- A more democratic method, election by secret ballot, enables employees to
exercise their option secretly, without fear or favor. Under this method, it is possible to elect the
President from union A, The secretary from Union B and the treasurer from union C. The benefit
of this method that leaders from various denominations have to work together.

5. Code of Discipline :- The Central trade union federations of workers at the conference held in
Nainital in 1957 deliberated on the code of conduct for maintaining harmonious inter-union
relationship and laid down a set of principles :

 Every employee in an industry or unit shall have the freedom and right to join the union
of his/her choice.
 There shall be no dual membership of unions.
 There shall be unreserved acceptance of and respect for the democratic functioning of
trade unions.
 There shall be regular and democratic elections of executive bodies and office bearers of
trade unions.
 Ignorance and backwardness of workers shall not be exploited by an organization.
  Casteism, Communalism and provincialism shall be eschewed by all unions. There shall
be no violence, coercion, intimidation or personal vilification in inter union dealings.

White Collar Trade Union. :

There was a time when unions and strikes were known only to Blue-collar workers in factories,
mines, railways docks, etc. White-collar employees and professional people like: doctors,
engineers, lawyers, professors and senior executives and managerial staff thought it below their
dignity to band themselves in unions, march the high streets, and yell slogans. Today it is
different. Trade unions exist among most professionals, white collar employees, officers, senior
executives, and managers, and so do strikes and gheraos. Highly paid employees in banks, in the
Life Insurance Corporation and in many other establishments are organized, and so the Central
Government and semi-government employees. They take recourse to strikes, mass casual leaves,
work to rule, dharnas, and gheraos for securing their demand and thus creating some
embarrassing problems for their employers/managements requiring serious consideration. Both
blue and white-collar workers are employees, but are of different status, and holding different
positions at different levels. The differences between these two categories of unions are as
summarized in following manner.

Blue Collar Worker & White Collar Worker

1 All shop-floor workers (Pari of production system who operate machines and related systems)
are termed as blue-collar workers, as their work is not generally clean, whereas all clerical or
office staff who do not work on the shop floor, are termed as whitecollar workers as their work
and working places are clean. They are generally involved in a desk job or providing service
over the counter.

2 Blue Collars are manual workers with lower literacy and education, and have their own social
and economic background, whereas White Collars are non-manual workers forming a distinct
social ground characterized by divergent socio-economic backgrounds, level of education,
manner of speech, social custom and ideology. They are better educated and have jobs requiring
mental capabilities to a greater extent.

3 Blue Collar workers may be paid by time, or by piece, or results, either on daily, or weekly, or
fortnightly, or monthly basis. They are generally wage earners, and may have lesser holidays,
and leave facilities and other privileges than white-collar workers. White Collar workers are time
workers paid on monthly basis. They enjoy longer holidays and leave facilities and better
privileges.

4 Blue Collars are nor so inclined towards management. On the other hand, they may be caring
for their unions than for the management. White Collar workers hold such jobs that they are
regarded as part of the management, and so they are more inclined towards it than the blue-collar
workers.
5 Excepting highly skilled categories who are in greater demand and can manage to have higher
wages income, the blue-collar workers are not so well paid. Their fringe benefits and perquisites
are lower than that of white-collar. White collar workers are professionals and they have social
stand, they are generally better paid and have better terms and conditions of employment
including better perquisites and fringe benefit

6 White Collar workers have better union protection and job security by labor legislation, such as
Industrial Disputes Act, 1947. White Collar workers have no union protection if they are not
unionized, and also job security if they are not covered by the Industrial Disputes Act, 1947 as
may be the case with not a few of them.

7 White Collar workers are mostly engaged in production processes. They are concentrated in
the fields of commerce, transport, storage and communication. White Collar workers are
engaged in different occupations that fall under the category of professional, administrative,
executive and managerial workers, clerical and related workers, sales staff, technical, and
supervisory and other workers, engaged in transport and Communication services, or in sports
and recreational facilities, artists and musicians.

8 Blue Collar workers have no authority, and nor they associated with decision taking. White
Collar workers are linked with their employers by being associated with that part of the
productive process where authority is exercised and decisions are taken.

Industrial Disputes
Disputes ;- Conflict, as one of the features of industrial relations, is a general concept, when it
acquires a concrete and specific manifestation, it becomes an industrial dispute, that is, industrial
conflict is general, where industrial dispute is specific. Dispute may be said to be disagreement
or controversy between management and labor with respect to wages, working conditions, other
employment matters or union recognition.

Causes of Industrial Dispute :-

Economic causes: -

1. Division of industry

a. Wage structure and demands for higher wages

b. Methods of job evaluation

c. Deduction from wages

d. Incentives

e. Fringe benefits
2. Methods of production and physical working condition

a. Working condition

b. Technology and machinery

c. Layouts

d. Change in products

3. Terms of employment

a. Hours of work, shift working, promotion, demotion, layoff, retrenchment,

dismissal, job security, retirement etc.

Institutional causes :-

a. Recognition of unions

b. Membership of union

c. Subjects of collective bargaining

d. Bargaining units

e. Union security

f. Unfair practices

Psychological Causes :-

a. Clash of personalities

b. Behavioral maladjustments

c. Demands for recognition of workers’ personality

d. Authoritarian administration

e. Lack of scope for self-expression and participation

f. Undue emphasis on discipline.

There is an interesting discourse between individual and industrial dispute and Rights issues and
interest issues. Under section 2(k) of the industrial disputes Act, if there is a dispute or difference
and if that dispute or difference is connected with the employment or on-employment or the
terms of employment or with the conditions of labor or any person, it becomes an industrial
dispute. dispute is under general or common law; civil court has the jurisdiction. Industrial
disputes can be either over interest issues or right issues. Interest issues concern claim for future
rights. They usually concern wages and working conditions. For instances, workers asking for an
increase in wage/salary will become an interest issue. Rights issues involve interpretation or
application of an existing rights, as laid down in the labor legislation, a collective agreement, an
individual labor contract, or an existing practice. If a worker is paid less amount than is
contracted it becomes a rights issue. Similarly, if a worker feels that he/she was unfairly
dismissed, it becomes a right dispute.

Methods of Settling Industrial Dispute :-

When certain demands are made by the workers and the employers resist them, industrial
disputes arise. There are two ways in which the basic parties to an industrial dispute – the
employer and the employees can settle their disputes. These are: -

1. Without state intervention

a. Collective Bargaining

b. Voluntary arbitration.

Again, Collective bargaining is subdivided into

i. Without conciliation

ii. With conciliation

A.Collective Bargaining :-

The emergence and stabilization of the trade union movement has led to the adoption of
collective bargaining as a method of settling differences and disputes between the employer and
his employees. Collective bargaining implies the following main steps :-

1. Presentation in a collective manner, to the employer, their demands and grievances by the
employees.

2. Discussions and negotiations on the basis of mutual give and take for settling the grievances
and fulfilling the demands.

3. In the event of the failure of negotiations, a likely resort to strike or lock-out to force the
recalcitrant party to come to terms.

B.Voluntary Arbitration

The second way in which the parties can settle disputes without any state intervention, is
voluntary arbitration, The parties feeling that mutual negotiations will not succeed and realizing
the futility and wastefulness of strikes and lockouts, may decide to submit the dispute to a neutral
person for arbitration. The neutral person hears the parties and gives his award which may or
may not, be binding on them. At the time of submitting a dispute to arbitration, the parties may
agree in advance, to abide by the award of the arbitrator and thus, industrial peace is maintained
and the dispute is resolved. Sometimes, however, the parties may agree to submit the dispute to
an arbitrator but at the same time, reserve their right to accept or reject the award it comes. Under
such a condition, voluntary arbitration loses its binding force.

2. With State intervention

A. Compulsory Establishment of Bipartite Committees :- Here the state has passed

enactments requiring the establishment of bipartite committees consisting of the representatives
of workers and their employer at the plant or industrial level. These bipartite committees are
given the power to settle difference between the workers and the employers as soon as they
appear, and thereby they prevent them from growing into big conflagrations.

B. Establishment of Compulsory Collective Bargaining:- As the state encourage and requires

the establishment of bipartite committees for the purpose of composing grievances and
differences between workers and their employer, it may also think it advisable to encourage and,
if necessary, to force workers and employers to enter into formal collective bargaining through
their representatives. The idea behind such a policy is to force the parties to seek to settle their
differences through mutual negotiations and discussions before they decide to resort to strikes or
lock-outs.

C. Compulsory investigation:- Many government have assumed power under laws relating to
industrial relations, to setup a machinery to investigate into any dispute. The purpose behind the
appointment of a court of Inquiry, is essentially to find out the relevant facts and issues involved
and to give them wide publicity so that the pressure of public opinion may force the recalcitrant
party to give up its obstinate attitude.

D. Compulsory conciliation and mediation:- In many countries, the state does not rest content
with the mere creation conciliation service. It imposes an obligation on the parties to submit their
dispute to the conciliation service and makes it a duty of the latter to seek to conciliate the
dispute. Meanwhile, the state requires the parties to refrain from causing any work stoppage for
the purpose of resolving the dispute, so long as the conciliation proceeding is going on.

There are three main considerations for prohibiting the parties from causing work stoppage and
imposing this time limit.

i) It is, felt that conciliation will provide a cooling off period during which emotional tensions
may subside and a settlement can be arrived at.

ii) It is felt that the freedom of the parties to settle their disputes even by causing work stoppage,
should not be taken away from them for a long period.
iii) It is argued that, if conciliation does not achieve an early break-through, it is not very likely
to succeed later.

E. Compulsory Arbitration or Adjudication.:- Despite all the efforts to settle amicably the
disputes the employees may go for strike & lock out, because there is no forcibly imposition. In
the opinion of the government such strikes and lock-outs may appear to be injurious to national
and public interest and may cause irreparable damages. Under such conditions, the government
may decide to refer the dispute to adjudication and force parties to abide by the award of the
adjudicator and at the same time, prohibit the parties from causing work stoppage.

Machinery for the prevention and settlement of Industrial Disputes In India :-

Keeping with the requirements of a parliamentary democracy and of the private enterprise
economy, the state in India does not interfere with the basic freedom of the employers, their
employees and the trade unions to conduct their relations and to compose their differences in a
manner they think best. The Government has established a number of statutory and non-statutory
bodies for the purpose of working out the guiding principles of the relations between the
employers and the employees, and recommending actions so as to prevent industrial disputes
from arising.

Statutory Machinery :-

The statutory machinery consists of

a. Works Committee

b. Permanent conciliation services for particular geographical areas or industries both at the
central and state level

c. Ad hoc Boards of conciliation at the central and state levels

d. Ad hoc courts of inquiry at the central and state level

e. Adjudication authorizes consisting of tribunals and labour courts at the central and state levels,

f. National Tribunals at the central level.

Non- statutory Bodies

The work of these bodies influences the course and character of industrial relations in the
country. The important issues likely to cause tensions in industrial relations or result in specific
industrial disputes, are brought for discussions before these bodies which help the employers,
workers and organizations to clarify and modify the thinking and attitude. The non statutory
bodies exist at different levels such as the Indian Labor conference and standing Labor
Committee at national level, Wage Boards and Industrial Committees at the industry level, and
State Labor Advisory Boards at the state level.

Indian Labor Conference and Standing Labor Committee:- Both of the organization were
setup in 1942, with initial membership of 44 in the Indian Labor Conference and 20 in the
standing Labor Committee, patterned after ILO, are tripartite in character consisting of
representatives of the central and state governments, employers and workers. The main
objectives of these two establishments were promoting uniformity in labor legislation; laying
down of a procedure for the settlement of industrial disputes and discussing all matters of
national importance as between employers and employees and advises the government of India
on matters brought to it by the Government. The Indian labor Conference has contributed much
by discussing and evolving a consensus in respect of plan, proposals, particularly those having a
direct relevance to labor. In 1957 the standing labor committee had adopted the provision of the
code of discipline which is later endorsed by the Indian labor conference. The code has a direct
bearing on the various aspects of industrial disputes, strikes and lock-outs, recognition of trade
unions, unfair labor practices and redressal of grievance.

Code of discipline in Industry –

The code of Discipline, as drafted by a tripartite sub-committee appointed by the Indian Labor
Conference in 1957 and modified by the standing labor committee the same year, was
unanimously adopted by the Indian Labor conference at its 16th session in May 1958. The code,
which came into force from June 1, 1958 had been ratified by the employer’s and workers’
organizations.

To maintain Discipline in Industry (both in public and Private Sectors)

i. A just recognition by employers and workers of the rights and responsibilities of either party,
as defined by the laws and agreements.

ii. A proper and willing discharge by either party of its obligations consequent on such
recognition.

To Ensure Better Discipline in Industry :

The management and unions agree

i. That no unilateral action should be taken in connection with any industrial matter and that
disputes should be settled at appropriate level.

ii. That the existing machinery for settlement of disputes should be utilized with the utmost
expedition.

iii. That there should be no strike or lock-out without notice

iv. That affirming their faith in democratic principles, they bind themselves to settle all future
differences, disputes and grievances by mutual negotiation, conciliation and voluntary
arbitration.

v. That neither party will have recourse to a.) Coercion, b.) Intimidation, c.) Victimization, or d.)
Go-slow.

vi. That they will avoid a. Litigation, b. Sit-down and stay –in-strikes and c. Lock-outs.

Vii. That they will promote constructive cooperation between their representatives at all levels as
well as between workers themselves and abide by the spirit of agreements mutually entered into.

viii. That they will establish upon a mutually agreed basis a grievance procedure which will
ensure a speedy and full investigation leading to settlement.

Ix. That they will abide by various stages in the grievance procedure and take no arbitrary action
which would bypass this procedure

x. That they will educate the management personnel and workers regarding their obligations to
each other.

The management agrees

i. Not to increase work-loads unless agreed upon or settled otherwise.

ii. Not to support or encourage any unfair labor practice, such as

a. Interference with the right of employees to enroll or continue as union members

b. Discrimination, restraint or coercion against any employee because of recognized activity or

trade unions

c. Victimization of any employee and abuse of authority in any form.

iii. To take prompt action for

a. Settlement of grievances

b. Implementation of settlement awards, decisions and orders.

iv. To display in conspicuous places in the undertaking the provisions of this Code in local
languages

v. To distinguish between actions justifying immediate discharge and those where discharge
must be preceded by a warning, reprimand, suspension or some other form of disciplinary action
and to arrange that all such disciplinary action should be subject to an appeal through normal
grievance procedure.
vi. To take appropriate disciplinary action against its officers and members in case where
enquiries reveal that they were responsible for precipitate action by workers leading to
indiscipline, and

vii. To recognize the union in accordance with the criteria evolved at the 16th session of the
Indian Labor Conference held in May 1958.

The Union(s) agrees

i. `Not to engage in any form of physical duress or pressure

ii. Not to permit demonstrations which are not peaceful and not to permit rowdyism in
demonstration

iii. That their members will not encourage or cause other employees to engage in any union
activity during working hours, unless as provided for by law, agreement or practice

iv. To discourage unfair labor practices, such as

a. Negligence of duty

b. Careless operation

c. Damage to property

d. Interference with or disturbance to normal work,

e. Insubordination

v. To take prompt action to implement awards, agreements, settlements and decisions

vi. To display in conspicuous places in the union offices, the provisions of the code in the local
language(s) and

vii. To express disapproval and to take appropriate action against office-bearers and members for
indulging in action against the spirit of this code.

The standing Labor Committee in its 16th session held in October 1957, recommended the
following

steps in regard to the action to be taken against their constituents committing breaches of the
code:

i. To ask the unit to explain the infringement

ii. To give notice to the unit to set right the infringement within a specified time.
iii. To warn, and in cases of more serious nature to censure, the unit concerned for its actions
constituting the infringement

iv. To impose on the unit any other penalties open to the organization

v. To disaffiliate the unit from its membership in case of persistent violation of the code.

Wage Boards: - Non-statutory Central Wage Boards first came to be setup in 1957 primarily as a
result of the recommendations of the Second Five Year Plan observed that wages and allied
matters are the major source of frictions between employers and workers. The existing
machinery for the settlement of disputes namely Industrial Tribunals, has not given full
satisfaction to the parties concerned. A wage Board generally consisted of an impartial
Chairman, two other independent members, and two or three representatives of employers and
workers each. The most important function performed by a wage Board had been to determine
the wage structure for the industry concerned and to specify the categories of employees to be
brought under the purview of the wage fixation. In some cases, they were also asked to deal with
such questions as gratuity, hours of work and bonus. A study of the working of wage boards
shows that they worked mainly as forums of collective bargaining at the industry level. Now the
wage board system has fallen in disuse.

Collective Bargaining:-

The advent modern trade unions, the workers have been pressurizing their employers in a
concerted manner for improving the terms and conditions of employment, but the term
“Collective Bargaining” was seldom used for this concerted action. Sidney and Beatrice Webb
were the first to use the term Collective bargaining in 1891. According to Encyclopedia of social
sciences, “Collective Bargaining” is a process of discussion and negotiation between two parties,
one or both of whom is a group of persons acting in concert.

ILO considers collective bargaining as “negotiations about working conditions and terms of
employment between an employer and a group of employees or one or more employees’
organization with a view to reaching an agreement wherein the terms serve as a code of defining
the rights and obligations of each party in their employment relations with one another; fix a
large number of detailed conditions of employment; and during its validity, none of the matters it
deals with can in normal circumstances be given as a ground for a dispute concerning an
individual worker.

Hoxie holds, “Collective bargaining is a mode of fixing the terms of employment by means of
bargaining between an organized body of employees and an employer or an association of
employers usually acting through organized agents.

The essence of collective bargaining is a bargain between interested parties and not a decree
from outside parties. During initial periods, the subject-matters of collective bargaining were
confined mainly to wages and other pecuniary gains. Subsequently, hours of work and certain
aspects of physical working conditions also became subjects of joint negotiations. As trade
unions grew in strength, more and more subjects came under the purview of collective
bargaining. These include: wages, allowances, hours of work, physical working conditions,
fringe benefits, incentive payments, welfare amenities, economic security, job security,
promotion, retiral benefits, discipline, training, leave holidays, discharge and dismissal, layoff
and retrenchment, overtime work and payment, vacations, leave travel, technology and
technological changes, production and productivity, environment, and so forth.

The essential Features of Collective Bargaining

1. It is a process in which the terms and conditions of employment are determined jointly by the
employer and workers.

2. It is the representatives of workers and the employer or his agents who actually participate in
the bargaining is called Collective bargaining otherwise it is called individual bargaining.

3. The employer-employee relationship is a pre-condition for collective bargaining.

4. The main object is the determination of terms and conditions of employment through
negotiations and process of give and take.

5. The agreement arrived at during the course of bargaining may relate to number of subjects of
the terms of employment and working conditions or to only a single issue.

6. Collective bargaining is confined not only to employer and workers, but the state has also
come to play a notable role in regulating various aspects of collective bargaining.

7. The nature of collective bargaining is changeable and dynamic. With the changes taking place
in technology, economic order, political environment, structure of trade union organizations,
ownership of industrial enterprises, role of the government and so forth.

Process of Collective Bargaining :-

The main steps usually involved in collective bargaining include:

1. Presentation in a collective manner to the employer their demands by the employees,

2. Discussions and negotiations on the basis of mutual give-and-take for fulfilling the demands.

3. Signing of a formal agreement or arriving at an informal understanding, when negotiations

result in mutual satisfaction.

4. In the event of the failure of negotiations, a likely resort to strike or lock-out to force the
opposite party to come to terms.
Importance of collective Bargaining:- Collective bargaining has a significant in modern
industrial societies. The benefits it has conferred upon workers have been overwhelming. The
institution has also benefited the employers and managements in numerous ways. It has also
wider implications for the economy and society as a whole. The notable areas in which the
influence of Collective bargaining can be easily discerned are:

1. Improvement in conditions of workers: - It has considerably helped in securing a wide variety

of economic benefits for the workers in the form of higher wages, liberal allowances, fringe
benefits, economic security, shorter hours of work, better terms and conditions of employment
and physical working conditions.

2. Check on autocracy in Industry: - “Hiring and firing” of work men was considered the
prerogative of the employer. Collective bargaining has put an effective check on employers’
autocracy in regard to the laying down of terms and conditions of employment. The CB has led

to the promotion of industrial democracy.

3. Promotion of Lasting industrial peace: -Through CB the employers and workers are in a better
position to understand and appreciate the problems and difficulties of each other

4. Conducive to managerial Efficiency: - CB has also contributed towards improving managerial

efficiency and solution of specific problems. CB taking in a free and frank atmosphere also leads
to revelations of deficiencies in managerial policies and practices.

5. Development of Industrial Rules: - Successful conclusion of CB and incorporation of the

terms in collective agreements lead to the establishment of rules or standards to be observed by
both the parties and which may be legally enforceable documents.

6. Significant for Society and Economy: - CB has been exercising a potent influence on the
governmental policies and programs, social institutions, standard of living, distribution of
national income and economic and social development. CB has manifestations in politics,
legislation, government administration, religion, education and propaganda.

In the context of the importance of CB, Chamberlain has developed three theories, that is,
Marketing theory, Governmental Theory and Managerial Theory.

The Marketing theory views CB as contract for the sale of labor. According to this theory,
employees sell their labor on terms determined on the basis of contract, made through the
process of CB. It constitutes a process through which demand for and supply of labor are equated
in the labor market.

The Governmental Theory considers CB as a form of industrial government. It constitutes a

constitutional system in which the trade union and management participate to regulate the terms
and conditions of employment. The management administers the provisions of the contract as an
executive authority. The contract is viewed as a constitution, adopted by the representatives of
the trade union and management, in the form of a compromise or agreement.

The Managerial Theory views CB as a method of management. As both the trade union and
management participate in the deliberations and decision-making, the union representatives are
seen as participating in the management of the organization.

The process of negotiation between unions and employers in respect of the terms and conditions
of employment of employees, and about the rights and responsibilities of trade unions.

The term is reputed to have been coined by Beatrice Webb in the late nineteenth century to
describe a process alternative to that of individual bargaining between employer and individual
employees. Other writers have emphasized the conflict-resolution aspects of collective
bargaining, but in Britain the most important refinement was that made by Allan Flanders, who
defined it as a process of rule-making, leading to joint regulation in industry. The term is usually
seen as necessarily containing an element of negotiation and hence as distinct from processes of
consultation, from which negotiation is absent, and where outcomes are determined unilaterally
by the employer. Britain collective bargaining for many years has been, and been endorsed as,
the dominant and most appropriate means of regulating workers' terms and conditions of
employment, in line with ILO Convention No. 84.