Industrial Relations

Industry Relations comprises of two words, Industry, and Relations. Where industry covers the
production activity in which the group of workmen is engaged in, while the relations show the
relationship between the management and the workers within the industry.
Importance of Industrial Relations
1. Increased Productivity: With amicable industrial relations both the workers and
managers continue to work on their respective position and contribute towards the overall
productivity of the firm. Thus, IR ensures the continuity of production.
2. Reduced Industrial Disputes: An effective IR helps in the reduction of industrial
disputes as both the management and the workers maintain harmonious relations with each other
and work in unison towards the accomplishment of production objective.
3. Increased Morale: The peaceful industrial relations boost the morale level of the
employees as they feel that their interest coincides with that of the employer’s, and their efforts
will result in the overall profitability of the firm.
4. Minimization of Wastage: A good IR ensures reduced wastage as the resources – Man,
Machinery, Material are fully utilized and are effectively contributing towards the overall
productivity of the firm.
Thus, an effective IR is required to ensure higher production at less cost and increased profits. It
covers the system, rules, and procedures to protect the interest of the workmen and the
employers and to regulate the behavior of the employer i.e. the way he treats his workmen.
Approaches
1. Unitary Approach: The unitary approach is based on the notion that all the members of
the organization Viz. Managers, workers, and other staff have a common set of objectives,
purposes and interests and, therefore, work in unison towards the accomplishment of shared
goals. The unitary approach is based on the assumption that the overall profitability of the firm
could be increased if everyone in the organization has the common interest/purpose and works
unanimously towards its completion thereby establishing the harmonious relations. Here the
strikes are considered as unhelpful.
2. Pluralistic Approach: The pluralistic approach is just the opposite of unitary approach
which is based on the assumption that an organization is an association of powerful and different
sub-groups (management and trade unions), having different competing interests are mediated by
the management. The management and the trade unions (association of workers) are the
powerful sub-groups that may not agree with certain terms and conditions prevailing in the
organization and to resolve those management tries to mediate the interest of both the groups.
During mediation, if the management pays less attention to the needs of the workers then they
form unions in order to protect their interest and influence the management decision. The unions
so formed helps in balancing the power between the management and employees.
3.Marxist Approach: The Marxist approach is based on the basic assumption that the conflict is
regarded as the product of a capitalist society. This means that conflict arises not just because of
the rift between the employee and the employer, but also because of the division in the society
between those who owns the means of production (capitalists) and the ones who have only labor
to offer. The ultimate objective of the capitalists is to increase the productivity by paying
possible minimum wages to the workers due to which the latter feels exploited.
To overcome such situation workers form unions so as to safeguard their interests.
4.Human Relations Approach: The Human relations approach is propounded by Elton Mayo,
who is a humanist and believes in the positive nature of the employees. According to him, given
human initiatives from management, the employee positively listen and responds properly to
them and hence there is no room left for the conflict to arise.

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 Trade union
Trade union is a voluntary organisation of workers formed to protect and promote their interests
through collective action. It may be formed on plant basis, industry basis, firm basis, regional
basis or national basis.
Benefits of Trade Union:
Workers join trade union because of a number of reasons as given below:
1. A worker feels very weak when he is alone. Union provides him an opportunity to achieve his
objectives with the support of his fellow colleagues.
2. Union protects the economic interest of the workers and ensures a reasonable wage rates and
wage plans for them.
3. Union helps the workers in getting certain amenities for them in addition to higher wages.
4. Union also provides in certain cases cash assistance at the time of sickness or some other
emergencies.
5. Union organize negotiation between workers and management and are instruments for
settlement of disputes.
6. Trade union is also beneficial to employer as it organizes the workers under one banner and
encourages them follow to peaceful means for getting their demands accepted.
7. Trade union imparts self-confidence to the workers and they feel that they are an important
part of the organization.
8. It provides for promotion and training and also helps the workers to go to higher positions.
9. It ensures stable employment for the workers and opposes the motive of management to
replace the workers by automatic machines.
10. Workers get an opportunity to take part in the management and oppose any decision which
adversely effects them.
Functions of Trade Unions:
(1) Collective bargaining with the management for securing better work environment for the
workers/ employees.
(2) Providing security to the workers and keeping check over the hiring and firing of workers.
(3) Helping the management in redressal of grievances of workers at appropriate level.
(4) If any dispute/matter remains unsettled referring the matter for arbitration.
(5) To negotiate with management certain matters like hours of work, fringe benefits, wages and
medical facilities and other welfare schemes.
(6) To develop cooperation with employers.
(7) To arouse public opinion in favour of labour/workers.

Collective bargaining
Collective bargaining is a process of negotiating between management and workers represented
by their representatives for determining mutually agreed terms and conditions of work which
protect the interest of both workers and the management.
objectives:
The basic objective of collective bargaining is to arrive at an agreement between the
management and the employees determining mutually beneficial terms and conditions of
employment.
This major objective of collective bargaining can be divided into the following sub-objectives:
1. To foster and maintain cordial and harmonious relations between the employer/management
and the employees.
2. To protect the interests of both the employer and the employees.
3. To keep the outside, i.e., the government interventions at bay.

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4. To promote industrial democracy.
Importance:
1. Collective bargaining develops better understanding between the employer and the employees:
It provides a platform to the management and the employees to be at par on negotiation table. As
such, while the management gains a better and deep insight into the problems and the aspirations
of die employees, on the one hand, die employees do also become better informed about the
organizational problems and limitations, on the other. This, in turn, develops better
understanding between the two parties.
2. It promotes industrial democracy:
Both the employer and the employees who best know their problems, participate in the
negotiation process. Such participation breeds the democratic process in the organisation.
3. It benefits the both-employer and employees:
The negotiation arrived at is acceptable to both parties—the employer and the employees.
4. It is adjustable to the changing conditions:
A dynamic environment leads to changes in employment conditions. This requires changes in
organizational processes to match with the changed conditions. Among other alternatives
available, collective bargaining is found as a better approach to bring changes more amicably.
5. It facilitates the speedy implementation of decisions arrived at collective negotiation:
The direct participation of both parties—the employer and the employees—in collective decision
making process provides an in-built mechanism for speedy implementation of decisions arrived
at collective bargaining.
Employee Grievance.
Employee grievance refers to the dissatisfaction of an employee with what he expects from
the company and its management. A company or employer is expected to provide
an employee with a safe working environment, realistic job preview, adequate
compensation, respect etc.

Grievance may result from the following factors-

a. Improper working conditions such as strict production standards, unsafe workplace, bad
relation with managers, etc.
b. Irrational management policies such as overtime, transfers, demotions, inappropriate
salary structure, etc.
c. Violation of organizational rules and practices
The manager should immediately identify all grievances and must take appropriate steps to
eliminate the causes of such grievances so that the employees remain loyal and committed to
their work. Effective grievance management is an essential part of personnel management. The
managers should adopt the following approach to manage grievance effectively-
1. Quick action- As soon as the grievance arises, it should be identified and resolved.
Training must be given to the managers to effectively and timely manage a grievance.
This will lower the detrimental effects of grievance on the employees and their
performance.
2. Acknowledging grievance- The manager must acknowledge the grievance put forward
by the employee as manifestation of true and real feelings of the employees.
Acknowledgement by the manager implies that the manager is eager to look into the
complaint impartially and without any bias. This will create a conducive work
environment with instances of grievance reduced.

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 3. Gathering facts- The managers should gather appropriate and sufficient facts explaining
the grievance’s nature. A record of such facts must be maintained so that these can be
used in later stage of grievance redressal.
4. Examining the causes of grievance- The actual cause of grievance should be identified.
Accordingly remedial actions should be taken to prevent repetition of the grievance.
5. Decisioning- After identifying the causes of grievance, alternative course of actions
should be thought of to manage the grievance. The effect of each course of action on the
existing and future management policies and procedure should be analyzed and
accordingly decision should be taken by the manager.
6. Execution and review- The manager should execute the decision quickly, ignoring the
fact, that it may or may not hurt the employees concerned. After implementing the
decision, a follow-up must be there to ensure that the grievance has been resolved
completely and adequately.
Employees Discipline
Discipline means behaving in a right and desired manner. It connotes orderly and acceptable
behavior by the members of the organization. The employees are of different kinds and they
come from different background, cultures and experiences with different norms, values and
cultures. Hence, if they behave differently, the organizational objectives will be far beyond from
target of achievement.
Objectives of Employee Discipline

1. To obtain organizational rules, regulations, norms and values so that the organizational
activities are performed effectively.
2. To impart the environment of certainty despite the differences in individual backgrounds,
cultures, values and experiences, and other related organizational changes.
3. To develop a spirit of tolerance and desire to make adjustments among employees.
4. To give and seek direction and responsibility.
5. To promote the environment of respect for human personality and harmonious labor relation.
6. To motivate the employees for higher level of performance and so on.
Types Of Disciplinary Problems
All the employees of an organization are nor self-disciplined,rather some of them may create
disciplinary problems in the organization. Such problems are also called indiscipline behaviors
or misconducts.
The most frequently used disciplinary problems are as follows:

1. Attendance Related Problems

Attendance related problems are those indisciplinary actions that seriously create infractions for
managers. They are undoubtedly a serious problem facing managers. It is much more serious and
wide spread than other problems. Attendance problems are as follows:
- Absenteeism
- Abuse of sick leave
- Tardiness
- Late arriving
- Leaving work without permission.

2. Job Behavior Problems

Job behavior problems are related to on the job behavior of the employees. Such problems may
include carelessness, fighting, gambling, failure to use safety devices, dishonesty, refusal to obey

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orders,failure to report accidents, abuse of alcoholic liquids and drugs, sleeping or loafing on the
job, insubordination and so on, Most of these problems reflect direct infractions of organizational
rules and regulations, Moreover, such problems clearly indicate a violation of organizational
norms, values and culture; hence, such infractions are rarely difficult to address.

3. Dishonesty Problems
Dishonesty is another crucial disciplinary problem in an organization. This has traditionally
resulted one of the severe disciplinary problems found in organizations. Stealing, theft,
falsification of information, etc. are the examples of dishonesty problems. Such dishonest act
directly affects one's character and leads the employee separated from the organization even if it
was only a first offence.

4. Outside Activities Problems

These are those disciplinary problems that will take place outside organizational environment.
These are therefore, also called off-the-job activities. They are resulted from activities of
employees outside of their work and adversely affect the work performance. Unauthorized
strikes, wage garnishing, decorating outside criminal activities, working for competitors are the
examples of outside activities. Sometimes they impair the image of the organization. Hence, such
activities should be checked properly for which there will be a need for disciplinary actions.

Workers participation in management

Workers participation in management refers to the participation of non-managerial
employees in the decision-making process of the organization. Workers participation gives
employees the mental and psychological satisfaction and thereby increases their involvement in
the affairs of the organization.
Objectives of WPM in India are to:
1. Promote mutual understanding between management and workers, i.e., industrial harmony.
2. Establish and encourage good communication system at all levels.
3. Create and promote a sense of belongingness among workers.
4. Help handle resistance to change.
5. Induce a sense among workers to contribute their best for the cause of organisation.
6. Create a sense of commitment to decisions to which they were a party.
Levels of Participation:
1.Informative Participation:
This refers to management’s information sharing with workers on such items those are
concerned with workers. Balance Sheet, production, economic conditions of the plant etc., are
the examples of such items. It is important to note that here workers have no right of close
scrutiny of the information provided and management has its prerogative to make decisions on
issues concerned with workers.
Consultative Participation:
In this type of participation, workers are consulted in those matters which relate to them. Here,
the role of workers is restricted to give their views only. However the acceptance and non-
acceptance of these views depends on management. Nonetheless, it provides an opportunity to
the workers to express their views on matters involving their interest.
Associative Participation:
Here, the role of the workers’ council is not just advisory unlike consultative participation. In a
way, this is an advanced and improved form of consultative participation. Now, the management

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is under a moral obligation to acknowledge, accept and implement the unanimous decision of the
council.
Administrative Participation:
In the administrative participation, decisions already taken are implemented by the workers.
Compared to the former three levels of participation, the degree of sharing authority and
responsibility by the workers is definitely more in this participation.
Decisive Participation:
Here, the decisions are taken jointly by the management and the workers of an organization. In
fact, this is the ultimate level of workers’ participation in management.
Industrial dispute
“Industrial dispute means any dispute or difference between employers and employers or
between employers and workmen or between workmen and workmen, which is connected with
the employment or non-employment or the terms of employment or with the conditions of labour
of any person”
Causes of Industrial Disputes:
We can classify the causes of industrial disputes into two broad groups:
(i) Economic causes, and
(ii) Non-economic causes.
Economic causes include:
(i) Wages,
(ii) Bonus,
(iii) Dearness allowance,
(iv) Conditions of work and employment,
(v) Working hours,
(vi) Leave and holidays with pay, and
(vii) Unjust dismissals or retrenchments.
Non-economic causes include:
(i) Recognition of trade unions,
(ii) Victimization of workers,
(iii) Ill-treatment by supervisory staff,
(iv) Sympathetic strikes,
(v) Political causes, etc.
Following are some important results which arise out of these disputes.
(i) Strike:
When workers collectively cease to work in an industry, it is called strike. “It means a cessation
of work by a body of persons employed in an industry acting in combination; or a concerted
refusal of any number of persons who are or have been so employed to continue to work or to
accept employment; or a refusal under a common understanding of any number of such persons
to continue to work or to accept employment.”
The Industrial Disputes Act 1947, Section 2(a).
For trade union strike is the most powerful weapon for forcing the management to accept their
demands.
The following are the types of strikes:
(a) Economic Strike:
Most of the strikes of workers are for more facilities and increase in wage levels. In economic
strike, the labourers generally demand increase in wages, leave travel allowance, house rent
allowance, dearness allowance etc.
(b) Sympathetic Strike:

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When workers of one industry go on strike in sympathy with the workers of other industry who
are already on strike, it is known as sympathetic strike.
(c) Stay in Strike:
In this case, workers do not absent themselves from their place of work when they are on strike.
They keep control over production facilities but do not work. Such a strike is also termed as ‘pen
down’ or ‘tool down’ strike.
(d) Go Slow Tactics:
Here, workers deliberately work to rule and do their work in a very slow manner.
(ii) Boycott:
The workers may decide to boycott the company by not using its products. Such an appeal may
also be made to the public in general.
(iii) Picketing:
When workers are discourage from work by stationing certain men at the factory gates, such a
step is known as picketing. If picketing does not involve any violence, it is perfectly legal.
(iv) Gheraos:
In gherao workers force the employer to remain confined in their office for a considerably long
period so as to press for their demands.
(v) Lockout:
An employer may close the place of employment temporarily for those workers who are on
strike. Such a step is technically known as Lockout. It is reverse of a strike and is a very
powerful weapon in the hands of an employer to pressurize the workers to return to the place of
work.
According to the Industrial Dispute Act 1947, Lockout means the closing of-place of
employment or the suspension of work, or the refusal by an employer to continue to any number
of persons employed by him.
(vi) Termination of Service of Striking Employees:
The employer may also terminate the services of those workers who are on strike by blacklisting
them. Their lists are also circulated to other employers so as to restrict or minimize their chances
of getting employment from those employers.
Settlement of Disputes:
If industrial peace is the backbone of a nation, strikes and lockouts are cancer for the same as
they effect production and peace in the factories.
In the socioeconomic development of any country cordial and harmonious industrial relations
have a very important and significant role to play. Industry belongs to the society and therefore
good industrial relations are important from society’s point of view.
Nowadays, industrial relations are not bipartite affair between the management and the work
force or employees. Government is playing an active role in promoting industrial relations. The
concept of industrial relations has therefore, become a tripartite affair between the employees,
employers and the government concerned.
It is possible to settle the industrial disputes if timely steps are taken by the management. Such
disputes can be prevented and settled amicably if there is equitable arrangement and adjustment
between the management and the workers.
The following is the machinery for prevention and settlement of industrial disputes:
(i) Works Committees:
This committee represents of workers and employers. Under the Industrial Disputes Act 1947,
works committees exist in industrial establishments in which one hundred or more workmen are
employed during the previous year.

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It is the duty of the Works Committee to promote measures for securing and preserving amity
and good relations between the employers and workers. It also deals with certain matters viz.
condition of work, amenities, safety and accident prevention, educational and recreational
facilities.
(ii) Conciliation Officers:
Conciliation Officers are appointed by the government under the Industrial Disputes Act 1947.
The duties of conciliation officer are given below:
(i) He has to evolve a fair and amicable settlement of the dispute. In case of public utility service,
he must hold conciliation proceedings in the prescribed manner.
(ii) He shall send a report to the government if a dispute is settled in the course of conciliation
proceedings along with the charter of the settlement signed by the parties.
(iii) Where no settlement is reached, conciliation officer sends a report to the government
indicating the steps taken by him for ascertaining the facts, circumstances relating to dispute and
the reasons on account of which settlement within 14 days of the commencement of the
conciliation proceedings.
Boards of Conciliation:
The government can also appoint a Board of Conciliation for promoting settlement of Industrial
Disputes. The chairman of the board is an independent person and other members (may be two
or four) are to be equally represented by the parties to the disputes.
The duties of the board include:
(a) To investigate the dispute and all matters affecting the merits and do everything fit for the
purpose of inducing the parties to reach a fair and amicable settlement.
(b) A report has to be sent to the government by the board if a dispute has been settled or not
within two months of the date on which the dispute was referred to it.
(iii) Court of Enquiry:
The government may appoint a court of enquiry for enquiring into any industrial dispute. A court
may consist of one person or more than one person in and in that case one of the persons will be
the chairman. The court shall be required to enquire into the matter and submit its report to the
government within a period of six months.
(iv) Labour Courts:
As per the Second Schedule of the Industrial Dispute Act 1947.
The Government sets up Labour Courts to deal with matters such as:
(i) The propriety or legality of an order passed by an employer under the standing orders.
(ii) The application and interpretation of standing orders passed.
(iii) Discharge or dismissal of workmen including reinstatement, grant of relief to workers who
are wrongfully dismissed.
(iv) Withdrawal of any customary concession of privilege.
(v) Illegality or otherwise of a strike or lockout, and all other matters not specified in the Third
Schedule.
(v) Industrial Tribunals:
A Tribunal is appointed by the government for the adjudication of Industrial Disputes.
(vi) National Tribunal:
A National Tribunal is constituted by the Central Government for Industrial Disputes involving
questions of national importance.
(vii) Arbitration:
The employer and employees may agree to settle the dispute by appointing an independent and
impartial person called Arbitrator. Arbitration provides justice at minimum cost.