Chapter 8.

Industrial Relation
Concepts of IR
Dynamics of Industrial Relation

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Discipline & Grievance Management
Management of Industrial Disputes

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Partnership and the New Unionism

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Industrial Relation
Definition
Industrial relations encompasses a set of phenomena, both inside
and outside the workplace, concern with determining and

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regulating employment relationship
Industrial relations is part of management which is concerned with
the HR of the enterprise and employees and their interaction at the

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workplace
The relationship between employees & management in the day-to-
day working activities of industry

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Objectives of IR

The main objectives of IR is to bring sound and healthy relations

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ii) to safeguard the rights and interests of employee and employer
iii) To create mutually beneficial labour management relations

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iv) to avoid unhealthy atmosphere in the industry, like go-slows,
strikes, boycotts etc
v) to establish and maintain industrial democracy

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Characteristics of IR
IR is an outcomes of employment relationship in an industrial
enterprise (outcomes are collective agreement, decision by
councilor)

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IR systems create complex rules & regulation to maintain
harmonious relations
Government shape IR through laws, rules etc.

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IR has process: collective bargaining, industrial disputes, employee
participation etc.
Important players/actors are:
• Employees and their organization
• Employers and their organization
• Government

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Factors Affecting IR
Institutional factors
• Labor legislation, conflict resolving process
• Employers Federations
Economic factors

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• Demand for & supply of labor (interests of buyer and seller)
• Economic system
Technological factors

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• Automation
• computerization
Social & cultural factors
• Religion
• Customs & tradition of people
Political factors
• Political system
• Involvement of trade unions
Governmental factors
• Industrial policy 5
• Economic, export policy etc.
The need of Employer & Employees
The need of employee
The need of employer Seek how much they are
rewarded, their terms and

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Employees who will do conditions of employment and the
what they are told without way in which their work is
costing too much organized

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Engagement and Good working conditions, security
commitment of employment, a healthy and safe
working environment and the
scope to raise and resolve
grievances.

The relationship between labor and management is

HRM IR

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• Two important parties • Four parties- employee,
• Employee & employer employer, trade unions &
• Formulation of procedures & government

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policies of HR • Implementation
• Individual employee contacts • Employee can contact top
with immediate superior management in groups
• Grievance & disciplinary • Collective bargaining and
procedures resorted to solve forms of industrial resorted
conflicts to solve the problems
• Focus on employee • Focus on regulating
motivation relationship 7
Function of IR
Creating line of communication between workers and
management

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Establishing rapport b/n managers & managed
Ensuring better workers participation

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Protect the rights of their members
Negotiate wages and salaries
Negotiate work conditions

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Approaches to IR
Psychological
• Factors like motivation, leadership, group goals Vs. individual goals
Sociological

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• Difference in background create industrial conflict
Human relation
• This approach implies the relationship b/n human beings- freedom of

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speech, thoughts etc.
Gandhian
• Fundamental principle of truth- non-violence, co-existence of capital &
labor in peace
Dunlop’s
• According to Dunlop’s the fundamental components that shape or
outline the industrial relation system are: the context or setting in which
they interact, the common ideology held by the actors and the body of 9
rules that govern the system
Regulations and rules in industrial
relations
Job regulation aims to provide a framework of minimum rights
and rules

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Internal and external regulation
Internal regulation is concerned with procedures for dealing

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with grievances, disciplinary problems, and rules concerning
the operation of the employment relationship
External regulation is carried out by means of employment
legislation, the rules of trade unions and employers’
associations

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Regulations and rules in industrial
relations
Substantive and procedural rules

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Substantive rules settle the rights and obligations attached to
jobs

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Procedural rules are intended to regulate relationships,
especially those involving conflict, between the parties to
collective bargaining
Collective agreements
A collective agreement is a formal agreement between
management and trade unions dealing with terms and conditions
of employment or other aspects of the relationships between the
two parties. 11
Regulations and rules in industrial relations

Grievance procedure
Grievance is the sign of employee discontent with their job and its
nature

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Cause of grievance
Demand for individual wage adjustment

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Complaints about the incentive system
Complaints about job classification
Disciplinary discharge or lay-offs
Inadequacy of safety & health service
Violation of contract
Improper job assignment
Undesirable working condition
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Aspects of Discipline
a) Positive aspect- molding behavior
b) Negative aspect- penalties and other forms of punishment

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c) The red hot stove rule
• When one touch hot stove, the burn is immediate

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• The effect is consistent
• The effect is impersonal
d) Indiscipline
• Absenteeism
• Go-slow at work etc.

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Types of Industrial conflict
Two types:
1. Strikes

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2. Lock-outs
Strike is the result of injustice practice or perception of

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employees
Temporary cessation of work by groups of employees
Strikes are also two types:
• Primary and secondary

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Primary Strikes
Stay away strike- demonstration
Stay-in strike- stay at the workplace

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Wildcat strike- without prior notice
Go slow strike- reduce the speed of work

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Boycott- disrupting the normal functioning
Secondary strike
Conducted against third party
Lock-outs
Action of employer in temporarily closing down undertakings

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Collective bargaining
Collective bargaining is the establishment by negotiation and
discussion of agreement on the matters of mutual concern to
employers and unions covering the employment relationship

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and terms and conditions of employment
Collective bargaining can be regarded as an exchange

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relationship in which wage–work bargains take place between
employers and employees through the agency of a trade
union.
Collective bargaining is a power relationship that takes the
form of a measure of power-sharing between management
and trade unions

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Collective bargaining…
Arguments the union can use to fight for a pay rise include:
Inflation – prices have been rising and so workers need a pay

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rise just to keep their ‘real’ pay the same.
Profits – the business has made more profit and so workers

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should be rewarded accordingly.
Comparisons – other workers in other businesses/industries
have received pay increases.

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Collective bargaining…
Pay differentials – if managers or the lowest paid have had
their pay raised, so should all workers

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New practices – if workers are doing new jobs, using new
machinery/technology they deserve more pay

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Productivity – if workers are producing more output they
should be rewarded.

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Industrial conflict
settlement
Settlements of conflict

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Investigation
Mediation- an outsider with the consent of both parties

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Conciliation- representatives of both parties brought together
before a third party with a view to persuading to arrive at
some sort of settlement

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Industrial conflict
settlement
Voluntary arbitration- both parties & mediator or conciliator
agrees to submit the dispute to an impartial authority, whose

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decision are ready to be accepted
Compulsory Adjudication- used when the parties are failed to
arrive at settlement

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Required to arbitrate without the willingness of both parties
Either parties can apply to government

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Trade Unions after
globalization
Discuss about the role of Trade Unions after globalization?
Declining or expanding? Why?

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Effect of Trade Unions have been declining after globalization
The reason are:

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Proactive approach by employers
Profit sharing scheme
Less interest to Unions
Software and other professionals- loyal to their profession
Increase in educational level

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Views about IR
The unitary and pluralist views
The unitary view is one typically held by management who see their
function as that of directing and controlling the workforce to achieve

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economic and growth objectives. To this end, management believes
that it is the rule-making authority
It extols the virtue of teamwork

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Essentially autocratic and authoritarian, has sometimes been
expressed in agreements as ‘management’s right to manage’

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The unitary and pluralist
views
Pluralist view described industrial organization is a plural
society, containing many related but separate interests and

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objectives that must be maintained in some kind of
equilibrium
A balance of power between two organized interests and a

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sufficient degree of trust within the relationship (usually) for
each side to respect the other’s legitimate and, on occasions,
separate interests, and for both sides to refrain from pushing
their interest separately to the point where it became
impossible to keep the show on the road.

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Conditions for congenial IR
Existence of strong & democratic employees’ Unions
Existence of sound employers’ Unions

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Spirit of collective bargaining & willingness to resort voluntary
organization

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Maintenance of industrial peace

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