CHAPTER 3 : Industrial Relations

Definition: The Industrial Relations or IR encompasses the relationship between the

management and workmen and the role of a regulatory body to resolve any industrial
dispute.

As the name implies, 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. IR
plays a significant role in today’s working scenario where the harmonious relationship between the
employers and employees is needed to have an uninterrupted production. The Industrial Relations
mainly cover the following:

 Regulatory body to resolve industrial disputes.

 Collective Bargaining.
 The role of management, unions and government.
 Labor Legislation
 Worker’s Grievance Redressal system.
 Disciplinary policy and practice.
 Industrial Relations Training.

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.

To mention, good IR help:

1. Foster Industrial Peace:
Under the mechanism of IR, both employees and managers discuss the matter and
consult each other before initiating any actions. Doubts, if any, in the minds of either
party are removed. Thus, unilateral actions that prop confusion and misunderstanding
disappear from the scene. In this way, IR helps create a peaceful environment in the
organisation. Peace, in turn, breeds prosperity.

2. Promote Industrial Democracy:

Industrial democracy means the government mandated worker participation at various
levels of the organisation with regard to decisions that affect workers. It is mainly the
joint consultations, that pave the way for industrial democracy and cement relationship
between workers and management. This benefits the both. The motivated workers give
their best and maximum to the organisation, on the one hand, and share their share of
the fruits of organisational progress jointly with management, on the other.

3. Benefit to Workers:
IR benefits workers in several ways. For example, it protects workers against unethical
practices on the part of management to exploit workers by putting them under inhuman
working conditions and niggardly wages. It also provides a procedure to resolve
workers’ grievances relating to work.

4. Benefit to Management:
IR protects the rights of managers too. As and when workers create the problem of
indiscipline, IR provides mangers with a system to handle with employee indiscipline in
the organisation.

5. Improve Productivity:
Experiences indicate that good industrial relations serve as the key for increased
productivity in industrial organisations. Eicher Tractors, Alwar represents one such
case. In this plant, productivity went up from 32 per cent to 38 per cent between 1994
and 1997. This increase is attributed to the peaceful IR in the plant.

Similar other success stories abound in the country. As reported by V.S.P. Rao, Sundaram
Fasteners (A TVS group company which begged the prestigious GM award for the fourth
successive year in 1999 as a quality supplier of radiator caps) is well known for zero
breakdowns, zero accidents and zero defects. Company did not lose even a single day due to
strike. The per-employee productivity is comparable to the best in the world. One study rates
the company among the 20 most competitive companies in the Asia.

Scope of IR:
Based on above definitions of IR, the scope of IR can easily been delineated
as follows:
1. Labour relations, i.e., relations between labour union and management.
 2. Employer-employee relations i.e. relations between management and employees.

3. The role of various parties’ viz., employers, employees, and state in maintaining
industrial relations.

4. The mechanism of handling conflicts between employers and employees, in case

conflicts arise.

The main aspects of industrial relations can be identified as follows:

1. Promotion and development of healthy labour — management relations.

2. Maintenance of industrial peace and avoidance of industrial strife.

3. Development and growth of industrial democracy.

SCOPE OF INDUSTRIAL RELATIONS

 The concept of industrial relations has a very wide meaning and connotation. In the narrow
sense, it means that the employer, employee relationship confines itself to the relationship
that emerges out of the day to day association of the management and the labor.
 In its wider sense, industrial relations 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 term industrial relations has a broad as well as narrow outlook. Originally, industrial
relations was broadly defined to include the relationships and interactions between
employers and employees. From this perspective, industrial relations covers all aspects of
the employment relationship, including human resource management, employee relations,
and union- management (or labor) relations.
 Now its meaning has become more specific and restricted. Accordingly, industrial relations
pertains to the study and practice of collective bargaining, trade unionism, and labor-
management relations, while human resource management is a separate, largely distinct
field that deals with nonunion employment relationships and the personnel practices and
policies of employers.
 The scope of industrial relations is quite vast. The main issues involved here include the
following: – Collective bargaining – Machinery for settlement of industrial disputes – Standing
orders – Workers participation in management – Unfair labor practices.
The Functions of Industrial Relations
There are four main functions which industrial relations play and which can be used by managers to
ensure that relationships with employees are positive.

 The Function of Open Communication

Communication is important to any relationship, including a business relationship. Employees will
typically spend a very large chunk of their days at work and so it is important that they feel perfectly
comfortable with their manager and satisfied with the kind of work that they do.

The ABC rule really helps here. ABS stands for Always Be Communication and it is an important rule of
thumb to remember when relating with employees. A manager should inform their team that the work of
the manager is to make work a little easier for the employee and help them with whatever they need.
They should also seek to be clear about what they need from employees.

One way that you can stay on top of things with your team is to conduct surveys on a weekly basis
where your employees can give you feedback with the benefit of anonymity. It helps to maintain the flow
of communication and it engages your employees in an environment that is both safe and anonymous
for them.

 The Function of Recognition

Sometimes something as simple as saying some kind words to your employees can go a long way. In
fact, most employees feel starved of recognition at their places of work. When you show them gratitude
and appreciation it will mean a lot to them. It also a kind of reinforcement strategy, where you reinforce
the good work that they do by recognizing them for it. That inspires them to want to do more of it.

But don’t just give the praise in private. Give it in public as well for a much grander effect. When you
praise your employees in public, the rest of the team also gets inspired. When you reward your team for
work well done then a culture of reward and appreciation begins to develop between you and your
employees, which motivates them to work even harder at their tasks.

 The Function of Constant Feedback

You should offer feedback as frequently as you can to your employees. You can tell them about the
great work they’re doing as well as offer some constructive criticism on what they need to improve. That
is another essential part of a strong relationship between an employee and a manager.

Believe it or not, your employees actually want and value your feedback. They want to learn more and
grow in their capabilities and sills and feel like they are moving ahead, not just at their place of work, but
in life as well. When you give them guidance and little tips on what they need to do to get where they
want, they will appreciate you. Hold as many feedback sessions as you need to do this and make sure
you employees constantly feel like there is growth and development in their work and themselves.

 The Function of Investment

You should always show your employees that you care. You shouldn’t care about them as your
employees, but also as people. They need to know that you take their fulfillment seriously, both
personally and professionally. When you want your employees to succeed, they will respect you more
and will be more engaged in their work and in the company generally.
When an employee is happy and feels fulfilled in his personal life, his productivity at work is likely to
improve. So, if you want to see your employees do better, make a grand gesture of investing in their
personal lives and you will see massive improvements.

There are many ways in which you can invest in the personal lives of your employees, in meaningful
ways. For example, you can offer gym memberships that encourage your employees to take care of their
bodies and to be happier in the process. You can encourage them to pursue their hobbies, and to do
things that they find interesting outside of work. You could even offer time off from their job, so that they
can do some volunteer work.

Approaches To IR
The scenario of Industrial Relations(IR) is perceived differently by different people. For some, Industrial
Relations is related to class conflict, others perceive it in terms of mutual co-operation and still others
understand it in terms of competing interests of various groups. HR managers are expected to
understand these varying approaches because they provide the theoretical underpinnings for much of
the role of HRM.

The three popular approaches to Industrial Relations are Unitary approach, pluralistic approach, and
Marxist approach.

 Unitary Approach
Under unitary approach, Industrial Relations is grounded in mutual co-operation, individual treatment,
team-work and shared goals. Work place conflict is seen as a temporary aberration, resulting from poor
management, from employees who do not mix well with the organization’s culture. Unions co-operate
with the management and the management’s right to manage is accepted because there is no ‘we-they’
feeling. The underlying assumption is that everyone benefits when the focus is on common interest and
promotion of harmony. Conflict in the form of strikes is not only regarded as unnecessary but
destructive.

Advocates of the unitary approach emphasize on a reactive Industrial Relations strategy. They seek
direct negotiations with employees. Participation of government, tribunals and unions are not sought or
are seen as being necessary for achieving harmonious employee relations.

The unitary approach is being criticized as a tool for seducing employees away from unionism and
socialism. It is also criticized as manipulative and exploitative.

 Pluralistic Approach
The pluralistic approach totally departs from the unitary approach. The pluralistic approach perceives:

1. Organizations as coalitions of competing interests, where the management’s role is to mediate

amongst the different interest groups.
2. Trade unions as legitimate representatives of employee interests.

3. Stability in Industrial Relations as the product of concessions and compromises between management
and unions

Legitimacy of the management’s authority is not automatically accepted. Conflict between the
management and workers is understood as inevitable and, in fact, is viewed as conducive for innovation
and growth. Employees join unions to protect their interests and influence decision-making by the
management.

Unions thus balance the power between the management and employees. In the pluralistic approach,
therefore, a strong union is not only desirable but necessary. Similarly, society’s interests are protected
by state intervention through legislation and industrial tribunals which provide orderly process for
regulation and resolution of conflict.

The theories on pluralism were evolved in the mid-sixties and early seventies when England witnessed a
resurgence of industrial conflicts. However, the recent theories of pluralism emanated from British
scholars, and in particular from Flanders and Fox. According to pluralists, industrial conflict is inevitable
and it needs to be contained within the social mechanism of collective bargaining, conciliation and
arbitration.

 Marxist Approach
Marxists, like the pluralists, regard conflict between employers and employees as inevitable. However,
pluralists believe that the conflict is inevitable in all organizations. Marxists see it as a product of the
capitalist society.

Trade unions are seen both as labour reaction to exploitation by capital, as well as a weapon to bring
about a revolutionary social change. Concerns with wage-related disputes are secondary. Trade unions
focus on improving the position of workers within the capitalist system and not to overthrow. For the
Marxists, all strikes are political.

Besides, Marxists regard state intervention via legislation and the creation of industrial tribunals as
supporting management’s interest rather than ensuring a balance between the competing groups. This
view is in contrast to the belief of the pluralists who argue that state intervention is necessary to protect
the overall interest of society.

To Marxists, the pluralist approach is supportive of capitalism, the unitary approach is anathema.
Consequently, enterprise bargaining, employee participation, co-operative work culture, and the like
which help usher in cordial Industrial Relations are not acceptable to Marxists. Such initiatives are
regarded as nothing more than sophisticated management techniques designed to reinforce
management control and the continuation of the capitalist system.
 TRADE UNIONS

Definition of 'Trade Union'

Labour unions or trade unions are organizations formed by workers from related fields
that work for the common interest of its members. They help workers in issues like
fairness of pay, good working environment, hours of work and benefits. They represent a
cluster of workers and provide a link between the management and workers.

An organization whose membership consists of workers and union leaders, united to

protect and promote their common interests. A trade union may be:
(a) A company union that represents interests of only one company and may not have
any connection with other unions. Also called house union, a company union is often a
bogus one and generally illegal.
(b) A general union that represents workers from several companies in the same
industry. Also called industrial union.
(c) A craft union that represents skilled workers in a particular field such as carpentry or
welding.

Principles of trade unionism

The principal purposes of a labor union are to

(1) negotiate wages and working condition terms,

(2) regulate relations between workers (its members) and the employer,

(3) take collective action to enforce the terms of collective bargaining,

(4) raise new demands on behalf of its members, and

(5) help settle their grievances.

The purpose of these unions is to look into the grievances of wagers and present a
collective voice in front of the management. Hence, it acts as the medium of
communication between the workers and management.

Regulation of relations, settlement of grievances, raising new demands on behalf of

workers, collective bargaining and negotiations are the other key principle functions that
these trade unions perform.
The Indian Trade Union Act, 1926, is the principle act which controls and regulates the
mechanism of trade unions. In India, political lines and ideologies influence trade union
movements. This is the reason why today political parties are forming and running trade
unions.

Top 6 Problems faced by Trade Unions in India

Some of the major problems faced by trade unions in India are as follows: 1. Small Size 2.
Poor Finance 3. Politicisation 4. Multiplicity of Unions 5. Lack of Enlightened Labour Force
6. Miscellaneous Problems.

1. Small Size:

According to the veteran trade union leader V.V. Giri, “the trade union movement in
India is plagued by the predominance of small sized unions”. To quote there were 9,023
trade unions submitting returns during the year 1992. The total membership of these
unions was 57.4 lakhs, with an average membership of 632 per union. Nearly three-
fourths of the unions have a membership of less than 500. Smallness in size of the union
implies, among other things, weakness in bargaining power.

2. Poor Finance:

Small size of unions has its direct bearing on its financial health. Total income and total
expenditure of 9,073 trade unions with a membership of 57.4 lakhs were Rs. 3,238 lakhs
and Rs. 2,532 lakhs respectively in 1992. The per member income and expenditure, thus,
come to Rs. 56.4 and Rs. 44.1 respectively”. These are, by all means, very low. It is the
small size of trade unions accompanied by small subscriptions; the trade unions cannot
undertake welfare activities.

3. Politicisation:

A serious defect of the trade union movement in India is that the leadership has been
provided by outsiders’ especially professional politicians. Leaders being affiliated to one
or the other party, the unions were more engrossed in toeing the lines of their political
leaders than protecting workers’ interests.

Ironically, in many cases, the political leaders possess little knowledge of the background
of labour problems, fundamentals of trade unionism, the techniques of industry, and
even little general education. Naturally, unions cannot be expected to function efficiently
and on a sound basis under the guidance of such leaders.

4. Multiplicity of Unions:
Of late, trade unionism in India is also characterised by multiplicity of unions based on
craft, creed and religion. This is well indicated by the socio-political realities after the
mandalisation of polity and heightened sectarian consciousness after the demolition of
the disputed structure of Ayodhya.

As noted earlier, the multiplicity of unions is mind-boggling in the DTC (50), the SAIL (240)
and the Calcutta Corporations (100). The implication of multiplicity of trade unions is that
it leads to union’s rivalry in the organization. Obviously, multiplicity of unions contributes
to fragmentation to workers leading to small-sized unions.

5. Lack of Enlightened Labour Force:

The lack of an enlightened labour force capable of manning and conducting the
movement efficiently, purposefully and effectively has been a major problem in the
development of trade unions in the country. Lack of education, division by race religion,
language and caste, migratory nature, lack of self consciousness, and non-permanent
class of workers have been attributed as the causes for the lack of enlightened labour
force in India.

6. Miscellaneous Problems:

The other problems from which trade union movement has suffered include:

(i) The majority of registered unions are independent unions as only 16,000 units out of
50,000 registered unions are affiliated to the Central Trade Unions (CTUs). One possible
reason for this IS the educated workers’ preference to the independent unions,

(ii) It is also found that about 90% of workers in the public sector are unionized while in
case of the private sector only 30 % workers are unionized”. This is a World-Wide trend,
not only featuring in India. But it has a serious implication for trade union movement in
India as more and more public sector undertakings are privatized. In turn, the trade union
membership is to decline, a trend already visible by now.

(iii) Given the fast changing industrial scenario, jobs are moving from the organized
formal sector to informal sector. However, the unorganised sector which constitutes
about 90% of the total work force does not come under the purview of the trade unions.

The Second Five-Year Plan scanned the defects of the trade union movement in India as
follows:

“Multiplicity of trade unions, political rivalries, lack of resources, disunity in the ranks of
workers etc., are some of the major weaknesses in a number of existing unions”.
Objectives of Trade Union:

The following are the objectives of trade union:

(1) To improve the economic lot of workers by securing them better wages.

(2) To secure for workers better working conditions.

(3) To secure bonus for the workers from the profits of the enterprise/organization.

(4) To ensure stable employment for workers and resist the schemes of management which
reduce employment opportunities.

(5) To provide legal assistance to workers in connection with disputes regarding work and
payment of wages.

(6) To protect the jobs of labour against retrenchment and layoff etc.

(7) To ensure that workers get as per rules provident fund, pension and other benefits.

(8) To secure for the workers better safety and health welfare schemes.

(9) To secure workers participation in management.

(10) To inculcate discipline, self-respect and dignity among workers.

(11) To ensure opportunities for promotion and training.

(12) To secure organizational efficiency and high productivity.

(13) To generate a committed industrial work force for improving productivity of the system.

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.

FUNCTIONS OF TRADE UNION:

Some of the most important functions of the trade union are as follows: i. Increasing Co-
operation and Well-being among Workers ii. Securing Facilities for Workers iii. Establishing
Contacts between the Workers and the Employers iv. Trade Unions working for the Progress of
the Employees v. Safeguarding the Interests of the Workers vi. Provision of Labor Welfare.

i. Increasing Co-operation and Well-being among Workers:

The modern industry is complex and demands specialization in jobs. This results in extreme
division of labor, which leads to the growth of individualism and development of impersonal
and formal relationships. There is no common unifying bond among the workers.

It is in this context that the trade unions come into the picture and they promote friendliness
and unity among the workers. Besides this, the trade unions also discuss the problems, which
are common to all the workers. It is a platform where workers come together and know each
other. The trade unions also provide some kind of entertainment and relaxation to the workers.

ii. Securing Facilities for Workers:

Most of the industrialists are not very keen on providing the facilities and proper working
conditions to the workers. They are more interested in getting their work done to the
maximum extent. In such conditions, trade unions fight on behalf of the workers and see that
the facilities have been provided by the management.

iii. Establishing Contacts between the Workers and the Employers:

In present days, there are many industries, which have grown into giants. A single unit in a
particular industry may employ hundreds of employees. Many times a worker or employee
may not have a chance to see their managers. In this situation, the workers are not able to
express their grievances before their employers, and even the management does not know the
difficulties faced by the workers.
The trade unions play an important role in bringing to the notice of the employers the diffi-
culties and grievances of the employees. They try to arrange face-to-face meetings and thus try
to establish contacts between the employees and the employers.

iv. Trade Unions working for the Progress of the Employees:

The trade unions try to improve the economic conditions of the workers by representing their
cases to the employers and try to get adequate bonus to the workers.

v. Safeguarding the Interests of the Workers:

Most of the industries try to exploit the workers to the maximum. They do not provide any
benefits such as increasing their wages, granting sick leaves, giving compensation in case of
accidents, etc. The workers are not made permanent even after many years of service and in
some cases they are removed from service summarily. The trade unions provide security to the
employees in such situations.

vi. Provision of Labor Welfare:

The economic conditions of the industrial workers in India are very poor. The standard of
living is very low. A majority of industrial workers in India are illiterate or semi-literate. It is
the responsibility of the trade unions to get them proper housing facilities and promote the
socio-economic welfare of the laborers. The trade unions also try to arrange educational
facilities for the children of the workers.

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.

Features of Trade Unions

The Features of trade unions are :
1. It is an association either of employers or employees or of independent workers. They may consist
of :
o Employers’ association (eg. Employer’s Federation of India,Indian paper mill association, etc.)
o General labor unions
o Friendly societies
o Unions of intellectual labor (e.g. All India Teachers Association)
2. It is formed on a continuous basis. It is a permanent body and not a casual or temporary one. They
persist throughout the year.
3. It is formed to protect and promote all kinds of interests –economic, political and social-of its
members. The dominant interest with which a union is concerned is, however, economic.
4. It achieves its objectives through collective action and group effort. Negotiations and collective
bargaining are the tools for accomplishing objectives.
5. Trade unions have shown remarkable progress since their inception; moreover, the character of trade
unions has also been changing. In spite of only focusing on the economic benefits of workers,the
trade unions are also working towards raising the status of labors as a part of industry.

Need for Trade Union

 Trades unions are essential for the protection of workers in the world of work. The
individual is weak and easily exploited where there are no unions around; I have witnessed
some of the horrendous practices employers get up to when there is no union protection for
workers.
 Unions are necessary where this sort of abuse is prevalent; needless to say there was no
union at this plant which has since closed down.

Why do workers join unions?

6 reasons for joining a union -

People who aren't in a union or don't know anyone in a trade or labor union often unsure
what labor unions do and why someone would join. A labor union is an organization of
workers formed to further the social and economic interests of its members.

The nature of work in the world is changing. Employers are trying to shed responsibility
for providing health insurance, good pension coverage, reasonable work hours and job
safety protections. Perhaps a logical starting point is to ask this basic question: why do
workers join unions? The fact is that there are almost as many reasons for joining a union
as there are union members. I would like to focus the six reasons for joining a union.

1. Economic reasons
For higher wages, increased benefits, shorter hours and improved working conditions are
certainly important reasons for joining a union.

2. Job security
One basic human need is security. In the work environment, employees find themselves
in a dependent relationship on their bosses and on what they probably view as
impersonal organizations. They want to know that their jobs will exist in the future and
that they will be protected against unfair or arbitrary treatment. Anyway, with the
growth of technological change, however, workers feel especially vulnerable to job loss.
For example, several thousand robots are now being utilized in manufacturing, with
continued growth expected for the use of robotics in the near future.

3. Social reasons
Men and women are social beings. Therefore, workers have a strong need to be accepted
by their peers, to belong, and to go along with others. Some unions offer attractive
benefits, such as insurance. Peer pressure may also cause workers to join unions.

4. Recognition
Some employees have found that the union structure offers them an opportunity to gain
recognition not available to them in the business organization. For example, a worker
with little education may serve on a shop committee or even be elected as a position of
influence, such as steward or officer in the local.

5. Participation
Many workers have explained their union membership in terms of their desire to obtain a
voice in decisions that affect them in their working environment. To other workers who
feel lost in our large, complex, industrial society, the union is viewed as a last hope that
they will be able to influence their destiny.

6. Compulsion
Aside from social pressure to join a union, some workers become union members simply
because the employment contract requires them to do so. It would appear that unions
serve a broad network of employee needs.

One of the big reasons workers join a union is to ensure fair treatment in the workplace.
As a union member, you have a strong collective voice for negotiating with employers
about pay & wages, work hours, benefits - including retirement plans, health insurance,
vacation and sick leave, tuition reimbursement, etc., Union members earn more money,
have better benefits, and help employers create a more stable, productive workforce in
which workers have a say in improving their jobs.

All India Trade Union Congress

The All India Trade Union Congress (AITUC) is the oldest trade union federations in India. It
is not Politically affiliated to any political party including the Communist Party of India. But itself
is the third largest Communist Party in India after CPI and CPI(M). According to provisional
statistics from the Ministry of Labour, AITUC had a membership of 2,677,979 in 2002.[1]
It was founded on 31 October 1920 with Lala Lajpat Rai as its first president[2] in Bombay by Lala
Lajpat Rai, Joseph Baptista, N. M. Joshi,[3] Diwan Chaman Lalland a few others and, until 1945
when unions became organised on party lines, it was the primary trade union organisation in
India. Since then, it has been associated with the Communist Party of India.
AITUC is governed by a body headed by National President Ramendra Kumar and General
Secretary Gurudas Dasgupta, both the politician affiliated with Communist Party of India.
AITUC is a founder member of the World Federation of Trade Unions. Today, its institutional
records are part of the Archives at the Nehru Memorial Museum & Library, at Teen Murti House,
Delhi.[4]

Indian National Trade Union Congress

 Indian National Trade Union Congress (INTUC) is the trade union wing of the Indian
National Congress. It was founded 3 May 1947 and is affiliated with the International Trade
Union Confederation. According to provisional statistics from the Ministry of Labour, INTUC had
a membership of 3,892,011 in 2002.

 Key
G. Sanjeeva Reddy, President
people

 Objectives of INTUC
 To establish an order of society which is free from hindrance in the way on an all round
development of its individual members, which fosters the growth of human personality in all its
aspects and goes to the utmost limit in progressively eliminating social political or economic
exploitation and inequality, the profit motive in the economic activity and organisation of society
and the anti-social concentration in any form.
 To place industry under national ownership and control in suitable form in order to realise
the aforesaid objectives in the quickest time.
 To organise society in such a manner as to ensure full employment and the best
utilisation of its manpower and other resources.
  To secure increasing association of the worker in the administration of industry and their
full participation in its control.
 To promote generally the social civic and political interest of the working class to secure
an effective and complete organisation of all categories of workers, including agricultural labour.
 To guide and co-ordinate the activities of the affiliated organisations.
 To assist and co-ordinate the activities of the affiliated organisations.
 To assist in the formation of trade unions.
 To promote the organisation of workers of each industry on a nationwide basis.
 To assist in the formation of Regional or Pradesh Branches or Federations.
 To secure speedy improvement of conditions of work and life and of the status of the
workers in industry and society.
 To obtain for the workers various measures of social security, including adequate
provision in respect of accidents, maternity, sickness, old age and unemployment.
 To secure a living wage for every worker in normal employment and to bring about a
progressive improvement in the workers standard of living.
 To regulate hours and other conditions of work in keeping with the conditions of the
workers and to ensure the proper enforcement of legislation for the protection and up-lift of
labour.
 To establish just industrial relations.
 To secure redressal of grievances, without stoppages of work, by means of negotiations
and conciliation and failing these by arbitration or adjudication.
 To take recourse to other legitimate method, including strikes or any suitable form of
satyagraha, where adjudication is not applied and settlement of disputes within a reasonable
time by arbitration is not available for the redress of grievances.
 To make necessary arrangements for the efficient conduct satisfactory and speedy
conclusion of authorised strikes or satyagraha.
 To foster the spirit of solidarity, service, brotherhood co-operation and mutual help
among the workers.
 To develop in the workers a sense of responsibility towards the industry and community.
 To raise the workers' standard of efficiency and discipline.

Centre of Indian Trade Unions

Centre of Indian Trade Unions, CITU is a National level Trade Union in India politically
affiliated to the Communist Party of India (Marxist) as its trade union wing and is a spearhead
of the Indian Trade Union Movement. The Centre of Indian Trade Unions is today one of
biggest assembly of workers and classes of India. It has strong unchallangeable presence in
the Indian state of Tripura besides a good presence in West Bengal, Kerala and Kanpur.
They have an average presence in Tamil Nadu and Andhra Pradesh.
 4th CITU West Bengal state conference poster
 According to the provisional statistics from the Ministry of Labour, CITU had a membership of
3,222,532 in 2002.[1]
 Tapan Sen is the General Secretary of CITU and K.Hemalata is the president.

Hind Mazdoor Sabha

The Hind Mazdoor Sabha (HMS, a Hindi name meaning "Workers Assembly of India") is a national
trade union centre in India.

History
The HMS was founded in Howrah in west bengal on 29 December 1948, by socialists, Forward
Bloc followers and independent unionists. Its founders included Basawon Singh (Sinha), Ashok
Mehta, R.S. Ruikar, Maniben Kara, Shibnath Banerjee, R.A. Khedgikar, T.S. Ramanujam, V.S.
Mathur, G.G. Mehta. R.S. Ruikar was elected president and Ashok Mehta general secretary. HMS
absorbed the Royist Indian Federation of Labour and the Hind Mazdoor Panchayat, which was formed in
1948 by socialists leaving the increasingly communist dominated AITUC. In March 1949, HMS claimed
to have 380 affiliated unions with a combined membership of 618 802.

Membership
According to provisional statistics from the Ministry of Labour, HMS had a membership of 3,342,213 in
2002.(13% of the total trade union membership in the country).

All India Railwaymen's Federation, the largest trade union in the Indian Railways with a membership of
1.4 million is affiliated with Hind Mazdoor Sabha. All India Port and Dock Workers Federation, the largest
trade union representing workers at India's 12 major government-owned ports is also affiliated with the
Hind Mazdoor Sabha.

International affiliations
In 1949 HMS became a founding member of the ICFTU. Currently, it is affiliated with the International
Trade Union Confederation.
 CHAPTER 4: EMPLOYEE ISSUES
Meaning of Salary
The term salary is defined as the remuneration paid to the clerical and managerial personnel
employed on monthly or annual basis. Thus, salary is a fixed compensation paid by the
employer to his employees for the provided services to the firm.

Meaning of Wage
Wage is the payment for labour or services to a workers especially remuneration on an hourly,
daily or weekly basis or by the piece.

According to Benham, “Wage means the amount paid to the labour for his service to the
employer“.

“Wages is the payment to labour for its assistance to production.” -A.H. Hansen

According to payment of wage Act 1936, “Any award of settlement and production bonus, if
paid, constitute wage”. Thus, Wage are the remuneration paid for the service given by the
labourer.

Nature / Characteristics of Wage And Salary Administration

1. Employer and employee relationship: The salary/wage is a relationship between employer
and employee, where compensation is provided for the services rendered by the employee to
his employer.

2. Salary and Wages are same: salary and wage is a benefit provided by the firm to his
employees. There is no much difference among them. The only difference is salary is paid for
administrative type of work, Where as wages are paid for manual type of work.

3. Consideration of Benefit: Salary paid or allowed in the present or previous year due to the
required consideration of benefit.

Objectives Wage And Salary Administration

1. Maintain Wage And Salary Structure: The basis purpose of wage and salary administration
is to establish and maintain an equitable wage and salary structure.

2. Equitable Labour Cost Structure: It is concerned with the establishment and maintenance
of equitable labour cost structure i.e.,an optimal balancing of conflicting personnel interest so,
that the satisfaction of the employees and employers is maximized and conflicts are minimized.

3. Financial Aspects: The wage and salary administration is concerned with the financial
aspects of needs,motivation and rewards.

4. Payment in Accordance to Requirement: Employees should be paid according to the

requirements of their jobs i.e., highly skilled jobs are paid more compensation than low skilled
jobs.
5. Minimize Favouritism: To minimize the chances of favouritism.

Wage and Salary Administration

Wage and salary administration is a collection of practices and procedures used for
planning and distributing company-wide compensation programs for employees. These
practices include employees at all levels and are usually handled by the accounting
department of a company. Wage and salary administration procedures usually involve
activities such as calculating the number of hours worked in order to determine
compensation, administering employment benefits, and answering payroll questions
from employees. At the majority of companies and organizations, wages are usually
dispersed to all employees on a specific date. The workers in charge of salary
administration may also be charged with ensuring that the company adheres to federal
and local compensation laws.

Objectives and Principles of Wage and Salary Administration

The main objective of wage and salary administration is to establish and maintain an equitable
wage and salary system. This is so because only a properly developed compensation system
enables an employer to attract, obtain, retain and motivate people of required calibre and
qualification in his/her organisation. These objectives can be seen in more orderly manner from
the point of view of the organisation, its individual employees and collectively. There are
outlined and discussed subsequently:

Organisational Objectives:
The compensation system should be duly aligned with the organisational need and should also
be flexible enough to modification in response to change.

Accordingly, the objectives of system should be to:

1. Enable an organisation to have the quantity and quality of staff it requires.

2. Retain the employees in the organisation.

3. Motivate employees for good performance for further improvement in performance.

4. Maintain equity and fairness in compensation for similar jobs.

5. Achieve flexibility in the system to accommodate organisational changes as and when these
take place.

6. Make the system cost-effective.

Individual Objectives:
From individual employee’s point of view, the compensation system should have
the following objectives:
1. Ensures a fair compensation.

2. Provides compensation according to employee’s worth.

3. Avoids the chances of favouritism from creeping in when wage rates are assigned.

4. Enhances employee morale and motivation.

Collective Objectives:
These objectives include:
1. Compensation in ahead of inflation.

2. Matching with market rates.

3. Increase in compensation reflecting increase in the prosperity of the company.

4. Compensation system free from management discretion.

Beach has listed the five objectives of wage and salary administration:
1. To recruit persons for a firm

2. To control pay-rolls

3. To satisfy people, reduce the incidence of turnover, grievances, and frictions.

4. To motivate people to perform better

5. To maintain a good public image.

Principles of wage and salary administration:
The main principles that govern wage and salary fixation are three:
1. External Equity

2. Internal Equity

3. Individual Worth.

1. External Equity:
This principle acknowledges that factors/variables external to organisation influence levels of
compensation in an organisation. These variables are such as demand and supply of labour, the
market rate, etc. If these variables are not kept into consideration while fixing wage and salary
levels, these may be insufficient to attract and retain employees in the organisation. The
principles of external equity ensure that jobs are fairly compensated in comparison to similar
jobs in the labour market.

2. Internal Equity:
Organisations have various jobs which are relative in value term. In other words, the values of
various jobs in an organisation are comparative. Within your own Department, pay levels of the
teachers (Professor, Reader, and Lecturer) are different as per the perceived or real differences
between the values of jobs they perform.

This relative worth of jobs is ascertained by job evaluation. Thus, an ideal compensation system
should establish and maintain appropriate differentials based on relative values of jobs. In other
words, the compensation system should ensure that more difficult jobs should be paid more.

3. Individual Worth:
According to this principle, an individual should be paid as per his/her performance. Thus, the
compensation system, as far as possible, enables the individual to be rewarded according to his
contribution to organisation.
9 Advantages/importance of Wage and Salary Administration
Some of the Advantages of Wage and Salary Administration are:
1. Attract And Retain The Employees:
If an organisation possesses good wage and salary structure, it will attract and retain suitable,
qualified and experienced personnel.

2. Builds High Morale:

The wage rates established for various categories of jobs should be internally consistent; it will
motivate the employees of the organisation. It will build high morale of employees and act as an
incentive to greater employee productivity and efficiency.

3. Satisfied Employees:
A good wage and salary structure will keep the employees satisfied. There will be lesser labour
turnover, industrial disputes and employee grievances and exigencies.

4. Labour Cost Equitable:

A good wage and salary structure will maintain two types of equitabilities viz. (a) labour cost
equitable and (b) equitable wage and salary structure. Pay according to the work performed by
an employee. If an employee is performing hazardous work pay him more.

5. No Favourtism/Bias:
If an organisation has definite wage and salary structure, favourtism/bias can be avoided.

6. Clearly drawn line of promotion:

If a company has good wage and salary structure, it can have a definite sequence of jobs and
clearly drawn line of promotion.

7. Image of Progressive Employer:

A good and definite wage and salary structure would enable the company to project in the public
an image of a progressive employer.

8. Harmonious Industrial Relations:

A good wage and salary structure will serve as a sound basis for collective bargaining and enable
the maintenance of satisfactory union-management and employee- management relations.

9. Ensure Minimum Wages:

A good wage and salary structure should also conform to the minimum wage laws.
Difference Between Salary and Wages

BASIS FOR
SALARY WAGE
COMPARISON

Meaning A fixed pay that an A variable pay that an

individual draws for individual draws on the
the work done by him basis of hours spent in
on an annual basis. completing the certain
amount of work.
Skills Skilled personnel Semi-skilled or unskilled
Type of cost Fixed Variable
Rate of Fixed rate Wage rate
payment
Payment cycle Monthly Daily
Basis of Performance basis Hourly basis
payment

Paid to whom Employees Labor

Nature of Administrative-office Manufacturing-process
work work work
KRA Yes No
(Key resultant
area)
Extra pay for No Yes
extra hours
Top 8 Factors Influencing the Determination
of Wage Rates
The eight factors influencing the determination of wage rates are as follows: 1. Ability to
Pay 2. Demand and Supply 3. Prevailing Market Rates 4. Cost of Living 5. Bargaining of
Trade Unions 6. Productivity 7. Government Regulations 8. Cost of Training.

The wage payment is an important factor influencing labour and management relations.
Workers are very much concerned with the rates of wages as their standard of living is
connected with the amount of remuneration they get. Managements, generally, do not
come forward to pay higher wages because cost of production will go up and profits will
decrease to the extent.

Following factors influence the determination of wage rate:

1. Ability to Pay:
The ability of an industry to pay will influence wage rate to be paid, if the concern is
running into losses, then it may not be able to pay higher wage rates. A profitable
enterprise may pay more to attract good workers. During the period of prosperity,
workers are paid higher wages because management wants to share the profits with
labour.

2. Demand and Supply:

The labour market conditions or demand and supply forces to operate at the national and
local levels and determine the wage rates. When the demand for a particular type of
skilled labour is more and supply is less than the wages will be more. One the other hand,
if supply is more demand on the other hand, is less then persons will be available at lower
wage rates also.

According to Mescon,” the supply and demand compensation criterion is very closely
related to the prevailing pay comparable wage and on-going wage concepts since, in
essence to all these remuneration standards are determined by immediate market forces
and factors.

3. Prevailing Market Rates:

No enterprise can ignore prevailing wage rates. The wage rates paid in the industry or
other concerns at the same place will form a base for fixing wage rates. If a unit or
concern pays low rates then workers leave their jobs whenever they get a job somewhere
else. It will not be possible to retain good workers for long periods.
4. Cost of Living:
In many industries wages are linked to enterprise cost of living which ensures a fair
wages to workers. The wage rates are directly influenced by cost of living of a place. The
workers will accept a wage which may ensure them a minimum standard of living.

Wages will also be adjusted according to price index number. The increase in price index
will erode the purchasing power of workers and they will demand higher wages. When
the prices are stable, then frequent wage increases may not be required

5. Bargaining of Trade Unions:

The wage rates are also influenced by the bargaining power of trade unions. Stronger the
trade union, higher will be the wage rates. The strength of a trade union is judged by its
membership, financial position and type of leadership.

6. Productivity:
Productivity is the contribution of the workers in order to increase output. It also
measures the contribution of other factors of production like machines, materials, and
management .Wage increase is sometimes associated with increase in productivity.
Workers may also be offered additional bonus, etc., if productivity increases beyond a
certain level. It is common practice to issue productivity bonus in industrial units.

7. Government Regulations:
To improve the working conditions of workers, government may pass a legislation for
fixing minimum wages of workers. This may ensure them, a minimum level of living. In
under developed countries bargaining power of labour is weak and employers try to
exploit workers by paying them low wages. In India, Minimum Wages Act, 1948 was
passed empower government to fix minimum wages of workers. Similarly, many other
important legislation passed by government help to improve the wage structure.

8. Cost of Training:
In determining, the wages of the workers, in different occupations, allowances must be
made for all the exercises incurred on training and time devoted for it.
Top 3 Methods of Wage Payment
The following points highlight the top three methods of wage payments. The methods
are: 1. Time Rate System 2. Piece Rate System 3. Incentive Wage System.

 Method # 1. Time Rate System:

Under this method of wage payment, the workers are paid the wages on the basis of
time. In this system of wage payment, the workers are paid the wages on the basis of
time as, per hour, per day, per week, per fortnight or per month etc. This system does
not consider the production of the employees during this time.

The amount of wages under this system is calculated as under:

Wages = Time spent by the worker × Rate of wages according to time.

Suitability of Time Rate System:

This system of Wage Payment is particularly suitable in the following circumstances:

1. When it is not possible to measure the production in terms of units or in any other
terms.

2. When the work is of high standard.

3. When it is not possible to divide the production into units.

4. When the production is of the nature that it requires efficiency more than the speed.

5. When the worker is undertraining.

Merits of Time Rate System:

1. Simplicity:

It is very easy to calculate the amount of wage under this system.

2. Certainty of the Amount of the Remuneration:

This system of wage payment provides certainty of the amount of wage payment to the
employee. It develops the feeling of confidence and certainty among them.
3. High Quality of Production:

As this system of wage payment has no concern with quantity of production, quality of
production produced by the workers under this system is very high.

4. Proper Utilisation of the Factors of Production:

As this system is not related with speed, the workers perform their work in very
confident manner. They make the best Utilisation of the factors of production.

5. Co-Operation between Labour and Capital:

This system of wage payment brings the industrial peace because it satisfies the workers
and the industrialists. Thus, it develops harmony and cooperation between labour and
capital.

6. Best System for Artistic Work:

This system of wage payment is most suitable for artistic work.

Demerits of Time Rate System:

1. Need of Intensive Supervision:

This system requires intensive supervision over workers. It increases the cost of
supervision.

2. Lack of Incentive:

This system of wage payment makes equal payment to both the efficient and inefficient
workers. Therefore, efficient workers do not get any incentive for more production.

3. Encouragement of Labour Unions:

This system encourages labour unions. Sometimes, these labour unions misuse their
powers.

4. Misuse of Time by Workers:

Under this system of wage payment, the workers do not make proper Utilisation by their
time.

5. Fall in the Quantity of Production:

Under this system of wage payment, the quantity of production decreases because the
workers do not get any incentive for increasing the production.

6. High Cost of Production:

As the production is low and the payment to the worker is more, this system increases
the cost of production.

7. It Kills the Efficiency of Workers:

As this system does not make any difference between efficient and inefficient workers, it
kills the efficiency of efficient workers.

8. Increase in Cost Per Unit:

This system increases the cost per unit of production. Under this system, the cost per unit
of production is uncertain because the quantity of production differs from time to time.

9. Difficult to Measure the Efficiency:

Under this system of wage payment, it is very difficult to measure the efficiency of
workers because all the workers of equal status are paid the wages at equal rate.

 Method # 2. Piece Rate System:

Under this system of wage payment, the workers are paid the wages on the basis of
quantity and quality of work performed by them. Under this system, the rates of wages
are determined according to quantity and quality of work and the workers are paid
according to these rates.

The amount of wages to be paid to a worker under this system is calculated as under:

Wages = Units of production × Rate per unit.

Suitability of Piece Rate System:

This system of wage payment is very suitable in the following conditions:

1. When the work is of standard nature.

2. When the work can be measured easily.

3. When there is a great need of increase in the production.

Merits of Piece Rate System:

1. Incentive to More Work:

This system encourages the workers to do more and more work because they get their
wages according to their work.

2. Proper Utilisation of Machines:

Under this system, the workers use their machines and equipment with proper care
because they feel that if their machine is out of order, their work will be held up and their
wages will be low.

3. Increase in the Quantity of Production:

The system of wage payment gets more production because all the workers make their
best efforts to increase the production.

4. Best Utilisation of Time:

As the workers are paid according to their work, they make the best possible utilisation
of their time. They do not want to waste their time.

5. Decrease in the Cost of Production:

This system decreases the cost of production because the maximum production is done
by the workers in the minimum time. It decreases the cost per unit of production also.

6. Decrease in the Cost of Supervision and Administration:

This system of wage payment minimises the needs of supervision. It reduces the cost of
supervision.

7. Easy and Simple:

This system of wage payment is very easy to understand and very simple to calculate.

8. Improvement in the Standard of Living of Workers:

Workers get more wages because they produce more. It increases their efficiency and
productivity. It increases their remuneration also which improves their standard of living.

9. Mobility of Workers:
This system of wage payment increases the mobility of workers because they can change
their enterprise easily.

10. Measurement of the Efficiency of the Workers:

This system provides an opportunity to measure the efficiency of the workers. It makes
proper distinction between efficient and inefficient working staff of the enterprise.

11. Justified:

This system of wage payment justified also because the workers are paid the wages
according to the work performed by them.

12. Helpful in Maintaining Industrial Peace:

This system brings industrial peace also because it satisfies both the workers and the
employer.

Demerits of Piece Rate System:

1. Lack of Unity among Workers:

This system lacks the unity and mutual co-operation among workers. They feel
themselves competitor to each other.

2. Loss of Workers on the Failure of Machines etc.:

It because of any reason, the machines fail or the power fails, the work of workers is held
up and they lose their wages.

3. Misuse of the Factors of Production:

The workers do not pay proper attention towards the factors of production. They only
want to increase the speed of production.

4. Adverse Effect on the Health of Workers:

This system motivates the workers to do more and more work. It affects the health of
workers adversely.

5. Low Quality of Production:

This system of wage payment does not pay any attention on the quality of production. As
a result of it the quality of production falls down.
6. Unsuitable for Artistic Work:

This system is not suitable for artistic work because artistic work cannot be paid only on
the basis of quantity of production.

7. Uncertainty of Wages:

As the amount of wages depends upon the quantity of production, the actual amount of
wages to be paid is always uncertain. The workers also cannot estimate their
remuneration in advance.

 Method # 3. Incentive Wage System:

There are two basic systems of wage payment—time rate system and piece rate system.
Both the systems have their merits and demerits. No system can be considered suitable
for all times and under all circumstances. To maintain the merits of both the systems and
to overcome the demerits of these systems, some experts have developed the systems of
incentives wage.

These systems are also known as incentive wage systems, progressive wage system and
bonus schemes etc. Under these systems, both the time and speed are considered as the
basis of wage payment.

These systems provide incentives to the workers to produce more and more maintaining
the quality as well. The workers are paid bonus or premium for the additional work. It is
important to note that almost all the systems incentive wages provide for minimum
guaranteed wages to the workers.

Characteristics of an Ideal Incentive Wage System:

Important characteristics of an Ideal Incentive Wage System are as under:

1. It must be easy to calculate and to understand.

2. The standards of work must be determined on scientific basis.

3. It must establish direct relationship between efforts and remuneration.

4. It must give a guarantee of minimum wage to all the workers.

5. It must be in the interests of both the employers and the employees.

6. It must be flexible but stable.

7. It must be framed in the manner so that it may be used widely for all the activities of
the enterprise.

8. It must be helpful in increasing the production as well as productivity.

Advantages of Incentive Wage System:

i. There is increase in the prospect of workers to earn more. As shown by F. Herzberg
good salary is one of the hygiene factors in the absence of which people are unhappy and
dissatisfied. Wage incentive offers them the prospect of earning more.

ii. The scientific work study which is done before introducing a wage incentive plan brings
about improvements in methods, workflow, and man-machine relationship and so on.

iii. There is effective reduction in the supervision costs Closer supervision of employees
becomes unnecessary because workers become more responsible. Rather than the
supervisor chasing the workers the workers themselves sometimes chase the supervisor
for materials, tools, etc.

iv. Employees promptly expose all such problems before management which retard their
earnings. Management becomes more alert in areas such as flow of process materials,
adequate spares, etc.

v. Employees are encouraged to become “inventive”. They invent and adopt ways and
means to achieve their production targets with lesser exertion and lesser expense of
energy. They come forward with new ideas and suggestions.

vi. There is improvement in discipline and industrial relations. Go-slow and similar other
techniques are not resorted to by the workers to express their dissatisfaction with
management policies and practices. There is increase in workers’ punctuality and
decrease in absenteeism.

vii. There develops a feeling of mutual co-operation among the workers as their
operations are interdependent and any hold-up at one point may affect the production
and earning at other points.

Effects of Incentive Wage System:

Experience has shown that incentive compensation is not an unmixed blessing. It may
produce certain ill-effects unless precautionary steps are taken to check them in advance.

These ill-effects are as under:

i. There is tendency among the workers to sacrifice quality for the sake of quantity. This
calls for a very strict system of checking and inspection.

ii. In the absence of adequate provisions incentive payment brings about certain rigidity
in the operations. This makes it difficult for the management to revise norms and rates
following changes in technology, methods, machines, materials etc.

iii. Employees very often ask for compensation whenever production flow is disrupted
due to the fault of management.

iv. Unless greater vigilance is exercised there is a danger of workers disregarding safety
regulations.

v. Unless a maximum ceiling on incentive earning is fixed some workers tend to overwork
and undermine their health.

vi. Jealousies may arise among workers because some are able to earn more than others.
In the case of group systems, the fast workers may be dissatisfied with the efforts of the
slower members of the group; where heavy work is involved older workers in particular
are likely to be criticised for being too slow. One likely effect of this is the splitting up of
trade unions.

vii. The introduction of a system by results increases the amount and cost of clerical work
since it involves considerably more bookkeeping. This is particularly true when the
production is subdivided into many processes.

SOCIAL SECURITY
Broadly speaking, financial and social insecurity means inability or lack of
capacity of a person or individual to protect himself from the risks of
unemployment, sickness, industrial accidents or disability, old age and other
contingencies. Thus linked with problems of employees safety and industrial health
of workers is the question of provision of security to them by the society or the
government. In industrial undertakings, workers are often subject to periodic
unemployment due to sickness, industrial accidents, old age, or on account of
financial sickness or not so-efficient condition of business. These may incapacitate
a worker temporarily or permanently and lead to unemployment causing financial
misery and other consequences. Ordinarily, workers do not have financial
resources to cope up with these problems or alternative means of livelihood. In
these circumstances it is obligatory on the part of industrial establishment and the
government to help these workers and provide them security or what we call social
security. Social security is a system of protection or support provided by the
society or government to workers and their families in time of sudden calamity,
sickness, unemployment, injuries, industrial accidents, disablement, old age or
other contingencies. Social Security is “an attack on five giants that affect workers-
wants, disease, ignorance, squalor, and idleness. It is not a burden but a kind of
wise investments that offers good social dividends in the long run.”

Social security is a system of protection or support provided by the society or

government to workers and their families in time of sudden calamity, sickness,
unemployment, injuries, industrial accidents, disablement, old age or other
contingencies.

LABOR WELFARE

The Oxford dictionary defines Labor Welfare as “efforts to make life worth living
for workmen”. According to N.M. Joshi, Welfare work “covers all the efforts
which employers make for the benefit of their employees over and above the
minimum standards of working conditions laid down by the Factories Act and the
provisions of the social legislations providing against accident, old
age, unemployment and sickness”

The term refers to consider the welfare benefits under two basic categories, viz,
intra-mural and extra-mural. The following categorization is used by ILO The
International Labor Organization (ILO) Regional Conference described welfare to
mean "such services, facilities and amenities, which may be established outside or
in the vicinity of undertakings to enable the persons employed therein to work in
healthy and congenial surroundings and to provide them with amenities conducive
to good health and high morale". The services, facilities, sanitary and medical
facilities, arrangements for travel to and from work and for the accommodation of
workers employed at a distance from their homes, and such other services,
amenities and facilities, including social security measures as contribute to
improve the conditions under which workers are employed". In other words, labor
welfare services include all extramural and intramural welfare work, statutory and
non-statutory welfare facilities undertaken by the employers, government, trade
unions or voluntary agencies. They also include social security - measures which
contribute to workers welfare such as insurance, provident fund, gratuity, maternity
benefits, workmen's compensations, retirement benefits, etc.
LABOR WELFARE: INTRAMURAL

Health and Medical Facilities

A healthy workforce is of utmost importance to industry. The ILO in its
conventions and recommendations has laid down standards, which have had a
contributory effect on legislation in India. the ILO convention 25 concern sickness
insurance and medical facilities to be provided to an insured person
while convention 103 deals with maternity protection.

Canteen
The ILO in its recommendation 102 mentioned this facility and felt that a
competent authority in each country should guide establishments with regard to
nutrition, hygiene, finance, etc. In India the factories act places the responsibility
on state governments to make rules that in any specified factory with more than
with 250 workers, a canteen or canteens should be provide and certain standards
should be maintained.

Crèches
The factories act lays down that in any factory with more than 50 women workers
a crèche should be provided and maintained for children less than 6 years in a
clean and sanitary condition. The act state that the crèche should be under the care
of women trained in child care and should have adequate accommodation, lighting
and ventilation the state government is empowered to make rules in respect of
standards, equipment and facilities. Mothers are also to be given time to feed their
children at necessary intervals. The rules formed by state government lay down the
qualifications necessary for the crèche staffs. The need for kindergarten classes in
crèches for children between 3 and 6yearswasalsofelt Facilities for storing and
drying clothing:- It is only the Factories Act that has incorporated such a provision.
Under section 43 of the Act, “a state government may make rules for the provision
of suitable places for keeping clothing not worn during working hours and for the
drying of wet clothing”.

As per the Maharashtra Factories Rules 1963, “such facilities shall include the
provision of separate rooms, pegs, lockers or other arrangements approved by the
Chief Inspector in all classes of factories such as engineering workshops, iron and
steel works, oil mills, chemical factories, motor garages, tanneries etc.”
LABOR WELFARE: EXTRA-MURAL
Housing Facilities
Some of the industrial employers both in public and private sectors have provided
housing facilities to their employees. Almost all the public sector enterprises have
either provided or are in the process of providing housing facilities to their
employees. The employees who are not provided corporation’s quarters are paid
house rent allowance at some places.

Recreational Facilities
Recreation is commonly taken to be the opposite of work. It has an important
bearing on the individual’s personality as well as his capacity to contribute to the
social development. It affords the worker an opportunity to develop his sense of
physical and mental discipline. Music, dance, drama, sports and games, painting,
carving etc. are different forms of recreation.

Transport Facilities
The growth of industrial state and workshops outside the city has made
commuting a problem for workers. In India, since the public transport system is not
fully developed and hardly efficient, the fatigue of travel to and from work has a
detrimental effect on the attendance pattern of workers. The CLW after studying
the situation recommended that transport on a large scale is best provided by the
state; that the local bodies should stream line their operations, increase their fleet
and the frequency of buses especially to labor colonies, industrial estate and
township, and for carrying workers to and from night shift. They feel that
employers could help by giving conveyance allowance.

Educational Facilities
The pace of economic and social progress of a particular country largely depends
upon the quality of its workforce. Education plays a very important part in
motivating and enabling the working population for changes necessary for
accelerated progress and for their mental and physical development. This has been
recognized in our social and economic planning and a suitable financial outlay on
education has been made in different five-year plans. Improvement in the quality
of the industrial work force demands accelerated pace of economic development
for which education of workers, their families, and their children is very essential.

 REFER N/B FOR NEED FOR WAGE AND SALARY