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Introduction to Industrial Relations

Industrial relations are all about managing the relationship between employers and
employees in an organisation. It plays a critical role in ensuring smooth
communication, cooperation, and understanding between the two sides.

According to Edwards (2003), the term "employment relationship" is often used

instead of industrial relations.

• Employment relationship refers to the connection between an employer and an

employee, and it also includes the involvement of trade unions (which represent
employees) and the state/government (which represents the interests of both
employers and employees).

Key Points to Understand:

• Industrial Relations focus on the formal, structured relationships that develop due
to work, employment conditions, negotiations, rights, and responsibilities.
• It is not about personal friendships or casual relationships among individuals at
work.
• It excludes the moral and social elements of individual behavior that are not
directly linked to their employment role.
📚 Simple Definition:

Industrial Relations are the formal relationships between employees and employers
within an organisation, focusing on workplace rights, responsibilities, and cooperation,
often involving unions and government regulations.

🎯 In Short:

• It’s about how employees and employers work together.

• It’s about negotiating and maintaining a peaceful and fair workplace.
• It involves unions and government laws to protect both sides.

Different Stakeholders in Industrial

Relations

Industrial Relations involve several important groups who work together (or sometimes in
conflict) to maintain harmony in the workplace. The main stakeholders are:

1. Employees and Their Unions

a. Employees are the heart of the organization.
b. Unions represent employees and help them achieve better wages, working
conditions, and rights.
2. Employers and Their Associations
a. Employers look after the interests of the organisation.
b. They form associations to promote their collective interests and to deal with
issues related to workers and the government.
 3. The State/Government
a. The government acts as a regulator and protector for both employees and
employers.
b. It creates laws and monitors industrial relations to ensure fairness and
justice.

Approaches to Industrial Relations

Different theories or approaches have been developed to understand how industrial

relations work:

📌 (i) Unitary Approach

• Belief: Employer and employees share a common goal.

• View: The organization is like one big team, working together without conflicts.
• Focus: Loyalty, teamwork, and common interests.

(ii) Pluralistic Approach

• Belief: The organization is made up of different groups (managers, workers,

unions) each with their own interests.
• View: Conflicts are natural and unavoidable.
• Focus: Conflicts should be managed through negotiation, bargaining, and
compromise.
📌 (iii) Radical Approach (Marxian Approach)

• Belief: Society is divided into two classes:

➔ Capitalists (owners) and Labour (workers).
• View: There is a continuous power struggle between these two groups.
• Focus: Managing the power conflict between labour and capital.

(iv) Trusteeship Approach (Mahatma Gandhi’s Approach)

• Belief: Capital is a trust held for the welfare of society, not for individual selfish
gain.
• View: Employers should act as trustees, using wealth for the good of all.
• Focus: Responsibility, ethics, and social welfare.

📌 (v) Dunlop’s Systems Approach

• Belief: Industrial relations are like a system influenced by the environment.

• Components:
o Inputs: Actors (employees, employers, government), technology, market
conditions, ideologies.
o Processes: Collective bargaining, conciliation, arbitration, and legislation.
o Outputs: Rules and regulations governing the workplace.
• Focus: Understanding how environment and actors shape industrial relations.
Summary

Objectives of Industrial Relations

The main goals of industrial relations are to create a smooth, healthy, and productive work
environment. The objectives include:

1. Protect Interests
➔ Safeguard the rights and interests of both management and workers.
2. Develop Harmonious Relationships
➔ Create a peaceful environment in the organization to avoid conflicts and boost
productivity.
 3. Promote Industrial Democracy
➔ Allow workers to participate in decision-making processes, fostering a sense
of belonging and responsibility.
4. Prevent Conflicts, Strikes, and Lockouts
➔ Avoid disruptions by addressing issues early through dialogue and mutual
understanding.
5. Improve Workers' Economic Conditions
➔ Work towards better wages, benefits, and working conditions for employees.

Importance of Industrial Relations

Healthy industrial relations benefit both the organization and the employees. The
importance can be seen in the following ways:

1. Increased and Continuous Productivity

➔ A peaceful workplace leads to better focus, higher efficiency, and consistent
production.
2. Increased Motivation of Employees
➔ When employees feel valued and heard, they stay more motivated, loyal, and
committed.
3. Reduction in Disputes
➔ Fewer conflicts mean less disruption, saving time, money, and maintaining a
positive image of the organization.
4. Full Utilisation of Resources
➔ Human resources, machines, and materials are used effectively, leading to
maximum output with minimum wastage.
Trade Union: Roles, Types, Functions &
Problems

✏️ Definition (Trade Unions Act, 1926)

A Trade Union is any combination (temporary or permanent) formed mainly to:

• Regulate relations between workers and employers,

• Regulate relations among workers themselves,
• Regulate relations among employers themselves,
• Or impose restrictions on the conduct of any business or trade.
It includes federations of two or more trade unions too.

Role of Trade Union

Trade unions are collective bodies formed by workers to safeguard and advance their
interests. Their roles include:
 1. Protecting and Promoting Interests
➔ Economic (money), Political, and Social interests of members.
2. Encouraging Employee Participation in Management
➔ Workers get a say in decisions that impact them.
3. Improving Working Conditions
➔ Ensuring better safety, hygiene, fair wages, and respectful treatment.
4. Securing Social Security
➔ Helping workers access benefits like insurance, pensions, and medical care.
5. Solving Grievances
➔ Addressing worker complaints and issues fairly and quickly.

Types of Trade Unions

Trade Unions can be classified into four main types:

1. Plant Level Unions

➔ Workers from a single manufacturing plant form this union.

➔ Example: Workers of one automobile plant coming together.

2. Firm Level Unions
➔ Workers belonging to one specific firm form this union.

➔ Example: Employees across various branches of a company like Infosys forming

a union.
3. General Unions
➔ Members are from several firms within the same industry.

➔ Example: Workers from different hospitals forming a healthcare workers’ union.

4. Craft Unions
➔ Members share a common skill or trade like carpentry, plumbing, welding, etc.

➔ Example: A union of electricians across different companies.

Functions of Trade Unions

Trade Unions serve many roles which can be grouped into five key functions:

1. Militant Functions (To Fight for Rights)

• Ensuring fair wages, good working conditions, and respectable treatment.

• Methods include collective bargaining, negotiation, strikes, boycotts, gheraos,
and go-slow tactics.

2. Fraternal Functions (For Member Welfare)

• Providing monetary and non-monetary support like:

➔ Legal aid, education facilities, schools for children, libraries, recreation centers,
welfare activities.
• Publishing union journals or magazines.
• These activities depend on the funds collected from members.

3. Intramural Functions (Inside the Organization)

• Focused on improving working conditions within the workplace.

• Aim: Create a better environment inside the organization for employees.

4. Extramural Functions (Outside the Organization)

• Activities that enhance workers' lives and productivity outside their

office/workplace.
• Examples: Offering health facilities, education support, training programs, welfare
services.
5. Political Functions

• Involvement in political activities such as:

➔ Forming political parties, supporting specific policies, or influencing government
decisions to protect workers' interests.

Problems of Trade Unions in India

Trade Unions in India face several challenges that limit their effectiveness:

1. Uneven Growth

• Problem: Trade unions are strong only in a few states and industries.
• Reason: Industries are concentrated in limited areas, causing imbalance in union
development.

2. Limited Membership

• Problem: Fewer workers are joining unions, even though the number of unions is
increasing.
• Effect: Weak bargaining power of unions.
3. Multiple Unions (Union Rivalry)

• Problem: Multiple unions exist within the same organization.

• Effect: Internal conflicts weaken their collective strength and confuse the workers.

4. Financial Problems

• Problem: Unions face a shortage of funds.

• Reason:
➔ Low membership numbers
➔ Irregular subscription fees
• Effect: Unions cannot effectively fight for members’ interests.

5. Attitude of Union Members

• Problem: Many members are indifferent or passive.

• Effect:
➔ Lack of active participation
➔ Reduced effectiveness of union activities
➔ Difficulty in organizing collective actions

6. Outside Leadership

• Problem: Trade union leaders are often outsiders (like politicians, lawyers,
intellectuals) who have no direct work experience in industries.
• Effect:
➔ Leaders prioritize their personal political gains over workers’ welfare.
➔ Lack of genuine understanding of workers' real issues.
Industrial Dispute: Concept, Causes &
Machinery for Settlement

📌 Concept of Industrial Dispute

• Definition (Industrial Dispute Act, 1947):
Industrial dispute means any conflict or disagreement between:
➔ Employers and employers,
➔ Employers and workmen,
➔ Workmen and workmen.
• Nature of Disputes:
➔ Related to employment, non-employment, terms of employment, or conditions
of labor.
• Impact:
➔ Disputes are unhealthy for an organization.
➔ They bring internal issues into the public and harm productivity.
 • Types of Disputes:
➔ Individual Level: Wrong termination, compensation issues.
➔ Group Level (All employees): Wages, bonuses, profit-sharing, working hours.

Causes of Industrial Disputes

Industrial disputes arise from four major categories:

1. Psychological Causes

• Related to employee emotions and mindsets:

o Authoritative leadership without worker participation.
o Strict discipline with no flexibility.
o Difficulty in adjusting to different personalities.
o Issues of self-respect and recognition.

2. Institutional Causes

• Related to workplace systems and practices:

o Unfair working conditions.
o Management's refusal to accept unions.
o Exploitative behavior by employers.

3. Economic Causes

• The most common causes of disputes:

o Wage issues.
o Bonus payments.
o Shift timings.
o Benefits and incentives.
o Promotions and career growth opportunities.

4. Denial of Legal and Other Rights

• When legally mandated duties are not fulfilled:

o Violation of labor laws.
o Breaking agreements between employers and workers.
o Ignoring rights and entitlements provided under government laws.
5.5.4 Statutory Measures
(Under Industrial Disputes Act, 1947)
These are compulsory, legal methods created by the government:

1. Works Committees

• Formed in industrial units employing 100 or more workers.

• Purpose:
➔ Create a cooperative and consultative atmosphere between employers and
employees.
➔ Handle everyday issues before they become disputes.

2. Conciliation

• A neutral third party (Conciliation Officer or Board) helps resolve the dispute.
• Aim:
➔ Reduce differences between parties.
➔ Find a mutually agreeable solution.
• Note: The settlement is not binding unless accepted by both parties.

3. Arbitration

• A neutral third party (Arbitrator) is selected voluntarily by the disputing sides.

• Difference from conciliation:
➔ The arbitrator’s decision is binding on the parties.

4. Adjudication

• When other methods fail, disputes are referred to:

o Labour Courts
o Industrial Tribunals
o National Tribunals
• These bodies legally resolve disputes, and their decisions must be followed.

📌 5.5.5 Non-Statutory Measures

(Voluntary and Preventive Methods)
These are flexible and not mandated by law, but they encourage good labor relations:

1. Collective Bargaining

• Voluntary negotiation between employer and workers (or their representatives).

• Purpose:
➔ Settle disputes regarding wages, working conditions, and other terms of
employment.

2. Code of Discipline

• A set of guidelines created to maintain orderly behavior at the workplace.

• Helps prevent disputes by promoting: ➔ Respect, responsibility, and discipline.

3. Worker’s Participation in Management

• Workers are involved in management decisions.

• Benefits: ➔ Greater transparency,
➔ Workers feel valued,
➔ Reduces chances of misunderstandings and disputes.

4. Trade Unions

• Employees organize themselves into groups to protect their common interests.

• Functions: ➔ Represent employees,
➔ Negotiate with employers,
➔ Protect rights and benefits.

5. Grievance Procedure

• A systematic process to address employee complaints or grievances.

• Helps: ➔ Solve small problems early,
➔ Prevent grievances from becoming full disputes.
Employee Grievances: Concept, Causes,
and Grievance Redressal Procedure

📌 Concept of Employee Grievances

• A grievance is any discontent, dissatisfaction, or feeling of injustice experienced

by an employee regarding their work environment, management decisions, or
conditions of work.
• It occurs when an employee's expectations are not fulfilled by the employer.
• Grievances can be:
o Expressed (communicated openly)
o Unexpressed (felt internally but not shared)
• Grievances may be based on real or even imagined situations.

Keith Davis defines grievance as:

“Any real or imagined feeling of personal injustice which an employee has concerning his
employment relationship.”
5.6.2 Grievance Redressal Procedure
A formal grievance redressal system helps solve issues early, boosting employee
morale, concentration, and productivity.

Steps in Formal Grievance Redressal:

1. Identifying the Grievance

a. Recognizing dissatisfaction among employees.
2. Collection of Data and Evidences
a. Gathering facts, documents, and complaints related to the grievance.
3. Analysing Facts, Data, and Evidences
a. Studying all the information objectively.
4. Taking Decisions
a. Management decides the action needed to resolve the grievance.
5. Implementation and Follow-up
a. Apply the solution and monitor if the grievance is genuinely resolved.
Discipline: Concept, Aspects, and
Disciplinary Procedure

📌 5.7.1 Concept of Discipline

• Discipline means maintaining order and control in an organization.
• It helps employees follow rules, procedures, and regulations set by management.
 • Employee discipline ensures that acceptable work performance and behavior are
maintained.
• A strong employment relationship between managers and workers strengthens
discipline.
• Discipline creates a positive work environment and smoothens the organization's
functioning.

In short: Discipline is the bridge between goals and achievement.

Common Disciplinary Problems

Some examples of disciplinary problems at the workplace:

• Absenteeism (being absent without valid reasons)

• Unethical practices (like theft)
• Smoking in restricted areas
• Sexual harassment
• Fighting or violent behavior
• Bribery (giving or accepting bribes)
• Leaving without permission
• Failure to complete work on time
Steps in Disciplinary Procedure:

1. Framing Chargesheet

• First step after identifying misconduct or indiscipline.

• A chargesheet is created based on written complaints.
• It details the offense and allegations against the employee.
• The chargesheet is given to the employee (either by hand or post if refused).
• It serves as a show-cause notice, giving the employee a chance to explain.
• Suspension may be issued if the misconduct is severe.

2. Explanation by the Concerned Employee

• The employee submits an explanation for the misconduct.

• If the explanation is satisfactory, no further action is taken.
• If unsatisfactory, a full inquiry is initiated.
3. Enquiry

• If the explanation is insufficient, a full enquiry is conducted.

• The employee is informed about the date, time, and place of the enquiry.
• The enquiry officer's name is also mentioned in the notice.
• Suspension may be issued if the charge is serious.

4. Holding of Enquiry

• The employee presents their side of the case to the enquiry officer.
• The enquiry officer examines witnesses and investigates the incident in detail.

5. Order of Punishment

• If the misconduct/indiscipline is proved, disciplinary action is taken.

• Possible punishments include:
o Dismissal
o Discharge
o Demotion
o Withholding of increments
o Warning

Collective Bargaining: Concept, Types, Process, Problems & Essentials of

Effective Collective Bargaining
Concept: Collective bargaining is a voluntary negotiation process between employers
and trade unions (representing employees) to reach an agreement on regulating working
conditions. This agreement is known as the Collective Bargaining Agreement (CBA),
which acts as a labor contract. Through this process, both workers and employers can
negotiate and understand each other's positions, addressing various aspects like wages,
working conditions, and employee development.

Benefits of Collective Bargaining:

• For Workers: Collective bargaining gives workers the power to negotiate for their
rights, including better wages, working conditions, and benefits.
• For Employers: Helps employers understand employees' needs and manage the
workforce more effectively by reaching agreements that balance both parties'
interests.

Contents of Collective Bargaining:

• Cooperation between management and union.

• Working conditions (e.g., safety, hours, breaks).
• Wages and compensation (e.g., salary structure, bonuses, benefits).
• Occupational health (e.g., safety measures, health standards).
• Conflict management (e.g., resolving disagreements).
• Employee development (e.g., training, career growth opportunities).

5.8.1 Types of Collective Bargaining:

1. Conjunctive Bargaining:
a. In this type, one party benefits at the expense of the other.
b. Negotiation is typically focused on wages, bonuses, increments, etc.
c. Example: Workers may negotiate for a higher salary, but this may reduce the
employer’s profit.
2. Cooperative Bargaining:
a. Both the employer and union aim for a win-win situation.
b. Typically used when the focus is on technological changes, production
processes, and equipment updates.
c. Example: Employer and union agree on changes that improve efficiency
while also benefiting workers with training or new equipment.
 3. Productivity Bargaining:
a. The employer agrees to provide incremental benefits (wages, bonuses) if
workers agree to increase productivity.
b. Aimed at making the organization more successful through better
performance.
c. Example: If employees increase output, they receive higher bonuses or
better benefits.
4. Composite Bargaining:
a. Focuses on a broad range of issues related to workplace safety, policies,
and working conditions.
b. Workers aim to improve their working environment through negotiations.
c. Example: Workers and employers discuss the introduction of safer working
conditions, better facilities, and fairer work policies.

Process of Collective Bargaining:

1. Preparation for Negotiation:

a. This is the initial stage where both the employer and the union prepare for
the negotiation process.
b. Data Collection & Analysis: Both parties gather relevant data, including
information on the working environment, employee needs, and industry
standards.
c. Prioritizing Demands: The demands of each party are prioritized based on
importance and urgency.
d. Proposal Drafting: Each side prepares a Collective Bargaining Agreement
(CBA) proposal that outlines their demands and goals for the negotiation.
2. Conduct of Negotiation:
a. Negotiation Session: This stage involves direct communication between the
union representatives and the employer.
b. Scheduled Time and Place: The negotiation occurs at a designated date,
time, and location.
c. Presentation of Data & Alternatives: Both parties present the facts and
findings from their research, and alternative solutions are discussed.
d. Strategic Bargaining: The process requires tactics, where both sides might
employ strategies to reach a favorable outcome.
e. Outcome: The end result is the Collective Bargaining Agreement (CBA),
which serves as a contract between the employer and the union.
3. Implementation of CBA:
 a. Ratification: After the CBA is agreed upon by both parties, it is signed and
ratified by the union members.
b. Interpretation: Both the employer and union must ensure that the
provisions of the CBA are interpreted and implemented as agreed during
negotiations.

Essentials of Effective Collective Bargaining Between Union and

Management:

For collective bargaining to be successful, certain principles should be followed:

1. Consideration of Both Parties' Suggestions and Difficulties:

a. Both the employer and the union must be open to hearing the suggestions,
recommendations, and difficulties of the other party. This can increase the
likelihood of finding a mutual solution to the problem.
2. Evaluation of Alternative Solutions:
a. Both sides should evaluate multiple alternatives to solve a problem rather
than sticking to a single approach, ensuring a more flexible and constructive
negotiation process.
3. Respect Between the Parties:
a. Mutual respect is essential. Both parties should treat each other with dignity
and avoid actions or words that could undermine trust or cooperation.
4. Trust in the Process:
a. Both the union and the employer must trust the collective bargaining
process as a fair and legitimate way to reach a resolution. A lack of trust can
hinder the outcome and lead to unproductive negotiations.
5. Consideration of Legal Aspects:
a. Both parties must be mindful of any legal implications involved in the
collective bargaining process. This ensures that the agreed terms are
compliant with the relevant laws and regulations governing labor relations.