Concept Notes

International Industrial Relations

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 Contents
1 Introduction ....................................................................................................................... 3
2 Need for understanding International Industrial Relations .............................................. 3
3 International Industrial Relations Systems ........................................................................ 3
3.1 Bipartism/Tripartism................................................................................................... 3
3.2 Trade Unions ............................................................................................................... 4
3.3 Models of Industrial Relations System in European Union ........................................ 4
3.3.1 Nordic Corporatism ............................................................................................. 4
3.3.2 Social Partnership ................................................................................................ 5
3.3.3 Liberal Pluralism .................................................................................................. 5
3.3.4 State-Centred....................................................................................................... 5
3.4 Collective Bargaining .................................................................................................. 5
4 Labour Welfare and Social Security ................................................................................... 6
5 Workers’ Participation in Management ............................................................................ 7
6 International Labour Organisation .................................................................................... 8
6.1 Origin .......................................................................................................................... 9
6.2 Membership.............................................................................................................. 11
6.2.1 Withdrawal ........................................................................................................ 11
6.3 Structure ................................................................................................................... 11
6.3.1 International Labour Conference ...................................................................... 11
6.3.2 Governing Body ................................................................................................. 12
6.3.3 International Labour Office ............................................................................... 13
6.4 Conventions and Recommendations........................................................................ 13
6.4.1 Ratifications for India......................................................................................... 14
6.4.2 Fundamental Conventions of ILO ...................................................................... 14
7 India and the International Labour Organisation ............................................................ 15

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 1 Introduction
The beginning of the process of industrialisation in Europe had initiated the labour
movement that gradually grew and spread to different countries, having varying degrees of
impact. Industrial Relations System of a country is shaped by the unique legal, political,
economic, social and cultural factors of the country. In this chapter we will discuss aspects
of industrial relations in some selected countries and the impact of ILO on Indian Industrial
Relations. In this chapter, our emphasis will be on presenting important facts without
delving deeper. We will prioritize key points to ensure clarity for exam preparation.

2 Need for understanding International Industrial Relations

Understanding international industrial relations is crucial for improving labor-management
relations within a country. By examining successful models from other nations, valuable
insights can be gained and potential strategies for replication identified.
For example, following Independence, the Government of India had formed a tripartite
committee that visited UK, Sweden, France, Belgium, West Germany and Yugoslavia to
learn the prevalent practices and on returning the committee made certain
recommendations. It agreed upon the constitution, functions and administration of Joint
Councils and also recommended the setting up of Joint Management Councils.
Now, we will discuss the Industrial relations systems in different countries with respect to
different characteristics.

3 International Industrial Relations Systems

3.1 Bipartism/Tripartism
Industrial relations system in a country in general may have a bipartite or tripartite nature.
In many Asian countries, the State assumes a paternalistic role, viewing itself as the
protector of workers and taking responsibility for their welfare. This is because most of
these countries are still developing economies.
In Japan, tripartite discussions and consultations occur commonly at the national level.
Conversely, the USA lacks formal bipartite or tripartite institutions or mechanisms for
national-level dialogue. There is no representative employers’ organisation.

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 3.2 Trade Unions
Trade unionism in the European Union (EU) is marked by a high degree of unity and
coherence at the continental level, although significant diversity and occasional division
exist at the national level. Notably:
• All the major trade union confederations in EU countries and outside EU are members
of the European Trade Union Confederation (ETUC).
• Additionally, numerous trade union organizations are affiliated with the European
Confederation of Independent Trade Unions.
Similarly, the structure of trade unions in the USA aligns closely with that of Ireland and the
UK. The apex body is the American Federation of Labour and Congress of Industrial
Organizations (AFL-CIO), which is made up of a large number of industrial and occupational
unions
In communist regimes like China and Vietnam. In China, workers are represented by the All
China Federation of Trade Unions and in Vietnam by the Vietnam General Confederation
of Labour, both being the official national centres of trade unions and affiliated with the
ruling parties.
Japan and Korea historically boast robust enterprise-level unions. Japanese trade union
organizations follow a three-tier structure: enterprise-based unions, industrial federations
and the national center at the top. In the past national trade union centres were divided
but were later united in 1989 into a national centre called the Japanese Trade Union
Confederation, or Rengo, which organises majority of the unionised workers. Trade union
structure in Japan resembles that in France. Rengo works with the national government
and employers’ organisations on issues including labour standards, tax systems and social
security, that cannot be dealt with at the industry or enterprise-level.

3.3 Models of Industrial Relations System in European Union

Following are the four main models of industrial relations systems that exist in European
nations:

3.3.1 Nordic Corporatism

The Nordic corporatism model features high levels of trade union membership,
negotiations at industry-level and relatively centralised bargaining arrangements.
Generally social groups are more integrated into the system and union density is high.
Hence collective agreements apply to majority of workers, without the need for
government intervention. This model is followed in Scandinavian countries like Denmark,
Finland and Sweden.

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 3.3.2 Social Partnership
This model is based on existence of employers’ associations and trade union
confederations as it depends on strong negotiating parties who can make agreements
survive. The social partnership model exists in countries like Austria, Belgium, Germany,
Luxembourg, the Netherlands and Slovenia.

3.3.3 Liberal Pluralism

Labour-management relations are largely based at company-level and can be
confrontational (with the exception of Ireland’s social pacts). In general, there are fewer
laws concerning the labour market, social security, etc. Union density rates tend to be
lower and therefore collective bargaining coverage is restricted, as negotiations are not
centralised and there is no legal means of extending company-level deals industry-wide.
This model is followed in Ireland, UK, Cyprus and Malta.

3.3.4 State-Centred
Governments in this model exercise more control; unions and employers are also
accommodated to a certain extent to avoid social confrontation. Union density is often
lower in these countries, but collective bargaining coverage may be wider because of the
potential for extension of agreements to non-unionised workplace both by law and via
employers’ associations. It exists in France, Greece, Italy, Portugal and Spain.

3.4 Collective Bargaining

The collective bargaining process and levels therein may differ across countries:
• Collective bargaining may be said to be much more centralised in EU than Japan and
USA, though there is no uniformity between the members of EU.
• Enterprise-level bargaining is a common approach in East Asian countries.
• In Malaysia and Singapore, the governments have adopted a policy of enterprise or ‘in
house’ unionism for securing cooperation, though sectoral bargaining is also picking up
gradually. Both these governments have imposed restrictions on collective bargaining
as in both the countries certain issues like transfer, promotion, retrenchment, lay-off,
etc. are considered management prerogatives and collective agreements on these
issues require certification by the Industrial Court, which can even refuse the
certification if the provisions are harmful to the national interest.
• European Union, Issues like pay and work conditions are not subject to collective
bargaining at sectoral or inter-sectoral EU level.

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 • In USA, many unions seek to conduct ‘pattern bargaining’, whereby an agreement is
arrived at in a particular company or companies and then extended to other firms in
the sector.
• In Japan, Enterprise-level bargaining is characterised by almost complete autonomy of
the employer and enterprise-based unions, with no external participation. However, it
may be noted that there is coordination from both trade union and employers’ sides
during the annual spring-time negotiations or Shunto. The pattern followed in these
negotiations is that major manufacturers in leading industries are the first ones to
participate in bargaining, followed by other large companies and later by small
enterprises.
Note: The Spring Labour Offensive (known as Shunto) began in 1956 as an annual unified
struggle by labour unions in all industries, in which they come up with the central demand
of simultaneous wage increases. Also, Rengo changed its name from ‘the Spring Labour
Offensive’ to ‘The Spring Struggle for a Better Life’.

4 Labour Welfare and Social Security

Welfare amenities provided to workers essentially depend on the level of economic
development of a country. The emphasis and scope of social security system also varies
across countries. Let's examine how these aspects differ across various countries:
• Japan:
o Public pension system ensures income security for the elderly, survivors, and
persons with disabilities.
o Healthcare systems to protect public health include health insurance, public
health and maternal and child health systems.
o Care services and financial support for persons with disabilities,
o A system to protect workers through employment insurance, work-related
accident insurance, etc.
• European Union:
o EU countries have their own social security legislations that decide their specific
beneficiaries and benefits
• UK:

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 o National insurance in UK accounts for over half of the expenditure on social
security in the country
o Income support for people with low income, job seeker’s allowance, child benefit,
housing benefit that supports in paying all or part of house rent, council tax
benefit, disability living allowance, invalid care allowance, state pension etc.
• France:
o French social security benefits can be categorised into five branches: sickness,
maternity, paternity and death; accidents-at-work and occupational-diseases;
retirement; family benefits; and unemployment benefits
• USA:
o In USA there are two principal federal programmes offering support for the
elderly:
a. Old Age, Survivor’s and Disability Insurance (OASDI), commonly known as
Social Security, and
b. Medicare.
o Social Security provides retirement income to the elderly, while Medicare provides
health insurance coverage for the aged and disabled and is funded partly by
payroll taxes and premium payments by retirees, and rest by the federal
government.
o In addition, the Supplemental Security Income (SSI) programme serves as a safety
net to ensure that the elderly and disabled have a minimum level of income if their
pension benefits are very low or if they do not qualify for Social Security.

5 Workers’ Participation in Management

The concept of workers' participation in management traces its origins to Europe. The
majority of EU Member States have provisions in their legislation for some kind of
employee representation at board-level.
In many Japanese companies a consensus is sought at all levels before taking a decision. It
is called ringi.
Workers’ participation in USA stands for negotiation, administration and collective
bargaining, and is based on free choice.
Let us discuss some concept check questions.

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 Concept Check
Question 1 – In Japan tripartite discussions and consultations commonly take place at
____________.
A. Industry Level
B. Regional Level
C. Enterprise Level
D. National Level
Ans: Option D

Concept Check
Question 2 - An annual unified struggle by labour unions in all industries in Japan, in
which they come up with the central demand of simultaneous wage increase is known as
_________.
A. Ringi
B. Rengo
C. Shunto
D. None of the above
Ans: Option C
Now, let us move on to an important topic of this chapter International Labour
Organizations.

6 International Labour Organisation

The International Labour Organization is a
specialised agency of the United Nations
Organisation that aims at improving labour
standards at global level. It has a tripartite
structure having representatives of
governments, employers and workers, and
provides a forum for discussion of labour issues and policies. Currently ILO has 187 member
states.
Now, let us discuss ILO in a little more detail.

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 6.1 Origin
The ILO was created in 1919, as part of the Treaty of Versailles that brought an end to
World War I. ILO’s main objectives are to establish social justice for maintaining peace and
harmony in the world, and to promote human and labour rights. Its Preamble states that:
• Whereas universal and lasting peace can be established only if it is based upon social
justice. In simple words, it says that real and lasting peace can only happen if there is
fairness and equality for everyone.
• And whereas conditions of labour exist involving such injustice hardship and privation
to large numbers of people as to produce unrest so great that the peace and harmony
of the world are imperiled; and an improvement of those conditions is urgently
required. In simple words, it talks about how many people suffer from unfair and
difficult working conditions, which can cause a lot of unhappiness and unrest. This
unrest can be so serious that it threatens the peace and harmony of the world. It
emphasizes the urgent need to make these conditions better.
• Whereas also the failure of any nation to adopt humane conditions of labour is an
obstacle in the way of other nations which desire to improve the conditions in their own
countries. In simple words, it points out that when one country doesn't treat its
workers fairly, it makes it harder for other countries to improve their own working
conditions. So, ensuring fair treatment for workers is not just important for one
country, but for the whole world.
In its 26th Session in 1944, the General Conference of ILO brought out the ‘Declaration of
Philadelphia’, which was incorporated into ILO’s Constitution. It reaffirmed the principles
of ILO, which are as following:
• labour is not a commodity, This principle emphasizes that workers are not goods to be
bought and sold but individuals entitled to dignity, fair treatment, and respect in the
workplace.
• freedom of expression and of association are essential to sustained progress, This
principle states the importance of freedom for workers to express their views and
associate with others.
• poverty anywhere constitutes a danger to prosperity everywhere, this principle
stresses that poverty poses a risk to the well-being and stability of all nations.
• the war against want requires to be carried on with unrelenting vigour within each
nation, and by continuous and concerted international effort in which the
representatives of workers and employers, enjoying equal status with those of

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 governments, join with them in free discussion and democratic decision with a view to
the promotion of the common welfare.
The Declaration set forth the ten objectives of ILO, which are as follows:
1. Full employment and revising standards of living: Ensuring that everyone who wants
to work has the opportunity to do so, while also striving to improve living standards for
all.
2. Satisfaction of workers in their occupations: Placing workers in jobs where they can
utilize their skills fully and contribute meaningfully to the well-being of society.
3. Facilitating training and labor mobility: Providing training opportunities and ensuring
the smooth transfer of workers between jobs, including migration for employment
purposes.
4. Fair policies on wages, hours, and working conditions: Implementing policies that
guarantee fair wages, reasonable working hours, and favorable conditions of work for
all employees, along with establishing a minimum living wage for those in need of
protection.
5. Recognition of collective bargaining rights: Upholding the right of workers to engage
in collective bargaining, fostering cooperation between management and labor to
enhance productivity, and promoting collaboration between workers and employers
on social and economic initiatives.
6. Expansion of social security measures: Extending social security programs to provide a
basic income and comprehensive medical care for those in need of protection.
7. Protection of workers' life and health: Ensuring adequate measures are in place to
safeguard the lives and health of workers across all occupations.
8. Support for child welfare and maternity protection: Establishing provisions to protect
the well-being of children and provide support for mothers during pregnancy and
childbirth.
9. Provision of essential needs: Ensuring access to adequate nutrition, housing, and
facilities for recreation and culture for all individuals.
10. Ensuring equality of educational and vocational opportunities: Guaranteeing that
everyone has equal access to education and vocational training opportunities,
irrespective of their background or circumstances.

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 6.2 Membership
Following shall be the members of ILO:
• The States that were the members of ILO on 1st November 1945,
• Any original member of UNO and
• Any State that attained membership of the United Nations by a decision of the
General Assembly may become a member of the ILO.
The concerned State must give its formal acceptance of the obligations of the Constitution
to the Director-General of the International Labour Office. The General Conference of the
ILO may also admit a State as member by a vote of two-thirds of the delegates attending
the session, including two-thirds of the Government delegates present and voting.

6.2.1 Withdrawal
The Constitution of ILO provides that any member of ILO may withdraw its membership
after giving notice to the Director-General of the Office. Such notice shall take effect 2
years after the date of receipt, subject to the condition that the member has fulfilled all
financial obligations arising out of its membership at that time.

6.3 Structure
ILO carries out its functions through three main bodies:

Now, let us discuss about these bodies in detail:

6.3.1 International Labour Conference

The International Labour Conference is also called as the International parliament of
labour. The functions of ILO are as follows:
• Setting Labour Standards and Policies: The conference is responsible for establishing
labor standards and formulating general policies for the ILO, guiding its actions on
global labor issues.

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 • Discussion Forum: It provides a forum where delegates from member states can
discuss a wide range of social and labor-related topics, exchanging ideas and
perspectives to address common challenges.
• Budget Adoption and Governing Body Election: The conference adopts the ILO's
budget and elects its Governing Bod.
The Conference meets once a year in Geneva, Switzerland and has been continuing to
meet every year since its first session in 1919, except for the interruption due to World War
II. The annual meeting is attended by the delegates of governments, workers and
employers of ILO Member States. The delegation of each Member State consists of two
government delegates, one employer delegate, a worker delegate and their respective
advisers. Generally, the government representatives are ministers and officials responsible
for labour affairs, while the employer and worker delegates are nominated by the
respective government in agreement with organisations of employers and workers
important at national-level. Every delegate has equal rights and has one vote.

6.3.2 Governing Body

The Governing Body is the executive body of the ILO. It meets thrice in a year. The
functions of Governing Body are as follows:
• Policy Decision-making: The Governing Body is responsible for making decisions on ILO
policy, guiding the organization's direction and activities.
• Setting the Conference Agenda: It determines the agenda for the International Labour
Conference, the ILO's primary decision-making body.
• Budget Scrutiny: The Governing Body reviews and scrutinizes the ILO's budget,
ensuring its alignment with organizational goals and priorities before presenting it to
the Conference for approval.
• Appointment of Director-General: It elects the Director-General of the ILO, who serves
as the chief executive officer responsible for implementing the organization's policies
and programs.
• Monitoring Implementation: The Governing Body oversees the implementation of the
recommendations and conventions adopted by the ILO, ensuring member states
adhere to agreed-upon standards and principles.
Governing Body has 56 titular members (28 governments, 14 employers, and 14 workers)
and 66 deputy members (28 governments, 19 employers and 19 workers). Out of 28 titular
government seats, 10 are permanently held by States of chief industrial importance. Since

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 1922 India has been holding one of these 10 seats. The other government members are
elected by the Conference every 3 years. The employer and worker members are elected in
their individual capacity.
Prior to the adoption of a Convention or Recommendation, the Governing Body ensures
proper preparation on the subject and adequate consultation of the concerned members by
means of a preparatory conference or other means.

6.3.3 International Labour Office

The International Labour Office is the Secretariat of the ILO. The Office has a Director-
General, who is elected every 5 years by the Governing Body. The Director-General is
responsible for the efficient conduct of the Office and other duties as may be assigned. It is
the centre of the activities of ILO. It has headquarters in Geneva and many field offices
around the world. The Office has a research and documentation centre. The functions are
as follows:
• Collection and distribution of information on all matters related to labour conditions in
the world, particularly those subjects which it proposes to bring before the Conference
with the objective to conclude international Conventions and Recommendations.
• Conduct of research on certain matters as may be ordered by the Conference or by the
Governing Body.
• As per the directions of the Governing Body the Office must:
o prepare the documents on the various items of the agenda for the meetings of the
Conference;
o carry out the duties regarding the effective observance of Conventions.

6.4 Conventions and Recommendations

ILO draws international labour standards that are legal instruments and set out basic
principles and rights at work. These standards may either take the form of Conventions,
which are legally binding international treaties that may be ratified by Member States, or
Recommendations, which act as non-binding guidelines.
In many cases, a Convention lays down the basic principles to be implemented by ratifying
countries, while a related Recommendation supplements the Convention by providing more
detailed guidelines on how it could be applied. Recommendations can also be autonomous,
i.e., not linked to any Convention.
Conventions and Recommendations are drawn up by representatives of governments,
employers and workers and are adopted at the International Labour Conference. Once a
standard is adopted, Member States are required under the ILO Constitution to submit

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 them to their competent authority (normally the parliament) for consideration. In the case
of conventions, this means consideration for ratification. If it is ratified, a Convention
generally comes into force for that country a year after the date of ratification. Ratifying
countries have to apply the Convention in their laws and practice and must report on its
application at regular intervals. If the countries violate the Convention they have ratified,
there is a provision of moving representation and complaint against them.
Note: If a member has ratified any International Labour Convention and later withdraws
from the membership of ILO, such withdrawal shall not affect the continued validity for the
period provided for in the Convention of all obligations arising thereunder or relating
thereto.

6.4.1 Ratifications for India

• 47 conventions and 1 protocol:
o Fundamental (core) Conventions- 6 of 8
o Governance Conventions- 3 of 4
o Technical Conventions- 38 of 178
• Out of 47 conventions and 1 Protocol ratified by India, of which 39 are in force, 5
Conventions and 0 Protocol have been denounced; 4 instruments abrogated; none
have been ratified in the past 12 months.

6.4.2 Fundamental Conventions of ILO

The following has been ratified by India:
• Forced Labour Convention, 1930.
• Equal Remuneration Convention, 1951.
• Abolition of Forced Labour Convention, 1957.
• Discrimination (Employment and Occupation) Convention, 1958.
• Minimum Wage Convention, 1973.
• Worst Forms of Child Labour Convention, 1999.
The following has not been ratified by India:
• Freedom of Association and Protection of right to organised Convention.
• Right to Organise and Collective Bargaining Convention.
Also, the 1 protocol that has been ratified is P89 Protocol of 1990 To The Night Work
(Women) Convention (Revised), 1948.
Note: You must remember the above-mentioned conventions and protocol.

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 7 India and the International Labour Organisation
Many provisions in various labour legislations in India have been incorporated as a result of
ratification of ILO Conventions by the Government. For example,
• Provisions regarding working hours and weekly rest were incorporated in protective
legislations like the Factories Act, 1948, the Mines Act, 1952, the Plantations Labour
Act, 1951 and the Beedi and Cigar Workers (Conditions of Employment) Act, 1966 as a
result of ratification of Hours of Work (Industry) Convention, 1919 in 1921 and the
Weekly Rest (Industry) Convention (No. 14), 1921 in 1923.
• The Minimum Wage Fixing Machinery Convention (No. 26), 1928 and the Minimum
Wage Fixing Machinery Convention (No 121), 1970 have influenced the Minimum
Wages Act, 1948.
Let us discuss some concept check questions.
Concept Check
Question 3 – How many member states does the ILO have?
A. 183
B. 184
C. 185
D. 187
Ans: Option D

Concept Check
Question 4 – The Director General of International Labour Office is elected for __ years.
A. 3
B. 4
C. 5
D. 6
Ans: Option C

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