LABOUR MANAGEMENT

COOPERATION

About Labour Management Cooperation

In today's economy, where businesses must compete
globally and governments are expected to do more with
less, the most important business relationship that
exists is the relationship between the employer and the
employee. The labor-management relationship impacts
directly on profitability, productivity, job security, and
quality of life.
As labor-management relations evolve to meet the
challenges of today's economy, the Department's
services have evolved to meet the needs of our
customers.

About Labour Management Cooperation

These services, provided jointly by the Bureau of
Mediation and the Office of Labor-Management
Cooperation, assist labor and management in improving
their relationship at all levels, from the "shop floor" to
the "board room," and enable them to address issues of
mutual concern together, rather than as adversaries.

Meaning and Goals

Labour Management Cooperation means

joint efforts of labour and capital to

find out solutions and remedies of
problems, common to both.

Meaning and Goals

Goals are as under:
-

Increasing Productivity

Promoting Industrial Democracy

Avoiding Conflicts and Roughness/Frictions

Objectives of Labour Management Cooperation

-

to avoid conflicts and problems arising out from

working environment of the organization.

To avoid disputes arising between employer and

workman.

To extend harmonious work environment

To run organization smooth and flat

To achieve the goals of the organization

Different Forms of
Labour Management Cooperation
1.

Information Sharing

2.

Problem Sharing

3.

Joint Consultation

4.

Workers Participation in Management

About WPM
- The ILO has been encouraging the member nations
to promote the scheme of Workers Participation in
Management.
-

Workers Participation in Management implies

mental and emotional involvement of workers in
the management of enterprise.

Provisions
like
Works
Committee,
Joint
Management Council and nomination of workers
representatives in managing committee have been
included in Labour Laws of various countries.

About WPM
- In our country, first of all, it was introduced in the
form of Works Committee in the factory. But, in
the practice, it did not work.
- The feudal mentality of the employers made the
provision totally passive and ineffective. But the
major responsible factor for the failure of the
Works Committee was the autocratic political
system which banned representative unions and
developed a puppet union.
- In the year 1992, the new Labour Act was enacted.

What is WPM?
- The Labour Act has emphasized
Workers
Participation in Management in the form of labour
management committee. But, here again
employers do not act positively.
- In order to evade tax obligations and transparency
requirements, they maintain a distance from the
workers and blame the workers for noncooperation and non-participation.

- They do not like to disclose the actual financial

position and loss and profit accounts because they
often play foul in terms of distribution of bonus

What is WPM?
- Similarly, negative experiences have been observed
from workers representatives when they behave
like managers.
- These are the bitter experience of the organization.

What is Participation?
Participation is ones own mental and emotional
involvement in decision making process for achieving
organizational goals and share responsibility.
Three Important Aspects of Participation.
1. A persons self is involved rather than his skills;
2. It motivates persons to contribute their own resources
of initiative and creativity towards objectives of the
organization.
3. It also encourage people to accept responsibility in
their group activities.
4. Participation helps them become responsible members
of the society and also responsible citizen of the
country.

What is Management?
It means to manage the affairs of the organization in a
systematic way.
It involves looking after day-to-day work, decision
making policy matter and implementing the policydecisions.

Definition of WPM
According to Keith Devis,
Participation refers to the mental and emotional
involvement of a person in a group situation which
encourages him to contribute to a group goal and share the
responsibility of achievement.
According to Walpole,
Participation in Management gives worker a sense of
importance, pride and accomplishment. It gives him the
freedom of opportunity for self-expression, a feeling of
belongingness with the place of work, and sense of
workmanship and creativity.

Concept of WPM
The concept of WPM has changed from time to time
and country to country.
WPM means the workers are given a chance to share
the function of the management in achieving the
organizational goals of the undertaking. This also
called Industrial Democracy in practice.
This participation is achieved through the
representatives of the workers at all the levels of
management.

Concept of WPM
The phrases such as
-

Industrial Democracy,
Workers Participation,
Participative Management,
Co-partnership,
Co-determination
Co-management an d
Participation of workers in decision making

are used to described the concept of participative

management.

Concept of WPM
The concept of WPM includes;
1. It provides scope for employees in decision making
of the organization.
2. The participation may be at the shop level,
department level or at the top level.
3. The participation includes the willingness to share
the responsibility of the organization by the
workers.

Objectives of WPM
The main objectives of WPM are.
1. Organizational
2. Psychological
3. Social

Organizational Objectives
The Scheme of Workers Participation enhances
economic efficiency of the enterprise on account of

1. Contributing ideas by the workers

2. Upward communication to proper decision making
at the top.
3. Accepting decisions and work better, if they
participate in them;
4. Fostering more cooperation among workers and
management and thus raise efficiency.

Psychological Objectives
- It gives full recognition to the human element in
industry and generate a greater interest in the
operation of the undertaking.

- A sense of belongingness is developed which in turn,

results in higher efficiency.

Social Objectives
- The concept of participation produces equal status
between workers and management through sharing
of decision-making process which makes the
workers productive, creative and efficient.
- It also recognizes the dignity of a man as man and
also satisfies his urge for self-expression and makes
our democracy functional.

Levels of Participation
1.
2.
3.
4.

Information Participation
Consultative Participation
Associate Participation
Decision Participation

Information Participation
-

Information like
1.
Balance-sheet
2.
Production
3.
Economic Conditions of the Plant
4.
Working Conditions etc.
should be shared.

Workers have a right of scrutinizing information

provided so that they can have an idea of what is going
on in the organization

Consultative Participation
-

It involves higher degree of sharing views of the

members and giving them an opportunity to express
their feelings.

Members are consulted on such matters relating to

welfare programmes, method of work and safety,
adoption of new technologies etc.

The final decision is that of management.

The workers awareness and involvement have to be

positive and direct.

Associate Participation
-

The Management has to accept and implement the

unanimous decisions taken jointly.

This creates a climate of partnership.

Decision Participation
-

It is the highest form of participation.

Decision is taken jointly in all the matters of work

related issues or interest related issues like Economic,
Financial and Administrative Policies etc.

WPM IN INDIA
- The origin or ideas of Workers Participation in
Management in India can be traced to the report of the
Royal Commission on Labour in 1931 which
recommended the setting up of joint consultative
bodies.
- In April,1942, the first tripartite labour conference was
held and the pattern of joint consultation at the
national level was evolved.

WPM IN INDIA
- Workers Participation was incorporated in the
Constitution of India in 1976 as one of the Directive
Principles of the State Policy.
- Article 43A of the constitution relates to participative
management and read as follows:
The State shall take steps to secure the participation of
workers in the management, establishments or other
organizations engaged in any industry.

WPM IN INDIA
ARTICLE 19 RIGHT TO WORKERS PARTICIPATION
1. All the Workers have the right to participate effectively in
management decision making affecting their health and safety.
2. All workers have the right to elect safety representatives. Such
representatives have the right to participate in Joint Committees,
composed of workers and management representatives in equal
number, which meet regularly to address health and safety
matters.

3. All the workers have the right to participate in the design and
execution of ongoing health and safety studies in their working
environment to determine the nature of any risks to health and
safety.

WPM IN INDIA
ARTICLE 19 RIGHT TO WORKERS PARTICIPATION

4. All the workers have the right to establish and associate with
community hazards centers and information network.
Governments and employers have a responsibility to support
such organizations and programmes.

WPM IN INDIA
- Workers Participation in Management of industries has
become one of the accepted goals of the State Policy.
- The goal is accepted, but
implementation is left flexible.

the method

of its

- The influence of Mahatma Gandhi, the Joint

Consultation Model was adopted in the Cotton Textile
Industry.
- A few Works Committee were set up in the Printing
Presses of the Government.

WPM IN INDIA
- TISCO had established Joint Committees in 1958.

- The Delhi Cloth and General Mills Co.Ltd., accepted an

elected representatives on the Board of Directors.
- In Railway Companies, Works Committees were set up.
- The Government of Indias Industrial Policy Resolution
of April,1956 also laid emphasized the need for
workers participation in management.

WPM IN INDIA
- The Government of Indias Industrial Policy Resolution
of April,1956 also laid emphasized the need for
workers participation in management.
In a socialist democracy, labour is a partner in the
common task of development and should participate in
it with enthusiasm. There should be joint consultation,
and workers and technicians should, whenever possible,
be associated progressively in management.

WPM IN INDIA
- The aim of the government in advocating workers
participation in management was part of its overall
endeavour to create a socialist society wherein the
sharing of a part of managerial powers by workers was
considered necessary.

- A Study Group on WPM consisting of representatives

of the government, employers and workers was set up
on 1956 which examined the systems of WPM in the
UK, Sweden, France, Belgium, West Germany and
Yugoslavia and they favourd the system of Joint
Management Councils and submitted its report in
May,1957. It emphasized that :

WPM IN INDIA
- In India
1. an educational campaign should be launched so that
workers and managerial supervisory staff may
realize the implications of such a scheme.

2. The joint consultation should be in-built

3. Importance should be given to reorientation of
attitudes, self-confident trade unions and good
industrial relations for the success of any scheme of
participation.
4. No compulsion should be applied in setting up the
councils.

WPM IN INDIA
- The history of Workers Participation in Management
in India clearly makes 3 important Institutional
landmarks:
1. Works Committee (1947)
2. the Joint Management Councils (1958) and
3. the Shop Councils and the Joint Councils (1976)

Works Committee
- U/S. 3 of the ID Act,1947 provides for setting up of a
Works Committee in every undertaking employing 100
or more workmen.
- The Works Committee should consist of representatives
of employers and workmen who engaged in the
establishment.
- The number of workers representatives shall not be
less than the number of representatives of the
employers.

Works Committee
- U/S. 3 of the ID Act,1947 provides for setting up of a
Works Committee in every undertaking employing 100
or more workmen.
- The Works Committee should consist of representatives
of employers and workmen who engaged in the
establishment.
- The number of workers representatives shall not be
less than the number of representatives of the
employers.

Objectives of Works Committee

- To promote measures for securing and preserving unity
and good relations between employers and workmen;
- To comment upon the matters of their common interest
or concern.
- To endeavour to compose any material difference of
opinion in respect of such matters.

Works Committee
In 1959, the Indian Labour Conference drew up an
illustrative list of items for the Works Committees to deal
with as under:
1. Condition of work such as ventilation, lighting,
temperature and sanitation including latrines and
urinals.
2. Amenities such as drinking water, canteens, dining
rooms, crches, rest-room, medical and health services.
3. Safety and accident prevention, occupational diseases
and protective equipment

Works Committee
4.
5.
6.
7.

Adjustment of festival and national holidays

Administration of welfare and fine funds
Promotion of economy and savings;
Education and recreational activities such as
- libraries
- reading rooms,
- cinema show,
- sports,
- games,
- picnic parties
- community welfare and celebrations
8. Implementation and review of decisions arrived at meetings
of Works Committees.

Works Committee
Works Committee will not deal with the following items.
1.
2.
3.
4.
5.
6.
7.
8.

Wages and Allowances

Bonus and Profit sharing
Fixation of workload
Fixation of standard labour force
Programmes of planning and development
Matters connected with retrenchment and lay off.
Victimization for trade union activities
Provident fund, gratuity schemes and other retirement
benefits
9. Incentive scheme
10. Housing and transport services

Works Committee
Recommendation of National Commission on Labour,
measures to make the Works Committees effective:
1. More responsive attitude on the part of management.
2. Adequate support from trade unions
3. Proper appreciation of the functions of the Works
Committees
4. Whole-hearted
implementation
of
the
recommendations of the Works Committees.

Joint Management Councils

The JMC formed in the year 1958 by Govt. of India to
bring the ideas of WPM in practice.
It is a voluntary scheme solely based on bipartite
agreement without any legal sanction.

Objectives of JMC
- To promote cordial relations between management and
workers,
- To promote understanding and trust between them.
- To effect substantial increase in productivity
- To secure better welfare and other facilities for workers,
- To train workers to understand and share the
responsibilities of management

Constitution of JMC
- Each JMC shall consist of an equal number of
representatives of employers and employees.
- There shall be 12 members in large size undertaking
and 6 in small size undertaking.
- The employers representatives shall be nominated by
the management and workers representatives shall be
elected by the workers.

Functions of JMC
The councils would be consulted by the management on
matters like
- Administration of Standing Orders and
amendment.
- Retrenchment
- Closure, reduction in or cessation of operations

their

Functions of JMC
The Council would also have the right to receive
information to discuss and give suggestions on;
1. General economic situation of the undertaking
2. The state of the market, production and sales
programme
3. Organization and general running of the undertaking
4. Method of manufacture and work
5. The annual balance-sheet and profit and loss statement
and connected documents and explanation
6. Long term plan for expansion, re-development etc.

Functions of JMC
The council would be entrusted with administrative
responsibility in respect of
1. Administration of welfare measures
2. Supervision of safety measures
3. Operation of vocational training and apprenticeship
schemes
4. Preparation of schedules of working hours and breaks
and holidays
5. Payment of rewards for valuable suggestions received
from the employees and