Lesson: 35 Industrial Relations

Title: Getting Started: Industrial Relations Topics to be covered: Definition Parties to Industrial relations Features Scope Contemporary Issues Article on Beyond traditional environment By: C. S. Ratnam Article on Preparing workers for changes in the labour market: The challenge of the knowledge workers By: Werner Konrad Blenk

Objective: This chapter aims at familarising you with the concept of Industrial Relations, Industrial Disputes and the Dispute Resolution Procedures in India. Hello Students, We are going to study Industrial Relations in India. The journey from the concept to empowerment will be fun and a learning experience for all of us. At this positive note let us warm up by understanding the labour scene in India. I am sure you will agree that that there have been a lot of changes in the Indian economy in the post- liberalised era. This has its affect on the Indian labour. First let us understand the changes.

The changes that have taken place in the Indian economy since 1991 are as follows: Tariff and non-tariff trade barriers lowered Industrial licensing abandoned in many sectors Private capital permitted in areas reserved for the public sector Restrictions on foreign direct investment removed Steps towards privatisation Food subsidies reduced and The rupee devalued.

These changes have lead to: Strengthened presence of multinational companies Increase in redundancy Introduction of new technologies New management techniques etc.

Having understood the environment encompassing the Industrial relations, let us now understand and discuss the concept of Industrial Relations and study its features and scope. What do you think is Industrial Relations? Is it just the relationship between the Union and Management or is it something beyond that? Let us understand the concept of Industrial Relations. Yes of course, Industrial Relations is used to denote the collective relationships between management and the workers. (Please also understand that the two terms, management- labour relations and employer- employee relations are synonymously used.) But there is more to it!! In the words of Lester: "Industrial relations involve attempts at arriving at solutions between the conflicting objectives and values; between the profit motive and social gain; between discipline and freedom, between authority and industrial democracy; between bargaining and co-operation; and between conflicting interests of the individual, the group and the community We shall now examine the concept of industrial relations with the help of some definitions so as to understand its various dimensions. One of the most comprehensive definitions which views industrial relations from the perspective of human relationships is by J. Henry Richardson: "Industrial relations is an art, the art of living together for purposes of production. The parties while working together learn this art by acquiring the skills of adjustment. What are your views on this? Does it sound too ideal? .

Let me share my personal feeling with you as regards this. If the Management and the unions are committed and responsible towards each other, they can learn this art of living Let us also look at another definition by H.A. Clegg: "The field of industrial relations includes the study of workers and their trade unions, management, employers' associations, and the State institutions concerned with the regulation of employment". While Richardson called for regulation of relationships in industry from within the organisation as the parties have to live together by a process of accommodation and adjustment, Clegg assigned great importance to the role of institutions and to the regulatory role played by the government. The National Commission on Labour (NCL) also emphasized on the same concept when it observed: "Industrial relations affect not merely the interests of the two participants- labour and management, but also the economic and social goals to which the State addresses itself. To regulate these relations in socially desirable channels is a function, which the State is in the best position to perform. So, now let us summarise. In simple words, industrial relations are the outcome of the 'employment relationships' in industry, i.e. between employers and labour. The government of a nation or state influences these relations to a great extent. Thus, there are three main parties in industrial relations: (i) Workers and their Organisations: The personal characteristics of workers, their culture, educational attainments, qualifications, skills, attitude towards work, etc. play an important role in industrial relations.

What do you think is the terminology used for the Workers' organisation? Yesit is known as a Trade Union Trade unions are formed for safeguarding the economic and social interests of the workers. They put pressure on the management for the achievement of these objectives. (We will be studying the role of trade unions in the due course) Now coming to the second main player. These changes have its obvious effects on labour. Ghatoshkar (2000) and Noronha (1996) have summarised these changes. They state that Indian management has introduced flexibility by: Restructuring of companies Banning recruitment of permanent category employees Shutting of units or departments Transferring of jobs from bargainable to non-bargainable categories Introducing functional flexibility Intensifying the working day through pressure to increase productivity Opening parallel plants Employing contract workers and sub-contracting production.

(ii)

Employers and their Organisation: The employers are a very important variable in industrial relations. They provide employment to workers and try to regulate their behaviour for getting high productivity from them. In order to increase their bargaining power, employers in several industries have organised employers' associations. These associations put pressure on the trade unions and the Government.

And the third player is..any guesses? It is the State or what we better know as the Government. (iii) Government: The Government or State exerts an important influence on industrial relations through such measures as providing employment, intervening in working relationships. and regulating wages, bonus and working conditions through various laws relating to labour. The Government keeps an eye on. Both the trade unions and employers' organisations to regulate their behaviours in the interest of the nation.

Doesnt the role of the Government in Industrial Relations seem similar to that of your parentsKeeping an eye on you and your brother sisters and intervening when things are out of your control!! Let us get holistic and see the overall environment of industrial relations.

INDUSTRIAL NATIONAL

SCENARIO ENVIRONMENT
FACTORS

SOCIO-ECONOMIC

Employer Employees

Government

MARKET

FACTORS

I hope you understand the diagram. Can anyone explain this to me! Now note a few things! After independence, the Indian Government laid emphasis on the need for consultation between the representatives of labour, management and the Government in tripartite and bipartite forums. Tripartite obviously would mean representatives from three bodies and bipartite means representatives of two bodies. Moved by the constant pressure of International Labour Organisation, the Government of India constituted various tripartite bodies like Indian Labour Conference (I.L.C.), the Standing Labour Committee (S.L.C.) and the Industrial Committees to deliberate on various issues relating to labour and management that have farreaching impact on the country's labour policies and legislation. Before we move on, let us revise what we have studied so far. We have discussed the concept of Industrial relations and the main players to it. We have talked about the regulating relationship among three main parties or players whatever you call it. They are: The Employees or the Workers Organisation (Trade Union) The Employers Organisation The State or Government

Partiesto toIndustrial IndustrialRelations Relations Parties

Trade Union Trade Union

Employers Organisation Organisation Employers

Government Government

Let us now discuss the Features of Industrial Relations. A few notable features pertaining to industrial relations are as under: 1) Industrial relations are born out of employment relationship in an industrial setting. Without the existence of two parties i.e. labour and management, this relationship cannot exist. It is the industry, which provides the environment for industrial relations. (II) Industrial relations are characterized by both conflict and co-operation. So the focus of industrial relations is on the study of the attitudes, relationships, practices and procedures developed by the contending parties to resolve or at least minimise conflicts. (III) As the labour and management do not operate in isolation but are a part of the large system, so the study of industrial relations also includes vital environmental issues like technology of the workplace, country's socio-

economic and political environment, nation's labour policy, attitude of trade unions, workers and employers. (IV) Industrial relations also involve the study of conditions conducive to the labour, management co-operation as well as the practices and procedures required to elicit the desired co-operation from both the parties.

(V) Industrial relations also study the laws, rules, regulations, agreements, awards of court, customs and traditions, as well as policy framework laid down by the government for eliciting co-operation between labour and management. Besides this, it makes an in-depth analysis of the intervening patterns of the executive and judiciary in the regulation of labour-management relations. How do management and Union operate in an organisation Let us understand the flow with the help of a Diagram:

Management Daily HR activities carried out by

Objectives and goals affect

(1) Workers Collective Desire

(2) Unions begin organizing

(3)
Collective negotiations

(4) Contract is administered

Objectives and goals affect

Labour (union)

Laws and Regulations

Can anyone try and explain this diagram to me!! Summarising this diagram, the two main entities in the Industrial Relations scene that is management and union participate in the process. The process can be described as follows:

Labour forming themselves into a union

Union beginning to organise

Collective Negotiation

Contract administration This brings us to the next topic for today that is the scope of Industrial Relations. The scope can be studied under three main categories. These categories are: Promotion and development of healthy labour-management relations Maintenance of industrial peace and avoidance of industrial strife and Development of industrial democracy.

1) Development of Healthy Labour-Management Relations: The promotion of healthy labour management relations pre-supposes: a) The existence of strong, well-organised, democratic and responsible trade unions and associations of employers.

This can lead to: Job security of employees Increased workers' participation in management Negotiations, consultations and discussions Good labour-management relations.

(b) The spirit of collective bargaining and willingness to take recourse to voluntary arbitration. The collective bargaining recognises equality of status between the two conflicting groups and prepares the ground in an atmosphere of trust and goodwill, for discussions, consultations and negotiations on matters of common interest to both industry and labour. Please do not worry if you dont understand Workers participation and Collective Bargaining because we would be studying this in detail later. (c) Welfare work, whether statutory or non-statutory, provided by the state, trade unions and employers create, maintain and improve labour management relations and thereby contribute to industrial peace. I hope you all understand statutory and non-statutory..statutory means required by law and non-statutory means not required by law. Now coming on to the second main perspective in this regard (2) Maintenance of Industrial Peace: Industrial peace pre-supposes the absence of industrial strife. Industrial peace is essential for increased productivity and harmonious labour-management relations. . The industrial peace can be largely nurtured through the following means: (a) Machinery should be set up for the prevention and settlement of industrial disputes: It can be brought about by developing various legislative and administrative enactments like Trade Unions Acts, Industrial Disputes Act, Industrial Employment (Standing Industrial Orders) Act etc. And obviously it has to be remembered that prevention is better than cure!! (b) The Government should have the power to refer disputes to adjudication: The State can do so under various circumstances like the following:

When the situation tends to get out of hand and the employees and employers cant reach on to a solution acceptable to both the parties Industry is faced with economic collapse due to continued stoppage of production on account of strikes or lockouts It is in the public interest to do so during periods of emergency There is fear of foreign attack Production needs to be carried on without interruption etc.

(c) The Government enjoys the power to maintain the status quo: This power is exercised when the government, after referring the dispute to arbitration, finds that either party is continuing the strike or lockout and that strike or lockout is likely to negatively affect the life of the community and to create chaos in the industry. (d) The provision of the bipartite and tripartite forums for the settlement of disputes: These forums act on the basis of the Code of Discipline in industry, the Code of Conduct, Standing Orders etc. (e) The industrial peace can also be attained by the creation and maintenance of implementation cells and evaluation committees which have the power to look into implementation of agreements, settlements and awards and also violations of statutory provisions laid down under various labour laws. Now doesnt this last point sound interesting!! (iii) Development of Industrial Democracy: The idea of industrial democracy states that the labour should have the right to be associated with the management of an industry. To achieve this objective, the following techniques are usually employed:

(a) Establishment of the Shop Councils and Joint Management Councils at the floor and plant level. These councils aim at:

Improving the working and living conditions of employee Improving productivity, encourage suggestions from employees Assisting the administration of laws and agreements Serve as a channel of communication between the management and employees Creating among the employees a sense of participation in the decision-making process and Sense of belonging to the industry.

These methods and activities provide the necessary climate for the development of industrial democracy in the country.

Please research on the role of joint management councils and shop council and we will discuss that in class tomorrow.

And now some talk on human rights. (b) Recognition of Human Rights in Industry: This implies that labour is not a commodity of commerce, which can be purchased and disposed of at the whims and fancies of employers. The workers are to be treated as human beings whose sense of self-respect is to be fostered. Their urge for self-expression (through closer association with management) should be satisfied. These are the basic prerequisites for achieving industrial democracy. Any special comments on that? (c) Increase in Labour Productivity: The factors that contribute to higher productivity of labour are: Improvement in: Level of efforts and skills of workers Production process, Materials, Equipment, Layout, Work methods etc.

It can be brought about by: The suggestions of workers Research and development Special studies and technological development Improvement in the output resulting from capital intensification within the framework of the same technology Increasing the productivity of labour by adopting a proper motivational system

I am sure that all of you will agree that the above mentioned points would lead to increased job performance and maintenance of good industrial relations.

(d) The availability of proper work environments necessary so that the worker can effectively carry out his

assignment, as it is the environment, which stimulates or depresses, improves or destroys the relations between labour and management. I am sure all of you will agree on this point related to work environment. Imagine that you are studying in a class with poor lighting, no ventilation etc. Would you be able to concentrate on the discussion? Isnt it then not important that a conducive environment be provided to a worker in the factory? The temperature level, ventilation, lighting, canteen and overall hygiene are so important for the workers. In fact it is important for all the employees. As future managers or rather as entrepreneurs, you should always take care of your employees .If you keep your internal customers (employees) happy your external customers are automatically taken care of. Off course it makes good business sense as well. Whether you do this from a commercial angle or as philanthropy, it will pay off.

Now let us revise the scope of Industrial Relations. We have studied this under the following points: Development of healthy labour-management relations Maintenance of industrial peace and avoidance of industrial strife and Development of industrial democracy.

Activity: In each of these categories which do you think is the best way of maintaining and promoting Industrial Relations in any organisation or Industry? Do the strategies vary at the macro and micro level?
Let us end with discussing the contemporary issues in Industrial Relations: (i) Low Wages. Low wages have been a perennial problem and have been a source of industrial dispute for years despite the existence of Payment of Wages Act and the Minimum Wages Act. The acts do not seem to be solving the problem due to their poor implementation. In many of the factories, workers are still given wages below subsistence level, which leads to high degree of dissatisfaction and subsequent decrease in productivity. In many industries, the minimum wages have not been revised at par to compensate for it.

I am sure that is not a very good practice anyways. Wont you call it exploitation of labour?

(ii) Employment of Women. In the Indian cultural setup, the employment of women is a major problem even though things have started changing in the recent times. There are special provisions regarding the employment of women in the Factories Act, which prohibit employment of women during the night shift and also on heavy machinery. Under the Equal Remuneration Act, women are entitled to equality of wages at par with the male workers. Some employers don't follow the above provisions in letter and spirit and continue to exploit the women workers by virtue of their strong position and because of mass illiteracy and superstition

among the women workers. So the women of today rise up and fight for your rightswhy cant we take it upon us to educate the women in this regard!! (iii) Ignorance and illiteracy. Various labour laws that have beer made would be beneficial to the workers if implemented properly. For this it is important that the workers themselves understand the underlying principles and provisions of the law and demand whatever is due to them. With high rate of ignorance and illiteracy prevailing among the workers, it car be imagined how many of them know about the laws. It is here that the exploitation of workers takes place and legal provisions are ignored totally. (iv) Industrial Housing. Another burning issue in the industrial relations field is that of accommodation to the industrial employees. Here the problem is that the firms are not able to provide accommodation to the employees and further that the house rent allowance (HRA) that they provide is not sufficient to keep pace with the ever -rising demands of the landlords (v) Child Labour. The law requires that no child below the age of 14 is allowed to work in any factory and the adolescent is not allowed to work in hazardous conditions. The Supreme Court has passed a ruling strictly prohibiting the employment of children in any kind of factory. But still one finds instances of violation of law. This reminds me of one of the examples that my teacher gave in our class, when I was a student. She taught us marketing of services. One fine day she received snail mail .In the window of the envelope was sandpaper that caught her attention .On opening the envelope she read that those were the hands of children who work in the factories!! Now you can imagine what all do these kids go through!! Why cant any one of us ensure that this doesnt happen again? I leave you with this thought!! Ponder on this and see what can we do to improve the situation.

Article From Human Capital (Volume No.6, November 2003)

Beyond traditional employment

A Comprehensive look at the changing contours of the employment relationship.

We are passing through rapid, traumatic and discontinuous changes where speed, not external environment is usually accelerating change, in most case internal environment is usually accelerating change, in most cases internal environment is usually accelerating change, in most cases internal environment is seeking to decelerate it. And, it is said, if the rate of change in an enterprise is less than the rate of change in its external environment that enterprise is most likely go into oblivion sooner than later. The five most significant inventions that we have witnessed in the millennium-electricity and electrical appliances, automobiles, telephones, computers and television have made things mobile and rechargeable with remote control and enabled convergence of technologies that virtually removed barriers of time and space and rendered the finite capacities of people- to listen, to see and to move from one place to other - infinite. The transition from industrial revolution to information revolution, the process of global integration of financial and product markets, advanced technologies and intensification of competition and labor (the latter, through cost cutting strategies) have distinctly impacted traditional patterns of employment. With the passage of time, several old occupations are likely to die and many new are likely to emerge. A study estimated in 1999 that in five years, 80 per cent of existing jobs in telecommunications will become redundant and many new jobs come into vogue.

Tertiarization of the economy

Economic activities in all economies are classified into three sectors: primary, secondary and tertiary. To begin with most economies are agricultural engaged in primary sector activities. As industrialization takes place secondary sector accounts for bulk of employment and GDP. In the post-industrialization area the tertiary or the service sector becomes the major provider of jobs and the main source of DGP and its growth. In India, since mid-1980s service sector has been growing fast. In the post-liberalization era there is a virtual stagnation, if not decline in relative terms, in manufacturing. Now tertiarization is taking place and it accounts for bulk of the employment and GDP. Our population crossed one billion and workforce is estimated at around 376 million. 67 per cent of our workforce is still engaged in agriculture and contribute to a mere quarter (25%) of the GDP. 15 percent are engaged in industry and contribute twice that percentage (30%) of our GDP. The reminder of 18 percent are in tertiary sector their proportion is steadily growing and contribute to 45 per cent of our GDP. The tertiarization of the economy requires new skills and new work values and in some cases new forms of employment and work organization. Today we are also talking about the old economy (off-shoot of industrial revolution) and the new economy (offshoot of information revolution). In the new economy speed counts, not size. Market cap is much higher than physical assets. People power is assessed not by quantity (sheer numbers) which is declining any way but by their quality. Increasingly, brawn power is replaced by brainpower. The transition from muscle to mind warrants a change in management philosophy based on direction and control to consensus and commitment. Communication has two be two way and transparent, motivation is not by fear or favoritism but through fairness and equity, and leadership does not reside at the top and empowerment is what counts. As Horst Albach

points out, if in the past Karl Marx saw the essence of industrial capitalism as it developed through the 19th century in the separation of the worker from his means of production, in the era of information revolution, we see a potential for the reunification of the worker and his/her means of production: his/her brain. Several studies highlight the high value of human capital and the huge cost of its neglect. This is more so now than ever before. In 1992 Gary Stanley Becker won the Nobel Prize in Economics for his theories on human capital. The same year Peter Drucker wrote in Harvard Business Review that what many organizations say routinely-People are our great asset engineering concepts had disparate effect of maximum downsizing, called it the biggest lie! Publicly there is recognition that high skills, training, good communications and consensual and commitment systems provide sustained competitive advantage. Privately, however, employers and managers have been adopting contradictory strategies that emphasize deregulatory, hire and fire, low skill and low wage or the more you get policies. My own studies confirm that inducement strategies may get higher increase in output but at such cost that bottom lines do not improve proportionately or to a commensurate extent. Investment in education, skills and development of positive work values and involvement of people may bring moderate gains in productivity, but their effect on the bottom line-whether return on sales or investmentwill be much higher. For, under the latter system, the focus is on smart work, not hard work; work simplification, not work intensification. Where there is scope and opportunity to use not just the body, but also the brain creatively and innovatively, the gains-physical, financial and emotional-can be quantum, not just incremental. The rewards are phenomenal for the company and staggering for the individual. At the lower end if the brawn worker earns Rs. 5 an hour, the brainworker earns up to or more than Rs.5, 000 an hour. The profile and aspirations of the brainworkers are different from those of brawn workers. DIVERSITY IN EMPLOYMENT FULL-TIME EMPOYEES PART-TIME EMPOYEES HOME WORKERS CASUAL WORKERS CONTINGENT WORKERS SUBSTITUTE WORKERS MIGRANT WORKERS FOREIGN WORKERS TELE WORKERS APPRENTICES CHILD LABOUR WOMEN WORKERS WORKERS WITH FAMILIES DISPLACED WORKERS DISABLED WORKERS RATIONALISED WORKERS Evolving employment relationship. India has, over the past decade, has been making the transition from plan to market economy. The post-WTO scenario compels us to be competitive. But the UN Social Summit at Copenhagen (1995), the pressures to link international trade with social clause (Singapore and Seattle Labour Ministers Conference in, 1995 and 1999), he ILOs declaration on Fundamental Principles and Rights at Work (1998), its commitment to ensure decent work (1999) and the sustained campaigns (clean clothes campaign in Europe, for instance) for social labeling (carpets, tea, soccer balls, for instance), consumer boycotts (footwear, for instance), voluntary initiatives for

labour, health and safety and social and ethical auditing of firms across the entire spectrum of supply chain and the building momentum for Social Accountability (SA 800) mean that Indias competitiveness cannot be based on cheap labour. Some trans-nationals are now realizing the need to develop a humane work place, discharge social responsibility and ensure compliance with fair labour standards. Sustained development and competitive advantage is based on creation of wealth, improving environment and ensuring social equity. These values have to be put into action through integrity, commitment, transparency and accountability. The emerging trends portend that the feudal master and servant relationship has no place in the modern, globalising economy. Unfortunately, while governments and unions in developed countries seem to agree on this, employers from these countries continue to constantly explore opportunities for international division of labour based on cheap labour. The universal values are thus coming into conflict with common interests of employers. For vast proportions of the workers and their unions in developing countries such as workers, fundamental principles rights at work (embodying fair, core labour standards which prohibit use of child labour and forced labour, end discrimination in employment and remuneration and guarantee freedom of association and right to collective bargaining): For the millions who are unemployed and underemployed there is no question of rights at work (without work what can one talk about rights at work?) and decent work is a distant dream. Still, implication of the consolidation of forces in favour of universal core/fair labour standards is that India businesses, which want to compete in international market, have to care for not only their employees, but also those employed across the supply side. There is also another reason why this is important. To the extent technology minimizes differences in product quality, customer patronage and business success is contingent on well trained and motivated the staff that work with dealers and suppliers. Paradoxically, as Rosabeth Mary Kanter observed, this means that with shrinking core, regular workforce, human resource departments face a new situation: What was formerly inside the organization is going outside and what was formerly outside the organization is coming inside. Formerly strong relations are becoming loose and formerly loose relations are becoming strong.

RECENT TRENDS IN EMPLOYMENT PATTERNS

Declining stability and security in employment Declining labour intensity Growing irregular labour force, i.e., casual, contract, contingent, part-time, temporary, fixed-term, job-sharing, peripheral labour Shift from contract of service to contract of service (self-employment/business relationship) Increase in home-based work and the consequent blurring of the gap between work and home when work is home and home is work. Decline and/or the death of few occupation and the birth of a few others Decline in mutual commitment. One person, one skill, on job, one company concept is fading. Declining influence of trade unions

Transforming employment structures

There is a need for structural transformation in Indias employment pattern. The country may boast that it has achieved self-sufficiency. It means nearly two-thirds of 376 million workforce producing food for one billion. It also means that an average worker with a family size of four being able to produce enough food for the family. What about the other needs? This explains that if the labour intensity on the land does not come down we do not see any prospect for the landless laborers in agriculture ever-emerging crossing the poverty line without making food prices beyond the reach of the common man. Two things must happen to overcome the problem here. First, land reforms which are politically risky, with our parliament being dominated by the land-owning class. Second, rural industrialization and harnessing of the potential for food processing industries capitalizing on seasonal differences between India and the markets in the developed West. This will change the skill mix and thus transform the existing feudal orientation in employment relationship for better. New technologies in communication and transportation as well as mobility of capital and immobility of labour are resulting in shift away from mass production to parallel production over widely dispersed territories. As national boundaries are receding and firms are facing greater competition, they are creating activity networks internationally. These new inter-firm dependencies do not necessarily conform to industrial relations structures that assume the independence of individual firms. An ILO study asserts that the various forms of organization of the production and distribution of goods for the world market often involve complex, hierarchical networks of inter-firm relations. The present trends differ from those of the past in the following three ways. International subcontracting has grown relative to other types of commercial relative to other types of commercial relations, and trade in intermediate good and services constitute a growing share of total international trade. Domestic subcontracting is one the rise, and commercial linkages between firms are changing intensely. The study also notes that a major share of trade and production occurs not in the markets at large, within the internal and intermediate markets Production chains are becoming, in several cases, buyer-drivenThese firms design and/or market, but do not make the brand-named products they order. They are part of a new breed of manufacturers without factories that separate the production of goods from the design and marketing stages of the production process. Since 1980s, the world market for manufacturing goods, and product life cycles and employment intensity have been shrinking. Some have begun to argue that the era of mass production is over and needs to be replaced with what Piore and Sable call, flexible specialization, or what Womack, et. al. Call lean production or what Imai calls as Toyotoism or what Roobeck calls as post-Fordism. With new manufacturing methods, new approaches to work organization are requires. According to Storey, essential features of superior forms of new methods of manufacturing and work organization include: A fuller utilization of available work time Flexibility of work and of labor deployment Team working of one kind or another Just-in-time production Continuous improvement Learning by doing Innovative ideas contributed by employees The elimination of, non-value-added activities, and maintenance functions themselves.

In the circumstances, enhancing competitiveness should focus attention not merely on macro environment, but also on manufacturing itself. It is in manufacturing that we have a deep technological lag. To overcome this we need a conscious and systematic effort to modernize the industry and change the age-skill mix of workforce. Advanced technologies need a reorientation in human resource management policies and practices. The link between manufacturing and shop-floor employees underline could be understood better and facilitated through a series of softer elements including, for example, internal customer supply chains, new way of working cellular factory layout, etc. The flattening of organizational structures, shifting from sequential to parallel approach, integrating producers and customers into dynamic interaction and combining the efforts to head and hand, have become integral elements of the emerging systems of work organization. Competing in the new economy means understanding the new rules of the game. Success can no longer be based on past criteria. We need to understand the present, anticipate the future and their implications. Reducing transaction costs through IT is an imperative, as well as leveraging on time, speed, flexibility, technology and innovation, and working with people who are committed to new ways of working, living and growing. The new paradigm shift suggests that cost cutting as a competitive strategy becomes necessary for many enterprises, but soon such companies may reach a dead end. Value addition has infinite possibility. Productivity is necessary, not sufficient. Staff cost may be two per cent to 20 per cent. Other costs are over 80 per cent. Ask employees 10 percent of other cost and get 20 percent more wages: Take one, give two. Problem solving is good, but not adequate. Opportunities need to be harnessed. Customer satisfaction is important, but value creation is preferable. Working hours may shrink or stabilize to provide work-family balance. But firms should be ready for 24 hours, 7 days a week, 365 days a year service.

Managing differences
The worlds of Indian industrial worker are many. There are some who seek work, but no able to get it. There are others, fortunate enough to get work, but not willing to perform. In Margaret Thatchers terminology the former are workers and the latter, shirkers. At on end we have over 92 per cent of out labour force in the unorganized sector, a large proportion of which could be categorized sector, a large proportion of which could be categorized as exploited workers. NON-TRADITIONAL EMPLOYMENT METHODS Managing without managers Managing without traditional structures Managing without traditional owners Managing without unions Managing without quality boundaries Managing without full-time workforce Virtual organizations and virtual workforce Many of them may not have a letter of appointment that renders them vulnerable to firing without proof because there was no proof of hiring. Most of them are unskilled overworked, underpaid and exposed to relatively more difficult, if not hazardous jobs and lack any access to employee benefits and social security provisions. At the other end are a small but growing proportion of new professional workers in the modern sector who have become willing slaves in the market economy due to their high aspirations and ambitious competitive behavior want to have more in less time. Typically they work for about 12 to 14 hours a day six and a half days a week. They do not show any interest in unionization, prefer individual contracts and lack interest in collective relations due to lack of lateral trust in the face or cut-throat competition with their colleagues. There is a third category of workers, who constitute a fraction of the 8 per cent organized labour, who wield power through political patronage and perfected the art of exploiting meek managements and supine consumers and

community. There is another aspect of diversity in workforce based on differences in race, religion, sex, gender, age, language, etc. Mergers and acquisitions and globalised operations bring in additional cultural differences. If this diversity is not to become adversity, there is a need to identify the different needs of the different groups and manage them. In the years ahead, issues like the following will need special attention: Balancing work and family responsibilities Dual career planning Taking care of the needs of workers with families Creating an inclusive work environment for both men and women as colleagues and undertaking proactive, preventive measures to deal with prejudice, stereotyping and sexual harassment Identifying and providing for workers with special needs due to their background-primary and secondary-factors.

Conclusion
First, typical employment contract is becoming a typical and what was a typical is becoming typical. The fulltime core is shrinking and the contingent periphery is growing. Managements should take care to see that their arguments for flexibility do not become a cover for introducing dual systems for exploitation on the basis of comparatively cheap labour. Employment contract is not to be viewed merely in commercial terms. The days of bonded labour (and bonded employers) are numbered, if not gone already. But the need for human bondage is eternal. The emerging pattern of employment contract cannot ignore the need for combining commercial contract with emotional contract and balance it with fairness and justice. Secondly, downsizing may be right sizing. But take care to see that you do not downgrade your organization in the name of downsizing. If companies are not loyal to its workforce, they cannot expect the workforce to be loyal to them. Without a loyal, dedicated internal customers (workforce), companies cannot build a loyal, committed external customer base. Companies need to treasure knowledge that might be lost because its owners employees left. There is also the need to take stock of accumulated experience to avoid repeating old mistakes and to identify and implement the best practices. With a foot lose workforce organizations cannot accumulate knowledge and become learning organizations. You can buy hardware and software, not mind ware. Experience that resides in peoples minds and hearts needs to be shared, not shed; preserved, not to be disposed; passed on to the succeeding generations, not terminated. Similarly relations between and among people and groups of people have to be built on the basis of trust, not bought. Most organizations have to develop the wherewithal to preserve mind ware for posterity. For this top management should shift focus form closed to open strategic discussions; break with top-down control oriented planning; create new roles for supervisors and middle mangers whose jobs have become redundant due to information technology; and move away from conflict based responses to efforts for developing cooperative relations. Finally, quoting Konosuke Matsushita: For you, the essence of management lies in extracting ideas from the minds of the executives and putting them into the hand of the workers. For us, the essence of management lies in the art of mobilizing the intellectual resources of everyone working or the company. Since we have understood the true nature of economic and technological challenges better than you, we know that intelligence of a group of executives, impressive as this might be, is no longer enough to guarantee success. It means that individual managers should see their role as a coach. This means moving from telling to asking, asking to involving, ordering to persuading, knowing to letting other know, decision taking to decision-making, and deciding to inspiring.

Preparing workers for changes in the labour market: the challenge of the knowledge workers
Article By Werner Konrad Blenk Director, ILO Manila In our times the main carrier of economic change is the knowledge economy Knowledge flows globally and unequally, unchecked and instantly, so that as a banker clicks the computer in Frankfurt, capital moves in Tokyo. An order arrives in London production schedules change in Bangkok. Geographic boundaries have not disappeared politically but they are eroding economically. Some countries, firms and workers are taking extraordinary advantage of the opportunities generated by globalization, while others are suffering from it. When looking at Asia, we see that a number of countries, despite the economic crisis in the late 1990s, has been and are at the forefront of making use of the opportunities generated. The knowledge economy has flourished, driven by the communications revolution that has released information from spatial and temporal constraints. The knowledge economy is now also a networking economy. Like the shift from the agrarian to the industrial economy, the rise of the knowledge economy is changing many of our assumptions and transforming the world of work Preparing workers for the changes that the knowledge economy creates is a major task for governments, for the unions, and for industries. Making this process safer for the workers and all of us has become a major pre-occupation after 11 September. The changes are large, we see striking new economic and social phenomena in the knowledge economy. They include new types of firms and competitive strategies, new ways to interact and also new education and training possibilities. Is the promise of the knowledge economy too good to be true? The opportunities are clearly enormous - the knowledge economy is widening and upgrading skills Most ICT-intensive enterprises need workers with multiple skills On the other hand progress is uneven between countries and regions. There is even fear that ICT may lead to some de-skilling. It may also lead to de-skilling if personalized knowledge is devalued Many people lack the knowledge of the qualifications, or cannot adapt to change Older workers may not be given a chance. Young people have to build careers in a turbulent, fragmented and shifting labour market. The challenge therefore is to make the knowledge economy a socially just economy, a source of inclusion and equality, where rights are respected and peoples' needs are met. From the ILO's perspective, education, skills and learning were always high on the priority list In the knowledge economy they become the prime determinants of success or failure inclusion or exclusion. When we look at the general picture, we see skill shortages emerging in many industrialized countries The OECD estimated 600,000 vacancies worldwide for workers with ICT skills Training systems have to respond fast if business is not to be stifled but the need for education and training applies not only to technology specialists, but also across the board. Everyone, young and old have to cope with new demands. And as the pace of change accelerates, this means constant renewal of skills throughout life. Life-long learning in the knowledge economy is intrinsically linked with long-term productivity and worker mobility. Yet at present, no society h as in place really effective institutions for learning beyond the age of twenty-five. Public policies are needed to ensure that the social and economic goals are simultaneously achieved. If nothing is done, it is most likely that the countries with the best-educated people will benefit most. A major new effort is required to support education systems in the developing world. The ILO World Employment Report 2001 has examined some of these challenges and some of its results are reported in the following sections.

Literacy and Basic Education First we need to focus on the main bottleneck - difficulties in literacy and basic Education. Education, after all, is one of the most important contributions that governments can make to ensure participation in the network knowledge economy. In many industrialized countries, such as the Republic of Korea and Singapore, efforts have been made to equip schools with computers and connect them to local networks and the Internet In the OECD area, massive investment (some US$ 16 billion annually, but still only I to 2 percent of all education spending) goes into ICT hardware and software for schools. The United States now spends more on ICT than on books and other printed material. Access to the Internet in secondary schools is becoming universal in the OECD area. Connectivity in schools has only recently been addressed even in the world's wealthiest countries. In the world's poorest, it is a distant reality. Improving the quality of education and increasing enrolment in schools remain the fundamental goals in many developing countries There is little information on the extent of connectivity in schools in developing countries. A 1999 survey found that only 50 percent of schools have electricity, and only 7 5 percent have the necessary infrastructure to support an Internet host. The poor communications infrastructure in low-income countries, inadequate and unreliable electricity and telephone networks, and high telecommunications costs are formidable obstacles to connectivity. Add to this the very low household incomes, a resource poor public education system, a dearth of appropriate learning materials and teachers equipped to support a digital literacy programme, and the likelihood of access to the information society is bleak. Changing this course could occur only with a radical redirection of education policy and increased public investment, supported by substantial financial and technical resources In contrast, some of the rapidly growing middleincome countries, such as Malaysia and Thailand, are making good progress in connecting their schools to the Internet. Schools have a major task of "democratizing" access to the Internet, thereby correcting the disparities in home access, which are based largely on income. In the U.S., many programmes have targeted schools in poorer areas In Australia, the government funds an educational community access pilot project in rural areas for the socioeconomically disadvantaged In Malaysia, in a collaborative effort by the government, international development agencies and the private sector, a Mobile Internet Unit provides basic digital literacy programmes that target "non-mainstream" schools Nevertheless, in many low-income countries where there are major deficiencies in the education system, access remains elusive The majority of the people have had no exposure to the Internet. A partial, although promising solution is community-based learning centres which are springing up in many parts of the world Their sponsors vary - governments, donors, private enterprise, NGOs, and charity organizations are all involved. Simultaneously, barriers to entry to traditional education systems are now being lowered through the communications revolution. Rich, interactive "distance learning" offers those who have access to it a vast array of information and contacts with teachers and others Distance learning can be a powerful multiplier to school system where these lack resources in money books and teachers. Distance learning is generating new, often global partnerships between traditional and new "virtual" educational institutions, governments, enterprises and international and non-governmental organizations. Although many developing countries still has limited access to these technologies, major investments in telecommunications and information systems may dramatically improve access over time.

The Skills Challenge In the knowledge economy workers increasingly need higher levels of education, as well as various abilities and behavioral characteristics that help them adapt to rapidly changing work and social environments People's ability to find and retain a job has much to do with the possession of "foundation skills" that need to be regularly updated and supported with specific skills through training and lifelong processes. ICT is a leading growth sector in the industrialized economies. It stands to reason, then that the greatest demand for skills is also in this core sector of the communications revolution. One estimate for the U S finds that the demand for ICT skills is three times greater in the ICT sector can give a misleading impression of the overall demand for such skills In the vast majority of the OECD countries, the ICT sector employs no more than 5 percent of the workforce. On the other hand, while employing a relatively small share of the total workforce the ICT sector is nevertheless the engine of growth in several industrialized countries, contributing a disproportionate share of overall GDP Growth. Skill shortages in that sector, therefore, are a brake on growth. There is an important conclusion to draw, notwithstanding. In volume, the greatest demand for ICT-related skills is economy-wide, not just in the ICT sector. Thus, the most important challenge is the provision of ICT skills ~n the on-ICT sectors, the economy as a whole. Beyond numbers, it has proven exceedingly difficult to define the skills in demand It is equally difficult to know just how workers obtain their skills - particularly in some of the most recent applications of networking or software development. What is clear is that those working in ICT-related fields often have not acquired any specific qualifications to do so through education or training programmes. While they may have the immediate technology related skills, a number of industry surveys demonstrate that graduates are not "work-ready": they often lack the management, problem-solving, and interpersonal skills needed for being effective on the job. There is increasing demand for people who combine the latest technical knowledge and problem-solving ability with good communications skills. Across a broad range of occupations, a blend of computer-specific skills with business or other knowledge-specific to be particular field is now common and needs to rapidly find its way into curricula. About 70 percent of the workforce uses some form of ICT. The existence of an "ICT revolution" in the workplace appears to be found among workers who are younger, with more formal education, with responsibility who work fulltime in larger organizations, commanding higher pay, in the financial and business services sector and in managerial, professional or clerical positions. And many appear to be women. This is not surprising for the most intensive use of ICT devices on the job is concentrated among clerical and administrative staff, the majority of whom are women. This raises serious issues of equality. Available evidence suggests that people acquire the skills they need on the job from a variety of sources, beginning with their formal education. For example, the majority who enter the ICT and ICT-related sector do so through a three- or four-year university degree obtained in fields such as electrical engineering. The problem here is "up-stream" - the limited supply of students in mathematics and physics. The low percentage of women enrolling in electrical engineering and IT-related subjects is particularly evident. In developing countries, the skills profile of ICT workers is similar to that of the developed countries. For example, approximately 75 percent of those employed by the software companies in India are engineering graduates. Enterprises can either invest in the training of their own workforce or purchase the skills they need from the market. In those enterprises in which ICT is the core business, they do both. The reason is the decline in product life cycles and the rising importance of time-to-market in the most intensely competitive markets Leading-edge companies make significant investments in training At IBM and Nokia, for example, approximately 15 out of a total of 200 working days per year are typically spent learning new skills When an enterprise is faced with a product life cycle as short as six months, a training period of even six weeks represents one-quarter of the time

to market. Hence, search for ready-made "talent" is also on the rise, as this allows economies of time to be made. In many countries, both the access to and the content of training are the outcome of social dialogue between trade unions and employers' organizations, with or without the presence of government. The negotiation of training occurs at enterprise, industry or national tripartite levels. Trade unions have long had training among their core services and functions. There are clear signs that some trade unions are placing continued training high on the list of services they offer, as well as at the bargaining table Thus, trying to boost employability along with job security. This mirrors the need for lifelong learning as a requirement for all people In fact, it can be argued that lifelong learning is becoming as important an entitlement for today's employee as the right to a pension became in the past For example, evidence from India shows that unions have begun to take up the issue of training for new technologies. Many firms such as Motorola view training not merely in relation to the product development needs of the firm, but as a policy for attracting and retaining the best people. Employees at the cutting edge of the ICT field are highly motivated to keep up to date with the latest technologies, have very marketable skills, and use their employment as a means of further developing these skills- IBM seeks to create a learning environment conducive to retaining its employees, but the firm acknowledges that there will always be qualified people who leave With these "alumni" IBM nevertheless tries to keep contact, since with the greater mobility of some skills, employees could always return, and teamwork in any case can span the boundaries of any firm. SMES have limited capacity to engage in the kind of training that may be needed to address their skills shortages, or indeed in any training at all. For small firms, the cost of carrying a less-than-fully productive employee for six months or a year is often too great a burden on their limited resources. Rather than developing their own skills, they purchase them from the labour market, attempting to hire workers away from other companies in related fields. This in turn results in firms' outbidding one another for an existing pool of skilled workers instead of joining in cooperative efforts to enlarge the overall pool. The development of basic technological skills is the pre-employment responsibility of the government and the individual. A major issue in that development, however, is the slow reform of public-sector education and training. The traditional higher education system is constrained by its inability to change direction quickly. When there is a strong demand for new courses and combinations of courses, the development and accreditation of these courses can take up to three years. This is indeed long, in terms of "Internet-time". This is one reason why public-private partnerships in the area of education and training are on the rise. Nokia has been instrumental in building up ICT training institutes in China and South Africa (the South African Telecommunications Institute), for example. In a partnership with the United Nations Development Programme (UNDP), Cisco Systems is also active in the promotion of education and training as a means of narrowing the digital divide. The ICT industry 1las an obvious stake in closing t he skills gap. In Europe, major LCT companies have joined farces by creating a Skills Consortium through which to undertake a pilot project. The aim is to create a framework for students, education and training institutions and governments that defines and delivers the skills and competencies required by Europe's ICT industry. In conclusion, education and training are fundamental in a knowledge economy. It is probable that inadequacies in education and training have always been brakes on economic growth. They have arguably become more so in the digital age. This is because many of the benefits to come from the communications revolution depend upon

the use of the greater flows of information to create new knowledge Places with higher levels of education, school systems in which not merely facts are relayed but in which students learn how to learn through the new technologies, and enterprises in which continuous learning is both encouraged and expected will be favoured in the digital age. For this to occur, institutions need to adapt, and the full range of labour market institutions also need to change too. The global economy is often presented, as a fait accompli in which is nothing one can do but adapt. This is not the case, and training for the knowledge economy is a case in point. Training is a dialectical process between the trainee and the trainer, between the individual and the firm. Unions influence training structures and contents, by industry, and by governments. This is an important entry point for values, for what we call dignity at work, for concerns of equity and equality. In doing so, we will promote a globalised knowledge economy which actually works better for workers and their families. Beyond training, what can we do to promote this goal? I believe we need to make "Decent Work for All' a basic issue When we ask people what the main problems are in their lives, many refer to poverty, to exclusion, to unemployment When asked what is the solution, the reply is "work", and they always refer to decent work obtained in conditions of freedom, equity, security), and human dignity. Training certainly is a necessary ingredient for decent work. It will allow us to respond better to the aspirations of millions of people all over the world.

Changes in the Indian Economy

Tariff and non-tariff trade barriers lowered Industrial licensing abandoned in many sectors Private capital permitted in areas reserved for the public sector Restrictions on foreign direct investment removed Steps towards privatisation Food subsidies reduced and The rupee devalued.

Changes have lead to:

Strengthened presence of multinational companies Increase in redundancy Introduction of new technologies New management techniques etc.

Acc. To. J. Henry Richardson

Industrial relations is an art, the art of living together for purposes of production. The parties while working together learn this art by acquiring the skills of adjustment.

According to H.A. Clegg:

The field of industrial relations includes the study of workers and their trade unions, management, employers associations, and the State institutions concerned with the regulation of employment

According to NCL
Industrial relations affect not merely the interests of the two participants labour and management, but also the economic and social goals to which the State addresses itself. To regulate these relations in socially desirable channels is a function, which the State is in the best position to perform.

Parties to Industrial Relations

Trade Union

Employers Organisation

Government.

Features of Industrial Relations

Industrial relations are born out of employment relationship in an industrial setting. Industrial relations are characterized by both conflict and co-operation Vital environmental issues Industrial relations also involve the study of conditions conducive to the labour, management co-operation. Industrial relations also involve the study of conditions conducive to the labour, management co-operation. Policy framework laid down by the government

Management Objectives and goals affect Daily HR activities carried out by (4) Contract is administered

(1) Workers Collective Desire

(2) Unions begin organizing

(3) Collective negotiations

Objectives and goals affect Labour (union)

Scope of Industrial Relations

Promotion and development of healthy labourmanagement relations Maintenance of industrial peace and avoidance of industrial strife and Development of industrial democracy.

Contemporary Issues in Industrial Relations

Low wages Employment of Women Ignorance and Illiteracy Industrial Housing Child Labour.