INTRODUCTION TO INDUSTRIAL RELATIONS – Chapter I

CHAPTER I

INTRODUCTION TO INDUSTRIAL RELATIONS

CONTENTS

1.1 Introduction to Industrial Relations

1.2 Objectives of Industrial Relations
1.3 Scope of Industrial Relations
1.4 Two Dominant Aspects of Industrial Relations
1.5 Industrial Relations in National and International Scenario

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 INTRODUCTION TO INDUSTRIAL RELATIONS – Chapter I

Chapter I

INTRODUCTION TO INDUSTRIAL RELATIONS

1.1 INTRODUCTION TO INDUSTRIAL RELATIONS

Industrial relations has become one of the most delicate and complex problems of modern
industrial society. Industrial progress is impossible without cooperation of labors and harmonious
relationships. Therefore, it is in the interest of all to create and maintain good relations between
employees (labor) and employers (management).

The term ‘Industrial Relations’ comprises two terms: ‘Industry’ and ‘Relations’. “Industry” refers
to “any productive activity in which an individual (or a group of individuals) is (are) engaged”.
By “relations” we mean “the relationships that exist within the industry between the employer
and his workmen” (Adewumi, 1993).

The term industrial relations explain the relationship between employees and management
which stem directly or indirectly from union-employer relationship. Industrial relations are the
relationships between employees and employers within the organizational settings. The field of
industrial relations looks at the relationship between management and workers, particularly
groups of workers represented by a union. Industrial relations are basically the interactions
between employers, employees and the government, and the institutions and associations through
which such interactions are mediated (Abell, 1985).

The term ‘industrial relations’ has a broad as well as a narrow outlook. Originally, industrial
relations were broadly defined to include the relationships and interactions between employers
and employees. From this perspective, industrial relations cover all aspects of the employment
relationship, including human resource management, employee relations, and union-management
(or labor) relations. Now its meaning has become more specific and restricted. Accordingly,
industrial relations pertains to the study and practice of collective bargaining, trade unionism,
and labor-management relations, while human resource management is a separate, largely

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distinct field that deals with nonunion employment relationships and the personnel practices and
policies of employers.

The relationships which arise at and out of the workplace generally include the relationships
between individual workers, the relationships between workers and their employer, the
relationships between employers, the relationships employers and workers have with the
organizations formed to promote their respective interests, and the relations between those
organizations, at all levels (Daniel and Millward, 1983). Industrial relations also includes the
processes through which these relationships are expressed (such as, collective bargaining,
workers’ participation in decision-making, and grievance and dispute settlement), and the
management of conflict between employers, workers and trade unions, when it arises.

The Labor Dictionary defines “Industrial Relations” as “the relations between employers and
employees and industry.” According to Dale Yoder, 1990 “Industrial Relations” describes
“relationships between managements and employees or among employees and their
organizations that characterize or grow out of employment” (Abell, 1985).

1.2 Objectives of Industrial Relations

The main objectives of industrial relations explained by Dickson (1981) are:

1. To safeguard the interest of labor and management by securing the highest level of
mutual understanding and good-will among all those sections in the industry which
participate in the process of production.
2. To avoid industrial conflict or strike and develop harmonious relations, which are an
essential factor in the productivity of workers and the industrial progress of a country.
3. To raise productivity to a higher level in an era of full employment by lessening the
tendency to high turnover and frequency absenteeism.
4. To establish and promote the growth of an industrial democracy based on labor
partnership in the sharing of profits and of managerial decisions, so that an individual’s
personality may grow its full stature for the benefit of the industry and of the country as
well.
5. To eliminate or minimize the number of strikes, lockouts and gheraos by providing
reasonable wages, improved living and working conditions, said fringe benefits.

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6. To improve the economic conditions of workers in the existing state of industrial

managements and political government.
7. Socialization of industries by making the state itself a major employer
8. Vesting of a proprietary interest of the workers in the industries in which they are
employed.
9. Control exercised by the state over industrial undertaking with a view to regulating
production and promoting harmonious industrial relations.

1.3 Scope of Industrial Relations

According to Flood, and Turner, (1993), there is no unanimity on the scope of industrial relations
since different terms, such as labor-management relations, employer-employee relations, union-
management relations, personnel relations, human relations, etc are used synonymously. But
with the growth of professional management, the industrial relations scene is represented by the
representatives of employers and representatives of the employees. The scope of industrial
relations is a comprehensive and total concept embracing industrial relations. It denotes all types
of inter-group and intra-group relations within industry, both formal and informal.

Industrial relations widens areas of administration, organization supervision and co-ordination,

liaison, the drafting of regulations, rules, laws or orders, and interpretation, job analysis, salary
and wage administration, wage surveys and pay schedules, recruitment and employment,
placement and induction, collective bargaining, employee benefit and social security measures.

1.4 Two Dominant Aspects of Industrial Relations

Lansbury and Prideaux (1981) discussed two dominant aspects of Industrial relations that would
facilitate WPM. The first aspect is cooperation and the second is conflict.

Cooperation

Cooperation between labor and capital is one of the basic requirements for the functioning of
modern industries and the growth of industrialization. Here labor means workers who man the
factories, mines and other industrial establishments or services. Capital stands for the owners of
business enterprises who supply the capital and own the final products. Cooperation is a form of
social interaction where in two or more persons work together to gain a common end.

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Cooperation involves reciprocity of intent as well as jointness of behavior, and it may even
become an end in itself.

Conflict

Conflict too is inherent in the industrial relations setup of today and it is endemic in human life.
It becomes apparent when industrial disputes resulting in strikes and lockouts become frequent.
The prevailing industrial unrest, the frequency of work-stop pages resulting either from strikes or
lockouts, and the slowing down of production are the occasional expressions of the ever-present
and latent conflict between workers and the management. Motives are important in conflict. A
conflict refers to incompatible behavior and any industrial conflict includes human conflict. It
emerges whenever two or more persons or groups seek to possess the same object, occupy the
same space or the same exclusive position, play incompatible roles and undertake mutually
incompatible means for achieving their purposes.

1.5 Industrial Relations in National and International Scenario

In various researches conducted so far, nationally and internationally, Industrial relations is used
to denote the collective relationships between management and the workers. Traditionally, the
term industrial relations is used to cover such aspects of industrial life as trade unionism,
collective bargaining, workers’ participation in management, discipline and grievance handling,
industrial disputes and interpretation of rules and code of conduct.

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”.

Clarke et al (1998), in reviewing the evolution of post-war employment relations between 1960
and the late 1990s across ten countries, conclude that between 1960 and 1980 there were few
significant structural changes to note. Between 1980 and the late 1990s, they remark on the legal
reforms in Britain, the Auroux reforms in France, decentralisation in Sweden and Australia; and
changes in Italy and Korea. Otherwise, they conclude ‘systematic changes were not great’,
though there were widespread changes in the balance between employers and unions within the

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systems, reflecting the changed economic environment. Likewise, Wallerstein et al (1997) and
Golden, Wallerstein and Lange (1999) find stability and resilience in industrial relations
institutions and no evidence of a general union decline or decentralization in bargaining.

Ferner and Hyman (1992; 1998) paint a similar picture of essential continuity in national
industrial relations systems throughout Europe in the face of pressures for convergence. While
there had been deregulation in countries such as Britain, this had not occurred in Germany and
Denmark, while in some countries there had been re-regulation. Crouch (1993) likewise
emphasizes the ‘power of continuity’ and searches hard to find changes of style and structure,
while Traxler et al (2001) find the prevalence of the ‘path dependency’ of institutions rather than
convergence resulting from internationalized market pressures.

A different view has been presented by Katz (1993) who argues that bargaining structure is
becoming more decentralized in Sweden, Australia, the former West Germany, Italy, the United
Kingdom and the United States. Flanagan (1999), using data on collective bargaining structure
from 1980-1994, also suggests there was bargaining decentralization in many countries, as well
as a decline in union density rates outside of Canada and the Scandinavian countries.

Also dissenting on a different path are Locke (1995) and Locke, Kochan and Piore (1995a;
1995b) who, in an eleven country study of recent changes in employment relations, suggest that
there has been a significant transformation of industrial relations practices taking place, which
varies both across and within industrial relations systems. While acknowledging the continuing
importance of national institutions and traditions, the authors emphasize the emergence of sub-
national variations in employment practices. This raises questions about the continued usefulness
of macro-models of employment relations and suggests the need for a focus on sub-national
models and patterns to understand the diverging patterns within each nation.

The view that distinct national systems of industrial relations are disappearing is given partial
support by the findings of Darbishire and Katz (1997) who argue in their seven-country study
that variation in employment relations is growing within countries everywhere and in similar
ways across countries. But the authors then qualify this assertion by arguing that the persistence
of sizeable country differences in the relative mix of new employment patterns and practices and
the role that national institutions play in complementing and shaping that mix, suggest a

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continuing influential role for national employment-related institutions. National institutional

structures affect the distribution of choice between potentially equally viable employment
patterns in an uncertain environment, as well as shaping the nature of the patterns themselves.
They appear to have considerable built-in resilience.

Some significant approaches to the analysis of Industrial Relations have given the theoretical
perspectives to analyze Industrial Relations and trade unionism. These theories have been used
extensively for studying and implementing Workers Participation in Management.

Systems Approach ( John Dunlop, 1958)

Dunlop considers Industrial Relations as a distinctive sub-system of society consisting of three

principle actors, managers, workers and government agencies. “An industrial relations system at
any one time in its development is regarded as comprised of certain actors, certain contexts, an
ideology which binds the industrial relations system together and a body of rules created to
govern the actors at the workplace and work community.”

IR = f(a, t, m, p, i)

Where:
a = Actors, Employers, Workers and government
t = Technological context
m = Market context
p = Power context
i = Ideological context that helps to bind them

Systems theory has been criticized on the following grounds:

i. That it is essentially a non-dynamic model of industrial relations from which it is difficult

to explain industrial relations change.
ii. That it concentrates on the structure of the system, ignoring the processes within it.

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iii. That it tends to ignore the essential elements of all industrial relations, that of the nature
and development of conflict itself.
iv. That it favors an analytical approach based on comparison rather than a problem solving
approach build on description.

1.5.2 Pluralistic Approach

In pluralism the organization is perceived as being made up of powerful and divergent sub-
groups, each with its own legitimate loyalties and with their own set of objectives and leaders. In
particular, the two predominant sub-groups in the pluralistic perspective are the management and
trade unions.

Consequently, the role of management would lean less towards enforcing and controlling and
more toward persuasion and co-ordination. Trade unions are deemed as legitimate
representatives of employees, conflict is dealt by collective bargaining and is viewed not
necessarily as a bad thing and, if managed, could in fact be channeled towards evolution and
positive change.

The pluralistic approach sees conflicts between management and employees as rational and
inevitable. The purpose is not so much to unify, integrate or liquidate sectional, group or class
interest as it is to secure a balance of power between the management and employees.

1.5.3 Marxist/Radical Perspective

The Marxist approach of industrial relations is based on the notion that the production system is
privately owned and is motivated by profits. This view of industrial relations looks at the nature
of the capitalist society, where there is a fundamental division of interest between capital and
labour, and sees workplace relations against this history. This perspective sees inequalities of
power and economic wealth as having their roots in the nature of the capitalist economic system.
Conflict is therefore seen as inevitable and trade unions are a natural response of workers to their
exploitation by capital. Whilst there may be periods of acquiescence, the Marxist view would be
that institutions of joint regulation would enhance rather than limit management's position as
they presume the continuation of capitalism rather than challenge it. There are two variants of
this view - the pessimist view propounded by Lenin, Trotsky and Michel’s and the optimist view

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propounded by Marx and Engels. According to Marxist’s theory, industrial relations are market
relations, thus this approach refers to the power relationship between capital and labor.

1.5.4 The Oxford Approach (Flanders, 1973)

Flanders has defined industrial relations as “a study of the institutions of job regulations”. He
views industrial relations as employment relationship between management and the workers
within certain institutionalized regulations.

This model is criticized on the grounds that it is too narrow to provide a comprehensive
framework for analyzing industrial relations properly. Institution and power factors are viewed as
of paramount importance, while variables viz., technology, market, status of the parties and
ideology are not given any prominence.

1.5.5 The Trusteeship Theory of Mahatma Gandhi

Gandhi ji was the greatest labor leader in modern India and had immense faith in the goodness of
man. He believed that many of the evils of the modern world have been brought about by wrong
systems and not by wrong individuals. His concept of trusteeship is a significant contribution in
the sphere of industrial relations. According to him, employer should not regard themselves as
sole owners of mills and factories of which they may be the legal owners. He insisted on
recognizing each individual worker as a human being. He laid down following conditions for a
successful strike:

i. The cause of the strike must be just and there should be no strike without a grievance.
ii. There should be no violence, and
iii. Non-strikers should never be molested.

The solutions of labor-management problems of today lie in properly understanding the

Gandhian approach to industrial relations. This approach strongly believes in the concept of
settling industrial disputes through mutual negotiations and arbitration without any animosity
between the parties. The Gandhian philosophy of Ahimsa (non-violence) and peaceful conduct of
relations and positive co-operation will lead us to the correct path of industrial relations.