Industrial Relations

MODULE-10

DEFINITION

Industrial Relation is a relation between employer and employees, employees and employees and employees and trade unions.
- Industrial dispute Act 1947

MEANING
PROCESS BY WHICH PEOPLE AND THEIR ORGANISATION INTERACT AT THE WORK PLACE TO ESTABLISH THE TERMS AND CONDITIONS OF EMPLOYMENT.

OBJECTIVES
1. To develop healthy labour -management relationship

+ Well organized and responsible trade unions and employers

+ + Spirit of collective Bargaining welfare work should be done by state , trade union and employers

2. Maintenance or Industrial Peace

Proper machinery should be setup for the prevention and settlement of Industrial dispute + Government should have the power to refer the dispute for Adjudication in case situation gets out of hand. + The provision of the bipartite and tripartite forums helps in settlement of disputes.

3. Development of Industrial democracy

Tripartite and bipartite bodies

Bipartite bodies involve employees and employers. e.g. 1. Work committee 2. Joint Management Council Tripartite bodies involve employees, employers and government. e.g. 1. The Indian Labour Conference(I.L.C) 2. The standing Labour Committee( SLC) 3. The Committee on Conventions 4. The Industrial Committee These various committees are basically of advisory nature, yet they carry considerable weight among the government, workers and employers.

IMPORTANCE

Uninterrupted production Reduction in Industrial Disputes High morale Mental Revolution: The industrial peace lies ultimately
in a transformed outlook on the part of both.

Reduced Wastage Spirit of true democracy

Evolution of IR
Agrarian Economy Stage : master-slave relationship Handicraft stage : People had their own factors of

production, family members were involved, no middlemen Cotton or Putting-out stage: crafts men sold their products to the financers who supplied them with necessary finances
Factory or the Industrial Capitalism Stage:

Trader decided to install his own machinery for production instead of depending on small cottage workers. Workers were brought under one roof. This lead to Industrial Revolution

Evolution of IR in India

Vedas focused on good mutual relations During British Rule, majority of workers were in agriculture and worked under subversive conditions and long working hours Passing of Factories Act in 1881 awakened the working class towards a concentrated approach. In 1890, the first Labour association was formed Viz., Bombay Mililhands Association

Evolution of IR in India

The period of The World War I(1914-1918) created a period of boom for employers as prices of commodities increased. But the wages of worker didnt increase. This economic distress brought workers together and an organised working class movement began in the country. Unrest took place at Ahemdabad ( led by Mahatma Gandhi) and the other at Madras ( led by B. P. Wadia ) in 1921.

Evolution of IR in India

After Independence it was realised that strikes/ lockout should be prevented to boost economy The Minimun Wages Act, the Factories Act, and the Employees State Insurance Act were enacted in 1948. First five year plan 1951 laid great importance to maintenance of industrial peace

Evolution of IR in India

Second five year plan evolved + minimum wages guidelines, + code of discipline, + code of conduct, + scheme of workers participation in management, + list of items on which work committees could conduct their business + model grievance procedure + Evaluation and Implementation machinery + voluntary arbitration

Evolution of IR in India

Third five year plan + The bonus act, 1956 was passed

Till 1991 a lot of emphasis was laid on maintenance of peaceful Industrial relations. HOWEVER SINCE LIBERATION POLICY SINCE 1991 COUNTRYS INDUSTRIAL RELATIONS ARE IN DOLDRUMS BECAUSE OF VARIOUS CHANGES IN THE INDUSTRIAL SCENE.

THEORIES TO IR

Unitary Perspective Pluralistic-Perspective Marxist Perspective

Unitary Perspective

Organization is harmonious system and is viewed as one happy family. Management and staff, and all members of the organization share the same objectives, interests and purposes; thus working together, hand-in-hand, towards the shared mutual goals.

Pluralistic-Perspective

Conflict is therefore seen as inevitable and trade unions are a natural response of workers to their exploitation by capital.

Marxist Perspective

This approach sees conflicts of interest and disagreements between managers and workers over the distribution of profits as normal and inescapable. 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.

THREE ACTORS OF IR OR COMPONENTS /PARTIES OF IR

Employer Employee Government

CAUSES OF POOR IR

Inadequate fixation of wage or wage structure; Unhealthy working conditions; Indiscipline Lack of human relations skill on the part of supervisors and other managers; Desire on the part of the workers for higher bonus or DA and the corresponding desire of the employers to give as little as possible; Inappropriate introduction of automation without providing the right climate; Unduly heavy workloads

CAUSES OF POOR IR

Inadequate welfare facilities; Dispute on sharing the gains of productivity; Unfair labour practices, like victimization and undue dismissal; Retrenchment, dismissals and lock-outs on the part of management and strikes on the part of the workers; Inter-union rivalries; and General economic and political environment, such as rising prices, strikes by others, and general indiscipline having their effect on the employees attitudes.

DEVELOPING SOUND IR

A sound industrial relations system is one in which relationships between management and employees (and their representatives) on the one hand, and between them and the State on the other, are more harmonious and cooperative than conflictual It creates an environment- conducive to economic efficiency And the motivation, productivity and development of the employee And generates employee loyalty and mutual trust.

PRE-REQUISITE FOR SOUND IR

Top management approach Developing sound HRM and IR policies and practices Provision of adequate supervisory training Follow-up results

State Act

Direct interest in preserving industrial peace in the country

Contd.

The three list are the centre the state list the concurrent

National commission on labour and Industrial Relations policy

The recommendations of the commission are;
1.

2.

Collective bargaining Recognition of trade union ( A trade union seeking recognition

should have a membership of atleast 30% of workers in the establishment. The minimum membership should be 25% if the recognition is sought for an industry in a local area.)

3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

Strikes/lockouts and gheraos Conciliation arbitration Unfair labor practices Work committees and joint management councils Settlement of industrial disputes Griveance procedure Discipline procedure Industrial harmony Industrial relations commission Labour courts

Industrial Dispute Act 1947

Important parts of the act are as following: 1. Objects of the Act 2. Definitions 3. Authorities under this Act

Industrial Dispute Act 1947

Objectives of the Act:
1.

2. 3. 4. 5. 6. 7.

To settle dispute arising between capital and labour by peaceful methods and through the machinery of conciliation, arbitration and if necessary by approaching the tribunals constituted under the act. To promote collective bargaining To prevent illegal strikes and lock-outs To ensure social justice to both employers and employees To promote measures for securing and preserving amity and good relations. To provide compensation to workmen in cases of layoff, retrenchment and closure. To protect workmen against victimisation by the employer and to ensure termination of industrial disputes in a peaceful manner.

Industrial Dispute Act 1947

Definition Industrial dispute means any dispute of difference between employers and employers, employers and workmen, workmen and workmen and connected with employment or terms of employment or conditions of labour, or any other person

Industrial Dispute Act 1947

Authorities under this act 1. Work committee 2. Conciliation officer 3. Board of conciliation 4. Courts of enquiry 5. Labour court 6. Industrial tribunals 7. National tribunals

Industrial Dispute Act 1947

Work committee
Is formed in an establishment which 100 or more workers are employed. Work committee ha representatives of workers and employers both.

Industrial Dispute Act 1947

Conciliation officer

Appointed by the Government by notifying in the Official Gazettee. Usually at the State level, Commissioners of Labour, Additional and Deputy Commissioners of Labour act as Conciliation Officer for disputes arising in any undertaking employing less than twenty workers. In the conciliation process the officer tries to bring the disputing parties together towards a settlement of the dispute and hence works as a mediator. The intervention of conciliation officer may be mandatory or discretionary. But in the disputes related to public utilities in respect of which proper notice is served to him, his intervention becomes mandatory

Industrial Dispute Act 1947

Board of Conciliation

It is a higher forum It consists of equal number of representatives of employers and employees under the chairmanship of an independent person, appointed by the government. The Board has to submit its report to the government regarding the dispute within two months from the date dispute was referred to it. However, depending on the case, the period can be extended.

Industrial Dispute Act 1947

Court of Enquiry

The Industrial Dispute Act, 1947 empowers the appropriate government to constitute a Court of Enquiry. This body basically is a fact-finding agency, constituted just to reveal the causes of the disputes and does not care much for the settlement thereof. The Court of Enquiry is required to submit its report to the government ordinarily within six months from the commencement of enquiry. The report of the court shall be published by the government within 30 days of its receipt.

Industrial Dispute Act 1947

Labour court

Labour court consists of one person only with necessary judicial qualification. The duty of the court is to enquire into the matters reffered to it and report there on to the appropriate government within six months from the commencement of the inquiry.

Industrial Dispute Act 1947

Industrial tribunals

Is constituted for the adjudication of industrial disputes relating to any matter.

Industrial Dispute Act 1947

National tribunals

Are constituted by central govt. It handles industrial disputes which involve questions of international importance.

Standing orders

Lay-off

Removal of surplus employees

The act of suspending or dismissing an employee, as for lack of work or because of corporate reorganization.

Retrenchment

When a company or government goes through retrenchment, it reduces outgoing money or expenditures or redirects focus in an attempt to become more financially solvent. Retrenchment is also a reduction of expenditures in order to become financially stable. Retrenchment is a pullback or a withdrawal from offering some current products or serving some markets.

COLLECTIVE BARGAINING

Definition
CB is a process of negotiation and other related pressure tactics ( like threats) adopted by the employers and the organised workers represented by their union in order to determine the terms and conditions of employment.

Importance

Increase the economic strength of unions and management. Establish uniform conditions of employment with a view to avoiding industrial disputes and maintaining stable peace in the industry. Secure a prompt and fair settlement of grievances. Avoids interruptions in work which follow strikes, go-slow tactics and similar coercive activities; Lay down fair rates of wages and norms of working conditions; Achieve an efficient operation of the plant; Promote the stability and prosperity of the industry; Provides a method or the regulation of the conditions of employment of those who are directly concerned about them;

Prerequisites of collective bargaining

There should be a shift in the attitude of employers and employees. They should realise that it does not imply litigation as under adjudication. Collective bargaining is best conducted at plant level The parties should enter into negotiations with a view of reaching an agreement. Parties should rely on facts and figure for successful negotiations. To ensure that collective bargaining functions properly no unfair labor practices should be followed.

Prerequisites of collective bargaining

The terms of contract should be put down in writing and embodied in document. When no agreement is reached parties should resort to conciliation, mediation, adjudication. Once an agreement is reached it should be honoured and fairly implemented. A provision of arbitration should be incorporated in the agreement, which should become operative when there is any disagreement on the interpretation of its term and conditions.

Union bargaining process

Union bargaining process

Following are the steps; 1. Prepare: This phase involves composition of a negotiation team. The negotiation team should consist of representatives of both the parties with adequate knowledge and skills for negotiation. 2. Discuss: Here, the parties decide the ground rules that will guide the negotiations.

Union bargaining process

Propose: This phase involves the initial opening statements and the possible options that exist to resolve them. In a word, this phase could be described as brainstorming. The exchange of messages takes place and opinion of both the parties is sought.

Bargain: negotiations are easy if a problem solving attitude is adopted. This stage comprises the time when what ifs and supposals are set forth and the drafting of agreements take place.

Union bargaining process

Settlement: Once the parties are through with the bargaining process, a consensual agreement is reached upon wherein both the parties agree to a common decision regarding the problem or the issue. This stage is described as consisting of effective joint implementation of the agreement through shared visions, strategic planning and negotiated change.

Collective bargaining in India.

First started in the First Five year plan

Initially states made efforts to encourage mutual settlement, collective bargaining and voluntary arbitration and thereby reducing the number of occasions it had to intervene. Because of the show of power by the two parties state gradually armed itself with legal powers. i.e., it could refer the dispute to adjudication or arbitration many labour leaders opposed compulsory arbitration

Despite this Collective Bargaining was introduced in India in 1952 Gradually it became significant Data released by Labour Bureau shows that Collective Bargaining spread to major segments

Collective Bargaining in India

Recent trends in Collective Bargaining

With entry of MNCs in country the Indian counterparts have also started paying better packages. Following are some of the items which have become an impotant part of agenda of Collective Bargaining House Rent Allowances Leave Travel Concession Educational Allowance

Collective Bargaining at different levels

At plant level At industrial level At the National level

PRODUCTIVITY BARGAINING

Productivity bargaining has been described as "an agreement in which advantages of one kind or another, such as higher wages or increased leisure, are given to workers in return for agreement on their part to accept changes in working practices or in methods or in organization of work which will lead to more efficient working. The changes in the interests of efficiency are seen as an integral part of the bargaining and as necessary contribution to meeting the cost of advantages conceded to the workers."

PRODUCTIVITY BARGAINING

The prime purpose of productivity bargaining is to raise labour productivity and lower unit labour costs, and this is achieved by the exchange of alternations in working practices for increased leisure, higher remuneration for labour, more comprehensive fringe benefits, and general increase in the status of manual employees. Productivity bargaining is a complex process. It involves lengthy, detailed negotiations about the implementation of a variety of management techniques such as work study and job evaluation. The content of negotiations is more or less comprehensive in the sense that it includes not only bargaining over earnings but bargaining over other related matters such as reductions in hours, introduction or extension of shift working, manning of machines, demarcation lines, the introduction of new payment system, and re-allocation of job control. In addition, the coverage of productivity bargaining is more or less comprehensive in that generally speaking it will aply to all employees in an enterprise. Productivity bargaining generally occurs at the level of the enterprise or company

Grievance
any dissatisfaction or feeling of injustice in connection with ones employment situation that is brought to the notice of management Dale s. Beach

Need for Grievance procedure

Helps in preventing grievances by encouraging management to probe underlying problems and to correct them. The management catches and solves a problem before it becomes grievance. It provides employees a formalised means of emotional release for their dissatisfaction. It brings human problems in open so that management can learn about them and try corrective action. It helps in establishing and maintaining a work culture or way of life.

Sources of grievances
A.

Grievances resulting from management policies: 1. wage rate 2. overtime 3. leave 4. transfer 5. seniority, promotion and discharges 6. lack of career planing and employee development plan 7. lack of role clarity 8. lack of regard for collective bargaining 9. hostility towards a labour union 10. autocratic leadership style of supervisor

Sources of grievancescontd
B. Grievances resulting from working conditions: 1. unrealistic 2. Non availability of tools and equipments 3. tight production standard 4. Bad physical conditions of the workplace 5. poor relationship with the supervisor 6. negative approach to the discipline

GRIEVANCE PROCEDURE
1. 2.

OPEN DOOR POLICY STEP LADDER PROCESS

Open door policy

Employees are free to meet the top executives of the organisation and get their grievances released.

Step- ladder process

STEP-1 Filling of Written grievance STEP- 2 Supervisor or foreman STEP-3 Head of department STEP-4 Joint Grievance committee STEP-5 Chief Executive STEP-6 Voluntary arbitration

settlement

Disciplinary
Discipline may be defined as a force that prompts individuals or groups to observe rules, regulations and procedure which are deemed to be necessary for effective functioning of an organisation

Need for Discipline procedure

To give and seek direction and responsibility To increase the working efficiency and morale of the employees so that their productivity can be increased To impart an element of certainty of despite several differences in informal behavioral patterns and other related changes in the organisation. To obtain a willing acceptance of the rules, regulations and procedures of an organisation so that organizations goals are met

Discipline procedure

Step 1: issuing a letter of charge to the employee

calling upon him for explanation Step 2: consideration of explanation Step 3: show cause notice Step 4: holding of a full fledged inquiry Step 5: considering the enquiry proceedings and findings and making final order of punishment Step 6: follow-up

Types of punishment
Forms of disciplinary actions 1. Oral warning 2. Written warning 3. Demotion in rank 4. Disciplinary lay off and suspension 5. Fines 6. Adverse remark in service book 7. Withholding of increments 8. Dismissal and discharge

INDISCIPLINE
Various socio-economic and cultural factors play a role in creating indiscipline in an organisation. Causes Of Indiscipline: 1. Unfair Management Practices: Management sometimes indulges in unfair practices like: Wage discrimination Non-compliance with promotional policies and transfer policies Discrimination in allotment of work Defective handling of grievances Payment of low wages Delay in payment of wages Creating low quality work life etc. These unfair management practices gradually result in indiscipline.

Causes Of Indiscipline: CONTD

2. Absence of Effective Leadership: Absence of effective leadership results in poor management in the areas of direction, guidance, instructions etc. This in turn, results in indiscipline. I am sure you remember the importance of leadership as studied in the last semester. If you do (which I suppose you do), you can relate the importance of effective leadership with handling indiscipline.

3. Communication Barriers: Communication barriers and absence of humane approach on the part of superiors result in frustration and indiscipline among the workers. The management should clearly formulate the policies regarding discipline. These policies should be communicated and the policies should be consistently followed in the organisations. The management should also be empathetic towards the employees.

Causes Of Indiscipline: CONTD

4. Varying Disciplinary Measures: Consistent disciplinary actions must be there in the organisation to provide equal justice to all concerned. At different times and for everyone, the same standard of disciplinary measures should be taken otherwise it may give rise to growing indiscipline in the industry in future i.e., the judicious function on the past of management must be free form may bias, privilege or favouritism. 5. Defective Supervision: Supervisor is the immediate boss of the workers and many disciplinary problems have their in faulty supervision. The attitude and behavior of the supervisor may create many problems. As the maintenance of the discipline is the discipline is the core f supervisory responsibilities, indiscipline may spring from the want of the right type of supervision.

Causes Of Indiscipline: CONTD

6. Inadequate attention to personnel Problems: Delay in solving personnel problems develops frustration among individual workers. The management should be proactive so that there is no discontent among the workers. It should adopt a parental attitude towards its employees. However it should be noted that no relationship can continue for long if it is one sided. What I am implying here is that the workers should also live up to their commitments. They should be reasonable in their demands.

7. Victimisation: Victimisation of subordinate also results in indiscipline. The management should not exploit the workers. It is also in the long-term interest of the management to take care of its internal customers

Causes Of Indiscipline: CONTD

8. Absence of Code of Conduct: This creates confusion and also provides chance for discrimination while taking disciplinary action. We will be discussing Code of Discipline in details etc. A code of conduct is a set of rules outlining the responsibilities of or proper practices for an individual, party or organization. Related concepts include ethical codes and honor codes. 8. Divide and Rule Policy: Many mangers in the business obtain secret information about other employees through their trusted assistants. The spying on employees is only productive of a vicious atmosphere and of undesirable in the organization. Henry Fayol has rightly pointed out that dividing enemy forces to weaken them is clever, but dividing one's own team is grave sin against the business. No amount of management skill is necessary for dividing personnel, but integrating personnel into a team is the challenging task of sound management.

Causes Of Indiscipline: CONTD

Deferring settlement of Employee Grievances: The employee grievances cannot be put off by deferring or neglecting their solutions. The grievances should properly be inquired into and settled by the managers in a reasonable period. Neglect of grievances often results in reduced performance, low morale and indiscipline among the employees. Strikes and work stoppages stem in many cases form the utter neglect of employee grievances. 10. Mis-judgment in Promotion and Placements: Mis-judgment in personnel matters like promotion and placements contribute to the growth of indiscipline in an enterprise. Cases of mis-judgment are carefully noted, widely circulated, and hotly debated by the employees. Expecting discipline from misruled people is not possible. Sometimes, undesired persons are placed on the jobs which makes the employees discontented, then giving rise to the problem of indiscipline.

Questions??