It is the relationship between the management & the employees of an industry.

It facilitates harmonious relationships in an organization by setting a framework for the management and the employees. It is based on mutual compromise & adjustment. The state & legal system also have a role to play in the maintenance of a conflict-free industrial environment.

 Employees
Pillars on which the organizations are built. They contribute to the organizational objectives & are organizations most valuable resource. o To maintain harmonious industrial relations, employees have to be satisfied with the organizational policies and procedures. o It is managements responsibility to employ workers who suit the organizational culture & job requirements and invest in providing the benefits and incentives necessary to develop and retain them in the organization.
o o

 Trade unions
o
o o o

It constitute the employee representative bodies in an organization. It negotiate with the management, in the interests of the employees, at the organizational or industry level. Trade unions enjoy power and status based on the support of the employees. In India, there are number of central labor organizations like Indian National Trade Union Congress (INTUC), All India Trade Union Congress (AITUC), National Labor Organization (NLO), and Centre of Indian Trade Union (CITU).

 The Management
o

Management policies can help in maintaining high employee morale and in preventing industrial conflicts and disputes. The role of the management has undergone a big change from an explorative authoritative style to a more participative style.
The exploitative authoritative style
In initial years of industrialization, the management was authoritative & workers were paid low wages. The working conditions were pathetic, with the absence of even basic amenities like water. This led to the growth of the revolutionary trade unions.

 The Management
o

The benevolent authoritative style

With the advent of the human relation era, the management was kind, but strict towards the workers. Welfare amenities & other benefits were provided for their wellbeing.

Consultative management style

The trade unions strengths increased and they demanded a say in management-related issues. Management was forced to introduce a two-way communication channel with the employees. However, final word was of the management.

 The Government
It provides a basic framework within which the management, the trade unions, and the employees are expected to work for common good of the organization. If these three players fails to do this & are unable to sort out the differences, the Govt. intervenes. It intervene through the process of conciliation, arbitration and adjudication.

 To safeguard the interests of the labor and the management. To develop & secure mutual understanding and good relationships among all. To maintain industrial peace and harmony by preventing industrial conflicts. To improve the standard of living of the average worker by providing basic and standard amenities. To ensure discipline in the organization and in the industry. To improve the bargaining capacity of the workers.

 The term was coined by Sydney Webb & Beatrice Webb. It takes place when a number of work people enter into a negotiation as a bargaining unit with an employer or group of employers with the object of reaching an agreement on the conditions of the employment of the work people.

 Conditions favoring collective bargaining

o o

o o o

There should be a single union, or in case of multiple unions, a common agreement among them. Management should be open to the requests of the trade unions and should identify the union representatives. Organizational culture should foster the right fo collective bargaining. The role of third party should be minimized All the parties involved should aim at a win-win situation & not a win-lose situation.

 Group activity
o

The parties involved in the bargaining process represents different groups- the employees and the management.

Activity in levels
Starts with bipartite level- management & employees. o Can proceed to industry/national level o Govt. intervention through arbitration or adjudication is the lat level
o

 Flexibility
Aims at mutually agreeable & favorable solution to the problem o Flexibility in ideas & opinions, demands & requests, and decisions & agreement is the chief characteristics of the collective bargaining process.
o

Win-win Situation Builds Relationships

 An Art and a Science

o

o o

It is believed that is filled with bluffing, oratory dramatics and manipulation displayed by both the parties involved. An expert at it is someone who has practiced the art well. Its also a science because understanding the process of it and predicting the responses of the other party as accurately as possible, can help in better negotiation and enhanced performance in achieving the desired results.

 To provide opportunity to the workers, to voice their problems. To facilitate reaching a mutually acceptable solution. To resolve all conflicts/disputes in a mutually agreeable manner. To prevent any conflicts/disputes in the future through mutually signed contracts. To provide stabile and peaceful industrial relations in the organization. To enhance the productivity of the organization by preventing strikes, lock-outs, etc.

 Step1- Preparation for Negotiation

o o o o

Both the parties should have a clear understanding of the problem at hand. They should understand & interpret the existing contract to identify the loopholes or problem, if any. They should be in possession of all he facts and figures required for making a strong case. This case should be built in a strategic manner, after indentifying the needs of the opposing party and intelligently predicting their arguments; thus making the case very forceful.

 Step1- Preparation for Negotiation (contd.)

Information is acquired from both internal & external sources. o The internal data comprises of employee performance report, turnover and absenteeism report, etc. o The external data includes statistics related to cost of living, terms of recently-negotiated labor agreements, etc. o This enables the parties to frame their terms of negotiation and also anticipate the terms of negotiation of the other party.
o

 Step2- Negotiation
Submission of the demands of the trade union to the management. The demands are usually at higher side. o The management also do the same- by offering something less than what is has in mind. o Both starts at different levels, negotiate and reach a mutually acceptable agreement. o The union representative lower their demands and the management increases its offer.
o

 Step2- Negotiation (contd.)

After verbal agreement a mutually acceptable written agreement is entered into. o If this fails third party (conciliator or an arbitrator) is introduced. o If the third party fails it leads to industrial dispute. o Then finally, Govt. intervenes to resolve the dispute and both the parties are bound to abide by the judgment passed at the adjudication stage.
o

 Step3- Contract Administration

o o o

Contract is drafted as per the negotiations result. Both the parties have to abide by the contract. The terms and the agreement of the contract must be widely circulated among all the employees.

 Informative Participation
o

At this level, information regarding the balance sheet, production targets, new technology introduction etc. is shared with the workers. Worker representatives in different forums like work committees and joint management councils are consulted on matters such as employee benefits, employee welfare and work conditions. The management is under a moral obligation to accept and implement the unanimous decision of the workers council.

Consultative Participation
o

Associative Participation
o

 Administrative Participation
o

At this level, the workers council is given certain alternatives from which it can select the one it wants to implement.

Decisive Participation
At this level, decisions are taken jointly on matters relating to production and welfare and both the parties have to abide by them. Worker participation in management aids two-way communication which results in better flow of ideas and opinions. This helps the management design & implement employee-friendly policies with minimum resistance.
o

 The industrial dispute act 1949 provided for setting up of workers committee. It comprises both the management & the workers. In accordance of the act, work committees were set up in organizations employing 100 or more workers. The basic objective of setting committees was o promote measures for maintaining harmonious relations in the workplace. These committees have a president, a vice president, a secretary and a joint secretary The president is nominated by the employer and the vicepresident is a representative of the workers.

 The 2nd five year plan (1957-61) recommended the setting up of joint councils of management consisting of representatives of workers and the management. The Indian Labor Conference (ILC) accepted, in principle, the idea of setting up joint management councils in India. The basic objectives were identified as:
o o o o

Promoting cordial industrial relations. Enhancing the operational efficiency of workers. Providing welfare facilities to workers. Educating workers to contribute effectively to such schemes.